Exhibit 10.1

NOTES CONVERSION AGREEMENT

This Notes Conversion Agreement (this “Conversion Agreement”) is dated as of
June 28, 2018, among Akebia Therapeutics, Inc., a Delaware corporation
(“Akebia”) (for purposes of Sections 2.3(c), 5.5 (with respect to the last
sentence only) and 5.6 – 5.16 only), Keryx Biopharmaceuticals, Inc., a Delaware
corporation (the “Company”), and Baupost Group Securities, L.L.C., a
Massachusetts limited liability company (the “Investor”).

WHEREAS, subject to the terms and conditions set forth in the Notes Exchange
Agreement dated May 8, 2018, the Company issued to the Investor $164,746,000
principal amount of Zero Coupon Convertible Senior Notes due 2021 (the “Existing
Notes”), which are governed by an Indenture (as amended to the date of the
Closing contemplated herein, the “Indenture”) dated May 9, 2018, between the
Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the
“Trustee”).

WHEREAS, pursuant to an Agreement and Plan of Merger dated as of the date hereof
(the “Merger Agreement”) among the Company, Akebia and Alpha Therapeutics Merger
Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Akebia
(“Merger Sub”), Merger Sub will be merged with and into the Company, the
separate corporate existence of Merger Sub will thereupon cease and the Company
will continue as the surviving corporation and a wholly owned subsidiary of
Akebia (the “Merger”).

WHEREAS, pursuant to the terms and conditions set forth in this Conversion
Agreement, the Investor has agreed to surrender the Existing Notes for
conversion in accordance with the terms of the Indenture, in a manner that
creates a Conversion Date (as defined in the Indenture) in respect of the
Existing Notes (the “Existing Notes Conversion”), prior to the Effective Time
(as defined in the Merger Agreement) of the Merger, and conditioned upon the
issuance to the Investor, immediately prior to the Effective Time, of 4,000,000
shares of Common Stock (such number of shares of Common Stock, the “Additional
Shares,” and the Existing Notes Conversion and the issuance of the Additional
Shares, together, the “Conversion Transactions”).

WHEREAS, in connection with and as additional consideration for the Conversion
Transactions, (i) Akebia and the Investor have entered into that certain Voting
Agreement dated as of the date hereof (the “Voting Agreement”), pursuant to
which the Investor has agreed to support the approval by the Company’s
stockholders of the Contemplated Transactions (as defined in the Merger
Agreement), pursuant and subject to the terms and conditions therein and
(ii) Akebia and the Investor shall enter into that certain Registration Rights
Agreement, to be dated as of the Closing Date, in the form of Exhibit A attached
hereto (the “Registration Rights Agreement”).

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NOW, THEREFORE, IN CONSIDERATION of the mutual representations, warranties and
covenants contained in this Conversion Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, Akebia, the Company and the Investor agree as follows:

ARTICLE I.

DEFINITIONS

1.1     Definitions. In addition to the terms defined elsewhere in this
Conversion Agreement, for all purposes of this Conversion Agreement, the
following terms have the meanings set forth in this Section 1.1:

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.

“Board” means the Company’s board of directors.

“Business Day” means any day except any Saturday, any Sunday, any day that is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

“Capital Stock” of any Person means: (a) in the case of a corporation, corporate
stock of such Person; (b) in the case of an association or business entity,
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock of such Person; (c) in the case of a partnership
or limited liability company, partnership or membership interests (whether
general or limited) of such Person; and (d) in the case of any other legal form,
any other interest or participation of such Person that confers the right to
receive a share of the profits and losses of, or distribution of assets of, such
Person.

“Closing” means the closing of the Conversion Transactions pursuant to
Section 2.2.

“Closing Date” means the date of the closing of the Merger in accordance with
the terms of the Merger Agreement.

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

“Common Stock” means the common stock of the Company, par value $0.001 per
share.

“Enforceability Exceptions” shall have the meaning ascribed to such term in
Section 3.1(c).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Investor Party” shall have the meaning ascribed to such term in Section 4.1.

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction, except for any Liens
specifically allowed under the Indenture.

 

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“Material Adverse Effect” means any change, effect, event, circumstance,
occurrence, state of facts or development, that, individually or in the
aggregate has or would reasonably be expected to have a material adverse effect
on the business, assets, results of operations or financial condition of Keryx
and its Subsidiaries, taken as a whole, other than any change, effect, event,
circumstance, occurrence, state of facts or development related to or resulting
from (i) general business or economic conditions affecting the industry in which
such party operates, to the extent such change or effect does not
disproportionately affect such party relative to other industry participants;
(ii) any natural disaster, or national or international political or social
conditions, including the engagement by the United States in hostilities or the
escalation thereof, whether or not pursuant to the declaration of a national
emergency or war, or the occurrence or the escalation of any military or
terrorist attack upon the United States, or any of its territories, possessions,
or diplomatic or consular offices or upon any military installation, equipment
or personnel of the United States, to the extent such change or effect does not
disproportionately affect such party relative to other industry participants;
(iii) financial, banking, or securities markets (including any disruption
thereof and any decline in the price of any security or any market index), to
the extent such change or effect does not disproportionately affect such party
relative to other industry participants; (iv) changes in GAAP; (v) changes in
Laws, rules, regulations, orders, or other binding directives issued by any
Governmental Body, to the extent such change or effect does not
disproportionately affect such party relative to other industry participants;
(vi) the failure in and of itself to meet internal or analysts’ expectations,
projections or results of operations (but not, in each case, the underlying
cause of any such changes, unless such underlying cause would otherwise be
excepted from this definition); or (vii) the taking of any action explicitly
contemplated hereby or the other agreements contemplated hereby.

“Permitted Transferees” means (i) any Affiliate of the Investor and (ii) any
custodian or nominee that holds Existing Notes for the account of the Investor
or any Permitted Transferee described in clause (i) provided that such custodian
or nominee holds such transferred Existing Notes for the account of the Investor
or such Permitted Transferee.

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Proceeding” or “proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Subsidiary” means in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers,

 

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general partners or trustees thereof is at the time owned or controlled,
directly or indirectly, by (a) such Person; (b) such Person and one or more
Subsidiaries of such Person; or (c) one or more Subsidiaries of such Person.

ARTICLE II.

THE CONVERSION

2.1    Conversion Consideration. Subject to the terms and conditions hereof, the
Investor hereby agrees to (a) enter into the Voting Agreement, (b) enter into
the Registration Rights Agreement and (c) surrender the Existing Notes for
conversion in accordance with the terms of the Indenture, in a manner that
creates a “Conversion Date” (as defined in the Indenture) in respect of the
Existing Notes prior to the Effective Time of the Merger, but contingent upon
(i) satisfaction of the conditions to the Merger contained in Article 6 of the
Merger Agreement (other than those conditions that by their nature shall be
satisfied at or immediately after the Effective Time (provided that such
conditions are then capable of being satisfied)) and (ii) the issuance to the
Investor of the Additional Shares. The Investor understands that the issuance of
the shares of Common Stock pursuant to the conversion of the Existing Notes (the
“Conversion Shares” and, together with the Additional Shares, the “Equity
Interests”) and the issuance of the Additional Shares will occur without
registration of the Conversion Shares or the Additional Shares under the
Securities Act or any securities laws of any state of the United States or of
any other jurisdiction, in reliance upon representations herein by the Investor
that it is both an “accredited investor” (as defined in Rule 501 of Regulation D
under the Securities Act) and a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act) (and restrictive legends in substantially
the form set forth in Section 2.06(e) of the Indenture may be placed on the
evidence of ownership of the Conversion Shares and the Additional Shares).

2.2    Closing. The Closing shall occur immediately prior to the Effective Time
of the Merger and on the terms and subject to the conditions of this Conversion
Agreement. Prior to the Closing, the Investor shall (i) deliver a completed
notice to the Conversion Agent (as defined in the Indenture) as set forth in the
Form of Conversion Notice attached to the Form of Security set forth in Exhibit
A to the Indenture (the “Conversion Notice”) at the office of the Conversion
Agent and state in writing therein the entire principal amount of Existing Notes
to be converted and the name or names (with addresses) in which the Investor
wishes the certificate or certificates for the Conversion Shares, (ii) deliver
the Existing Notes, duly endorsed to the Company or in blank (and accompanied by
appropriate endorsement and transfer documents), to the Conversion Agent, free
and clear of any Liens (the “Endorsed Notes”); and (iii) if the Investor
requests that the Conversion Shares be issued in a name other than the
Investor’s name, deliver to the Company cash in an amount equal to the
documentary, stamp or similar issuer or transfer tax, if any, due upon issuance
of the Conversion Shares as a result thereof as contemplated by Section 4.01(e)
of the Indenture; and at the Closing, the Company shall deliver to the Investor
the Equity Interests (or evidence reasonably satisfactory to the Investor that
the Equity Interests have been delivered).

 

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2.3    Deliveries.

(a)    On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to the Investor the following:

(i)    a certificate in form and substance reasonably satisfactory to the
Investor duly executed on behalf of the Company by an authorized executive
officer or director of the Company, certifying that (A) the representations and
warranties of the Company contained in Article III hereof (i) qualified as to or
by Material Adverse Effect shall be true and correct in all respects as of the
Closing Date as if made anew as of such date (except to the extent any such
representations and warranties expressly relate to an earlier date (in which
case as of such earlier date)) and (ii) not qualified as to or by Material
Adverse Effect shall be true and correct as of the Closing Date (without giving
effect to any “material,” “materiality” or similar phrases) as if made anew as
of such date (except to the extent any such representations and warranties
expressly relate to an earlier date (in which case as of such earlier date));
and (B) the conditions to the Merger contained in Article 6 of the Merger
Agreement shall have been satisfied or waived (subject to Section 2.4(b)(vi)) at
or immediately after the Effective Time (provided that such conditions are then
capable of being satisfied);

(ii)    a certificate of the secretary of the Company dated as of the Closing
Date certifying (A) that attached thereto is a true and complete copy of the
amended and restated bylaws of the Company as currently in effect; (B) that
attached thereto is a true and complete copy of all resolutions adopted by the
Board authorizing the execution, delivery and performance of this Conversion
Agreement (other than the resolutions provided for in Section 2.3(a)(iii)), and
that all such resolutions (other than the resolutions provided for in
Section 2.3(a)(iii)) are in full force and effect and are all the resolutions
adopted in connection with the transactions contemplated hereby as of the
Closing Date; (C) that attached thereto is a true and complete copy of the
Company’s Amended and Restated Certificate of Incorporation as currently in
effect; and (D) as to the incumbency of any officer or director of the Company
executing this Conversion Agreement on behalf of the Company;

(iii)    a true and complete copy of resolutions adopted (and which remain in
effect) by the Board in form and substance reasonably satisfactory to the
Investor approving the transactions contemplated herein and acknowledging that
certain related parties of the Investor are “directors by deputization” for
purposes of exempting certain of the transactions contemplated herein under Rule
16(b) under the Exchange Act;

(iv)    evidence reasonably satisfactory to the Investor confirming delivery of
the Equity Interests immediately prior to the Effective Time; and

(v)    a legal opinion letter of the Company’s outside general counsel, in form
and substance reasonably satisfactory to counsel to the Investor.

(b)    On or prior to the Closing Date, the Investor shall deliver to the
Company or the Conversion Agent, as applicable, the following:

(i)    the Conversion Notice; and

 

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(ii)    the Endorsed Notes and cash in an amount necessary to cover taxes, if
any, described in Section 2.2(a)(iii).

(c)    On or prior to the Closing Date, Akebia shall authorize, execute and
deliver the Registration Rights Agreement to the Company and the Investor.

(d)    As promptly as practicable hereunder, the Company and the Investor shall
enter into, or cause to be entered into, and effected, the Indenture Amendment
(as defined below).

2.4    Closing Conditions.

(a)    The obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being met or satisfied contemporaneously
with the Closing:

(i)    the expiration or early termination of the applicable waiting period(s)
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
“HSR Act”), if required for, and in connection with, the Conversion
Transactions;

(ii)     the accuracy in all material respects on the Closing Date of the
representations and warranties of the Investor contained herein (unless as of
specified date therein, in which case they shall be accurate as of such date);

(iii)    all obligations, covenants and agreements of the Investor required to
be performed hereunder at or prior to the Closing Date shall have been performed
(other than immaterial instances of noncompliance);

(iv)    the delivery (or evidence of such delivery) by the Investor of the items
set forth in Section 2.3(b); and

(v)    the conditions to the Merger contained in Article 6 of the Merger
Agreement shall have been satisfied or waived (other than those conditions that
by their nature shall be satisfied at or immediately after the Effective Time
(provided that such conditions are then capable of being satisfied)).

