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Unassociated Document

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO SUCH EFFECT,
      THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. ADDITIONALLY,
      HEDGING TRANSACTIONS IN RESPECT OF THESE SECURITIES MUST BE EFFECTED IN
      ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IF
      APPLICABLE. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
      INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
      SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    OF

     

    OSTEOLOGIX,
      INC.

     

    PW-[
      ]

     

    This
      is
      to Certify That, FOR VALUE RECEIVED, ____________ or its registered assigns
      (“Holder”),
      is
      entitled to purchase, subject to the provisions of this Warrant, from
      Osteologix, Inc., a Delaware corporation (the “Company”),
      up to
      ______________________(_________) fully paid, validly issued and nonassessable
      shares of the common stock, $.0001 par value (“Common
      Stock”)
      of the
      Company, at the Exercise Price at any time or from time to time during the
      period commencing on the date hereof through the Warrant Expiration Date (the
      “Exercise
      Period”).
      The
      number of Warrant Shares to be received upon the exercise of this Warrant and
      the price to be paid for each Warrant Share may be adjusted from time to time
      as
      hereinafter set forth. This Warrant, together with the other warrants of like
      tenor issued in the Placement, are collectively referred to as the “Warrants”
which
      are being issued contemporaneously to the Holders upon consummation of the
      Placement.

     

    SECTION
      1. DEFINITIONS.
      As used
      herein, the following terms shall have the following meanings, unless the
      context shall otherwise require:

     

    (a) “Exercise
      Date”
shall
      mean the date on which the Company shall have received both (a) the Notice
      of
      Exercise annexed hereto duly executed by the Holder hereof or his attorney
      duly
      authorized in writing, and (b) if payment is to be made in cash, cash or an
      official bank or certified check made payable to the Company, of an amount
      in
      lawful money of the United States of America equal to the Exercise
      Price.

     

    (b) “Exercise
      Price”
shall
      mean the purchase price to be paid upon exercise of this Warrant in accordance
      with the terms hereof, which price shall be $1.20 per Warrant Share, subject
      to
      adjustment from time to time pursuant to the provisions of Section 5
      hereof.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (c) “Placement”
shall
      mean the Company’s private placement of 1,912,877 units
      (“Units”),
      each
      Unit consisting of (i) two shares of Common Stock and (ii) one common stock
      purchase warrant exercisable to purchase one share of Common Stock pursuant
      to a
      Securities Purchase Agreement dated as of the date of this Warrant.

     

    (d) “Registered
      Holder”
shall
      mean the person in whose name any Warrant shall be registered on the books
      maintained by the Company.

    

    (e) “Warrant
      Expiration Date”
shall
      mean 5:00 P.M. (New York time) on August 31, 2008.

     

    (f) “Warrant
      Shares”
shall
      mean the shares of Common Stock deliverable upon exercise of the Warrants,
      as
      adjusted from time to time.

     

    SECTION
      2. EXERCISE.

     

    (a) The
      purchase rights represented by this Warrant shall be exercisable by the Holder
      in whole or in part at any time or from time to time during the Exercise Period
      by the surrender of this Warrant and the Notice of Exercise attached as Annex
      I
      hereto duly completed and executed on behalf of the Holder, together (unless
      such exercise is on a cashless basis pursuant to Section 2(b)) with the
      payment to the Company, by cash or official
      bank or certified check,
      of the
      Exercise Price for the Warrant Shares so purchased, at
      the
      principal office of the Company (or such other office or agency of the Company
      as it may designate by notice in writing to the Holder at the address of the
      Holder appearing on the books of the Company). This Warrant shall be deemed
      to
      have been exercised immediately prior to the close of business on the date
      of
      its surrender for exercise as provided above (including payment), and the person
      entitled to receive the Warrant Shares issuable upon such exercise shall be
      treated for all purposes as the holder of record of such shares as of the close
      of business on such date. As promptly as practicable on or after such date
      (but
      no more than five days thereafter), the Company, at its expense, shall issue
      and
      deliver to the person or persons entitled to receive the same, a certificate
      or
      certificates for the number of Warrant Shares issuable upon such exercise.
      In
      the event that this Warrant is exercised in part, the Company, at its expense,
      shall, simultaneously with the delivery described in the immediately preceding
      sentence, execute and deliver a new Warrant of like tenor exercisable for the
      number of shares for which this Warrant may then be exercised.

     

    (b) The
      Holder may, at its option, exchange this Warrant on a cashless basis, in whole
      or in part (a “Warrant
      Exchange”),
      for
      the number of Warrant Shares determined in accordance with this Section 2(b),
      by
      surrendering this Warrant at the principal office of the Company, accompanied
      by
      the Notice of Exercise attached as Annex I hereto duly completed and executed
      on
      behalf of the Holder indicating the Holder’s intent to effect such exchange, the
      number of Warrant Shares underlying such Warrant to be exchanged and the date
      of
      the notice of such intent to exchange (the “Notice
      of Exchange”).
      The
      Warrant Exchange shall take place on the date set forth in the Notice of
      Exchange (the “Exchange
      Date”),
      which
      date shall not be prior to the date the Notice of Exchange was delivered.
      Certificates for the Warrant Shares issuable upon such Warrant Exchange and,
      if
      applicable, a new Warrant of like tenor evidencing the balance of the Warrant
      Shares remaining subject to this Warrant, shall be issued as of the Exchange
      Date and delivered to the Holder as soon as practicable (but not more than
      five
      business days) following the Exchange Date. In connection with any Warrant
      Exchange, the Company shall issue to the Holder such number of fully paid and
      nonassessable shares of Common Stock as is computed using the following
      formula:

     

    
      X
        =
Y
        (A-B)

      A

      

      where                X
        = the
        number of shares to be issued to the Holder pursuant to the Warrant
        Exchange.

       

      Y
        = the
        number of shares covered by the Warrant which the Holder has elected to exchange
        pursuant to this Section 4(b).

       

      A
        = the
        current market price per share of Common Stock (as defined below) on the
        Exchange Date. 

       

      B
        = the
        Exercise Price in effect under the Warrant on the Exchange Date (as adjusted
        to
        the date of such calculation).

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    For
      the
      purpose of any computation under Subsections (b) above, the current market
      price
      per share of Common Stock on the Exchange Date shall be determined as
      follows:

     

    (i) If
      the
      Common Stock is listed on or quoted for trading on the American Stock Exchange,
      the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select
      Market, or the Nasdaq Capital Market, the current market value shall be the
      last
      reported sale price of the Common Stock on such exchange on such trading day
      or
      if no such sale is made on such day, the average closing bid and asked prices
      for such day on such exchange;

     

    (ii) If
      the
      Common Stock is not so listed or quoted for trading, but is traded or quoted
      for
      trading on the OTC Bulletin Board or in the pink sheets, the current market
      value shall be the mean of the average of the last reported bid and asked prices
      reported by the National Quotation Bureau, Inc. for such trading day (or if
      no
      such prices are available on such date, the most recent date preceding such
      date
      when such prices were reported); or

     

    (iii) If
      the
      Common Stock is not so listed or admitted to unlisted trading privileges and
      bid
      and asked prices are not so reported, the current market value shall be an
      amount, not less than book value thereof as at the end of the most recent fiscal
      year of the Company ending prior to such business day, determined in such
      reasonable manner as may be prescribed by the Board of Directors of the
      Company.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    SECTION
      3. RESERVATION
      OF SHARES; LISTING; PAYMENT OF TAXES; ETC.

     

    (a) The
      Company covenants that it will at all times reserve and keep available out
      of
      its authorized Common Stock, solely for the purpose of issue upon exercise
      of
      the Warrants, such number of shares of Common Stock as shall then be issuable
      upon the exercise of all outstanding Warrants. The Company covenants that all
      shares of Common Stock which shall be issuable upon exercise of the Warrants
      and
      payment of the Exercise Price shall, at the time of delivery, be duly and
      validly issued, fully paid, nonassessable and free from all taxes, liens and
      charges with respect to the issue thereof (other than those which the Company
      shall promptly pay or discharge).

     

    (b) The
      Company will use reasonable efforts to obtain appropriate approvals or
      registrations under state “blue sky” securities laws with respect to the
      issuance of the Warrant Shares; provided, however, that the Company shall not
      be
      obligated to file any general consent to service of process or qualify as a
      foreign corporation in any jurisdiction. With respect to any such state
      securities laws, however, Warrants may not be exercised by, or shares of Common
      Stock issued to, any Registered Holder in any state in which such exercise
      would
      be unlawful.

     

    (c) The
      Company shall pay all documentary, stamp or similar taxes and other governmental
      charges that may be imposed with respect to the issuance of any Warrants or
      Warrant Shares; provided, however, that if the Warrant Shares are to be
      delivered in a name other than the name of the Registered Holder of the Warrant
      being exercised, then no such delivery shall be made unless the person
      requesting the same has paid to the Company the amount of transfer taxes or
      charges incident thereto, if any.

     

    SECTION
      4. EXCHANGE,
      TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
      This
      Warrant is exchangeable, without expense, at the option of the Holder, upon
      presentation and surrender hereof to the Company or at the office of its stock
      transfer agent, if any, for other warrants of different denominations entitling
      the holder thereof to purchase in the aggregate the same number of shares of
      Common Stock purchasable hereunder. Upon surrender of this Warrant to the
      Company at its principal office or at the office of its stock transfer agent,
      if
      any, with the Assignment Form annexed hereto duly executed by the Holder and
      funds sufficient to pay any transfer tax delivered by the Holder, the Company
      shall, without charge, subject to the Holder’s compliance with the restrictive
      legend set forth on the front page of this Warrant, execute and deliver a new
      Warrant in the name of the assignee named in such instrument of assignment
      and
      this Warrant shall promptly be cancelled. This Warrant may be divided or
      combined with other warrants that carry the same rights upon presentation hereof
      at the principal office of the Company or at the office of its stock transfer
      agent, if any, together with a written notice specifying the denominations
      in
      which new warrants are to be issued to the Holder and signed by the Holder
      hereof. The term “Warrants” as used herein includes any warrants into which this
      Warrant may be divided or exchanged. Upon receipt by the Company of evidence
      satisfactory to it of the loss, theft, destruction or mutilation of this
      Warrant, and (in the case of loss, theft or destruction) of reasonably
      satisfactory indemnification, and upon surrender and cancellation of this
      Warrant, if mutilated, the Company will execute and deliver a new Warrant of
      like tenor and date. Any such new Warrant executed and delivered shall
      constitute an additional contractual obligation on the part of the Company,
      whether or not this Warrant so lost, stolen, destroyed, or mutilated shall
      be at
      any time enforceable by anyone.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    SECTION
      5. ANTI-DILUTION
      PROVISIONS.
      The
      Exercise Price in effect at any time and the number and kind of securities
      purchasable upon the exercise of this Warrant shall be subject to adjustment
      from time to time upon the happening of certain events as follows:

     

    (a) In
      case
      the Company shall (i) declare a dividend or make a distribution on its
      outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide
      or
      reclassify its outstanding shares of Common Stock into a greater number of
      shares, or (iii) combine or reclassify its outstanding shares of Common Stock
      into a smaller number of shares, the Exercise Price in effect at the time of
      such dividend or distribution or of the effective date of such subdivision,
      combination or reclassification shall be adjusted so that it shall equal the
      price determined by multiplying the Exercise Price by a fraction, the
      denominator of which shall be the number of shares of Common Stock outstanding
      after giving effect to such action, and the numerator of which shall be the
      number of shares of Common Stock outstanding immediately prior to such action.
      Such adjustment shall be made successively whenever any event listed above
      shall
      occur.

