Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of February 28,
2012, is made by and among HORIZON PHARMA, INC., a Delaware corporation (the
“Company”), the Purchasers listed on Exhibit A hereto, together with their
permitted transferees (each, a “Purchaser” and collectively, the “Purchasers”)
and, solely with respect to Article 6 and Section 8.5, the warrant holders
listed on Exhibit B hereto, together with their permitted transferees (each a
“Warrant Holder” and collectively, the “Warrant Holders”).

RECITALS:

A. The Company and the Purchasers are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act.

B. The Purchasers, severally and not jointly, desire to purchase and the Company
desires to sell, upon the terms and conditions stated in this Agreement, up to a
maximum of $50,820,003.34 of Common Stock and warrants to purchase Common Stock
of the Company.

C. The Warrant Holders hold certain warrants issued on February 22, 2012 to
purchase up to an aggregate of 3,277,191 shares of Common Stock (the “Debt
Warrants”).

D. The capitalized terms used herein and not otherwise defined have the meanings
given them in Article 7.

AGREEMENT

In consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company, the Purchasers (severally and not jointly)
and, solely with respect to Article 6, the Warrant Holders (severally and not
jointly) hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF SECURITIES

1.1 Purchase and Sale of Securities. At the Closing, the Company will issue and
sell to each Purchaser, and each Purchaser will, severally and not jointly,
purchase from the Company the number of shares of Common Stock (the “Shares”)
and the number of warrants (the “Warrants”) to purchase shares of Common Stock
set forth opposite such Purchaser’s name on Exhibit A hereto (the Shares and
Warrants referred to collectively as the “Securities”). The purchase price for
each Security shall be $3.62125 (the “Purchase Price”), which is the sum of
(i) $3.59 (the “Stock Purchase Price”), the consolidated closing bid price of
the Common Stock as reported on Nasdaq (symbol “HZNP”) on the date of this
Agreement, and (ii) $0.03125. For each Share purchased by a Purchaser, such
Purchaser shall receive a Warrant to purchase 0.25 of a share of Common Stock at
an exercise price per share equal to $4.308 pursuant to a Warrant substantially
in the form attached as Exhibit C hereto.

1.2 Payment. At the Closing, each Purchaser will pay the aggregate Purchase
Price set forth opposite its name on Exhibit A hereto by wire transfer of
immediately available funds in accordance with wire instructions provided by the
Company to the Purchasers prior to the Closing. On or before the Closing, the
Company will instruct its transfer agent to deliver stock certificates to the
Purchasers representing the Shares set forth on Exhibit A and will deliver
Warrants against delivery of the aggregate Purchase Price on the Closing Date.
The foregoing notwithstanding, if the Purchaser has indicated to the Company at
the time of execution of this Agreement a need to settle “delivery versus
payment”, the Company shall deliver to such Purchaser or such Purchaser’s
designated custodian the original stock certificates and Warrants on or prior to
the Closing and, upon receipt, the Purchaser shall wire the aggregate Purchase
Price as provided in the first sentence of this Section 1.2.

1.3 Closing Date. The closing of the transaction contemplated by this Agreement
will take place on March 2, 2012 (the “Closing Date”) and the closing (the
“Closing”) will be held at the offices of Cooley LLP, 4401 Eastgate Mall, San
Diego, CA 92121 or at such other time and place as shall be agreed upon by the
Company and the Purchasers hereunder of a majority in interest of the
Securities.

 

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ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as specifically contemplated by this Agreement, the Company hereby
represents and warrants to the Purchasers that:

2.1 Organization and Qualification. The Company is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as currently conducted as
disclosed in the SEC Documents. The Company is duly qualified to do business and
is in good standing in every jurisdiction in which the nature of the business
conducted by it or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, would not reasonably be expected to have a Material Adverse Effect.

2.2 Authorization; Enforcement. The Company has all requisite corporate power
and authority to enter into and to perform its obligations under this Agreement,
to consummate the transactions contemplated hereby and to issue the Securities
in accordance with the terms hereof. The execution, delivery and performance of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby (including the issuance of the Securities) have been duly
authorized by the Company’s Board of Directors or a duly authorized committee
thereof and no further consent or authorization of the Company, its Board of
Directors, or its stockholders is required. This Agreement has been duly
executed by the Company and constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity and except as rights to indemnity and
contribution may be limited by state or federal securities laws or public policy
underlying such laws.

2.3 Capitalization. The authorized capital stock of the Company, as of
January 31, 2012, consisted of 200,000,000 shares of Common Stock, $0.0001 par
value per share, of which 19,627,744 shares were issued and outstanding, and
10,000,000 shares of blank check Preferred Stock, $0.0001 par value per share,
none of which have been designated. All of the issued and outstanding shares of
Common Stock have been duly authorized, validly issued, fully paid, and
nonassessable. Options to purchase an aggregate of 2,532,262 shares of Common
Stock, restricted stock units covering an aggregate of 814,890 shares of Common
Stock and warrants to purchase an aggregate of 377,370 shares of Common Stock
were outstanding as of January 31, 2012. Except as disclosed in or contemplated
by the SEC Documents, the Company does not have outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations other than options granted under
the Company’s stock option plans and its employee stock purchase plan. The
Company’s Amended and Restated Certificate of Incorporation (the “Certificate of
Incorporation”), as in effect on the date hereof, and the Company’s Amended and
Restated Bylaws (the “Bylaws”) as in effect on the date hereof, are each filed
as exhibits to the SEC Documents.

2.4 Issuance of Securities. The Shares and all of the shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”) are duly
authorized and, upon issuance in accordance with the terms of this Agreement
(and in case of the Warrant Shares, the Warrants), will be validly issued, fully
paid and non-assessable and will not be subject to preemptive rights or other
similar rights of stockholders of the Company.

2.5 No Conflicts; Government Consents and Permits.

(a) The execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby
(including the issuance of the Securities) will not (i) conflict with or result
in a violation of any provision of its Certificate of Incorporation or Bylaws or
require the approval of the Company’s stockholders, (ii) violate or conflict
with, or result in a breach of any

 

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provision of, or constitute a default under, any agreement, indenture, or
instrument to which the Company is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including United States
federal and state securities laws and regulations and regulations of any
self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company, except in the case of clauses (ii) and
(iii) only, for such conflicts, breaches, defaults, and violations as would not
reasonably be expected to have a Material Adverse Effect. For purposes of this
Section 2.5(a), the violation by the Company of any listing or related agreement
with any stock exchange on which any of the Company’s securities are traded will
be deemed to constitute a Material Adverse Effect.

(b) The Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency or
any regulatory or self regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement in accordance with the terms
hereof, or to issue and sell the Securities in accordance with the terms hereof
other than such as have been made or obtained, and except for the registration
of the Shares and Warrant Shares under the Securities Act pursuant to Section 6
hereof, any filings required to be made under federal or state securities laws,
and any required filings or notifications regarding the issuance or listing of
additional shares with Nasdaq.

(c) The Company has all franchises, permits, licenses, and any similar authority
necessary for the conduct of its business as now being conducted by it and as
currently proposed to be conducted as disclosed in the SEC Documents, except for
such franchise, permit, license or similar authority, the lack of which would
not reasonably be expected to have a Material Adverse Effect. The Company has
not received any actual notice of any proceeding relating to revocation or
modification of any such franchise, permit, license, or similar authority except
where such revocation or modification would not reasonably be expected to have a
Material Adverse Effect.

