Exhibit 10.4

COMMON STOCK AND WARRANT PURCHASE AGREEMENT

Dated as of July 21, 2006

between

OSCIENT PHARMACEUTICALS CORPORATION

and

PAUL ROYALTY FUND HOLDINGS II

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TABLE OF CONTENTS

 

          Page

ARTICLE I

  

DEFINITIONS AND INTERPRETATION

   1

1.1.

  

Definitions

   1

ARTICLE II

  

AUTHORIZATION AND SALE OF COMMON STOCK AND WARRANT

   4

2.1.

  

Purchase and Sale of Common Stock and Warrant

   4

2.2.

  

Delivery of Shares and Warrant; Payment of Purchase Price

   4

ARTICLE III

  

CONDITIONS TO CLOSING

   4

3.1.

  

Representations and Warranties True

   4

3.2.

  

Closing pursuant to the Revenue Interests Assignment Agreement

   5

3.3.

  

Registration Rights Agreement

   5

3.4.

  

Asset Purchase Agreement

   5

ARTICLE IV

  

COVENANTS

   5

4.1.

  

Compliance with Agreements

   5

4.2.

  

Current Public Information; Listing

   5

4.3.

  

Reservation of Common Stock

   5

4.4.

  

Termination

   5

4.5.

  

Board Representative

   5

4.6.

  

Schedule 13D and 13G

   6

4.7.

  

Use of Proceeds

   7

ARTICLE V

  

TRANSFER OF RESTRICTED SECURITIES

   7

5.1.

  

General Provisions

   7

5.2.

  

Rule 144A

   7

5.3.

  

Legend

   7

5.4.

  

Legend Removal

   7

ARTICLE VI

  

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

   8

6.1.

  

Organization

   8

6.2.

  

Corporate Authorization

   8

6.3.

  

Authorized Capital Stock

   8

6.4.

  

Conflict.

   8

6.5.

  

SEC Documents; Financial Statements

   9

 

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TABLE OF CONTENTS

(continued)

 

          Page

6.6.

  

Incorporation of Representations and Warranties

   9

6.7.

  

Absence of Certain Changes

   9

6.8.

  

No General Solicitation

   10

6.9.

  

No Integrated Offering

   10

6.10.

  

Absence of Further Requirements

   10

ARTICLE VII

  

REPRESENTATIONS AND WARRANTIES OF PRF

   10

7.1.

  

Organization

   10

7.2.

  

Authorization

   10

7.3.

  

Investment Representations

   11

7.4.

  

Brokers

   11

7.5.

  

Absence of Further Requirements

   11

ARTICLE VIII

  

MISCELLANEOUS

   11

8.1.

  

Survival of Representations and Warranties

   11

8.2.

  

Specific Performance

   12

8.3.

  

Notices

   12

8.4.

  

Successors and Assigns

   13

8.5.

  

Indemnification

   13

8.6.

  

Entire Agreement

   15

8.7.

  

Amendments; No Waivers

   15

8.8.

  

Interpretation

   15

8.9.

  

Headings and Captions

   15

8.10.

  

Counterparts; Effectiveness

   15

8.11.

  

Severability

   16

8.12.

  

Governing Law; Jurisdiction

   16

8.13.

  

Waiver of Jury Trial

   16

 

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EXHIBITS

 

Exhibit A    —   Form of Warrant Exhibit B    —   Form of Registration Rights
Agreement Exhibit C    —   Form of Revenue Interests Assignment Agreement

 

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COMMON STOCK AND WARRANT PURCHASE AGREEMENT

COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”), dated as of
July 21, 2006 between Oscient Pharmaceuticals Corporation, a Massachusetts
corporation (the “Company”) and Paul Royalty Fund Holdings II, a California
general partnership (“PRF”).

RECITALS

WHEREAS, the Company desires to issue and sell to PRF, and PRF desires to
purchase from the Company, an aggregate of 11,111,111 shares of the authorized
and unissued shares of common stock, par value $0.10 per share, of the Company
(the “Common Stock”) and a warrant to purchase 2,304,147 shares of Common Stock
in the form attached hereto as Exhibit A (the “Warrant”).

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

1.1. Definitions. For the purposes of this Agreement, the following terms have
the meanings specified or referred to in this Section 1.1:

“Affiliate” shall mean any Person that controls, is controlled by, or is under
common control with another Person. For purposes of this definition, “control”
shall mean (i) in the case of corporate entities, direct or indirect ownership
of at least fifty percent (50%) of the stock or shares having the right to vote
for the election of directors, and (ii) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%) of the equity
interest with the power to direct the management and policies of such
non-corporate entities.