(b)    The obligations of the Investor hereunder in connection with the Closing
are subject to the following conditions being met or satisfied contemporaneously
with the Closing:

(i)    the expiration or early termination of the applicable waiting period(s)
under the HSR Act, if required for, and in connection with, the Conversion
Transactions;

(ii)    the representations and warranties of the Company contained in Article
III hereof (i) qualified as to or by Material Adverse Effect shall be true and
correct in all respects as of the Closing Date as if made anew as of such date
(except

 

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to the extent any such representations and warranties expressly relate to an
earlier date (in which case as of such earlier date)) and (ii) not qualified as
to or by Material Adverse Effect shall be true and correct as of the Closing
Date (without giving effect to any “material,” “materiality” or similar phrases)
as if made anew as of such date (except to the extent any such representations
and warranties expressly relate to an earlier date (in which case as of such
earlier date));

(iii)    all obligations, covenants and agreements of the Company required to be
performed hereunder at or prior to the Closing Date shall have been performed
(other than immaterial instances of non-compliance);

(iv)    the delivery by the Company of the items set forth in Section 2.3(a) of
this Conversion Agreement;

(v)    the delivery by Akebia of the item set forth in Section 2.3(c) of this
Conversion Agreement; and

(vi)    the conditions to the Merger contained in Article 6 of the Merger
Agreement shall have been satisfied or waived, without giving effect to any
waivers by the Company that, in any material respect, amend, waive or alter the
terms of the Merger Agreement in a manner adverse to the Investor without the
consent of the Investor (other than those conditions that by their nature shall
be satisfied at or immediately after the Effective Time (provided that such
conditions are then capable of being satisfied)).

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1    Representations and Warranties of the Company. The Company hereby makes
the following representations and warranties to the Investor:

(a)    Subsidiaries. All of the outstanding shares of capital stock or
equivalent equity interests of each of the Company’s Subsidiaries have been
validly issued, are fully paid and non-assessable, and are owned of record and
beneficially, directly or indirectly, by the Company free and clear of all Liens
(other than Permitted Liens). Except for the capital stock or other equity or
voting interests of its Subsidiaries, the Company does not own, directly or
indirectly, any capital stock or other equity or voting interests in any Person.

(b)    Organization and Qualification. The Company and each of its Subsidiaries
is an entity duly incorporated or otherwise organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and operate its
properties and to carry on its business as currently conducted. Neither the
Company nor any of its Subsidiaries is in violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and its
Subsidiaries is duly qualified or authorized to conduct business and is in good
standing as a foreign corporation or other entity in every jurisdiction (to the
extent such concept exists

 

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in such jurisdiction) in which its ownership of property or the conduct of
business as now conducted requires it to qualify, except where the failure to be
so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result a Material Adverse Effect.

(c)    Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Conversion Agreement and otherwise to carry out its obligations thereunder.
The execution and delivery of this Conversion Agreement by the Company, and the
consummation by it of the transactions contemplated thereby, have been duly
authorized by all necessary action on the part of the Company, its officers,
directors and stockholders and no further action is required by the Company, its
officers, directors or stockholders in connection therewith, other than
application to the Nasdaq Capital Market for the listing of the Additional
Shares, if required. This Conversion Agreement has been duly executed and
delivered by the Company, and constitutes the valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms
except: (i) as enforcement may be limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting creditors’ rights generally or by equitable
principles relating to enforceability (collectively, the “Enforceability
Exceptions”); (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies; and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

(d)    No Conflicts. The execution, delivery and performance by the Company of
this Conversion Agreement, the issuance and delivery of the Conversion Shares
and the Additional Shares, the Conversion Transactions and the consummation by
the Company of the transactions contemplated hereby do not and will not:
(i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents; or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any assets of the Company or any Subsidiary,
pursuant to or give to others any rights of termination, amendment,
acceleration, cancellation under, give rise to any penalties, repayment
obligations, special assessments or additional payments under, or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected; or
(iii) assuming all consents, approvals, authorizations and other actions have
been obtained, conflict with or result in a violation of any law, rule,
regulation, order, judgment, or decree to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations; provided
that no such representation is given with respect to Section 16 of the Exchange
Act with respect to the Investor), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.

(e)    Filings, Consents and Approvals. The Company is not required to obtain
any consent of, waiver, authorization of, approval of, give any notice to, or
make any filing

 

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with, any court or other federal, state, local or other governmental authority
in connection with the execution, delivery and performance by the Company of
this Conversion Agreement and the consummation of the transactions contemplated
hereby.

(f)    Issuance of the Shares. The Conversion Shares and the Additional Shares
have been duly authorized and, when the Conversion Shares are issued upon
conversion of the Existing Notes in accordance with their terms, such shares of
Common Stock, along with the Additional Shares, will be validly issued, fully
paid and non-assessable; and the issuance of the Conversion Shares upon the
conversion of the Existing Notes will not be subject to the preemptive or other
similar rights of any stockholder of the Company.

3.2    Representations and Warranties of the Investor. The Investor hereby
represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows:

(a)    Organization; Authority. The Investor is an entity duly incorporated or
formed, validly existing and in good standing under the laws of the jurisdiction
of its incorporation, with full power and authority to enter into this
Conversion Agreement, to consummate the Conversion Transactions and otherwise to
carry out its obligations hereunder. The execution and delivery of the
Conversion Agreement, and performance by the Investor of the Conversion
Transactions and the other transactions contemplated hereunder, have been duly
authorized by all necessary action on the part of the Investor. This Conversion
Agreement has been duly executed and delivered by the Investor and constitutes
the valid and legally binding obligation of the Investor, enforceable against it
in accordance with its terms, except: (i) as limited by the Enforceability
Exceptions, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

(b)    Understandings or Arrangements. The Investor is acquiring the Conversion
Shares and the Additional Shares as principal for its own account or those of
its Affiliates and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such shares of
Common Stock and, further, the Investor represents and warrants that it is
acquiring the Equity Interests for its own account, for the Account of its
Affiliates, or for an account with respect to which it exercises sole investment
discretion, and any such account is a “qualified institutional buyer” within the
meaning of Rule 144A under the Securities Act. The Investor also represents and
warrants that it is an “accredited investor” as defined in Rule 501 of
Regulation D promulgated under the Securities Act.

(c)    No Legal Advice from the Company. The Investor acknowledges that it had
the opportunity to review this Conversion Agreement and the Conversion
Transactions and the other transactions contemplated hereby with its own legal
counsel and investment and tax advisors. The Investor is relying solely on such
counsel and advisors and not on any statements or representations of the
Company, or any of the Company’s representatives or agents for legal, tax or
investment advice with respect to this investment, the Conversion Transaction or
the other transactions contemplated hereby or the securities laws of any
jurisdiction.

 

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(d)    Ownership of Existing Notes and Common Stock. The Investor or its
Affiliates hold beneficially and of record 100% of the Existing Notes, free and
clear of all Liens and, as of and since September 30, 2014, the Investor or its
Affiliates have held at least 18,300,000 shares of Common Stock.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1    Indemnification of the Investor.    Subject to the provisions of this
Section 4.1, the Company will indemnify and hold the Investor and its
Affiliates, directors, officers, stockholders, members, partners, employees and
agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title),
each Person who controls the Investor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
stockholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, an
“Investor Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs, reasonable attorneys’ fees and costs
of investigation (but excluding any taxes other than those for which the Company
is responsible pursuant to Section 5.2 hereof) that any Investor Party may
suffer or incur as a result of or relating to: (a) the Conversion Transactions;
(b) any breach of any of the representations, warranties, covenants or
agreements in this Conversion Agreement; (c) the execution of this Conversion
Agreement or any agreement or instrument contemplated hereby or thereby, the
performance by the Company of its obligations hereunder and the consummation of
the transactions contemplated hereby; or (d) any actual or prospective claim,
litigation, investigation, proceeding or other action instituted in any
capacity, whether based on contract, tort or any other theory, whether brought
by a third party or by any party hereto, and regardless of whether any Investor
Party is a party thereto, with respect to the transactions contemplated by this
Conversion Agreement, the Existing Notes or the Indenture (except to the extent
such action is based upon a breach of such Investor Party’s representations,
warranties or covenants under this Conversion Agreement or any agreements or
understandings such Investor Party may have with any such shareholder or any
violations by such Investor Party of state or federal securities laws or any
conduct by such Investor Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought against any
Investor Party in respect of which indemnity may be sought pursuant to this
Conversion Agreement, such Investor Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Investor Party. Any
Investor Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Investor Party except to the extent that
(i) the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel (not to exceed 90 days) or (iii) in such
action there is a conflict or potential conflict on any material issue between
the position of the Company and the position of such Investor Party, in which
case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel and local counsel and shall pay such fees
and expenses as incurred. The Company will not be liable to any Investor Party
under this Conversion Agreement (y) for any settlement by an Investor Party

 

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effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; provided, however, that if at any time an
Investor Party shall have requested the Company to reimburse such Investor Party
for fees and expenses of counsel as contemplated by this Section 4.2, the
Company agrees that it shall be liable for any settlement of any proceeding
effected without their written consent if (i) such settlement is entered into
more than 30 days after receipt by such Investor Party of the aforesaid request,
(ii) the Company shall have received notice of the terms of such settlement at
least ten (10) days prior to such settlement being entered into, and (iii) the
Company shall not have reimbursed the Investor Party in accordance with such
request; or (z) to the extent, but only to the extent, that a loss, claim,
damage or liability is attributable to any Investor Party’s breach of any of the
representations, warranties, covenants or agreements made by such Investor Party
in this Conversion Agreement or any violations by such Investor Party of state
or federal securities laws or any conduct by such Investor Party which
constitutes fraud, gross negligence, willful misconduct or malfeasance. The
Company shall not, without the prior written consent of the Investor, not to be
unreasonably withheld, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect
of which any Investor Party is or could have been a party and indemnity was or
could have been sought hereunder by such Investor Party, unless such settlement,
compromise or consent (i) includes an unconditional release of such Investor
Party from all liability on claims that are the subject matter of such action,
suit or proceeding and (ii) does not include any statements as to or any
findings of fault, culpability or failure to act by or on behalf of any Investor
Party. The indemnification required by this Section 4.1 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or
similar right of any Investor Party against the Company or others and any
liabilities the Company may be subject to pursuant to law. Notwithstanding
anything to the contrary in this Conversion Agreement, in no event shall the
Company have any liability to any Investor Party under this Section 4.1 or
otherwise for any liability of any Investor Party arising under Section 16 of
the Exchange Act.

4.2    [Reserved].

4.3    [Reserved].

4.4    Rule 16b-3. The Company will take no action that is purposefully or
reasonably likely to be inconsistent with the intention or expectation that
(a) the acquisition by the Investor of the Additional Shares will be exempt from
the application of Section 16(b) of the Exchange Act pursuant to Rule 16b-3(d)
under the Exchange Act and (b) the disposition by the Investor of the Common
Stock in the Merger will be exempt from the application of Section 16(b) of the
Exchange Act pursuant to Rule 16b-3(e) under the Exchange Act.

4.5    Confidentiality. The parties shall not disclose the existence of this
Conversion Agreement or the Conversion Transactions prior to public disclosure
in an SEC report (other than to its directors and to its employees, agents and
attorneys who have a need to know such information, to the other parties to the
Merger Agreement and their directors and to their employees, agents and
attorneys who have a need to know such information, and except in an approved
press release as contemplated by the last sentence of this paragraph) without
the prior written consent of the other party, except as may be required by
applicable law or pursuant to the

 

11

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order of any court or administrative agency in any pending legal, judicial or
administrative proceeding, or otherwise as required by compulsory legal process
or to the extent requested or required by governmental and/or regulatory
authorities, including pursuant to Investors’ reporting obligations under
Sections 13 and 16 of the Exchange Act. Any proposed press release or disclosure
in an SEC report relating to the initial disclosure of entering into this
Conversion Agreement and the Conversion Transactions shall be subject to the
prior written approval (including by email) of the parties hereto (which shall
not be unreasonably withheld, conditioned or delayed) (and nothing in this
provision shall require either party to breach any applicable securities laws).