2.6 SEC Documents, Financial Statements. The Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC since July 28, 2011, pursuant to the reporting requirements
of the Exchange Act (all of the foregoing filed prior to the date hereof, as
well as the Company’s registration statement on Form S-1 (File No. 333-168504),
as amended, and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits) incorporated by reference
therein that were filed prior to the date hereof, being hereinafter referred to
herein as the “SEC Documents”). The Company has delivered to each Purchaser, or
each Purchaser has had access to, true and complete copies of the SEC Documents.
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act or the Securities Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, 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 light of the circumstances under which
they were made, not misleading. As of their respective dates, the Financial
Statements and the related notes complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto. The Financial Statements and the related notes
have been prepared in accordance with accounting principles generally accepted
in the United States, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in the Financial Statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may not include footnotes, may be condensed or summary statements or may conform
to the SEC’s rules and instructions for Reports on Form 10-Q) and fairly present
in all material respects the consolidated financial position of the Company as
of the dates thereof and the consolidated results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal and recurring year-end audit adjustments). All material agreements
that were required to be filed on or prior to the date hereof as exhibits to the
SEC Documents under Item 601 of Regulation S-K to which the Company or any
Subsidiary of the Company is a party, or the property or assets of the Company
or any Subsidiary of the Company are subject, have been filed as exhibits to the
SEC Documents (all such material agreements, together with the agreements dated
February 22, 2012 and described in the Company’s Form 8-K filed with the SEC on
February 22, 2012, being hereinafter referred to as the “Material Agreements”).
All Material Agreements are valid and enforceable against the Company in
accordance with their respective terms, except (i) as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, or moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally,
(ii) as enforceability may be subject to general principles of equity and except
as rights to indemnity and contribution may be limited by state or federal
securities laws or public policy underlying such laws and (iii) as otherwise
described in the SEC Documents. The Company is not in breach of or default under
any of the

 

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Material Agreements, and to the Company’s knowledge, no other party to a
Material Agreement is in breach of or default under such Material Agreement,
except in each case, for such breaches or defaults as would not reasonably be
expected to have a Material Adverse Effect. The Company has not received a
notice of termination nor is the Company otherwise aware of any threats to
terminate any of the Material Agreements.

2.7 Disclosure Controls and Procedures. Except as disclosed in the SEC
Documents, the Company has established and maintains disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are
effective in all material respects to ensure that material information relating
to the Company, including any consolidated Subsidiaries, is made known to its
chief executive officer and chief financial officer by others within those
entities. The Company’s certifying officers have evaluated the effectiveness of
the Company’s disclosure controls and procedures as of the end of the period
covered by the most recently filed quarterly or annual periodic report under the
Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed quarterly or annual periodic report under the Exchange Act
the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company’s internal control over financial reporting (as such term
is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) or, to the Company’s
knowledge, in other factors that could significantly affect the Company’s
internal control over financial reporting.

2.8 Accounting Controls. Except as disclosed in the SEC Documents, the Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain accountability for assets, (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

2.9 Absence of Litigation. As of the date hereof, there is no action, suit,
proceeding or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the Company’s
knowledge, threatened against the Company that if determined adversely to the
Company would reasonably be expected to have a Material Adverse Effect or would
reasonably be expected to impair the ability of the Company to perform its
obligations under this Agreement. Neither the Company, nor any director or
officer thereof, is or has been the subject of any action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty relating to the Company. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC of the Company or any current or former director or
officer of the Company. The Company has not received 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 and, to the Company’s
knowledge, the SEC has not issued any such order.

2.10 Intellectual Property Rights. The Company and its Subsidiaries own, possess
or can acquire on reasonable terms sufficient trademarks, trademark
applications, service marks, service names, trade names, patents, patent
applications, patent rights, inventions, know-how, copyrights, domain names,
licenses, approvals, trade secrets and other similar rights reasonably necessary
to conduct their businesses as now conducted and, to the knowledge of the
Company, as proposed to be conducted as described in the SEC Documents (the
“Intellectual Property”); except to the extent failure to own, possess or
acquire such Intellectual Property would not result in a Material Adverse
Effect. To the Company’s knowledge, neither the Company nor any of its
Subsidiaries has infringed the intellectual property rights of third parties and
no third party, to the Company’s knowledge, is infringing the Intellectual
Property, in each case, which could reasonably be expected to result in a
Material Adverse Effect. Except as disclosed in the SEC Documents, there are no
material options, licenses or agreements relating to the Intellectual Property,
nor is the Company bound by or a party to any material options, licenses or
agreements relating to the patents, patent applications, patent rights,
inventions, know-how, trade secrets, trademarks, trademark applications, service
marks, service names, trade names or copyrights of any other person or entity.
Except as described in the SEC Documents, there is no material claim or action
or proceeding pending or, to the Company’s knowledge, threatened that challenges
any of the rights of the Company in or to, or otherwise with respect to, any
Intellectual Property.

 

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2.11 Placement Agents. The Company has taken no action that would give rise to
any claim by any person for brokerage commissions, placement agent’s fees or
similar payments relating to this Agreement or the transactions contemplated
hereby, except for dealings with the Placement Agents, whose commissions and
fees will be paid by the Company.

2.12 Investment Company. The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”). The Company shall conduct its business in a manner so
that it will not become subject to the Investment Company Act.

2.13 No Material Adverse Change. Since September 30, 2011, except as described
or referred to in the SEC Documents and except for cash expenditures in the
ordinary course of business, there has not been any change in the assets,
business, properties, financial condition or results of operations of the
Company that would reasonably be expected to have a Material Adverse Effect.
Since September 30, 2011, (i) there has not been any dividend or distribution of
any kind declared, set aside for payment, paid or made by the Company on any
class of capital stock, (ii) the Company has not sustained any material loss or
interference with the Company’s business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, and (iii) the Company has not incurred any
material liabilities except in the ordinary course of business.

2.14 The Nasdaq Global Market. The Common Stock is listed on The Nasdaq Global
Market, and, except as disclosed in the SEC Documents, to the Company’s
knowledge, there are no proceedings to revoke or suspend such listing or the
listing of the Shares and the Warrant Shares. The Company is in compliance with
the requirements of Nasdaq for continued listing of the Common Stock thereon and
any other Nasdaq listing and maintenance requirements, and the execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby (including the issuance
of the Securities) will not result in any noncompliance by the Company with any
such requirements.

2.15 Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity with respect to the Company) with respect to this Agreement
and the transactions contemplated hereby and any advice given by any Purchaser
or any of their respective representatives or agents to the Company in
connection with this Agreement and the transactions contemplated hereby is
merely incidental to such Purchaser’s purchase of the Securities. The Company
further represents to each Purchaser that the Company’s decision to enter into
this Agreement has been based on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.

2.16 Accountants. PricewaterhouseCoopers LLP, who will express their opinion
with respect to the audited financial statements and schedules to be included as
a part of any Registration Statement prior to the filing of any such
Registration Statement, are independent accountants as required by the
Securities Act.

2.17 Insurance. The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as the Company
believes are prudent and customary for a company (i) in the businesses and
location in which the Company is engaged, (ii) with the resources of the
Company, and (iii) at a similar stage of development as the Company. The Company
has not received any written notice that the Company will not be able to renew
its existing insurance coverage as and when such coverage expires. The Company
believes it will be able to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.

2.18 Foreign Corrupt Practices. Since January 1, 2007, neither the Company, its
Subsidiaries, nor to the Company’s knowledge, any director, officer, agent,
employee or other person acting on behalf of the Company or any Subsidiary has,
in the course of its actions for, or on behalf of, the Company or any Subsidiary
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of in any
material respect any provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

 

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2.19 Private Placement. Neither the Company nor its Subsidiaries or any
affiliates, nor any person acting on its or their behalf, has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under any circumstances that would require registration of the
Securities under the Securities Act. Assuming the accuracy of the
representations and warranties of the Purchasers contained in Article 3 hereof,
the issuance of the Securities and the Warrant Shares are exempt from
registration under the Securities Act.

2.20 No Registration Rights. No person has the right to (i) prohibit the Company
from filing a Registration Statement or (ii) other than as disclosed in the SEC
Documents, require the Company to register any securities for sale under the
Securities Act by reason of the filing of a Registration Statement except in the
case of clause (ii) for rights which have been properly waived. The granting and
performance of the registration rights under this Agreement will not violate or
conflict with, or result in a breach of any provision of, or constitute a
default under, any agreement, indenture, or instrument to which the Company is a
party.

2.21 Taxes. The Company has filed (or has obtained an extension of time within
which to file) all necessary federal, state and foreign income and franchise tax
returns and has paid all taxes shown as due on such tax returns, except where
the failure to so file or the failure to so pay would not reasonably be expected
to have a Material Adverse Effect.

2.22 Real and Personal Property. The Company has good and marketable title to,
or has valid rights to lease or otherwise use, all items of real and personal
property that are material to the business of the Company free and clear of all
liens, encumbrances, claims and defects and imperfections of title except those
that (i) do not materially interfere with the use of such property by the
Company, (ii) are described in the SEC Documents or (iii) would not reasonably
be expected to have a Material Adverse Effect.

2.23 Application of Takeover Protections. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
impose any restriction on any Purchaser, or create in any party (including any
current stockholder of the Company) any rights, under any share acquisition,
business combination, poison pill (including any distribution under a rights
agreement), or other similar anti-takeover provisions under the Company’s
charter documents or the laws of its state of incorporation.