“Agreement” has the meaning set forth in the first paragraph of this Agreement.

“Antara Purchase Agreement” shall mean that certain Asset Purchase Agreement by
and among the Company, Guardian and Reliant Pharmaceuticals, Inc. dated as of
July 21, 2006, including the exhibits specifically listed therein.

“Board” shall mean the Board of Directors of the Company.

“By-laws” shall mean the Company’s By-laws, as amended.

“Closing” shall have the meaning set forth in the Revenue Interests Assignment
Agreement.

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“Closing Date” shall have the meaning set forth in the Revenue Interests
Assignment Agreement.

“Common Stock” has the meaning set forth in the Recitals.

“Company” has the meaning set forth in the first paragraph of this Agreement.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect at that time.

“GAAP” shall mean generally accepted accounting principles in the United States
in effect from time to time.

“Governmental Authority” shall mean any government, court, regulatory or
administrative agency or commission, or other governmental authority, agency or
instrumentality, whether foreign, federal, state or local (domestic or foreign),
including the United States Patent and Trademark Office, the FDA, the United
States National Institutes of Health, or any other government authority in any
country.

“Guardian” shall mean Guardian II Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of the Company formed to acquire all of
the “Acquired Assets”, as defined in the Antara Purchase Agreement.

“Indemnified Liabilities” has the meaning set forth in Section 8.6.

“Indemnitees” has the meaning set forth in Section 8.6.

“Indemnitor” has the meaning set forth in Section 8.6.

“Lien” shall mean any lien, hypothecation, charge, instrument, license,
preference, priority, security agreement, security interest, interest, mortgage,
option, privilege, pledge, liability, covenant, order, tax, right of recovery,
trust or deemed trust (whether contractual, statutory or otherwise arising) or
any encumbrance, right or claim of any other person of any kind whatsoever
whether choate or inchoate, filed or unfiled, noticed or unnoticed, recorded or
unrecorded, contingent or non-contingent, material or non-material, known or
unknown.

“Losses” shall mean collectively, any and all claims, damages, losses,
judgments, liabilities, costs and expenses (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses in connection with any
action, suit or proceeding).

“Material Adverse Effect” shall have the meaning set forth in the Revenue
Interests Assignment Agreement.

“Oscient Indemnified Party” has the meaning set forth in Section 8.5.

“Party” or “Parties” shall mean the Company and PRF.

 

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“Person” shall mean an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, but not including a
government or political subdivision or any agency or instrumentality of such
government or political subdivision.

“PRF” has the meaning set forth in the first paragraph of this Agreement.

“Purchase Price” has the meaning set forth in Section 2.2(b).

“Registration Rights Agreement” shall mean the Registration Rights Agreement,
dated as of the Closing Date, by and between the Company and PRF, attached
hereto as Exhibit B.

“Restated Articles of Organization” shall mean the Company’s Restated Articles
of Organization as amended to date.

“Restricted Securities” shall mean the Shares, the Warrant, Common Stock
underlying the Warrant issued hereunder and all shares of Common Stock issued or
issuable in respect thereof by way of a stock dividend, stock split,
combination, subdivision or other similar event. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) been distributed
to the public through a broker, dealer or market maker pursuant to Rule 144 (or
any similar provision then in force) under the Securities Act or become eligible
for sale pursuant to Rule 144(k) (or any similar provision then in force) under
the Securities Act, or (c) been otherwise transferred and new certificates for
them not bearing the Securities Act legend set forth in Section 5.3 have been
delivered by the Company in accordance with Section 5.4. Whenever any particular
securities cease to be Restricted Securities, the holder thereof shall be
entitled to receive from the Company, without expense, new securities of like
tenor not bearing a Securities Act legend of the character set forth in
Section 5.3. Any holder requesting the removal of such legend shall deliver or
cause to be delivered to the Company a certificate executed by the holder and an
opinion of such holder’s counsel, such certificate and opinion to be in form and
substance reasonably satisfactory to the Company.

“Revenue Interests Assignment Agreement” shall mean the Revenue Interests
Assignment Agreement, dated July 21, 2006, among the Company, the Guardian and
PRF, attached hereto as Exhibit C.

“SEC” shall mean the Securities and Exchange Commission and includes any
governmental authority or agency succeeding to the functions thereof.

“SEC Documents” has the meaning set forth in Section 6.5.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as the same shall be in effect
at that time.

