Common use of Capitalization; Voting Rights Clause in Contracts

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the Closing after giving effect to the Restated Certificate of Incorporation, will consist of [98,530,700] shares of Series A Common Stock, par value $0.001 per share (the “Series A Common Stock,” and together with the Series B Common Stock, the “Common Stock”), none of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”) and [74,942,226] shares of Preferred Stock, par value $0.001 per share, 8,904,567 of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which are issued and outstanding (collectively, the “Preferred Stock”). All issued and outstanding shares of the Company’s capital stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessable, and (c) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of Exceptions, (i) no subscriptions, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) any shares of capital stock of the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of Incorporation, the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser); provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the Closing after giving effect to the Restated Certificate of IncorporationClosing, will consist of [98,530,700] 25,000,000 shares of Common Stock, (par value $0.01) per share and 4,000,000 shares of Preferred Stock, (par value $0.01), of which 600,000 are designated Series A Cumulative Convertible Preferred Stock ("Series A Preferred Stock"); 1,700,000 are designated Series B Cumulative Convertible Preferred Stock ("Series B Preferred Stock"); and 1,225,000 are designated Series C Cumulative Convertible Preferred Stock ("Series C Preferred Stock") and 500,000 shares of Series A D Cumulative Convertible Preferred Stock. Immediately prior to the effective date of this Agreement, 5,460,449 shares of Common Stock, par value $0.001 per share (the “0 shares Series A Common Stock,” and together with the Series B Common Stock, the “Common Stock”Preferred Stock (subscribed for 600,000 shares), none of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of 407,900 shares of Series B Preferred Stock, 371,438 shares of Series C Preferred Stock and 244,898 shares of Series D Preferred Stock will be issued and outstanding. Of the authorized shares of Common Stock, [98,530,700] (i) 1.4 million shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the 1998-A Incentive Stock Option and Non-Statutory Option Plan (the "1998 A-Plan") and 1.5 million shares are reserved for issuance to employees pursuant to the Company’s 1998 's 1998-B Incentive Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Non-Statutory Plan (collectivelythe "1998-B Plan"), (ii) 600,000 shares are reserved for issuance upon the “Stock Incentive Plans”exercise of certain warrants, (iii) and [74,942,226] 600,000 shares are reserved for issuance upon the conversion of Preferred Stock, par value $0.001 per share, 8,904,567 of which are designated the Series A Preferred Stock, all (iv) 1,785,000 shares are reserved for issuance upon the conversion of which are issued and outstanding, 7,419,355 of which are designated the Series B Preferred Stock, all and (v) 1,650,000 shares are reserved for issuance upon conversion of which are issued and outstanding, 6,401,523 of which are designated the Series C Preferred Stock, all . The Company has reserved 1,500,000 shares of which are issued and outstanding, 12,618,296 its Common Stock for issuance upon conversion of which are designated as the Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which are issued and outstanding (collectively, the “Preferred Stock”). All issued and outstanding shares of the Company’s capital stock 's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessablenonassessable, and (c) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities lawslaws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of IncorporationDesignation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share the basis described in the Reports (as defined below), subject to adjustment as provided in the respective Certificate of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basisDesignation. The Conversion Shares have been duly and validly reserved for issuance. (a) . Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in this Section 3.3 or in the Schedule of ExceptionsCompany's annual, quarterly and 8-K reports, filed with the Securities and Exchange Commission (i) "Reports"), there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or shareholder agreements, or agreements of any shares of capital stock of kind for the purchase or acquisition from the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchasersecurities. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationDesignation, and upon payment of the Purchase Price the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or in the Registration Rights Agreement or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the Closing after giving effect to and the Restated Certificate consummation of Incorporationthe transactions contemplated hereby and by the Exchange Agreement, will consist of [98,530,700] (i) 50,000,000 shares of Series A Common Stock, par value $0.001 .001 per share (the “Series A Common Stock,” and together with the Series B Common Stockshare, the “Common Stock”), none 15,904,829 shares of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] 1,987,729 shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 's Stock Option Plans, as amended and restated (the "Option Plan"), 2002 Stock Incentive Plan3,747,760 shares of which are reserved for issuance upon exercise of the Initial Warrants and other warrants of the Company, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”ii) and [74,942,226] 2,000,000 shares of Preferred Stock, par value $0.001 .001 per share, 8,904,567 400 of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 225 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I B Preferred Stock, none of which are issued and outstanding (collectivelyoutstanding, the “500,000 of which are designated Series C Preferred Stock”, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. The authorized capital stock of the Company immediately after the Closing and the consummation of the transactions contemplated by the Exchange Agreement, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 shares of which are issued and outstanding, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 20,084,846 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 65,000 of which are designated Series F Preferred Stock, 36,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be issued at any time. All issued and outstanding shares of the Company’s 's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessablenonassessable, and (c) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities lawslaws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of IncorporationDesignation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] 22,072,575 shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Option Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, Warrants and other warrants and except as provided in may be granted pursuant to the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsRelated Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or stockholder agreements, or agreements of any shares of capital stock of kind for the purchase or acquisition from the Company are authorized or outstandingof any of its securities. Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, (ii) the Company has is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no obligation (contingent agreement or otherwise) understanding between any persons and/or entities, which affects or relates to issue the voting or giving of written consents with respect to any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets by a director of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement, the Exchange Agreement and the Restated Certificate of IncorporationDesignation, the Shares and the Conversion Exchange Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)any restrictions on transfer; provided, however, that the Shares and the Conversion Exchange Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposedlaws. The sale consummation of the Shares transactions contemplated by this Agreement and the subsequent conversion Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Shares into Conversion Shares are not Company is listed on Schedule 5.2 hereto, and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closingeach such subsidiary is wholly-owned.