2.24 No Manipulation of Stock. The Company has not taken, nor will it take,
directly or indirectly any action designed to stabilize or manipulate the price
of the Common Stock or any security of the Company to facilitate the sale or
resale of any of the Shares.

2.25 Related Party Transactions. Except with respect to the transactions
(i) that are not required to be disclosed and (ii) contemplated hereby to the
extent an affiliate of any director purchases Securities hereunder, all
transactions that have occurred between or among the Company, on the one hand,
and any of its officers or directors, or any affiliate or affiliates of any such
officer or director, on the other hand, prior to the date hereof have been
disclosed in the SEC Documents.

2.26 Use of Proceeds. The Company shall use the net proceeds of the sale of the
Securities under this Agreement for research, development, sales and marketing
of the Company’s products and product candidates, working capital and general
corporate purposes, including any required repayments of indebtedness.

ARTICLE 3

PURCHASER’S REPRESENTATIONS AND WARRANTIES

Each Purchaser represents and warrants to the Company, severally and not
jointly, with respect to itself and its purchase hereunder, that:

3.1 Investment Purpose. The Purchaser is purchasing the Securities for its own
account and not with a present view toward the public sale or distribution
thereof and has no intention of selling or distributing any of

 

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such Securities or any arrangement or understanding with any other persons
regarding the sale or distribution of such Securities except in accordance with
the provisions of Article 6 and except as would not result in a violation of the
Securities Act. The Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Securities except in
accordance with the provisions of Article 6 or pursuant to and in accordance
with the Securities Act.

3.2 Reliance on Exemptions. The Purchaser understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws.

3.3 Information. The Purchaser has been furnished with all relevant materials
relating to the business, finances and operations of the Company necessary to
make an investment decision, and materials relating to the offer and sale of the
Securities, that have been requested by the Purchaser, including, without
limitation, the Company’s SEC Documents, and the Purchaser has had the
opportunity to review the SEC Documents. The Purchaser has been afforded the
opportunity to ask questions of the Company. 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 SEC Documents and the
Company’s representations and warranties contained in the Agreement.

3.4 Acknowledgement of Risk.

(a) The Purchaser acknowledges and understands that its investment in the
Securities involves a significant degree of risk, including, without limitation,
(i) an investment in the Company is speculative, and only Purchasers who can
afford the loss of their entire investment should consider investing in the
Company and the Securities; (ii) the Purchaser may not be able to liquidate its
investment; (iii) transferability of the Securities is extremely limited;
(iv) in the event of a disposition of the Securities, the Purchaser could
sustain the loss of its entire investment; and (v) the Company has not paid any
dividends on its Common Stock since inception and does not anticipate the
payment of dividends in the foreseeable future. Such risks are more fully set
forth in the SEC Documents;

(b) The Purchaser is able to bear the economic risk of holding the Securities
for an indefinite period, and has knowledge and experience in financial and
business matters such that it is capable of evaluating the risks of the
investment in the Securities; and

(c) The Purchaser has, in connection with the Purchaser’s decision to purchase
Securities, not relied upon any representations or other information (whether
oral or written) other than as set forth in the representations and warranties
of the Company contained herein and the SEC Documents, and the Purchaser has,
with respect to all matters relating to this Agreement and the offer and sale of
the Securities, relied solely upon the advice of such Purchaser’s own counsel
and has not relied upon or consulted any counsel to the Placement Agents or
counsel to the Company.

3.5 Governmental Review. The Purchaser understands that no United States federal
or state agency or any other government or governmental agency has passed upon
or made any recommendation or endorsement of the Securities or an investment
therein.

3.6 Transfer or Resale. The Purchaser understands that:

(a) the Securities have not been and are not being registered under the
Securities Act (other than as contemplated in Article 6) or any applicable state
securities laws and, consequently, the Purchaser may have to bear the risk of
owning the Securities for an indefinite period of time because the Securities
may not be transferred unless (i) the resale of the Securities is registered
pursuant to an effective registration statement under the Securities Act, as
contemplated in Article 6; (ii) the Purchaser has delivered to the Company an
opinion of counsel (in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that the Securities to be sold
or transferred may be sold or transferred pursuant to an exemption from such
registration; or (iii) the Securities are sold or transferred pursuant to Rule
144;

 

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(b) any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and, if Rule 144 is not applicable, any
resale of the Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the SEC
thereunder; and

(c) except as set forth in Article 6, neither the Company nor any other person
is under any obligation to register the resale of the Shares or the Warrant
Shares under the Securities Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder.

3.7 Legends.

(a) The Purchaser understands the certificates representing the Securities will
bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the certificates for such
Securities):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT SUCH OPINION
IS REQUIRED PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT UNDER WHICH
THE SECURITIES WERE ISSUED.

(b) To the extent the resale of Shares or Warrant Shares is registered under the
Securities Act pursuant to an effective Registration Statement naming the holder
thereof as a selling stockholder, the Company agrees to promptly (i) authorize
the removal of the legend set forth in Section 3.8(a) and any other legend not
required by applicable law from such Shares and/or Warrant Shares and (ii) cause
its transfer agent to issue such Shares and/or Warrant Shares without such
legends to the holder thereof by electronic delivery at the applicable balance
account at the Depository Trust Company upon surrender of any stock certificates
evidencing such Shares or Warrant Shares. Any fees (with respect to the
Company’s transfer agent, counsel or otherwise) associated with the removal of
such legend(s) shall be borne by the Company. The Purchaser hereby covenants and
agrees that to the extent resales of the Shares or Warrant Shares are made
pursuant to such effective Registration Statement, that such resales will be
made only during the time that such Registration Statement is effective and not
withdrawn or suspended and only as permitted by such Registration Statement, and
otherwise in compliance with the Securities Act (including applicable prospectus
delivery obligations).

(c) The Purchaser may request that the Company remove, and the Company agrees to
authorize the removal of any legend from the Shares and Warrant Shares
(i) following any sale of the Shares or Warrant Shares pursuant to Rule 144, or
(ii) if such Shares or Warrant Shares are eligible for sale under Rule 144
following the expiration of the one-year holding requirement under subparagraphs
(b)(1)(i) and (d) thereof. Following the time a legend is no longer required for
the Shares or Warrant Shares under this Section 3.8(c), the Company will, no
later than three Business Days following the delivery by a Purchaser to the
Company or the Company’s transfer agent of a legended certificate representing
such securities, deliver or cause to be delivered to such Purchaser a
certificate representing such securities that is free from all restrictive and
other legends.

3.8 Authorization; Enforcement. The Purchaser has the requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The Purchaser has taken all necessary action to authorize
the execution, delivery and performance of this Agreement. Upon the execution
and delivery of this Agreement, this Agreement shall constitute a valid and
binding obligation of the Purchaser enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity and except as rights to indemnity and contribution may be
limited by state or federal securities laws or public policy underlying such
laws.

 

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3.9 Residency. The Purchaser is a resident of the jurisdiction set forth
immediately below such Purchaser’s name on the signature pages hereto.

3.10 No Short Sales. Between the time the Purchaser learned about the Offering
and the public announcement of the Offering, the Purchaser has not engaged in
any short sales or similar transactions with respect to the Common Stock, nor
has the Purchaser, directly or indirectly, caused any Person to engage in any
short sales or similar transactions with respect to the Common Stock.

3.11 Acknowledgements Regarding Placement Agents. The Purchaser acknowledges
that the Placement Agents are acting as the exclusive placement agents on a
“best efforts” basis for the Securities being offered hereby and will be
compensated by the Company for acting in such capacity. The Purchaser represents
that (i) the Purchaser, unless affiliated with a member of the Company’s Board
of Directors, was contacted regarding the sale of the Securities by the
Placement Agent (or an authorized agent or representative thereof) with whom the
Purchaser entered into a confidentiality agreement and (ii) to its knowledge no
Securities were offered or sold to it by means of any form of general
solicitation or general advertising.

3.12 Beneficial Ownership. Assuming the accuracy of the Company’s representation
in Section 2.3 hereof and assuming that no additional shares of capital stock
have been issued by the Company since January 31, 2012, the purchase by such
Purchaser of the Shares and Warrants hereunder will not result in such Purchaser
(individually or together with any other Person with whom such Purchaser has
identified, or will have identified, itself as part of a “group” in a public
filing made with the SEC involving the Company’s securities) acquiring, or
obtaining the right to acquire, in excess of 19.99% of the outstanding shares of
Common Stock or the voting power of the Company on a post-transaction basis that
assumes that the Closing shall have occurred. Such Purchaser does not presently
intend to, alone or together with others, make a public filing with the SEC to
disclose that it has (or that it together with such other Persons have)
acquired, or obtained the right to acquire, as a result of the purchase by such
Purchaser of the Shares and Warrants hereunder (when added to any other
securities of the Company that it or they then own or have the right to
acquire), in excess of 19.99% of the outstanding shares of Common Stock or the
voting power of the Company on a post-transaction basis that assumes that the
Closing has occurred.

