Document:

Exhibit 10.25

 

LICENSE AGREEMENT*

 

This LICENSE AGREEMENT (hereinafter called “Agreement”) made and entered into this 29th day of June, 2006 (the “Effective Date”) by and between Eisai Co., Ltd., a corporation organized and existing under the laws of Japan, with its registered office at 6-10 Koishikawa 4-chome, Bunkyo-ku, Tokyo, 112-8088, Japan (hereinafter called “Eisai”) and Radius Health, Inc., with its registered office at 300 Technology Square, 5th Floor, Cambridge, MA 02139, U.S.A. (hereinafter called “Radius”).  Eisai and Radius are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

WITNESSETH THAT:

 

WHEREAS, Eisai has the exclusive rights to license all rights, titles and interests in certain patent applications identified in Appendix A hereto, and know-how relating to a compound known as SERM ER-306323;

 

WHEREAS, Radius desires to obtain certain licenses from Eisai under the aforementioned patent applications and know-how to develop, make and sell such compound in certain countries of the world;

 

WHEREAS, Eisai is willing to retain certain rights under the aforementioned patent applications and know-how to develop, make and sell such compound in Japan;

 

NOW, THEREFORE, in consideration of the covenants and obligations expressed herein, and intending to be legally bound the parties agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

As used in this Agreement and in the Appendices annexed to this Agreement and incorporated into it by reference, the following terms shall have the following respective meanings, and except as explicitly noted, each definition shall apply appropriately to the plural form of the word as well as to the singular:

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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1.1                                 “Affiliates” shall mean any corporation, firm, partnership or other entity which directly or indirectly owns, is owned by or is under common ownership with a Party to this Agreement to the extent of more than fifty (50) percent of the equity having the power to vote on or direct the affairs of any such corporation, firm, partnership, or other entity.

 

1.2                                 “Calendar Quarter” shall mean a consecutive three (3) months period, commencing on January 1, April 1, July 1, or October 1 of each Calendar Year.

 

1.3                                 “Calendar Year” shall mean a consecutive twelve (12) months period, commencing on January 1.

 

1.4                                 “Compound” shall mean the chemical compound known as SERM ER-306323, or any derivative or analog thereof.

 

1.5                                 “Develop” or “Development” shall mean all activities relating to preparing and conducting preclinical testing, toxicology testing, human clinical studies, regulatory affairs, manufacturing process development of Compound, and associated validation, quality assurance and quality control activities prior to the commercial sale of a Product licensed hereunder.

 

1.6                                 “Eisai Know-How” shall mean technical information and know-how which have been developed or are developed by or for Eisai and/or its Affiliates during the term of this Agreement which relate to Compound and/or Product and shall include all biological, chemical, pharmacological, toxicological, clinical, assay, control and manufacturing data, regulatory filing dossier and other information useful for development or commercialization of Compound and/or Product. Eisai Know-How also includes inventions owned solely by Eisai in accordance with Article 6.4.

 

1.7                                 “Eisai Patents” shall mean all patents and patent applications which are or become owned by Eisai and/or its Affiliates, or to which Eisai and/or its Affiliates, otherwise have, now or in the future, the right to grant licenses, and which generically or specifically claim Compound and/or Product, a use for Compound and/or Product, a process for manufacturing Compound and/or 

 

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Product, or an intermediate use in such process.  Included within the definition of Eisai Patents are all continuations, continuations-in-part, divisions, patents of addition, reissues, re-examinations, renewals or extensions thereof and all Supplementary Protection Certificates.  Also included within the definition are any improvements on Compound and/or Product or intermediates or manufacturing process required or useful for production of Compound and/or Product which are developed by or for Eisai and/or its Affiliates, or to which Eisai and/or its Affiliates otherwise has the right to grant licenses, now or in the future, during the term of this Agreement.  The current list of patent applications and patents encompassed within the Eisai Patents is set forth in Appendix A attached hereto and incorporated herein by reference. Eisai Patents also includes any patent application covering an invention solely owned by Eisai in accordance with Article 6.4.

 

1.8                                 “Joint Patents” has the meaning set forth in Article 6.9.

 

1.9                                 “Net Sales” shall mean, with respect to any Product, the gross invoiced sales of Product by Radius, its Affiliates and their respective sublicensees to unrelated third parties (in each case, who are not sublicensees) in the Territory for the sale or transfer for value of the applicable Product, less the following deductions to the extent included in the gross invoiced sales price for Product or otherwise directly paid or incurred by Radius, its Affiliates or their respective sublicensees with respect to the sale of Product:

 

(i)            discounts, credits, rebates, allowances, adjustments, rejections, recalls and returns;

 

(ii)           price reductions or rebates, retroactive or otherwise, imposed by government authorities;

 

(iii)          sales, excise, turnover, value-added, and similar taxes assessed on the royalty-bearing sale of Product (but excluding Radius net income taxes);

 

(iv)          transportation, importation and insurance directly chargeable to the royalty-bearing sale of Product; and

 

(v)           chargebacks granted to drug wholesalers based upon sales to their customers where there are no direct shipments to such customers by Radius.

 

The amounts of any deductions taken pursuant to clauses (i)-(v) shall be 

 

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determined from books and records maintained in accordance with GAAP.

 

In the event that the Product is sold in a finished dosage form containing the Compound in combination with one or more other clinically active components (a “Combination Product”), the Net Sales of the Product, for the purposes of determining payments, shall be determined by multiplying the Net Sales (as defined above) of the Combination Product by the fraction A/(A+B), where:  A is the weighted ([*]) average sale price in a particular country of the Product when sold separately in finished form, and B is the weighted average sale price in that country of the other clinically active component(s) sold separately in finished form, in each case during the applicable royalty reporting period or, if sales of both the Product and all other clinically active components did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred.

 

In the event that such average sale price cannot be determined for both the Product and all other clinically active components in the Combination Product, then Net Sales for the purposes of determining royalty payments shall be calculated by multiplying the Net Sales of the Combination Product by the fraction of C/C+D, where:  C is the fair market value of the Product, and D is the fair market value of all other clinically active components included in the Combination Product.

 

In such event, Radius shall in good faith make a determination of the respective fair market values of the Product and the other clinically active components included in the Combination Product, and shall notify Eisai of such determination and provide Eisai with data to support such determination.  Eisai shall have the right to review such determination and supporting data, and to notify Radius if it disagrees with such determination.  If Eisai does not agree with such determination and if the Parties are unable to agree in good faith as to such respective fair market values, then such matter shall be resolved using the procedure specified in Article 14.

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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1.10                           “Planned Indication” shall mean indication for either [*] or [*].

 

1.11                           “Product” shall mean any pharmaceutical drug in final packaged form containing Compound, the development, manufacture, use or sale of which, absent the licenses granted to Radius under Article 2.1, would infringe the Eisai Patents or which make use of any Joint Patents.

 

1.12                           “Production Cost” shall mean the production cost of bulk substance of the Compound with respect to Section 5.1 and shall mean the production cost of Semi-Product with respect to Section 5.2, which shall be calculated in accordance with United States Generally Accepted Accounting Principles, consistently applied and shall include, if and to the extent applicable, (b) the [*] cost of manufacturing Products manufactured by or for Radius, including the cost of [*], [*] and [*] utilized in such manufacturing (including [*], as applicable) plus factory overhead costs allocated to the Product in accordance with normal accounting practices for all products manufactured in the applicable facility.

 

1.13                           “Radius Patents” shall mean all patents and patent applications which are or become owned by Radius and/or its Affiliates, or to which Radius and/or its Affiliates, otherwise have, now or in the future, the right to grant licenses, and which generically or specifically claim Compound and/or Product, a use for Compound and/or Product, a process for manufacturing Compound and/or Product, or an intermediate use in such process.  Included within the definition of Radius Patents are all continuations, continuations-in-part, divisions, patents of addition, reissues, re-examinations, renewals or extensions thereof and all Supplementary Protection Certificates.  Also included within the definition are any improvements on Compound and/or Product or intermediates or manufacturing process required or useful for production of Compound and/or Product which are developed by or for Radius and/or its Affiliates, or to which Radius and/or its Affiliates otherwise has the right to grant licenses, now or in the future, during the term of this Agreement. Radius Patents also includes any patent application covering an invention 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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solely owned by Radius in accordance with Article 6.4.

 

1.14                           “Radius Know-How” shall mean technical information and know-how which have been developed or are developed by or for Radius and/or its Affiliates during the term of this Agreement which relate to Compound and/or Product and shall include all biological, chemical, pharmacological, toxicological, clinical, assay, control and manufacturing data, regulatory filing dossier and other information useful for development or commercialization of Compound and/or Product. Radius Know-How also includes inventions owned solely by Radius in accordance with Article 6.4.

 

1.15                           “Semi-Product” shall mean any pharmaceutical drug in semi-manufactured form containing Compound.

 

1.16                           “Supply Price” shall mean Production Cost plus [*] ([*]) percent.

 

1.17                           “Territory” shall mean worldwide except Japan.

 

1.18                           “Valid Claim” shall mean (i) an unexpired claim of an issued patent that has not been disclaimed, revoked or held to be invalid or unenforceable by a court or other authority of competent jurisdiction, from which decision no appeal can be further taken; or (ii) a claim of a pending patent application which is less than [*] ([*]) years old (measured from the original filing date) and that has not been the subject of a rejection notice from which an appeal cannot be taken or in respect of which the applicable period of appeal has expired.  In this Article 1.18, “original filing date” shall mean the filing date of a non-provisional patent application from which the ending of the patent term of such patent application is calculated.

 

ARTICLE 2

 

LICENSES

 

2.1                                 Eisai hereby grants Radius, an exclusive license, under Eisai Patents and Eisai

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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Know-How and Eisai’s undivided interest in Joint Patents, during the term of this Agreement, within the Territory, to research, Develop (to the extent permitted in this Agreement), have Developed, make, have made, use, promote, market, distribute, offer for sale, sell, have sold, import, export and otherwise commercialize the Compound and/or Product.  If Radius indicates that it wishes to Develop Combination Product, Radius shall have prior written approval of Eisai which shall not be unreasonably withheld.  The license under this Article 2.1 includes the right to grant sublicenses (without the right of such sublicensees to grant further sublicenses); provided that: (a) with respect to any sublicensee (excluding any contract research organization, contract manufacturer or other contractor of Radius granted rights solely for use on behalf of Radius) of the rights to research, Develop, have Developed, make, have made, use, promote, market, distribute, offer for sale, sell, have sold, import, export or otherwise commercialize the Product, Radius shall have prior written approval of Eisai before granting such sublicense which approval shall not be unreasonably withheld, or delayed with such determination being made with reference to the following criteria with respect to the sublicensee: (1) whether such sublicensee has the financial resources to assume the obligations of Radius with respect to the rights that are the subject of the sublicense; and (2) whether such sublicensee has personnel with skill and experience adequate to perform the obligations of Radius that are the subject of the sublicense.  It is understood and agreed that Eisai may withhold such approval if (a) such sublicensee has any material and active litigations with Eisai; or (b) such sublicensee is a Japanese pharmaceutical company.  Eisai shall have [*] ([*]) business days to notify Radius whether it is granting or withholding its approval after Radius submits the identity of the proposed sublicensee and a summary of the material terms of the proposed sublicense agreement to Eisai, and if Eisai does not provide such notice within such [*]-business day period, Eisai shall be deemed to have granted its approval; (b) Radius obtains each sublicensee’s written agreement to be subject to the same obligations as is Radius under the relevant terms of this Agreement (including Articles 6.1, 8.5, 9.5 and 11.1); (c) Radius shall remain responsible for the performance of all of its obligations under this Agreement, whether such obligations are performed 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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by Radius, its Affiliates or any of its sublicensees;  (d) Radius shall pay Eisai [*] percent ([*]%) of upfront and milestone payments received from its sublicensees pursuant to Article 4.1; and (e) Eisai will retain a first negotiation right for all Asian countries set forth in Appendix B in the event that Radius wishes to find a partner for the Product solely for Asia.  For purposes of offering Eisai the right of first negotiation, Radius will provide Eisai with written notice.  Eisai shall within [*] ([*]) days from its receipt of such written notice notify Radius, in writing, whether it will exercise the right of first negotiation.  If Eisai indicates that it wishes to exercise such right, then the parties shall promptly engage in good faith negotiation of terms for a license agreement for Asian countries.  If the parties cannot negotiate mutually acceptable terms for an agreement within [*] ([*]) days following Eisai’s notice, and the parties are not willing to extend the period for negotiation, then Eisai’s right shall expire with respect to such opportunity and Radius may negotiate with a third party concerning such opportunity; provided, however, that any such agreement shall contain terms that are in the aggregate no less favorable to Radius than those last offered to Eisai.  No license is granted with respect to activities of Radius outside of the purposes as expressly provided in this Article 2.1.  Radius shall provide to Eisai a fully signed copy of all sublicense agreements, within [*] ([*]) days of executing the same.

 

2.2           Radius hereby grants Eisai, an exclusive license, under Radius Patents and Radius Know-How and Radius’ undivided interest in Joint Patents, without compensation, during the term of this Agreement, within Japan, to research, Develop, have Developed, manufacture, use, promote, market, distribute, offer for sale, sell, have sold, import and otherwise commercialize the Compound and/or Product.  The exclusive license set forth in the preceding sentence shall become non-exclusive and perpetual after the term of this Agreement.

 

2.3           It is acknowledged and agreed that Radius will use its trademark for Product in the Territory and will grant Eisai an exclusive license to use such trademark for Product in Japan without compensation during the term of this Agreement, but subject to Eisai’s compliance with the applicable Radius trademark usage

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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guidelines (to be provided to Eisai at the time the trademark is adopted by Radius in final format) and subject to Eisai’s compliance with the applicable Product approvals.  Eisai acknowledges that all right, title and interest in and to Radius’ trademarks, including all goodwill related thereto, are and shall remain owned solely and exclusively by Radius and that all usage of Radius’ trademarks by or on behalf of Eisai shall inure to the benefit of Radius.  The exclusive license set forth herein shall continue to be effective after the term of this Agreement, provided that Eisai will pay Radius royalty for such license of the trademark which amounts [*] percent ([*]%) of the net sales of the Product in Japan until such trademark expires in Japan.

 

ARTICLE 3

 

PRODUCT DEVELOPMENT

 

3.1           Radius shall, at its own expense, carry out all necessary pre-clinical and clinical studies related to Compound and/or Product required by the relevant authorities throughout the Territory to achieve Product registration for the Product in those countries within the Territory for which Radius believes it should obtain registrations for Product in at least the United States, the United Kingdom, France, Germany, Italy and Spain.  Radius shall use all its commercially reasonable efforts in developing Compound and/or Product in the Territory in accordance with its normal practices and procedures for pharmaceutical compounds having similar technical and commercial potential (taking into account issues of safety, efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the product, the regulatory structure involved and profitability) and for which it has similar rights.

 

3.2           Radius shall use all its commercially reasonable efforts to obtain regulatory approvals for Product in the Territory as required for the manufacture, importation, marketing, promotion, pricing and sale of the Product(s) in those countries in the Territory where Radius seeks to market and sell Products.  Attainment and maintenance of regulatory approvals for Product in the

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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Territory shall be carried out by Radius.  Radius shall bear all other expenses which it incurs in the attainment and maintenance of regulatory approvals and price registration activities in the Territory.  Radius shall keep Eisai fully apprised of the status of regulatory approvals and price registrations in the Territory when it files for such approvals and when it receives such approvals.

 

3.3           The Parties intend and agree that the Development and commercialization of Products in the Territory shall be Radius’s responsibility and that Radius shall have full responsibility for, and control of, pre-clinical and clinical development and commercialization of Products in the Territory, including the authority to make all decisions, and undertake any actions necessary as a result of such decisions, regarding preclinical and clinical development plans and filing INDs and BLAs.  Notwithstanding the foregoing, Radius shall provide Eisai the opportunity to provide input and suggestions into matters relating to the Development of Products, and Radius shall not unreasonably refuse to consider such input and suggestions.

 

3.4           Attached as Appendix C is a plan detailing Radius’ projected activities to Develop Products in the Territory (the “Development Plan”).  On or before each anniversary of the Effective Date, Radius shall update, revise and present to Eisai the Development Plan during the term of this Agreement prior to establishment of the SC (as defined in Article 3.5).  Eisai shall comment upon each version of the Development Plan within [*] ([*]) days including whether it believes that the performance of the Development Plan is consistent with Radius’ obligations to use its commercially reasonable efforts in Developing Compound and/or Product in the Territory. After establishment of the SC, Radius shall update, revise and present to the SC the Development Plan and Eisai may comment upon each version of the Development Plan via its participation in the SC and at the next meeting of the SC.  If Eisai indicates that it does not believe performance of the Development Plan is consistent with Radius’ obligations to use its commercially reasonable efforts in Developing Compound and/or Product in the Territory, Eisai shall identify the actions or conduct that it would consider to be an acceptable remediation of

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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such inconsistency.  Radius shall have [*] ([*]) days to deliver to Eisai a plan for remediation of such inconsistency as rapidly as practicable.  Following delivery of such plan, Radius shall use commercially reasonable efforts to carry out the plan and cure the inconsistency.  If Radius fails to deliver a plan for remediation within the [*]-day period, or (ii) Radius fails to carry out the corrective plan or actions in accordance with such plan, Eisai may terminate this Agreement pursuant to Article 7.3.

 

3.5           Radius shall give a written report to Eisai on a quarterly basis with respect to the progress on the pre-clinical and clinical portions of the Development of Products in the Territory from the Effective Date.  If Eisai notifies Radius of its intent to Develop Products in Japan, within [*] ([*]) days of the date of the notice, the Parties will establish a Joint Steering Committee (the “SC”) to review progress on the pre-clinical and clinical portions of the Product Development contemplated by this Agreement. The purpose of the SC is to facilitate the exchange of information and the coordination between the Parties relating to the Development of Products, and to serve as a forum for Radius to keep Eisai updated with regard to the Development of Products in the Territory and Eisai to keep Radius updated with regard to the Development of Products in Japan (in the form of summaries of the Development plan, clinical design and strategy, etc.).  The SC will be composed of two representatives of each Party, who shall be appointed (and may be replaced at any time) by such Party on written notice to the other in accordance with this Agreement.  The SC will meet at least twice per year, or at any other frequency agreed by the SC.  The first meeting of the SC shall be held within [*] ([*]) days after establishing the SC.  Meetings may be held by telephone or video conference.  Minutes of all meetings of the SC shall be prepared by Radius within [*] ([*]) days after each meeting.

 

3.6           The quorum for SC meetings shall be two (2) members, provided there is at least one member from each of Eisai and Radius is present.  The SC will render decisions by unanimous vote.  Disagreements among the SC regarding the Program will be resolved via good-faith discussions; provided, that in the 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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event of a disagreement or deadlock that cannot be resolved within [*] ([*]) days after the date on which the disagreement arose, Radius shall have the right to cast the tiebreaking vote and resolve the matter in the Territory and Eisai shall have the right to cast the tiebreaking vote and resolve the matter in Japan.

 

ARTICLE 4

 

PAYMENT

 

4.1           In consideration for the licenses set forth Article 2 herein, Radius shall pay Eisai the following nonrefundable milestone payments, regardless of whether or not Radius has sublicensed any of its rights under this Agreement:

 

	
Execution of this Agreement
    	
 
    	
US$[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Acceptance of IND submission
    	
 
    	
US$[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
the first Phase I completion
    	
 
    	
US$[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
the first Phase II completion
    	
 
    	
US$[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
the first Phase III completion
    	
 
    	
US$[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
US NDA approval for Planned Indication
    	
 
    	
US$[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
EMEA marketing approval for Planned Indication 
    	
 
    	
US$[*].
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
each US NDA approval for indication other than   Planned Indication
    	
 
    	
US$[*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
each EMEA marketing approval for indication other   than Planned Indication
    	
 
    	
US$[*]
    	
 
    

 

Each milestone payment shall be due and payable within [*] ([*]) days after the achievement of the applicable milestone. The milestones shall be due only for the [*] Product that achieves the milestone regardless of the number of Products that achieve such milestone; provided, that if the [*] Product does not achieve any milestone(s), such non-achieved milestones shall be paid on any subsequent Product that achieves such milestone.

 

In addition, in the event that Radius grants the sublicenses to any third parties pursuant to Article 2, in consideration for the sublicenses set forth Article 2 herein, Radius shall pay Eisai [*] percent ([*]%) of upfront and 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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milestone payments received from such third parties within [*] ([*]) days after the receipt of such milestone payments.

 

All payments shall be paid by wire transfer of funds to an account at Eisai’s designated bank in Tokyo, and shall be paid in US dollars.

 

4.2           As consideration for the license under Eisai Patents and Eisai Know-How granted to Radius hereunder, Radius shall pay Eisai a royalty on Net Sales of the Product in the Territory as follows:

 

	
Portion   of aggregate annual Net Sales
    	
 
    	
Royalty Rate
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less than US$ [*]
    	
 
    	
[*]
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Not less than US$ [*] and less than US$ [*]
    	
 
    	
[*]
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Not less than US$ [*]
    	
 
    	
[*]
    	
%.
    

 

All royalties payable pursuant to this Article 4.2 shall be payable within [*] ([*]) days after the end of each Calendar Quarter based upon Net Sales of the Product in the Territory for such Calendar Quarter.  Net Sales of the Product for purposes of determining the applicable royalty rate for each unit of Product Sold in any Calendar Quarter will be calculated on a calendar year basis, with the aggregate Net Sales being reset to zero on January 1 of each year for sales during the following 12-month period.