“Shares” has the meaning set forth in Section 2.1.

 

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“Subsidiary” or “Subsidiaries” shall mean with respect to any Person (i) any
corporation of which the outstanding capital stock having at least a majority of
votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time owned, directly or indirectly, by such Person or
(ii) any other Person of which at least a majority voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by such
Person.

“Transaction Documents” shall mean the agreements, documents and instruments
expressly contemplated hereby and thereby, including the Registration Rights
Agreement.

“Warrant” has the meaning set forth in the Recitals.

ARTICLE II

AUTHORIZATION AND SALE OF COMMON STOCK AND WARRANT

2.1. Purchase and Sale of Common Stock and Warrant. At the Closing, and in
reliance upon the representations and warranties of the Company set forth herein
or in any certificate or other document delivered pursuant hereto, the Company
shall issue, sell and deliver to PRF, and PRF shall purchase from the Company at
a purchase price of $0.90 per share, 11,111,111 shares of Common Stock (the
“Shares”) and the Warrant.

2.2. Delivery of Shares and Warrant; Payment of Purchase Price.

(a) At the Closing, the Company shall issue and deliver to PRF, (i) one or more
stock certificates, duly executed by the Company and registered in the Company’s
stock ledger in PRF’s name, evidencing the Shares and (ii) a duly executed copy
of the Warrant.

(b) At the Closing, as payment in full for the Shares and Warrant being
purchased by it under this Agreement, and against delivery of the stock
certificate(s) and Warrant therefor as described in subparagraph (a) above, PRF
shall transfer to the account of the Company by wire transfer $10,000,000 (the
“Purchase Price”).

ARTICLE III

CONDITIONS TO CLOSING

The obligations of the Parties to this Agreement to consummate the transactions
contemplated by this Agreement and the Transaction Documents shall be subject to
the satisfaction of (or waiver in writing) of the following conditions
precedent:

3.1. Representations and Warranties True. The representations and warranties of
each Party contained in this Agreement that are qualified as to materiality
shall be true and correct, and all other representations and warranties of each
Party contained in this Agreement shall be true and correct in all material
respects, in each such case on and as of the Closing Date, with the same effect
as though made on and as of the Closing Date.

 

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3.2. Closing pursuant to the Revenue Interests Assignment Agreement. The Closing
as contemplated under the Revenue Interests Assignment Agreement shall have
occurred.

3.3. Registration Rights Agreement. The Company and PRF shall have entered into
the Registration Rights Agreement.

3.4. Asset Purchase Agreement. The Company shall have consummated the
transactions contemplated by the Asset Purchase Agreement by and among the
Company, Oscient/Antara Subsidiary and Reliant Pharmaceuticals, Inc.

ARTICLE IV

COVENANTS

4.1. Compliance with Agreements. The Company shall perform and observe all of
its obligations to each holder of the Shares and the Warrant set forth in the
Restated Articles of Organization, as amended, and the By-laws.

4.2. Current Public Information; Listing. The Company shall use commercially
reasonable efforts to file all reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
SEC thereunder and shall take such further action as PRF may reasonably request,
all to the extent required to enable PRF to sell Restricted Securities pursuant
to Rule 144 adopted by the SEC under the Securities Act (as such rule may be
amended from time to time) or any similar rule or regulation hereafter adopted
by the SEC. Promptly after the Closing, the Company will file with the Nasdaq
National Market, if required, the appropriate notification form for the listing
of additional shares under the rules and regulations of such exchange (and
otherwise in a form reasonably acceptable to PRF), in respect of the Shares and
the Common Stock underlying the Warrant and the Company shall use commercially
reasonable efforts to cause the Shares and the Common Stock underlying the
Warrant to at all times be listed (or traded) on one of the New York Stock
Exchange, American Stock Exchange, or the Nasdaq National Market.

4.3. Reservation of Common Stock. The Company shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrant, such number of
shares of Common Stock issuable upon the exercise of the Warrant.

4.4. Termination. Notwithstanding any other provision of this Article IV, upon
such time as PRF no longer owns any Shares or Common Stock underlying the
Warrant, the Company’s obligations pursuant to this Article IV shall terminate
(provided that the Company shall remain liable for any breach thereof prior to
such termination).

