Document:

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                                                                     EXHIBIT 4.1

                                   CURIS, INC.

                          REGISTRATION RIGHTS AGREEMENT

            THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
July 18, 2001 by and among Curis, Inc., a Delaware corporation (the "Company"),
Elan International Services, Ltd., a Bermuda exempted limited liability company
("EIS"), and Elan Pharma International Limited, an Irish private limited
liability company and an affiliate of EIS ("EPIL").

                                R E C I T A L S:

            A. Pursuant to a Securities Purchase Agreement dated as of the date
hereof by and among the Company, EIS and EPIL (the "Securities Purchase
Agreement"), (i) EIS has acquired (a) certain shares of the Company's common
stock, par value U.S.$0.01 per share (the "Common Stock"), (b) certain shares of
the Company's Series A convertible exchangeable preferred stock, par value
U.S.$0.01 per share (the "Series a preferred Stock"), convertible into certain
shares of Common Stock, and (c) a warrant (the "Warrant") to purchase certain
shares of Common Stock, and (ii) EPIL has acquired a convertible promissory note
of the Company (the "Note"), convertible into certain shares of Common Stock.
The Series A Preferred Stock, the Warrant and the Note collectively are referred
to herein as the "Securities".

            B. The execution of the Securities Purchase Agreement has occurred
on the date hereof and it is a condition to the closing of the transactions
contemplated thereby that the parties execute and deliver this Agreement.

            C. The parties desire to set forth herein their agreement on the
terms and subject to the conditions set forth herein related to the granting of
certain registration rights to the Holders (as defined below) relating to the
shares of Common Stock held and the shares of Common Stock issuable upon
conversion or exercise of the Securities, as the case may be, by such Holders.

                               A G R E E M E N T:

            The parties hereto agree as follows:

            1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:

            "Commission" shall mean the U.S. Securities and Exchange Commission.
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            "Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect from time to time.

            "Holders" or "Holders of Registrable Securities" shall mean EIS,
EPIL and any Person who shall have acquired Registrable Securities from EIS or
EPIL as permitted herein, either individually or jointly, as the case may be, in
a transaction pursuant to which registration rights are transferred pursuant to
Section 10 hereof.

            "Person" shall mean an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental or
quasi-governmental entity, or any department, agency or political subdivision
thereof or any other entity of any kind.

            "Registrable Securities" means (i) any shares of Common Stock issued
to EIS pursuant to the Securities Purchase Agreement; (ii) any shares of Common
Stock issued or issuable upon conversion or exercise of the Securities, as the
case may be; and (iii) any shares of Common Stock issued or issuable in respect
of the securities referred to in clauses (i) and (ii) above whether to satisfy
interest or dividend payments or upon any stock split, stock dividend,
recapitalization or similar event, until, in the case of any such security, it
is (A) sold pursuant to an effective registration statement under the Securities
Act; (B) eligible to be sold into the public market without regard to volume
limitations under Rule 144(k) promulgated under the Securities Act (or any
successor rule); (C) sold pursuant to Rule 144 under the Securities Act (or any
successor rule); or (D) sold by a Person in a transaction in which registration
rights are not transferred pursuant to Section 10 hereof. Whenever a number or
percentage of Registrable Securities is to be determined pursuant to this
Agreement, each then outstanding Security that is convertible into or
exercisable for shares of Common Stock will be deemed to be equal to the number
of shares of Common Stock for which such Security is then so convertible or
exercisable.

            The terms "register," "registered" and "registration" refer to a
registration effected by preparing, filing and having declared effective a
registration statement in compliance with the Securities Act.

            "Registration Expenses" shall mean (i) all expenses, other than
Selling Expenses (defined below), incurred by the Company in complying with
Section 2 or 3 hereof, including without limitation, all registration,
qualification and filing fees, exchange or quotation medium listing fees,
printing and delivery expenses, escrow and custodian fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expenses of accountants for the Company including the expenses of any special
audits incident to or required by any such registration and (ii) the reasonable
fees and disbursements of one
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counsel, not to exceed U.S.$10,0000 for any registration, chosen by the Holders
of a majority of the Registrable Securities included in such registration for
the purpose of rendering a legal opinion on behalf of such Holders in connection
with any Demand Registration or Piggyback Registration.

            "Securities Act" shall mean the U.S. Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect from time to time.

            "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes and the costs, fees and expenses of any
accountants, attorneys (other than the cost, fees and expenses of attorneys
which are Registration Expenses) or other experts retained by the Holders.

            2. Demand Registrations.

            (a) Requests for Registration. At any time after the six-month
anniversary of this Agreement, any Holder or Holders who collectively hold
Registrable Securities representing at least 5% of the Registrable Securities
then outstanding shall have the right (subject to the limitations set forth
below), exercisable by written notice to the Company (each a "Registration
Request"), to have the Company prepare and file with the Commission a
registration statement under the Securities Act covering the Registrable
Securities that are the subject of such request (each, a "Demand Registration").
Within 10 days after receipt of any such request, the Company will give written
notice of such requested registration to all other Holders of Registrable
Securities. The Company shall include such other Holders' Registrable Securities
in such offering if they have responded affirmatively within 10 days after the
receipt of the Company's notice. If the securities requested to be included for
registration under the registration statement to be filed in respect of the
Registration Request, together with all other securities to be registered under
such registration statement, do not have an expected aggregate offering price to
the public of at least U.S.$1,000,000, the Company shall not be obligated to
file a registration statement in response to the Registration Request.

            The Holders, collectively, shall be permitted one Demand
Registration hereunder on Form S-1 or any similar long-form registration
statement (or on Form S-3 or any similar short-form registration statement if
such short-form registration statement is then available to the Company) and the
Holders hereby agree that they shall make reasonable accommodations regarding
the timing of the Demand Registration to the managing underwriter(s) engaged by
the Company.

            A request for registration under this Section 2(a) will not count as
a Demand Registration until the registration statement has become effective and
remained effective until
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the earlier of 30 days and the sale of all securities registered thereunder
(unless such registration statement has not become effective due solely to the
actions or failure to act with respect to such registration of the Holders
requesting such registration, including a request by such Holders that such
registration be withdrawn).

            (b) Priority on Demand Registrations. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering,
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in such offering without adversely affecting the marketability of
the offering, the Company will include in such registration:

            (i) first, the Registrable Securities requested to be included in
      such registration by the Holders (or, if necessary, such Registrable
      Securities pro rata among the Holders thereof based upon the number of
      Registrable Securities owned by each such Holder or such other arrangement
      agreed to among the Holders); and

            (ii) thereafter, other securities requested to be included in such
      registration, as determined by the Company.

            The Holders of any Registrable Securities to be included in such an
underwritten offering shall enter into an underwriting agreement (which shall be
in customary form, may include agreements as to indemnification and
contribution).

            (c) Restrictions on Demand Registration. The Company may postpone or
suspend, for up to 90 days in any 12-month period, the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company's board of directors determines in good faith and notifies the Holders
in writing that such Demand Registration (i) would reasonably be expected to
have a material adverse effect on (x) any proposal or plan by the Company to
engage in any financing, acquisition or disposition of assets (other than in the
ordinary course of business) or (y) any merger, consolidation, tender offer or
similar transaction or (ii) would require disclosure of any information that the
board of directors of the Company determines in good faith the disclosure of
which would be detrimental to the Company; provided, however, that in such
event, the Holders initially requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn, such Demand
Registration will not count as a permitted Demand Registration hereunder and the
Company will pay any Registration Expenses in connection with such registration.

            (d) Selection of Investment Bankers and Managers. A majority of the
Holders participating in the offering will have the right, but not the
obligation, to select the
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investment banker(s) and manager(s) to administer an offering pursuant to a
Demand Registration, subject to the Company's prior written approval, which will
not be unreasonably withheld, delayed or conditioned.

            (e) The Company represents and warrants that it is not a party to,
or otherwise subject to, any agreement, other than this Agreement, granting
registration rights to any other Person with respect to any securities of the
Company.

            3. Piggyback Registrations.

            (a) Right to Piggyback. If at any time the Company shall propose to
register shares of Common Stock under the Securities Act (other than in a
registration statement relating to solely to sales of securities to participants
in a Company dividend reinvestment plan, or Form S-4 or S-8 or any successor
form or in connection with an acquisition or exchange offer or an offering of
securities solely to the existing shareholders or employees of the Company), the
Company (i) will give prompt written notice to all Holders of Registrable
Securities of its intention to effect such a registration and (ii) subject to
Section 3(b) and the other terms of this Agreement, will include in such
registration all Registrable Securities which are permitted under applicable
securities laws to be included in the form of registration statement selected by
the Company and with respect to which the Company has received written requests
for inclusion therein within 30 days after the receipt of the Company's notice
(each, a "Piggyback Registration"). The Holders will be permitted to withdraw
all or any part of the Registrable Securities from a Piggyback Registration at
any time prior to the effective date of such Piggyback Registration.

            (b) Priority on Piggyback Registrations. If a Piggyback Registration
is to be an underwritten offering, and the managing investment bank advises the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such registration:

            (i) first, the securities the Company proposes to sell for its own
      account;

            (ii) second, the Registrable Securities requested to be included in
      such registration by the Holders and any securities requested to be
      included in such registration by any other Person pursuant to a demand or
      piggyback registration request, other than Persons having a lower priority
      of registration than the Holders, pro rata among the Holders of such
      Registrable Securities and such other Persons, on the basis of the number
      of securities requested to be included in such registration by each of
      such Holders and such other Persons; and
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            (iii) thereafter, other securities requested to be included in such
      registration, as determined by the Company.

            The Holders of any Registrable Securities to be included in an
underwritten offering shall enter into an underwriting agreement (which shall be
in customary form, may include agreements as to indemnification and
contribution).

            (c) Right to Terminate Registration. If at any time after giving
written notice of its intention to register any of its securities as set forth
in Section 3(a) and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register such securities, the Company may, at its election, give
written notice of such determination to each Holder of Registrable Securities
and thereupon be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith as provided herein).

            (d) Selection of Underwriters/Placement Agents. The Company will
have the right to select the investment banker(s) and manager(s) to administer
an offering pursuant to a Piggyback Registration, subject to the reasonable
approval of the holders of a majority of the shares of Common Stock being
registered on such registration statement, which approval shall not be
unreasonably withheld, delayed or conditioned; provided that for the purposes of
this Section 3(d), to the extent the Company is issuing shares of Common Stock
in connection with such registration statement, the Company shall be deemed to
be a holder of the number of shares of Common Stock being issued under such
registration statement and to have approved of such selection.

            4. Expenses of Registration.

            Except as otherwise provided herein or as may otherwise be
prohibited by applicable law, all Registration Expenses incurred in connection
with all registrations pursuant to Sections 2 and 3 hereof shall be borne by the
Company. All Selling Expenses relating to securities registered on behalf of the
Holders of Registrable Securities shall be borne by such Holders.