 

4.3           Radius’ obligation to make royalty payments pursuant to Article 4.2 shall be reduced by [*] ([*]) percent of the otherwise applicable royalty rate under Article 4.2 in any country in the Territory with respect to the Product at such time as the last remaining Valid Claim in Eisai Patents expires, lapses or is invalidated in such country and the Product is not protected by data protection clauses.  In addition, Radius’ obligation to make royalty payments pursuant to Article 4.2 shall be reduced to [*] ([*]) in any country in the Territory with respect to the Product at such time as the last remaining Valid Claim in Eisai Patents expires, lapses or is invalidated in such country, the Product is not covered by data protection clauses and the sales of lawful generic version of the

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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Product account for [*] percent ([*]%) or more of the total sales of all pharmaceutical products containing Compound (including the Product) in such country during a Calendar Quarter.  Radius shall notify Eisai if Radius believes either of the adjustments specified in this Article 4.3 are applicable in a country within the Territory; if Eisai disputes Radius’ characterization of a country as one in which an Article 4.3 adjustment applies, the Parties shall resolve such matter in accordance with Article 14. The Net Sales in a country subject to an Article 4.3 adjustment shall be deducted from the Net Sales amount in Article 4.2 for the applicable Calendar Quarter(s).

 

4.4           Radius shall keep for at least three (3) years following the end of the calendar year to which they pertain complete and accurate records in sufficient detail to enable the royalties due to Eisai and Radius’ actual Production Cost to be determined.  Such records shall be prepared in accordance with Radius’ standard procedures.  Upon the request of Eisai, Eisai shall have the right, through an independent certified public accountant, to examine such records with respect to Net Sales and Radius’ actual Production Cost.  Radius shall permit independent certified public accountants selected by Eisai and reasonably acceptable to Radius to examine such books and records upon reasonable notice during normal working hours, for the purpose of verifying the reports, accountings and payments hereunder. Such examination right shall not be exercised more than once in any calendar year nor more than once in respect to any given payment period.  Eisai agrees to hold in confidence all information concerning royalty payments and reports, and all information learned in the course of any audit or inspection, except to the extent necessary for Eisai to reveal such information in order to enforce its rights under this Agreement or if disclosure is required by law, regulation or judicial order. Such independent accountants shall agree in writing with Eisai to treat all records reviewed in the course of the audit or inspection as the confidential information of Radius and shall not disclose to Eisai any other data or other confidential information of Radius.  The opinion of such independent accountants regarding such reports, accountings and payments shall be binding on the Parties hereto.  The fees and expenses of the independent accountants shall 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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be paid by Eisai, except that if the opinion of the independent accountants shows that less than [*] ([*]) percent of the amounts of the royalties due to Eisai has been reported and paid, or that Supply Price of bulk Compound or the Semi-Product is substantially different from Radius’ actual Production Cost plus [*] ([*]) percent, such fees and expenses shall be paid by Radius.

 

4.5           All royalties shall be paid by wire transfer of funds to an account at Eisai’s designated bank in Tokyo, and shall be paid in US dollars.

 

4.6           Except for income taxes that may be assessed against Eisai, all payments by Radius to Eisai under Articles 4.1-4.3 of this Agreement shall be made without deduction for or on account of any tax or all tax.  All taxes in respect of payments under this Agreement shall be for the account of Radius, and will be borne and paid by Radius prior to the date on which penalties apply.  If Radius is compelled by law to make payment subject to any tax and Eisai does not actually receive on the due date a net amount equal to the full amount provided under this Agreement, Radius shall pay all necessary additional amounts to ensure receipt by Radius of the full amount so provided for under Articles 4.1-4.3, as applicable. The Parties will cooperate to minimize, to the extent legally permissible, the tax liabilities related to this Agreement.  Notwithstanding the foregoing, such cooperation shall not cause any adverse tax consequences to be incurred by either Party which would not have been incurred under the provisions of this Agreement, including this Article 4.6.

 

ARTICLE 5

 

PRODUCT SUPPLY

 

5.1           In the event that Eisai notifies Radius of its desire to purchase bulk substance of Compound from Radius, Radius shall supply Eisai with all amount of such bulk substance of Compound, which meets specifications for the Product determined by Radius in the course of its Development activities pursuant to this Agreement, required by Eisai for commercial sales of Product in Japan With respect to Eisai clinical development activities for Product in Japan, upon Eisai’s request, Radius shall supply Eisai the bulk substance of Compound for

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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the conduct of the Eisai Development activities in the amounts and at the times determined by the SC, having reference to the quantity of the bulk substance of Compound required for clinical trials in Japan.  Radius shall charge [*] for applicable bulk substance of Compound.  Radius shall ship such bulk substance of Compound, FOB point of manufacturing.

 

5.2           In the event that Eisai notifies Radius of its desire to purchase Semi-Product from Radius which meets specifications determined by Radius in the course of its Development activities pursuant to this Agreement, Radius shall supply Eisai with all amount of Semi-Product required by Eisai for commercial sales of Product in Japan.  With respect to Eisai clinical development activities for Product in Japan, upon Eisai’s request, Radius shall supply Eisai Semi-Product for the conduct of the Eisai Development activities in the amounts and at the times determined by the SC, having reference to the quantity of Semi-Product required for clinical trials in Japan.  Radius shall charge [*] for Semi-Product.  Radius shall ship such Semi-Product, FOB point of manufacturing.

 

5.3           The Parties agree that they shall, in good faith, discuss, negotiate and execute necessary agreements containing mutually acceptable terms, including but not limited to, a supply agreement for either bulk substance of Compound or Semi-Product as well as a quality control agreement of either bulk substance of Compound or Semi-Product, in the event that Eisai notifies Radius as set forth in Article 5.1 or 5.2.

 

5.4           As manufacturer of the Product, Radius shall be responsible for:  (a) the control of the quality of the Product promoted and sold under the Radius trademarks; as provided in Article 2.3; and (b) ensuring that all bulk substance of Compound or Semi-Product supplied to Eisai pursuant to this Article 5 shall be manufactured in accordance with the applicable good manufacturing practices (GMP) and shall meet the then applicable specifications for the bulk substance of Compound or Semi-Product; and Radius warrants that all bulk substance of Compound or Semi-Product supplied to Eisai pursuant to this Article 5 shall be manufactured in accordance with the applicable GMP and 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

16

 

shall meet the then applicable specifications for the bulk substance of Compound or Semi-Product and will be free from defects in material and workmanship. Radius shall resolve any product liability issues in the Territory relating to the Product and shall resolve any product liability issues in Japan relating to the Product or the bulk substance of Compound or Semi-Product, as the case may be, supplied to Eisai pursuant to this Article 5 in the event and to the extent related to a breach of the warranty set forth in Article 5.4(b) at its own expense and subject to Article 5.5.

 

5.5           Radius’ obligations with respect to product liability in the Territory and Japan shall include the following responsibilities, each to be taken at Radius’ expense:

 

(a)  Radius shall report, at its expense, to appropriate authorities, in accordance with local requirements, all adverse events related to use of the Product in the Territory or Japan.  Eisai shall provide to Radius, upon Radius’ request, reasonable assistance in connection with the reporting of all of adverse events, responding to safety queries and assessing safety issues, in each case, to the extent related to the Product in Japan.  Adverse events shall be recorded in a single, centralized database, which shall be held and owned by Radius.  Radius will provide, upon request by Eisai, any safety information in Radius’ control and reasonably required by Eisai in connection with the development and commercialization of the Product in Japan and all reasonable assistance in responding to safety queries related to the Product and in assessing safety issues related to the Product in Japan.  Details of safety reporting activities relating to the Product will be addressed in a pharmacovigilance contract, which the Parties shall enter into after the Effective Date.

 

(b)  In the event that (i) Radius determines that an event, incident, or circumstance may result in the need for a recall or other removal of the Product or any lot or lots thereof from the market; (ii) any regulatory authority in the Territory threatens to remove a Product from the market; or (iii) any regulatory authority in the Territory requires distribution of a “Dear Doctor” letter or its equivalent regarding the use of Product, Radius shall promptly advise Eisai in writing, and shall provide Eisai with copies of all relevant correspondence, notices and the like.  Notwithstanding anything the contrary herein, Radius shall have final authority to make all decisions relating to any

 

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recall, market withdrawal or other corrective action with respect to the Product in the Territory. After establishing SC pursuant to Article 3.5, all decisions relating to any recall, market withdrawal or other corrective action with respect to the Product shall be decided by the SC as set forth in Article 3.6; provided that in the event that the Parties take different positions with respect to recall, market withdrawal or other corrective action with respect to the Product, then Radius shall have the right to cease supplying bulk substance of Compound or Semi-Product to Eisai for Japan if, after good faith discussions with Eisai, Radius reasonably believes that that continued supply to Eisai exposes Radius to liability as a result of its decision with respect to the Territory.  If Radius elects to cease supply, it will terminate supply in an orderly manner, as soon as practical and in accordance with a schedule agreed to by Eisai and Radius.  In the event of a recall, market withdrawal or other corrective action with respect to the Product in Japan, and at Radius’ request, Eisai shall provide reasonable assistance to Radius, at Radius’ cost and expense, in conducting any such recall, market withdrawal or other corrective action with respect to the Product in Japan.

 

5.6           THE WARRANTY IN SECTION 5.4(b) IS IN LIEU OF ANY OTHER WARRANTY WITH RESPECT TO THE PRODUCT, BULK SUBSTANCE OF COMPOUND OR SEMI-PRODUCT SUPPLIED BY RADIUS HEREUNDER, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL (INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE).

 

ARTICLE 6

 

PATENTS AND KNOW-HOW

 

6.1           This Agreement does not convey to Radius any rights in any Eisai Know-How or Eisai Patents by implication, estoppel or otherwise except for the rights expressly granted in Article 2.1 and Article 6.  Sole and excusive title to all Eisai Know-How and Eisai Patents shall at all times remain vested in Eisai. This Agreement does not convey to Eisai any rights in any Radius Know-how or Radius Patents by implication, estoppel or otherwise except for the rights expressly granted in Article 2.3 and Article 6 and Article 8.3.  Sole and exclusive title to all Radius Know-How and Radius Patents shall at all times remain vested in Radius.

 

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6.2           Notwithstanding the Article 6.1 above, Eisai and Radius shall share all preclinical and clinical data, including safety data post-approval.  All such data generated by Radius shall be owned by Radius; provided that Eisai can access and use such data which Eisai reasonably deems to be necessary for the registration of the Product in Japan without compensation.  All such data generated by Eisai in Japan shall be owned by Eisai; provided that Radius can access and use such data without compensation.

 

6.3           Each Party shall promptly notify the other of any invention made by its employees, agents or independent contractors regarding (i) Compound (including, without limitation, intermediates and prodrugs), (ii) new form, use, manufacture, composition of Compound (including intermediates and prodrugs), or (iii) any improvements on Compound and/or Product.  Each Party shall not take any steps with respect to filing such invention before the ownership of such invention is determined by the Parties through good faith consultation using the procedure set forth in Article 6.4.

 

6.4           Upon the notice as provided in Article 6.3, the Parties shall promptly consult in good faith to determine the ownership of such invention.  Any invention disclosed pursuant to Article 6.3 shall be jointly owned by the Parties, regardless of which Party employs the inventor(s) of such invention (“Joint Invention”), provided that such invention may be solely owned by one Party if such invention was made by such Party without any use of confidential information (as described in Article 10.2) provided by the other Party.

 

6.5           Upon the request of Radius, Eisai shall disclose the complete texts of Eisai Patent.  Radius shall have the right to review with Eisai’s prior written consent which shall not be unreasonably withheld, all information received by Eisai concerning the institution or possible institution of any interference, opposition, re-examination, reissue, revocation, nullification or any official proceeding involving an Eisai Patent anywhere in the world.  Radius shall hold all information disclosed to it under this Article 6.5 as confidential subject to the Article 10.

 

6.6           Upon the request of Eisai, Radius shall disclose the complete texts of Radius 

 

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Patent.  Eisai shall have the right to review with Radius’ prior written consent which shall not be unreasonably withheld, all information received by Radius concerning the institution or possible institution of any interference, opposition, re-examination, reissue, revocation, nullification or any official proceeding involving an Radius Patent anywhere in the world.  Eisai shall hold all information disclosed to it under this Article 6.6 as confidential subject to the Article 10.

 

6.7           Eisai shall have the sole right and authority to prepare, file, prosecute, maintain and obtain extensions of all patent applications and patents included within Eisai Patents in Japan and the Territory.  Eisai shall use all commercially reasonable efforts to prosecute and maintain all patent applications and patents included within Eisai Patents.  Radius shall reimburse Eisai for [*] ([*]) percent of Eisai’s actual external costs and expenses incurred after the Effective Date with respect to prosecuting and maintaining such Eisai Patents in the Territory.  Eisai shall promptly furnish or have furnished to Radius copies of all patents, patent applications, substantive patent office actions, and substantive responses received or filed in connection with such applications for Eisai Patents and use reasonable efforts to solicit Radius’ advice and review of Eisai Patents and material prosecution matters related thereto in reasonable time prior to filing thereof, and Eisai shall consider in good faith Radius’ reasonable comments and suggestions related thereto, which comments and suggestions shall be provided to Eisai without any delay.  Eisai is not required to have English translations of the records provided to Radius for that purpose but shall provide copies of all correspondence and documents that are provided to it in English from patent officials or outside counsel.  Eisai agrees to grant to Radius the right to assume responsibility for any of Eisai Patents or any part of Eisai Patents which Eisai determines in its sole discretion to abandon or otherwise cause or allow to be forfeited.  Such grant shall be made in writing and shall not be inferred from the circumstances.

 

6.8           Radius shall have the sole right and authority to file, prosecute, maintain and

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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obtain extensions of all patent applications and patents included within Radius Patents in Japan and the Territory.  Radius shall use all commercially reasonable efforts to prosecute and maintain all patent applications and patents included within Radius Patents. Radius shall promptly furnish or have furnished to Eisai copies of all patents, patent applications, substantive patent office actions, and substantive responses received or filed in connection with such applications for Radius Patents and use reasonable efforts to solicit Eisai’s advice and review of Radius Patents and material prosecution matters related thereto in reasonable time prior to filing thereof, and Radius shall consider in good faith Eisai’s reasonable comments and suggestions related thereto, which comments and suggestions shall be provided to Radius without any delay.  Radius is not required to have English translations of the records provided to Eisai for that purpose but shall provide copies of all correspondence and documents that are provided to it in English from patent officials or outside counsel.  Radius agrees to grant to Eisai the right to assume responsibility for any of Radius Patent or any part of Radius Patent which Radius intends to abandon or otherwise cause or allow to be forfeited.  Such grant shall be made in writing and shall not be inferred from the circumstances.

 

6.9           With respect to any potentially patentable Joint Invention, the Parties shall meet and agree upon whether and when such Joint Invention is filed as patent application (any such patent application and any patents issuing therefrom “Joint Patents”) , using outside legal counsel selected by Eisai and Radius.  Such outside counsel shall be responsible to both Radius and Eisai, and shall use reasonable efforts to solicit both Radius’ and Eisai’s advice on material prosecution matters related thereto. It is the intention of the Parties that, unless otherwise agreed, Radius shall bear the costs and expenses incurred with respect to the prosecution of such patent applications in the Territory and Eisai shall bear the costs and expenses incurred with respect to the prosecution of such patent applications in Japan, except as otherwise provided below.  The Party that bears such costs and expenses (the “Prosecuting Party”) shall provide the other Party reasonable opportunity to review and comment on such prosecution efforts regarding the applicable Joint Patents in the particular jurisdictions, and such other Party shall provide the Prosecuting Party reasonable assistance in such efforts.  The Prosecuting Party shall provide the 

 

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other Party with a copy of all material communications from any patent authority in the applicable jurisdictions regarding the Joint Patent being prosecuted by such Party, and shall provide drafts of any material filings or responses to be made to such patent authorities a reasonable amount of time in advance of submitting such filings or responses.  In particular, each Prosecuting Party agrees to provide the other Party with all information necessary or desirable to enable the other Party to comply with the duty of candor/duty of disclosure requirements of any patent authority.  Neither Party shall grant any third party(ies) the right to practice the Joint Patents or any Joint Inventions without prior consent of the other Party anywhere in the world.  Any royalty from such third parties shall be distributed to the Parties and each Party is entitled to obtain no less than [*] ([*]) percent of such royalty.  Either Party may determine that it is no longer interested in supporting the continued prosecution or maintenance of a particular Joint Patent in a country or jurisdiction, in which case:  (i) such Party shall, if requested in writing by the other Party, assign its ownership interest in such Joint Patent in such country or jurisdiction to the other Party for no additional consideration, and (ii) if such assignment is so effected, any such Joint Patent would thereafter be deemed a Radius Patent in the case of assignment to Radius, or a Eisai Patent in the case of assignment to Eisai.

 

6.10         The Parties will discuss and recommend for which, if any, of the patents within the Eisai Patents, Radius Patents and Joint Patents in the world the Parties should seek patent term extensions in the world.  Radius in the case of the Radius Patents, and Eisai in the case of the Eisai Patents, shall have the final decision-making authority with respect to applying for any such patent term extensions in the world, and will act with reasonable promptness in light of the development stage of Products to apply for any such patent term extensions.  If in a particular country or jurisdiction in the world only one such patent can obtain a patent term extension, then the Parties will consult in good faith to determine which such patent should be the subject of efforts to obtain a patent term extension.  The Party that does not apply for an extension hereunder will cooperate fully with the other Party in making such filings or actions, for 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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example and without limitation, making available all required regulatory data and information and executing any required authorizations to apply for such patent term extension.

 

6.11         In the event that a third party sues either Party, its Affiliates, licensees or sublicensees for patent infringement involving the manufacture, use, sale, distribution or marketing of Product anywhere in the world, the Party sued shall promptly notify the other Party with regard to such action.  With respect to the defense of any such action in the Territory, the Party sued shall be wholly responsible for the defense of such action and shall bear all costs and expenses associated therewith.  In any event, the Party sued shall have the right to request, solely at its own expense, the other Party to assist and cooperate in connection with the defense of such suit.  Upon such request, the other Party shall use all reasonable efforts to assist and cooperate in connection with the defense of such suit.

 

6.12         In the event that either Party becomes aware of actual or threatened infringement of Eisai Patents, Radius Patents or Joint Patents anywhere in the world, it shall promptly notify the other Party thereof in writing, which such notice shall include all information available to the notifying Party regarding such alleged infringement. With respect to infringement of Eisai Patents anywhere in the world, Eisai shall have the first right (but not the obligation) to pursue any and all injunctive, compensatory and other remedies (collectively, “Remedies”) against the infringing third party.  Eisai shall have a period of [*] ([*]) days after delivery to it of such notice and information to elect to so enforce such Eisai Patents.  In the event Eisai does not so elect, it shall so notify Radius in writing within such [*]-day period, and Radius shall have the right to commence a suit or take action to enforce the applicable Eisai Patents against such infringing third party in the Territory.  In the event Eisai has a reasonable business basis not to enforce such Eisai Patents in the Territory, with the determination of reasonableness taking into account the costs of such litigation, its likelihood for success, the potential damages or settlement recovery, and the potential for exposure to counterclaims and 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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defenses against Eisai with respect to the validity of the Eisai Patents, it shall provide Radius such basis in writing within such [*] ([*]) day period, in which case Radius shall not have such enforcement right in the Territory; provided that, if the Parties discuss in good faith and agree that there could have a big negative impact on the Net Sales by such infringement, Radius shall thereafter be entitled to the royalty adjustment(s) described in Article 4.3 with respect to the applicable country(ies) where such infringement exists as if no patent protection or data protection clauses are in effect for such country(ies).  The Party pursuing Remedies pursuant to this Article 6.12 in respect of Eisai Patents, Radius Patents or Joint Patents shall bear its own costs and expenses relating to such pursuit.

 

Any damages and other amounts collected in any suit or the settlement thereof  that is the subject of this Article 6.12 shall be distributed first, to the Party that pursued Remedies to cover its costs and expenses and, second, to the other Party to cover its unreimbursed costs and expenses, if any, relating to the pursuit of such Remedies.  The balance, if any remaining after the Parties have been compensated for expenses shall be distributed: (a) to Radius in an amount equal to its lost profits or a reasonable royalty on the sales of the infringer with respect to activity in the Territory (whichever measure the court or settlement agreement uses to determine damages); and (b) to Eisai in an amount equal to its lost profits or a reasonable royalty on the sales of the infringer with respect to activity in Japan (whichever measure the court or settlement agreement uses to determine damages). The balance, if any, remaining after Radius has been compensated for lost profits or lost sales and Eisai has been compensated for lost royalties with respect to infringement in the Territory and Eisai has been compensated for lost profits or lost sales in Japan shall be distributed:  (i) [*] ([*]) percent to Radius and [*] ([*]) percent to Eisai in case of Radius pursuing Remedies, and (ii) [*] ([*]) percent to Eisai and [*] ([*]) percent to Radius in case of Eisai pursuing Remedies.

 

With respect to infringement of Radius Patents anywhere in the world, Radius shall have the first right (but not the obligation) to pursue any and all 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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Remedies against the infringing third party.  Radius shall have a period of [*] ([*]) days after delivery to it of such notice and information to elect to so enforce such Radius Patents.  In the event Radius does not so elect, it shall so notify Eisai in writing within such [*]-day period, and Eisai shall have the right to commence a suit or take action to enforce the applicable Radius Patents against such infringing third party in Japan.  In the event Radius has a reasonable business basis not to enforce such Radius Patents in Japan, with the determination of reasonableness taking into account the costs of such litigation, its likelihood for success, the potential damages or settlement recovery, and the potential for exposure to counterclaims and defenses against Radius with respect to the validity of the Radius Patents, it shall provide Eisai such basis in writing within such [*] ([*]) day period, in which case Eisai shall not have such enforcement right in Japan.

 

In the event that a third party infringes any Joint Patents, Radius shall have the first right (but not the obligation) to pursue Remedies against the infringing third party if such infringement is conducted in the Territory, and Eisai shall have the first right (but not the obligation) to pursue Remedies against the infringing third party if such infringement is conducted in Japan.

 

In any event as set forth in this Article 6.12, upon request from the other Party, Eisai and Radius shall assist one another and cooperate in the pursuit of Remedies, including without limitation joining such action as a party plaintiff if required by applicable law to pursue such action, without charge to the other Party for costs and expenses incurred thereby.

 

6.13         The Parties shall keep one another informed of the status of and of their respective activities regarding any litigation or settlement thereof concerning the Product.  Neither Party shall enter into any settlement or consent judgment or other voluntary final disposition of any suit defended or action brought pursuant to Article 6.12 without the other Party’s prior written consent, which consent shall not be unreasonably withheld.

