Document:

Unassociated Document

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (the “Agreement”) is made and entered into as of
      this 4th
      day of
      June, 2007 by and among Osteologix, Inc., a Delaware corporation (the
“Company”), and the “Holders” executing this Agreement and named in that certain
      Purchase Agreement by and among the Company and the Holders dated the date
      hereof (the “Purchase Agreement”).

     

    The
      parties hereby agree as follows:

     

    1. Certain
      Definitions.

     

    As
      used
      in this Agreement, the following terms shall have the following
      meanings:

     

    “Affiliate”
means,
      with respect to any person, any other person which directly or indirectly
      controls, is controlled by, or is under common control with, such
      person.

     

    “Business
      Day”
means
      a
      day, other than a Saturday or Sunday, on which banks in New York City and San
      Francisco, California are open for the general transaction of
      business.

     

    “Common
      Stock”
shall
      mean the Company’s common stock, par value $0.0001 per share, and any securities
      into which such shares may hereinafter be reclassified.

     

    “Holders”
shall
      mean collectively, the Purchasers and Nordic.

     

    “Major
      Purchaser”
shall
      mean any Holder (other than Nordic) that purchased more than 300,000 Units
      pursuant to the Purchase Agreement. For purposes of this Agreement, the Shares
      purchased by a Holder shall include the Shares of all of its related persons
      that have also purchased Shares under the Purchase Agreement.

     

    “Nordic”
means
      Nordic Biotech K/S, a Danish limited partnership, Nordic Biotech Advisors and
      their respective successors and assigns or permitted transferees who are
      subsequent holders of Registrable Securities.

     

    “Purchasers”
shall
      mean the Purchasers identified in the Purchase Agreement (other than
Nordic)
      and any
      successor and assigns or permitted transferee of any Purchaser who is a
      subsequent holder of any Registrable Securities.

     

    “Prospectus”
shall
      mean the prospectus included in any Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the 1933 Act), as amended or supplemented by any
      prospectus supplement, with respect to the terms of the offering of any portion
      of the Registrable Securities covered by such Registration Statement and by
      all
      other amendments and supplements to the Prospectus, including post-effective
      amendments and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.

     

    “Register,”
      “registered”
and
      “registration”
refer
      to a registration made by preparing and filing a Registration Statement or
      similar document in compliance with the 1933 Act (as defined below), and the
      declaration or ordering of effectiveness of such Registration Statement or
      document.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    “Registrable
      Securities”
shall
      mean (i) the Shares, and (ii) any other securities issued or issuable with
      respect to or in exchange for the Shares; provided, that, a security held by
      Holder shall cease to be a Registrable Security upon (A) a sale by such Holder
      pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B)
      such
      security becoming eligible for sale by such Purchaser pursuant to Rule
      144(k).

     

    “Registration
      Statement”
shall
      mean any registration statement or statements of the Company filed under the
      1933 Act and (in each case) the Prospectus that covers the resale of any of
      the
      Registrable Securities pursuant to the provisions of this Agreement (including
      each of the Registration Statements referred to in Section 2), amendments and
      supplements to each such Registration Statement and Prospectus, including pre-
      and post-effective amendments, all exhibits and all material filed and
      incorporated by reference or deemed to be incorporated by reference in each
      such
      Registration Statement.

     

    “Required
      Holders”
means
      the Holders holding a majority of the Registrable Securities.

     

    “Required
      Purchasers”
mean
      the Purchasers holding a majority of the Registrable Securities then owned
      by
      the Purchasers.

     

    “Rule
      401”,
      “Rule
      415”,
      “Rule
      416”,
      “Rule
      429”
and
      “Rule
      461”
mean
      Rule 401, Rule 415, Rule 416, Rule 429 and Rule 461, respectively, each as
      promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended
      from time to time, or any similar rule or regulation hereafter adopted by the
      SEC having substantially the same effect as such Rule.

     

    “SEC”
means
      the U.S. Securities and Exchange Commission.” 

     

    “Shares”
means
      the shares of Common Stock issued to the Purchasers and Nordic pursuant to
      the
      Purchase Agreement or issued or issuable to the Purchasers and Nordic upon
      the
      exercise, conversion or exchange of any securities issued pursuant to the
      Purchase Agreement including any Warrant Shares issued or issuable to the
      Purchasers and Nordic pursuant to the exercise of the Warrants (as well as
      any
      shares of Common Stock issued or issuable to the Purchasers and Nordic upon
      any
      stock split, dividend or other distribution, recapitalization or similar event
      with respect to the foregoing).

     

    “Warrant”
means
      the Warrants to purchase Common Stock issued to the Purchasers pursuant to
      the
      Purchase Agreement and any amendments thereof.

     

    “Warrant
      Shares”
means
      the shares issued or issuable pursuant to the Warrants.

     

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

     

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

     

    
      
        
        

      

      
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      2. Registration.

       

    

    (a)  Initial
      Registration Statement .
      Promptly following the closing of the purchase and sale of the securities
      contemplated by the Purchase Agreement (the “Closing Date”) but no later than
      five (5) Business Days after the filing of the Company’s Quarterly Report on
      Form 10-QSB for the fiscal quarter ended June 30, 2007 (the “SB-2 Filing
      Deadline”), the Company shall prepare and file with the SEC a Registration
      Statement covering the resale by the Purchasers of all Registrable Securities
      then held by the Purchasers to be made on a continuous basis pursuant to Rule
      415. Such Registration Statement shall be on Form SB-2 (the “SB-2 Registration
      Statement”) or other appropriate form in accordance herewith and shall include
      the plan of distribution attached hereto as Exhibit
      A
      (except
      as otherwise directed by the Purchasers). Such SB-2 Registration Statement
      also
      shall cover, to the extent allowable under the 1933 Act (including Rule 416),
      such indeterminate number of additional shares of Common Stock resulting from
      stock splits, stock dividends or similar transactions with respect to the
      Registrable Securities. Such SB-2 Registration Statement shall not include
      any
      shares of Common Stock or other securities for the account of Nordic and any
      other holder without the prior written consent of the Required Purchasers,
      except for shares of Common Stock held by the Company’s stockholders (other than
      Nordic) having “piggyback” registration rights expressly set forth in
      registration rights agreements entered into by the Company prior to the date
      hereof. A copy of the initial filing of the Registration Statement (and each
      pre-effective amendment thereto) shall be provided to the Purchasers and their
      counsel at least three (3) business days prior to filing. If the SB-2
      Registration Statement covering the Registrable Securities is not filed with
      the
      SEC on or prior to the SB-2 Filing Deadline (or if it is filed without giving
      the Purchasers the opportunity to review and comment on the same as required
      above, the Company shall not be deemed to have satisfied such filing
      requirement) and, then in addition to any other rights each Purchaser may have
      hereunder or under applicable law, the Company will pay (i) an amount in cash
      to
      each Purchaser, as partial liquidated damages and not as a penalty, equal to
      1.5% of the aggregate purchase price paid for Registrable Securities by such
      Purchaser pursuant to the Purchase Agreement up
      to a
      maximum amount of all liquidated damages payable under this Agreement to any
      Purchaser of 10% of the purchase price paid for Registrable Securities by such
      Purchaser pursuant to the Purchase Agreement
      and (ii)
      for each 30-day period or pro rata for any portion thereof following the Filing
      Deadline for which the SB-2 Registration Statement has not been filed or
      reviewed pursuant to the terms hereof an amount in cash to each Purchaser,
      as
      partial liquidated damages and not as a penalty, equal to 1.5% of the aggregate
      purchase price paid for Registrable Securities by such Purchaser pursuant to
      the
      Purchase Agreement up
      to a
      maximum amount of all liquidated damages payable under this Agreement to any
      Purchaser of 10% of the purchase price paid for Registrable Securities by such
      Purchaser pursuant to the Purchase Agreement.
      The
      amounts payable as partial liquidated damages pursuant to this paragraph shall
      be paid within three (3) Business Days of the SB-2 Filing Deadline and monthly
      thereafter within three (3) Business Days of the last day of each month
      following the commencement of the SB-2 Filing Deadline until the SB-2
      Registration Statement has been reviewed by the Purchasers and filed with the
      SEC as required herein. If the Company fails to pay any partial liquidated
      damages pursuant to this section in full within seven calendar days after the
      date payable, the Company will pay interest thereon at a rate of 18% per annum
      (or such lesser amount that is permitted to be paid by applicable law) to the
      Purchaser, accruing daily from the date such payments are due until such
      amounts, plus all such interest thereon, are paid in full. Payments to be made
      pursuant to this Section 2(a)(i) shall apply on a daily pro-rata basis for
      any
      portion of a month prior to the review and filing of the Registration Statement
      required herein. All payments shall be in immediately available cash funds.
      

     

    (b) Registration
      by Nordic.
      At any
      time after the date that is the later of (i) one hundred eighty (180) days
      after
      the closing of the purchase and sale of the securities contemplated by the
      Purchase Agreement or (ii) thirty (30) days after the effectiveness of the
      SB-2
      Registration Statement filed in accordance with Section 2(a) herein, Nordic
      may
      request, no more than one time, that the Company shall prepare and file with the
      SEC, a Registration Statement covering the resale by Nordic of all Registrable
      Securities then held by Nordic to be made on a continuous basis pursuant to
      Rule
      415. Such Registration Statement shall be on Form SB-2 or other appropriate
      form
      in accordance herewith and shall include the plan of distribution attached
      hereto as Exhibit
      A
      (except
      as otherwise directed by Nordic). Notwithstanding the foregoing, (i) if the
      board of directors of the Company determines in good faith that any such
      registration would be materially detrimental to the Company, the Company may
      defer such registration for no more than ninety (90) days in any twelve (12)
      month period.