3.13 Purchaser Status. At the time such Purchaser was offered the Shares and
Warrants, it was, and at the date hereof it is, an “accredited investor” as
defined in Rule 510(a) of the Securities Act.

ARTICLE 4

COVENANTS

4.1 Reporting Status. The Company’s Common Stock is registered under Section 12
of the Exchange Act. During the Registration Period, the Company will timely
file all documents with the SEC, and the Company will not terminate its status
as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination.

4.2 Expenses. The Company and each Purchaser is liable for, and will pay, its
own expenses incurred in connection with the negotiation, preparation, execution
and delivery of this Agreement, including, without limitation, attorneys’ and
consultants’ fees and expenses.

4.3 Financial Information. The financial statements of the Company to be
included in any documents filed with the SEC will be prepared in accordance with
accounting principles generally accepted in the United States, consistently
applied (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes, may be condensed or summary
statements or may conform to the SEC’s rules and instructions for Reports on
Form 10-Q), and will fairly present in all material respects the consolidated
financial position of the Company and consolidated results of its operations and
cash flows as of, and for the periods covered by, such financial statements
(subject, in the case of unaudited statements, to normal and recurring year-end
audit adjustments).

 

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4.4 Securities Laws Disclosure; Publicity. On or before 9:00 a.m., New York
local time, on the Business Day immediately following the date hereof, the
Company shall issue a press release announcing the signing of this Agreement and
describing the terms of the transactions contemplated by this Agreement. On or
before March 5, 2012, the Company shall file a Current Report on Form 8-K with
the SEC describing the terms of the transactions contemplated by this Agreement
and including as an exhibit to such Current Report on Form 8-K this Agreement,
in the form required by the Exchange Act. The Company shall not publicly
disclose the name of any Purchaser or any affiliate of the Purchaser, or include
the name of any Purchaser or an affiliate of the Purchaser in any filing with
the SEC (other than in a Registration Statement and any exhibits to filings made
in respect of this transaction in accordance with periodic report or current
report filing requirements under the Exchange Act) or any regulatory agency,
without the prior written consent of such Purchaser, except to the extent such
disclosure is required by law or regulations, in which case the Company shall
provide each Purchaser whose name is to be disclosed with prior notice of such
disclosure and a reasonable opportunity to comment on the proposed disclosure
insofar as it relates specifically to such Purchaser.

4.5 Sales by Purchasers. Each Purchaser will sell any Securities and Warrant
Shares held by it in compliance with applicable prospectus delivery
requirements, if any, or otherwise in compliance with the requirements for an
exemption from registration under the Securities Act and the rules and
regulations promulgated thereunder. No Purchaser will make any sale, transfer or
other disposition of the Securities in violation of federal or state securities
laws.

4.6 Reservation of Common Stock. The Company shall reserve and keep available at
all times during which the Warrants remain exercisable, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Warrant Shares pursuant to this Agreement.

ARTICLE 5

CONDITIONS TO CLOSING

5.1 Conditions to Obligations of the Company. The Company’s obligation to
complete the purchase and sale of the Securities and deliver such stock
certificate(s) and Warrants to each Purchaser is subject to the waiver by the
Company or fulfillment as of the Closing Date of the following conditions:

(a) Receipt of Funds. The Company shall have received immediately available
funds in the full amount of the purchase price for the Securities being
purchased hereunder as set forth opposite such Purchaser’s name on Exhibit A
hereto.

(b) Representations and Warranties. The representations and warranties made by
each Purchaser in Article 3 shall be true and correct in all material respects
as of the Closing Date.

(c) Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.

(d) Blue Sky. The Company shall have obtained all necessary blue sky law permits
and qualifications, or secured exemptions therefrom, required by any state for
the offer and sale of the Securities.

(e) Nasdaq Qualification. The Shares to be issued shall be duly authorized for
listing by Nasdaq, subject to official notice of issuance, to the extent
required by the rules of Nasdaq.

(f) Absence of Litigation. No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted or be pending before
any court, arbitrator, governmental body, agency or official.

 

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(g) No Governmental Prohibition. The sale of the Securities by the Company shall
not be prohibited by any law or governmental order or regulation.

5.2 Conditions to Purchasers’ Obligations at the Closing. Each Purchaser’s
obligation to complete the purchase and sale of the Securities is subject to the
waiver by such Purchaser or fulfillment as of the Closing Date of the following
conditions:

(a) Representations and Warranties. The representations and warranties made by
the Company in Article 2 shall be true and correct in all material respects as
of the Closing Date.

(b) Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.

(c) Blue Sky. The Company shall have obtained all necessary blue sky law permits
and qualifications, or secured exemptions therefrom, required by any state or
foreign or other jurisdiction for the offer and sale of the Securities.

(d) Legal Opinion. The Company shall have delivered to such Purchaser an
opinion, dated as of the Closing Date, from Cooley LLP, counsel to the Company,
in substantially the form attached hereto as Exhibit D hereto.

(e) Transfer Agent Instructions. The Company shall have delivered to its
transfer agent irrevocable instructions to issue to such Purchaser or in such
nominee name(s) as designated by such Purchaser in writing one or more
certificates representing such Shares set forth opposite such Purchaser’s name
on Exhibit A hereto; provided, however, that if such Purchaser has indicated to
the Company at the time of execution of this Agreement a need to settle
“delivery versus payment”, the Company shall deliver to such Purchaser or such
Purchaser’s designated custodian such original stock certificates and Warrants
to be acquired by such Purchaser.

(f) Nasdaq Qualification. The Shares shall be duly authorized for listing by
Nasdaq, subject to official notice of issuance, to the extent required by the
rules of Nasdaq.

(g) Absence of Litigation. No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted or be pending before
any court, arbitrator, governmental body, agency or official.

(h) No Governmental Prohibition. The sale of the Shares by the Company shall not
be prohibited by any law or governmental order or regulation.

(i) Minimum Aggregate Investment. The Company shall have received at the Closing
at least $45 million of aggregate gross proceeds from the sale of Securities
hereunder.

ARTICLE 6

REGISTRATION RIGHTS

6.1 As soon as reasonably practicable, but in no event later than 45 days after
the Closing Date (the “Filing Date”), the Company shall file a registration
statement covering the resale of the Registrable Securities with the SEC for an
offering to be made on a continuous basis pursuant to Rule 415, or if Rule 415
is not available for offers and sales of the Registrable Securities, by such
other means of distribution of Registrable Securities as the Holders of a
majority of the Registrable Securities may reasonably specify (the “Initial
Registration Statement”). The Initial Registration Statement shall be on Form
S-3 (except if the Company is ineligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form). In the event the SEC informs the Company that all of the
Registrable Securities cannot, as a result of the application of Rule 415, be
registered for resale as a secondary offering on a single registration
statement, the Company agrees to

 

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promptly (i) inform each of the Holders thereof, (ii) use its reasonable efforts
to file amendments to the Initial Registration Statement as required by the SEC
and/or (iii) withdraw the Initial Registration Statement and file a new
registration statement (a “New Registration Statement”), in either case covering
the maximum number of Registrable Securities permitted to be registered by the
SEC, on Form S-3 or, if the Company is ineligible to register for resale the
Registrable Securities on Form S-3, such other form available to register for
resale the Registrable Securities as a secondary offering; provided, however,
that prior to filing such amendment or New Registration Statement, the Company
shall be obligated to use its reasonable efforts to advocate with the SEC for
the registration of all of the Registrable Securities on the Initial
Registration Statement. In the event the Company amends the Initial Registration
Statement or files a New Registration Statement, as the case may be, under
clauses (ii) or (iii) above, the Company will use its reasonable efforts to file
with the SEC, as promptly as allowed by the SEC, one or more registration
statements on Form S-3 or, if the Company is ineligible to register for resale
the Registrable Securities on Form S-3, such other form available to register
for resale those Registrable Securities that were not registered for resale on
the Initial Registration Statement, as amended, or the New Registration
Statement (the “Remainder Registration Statements”). Notwithstanding any other
provision of this Agreement and subject to the payment of damages in
Section 6.3, if the SEC limits the number of Registrable Securities permitted to
be registered on a particular Registration Statement (and notwithstanding that
the Company used diligent efforts to advocate with the SEC for the registration
of all or a greater number of Registrable Securities), any required cutback of
Registrable Securities shall be applied to the Holders pro rata in accordance
with the number of such Registrable Securities sought to be included in such
Registration Statement by reference to the amount of Registrable Securities set
forth opposite such Holder’s name on Exhibit A and/or Exhibit B (and in the case
of a subsequent transfer, the initial Holder’s) relative to the aggregate amount
of all Registrable Securities. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another
appropriate form and (ii) undertake to register the Registrable Securities on
Form S-3 after such form is available, provided that the Company shall maintain
the effectiveness of the Registration Statement then in effect until such time
as a Registration Statement on Form S-3 covering the Registrable Securities has
been declared effective by the SEC.