4.5. Board Representative. At the Closing, the Company shall

(a) cause the size of the Board of Directors to be increased and one director
designated by PRF, which shall initially be Gregory B. Brown, MD, to be elected
by the Board

 

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of Directors to fill the vacancy so created for a term ending at the Company’s
next annual meeting. Following such initial term, the Company shall use its best
efforts to nominate one director designated by PRF to the Company’s Board of
Directors for election by the Company’s shareholders at every shareholder
meeting at which his term would otherwise expire. In the absence of any
designation from PRF, the Company shall nominate the director previously
designated by PRF and then serving if such director is still eligible to serve
to be elected to the Company’s Board of Directors. If any vacancy created by the
resignation, removal or death of a director elected pursuant to this Section 4.5
occurs, PRF shall designate a new director to fill the vacancy created by such
resignation, removal or death and the Company shall use its best efforts to
cause the Board of Directors to appoint such director to the Board of Directors
for a term ending at the Company’s next annual meeting, at which time the
Company will use its best effort to nominate such director to the Company’s
Board of Directors for election by the Company’s Board of Directors and for
election by the Company’s shareholders at every shareholder meeting at which his
term would otherwise expire. The director designated by PRF shall resign and the
Company shall no longer be required to nominate a director designated by PRF
upon the later of the following events: (1) if PRF ceases to own at least five
(5%) percent of the Company’s Common Stock or securities convertible into the
Company’s Common Stock; (2) if the Company owes PRF less than five million
dollars ($5,000,000) under the Note pursuant to the Note Purchase Agreement
among the Parties dated as of the date hereof; (3) the provisions of part (b) of
the definition of Applicable Percentage, as defined in Section 1.01 of the
Revenue Interests Assignment Agreement, have been triggered; or (4) if the
amounts due by the Company pursuant to the Revenue Interests Assignment
Agreement cease to be due under such agreement. The Company shall reimburse the
director designated by PRF, if elected to the Board of Directors as provided
herein, for all reasonable out-of-pocket travel and other expenses as are
reimbursed to other directors on the Board, all in accordance with the Company’s
policies for reimbursement of directors. The director designated by PRF and
elected to the Board of Directors as provided herein shall also be entitled to
compensation paid to the non-employee directors of the Company.

(b) If at any time during the period pursuant to Section 4.5(a) in which PRF
shall be entitled to designate a nominee for election to the Company’s Board of
Directors and the director designated by PRF is not a member of the Board of
Directors, the Company shall invite a PRF’s designee to attend and participate
in all meetings of its Board of Directors in a nonvoting observer capacity and,
in this respect, shall give such designee copies of all notices, minutes,
consents, and other materials that it provides to its directors at the same time
and in the same manner as provided to such directors; provided, however, that
the Company reserves the right to exclude the PRF designee from access to any
notices, minutes, consents and other materials or meetings or portion thereof if
the Company believes upon advice of counsel that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect confidential
information or for other similar reasons. The Company shall reimburse the PRF
designee for all reasonable out-of-pocket travel and other expenses as are
reimbursed to other directors on the Board, all in accordance with the Company’s
policies for reimbursement of directors.

4.6. Schedule 13D and 13G. PRF agrees to provide the Company with a copy of any
Schedule 13D or 13G that PRF intends to file with the SEC in connection with its
purchase of Shares and the Warrant in advance of such filing and such 13D or 13G
shall be true and correct when filed with the SEC.

 

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4.7. Use of Proceeds. The Company shall use the proceeds from the sale of the
Shares and the Warrant to fund the purchase price of and related transaction
expenses in connection with the transactions contemplated by the Antara Purchase
Agreement. The Company shall not use any such proceeds for any other purpose.

ARTICLE V

TRANSFER OF RESTRICTED SECURITIES

5.1. General Provisions. Restricted Securities are transferable only pursuant to
(a) public offerings registered and declared effective pursuant to a
registration statement under the Securities Act, (b) Rule 144 or Rule 144A of
the SEC (or any similar rule or rules then in force) if such rule is available
and (c) any other legally available means of transfer.

5.2. Rule 144A. Upon the request of PRF, the Company shall promptly supply to
PRF all information regarding the Company required to be delivered in connection
with a transfer pursuant to Rule 144A of the SEC.

5.3. Legend. Each certificate or instrument representing Restricted Securities
shall be imprinted with a legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE
COMMON STOCK AND WARRANT PURCHASE AGREEMENT, DATED AS OF JULY 21, 2006, AND
MODIFIED FROM TIME TO TIME, BETWEEN OSCIENT PHARMACEUTICALS CORPORATION (THE
“COMPANY”) AND PAUL ROYALTY FUND HOLDINGS II, AND THE COMPANY RESERVES THE RIGHT
TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE
FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE.”