     

    (b) In
      case
      of any reclassification, capital reorganization, exchange of shares,
      liquidation, recapitalization or change of the Common Stock (other than as
      a
      result of a subdivision, combination or stock dividend provided for in
      Section 5(a) hereof), or in case of any consolidation or merger of the
      Company with or into another corporation or entity (other than a merger with
      a
      subsidiary in which merger the Company is the continuing corporation and which
      does not result in any reclassification or capital reorganization or change
      of
      the outstanding Common Stock) or in case of any sale, lease or conveyance to
      another corporation or entity of all or substantially all of the assets of
      the
      Company, then the Company shall, as a condition precedent to such transaction,
      cause lawful and effective provisions to be made (and duly executed documents
      evidencing the same from the Company or its successor shall be delivered to
      the
      Holder) so that the Holder shall have the right thereafter upon exercise of
      this
      Warrant, to purchase the kind and amount of shares of stock and other securities
      and property receivable upon such reclassification, capital reorganization,
      exchange of shares, liquidation, recapitalization, change, consolidation,
      merger, sale or conveyance by a holder of the number of shares of Common Stock
      which might have been received upon conversion of this Warrant immediately
      prior
      to such reclassification, capital reorganization, exchange of shares,
      liquidation, recapitalization, change, consolidation, merger, sale or
      conveyance, and in any such event, such provision shall include provision for
      adjustments which shall be as nearly equivalent as may be practicable to the
      adjustments provided for herein. The Company shall not effect any such
      consolidation, merger, sale, transfer or other disposition described above,
      unless prior to or simultaneously with the consummation thereof the successor
      corporation (if other than the Company) resulting from such consolidation or
      merger or the corporation purchasing or otherwise acquiring such assets shall
      assume, by written instrument executed and mailed or delivered to the Holder
      of
      this Warrant at the last address of the Holder appearing on the books of the
      Company, the obligation to deliver to the Holder such shares of stock,
      securities, cash or properties as, in accordance with the foregoing provisions,
      the Holder may be entitled to acquire. The above provisions of this paragraph
      shall similarly apply to successive reorganizations, reclassifications,
      exchanges, liquidations, recapitalizations, changes, consolidations, mergers,
      sales, transfers or other dispositions, if any.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c) The
      Company shall promptly give written notice of any adjustment under this Section
      5 to each Registered Holder of the Warrants.

     

    (d) Irrespective
      of any adjustments in the Exercise Price or the number or kind of shares of
      Common Stock purchasable upon exercise of this Warrant, this Warrant may
      continue to express the same price and number and kind of Warrant Shares as
      were
      stated prior to such adjustment. In all events, appropriate adjustment (as
      determined in good faith by the Company’s Board of Directors) shall be made in
      the application of the provisions of this Warrant with respect to the rights
      and
      interests of the Holder after the transaction, to the end that the provisions
      of
      this Warrant shall be applicable after that event, as near as reasonably may
      be,
      in relation to any shares or other property deliverable after that event upon
      exercise of this Warrant.

     

    SECTION
      6. REGISTRATION
      UNDER THE SECURITIES ACT OF 1933.
      The
      Company agrees to register the resale of the Warrant Shares under the Securities
      Act on the terms and subject to the conditions set forth in the Registration
      Rights Agreement between the Company and the purchasers of Units in the
      Placement (other than the Excluded Purchaser as defined in the Registration
      Rights Agreement).

     

    SECTION
      7. FRACTIONAL
      WARRANTS AND FRACTIONAL SHARES. The
      Company shall not be required to issue fractions of shares, upon exercise of
      this Warrant or otherwise, or to distribute certificates that evidence
      fractional shares. With respect to any fraction of a share called for upon
      any
      exercise of this Warrant, the Company shall pay to the Holder an amount in
      cash
      equal to such fraction multiplied by the current market value of such fractional
      share, determined in accordance with Section 2(b) hereof, except that the price
      under clauses (i) and (ii) thereof shall be based on the 10 trading days prior
      to the date of exercise of this Warrant.

     

    SECTION
      8. WARRANT
      HOLDERS NOT DEEMED STOCKHOLDERS.
      The
      Holder shall not, as such, be entitled to vote or to receive dividends or be
      deemed the holder of Common Stock that may at any time be issuable upon exercise
      of this Warrant for any purpose whatsoever, nor shall anything contained herein
      be construed to confer upon the Holder, as such, any of the rights of a
      stockholder of the Company or any right to vote for the election of directors
      or
      upon any matter submitted to stockholders at any meeting thereof, or to give
      or
      withhold consent to any corporate action (whether upon any recapitalization,
      issue or reclassification of stock, change of par value or change of stock
      to no
      par value, consolidation, merger or conveyance or otherwise), or to receive
      notice of meetings, or to receive dividends or subscription rights, until the
      Holder shall have exercised this Warrant and been issued shares of Common Stock
      in accordance with the provisions hereof.

     

    SECTION
      9. MODIFICATION.
      The
      provisions of the Warrants may from time to time be amended, modified or waived,
      if such amendment, modification or waiver is in writing and consented to by
      the
      Company and the holders of at least a majority of the outstanding Warrants
      (based on the number of Warrant Shares underlying the Warrants), provided that
      Section 6 may only be modified by the consent of holders of at least eighty
      percent (80%) of the outstanding Warrants (based on the number of Warrant Shares
      underlying the Warrants). Any such amendment, modification or waiver shall
      be
      binding upon the Holder of this Warrant regardless of whether the Holder
      consented to such amendment, modification or waiver; provided that nothing
      shall
      prevent the Company and the Holder from consenting to modifications to this
      Warrant which affect or are applicable to the Holder only.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    SECTION
      10. GOVERNING
      LAW.
      This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of New York, without giving effect to its conflict of laws rules, except
      to the extent that the application of the General Corporation Law of the State
      of Delaware is mandatorily applicable.

     

    SECTION
      11. NOTICES,
      ETC.
      All
      notices, requests, consents and other communications hereunder shall be in
      writing and shall be deemed to have been made when delivered personally, one
      business day after being sent by overnight courier, and five business days
      after
      being mailed first class registered or certified mail, postage prepaid as
      follows (i) if to the Holder, at the address of the Holder as shown on the
      registry books maintained by the Company, or at such other address as the Holder
      shall have furnished to the Company in writing, and (ii) if to the Company,
      to
      it at 425 Market Street, Suite 2230, San Francisco, California 94105, Attention:
      Matthew Loar, or at such other address as the Company shall have furnished
      to
      the Holder.

     

    SECTION
      12. SEVERABILITY.
      If any
      provision of this Warrant is held to be unenforceable under applicable law,
      then
      such provision shall be excluded from this Warrant and the balance of this
      Warrant shall be interpreted as if such provision were so excluded and shall
      be
      enforceable in accordance with its terms. A court of competent jurisdiction,
      in
      its discretion, may substitute for the excluded provision an enforceable
      provision which in economic substance reasonably approximates the excluded
      provision.

     

    SECTION
      13. The
      Company will not, by any voluntary action avoid or seek to avoid the observance
      or performance of any of the terms to be observed or performed hereunder by
      the
      Company, but will at all times in good faith assist in the carrying out of
      all
      provisions of this Warrant and in the taking of all such action as may be
      necessary or appropriate in order to protect the rights of the Holder of this
      Warrant against impairment.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed,
      manually or in facsimile by its officer thereunto duly authorized.

     

    
      	 	 	 
	 	
              OSTEOLOGIX,
                INC.

            
	 
 	 
 	 
 
	
              Dated:
                June 4, 2007

            	By:  	 
	 	
              

              Name:
                Philip Young 

            
	 	
              Title:
                Chief Executive Officer

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

       

    

     

    Annex
      I

     

    NOTICE
      OF
      EXERCISE 

     

    To
      Be
      Executed by the Holder

    in
      Order
      to Exercise Warrants

     

    The
      undersigned Holder hereby irrevocably elects to exercise this Warrant to the
      extent of purchasing ____________________ shares of Common Stock of Osteologix,
      Inc., and requests that certificates for such securities shall be issued in
      the
      name of

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

     

    ______________________________

    ______________________________

    ______________________________

    [please
      print or type name and address]

    and
      be
      delivered to

    ______________________________

    ______________________________

    ______________________________

    [please
      print or type name and address]

     

    and
      if
      such Warrant is not be exercised in full, that a new Warrant to purchase the
      balance of shares be registered in the name of, and delivered to, the Holder
      at
      the address stated below.

     

    If
      Cashless Exercise pursuant to Section 2(b), check here _____, and
      indicate:

    

    Number
      of
      Warrant Shares to be Exchanged: ________________

    

    Exchange
      Date: __________________

     

    
      	Dated:	 	 	
            
	
              
                

              

            	 	 	
              
Name
              (please print)
	
            	 	 	
               

              
                

              

              
                

              

              Address

              
              

            
	 	 	 	 
	 	 	 	
              
Signature 
	 	 	 	 
	 	 	 	
              
Taxpayer
              Identification
              Number

    

     

    
      
        
        

      

      
        9

        
          

        

      

       

    

     

    ASSIGNMENT

     

    To
      Be
      Executed by the Holder

    in
      Order
      to Assign Warrants

     

    FOR
      VALUE
      RECEIVED, ____________________ hereby sells, assigns and transfers
      unto

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

     

    ______________________________

    ______________________________

    ______________________________

    [please
      print or type name and address]

     

    the
      right
      to purchase Common Stock of Osteologix, Inc. represented by this Warrant to
      the
      extent of ____________ shares, and hereby irrevocably constitutes and appoints
      ____________________________________ _______________________________ Attorney
      to
      transfer this Warrant on the books of the Company, with full power of
      substitution in the premises.

