Exhibit 10.1

EXECUTION VERSION

NOTES PURCHASE AGREEMENT

This Notes Purchase Agreement (this “Agreement”) is dated as of October 14,
2015, between Keryx Biopharmaceuticals, Inc., a Delaware corporation (the
“Company”), and Baupost Group Securities, L.L.C., a Massachusetts limited
liability company (the “Purchaser”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an indenture to be dated on or about October 16, 2015 (the
“Indenture”), by and among the Company and The Bank of New York Mellon Trust
Company, N.A., as trustee (the “Trustee”), in substantially the form of Exhibit
B attached hereto, with such changes as the Trustee may reasonably request, the
Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, securities of the Company as more fully described in
this Agreement.

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

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this 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 which 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 purchase and sale of the Notes pursuant to
Section 2.1.

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“Closing Date” means the Trading Day on which this Agreement has been executed
and delivered by the parties hereto, and all conditions precedent to (i) the
Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Notes, in each case, have been satisfied or waived,
but in no event later than the third Trading Day following the date hereof.

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

“Company Counsel” means Alston & Bird LLP with offices located at 90 Park
Avenue, New York, NY 10016.

“Company Intellectual Property” shall have the meaning ascribed to such term in
Section 3.1(q).

“Company Patent Applications” shall have the meaning ascribed to such term in
Section 3.1(r).

“Company Patents” shall have the meaning ascribed to such term in
Section 3.1(q).

“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(f).

“Environmental Laws” shall have the meaning ascribed to such term in
Section 3.1(n).

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

“FDA” shall have the meaning ascribed to such term in Section 3.1(o).

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Indenture” shall have the meaning ascribed to such term in the recitals.

“Investor Designee” shall have the meaning ascribed to such term in the
Registration Rights Agreement; however, for the purposes of Section 4.6,
“Investor Designee” means any Investor Designee that is also a partner, member
or employee of the Purchaser (or serves in a similar capacity) and also includes
any partner, member or employee of the Purchaser (or person serving in a similar
capacity) that is serving as an Investor Observer pursuant to the Registration
Rights Agreement.

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

 

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“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3.1(b).

“Notes” shall have the meaning ascribed to such term in Section 2.1.

“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.

“PTO” shall have the meaning ascribed to such term in Section 3.1(q).

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.2.

“Registration Rights Agreement” shall mean that certain Registration Rights
Agreement between the Purchaser and the Company, to be dated on or about
October 16, 2015, in substantially the form of Exhibit A attached hereto, as the
same may be amended from time to time.

“Sanctions” shall have the meaning ascribed to such term in 3.1(aa).

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

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

“Share Conversion Cap” shall have the meaning ascribed to such term in the
Indenture.

“Subscription Amount” has the meaning set forth in Section 2.1.

“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, 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.

“Trading Day” means a day on which the NASDAQ Capital Market is open for
trading.

“Transaction Agreements” means this Agreement, the Indenture, the Notes and the
Registration Rights Agreement.

“Trustee” shall have the meaning ascribed to such term in the recitals.

 

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ARTICLE II.

PURCHASE AND SALE

2.1 Closing. On the Closing Date, upon the terms and subject to the conditions
set forth herein, the Company agrees to sell, and the Purchaser agrees to
purchase, $125,000,000 aggregate principal amount of zero-coupon senior
convertible notes (the “Notes”) upon the terms and subject to the conditions
contained in the Transaction Agreements. The Company shall deliver to the
Purchaser one or more certificates, in substantially the form of Exhibit D
attached hereto, representing the Notes, as the case may be, registered in such
names and denominations as the Purchaser may request, against payment by the
Purchasers of $125,000,000 (the “Subscription Amount”) by wire transfer of
federal (same day) funds to the account specified by the Company. The Closing of
the purchase of the Notes shall occur at the offices of Company Counsel or such
other location as the parties shall mutually agree.

