EXHIBIT 10.1
INVESTMENT AND SHAREHOLDERS’ AGREEMENT
Spepharm Holding B.V.
by and among

1.   TVM Life Science Ventures VI L.P., c/o M&C Corporate Services Ltd., P.O.
Box 309, Ugland House, South Church Street, Grand Cayman, Cayman Islands

- hereinafter referred to as “TVM LP” -

2.   TVM Life Science Ventures VI GmbH & Co. KG, Maximilianstr. 35 c, D-80539
Munich, Germany

- hereinafter referred to as “TVM KG” -

3.   Life Sciences Opportunities Fund (Institutional) II, L.P., 126 East 56 th
Street, 28 th Floor, New York, NY 10022, U.S.A.

- hereinafter referred to as “LSOFI” -

4.   Life Sciences Opportunities Fund II, L.P., 126 East 56 th Street, 28 th
Floor, New York, NY 10022, U.S.A.

- hereinafter referred to as “LSOF” -

5.   ARCADE SARL, 40 Rue des Mathurins, 75008 Paris, France

- hereinafter referred to as “ARCADE” -
- TVM LP, TVM KG, LSOFI, LSOF and ARCADE hereinafter referred to as “Investors”
-
as well as

6.   Valera Pharmaceuticals Inc., 7 Clarke Drive, Cranbury, NJ, USA 08512-3617

- hereinafter referred to as “Valera” -
- Valera and the Investors as well as other future shareholders of Spepharm
Holding B.V., which may accede to this
Shareholders Agreement, hereinafter referred to as “Shareholders” -
and

7.   Jean-François Labbé, 27 Allée des Bocages, 78110 Le Vésinet, France

- hereinafter referred to as “JFLAB” -
as well as, upon its incorporation and accession hereto,

8.   Spepharm Holding B.V., c/o Mr Wim van Bree, Heinsiuslaan 43, 3818 JG
Amersfoort, The Netherlands

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- hereinafter referred to as the “Company” -.
All of the above stated parties — as well as any third party that accedes to
this Investment and Shareholders’ Agreement (“this Agreement”) in the future as
of such accession — hereinafter: the “Parties”.

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Recitals
Sec. 1 Foundation of Spepharm and Loan Commitment by LSOFI and LSOF
Sec. 2 First Capital Increase
Sec. 3 Second Capital Increase
Sec. 4 General Obligations with regard to Capital Increases / Syndication
Sec. 5 Default on Investment Obligation
Sec. 6 Valera’s Covenant to obtain Shire Waiver/Licence
Sec. 7 Other Covenants
Sec. 8 Intellectual Property Rights
Sec. 9 Transfer of Shares / Notification
Sec. 10 Rights of First Refusal
Sec. 11 Tag-Along Rights
Sec. 12 Drag-Along Rights
Sec. 13 Restrictions of Transfer
Sec. 14 Share Transfers and Share Issuance under Accession to this Agreement
Sec. 15 Transfers to Affiliated Companies and Funds
Sec. 16 Stock Incentive Scheme
Sec. 17 Supervisory Board
Sec. 18 Information
Sec. 19 Refinancing by KfW
Sec. 20 Effective Date / Succession of Rights
Sec. 21 Delivery Addresses and Authorised Recipients
Sec. 22 Amendments to and Cancellation of this Agreement
Sec. 23 Miscellaneous

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Recitals
Valera and the Investors intend to jointly create, incorporate and finance a
Dutch B.V. under the name of Spepharm Holding B.V. with its registered office in
Amsterdam to serve as the parent company of a European specialty pharmaceutical
group of companies with the vision to become one of the leading suppliers of
specialty urology and endocrinology products to the European market place. For
this purpose and in order to regulate the legal relationship among themselves as
future shareholders of the Company, Valera and the Investors enter into the
following agreement, which they expect the Company to accede to in due course:
Sec. 1
Foundation of Spepharm and Loan Commitment by LSOFI and LSOF

(1)   Immediately after signing this Agreement, the Investors and Valera shall
set up a new B.V. under Dutch law to be named Spepharm Holding B.V. (the
“Company”), and shall provide all information necessary to apply to the ministry
of justice for its consent to the Company’s incorporation. The Investors and
Valera shall be entitled and obliged to subscribe for the Company’s initial
shares and make payments in the following amounts (with the term “cost”
referring to Sec. 23 (4) below):

                          Payment in EUR     Shares   Nominal   Premium   Total
TVM LP
  181,700   1,817   668,396 - cost   670,213 - cost
 
               
TVM KG
  655,400   6,554   2,410,935 - cost   2,417,489 - cost
 
               
LSOFI
  469,900   4,699   1,728,561 - cost   1,733,260 - cost
 
               
LSOF
  84,100   841   309,368 - cost   310,209 - cost
 
               
ARCADE
  88,100   881   324,082 - cost   324,963 - cost
 
               
Valera
  367,492   3,674.92   —   3,674.92

The payments of the nominal amounts shall be effected to the Company’s bank
account and the payments of the premium shall be effected to a notary’s third
party account, in each case immediately upon the consent to the Company’s
incorporation by the ministry of justice having been granted. Without delay upon
the receipt of all payments set forth above on the Company’s bank account and on
the notary’s third party account, respectively, the notarial deed for
incorporation of the Company shall be executed.

(2)   The Shareholders shall adopt articles of association for the Company in
the form set out in Appendix 1.2.

(3)   JFLAB shall become the Company’s initial director. Immediately after the
foundation deed of the Company has been executed, JFLAB shall offer to the
Company the conclusion of a service agreement at terms and conditions as set
forth in Appendix 1.3.

(4)   The Shareholders shall appoint Messrs. David Tierney, James Gale, Hubert
Birner and Bernd Seibel as members of the Company’s initial supervisory board.
The Parties shall, to the extent legally permissible and respecting the
independence of the supervisory board and its members, use their best efforts
and all the influence they have to the effect that the supervisory board adopts
the Rules of Procedure for the Management as set forth in Appendix 1.4
immediately upon their appointment.

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(5)   LSOFI and LSOF undertake to grant to the Company, immediately upon the
Company’s incorporation, short term loans in the amount of EUR 890,568 and EUR
159,432, respectively, at the terms and conditions set forth in the draft loan
agreement as attached hereto as Appendix 1.5.

Sec. 2
First Capital Increase

(1)   If the Company requires additional funds, it shall inform the Shareholders
accordingly in writing. Each Investor shall, within six weeks as of receipt of
such information, notify the Company and the Shareholders whether such Investor
supports the additional funding. If Investors, who hold (together) a Qualified
Investor Majority (as defined in Sec. 23 (1) below), notify the Company and the
Shareholders within such six weeks period of their support of the additional
funding, the Company shall without delay call for a written shareholders
resolution of an increase of the Company’s share capital from EUR 18,466.92 by
up to EUR 25,536.83 to up to EUR 44,003.75 by issuing new shares in the Company
(the “First Capital Increase”) to Valera and the Investors. All Shareholders
shall participate in, and vote in favour of, the resolution on the First Capital
Increase, waiving all requirements as to the form and time period for calling
such shareholders resolution.

