Exhibit 10.1

 

SERIES B CONVERTIBLE PREFERRED

STOCK AND WARRANT PURCHASE AGREEMENT

 

This Series B Convertible Preferred Stock and Warrant Purchase Agreement (this
“Agreement”), dated this 23rd day of April, 2013, is entered into by and among
Radius Health, Inc., a Delaware corporation (the “Corporation”), and the persons
listed on Schedule I attached hereto (the “Investors,” and each individually, an
“Investor”).

 

WHEREAS, the Corporation and the Investors wish to provide for the issuance of
shares of Series B Preferred Stock (as defined below) and warrants to purchase
Common Stock (as defined below), each as more specifically set forth
hereinafter.

 

NOW, THEREFORE. in consideration of the mutual covenants and agreements herein
contained, the parties hereto, intending to be legally bound, hereby agree as
follows:

 

SECTION 1.                            Authorized Preferred Stock.  Prior to the
Initial Closing (as defined in Section 4.1 hereof), the Corporation shall have
filed a Certificate of Designations of the Series B Convertible Preferred Stock
of the Corporation, in the form attached hereto as Exhibit A (the “Series B
Certificate”), with the Secretary of State of the State of Delaware, providing
for the authorization of a series of preferred stock of the Corporation to be
designated as Series B Convertible Preferred Stock, par value $.0001 per share
(the “Series B Preferred Stock”).

 

SECTION 2.                            Authorization of Issuance and Sale of
Series B Preferred Stock and Warrants.  Subject to the terms and conditions of
this Agreement, the Corporation has authorized the following:

 

(a)                                 the issuance and sale to the Investors, in
one or more Closings, of up to an aggregate of 980,000 shares of Series B
Preferred Stock (the “Shares”);

 

(b)                                 the issuance and sale to the Investors, in
one or more Closings, of warrants to acquire up to an aggregate of 2,450,000
shares (the “Warrant Shares”) of the Corporation’s Common Stock, par value
$.0001 per share (the “Common Stock”), with each such warrant to acquire Common
Stock being in the form attached hereto as Exhibit B (individually, a “Warrant”
and, collectively, the “Warrants”); and

 

(c)                                  the reservation of 9,800,000 shares of
Common Stock for issuance upon conversion of the Shares (the “Reserved Common
Shares”) and 2,450,000 shares of Common Stock for issuance upon exercise of the
Warrants.

 

SECTION 3.                            Sale and Delivery of Shares and Warrants.

 

3.1                               Agreement to Sell and Purchase the Shares and
Warrants. Subject to the terms and conditions hereof, the Corporation is selling
to each Investor and each Investor is severally (but not jointly) purchasing
from the Corporation, for the aggregate purchase price set forth opposite such
Investor’s name under the heading “Aggregate Purchase Price” on Schedule I
hereto: (i) the number of Shares set forth opposite the name of such Investor
under the heading “Series B Shares” on Schedule I hereto; and (ii) a Warrant to
acquire the number of Warrant Shares set forth opposite the name of such
Investor on Schedule I hereto under the heading “Warrant Shares”.

 

3.2                               Delivery of Shares and Warrants.  At each
Closing (as defined in Section 4.2), the Corporation shall deliver to each
Investor (i) a certificate or certificates, registered in the name of such
Investor, representing the number of Shares being purchased by such Investor at
such Closing and (ii) a

 

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Warrant issued in the name of such Investor to acquire the number of Warrant
Shares being purchased by such Investor, in each case in accordance with
Section 3.1 above.  In each case, delivery to each Investor of certificates
representing Shares and of a Warrant shall be made against receipt by the
Corporation of a check payable to the Corporation or a wire transfer to an
account designated by the Corporation in the full amount of the aggregate
purchase price set forth opposite such Investor’s name under the heading
“Aggregate Purchase Price” on Schedule I hereto.

 

SECTION 4.                            The Closings.

 

4.1                               Initial Closing.  An initial closing (the
“Initial Closing”) hereunder with respect to the transactions contemplated by
Sections 2 and 3 hereof will take place on the date hereof concurrently with the
execution and delivery of this Agreement by the Corporation and the Investors
(such date sometimes being referred to herein as the “Initial Closing Date”). 
The Initial Closing will take place remotely by facsimile or electronic
transmission of executed copies of the documents contemplated hereby.

 

4.2                               Subsequent Closings.  Subject to the terms and
conditions of this Agreement, the Corporation may sell, on or before May 10,
2013, to such other persons and entities as are acceptable to the Corporation,
up to the total number of Shares that were not issued and sold by the
Corporation at the Initial Closing, together with Warrants for the purchase of a
total number of shares of Common Stock equal to 25% of the number of shares
issuable upon conversion of the Shares to be issued pursuant to this Section 4.2
(each sale and issuance of such remaining Shares and associated Warrants at any
time after the Initial Closing Date being sometimes referred to herein as a
“Subsequent Closing”).  Any such sale shall be upon the same terms and
conditions as those contained herein.  Each such person or entity, by delivery
of an executed Investor signature page to this Agreement, shall become a party
to this Agreement and, as a condition to such sale, such person or entity shall
become a party to the Stockholders’ Agreement (as defined in Section 5.2(c)) by
executing and delivering to the Corporation an Instrument of Adherence
substantially in the form attached to the Stockholders’ Agreement.  Following
the execution and delivery by such person or entity of an Investor signature
page to this Agreement and of such Instrument of Adherence to the Stockholders’
Agreement, such person or entity shall become a party to this Agreement, shall
have the rights and obligations of an Investor hereunder, and shall be added to
Schedule I hereto (together with all relevant information regarding the number
of Shares, Warrant Shares and aggregate purchase price) without any further
action by the Corporation or the other Investors. The Investors party to this
Agreement and the Stockholders’ Agreement hereby irrevocably waive any
pre-emptive rights or rights of first offer they may possess now or hereafter
with respect to sales of Shares and Warrants (and any related issuances of
Reserved Common Shares and Warrant Shares) made pursuant to this Section 4.2. 
For convenience of reference, each of the Initial Closing and each Subsequent
Closing are sometimes hereinafter singly referred to as a “Closing” and,
together, they are referred to as the “Closings”.

 

SECTION 5.                            Representations and Warranties of the
Corporation to the Investors.

 

Except as set forth in the Corporation’s disclosure schedule dated as of the
date hereof and delivered herewith (the “Corporation’s Disclosure Schedule”),
which shall be arranged to correspond to the representations and warranties in
this Section 5, or, in each case, as applicable to the relevant other Sections
of this Agreement, and the disclosure in any portion of the Corporation’s
Disclosure Schedule shall qualify the corresponding provision in this Section 5
and any other provision of this Agreement, including but not limited to the
provisions of this Section 5, to which it is reasonably apparent on its face
that such disclosure relates notwithstanding the lack of any explicit
cross-reference, the Corporation hereby represents and warrants to the Investors
as of the date hereof as follows, except as set forth in the Public Filings (as
defined below):

 

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5.1                               Organization. The Corporation is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own and
lease its property and to carry on its Business (as defined in Section 5.6) as
presently conducted and as proposed to be conducted as described in the Public
Filings (as defined in Section 5.6).  The Corporation is duly qualified to do
business as a foreign corporation in the Commonwealth of Massachusetts.  The
Corporation does not own or lease property or engage in any activity in any
other jurisdiction which would require its qualification in such jurisdiction
and in which the failure to be so qualified would have a material adverse effect
on the Business, properties, assets, liabilities, condition (financial or
otherwise) or prospects of the Corporation (a “Corporation Material Adverse
Effect”).

 

5.2                               Capitalization.

 

(a)                                 The authorized capital stock of the
Corporation immediately prior to the Initial Closing consists of:

 

(i)                                     100,000,000 shares of Common Stock, of
which:

 

(1)                                 867,470 shares are validly issued and
outstanding, fully paid and nonassessable (including 266 shares issuable upon
exercise of warrants to purchase Common Stock);

 

(2)                                 30,702,220 shares have been duly reserved
for issuance upon conversion of the Series B Preferred, the Corporation’s
Series A-1 Convertible Preferred Stock, par value $.0001 per share (the
“Series A-1 Preferred Stock”), the Corporation’s Series A-2 Convertible
Preferred Stock, par value $.0001 per share (the “Series A-2 Preferred Stock”),
the Corporation’s Series A-3 Convertible Preferred Stock, par value $.0001 per
share, (the “Series A-3 Preferred Stock”), the Corporation’s Series A-4
Convertible Preferred Stock, par value $.0001 per share (the “Series A-4
Preferred Stock”), and the Corporation’s Series A-5 Convertible Preferred Stock,
par value $.0001 per share (the “Series A-5 Preferred Stock” and together with
the Series A-1 Preferred Stock, the Series A-2 Preferred Stock, the Series A-3
Preferred Stock, the Series A-4 Preferred Stock, the Series A-5 Preferred Stock
and the Corporation’s Series A-6 Convertible Preferred Stock, par value $.0001
per share (the “Series A-6 Preferred Stock”), the “Existing Preferred Stock”,
and the Existing Preferred Stock together with the Series B Preferred Stock, the
“Preferred Stock”) (including 147,340 shares of Series A-1 Preferred Stock
issuable upon exercise of warrants to purchase Series A-1 Preferred Stock); and

 

(3)                                 4,252,953 shares have been duly reserved for
issuance in connection with options outstanding or available under the
Corporation’s 2011 Equity Incentive Plan, as amended, or 2003 Long-Term
Incentive Plan, as amended (collectively, the “Plan Option Shares”).

 

(ii)                                  10,000,000 shares of Preferred Stock, of
which:

 

(1)                                 980,000 have been designated the Series B
Preferred Stock, none of which is issued or outstanding;

 

(2)                                 1,000,000 have been designated the
Series A-1 Preferred Stock, 939,612 of which are issued and outstanding, fully
paid and nonassessable;

 

(3)                                 983,213 have been designated the Series A-2
Preferred Stock, 983,208 of which are issued and outstanding, fully paid and
nonassessable;

 

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(4)                                 142,230 have been designated the Series A-3
Preferred Stock, 142,227 of which are issued and outstanding, fully paid and
nonassessable;

 

(5)                                 4,000 have been designated the Series A-4
Preferred Stock, 3,998 of which are issued and outstanding, fully paid and
nonassessable;

 

(6)                                 7,000 have been designated the Series A-5
Preferred Stock, 6,443 of which are issued and outstanding, fully paid and
nonassessable; and

 

(7)                                 800,000 have been designated the Series A-6
Preferred Stock, none of which are issued or outstanding.

 

(b)                                 Except (i) pursuant to the terms of this
Agreement, (ii) at any time prior to the Initial Closing, pursuant to the terms
of the Amended and Restated Stockholders’ Agreement, dated as of May 17, 2011,
by and among the Corporation and the stockholders named therein, as amended to
date (the “Existing Stockholders’ Agreement”), (iii) as of and at all times
following the Initial Closing, pursuant to the terms of that certain Amended and
Restated Stockholders’ Agreement to be entered into in connection with the
Initial Closing, as contemplated by Section 7.1(e), in the form attached hereto
as Exhibit C (the “Stockholders’ Agreement”), and (iv) as set forth in Schedule
5.2 attached hereto, there are and, immediately following the Initial Closing,
there will be: (1) no outstanding warrants, options, rights, agreements,
convertible securities or other commitments or instruments pursuant to which the
Corporation is or may become obligated to issue, sell, repurchase or redeem any
shares of capital stock or other securities of the Corporation (other than the
Plan Option Shares); (2) no preemptive, contractual or similar rights to
purchase or otherwise acquire shares of capital stock of the Corporation
pursuant to any provision of law, , the Certificate of Incorporation of the
Corporation (as amended and/or restated, including without limitation, the
Series B Certificate and the Certificate of Designations of the Series A-1
Convertible Preferred Stock, Series A-2 Convertible Preferred Stock, Series A-3
Convertible Preferred Stock, Series A-4 Convertible Preferred Stock, Series A-5
Convertible Preferred Stock and Series A-6 Convertible Preferred Stock of the
Corporation filed by the Corporation with the Secretary of State of the State of
Delaware on May 17, 2011, as amended to date and from time to time (the
“Existing Certificate”), the “Charter”), the by-laws of the Corporation (the
“by-laws”) or any agreement to which the Corporation is a party or may otherwise
be bound; (3) no restrictions on the transfer of capital stock of the
Corporation imposed by the Charter or by-laws of the Corporation, any agreement
to which the Corporation is a party, any order of any court or any governmental
agency to which the Corporation is subject, or any statute other than those
imposed by relevant state and federal securities laws; (4) no cumulative voting
rights for any of the Corporation’s capital stock; (5) no registration rights
under the Securities Act of 1933, as amended (the “Securities Act”), with
respect to shares of the Corporation’s capital stock; (6) to the Corporation’s
Knowledge (as defined below), no options or other rights to purchase shares of
capital stock from stockholders of the Corporation granted by such stockholders;
and (7) no agreements, written or oral, between the Corporation and any holder
of its securities, or, to the Corporation’s Knowledge, among holders of its
securities, relating to the acquisition, disposition or voting of the securities
of the Corporation.

 

5.3                               Authorization of this Agreement and the
Stockholders’ Agreement. The execution, delivery and performance by the
Corporation of this Agreement and the Stockholders’ Agreement and the
consummation of the transactions contemplated hereby and thereby, including the
filing of the Series B Certificate, have been duly authorized by all requisite
action on the part of the Corporation. Each of this Agreement and the
Stockholders’ Agreement has been duly executed and delivered by the Corporation
and constitutes a valid and binding obligation of the Corporation, enforceable
in accordance with its respective terms. The execution, delivery and performance
of this Agreement and the Stockholders’ Agreement, the filing of the Series B
Certificate and the compliance

 

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with the provisions hereof and thereof by the Corporation, will not:

 

(a)                                 violate any provision of law, statute,
ordinance, rule or regulation or any ruling, writ, injunction, order, judgment
or decree of any court, administrative agency or other governmental body;

 

(b)                                 conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute (with due notice or
lapse of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under (i) any agreement, document, instrument,
contract, understanding, arrangement, note, indenture, mortgage or lease to
which the Corporation is a party or under which the Corporation or any of its
assets is bound, which conflict, breach or default would have a Corporation
Material Adverse Effect, (ii) the Charter, or (iii) the by-laws;

 

(c)                                  result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Corporation; or

 

(d)                                 conflict with any stockholder’s rights to
participate in the transactions contemplated hereby, including but not limited
to any rights to purchase Shares or Warrants hereunder.

 

5.4                               Authorization of Shares, Warrants and Reserved
Common Shares.

 

(a)                                 The issuance, sale and delivery of the
Shares and Warrants pursuant to the terms hereof have been duly authorized by
all requisite action of the Corporation, and, when, in the case of the Shares,
issued, sold and delivered in accordance with the terms of this Agreement or, in
the case of the Warrants, exercised in accordance with the terms of the
Warrants, the Shares and Warrant Shares, respectively, will be validly issued
and outstanding, fully paid and nonassessable, with no personal liability
attaching to the ownership thereof, and, except as may be set forth in the
Stockholders’ Agreement (with respect to which the Corporation is in compliance
with its obligations thereunder), not subject to preemptive or any other similar
rights of the stockholders of the Corporation or others.

 

(b)                                 The reservation, issuance, sale and delivery
by the Corporation of the Reserved Common Shares and the Warrant Shares have
been duly authorized by all requisite action of the Corporation, and the
Reserved Common Shares and the Warrant Shares have been duly reserved in
accordance with Section 2 of this Agreement.  Upon the issuance and delivery of
the Reserved Common Shares in accordance with the terms of this Agreement, the
Reserved Common Shares will be validly issued and outstanding, fully paid and
nonassessable and, except as may be set forth in the Stockholders’ Agreement,
not subject to preemptive or any other similar rights of the stockholders of the
Corporation or others.

 

5.5                               Consents and Approvals. No authorization,
consent, approval or other order of, or declaration to or filing with, any
governmental agency or body (other than filings of a Form D required to be made
under applicable federal securities laws and filings required to be made under
applicable state securities laws) or any other person, entity or association is
required for: (a) the valid authorization, execution, delivery and performance
by the Corporation of this Agreement and the Stockholders’ Agreement; (b) the
valid authorization, issuance, sale and delivery of the Shares; (c) the valid
authorization, issuance, sale and delivery of the Warrants and Warrant Shares;
(d) the valid authorization, reservation, issuance, sale and delivery of the
Reserved Common Shares; or (e) the filing of the Series B Certificate.  The
Corporation has obtained all other consents that are necessary to permit the
consummation of the transactions contemplated hereby and thereby.

 

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5.6                               Business of the Corporation.

 

(a)                                 Except as set forth in Schedule 5.6(a) of
the Corporation’s Disclosure Schedule, the business of the Corporation (the
“Business”) is described in the annual and other reports filed by the
Corporation with the Securities and Exchange Commission (collectively, the
“Public Filings”).

 

(b)                                 All agreements or commitments to which the
Corporation is a party or by which the Corporation or the Corporation’s assets
and properties are bound that are material to the business of the Corporation as
currently conducted are included as exhibits to the Public Filings.  Without
limitation of the foregoing, Schedule 5.6 of the Corporation’s Disclosure
Schedule sets forth a list of all of the types of agreements or commitments set
forth below that are not included as exhibits to the Public Filings (each such
agreement included in the Public Filings and each agreement listed on Schedule
5.6 of the Corporation’s Disclosure Schedule being sometimes referred to herein
as a “Material Agreement”):

 

(i)                                     agreements which require future
expenditures by the Corporation in excess of $250,000 or which might result in
payments to the Corporation in excess of $250,000;

 

(ii)                                  employment and consulting agreements,
employee benefit, bonus, pension, profit-sharing, stock option, stock purchase
and similar plans and arrangements;

 

(iii)                               agreements involving research, development,
or the license of Intellectual Property (as defined in Section 5.12) (other than
research, development, or license agreements which require future expenditures
by the Corporation in amounts less than $250,000 or which might result in
payments to the Corporation in amounts less than $250,000 in each case that do
not grant to a third party or to the Corporation any rights in connection with
the commercialization of any products), the granting of any right of first
refusal, or right of first offer or comparable right with respect to any
Intellectual Property or payment or receipt by the Corporation of milestone
payments or royalties;

 

(iv)                              agreements relating to a joint venture,
partnership, collaboration or other arrangement involving a sharing of profits,
losses, costs or liabilities with another person or entity;

 

(v)                                 distributor, sales representative or similar
agreements;

 

(vi)                              agreements with any current or former
stockholder, officer or director of the Corporation or any “affiliate” or
“associate” of such persons (as such terms are defined in the rules and
regulations promulgated under the Securities Act), including without limitation
agreements or other arrangements providing for the furnishing of services by,
rental of real or personal property from, or otherwise requiring payments to,
any such person or entity;

 

(vii)                           agreements under which the Corporation is
restricted from carrying on any business, or competing in any line of business,
anywhere in the world;

 

(viii)                        indentures, trust agreements, loan agreements or
notes that involve or evidence outstanding indebtedness, obligations or
liabilities for borrowed money;

 

(ix)                              agreements for the disposition of a material
portion of the Corporation’s assets (other than for the sale of inventory in the
ordinary course of business);

 

(x)                                 agreements of surety, guarantee or
indemnification;

 

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(xi)                              interest rate, equity or other swap or
derivative instruments;

 

(xii)                           agreements obligating Corporation to register
securities under the Securities Act; and

 

(xiii)                        agreements for the acquisition of any of the
assets, properties, securities or other ownership interests of the Corporation
or another person or the grant to any person of any options, rights of first
refusal, or preferential or similar rights to purchase any of such assets,
properties, securities or other ownership interests.

 

(c)                                  The Corporation has no present expectation
or intention of not fully performing all of its obligations under each Material
Agreement and, to the Corporation’s Knowledge, there is no breach or anticipated
breach by any other party or parties to any Material Agreements.

 

(d)                                 All of the Material Agreements are valid, in
full force and effect and binding against the Corporation and to the
Corporation’s Knowledge, binding against the other parties thereto in accordance
with their respective terms.  Neither the Corporation, nor, to the Corporation’s
Knowledge, any other party thereto, is in default of any of its obligations
under any of the Material Agreements, nor, to the Corporation’s Knowledge, does
any condition exist that with notice or lapse of time or both would constitute a
default thereunder.  The Corporation has delivered or made available to each
Investor or its representative true and complete copies of all of the foregoing
Material Agreements or an accurate summary of any oral Material Agreements (and
all written amendments or other modifications thereto).

 

(e)                                  Except as provided in Schedule 5.6(e) of
the Corporation’s Disclosure Schedule: (i) there are no actions, suits,
arbitrations, claims, investigations or legal or administrative proceedings
pending or, to the Corporation’s Knowledge, threatened, against the Corporation,
whether at law or in equity; (ii) there are no judgments, decrees, injunctions
or orders of any court, government department, commission, agency,
instrumentality or arbitrator entered or existing against the Corporation or any
of its assets or properties for any of the foregoing or otherwise; and (iii) the
Corporation has not admitted in writing its inability to pay its debts generally
as they become due, filed or consented to the filing against it of a petition in
bankruptcy or a petition to take advantage of any insolvency act, made an
assignment for the benefit of creditors, consented to the appointment of a
receiver for itself or for the whole or any substantial part of its property, or
had a petition in bankruptcy filed against it, been adjudicated a bankrupt, or
filed a petition or answer seeking reorganization or arrangement under the
federal bankruptcy laws or any other laws of the United States or any other
jurisdiction.

 

(f)                                   Except as set forth in Schedule 5.6(f) of
the Corporation’s Disclosure Schedule, the Corporation is in compliance with all
obligations, agreements and conditions contained in any evidence of indebtedness
or any loan agreement or other contract or agreement (whether or not relating to
indebtedness) to which the Corporation is a party or is subject (collectively,
the “Obligations”), the lack of compliance with which could afford to any person
the right to accelerate any indebtedness or terminate any right of or agreement
with the Corporation. To the Corporation’s Knowledge, all other parties to such
Obligations are in compliance with the terms and conditions of such Obligations.

 

(g)                                  Except for employment and consulting
agreements set forth on Schedule 5.6 attached hereto and for agreements and
arrangements relating to the Plan Option Shares and except as provided in
Schedule 5.6(g) of the Corporation’s Disclosure Schedule, this Agreement and the
Stockholders’ Agreement, there are no agreements, understandings or proposed
transactions between the Corporation and any of its officers, directors or other
“affiliates” (as defined in Rule 405 promulgated under the Securities Act).

 

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(h)                                 To the Corporation’s Knowledge, no employee
of or consultant to the Corporation is in violation of any term of any
employment contract, patent disclosure agreement or any other contract or
agreement, including, but not limited to, those matters relating (i) to the
relationship of any such employee with the Corporation or to any other party as
a result of the nature of the Corporation’s Business as currently conducted, or
(ii) to unfair competition, trade secrets or proprietary or confidential
information.

 

(i)                                     Each employee and director of or
consultant to the Corporation, and each other person who has been issued shares
of the Corporation’s Common Stock or options to purchase shares of the
Corporation’s Common Stock is a signatory to, and is bound by, the Stockholders’
Agreement and, in the case of Common Stock issued to employees, directors and
consultants, a stock restriction agreement, all with stock transfer restrictions
and rights of first offer in favor of the Corporation in a form previously
approved by the Board of Directors of the Corporation (the “Board of
Directors”). In addition, each such stock restriction agreement contains a
vesting schedule previously approved by the Board of Directors.

 

(j)                                    The Corporation does not have any
collective bargaining agreements covering any of its employees or any employee
benefit plans.

 

(k)                                 The Corporation has at all times complied
with all provisions of its by-laws and Charter, and is not in violation of or
default under any provision thereof, any contract, instrument, judgment, order,
writ or decree to which it is a party or by which it or any of its properties
are bound, and the Corporation is not in violation of any material provision of
any federal or state statute, rule or regulation applicable to the Corporation.

 

5.7                               Disclosure.  None of this Agreement, the
Stockholders’ Agreement or the Public Filings, nor any document, certificate or
instrument furnished to any of the Investors or their counsel in connection with
the transactions contemplated by this Agreement, contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.  To the
Corporation’s Knowledge, there is no fact which the Corporation has not
disclosed to the Investors or their counsel which would reasonably be expected
to result in a Corporation Material Adverse Effect.

 

5.8                               Financial Statements.  The Corporation has
furnished or made available to each of the Investors (i) a complete and accurate
copy of the audited balance sheet of the Corporation at December 31, 2012 and
the related audited statements of operations and cash flows for the fiscal year
then ended, and (ii) the unaudited balance sheet of the Corporation (the
“Balance Sheet”) at February 28, 2013 (the “Balance Sheet Date”) and the related
unaudited statements of operations and cash flows for the two month period then
ended (collectively, the “Financial Statements”).  The Financial Statements are
in accordance with the books and records of the Corporation, present fairly in
all material respects the financial condition and results of operations of the
Corporation at the dates and for the periods indicated, and have been prepared
in accordance with generally accepted accounting principles (“GAAP”)
consistently applied, except, in the case of any unaudited Financial Statements,
for the absence of footnotes normally contained therein and subject to normal
and recurring year-end audit adjustments that are substantially consistent with
prior year-end audit adjustments.

 

5.9                               Absence of Undisclosed Liabilities.  The
Corporation has no liabilities of any nature (whether known or unknown and
whether absolute or contingent), except for (a) liabilities shown on the Balance
Sheet and (b) contractual and other liabilities incurred in the ordinary course
of business which are not required by GAAP to be reflected on a balance sheet
and which would not, either

 

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individually or in the aggregate, have or result in a Corporation Material
Adverse Effect.  The Corporation does not have any liabilities (and there is no
basis for any present or, to the Corporation’s Knowledge, future proceeding
against the Corporation giving rise to any liability) arising out of any
personal injury and/or death or damage to property relating to or arising in
connection with any clinical trials conducted by or on behalf of the
Corporation.

 

5.10                        Absence of Changes.  Since the Balance Sheet Date
and except as contemplated by this Agreement, there has been (i) no event or
fact that individually or in the aggregate has had a Corporation Material
Adverse Effect, (ii) no declaration, setting aside or payment of any dividend or
other distribution with respect to, or any direct or indirect redemption or
acquisition of, any of the capital stock of the Corporation, (iii) no waiver of
any valuable right of the Corporation or cancellation of any debt or claim held
by the Corporation, (iv) no loan by the Corporation to any officer, director,
employee or stockholder of the Corporation, or any agreement or commitment
therefor, (v) no increase, direct or indirect, in the compensation paid or
payable to any officer, director, employee or agent Corporation and no change in
the executive management of the Corporation or the terms of their employment,
(vi) no material loss, destruction or damage to any property of the Corporation,
whether or not insured, (vii) no labor disputes involving the Corporation, or
(viii) no acquisition or disposition of any assets (or any contract or
arrangement therefor), nor any transaction by the Corporation otherwise than for
fair value in the ordinary course of business.

 

5.11                        Payment of Taxes. The Corporation has prepared and
filed within the time prescribed by, and in material compliance with, applicable
law and regulations, all federal, state and local income, excise or franchise
tax returns, real estate and personal property tax returns, sales and use tax
returns, payroll tax returns and other tax returns required to be filed by it,
and has paid or made provision for the payment of all accrued and paid taxes and
other charges to which the Corporation is subject and which are not currently
due and payable. The federal income tax returns of the Corporation have never
been audited by the Internal Revenue Service. Neither the Internal Revenue
Service nor any other taxing authority is now asserting nor is threatening to
assert against the Corporation any deficiency or claim for additional taxes or
interest thereon or penalties in connection therewith, and the Corporation does
not know of any such deficiency or basis for such deficiency or claim.

 

5.12                        Intellectual Property.

 

(a)                                 Schedule 5.12(a) lists each patent, patent
application, copyright registration or application therefor, mask work
registration or application therefor, and trademark, trademark application,
trade name, service mark and domain name registration or application therefor
owned by the Corporation, licensed by the Corporation or otherwise used by the
Corporation (collectively, the “Listed Rights”). For each of the Listed Rights
set forth on Schedule 5.12(a), an assignment to the Corporation of all right,
title and interest in the Listed Right (or license to practice the Listed Right
if owned by others) has been executed. All employees of and consultants to the
Corporation have executed an agreement providing for the assignment to the
Corporation of all right, title and interest in any and all inventions,
creations, works and ideas made or conceived or reduced to practice wholly or in
part during the period of their employment or consultancy with the Corporation,
including all Listed Rights, to the extent described in any such agreement and
providing for customary provisions relating to confidentiality and
non-competition.

 

(b)                                 Except as set forth on Schedule 5.12(b), the
Listed Rights comprise all of the patents, patent applications, registered
trademarks and service marks, trademark applications, trade names, registered
copyrights and all licenses that have been obtained by the Corporation, and
which, to the Corporation’s Knowledge, are necessary for the conduct of the
Business of the Corporation as now being conducted and as proposed to be
conducted in the Public Filings. Except as set forth on Schedule

 

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5.12(b), the Corporation owns all of the Listed Rights and Intellectual
Property, as hereinafter defined, free and clear of any valid and enforceable
rights, claims, liens, preferences of any party against such Intellectual
Property. To the Corporation’s Knowledge, except as set forth in Schedule
5.12(b), the Listed Rights and Intellectual Property are valid and enforceable
rights and the practice of such rights does not infringe or conflict with the
rights of any third party.

 

(c)                                  To the Corporation’s Knowledge, the
Corporation owns or has the right to use all Intellectual Property necessary
(i) to use, manufacture, market and distribute the Customer Deliverables (as
defined below) and (ii) to operate the Internal Systems (as defined below). The
Corporation has taken all reasonable measures to protect the proprietary nature
of each item of Corporation Intellectual Property (as defined below), and to
maintain in confidence all trade secrets and confidential information that it
owns or uses. To the Corporation’s Knowledge no other person or entity has any
valid and enforceable rights to any of the Corporation Intellectual Property
owned by the Corporation (except as set forth in Schedule 5.12(c)), and no other
person or entity is infringing, violating or misappropriating any of the
Corporation Intellectual Property.

 

(d)                                 To the Corporation’s Knowledge, none of the
Customer Deliverables, or the manufacture, marketing, sale, distribution,
importation, provision or use thereof, infringes or violates, or constitutes a
misappropriation of, any valid and enforceable Intellectual Property rights of
any person or entity; and, to the Corporation’s Knowledge neither the marketing,
distribution, provision or use of any Customer Deliverables currently under
development by the Corporation will, when such Customer Deliverables are
commercially released by the Corporation, infringe or violate, or constitute a
misappropriation of, any valid and enforceable Intellectual Property rights of
any person or entity that exist today. To the Corporation’s Knowledge, none of
the Internal Systems, or the use thereof, infringes or violates, or constitutes
a misappropriation of, any valid and enforceable Intellectual Property rights of
any person or entity.

 

(e)                                  There is neither pending nor overtly
threatened, or, to the Corporation’s Knowledge, any basis for, any claim or
litigation against the Corporation contesting the validity or right to use any
of the Listed Rights or Intellectual Property, and the Corporation has not
received any notice of infringement upon or conflict with any asserted right of
others nor, to the Corporation’s Knowledge, is there a basis for such a notice.
To the Corporation’s Knowledge, no person, corporation or other entity is
infringing the Corporation’s rights to the Listed Rights or Intellectual
Property. Schedule 5.12(e) lists any complaint, claim or notice, or written
threat thereof, received by the Corporation alleging any such infringement,
violation or misappropriation, and the Corporation has provided to the Investors
complete and accurate copies of all written documentation in the possession of
the Corporation relating to any such complaint, claim, notice or threat. The
Corporation has provided to the Investors complete and accurate copies of all
written documentation in the Corporation’s possession relating to claims or
disputes known to each of the Corporation concerning any Corporation
Intellectual Property.

 

(f)                                   Except as otherwise provided in Schedule
5.12(f), the Corporation, to the Corporation’s Knowledge has no obligation to
compensate others for the use of any Listed Right or any Intellectual Property,
nor has the Corporation granted any license or other right to use, in any
manner, any of the Listed Rights or Intellectual Property, whether or not
requiring the payment of royalties. Schedule 5.12(f) identities each license or
other agreement pursuant to which the Corporation has licensed, distributed or
otherwise granted any rights to any third party with respect to any Corporation
Intellectual Property. Except as described in Schedule 5.12(f), the Corporation
has not agreed to indemnify any person or entity against any infringement,
violation or misappropriation of any Intellectual Property rights with respect
to any Corporation Intellectual Property.

 

(g)                                  Schedule 5.12(g) identifies each item of
Corporation Intellectual

 

10

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Property that is owned by a party other than the Corporation, and the license or
agreement pursuant to which the Corporation uses it (excluding off-the-shelf
software programs licensed by the Corporation pursuant to “shrink wrap”
licenses).

 

(h)                                 The Corporation has not disclosed the source
code for any software developed by it, or other confidential information
constituting, embodied in or pertaining to such software, to any person or
entity, except pursuant to the agreements listed in Schedule 5.12(h), and the
Corporation has taken reasonable measures to prevent disclosure of any such
source code.

 

(i)                                     All of the copyrightable materials
incorporated in or bundled with the Customer Deliverables have been created by
employees of the Corporation within the scope of their employment by the
Corporation or by independent contractors of the Corporation who have executed
agreements expressly assigning all right, title and interest in such
copyrightable materials to the Corporation. Except as listed in Schedule
5.12(i), no portion of such copyrightable materials was jointly developed with
any third party.

 

(j)                                    To the Corporation’s Knowledge, the
Customer Deliverables and the Internal Systems are free from significant defects
or programming errors and conform in all material respects to the written
documentation and specifications therefor.

 

(k)                                 For purposes of this Agreement, the
following terms shall have the following meanings:

 

(i)                                     “Customer Deliverables” shall mean
(a) the products that the Corporation (i) currently manufactures, markets, sells
or licenses or (ii) currently plans to manufacture, market, sell or license in
the future and (b) the services that the Corporation (i) currently provides or
(ii) currently plans to provide in the future.

 

(ii)                                  “Internal Systems” shall mean the internal
systems of each of the Corporation that are presently used in its Business or
operations, including, computer hardware systems, software applications and
embedded systems.

 

(iii)                               “Intellectual Property” shall mean all:
(A) patents, patent applications, patent disclosures and all related
continuation, continuation-in-part, divisional, reissue, reexamination, utility
model, certificate of invention and design patents, design patent applications,
registrations and applications for registrations, including Listed Rights;
(B) trademarks, service marks, trade dress, internet domain names, logos, trade
names and corporate names and registrations and applications for registration
thereof; (C) copyrights and registrations and applications for registration
thereof; (D) mask works and registrations and applications for registration
thereof; (E) computer software, data and documentation; (F) inventions, trade
secrets and confidential business information, whether patentable or
nonpatentable and whether or not reduced to practice, know-how, manufacturing
and product processes and techniques, research and development information,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information; (G) other proprietary rights relating to any of the foregoing
(including remedies against infringements thereof and rights of protection of
interest therein under the laws of all jurisdictions); and (H) copies and
tangible embodiments thereof.

