SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (the “Agreement”) is dated as of June 4,
2007, by and between Osteologix, Inc., a Delaware corporation (the “Company”),
Nordic Biotech K/S, a Danish limited partnership (“Nordic”), Goldman Sachs Intl
(“Goldman”), Biotechnology Value Fund, L.P., a limited partnership formed in
Delaware (“Bio Value”), Biotechnology Value Fund II, L.P., a limited partnership
formed in Delaware (“Bio Value II”) BVF Investments LLC, a limited liability
company formed in Delaware (“BVF”) and Investment 10, L.L.C., a limited
liability company formed in Illinois (“Invest 10”) (Nordic, Bio Value, Biovalue
II, BVF and Invest 10 shall individually be referred to herein as a “Purchaser”
and shall be collectively be referred to herein as the “Purchasers”).
 
In consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each of the Purchasers agree as follows:
 

1. Purchase and Sale. On the Closing Date, in accordance with and subject to the
terms and conditions described in this Agreement relating to the offering (the
“Offering”) by the Company of an aggregate of 1,912,877 units (the “Units”),
each consisting of two shares of the Company’s Common Stock, $.0001 par value
per share (the “Common Stock”) and one common stock purchase warrant (a
“Warrant”), for an aggregate purchase price equal to $5,050,000 (the “Aggregate
Subscription Amount”), the Company agrees to sell to each of the Purchasers, and
each of the Purchasers agrees to purchase from the Company, the number of Units
set forth next to such Purchaser’s name of Exhibit A hereto for a purchase price
of $2.64 per Unit. The 3,825,754 shares of Common Stock underlying the Units
shall be referred to herein as the “Shares”. The 1,912,877 common stock purchase
warrants underlying the Units shall be referred to herein as the “Warrants”. The
Warrants shall be in the form attached hereto as Exhibit A. Each Warrant shall
entitle the holder thereof the right to purchase one share of Common Stock (a
“Warrant Share”) at an exercise price equal to $1.20 per share. The Warrants
shall expire on August 31, 2008.
 
Capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in Section 7 hereof.
 
2. Closing, Deliverables and Escrow.
 
(a) Closing. On the Closing Date, each Purchaser shall purchase from the
Company, and the Company shall issue and sell to each Purchaser, the number of
Units set forth next to such Purchaser’s name on Exhibit A hereto, and such
Purchaser shall pay to the Company in consideration for the such Units, the
aggregate purchase price (equal to $2.64 per Unit) set forth next to such
Purchaser’s name on Exhibit A hereto (such amount shall be referred to herein as
such Purchaser’s “Subscription Amount”). On the Closing Date, the Closing shall
occur at the offices of Loeb & Loeb LLP or such other time and location as the
parties shall mutually agree.
 
(b) Deliveries.
 
(1) On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to each of the Purchasers the following:
 

 
i.
this Agreement and the Registration Rights Agreement duly executed by the
Company;

 

 
ii.
a certificate evidencing the Shares registered in the name of each of the
Purchasers;

 

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iii.
the Warrants duly executed by the Company; and

 

 
iv.
the Opinion of Company counsel substantially in the form of Exhibit B, attached
hereto.

 
(2) On or prior to the Closing Date, each of the Purchasers shall deliver or
cause to be delivered to the Company the following:
 

 
i.
this Agreement and, the Registration Rights Agreement duly executed by such
Purchaser; and

 

 
ii.
such Purchaser’s Subscription Amount by wire transfer to an account designated
in writing by the Company.

 
(c) Closing Conditions.
 
(1) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:
 

 
i.
the accuracy in all material respects on the Closing Date of the representations
and warranties of each of the Purchasers contained herein;

 

 
ii.
all obligations, covenants and agreements of each of the Purchasers required to
be performed at or prior to the Closing Date shall have been performed;

 

 
iii.
the delivery by the each of the Purchasers of the items set forth in Section
2(b)(2) of this Agreement; and

 

 
iv.
the delivery by each of the Purchaser of a certificate, executed by an
authorized officer of such Purchaser dated as of the Closing Date, certifying on
behalf of such Purchaser that such Purchaser has satisfied the conditions
specified in Sections 2(c)(1)(i) and (ii).

 
(2) The obligations of each of the Purchasers in connection with the Closing are
subject to the following conditions being met:
 

 
i.
the accuracy in all material respects on the Closing Date of the representations
and warranties of the Company contained herein;

 

 
ii.
all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;

 

 
iii.
the delivery by the Company of the items set forth in Section 2(b)(1) of this
Agreement;

 
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iv.
there shall have been no Material Adverse Effect with respect to the Company
since the date hereof; and

 

 
v.
the delivery by the Company of a certificate, executed by the President of the
Company dated as of the Closing Date, certifying on behalf of the Company that
the Company has satisfied the conditions specified in Sections 2(c)(2)(i), (ii),
(iv) and (vi); and

 

 
vi.
the Aggregate Subscription Amount received and accepted by the Company from all
Purchasers shall be at least Four Million Five Hundred Thousand Dollars
($4,500,000).

 
3. Acceptance of Subscription. The Company shall have no obligation hereunder
until the Company shall execute and deliver to each of the Purchasers an
executed copy of this Agreement. If this subscription is rejected or the
Offering is terminated, in each case, prior to execution and delivery of this
Agreement by the Company, this Agreement and all other documents executed by
each of the Purchasers shall thereafter be of no further force or effect.
 