Capitalization; Voting Rights. (1i) The authorized capital stock of the CompanyParent, immediately prior to as of the Closing after giving effect to the Restated Certificate date hereof consists of Incorporation425,000,000 shares, will consist of [98,530,700] which (i) 300,000,000 are shares of Series A Common Stock, par value $0.001 per share (the “Series A Common Stock,” and together with the Series B Common Stock, the “Common Stock”), none of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”) and [74,942,226] shares of Preferred Stock, par value $0.001 per share, 8,904,567 of which are designated Series A Preferred Stock, all 10,865,645 shares of which are issued and outstanding, 7,419,355 (ii) 10,000,000 are shares of Series A preferred stock, par value $1.00 per share of which are designated 6,183,000 shares of Series B Preferred Stock, all of which A preferred stock are issued and outstanding, 6,401,523 (iii) 30,000,000 are shares of Series B preferred stock, par value $1.00 per share of which are designated 8,074,263 shares of Series C Preferred Stock, all of which B preferred stock are issued and outstanding, 12,618,296 (iv) 10,000,000 are shares of Series C preferred stock, par value $1.00 per share of which are designated as 7,500,000 shares of Series D Preferred Stock, all of which C preferred stock are issued and outstanding, 20,500,000 (v) 15,000,000 are shares of Series D preferred stock, par value $1.00 per share of which are designated as 9,728,201 shares of Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which D preferred stock are issued and outstanding, and 681,819 (vi) 60,000,000 are shares of Series E preferred stock, par value $1.00 per share of which are designated as 32,054,606 shares of Series I Preferred Stock, none of which E preferred stock are issued and outstanding (collectivelyoutstanding. The authorized, the “Preferred Stock”). All issued and outstanding shares of the Company’s capital stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessable, and (c) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate each Subsidiary of Incorporation. Each series of Preferred Stock each Company is convertible into Series B Common Stock set forth on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuanceSchedule 12(c). (aii) Other than Except as disclosed on Schedule 12(c), other than: (i) the [16,006,519] shares of Series B Common Stock reserved for issuance under the CompanyParent’s Stock Incentive Plans, the [98,530,700] stock option plans; and (ii) shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation which may be issued pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsAncillary Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Parent of any of its securities. Except as disclosed on Schedule 12(c), neither the offer or issuance of any of the Notes or the Warrants, or the issuance of any of the Note Shares or the Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Parent outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (iii) any All issued and outstanding shares of capital stock of the Company Parent’s Common Stock: (i) have been duly authorized and validly issued and are authorized or outstanding, fully paid and nonassessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights issuance of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividendsecurities. (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciationThe rights, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreementpreferences, the Investors’ Rights Agreement, the Fourth Amended privileges and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders restrictions of the Company shares of the Common Stock are as stated in the Parent’s Certificate of Incorporation (the “Voting AgreementCharter”) or in ). The Note Shares and the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company Warrant Shares have been duly and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationParent’s Charter, the Shares and the Conversion Shares Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; provided, however, that the Shares and the Conversion Shares Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company----------------------------- Company consists of 50,000,000 shares, immediately prior to the Closing after giving effect to the Restated Certificate of Incorporation, will consist of [98,530,700] such shares being designated as follows: (i) 48,000,000 shares of Series A Common Stockcommon stock, par value $0.001 .01 per share (the “Series A "Common Stock,” and together with the Series B Common Stock, the “Common Stock”), none ") of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which (a) 16,405,548 are issued and outstanding and [16,006,519] (b) (1) 3,323,700 shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 's 1997 Equity Compensation Plan adopted by the Company on May 21, 1997, the Company's 1988 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 the Company's Stock Incentive Option Plan for Directors (collectively, the “"Stock Incentive Option Plans”") and [74,942,226] (2) 3,000,000 shares are reserved for issuance pursuant to the Asset Purchase Agreement, dated February 13, 2001 by and among the Company, Axial Technology Holding AG and Wyzdom Solutions, Inc. (the "Asset Purchase Agreement"); (ii) 2,000,000 shares of preferred stock, par value $.01 per share, consisting of 500,000 shares of Series A Convertible Preferred Stock, par value $0.001 .10 per share, 8,904,567 of which are designated Series A Preferred Stock, all of which no shares are issued and outstanding, 7,419,355 200,000 shares of which are designated Series B Convertible Preferred Stock, all par value $.01 per share, of which no shares are issued and outstanding, 6,401,523 250,000 shares of which are designated Series C Convertible Preferred Stock, all par value $.01 per share, of which no shares are issued and outstanding, 12,618,296 9,500 shares of which are designated as Series D Convertible Preferred Stock, all par value $.01 per share, of which no shares are issued and outstanding, 20,500,000 1,800 shares of which are designated as Series E Redeemable Preferred Stock, 19,633,531 par value $.01 per share, of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which no shares are issued and outstanding, and 681,819 3,000 shares of which are designated as Series I F Convertible Preferred Stock, none par value $.01 per share (the "Series F Preferred Stock"), of which are 3,000 shares will be upon consummation of the transactions contemplated hereby issued and outstanding (collectivelyoutstanding. The Shares have been duly authorized, and upon consummation of the “Preferred Stock”)Conversion, will be fully paid and non-assessable and issued in compliance with all applicable state and federal laws concerning the issuance of securities. All issued and outstanding shares of the Company’s capital stock Common Stock and the Shares (ai) have been duly authorized and validly issued, (bii) are fully paid and non-assessable, nonassessable and (ciii) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities lawslaws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate Designations, which was accepted for filing by the Pennsylvania Department of IncorporationState prior to the date hereof. Each series The shares of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share issuable upon conversion of Series B Common Stock is convertible into a share the Shares pursuant to the terms of Series A Common Stock on a one-for-one basis. The the Designations (the "Conversion Shares Shares") have been duly and validly reserved for issuance. (a) . Other than the [16,006,519] 3,323,700 shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] Option Plans and 3,000,000 shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stockto be issued pursuant to the Asset Purchase Agreement, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of Exceptions, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or shareholder agreements, or agreements of any shares of capital stock of kind for the purchase or acquisition from the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock securities. The Shares are free of any evidences of indebtedness liens or assets of encumbrances; provided, however, that the Company, and (iii) the Company has no obligation (contingent or otherwise) Shares may be subject to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaserrestrictions on transfer under state and/or federal securities laws. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationDesignations, the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closinglaws.