6.2 All Registration Expenses incurred in connection with any registration,
qualification, exemption or compliance pursuant to Section 6.1 shall be borne by
the Company. All Selling Expenses relating to the sale of securities registered
by or on behalf of Holders shall be borne by such Holders pro rata on the basis
of the number of securities so registered.

6.3 The Company further agrees that, in the event that (i) the Initial
Registration Statement has not been filed with the SEC within 45 days after the
Closing Date, (ii) the Initial Registration Statement or the New Registration
Statement, as applicable, has not been declared effective by the SEC by the
Effectiveness Deadline, or (iii) after such Registration Statement is declared
effective by the SEC, it is suspended by the Company or ceases to remain
continuously effective as to all Registrable Securities for which it is required
to be effective, other than, in each case, within the time period(s) permitted
by Section 6.7(b) (each such event referred to in clauses (i), (ii) and (iii),
(a “Registration Default”)), for all or part of any thirty-day period (a
“Penalty Period”) during which the Registration Default remains uncured (which
initial thirty-day period shall commence on the fifth Business Day after the
date of such Registration Default if such Registration Default has not been
cured by such date), the Company shall pay to each Holder 1.5% of such Holder’s
aggregate purchase price of his or her Shares, Warrant Shares and/or Debt
Warrant Shares, as applicable, that remain Registrable Securities for which such
Registration Statement is required to be effective and for which there is not
otherwise an effective Registration Statement at such time, for each Penalty
Period during which the Registration Default remains uncured; provided, however,
that if a Holder fails to provide the Company with any information that is
required to be provided in such Registration Statement with respect to such
Holder as set forth herein, then the commencement of the Penalty Period
described above with respect to such Holder shall be extended until two Business
Days following the date of receipt by the Company of such required information
from such Holder; and provided, further, that in no event shall the Company be
required hereunder to pay to any Holder pursuant to this Agreement more than
1.5% of such Holder’s aggregate purchase price of all of his or her securities
for which such Registration Statement is required to be effective in any Penalty
Period and in no event shall the Company be required hereunder to pay to any
Holder pursuant to this Agreement an aggregate amount that exceeds 10.0% of the
aggregate purchase price paid by such Holder for such Holder’s securities. For
purposes of clarification, and solely for purposes of calculating the liquidated
damages pursuant to this Section 6.3, each Holder’s purchase price for each
Share shall be deemed to be the Stock Purchase Price and each Holder’s purchase
price for each Warrant Share or Debt Warrant Share shall be deemed to be $0.125.

 

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The Company shall deliver said cash payment to the Holder by the fifth Business
Day after the end of such Penalty Period. If the Company fails to pay said cash
payment to any Holder in full by the fifth Business Day after the end of such
Penalty Period, the Company will pay interest thereon at a rate of 12% per annum
(or such lesser maximum amount that is permitted to be paid by applicable law,
and calculated on the basis of a year consisting of 360 days) to such Holder,
accruing daily from the date such liquidated damages are due until such amounts,
plus all such interest thereon, are paid in full.

6.4 In the case of the registration, qualification, exemption or compliance
effected by the Company pursuant to this Agreement, the Company shall, upon
reasonable request, inform each Holder as to the status of such registration,
qualification, exemption and compliance. At its expense the Company shall:

(a) except for such times as the Company is permitted hereunder to suspend the
use of the prospectus forming part of a Registration Statement, use its
commercially reasonable efforts to keep such registration, and any
qualification, exemption or compliance under state securities laws which the
Company determines to obtain, continuously effective with respect to a Holder,
and to keep the applicable Registration Statement free of any material
misstatements or omissions, until the earlier of the following: (i) the third
anniversary of the Closing Date or (ii) the date all Shares and Warrant Shares
held by such Holder may be sold under Rule 144 during any 90 day period,
provided that the Common Stock then trades on a national securities exchange and
such Holder owns less than 1% of the Company’s outstanding capital stock. The
period of time during which the Company is required hereunder to keep a
Registration Statement effective is referred to herein as the “Registration
Period.”

(b) advise the Holders within five Business Days:

(i) when a Registration Statement or any amendment thereto has been filed with
the SEC and when such Registration Statement or any post-effective amendment
thereto has become effective;

(ii) of any request by the SEC for amendments or supplements to any Registration
Statement or the prospectus included therein or for additional information;

(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of any Registration Statement or the initiation of any proceedings for such
purpose;

(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities included therein
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and

(v) of the occurrence of any event that requires the making of any changes in
any Registration Statement or prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a prospectus, in the light of the circumstances under which they
were made) not misleading;

(c) use its commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of any Registration Statement as soon as
reasonably practicable;

(d) if a Holder so requests in writing, promptly furnish to each such Holder,
without charge, at least one copy of each Registration Statement and each
post-effective amendment thereto, including financial statements and schedules,
and, if explicitly requested, all exhibits in the form filed with the SEC;

(e) during the Registration Period, promptly deliver to each such Holder,
without charge, as many copies of each prospectus included in a Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request in writing; and the Company consents to the use, consistent with the
provisions hereof, of the prospectus or any amendment or supplement thereto by
each of the selling Holders of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by a prospectus or any
amendment or supplement thereto;

 

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(f) during the Registration Period, if a Holder so requests in writing, deliver
to each Holder, without charge, (i) one copy of the following documents, other
than those documents available via EDGAR: (A) its annual report to its
stockholders, if any (which annual report shall contain financial statements
audited in accordance with generally accepted accounting principles in the
United States of America by a firm of certified public accountants of recognized
standing), (B) if not included in substance in its annual report to
stockholders, its annual report on Form 10-K (or similar form), (C) its
definitive proxy statement with respect to its annual meeting of stockholders,
(D) each of its quarterly reports to its stockholders, and, if not included in
substance in its quarterly reports to stockholders, its quarterly report on Form
10-Q (or similar form), and (E) a copy of each full Registration Statement (the
foregoing, in each case, excluding exhibits); and (ii) if explicitly requested,
all exhibits excluded by the parenthetical to the immediately preceding clause
(E);

(g) prior to any public offering of Registrable Securities pursuant to any
Registration Statement, promptly take such actions as may be necessary to
register or qualify or obtain an exemption for offer and sale under the
securities or blue sky laws of such United States jurisdictions as any such
Holders reasonably request in writing, provided that the Company shall not for
any such purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction, and do any and
all other acts or things reasonably necessary or advisable to enable the offer
and sale in such jurisdictions of the Registrable Securities covered by any such
Registration Statement;

(h) upon the occurrence of any event contemplated by Section 6.4(b)(v) above,
except for such times as the Company is permitted hereunder to suspend, and has
suspended, the use of a prospectus forming part of a Registration Statement, the
Company shall use its commercially reasonable efforts to as soon as reasonably
practicable prepare a post-effective amendment to such Registration Statement or
a supplement to the related prospectus, or file any other required document so
that, as thereafter delivered to purchasers of the Registrable Securities
included therein, such prospectus will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;

(i) otherwise use its commercially reasonable efforts to comply in all material
respects with all applicable rules and regulations of the SEC which could affect
the sale of the Registrable Securities;

(j) use its commercially reasonable efforts to cause all Registrable Securities
to be listed on each securities exchange or market, if any, on which equity
securities issued by the Company have been listed;

(k) use its commercially reasonable efforts to take all other steps necessary to
effect the registration of the Registrable Securities contemplated hereby and to
enable the Holders to sell Registrable Securities under Rule 144;

(l) provide to each Holder and its representatives, if requested, the
opportunity to conduct a reasonable inquiry of the Company’s financial and other
records during normal business hours and make available its officers, directors
and employees for questions regarding information which such Holder may
reasonably request in order to fulfill any due diligence obligation on its part;
and

(m) permit counsel for the Holders to review any Registration Statement and all
amendments and supplements thereto, within two Business Days prior to the filing
thereof with the SEC;

provided that, in the case of clauses (l) and (m) above, the Company shall not
be required (A) to delay the filing of any Registration Statement or any
amendment or supplement thereto as a result of any ongoing diligence inquiry by
or on behalf of a Holder or to incorporate any comments to any Registration
Statement or any amendment or supplement thereto by or on behalf of a Holder if
such inquiry or comments would require a delay in the filing of such
Registration Statement, amendment or supplement, as the case may be, or (B) to
provide, and shall not provide, any Holder or its representatives with material,
non-public information unless such Holder agrees to receive such information and
enters into a written confidentiality agreement with the Company in a form
reasonably acceptable to the Company.