    

    
       

      
        	Dated:	 	 	
              
	
                
                  

                

              	 	 	
              
	
                Signature: 

                
                  
 

              	 	 	
                 

              

      

    

     

    
      
        
        

      

      
        10SECURITIES
      PURCHASE AGREEMENT

    

      This
        Securities Purchase Agreement (the “Agreement”)
        is
        dated as of June 4,
        2007, by
        and between Osteologix, Inc., a Delaware corporation (the “Company”),
        Nordic Biotech K/S, a Danish limited partnership (“Nordic”),
        Goldman
        Sachs
        Intl
        (“Goldman”), Biotechnology Value Fund, L.P., a limited
        partnership formed in Delaware
        (“Bio
        Value”), Biotechnology Value Fund II, L.P., a limited
        partnership formed in Delaware
        (“Bio
        Value II”) BVF Investments LLC, a limited
        liability company formed in Delaware
        (“BVF”)
        and Investment 10, L.L.C.,
        a
        limited liability company formed in Illinois
        (“Invest
        10”)
        (Nordic,
        Bio Value, Biovalue II, BVF and Invest 10 shall individually be referred
        to
        herein as a “Purchaser”
and
        shall be collectively be referred to herein as the “Purchasers”).

    

     

    In
      consideration of the mutual covenants contained in this Agreement, and for
      other
      good and valuable consideration the receipt and adequacy of which are hereby
      acknowledged, the Company and each of the Purchasers agree as follows:

     

    

      1. Purchase
        and Sale.
        On the
        Closing Date, in accordance with and subject to the terms and conditions
        described in this Agreement relating to the offering (the “Offering”)
        by the
        Company of an aggregate of 1,912,877
        units
        (the “Units”),
        each
        consisting of two shares of the Company’s Common Stock, $.0001 par value per
        share (the “Common
        Stock”)
        and
        one common stock purchase warrant (a “Warrant”),
        for
        an aggregate purchase price equal to $5,050,000 (the “Aggregate
        Subscription Amount”),
        the
        Company agrees to sell to each of the Purchasers, and each of the Purchasers
        agrees to purchase from the Company, the number of Units set forth next to
        such
        Purchaser’s name of Exhibit
        A hereto
        for a purchase price of $2.64 per Unit. The 3,825,754
        shares
        of Common Stock underlying the Units shall be referred to herein as the
“Shares”.
        The 1,912,877
        common
        stock purchase warrants underlying the Units shall be referred to herein
        as the
“Warrants”.
        The
        Warrants shall be in the form attached hereto as Exhibit
        A.
        Each
        Warrant shall entitle the holder thereof the right to purchase one share
        of
        Common Stock (a “Warrant
        Share”)
        at an
        exercise price equal to $1.20 per share. The Warrants shall expire on August
        31,
        2008.

    

     

    Capitalized
      terms used but not otherwise defined herein shall have the respective meanings
      set forth in Section 7 hereof.

     

    2. Closing,
      Deliverables and Escrow.

     

    (a) Closing.
      On the
      Closing Date, each Purchaser shall purchase from the Company, and the Company
      shall issue and sell to each Purchaser, the number of Units set forth next
      to
      such Purchaser’s name on Exhibit
      A
      hereto,
      and such Purchaser shall pay to the Company in consideration for the such Units,
      the aggregate purchase price (equal to $2.64 per Unit) set forth next to such
      Purchaser’s name on Exhibit
      A
      hereto
      (such amount shall be referred to herein as such Purchaser’s “Subscription
      Amount”).
      On
      the Closing Date, the Closing shall occur at the offices of Loeb & Loeb LLP
      or such other time and location as the parties shall mutually
      agree.

     

    (b) Deliveries.

     

    (1) On
      or
      prior to the Closing Date, the Company shall deliver or cause to be delivered
      to
      each of the Purchasers the following:

     

    
      	 	
              i.

            	
              this
                Agreement and the Registration Rights Agreement duly executed by
                the
                Company;

            

    

     

    
      	 	
              ii.

            	
              a
                certificate evidencing the Shares registered in the name of each
                of the
                Purchasers; 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              iii.

            	
              the
                Warrants duly executed by the Company;
                and

            

    

     

    
      	 	
              iv.

            	
              the
                Opinion of Company counsel substantially in the form of Exhibit
                B,
                attached hereto.

            

    

     

    (2) On
      or
      prior to the Closing Date, each of the Purchasers shall deliver or cause to
      be
      delivered to the Company the following:

     

    
      	 	
              i.

            	
              this
                Agreement and, the Registration Rights Agreement duly executed by
                such
                Purchaser; and

            

    

     

    
      	 	
              ii.

            	
              such
                Purchaser’s Subscription Amount by wire transfer to an account designated
                in writing by the Company.

            

    

     

    (c) Closing
      Conditions.

     

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

     

    
      	 	
              i.

            	
              the
                accuracy in all material respects on the Closing Date of the
                representations and warranties of each of the Purchasers contained
                herein;

            

    

     

    
      	 	
              ii.

            	
              all
                obligations, covenants and agreements of each of the Purchasers required
                to be performed at or prior to the Closing Date shall have been
                performed;

            

    

     

    
      	 	
              iii.

            	
              the
                delivery by the each of the Purchasers of the items set forth in
                Section
                2(b)(2) of this Agreement; and

            

    

     

    
      	 	
              iv.

            	
              the
                delivery by each of the Purchaser of a
                certificate, executed by an authorized officer of such Purchaser
                dated as
                of the Closing Date, certifying on
                behalf of such Purchaser that such Purchaser has satisfied the
                conditions specified in Sections 2(c)(1)(i) and
                (ii).

            

    

     

    (2) The
      obligations of each of the Purchasers in connection with the Closing are subject
      to the following conditions being met:

     

    
      	 	
              i.

            	
              the
                accuracy in all material respects on the Closing Date of the
                representations and warranties of the Company contained
                herein;

            

    

     

    
      	 	
              ii.

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

            

    

     

    
      	 	
              iii.

            	
              the
                delivery by the Company of the items set forth in Section 2(b)(1)
                of this
                Agreement;

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              iv.

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

            

    

     

    
      	 	
              v.

            	
              the
                delivery by the Company of a
                certificate, executed by the President of the Company dated as of
                the
                Closing Date, certifying on
                behalf of the Company that
                the Company has satisfied the
                conditions specified in Sections 2(c)(2)(i), (ii), (iv) and (vi);
                and

            

    

     

    
      	 	
              vi.

            	
              the
                Aggregate Subscription Amount received and accepted by the Company
                from
                all Purchasers shall be at least Four Million Five Hundred Thousand
                Dollars ($4,500,000).

            

    

     

    3. Acceptance
      of Subscription.
      The
      Company shall have no obligation hereunder until the Company shall execute
      and
      deliver to each of the Purchasers an executed copy of this Agreement. If this
      subscription is rejected or the Offering is terminated, in each case, prior
      to
      execution and delivery of this Agreement by the Company, this Agreement and
      all
      other documents executed by each of the Purchasers shall thereafter be of no
      further force or effect.

     

    4. Purchaser
      Representations and Warranties.
      Each of
      the Purchasers hereby severally, and not jointly with any other Purchaser,
      represents, warrants, acknowledges and agrees as of the date hereof and as
      of
      the Closing Date to the Company as follows:

     

    (a) Neither
      the Units, the Shares, the Warrants or the Warrant Shares are registered under
      the Securities Act of 1933, as amended (the “Securities
      Act”),
      or
      any state securities laws and, except as set forth in Section 6A of this
      Agreement, the Company has no present or future obligation to register the
      Units, the Shares, the Warrants or the Warrant Shares under the Securities
      Act
      or any state securities laws. Such Purchaser understands that the offering
      and
      sale of the Units, the Shares, the Warrants and the Warrant Shares is intended
      to be exempt from registration under the Securities Act, by virtue of Section
      4(2) thereof and the provisions of Regulation D promulgated thereunder, or
      not
      subject to such requirement, by virtue of Regulation S promulgated under the
      Securities Act, based, in part, upon the representations, warranties and
      agreements of such Purchaser contained in this Agreement.

     

    (b) Such
      Purchaser has had access to all documents heretofore filed by the Company with
      the Commission (the “SEC
      Reports”)
      and
      has received all other documents requested by such Purchaser. Such Purchaser
      has
      carefully reviewed the SEC Reports and all such other documents and understands
      the information contained therein.

     

    (c) All
      documents, records and books pertaining to the investment in the Units, the
      Shares, the Warrants and the Warrant Shares have been made available for
      inspection by such Purchaser and its representatives. Such Purchaser hereby
      acknowledges that all such information is confidential and such Purchaser shall
      not disclose any such confidential information to any third party other than
      as
      may be required by law.

     

    (d) Such
      Purchaser has had a reasonable opportunity to ask questions of and receive
      answers from a person or persons acting on behalf of the Company concerning
      the
      offering of the Units, the Shares, the Warrants and the Warrant Shares and
      the
      business, financial condition, results of operations and prospects of the
      Company, and all such questions have been answered to the full satisfaction
      of
      such Purchaser. Neither such inquiries nor any other investigation conducted
      by
      or on behalf of such Purchaser or its representatives or counsel shall modify,
      amend or affect such Purchaser’s right to rely on the truth, accuracy and
      completeness of the Company’s representations and warranties contained in this
      Agreement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (e) In
      evaluating the suitability of an investment in the Company, such Purchaser
      has
      not relied upon any representation or other information (oral or written) other
      than as stated in this Agreement.

     

    (f) Such
      Purchaser is unaware of, is in no way relying on, and did not become aware
      of
      the Offering through or as a result of, any form of general solicitation or
      general advertising as those terms are used in Regulation D under the Securities
      Act, including, without limitation, any article, notice, advertisement or other
      communication published in any newspaper, magazine or similar media or broadcast
      over television or radio, in connection with the Offering and is not subscribing
      for Units and did not become aware of the Offering through or as a result of
      any
      seminar or meeting to which such Purchaser was invited by, or any solicitation
      of a subscription by, a person not previously known to such
      Purchaser.

     

    (g) Such
      Purchaser has taken no action which would give rise to any claim by any person
      for brokerage commissions, finders’ fees or the like relating to this Agreement
      or the transactions contemplated hereby.

     

    (h) Such
      Purchaser has such knowledge and experience in financial, tax, and business
      matters, and, in particular, investments in securities similar to the Units,
      the
      Shares, the Warrants and the Warrant Shares so as to enable such Purchaser
      to
      utilize the information made available to it in connection with the Offering
      to
      evaluate the merits and risks of an investment in the Units, the Shares, the
      Warrants and the Warrant Shares and the Company and to make an informed
      investment decision with respect thereto.