 

(iv)                              “Corporation Intellectual Property” shall mean
the Intellectual Property owned by or licensed to the Corporation and
incorporated in, underlying or used in connection with the Customer Deliverables
or the Internal Systems.

 

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(v)                                 “Corporation’s Knowledge” shall mean
(a) with respect to matters relating directly to the Corporation and its
operations, the knowledge of Michael Wyzga, Nicholas Harvey, Louis Brenner and
Gary Hattersley (the “Officers”) as well as other knowledge which such Officers
would have possessed had they made diligent inquiry of appropriate employees and
agents of the Corporation with respect to the matter in question; provided, that
such Officers shall not be obligated to inquire further with respect to any list
herein or in any schedule hereto, and (b) with respect to external events or
conditions, the actual knowledge of the Officers.

 

5.13                        Securities Laws. Neither the Corporation nor anyone
acting on its behalf has offered securities of the Corporation for sale to, or
solicited any offers to buy the same from, or sold securities of the Corporation
to, any person or organization, in any case so as to subject the Corporation,
its promoters, directors and/or officers to any Liability under the Securities
Act, the Securities and Exchange Act of 1934, as amended, or any state
securities or “blue sky” law (collectively, the “Securities Laws”).  The offer,
grant, sale and/or issuance of the following were not, are not, or, as the case
may be, will not be, in violation of the Securities Laws when offered, sold and
issued in accordance with (i) this Agreement, (ii) the Series A-1 Convertible
Preferred Stock Purchase Agreement, dated as of April 25, 2011, as amended, by
and among the Corporation and the Investors listed therein, (iii) the Amended
and Restated Stock Issuance Agreement, dated May 16, 2011, by and among the
Corporation and Nordic Bioscience Clinical Development VII A/S, as amended,
(iv) the 2003 Long-Term Incentive Plan, as amended, and (v) the 2011 Equity
Incentive Plan, as amended: (a) the Shares, Warrants, Warrant Shares and
Reserved Common Shares, as contemplated by this Agreement and the Exhibits and
Schedules hereto, and in partial reliance upon the representations and
warranties of the Investors set forth in Section 6 hereof; (b) the Existing
Preferred Stock; (c) the Common Stock issuable upon the conversion of the
Existing Preferred Stock; and (d) the Plan Option Shares and stock options
covering such shares.

 

5.14                        Title to Properties.

 

(a)                                 The Corporation has valid title to, or in
the case of leased properties and assets, valid leasehold interests in, all of
its properties and assets, necessary to conduct the Business in the manner in
which it is currently conducted (in each case, free and clear of all liens,
security interests, charges and other encumbrances of any kind, except liens for
taxes not yet due and payable), including without limitation, all rights under
any investigational drug application of the Corporation filed in the United
States and in foreign countries, all rights pursuant to the authority of the FDA
(as hereinafter defined) and any foreign counterparts to conduct clinical trials
with respect to any investigational drug application filed with such agency
relating to biologics or drugs relating to the Business and all rights, if any,
to apply for approval to commercially market and sell biologics or drugs and
none of such properties or assets is subject to any lien, security interest,
charge or other encumbrance of any kind, other than those the material terms of
which are described in Schedule 5.14(a).

 

(b)                                 The Corporation does not own any real
property or any buildings or other structures, nor have options or any
contractual obligations to purchase or acquire any interest in real property. 
Schedule 5.14(b) lists all real property leases to which the Corporation is a
party and each amendment thereto.  All such current leases are in full force and
effect, are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event of default
(or event that with notice or lapse of time, or both, would constitute a
default).  The Corporation, in its capacity as lessee, is not in violation of
any zoning, building or safety ordinance, regulation or requirement or other law
or regulation applicable to the operation of its leased properties, nor has it
received any notice of violation with which it has not complied.

 

(c)                                  The equipment, furniture, leasehold
improvements, fixtures, vehicles, any related capitalized items and other
tangible property material to the Business are in good operating

 

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condition and repair, ordinary wear and tear excepted.

 

5.15                        Investments in Other Persons. Except as indicated in
Schedule 5.15 attached hereto, (a) the Corporation has not made any loan or
advance to any person or entity which is outstanding on the date hereof nor is
it committed or obligated to make any such loan or advance, and (b) the
Corporation has never owned or controlled and does not currently own or control,
directly or indirectly, any subsidiaries and has never owned or controlled and
does not currently own or control any capital stock or other ownership interest,
directly or indirectly, in any corporation, association, partnership, trust,
joint venture or other entity.

 

5.16                        ERISA. Except as set forth in Schedule 5.16, neither
the Corporation nor any entity required to be aggregated with the Corporation
under Sections 414(b), (c), (m) or (n) of the Code (as hereinafter defined),
sponsors, maintains, has any obligation to contribute to, has any liability
under, or is otherwise a party to, any Benefit Plan.  For purposes of this
Agreement, “Benefit Plan” shall mean any plan, fund, program, policy,
arrangement or contract, whether formal or informal, which is in the nature of
(i) any qualified or non-qualified employee pension benefit plan (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)) or (ii) an employee welfare benefit plan (as defined in section
3(1) of ERISA).  With respect to each Benefit Plan listed in Schedule 5.16, to
the extent applicable:

 

(a)                                 Each such Benefit Plan has been maintained
and operated in all material respects in compliance with its terms and with all
applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended
(the “Code”), and all statutes, orders, rules, regulations, and other authority
which are applicable to such Benefit Plan;

 

(b)                                 All contributions required by law to have
been made under each such Benefit Plan (without regard to any waivers granted
under Section 412 of the Code) to any fund or trust established thereunder in
connection therewith have been made by the due date thereof:

 

(c)                                  Each such Benefit Plan intended to qualify
under Section 401(a) of the Code is the subject of a favorable unrevoked
determination letter issued by the Internal Revenue Service as to its qualified
status under the Code, which determination letter may still be relied upon as to
such tax qualified status, and no circumstances have occurred that would
adversely affect the tax qualified status of any such Benefit Plan;

 

(d)                                 The actuarial present value of all accrued
benefits under each such Benefit Plan subject to Title IV of ERISA did not, as
of the latest valuation date of such Benefit Plan, exceed the then current value
of the assets of such Benefit Plan allocable to such accrued benefits, all as
based upon the actuarial assumptions and methods currently used for such Benefit
Plan;

 

(e)                                  None of such Benefit Plans that are
“employee welfare benefit plans” as defined in Section 3(1) of ERISA provides
for continuing benefits or coverage for any participant or beneficiary of any
participant after such participant’s termination of employment, except as
required by applicable law; and

 

(f)                                   Neither the Corporation nor any trade or
business (whether or not incorporated) under common control with the Corporation
within the meaning of Section 4001 of ERISA has, or at any time has had, any
obligation to contribute to any “multiemployer plan” as defined in Section 3(37)
of ERISA.

 

5.17                        Use of Proceeds. The net proceeds received by the
Corporation from the sale of

 

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the Series B Preferred Stock shall be used by the Corporation generally for the
purposes set forth on Schedule 5.17 attached hereto.

 

5.18                        Permits and Other Rights; Compliance with Laws.  The
Corporation has all permits, licenses, registrations, certificates,
accreditations, orders, authorizations or approvals from any Governmental Entity
(“Permits”) issued to or held by the Corporation.  Other than the Permits listed
on Schedule 5.18, there are no Permits, the loss or revocation of which would
result in a Corporation Material Adverse Effect.  The Corporation has all
Permits necessary to permit it to own its properties and to conduct its Business
as presently conducted and as proposed to be conducted.  Each such Permit is in
full force and effect and, to the Corporation’s Knowledge, no suspension or
cancellation of such Permit is threatened and there is no basis for believing
that such Permit will not be renewable upon expiration.  The Corporation is in
compliance in all material respects under each such Permit, and the transactions
contemplated by this Agreement will not cause a violation under any of such
Permits.  The Corporation is in compliance in all material respects with all
provisions of the laws and governmental rules and regulations applicable to its
Business, properties and assets, and to the products and services sold by it,
including, without limitation, all such rules, laws and regulations relating to
fair employment practices and public or employee safety. The Corporation is in
compliance with the Clinical Laboratories Improvement Act of 1967, as amended.

 

5.19                        Insurance. Schedule 5.19 sets forth a true and
complete list of all policies or binders of fire, theft, liability, product
liability, workmen’s compensation, vehicular, directors’ and officers’ and other
insurance held by or on behalf of the Corporation.  Such policies and binders
are in full force and effect, are in the amounts not less than is customarily
obtained by corporations of established reputation engaged in the same or
similar business and similarly situated and are in conformity with the
requirements of all leases or other agreements to which the Corporation is a
party and are valid and enforceable in accordance with their terms.  The
Corporation’s product liability insurance covers its clinical trials.  The
Corporation is not in default with respect to any provision contained in such
policy or binder nor has the Corporation failed to give any notice or present
any claim under any such policy or binder in due and timely fashion.  There are
no outstanding unpaid claims under any such policy or binder.  The Corporation
has not received notice of cancellation or non-renewal of any such policy or
binder.

 

5.20                        Board of Directors. Except as provided in Schedule
5.20 attached hereto, the Corporation has not extended any offer or promise or
entered into any agreement, arrangement, understanding or otherwise, whether
written or oral, with any person or entity by which the Corporation has agreed
to allow such person or entity to participate, in any way, in the affairs of the
Board of Directors, including without limitation, appointment or nomination as a
member, or right to appear at, or receive the minutes of a meeting of the Board
of Directors.

 

5.21                        Books and Records.  The minute books of the
Corporation contain complete and accurate records of all meetings and other
corporate actions of the stockholders and Boards of Directors and committees
thereof.  The stock ledger of the Corporation is complete and accurate and
reflects all issuances, transfers, repurchases and cancellations of shares of
capital stock of the Corporation.

 

5.22                        Environmental Matters.

 

(a)                                 The Corporation has not used, generated,
manufactured, refined, treated, transported, stored, handled, disposed,
transferred, produced, processed or released (together defined as “Release”) any
Hazardous Materials (as hereinafter defined) in any manner or by any means in
violation of any Environmental Laws (as hereinafter defined). To the
Corporation’s Knowledge, neither the Corporation nor any prior owner or tenant
of the Property (as hereinafter defined) has Released any

 

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Hazardous Material or other pollutant or effluent into, on or from the Property
in a way which can pose a risk to human health or the environment, nor is there
a threat of such Release. As used herein, the term “Property” shall include,
without limitation, land, buildings and laboratory facilities owned or leased by
the Corporation or as to which the Corporation now has any duties,
responsibilities (for clean-up, remedy or otherwise) or liabilities under any
Environmental Laws, or as to which the Corporation or any subsidiary of the
Corporation may have such duties, responsibilities or liabilities because of
past acts or omissions of the Corporation or any such subsidiary or their
predecessors, or because the Corporation or any such subsidiary or their
predecessors in the past was such an owner or operator of, or some other
relationship with, such land, buildings and/or laboratory facilities, all as
more fully described in Schedule 5.22(a) of the Corporation’s Disclosure
Schedule. The term “Hazardous Materials” shall mean (A) any chemicals, materials
or substances defined as or included in the definition of “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,”
“hazardous air pollutants,” “contaminants,” “toxic chemicals,” “toxins,”
“hazardous chemicals,” “extremely hazardous substances,” “pesticides,” “oil” or
related materials as defined in any applicable Environmental Law, or (B) any
petroleum or petroleum products, oil, natural or synthetic gas, radioactive
materials, asbestos-containing materials, urea formaldehyde foam insulation,
radon, and any other substance defined or designated as hazardous, toxic or
harmful to human health, safety or the environment under any Environmental Law.

 

(b)                                 No notice of lien under any Environmental
Laws has been filed against any Property of the Corporation.

 

(c)                                  The use of the Property complies with
lawful, permitted and conforming uses in all material respects under all
applicable building, tire, safety, subdivision, zoning, sewer, environmental,
health, insurance and other such laws, ordinances, rules, regulations and plan
approval conditions of any governmental or public body or authority relating to
the use of the Property.

 

(d)                                 Except as described in Schedule 5.22(d) of
the Corporation’s Disclosure Schedule, to the Corporation’s Knowledge, the
Property does not contain: (i) asbestos in any form; (ii) urea formaldehyde foam
insulation; (iii) transformers or other equipment which contain dialectic fluid
containing levels of polychlorinated biphenyls; (iv) radon; or (v) any other
chemical, material or substance, the exposure to which is prohibited, limited or
regulated by a federal, state or local government agency, authority or body, or
which, even if not so regulated, to the Corporation’s Knowledge after reasonable
investigation, may or could pose a hazard to the health and safety of the
occupants of the Property or the owners or occupants of property adjacent to or
in the vicinity of the Property.

 

(e)                                  The Corporation has not received written
notice that the Corporation is a potentially responsible party for costs
incurred at a cleanup site or corrective action under any Environmental Laws. 
The Corporation has not received any written requests for information in
connection with any inquiry by any Governmental Authority (as defined
hereinafter) concerning disposal sites or other environmental matters. As used
herein, “Governmental Authority” shall mean any nation or government, any
federal, state, municipal, local, provincial, regional or other political
subdivision thereof and any entity or person exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government, Schedule 5.22(e) of the Corporation’s Disclosure Schedule identifies
all locations where Hazardous Materials used in whole or in part by the Business
of the Corporation or resulting from the Business, facilities or Property of the
Corporation have been stored or disposed of by or on behalf of the Corporation.
As used herein, “Environmental Laws” shall mean all applicable federal, state
and local laws, ordinances, rules and regulations that regulate, fix liability
for, or otherwise relate to, the handling, use (including use in industrial
processes, in construction, as building materials, or otherwise), storage and
disposal of hazardous and toxic wastes and substances, and to the discharge,
leakage, presence, migration, threatened Release or Release (whether by
disposal, a discharge into any

 

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water source or system or into the air, or otherwise) of any pollutant or
effluent. Without limiting the preceding sentence, the term “Environmental Laws”
shall specifically include the following federal and state laws, as amended:

 

FEDERAL

 

Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §
9601 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C.
§ 11001 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the
Toxic Substance Control Act, 15 U.S.C. § 2601 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. § 1001 et seq.; the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. § 1801 et seq.; the Atomic Energy Act, as amended 42 U.S.C.
§ 2011 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C.
§ 651 et seq.; the Federal Food, Drug and Cosmetic Act, as amended 21 U.S.C.
§ 301 et seq. (insofar as it regulates employee exposure to Hazardous
Substances); the Clean Air Act, 42 U.S.C. 7401 et. seq.

 

STATE

 

MASSACHUSETTS ENVIRONMENTAL STATUTES

 

Massachusetts Clean Waters Act, Mass. Gen. L. Ch. 21, Section 26, et. seq., and
regulations thereto; Massachusetts Solid Waste Disposal Laws. Mass. Gen. L. Ch.
16, Section 18, et. seq., and Ch. 111, Section 1 05A, and regulations thereto;
Massachusetts Oil and Hazardous Materials Release Prevention and Response Act,
Mass. Gen. L., Ch. 21 E, Section 1, et. seq., and regulations thereto;
Massachusetts Solid Waste Facilities Law, Mass. Gen. L., Ch. 21H, Section 1, et.
seq., and regulations thereto; Massachusetts Toxic Use Reduction Act, Mass. Gen.
L., Ch. 211, Section 1, et. seq., and regulations thereto; Massachusetts Litter
Control Laws, Mass. Gen. L. Ch. 111. Section 1 50A, et. seq., and regulations
thereto; Massachusetts Wetlands Protection Laws, Mass. Gen. L., Ch. 130,
Section 105, et. seq., and regulations thereto; Massachusetts Environmental Air
Pollution Control Law, Mass. Gen. L.. Ch. 101, Section 2B, et. seq., and
regulations thereto; Massachusetts Environmental Policy Act, Mass. Gen. L. Ch.
30, Section 61, et. seq., and regulations thereto; and Massachusetts Hazardous
Waste Laws, Mass. Gen. L. Ch. 21C, Section 1, et. seq., and regulations thereto.

 

(f)                                   The Corporation has maintained all
environmental and operating documents and records substantially in the manner
and for the time periods required by the Environmental Laws and any other laws,
regulations or orders and has never conducted an environmental audit except as
disclosed in Schedule 5.22(f) of the Corporation’s Disclosure Schedule. For
purposes of this Section 5.22(f), an environmental audit shall mean any
evaluation, assessment, study or test performed at the request of or on behalf
of a Governmental Authority, including, but not limited to, a public liaison
committee, but does not include normal or routine inspections, evaluations or
assessments which do not relate to a threatened or pending charge, restraining
order or revocation of any permit, license, certificate, approval,
authorization, registration or the like issued pursuant to the Environmental
Laws and any other law, regulation or order.

 

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(g)                                  To the Corporation’s Knowledge, no part of
the Property of the Corporation is (i) located within any wetlands area,
(ii) subject to any wetlands regulations, or (iii) included in or is proposed
for inclusion in, or abuts any property included in or proposed for inclusion
in, the National Priority List or any similar state lists.

 

5.23                        FDA Matters.

 

(a)                                 The Corporation has (i) complied in all
material respects with all applicable laws, regulations and specifications with
respect to the manufacture, design, sale, storing, labeling, testing,
distribution, inspection, promotion and marketing of all of the Corporation’s
products and product candidates and the operation of manufacturing facilities
promulgated by the U.S. Food and Drug Administration (the “FDA”) or any
corollary entity in any other jurisdiction and (ii) conducted, and in the case
of any clinical trials conducted on its behalf, caused to be conducted, all of
its clinical trials with reasonable care and in compliance in all material
respects with all applicable laws and the stated protocols for such clinical
trials.

 

(b)                                 All of the Corporation’s submissions to the
FDA and any corollary entity in any other jurisdiction, whether oral, written or
electronically delivered, were true, accurate and complete in all material
respects as of the date made, and remain true, accurate and complete in all
material respects and do not misstate any of the statements or information
included therein, or omit to state a fact necessary to make the statements
therein not materially misleading.

 

(c)                                  The Corporation has not committed any act,
made any statement or failed to make any statement that would breach the FDA’s
policy with respect to “Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any
similar laws, rules or regulations, whether under the jurisdiction of the FDA or
a corollary entity in any other jurisdiction, and any amendments or other
modifications thereto.  Neither the Corporation nor, to the Corporation’s
Knowledge, any officer, employee or agent of the Corporation has been convicted
of any crime or engaged in any conduct that would reasonably be expected to
result in (i) debarment under 21 U.S.C. Section 335a or any similar state or
foreign law or regulation or (ii) exclusion under 42 U.S.C. Section 1320a 7 or
any similar state or foreign law or regulation, and neither the Corporation nor,
to the Corporation’s Knowledge, any such person has been so debarred or
excluded.

 

(d)                                 The Corporation has not sold or marketed any
products prior to receiving any required or necessary approvals or consents from
any federal or state governmental authority, including but not limited to the
FDA under the Food, Drug & Cosmetics Act of 1976, as amended, and the
regulations promulgated thereunder, or any corollary entity in any
jurisdiction.  The Corporation has not received any notice of, nor is the
Corporation aware of any, actions, citations, warning letters or Section 305
notices from the FDA or any corollary entity.

 

5.24                        Compliance with Privacy Laws

 

(a)                                 For purposes of this Agreement:

 

(i)                                     “Foreign Privacy Laws” shall mean
(a) the Directive 95/46/EC of the Parliament and of the Council of the European
Union of 24 October 1995 on the protection of individuals with regard to the
collection, use, disclosure, and processing of personal data and on the free
movement of such data, (b) the corresponding national rules, regulations, codes,
orders, decrees and rulings thereunder of the member states of the European
Union and (c) any rules, regulations, codes, orders, decree, and rulings
thereunder related to privacy, data protection or data transfer issues
implemented in other countries.

 

17

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(ii)                                  “US Privacy Laws” shall mean any rules,
regulations, codes, orders, decrees, and rulings thereunder of any federal,
state, regional, county, city, municipal or local government of the United
States or any department, agency, bureau or other administrative or regulatory
body obtaining authority from any of the foregoing that relate to privacy, data
protection or data transfer issues, including all implementing laws, ordinances
or regulations, including, without limitation, the Health Insurance Portability
and Accountability Act of 1996, as amended; the Children’s Online Privacy
Protection Act (COPPA) of 1998, as amended; the Financial Modernization Act
(Graham-Leach-Bliley Act) of 2000, as amended; the Fair Credit Reporting Act of
1970, as amended; the Privacy Act of 1974, as amended; the Family Education
Rights and Privacy Act of 1974, as amended; the Right to Financial Privacy Act
of 1978, as amended; the Privacy Protection Act of 1980, as amended; the Cable
Communications Policy Act of 1984, as amended; the Electronic Communications
Privacy Act of 1986, as amended; the Video Privacy Protection Act of 1988, as
amended; the Telephone Consumer Protection Act of 1991, as amended; the Driver’s
Privacy Protection Act of 1994, as amended; the Communications Assistance for
Law Enforcement Act of 1994, as amended; the Telecommunications Act of 1996, as
amended; and any implementing regulations related thereto;

 

(b)                                 The Corporation is currently and has been at
all times in compliance in all material respects with all Foreign Privacy Laws
and US Privacy Laws; and the Corporation has not received notice (in writing or
otherwise) regarding violation of such Foreign Privacy Laws or US Privacy Laws.

 

(c)                                  No action, suit, proceeding, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
the Corporation, nor to the Corporation’s Knowledge threatened against the
Corporation, relating to Foreign Privacy Laws and US Privacy Laws; nor has the
Corporation incurred any material liabilities (whether accrued, absolute,
contingent or otherwise) under any Foreign Privacy Laws or US Privacy Laws.

 

(d)                                 Health Insurance Portability and
Accountability Act of 1996.  The Corporation (i) has assessed the applicability
of the Health Insurance Portability and Accountability Act of 1996 and its
implementing regulations (collectively, “HIPAA”) to the Corporation, including
the fully insured and self-insured health plans that the Corporation sponsors or
has sponsored or contributes to or has contributed to and health care provider
activities, if any, in which the Corporation engages, (ii) has complied in all
relevant respects with HIPAA, including 45 C.F.R. Part 160 and Subparts A and E
of Part 164 (the “HIPAA Privacy Rule”), including but not limited to HIPAA
Privacy Rule requirements relating to health information use and disclosure,
notices of privacy rights, appointment of a Privacy Officer, adoption of a
privacy policy, amendment of plan documents, and implementation of employee
training as to the handling of protected health information, and (iii) if
required under the HIPAA Privacy Rule, has entered into business associate
agreements on behalf of the Corporation’s health plans covering the handling of
protected health information with vendors and others categorized under HIPAA as
business associates of the Corporation’s health plans.

 

(e)                                  Other Health Information Laws.  Without
limiting the generality of Section 5.24(a) through Section 5.24(d),

 

(i)                                     the Corporation is currently, and has
been at all times since its incorporation, in compliance in all material
respects with all applicable health insurance, health information security,
health information privacy, and health information transaction format Laws (each
a “Health Information Law”), including, without limitation, any rules,
regulations, codes, orders, decrees, and rulings thereunder of any federal,
state, regional, county, city, municipal or local government, whether foreign or
domestic, or any department, agency, bureau or other administrative or
regulatory body obtaining authority from any of the foregoing; and

 

18

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(ii)                                  no action, suit, proceeding,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against the Corporation nor to the Corporation’s Knowledge threatened
against the Corporation, alleging any failure to comply with any Health
Information Law; nor has the Corporation incurred any material liabilities
(whether accrued, absolute, contingent or otherwise) under any Health
Information Law.

 

5.25                        Health Care and Affiliated Transactions; Stark and
Anti-Kickback Laws.

 

(a)                                 For purposes of the Stark II law and
implementing regulations, if applicable, none of the directors or officers of
the Corporation, or physicians employed by the Corporation, any other affiliates
of the Corporation, or any of their respective immediate family members is
(i) to the Corporation’s Knowledge, a partner or stockholder or has any other
economic interest in any customer or supplier of the Corporation; (ii) a party
to any transaction or contract with the Corporation; or (iii) indebted to the
Corporation.  The Corporation has not paid, or incurred any obligation to pay,
any fees, commissions or other amounts to and is not a party to any agreement,
business arrangement or course of dealing with any firm of or in which any of
directors, officers or affiliates of the Corporation, or any of their respective
immediate family members, is a partner or stockholder or has any other economic
interest, other than ownership of less than one percent (1%) of a publicly
traded corporation.  No physician or family member of a physician has a
financial relationship with the Corporation in violation of Section 1877 of the
Social Security Act.  The Corporation has made all filings required by
Section 1877 of the Social Security Act.

 

(b)                                 The Corporation has complied with all
applicable state and federal “anti-kickback,” fraud and abuse, false claims and
related statutes and regulations.  The Corporation has received no notice of nor
is otherwise aware of any inquiries, audits, subpoenas or other investigations
involving Corporation by the U.S. Department of Health and Human Services, the
U.S. Office of Inspector General, any U.S. Attorney’s Office or any other
federal or state agency with jurisdiction over such statutes or regulations.

 

SECTION 6.                            Representations and Warranties of the
Investors to the Corporation.

 

Each of the Investors, as to itself, represents and warrants to the Corporation
as follows:

 

(a)                                 It is acquiring the Shares and Warrants and,
in the event it should acquire Reserved Common Shares upon conversion of the
Series B Preferred Stock or Warrant Shares upon the exercise of its Warrant, it
will be acquiring such Reserved Common Shares or Warrant Shares, for its own
account, for investment and not with a view to the distribution thereof within
the meaning of the Securities Act.

 

(b)                                 It is an “accredited investor” as such term
is defined in Rule 501(a) promulgated under the Securities Act.

 

(c)                                  It agrees that the Corporation may place a
legend on the certificates and Warrants delivered hereunder stating that the
Shares, Warrants and any Reserved Common Shares and Warrant Shares have not been
registered under the Securities Act, and, therefore, cannot be offered, sold or
transferred unless they are registered under the Securities Act or an exemption
from such registration is available and that the offer, sale or transfer of the
Shares, Warrants and any Reserved Common Shares and Warrant Shares is further
subject to any restrictions imposed by this Agreement and the Stockholders’
Agreement.

 

(d)                                 The execution, delivery and performance by
it of this Agreement have

 

19

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been duly authorized by all requisite action of it.

 

(e)                                  It further understands that the exemptions
from registration afforded by Rule 144 and Rule 144A (the provisions of which
are known to it) promulgated under the Securities Act depend on the satisfaction
of various conditions, and that, if applicable, Rule 144 may afford the basis
for sales only in limited amounts.

 

(f)                                   It has such knowledge and experience in
business and financial matters and with respect to investments in securities of
privately-held companies so as to enable it to understand and evaluate the risks
of its investment in the Shares and Warrants and form an investment decision
with respect thereto.  It has been afforded the opportunity during the course of
negotiating the transactions contemplated by this Agreement to ask questions of,
and to secure such information from, the Corporation and its officers and
directors as it deems necessary to evaluate the merits of entering into such
transactions.

 

(g)                                  If it is a natural person, it has the power
and authority to enter into this Agreement.  If it is not a natural person, it
is duly organized and validly existing and has the power and authority to enter
into this Agreement.  Any Investor which is a corporation, partnership or trust
represents that it has not been organized, reorganized or recapitalized
specifically for the purpose of acquiring the securities of the Corporation.

 

(h)                                 It has adequate net worth and means of
providing for its current needs and personal contingencies to sustain a complete
loss of its investment in the Corporation.  The Investors understand that the
foregoing representations and warranties shall be deemed material and to have
been relied upon by the Corporation.

 

SECTION 7.                            Closing Conditions.

 

7.1                               Deliveries; Conditions Precedent to Each
Closing. The several obligations of each Investor to purchase and pay for the
Shares and Warrants under this Agreement at the Initial Closing are subject to
the satisfaction or waiver by such Investor or any waiver adopted or implemented
pursuant to Section 17 of the following conditions precedent:

 

(a)                                 All proceedings to have been taken and all
waivers and consents to be obtained in connection with the transactions
contemplated by this Agreement shall have been taken or obtained, and all
documents incidental thereto shall be satisfactory to each Investor and its
counsel, and each Investor and its counsel shall have received copies (executed
or certified, as may be appropriate) of all documents which such Investor or its
counsel may reasonably have requested in connection with such transactions.

 

(b)                                 All legal matters incident to the purchase
or acquisition of the Shares and Warrants shall be satisfactory to each
Investor’s counsel, and the Investors shall have received from Latham & Watkins
LLP a legal opinion addressed to the Investors and dated the date of the Initial
Closing in a form reasonably acceptable to the Investors.

 

(c)                                  All consents, permits, approvals,
qualifications and/or registrations required to be obtained or effected under
any applicable securities or “Blue Sky” laws of any jurisdiction shall have been
obtained or effected.

 

(d)                                 Except as set forth in the Disclosure
Schedules hereto, on the Initial Closing Date, the representations and
warranties of the Corporation contained herein shall be true and

 

20

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correct on and as of the date of such Closing with the same force and effect as
though such representations and warranties had been made on and as of such date
(other than any representation or warranty made as of a particular date which
shall be true and correct as of such date).

 

(e)                                  A duly executed Series B Certificate in the
form of Exhibit A hereto shall have been filed with and accepted by the
Secretary of State of Delaware and shall be effective under the laws of the
State of Delaware, and a Stockholders’ Agreement in form and substance attached
hereto as Exhibit C shall have been executed by the Corporation and the
requisite stockholders of the Corporation such that the Stockholders’ Agreement
amends and restates in its entirety the Existing Stockholders’ Agreement, and
such executed Stockholders’ Agreement shall have been delivered to the
Investors.

 

(f)                                   The Corporation shall have delivered to
the Investors a certificate or certificates, dated as of the Initial Closing
Date, of the Secretary of the Corporation certifying as to (i) the resolutions
of the Corporation’s Board of Directors and stockholders authorizing the
execution and delivery of this Agreement and the delivery to the Investors of
the Shares and Warrants, such other documents and instruments as may be required
by this Agreement, and the consummation of the transactions contemplated hereby
and thereby, (ii) that such resolutions were duly adopted and have not been
rescinded or amended as of said date, (iii) the name and the signature of the
officers of the Corporation authorized to sign, as appropriate, this Agreement
and the other documents and certificates to be delivered pursuant to this
Agreement by either the Corporation or any of its officers, (iv) the Charter and
(v) the Corporation’s by-laws.

 

(g)                                  The Corporation shall have delivered to the
Investors a certificate or certificates, dated as of the Initial Closing Date,
of the President and Chief Executive Officer of the Corporation certifying as to
the accuracy and completeness of the representations and warranties made by the
Corporation pursuant to this Agreement as of each of the date of this Agreement
and the date of the Initial Closing.

 

(h)                                 The Corporation shall have entered into
confidentiality and, to the extent allowable under arrangements or agreements
between a consultant and any relevant institution with which he may be an
employee, assignment of inventions agreements with all employees and consultants
of the Corporation satisfactory in form and substance to the Investors and their
counsel.

 

(i)                                     The Board of Directors of the
Corporation shall be comprised of the following individuals (collectively, the
“Director Individuals”): Alan Auerbach, Morana Jovan-Embiricos, Ansbert Gadicke,
Kurt Graves, Owen Hughes, Martin Muenchbach, Michael Wyzga and Elizabeth Stoner.

 

(j)                                    The Corporation shall have executed and
delivered to each such director an indemnification agreement in the form
attached hereto as Exhibit D.

 

(k)                                 The Corporation shall have executed and
delivered to each Investor so requesting a management rights letter in a form
acceptable to such Investor.

 

(l)                                     Stockholders comprising the Senior
Majority (as defined in the Existing Certificate) shall have consented to the
adoption and filing of the Series B Certificate, including the creation of the
Series B Preferred pursuant to the Series B Certificate.

 

(m)                             Stockholders comprising the Majority Investors
(as defined in the Existing Stockholders’ Agreement) shall have consented to the
entry into this Agreement and the

 

21

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Stockholders’ Agreement by the Corporation, and the transactions contemplated
hereby, and shall have waived all rights of first refusal (i.e., preemptive
rights) under the Existing Stockholders’ Agreement (including the notice
requirements set forth therein).

 

7.2                               Conditions to Obligations of the Corporation.
It shall be a condition precedent to the obligations of the Corporation
hereunder to be performed at each Closing, as the case may be, as to each
Investor severally, but not jointly, that (a) the representations and warranties
contained herein of each of the Investors hereunder shall be true and correct as
of the date of each such Closing with the same force and effect as though such
representations and warranties had been made on and as of such date, (b) each
Investor who is an individual shall have completed, executed and delivered to
the Corporation an accredited investor questionnaire, in a form provided by and
to the reasonable satisfaction of the Corporation and (c) such Investor shall
be, or shall have executed and delivered a counterpart signature page or an
Instrument of Adherence to become, a party to the Stockholders’ Agreement in the
capacity of an Investor thereunder.

 

SECTION 8.                            Expenses and Fees.

 

Each party shall pay all of its own costs and other expenses incurred in
connection with the agreements and conditions contained herein or contemplated
hereby.  The Corporation further agrees that it will pay, and hold each of the
Investors harmless from, any and all liability with respect to any stamp or
similar taxes which may be determined to be payable in connection with the
execution and delivery of this Agreement or any modification, amendment or
alteration of the terms or provisions of this Agreement and that it will
similarly pay, and hold each of the Investors harmless from, all issue taxes in
respect of the issuance of the Shares and Warrants to each of the Investors. 
Either at or as soon as reasonably practicable following the Initial Closing,
the Corporation shall pay up to $30,000 of the reasonable and documented fees
and expenses of Bingham McCutchen LLP, counsel to the Investors, incurred in
connection with the review and negotiation of this Agreement, all documents and
agreements related hereto and the transactions contemplated hereby.

 

SECTION 9.                            Brokers or Finders.

 

The Corporation represents and warrants to each of the Investors, and each of
the Investors, as to itself, represents and warrants to the Corporation, that,
other than Morana Jovan-Embiricos and MTS Securities, LLC, each of whom has
acted as an advisor to the Corporation in connection with the transactions
contemplated by this Agreement, no person or entity has or will have, as a
result of the transactions contemplated by this Agreement, any right, interest
or valid claim against or upon the Corporation or the Investors for any
commission, fee or other compensation as a finder or broker because of any act
or omission by the Corporation or the Investors or by any agent of the
Corporation or the Investors.