            5. Holdback Agreements.

            (a) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10-day period prior
to, and during the 90-day period following, the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except (x) as part of such underwritten registration, (y) pursuant to
registration
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statements on Form S-4 or Form S-8 or any successor form or (z) pursuant to a
registration statement then in effect), unless the underwriters managing the
offering otherwise agree, and (ii) to use its reasonable best efforts to cause
its officers and directors and each holder of at least 5% (on a fully-diluted
basis) of its outstanding shares of Common Stock, or any securities convertible
into or exchangeable or exercisable for shares of Common Stock, purchased from
the Company at any time after the date of this Agreement (other than in a
registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such periods (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.

            (b) If requested by the managing underwriter(s) in an underwritten
offering of Common Stock or securities convertible into or exchangeable or
exercisable for shares of Common Stock of the Company, each Holder agrees,
except to the extent such Holder is a participant in such offering, not to
effect any offer, sale, distribution or transfer, including a sale pursuant to
Rule 144 (or any similar provision then effect) under the Securities Act (except
as part of such underwritten registration) (each a "Lock-up"), during the 10-day
period prior to, and during the 180-day period following, the effective date of
such Registration Statement relating to any public offering of shares of Common
Stock (or, in each case, such shorter period as may be agreed to in writing by
the Company and the Holders of at least 50% of the Registrable Securities);
provided, however, that no Holder shall be required to enter into such an
agreement unless all Persons entitled to registration rights who are not parties
to this Agreement, all other persons selling shares in such offering, all
Persons holding in excess of 1% on a fully diluted basis) of the Company's
outstanding shares of Common Stock (other than that purchased in a registered
public offering) and all executive officers and directors of the Company shall
also have agreed not to offer, sell, distribute a transfer under the
circumstances and pursuant to the terms set forth in this Section 5(b);
provided, further, that in the event that if the foregoing proviso is satisfied
and any Person referenced in such proviso shall have entered into a Lock-up for
a period of less than 180 days following the effective date of such Registration
Statement, the Holders shall not be required to enter into a Lock-up for a
period that exceeds the greater of (x) 90 days after the effective date of such
Registration Statement and (y) the length of the shortest Lock-up period after
the effective date of such Registration Statement agreed to by any such Person.

            6. Registration Procedures.

            Whenever the Holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
will use its reasonable best efforts to effect the registration of such
Registrable Securities in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the
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Company will under the time frames provided herein, or if not so provided, as
expeditiously as is reasonable:

            (a) prepare and file with the Commission a registration statement on
      any appropriate form for which the Company qualifies with respect to such
      Registrable Securities and use its reasonable best efforts to cause such
      registration statement to become effective (provided that before filing a
      registration statement or prospectus or any amendments or supplements
      thereto, the Company will (i) furnish to the counsel selected by the
      Holders copies of all such documents proposed to be filed, which documents
      will be subject to the review of such counsel, and (ii) notify each Holder
      of Registrable Securities covered by such registration of any stop order
      issued or threatened by the Commission);

            (b) prepare and file with the Commission such amendments and
      supplements to such registration statement and the prospectus used in
      connection therewith as may be reasonably necessary to keep such
      registration statement effective for a period equal to the shorter of (i)
      six months and (ii) the time by which all securities covered by such
      registration statement have been sold, and comply with the provisions of
      the Securities Act with respect to the disposition of all securities
      covered by such registration statement during such period in accordance
      with the intended methods of disposition by the sellers thereof set forth
      in such registration statement;

            (c) furnish to each seller of Registrable Securities such number of
      copies of such registration statement, each amendment and supplement
      thereto, the prospectus included in such registration statement (including
      each preliminary prospectus) and such other documents as such seller may
      reasonably request in order to facilitate the disposition of the
      Registrable Securities owned by such seller;

            (d) use all reasonable efforts to register or qualify such
      Registrable Securities under the securities or blue sky laws of such
      jurisdictions as any seller reasonably requests and do any and all other
      acts and things which may be reasonably necessary or advisable to enable
      such seller to consummate the disposition in such jurisdictions of the
      Registrable Securities owned by such seller (provided that the Company
      will not be required to (i) qualify generally to do business in any
      jurisdiction where it would not otherwise be required to qualify but for
      this Section 6(d), (ii) subject itself to taxation in any jurisdiction or
      (iii) take any action that would subject it to general service of process
      in any such jurisdiction);

            (e) promptly notify each seller of such Registrable Securities, at
      any time when a prospectus relating thereto is required to be delivered
      under the Securities Act, of the happening of any event as a result of
      which the prospectus included in such
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      registration statement contains an untrue statement of a material fact or
      omits any material fact necessary to make the statements therein not
      misleading, and, the Company will prepare and deliver to each Holder a
      supplement or amendment to such prospectus so that, as thereafter
      delivered to the purchasers of such Registrable Securities, such
      prospectus will not contain an untrue statement of a material fact or omit
      to state any material fact necessary to make the statements therein not
      misleading; provided, however, that the Company shall be required to
      notify the Holders, but shall not be required to amend the registration
      statement or supplement the Prospectus for a period of up to six months if
      the board of directors determines in good faith that to do so would
      reasonably be expected to have a material adverse effect on any proposal
      or plan by the Company to engage in any financing, acquisition or
      disposition of assets (other than in the ordinary course of business) or
      any merger, consolidation, tender offer or similar transaction or would
      require the disclosure of any information that the board of directors
      determines in good faith the disclosure of which would be materially
      detrimental to the Company, it being understood that the period for which
      the Company is obligated to keep the Registration Statement effective
      shall be extended for a number of days equal to the number of days the
      Company delays amendments or supplements pursuant to this provision. Upon
      receipt of any notice pursuant to this Section 6(e), the Holders shall
      suspend all offers and sales of securities of the Company and all use of
      any prospectus until advised by the Company that offers and sales may
      resume, and shall keep confidential the fact and content of any notice
      given by the Company pursuant to this Section 6(e);

            (f) cause all such Registrable Securities to be listed on each
      securities exchange or quoted on Nasdaq or other quotation medium, if any,
      on which similar securities issued by the Company are then listed or
      quoted;

            (g) provide a transfer agent and registrar for all such Registrable
      Securities not later than the effective date of such registration
      statement;

            (h) enter into such customary agreements (including underwriting
      agreements in customary form) and take all such other actions as the
      Holders of a majority of the Registrable Securities being sold or the
      underwriters, if any, reasonably request in order to expedite or
      facilitate the disposition of such Registrable Securities;

            (i) make available for inspection by the Holders of Registrable
      Securities included in the registration statement, any underwriter
      participating in any disposition pursuant to such registration statement
      and any attorney, accountant or other agent retained by any such seller or
      underwriter, all pertinent financial and other records, pertinent
      corporate documents and properties of the Company, and cause the
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      Company's officers, directors, employees and independent accountants to
      supply all information reasonably requested by any such seller,
      underwriter, attorney, accountant or agent in connection with such
      registration statement;

            (j) otherwise use its reasonable best efforts to comply with all
      applicable rules and regulations of the Commission, and make available to
      its security holders, as soon as reasonably practicable, an earnings
      statement covering the period of at least 12 months beginning with the
      first day of the Company's first full calendar quarter after the effective
      date of the registration statement, which earnings statement shall satisfy
      the provisions of Section 11(a) of the Securities Act and Rule 158
      thereunder;

            (k) in the event of the issuance of any stop order suspending the
      effectiveness of a registration statement, or of any order suspending or
      preventing the use of any related prospectus or suspending the
      qualification of any shares of Common Stock included in such registration
      statement for sale in any jurisdiction, use its reasonable best efforts
      promptly to obtain the withdrawal of such order;

            (l) if the registration is an underwritten offering, use its
      reasonable best efforts to obtain a so-called "cold comfort" letter from
      the Company's independent public accountants in customary form and
      covering such matters of the type customarily covered by cold comfort
      letters;

            (m) use its reasonable best efforts to cause such Registrable
      Securities covered by such registration statement to be registered with or
      approved by such other governmental agencies or authorities as may be
      necessary to enable the sellers thereof to consummate the disposition of
      such Registrable Securities; and

            (n) if any such registration or comparable statement refers to any
      Holder by name or otherwise as the holder of any securities of the Company
      and if in its sole and exclusive judgment, such Holder is or might be
      deemed to be an underwriter or a controlling person of the Company, such
      Holder shall have the right to require (i) the insertion therein of
      language, in form and substance satisfactory to such Holder and presented
      to the Company in writing, to the effect that the holding by such Holder
      of such securities is not to be construed as a recommendation by such
      Holder of the investment quality of the Company's securities covered
      thereby and that such holding does not imply that such Holder shall assist
      in meeting any future financial requirements of the Company, or (ii) in
      the event that such reference to such Holder by name or otherwise is not
      required by the Securities Act or any similar Federal statute then in
      force, the deletion of the reference to such Holder; provided that with
      respect to this clause (ii) such Holder shall (a) furnish to the Company
      an opinion of counsel to such effect, which opinion and counsel shall be
      reasonably satisfactory to the Company
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      and (b) indemnify the Company against any loss or liability imposed upon
      and any reasonable expenses incurred by the Company as a result of such
      deletion.

            7. Obligations of Holders.

            Whenever the Holders of Registrable Securities sell any Registrable
Securities pursuant to a Demand Registration or a Piggyback Registration, such
Holders shall be obligated to comply with the applicable provisions of the
Securities Act, including the prospectus delivery requirements thereunder, and
any applicable state securities or blue sky laws. In addition, each Holder of
Registrable Securities will be deemed to have agreed by virtue of its
acquisition of such Registrable Securities that, upon receipt of any notice
described in Section 6(e), such Holder will forthwith discontinue disposition of
such Registrable Securities covered by such registration statement or prospectus
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6(e), or until it is advised in writing by
the Company that the use of the applicable prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such prospectus.

            8. Indemnification.

            (a) The Company agrees to indemnify, to the fullest extent permitted
by applicable law, each Holder of Registrable Securities, its officers and
directors and each Person who controls such Holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities, expenses or
any amounts paid in settlement of any litigation, investigation or proceeding
commenced or threatened (collectively, "Claims") to which each such indemnified
party may become subject under the Securities Act insofar as such Claim arose
out of (i) any untrue or alleged untrue statement of material fact contained, in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or (ii) any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the Company by
such Holder expressly for use therein or by such Holder's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such Holder with copies of
the same. In connection with an underwritten offering, the Company will
indemnify the underwriters, their officers and directors and each Person who
controls the underwriters (within the meaning of the Securities Act) to the same
extent as provided above with respect to the indemnification of the Holders of
Registrable Securities.