5.4. Legend Removal. If any Restricted Securities become eligible for sale
pursuant to Rule 144(k), the Company shall, upon the request of the holder of
such Restricted Securities, remove the legend set forth in Section 5.3 from the
certificates for such Restricted Securities. Any holder requesting the removal
of such legend shall deliver or cause to be delivered to the Company a
certificate executed by the holder and an opinion of such holder’s counsel, such
certificate and opinion to be in form and substance reasonably satisfactory to
the Company.

 

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ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As an inducement to PRF to enter into this Agreement and to purchase the Shares
and the Warrant, the Company hereby represents and warrants to PRF and agrees as
follows:

6.1. Organization. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of The Commonwealth of
Massachusetts, and has all corporate powers and all licenses, authorizations,
consents and approvals required to carry on its business as now conducted and as
proposed to be conducted in connection with the transactions contemplated by the
Agreement and the Transaction Documents. The Company is duly qualified to do
business as a foreign corporation and is in good standing in every jurisdiction
in which the failure to do so would have a Material Adverse Effect.

6.2. Corporate Authorization. The Company has all necessary power and authority
to enter into, execute and deliver the Agreement and the Transaction Documents
and to perform all of the obligations to be performed by it hereunder and
thereunder and to consummate the transactions contemplated hereunder and
thereunder. The Agreement and the Transaction Documents have been duly
authorized, executed and delivered by the Company and the Agreement and each
Transaction Document constitutes the valid and binding obligation of the
Company, enforceable against it in accordance with their respective terms,
subject, as to enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
or general equitable principles and except to the extent that rights to
indemnification contained in this Agreement may be limited by federal or state
securities laws or public policy relating thereto.

6.3. Authorized Capital Stock.

(a) The authorized capital stock of the Company consists of (i) 174,375,000
shares of Common Stock, of which 96,878,379 shares were issued and outstanding
as of July 19, 2006, and of which 7,769,073 have been reserved for issuance upon
exercise of granted stock options; and (ii) 625,000 shares of Series B
restricted common stock, $0.10 par value per share, of which no shares are
issued and outstanding.

(b) The Shares, when issued, sold and delivered in accordance with the terms of
this Agreement and the Restated Articles of Organization, will be duly and
validly issued, fully paid, non-assessable and free and clear of all Liens,
except any Liens created by or through PRF.

(c) The Common Stock issuable upon exercise of the Warrant will, when issued, be
duly and validly issued, fully paid, non assessable and free and clear of all
Liens, except any Liens created by or through PRF.

6.4. Conflict.

(a) Neither the execution and delivery of the Agreement or any of the
Transaction Documents nor the performance or consummation of the transactions
contemplated

 

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hereby and thereby will in any material respect: (i) contravene, conflict with,
result in a breach or violation of, constitute a default under, or accelerate
the performance provided by any provisions of: (A) to the Company’s knowledge,
any law, rule, ordinance or regulation of any Governmental Authority, or any
judgment, order, writ, decree, permit or license of any Governmental Authority,
to which the Company or any of its Subsidiaries or any of their respective
assets or properties may be subject or bound; or (B) any contract, agreement,
commitment or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of their
respective assets or properties is bound; (ii) contravene, conflict with, result
in a breach or violation of, constitute a default under, or accelerate the
performance provided by, any provisions of the certificate of incorporation or
by-laws (or other organizational or constitutional documents) of the Company or
any of its Subsidiaries; or (iii) result in the creation or imposition of any
Lien on the assets or properties of the Company or any of its Subsidiaries.

6.5. SEC Documents; Financial Statements. Since January 1, 2005, the Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the
Exchange Act (all of the foregoing filed prior to the date hereof and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the
“SEC Documents”). As of their respective dates (or in the case of any amended
SEC Document, as of the date of amendment), each SEC Document complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Document,
and none of the SEC Documents, at the time they were filed with the SEC (or in
the case of any amended SEC Document, as of the date of amendment), 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 consolidated financial statements
of the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such consolidated financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements) 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 consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). As of the date
hereof, the Company is not aware of any unresolved comments issued by the SEC
with respect to the SEC Documents.

6.6. Incorporation of Representations and Warranties. The representations and
warranties of the Company contained in Sections 3.06 through 3.17 of the Revenue
Interests Assignment Agreement are hereby incorporated by reference as if such
sections were set forth in full herein, mutatis mutandis.