2.2 Deliveries.

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

(i) the Transaction Agreements duly executed by the Company and, in the case of
the Notes and the Indenture, the Trustee;

(ii) one or more certificated Notes in such names and denominations as the
Purchaser may request duly authenticated by the Trustee in an aggregate
principal amount of $125,000,000;

(iii) a certificate in form and substance reasonably satisfactory to the
Purchaser duly executed on behalf of the Company by an authorized executive
officer of the Company, certifying that (A) the representations and warranties
of the Company contained in Article III shall be true and correct in all
respects as of the Closing Date with the same effect as though made at and as of
such date (except those representations and warranties that address matters only
as of a specified date, which shall be true and correct in all respects as of
that specified date), and (B) the conditions to Closing set forth in
Section 2.3(a)(ii) of this Agreement have been fulfilled;

(iv) 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 bylaws
of the Company as in effect at the time of the actions by the Board referred to
in clause (B) below, and on the Closing Date; (B) that attached thereto is a
true and complete copy of all resolutions adopted by the Board authorizing the
execution, delivery and performance of the Transaction Agreements and that all
such resolutions 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 Certificate of Incorporation as in effect at the time of the actions
by the Board referred to in clause (B) above, and on the Closing Date; and
(D) as to the incumbency of any officer of the Company executing a Transaction
Agreement on behalf of the Company; and

 

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(v) a legal opinion of Company Counsel, in substantially the form of Exhibit C
attached hereto.

(b) On or prior to the Closing Date, the Purchaser shall deliver to the Company,
the following:

(i) the Transaction Agreements to which the Purchaser is a party duly executed
by the Purchaser; and

(ii) the Subscription Amount by wire transfer to the account specified by the
Company.

2.3 Closing Conditions.

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

(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchaser contained herein (unless as of a
specific date therein in which case they shall be accurate as of such date);

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

(iii) the delivery by the Purchaser of the items set forth in Section 2.2(b) of
this Agreement.

(b) The obligations of the Purchaser hereunder in connection with the Closing
are subject to the following conditions being met or able to be satisfied
contemporaneous with the Closing:

(i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);

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

(iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement and any such further certificates and documents as the Purchaser
may reasonably request;

 

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

(v) there shall be a vacancy on the Board to permit the appointment of the
Investor Designee to the Board as of the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

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

(a) Subsidiaries. the Company owns, directly or indirectly, all of the capital
stock or other equity interests of each of its Subsidiaries free and clear of
any Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities. Other
than the Subsidiaries, the Company does not control, directly or indirectly,
through one or more intermediaries, any other 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 use its
properties and assets 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 to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in a material adverse effect on (i) the results of operations, assets, business
or condition (financial or otherwise) of the Company and its Subsidiaries, taken
as a whole, or (ii) the consummation of the transactions contemplated by the
Transaction Agreements (each, 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
the Transaction Agreements and otherwise to carry out its obligations
thereunder. The execution and delivery of the Transaction Agreements by the
Company, and in the case of the Notes and the Indenture, by the Trustee, 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 shareholders and no further action is required by the Company, its
officers, directors or shareholders in connection therewith, other than
application to the NASDAQ Capital Market for the listing of the additional
shares of Common Stock into which the Notes are initially convertible for
trading thereon in the time and manner required thereby. The Transaction
Agreements have been duly executed and delivered by the Company, and in the case
of the Notes and the

 

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Indenture, by the Trustee, and constitute the valid and binding obligations of
the Company enforceable against the Company in accordance with their terms,
except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (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 the
Transaction Agreements, the issuance and sale of the Notes, including the shares
of Common Stock into which the Notes are initially convertible, and the
consummation by it of the transactions contemplated thereby 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 of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) 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) conflict with or result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
a Subsidiary is subject (including federal and state securities laws and
regulations), 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. Except as provided in the Registration
Rights Agreement, the Company is not required to obtain any consent, waiver,
authorization, approval or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Agreements and the
consummation of the transactions contemplated thereby, other than application to
the NASDAQ Capital Market for the listing of the additional share of Common
Stock into which the Notes are initially convertible for trading thereon in the
time and manner required thereby.

(f) The Indenture. The Indenture has been duly authorized by the Company and,
when duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally or by equitable principles relating
to enforceability (collectively, the “Enforceability Exceptions”).

 

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(g) Issuance of the Notes. The Notes have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered against payment
therefor as provided herein and in the Indenture, will be duly and validly
issued, fully paid and nonassessable and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture free and clear of any Lien and will conform to
the description thereof in the Indenture; and the issuance of the Notes is not
subject to any preemptive or similar rights that have not been waived. Upon
issuance and delivery of the Notes in accordance with this Agreement and the
Indenture, the Notes will be convertible at the option of the holder thereof
into shares of Common Stock in accordance with the terms of the Notes. The
maximum number of shares of Common Stock initially issuable upon conversion of
the Notes (subject to the Share Conversion Cap) have been duly authorized and
reserved for issuance upon such conversion by all necessary corporate action,
and, when issued upon such conversion in accordance with the terms of the Notes,
will be validly issued, fully paid and non-assessable; no holder of the shares
of Common Stock will be subject to personal liability by reason of being such a
holder; and the issuance of the shares of Common Stock upon such conversion will
not be subject to the preemptive or other similar rights of any shareholder of
the Company.