            (b) In connection with any registration statements in which a Holder
of Registrable Securities is participating, each such Holder will, to the
fullest extent permitted by
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                                      -12-

applicable law, indemnify the Company, its directors and officers and each
Person who controls the Company (within the meaning of the Securities Act)
against any and all Claims to which each such indemnified party may become
subject under the Securities Act insofar as such Claim arose out of (i) any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that with respect to a Claim arising
pursuant to clause (i) or (ii) above, the material misstatement or omission is
contained in the information such Holder provided to the Company pursuant to
Section 11 hereof; provided, further, that the obligation to indemnify will be
individual to each Holder and will be limited to the amount of proceeds received
by such Holder from the sale of Registrable Securities pursuant to such
registration statement.

            (c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (but the failure to provide such notice shall not
release the indemnifying party of its obligation under paragraphs (a) and (b),
unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment, based on written advice of counsel, a
conflict of interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party, based on
written advice of counsel, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.

            (d) The indemnifying party shall not be liable to indemnify an
indemnified party for any settlement, or consent to judgment of any such action
effected without the indemnifying party's written consent (but such consent will
not be unreasonably withheld, delayed or conditioned). Furthermore, the
indemnifying party shall not, except with the prior written approval of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to each indemnified party of a release from all liability
in respect of such claim or litigation without any payment or consideration
provided by each such indemnified party.

            (e) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under clauses (a) and (b) above in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such
<PAGE>

                                      -13-

indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits
received by the Company, the underwriters, the sellers of Registrable Securities
and any other sellers participating in the registration statement from the sale
of shares pursuant to the registered offering of securities for which indemnity
is sought but also the relative fault of the Company, the underwriters, the
sellers of Registrable Securities and any other sellers participating in the
registration statement in connection with the misstatement or omission which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the underwriters, the sellers of Registrable Securities and any other
sellers participating in the registration statement shall be deemed to be based
on the relative relationship of the total net proceeds from the offering (before
deducting expenses) to the Company, the total underwriting commissions and fees
from the offering (before deducting expenses) to the underwriters and the total
net proceeds from the offering (before deducting expenses) to the sellers of
Registrable Securities and any other sellers participating in the registration
statement. The relative fault of the Company, the underwriters, the sellers of
Registrable Securities and any other sellers participating in the registration
statement shall be determined by reference to, among other things, whether the
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 Company
or by the sellers of Registrable Securities and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided that in no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

            (f) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person
of such indemnified party and will survive the transfer of the Registrable
Securities.

            9. Participation in Underwritten Registrations.

            No Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements; provided that no Holder of Registrable Securities
included in any underwritten registration shall be required to make any
representations or
<PAGE>

                                      -14-

warranties to the Company or the underwriters (other than representations and
warranties regarding such Holder and such Holder's intended method of
distribution) or to undertake any indemnification obligations to the Company or
the underwriters with respect thereto, except as otherwise provided in paragraph
8 hereof.

            10. Transfer of Registration Rights.

            The rights granted to any Holder under this Agreement may be
assigned to any Person in connection with any transfer or assignment of
Registrable Securities by a Holder; provided, however, that: (a) such transfer
is otherwise effected in accordance with applicable securities laws, (b) such
transfer is not in violation of the Securities Purchase Agreement, (c) if not
already a party hereto, the assignee or transferee agrees in writing prior to
such transfer to be bound by the provisions of this Agreement, and (d) unless
otherwise notified by such Holder, EIS shall act as agent and representative for
such Holder for the giving and receiving of notices hereunder.

            11. Information by Holder.

            Each Holder shall furnish to the Company such written information
regarding such Holder and any distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Agreement and shall promptly notify the Company of any changes in such
information.

            12. Exchange Act Compliance.

            The Company shall comply with all of the reporting requirements of
the Exchange Act then applicable to it, if any, and shall comply with all other
public information reporting requirements of the Commission which are conditions
to the availability of Rule 144 for the sale of the Registrable Securities. The
Company shall cooperate with each Holder in supplying such information as may be
necessary for such Holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of Rule 144.

            13. Termination of Registration Rights.

            All registration rights granted under this Agreement shall terminate
and be of no further force and effect as to a particular Holder on the date that
(i) all Registrable Securities held by such Holder may immediately be sold
without restriction under Rule 144 during any 90-day period as determined by
counsel to the Company pursuant to a written opinion letter delivered by such
counsel to such effect addressed to the Company's transfer
<PAGE>

                                      -15-

agent for shares of Common Stock and such Holder or (ii) all Registrable
Securities held by such Holder have been registered with the Commission or are
no longer outstanding. For the avoidance of doubt, in order to satisfy the
requirements of clause (i) above, (x) all Registrable Securities held by such
Holder must be in the form of Common Stock and (y) such Holder shall not then
have the right to receive additional Registrable Securities (other than right to
receive dividends or other distributions on then-outstanding shares of Common
Stock held by such Holder on the same basis as other holders of shares of Common
Stock).

            14. Miscellaneous.

            (a) No Inconsistent Agreements. So long as any Holder owns any
Registrable Securities, the Company will not enter into any agreement that is
inconsistent with or violates the rights granted hereunder to the Holders of
Registrable Securities, including, without limitation, any agreement that would
require the Company to register any of its securities with priority with respect
to registration over, the rights granted to the Holders hereunder, without the
prior written consent of the Holders of at least 50% of the Registrable
Securities.

            (b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement; provided, however, that in no event shall any Holder have the right
to enjoin, delay or interfere with any offering of securities by the Company.

            (c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only with the prior
written consent of the Company and Holders of at least 50% of the Registrable
Securities; provided, however, that without the prior written consent of all the
Holders, no such amendment or waiver shall reduce the foregoing percentage
required to amend or waive any provision of this Agreement.

            (d) Successors and Assigns. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which are for
the benefit of Holders of Registrable Securities are also for the benefit of,
and enforceable by, any permitted transferee of Registrable Securities, in
accordance with Section 10 hereof.
<PAGE>

                                      -16-

            (e) Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not be in any way affected or impaired thereby.

            (f) Counterparts and Facsimile. This Agreement may be executed in
any number of counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together shall constitute
one agreement. This Agreement may be signed and delivered to the other party by
facsimile transmission; such transmission shall be deemed a valid signature.

            (g) Descriptive Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

            (h) Governing Law; Disputes. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to conflicts of laws rules or principles. Any dispute under this
Agreement that is not settled by mutual consent shall be finally adjudicated by
any federal or state court sitting in the City, County and State of New York,
and each party consents to the exclusive jurisdiction of such courts (or any
appellate court therefrom) over any such dispute.

            (i) Notices. All notices, demands and requests of any kind to be
delivered to any party in connection with this Agreement shall be in writing and
shall be deemed to have been duly given if personally or hand delivered or if
sent by internationally-recognized overnight courier or by registered or
certified mail, return receipt requested and postage prepaid, or by facsimile
transmission, in each case, addressed as follows:

            (i)   if to the Company, to:

                  Curis, Inc.
                  61 Moulton Street
                  Cambridge, Massachusetts  02138-1118
                  Attention:  Doros Platika, M.D., President and
                              Chief Executive Officer
                  Facsimile:  (617) 503-6501

                  with a copy to:
<PAGE>

                                      -17-

                  Cooley Godward LLP
                  4635 Executive Drive
                  San Diego, California  92121
                  Attention:  L. Kay Chandler, Esq.
                  Facsimile:  (858) 453-3555

            (ii)  (A)  if to EIS, to:

                  Elan International Services, Ltd.
                  102 St. James Court
                  Flatts, Smiths Parish
                  Bermuda FL 04
                  Attention:  Chief Executive Officer
                  Facsimile:  (441) 292-2224

                  (B) if to EPIL, to:

                  Elan Pharma International Limited
                  Wil House
                  Shannon Business Park
                  Shannon
                  Co. Clare, Ireland
                  Attention:  Company Secretary
                  Facsimile:  011 353 61 362 097

                  with a copy to, in the case of (ii) above:

                  Cahill Gordon & Reindel
                  80 Pine Street
                  New York, NY 10005
                  Attention:  William M. Hartnett, Esq.
                  Facsimile:  (212) 269-5420

or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions of
this Section 14(i). Any such notice or communication shall be deemed to have
been effectively given (i) in the case of personal or hand delivery, on the date
of such delivery, (ii) in the case of an internationally-recognized overnight
delivery courier, on the second business day after the date when sent or earlier
upon receipt of evidence of acceptance of delivery, (iii) in the case of
mailing, on the fifth business day following that day on which the piece of mail
containing such
<PAGE>

                                      -18-

communication is posted and (iv) in the case of facsimile transmission, on the
date of telephone confirmation of receipt.

            (j) Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement of the parties with regard to the subject matter
hereof and supersedes all prior agreements and understandings among the parties
with respect thereto.

                            [Signature page follows]
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.

                                    CURIS, INC.

                                    By: /s/    Doros Platika, M.D.
                                        --------------------------------
                                        Name:  Doros Platika, M.D.
                                        Title: President and Chief Executive
                                               Officer

                                    ELAN INTERNATIONAL SERVICES, LTD.

                                    By: /s/    Debra Moore Buryj
                                        -----------------------------
                                        Name:  Debra Moore Buryj
                                        Title: Vice President

                                    ELAN PHARMA INTERNATIONAL
                                        LIMITED

                                    By: /s/    Colin Sainsbury
                                        -----------------------------
                                        Name:  Colin Sainsbury
                                        Title: Authorized Signatory<PAGE>

                                                                    EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

            SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of July
18, 2001, among Curis, Inc., a Delaware corporation (the "Company"), Elan
International Services, Ltd., a Bermuda exempted limited liability company
("EIS"), and Elan Pharma International Limited, an Irish private limited
liability company, an affiliate of EIS ("EPIL").

                                R E C I T A L S:

            A. The Company desires to issue and sell to EIS, and EIS desires to
purchase from the Company, on the date hereof, (i) 1,000 shares of a
newly-created series of the Company's convertible exchangeable preferred stock,
par value U.S.$0.01 per share, designated "Series A Convertible Exchangeable
Preferred Stock" (the "Series A Preferred Stock"), (ii) 546,448 shares of the
Company's common stock, par value U.S.$0.01 per share ("Common Stock"), and
(iii) a warrant to purchase up to 50,000 shares of Common Stock, as provided
therein, in the form attached hereto as Exhibit A (as amended at any time, the
"Warrant"). The Company further desires to issue and sell to EPIL, and EPIL
desires to purchase from the Company, a convertible promissory note of the
Company, in the form attached hereto as Exhibit B-1 (the "Note"), advances under
which shall be disbursed from time to time in a principal amount up to
U.S.$8,010,000 (excluding capitalized interest) in accordance with its terms and
subject to the conditions contained herein and therein. The Series A Preferred
Stock and the Common Stock are referred to, collectively, herein as the
"Shares." The Shares, the Warrant and the Note are referred to, collectively,
herein as the "Securities." The rights, preferences and privileges of the Series
A Preferred Stock are as set forth in the Company's Certificate of Designations,
Preferences and Rights, the form of which is attached hereto as Exhibit C (the
"Certificate of Designations").