 

SECTION 10.                     Exchanges Lost. Stolen or Mutilated
Certificates.

 

Upon surrender by any Investor to the Corporation of shares of Series B
Preferred Stock or Reserved Common Shares issued upon conversion of any Series B
Preferred Stock purchased or acquired by such Investor hereunder, the
Corporation, at its expense, will issue in exchange therefor, and deliver to
such Investor, a new certificate or certificates representing such shares in
such denominations as may be requested by such Investor. Upon receipt of
evidence satisfactory to the Corporation of the loss, theft, destruction or
mutilation of any certificate representing any shares of Common Stock or
Series B Preferred Stock purchased or acquired by any Investor hereunder and, in
case of any such loss, theft or destruction, upon delivery of any indemnity
agreement satisfactory to the Corporation, or in case of any such mutilation,
upon surrender and cancellation of such certificate, the Corporation, at its
expense, will

 

22

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issue and deliver to such Investor a new certificate for such shares of Common
Stock or Series B Preferred Stock, as applicable, of like tenor, in lieu of such
lost, stolen or mutilated certificate.

 

SECTION 11.                     Survival of Representations and Warranties.

 

The representations and warranties set forth in Sections 5 and 6 hereof shall
survive the Closings indefinitely.

 

SECTION 12.                     Indemnification.

 

The Corporation shall indemnify, defend and hold each of the Investors harmless
against any and all liabilities, loss, cost or damage, together with all
reasonable costs and expenses related thereto (including legal and accounting
fees and expenses), arising from, relating to, or connected with the untruth,
inaccuracy or breach of any statements, representations, warranties or covenants
of the Corporation contained herein, including, but not limited to, all
statements, representations, warranties or covenants concerning environmental
matters.

 

SECTION 13.                     Remedies.

 

In case any one or more of the representations, warranties, covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party or parties entitled to the benefit of such representations,
warranties, covenants or agreements may proceed to protect and enforce its or
their rights either by suit in equity and/or action at law, including, but not
limited to, an action for damages as a result of any such breach and/or an
action for specific performance of any such covenant or agreement contained in
this Agreement.  The rights, powers and remedies of the parties under this
Agreement are cumulative and not exclusive of any other right, power or remedy
which such parties may have under any other agreement or law.  No single or
partial assertion or exercise of any right, power or remedy of a party hereunder
shall preclude any other or further assertion or exercise thereof.

 

SECTION 14.                     Successors and Assigns.

 

Except as otherwise expressly provided herein, this Agreement shall bind and
inure to the benefit of the Corporation and each of the Investors and the
respective permitted successors and assigns of each of the Investors and the
permitted successors and assigns of the Corporation. Subject to the provisions
of Sections 3.1, 3.2, 3.3 and 3.10 of the Stockholders’ Agreement, this
Agreement and the rights and duties of the Investors set forth herein may be
freely assigned, in whole or in part, by the Investors.  Neither this Agreement
nor any of the rights or duties of the Corporation set forth herein shall be
assigned by the Corporation, in whole or in part, without having first received
the written consent of the Investors holding at least seventy percent (70%) of
the shares of Series B Preferred Stock then held by all of the Investors (the
“Series B Majority Investors”).

 

SECTION 15.                     Entire Agreement.

 

This Agreement, together with the other writings referred to herein, including
the Series B Certificate and the Stockholders’ Agreement, or delivered hereunder
and which form a part hereof, contains the entire agreement among the parties
with respect to the subject matter hereof and amends, restates and supersedes
all prior and contemporaneous arrangements or understandings, whether written or
oral, with respect thereto.

 

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SECTION 16.                     Notices.

 

All notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or duly sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied or e-mailed with a confirmation copy by regular
mail, addressed, telecopied or e-mailed, as the case may be, to such party at
the address, telecopier number or e-mail address, as the case may be, set forth
below or such other address, telecopier number or e-mail address, as the case
may be, as may hereafter be designated in writing by the addressee to the
addressor listing all parties:

 

(i)                                     if to the Corporation. to:

 

Radius Health, Inc.

201 Broadway

Sixth Floor

Cambridge, MA 02139

Attention: B. Nicholas Harvey

Telecopier: (617) 551-4701
E-mail: bnharvey@radiuspharm.com

 

with a copy to:

 

Latham & Watkins LLP

John Hancock Tower, 20th Floor

200 Clarendon Street

Boston, MA 02116

Attention: Peter N. Handrinos, Esq.

Telecopier: (617) 948-6001
E-mail:  peter.handrinos@lw.com

 

(ii)                                  if to Investors, as set forth on Schedule
1.

 

All such notices, requests, consents and other communications shall be deemed to
have been received: (a) in the case of personal delivery, on the date of such
delivery; (b) in the case of mailing, on the third business day following the
date of such mailing; (c) in the case of overnight mail, on the first business
day following the date of such mailing; (d) in the case of facsimile
transmission, when confirmed by facsimile machine report; or (e) in the case of
e-mail delivery, when confirmed by the sender’s e-mail system.

 

SECTION 17.                     Changes.

 

The terms and provisions of this Agreement may not be modified or amended, or
any of the provisions hereof waived, temporarily or permanently, except pursuant
to a writing executed by a duly authorized representative of the Corporation and
the Series B Majority Investors. Notwithstanding the foregoing, any modification
or amendment to this Agreement that would adversely affect one Investor in a
manner that is directed specifically to such Investor, rather than to all
Investors, shall be subject to the approval of each such Investor.  It is
understood that this separate consent would not be required if any such adverse
effect results from the application of criteria uniformly to all Investors even
if such application may affect Investors differently.

 

24

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SECTION 18.                     Counterparts.

 

This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.

 

SECTION 19.                     Headings.

 

The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be a part of this
Agreement.

 

SECTION 20.                     Nouns and Pronouns.

 

Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
names and pronouns shall include the plural and vice-versa.

 

SECTION 21.                     Severability.

 

Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

SECTION 22.                     Further Assurances.

 

The parties shall cooperate reasonably with each other in  connection with any
steps required to be taken as part of their respective obligations under this
Agreement, and shall furnish upon request to each other such further
information, execute and deliver to each other such other documents, and do such
other acts and things, all as the other party may reasonably request for
purposes of carrying out the intend of this Agreement and consummating the
transactions contemplated hereby.

 

SECTION 23.                     Governing Law.

 

This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts, excluding choice of laws rules thereof.

 

(Remainder of Page Left Intentionally Blank.)

 

25

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(Signature Page to Series B Convertible Preferred Stock and Warrant Purchase
Agreement)

 

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

 

 

THE CORPORATION:

 

 

 

RADIUS HEALTH, INC.

 

 

 

By:

/s/ Michael S. Wyzga

 

 

Name: Michael S. Wyzga

 

 

Title: President & Chief Executive Officer

 

 

 

 

 

 

INVESTORS:

 

 

 

F2 BIOSCIENCE III, L.P.

 

 

 

By: F2 Biosciences GP Ltd., General Partner

 

 

 

 

 

By:

/s/ Morana Jovan-Embiricos

 

Name: Morana Jovan-Embiricos

 

Title: Director of Investment Adviser

 

To F2 Bioscience III, L.P.

 

 

 

 

 

MPM BIOVENTURES III, L.P.

 

 

 

By: MPM BioVentures III GP, L.P., its General Partner

 

By: MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

/s/ Ansbert Gadicke

 

Name: Ansbert Gadicke

 

Title: Series A Member

 

 

 

 

 

MPM BIOVENTURES III-QP, L.P.

 

 

 

By: MPM BioVentures III GP, L.P., its General Partner

 

By: MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

/s/ Ansbert Gadicke

 

Name: Ansbert Gadicke

 

Title: Series A Member

 

 

--------------------------------------------------------------------------------

 

MPM BIOVENTURES III GMBH & CO. BETEILIGUNGS KG

 

 

 

By:

MPM BioVentures III GP, L.P., in its

 

 

capacity as the Managing Limited Partner

 

By:

MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

/s/ Ansbert Gadicke

 

Name: Ansbert Gadicke

 

Title: Series A Member

 

 

 

 

 

MPM BIOVENTURES III PARALLEL FUND, L.P.

 

 

 

By: MPM BioVentures III GP, L.P., its General Partner

 

By: MPM BioVentures III LLC, its General Partner

 

 

 

 

 

By:

/s/ Ansbert Gadicke

 

Name: Ansbert Gadicke

 

Title: Series A Member

 

 

 

MPM ASSET MANAGEMENT INVESTORS 2003 BVIII LLC

 

 

 

 

 

By:

/s/ Ansbert Gadicke

 

Name: Ansbert Gadicke

 

Title: Manager

 

 

 

 

 

MPM BIO IV NVS STRATEGIC FUND, L.P.

 

 

 

By: MPM BioVentures IV GP LLC, its General Partner

 

By: MPM BioVentures IV LLC, its Managing Member

 

 

 

 

 

By:

/s/ Ansbert Gadicke

 

Name: Ansbert Gadicke

 

Title: Member

 

 

--------------------------------------------------------------------------------

 

BROOKSIDE CAPITAL PARTNERS FUND, L.P.

 

 

 

 

 

By:

/s/ Ranesh Ramanathan

 

Name: Ranesh Ramanathan

 

Title:  General Counsel

 

 

 

 

 

BB BIOTECH VENTURES II, L.P.

 

 

 

By:

BB Biotech Ventures GP (Guernsey) Limited

 

 

As General Partner to BB Biotech

 

 

Ventures II, L.P.

 

 

 

 

 

By:

/s/ Pascal Mahieux

 

Name: Pascal Mahieux

 

Title: Director

 

 

 

 

 

BIOTECH GROWTH N.V.

 

 

 

 

 

By:

/s/ H.J. van Neutegem

 

Name: H.J. van Neutegem

 

Title: Managing Director

 

 

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(Investor Signature Page for Subsequent Closing under
Series B Convertible Preferred Stock and Warrant Purchase Agreement)

 

INVESTOR:(1)

 

Legal Name of Investor:

 

Signature:

 

Name of Signatory:

 

Title of Signatory (if applicable):

 

Date:

 

--------------------------------------------------------------------------------

(1)  An Investor participating in any Subsequent Closing may provide a specific
signature block to use in executing this signature page in lieu of the blank
signature block provided here.

 

--------------------------------------------------------------------------------

 

Schedule I

 

Name of Investor

 

Address of Record

 

Series B
Shares

 

Warrant
Shares

 

Aggregate
Purchase Price

 

 

 

 

 

 

 

 

 

 

 

F2 Bioscience III, L.P.

 

Ugland House

South Church Street

PO Box 309

George Town KY1-1104

Grand Cayman

Cayman Islands

 

325,627

 

814,068

 

$

20,000,010.34

 

 

 

 

 

 

 

 

 

 

 

MPM BioVentures III, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

5,103

 

12,758

 

$

313,426.26

 

 

 

 

 

 

 

 

 

 

 

MPM BioVentures III - QP, L.P

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

75,899

 

189,748

 

$

4,661,716.58

 

 

 

 

 

 

 

 

 

 

 

MPM BioVentures III GmbH & Co. Beteiligungs KG

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

6,414

 

16,035

 

$

393,947.88

 

 

 

 

 

 

 

 

 

 

 

MPM BioVentures III
Parallel Fund, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

2,291

 

5,728

 

$

140,713.22

 

 

 

 

 

 

 

 

 

 

 

MPM Asset Management Investors
2003 BVIII LLC

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

1,468

 

3,670

 

$

90,164.56

 

 

 

 

 

 

 

 

 

 

 

MPM Bio IV NVS Strategic Fund, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

71,638

 

179,095

 

$

4,400,005.96

 

 

 

 

 

 

 

 

 

 

 

Brookside Capital Partners Fund, L.P.

 

Attn: Brookside Legal Department

Bain Capital, LLC

John Hancock Tower

200 Clarendon St.

Boston MA 02116

 

81,407

 

203,518

 

$

5,000,017.94

 

 

--------------------------------------------------------------------------------

 

Name of Investor

 

Address of Record

 

Series B
Shares

 

Warrant
Shares

 

Aggregate
Purchase Price

 

 

 

 

 

 

 

 

 

 

 

BB Biotech Ventures II, L.P.

 

Trafalgar Court

Les Banques

St. Peter Port

Guernsey

Channel Islands

GY1 3QL

With copies to

Martin Münchbach

Bellevue Asset Management

Seestrasse 16

8700 Küsnacht

Switzerland

 

32,563

 

81,408

 

$

2,000,019.46

 

 

 

 

 

 

 

 

 

 

 

Biotech Growth N.V.

 

Snipweg 26

Curaçao

 

97,688

 

244,220

 

$

5,999,996.96

 

 

 

 

 

 

 

 

 

 

 

TOTAL:

 

 

 

700,098

 

1,750,248

 

$

43,000,019.16

 

 

--------------------------------------------------------------------------------

Exhibit A

 

Form of Certificate of Designations of Series B Convertible Preferred Stock

 

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CERTIFICATE OF DESIGNATIONS

OF THE

SERIES B CONVERTIBLE PREFERRED STOCK

OF

RADIUS HEALTH, INC.

 

Radius Health, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”), hereby certifies
that the following resolution pertaining to this Certificate of Designations of
the Series B Convertible Preferred Stock of the Corporation (this “Certificate
of Designations” or this “Certificate”) was adopted by the Board of Directors of
the Corporation (the “Board of Directors” or the “Board”) as required by
Section 151 of the General Corporation Law of the State of Delaware by unanimous
written consent of the Board dated [·].  Capitalized terms used but not defined
herein shall have the respective meanings ascribed thereto in the Corporation’s
Certificate of Incorporation (the “Certificate of Incorporation”) or the
Existing Certificate (as defined below).

 

RESOLVED, that pursuant to the authority expressly granted to and vested in the
Board in accordance with the provisions of the Certificate of Incorporation, the
Board hereby creates a series of preferred stock of the Corporation to be
designated as Series B Convertible Preferred Stock, par value $.0001 per share
(the “Series B Stock”), and hereby states the number of shares, powers, terms,
conditions, designations, preferences and privileges, relative, participating,
optional and other special rights, and qualifications, limitations and
restrictions thereof as follows:

 

1.              Series B Designation and Amount; Existing Preferred Stock.  The
number of authorized shares of the Series B Stock is Nine Hundred Eighty
Thousand (980,000).  The number of shares, powers, terms, conditions,
designations, preferences and privileges, relative, participating, optional and
other special rights, and qualifications, limitations and restrictions, if any,
of the Corporation’s Series A-1 Convertible Preferred Stock, par value $.0001
per share (the “Series A-1 Stock”), Series A-2 Convertible Preferred Stock, par
value $.0001 per share (the “Series A-2 Stock”), Series A-3 Convertible
Preferred Stock, par value $.0001 per share, (the “Series A-3 Stock” and
together with the Series B Stock, the Series A-1 Stock and the Series A-2 Stock,
the “Participating Preferred Stock”), Series A-4 Convertible Preferred Stock,
par value $.0001 per share (the “Series A-4 Stock”), Series A-5 Convertible
Preferred Stock, par value $.0001 per share (the “Series A-5 Stock”) and
Series A-6 Convertible Preferred Stock, par value $.0001 per share (the
“Series A-6 Stock” and together with the Series B Stock, the Series A-1 Stock,
the Series A-2 Stock, the Series A-3 Stock, the Series A-4 Stock and the
Series A-5 Stock, the “Preferred Stock”) are as set forth in that certain
Certificate of Designations of the Series A-1 Convertible Preferred Stock,
Series A-2 Convertible Preferred Stock, Series A-3 Convertible Preferred Stock,
Series A-4 Convertible Preferred Stock, Series A-5 Convertible Preferred Stock
and Series A-6 Convertible Preferred Stock of the Corporation filed by the
Corporation with the Secretary of State of the State of Delaware on May 17,
2011, as amended to date and from time to time (the “Existing Certificate”).

 

2.              Ranking.  As to dividends (other than with respect to the
payment of the Series A-5 Special Accruing Dividend (as defined in the Existing
Certificate) which shall rank senior in payment to any other dividends payable
on any and all series of Preferred Stock) and upon Liquidation (as defined in
Section 4(b) hereof) or an Event of Sale (as defined in Section 5 hereof), each
share of Series B Stock shall rank equally with each other share of Series B
Stock, senior to all shares of Series A-1 Stock, Series A-2 Stock, Series A-3
Stock, Series A-4 Stock, Series A-5 Stock and Series A-6 Stock and senior to all
shares of Common Stock and all other classes or series of stock not authorized
by this Certificate or the Existing Certificate as of the date hereof (the
“Effective Time”), except as otherwise approved by the affirmative vote or
consent of (i) the holders of at least 70% of the then outstanding shares of
Series B Stock and (ii)

 

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the Senior Majority (as defined in the Existing Certificate) (the stockholders
referenced in the immediately preceding clauses (i) and (ii) being referred to
herein collectively as the “Required Investor Majority”).

 

3.              Dividend Provisions.

 

(a)                     The holders of shares of Series B Stock shall be
entitled to receive a per share dividend at the rate of 8% of the Series B
Original Purchase Price (as defined in Section 8 hereof) per annum, compounding
annually (the “Series B Accruing Dividend”), and which will accrue on a daily
basis, whether or not declared, commencing on the date of issuance of such share
of Series B Stock.  The holders of Series B Stock shall be entitled to receive
dividends prior in right to the payment of dividends and other distributions
(whether in cash, property or securities of the Corporation, including
subscription or other rights to acquire securities of the Corporation) on the
Series A-1 Stock, Series A-2 Stock, Series A-3 Stock, Series A-4 Stock,
Series A-5 Stock, Series A-6 Stock and Common Stock, but not with respect to the
payment of the Series A-5 Special Accruing Dividend, as set forth in
Section 3(d) of the Existing Certificate, which shall rank senior in payment to
any dividends payable with respect to the Series B Stock.  Any dividends with
respect to the Series B Stock shall be payable, at the sole discretion of the
Board of Directors, in cash or the issuance of that number of shares of Common
Stock equal to the quotient obtained by dividing (x) the amount of such accrued
and unpaid dividends thereon by (y) the Current Market Price (as defined in
Section 7(e)(viii) hereof) of a share of Common Stock, when as and if declared
or paid by the Board of Directors and, as accrued, on any Liquidation (as
defined in Section 4(b) hereof) or Event of Sale (as defined in Section 5
hereof). Dividends with respect to the Series B Stock shall be payable in shares
of Common Stock (calculated based upon the then effective Series B Conversion
Price, as defined in Section 7(e) hereof), as accrued, upon the conversion of
the Series B Stock into Common Stock.  Whenever any dividend may be declared or
paid on any share of Series B Stock, the Board of Directors shall also declare
and pay a dividend on the same terms, at the same rate and in like kind upon
each other share of the Series B Stock then outstanding, so that all outstanding
shares of Series B Stock will participate equally with each other and ratably
per share (calculated as provided in Section 3(b) hereof).  Whenever any
dividend or other distribution, whether in cash or property or in securities of
the Corporation (or subscription or other rights to purchase or acquire
securities of the Corporation), may be declared or paid on: (i) any shares of
the Common Stock, the Board of Directors shall also declare and pay a dividend
on the same terms, at the same rate and in like kind upon each share of the
Series B Stock then outstanding so that all outstanding shares of Series B Stock
will participate in such dividend ratably with such shares of Common Stock
(calculated as provided in Section 3(b) hereof); or (ii) any shares of any other
series of Preferred Stock (other than the Series A-1 Accruing Dividend, the
Series A-2 Accruing Dividend, the Series A-3 Accruing Dividend, and the
Series A-5 Special Accruing Dividend, the Board of Directors shall also declare
and pay a dividend on the same terms, at the same or equivalent rate upon each
share of the Series B Stock then outstanding so that all outstanding shares of
Series B Stock will participate in such dividend ratably with such shares of
such other series of Preferred Stock (based on the number of shares of Common
Stock into which each share of Series B Stock and each share of such other
series of Preferred Stock is then convertible, if applicable, or, otherwise, the
relative liquidation preference per share, of such other series of Preferred
Stock as compared with the Series B Stock then outstanding).

 

(b)                                 In connection with any dividend declared or
paid hereunder, each share of Series B Stock shall be deemed to be that number
of shares (including fractional shares) of Common Stock into which it is then
convertible, rounded up to the nearest one-tenth of a share.  No fractional
shares of capital stock shall be issued as a dividend hereunder. The Corporation
shall pay a cash adjustment for any such fractional interest in an amount equal
to the fair market value thereof on the last Business Day (as defined in
Section 8 hereof) immediately preceding the date for payment of dividends as
determined by the Board of Directors in good faith.

 

2

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4.              Liquidation Rights.

 

(a)                                 As to rights upon any Liquidation (as
defined in Section 4(b) hereof) or an Event of Sale (as defined in Section 5
hereof), each share of Series B Stock shall rank equally with each other share
of Series B Stock and senior to all shares of Series A-1 Stock, Series A-2
Stock, Series A-3 Stock, Series A-4 Stock, Series A-5 Stock, Series A-6 Stock,
Common Stock and all other classes or series of stock not authorized by this
Certificate or the Existing Certificate as of the Effective Time, except as
otherwise approved by the affirmative vote or consent of the Required Investor
Majority.

 

(b)                                 In the event of any liquidation, dissolution
or winding-up of the affairs of the Corporation (collectively, a “Liquidation”):
(i) the holders of shares of Series B Stock then outstanding (the “Series B
Stockholders”) shall be entitled to receive, ratably with each other, out of the
assets of the Corporation legally available for distribution to its
stockholders, whether from capital, surplus or earnings, before any payment
shall be made to the holders of shares of Series A-1 Stock then outstanding
(such holders, the “Series A-1 Stockholders”), the holders of shares of
Series A-2 Stock then outstanding (such holders, the “Series A-2 Stockholders”),
the holders of shares of Series A-3 Stock then outstanding (such holders, the
“Series A-3 Stockholders”), the holders of shares of Series A-4 Stock then
outstanding (such holders, the “Series A-4 Stockholders”), the holders of shares
of Series A-5 Stock then outstanding (such holders, the “Series A-5
Stockholders”) or the holders of shares of Series A-6 Stock then outstanding
(such holders, the “Series A-6 Stockholders” and collectively with the
Series A-1 Stockholders, Series A-2 Stockholders, Series A-3 Stockholders,
Series A-4 Stockholders and the Series A-5 Stockholders, the “Preferred
Stockholders”), or the holders of shares of Common Stock or any other class or
series of stock ranking on Liquidation junior to such Series B Stock, an amount
per share equal to the sum of (A) the product of two (2) and the Series B
Original Purchase Price (as defined in Section 8 hereof), plus (B) an amount
equal to any declared or accrued but unpaid dividends thereon, calculated
pursuant to Section 3(a) hereof; and (ii) after the distribution to the Series B
Stockholders and to the holders of any other class or series of capital stock
that is senior to the Series A-1 Stock as to Liquidation of the full amount to
which they are entitled to receive pursuant to this Section 4(b) or any other
section of this Certificate as in effect from time to time, the Preferred
Stockholders and the holders of shares of Common Stock or any other class or
series of stock ranking on Liquidation junior to the Series B Stock, shall be
entitled to receive, out of the assets of the Corporation legally available for
distribution to its stockholders, whether from capital, surplus or earnings, an
amount, if any, as determined in accordance with the terms of the Existing
Certificate, subject to the terms of Section 4(d) of this Certificate.

 

(c)                                  If, upon any Liquidation, the assets of the
Corporation available for distribution to its stockholders shall be insufficient
to pay the Series B Stockholders the full amount to which each of them shall be
entitled pursuant to Section 4(b) above, then the Series B Stockholders shall,
prior to the Preferred Stockholders, the holders of shares of Common Stock or
any other class or series of stock ranking on Liquidation junior to such
Series B Stock, share ratably in any distribution of assets according to the
respective amounts which would be payable to them in respect of the shares of
Series B Stock held upon such distribution if all amounts payable on or with
respect to such shares were paid in full.

 

(d)                                 In the event of any Liquidation, after
payments shall have been made first to the Preferred Stockholders and to the
holders of any class or series of capital stock that is senior to or on parity
with the Preferred Stock, or any series thereof, as in effect from time to time,
and to the holders of any class or series of capital stock that is junior to or
on parity with the Preferred Stock but senior to the Common Stock, of the full
amount to which they each shall be entitled as aforesaid, the holders of Common
Stock, as a class, shall be entitled to share ratably with the holders of
Participating Preferred Stock (as provided in the last sentence in this
Section 4(d)) in all remaining assets of the Corporation legally available for
distribution to its stockholders.  For purposes of calculating the amount of any

 

3

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payment to be paid upon any such Liquidation pursuant to the participation
feature described in this Section 4(d), each share of such Participating
Preferred Stock shall be deemed to be that number of shares (including
fractional shares and any shares attributable to the payment of accrued and
unpaid dividends upon conversion of such Participating Preferred Stock pursuant
to Section 7(b)) of Common Stock into which it is then convertible, rounded to
the nearest one-tenth of a share.

 

(e)                                  (i) In the event of and simultaneously with
the closing of an Event of Sale, the Corporation shall, unless waived by the
affirmative vote or consent of the holders of at least 70% of the then
outstanding shares of Series B Stock (the “Series B Majority”) or otherwise
prevented by law, redeem all of the shares of Series B Stock then outstanding
for a cash amount per share determined as set forth in Sections
Section 4(a) through (d) hereof (the “Series B Special Liquidation Price,” said
redemption being referred to herein as a “Series B Special Liquidation”).  In
the event the Event of Sale involves consideration that does not consist of
cash, then the Series B Special Liquidation Price may be paid with such
consideration having a value equal to the Series B Special Liquidation Price. 
To the extent there is any cash consideration in connection with an Event of
Sale, at the option of the Series B Majority, the cash consideration will first
(i) be applied to satisfy the Series B Special Liquidation Price payable to the
Series B Stockholders and to the holders of any other class or series of capital
stock that is senior to or on parity with the Series B Stock as to Liquidation;
and then (ii) be applied, pursuant to, and in accordance with, the terms of the
Existing Certificate, to satisfy the Special Liquidation Price (as defined in
the Existing Certificate) payable to the Preferred Stockholders and to the
holders of any other class or series of capital stock that is junior to the
Series B Stock but senior to or on parity with any other series of Preferred
Stock as to Liquidation.  For all purposes of this Section 4(e), the Series B
Special Liquidation Price shall be equal to that amount per share which would be
received by each Series B Stockholder if, in connection with an Event of Sale,
all the consideration paid in exchange for the assets or the shares of capital
stock (as the case may be) of the Corporation were actually paid to and received
by the Corporation and the Corporation were immediately thereafter liquidated
and its assets distributed pursuant to Sections 4(a) through (d) hereof.  To the
extent that the Series B Special Liquidation and/or Special Liquidations (as
defined in the Existing Certificate) are occurring concurrently, the Series B
Special Liquidation under this Section 4(e) shall be deemed to occur first.  The
date upon which the Series B Special Liquidation shall occur is sometimes
referred to herein as the “Series B Special Liquidation Date”.

 

(ii)                                  In the absence of an applicable waiver
pursuant to Section 4(e) above, at any time on or after the Series B Special
Liquidation Date, a Series B Stockholder shall be entitled to receive the
Series B Special Liquidation Price for each such share of Series B Stock owned
by such holder.  Subject to the provisions of Section 4(e)(iii) hereof, payment
of the Series B Special Liquidation Price will be made to each such holder upon
actual delivery to the Corporation or its transfer agent of the certificate of
such holder representing such shares of Series B Stock, as the case may be, or
an affidavit of loss as to the same.

 

(iii)                               If on the Series B Special Liquidation Date
less than all the shares of Series B Stock then outstanding may be legally
redeemed by the Corporation, the Series B Special Liquidation shall be made
first as to the Series B Stock (and any other class or series of capital stock
that is senior to or on parity with the Series B Stock as to Liquidation), pro
rata with respect to such Series B Stock (or such other class or series of
capital stock that is senior to or on parity with the Series B Stock as to
Liquidation) based upon the number of outstanding shares of Series B Stock (or
such other class or series of capital stock that is senior to or on parity with
the Series B Stock as to Liquidation) then owned by each such holder thereof
until such holders are satisfied in full.

 

4

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(iv)                              On and after any Series B Special Liquidation
Date, all rights in respect of the shares of Series B Preferred Stock to be
redeemed shall cease and terminate except the right to receive the applicable
Series B Special Liquidation Price as provided herein, and such shares of
Series B Stock shall no longer be deemed to be outstanding, whether or not the
certificates representing such shares of Series B Stock have been received by
the Corporation; provided, however, that, if the Corporation defaults in the
payment of the Series B Special Liquidation Price with respect to any Series B
Stock, the rights of the holder(s) thereof with respect to such shares of
Series B Stock shall continue until the Corporation cures such default.

 

(v)                                 Anything contained herein to the contrary
notwithstanding, all or any of the provisions of this Section 4(e) may be waived
by the Required Investor Majority, by delivery of written notice of waiver to
the Corporation prior to the closing of any Event of Sale.

 

(vi)                              Any notice required to be given to the holders
of shares of Series B Stock pursuant to Section 7(g) hereof in connection with
an Event of Sale shall include a statement by the Corporation of (A) the
Series B Special Liquidation Price which each Series B Stockholder shall be
entitled to receive upon the occurrence of a Series B Special Liquidation under
this Section 4(e) and (B) the extent to which the Corporation will, if at all,
be legally prohibited from paying each holder of Series B Stock the Series B
Special Liquidation Price.

 

5.              Definition of “Event of Sale”.  For purposes of this Certificate
of Designations, an “Event of Sale” shall mean: (A) the sale by the stockholders
of voting control of the Corporation, (B) the merger, consolidation or
reorganization with or into any other corporation, entity or person or any other
corporate reorganization, in which (I) the capital stock of the Corporation
immediately prior to such merger, consolidation or reorganization represents
less than 50% of the voting power of the surviving entity (or, if the surviving
entity is a wholly owned subsidiary, its parent) immediately after such merger,
consolidation or reorganization or (II) the surviving entity (or, if the
surviving entity is a wholly owned subsidiary, its parent) has a class of
securities that is (or has been within 90 days prior to such transaction)
tradeable on any public market or exchange or (C) the sale, exclusive license or
other disposition of all or substantially all of the assets or intellectual
property of the Corporation in a single transaction or series of related
transactions.

 

6.              Voting.

 

(a)                                 Subject to any separate voting rights
provided for herein or otherwise required by law, the holders of Series B Stock
shall be entitled to vote, together with the holders of Common Stock and the
holders of other Preferred Stock as one class, on all matters as to which
holders of Common Stock shall be entitled to vote, in the same manner and with
the same effect as such holders of Common Stock.  In any such vote, each share
of Series B Stock shall entitle the holder thereof to the number of votes per
share that equals the number of shares of Common Stock (including fractional
shares) into which each such share of Series B Stock is then convertible,
rounded up to the nearest one-tenth of a share, but not including any shares of
Common Stock issuable upon conversion of any dividends accrued on such Series B
Stock.

 

(b)                                 Except as otherwise expressed, implied or
contemplated in this Certificate or the Series B Purchase Agreement, the
Corporation shall not, directly or indirectly, through a merger, consolidation,
reorganization or otherwise, without the affirmative approval of the holders of
the Required Investor Majority acting separately from the holders of Common
Stock or any other securities of the Corporation, given by written consent in
lieu of a meeting or by vote at a meeting called for such purpose, for which
meeting or approval by written consent timely and specific notice in the manner

 

5

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provided in the by-laws of the Corporation shall have been given to each
Series B Stockholder, do any of the following:

 

(i)                                     authorize, create, designate, issue or
sell any class or series of capital stock (including any shares of treasury
stock) or rights, options, warrants or other securities convertible into or
exercisable or exchangeable for capital stock which by its terms is convertible
into or exchangeable for any equity security, other than Excluded Stock (as
defined in Section 7(e)(ii) of this Certificate), which, as to the payment of
dividends or distribution of assets, including without limitation distributions
to be made upon a Liquidation, is senior to or on a parity with the Series B
Stock; or

 

(ii)                                  amend, alter or repeal any provision of
this Certificate or the Existing Certificate; or

 

(iii)                               permit, approve or agree to any Liquidation,
Event of Sale, dissolution or winding up of the Corporation.

 

The foregoing approval shall be obtained in addition to any approval required by
law.

 

(c)                                  The Corporation shall obtain the consent of
the Board of Directors before it may authorize or issue any additional shares of
capital stock of the Corporation or any of its subsidiaries.

 

(d)                                 Unless a different vote is specified in this
Certificate, any of the rights, powers, preferences and other terms of the
Series B Stock set forth herein may be waived on behalf of all holders of
Series B Stock by the affirmative written consent or vote of the Series B
Majority.

 

7.              Conversion.

 

(a)                                 Any Series B Stockholder shall have the
right, at any time or from time to time, to convert any or all of its shares of
Series B Stock into that number of fully paid and nonassessable shares of Common
Stock for each share of Series B Stock so converted equal to the quotient of the
Series B Original Purchase Price divided by the Series B Conversion Price (as
defined in Section 7(e) hereof) for such share of Series B Stock, as last
adjusted and then in effect; provided, however, that cash shall be paid in lieu
of the issuance of fractional shares of Common Stock, as provided in
Section 7(d) hereof.

 

(b)                                            
(i)                                     Any Series B Stockholder who exercises
the right to convert shares of Series B Stock into shares of Common Stock
pursuant to this Section 7 shall be entitled to payment of all accrued
dividends, whether or not declared and all declared but unpaid dividends payable
with respect to such Series B Stock pursuant to Section 3 herein, up to and
including the Conversion Date (as defined in Section 7(b)(iii) hereof).

 

(ii)                                  Any Series B Stockholder may exercise the
right to convert such shares into Common Stock pursuant to this Section 7 by
delivering to the Corporation during regular business hours, at the office of
the Corporation or any transfer agent of the Corporation or at such other place
as may be designated by the Corporation, the certificate or certificates for the
shares to be converted (the “Series B Certificate”), duly endorsed or assigned
in blank to the Corporation (if required by it) or an affidavit of loss as to
the same.

 

6

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(iii)                               Each Series B Certificate shall be
accompanied by written notice stating that such holder elects to convert such
shares and stating the name or names (with address) in which the certificate or
certificates for the shares of Common Stock (the “Common Certificate”) are to be
issued.  Such conversion shall be deemed to have been effected on the date when
such delivery is made, and such date is referred to herein as the “Conversion
Date.”

 

(iv)                              As promptly as practicable thereafter, the
Corporation shall issue and deliver to or upon the written order of such holder,
at the place designated by such holder, (A) a Common Certificate for the number
of full shares of Common Stock to which such holder is entitled and (B) a check
or cash in respect of any fractional interest in shares of Common Stock to which
such holder is entitled, as provided in Section 7(d) hereof, payable with
respect to the shares so converted up to and including the Conversion Date.