     

    
      
        
        

      

      
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    (c) Expenses.
      The
      Company will pay all expenses associated with each registration, including
      filing and printing fees, the Company’s counsel and accounting fees and
      expenses, costs associated with clearing the Registrable Securities for sale
      under applicable state securities laws, listing fees, reasonable out-of-pocket
      fees and expenses of one counsel to all Major Purchasers (which fees and
      expenses shall not exceed $15,000) and the Major Purchasers’ reasonable
      out-of-pocket expenses in connection with the registration, but excluding
      discounts, commissions, fees of underwriters, selling brokers, dealer managers
      or similar securities industry professionals with respect to the Registrable
      Securities being sold.

     

    (d) Additional
      Registration Statements.

    

    In
      the
      event that the Company is unable to register for resale under Rule 415 all
      of
      the Registrable Securities held by the Purchasers in connection with the
      Registration Statement filed by the Company under section 2(a) or
      Nordic  in
      connection with any demand related to its Registrable Securities under section
      2(b) on a single Registration Statement in accordance with the above referenced
      provisions of this Agreement due to limits imposed by the SEC’s current
      interpretation of Rule 415, then notwithstanding anything to the contrary
      contained herein, the Company covenants that as soon as it is permitted to
      do so
      by the SEC, that it will prepare and file with the SEC such additional
      Registration Statements registering, in each case, Registrable Securities held
      by the Purchasers or
      Nordic, as
      the
      case may be, that
      were
      omitted from the initial Registration Statement filed pursuant to Section 2(a)
      or 2(b) hereof and to use its reasonable best efforts to cause such Registration
      Statements to be declared effective as promptly as possible.

     

    
      
        
        

      

      
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    (e)  Effectiveness.

     

    (i) The
      Company shall use commercially reasonable efforts to have the Registration
      Statement(s) declared effective as soon as practicable (including filing with
      the SEC a request for acceleration of its effectiveness in accordance with
      Rule
      461 within five (5) Business Days of the date that the Company is notified
      (orally or in writing, whichever is earlier) by the staff of the SEC that a
      Registration Statement will not be reviewed, or not be subject to further
      review), with respect to the initial SB-2 Registration Statement filed pursuant
      to Section 2(a) hereof, but in any event no later than November 14, 2007. The
      Company shall notify the Purchasers or Nordic by facsimile or e-mail as promptly
      as practicable, and in any event, within twenty-four (24) hours, after any
      Registration Statement is declared effective and shall simultaneously provide
      the Purchasers or Nordic with copies of any related Prospectus to be used in
      connection with the sale or other disposition of the securities covered thereby.
      If (A) the SB-2 Registration Statement is not declared effective by the SEC
      prior to the earlier of five (5) Business Days after the staff of the SEC shall
      have informed the Company (orally or in writing, whichever is earlier) that
      such
      Registration Statement will not be reviewed by the staff of the SEC or not
      be
      subject to further review or November 14, 2007 or (B)
      after
      a Registration Statement has been declared effective by the SEC, sales cannot
      be
      made pursuant to such Registration Statement for any reason (including without
      limitation by reason of a stop order, or the Company’s failure to update the
      Registration Statement), but excluding the inability of any Purchaser to sell
      the Registrable Securities covered thereby due to market conditions and except
      as excused pursuant to Section 2(e)(ii) below, then,
      in
      addition to any other rights each Purchaser may have hereunder or under
      applicable law, the Company will pay (i) an amount in cash to each Purchaser,
      as
      partial liquidated damages and not as a penalty, equal to 1.5% of the aggregate
      purchase price paid for Registrable Securities by such Purchaser pursuant to
      the
      Purchase Agreement up
      to a
      maximum amount of all liquidated damages payable under this Agreement to any
      Purchaser of 10% of the purchase price paid for Registrable Securities by such
      Purchaser pursuant to the Purchase Agreement
      and (ii)
      for each 30-day period or pro rata for any portion thereof following the
      occurrence of an event set forth in any of (A) or (B) above an amount in cash
      to
      each Purchaser, as partial liquidated damages and not as a penalty, equal to
      1.5% of the aggregate purchase price paid for Registrable Securities by such
      Purchaser pursuant to the Purchase Agreement up
      to a
      maximum amount of all liquidated damages payable under this Agreement to any
      Purchaser of 10% of the purchase price paid for Registrable Securities by such
      Purchaser pursuant to the Purchase Agreement.
      The
      amounts payable as partial liquidated damages pursuant to this paragraph shall
      be paid within three (3) Business Days of the occurrence of an event set forth
      in any of (A) or (B) above and monthly thereafter within three (3) Business
      Days
      of the last day of each month following the occurrence of an event set forth
      in
      any of (A) or (B) above until such events are cured. The amounts payable as
      partial liquidated damages pursuant to this paragraph shall be paid within
      three
      (3) Business Days of the occurrence of an event set forth in any of (A) or
      (B)
      above and monthly thereafter within three (3) Business Days of the last day
      of
      each month following the occurrence of an event set forth in any of (A) or
      (B)
      above until such occurrence has been cured. If the Company fails to pay any
      partial liquidated damages pursuant to this section in full within seven days
      after the date payable, the Company will pay interest thereon at a rate of
      18%
      per annum (or such lesser amount that is permitted to be paid by applicable
      law)
      to the Purchaser, accruing daily from the date such payments are due until
      such
      amounts, plus all such interest thereon, are paid in full. Such payments shall
      be made to each Purchaser in immediately available cash funds. For purposes
      of
      the obligations of the Company under this Agreement, except in the case of
      any
      Purchasers who elect in writing not to have its Registrable Securities included
      in the Registration Statement, no Registration Statement shall be considered
      “effective” with respect to any Registrable Securities unless such Registration
      Statement lists the Purchasers of such Registrable Securities as “Selling
      Stockholders” and includes such other information as is required to be disclosed
      with respect to such Purchasers to permit them to sell all of their Registrable
      Securities pursuant to such Registration Statement.

     

    (ii) For
      not
      more than fifteen (15) consecutive days or for a total of not more than thirty
      days in any twelve (12) month period, the Company may delay the disclosure
      of
      material non-public information concerning the Company, by suspending the use
      of
      any Prospectus included in any registration contemplated by this Section or
      by
      delaying any post-effective amendment to the Form SB-2 Registration Statement,
      if such disclosure at the time is not, in the good faith opinion of the Company,
      in the best interests of the Company (an “Allowed Delay”); provided, that the
      Company shall promptly (a) notify the Purchasers or Nordic in writing of the
      existence of (but in no event, without the prior written consent of a Purchaser
      or Nordic, shall the Company disclose to such Purchaser or Nordic any of the
      facts or circumstances regarding) an Allowed Delay, (b) advise the applicable
      Holders in writing to cease all sales under the Registration Statement until
      the
      end of the Allowed Delay and (c) use commercially reasonable efforts to
      terminate an Allowed Delay as promptly as practicable.

     

    
      
        
        

      

      
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    3. Company
      Obligations.
      The
      Company will use all reasonable efforts to effect the registration of the
      Registrable Securities in accordance with the terms hereof, and pursuant thereto
      the Company will, as expeditiously as possible (but subject to Section
      2(e)(ii)):

     

    (a)  use all
      reasonable efforts to cause such Registration Statement to become effective
      and,
      to remain continuously effective for a period that will terminate upon the
      earlier of (i) the date on which all Registrable Securities covered by such
      Registration Statement as amended from time to time, have been sold, and (ii)
      the date on which all Registrable Securities covered by such Registration
      Statement may be sold pursuant to Rule 144(k) (the “Effectiveness Period”) and
      advise the Purchasers in writing when the Effectiveness Period has
      expired;

     

    (b)  (i)
      prepare and file with the SEC such amendments and post-effective amendments
      to
      such Registration Statement and the Prospectus as may be necessary to keep
      such
      Registration Statement effective for the Effectiveness Period; (ii) cause
      the
      related Prospectus to be amended or supplemented by any required Prospectus
      supplement, and as so supplemented or amended to be filed pursuant to Rule
      424;
      (iii) respond as promptly as reasonably practicable to any comments received
      from the Commission with respect to such Registration Statement or any amendment
      thereto and, as promptly as reasonably practicable, upon request, provide the
      Purchasers true and complete copies of all correspondence from and to the
      Commission relating to such Registration Statement;
      and (iv)
      comply with the provisions of the 1933 Act and the 1934 Act with respect to
      the
      distribution of all of the Registrable Securities covered by such Registration
      Statement;

     

    (c)  use all
      reasonable efforts to (i) prevent the issuance of any stop order or other
      suspension of effectiveness and, (ii) if such order is issued, obtain the
      withdrawal of any such order at the earliest possible moment;

     

    (d)  prior
      to
      any resale of Registrable Securities, use all reasonable efforts to
      register or qualify or cooperate with the Purchasers and their counsel in
      connection with the registration or qualification of such Registrable Securities
      for offer and sale under the securities or blue sky laws of such jurisdictions
      requested by the Purchasers and do any and all other commercially reasonable
      acts or things necessary or advisable to enable the distribution in such
      jurisdictions of the Registrable Securities covered by the Registration
      Statement; provided,
      however, that the Company shall not be required in connection therewith or
      as a
      condition thereto to (i) qualify to do business in any jurisdiction where it
      would not otherwise be required to qualify but for this Section 3(d), (ii)
      subject itself to general taxation in any jurisdiction where it would not
      otherwise be so subject but for this Section 3(d), or (iii) file a general
      consent to service of process in any such jurisdiction;