     

    (i) Such
      Purchaser is not relying on the Company or any of its employees, officers or
      agents with respect to the legal, tax, economic and related considerations
      as to
      an investment in the Units, the Shares, the Warrants and the Warrant Shares
      and
      such Purchaser has relied on the advice of, or has consulted with, only his
      own
      advisors.

     

    (j) Such
      Purchaser is acquiring the Units, the Shares, the Warrants and the Warrant
      Shares solely for such Purchaser's own account for investment and not with
      a
      view to resale, assignment or distribution thereof, in whole or in part in
      violation of the Securities Act or any applicable state securities laws. Such
      Purchaser has no agreement or arrangement, formal or informal, with any person
      to sell or transfer all or any part of the Units, the Shares, the Warrants
      or
      the Warrant Shares in violation of the Securities Act or any state securities
      laws and such Purchaser has no plans to enter into any such agreement or
      arrangement. Such Purchaser will not engage in hedging transactions with respect
      to the Units, the Shares, the Warrants or the Warrant Shares unless in
      compliance with the registration requirements of the Securities
      Act.

     

    (k) Such
      Purchaser must bear the substantial economic risks of the investment in the
      Units, the Shares, the Warrants and the Warrant Shares indefinitely because
      none
      of the Units, the Shares, the Warrants and the Warrant Shares may be sold,
      hypothecated or otherwise disposed of unless subsequently registered under
      the
      Securities Act and applicable state securities laws or an exemption from such
      registration is available. Subject to the terms hereunder, legends shall be
      placed on the Units, the Shares, the Warrants and the Warrant Shares to the
      effect that they have not been registered under the Securities Act or applicable
      state securities laws and appropriate notations thereof will be made in the
      Company’s stock books. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (l) Such
      Purchaser has adequate means of providing for its current financial needs and
      foreseeable contingencies and has no need for liquidity of the investment in
      the
      Units, the Shares, the Warrants and the Warrant Shares for an indefinite period
      of time.

     

    (m) Such
      Purchaser (i) meets the requirements of the suitability standards for an
“accredited investor” because such Purchaser is a corporation, partnership,
      limited liability company, limited liability partnership, other entity or
      similar business trust, not formed for the specific purpose of acquiring the
      Units, with total assets excess of $5,000,000 or (ii) is a “non-US Person” that
      is a “qualified investor” as defined in the European Union Prospective
      Directive. Such Purchaser further represents and warrants that it will notify
      and supply corrective information to the Company immediately upon the occurrence
      of any change occurring prior to the Company's issuance of the Units, the
      Shares, the Warrants and the Warrant Shares that renders the representation
      made
      in the immediately preceding sentence. Such Purchaser represents to the Company
      that any information which the undersigned has heretofore furnished under this
      Section 4(m) or furnishes to the Company pursuant to this Section 4(m) is
      complete and accurate and may be relied upon by the Company in determining
      the
      availability of an exemption from registration under Federal and state
      securities laws in connection with the Offering.

     

    (n) Such
      Purchaser represents that it is a corporation, partnership, limited liability
      company or partnership, association, joint stock company, trust, unincorporated
      organization or other entity, and that (A) such Purchaser was not formed for
      the
      specific purpose of acquiring the Units, (B) such Purchaser is duly organized,
      validly existing and in good standing under the laws of the jurisdiction of
      its
      organization, (C) the consummation of the transactions contemplated hereby
      is
      authorized by, and will not result in a violation of law or the charter or
      other
      organizational documents of such Purchaser, (D) such Purchaser has full power
      and authority to execute and deliver this Agreement and all other related
      agreements or certificates and to carry out the provisions hereof and thereof
      and to purchase and hold the Units, the Shares, the Warrants and the Warrant
      Shares, (E) the execution and delivery of this Agreement has been duly
      authorized by all necessary action of such Purchaser, (F) this Agreement has
      been duly executed and delivered on behalf of such Purchaser and constitutes
      a
      legal, valid and binding obligation of such Purchaser, enforceable against
      such
      Purchaser in accordance with its terms subject to applicable bankruptcy,
      insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
      affecting creditors’ rights and remedies generally and general principles of
      equity and (G) the execution and delivery of this Agreement by such Purchaser
      will not violate or be in conflict with any order, judgment, injunction,
      agreement or controlling document to which such Purchaser is a party or by
      which
      such Purchaser is bound.

     

    (o) Such
      Purchaser is able to bear the economic risk of an investment in the Units,
      the
      Shares, the Warrants and the Warrant Shares and, at the present time, has a
      sufficient net worth to sustain a complete loss of such investment in the
      Company in the event such a loss should occur. Such Purchaser’s overall
      commitment to investments which are not readily marketable is not excessive
      in
      view of its net worth and financial circumstances and the purchase of the Units
      will not cause such commitment to become excessive. 

     

    (p) THE
      SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED
      AND SOLD IN RELIANCE ON EXEMPTIONS FROM, OR IN TRANSACTIONS NOT SUBJECT TO,
      THE
      REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES OFFERED
      HEREBY MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
      ACT OF 1933 AS AMENDED AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED
      BY THE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
      AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
      THE
      MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
      UNLAWFUL.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (q) Such
      Purchaser should check the Office of Foreign Assets Control
      (“OFAC”)
      website at <http://www.treas.gov/ofac> before making the following
      representations.
      Such
      Purchaser represents that the amounts invested by it in the Company in the
      Offering were not and are not directly or indirectly derived from activities
      that contravene federal, state or international laws and regulations, including
      anti-money laundering laws and regulations. Federal regulations and Executive
      Orders administered by OFAC prohibit, among other things, the engagement in
      transactions with, and the provision of services to, certain foreign countries,
      territories, entities and individuals. The lists of OFAC prohibited countries,
      territories, persons and entities can be found on the OFAC website at
<http://www.treas.gov/ofac>. In addition, the programs administered by
      OFAC (the “OFAC
      Programs”)
      prohibit dealing with individuals1 
      or
      entities in certain countries regardless of whether such individuals or entities
      appear on the OFAC lists.

     

    (r) To
      such
      Purchaser’s knowledge, none of: (1) such Purchaser, (2) any person controlling
      or controlled by such Purchaser, (3) if such Purchaser is a privately-held
      entity, any person having a beneficial interest in such Purchaser, or (4) any
      person for whom such Purchaser is acting as agent or nominee in connection
      with
      this investment is a country, territory, individual or entity named on an OFAC
      list, or a person or entity prohibited under the OFAC Programs. Please be
      advised that the Company may not accept any amounts from a prospective investor
      if such prospective investor cannot make the representation set forth in the
      preceding paragraph. Such Purchaser agrees to promptly notify the Company should
      such Purchaser become aware of any change in the information set forth in
      Sections 4(r) - (t) these representations. Such Purchaser understands and
      acknowledges that, by law, the Company may be obligated to “freeze the account”
of such Purchaser, either by prohibiting additional subscriptions from such
      Purchaser, declining any redemption requests and/or segregating the assets
      in
      the account in compliance with governmental regulations. Such Purchaser further
      acknowledges that the Company may, by written notice to such Purchaser, suspend
      the redemption rights, if any, of such Purchaser if the Company reasonably
      deems
      it necessary to do so to comply with anti-money laundering regulations
      applicable to the Company or any of the Company’s other service providers. These
      individuals include specially designated nationals, specially designated
      narcotics traffickers and other parties subject to OFAC sanctions and embargo
      programs.

     

    (s) To
      such
      Purchaser’s knowledge, none of: (1) such Purchaser, (2) any person controlling
      or controlled by such Purchaser, (3) if such Purchaser is a privately-held
      entity, any person having a beneficial interest in such Purchaser, or (4) any
      person for whom such Purchaser is acting as agent or nominee in connection
      with
      this investment is a senior foreign political figure2 , or
      any
      immediate family3 
      member or
      close
      associate4  of
      a
      senior foreign political figure, as such terms are defined in the footnotes
      below.

     

    
      
        

      

    

    
      
        1 These
          individuals include specially designated nationals, specially designated
          narcotics traffickers and other parties subject to OFAC sanctions and embargo
          programs.

         

      

      
        2 A
“senior
          foreign political figure” is defined as a senior official in the executive,
          legislative, administrative, military or judicial branches of a foreign
          government (whether elected or not), a senior official of a major foreign
          political party, or a senior executive of a foreign government-owned
          corporation. In addition, a “senior foreign political figure” includes any
          corporation, business or other entity that has been formed by, or for the
          benefit of, a senior foreign political figure.

         

      

      
        3 “Immediate
          family” of a senior foreign political figure typically includes the figure’s
          parents, siblings, spouse, children and in-laws.

      

       

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (t) If
      such
      Purchaser is affiliated with a non-U.S. banking institution (a “Foreign
      Bank”),
      or if
      such Purchaser receives deposits from, makes payments on behalf of, or handles
      other financial transactions related to a Foreign Bank, such Purchaser
      represents and warrants to the Company that: (1) the Foreign Bank has a fixed
      address, other than solely an electronic address, in a country in which the
      Foreign Bank is authorized to conduct banking activities, (2) the Foreign Bank
      maintains operating records related to its banking activities, (3) the Foreign
      Bank is subject to inspection by the banking authority that licensed the Foreign
      Bank to conduct banking activities, and (4) the Foreign Bank does not provide
      banking services to any other Foreign Bank that does not have a physical
      presence in any country and that is not a regulated affiliate.

     

    5. Company
      Representations and Warranties. The
      Company hereby represents, warrants, acknowledges and agrees as of the date
      hereof and as of the Closing Date to such Purchaser as follows:

     

    (a) Subsidiaries.
      Except
      as disclosed in the SEC Reports, the Company has no direct or indirect
      subsidiaries.

     

    (b) Organization
      and Qualification.
      The
      Company is an entity duly incorporated or otherwise organized, validly existing
      and in good standing under the laws of the State of Delaware, with the requisite
      power and authority to own and use its properties and assets and to carry on
      its
      business as currently conducted. The Company is not in violation of any of
      the
      provisions of its Certificate of Incorporation or By-Laws.

     

    (c) Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the Offering. The execution and delivery of this Agreement, the
      Registration Rights Agreement and the Warrants by the Company and the
      consummation by it of the transactions contemplated hereby and thereby have
      been
      duly authorized by all necessary action on the part of the Company and no
      further consent or action is required by the Company, other than the Required
      Approvals (as defined below). This Agreement, the Registration Rights Agreement
      and the Warrants, when executed and delivered in accordance with the terms
      hereof, will each constitute the valid and binding obligation of the Company
      enforceable against the Company in accordance with their respective terms,
      subject to applicable bankruptcy, insolvency, fraudulent conveyance,
      reorganization, moratorium and similar laws affecting creditors’ rights and
      remedies generally and general principles of equity.