            B. The Company and EIS have formed Curis Newco, Ltd., an exempted
limited liability company organized under the laws of Bermuda ("Newco"), and
pursuant to the terms of a Subscription, Joint Development and Operating
Agreement, dated as of the date hereof (as amended at any time, the "JDOA"),
simultaneously with the transactions contemplated by this Agreement to occur on
the Initial Closing Date: (i) the Company shall acquire 6,000 voting common
shares of Newco, par value U.S.$1.00 per share (the "Newco Common Shares"),
representing 100% of the issued and outstanding Newco Common Shares and, on a
fully-diluted basis, 50% of the aggregate outstanding Newco Shares, and 3,612
non-voting convertible preference shares of Newco, par value U.S.$1.00 per share
(the "Newco Preference Shares"; together with the Newco Common Shares, the
"Newco Shares"), representing 60.2% of the issued and outstanding Newco
Preference Shares and, on a fully-diluted basis, 30.1% of the aggregate
outstanding Newco Shares and (ii) EIS shall acquire 2,388 Newco Preference
Shares, representing 39.8% of the issued and outstanding Newco Preference Shares
<PAGE>

                                      -2-

and, on a fully-diluted basis, 19.9% of the aggregate outstanding Newco Shares.
Additionally, as of the date hereof, Newco has entered into license agreements
with (i) Neuralab Limited, a Bermuda private limited liability company and as
affiliate of EIS and EPIL ("Elan") (such agreement, as amended at any time, the
"Elan License Agreement"), and (ii) the Company (such agreement, as amended at
any time, the "Company License Agreement"; together with the Elan License
Agreement, the "License Agreements").

            C. The Company, EIS and EPIL are executing and delivering on the
date hereof a Registration Rights Agreement, in the form attached hereto as
Exhibit D (as amended at any time, the "Company Registration Rights Agreement"),
in respect of (i) Common Stock issued and purchased hereunder and Common Stock
issued or issuable upon conversion of the Series A Preferred Stock, exercise of
all or any portion of the Warrant and conversion of all or any portion of the
Note and (ii) any other Common Stock owned by EIS or any of its affiliates or
their respective permitted transferees. The Company, EIS and Newco are also
executing and delivering on the date hereof a Registration Rights Agreement, in
the form attached hereto as Exhibit E (as amended at any time, the "Newco
Registration Rights Agreement"). This Agreement, the Certificate of
Designations, the Note, the Warrant, the JDOA, the Company Registration Rights
Agreement, the Newco Registration Rights Agreement, the License Agreements and
each other document or instrument executed and delivered in connection with the
transactions contemplated hereby and by the JDOA are referred to, collectively,
herein as the "Transaction Documents." On June 29, 2001, the Company executed
and delivered a letter to and for the benefit of EIS (the "Letter").

                               A G R E E M E N T:

            In consideration of the foregoing premises and the mutual covenants
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereby agree as follows:

            SECTION 1. Closing.

            (a) Time and Place. The closing of the Initial Purchase (as defined
below) (the "Initial Closing") shall occur on the date hereof (the "Initial
Closing Date"). The funding of each advance under the Note (each, a "Note
Closing") shall occur on such dates as set forth in Section 1(e) (each, a "Note
Closing Date"). The Initial Closing and each Note Closing individually are
referred to herein as a "Closing," and the Initial Closing Date and each Note
Closing Date individually are referred to herein as a "Closing Date." The
Initial Closing shall be held at the offices of Cahill Gordon & Reindel, 80 Pine
Street, New York, New York 10005 (by means of facsimile or overnight mail) and
each Note Closing shall be a paper closing by means of facsimile or as otherwise
agreed by the parties.
<PAGE>

                                      -3-

            (b) Sale and Purchase. At the Initial Closing, subject to the terms
and conditions hereof, the Company shall issue and sell to EIS, and EIS shall
purchase from the Company, (i) 1,000 shares of Series A Preferred Stock, (ii)
546,448 shares of Common Stock and (iii) the Warrant (the "Initial Purchase").
In addition, subject to the terms and conditions hereof and as set forth in the
Note, the Company shall issue to EPIL the Note as set forth in Section 1(e).

            (c) Purchase Price. The aggregate purchase price for the Initial
Purchase shall be U.S.$16,015,000 (the "Initial Purchase Price"),
U.S.$12,015,000 of which represents the purchase price for 1,000 shares of
Series A Preferred Stock, and U.S.$4,000,000 of which represents the purchase
price for 546,448 shares of Common Stock and the Warrant.

            (d) Initial Closing Delivery. On the Initial Closing Date, subject
to the terms and conditions hereof:

            (i) EIS shall pay the Initial Purchase Price by wire transfer of
      U.S.$16,015,000 to an account designated in writing by the Company;

            (ii) EIS, EPIL and/or Elan, as applicable, shall execute and deliver
      to the Company: (A) this Agreement, (B) the Company Registration Rights
      Agreement, (C) the Newco Registration Rights Agreement, (D) the JDOA and
      (E) the License Agreements;

            (iii) the Company shall execute and deliver to EIS or EPIL, as
      applicable: (A) certificates representing 1,000 shares of Series A
      Preferred Stock, (B) certificates representing 546,448 shares of Common
      Stock, (C) the Note, (D) the Warrant, (E) this Agreement, (F) the Company
      Registration Rights Agreement, (G) the Newco Registration Rights
      Agreement, (H) the JDOA, (I) the Certificate of Designations as filed with
      the Secretary of State of the State of Delaware, (J) the License
      Agreements, (K) Exchange Shares (as defined in Section 5(b) hereof),
      including the a stock power relating to the Exchange Shares for the
      benefit of EIS executed pursuant to Section 6 hereof, (L) a customary
      secretary's certificate from the secretary of the Company, including a
      certificate as to the incumbency of the officers of the Company executing
      any of the Transaction Documents, and (M) any other documents or
      instruments reasonably requested by EIS or EPIL; and

            (iv) the Company shall cause to be delivered to EIS and EPIL an
      opinion of counsel in the form attached hereto as Exhibit F.

            (e) Advances under the Note. It is estimated that Newco will require
additional funds to commence development of Newco's products. Within the period
commencing
<PAGE>

                                      -4-

on the Initial Closing Date and ending on the two year anniversary of the
Initial Closing Date (the "Development Period"), EIS and the Company may provide
to Newco up to an aggregate maximum amount of U.S.$10,000,000, such funding to
be provided by EIS and the Company on a pro rata basis based on their respective
equity interests, on a fully-diluted basis, in Newco (the "Development
Funding"). In order to ensure the Company has funds available for its share of
the Development Funding, EPIL has agreed to advance to the Company up to
U.S.$8,010,000 subject to the terms and conditions set forth below and as set
forth in the Note.

            (1) From time to time at the request of the Company, EPIL shall make
      advances under the Note to the Company (each, an "Advance") in an
      aggregate principal amount of up to U.S.$8,010,000 (excluding capitalized
      interest) (the "Total Commitment"); provided that the Total Commitment
      shall be reduced in an amount equal to amounts funded by the Company to
      Newco as Development Funding (each a "Development Funding Contribution")
      for which an Advance was not concurrently requested in respect of the
      Note. The aggregate amount of the Advances made to the Company shall not
      in any event exceed the amount of Development Funding funded by the
      Company to Newco (after giving effect to any concurrent Advance made under
      the Note and any corresponding Development Funding Contribution made by
      the Company) (the "Maximum Amount").

            (2) Each Advance shall be subject to the following terms and
      conditions:

                  (A) each Advance shall be made at such time that (x) each
      Participant (as defined in the JDOA) shall have determined, pursuant to
      Clauses 6.3 and 6.4 of the JDOA, that Development Funding shall be
      provided, (y) Newco shall have provided written notice thereof to EIS and
      to the Company and (z) the Company shall have delivered a written request
      to EPIL in the form attached hereto as Exhibit B-2 (the "Disbursement
      Notice") not less than 10 business days prior to the requested Note
      Closing Date;

                  (B) the minimum amount of each Advance shall be not less than
      U.S.$250,000 (or such lesser amount up to the Maximum Amount or the Total
      Commitment, as the case may be, if the amount that remains available is
      less than U.S.$250,000). The Company shall be entitled to receive up to
      four (4) Advances in any calendar year;

                  (C) each Advance under the Note shall (x) occur only during
      the Development Period, (y) together with all previous Advances, not
      exceed the Total Commitment and (z) together with all previous Advances,
      not exceed the Maximum Amount;
<PAGE>

                                      -5-

                  (D) at the time of each Advance, no material breach or default
      by the Company under any Transaction Document shall have occurred and be
      continuing;

                  (E) at the time of each Advance, the representations and
      warranties of the Company contained herein shall be true and correct in
      all material respects as of the date made and the representations and
      warranties of the Company contained in clauses (a), (b)(iv), (c), (d),
      (e), (f)(i), (g)(A)(II)-(III), (g)(B), (h)(i), (i) and (k) of Section 2
      hereof as of such Note Closing Date; and

                  (F) at the time of each Advance, each of EIS and EPIL shall
      have received any required approvals under the Mergers and Takeovers
      (Control) Acts 1978-1996 (Ireland), the Hart-Scott-Rodino Antitrust
      Improvements Act of 1976, as amended, and any other similar law or
      regulation (collectively, the "Applicable Anti-Trust Laws"); provided that
      in the event that EIS and EPIL have not obtained approval under all
      Applicable Anti-Trust Laws at the time a determination of the necessity of
      such funding by the Newco Directors and such approval would be required,
      the Company shall issue to EPIL a non-convertible note substantially in
      the form of the Note (other than provisions relating to conversion), and
      the parties hereto shall work together in good faith to agree on an
      alternative funding mechanism for future borrowings.

             (3) On each Note Closing Date, (x) EPIL shall fund the amount set
      forth in the Disbursement Notice by wire transfer of immediately available
      funds and confirm, in writing, the aggregate principal amount outstanding
      immediately thereafter, (y) the Company shall deliver to EPIL an officers'
      certificate in the form attached hereto as Exhibit B-3 confirming (A) that
      the conditions described in clauses (2)(A)-(E) above have been satisfied
      and (B) the outstanding aggregate principal amount after such wire
      transfer and (z) the Company shall furnish such documents and instruments
      that EPIL shall reasonably request.

            (f) Exemption from Registration; Legend. The Securities and any
underlying shares of Common Stock will be issued under an exemption or
exemptions from registration under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and are also subject to certain rights and obligations
set forth herein. Accordingly, the certificates evidencing the Series A
Preferred Stock, the Common Stock, the Warrant, the Note and any shares of
Common Stock or other securities issuable upon the exercise, conversion or
exchange of any of the Securities shall, upon issuance, contain a legend,
substantially in the form as follows:

      THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
      SECURITIES LAWS AND NO
<PAGE>

                                      -6-

      INTEREST THEREIN MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
      (1) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES SHALL BE
      EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2)
      SUCH SECURITIES ARE TRANSFERRED PURSUANT TO RULE 144 PROMULGATED UNDER THE
      ACT (OR ANY SUCCESSOR RULE) OR (3) THE ISSUER OF THESE SECURITIES SHALL
      HAVE RECEIVED AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
      SATISFACTORY TO THE ISSUER THAT NO VIOLATION OF THE ACT OR SIMILAR STATE
      SECURITIES LAWS WILL BE INVOLVED IN SUCH TRANSFER.