     

    
      
        
        

      

      
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    (e)  use all
      reasonable efforts to cause all Registrable Securities covered by a Registration
      Statement to be listed on each securities exchange, interdealer quotation system
      or other market (including the OTC-BB) on which similar securities issued by
      the
      Company are then listed or traded;

     

    (f)  promptly
      notify the Purchasers and/or Nordic, at any time when a Prospectus relating
      to
      Registrable Securities is required to be delivered under the 1933 Act (including
      during any period when the Company is in compliance with Rule 172), upon
      discovery that, or upon the happening of any event as a result of which, the
      Prospectus included in a Registration Statement, as then in effect, includes
      an
      untrue statement of a material fact or omits to state any material fact required
      to be stated therein or necessary to make the statements therein not misleading
      in light of the circumstances then existing, and at the request of any such
      holder, promptly prepare, file with the SEC pursuant to Rule 172 and furnish
      to
      such holder a supplement to or an amendment of such Prospectus as may be
      necessary so that such Prospectus shall not include an untrue statement of
      a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing; 

     

    (g)
       promptly
      notify the Purchasers and/or Nordic (i) of any request by the Commission or
      any
      other Federal or state governmental authority during the period of effectiveness
      of each Registration Statement for amendments or supplements to such
      Registration Statement or Prospectus or for additional information; (ii) of
      the
      issuance by the Commission or any other federal or state governmental authority
      of any stop order suspending the effectiveness of the Registration Statement
      covering any or all of the Registrable Securities or the initiation of any
      proceedings for that purpose; (iii) of the receipt by the Company of any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any proceeding for such
      purpose; and (iv) of the occurrence of any event or passage of time that makes
      the financial statements included in such Registration Statement ineligible
      for
      inclusion therein;
      and

     

    (h) With
      a
      view to making available to the Purchasers and Nordic the benefits of Rule
      144
      (or its successor rule) and any other rule or regulation of the SEC that may
      at
      any time permit the Purchasers to sell shares of Common Stock to the public
      without registration, the Company covenants and agrees to: (i) make and keep
      public information available, as those terms are understood and defined in
      Rule
      144, until the earlier of (A) six months after such date as all of the
      Registrable Securities may be resold pursuant to Rule 144(k) or any other rule
      of similar effect or (B) such date as all of the Registrable Securities shall
      have been resold; (ii) file with the SEC in a timely manner all reports and
      other documents required of the Company under the 1934 Act (whether or not
      such
      reports and other documents are required to be filed under the 1934 Act); and
      (iii) furnish to each Purchaser and Nordic upon request, as long as such
      Purchaser owns any Registrable Securities, (A) a written statement by the
      Company that it has complied with the reporting requirements of the 1934 Act,
      and (B) such other information as may be reasonably requested in order to avail
      such Purchaser or Nordic of any rule or regulation of the SEC that permits
      the
      selling of any such Registrable Securities without registration.

    

    
      
        
        

      

      
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    (i) The
      Company represents and warrants that (A) since December 31, 2006 through the
      date of this Agreement, it has filed with the SEC in a timely manner all reports
      and other documents required of the Company under the 1934 Act and (B) neither
      the Company nor any of its consolidated or unconsolidated subsidiaries have,
      since the end of the last fiscal year for which certified financial statements
      of the Company and its consolidated subsidiaries were included in a report
      filed
      pursuant to Section 13(a) or 15(d) of the 1934 Act through the date of this
      Agreement: (1) failed to pay any dividend or sinking fund installment on
      preferred stock; or (2) defaulted (x) on any installment or installments on
      indebtedness for borrowed money, or (y) on any rental on one or more long term
      leases, which defaults in the aggregate are material to the financial position
      of the Company and its consolidated and unconsolidated subsidiaries, taken
      as a
      whole.

    

    4. Information The
      Company shall not disclose material nonpublic information to the Purchasers,
      or
      to advisors to or representatives of the Purchasers, unless prior to disclosure
      of such information the Company identifies such information as being material
      nonpublic information and provides the Purchasers, such advisors and
      representatives with the opportunity to accept or refuse to accept such material
      nonpublic information for review and any Purchaser wishing to obtain such
      information enters into an appropriate confidentiality agreement with the
      Company with respect thereto.

    

    5. Obligations
      of the Holders.

     

    (a)  Each
      Holder shall promptly furnish in writing to the Company such information
      regarding itself, the Registrable Securities held by it and the intended method
      of disposition of the Registrable Securities held by it, as shall be reasonably
      required to effect the registration of such Registrable Securities and shall
      execute such documents in connection with such registration as the Company
      may
      reasonably request. At least ten (10) Business Days prior to the first
      anticipated filing date of any Registration Statement, the Company shall notify
      each Holder of the information the Company requires from such Holder if such
      Holder elects to have any of the Registrable Securities included in the
      Registration Statement. A Holder shall provide such information to the Company
      at least three (3) Business Days prior to the first anticipated filing date
      of
      such Registration Statement if such Holder elects to have any of the Registrable
      Securities included in the Registration Statement.

     

    (b)  Each
      Holder, by its acceptance of the Registrable Securities agrees to cooperate
      with
      the Company as reasonably requested by the Company in connection with the
      preparation and filing of a Registration Statement hereunder, unless such Holder
      has notified the Company in writing of its election to exclude all of its
      Registrable Securities from such Registration Statement.

     

    (c)  Each
      Holder agrees that, upon receipt of any notice from the Company of either (i)
      the commencement of an Allowed Delay pursuant to Section 2(e)(ii) or (ii) the
      happening of an event pursuant to Section 3(f) hereof, such Holder will
      immediately discontinue disposition of Registrable Securities pursuant to the
      Registration Statement covering such Registrable Securities, until the Holder
      is
      advised by the Company that a supplemented or amended prospectus has been filed
      with the SEC and until any related post-effective amendment is declared
      effective and, if so directed by the Company, the Holder shall deliver to the
      Company or destroy (and deliver to the Company a certificate of destruction)
      all
      copies in the Holder’s possession of the Prospectus covering the Registrable
      Securities current at the time of receipt of such notice.

     

    6. Indemnification.

     

    (a)  Indemnification
      by the Company.
      The
      Company will indemnify and hold harmless each Holder and its officers,
      directors, members, partners, employees, attorneys and agents, successors and
      assigns, and each other person, if any, who controls such Holder within the
      meaning of the 1933 Act, against any losses, claims, damages or liabilities,
      joint or several, to which they may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon: (i) any untrue statement or
      alleged untrue statement of any material fact contained in any Registration
      Statement, any preliminary prospectus or final prospectus contained therein,
      or
      any amendment or supplement thereof; (ii) the omission or alleged omission
      to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein not misleading; (iii) any violation by the Company or
      its
      agents of any rule or regulation promulgated under the 1933 Act applicable
      to
      the Company or its agents and relating to action or inaction required of the
      Company in connection with such registration; or (iv) any failure to register
      or
      qualify the Registrable Securities included in any such Registration in any
      state where the Company or its agents has affirmatively undertaken or agreed
      in
      writing that the Company will undertake such registration or qualification
      on a
      Holder’s behalf and will reimburse such Holder, and each such officer, director
      or member and each such controlling person for any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such loss, claim, damage, liability or action; provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished by such Holder or any such controlling
      person in writing specifically for use in such Registration Statement or
      Prospectus.

     

    (b)  Indemnification
      by the Holders.
      Each
      Holder agrees, severally but not jointly, to indemnify and hold harmless, to
      the
      fullest extent permitted by law, the Company, its directors, officers,
      employees, stockholders and each person who controls the Company (within the
      meaning of the 1933 Act) against any losses, claims, damages, liabilities and
      expense (including reasonable attorney fees) resulting from any untrue statement
      of a material fact or any omission of a material fact required to be stated
      in
      the Registration Statement or Prospectus or preliminary prospectus or amendment
      or supplement thereto or necessary to make the statements therein not
      misleading, to the extent, but only to the extent that such untrue statement
      or
      omission is contained in any information furnished in writing by such Holder
      to
      the Company specifically for inclusion in such Registration Statement or
      Prospectus or amendment or supplement thereto. In no event shall the liability
      of a Holder be greater in amount than the dollar amount of the proceeds (net
      of
      all expense paid by such Holder in connection with any claim relating to this
      Section 6 and the amount of any damages such Holder has otherwise been required
      to pay by reason of such untrue statement or omission) received by such Holder
      upon the sale of the Registrable Securities included in the Registration
      Statement giving rise to such indemnification obligation.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    (c)  Conduct
      of Indemnification Proceedings.
      Any
      person entitled to indemnification hereunder shall (i) give prompt notice to
      the
      indemnifying party of any claim with respect to which it seeks indemnification
      and (ii) permit such indemnifying party to assume the defense of such claim
      with
      counsel reasonably satisfactory to the indemnified party; provided
      that any
      person entitled to indemnification hereunder shall have the right to employ
      separate counsel and to participate in the defense of such claim, but the fees
      and expenses of such counsel shall be at the expense of such person unless
      (a)
      the indemnifying party has agreed to pay such fees or expenses, or (b) the
      indemnifying party shall have failed to assume the defense of such claim and
      employ counsel reasonably satisfactory to such person or (c) in the reasonable
      judgment of any such person, based upon written advice of its counsel, a
      conflict of interest exists between such person and the indemnifying party
      with
      respect to such claims (in which case, if the person notifies the indemnifying
      party in writing that such person elects to employ separate counsel at the
      expense of the indemnifying party, the indemnifying party shall not have the
      right to assume the defense of such claim on behalf of such person); and
provided,
      further,
      that
      the failure of any indemnified party to give notice as provided herein shall
      not
      relieve the indemnifying party of its obligations hereunder, except to the
      extent that such failure to give notice shall materially adversely affect the
      indemnifying party in the defense of any such claim or litigation. It is
      understood that the indemnifying party shall not, in connection with any
      proceeding in the same jurisdiction, be liable for fees or expenses of more
      than
      one separate firm of attorneys at any time for all such indemnified parties.
      No
      indemnifying party will, except with the consent of the indemnified party,
      consent to entry of any judgment or enter into any settlement that does not
      include as an unconditional term thereof the giving by the claimant or plaintiff
      to such indemnified party of a release from all liability in respect of such
      claim or litigation.