(h) SEC Reports; Financial Statements.

(i) Since January 1, 2012, the Company has filed all reports, schedules, forms,
statements and other documents with the Commission required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof and
the Company will file prior to the Closing all forms, reports and documents with
the Commission that are required to be filed by it under the Securities Act and
the Exchange Act prior to such time (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein being
collectively referred to herein as the “SEC Reports”) on a timely basis or has
received or will receive a valid extension of such time of filing and has filed
or will file any such SEC Reports prior to the expiration of any such extension.
As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods specified therein (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

 

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(ii) To the knowledge of the Company, the Company has (x) devised and maintained
a system of internal accounting controls sufficient to provide reasonable
assurances regarding the reliability of financial reporting and preparation of
financial statements in accordance with GAAP, and has evaluated such system on a
quarterly basis and concluded that it is effective and (y) disclosed to the
Company’s auditors and the audit committee of the Company’s board of directors
(i) all significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting that have been
identified and which are reasonably likely to adversely affect the Company’s or
its Subsidiaries’ ability to record, process, summarize and report financial
information and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the internal
controls of the Company. The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act); such disclosure controls and procedures are designed to ensure
that material information relating to the Company and its Subsidiaries required
to be included in the Company’s periodic reports under the Exchange Act is made
known to the Company’s principal executive officer and its principal financial
officer by others within those entities, and, to the knowledge of the Company,
such disclosure controls and procedures are effective in timely alerting the
Company’s principal executive officer and its principal financial officer to
such material information required to be included in the Company’s periodic
reports required under the Exchange Act. There are no outstanding loans made by
the Company or its Subsidiaries to any executive officer (as defined in Rule
3b-7 under the Exchange Act) or director of the Company. Since the enactment of
the Sarbanes-Oxley Act of 2002, neither the Company nor any Subsidiary has made
any loans to any executive officer (as defined in Rule 3b-7 under the Exchange
Act) or director of the Company or any Subsidiary.

(iii) Neither the Company nor its Subsidiaries is a party to, or has any
commitment to become a party to, (x) any off-balance sheet partnership or any
similar contract or arrangement (including any contract or arrangement relating
to any transaction or relationship between or among the Company and any
Subsidiary, on the one hand, and any unconsolidated Affiliate on the other
hand), including any “off-balance sheet arrangement” (as defined in Item 303(a)
of Regulation S-K promulgated by the Commission); (y) any hedging, derivatives
or similar contract or arrangement, in each case in an amount material to the
Company and its Subsidiaries, taken as a whole, or (z) any contract or
arrangement pursuant to which the Company or any Subsidiary is obligated to make
any capital contribution or other investment in or loan to any Person (other
than a Subsidiary of the Company).

(i) Duly Authorized Capital Stock. The issued and outstanding shares of capital
stock of the Company have been validly issued, are fully paid and nonassessable
and are not subject to any preemptive or similar rights that have not been
effectively waived. The Company has an authorized, issued and outstanding
capitalization as set forth in the SEC Reports (other than the grant of
additional options under the Company’s existing stock option plans, or changes
in the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise or conversion of securities exercisable for, or
convertible into, shares of Common Stock outstanding on the date hereof,
including without limitation issuances of shares under the Company’s employee
stock purchase plan) and such authorized capital stock conforms to the
description thereof set forth in the SEC Reports. The description of the
securities of the Company in

 

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the SEC Reports is complete and accurate in all material respects. Except as
disclosed in the SEC Reports, as of the dates referred to therein, the Company
did not have outstanding any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or
exchangeable for, or any contracts or commitments to issue or sell, any shares
of capital stock or other securities.

(j) Material Changes; Undisclosed Events, Liabilities or Developments. Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed prior to the
date hereof, the business of the Company and its Subsidiaries has been conducted
in the ordinary course of business consistent with past practices and (i) there
has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans.
The Company does not have pending before the Commission any request for
confidential treatment of information. Except for the issuance of the Notes
contemplated by this Agreement, no event, liability, fact, circumstance,
occurrence or development has occurred or exists or is reasonably expected to
occur or exist with respect to the Company or its Subsidiaries or their
respective businesses, properties, operations, assets or financial condition
that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed made that has
not been publicly disclosed at least 1 Trading Day prior to the date that this
representation is made. Except for the transactions contemplated hereby, which
the Company covenants and agrees will be fully disclosed on Form 8-K within four
business days of the date hereof, the Company is not aware of any material
non-public information regarding the Company that has not previously been
disclosed in the SEC Reports.