4. Purchaser Representations and Warranties. Each of the Purchasers hereby
severally, and not jointly with any other Purchaser, represents, warrants,
acknowledges and agrees as of the date hereof and as of the Closing Date to the
Company as follows:
 
(a) Neither the Units, the Shares, the Warrants or the Warrant Shares are
registered under the Securities Act of 1933, as amended (the “Securities Act”),
or any state securities laws and, except as set forth in Section 6A of this
Agreement, the Company has no present or future obligation to register the
Units, the Shares, the Warrants or the Warrant Shares under the Securities Act
or any state securities laws. Such Purchaser understands that the offering and
sale of the Units, the Shares, the Warrants and the Warrant Shares is intended
to be exempt from registration under the Securities Act, by virtue of Section
4(2) thereof and the provisions of Regulation D promulgated thereunder, or not
subject to such requirement, by virtue of Regulation S promulgated under the
Securities Act, based, in part, upon the representations, warranties and
agreements of such Purchaser contained in this Agreement.
 
(b) Such Purchaser has had access to all documents heretofore filed by the
Company with the Commission (the “SEC Reports”) and has received all other
documents requested by such Purchaser. Such Purchaser has carefully reviewed the
SEC Reports and all such other documents and understands the information
contained therein.
 
(c) All documents, records and books pertaining to the investment in the Units,
the Shares, the Warrants and the Warrant Shares have been made available for
inspection by such Purchaser and its representatives. Such Purchaser hereby
acknowledges that all such information is confidential and such Purchaser shall
not disclose any such confidential information to any third party other than as
may be required by law.
 
(d) Such Purchaser has had a reasonable opportunity to ask questions of and
receive answers from a person or persons acting on behalf of the Company
concerning the offering of the Units, the Shares, the Warrants and the Warrant
Shares and the business, financial condition, results of operations and
prospects of the Company, and all such questions have been answered to the full
satisfaction of such Purchaser. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Company’s representations and warranties
contained in this Agreement.
 
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(e) In evaluating the suitability of an investment in the Company, such
Purchaser has not relied upon any representation or other information (oral or
written) other than as stated in this Agreement.
 
(f) Such Purchaser is unaware of, is in no way relying on, and did not become
aware of the Offering through or as a result of, any form of general
solicitation or general advertising as those terms are used in Regulation D
under the Securities Act, including, without limitation, any article, notice,
advertisement or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, in connection with the
Offering and is not subscribing for Units and did not become aware of the
Offering through or as a result of any seminar or meeting to which such
Purchaser was invited by, or any solicitation of a subscription by, a person not
previously known to such Purchaser.
 
(g) Such Purchaser has taken no action which would give rise to any claim by any
person for brokerage commissions, finders’ fees or the like relating to this
Agreement or the transactions contemplated hereby.
 
(h) Such Purchaser has such knowledge and experience in financial, tax, and
business matters, and, in particular, investments in securities similar to the
Units, the Shares, the Warrants and the Warrant Shares so as to enable such
Purchaser to utilize the information made available to it in connection with the
Offering to evaluate the merits and risks of an investment in the Units, the
Shares, the Warrants and the Warrant Shares and the Company and to make an
informed investment decision with respect thereto.
 
(i) Such Purchaser is not relying on the Company or any of its employees,
officers or agents with respect to the legal, tax, economic and related
considerations as to an investment in the Units, the Shares, the Warrants and
the Warrant Shares and such Purchaser has relied on the advice of, or has
consulted with, only his own advisors.
 
(j) Such Purchaser is acquiring the Units, the Shares, the Warrants and the
Warrant Shares solely for such Purchaser's own account for investment and not
with a view to resale, assignment or distribution thereof, in whole or in part
in violation of the Securities Act or any applicable state securities laws. Such
Purchaser has no agreement or arrangement, formal or informal, with any person
to sell or transfer all or any part of the Units, the Shares, the Warrants or
the Warrant Shares in violation of the Securities Act or any state securities
laws and such Purchaser has no plans to enter into any such agreement or
arrangement. Such Purchaser will not engage in hedging transactions with respect
to the Units, the Shares, the Warrants or the Warrant Shares unless in
compliance with the registration requirements of the Securities Act.
 
(k) Such Purchaser must bear the substantial economic risks of the investment in
the Units, the Shares, the Warrants and the Warrant Shares indefinitely because
none of the Units, the Shares, the Warrants and the Warrant Shares may be sold,
hypothecated or otherwise disposed of unless subsequently registered under the
Securities Act and applicable state securities laws or an exemption from such
registration is available. Subject to the terms hereunder, legends shall be
placed on the Units, the Shares, the Warrants and the Warrant Shares to the
effect that they have not been registered under the Securities Act or applicable
state securities laws and appropriate notations thereof will be made in the
Company’s stock books.
 
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(l) Such Purchaser has adequate means of providing for its current financial
needs and foreseeable contingencies and has no need for liquidity of the
investment in the Units, the Shares, the Warrants and the Warrant Shares for an
indefinite period of time.
 
(m) Such Purchaser (i) meets the requirements of the suitability standards for
an “accredited investor” because such Purchaser is a corporation, partnership,
limited liability company, limited liability partnership, other entity or
similar business trust, not formed for the specific purpose of acquiring the
Units, with total assets excess of $5,000,000 or (ii) is a “non-US Person” that
is a “qualified investor” as defined in the European Union Prospective
Directive. Such Purchaser further represents and warrants that it will notify
and supply corrective information to the Company immediately upon the occurrence
of any change occurring prior to the Company's issuance of the Units, the
Shares, the Warrants and the Warrant Shares that renders the representation made
in the immediately preceding sentence. Such Purchaser represents to the Company
that any information which the undersigned has heretofore furnished under this
Section 4(m) or furnishes to the Company pursuant to this Section 4(m) is
complete and accurate and may be relied upon by the Company in determining the
availability of an exemption from registration under Federal and state
securities laws in connection with the Offering.
 