     

    (d)  Contribution.
      If for
      any reason the indemnification provided for in the preceding paragraphs (a)
      and
      (b) is unavailable to an indemnified party or insufficient to hold it harmless,
      other than as expressly specified therein, then the indemnifying party shall
      contribute to the amount paid or payable by the indemnified party as a result
      of
      such loss, claim, damage or liability in such proportion as is appropriate
      to
      reflect the relative fault of the indemnified party and the indemnifying party,
      as well as any other relevant equitable considerations. No person guilty of
      fraudulent misrepresentation within the meaning of Section 11(f) of the 1933
      Act
      shall be entitled to contribution from any person not guilty of such fraudulent
      misrepresentation. In no event shall the contribution obligation of a holder
      of
      Registrable Securities be greater in amount than the dollar amount of the
      proceeds (net of all expenses paid by such holder in connection with any claim
      relating to this Section 6 and the amount of any damages such holder has
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement or omission or alleged omission) received by it upon the sale of
      the
      Registrable Securities giving rise to such contribution obligation.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    7. Miscellaneous.

     

    (a)  Amendments
      and Waivers.
      This
      Agreement may be amended, modified or waived only by a writing signed by the
      Company and the Major Purchasers.

     

    (b)  Notices.
      All
      notices and other communications provided for or permitted hereunder shall
      be
      made as set forth in Section 9.4 of the Purchase Agreement.

     

    (c)  Assignments
      and Transfers by Holders.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the Holders and their respective successors and assigns. A Holder may transfer
      or assign, in whole or from time to time in part, to one or more persons its
      rights hereunder in connection with the transfer of Registrable Securities
      by
      such Holder to such person, provided that (i) such Holder complies with all
      laws
      applicable thereto and provides written notice of assignment to the Company
      promptly after such assignment is effected and (ii) the transferee agrees in
      writing to be bound by this Agreement as if it were a party hereto.

     

    (d)  Assignments
      and Transfers by the Company.
      This
      Agreement may not be assigned by the Company (whether by operation of law or
      otherwise) without the prior written consent of the Required Holders, provided,
      however, that the Company may assign its rights and delegate its duties
      hereunder to any surviving or successor corporation in connection with a merger
      or consolidation of the Company with another corporation, or a sale, transfer
      or
      other disposition of all or substantially all of the Company’s assets to another
      corporation, without the prior written consent of the Required Holders, after
      notice duly given by the Company to each Holder.

     

    (e)  Benefits
      of the Agreement.
      The
      terms and conditions of this Agreement shall inure to the benefit of and be
      binding upon the respective permitted successors and assigns of the parties.
      Nothing in this Agreement, express or implied, is intended to confer upon any
      party other than the parties hereto or their respective successors and assigns
      any rights, remedies, obligations, or liabilities under or by reason of this
      Agreement, except as expressly provided in this Agreement.

     

    (f)  Counterparts;
      Faxes.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. This Agreement may also be executed via facsimile, which shall
      be
      deemed an original.

     

    (g)  Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    (h)  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 but shall be interpreted as if it were written so as to be
      enforceable to the maximum extent permitted by applicable law, and any such
      prohibition or unenforceability in any jurisdiction shall not invalidate or
      render unenforceable such provision in any other jurisdiction. To the extent
      permitted by applicable law, the parties hereby waive any provision of law
      which
      renders any provisions hereof prohibited or unenforceable in any
      respect.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    (i)  Further
      Assurances.
      The
      parties shall execute and deliver all such further instruments and documents
      and
      take all such other actions as may reasonably be required to carry out the
      transactions contemplated hereby and to evidence the fulfillment of the
      agreements herein contained.

     

    (j)  Entire
      Agreement.
      This
      Agreement is intended by the parties as a final expression of their agreement
      and intended to be a complete and exclusive statement of the agreement and
      understanding of the parties hereto in respect of the subject matter contained
      herein. This Agreement supersedes all prior agreements and understandings
      between the parties with respect to such subject matter.

     

    (k)  Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.
      This
      Agreement shall be governed by, and construed in accordance with, the internal
      laws of the State of New York without regard to the choice of law principles
      thereof. Each of the parties hereto irrevocably submits to the exclusive
      jurisdiction of the courts of the State of New York located in New York County
      and the United States District Court for the Southern District of New York
      for
      the purpose of any suit, action, proceeding or judgment relating to or arising
      out of this Agreement and the transactions contemplated hereby. Service of
      process in connection with any such suit, action or proceeding may be served
      on
      each party hereto anywhere in the world by the same methods as are specified
      for
      the giving of notices under this Agreement. Each of the parties hereto
      irrevocably consents to the jurisdiction of any such court in any such suit,
      action or proceeding and to the laying of venue in such court. Each party hereto
      irrevocably waives any objection to the laying of venue of any such suit, action
      or proceeding brought in such courts and irrevocably waives any claim that
      any
      such suit, action or proceeding brought in any such court has been brought
      in an
      inconvenient forum. EACH
      OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
      LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
      CONSULTED SPECIFICALLY AS TO THIS WAIVER.

     

    (l) Obligations
      of Holders.
      The
      Company acknowledges that the obligations of each Holder under this Agreement
      are several and not joint with the obligations of any other Holder, and no
      Holder shall be responsible in any way for the performance of the obligations
      of
      any other Holder under this Agreement. The decision of each Holder to enter
      into
      to this Agreement has been made by such Holder independently of any other
      Holder. The Company further acknowledges that nothing contained in this
      Agreement, and no action taken by any Holder pursuant hereto, shall be deemed
      to
      constitute the Holders as a partnership, an association, a joint venture or
      any
      other kind of entity, or create a presumption that the Holders are in any way
      acting in concert or as a group with respect to such obligations or the
      transactions contemplated hereby. Each Holder shall be entitled to independently
      protect and enforce its rights, including without limitation, the rights arising
      out of this Agreement, and it shall not be necessary for any other Holder to
      be
      joined as an additional party in any proceeding for such purpose.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    Each
      Holder has been represented by its own separate legal counsel in their review
      and negotiation of this Agreement and with respect to the transactions
      contemplated hereby. The Company has elected to provide all Holders with the
      same terms and Agreement for the convenience of the Company and not because
      it
      was required or requested to do so by the Holders. The Company acknowledges
      that
      such procedure with respect to this Agreement in no way creates a presumption
      that the Holders are in any way acting in concert or as a group with respect
      to
      this Agreement or the transactions contemplated hereby or thereby.

    

    [Signature
      pages follow]

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
      authorized officers to execute this Agreement as of the date first above
      written.

    
      	 	 	 
	The
              Company:	OSTEOLOGIX, INC.
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name: Philip
              Young
	 	Title: President
              and Chief Executive Officer

    

     

     Signature
      Page to Registration Rights Agreement

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	The
              Purchasers:	BIOTECHNOLOGY VALUE FUND, L.P.
	 
 	 
 	 
 
	
            	By:  	BVF
              Partners, L.P., its general partner
	 	By: BVF Inc., its general
              partner

      	 	 	 
	
            	By:  	
            
	 	
              
Mark
              N. Lampert, President

    

     

     Signature
      Page to Registration Rights Agreement

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     
      
      	 	 	 
	 	
              BIOTECHNOLOGY
                VALUE FUND II, L.P.

            
	 
 	 
 	 
 
	
            	By:  	BVF
              Partners, L.P., its general partner
	 	By: BVF Inc., its general
              partner

    

    
      	 	 	 
	
            	By:  	
            
	 	
              
Name:
              Mark N. Lampert
	 	Title:
              President

    

     

    Signature
      Page to Registration Rights
      Agreement

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    
      	 	 	 
	 	
              BVF
                INVESTMENTS, L.L.C.

            
	 
 	 
 	 
 
	
            	By:  	BVF
              Partners, L.P., its manager
	 	By: BVF Inc, its general
              partner

      
        	 	 	 
	
              	By:  	
              
	 	
                
Name:
                Mark N. Lampert
	 	Title:
                President

      

       

      Signature
        Page to Registration Rights
        Agreement

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              INVESTMENT
                10, L.L.C.