6.7. Absence of Certain Changes. Since the most recent filing by the Company
with the SEC, except as set forth in any SEC Document, there has been no event
or

 

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change that, individually or in the aggregate, whether or not arising in the
ordinary course of business, would have a Material Adverse Effect.

6.8. No General Solicitation. Neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Shares and the
Warrant.

6.9. No Integrated Offering. Neither the Company, nor any of its 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 circumstances that would cause this offering of the Shares and the Warrant
to be integrated with prior offerings by the Company in violation of the
Securities Act.

6.10. Absence of Further Requirements. Other than filings with SEC or otherwise
with respect to federal or state securities law, to the Company’s knowledge no
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any governmental entity, other than those that have
been made or obtained, is necessary or required for the performance by the
Company of its obligations under the Transaction Documents or the consummation
by the Company of the transactions contemplated by the Transaction Documents.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF PRF

As an inducement to the Company to enter into this Agreement and to issue and
sell the Shares and the Warrant, PRF hereby represents and warrants to the
Company and agrees as follows:

7.1. Organization. PRF is a general partnership duly formed and validly existing
under the laws of the State of California and has all powers and all licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and as proposed to be conducted in connection with the transactions
contemplated by the Agreement and the Transaction Documents.

7.2. Authorization. PRF has all necessary power and authority to enter into,
execute and deliver the Agreement and the Transaction Documents and to perform
all of the obligations to be performed by it hereunder and thereunder and to
consummate the transactions contemplated hereunder and thereunder. The Agreement
and the Transaction Documents have been duly authorized, executed and delivered
by PRF and each Agreement and Transaction Document constitutes the valid and
binding obligation of PRF, enforceable against it in accordance with their
respective terms, subject, as to enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally or general equitable principles.

 

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7.3. Investment Representations.

(a) The Shares and the Warrant are being acquired for PRF’s own account and
without a view to the resale or distribution of the Shares or the Warrant or any
interest therein other than in a transaction exempt from registration under the
Securities Act.

(b) PRF is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act.

(c) PRF understands that the Restricted Securities being sold hereby have not
been registered under the Securities Act, or applicable state securities laws,
and are being issued in reliance on exemptions for private offerings contained
in Section 4(2) of the Securities Act and in reliance on exemptions from the
registration requirements of certain state securities laws. Because the
Restricted Securities have not been registered under the Securities Act or
applicable state securities laws, the Restricted Securities may not be
re-offered or resold except through a valid and effective registration statement
or pursuant to a valid exemption from the registration requirements under the
Securities Act and applicable state securities laws.

(d) PRF has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the Shares and the Warrant and is capable of bearing the economic risks of
such investment, including a complete loss of its investment in the Shares and
the Warrant. PRF understands that its investment in the Shares and the Warrant
involves a high degree of risk.

7.4. Brokers. PRF has not taken any action that would entitle any Person to any
commission or broker’s fee in connection with the transactions contemplated by
the Agreement and the Transaction Documents.

7.5. Absence of Further Requirements. Other than filings with the SEC or
otherwise with respect to federal or state securities law, no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental entity, other than those that have been made or
obtained, is necessary or required for the performance by PRF its obligations
under the Transaction Documents or the consummation by PRF of the transactions
contemplated by the Transaction Documents.

ARTICLE VIII

MISCELLANEOUS

8.1. Survival of Representations and Warranties.

(a) All representations and warranties made herein and in any other Transaction
Document, any certificates or in any other writing delivered pursuant hereto or
in connection herewith shall survive the execution and delivery of this
Agreement and the Closing for a period of three (3) years.

 

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(b) Any investigation or other examination that may have been made or may be
made at any time by or on behalf of the party to whom representations and
warranties are made shall not limit, diminish or in any way affect the
representations and warranties in the Transaction Documents, and the parties may
rely on the representations and warranties in the Transaction Documents
irrespective of any information obtained by them by any investigation,
examination or otherwise. All representations and warranties contained herein,
incorporated by reference herein or made in writing by any Party in connection
herewith shall survive until the first anniversary of the date of this
Agreement.

8.2. Specific Performance. Each of the parties hereto acknowledges that the
other party will have no adequate remedy at law if it fails to perform any of
its obligations under the Agreement or any of the Transaction Documents. In such
event, each of the parties agrees that the other party shall have the right, in
addition to any other rights it may have (whether at law or in equity), to
specific performance of this Agreement.