(n) Such Purchaser represents that it is a corporation, partnership, limited
liability company or partnership, association, joint stock company, trust,
unincorporated organization or other entity, and that (A) such Purchaser was not
formed for the specific purpose of acquiring the Units, (B) such Purchaser is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (C) the consummation of the transactions
contemplated hereby is authorized by, and will not result in a violation of law
or the charter or other organizational documents of such Purchaser, (D) such
Purchaser has full power and authority to execute and deliver this Agreement and
all other related agreements or certificates and to carry out the provisions
hereof and thereof and to purchase and hold the Units, the Shares, the Warrants
and the Warrant Shares, (E) the execution and delivery of this Agreement has
been duly authorized by all necessary action of such Purchaser, (F) this
Agreement has been duly executed and delivered on behalf of such Purchaser and
constitutes a legal, valid and binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with its terms subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally and general
principles of equity and (G) the execution and delivery of this Agreement by
such Purchaser will not violate or be in conflict with any order, judgment,
injunction, agreement or controlling document to which such Purchaser is a party
or by which such Purchaser is bound.
 
(o) Such Purchaser is able to bear the economic risk of an investment in the
Units, the Shares, the Warrants and the Warrant Shares and, at the present time,
has a sufficient net worth to sustain a complete loss of such investment in the
Company in the event such a loss should occur. Such Purchaser’s overall
commitment to investments which are not readily marketable is not excessive in
view of its net worth and financial circumstances and the purchase of the Units
will not cause such commitment to become excessive.
 
(p) THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM, OR IN TRANSACTIONS NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES
OFFERED HEREBY MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
 
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(q) Such Purchaser should check the Office of Foreign Assets Control (“OFAC”)
website at <http://www.treas.gov/ofac> before making the following
representations. Such Purchaser represents that the amounts invested by it in
the Company in the Offering were not and are not directly or indirectly derived
from activities that contravene federal, state or international laws and
regulations, including anti-money laundering laws and regulations. Federal
regulations and Executive Orders administered by OFAC prohibit, among other
things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals. The lists of
OFAC prohibited countries, territories, persons and entities can be found on the
OFAC website at <http://www.treas.gov/ofac>. In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 
or entities in certain countries regardless of whether such individuals or
entities appear on the OFAC lists.
 
(r) To such Purchaser’s knowledge, none of: (1) such Purchaser, (2) any person
controlling or controlled by such Purchaser, (3) if such Purchaser is a
privately-held entity, any person having a beneficial interest in such
Purchaser, or (4) any person for whom such Purchaser is acting as agent or
nominee in connection with this investment is a country, territory, individual
or entity named on an OFAC list, or a person or entity prohibited under the OFAC
Programs. Please be advised that the Company may not accept any amounts from a
prospective investor if such prospective investor cannot make the representation
set forth in the preceding paragraph. Such Purchaser agrees to promptly notify
the Company should such Purchaser become aware of any change in the information
set forth in Sections 4(r) - (t) these representations. Such Purchaser
understands and acknowledges that, by law, the Company may be obligated to
“freeze the account” of such Purchaser, either by prohibiting additional
subscriptions from such Purchaser, declining any redemption requests and/or
segregating the assets in the account in compliance with governmental
regulations. Such Purchaser further acknowledges that the Company may, by
written notice to such Purchaser, suspend the redemption rights, if any, of such
Purchaser if the Company reasonably deems it necessary to do so to comply with
anti-money laundering regulations applicable to the Company or any of the
Company’s other service providers. These individuals include specially
designated nationals, specially designated narcotics traffickers and other
parties subject to OFAC sanctions and embargo programs.
 
(s) To such Purchaser’s knowledge, none of: (1) such Purchaser, (2) any person
controlling or controlled by such Purchaser, (3) if such Purchaser is a
privately-held entity, any person having a beneficial interest in such
Purchaser, or (4) any person for whom such Purchaser is acting as agent or
nominee in connection with this investment is a senior foreign political
figure2 , or any immediate family3  member or close associate4  of a senior
foreign political figure, as such terms are defined in the footnotes below.
 

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1 These individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.
 
2 A “senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.
 
3 “Immediate family” of a senior foreign political figure typically includes the
figure’s parents, siblings, spouse, children and in-laws.
 
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(t) If such Purchaser is affiliated with a non-U.S. banking institution (a
“Foreign Bank”), or if such Purchaser receives deposits from, makes payments on
behalf of, or handles other financial transactions related to a Foreign Bank,
such Purchaser represents and warrants to the Company that: (1) the Foreign Bank
has a fixed address, other than solely an electronic address, in a country in
which the Foreign Bank is authorized to conduct banking activities, (2) the
Foreign Bank maintains operating records related to its banking activities, (3)
the Foreign Bank is subject to inspection by the banking authority that licensed
the Foreign Bank to conduct banking activities, and (4) the Foreign Bank does
not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated affiliate.
 
5. Company Representations and Warranties. The Company hereby represents,
warrants, acknowledges and agrees as of the date hereof and as of the Closing
Date to such Purchaser as follows:
 
(a) Subsidiaries. Except as disclosed in the SEC Reports, the Company has no
direct or indirect subsidiaries.
 