            
	 
 	 
 	 
 
	
            	By:  	BVF
              Partners, L.P., its attorney-in-fact
	 	By: BVF Inc., its general
              partner

      
        	 	 	 
	
              	By:  	
              
	 	
                
Name:
                Mark N. Lampert
	 	Title:
                President

      

       

      Signature
        Page to Registration Rights
        Agreement

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

     

    
      	 	 	 
	 	Goldman
              Sachs
              Intl
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:

	 	Title:

    

     

    Signature
      Page to Registration Rights
      Agreement

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              NORDIC
                BIOTECH K/S 

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	
              Title:

            

    

     

    Signature
      Page to Registration Rights
      Agreement

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    Signature
      Page to Registration Rights
      Agreement

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

      Signature
        Page to Registration Rights
        Agreement

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

         

      

    

    Exhibit
      A

    

    Plan
      of Distribution

    

    The
      selling stockholders, which as used herein includes donees, pledgees,
      transferees or other successors-in-interest selling shares of common stock
      or
      interests in shares of common stock received after the date of this prospectus
      from a selling stockholder as a gift, pledge, partnership distribution or other
      transfer, may, from time to time, sell, transfer or otherwise dispose of any
      or
      all of their shares of common stock or interests in shares of common stock
      on
      any stock exchange, market or trading facility on which the shares are traded
      or
      in private transactions. These dispositions may be at fixed prices, at
      prevailing market prices at the time of sale, at prices related to the
      prevailing market price, at varying prices determined at the time of sale,
      or at
      negotiated prices.

    

    The
      selling stockholders may use any one or more of the following methods when
      disposing of shares or interests therein:

    

      ·
        ordinary brokerage transactions and transactions in which the
        broker-dealer solicits purchasers;

    

    

      ·
        block trades in which the broker-dealer will attempt to sell the shares
        as agent, but may position and resell a portion of the block as principal
        to
        facilitate the transaction;

    

    

      ·
        purchases by a broker-dealer as principal and resale by the broker-dealer
        for its account;

    

    

      ·
        an exchange distribution in accordance with the rules of the applicable
        exchange;

    

    

      ·
        privately negotiated transactions;

    

    

      ·
        short sales effected after the date the registration statement of
        which
        this Prospectus is a part is declared effective by the SEC;

    

    

      ·
        through the writing or settlement of options or other hedging
        transactions, whether through an options exchange or otherwise;

    

    

      ·
        broker-dealers may agree with the selling stockholders to sell a
        specified number of such shares at a stipulated price per share; and

    

    

      ·
        a combination of any such methods of sale.

    

    

    The
      selling stockholders may, from time to time, pledge or grant a security interest
      in some or all of the shares of common stock owned by them and, if they default
      in the performance of their secured obligations, the pledgees or secured parties
      may offer and sell the shares of common stock, from time to time, under this
      prospectus, or under an amendment or supplement to this prospectus under Rule
      424(b)(3) or other applicable provision of the Securities Act amending the
      list
      of selling stockholders to include the pledgee, transferee or other successors
      in interest as selling stockholders under this prospectus. The selling
      stockholders also may transfer the shares of common stock in other
      circumstances, in which case the transferees, pledgees or other successors
      in
      interest will be the selling beneficial owners for purposes of this
      prospectus.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    In
      connection with the sale of our common stock or interests therein, the selling
      stockholders may enter into hedging transactions with broker-dealers or other
      financial institutions, which may in turn engage in short sales of the common
      stock in the course of hedging the positions they assume. The selling
      stockholders may also sell shares of our common stock short and deliver these
      securities to close out their short positions, or loan or pledge the common
      stock to broker-dealers that in turn may sell these securities. The selling
      stockholders may also enter into option or other transactions with
      broker-dealers or other financial institutions or the creation of one or more
      derivative securities which require the delivery to such broker-dealer or other
      financial institution of shares offered by this prospectus, which shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such
      transaction).

    

    The
      aggregate proceeds to the selling stockholders from the sale of the common
      stock
      offered by them will be the purchase price of the common stock less discounts
      or
      commissions, if any. Each of the selling stockholders reserves the right to
      accept and, together with their agents from time to time, to reject, in whole
      or
      in part, any proposed purchase of common stock to be made directly or through
      agents. We will not receive any of the proceeds from this offering.

    

    The
      selling stockholders also may resell all or a portion of the shares in open
      market transactions in reliance upon Rule 144 under the Securities Act of 1933,
      provided that they meet the criteria and conform to the requirements of that
      rule.

    

    The
      selling stockholders and any underwriters, broker-dealers or agents that
      participate in the sale of the common stock or interests therein may be
      "underwriters" within the meaning of Section 2(11) of the Securities Act. Any
      discounts, commissions, concessions or profit they earn on any resale of the
      shares may be underwriting discounts and commissions under the Securities Act.
      Selling stockholders who are "underwriters" within the meaning of Section 2(11)
      of the Securities Act will be subject to the prospectus delivery requirements
      of
      the Securities Act.

    

    To
      the
      extent required, the shares of our common stock to be sold, the names of the
      selling stockholders, the respective purchase prices and public offering prices,
      the names of any agents, dealer or underwriter, any applicable commissions
      or
      discounts with respect to a particular offer will be set forth in an
      accompanying prospectus supplement or, if appropriate, a post-effective
      amendment to the registration statement that includes this
      prospectus.

    

    In
      order
      to comply with the securities laws of some states, if applicable, the common
      stock may be sold in these jurisdictions only through registered or licensed
      brokers or dealers. In addition, in some states the common stock may not be
      sold
      unless it has been registered or qualified for sale or an exemption from
      registration or qualification requirements is available and is complied
      with.

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

    

    We
      have
      advised the selling stockholders that the anti-manipulation rules of Regulation
      M under the Exchange Act may apply to sales of shares in the market and to
      the
      activities of the selling stockholders and their affiliates. In addition, we
      will make copies of this prospectus (as it may be supplemented or amended from
      time to time) available to the selling stockholders for the purpose of
      satisfying the prospectus delivery requirements of the Securities Act. The
      selling stockholders may indemnify any broker-dealer that participates in
      transactions involving the sale of the shares against certain liabilities,
      including liabilities arising under the Securities Act.

    

    We
      have
      agreed to indemnify the selling stockholders against liabilities, including
      liabilities under the Securities Act and state securities laws, relating to
      the
      registration of the shares offered by this prospectus.

    

    We
      have
      agreed with the selling stockholders to keep the registration statement of
      which
      this prospectus constitutes a part effective until the earlier of (1) such
      time
      as all of the shares covered by this prospectus have been disposed of pursuant
      to and in accordance with the registration statement or (2) the date on which
      the shares may be sold pursuant to Rule 144(k) of the Securities
      Act.

    

    
      
        
        

      

      
        24Exhibit
      10.1

    

    OMNIBUS
      AMENDMENT

    

    This
      OMNIBUS AMENDMENT
      (this
      “Amendment”)
      dated
      June 1, 2007 is entered into by and among Alteon Inc., a Delaware corporation
      (the “Company”),
      and
      the purchasers (the “Purchasers”)
      identified on the signature pages to that certain Note and Warrant Purchase
      Agreement dated as of January 11, 2007 (the “Note
      Purchase Agreement”).
      

    

    WHEREAS,
      in connection with the execution and delivery of the Note Purchase Agreement,
      the Company issued and sold to the Purchasers (i) an aggregate of $3,000,000
      of
      its Senior Convertible Secured Promissory Notes (the “Prior Notes”),
      each
      dated January 11, 2007, and (ii) warrants (the “Warrants”),
      each
      dated January 11, 2007, to purchase and aggregate of 25,734,453 shares of the
      common stock, $0.01 par value per share (the “Common
      Stock”)
      of the
      Company; 

    

    WHEREAS,
      on March 30, 2007, the Company and the Purchasers entered into a Waiver and
      Acknowledgment to delay certain dates set forth in the Note Purchase Agreement
      and related instruments;

    

    WHEREAS,
      the Company, the Purchasers and other investors have entered into a Series
      B
      Preferred Stock and Warrant Purchase Agreement dated April 5, 2007 (the
“Preferred Purchase
      Agreement”);
      

    

    WHEREAS,
      effective April 30, 2007, the Company and the Purchasers entered into an
      Amendment No. 1 to Registration Rights Agreement to delay certain dates set
      forth in that certain Registration Rights Agreement, dated as of January 11,
      2007 (the “Registration
      Rights Agreement”,
      and
      together with the Note Purchase Agreement, the Notes and the Warrants, the
      “Note
      Purchase Documents”);

    

    WHEREAS,
      the Company has requested, and the Purchasers have agreed to fund, an additional
      aggregate principal amount of $3,000,000 in consideration of new Senior
      Convertible Secured Promissory Notes dated the date hereof in substantially
      the
      form attached hereto as Exhibit
      A
      (the
“New
      Notes”)
      and
      for the other agreements and mutual covenants contained herein; and

    

    WHEREAS,
      in accordance with the relevant provisions of the Note Purchase Documents and
      the Preferred Purchase Agreement, the Company and the Purchasers desire to
      amend
      the Note Purchase Documents as set forth herein.

    

    NOW
      THEREFORE, in consideration of the mutual covenants contained herein, and for
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the Company and each of the Purchasers agree as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    1.
      Issuance
      of New Notes.
      

     

    a)
      New
      Notes.
      On the
      date hereof, the Company shall issue to each of the Purchasers a New Note in
      the
      principal amount set forth opposite such Purchaser’s
      name on
Schedule
      A under
      the
      column entitled “Aggregate Principal Amount,” and each of the Purchasers shall
      pay by wire transfer of immediately available funds to an account designated
      by
      the Company an amount set forth opposite such Purchaser’s
      name on
Schedule
      A under
      the
      column entitled “Additional Purchase Price.” The New Notes shall become
      effective only upon the surrender of the corresponding Prior Notes for
      cancellation by the Company or execution of an affidavit of lost note in form
      and substance reasonably satisfactory to the Company.