 

(v)                                 The person in whose name the Common
Certificate or Certificates are to be issued shall be deemed to have become a
holder of record of Common Stock on the applicable Conversion Date, unless the
transfer books of the Corporation are closed on such Conversion Date, in which
event the holder shall be deemed to have become the stockholder of record on the
next succeeding date on which the transfer books are open, provided that the
Series B Conversion Price  upon which the conversion shall be executed shall be
that in effect on the Conversion Date.

 

(vi)                              Upon conversion of only a portion of the
number of shares represented by a Series B Certificate, the Corporation shall
issue and deliver to or upon the written order of the holder of such Series B
Certificate, at the expense of the Corporation, a new certificate covering the
number of shares of Series B Stock representing the unconverted portion of the
shares of Series B Stock represented by the Series B Certificate, which new
certificate shall entitle the holder thereof to all the rights, powers and
privileges of a holder of such Series B Stock.

 

(c)                                  If a Series B Stockholder shall surrender
more than one share of Series B Stock for conversion at any one time or holds
more than one share of Series B Stock that is automatically converted, including
without limitation pursuant to a Special Mandatory Conversion, then the number
of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series B Stock so
surrendered or held.

 

(d)                                 No fractional shares of Common Stock shall
be issued upon conversion of Series B Stock. The Corporation shall instead pay a
cash adjustment for any such fractional interest in an amount equal to the
Current Market Price thereof on the Conversion Date, as determined in accordance
with Section 7(e)(viii) hereof.

 

(e)                                  For all purposes of this Certificate of
Designations, the initial conversion price of the Series B Stock shall be
$6.142, subject to adjustment from time to time as follows (the conversion price
of the Series B Stock is referred to herein as the “Series B Conversion Price”):

 

(i)                                     Subject to Section 7(e)(ii) and
7(e)(x) below, if the Corporation shall, at any time or from time to time after
the Series B Original Issuance Date, issue or sell any shares of Common Stock
(which term, for purposes of this Section 7(e)(i), including all subsections
thereof, shall be deemed to include all other securities convertible into, or
exchangeable or exercisable for, shares of Common Stock (including, but not
limited to, Preferred Stock)) or options to purchase or other rights to
subscribe for such convertible or exchangeable securities, in each case other
than Excluded Stock (as defined in Section 7(e)(ii) below), for a consideration
per share less than the Series B Conversion Price in effect immediately prior to
the issuance of such Common Stock or other securities (a “Dilutive

 

7

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Issuance”), then the Series B Conversion Price in effect immediately prior to
each such Dilutive Issuance shall automatically be reduced to a price equal to
the product obtained by multiplying such Series B Conversion Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance (including, without limitation,
shares of Common Stock issued or issuable upon conversion of the outstanding
Series B Stock, but excluding shares of Common Stock issuable upon conversion of
any dividends accrued on such Series B Stock) plus the number of shares of
Common Stock that the aggregate consideration received by the Corporation for
the additional stock so issued would purchase at such Series B Conversion Price
as in effect immediately prior to such issuance, and the denominator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issuance (including, without limitation, shares of Common Stock issued or
issuable upon conversion of the outstanding Series B Stock, but excluding shares
of Common Stock issuable upon conversion of any dividends accrued on such
Series B Stock) plus the number of shares of additional stock so issued.  For
purposes of this Section 7(e)(i), the number of shares of Common Stock deemed
issuable upon conversion of such outstanding shares of Series B Stock shall be
determined without giving effect to any adjustments to the Series B Conversion
Price resulting from the Dilutive Issuance that is the subject of this
calculation. For the purposes of any adjustment of the Series B Conversion Price
pursuant to this Section 7(e)(i), the following provisions shall be applicable.

 

a.                                      In the case of the issuance of Common
Stock in whole or in part for cash, the consideration shall be deemed to be the
amount of cash paid therefor after deducting therefrom any discounts,
commissions or other expenses allowed, paid or incurred by the Corporation for
any underwriting or otherwise in connection with the issuance and sale thereof,
plus the value of any property other than cash received by the Corporation,
determined as provided in Section 7(e)(i)(b) hereof, plus the value of any other
consideration received by the Corporation determined as set forth in
Section 7(e)(i)(c) hereof.

 

b.                                      In the case of the issuance of Common
Stock for a consideration in whole or in part in property other than cash, the
value of such property other than cash shall be deemed to be the fair market
value of such property as determined in good faith by the Board of Directors,
irrespective of any accounting treatment; provided, however, that such fair
market value of such property as determined by the Board of Directors shall not
exceed the aggregate Current Market Price (as defined in
Section 7(e)(viii) hereof) of the shares of Common Stock or such other
securities being issued, less any cash consideration paid for such shares,
determined as provided in Section 7(e)(i)(a) hereof and less any other
consideration received by the Corporation for such shares, determined as set
forth in Section 7(e)(i)(c) hereof.

 

c.                                       In the case of the issuance of Common
Stock for consideration in whole or in part other than cash or property, the
value of such other consideration shall be deemed to be the aggregate par value
of such Common Stock (or the aggregate stated value if such Common Stock has no
par value).

 

d.                                      In the case of the issuance of options
or other rights to purchase or subscribe for Common Stock or the issuance of
securities by their terms convertible into or exchangeable or exercisable for
Common Stock or options to purchase or other rights to subscribe for such
convertible or exchangeable or exercisable securities:

 

i.                                          the aggregate maximum number of
shares of Common Stock deliverable upon exercise of such options to purchase or
rights to subscribe for Common Stock shall be deemed to have been issued at the
time such options or rights were issued and for a consideration equal to the
consideration (determined in the manner provided in Sections 7(e)(i)(a), (b)

 

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and (c) hereof), if any, received by the Corporation upon the issuance of such
options or rights plus the minimum purchase price provided in such options or
rights for the Common Stock covered thereby (the consideration in each case to
be determined in the manner provided in Sections 7(e)(i)(a), (b) and
(c) hereof);

 

ii.                                       the aggregate maximum number of shares
of Common Stock deliverable upon conversion of, or in exchange for, any such
convertible or exchangeable securities or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be deemed to have been
issued at the time such securities were issued or such options or rights were
issued and for a consideration equal to the consideration received by the
Corporation for any such securities and related options or rights (excluding any
cash received on account of accrued interest or accrued dividends), plus the
minimum additional consideration, if any, to be received by the Corporation upon
the conversion or exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be determined in the manner
provided in Sections 7(e)(i)(a), (b) and (c) hereof);

 

iii.                                    if there is any change (whether
automatic pursuant to the terms contained therein or as a result of the
amendment of such terms) in the exercise price of, or number of shares
deliverable upon exercise of, any such options or rights or upon the conversion
or exchange of any such convertible or exchangeable securities (other than a
change resulting from the original antidilution provisions thereof in place at
the time of issuance of such security), then the Series B Conversion Price shall
automatically be readjusted in proportion to such change (notwithstanding the
foregoing, no adjustment pursuant to this clause shall have the effect of
increasing the Series B Conversion Price to an amount which exceeds the lower of
(i) the Series B Conversion Price on the original adjustment date, or (ii) the
Series B Conversion Price that would have resulted from any Dilutive Issuances
between the original adjustment date and such readjustment date);

 

iv.                                   upon the expiration of any such options or
rights or the termination of any such rights to convert or exchange such
convertible or exchangeable securities (or in the event that the change that
precipitated an adjustment pursuant to Section 7(e)(i)(d)(iii) hereof is
reversed or terminated, or expires), then the Series B Conversion Price shall be
automatically readjusted to the Series B Conversion Price that would have been
obtained had such options, rights or convertible or exchangeable securities not
been issued; and

 

v.                                      if the terms of any option or
convertible security (excluding options or convertible securities which, upon
exercise, conversion or exchange thereof, would entitle the holder thereof to
receive shares of Common Stock which are Excluded Stock), the issuance of which
was not a Dilutive Issuance, are revised after the Series B Original Issuance
Date (either automatically pursuant the provisions contained therein or as a
result of an amendment to such terms) to provide for either (1) any increase in
the number of shares of Common Stock issuable upon the exercise, conversion or
exchange of any such option or convertible security or (2) any decrease in the
consideration payable to the Corporation upon such exercise, conversion or
exchange, then such option or convertible security, as so amended, and the
shares of Common Stock subject thereto shall be deemed to have been issued
effective upon such increase or decrease becoming effective.

 

e.                                       In the case of the issuance of shares
of Common Stock on more than one date that are a part of one transaction or a
series of related transactions and that would result in an adjustment to the
Series B Conversion Price pursuant to the terms of this Section 7(e), and such
issuance dates occur within a period of no more than 90 days from the first such
issuance to the final such issuance, then, upon the final such issuance, the
Series B Conversion Price shall be readjusted

 

9

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to give effect to all such issuances as if they occurred on the date of the
first such issuance (and without giving effect to any additional adjustments as
a result of any such subsequent issuances within such period).

 

(ii)                                  “Excluded Stock” shall mean:

 

a.                                      Common Stock issued upon conversion of
any shares of Preferred Stock, including any shares of Common Stock issuable
upon conversion of any dividends accrued on such Preferred Stock;

 

b.                                      Common Stock issued or issuable to
officers, directors or employees of, or consultants, advisors or independent
contractors to, the Corporation, pursuant to any written agreement, plan or
arrangement to purchase, or rights to subscribe for, such Common Stock approved
by the Board of Directors, including each of the Preferred Directors (as defined
in the Existing Certificate);

 

c.                                       Common Stock issued as a stock dividend
or distribution payable in shares of Common Stock, or capital stock of any other
class issuable upon any subdivision, recombination, split-up or reverse stock
split of all the outstanding shares of such class of capital stock;

 

d.                                      Common Stock or other securities issued
or issuable to banks, lenders, equipment lessors or landlords, provided that
each such issuance is approved by the Board of Directors, including, but not
limited to, warrants to acquire Common Stock held by Silicon Valley Bank (or its
affiliates, successors and assignees), warrants to purchase Preferred Stock
issued to GE Capital Equity Investments, Inc. or any of its affiliates (“GECEI”)
and Oxford Finance Corporation or any of its affiliates (“OFC”) pursuant to a
debt financing approved by the Board of Directors (the “GE Financing”), shares
of Preferred Stock issued or issuable to GECEI in connection with the GE
Financing or upon exercise by GECEI or OFC of warrants issued in the GE
Financing and shares of common stock issuable upon conversion of any such shares
of Preferred Stock issued to GECEI or OFC pursuant to the GE Financing;

 

e.                                       Common Stock or other securities issued
or issuable to suppliers or third party service providers in connection with the
provision of goods or services or to other third parties in connection with
sponsored research agreements, collaboration agreements, development agreements,
strategic partnerships or alliances, corporate partnerships, joint ventures or
other licensing transactions, provided that each such transaction and related
issuance is approved by the Board of Directors, including, but not limited to,
(A) any shares of Preferred Stock or Common Stock issued or issuable to Ipsen
Pharma SAS (“Ipsen”), pursuant to the terms of that certain License Agreement,
as amended and may be amended with the approval of the Board of Directors of the
Corporation and in effect from time to time, by and between the Corporation and
Ipsen as payment for milestones in lieu of cash payments and (B) shares of
Series A-5 Stock issued pursuant to the Stock Issuance Agreement (as defined in
Section 3(d) of the Existing Certificate) and the issuance of Series A-6 Stock
issued or to be issued as dividends on such Series A-5 Stock, and shares of
Common Stock issuable upon conversion of any such shares of Series A-5 Stock and
Series A-6 Stock;

 

f.                                        Common Stock or other securities
issued or issuable pursuant to the acquisition by the Corporation of any other
corporation, partnership, joint venture, trust or other entity by any merger,
stock acquisition, reorganization, or purchase of substantially all assets or
otherwise in which the Corporation or its stockholders of record immediately
prior to the

 

10

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effective date of such transaction, directly or indirectly, own a majority of
the voting power of the acquired entity or the resulting entity after such
transaction, in each case so long as such transaction is approved by the Board
of Directors;

 

g.                                       Common Stock or other securities, the
issuance of which is approved by the Required Investor Majority, with such
approval expressly waiving the application of the anti-dilution provisions of
this Section 7 as a result of such issuance;

 

h.                                      Preferred Stock or Common Stock issued
or issuable pursuant to any warrant outstanding as of the date hereof or any
warrant and any shares of Preferred Stock or Common Stock, or Common Stock
issued upon conversion of any Preferred Stock, issued in connection with the
Qualified Financing, any shares of Preferred Stock or Common Stock upon exercise
thereof and any Common Stock issuable upon conversion of such Preferred Stock
issued upon exercise thereof;

 

i.                                          Common Stock or Convertible
Securities actually issued upon the exercise of Options or shares of Common
Stock actually issued upon the conversion or exchange of Convertible Securities,
in each case provided such issuance is pursuant to the terms of such Option or
Convertible Security; and

 

j.                                         All Series B Stock and other
securities issued pursuant to the Series B Purchase Agreement, and all shares of
Common Stock issued or issuable upon conversion of any such shares of Series B
Stock or exercise or conversion of any such other securities.

 

(iii)                               If the number of shares of Common Stock
outstanding at any time after the Series B Original Issuance Date (as defined in
Section 8) is increased by a stock dividend payable in shares of Common Stock or
by a subdivision or split-up of shares of Common Stock, then, following the
record date fixed for the determination of holders of Common Stock entitled to
receive such stock dividend, subdivision or split-up, the Series B Conversion
Price shall be appropriately decreased in the form of a Proportional Adjustment
(as defined in Section 8) so that the number of shares of Common Stock issuable
on conversion of each share of Series B Stock shall be increased in proportion
to such increase in outstanding shares.

 

(iv)                              If the number of shares of Common Stock
outstanding at any time after the Series B Original Issuance Date is decreased
by a combination of the outstanding shares of Common Stock, then, following the
record date for such combination, the Series B Conversion Price shall be
appropriately increased in the form of a Proportional Adjustment so that the
number of shares of Common Stock issuable on conversion of each share of
Series B Stock shall be decreased in proportion to such decrease in outstanding
shares.

 

(v)                                 Except as otherwise contemplated in the
Series B Purchase Agreement, if at any time after the Series B Original Issuance
Date, the Corporation shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation (other than shares
of Common Stock) or in cash or other property, then and in each such event
provision shall be made so that the holders of the Series B Stock shall receive
upon conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the kind and amount of securities of the Corporation, cash
or other property which they would have been entitled to receive had the
Series B Stock been converted into Common Stock on the date of such event and
had they thereafter, during the period from the date of such event to and
including the conversion date, retained such securities receivable by them as
aforesaid during such period, giving application to all

 

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adjustments called for during such period under this paragraph with respect to
the rights of the holders of the Series B Stock; and provided further, however,
that no such adjustment shall be made if the holders of Series B Stock
simultaneously receive a dividend or other distribution of such securities,
cash, or other property in an amount equal to the amount of such securities,
cash, or other property as they would have received if all outstanding shares of
Series B Stock had been converted into Common Stock on the date of such event.

 

(vi)                              Subject to the provisions of
Section 4(e) above, in the event, at any time after the Series B Original
Issuance Date, of any capital reorganization, or any reclassification of the
capital stock of the Corporation (other than a change in par value or from par
value to no par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), or the
consolidation or merger of the Corporation with or into another person (other
than a consolidation or merger in which the Corporation is the continuing
corporation and which does not result in any change in the powers, designations,
preferences and rights, or the qualifications, limitations or restrictions, if
any, of the capital stock of the Corporation) or of the sale or other
disposition of all or substantially all the properties and assets of the
Corporation in their entirety to any other person (any such transaction, an
“Extraordinary Transaction”), then the Corporation shall provide appropriate
adjustment in the form of a Proportional Adjustment to the Series B Conversion
Price with respect to each share of Series B Stock outstanding after the
effectiveness of such Extraordinary Transaction such that each share of Series B
Stock outstanding immediately prior to the effectiveness of the Extraordinary
Transaction shall be convertible into the kind and number of shares of stock or
other securities or property of the Corporation, or of the corporation resulting
from or surviving such Extraordinary Transaction, that a holder of the number of
shares of Common Stock deliverable (immediately prior to the effectiveness of
the Extraordinary Transaction) upon conversion of such share of Series B Stock
would have been entitled to receive upon such Extraordinary Transaction. The
provisions of this Section 7(e)(vi) shall similarly apply to successive
Extraordinary Transactions.

 

(vii)                           All calculations under this Section 7(e) shall
be made to the nearest one-tenth of a cent ($.001) or to the nearest one-tenth
of a share, as the case may be.

 

(viii)                        For the purpose of any computation pursuant to
Section 7(d), Section 3(a) hereof or this Section 7(e), the “Current Market
Price” at any date of one share of Common Stock shall be defined as the average
of the daily closing prices for the 20 consecutive Business Days ending on the
fifth (5th) Business Day before the day in question (as adjusted for any stock
dividend, split-up, combination or reclassification that took effect during such
20 Business Day period), determined as follows:

 

a.                                      If the Common Stock is listed or
admitted for trading on a national securities exchange, then the closing price
for each day shall be the last reported sales price regular way or, in case no
such reported sales took place on such day, the average of the last reported bid
and asked prices regular way, in either case on the principal national
securities exchange on which the Common Stock is listed or admitted to trading.

 

b.                                      If the Common Stock is not at the time
listed or admitted for trading on any such exchange, then such price shall be
equal to the last reported bid and asked prices on such day as reported by the
NASD OTCBB or the National Quotation Bureau, Inc., or any similar reputable
quotation and reporting service if such quotation is not reported by the NASD
OTCBB or the National Quotation Bureau, Inc.

 

c.                                       If the Common Stock is not traded in
such manner that the quotations referred to in this Section 7(e)(viii) are
available for the period required

 

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hereunder, then the Current Market Price shall be the fair market value of such
share, as determined in good faith by a majority of the entire Board of
Directors.

 

(ix)                              In any case in which the provisions of this
Section 7(e) shall require that an adjustment shall become effective immediately
after a record date for an event, the Corporation may defer until the occurrence
of such event (A) issuing to the holder of any shares of Series B Stock
converted after such record date and before the occurrence of such event the
additional shares of capital stock issuable upon such conversion by reason of
the adjustment required by such event over and above the shares of capital stock
issuable upon such conversion before giving effect to such adjustment, and
(B) paying to such holder any cash amounts in lieu of fractional shares pursuant
to Section 7(d) hereof; provided, however, that the Corporation shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional shares and such cash upon the occurrence of the
event requiring such adjustment.

 

(x)                                 If a state of facts shall occur that,
without being specifically controlled by the provisions of this Section 7, would
not fairly protect the conversion rights of the holders of the Series B Stock in
accordance with the essential intent and principles of such provisions, then the
Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such conversion rights.

 

(f)                                   Whenever the Series B Conversion Price
shall be adjusted as provided in Section 7(e) hereof, the Corporation shall
forthwith file and keep on record at the office of the Secretary of the
Corporation and at the office of its transfer agent or at such other place as
may be designated by the Corporation, a statement, signed by both its President
or Chief Executive Officer and its Treasurer or Chief Financial Officer, showing
in detail the facts requiring such adjustment and the Series B Conversion Price
that shall be in effect after such adjustment. The Corporation shall also cause
a copy of such statement to be sent by first-class, certified mail, return
receipt requested, postage prepaid, to each Series B Stockholder at such
holder’s address appearing on the Corporation’s records. Where appropriate, such
copy shall be given in advance of any such adjustment and shall be included as
part of a notice required to be mailed under the provisions of
Section 7(g) hereof.

 

(g)                                  In the event the Corporation shall propose
to take any action of the types described in Section 7(e)(i), (iii), (iv) or
(v) hereof, or any other Event of Sale, other than the transactions contemplated
by the Series B Purchase Agreement, the Corporation shall give notice to each
Series B Stockholder in the manner set forth in Section 7(f) hereof, which
notice shall specify the record date, if any, with respect to any such action
and the date on which such action is to take place. Such notice shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Series B Conversion Price with respect to the
Series B Stock, and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon each conversion of
Series B Stock. In the case of any action (other than any action contemplated or
required by the Series B Purchase Agreement) that would require the fixing of a
record date, such notice shall be given at least 20 days prior to the record
date so fixed, and in the case of any other action, such notice shall be given
not later than 30 days following the taking of such proposed action.

 

(h)                                 The Corporation shall pay all documentary,
stamp or other transactional taxes attributable to the issuance or delivery of
shares of capital stock of the Corporation upon conversion of any shares of
Series B Stock; provided, however, that the Corporation shall not be required to
pay any taxes which may be payable in respect of any transfer involved in the
issuance or delivery of any

 

13

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certificate for such shares in a name other than that of the Series B
Stockholder in respect of which such shares of Series B Stock are being issued.

 

(i)                                     The Corporation shall reserve out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the Series B Stock, sufficient shares of Common
Stock to provide for the conversion of all outstanding shares of Series B Stock.

 

(j)                                    All shares of Common Stock which may be
issued in connection with the conversion provisions set forth herein will, upon
issuance by the Corporation, be validly issued, fully paid and nonassessable,
not subject to any preemptive or similar rights, and free from all taxes, liens
or charges with respect thereto created or imposed by the Corporation.

 

8.              Definitions.  As used in this Certificate of Designations, the
following terms shall have the corresponding meanings:

 

“Business Day” shall mean any day other than a Saturday, Sunday or day on which
banks are closed in the city and state where the principal executive office of
the Corporation is located.

 

“Convertible Securities” shall mean any evidences of indebtedness, shares or
other securities directly or indirectly convertible into or exchangeable for
Common Stock, but excluding Options.

 

“Series B Original Issuance Date” shall mean the date of issuance by the
Corporation of the first share of Series B Stock to be issued by the
Corporation.

 

“Series B Original Purchase Price” shall mean, with respect to the Series B
Stock, $61.42 per share, subject, for all purposes other than Section 7 hereof
(which provisions shall be applied in accordance with their own terms), to
Proportional Adjustment.

 

“Option” shall mean rights, options or warrants to subscribe for, purchase or
otherwise acquire Common Stock or Convertible Securities.

 

“Proportional Adjustment” shall mean an adjustment made to the price of the
Series B Stock upon the occurrence of a stock split, reverse stock split, stock
dividend, stock combination reclassification or other similar change with
respect to such security, such that the price of one share of the Series B Stock
before the occurrence of any such change shall equal the aggregate price of the
share (or shares or fractional share) of such security (or any other security)
received by the holder of the Series B Stock with respect thereto upon the
effectiveness of such change.

 

“Qualified Financing” shall mean the transaction involving the issuance of
shares of Series B Stock and warrants to purchase Common Stock pursuant to the
terms of the Series B Purchase Agreement.

 

“Series B Purchase Agreement” shall mean that certain Series B Convertible
Preferred Stock and Warrant Purchase Agreement, dated as of the date of the
filing of this Certificate with the Secretary of State of the State of Delaware,
by and among the Corporation and the “Investors” party thereto.

 

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9.                          Special Mandatory Conversion.

 

(a)                                 Trigger Events.  In the event that (i) the
Series B Majority shall have elected to convert all shares of Series B Stock or
(ii) the Common Stock of the Corporation becomes listed for trading on a
national securities exchange, then each share of Series B Stock shall be
converted automatically into shares of Common Stock, at the then effective
conversion rate.  Each of the conversions set forth in this Section 9(a) is
referred to as a “Special Mandatory Conversion.”  Notwithstanding anything
contained herein to the contrary, including without limitation Section 3 hereof,
all accrued but unpaid dividends on shares of Series B Stock, including without
limitation the Series B Accruing Dividend, shall be paid in cash or shares of
Common Stock, with the decision of whether to pay any such dividend in cash or
in shares of Common Stock being made at the sole discretion of the Board of
Directors (calculated based on the then effective Series B Conversion Price),
upon the conversion of such shares of Series B Stock in connection with a
Special Mandatory Conversion.

 

(b)                                 Procedural Requirements.  Upon a Special
Mandatory Conversion, each holder of shares of Series B Stock converted pursuant
to Section 9(a) shall be sent written notice of such Special Mandatory
Conversion and the place designated for mandatory conversion of all shares of
Series B Stock.  Upon receipt of such notice, each holder of such shares of
Series B Stock shall surrender his, her or its certificate or certificates for
all such shares (or, if such holder alleges that such certificate has been lost,
stolen or destroyed, a lost certificate affidavit and agreement reasonably
acceptable to the Corporation to indemnify the Corporation against any claim
that may be made against the Corporation on account of the alleged loss, theft
or destruction of such certificate) to the Corporation at the place designated
in such notice. If so required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by written instrument or instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
registered holder or by his, her or its attorney duly authorized in writing. 
All rights with respect to the Series B Stock so converted, including the
rights, if any, to receive notices and vote (other than as a holder of Common
Stock), will terminate at the time of the Special Mandatory Conversion
(notwithstanding the failure of the holder or holders thereof to surrender the
certificates for such shares at or prior to such time), except only the rights
of the holders thereof, upon surrender of their certificate or certificates
therefor (or lost certificate affidavit and agreement), to receive the items
provided for in the next sentence of this Section 9(b).  As soon as practicable
after the Special Mandatory Conversion and the surrender of the certificate or
certificates (or lost certificate affidavit and agreement) for Series B Stock so
converted, the Corporation shall issue and deliver to such holder, or to his,
her or its nominees, a certificate or certificates for the number of full shares
of Common Stock issuable on such conversion in accordance with the provisions
hereof, together with cash as provided in Section 7(d) in lieu of any fraction
of a share of Common Stock otherwise issuable upon such conversion and the
payment of any declared but unpaid dividends on the shares of Series B Stock
converted, and a new certificate for the number of shares, if any, of Series B
Stock represented by such surrendered certificate and not converted pursuant to
Section 9(a).  Such converted Series B Stock shall be retired and cancelled and
may not be reissued as shares of such series, and the Corporation may thereafter
take such appropriate action (without the need for stockholder action) as may be
necessary to reduce the authorized number of shares of Series B Stock
accordingly.

 

(c)                                  Duration of Section. This Section 9 and the
rights and obligations of the parties hereunder shall automatically terminate on
the consummation of a Liquidation or an Event of Sale.

 

[signature page follows]

 

15

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IN WITNESS WHEREOF, RADIUS HEALTH, INC. has caused this Certificate to be
executed by Michael S. Wyzga, its President and Chief Executive Officer, this
[ · ] day of April, 2013.

 

 

RADIUS HEATH, INC. .

 

 

 

 

 

By:

 

 

Name:

Michael S. Wyzga

 

Title:

President and Chief Executive Officer

 

16

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Exhibit B

 

Form of Warrant

 

--------------------------------------------------------------------------------

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION RELATED THERETO OR AN OPINION
OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS.

 

Date of Issuance: April [ · ], 2013

 

RADIUS HEALTH, INC.

 

WARRANT TO PURCHASE SHARES OF COMMON STOCK

 

THIS CERTIFIES THAT, for value received, [ · ] (the “Holder”) is entitled to
purchase from Radius Health, Inc., a Delaware corporation (the “Company”),
subject to the terms and conditions of this Warrant, at any time prior to the
Expiration Date (as defined below), [ · ] ([ · ]) shares of the Company’s Common
Stock, par value $.0001 per share (“Common Stock”), at an exercise price per
Warrant Share of $6.142 (the “Exercise Price”).  The shares of Common Stock
purchasable upon exercise of this Warrant are referred to herein as the “Warrant
Shares”.  The Warrant Shares and the Exercise Price are subject to further
adjustment as set forth in Section 2.

 

1.                                      Exercise of Warrant.

 

1.1          Term.  This Warrant shall terminate and no longer be exercisable on
April [ · ], 2018.  For purposes of this Warrant, (a) “Expiration Date” shall
mean the date upon which this Warrant expires in accordance with the terms of
this Section 1.1, and (b) “Purchase Agreement” shall mean that certain Series B
Convertible Preferred Stock and Warrant Purchase Agreement, dated as of
April [ · ], 2013, by and among the Company and the other parties thereto.

 

1.2          Method.  This Warrant may be exercised by the Holder, in whole or
in part, by:

 

(a)           the surrender of this Warrant (with the Notice of Exercise form
attached hereto as Attachment A and the Investment Representation Statement
attached hereto as Attachment B duly executed) at the principal office of the
Company; and

 

(b)           the payment to the Company, by check, wire or cancellation of
indebtedness, of an amount equal to the Exercise Price per share multiplied by
the number of Warrant Shares then being purchased.

 

1.3          Net Exercise.  In lieu of Section 1.2 hereof, the Holder may elect
to convert this Warrant or any portion thereof (the “Conversion Right”), by
surrender of this Warrant at the principal office of the Company together with
notice of the Holder’s intention to exercise the Conversion Right, into that
number of Warrant Shares computed using the following formula:

 

X = Y(A-B)

A

 

--------------------------------------------------------------------------------

 

Where:

 

X =                             The number of Warrant Shares to be issued to the
Holder upon exercise of the Conversion Right.

 

Y =                             The number of Warrant Shares for which this
Warrant is being exercised.

 

A =                             The Fair Market Value (as defined below) of one
Warrant Share at the time the Conversion Right is exercised.

 

B =                             Exercise Price (as adjusted to the date of such
calculation).

 

For purposes of Section 1.3, “Fair Market Value” shall mean:

 

(a)           If the Warrant is exercised in connection with and contingent upon
an initial public offering, and if the Company’s registration statement relating
to such initial public offering has been declared effective by the Securities
and Exchange Commission, then the initial “Price to Public” specified in the
final prospectus with respect to such offering.

 

(b)           If the Warrant is exercised in connection with and contingent upon
an Event of Sale (as defined in the Company’s certificate of incorporation, as
it may be amended and/or restated from time to time (the “Certificate”)), then
the purchase price per share actually received by a holder of Common Stock.

 

(c)           If the Warrant is exercised after the Common Stock is listed or
admitted for trading on a national securities exchange, then the average of the
daily closing prices of the Common Stock for the 20 consecutive trading days
ending on the fifth (5th) trading day before the day in question (as adjusted
for any stock dividend, split-up, combination or reclassification that took
effect during such 20 trading day period) (or such shorter period of time during
which such Common Stock was traded on such exchange), with the closing price for
each day being the last reported sales price or, in case no such reported sales
took place on such day, the average of the last reported bid and asked prices,
in either case on the principal national securities exchange on which the Common
Stock is listed or admitted to trading or, if the Common Stock is not at the
time listed or admitted for trading on any such exchange, then such price shall
be equal to the last reported bid and asked prices on such day as reported by
the NASD OTCBB or the National Quotation Bureau, Inc., or any similar reputable
quotation and reporting service if such quotation is not reported by the NASD
OTCBB or the National Quotation Bureau, Inc.

 

(d)           If none of the immediately preceding clauses (a), (b) or (c) is
applicable, then the fair market value as determined in good faith by the
majority of the entire Board of Directors of the Company.

 

In the event of 1.3(d), above, the Company’s Board of Directors shall prepare a
certificate, to be signed by an authorized officer of Company, setting forth in
reasonable detail the basis for and method of determination of the per share
Fair Market Value of one Warrant Share.

 

1.4          Delivery; Certificate.  Upon receipt by the stock transfer agent or
warrant agent of the Company at its office, together with, if applicable, the
aggregate Exercise Price, the Holder shall be deemed to be the holder of record
of the applicable Warrant Shares, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
Warrant Shares shall not then be actually delivered to the Holder.  The Company
shall, as soon as practicable after the exercise of this Warrant in accordance
with the terms hereof, direct its stock transfer agent to prepare a

 

2

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certificate for the Warrant Shares purchased in the name of the Holder.  If this
Warrant should be exercised in part only, the Company shall, as soon as
practicable after the surrender of this Warrant, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable hereunder.

 

1.5          Exercise Upon a Company Sale.  Notwithstanding anything herein to
the contrary, upon and effective as of the occurrence of an Event of Sale, to
the extent not previously exercised, this Warrant shall automatically be
exercised by the Holder pursuant to Section 1.3 herein without any further
action necessary on the part of the Holder (a “Sale Exercise”) unless the Holder
notifies the Company in writing to the contrary prior to such automatic
exercise; provided, however, that such automatic exercise shall not occur and
this Warrant shall instead be terminated upon and effective as of the occurrence
of an Event of Sale if the Exercise Price equals or exceeds the Fair Market
Value calculated in accordance with Section 1.3(b) hereof in connection with
such Sale Exercise.

 

1.6          Automatic Exercise. To the extent this Warrant is not previously
exercised, it shall be deemed to have been automatically converted in accordance
with Section 1.3 hereof (even if not surrendered) as of immediately before its
expiration, involuntary termination or cancellation if the then-Fair Market
Value of a Warrant Share exceeds the then-Exercise Price, unless Holder notifies
Company in writing to the contrary prior to such automatic exercise.

 

2.                                      Adjustment of Exercise Price and Number
of Warrant Shares.  The number and kind of Warrant Shares purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustment
from time to time upon the occurrence of the following events:

 

2.1          Subdivision or Combination.  If the Company at any time prior to
the Expiration Date shall subdivide or combine its Common Stock, the Exercise
Price shall be proportionately decreased (and the number of Warrant Shares
issuable upon exercise of this Warrant proportionately increased to the nearest
whole) in the case of a subdivision or the Exercise Price shall be
proportionately increased (and the number of Warrant Shares issuable upon
exercise of this Warrant proportionately decreased to the nearest whole) in the
case of a combination.

 

2.2          Reclassification, Reorganization and Consolidation. In case of any
reclassification, capital reorganization or change in the type of securities of
the Company issuable upon exercise of this Warrant (other than as a result of a
subdivision, combination or stock dividend provided for in Section 2.1 above or
Section 2.3 below) or consolidation or merger involving the Company in which the
Common Stock is converted into or exchanged for securities, cash or other
property, then, as a condition of such reclassification, reorganization, change,
consolidation or merger, lawful provision shall be made, and duly executed
documents evidencing the same from the Company or its successor shall be
delivered to the Holder, so that the Holder shall have the right at any time
prior to the expiration of this Warrant to purchase, at a total price equal to
that payable upon the exercise of this Warrant, the kind and amount of shares of
stock and other securities or property receivable in connection with such
reclassification, reorganization, change, consolidation or merger by a holder of
the same number and type of securities as were purchasable as Warrant Shares by
the Holder immediately prior to such reclassification, reorganization, change,
consolidation or merger. In any such case appropriate provisions shall be made
with respect to the rights and interest of the Holder so that the provisions
hereof shall thereafter be applicable with respect to any shares of stock or
other securities or property deliverable upon exercise hereof, and appropriate
adjustments shall be made to the Exercise Price per Warrant Share payable
hereunder, provided the aggregate Exercise Price shall remain, as nearly as
reasonably may be, the same.