(k) Litigation. There are no material legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject (i) other than proceedings accurately
described in all material respects in the SEC Reports or (ii) that are required
to be described in the SEC Reports and are not so described; and there are no
statutes, regulations, contracts or other documents that are required to be
described in the SEC Reports or to be filed as exhibits to the SEC Reports that
are not described or filed as required. Neither the Company nor any Subsidiary,
nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission

 

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involving the Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

(l) Accountants. UHY LLP, who have certified certain financial statements of the
Company and its Subsidiaries, are independent public accountants as required by
the rules and regulations of the Commission.

(m) Compliance. Neither the Company nor any Subsidiary: (i) is in default under
or in violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
judgment, decree or order of any court, arbitrator or other governmental
authority or (iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters, except in the case of clauses (ii) or (iii) as
could not have or reasonably be expected to result in a Material Adverse Effect.
To the knowledge of the Company, neither the Company or its Subsidiaries nor any
director, officer, employee, consultant or agent of the Company or its
Subsidiaries has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political activity,
(ii) made any unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political party or campaign or violated
any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended,
(iii) consummated any transaction, made any payment, entered into any contract
or arrangement or taken any other action in violation of Section 1128B(b) of the
U.S. Social Security Act, as amended, (iv) consummated any transaction, made any
payment, entered into any contract or arrangement or taken any other action in
violation of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the anti-money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Anti-Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries with respect to
the Anti-Money Laundering Laws is pending or, to the knowledge of the Company,
threatened, or (iv) made any other similar unlawful payment under any similar
foreign laws.

(n) Environmental. The Company and its Subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) have received all permits, licenses or other
approvals required of them under applicable

 

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Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a Material Adverse Effect. There are no costs
or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
Material Adverse Effect.

(o) Regulatory Permits. The Company and its Subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as currently conducted and as described in the SEC
Reports, including without limitation all such certificates, authorizations and
permits required by the United States Food and Drug Administration (the “FDA”)
or any other federal, state or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous materials, and neither the Company
nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such material, singly or in the aggregate,
certificate, authorization or permit, except as described in the SEC Reports.

(p) Title to Assets. The Company and its Subsidiaries have good and marketable
title in fee simple to all real property owned by them and good and marketable
title in all personal property (whether tangible or intangible) owned by them
that is material to the business of the Company and its Subsidiaries, in each
case free and clear of all Liens, except for Liens that do not materially affect
the value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its Subsidiaries and
(iii) Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made in accordance with GAAP and, the payment of
which is neither delinquent nor subject to penalties. Any real property and
facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with which the Company and its
Subsidiaries are in compliance.

(q) Intellectual Property. Except as described in the SEC Reports, (i) the
Company and its Subsidiaries own, possess, or have valid, binding and
enforceable licenses or other rights to use the patents, patent rights and
patent applications, copyrights, trademarks, service marks, trade names,
Internet domain names, technology, confidential information, software, know-how,
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other intellectual property
and proprietary rights necessary or used in connection with the conduct of their
business in the manner in which it is presently being conducted and in the
manner set forth in the SEC Reports (collectively, the “Company Intellectual
Property”), except as would not reasonably be expected to result in a Material
Adverse Effect, and to the extent that the Company Intellectual Property is not
sufficient to so conduct their business, including with respect to any products
described in the SEC

 