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of this Agreement, the Registration Rights
      Agreement and the Warrants by the Company and the consummation by the Company
      of
      the transactions contemplated hereby and thereby do not and will not: (i)
      conflict with or violate any provision of the Company’s Certificate of
      Incorporation or By-Laws, or (ii) conflict with, or constitute a default (or
      an
      event that with notice or lapse of time or both would become a default) under,
      or give to others any rights of termination, amendment, acceleration or
      cancellation (with or without notice or lapse of time or both) of, any
      agreement, credit facility, debt or other instrument (evidencing a Company
      debt
      or otherwise) or other understanding to which the Company is a party or by
      which
      any material property or asset of the Company is bound or affected, or (iii)
      subject to obtaining the Required Approvals (as defined below), result in a
      violation of any law, rule, regulation, order, judgment, injunction, decree
      or
      other restriction of any court or governmental authority as currently in effect
      to which the Company is subject (including federal and state securities laws
      and
      regulations), or by which any material property or asset of the Company is
      bound
      or affected; except in the case of each of clauses (ii) and (iii), such as
      could
      not, individually or in the aggregate (a) adversely affect the legality,
      validity or enforceability of the Offering, (b) have or result in a material
      adverse effect on the results of operations, assets, prospects, business or
      condition (financial or otherwise) of the Company, taken as a whole, or (c)
      adversely impair the Company's ability to perform fully on a timely basis its
      obligations under this Agreement (any of (a), (b) or (c), a “Material
      Adverse Effect”);
      provided,
      however,
      that,
      notwithstanding the foregoing, the parties agree that no change in the market
      price of the Company’s Common Stock shall be deemed to be a Material Adverse
      Effect for purposes of this Agreement 

     

      
        

      

    

    
      4 A
“close
        associate” of a senior foreign political figure is a person who is widely and
        publicly known to maintain an unusually close relationship with the senior
        foreign political figure, and includes a person who is in a position to conduct
        substantial domestic and international financial transactions on behalf of
        the
        senior foreign political figure.

       

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (e) Filings,
      Consents and Approvals.
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of this
      Agreement, the Registration Rights Agreement and the Warrants other than (i)
      the
      filing with the Commission of the registration statement required to be filed
      by
      the Company pursuant to the Registration Rights Agreement, (ii) the filing
      with
      the Commission of a Form D pursuant to Regulation D under the Securities Act
      and
      (iii) applicable Blue Sky filings (collectively, the “Required
      Approvals”).

     

    (f) Issuance
      of the Shares.
      The
      Shares and Warrant Shares are duly authorized and, when issued and paid for
      in
      accordance with this Agreement, will be duly and validly issued, fully paid
      and
      nonassessable, free and clear of all Liens. Assuming the accuracy of the
      Purchasers’ representations and warranties set forth in Section 4, no
      registration under the Securities Act is required for the offer and sale of
      the
      Units, the Shares, the Warrants and the Warrant Shares by the Company to each
      of
      the Purchasers as contemplated hereby. No shareholder approval is required
      for
      the Company to fulfill its obligations pursuant to this Agreement, the
      Registration Rights Agreement or the Warrants. As of the Closing, the Company
      will have reserved from its duly authorized capital stock the maximum number
      of
      shares of Common Stock issuable pursuant to this Agreement and the
      Warrants.

     

    (g) Capitalization.
      The
      number of shares of Common Stock and type of all authorized, issued and
      outstanding capital stock of the Company is as set forth in the SEC Reports.
      Except as set forth in each of the Subscription Agreements dated May 24, 2006
      between the Company and the respective Subscribers named therein (the “Initial
      Subscription Agreements”), no Person has any right of first refusal, preemptive
      right, right of participation, or any similar right to participate in the
      Offering. Except as a result of the purchase and sale of the Units which may
      be
      issued in connection with this Offering and, except as described in the SEC
      Reports, there are no outstanding options, warrants, script rights to subscribe
      to, calls or commitments of any character whatsoever relating to shares of
      Common Stock, or, rights or obligations convertible into or exchangeable for,
      or
      giving any Person any right to subscribe for or acquire, any shares of Common
      Stock, or contracts, commitments, understandings or arrangements by which the
      Company is or may become bound to issue additional shares of Common Stock or
      rights convertible or exchangeable into shares of Common Stock. The issuance
      and
      sale of the Units will not obligate the Company to issue shares of Common Stock,
      or Units to any Person (other than the Purchasers) and will not result in a
      right of any holder of Company equity to adjust the exercise, conversion,
      exchange or reset price under any outstanding securities. All of the outstanding
      shares of capital stock of the Company issued on and after May 24, 2006 are
      validly issued, fully paid and non-assessable, have been issued in compliance
      with federal and state securities laws, and none of such outstanding shares
      was
      issued in violation of any preemptive rights or similar rights to subscribe
      for
      or purchase securities.

     

    (h) SEC
      Reports; Financial Statements.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it under the Securities Act and the Securities Exchange
      Act of 1934, as amended (the “Exchange
      Act”),
      including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law to file such material) (the foregoing materials, including the exhibits
      thereto and documents incorporated by reference therein, being collectively
      referred to herein as the “SEC
      Reports”)
      on a
      timely basis. As of their respective dates, the SEC Reports complied in all
      material respects with the requirements of the Securities Act and the Exchange
      Act and the rules and regulations of the SEC promulgated thereunder, and none
      of
      the SEC Reports, when filed, contained any untrue statement of a material fact
      or omitted to state a material fact required to be stated therein or necessary
      in order to make the statements therein, in the light of the circumstances
      under
      which they were made, not misleading. The financial statements of the Company
      included in the SEC Reports have been prepared in accordance with United States
      generally accepted accounting principles applied on a consistent basis during
      the periods involved (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto, and fairly present in all material respects the financial position
      of
      the Company as of and for the dates thereof and the results of operations and
      cash flows for the periods then ended.

     

    
      
        
        

      

      
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    (i) Material
      Changes.
      Except
      for the proposed Offering or as otherwise described in the SEC Reports, since
      the date of the latest financial statements included in the SEC Reports: (i)
      there has been no event, occurrence or development that has had or could
      reasonably be expected to result in a Material Adverse Effect, (ii) the Company
      has not incurred any liabilities (contingent or otherwise) other than (A) trade
      payables and accrued expenses incurred in the ordinary course of business
      consistent with past practice, and (B) liabilities not required to be reflected
      in the Company’s financial statements pursuant to GAAP or required to be
      disclosed in filings made with the Commission, (iii) the Company has not altered
      its method of accounting or the identity of its auditors, (iv) the Company
      has
      not declared or made any dividend or distribution of cash or other property
      to
      its stockholders except in the ordinary course of business consistent with
      prior
      practice, or purchased, redeemed or made any agreements to purchase or redeem
      any shares of its capital stock except consistent with prior practice or
      pursuant to existing Company stock option or similar plans, and (v) the Company
      has not issued any equity shares to any officer, director or affiliate, except
      pursuant to existing Company stock option or similar plans.

     

    (j) Litigation.
      Except
      as disclosed in the SEC Reports, there is no action, suit, inquiry, notice
      of
      violation, Proceeding or investigation pending or, to the knowledge of the
      Company, threatened against or affecting the Company or its properties before
      or
      by any court, arbitrator, governmental or administrative agency or regulatory
      authority (federal, state, county, local or foreign) (collectively, an
“Action”)
      which:
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      this Agreement, the Registration Rights Agreement, the Warrants or the Offering
      or (ii) could, if there were an unfavorable decision, individually or in the
      aggregate, have or reasonably be expected to result in a Material Adverse
      Effect. The Company is not nor has it ever been the subject of any Action
      involving a claim of violation of or liability under federal or state securities
      laws. There has not been, and to the knowledge of the Company, there is not
      pending or contemplated, any investigation by the Commission involving the
      Company. The Commission has not issued any stop order or other order suspending
      the effectiveness of any registration statement filed by the Company under
      the
      Exchange Act or the Securities Act. 

     

    (k) Compliance.
      Except
      as disclosed in the SEC Reports, the Company: (i) is not in default under
      or in violation of (and no event has occurred that has not been waived that,
      with notice or lapse of time or both, would result in a default by the Company
      under), nor has the Company received notice of a claim that it is in default
      under or that it is in violation of, any material indenture, loan or credit
      agreement or any other material agreement or instrument to which it is a party
      or by which it or any of its properties is bound (whether or not such default
      or
      violation has been waived), which default or violation would have or result
      in a
      Material Adverse Effect, (ii) is not in violation of any order of any court,
      arbitrator or governmental body, and (iii) is not and has not been in violation
      of any statute, rule or regulation of any governmental authority, except in
      each
      case as would not, individually or in the aggregate, have or result in a
      Material Adverse Effect.

     

    
      
        
        

      

      
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    (l) Regulatory
      Permits.
      Except
      as otherwise described in the SEC Reports, the Company possesses or has applied
      for all certificates, authorizations and permits issued by the appropriate
      federal, state, local or foreign regulatory authorities necessary to conduct
      its
      business as described in the SEC Reports, except where the failure to possess
      such permits would not, individually or in the aggregate, have a Material
      Adverse Effect (“Material
      Permits”),
      and
      the Company has not received any notice of Proceedings relating to the
      revocation or modification of any Material Permit.

     

    (m) Title
      to Assets.
      The
      Company and its subsidiaries have title in fee simple to all real property
      owned
      by them that is material to the business of the Company and its subsidiaries
      and
      title in all personal property owned by them that is material to the business
      of
      the Company and its subsidiaries, in each case free and clear of all Liens,
      except for Liens as do not materially affect the value of such property and
      do
      not materially interfere with the use made and proposed to be made of such
      property by the Company and its subsidiaries and Liens for the payment of
      federal, state or other taxes, the payment of which is neither delinquent nor
      subject to penalties. Any real property and facilities held under lease by
      the
      Company or its subsidiaries is held by them under valid leases of which the
      Company and its subsidiaries are in compliance, except as would not have a
      Material Adverse Effect.