(2)   The Investors shall then each be entitled and obliged to subscribe for the
Company’s new             shares from the First Capital Increase and make
payments in the following amounts (with the term “cost” referring to Sec. 23
(4) below):

                          Payment in EUR     Shares   Nominal   Premium   Total
TVM LP
  86,000   860   316,357 - cost   317,217 – cost
 
               
TVM KG
  310,400   3,104   1,141,828 - cost   1,144,932 – cost
 
               
LSOFI
  576,300   5,763   2,119,960 - cost   2,125,723 – cost
 
               
LSOF
  103,200   1,032   379,629 - cost   380,661 – cost
 
               
ARCADE
  88,100   881   —   881

provided, that one or more third party investors (or any of the Investors) agree
to subscribe for new shares from the First Capital Increase and make payments in
the following amounts:

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                                      Payment in EUR     Shares   Nominal  
Premium   Total
Third party investor(s)
    881,500       8.815     3,242,660 — cost   3,251,475 – cost

The payments set forth above in this Sec. 2 (2) shall be effected, within one
week after the resolution on the First Capital Increase has been taken, to a
notary’s third party account, instructing the notary to pay these amounts to the
Company upon the execution of the notarial deed on the First Capital Increase
and issuance of the new shares as set forth in the above table.

(3)   Immediately upon payment of all of the above stated amounts, but in any
event after the lapse of four weeks as of the Shareholders’ resolution on the
First Capital Increase, the Company shall inform Valera on the extent to which
the First Capital Increase has been subscribed and paid pursuant to Sec. 2 (2),
and shall offer to issue to Valera 19.9% of the entire new shares from the First
Capital Increase (i.e., the aggregate amount of the new shares subscribed and
paid for pursuant to Sec. 2 (2) plus the shares to be allotted to Valera
pursuant to this Sec. 2 (3) so that following such issuance Valera would own
19.9%, or – in case of Sec. 6 (2) – 19.4%, of the outstanding shares of the
Company) at a price that equals such shares’ nominal amount. Valera shall
subscribe and pay for those shares within one week as of receipt of such offer,
or the offer shall lapse. Valera’s payment shall be made to the same notary’s
third party account as used for the purpose of Sec. 2 (2), equally instructing
the notary to pay these amounts to the Company upon the execution of the
notarial deed on the First Capital Increase and issuance of the respective new
shares to Valera.

(4)   In addition to the payment set forth to be made to the Company by ARCADE
in the table in Sec. 2 (2), ARCADE hereby commits towards the Shareholders, but
without obliging itself towards the Company, and provided that the Company has
not filed for insolvency or has become obliged to file for insolvency prior to
such payment, to make an additional payment of EUR 324,082 minus cost (see Sec.
23 (4) below) into the Company’s capital reserves at the latest immediately
prior to any of the following events: (i) a Trade Sale (as defined in Sec. 12
(1) below); (ii) an initial public offering of shares of the Company; (iii) the
liquidation of the Company (but not in the context of an insolvency); and
(iv) any transfer of any shares by ARCADE except for share transfers under Sec.
15 (1) if the acquirer assumes this payment obligation. Nothing in this Sec. 2
(4) shall be interpreted to grant to the Company any right or claim to the
additional payment by ARCADE.

Sec. 3
Second Capital Increase

(1)   If after implementation of the First Capital Increase the Company requires
additional funds, it shall inform the Shareholders accordingly in writing. Each
Investor shall, within six weeks as of receipt of such information, notify the
Company and the Shareholders whether such Investor supports the additional
funding. If Investors, who hold (together) a Qualified Investor Majority (as
defined in Sec. 23 (1) below), notify the Company and the Shareholders within
such six weeks period of their support of the additional funding, the Company
shall without delay call for a written shareholders resolution of a further
increase of the Company’s share capital by up to EUR 23,691.64 by issuing new
shares in the Company (the “Second Capital Increase”) to Valera and the
Investors. All Shareholders shall participate in, and vote in favour of, the
resolution on the Second Capital Increase, waiving all requirements as to the
form and time period for calling such shareholders resolution.

(2)   The Investors shall then each be entitled and obliged to subscribe for the
Company’s new shares from the Second Capital Increase and make payments in the
following amounts:

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                          Payment in EUR     Shares   Nominal   Premium   Total
TVM LP
  144,200   1,442   530,450   531,892
 
               
TVM KG
  520,100   5,201   1,913,225   1,918,426
 
               
LSOFI
  563,400   5,634   2,072,507   2,078,141
 
               
LSOF
  100,900   1,009   371,168   372,177
 
               
ARCADE
  95,000   950   —   950
 
               
Third party investor(s)
  474,100   4.741   1,744,011   1,748,752

Such payments shall be effected, within one week after the resolution on the
Second Capital Increase has been taken, to a notary’s third party account,
instructing the notary to pay these amounts to the Company upon the execution of
the notarial deed on the Second Capital Increase and issuance of the new shares
as set forth in the above table.

(3)   Immediately upon payment of all of the above stated amounts, but in any
event after the lapse of four weeks as of the Shareholders’ resolution on the
Second Capital Increase, the Company shall inform Valera on the extent to which
the Second Capital Increase has been subscribed and paid pursuant to Sec. 3 (2),
and shall offer to issue to Valera 19.9%, or – in case of Sec. 6 (2) – 19.4%, of
the entire new shares from the Second Capital Increase (i.e., the aggregate
amount of the new shares subscribed and paid for pursuant to Sec. 3 (2) plus the
shares to be allotted to Valera pursuant to this Sec. 3 (3) so that following
such issuance Valera would own 19.9%, or – in case of Sec. 6 (2) – 19.4%, of the
outstanding shares of the Company, provided that Valera has fully subscribed to
the shares offered to Valera pursuant to Sec. 2 (3)) at a price that equals such
shares’ nominal amount. Valera shall subscribe and pay for those shares within
one week as of receipt of such offer, or the offer shall lapse. Valera’s payment
shall be made to the same notary’s third party account as used for the purpose
of Sec. 3 (2), equally instructing the notary to pay these amounts to the
Company upon the execution of the notarial deed on the Second Capital Increase
and issuance of the respective new shares to Valera.

(4)   In addition to the payment set forth to be made to the Company by ARCADE
in the table in Sec. 3 (2), ARCADE hereby commits towards the Shareholders, but
without obliging itself towards the Company, and provided that the Company has
not filed for insolvency or has become obliged to file for insolvency prior to
such payment, to make an additional payment of EUR 349,464 (on top of the
additional payment under Sec. 2 (2) above) into the Company’s capital reserves
at the latest immediately prior to any of the following events: (i) a Trade Sale
(as defined in Sec. 12 (1) below); (ii) an initial public offering of shares of
the Company; (iii) the liquidation of the Company (but not in the context of an
insolvency); and (iv) any transfer of any shares by ARCADE except for share
transfers under Sec. 15 (1) if the acquirer assumes this payment obligation.
Nothing in this Sec. 3 (4) shall be interpreted to grant to the Company any
right or claim to the additional payment by ARCADE.

Sec. 4
General Obligations with regard to Capital Increases / Syndication

(1)   To the extent necessary to implement Secs. 2 and 3, the Shareholders shall
waive their statutory subscription rights for the First and Second Capital
Increase.