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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ARTICLE 7

 

TERM AND TERMINATION

 

7.1           The term of this Agreement shall be determined on a country by country basis, and for each country shall come in effect on the Effective Date and, unless earlier terminated hereunder, shall terminate upon the later of:  (a) the [*] ([*]) anniversary of date of commercial launch of the Product in that country, or (b) the last remaining Valid Claim in Eisai Patents expires, lapses or is invalidated in that country, the Product is not covered by data protection clauses, and the sales of lawful generic version of the Product account for [*] percent ([*]%) or more of the total sales of all pharmaceutical products containing Compound (including the Product) in that country.  Provided the license to Radius has not previously been terminated under this Agreement, upon expiration of the royalty obligations as to any Product in any country in the Territory, Radius shall thereafter have in perpetuity a fully paid up, royalty-free, non-exclusive license in that country to use the Eisai Know-how to use, market and sell that Product in such country without any accounting to Eisai.

 

7.2           This Agreement can be terminated by Radius, upon [*] ([*]) days’ prior written notice to Eisai, as a whole in the Territory, based on a reasonable determination, using the same standards Radius would use in assessing whether or not to continue development and marketing of a product of its own making or to which it had similar rights, that the medical/scientific, technical, regulatory or commercial profile of the Product does not justify continued development or marketing of the Product.  Otherwise, neither Party has any right to terminate without the other Party’s consent except as specified in this Article 7.

 

7.3           This Agreement can be terminated by Eisai on a country by country basis at any time prior to the date on which Radius has filed for either a FDA NDA approval or a EMEA marketing approval with respect to a Product, upon [*] ([*]) days’ prior written notice to Radius in the event that Radius is not using its commercially reasonable efforts to Develop the Product in the Territory, unless such default is cured within such [*]-day period (or, if such breach is not 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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capable of being cured within such [*]-day period, within such amount of time as may be reasonably necessary to cure such breach, so long as Radius is making diligent efforts to do so.  Any termination pursuant to this Article 7.3 shall be based on Eisai’s good faith determination that Radius has not used its commercially reasonable efforts to Develop the Product in the Territory having reference to prevailing principles and time scales associated with the Development, clinical testing and government approval of products of a like nature to such Products.

 

7.4           If either Party fails to perform, in any material respect, covenants or provisions of this Agreement and if such default is not corrected within [*] ([*]) days after receiving written notice from the other Party with respect to such default, such other Party shall have the right to terminate this Agreement by giving written notice to the other Party in default.  There shall be no waiver of default or impairment of the right to give notice implied by failure to give notice in any period.

 

7.5           If, at any time, either Party shall file in any court or agency pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of receiver or trustee of the Party or of its assets, or if either Party proposes a written agreement of composition or extension of its debts, or if either Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within [*] ([*]) days after the filing thereof, or if either Party shall propose or be a Party to any dissolution or liquidation, or if either Party shall make an assignment for the benefit of creditors, the other Party may terminate this Agreement.

 

7.6           Radius shall notify Eisai in advance if Radius proposes to be acquired by or to transfer all of its pharmaceutical business assets (or an essential part of such assets) or [*] ([*]) percent or more of its voting stock to any third party person or organization, or to otherwise come under the control of, such a person or organization, whether resulting from merger, acquisition, consolidation or 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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otherwise.  Eisai shall have [*] ([*]) business days following the receipt of such notice from Radius to notify Radius whether Eisai will deem the proposed change a termination event based on the criteria listed in items (1)-(3) below as well as the criteria listed in items (a)-(b) below and if Eisai does not provide such notice within such [*] business day period it will be deemed to have agreed that such change will not entitle Eisai to seek termination under this Article 7.6.  In the event that Radius gives such prior notice and is notified by Eisai that Eisai will deem the proposed change a termination event or Radius without giving such prior notice is acquired by or transfers all of its pharmaceutical business assets or an essential part of such assets to, or if [*] ([*]) percent or more of its voting stock is acquired by, or otherwise comes under the control of, a person or an organization, whether resulting from merger, acquisition, consolidation or otherwise, Radius shall promptly notify Eisai of such change and Eisai shall have the right to terminate this Agreement with notice to Radius delivered within [*] ([*]) days of the occurrence of such change in the event that Eisai reasonably determines that the person or organization assuming control of Radius is not able to perform this Agreement with the same degree of skill and diligence that Radius shall use, such determination being made with reference to the following criteria with respect to the person or organization assuming control of Radius: (1) whether such person or organization has the financial resources to assume the obligations of Radius with respect to Development and commercialization of Products; (2) whether such person or organization has personnel with skill and experience adequate to assume the obligations of Radius with respect to Development and commercialization of Products at the stage of Development and commercialization as of the date of such change; and (3) whether such person or organization expressly assumes all obligations imposed on Radius by this Agreement in writing and agrees to dedicate personnel and financial resources to the Development and commercialization of the Product that are at least as great as those provided by Radius.  Radius shall give Eisai information by which Eisai can reasonably determine whether such person or organization satisfies the above criteria together with the notice of such change.  It is understood and agreed that notwithstanding the above criteria listed in (1)-(3), 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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Eisai shall have the right to terminate under this Article 7.6 if: (a) such person or organization has any material and active litigations with Eisai; (b) such person or organization is a [*] pharmaceutical company; or (c) such person or organization is a hostile takeover bidder against Radius which has not been approved by the Board of Directors of Radius as constituted immediately prior to such change of control.  It is understood and agreed that an underwritten public offering of Radius’ common stock pursuant to a Registration Statement on Form S-1 under the Securities Act of 1933, as amended, will not be considered a change of control triggering a termination right under this Article 7.6.

 

ARTICLE 8

 

RIGHTS AND DUTIES UPON TERMINATION

 

8.1           Upon termination of this Agreement, Eisai shall have the right to retain any sums already paid by Radius hereunder, and Radius shall continue to be obligated to pay all sums accrued hereunder at the time of termination which are then due.

 

8.2           Upon termination of this Agreement for any reason except material breach by Eisai, Radius shall notify Eisai of the amount of Product Radius then have on hand, the sale of which would, but for termination, be subject to royalty, and Radius shall thereupon be permitted to sell that amount of Product provided that Radius shall pay the royalty thereon at the time herein provided for.

 

8.3           In either case that Radius terminates this Agreement in accordance with Article 7.2 or that Eisai terminates this Agreement in accordance with Article 7.3, 7.4, 7.5 or 7.6, Radius shall provide or transfer to Eisai all technical information and know-how categorized as Radius Know-How which it possesses at the time of the termination in a timely manner.  Thereafter, Eisai shall have a worldwide, royalty-free and perpetual license, under Radius Patents and Radius Know-How, to develop, manufacture, have manufactured, import and sell Compound and Product.  In addition to the license to Radius

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

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Patents and Radius Know-How, Eisai will have the option to assume, to the extent transferable, any third party licenses and agreements relating to the Product without compensation to Radius; this right is independent and subordinate to the rights of such each sublicensee under Article 8.5.

 

8.4           Termination of this Agreement shall terminate all outstanding rights and obligations between the Parties arising from this Agreement except those described in this Article 8 as well as Articles 1, 4, 5.4 (solely with respect to Product or Semi-Product or bulk Compound material provided by Radius through the date of termination), 5.6 (solely with respect to Product or Semi-Product or bulk Compound material provided by Radius through the date of termination), 6.1, 6.4 (second, third and fourth sentences), 9, 10.2, 11 (solely with respect to Product or Semi-Product or bulk Compound material provided by Radius through the date of termination), and 13-16.

 

8.5           In the event the licenses granted to Radius under this Agreement terminates for any reason, each of Radius’ sublicensees at such time shall continue to have the rights and license set forth in their sublicense agreements, provided  that such sublicensee agrees in writing that:  (a) Eisai is entitled to enforce all relevant provisions directly against such sublicensee; and (b) Eisai shall not assume, and shall not be responsible to such sublicensee for, any representations, warranties or obligations of Radius to such sublicensee other than to permit such sublicensee to exercise any rights to the Eisai Patents and Eisai Know-How and Eisai’s undivided interest in Joint Patents that are sublicensed under such sublicense agreement consistent with the terms of Article 2.1 of this Agreement.

 

ARTICLE 9

 

REPRESENTATIONS AND WARRANTIES

 

9.1           As of the Effective Date, Eisai warrants to Radius that it has the exclusive rights to license the entire right, title and interest in Eisai Patents and Eisai Know-How and has the right to enter into this Agreement and to make the promises set forth in this Agreement and that there are no outstanding agreements, assignments or encumbrances in existence in breach of the provisions of this Agreement.  As of the Effective Date, Radius warrants to Eisai that it has the right to enter into this Agreement and to make the 

 

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promises set forth in this Agreement and that there are no outstanding agreements, assignments or encumbrances in existence in breach of the provisions of this Agreement.

 

9.2           As of the Effective Date, Eisai warrants to Radius that, to the best of its knowledge, no Eisai Patents has or will be obtained through any intentional activity, omission or representation by Eisai that would limit or destroy the validity and/or enforceability of Eisai Patents, and Eisai has no knowledge or information as of the Effective Date that would have a material adverse effect on the validity and/or enforceability of any Eisai Patent.

 

9.3           Each Party represents and warrants to the other Party as of the Effective Date that the performance by such Party of any of the terms and conditions of this Agreement on its part to be performed does not and will not constitute a breach of any other material agreement or understanding, written or oral, to which it is a party.

 

9.4           Eisai represents and warrants to Radius as of the Effective Date that there are no adverse proceedings, claims or actions pending, or to the best of Eisai’s knowledge, threatened, relating to any Eisai Patent and Eisai know-How and at the time of disclosure and delivery thereof to Radius, Eisai shall, to the best of its knowledge, have the full right and legal capacity to disclose and deliver the Eisai Patents and Eisai Know-How without violating the rights of any third parties.

 

9.5           Except for the express warranties in this Article 9 and Article 5.4(b), neither Party makes any warranties, express or implied, in fact or by operation of law, statutory or otherwise.  Each Party specifically disclaims any implied warranty of merchantability or fitness for a particular purpose.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY HERETO OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZES REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME EXCEPT AS SET FORTH IN

 

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ARTICLE 12.

 

ARTICLE 10

 

EXCHANGE OF INFORMATION AND CONFIDENTIALITY

 

10.1         During the term of this Agreement, Eisai shall promptly inform Radius of Eisai Know-How that may become known to it and information that it obtains or develops regarding the utility or safety of Compound or Product.  During the term of this Agreement, Radius shall promptly inform Eisai of Radius Know-How and information that Radius obtains, knows or develops regarding Compound or Product.

 

10.2         During the term of this Agreement and for ten (10) years thereafter, Eisai and Radius shall not use for any purpose other than this Agreement and shall not reveal or disclose to third parties the subject matter of this Agreement and any confidential information received as confidential from the other Party or otherwise developed by either Party in the performance of activities in furtherance of this Agreement without first obtaining the written consent of the other Party.  This limitation shall not apply to information in the event and to the extent that receiving Party can demonstrate by competent written proof that such information

 

(i)            was in the possession of receiving Party at the time of disclosure by the disclosing Party;

 

(ii)           was publicly known prior to the time of disclosure to receiving Party;

 

(iii)          became publicly known after disclosure to receiving Party through no action or inaction of receiving Party;

 

(iv)          was independently discovered or developed by receiving Party without the aid, application, or use of information received from the disclosing Party;

 

(v)           was obtained with prior written consent of providing Party which allows disclosure; or

 

(vi)          is required by law, regulation or court order to be disclosed; provided that receiving Party agrees to provide providing Party with prompt notice of such request so that providing Party will have an opportunity to limit obtain appropriate protective order regarding such disclosure.  Receiving Party agrees to cooperate with providing Party at providing Party’s expense, in any lawful effort to contest the requirement of such 

 

32

 

disclosure.  The portion of such information that remains publicly undisclosed after such disclosure shall not be used for other than this Agreement and shall be treated in confidence.

 

Any confidential information disclosed by each Party hereunder may be used only by employees of the other Party or its affiliates who agree to be bound by a confidentiality obligation hereunder and who have a genuine need to know such information for the purposes permitted by this Agreement.  The Parties shall take reasonable measures to assure that no unauthorized use or disclosure is made by others to whom access to such confidential information is granted.

 

10.3         Nothing herein shall be construed as preventing either receiving Party from using and disclosing any confidential information received from the other Party as necessary (a) in filing or prosecuting patent applications and prosecuting or defending litigation in accordance with Article 6; (b) in connection with the initiation and conduct of clinical trials; (c) in conducting research and development in accordance with this Agreement including with third party collaborators (if such collaborators are subject to written confidentiality agreements with such Party; and (d) to its Affiliate or distributor, provided that such Affiliate or distributor has undertaken a similar obligation of confidentiality with respect to the confidential information.

 

10.4         No public announcement or other disclosure to any third party concerning the existence of or terms of this Agreement shall be made, either directly or indirectly, by either Party to this Agreement, except as may be legally required or as may be required for recording purposes, without first obtaining the approval of the other Party and agreement upon the nature and text of such announcement or disclosure.  The Party desiring to make any such public announcement or other disclosure (pursuant to legal requirement, for recording purposes or otherwise) in reasonably sufficient time prior to public release, and shall provide the other Party with a written copy of the proposed public statement, in order to allow such other Party to comment upon such announcement or disclosure.  Notwithstanding the foregoing, the parties will agree upon a press release to announce the execution of this Agreement.  The press release at the execution of this Agreement will be substantially in the 

 

33

 

form set out in Schedule 10.4.  Thereafter, either Party may disclose the information contained in such press release without the need for further approval by the other Party; provided, that it is understood and agreed that “new” information concerning this Agreement may not be included in such press release without compliance with the first two sentences of this Article 10,4.

 

10.5         Each Party agrees that it shall not publish or present to the public the results of non-clinical scientific studies or clinical trials related to the Product without the opportunity for prior review by the other Party.  If a Party (the “Publishing Party”) wishes to publish or to present to the public such results, then it shall provide the other Party (the “Non-Publishing Party”) the opportunity to review any of the Publishing Party’s proposed abstracts, manuscripts or presentations (including verbal presentations) which relate to the Product at least forty-five (45) days prior to its intended submission for publication and agrees, upon request, not to submit any such abstract or manuscript for publication until the other Party is given a reasonable period of time to secure patent protection for any material in such publication which it believes to be patentable.  Both parties understand that a reasonable commercial strategy may require delay of publication of information or filing of patent applications.  The parties agree to review and consider delay of publication and filing of patent applications under certain circumstances.  Neither Party shall have the right to publish or present to the public confidential information of the other Party, except as permitted under Articles 10.2 or 10.3.  Nothing contained in this Article 10.5 shall prohibit the inclusion of the results of non-clinical scientific studies or clinical trials related to the Product necessary for a patent application, provided  that the non-filing Party is given a reasonable opportunity to review the draft of such patent application prior to submission of such patent application. Notwithstanding anything to the contrary herein, either Party may publish information about the clinical trials performed or to be performed on the Product without the need to obtain the other Party’s approval (provided, however, that such Party will use reasonable efforts to inform the other Party and to allow the other Party to comment on the disclosure), to the extent that such disclosure is required, in the disclosing Party’s reasonable opinion, to comply with applicable laws, regulations, guidelines and/or formal position papers of recognized pharmaceutical industry associations or medical journals 

 

34

 

or such Party’s standard business practice with respect to similar disclosure of clinical trial information.  It is understood and agreed that the exception specified in the preceding sentence shall not permit either Party to disclose any material that is patentable without first complying with the procedures set forth in the second sentence of this Article 10.5.

 

ARTICLE 11

 

INDEMNIFICATION

 

11.1         Radius shall indemnify and hold harmless Eisai, its officers, directors, shareholders, employees, successors and assigns from any loss, damage, or liability, including attorney fees, resulting from any claim, complaint, suit, proceeding or cause of action against any of them by a third party arising out of or resulting from: (i) the negligence, recklessness or intentional acts or omissions of Radius, its Affiliates, and licensees, and their respective directors, officers, employees, and agents; (ii) any breach of a representation, warranty, covenant or agreement of Radius hereunder including but not limited to the warranty under Article 5.4(b); and (iii) any personal injury, including death, brought by or on behalf of an injured party; loss of service or consortium or a similar such claim, complaint, suit, proceeding or cause of action brought by a spouse, relative or companion of an injured party due to such physical injury or death and arising out of the labeling, packaging, package insert, other materials or promotional claims with respect to any Product in the Territory by Radius or by an Affiliate, licensee, sublicensee, distributor or agent of Radius; and provided:

 

(a)   Radius shall not be obligated to indemnify or hold harmless Eisai under this Article 11.1 to the extent that:

 

	
(i)
    	
such claim arose out of or   was the result of the negligence, recklessness, or willful misconduct or   intentional acts or omissions of any employee or agent of Eisai; or
    
	
 
    	
 
    
	
(ii)
    	
the injury was the result   of any defect attributable to the act or failure to act by Eisai; and
    

 

(b)   Radius shall not have any obligation to indemnify or hold harmless Eisai under this Article 11.1 unless (i) Eisai gives Radius prompt written notice of any claim or lawsuit or other action for which it seeks to be indemnified under this Agreement, (ii) Radius is given the opportunity to assume full authority and control over the defense, including settlement (provided that 

 

35

 

any settlement shall not result in any remaining obligation or liability on the part of Eisai), against such claim or lawsuit or other action, and (iii) Eisai cooperates fully with Radius and its agents in defense of the claims or lawsuit or other action; and

 

(c)   Eisai shall have the right to participate solely at its own expense, in the defense of any such claim, complaint, suit, proceeding and its agents in d or cause of action, including any settlement or other disposition thereof, for which Eisai seeks indemnification under this Agreement.

 

11.2         Eisai shall indemnify and hold harmless Radius, its officers, directors, shareholders, employees, successors and assigns from any loss, damage, or liability, including attorney fees, resulting from any claim, complaint, suit, proceeding or cause of action against any of them by a third party arising out of or resulting from: (i) the negligence, recklessness or intentional acts or omissions of Eisai, its Affiliates, and licensees, and their respective directors, officers, employees, and agents; (ii) any breach of a representation, warranty, covenant or agreement of Eisai hereunder; and (iii) any personal injury, including death, brought by or on behalf of an injured party; loss of service or consortium or a similar such claim, complaint, suit, proceeding or cause of action brought by a spouse, relative or companion of an injured party due to such physical injury or death and arising out of the labeling, packaging, package insert, other materials or promotional claims with respect to any Product in Japan by Eisai or by an Affiliate, licensee, sublicensee, distributor or agent of Eisai; and provided:

 

(a)   Eisai shall not be obligated to indemnify or hold harmless Radius under this Article 11.1 to the extent that:

 

	
(i)
    	
such claim arose out of or   was the result of the negligence, recklessness, or willful misconduct or   intentional acts or omissions of any employee or agent of Radius; or
    
	
 
    	
 
    
	
(ii)
    	
the injury was the result   of any defect attributable to the act or failure to act by Radius; and
    

 

(b)   Eisai shall not have any obligation to indemnify or hold harmless Radius under this Article 11.2 unless (i) Radius gives Eisai prompt written notice of any claim or lawsuit or other action for which it seeks to be indemnified under this Agreement, (ii) Eisai is given the opportunity to assume full authority and control over the defense, including settlement (provided that 

 

36

 

any settlement shall not result in any remaining obligation or liability on the part of Radius), against such claim or lawsuit or other action, and (iii) Radius cooperates fully with Eisai and its agents in defense of the claims or lawsuit or other action; and

 

(c)   Radius shall have the right to participate solely at its own expense, in the defense of any such claim, complaint, suit, proceeding and its agents in d or cause of action, including any settlement or other disposition thereof, for which Radius seeks indemnification under this Agreement.

 

ARTICLE 12

 

FORCE MAJEURE

 

12.1         If the performance of any Party of this Agreement by either Party, or of any obligation under this Agreement, is prevented, restricted, interfered with or delayed by reason of any casualties or contingencies beyond the control of the Parties and their suppliers, including Acts of God, government regulations, laws, orders or decrees, labor disputes, floods, fires, civil commotion, embargoes, quotas, shortage of labor or materials or any delays in transportation or detention by customs and health authorities which are also beyond the control of the Parties and their suppliers, unless conclusive evidence to the contrary is provided, the Party so affected shall, upon giving written notice to the other Party, be excused from such performance to the extent of such prevention, restriction, interference or delay, provided that the affected Party shall use its reasonable best efforts to avoid or remove such causes of non-performance and shall continue performance with the utmost dispatch whenever such causes are removed.  When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution.

 

ARTICLE 13

 

GOVERNING LAW

 

13.1         This Agreement shall be governed by and interpreted in accordance with the domestic substantive law of New York, U.S.A. to the exclusion of any choice or conflict of laws rule or provision that would result in the application of the substantive law of any other jurisdiction.  Notwithstanding the foregoing, the Parties shall use United States (Federal) patent laws, as applicable, for 

 

37

 

purposes of governing and construing Articles 6.3-6.4 of this Agreement.  The United Nations Convention on Contracts for the International Sale of Goods shall not apply to the transactions contemplated by this Agreement.

 

ARTICLE 14

 

DISPUTE RESOLUTION

 

14.1         In the event a dispute (“Dispute”) arises between the Parties arising out of relating to this Agreement, the Parties shall use all reasonable efforts to resolve the Dispute through direct discussions for a period of [*] ([*]) days.  Subsequent to such [*] ([*]) day period, any issue which has not been amicably resolved by such settlement discussions shall be referred to the respective Chief Executive Officers (“CEOs”) of the Parties for final resolution, by which both Parties shall be bound.  If CEOs cannot reach an agreement on such issue within [*] ([*]) days after such referral, either Party may resort to the binding arbitration procedures set out in Article 14.2.

 

14.2         If the Parties are unable after exerting all reasonable efforts to resolve a Dispute between the Parties, the Dispute shall be resolved through binding arbitration on the following basis:

 

(a)   If a Dispute arises between the Parties, the place of arbitration shall be Tokyo, Japan, if demand for arbitration is made by Radius, and Cambridge, MA, U.S.A, if demand for arbitration is made by Eisai.