(b) Organization and Qualification. The Company is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of
the State of Delaware, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is not in violation of any of the provisions of its Certificate of
Incorporation or By-Laws.
 
(c) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the Offering. The execution and
delivery of this Agreement, the Registration Rights Agreement and the Warrants
by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further consent or action is required by the Company,
other than the Required Approvals (as defined below). This Agreement, the
Registration Rights Agreement and the Warrants, when executed and delivered in
accordance with the terms hereof, will each constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and general principles of equity.
 
(d) No Conflicts. The execution, delivery and performance of this Agreement, the
Registration Rights Agreement and the Warrants by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
do not and will not: (i) conflict with or violate any provision of the Company’s
Certificate of Incorporation or By-Laws, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice or lapse of time or both)
of, any agreement, credit facility, debt or other instrument (evidencing a
Company debt or otherwise) or other understanding to which the Company is a
party or by which any material property or asset of the Company is bound or
affected, or (iii) subject to obtaining the Required Approvals (as defined
below), result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
as currently in effect to which the Company is subject (including federal and
state securities laws and regulations), or by which any material property or
asset of the Company is bound or affected; except in the case of each of clauses
(ii) and (iii), such as could not, individually or in the aggregate (a)
adversely affect the legality, validity or enforceability of the Offering, (b)
have or result in a material adverse effect on the results of operations,
assets, prospects, business or condition (financial or otherwise) of the
Company, taken as a whole, or (c) adversely impair the Company's ability to
perform fully on a timely basis its obligations under this Agreement (any of
(a), (b) or (c), a “Material Adverse Effect”); provided, however, that,
notwithstanding the foregoing, the parties agree that no change in the market
price of the Company’s Common Stock shall be deemed to be a Material Adverse
Effect for purposes of this Agreement
 

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4 A “close associate” of a senior foreign political figure is a person who is
widely and publicly known to maintain an unusually close relationship with the
senior foreign political figure, and includes a person who is in a position to
conduct substantial domestic and international financial transactions on behalf
of the senior foreign political figure.
 
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(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement, the Registration
Rights Agreement and the Warrants other than (i) the filing with the Commission
of the registration statement required to be filed by the Company pursuant to
the Registration Rights Agreement, (ii) the filing with the Commission of a Form
D pursuant to Regulation D under the Securities Act and (iii) applicable Blue
Sky filings (collectively, the “Required Approvals”).
 
(f) Issuance of the Shares. The Shares and Warrant Shares are duly authorized
and, when issued and paid for in accordance with this Agreement, will be duly
and validly issued, fully paid and nonassessable, free and clear of all Liens.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section 4, no registration under the Securities Act is required for the
offer and sale of the Units, the Shares, the Warrants and the Warrant Shares by
the Company to each of the Purchasers as contemplated hereby. No shareholder
approval is required for the Company to fulfill its obligations pursuant to this
Agreement, the Registration Rights Agreement or the Warrants. As of the Closing,
the Company will have reserved from its duly authorized capital stock the
maximum number of shares of Common Stock issuable pursuant to this Agreement and
the Warrants.
 
(g) Capitalization. The number of shares of Common Stock and type of all
authorized, issued and outstanding capital stock of the Company is as set forth
in the SEC Reports. Except as set forth in each of the Subscription Agreements
dated May 24, 2006 between the Company and the respective Subscribers named
therein (the “Initial Subscription Agreements”), no Person has any right of
first refusal, preemptive right, right of participation, or any similar right to
participate in the Offering. Except as a result of the purchase and sale of the
Units which may be issued in connection with this Offering and, except as
described in the SEC Reports, there are no outstanding options, warrants, script
rights to subscribe to, calls or commitments of any character whatsoever
relating to shares of Common Stock, or, rights or obligations convertible into
or exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional
shares of Common Stock or rights convertible or exchangeable into shares of
Common Stock. The issuance and sale of the Units will not obligate the Company
to issue shares of Common Stock, or Units to any Person (other than the
Purchasers) and will not result in a right of any holder of Company equity to
adjust the exercise, conversion, exchange or reset price under any outstanding
securities. All of the outstanding shares of capital stock of the Company issued
on and after May 24, 2006 are validly issued, fully paid and non-assessable,
have been issued in compliance with federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.
 
(h) SEC Reports; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Securities Act and the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for
the two years preceding the date hereof (or such shorter period as the Company
was required by law to file such material) (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) on a timely basis. As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Reports have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended.
 
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(i) Material Changes. Except for the proposed Offering or as otherwise described
in the SEC Reports, since the date of the latest financial statements included
in the SEC Reports: (i) there has been no event, occurrence or development that
has had or could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice, and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders except in the ordinary course of
business consistent with prior practice, or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock except
consistent with prior practice or pursuant to existing Company stock option or
similar plans, and (v) the Company has not issued any equity shares to any
officer, director or affiliate, except pursuant to existing Company stock option
or similar plans.
 
(j) Litigation. Except as disclosed in the SEC Reports, there is no action,
suit, inquiry, notice of violation, Proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Company or its
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which: (i) adversely affects or challenges the
legality, validity or enforceability of this Agreement, the Registration Rights
Agreement, the Warrants or the Offering or (ii) could, if there were an
unfavorable decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect. The Company is not nor has it
ever been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company. The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act.
 
(k) Compliance. Except as disclosed in the SEC Reports, the Company: (i) is not
in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company under), nor has the Company received notice of a claim that it is in
default under or that it is in violation of, any material indenture, loan or
credit agreement or any other material agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), which default or violation would have or
result in a Material Adverse Effect, (ii) is not in violation of any order of
any court, arbitrator or governmental body, and (iii) is not and has not been in
violation of any statute, rule or regulation of any governmental authority,
except in each case as would not, individually or in the aggregate, have or
result in a Material Adverse Effect.
 