     

    b) Representations
      and Warranties.
      Each
      Purchaser hereby confirms that the representations and warranties set forth
      in
      Section 3 of the Note Purchase Agreement are true and correct as of the date
      hereof as if made on the date hereof. Likewise, the Company hereby confirms
      that
      the representations and warranties set forth in Section 4 of the Note Purchase
      Agreement are true and correct as of the date hereof as if made on the date
      hereof.

     

    c) Security
      Agreements.
      The
      Company acknowledges and agrees that any references to Notes in that certain
      Security & Guaranty Agreement, dated January 11, 2007, and that certain
      Intellectual Property Security Agreement, dated January 11, 2007 (together
      the
“Security
      Agreements”),
      shall
      be deemed to include the New Notes and that the performance and observance
      of
      the obligations set forth in the New Notes by the Company shall be deemed to
      be
“Obligations” for purposes of the Security Agreements.

     

    d)
      Closing
      Conditions.
      Each
      Purchaser’s obligation to purchase its New Note is subject to the following
      conditions: 

     

    
      	
            	i.	
              The
                Company’s representations and warranties contained in Section 4 of the
                Note Purchase Agreement shall be true and correct on and as of date
                hereof.

            

    

     

    
      	
            	ii.	
              The
                Company shall deliver a certificate of the Secretary of the Company
                dated
                the date hereof, certifying the incumbency and authority of the officers
                or authorized signatories of the Company who execute the New Note
                and the
                truth, correctness and completeness of the resolutions duly adopted
                by the
                Board of Directors of the Company authorizing the execution of this
                Amendment and the New Notes and the other documents delivered or
                to be
                delivered in connection herewith and the consummation of the transactions
                contemplated herein and therein, as applicable;
                and

            

    

     

    
      	
            	iii.	
              The
                Company shall deliver the opinion of Mintz,
                Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
                counsel to the Company, dated the date hereof, in substantially the
                same
                form provided at the initial Closing under the Note Purchase Agreement,
                subject only to such changes, qualifications, limitations or exceptions
                as
                may be acceptable to each Lender.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    e) Additional
      Purchaser.
      Baker
      Bros. Investments II, L.P. shall be deemed to be a “Purchaser” under the Note
      Purchase Agreement and hereunder. 

     

    2.
      Amendments
      to Note Purchase Agreement.
      

     

    a) Preferred
      Financing.
      Section
      5(l) of the Note Purchase Agreement is hereby deleted in its entirety and
      replaced with the following:

     

    “(l) Preferred
      Financing.
      As
      promptly as practical after the Closing Date, and in no event later than April
      15, 2007, each of the Company and the Lenders shall use their respective
      commercially reasonable efforts to negotiate and enter into definitive
      transaction documents pertaining to the transactions (the “Preferred
      Financing”)
      contemplated in that certain Memorandum of Proposed Terms for Private Placement
      of Preferred Stock and Warrants dated as of January 4, 2007 (the “Term
      Sheet”);
      subject in the case of the Lenders to the satisfactory completion of their
      due
      diligence review in their sole discretion. Without limiting the generality
      of
      the foregoing, the Company shall provide each stockholder entitled to vote
      at a
      special or annual meeting of stockholders of the Company (the “Stockholder
      Meeting”),
      which
      shall be promptly called and held not later than July 31, 2007 (the
“Stockholder
      Meeting Deadline”),
      a
      proxy statement, in a form reviewed and approved by the Lenders soliciting
      each
      such stockholder’s affirmative vote at the Stockholder Meeting for approval of
      the Preferred Financing and the other matters contemplated in the Term Sheet
      in
      accordance with applicable law and the rules and regulations of the American
      Stock Exchange (such affirmative approval being referred to herein as the
“Stockholder
      Approval”),
      and
      the Company shall use its commercially reasonable efforts to solicit its
      stockholders’ approval of such resolutions and to cause the Board of Directors
      of the Company to recommend to the stockholders that they approve such
      resolutions. The Company shall use its commercially reasonable efforts to obtain
      the Stockholder Approval by the Stockholder Meeting Deadline.”

     

    b) Fees
      and Expenses.
      The
      Company’s obligation to reimburse the Collateral Agent or
      its
      designee(s) for fees and expenses in Section 15 of the Note Purchase Agreement
      is hereby amended from a maximum of “One Hundred Thousand Dollars ($100,000)” to
“One Hundred Seventy-Five Thousand Dollars ($175,000).”

     

    3. Amendment
      to Warrants.
      The
      definition of Initial Exercise Date as set forth in the first paragraph of
      each
      of the Warrants is hereby amended from “May 31, 2007” to read “July 31,
      2007”.

     

    4. Exclusivity.
      The
      Company and Purchasers further agree that, with respect to that certain
      Memorandum of Terms dated January 4, 2007, the date of “March 31, 2007” in the
      section entitled “Exclusivity and Confidentiality” shall be extended to “July
      31, 2007.” 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    5. Ratification.
      The
      parties hereby ratify and confirm in all respects the Note Purchase Documents
      and the Preferred Purchase Agreement, as amended by this Amendment.

     

    6. Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of the Transaction Documents shall be governed by and construed and enforced
      in
      accordance with the internal laws of the State of New York, without regard
      to
      the principles of conflicts of law thereof. 

     

    7. Other
      Matters.
      The
      Company hereby acknowledges and agrees that the execution and delivery by the
      Purchasers of this Amendment shall not be deemed to create a course of dealing
      or otherwise obligate the Purchasers to execute similar extensions, amendments
      or waivers under the same or similar circumstances in the future.

     

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

    

     

    [remainder
      left intentionally blank]

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned hereby executes this Omnibus Amendment as
      of
      the date first set forth above.

    

    
      	
              ALTEON
                INC.

            	
              Address
                for Notice:

            
	 	 
	
              By: 
                /s/
                Noah Berkowitz

              
                

              

              Name:
                Noah Berkowitz

              Title:
                President

            	
              221
                West Grand Avenue

              Montvale,
                NJ 07645

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

               

              Mintz
                Levin Cohn Ferris Glovsky and Popeo, P.C.

              One
                Financial Center

              Boston,
                MA 02110

              Attn:
                William T. Whelan, Esq.

            	 

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE FOR PURCHASERS FOLLOW]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned hereby executes this Omnibus Amendment as
      of
      the date first set forth above. 

    

    
      	
              BAKER/TISCH
                INVESTMENTS, L.P.

              By: 
                Baker/Tisch
                Capital, L.P., its general partner

              By: 
                Baker/Tisch
                Capital (GP), LLC,

              its
                general partner

               

              By: 
                /s/
                Felix Baker

              
                

              

              Name:
                Felix Baker, Ph.D.

              Title:
                Managing Member

               

              BAKER
                BIOTECH FUND I, L.P.

              By: 
                Baker
                Biotech Capital, L.P., its general partner

              By: 
                Baker
                Biotech Capital (GP), LLC, 

              its
                general partner

               

              By: 
                /s/
                Felix Baker

              
                

              

              Name:
                Felix Baker, Ph.D.

              Title:
                Managing Member

               

              BAKER
                BROTHERS LIFE SCIENCES, L.P.

              By: 
                Baker
                Brothers Life Sciences Capital, L.P.

              its
                general partner

              By: 
                Baker
                Brothers Life Sciences Capital (GP), LLC 

              its
                general partner

               

              By: 
                /s/
                Felix Baker

              
                

              

              Name:
                Felix Baker, Ph.D.

              Title:
                Managing Member

               

              14159,
                L.P.

              By: 
                14159
                Capital, L.P., its general partner

              By: 
                14159
                Capital (GP), LLC, its general partner

               

              By: 
                /s/
                Felix Baker

              
                

              

              Name:
                Felix Baker, Ph.D.

              Title:
                Managing Member

               

              BAKER
                BROS. INVESTMENTS II, L.P.

              By: 
                Baker
                Bros. Capital, L.P., 

              its
                general partner

              By: 
                Baker
                Bros. Capital (GP), LLC, 

              its
                general partner

               

              By: 
                /s/
                Felix Baker

              
                

              

              Name:
                Felix Baker, Ph.D.

              Title:
                Managing Member

            	
              Address
                for Notice:

              667
                Madison Avenue

              17th
                Floor

              New
                York, NY 10021

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
      A

     

    LENDERS

    

     

    
      	
              Lender
                Name and Address

            	
              Amount
                of Prior Notes

            	
              Additional
                Purchase Price

            	
              Amount
                of New Notes

              (Combined
                Principal Balance)

            
	
               

              Baker
                Tisch Investments, L.P. 
667 Madison Avenue, 17th Floor 
New York,
                NY 10021 

            	
              $20,781.11

            	
              --

            	
               

               

              $20,781.11

            
	
               

              Baker
                Tisch Investments, L.P. 
667 Madison Avenue, 17th Floor 
New York,
                NY 10021 

            	
              $19,177.40

            	
              --

            	
               

               

              $19,177.40

            
	
               

              Baker
                Biotech Fund I, L.P. 

              667
                Madison Avenue, 17th Floor 
New York, NY 10021 

            	
              $402,372.05

            	
              $446,428.00

            	
               

               

              $848,800.05

            
	
               

              Baker
                Biotech Fund I, L.P. 