4.6    Termination of the Prior Registration Rights Agreement. As provided in
Section 5.6 of that certain Registration Rights Agreement, dated as of May 9,
2018, by and between the Company and the Investor, the parties hereto agree that
such Registration Rights Agreement shall be terminated and be of no further
force and effect as of and conditioned upon the consummation of the Merger in
accordance with the terms of the Merger Agreement without any further actions or
writings of the parties hereto.

4.7    Conduct Prior to Closing. From the date of this Conversion Agreement
until the Closing, except as consented to by the Investor in writing, the
Company shall not enter into or otherwise approve (or agree to enter into or
approve) any amendments, waivers, side letters or similar agreements, or other
modifications by the Company or Akebia that, in any material respect, amend,
waive or alter the terms of the Merger Agreement in a manner adverse to the
Investor without the consent of the Investor).

4.8    Conversion Null and Void; Cooperation. If, for any reason, the Closing
hereunder occurs and the Merger is not consummated on such date (or such later
date as may be required due to an inability to satisfy Section 6.02(d) of the
Merger Agreement despite efforts by the parties hereto to prevent any such
delay), the Existing Notes Conversion and the issuance of the Equity Interests
shall be null and void and this Conversion Agreement shall be of no further
force or effect (other than as provided in Section 5.10), and the parties hereto
agree to undertake any necessary actions to ensure that the Existing Notes
Conversion and the issuance of the Equity Interests be null and void. In
furtherance of the foregoing, the Company and the Investor agree to, promptly
after the date hereof, and in any event prior to the Closing, amend the
Indenture to provide that (i) the Conversion Notice to be delivered hereunder
shall be revocable but only in the event that the Merger is not consummated on
the same day as the Closing hereunder (or such later date as may be required due
to an inability to satisfy Section 6.02(d) of the Merger Agreement despite
efforts by the parties hereto to prevent any such delay); and (ii) the Company
or the Conversion Agent shall provide evidence of delivery of the Conversion
Shares to the Investor immediately prior to the Effective Time (the “Indenture
Amendment”). The Investor agrees to execute and deliver such other documents and
agreements not specifically set forth in this Conversion Agreement as reasonably
requested by the Company, the Conversion Agent, the Trustee or the Company’s
transfer agent to effectuate the conversion of the Existing Notes, the issuance
and delivery of the Equity Interests in accordance with the terms of this
Conversion Agreement and the discharge of the Indenture in connection herewith.
As promptly as practicable after the date hereof, the Investor and the Company
shall cooperate with each other and with the Trustee to agree upon what
documentation or evidence will be satisfactory to the Investor to confirm
delivery of the Equity Interests immediately prior to the Effective Time.

 

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4.9    Regulatory Efforts.

(a)    The Company and the Investor shall each use its reasonable best efforts
to take, or cause to be taken, all appropriate actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable Law or
otherwise to consummate and make effective the Conversion Transactions. As
promptly as practicable (and no later than five (5) Business Days) after the
date of this Agreement, each of the Company and the Investor (i) will file with
the U.S. Department of Justice and the U.S. Federal Trade Commission premerger
notification and report forms under and in compliance with the HSR Act with
respect to the Conversion Transactions in the manner determined by counsel to
the Investor in consultation with counsel to the Company (the “HSR Act
Filings”). The parties shall cooperate in the timely preparation and submission
of the HSR Act Filings, including furnishing to the other party or its counsel
information required for any necessary filing or other application in connection
with the Conversion Transactions.

(b)    Each of the Company and the Investor hereby covenants and agrees to use
its reasonable best efforts to secure, and not to take any action that will have
the effect of delaying, impairing or impeding, the early termination or
expiration of any waiting periods under the HSR Act for the Conversion
Transactions. The parties shall each cooperate reasonably with one another in
connection with resolving any inquiry or investigation by any governmental
authority relating to their respective HSR Act Filings or the Conversion
Transactions. Without limiting the foregoing, each party shall, subject to
applicable law, rule or regulation (including that of a national securities
exchange or self-regulatory organization), (i) promptly inform the other party
of any written or oral communication received from any governmental authority
relating to its HSR Act Filing or the transactions contemplated hereby (and if
in writing, furnish counsel to the other party with a copy of such
communication); (ii) use its reasonable best efforts to respond as promptly as
practicable to any request from any governmental authority for information,
documents or other materials in connection with the review of the HSR Filings or
the Conversion Transactions; (iii) provide to counsel for the other party, and
permit counsel for the other party to review and comment in advance of
submission, all proposed correspondence, filings and written communications to
any governmental authority with respect to the Conversion Transactions; and
(iv) not participate in any substantive meeting or discussion with any
governmental authority in respect of investigation or inquiry concerning the
Conversion Transactions unless it consults with the other party in advance and,
except as prohibited by applicable Law or governmental authority, gives the
other party and/or its counsel the opportunity to attend and participate
thereat.

ARTICLE V.

MISCELLANEOUS

5.1    Termination. This Conversion Agreement may be terminated by the Investor
by written notice to the Company, if the Closing has not been consummated on or
before December 28, 2018. This Conversion Agreement shall automatically
terminate upon the valid termination of the Merger Agreement pursuant to its
terms. In the event of termination of this Conversion Agreement pursuant to this
Section 5.1, the Conversion Agreement shall be null and void and there shall be
no liability on the part of either party; provided, however, that nothing herein
shall relieve

 

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either party from liability for (i) any breach of this Conversion Agreement or
(ii) any willful breach of, or fraud in connection with, this Conversion
Agreement. Article I and Sections 3.1, 4.1, 4.5, 5.1, 5.3, 5.4 and 5.9 shall
survive any termination of this Conversion Agreement.

5.2    Fees and Expenses. The Company shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by the Company incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. In addition, the Company shall
reimburse the Investor for the Investor’s reasonable and documented
out-of-pocket expenses (including fees of outside legal counsel and accountants)
incurred in connection herewith, including in connection with any amendments,
waivers or consents under or in respect of this Conversion Agreement or the
Indenture (whether or not such amendment, waiver or consent becomes effective),
including the reasonable and documented out-of-pocket costs and expenses
incurred in enforcing, defending or declaring (or determining whether or how to
enforce, defend or declare) any rights or remedies hereunder, including the
rights and remedies specified in Section 5.13. The Company shall pay all Trustee
fees and expenses, including counsel fees, expenses and stamp taxes in
connection with the transactions contemplated in this Conversion Agreement.

5.3    Entire Agreement. This Conversion Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into
such documents.

5.4    Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New
York City time) on a Business Day; (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Business Day or later than 5:30 p.m. (New York City time) on any
Business Day; (c) the next Business Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service; or (d) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.

5.5    Amendments; Waivers. No provision of this Conversion Agreement may be
waived, modified, supplemented or amended, except in a written instrument signed
by the Company and the Investor. No waiver of any default with respect to any
provision, condition or requirement of this Conversion Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or
a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right. In addition, Baupost may not amend or
waive, in any material respect, any of the rights of the Company or the Investor
in this Conversion Agreement without the written consent of Akebia (which
consent shall not be unreasonably delayed, withheld or conditioned).

 

14

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5.6    Headings. The headings herein are for convenience only, do not constitute
a part of this Conversion Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

5.7    Successors and Assigns; No Transfers. This Conversion Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. No party hereto may assign this Conversion Agreement or any
rights or obligations hereunder without the prior written consent of the
Investor or the Company, respectively (other than to any successor Person
resulting from any merger, consolidation, share exchange or other similar
transaction). The Investor shall not and shall cause its Affiliates to not sell,
transfer, assign or otherwise dispose of (except to Permitted Transferees),
impose any Lien on any Existing Notes or otherwise take any action with the
purpose of or that could be reasonably likely to cause the Existing Notes
Conversion and the related discharge of the Indenture to not occur.

5.8    No Third-Party Beneficiaries. This Conversion Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person. For the avoidance of doubt, Akebia is an intended
beneficiary of all of the obligations of the Company and the Investor in this
Conversion Agreement.

5.9    Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Conversion Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof; provided
that, the determination of whether the Merger has been consummated in accordance
with the terms of the Merger Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Conversion Agreement (whether brought against
a party hereto or its respective affiliates, directors, officers, stockholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or that any such court is an
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Conversion Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any other manner permitted by law. If either party
shall commence an action, suit or proceeding to enforce any provisions of this
Conversion Agreement, then, in addition to the obligations of the Company under
Section 4.2, the prevailing party in such action, suit or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred in the investigation, preparation and prosecution of such
action or proceeding.

 

15

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5.10    Survival. Article I and Sections 3.1, 4.1, 4.5, 5.1, 5.3, 5.4 and 5.9
shall survive the Closing and the delivery of the Conversion Shares and the
Additional Shares.

5.11    Execution. This Conversion Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

5.12    Severability. If any term, provision, covenant or restriction of this
Conversion Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

5.13    Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the parties hereto will
be entitled to specific performance under this Conversion Agreement. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by the Investor or the Company by reason of any breach (or threatened
breach) of any obligations contained in this Conversion Agreement and hereby
agree to waive and not to assert in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.

5.14    Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

5.15    Construction. The parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise this
Conversion Agreement and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Conversion Agreement or any
amendments thereto. In addition, each and every reference to shares of Common
Stock in this Conversion Agreement shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar
transactions of the shares of Common Stock that occur after the date of this
Conversion Agreement.

 

16

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5.16    WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

(Signature Pages Follow)

 

17

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

 

KERYX BIOPHARMACEUTICALS, INC.     Address for Notice: By:  

/s/ Jodie Morrison                                        

    Keryx Biopharmaceuticals, Inc. Name:   Jodie Morrison     One Marina Park
Drive Title:   Interim Chief Executive Officer    

Tenth Floor

Boston, MA 02210
Attention: Scott Holmes, CFO
Telephone: (617) 466-3520
Facsimile: (617) 466-3500
Email: scott.holmes@keryx.com

 

With a copy to (which shall not constitute notice):

 

Jacqueline Mercier
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Telephone: (617) 570 1762
Facsimile: (617) 801 8711
Email: JMercier@goodwinlaw.com

[Signature Page of Keryx Biopharmaceuticals, Inc. to Notes Conversion Agreement]

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BAUPOST GROUP SECURITIES, L.L.C.     Address for Notice: By:  

/s/ James Mooney

    Baupost Group Securities, L.L.C. Name:   James Mooney     c/o The Baupost
Group, L.L.C. Title:   Partner    

10 St. James Avenue, Suite 1700

Boston, MA 02116

Attn: Gregory A. Ciongoli, Michael Sperling, Frederick H. Fogel and John F.
Harvey

Office: (617) 210-8300

Fax: (617) 451-7731

     

With a copy to (which shall not constitute notice):

 

Ropes & Gray LLP

Prudential Tower, 800 Boylston Street

Boston, MA 02199

Attention: Jeffrey Katz

jeffrey.katz@ropesgray.com

Office: (617) 951-7072

Fax: (617) 235-0617

[Signature Page of Baupost Group Securities, L.L.C. to Notes Conversion
Agreement]

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

 

AKEBIA THERAPEUTICS, INC. (FOR PURPOSES OF SECTIONS 2.3(C), 5.5 (WITH RESPECT TO
THE LAST SENTENCE ONLY) AND 5.6 – 5.16 ONLY)     Address for Notice: By:  

/s/ John P. Butler                                                             

    Akebia Therapeutics, Inc. Name:   John P. Butler     245 First Street Title:
  President and Chief Executive Officer    

Cambridge, MA 02142

Attention: Michael Dahan, Chief Business Officer;

Nikki Hadas, General Counsel
Telephone:
Facsimile: (617) 871-2065
Email: mdahan@akebia.com;

nhadas@akebia.com

 

With a copy to (which shall not constitute notice):

 

Peter Handrinos, Scott Shean and Daniel Rees
Latham & Watkins LLP
200 Clarendon Street
Boston, MA 02116
Telephone:
Facsimile: (617) 948-6001
Email:peter.handrinos@lw.com;

scott.shean@lw.com;

daniel.rees@lw.com

[Signature Page of Akebia Therapeutics, Inc. to Notes Conversion Agreement]

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EXHIBIT A

FORM OF REGISTRATION RIGHTS AGREEMENT

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

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

BY AND BETWEEN

AKEBIA THERAPEUTICS, INC.