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(l) Regulatory Permits. Except as otherwise described in the SEC Reports, the
Company possesses or has applied for all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its business as described in the SEC Reports,
except where the failure to possess such permits would not, individually or in
the aggregate, have a Material Adverse Effect (“Material Permits”), and the
Company has not received any notice of Proceedings relating to the revocation or
modification of any Material Permit.
 
(m) Title to Assets. The Company and its subsidiaries have title in fee simple
to all real property owned by them that is material to the business of the
Company and its subsidiaries and title in all personal property owned by them
that is material to the business of the Company and its subsidiaries, in each
case free and clear of all Liens, except for Liens as do not materially affect
the value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries and
Liens for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company or its subsidiaries is held by them under valid
leases of which the Company and its subsidiaries are in compliance, except as
would not have a Material Adverse Effect.
 
(n) Patents and Trademarks. The Company and its subsidiaries either own, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have or could reasonably be expected to result in a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). The Company and its
subsidiaries have not (i) received a written notice that the Intellectual
Property Rights owned or used by the Company or its subsidiaries violates or
infringes upon the rights of any Person, or (ii) received a written invitation
to license any intellectual property rights of any Person in order to avoid such
a violation or infringement. To the knowledge of the Company, there is no
existing infringement of any of the Intellectual Property Rights by any Person.
 
(o) Insurance. The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks, including,
without limitation, products liability, and in such amounts as are prudent and
customary in the businesses in which the Company and its subsidiaries are
engaged. Neither the Company nor any of its subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business on terms consistent with market for
the Company’s and each of its subsidiary’s respective lines of business.
 
(p) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are
applicable to it. The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s most recently
filed periodic report under the Exchange Act, as the case may be, is being
prepared. The Company presented in its most recent periodic report filed with
the Commission, the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures. The Company’s
certifying officers have evaluated the effectiveness of the Company’s controls
and procedures as of March 31, 2007 (the “Evaluation Date”). Since the
Evaluation Date, there have been no significant changes in the Company’s
internal controls (as such term is defined in Item 307 of Regulation S-B under
the Exchange Act) or, to the knowledge of the Company, in other factors that
could significantly affect the Company’s internal controls.
 
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(q) Lack of Publicity. None of the Company, its subsidiaries or any person
acting on its or their behalf have engaged or will engage in any form of general
solicitation or general advertising as those terms are used in Regulation D
under the Securities Act in the United States with respect to the Units, the
Shares, the Warrants or the Warrant Shares, including, without limitation, any
article, notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio,
regarding the offering, nor did any such person sponsor any seminar or meeting
to which potential investors were invited by, or any solicitation of a
subscription by, a person not previously known to such investor in connection
with investments in the Units, the Shares, the Warrants or the Warrant Shares
generally. None of the Company, its subsidiaries or any person acting on its or
their behalf have engaged or will engage in any form of directed selling efforts
(as that term is used in Regulation S under the Securities Act) with respect to
the Units, the Shares, the Warrants or the Warrant Shares.
 
(r) Certain Fees. No brokerage commissions, finder’s fees or the like are or
will be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement other than pursuant to the
Placement Agency Agreement dated December 14, 2005 among Osteologix Inc., a
Georgia corporation, Rodman & Renshaw LLC and Roth Capital Partners LLC.
 
(s) Registration Rights. Other than pursuant to the Registration Rights
Agreement dated as of May 24, 2006 by and among Osteologix, Inc., a Georgia
corporation, Castle & Morgan Holdings Inc. and the purchasers signatory thereto
and other than the Purchasers, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the
Company.
 
(t) Solvency. Based on the financial condition of the Company as of the Closing
Date after giving effect to the receipt by the Company of the proceeds from the
sale of the Shares hereunder, (i) the Company’s fair saleable value of its
assets exceeds the amount that will be required to be paid on or in respect of
the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts are
required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date. The SEC Reports
set forth as of the dates thereof all outstanding secured and unsecured
Indebtedness of the Company or any of its subsidiaries, or for which the Company
or any of its subsidiaries has commitments. For the purposes of this Agreement,
“Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed
in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (b) all guaranties, endorsements and other contingent
obligations in respect of Indebtedness of others, whether or not the same are or
should be reflected in the Company’s balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (c)
the present value of any lease payments in excess of $50,000 due under leases
required to be capitalized in accordance with GAAP. Neither the Company nor any
of its subsidiaries is in default with respect to any Indebtedness.
 
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(u) Tax Status. Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each of its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns or have timely filed
for valid extensions to the filing deadlines applicable to them with respect to
such taxes and has paid or accrued all taxes shown as due thereon, and the
Company has no knowledge of a tax deficiency which has been asserted or
threatened against the Company or any of its subsidiaries.
 
(v) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
 
(w) Shareholders Rights Plan; Investment Company Act. No claim will be made or
enforced by the Company that any of the Purchasers is an “Acquiring Person”
under any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Units, Shares, Warrants or Warrant Shares. The Company is not, and is not an
Affiliate of, and immediately after receipt of payment for the Units, will not
be or be an Affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “Investment Company Act”).
 