     

    (n) Patents
      and Trademarks.
      The
      Company and its subsidiaries either own, or have rights to use, all patents,
      patent applications, trademarks, trademark applications, service marks, trade
      names, copyrights, licenses and other similar rights that are necessary or
      material for use in connection with their respective businesses as described
      in
      the SEC Reports and which the failure to so have or could reasonably be expected
      to result in a Material Adverse Effect (collectively, the “Intellectual
      Property Rights”).
      The
      Company and its subsidiaries have not (i) received a written notice that the
      Intellectual Property Rights owned or used by the Company or its subsidiaries
      violates or infringes upon the rights of any Person, or (ii) received a written
      invitation to license any intellectual property rights of any Person in order
      to
      avoid such a violation or infringement. To the knowledge of the Company, there
      is no existing infringement of any of the Intellectual Property Rights by any
      Person.

     

    (o) Insurance.
      The
      Company and its subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks, including, without limitation,
      products liability, and in such amounts as are prudent and customary in the
      businesses in which the Company and its subsidiaries are engaged. Neither the
      Company nor any of its subsidiaries has any reason to believe that it will
      not
      be able to renew its existing insurance coverage as and when such coverage
      expires or to obtain similar coverage from similar insurers as may be necessary
      to continue its business on terms consistent with market for the Company’s and
      each of its subsidiary’s respective lines of business.

     

    (p) Sarbanes-Oxley;
      Internal Accounting Controls.
      The
      Company is in material compliance with all provisions of the Sarbanes-Oxley
      Act
      of 2002 which are applicable to it. The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences. The Company has established disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
      15d-15(e)) for the Company and designed such disclosure controls and procedures
      to ensure that material information relating to the Company is made known to
      the
      certifying officers by others within those entities, particularly during the
      period in which the Company’s most recently filed periodic report under the
      Exchange Act, as the case may be, is being prepared. The Company presented
      in
      its most recent periodic report filed with the Commission, the conclusions
      of
      the certifying officers about the effectiveness of the disclosure controls
      and
      procedures. The Company’s certifying officers have evaluated the effectiveness
      of the Company’s controls and procedures as of March 31, 2007 (the “Evaluation
      Date”). Since the Evaluation Date, there have been no significant changes in the
      Company’s internal controls (as such term is defined in Item 307 of Regulation
      S-B under the Exchange Act) or, to the knowledge of the Company, in other
      factors that could significantly affect the Company’s internal
      controls.

     

    
      
        
        

      

      
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    (q) Lack
      of Publicity.
      None of
      the Company, its subsidiaries or any person acting on its or their behalf have
      engaged or will engage in any form of general solicitation or general
      advertising as those terms are used in Regulation D under the Securities Act
      in
      the United States with respect to the Units, the Shares, the Warrants or the
      Warrant Shares, including, without limitation, any article, notice,
      advertisement or other communication published in any newspaper, magazine or
      similar media or broadcast over television or radio, regarding the offering,
      nor
      did any such person sponsor any seminar or meeting to which potential investors
      were invited by, or any solicitation of a subscription by, a person not
      previously known to such investor in connection with investments in the Units,
      the Shares, the Warrants or the Warrant Shares generally. None of the Company,
      its subsidiaries or any person acting on its or their behalf have engaged or
      will engage in any form of directed selling efforts (as that term is used in
      Regulation S under the Securities Act) with respect to the Units, the Shares,
      the Warrants or the Warrant Shares.

     

    (r) Certain
      Fees.
      No
      brokerage commissions, finder’s fees or the like are or will be payable by the
      Company to any broker, financial advisor or consultant, finder, placement agent,
      investment banker, bank or other Person with respect to the transactions
      contemplated by this Agreement other than pursuant to the Placement Agency
      Agreement dated December 14, 2005 among Osteologix Inc., a Georgia corporation,
      Rodman & Renshaw LLC and Roth Capital Partners LLC.

     

    (s) Registration
      Rights.
      Other
      than pursuant to the Registration Rights Agreement dated as of May 24, 2006
      by
      and among Osteologix, Inc., a Georgia corporation, Castle & Morgan Holdings
      Inc. and the purchasers signatory thereto and other than the Purchasers, no
      Person has any right to cause the Company to effect the registration under
      the
      Securities Act of any securities of the Company.

     

    (t) Solvency.
      Based
      on the financial condition of the Company as of the Closing Date after giving
      effect to the receipt by the Company of the proceeds from the sale of the Shares
      hereunder, (i) the Company’s fair saleable value of its assets exceeds the
      amount that will be required to be paid on or in respect of the Company’s
      existing debts and other liabilities (including known contingent liabilities)
      as
      they mature; (ii) the Company’s assets do not constitute unreasonably small
      capital to carry on its business for the current fiscal year as now conducted
      and as proposed to be conducted including its capital needs taking into account
      the particular capital requirements of the business conducted by the Company,
      and projected capital requirements and capital availability thereof; and (iii)
      the current cash flow of the Company, together with the proceeds the Company
      would receive, were it to liquidate all of its assets, after taking into account
      all anticipated uses of the cash, would be sufficient to pay all amounts on
      or
      in respect of its debt when such amounts are required to be paid. The Company
      does not intend to incur debts beyond its ability to pay such debts as they
      mature (taking into account the timing and amounts of cash to be payable on
      or
      in respect of its debt). The Company has no knowledge of any facts or
      circumstances which lead it to believe that it will file for reorganization
      or
      liquidation under the bankruptcy or reorganization laws of any jurisdiction
      within one year from the Closing Date. The SEC Reports set forth as of the
      dates
      thereof all outstanding secured and unsecured Indebtedness of the Company or
      any
      of its subsidiaries, or for which the Company or any of its subsidiaries has
      commitments. For the purposes of this Agreement, “Indebtedness”
shall
      mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000
      (other than trade accounts payable incurred in the ordinary course of business),
      (b) all guaranties, endorsements and other contingent obligations in respect
      of
      Indebtedness of others, whether or not the same are or should be reflected
      in
      the Company’s balance sheet (or the notes thereto), except guaranties by
      endorsement of negotiable instruments for deposit or collection or similar
      transactions in the ordinary course of business; and (c) the present value
      of
      any lease payments
      in excess of $50,000 due under leases required to be capitalized in accordance
      with GAAP. Neither
      the Company nor any of its subsidiaries is in default with respect to any
      Indebtedness.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (u) Tax
      Status.
      Except
      for matters that would not, individually or in the aggregate, have or reasonably
      be expected to result in a Material Adverse Effect, the Company and each of
      its
      subsidiaries have filed all necessary federal, state and foreign income and
      franchise tax returns or have timely filed for valid extensions to the filing
      deadlines applicable to them with respect to such taxes and has paid or accrued
      all taxes shown as due thereon, and the Company has no knowledge of a tax
      deficiency which has been asserted or threatened against the Company or any
      of
      its subsidiaries.

     

    (v) Foreign
      Corrupt Practices.
      Neither
      the Company, nor to the knowledge of the Company, any agent or other person
      acting on behalf of the Company, has (i) directly or indirectly, used any funds
      for unlawful contributions, gifts, entertainment or other unlawful expenses
      related to foreign or domestic political activity, (ii) made any unlawful
      payment to foreign or domestic government officials or employees or to any
      foreign or domestic political parties or campaigns from corporate funds, (iii)
      failed to disclose fully any contribution made by the Company (or made by any
      person acting on its behalf of which the Company is aware) which is in violation
      of law, or (iv) violated in any material respect any provision of the Foreign
      Corrupt Practices Act of 1977, as amended.

     

    (w) Shareholders
      Rights Plan; Investment Company Act.
      No
      claim will be made or enforced by the Company that any of the Purchasers is
      an
“Acquiring
      Person”
under
      any shareholders rights plan or similar plan or arrangement in effect or
      hereafter adopted by the Company, or that any Purchaser could be deemed to
      trigger the provisions of any such plan or arrangement, by virtue of receiving
      Units, Shares, Warrants or Warrant Shares. The Company is not, and is not an
      Affiliate of, and immediately after receipt of payment for the Units, will
      not
      be or be an Affiliate of, an “investment company” within the meaning of the
      Investment Company Act of 1940, as amended (the “Investment
      Company Act”).
      

     

    (x) Disclosure.
      The
      disclosure provided to each of the Purchasers regarding the Company, its
      business and the transactions contemplated hereby, furnished by or on behalf
      of
      the Company, including the SEC Reports and any Disclosure Schedules furnished
      by
      the Company with respect to the representations and warranties made herein
      does
      not contain any untrue statement of a material fact or omit to state any
      material fact necessary in order to make the statements made therein, in light
      of the circumstances under which they were made, not misleading. 

     

    (y) SB-2
      Registration Statement.
      The
      Company is eligible to use Form SB-2 to register the Registrable Securities
      (as
      such term is defined in the Registration Rights Agreement) for sale by certain
      of the Purchasers as contemplated by the Registration Rights
      Agreement.

     

    
      
        
        

      

      
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    6. Covenants
      of the Purchasers and the Company.

     

    (a) Transfer
      Restrictions.

     

    (1) The
      Units, the Shares, the Warrants and the Warrant Shares may only be disposed
      of
      in compliance with state and federal securities laws. In connection with any
      transfer of such securities (or hedging activities involving such securities)
      other than pursuant to an effective registration statement or Rule 144, to
      the
      Company or to an affiliate of any Purchaser or in connection with a pledge
      as
      contemplated below, the Company may require the transferor thereof to provide
      to
      the Company an opinion of counsel selected by the transferor and reasonably
      acceptable to the Company, the form and substance of which opinion shall be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred securities under the Securities
      Act. As a condition of transfer, any such transferee shall agree in writing
      to
      be bound by the terms of this Agreement and shall have the rights of a Purchaser
      under this Agreement.