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Reports as being under development, the Company believes it can acquire such
rights on reasonable terms; (ii) to the knowledge of the Company, (A) none of
the patents and patent applications owned by the Company or its Subsidiaries
(the “Company Patents”) is invalid or unenforceable and neither the Company nor
any of its Subsidiaries has received any challenge (including without
limitation, notices of expiration) to the validity or enforceability of Company
Patents from any third party or governmental authority and the Company and its
Subsidiaries have made all filings and paid all fees necessary to maintain any
Company Patents owned by any of them, and (B) none of the Company Intellectual
Property owned by the Company or its Subsidiaries is invalid or unenforceable
and neither the Company nor any of its Subsidiaries has received any challenge
(including without limitation, notices of expiration) to the validity or
enforceability of Company Intellectual Property from any third party or
governmental authority and the Company and its Subsidiaries have made all
filings and paid all fees necessary to maintain any Company Intellectual
Property owned by any of them, except as would not reasonably be expected to
result in a Material Adverse Effect for Company Intellectual Property other than
Company Patents; (iii) the Company and its Subsidiaries have taken reasonable
measures necessary to secure their interests in Company Intellectual Property,
including the confidentiality of all trade secrets and confidential information
which constitutes Company Intellectual Property, and to secure assignment of
Company Intellectual Property from its employees and contractors; (iv) neither
the Company nor any of its Subsidiaries has received any claim of infringement
or misappropriation of (and the Company does not know of any infringement or
misappropriation of) intellectual property rights of others by the Company or
any of its Subsidiaries (A) with respect to the Company Patents or (B) with
respect to the Company Intellectual Property, except as would not reasonably be
expected to result in a Material Adverse Effect for Company Intellectual
Property other than Company Patents; (vi) the Company and its Subsidiaries are
not in breach of, and have complied with all terms of, any license or other
agreement relating to any Company Intellectual Property, and no party to any
such agreement has given the Company or its Subsidiaries notice of its intention
to cancel, terminate, alter the scope of rights under or fail to renew any such
agreement, except as would not reasonably be expected to result in a Material
Adverse Effect; and (vii) no suit or other proceeding is pending against the
Company or any of its Subsidiaries concerning any agreement concerning the
Company Intellectual Property, including any proceeding concerning a claim that
the Company or its Subsidiaries or another person has breached any such
agreement.

(r) Patents. All patent applications owned by the Company or its Subsidiaries
and filed with the U.S. Patent Trademark Office (“PTO”) or any foreign or
international patent authority (the “Company Patent Applications”) have been
duly and properly filed; the Company and each of its Subsidiaries has complied
with its duty of candor and disclosure to the PTO for the Company Patent
Applications; neither the Company nor any of its Subsidiaries is aware of any
facts required to be disclosed to the PTO that were not disclosed to the PTO and
which would preclude the grant of a patent for the Company Patent Applications;
and neither the Company nor any of its Subsidiaries has knowledge of any facts
which would preclude it from having clear title to the Company Patent
Applications that have been identified by the Company and its Subsidiaries as
being exclusively owned by the Company and its Subsidiaries.

 

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(s) Clinical Trials. The studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company or any of its Subsidiaries that are
described in the SEC Reports were and, if still pending, are, to the Company’s
and any of its Subsidiary’s knowledge, being conducted in all material respects
in accordance with experimental protocols, procedures and controls pursuant to,
where applicable, accepted professional and scientific standards for products or
product candidates comparable to those being developed by the Company or its
Subsidiaries; the descriptions of the results of such studies, tests and trials
contained in the SEC Reports do not contain any misstatement of a material fact
or omit to state a material fact necessary to make such statements not
misleading; neither Company nor any of its Subsidiaries has any knowledge of any
studies, tests or trials not described in the SEC Reports the results of which
reasonably call into question in any material respect the results of the
studies, tests and trials described in the SEC Reports; and neither the Company
nor any of its Subsidiaries has received any notices or correspondence from the
FDA or any foreign, state or local governmental body exercising comparable
authority or any Institutional Review Board or comparable authority requiring
the termination, suspension or material modification of any material studies,
tests or preclinical or clinical trials conducted by or on behalf of the
Company.

(t) Insurance. The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged and which the Company believes is adequate for the
operation of its business, including, but not limited to, directors and officers
insurance coverage at least equal to the aggregate Subscription Amount. All such
insurance policies are in full force and effect, no notice of cancellation has
been received, and there is no existing default or event which, with the giving
of notice or lapse of time or both, would constitute a default, by any insured
thereunder, except for such defaults that would not, individually or in the
aggregate, have a Material Adverse Effect. To the knowledge of the Company,
there is no material claim pending under any of such policies as to which
coverage has been denied or disputed by the underwriters of such policies and
there has been no threatened termination of any such policies. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.

(u) Certain Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Company or any Subsidiary to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement. The Purchaser
shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement.

(v) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a
manner so that it will not become an “investment company” subject to
registration under the Investment Company Act of 1940, as amended.