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the Closing after giving effect to the Restated Certificate of IncorporationClosing, will consist of [98,530,700] 25,000,000 shares of Common Stock, (par value $0.01) per share and 3,525,000 shares of Preferred Stock, (par value $0.01), of which 600,000 are designated Series A Cumulative Convertible Preferred Stock ("Series A Preferred Stock"); 1,700,000 are designated Series B Cumulative Convertible Preferred Stock ("Series B Preferred Stock"); and 1,225,000 are designated Series C Cumulative Convertible Preferred Stock ("Series C Preferred Stock") and 800,000 shares of Series A D Cumulative Convertible Preferred Stock. Immediately prior to the effective date of this Agreement, 5,460,449 shares of Common Stock, par value $0.001 per share (the “0 shares Series A Common Stock,” and together with the Series B Common Stock, the “Common Stock”Preferred Stock (subscribed for 600,000 shares), none of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of 407,900 shares of Series B Preferred Stock, 371,438 shares of Series C Preferred Stock and 163,268 shares of Series D Preferred Stock will be issued and outstanding. Of the authorized shares of Common Stock, [98,530,700] (i) 1.4 million shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the 1998-A Incentive Stock Option and Non-Statutory Option Plan (the "1998 A-Plan") and 1.5 million shares are reserved for issuance to employees pursuant to the Company’s 1998 's 1998-B Incentive Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Non-Statutory Plan (collectivelythe "1998-B Plan"), (ii) 600,000 shares are reserved for issuance upon the “Stock Incentive Plans”exercise of certain warrants, (iii) and [74,942,226] 600,000 shares are reserved for issuance upon the conversion of Preferred Stock, par value $0.001 per share, 8,904,567 of which are designated the Series A Preferred Stock, all (iv) 1,785,000 shares are reserved for issuance upon the conversion of which are issued and outstanding, 7,419,355 of which are designated the Series B Preferred Stock, all and (v) 1,650,000 shares are reserved for issuance upon conversion of which are issued and outstanding, 6,401,523 of which are designated the Series C Preferred Stock, all . The Company has reserved 1,500,000 shares of which are issued and outstanding, 12,618,296 its Common Stock for issuance upon conversion of which are designated as the Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which are issued and outstanding (collectively, the “Preferred Stock”). All issued and outstanding shares of the Company’s capital stock 's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessablenonassessable, and (c) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities lawslaws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of IncorporationDesignation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share the basis described in the Reports (as defined below), subject to adjustment as provided in the respective Certificate of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basisDesignation. The Conversion Shares have been duly and validly reserved for issuance. (a) . Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in this Section 3.3 or in the Schedule of ExceptionsCompany's annual, quarterly and 8-K reports, filed with the Securities and Exchange Commission (i) "Reports"), there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or shareholder agreements, or agreements of any shares of capital stock of kind for the purchase or acquisition from the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchasersecurities. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationDesignation, and upon payment of the Purchase Price the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or in the Registration Rights Agreement or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the Closing after giving effect to the Restated Certificate of IncorporationFirst Closing, will consist of [98,530,700] of: (i) forty-five million (45,000,000) shares of Series A Common Stock, par value $0.001 per share (the “Series A Common Stock,” and together with the Series B Common Stock, the “Common Stock”), none A) seven million two hundred five thousand (7,205,000) shares of which are issued and outstanding, and [98,530,700] (B) one million nine hundred thousand (1,900,000) shares of which are reserved for future issuance upon conversion to employees, officers or directors of, or consultants or advisors to, the Company (including members of shares the Company's Scientific Advisory Board) or any subsidiary, pursuant to stock purchase or stock option plans or other arrangements that are approved by the Board of Series B Common StockDirectors of the Company, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are shares one million one hundred seventy thousand (1,170,000) shares have been issued and are outstanding and [16,006,519] are reflected as such in clause (i)(A) of this Section 3.2, (C) twelve million one hundred ninety thousand three hundred seventy-five (12,190,375) shares of which are reserved for future issuance upon conversion into Common Stock of outstanding shares, or shares that the Company is obligated to employees issue pursuant to any rights or agreements outstanding as of the Company’s 1998 date hereof, of Series A Preferred Stock, par value US$0.001 per share (the "Series A Preferred Stock"), and (D) one million one hundred thirty-seven thousand eight hundred fourteen (1,137,814) shares of which are reserved for issuance upon conversion of Series A Preferred Stock Option Plan, 2002 issuable upon exercise of the outstanding warrants for Series A Preferred Stock Incentive Plan, 2002 California Stock Incentive Plan (the "Series A Preferred Warrants"); and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”ii) and [74,942,226] thirty million (30,000,000) shares of Preferred Stock, par value $0.001 per share, 8,904,567 (A) thirteen million four hundred thousand (13,400,000) shares of which are designated Series A Preferred Stock, all eleven million eight hundred ninety thousand three hundred seventy-five (11,890,375) shares of which are issued and outstanding, 7,419,355 and one million one hundred thirty-seven thousand eight hundred fourteen (1,137,814) shares of which are reserved for issuance upon exercise of the Series A Preferred Warrants and three hundred thousand (300,000) shares of which are reserved for issuance pursuant to that certain Settlement Agreement by and between the Company and Beth Xxxael Deaconess Medical Center, Inc. dated as of December 31, 1997, (B) five million (5,000,000) shares of which are designated Series B Preferred Stock, all par value US$0.001 per share (the "Series B Preferred Stock"), none of which are is issued and outstanding, 6,401,523 and (C) four million five hundred eighty-three thousand three hundred thirty-four (4,583,334) shares of which are designated Series C Preferred Stock, all none of which are is issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which are issued and outstanding (collectively, the “Preferred Stock”). All issued and outstanding shares of the Company’s capital stock 's Common Stock and Series A Preferred Stock (ax) have been duly authorized and validly issuedissued to the persons listed on Exhibit F, (by) are fully paid and non-assessable, and (c) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of Exceptions, (i) no subscriptions, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) any shares of capital stock of the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of Incorporation, the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser); provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.z) were issued in

Capitalization; Voting Rights. (1a) The authorized capital stock of the Company, immediately prior to as of the Closing after giving effect to the Restated Certificate date hereof consists of Incorporation, will consist of [98,530,700] (i) 70,000,000 shares of Series A Common Stockcommon stock, par value $0.001 per share (the “Series A Common Stock,” and together with the Series B Common Stock, the “Company Common Stock”), none 100 shares of which are issued and outstanding, and [98,530,700] (ii) 30,000,000 shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”) and [74,942,226] shares of Preferred Stockpreferred stock, par value $0.001 per shareshare (“Company Preferred Stock”), 8,904,567 of which 10,948,906 shares are designated as Series A Preferred Stock, all of which no shares are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued outstanding and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which 7,692,308 are designated as Series D B Preferred Stock, all Stock of which no shares are issues and outstanding. The Company has no warrants to purchase any of its capital stock issued and outstanding. The authorized, 20,500,000 issued and outstanding capital stock of which are designated as Series E Preferred Patients consists of (i) 125,000,000 shares of Common Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 55,884,347 shares of which are issued and outstanding, and 681,819 (ii) 5,000,000 shares of which are designated as Series I preferred stock, par value $0.001 per share (“Preferred Stock”), none no shares of which are issued and outstanding. In addition, Patients has warrants outstanding (collectivelyto purchase 1,902,174 shares of Common Stock. The authorized, the “Preferred Stock”). All issued and outstanding shares capital stock of each Subsidiary of Patients (other than the Company’s capital stock , which is set forth in this clause (a)) have been duly authorized and validly issued, is set forth on Schedule 4.3. (b) are fully paid and non-assessableExcept as disclosed on Schedule 4.3, and other than: (ci) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under Patients’ or the Company’s Stock Incentive Plans, the [98,530,700] stock option plans; and (ii) shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation which may be granted pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsRelated Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from either Patients or the Company of any of its securities. Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of the Note or the Warrant, or the issuance of any of the Closing Shares, Note Shares or Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of Patients outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (c) any All issued and outstanding shares of capital stock of the (i) Company are authorized or outstanding, Common Stock and (ii) Patients’ Common Stock: (A) have been duly authorized and validly issued and are fully paid and nonassessable; and (B) were issued in compliance with all applicable state and federal laws concerning the Company has no obligation issuance of securities. (contingent or otherwised) to issue any subscriptionThe rights, warrantpreferences, option, convertible security or other such right (including conversion or preemptive rights privileges and rights restrictions of first refusal) or to issue or distribute to holders of any the shares of its capital stock any evidences of indebtedness or assets of Company Common Stock and Company Preferred Stock are as stated in the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth ’s Amended and Restated Voting AgreementCertificate of Incorporation . (e) The rights, dated as of September 12preferences, 2008, by privileges and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders restrictions of the Company shares of the Common Stock and Preferred Stock are as stated in Patients’ Amended and Restated Certificate of Incorporation (the “Voting AgreementCharter”) or in the Schedule of Exceptions). The Closing Shares, there are no agreements or proxies, written or oral, between the Company Note Shares and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) Warrant Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationPatients’ Charter, the Shares and the Conversion Shares Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; provided, however, that the Shares and the Conversion Shares Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1i) The authorized capital stock of PBT as of the Company, immediately prior to the Closing after giving effect to the Restated Certificate date hereof consists of Incorporation, will consist of [98,530,700] (A) 800,000,000 shares of Series A Common Stock, par value $0.001 0.0001 per share (the “Series A Common Stock,” and together with the Series B Common Stock, the “Common Stock”), none of which are issued and outstandingshare, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”B) and [74,942,226] 2,300,000,000 shares of Preferred Stock, par value $0.001 0.00001 per share, 8,904,567 1,900,000,000 of which are have been designated Series A Class 1 Preferred Stock, all 150,000,000 of which are issued and outstanding, 7,419,355 of which are have been designated Series B Preferred Stock, all 30,000,000 of which have been designated Series B-1 Preferred Stock, 40,000 of which have been designated Series C-1 Preferred Stock, 200,000 of which have been designated Series C-2 Preferred Stock, 200,000 of which have been designated Series C-3 Preferred Stock and 75,000,000 of which have been designated Series C Preferred Stock. (ii) As of the date hereof, (A) 87,604,222 shares of PBT Common Stock are issued and outstanding and 36,646,712 shares of Common Stock are reserved for issuance upon the exercise of outstanding warrants, (B) 720,123,330 shares of Class 1 Preferred Stock are issued and outstanding and 2,000,000 shares of Class 1 Preferred Stock are reserved for issuance upon the exercise of warrants, (C) 88,289,660 shares of Series B Preferred Stock are issued and outstanding and 7,563,759 shares of Series B Preferred Stock are reserved for issuance upon the exercise of outstanding warrants, (D) no shares of Series B-1 Preferred Stock are issued and outstanding, 6,401,523 (E) 30,920,266 shares of which are designated Series C Preferred Stock, all of which stock are issued and outstanding, 12,618,296 (F) no shares of which are designated as Series D C-1 Preferred Stock, all of which Stock are issued and outstanding, 20,500,000 (G) no shares of which Series C-2 Preferred Stock are designated as issued and outstanding and (G) 7,000 shares of Series E C-3 Preferred Stock, 19,633,531 of which Stock are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which are issued and outstanding (collectively, the “Preferred Stock”). All issued and outstanding shares of the Company’s capital stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessable, and (c) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (aiii) Section 4(c) of the PBT Disclosure Schedule sets forth, as of immediately prior to the Initial Closing, under PBT’s 2003 Equity Incentive Plan (the “PBT Plan”), (i) the number of shares of PBT Common Stock that have been issued and are currently outstanding pursuant to restricted stock purchase agreements and/or the exercise of options, (ii) the number of shares of Class 1 Preferred that have been issued and are currently outstanding pursuant to restricted stock purchase agreements and/or the exercise of options, (iii) the number of options to purchase shares of PBT Common Stock and Class 1 Preferred that have been granted and are currently outstanding and (iv) the number of shares of PBT Common Stock and Class 1 Preferred that remain available for future issuance to officers, directors, employees and consultants of PBT. PBT has not made any representations regarding equity incentives to any officer, employee, director or consultant that are inconsistent with the share amounts and terms set forth in PBT’s board minutes. (iv) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common StockPBT Plan, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of Exceptionsmay be granted pursuant to this Agreement, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from PBT of any of its securities. (v) any All issued and outstanding shares of capital stock PBT Common Stock and PBT Preferred Stock (A) have been duly authorized and validly issued and are fully paid and nonassessable and (B) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. (vi) The rights, preferences, privileges and restrictions of the Company PBT Shares are authorized or outstanding, (ii) as stated in the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, PBT Charter. Each outstanding series of PBT Preferred Stock is convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current into PBT Common Stock on a one-for-one basis as of the date hereof and the consummation of the License Agreement between transactions contemplated hereunder will not result in any anti-dilution adjustment or other similar adjustment to the Company and Purchaseroutstanding shares of PBT Preferred Stock. [**] = Portions of this exhibit The PBT Conversion Shares have been omitted pursuant to a confidential treatment requestduly and validly reserved for issuance. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationPBT Charter, the PBT Shares and the PBT Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than (A) liens and encumbrances created by Purchaser)or imposed upon WinWin and (B) any right of first refusal set forth in PBT’s Bylaws; provided, however, that the PBT Shares and the PBT Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the First Closing after giving effect to and the Restated Certificate consummation of Incorporationthe transactions contemplated hereby, will consist of [98,530,700] (i) 50,000,000 shares of Series A Common Stock, par value $0.001 .001 per share (the “Series A Common Stock,” and together with the Series B Common Stockshare, the “Common Stock”), none 16,622,691 shares of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] 2,047,729 shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 's Stock Option Plans, as amended and restated (the "Option Plan"), 2002 Stock Incentive Plan20,084,846 shares of which are reserved for issuance upon exercise of the Initial Series F Warrants and other warrants of the Company, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”ii) and [74,942,226] 2,000,000 shares of Preferred Stock, par value $0.001 .001 per share, 8,904,567 400 of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 225 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I B Preferred Stock, none of which are issued and outstanding (collectivelyoutstanding, the “500,000 of which are designated Series C Preferred Stock”, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 65,000 of which are designated Series F Preferred Stock, 41,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. The authorized capital stock of the Company immediately after the First Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 16,622,691 shares of which are issued and outstanding, and 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 22,205,874 shares of which are reserved for issuance upon exercise of the Warrants, warrants to purchase shares of Common Stock of the Company issued pursuant to the First Series F Purchase Agreement and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 73,000 of which are designated Series F Preferred Stock, 42,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be 3 issued at any time. All issued and outstanding shares of the Company’s 's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessablenonassessable, and (c) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities lawslaws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of IncorporationDesignation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] 24,193,603 shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Option Plans, the [98,530,700] shares of Warrants, the Initial Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, F Warrants and other warrants and except as provided in the Restated Certificate of Incorporation may be granted pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsRelated Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or stockholder agreements, or agreements of any shares of capital stock of kind for the purchase or acquisition from the Company are authorized or outstandingof any of its securities. Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, (ii) the Company has is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no obligation (contingent agreement or otherwise) understanding between any persons and/or entities, which affects or relates to issue the voting or giving of written consents with respect to any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets by a director of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationDesignation, the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)any restrictions on transfer; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposedlaws. The sale consummation of the Shares transactions contemplated by this Agreement and the subsequent conversion Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Shares into Conversion Shares are not Company is listed on Schedule 5.2 hereto, and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closingeach such subsidiary is wholly-owned.