     

    (2) Each
      of
      the Purchasers agrees to the imprinting, so long as is required by this Section
      6(a), of a legend on any of the Units, the Shares, the Warrants and the Warrant
      Shares in the following form:

     

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO SUCH EFFECT,
      THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. ADDITIONALLY,
      HEDGING TRANSACTIONS IN RESPECT OF THESE SECURITIES MUST BE EFFECTED IN
      ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IF
      APPLICABLE. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
      INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
      SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    (3) Certificates
      evidencing Shares, the Warrants and the Warrant Shares shall not contain any
      legend (including the legend set forth in Section 6(a)(2)): (i) following the
      resale of the Units or such Shares, Warrants and/or Warrant Shares pursuant
      to
      an effective registration statement under the Securities Act covering the resale
      of such Shares, or (ii) following any resale of the Units or such Shares,
      Warrants or Warrant Shares pursuant to Rule 144, or (iii) if the Units or such
      Shares, Warrants or Warrant Shares are eligible for resale under Rule 144(k),
      or
      (iv) if such legend is not required under applicable requirements of the
      Securities Act (including judicial interpretations and pronouncements issued
      by
      the Staff of the Commission. The Company agrees that following the time when
      a
      legend is no longer required under this Section 6(a)(3), it will, no later
      than
      five (5) Trading Days following the delivery by a Purchaser to the Company
      or
      the Company's transfer agent of a certificate representing Shares, Warrants
      or
      Warrant Shares issued with a restrictive legend (such date, the “Legend
      Removal Date”),
      deliver or cause to be delivered to such Purchaser or such Purchaser’s
      transferee, as applicable, a certificate representing such Shares, Warrants
      or
      Warrant Shares that is free from all restrictive and other legends. The Company
      may not make any notation on its records or give instructions to any transfer
      agent of the Company that enlarge the restrictions on transfer set forth in
      this
      Section. Notwithstanding anything to the contrary contained herein, the Company
      shall not be required to effect a removal of a restrictive legend to the extent
      such legend is required under applicable requirements of the Securities Act,
      including any rule of the Commission promulgated thereunder, and judicial
      interpretations thereof.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (4) Each
      of
      the Purchasers, agrees that the removal of the restrictive legend from
      certificates representing Shares, Warrants and Warrant Shares as set forth
      in
      this Section 6(a)(3)(i) or (ii) is predicated upon the Company’s reliance that
      such Purchaser will sell any Units, Shares, Warrants and Warrant Shares pursuant
      to either the registration requirements of the Securities Act, including any
      applicable prospectus delivery requirements, or an exemption therefrom.

     

    (b) Furnishing
      of Information.
      As long
      as any Purchaser owns any Units, Shares, Warrants or Warrant Shares, the Company
      covenants to timely file all reports required to be filed by the Company after
      the date hereof pursuant to the Exchange Act. If the Company is not required
      to
      file reports pursuant to the Exchange Act, it will prepare and furnish to such
      Purchaser and make publicly available in accordance with Rule 144(c) such
      information as is required for such Purchaser to sell the Units, Shares,
      Warrants and Warrant Shares under Rule 144. The Company further covenants that
      it will take such further action as the Purchasers may reasonably request,
      all
      to the extent required from time to time to enable the Purchasers to sell such
      Units, Shares, Warrants and Warrant Shares without registration under the
      Securities Act within the limitation of the exemptions provided by Rule
      144.

     

    (c) Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Shares, in a manner
      that would require the registration under the Securities Act of the sale of
      the
      Units, the Shares, the Warrants or the Warrant Shares to the Purchasers. The
      Company shall conduct its business in a manner so that it will not become
      subject to registration under the Investment Company Act.

     

    (d) Disclosure;
      Publicity.
      No
      Purchaser shall issue any press release or otherwise make any such public
      statement with respect to the transactions contemplated hereby without the
      prior
      consent of the Company, except if such disclosure is required by law, in which
      case such Purchaser shall promptly provide the Company with prior written notice
      of such public statement or communication. The Company shall not publicly
      disclose the name of any Purchaser, or include the name of such Purchaser in
      any
      filing with the Commission or any regulatory agency or Trading Market, without
      the prior written consent of such Purchaser, except (i) as required by federal
      securities law in connection with the registration statement contemplated by
      Section 6A of this Agreement and (ii) to the extent such disclosure is required
      by law or Trading Market regulations, in which case the Company shall provide
      such Purchaser with prior notice of such disclosure permitted under sub clause
      (i) or (ii).

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (e) Indemnification
      of Purchasers.
      Subject
      to the provisions of this Section 6(e), the Company will indemnify and hold
      each
      Purchaser and its respective directors, officers, shareholders, partners,
      members, employees and agents (each, a “Purchaser
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation that any such Purchaser Party may suffer or incur as a result
      of
      or relating to (i) any breach of any of the representations, warranties,
      covenants or agreements made by the Company in this Agreement or (ii) any action
      instituted against any Purchasers, Purchaser Party or their respective
      Affiliates, by any stockholder of the Company or other person who is not an
      Affiliate of any such Purchaser, with respect to any of the transactions
      contemplated by this Agreement (unless such action is based upon a breach of
      such Purchaser’s representation, warranties or covenants under this Agreement or
      any agreements or understandings such Purchaser may have with any such
      stockholder or any violations by such Purchaser of state or federal securities
      laws). If any action shall be brought against any Purchaser Party in respect
      of
      which indemnity may be sought pursuant to this Agreement, such Purchaser Party
      shall promptly notify the Company in writing, and the Company shall have the
      right to assume the defense thereof with counsel of its own choosing. Any
      Purchaser Party shall have the right to employ separate counsel in any such
      action and participate in the defense thereof, but the fees and expenses of
      such
      counsel shall be at the expense of such Purchaser Party except to the extent
      that (A) the employment thereof has been specifically authorized by the Company
      in writing; (B) the Company has failed after a reasonable period of time to
      assume such defense and to employ counsel reasonably acceptable to such
      Purchaser Party or (C) in such action there is, in the reasonable opinion of
      such separate counsel, a material conflict on any material issue between the
      position of the Company and the position of such Purchaser Party. The Company
      will not be liable to any Purchaser Party under this Agreement (I) for any
      settlement by a Purchaser Party effected without the Company’s prior written
      consent, which shall not be unreasonably withheld, conditioned or delayed;
      or
      (II) to the extent, but only to the extent that a loss, claim, damage or
      liability is attributable to any Purchaser Party’s breach of any of the
      representations, warranties, covenants or agreements made by such Purchaser
      in
      this Agreement..

     

    (f) Indemnification
      of Company.
      Subject
      to the provisions of this Section 6(f), each Purchaser, will indemnify and
      hold
      the Company and its directors, officers, shareholders, partners, members,
      employees and agents (each, a “Company
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation that any such Company Party may suffer or incur as a result of
      or
      relating to (i) any breach of any of the representations, warranties, covenants
      or agreements made by such Purchaser in this Agreement or (ii) any action
      instituted against the Company, or any Company Party or their respective
      Affiliates, by any stockholder of the Company or other person, with respect
      to
      any of the transactions contemplated by this Agreement if such action is based
      upon a breach of the representation, warranties or covenants of such Purchaser
      under this Agreement or any violation by such Purchaser of state or federal
      securities laws. If any action shall be brought against any Company Party in
      respect of which indemnity may be sought pursuant to this Agreement, such
      Company Party shall promptly notify the applicable Purchaser in writing, and
      such Purchaser shall have the right to assume the defense thereof with counsel
      of its own choosing. Any Company Party shall have the right to employ separate
      counsel in any such action and participate in the defense thereof, but the
      fees
      and expenses of such counsel shall be at the expense of such Company Party
      except to the extent that (A) the employment thereof has been specifically
      authorized by such Purchaser in writing; (B) such Purchaser has failed after
      a
      reasonable period of time to assume such defense and to employ counsel
      reasonably acceptable to such Company Party or (C) in such action there is,
      in
      the reasonable opinion of such separate counsel, a material conflict on any
      material issue between the position of such Purchaser and the position of such
      Company Party. No Purchaser will be liable to any Company Party under this
      Agreement (I) for any settlement by a Company Party effected without such
      Purchaser’s prior written consent, which shall not be unreasonably withheld,
      conditioned or delayed; or (II) to the extent, but only to the extent that
      a
      loss, claim, damage or liability is attributable to any Company Party’s breach
      of any of the representations, warranties, covenants or agreements made by
      the
      Company in this Agreement.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    7. Definitions.
      In
      addition to the terms defined elsewhere in this Agreement: the following terms
      have the meanings indicated in this Section 7:

     

    (a) “Affiliate”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144 under the Securities Act. With
      respect to each Purchaser, any investment fund or managed account that is
      managed on a discretionary basis by the same investment manager as such
      Purchaser will be deemed to be an Affiliate of such Purchaser.

     

    (b) “Business
      Day”
means
      any day except Saturday, Sunday and any day which shall be a Federal holiday
      or
      a day on which banking institutions in the State of New York are authorized
      or
      required by law or other governmental action to close.

     

    (c) “Closing
      Date”
means
      June 6, 2007 or such later Trading Day when this Agreement and the Warrants
      have
      been executed and delivered by the applicable parties thereto, and all
      conditions precedent to (i) the Purchasers respective obligations to pay their
      respective Subscription Amounts have been satisfied or waived and (ii) the
      Company’s obligations to deliver the Units have been satisfied or
      waived.

     

    (d) “Commission”
means
      the Securities and Exchange Commission..

     

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

     

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

     

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

     

    (h) “Registration
      Rights Agreement”
shall
      mean that certain Registration Rights Agreement dated as of June 4, 2007 by
      and among the Company and certain of the Purchasers who are parties
      thereto.

     

    (i) “Registrable
      Securities”
shall
      have the meaning set forth in the Registration Rights Agreement.

     

    (j) “Subscription
      Amount”
shall
      mean, with respect to each Purchaser, the amount set forth next to such
      Purchaser’s name on Exhibit
      A
      hereto.

     

    (k) “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the American Stock Exchange, the New York
      Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market,
      the
      Nasdaq Capital Market or the OTC Bulletin Board.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    8. Successors
      and Assigns.
      Each of
      the Purchasers hereby acknowledges and agrees that this Agreement shall be
      binding upon and inure to the benefit of the parties and their heirs, executors,
      administrators, successors, legal representatives and permitted assigns.

     

    9. Modification.
      This
      Agreement shall not be modified or waived except by an instrument in writing
      signed by the party against whom any such modification or waiver is
      sought.

     

    10. Notices.
      Any
      notice or other communication required or permitted to be given hereunder shall
      be in writing and shall be mailed by certified mail, return receipt requested,
      sent by nationwide overnight courier or delivered against receipt to the party
      to whom it is to be given (a) if to Company, at the address set forth above,
      or
      (b) if to any of the Purchasers, at the respective addresses set forth on the
      signature page hereof (or, in either case, to such other address as the party
      shall have furnished in writing in accordance with the provisions of this
      Section). Any notice or other communication given by certified mail shall be
      deemed given at the time that it is signed for by the recipient except for
      a
      notice changing a party's address which shall be deemed given at the time of
      receipt thereof. Any notice or other communication given by nationwide overnight
      courier shall be deemed given the next business day following being deposited
      with such courier.

     

    11. Assignability.
      Except
      as otherwise provided in this Agreement, this Agreement and the rights,
      interests and obligations hereunder are not transferable or assignable by any
      Purchaser. This Agreement and the rights, interests and obligations hereunder
      are not transferable or assignable by the Company.