 

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(w) Listing and Maintenance Requirements. The shares of Common Stock are
registered pursuant to Section 12(b) of the Exchange Act and are listed on the
NASDAQ Capital Market, and the Company has taken no action designed to, or which
to its knowledge is likely to have the effect of, terminating the registration
of the shares of Common Stock under the Exchange Act or delisting the shares of
Common Stock from the NASDAQ Capital Market, nor has the Company received any
notification that the Commission or the NASDAQ Capital Market is contemplating
terminating such registration or listing. The Company has not, in the 12 months
preceding the date hereof, received notice from the NASDAQ Capital Market on
which the shares of Common Stock are or have been listed to the effect that the
Company is not in compliance with the listing or maintenance requirements of the
NASDAQ Capital Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.

(x) Tax Status. The Company and each of its Subsidiaries (i) has made or filed
all material United States federal, state and local income and all foreign
income and franchise tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations and (iii) has set
aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such claim.

(y) Regulation M Compliance. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company.

(z) U.S. Real Property Holding Corporation. The Company is not and has never
been a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so
certify upon Purchaser’s request.

(aa) Compliance with Sanctions Laws. None of the Company, any of its
Subsidiaries or, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its Subsidiaries is currently
subject to any sanctions administered or enforced by the U.S. government
(including the Office of Foreign Assets Control of the U.S. Department of the
Treasury or the U.S. Department of State and

 

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including the designation as a “specially designated national” or “blocked
person”) or, to the knowledge of the Company, other relevant sanctions authority
(collectively, “Sanctions”); and the Company will not, directly or indirectly,
use the proceeds of the offering of the Notes hereunder, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any Sanctions.

(bb) Common Stock Reservation. The Company has reserved no less than 16,224,840
shares of its Common Stock for the conversion of the Notes,

(cc) Investor Designee. As of the Closing, there is a vacancy on the Board to
permit the appointment of the Investor Designee to the Board as of the Closing.

(dd) Solvency. The Company and its Subsidiaries, taken as a whole, are, and
immediately after the Closing Date, will be, Solvent. As used herein, the term
“Solvent” means that on such date (i) the fair market value of the assets of
such person and its subsidiaries, on a consolidated basis exceeds, on a
consolidated basis, the debts and liabilities, subordinated, contingent or
otherwise, of such person and its subsidiaries, (ii) the present fair saleable
value of the assets of such person and its subsidiaries, on a consolidated
basis, is greater than the amount that will be required to pay the probable
liabilities of such person and its subsidiaries, on a consolidated basis, of
their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured, (iii) such person
and its subsidiaries, on a consolidated basis, are able to pay their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities they mature and (iv) such person and its subsidiaries, on a
consolidated basis, are not engaged in, and are not about to engage in, business
for which they have unreasonably small capital.

3.2 Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants as of the date hereof and as of the Closing Date (unless
as of a specific date therein) to the Company as follows:

(a) Organization; Authority. The Purchaser is an entity duly incorporated or
formed, validly existing and in good standing under the laws of the jurisdiction
of its incorporation with full corporate power and authority to enter into the
Transaction Agreements, to which it is a party, and to consummate the
transactions contemplated by the Transaction Agreements and otherwise to carry
out its obligations thereunder. The execution and delivery of the Transaction
Agreements, to which it is a party, and performance by the Purchaser of the
transactions contemplated by the Transaction Agreements have been duly
authorized by all necessary corporate action on the part of the Purchaser. The
Transaction Agreements, to which it is a party, have been duly executed and
delivered by the Purchaser and constitute the valid and legally binding
obligations of the Purchaser, enforceable against it in accordance with its
terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (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.

 

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(b) Understandings or Arrangements. The Purchaser is acquiring the Notes as
principal for its own account and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of the Notes (this representation and warranty shall not limit the
Purchaser’s right to sell the Notes pursuant to a registration statement or
otherwise in compliance with applicable federal and state securities laws).

(c) Certain Transactions and Confidentiality. Other than consummating the
transactions contemplated hereunder, the Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with the Purchaser,
directly or indirectly executed any purchases or sales of the securities of the
Company during the period commencing as of October 9, 2015.

(d) No Legal Advice from the Company. The Purchaser acknowledges that it had the
opportunity to review the Transaction Agreements and the transactions
contemplated by the Transaction Agreements with its own legal counsel and
investment and tax advisors. The Purchaser is relying solely on such counsel and
advisors and not on any statements or representations of the Company, except as
specifically set forth in the Transaction Agreements, or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by the Transaction Agreements or
the securities laws of any jurisdiction.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1 Furnishing of Information; Public Information. Until the time the Purchaser
owns no Notes, the Company covenants to maintain the registration of the shares
of Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act.