8.3. Notices. All notices, consents, waivers and communications hereunder given
by any party to the other shall be in writing (including facsimile transmission)
and delivered personally, by telegraph, telecopy, telex or facsimile, by a
recognized overnight courier, or by dispatching the same by certified or
registered mail, return receipt requested, with postage prepaid, in each case
addressed:

If to PRF to:

Paul Royalty Fund Holdings II

c/o Paul Capital Partners

140 East 45th Street, 44th Floor

New York, NY 10017

Attention: Gregory B. Brown, MD, Partner

Facsimile No.: (646) 264-1101

with a copy to:

McDermott Will & Emery LLP

227 West Monroe Street

Chicago, IL 60606-5096

Attention: Timothy R.M. Bryant

Facsimile No.: (312) 984-7700

If to the Company or any of its Subsidiaries to:

Oscient Pharmaceuticals Corporation

1000 Winter Street, Suite 2200

Waltham, MA 02451

Attention: Legal Department

Facsimile No.: (781) 398-2530

 

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with a copy to:

Ropes & Gray LLP

One International Place

Boston, MA 02110

Attention: Patrick O’Brien, Esq.

Facsimile No.: (617) 951-7050

or to such other address or addresses as PRF or the Company or its Subsidiaries
may from time to time designate by notice as provided herein, except that
notices of changes of address shall be effective only upon receipt. All such
notices, consents, waivers and communications shall: (a) when posted by
certified or registered mail, postage prepaid, return receipt requested, be
effective three (3) Business Days after dispatch, unless such communication is
sent trans-Atlantic, in which case they shall be deemed effective three
(3) Business Days after dispatch, (b) when telegraphed, telecopied, telexed or
facsimiled, be effective upon receipt by the transmitting party of confirmation
of complete transmission, or (c) when delivered by a recognized overnight
courier or in person, be effective upon receipt when hand delivered.

8.4. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. The Company shall not be entitled to assign any of its
obligations and rights under the Agreement or the Transaction Documents without
the prior written consent of PRF. PRF shall not be entitled to assign without
the consent of the Company any of its obligations and rights under the Agreement
without the prior written consent of the Company.

8.5. Indemnification.

(a) The Company hereby indemnifies and holds PRF and its Affiliates and any of
their respective partners, directors, managers, members, officers, employees and
agents (each a “Investor Indemnified Party”) harmless from and against any and
all Losses (including all Losses in connection with any product liability claims
or claims of infringement or misappropriation of any intellectual property
rights of any Third Parties) incurred or suffered by any Investor Indemnified
Party arising out of any breach of any representation, warranty or certification
made by the Company in the Agreement or any of the Transaction Documents or
certificates given by the Company in writing pursuant hereto or thereto or any
breach of or default under any covenant or agreement by the Company pursuant to
the Agreement or any Transaction Document.

(b) PRF hereby indemnifies and holds the Company, its Affiliates and any of
their respective partners, directors, managers, officers, employees and agents
(each an “Oscient Indemnified Party”) harmless from and against any and all
Losses incurred or suffered by an Oscient Indemnified Party arising out of any
breach of any representation, warranty or certification made by PRF in the
Agreement or any of the Transaction Documents or certificates given by PRF in
writing pursuant hereto or thereto or any breach of or default under any
covenant or agreement by PRF pursuant to the Agreement or any Transaction
Document.

 

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(c) If any claim, demand, action or proceeding (including any investigation by
any Governmental Authority) shall be brought or alleged against an indemnified
party in respect of which indemnity is to be sought against an indemnifying
party pursuant to the preceding paragraphs, the indemnified party shall,
promptly after receipt of notice of the commencement of any such claim, demand,
action or proceeding, notify the indemnifying party in writing of the
commencement of such claim, demand, action or proceeding, enclosing a copy of
all papers served, if any; provided, that the omission to so notify such
indemnifying party will not relieve the indemnifying party from any liability
that it may have to any indemnified party under the foregoing provisions of this
Section 8.5 unless, and only to the extent that, such omission results in the
forfeiture of, or has a Material Adverse Effect on the exercise or prosecution
of, substantive rights or defenses by the indemnifying party. In case any such
action is brought against an indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 8.5 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. In any
such proceeding, an indemnified party shall have the right to retain its own
counsel, but the reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel,
(ii) the indemnifying party has assumed the defense of such proceeding and has
failed within a reasonable time to retain counsel reasonably satisfactory to
such indemnified party or (iii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential conflicts of interests between them
based on the advice of such counsel. It is agreed that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate law firm (in addition to local counsel where necessary) for all such
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

(d) No claim may be made for indemnification pursuant to this Section 8 unless
written notice of such claim, in reasonable detail, is given to the Company or
to PRF, as the case may be, (i) with respect to any breach of any
representation, warranty or certification made by the Company in the Agreement
or any of the Transaction Documents, within the three-year period following the
Closing Date or (ii) with respect to all other matters, including any default
under any covenant or agreement by the Company pursuant to the Agreement or any
Transaction Document, at any time following the Closing Date.