 

3

--------------------------------------------------------------------------------

 

2.3          Stock Dividends.  If the Company at any time prior to the
Expiration Date shall pay a dividend with respect to Common Stock payable in
Common Stock (except any distribution accounted for in the foregoing
Section 2.1), then the Exercise Price shall be adjusted (and the number of
Warrant Shares issuable upon exercise of this Warrant proportionately
increased), from and after the record date for shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction
(a) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.

 

2.4          Adjustment Certificate. Whenever the Exercise Price shall be
adjusted as provided in Section 2 hereof, the Company shall forthwith file and
keep on record at the office of the Secretary of the Company and at the office
of its transfer agent or at such other place as may be designated by the
Company, a statement, signed by both its President or Chief Executive Officer
and its Treasurer or Chief Financial Officer, showing in detail the facts
requiring such adjustment and the Exercise Price that shall be in effect after
such adjustment. The Company shall also cause a copy of such statement to be
sent by first-class, certified mail, return receipt requested, postage prepaid,
to the Holder at such Holder’s address appearing on the Company’s records. Where
appropriate, such copy shall be given in advance of any such adjustment.

 

3.                                      Fractional Warrant Shares.  No
fractional Warrant Shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares the Company shall make a cash
payment therefor upon the basis of the Exercise Price then in effect.

 

4.                                      Stock Fully Paid; Reservation of Warrant
Shares.  All Warrant Shares issuable upon the exercise of the rights represented
by this Warrant will, upon issuance, be fully paid and nonassessable.  During
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have authorized and reserved for the purpose of
issuance upon exercise of the purchase rights evidenced by this Warrant, a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.  In the event that there is an insufficient
number of shares of Common Stock reserved for issuance pursuant to the exercise
of this Warrant, the Company will take appropriate action to authorize an
increase in the capital stock to allow for such issuance or similar issuance
acceptable to the Holder.

 

5.                                      Securities Laws; Transfer.

 

5.1          Compliance with Securities Act.  The Holder, by acceptance hereof,
agrees that this Warrant and the Warrant Shares are being acquired for
investment and that it will not offer, sell or otherwise dispose of this Warrant
or any Warrant Shares except under circumstances which will not result in a
violation of the Securities Act of 1933, as amended (the “Act”).  Upon exercise
of this Warrant, the Holder hereof shall confirm in writing, in the form
attached hereto as Attachment B, that the Warrant Shares so purchased are being
acquired for investment and not with a view toward distribution or resale.  In
addition, the Holder shall provide such additional information regarding such
Holder’s financial and investment background as the Company may reasonably
request.  This Warrant and all Warrant Shares (unless registered under the Act)
shall be stamped or imprinted with a legend in substantially the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO,

 

4

--------------------------------------------------------------------------------

 

OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR
QUALIFICATION RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.

 

5.2          Transferability of Warrant.  In connection with any transfer by
Holder of this Warrant, the Company may require the transferee to provide the
Company with written representations and warranties substantially similar to
Holder’s representations and warranties set forth in Attachment B, and may
require Holder to provide a legal opinion, in form and substance satisfactory to
Company and its counsel, that such transfer is exempt from the registration and
prospectus delivery requirements of the Act; provided, that the Company shall
not require Holder to provide an opinion of counsel if the transfer is to an
affiliate of Holder, provided that such affiliate is an “accredited investor” as
defined in Regulation D promulgated under the Act.  Any transferee (including,
without limitation, any affiliate of Holder) shall take this Warrant subject to
all of the terms and conditions thereof and such transferee’s rights under this
Warrant shall be subject to such transferee’s compliance with all of the terms
and conditions of this Warrant that are applicable to Holder.  Following any
transfer of this Warrant, at the request of either the Company or the
transferee, the transferee shall surrender this Warrant to the Company in
exchange for a new warrant of like tenor and date, executed by Company.  Subject
to the foregoing, this Warrant is transferable on the books of the Company at
its principal office by the registered Holder hereof upon surrender of this
Warrant properly endorsed.  Upon any partial transfer, Company will execute and
deliver to Holder a new warrant of like tenor with respect to the portion of
this Warrant not so transferred.  Holder shall not have any right to transfer
any portion of this Warrant to any direct competitor of Company.

 

5.3          Disposition of Warrant Shares.  The Holder agrees not to make any
disposition of all or any portion of the Warrant Shares unless and until (a) the
Holder shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, (b) the transferee has agreed in writing
for the benefit of the Company to be bound by this Section 5 and (c):

 

(i)            there is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or

 

(ii)           the Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of the Warrant Shares under the Act; provided that the
Company will not require opinions of counsel for transactions made pursuant to
Rule 144 except in unusual circumstances.

 

5.4          Market Standoff.  Each Holder agrees, in connection with the
Company’s initial public offering (the “IPO”) of its equity securities (other
than pursuant to a registration statement on Form S-8), and upon request of the
Company or the underwriters managing such offering, (a) not to sell, make any
short sale of, loan, grant any option for the purchase of or otherwise dispose
of any of the Warrants or the Warrant Shares (other than those included in the
registration, if any) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time not to exceed one
hundred eighty (180) days (or such longer period of time as may be required to
accommodate regulatory restrictions on (i) the publication or other distribution
of research reports and (ii) analyst recommendations and opinions, including,
but not limited to, the

 

5

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restrictions contained in FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), as
applicable, (or any successor rules or amendments thereto))) from the effective
date of such registration as may be requested by the Company or such
underwriters and (b) to execute any agreement regarding (a) above as may be
requested by the Company or underwriters at the time of the public offering;
provided that such request is made of all officers, directors and 1% and greater
Stockholders of the Company and each such person shall be similarly bound.  The
Company may impose stop transfer instructions to enforce this Section 5.4.

 

6.                                      Rights of Stockholders.  No Holder of
this Warrant shall be entitled to vote or receive dividends or be deemed the
holder of capital stock or any other equity securities of the Company, nor shall
anything contained herein be construed to confer upon the Holder of this
Warrant, as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant has been exercised and the Warrant Shares shall have become deliverable,
as provided herein.

 

7.                                      Registration Rights.  The Company agrees
that the Warrant Shares issued and issuable upon the exercise or conversion of
this Warrant, shall have registration rights pursuant to and as set forth in the
Company’s Third Amended and Restated Stockholders’ Agreement, as amended and in
effect from time to time (the “Stockholders’ Agreement”).  The foregoing
referenced registration rights are subject to and conditioned upon the Holder,
at the time of exercise of this Warrant, being a party to the Stockholders’
Agreement or becoming a party to the Stockholders’ Agreement by executing and
delivering to the Company an Instrument of Adherence thereto and such
registration rights will be governed by the terms of the Stockholders’
Agreement.

 

8.                                      Miscellaneous.

 

8.1          Governing Law.  The terms and conditions of this Warrant shall be
governed in all respects by the internal laws of the Commonwealth of
Massachusetts without regard to conflicts of laws principles that would result
in the application of the laws of any other jurisdiction.

 

8.2          Successors and Assigns.  This Warrant shall be binding upon any
successors or assigns of the Company and inure to the benefit of the Holder and
any successors or assigns.

 

8.3          Waivers and Amendments. This Warrant is one of a series of Warrants
(collectively, the “Warrants”) that were originally issued by the Company
pursuant to the Purchase Agreement. This Warrant and any provisions hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Holders of Warrants representing a majority of the
number of Warrant Shares then issuable upon the exercise of the Warrants,
provided, however, that the consent of the holder of this Warrant shall be
required if such amendment or waiver adversely affects such holder in a
disproportionate manner than the holders of the other Warrants.

 

8.4          Loss of Warrant.  Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company will execute and deliver a new Warrant of like terms.

 

6

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8.5          Headings.  The headings in this Warrant are for purposes of
convenience and reference only, and shall not be deemed to constitute a part
hereof.

 

8.6          Notices.  All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified, (b) when sent by
confirmed facsimile if sent during normal business hours of the recipient, and
if not so confirmed, then on the next business day, (c) forty-eight (48) hours
after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or after being deposited in the U.S. mail, postage
prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt, in
the case of the Holder, addressed to the Holder at the address set forth on the
signature page hereto and, in the case of the Company, to Radius Health, Inc.,
201 Broadway, Sixth Floor, Cambridge, Massachusetts 02139, Attention: Chief
Financial Officer, with a copy to Latham & Watkins LLP, John Hancock Tower,
20th Floor, 200 Clarendon Street, Boston, Massachusetts 02116, Attention: Peter
N. Handrinos; or as subsequently modified by written notice to the other party.

 

8.7          Counterparts.  This Warrant may be executed in two or more
counterparts (including, but not limited to, by facsimile, PDF or other
electronic copy), each of which shall be deemed an original and all of which
together shall constitute one instrument.

 

(Signature page follows)

 

7

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by a duly
authorized officer.

 

 

 

RADIUS HEALTH, INC.

 

 

 

 

 

By:

 

 

Name:

Michael S. Wyzga

 

Its:

Chief Executive Officer and President

 

 

ACKNOWLEDGED:

 

[Investor signature block to come]

 

[Investor address to come]

 

WARRANT SIGNATURE PAGE

 

--------------------------------------------------------------------------------

 

ATTACHMENT A

 

NOTICE OF EXERCISE

 

TO:         RADIUS HEALTH, INC.

 

o                                    The undersigned hereby elects to purchase
                                   shares of Common Stock of Radius Health, Inc.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the purchase price of such shares in full.

 

o                                    The undersigned hereby elects to convert
the attached Warrant into Warrant Shares in the manner specified in Section 1.3
of the Warrant.  This conversion is exercised with respect to
                                   of the shares covered by the Warrant.

 

[Check the box next to the paragraph above that applies.]

 

2.                                      Please issue a certificate or
certificates representing said shares of Common Stock in the name of the
undersigned or in such other name as is specified below:

 

 

Name:

 

 

 

Address:

 

 

 

3.                                      The undersigned represents that the
aforesaid shares of stock are being acquired for the account of the undersigned
for investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares.  In support thereof, the undersigned has
executed an Investment Representation Statement attached hereto as Attachment B.

 

 

HOLDER

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

 

 

Date:

 

 

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ATTACHMENT B

 

INVESTMENT REPRESENTATION STATEMENT

 

In connection with the exercise or conversion of a Warrant to purchase shares of
Common Stock (the “Warrant Shares”) of Radius Health, Inc. (the “Company”), the
undersigned (the “Holder”) hereby represents and warrants to the Company the
following:

 

(a)           Investment Experience.  It is an “accredited investor” within the
meaning of Rule 501(a) of the Securities Act of 1933, as amended (the “Act”),
and has substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company and
has the capacity to protect its own interests.  It is aware of the Company’s
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Warrant Shares.

 

(b)           Purchase Entirely for Own Account.  The Warrant Shares are being
acquired for investment for the Holder’s own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof.  Holder
has no present intention of selling, granting any participation in, or otherwise
distributing the Warrant Shares.  The Holder further represents that it does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations, to such person or to any third person,
with respect to the Warrant Shares.

 

(c)           Restricted Securities.  The Holder understands that the Warrant
Shares are characterized as “restricted securities” under the federal securities
laws inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Warrant Shares may be resold without registration under the Act only in
certain limited circumstances.  In this connection, the Holder represents that
it is familiar with Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.  The Holder must bear the economic
risk of this investment indefinitely unless the Warrant Shares are registered
pursuant to the Act, or an exemption from registration is available.  The Holder
understands that the Company has no present intention of registering the Warrant
Shares.  The Holder also understands that there is no assurance that any
exemption from registration under the Act will be available and that, even if
available, such exemption may not allow the Holder to transfer all or any
portion of the Warrant Shares under the circumstances, in the amounts or at the
times the Holder might propose.

 

 

 

 

HOLDER

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

Date:

 

 

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Exhibit C

 

Form of Amended and Restated Stockholders’ Agreement

 

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THIRD AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT

 

THIS THIRD AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, dated this [ · ] day of
April, 2013, is entered into by and among (i) Radius Health, Inc., a Delaware
corporation (the “Corporation”), (ii) those holders of shares of the
Corporation’s Common Stock, par value $.0001 per share (“Common Stock”), listed
on Schedule 1 hereto (hereinafter referred to collectively as the “Common
Stockholders”), (iii) those holders of shares of the Corporation’s Series B
Convertible Preferred Stock, par value $.0001 per share (“Series B Preferred
Stock”), listed on Schedule 2 hereto (hereinafter referred to collectively as
the “Series B Stockholders”), (iv) those holders of shares of the Corporation’s
Series A-1 Convertible Preferred Stock, par value $.0001 per share (“Series A-1
Preferred Stock”), listed on Schedule 3 hereto (hereinafter referred to
collectively as the “Series A-1 Stockholders”), (iv) those holders of shares of
the Corporation’s Series A-2 Convertible Preferred Stock, par value $.0001 per
share (“Series A-2 Preferred Stock”), listed on Schedule 4 hereto (hereinafter
referred to collectively as the “Series A-2 Stockholders”), (v) those holders of
the shares of the Corporation’s Series A-3 Convertible Preferred Stock, par
value $.0001 per share (“Series A-3 Preferred Stock”), listed on Schedule 5
hereto (hereinafter referred to collectively as the “Series A-3 Stockholders”),
(vi) those holders of shares of the Corporation’s Series A-4 Convertible
Preferred Stock, par value $.0001 per share (“Series A-4 Preferred Stock”),
listed on Schedule 6 hereto (hereinafter referred to collectively as the
“Series A-4 Stockholders”), (vii) that certain holder of shares of the
Corporation’s Series A-5 Convertible Preferred Stock, par value $.0001 per share
(“Series A-5 Preferred Stock”), listed on Schedule 7 hereto (hereinafter
referred to as the “Series A-5 Stockholder”) and (viii) any person or entity
that becomes a party hereto pursuant to Section 17 hereof or otherwise (the
“Additional Stockholders”).

 

WITNESSETH:

 

WHEREAS, the Corporation and the Series B Stockholders have entered into a
Series B Convertible Preferred Stock and Warrant Purchase Agreement, dated as of
the date hereof (the “Stock Purchase Agreement”), in connection with which the
Corporation has agreed to sell shares Series B Preferred Stock and warrants to
purchase shares of Common Stock (the “Series B Financing”), and the Corporation
desires to grant to the Series B Stockholders certain registration and other
rights with respect to such shares;

 

WHEREAS, the Corporation and certain of the other parties hereto entered into an
Amended and Restated Stockholders’ Agreement, dated May 17, 2011, as amended by
Amendment No. 1 to Amended and Restated Stockholders’ Agreement, dated
November 7, 2011, Amendment No. 2 to Amended and Restated Stockholders’
Agreement, dated November 7, 2011, and Amendment No. 3 to Amended and Restated
Stockholders’ Agreement, dated December 15, 2011 (as so amended, the “Prior
Agreement”), which Prior Agreement the requisite persons desire to amend and
restate in its entirety as set forth herein;

 

WHEREAS, the Corporation and certain of the parties to the Prior Agreement
entered into a Second Amended and Restated Stockholders’ Agreement, dated as of
February 13, 2012 (as amended, the “Prior Second Agreement”), to be effective
upon the listing of the Effective Date (as defined in the Prior Second
Agreement), which Prior Second Agreement the requisite persons desire to
terminate in its entirety; and

 

WHEREAS, as a condition to Series B Stockholders entering into the Stock
Purchase Agreement, the Common Stockholders, Series A-1 Stockholders, Series A-2
Stockholders, Series A-3 Stockholders, Series A-4 Stockholders, Series A-5
Stockholder and Series A-6 Stockholder (as hereinafter defined) have agreed to
certain restrictions on their rights to dispose of their shares of Common Stock
(as hereinafter

 

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defined) and Preferred Stock (as hereinafter defined) as contained in this
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and undertakings of the Corporation and the Stockholders (as
hereinafter defined) hereunder and under the Stock Purchase Agreement, the
parties hereto do hereby agree as follows:

 

SECTION 1.  Definitions. As used herein, the following terms shall have the
following respective meanings:

 

Board means the Board of Directors of the Corporation.

 

BB Bio means BB Biotech Ventures II, L.P. including any successor thereto or any
assignee of the interest, in whole or in part, of BB Bio under this Agreement

 

BB Bio Group means: (i) BB Bio; (ii) BB BIOTECH AG, (iii) any investment fund
limited partnership now existing or hereafter formed which is affiliated with or
under common control with one or more general partners of any general partner of
any of the foregoing (a “BB Bio Fund”); (iv) any limited partners or affiliates
of BB Bio or any other BB Bio Fund; and (v) any successors or assigns of any of
the foregoing.

 

Brookside means Brookside Capital Partners Fund L.P., a Delaware limited
partnership, including any successor thereto or any assignee of the interest, in
whole or in part, of Brookside Capital Partners Fund L.P. under this Agreement.

 

Brookside Group means: (i) Brookside; (ii) any investment fund limited
partnership now existing or hereafter formed which is affiliated with or under
common control with one or more general partners of any general partner of
Brookside (a “Brookside Fund”); (iii) any limited partners or affiliates of
Brookside or any other Brookside Fund; and (iv) any successors or assigns of any
of the foregoing.

 

Certificate means the certificate of incorporation of the Corporation, as
amended and/or restated from time to time, including the Series A-1 Certificate
and the Series B Certificate.

 

Commission means the U.S. Securities and Exchange Commission.

 

Common Stock shall have the meaning set forth in the first paragraph of this
Agreement.

 

Convertible Securities means any evidences of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Common
Stock, but excluding Options.

 

Demand Notice shall have the meaning set forth in Section 3.4(a) hereof.

 

Effective Date means the date on which the automatic conversion of all of the
Preferred Stock occurs upon the listing of the Common Stock on a national
securities exchange.

 

Equity Percentage means, as to any Series B Stockholder or Other Preferred
Stockholder, as applicable, that percentage figure which expresses the ratio
that (a) the number of shares of issued and outstanding Common Stock then owned
by such Series B Stockholder or Other Preferred Stockholder bears to (b) the
aggregate number of shares of issued and outstanding Common Stock then owned by
all Series B Stockholders and Other Preferred Stockholders. For purposes solely
of the computation set forth in clauses (a) and (b) above and the right of
oversubscription (as set forth in Section 2.3(d)), all issued and outstanding
securities held by the Series B Stockholders and Other Preferred Stockholders
that are

 

2

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convertible into or exercisable or exchangeable for shares of Common Stock
(including any issued and issuable shares of Preferred Stock) or for any such
convertible, exercisable or exchangeable securities, shall be treated as having
been so converted, exercised or exchanged at the rate or price at which such
securities are convertible, exercisable or exchangeable for shares of Common
Stock in effect at the time in question (which, for purposes of Section 2.3 of
this Agreement, shall be at the time of delivery by the Corporation of the
notice of the Offer contemplated by Section 2.3(b)), whether or not such
securities are at such time immediately convertible, exercisable or
exchangeable.

 

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

 

Exchange Act Registration Statement shall have the meaning set forth in
Section 2.5 hereof.

 

Excess Securities shall have the meaning set forth in Section 2.3(d) hereof.

 

Excess Securities Notice shall have the meaning set forth in
Section 2.3(d) hereof.

 

Excess Securities Period shall have the meaning set forth in
Section 2.3(d) hereof.

 

Excluded Securities means:

 

(i)                                     Common Stock issued upon conversion of
any Preferred Shares, including any shares of Common Stock issuable upon
conversion of any dividends accrued on such Preferred Shares;

 

(ii)                                  Common Stock issued or issuable to
officers, directors or employees of, or consultants, advisors or independent
contractors to, the Corporation, pursuant to any written agreement, plan or
arrangement to purchase, or rights to subscribe for, such Common Stock approved
by the Board, including each of the Investor Directors;

 

(iii)                               Common Stock issued as a stock dividend or
distribution payable in shares of Common Stock, or capital stock of any other
class issuable upon any subdivision, recombination, split-up or reverse stock
split of all the outstanding shares of such class of capital stock;

 

(iv)                              Common Stock or other securities issued or
issuable pursuant to the acquisition by the Corporation of any other
corporation, partnership, joint venture, trust or other entity by any merger,
stock acquisition, reorganization, or purchase of substantially all assets or
otherwise in which the Corporation or its stockholders of record immediately
prior to the effective date of such transaction, directly or indirectly, own a
majority of the voting power of the acquired entity or the resulting entity
after such transaction, in each case so long as such transaction is approved by
the Board;

 

(v)                                 Common Stock or other securities issued or
issuable to banks, lenders, equipment lessors or landlords, provided that each
such issuance is approved by the Board of Directors, including warrants to
acquire Common Stock held by Silicon Valley Bank (or its affiliates, successors
and assignees), warrants to purchase Preferred Stock issued to GE Capital Equity
Investments, Inc. or any of its affiliates (“GECEI”) and Oxford Finance
Corporation or any of its affiliates (“OFC”) pursuant to a debt financing
approved by the Board of Directors (the “GE Financing”), shares of Preferred
Stock issued or issuable to GECEI in connection with the GE Financing or upon
exercise by GECEI or OFC of warrants issued in the GE Financing and shares of
common stock issuable upon conversion of any such shares of Preferred Stock
issued to GECEI or OFC pursuant to the GE Financing;

 

3

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(vi)                              Common Stock or other securities issued or
issuable to suppliers or third party service providers in connection with the
provision of goods or services or to other third parties in connection with
sponsored research agreements, collaboration agreements, development agreements,
strategic partnerships or alliances, corporate partnerships, joint ventures or
other licensing transactions, provided that each such transaction and related
issuance is approved by the Board of Directors, including (A) any shares of
Preferred Stock or Common Stock issued or issuable to Ipsen Pharma SAS
(“Ipsen”), pursuant to the terms of that certain License Agreement, as amended
and may be amended with the approval of the Board of Directors of the
Corporation and in effect from time to time, by and between the Corporation and
Ipsen as payment for milestones in lieu of cash payments and (B) shares of
Series A-5 Preferred Stock issued pursuant to the Stock Issuance Agreement (as
defined in Section 3(d) of the Series A-1 Certificate) and the issuance of
Series A-6 Preferred Stock issued or to be issued as dividends on such
Series A-5 Preferred Stock, and shares of Common Stock issuable upon conversion
of any such shares of Series A-5 Preferred Stock and Series A-6 Preferred Stock;

 

(vii)                           Common Stock or other securities, the issuance
of which is approved by the Majority Investors, with such approval expressly
waiving the application of the right of first refusal provisions of Section 2.3
of this Agreement as a result of such issuance;

 

(viii)                        Preferred Stock or Common Stock issued or issuable
pursuant to any warrant outstanding as of the date hereof or any warrant and any
shares of Preferred Stock or Common Stock, or Common Stock issued upon exercise
of any Preferred Stock, issued in connection with the Series B Financing or any
equity financing of the Corporation that has occurred at any time prior to the
date hereof, including a warrant for shares of Series A-1 Preferred Stock issued
or issuable to Leerink Swann and any warrants issued pursuant to the terms of
the Stock Purchase Agreement, any shares of Preferred Stock or Common Stock upon
exercise thereof and any Common Stock issuable upon conversion of such Preferred
Stock issued upon exercise thereof;

 

(ix)                              Common Stock or Convertible Securities
actually issued upon the exercise of Options or shares of Common Stock actually
issued upon the conversion or exchange of Convertible Securities, in each case
provided such issuance is pursuant to the terms of such Option or Convertible
Security; and

 

(x)                                 All shares of Series B Preferred Stock and
other securities issued pursuant to the Stock Purchase Agreement, and all shares
of Common Stock issued or issuable upon conversion of any such shares of
Series B Preferred Stock or exercise or conversion of any such other securities.

 

Expiration Date means the earlier of (i) the third anniversary of the date on
which the Common Stock is first listed for trading on a national securities
exchange and (ii) April 23, 2018 .

 

Extra Purchaser shall have the meaning set forth in Section 4.3(b) hereof.

 

F2 Biosciences means F2 Biosciences III, L.P., a Cayman Islands limited
partnership.

 

FINRA means the Financial Industry Regulatory Authority.

 

G3 Investor means each of HCV II, Saints Capital IV, L.P. and Wellcome.

 

GE Financing shall have the meaning set forth in the definition of “Excluded
Securities” above.

 

4

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GEHFS shall have the meaning set forth in the definition of “Excluded
Securities” above.

 

Group means: (i) as to any Stockholder that is a corporation or other entity,
any and all of the venture capital limited partnerships or corporations now
existing or hereafter formed that are affiliated with or under common control
with one or more of the controlling stockholders of such Stockholder and any
predecessor or successor thereto; (ii) in the case of any member of the HCV
Group, any other member of the HCV Group; (iii) in the case of any member of the
MPM Group, any other member of the MPM Group; (iv) in the case of any member of
the Brookside Group, any other member of the Brookside Group; (v) in the case of
any member of the Oxford/Saints Group, any other member of the Oxford/Saints
Group; (vi) in the case of any member of the BB Bio, any other member of the BB
Bio Group and (vi) in the case of Wellcome, any successor trustee of the
Wellcome Trust or additional trustee or trustees of the Wellcome Trust from time
to time, or any company whose shares are all held directly or indirectly by the
Wellcome Trust, or any nominee or custodian of any such person.

 

HCV Group means: (i) HCV VII; (ii) any venture capital limited partnership now
existing or hereafter formed which is affiliated with or under common control
with one or more general partners of any general partner of HCV VII (an “HCV
Fund”); (iii) any limited partners or affiliates of HCV VII or any other HCV
Fund; and (iv) any successors or assigns of any of the foregoing.

 

HCV VII means HealthCare Ventures VII, L.P. a Delaware limited partnership,
including any successor thereto or any assignee of the interest, in whole or in
part, of HCV VII under this Agreement.

 

Holder or Holders means the holder or holders, as the case may be, from time to
time of Registrable Securities.

 

Immediate Family Member means a child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, of a natural person referred to herein.

 

Independent Directors shall have the meaning set forth in Section 4.2(b) hereof.

 

Industry Expert Director shall have the meaning set forth in
Section 4.2(b) hereof.

 

Investor Directors shall have the meaning set forth in Section 4.2(b) hereof.

 

Initiating Holders means, collectively, Holders who properly initiate a
registration request under this Agreement.

 

Investors means each of the persons listed on Schedule 2 and Schedule 3 hereto,
severally, but not jointly and severally.

 

Ipsen shall have the meaning set forth in the definition of “Excluded
Securities” above.

 

Majority Investors means (i) the holders of not less than 70% of the outstanding
shares of Series B Preferred Stock and (ii) the Senior Majority (as defined in
the Series A-1 Certificate), collectively.

 

Majority G3 Investors means the G3 Investor(s) holding a majority of the shares
of capital stock of the Corporation (on an as-converted basis) held by all G3
Investors, including, with respect to each G3 Investor, all shares of capital
stock of the Corporation (on an as-converted basis) held

 

5

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by members of such G3 Investor’s Group.

 

MPM means MPM Capital L.P.

 

MPM Group means (i) MPM BioVentures III, L.P., (ii) MPM BioVentures III QP.
L.P., (iii) MPM BioVentures III GmbH & Co. Beteiligungs KG, (iv) MPM BioVentures
III Parallel Fund, L.P., (v) MPM Asset Management Investors 2003 VIII LLC,
(vi) MPM Bio IV NVS Strategic Fund, L.P., (vii) any other venture capital
limited partnership now existing or hereafter formed which is affiliated with or
under common control with the foregoing or one or more general partners of the
foregoing, and (viii) any successors or assigns of the foregoing.

 

Notice of Acceptance shall have the meaning set forth in Section 2.3(c) hereof.

 

OFC shall have the meaning set forth in the definition of “Excluded Securities”
above.

 

Offer shall have the meaning set forth in Section 2.3(b) hereof.

 

Offered Securities means, except for Excluded Securities, (i) any shares of
Common Stock, Preferred Stock or any other equity security of the Corporation,
(ii) any debt security, (iii) any capitalized lease with any equity feature with
respect to the Corporation, or (iv) any option, warrant or other right to
subscribe for, purchase or otherwise acquire any such equity security, debt
security or capitalized lease.

 

Option means rights, options or warrants to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities.

 

Other Preferred Stockholder means any holder of shares of Series A-1 Preferred
Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4
Preferred Stock, Series A-5 Preferred Stock or Series A-6 Preferred Stock.

 

Other Shares shall have the meaning set forth in Section 3.6(b) hereof.

 

Oxford means OBP IV — Holdings LLC.

 

Oxford/Saints Group means (i) Oxford Bioscience Partners IV L.P., (ii) mRNA Fund
II L.P., (iii) OBP IV — Holdings LLC, (iv) mRNA II — Holdings LLC, (v) Saints
Capital VI, L.P., (vi) any other venture capital limited partnership now
existing or hereafter formed which is affiliated with or under common control
with the foregoing or one or more general partners of the foregoing, and
(vii) any successors or assigns of the foregoing.

 

Person (whether or not capitalized) means an individual, corporation,
partnership, limited partnership, limited liability company, syndicate, trust,
association or other entity.

 

Preferred Shares means shares of Series B Preferred Stock, Series A-1 Preferred
Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4
Preferred Stock and Series A-5 Preferred Stock and shares of the Corporation’s
Series A-6 Convertible Preferred Stock, par value $.0001 per share (the
“Series A-6 Preferred Stock”, with any holder of shares of Series A-6 Preferred
Stock being referred to herein as a “Series A-6 Stockholder”).

 

Preferred Stock means the Preferred Stock, par value $.0001 per share, of the
Corporation.

 

6

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Preferred Stockholders means, collectively, the holders of shares of Preferred
Stock of the Corporation.

 

Prior Agreement shall have the meaning set forth in the third paragraph of this
Agreement.

 

Prior Second Agreement shall have the meaning set forth in the fourth paragraph
of this Agreement.

 

Qualified Public Offering means any public offering of shares of the
Corporation’s capital stock in connection with which the Common Stock becomes
listed for trading on a national securities exchange.

 

Refused Securities shall have the meaning set forth in Section 2.3(f) hereof.

 

Registrable Securities means (i) the Common Stock issued or issuable upon the
conversion of the Preferred Stock, (ii) the Common Stock issued or issuable upon
exercise of the Warrants (as defined in the Stock Purchase Agreement), (iii) any
Common Stock, or any Common Stock issued or issuable (directly or indirectly)
upon conversion and/or exercise of any other securities of the Corporation,
acquired by the Investors or any member of an Investor’s Group after the date
hereof, (iv) any Common Stock issued as (or issuable upon conversion or exercise
of any warrant, right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
shares referenced in clause (i) above; excluding in all cases, however, any
Registrable Securities sold by a Person in a transaction in which the applicable
rights under this Agreement are not assigned pursuant to Section 7, and
excluding any shares for which registration rights have terminated pursuant to
Section 3.13.

 

Registrable Senior Securities means the Registrable Securities issued or
issuable upon conversion of, or in respect of, the Senior Preferred Stock.

 

Restricted Stock means all shares of capital stock of the Corporation, including
(i) all shares of Common Stock, (ii) all shares of Preferred Stock, (iii) all
shares of capital stock of the Corporation into which such shares may be
converted or for which they may be exchanged or exercised and (iv) all other
shares of capital stock issued or issuable by way of stock splits, stock
dividends, stock combinations, recapitalizations or like occurrences on such
shares.

 

Rule 145 means Rule 145 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.

 

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

 

Selling Expenses means all underwriting discounts, selling commissions, and
stock transfer taxes applicable to the sale of Registrable Securities, and fees
and disbursements of counsel for any Holder.

 

Senior Majority Matter shall have the meaning set forth in Section 4.1 hereof.

 

Senior Preferred Stock means shares of Series B Preferred Stock, Series A-1
Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock.

 

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Series A-1 Certificate means the Certificate of Designations of the Series A-1
Convertible Preferred Stock, Series A-2 Convertible Preferred Stock, Series A-3
Convertible Preferred Stock, Series A-4 Convertible Preferred Stock, Series A-5
Convertible Preferred Stock and Series A-6 Convertible Preferred Stock of the
Corporation filed by the Corporation with the Secretary of State of the State of
Delaware on May 17, 2011, as amended from time to time.

 

Series A-1 Directors shall have the meaning set forth in Section 4.2(b) hereof.

 

Series A-1 Preferred Stock shall have the meaning set forth in the first
paragraph of this Agreement.

 

Series A-1 Stock Purchase Agreement means that certain Series A-1 Stock Purchase
Agreement, dated as of May 17, 2011, by and among the Corporation and the
Investors referenced therein.

 

Series A-2 Preferred Stock shall have the meaning set forth in the first
paragraph of this Agreement.

 

Series A-3 Preferred Stock shall have the meaning set forth in the first
paragraph of this Agreement.

 

Series A-4 Preferred Stock shall have the meaning set forth in the first
paragraph of this Agreement.

 

Series A-5 Preferred Stock shall have the meaning set forth in the first
paragraph of this Agreement.

 

Series A-6 Preferred Stock shall have the meaning set forth in the definition of
“Preferred Shares” above.

 

Series A-1 Stockholders shall have the meaning set forth in the first paragraph
of this Agreement.

 

Series A-2 Stockholders shall have the meaning set forth in the first paragraph
of this Agreement.

 

Series A-3 Stockholders shall have the meaning set forth in the first paragraph
of this Agreement.

 

Series A-4 Stockholder shall have the meaning set forth in the first paragraph
of this Agreement.

 

Series A-5 Stockholder shall have the meaning set forth in the first paragraph
of this Agreement.

 

Series A-6 Stockholder shall have the meaning set forth in the definition of
“Preferred Shares” above.

 

Series B Certificate means the Certificate of Designations of the Series B
Convertible Preferred Stock filed by the Corporation with the Secretary of State
of the State of Delaware on the date hereof, as amended from time to time.

 

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Series B Financing shall have the meaning set forth in the second paragraph of
this Agreement.

 

Series B Preferred Stock shall have the meaning set forth in the first paragraph
of this Agreement.

 

Series B Stockholders shall have the meaning set forth in the first paragraph of
this Agreement.

 

Stock Purchase Agreement shall have the meaning set forth in the second
paragraph of this Agreement.

 

Stockholders means all holders of capital stock of the Corporation.

 

Trading Day means the meaning set forth in Section 3.4(a) hereof.

 

30-Day Period shall have the meaning set forth in Section 2.3(b) hereof.

 

Transfer shall include any disposition of any Restricted Stock or of any
interest therein which would constitute a sale thereof within the meaning of the
Securities Act.

 

Wellcome means The Wellcome Trust Limited, as trustee of the Wellcome Trust.

 

SECTION 2.  Certain Covenants of the Corporation.