AND

BAUPOST GROUP SECURITIES, L.L.C.

DATED AS OF [ ● ], 2018

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I EFFECTIVENESS

     1

Section 1.1.

   Effectiveness      1

ARTICLE II DEFINITIONS

     2

Section 2.1.

   Definitions      2

Section 2.2.

   Other Interpretive Provisions      5

ARTICLE III REGISTRATION RIGHTS

     5

Section 3.1.

   Demand Registration      6

Section 3.2.

   Shelf Registration      7

Section 3.3.

   Piggyback Registration      9

Section 3.4.

   Lock-Up Agreements      11

Section 3.5.

   Registration Procedures      11

Section 3.6.

   Underwritten Offerings      17

Section 3.7.

   No Inconsistent Agreements; Additional Rights      18

Section 3.8.

   Registration Expenses      18

Section 3.9.

   Indemnification      19

Section 3.10.

   Rules 144 and 144A and Regulation S      22

Section 3.11.

   Existing Registration Statements      22

ARTICLE IV MISCELLANEOUS

     23

Section 4.1.

   Authority; Effect      23

Section 4.2.

   Notices      23

Section 4.3.

   Termination and Effect of Termination      24

Section 4.4.

   Permitted Transferees      24

Section 4.5.

   Remedies      24

Section 4.6.

   Amendments      25

Section 4.7.

   Governing Law      25

Section 4.8.

   Consent to Jurisdiction      25

Section 4.9.

   WAIVER OF JURY TRIAL      26

Section 4.10.

   Merger; Binding Effect, Etc      26

Section 4.11.

   Counterparts      26

Section 4.12.

   Severability      26

Section 4.13.

   No Recourse      26

 

i

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This REGISTRATION RIGHTS AGREEMENT (as it may be amended from time to time in
accordance with the terms hereof, the “Agreement”), dated as of [ ● ], is made
by and between:

i.    Akebia Therapeutics, Inc., a Delaware corporation (the “Company”); and

ii.    Baupost Group Securities, L.L.C. (together with its Permitted Transferees
that become party hereto, the “Investor”).

RECITALS

WHEREAS, pursuant to an Agreement and Plan of Merger dated as of June 28, 2018,
(the “Merger Agreement”) among the Company, Keryx Biopharmaceuticals, Inc., a
Delaware corporation (“Keryx”), and Alpha Therapeutics Merger Sub, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company (“Merger
Sub”), Merger Sub merged with and into Keryx, the separate corporate existence
of Merger Sub ceased and Keryx continues as the surviving corporation and a
wholly owned subsidiary of the Company (the “Merger”).

WHEREAS, pursuant to the terms and conditions set forth in the Notes Conversion
Agreement, dated as of June 28, 2018, among the Company, Keryx and the Investor
(the “Conversion Agreement”), the Investor has agreed to surrender the Existing
Notes (as defined in the Conversion Agreement) for conversion in accordance with
the terms of the governing indenture (as amended), in a manner that creates a
Conversion Date (as defined in such indenture) in respect of the Existing Notes
(the “Existing Notes Conversion”), prior to the Effective Time (as defined in
the Merger Agreement) of the Merger, and conditioned upon the issuance to the
Investor immediately prior to the Effective Time of 4,000,000 shares of common
stock of Keryx (the “Additional Shares”).

WHEREAS, in connection with the Merger, and pursuant to the terms set forth in
the Merger Agreement, at the Effective Time, each of: (i) the shares of common
stock of Keryx issued to the Investor upon the Existing Notes Conversion (the
“Conversion Shares”); (ii) the Additional Shares; and (iii) the 25,791,678
shares of common stock of Keryx held by the Investor as of the date hereof (the
“Held Shares”) shall be converted into the right to receive 0.37433 fully paid
and non-assessable shares of common stock of the Company, par value 0.00001 per
share (the “Common Stock”, and the Common Stock the Investor shall have the
right to receive on account of the Conversion Shares, the Additional Shares and
the Held Shares, collectively, the “Merger Shares”).

NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and agreements of the parties hereto, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

ARTICLE I

EFFECTIVENESS

Section 1.1.    Effectiveness. This Agreement shall become effective as of the
consummation of the Merger in accordance with the Merger Agreement.

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ARTICLE II

DEFINITIONS

Section 2.1.    Definitions. As used in this Agreement, the following terms
shall have the following meanings:

“Adverse Disclosure” means public disclosure of material non-public information
that, in the good faith judgment of the board of directors of the Company:
(i) would be required to be made in any Registration Statement filed with the
SEC by the Company so that such Registration Statement, from and after its
effective date, does not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) would not be required to be made at such
time but for the filing, effectiveness or continued use of such Registration
Statement; and (iii) the Company has a bona fide business purpose for not
disclosing publicly.

“Affiliate” means, with respect to any specified Person, (a) any Person that
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person (b) in the
event that the specified Person is a natural Person, a Member of the Immediate
Family of such Person or (c) any investment fund advised or managed by, or under
common control or management with, such person; provided that the Company and
each of its subsidiaries shall be deemed not to be Affiliates of any Investor.
As used in this definition, the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.

“Agreement” shall have the meaning set forth in the preamble.

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by law to be closed in the City of New
York.

“Common Stock” shall have the meaning set forth in the recitals.

“Demand Registration” shall have the meaning set forth in Section 3.1.1(a).

“Demand Registration Request” shall have the meaning set forth in
Section 3.1.1(a).

“Demand Registration Statement” shall have the meaning set forth in
Section 3.1.1(c).

“Demand Suspension” shall have the meaning set forth in Section 3.1.5.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor thereto, and any rules and regulations promulgated thereunder, all as
the same shall be in effect from time to time.

“FINRA” means the Financial Industry Regulatory Authority.

“Holder” means the Investors who then hold Registrable Securities under this
Agreement.

 

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“Investor” shall have the meaning set forth in the preamble.

“Investor Approval” means the prior written consent of the Investor.

“Issuer Free Writing Prospectus” means an issuer free writing prospectus, as
defined in Rule 433 under the Securities Act, relating to an offer of the
Registrable Securities.

“Loss” shall have the meaning set forth in Section 3.9.1.

“Member of the Immediate Family” means, with respect to any Person who is an
individual, (a) each parent, spouse (but not including a former spouse or a
spouse from whom such Person is legally separated) or child (including those
adopted) of such individual and (b) each trustee, solely in his or her capacity
as trustee, for a trust naming only one or more of the Persons listed in
sub-clause (a) as beneficiaries.

“Permitted Transferee” means (i) any Affiliate of an Investor and (ii) any
custodian or nominee that holds Registrable Securities for the account of
Purchaser or any Permitted Transferee described in clause (i).

“Person” means any individual, partnership, corporation, company, association,
trust, joint venture, limited liability company, unincorporated organization,
entity or division, or any government, governmental department or agency or
political subdivision thereof.

“Piggyback Notice” shall have the meaning set forth in Section 3.3.1.

“Piggyback Registration” shall have the meaning set forth in Section 3.3.1.

“Pro Rata Portion” means, with respect to each Holder requesting that its shares
be registered or sold in an Underwritten Public Offering, a number of such
shares equal to the aggregate number of Registrable Securities to be registered
or sold (excluding any shares to be registered or sold for the account of the
Company) multiplied by a fraction, the numerator of which is the aggregate
number of Registrable Securities held by such Holder, and the denominator of
which is the aggregate number of Registrable Securities held by all Holders
requesting that their Registrable Securities be registered or sold.

“Prospectus” means (i) the prospectus included in any Registration Statement,
all amendments and supplements to such prospectus, including post-effective
amendments and supplements, and all other material incorporated by reference in
such prospectus, and (ii) any Issuer Free Writing Prospectus.

“Public Offering” means the offer and sale of Registrable Securities for cash
pursuant to an effective Registration Statement under the Securities Act (other
than a Registration Statement on Form S-4 or Form S-8 or any successor form).

“Registrable Securities” means (i) all shares of Common Stock that are not then
subject to forfeiture to the Company, (ii) all shares of Common Stock issuable
upon exercise, conversion or exchange of any option, warrant or convertible
security not then subject to vesting or forfeiture to the Company and (iii) all
shares of Common Stock directly or indirectly issued or then issuable

 

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with respect to the securities referred to in clauses (i) or (ii) above by way
of a stock dividend or stock split, or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. For the
avoidance of doubt, the Registrable Securities shall include the Merger Shares.
As to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (w) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement, (x) such securities shall have been Transferred pursuant to Rule 144,
(y) such holder is able to immediately sell such securities under Rule 144
without any restrictions on transfer (including without application of
paragraphs (c), (d), (e), (f) and (h) of Rule 144), as reasonably determined by
the Holder, or (z) such securities shall have ceased to be outstanding.

“Registration” means registration under the Securities Act of the offer and sale
to the public of any Registrable Securities under a Registration Statement. The
terms “register”, “registered” and “registering” shall have correlative
meanings.

“Registration Expenses” shall have the meaning set forth in Section 3.8.

“Registration Statement” means any registration statement of the Company filed
with, or to be filed with, the SEC under the Securities Act, including the
related Prospectus, amendments and supplements to such registration statement,
including pre- and post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement other than a
registration statement (and related Prospectus) filed on Form S-4 or Form S-8 or
any successor form thereto.

“Representatives” means, with respect to any Person, any of such Person’s
officers, directors, employees, agents, attorneys, accountants, actuaries,
consultants, equity financing partners or financial advisors or other Person
associated with, or acting on behalf of, such Person.

“Rule 144” means Rule 144 under the Securities Act (or any successor rule).

“SEC” means the Securities and Exchange Commission or any successor agency
having jurisdiction under the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended, and any successor
thereto, and any rules and regulations promulgated thereunder, all as the same
shall be in effect from time to time.

“Shelf Period” shall have the meaning set forth in Section 3.2.2.

“Shelf Registration” shall have the meaning set forth in Section 3.2.1(a).

“Shelf Registration Request” shall have the meaning set forth in
Section 3.2.1(a).

“Shelf Registration Statement” shall have the meaning set forth in
Section 3.2.1(a).

“Shelf Suspension” shall have the meaning set forth in Section 3.2.3.

 

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“Shelf Takedown Request” shall have the meaning set forth in Section 3.2.4(a).

“Transfer” means, with respect to any Registrable Security, any interest
therein, or any other securities or equity interests relating thereto, a direct
or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other
encumbrance or other disposition thereof, including the grant of an option or
other right, whether directly or indirectly, whether voluntarily, involuntarily,
by operation of law, pursuant to judicial process or otherwise.

“Transferred” shall have a correlative meaning.

“Trustee” means The Bank of New York Mellon Trust Company, N.A.

“Underwritten Public Offering” means an underwritten Public Offering, including
any bought deal or block sale to a financial institution conducted as an
underwritten Public Offering.

“Underwritten Shelf Takedown” means an Underwritten Public Offering pursuant to
an effective Shelf Registration Statement.

“WKSI” means any Securities Act registrant that is a well-known seasoned issuer
as defined in Rule 405 under the Securities Act at the most recent eligibility
determination date specified in paragraph (2) of that definition.

Section 2.2.    Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.

 

  (b) The words “hereof”, “herein”, “hereunder” and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
any subsection and section references are to this Agreement unless otherwise
specified.

 

  (c) The term “including” is not limiting and means “including without
limitation.”

 

  (d) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.

 

  (e) Whenever the context requires, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms.

ARTICLE III

REGISTRATION RIGHTS

The Company will perform and comply, and cause each of its subsidiaries to
perform and comply, with such of the following provisions as are applicable to
it. Each Holder will perform and comply with such of the following provisions as
are applicable to such Holder.

 

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Section 3.1.    Demand Registration.

Section 3.1.1.    Request for Demand Registration.

 

  (a) At any time after the date hereof, the Investors shall have the right to
make a written request from time to time (a “Demand Registration Request”) to
the Company for Registration of all or part of the Registrable Securities held
by such Investors. Any such Registration pursuant to a Demand Registration
Request shall hereinafter be referred to as a “Demand Registration.”