Capitalization; Voting Rights. (1a) The authorized capital stock of the Company, immediately prior to the Closing after giving effect to the Restated Certificate Closing, consists of Incorporation, will consist of [98,530,700] (i) 68,000,000 shares of Series A Common Stock, par value $0.001 0.01 per share (the “Series A Common Stock,” and together with the Series B Common Stockshare, the “Common Stock”), none 8,535,761 shares of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”ii) and [74,942,226] 49,116,801 shares of Preferred Stock, par value $0.001 0.01 per share, 8,904,567 17,006,275 of which are designated Series A Preferred Stock, all 15,740,285 are issued and outstanding, and 16,410,526 are designated Series B Preferred Stock, 16,036,346 of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which 15,700,000 are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding. (b) Under the Company’s 2007 Stock Incentive Plan, 8,333,333 as amended to date (the “Plan”), (i) no shares have been issued pursuant to restricted stock purchase agreements and/or the exercise of which outstanding options, (ii) options to purchase 2,973,500 shares of Common Stock have been granted and are designated as Series H Preferred Stock, 4,141,586 of which are issued and currently outstanding, and 681,819 (iii) 5,998,517 shares of which Common Stock remain available for future issuance to officers, directors, employees and consultants of the Company. The Company has furnished to the Purchasers complete and accurate copies of the Plan and forms of agreements used thereunder. The Company has not made any representations regarding equity incentives to any officer, employee, director or consultant that are designated inconsistent with the share amounts and terms set forth in the Company’s board minutes. (c) Warrants to purchase 104,000 shares of Common Stock are outstanding. (d) Warrants to purchase 1,265,990 shares of Series A Preferred Stock are outstanding. (e) Warrants to purchase 374,180 shares of Series B Preferred Stock are outstanding. (f) Other than the shares reserved for issuance under the Plan, except as Series I Preferred Stock, none of which are may be issued and sold pursuant to this Agreement and the Related Agreements and except as disclosed in this Agreement, there are no other outstanding options, warrants, rights (collectivelyincluding conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, agreements or understandings, oral or written, of any kind for the “Preferred Stock”). purchase or acquisition from the Company of any of its securities. (g) All issued and outstanding shares of the Company’s capital stock (ai) have been duly authorized and validly issued, (b) issued and are fully paid and non-assessablenonassessable, and (cii) were offered, issued, sold and delivered issued in compliance with all applicable state and federal laws concerning the issuance of securities, and state securities laws. (iii) as to the issued and outstanding shares of the Company’s Common Stock, are subject to a right of first refusal in favor of the Company upon transfer. (h) The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basisCharter. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of Exceptions, (i) no subscriptions, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) any shares of capital stock of the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationCharter, the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than (i) liens and encumbrances created by Purchaser)or imposed upon the Purchasers and (ii) any right of first refusal set forth in the Company’s Bylaws or the Co-Sale Agreement; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. (i) All outstanding options (and Common Stock issued upon exercise of such options) vest as follows: twenty-five percent (25%) of the shares vest one (1) year following the vesting commencement date, with on the remaining seventy-five percent (75%) vesting in equal quarterly installments over the next three (3) years. No stock plan, stock purchase, stock option or prior other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of (i) termination of employment or consulting services (whether actual or constructive); (ii) any merger, sale of stock or assets, change in control or any other transaction(s) by the Company; or (iii) the occurrence of any other event or combination of events. All outstanding options and warrants to purchase shares of the Company’s capital stock have been issued in compliance with all applicable federal, state, foreign or local statutes, laws, rules, or regulations, including federal and state securities laws. (j) All outstanding shares of Common Stock and all shares of Common Stock issuable upon the exercise or conversion of outstanding options, warrants or other exercisable or convertible securities are subject to a market standoff or “lockup” agreement of not less than 180 days following the Company’s initial public offering. (k) The Company has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means. Except as set forth in the Restated Charter, the Company has no obligation (contingent or otherwise) to purchase or redeem any of its capital stock. (l) The Company believes in good faith that any “nonqualified deferred compensation plan” (as such term is defined under Section 409A(d)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), and the guidance thereunder) under which the Company makes, is obligated to make or promises to make, payments (each, a “409A Plan”) complies in all material respects, in both form and operation, with the requirements of Section 409A of the Code and the guidance thereunder. To the Knowledge of the Company, no payment to be made under any 409A Plan is, or will be, subject to the Closingpenalties of Section 409A(a)(1) of the Code.