 

2.1                               Meetings of the Board of Directors.  The
Corporation shall call, and use its best efforts to have, regular meetings of
the Board not less often than quarterly. The Corporation shall promptly pay all
reasonable and appropriately documented travel expenses and other out-of-pocket
expenses incurred by directors who are not employed by the Corporation in
connection with attendance at meetings to transact the business of the
Corporation or attendance at meetings of the Board or any committee thereof.

 

2.2                               Reservation of Shares of Common Stock and
Preferred Stock, Etc.  The Corporation shall at all times have authorized and
reserved out of its authorized but unissued shares of Common Stock a sufficient
number of shares of Common Stock to provide for the conversion of the Preferred
Shares. Neither the issuance of the Preferred Shares nor the shares of Common
Stock issuable upon the conversion of the Preferred Shares shall be subject to a
preemptive right of any other Stockholder.

 

2.3                               Right of First Refusal.

 

(a)                                 The Corporation shall not issue, sell or
exchange, agree to issue, sell or exchange, or reserve or set aside for
issuance, sale or exchange, any Offered Securities, unless in each case the
Corporation shall have first offered to sell to the Series B Stockholders, the
Series A-1 Stockholders, the Series A-2 Stockholders and the Series A-3
Stockholders (collectively, the “ROFR Stockholders”) all of such Offered
Securities on the terms set forth herein. Each ROFR Stockholder shall be
entitled to purchase up to its Equity Percentage of the Offered Securities. Each
ROFR Stockholder may delegate its rights and obligations with respect to such
Offer to one or more members of its Group, which members shall thereafter be
deemed to be “ROFR Stockholders” for the purpose of applying this Section 2.3 to
such Offer.

 

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(b)                                 The Corporation shall deliver to each ROFR
Stockholder written notice of the offer to sell the Offered Securities,
specifying the price and terms and conditions of the offer (the “Offer”). The
Offer by its terms shall remain open and irrevocable for a period of 30 days
from the date of its delivery to such ROFR Stockholders (the “30-Day Period”),
subject to extension to include the Excess Securities Period (as such term is
hereinafter defined).

 

(c)                                  Each ROFR Stockholder shall evidence its
intention to accept the Offer by delivering a written notice signed by such ROFR
Stockholder, as applicable, setting forth the number of shares that such ROFR
Stockholder elects to purchase (the “Notice of Acceptance”). The Notice of
Acceptance must be delivered to the Corporation prior to the end of the 30-Day
Period. The failure by a ROFR Stockholder to exercise its rights hereunder shall
not constitute a waiver of any other rights or of the right to receive notice of
and participate in any subsequent Offer.

 

(d)                                 If any ROFR Stockholder fails to exercise
its right hereunder to purchase its Equity Percentage of the Offered Securities,
the Corporation shall so notify the other ROFR Stockholders in a written notice
(the “Excess Securities Notice”). The Excess Securities Notice shall be given by
the Corporation promptly after it learns of the intention of any ROFR
Stockholder not to purchase all of its Equity Percentage of the Offered
Securities, but in no event later than ten (10) business days after the
expiration of the 30-Day Period. The ROFR who or which have agreed to purchase
their Equity Percentage of the Offered Securities shall have the right to
purchase the portion not purchased by such ROFR Stockholders (the “Excess
Securities”), on a pro rata basis, by giving notice within ten (10) business
days after receipt of the Excess Securities Notice from the Corporation. The
twenty (20) business day period during which (i) the Corporation must give the
Excess Securities Notice to the applicable ROFR Stockholders, and (ii) each of
them must then give the Corporation notice of their intention to purchase all or
any portion of their pro rata share of the its Excess Securities, is hereinafter
referred to as the “Excess Securities Period.”

 

(e)                                  If the ROFR Stockholders tender their
Notice of Acceptance prior to the end of the 30-Day Period, indicating their
intention to purchase all of the Offered Securities, or, if prior to the
termination of the Excess Securities Period the ROFR Stockholders tender Excess
Securities Notices to purchase all of the Excess Securities, the Corporation
shall schedule a closing of the sale of all such Offered Securities. Upon the
closing of the sale of the Offered Securities to be purchased by the ROFR
Stockholders and the Excess Securities to be purchased by ROFR Stockholders,
each ROFR Stockholder shall (i) purchase from the Corporation that portion of
the Offered Securities and Excess Securities, as applicable, for which it
tendered a Notice of Acceptance and an Excess Securities Notice, as applicable,
upon the terms specified in the Offer, and (ii) execute and deliver an agreement
further restricting transfer of such Offered Securities substantially as set
forth in Section 3.1, 3.2 and 3.3 of this Agreement. In addition, with respect
to the Offered Securities and Excess Securities being purchased by the ROFR
Stockholders, the Corporation shall provide each such ROFR Stockholder with the
rights and benefits set forth in this Agreement. The obligation of the ROFR
Stockholders to purchase such Offered Securities and Excess Securities, as
applicable, is further conditioned upon the preparation of a purchase agreement
embodying the terms of the Offer, which shall be reasonably satisfactory in form
and substance to such ROFR Stockholder and each of their respective counsels.

 

(f)                                   The Corporation shall have ninety (90)
days from the expiration of the 30-Day Period, or the Excess Securities Period,
if applicable, to sell the Offered Securities (including the Excess Securities)
refused by the ROFR Stockholders (the “Refused Securities”) to any other person
or persons, but only upon terms and conditions which are in all material
respects (including price and interest rate) no more favorable to such other
person or persons, and no less favorable to the Corporation, than those set
forth in the Offer. Upon and subject to the closing of the sale of all of the
Refused Securities (which shall include full payment to the Corporation), each
ROFR Stockholder shall (i)

 

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purchase from the Corporation those Offered Securities and Excess Securities, as
applicable, for which it tendered a Notice of Acceptance and an Excess
Securities Notice, if applicable, upon the terms specified in the Offer, and
(ii) execute and deliver an agreement restricting transfer of such Offered
Securities and Excess Securities, as applicable, substantially as set forth in
Sections 3.1, 3.2 and 3.3 of this Agreement. In addition, with respect to the
Offered Securities or Excess Securities being purchased by the ROFR
Stockholders, the Corporation shall provide each such ROFR Stockholder with the
rights and benefits set forth in this Agreement. The Corporation agrees, as a
condition precedent to accepting payment for and making delivery of any Refused
Securities to any executive officer, employee, consultant or independent
contractor of or to the Corporation, or to any other person, to have each and
every such person execute and deliver this Agreement, as may be modified or
amended from time to time pursuant to Section 11 hereof, to the extent such
purchaser has not already executed this Agreement. The obligation of the ROFR
Stockholders to purchase such Offered Securities and Excess Securities, as
applicable, is further conditioned upon the preparation of a purchase agreement
embodying the terms of the Offer, which shall be reasonably satisfactory in form
and substance to such ROFR Stockholder and each of their respective counsels.

 

(g)                                  In each case, any Offered Securities not
purchased either by the ROFR Stockholders or by any other person in accordance
with this Section 2.3 may not be sold or otherwise disposed of until they are
again offered to the ROFR Stockholders under the procedures specified in
Paragraphs (a), (b), (c), (d), (e) and (f) hereof.

 

(h)                                 Each ROFR Stockholder may, by prior written
consent, waive its rights under this Section 2.3. Such a waiver shall be deemed
a limited waiver and shall only apply to the extent specifically set forth in
the written consent of such ROFRR Stockholder.

 

(i)                                     This Section 2.3 and the rights and
obligations of the parties hereunder shall automatically terminate on the
consummation of a Qualified Public Offering.

 

2.4                               Filing of Reports Under the Exchange Act.  For
so long as the Common Stock is registered under the Exchange Act, the
Corporation shall comply with all reporting requirements of the Exchange Act and
shall comply with all other public information reporting requirements of the
Commission as a condition to the availability of an exemption from the
Securities Act for the sale of any of the Registrable Securities (including any
such exemption pursuant to Rule 144 thereof, as amended from time to time, or
any successor rule thereto or otherwise). The Corporation shall cooperate with
each Holder in supplying such information as may be necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act (under Rule 144 thereof or otherwise) for the sale of
any Registrable Securities.

 

2.5                               Directors’ & Officers’ Insurance.  The
Corporation shall continue to maintain a directors’ and officers’ liability
insurance policy covering all directors, observers and executive officers of the
Corporation.

 

2.6                               Properties and Business Insurance.  The
Corporation shall continue to maintain from responsible and reputable insurance
companies or associations valid policies of insurance against such casualties,
contingencies and other risks and hazards and of such types and in such amounts
as is customary for similarly situated businesses.

 

2.7                               Preservation of Corporate Existence.  The
Corporation shall preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified as a foreign corporation in each jurisdiction in which
(i) such

 

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qualification is necessary or desirable in view of its business and operations
or the ownership or lease of its properties or (ii) the failure to so qualify
would have a material adverse effect on the business, properties, assets or
condition (financial or otherwise) of the Corporation.

 

2.8                               Compliance with Laws.  The Corporation shall
comply with all applicable laws, rules, regulations, requirements and orders of
the United States or any applicable foreign jurisdiction in the conduct of its
business including all labor, employment, wage and hour, health and safety,
environmental, health insurance, health information security, privacy, data
protection and data transfer laws, and shall adopt and monitor policies and
procedures designed to comply with all such applicable laws, rules, regulations
and orders, except where noncompliance would not have a material adverse effect
on the business, properties, assets or condition (financial or otherwise) of the
Corporation.

 

2.9                               Payment of Taxes.  The Corporation will pay
and discharge all lawful Taxes (as defined below) before such Taxes shall become
in default and all lawful claims for labor, materials and supplies which, if not
paid when due, might become a lien or charge upon its property or any part
thereof; provided, however, that the Corporation shall not be required to pay
and discharge any such Tax, assessment, charge, levy or claim so long as the
validity thereof is being contested by or for the Corporation in good faith by
appropriate proceedings and an adequate reserve therefore has been established
on its books. The term “Tax” (and, with correlative meaning, “Taxes”) means all
United States federal, state and local, and all foreign, income, profits,
franchise, gross receipts, payroll, transfer, sales, employment, use, property,
excise, value added, ad valorem, estimated, stamp, alternative or add-on
minimum, recapture, environmental, withholding and any other taxes, charges,
duties, impositions or assessments, together with all interest, penalties, and
additions imposed on or with respect to such amounts, or levied, assessed or
imposed against the Corporation.

 

2.10                        Management Compensation.  The Board (upon the
recommendation of the Compensation Committee or otherwise) shall determine the
compensation to be paid by the Corporation to its management. Any grants of
capital stock or options to employees, officers, directors or consultants of the
Corporation and its Subsidiaries shall be made pursuant to a plan, agreement or
arrangement approved by the Board.

 

2.11                        No Further Pay-to-Play Provisions.  The Corporation
hereby covenants and agrees that at no time after the date of this Agreement,
without the prior written consent of each of F2 Biosciences, Wellcome, one
member of the HCV Group, one member of the MPM Group, one member of the
Brookside Group, one member of the BB Bio Group, and one member of the
Oxford/Saints Group, shall it enter into any agreement or amend the Certificate
to implement terms that would automatically convert Preferred Shares into shares
of Common Stock, or impose any other penalty on the holder of Preferred Shares,
solely because the holders of such Preferred Shares fail to participate at any
level in a transaction pursuant to which the Corporation raises funds through
the issuance of debt or equity securities.

 

2.12                        Confidentiality, Assignment of Inventions and
Non-Competition Agreements for Key Employees.  The Corporation shall cause each
person who becomes an employee of or a consultant to the Corporation subsequent
to the date hereof, and who shall have or be proposed to have access to
confidential or proprietary information of the Corporation, to execute a
confidentiality, assignment of inventions, and non-competition agreement in form
and substance approved by the Board prior to the commencement of such person’s
employment by the Corporation in such capacity.

 

2.13                        Duration of Section.  Sections 2.5 through 2.12 and
the rights and obligations of the parties hereunder shall automatically
terminate on the earlier of (i) the consummation of an Event of Sale (as defined
in the Certificate) or (ii) the automatic conversion of all of the Preferred
Stock of the

 

12

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Corporation pursuant to the terms and conditions of the Certificate upon the
listing, or the admitting for trading, of the Common Stock on a national
securities exchange.

 

SECTION 3.  Transfer of Securities.

 

3.1                               Restriction on Transfer.  The Restricted Stock
shall not be transferable, except upon the conditions specified in this
Section 3, which conditions are intended solely to ensure compliance with the
provisions of the Securities Act in respect of the Transfer thereof.  In
addition, no Restricted Stock shall be transferred unless, as conditions
precedent to such transfer, the transferee thereof agrees in writing to be bound
by the obligations of the transferring Stockholder hereunder.

 

3.2                               Restrictive Legend.  Each certificate
evidencing any Restricted Stock and each certificate evidencing any such
securities issued to subsequent transferees of any Restricted Stock shall
(unless otherwise permitted by the provisions of Section 3.3 or 3.10 hereof) be
stamped or otherwise imprinted with a legend in substantially the following
form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAW. THE SECURITIES MAY NOT BE
PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR LAW.

 

3.3                               Notice of Transfer.  By acceptance of any
Restricted Stock, the holder thereof agrees to give prior written notice to the
Corporation of such holder’s intention to effect any Transfer and to comply in
all other respects with the provisions of this Section 3.3. Each such notice
shall describe the manner and circumstances of the proposed Transfer and shall
be accompanied by: (a) the written opinion of counsel for the holder of such
Restricted Stock or, at such holder’s option, a representation letter of such
holder, addressed to the Corporation (which opinion and counsel, or
representation letter, as the case may be, shall be reasonably acceptable to the
Corporation), as to whether, in the case of a written opinion, in the opinion of
such counsel such proposed Transfer involves a transaction requiring
registration of such Restricted Stock under the Securities Act and applicable
state securities laws or an exemption thereunder is available, or, in the case
of a representation letter, such letter sets forth a factual basis for
concluding that such proposed transfer involves a transaction requiring
registration of such Restricted Stock under the Securities Act and applicable
state securities laws or that an exemption thereunder is available, or (b) if
such registration is required and if the provisions of Section 3.4 hereof are
applicable, a written request addressed to the Corporation by the holder of such
Restricted Stock describing in detail the proposed method of disposition and
requesting the Corporation to effect the registration of such Registrable
Securities pursuant to the terms and provisions of Section 3.4 hereof; provided,
however, that (y) in the case of a Transfer by a holder to a member of such
holder’s Group, no such opinion of counsel or representation letter of the
holder shall be necessary, provided that the transferee agrees in writing to be
subject to Sections 3.1, 3.2, 3.3, 3.10 hereof to the same extent as if such
transferee were originally a signatory to this Agreement, and (z) in the case of
any holder of Restricted Stock that is a partnership, no such opinion of counsel
or representation letter of the holder shall be necessary for a Transfer by such
holder to a partner of such holder, or a retired partner of such holder who
retires after the date hereof, or the estate of any such partner or retired
partner if, with respect to such Transfer by a partnership, (i) such Transfer is
made in accordance with the partnership agreement of such partnership, and
(ii) the transferee agrees in writing to be subject to the terms of Sections
3.1, 3.2, 3.3, 3.10 hereof to the same extent as if such transferee were
originally a signatory to

 

13

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this Agreement. If in an opinion of counsel or as reasonably concluded from the
facts set forth in the representation letter of the holder (which opinion and
counsel or representation letter, as the case may be, shall be reasonably
acceptable to the Corporation), the proposed Transfer may be effected without
registration under the Securities Act and any applicable state securities laws
or “blue sky” laws, then the holder of Restricted Stock shall thereupon be
entitled to effect such Transfer in accordance with the terms of the notice
delivered by it to the Corporation. Each certificate or other instrument
evidencing the securities issued upon such Transfer (and each certificate or
other instrument evidencing any such securities not Transferred) shall bear the
legend set forth in Section 3.2 hereof unless: (a) in such opinion of such
counsel or as can be concluded from the representation letter of such holder
(which opinion and counsel or representation letter shall be reasonably
acceptable to the Corporation) the registration of future Transfers is not
required by the applicable provisions of the Securities Act and state securities
laws, or (b) the Corporation shall have waived the requirement of such legend;
provided, however, that such legend shall not be required on any certificate or
other instrument evidencing the securities issued upon such Transfer in the
event such transfer shall be made in compliance with the requirements of
Rule 144 (as amended from time to time or any similar or successor rule)
promulgated under the Securities Act. The holder of Restricted Stock shall not
effect any Transfer until such opinion of counsel or representation letter of
such holder has been given to and accepted by the Corporation (unless waived by
the Corporation) or, if applicable, until registration of the Registrable
Securities involved in the above-mentioned request has become effective under
the Securities Act. In the event that an opinion of counsel is required by the
registrar or transfer agent of the Corporation to effect a transfer of
Restricted Stock in the future, the Corporation shall seek and obtain such
opinion from its counsel, and the holder of such Restricted Stock shall provide
such reasonable assistance as is requested by the Corporation (other than the
furnishing of an opinion of counsel) to satisfy the requirements of the
registrar or transfer agent to effectuate such transfer.  Notwithstanding
anything to the contrary herein, the provisions of this Section 3.3 and of
Sections 3.1 and 3.2 shall not apply, and shall be deemed of no force or effect,
with respect to shares of capital stock of the Corporation that are subject to a
re-sale registration statement under the Securities Act, provided that such
registration statement has been declared, and continues to remain, effective by
the Commission.

 

3.4                               Registration Rights.

 

(a)                                 Form S-1 Demand.  If (i) at any time after
180 days after the Effective Date, the Corporation receives a request from
Holders of a majority of the Registrable Securities then outstanding that the
Corporation file a Form S-1 registration statement with respect to at least
thirty percent (30%) of the Registrable Securities then outstanding or (ii) the
Corporation receives a request from Holders of a majority of the Registrable
Senior Securities that the Corporation file a Form S-1 registration statement
with respect to the Registrable Senior Securities then outstanding, then the
Corporation shall (1) within 20 days after the date such request is given, give
notice thereof (the “Demand Notice”) to all Holders other than the Initiating
Holders; and (2) as soon as practicable, and in any event within 60 days after
the date such request is given by the Initiating Holders, file a Form S-1
registration statement under the Securities Act covering all Registrable
Securities that the Initiating Holders requested to be registered and any
additional Registrable Securities requested to be included in such registration
by any other Holders, as specified by notice given by each such Holder to the
Corporation within 20 days of the date the Demand Notice is given, and in each
case, subject to the limitations of Sections 3.4(c), 3.4(f) and 3.6.

 

(b)                                 Form S-3 Demand.  If at any time when it is
eligible to use a Form S-3 registration statement, the Corporation receives a
request from Holders of at least ten percent (10%) of the Registrable Securities
then outstanding that the Corporation file a Form S-3 registration statement
with respect to outstanding Registrable Securities of such Holders having an
anticipated aggregate offering price, net of Selling Expenses, of at least $10.0
million, then the Corporation shall (i) within 10 days after

 

14

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the date such request is given, give a Demand Notice to all Holders other than
the Initiating Holders; and (ii) as soon as practicable, and in any event within
45 days after the date such request is given by the Initiating Holders, file a
Form S-3 registration statement under the Securities Act covering all
Registrable Securities requested to be included in such registration by any
other Holders, as specified by notice given by each such Holder to the
Corporation within 20 days of the date the Demand Notice is given, and in each
case, subject to the limitations of Sections 3.4(c), 3.4(f) and 3.6.

 

(c)                                  Notwithstanding the foregoing obligations,
if the Corporation furnishes to Holders requesting a registration pursuant to
this Section 3.4 a certificate signed by the Corporation’s chief executive
officer stating that in the good faith judgment of the Board it would be
materially detrimental to the Corporation and its stockholders for such
registration statement to be filed and it is therefore necessary to defer the
filing of such registration statement, then the Corporation shall have the right
to defer taking action with respect to such filing, and any time periods with
respect to filing or effectiveness thereof shall be tolled correspondingly, for
a period of not more than 90 days after the request of the Initiating Holders is
given; provided, however, that the Corporation may not invoke this right more
than twice in any 12-month period.

 

(d)                                 The Corporation shall not be obligated to
effect, or to take any action to effect, any registration pursuant to
Section 3.4(a) (i) after the Corporation has effected two registrations pursuant
to Section 3.4(a); or (ii) if the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 3.4(b).  The Corporation shall
not be obligated to effect, or to take any action to effect, any registration
pursuant to Section 3.4(b) (i) during the period that is 30 days before the
Corporation’s good faith estimate of the date of filing of, and ending on a date
that is 90 days after the effective date of, a Corporation-initiated
registration, provided, that the Corporation is actively employing in good faith
commercially reasonable efforts to cause such registration statement to become
effective; or (ii) if the Corporation has effected two registrations pursuant to
Section 3.4(b) during the 12-month period immediately preceding the date of such
request.  A registration shall not be counted as “effected” for purposes of this
Section 3.4(d) until such time as the applicable registration statement has been
declared effective by the Commission, unless the Initiating Holders withdraw
their request for such registration, elect not to pay the registration expenses
therefor, and forfeit their right to one demand registration statement pursuant
to Section 3.4(a), in which case such withdrawn registration statement shall be
counted as “effected” for purposes of this Section 3.4(d).

 

(e)                                  Existing Registration Statement.  The
Corporation shall prepare and file with the Commission such amendments and
supplements to the Corporation’s Registration Statement on Form S-1 (Reg.
No. 333-175091) and the prospectus used in connection therewith as may be
requested by the Holders of a majority of the Registrable Senior Securities and
necessary to keep such registration statement effective until the earlier of
(i) the sale of all Registrable Securities covered thereby or (ii) such time as
the Registrable Securities registered on such registration statement are
included in another registration statement covering the sale of such Registrable
Securities, and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all Registrable Securities covered by such
registration statement.

 

(f)                                   The Corporation shall not be required to
include in any registration statement an amount of securities that would exceed
the maximum number of shares that can be included therein in accordance with the
Securities Act and the rules and regulations promulgated thereunder.  In the
event that not all Registrable Securities that Holders desire to include in a
registration statement can be included in any one registration statement, then
the Registrable Securities to be included shall be allocated among Holders on a
pro rata basis based on the total number of Registrable Securities held by all
Holders that have not been included in a registration statement.

 

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3.5                               Piggyback Registration.

 

(a)                                 Each time that the Corporation proposes for
any reason to register any of its securities under the Securities Act, other
than (i) a registration relating to the sale of securities to employees of the
Corporation or a subsidiary pursuant to a stock option, stock purchase or
similar plan; (ii) a registration relating to a Rule 145 transaction; (iii) a
registration on any form that does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities; or (iv) a registration in which
the only Common Stock being registered is Common Stock issuable upon conversion
of debt securities that are also being registered, the Corporation shall
promptly give written notice of such proposed registration to all Holders, which
notice shall also constitute an offer to such Holders to request inclusion of
any Registrable Securities in the proposed registration.

 

(b)                                 Each Holder shall have 30 days from the
receipt of such notice to deliver to the Corporation a written request
specifying the number of Registrable Securities such Holder intends to sell and
the Holder’s intended method of disposition.

 

(c)                                  In the event that the proposed registration
by the Corporation is, in whole or in part, an underwritten public offering of
securities of the Corporation, any request under Section 3.5(b) may specify that
the Registrable Securities be included in the underwriting (i) on the same terms
and conditions as the shares of Common Stock, if any, otherwise being sold
through underwriters under such registration, or (ii) on terms and conditions
comparable to those normally applicable to offerings of common stock in
reasonably similar circumstances in the event that no Common Stock other than
Registrable Securities are being sold through underwriters under such
registration.

 

(d)                                 Upon receipt of a written request pursuant
to Section 3.5(b), the Corporation shall promptly use its best efforts to cause
all such Registrable Securities to be registered under the Securities Act, to
the extent required to permit sale or disposition as set forth in the written
request.

 

3.6                               Underwriting Requirements.

 

(a)                                 If, pursuant to Section 3.4, the Initiating
Holders intend to distribute the Registrable Securities covered by their request
by means of an underwriting, they shall so advise the Corporation as a part of
their request made pursuant to Section 3.4, and the Corporation shall include
such information in the Demand Notice.  The underwriter(s) will be selected by
the Corporation and shall be reasonably acceptable to the Initiating Holders
holding a majority of the shares of the Corporation’s capital stock then held by
all Initiating Holders (calculated on an as-converted basis).  In such event,
the right of any Holder to include such Holder’s Registrable Securities in such
registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein.  All Holders proposing to distribute
their securities through such underwriting shall (together with the Corporation)
enter into an underwriting agreement in customary form with the
underwriter(s) selected for such underwriting.  Notwithstanding any other
provision of this Section 3.6, if the managing underwriters advise the
Initiating Holders in writing that marketing factors require a limitation on the
number of shares to be underwritten, then the Initiating Holders shall so advise
all Holders of Registrable Securities that otherwise would be underwritten
pursuant hereto, and the number of Registrable Securities that may be included
in the underwriting shall be allocated among such Holders of Registrable
Securities, including the Initiating Holders, in proportion (as nearly as
practicable) to the number of Registrable Securities owned by each Holder or in
such other proportion as shall mutually be agreed to by all such selling
Holders; provided, however, that the number of Registrable Securities held by
the Holders to be included in such

 

16

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underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.

 

(b)                                 In connection with any offering involving an
underwriting of shares of the Corporation’s capital stock pursuant to
Section 3.5, the Corporation shall not be required to include any of the
Holders’ Registrable Securities in such underwriting unless the Holders accept
the terms of the underwriting as agreed upon between the Corporation and its
underwriters, and then only in such quantity as the underwriters in their sole
discretion determine will not jeopardize the success of the offering by the
Corporation.  If the managing underwriter(s) of any proposed registration under
Section 3.5 determines and advises in writing that the inclusion of all
Registrable Securities proposed to be included in the underwritten public
offering, together with any other Common Stock proposed to be included therein
by holders other than the Holders (such other shares hereinafter collectively
referred to as the “Other Shares”) would interfere with the successful marketing
of the Corporation’s securities, then the total number of such securities
proposed to be included in such underwritten public offering shall be reduced,
(i) first by the shares requested to be included in such registration by the
holders of Other Shares, (ii) second, if necessary, by all Registrable
Securities which are not Registrable Senior Securities and (iii) third, if
necessary, so that (A) one-half (1/2) of the securities to be included consist
of the securities proposed to be issued by the Corporation, and (B) one-half
(1/2) of the securities to be included consist of the Registrable Senior
Securities proposed to be included in such registration by the holders thereof,
allocated among such Holders on a pro rata basis calculated based upon the
number of Registrable Senior Securities sought to be registered by each such
holder; provided, that the aggregate number of securities proposed to be
included in such registration by the holders of Registrable Senior Securities
shall only be reduced hereunder if and to the extent that such securities exceed
twenty-five percent (25%) of the aggregate number of securities included in such
registration. The shares of Common Stock that are excluded from the underwritten
public offering pursuant to the preceding sentence shall be withheld from the
market by the holders thereof for a period, not to exceed 90 days from the
closing of such underwritten public offering, that the managing underwriter
reasonably determines as necessary in order to effect such underwritten public
offering.  For purposes of the provision in this Section 3.6(b) concerning
apportionment, for any selling Holder that is a partnership, limited liability
company, or corporation, the partners, members, retired partners, retired
members, stockholders, and affiliates of such Holder, or the estates and
Immediate Family Members of any such partners, retired partners, members, and
retired members and any trusts for the benefit of any of the foregoing Persons,
shall be deemed to be a single “selling Holder,” and any pro rata reduction with
respect to such “selling Holder” shall be based upon the aggregate number of
Registrable Securities owned by all Persons included in such “selling Holder,”
as defined in this sentence.

 

(c)                                  For purposes of Section 3.4, a registration
shall not be counted as “effected” if, as a result of an exercise of the
underwriter’s cutback provisions in Section 3.6(a) or (b), fewer than fifty
percent (50%) of the total number of Registrable Senior Securities that Holders
have requested to be included in such registration statement are actually
included.

 

3.7                               Preparation and Filing.  If and whenever the
Corporation is under an obligation pursuant to the provisions of Sections 3.4
and/or 3.5 to use its best efforts to effect the registration of any Registrable
Securities, the Corporation shall, as expeditiously as practicable:

 

(a)                                 prepare and file with the Commission a
registration statement with respect to such securities and use its best efforts
to cause such registration statement to become and remain effective in
accordance with Section 3.7(b) hereof;

 

(b)                                 prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to

 

17

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keep such registration statement effective until the earlier of (i) the sale of
all Registrable Securities covered thereby or (ii) nine months from the date
such registration statement first becomes effective, and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all Registrable Securities covered by such registration statement;

 

(c)                                  furnish to each holder whose Registrable
Securities are being registered pursuant to this Section 3 such number of copies
of any summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such holder may reasonably request in order to facilitate the
public sale or other disposition of such Registrable Securities;

 

(d)                                 use its best efforts to register or qualify
the Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each holder whose
Registrable Securities are being registered shall reasonably request, and do any
and all other acts or things which may be necessary or advisable to enable such
holder to consummate the public sale or other disposition in such jurisdictions
of such Registrable Securities; provided, however, that the Corporation shall
not be required to consent to general service of process for all purposes in any
jurisdiction where it is not then subject to process, qualify to do business as
a foreign corporation where it would not be otherwise required to qualify or
submit to liability for state or local taxes where it is not otherwise liable
for such taxes;

 

(e)                                  at any time when a prospectus covered by
such registration statement and relating thereto is required to be delivered
under the Securities Act within the appropriate period mentioned in
Section 3.7(b) hereof, notify each holder whose Registrable Securities are being
registered of the happening of any event as a result of which the prospectus
included in such registration, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing and, at the request of such holder, prepare,
file and furnish to such holder a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;

 

(f)                                   if the Corporation has delivered
preliminary or final prospectuses to the holders of Registrable Securities that
are being registered and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Corporation shall
promptly notify such holders and, if requested, such holders shall immediately
cease making offers of Registrable Securities and return all prospectuses to the
Corporation. The Corporation shall promptly provide such holders with revised
prospectuses and, following receipt of the revised prospectuses, such holders
shall be free to resume making offers of the Registrable Securities; and

 

(g)                                  furnish, at the request of any holder whose
Registrable Securities are being registered, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement if such securities are being sold
through underwriters, or on the date that the registration statement with
respect to such securities becomes effective if such securities are not being
sold through underwriters, (i) an opinion, dated such date, of the counsel
representing the Corporation for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the holder or holders
making such request, and (ii) a letter dated such date, from the independent
certified public accountants of the Corporation, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering,

 

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addressed to the underwriters, if any, and to the holder or holders making such
request.

 

3.8                               Expenses.  The Corporation shall pay all
expenses incurred by the Corporation in complying with this Section 3, including
all registration and filing fees (including all expenses incident to filing with
the FINRA), fees and expenses of complying with the securities and blue sky laws
of all such jurisdictions in which the Registrable Securities are proposed to be
offered and sold, printing expenses and fees and disbursements of counsel
(including with respect to each registration effected pursuant to Sections 3.4
and 3.5, the reasonable fees and disbursements of a counsel for the holders of
Registrable Securities that are being registered pursuant to this Section 3,
such counsel for the holders of Registrable Securities shall be designated by a
vote of the holders of a majority of the Registrable Securities to be included
in such registration); provided, however, that all underwriting discounts and
selling commissions applicable to the Registrable Securities covered by
registrations effected pursuant to Section 3.4 or 3.5 hereof shall be borne by
the seller or sellers thereof, in proportion to the number of Registrable
Securities sold by each such seller or sellers.

 

3.9                               Indemnification.

 

(a)                                 In the event of any registration of any
Registrable Securities under the Securities Act pursuant to this Section 3 or
registration or qualification of any Registrable Securities pursuant to
Section 3.7(d) hereof, the Corporation shall indemnify and hold harmless the
seller of such shares, each underwriter of such shares, if any, each broker or
any other person acting on behalf of such seller and each other person, if any,
who controls any of the foregoing persons, within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which any of the foregoing persons may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or any document incident to
registration or qualification of any Registrable Securities pursuant to
Section 3.7(d) hereof or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or, with respect to any
prospectus, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or any violation by
the Corporation of the Securities Act or any state securities or blue sky laws
applicable to the Corporation and relating to action or inaction required of the
Corporation in connection with such registration or qualification under the
Securities Act or such state securities or blue sky laws. The Corporation shall
reimburse on demand such seller, underwriter, broker or other person acting on
behalf of such seller and each such controlling person for any legal or any
other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Corporation shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in said registration statement, preliminary or final
prospectus or amendment or supplement thereto or any document incident to
registration or qualification of any Registrable Securities pursuant to
Section 3.7(d) hereof, in reliance upon and in conformity with written
information furnished to the Corporation by such seller, underwriter, broker,
other person or controlling person specifically for use in the preparation
hereof.

 

(b)                                 Before Registrable Securities held by any
prospective seller shall be included in any registration pursuant to this
Section 3, such prospective seller and any underwriter acting on its behalf
shall have agreed to indemnify and hold harmless (in the same manner and to the
same extent as set forth in paragraph (a)) the Corporation, each director of the
Corporation, each officer of the Corporation who signs such registration
statement and any person who controls the Corporation within

 

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the meaning of the Securities Act, with respect to any untrue statement or
omission from such registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, if such
untrue statement or omission was made in reliance upon and in conformity with
written information furnished to the Corporation through an instrument duly
executed by such seller or such underwriter specifically for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus or amendment or supplement; provided, however, that the maximum
amount of liability in respect of such indemnification shall be limited, in the
case of each prospective seller, to an amount equal to the net proceeds actually
received by such prospective seller from the sale of Registrable Securities
effected pursuant to such registration.

 

(c)                                  Promptly after receipt by an indemnified
party of notice of the commencement of any action involving a claim referred to
in Section 3.9(a) or (b) hereof, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 3.9, give written notice to the latter of the commencement of such
action. In case any such action is brought against an indemnified party, the
indemnifying party will be entitled to participate in and to assume the defense
thereof jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and, after notice to such indemnified party from the
indemnifying party of its election to assume the defense thereof, the
indemnifying party shall be responsible for any legal or other expenses
subsequently incurred by such indemnifying party in connection with the defense
thereof; provided, however, that, if any indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to such
indemnified party which are different from or additional to those available to
the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section 3.9, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, and such
indemnifying party shall reimburse such indemnified party and any person
controlling such indemnified party for the fees and expenses of counsel retained
by the indemnified party which are reasonably related to the matters covered by
the indemnity agreement provided in this Section 3.9. The indemnifying party
shall not make any settlement of any claims in respect of which it is obligated
to indemnify an indemnified party or parties hereunder, without the written
consent of the indemnified party or parties, which consent shall not be
unreasonably withheld.