 

(b)   The arbitration shall be conducted by a panel of three arbitrators under the Rules of Arbitration of the International Chamber of Commerce.  Each Party shall appoint one arbitrator and the other one arbitrator shall be appointed by the arbitrators appointed by the Parties.

 

(c)   The language to be used in the arbitration shall be English.

 

(d)   The arbitration award shall be rendered in writing and shall state the reasons for the award, and shall be final and binding upon the Parties.

 

(e)          Judgment on any award shall be entered by any court of competent jurisdiction, or application may be made to such a court for judicial acceptance of the award and any appropriate order including enforcement.

 

(f)    Each Party shall bear its own expenses and attorney’s fees in connection 

 

* Confidential Treatment Requested by the Registrant.  Redacted Portion Filed Separately with the Commission.

 

38

 

with the arbitration and the fees and expenses payable with respect to the arbitration shall be borne by the Party losing the case.

 

(g)   The arbitrators shall apply the substantive laws of New York when construing this Agreement and attempting to resolve any dispute, without regard for any choice or conflict of laws rule or principle that would result in the application of the substantive law of any other jurisdiction. Except as otherwise required by applicable law, the Parties and the arbitrators shall maintain as confidential all information or documents obtained during the arbitration process, including the resolution of the dispute.

 

(h)   The arbitrators shall not have the authority to award exemplary or punitive damages, and the Parties expressly waive any claimed right to such damages.

 

ARTICLE 15

 

SEPARABILITY

 

15.1         In the event any portion of this Agreement shall be held illegal, void or ineffective, the remaining portions hereof shall remain in full force and effect.

 

15.2         If any terms or provisions of this Agreement are in conflict with any applicable statute or rule of law, then such terms or provisions shall be deemed inoperative to the extent that they may conflict therewith and the Parties shall consult with one another in order to reach a new agreement that conforms with the applicable statute or rule of law in the relevant jurisdiction.  In case the Parties fail to reach such separate agreement, either Party shall have the right to terminate the obligations and rights under this Agreement in such jurisdiction.

 

ARTICLE 16

 

ENTIRE AGREEMENT

 

16.1         This Agreement, entered into as of the Effective Date, constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes all previous or contemporaneous understandings and agreements whether written or oral, except the Materials Transfer Agreement dated October 17, 2005 between the Parties.  No terms or provisions of this Agreement shall be varied or modified by any prior subsequent statement, conduct or act of either of the Parties, except that the Parties may amend this 

 

39

 

Agreement by written instruments specifically referred to and executed in the same manner as this Agreement.

 

ARTICLE 17

 

NOTICE

 

17.1         Any notice required to be given or made under this Agreement by one of the Parties to the other shall be in writing, by personal delivery, registered mail, overnight courier, facsimile or air mail to the following addresses of the Parties:

 

To Eisai:

Eisai Co., Ltd.

6-10 Koishikawa, 4-chome, Bunkyo-ku, Tokyo 112-8088, Japan

Attention:

 

To Radius:

Radius Health, Inc.

300 Technology Square, 5th Floor, Cambridge, MA 02139, U.S.A.

Attention:

 

17.2         Any notice required to be given concerning this Agreement shall be effective upon receipt by the Party to whom it is addressed.

 

ARTICLE 18

 

ASSIGNMENT

 

18.1         Neither this Agreement nor any interest hereunder shall be assignable by either Party without the written consent of the other Party, not to be unreasonably withheld.  It is understood and agreed that any change of control transaction shall be governed by Article 7.6 and not this Article 18.1.

 

ARTICLE 19

 

RECORDATION

 

19.1         Both Parties shall have the right, at any time, to record, register, or otherwise notify this Agreement in appropriate governmental or regulatory offices anywhere in the Territory, and each Party shall provide reasonable assistance to the other Party in effecting recording, registering or notifying.

 

40

 

ARTICLE 20

 

EXECUTION IN COUNTERPARTS

 

20.1         This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Parties, through their authorized representatives, have executed this Agreement as of the Effective Date.

 

	
Eisai Co., Ltd.
    	
 
    
	
By:
    	
/s/ Hideki Hayashi
    	
 
    
	
Title:
    	
Hideki Hayashi
    	
 
    
	
 
    	
Vice President
   Corporate Business Development
    	
 
    
	
 
    	
 
    
	
Radius Health, Inc.
    	
 
    
	
By:
    	
/s/ Bart Henderson
    	
 
    
	
Title:
    	
Chief Business Officer
   Senior Vice President
    	
 
    

 

Appendices

Appendix A          Eisai Patents

Appendix B           Asian Countries

Appendix C           Development Plan

 

41

 

Appendix A

 

EISAI PATENTS (NON EXHAUSTIVE)

 

	
COUNTRY/REGION
    	
 
    	
APPLIC.   NO.
    	
 
    	
APPLIC.   DATE
    	
 
    	
PUBLIC. NO.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Australia
    	
 
    	
2003292625
    	
 
    	
12/25/2003
    	
 
    	
AU2003292625   A1
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Canada
    	
 
    	
2512000
    	
 
    	
12/25/2003
    	
 
    	
CA2512000   A1
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Europe
    	
 
    	
03782904.1
    	
 
    	
12/25/2003
    	
 
    	
EP1577288   A1
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
India
    	
 
    	
2829/DELNP/2005
    	
 
    	
12/25/2003
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Japan
    	
 
    	
2004-562947
    	
 
    	
12/25/2003
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
U.S.A.
    	
 
    	
11/158245
    	
 
    	
12/25/2003
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PCT
    	
 
    	
PCT/JP03/016808
    	
 
    	
12/25/2003
    	
 
    	
WO2004058682 A1
    

 

42

 

Appendix B

 

India

Korea

China

Taiwan

Hong Kong

Vietnam

Myanamar

Cambodia

Laos

Sri Lanka

Philippines

Malaysia

Singapore

Indonesia

Australia

 

43Exhibit 10.26

 

Execution Copy

 

SERIES A-1 CONVERTIBLE PREFERRED

STOCK PURCHASE AGREEMENT

 

THIS AGREEMENT, dated this 25th day of April, 2011 is entered into by and among Radius Health, Inc., a Delaware corporation (the “Corporation”), the persons listed on Schedule I attached hereto (the “Investors,” and each individually, an “Investor”).

 

WHEREAS, the Corporation and the Investors wish to provide for the issuance of shares of Series A-1 Preferred Stock (as hereinafter defined), as more specifically set forth hereinafter.

 

NOW, THEREFORE. in consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:

 

SECTION 1.                                Filing of Restated Certificate of Incorporation.

 

1.1                                 Recapitalization.

 

(a)                                  Prior to the Stage I Closing (as defined in Section 4(a) hereof), the Corporation shall have filed the Fourth Amended and Restated Certificate of Incorporation of the Corporation, in the form attached hereto as Exhibit A (the “Restated Certificate”).  Pursuant to the Restated Certificate, among other things:

 

(i)                                     simultaneously with the effective date of the filing of the Restated Certificate (the “Split Effective Date”), a reverse split (the “Reverse  Split”) of the Corporation’s outstanding capital stock shall occur as follows: (A) each share of the Corporation’s Common Stock, par value $.01 per share (“Common Stock”), issued and outstanding or held as treasury shares immediately prior to the Split Effective Date shall automatically without any action on the part of the holder thereof, be reclassified and changed into 0.06666667 of one share of Common Stock from and after the Split Effective Date, (B) each share of the Corporation’s Series A Junior Convertible Preferred Stock, par value $.01 per share (“Series A Stock”), issued and outstanding or held as treasury shares immediately prior to the Split Effective Date shall automatically without any action on the part of the holder thereof, be reclassified and changed into 0.06666667 of one share of Series A Stock from and after the Split Effective Date, (C) each share of the Corporation’s Series B Convertible Redeemable Preferred Stock, par value $.01 per share (“Series B Stock”), issued and outstanding or held as treasury shares immediately prior to the Split Effective Date shall automatically without any action on the part of the holder thereof, be reclassified and changed into 0.06666667 of one share of Series B Stock from and after the Split Effective Date and (D) each share of the Corporation’s Series C Convertible Redeemable Preferred Stock, par value $.01 per share (“Series C Stock” and together with the Series A Stock and the Series B Stock, the “Existing Preferred Stock”), issued and outstanding or held as treasury shares immediately prior to the Split Effective Date shall automatically without any action on the part of the holder thereof, be reclassified and changed into 0.06666667 of one share of Series C Stock from and after the Split Effective Date;

 

(ii)                                  in the event that a current stockholder of the Corporation does not participate in the financing contemplated hereby at least at the level of its Pro Rata Share (as defined below), by committing to purchase and purchasing (or securing an investor

 

 

who commits to purchase and purchases) at least at the level of its Pro Rata Share, a percentage of each series of such holder’s Existing Preferred Stock equal to such holder’s Applicable Portion (as defined in the Restated Certificate) shall automatically convert into shares of Common Stock (all such shares of Common Stock being referred to herein, collectively, as the “Forced Conversion Shares”), at a rate of 1 share of Common Stock for every 5 shares of Existing Preferred Stock to be so converted, such automatic conversion (hereinafter, the “Forced Conversion”) to occur and become effective immediately prior to the consummation of the Stage I Closing (the “Effective Time”);

 

(iii)                               each share of Series C Stock remaining outstanding after the Forced Conversion shall, immediately following the Forced Conversion, automatically be reclassified and converted into one (1) share of Series A-2 Preferred Stock (as defined in Section 1.2 hereof), and all accrued dividends on such reclassified share of Series C Stock shall be forfeited;

 

(iv)                              each share of Series B Stock remaining outstanding after the Forced Conversion shall, immediately following the Forced Conversion, automatically be reclassified and converted into one (1) share of Series A-3 Preferred Stock (as defined in Section 1.2 hereof), and all accrued dividends on such reclassified share of Series B Stock shall be forfeited; and

 

(v)                                 each share of Series A Stock remaining outstanding after the Forced Conversion shall, immediately following the Forced Conversion, automatically be reclassified and converted into one (1) share of Series A-4 Preferred Stock (as defined in Section 1.2 hereof) (the automatic reclassification and conversion of the Existing Preferred Stock pursuant to the Restated Certificate into shares of Series A-2 Preferred Stock, Series A-3 Preferred Stock and Series A-4 Preferred Stock, as applicable, as described in the provisions set forth above, is hereinafter referred to as the “Automatic Reclassification”). The Reverse Split, the Forced Conversion and the Automatic Reclassification are hereinafter referred to, collectively, as the “Recapitalization”.

 

(b)                                 As used in this Agreement, the term “Pro Rata Share” means, with respect to any holder of Existing Preferred Shares (an “Existing Preferred Holder”), that amount equal to $35,000,000 multiplied by the quotient obtained by dividing (A) the number of shares of issued and outstanding Common Stock owned by such Existing Preferred Holder as of March 31, 2011 (or, in the case of a holder of Existing Preferred Stock who received all of its shares of Existing Preferred Stock in a transfer from a former holder of Existing Preferred Stock occurring after March 31, 2011, the number shares of issued and outstanding Common Stock owned by such former holder of Existing Preferred Stock as of March 31, 2011) by (B) the aggregate number of shares of issued and outstanding Common Stock owned as of such date by all Existing Preferred Holders.  For purposes of the computation set forth in clauses (i) and (ii) above, all issued and outstanding securities held by Existing Preferred Holders that are convertible into or exercisable or exchangeable for shares of Common Stock (including any issued and issuable shares of Existing Preferred Stock) or for any such convertible, exercisable or exchangeable securities, shall be treated as having been so converted, exercised or exchanged at the rate or price at which such securities are convertible, exercisable or exchangeable for shares of Common Stock in effect at the time in question, whether or not such securities are at such time

 

2

 

immediately convertible, exercisable or exchangeable.

 

(c)                                  The procedures for implementing the Recapitalization are more specifically set forth in the Restated Certificate.

 

(d)                                 Saints Capital VI, L.P. is an investor who commits to purchase for each of Oxford Bioscience Partners IV L.P and mRNA Fund II L.P. shares of Series A-1 Preferred Stock (with any shortfall in the purchase by Saints Capital VI, L.P. of the Pro Rata Share of Oxford Bioscience Partners IV L.P. and mRNA Fund II L.P. being allocated equally to each of them on a percentage basis).

 

(e)                                  All stock numbers and prices set forth in this Agreement give effect to the Reverse Split and no further adjustments are necessary with respect thereto.

 

1.2                                 Rights and Preferences of the Authorized Stock.  In addition to setting forth the Recapitalization, the Restated Certificate also sets forth, among other things, the terms, designations, powers, preferences, and relative, participating, optional, and other special rights, and the qualifications, limitations and restrictions of the Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock and Series A-6 Preferred Stock (as such terms are hereinafter defined).  Pursuant to the Restated Certificate, the Corporation shall be authorized to issue up to (i) 34,859,964 shares of Common Stock, par value $.01 per share (“Common  Stock”), and (ii) 29,364,436 shares of Preferred Stock (the “Preferred Stock”), 10,000,000 of which shall have been designated as Series A-1 Convertible Preferred Stock, par value $.01 per share (“Series A-1 Preferred Stock”), 9,832,133 of which shall have been designated as Series A-2 Convertible Preferred Stock, par value $.01 per share (“Series A-2 Preferred Stock”), 1,422,300 of which shall have been designated as Series A-3 Convertible Preferred Stock, par value $.01 per share (“Series A-3 Preferred Stock”), 40,003 of which shall have been designated as Series A-4 Convertible Preferred Stock, par value $.01 per share (“Series A-4 Preferred Stock”), 70,000 of which shall have been designated as Series A-5 Convertible Preferred Stock, par value $.01 per share (“Series A-5 Preferred Stock”), and 8,000,000 of which shall have been designated as Series A-6 Convertible Preferred Stock, par value $.01 per share (“Series A-6 Preferred Stock”).  The Common Stock and the Preferred Stock shall have the respective terms as set forth in the Restated Certificate.

 

SECTION 2.                                Authorization of Issuance and Sale of Series A-1 Preferred Stock; Reservation of Reserved Common Shares.

 

Subject to the terms and conditions of this Agreement, the Corporation has authorized the following:

 

(a)                                  the issuance on the Stage I Closing Date (as defined in Section 4(a) hereof) of an aggregate of 2,631,845 shares of Series A-1 Preferred Stock (subject to adjustment to reflect stock splits, stock dividends, stock combinations, recapitalizations and like occurrences other than the Reverse Split) (such shares of Series A-1 Preferred Stock being sometimes hereinafter referred to as the “Stage I Preferred Shares”), and the reservation of an equal number of shares of Common Stock for issuance upon conversion of the Stage I Preferred Shares (such

 

3

 

reserved Common Stock being sometimes hereinafter collectively referred to as the “Stage I Reserved Common Shares”).

 

(b)                                 the issuance on the Stage II Closing Date (as defined in Section 4(b) hereof) of an aggregate of 2,631,845 shares of Series A-1 Preferred Stock (subject to adjustment to reflect stock splits, stock dividends, stock combinations, recapitalizations and like occurrences other than the Reverse Split) (such shares of Series A-1 Preferred Stock being sometimes hereinafter referred to as the “Stage II Preferred Shares”), and the reservation of an equal number of shares of Common Stock for issuance upon conversion of the Stage II Preferred Shares (such reserved Common Stock being sometimes hereinafter collectively referred to as the “Stage II Reserved Common Shares”).

 

(c)                                  the issuance on the Stage III Closing Date (as defined in Section 4(b) hereof) of an aggregate of 2,631,845 shares of Series A-1 Preferred Stock (subject to adjustment to reflect stock splits, stock dividends, stock combinations, recapitalizations and like occurrences other than the Reverse Split) (such shares of Series A-1 Preferred Stock being sometimes hereinafter referred to as the “Stage III Preferred Shares”), and the reservation of an equal number of shares of Common Stock for issuance upon conversion of the Stage III Preferred Shares (such reserved Common Stock being sometimes hereinafter collectively referred to as the “Stage III Reserved Common Shares” and together with the Stage I Reserved Common Shares and the Stage II Reserved Common Shares, the “Reserved Common Shares”).

 

SECTION 3.                                Sale and Delivery of’ Series A-1 Preferred Stock.

 

3.1                                 Agreement to Sell and Purchase the Series A-1 Preferred Stock. Subject to the terms and conditions hereof, the Corporation is selling to each Investor and each Investor is severally (but not jointly and severally) purchasing from the Corporation the following:

 

(a)                                  subject to the satisfaction of the conditions precedent set forth in Sections 7.1 and 7.2 hereof and subject to the terms and other conditions hereinafter set forth, at the Stage I Closing, the number of Stage I Preferred Shares set forth opposite the name of such Investor on Schedule I hereto for a purchase price of $8.142 per share (subject to adjustment to reflect stock splits, stock dividends, stock combinations, recapitalizations and like occurrences other than the Reverse Split) (the “Purchase Price”), representing an aggregate cash Purchase Price of $21,428,482 for the Stage I Preferred Shares;

 

(b)                                 subject to the satisfaction of the conditions precedent set forth in Sections 7.1 and 7.4 hereof and subject to the terms and other conditions hereinafter set forth, at the Stage II Closing, the number of Stage II Preferred Shares set forth opposite the name of such Investor on Schedule I hereto for the Purchase Price per share representing an aggregate cash Purchase Price of $21,428,482 for the Stage II Preferred Shares and otherwise on the same terms as conditions as the sale and issuance of the Stage I Preferred Shares; and

 

(c)                                  subject to the satisfaction of the conditions precedent set forth in Sections 7.1 and 7.5 hereof and subject to the terms and other conditions hereinafter set forth, at the Stage III Closing, the number of Stage III Preferred Shares set forth opposite the name of such Investor on Schedule I hereto for the Purchase Price per share representing an aggregate

 

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cash Purchase Price of $21,428,482 for the Stage III Preferred Shares and otherwise on the same terms as conditions as the sale and issuance of the Stage I Preferred Shares.

 

3.2                                 Additional A-1 Shares.  In addition to the foregoing, in the event that any Investor who is, as of immediately prior to the Recapitalization, a holder of Existing Preferred Stock and such Investor invests, pursuant to the terms of this Agreement, more than such holder’s full Pro Rata Share (such excess amount being referred to herein as the “Super Pro Rata Amount”), such Investor shall receive at the Stage I Closing, in consideration of such Investor’s agreement to invest such Super Pro Rata Amount, that number of additional shares of Series A-1 Preferred Stock set forth next to such Investor’s name of Schedule 1 hereto under the captions “Additional A-1 Shares” (the “Additional A-1 Shares”).

 

3.3                                 Delivery of Series A-1 Preferred Stock. At each Closing (as defined in Section 4(d)), the Corporation shall deliver to each Investor a certificate or certificates, registered in the name of such Investor, representing that number of shares of Series A-1 Preferred Stock being purchased (including any Additional A-1 Shares, if applicable) by such Investor at such Closing.  In each case, delivery of certificates representing Series A-1 Preferred Stock to each Investor shall be made against receipt by the Corporation of a check payable to the Corporation or a wire transfer to an account designated by the Corporation in the full amount of the purchase price for the Series A-1 Preferred Stock being purchased by such Investor at such Closing, provided, however, that no separate or additional purchase price and no check or wire transfer shall be required in connection with the delivery to any Investor of any Additional A-1 Shares.

 

SECTION 4.                                The Closings.

 

(a)                                  An initial closing (the “Stage I Closing”) hereunder with respect to the transactions contemplated by Sections 2(a) and 3.1(a) hereof will take place by facsimile transmission of executed copies of the documents contemplated hereby delivered on either (i) May 13, 2011 or (ii) if on such date the conditions precedent set forth in Sections 7.1 and 7.3 hereof have not been satisfied or waived, no later than the third (3d) business day after the conditions set forth in Sections 7.1 and 7.3 hereof have been satisfied or waived in writing by the Majority Investors, such Stage I Closing to be held at the offices of Bingham McCutchen LLP, One Federal Street, Boston, MA 02110 (such date sometimes being referred to herein as the “Stage I Closing Date”).

 

(b)                                 A second closing (the “Stage II Closing”) hereunder with respect to the transactions contemplated by Sections 2(b) and 3.1(b) hereof will take place by facsimile transmission of executed copies of the documents contemplated hereby delivered on either (i) the date determined by the Corporation that is no sooner than the later of (A) fifteen (15) business days following the Stage I Closing Date and (B) fifteen (15) business days after the Corporation delivers written notice to the Investors setting forth the date scheduled for the Stage II Closing or (ii) if on such date the conditions precedent set forth in Sections 7.1 and 7.4 hereof have not been satisfied or waived, no later than the third (3d) business day after the conditions set forth in Sections 7.1 and 7.4 hereof have been satisfied or waived in writing by the Majority Investors, such Stage II Closing to be held at the offices of Bingham McCutchen LLP, One Federal Street, Boston, MA 02110, (the date thereof sometimes being referred to herein as the “Stage II Closing Date”).

 

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(c)                                  A third closing (the “Stage III Closing”) hereunder with respect to the transactions contemplated by Sections 2(c) and 3.1(c) hereof will take place by facsimile transmission of executed copies of the documents contemplated hereby delivered on either (i) the date determined by the Corporation that is no sooner than the later of (A) fifteen (15) business days following the Stage II Closing Date and (B) fifteen (15) business days after the Corporation delivers written notice to the Investors setting forth the date scheduled for the Stage III Closing or (ii) if on such date the conditions precedent set forth in Sections 7.1 and 7.5 hereof have not been satisfied or waived, no later than the third (3) business day after the conditions set forth in Sections 7.1 and 7.5 hereof have been satisfied or waived in writing by the Majority Investors, such Stage II Closing to be held at the offices of Bingham McCutchen LLP, One Federal Street, Boston, MA 02110, (the date thereof sometimes being referred to herein as the “Stage III Closing Date”).

 

(d)                             For convenience of reference, each of the Stage I Closing, Stage II Closing, and Stage III Closing are sometimes hereinafter singly referred to as a “Closing” and, together, they are referred to as the “Closings”.