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RIGHTS
      AND OBLIGATIONS CONTAINED IN THAT CERTAIN SECURITIES PURCHASE AGREEMENT,
      DATED AS OF JULY 18, 2001, BY AND AMONG CURIS, INC., ELAN INTERNATIONAL
      SERVICES, LTD. AND ELAN PHARMA INTERNATIONAL LIMITED.

            Notwithstanding the foregoing, the second paragraph of the foregoing
legend shall only be included if then applicable.

            SECTION 2. Representations and Warranties of the Company. The
Company hereby represents and warrants to EIS and EPIL as follows:

            (a) Organization and Qualification. The Company is duly organized,
      validly existing and in good standing under the laws of the State of
      Delaware and has all requisite corporate power and authority to own and
      lease its properties, to carry on its business as presently conducted and
      as proposed to be conducted and to consummate the transactions
      contemplated hereby. The Company is duly qualified as a foreign
      corporation and in good standing to do business in each jurisdiction in
      which the nature of the business conducted or the property owned by it
      requires such qualification, except where the failure to be so qualified
      would not, individually or in the aggregate, have a material adverse
      effect on the business, assets, liabilities (contingent or otherwise),
      operations, condition (financial or otherwise) or prospects of the Company
      (a "Company Material Adverse Effect"). The Company hereby acknowledges
      that as of the Initial Closing Date it is not in good standing as a
      foreign corporation in the Commonwealth of Massachusetts.

            (b) Capitalization. (i) The authorized capital stock of the Company
      immediately prior to the Initial Closing (without giving effect to the
      authorization of shares of Series A Preferred Stock pursuant to the
      Certificate of Designations), consists of
<PAGE>

                                      -7-

      (A) 125,000,000 shares of Common Stock, of which 31,647,391 shares are
      issued and outstanding and 11,122,635 shares are reserved for future
      issuance upon exercise of options under plans for employees, officers,
      directors and consultants, and (B) 5,000,000 shares of preferred stock,
      par value U.S.$0.01 per share, none of which are issued and outstanding.

            (ii) As of the Initial Closing Date, the Company has reserved a
      sufficient number of shares of Common Stock for issuance upon conversion
      of the Series A Preferred Stock, exercise of the Warrant and conversion of
      the Note (and as pay-in-kind interest on the Note) and a sufficient number
      of shares of Series A Preferred Stock for issuance as dividends on the
      Series A Preferred Stock.

           (iii) Except as set forth in the Transaction Documents, as described
      on Schedule 2(b), or for such documents listed as exhibits to the
      Company's Annual Report for the fiscal year ended December 31, 2000 filed
      on Form 10-K with the Securities and Exchange Commission (the "SEC") on
      March 30, 2001 (the "Company's Form 10-K") or the Company's Quarterly
      Report for the three months ended March 31, 2001 filed on Form 10-Q with
      the SEC on May 10, 2001 (the "Company's Form 10-Q"), (A) there are no
      preemptive rights, voting agreements, rights of first offer or refusal,
      options, warrants or other conversion privileges or rights presently
      outstanding to purchase, subscribe for or otherwise acquire, or any
      securities convertible into or exercisable for or into, any of the
      Company's capital stock (collectively, "Preemptive Rights"), and (B) there
      are no agreements to register any of the Company's outstanding securities
      under U.S. federal securities laws.

            (iv) The Shares, when issued against payment therefor in accordance
      with this Agreement or, in the case of the Series A Preferred Stock, as
      dividends in respect of previously issued shares of Series A Preferred
      Stock, will be duly and validly issued, fully paid and non-assessable, and
      the Warrant and the Note (including additional amounts issued as accrued
      interest), when issued against payment therefor in accordance with this
      Agreement or, in the case of the Note, as pay-in-kind interest in respect
      of the then outstanding principal amount of the Note on each respective
      interest payment date, will be duly and validly issued, and in each case
      will not be issued in violation of any Preemptive Rights. The shares of
      Common Stock issuable upon conversion or exercise of the Series A
      Preferred Stock, the Warrant and the Note (or as pay-in-kind interest on
      the Note), when issued upon conversion, exercise or in accordance with the
      terms thereof (the "Underlying Shares"), will be duly and validly issued,
      fully paid and non-assessable, and will not be issued in violation of, or
      subject to, any Preemptive Rights.
<PAGE>

                                      -8-

            (c) Authorization of Transaction Documents; Authorization of Letter.
      The Company has full corporate power and authority to execute and deliver
      this Agreement and each of the other Transaction Documents to which it is
      a party, and to perform its obligations hereunder and thereunder. The
      execution, delivery and performance by the Company of this Agreement and
      each of the other Transaction Documents to which it is a party (including
      the issuance and sale of the Securities and the issuance of the Underlying
      Shares) have been duly authorized by all requisite corporate action by the
      Company and, when executed and delivered by the Company, this Agreement
      and each of the other Transaction Documents to which it is a party will be
      the valid and binding obligations of the Company, enforceable against the
      Company in accordance with their respective terms, subject to applicable
      bankruptcy, insolvency, fraudulent conveyance, reorganization or similar
      laws affecting the rights of creditors generally and subject to general
      principles of equity and limitations on the availability of equitable
      relief, including specific performance (collectively, the "Enforceability
      Exceptions"), and except any rights to indemnity under Section 8 of the
      Company Registration Rights Agreement may be limited by state and federal
      securities law and by public policy considerations. The Company had the
      corporate power and authority to execute and deliver the Letter. The
      execution, delivery and performance by the Company of the Letter was duly
      authorized by all requisite corporate action by the Company and it
      constitutes a valid and binding obligation of the Company, enforceable
      against the Company in accordance with its terms, subject to the
      Enforceability Exceptions.

            (d) No Violations. The execution, delivery and performance by the
      Company of this Agreement, the Letter and each of the other Transaction
      Documents to which it is a party (including the issuance and sale of the
      Securities) and the compliance with the provisions hereof and thereof by
      the Company do not violate, conflict with or constitute or result in a
      breach of or default under (or an event which with notice or passage of
      time or both would constitute a default) or give rise to any right of
      termination, cancellation or acceleration under (i) the Certificate of
      Incorporation or bylaws of the Company, (ii) any applicable law, statute,
      rule or regulation, or any ruling, writ, injunction, order, judgment or
      decree of any court, arbitrator, administrative agency or other
      governmental body applicable to the Company or any of its properties or
      assets or (iii) any contract, indenture, mortgage, deed of trust, lease,
      agreement or other instrument (each a "Contract"), to which the Company is
      a party or by which the Company or any of its property is bound and which
      is required to be filed by the company with the SEC pursuant to Item
      601(b)(10) under Regulation S-K under the Securities Act, except, in each
      case, where such violation, conflict, breach, default, termination,
      cancellation or acceleration would not, individually or in the aggregate,
      have a Company Material Adverse Effect.
<PAGE>

                                      -9-

            (e) Approvals. Except consent which may be required under any
      Applicable Anti-Trust Law, no permit, authorization, consent, approval or
      order of or by, or any notification of or filing with, any person or
      entity (governmental or otherwise) is required in connection with the
      execution, delivery or performance of this Agreement or the other
      Transaction Documents (including the issuance and sale of the Securities
      and the issuance of the Underlying Shares assuming the accuracy of EIS's
      and EPIL's representations and warranties contained in this Agreement) by
      the Company, except where the failure to obtain such permit,
      authorization, consent, approval, order, notification or filing would not,
      individually or in the aggregate, have or reasonably be expected to have,
      a Company Material Adverse Effect, other than the filing of a Form D by
      the Company pursuant to Regulation D under the Securities Act ("Regulation
      D").

            (f) SEC Filings; Financial Statements. (i) The Company has timely
      filed with the SEC all forms, reports, schedules, statements, exhibits and
      other documents (collectively, the "SEC Filings") required to be filed by
      the Company during the three-year period prior to the date hereof. At the
      time filed, the SEC Filings, including without limitation, any financial
      statements, exhibits and schedules included therein or documents
      incorporated therein by reference, (A) did not contain any untrue
      statement of a material fact or omit to state a material fact required to
      be stated therein or necessary in order to make the statements therein, in
      light of the circumstances under which they were made, not misleading and
      (B) complied in all material respects with the applicable requirements of
      the Securities Act or the Securities Exchange Act of 1934, as amended, as
      the case may be.

            (ii) The Company's Form 10-K contains the audited consolidated
      financial statements of the Company at December 31, 2000 (the "Last Audit
      Date"), together with the reports and opinions thereon of Ernst & Young
      LLP (the "Audited Financial Statements"), and the Company's Form 10-Q
      contains the unaudited consolidated financial statements of the Company at
      March 31, 2001 (the "Unaudited Financial Statements" and, together with
      the Audited Financial Statements, the "Financial Statements"). The
      Financial Statements are accurate and complete and fairly present in all
      material respects the financial position of the Company and the results of
      its operations and its cash flows at such dates and for the periods
      indicated and were prepared in conformity with United States generally
      accepted accounting principles applied on a consistent basis throughout
      the periods indicated, subject, in the case of the Unaudited Financial
      Statements, to normal year-end audit adjustments. As of the Closing Date,
      the Company has not incurred and is not liable for any material
      liabilities or obligations except as set forth in the Financial Statements
      or Schedule 2(f), other than in connection with or as contemplated by the
      letter agreement dated as of June 29, 2001
<PAGE>

                                      -10-

      among the Company, Elan, EIS and EPIL (the "Letter of Intent") or the
      Transaction Documents.

            (g) Absence of Certain Events. Since the Last Audit Date, except as
      reflected in the Unaudited Financial Statements and except as contemplated
      by the Letter of Intent or the Transaction Documents or as set forth on
      Schedule 2(g) attached hereto, (A) the Company has not (I) made, paid or
      declared any dividend or distribution to any equity holder (in such
      capacity) or redeemed any of its capital stock, (II) entered into any
      financing, joint venture, license or similar arrangement that would limit
      or restrict its ability to perform its obligations hereunder and under
      each of the other Transaction Documents or (III) suffered or permitted to
      be incurred any liability or obligation against any of its properties or
      assets that would limit or restrict its ability to perform its obligations
      hereunder and under each of the other Transaction Documents; and (B) there
      has not been any change or development which has had, or could reasonably
      be expected to have, a Company Material Adverse Effect.