(x) Disclosure. The disclosure provided to each of the Purchasers regarding the
Company, its business and the transactions contemplated hereby, furnished by or
on behalf of the Company, including the SEC Reports and any Disclosure Schedules
furnished by the Company with respect to the representations and warranties made
herein does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
 
(y) SB-2 Registration Statement. The Company is eligible to use Form SB-2 to
register the Registrable Securities (as such term is defined in the Registration
Rights Agreement) for sale by certain of the Purchasers as contemplated by the
Registration Rights Agreement.
 
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6. Covenants of the Purchasers and the Company.
 
(a) Transfer Restrictions.
 
(1) The Units, the Shares, the Warrants and the Warrant Shares may only be
disposed of in compliance with state and federal securities laws. In connection
with any transfer of such securities (or hedging activities involving such
securities) other than pursuant to an effective registration statement or Rule
144, to the Company or to an affiliate of any Purchaser or in connection with a
pledge as contemplated below, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred securities under the
Securities Act. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement.
 
(2) Each of the Purchasers agrees to the imprinting, so long as is required by
this Section 6(a), of a legend on any of the Units, the Shares, the Warrants and
the Warrant Shares in the following form:
 
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. ADDITIONALLY, HEDGING TRANSACTIONS IN RESPECT OF THESE SECURITIES MUST
BE EFFECTED IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, IF APPLICABLE. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
(3) Certificates evidencing Shares, the Warrants and the Warrant Shares shall
not contain any legend (including the legend set forth in Section 6(a)(2)): (i)
following the resale of the Units or such Shares, Warrants and/or Warrant Shares
pursuant to an effective registration statement under the Securities Act
covering the resale of such Shares, or (ii) following any resale of the Units or
such Shares, Warrants or Warrant Shares pursuant to Rule 144, or (iii) if the
Units or such Shares, Warrants or Warrant Shares are eligible for resale under
Rule 144(k), or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the Commission. The Company agrees that
following the time when a legend is no longer required under this Section
6(a)(3), it will, no later than five (5) Trading Days following the delivery by
a Purchaser to the Company or the Company's transfer agent of a certificate
representing Shares, Warrants or Warrant Shares issued with a restrictive legend
(such date, the “Legend Removal Date”), deliver or cause to be delivered to such
Purchaser or such Purchaser’s transferee, as applicable, a certificate
representing such Shares, Warrants or Warrant Shares that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section. Notwithstanding anything
to the contrary contained herein, the Company shall not be required to effect a
removal of a restrictive legend to the extent such legend is required under
applicable requirements of the Securities Act, including any rule of the
Commission promulgated thereunder, and judicial interpretations thereof.
 
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(4) Each of the Purchasers, agrees that the removal of the restrictive legend
from certificates representing Shares, Warrants and Warrant Shares as set forth
in this Section 6(a)(3)(i) or (ii) is predicated upon the Company’s reliance
that such Purchaser will sell any Units, Shares, Warrants and Warrant Shares
pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption
therefrom.
 
(b) Furnishing of Information. As long as any Purchaser owns any Units, Shares,
Warrants or Warrant Shares, the Company covenants to timely file all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. If the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to such Purchaser and make publicly
available in accordance with Rule 144(c) such information as is required for
such Purchaser to sell the Units, Shares, Warrants and Warrant Shares under Rule
144. The Company further covenants that it will take such further action as the
Purchasers may reasonably request, all to the extent required from time to time
to enable the Purchasers to sell such Units, Shares, Warrants and Warrant Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.
 
(c) Integration. The Company shall not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer or sale of the
Shares, in a manner that would require the registration under the Securities Act
of the sale of the Units, the Shares, the Warrants or the Warrant Shares to the
Purchasers. The Company shall conduct its business in a manner so that it will
not become subject to registration under the Investment Company Act.
 
(d) Disclosure; Publicity. No Purchaser shall issue any press release or
otherwise make any such public statement with respect to the transactions
contemplated hereby without the prior consent of the Company, except if such
disclosure is required by law, in which case such Purchaser shall promptly
provide the Company with prior written notice of such public statement or
communication. The Company shall not publicly disclose the name of any
Purchaser, or include the name of such Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except (i) as required by federal securities law in
connection with the registration statement contemplated by Section 6A of this
Agreement and (ii) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide such Purchaser with
prior notice of such disclosure permitted under sub clause (i) or (ii).
 
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(e) Indemnification of Purchasers. Subject to the provisions of this Section
6(e), the Company will indemnify and hold each Purchaser and its respective
directors, officers, shareholders, partners, members, employees and agents
(each, a “Purchaser Party”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’
fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (i) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or (ii) any action instituted against any Purchasers, Purchaser Party
or their respective Affiliates, by any stockholder of the Company or other
person who is not an Affiliate of any such Purchaser, with respect to any of the
transactions contemplated by this Agreement (unless such action is based upon a
breach of such Purchaser’s representation, warranties or covenants under this
Agreement or any agreements or understandings such Purchaser may have with any
such stockholder or any violations by such Purchaser of state or federal
securities laws). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing. Any Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Purchaser Party except
to the extent that (A) the employment thereof has been specifically authorized
by the Company in writing; (B) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel reasonably acceptable to
such Purchaser Party or (C) in such action there is, in the reasonable opinion
of such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party. The Company
will not be liable to any Purchaser Party under this Agreement (I) for any
settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld, conditioned or delayed; or
(II) to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser in
this Agreement..
 