 

(e)                                  In the event that an Investor does not timely and completely fulfill his, her or its obligations to purchase shares of Series A-1 Preferred Stock as contemplated by this Agreement at each of the Stage II Closing and the Stage III Closing (collectively, the “Future Funding Obligations”), then (i) all shares of Preferred Stock then held by such Investor  shall automatically, and without any further action on the part of such holder, be converted into shares of Common Stock at a rate of 1 share of Common Stock for every 10 shares of Preferred Stock to be so converted and (ii) the Corporation shall have the right to repurchase and such holders shall be required to sell all shares of Common Stock issued upon conversion (either pursuant to the foregoing clause (i) or otherwise) of all Additional A-1 Shares and all Series A-2 Preferred Stock, Series A-3 Preferred Stock and Series A-4 Preferred Stock issued to such Investor pursuant to the Automatic Reclassification for a per share purchase price equal to the applicable par value of such share and all such repurchased shares shall thereafter be cancelled by the Corporation and no longer be issued and outstanding shares of capital stock of the Corporation, all in accordance with Section 9.(b) of Part B of Article III of the Restated Certificate. The conversion and repurchase of shares to the Corporation set forth in this Section 4(e) is referred to as a “Subsequent Closing Adjustment”.  The Subsequent Closing Adjustment is in addition to, and not preclusive of, any other rights or remedies that the Corporation and other Investors may have under law or otherwise with respect to the failure of any Investor to fulfill its Future Funding Obligations at each Closing.

 

SECTION 5.                                Representations and Warranties of the Corporation to the Investors.

 

Except as set forth in the Corporation’s disclosure schedule dated as of the date hereof and delivered herewith (the “Corporation’s Disclosure Schedule”), which shall be arranged to correspond to the representations and warranties in this Section 5, or, in each case, as applicable to the relevant other Sections of this Agreement, and the disclosure in any portion of the Corporation’s Disclosure Schedule shall qualify the corresponding provision in this Section 5 and any other provision of this Agreement, including but not limited to the provisions of this Section 5, to which it is reasonably apparent on its face that such disclosure relates notwithstanding the lack of any explicit cross-reference, the Corporation hereby represents and

 

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warrants to the Investors as follows:

 

5.1                                 Organization. The Corporation is a corporation 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 property and to carry on its Business (as defined in Section 5.6) as presently conducted and as proposed to be conducted as described in the Executive Summary (as defined in Section 5.6).  The Corporation is duly qualified to do business as a foreign corporation in the states set forth on Schedule 5.1 of the Corporation’s Disclosure Schedule.  The Corporation does not own or lease property or engage in any activity in any other jurisdiction which would require its qualification in such jurisdiction and in which the failure to be so qualified would have a material adverse effect on the Business, properties, assets, liabilities, condition (financial or otherwise) or prospects of the Corporation (a “Corporation Material Adverse Effect”).

 

5.2                                 Capitalization.

 

(a)                                  The authorized capital stock of the Corporation immediately prior to the Stage I Closing shall consist of:

 

(i)                                     34,859,964 shares of Common Stock, of which:

 

(1)                                  522,506 shall be validly issued and outstanding, fully paid and nonassessable (including 266 shares issuable upon exercise of warrants to purchase Common Stock);

 

(2)                                  29,364,436 shares shall have been duly reserved for issuance upon conversion of the Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock and Series A-6 Preferred Stock (including 147,384 shares of Series A-1 Preferred Stock issuable upon exercise of warrants to purchase Series A-1 Preferred Stock); and

 

(3)                                  2,015,666 shares shall have been duly reserved for issuance in connection with options available under the Corporation’s 2003 Long-Term Incentive Plan, as amended (the “2003 Plan Option Shares”).

 

(ii)                                  29,364,436 shares of Preferred Stock of which:

 

(1)                                  63,000 shall have been designated the Series A Stock, 61,664 of which shall be issued and outstanding, fully paid and nonassessable;

 

(2)                                  1,600,000 shall have been designated the Series B Stock, 1,599,997 of which shall be issued and outstanding, fully paid and nonassessable;

 

(3)                                  10,146,629 shall have been designated the Series C Preferred Stock, all of which shall be issued and outstanding, fully paid and nonassessable;

 

(4)                                  10,000,000 shall have been designated the Series A-1 Preferred Stock, none of which shall be issued and outstanding;

 

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(5)                                  9,832,133 shall have been designated the Series A-2 Preferred Stock, none of which shall be issued and outstanding;

 

(6)                                  1,422,300 shall have been designated the Series A-3 Preferred Stock, none of which shall be issued and outstanding;

 

(7)                                  40,003 shall have been designated the Series A-4 Preferred Stock, none of which shall be issued and outstanding;

 

(8)                                  70,000 shall have been designated the Series A-5 Preferred Stock, none of which shall be issued and outstanding;

 

(9)                                  8,000,000 shall have been designated the Series A-6 Preferred Stock, none of which shall be issued and outstanding.

 

(b)                                 The authorized capital stock of the Corporation immediately following the Stage I Closing, assuming compliance with all of the provisions of this Agreement by each of the Investors, shall consist of:

 

(i)                                     34,859,964 shares of Common Stock, of which:

 

(1)                                  522,506 shall be validly issued and outstanding, fully paid and nonassessable (including 266 shares issuable upon exercise of warrants to purchase Common Stock);

 

(2)                                  29,364,436 shares shall have been duly reserved for issuance upon conversion of the Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred Stock and Series A-6 Preferred Stock (including 147,384 shares of Series A-1 Preferred Stock issuable upon exercise of warrants to purchase Series A-1 Preferred Stock); and

 

(3)                                  2,015,666 shares shall have been duly reserved for issuance in connection with options available under the Corporation’s 2003 Long-Term Incentive Plan, as amended;

 

(ii)                                  29,364,436 shares of Preferred Stock of which:

 

(1)                                  63,000 shall have been designated the Series A Preferred Stock, none of which shall be issued and outstanding;

 

(2)                                  1,600,000 shall have been designated the Series B Preferred Stock, none of which shall be issued and outstanding;

 

(3)                                  10,146,629 shall have been designated the Series C Preferred Stock, none of which shall be issued and outstanding;

 

(4)                                  10,000,000 shall have been designated the Series A-1 Preferred Stock, of which 4,136,912 shall be validly issued and outstanding, fully paid and

 

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nonassessable;

 

(5)                                  9,832,133 shall have been designated the Series A-2 Preferred Stock, all of which shall be validly issued and outstanding, fully paid and nonassessable;

 

(6)                                  1,422,300 shall have been designated the Series A-3 Preferred Stock, all of which shall be validly issued and outstanding, fully paid and nonassessable;

 

(7)                                  40,003 shall have been designated the Series A-4 Preferred Stock, all of which shall be validly issued and outstanding, fully paid and nonassessable;

 

(8)                                  70,000 shall have been designated the Series A-5 Preferred Stock, of which 66,028 shall be validly issued and outstanding, fully paid and nonassessable; and

 

(9)                                  8,000,000 shall have been designated the Series A-6 Preferred Stock, none of which shall be issued and outstanding.

 

(c)                                  Except (i) pursuant to the terms of this Agreement, (ii) at any time prior to the Stage I Closing, pursuant to the terms of the Amended and Restated Stockholders’ Agreement, dated as of December 15, 2006, by and among the Corporation and the stockholders named therein, as amended to date (the “Existing  Stockholders’  Agreement”), (iii) as of and at all times following the Stage I Closing, pursuant to the terms of that certain Amended and Restated Stockholders’ Agreement to be entered into in connection with the Stage I Closing, as contemplated by Section 7.2(b), in the form attached hereto as Exhibit B (the “Stockholders’ Agreement”), and (iv) as set forth in Schedule 5.2 attached hereto, there are and, immediately following the Stage I Closing, there will be: (1) no outstanding warrants, options, rights, agreements, convertible securities or other commitments or instruments pursuant to which the Corporation is or may become obligated to issue, sell, repurchase or redeem any shares of capital stock or other securities of the Corporation (other than the 2003 Plan Option Shares); (2) no preemptive, contractual or similar rights to purchase or otherwise acquire shares of capital stock of the Corporation pursuant to any provision of law, the Restated Certificate, the by-laws of the Corporation (the “by-laws”) or any agreement to which the Corporation is a party or may otherwise be bound; (3) no restrictions on the transfer of capital stock of the Corporation imposed by the Restated Certificate or by-laws of the Corporation, any agreement to which the Corporation is a party, any order of any court or any governmental agency to which the Corporation is subject, or any statute other than those imposed by relevant state and federal securities laws; (4) no cumulative voting rights for any of the Corporation’s capital stock; (5) no registration rights under the Securities Act of 1933, as amended (the “Securities Act”), with respect to shares of the Corporation’s capital stock; (6) to the Corporation’s Knowledge, no options or other rights to purchase shares of capital stock from stockholders of the Corporation granted by such stockholders; and (7) no agreements, written or oral, between the Corporation and any holder of its securities, or, to the Corporation’s Knowledge, among holders of its securities, relating to the acquisition, disposition  or voting of the securities of the Corporation.

 

5.3                                 Authorization of this Agreement and the Stockholders’ Agreement. The execution, delivery and performance by the Corporation of this Agreement and the Stockholders’

 

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Agreement and the consummation of the transactions contemplated hereby and thereby, including the Recapitalization and the Merger, have been duly authorized by all requisite action on the part of the Corporation. Each of this Agreement and the Stockholders’ Agreement has been duly executed and delivered by the Corporation and constitutes a valid and binding obligation of the Corporation, enforceable in accordance with its respective terms. The execution, delivery and performance of this Agreement and the Stockholders’ Agreement, the filing of the Restated Certificate and the compliance with the provisions hereof and thereof by the Corporation, will not:

 

(a)                                  violate any provision of law, statute, ordinance, rule or regulation or any ruling, writ, injunction, order, judgment or decree of any court, administrative agency or other governmental body;

 

(b)                                 conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with due notice or lapse of time, or both) a default (or give rise to  any right of termination, cancellation or acceleration) under (i) any agreement, document, instrument, contract, understanding, arrangement, note, indenture, mortgage or lease to which the Corporation is a party or under which the Corporation or any of its assets is bound, which conflict, breach or default would have a Corporation Material Adverse Effect, (ii) the Restated Certificate, or (iii) the by-laws;

 

(c)                                  result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Corporation; or

 

(d)                                 conflict with any stockholder’s rights to participate in the transactions contemplated hereby, including but not limited to any rights to purchase Series A-1 Preferred Stock hereunder.

 

5.4                                 Authorization of Series A-1 Preferred Stock and Reserved Common Shares.

 

(a)                                  The issuance, sale and delivery of the Series A-1 Preferred Stock pursuant to the terms hereof and the issuance sale and deliver of the Series A-2 Preferred Stock, the Series A-3 Preferred Stock and the Series A-4 Preferred Stock pursuant to the Recapitalization, have been duly authorized by all requisite action of the Corporation, and, when issued, sold and delivered in accordance with this Agreement or the Recapitalization, the shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock and Series A-4 Preferred Stock will be validly issued and outstanding, fully paid and nonassessable, with no personal liability attaching to the ownership thereof, and, except as may be set forth in the Stockholders’ Agreement (with respect to which the Corporation is in compliance with its obligations thereunder), not subject to preemptive or any other similar rights of the stockholders of the Corporation or others.

 

(b)                                 The reservation, issuance, sale and delivery by the Corporation of the Reserved Common Shares and of all shares of Common Stock issuable upon conversion of shares of Series A-2 Preferred Stock, Series A-3 Preferred Stock and Series A-4 Preferred Stock have been duly authorized by all requisite action of the Corporation, and the Reserved Common

 

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Shares have been duly reserved in accordance with Section 2 of this Agreement. Upon the issuance and delivery of the Reserved Common Shares in accordance with the terms of this Agreement, the Reserved Common Shares will be validly issued and outstanding, fully paid and nonassessable and not subject to preemptive or any other similar rights of the stockholders of the Corporation or others.

 

5.5                                 Consents and Approvals. No authorization, consent, approval or other order of, or declaration to or filing with, any governmental agency or body (other than filings required to be made under applicable federal and state securities laws) or any other person, entity or association is required for: (a) the valid authorization, execution, delivery and performance by the Corporation of this Agreement and the Stockholders’ Agreement; (b) the valid authorization, issuance, sale and delivery of the Series A-1 Preferred Stock; (c) the valid authorization, reservation, issuance, sale and delivery of the Reserved Common Shares; or (d) the filing of the Restated Certificate.  The Corporation has obtained all other consents that are necessary to permit the consummation of the transactions contemplated hereby and thereby, other than the Merger.

 

5.6                                 Business of the Corporation.

 

(a)                                  Except as set forth in Schedule 5.6(a) of the Corporation’s Disclosure Schedule, the business of the Corporation (the “Business”) is described in the executive summary of the Corporation, a copy of which is attached hereto as Exhibit C (the “Executive Summary”).

 

(b)                                 Schedule 5.6 of the Corporation’s Disclosure Schedule sets forth a list of all agreements or commitments to which the Corporation is a party or by which the Corporation or the Corporation’s assets and properties are bound that are material to the business of the Corporation as currently conducted, and, without limitation, of the foregoing, all of the types of agreements or commitments set forth below (each, a “Material Agreement”):

 

(i)                                     agreements which require future expenditures by the Corporation in excess of $100,000 or which might result in payments to the Corporation in excess of $100,000;

 

(ii)                                  employment and consulting agreements, employee benefit, bonus, pension, profit-sharing, stock option, stock purchase and similar plans and arrangements;

 

(iii)                               agreements involving research, development, or the license of Intellectual Property (as defined in Section 5.12) (other than research, development, or license agreements which require future expenditures by the Corporation in amounts less than $100,000 or which might result in payments to the Corporation in amounts less than $100,000 in each case that do not grant to a third party or to the Corporation any rights in connection with the commercialization of any products), the granting of any right of first refusal, or right of first offer or comparable right with respect to any Intellectual Property or payment or receipt by the Corporation of milestone payments or royalties;

 

(iv)                              agreements relating to a joint venture, partnership, collaboration or other arrangement involving a sharing of profits, losses, costs or liabilities with

 

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another person or entity;

 

(v)                                 distributor, sales representative or similar agreements;

 

(vi)                              agreements with any current or former stockholder, officer or director of the Corporation or any “affiliate” or “associate” of such persons (as such terms are defined in the rules and regulations promulgated under the Securities Act), including without limitation agreements or other arrangements providing for the furnishing of services by, rental of real or personal property from, or otherwise requiring payments to, any such person or entity;

 

(vii)                           agreements under which the Corporation is restricted from carrying on any business, or competing in any line of business, anywhere in the world;

 

(viii)                        indentures, trust agreements, loan agreements or notes that involve or evidence outstanding indebtedness, obligations or liabilities for borrowed money;

 

(ix)                                agreements for the disposition of a material portion of the Corporation’s assets (other than for the sale of inventory in the ordinary course of business);

 

(x)                                   agreements of surety, guarantee or indemnification;

 

(xi)                                interest rate, equity or other swap or derivative instruments;

 

(xii)                             agreements obligating Corporation to register securities under the Securities Act; and

 

(xiii)                          agreements for the acquisition of any of the assets, properties, securities or other ownership interests of the Corporation or another person or the grant to any person of any options, rights of first refusal, or preferential or similar rights to purchase any of such assets, properties, securities or other ownership interests.

 

(c)                                  The Corporation has no present expectation or intention of not fully performing all of its obligations under each Material Agreement and, to the Corporation’s Knowledge, there is no breach or anticipated breach by any other party or parties to any Material Agreements.

 

(d)                                 All of the Material Agreements are valid, in full force and effect and binding against the Corporation and to the Corporation’s Knowledge, binding against the other parties thereto in accordance with their respective terms.  Neither the Corporation, nor, to the Corporation’s Knowledge, any other party thereto, is in default of any of its obligations under any of the agreements or contracts listed on the Schedule 5.6 of the Corporation’s Disclosure Schedule, nor, to the Corporation’s Knowledge, does any condition exist that with notice or lapse of time or both would constitute a default thereunder.  The Corporation has delivered to each Investor or its representative true and complete copies of all of the foregoing Material Agreements or an accurate summary of any oral Material Agreements (and all written amendments or other modifications thereto).

 

(e)                                  Except as provided in Schedule 5.6(e) of the Corporation’s

 

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Disclosure Schedule: (i) there are no actions, suits, arbitrations, claims, investigations or legal or administrative proceedings pending or, to the Corporation’s Knowledge, threatened, against the Corporation, whether at law or in equity; (ii) there are no judgments, decrees, injunctions or orders of any court, government department, commission, agency, instrumentality or arbitrator entered or existing against the Corporation or any of its assets or properties for any of the foregoing or otherwise; and (iii) the Corporation has not admitted in writing its inability to pay its debts generally as they become due, filed or consented to the filing against it of a petition in bankruptcy or a petition to take advantage of any insolvency act, made an assignment for the benefit of creditors, consented to the appointment of a receiver for itself or for the whole or any substantial part of its property, or had a petition in bankruptcy filed against it, been adjudicated a bankrupt, or filed a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other laws of the United States or any other jurisdiction.

 

(f)                                    Except as set forth in Schedule 5.6(f) of the Corporation’s Disclosure Schedule, the Corporation is in compliance with all obligations, agreements and conditions contained in any evidence of indebtedness or any loan agreement or other contract or agreement (whether or not relating to indebtedness) to which the Corporation is a party or is subject (collectively, the “Obligations”), the lack of compliance with which could afford to any person the right to accelerate any indebtedness or terminate any right of or agreement with the Corporation. To the Corporation’s Knowledge all other parties to such Obligations are in compliance with the terms and conditions of such Obligations.

 

(g)                                 Except for employment and consulting agreements set forth on Schedule 5.6 attached hereto and for agreements and arrangements relating to the 2003 Plan Option Shares and except as provided in Schedule 5.6(g) of the Corporation’s Disclosure Schedule, this Agreement and the Stockholders’ Agreement, there are no agreements, understandings or proposed transactions between the Corporation and any of its officers, directors or other “affiliates” (as defined in Rule 405 promulgated under the Securities Act).

 

(h)                                 To the Corporation’s Knowledge, no employee of or consultant to the Corporation is in violation of any term of any employment contract, patent disclosure agreement or any other contract or agreement, including, but not limited to, those matters relating (i) to the relationship of any such employee with the Corporation or to any other party as a result of the nature of the Corporation’s Business as currently conducted, or (ii) to unfair competition, trade secrets or proprietary or confidential information.

 

(i)                                     Each employee and director of or consultant to the Corporation, and each other person who has been issued shares of the Corporation’s Common Stock or options to purchase shares of the Corporation’s Common Stock is a signatory to, and is bound by, the Stockholders’ Agreement and, in the case of Common Stock issued to employees, directors and consultants, a stock restriction agreement, all with stock transfer restrictions and rights of first offer in favor of the Corporation in a form previously approved by the Board of Directors of the Corporation (the “Board of Directors”). In addition, each such stock restriction agreement contains a vesting schedule previously approved by the Board of Directors.

 

(j)                                     The Corporation does not have any collective bargaining agreements covering any of its employees or any employee benefit plans.

 

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(k)                                  The Corporation has at all times complied with all provisions of its by-laws and Restated Certificate, and is not in violation of or default under any provision thereof, any contract, instrument, judgment, order, writ or decree to which it is a party or by which it or any of its properties are bound, and the Corporation is not in violation of any material provision of any federal or state statute, rule or regulation applicable to the Corporation.

 

5.7                                 Disclosure.  None of this Agreement, the Stockholders’ Agreement or the Executive Summary, nor any document, certificate or instrument furnished to any of the Investors or their counsel in connection with the transactions contemplated by this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.  To the Corporation’s Knowledge, there is no fact which the Corporation has not disclosed to the Investors or their counsel which would reasonably be expected to result in a Corporation Material Adverse Effect.

 

5.8                                 Financial Statements.  The Corporation has furnished to each of the Investors a complete and accurate copy of (i) the unaudited balance sheet of the Corporation at December 31, 2010 and the related unaudited statements of operations and cash flows for the fiscal year then ended, and (ii) the unaudited balance sheet of the Corporation (the “Balance Sheet”) at February 28, 2011 (the “Balance Sheet Date”) and the related unaudited statements of operations and cash flows for the two month period then ended (collectively, the “Financial Statements”).  The Financial Statements are in accordance with the books and records of the Corporation, present fairly the financial condition and results of operations of the Corporation at the dates and for the periods indicated, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) consistently applied, except, in the case of any unaudited Financial Statements, for the absence of footnotes normally contained therein and subject to normal and recurring year-end audit adjustments that are substantially consistent with prior year-end audit adjustments.

 

5.9                                 Absence of Undisclosed Liabilities.  The Corporation has no liabilities of any nature (whether known or unknown and whether absolute or contingent), except for (a) liabilities shown on the Balance Sheet and (b) contractual and other liabilities incurred in the ordinary course of business which are not required by GAAP to be reflected on a balance sheet and which would not, either individually or in the aggregate, have or result in a Corporation Material Adverse Effect.  The Corporation does not have any liabilities (and there is no basis for any present or, to the Corporation’s Knowledge, future proceeding against the Corporation giving rise to any liability) arising out of any personal injury and/or death or damage to property relating to or arising in connection with any clinical trials conducted by or on behalf of the Corporation.

 

5.10                           Absence of Changes.  Since the Balance Sheet Date and except as contemplated by this Agreement, there has been (i) no event or fact that individually or in the aggregate has had a Corporation Material Adverse Effect, (ii) no declaration, setting aside or payment of any dividend or other distribution with respect to, or any direct or indirect redemption or acquisition of, any of the capital stock of the Corporation, (iii) no waiver of any valuable right of the Corporation or cancellation of any debt or claim held by the Corporation, (iv) no loan by the Corporation to any officer, director, employee or stockholder of the

 

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Corporation, or any agreement or commitment therefor, (v) no increase, direct or indirect, in the compensation paid or payable to any officer, director, employee or agent Corporation and no change in the executive management of the Corporation or the terms of their employment, (vi) no material loss, destruction or damage to any property of the Corporation, whether or not insured, (vii) no labor disputes involving the Corporation, or (viii) no acquisition or disposition of any assets (or any contract or arrangement therefor), nor any transaction by the Corporation otherwise than for fair value in the ordinary course of business.