            (h) Properties and Assets; Etc. (i) All of the Company's trade
      secrets, inventions, patents, patent applications or continuations (in
      whole or in part), trademarks, trademark registrations, service marks,
      service mark registrations, copyrights, copyright registrations, or any
      application therefor or filing in respect thereof which are being licensed
      or otherwise contributed to Newco by the Company (collectively, and
      together with any and all know-how, trade secrets and proprietary business
      or technology information, the "Intellectual Property") are owned or
      licensed (which licenses constitute Material Contracts (as defined in
      clause (ii) below)) by the Company; none of the Company's rights in or use
      of the Intellectual Property has been or, to the Company's knowledge, is
      currently threatened to be challenged; to the Company's knowledge, without
      making any inquiry other than those, if any, routinely conducted by the
      Company in the ordinary course of business, no current or currently
      planned product based upon the Company's Intellectual Property would
      infringe any patent, trademark, service mark, trade name or copyright of
      any other person or entity issued or pending on the Closing Date if the
      Company were to distribute, sell, market or manufacture such products, and
      the Company is not aware of any actual or threatened claim by any person
      or entity alleging any infringement by the Company of a patent, trademark,
      service mark, trade name or copyright possessed by such person or entity.

            (ii) The material contracts and agreements of the Company are listed
      as exhibits to the Company's Form 10-K or the Company's Form 10-Q or as
      set forth on Schedule 2(h) (the "Material Contracts"); each Material
      Contract is a legal and valid agreement binding upon the Company and, to
      the Company's knowledge, is in full force and effect. To the Company's
      knowledge, there is no breach or default by any
<PAGE>

                                      -11-

      party thereunder except any such breach or default that has not had and
      could not reasonably be expected to have, individually or in the
      aggregate, a Company Material Adverse Effect.

            (i) Legal Proceedings, etc. Except as disclosed in the Company's
      Form 10-K or the Company's Form 10-Q, there is no legal, administrative,
      arbitration or other action or proceeding or governmental or investigation
      pending, or to the Company's knowledge, threatened against the Company, or
      any director, officer or employee of the Company in their capacities as
      such that (i) challenges the validity or performance of this Agreement,
      the Letter or the other Transaction Documents or (ii) could reasonably be
      expected to have a Company Material Adverse Effect.

            (j) Disclosure. The representations and warranties set forth herein
      and in the other Transaction Documents, when viewed collectively, do not
      contain any untrue statement of a material fact or omit to state any
      material fact necessary to make the statements contained herein not
      misleading in light of the circumstances in which they were made.

            (k) Brokers or Finders. There have been no investment bankers,
      brokers or finders used by the Company in connection with the transactions
      contemplated by the Transaction Documents and no persons or entities are
      entitled to a fee or compensation in respect thereof.

            SECTION 3. Representation and Warranties of EIS and EPIL. Each of
EIS and EPIL (each, an "Investor") hereby represents and warrants, severally but
not jointly, as to itself and not as to the other Investor, to the Company, as
of the date hereof, as follows:

            (a) Organization. Such Investor is duly organized, validly existing
      and, where applicable, in good standing under the laws of the jurisdiction
      of its organization and has all requisite corporate power and authority to
      own and lease its properties, to carry on its business as presently
      conducted and as proposed to be conducted and to consummate the
      transactions contemplated hereby. Such Investor, where applicable, is duly
      qualified as a foreign corporation and in good standing to do business in
      each jurisdiction in which the nature of the business conducted or the
      property owned by it requires such qualification, except where the failure
      to be so qualified would not, individually or in the aggregate, have a
      material adverse effect on the business, assets, liabilities (contingent
      or otherwise), operations, condition (financial or otherwise), or
      prospects of the Investors, as applicable (an "EIS Material Adverse
      Effect").

            (b) Authorization of Transaction Documents. Such Investor has full
      corporate power and authority to execute and deliver this Agreement and
      each of the other
<PAGE>

                                      -12-

      Transaction Documents to which it is a party, and to perform its
      obligations hereunder and thereunder. The execution, delivery, and
      performance by such Investor of this Agreement and each other Transaction
      Document to which it is a party (including the purchase and acceptance of
      the Securities) have been duly authorized by all requisite corporate
      action by such Investor and, when executed and delivered by such Investor,
      this Agreement and each of the other Transaction Documents to which it is
      a party will be the valid and binding obligations of such Investor, as
      applicable, enforceable against it in accordance with their respective
      terms, subject to the Enforceability Exceptions.

            (c) No Violation. The execution, delivery and performance by such
      Investor of this Agreement and each other Transaction Document to which it
      is a party (including the purchase and acceptance of the Securities) and
      compliance with provisions hereof and thereof by such Investor will not
      violate, conflict with or constitute or result in a breach of or default
      under (or an event which with notice or passage of time or both would
      constitute a default) or give rise to any right of termination,
      cancellation or acceleration under (i) the charter or bylaws of such
      Investor, (ii) any applicable law, statute, rule or regulation, or any
      ruling, writ, injunction, order, judgment or decree of any court,
      arbitrator, administrative agency or other governmental body applicable to
      such Investor or any of their properties or assets or (iii) any Contract
      to which such Investor is a party or by which such Investor or any of its
      property is bound, except, in each case, where such violation, breach,
      default, termination, cancellation or acceleration would not, individually
      or in the aggregate, have an EIS Material Adverse Effect.

            (d) Approvals. Except for consents which may be required under
      Applicable Anti-Trust Laws, no material permit, authorization, consent,
      approval or order of or by, or any notification of or filing with, any
      person or entity (governmental or otherwise) is required in connection
      with the execution, delivery or performance of this Agreement by such
      Investor or the other Transaction Documents to which it is a party.

            (e)  Investment Representations.

             (i) Such Investor is sophisticated in transactions of this type and
      capable of evaluating the merits and risks of the transactions described
      herein and in the other Transaction Documents to which it is a party, and
      has the capacity to protect its own interests. Such Investor has not been
      formed solely for the purpose of entering into the transactions described
      herein and therein and is acquiring the Securities (and the Underlying
      Shares) for investment for its own account, not as a nominee or agent, and
      not with the view to, or for resale, distribution or fractionalization
      thereof, in whole or in part, and no other person (other than EIS or its
      affiliates) has a direct or indirect interest,
<PAGE>

                                      -13-

      beneficial or otherwise in the Securities (or the Underlying Shares);
      provided, however, that such Investor shall be permitted to convert or
      exchange such Securities in accordance with their terms.

            (ii) Such Investor has not and does not intend to enter into any
      contract, undertaking, agreement or arrangement with any person or entity
      to sell, transfer or pledge the Securities (or the Underlying Shares),
      other than to an affiliate of such Investor in compliance with the
      Securities Act.

           (iii) Such Investor acknowledges its understanding that the private
      placement and sale of the Securities (and the Underlying Shares) is exempt
      from registration under the Securities Act. In furtherance thereof, such
      Investor represents and warrants that it is an "accredited investor" as
      that term is defined in Rule 501 of Regulation D under the Securities Act,
      has the financial ability to bear the economic risk of its investment, has
      adequate means for providing for its current needs and personal
      contingencies and has no need for liquidity with respect to its investment
      in the Company.

            (iv) Such Investor agrees that it shall not sell or otherwise
      transfer any of the Securities (or the Underlying Shares) without
      registration under the Securities Act, pursuant to Rule 144 (or any
      successor rule) under the Securities Act or pursuant to an opinion of
      counsel reasonably satisfactory to the Company that no violation of the
      Securities Act will be involved in such transfer, and fully understands
      and agrees that it must bear the total economic risk of its purchase for
      an indefinite period of time because, among other reasons, none of the
      Securities (or the Underlying Shares) have been registered under the
      Securities Act or under the securities laws of any applicable state or
      other jurisdiction and, therefore, cannot be resold, pledged, assigned or
      otherwise disposed of unless subsequently registered under the Securities
      Act and under the applicable securities laws of such states or
      jurisdictions or an exemption from such registration is available. Such
      Investor understands that the Company is under no obligation to register
      the Securities (or the Underlying Shares) on its behalf with the exception
      of certain registration rights with respect to certain of the Securities
      (and the Underlying Shares), as provided in the Company Registration
      Rights Agreement. Such Investor understands the lack of liquidity and
      restrictions on transfer of the Securities (and the Underlying Shares) and
      that this investment is suitable only for a person or entity of adequate
      financial means that has no need for liquidity of this investment and that
      can afford a total loss of its investment.

            (f) Legal Proceedings, etc. There is no legal, administrative,
      arbitration or other action or proceeding or governmental investigation
      pending, or to the knowledge
<PAGE>

                                      -14-

      of such Investor threatened, against such Investor that challenges the
      validity or performance of this Agreement or the other Transaction
      Documents to which such Investor is a party.

            (g) Brokers or Finders. There have been no investment bankers,
      brokers or finders used by such Investor or its affiliates in connection
      with the transactions contemplated by the Transaction Documents and no
      persons or entities are entitled to a fee or compensation in respect
      thereof.

            SECTION 4. Covenants of the Parties.

            (a) Certain Covenants. From and after the Initial Closing Date and
until the earlier to occur of the exercise or expiration of the Exchange Right
(as such term is defined in Section 5(c) hereof), the Company shall not without
the prior written consent of EIS: (i) sell, transfer, encumber, pledge or
otherwise affect, in any respect, the Exchange Shares (as defined in Section
5(c) hereof) transferable to EIS upon exercise by EIS of the Exchange Right; or
(ii) affect, in any respect, the Company's ability to permit EIS to exercise the
Exchange Right in full, as provided herein.

            (b) Fully-diluted Stock Ownership. (i) Notwithstanding any other
provision of this Agreement, in the event that EIS and EPIL shall have
determined that at any time they (together with their affiliates, if applicable)
hold or have the right to receive Common Stock (or securities or rights, options
or warrants exercisable, exchangeable or convertible for or into Common Stock)
representing in the aggregate in excess of 9.9% of the outstanding Common Stock
on a fully-diluted basis, each of EIS and EPIL shall have the right to elect to
convert all or any part of the Securities into other preferred, non-voting
securities of the Company (mutually satisfactory to the Company and EIS and/or
EPIL, as the case may be, but having terms no more favorable than the Securities
being so converted by EIS or EPIL, as the case may be) such that EIS, EPIL and
their affiliates will not directly or indirectly own more than 9.9% of the
Common Stock for a period of at least two years from the Initial Closing Date.
In the event that EIS or EPIL shall elect such conversion, EIS, EPIL and their
affiliates shall retain the right to transfer all or a portion of such
securities (including the Common Stock issuable upon conversion thereof) to
their respective affiliates, subject to compliance with applicable securities
laws. Each of the Company, EIS and EPIL shall use commercially reasonable
efforts to effect such transactions and any required subsequent conversions or
adjustments to the securities position of EIS and EPIL, on a quarterly basis,
within 15 business days of the end of each of EIS's and EPIL's fiscal quarters.

            (ii) The Company shall bear the fees and expenses in connection with
the first such conversion pursuant to the rights set forth in clause (i) above;
thereafter, EIS, EPIL or such applicable affiliate, as the case may be, shall
reimburse the Company for its reasonable
<PAGE>

                                      -15-

legal fees, expenses, filing fees and other reasonable documented costs and fees
in connection with carrying out each succeeding conversion pursuant to the
rights set forth in clause (i) above.