 

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6.5 The Holders shall have no right to take any action to restrain, enjoin or
otherwise delay any registration pursuant to Section 6.1 hereof as a result of
any controversy that may arise with respect to the interpretation or
implementation of this Agreement.

6.6 (a) To the extent permitted by law, the Company shall indemnify each Holder
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which any registration that has been effected
pursuant to this Agreement, against all claims, losses, damages and liabilities
(or action in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened (subject to Section 6.6(c)
below), arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any Registration Statement,
prospectus, any amendment or supplement thereof, or other document prepared by
the Company and incident to any such registration, qualification or compliance
or based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were made, or any
violation by the Company of any rule or regulation promulgated by the Securities
Act applicable to the Company and relating to any action or inaction required of
the Company in connection with any such registration, qualification or
compliance, and will reimburse each Holder and each person controlling such
Holder, for reasonable legal and other out-of-pocket expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action as incurred; provided that the Company will not be
liable in any such case to the extent that any untrue statement or omission or
allegation thereof is made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder for use in
preparation of any Registration Statement, prospectus, amendment or supplement;
provided further, that the Company will not be liable in any such case where the
claim, loss, damage or liability arises out of or is based on the failure of
such Holder to comply with the covenants and agreements contained in this
Agreement respecting sales of Registrable Securities, and except that the
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any such untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the SEC at the time any Registration
Statement becomes effective or in an amended prospectus filed with the SEC
pursuant to Rule 424(b) which meets the requirements of Section 10(a) of the
Securities Act (each, a “Final Prospectus”), such indemnity shall not inure to
the benefit of any such Holder or any such controlling person, if a copy of a
Final Prospectus furnished by the Company to the Holder for delivery was not
furnished to the person or entity asserting the loss, liability, claim or damage
at or prior to the time such furnishing is required by the Securities Act and a
Final Prospectus would have cured the defect giving rise to such loss,
liability, claim or damage.

(b) Each Holder will severally, and not jointly, indemnify the Company, each of
its directors and officers, and each person who controls the Company within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened (subject to
Section 6.6(c) below), arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any Registration
Statement, prospectus, or any amendment or supplement thereof, incident to any
such registration, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in light of the circumstances in which they
were made, and will reimburse the Company, such directors and officers, and each
person controlling the Company for reasonable legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action as incurred, in each case to the
extent, but only to the extent, that such untrue statement or omission or
allegation thereof is made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holder for use in
preparation of any Registration Statement, prospectus, amendment or supplement;
provided that the indemnity shall not apply to the extent that such claim, loss,
damage or liability results from the fact that a current copy of a prospectus
was not made available to the person or entity asserting the loss, liability,
claim or damage at or prior to the time such furnishing is required by the
Securities Act and a Final Prospectus would have cured the defect giving rise to
such loss, claim, damage or liability. Notwithstanding the foregoing, a Holder’s
aggregate liability pursuant to this subsection (b) and subsection (d) shall be
limited to the net amount received by the Holder from the sale of the
Registrable Securities.

(c) Each party entitled to indemnification under this Section 6.6 (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the

 

15

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Indemnifying Party (at its expense) to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
Indemnified Party’s expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, unless such failure
is materially prejudicial to the Indemnifying Party in defending such claim or
litigation. An Indemnifying Party shall not be liable for any settlement of an
action or claim effected without its written consent (which consent will not be
unreasonably withheld). No Indemnifying Party, in its defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.

(d) If the indemnification provided for in this Section 6.6 is held by a court
of competent jurisdiction to be unavailable to an Indemnified Party with respect
to any loss, liability, claim, damage or expense referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and of the Indemnified Party on the other in connection with the
statements or omissions which resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.

6.7 (a) Each Holder agrees that, upon receipt of any notice from the Company of
the happening of any event requiring the preparation of a supplement or
amendment to a prospectus relating to Registrable Securities so that, as
thereafter delivered to the Holders, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, each
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement and prospectus contemplated by Section 6.1 until its
receipt of copies of the supplemented or amended prospectus from the Company
and, if so directed by the Company, each Holder shall deliver to the Company all
copies, other than permanent file copies then in such Holder’s possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.

(b) Each Holder shall suspend, upon request of the Company, any disposition of
Registrable Securities pursuant to any Registration Statement and prospectus
contemplated by Section 6.1 during no more than two periods of no more than 30
calendar days each during any 12-month period to the extent that the Board of
Directors of the Company determines in good faith that the sale of Registrable
Securities under any such Registration Statement would be reasonably likely to
cause a violation of the Securities Act or Exchange Act, provided that the
Company shall not register any securities for the account of itself or any other
stockholder during any such 30-day period.

(c) As a condition to the inclusion of its Registrable Securities, each Holder
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing, including completing a Registration Statement Questionnaire in the form
provided by the Company or in a mutually agreeable form, or as shall be required
in connection with any registration referred to in this Article 6.

(d) Each Holder hereby covenants with the Company (i) not to make any sale of
the Registrable Securities without effectively causing the prospectus delivery
requirements under the Securities Act to be satisfied, and (ii) if such
Registrable Securities are to be sold by any method or in any transaction other
than on a national securities exchange or in the over-the-counter market, in
privately negotiated transactions, or in a combination of such methods, to
notify the Company at least five Business Days prior to the date on which the
Holder first offers to sell any such Registrable Securities.

 

16

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(e) Each Holder agrees not to take any action with respect to any distribution
deemed to be made pursuant to a Registration Statement which would constitute a
violation of Regulation M under the Exchange Act or any other applicable rule,
regulation or law.

(f) At the end of the Registration Period the Holders shall discontinue sales of
shares pursuant to any Registration Statement upon receipt of notice from the
Company of its intention to remove from registration the shares covered by any
such Registration Statement which remain unsold, and such Holders shall notify
the Company of the number of shares registered which remain unsold immediately
upon receipt of such notice from the Company.

6.8 With a view to making available to the Holders the benefits of certain rules
and regulations of the SEC which at any time permit the sale of the Registrable
Securities to the public without registration, so long as the Holders still own
Registrable Securities, the Company shall use its reasonable best efforts to:

(a) make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act, at all times;

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Exchange Act; and

(c) so long as a Holder owns any Registrable Securities, furnish to such Holder,
upon any reasonable request, a written statement by the Company as to its
compliance with Rule 144 under the Securities Act, and of the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company as such Holder may reasonably request
in availing itself of any rule or regulation of the SEC allowing a Holder to
sell any such securities without registration.

6.9 The rights to cause the Company to register Registrable Securities granted
to the Holders by the Company under Section 6.1 may be assigned by a Holder in
connection with a transfer by such Holder of all or a portion of its Registrable
Securities, provided, however, that such transfer must be made at least ten days
prior to the Filing Date and that (i) such transfer may otherwise be effected in
accordance with applicable securities laws; (ii) such Holder gives prior written
notice to the Company at least ten days prior to the Filing Date; and (iii) such
transferee agrees to comply with the terms and provisions of this Agreement, and
such transfer is otherwise in compliance with this Agreement. Except as
specifically permitted by this Section 6.11, the rights of a Holder with respect
to Registrable Securities as set out herein shall not be transferable to any
other Person, and any attempted transfer shall cause all rights of such Holder
therein to be forfeited.