Capitalization; Voting Rights. (1a) The authorized capital stock of the Company, immediately prior to as of the Closing after giving effect to the Restated Certificate date hereof consists of Incorporation105,000,000 shares, will consist of [98,530,700] which (i) 100,000,000 are shares of Series A Common Stock, par value $0.001 per share share, 9,547,811 shares of which are issued and outstanding, and (the “ii) 5,000,000 are shares of preferred stock, par value $0.001 per share, which preferred stock consists of (A) 100,000 shares of authorized Series A Common Stock,” preferred stock , of which 80 shares are issued and together with the outstanding, (B) 100,000 shares of authorized Series B preferred stock, of which 1,450 shares are issued and outstanding and are convertible into 14,500,000 shares of Common Stock, the “Common Stock”)(C) 100,000 shares of authorized Series C preferred stock, none of which are issued and outstanding, and [98,530,700] (D) 10,000 shares of which are reserved for future issuance upon conversion of shares of authorized Series B Common StockD preferred stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which 300 shares are issued and outstanding and [16,006,519] are convertible into 3,750,000 shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Common Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”E) and [74,942,226] 10,000 shares of Preferred Stockauthorized Series E preferred stock, par value $0.001 per share, 8,904,567 of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which 100 shares are issued and outstanding (collectively, the “Preferred Stock”). All issued and outstanding are convertible into 1,250,000 shares of the Company’s capital stock (a) have been duly authorized and validly issued, Common Stock. (b) are fully paid and non-assessableExcept as disclosed on Schedule 4.3, and other than: (ci) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] 's stock option plans; and (ii) shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation which may be granted pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsRelated Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or stockholder agreements, or arrangements or agreements of any shares kind for the purchase or acquisition from the Company of capital stock any of its securities. Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of the Note or the Warrant, or the issuance of any of the Note Shares or Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Company are authorized or outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (c) All issued and outstanding shares of the Company's Common Stock: (i) have been duly authorized and validly issued and are fully paid and nonassessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights issuance of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Companysecurities. (bd) The rights, preferences, privileges and restrictions of the shares of the Common Stock are as stated in the Company's Certificate of Incorporation (the "Charter"). The Note Shares and Warrant Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationCompany's Charter, the Shares and the Conversion Shares Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; provided, however, that the Shares and the Conversion Shares Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1a) The authorized capital stock of the CompanyParent, immediately prior to as of the Closing after giving effect to the Restated Certificate date hereof consists of Incorporation425,000,000 shares, will consist of [98,530,700] which (i) 300,000,000 are shares of Series A Common Stock, par value $0.001 per share (the “Series A Common Stock,” and together with the Series B Common Stock, the “Common Stock”), none of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”) and [74,942,226] shares of Preferred Stock, par value $0.001 per share, 8,904,567 of which are designated Series A Preferred Stock, all 10,865,645 shares of which are issued and outstanding, 7,419,355 (ii) 10,000,000 are shares of Series A preferred stock, par value $1.00 per share of which are designated 6,183,000 shares of Series B Preferred Stock, all of which A preferred stock are issued and outstanding, 6,401,523 (iii) 30,000,000 are shares of Series B preferred stock, par value $1.00 per share of which are designated 8,074,263 shares of Series C Preferred Stock, all of which B preferred stock are issued and outstanding, 12,618,296 (iv) 10,000,000 are shares of Series C preferred stock, par value $1.00 per share of which are designated as 7,500,000 shares of Series D Preferred Stock, all of which C preferred stock are issued and outstanding, 20,500,000 (v) 15,000,000 are shares of Series D preferred stock, par value $1.00 per share of which are designated as 9,728,201 shares of Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which D preferred stock are issued and outstanding, and 681,819 (vi) 60,000,000 are shares of Series E preferred stock, par value $1.00 per share of which are designated as 32,054,606 shares of Series I Preferred Stock, none of which E preferred stock are issued and outstanding (collectivelyoutstanding. The authorized, the “Preferred Stock”). All issued and outstanding shares capital stock of each Subsidiary of the Company’s capital stock (a) have been duly authorized and validly issued, Parent is set forth on Schedule 4.3. (b) are fully paid and non-assessableExcept as disclosed on Schedule 4.3, and other than: (ci) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the CompanyParent’s Stock Incentive Plans, the [98,530,700] stock option plans; and (ii) shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation which may be granted pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsRelated Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Parent of any of its securities. Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of the Note or the Warrant, or the issuance of any of the Note Shares or Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Parent outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (c) any All issued and outstanding shares of capital stock of the Company Parent’s Common Stock: (i) have been duly authorized and validly issued and are authorized or outstanding, fully paid and nonassessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the Company has no obligation issuance of securities. (contingent or otherwised) to issue any subscriptionThe rights, warrantpreferences, option, convertible security or other such right (including conversion or preemptive rights privileges and rights restrictions of first refusal) or to issue or distribute to holders of any the shares of its capital stock any evidences the Common Stock are as stated in the Parent’s Certificate of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company Incorporation (the “Voting AgreementCharter”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company ). The Note Shares and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) Warrant Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationParent’s Charter, the Shares and the Conversion Shares Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; provided, however, that the Shares and the Conversion Shares Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the First Closing after giving effect to and the Restated Certificate consummation of Incorporationthe transactions contemplated hereby, will consist of [98,530,700] (i) 50,000,000 shares of Series A Common Stock, par value $0.001 .001 per share (the “Series A Common Stock,” and together with the Series B Common Stockshare, the “Common Stock”), none 16,622,691 shares of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] 2,047,729 shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 's Stock Option Plans, as amended and restated (the "Option Plan"), 2002 Stock Incentive Plan20,084,846 shares of which are reserved for issuance upon exercise of the Initial Series F Warrants and other warrants of the Company, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”ii) and [74,942,226] 2,000,000 shares of Preferred Stock, par value $0.001 .001 per share, 8,904,567 400 of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 225 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I B Preferred Stock, none of which are issued and outstanding (collectivelyoutstanding, the “500,000 of which are designated Series C Preferred Stock”, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 65,000 of which are designated Series F Preferred Stock, 41,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. The authorized capital stock of the Company immediately after the First Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 16,622,691 shares of which are issued and outstanding, and 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 22,205,874 shares of which are reserved for issuance upon exercise of the Warrants, warrants to purchase shares of Common Stock of the Company issued pursuant to the First Series F Purchase Agreement and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 73,000 of which are designated Series F Preferred Stock, 42,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be issued at any time. All issued and outstanding shares of the Company’s 's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and non-assessablenonassessable, and (c) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities lawslaws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of IncorporationDesignation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] 24,193,603 shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Option Plans, the [98,530,700] shares of Warrants, the Initial Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, F Warrants and other warrants and except as provided in the Restated Certificate of Incorporation may be granted pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsRelated Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or stockholder agreements, or agreements of any shares of capital stock of kind for the purchase or acquisition from the Company are authorized or outstandingof any of its securities. Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, (ii) the Company has is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no obligation (contingent agreement or otherwise) understanding between any persons and/or entities, which affects or relates to issue the voting or giving of written consents with respect to any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets by a director of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationDesignation, the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)any restrictions on transfer; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposedlaws. The sale consummation of the Shares transactions contemplated by this Agreement and the subsequent conversion Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Shares into Conversion Shares are not Company is listed on Schedule 5.2 hereto, and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closingeach such subsidiary is wholly-owned.