4.2 Indemnification of the Purchaser. Subject to the provisions of this
Section 4.2, the Company will indemnify and hold the Purchaser 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 Purchaser (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, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this

 

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Agreement, and (b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, with respect to the
transactions contemplated by this Agreement (unless such action is based upon a
breach of such Purchaser Party’s representations, warranties or covenants under
this Agreement or any agreements or understandings such Purchaser Party may have
with any such shareholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (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 Purchaser 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 Purchaser Party under this Agreement (y) for any
settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; provided, however,
that if at any time a Purchaser Party shall have requested the Company to
reimburse such Purchaser 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 Purchaser
Party of the aforesaid request, (ii) the Company shall have received notice of
the terms of such settlement at least 10 days prior to such settlement being
entered into, and (iii) the Company shall not have reimbursed the Purchaser
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 Purchaser
Party’s breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement. The Company shall
not, without the prior written consent of the Purchaser, 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
Purchaser Party is or could have been a party and indemnity was or could have
been sought hereunder by such Purchaser Party, unless such settlement,
compromise or consent (i) includes an unconditional release of such Purchaser
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
Purchaser Party. The indemnification required by this Section 4.2 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 Purchaser Party against the Company or others and
any liabilities the Company may be subject to pursuant to law.

4.3 Reservation of Shares of Common Stock. As of the date hereof, the Company
has reserved, free of preemptive rights, a sufficient number of shares of Common
Stock for the purpose of enabling the Company to issue the maximum number of
shares initially issuable in accordance with the Notes, subject to the Share
Conversion Cap.

 

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4.4 Increased Authorized Share Capital. The Company shall use its best efforts
to (i) obtain stockholder approval of an increase in its authorized share
capital sufficient to cover the conversion of $125,000,000 aggregate principal
amount of the Notes into shares of Common Stock and (ii) reserve such additional
shares of Common Stock for such conversion.

4.5 Listing of Additional Shares. The Company hereby agrees to apply to list the
additional shares of Common Stock into which the Notes are initially convertible
on the NASDAQ Capital Market and promptly secure the listing of such additional
shares of Common Stock on the NASDAQ Capital Market.

4.6 Waiver of Corporate Opportunities. In recognition that the Purchaser and
Investor Designee currently have and will in the future have, or will consider,
investments in numerous companies with respect to which Purchaser, Investor
Designee or another Purchaser Party may serve as an advisor, a director or in
some other capacity, and in recognition that Purchaser, Investor Designee and
other Purchaser Parties have myriad duties to various investors and partners,
and in anticipation that the Company and its Subsidiaries, on the one hand, and
the Purchaser, Investor Designee and any other Purchaser Party, on the other
hand, may engage in the same or similar activities or lines of business and have
an interest in the same areas of corporate opportunities, and in recognition of
the benefits to be derived by the Company hereunder and in recognition of the
difficulties which may confront any advisor who desires and endeavors fully to
satisfy such advisor’s duties in determining the full scope of such duties in
any particular situation, the provisions of this Section 4.6 are set forth to
regulate, define and guide the conduct of certain affairs of the Company as they
may involve the Purchaser, Investor Designee or Purchaser Party, and, except as
the Purchaser and Investor Designee may otherwise agree in writing after the
date hereof:

(a) the Purchaser, Investor Designee and any Purchaser Party will have the
right: (i) to directly or indirectly engage in any business (including, without
limitation, any business activities or lines of business that are the same as or
similar to those pursued by, or competitive with, the Company and its
Subsidiaries), (iii) to directly or indirectly do business with any client or
customer of the Company and its Subsidiaries, (C) to take any other action that
the Purchaser, Investor Designee or Purchaser Party believes in good faith is
necessary to or appropriate to fulfill its obligations as described in the first
sentence of this Section 4.6 to third parties and (iv) not to communicate or
present potential transactions, matters or business opportunities to the Company
or any of its Subsidiaries, and to pursue, directly or indirectly, any such
opportunity for itself, and to direct any such opportunity to another person or
entity;

(b) the Purchaser, Investor Designee and any Purchaser Party will have no duty
(contractual or otherwise) to communicate or present any corporate opportunities
to the Company or any of its Affiliates or to refrain from any actions specified
in the preceding paragraph, and the Company, on its own behalf and on behalf of
its Affiliates, hereby renounces and waives any right to require the Purchaser,
Investor Designee or any Purchaser Party to act in a manner inconsistent with
the provisions of this Section 4.6;

 

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(c) none of the Purchaser, Investor Designee or any Purchaser Party will be
liable to the Company or any of its Affiliates for breach of any duty
(contractual or otherwise) by reason of any activities or omissions of the types
referred to in this Section 4.6 or of any such person’s or entity’s
participation therein; and

(d) there is no restriction on Purchaser, Investor Designee or any Purchaser
Party using such knowledge and understanding in making investment, voting,
monitoring, governance or other decisions relating to other entities or
securities.