            (c) Use of Proceeds. The Company shall use the proceeds of (i) the
issuance and sale of the Series A Preferred Stock solely to meet its initial
capitalization obligations to Newco as described in the JDOA and (ii) the
Advances made in respect of the Note solely to make a substantially concurrent
Developmental Funding Contribution to Newco, as described Section 1(e) hereof,
and, in each case, for no other purpose.

            (d)  Confidentiality; Non-Disclosure.

             (i) Subject to clause (ii) below, from and after the date hereof,
neither the Company, EIS nor EPIL (nor their respective affiliates) shall
disclose to any person or entity this Agreement or the other Transaction
Documents or the contents thereof or the parties thereto, except that such
parties may make such disclosure (x) to their directors, officers, employees and
advisors, and potential bank creditors and investors, so long as they shall have
advised such persons of the obligation of confidentiality herein and for whose
breach or default the disclosing party shall be responsible or (y) as required
by applicable law, rule, regulation or judicial or administrative process,
provided that the disclosing party uses commercially reasonable efforts to
obtain an order or ruling protecting the confidentiality of confidential
information of the other party contained herein or therein and notifies the
other party prior to such disclosure so that such other party may, if it
chooses, seek such relief. The parties shall be entitled to seek injunctive or
other equitable relief in respect of any breach or threatened breach of the
foregoing covenant without the requirement of posting a bond or other
collateral.

            (ii) Prior to issuing any press release or public disclosure in
respect of this Agreement or the transactions contemplated hereby, the party
proposing such issuance shall obtain the consent of the other parties to the
contents thereof, which consent shall not be unreasonably withheld or delayed;
it being understood that if any such other party shall not have responded to
such consent request within three business days, such consent shall be deemed
given.

            (e) Further Assurances. From and after the date hereof, each of the
parties hereto agree to do or cause to be done such further acts and things and
deliver or cause to be delivered to each other such additional assignments,
agreements, powers and instruments, as each may reasonably require or deem
advisable to carry into effect the purposes of this Agreement and the other
Transaction Documents.
<PAGE>

                                      -16-

            (f) Qualification as a Foreign Corporation. The Company agrees to
use its best efforts to qualify as a foreign corporation authorized to do
business in the Commonwealth of Massachusetts as soon as is reasonably
practicable.

            SECTION 5.   Certain Rights of EIS.

            (a) Maintenance Right. Upon the granting of any Preemptive Rights by
the Company to any person other than EIS or an affiliate of EIS at any time from
the Initial Closing Date until the fourth anniversary of the Initial Closing
Date, the Company shall concurrently grant EIS the right (but not the
obligation) to participate in any issuance of Common Stock and any other equity
financing, any financing involving securities convertible or exchangeable for
equity, or any grant of options, warrants or other rights to purchase any Common
Stock of the Company or any security convertible, exchangeable or exercisable,
directly or indirectly, for or into Common Stock (collectively, "Common Stock
Equivalents"), in each case, consummated, or proposed to be consummated, by the
Company, on the same or monetarily equivalent terms and conditions offered to
the other proposed investors in such financing or recipient of such grant, in
order for EIS and its affiliates to maintain their pro rata, fully-diluted
interest in the Company, based on the number of shares of Common Stock owned by
EIS and its affiliates, assuming the conversion or exercise of all Common Stock
Equivalents (including, but not limited to, the Securities) and the actual
number of shares of Common Stock outstanding on the date such financing is
consummated (the "Maintenance Right"). If, in connection with such an issuance,
Common Stock or Common Stock Equivalents are to be issued and sold for
consideration other than cash, then the Board shall, in good faith, determine
the fair market value of such non-cash consideration, subject to EIS's
reasonable approval (provided that if EIS shall reasonably not approve such
valuation, the Company and EIS shall agree upon a third party appraiser who
shall determine the cash valuation of such non-cash consideration), and offer to
sell the subject Common Stock or Common Stock Equivalents as set forth herein
for the cash equivalent of such non-cash consideration. Notice of such a
proposed offering shall be given by the Company to EIS at least 20 days prior to
the closing of such financing (the "New Issue Notice") and shall state the
Company's bona fide intent to offer such securities, the number of securities to
be offered (a calculation of the number of shares of Common Stock into which
such Common Stock Equivalents may be convertible, exchangeable or exercisable,
directly or indirectly, for or into), and the price and terms, if any, upon
which it proposes to offer such securities. The Maintenance Right may be
exercised by EIS, in whole or in part, at any time within the 10 business day
period after receipt of the New Issue Notice by delivery to the Company of a
writing notifying the Company of such exercise. If the proposed offering of
securities is altered in any material respect, the Company shall send to EIS a
revised New Issue Notice and EIS shall respond thereto, each within a 10
business day period commencing upon receipt of such revised notice. If EIS
elects not to exercise the Maintenance Right, the Company may sell such
securities to the parties
<PAGE>

                                      -17-

set forth in the New Issue Notice, at any time after the applicable 10 business
day period, on terms no more favorable to the offerees than as set forth in the
New Issue Notice; provided that if such offering is not completed within 60 days
after the expiration of the applicable 10 business day period, such offering
shall again be subject to such Maintenance Right and the Company shall comply
with the terms of this Section 5(a). The Maintenance Right shall not apply to
any (i) offerings under employee option plans existing as of the date of grant
of the Maintenance Right or any employee option plans or agreements approved in
good faith by the Company's board of directors after the date of grant of the
Maintenance Right, (ii) asset or company acquisitions paid for in capital stock,
so long as, in each case, the primary purpose of such transaction is not the
raising of additional capital, (iii) issuances of securities pursuant to any
rights, agreements, options, warrants or other Common Stock Equivalents
outstanding as of the date of grant of the Maintenance Right (including the
issuance of securities to EIS as contemplated hereby), (iv) underwritten public
offerings, (v) issuances of securities in connection with any stock split, stock
dividend or recapitalization by the Company, (vi) issuances of securities in
connection with debt financing to banks or equipment lessors which, in the
aggregate and at any time outstanding, represent up to 1.0% of the outstanding
Common Stock and Common Stock Equivalents, collectively, on a fully diluted
basis, and (vii) issuances of securities in connection with any joint venture or
other licensing or partnering arrangements with a Strategic Investor (as defined
below) that has been approved in good faith by the Company's board of directors.
The Maintenance Right, or the right to be granted the Maintenance Right if not
then granted, shall terminate and be of no further force and effect upon the
earlier to occur of (x) such time as EIS's and its affiliates' collective
ownership interest in Common Stock and Common Stock Equivalents falls below 4%
on a fully-diluted basis and (y) the fourth anniversary of the Initial Closing
Date.

            The Company agrees that it will use its reasonable best efforts to
take such action, if any, required under the General Corporation Law of the
State of Delaware at the time of the grant of the Maintenance Right in order to
give effect to the preemptive rights of EIS under the Maintenance Right.

            A "Strategic Investor" means a person or entity investing in or
acquiring securities of the Company or Newco for strategic purposes such as an
investment made by a pharmaceutical company partner in connection with a
collaboration or issuance of securities of the Company to a university or
research organization in connection with a license or research arrangement with
the Company.

            (b) Conversion and Exchange Rights. The Certificate of Designations
sets forth certain rights of the holders of shares of Series A Preferred Stock
to convert such shares of Series A Preferred Stock into newly issued fully paid,
non-assessable shares of Common Stock, or to exchange such shares of Series A
Preferred Stock (or the shares of Common
<PAGE>

                                      -18-

Stock into which such shares of Series A Preferred Stock were converted under
certain specified circumstances) for the Newco Preference Shares issued to the
Company on the Initial Closing Date (or, if such Newco Preference Shares have
been converted by the Company pursuant to the terms thereof, the securities
issued upon such conversion and, in each case, including stock distributions and
dividends issued thereon, the "Exchange Shares") (the "Exchange Right"), and the
Company agrees that it will not knowingly take any action which would impair
such rights other than as otherwise permitted by the provisions thereof.

            If EIS elects to exercise the Exchange Right (as defined in the
Certificate of Designations), EIS shall, at its option, either

            (A) pay to the Company within 30 days of such exercise an amount
      equal to (x) 30.1% of the aggregate amount of the Development Funding (but
      not including any capitalized or accrued and unpaid interest on the Note)
      provided to Newco (by or on behalf of the Company and EIS and their
      respective affiliates and subsidiaries), (y) plus such amount, if any, of
      the Development Funding contributed to Newco by the Company as a result of
      a failure by EIS to provide its pro rata share of the Development Funding
      and (z) less such amount, if any, of the Development Funding contributed
      to Newco by EIS as a result of a failure by the Company to provide its pro
      rata share of the Development Funding (the sum of (x), (y) and (z) as a
      percentage of the Development Funding contributed to Newco, the
      "Make-Whole Percentage"), in each case, from and after the Initial Closing
      Date and immediately prior to such exercise; or

            (B) cause EPIL to surrender to the Company for cancellation all or a
      portion of the Note and/or, as appropriate, all or a portion of the shares
      of the Common Stock into which all or a portion of the Note may have been
      converted, with an aggregate principal amount equal to the Make-Whole
      Percentage of the aggregate amount of Development Funding (but not
      including any accrued and unpaid interest thereon) provided to Newco (by
      or on behalf of the Company and EIS and their respective affiliates and
      subsidiaries) from and after the Initial Closing Date and immediately
      prior to such exercise (to which EPIL hereby agrees); or

            (C) a combination of (A) and (B) above such that the sum equals the
      Make-Whole Percentage of the aggregate amount of Development Funding (but
      not including any capitalized or accrued and unpaid interest on the Note)
      provided to Newco (by or on behalf of the Company and EIS and their
      respective affiliates and subsidiaries) from and after the Initial Closing
      Date and immediately prior to such exercise.

            In the event of a Required Conversion (as defined in the Certificate
of Designations), the Common Stock delivered upon such conversion shall have the
benefit of the
<PAGE>

                                      -19-

Exchange Right identical to that with respect to the Series A Preferred Stock so
converted and shall be evidenced by a security substantially in the form of
Exhibit G.

            SECTION 6. Pledge of Exchange Shares. In order to secure the
Company's obligations pursuant to the Exchange Right, the Company hereby
pledges, assigns and sets over to EIS, all of the Company's right, title and
interest in and to all Exchange Shares deliverable by the Company upon exercise
of the Exchange Right for such period of time as the Exchange Right shall be
exercisable. The Company shall cause to be delivered to EIS all of the
certificates together with duly executed stock power in favor of EIS evidencing
such shares, and cause to be filed with the Secretary of State of the State of
Delaware an appropriate UCC-1 financing statement in respect of such pledge,
assignment or setting over, and take all other necessary, appropriate and
customary actions in connection therewith or otherwise reasonably requested by
EIS. Such pledge shall be governed by the applicable provisions of the UCC (as
defined below). Upon exercise of the Exchange Right, EIS shall be entitled to
keep and retain such share certificates, which shall then be owned by EIS in
accordance with the terms thereof. Until EIS exercises the Exchange Right, the
Company shall retain all rights in and to the pledged Exchange Shares (including
without limitation all voting, dividend, liquidation and other rights), subject
only to this pledge and the JDOA.