Capitalization; Voting Rights. (1) The authorized capital stock of the CompanyCompany consists of 50,000,000 shares, immediately prior to the Closing after giving effect to the Restated Certificate of Incorporation, will consist of [98,530,700] such shares being designated as follows: (i) 48,000,000 shares of Series A Common Stockcommon stock, par value $0.001 .01 per share (the “Series A "Common Stock,” and together with the Series B Common Stock, the “Common Stock”), none ") of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which (a) 16,405,548 are issued and outstanding and [16,006,519] (b) (1) 3,323,700 shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 's 1997 Equity Compensation Plan adopted by the Company on May 21, 1997, the Company's 1988 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 the Company's Stock Incentive Option Plan for Directors (collectively, the “"Stock Incentive Option Plans”") and [74,942,226] (2) 3,000,000 shares are reserved for issuance pursuant to the Asset Purchase Agreement, dated February 13, 2001 by and among the Company, Axial Technology Holding AG and Wyzdom Solutions, Inc. (the "Asset Purchase Agreement"); (ii) 2,000,000 shares of preferred stock, par value $.01 per share, consisting of 500,000 shares of Series A Convertible Preferred Stock, par value $0.001 .10 per share, 8,904,567 of which are designated Series A Preferred Stock, all of which no shares are issued and outstanding, 7,419,355 200,000 shares of which are designated Series B Convertible Preferred Stock, all par value $.01 per share, of which no shares are issued and outstanding, 6,401,523 250,000 shares of which are designated Series C Convertible Preferred Stock, all par value $.01 per share, of which no shares are issued and outstanding, 12,618,296 9,500 shares of which are designated as Series D Convertible Preferred Stock, all par value $.01 per share, of which no shares are issued and outstanding, 20,500,000 1,800 shares of which are designated as Series E Redeemable Preferred Stock, 19,633,531 par value $.01 per share, of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which no shares are issued and outstanding, and 681,819 3,000 shares of which are designated as Series I F Convertible Preferred Stock, none par value $.01 per share (the "Series F Preferred Stock"), of which are 3,000 shares will be upon consummation of the transactions contemplated hereby issued and outstanding (collectivelyoutstanding. The Shares have been duly authorized, and upon consummation of the “Preferred Stock”)Conversion, will be fully paid and non-assessable and issued in compliance with all applicable state and federal laws concerning the issuance of securities. All issued and outstanding shares of the Company’s capital stock Common Stock and the Shares (ai) have been duly authorized and validly issued, (bii) are fully paid and non-assessable, nonassessable and (ciii) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities lawslaws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate Designations, which was accepted for filing by the Pennsylvania Department of IncorporationState prior to the date hereof. Each series The shares of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share issuable upon conversion of Series B Common Stock is convertible into a share the Shares pursuant to the terms of Series A Common Stock on a one-for-one basis. The the Designations (the "Conversion Shares Shares") have been duly and validly reserved for issuance. (a) . Other than the [16,006,519] 3,323,700 shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] Option Plans and 3,000,000 shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stockto be issued pursuant to the Asset Purchase Agreement, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of Exceptions, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or shareholder agreements, or agreements of any shares of capital stock of kind for the purchase or acquisition from the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock securities. The Shares are free of any evidences of indebtedness liens or assets of encumbrances; provided, however, that the Company, and (iii) the Company has no obligation (contingent or otherwise) Shares may be subject to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaserrestrictions on transfer under state and/or federal securities laws. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationDesignations, the Shares and the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closinglaws.

Capitalization; Voting Rights. (1a) The authorized capital stock of the Company, immediately prior to as of the Closing after giving effect to the Restated Certificate date hereof consists of Incorporation770,000,000 shares, will consist of [98,530,700] which 750,000,000 are shares of Series A Common Stock, par value $0.001 0.0025 per share (the “Series A Common Stock,” and together with the Series B Common Stockshare, the “Common Stock”), none _________shares of which are issued and outstanding, and [98,530,700] shares 20,000,000 of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”) and [74,942,226] shares of Preferred Stockpreferred stock, par value $0.001 .0025 per share, 8,904,567 share of which 11,555,000 shares are issued outstanding. 5,000 shares of Preferred Stock are designated as Series A Preferred Stock, all Stock of which 5,000 shares are issued outstanding and outstandingowned by General Media International, 7,419,355 Inc.; 5,000 shares of which Preferred Stock are designated as Series B Preferred Stock, all of which no shares are issued and outstanding, 6,401,523 ; and 11,550,000 shares of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which Stock are designated as Series D C Preferred Stock, all Stock of which 11,550,000 are issued outstanding and outstanding, 20,500,000 of which 10,500,000 shares are designated as Series E Preferred Stockowned by Del Sol Investments G.P. and 1,050,00 shares are owned by A & L Capital. The authorized capital stock/membership interests of each guarantor of the Company's obligations to Purchaser (each a "Guarantor" and collectively "Guarantors"), 19,633,531 together with the related par value per share and number of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which are issued and outstanding (collectivelyshares/membership interests, the “Preferred Stock”). All issued and outstanding shares in each case, as of the Company’s capital stock (a) have been duly authorized and validly issueddate hereof, are set forth on SCHEDULE 4.3(a). (b) are fully paid and non-assessableExcept as disclosed on SCHEDULE 4.3(b), and other than (ci) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] 's stock option plans; and (ii) shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation which may be granted pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsRelated Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) ), proxy or stockholder agreements, or arrangements or agreements of any shares kind for the purchase or acquisition from the Company any of capital stock its securities. Except as disclosed on SCHEDULE 4.3(b), neither the offer, issuance or sale of any of the Note or Warrant, or the issuance of any of the Note Shares or Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Company are authorized or outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (c) All issued and outstanding shares of the Company's Common Stock (i) have been duly authorized and validly issued and are fully paid and nonassessable and (ii) were issued in compliance with all applicable state and federal laws concerning the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights issuance of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Companysecurities. (bd) The rights, preferences, privileges and restrictions of the shares of the Common Stock are as stated in the Company's Certificate of Incorporation (the "CHARTER"). The Note Shares and Warrant Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationCompany's Charter, the Shares and the Conversion Shares Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1i) The authorized capital stock of the CompanyParent, immediately prior to as of the Closing after giving effect to the Restated Certificate date hereof consists of Incorporation154,000,000 shares, will consist of [98,530,700] which (1) 100,000,000 are shares of Series A Common Stock, par value $0.001 0.0001 per share (the “Series A Common Stock,” and together with the Series B Common Stockshare, the “Common Stock”), none 34,451,964 shares of which are issued and outstanding, and [98,530,700] (2) 2,000,000 are shares of which are reserved for future issuance upon conversion of shares of Series B Non-Voting Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”) and [74,942,226] shares of Preferred Stock, par value $0.001 per share, 8,904,567 of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none 117,284 shares of which are issued and outstanding (collectively, the “Preferred Stock”). All issued and outstanding shares of the Company’s capital stock (a) have been duly authorized and validly issuedwhich , (b3) 2,000,000 are fully paid and non-assessable, and (c) were offered, issued, sold and delivered in compliance with all applicable federal and state securities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Incorporation. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share shares of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly preferred stock, par value $0.001 per share of which 0 shares are issued and validly reserved for issuance. outstanding, (a4) Other than the [16,006,519] 20,000,000 are shares of Series B Common Stock preferred stock, par value $0.001 per share of which 0 shares are issued and outstanding and (5) 21,000,000 are shares of Series C preferred stock, par value $0.001 per share of which 21,000,000 shares are issued and outstanding. The authorized, issued and outstanding capital stock of each Subsidiary of each Company is set forth on Schedule 12(c). (ii) Except as disclosed on Schedule 12(c), other than: (i) the shares reserved for issuance under the CompanyParent’s Stock Incentive Plans, the [98,530,700] stock option plans; and (ii) shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation which may be issued pursuant to this Agreement and the Investors’ Rights Agreement or as set forth in the Schedule of ExceptionsAncillary Agreements, (i) there are no subscriptionsoutstanding options, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Parent of any of its securities. Except as disclosed on Schedule 12(c), neither the offer, issuance or sale of any of the Notes or the Warrants, or the grant of the Option or the issuance of any of the Note Shares, the Warrant Shares or the Option Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Parent outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (iii) any All issued and outstanding shares of capital stock of the Company Parent’s Common Stock: (i) have been duly authorized and validly issued and are authorized or outstanding, fully paid and non-assessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights issuance of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividendsecurities. (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciationThe rights, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreementpreferences, the Investors’ Rights Agreement, the Fourth Amended privileges and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders restrictions of the Company shares of the Common Stock are as stated in the Parent’s Certificate of Incorporation (the “Voting AgreementCharter”) or in ). The Note Shares, the Schedule of Exceptions, there are no agreements or proxies, written or oral, between Warrant Shares and the Company Option Shares have been duly and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationParent’s Charter, the Shares and the Conversion Shares Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)encumbrances; provided, however, that the Shares and the Conversion Shares Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the Closing.

Capitalization; Voting Rights. (1a) The authorized capital stock of the Company, immediately prior to the Closing after giving effect to the Restated Certificate Closing, consists of Incorporation, will consist of [98,530,700] (i) 36,000,000 shares of Series A Common Stock, without par value $0.001 per share (the “Series A Common Stock,” and together with the Series B Common Stockvalue, the “Common Stock”), none 6,327,889 shares of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding and [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans”ii) and [74,942,226] 19,000,000 shares of Preferred Stock, without par value $0.001 per sharevalue, 8,904,567 (A) 1,563,248 shares of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 (B) 4,720,347 shares of which are designated Series B Preferred Stock, all 4,707,847 of which are issued and outstanding, 6,401,523 (C) 10,399,011 shares of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 (D) 1,000,000 shares of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 (E) 964,075 shares of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 8,333,333 of which are designated as Series H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I D-1 Preferred Stock, none of which are issued and outstanding and (collectively, the “F) 114,883 shares of which are designated Mandatorily Convertible Preferred Stock”, none of which are issued or outstanding. (b) Under the Company's 2003 Equity Incentive Plan (the "Plan"). , which is the only stock option, stock purchase or similar equity incentive or benefit plan or agreement currently in effect with respect to the Company, (i) 2,428,769 shares have been issued pursuant to the exercise of outstanding options, (ii) options to purchase 1,573,137 shares have been granted and are currently outstanding, and (iii) stock awards covering 1,098,094 shares of Common Stock remain available for future grant under the Plan. (c) Other than (i) options to purchase up to an aggregate of 5,100,000 shares of Common Stock under the Plan (of which 1,098,094 shares of Common Stock remain available for future grant under the Plan), (ii) a warrant to purchase up to 12,500 shares of Series B Preferred Stock, (iii) warrants to purchase 964,075 shares of Series D-1 Preferred Stock issued to Guidant Investment Corporation/Boston Scientific and to the participants in certain bridge financing transactions in May and August 2006, and (iv) the conversion rights of the outstanding shares of preferred stock of the Company (the "Preferred Stock"), and except as may be granted pursuant to this Agreement and the Related Agreements, there are no options outstanding or reserved for issuance, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. (d) All issued and outstanding shares of the Company’s capital stock Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and non-assessablenonassessable, and (ciii) were offered, issued, sold and delivered issued in compliance with all applicable state and federal and state securities laws. laws concerning the issuance of securities. (e) The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of IncorporationArticles. Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share basis as of Series B Common Stock is convertible into a share the date hereof and the consummation of Series A Common Stock on a onethe transactions contemplated hereunder will not result in any anti-for-one basisdilution adjustment or other similar adjustment to the outstanding shares of Preferred Stock. The Conversion Shares have been duly and validly reserved for issuance. (a) Other than the [16,006,519] shares of Series B Common Stock reserved for issuance under the Company’s Stock Incentive Plans, the [98,530,700] shares of Series A Common Stock reserved for issuance upon conversion of shares of Series B Common Stock, and except as provided in the Restated Certificate of Incorporation and the Investors’ Rights Agreement or as set forth in the Schedule of Exceptions, (i) no subscriptions, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire (including conversion or preemptive rights and rights of first refusal) any shares of capital stock of the Company are authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right (including conversion or preemptive rights and rights of first refusal) or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, and (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend (1) Capitalization figures are current as of the date of the License Agreement between the Company and Purchaser. [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. or make any other distribution in respect thereof, and (iv) no stock appreciation, phantom stock or similar rights with respect to the Company are authorized or outstanding. Except as contemplated by this Agreement, the Investors’ Rights Agreement, the Fourth Amended and Restated Voting Agreement, dated as of September 12, 2008, by and among the Company, Fidelity Biosciences Limited Partnership and certain stockholders of the Company (the “Voting Agreement”) or in the Schedule of Exceptions, there are no agreements or proxies, written or oral, between the Company and any holder of its capital stock, or, to the best knowledge of the Company, among any holders of its capital stock, relating to the acquisition, disposition or voting of the capital stock of the Company. (b) When issued in compliance with the provisions of this Agreement and the Restated Certificate of IncorporationArticles, the Shares and the Conversion Shares will be duly and validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances (other than liens and encumbrances created by Purchaser)or imposed upon the Purchasers, and will not be subject to any preemptive rights or other restrictions on transfer; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The . (f) No stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of any merger, consolidated sale of stock or assets, change in control or any other transaction(s) by the Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with on or prior to the ClosingCompany.