4.7 Investor Designee. The Company will take no action that is inconsistent with
the objective of having Investor Designee serve on the Board.

4.8 Purchaser Covenant. At any annual or special meeting of stockholders called
by the Company for the purpose of satisfying its obligations pursuant to
Section 4.4 of this Agreement, Purchaser and its Affiliates (other than the
Company and any of its subsidiaries) shall vote any shares owned by them as of
the applicable record date in favor of the increase in authorized share capital
under Section 4.4.

ARTICLE V.

MISCELLANEOUS

5.1 Termination. This Agreement may be terminated by the Purchaser by written
notice to the Company, if the Closing has not been consummated on or before
October 20, 2015. In the event of termination of this Agreement pursuant to this
Section 5.1, the Agreement shall forthwith become void and there shall be no
liability on the part of either party; provided, however, that nothing herein
shall relieve either party from liability for (i) any breach of this Agreement
or any agreement made as of the date hereof or subsequent thereto pursuant to
this Agreement or (ii) any willful breach of, or fraud in connection with this
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 the Transaction Agreements. In addition, the Company
shall reimburse the Purchaser for the Purchaser’s reasonable out-of-pocket
expenses (including fees of counsel, consultants and accountants) incurred in
connection with the Transaction Agreements, including in connection with any
amendments, waivers or consents under or in respect of the Transaction
Agreements (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 under the Transaction
Agreements. The Company shall pay all Trustee fees, stamp taxes and other taxes
and duties levied in connection with the delivery of the Notes to the Purchaser.

5.3 Entire Agreement. The Transaction Agreements contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents.

 

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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 Agreement may be waived, modified,
supplemented or amended except in a written instrument signed by the Company and
the Purchaser. No waiver of any default with respect to any provision, condition
or requirement of this 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.

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

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser (other than by merger). The
Purchaser may assign any or all of its rights under the Transaction Agreements
to any Person to whom the Purchaser assigns or transfers any Notes.

5.8 No Third-Party Beneficiaries. This 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.

5.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this 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. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this 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 is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service

 

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of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law. If either party shall commence an action,
suit or proceeding to enforce any provisions of this 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 with
the investigation, preparation and prosecution of such action or proceeding.

5.10 Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the Notes.

5.11 Execution. This 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
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 Purchaser will be
entitled to specific performance under this Agreement. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by the
Purchaser by reason of any breach of obligations contained in this 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.

 

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5.15 Construction. The parties agree that each of them and/or their respective
counsel have reviewed and had an opportunity to revise this 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 Agreement or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in this 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 Agreement.

5.16 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, 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)

 

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

 

KERYX BIOPHARMACEUTICALS, INC.    Address for Notice:

By:__________________________________________

      Name:

      Title:

  

Keryx Biopharmaceuticals, Inc.

One Marina Park Drive

Tenth Floor

Boston, MA 02210

Attention: Brian Adams

Telephone: (617) 466-3452

Facsimile: (617) 466-3500

Email: brian.adams@keryx.com

 

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

 

Alston &Bird LLP

90 Park Avenue

New York, NY 10016

 

Attention: Mark F. McElreath

Telephone: (212) 210-9595

Facsimile: (212) 210-9444

Email: mark.mcelreath@alston.com

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

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BAUPOST GROUP SECURITIES, L.L.C.

 

By:__________________________________________

      Name:

      Title:

  

Address for Notice:

 

Baupost Group Securities, L.L.C.

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

10 St. James Avenue, Suite 1700

Boston, MA 02116

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

Office: (617) 210-830

Fax: (617) 451-7731

  

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

 

Ropes & Gray LLP

Three Embarcadero Center

San Francisco, CA 94111

Attention: Thomas Holden

thomas.holden@ropesgray.com

Office: (415) 315-2355

Fax: (415) 315-4823

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

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EXHIBIT A

FORM OF REGISTRATION RIGHTS AGREEMENT

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EXHIBIT B

FORM OF INDENTURE

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EXHIBIT C

FORM OF OPINION

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EXHIBIT D

FORM OF NOTE