 

5.11                           Payment of Taxes. The Corporation has prepared and filed within the time prescribed by, and in material compliance with, applicable law and regulations, all federal, state and local income, excise or franchise tax returns, real estate and personal property tax returns, sales and use tax returns, payroll tax returns and other tax returns required to be filed by it, and has paid or made provision for the payment of  all accrued and paid taxes and other charges to which the Corporation is subject and which are not currently due and payable. The federal income tax returns of the Corporation have never been audited by the Internal Revenue Service. Neither the Internal Revenue Service nor any other taxing authority is now asserting nor is threatening to assert against the Corporation any deficiency or claim for additional taxes or interest thereon or penalties in connection therewith, and the Corporation does not know of any such deficiency or basis for such deficiency or claim.

 

5.12                           Intellectual Property.

 

(a)                                  Schedule 5.12(a) lists each patent, patent application, copyright registration or application therefor, mask work registration or application therefor, and trademark, trademark application, trade name, service mark and domain name registration or application therefor owned by the Corporation, licensed by the Corporation or otherwise used by the Corporation (collectively, the “Listed Rights”). For each of the Listed Rights set forth on Schedule 5.12(a), an assignment to the Corporation of all right, title and interest in the Listed Right (or license to practice the Listed Right if owned by others) has been executed. All employees of and consultants to the Corporation have executed an agreement providing for the assignment to the Corporation of all right, title and interest in any and all inventions, creations, works and ideas made or conceived or reduced to practice wholly or in part during the period of their employment or consultancy with the Corporation, including all Listed Rights, to the extent described in any such agreement and providing for customary provisions relating to confidentiality and non-competition.

 

(b)                                 Except as set forth on Schedule 5.12(b), the Listed Rights comprise all of the patents, patent applications, registered trademarks and service marks, trademark applications, trade names, registered copyrights and all licenses that have been obtained by the Corporation, and which, to the Corporation’s Knowledge, are necessary for the conduct of the Business of the Corporation as now being conducted and as proposed to be conducted in the Executive Summary. Except as set forth on Schedule 5.12(b), the Corporation owns all of the Listed Rights and Intellectual Property, as hereinafter defined, free and clear of any valid and enforceable rights, claims, liens, preferences of any party against such Intellectual Property. To the Corporation’s Knowledge, except as set forth in Schedule 5.12(b), the Listed Rights and Intellectual Property are valid and enforceable rights and the practice of such rights does not infringe or conflict with the rights of any third party.

 

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(c)                                  To the Corporation’s Knowledge, the Corporation owns or has the right to use all Intellectual Property necessary (i) to use, manufacture, market and distribute the Customer Deliverables (as defined below) and (ii) to operate the Internal Systems (as defined below). The Corporation has taken all reasonable measures to protect the proprietary nature of each item of Corporation Intellectual Property (as defined below), and to maintain in confidence all trade secrets and confidential information that it owns or uses. To the Corporation’s Knowledge no other person or entity has any valid and enforceable rights to any of the Corporation Intellectual Property owned by the Corporation (except as set forth in Schedule 5.12(c)), and no other person or entity is infringing, violating or misappropriating any of the Corporation Intellectual Property.

 

(d)                                 To the Corporation’s Knowledge, none of the Customer Deliverables, or the manufacture, marketing, sale, distribution, importation, provision or use thereof, infringes or violates, or constitutes a misappropriation of, any valid and enforceable Intellectual Property rights of any person or entity; and, to the Corporation’s Knowledge neither the marketing, distribution, provision or use of any Customer Deliverables currently under development by the Corporation will, when such Customer Deliverables are commercially released by the Corporation, infringe or violate, or constitute a misappropriation of, any valid and enforceable Intellectual Property rights of any person or entity that exist today. To the Corporation’s Knowledge, none of the Internal Systems, or the use thereof, infringes or violates, or constitutes a misappropriation of, any valid and enforceable Intellectual Property rights of any person or entity.

 

(e)                                  There is neither pending nor overtly threatened, or, to the Corporation’s Knowledge, any basis for, any claim or litigation against the Corporation contesting the validity or right to use any of the Listed Rights or Intellectual Property, and the Corporation has not received any notice of infringement upon or conflict with any asserted right of others nor, to the Corporation’s Knowledge, is there a basis for such a notice. To the Corporation’s Knowledge, no person, corporation or other entity is infringing the Corporation’s rights to the Listed Rights or Intellectual Property. Schedule 5.12(e) lists any complaint, claim or notice, or written threat thereof, received by the Corporation alleging any such infringement, violation or misappropriation, and the Corporation has provided to the Investors complete and accurate copies of all written documentation in the possession of the Corporation relating to any such complaint, claim, notice or threat. The Corporation has provided to the Investors complete and accurate copies of all written documentation in the Corporation’s possession relating to claims or disputes known to each of the Corporation concerning any Corporation Intellectual Property.

 

(f)                                    Except as otherwise provided in Schedule 5.12(f), the Corporation, to the Corporation’s Knowledge has no obligation to compensate others for the use of any Listed Right or any Intellectual Property, nor has the Corporation granted any license or other right to use, in any manner, any of the Listed Rights or Intellectual Property, whether or not requiring the payment of royalties. Schedule 5.12(f) identities each license or other agreement pursuant to which the Corporation has licensed, distributed or otherwise granted any rights to any third party with respect to any Corporation Intellectual Property. Except as described in Schedule 5.12(f), the Corporation has not agreed to indemnify any person or entity against any infringement, violation or misappropriation of any Intellectual Property rights with respect to any Corporation

 

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Intellectual Property.

 

(g)                                 Schedule 5.12(g) identifies each item of Corporation Intellectual Property that is owned by a party other than the Corporation, and the license or agreement pursuant to which the Corporation uses it (excluding off-the-shelf software programs licensed by the Corporation pursuant to “shrink wrap” licenses).

 

(h)                                 The Corporation has not disclosed the source code for any software developed by it, or other confidential information constituting, embodied in or pertaining to such software, to any person or entity, except pursuant to the agreements listed in Schedule 5.12(h), and the Corporation has taken reasonable measures to prevent disclosure of any such source code.

 

(i)                                     All of the copyrightable materials incorporated in or bundled with the Customer Deliverables have been created by employees of the Corporation within the scope of their employment by the Corporation or by independent contractors of the Corporation who have executed agreements expressly assigning all right, title and interest in such copyrightable materials to the Corporation. Except as listed in Schedule 5.12(i), no portion of such copyrightable materials was jointly developed with any third party.

 

(j)                                     To the Corporation’s Knowledge, the Customer Deliverables and the Internal Systems are free from significant defects or programming errors and conform in all material respects to the written documentation and specifications therefor.

 

(k)                                  For purposes of this Agreement, the following terms shall have the following meanings:

 

(i)                                     “Customer Deliverables” shall mean (a) the products that the Corporation (i) currently manufactures, markets, sells or licenses or (ii) currently plans to manufacture, market, sell or license in the future and (b) the services that the Corporation (i) currently provides or (ii) currently plans to provide in the future.

 

(ii)                                  “Internal Systems” shall mean the internal systems of each of the Corporation that are presently used in its Business or operations, including, computer hardware systems, software applications and embedded systems.

 

(iii)                               “Intellectual Property” shall mean all: (A) patents, patent applications, patent disclosures and all related continuation, continuation-in-part, divisional, reissue, reexamination, utility model, certificate of invention and design patents, design patent applications, registrations and applications for registrations, including Listed Rights; (B) trademarks, service marks, trade dress, internet domain names, logos, trade names and corporate names and registrations and applications for registration thereof; (C) copyrights and registrations and applications for registration thereof; (D) mask works and registrations and applications for registration thereof; (E) computer software, data and documentation; (F) inventions, trade secrets and confidential business information, whether patentable or nonpatentable and whether or not reduced to practice, know-how, manufacturing and product processes and techniques, research and development information, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and

 

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information; (G) other proprietary rights relating to any of the foregoing (including remedies against infringements thereof and rights of protection of interest therein under the laws of all jurisdictions); and (H) copies and tangible embodiments thereof.

 

(iv)                              “Corporation Intellectual Property” shall mean the Intellectual Property owned by or licensed to the Corporation and incorporated in, underlying or used in connection with the Customer Deliverables or the Internal Systems.

 

(v)                                 “Corporation’s Knowledge” shall mean (a) with respect to matters relating directly to the Corporation and its operations, the knowledge of Richard Lyttle, Nicholas Harvey, Louis O’Dea and Gary Hattersley (the “Officers”) as well as other knowledge which such Officers would have possessed had they made diligent inquiry of appropriate employees and agents of the Corporation with respect to the matter in question; provided, that such Officers shall not be obligated to inquire further with respect to any list herein or in any schedule hereto, and (b) with respect to external events or conditions, the actual knowledge of the Officers.

 

5.13                           Securities Laws. Neither the Corporation nor anyone acting on its behalf has offered securities of the Corporation for sale to, or solicited any offers to buy the same from, or sold securities of the Corporation to, any person or organization, in any case so as to subject the Corporation, its promoters, directors and/or officers to any Liability under the Securities Act, the Securities and Exchange Act of 1934, as amended, or any state securities or “blue sky” law (collectively, the “Securities Laws”).  The offer, grant, sale and/or issuance of the following were not, are not, or, as the case may be, will not be, in violation of the Securities Laws when offered, sold and issued in accordance with this Agreement and the 2003 Long-Term Incentive Plan, as amended:

 

(a)                                  the Series A-1 Preferred Stock, as contemplated by this Agreement and the Exhibits and Schedules hereto, and in partial reliance upon the representations and warranties of the Investors set forth in Section 6 hereof;

 

(b)                                 the Series A-2 Preferred Stock, the Series A-3 Preferred Stock and the Series A-4 Preferred Stock in the Recapitalization;

 

(c)                                  the Common Stock issuable upon the conversion of Existing Preferred Stock in the Forced Conversion and the conversion of the Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock or Series A-4 Preferred Stock and in partial reliance upon the representations and warranties of the Investors set forth in Section 6 hereof; and

 

(d)                                 the 2003 Plan Option Shares and stock options covering such shares.

 

5.14                           Title to Properties.

 

(a)                                  The Corporation has valid title to, or in the case of leased properties and assets, valid leasehold interests in, all of its properties and assets, necessary to conduct the Business in the manner in which it is currently conducted (in each case, free and

 

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clear of all liens, security interests, charges and other encumbrances of any kind, except liens for taxes not yet due and payable), including without limitation, all rights under any investigational drug application of the Corporation filed in the United States and in foreign countries, all rights pursuant to the authority of the FDA and any foreign counterparts to conduct clinical trials with respect to any investigational drug application filed with such agency relating to biologics or drugs relating to the Business and all rights, if any, to apply for approval to commercially market and sell biologics or drugs and none of such properties or assets is subject to any lien, security interest, charge or other encumbrance of any kind, other than those the material terms of which are described in Schedule 5.14(a).

 

(b)                                 The Corporation does not own any real property or any buildings or other structures, nor have options or any contractual obligations to purchase or acquire any interest in real property.  Schedule 5.14(b) lists all real property leases to which the Corporation is a party and each amendment thereto.  All such current leases are in full force and effect, are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing default or event of default (or event that with notice or lapse of time, or both, would constitute a default).  The Corporation, in its capacity as lessee, is not in violation of any zoning, building or safety ordinance, regulation or requirement or other law or regulation applicable to the operation of its leased properties, nor has it received any notice of violation with which it has not complied.

 

(c)                                  The equipment, furniture, leasehold improvements, fixtures, vehicles, any related capitalized items and other tangible property material to the Business are in good operating condition and repair, ordinary wear and tear excepted.

 

5.15                           Investments in Other Persons. Except as indicated in Schedule 5.15 attached hereto, (a) the Corporation has not made any loan or advance to any person or entity which is outstanding on the date hereof nor is it committed or obligated to make any such loan or advance, and (b) the Corporation has never owned or controlled and does not currently own or control, directly or indirectly, any subsidiaries and has never owned or controlled and does not currently own or control any capital stock or other ownership interest, directly or indirectly, in any corporation, association, partnership, trust, joint venture or other entity.

 

5.16                           ERISA. Except as set forth in Schedule 5.16, neither the Corporation nor any entity required to be aggregated with the Corporation under Sections 414(b), (c), (m) or (n) of the Code (as hereinafter defined), sponsors, maintains, has any obligation to contribute to, has any liability under, or is otherwise a party to, any Benefit Plan.  For purposes of this Agreement, “Benefit Plan” shall mean any plan, fund, program, policy, arrangement or contract, whether formal or informal, which is in the nature of (i) any qualified or non-qualified employee pension benefit plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) or (ii) an employee welfare benefit plan (as defined in section 3(1) of ERISA).  With respect to each Benefit Plan listed in Schedule 5.16, to the extent applicable:

 

(a)                                  Each such Benefit Plan has been maintained and operated in all material respects in compliance with its terms and with all applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended (the “Code”), and all statutes, orders, rules,

 

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regulations, and other authority which are applicable to such Benefit Plan;

 

(b)                                 All contributions required by law to have been made under each such Benefit Plan (without regard to any waivers granted under Section 412 of the Code) to any fund or trust established thereunder in connection therewith have been made by the due date thereof:

 

(c)                                  Each such Benefit Plan intended to qualify under Section 401(a) of the Code is the subject of a favorable unrevoked determination letter issued by the Internal Revenue Service as to its qualified status under the Code, which determination letter may still be relied upon as to such tax qualified status, and no circumstances have occurred that would adversely affect the tax qualified status of any such Benefit Plan;

 

(d)                                 The actuarial present value of all accrued benefits under each such Benefit Plan subject to Title IV of ERISA did not, as of the latest valuation date of such Benefit Plan, exceed the then current value of the assets of such Benefit Plan allocable to such accrued benefits, all as based upon the actuarial assumptions and methods currently used for such Benefit Plan;

 

(e)                                  None of such Benefit Plans that are “employee welfare benefit plans” as defined in Section 3(1) of ERISA provides for continuing benefits or coverage for any participant or beneficiary of any participant after such participant’s termination of employment, except as required by applicable law; and

 

(f)                                    Neither the Corporation nor any trade or business (whether or not incorporated) under common control with the Corporation within the meaning of Section 4001 of ERISA has, or at any time has had, any obligation to contribute to any “multiemployer plan” as defined in Section 3(37) of ERISA.

 

5.17                           Use of Proceeds. The net proceeds received by the Corporation from the sale of the Series A-1 Preferred Stock shall be used by the Corporation generally for the purposes set forth in Schedule 5.17 attached hereto.

 

5.18                           Permits and Other Rights; Compliance with Laws.  The Corporation has all permits, licenses, registrations, certificates, accreditations, orders, authorizations  or approvals from any Governmental Entity (“Permits”) issued to or held by the Corporation.  Other than the Permits listed on Schedule 5.18, there are no Permits, the loss or revocation of which would result in a Corporation Material Adverse Effect.  The Corporation has all Permits necessary to permit it to own its properties and to conduct its Business as presently conducted and as proposed to be conducted.  Each such Permit is in full force and effect and, to the Corporation’s Knowledge, no suspension or cancellation of such Permit is threatened and there is no basis for believing that such Permit will not be renewable upon expiration.  The Corporation is in compliance in all material respects under each such Permit, and the transactions contemplated by this Agreement will not cause a violation under any of such Permits.  The Corporation is in compliance in all material respects with all provisions of the laws and governmental rules and regulations applicable to its Business, properties and assets, and to the products and services sold by it, including, without limitation, all such rules, laws and regulations relating to fair

 

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employment practices and public or employee safety. The Corporation is in compliance with the Clinical Laboratories Improvement Act of 1967, as amended.

 

5.19                           Insurance. Schedule 5.19 sets forth a true and complete list of all policies or binders of fire, theft, liability, product liability, workmen’s compensation, vehicular, directors’ and officers’ and other insurance held by or on behalf of the Corporation.  Such policies and binders are in full force and effect, are in the amounts not less than is customarily obtained by corporations of established reputation engaged in the same or similar business and similarly situated and are in conformity with the requirements of all leases or other agreements to which the Corporation is a party and are valid and enforceable in accordance with their terms.  The Corporation’s product liability insurance covers its clinical trials.  The Corporation is not in default with respect to any provision contained in such policy or binder nor has the Corporation failed to give any notice or present any claim under any such policy or binder in due and timely fashion.  There are no outstanding unpaid claims under any such policy or binder.  The Corporation has not received notice of cancellation or non-renewal of any such policy or binder.

 

5.20                           Board of Directors. Except as provided in Schedule 5.20 attached hereto, the Corporation has not extended any offer or promise or entered into any agreement, arrangement, understanding or otherwise, whether written or oral, with any person or entity by which the Corporation has agreed to allow such person or entity to participate, in any way, in the affairs of the Board of Directors, including without limitation, appointment or nomination as a member, or right to appear at, or receive the minutes of a meeting of the Board of Directors.

 

5.21                           Books and Records.  The minute books of the Corporation contain complete and accurate records of all meetings and other corporate actions of the stockholders and Boards of Directors and committees thereof.  The stock ledger of the Corporation is complete and accurate and reflects all issuances, transfers, repurchases and cancellations of shares of capital stock of the Corporation.

 

5.22                           Environmental Matters.

 

(a)                                  The Corporation has not used, generated, manufactured, refined, treated, transported, stored, handled, disposed, transferred, produced, processed or released (together defined as “Release”) any Hazardous Materials (as hereinafter defined) in any manner or by any means in violation of any Environmental Laws (as hereinafter defined). To the Corporation’s Knowledge, neither the Corporation nor any prior owner or tenant of the Property (as hereinafter defined) has Released any Hazardous Material or other pollutant or effluent into, on or from the Property in a way which can pose a risk to human health or the environment, nor is there a threat of such Release. As used herein, the term “Property” shall include, without limitation, land, buildings and laboratory facilities owned or leased by the Corporation or as to which the Corporation now has any duties, responsibilities (for clean-up, remedy or otherwise) or liabilities under any Environmental Laws, or as to which the Corporation or any subsidiary of the Corporation may have such duties, responsibilities or liabilities because of past acts or omissions of the Corporation or any such subsidiary or their predecessors, or because the Corporation or any such subsidiary or their predecessors in the past was such an owner or operator of, or some other relationship with, such land, buildings and/or laboratory facilities, all as more fully described in Schedule 5.22(a) of the Corporation’s Disclosure Schedule. The term

 

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“Hazardous Materials” shall mean (A) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “hazardous air pollutants,” “contaminants,” “toxic chemicals,” “toxins,” “hazardous chemicals,” “extremely hazardous substances,” “pesticides,” “oil” or related materials as defined in any applicable Environmental Law, or (B) any petroleum or petroleum products, oil, natural or synthetic gas, radioactive materials, asbestos-containing materials, urea formaldehyde foam insulation, radon, and any other substance defined or designated as hazardous, toxic or harmful to human health, safety or the environment under any Environmental Law.

 

(b)                                 No notice of lien under any Environmental Laws has been filed against any Property of the Corporation.

 

(c)                                  The use of the Property complies with lawful, permitted and conforming uses in all material respects under all applicable building, tire, safety, subdivision, zoning, sewer, environmental, health, insurance and other such laws, ordinances, rules, regulations and plan approval conditions of any governmental or public body or authority relating to the use of the Property.

 

(d)                                 Except as described in Schedule 5.22(d) of the Corporation’s Disclosure Schedule, to the Corporation’s Knowledge, the Property does not contain: (i) asbestos in any form; (ii) urea formaldehyde foam insulation; (iii) transformers or other equipment which contain dialectic fluid containing levels of polychlorinated biphenyls; (iv) radon; or (v) any other chemical, material or substance, the exposure to which is prohibited, limited or regulated by a federal, state or local government agency, authority or body, or which, even if not so regulated, to the Corporation’s Knowledge after reasonable investigation, may or could pose a hazard to the health and safety of the occupants of the Property or the owners or occupants of property adjacent to or in the vicinity of the Property.

 

(e)                                  The Corporation has not received written notice that the Corporation is a potentially responsible party for costs incurred at a cleanup site or corrective action under any Environmental Laws.  The Corporation has not received any written requests for information in connection with any inquiry by any Governmental Authority (as defined hereinafter) concerning disposal sites or other environmental matters. As used herein, “Governmental Authority” shall mean any nation or government, any federal, state, municipal, local, provincial, regional or other political subdivision thereof and any entity or person exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government, Schedule 5.22(e) of the Corporation’s Disclosure Schedule identifies all locations where Hazardous Materials used in whole or in part by the Business of the Corporation or resulting from the Business, facilities or Property of the Corporation have been stored or disposed of by or on behalf of the Corporation. As used herein, “Environmental Laws” shall mean all applicable federal, state and local laws, ordinances, rules and regulations that regulate, fix liability for, or otherwise relate to, the handling, use (including use in industrial processes, in construction, as building materials, or otherwise), storage and disposal of hazardous and toxic wastes and substances, and to the discharge, leakage, presence, migration, threatened Release or Release (whether by disposal, a discharge into any water source or system or into the air, or otherwise) of any pollutant or effluent. Without limiting the preceding sentence, the term

 

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“Environmental Laws” shall specifically include the following federal and state laws, as amended:

 

FEDERAL

 

Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the Toxic Substance Control Act, 15 U.S.C. § 2601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 1001 et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801 et seq.; the Atomic Energy Act, as amended 42 U.S.C. § 2011 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. § 651 et seq.; the Federal Food, Drug and Cosmetic Act, as amended 21 U.S.C. § 301 et seq. (insofar as it regulates employee exposure to Hazardous Substances); the Clean Air Act, 42 U.S.C. 7401 et. seq.