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(2)   The Parties shall make any and all statements and undertake any and all
actions necessary or appropriate, including the co-operation with the execution
of any relevant notarial deeds, to implement the aforesaid resolutions set out
in Secs. 1 to 3 as soon as reasonably practicable.

(3)   Each of the Investors listed on the cover page of this Agreement shall be
entitled to transfer and assign its rights and obligations to subscribe and pay
for shares from the First and Second Capital Increase to a third party, provided
that such third party (i) meets the approval of Shareholders who hold
(together) a majority of the shares held by all Shareholders at the time of the
approval, and (ii) accedes to this Agreement as an Investor by a syndication and
accession agreement as set forth in draft form as Appendix 4.3a hereto, which
shall be accepted on behalf of all Parties by the respective Investor who
transfers and assigns its rights and obligations. The same requirements shall
apply to the third party investor or third party investors envisaged in Secs.
2(2) and 3(2) to invest in the First and Second Capital Increase, except that in
such case, such third party investor shall accede to this Agreement as an
Investor by an accession agreement as set forth in draft form as Appendix 4.3b,
which shall be accepted on behalf of all Parties by any of the Investors.

Sec. 5
Default on Investment Obligation

(1)   If an Investor fails (i) to subscribe for shares from the First or Second
Capital Increase, or (ii) to make any of the payments under Sec. 2 (2) and 3
(2), in each case within the time period provided for with regard to such
subscription or payment in the respective Sections above plus a grace period of
one additional week (“Default”), such Investor’s right to acquire shares from
the respective First or Second Capital Increase shall lapse. In addition, such
Investor (the “Defaulting Investor”) shall be obliged to transfer 50% of the
shares held by such Investor at that time to the other Shareholders (who shall
be entitled to acquire such shares pro rata to their shareholdings) for an
aggregate consideration of EUR 1, such amount to be pro rated among the
Shareholders receiving such transferred shares. The share transfer shall be
implemented without delay upon the lapse of the respective applicable time
period plus the grace period of one week, and the Defaulting Investor shall, in
particular, provide all co-operation needed for the execution of the notarial
deed of the share transfer. Secs. 9 – 11 of this Agreement shall not apply to
such share transfer. The Company shall immediately inform all Shareholders of
such lapse of time and failure to subscribe or make payments.

(2)   Each Investor hereby assigns, subject to the condition precedent that he
commits a Default, all of the Relevant Claims (as defined hereinafter) to all
other Shareholders (at the time of Default) pro rata to their shareholdings at
the time of Default. The Relevant Claims are 50% of all claims of the Defaulting
Investor for dividends, liquidation proceeds, trade sale proceeds and redemption
compensation with respect to all of the shares held by him at the time of
Default, provided, however, that such claims arise or become payable in the time
period between the Default and the share transfer pursuant to Sec. 5 (1).

Sec. 6
Valera’s Covenant to obtain Shire Waiver/Licence

(1)   Valera hereby undertakes to obtain from Shire US Inc. a license to the
Development Data for the development, manufacture, use, supply and sale of the
Licensed Product in Ireland (each capitalised term as defined in the Termination
Agreement, License Back and Option dated 21 December 2001 between Hydro Med
Sciences, Inc. (n/k/a Valera Pharmaceuticals, Inc.) and Shire US Inc.).

(2)   If Valera fails to obtain from Shire such license by the lapse of six
months as of the date of incorporation of the Company, Valera shall transfer to
the Company without consideration such number of Valera’s shares which represent
0.5% of the entire outstanding shares of the Company at that time. All Parties
shall in such event, without delay upon the lapse of six

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    months after the incorporation of the Company, take all steps, measures and
resolutions necessary to implement such share transfer, including – but not
limited to – the shareholders resolution on the Company’s acquisition of such
shares and the Company’s consent to such share transfer. Secs. 9 – 11 shall not
apply to such share transfer.

Sec. 7
Other Covenants

(1)   Valera and the Investors shall ensure that immediately upon the Company’s
incorporation the Company will accede to this Agreement by signing it.

(2)   Valera hereby offers to the Company or any of its subsidiaries the
conclusion of the Licence and Distribution Agreement set out in Appendix 7.2,
and all Parties shall ensure that the Company or its appropriate subsidiary
without delay accepts such offer and enters into said Distribution and Licence
Agreement upon the Company’s or the appropriate subsidiary’s incorporation.

(3)   It is the parties’ joint intention that the Company sets up subsidiaries
and a structure as set out in Appendix 7.3 as amended from time to time by the
Company’s management with the approval of the Company’s supervisory board. The
Parties shall make any and all statements and undertake any and all actions
necessary or appropriate to implement the aforesaid structure as soon as
reasonably practicable, provided, however, that no Shareholder shall be obliged
under this Sec. 7.3 to accept or enter into any financial obligations other than
expressly provided for in this Agreement. The Parties agree to procure that the
articles of association or similar instruments of any future subsidiaries of the
Company will be established in such a manner that they will provide that prior
approval of the respective subsidiary’s shareholders meeting shall be required
for those resolutions or actions by such subsidiary’s management for which, if
such resolution or action was to be taken by the management of the Company, the
management would require the consent of the Company’s supervisory board, thus
ensuring that any such resolution or action ultimately requires the consent of
the supervisory board of the Company.

(4)   All Parties shall ensure that the Company without delay upon its
incorporation issues the Management Rights Letter attached in draft form as
Appendix 7.4 hereto to TVM LP as well as to TVM KG. By signing and acceding to
this Agreement, the Company undertakes to issue such Management Right Letters
without delay.

Sec. 8
Intellectual Property Rights

(1)   The parties agree that JFLAB does not have any rights in or relating to
intellectual property rights (including, without limitation, any inventions,
patents, copyrights and other industrial property rights, especially with a view
to software and related materials or rights for remuneration) (hereinafter
collectively referred to as the “IP Rights”) in the field of speciality urology
and endocrinology products (the “Field”). For the avoidance of doubt, JFLAB
hereby offers to transfer to the Company or the appropriate subsidiary, to the
extent legally possible, any and all IP Rights owned by him in the Field without
any additional compensation. Where such transfer is not possible for any legal
reasons, JFLAB herewith offers to grant to the Company or the appropriate
subsidiary an exclusive and irrevocable licence to use such IP Rights for all
currently known uses without any fee or other consideration being payable. The
offered grant of licence is as broad as legally possible and shall specifically,
without limitation, be unlimited (in respect of duration, territorial scope and
scope of the rights concerned), exclusive, transferable and shall include the
right to modify the IP Rights and to grant sub-licences to third parties. The
licence shall also include the permanent or temporary reproduction of the work
results by any means and in any form, in part or in whole, the loading,
displaying, running, transmission or storage of the work results, the
translation,

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    adaptation, arrangement and any other alteration of the work results and the
reproduction of the results thereof, without prejudice to the rights of the
person who alters the work results, any form of distribution to the public,
including the rental, of the original work results or of copies thereof, and the
right to make available to the public the work results by any means.

(2)   Where the above transfer of rights and the grant of licences requires any
further deeds, acts or declarations, JFLAB agrees to give and make any such
deeds, acts and declarations forthwith. Any costs accruing in this context shall
be borne by the Company or the appropriate subsidiary.