 

(d)                                 In order to provide for just and equitable
contribution to joint liability under the Securities Act, in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 3.9, but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 3.9
provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any such holder or any such
controlling person in circumstances for which indemnification is provided under
this Section 3.9; then, in each such case, the Corporation and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject as is appropriate to reflect the relative fault of the
Corporation and such holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, it being understood
that the parties acknowledge that the overriding equitable consideration to be
given effect in connection with this provision is the ability of one party or
the other to correct the statement or omission which resulted in such losses,
claims, damages or liabilities, and that it would not be just and equitable if
contribution pursuant hereto were to be determined by pro rata allocation or by
any other method of allocation which does not take into consideration the
foregoing equitable considerations. Notwithstanding the foregoing, (i) no such
holder will be required to contribute any amount in excess of the proceeds to it
of all Registrable Securities sold by it pursuant to such registration
statement, and (ii) no person or entity guilty of

 

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fraudulent misrepresentation, within the meaning of Section 11(f) of the
Securities Act, shall be entitled to contribution from any person or entity who
is not guilty of such fraudulent misrepresentation.

 

(e)                                  Notwithstanding any of the foregoing, if,
in connection with an underwritten public offering of any Registrable
Securities, the Corporation, the holders of such Registrable Securities and the
underwriters enter into an underwriting or purchase agreement relating to such
offering which contains provisions covering indemnification among the parties,
then the indemnification provision of this Section 3.9 shall be deemed
inoperative for purposes of such offering.

 

3.10                                Removal of Legends, Etc.  Notwithstanding
the foregoing provisions of this Section 3, the restrictions imposed by this
Section 3 upon the transferability of any Restricted Stock shall cease and
terminate when (a) any such Restricted Stock are sold or otherwise disposed of
in accordance with the intended method of disposition by the seller or sellers
thereof set forth in a registration statement or such other method contemplated
by Section 3 hereof that does not require that the securities transferred bear
the legend set forth in Section 3.2 hereof, including a Transfer pursuant to
Rule 144 or a successor rule thereof (as amended from time to lime), or (b) the
holder of Restricted Stock has met the requirements for transfer of such
Restricted Stock pursuant to subparagraph (b)(1) of Rule 144 or a successor
rule thereof (as amended from time to time) promulgated by the Commission under
the Securities Act. Whenever the restrictions imposed by this Section 3 have
terminated, a holder of a certificate for Restricted Stock as to which such
restrictions have terminated shall be entitled to receive from the Corporation,
without expense, a new certificate not bearing the restrictive legend set forth
in Section 3.2 hereof and not containing any other reference to the restrictions
imposed by this Section 3.

 

3.11                        Lock-up Agreement.

 

(a)                                 In no event shall any Stockholder be
permitted, during the period commencing on the date hereof and ending on the
date of the listing of the Common Stock on a national securities exchange, to
sell, assign, transfer, make a short sale of, loan, or grant any option for the
purchase of, any shares of Common Stock for a price that is less than $6.142 per
share (subject to proportionate and equitable adjustment upon any stock split,
stock dividend, reverse stock split or similar event affecting the Common Stock
that becomes effective after the date of this Agreement) or any other shares of
capital stock of the Company for an effective price that is less than $6.142 per
share on an as-converted to Common Stock basis (subject to proportionate and
equitable adjustment upon any stock split, stock dividend, reverse stock split
or similar event affecting the Common Stock that becomes effective after the
date of this Agreement), except (x) with the prior written consent of the
Company or (y) to a member of such Stockholder’s Group.

 

(b)                                 Each Stockholder agrees further that, if the
Company or a managing underwriter so requests of such Stockholder in connection
with a registered public offering of securities of the Company, such Stockholder
will not, without the prior written consent of the Company or such underwriters,
sell, assign, transfer, make a short sale of, loan, grant any option for the
purchase of, or exercise registration rights with respect to any shares of
Common Stock or shares of capital stock or other securities of the Corporation
convertible into or exercisable for, whether directly or indirectly, shares of
Common Stock, other than to a member of such Stockholder’s Group, during the
period of (i)180 days following the closing of the first public offering of
securities offered and sold for the account of the Corporation that is
registered under the Securities Act, or (ii) 90 days following the closing of
any other public offering of securities offered and sold for the account of the
Corporation that is registered under the Securities Act; provided that such
request is made of all officers, directors and 1% and greater Stockholders and
each such person shall be similarly bound; and, provided, further, that nothing
in this Section 3.11(c) shall prevent any Stockholder from participating in any
registered public offering of the Corporation as a selling stockholder or
security holder.

 

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(c)                                  In the event that the Corporation releases
or causes to be released any Stockholder from any restrictions on transfer set
forth in the foregoing provisions of this Section 3.11, the Corporation shall
release or cause to be released all other Stockholders in similar fashion and
any such release of all Stockholders shall be implemented on a pro rata basis.

 

3.12                                Furnish Information.  It shall be a
condition precedent to the obligations of the Corporation to take any action
pursuant to this Section 3 with respect to the Registrable Securities of any
selling Holder that such Holder shall furnish to the Corporation such
information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as is reasonably required to
effect the registration of such Holder’s Registrable Securities.

 

3.13                                Termination of Registration Rights.  The
right of any Holder to request registration or inclusion of Registrable
Securities in any registration pursuant to this Section 3 shall terminate upon
the earlier to occur of: (a) such time as Rule 144 or another similar exemption
under the Securities Act is available for the sale of all of such Holder’s
shares without volume, manner of sale or other limitation during a three-month
period without registration; and (b) the Expiration Date.

 

SECTION 4.  Approval of Certain Matters; Election of Directors.

 

4.1                               Approval of Certain Issuances and Charter
Amendment.  Each Stockholder shall, as directed from time to time by the
Corporation, in his, her or its capacity as a holder of shares of Series A-1
Preferred Stock, Series A-2 Preferred Stock and/or Series A-3 Preferred Stock
(and all shares of Common Stock issuable upon conversion thereof), (i) approve
of, pursuant to Section 7(e)(ii)(g) of the Series A-1 Certificate, the issuance
of any shares of Common Stock (as such term is used in Section 7(e)(i) of the
Series A-1 Certificate) or other securities of the Corporation for a
consideration per share equal to or greater than $6.142 (subject to
proportionate and equitable adjustment upon any stock split, stock dividend,
reverse stock split or similar event affecting the Common Stock that becomes
effective after the date of this Agreement) (a “Specified Issuance”), with such
approval expressly waiving the application of the anti-dilution provisions of
Section 7 of the Series A-1 Certificate as a result of such Specified Issuance
and (ii) approve an amendment (the “Charter Amendment”) to the Series A-1
Certificate to state as the Conversion Price (as defined in the Series A-1
Certificate) of each of the Series A-1 Preferred Stock, Series A-2 Preferred
Stock and Series A-3 Preferred Stock, the adjusted Conversion Price of each such
series (the “Adjusted Conversion Price”) after giving effect to the adjustment
contemplated by (x) Section 7(e) of the Series A-1 Certificate as a result of
the issuance of the shares of Series B Preferred Stock and Warrants issued
pursuant to the Stock Purchase Agreement and (y) the terms of the following
sentence.  The Charter Amendment shall state the Adjusted Conversion Price as it
would be calculated assuming that the issuances of all shares of Series B
Preferred Stock and Warrants issued pursuant to the Stock Purchase Agreement
occurred on the date of the first such issuance (and without giving effect to
any additional adjustments as a result of any such subsequent issuances under
the Stock Purchase Agreement).  In connection with any Specified Issuance, the
Corporation shall give written instructions to each Series A-1 Stockholder,
Series A-2 Stockholder and Series A-3 Stockholder directing such holder to
approve such Specified Issuance in the manner described in this Section 4.1.

 

4.2                               Voting for Directors.  At the first annual
meeting of the Stockholders of the Corporation after the Initial Closing (as
defined in the Stock Purchase Agreement), and thereafter at each annual meeting
and each special meeting of the Stockholders of the Corporation called for the
purposes of electing directors of the Corporation, and at any time at which
Stockholders of the Corporation shall have the right to, or shall, vote or
consent to the election of directors, then, in each such event, each Stockholder
shall vote all shares of Preferred Stock, Common Stock and any other shares of
voting stock of the Corporation then owned (or controlled as to voting rights)
by it, him or her,

 

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whether by purchase, exercise of rights, warrants or options, stock dividends or
otherwise:

 

(a)                                 to fix and maintain the number of directors
on the Board at eight (8);

 

(b)                                 to the extent entitled under the Certificate
as in effect as of the date of this Agreement, to elect as Directors of the
Corporation on the date hereof and in any subsequent election of Directors the
following individuals:

 

(i)                                     in the case of the two (2) directors to
be elected by the holders of Series A-1 Preferred Stock under the Certificate,
two (2) individuals to be designated by the affirmative vote or written consent
of the holders of a majority of the outstanding shares of Series A-1 Preferred
Stock (the “Series A-1 Directors”), who shall initially be Ansbert Gadicke and
Martin Münchbach.

 

(ii)                                  in the case of the one (1) director to be
elected by the G3 Holders (as defined in the Series A-1 Certificate), one
(1) individual to be designated by the affirmative vote or written consent of
the holders of at least 70% of the outstanding shares of Series B Preferred
Stock (the “Series B Director”), who shall initially be Morana Jovan-Embiricos.

 

(iii)                               in the case of the one (1) director to be
elected by MPM, one (1) director to be designated by the affirmative vote or
written consent of MPM, provided that such director be an individual with
particular expertise in the development of pharmaceutical products, as
reasonably determined by MPM, if any (the “Industry Expert Director” and
together with the Series B Director and the Series A-1 Directors, the “Investor
Directors”), who shall initially be Elizabeth Stoner, provided, further,
however, that in order to be eligible to vote or consent with respect to the
designation of an individual as a nominee for election as the Industry Expert
Preferred Director, MPM together with members of the MPM Group must hold greater
than twenty percent (20%) of the Preferred Stock purchased under the Series A-1
Stock Purchase Agreement by MPM and members of the MPM Group.

 

(iv)                              in the case of the remaining directors to be
elected by the holders of Preferred Stock and Common Stock, voting together as a
single class, under the Certificate, four (4) individuals as follows:

 

a.                                      three industry or market experts, each
of whom shall be designated by a majority of the other members of the Board,
including a majority of the Investor Directors (the “Independent Directors”),
and who shall initially be Alan Auerbach, Kurt Graves and Owen Hughes; and

 

b.                                      the Chief Executive Officer of the
Corporation, who shall initially be Michael Wyzga.

 

4.3                               Observer Rights.

 

(a)                                 The Majority G3 Investors shall have the
right to appoint one observer to the Board (the “G3 Observer”), provided,
however, that in order for any G3 Investor to be eligible to participate in the
appointment of an individual as the G3 Observer, such G3 Investor, together with
members of such G3 Investor’s Group, must continue to hold greater than seventy
five percent (75%) of the Series A-1 Preferred Stock originally purchased by
such G3 Investor and members of such G3 Investor’s Group pursuant to the
Series A-1 Stock Purchase Agreement and greater than seventy five percent (75%)
of the Series B Preferred Stock originally purchased by such G3 Investor and
members of such G3 Investor’s Group pursuant to the Stock Purchase Agreement.
The G3 Observer shall have the right to attend all meetings of the Board in a
non-voting observer capacity, and the Corporation shall

 

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provide to the G3 Observer all materials provided to the members of the Board
and notice of such meetings, all in the manner and at the time provided to the
members of the Board; provided, however, that the Corporation reserves the right
to exclude such representatives from access to any material or meeting or
portion thereof if the Corporation believes upon advice of counsel that such
exclusion is necessary to preserve the attorney-client privilege or to protect
highly confidential information, the disclosure of which should not be made to
any person who does not have a fiduciary or other similar duty to the
Corporation. The decision of the Board with respect to the privileged or
confidential nature of such information shall be final and binding. The rights
of each G3 Investor under this Section 4.3(a) may only be assigned in connection
with the transfer of all of the Preferred Stock held by such G3 Investor to the
assignee. In addition and without limiting the foregoing, in the event that the
Majority G3 Investors appoint any person to be the G3 Observer under this
Section 4.3(a) who, in the good faith determination of the Board, has
conflicting interests with the Corporation, then the Corporation shall have the
right, at any time and from time to time, to exclude the G3 Observer from access
to any meeting, or any portion thereof, and/or deny the G3 Observer access to
any information and documents, or any portions thereof.

 

(b)                                 In the event that the Board approves the
grant of the rights contained herein to a purchaser of shares of Series B Stock
under the Purchase Agreement after the date hereof (any such purchaser with
respect to whom the Board has approved the granting of such rights, the “Extra
Purchaser”), upon such Extra Purchaser becoming a party hereto and a Stockholder
hereunder, such Extra Purchaser shall have the right to appoint an observer to
the Board (the “Extra Observer”) as long as such Extra Purchaser holds greater
than seventy five percent (75%) of the Series B Preferred Stock originally
purchased by such purchaser  pursuant to the Stock Purchase Agreement. The Extra
Observer shall have the right to attend all meetings of the Board in a
non-voting observer capacity, and the Corporation shall provide to the Extra
Observer all materials provided to the members of the Board and notice of such
meetings, all in the manner and at the time provided to the members of the
Board; provided, however, that the Corporation reserves the right to exclude
such representatives from access to any material or meeting or portion thereof
if the Corporation believes upon advice of counsel that such exclusion is
necessary to preserve the attorney-client privilege or to protect highly
confidential information, the disclosure of which should not be made to any
person who does not have a fiduciary or other similar duty to the Corporation.
The decision of the Board with respect to the privileged or confidential nature
of such information shall be final and binding. The Extra Purchaser’s rights
under this Section 4.3(b) may only be assigned in connection with the transfer
of all of the Preferred Stock held by the Extra Purchaser to the assignee. In
addition and without limiting the foregoing, in the event that the Extra
Purchaser appoints any person to be the Extra Observer under this
Section 4.3(b) who, in the good faith determination of the Board, has
conflicting interests with the Corporation, then the Corporation shall have the
right, at any time and from time to time, to exclude the Extra Observer from
access to any meeting, or any portion thereof, and/or deny the Extra Observer
access to any information and documents, or any portions thereof.

 

4.4                               Cooperation of the Corporation.  The
Corporation shall use its best efforts to effectuate the purposes of this
Section 4, including (a) taking such actions as are necessary to convene annual
and/or special meetings of the Stockholders for the election of directors and
(b) promoting the adoption of any necessary amendment of the by-laws of the
Corporation and the Certificate.

 

4.5                               Notices. The Corporation shall provide the
Series B Stockholders, the Series A-1 Stockholders and MPM with at least twenty
(20) days’ prior notice in writing of any intended mailing of notice to the
Stockholders of a meeting at which directors are to be elected, and such notice
shall include the names of the persons designated by the Corporation pursuant to
this Section 4.  The Series B Stockholders, the Series A-1 Stockholders and MPM
shall notify the Corporation in writing at least three (3) days prior to such
mailing of the persons designated by them respectively pursuant to Section 4.2
above as nominees for election to the Board.  In the absence of any notice from
the Series B Stockholders, the Series A-1 Stockholders and MPM, the
director(s) then serving and previously

 

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designated by the Series B Stockholders, the Series A-1 Stockholders and MPM, as
applicable, shall be renominated.

 

4.6                               Removal.  Except as otherwise provided in this
Section 5, no Stockholder shall vote to remove any member of the Board
designated in accordance with the foregoing provisions of this Section 4 unless
the party or group of stockholders, as applicable, who designated such director
(the “Designating Party”) shall so vote or otherwise consent, and, if the
Designating Party shall so vote or otherwise consent, then the non-designating
Stockholders shall likewise so vote. Any vacancy on the Board created by the
resignation, removal, incapacity or death of any person designated under the
foregoing provisions of this Section 4 may be filled by another person
designated by the original Designating Party. Each Stockholder shall vote all
shares of voting stock of the Corporation owned or controlled by such
Stockholder in accordance with each such new designation.

 

4.7                               Quorum.  A quorum for any meeting of the Board
of Directors shall consist of a majority of all directors; provided, that a
majority of the Investor Directors then serving as directors of the Corporation
is in attendance at such meeting.  If, at any meeting, a quorum is not present
for any reason, then another Board meeting may be convened within no less than
two (2) and no more than ten (10) business days and, at such meeting, a majority
of all directors shall constitute a quorum for all purposes.

 

4.8                               Committees.  Each of the Investor Directors
serving as a director of the Corporation shall have the right to sit on any
committee of the Board.

 

4.9                               Duration of Section.  This Section 4 and the
rights and obligations of the parties hereunder shall automatically terminate on
the earlier of (i) the consummation of an Event of Sale (as defined in the
Certificate) or (ii) the automatic conversion of all of the Preferred Stock of
the Corporation pursuant to the Certificate as a result of the listing, or the
admitting for trading, of the Common Stock on a national securities exchange.
Prior to such termination, the rights and obligations of any Preferred
Stockholder under this Section 4 shall terminate upon the date on which such
Preferred Stockholder or its Group no longer owns any Preferred Stock, whereupon
the obligations of the remaining Stockholders to vote in favor of the designee
of such Preferred Stockholder shall also terminate.

 

SECTION 5.  Indemnification.

 

5.1                               Indemnification of Investors.  In the event
that any Preferred Stockholder or any director, officer, employee, affiliate or
agent thereof (the “Indemnitees”), become involved in any capacity in any
action, proceeding, investigation or inquiry in connection with or arising out
of any matter related to the Corporation or any Indemnitee’s role or position
with the Corporation, the Corporation shall reimburse each Indemnitee for its
legal and other expenses (including the cost of any investigation and
preparation) as they are incurred by such Indemnitee in connection therewith.
The Corporation also agrees to indemnify each Indemnitee, pay on demand and
protect, defend, save and hold harmless from and against any and all
liabilities, damages, losses, settlements, claims, actions, suits, penalties,
fines, costs or expenses (including attorneys’ fees) (any of the foregoing, a
“Claim”) incurred by or asserted against any Indemnitee of whatever kind or
nature, arising from, in connection with or occurring as a result of this
Agreement or the matters contemplated by this Agreement; provided, however, that
the Corporation shall not be required to indemnify any Indemnitee hereunder in
connection with any matter as to which a court of competent jurisdiction has
made a final non-appealable determination that such Indemnitee has acted with
gross negligence or willful or intentional misconduct in connection therewith.
The foregoing agreement shall be in addition to any rights that any Indemnitee
may have at common law or otherwise.

 

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5.2                               Advancement of Expenses.  The Corporation
shall advance all expenses reasonably incurred by or on behalf of the
Indemnitees in connection with any Claim or potential Claim within twenty (20)
days after the receipt by the Corporation of a statement or statements from the
Indemnitee requesting such advance payment or payments from time to time.

 

SECTION 6.  Remedies.  In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party or parties entitled to the benefit of such covenants or
agreements may proceed to protect and enforce its or their rights, either by
suit in equity and/or action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Agreement.  The
rights, powers and remedies of the parties under this Agreement are cumulative
and not exclusive of any other right, power or remedy which such parties may
have under any other agreement or law. No single or partial assertion or
exercise of any right, power or remedy of a party hereunder shall preclude any
other or further assertion or exercise thereof.

 

SECTION 7.  Successors and Assigns.  Except as otherwise expressly provided
herein, this Agreement shall bind and inure to the benefit of the Corporation
and each of the Stockholder parties hereto and the respective successors and
permitted assigns of the Corporation and each of the Stockholder parties hereto
(including any member of a Stockholder’s Group).  Subject to the requirements of
Section 3 hereof, this Agreement and the rights and duties of the any
Stockholder set forth herein may be freely assigned, in whole or in part, by
such Stockholder to any member of their respective Group, provided such
transferee is an “affiliate” of such Stockholder, as the case may be, as such
term is defined under Rule 501 of the Securities Act (it being recognized and
agreed that each member of the Oxford/Saints Group shall be deemed to be
“affiliates” of each other for this purpose).  Subject to the requirements of
Section 3 hereof, the rights under this Agreement may be assigned (but only with
related obligations) by a Holder to a transferee of Registrable Securities that,
after such transfer, holds at least 100,000 shares of Registrable Securities
(subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations).  For the purposes of determining the
number of shares of Registrable Securities held by a transferee, the holdings of
a transferee (a) that is an affiliate or stockholder of a Holder; (b) who is a
Holder’s Immediate Family Member; or (c) that is a trust for the benefit of an
individual Holder or such Holder’s Immediate Family Member shall be aggregated
together and with those of the transferring Holder; provided further that all
transferees who would not qualify individually for assignment of rights shall
have a single attorney-in-fact for the purpose of exercising any rights,
receiving notices, or taking any action under this Agreement.  Any transferee
from a Stockholder to whom rights under Section 3 are transferred shall, as a
condition to such transfer, deliver to the Corporation a written instrument by
which such transferee identifies itself (together with its address), gives the
Corporation notice of the transfer of such rights, identifies the securities of
the Corporation owned or acquired by it and agrees to be bound by the
obligations imposed hereunder to the same extent as if such transferee were a
Stockholder hereunder. A transferee to whom rights are transferred pursuant to
this Section 6 will be thereafter deemed to be a Stockholder for the purpose of
the execution of such transferred rights and may not again transfer such rights
to any other person or entity, other than as provided in this Section 7. 
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assignees any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided herein.

 

SECTION 8.  Duration of Agreement.  The rights and obligations of the
Corporation and each Stockholder set forth herein shall survive indefinitely,
unless and until, by the respective terms of this Agreement, they are no longer
applicable.

 

SECTION 9.  Entire Agreement.  This Agreement, together with the other writings
referred to

 

26

--------------------------------------------------------------------------------

 

herein or delivered pursuant hereto which form a part hereof, contains the
entire agreement among the parties with respect to the subject matter hereof and
amends, restates and supersedes all prior and contemporaneous arrangements or
understandings with respect thereto, including the Prior Agreement.

 

SECTION 10.  Notices.  All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by first class registered,
certified or overnight mail, postage prepaid, or telecopied with a confirmation
copy by regular mail, addressed or telecopied, as the case may be, to such party
at the address or telecopier number, as the case may be, set forth below or such
other address or telecopier number, as the case may be, as may hereafter be
designated in writing by the addressee to the addressor listing all parties:

 

(i)                                     if to the Corporation, to:

 

Radius Health, Inc.

201 Broadway

Sixth Floor

Cambridge, MA 02139

Attention: Chief Executive Officer
Telecopier: (617) 551-4701

 

with a copy to:

 

Latham & Watkins LLP

John Hancock Tower, 20th Floor

200 Clarendon Street

Boston, MA 02116

Attention: Peter N. Handrinos

Telecopier: (617) 948-6001

 

(ii)                                  if to the Investors, as set forth on
Schedule 2 or Schedule 3; to the Common Stockholders, as set forth on Schedule
1; to the holders of Series A-2 Preferred Stock, as set forth on Schedule 4; to
the holders of Series A-3 Preferred Stock, as set forth on Schedule 5; to the
holders of Series A-4 Preferred Stock, as set forth on Schedule 6; to the holder
of Series A-5 Preferred Stock and/or Series A-6 Preferred Stock, as set forth on
Schedule 7.

 

All such notices, requests, consents and communications shall be deemed to have
been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of mailing, on the third business day following the
date of such mailing, (c) in the case of overnight mail, on the first business
day following the date of such mailing, and (d) in the case of facsimile
transmission, when confirmed by facsimile machine report.

 

SECTION 11.  Changes.  The terms and provisions of this Agreement may not be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, except pursuant to the written consent of the Corporation and the
Majority Investors, and to the extent that there is a material adverse effect of
any such modification or amendment on the rights and obligations of the holders
of shares of Series A-4 Preferred Stock, Series A-5 Preferred Stock or
Series A-6 Preferred Stock, respectively, in a manner more adverse than such
effect on the holders of Series A-1 Preferred Stock, Series A-2 Preferred Stock
or Series A-3 Preferred Stock, respectively, a majority in combined voting power
of the such more affected series then outstanding, determined in accordance with
Section 6(a) of the Series A-1 Certificate. Additional parties who become
parties to this Agreement pursuant to an

 

27

--------------------------------------------------------------------------------

 

instrument of adherence will not constitute a change under this Section 11.
Notwithstanding the foregoing, (a) any modification or amendment to this
Agreement that would adversely affect one Series B Stockholder, Series A-1
Stockholder, Series A-2 Stockholder or Series A-3 Stockholder in a manner that
is directed specifically to such Series B Stockholder, Series A-1 Stockholder,
Series A-2 Stockholder or Series A-3 Stockholder, rather than to all Series B
Stockholders, Series A-1 Stockholders, Series A-2 Stockholders and Series A-3
Stockholders, shall be subject to the approval of each such Series B
Stockholder, Series A-1 Stockholder, Series A-2 Stockholder or Series A-3
Stockholder, as applicable, (b) any modification or amendment to Section 2.11
hereof shall be subject to the further approval of F2 Biosciences, Wellcome, at
least one member of HCV Group, one member of the MPM Group, one member of the
Brookside Group, one member of the BB Bio Group, and one member of the
Oxford/Saints Group, (c) any modification to Section 4.2(b)(i) shall be subject
to the further approval of Stockholders holding a majority of the outstanding
shares of Series A-1 Preferred Stock, (d) any modification to
Section 4.2(b)(ii) shall be subject to the further approval of Stockholders
holding a majority of the outstanding shares of Series B Preferred Stock,
(e) any modification to Section 4.2(b)(iii) shall be subject to the further
approval of at least one member of the MPM Group, (f) any modification to
Section 4.3(a) shall be subject to the further approval of the Majority G3
Investors and (g) any modification to Section 4.3(b) shall be subject to the
further approval of the Extra Purchaser, if any. It is understood that any
separate consent required pursuant to the foregoing clauses (a) - (g) would not
be required if any such adverse effect results from the application of criteria
uniformly to all Stockholders even if such application may affect Stockholders
differently.

 

SECTION 12.  Counterparts.  This Agreement may be executed in any number of
counterparts, each such counterpart shall be deemed to be an original instrument
and all such counterparts together shall constitute but one agreement.

 

SECTION 13.  Headings; Interpretation.  The headings of the various sections of
this Agreement have been inserted for convenience of reference only, and shall
not be deemed to be a part of this Agreement.  All references in this Agreement
to “including” shall be deemed to mean “including without limitation.”

 

SECTION 14.  Nouns and Pronouns.  Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and
vice-versa.

 

SECTION 15.  Severability.  Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

SECTION 16.  Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts, excluding
choice of law rules thereof that would result in the application of the laws of
any other jurisdiction; provided that Sections 2, 3 and 4 of this Agreement
shall be governed by and construed in accordance with the General Corporation
Law of the State of Delaware, as to matters within the scope thereof.

 

SECTION 17.                     Additional Parties.  Notwithstanding anything to
the contrary contained herein, any Stockholder may become a party to this
Agreement following the delivery to, and written acceptance by, the Corporation
of an executed Instrument of Adherence to this Agreement in the form attached
hereto as Annex A.  No action or consent by Stockholder parties hereto shall be
required for such joinder to this Agreement by such additional Stockholder, so
long as such additional Stockholder has agreed in

 

28

--------------------------------------------------------------------------------

 

writing to be bound by all of the obligations as Stockholder party hereunder as
indicated in the Instrument of Adherence and the Instrument of Adherence has
been accepted in writing by the Corporation.

 

SECTION 18.  Waiver; Amendment; Termination.  The parties to this Agreement
hereby agree and acknowledge that the Corporation has, as of, and at all times
prior to, the date of this Agreement, complied with all of its obligations under
the Prior Agreement and the Prior Second Agreement and that the Corporation
shall have no liability or obligation to pay any damages under the Prior
Agreement or the Prior Second Agreement with respect to any right, covenant or
obligation arising under the Prior Agreement or the Prior Second Agreement at
any time prior to the date of this Agreement.  All provisions of, rights granted
and covenants made in, the Prior Agreement or the Prior Second Agreement are
hereby waived, released and superseded, with full retrospective and prospective
effect, in their entirety and shall have no further force or effect.   The Prior
Second Agreement is hereby terminated in its entirety without any liability of
any party thereunder whatsoever and shall have no further force or effect.

 

29

--------------------------------------------------------------------------------

 

(Signature Page to Stockholders’ Agreement)

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date
first above written.

 

 

CORPORATION:

 

 

 

RADIUS HEALTH, INC.

 

 

 

 

 

By:

 

 

Name:

Michael S. Wyzga

 

Title:

President & Chief Executive Officer

 

 

 

INVESTORS:

 

 

 

F2 BIOSCIENCE III, L.P.

 

 

 

By: F2 Bioscience GP, Ltd., General Partner

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

BB BIOTECH VENTURES II, L.P.

 

 

 

On behalf of BB Biotech Ventures GP (Guernsey) Limited as General Partners to BB
Biotech Ventures II, L.P.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

BIOTECH GROWTH N.V.

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

MPM BIOVENTURES III, L.P.

 

 

 

By:

MPM BioVentures III GP, L.P.,

 

 

its General Partner

 

By:

MPM BioVentures III LLC,

 

 

its General Partner

 

--------------------------------------------------------------------------------

 

 

By:

 

 

Name:

Ansbert Gadicke

 

Title:

Series A Member

 

 

 

MPM BIOVENTURES III-QP, L.P.

 

 

 

By:

MPM BioVentures III GP, L.P.,

 

 

its General Partner

 

By:

MPM BioVentures III LLC,

 

 

its General Partner

 

 

 

 

By:

 

 

Name:

Ansbert Gadicke

 

Title:

Series A Member

 

 

 

MPM BIOVENTURES III GMBH & CO.

 

BETEILIGUNGS KG

 

 

 

By:

MPM BioVentures III GP, L.P.,

 

 

in its capacity as the Managing Limited Partner

 

By:

MPM BioVentures III LLC,

 

 

its General Partner

 

 

 

 

By:

 

 

Name:

Ansbert Gadicke

 

Title:

Series A Member

 

 

 

MPM BIOVENTURES III PARALLEL FUND, L.P.

 

 

 

By:

MPM BioVentures III GP, L.P.,

 

 

its General Partner

 

By:

MPM BioVentures III LLC,

 

 

its General Partner

 

 

 

 

By:

 

 

Name:

Ansbert Gadicke

 

Title:

Series A Member

 

 

 

 

MPM ASSET MANAGEMENT INVESTORS 2003 BVIII LLC

 

 

 

By:

 

 

Name:

Ansbert Gadicke

 

Title:

Manager

 

 

 

 

MPM BIO IV NVS STRATEGIC FUND, L.P.

 

 

 

By:

MPM BioVentures IV GP LLC, its General Partner

 

By:

MPM BioVentures IV LLC,

 

 

its Managing Member

 

--------------------------------------------------------------------------------

 

 

By:

 

 

Name:

Ansbert Gadicke

 

Title:

 

 

 

 

HEALTHCARE PRIVATE EQUITY LIMITED

 

PARTNERSHIP

 

 

 

By: Waverley Healthcare Private Equity Limited,

 

its general partner

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

OBP IV — HOLDINGS LLC

 

 

 

By:

OXFORD BIOSCIENCE PARTNERS IV., L.P.

 

By:

OBP Management iv, L.P.

 

 

 

By:

 

 

Name:

Jonathan Fleming

 

Title:

General Partner

 

 

 

By:

SAINTS CAPITAL GRANITE, L.P.

 

By:

SAINTS CAPITAL GRANITE, LLC

 

 

 

 

By:

 

 

Name:

Scott Halsted

 

Title:

Managing Director

 

 

 

MRNA II - HOLDINGS LLC

 

 

 

By:

MRNA FUND II, L.P.

 

By:

OBP MANAGEMENt II , L.P.

 

 

 

By:

 

 

Name:

Jonathan Fleming

 

Title:

General Partner

 

 

 

By:

SAINTS CAPITAL GRANITE, L.P.

 

By:

SAINTS CAPITAL GRANITE, LLC

 

 

 

By:

 

 

Name:

Scott Halsted

 

Title:

Managing Director

 

 

 

THE WELLCOME TRUST LIMITED,

 

--------------------------------------------------------------------------------

 

 

AS TRUSTEE OF THE WELLCOME TRUST

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

BROOKSIDE CAPITAL PARTNERS FUND, L.P.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

NORDIC BIOSCIENCE CLINICAL

 

DEVELOPMENT VII A/A

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

IPSEN PHARMA SAS

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

The Breining Family Trust dated August 15, 2003

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Dr. Raymond F. Schinazi

 

 

 

 

 

Dr. Dennis A. Carson

 

 

 

 

 

The David E. Thompson Revocable Trust

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

 

Jonnie K. Westbrook Revocable Trust dated March 17, 2000

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

HEALTHCARE VENTURES VII, L.P.

 

 

 

By:

HealthCare Partners VII, L.P.

 

 

Its General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

Jeffrey Steinberg

 

Title:

Administrative Partner

 

 

 

The Kent C. Westbrook Revocable Trust,

 

Dated March 17, 2000

 

 

 

By:

 

 

Name:

Kent Westbrook, M.D.

 

Title:

Trustee

 

 

 

 

 

H. Watt Gregory III

 

 

 

 

 

H2 ENTERPRISES, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Hostetler Family Trust UTD 3/18/92

 

 

 

By:

 

 

Name:

Karl Y. Hostetler

 

Title:

Co-Trustee

 

 

 

 

 

 

 

By:

 

 

Name:

Margarethe. Hostetler

 

Title:

Co-Trustee

 

--------------------------------------------------------------------------------

 

 

The Richman Trust dated 2/6/83

 

 

 

By:

 

 

Name:

Douglas D. Richman

 

Title:

Co-Trustee

 

 

 

By:

 

 

Name:

Eva A. Richman,

 

Title:

Co-Trustee

 

 

 

 

 

Ruff Trust dated l-1-02

 

 

 

By:

 

 

Name:

F. Bronson Van Wyck

 

Title:

Trustee

 

 

 

 

 

Stavros C. Manolagas

 

 

 

 

 

Michael Rosenblatt, M.D.

 

 

 

 

 

Patricia E. Rosenblatt

 

 

 

Dr. John Potts, Jr and Susanne K. Potts

 

Irrevocable Trust for Stephen K. Potts

 

dated 6-15-05

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

John Thomas Potts, M.D.

 

 

 

 

 

John A. Katzenellenbogen, PhD.

 

 

 

John A. Katzenellenbogen Trust

 

Under Agreement Dated August 2, 1999

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

 

 

 

Benita S. Katzenellenbogen, PhD

 

 

 

 

 

Bart Henderson

 

 

 

BOARD OF TRUSTEES OF THE UNIVERSITY OF ARKANSAS

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Benjamin C. Lane

 

 

 

Ruff Trust dated l-1-02

 

 

 

By:

 

 

Name:

F. Bronson Van Wyck

 

Title:

Trustee

 

 

 

 

 

Stavroula Kousteni, PhD.