 

STATE

 

MASSACHUSETTS ENVIRONMENTAL STATUTES

 

Massachusetts Clean Waters Act, Mass. Gen. L. Ch. 21, Section 26, et. seq., and regulations thereto; Massachusetts Solid Waste Disposal Laws. Mass. Gen. L. Ch. 16, Section 18, et. seq., and Ch. 111, Section 1 05A, and regulations thereto; Massachusetts Oil and Hazardous Materials Release Prevention and Response Act, Mass. Gen. L., Ch. 21 E, Section 1, et. seq., and regulations thereto; Massachusetts Solid Waste Facilities Law, Mass. Gen. L., Ch. 21H, Section 1, et. seq., and regulations thereto; Massachusetts Toxic Use Reduction Act, Mass. Gen. L., Ch. 211, Section 1, et. seq., and regulations thereto; Massachusetts Litter Control Laws, Mass. Gen. L. Ch. 111. Section 1 50A, et. seq., and regulations thereto; Massachusetts Wetlands Protection Laws, Mass. Gen. L., Ch. 130, Section 105, et. seq., and regulations thereto; Massachusetts Environmental Air Pollution Control Law, Mass. Gen. L.. Ch. 101, Section 2B, et.  seq., and regulations thereto; Massachusetts Environmental Policy Act, Mass. Gen. L. Ch. 30, Section 61, et. seq., and regulations thereto; and Massachusetts Hazardous Waste Laws, Mass. Gen. L. Ch. 21C, Section 1, et. seq., and regulations thereto.

 

(f)                                    The Corporation has maintained all environmental and operating documents and records substantially in the manner and for the time periods required by the Environmental Laws and any other laws, regulations or orders and has never conducted an environmental audit except as disclosed in Schedule 5.22(f) of the Corporation’s Disclosure

 

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Schedule. For purposes of this Section 5.22(f), an environmental audit shall mean any evaluation, assessment, study or test performed at the request of or on behalf of a Governmental Authority, including, but not limited to, a public liaison committee, but does not include normal or routine inspections, evaluations or assessments which do not relate to a threatened or pending charge, restraining order or revocation of any permit, license, certificate, approval, authorization, registration or the like issued pursuant to the Environmental Laws and any other law, regulation or order.

 

(g)                                 To the Corporation’s Knowledge, no part of the Property of the Corporation is (i) located within any wetlands area, (ii) subject to any wetlands regulations, or (iii) included in or is proposed for inclusion in, or abuts any property included in or proposed for inclusion in, the National Priority List or any similar state lists.

 

5.23                           FDA Matters.

 

(a)                                  The Corporation has (i) complied in all material respects with all applicable laws, regulations and specifications with respect to the manufacture, design, sale, storing, labeling, testing, distribution, inspection, promotion and marketing of all of the Corporation’s products and product candidates and the operation of manufacturing facilities promulgated by the U.S. Food and Drug Administration (the “FDA”) or any corollary entity in any other jurisdiction and (ii) conducted, and in the case of any clinical trials conducted on its behalf, caused to be conducted, all of its clinical trials with reasonable care and in compliance in all material respects with all applicable laws and the stated protocols for such clinical trials.

 

(b)                                 All of the Corporation’s submissions to the FDA and any corollary entity in any other jurisdiction, whether oral, written or electronically delivered, were true, accurate and complete in all material respects as of the date made, and remain true, accurate and complete in all material respects and do not misstate any of the statements or information included therein, or omit to state a fact necessary to make the statements therein not materially misleading.

 

(c)                                  The Corporation has not committed any act, made any statement or failed to make any statement that would breach the FDA’s policy with respect to “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar laws, rules or regulations, whether under the jurisdiction of the FDA or a corollary entity in any other jurisdiction, and any amendments or other modifications thereto.  Neither the Corporation nor, to the Corporation’s Knowledge, any officer, employee or agent of the Corporation has been convicted of any crime or engaged in any conduct that would reasonably be expected to result in (i) debarment under 21 U.S.C. Section 335a or any similar state or foreign law or regulation or (ii) exclusion under 42 U.S.C. Section 1320a 7 or any similar state or foreign law or regulation, and neither the Corporation nor, to the Corporation’s Knowledge, any such person has been so debarred or excluded.

 

(d)                                 The Corporation has not sold or marketed any products prior to receiving any required or necessary approvals or consents from any federal or state governmental authority, including but not limited to the FDA under the Food, Drug & Cosmetics Act of 1976, as amended, and the regulations promulgated thereunder, or any corollary entity in any

 

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jurisdiction.  The Corporation has not received any notice of, nor is the Corporation aware of any, actions, citations, warning letters or Section 305 notices from the FDA or any corollary entity.

 

5.24                           Compliance with Privacy Laws

 

(a)                                  For purposes of this Agreement:

 

(i)                                     “Foreign Privacy Laws” shall mean (a) the Directive 95/46/EC of the Parliament and of the Council of the European Union of 24 October 1995 on the protection of individuals with regard to the collection, use, disclosure, and processing of personal data and on the free movement of such data, (b) the corresponding national rules, regulations, codes, orders, decrees and rulings thereunder of the member states of the European Union and (c) any rules, regulations, codes, orders, decree, and rulings thereunder related to privacy, data protection or data transfer issues implemented in other countries.

 

(ii)                                  “US Privacy Laws” shall mean any rules, regulations, codes, orders, decrees, and rulings thereunder of any federal, state, regional, county, city, municipal or local government of the United States or any department, agency, bureau or other administrative or regulatory body obtaining authority from any of the foregoing that relate to privacy, data protection or data transfer issues, including all implementing laws, ordinances or regulations, including, without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended; the Children’s Online Privacy Protection Act (COPPA) of 1998, as amended; the Financial Modernization Act (Graham-Leach-Bliley Act) of 2000, as amended; the Fair Credit Reporting Act of 1970, as amended; the Privacy Act of 1974, as amended; the Family Education Rights and Privacy Act of 1974, as amended; the Right to Financial Privacy Act of 1978, as amended; the Privacy Protection Act of 1980, as amended; the Cable Communications Policy Act of 1984, as amended; the Electronic Communications Privacy Act of 1986, as amended; the Video Privacy Protection Act of 1988, as amended; the Telephone Consumer Protection Act of 1991, as amended; the Driver’s Privacy Protection Act of 1994, as amended; the Communications Assistance for Law Enforcement Act of 1994, as amended; the Telecommunications Act of 1996, as amended; and any implementing regulations related thereto;

 

(b)                                 The Corporation is currently and has been at all times in compliance in all material respects with all Foreign Privacy Laws and US Privacy Laws; and the Corporation has not received notice (in writing or otherwise) regarding violation of such Foreign Privacy Laws or US Privacy Laws.

 

(c)                                  No action, suit, proceeding, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against the Corporation, nor to the Corporation’s Knowledge threatened against the Corporation, relating to Foreign Privacy Laws and US Privacy Laws; nor has the Corporation incurred any material liabilities (whether accrued, absolute, contingent or otherwise) under any Foreign Privacy Laws or US Privacy Laws.

 

(d)                                 Health Insurance Portability and Accountability Act of 1996.  The Corporation (i) has assessed the applicability of the Health Insurance Portability and

 

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Accountability Act of 1996 and its implementing regulations (collectively, “HIPAA”) to the Corporation, including the fully insured and self-insured health plans that the Corporation sponsors or has sponsored or contributes to or has contributed to and health care provider activities, if any, in which the Corporation engages, (ii) has complied in all relevant respects with HIPAA, including 45 C.F.R. Part 160 and Subparts A and E of Part 164 (the “HIPAA Privacy Rule”), including but not limited to HIPAA Privacy Rule requirements relating to health information use and disclosure, notices of privacy rights, appointment of a Privacy Officer, adoption of a privacy policy, amendment of plan documents, and implementation of employee training as to the handling of protected health information, and (iii) if required under the HIPAA Privacy Rule, has entered into business associate agreements on behalf of the Corporation’s health plans covering the handling of protected health information with vendors and others categorized under HIPAA as business associates of the Corporation’s health plans.

 

(e)                                  Other Health Information Laws.  Without limiting the generality of Section 5.24(a) through Section 5.24(d),

 

(i)                                     the Corporation is currently, and has been at all times since its incorporation, in compliance in all material respects with all applicable health insurance, health information security, health information privacy, and health information transaction format Laws (each a “Health Information Law”), including, without limitation, any rules, regulations, codes, orders, decrees, and rulings thereunder of any federal, state, regional, county, city, municipal or local government, whether foreign or domestic, or any department, agency, bureau or other administrative or regulatory body obtaining authority from any of the foregoing; and

 

(ii)                                  no action, suit, proceeding, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against the Corporation nor to the Corporation’s Knowledge threatened against the Corporation, alleging any failure to comply with any Health Information Law; nor has the Corporation incurred any material liabilities (whether accrued, absolute, contingent or otherwise) under any Health Information Law.

 

5.25                           Health Care and Affiliated Transactions; Stark and Anti-Kickback Laws.

 

(a)                                  For purposes of the Stark II law and implementing regulations, if applicable, none of the directors or officers of the Corporation, or physicians employed by the Corporation, any other affiliates of the Corporation, or any of their respective immediate family members is (i) to the Corporation’s Knowledge, a partner or stockholder or has any other economic interest in any customer or supplier of the Corporation; (ii) a party to any transaction or contract with the Corporation; or (iii) indebted to the Corporation.  The Corporation has not paid, or incurred any obligation to pay, any fees, commissions or other amounts to and is not a party to any agreement, business arrangement or course of dealing with any firm of or in which any of directors, officers or affiliates of the Corporation, or any of their respective immediate family members, is a partner or stockholder or has any other economic interest, other than ownership of less than one percent (1%) of a publicly traded corporation.  No physician or family member of a physician has a financial relationship with the Corporation in violation of Section 1877 of the Social Security Act.  The Corporation has made all filings required by Section 1877 of the Social Security Act.

 

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(b)                                 The Corporation has complied with all applicable state and federal “anti-kickback,” fraud and abuse, false claims and related statutes and regulations.  The Corporation has received no notice of nor is otherwise aware of any inquiries, audits, subpoenas or other investigations involving Corporation by the U.S. Department of Health and Human Services, the U.S. Office of Inspector General, any U.S. Attorney’s Office or any other federal or state agency with jurisdiction over such statutes or regulations.

 

SECTION 6.                                Representations and Warranties of the Investors to the Corporation.

 

Each of the Investors, as to itself, represents and warrants to the Corporation as follows:

 

(a)                                  It is acquiring the Series A-1 Preferred Stock and, in the event it should acquire Reserved Common Shares upon conversion of the Series A-1 Preferred Stock, it will be acquiring such Reserved Common Shares, for its own account, for investment and not with a view to the distribution thereof within the meaning of the Securities Act.

 

(b)                                 It is an “accredited investor” as such term is defined in Rule 501(a) promulgated under the Securities Act.

 

(c)                                  It agrees that the Corporation may place a legend on the certificates delivered hereunder stating that the Series A-1 Preferred Stock and any Reserved Common  Shares have not been registered under the Securities Act, and, therefore, cannot be offered, sold or transferred unless they are registered under the Securities Act or an exemption from such registration is available and that the offer, sale or transfer of the Series A-1 Preferred Stock and any Reserved Common Shares is further subject to any restrictions imposed by this Agreement and the Stockholders’ Agreement.

 

(d)                                 The execution, delivery and performance by it of this Agreement have been duly authorized by all requisite action of it.

 

(e)                                  It further understands that the exemptions from registration afforded by Rule 144 and Rule 144A (the provisions of which are known to it) promulgated under the Securities Act depend on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts.

 

(f)                                    It has such knowledge and experience in business and financial matters and with respect to investments in securities of privately-held companies so as to enable it to understand and evaluate the risks of its investment in the Series A-1 Preferred Stock and form an investment decision with respect thereto.  It has been afforded the opportunity during the course of negotiating the transactions contemplated by this Agreement to ask questions of, and to secure such information from, the Corporation and its officers and directors as it deems necessary to evaluate the merits of entering into such transactions.

 

(g)                                 If it is a natural person, it has the power and authority to enter into this Agreement.  If it is not a natural person, it is duly organized and validly existing and has the power and authority to enter into this Agreement.  Any Investor which is a corporation, partnership or trust represents that it has not been organized, reorganized or recapitalized specifically for the purpose of acquiring the securities of the Corporation.

 

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(h)                                 It has adequate net worth and means of providing for its current needs and personal contingencies to sustain a complete loss of its investment in the Corporation.  The Investors understand that the foregoing representations and warranties shall be deemed material and to have been relied upon by the Corporation.

 

SECTION 7.                                Closing Conditions.

 

7.1                                 Deliveries; Conditions Precedent to Each Closing. The several obligations of each Investor to purchase and pay for the Series A-1 Preferred Stock at each Closing are subject to the satisfaction or waiver by such Investor or any waiver adopted or implemented pursuant to Section 19 of the following conditions precedent:

 

(a)                                  All proceedings to have been taken and all waivers and consents to be obtained in connection with the transactions contemplated by this Agreement shall have been taken or obtained, and all documents incidental thereto shall be satisfactory to each Investor and its counsel, and each Investor and its counsel shall have received copies (executed or certified, as may be appropriate) of all documents which such Investor or its counsel may reasonably have requested in connection with such transactions.

 

(b)                                 All legal matters incident to the purchase or acquisition of the Series A-1 Preferred Stock shall be satisfactory to each Investor’s counsel, and the Investors shall have received from Bingham McCutchen LLP a legal opinion addressed to the Investors and dated the date of each such Closing: (i) as to certain matters of law set forth in Sections 5.1, 5.2, 5.3, 5.4, 5.5 and 5.6(e) and (k) hereof; (ii) as to proceedings against the Corporation; and (iii) to the further effect that it is not necessary, and will not be necessary, as the case may be, to register the securities described in Sections 5.2(a) and (b) hereof under the Securities Act in connection with the issuance, sale and delivery of such securities.

 

(c)                                  All consents, permits, approvals, qualifications and/or registrations required to be obtained or effected under any applicable securities or “Blue Sky” laws of any jurisdiction shall have been obtained or effected.

 

7.2                                 Deliveries: Conditions Precedent to the Stage I Closing. The several obligations of each Investor to purchase and pay for the Stage I Preferred Shares at the Stage I Closing, are subject to the satisfaction or waiver by such Investor or any waiver adopted or implemented pursuant to Section 19 the following conditions precedent:

 

(a)                                  Except as set forth in the Disclosure Schedules hereto (as may be updated in connection with the Stage I Closing), on the Stage I Closing Date, the representations and warranties of the Corporation contained herein shall be true and correct on and as of the date of such Stage I Closing with the same force and effect as though such representations and warranties had been made on and as of such date (other than any representation or warranty made as of a particular date which shall be true and correct as of such date).

 

(b)                                 A duly executed Restated Certificate in the form of Exhibit A hereto shall have been filed with and accepted by the Secretary of State of Delaware and shall be effective as the Restated Certificate of the Corporation under the laws of the State of Delaware, and a Stockholders’ Agreement in form and substance attached hereto as Exhibit B shall have

 

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been executed by the Corporation and the requisite stockholders of the Corporation such that the Stockholders’ Agreement amends and restates in its entirety the Existing Stockholders’ Agreement, and such executed Stockholders’ Agreement shall have been delivered to the Investors.

 

(c)                                  The Corporation shall have delivered to the Investors a certificate or certificates, dated the Stage I Closing Date, of the Secretary of the Corporation certifying as to (i) the resolutions of the Corporation’s Board of Directors and stockholders authorizing the execution and delivery of this Agreement and the delivery to the Investors of the Stage I Preferred Shares, such other documents and instruments as may be required by this Agreement, and the consummation of the transactions contemplated hereby and thereby, (ii) that such resolutions were duly adopted and have not been rescinded or amended as of said date, (iii) the name and the signature of the officers of the Corporation authorized to sign, as appropriate, this Agreement and the other documents and certificates to be delivered pursuant to this Agreement by either the Corporation or any of its officers, (iv) the Restated Certificate and (v) the Corporation’s by-laws.

 

(d)                                 The Corporation shall have delivered to the Investors a certificate or certificates, dated the date of the Stage I Closing, of the President and Chief Executive Officer of the Corporation certifying as to the accuracy and completeness of the representations and warranties made by the Corporation pursuant to this Agreement as of each of the date of this Agreement and the date of such Stage I Closing.

 

(e)                                  The Corporation shall have entered into confidentiality and, to the extent allowable under arrangements or agreements between a consultant and any relevant institution with which he may be an employee, assignment of inventions agreements with all employees and consultants of the Corporation satisfactory in form and substance to the Investors and their counsel.

 

(f)                                    The Board of Directors of the Corporation shall be comprised of the following individuals (collectively, the “Director  Individuals”): Martin Muenchbach, Ansbert Gadicke, Jonathan Fleming, Richard Lyttle, Elizabeth Stoner, Alan Auerbach and Kurt Graves.

 

(g)                                 The Corporation shall have executed and delivered to each such director an indemnification agreement in the form attached hereto as Exhibit C.

 

(h)                                 The Corporation shall have executed and delivered to each Investor so requesting a management rights letter in a form acceptable to such Investor.

 

(i)                                     The holders of a majority of the shares of outstanding Series B Stock and Series C Stock, voting together as a single class, shall have consented to the entry into this Agreement and the Stockholders’ Agreement by the Corporation, and the transactions contemplated hereby and the holders of a majority of the shares of outstanding Series B Stock and Series C Stock, voting together as a single class, and the holders of a majority of the shares of outstanding Series A Stock, Series B Stock and Series C Stock, voting together as a single class, and a majority of all outstanding shares Common Stock and Preferred Stock shall have approved the Merger and the adoption of the Merger Agreement.

 

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(j)                                     The holders of a majority of the shares of outstanding Series B Stock and the Series C Stock, voting together as a single class, shall have waived all (i) rights of first refusal (i.e., preemptive rights) under the Existing Stockholders’ Agreement (including the notice requirements set forth therein) and (ii) antidilution adjustments, each in connection with issuance of Series A-1 Preferred Stock hereunder.

 

(k)                                  MPM Acquisition Corp., a Delaware corporation (“MPMAC”), shall have filed at least ten (10) days prior to such Stage I Closing a Schedule 14F-1 with the Securities and Exchange Commission pertaining to the election of all of the Director Individuals as the entire membership of the Board of Directors of MPMAC.

 

(l)                                     The Corporation shall have entered into a Stock Issuance Agreement and a Clinical Trial Services Agreement, each in the form of Exhibit D and Exhibit E, respectively, with Nordic Bioscience Clinical Development VII A/S.

 

7.3                                 Condition Subsequent to Stage I Closing.  As a condition subsequent to the Stage I Closing, the Corporation shall have consummated a merger whereby it shall merge with and into RHI Merger Corp., a Delaware corporation and wholly-owned subsidiary of MPMAC (“Merger  Sub”), immediately following the Stage I Closing (the “Merger”).  In the event the Corporation does not satisfy such condition subsequent by consummating the Merger immediately following the Stage I Closing, then the Corporation shall return to each Investor, upon the Corporation’s prior receipt from such Investor of any stock certificate representing the shares of Series A-1 Preferred Stock purchased at such Stage I Closing by such Investor (including any Additional A-1 Shares received by such Investor at the Stage I Closing), the entire aggregate cash Purchase Price paid by such Investor to the Corporation at such Stage I Closing, and the Corporation and such Investor shall thereafter deem the purchase and sale of shares of Series A-1 Preferred Stock (including any Additional A-1 Shares received by such Investor at the Stage I Closing) by such Investor at the Stage I Closing to be rescinded as if it never occurred and the Stockholders’ Agreement shall be amended to revert back in substance in all material respects to the prior version of such agreement in force and effect prior to the execution and delivery of the Stockholders’ Agreement.

 

7.4                                 Deliveries: Conditions Precedent to the Stage II Closing.  In addition to the continuing satisfaction or waiver of the conditions set forth in Section 7.1 hereof, the several obligations of each Investor to purchase and pay for the Stage II Preferred Shares at the Stage II Closing are subject to the satisfaction or waiver by such Investor or any waiver adopted or implemented pursuant to Section 19 of the following conditions precedent:

 

(a)                                  Except as set forth in the Disclosure Schedules hereto (as may be updated in connection with the Stage II Closing to disclose changes arising solely from (i) the operation of the business of the Corporation in the ordinary course of business since the date of this Agreement or (ii) transactions or agreements approved by the Board of Directors of the Corporation), the representations and warranties of the Corporation contained herein shall be true and correct on and as of the Stage II Closing Date with the same force and effect as though such representations and warranties had been made on and as of such date (other than any representation or warranty made as of a particular date which shall be true and correct as of such date). In addition, there shall have been no changes to the Disclosure Schedules with respect to

 

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the representations and warranties set forth in Sections 5.1, 5.2, 5.3, 5.4 and 5.5 other than changes with respect to Section 5.2 (Capitalization) arising from transactions or agreements approved by the Board of Directors of the Corporation.

 

(b)                                 The Investors shall have received certificates in the form identical to that in Sections 7.2(c) and 7.2(d) dated as of the Stage II Closing Date and as to the Stage II Preferred Shares and Stage II Closing.

 

(c)                                  The Merger shall have occurred following the Stage I Closing.

 

(d)                                 Since the Stage I Closing, there shall have been no event or events that individually or in the aggregate has had a Corporation Material Adverse Effect.

 

(e)                                  There shall have been no Liquidation or Special Liquidation (each as defined in the Certificate of Incorporation of the Corporation) and the Common Stock of the Corporation has not yet been listed for trading on a national securities exchange.

 

7.5                                 Deliveries: Conditions Precedent to the Stage III Closing. In addition to the continuing satisfaction or waiver of the conditions set forth in Section 7.1 hereof, the several obligations of each Investor to purchase and pay for the Stage III Preferred Shares at the Stage III Closing are subject to the satisfaction or waiver by such Investor or any waiver adopted or implemented pursuant to Section 19 of the following conditions precedent:

 

(a)                                  Except as set forth in the Disclosure Schedules hereto (as may be updated in connection with the Stage III Closing to disclose changes solely arising from (i) the operation of the business of the Corporation in the ordinary course of business since the date of this Agreement or (ii) transactions or agreements approved by the Board of Directors of the Corporation), the representations and warranties of the Corporation contained herein shall be true and correct on and as of the Stage III Closing Date with the same force and effect as though such representations and warranties had been made on and as of such date (other than any representation or warranty made as of a particular date which shall be true and correct as of such date). In addition, there shall have been no changes to the Disclosure Schedules with respect to the representations and warranties set forth in Sections 5.1, 5.2, 5.3, 5.4 and 5.5 other than changes with respect to Section 5.2 (Capitalization) arising from transactions or agreements approved by the Board of Directors of the Corporation.