 

  (b) Each Demand Registration Request shall specify (x) the kind and aggregate
amount of Registrable Securities to be registered, and (y) the intended method
or methods of disposition thereof.

 

  (c) Upon receipt of a Demand Registration Request, the Company shall as
promptly as practicable file a Registration Statement (a “Demand Registration
Statement”) relating to such Demand Registration, and use its reasonable best
efforts to cause such Demand Registration Statement to be promptly declared
effective under the Securities Act.

Section 3.1.2.    Limitation on Demand Registrations. The Company shall not be
obligated to take any action to effect any Demand Registration if a Demand
Registration pursuant to Section 3.1 was declared effective or an Underwritten
Shelf Takedown pursuant to Section 3.2 was consummated within the preceding one
hundred eighty (180) days (unless otherwise consented to by the Company).

Section 3.1.3.    Demand Withdrawal. The Investors may withdraw all or any
portion of its Registrable Securities included in a Demand Registration from
such Demand Registration at any time prior to the effectiveness of the
applicable Demand Registration Statement. Upon receipt of a notice to such
effect from with respect to all of the Registrable Securities included in such
Demand Registration, the Company shall cease all efforts to secure effectiveness
of the applicable Demand Registration Statement and such Demand Registration
shall not count as such pursuant to Section 3.1.2 above.

Section 3.1.4.    Effective Registration. The Company shall use reasonable best
efforts to cause the Demand Registration Statement to become effective and
remain effective for not less than one hundred eighty (180) days (or such
shorter period as will terminate when all Registrable Securities covered by such
Demand Registration Statement have been sold or withdrawn), or, if such Demand
Registration Statement relates to an Underwritten Public Offering, such longer
period as in the opinion of counsel for the underwriter or underwriters a
Prospectus is required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer.

Section 3.1.5.    Delay in Filing; Suspension of Registration. If the filing,
initial effectiveness or continued use of a Demand Registration Statement at any
time would require the Company to make an Adverse Disclosure, the Company may,
upon giving prompt written notice of such action to the Holders, delay the
filing or initial effectiveness of, or suspend use of, the Demand Registration
Statement (a “Demand Suspension”);

 

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provided, however, that the Company shall not be permitted to exercise a Demand
Suspension more than once during any twelve (12)-month period or for a period
exceeding sixty (60) days. In the case of a Demand Suspension, the Holders agree
to suspend use of the applicable Prospectus in connection with any sale or
purchase, or offer to sell or purchase, Registrable Securities, upon receipt of
the notice referred to above. The Company shall immediately notify the Holders
in writing upon the termination of any Demand Suspension, amend or supplement
the Prospectus, if necessary, so it does not contain any untrue statement or
omission and furnish to the Holders such numbers of copies of the Prospectus as
so amended or supplemented as the Holders may reasonably request. The Company
shall, if necessary, supplement or amend the Demand Registration Statement, if
required by the registration form used by the Company for the Demand
Registration or by the instructions applicable to such registration form or by
the Securities Act or the rules or regulations promulgated thereunder or as may
reasonably be requested by the Investors.

Section 3.1.6.    Priority of Securities Registered Pursuant to Demand
Registrations. If the managing underwriter or underwriters of a proposed
Underwritten Public Offering of the Registrable Securities included in a Demand
Registration advise the Company in writing that, in its or their opinion, the
number of securities requested to be included in such Demand Registration
exceeds the number that can be sold in such offering without being likely to
have an adverse effect on the price, timing or distribution of the securities
offered or the market for the securities offered, then the securities to be
included in such Registration shall be, in the case of any Demand Registration,
(x) first, allocated to each Holder that has requested to participate in such
Demand Registration an amount equal to the lesser of (i) the number of such
Registrable Securities requested to be registered or sold by such Holders, and
(ii) a number of such shares equal to such Holder’s Pro Rata Portion, and
(y) second, and only if all the securities referred to in clause (x) have been
included, the number of other securities that, in the opinion of such managing
underwriter or underwriters can be sold without having such adverse effect.

Section 3.1.7.    Resale Rights. In the event that the Investor requests to
participate in a Registration pursuant to this Section 3.1 in connection with a
distribution of Registrable Securities to its partners or members, the
Registration shall provide for resale by such partners or members, if requested
by such Investor.

Section 3.2.    Shelf Registration.

Section 3.2.1.    Request for Shelf Registration.

 

  (a) Upon the written request of the Investors from time to time (a “Shelf
Registration Request”), the Company shall promptly file with the SEC a shelf
Registration Statement pursuant to Rule 415 under the Securities Act (“Shelf
Registration Statement”) relating to the offer and sale of Registrable
Securities by any Holders thereof from time to time in accordance with the
methods of distribution elected by such Holders, and the Company shall use its
reasonable best efforts to cause such Shelf Registration Statement to promptly
become effective under the Securities Act. Any such Registration pursuant to a
Shelf Registration Request shall hereinafter be referred to as a “Shelf
Registration.”

 

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  (b) If on the date of the Shelf Registration Request the Company is a WKSI,
then the Shelf Registration Request may request Registration of an unspecified
amount of Registrable Securities to be sold by unspecified Holders. If on the
date of the Shelf Registration Request the Company is not a WKSI, then the Shelf
Registration Request shall specify the aggregate amount of Registrable
Securities to be registered. The Company shall provide to the Investors the
information necessary to determine the Company’s status as a WKSI upon request.

Section 3.2.2.    Continued Effectiveness. The Company shall use its reasonable
best efforts to keep such Shelf Registration Statement continuously effective
under the Securities Act in order to permit the Prospectus forming part of the
Shelf Registration Statement to be usable by the Holders until the earlier of:
(i) the date as of which all Registrable Securities have been sold pursuant to
the Shelf Registration Statement or another Registration Statement filed under
the Securities Act (but in no event prior to the applicable period referred to
in Section 4(a)(3) of the Securities Act and Rule 174 thereunder); and (ii) the
date as of which no Holder holds Registrable Securities (such period of
effectiveness, the “Shelf Period”). Subject to Section 3.2.3, the Company shall
be deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that would result in
the Holders of the Registrable Securities covered thereby not being able to
offer and sell any Registrable Securities pursuant to such Shelf Registration
Statement during the Shelf Period, unless such action or omission is required by
applicable law.

Section 3.2.3.    Suspension of Registration. If the continued use of such Shelf
Registration Statement at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of such action to
the Holders, suspend use of the Shelf Registration Statement (a “Shelf
Suspension”); provided, however, that the Company shall not be permitted to
exercise a Shelf Suspension more than one time during any twelve (12)-month
period or for a period exceeding sixty (60) days. In the case of a Shelf
Suspension, the Holders agree to suspend use of the applicable Prospectus in
connection with any sale or purchase of, or offer to sell or purchase,
Registrable Securities, upon receipt of the notice referred to above. The
Company shall immediately notify the Holders in writing upon the termination of
any Shelf Suspension, amend or supplement the Prospectus, if necessary, so it
does not contain any untrue statement or omission and furnish to the Holders
such numbers of copies of the Prospectus as so amended or supplemented as the
Holders may reasonably request. The Company shall, if necessary, supplement or
amend the Shelf Registration Statement, if required by the registration form
used by the Company for the Shelf Registration Statement or by the instructions
applicable to such registration form or by the Securities Act or the rules or
regulations promulgated thereunder or as may reasonably be requested by the
Holders of a majority of Registrable Securities that are included in such Shelf
Registration Statement.

 

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Section 3.2.4.    Shelf Takedown.

 

  (a) At any time the Company has an effective Shelf Registration Statement with
respect to a Holder’s Registrable Securities, by notice to the Company
specifying the intended method or methods of disposition thereof, the Investors
may make a written request (a “Shelf Takedown Request”) to the Company to effect
a Public Offering, including an Underwritten Shelf Takedown, of all or a portion
of the such Holder’s Registrable Securities that may be registered under such
Shelf Registration Statement, and as soon as practicable the Company shall amend
or supplement the Shelf Registration Statement as necessary for such purpose.

 

  (b) All determinations as to whether to complete any Underwritten Shelf
Takedown and as to the timing, manner, price and other terms of any Underwritten
Shelf Takedown contemplated by this Section 3.2.4 shall be determined by the
participating Investors.

 

  (c) The Company shall not be obligated to take any action to effect any
Underwritten Shelf Takedown if a Demand Registration pursuant to Section 3.1 was
declared effective or an Underwritten Shelf Takedown pursuant to Section 3.2 was
consummated within the preceding one hundred eighty (180) days (unless otherwise
consented to by the Company).

Section 3.2.5.    Priority of Securities Sold Pursuant to Shelf Takedowns. If
the managing underwriter or underwriters of a proposed Underwritten Shelf
Takedown pursuant to Section 3.2.4 advise the Company in writing that, in its or
their opinion, the number of securities requested to be included in the proposed
Underwritten Shelf Takedown exceeds the number that can be sold in such
Underwritten Shelf Takedown without being likely to have an adverse effect on
the price, timing or distribution of the securities offered or the market for
the securities offered, the number of Registrable Securities to be included in
such offering shall be (x) first, allocated to each Holder that has requested to
participate in such Underwritten Shelf Takedown an amount equal to the lesser of
(i) the number of such Registrable Securities requested to be registered or sold
by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata
Portion, and (y) second, and only if all the securities referred to in clause
(x) have been included, the number of other securities that, in the opinion of
such managing underwriter or underwriters can be sold without having such
adverse effect.

Section 3.2.6.    Resale Rights. In the event that an Investor elects to request
a Registration pursuant to this Section 3.2 in connection with a distribution of
Registrable Securities to its partners or members, the Registration shall
provide for resale by such partners or members, if requested by such Investor.

Section 3.3.    Piggyback Registration.

Section 3.3.1.    Participation. If the Company at any time proposes to file a
Registration Statement under the Securities Act or to conduct a Public Offering
with

 

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respect to any offering of its equity securities for its own account or for the
account of any other Persons (other than (i) a Registration under Sections 3.1
or 3.2, (ii) a Registration on Form S-4 or Form S-8 or any successor form to
such forms or (iii) a Registration of securities solely relating to an offering
and sale to employees or directors of the Company or its subsidiaries pursuant
to any employee stock plan or other employee benefit plan arrangement), then, as
soon as practicable (but in no event less than ten (10) Business Days prior to
the proposed date of filing of such Registration Statement or, in the case of a
Public Offering under a Shelf Registration Statement, the anticipated pricing or
trade date), the Company shall give written notice (a “Piggyback Notice”) of
such proposed filing or Public Offering to all Holders, and such Piggyback
Notice shall offer the Holder the opportunity to register under such
Registration Statement, or to sell in such Public Offering, such number of
Registrable Securities as each such Holder may request in writing (a “Piggyback
Registration”). Subject to Section 3.3.2, the Company shall include in such
Registration Statement or in such Public Offering as applicable, all such
Registrable Securities that are requested to be included therein within five
(5) Business Days after the receipt by such Holder of any such notice; provided,
however, that if at any time after giving written notice of its intention to
register or sell any securities and prior to the effective date of the
Registration Statement filed in connection with such Registration, or the
pricing or trade date of a Public Offering under a Shelf Registration Statement,
the Company determines for any reason not to register or sell or to delay the
Registration or sale of such securities, the Company shall give written notice
of such determination to each Holder and, thereupon, (i) in the case of a
determination not to register or sell, shall be relieved of its obligation to
register or sell any Registrable Securities in connection with such Registration
or Public Offering (but not from its obligation to pay the Registration Expenses
in connection therewith), without prejudice, however, to the rights of any
Holder entitled to request that such Registration or sale be effected as a
Demand Registration under Section 3.1 or an Underwritten Shelf Takedown under
Section 3.2, as the case may be, and (ii) in the case of a determination to
delay Registration or sale, in the absence of a request for a Demand
Registration or an Underwritten Shelf Takedown, as the case may be, shall be
permitted to delay registering or selling any Registrable Securities, for the
same period as the delay in registering or selling such other securities. Any
Holder shall have the right to withdraw all or part of its request for inclusion
of its Registrable Securities in a Piggyback Registration by giving written
notice to the Company of its request to withdraw.