            For the purposes of this Section 6, the term "UCC" shall mean the
Uniform Commercial Code as in effect on the date hereof in the Commonwealth of
Massachusetts; provided that if by reason of mandatory provisions of law, the
perfection or the effect of perfection or non-perfection of the Security
Interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than Massachusetts, "UCC" means the Uniform
Commercial Code as in effect is such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.

            SECTION 7. Survival and Indemnification.

            (a) Survival. For the purposes of this Section 7, the
representations and warranties of the Company, EIS and EPIL contained herein
shall survive for a period of 24 months from and after the date hereof.

            (b) Indemnification. In addition to all rights and remedies
available to the parties hereto at law or in equity, the Company (in such
capacity, "Indemnifying Party") shall indemnify EIS, EPIL, their stockholders,
officers, directors and assigns, their affiliates, and their affiliates'
stockholders, officers, directors, employees, agents, representatives,
successors and assigns (collectively, the "Indemnified Persons"), and save and
hold each Indemnified Person harmless from and against and pay on behalf of or
reimburse each such Indemnified Person, as and when incurred, for any and all
loss, liability, demand, claim, action, cause of action, cost, damage,
deficiency, tax, penalty, fine or expense, whether or not arising out of any
claims by
<PAGE>

                                      -20-

or on behalf of such Indemnified Person or any third party, including interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid in
investigation, defense or settlement of any of the foregoing (including all
reasonable attorneys' fees and expenses incurred in connection with the
enforcement of this Section 7) (collectively, "Losses"), that any such
Indemnified Person may suffer, sustain incur or become subject to, as a result
of, in connection with, relating or incidental to or by virtue of:

            (i) any misrepresentation or breach of warranty on the part of the
      Indemnifying Party under Section 2 of this Agreement (it being understood
      that the Company shall not be responsible for any such misrepresentation
      or breach of warranty by Newco); or

            (ii) any non-fulfillment, default or breach of any covenant or
      agreement on the part of the Indemnifying Party under Section 4 or 6 of
      this Agreement;

provided that in each case such Losses must relate to, be in incurred in
connection with, or otherwise arise by virtue of, such Indemnified Person's
rights under, or status as a holder of, the Warrant, the shares of Common Stock
issued on the Initial Closing Date or the Note (or such shares of Common Stock
for or into which such Securities were exercised or converted).

            In the event that any claim or demand for which the Indemnifying
Party would be liable to any Indemnified Person hereunder is asserted against or
sought to be collected from such Indemnified Person by a third party, such
Indemnified Person shall notify the Indemnifying Party within a reasonable
period of time in writing of such claim or demand (provided that the failure to
provide such notice shall not release the Indemnifying Party of its obligation
under this clause (b) unless, and then only to the extent that, the Indemnifying
Party has been prejudiced by such failure to provide such notice). Unless or
until such time that, in such Indemnified Person's reasonable judgment after
consultation with counsel, there exists a conflict of interest between such
Indemnified Person and the Indemnifying Party with respect to such claim or
demand, the Indemnifying Party shall have the right (but not the obligation)
upon notice to such Indemnified Person, at the Indemnifying Party's sole cost
and expense, to defend the Indemnified Person against such claim or demand with
counsel reasonably satisfactory to the Indemnified Person; provided that so long
as the Indemnified Person is represented by such counsel, if such Indemnified
Person desires to participate in, but not control, any such defense or
settlement, it may do so at its sole cost and expense. The Indemnifying Party
shall not, without the prior written consent of such Indemnified Person, consent
to the entry of any judgment against such Indemnified Person or enter into any
settlement or compromise.

            (c) Maximum Recovery. Notwithstanding anything in this Agreement to
the contrary, in no event shall the Indemnifying Party be liable for
indemnification under this
<PAGE>

                                      -21-

Section 7 in an amount in excess of the aggregate of the purchase price paid for
the Common Stock, the Warrant and the Advances made and not repaid under the
Note. No Indemnified Person shall assert any such claim unless Losses in respect
thereof incurred by any Indemnified Person, when aggregated with all previous
Losses hereunder, equal or exceed U.S.$100,000, but at such time that an
Indemnified Person is entitled to assert a claim, such claim shall include all
Losses covered by this Section 7.

            (d) Investigation. All indemnification rights hereunder shall
survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, irrespective of any investigation, inquiry or
examination made for or on behalf of, or any knowledge of the Indemnified Person
or the acceptance of any certificate or opinion.

            (e) Contribution. If the indemnity provided for in this Section 7
shall be, in whole or in part, unavailable to any Indemnified Person, due to
Section 7(b) being declared unenforceable by a court of competent jurisdiction
based upon reasons of public policy, so that Section 7(b) shall be insufficient
to hold each such Indemnified Person harmless from Losses which would otherwise
be indemnified hereunder, then the Indemnifying Party and the Indemnified Person
shall each contribute to the amount paid or payable for such Loss in such
proportion as is appropriate to reflect not only the relative benefits received
by the Indemnifying Party on the one hand and the Indemnified Person on the
other, but also the relative fault of the Indemnifying Party and be in addition
to any liability that the Indemnifying Party may otherwise have. The indemnity,
contribution and expense reimbursement obligations that the Indemnifying Party
has under this Section 7 shall survive the expiration of this Agreement, the
Note and the Warrant. The parties hereto further agree that the indemnification
and reimbursement commitments set forth in this Agreement shall apply whether or
not the Indemnified Person is a formal party to any such lawsuit, claims or
other proceedings.

            (f) Limitation. This Section 7 is not intended to limit the rights
or remedies otherwise available to any party hereto with respect to this
Agreement or any other Transaction Document.

            SECTION 8. Notices. All notices, demands and requests of any kind to
be delivered to any party in connection with this Agreement shall be in writing
and shall be deemed to have been duly given if personally or hand delivered or
if sent by an internationally-recognized overnight delivery courier or by
registered or certified mail, return receipt requested and postage prepaid, or
by facsimile transmission addressed as follows:
<PAGE>

                                      -22-

             (i)  if to the Company, to:

                  Curis, Inc.
                  61 Moulton Street
                  Cambridge, Massachusetts  02138-1118
                  Attention:  Doros Platika, M.D., President and
                              Chief Executive Officer
                  Facsimile:  (617) 503-6501

                  with a copy to:

                  Cooley Godward LLP
                  4635 Executive Drive
                  San Diego, California  92121
                  Attention:  L. Kay Chandler, Esq.
                  Facsimile:  (858) 453-3555

         (ii)(a)  If to EIS, to:

                  Elan International Services, Ltd.
                  102 St. James Court
                  Flatts, Smiths Parish
                  Bermuda FL 04
                  Attention:  Chief Executive Officer
                  Facsimile:  441-292-2224

             (b)  If to EPIL, to:

                  Elan Pharma International Limited
                  Wil House
                  Shannon Business Park
                  Shannon
                  Co. Clare, Ireland
                  Attention:  Secretary
                  Facsimile:  011-353-61-362097
<PAGE>

                                      -23-

            with a copy, in the case of (ii)(a) or (b) above, to:

                  Cahill Gordon & Reindel
                  80 Pine Street
                  New York, New York  10005
                  Attention:  William M. Hartnett, Esq.
                  Facsimile:  (212) 269-5420

or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions of
this Section 8. Any such notice or communication shall be deemed to have been
effectively given (i) in the case of personal or hand delivery, on the date of
such delivery, (ii) in the case of an internationally-recognized overnight
delivery courier, on the second business day after the date when sent, (iii) in
the case of mailing, on the fifth business day following that day on which the
piece of mail containing such communication is posted and (iv) in the case of
facsimile transmission, the date of telephone confirmation of receipt.

            SECTION 9. Entire Agreement. This Agreement and the other
Transaction Documents contain the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings among the parties with respect thereto.

            SECTION 10. Amendments and Waiver. This Agreement may not be
modified or amended, or any of the provisions hereof waived, except by written
agreement of the Company and EIS dated after the date hereof.

            SECTION 11. Counterparts and Facsimile. The Transaction Documents
may be executed in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such counterparts together
shall constitute one agreement. Each of the Transaction Documents (other than
the Securities) may be signed and delivered to the other party by facsimile
transmission; such transmission shall be deemed a valid signature.

            SECTION 12. Headings. The section and paragraph headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of the Agreement.

            SECTION 13. Governing Law; Disputes. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to principles of conflicts of laws. Any dispute
under the Transaction Documents that is not settled by mutual consent shall be
finally adjudicated by any federal or state court
<PAGE>

                                      -24-

sitting in the City, County and State of New York, and each party consents to
the exclusive jurisdiction of such courts (or any appellate court therefrom)
over any such dispute.

            SECTION 14. Expenses. Except as provided in Section 7 hereof, each
of the parties shall be responsible for its own costs and expenses incurred in
connection with the transactions contemplated hereby and by the other
Transaction Documents.

            SECTION 15. Exhibits and Schedules. The exhibits to and schedules
delivered by or on behalf of any party in connection with this Agreement are an
integral part of this Agreement, and any statements contained in such schedules
shall be deemed to be representations and warranties under this Agreement.

            SECTION 16. Assignments. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. All or any part of this
Agreement may be assigned by EIS, EPIL and their permitted assigns to their
respective affiliates and subsidiaries, as well as any special purpose financing
or similar vehicle established by EIS or EPIL (provided that any such assignment
shall not relieve EIS or EPIL, as the case may be, of its obligations under this
Agreement). Other than as set forth above, no party shall assign all or any part
of this Agreement without the prior written consent of the other party;
provided, however, that no consent shall be required in connection with any such
transfer or assignment by a party to which the Transaction Documents relate
pursuant to a sale of all or substantially all of the assets of such party or
any consolidation, merger or reorganization of such party with or into any other
person where such other person is the survivor of such consolidation, merger or
reorganization.

            SECTION 17. Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be in any way affected or
impaired thereby.

                            [Signature page follows]
<PAGE>

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

                                    CURIS, INC.

                                    By:  /s/    Doros Platika, M.D.
                                         ----------------------------------
                                         Name:  Doros Platika, M.D.
                                         Title: President and Chief Executive
                                                Officer

                                    ELAN INTERNATIONAL SERVICES, LTD.

                                    By: /s/    Debra Moore Buryj
                                        -----------------------------
                                        Name:  Debra Moore Buryj
                                        Title: Vice President

                                    ELAN PHARMA INTERNATIONAL
                                        LIMITED

                                    By: /s/    Colin Sainsbury
                                        -----------------------------
                                        Name:  Colin Sainsbury
                                        Title: Authorized Signatory

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