 

 

 

 

 

Robert L. Jilka, PhD.

 

 

 

 

 

Robert S. Weinstein, M.D.

 

 

 

 

 

Teresita M. Bellido, PhD.

 

 

 

 

 

Dotty McIntyre

 

 

 

 

 

Thomas E. Sparks

 

 

 

 

 

Samuel Ho

 

 

 

 

 

Charles O’Brien, PhD.

 

--------------------------------------------------------------------------------

 

 

 

 

Alwyn Michael Parfitt, M.D.

 

 

 

 

 

Barnette Pitzele

 

 

 

 

 

Kelly Colbourn

 

 

 

 

 

Julie Glowacki

 

 

 

 

 

Socrates E. Papapoulos, M.D.

 

 

 

 

 

Tonya D. Smith

 

 

 

 

 

Maysoun Shomali

 

 

 

 

 

Jonathan Guerriero

 

 

 

 

 

E. Kelly Sullivan

 

 

 

 

 

Cecil Richard Lyttle

 

 

 

 

 

Louis O’Dea

 

 

 

 

 

Brian Nicholas Harvey

 

 

 

 

 

Christopher Miller

 

--------------------------------------------------------------------------------

 

Schedule 1

 

List of Common Stockholders

 

Name of Common Stockholder

 

Address of Record

 

 

 

Teresita M. Bellido, Ph.D

 

9302 Windrift Way
Zionsville, IN 46077

 

 

 

Julie Glowacki, Ph.D

 

76 Perkins Street
Jamaica Plain, MA 02130

 

 

 

H2 Enterprises, LLC

 

c/o H. Watt Gregory, III. Esq.
Kutak Rock, LLP
124 West Capitol Avenue, Suite 2000
Little Rock, AR 72201

 

 

 

Hostetler Family Trust, UTD 3/18/92

 

14024 Rue St. Raphael
Del Mar, CA 92014

 

 

 

Robert L, Jilka, Ph.D

 

14202 Clarborne Court
Little Rock, AR 72211

 

 

 

Benita S. Katzenellenbogen, Ph.D

 

704 West Pennsylvania Ave
Urbana, IL 61801

 

 

 

John A. Katzenellenbogen, Ph. D

 

704 West Pennsylvania Ave
Urbana, IL 61801

 

 

 

John A. Katzenellenbogen Trust Under Agreement dated August 2, 1999

 

704 West Pennsylvania Ave
Urbana, IL 61801

 

 

 

Stavroula Kousteni, Ph.D

 

58 Hillside Avenue
Glen Ridge, NJ 07028

 

 

 

Bart Henderson

 

45 Prentiss Lane
Belmont, MA 02478

 

 

 

Dr. Stavros C. Manolagas

 

35 River Ridge Circle
Little Rock AR 72227

 

 

 

Charles O’Brien, Ph. D

 

2824 Mossy Creek Dr
Little Rock, AR 72211

 

 

 

Socrates E. Papapoulos, M.D.

 

Javastraat 64
2585 AR the Hague
The Netherlands

 

 

 

Alwyn Michael Parfitt, M.D.

 

28 Baeza Way
Hot Springs Village, AR 71909

 

 

 

John Thomas Potts, Jr., M.D.

 

18 Hawthorne Street
Cambridge, MA 02138

 

 

 

Dr. John Potts Jr and Susanne K. Potts Irrevocable Trust for Stephen K. Potts,
dated 6/15/05

 

18 Hawthorne Street
Cambridge, MA 02138

 

 

 

Michael Rosenblatt, M.D.

 

130 Lake Ave
Newton Center, MA 02459

 

 

 

Patricia E. Rosenblatt

 

876 Beacon Street, Apt 5
Newton, MA 02459

 

 

 

Ruff Trust, F. Bronson Van Wyck, Trustee

 

2141 Highway 224 East
Tukerman, AR 72473

 

 

 

Tonya D. Smith

 

7790 Shannon Rd.
Pine Bluff, AR 71603

 

--------------------------------------------------------------------------------

 

Name of Common Stockholder

 

Address of Record

 

 

 

Thomas E. Sparks, Jr.

 

PO Box 472290
San Francisco, CA 94147

 

 

 

Board of Trustees of the University of Arkansas

 

University of Arkansas
c/o UAMS Bioventures Technology Licensing &
Life Science Incubator
4301 West Markham St #831
Little Rock, AR 72205-7199

 

 

 

Robert S. Weinstein, M.D.

 

11 Chalmette
Little Rock, AR 72211

 

 

 

The Kind C. Westbrook Revocable Trust, dated March 17, 2000

 

56 River Ridge Road
Little Rock, AR 72227

 

 

 

Rich Lyttle

 

Radius Health, Inc.
201 Broadway, Sixth Floor
Cambridge, MA 02139

 

 

 

Nick Harvey

 

Radius Health, Inc.
201 Broadway, Sixth Floor
Cambridge, MA 02139

 

 

 

Louis O’Dea

 

566 Main Street, Hingham, MA 02043

 

 

 

Dotty McIntyre

 

799 Shawsheen Street
Tewksbury, MA 01876

 

 

 

Samuel Ho

 

15 Hillview Ave.
Holbrook, MA 02343

 

 

 

Barnett Pitzelle

 

7924 N Tripp Ave
Skokie, IL 60076

 

 

 

Kelly Colbourn

 

123 Oxford Street #3
Cambridge, MA 01238

 

 

 

Maysoun Shomali

 

354 School Street
Watertown, MA 02472

 

 

 

Jonathan Guerriero

 

20 Bazin Lane
Canton, MA 02021

 

 

 

E. Kelly Sullivan

 

23 Bilknap St
Arlington, MA 02474

 

 

 

Christopher Miller

 

1685 Millburne Rd.
Lake Forest, IL 60045

 

 

 

Benjamin C. Lane

 

1284 Deer Trail Lane
Libertyville, IL 60048

 

--------------------------------------------------------------------------------

 

Schedule 2

 

List of Series B Stockholders

 

Name

 

Address of Record

 

 

 

F2 Bioscience III, L.P.

 

Ugland House
South Church Street
PO Box 309
George Town KY1-1104
Grand Cayman
Cayman Islands

 

 

 

MPM BioVentures III, L.P.

 

c/o MPM Capital
200 Clarendon Street
54th Floor
Boston, MA 02116

 

 

 

MPM BioVentures III - QP, L.P

 

c/o MPM Capital
200 Clarendon Street
54th Floor
Boston, MA 02116

 

 

 

MPM BioVentures III GmbH & Co. Beteiligungs KG

 

c/o MPM Capital
200 Clarendon Street
54th Floor
Boston, MA 02116

 

 

 

MPM BioVentures III Parallel Fund, L.P.

 

c/o MPM Capital
200 Clarendon Street
54th Floor
Boston, MA 02116

 

 

 

MPM Asset Management Investors 2003 BVIII LLC

 

c/o MPM Capital
200 Clarendon Street
54th Floor
Boston, MA 02116

 

 

 

MPM Bio IV NVS Strategic Fund, L.P.

 

c/o MPM Capital
200Clarendon Street
54th Floor
Boston, MA 02116

 

 

 

Brookside Capital Partners Fund, L.P.

 

Attn: Brookside Legal Department
Bain Capital, LLC
John Hancock Tower
200 Clarendon St.
Boston MA 02116

 

 

 

BB Biotech Ventures II, L.P.

 

Trafalgar Court
Les Banques
St. Peter Port
Guernsey
Channel Islands
GY1 3QL

 

--------------------------------------------------------------------------------

 

Name

 

Address of Record

 

 

 

 

 

With copies to
Martin Münchbach
Bellevue Asset Management
Seestrasse 16
8700 Küsnacht
Switzerland

 

 

 

Biotech Growth N.V.

 

Snipweg 26
Curaçao

 

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Schedule 3

 

List of Series A-1 Stockholders

 

Name

 

Address of Record

 

 

 

BB Biotech Ventures II, L.P.

 

Trafalgar Court

Les Banques

St. Peter Port

Guernsey

Channel Islands

GY1 3QL

 

With copies to

Martin Münchbach

Bellevue Asset Management

Seestrasse 16

8700 Küsnacht

Switzerland

 

 

 

BB Biotech Growth N.V.

 

Snipweg 26

Curaçao

 

 

 

HealthCare Ventures VII, L.P.

 

44 Nassau Street

Princeton, NJ 08542

 

 

 

MPM BioVentures III, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM BioVentures III - QP, L.P

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bio IV NVS Strategic Fund, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM BioVentures III GmbH & Co. Beteiligungs KG

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM BioVentures III Parallel Fund, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Asset Management Investors 2003 BVIII LLC

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

Healthcare Private Equity Limited Partnership

(Registered Number SL004769)

 

Edinburgh One, Morrison Street

Edinburgh, EH3 8BE

 

--------------------------------------------------------------------------------

 

Name

 

Address of Record

 

 

 

 

 

United Kingdom

 

 

 

Dr. Raymond F. Schinazi

 

Emory University School of Medicine

Veterans Affairs Medical Center

1670 Clairmont Road

Decatur, GA 30033

 

 

 

The Wellcome Trust Limited as trustee of the Wellcome Trust

 

 

215 Euston Road

London NW1 2BE

England

 

 

 

SAINTS CAPITAL VI, L.P.,

 

 

475 Sansome Street, Suite 1850

San Francisco, CA 94111

Attention: Scott Halsted

 

 

 

H. Watt Gregory, III

 

Suite 2000

124 West Capitol Avenue

Little Rock, Arkansas 72201

 

 

 

The Breining Family Trust 2/15/03

 

PO Box 9540

Rancho Santa Fe, CA 92067

 

 

 

The Richman Trust dated 2/6/83

 

9551 La Jolla Farms Road

La Jolla, CA 92037

 

 

 

Brookside Capital Partners Fund, L.P.

 

 

Attn:  Brookside Legal Department

Bain Capital, LLC

John Hancock Tower
200 Clarendon St.
Boston, MA 02116

 

 

 

David E. Thompson Revocable Trust

 

1045 Mason Street, # 501

San Francisco, CA 94108

 

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Schedule 4

 

List of Series A-2 Stockholders

 

Name of Stockholder

 

Address of Record

 

 

 

MPM Bioventures III Funds

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bioventures III-QP, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bioventures III GMBH & Co.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bioventures III Parallel Fund, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Asset Management Investors 2003

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bio IV NVS Strategic Fund

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

Wellcome Trust

 

215 Euston Road

London NW1 2BE

England

 

 

 

HealthCare Ventures VII

 

44 Nassau Street

Princeton, NJ 08542

 

 

 

OBP IV Holdings, LLC

 

c/o Oxford Bioscience Partners

222 Berkeley Street

Suite 1960

Boston, MA 02116

 

 

 

mRNA Fund II Holdings, LLC

 

c/o Oxford Bioscience Partners

222 Berkeley Street

Suite 1960

Boston, MA 02116

 

--------------------------------------------------------------------------------

 

BB Biotech Ventures II, L.P.

 

Trafalgar Court

Les Banques

St. Peter Port

Guernsey

Channel Islands

GY1 3QL

 

With copies to

Martin Münchbach

Bellevue Asset Management

Seestrasse 16

8700 Küsnacht

Switzerland

 

 

 

Healthcare Private Equity Limited Partnership
(Registered Number SL004769)

 

Edinburgh One, Morrison Street

Edinburgh, EH3 8BE

United Kingdom

 

 

 

Dr. Raymond F. Schinazi

 

Emory University School of Medicine

Veterans Affairs Medical Center

1670 Clairmont Road

Decatur, GA 30033

 

--------------------------------------------------------------------------------

 

Schedule 5

 

List of Series A-3 Stockholders

 

Name of Stockholder

 

Address of Record

 

 

 

MPM Bioventures III Funds

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bioventures III-QP, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bioventures III GMBH & Co.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Bioventures III Parallel Fund, L.P.

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

MPM Asset Management Investors 2003

 

c/o MPM Capital

200 Clarendon Street

54th Floor

Boston, MA 02116

 

 

 

HealthCare Ventures VII

 

44 Nassau Street

Princeton, NJ 08542

 

 

 

OBP IV Holdings, LLC

 

c/o Oxford Bioscience Partners

222 Berkeley Street

Suite 1960

Boston, MA 02116

 

 

 

mRNA Fund II Holdings, LLC

 

c/o Oxford Bioscience Partners

222 Berkeley Street

Suite 1960

Boston, MA 02116

 

--------------------------------------------------------------------------------

 

Schedule 6

 

List of Series A-4 Stockholders

 

Name of Stockholder

 

Address of Record

 

 

 

Dr. Raymond F. Schinazi

 

Emory University School of Medicine

Veterans Affairs Medical Center

1670 Clairmont Road

Decatur, GA 30033

 

 

 

H. Watt Gregory, III

 

Suite 2000

124 West Capitol Avenue

Little Rock, Arkansas 72201

 

 

 

The Breining Family Trust 2/15/03

 

PO Box 9540

Rancho Santa Fe, CA 92067

 

 

 

The Richman Trust dated 2/6/83

 

9551 La Jolla Farms Road

La Jolla, CA 92037

 

--------------------------------------------------------------------------------

 

Schedule 7

 

List of Series A-5 and A-6 Stockholder

 

Name of Stockholder

 

Address of Record

 

 

 

Nordic Bioscience Clinical Development VII A/S

 

Herlev Hovedgade 207

2730 Herlev

Denmark

Attn: Clinical Trial Leader & Medical Advisor /

Clinical Studies

Phone: 45.4452.5251

Fax: 45.4452.5251

 

--------------------------------------------------------------------------------

 

Annex A

 

Instrument of Adherence
to
Third Amended and Restated

Stockholders’ Agreement
dated [ · ], 2013

 

Reference is hereby made to that certain THIRD AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT (the “Agreement”), dated the [ · ] day of April, 2013,
entered into by and among (i) Radius Health, Inc., a Delaware corporation (the
“Corporation”) and the Stockholder parties thereto. Capitalized terms used
herein without definition shall have the respective meanings ascribed thereto in
the Agreement.

 

The undersigned (the “New Stockholder Party”), in order to become the owner or
holder of                                    shares of
                                                                             and
all other shares of the Corporation’s capital stock hereinafter acquired, of the
Corporation (the “Acquired Shares”), hereby agrees that, from and after the date
hereof, the undersigned has become a party to the Agreement in the capacity of a
                                                                 party to the
Agreement, and is entitled to all of the benefits under, and is subject to all
of the obligations, restrictions and limitations set forth in, the Agreement
that are applicable to such Stockholder parties and shall be deemed to have made
all of the representations and warranties made by such Stockholder parties
thereunder.  This Instrument of Adherence shall take effect and shall become a
part of the Agreement on the latest date of execution by both the New
Stockholder Party and the Corporation.

 

Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.

 

 

 

Print Name:

 

 

 

 

 

 

 

 

Signature:

 

 

 

Name:

 

 

Title:

 

 

Accepted:

 

RADIUS HEALTH, INC.

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

Date:

 

 

 

 

--------------------------------------------------------------------------------

Exhibit D

 

Form of Indemnification Agreement

 

--------------------------------------------------------------------------------

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of
[ · ], between Radius Health, Inc., a Delaware corporation (the “Company”), and
[ · ] (“Indemnitee”).

 

WITNESSETH THAT:

 

WHEREAS, highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the corporation;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities.  Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions.  At the same time, directors,
officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself.  The Bylaws and
Certificate of Incorporation of the Company require indemnification of the
officers and directors of the Company.  Indemnitee may also be entitled to
indemnification pursuant to the General Corporation Law of the State of Delaware
(“DGCL”).  The Bylaws, Certificate of Incorporation and the DGCL expressly
provide that the indemnification provisions set forth therein are not exclusive,
and thereby contemplate that contracts may be entered into between the Company
and members of the board of directors, officers and other persons with respect
to indemnification;

 

WHEREAS, the uncertainties relating to such insurance and to indemnification
have increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has determined that the increased difficulty in attracting
and retaining such persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify, and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that they will
not be so indemnified;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and
Certificate of Incorporation of the Company and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder; and

 

--------------------------------------------------------------------------------

 

WHEREAS, Indemnitee does not regard the protection available under the Company’s
Bylaws and Certificate of Incorporation and insurance as adequate in the present
circumstances, and may not be willing to serve as a director without adequate
protection, and the Company desires Indemnitee to serve in such capacity. 
Indemnitee is willing to serve, continue to serve and to take on additional
service for or on behalf of the Company on the condition that he be so
indemnified; and

 

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a
director from and after the date hereof, the parties hereto agree as follows:

 

1.                                      Indemnity of Indemnitee.  The Company
hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent
permitted by law, as such may be amended from time to time.  In furtherance of
the foregoing indemnification, and without limiting the generality thereof:

 

(a)                                 Proceedings Other Than Proceedings by or in
the Right of the Company.  Indemnitee shall be entitled to the rights of
indemnification provided in this Section l(a) if, by reason of his Corporate
Status (as hereinafter defined), the Indemnitee is, or is threatened to be made,
a party to or participant in any Proceeding (as hereinafter defined) other than
a Proceeding by or in the right of the Company.  Pursuant to this
Section 1(a), Indemnitee shall be indemnified against all Expenses (as
hereinafter defined), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him, or on his behalf, in connection with
such Proceeding or any claim, issue or matter therein, if the Indemnitee acted
in good faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was
unlawful.

 

(b)                                 Proceedings by or in the Right of the
Company.  Indemnitee shall be entitled to the rights of indemnification provided
in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is,
or is threatened to be made, a party to or participant in any Proceeding brought
by or in the right of the Company.  Pursuant to this Section 1(b), Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred by
the Indemnitee, or on the Indemnitee’s behalf, in connection with such
Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, if applicable law so provides, no indemnification
against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to be liable to
the Company unless and to the extent that the Court of Chancery of the State of
Delaware shall determine that such indemnification may be made.

 

(c)                                  Indemnification for Expenses of a Party Who
is Wholly or Partly Successful.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a party to and is successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified to the maximum extent permitted by law, as such may be
amended from time to time, against all Expenses actually and reasonably incurred
by him or on his behalf in connection therewith.  If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with

 

--------------------------------------------------------------------------------

 

each successfully resolved claim, issue or matter.  For purposes of this
Section and without limitation, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such claim, issue or matter.

 

2.                                      Additional Indemnity.  In addition to,
and without regard to any limitations on, the indemnification provided for in
Section 1 of this Agreement, the Company shall and hereby does indemnify and
hold harmless Indemnitee against all Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or on his
behalf if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or participant in any Proceeding (including a Proceeding by or
in the right of the Company), including, without limitation, all liability
arising out of the negligence or active or passive wrongdoing of Indemnitee. 
The only limitation that shall exist upon the Company’s obligations pursuant to
this Agreement shall be that the Company shall not be obligated to make any
payment to Indemnitee that is finally determined (under the procedures, and
subject to the presumptions, set forth in Sections 6 and 7 hereof) to be
unlawful.

 

3.                                      Contribution.

 

(a)                                 Whether or not the indemnification provided
in Sections 1 and 2 hereof is available, in respect of any threatened, pending
or completed action, suit or proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall pay, in the first instance, the entire amount of any judgment or
settlement of such action, suit or proceeding without requiring Indemnitee to
contribute to such payment and the Company hereby waives and relinquishes any
right of contribution it may have against Indemnitee.  The Company shall not
enter into any settlement of any action, suit or proceeding in which the Company
is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding) unless such settlement provides for a full and final release of all
claims asserted against Indemnitee.

 

(b)                                 Without diminishing or impairing the
obligations of the Company set forth in the preceding subparagraph, if, for any
reason, Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the amount of Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in proportion to the
relative benefits received by the Company and all officers, directors or
employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction from which
such action, suit or proceeding arose; provided, however, that the proportion
determined on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative fault of the
Company and all officers, directors or employees of the Company other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on the other hand,
in connection with the events that resulted in such expenses, judgments, fines
or settlement amounts, as well as any other equitable considerations which the
Law may require to be considered.  The relative fault of the Company and all
officers, directors or employees of the Company, other than Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among

 

--------------------------------------------------------------------------------

 

other things, the degree to which their actions were motivated by intent to gain
personal profit or advantage, the degree to which their liability is primary or
secondary and the degree to which their conduct is active or passive.

 

(c)                                  The Company hereby agrees to fully
indemnify and hold Indemnitee harmless from any claims of contribution which may
be brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.

 

(d)                                 To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).

 

4.                                      Indemnification for Expenses of a
Witness.  Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or
asked to) respond to discovery requests, in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.

 

5.                                      Advancement of Expenses. 
Notwithstanding any other provision of this Agreement, the Company shall advance
all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days
after the receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding.  Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by a written undertaking by or on behalf of Indemnitee
to repay any Expenses advanced if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified against such Expenses.  Any
advances and undertakings to repay pursuant to this Section 5 shall be unsecured
and interest free.

 

6.                                      Procedures and Presumptions for
Determination of Entitlement to Indemnification.  It is the intent of this
Agreement to secure for Indemnitee rights of indemnity that are as favorable as
may be permitted under the DGCL and public policy of the State of Delaware. 
Accordingly, the parties agree that the following procedures and presumptions
shall apply in the event of any question as to whether Indemnitee is entitled to
indemnification under this Agreement:

 

(a)                                 To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification.  The Secretary of the
Company shall, promptly upon receipt of such a request for indemnification,
advise the Board of

 

--------------------------------------------------------------------------------

 

Directors in writing that Indemnitee has requested indemnification. 
Notwithstanding the foregoing, any failure of Indemnitee to provide such a
request to the Company, or to provide such a request in a timely fashion, shall
not relieve the Company of any liability that it may have to Indemnitee unless,
and to the extent that, such failure actually and materially prejudices the
interests of the Company.

 

(b)                                 Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 6(a) hereof, a
determination with respect to Indemnitee’s entitlement thereto shall be made in
the specific case by one of the following four methods, which shall be at the
election of the board:  (1) by a majority vote of the disinterested directors,
even though less than a quorum, (2) by a committee of disinterested directors
designated by a majority vote of the disinterested directors, even though less
than a quorum, (3) if there are no disinterested directors or if the
disinterested directors so direct, by independent legal counsel in a written
opinion to the Board of Directors, a copy of which shall be delivered to the
Indemnitee, or (4) if so directed by the Board of Directors, by the stockholders
of the Company.  For purposes hereof, disinterested directors are those members
of the board of directors of the Company who are not parties to the action, suit
or proceeding in respect of which indemnification is sought by Indemnitee.

 

(c)                                  If the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 6(b) hereof, the Independent Counsel shall be selected as provided in
this Section 6(c).  The Independent Counsel shall be selected by the Board of
Directors.  Indemnitee may, within 10 days after such written notice of
selection shall have been given, deliver to the Company a written objection to
such selection; provided, however, that such objection may be asserted only on
the ground that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in Section 13 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion.  Absent a proper and timely objection, the person so
selected shall act as Independent Counsel.  If a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit.  If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to
Section 6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or Indemnitee may petition the Court of Chancery
of the State of Delaware or other court of competent jurisdiction for resolution
of any objection which shall have been made by the Indemnitee to the Company’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 6(b) hereof.  The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of this
Section 6(c), regardless of the manner in which such Independent Counsel was
selected or appointed.

 

(d)                                 In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement.  Anyone seeking to overcome this presumption shall have
the burden of proof and the burden of persuasion by clear and convincing
evidence.  Neither the failure of the Company (including by its directors or

 

--------------------------------------------------------------------------------

 

independent legal counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.

 

(e)                                  Indemnitee shall be deemed to have acted in
good faith if Indemnitee’s action is based on the records or books of account of
the Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise (as hereinafter defined) in the
course of their duties, or on the advice of legal counsel for the Enterprise or
on information or records given or reports made to the Enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Enterprise.  In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement.  Whether or not the foregoing
provisions of this Section 6(e) are satisfied, it shall in any event be presumed
that Indemnitee has at all times acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company.  Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.

 

(f)                                   If the person, persons or entity empowered
or selected under Section 6 to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within sixty (60) days after
receipt by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a
reasonable time, not to exceed an additional thirty (30) days, if the person,
persons or entity making such determination with respect to entitlement to
indemnification in good faith requires such additional time to obtain or
evaluate documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 6(f) shall not apply if
the determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 6(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination, the Board of Directors or the Disinterested Directors, if
appropriate, resolve to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within seventy-five (75)
days after such receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within sixty (60) days after having been so called and such
determination is made thereat.

 

(g)                                  Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination.  Any
Independent Counsel, member of the Board of Directors or stockholder of the
Company

 

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shall act reasonably and in good faith in making a determination regarding the
Indemnitee’s entitlement to indemnification under this Agreement.  Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in
so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.

 

(h)                                 The Company acknowledges that a settlement
or other disposition short of final judgment may be successful if it permits a
party to avoid expense, delay, distraction, disruption and uncertainty.  In the
event that any action, claim or proceeding to which Indemnitee is a party is
resolved in any manner other than by adverse judgment against Indemnitee
(including, without limitation, settlement of such action, claim or proceeding
with or without payment of money or other consideration) it shall be presumed
that Indemnitee has been successful on the merits or otherwise in such action,
suit or proceeding.  Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence.

 

(i)                                     The termination of any Proceeding or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company or, with
respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.

 

7.                                      Remedies of Indemnitee.

 

(a)                                 In the event that (i) a determination is
made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 5 of this Agreement, (iii) no determination of
entitlement to indemnification is made pursuant to Section 6(b) of this
Agreement within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this
Agreement within ten (10) days after receipt by the Company of a written request
therefor or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of Indemnitee’s entitlement to such indemnification. 
Indemnitee shall commence such proceeding seeking an adjudication within 180
days following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 7(a).  The Company shall not oppose
Indemnitee’s right to seek any such adjudication.

 

(b)                                 In the event that a determination shall have
been made pursuant to Section 6(b) of this Agreement that Indemnitee is not
entitled to indemnification, any judicial proceeding commenced pursuant to this
Section 7 shall be conducted in all respects as a de novo trial on the merits,
and Indemnitee shall not be prejudiced by reason of the adverse determination
under Section 6(b).

 

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(c)                                  If a determination shall have been made
pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding commenced pursuant to this Section 7, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee’s misstatement not materially misleading in
connection with the application for indemnification, or (ii) a prohibition of
such indemnification under applicable law.

 

(d)                                 In the event that Indemnitee, pursuant to
this Section 7, seeks a judicial adjudication of his rights under, or to recover
damages for breach of, this Agreement, or to recover under any directors’ and
officers’ liability insurance policies maintained by the Company, the Company
shall pay on his behalf, in advance, any and all expenses (of the types
described in the definition of Expenses in Section 13 of this Agreement)
actually and reasonably incurred by him in such judicial adjudication,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of expenses or insurance recovery.

 

(e)                                  The Company shall be precluded from
asserting in any judicial proceeding commenced pursuant to this Section 7 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement.  The Company shall indemnify Indemnitee
against any and all Expenses and, if requested by Indemnitee, shall (within ten
(10) days after receipt by the Company of a written request therefore) advance,
to the extent not prohibited by law, such expenses to Indemnitee, which are
incurred by Indemnitee in connection with any action brought by Indemnitee for
indemnification or advance of Expenses from the Company under this Agreement or
under any directors’ and officers’ liability insurance policies maintained by
the Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of Expenses or insurance recovery,
as the case may be.

 

(f)                                   Notwithstanding anything in this Agreement
to the contrary, no determination as to entitlement to indemnification under
this Agreement shall be required to be made prior to the final disposition of
the Proceeding.

 

8.                                      Non-Exclusivity; Survival of Rights;
Insurance; Primacy of Indemnification; Subrogation.

 

(a)                                 The rights of indemnification as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Certificate of
Incorporation, the Bylaws, any agreement, a vote of stockholders, a resolution
of directors or otherwise, of the Company.  No amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal.  To the extent that a change in the DGCL, whether by statute or judicial
decision, permits greater indemnification than would be afforded currently
under  the Certificate of Incorporation, Bylaws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change.  No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or

 

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otherwise.  The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.

 

(b)                                 To the extent that the Company maintains an
insurance policy or policies providing liability insurance for directors,
officers, employees, or agents or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person serves at the request of the Company, Indemnitee
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any director, officer,
employee, agent or fiduciary under such policy or policies.  If, at the time of
the receipt of a notice of a claim pursuant to the terms hereof, the Company has
director and officer liability insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies.  The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies.

 

(c)                                  In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required
and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights.

 

(d)                                 Except as provided in paragraph (c) above,
the Company shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee
has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.

 

(e)                                  Except as provided in paragraph (c) above,
the Company’s obligation to indemnify or advance Expenses hereunder to
Indemnitee who is or was serving at the request of the Company as a director,
officer, employee or agent of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.

 

9.                                      Exception to Right of Indemnification.
Notwithstanding any provision in this Agreement, the Company shall not be
obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:

 

(a)                                 for which payment has actually been made to
or on behalf of Indemnitee under any insurance policy or other indemnity
provision, except with respect to any excess beyond the amount paid under any
insurance policy or other indemnity provision; or

 

(b)                                 for an accounting of profits made from the
purchase and sale (or sale and purchase) by Indemnitee of securities of the
Company within the meaning of Section 16(b) of the Securities Exchange Act of
1934, as amended, or similar provisions of state statutory law or common law; or

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(c)                                  in connection with any Proceeding (or any
part of any Proceeding) initiated by Indemnitee, including any Proceeding (or
any part of any Proceeding) initiated by Indemnitee against the Company or its
directors, officers, employees or other indemnitees, unless (i) the Board of
Directors of the Company authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law.

 

10.                               Duration of Agreement.  All agreements and
obligations of the Company contained herein shall continue during the period
Indemnitee is an officer or director of the Company (or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Indemnitee shall be subject to any Proceeding (or
any proceeding commenced under Section 7 hereof) by reason of his Corporate
Status, whether or not he is acting or serving in any such capacity at the time
any liability or expense is incurred for which indemnification can be provided
under this Agreement.  This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets
of the Company), assigns, spouses, heirs, executors and personal and legal
representatives.

 

11.                               Security.  To the extent requested by
Indemnitee and approved by the Board of Directors of the Company, the Company
may at any time and from time to time provide security to Indemnitee for the
Company’s obligations hereunder through an irrevocable bank line of credit,
funded trust or other collateral.  Any such security, once provided to
Indemnitee, may not be revoked or released without the prior written consent of
the Indemnitee.

 

12.                               Enforcement.

 

(a)                                 The Company expressly confirms and agrees
that it has entered into this Agreement and assumes the obligations imposed on
it hereby in order to induce Indemnitee to serve as an officer or director of
the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer or director of the Company.

 

(b)                                 This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.

 

13.                               Definitions.  For purposes of this Agreement:

 

(a)                                 “Corporate Status” describes the status of a
person who is or was a director, officer, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that such person is or was serving at the
express written request of the Company.

 

(b)                                 “Disinterested Director” means a director of
the Company who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.

 

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(c)                                  “Enterprise” shall mean the Company and any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise that Indemnitee is or was serving at the express written
request of the Company as a director, officer, employee, agent or fiduciary.

 

(d)                                 “Expenses” shall include all reasonable
attorneys’ fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or
being or preparing to be a witness in a Proceeding, or responding to, or
objecting to, a request to provide discovery in any Proceeding.  Expenses also
shall include Expenses incurred in connection with any appeal resulting from any
Proceeding and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement, including without limitation the premium, security for, and
other costs relating to any cost bond, supersede as bond, or other appeal bond
or its equivalent.  Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

(e)                                  “Independent Counsel” means a law firm, or
a member of a law firm, that is experienced in matters of corporation law and
neither presently is, nor in the past five years has been, retained to
represent:  (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder.  Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.  The Company agrees to pay the
reasonable fees of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

 

(f)                                   “Proceeding” includes any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought by or in the right of the
Company or otherwise and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or
otherwise, by reason of the fact that Indemnitee is or was an officer or
director of the Company, by reason of any action taken by him or of any inaction
on his part while acting as an officer or director of the Company, or by reason
of the fact that he is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other Enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement
to enforce his rights under this Agreement.

 

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14.                               Severability.  The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.  Without limiting the generality of the
foregoing, this Agreement is intended to confer upon Indemnitee indemnification
rights to the fullest extent permitted by applicable laws.  In the event any
provision hereof conflicts with any applicable law, such provision shall be
deemed modified, consistent with the aforementioned intent, to the extent
necessary to resolve such conflict.

 

15.                               Modification and Waiver.  No supplement,
modification, termination or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

16.                               Notice By Indemnitee.  Indemnitee agrees
promptly to notify the Company in writing upon being served with or otherwise
receiving any summons, citation, subpoena, complaint, indictment, information or
other document relating to any Proceeding or matter which may be subject to
indemnification covered hereunder.  The failure to so notify the Company shall
not relieve the Company of any obligation which it may have to Indemnitee under
this Agreement or otherwise unless and only to the extent that such failure or
delay materially prejudices the Company.

 

17.                               Notices.  All notices and other communications
given or made pursuant to this Agreement shall be in writing and shall be deemed
effectively given:  (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed electronic mail or facsimile if sent during normal
business hours of the recipient, and if not so confirmed, then on the next
business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.  All communications shall be
sent:

 

(a)                                 To Indemnitee at the address set forth below
Indemnitee signature hereto.

 

(b)                                 To the Company at:

 

Radius Health, Inc.
201 Broadway, 6th floor

Cambridge, MA  02139

Attention: Chief Executive Officer

 

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

 

18.                               Counterparts.  This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same Agreement.  This Agreement
may also be executed and delivered by facsimile signature and in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

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19.                               Headings.  The headings of the paragraphs of
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

 

20.                               Governing Law and Consent to Jurisdiction. 
This Agreement and the legal relations among the parties shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware, without regard to its conflict of laws rules. The Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Chancery Court of the State of Delaware (the “Delaware Court”), and
not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction
of the Delaware Court for purposes of any action or proceeding arising out of or
in connection with this Agreement, (iii) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (iv) waive,
and agree not to plead or to make, any claim that any such action or proceeding
brought in the Delaware Court has been brought in an improper or inconvenient
forum.

 

SIGNATURE PAGE TO FOLLOW

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.

 

 

 

RADIUS HEALTH, INC.

 

 

 

 

 

By:

 

 

 

Name:

Michael S. Wyzga

 

 

Title:

Chief Executive Officer

 

 

 

 

 

INDEMNITEE

 

 

 

 

 

 

 

Name:

 

 

 

Address:

 

[Signature Page to Indemnification Agreement — Hughes]

 

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