 

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8.6. Entire Agreement. This Agreement, together with the Exhibits hereto (which
are incorporated herein by reference), and the other Transaction Documents
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements (including the Term Sheet for
Purchase of Revenue Interest, Debt and Equity from Oscient Pharmaceuticals
Corporation dated June 29, 2006 between Paul Capital Advisors, LLC and the
Company), understandings and negotiations, both written and oral, between the
parties with respect to the subject matter of this Agreement; provided, however,
the terms of that certain Confidential Disclosure Agreement by and between the
Company and PRF dated as of June 8, 2006 shall continue in effect. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein (or in the Exhibits or other Transaction Documents) has been
made or relied upon by either party hereto. None of this Agreement, nor any
provision hereof, is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.

8.7. Amendments; No Waivers.

(a) This Agreement or any term or provision hereof may not be amended, changed
or modified except with the written consent of the parties hereto. No waiver of
any right hereunder shall be effective unless such waiver is signed in writing
by the party against whom such waiver is sought to be enforced.

(b) No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

8.8. Interpretation. When a reference is made in this Agreement to Articles,
Sections, Schedules or Exhibits, such reference shall be to an Article, Section,
Schedule or Exhibit to this Agreement unless otherwise indicated. The words
“include”, “includes” and “including” when used herein shall be deemed in each
case to be followed by the words “without limitation”. Neither party hereto
shall be or be deemed to be the drafter of this Agreement for the purposes of
construing this Agreement against one party or the other.

8.9. Headings and Captions. The headings and captions in this Agreement are for
convenience and reference purposes only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.

8.10. Counterparts; Effectiveness. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other parties hereto. Any counterpart may be executed by facsimile or pdf
signature and such facsimile or pdf signature shall be deemed an original.

 

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8.11. Severability. If any provision of this Agreement is held to be invalid or
unenforceable, the remaining provisions shall nevertheless be given full force
and effect.

8.12. Governing Law; Jurisdiction.

(a) This Agreement shall be governed by, and construed, interpreted and enforced
in accordance with, the laws of the State of New York, without giving effect to
the principles of conflicts of law thereof.

(b) Any legal action or proceeding with respect to this Agreement or any other
Transaction Document may be brought in any state or federal court of competent
jurisdiction in the state, county and city of New York. By execution and
delivery of this Agreement, each party hereto hereby irrevocably consents to and
accepts, for itself and in respect of its property, generally and
unconditionally the non-exclusive jurisdiction of such courts. Each party hereto
hereby further irrevocably waives any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, which it may
now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of any Transaction Document.

(c) Each party hereto hereby irrevocably consents to the service of process out
of any of the courts referred to in subsection (b) above of this Section 8.12 in
any such suit, action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at its address set forth in
this Agreement. Each party hereto hereby irrevocably waives any objection to
such service of process and further irrevocably waives and agrees not to plead
or claim in any suit, action or proceeding commenced hereunder or under any
other Transaction Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of a party to serve process
on the other party in any other manner permitted by law.

8.13. Waiver of Jury Trial. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any action, proceeding, claim or counterclaim arising out of or relating to
the Agreement or any Transaction Document or the transactions contemplated
hereunder or under any Transaction Document. This waiver shall apply to any
subsequent amendments, renewals, supplements or modifications to the Agreement
or any Transaction Document.

 

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IN WITNESS WHEREOF, the Parties have caused this Common Stock and Warrant
Purchase Agreement to be executed the day and year first above written by its
duly authorized officer or agent.

 

OSCIENT PHARMACEUTICALS CORPORATION By:   /s/ Steven M. Rauscher Name:   Steven
M. Rauscher Title:   President and Chief Executive Officer PAUL ROYALTY FUND
HOLDINGS II By:   Paul Royalty Fund II, LP, its Managing Partner By:   Paul
Capital Royalty Management, LLC, its General Partner By:   Paul Capital
Advisors, LLC, its Manager By:   /s/ Gregory B. Brown Name:   Gregory B. Brown,
MD Title:   Member