Section 3.3.2.    Priority of Piggyback Registration. If the managing
underwriter or underwriters of any proposed offering of Registrable Securities
included in a Piggyback Registration informs the Company and the participating
Holders in writing that, in its or their opinion, the number of securities that
such Holders and any other Persons intend to include in such offering exceeds
the number that can be sold in such offering without being likely to have a
significant adverse effect on the price, timing or distribution of the
securities offered or the market for the securities offered, then the securities
to be included in such Registration shall be (i) first, one hundred percent
(100%) of the securities that the Company proposes to sell, and (ii) second, and
only if all the securities referred to in clause (i) have been included, the
number of Registrable Securities requested to be sold by such Holder that, in
the opinion of such managing underwriter or underwriters, can be sold without
having such adverse effect, with such number to be allocated among the Holders
that have requested to participate in such Registration based on an amount equal
to the

 

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lesser of (x) the number of such Registrable Securities requested to be sold by
such Holder, and (y) a number of such shares equal to such Holder’s Pro Rata
Portion, and (iii) third, and only if all of the Registrable Securities referred
to in clause (ii) have been included in such Registration, any other securities
eligible for inclusion in such Registration.

Section 3.3.3.    No Effect on Other Registrations. No Registration of
Registrable Securities effected pursuant to a request under this Section 3.3
shall be deemed to have been effected pursuant to Sections 3.1 and 3.2 or shall
relieve the Company of its obligations under Sections 3.1 and 3.2.

Section 3.4.    Lock-Up Agreements. In connection with each Registration or sale
of Registrable Securities pursuant to Section 3.1, 3.2 or 3.3 conducted as an
Underwritten Public Offering, the Company agrees, if requested, to cause its
directors and officers to become bound by and to execute and deliver a lock-up
agreement with the underwriter(s) of such Underwritten Public Offering
restricting such directors’ and officers’ right to (a) Transfer, directly or
indirectly, any equity securities of the Company held by such directors and
officers or (b) enter into any swap or other arrangement that transfers to
another any of the economic consequences of ownership of such securities during
the period commencing on the date of the final Prospectus relating to the
Underwritten Public Offering and ending on the date specified by the
underwriters (such period not to exceed ninety (90) days in the case of any
registration or sale, plus such additional period as may be requested by the
Company or an underwriter to accommodate regulatory restrictions on the
publication or other distribution of research reports and analyst
recommendations and opinions, if applicable). The terms of such lock-up
agreements shall be negotiated among the Investors, the Company and the
underwriters and shall include customary carve-outs from the restrictions on
Transfer set forth therein.

Section 3.5.    Registration Procedures.

Section 3.5.1.    Requirements. In connection with the Company’s obligations
under Sections 3.1 – 3.4 (and in the case of 3.5.1(z) below, in connection with
the Company’s obligations under Sections 3.1 – 3.4 and 3.10) the Company shall
use its reasonable best efforts to effect such Registration and to permit the
sale of such Registrable Securities in accordance with the intended method or
methods of distribution thereof as expeditiously as reasonably practicable, and
in connection therewith the Company shall:

 

  (a) As promptly as practicable prepare the required Registration Statement,
including all exhibits and financial statements required under the Securities
Act to be filed therewith and Prospectus, and, before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, (x) furnish to
the underwriters, if any, and to the Holders of the Registrable Securities
covered by such Registration Statement, copies of all documents prepared to be
filed, which documents shall be subject to the review of such underwriters and
such Holders and their respective counsel, (y) make such changes in such
documents concerning the Holders prior to the filing thereof as such Holders, or
their counsel, may reasonably request and (z) except in the case of a
Registration under Section 3.3 not file any Registration Statement or Prospectus
or amendments or supplements thereto to which the Holders, in such capacity, or
the underwriters, if any, shall reasonably object;

 

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  (b) prepare and file with the SEC such amendments and post-effective
amendments to such Registration Statement and supplements to the Prospectus as
may be (x) reasonably requested by any Holder with Registrable Securities
covered by such Registration Statement, (y) reasonably requested by any
participating Holder (to the extent such request relates to information relating
to such Holder), or (z) necessary to keep such Registration Statement effective
for the period of time required by this Agreement, and comply with provisions of
the applicable securities laws with respect to the sale or other disposition of
all securities covered by such Registration Statement during such period in
accordance with the intended method or methods of disposition by the sellers
thereof set forth in such Registration Statement;

 

  (c) notify the participating Holders and the managing underwriter or
underwriters, if any, and (if requested) confirm such notice in writing and
provide copies of the relevant documents, as soon as reasonably practicable
after notice thereof is received by the Company (a) when the applicable
Registration Statement or any amendment thereto has been filed or becomes
effective, and when the applicable Prospectus or any amendment or supplement
thereto has been filed, (b) of any written comments by the SEC, or any request
by the SEC or other federal or state governmental authority for amendments or
supplements to such Registration Statement or such Prospectus, or for additional
information (whether before or after the effective date of the Registration
Statement) or any other correspondence with the SEC relating to, or which may
affect, the Registration, (c) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or any order by the
SEC or any other regulatory authority preventing or suspending the use of any
preliminary or final Prospectus or the initiation or threatening of any
proceedings for such purposes, (d) if, at any time, the representations and
warranties of the Company in any applicable underwriting agreement cease to be
true and correct in all material respects and (e) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;

 

  (d)

promptly notify each selling Holder and the managing underwriter or
underwriters, if any, when the Company becomes aware of the happening of any
event as a result of which the applicable Registration Statement or the
Prospectus included in such Registration Statement (as then in effect) contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein (in the case of such Prospectus or any
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading, when any Issuer Free Writing Prospectus

 

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  includes information that may conflict with the information contained in the
Registration Statement, or, if for any other reason it shall be necessary during
such time period to amend or supplement such Registration Statement or
Prospectus in order to comply with the Securities Act and, as promptly as
reasonably practicable thereafter, prepare and file with the SEC, and furnish
without charge to the selling Holders and the managing underwriter or
underwriters, if any, an amendment or supplement to such Registration Statement
or Prospectus, which shall correct such misstatement or omission or effect such
compliance;

 

  (e) to the extent the Company is eligible under the relevant provisions of
Rule 430B under the Securities Act, if the Company files any Shelf Registration
Statement, the Company shall include in such Shelf Registration Statement such
disclosures as may be required by Rule 430B under the Securities Act (referring
to the unnamed selling security holders in a generic manner by identifying the
initial offering of the securities to the Holders) in order to ensure that the
Holders may be added to such Shelf Registration Statement at a later time
through the filing of a Prospectus supplement rather than a post-effective
amendment;

 

  (f) use its reasonable best efforts to prevent, or obtain the withdrawal of,
any stop order or other order or notice preventing or suspending the use of any
preliminary or final Prospectus;

 

  (g) promptly incorporate in a Prospectus supplement, Issuer Free Writing
Prospectus or post-effective amendment such information as the managing
underwriter or underwriters and the Investors agree should be included therein
relating to the plan of distribution with respect to such Registrable
Securities; and make all required filings of such Prospectus supplement, Issuer
Free Writing Prospectus or post-effective amendment as soon as reasonably
practicable after being notified of the matters to be incorporated in such
Prospectus supplement, Issuer Free Writing Prospectus or post-effective
amendment;

 

  (h) furnish to each selling Holder and each underwriter, if any, without
charge, as many conformed copies as such Holder or underwriter may reasonably
request of the applicable Registration Statement and any amendment or
post-effective amendment or supplement thereto, including financial statements
and schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);

 

  (i)

deliver to each selling Holder and each underwriter, if any, without charge, as
many copies of the applicable Prospectus (including each preliminary Prospectus)
and any amendment or supplement thereto and such other documents as such Holder
or underwriter may reasonably request in order to facilitate the disposition of
the Registrable Securities by such Holder or underwriter (it being understood
that the Company shall consent to the use

 

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  of such Prospectus or any amendment or supplement thereto by each of the
selling Holders and the underwriters, if any, in connection with the offering
and sale of the Registrable Securities covered by such Prospectus or any
amendment or supplement thereto);

 

  (j) on or prior to the date on which the applicable Registration Statement
becomes effective, use its reasonable best efforts to register or qualify, and
cooperate with the selling Holders, the managing underwriter or underwriters, if
any, and their respective counsel, in connection with the Registration or
qualification of such Registrable Securities for offer and sale under the
securities or “Blue Sky” laws of each state and other jurisdiction as any such
selling Holder or managing underwriter or underwriters, if any, or their
respective counsel reasonably request in writing and do any and all other acts
or things reasonably necessary or advisable to keep such Registration or
qualification in effect for such period as required by Section 3.1 or
Section 3.2, as applicable, provided that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to taxation or general
service of process in any such jurisdiction where it is not then so subject;

 

  (k) cooperate with the selling Holders and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request prior to any sale of Registrable Securities to the underwriters;

 

  (l) use its reasonable best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof or the underwriter or underwriters, if
any, to consummate the disposition of such Registrable Securities;

 

  (m) not later than the effective date of the applicable Registration
Statement, provide a CUSIP number for applicable Registrable Securities;

 

  (n) make such representations and warranties to the Holders being registered,
and the underwriters or agents, if any, in form, substance and scope as are
customarily made by issuers in public offerings similar to the offering then
being undertaken;

 

  (o) enter into such customary agreements (including underwriting and
indemnification agreements) and take all such other actions as the Investors or
the managing underwriter or underwriters, if any, reasonably request in order to
expedite or facilitate the Registration and disposition of such Registrable
Securities;

 

14

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  (p) obtain for delivery to the Holders being registered and to the underwriter
or underwriters, if any, an opinion or opinions from counsel for the Company
dated the most recent effective date of the Registration Statement or, in the
event of an Underwritten Public Offering, the date of the closing under the
underwriting agreement, in customary form, scope and substance, which opinions
shall be reasonably satisfactory to such Holders or underwriters, as the case
may be, and their respective counsel;

 

  (q) in the case of an Underwritten Public Offering, obtain for delivery to the
Company and the managing underwriter or underwriters, with copies to the Holders
included in such Registration or sale, a comfort letter from the Company’s
independent certified public accountants or independent auditors (and, if
necessary, any other independent certified public accountants or independent
auditors of any subsidiary of the Company or any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement) in customary form and covering
such matters of the type customarily covered by comfort letters as the managing
underwriter or underwriters reasonably request, dated the date of execution of
the underwriting agreement and brought down to the closing under the
underwriting agreement;

 

  (r) cooperate with each seller of Registrable Securities and each underwriter,
if any, participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
FINRA;

 

  (s) use its reasonable best efforts to comply with all applicable securities
laws and, if a Registration Statement was filed, make available to its security
holders, as soon as reasonably practicable, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;

 

  (t) provide and cause to be maintained a transfer agent and registrar for all
Registrable Securities covered by the applicable Registration Statement;

 

  (u) use its reasonable best efforts to cause all Registrable Securities
covered by the applicable Registration Statement to be listed on each securities
exchange on which any of the Company’s equity securities are then listed or
quoted and on each inter-dealer quotation system on which any of the Company’s
equity securities are then quoted;

 

  (v)

make available upon reasonable notice at reasonable times and for reasonable
periods for inspection by a representative appointed by the Investors, by any
underwriter participating in any disposition to be effected pursuant to such
Registration Statement and by any attorney, accountant or other agent retained
by such Holders or any such underwriter, all pertinent

 

15

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  financial and other records and pertinent corporate documents and properties
of the Company, and cause all of the Company’s officers, directors and employees
and the independent public accountants who have certified its financial
statements to make themselves available to discuss the business of the Company
and to supply all information reasonably requested by any such Person in
connection with such Registration Statement;

 

  (w) in the case of an Underwritten Public Offering, cause the senior executive
officers of the Company to participate in the customary “road show”
presentations that may be reasonably requested by the managing underwriter or
underwriters in any such offering and otherwise to facilitate, cooperate with,
and participate in each proposed offering contemplated herein and customary
selling efforts related thereto;

 

  (x) take no direct or indirect action prohibited by Regulation M under the
Exchange Act;

 

  (y) take all reasonable action to ensure that any Issuer Free Writing
Prospectus utilized in connection with any Registration complies in all material
respects with the Securities Act, is filed in accordance with the Securities Act
to the extent required thereby, is retained in accordance with the Securities
Act to the extent required thereby and, when taken together with the related
Prospectus, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and

 

  (z) take all such other commercially reasonable actions as are necessary or
advisable in order to expedite or facilitate the disposition of such Registrable
Securities in accordance with the terms of this Agreement.