6.10 Prior to the time that Registration Statement(s) covering the resale of all
Registrable Securities have been declared effective by the SEC, the Company
shall not file with the SEC a registration statement under the Securities Act of
any of its equity securities other than a registration statement required to be
filed pursuant to this Agreement, a registration statement on Form S-8 or, in
connection with an acquisition, a registration statement on Form S-4; provided,
however, that the foregoing restrictions in this Section 6.10 shall terminate
upon such time as all of the Registrable Securities (i) have been publicly sold
by the Holders or (ii) may be sold under Rule 144 during any 90-day period,
provided that the Common Stock then trades on a national securities exchange and
such Holder owns less than 1% of the Company’s outstanding securities.

6.11 The rights of any Holder under any provision of this Article 6 may be
waived (either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely) or
amended by an instrument in writing signed by such Holder.

 

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ARTICLE 7

DEFINITIONS

7.1 “Agreement” has the meaning set forth in the preamble.

7.2 “Affiliate” means, with respect to any Person (as defined below), any other
Person controlling, controlled by or under direct or indirect common control
with such Person (for the purposes of this definition “control,” when used with
respect to any specified Person, shall mean the power to direct the management
and policies of such person, directly or indirectly, whether through ownership
of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” shall have meanings correlative to the foregoing).

7.3 “Business Day” means a day Monday through Friday on which banks are
generally open for business in New York City.

7.4 “Bylaws” has the meaning set forth in Section 2.3.

7.5 “Certificate of Incorporation” has the meaning set forth in Section 2.3.

7.6 “Closing” has the meaning set forth in Section 1.3.

7.7 “Closing Date” has the meaning set forth in Section 1.3.

7.8 “Common Stock” means the common stock, par value $0.0001 per share, of the
Company.

7.9 “Company” means Horizon Pharma, Inc.

7.10 “Debt Warrants” has the meaning set forth in Recital C.

7.11 “Debt Warrant Shares” means the shares of Common Stock issuable upon
exercise of the Debt Warrants.

7.12 “Effectiveness Deadline” means, with respect to the Initial Registration
Statement or the New Registration Statement, the 90th calendar day following the
Closing Date (or, in the event the SEC reviews or has written comments to the
Initial Registration Statement or the New Registration Statement, the 120th
calendar day following the Closing Date); provided, however, that if the Company
is notified by the SEC that the Initial Registration Statement will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Deadline as to such Registration Statement shall be the 5th
Business Day following the date on which the Company is so notified if such date
precedes the dates otherwise required above; provided, further, that if the
Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is
closed for business, the Effectiveness Deadline shall be extended to the next
Business Day on which the SEC is open for business.

7.13 “Evaluation Date” has the meaning set forth in Section 2.7.

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

7.15 “Filing Date” has the meaning set forth in Section 6.1.

7.16 “Final Prospectus” has the meaning set forth in Section 6.6(a).

7.17 “Financial Statements” means the financial statements of the Company
included in the SEC Documents.

7.18 “Financing” has the meaning set forth in Section 8.14.

7.19 “Holders” means any person holding Registrable Securities or any person to
whom the rights under Article 6 have been transferred in accordance with
Section 6.9 hereof.

7.20 “Indemnified Party” has the meaning set forth in Section 6.6(c).

7.21 “Indemnifying Party” has the meaning set forth in Section 6.6(c).

 

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7.22 “Initial Registration Statement” has the meaning set forth in Section 6.1.

7.23 “Intellectual Property” has the meaning set forth in Section 2.10.

7.24 “Investment Company Act” has the meaning set forth in Section 2.12.

7.25 “Material Adverse Effect” means a material adverse effect on (a) the
business, operations, assets or financial condition of the Company, taken as a
whole, or (b) the ability of the Company to perform its obligations pursuant to
the transactions contemplated by this Agreement.

7.26 “Material Agreements” has the meaning set forth in Section 2.6.

7.27 “Nasdaq” means The Nasdaq Stock Market LLC.

7.28 “New Registration Statement” has the meaning set forth in Section 6.1.

7.29 “Offering” means the private placement of the Company’s Securities
contemplated by this Agreement.

7.30 “Penalty Period” has the meaning set forth in Section 6.3.

7.31 “Person” means any person, individual, corporation, limited liability
company, partnership, trust or other nongovernmental entity or any governmental
agency, court, authority or other body (whether foreign, federal, state, local
or otherwise).

7.32 “Placement Agents” means JMP Securities LLC, Cowen and Company LLC and
Stifel, Nicolaus & Company, Incorporated.

7.33 “Purchasers” has the meaning set forth in the preamble to this Agreement.

7.34 “Purchase Price” has the meaning set forth in Section 1.1.

7.35 The terms “register,” “registered” and “registration” refer to the
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

7.36 “Registrable Securities” means (i) the Shares, (ii) the Warrant Shares and
(iii) the Debt Warrant Shares; provided, however, that securities shall only be
treated as Registrable Securities if and only for so long as they (A) have not
been disposed of pursuant to a registration statement declared effective by the
SEC, (B) have not been sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act so that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale and (C) are held by a Holder or a permitted transferee
pursuant to Section 6.9.

7.37 “Registration Default” has the meaning set forth in Section 6.3.

7.38 “Registration Expenses” means all expenses incurred by the Company in
complying with Section 6.1 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and expenses of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the fees of legal counsel for any Holder).

7.39 “Registration Statement” means any one or more registration statements of
the Company filed under the Securities Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement (including
without limitation the Initial Registration Statement, the New Registration
Statement and any Remainder Registration Statements) and amendments and
supplements to such Registration Statements, including post-effective
amendments.

 

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7.40 “Registration Period” has the meaning set forth in Section 6.4(a).

7.41 “Remainder Registration Statement” has the meaning set forth in
Section 6.1.

7.42 “Rule 144” means Rule 144 promulgated under the Securities Act, or any
successor rule.

7.43 “Rule 415” means Rule 415 promulgated under the Securities Act, or any
successor rule.

7.44 “SEC” means the United States Securities and Exchange Commission.

7.45 “SEC Documents” has the meaning set forth in Section 2.6.

7.46 “Securities” has the meaning set forth in Section 1.1.

7.47 “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute.

7.48 “Selling Expenses” means all selling commissions applicable to the sale of
Registrable Securities and all fees and expenses of legal counsel for any Holder
in connection with any such sale.

7.49 “Shares” has the meaning set forth in Section 1.1.

7.50 “Stock Purchase Price” has the meaning set forth in Section 1.1.

7.51 “Subsidiary” of any person shall mean any corporation, partnership, limited
liability company, joint venture or other legal entity of which such Person
(either above or through or together with any other subsidiary) owns, directly
or indirectly, more than 50% of the stock or other equity interests the holders
of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.

7.52 “Warrant Holder” has the meaning set forth in the preamble to this
Agreement.

7.53 “Warrant Shares” has the meaning set forth in Section 2.4.

7.54 “Warrants” has the meaning set forth in Section 1.1.

ARTICLE 8

GOVERNING LAW; MISCELLANEOUS

8.1 Governing Law; Jurisdiction. This Agreement will be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws.

8.2 Counterparts; Signatures by Facsimile. This Agreement may be executed in two
or more counterparts, all of which are considered one and the same agreement and
will become effective when counterparts have been signed by each party and
delivered to the other parties. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile or e-mail transmission of a
copy of this Agreement bearing the signature of the party so delivering this
Agreement.

8.3 Headings. The headings of this Agreement are for convenience of reference
only, are not part of this Agreement and do not affect its interpretation.

 

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8.4 Severability. If any provision of this Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision will be deemed
modified in order to conform with such statute or rule of law. Any provision
hereof that may prove invalid or unenforceable under any law will not affect the
validity or enforceability of any other provision hereof.

8.5 Entire Agreement; Amendments. This Agreement (including all schedules and
exhibits hereto and, with respect to any Purchaser, any letter agreements
requested by such Purchaser and executed by the Company with reference to this
Agreement) constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. For purposes of clarification,
each undersigned Warrant Holder hereby irrevocably waives, forfeits and
relinquishes any and all rights pursuant to Section 1 of that certain Investors’
Rights Agreement, dated as of April 1, 2010, between the Company and the
Investors named therein and shall cease to be a party to or an “Investor” or a
“Holder” thereunder. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the
party to be charged with enforcement. Any amendment or waiver by a party
effected in accordance with this Section 8.5 shall be binding upon such party,
including with respect to any Securities purchased under this Agreement or Debt
Warrants at the time outstanding and held by such party (including securities
into which such Securities or Debt Warrants are convertible and for which such
Securities or Debt Warrants are exercisable) and each future holder of all such
securities.