(3)   At the request of the Company or the appropriate subsidiary, JFLAB shall
demonstrate and explain all IP Rights, know-how and any knowledge or work
results in the Field to an expert named by the Company or the appropriate
subsidiary and answer all questions such expert may have. JFLAB shall make
available to the Company or the appropriate subsidiary all of his documentation
on IP Rights, know-how and any knowledge or work results in the Field.

Sec. 9
Transfer of Shares / Notification

(1)   In the event that a Shareholder intends to transfer all or part of his
shares in the Company to any third person (including other Shareholders) with or
without consideration, or to enter into any commercially equivalent transaction
(the “Selling Shareholder”), the Selling Shareholder shall be obliged to notify
the other Shareholders of such intent in writing (the “Notification”) with a
copy to the chairman of the Company’s supervisory board.

(2)   The Notification of the Selling Shareholder shall contain the following
information:

  a)   name / firm name and address / registered office of the Selling
Shareholder;     b)   name / firm name and address / registered office of the
prospective purchaser;     c)   description of business of the prospective
purchaser;     d)   purchase price or other consideration for the proposed
transfer, if any;     e)   due date for payment of the purchase price and / or
other consideration, if any;     f)   number of shares to be transferred;     g)
  representations and warranties as well as indemnities to be given and
covenants to be assumed by each party to the proposed transfer.

(3)   If, however, the Selling Shareholder intends to transfer shares for
consideration other than cash, the Selling Shareholder shall, for the purpose of
the right of first refusal under Sec. 10, indicate in the Notification the value
of any non-cash consideration in cash according to the consideration’s fair
market value. In the event that another Shareholder has reasonable doubt as to
the accuracy of the consideration’s value, such Shareholder (the “Objecting
Shareholder”) shall inform the Selling Shareholder accordingly in writing within
two weeks as of the receipt of the Notification, indicating the value which the
Objecting Shareholder believes to be accurate, with a copy of such information
to all other Shareholders. If the Objecting Shareholder and the Selling
Shareholder do not agree within a period of one week on the value of the
non-cash consideration or on an expert to ultimately determine the non-cash
consideration’s fair market value, such value shall be ultimately determined by
an auditor nominated by the chairman of the Dutch Institute for Chartered
Accountants (Nederlands Instituut voor Register Accountants – NIVRA -) (the
agreed expert or auditor nominated by NIVRA hereinafter: the “Expert”). Such
determination by the Expert shall be finally binding for the purpose of the
right of first refusal under Sec. 10. The Selling Shareholder shall notify in
writing all other Shareholders of the so determined fair market value of the
non-cash consideration immediately upon its determination with a copy to the
chairman of the Company’s supervisory board, and the Notification shall be
deemed accordingly amended with regard to the purchase price / consideration,
and received by the other Shareholders only

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    upon receipt of the notification on the non-cash consideration’s fair market
value as determined by the Expert. The cost of the Expert’s determination of the
non-cash consideration’s fair market value shall be borne by the Objecting
Shareholder, if the determined value is closer to the Selling Shareholder’s
indication of value in the Notification, and by the Selling Shareholder if the
determined value is closer to the Objecting Shareholder’s indication of value.

Sec. 10
Rights of First Refusal

(1)   In the event that a Shareholder intends to sell his present or future
shares in the Company for consideration (purchase / swap / contribution against
shareholder’s rights, etc.) the Shareholders (other than the Selling
Shareholder) shall have a right of first refusal as set forth in the following
provisions to acquire the shares, which the Selling Shareholder intends to sell,
at the terms and conditions set forth in the Notification pursuant to Sec. 9
(2) and (3).

(2)   Within 30 days of receipt of the Notification, each Shareholder (other
than the Selling Shareholder), who wishes to exercise a right of first refusal,
shall state in writing to the Selling Shareholder the maximum number of shares
(the “Acquisition Limit”) he is willing to acquire at the terms and conditions
set forth in the Notification pursuant to Sec. 9 (2) and (3) (hereinafter: the
“Purchase Statement”) with a copy to the chairman of the Company’s supervisory
board. Such statement shall be binding in accordance with Sec. 10 (3), (4) and
(5) below.

(3)   If the aggregate number of shares that all Shareholders (other than the
Selling Shareholder) have stated to be willing to acquire within the aforesaid
30-day-period falls short of the aggregate number of shares which the Selling
Shareholder intends to sell pursuant to the Notification, the Selling
Shareholder shall inform all other Shareholders accordingly, and no right of
first refusal shall apply at all. The Selling Shareholder, subject to the
Shareholders’ Tag-Along Rights pursuant to Sec. 11 and the provisions of Sec.
14, shall be entitled to sell his shares, but only in strict accordance with the
Notification, within two months upon the lapse of the aforesaid 30-days-period.
The purchase agreement between the Selling Shareholder and the purchaser shall
be submitted to the chairman of the Company’s supervisory board for review
immediately.

(4)   If the Shareholders (other than the Selling Shareholder) within the
30-day-period set forth in Sec. 10 (2) state to be willing to acquire in
aggregate all of, or even more than, the shares which the Selling Shareholder
intends to sell pursuant to the Notification, the Shareholders, who have issued
a Purchase Statement, shall have (and shall be deemed to have exercised by way
of their Purchase Statements) a right of first refusal with regard to all of the
shares, which the Selling Shareholder intends to sell. Such right of first
refusal shall vest with its holders (and be deemed to be exercised by way of the
Purchase Statements) — up to each holder’s Acquisition Limit — pro rata to their
shareholdings (including common shares, if any) inter se if and to the extent
that more than one Shareholder have issued Purchase Statements.

(5)   If a right of first refusal applies pursuant to Sec. 10 (4), the Selling
Shareholder shall be obliged vis-à-vis each holder of such right of first
refusal, and each holder of such right of first refusal shall be obliged
vis-à-vis the Selling Shareholder, to sell/purchase and transfer shares in
accordance with (i) the terms and conditions set forth in the Notification
pursuant to Sec. 9 (2) and (3), and (ii) the respective Purchase Statement
pursuant to Sec. 10 (2) above and allocation pursuant to Sec. 10 (4) above.

Sec. 11
Tag-Along Rights

(1)   The Shareholders shall be entitled to request from any Selling
Shareholder, to the extent that the latter is entitled under Sec. 10 (3) to sell
shares to the purchaser named in the Notification and provided that the
purchaser is not one of the Shareholders, to co-sell shares held by the
Shareholders (other than the Selling Shareholder) to the purchaser named in the
Notification at

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    the same terms and conditions as stated therein (the “Tag-Along Right”).
Each Shareholder (other than the Selling Shareholder) may (i) request the
co-sale of shares and (ii) state to be willing to acquire shares of the Selling
Shareholder under his right of first refusal pursuant to Sec. 10 at the same
time to the effect that the co-sale shall occur if no rights of first refusal
apply pursuant to Sec. 10 (3). No co-sale rights shall apply with regard to a
sale and transfer of shares in exercise of the right of first refusal pursuant
to Sec. 10.

(2)   The Tag-Along Right shall be exercised within the 30-days-periods under
Sec. 10 (2) by written declaration to the Selling Shareholder with a copy to the
chairman of the Company’s supervisory board, stating the number of shares which
the respective Shareholder wishes to be co-sold. If the respective Shareholder
considers the purchaser named in the Notification a competitor of the Company or
a company affiliated with such competitor, and on this basis asserts Sec.11
(4) below to apply, he shall state this, too, in the written declaration
(“Assertion of Competition”).

(3)   In the event that the purchaser named in the Notification is not willing
to purchase all of the shares that the Selling Shareholder and the Shareholders
wish to be sold, the Selling Shareholder shall not be entitled to sell shares to
the purchaser unless (and subject to Sec. 11 (4) below) shares of the
Shareholders who have requested the co-sale of shares pursuant to Sec. 11
(2) are being sold to the purchaser pro rata (i.e., the same percentage of the
respective shareholdings — prior to the sale — of the Selling Shareholder and
the Shareholders, who have requested a co-sale, are being sold).

(4)   The provisions of Sec. 11 (3) notwithstanding, the Selling Shareholder
shall not be entitled to sell shares to the purchaser without all of the shares
that the Shareholders requested to be co-sold being equally sold, if the
purchaser named in the Notification is a competitor of the Company or a company
affiliated with such competitor, or if, as a result of the share sale, the
purchaser (and, if applicable, all companies affiliated with the purchaser)
would hold more than 50% of the Company’s share capital. Subject only to a final
and binding court decision, an Assertion of Competition shall be binding on all
parties for the purposes of this Sec. 11 (4).

Sec. 12
Drag-Along Rights

(1)   Investors, who hold (together) a Qualified Investor Majority (as defined
in Sec. 23 (1) below), are entitled to demand from all Shareholders (i) to sell
their shares to one or more third parties (other than companies affiliated to,
or private equity or venture capital funds regularly managed or advised — with
regard to its investment activities — by any of the Shareholders or their
affiliated companies, or managed or advised — with regard to its investment
activities — by the same manager or advisor that regularly manages or advises
any of the Shareholders) or to transfer their shares in the course of a merger,
a contribution or a similar transaction (such sale of shares or transfer of
shares in the course of a merger, a contribution or a similar transaction
hereinafter: “Trade Sale”) or (ii) to participate in and support the sale of
more than 50% of the tangible and intangible assets of the Company (calculated
at fair market values) (such sale of assets hereinafter: “Asset Deal”).

(2)   The person to be authorised to negotiate the terms and conditions of a
Trade Sale pursuant to Sec. 12 (1)(i) or an Asset Deal pursuant to Sec. 12
(1)(ii) with a third party (the “Negotiator”) shall be equally determined by
Investors, who hold (together) a Qualified Investor Majority (as defined in Sec.
23 (1) below). Herewith, all of the Shareholders instruct the Negotiator to
negotiate all terms and conditions with the prospective purchaser on their
behalf. No Party shall be obliged to pay any fees to the Negotiator (unless
otherwise agreed), or to make any other payments to the Negotiator with regard
to the negotiation of the Trade Sale or the Asset Deal, other than a customary
fee for the Negotiator that will be deducted from the proceeds of a completed
Trade Sale or the Asset Deal which had been negotiated by the Negotiator. The
authorisation (Beauftragung) shall be valid during the term of this Agreement
and shall continue to be valid even after a Shareholder’s death. The Negotiator
shall keep the Shareholders informed about the negotiations of the Trade Sale or
the Asset Deal and shall act in the interest of all Shareholders. The Negotiator
shall in particular ensure that the Shareholders’ interest in achieving a high
price as consideration and reasonable representations, warranties, indemnities
and covenants for the Trade Sale or the Asset Deal be

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    duly considered.

(3)   The Negotiator shall without undue delay submit a draft shareholders’
sales offer negotiated with a third party purchaser (hereinafter: the “Final
Draft Offer”) to the Shareholders and the chairman of the Company’s supervisory
board. Upon the receipt of the Final Draft Offer and a written approval thereof
by Investors, who hold (together) a Qualified Investor Majority (as defined in
Sec. 23 (1) below) (the “Investors’ Approval of the Offer”), the Company through
the chairman of its supervisory board shall immediately inform the Shareholders
in writing and submit the Final Draft Offer to them.

(4)   In the event that the Final Draft Offer meets the following requirements,
all Shareholders shall submit, within two weeks after receiving the Final Draft
Offer and the information on the Investors’ Approval of the Offer, a duly signed
and binding sales offer in accordance with the Final Draft Offer to the
Negotiator for passing it on to the purchaser:

  a)   95% or more of the Company’s shares shall be included in the Trade Sale
or more than 50% of the tangible and intangible assets of the Company shall be
included in the Asset Deal; the term to accept the offer shall not exceed four
weeks, and the Trade Sale or Asset Deal shall become unconditionally effective
or ineffective no later than three months after the acceptance of the offer;    
b)   the consideration to be paid shall be in cash or shall be a divisible
non-cash consideration (e.g. shares) and shall, in case of a Trade Sale, be
distributed among the Shareholders in proportion to their respective
participation in the Company’s share capital at the time of the Trade Sale or,
if Sec. 5 (2) above applies, in the proportion set forth therein;     c)   up to
the amount that tax accrues as a result of the sale, the consideration to be
paid to the Shareholders shall fall due and be liquid to an extent that enables
the Shareholders to timely pay any accrued tax;     d)   (i) the liability of
each Shareholder with regard to representations, warranties, indemnities and
covenants granted to the purchaser in connection with the Trade Sale or the
Asset Deal, and any other obligations or liabilities in this regard shall be as
customarily agreed in such transactions and shall for each Party be limited in
the aggregate at maximum to the consideration received by such Party pursuant to
lit. (b), (ii) the representations, warranties and indemnities in the event of a
Trade Sale shall for all Shareholders who have not held a management position in
the Company within the last 12 months prior to the conclusion of the agreement
on the Trade Sale or Asset Sale be limited exclusively to representations and
warranties regarding the existence and unrestricted legal title to the shares
(including the non-existence of third party rights in the shares), full payment
of the share capital attributable to them (including non-repayment), and their
unrestricted transferability, which representations and warranties are only to
be given by the Shareholders with respect to the shares sold by the respective
Shareholder, and (iii) the Shareholders are only severally liable.

    If these requirements are met, the Shareholders shall, furthermore,
immediately submit all declarations and undertake all measures, which the
implementation of the Trade Sale or the Asset Deal requires, in particular but
not limited to shareholders’ resolutions or filings for court or administrative
clearances, permissions or authorisations.

(5)   Sec. 9 to 11 and 14 shall not apply to any Trade Sale entered into
pursuant to this Sec. 12, except that Valera shall be entitled to exercise a
right of first refusal upon receipt of the Final Draft Offer and the information
on the Investors’ Approval of the Offer by submitting to the Negotiator within
two weeks from such receipt a duly signed and binding offer to purchase and
acquire the shares in the Company at the terms and conditions set forth in the
Final Draft Offer. This right of first refusal of Valera shall, however, not
apply (i) if the Investors, who exercise their right to demand a Trade Sale
pursuant to Sec. 12 (1) through (4) have requested from Valera- prior to such
demand — an offer from Valera for Valera’s purchase of the entire shares of the
Company (the “Valera Offer”), with such offer to be granted within three months
as of the request by the Investors (the “Valera Offer Period”) and with an
acceptance period of at least six months, and (ii) unless Valera has made a
Valera Offer within the Valera Offer Period and the purchase price of the Valera
Offer exceeds the purchase price of the

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    Final Draft Offer. Notwithstanding the foregoing, if Valera has made an
offer to acquire either all shares held by all Shareholders other than Valera or
all assets of the Company, then for a period of nine months after the date of
such offer, neither the Shareholders nor the Company shall engage in a Trade
Sale or Asset Deal at an aggregate purchase price that is less than the
aggregate purchase price offered by Valera.

(6)   Upon an Asset Deal pursuant to this Sec. 12, Investors, who hold
(together) a Qualified Investor Majority (as defined in Sec. 23 (1) below),
shall be entitled, within a time period of six months as of the implementation
of the Asset Deal, to request from all Shareholders to resolve the dissolution
and liquidation of the Company without undue delay.

Sec. 13
Restrictions of Transfer

(1)   The Company’s shares shall be registered in the shareholders’ names. In
order to ensure that shares are solely transferred in compliance with this
Agreement, the transferability of the shares in the Company shall be restricted
and any transfer shall require the Company’s previous consent. The Company’s
consent shall be required for the transfer of shares in the Company irrespective
of whether a share certificate has been issued.

(2)   This Sec. 13 as well as Secs. 9, 10, 11 and 14 shall apply mutatis
mutandis to any transfer by JFLAB of any shares in ARCADE (which is currently
owned 50.6% by JFLAB), as well as to any other measure which entails that JFLAB
does no longer exercise control over ARCADE.

(3)   The Company shall be obliged to grant its consent to the transfer of
shares if the transfer is in compliance with the provisions of this Agreement;
otherwise, the Company shall not consent to the transfer of shares. The
Company’s consent shall be decided upon by the Company’s supervisory board.

Sec. 14
Share Transfers and Share Issuance under Accession to this Agreement
Shares in the Company shall in no event – except as expressly provided otherwise
in this Agreement – be transferred or issued to an acquirer, who is not yet a
Party to this Agreement, unless the acquirer has previously signed and acceded
to this Agreement as Party hereto. Sec. 20 (3) and (4) apply. Sec. 9 – 11 remain
unaffected.
Sec. 15
Transfers to Affiliated Companies and Funds

(1)   Sec. 9 – 11 shall not apply to any transfers of shares with or without
consideration by any Shareholder to affiliated companies and/or to other private
equity or venture capital funds (in whatever legal form, e.g., companies,
partnerships or other entities; hereinafter: “Funds”) regularly managed or
advised — with regard to their investment activities — by such Shareholder, by
an affiliated company of such Shareholder or by the same manager or advisor that
regularly manages or advises — with regard to its investment activities — such
Shareholder. With reference to Sec. 19, Sec. 9 – 11 shall equally not apply to
any transfers of shares by TVM KG, TVM LP or any of their permitted transferees
under the preceding sentence to KfW or an affiliated company of KfW, provided
that this exemption from Sec. 9 – 11 shall be limited to the transfer of such
number of shares that corresponds to the portion of TVM KG’s and TVM LP’s
investment, which is refinanced by KfW, and shall in no event extend to more
than 20% of all of the shares in the Company held by TVM KG, TVM LP and their
permitted transferees under the preceding sentence immediately prior to such
share transfer.

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(2)   Sec. 15 (1) shall in no event apply to the transfer of shares to a
portfolio company of the respective Shareholder.

Sec. 16
Stock Incentive Scheme

(1)   The Parties agree that a Stock Incentive Scheme shall be implemented at
the Company for the purpose of granting to the management of the Company, its
employees and / or its supervisory board members, advisors, or similar
beneficiaries in aggregate options to shares in the Company or economically
comparable rights (one or the other hereinafter: “Option Rights”) up to an
aggregate amount equivalent to 10% of the aggregate (fully diluted) number of
outstanding shares of the Company, including the shares reserved under the Stock
Incentive Scheme. As a general rule, the Option Rights shall be subject to a
vesting over three or four years, and the specific terms as well as the
allocation of the Option Rights shall be subject to the approval of the
Company’s supervisory board.

(2)   The Parties further agree that from the overall amount of Option Rights to
be granted pursuant to Sec. 16 (1), Option Rights to an aggregate amount
equivalent to 1.5% of the aggregate (fully diluted) number of outstanding shares
of the Company shall be reserved for members of the Company’s supervisory board.
Sec. 17 (4) lit. c) shall not apply in this respect.       (1)

Sec. 17
Supervisory Board

(1)   The Company’s supervisory board shall consist of five members. The
Shareholders shall exercise their voting rights at elections of the supervisory
board as follows:

  a)   one member of the supervisory board (and a respective substitute member)
shall be appointed as nominated by Valera;     b)   one member of the
supervisory board (and a respective substitute member) shall be appointed as
nominated jointly by TVM LP and TVM KG;     c)   one member of the supervisory
board (and a respective substitute member) shall be appointed as nominated
jointly by LSOFI and LSOF;     d)   one member of the supervisory board (and a
respective substitute member) shall be appointed as nominated by simple majority
of the Investors.

    A further member of the supervisory board (as well as the respective
substitute member) shall be elected by the Shareholders’ meeting of the Company
with simple majority, provided, however, that this candidate (as well as the
substitute member) shall be an independent member and industry expert with
proven success, network and regulatory and/or marketing expertise in global
pharmaceutical industry. Nominations and appointments of supervisory board
members shall not exceed the time period from the date of such
nomination/appointment to the ordinary annual shareholders meeting of the
calendar year following the year of nomination and appointment.

(2)   The nomination rights set forth above shall apply mutatis mutandis with
regard to the removal of members of the supervisory board. Retiring members of
the supervisory board shall be replaced pursuant to the provisions set forth in
Sec. 17 (1) above. Any nomination right set forth in Sec. 17 (1) litt. a)
through c) shall expire if and when the shareholding of the respective holder of
such nomination right (and any of its permitted transferees under Sec. 15
(1) above) falls below 10% of the entire outstanding shares of the Company,
except that Valera’s nomination right pursuant to Sec. 17 (1) lit. a) shall not
expire as long as Valera’s shareholding amounts to at least 5% of the entire
outstanding shares of the Company and 50% or more of the entire net sales of the
Company and its subsidiaries within the respective last calendar quarter (from
time to time) have been

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    made by the Company and its subsidiaries with products supplied by Valera.

(3)   Each of the Shareholders undertakes individually for himself vis-à-vis
each other Shareholder to vote in any Shareholders’ meeting of the Company
resolving on the election of members of the supervisory board in favour of the
candidates nominated pursuant to Sec. 19 (1) above.

(4)   The Parties shall, to the extent legally permissible and respecting the
independence of the supervisory board and its members, use their best efforts
and all influence they have to the effect that

  a)   the Company’s supervisory board shall hold meetings at least quarterly at
the Company’s registered seat or at any other place which the majority of the
Company’s supervisory board deems from time to time appropriate;     b)   the
members of the supervisory board and of the management board shall be granted a
Directors’ and Officers’ liability insurance at the Company’s costs with a
sufficient coverage, but at least in the amount of EUR 1,000,000.00 per insured
event, provided that such insurance is available for the Company at reasonable
conditions;     c)   only the independent industry experts nominated as members
of the supervisory board under Sec. 17 (1) above shall be granted by the
Shareholders’ meeting an appropriate cash remuneration for their services as
members of the supervisory board; Sec. 16 (2) remains unaffected;     d)   the
transactions and measures listed in the rules of procedure for the Company’s
management board, as attached as Appendix 1.4 hereto shall be subject to
supervisory board approval requiring the consent of each of the three
supervisory board members nominated pursuant to Sec. 17 (1) litt. b), c) and d).

    Any reasonable disbursements of members of the supervisory board in
connection with board meetings, especially travel expenses shall be refunded by
the Company.

Sec. 18
Information

(1)   To the extent legally permissible, and with the consent of all
Shareholders hereto being hereby granted, the Company shall be obliged to
forward the following information to each Shareholder:

  a)   audited annual financial statements within 90 days after the end of the
respective fiscal year;     b)   annual business plan and budget including in
particular without limitation planned balance sheet, planned profit and loss
statement and planned cash flow statement for the forthcoming business year no
later than 30 calendar days before the beginning of each business year;     c)  
monthly written reports on business operations no later than 21 calendar days
after the end of each month including unaudited financial statements (profit and
loss statements, balance sheets and statement of cash flows, plan versus actual
budget, liquidity status, number of employees) along with key operating
parameters as well as management discussion and analysis of all relevant
details.

(2)   All Shareholders shall keep secret and not disclose any confidential
information concerning the Company. Exempt from this confidentiality covenant,
however, is the passing on of information to the Shareholders’ shareholders,
partners or investors (as the case may be) who are under a duty to keep such
information confidential, as well as any disclosure of information required by
law, by any stock exchange, by court or administrative order, or by any
regulatory authority, to which any of the Parties may be subject. All
Shareholders also shall abide by all confidentiality requirements of any
agreements entered into by the Company, including the License and Distribution
Agreement between the Company and Valera.

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Sec. 19
Refinancing by KfW
(2) TVM KG’s Investment into the Company is partly refinanced by Kreditanstalt
für Wiederaufbau (“KfW”). The Parties acknowledge that such investment is
subject to certain restrictions and agree to be bound by the provisions set
forth in Appendix 19a hereto. Furthermore, the Parties acknowledge that TVM KG
requires the internal approval by KfW in case of any amendments to this
Agreement. The Company, upon its incorporation, shall without delay sign the KfW
Rights Letter as attached hereto in draft form as Appendix 19b.
Sec. 20
Effective Date / Succession of Rights

(1)   This Agreement shall become effective upon its being signed by Valera and
the Investors, and shall remain in effect until terminated in writing by
Shareholders holding (together) 75% (or more) of the shares in the Company held
by all Shareholders at the time of termination with effect for all Parties,
except that its provisions in Secs. 9 — 23 shall lapse and become ineffective at
an earlier date, if and when the shares in the Company or substituting
securities are first listed on a domestic or foreign stock exchange with the
consent of Shareholders who hold (together), at the time of the consent, at
least 60% of the shares in the Company held by all of the Shareholders from time
to time, or upon the implementation of a Trade Sale, irrespective whether
effected by exercising Drag-Along Rights pursuant to Sec. 12 above or not. To
the extent legally permissible, any termination of this Agreement by a Party
hereto is excluded. This Agreement shall apply to all shares held from time to
time by any of the Parties hereto. Any provisions herein relating to the
transfer of shares in the Company (in particular, but not limited to, rights of
first refusal, tag-along rights, drag-along rights) shall accordingly apply to
any rights to acquire shares, e.g., share options, warrants, subscription rights
etc.

(2)   This Agreement shall be binding upon the Parties irrespective of whether
the Company and all of its shareholders have become a Party hereto, and it shall
continue to be binding even if one or several Parties cease to be shareholders
of the Company. If a Party to this Agreement other than the Company and JFLAB
transfers all of its shares and rights to shares in the Company, such Party
shall cease to be Party to this Agreement with effect for the future (but not
affecting any rights and obligations that have at this point of time already
arisen hereunder).

(3)   This Agreement shall be binding upon all Parties that may accede to it in
the future. Herewith, the Parties irrevocably offer to future shareholders the
accession to this Shareholders’ Agreement; this shall in particular apply to
persons who exercise option rights granted under the Company’s employee
incentive scheme and to persons or entities that acquire shares in accordance
with this Agreement. Herewith, the Shareholders irrevocably authorise the
Company to receive and accept respective declarations of accession from any
third party future shareholder.

(4)   In the event that shares in the Company are transferred, the new
shareholder shall, except if expressly provided otherwise in this Agreement,
enter into all of the rights and obligations of the transferring shareholder
under this Agreement. The separate transfer of rights and obligations from or in
connection with this Agreement shall – except as stated in the preceding
sentence and unless stated otherwise in this Agreement – be excluded.

Sec. 21
Delivery Addresses and Authorised Recipients

(1)   Each Shareholder shall at any time maintain a mailing address and fax
number, and keep at all times the Company and the other Shareholders informed
thereof. As of the date of this Agreement, the Parties may direct any and all
communication, in particular any and all notifications, statements,
declarations, demands and information to be issued in connection with this
Agreement or the shareholding in the Company to any other Party hereof to the
persons and addresses (and such

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    communication, notifications, statements, declarations, demands and
information shall be deemed received if delivered to the persons and addresses)
as stated in Appendix 21.1. The Persons listed in Appendix 21.1 also shall be
deemed to be authorised to issue any and all notifications, statements,
declarations, demands and information to be issued in connection with this
Agreement or the shareholding in the Company to any other Party hereof.

(2)   In case of a change of address of any Party hereto, such Party shall
immediately inform all other Parties of such change of address in writing, with
such change of address taking effect for the purposes of Sec. 21 (1) two weeks
upon receipt of such information by the other Parties.

(3)   Any communication, notification, statement, declaration, demand and
information that is required under this Agreement to be made in writing shall
suffice to be sent by telecopy.

Sec. 22
Amendments to and Cancellation of this Agreement

(1)   This Agreement may be amended or cancelled with effect for the future (but
not affecting any rights and obligations that have at this point of time already
arisen hereunder) by way of an agreement among Shareholders holding
(together) 75% (or more) of the shares in the Company held by all Shareholders
at the time of such agreement with effect for all Parties (hereinafter: a
“Majority Amendment”), provided, however, that no amendments to this Agreement
shall be made to the disadvantage of a specifically named Shareholder (instead
of all Shareholders or any other group of Shareholders defined under this
Agreement, e.g., the Investors) without such Shareholder’s consent; and
provided, further, that the provisions of Sec. 17(1)(a)-(c) shall not be amended
without the consent of the party named in such subsection. In addition, if
obligations or covenants of the Company shall be created, the Company’s consent
shall be required.

(2)   In order for any Majority Amendment to become effective, (i) a copy of the
respective agreement pursuant to Sec. 22 (1) above must be sent by registered
mail to every Shareholder, who has not signed such agreement, and (ii) a copy of
the respective agreement together with copies of the mail registration
certificates to all other Shareholders must be sent to the Company. Upon receipt
of such documents by the Company, the Majority Amendment shall become effective,
and the Company shall accordingly inform all Shareholders in writing without
undue delay, enclosing a copy of the respective agreement pursuant to Sec. 22
(1). If a Shareholder believes, for whatever reason, that this Agreement has not
been validly amended to the effect as set forth in the information received by
the Company, he shall notify the Company thereof in writing within three weeks
as of the receipt of the information. Otherwise the Shareholder’s consent to the
amendment as set forth in the information by the Company shall be deemed
granted.

(3)   In case of a Majority Amendment, the requirement of any amendments to this
Agreement to be in writing (Sec. 23 (7) below) is met if the agreement among
Shareholders holding (together) 75% (or more) of the shares in the Company held
by all Shareholders at the time of such agreement is in written form.

(4)   Investors, who hold (together) a Qualified Investor Majority (as defined
in Sec. 23 (1) below), shall have the right to determine the terms and
conditions of further financing rounds of the Company, and to request from all
other Shareholders and the Company to consent to such terms and conditions and
make all declarations and take all actions required (except for entering into
financial obligations) to implement such financing rounds, provided that all
Shareholders shall be granted the right to invest pro rata in each further
financing round and that the terms and conditions of such financing rounds shall
not be more onerous on some investing Shareholder than on others. The terms and
conditions of further financing rounds to be determined by Investors holding a
Qualified Investor Majority (as defined in Sec. 23 (1) below) may, in
particular, include (but shall not be limited to):

  a)   the introduction and issuance of shares of preferred stock, carrying
preference rights like a liquidation and exit proceeds preference, a dividend
preference, drag along, tag along and first refusal rights superior to the
respective

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      rights of shares of common stock, IPO demand rights and a right to anti
dilution protection;     b)   the conversion of any investor’s shares of
preferred stock into common stock, and loss of preference rights, in case such
investor does not invest pro rata to other existing investors from time to time
in the then following financing rounds (“pay to play”).

Sec. 23
Miscellaneous

(1)   The term “affiliated company” or “company affiliated with ...” shall, for
the purposes of this Agreement, be understood to be any group company
(groepsmaatschappij) as defined in article 2:24b of the Dutch Civil Code. The
term “Qualified Investor Majority” shall, for the purposes of this Agreement, be
understood as 60% (or more) of all of the shares held by all of the Investors in
the Company from time to time; this term shall not imply a requirement to hold a
meeting or have a formal vote among the Investors.

(2)   The liability of the Investors for any and all obligations under this
Agreement shall not be jointly in nature, but severally only. This applies, in
particular for (but not limited to) the payment and subscription obligations
under Secs. 1, 2 and 3 of this Agreement.

(3)   The Parties shall ensure that the Company arranges for Key-Man-Insurance
for JFLAB in the amount of EUR 1,000,000 payable in favor of the Company.

(4)   The Parties shall each bear their own costs incurred in connection with
this Agreement, provided, however, that the Investors shall be entitled to
deduct from their premium payments in the context of the foundation of the
Company and of the First Capital Increase the costs incurred in the context of
this transaction for legal and tax advice. The Parties agree that the Company
shall bear, to the extent legally admissible, any costs and fees of registration
and the notary in connection with its foundation and the capital increases
provided for in this Agreement.

(5)   In the event that provisions of this Agreement contradict provisions of
the Company’s articles of association (Satzung), this Agreement shall prevail to
the extent legally permissible. The Parties acknowledge and agree that the
arrangements included in this Agreement which relate in any way to the transfer
of shares, are different from the transfer restriction clauses in the articles
of association of the Company. This deviation, however, is expressly agreed and
accepted by the Parties in their mutual contractual relations as established
through this Agreement. The Parties hereby agree to act in accordance with the
provisions of this Agreement and to co-operate in the effectuation of any
transaction in accordance with the provisions of this Agreement, including
co-operation with the execution of any additional documents, waivers,
resolutions and/or notarial deeds necessary or relevant for such transaction. In
particular, each of the Parties agrees to waive any rights under the articles of
association of the Company to the extent such waiver is necessary to procure
that the provisions of this Agreement may be applied in such manner as is
described herein.

(6)   The Parties shall maintain confidentiality about the content of this
Agreement and its execution; provided that Valera may disclose the existence of
this Agreement and its contents, and file this Agreement with applicable
regulatory authorities, as required by law. The exemptions provided for in Sec.
18 (2) shall apply accordingly. Valera and the Investors shall agree on the
content, timing and format of any press release in connection with the
conclusion and implementation of this Agreement.

(7)   Any amendments to this Agreement, including amendments to or waivers of
this form requirement, must be in written form in order to be effective.

(8)   In the event that a provision of this Agreement is or becomes partly or
entirely invalid or if this Agreement contains a gap or omission, the validity
of the remaining provisions of this Agreement shall not be affected thereby. The
Parties shall be obliged to replace the partly or entirely invalid provision
with a valid provision, which the Parties would have agreed on, had

49

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    they been aware of the invalidity of the respective provision. The same
shall apply in the event that this Agreement contains a gap or omission.

(9)   This Agreement shall be governed by Dutch law under exclusion of its rules
of conflict of laws. To the extent legally permissible, the place of
jurisdiction and place of performance shall be Amsterdam.

50

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                    , this 17 July 2006

     
/s/ B. Seibel
  /s/ B. Seibel
 
   
 
   
 
   
TVM Life Science Ventures VI L.P.
  TVM Life Science Ventures VI GmbH & Co. KG
 
   
/s/ James Gale
  /s/ James Gale
 
   
 
   
Life Sciences Opportunities Fund (Instititutional) II, L.P.
  Life Sciences Opportunities Fund II, L.P.
 
   
/s/ Jean-Francois Labbé
  David S. Tierney
 
   
 
   
ARCADE SARL
  Valera Pharmaceuticals Inc.
 
   
 
  26.06 2006
 
   
/s/ Jean-Francois Labbé
  /s/ Jean-Francois Labbé
 
   
 
   
Jean-François Labbé
  Spepharm Holding B.V.

(3)

     
List of Appendices
   
 
   
Appendix 1.2:
  Articles of Association of the Company
 
   
Appendix 1.3:
  Terms of Service Agreement of JFLAB
 
   
Appendix 1.4:
  Rules of Procedure for the Management
 
   
Appendix 1.5:
  Draft Loan Agreement
 
   
Appendix 4.3a/b:
  Accession Forms for Third Party Investor(s) (First and/or Second Capital
Increase)
 
   
Appendix 7.2:
  Distribution and Licence Agreement
 
   
Appendix 7.3:
  Group Structure
 
   
Appendix 7.4:
  Management Rights Letter
 
   
Appendix 19a/b:
  KfW Provisions / KfW Rights Letter
 
   
Appendix 21.1:
  Delivery Addresses and Authorised Recipients

51