 

(b)                                 The Investors shall have received certificates in the form identical to that in Sections 7.2(c) and 7.2(d) dated as of the Stage III Closing Date and as to the Stage III Preferred Shares and Stage III Closing.

 

(c)                                  The Merger shall have occurred following the Stage I Closing.

 

(d)                                 Since the Stage II Closing, there shall have been no event or events that individually or in the aggregate has had a Corporation Material Adverse Effect.

 

(e)                                  There shall have been no Liquidation and the Common Stock of the Corporation has not yet been listed for trading on a national securities exchange.

 

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7.6                                 Conditions to Obligations of the Corporation. It shall be a condition precedent to the obligations of the Corporation hereunder to be performed at the Stage I Closing, Stage II Closing or Stage III Closing, as the case may be, as to each Investor severally, but not jointly, that (a) the representations and warranties contained herein of each of the Investors hereunder shall be true and correct as of the date of each such Closing with the same force and effect as though such representations and warranties had been made on and as of such date, and that (b) each Investor who is an individual shall have completed, executed and delivered to the Corporation an accredited investor questionnaire, in a form provided by and to the reasonable satisfaction of the Corporation.

 

SECTION 8.                                Acknowledgement Regarding the Merger.

 

Each Investor hereby, in its capacity as a stockholder or future stockholder of the Corporation, (a) acknowledges that such Investor is aware that the Corporation has, prior to the execution and delivery of this Agreement, entered into an Agreement and Plan of Merger with MPMAC and Merger Sub with respect to the proposed Merger, an executed copy of which is attached hereto as Exhibit F (the “Merger  Agreement”), (b) acknowledges that such Investor has received and reviewed the Merger Agreement; and (c) understands that the Merger is a condition subsequent to the Stage I Closing and a condition precedent to each of the Stage II Closing and the Stage II Closing and that the Merger is expected to be consummated immediately following the Stage I Closing.

 

SECTION 9.                                Expenses and Fees.

 

The Corporation shall pay, and hold each of the Investors harmless against all liability for the payment of all costs and other expenses incurred by any Investor in connection with the Corporation’s performance of and compliance with all agreements and conditions contained herein or contemplated hereby on its part to be performed or complied with.  The Corporation further agrees that it will pay, and hold each of the Investors harmless from, any and all liability with respect to any stamp or similar taxes which may be determined to be payable in connection with the execution and delivery of this Agreement or any modification, amendment or alteration of the terms or provisions of this Agreement and that it will similarly pay, and hold each of the Investors harmless from, all issue taxes in respect of the issuance of the Series A-1 Preferred Stock to each of the Investors.  Either at or as soon as reasonably practicable following the Stage I Closing, expiration or termination of this Agreement or the closing of any other funding event pursuant to this Agreement as it may be amended, the Corporation shall pay the reasonable and documented fees and expenses of Wilmer Cutler Pickering Hale and Dorr LLP incurred in connection with the review and negotiation of this Agreement, all documents and agreements related hereto and the transactions contemplated hereby.

 

SECTION 10.                          Certain Covenants.

 

Without the prior written consent of the holders of a majority of the shares of Series A-1 Preferred Stock issued and outstanding at the time (the “Majority  Investors”), the Corporation shall not issue any shares of Series A-1 Preferred Stock or any securities convertible into shares of Series A-1 Preferred Stock other than (i) Excluded Stock (as defined in the Certificate of Incorporation of the Corporation), (ii) pursuant to the terms of this Agreement or (iii) pursuant to

 

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agreements, warrants or arrangements described on Schedule 10 hereof.

 

SECTION 11.                          Brokers or Finders.

 

The Corporation represents and warrants to each of the Investors, and each of the Investors, as to itself, represents and warrants to the Corporation, that, other than Leerink Swann LLC, which has acted as advisor to the Corporation in connection with the transactions contemplated by this Agreement, no person or entity has or will have, as a result of the transactions contemplated by this Agreement, any right, interest or valid claim against or upon the Corporation or the Investors for any commission, fee or other compensation as a finder or broker because of any act or omission by the Corporation or the Investors or by any agent of the Corporation or the Investors.

 

SECTION 12.                          Exchanges Lost. Stolen or Mutilated Certificates.

 

Upon surrender by any Investor to the Corporation of shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock or Reserved Common Shares or any shares of Common Stock issued upon conversion of any Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock purchased or acquired by such Investor hereunder, the Corporation, at its expense, will issue in exchange therefor, and deliver to such Investor, a new certificate or certificates representing such shares in such denominations as may be requested by such Investor. Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any certificate representing any shares of Common Stock or Preferred Stock purchased or acquired by any Investor hereunder and, in case of any such loss, theft or destruction, upon delivery of any indemnity agreement satisfactory to the Corporation, or in case of any such mutilation, upon surrender and cancellation of such certificate, the Corporation, at its expense, will issue and deliver to such Investor a new certificate for such shares of Common Stock or Preferred Stock, as applicable, of like tenor, in lieu of such lost, stolen or mutilated certificate.

 

SECTION 13.                          Survival of Representations and Warranties.

 

The representations and warranties set forth in Sections 5 and 6 hereof shall survive the Closings indefinitely.

 

SECTION 14.                          Indemnification.

 

The Corporation shall indemnify, defend and hold each of the Investors harmless against any and all liabilities, loss, cost or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses), arising from, relating to, or connected with the untruth, inaccuracy or breach of any statements, representations, warranties or covenants of the Corporation contained herein, including, but not limited to, all statements, representations, warranties or covenants concerning environmental matters.

 

SECTION 15.                          Remedies.

 

In case any one or more of the representations, warranties, covenants and/or agreements set forth in this Agreement shall have been breached by any party hereto, the party or parties

 

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entitled to the benefit of such representations, warranties, covenants or agreements may proceed to protect and enforce its or their rights either by suit in equity and/or action at law, including, but not limited to, an action for damages as a result of any such breach and/or an action for specific performance of any such covenant or agreement contained in this Agreement.  The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or law.  No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

 

SECTION 16.                          Successors and Assigns.

 

(a)                                  Except as otherwise expressly provided herein, this Agreement shall bind and inure to the benefit of the Corporation and each of the Investors and the respective permitted successors and assigns of each of the Investors and the permitted successors and assigns of the Corporation. Subject to the provisions of Sections 3.1, 3.2, 3.3 and 3.10 of the Stockholders’ Agreement, this Agreement and the rights and duties of the Investors set forth herein may be freely assigned, in whole or in part, by the Investors.  Neither this Agreement nor any of the rights or duties of the Corporation set forth herein shall be assigned by the Corporation, in whole or in part, without having first received the written consent of the Majority Investors.  Notwithstanding the foregoing, upon the consummation of the Merger and with respect to all times following the consummation of the Merger, (i) the Corporation shall, and hereby does, assign all of its rights, duties and obligations under this Agreement to MPMAC and (ii) all references to the “Corporation” in this Agreement and to its capital stock or any other aspects of the Corporation shall be deemed to be references to MPMAC and its capital stock and other applicable aspects of MPMAC.  MPMAC, by executing this Agreement as an anticipated successor and assign to the Corporation, does hereby assume, effective upon the consummation of the Merger, all of the Corporation’s rights, duties and obligations under this Agreement, including the obligation to issue to the Investors at the Stage II Closing and the Stage III Closing shares of MPMAC capital stock with rights, preferences and privileges substantially similar to those of the Series A-1 Preferred Stock and Radius will be released from its duties and obligations under this Agreement.  All parties to this Agreement, including the Majority Investors, hereby consent to the assignment and assumption contemplated between the Corporation and MPMAC set forth in this paragraph.

 

(b)                                 Notwithstanding any term or condition contained herein to the contrary, Saints Capital VI, L.P. (“Saints”) may assign all of its rights and obligations hereunder to one or a combination of OBP IV — Holdings LLC and mRNA II — Holdings LLC solely upon written notice provided to the Corporation and countersigned by the assignee who shall agree to assume all of Saints’ rights and obligations hereunder on a prospective basis, at which point Saints shall have no further rights, obligations or liabilities under this Agreement (except with respect to liabilities related to breaches of this Agreement by Saints occurring prior to the date of any such assignment).

 

SECTION 17.                          Entire Agreement.

 

This Agreement, together with the other writings referred to herein, including the Restated Charter and the Stockholders’ Agreement, or delivered hereunder and which form a part

 

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hereof, contains the entire agreement among the parties with respect to the subject matter hereof and amends, restates and supersedes all prior and contemporaneous arrangements or understandings, whether written or oral, with respect thereto.

 

SECTION 18.                     Notices.

 

All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or duly sent by first class registered, certified or overnight mail, postage prepaid, or telecopied or e-mailed with a confirmation copy by regular mail, addressed, telecopied or e-mailed, as the case may be, to such party at the address, telecopier number or e-mail address, as the case may be, set forth below or such other address, telecopier number or e-mail address, as the case may be, as may hereafter be designated in writing by the addressee to the addressor listing all parties:

 

(i)                                     if to the Corporation. to:

 

Radius Health, Inc.

201 Broadway

Sixth Floor

Cambridge, MA 02139

Attention: B. Nicholas Harvey

Telecopier: (617) 444-1834
 E-mail: bnharvey@radiuspharm.com

 

with a copy to:

 

Bingham McCutchen

One Federal Street

Boston. MA 02110-1726

Attention: Julio E. Vega, Esq.

Telecopier: (617) 951-8736
 E-mail:  Julio.vega@bingham.com

 

(ii)                                  if to Investors, as set forth on Schedule 1.

 

All such notices, requests, consents and other communications shall be deemed to have been received: (a) in the case of personal delivery, on the date of such delivery; (b) in the case of mailing, on the third business day following the date of such mailing; (c) in the case of overnight mail, on the first business day following the date of such mailing; (d) in the case of facsimile transmission, when confirmed by facsimile machine report; or (e) in the case of e-mail delivery, when confirmed by the sender’s e-mail system.

 

SECTION 19.                     Changes.

 

The terms and provisions of this Agreement may not be modified or amended, or any of the provisions hereof waived, temporarily or permanently, except pursuant to a writing executed by a duly authorized representative of the Corporation, MPMAC and the Majority Investors.

 

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Notwithstanding the foregoing, any modification or amendment to this Agreement that would adversely affect one Investor in a manner that is directed specifically to such Investor, rather than to all Investors, shall be subject to the approval of each such Investor.  It is understood that this separate consent would not be required if any such adverse effect results from the application of criteria uniformly to all Investors even if such application may affect Investors differently.

 

SECTION 20.                          Counterparts.

 

This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

 

SECTION 21.                          Headings.

 

The headings of the various sections of this Agreement have been inserted for convenience of reference only  and shall not be deemed to be a part of this Agreement.

 

SECTION 22.                          Nouns and Pronouns.

 

Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa.

 

SECTION 23.                          Severability.

 

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 24.                          Further Assurances.

 

The parties shall cooperate reasonably with each other in  connection with any steps required to be taken as part of their respective obligations under this Agreement, and shall furnish upon request to each other such further information, execute and deliver to each other such other documents, and do such other acts and things, all as the other party may reasonably request for purposes of carrying out the intend of this Agreement and consummating the transactions contemplated hereby.

 

SECTION 25.                          Governing Law.

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, excluding choice of laws rules thereof.

 

(Remainder of Page Left Intentionally Blank.)

 

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(Signature Page to Stock Purchase Agreement)

 

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

 

	
 
    	
THE   CORPORATION:
    
	
 
    	
 
    
	
 
    	
RADIUS   HEALTH, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   C. Richard Edmund Lyttle
    
	
 
    	
 
    	
Title:   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
As   an anticipated successor and assign to the Corporation under Section 16   hereof:
    
	
 
    	
 
    	
 
    
	
 
    	
MPM   ACQUISITION CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   C. Richard Edmund Lyttle
    
	
 
    	
 
    	
Title:   President
    

 

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INVESTORS:
    
	
 
    	
 
    
	
 
    	
BB   Biotech Ventures II, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BB   Biotech Growth N.V.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
HEALTHCARE   VENTURES VII, L.P.
    
	
 
    	
By:   
    	
HealthCare   Partners VII, L.P.
    
	
 
    	
 
    	
Its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HEALTHCARE PRIVATE EQUITY   LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

38

 

	
 
    	
MPM   BIOVENTURES III, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
MPM BioVentures III GP, L.P.,
    
	
 
    	
 
    	
 its General   Partner
    
	
 
    	
By:
    	
MPM   BioVentures III LLC,
    
	
 
    	
 
    	
 its General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Ansbert Gadicke
    
	
 
    	
 
    	
Title:   Series A Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MPM   BIOVENTURES III-QP, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
MPM   BioVentures III GP, L.P.,
    
	
 
    	
 
    	
 its General Partner
    
	
 
    	
By:
    	
MPM   BioVentures III LLC,
    
	
 
    	
 
    	
 its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Ansbert Gadicke
    
	
 
    	
 
    	
Title:   Series A Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MPM BIOVENTURES III GMBH &   CO. BETEILIGUNGS KG
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
MPM BioVentures III GP, L.P.,
    
	
 
    	
 
    	
 in its capacity as the Managing Limited   Partner
    
	
 
    	
By:
    	
MPM   BioVentures III LLC,
    
	
 
    	
 
    	
 its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Ansbert Gadicke
    
	
 
    	
 
    	
Title:   Series A Member
    

 

39

 

	
 
    	
MPM   BIOVENTURES III PARALLEL FUND, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
MPM   BioVentures III GP, L.P.,
    
	
 
    	
 
    	
 its General Partner
    
	
 
    	
By:
    	
MPM   BioVentures III LLC,
    
	
 
    	
 
    	
 its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Ansbert Gadicke
    
	
 
    	
 
    	
Title:   Series A Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MPM ASSET MANAGEMENT INVESTORS 2003 BVIII LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Ansbert Gadicke
    
	
 
    	
 
    	
Title:   Series A Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MPM   BIO IV NVS STRATEGIC FUND, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
MPM   BioVentures IV GP LLC,
    
	
 
    	
 
    	
its   General Partner
    
	
 
    	
By:
    	
MPM   BioVentures IV LLC,
    
	
 
    	
 
    	
its   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Ansbert Gadicke
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SAINTS   CAPITAL VI, L.P.,
    
	
 
    	
a   limited partnership
    
	
 
    	
 
    
	
 
    	
By:
    	
Saints   Capital VI LLC,
    
	
 
    	
a   limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

40

 

	
 
    	
BROOKSIDE   CAPITAL PARTNERS FUND, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
The   Breining Family Trust dated August 15, 2003
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
The   Richman Trust dated 2/6/83
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   Douglas D. Richman
    
	
 
    	
Title:   Co-Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   Eva A. Richman,
    
	
 
    	
Title:   Co-Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLCOME TRUST LIMITED, AS   TRUSTEE OF THE WELLCOME TRUST
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Dr. Raymond   F. Schinazi
    

 

41

 

	
 
    	
 
    
	
 
    	
H.   Watt Gregory III
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
The   David E. Thompson Revocable Trust
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

42

 

Schedule I

 

	
Name of Investors
    	
 
    	
Address of Record
    	
 
    	
Stage I
   Preferred
   Shares
    	
 
    	
Additional
   A-1
   Shares
    	
 
    	
Stage II
   Preferred
   Shares
    	
 
    	
Stage III
   Preferred
   Shares
    	
 
    
	
BB Biotech Ventures II, L.P. 
    	
 
    	
Trafalgar   Court
   Les Banques
   St. Peter Port
   Guernsey
   Channel Islands
   GY1 3QL

With   copies to
   Martin Münchbach
   Bellevue Asset Management
   Seestrasse 16
   8700 Küsnacht
   Switzerland
    	
 
    	
204,700
    	
 
    	
231,265
    	
 
    	
204,700
    	
 
    	
204,700
    	
 
    
	
BB Biotech Growth N.V.
    	
 
    	
Snipweg   26
   Curaçao
    	
 
    	
409,400
    	
 
    	
 
    	
 
    	
409,400
    	
 
    	
409,400
    	
 
    
	
HealthCare Ventures VII, L.P. 
    	
 
    	
44   Nassau Street
   Princeton, NJ 08542
    	
 
    	
196,512
    	
 
    	
 
    	
 
    	
196,512
    	
 
    	
196,511
    	
 
    
	
MPM BioVentures III, L.P.
    	
 
    	
c/o   MPM Capital
   200 Clarendon Street
   54th Floor
   Boston, MA 02116
    	
 
    	
34,371
    	
 
    	
47,854
    	
 
    	
34,371
    	
 
    	
34,371
    	
 
    
	
MPM BioVentures III - QP, L.P
    	
 
    	
c/o   MPM Capital
   200 Clarendon Street
   54th Floor
   Boston, MA 02116
    	
 
    	
511,191
    	
 
    	
711,714
    	
 
    	
511,191
    	
 
    	
511,191
    	
 
    

 

 

 

	
Name of Investors
    	
 
    	
Address of Record
    	
 
    	
Stage I
   Preferred
   Shares
    	
 
    	
Additional
   A-1
   Shares
    	
 
    	
Stage II
   Preferred
   Shares
    	
 
    	
Stage III
   Preferred
   Shares
    	
 
    
	
MPM   BioVentures III GmbH & Co. Beteiligungs   KG
    	
 
    	
c/o   MPM Capital
   200 Clarendon Street
   54th Floor
   Boston, MA 02116
    	
 
    	
43,202
    	
 
    	
60,149
    	
 
    	
43,202
    	
 
    	
43,202
    	
 
    
	
MPM   BioVentures III Parallel Fund, L.P.
    	
 
    	
c/o   MPM Capital
   200 Clarendon Street
   54th Floor
   Boston, MA 02116
    	
 
    	
15,438
    	
 
    	
21,494
    	
 
    	
15,438
    	
 
    	
15,438
    	
 
    
	
MPM   Asset Management Investors 2003 BVIII LLC
    	
 
    	
c/o   MPM Capital
   200 Clarendon Street
   54th Floor
   Boston, MA 02116
    	
 
    	
9,898
    	
 
    	
13,783
    	
 
    	
9,898
    	
 
    	
9,898
    	
 
    
	
MPM   Bio IV NVS Strategic Fund, L.P. 
    	
 
    	
c/o   MPM Capital
   200 Clarendon Street
   54th Floor
   Boston, MA 02116
    	
 
    	
302,683
    	
 
    	
237,330
    	
 
    	
302,683
    	
 
    	
302,682
    	
 
    
	
Saints Capital VI, L.P. 
    	
 
    	
475   Sansome Street,
   Suite 1850
   San Francisco, CA 94111
   Attention: Scott Halsted 

 

With   copy to:
   Oxford Bioscience Partners
   222 Berkley Street
   Suite 1650
   Boston, MA 02116
    	
 
    	
163,760
    	
 
    	
 
    	
 
    	
163,760
    	
 
    	
163,760
    	
 
    

 

 

	
Name of Investors
    	
 
    	
Address of Record
    	
 
    	
Stage I
   Preferred
   Shares
    	
 
    	
Additional
   A-1
   Shares
    	
 
    	
Stage II
   Preferred
   Shares
    	
 
    	
Stage III
   Preferred
   Shares
    	
 
    
	
The   Wellcome Trust Limited as trustee of the Wellcome Trust 
    	
 
    	
215   Euston Road
   London NW1 2BE
   England
    	
 
    	
255,223
    	
 
    	
 
    	
 
    	
255,223
    	
 
    	
255,223
    	
 
    
	
Dr. Raymond F. Schinazi 
    	
 
    	
2881   Peachtree Road, NE
   Unit 1403
   Atlanta, GA 30305
    	
 
    	
3,658
    	
 
    	
3,917
    	
 
    	
3,658
    	
 
    	
3,657
    	
 
    
	
Healthcare   Private Equity Limited Partnership 
    	
 
    	
c/o   Scottish Widows
   Investment Partnership
   Edinburgh One
   Morrison Street
   Edinburgh EH3 8BE
   U.K.
    	
 
    	
68,059
    	
 
    	
 
    	
 
    	
68,059
    	
 
    	
68,060
    	
 
    
	
Brookside   Capital Partners Fund, L.P. 
    	
 
    	
Attn:   Brookside Legal
   Department
   Bain Capital, LLC
   111 Huntington Avenue
   Boston, MA 02199
    	
 
    	
409,400
    	
 
    	
 
    	
 
    	
409,400
    	
 
    	
409,400
    	
 
    
	
H. Watt Gregory, III 
    	
 
    	
Suite 200
   124 West Capitol Avenue
   Little Rock, Arkansas 72201
    	
 
    	
1,329
    	
 
    	
 
    	
 
    	
1,329
    	
 
    	
1,330
    	
 
    
	
The Breining Family Trust 2/15/03 
    	
 
    	
PO Box 9540
    Rancho Santa Fe, CA 92067
    	
 
    	
407
    	
 
    	
 
    	
 
    	
407
    	
 
    	
408
    	
 
    
	
David E. Thompson Revocable Trust 
    	
 
    	
1045   Mason Street, # 501
   San Francisco, CA 94108
    	
 
    	
1,964
    	
 
    	
 
    	
 
    	
1,964
    	
 
    	
1,965
    	
 
    

 

 

	
Name of Investors
    	
 
    	
Address of Record
    	
 
    	
Stage I
   Preferred
   Shares
    	
 
    	
Additional
   A-1
   Shares
    	
 
    	
Stage II
   Preferred
   Shares
    	
 
    	
Stage III
   Preferred
   Shares
    	
 
    
	
The Richman Trust dated 2/6/83 
    	
 
    	
9551   La Jolla Farms Road
   La Jolla, CA 92037
    	
 
    	
650
    	
 
    	
 
    	
 
    	
650
    	
 
    	
650
    	
 
    
	
TOTAL:
    	
 
    	
 
    	
 
    	
2,631,845
    	
 
    	
1,327,506
    	
 
    	
2,631,845
    	
 
    	
2,631,846

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}]]