(f) Indemnification of Company. Subject to the provisions of this Section 6(f),
each Purchaser, will indemnify and hold the Company and its directors, officers,
shareholders, partners, members, employees and agents (each, a “Company Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Company Party may suffer or incur as a result of or
relating to (i) any breach of any of the representations, warranties, covenants
or agreements made by such Purchaser in this Agreement or (ii) any action
instituted against the Company, or any Company Party or their respective
Affiliates, by any stockholder of the Company or other person, with respect to
any of the transactions contemplated by this Agreement if such action is based
upon a breach of the representation, warranties or covenants of such Purchaser
under this Agreement or any violation by such Purchaser of state or federal
securities laws. If any action shall be brought against any Company Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Company Party shall promptly notify the applicable Purchaser in writing, and
such Purchaser shall have the right to assume the defense thereof with counsel
of its own choosing. Any Company Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Company Party
except to the extent that (A) the employment thereof has been specifically
authorized by such Purchaser in writing; (B) such Purchaser has failed after a
reasonable period of time to assume such defense and to employ counsel
reasonably acceptable to such Company Party or (C) in such action there is, in
the reasonable opinion of such separate counsel, a material conflict on any
material issue between the position of such Purchaser and the position of such
Company Party. No Purchaser will be liable to any Company Party under this
Agreement (I) for any settlement by a Company Party effected without such
Purchaser’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed; or (II) to the extent, but only to the extent that a
loss, claim, damage or liability is attributable to any Company Party’s breach
of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement.
 
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7. Definitions. In addition to the terms defined elsewhere in this Agreement:
the following terms have the meanings indicated in this Section 7:
 
(a) “Affiliate” means any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144 under the
Securities Act. With respect to each Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such Purchaser.
 
(b) “Business Day” means any day except Saturday, Sunday and any day which shall
be a Federal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other governmental action to close.
 
(c) “Closing Date” means June 6, 2007 or such later Trading Day when this
Agreement and the Warrants have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers respective
obligations to pay their respective Subscription Amounts have been satisfied or
waived and (ii) the Company’s obligations to deliver the Units have been
satisfied or waived.
 
(d) “Commission” means the Securities and Exchange Commission..
 
(e) “Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
 
(f) “Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
 
(g) “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition)..
 
(h) “Registration Rights Agreement” shall mean that certain Registration Rights
Agreement dated as of June 4, 2007 by and among the Company and certain of the
Purchasers who are parties thereto.
 
(i) “Registrable Securities” shall have the meaning set forth in the
Registration Rights Agreement.
 
(j) “Subscription Amount” shall mean, with respect to each Purchaser, the amount
set forth next to such Purchaser’s name on Exhibit A hereto.
 
(k) “Trading Market” means the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the
American Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market,
the Nasdaq Global Select Market, the Nasdaq Capital Market or the OTC Bulletin
Board.
 
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8. Successors and Assigns. Each of the Purchasers hereby acknowledges and agrees
that this Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
 
9. Modification. This Agreement shall not be modified or waived except by an
instrument in writing signed by the party against whom any such modification or
waiver is sought.
 
10. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, sent by nationwide overnight courier or delivered against
receipt to the party to whom it is to be given (a) if to Company, at the address
set forth above, or (b) if to any of the Purchasers, at the respective addresses
set forth on the signature page hereof (or, in either case, to such other
address as the party shall have furnished in writing in accordance with the
provisions of this Section). Any notice or other communication given by
certified mail shall be deemed given at the time that it is signed for by the
recipient except for a notice changing a party's address which shall be deemed
given at the time of receipt thereof. Any notice or other communication given by
nationwide overnight courier shall be deemed given the next business day
following being deposited with such courier.
 
11. Assignability. Except as otherwise provided in this Agreement, this
Agreement and the rights, interests and obligations hereunder are not
transferable or assignable by any Purchaser. This Agreement and the rights,
interests and obligations hereunder are not transferable or assignable by the
Company.
 
12. Applicable Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the Warrants shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law
thereof, except to the extent that the application of the General Corporation
Law of the State of Delaware is mandatory applicable. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Agreement and the Warrants), and hereby irrevocably
waives, and agrees not to assert in any suit, action or Proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or Proceeding is improper or inconvenient venue for such
Proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or Proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The parties hereby waive to the fullest extent permitted by
applicable law, all rights to a trial by jury in any legal proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby. If
either party shall commence an action or Proceeding to enforce any provisions of
this Agreement and/or the Warrants, then the prevailing party in such action or
Proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or Proceeding.
 
13. Use of Pronouns. All pronouns and any variations thereof used herein shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons referred to may require.
 
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14. Miscellaneous.
 
(a) This Agreement and its exhibits and schedules constitutes the entire
agreement between the Purchasers and the Company with respect to the subject
matter hereof and supersedes all prior oral or written agreements and
understandings, if any, relating to the subject matter hereof. The terms and
provisions of this Agreement may be waived, or consent for the departure
therefrom granted, only by a written document executed by the party entitled to
the benefits of such terms or provisions.
 
(b) The respective covenants, agreements, representations and warranties made in
this Agreement by each of the Purchasers and the Company shall survive the
execution and delivery hereof and delivery of the Units, the Shares, the
Warrants and the Warrant Shares.
 
(c) At the Closing, the Company shall reimburse Nordic up to $25,000 for its
actual, out-of-pocket legal fees and expenses related to the transactions
contemplated by this Agreement. At the Closing, the Company shall reimburse BVF
Partners, L.P. up to $12,000 for its actual out-of-pocket legal fees and
expenses related to the transactions contemplated by this Agreement. Except as
expressly set forth in this Agreement to the contrary, each of the parties
hereto shall pay its own fees and expenses (including the fees of any attorneys,
accountants, appraisers or others engaged by such party) in connection with this
Agreement and the transactions contemplated hereby whether or not the
transactions contemplated hereby are consummated. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Units, Shares, Warrants or Warrant Shares.
 