8.6 Notices. All notices required or permitted hereunder 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 email, telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one business day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. The addresses for such communications are:

 

If to the Company:    Horizon Pharma, Inc.    520 Lake Cook Road    Deerfield,
Illinois 60015    Attn: Timothy P. Walbert    Fax: (847) 572-1372 With a copy
to:    Cooley LLP    4401 Eastgate Mall    San Diego, CA 92121    Attn: Kay
Chandler and Sean Clayton    Fax: (858) 550-6420

If to a Purchaser: To the address set forth immediately below such Purchaser’s
name on the signature pages hereto. Each party will provide ten days’ advance
written notice to the other parties of any change in its address.

8.7 Successors and Assigns. This Agreement is binding upon and inures to the
benefit of the parties and their successors and assigns. The Company will not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Purchasers and the Holders, and no Purchaser or Holder
may assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Company, except as permitted in accordance with
Section 6.9 hereof.

8.8 Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto, their respective permitted successors and assigns and the
Placement Agents, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

8.9 Further Assurances. Each party will do and perform, or cause to be done and
performed, all such further acts and things, and will execute and deliver all
other agreements, certificates, instruments and documents, as another party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

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8.10 No Strict Construction. The language used in this Agreement is deemed to be
the language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party.

8.11 Equitable Relief. The Company recognizes that, if it fails to perform or
discharge any of its obligations under this Agreement, any remedy at law may
prove to be inadequate relief to the Purchasers and Holders. The Company
therefore agrees that the Purchasers and Holders are entitled to seek temporary
and permanent injunctive relief in any such case. Each Purchaser and each Holder
also recognizes that, if it fails to perform or discharge any of its obligations
under this Agreement, any remedy at law may prove to be inadequate relief to the
Company. Each Purchaser and each Holder therefore agrees that the Company is
entitled to seek temporary and permanent injunctive relief in any such case.

8.12 Survival of Representations and Warranties. Notwithstanding any
investigation made by any party to this Agreement, all representations and
warranties made by the Company and the Purchasers herein shall survive for a
period of one year following the date hereof.

8.13 Independent Nature of Purchasers’ and Holders’ Obligations and Rights. The
obligations of each Purchaser and each Holder under this Agreement are several
and not joint with the obligations of any other Purchaser or Holder, and no
Purchaser or Holder shall be responsible in any way for the performance of the
obligations of any other Purchaser or Holder under this Agreement. Nothing
contained herein and no action taken by any Purchaser or Holder pursuant
thereto, shall be deemed to constitute the Purchasers or Holders as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers or Holders are in any way acting in
concert or as a group, or are deemed affiliates with respect to such obligations
or the transactions contemplated by this Agreement. Each Purchaser and each
Holder 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 or Holder to be joined as an
additional party in any proceeding for such purpose.

8.14 Waiver of Conflicts. Each Purchaser and each Holder acknowledges that
Cooley LLP, outside general counsel to the Company, has in the past performed
and is or may now or in the future represent one or more Purchasers or Holders
or their affiliates in matters unrelated to the transactions contemplated by
this Agreement (the “Financing”), including representation of such Purchasers or
Holder or their affiliates in matters of a similar nature to the Financing. The
applicable rules of professional conduct require that Cooley LLP inform the
Purchasers and Holders hereunder of this representation and obtain their
consent. Cooley LLP has served as outside general counsel to the Company and has
negotiated the terms of the Financing solely on behalf of the Company. Each
Purchaser and each Holder hereby (a) acknowledges that they have had an
opportunity to ask for and have obtained information relevant to such
representation, including disclosure of the reasonably foreseeable adverse
consequences of such representation; (b) acknowledges that with respect to the
Financing, Cooley LLP has represented solely the Company, and not any Purchaser
or Holder or any stockholder, director or employee of the Company or any
Purchaser or Holder; and (c) gives its informed consent to Cooley LLP’s
representation of the Company in the Financing.

8.15 Exculpation. Each Purchases and each Holder acknowledges that it is not
relying upon any person, firm or corporation, other than the Company and its
officers and directors, in making its investment or decision to invest in the
Company. Each Purchaser agrees that no other Purchaser nor the respective
controlling persons, officers, directors, partners, agents or employees of any
other Purchaser shall be liable to any other Purchaser or Holder for any action
heretofore or hereafter taken or omitted to be taken by any of them in
connection with the purchase of the Securities.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this
Agreement to be duly executed as of the date first above written.

 

HORIZON PHARMA, INC. By:  

 

Name:  

 

Title:  

 

[Signature Page to Securities Purchase Agreement]

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

[NAME OF PURCHASER / WARRANT HOLDER] By:  

 

Name:  

 

Title:  

 

[Signature Page to Securities Purchase Agreement]

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EXHIBIT A

SCHEDULE OF PURCHASERS

 

Purchaser

   Shares      Warrants      Aggregate
Purchase Price  

Essex Woodlands Health Ventures Fund VII, LP

     2,761,477         690,369       $ 9,999,998.59   

Fidelity Advisor Series I: Fidelity Advisor Dividend Growth Fund

     109,176         27,294       $ 395,353.59   

Fidelity Securities Fund: Fidelity Dividend Growth Fund

     1,015,612         253,903       $ 3,677,784.96   

Variable Insurance Products Fund III: Balanced Portfolio

     160,549         40,137       $ 581,388.07   

Fidelity Rutland Square Trust II: Strategic Advisers Core Multi-Manager Fund

     687         172       $ 2,487.80   

Fidelity Rutland Square Trust II: Strategic Advisers Core Fund

     94,695         23,674       $ 342,914.27   

Fidelity Select Portfolios: Biotechnology Portfolio

     1,278,157         319,539       $ 4,628,526.04   

Fidelity Advisor Series VII: Fidelity Advisor Biotechnology Fund

     74,949         18,737       $ 271,409.06   

Quaker BioVentures II, L.P.

     2,761,477         690,369       $ 9,999,998.59   

Ayer Capital Partners Master Fund, L.P.

     1,275,147         318,786       $ 4,617,626.07   

Ayer Capital Partners Kestrel Fund, LP

     27,956         6,989       $ 101,235.67   

Epworth-Ayer Capital

     77,636         19,409       $ 281,139.37   

Sutter Hill Associates, LLC

     367,642         91,910       $ 1,331,323.59   

Sutter Hill Ventures, A California Limited Partnership

     645,820         161,455       $ 2,338,675.68   

CD Venture GmbH

     1,104,591         276,147       $ 4,000,000.16   

Atlas Venture Fund VI, L.P.

     789,828         197,456       $ 2,860,164.65   

Atlas Venture Fund VI GmbH & Co. KG

     14,462         3,616       $ 52,370.52   

Atlas Venture Entrepreneurs’ Fund VI, L.P.

     24,153         6,038       $ 87,464.05   

NGN BioMed Opportunity I, LP

     160,276         40,069       $ 580,400.55   

NGN BioMed Opportunity I GmbH & Co KG

     115,872         28,968       $ 419,600.40   

Parallax Biomedical Fund, L.P.

     82,844         20,711       $ 299,998.84   

Iriquois Master Fund Ltd.

     69,037         17,259       $ 250,000.24   

Cowen Overseas Investment LP

     82,844         20,711       $ 299,998.84   

Capital Ventures International

     69,037         17,259       $ 250,000.24   

EkG Verwaltungs GmbH

     220,918         55,229       $ 799,999.31   

CBI GmbH

     193,303         48,325       $ 699,998.49   

ANMA GmbH

     193,303         48,325       $ 699,998.49   

ARRIVI GmbH

     55,230         13,807       $ 200,001.64   

IB INVEST Gmbh

     138,074         34,518       $ 500,000.48   

Robert Carey

     27,655         6,913       $ 100,145.67   

Carter Mack

     27,615         6,903       $ 100,000.82   

Dan Stauder

     13,807         3,451       $ 49,998.60   

Total

     14,033,829         3,508,448       $ 50,820,003.34   

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EXHIBIT B

SCHEDULE OF DEBT WARRANT HOLDERS

 

Warrant Holder

   Debt Warrants  

BPC Opportunities Fund LP

     546,199   

Beach Point Select Master Fund, L.P.

     109,240   

Beach Point Total Return Master Fund, L.P.

     273,099   

Royal Mail Pension Plan

     436,959   

FHP Pharma, L.L.C.

     1,365,496   

Quaker BioVentures II, L.P.

     546,198   

Total

     3,277,191   

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EXHIBIT C

FORM OF WARRANT