              667
                Madison Avenue, 17th Floor 
New York, NY 10021 

            	
              $359,715.41

            	
              $358,316.00

            	
               

               

              $718,031.41

            
	
               

              Baker
                Brothers Life Sciences, L.P. 
667 Madison Avenue, 17th Floor 
New
                York, NY 10021 

            	
              $2,128,162.10

            	
              $2,122,374.00

            	
               

               

              $4,250536.10

            
	
               

              14159,
                L.P. 

              667
                Madison Avenue, 17th Floor 
New York, NY 10021 

            	
              $69,791.94

            	
              $67,474.00

            	
               

               

              $137,265.94

            
	
               

              Baker
                Bros. Investments II, L.P.

              667
                Madison Avenue, 17th Floor 
New York, NY 10021 

            	
              --

            	
              $5,408.00

            	
               

               

              $5,408.00

            
	
              Total:

            	
               

              $
                3,000,000.01

            	
               

              $
                3,000,000.00

            	
               

              $
                6,000,000.01

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    FORM
      OF NEW NOTE

     

    THIS
      NOTE
      HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR APPLICABLE STATE SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR EVIDENCE
      REASONABLY SATISFACTORY TO THE BORROWER THAT SUCH REGISTRATION IS NOT REQUIRED.
      THE SECURITIES ISSUED UPON SUCH CONVERSION MAY NOT BE SOLD, OFFERED FOR SALE,
      PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS OR EVIDENCE REASONABLY
      SATISFACTORY TO THE BORROWER THAT SUCH REGISTRATION IS NOT
      REQUIRED.

    

    AMENDED
      AND RESTATED

    SENIOR
      CONVERTIBLE SECURED PROMISSORY NOTE

    

    
      	 	 	Parsippany, New Jersey 	 
	$__________ 	 	June __, 2007 	 

    

    

    FOR
      VALUE
      RECEIVED, Alteon Inc., a Delaware corporation (the “Borrower”),
      located at 6 Campus Drive, Parsippany, NJ 07054, hereby promises to pay to
      _______________________ (the “Lender”),
      located at ____________________________________________, or at such other place
      as the Lender may from time to time reasonably designate, the principal sum
      of
      ______________________ ($___________)1 
      (the
“Principal
      Amount”)
      in
      lawful money of the United States, in immediately available funds, ON DEMAND,
      on
      or after July 31, 2007 (the “Maturity
      Date”),
      together with any additional amounts as may be required to be paid under Section
      11 of this Note, unless the Principal Amount is earlier converted as set forth
      herein. 

     

    1. This
      Note
      amends and restates in its entirety that certain Senior Convertible Secured
      Promissory Note issued by the Borrower to the Lender, effective January 11,
      2007
      (the “Prior
      Note”),
      in
      the principal amount of ______________________ ($___________)2 
      (the
“Prior
      Principal”).
      The
      Prior Note is amended and restated hereby to increase the principal amount
      thereunder by an additional amount equal to the Prior Principal (“Additional
      Principal”)
      and to
      effect certain other changes. This Note shall become effective only upon the
      surrender of the Prior Note by the Lender for cancellation by the Borrower
      or
      execution of an affidavit of lost note in form and substance reasonably
      satisfactory to the Borrower.

     

    ___________________________

    
      
        1
          Insert
          appropriate percentage of $6 million.

      

      
        2
          Insert
          appropriate percentage of $3 million.

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2. Interest
      shall accrue at a rate per annum equal to eight percent (8%) with respect to
      (a)
      the Prior Principal, from the date of January 11, 2007 until maturity (whether
      by demand on or after the Maturity Date or by acceleration), and (b) the
      Additional Principal, from the date hereof until maturity (whether by demand
      on
      or after the Maturity Date or by acceleration). Such interest shall be payable
      at maturity or upon conversion. In no event shall the rate of interest hereunder
      exceed the maximum interest rate permitted by applicable law. 

     

    3. This
      Note
      is one of several notes (the “Notes”)
      in the
      aggregate principal amount of up to $6,000,000 and of like tenor issued by
      the
      Borrower to the Lender and others (together, the “Lenders”)
      pursuant to the terms of that certain Convertible Note and Warrant Purchase
      Agreement, dated January 11, 2007, as amended (the “Bridge
      Loan Agreement”).
      By
      acceptance of this Note, the Lender hereby agrees that each of the Notes issued
      pursuant to the Bridge Loan Agreement shall rank equally and ratably without
      priority over one another, and the Borrower agrees that, except as expressly
      provided by the terms of the Notes, none of the Notes shall be paid, in whole
      or
      in part, unless an equivalent, pro rata payment is made with respect to all
      other Notes.

     

    4. As
      security for the payment, performance and observance of the obligations set
      forth in the Prior Note, the Borrower has previously granted a security interest
      in its assets to the collateral agent named in, and pursuant to, that certain
      Security & Guaranty Agreement, dated January 11, 2007 (the “Security
      Agreement”)
      and
      that certain Intellectual Property Security Agreement, dated January 11, 2007
      (the “IP Security
      Agreement”
and
      together with the Security Agreement, the “Security
      Agreements”).
      Borrower hereby acknowledges and agrees that any reference to Notes in the
      Security Agreements shall be deemed to include this Note and that the
      performance and observance of the obligations set forth in this Note by the
      Borrower shall be deemed to be “Obligations” for purposes of the Security
      Agreements.

     

    5.
       If
      this
      Note has not previously been converted, the Borrower may repay the principal
      balance of this Note plus accrued but unpaid interest, together with any
      additional amounts as may be required to be paid under Section 11 of this Note,
      without penalty, at any time prior to the Maturity Date.

     

    6. In
      the
      event that any principal or accrued interest on this Note remains outstanding
      at
      such time as the Borrower consummates a Preferred Financing (as defined below),
      the entire principal balance then outstanding plus accrued but unpaid interest
      shall automatically be converted into the securities of the Borrower issued
      in a
      Preferred Financing at a conversion rate equal to the price per security at
      which the securities are issued in a Preferred Financing and with the same
      terms
      and conditions as such securities (hereinafter, an “Automatic
      Conversion”).
      The
      Automatic Conversion will be effective upon the consummation of a Preferred
      Financing, and the Borrower shall be relieved of any continued obligation to
      repay the principal or unpaid interest on this Note thereafter. The Borrower
      shall promptly deliver to the Lender written notification of the consummation
      of
      a Preferred Financing, and the Lender shall deliver the original of this Note
      to
      the Borrower for cancellation. The Borrower shall have no obligation to deliver
      securities issuable upon a Preferred Financing until such time as it receives
      the original of this Note or an affidavit of lost security from the Lender.
      

     

    For
      purposes of this Note, “Preferred
      Financing”
shall
      mean that certain contemplated transaction or series of transactions prior
      to
      the Maturity Date in which the Borrower sells shares of its preferred capital
      stock and warrants to purchase preferred stock to the Lenders and other
      investors as the Lenders may approve, in an amount up to $25,000,000, as more
      particularly described in that certain Series B Preferred Stock and Warrant
      Purchase Agreement dated as of April 5, 2007 by and among the Borrower, the
      Lenders and certain other parties.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7. In
      the
      event that any principal or accrued interest on this Note remains outstanding
      at
      such time as Borrower consummates an Equity Financing (as defined below), the
      principal balance then outstanding plus accrued but unpaid interest may be
      converted, in whole or in part, at the election of the Lender, into the
      securities of the Borrower issued in the Equity Financing at a conversion rate
      equal to the price per security at which the securities are issued in the Equity
      Financing (hereinafter, a “Voluntary
      Conversion”).
      The
      Borrower shall promptly deliver to the Lender written notification of the
      consummation of an Equity Financing, and the Lender shall have ten (10) business
      days from the date of such notice to elect, by written notice to the Borrower,
      to convert the Note. In the event the Lender elects to convert the Note into
      securities issued in the Equity Financing, the Lender shall deliver the original
      of this Note to the Borrower for cancellation together with the election notice.
      The Borrower shall have no obligation to deliver securities issuable upon a
      Voluntary Conversion until such time as it receives the original of this Note
      or
      an affidavit of lost security from the Lender. If this Note is converted in
      part, the Borrower shall reissue a Note in substantially the same form to the
      Lender reflecting the remaining principal balance.

     

    For
      purposes of this Note, “Equity
      Financing”
shall
      mean a transaction or series of transactions in which the Borrower sells its
      securities which occurs after the date hereof and prior to the Maturity Date
      and
      which does not constitute a Preferred Financing. 

     

    8. In
      the
      event that any principal or accrued interest on this Note remains outstanding
      prior to the Maturity Date and no Automatic Conversion or Voluntary Conversion
      has taken place, the principal balance then outstanding plus accrued but unpaid
      interest may be converted, in whole or in part, at the election of the Lender,
      into shares of the Borrower’s common stock, $0.01 per value per share
      (“Common
      Stock”),
      at a
      conversion rate equal to the closing price on the American Stock Exchange or
      the
      Nasdaq Stock Market (as reported by Bloomberg L.P. at 4:15 PM New York time))
      of
      a share of the Borrower’s Common Stock on the date hereof (hereinafter, a
“Voluntary
      Common Stock Conversion”).
      Upon
      election to consummate a Voluntary Common Stock Conversion, the Lender shall
      promptly deliver to the Borrower written notification of such election. The
      Lender shall also deliver the original of this Note to the Borrower for
      cancellation together with the election notice. The Borrower shall have no
      obligation to deliver securities issuable upon a Voluntary Common Stock
      Conversion until such time as it receives the original of this Note or an
      affidavit of lost security from the Lender. If this Note is converted in part,
      the Borrower shall reissue a Note in substantially the same form to the Lender
      reflecting the remaining principal balance.

     

    9. No
      fractional shares of capital stock of the Borrower shall be issued upon
      conversion of this Note. In lieu of any fractional shares to which the holder
      would otherwise be entitled, the Borrower shall pay cash equal to such fraction
      multiplied by the applicable conversion price.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10. Unless
      and until conversion of this Note as aforesaid, the Lender shall not by virtue
      of this Note have or exercise any rights by virtue hereof as a stockholder
      of
      the Borrower.

     

    11. If
      no
      Preferred Financing is consummated on or prior to the Maturity Date, and the
      Lender has not elected a Voluntary Conversion or Voluntary Common Stock
      Conversion, then (i) the entire principal amount of this Note, together with
      all
      accrued but unpaid interest, shall, at the election of the Lender, ON DEMAND,
      be
      due and payable on or after such date, (ii) the Borrower shall pay the Lender
      an
      additional sum of [_______________] ($___________)3 
      and
      (iii) the Borrower agrees to pay the Lender an amount equal to thirty percent
      (30%) of the Gross Proceeds (defined below) to the Borrower of all Financing
      Transactions (defined below), Sale Transactions (defined below) and Product
      Candidate Transactions (defined below) completed by the Borrower on or before
      June 30, 2009, subject to a maximum additional payment under this Section
      11(iii) of [_______________] ($___________)4 .
      “Gross
      Proceeds”
shall
      mean (a) in the case of a Financing Transaction the amount paid by the
      purchasers of the securities in the transaction, irrespective of underwriting
      discounts, private placement commissions or other fees; (b) in the case of
      a
      Sale Transaction the sum of (i) the aggregate fair market value of any
      securities issued and any other non-cash consideration delivered (including,
      without limitation, any joint venture or other revenue interest delivered to,
      or
      retained by, the Borrower), and any cash consideration paid to the Borrower
      or
      its security holders (including, without limitation, holders of options,
      warrants, convertible securities and preferred securities) in connection with
      the Sale Transaction, and (ii) the amount of all indebtedness and preferred
      stock of the Borrower or any subsidiary thereof, which is assumed or acquired
      by
      the purchaser or retired or defeased in connection with the Sale Transaction;
      and (c) in the case of a Product Candidate Transaction the aggregate fair market
      value of any securities issued and any other non-cash consideration delivered
      (including, without limitation, any joint venture interest delivered to, or
      retained by, the Borrower), and any cash consideration paid to the Borrower
      in
      connection with the Product Candidate Transaction. “Financing
      Transaction”
shall
      mean any equity financing by or on behalf of the Borrower or its subsidiaries,
      including, but not limited to, any sale of common stock, preferred stock,
      warrants, convertible debt or other equity linked security. “Sale
      Transaction”
shall
      mean any transaction or series of transactions in which one or more persons
      or
      entities acquires directly or indirectly a majority of the stock or all or
      substantially all of the assets, revenues, income or business of the Borrower
      or
      any subsidiary or otherwise gains control of the Borrower or any subsidiary,
      including any combination of the businesses regardless of the structure or
      form
      of the transaction. “Product
      Candidate Transaction” shall
      mean any licensing, development, commercialization, distribution, marketing,
      co-marketing, collaboration, partnering, sale, divestiture or similar agreement
      relating to the transfer of intellectual property or other rights or assets
      relating to the Borrower’s current or future product candidates.

     

    
      ______________________________________

      3
        Insert
        appropriate percentage of $6 million.

      
        4
          Insert
          appropriate percentage of $8 million.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

     

    12. If
      (a)
      the Borrower fails to make any payment under this Note; (b) the Borrower
      breaches any representation, warranty, covenant or agreement in the Bridge
      Loan
      Agreement or any other Transaction Document (as defined in the Bridge Loan
      Agreement); (c) the Borrower agrees, consents or acquiesces to any amendment,
      supplement or other modification to, or termination of, any of any Material
      License Agreement or otherwise breaches any representation, warranty, covenant
      or agreement in any Material License Agreement that would give the other party
      thereto the right to terminate such Material License Agreement, or takes any
      other action or fails to take any action that may result in the early
      termination of a Material License Agreement; (d) the Borrower fails to pay
      when
      due any Indebtedness (as defined in the Bridge Loan Agreement) of the Borrower
      in an aggregate amount of Five Hundred Thousand Dollars ($500,000) or greater
      at
      any one time; (e) a final judgment or judgments for the payment of money
      aggregating in excess of Five Hundred Thousand Dollars ($500,000) are rendered
      against the Borrower and which judgments are not, within sixty (60) days after
      the entry thereof, bonded, discharged or stayed pending appeal, or are not
      discharged within sixty (60) days after the expiration of such stay; (f) the
      Borrower shall be dissolved, become insolvent (however defined or evidenced),
      make an assignment for the benefit of creditors or make or send a notice of
      intended bulk transfer; (g) any petition or proceeding for any relief under
      any
      bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
      receivership, liquidation or dissolution law or statute now or hereinafter
      in
      effect (whether at law or in equity) is filed or commenced by the Borrower;
      or
      (h) any trustee or receiver is appointed for the Borrower or any property of
      the
      Borrower, a meeting of creditors is convened or a committee of creditors is
      appointed for, or any petition or proceeding for any relief under any
      bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
      receivership, liquidation or dissolution law or statute now or hereinafter
      in
      effect (whether at law or in equity) is filed or commenced against the Borrower,
      which proceeding is not dismissed within one hundred twenty (120) days (each
      of
      the foregoing, an “Event
      of Default”),
      then
      and in any such event and at any time thereafter, the Lender may, at its option,
      declare all amounts owing under Section 11 of this Note to be due and payable,
      whereupon the maturity of the unpaid balance hereof shall be accelerated and
      the
      principal, together with all unpaid interest accrued thereon, shall forthwith
      become due and payable; provided,
      that,
      if any petition or proceeding for any relief under any bankruptcy,
      reorganization, arrangement, insolvency, readjustment or debt, receivership,
      liquidation or dissolution law or statute now or hereinafter in effect (whether
      at law or in equity) is filed or commenced by the Borrower, all amounts owing
      under this Note shall be, without notice, declaration or any action by the
      Lender, accelerated, and immediately due and payable. 

     

    13. The
      Borrower hereby waives diligence, demand, presentment, protest and notice of
      any
      kind, and assents to extensions of time of payment, release, surrender or
      substitution or security, or forbearance or other indulgence, without
      notice.

     

    14. No
      act,
      omission or delay by the Lender or course of dealing between the Lender and
      the
      Borrower shall constitute a waiver of the rights and remedies of the Lender
      hereunder. No single or partial waiver by the Lender of any Event of Default
      or
      right or remedy which it may have shall operate as a waiver of any other Event
      of Default, right or remedy or of the same Event of Default, right or remedy
      on
      a future occasion.

     

    15. Unless
      otherwise provided herein or in the Bridge Loan Agreement, any notice or other
      communication herein required or permitted to be given shall be in writing
      and
      may be personally served, telecopied, telexed or sent by United States mail,
      to
      Borrower or Lender, as the case may be, addressed to it at the respective
      address set forth on the first page of this Note and in the Bridge Loan
      Agreement, or at such other address as shall be designated by Borrower or
      Lender, as the case may be, in a written notice to the other party complying
      as
      to delivery with the terms of this Section 15. All such notices and other
      communications shall be deemed to have been given when (i) delivered by hand,
      (ii) sent
      by
      overnight courier, with receipt acknowledgment, or (iii) sent by certified
      mail, return receipt requested, postage prepaid.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    16. This
      Note
      shall be governed by and construed in accordance with the internal law of the
      State of New York (without giving effect to the conflict of laws principles
      thereof). Any legal action or proceeding with respect to this Note shall be
      brought in the courts of the State of New York or of the United States of
      America for the Southern District of New York, and, by execution and delivery
      of
      this Note, the Borrower hereby accepts for itself and in respect of its
      property, generally and unconditionally, the jurisdiction of the aforesaid
      courts. 

     

    17. No
      provision hereof shall be modified, altered or limited except by a written
      instrument expressly executed by the Borrower and Lenders holding a majority
      in
      principal amount of the then outstanding Notes.

     

    18. In
      the
      event that any court of competent jurisdiction shall determine that any
      provision, or any portion thereof, contained in this Note shall be unreasonable
      or unenforceable in any respect, then such provision shall be deemed limited
      to
      the extent that such court deems it reasonable and enforceable, and as so
      limited shall remain in full force and effect. In the event that such court
      shall deem any such provision, or portion thereof, wholly unenforceable, the
      remaining provisions of this Note shall nevertheless remain in full force and
      effect.

     

    19. This
      Note
      and all obligations evidenced hereby shall be binding upon the heirs, executors,
      administrators, successors and assigns of the Borrower and shall, together
      with
      the rights and remedies of the Lender hereunder, inure to the benefit of the
      Lender, its successors, endorsees and permitted assigns.

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      witness whereof, the Borrower has caused this Note to be executed by its duly
      elected officer as of the date first set forth above.

     

    
      	 	 	 
	 	ALTEON
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Noah
              Berkowitz
	 	President
              and
              Chief Executive Officer

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