(d) This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
 
(e) Each provision of this Agreement shall be considered separable and, if for
any reason any provision or provisions hereof are determined to be invalid or
contrary to applicable law, such invalidity or illegality shall not impair the
operation of or affect the remaining portions of this Agreement.
 
(f) Section titles are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.
 
(g) The Company acknowledges that the obligations of each Purchaser under this
Agreement are several and not joint with the obligations of any other Purchaser,
and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under this Agreement. The decision of each
Purchaser to enter into this Agreement has been made by such Purchaser
independently of any other Purchaser. The Company further acknowledges that
nothing contained in this Agreement, and no action taken by any Purchaser
pursuant hereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture of any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated hereby. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been represented by
its own separate legal counsel in their review and negotiation of this Agreement
and with respect to the transactions contemplated hereby. The Company has
elected to provide all Purchasers with the same terms and Agreement for the
convenience of the Company and not because it was required or requested to do so
by the Purchasers. The Company acknowledges that such procedure with respect to
this Agreement in no way creates a presumption that the Purchasers are in any
way acting in concert or as a group with respect to this Agreement or the
transactions contemplated hereby or thereby.
 
18

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

     
OSTEOLOGIX, INC.
         
By: 

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Name: Philip Young
Title: Chief Executive Officer
               
PURCHASERS:
 
ADDRESS FOR NOTICE
           
NORDIC BIOTECH K/S
 
c/o Nordic Biotech Advisors
   
Ostergade 5, 3rd Floor
By: 

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Name:
Title:
 
DK-1100 Copenhagen K
Denmark
           
BIOTECHNOLOGY VALUE FUND, L.P.
 
One Sansome Street, 39th Floor
By: BVF Partners, L.P., its general partner
By: BVF, Inc., its general partner
 
San Francisco, CA 94104
   
Attention: Matthew Perry
By:     
   

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Mark N. Lampert
   
President
       
With a copy to:
     
BIOTECHNOLOGY VALUE FUND II, L.P.
 
Jonathan D. Joseph, Esq.
By: BVF Partners L.P., general partner
 
3629 25th Street
By: BVF, Inc., general partner
 
San Francisco, CA 94110
     
By:     
   

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Mark N. Lampert
   
President
               
BVF INVESTMENTS, L.L.C.
   
By: BVF Partners L.P., its manager
   
By: BVF, Inc., its general partner
         
By:     
   

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

Mark N. Lampert
   
President
   

 
19

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INVESTMENT 10, L.L.C.
   
By: BVF Partners L.P., its attorney-in-fact
   
By: BVF, Inc., its general partner
         
By:     
   

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Mark N. Lampert
   
President
               
Goldman Sachs Intl
         
By:
   

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

Name:
   
Title:
   

 
20

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Investor Certification

NAME OF INVESTOR: ___________________________

Initial or Check the appropriate item(s)
 
US INVESTORS - The undersigned further represents and warrants as indicated
below by the undersigned’s initials:
 

A.
Individual investors: (Please initial one or more of the following statements)

 

1.____
I certify that I am an accredited investor because I have had individual income
(exclusive of any income earned by my spouse) of more than $200,000 in each of
the most recent two years and I reasonably expect to have an individual income
in excess of $200,000 for the current year.

 

2.____
I certify that I am an accredited investor because I have had joint income with
my spouse in excess of $300,000 in each of the most recent two years and
reasonably expect to have joint income with my spouse in excess of $300,000 for
the current year.

 

3.____
I certify that I am an accredited investor because I have an individual net
worth, or my spouse and I have a joint net worth, in excess of $1,000,000.

 

4.____
I am a director or executive officer of Osteologix, Inc.

 

5.____
I have individual net worth or my spouse and I have joint net worth of over
$5,000,000.

 
B.____
Partnerships, corporations, trusts or other entities: (Please initial one of the
following seven statements). The undersigned hereby certifies that it is an
accredited investor because it is:

 
1.____
an employee benefit plan whose total assets exceed $5,000,000;

 
2.____
an employee benefit plan whose investments decisions are made by a plan
fiduciary which is either a bank, savings and loan association or an insurance
company (as defined in Section 3(a) of the Securities Act) or an investment
adviser registered as such under the Investment Advisers Act of 1940;

 
3.____
a self-directed employee benefit plan, including an Individual Retirement
Account, with investment decisions made solely by persons that are accredited
investors;

 
4.____
an organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, not formed for the specific purpose of acquiring the Units,
with total assets in excess of $5,000,000;

 
5.____
a corporation, partnership, limited liability company, limited liability
partnership, other entity or similar business trust, not formed for the specific
purpose of acquiring the Units, with total assets excess of $5,000,000;

 
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6.____
a trust, not formed for the specific purpose of acquiring the Units, with total
assets exceed $5,000,000, whose purchase is directed by a person who has such
knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of an investment in the Units; or

 
7.____
an entity (including a revocable grantor trust but other than a conventional
trust) in which each of the equity owners qualifies as an accredited investor.

 
NON-US INVESTORS - The undersigned further represents and warrants as indicated
below by the undersigned’s initials:
 

A.
Please initial the following statement:

 

1.____
I certify that I am not a “U.S. person” (as defined in Regulation S) or
purchasing for the account or benefit of a “U.S. person” and am purchasing Units
in an “offshore transaction” in accordance with Regulation S and am a “qualified
investor” as defined in the European Union Prospectus Directive.

 
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