     

    12. Applicable
      Law. All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement and the Warrants 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, except to the extent
      that
      the application of the General Corporation Law of the State of Delaware is
      mandatory applicable. Each party hereby irrevocably submits to the exclusive
      jurisdiction of the state and federal courts sitting in the City of New York,
      borough of Manhattan for the adjudication of any dispute hereunder or in
      connection herewith or with any transaction contemplated hereby or discussed
      herein (including with respect to the enforcement of this Agreement and the
      Warrants), and hereby irrevocably waives, and agrees not to assert in any suit,
      action or Proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or Proceeding is improper
      or inconvenient venue for such Proceeding. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or Proceeding by mailing a copy thereof via registered or certified
      mail or overnight delivery (with evidence of delivery) to such party at the
      address in effect for notices to it under this Agreement and agrees that such
      service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. The parties hereby waive to
      the
      fullest extent permitted by applicable law, all rights to a trial by jury in
      any
      legal proceeding arising out of or relating to this Agreement or the
      transactions contemplated hereby. If either party shall commence an action
      or
      Proceeding to enforce any provisions of this Agreement and/or the Warrants,
      then
      the prevailing party in such action or Proceeding shall be reimbursed by the
      other party for its attorneys’ fees and other costs and expenses incurred with
      the investigation, preparation and prosecution of such action or
      Proceeding.

     

    13. Use
      of Pronouns.
      All
      pronouns and any variations thereof used herein shall be deemed to refer to
      the
      masculine, feminine, neuter, singular or plural as the identity of the person
      or
      persons referred to may require.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    14. Miscellaneous.

     

    (a) This
      Agreement and its exhibits and schedules constitutes the entire agreement
      between the Purchasers and the Company with respect to the subject matter hereof
      and supersedes all prior oral or written agreements and understandings, if
      any,
      relating to the subject matter hereof. The terms and provisions of this
      Agreement may be waived, or consent for the departure therefrom granted, only
      by
      a written document executed by the party entitled to the benefits of such terms
      or provisions. 

     

    (b) The
      respective covenants, agreements, representations and warranties made in this
      Agreement by each of the Purchasers and the Company shall survive the execution
      and delivery hereof and delivery of the Units, the Shares, the Warrants and
      the
      Warrant Shares.

     

    (c) At
      the
      Closing, the Company shall reimburse Nordic up to $25,000 for its actual,
      out-of-pocket legal fees and expenses related to the transactions contemplated
      by this Agreement. At the Closing, the Company shall reimburse BVF Partners,
      L.P. up to $12,000 for its actual out-of-pocket legal fees and expenses related
      to the transactions contemplated by this Agreement. Except as expressly set
      forth in this Agreement to the contrary, each of the parties hereto shall pay
      its own fees and expenses (including the fees of any attorneys, accountants,
      appraisers or others engaged by such party) in connection with this Agreement
      and the transactions contemplated hereby whether or not the transactions
      contemplated hereby are consummated. The Company shall pay all transfer agent
      fees, stamp taxes and other taxes and duties levied in connection with the
      delivery of any Units, Shares, Warrants or Warrant Shares.

     

    (d) This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which shall together constitute one and the
      same
      instrument.

     

    (e) Each
      provision of this Agreement shall be considered separable and, if for any reason
      any provision or provisions hereof are determined to be invalid or contrary
      to
      applicable law, such invalidity or illegality shall not impair the operation
      of
      or affect the remaining portions of this Agreement.

     

    (f) Section
      titles are for descriptive purposes only and shall not control or alter the
      meaning of this Agreement as set forth in the text.

     

    (g) The
      Company acknowledges that the obligations of each Purchaser under this Agreement
      are several and not joint with the obligations of any other Purchaser, and
      no
      Purchaser shall be responsible in any way for the performance of the obligations
      of any other Purchaser under this Agreement. The decision of each Purchaser
      to
      enter into this Agreement has been made by such Purchaser independently of
      any
      other Purchaser. The Company further acknowledges that nothing contained in
      this
      Agreement, and no action taken by any Purchaser pursuant hereto, shall be deemed
      to constitute the Purchasers as a partnership, an association, a joint venture
      of any other kind of entity, or create a presumption that the Purchasers are
      in
      any way acting in concert or as a group with respect to such obligations or
      the
      transactions contemplated hereby. Each Purchaser 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 Purchaser to be joined as an additional party in any proceeding for such
      purpose. Each Purchaser 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
      Purchasers 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 Purchasers. The
      Company acknowledges that such procedure with respect to this Agreement in
      no
      way creates a presumption that the Purchasers are in any way acting in concert
      or as a group with respect to this Agreement or the transactions contemplated
      hereby or thereby.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	
              OSTEOLOGIX,
                INC.

            	 	 
	 	 	 
	
              By: 

              
                

              

              Name:
                Philip Young

              Title:
                Chief Executive Officer

            	 	 
	 	 	 
	 	 	 
	
              PURCHASERS:

            	 	
              ADDRESS
                FOR NOTICE

            
	 	 	 
	 	 	 
	
              NORDIC
                BIOTECH K/S 

            	 	
              c/o
                Nordic Biotech Advisors

            
	 	 	
              Ostergade
                5, 3rd Floor

            
	
              By: 

              
                

              

              Name:

              
                Title:

              

            	 	
              DK-1100
                Copenhagen K

              
                Denmark

              

            
	 	 	 
	 	 	 
	
              BIOTECHNOLOGY
                VALUE FUND, L.P.

            	 	
              One
                Sansome Street, 39th
                Floor

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

              By:
                BVF, Inc., its general partner

            	 	
              San
                Francisco, CA 94104

            
	 	 	
              Attention:
                Matthew Perry

            
	
              By:     

            	 	 
	
              
                

              

              Mark
                N. Lampert

            	 	 
	
              President

            	 	 
	 	 	
              With
                a copy to:

            
	 	 	 
	
              BIOTECHNOLOGY
                VALUE FUND II, L.P.

            	 	
              Jonathan
                D. Joseph, Esq.

            
	
              By:
                BVF Partners L.P., general partner

            	 	
              3629
                25th
                Street

            
	
              By:
                BVF, Inc., general partner

            	 	
              San
                Francisco, CA 94110

            
	 	 	 
	
              By:     

            	 	 
	
              
                

              

              Mark
                N. Lampert

            	 	 
	
              President

            	 	 
	 	 	 
	 	 	 
	
              BVF
                INVESTMENTS, L.L.C.

            	 	 
	
              By:
                BVF Partners L.P., its manager

            	 	 
	
              By:
                BVF, Inc., its general partner

            	 	 
	 	 	 
	
              By:     

            	 	 
	
              
                

              

              Mark
                N. Lampert

            	 	 
	
              President

            	 	 

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
              INVESTMENT
                10, L.L.C.

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

            	 	 
	
              By:
                BVF, Inc., its general partner

            	 	 
	 	 	 
	
              By:     

            	 	 
	
              
                

              

              Mark
                N. Lampert

            	 	 
	
              President

            	 	 
	 	 	 
	 	 	 
	
              Goldman
                Sachs
                Intl

            	 	 
	 	 	 
	
              By:

            	 	 
	
              
                

              

              Name:

            	 	 
	
              Title:

            	 	 

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    Investor
      Certification

    

    NAME
      OF INVESTOR: ___________________________

    

    Initial
      or Check the appropriate item(s)

     

    US
      INVESTORS - The undersigned further represents and warrants as indicated below
      by the undersigned’s initials:

     

    
      	A.	
              Individual
                investors:
                (Please initial one or more of the following
                statements)

            

    

     

    
      	1.____	
              I
                certify that I am an accredited investor because I have had individual
                income (exclusive of any income earned by my spouse) of more than
                $200,000
                in each of the most recent two years and I reasonably expect to have
                an
                individual income in excess of $200,000 for the current
                year.

            

    

     

    
      	2.____	
              I
                certify that I am an accredited investor because I have had joint
                income
                with my spouse in excess of $300,000 in each of the most recent two
                years
                and reasonably expect to have joint income with my spouse in excess
                of
                $300,000 for the current year.

            

    

     

    
      	3.____	
              I
                certify that I am an accredited investor because I have an individual
                net
                worth, or my spouse and I have a joint net worth, in excess of
                $1,000,000.

            

    

     

    
      	4.____	
              I
                am a director or executive officer of Osteologix,
                Inc.

            

    

     

    
      	5.____	
              I
                have individual net worth or my spouse and I have joint net worth
                of over
                $5,000,000.

            

    

     

    
      	
              B.____

            	
              Partnerships,
                corporations, trusts or other entities:
                (Please initial one of the following seven statements). The undersigned
                hereby certifies that it is an accredited investor because it
                is:

            

    

     

    
      	
              1.____

            	
              an
                employee benefit plan whose total assets exceed
                $5,000,000;

            

    

     

    
      	
              2.____

            	
              an
                employee benefit plan whose investments decisions are made by a plan
                fiduciary which is either a bank, savings and loan association or
                an
                insurance company (as defined in Section 3(a) of the Securities Act)
                or an
                investment adviser registered as such under the Investment Advisers
                Act of
                1940;

            

    

     

    
      	
              3.____

            	
              a
                self-directed employee benefit plan, including an Individual Retirement
                Account, with investment decisions made solely by persons that are
                accredited investors;

            

    

     

    
      	
              4.____

            	
              an
                organization described in Section 501(c)(3) of the Internal Revenue
                Code
                of 1986, as amended, not formed for the specific purpose of acquiring
                the
                Units, with total assets in excess of
                $5,000,000;

            

    

     

    
      	
              5.____

            	
              a
                corporation, partnership, limited liability company, limited liability
                partnership, other entity or similar business trust, not formed for
                the
                specific purpose of acquiring the Units, with total assets excess
                of
                $5,000,000;

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
              6.____

            	
              a
                trust, not formed for the specific purpose of acquiring the Units,
                with
                total assets exceed $5,000,000, whose purchase is directed by a person
                who
                has such knowledge and experience in financial and business matters
                that
                he is capable of evaluating the merits and risks of an investment
                in the
                Units; or

            

    

     

    
      	
              7.____

            	
              an
                entity (including a revocable grantor trust but other than a conventional
                trust) in which each of the equity owners qualifies as an accredited
                investor.

            

    

     

    NON-US
      INVESTORS - The undersigned further represents and warrants as indicated below
      by the undersigned’s initials:
      

     

    
      	A.	
              Please
                initial the following statement:

            

    

     

    
      	1.____	
              I
                certify that I am not a “U.S. person” (as defined in Regulation S) or
                purchasing for the account or benefit of a “U.S. person” and am purchasing
                Units in an “offshore transaction” in accordance with Regulation S and am
                a “qualified investor” as defined in the European Union Prospectus
                Directive.

            

    

     

    
      
        
        

      

      
        22

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