Section 3.5.2.    Company Information Requests. The Company may require each
seller of Registrable Securities as to which any Registration or sale is being
effected to furnish to the Company such information regarding the distribution
of such securities and such other information relating to such Holder and its
ownership of Registrable Securities as the Company may from time to time
reasonably request in writing and the Company may exclude from such Registration
or sale the Registrable Securities of any such Holder who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
Each Holder agrees to furnish such information to the Company and to cooperate
with the Company as reasonably necessary to enable the Company to comply with
the provisions of this Agreement.

Section 3.5.3.    Discontinuing Registration. Each Holder agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 3.5.1(d), such Holder will discontinue disposition of
Registrable Securities pursuant to such Registration Statement until such
Holder’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3.5.1(d), or until such

 

16

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Holder is advised in writing by the Company that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated by reference in the Prospectus, or any amendments or
supplements thereto, and if so directed by the Company, such Holder shall
deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the period during
which the applicable Registration Statement is required to be maintained
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of Registrable Securities covered by such Registration Statement
either receives the copies of the supplemented or amended Prospectus
contemplated by Section 3.5.1(d) or is advised in writing by the Company that
the use of the Prospectus may be resumed.

Section 3.6.    Underwritten Offerings.

Section 3.6.1.    Shelf and Demand Registrations. If requested by the
underwriters for any Underwritten Public Offering, pursuant to a Registration or
sale under Sections 3.1 or 3.2, the Company shall enter into an underwriting
agreement with such underwriters, such agreement to be reasonably satisfactory
in substance and form to each of the Company, the Investors and the
underwriters, and to contain such representations and warranties by the Company
and such other terms as are generally prevailing in agreements of that type,
including indemnities no less favorable to the recipient thereof than those
provided in Section 3.9 of this Agreement. The Holders of the Registrable
Securities proposed to be distributed by such underwriters shall cooperate with
the Company in the negotiation of the underwriting agreement and shall give
consideration to the reasonable suggestions of the Company regarding the form
thereof, and such Holders shall complete and execute all questionnaires, powers
of attorney and other documents reasonably requested by the underwriters and
required under the terms of such underwriting arrangements. Any such Holder
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Holder, such Holder’s title to the Registrable
Securities, such Holder’s intended method of distribution and any other
representations to be made by the Holder as are generally prevailing in
agreements of that type, and the aggregate amount of the liability of such
Holder under such agreement shall not exceed such Holder’s proceeds from the
sale of its Registrable Securities in the offering, net of underwriting
discounts and commissions but before expenses.

Section 3.6.2.    Piggyback Registrations. If the Company proposes to register
or sell any of its securities under the Securities Act as contemplated by
Section 3.3 and such securities are to be distributed through one or more
underwriters, the Company shall, if requested by any Holder pursuant to
Section 3.3 and, subject to the provisions of Section 3.3.2, use its reasonable
best efforts to arrange for such underwriters to include on the same terms and
conditions that apply to the other sellers in such Registration or sale all the
Registrable Securities to be offered and sold by such Holder among the
securities of the Company to be distributed by such underwriters in such
Registration or sale. The Holders of Registrable Securities to be distributed by
such underwriters shall be parties to the

 

17

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underwriting agreement between the Company and such underwriters and shall
complete and execute all questionnaires, powers of attorney and other documents
reasonably requested by the underwriters and required under the terms of such
underwriting arrangements. Any such Holder shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder, such Holder’s title to the Registrable Securities, such Holder’s
intended method of distribution and any other representations to be made by the
Holder as are generally prevailing in agreements of that type, and the aggregate
amount of the liability of such Holder shall not exceed such Holder’s proceeds
from the sale of its Registrable Securities in the offering, net of underwriting
discounts and commissions but before expenses.

Section 3.6.3.    Selection of Underwriters; Selection of Counsel. In the case
of an Underwritten Public Offering under Sections 3.1 or 3.2, the managing
underwriter or underwriters to administer the offering shall be determined by
the Investors; provided that such underwriter or underwriters shall be
reasonably acceptable to the Company. In the case of an Underwritten Public
Offering under Section 3.3, the managing underwriter or underwriters to
administer the offering shall be determined by the Company; provided that such
underwriter or underwriters shall be reasonably acceptable to the Investor. In
the case of an Underwritten Public Offering under Sections 3.1, 3.2 or 3.3,
counsel to the Holders shall be selected by the Investors.

Section 3.7.    No Inconsistent Agreements; Additional Rights. Neither the
Company nor any of its subsidiaries shall hereafter enter into, and neither the
Company nor any of its subsidiaries is currently a party to, any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders by this Agreement. Neither the Company nor any of its subsidiaries shall
enter into any agreement granting registration or similar rights to any Person,
and the Company hereby represents and warrants that, as of the date hereof, no
registration or similar rights have been granted to any other Person other than
pursuant to this Agreement.

Section 3.8.    Registration Expenses. All expenses incident to the Company’s
performance of or compliance with this Agreement shall be paid by the Company,
including (i) all registration and filing fees, and any other fees and expenses
associated with filings required to be made with the SEC or FINRA, (ii) all fees
and expenses in connection with compliance with any securities or “Blue Sky”
laws (including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities), (iii) all printing, duplicating, word processing, messenger,
telephone, facsimile and delivery expenses (including expenses of printing
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company and of printing Prospectuses), (iv) all fees and
disbursements of counsel for the Company and of all independent certified public
accountants or independent auditors of the Company and any subsidiaries of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance), (v) Securities Act liability
insurance or similar insurance if the Company so desires or the underwriters so
require in accordance with then-customary underwriting practice, (vi) all fees
and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange or quotation of the Registrable Securities
on any inter-dealer quotation system, (viii) all reasonable fees and
disbursements of legal counsel for the selling Holders, (ix) any reasonable fees
and disbursements

 

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of underwriters customarily paid by issuers or sellers of securities, (x) all
fees and expenses incurred in connection with the distribution or Transfer of
Registrable Securities to or by a Holder or its Permitted Transferees in
connection with a Public Offering, (xi) all fees and expenses of any special
experts or other Persons retained by the Company in connection with any
Registration or sale, (xii) all of the Company’s internal expenses (including
all salaries and expenses of its officers and employees performing legal or
accounting duties) and (xiii) all expenses related to the “road show” for any
Underwritten Public Offering, including the reasonable out-of-pocket expenses of
the Holders and underwriters, if so requested. All such expenses are referred to
herein as “Registration Expenses”. The Company shall not be required to pay any
fees and disbursements to underwriters not customarily paid by the issuers of
securities in an offering similar to the applicable offering, including
underwriting discounts and commissions and transfer taxes, if any, attributable
to the sale of Registrable Securities.

Section 3.9.    Indemnification.

Section 3.9.1.    Indemnification by the Company. The Company shall indemnify
and hold harmless, to the full extent permitted by law, each Holder, each
shareholder, member, limited or general partner of such Holder, each
shareholder, member, limited or general partner of each such shareholder,
member, limited or general partner, each of their respective Affiliates,
officers, directors, shareholders, employees, advisors, and agents and each
Person who controls (within the meaning of the Securities Act or the Exchange
Act) such Persons and each of their respective Representatives from and against
any and all losses, penalties, judgments, suits, costs, claims, damages,
liabilities and expenses, joint or several (including reasonable costs of
investigation and legal expenses and any indemnity and contribution payments
made to underwriters ) (each, a “Loss” and collectively “Losses”) arising out of
or based upon (i) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Securities
are registered or sold under the Securities Act (including any final,
preliminary or summary Prospectus contained therein or any amendment thereof or
supplement thereto or any documents incorporated by reference therein) or any
other disclosure document produced by or on behalf of the Company or any of its
subsidiaries including, without limitation any report and other document filed
under the Exchange Act and any preliminary or final offering memorandum prepared
in connection with any Rule 144A or Regulation S offering pursuant to
Section 3.10 of this Agreement, (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus or preliminary Prospectus, in
light of the circumstances under which they were made) not misleading or
(iii) any violation or alleged violation by the Company or any of its
subsidiaries of any federal, state, foreign or common law rule or regulation
applicable to the Company or any of its subsidiaries and relating to action or
inaction in connection with any such registration, disclosure document or other
document or report; provided, that no selling Holder shall be entitled to
indemnification pursuant to this Section 3.9.1 in respect of any untrue
statement or omission contained in any information relating to such seller
Holder furnished in writing by such selling Holder to the Company specifically
for inclusion in a Registration Statement and used by the Company in conformity
therewith (such information “Selling Stockholder Information”). This indemnity
shall be in addition to any liability the Company may otherwise have. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or

 

19

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on behalf of such Holder or any indemnified party and shall survive the Transfer
of such securities by such Holder and regardless of any indemnity agreed to in
the underwriting agreement that is less favorable to the Holders. The Company
shall also indemnify underwriters, initial purchasers, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, their officers and directors and each Person who controls such
Persons (within the meaning of the Securities Act and the Exchange Act) to the
same extent as provided above (with appropriate modification) with respect to
the indemnification of the indemnified parties.

Section 3.9.2.    Indemnification by the Selling Holders. Each selling Holder
agrees (severally and not jointly) to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act
or the Exchange Act) from and against any Losses resulting from (i) any untrue
statement of a material fact in any Registration Statement under which such
Registrable Securities were registered or sold under the Securities Act
(including any final, preliminary or summary Prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein) or (ii) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus or preliminary Prospectus, in light of the
circumstances under which they were made) not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission is
contained in such selling Holder’s Selling Stockholder Information. In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the proceeds from the sale of its Registrable Securities in
the offering giving rise to such indemnification obligation, net of underwriting
discounts and commissions but before expenses, less any amounts paid by such
Holder pursuant to Section 3.9.4 and any amounts paid by such Holder as a result
of liabilities incurred under the underwriting agreement, if any, related to
such sale.

Section 3.9.3.    Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it forfeits substantive legal rights by reason of such delay or
failure) and (ii) permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party; provided,
however, that any Person entitled to indemnification hereunder shall have the
right to select and employ separate counsel and to participate in the defense of
such claim, but the fees and expenses of such counsel shall be at the expense of
such Person unless (i) the indemnifying party has agreed in writing to pay such
fees or expenses, (ii) the indemnifying party shall have failed to assume the
defense of such claim within a reasonable time after receipt of notice of such
claim from the Person entitled to indemnification hereunder and employ counsel
reasonably satisfactory to such Person, (iii) the indemnified party has
reasonably concluded (based upon advice of its counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, or (iv) in the
reasonable judgment of any such Person (based upon advice of its counsel) a
conflict of interest may exist between such Person and

 

20

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the indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person). If the indemnifying party assumes the defense, the indemnifying
party shall not have the right to settle such action without the consent of the
indemnified party. No indemnifying party shall consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of an
unconditional release from all liability in respect to such claim or litigation
without the prior written consent of such indemnified party. If such defense is
not assumed by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its prior written
consent, but such consent may not be unreasonably withheld. It is understood
that the indemnifying party or parties shall not, except as specifically set
forth in this Section 3.9.3, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements or other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time unless (x) the employment of more
than one counsel has been authorized in writing by the indemnifying party or
parties, (y) an indemnified party has reasonably concluded (based on the advice
of counsel) that there may be legal defenses available to it that are different
from or in addition to those available to the other indemnified parties or (z) a
conflict or potential conflict exists or may exist (based upon advice of counsel
to an indemnified party) between such indemnified party and the other
indemnified parties, in each of which cases the indemnifying party shall be
obligated to pay the reasonable fees and expenses of such additional counsel or
counsels.

Section 3.9.4.    Contribution. If for any reason the indemnification provided
for in Section 3.9.1 and Section 3.9.2 is unavailable to an indemnified party or
insufficient in respect of any Losses referred to therein (other than as a
result of exceptions or limitations on indemnification contained in
Section 3.9.1 and Section 3.9.2), then the indemnifying party shall contribute
to the amount paid or payable by the indemnified party as a result of such Loss
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party or parties on the
other hand in connection with the acts, statements or omissions that resulted in
such Losses, as well as any other relevant equitable considerations. In
connection with any Registration Statement filed with the SEC by the Company,
the relative fault of the indemnifying party on the one hand and the indemnified
party on the other hand shall be determined by reference to, among other things,
whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just or equitable if contribution pursuant to this Section 3.9.4 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in this
Section 3.9.4. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The amount paid or payable by an indemnified party as a
result of the Losses referred to in Sections 3.9.1 and

 

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3.9.2 shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 3.9.4, in connection with any
Registration Statement filed by the Company, a selling Holder shall not be
required to contribute any amount in excess of the dollar amount of the proceeds
from the sale of its Registrable Securities in the offering giving rise to such
indemnification obligation, net of underwriting discounts and commissions but
before expenses, less any amounts paid by such Holder pursuant to Section 3.9.2
and any amounts paid by such Holder as a result of liabilities incurred under
the underwriting agreement, if any, related to such sale. If indemnification is
available under this Section 3.9, the indemnifying parties shall indemnify each
indemnified party to the full extent provided in Sections 3.9.1 and 3.9.2 hereof
without regard to the provisions of this Section 3.9.4. The remedies provided
for in this Section 3.9 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.

Section 3.10.    Rules 144 and 144A and Regulation S. The Company shall file the
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 (or, if the Company
is not required to file such reports, it will, upon the request of the Holders,
make publicly available such necessary information for so long as necessary to
permit sales that would otherwise be permitted by this Agreement pursuant to
Rule 144, Rule 144A or Regulation S under the Securities Act, as such rules may
be amended from time to time or any similar rule or regulation hereafter adopted
by the SEC), and it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without Registration under the Securities Act in
transactions that would otherwise be permitted by this Agreement and within the
limitation of the exemptions provided by (i) Rule 144, Rule 144A or Regulation S
under the Securities Act, as such rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements and, if not, the
specifics thereof.

Section 3.11.    Existing Registration Statements. Notwithstanding anything
herein to the contrary and subject to applicable law and regulation, the Company
may satisfy any obligation hereunder to file a Registration Statement or to have
a Registration Statement become effective by a specified date by designating, by
notice to the Holders, a Registration Statement that previously has been filed
with the SEC or become effective, as the case may be, as the relevant
Registration Statement for purposes of satisfying such obligation, and all
references to any such obligation shall be construed accordingly; provided that
such previously filed Registration Statement may be, and is, amended or, subject
to applicable securities laws, supplemented to add the number of Registrable
Securities, and, to the extent necessary, to identify as a selling stockholders
those Holders demanding the filing of a Registration Statement pursuant to the
terms of this Agreement. To the extent this Agreement refers to the filing or
effectiveness of other Registration Statements, by or at a specified time and
the Company has, in lieu of then filing such Registration Statements or having
such Registration Statements become effective, designated a previously filed or
effective Registration Statement as the relevant Registration Statement for such
purposes, in accordance with the preceding sentence, such references shall be
construed to refer to such designated Registration Statement, as amended or
supplemented in the manner contemplated by the immediately preceding sentence.

 

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ARTICLE IV

MISCELLANEOUS

Section 4.1.    Authority; Effect. Each party hereto represents and warrants to
and agrees with each other party that the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized on behalf of such party and do not violate any agreement or
other instrument applicable to such party or by which its assets are bound. This
Agreement does not, and shall not be construed to, give rise to the creation of
a partnership among any of the parties hereto, or to constitute any of such
parties members of a joint venture or other association. The Company and its
subsidiaries shall be jointly and severally liable for all obligations of each
such party pursuant to this Agreement.

Section 4.2.    Notices. Any notices, requests, demands and other communications
required or permitted in this Agreement shall be effective if in writing and
(i) delivered personally, (ii) sent by facsimile or e-mail, or (iii) sent by
overnight courier, in each case, addressed as follows:

If to the Company, to:

Akebia Therapeutics, Inc.

245 First Street

Cambridge, MA 02142

Attention: Nicole R. Hadas, General Counsel & Corporate Secretary

Email: nhdas@akebia.com

Facsimile: 617-871-2065

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP

200 Clarendon Street

Boston, MA 02116

Attention: Peter Handrinos, Scott Shean and Daniel Rees

Email: peter.handrinos@lw.com; scott.shean@lw.com;

daniel.rees@lw.com

Facsimile: (617) 948-6001

If to the Investor, to:

Baupost Group Securities, L.L.C.

c/o The Baupost Group, L.L.C.

10 St. James Avenue, Suite 1700

Boston, MA 02116

Attention: Gregory A. Ciongoli, Michael Sperling, Frederick H. Fogel and John F.
Harvey

 

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Facsimile: (617) 451-7331

E-mail: gac@baupost.com, msperling@baupost.com, ffogel@baupost.com and
jharvey@baupost.com

with a copy (which shall not constitute notice) to:

Ropes & Gray LLP

Prudential Tower, 800 Boylston Street

Boston, MA 02199

Attention: Jeffrey Katz

E-email: jeffrey.katz@ropesgray.com

Office: (617) 951-7072

Fax: (617) 235-0617

Notice to the holder of record of any Registrable Securities shall be deemed to
be notice to the holder of such securities for all purposes hereof.

Unless otherwise specified herein, such notices or other communications shall be
deemed effective (i) on the date received, if personally delivered, (ii) on the
date received, if delivered by facsimile or e-mail on a Business Day, or if not
delivered on a Business Day, on the first Business Day thereafter and (iii) two
(2) Business Days after being sent by overnight courier. Each of the parties
hereto shall be entitled to specify a different address by giving notice as
aforesaid to each of the other parties hereto.

Section 4.3.    Termination and Effect of Termination. This Agreement shall
terminate upon the date on which no Holder holds any Registrable Securities,
except for the provisions of Sections 3.9 and 3.10, which shall survive any such
termination. No termination under this Agreement shall relieve any Person of
liability for breach or Registration Expenses incurred prior to termination. In
the event this Agreement is terminated, each Person entitled to indemnification
rights pursuant to Section 3.9 hereof shall retain such indemnification rights
with respect to any matter that (i) may be an indemnified liability thereunder
and (ii) occurred prior to such termination.

Section 4.4.    Permitted Transferees. The rights of a Holder hereunder may be
assigned (but only with all related obligations as set forth below) in
connection with a Transfer of Registrable Securities to a Permitted Transferee
of that Holder. Without prejudice to any other or similar conditions imposed
hereunder with respect to any such Transfer, no assignment permitted under the
terms of this Section 4.4 will be effective unless the Permitted Transferee to
which the assignment is being made, if not a Holder, has delivered to the
Company a written acknowledgment and agreement in form and substance reasonably
satisfactory to the Company that the Permitted Transferee will be bound by, and
will be a party to, this Agreement. A Permitted Transferee to whom rights are
transferred pursuant to this Section 4.4 may not again transfer those rights to
any other Permitted Transferee, other than as provided in this Section 4.4.

Section 4.5.    Remedies. The parties to this Agreement shall have all remedies
available at law, in equity or otherwise in the event of any breach or violation
of this Agreement or any default hereunder. The parties acknowledge and agree
that in the event of any breach of this Agreement, in addition to any other
remedies that may be available, each of the parties hereto shall

 

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be entitled to specific performance of the obligations of the other parties
hereto and, in addition, to such other equitable remedies (including preliminary
or temporary relief) as may be appropriate in the circumstances. No delay of or
omission in the exercise of any right, power or remedy accruing to any party as
a result of any breach or default by any other party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed as a waiver of
or acquiescence in any such breach or default, or of any similar breach or
default occurring later; nor shall any such delay, omission nor waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.

Section 4.6.    Amendments. This Agreement may not be orally amended, modified,
extended or terminated, nor shall any oral waiver of any of its terms be
effective. This Agreement may be amended, modified, extended or terminated, and
the provisions hereof may be waived, only by an agreement in writing signed by
the Company and the Investors. Each such amendment, modification, extension or
termination shall be binding upon each party hereto. In addition, each party
hereto may waive any right hereunder by an instrument in writing signed by such
party.

Section 4.7.    Governing Law. This Agreement and all claims arising out of or
based upon this Agreement or relating to the subject matter hereof shall be
governed by and construed in accordance with the domestic substantive laws of
the State of New York without giving effect to any choice or conflict of laws
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.

Section 4.8.    Consent to Jurisdiction. Each party to this Agreement, by its
execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the State of New York for the purpose
of any action, claim, cause of action or suit (in contract, tort or otherwise),
inquiry, proceeding or investigation arising out of or based upon this Agreement
or relating to the subject matter hereof, (ii) hereby waives to the extent not
prohibited by applicable law, and agrees not to assert, and agrees not to allow
any of its subsidiaries to assert, by way of motion, as a defense or otherwise,
in any such action, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution, that any such proceeding brought in one of the
above-named courts is improper, or that this Agreement or the subject matter
hereof or thereof may not be enforced in or by such court and (iii) hereby
agrees not to commence or maintain any action, claim, cause of action or suit
(in contract, tort or otherwise), inquiry, proceeding or investigation arising
out of or based upon this Agreement or relating to the subject matter hereof or
thereof other than before one of the above-named courts nor to make any motion
or take any other action seeking or intending to cause the transfer or removal
of any such action, claim, cause of action or suit (in contract, tort or
otherwise), inquiry, proceeding or investigation to any court other than one of
the above-named courts whether on the grounds of inconvenient forum or
otherwise. Notwithstanding the foregoing, to the extent that any party hereto is
or becomes a party in any litigation in connection with which it may assert
indemnification rights set forth in this Agreement, the court in which such
litigation is being heard shall be deemed to be included in clause (i) above.
Notwithstanding the foregoing, any party to this Agreement may commence and
maintain an action to enforce a judgment of any of the above-named courts in any
court of competent jurisdiction. Each party hereto hereby consents to service of
process in any such proceeding in any manner permitted by New York law, and
agrees that service of process by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 4.2 hereof is reasonably
calculated to give actual notice.

 

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Section 4.9.    WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT
IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF
ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING.
EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES
HERETO THAT THIS SECTION 4.9 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY
ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.9 WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO
TRIAL BY JURY.

Section 4.10.    Merger; Binding Effect, Etc. This Agreement constitutes the
entire agreement of the parties with respect to its subject matter, supersedes
all prior or contemporaneous oral or written agreements or discussions with
respect to such subject matter, and shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective heirs,
representatives, successors and permitted assigns. Except as otherwise expressly
provided herein, no Holder or other party hereto may assign any of its
respective rights or delegate any of its respective obligations under this
Agreement without the prior written consent of the other parties hereto, and any
attempted assignment or delegation in violation of the foregoing shall be null
and void.

Section 4.11.    Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one instrument.

Section 4.12.    Severability. In the event that any provision hereof would,
under applicable law, be invalid or unenforceable in any respect, such provision
shall be construed by modifying or limiting it so as to be valid and enforceable
to the maximum extent compatible with, and possible under, applicable law. The
provisions hereof are severable, and in the event any provision hereof should be
held invalid or unenforceable in any respect, it shall not invalidate, render
unenforceable or otherwise affect any other provision hereof.

Section 4.13.    No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, the Company and each Holder covenant, agree and
acknowledge that no recourse under this Agreement or any documents or
instruments delivered in connection with this Agreement shall be had against any
current or future director, officer, employee, general or limited partner or
member of any Holder or of any Affiliate or assignee thereof, as such, whether
by the enforcement of any assessment or by any legal or equitable proceeding, or
by virtue of any statute, regulation or other applicable law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any current or future officer, agent
or employee of any Holder or any current or future member of any Holder or any

 

26

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current or future director, officer, employee, partner or member of any Holder
or of any Affiliate or assignee thereof, as such, for any obligation of any
Holder under this Agreement or any documents or instruments delivered in
connection with this Agreement for any claim based on, in respect of or by
reason of such obligations or their creation.

[Signature pages follow]

 

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement as
of the date first above written.

 

Company:     AKEBIA THERAPEUTICS, INC.     By:  

                 

    Name:       Title:   Investor:     BAUPOST GROUP SECURITIES, L.L.C.     By:
 

 

    Name:       Title: