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Delaware		2834		04-3416587
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code No.)		(I.R.S. Employer Identification Number)

David E. Redlick Stuart R. Nayman Wilmer Cutler Pickering Hale and Dorr LLP 399 Park Avenue New York, New York 10022 (212) 230-8800		Mark E. Boulding Senior Vice President and General Counsel PTC Therapeutics, Inc. 100 Corporate Court South Plainfield, New Jersey 07080-2449 (908) 222-7000		Patrick O’Brien Ropes & Gray LLP One International Place Boston, Massachusetts 02110 (617) 951-7000

			Proposed Maximum
Title of Each Class of			Aggregate Offering			Amount of
Securities to be Registered			Price(1)			Registration Fee(2)
Common Stock, $0.001 par value per share			$86,250,000.00			$9,228.75

(1)	Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2)	Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

Underwriting

Price to

Discounts and

Proceeds to

Public

Commissions

PTC

Per Share

$

$

$

Total

$

$

$

MORGAN STANLEY	JPMORGAN

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		Page
Prospectus Summary			1
Risk Factors			6
Special Note Regarding Forward-Looking Statements			24
Use of Proceeds			25
Dividend Policy			25
Capitalization			26
Dilution			28
Selected Financial Data			30
Management’s Discussion and Analysis of Financial Condition and Results of Operations			32
Business			43
Management			75
Certain Relationships and Related Party Transactions			87
Principal Stockholders			89
Description of Capital Stock			92
Shares Eligible for Future Sale			96
Underwriters			98
Legal Matters			101
Experts			102
Where You Can Find More Information			102
Index to Financial Statements			F-1
EX-3.1: RESTATED CERTIFICATE OF INCORPORATION
EX-3.3: AMENDED AND RESTATED BYLAWS
EX-4.2: FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
EX-4.3: WARRANT
EX-4.4: WARRANT
EX-4.5: WARRANT
EX-4.6: WARRANT
EX-4.7: WARRANT
EX-4.8: WARRANT
EX-4.9: WARRANT
EX-4.10: WARRANT
EX-10.1: SIXTH AMENDED AND RESTATED 1998 STOCK OPTION PLAN
EX-10.4: RESEARCH COLLABORATION AND EXCLUSIVE OPTION AGREEMENT
EX-10.5: COLLABORATION AND LICENSE AGREEMENT
EX-10.12: LEASE AGREEMENT
EX-10.13: MASTER SECURITY AGREEMENT
EX-10.14: FORM OF PROMISSORY NOTE
EX-23.1: CONSENT OF KPMG LLP

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	•	continue our ongoing Phase 2 clinical trials of PTC124 for the treatment of cystic fibrosis and Duchenne muscular dystrophy caused by nonsense mutations and conduct potential later stage clinical trials of PTC124 if our Phase 2 trials are successful;
	•	initiate and pursue clinical trials of PTC299 for the treatment of cancer;
	•	continue the research and development of our other product candidates;
	•	seek to discover and develop additional product candidates;
	•	seek regulatory approvals for our product candidates that successfully complete clinical trials;
	•	establish a sales and marketing infrastructure to commercialize products for which we may obtain regulatory approval; and
	•	add operational, financial and management information systems and personnel, including personnel to support our product development efforts and our obligations as a public company.

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	•	the progress and results of our clinical trials of PTC124 and PTC299;
	•	the success of our hepatitis C virus collaboration with Schering-Plough;
	•	the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates;
	•	the costs, timing and outcome of regulatory review of our product candidates;
	•	the number and development requirements of other product candidates that we pursue;
	•	the costs of commercialization activities, including product marketing, sales and distribution;
	•	the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;
	•	the extent to which we acquire or invest in businesses, products and technologies; and
	•	our ability to establish and maintain collaborations.

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	•	successful completion of clinical trials;
	•	successful completion of additional preclinical studies;
	•	receipt of marketing approvals from the United States Food and Drug Administration, or FDA, and similar regulatory authorities outside the United States;
	•	establishing commercial manufacturing arrangements with third-party manufacturers;
	•	launching commercial sales of the product, whether alone or in collaboration with others;
	•	acceptance of the product by patients, the medical community and third-party payors;
	•	competition from other therapies; and
	•	a continued acceptable safety profile of the product following approval.

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	•	regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;
	•	our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials or we may abandon projects that we expect to be promising;
	•	the number of patients required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower than we currently anticipate, or participants may drop out of our clinical trials at a higher rate than we anticipate, any of which would result in significant delays;
	•	our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner;
	•	we might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks;
	•	regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
	•	the cost of our clinical trials may be greater than we anticipate;
	•	the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate; and

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	•	the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.

	•	be delayed in obtaining marketing approval for our product candidates;
	•	not be able to obtain marketing approval;
	•	obtain approval for indications that are not as broad as intended; or
	•	have the product removed from the market after obtaining marketing approval.

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	•	the prevalence and severity of any side effects;
	•	the efficacy and potential advantages over alternative treatments;
	•	the ability to offer our product candidates for sale at competitive prices;
	•	relative convenience and ease of administration;
	•	the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
	•	the strength of marketing and distribution support; and
	•	sufficient third-party coverage or reimbursement.

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	•	a covered benefit under its health plan;
	•	safe, effective and medically necessary;
	•	appropriate for the specific patient;
	•	cost-effective; and
	•	neither experimental nor investigational.

	•	decreased demand for any product candidates or products that we may develop;
	•	injury to our reputation;
	•	withdrawal of clinical trial participants;
	•	costs to defend the related litigation;
	•	substantial monetary awards to trial participants or patients;
	•	loss of revenue; and
	•	the inability to commercialize any products that we may develop.

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	•	reliance on the third party for regulatory compliance and quality assurance;
	•	the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and
	•	the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.

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	•	our collaboration agreements are likely to be for fixed terms and subject to termination by our collaborators in the event of a material breach or lack of scientific progress by us;
	•	our collaborators are likely to have the first right to maintain or defend our intellectual property rights and, although we would likely have the right to assume the maintenance and defense of our intellectual property rights if our collaborators do not, our ability to do so may be compromised by our collaborators’ acts or omissions; and
	•	our collaborators may utilize our intellectual property rights in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential liability.

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	•	restrictions on such products, manufacturers or manufacturing processes;
	•	warning letters;
	•	withdrawal of the products from the market;
	•	refusal to approve pending applications or supplements to approved applications that we submit;
	•	recall;
	•	fines;
	•	suspension or withdrawal of regulatory approvals;
	•	refusal to permit the import or export of our products;
	•	product seizure; and
	•	injunctions or the imposition of civil or criminal penalties.

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	•	establish a classified board of directors such that not all members of the board are elected at one time;
	•	allow the authorized number of our directors to be changed only by resolution of our board of directors;
	•	limit the manner in which stockholders can remove directors from the board;
	•	establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;
	•	require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;
	•	limit who may call stockholder meetings;
	•	authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and
	•	require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.

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	•	results of clinical trials of our product candidates or those of our competitors;
	•	regulatory or legal developments in the United States and other countries;
	•	variations in our financial results or those of companies that are perceived to be similar to us;
	•	changes in the structure of healthcare payment systems;
	•	market conditions in the pharmaceutical and biotechnology sectors and issuance of new or changed securities analysts’ reports or recommendations;
	•	general economic, industry and market conditions; and
	•	the other factors described in this “Risk Factors” section.

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	•	our plans to develop and commercialize PTC124 and PTC299;
	•	our collaborations with Schering-Plough and Bausch & Lomb;
	•	our ongoing and planned discovery programs, preclinical studies and clinical trials;
	•	the potential benefits of our existing collaboration agreements and our ability to enter into selective additional collaboration arrangements;
	•	the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;
	•	the rate and degree of market acceptance and clinical utility of our products;
	•	our ability to quickly and efficiently identify and develop product candidates;
	•	the extent to which our scientific approach may potentially address a broad range of diseases across multiple therapeutic areas;
	•	our commercialization, marketing and manufacturing capabilities and strategy;
	•	our intellectual property position; and
	•	our estimates regarding expenses, future revenues, capital requirements and needs for additional financing.

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	•	approximately $           million to fund a portion of our development activities for PTC124, including the ongoing Phase 2 clinical trials of PTC124 for the treatment of cystic fibrosis and Duchenne muscular dystrophy and potential later stage clinical trials if our Phase 2 trials are successful;
	•	approximately $           million to fund a portion of our development activities for PTC299, including our planned Phase 1a clinical trial in healthy volunteers and Phase 1b clinical trial in cancer patients;
	•	approximately $           million to fund research and development for our discovery programs; and
	•	the balance, if any, to fund working capital, capital expenditures and other general corporate purposes, which may include the acquisition or licensing of complementary technologies, products or businesses.

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	•	on an actual basis;
	•	on a pro forma basis to give effect to the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 13,504,722 shares of common stock upon the closing of this offering; and
	•	on a pro forma as adjusted basis to give further effect to our issuance and sale of                      shares of common stock in this offering at an assumed initial public offering price of $           per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and offering expenses payable by us.

				As of December 31, 2005
												Pro Forma
				Actual				Pro Forma				As Adjusted
				(in thousands)
								(unaudited)
Cash and cash equivalents and short-term investments(1)				$	37,840			$	37,840			$
Long-term debt, net of current portion				$	804			$	804			$
Stockholders’ equity:
	Series A convertible preferred stock, par value $0.001 per share; 750,000 shares authorized, issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				750				—
	Series B convertible preferred stock, par value $0.001 per share; 187,500 shares authorized, issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				365				—
	Series C convertible preferred stock, par value $0.001 per share; 6,295,000 shares authorized and 6,000,000 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				14,117				—
	Series D convertible preferred stock, par value $0.001 per share; 13,800,000 shares authorized and 13,095,769 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				39,282				—
	Series E convertible preferred stock, par value $0.001 per share; 128,242,850 shares authorized and 125,740,607 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				49,048				—
	Series E-2 convertible preferred stock, par value $0.001 per share; 4,132,232 shares authorized and 3,670,138 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted				26,511				—
	Preferred Stock, par value $0.001 per share; no shares authorized, issued or outstanding, actual and pro forma;          shares authorized and no shares issued or outstanding, pro forma as adjusted
	Common stock, par value $0.001 per share; 18,228,538 shares authorized, actual and pro forma; 6,943 shares issued and outstanding, actual; 13,511,665 shares issued and outstanding, pro forma;          shares authorized and          shares issued and outstanding, pro forma as adjusted				—				14
Additional paid-in capital(1)					506				130,565
Accumulated other comprehensive loss					(34	)			(34	)
Deficit accumulated during the development stage					(92,144	)			(92,144	)
		Total stockholders’ equity(1)			38,401				38,401
		Total capitalization(1)		$	39,205			$	39,205			$

(1)

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) each of cash and cash equivalents and short-term investments, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions.

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	•	2,064,958 shares of common stock issuable upon exercise of options outstanding as of December 31, 2005 at a weighted average exercise price of $2.28 per share;
	•	277,151 shares of common stock issuable upon the exercise of warrants outstanding as of December 31, 2005 at a weighted average exercise price of $17.86 per share;
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 equity plan as of the closing of this offering; and
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 employee stock purchase plan as of the closing of this offering.

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Assumed initial public offering price per share							$
	Historical net tangible book value per share as of December 31, 2005		$
	Increase attributable to the conversion of outstanding preferred stock
	Pro forma net tangible book value per share as of December 31, 2005
	Increase per share attributable to new investors
Pro forma net tangible book value per share after this offering
Dilution per share to new investors							$

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			Shares Purchased								Total Consideration								Average
																			Price per
			Number				Percentage				Amount				Percentage				Share
Existing stockholders									%								%		$
New investors
	Total							100	%						$	100	%

	•	2,064,958 shares of common stock issuable upon exercise of stock options outstanding as of December 31, 2005 at a weighted average exercise price of $2.28 per share;
	•	277,151 shares of common stock issuable upon the exercise of warrants outstanding as of December 31, 2006 at a weighted average exercise price of $17.86 per share;
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 equity plan as of the closing of this offering; and
	•	an aggregate of                      shares of common stock reserved for future issuance under our 2006 employee stock purchase plan as of the closing of this offering.

	•	the percentage of shares of common stock held by existing stockholders will decrease to approximately      % of the total number of shares of our common stock outstanding after this offering; and
	•	the pro forma as adjusted number of shares held by new investors will be increased to                     , or approximately      %, of the total pro forma as adjusted number of shares of our common stock outstanding after this offering.

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																								Period from
																								March 31, 1998
				Year Ended December 31,																				(Inception) to
																								December 31,
				2001				2002				2003				2004				2005				2005
				(in thousands, except share and per share data)
Statements of Operations Data:
Revenues				$	—			$	180			$	756			$	1,606			$	4,967			$	7,669
Operating expenses:
	Research and development				5,808				10,238				17,695				20,070				21,123				76,970
	General and administrative				3,395				4,165				4,693				6,023				7,944				27,231
		Total operating expenses			9,203				14,403				22,388				26,093				29,067				104,201
		Loss from operations			(9,203	)			(14,223	)			(21,632	)			(24,487	)			(24,100	)			(96,532	)
Interest income					1,043				769				317				579				854				3,998
Interest expense					(54	)			(270	)			(358	)			(184	)			(141	)			(1,007	)
		Loss before tax benefit			(8,214	)			(13,724	)			(21,673	)			(24,092	)			(23,387	)			(93,541	)
Tax benefit					—				232				235				451				479				1,397
Loss applicable to common stockholders				$	(8,214	)		$	(13,492	)		$	(21,438	)		$	(23,641	)		$	(22,908	)		$	(92,144	)
Basic and diluted loss per share applicable to common stockholders				$	(134,477	)		$	(201,365	)		$	(315,259	)		$	(347,670	)		$	(9,925	)
Shares used to compute basic and diluted loss per share applicable to common stockholders					62				67				68				68				2,308
Pro forma basic and diluted net loss per common share (unaudited)																				$	(2.11	)
Shares used to compute pro forma basic and diluted net loss per common share (unaudited)																					10,831,634

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		As of December 31,
		2001				2002				2003				2004				2005
		(in thousands)
Balance Sheet Data:
Cash and cash equivalents and short-term investments		$	32,507			$	24,599			$	41,570			$	32,987			$	37,840
Working capital			31,669				22,119				37,045				29,580				34,331
Total assets			44,401				34,800				49,054				38,968				43,974
Long-term debt, net of current portion			621				2,728				846				205				804
Deficit accumulated during the development stage			(10,666	)			(24,157	)			(45,595	)			(69,237	)			(92,144	)
Total stockholders’ equity			42,340				28,896				43,275				34,613				38,401

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	•	PTC124 for genetic disorders. We are currently conducting two Phase 2 clinical trials of PTC124 in patients with cystic fibrosis and one Phase 2 clinical trial of PTC124 in patients with Duchenne muscular dystrophy in cases in which a nonsense mutation is the cause of the disease. We have conducted an interim analysis of data from 15 patients who have completed their participation in our cystic fibrosis trials.
	•	PTC299 for oncology. In April 2006, we expect to commence a Phase 1a clinical trial of PTC299 in healthy volunteers in Belgium. If this Phase 1a trial is successful, we plan to initiate a Phase 1b clinical trial of PTC299 in late 2006 in patients with advanced solid tumors whose disease has progressed during therapy or for whom there is no effective therapy available.
	•	Hepatitis C development program. In March 2006, we entered into a collaboration with Schering-Plough Corporation for the commercialization of our compounds for the potential treatment of hepatitis C.

	Revenues

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	Research and Development Expense

	•	external research and development expenses incurred under agreements with third-party contract research organizations and investigative sites, third-party manufacturing organizations and consultants;
	•	employee-related expenses, which include salaries and benefits for the personnel involved in our drug discovery and development activities; and
	•	facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory and other supplies.

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															Research and
															Development Expenses
											Estimated
											Completion				Year Ended December 31,
							Phase of				of Current
Product Candidate			Indication				Development				Trial				2003				2004				2005
															(in thousands)
Clinical development:
	PTC124		Cystic Fibrosis; Duchenne Muscular Dystrophy					Phase 2				2006			$	2,642			$	6,018			$	5,132
	PTC299			Cancer				Phase 1a				2006				—				83				2,021
Total clinical development																2,642				6,101				7,153
Research and preclinical																15,053				13,969				13,970
Total research and development															$	17,695			$	20,070			$	21,123

	•	the scope, rate of progress and expense of our clinical trials and other research and development activities;
	•	the potential benefits of our product candidates over other therapies;
	•	our ability to market, commercialize and achieve market acceptance for any of our product candidates that we are developing or may develop in the future;
	•	future clinical trial results;
	•	the terms and timing of regulatory approvals; and
	•	the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

	General and Administrative Expense

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	Interest Income and Interest Expense

	Revenue Recognition

	Accrued Expenses

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	•	fees paid to contract research organizations in connection with preclinical and toxicology studies and clinical trials;
	•	fees paid to investigative sites in connection with clinical trials;
	•	fees paid to contract manufacturers in connection with the production of clinical trial materials; and
	•	professional service fees.

	Stock-Based Compensation

	•	pricing of private sales of our preferred stock;
	•	prior valuations of stock grants and preferred stock sales and the effect of events, including the progression of our product candidates, that have occurred between the time of the grants or sales;
	•	comparative rights and preferences of the security being granted compared to the rights and preferences of our other outstanding equity;
	•	comparative values of public companies discounted for the risk and limited liquidity provided for in the shares we are issuing;
	•	perspective provided by unrelated valuation specialists;
	•	perspective provided by investment banks, including the likelihood of an initial public offering and our potential value in an initial public offering; and
	•	general economic trends.

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	Income Taxes

	Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

	•	increased costs for preclinical studies and manufacturing for PTC299 of $1.6 million;
	•	increased costs for preclinical studies for PTC124 of $895,000; and
	•	decreased costs for clinical studies and manufacturing for PTC124 of $1.6 million.

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	•	increased personnel costs of $1.1 million attributable to increased salaries as well as increased headcount in legal and human resources;
	•	increased consulting expense of $290,000 related to commercialization planning and information technology infrastructure; and
	•	increased patent-related expense of $528,000 related to filings for PTC124, PTC299 and compounds in our HCV program.

	Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

	•	increased costs of clinical studies and manufacturing for PTC124 of $2.6 million;
	•	increased laboratory supply and library compound costs of $408,000;
	•	increased personnel costs of $1.1 million; and
	•	decreased in-process research and development of $1.4 million.

	•	increased personnel costs of $450,000 attributable to increased salaries and increased headcount in investor relations and general management;
	•	increased consulting expense of $419,000 related to increased legal and human resource temporary staffing;

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	•	increased patent and legal expense of $254,000 related to filings for PTC124 and general corporate legal expenses; and
	•	increased miscellaneous corporate expenses of $216,000.

			Year Ended December 31,
			2003				2004				2005
			(in thousands)
Cash provided by (used in):
	Operating activities		$	(16,225	)		$	(22,408	)		$	(20,720	)
	Investing activities			13,618				(20,218	)			(1,647	)
	Financing activities			32,223				13,425				26,555
Capital expenditures (included in investing activities above)				667				1,121				963

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	•	the progress and results of our clinical trials of PTC124 and PTC299;
	•	the success of our hepatitis C virus collaboration with Schering-Plough;
	•	the scope, progress, results and costs of preclinical development and laboratory testing and clinical trials for our other product candidates;
	•	the costs, timing and outcome of regulatory review of our product candidates;
	•	the number and development requirements of other product candidates that we pursue;
	•	the costs of commercialization activities, including product marketing, sales and distribution;
	•	the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;
	•	the extent to which we acquire or invest in businesses, products and technologies; and
	•	our ability to establish and maintain collaborations.

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						Less than				1-3				4-5				More than
		Total				1 Year				Years				Years				5 Years
Equipment financing obligations		$	1,282			$	478			$	774			$	30				—
Operating lease obligations			1,338				384				785				169				—
Total fixed contractual obligations		$	2,620			$	862			$	1,559			$	199				—

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	•	PTC124 for genetic disorders. We are developing PTC124 for the treatment of patients with genetic disorders that arise as a result of a type of genetic mutation known as a nonsense mutation. Our initial target indications for PTC124 are cystic fibrosis and Duchenne muscular dystrophy in cases in which a nonsense mutation is the cause of the disease. We are currently conducting two Phase 2 clinical trials of PTC124 in patients with cystic fibrosis and one Phase 2 clinical trial of PTC124 in patients with Duchenne muscular dystrophy. We have performed an interim analysis of data from 15 patients who have completed their participation in our cystic fibrosis trials. In this analysis, we observed statistically significant results which suggest that PTC124 may have pharmacological activity that addresses the underlying cause of cystic fibrosis in these patients. We believe that this is the first time such activity has been observed in a clinical trial of an oral therapy for cystic fibrosis. We believe that PTC124 is potentially applicable to a broad range of other genetic disorders in which a nonsense mutation is the cause of the disease. We expect to complete our ongoing Phase 2 clinical trials of PTC124 for both cystic fibrosis and Duchenne muscular dystrophy in the second half of 2006.
	•	PTC299 for oncology. We are developing PTC299 initially for the treatment of cancer. In preclinical studies, PTC299 directly and potently inhibited the production of vascular endothelial growth factor, or VEGF. VEGF is a protein that plays a central role in tumor growth through the process of new blood vessel formation referred to as angiogenesis. Because PTC299 blocks the production of VEGF, its activity is different from that of currently available anti-VEGF agents, which typically act by blocking the action of VEGF that has already been produced. In April 2006, we expect to commence a Phase 1a clinical trial of PTC299 in healthy volunteers in Belgium. If this Phase 1a clinical trial is successful, we plan to initiate a Phase 1b clinical trial of PTC299 in cancer patients in late 2006. PTC299 and related compounds are also potentially applicable to other diseases in which regulating VEGF levels plays a key role, such as age-related macular degeneration.

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	•	Hepatitis C development program. We have identified a number of small-molecule compounds that, in preclinical tests, inhibited hepatitis C viral protein synthesis and the production of the virus. These compounds target a specific site on the viral mRNA known as an internal ribosomal entry site, or IRES, which is critical to the replication of the hepatitis C virus. We believe that our approach may be complementary to existing therapies and other compounds currently in development for the treatment of hepatitis C. Pursuant to our collaboration with Schering-Plough, we and Schering-Plough will conduct a joint research program relating to compounds in our hepatitis C program, and Schering-Plough will be responsible for worldwide development and commercialization efforts for any product candidates that are developed. Schering-Plough has made an upfront payment to us of $12.0 million and has agreed to provide funding for our research activities. In addition, we are eligible to receive more than $200 million in payments if specified development, regulatory and sales milestones are achieved. We are also entitled to royalties on sales of products developed pursuant to the collaboration, with the royalty percentage based on specified thresholds of worldwide net product sales.

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Program		Development Status		Commercialization Rights
PTC124 for genetic disorders		Phase 2 clinical trials in cystic fibrosis and Duchenne muscular dystrophy ongoing; analysis of interim data from cystic fibrosis trials completed		PTC
PTC299 for oncology		Phase 1a clinical trial in healthy volunteers to commence in April 2006; Phase 1b clinical trial in cancer patients planned		PTC
Hepatitis C virus program		Preclinical		Schering-Plough Corporation
Antibacterial program		Discovery		PTC
Anemia program		Discovery		PTC
Musculoskeletal program		Discovery		PTC
Ophthalmology program		Subject of research collaboration		Bausch & Lomb

	PTC124

	Background on Genetic Disorders and Nonsense Mutations

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	Cystic Fibrosis

	Duchenne Muscular Dystrophy

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	PTC124 Scientific Background

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	Preclinical Development of PTC124

	•	The administration of PTC124 resulted in the production of full-length and functionally active CFTR in a mouse model of cystic fibrosis. Similarly, the administration of PTC124 resulted in the production of full-length and functionally active dystrophin in both in vitro and animal models of Duchenne muscular dystrophy.
	•	PTC124 demonstrated greater potency and activity than gentamicin controls in the read through of premature stop codons in in vitro studies.
	•	In in vitro and animal safety pharmacology studies, PTC124’s activity was specific for the premature stop codons resulting from nonsense mutations. There was no evidence of read through of normal stop codons in these studies, even when PTC124 was tested at significantly higher plasma concentrations than those that we expect to see in patients.

	Clinical Development of PTC124

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	•	Mean change in TEPD chloride conductance. This is the average among all study participants of the changes from the beginning to the end of the treatment period in each participant’s TEPD chloride conductance. For example, if the study consisted of three participants and if the changes in TEPD chloride conductance for the three participants were -7.0 mV, -2.0 mV and -9.0 mV, the mean change in TEPD chloride conductance among these participants would be -6.0 mV.
	•	Percentage of patients with a chloride conductance response. This is the percentage of patients who demonstrated a TEPD chloride conductance response at the end of each treatment period with PTC124. For purposes of the trials, a chloride conductance response is defined as a TEPD chloride conductance improvement of at least -5.0 mV. For example, in a patient with a TEPD chloride conductance value of +1.0 mV at baseline and a TEPD chloride conductance value of -6.0 mV at the end of treatment, the TEPD chloride conductance improvement would be -7.0 mV, representing a chloride conductance response.
	•	Percentage of patients with improvements of TEPD chloride conductance values into the normal range. As noted above, a chloride conductance equal to or more electrically negative than -5.0 mV is generally considered to be in the normal range. As such, a patient with a TEPD chloride conductance value of +1.0 mV at baseline would be considered to have an abnormal value because the value is more electrically positive than -5.0 mV. If, at the end of treatment, that patient’s TEPD chloride conductance value improved to -6.0 mV, this would represent an improvement into the normal range because the improved value is more electrically negative than -5.0 mV.

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	•	statistically significant mean improvements in TEPD chloride conductance;
	•	statistically significant percentages of patients with a TEPD chloride conductance response; and
	•	statistically significant increases in the percentage of patients with a TEPD chloride conductance value in the normal range.

Lower Dose Level

Higher Dose Level

TEPD Result

Result

p-Value

Result

p-Value

Mean change in TEPD chloride conductance:

Best of nostrils

-9.0 mV

<0.001

-6.4 mV

0.009

Mean of both nostrils

-6.7 mV

<0.001

-4.4 mV

0.023

Number of patients with³ -5 mV improvement in TEPD chloride conductance:

Best of nostrils

9/15 (60)%

<0.001

8/15 (53)%

<0.001

Mean of both nostrils

6/15 (40)%

0.005

7/15 (47)%

<0.001

Number of patients with improvement in TEPD chloride conductance to normal:

Best of nostrils

8/15 (53)%

0.008

8/15 (53)%

0.008

Mean of both nostrils

6/15 (40)%

0.032

7/15 (47)%

0.016

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							End of
							Higher
			Study				Dose
Endpoint			Entry				Treatment				Change				p-Value
Lung function (expressed as a percentage of normal for gender, age and height):
	Mean FEV 1			65.8	%			69.1	%			3.3	%			0.015
	Mean FVC			80.2	%			85.1	%			4.9	%			0.037
Weight				58.3	kg			59.0	kg			0.7	kg			0.012

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	Plans for Future Development

	PTC299

	Background on Cancer and the Role of VEGF

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	PTC299 Scientific Background

	Preclinical Development of PTC299

	•	In in vitro studies PTC299 was a potent inhibitor of tumor VEGF production. In these studies, PTC299 demonstrated a broad range of activity in blocking VEGF synthesis in multiple tumor types, including breast, cervical, colorectal, fibrosarcoma, gastric, lung, melanoma, neuroblastoma, ovarian, pancreas, prostate and renal cell cancer lines.
	•	In multiple animal studies, PTC299 as a monotherapy significantly reduced VEGF concentrations in tumors and plasma, reduced tumor blood vessel density and substantially impeded tumor progression. In addition, in animal studies, PTC299 enhanced the antitumor activity of chemotherapy agents and of Avastin when given as a component of combination therapy.

	Clinical Development of PTC299

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	Plans for Future Development

	Hepatitis C Program

	Background on Hepatitis C

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	HCV Program Scientific Background

	Lead Compound Optimization and Plans for Future Development

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	Antibacterial Program

	Anemia Program

	Musculoskeletal Program

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	The Importance of UTRs in Post-Transcriptional Control Processes

	Our GEMS and Other Discovery Technologies

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	Our Compound Library

	Integrated Research and Development Infrastructure

	Use of Pharmacodynamic Markers in Clinical Trials

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	•	Rapidly advance our lead programs. We are devoting a significant portion of our resources and business efforts to completing the development of our most advanced product candidates. We plan to complete our Phase 2 clinical trials of PTC124 for the treatment of cystic fibrosis and Duchenne muscular dystrophy and advance this product candidate into pivotal clinical trials as rapidly as possible. In addition, we believe that PTC124 may have applicability to a significant number of other genetic disorders for which a nonsense mutation is the cause of the disease. Similarly, we believe that PTC299, our anti-angiogenesis product candidate, may have potential to treat a range of solid tumor cancers as well as other diseases in which angiogenesis and VEGF overexpression play a role, such as age-related macular degeneration. We plan to pursue these additional potential commercial opportunities for PTC124 and PTC299 aggressively. For our genetic disorder program with PTC124, we are collaborating with patient advocacy groups, foundations and government agencies in order to obtain financial support, access to thought leaders and assistance in obtaining market acceptance of products that we successfully develop. We plan to pursue similar activities in other programs.
	•	Apply our integrated approach to continue to discover and develop small molecules that alter post-transcriptional control processes. We are applying several proprietary technologies, including GEMS, to the discovery and development of small molecules designed to exert therapeutic effects by altering post-transcriptional control processes. We have steadily enhanced these technologies, which span the key disciplines of biology, chemistry and pharmacology, over a number of years. Because post-transcriptional control processes offer many targets for therapeutic intervention and because drugs that alter these processes have the potential to both up-regulate and down-regulate protein production, we believe that our approach may be applicable to a broad range of diseases. We plan to continue to build our technologies for application in the field of post-transcriptional control processes and to apply these technologies in discovering and developing treatments in new therapeutic areas.
	•	Build a specialized sales and marketing infrastructure. We plan to establish our own sales and marketing capabilities. We expect to accomplish this initially by retaining commercial rights for our product candidates for which we receive marketing approvals in situations in which we believe it is possible to access the market through a focused, specialized sales force. For example, for PTC124, we believe that the pulmonologists and neurologists who are the key specialists in treating cystic fibrosis and Duchenne muscular dystrophy are sufficiently concentrated that we will be able to effectively promote the product with our own targeted sales force. For some situations in which we enter into commercial collaborations with third-party pharmaceutical and biotechnology companies, our goal will be to maintain co-promotion or co-commercialization rights in the United States and, in some cases, other markets, in order to further develop our internal sales and marketing capabilities.
	•	Selectively establish strategic alliances with leading pharmaceutical and biotechnology companies. For each of our product candidates, we plan to evaluate the merits of retaining commercialization rights for ourselves or entering into collaboration arrangements with leading pharmaceutical or biotechnology companies, such as our collaborations with Schering-Plough and Bausch & Lomb. Our decision to enter into additional collaboration arrangements will be based on such factors as anticipated development costs, therapeutic expertise and the commercial infrastructure required to

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		access a particular market. We generally plan to seek collaborators for the development and commercialization of product candidates that have high anticipated development costs or that are directed at indications for which a potential collaborator has a particular expertise or that involve markets that can be served more effectively by a large sales and marketing organization.

	Schering-Plough

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	•	the right to terminate the collaboration agreement upon prior written notice at any time after the third anniversary of the effective date of the agreement;
	•	the right to terminate the collaboration agreement if, during the research term, a third-party patent or patent application that could substantially interfere with compounds that we are pursuing under the research collaboration is granted or published in a major market and we are not able to mutually agree on an applicable course of action or obtain a non-infringement opinion with respect to such patent or patent application; and
	•	the right to terminate the research program or the collaboration agreement upon prior written notice if Schering-Plough has not accepted a development candidate within two years of the effective date of the agreement.

	Bausch & Lomb

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	Patents and Trade Secrets

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	License Agreements

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	•	PTC124 for cystic fibrosis. There are currently no approved therapeutics to treat the root causes of cystic fibrosis. Current treatments are designed to alleviate the symptoms of the disease and depend upon the stage of the disease and the organs involved. Clearing mucus from the lungs is an important part of the daily cystic fibrosis treatment regimen. Chest physical therapy is a form of airway clearance that involves vigorous clapping on the back and chest to dislodge the thick mucus from the lungs. Other treatments for cystic fibrosis include TOBI, an aerosolized antibiotic used to treat lung infections that is marketed by Chiron Corporation, Pulmozyme, a mucus-thinning drug shown to reduce the number of lung infections and improve lung function, that is marketed by Genentech, Inc., and azithromycin, an antibiotic recently proven to be effective in people with cystic fibrosis whose lungs are chronically infected with the common bacteria known as Pseudomonas aeruginosa. We believe that PTC124 is the only orally administered product candidate in clinical trials that is designed to treat the root cause of cystic fibrosis by restoring CFTR activity through the read through of a nonsense mutation. However, we are aware of other preclinical and clinical programs of third parties aimed at modulating CFTR function, including programs of Alnylam Pharmaceuticals, Inc. and Vertex Pharmaceuticals Incorporated. In addition, various other anti-inflammatory, anti-infective and mucus regulating product candidates are in clinical development.
	•	PTC124 for Duchenne muscular dystrophy. There are currently no approved therapeutics to treat the root causes of Duchenne muscular dystrophy. Current treatments seek to address symptoms through supportive care measures, such as bracing, joint stretching exercises, tendon release surgery, wheelchair use and assisted ventilation. Corticosteroids, such as prednisone and deflazacort are often prescribed to treat some of the symptoms of the disease. We believe that PTC124 is the only product candidate in clinical trials that is designed to treat the root cause of Duchenne muscular dystrophy by restoring dystrophin activity through the read through of a nonsense mutation. We are aware of early stage gene therapy programs of third parties targeting Duchenne muscular dystrophy. Various growth factors in development for other indications, including other forms of muscular dystrophy and amyotrophic lateral sclerosis, may, if approved, be used for the treatment of Duchenne muscular dystrophy. In addition, Wyeth has a potentially muscle-enhancing product candidate in Phase 2 clinical trials for muscular dystrophy.
	•	PTC299. If approved for the treatment of cancer, PTC299 would compete with numerous cancer therapies. Most notably, we expect that PTC299 would compete with other anti-angiogenesis therapies. These include Genentech’s Avastin and Bayer’s and Onyx’s Nexavar, which act by preventing VEGF from binding to its receptor, and Pfizer Inc.’s Sutent, a tyrosine kinase inhibitor. We are also aware of numerous other anti-angiogenesis cancer therapies in development by third parties, including the VEGF Trap, which is in development by Sanofi-Aventis and Regeneron.

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		However, we are not aware of any other product candidates that, like PTC299, are designed to prevent VEGF formation by targeting post-transcriptional control processes.
	•	HCV. The current standard of care for the treatment of HCV is the combination of interferon and ribavirin. In addition, there are numerous product candidates for the treatment of HCV in clinical development. These include product candidates of Idenix Pharmaceuticals, Inc. and Vertex Pharmaceuticals.

	United States Government Regulation

	The NDA Approval Process

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	•	completion of preclinical laboratory tests, animal studies and formulation studies under the FDA’s good laboratory practices regulations;
	•	submission to the FDA of an investigational new drug application, or IND, for human clinical testing, which must become effective before human clinical trials may begin and which must include independent Institutional Review Board, or IRB, approval at each clinical site before the trials may be initiated;
	•	performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication;
	•	submission to the FDA of an NDA;
	•	satisfactory completion of an FDA Advisory Committee review, if applicable;
	•	satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; and
	•	FDA review and approval of the NDA.

	•	evaluate dosage tolerance and appropriate dosage;
	•	identify possible adverse effects and safety risks; and
	•	provide a preliminary evaluation of the efficacy of the drug for specific indications.

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	Post-Approval Requirements

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	Orphan Drug Designation

	Fast Track Designation

	Regulation Outside the United States

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	•	our research and development programs;
	•	the design and implementation of our clinical trials;
	•	market opportunities from a clinical perspective;
	•	new technologies relevant to our research and development programs; and
	•	scientific and technical issues relevant to our business.

Name		Professional Affiliation
Allan Jacobson, Ph.D.		Chairman of the Department of Molecular Genetics and Microbiology, University of Massachusetts Medical School
Eric N. Jacobsen, Ph.D.		Professor, Department of Chemistry and Chemical Biology, Harvard University
Paul A. Marks, M.D.		President Emeritus and Head, Developmental Cell Biology Laboratory, Memorial Sloan-Kettering Cancer Center
Joseph Puglisi, Ph.D.		Professor and Chair, Department of Structural Biology and Director of the Stanford Magnetic Resonance Laboratory, Stanford University School of Medicine
Robert Schneider, Ph.D.		Professor, Department of Microbiology, Program in Microbiology, Cellular and Molecular Biology, Molecular Oncology and Immunology, and co-director of translational cancer research and breast cancer research programs, New York University School of Medicine
H. Lee Sweeney, Ph.D.		Professor and Chairman of Physiology, University of Pennsylvania School of Medicine
Marvin Wickens, Ph.D.		Professor of Biochemistry, University of Wisconsin-Madison; former President of the RNA Society

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Name		Age				Position
Stuart W. Peltz, Ph.D.			46			President and Chief Executive Officer and Director
William D. Ju, M.D.			49			Chief Operating Officer
Langdon Miller, M.D.			52			Chief Medical Officer
William Baird, III			34			Chief Financial Officer
John Babiak, Ph.D.			49			Senior Vice President, Drug Discovery Technologies
Mark E. Boulding			45			Senior Vice President and General Counsel
Michael Schmertzler			54			Chairman of the Board of Directors
Harvey Berger, M.D.			55			Director
Axel Bolte			34			Director
Søren Carlsen, Ph.D.			53			Director
Carl Goldfischer, M.D.			47			Director
Allan Jacobson, Ph.D.			60			Director
Michael Kranda			52			Director
David P. Southwell			45			Director

(1)	Member of the Audit Committee.
(2)	Member of the Compensation Committee.
(3)	Member of the Nominating and Corporate Governance Committee.

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	•	the class I directors will be                     ,                     and                     , and their term will expire at the annual meeting of stockholders to be held in 2007;
	•	the class II directors will be                     ,                    and                     , and their term will expire at the annual meeting of stockholders to be held in 2008; and

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	•	the class III directors will be                     and                     and their term will expire at the annual meeting of stockholders to be held in 2009.

	Audit Committee

	•	appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
	•	overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of certain reports from our independent registered public accounting firm;
	•	reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
	•	monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
	•	establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;
	•	meeting independently with our independent registered public accounting firm and management; and
	•	preparing the audit committee report required by Securities and Exchange Commission rules.

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	Compensation Committee

	•	reviewing and approving, or making recommendations to our board of directors with respect to, the compensation of our chief executive officer;
	•	overseeing the evaluation of performance of our senior executives;
	•	overseeing and administering, and making recommendations to our board of directors with respect to, our cash and equity incentive plans; and
	•	reviewing and making recommendations to the board of directors with respect to director compensation.

	Nominating and Corporate Governance Committee

	•	recommending to our board of directors the persons to be nominated for election as directors and to each of the board of director’s committees;
	•	overseeing an annual evaluation of management succession planning;
	•	developing and recommending to our board of directors corporate governance principles; and
	•	overseeing a periodic self-evaluation of our board of directors.

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															Long-Term
															Compensation
							Annual Compensation								Shares
															Underlying				All Other
Name and Principal Position			Year				Salary				Bonus				Options (#)				Compensation
Stuart W. Peltz, Ph.D.				2005			$	346,500			$	83,716	(1)			711,720	(2)			—
	President, Chief Executive Officer
	and Director
William D. Ju, M.D.				2005			$	277,160			$	50,107	(3)			84,814	(4)			—
	Chief Operating Officer
Langdon Miller, M.D.				2005			$	331,800			$	80,327	(5)			131,040	(6)		$	50,890	(7)
	Chief Medical Officer
John Babiak, Ph.D.				2005			$	240,240			$	43,304	(8)			95,090	(9)			—
	Senior Vice President, Drug Discovery Technologies
Mark E. Boulding				2005			$	250,120			$	45,084	(10)			97,290	(11)			—
	Senior Vice President and
	General Counsel

	(1)	Includes $42,099 that was paid in March 2006 as part of Dr. Peltz’s 2005 bonus.
	(2)	Includes options to purchase 16,410 shares of common stock granted in March 2006 as part of Dr. Peltz’s 2005 bonus.
	(3)	Includes $24,944 that was paid in March 2006 as part of Dr. Ju’s 2005 bonus.
	(4)	Includes options to purchase 12,150 shares of common stock granted in March 2006 as part of Dr. Ju’s 2005 bonus.
	(5)	Includes $40,313 that was paid in March 2006 as part of Dr. Miller’s 2005 bonus.
	(6)	Includes options to purchase 16,410 shares of common stock granted in March 2006 as part of Dr. Miller’s 2005 bonus.
	(7)	Represents the principal amount of and applicable interest on a loan made by us to Dr. Miller which was forgiven in 2005.
	(8)	Includes $21,621 that was paid in March 2006 as part of Dr. Babiak’s 2005 bonus.
	(9)	Includes options to purchase 12,150 shares of common stock granted in March 2006 as part of Dr. Babiak’s 2005 bonus.

(10)	Includes $22,510 that was paid in March 2006 as part of Mr. Boulding’s 2005 bonus.
(11)	Includes options to purchase 12,150 shares of common stock granted in March 2006 as part of Mr. Boulding’s 2005 bonus.

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																		Potential Realizable
																		Value
																		of Assumed
						Percentage												Annual Rates of
		Number of				of Total												Stock Price
		Securities				Options				Exercise								Appreciation
		Underlying				Granted to				Price								for Option Term(1)
		Options				Employees in				Per				Expiration
Name		Granted (#)				Fiscal Year				Share				Date				5% ($)				10% ($)
Stuart W. Peltz, Ph.D.			17,320				1	%		$	1.89				5/24/2015
			677,990				32				1.89				11/5/2014
William D. Ju, M.D.			12,830				1				1.89				5/24/2015
			4				*				1.89				6/14/2014
			59,830				3				1.89				11/5/2014
Langdon Miller, M.D.			17,320				1				1.89				5/24/2015
			97,310				5				1.89				11/5/2014
John Babiak, Ph.D.			12,830				1				1.89				5/24/2015
			70,110				3				1.89				11/5/2014
Mark E. Boulding			12,830				1				1.89				5/24/2015
			72,310				3				1.89				11/5/2014

*	Less than one percent.
(1)	The dollar amounts under these columns are the result of calculations at rates set by the Securities and Exchange Commission and, therefore, are not intended to forecast possible future appreciation, if any, in the price of the underlying common stock. The potential realizable values are calculated using the assumed initial public offering price of $           per share and assuming that the market price appreciates from this price at the indicated rate for the entire term of each option and that each option is exercised and sold on the last day of its term at the assumed appreciated price.

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										Number of Securities
										Underlying								Value of Unexercised
										Unexercised Options at								In-the-Money Options at
		Shares								December 31, 2005								December 31, 2005
		Acquired on				Value
Name		Exercise (#)				Realized				Exercisable				Unexercisable				Exercisable				Unexercisable
Stuart W. Peltz, Ph.D.			—				—				592,756				102,571
William D. Ju, M.D.			—				—				34,338				38,327
Langdon Miller, M.D.			—				—				55,773				58,862
John Babiak, Ph.D.			—				—				47,122				35,822
Mark E. Boulding			—				—				48,661				36,483

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	1998 Employee, Director and Consultant Stock Option Plan

	•	provide that the outstanding options under the 1998 stock option plan be assumed or substituted by the successor corporation;
	•	upon written notice to optionees, provide that all unexercised options will terminate, unless exercised, immediately prior to the consummation of such transaction; or
	•	provide that all or any of our outstanding options will terminate in exchange for a cash payment equal to their value.

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	2006 Equity and Long Term Incentive Plan

	•	the number of shares of common stock covered by options and the dates upon which the options become exercisable;
	•	the exercise price of options; provided, however, that the exercise price shall not be less than 100% of fair market value of the stock on the date of grant;
	•	the duration of options, provided that no option shall have a term in excess of 10 years;
	•	the method of payment of the exercise price; and
	•	the number of shares of common stock subject to any restricted stock or other stock-based awards and the terms and conditions of such awards, including conditions for repurchase, issue price and repurchase price.

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	•	whose customary employment is more than 20 hours per week for more than five months in a calendar year;
	•	who were employed by us for at least 90 days prior to enrolling, other than in connection with the initial plan period; and
	•	who are employed on the first day of a designated payroll deduction offering period

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	•	for any breach of their duty of loyalty to us or our stockholders;
	•	for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
	•	for voting or assenting to unlawful payments of dividends or other distributions; or
	•	for any transaction from which the director derived an improper personal benefit.

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		Number of Shares of				Number of Shares of
Name		Series E Preferred Stock				Series E-2 Preferred Stock
Entities affiliated with Credit Suisse(1)			35,699,539				890,854
HBM BioVentures (Cayman) Ltd.(2)			18,315,568				824,187
Vulcan Capital Venture Holdings Inc.(3)			16,708,349				330,650
Entities affiliated with Delphi Ventures(4)			13,493,914				275,482
Entities affiliated with Bay City Capital(5)			10,059,249				206,610
Novo A/S(6)			5,532,586				275,482
Total			99,806,205				2,803,265

(1)	Includes 27,879,539 shares of Series E convertible preferred stock and 695,712 shares of Series E-2 convertible preferred stock issued to Credit Suisse First Boston Equity Partners, L.P.; 7,793,048 shares of Series E convertible preferred stock and 194,469 shares of Series E-2 convertible preferred stock issued to Credit Suisse First Boston Equity Partners (Bermuda), L.P.; and 26,952 shares of Series E convertible preferred stock and 673 shares of Series E-2 convertible preferred stock issued to Credit Suisse First Boston U.S. Executive Advisors, L.P. Mr. Schmertzler, one of our directors, is a Managing Director of Aries Advisors, LLC, an affiliate of Credit Suisse.
(2)	Mr. Bolte, one of our directors, is an employee of HBM Partners AG. HBM Partners AG acts as an investment advisor to HBM BioVentures (Cayman) Ltd. HBM Partners (Cayman) Ltd. provides investment management services to HBM BioVentures (Cayman) Ltd. Neither HBM Partners AG nor Mr. Bolte have voting or investment power over the shares held by HBM BioVentures (Cayman) Ltd.
(3)	Mr. Kranda, one of our directors, is director of biotechnology venture investments at Vulcan Inc.
(4)	Includes 13,349,165 shares of Series E convertible preferred stock and 272,527 shares of Series E-2 convertible preferred stock issued to Delphi Ventures V, L.P.; and 144,749 shares of Series E convertible preferred stock and 2,955 shares of Series E-2 convertible preferred stock issued to Delphi BioInvestments V, L.P.
(5)	Includes 9,637,670 shares of Series E convertible preferred stock and 197,952 shares of Series E-2 convertible preferred stock issued to The Bay City Capital Fund III, L.P.; and 421,579 shares of Series E convertible preferred stock and 8,658 shares of Series E-2 convertible preferred stock issued to The Bay

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	City Capital Fund III Co-Investment Fund, L.P. Dr. Goldfischer, one of our directors, is a Managing Director of Bay City Capital LLC.

(6)	Dr. Carlsen, one of our directors, is managing partner of Novo Ventures, an affiliate of Novo A/S.

	Registration Rights

	Loan to Executive Officer

	Director Compensation

	Executive Compensation and Employment Agreements

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	•	each of our directors;
	•	each of our named executive officers;
	•	each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock; and
	•	all of our directors and executive officers as a group.

Percentage of

Shares

Beneficially Owned

Number of Shares

Before

After

Name and Address of Beneficial Owner

Beneficially Owned

Offering

Offering

5% Stockholders

Entities affiliated with Credit Suisse(1)

3,435,467

25.2

%

Eleven Madison Avenue, 16th Floor

New York, NY 10010

HBM BioVentures (Cayman) Ltd.(2)

2,017,840

14.9

Centennial Towers, 3rd Floor

2454 West Bay Road

Grand Cayman, Cayman Islands

Entities affiliated with Vulcan Venture Holdings Inc.(3)

1,904,527

14.1

505 Fifth Avenue South, Suite 900

Seattle, WA 98104

Entities affiliated with Delphi Ventures(4)

1,169,330

8.7

3000 Sand Hill Road, Building 1, Suite 135,

Menlo Park, CA 94025

Entities affiliated with the Bay City Capital Fund(5)

995,669

7.4

750 Battery Street, Suite 400

San Francisco, CA 94111

Novo A/S(6)

697,559

5.2

Krogshoejvej 41

2880 Bagsvaerd, Denmark

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Percentage of

Shares

Beneficially Owned

Number of Shares

Before

After

Name and Address of Beneficial Owner

Beneficially Owned

Offering

Offering

Executive Officers and Directors

Stuart W. Peltz, Ph.D.(7)

624,445

4.4

William D. Ju, M.D.(8)

47,173

*

Langdon Miller, M.D.(9)

75,151

*

John Babiak, Ph.D.(10)

59,420

*

Mark E. Boulding(11)

61,143

*

Michael Schmertzler(12)

2,751

*

Harvey Berger, M.D.(13)

460

*

Axel Bolte(14)

—

—

Søren Carlsen, Ph.D.(15)

1

*

Carl Goldfischer, M.D.(16)

1

*

Allan Jacobson, Ph.D.(17)

156,118

1.1

Michael Kranda(17)

—

—

David P. Southwell

1,250

*

All directors and executive officers as a group (14 persons)(19)

1,073,498

7.4

	*	Less than one percent.

	(1)	Consists of 2,662,259 shares held by Credit Suisse First Boston Equity Partners, L.P.; 744,169 shares held by Credit Suisse First Boston Equity Partners (Bermuda), L.P.; 2,573 shares held by Credit Suisse First Boston U.S. Executive Advisors, L.P.; 24,800 shares held by EMA Private Equity Fund 1999, L.P.; and 1,666 shares held by Credit Suisse First Boston Finders & Screeners, L.P. Mr. Schmertzler, a member of our board of directors, is a Managing Director of Aries Advisors, LLC, the sub-advisor to Credit Suisse First Boston Equity Partners, L.P., who disclaims beneficial ownership of the shares held by entities affiliated with Credit Suisse except to the extent of any pecuniary interest therein.
	(2)	Consists of 2,017,840 shares held by HBM BioVentures (Cayman) Ltd. The board of directors of HBM BioVentures (Cayman) Ltd. has sole voting and investment power with respect to the shares by held by such entity and acts by majority vote. The board of directors of HBM BioVentures (Cayman) Ltd. is comprised of John Arnold, Colin Shaw, Richard Coles, Dr. Andreas Wicki and John Urquhart, none of whom has individual voting or investment power with respect to such shares and each disclaims beneficial ownership of the shares held by HBM except to the extent of any pecuniary interest therein. Mr. Bolte, a member of our board of directors, is an employee of HBM Partners AG. HBM Partners AG acts as an investment advisor to HBM Partners (Cayman) Ltd. HBM Partners (Cayman) Ltd. provides investment management services to HBM BioVentures (Cayman) Ltd. Neither HBM Partners AG nor Mr. Bolte have voting or investment power over the shares held by HBM BioVentures (Cayman) Ltd.
	(3)	Consists of 330,650 shares held by Vulcan Capital Venture Holdings Inc. and 1,573,877 shares held by Vulcan Ventures Inc. Mr. Kranda, a member of our board of directors, is a Managing Director of Vulcan Ventures Inc. and is responsible for its biotech venture investments. Vulcan Capital Venture Holdings Inc. and Vulcan Ventures Inc. are wholly-owned by the sole stockholder of Vulcan Inc.
	(4)	Consists of 1,156,787 shares held by Delphi Ventures V, L.P. and 12,543 shares held by Delphi BioInvestments V, L.P.
	(5)	Consists of 953,944 shares held by The Bay City Capital Fund III, L.P. and 41,725 shares held by The Bay City Capital Fund III Co-Investment Fund, L.P. Dr. Goldfischer, a member of our board of directors, is a Managing Director of Bay City Capital LLC, and serves on Bay City Capital’s board of managers and investment committee. Bay City Capital LLC is the manager of the general partner of the above mentioned funds. Dr. Goldfischer disclaims beneficial ownership of the shares held by Bay City except to the extent of any pecuniary interest therein.

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	(6)	Novo A/S is a Danish private limited liability company fully owned by the Novo Nordisk Foundation. Dr. Carlsen, a member of our board of directors and is Managing Partner of Novo A/ S. Dr. Carlsen disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest arising as a result of his engagement with Novo A/ S.
	(7)	Consists of 624,417 shares issuable upon exercise of stock options exercisable within 60 days of March 15, 2006 and 28 shares of common stock.
	(8)	Consists of 47,173 shares issuable upon exercise of stock options exercisable within 60 days of March 15, 2006.
	(9)	Consists of 75,151 shares issuable upon exercise of stock options exercisable within 60 days of March 15, 2006.

(10)	Consists of 59,420 shares issuable upon exercise of stock options exercisable within 60 days of March 15, 2006.
(11)	Consists of 61,143 shares issuable upon exercise of stock options exercisable within 60 days of March 15, 2006.
(12)	Consists of 2,751 shares issuable upon exercise of stock options exercisable within 60 days of March 15, 2006. Mr. Schmertzler disclaims beneficial ownership of the shares held by Credit Suisse First Boston except to the extent of his pecuniary interest therein. See footnote 1.
(13)	Consists of 460 shares issuable upon exercise of stock options exercisable within 60 days of March 15, 2006.
(14)	Mr. Bolte disclaims beneficial ownership of the shares held by HBM BioVentures (Cayman) Ltd. except to the extent of his pecuniary interest therein. See footnote 2.
(15)	Dr. Carlsen disclaims beneficial ownership of the shares held by Novo A/S except to the extent of his pecuniary interest therein. See footnote 6.
(16)	Dr. Goldfischer disclaims beneficial ownership of the shares held by the Bay City Capital Fund except to the extent of his pecuniary interest therein. See footnote 5.
(17)	Consists of 156,093 shares issuable upon the exercise of stock options exercisable within 60 days of March 15, 2006 and 28 shares of common stock.
(18)	Mr. Kranda disclaims beneficial ownership of the shares held by Vulcan Ventures except to the extent of his pecuniary interest therein. See footnote 3.
(19)	Consists of 1,073,442 shares issuable upon the exercise of stock options exercisable within 60 days of March 15, 2006 and includes 56 shares of common stock.

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	•	11,889 shares of common stock outstanding held by 14 stockholders of record;
	•	750,000 shares of Series A convertible preferred stock that are convertible into 62,500 shares of common stock;
	•	187,500 shares of Series B convertible preferred stock that are convertible into 25,000 shares of common stock;
	•	6,000,000 shares of Series C convertible preferred stock that are convertible into 833,325 shares of common stock;
	•	13,095,769 shares of Series D convertible preferred stock that are convertible into 2,026,717 shares of common stock;
	•	125,740,607 shares of Series E convertible preferred stock that are convertible into 6,887,042 shares of common stock; and
	•	3,670,138 shares of Series E-2 convertible preferred stock that are convertible into 3,670,138 shares of common stock.

	•	options to purchase 2,340,715 shares of common stock at a weighted average exercise price of $2.40 per share;
	•	a warrant to purchase 77,380 shares of common stock at an exercise price of $21.00 per share;
	•	a warrant to purchase 295,000 shares of Series C preferred stock at an exercise price of $2.50 per share;
	•	warrants to purchase an aggregate of 674,166 shares of Series D preferred stock at an exercise price of $3.25 per share; and
	•	warrants to purchase an aggregate of 994,415 shares of Series E preferred stock at an exercise price of $.397644 per share.

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	Delaware Law

	Staggered Board

	Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations

	Super-Majority Voting

94

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	Demand and Form S-3 Registration Rights

	Incidental Registration Rights

	Limitations and Expenses

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	•	1% of the number of shares of our common stock then outstanding, which will equal approximately                      shares immediately after this offering, and
	•	the average weekly trading volume in our common stock on The Nasdaq National Market during the four calendar weeks preceding the date of filing of a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the sale.

	•	the person is not our affiliate and has not been our affiliate at any time during the three months preceding the sale; and
	•	the person has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than our affiliates.

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			Number of
Name			Shares
Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.
Pacific Growth Equities, LLC
	Total

		No				Full
		Exercise				Exercise
Per share		$				$
Total		$				$

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	•	offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for our common stock; or
	•	enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock;

	•	during the last 17 days of the 180-day restricted period we issue an earnings release or material news or a material event relating to our company occurs; or
	•	prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period,

	•	the sale of shares to the underwriters;
	•	the issuance by us of shares of common stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing;
	•	the grant of options or the issuance of shares of common stock by us pursuant to our equity plans described in this prospectus, provided that the recipient of the options or shares agrees to be subject to the restrictions described in this paragraph;
	•	the issuance by us of shares of common stock in connection with strategic transactions, such as collaboration or license agreements, provided that the recipient of the shares agrees to be subject to the restrictions described in this paragraph;
	•	transactions by any person other than us relating to shares of common stock or other securities acquired in open market transactions after the closing of the offering of the shares;
	•	transfers by any person other than us of shares of common stock or other securities as a bona fide gift; or
	•	distributions other than by us of shares of common stock or other securities to limited partners or stockholders;

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		Page
Report of Independent Registered Public Accounting Firm			F-2
Balance Sheets, December 31, 2004 and 2005, and Pro Forma December 31, 2005 (unaudited)			F-4
Statements of Operations, Years ended December 31, 2003, 2004, and 2005, and for the Period from March 31, 1998 (inception) to December 31, 2005			F-5
Statements of Stockholders’ Equity (Deficit) and Comprehensive Loss, Period from March 31, 1998 (inception) to December 31, 2005			F-6
Statements of Cash Flows, Years ended December 31, 2003, 2004, and 2005, and for the Period from March 31, 1998 (inception) to December 31, 2005			F-8
Notes to Financial Statements			F-9

F-1

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F-2

---

Table of Contents

F-3

---

Table of Contents

													Pro Forma
					2004				2005				2005
													(unaudited)
													(see note 2(u))
ASSETS
Current assets:
	Cash and cash equivalents				$	6,777,339			$	10,964,552			$	10,964,552
	Short-term investments					26,209,351				26,875,682				26,875,682
	Prepaid expenses and other current assets					721,941				1,136,755				1,136,755
			Total current assets			33,708,631				38,976,989				38,976,989
Fixed assets, net						5,205,361				4,701,786				4,701,786
Deposits and other assets						54,049				295,704				295,704
			Total assets		$	38,968,041				43,974,479				43,974,479
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	1,703,026			$	1,183,261			$	1,183,261
	Accrued expenses					1,500,875				2,710,366				2,710,366
	Current portion of long-term debt					924,516				477,808				477,808
	Deferred revenue					—				275,000				275,000
			Total current liabilities			4,128,417				4,646,435				4,646,435
Deferred rent						21,441				122,653				122,653
Long-term debt						204,975				804,473				804,473
			Total liabilities			4,354,833				5,573,561				5,573,561
Commitments and contingencies (note 9)
Stockholders’ equity:
	Preferred stock, $0.001 par value, authorized 153,407,582 shares;
		Series A convertible preferred stock, designated 750,000 shares issued and outstanding 750,000 shares actual (liquidation preference of $750,000); no shares issued and outstanding pro forma				750,000				750,000				—
		Series B convertible preferred stock, designated 187,500 shares issued and outstanding 187,500 shares actual (liquidation preference of $375,000); no shares issued and outstanding pro forma				364,524				364,524				—
		Series C convertible preferred stock, designated 6,295,000 shares issued and outstanding 6,000,000 shares actual (liquidation preference of $15,000,000); no shares issued and outstanding pro forma				14,117,089				14,117,089				—
		Series D convertible preferred stock, designated 13,800,000 shares issued and outstanding 13,095,769 shares actual (liquidation preference of $42,561,249); no shares issued and outstanding pro forma				39,282,460				39,282,460				—
		Series E convertible preferred stock, designated 128,242,850 shares issued and outstanding 125,740,607 shares actual (liquidation preference of $49,999,998); no shares issued and outstanding pro forma				49,048,047				49,048,047				—
		Series E-2 convertible preferred stock, designated 4,132,232 shares issued and outstanding 3,670,138 shares actual (liquidation preference of $26,645,187); no shares issued and outstanding pro forma				—				26,510,745				—
	Common stock, $0.001 par value; authorized 18,228,538 shares; issued and outstanding 68 shares at December 31, 2004 and 6,943 shares at December 31, 2005 and 13,511,665 issued and outstanding pro forma (unaudited)					—				7				13,512
	Additional paid-in capital					353,131				506,364				130,565,724
	Accumulated other comprehensive loss					(65,429	)			(33,972	)			(33,972	)
	Deficit accumulated during the development stage					(69,236,614	)			(92,144,346	)			(92,144,346	)
			Total stockholders’ equity			34,613,208				38,400,918				38,400,918
			Total liabilities and stockholders’ equity		$	38,968,041			$	43,974,479			$	43,974,479

F-4

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																Period from
																March 31, 1998
				Year Ended December 31,												(inception) to
																December 31,
				2003				2004				2005				2005
Revenues				$	756,101			$	1,606,076			$	4,966,779			$	7,668,956
Operating expenses:
	Research and development				17,694,414				20,070,231				21,122,934				76,970,532
	General and administrative				4,693,240				6,022,740				7,943,584				27,230,732
		Total operating expenses			22,387,654				26,092,971				29,066,518				104,201,264
		Loss from operations			(21,631,553	)			(24,486,895	)			(24,099,739	)			(96,532,308	)
Interest income					316,827				578,732				853,817				3,997,886
Interest expense					(358,022	)			(184,145	)			(140,647	)			(1,006,919	)
		Loss before tax benefit			(21,672,748	)			(24,092,308	)			(23,386,569	)			(93,541,341	)
Tax benefit					235,142				450,781				478,837				1,396,995
		Net loss allocable to common stockholders		$	(21,437,606	)		$	(23,641,527	)		$	(22,907,732	)		$	(92,144,346	)
Basic and diluted net loss per share allocable to common stockholders				$	(315,259	)		$	(347,670	)		$	(9,925	)
Shares used to compute basic and diluted net loss per share allocable to common stockholders					68				68				2,308
Pro forma basic and diluted net loss per common share (note 2(t)) (unaudited)												$	(2.11	)
Shares used to compute pro forma basic and diluted net loss per common share (note 2(t)) (unaudited)													10,831,634

F-5

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				Series A								Series B
				Convertible								Convertible								Series C Convertible								Series D Convertible								Series E Convertible
				Preferred Stock								Preferred Stock								Preferred Stock								Preferred Stock								Preferred Stock
				Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount
Initial capitalization, March 31, 1998					—			$	—				—			$	—				—			$	—				—			$	—				—			$	—
Issuance of common stock					—				—				—				—				—				—				—				—				—				—
Sale of Series A convertible preferred stock					750,000				750,000				—				—				—				—				—				—				—				—
Deferred compensation					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 1998					750,000				750,000				—				—				—				—				—				—				—				—
Deferred compensation					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 1999					750,000				750,000				—				—				—				—				—				—				—				—
Sales of Series B convertible preferred stock, net of issuance costs of $10,476					—				—				187,500				364,524				—				—				—				—				—				—
Sales of Series C convertible preferred stock, net of issuance costs of $882,911					—				—				—				—				6,000,000				14,117,089				—				—				—				—
Issuance of common stock					—				—				—				—				—				—				—				—				—				—
Deferred compensation					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized gain on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2000					750,000				750,000				187,500				364,524				6,000,000				14,117,089				—				—				—				—
Sales of Series D convertible preferred stock, net of issuance costs of $2,286,789					—				—				—				—				—				—				12,295,769				37,674,460				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized loss on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2001					750,000				750,000				187,500				364,524				6,000,000				14,117,089				12,295,769				37,674,460				—				—
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Amortization of deferred compensation					—				—				—				—				—				—				—				—				—				—
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 2002					750,000				750,000				187,500				364,524				6,000,000				14,117,089				12,295,769				37,674,460				—				—
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Issuance of options to consultants					—				—				—				—				—				—				—				—				—				—
Issuance of Series D convertible preferred stock in connection with the termination of collaboration agreement					—				—				—				—				—				—				800,000				1,608,000				—				—
Sales of Series E convertible preferred stock, net of issuance costs of $803,782					—				—				—				—				—				—				—				—				88,018,430				34,196,218
Net loss and comprehensive loss					—				—				—				—				—				—				—				—				—				—
Balance, December 31, 2003					750,000				750,000				187,500				364,524				6,000,000				14,117,089				13,095,769				39,282,460				88,018,430				34,196,218
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Warrants issued for in-process research and development					—				—				—				—				—				—				—				—				—				—
Sales of Series E convertible preferred stock, net of issuance costs of $148,169					—				—				—				—				—				—				—				—				37,722,177				14,851,829
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized loss on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2004					750,000				750,000				187,500				364,524				6,000,000				14,117,089				13,095,769				39,282,460				125,740,607				49,048,047
Exercise of stock options					—				—				—				—				—				—				—				—				—				—
Warrants issued for in-process research and development					—				—				—				—				—				—				—				—				—				—
Sales of Series E-2 convertible preferred stock, net of issuance costs of $134,441					—				—				—				—				—				—				—				—				—				—
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				—				—				—
	Unrealized gain on investments				—				—				—				—				—				—				—				—				—				—
		Total comprehensive loss
Balance, December 31, 2005					750,000			$	750,000				187,500			$	364,524				6,000,000			$	14,117,089				13,095,769			$	39,282,460				125,740,607			$	49,048,047

F-6

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Table of Contents

												Common Stock																Accumulated				Deficit
				Series E-2 Convertible																								Other				Accumulated				Total
				Preferred Stock																Additional								Comprehensive				During the				Stockholders’
																$0.001 Par				Paid-in				Deferred				Income				Development-				Equity
				Shares				Amount				Shares				Value				Capital				Compensation				(Loss)				Stage				(Deficit)
Initial capitalization, March 31, 1998					—			$	—				59			$	—			$	1,000			$	—			$	—			$	—			$	1,000
Issuance of common stock					—				—				2				—				42				—				—				—				42
Sale of Series A convertible preferred stock					—				—				—				—				—				—				—				—				750,000
Deferred compensation					—				—				—				—				197				(197	)			—				—				—
Amortization of deferred compensation					—				—				—				—				—				49				—				—				49
Net loss and comprehensive loss					—				—				—				—				—				—				—				(322,338	)			(322,338	)
Balance, December 31, 1998					—				—				61				—				1,239				(148	)			—				(322,338	)			428,753
Deferred compensation					—				—				—				—				197				(197	)			—				—				—
Amortization of deferred compensation					—				—				—				—				—				86				—				—				86
Net loss and comprehensive loss					—				—				—				—				—				—				—				(671,055	)			(671,055	)
Balance, December 31, 1999					—				—				61				—				1,436				(259	)			—				(993,393	)			(242,216	)
Sales of Series B convertible preferred stock, net of issuance costs of $10,476					—				—				—				—				—				—				—				—				364,524
Sales of Series C convertible preferred stock, net of issuance costs of $882,911					—				—				—				—				—				—				—				—				14,117,089
Issuance of common stock					—				—				1				—				7,812				—				—				—				7,812
Deferred compensation					—				—				—				—				98,381				(98,381	)			—				—				—
Amortization of deferred compensation					—				—				—				—				—				64,279				—				—				64,279
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(1,459,060	)			(1,459,060	)
	Unrealized gain on investments				—				—				—				—				—				—				10,313				—				10,313
		Total comprehensive loss																																			(1,448,747	)
Balance, December 31, 2000					—				—				62				—				107,629				(34,361	)			10,313				(2,452,453	)			12,862,741
Sales of Series D convertible preferred stock, net of issuance costs of $2,286,789					—				—				—				—				—				—				—				—				37,674,460
Amortization of deferred compensation					—				—				—				—				—				26,466				—				—				26,466
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(8,213,604	)			(8,213,604	)
	Unrealized loss on investments				—				—				—				—				—				—				(10,313	)			—				(10,313	)
		Total comprehensive loss																																			(8,223,917	)
Balance, December 31, 2001					—				—				62				—				107,629				(7,895	)			—				(10,666,057	)			42,339,750
Exercise of stock options					—				—				6				—				40,000				—				—				—				40,000
Amortization of deferred compensation					—				—				—				—				—				7,895				—				—				7,895
Net loss and comprehensive loss					—				—				—				—				—				—				—				(13,491,424	)			(13,491,424	)
Balance, December 31, 2002					—				—				68				—				147,629				—				—				(24,157,481	)			28,896,221
Exercise of stock options					—				—				—				—				775				—				—				—				775
Issuance of options to consultants					—				—				—				—				10,917				—				—				—				10,917
Issuance of Series D convertible preferred stock in connection with the termination of collaboration agreement					—				—				—				—				—				—				—				—				1,608,000
Sales of Series E convertible preferred stock, net of issuance costs of $803,782					—				—				—				—				—				—				—				—				34,196,218
Net loss and comprehensive loss					—				—				—				—				—				—				—				(21,437,606	)			(21,437,606	)
Balance, December 31, 2003					—				—				68				—				159,321				—				—				(45,595,087	)			43,274,525
Exercise of stock options					—				—				—				—				643				—				—				—				643
Warrants issued for in-process research and development					—				—				—				—				193,167				—				—				—				193,167
Sales of Series E convertible preferred stock, net of issuance costs of $148,169					—				—				—				—				—				—				—				—				14,851,829
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(23,641,527	)			(23,641,527	)
	Unrealized loss on investments				—				—				—				—				—				—				(65,429	)			—				(65,429	)
		Total comprehensive loss																																			(23,706,956	)
Balance, December 31, 2004					—				—				68				—				353,131				—				(65,429	)			(69,236,614	)			34,613,208
Exercise of stock options					—				—				6,875				7				12,986				—				—				—				12,993
Warrants issued for in-process research and development					—				—				—				—				140,247				—				—				—				140,247
Sales of Series E-2 convertible preferred stock, net of issuance costs of $134,441					3,670,138				26,510,745				—				—				—				—				—				—				26,510,745
Comprehensive loss:
	Net loss				—				—				—				—				—				—				—				(22,907,732	)			(22,907,732	)
	Unrealized gain on investments				—				—				—				—				—				—				31,457				—				31,457
		Total comprehensive loss																																			(22,876,275	)
Balance, December 31, 2005					3,670,138			$	26,510,745				6,943			$	7			$	506,364			$	—			$	(33,972	)		$	(92,144,346	)		$	38,400,918

F-7

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Table of Contents

																		Period from
																		March 31, 1998
						Year Ended December 31,												(inception) to
																		December 31,
						2003				2004				2005				2005
Cash flows from operating activities:
	Net loss allocable to common stockholders					$	(21,437,606	)		$	(23,641,527	)		$	(22,907,732	)		$	(92,144,346	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation and amortization					1,553,029				1,437,444				1,466,131				6,325,046
		In-process research and development charge					1,608,000				193,167				140,247				1,941,414
		Stock-based compensation expense					10,917				—				—				109,692
		Issuance of common stock for license					—				—				—				7,812
		Realized gain on investment					—				—				—				(10,314	)
		Gain on disposal of fixed assets					(2,768	)			—				—				(2,768	)
		Forgiveness of related-party loan					—				50,000				50,000				100,000
		Changes in operating assets and liabilities:
			Prepaid expenses and other current assets				157,788				(443,388	)			(414,814	)			(1,086,755	)
			Deposits and other assets				19,970				(5,617	)			(241,655	)			(295,704	)
			Accounts payable				376,275				565,409				(397,790	)			1,183,261
			Accrued expenses				1,513,238				(454,012	)			1,209,491				2,710,366
			Deferred rent				(24,185	)			(109,183	)			101,212				122,653
			Deferred revenue				—				—				275,000				275,000
				Net cash used in operating activities			(16,225,342	)			(22,407,707	)			(20,719,910	)			(80,764,643	)
Cash flows from investing activities:
	Purchases of fixed assets						(667,491	)			(1,120,810	)			(962,556	)			(11,039,173	)
	Purchases of investments						(11,038,405	)			(51,671,306	)			(34,741,738	)			(177,586,492	)
	Sales of investments						25,374,112				32,623,927				34,106,864				150,687,151
	Issuance of related-party loan						(50,000	)			(50,000	)			(50,000	)			(150,000	)
				Net cash used in investing activities			13,618,216				(20,218,189	)			(1,647,430	)			(38,088,514	)
Cash flows from financing activities:
	Proceeds from long-term debt						—				317,080				1,366,678				7,825,587
	Payments on long-term debt						(1,974,286	)			(1,866,128	)			(1,213,888	)			(6,528,196	)
	Proceeds from sale of Series A preferred stock						—				—				—				750,000
	Proceeds from sale of Series B preferred stock, net of issuance costs						—				—				—				364,524
	Proceeds from sale of Series C preferred stock, net of issuance costs						—				—				—				14,117,089
	Proceeds from sale of Series D preferred stock, net of issuance costs						—				—				—				37,674,460
	Proceeds from sale of Series E preferred stock, net of issuance costs						34,196,218				14,851,829				—				49,048,047
	Proceeds from sale of Series E-2 preferred stock, net of issuance costs						—				—				26,510,745				26,510,745
	Net proceeds from issuance of common stock						775				643				12,993				55,453
	(Payments on) proceeds from short-term borrowings						—				121,975				(121,975	)			—
				Net cash provided by financing activities			32,222,707				13,425,399				26,554,553				129,817,709
				Net increase (decrease) in cash and cash equivalents			29,615,581				(29,200,497	)			4,187,213				10,964,552
Cash and cash equivalents, beginning of period							6,362,255				35,977,836				6,777,339				—
Cash and cash equivalents, end of period						$	35,977,836			$	6,777,339			$	10,964,552			$	10,964,552
Supplemental disclosure:
	Cash paid for interest					$	358,022			$	186,434			$	138,770			$	1,007,331
	Unrealized gain (loss) on investments						—				(65,429	)			31,457				(33,972	)
	Issuance of Series D preferred stock for in-process research and development						1,608,000				—				—				1,608,000
	Issuance of warrants for in-process research and development						—				193,167				140,247				333,414
	Acquisition of fixed assets through capital leases						—				—				—				15,110

F-8

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Table of Contents

(1)	The Company

(2)	Summary of Significant Accounting Policies

F-9

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Table of Contents

				December 31, 2004
								Unrealized
																Estimated
				Cost				Gains				Losses				Fair Value
December 31, 2004:
	Commercial paper			$	996,657			$	—			$	(617	)		$	996,040
	U.S. corporate debt securities				23,089,766				—				(64,745	)			23,025,021
	U.S. government debt securities				2,188,357				35				(102	)			2,188,290
		Total short-term investments		$	26,274,780			$	35			$	(65,464	)		$	26,209,351

				December 31, 2005
								Unrealized
																Estimated
				Cost				Gains				Losses				Fair Value
December 31, 2005:
	Commercial paper			$	1,497,124			$	—			$	—			$	1,497,124
	U.S. corporate debt securities				25,412,530				—				(33,972	)			25,378,558
		Total short-term investments		$	26,909,654			$	—			$	(33,972	)		$	26,875,682

(d)	Depreciation and Amortization

Lab leasehold improvements			7 years
Computer equipment and software			3 years
Furniture, fixtures and lab equipment			3 to 7 years
Leasehold improvements			7 years

(e)	Concentration of Credit Risk

F-10

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Table of Contents

(f)	Deferred Rent

(g)	Revenue Recognition

(h)	Research and Development Costs

(i)	Fair Value of Financial Instruments

(j)	Impairment of Long-Lived Assets

F-11

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Table of Contents

(k)	Stock-Based Compensation

														Period from
														March 31,
														1998
		Year Ended December 31,												(inception) to
														December 31,
		2003				2004				2005				2005
Net loss allocable to common stockholders, as reported		$	(21,437,606	)		$	(23,641,527	)		$	(22,907,732	)		$	(92,144,346	)
Deduct total stock-based employee compensation expense determined under fair-value-based method for all awards			(33,656	)			(25,603	)			(464,570	)			(594,563	)
Pro forma net loss allocable to common stockholders		$	(21,471,262	)		$	(23,667,130	)		$	(23,372,302	)		$	(92,738,909	)
Basic and diluted net loss per share allocable to common stockholders, as reported		$	(315,259	)		$	(347,670	)		$	(9,925	)
Pro forma basic and diluted loss per share allocable to common stockholders		$	(315,754	)		$	(348,046	)		$	(10,127	)

		2003				2005
Risk-free interest rate			2.53	%			3.62	%
Expected life			5				5
Dividend yield			0	%			0	%
Expected volatility			0	%			0	%

F-12

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Table of Contents

(l)	Income Taxes

(m)	Recently Issued Accounting Standards

(n)	Segment Information

F-13

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Table of Contents

(o)	Restatement

(p)	Reclassifications

(q)	Advertising Costs

(r)	Patent Costs

(s)	Net Loss per Share

(t)	Pro Forma Net Loss per Share (Unaudited)

F-14

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Table of Contents

			Year Ended
			December 31,
			2005
			(unaudited)
Net loss allocable to common stockholders			$	(22,907,732	)
Weighted average shares used in computing basic and diluted net loss per share				2,308
Basic and diluted net loss per common share			$	(9,925	)
Pro forma (unaudited):
	Shares used above			2,308
	Pro forma adjustment to reflect weighted effect of assumed conversion of convertible preferred stock			10,829,326
	Shares used in computing pro forma basic and diluted net loss per common share			10,831,634
	Pro forma basic and diluted net loss per common share (unaudited)		$	(2.11	)

(u)	Pro Forma Balance Sheet (Unaudited)

(3)	Income Taxes

				2003								2004								2005
				Amount				%				Amount				%				Amount				%
U.S. Federal statutory tax				$	(7,288,786	)			(34.0	)%		$	(8,191,385	)			(34.0	)%		$	(7,951,433	)			(34.0	)%
Add (deduct):
	Sale of state net operating losses				(235,142	)			(1.1	)			(450,781	)			(1.9	)			(478,837	)			(2.0	)
	State tax benefit on deferred taxes				—				—				(2,817,428	)			(11.7	)			(2,895,164	)			(12.4	)
	Federal research and development credits				(782,985	)			(3.7	)			(910,000	)			(3.8	)			(1,119,567	)			(4.8	)
	Change in valuation allowance				8,060,518				37.6				11,903,786				49.4				11,927,854				51.0
	Other net				11,253				0.1				15,027				0.1				38,310				0.2
		Tax benefit		$	(235,142	)			(1.1	)%		$	(450,781	)			(1.9	)%		$	(478,837	)			(2.0	)%

F-15

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Table of Contents

				2004				2005
Deferred tax assets
	Amortization			$	197,739			$	185,447
	Accruals				86,416				186,250
	Federal tax credits				2,592,037				3,711,604
	State tax credits				1,959,903				2,825,245
	Federal net operating losses				15,399,753				18,178,386
	State net operating losses				3,874,728				4,554,412
	Capitalized research and development costs				9,541,084				15,625,393
	Other				125,317				217,901
					33,776,977				45,484,638
	Valuation allowance				(33,522,215	)			(45,450,069	)
		Total assets			254,762				34,569
Deferred tax liabilities:
	Depreciation				(254,762	)			(34,569	)
		Total liabilities			(254,762	)			(34,569	)
		Net deferred tax asset		$	—			$	—

F-16

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Table of Contents

(4)	Fixed Assets, Net

		2004				2005
Lab leasehold improvements		$	1,763,281			$	1,763,281
Computer equipment and software			1,629,726				1,766,827
Furniture and fixtures and lab equipment			5,603,508				6,190,666
Leasehold improvements			802,785				1,011,723
Construction in progress			249,733				279,092
			10,049,033				11,011,589
Less accumulated depreciation			(4,843,672	)			(6,309,803	)
		$	5,205,361			$	4,701,786

(5)	Accrued Expenses

		2004				2005
Employee compensation, benefits, and related accruals		$	832,070			$	1,113,030
Consulting and contracted research			390,299				710,028
Professional fees			175,727				607,387
Other			102,779				279,921
		$	1,500,875			$	2,710,366

(6)	Long-Term Debt

F-17

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Table of Contents

2006		$	477,808
2007			512,712
2008			261,122
2009			30,639
		$	1,282,281

(7)	Stockholders’ Equity

F-18

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Table of Contents

(d)	Warrants

F-19

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Table of Contents

(8)	Stock Option Plan

											Weighted
											Average
			Number of				Exercise				Exercise
			Shares				Price				Price
Outstanding at March 31, 1998 (inception)				—			$	—			$	—
	Granted			88				3,000-9,900				8,225.00
	Exercised			(7	)			6,000-7,500				6,005.00
	Forfeited			(12	)			6,000-9,900				6,809.00
Outstanding at December 31, 2002				69				3,000-9,900				8,692.00
	Granted			25				9,900				9,900.00
	Exercised			—				—				—
	Forfeited			(1	)			9,900				9,900.00
Outstanding at December 31, 2003				93				3,000-9,900				9,010.25
	Granted			—				—				—
	Exercised			—				—				—
	Forfeited			—				—				—
Outstanding at December 31, 2004				93				3,000-9,900				9,010.25
	Granted			2,106,803				1.89				1.89
	Exercised			(6,875	)			1.89				1.89
	Forfeited			(35,063	)			1.89-9,900				3.04
Outstanding at December 31, 2005				2,064,958				1.89-9,900				2.28
Exercisable at December 31, 2005				1,379,159			$	1.89-9,900			$	2.42

F-20

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Table of Contents

										Weighted
						Weighted				Average								Weighted
		Number of				Average				Remaining				Number of				Average
Exercise		Options				Exercise				Contractual				Options				Exercise
Price Range		Outstanding				Price				Life in Years				Exercisable				Price
$3,000-9,900			89			$	8,145.65				6.21				81			$	8,910.14
1.89			2,064,869				1.89				8.91				1,379,078				1.89
			2,064,958												1,379,159

(9)	Commitments and Contingencies

	(b) University of Medicine and Dentistry of New Jersey Research, Option and License Agreement

F-21

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Table of Contents

(c)	Consulting Agreements

(d)	Operating Leases

2006		$	383,688
2007			393,763
2008			391,302
2009			169,688
		$	1,338,441

	(e) Related-Party Transactions

	(f) 401(k) Plans

F-22

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Item 13.	Other Expenses of Issuance and Distribution

			Amount
Securities and Exchange Commission registration fee			$	9,229
National Association of Securities Dealers Inc. fee				9,125
Nasdaq Stock Market listing fee				*
Accountants’ fees and expenses				*
Legal fees and expenses				*
Blue Sky fees and expenses				*
Transfer Agent’s fees and expenses				*
Printing and engraving expenses				*
Miscellaneous				*
	Total expenses		$	*

*	To be filed by amendment.

Item 14.	Indemnification of Directors and Officers

II-1

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Table of Contents

Item 15.	Recent Sales of Unregistered Securities

II-2

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Table of Contents

	(a) Issuances of Securities

	1.     In December 2003 and in April and June 2004, the Registrant issued an aggregate of 125,740,607 shares of Series E convertible preferred stock at a price of $.397644 per share, together with warrants to purchase an aggregate of 994,415 shares of Series E convertible preferred stock with an exercise price of $.397644 per share to institutional investors, including Credit Suisse Entities, HBM BioVentures (Cayman) Ltd., Vulcan Capital Venture Holdings Inc., Delphi Ventures Entities, Bay City Capital Entities, Novo A/ S and Three Crowns Capital (Bermuda) Ltd., for aggregate cash proceeds of approximately $50.0 million.
	2.     In September and October 2005, the Registrant issued an aggregate of 3,670,138 shares of Series E-2 convertible preferred stock at a price of $7.26 per share to institutional investors, including Credit Suisse Entities, HBM BioVentures (Cayman) Ltd., Vulcan Capital Venture Holdings Inc., Delphi Ventures Entities, Bay City Capital Entities and Novo A/ S, for aggregate cash proceeds of approximately $26.6 million.
	3.     In the first quarter of 2004, we issued to General Electric Capital Corporation a warrant to purchase 59,378 shares of our series D convertible preferred stock in exchange for the cancellation of a previously issued warrant to purchase shares of our common stock.

	(b) Stock Option Grants

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Table of Contents

Item 16.	Exhibits and Financial Statement Schedules

	(a) Exhibits

Exhibit
Number				Description
	1	.1*		Form of Underwriting Agreement.
	3	.1		Restated Certificate of Incorporation of the Registrant.
	3	.2*		Form of Restated Certificate of Incorporation of the Registrant to be effective upon closing of the offering.
	3	.3		Amended and Restated Bylaws of the Registrant.
	3	.4*		Form of Amended and Restated Bylaws of the Registrant to be effective upon the closing of the offering.
	4	.1*		Specimen Stock Certificate evidencing shares of common stock.
	4	.2		Fifth Amended and Restated Investor Rights Agreement, dated as of September 21, 2005, by and among the Registrant and the other parties named therein.
	4	.3		Warrant to Purchase Shares of Series C Convertible Preferred Stock, dated May 26, 2000, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.4		Warrant to Purchase Shares of Common Stock, dated March 15, 2001, issued to Silicon Valley Bank.
	4	.5		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 17, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.6		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 28, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.7		Warrant to Purchase Shares of Series D Convertible Preferred Stock issued to General Electric Capital Corporation.
	4	.8		Warrant to Purchase Shares of Common Stock, dated December 6, 2002, issued to Tularik Inc.
	4	.9		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated December 19, 2003, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.10		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated April 21, 2004, issued Three Crowns Capital (Bermuda) Ltd.
	5	.1*		Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.
	10	.1		Sixth Amended and Restated 1998 Employee, Director and Consultant Stock Option Plan.
	10	.2*		2006 Equity and Long Term Incentive Plan.
	10	.3*		2006 Employee Stock Purchase Plan.
	10	.4┴		Research Collaboration and Exclusive Option Agreement, dated as of December 1, 2005, by and between Bausch & Lomb Incorporated and the Registrant.
	10	.5┴		Collaboration and License Agreement, dated as of March 17, 2006, by and between the Registrant and Essex Chemie AG, a wholly owned subsidiary of Schering-Plough Corporation.
	10	.6*		Employment Agreement, dated as of August 1, 2002, between the Registrant and Stuart W. Peltz, Ph.D.
	10	.7*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William D. Ju, M.D.
	10	.8*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Langdon Miller, M.D.
	10	.9*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William Baird, III.
	10	.10*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and John Babiak, Ph.D.
	10	.11*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Mark E. Boulding.
	10	.12		Lease Agreement, dated July 14, 2000, between the Registrant and 46.24 Associates L.P., as amended.
	10	.13		Master Security Agreement, dated as of July 30, 2004, between the Registrant and Oxford Finance Corporation.

II-4

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Table of Contents

Exhibit
Number				Description
	10	.14		Form of Promissory Note issued to Oxford Finance Corporation.
	23	.1		Consent of KPMG LLP.
	23	.2*		Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5.1).
	24	.1		Powers of Attorney (included on signature page).

	*	To be filed by amendment.

┴	Confidential treatment requested as to portions of the exhibit. Confidential portions omitted and filed separately with the Securities and Exchange Commission.

	(b) Financial Statement Schedules

Item 17.	Undertakings

	(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
	(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

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Table of Contents

	PTC THERAPEUTICS, INC.

	By:	/s/ Stuart W. Peltz

	Stuart W. Peltz, Ph.D.
	President and Chief Executive Officer

Signature				Title		Date
/s/ Stuart W. Peltz Stuart W. Peltz, Ph.D.				President, Chief Executive Officer and Director (Principal Executive Officer)		March 31, 2006
/s/ William Baird, III William Baird, III				Chief Financial Officer (Principal Financial and Accounting Officer)		March 31, 2006
/s/ Michael Schmertzler Michael Schmertzler				Chairman of the Board of Directors		March 31, 2006
/s/ Harvey Berger Harvey Berger, M.D.				Director		March 31, 2006
/s/ Axel Bolte Axel Bolte				Director		March 31, 2006
/s/ Søren Carlsen Søren Carlsen, Ph.D.				Director		March 31, 2006
/s/ Carl Goldfischer Carl Goldfischer, M.D.				Director		March 31, 2006
/s/ Allan Jacobson Allan Jacobson, Ph.D.				Director		March 31, 2006
/s/ Michael Kranda Michael Kranda				Director		March 31, 2006
/s/ David P. Southwell David P. Southwell				Director		March 31, 2006

II-6

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Table of Contents

Exhibit
Number				Description
	1	.1*		Form of Underwriting Agreement.
	3	.1		Restated Certificate of Incorporation of the Registrant.
	3	.2*		Form of Restated Certificate of Incorporation of the Registrant to be effective upon closing of the offering.
	3	.3		Amended and Restated Bylaws of the Registrant.
	3	.4*		Form of Amended and Restated Bylaws of the Registrant to be effective upon the closing of the offering.
	4	.1*		Specimen Stock Certificate evidencing shares of common stock.
	4	.2		Fifth Amended and Restated Investor Rights Agreement, dated as of September 21, 2005, by and among the Registrant and the other parties named therein.
	4	.3		Warrant to Purchase Shares of Series C Convertible Preferred Stock, dated May 26, 2000, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.4		Warrant to Purchase Shares of Common Stock, dated March 15, 2001, issued to Silicon Valley Bank.
	4	.5		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 17, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.6		Warrant to Purchase Shares of Series D Convertible Preferred Stock, dated August 28, 2001, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.7		Warrant to Purchase Shares of Series D Convertible Preferred Stock issued to General Electric Capital Corporation.
	4	.8		Warrant to Purchase Shares of Common Stock, dated December 6, 2002, issued to Tularik Inc.
	4	.9		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated December 19, 2003, issued to Three Crowns Capital (Bermuda) Ltd.
	4	.10		Warrant to Purchase Shares of Series E Convertible Preferred Stock, dated April 21, 2004, issued Three Crowns Capital (Bermuda) Ltd.
	5	.1*		Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.
	10	.1		Sixth Amended and Restated 1998 Employee, Director and Consultant Stock Option Plan.
	10	.2*		2006 Equity and Long Term Incentive Plan.
	10	.3*		2006 Employee Stock Purchase Plan.
	10	.4┴		Research Collaboration and Exclusive Option Agreement, dated as of December 1, 2005, by and between Bausch & Lomb Incorporated and the Registrant.
	10	.5┴		Collaboration and License Agreement, dated as of March 17, 2006, by and between the Registrant and Essex Chemie AG, a wholly owned subsidiary of Schering-Plough Corporation.
	10	.6*		Employment Agreement, dated as of August 1, 2002, between the Registrant and Stuart W. Peltz, Ph.D.
	10	.7*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William D. Ju, M.D.
	10	.8*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Langdon Miller, M.D.
	10	.9*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and William Baird, III.
	10	.10*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and John Babiak, Ph.D.
	10	.11*		Executive Employment Agreement, dated as of December 15, 2004, between the Registrant and Mark E. Boulding.
	10	.12		Lease Agreement, dated July 14, 2000, between the Registrant and 46.24 Associates L.P., as amended.
	10	.13		Master Security Agreement, dated as of July 30, 2004, between the Registrant and Oxford Finance Corporation.
	10	.14		Form of Promissory Note issued to Oxford Finance Corporation.
	23	.1		Consent of KPMG LLP.

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Table of Contents

Exhibit
Number				Description
	23	.2*		Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5.1).
	24	.1		Powers of Attorney (included on signature page).

	*	To be filed by amendment.

┴	Confidential treatment requested as to portions of the exhibit. Confidential portions omitted and filed separately with the Securities and Exchange Commission.

                                                                     Exhibit 3.1

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                             PTC THERAPEUTICS, INC.

    (Pursuant to Sections 242 and 245 of the General Corporation Law of the
                               State of Delaware)

          PTC Therapeutics, Inc., a Delaware corporation, hereby certifies as
follows:

     1. The name of the corporation is PTC Therapeutics, Inc. (the
"Corporation"). The date of filing of the original Certificate of Incorporation
of the Corporation with the Secretary of State of the State of Delaware was
March 31, 1998.

     2. This Restated Certificate of Incorporation amends, restates and
integrates the provisions of said Certificate of Incorporation, as heretofore
amended, supplemented or restated, of said Corporation, and has been duly
adopted pursuant to a resolution adopted by the Board of Directors, and by not
less than a majority of all of the outstanding shares of stock of the
Corporation, acting by written consent in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware. Written
notice of the taking of such action has been given in accordance with Section
228(e) of the General Corporation Law of the State of Delaware.

          The text of the Certificate of Incorporation is hereby amended and
restated to read in full as follows:

     FIRST The name of the Corporation is:

                             PTC THERAPEUTICS, INC.

     SECOND The address, including street, number, city, and county, of the
registered office of the Corporation in the State of Delaware is 2711
Centerville Road, Suite 400, City of Wilmington, County of New Castle; and the
name of the registered agent of the Corporation in the State of Delaware is
Corporation Service Company.

     THIRD The nature of the business to be conducted and the purposes of the
Corporation are:

          To purchase or otherwise acquire, invest in, own, lease, mortgage,
pledge, sell, assign and transfer or otherwise dispose of, trade and deal in and
with real property and personal property of every kind, class and description
(including, without limitation, goods, wares and merchandise of every kind,
class and description), to manufacture goods, wares and merchandise of every
kind, class and description, both on its own account and for others;

          To make and perform agreements and contracts of every kind and
description; and



          Generally to engage in any lawful act or activity or carry on any
business for which corporations may be organized under the Delaware General
Corporation Law or any successor statute.

     FOURTH The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 171,636,120, consisting of:

          18,228,538 shares of Common Stock, Zero Dollars and One Tenth Cent
($0.001) Par Value per share (the "Common Stock"); and

          A. 153,407,582 shares of preferred stock, Zero Dollars and One Tenth
Cent ($0.001) Par Value per share (the "Preferred Stock"), 750,000 shares of
which have been designated as Series A Convertible Preferred Stock ("Series A
Preferred Stock"), 187,500 shares of which have been designated as Series B
Convertible Preferred Stock ("Series B Preferred Stock"), 6,295,000 shares of
which have been designated as Series C Convertible Preferred Stock ("Series C
Preferred Stock"), 13,800,000 shares of which have been designated as Series D
Preferred Stock ("Series D Preferred Stock"), 128,242,850 shares of which have
been designated as Series E Convertible Preferred Stock ("Series E Preferred
Stock") and 4,132,232 shares of which have been designated as Series E-2
Convertible Preferred Stock ("Series E-2 Preferred Stock"). The Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock and Series E-2 Preferred Stock are
collectively hereinafter referred to as the "Designated Preferred Stock".

          B. Common Stock.

          1. General. The voting, dividend and liquidation and other rights of
the holders of the Common Stock are expressly made subject to and qualified by
the rights of the holders of any series of Designated Preferred Stock.

          2. Voting Rights. The holders of record of the Common Stock are
entitled to one vote per share on all matters to be voted on by the
Corporation's stockholders.

          3. Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor if, as and when determined by the Board
of Directors in their sole discretion, subject to provisions of law, any
provision of this Restated Certificate of Incorporation, as amended from time to
time, and subject to the relative rights and preferences of any shares of
Designated Preferred Stock authorized, issued and outstanding hereunder.

          4. Liquidation. Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, holders of record of the Common
Stock will be entitled to receive pro rata all assets of the Corporation
available for distribution to its stockholders, subject, however, to the
liquidation rights of the holders of Designated Preferred Stock authorized,
issued and outstanding hereunder.


                                       2



          5. Reverse Stock Split. For the avoidance of doubt, this Fourth
Section, Subsection B reflects a reverse stock split of the Common Stock in
which each 30,000 authorized shares were converted and combined into one share
of the Corporation's Common Stock (the "Reverse Stock Split"). The Reverse Stock
Split was effectuated by the Company in a Certificate of Amendment of the
Restated Certificate of Incorporation filed with the Secretary of State of the
State of Delaware on December 29, 2004.

          C. Preferred Stock.

          The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of shares of Preferred Stock in
series, and by filing a certificate pursuant to the applicable law of the State
of Delaware (such certificate being hereafter referred to as a "Preferred Stock
Designation"), to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers, preferences
and rights of the shares of each such series and any qualifications, limitations
or restrictions thereof. In the event that at any time the Board of Directors
shall have established and designated one or more series of Preferred Stock
consisting of a number of shares less than all of the authorized number of
shares of Preferred Stock, the remaining authorized shares of Preferred Stock
shall be deemed to be shares of an undesignated series of Preferred Stock unless
and until designated by the Board of Directors as being part of a series
previously established or a new series then being established by the Board of
Directors. Notwithstanding the fixing of the number of shares constituting a
particular series of Preferred Stock (other than the Designated Preferred
Stock), the Board of Directors may at any time thereafter authorize an increase
or decrease in the number of shares of any such series except as set forth in
the Preferred Stock Designation for such series. In case the number of shares of
any series of Preferred Stock shall be so decreased, the shares constituting
such decrease shall resume the status of authorized undesignated Preferred Stock
unless and until designated by the Board of Directors as being a part of a
series previously established or a new series then being established by the
Board of Directors. The number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock and the affirmative vote of the holders of a
majority of the outstanding Designated Preferred Stock, voting together as a
single class on an as-converted to Common Stock basis. The date of the first
issuance of Series E-2 Preferred Stock pursuant to the Subscription Agreement,
dated September 21, 2005, by and among the Corporation and the other signatories
thereto (the "Subscription Agreement"), after giving effect thereto, is
hereinafter referred to as the "Effective Date".

          D. Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series
E-2 Preferred Stock.

          1. Liquidation, Dissolution or Winding Up; Certain Mergers,
Consolidations and Asset Sales.


                                       3



          (a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, (together with a Reorganization as
defined in Article FOURTH, D Section 1(c) herein, each such event, a
"Liquidation Event"), the holders of shares of Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Series E-2 Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders, before any payment shall be made to the
holders of Common Stock or any other class or series of stock ranking on
liquidation junior to the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or
Series E-2 Preferred Stock (such Common Stock and other stock being collectively
referred to as "Junior Stock") by reason of their ownership thereof, an amount
equal to $1.00 per share in the case of the Series A Preferred Stock, $2.00 per
share in the case of the Series B Preferred Stock, $2.50 per share in the case
of the Series C Preferred Stock, $3.25 per share in the case of the Series D
Preferred Stock, $0.397644 in the case of the Series E Preferred Stock and $7.26
in the case of the Series E-2 Preferred Stock, (in each case subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares), plus any
dividends declared but unpaid on such shares. If, upon any Liquidation Event,
the remaining assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock and Series E-2 Preferred Stock the
full amount to which they shall be entitled, the remaining assets and funds of
the Corporation legally available for distribution shall be distributed first,
ratably among the holders of shares of Series E Preferred Stock and Series E-2
Preferred Stock in proportion to the respective amounts which would otherwise be
payable in respect of the shares of Series E Preferred Stock and Series E-2
Preferred Stock held by them upon such distribution if all amounts payable on or
with respect to such shares were paid in full, second, ratably among the holders
of shares of Series D Preferred Stock in proportion to the respective amounts
which would otherwise be payable in respect of the shares of Series D Preferred
Stock held by them upon such distribution if all amounts payable on or with
respect to such shares were paid in full and, third, ratably among the holders
of shares of Series A Preferred Stock, the Series B Preferred Stock and Series C
Preferred Stock and any class or series of stock ranking on a parity as to
liquidation with the Series A Preferred Stock, the Series B Preferred Stock and
the Series C Preferred Stock in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.

          (b) After the payment of all preferential amounts required to be paid
to the holders of Designated Preferred Stock, as set forth in Section 1(a)
above, upon a Liquidation Event, the holders of shares of Junior Stock then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its stockholders.

          (c) A Reorganization (as defined below) shall be regarded as a
liquidation, dissolution or winding up of the affairs of the Corporation within
the meaning of this Section 1. For the purposes hereof, a "Reorganization" shall
mean a capital reorganization of the Common


                                       4



Stock (other than a subdivision, combination, recapitalization, reclassification
or exchange of shares provided for elsewhere in Section 2) or a consolidation or
merger of the Corporation, or a sale, lease or other disposition of all or
substantially all of the assets or intellectual property of the Corporation,
other than a reorganization, merger or consolidation of the Corporation in a
transaction in which the shareholders of the Corporation immediately prior to
the transaction possess more than 50% of the voting power of the surviving
entity (or parent, if any) immediately after the transaction. Notwithstanding
the foregoing, a Reorganization, as defined herein, shall not include any
reorganization, merger or consolidation involving (1) only a change in the state
of incorporation of the Corporation, (2) a merger of the Corporation with or
into a wholly-owned subsidiary of the Corporation which is incorporated in the
United States of America, or (3) an acquisition by the Corporation through a
merger, reorganization or consolidation, in which the Corporation is
substantively the surviving corporation and operates as a going concern, of
another corporation which is incorporated in the United States of America and
which is engaged in a business similar to or related to the business of the
Corporation and which does not involve a change in the terms of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock, the Series E Preferred Stock, the Series E-2 Preferred
Stock or of the Common Stock and of which the stockholders of the Corporation
immediately prior to such acquisition possess at least 51% of the voting power
of the surviving entity immediately following the consummation of such
acquisition.

          2. Conversion. The holders of Designated Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):

          (a) Right to Convert; Conversion Price.

               (i) Each share of Series A Preferred Stock shall be convertible,
without the payment of any additional consideration by the holder thereof and at
the option of the holder thereof, at any time after the date of issuance of such
share, at the office of the Corporation or any transfer agent for the Series A
Preferred Stock, into such number of fully paid and non-assessable shares of
Common Stock as is determined by dividing $1.00 by the relevant Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
The Conversion Price for purposes of calculating the number of shares of Common
Stock deliverable upon conversion without the payment of any additional
consideration by the holder of Series A Preferred Stock (the "Series A
Conversion Price") shall be $12.00 as of the Effective Date. Such Series A
Conversion Price shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Series A Preferred Stock is
convertible, as hereinafter provided.

               (ii) Each share of Series B Preferred Stock shall be convertible,
without the payment of any additional consideration by the holder thereof and at
the option of the holder thereof, at any time after the date of issuance of such
share, at the office of the Corporation or any transfer agent for the Series B
Preferred Stock, into such number of fully paid and non-assessable shares of
Common Stock as is determined by dividing $2.00 by the relevant


                                       5



Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. The Conversion Price for purposes of calculating the number of
shares of Common Stock deliverable upon conversion without the payment of any
additional consideration by the holder of Series B Preferred Stock (the "Series
B Conversion Price") shall be $15.00 as of the Effective Date. Such Series B
Conversion Price shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Series B Preferred Stock is
convertible, as hereinafter provided.

               (iii) Each share of Series C Preferred Stock shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for the Series C Preferred Stock, into such number of fully paid and
non-assessable shares of Common Stock as is determined by dividing $2.50 by the
relevant Conversion Price, determined as hereinafter provided, in effect at the
time of conversion. The Conversion Price for purposes of calculating the number
of shares of Common Stock deliverable upon conversion without the payment of any
additional consideration by the holder of Series C Preferred Stock (the "Series
C Conversion Price") shall be $18.00 as of the Effective Date. Such Series C
Conversion Price shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Series C Preferred Stock is
convertible, as hereinafter provided.

               (iv) Each share of Series D Preferred Stock shall be convertible,
without the payment of any additional consideration by the holder thereof and at
the option of the holder thereof, at any time after the date of issuance of such
share, at the office of the Corporation or any transfer agent for the Series D
Preferred Stock, into such number of fully paid and non-assessable shares of
Common Stock as is determined by dividing $3.25 by the relevant Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
The Conversion Price for purposes of calculating the number of shares of Common
Stock deliverable upon conversion without the payment of any additional
consideration by the holder of Series D Preferred Stock (the "Series D
Conversion Price") shall be $21.00 as of the Effective Date. Such Series D
Conversion Price shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Series D Preferred Stock is
convertible, as hereinafter provided.

               (v) Each share of Series E Preferred Stock shall be convertible,
without the payment of any additional consideration by the holder thereof and at
the option of the holder thereof, at any time after the date of issuance of such
share, at the office of the Corporation or any transfer agent for the Series E
Preferred Stock, into such number of fully paid and non-assessable shares of
Common Stock as is determined by dividing $0.397644 by the relevant Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
The Conversion Price for purposes of calculating the number of shares of Common
Stock deliverable upon conversion without the payment of any additional
consideration by the holder of Series E Preferred Stock (the "Series E
Conversion Price") shall be $7.26 as of the Effective Date. Such Series E
Conversion Price shall be subject to adjustment, in order to adjust


                                       6



the number of shares of Common Stock into which the Series E Preferred Stock is
convertible, as hereinafter provided.

               (vi) Each share of Series E-2 Preferred Stock shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for the Series E-2 Preferred Stock, into such number of fully paid and
non-assessable shares of Common Stock as is determined by dividing $7.26 by the
relevant Conversion Price, determined as hereinafter provided, in effect at the
time of conversion. The Conversion Price for purposes of calculating the number
of shares of Common Stock deliverable upon conversion without the payment of any
additional consideration by the holder of Series E-2 Preferred Stock (the
"Series E-2 Conversion Price") shall be $7.26 as of the Effective Date. Such
Series E-2 Conversion Price shall be subject to adjustment, in order to adjust
the number of shares of Common Stock into which the Series E-2 Preferred Stock
is convertible, as hereinafter provided.

          Each of the Series A Conversion Price, the Series B Conversion Price,
the Series C Conversion Price, the Series D Conversion Price, the Series E
Conversion Price and the Series E-2 Conversion Price is sometimes referred to
herein, as the context requires, as the "Conversion Price."

          (b) Mechanics of Conversion.

               (i) Before any holder of Designated Preferred Stock shall be
entitled to convert the same into full shares of Common Stock, such holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or of any designated transfer agent, and shall give written
notice to the Corporation at such office that such holder elects to convert the
same and shall state therein the name of such holder or the name or names of the
nominees of such holder in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. No fractional shares of
Common Stock shall be issued upon conversion of any shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock or Series E-2 Preferred Stock. In lieu of any
fractional shares of Common Stock to which the holder would otherwise be
entitled, the Corporation shall pay cash equal to such fraction multiplied by
the then effective applicable Conversion Price. The Corporation shall, as soon
as practicable thereafter, issue and deliver at such office to such holder of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock or Series E-2 Preferred Stock
or to such holder's nominee or nominees, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled as
aforesaid, together with cash in lieu of any fraction of a share. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock or Series E-2 Preferred Stock to be converted,
and the person or persons


                                       7



entitled to receive the shares of Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date.

               (ii) The issuance or delivery of certificates for Common Stock
upon the conversion of shares of Designated Preferred Stock pursuant to this
Section D.2 shall be made without charge to the converting holder of shares of
Designated Preferred Stock for such certificates or for any tax in respect of
the issuance or delivery of such certificates or the securities represented
thereby, and such certificates shall be issued or delivered in the respective
names of, or (subject to compliance with the applicable provisions of federal
and state securities laws) in such names as may be directed by, the holders of
the shares of Designated Preferred Stock converted; provided, however, that the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificates
in a name other than that of the holder of the shares of Designated Preferred
Stock converted, and the Corporation shall not be required to issue or deliver
such certificate unless or until the entity or entities requesting the issuance
or delivery thereof shall have paid to the Corporation the amount of such tax or
shall have established to the reasonable satisfaction of the Corporation that
such tax has been paid.

          (c) Adjustments to Conversion Price for Diluting Issues.

               (i) Special Definitions. For the purposes of this Section 2(c),
the following definitions shall apply:

                    (1) "Additional Closing" means the consummation of the sale
     and issuance by the Corporation of shares of Series E-2 Preferred Stock
     pursuant to the Subscription Agreement and the acceptance by a person or
     persons of such shares, occurring after the date of the Initial Closing.

                    (2) "Additional Shares of Common Stock" means all shares of
     Common Stock issued (or, pursuant to Subsection 2(c)(iii) deemed to be
     issued) by the Corporation after the Effective Date, other than Excluded
     Securities.

                    (3) "Convertible Securities" means any evidences of
     indebtedness, shares (other than the Common Stock or the Designated
     Preferred Stock), or other securities directly or indirectly convertible
     into or exchangeable for the Common Stock.

                    (4) "Excluded Securities" means any of the following
     Securities:

                         (A) any dividend or distribution payable pro rata to
               all holders of Common Stock or Designated Preferred Stock of the
               Corporation after the Effective Date;


                                       8



                         (B) Up to 2,326,008 shares of Common Stock (subject to
               equitable adjustment in the event of any stock dividend, stock
               split, combination, reorganization, recapitalization or similar
               event involving a change in the Common Stock), including Options
               therefor, issued pursuant to the Corporation's 1998 Employee
               Director and Consultant Stock Option Plan (as amended from
               time-to-time); provided that, shares of Common Stock or Options
               therefor in excess of such 2,326,008 shares may be issued or
               issuable pursuant to the Corporation's 1998 Employee, Director
               and Consultant Stock Option Plan (as amended from time-to-time),
               or such other arrangements, contracts, or plans as are
               recommended by management and approved by the Board of Directors
               or compensation committee established by the Board of Directors,
               and not considered "Additional Shares of Common Stock" upon
               written consent of the holders of a majority of the Designated
               Preferred Stock;

                         (C) securities issued in connection with the conversion
               or exercise of any Option (including securities issued in
               connection with any subsequent conversion of the securities
               issued upon the exercise of such Option), Convertible Securities
               outstanding on the Effective Date (including those issued on the
               Effective Date and Series E-2 Preferred Stock issued at any
               Additional Closing) or Designated Preferred Stock;

                         (D) up to that number of shares of Common Stock or
               Options equal to 1% of the aggregate number of shares of
               outstanding Common Stock on an as-converted, fully-diluted basis
               (after giving effect to the issuance of the Series E-2 Preferred
               Stock) measured as of the date of the latest issuance of Series
               E-2 Preferred Stock issued after the Effective Date (subject to
               equitable adjustment in the event of any stock dividend, stock
               split, combination, reorganization, recapitalization or similar
               event involving a change in the Common Stock) to institutional
               lenders in connection with the establishment or maintenance by
               the Corporation of credit facilities, including equipment lease
               facilities, approved in each case by a majority of the Board of
               Directors of the Corporation;

                         (E) securities issued pursuant to a registered public
               offering, the closing of which is on or after the Effective Date;

                         (F) up to that number of shares of Common Stock or
               Options equal to 1% of the aggregate number of shares of
               outstanding Common Stock on an as-converted, fully-diluted basis
               (after giving effect to the issuance of the Series E-2 Preferred
               Stock) measured as of the date of the latest issuance of Series
               E-2 Preferred Stock in connection with the sale of Common Stock
               or Convertible Securities of the Corporation issued


                                       9



               after the Effective Date (subject to equitable adjustment in the
               event of any stock dividend, stock split, combination,
               reorganization, recapitalization or similar event involving a
               change in the Common Stock) to any licensor of technology or
               patent rights to the Corporation or to any collaborative partner
               or licensee with respect to the development or commercialization
               of products;

                         (G) up to that number of shares of Common Stock or
               Options equal to 4% of the aggregate number of shares of
               outstanding Common Stock on an as-converted, fully-diluted basis
               (after giving effect to the issuance of the Series E-2 Preferred
               Stock) measured as of the date of the latest issuance of Series
               E-2 Preferred Stock by the Corporation issued after the Effective
               Date (subject to equitable adjustment in the event of any stock
               dividend, stock split, combination, reorganization,
               recapitalization or similar event involving a change in the
               Common Stock) in connection with the acquisition of another
               business entity by merger, purchase of all or substantially all
               of its assets or acquisition of all or substantially all of the
               equity interest of such business entity; or

                         (H) shares of Series E-2 Preferred Stock issued at the
               Initial Closing or any Additional Closing for consideration of
               not less than $7.26 per share.

                    (5) "Initial Closing" means the first consummation of the
     sale and issuance by the Corporation of shares of Series E-2 Preferred
     Stock and the acceptance by a person or persons of such shares.

                    (6) "Option" means any right, option or warrant to subscribe
     for, purchase or otherwise acquire Common Stock, Preferred Stock or
     Convertible Securities (as defined below).

               (ii) No Adjustment of Conversion Price. No adjustment shall be
made in the Series A Conversion Price as a result of the issuance of Additional
Shares of Common Stock or otherwise, unless the consideration per share
determined pursuant to Subsection 2(c)(vi) for an Additional Share of Common
Stock issued or deemed to be issued by the Corporation is less than the Series A
Conversion Price in effect on the date of, and immediately prior to, the issue
of such Additional Shares of Common Stock. In addition, no adjustment shall be
made in the Series A Conversion Price as a result of the issuance of Additional
Shares of Common Stock or otherwise, if the right to such adjustment is waived
by the holders of at least a majority of the then-outstanding shares of Series A
Preferred Stock. No adjustment shall be made in the Series B Conversion Price as
a result of the issuance of Additional Shares of Common Stock or otherwise,
unless the consideration per share determined pursuant to Subsection 2(c)(vi)
for an Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Series B Conversion Price in effect on the date of,
and immediately prior to, the issue of such Additional Shares of Common Stock.
In addition, no adjustment shall be made in the Series B


                                       10



Conversion Price as a result of the issuance of Additional Shares of Common
Stock or otherwise, if the right to such adjustment is waived by the holders of
at least a majority of the then-outstanding shares of Series B Preferred Stock.
No adjustment shall be made in the Series C Conversion Price as a result of the
issuance of Additional Shares of Common Stock or otherwise, unless the
consideration per share determined pursuant to Subsection 2(c)(vi) for an
Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Series C Conversion Price in effect on the date of,
and immediately prior to, the issue of such Additional Shares of Common Stock.
In addition, no adjustment shall be made in the Series C Conversion Price as a
result of the issuance of Additional Shares of Common Stock or otherwise, if the
right to such adjustment is waived by the holders of at least a majority of the
then-outstanding shares of Series C Preferred Stock. No adjustment shall be made
in the Series D Conversion Price as a result of the issuance of Additional
Shares of Common Stock or otherwise, unless the consideration per share
determined pursuant to Subsection 2(c)(vi) for an Additional Share of Common
Stock issued or deemed to be issued by the Corporation is less than the Series D
Conversion Price in effect on the date of, and immediately prior to, the issue
of such Additional Shares of Common Stock. In addition, no adjustment shall be
made in the Series D Conversion Price as a result of the issuance of Additional
Shares of Common Stock or otherwise, if the right to such adjustment is waived
by the holders of at least a majority of the then-outstanding shares of Series D
Preferred Stock. No adjustment shall be made in the Series E Conversion Price as
a result of the issuance of Additional Shares of Common Stock or otherwise,
unless the consideration per share determined pursuant to Subsection 2(c)(vi)
for an Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Series E Conversion Price in effect on the date of,
and immediately prior to, the issue of such Additional Shares of Common Stock.
In addition, no adjustment shall be made in the Series E Conversion Price as a
result of the issuance of Additional Shares of Common Stock or otherwise, if
each of the following conditions are met: (w) the right to such adjustment is
waived by the holders of at least sixty-six and two-thirds percent (66 2/3%) of
the then-outstanding shares of Series E Preferred Stock, (x) in connection with
the same circumstances giving rise to the waiver referred to in subclause (w)
above, the holders of the Series C Preferred Stock waive their right to
adjustment of the Series C Conversion Price in accordance with the terms set
forth in this Subsection 2(c)(ii), (y) in connection with the same circumstances
giving rise to the waiver referred to in subclause (w) above, the holders of the
Series D Preferred Stock have waived their right to adjustment of the Series D
Conversion Price as provided in this Subsection 2(c)(ii) and (z) in connection
with the same circumstances giving rise to the waiver referred to in subclause
(w) above, the holders of the Series E-2 Preferred Stock have waived their right
to adjustment of the Series E-2 Conversion Price as provided in this Subsection
2(c)(ii). No adjustment shall be made in the Series E-2 Conversion Price as a
result of the issuance of Additional Shares of Common Stock or otherwise, unless
the consideration per share determined pursuant to Subsection 2(c)(vi) for an
Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Series E-2 Conversion Price in effect on the date
of, and immediately prior to, the issue of such Additional Shares of Common
Stock. In addition, no adjustment shall be made in the Series E-2 Conversion
Price as a result of the issuance of Additional Shares of Common Stock or
otherwise, if each of the following conditions are met: (w) the right to such
adjustment is waived by the holders of at least sixty-six and two-thirds


                                       11



percent (66 2/3%) of the then-outstanding shares of Series E-2 Preferred Stock,
(x) in connection with the same circumstances giving rise to the waiver referred
to in subclause (w) above, the holders of the Series C Preferred Stock waive
their right to adjustment of the Series C Conversion Price in accordance with
the terms set forth in this Subsection 2(c)(ii), (y) in connection with the same
circumstances giving rise to the waiver referred to in subclause (w) above, the
holders of the Series D Preferred Stock have waived their right to adjustment of
the Series D Conversion Price as provided in this Subsection 2(c)(ii) and (z) in
connection with the same circumstances giving rise to the waiver referred to in
subclause (w) above, the holders of the Series E Preferred Stock have waived
their right to adjustment of the Series E Conversion Price as provided in this
Subsection 2(c)(ii).

               (iii) Issue of Options, Preferred Stock and Convertible
Securities Deemed Issue of Additional Shares of Common Stock. If the Corporation
at any time or from time to time after the Effective Date shall issue any
Options, Preferred Stock or Convertible Securities, or shall fix a record date
for the determination of holders of any class of securities entitled to receive
any such Options, Preferred Stock or Convertible Securities, then the maximum
number of shares of the Common Stock (as set forth in the instrument relating
thereto without regard to any provision contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or, in the
case of Preferred Stock or Convertible Securities and Options therefor, the
conversion or exchange of such Preferred Stock or Convertible Securities, shall
be deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided, that with respect to the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock, the Series E Preferred Stock and the Series E-2
Preferred Stock, as the case may be, no Additional Shares of Common Stock shall
be deemed to have been issued unless the consideration per share determined
pursuant to Subsection 2(c)(vi) for such Additional Shares of Common Stock would
be less than the Series A Conversion Price, Series B Conversion Price, Series C
Conversion Price, the Series D Conversion Price, the Series E Conversion Price
or the Series E-2 Conversion Price, as the case may be, in effect on the date of
and immediately prior to such issue, or such record date, as the case may be,
and provided, further, that in any such case in which Additional Shares of
Common Stock are deemed to be issued:

                    (1) No further adjustment in the Series A Conversion Price,
     the Series B Conversion Price, the Series C Conversion Price, the Series D
     Conversion Price, the Series E Conversion Price or the Series E-2
     Conversion Price, as the case may be, shall be made upon the subsequent
     issue of Preferred Stock, Convertible Securities or shares of the Common
     Stock, in each case, upon the exercise of such Options, conversion or
     exchange of such Preferred Stock or Convertible Securities;

                    (2) If such Options, Preferred Stock or Convertible
     Securities by their terms provide, with the passage of time or otherwise,
     for any increase or decrease, other than any decrease due to anti-dilution
     provisions, in the consideration payable to the Corporation, or decrease or
     increase, other than any increase due to anti-


                                       12



     dilution provisions, in the number of shares of the Common Stock issuable,
     upon the exercise, conversion or exchange thereof, the Series A Conversion
     Price, the Series B Conversion Price, the Series C Conversion Price, the
     Series D Conversion Price, the Series E Conversion Price and the Series E-2
     Conversion Price computed upon the original issue thereof (or upon the
     occurrence of a record date with respect thereto), and any subsequent
     adjustments based thereon, shall, upon the effectiveness of any such
     increase or decrease in consideration, or decrease or increase in the
     number of shares, be recomputed to reflect such increase or decrease in
     consideration, or decrease or increase in the number of shares, insofar as
     it affects such Options or the right of conversion or exchange under such
     Preferred Stock or Convertible Securities;

                    (3) Upon the expiration or termination of any such Options
     or any rights of conversion or exchange under such Preferred Stock or
     Convertible Securities which shall not have been exercised, the Series A
     Conversion Price, the Series B Conversion Price, the Series C Conversion
     Price, the Series D Conversion Price, the Series E Conversion Price or the
     Series E-2 Conversion Price, as the case may be, computed upon the original
     issue thereof (or upon the occurrence of a record date with respect
     thereto) and any subsequent adjustments based thereon shall, upon such
     expiration, be recomputed as if:

                         (A) In the case of Preferred Stock, Convertible
               Securities or Options for Common Stock, the only Additional
               Shares of Common Stock issued were the shares of the Common
               Stock, if any, actually issued upon the exercise of such Options
               or the conversion or exchange of such Preferred Stock or
               Convertible Securities and the consideration received therefor
               was the consideration actually received by the Corporation for
               the issue of all such Options, whether or not exercised, plus the
               consideration actually received by the Corporation upon such
               exercise, or for the issue of all such Preferred Stock or
               Convertible Securities which were actually converted or
               exchanged, plus the additional consideration, if any, actually
               received by the Corporation upon such conversion or exchange; and

                         (B) In the case of Options for Preferred Stock or
               Convertible Securities, only the Preferred Stock or Convertible
               Securities, if any, actually issued upon the exercise thereof
               were issued at the time of issue of such Options, and the
               consideration received by the Corporation for the Additional
               Shares of Common Stock deemed to have been then issued was the
               consideration actually received by the Corporation for the issue
               of all such Options, whether or not exercised, plus the
               consideration deemed to have been received by the Corporation
               determined pursuant to Subsection 2(c)(iii) upon the issue of the
               Preferred Stock or Convertible Securities with respect to which
               such Options were actually exercised;


                                       13



                    (4) No recomputation pursuant to Subsection 2(c)(iii)(2) or
     Subsection 2(c)(iii)(3) above shall have the effect of (A) increasing the
     Series A Conversion Price to an amount that exceeds the lower of (i) the
     applicable Series A Conversion Price prior to the original adjustment for
     such deemed issuance, or (ii) the Series A Conversion Price that would have
     resulted from any issuance of Additional Shares of Common Stock between the
     original adjustment date and such recomputation date, (B) increasing the
     Series B Conversion Price to an amount that exceeds the lower of (i) the
     applicable Series B Conversion Price prior to the original adjustment for
     such deemed issuance, or (ii) the Series B Conversion Price that would have
     resulted from any issuance of Additional Shares of Common Stock between the
     original adjustment date and such recomputation date, (C) increasing the
     Series C Conversion Price to an amount that exceeds the lower of (i) the
     applicable Series C Conversion Price prior to the original adjustment for
     such deemed issuance, or (ii) the Series C Conversion Price that would have
     resulted from any issuance of Additional Shares of Common Stock between the
     original adjustment date and such recomputation date, (D) increasing the
     Series D Conversion Price to an amount that exceeds the lower of (i) the
     applicable Series D Conversion Price prior to the original adjustment for
     such deemed issuance, or (ii) the Series D Conversion Price that would have
     resulted from any issuance of Additional Shares of Common Stock between the
     original adjustment date and such recomputation date (E) increasing the
     Series E Conversion Price to an amount that exceeds the lower of (i) the
     applicable Series E Conversion Price prior to the original adjustment for
     such deemed issuance, or (ii) the Series E Conversion Price that would have
     resulted from any issuance of Additional Shares of Common Stock between the
     original adjustment date and such recomputation date or (F) increasing the
     Series E-2 Conversion Price to an amount that exceeds the lower of (i) the
     applicable Series E-2 Conversion Price prior to the original adjustment for
     such deemed issuance, or (ii) the Series E-2 Conversion Price that would
     have resulted from any issuance of Additional Shares of Common Stock
     between the original adjustment date and such recomputation date; and

                    (5) If such record date shall have been fixed and such
     Options, Preferred Stock or Convertible Securities are not issued on the
     date fixed therefor, the adjustment previously made in the Series A
     Conversion Price, Series B Conversion Price, Series C Conversion Price,
     Series D Conversion Price, Series E Conversion Price or Series E-2
     Conversion Price which became effective on such record date shall be
     canceled as of the close of business on such record date, and thereafter
     the Series A Conversion Price, Series B Conversion Price, Series C
     Conversion Price, Series D Conversion Price, Series E Conversion Price or
     Series E-2 Conversion Price shall be adjusted pursuant to this Subsection
     2(c)(iii) as of the actual date of their issuance.

               (iv) Stock Dividends and Stock Distributions. In case the
Corporation shall at any time or from time to time after the Effective Date
distribute to all holders of shares of its Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the resulting or surviving corporation and the Common Stock is
not changed or exchanged) cash, evidences of indebtedness of the Corporation or
another


                                       14



issuer, securities of the Corporation or another issuer or other assets
(excluding (A) dividends or distributions paid or made to holders of shares of
Designated Preferred Stock in the manner provided in Section 4(a), and (B)
dividends payable in shares of Common Stock (or any options, warrants or other
rights to acquire Common Stock) for which adjustment is made under another
clause of this Section 2(c)(iv)), then, and in each such case, the Conversion
Price then in effect shall be adjusted by multiplying the Conversion Price in
effect immediately prior to the date of such distribution by a fraction (x) the
numerator of which shall be such Current Market Price of one share of the Common
Stock less the then Fair Market Value (as determined by the Board of Directors
of the Corporation) of the portion of the cash, evidences of indebtedness,
securities or other assets so distributed or of such subscription rights or
warrants applicable to one share of Common Stock and (y) the denominator of
which shall be the Current Market Price of the Common Stock on the record date
referred to below (but such denominator not to be less than one). Such
adjustment shall be made whenever any such distribution is made and shall become
effective retroactively to a date immediately following the close of business on
the record date for the determination of stockholders entitled to receive such
distribution. If such record date shall have been fixed and such dividend or
distribution shall not have been fully paid on the date fixed therefor, the
adjustment previously made in the Series A Conversion Price, Series B Conversion
Price, Series C Conversion Price, Series D Conversion Price, Series E Conversion
Price or Series E-2 Conversion Price which became effective on such record date
shall be canceled as of the close of business on such record date, and
thereafter the Series A Conversion Price, Series B Conversion Price, Series C
Conversion Price, Series D Conversion Price, Series E Conversion Price or Series
E-2 Conversion Price shall be adjusted pursuant to this Subsection 2(c)(iv) as
of the time of actual payment of such dividend.

          For purposes of this Section 2(c)(iv), the following definitions shall
apply:

                         (A) "Current Market Price" per share shall mean, on any
               date specified herein for the determination thereof, (a) the
               average daily Market Price of the Common Stock for those days
               during the period of 5 days, ending on such date, which are days
               on which national securities exchanges in the United States are
               open for trading, and (b) if the Common Stock is not then listed
               or admitted to trading on any national securities exchange or
               quoted in the over-the-counter market, the Market Price on such
               date.

                         (B) "Fair Market Value" shall mean (x) if available,
               the Current Market Price (determined without reference to the
               last sentence of the definition of Market Price) or (y) if there
               shall be no Current Market Price available, the amount which a
               willing buyer, under no compulsion to buy, would pay a willing
               seller, under no compulsion to sell, in an arm's-length
               transaction (assuming (i) that the Common Stock is valued "as if
               fully distributed" and (ii) no consideration is given for
               minority investment discounts, or discounts related to
               illiquidity or restrictions on transferability).


                                       15



                         (C) "Market Price" shall mean, per share of Common
               Stock on any date specified herein: (a) the closing price per
               share of the Common Stock on such date published in The Wall
               Street Journal or, if no such closing price on such date is
               published in The Wall Street Journal, the average of the closing
               bid and asked prices on such date, as officially reported on the
               principal national securities exchange on which the Common Stock
               is then listed or admitted to trading, (b) if the Common Stock is
               not then listed or admitted to trading on any national securities
               exchange but is designated as a national market system security,
               the last trading price of the Common Stock on such date, or (c)
               if there shall have been no trading on such date or if the Common
               Stock is not so designated, the average of the reported closing
               bid and asked prices of the Common Stock on such date as shown by
               NASDAQ and reported by any member firm of the NYSE, selected by
               the Corporation. If neither (a), (b) or (c) is applicable, Market
               Price shall mean the Fair Market Value per share determined in
               good faith by the Board of Directors of the Corporation which
               shall be deemed to be Fair Market Value unless holders of at
               least a majority of the outstanding shares of Designated
               Preferred Stock request, in writing, that the Corporation obtain
               an opinion of an investment banking firm chosen by the Company,
               which is reasonably satisfactory to such holders, (at the
               Corporation's expense), in which event Fair Market Value shall be
               as determined by such investment banking firm.

                         (D) "NASDAQ" shall mean the National Market System of
               The NASDAQ Stock Market, Inc.

                         (E) "NYSE" shall mean The New York Stock Exchange, Inc.

               (v) Adjustment of Conversion Price Upon Certain Events. If, after
the Effective Date, the Corporation shall issue Additional Shares of Common
Stock, including Additional Shares of Common Stock deemed to be issued pursuant
to Subsection 2(c)(iii) hereof, but excluding events described in Subsection
2(d) (which event is dealt with in such Subsection):

                    (1) Without consideration or for a consideration per share
     less than the Series A Conversion Price in effect immediately prior to such
     issue, then and in such event, the Series A Conversion Price shall be
     reduced, concurrently with such issue in order to increase the number of
     shares of Common Stock into which a share of Series A Preferred Stock is
     convertible, to a price (calculated at least to the nearest 1/100th of a
     cent) determined by multiplying the Series A Conversion Price in effect
     immediately prior to such issue by a fraction (x) the numerator of which
     shall be (A) the number of shares of Common Stock outstanding immediately
     prior to such issue (including shares of the Common Stock issuable upon
     exercise or conversion of any outstanding Options, Designated Preferred
     Stock or Convertible Securities) plus (B) the


                                       16



     number of shares of the Common Stock which the aggregate consideration
     received by the Corporation for the total number of Additional Shares of
     Common Stock so issued would purchase at the Series A Conversion Price in
     effect immediately prior to such issue and (y) the denominator of which
     shall be (A) the number of shares of the Common Stock outstanding
     immediately prior to such issue (including shares of Common Stock issuable
     upon exercise or conversion of any outstanding Options, Designated
     Preferred Stock or Convertible Securities) plus (B) the number of such
     Additional Shares of Common Stock so issued or deemed to be issued.

                    (2) Without consideration or for a consideration per share
     less than the Series B Conversion Price in effect immediately prior to such
     issue, then and in such event, the Series B Conversion Price shall be
     reduced, concurrently with such issue in order to increase the number of
     shares of Common Stock into which a share of Series B Preferred Stock is
     convertible, to a price (calculated at least to the nearest 1/100th of a
     cent) determined by multiplying the Series B Conversion Price in effect
     immediately prior to such issue by a fraction (x) the numerator of which
     shall be (A) the number of shares of Common Stock outstanding immediately
     prior to such issue (including shares of the Common Stock issuable upon
     exercise or conversion of any outstanding Options, Designated Preferred
     Stock or Convertible Securities) plus (B) the number of shares of the
     Common Stock which the aggregate consideration received by the Corporation
     for the total number of Additional Shares of Common Stock so issued would
     purchase at the Series B Conversion Price in effect immediately prior to
     such issue and (y) the denominator of which shall be (A) the number of
     shares of the Common Stock outstanding immediately prior to such issue
     (including shares of Common Stock issuable upon exercise or conversion of
     any outstanding Options, Designated Preferred Stock or Convertible
     Securities) plus (B) the number of such Additional Shares of Common Stock
     so issued or deemed to be issued.

                    (3) Without consideration or for a consideration per share
     less than the Series C Conversion Price in effect immediately prior to such
     issue, then and in such event, the Series C Conversion Price shall be
     reduced, concurrently with such issue in order to increase the number of
     shares of Common Stock into which a share of Series C Preferred Stock is
     convertible, to a price (calculated at least to the nearest 1/100th of a
     cent) determined by multiplying the Series C Conversion Price in effect
     immediately prior to such issue by a fraction (x) the numerator of which
     shall be (A) the number of shares of Common Stock outstanding immediately
     prior to such issue (including shares of the Common Stock issuable upon
     exercise or conversion of any outstanding Options, Designated Preferred
     Stock or Convertible Securities) plus (B) the number of shares of the
     Common Stock which the aggregate consideration received by the Corporation
     for the total number of Additional Shares of Common Stock so issued would
     purchase at the Series C Conversion Price in effect immediately prior to
     such issue and (y) the denominator of which shall be (A) the number of
     shares of the Common Stock outstanding immediately prior to such issue
     (including shares of Common Stock issuable upon exercise or conversion of
     any outstanding Options, Designated Preferred


                                       17


     Stock or Convertible Securities) plus (B) the number of such Additional
     Shares of Common Stock so issued or deemed to be issued.

                    (4) Without consideration or for a consideration per share
     less than the Series D Conversion Price in effect immediately prior to such
     issue, then and in such event, the Series D Conversion Price shall be
     reduced, concurrently with such issue in order to increase the number of
     shares of Common Stock into which a share of Series D Preferred Stock is
     convertible, to a price (calculated at least to the nearest 1/100th of a
     cent) determined by multiplying the Series D Conversion Price in effect
     immediately prior to such issue by a fraction (x) the numerator of which
     shall be (A) the number of shares of Common Stock outstanding immediately
     prior to such issue (including shares of the Common Stock issuable upon
     exercise or conversion of any outstanding Options, Designated Preferred
     Stock or Convertible Securities) plus (B) the number of shares of the
     Common Stock which the aggregate consideration received by the Corporation
     for the total number of Additional Shares of Common Stock so issued would
     purchase at the Series D Conversion Price in effect immediately prior to
     such issue and (y) the denominator of which shall be (A) the number of
     shares of the Common Stock outstanding immediately prior to such issue
     (including shares of Common Stock issuable upon exercise or conversion of
     any outstanding Options, Designated Preferred Stock or Convertible
     Securities) plus (B) the number of such Additional Shares of Common Stock
     so issued or deemed to be issued.

                    (5) Without consideration or for a consideration per share
     less than the Series E Conversion Price in effect immediately prior to such
     issue, then and in such event, the Series E Conversion Price shall be
     reduced, concurrently with such issue in order to increase the number of
     shares of Common Stock into which a share of Series E Preferred Stock is
     convertible, to a price (calculated at least to the nearest 1/100th of a
     cent) determined by multiplying the Series E Conversion Price in effect
     immediately prior to such issue by a fraction (x) the numerator of which
     shall be (A) the number of shares of Common Stock outstanding immediately
     prior to such issue (including shares of the Common Stock issuable upon
     exercise or conversion of any outstanding Options, Designated Preferred
     Stock or Convertible Securities) plus (B) the number of shares of the
     Common Stock which the aggregate consideration received by the Corporation
     for the total number of Additional Shares of Common Stock so issued would
     purchase at the Series E Conversion Price in effect immediately prior to
     such issue and (y) the denominator of which shall be (A) the number of
     shares of the Common Stock outstanding immediately prior to such issue
     (including shares of Common Stock issuable upon exercise or conversion of
     any outstanding Options, Designated Preferred Stock or Convertible
     Securities) plus (B) the number of such Additional Shares of Common Stock
     so issued or deemed to be issued. For the avoidance of doubt, any
     adjustment to the Series E Conversion Price in connection with the issuance
     of Additional Shares of Common Stock (and/or deemed issuance pursuant to
     Subsection 2(c)(iii) hereof) for cash or other consideration shall be made
     in accordance with Subsection 2(c)(v)(7).


                                       18



                    (6) Without consideration or for a consideration per share
     less than the Series E-2 Conversion Price in effect immediately prior to
     such issue, then and in such event, the Series E-2 Conversion Price shall
     be reduced, concurrently with such issue in order to increase the number of
     shares of Common Stock into which a share of Series E-2 Preferred Stock is
     convertible, to a price (calculated at least to the nearest 1/100th of a
     cent) determined by multiplying the Series E-2 Conversion Price in effect
     immediately prior to such issue by a fraction (x) the numerator of which
     shall be (A) the number of shares of Common Stock outstanding immediately
     prior to such issue (including shares of the Common Stock issuable upon
     exercise or conversion of any outstanding Options, Designated Preferred
     Stock or Convertible Securities) plus (B) the number of shares of the
     Common Stock which the aggregate consideration received by the Corporation
     for the total number of Additional Shares of Common Stock so issued would
     purchase at the Series E-2 Conversion Price in effect immediately prior to
     such issue and (y) the denominator of which shall be (A) the number of
     shares of the Common Stock outstanding immediately prior to such issue
     (including shares of Common Stock issuable upon exercise or conversion of
     any outstanding Options, Designated Preferred Stock or Convertible
     Securities) plus (B) the number of such Additional Shares of Common Stock
     so issued or deemed to be issued. For the avoidance of doubt, any
     adjustment to the Series E-2 Conversion Price in connection with the
     issuance of Additional Shares of Common Stock (and/or deemed issuance
     pursuant to Subsection 2(c)(iii) hereof) for cash or other consideration
     shall be made in accordance with Subsection 2(c)(v)(8).

                    (7) Notwithstanding anything to the contrary set forth in
     Subsections 2(c)(v)(5) or 2(c)(v)(6), if the Corporation shall issue (or be
     deemed to have issued pursuant to Subsection 2(c)(iii) hereof) Additional
     Shares of Common Stock (other than in connection with any issuance or
     deemed issuance where the securities issued, but for the number of shares
     issued or deemed issued, would constitute an Excluded Security) for cash or
     other consideration (including any Options issued in connection therewith)
     per share less than the Series E Conversion Price in effect immediately
     prior to such issuance, then, and in such event, the Series E Conversion
     Price shall be reduced to equal the price per share of the Additional
     Shares of Common Stock so issued.

                    (8) Notwithstanding anything to the contrary set forth in
     Subsections 2(c)(v)(5) or 2(c)(v)(6), if the Corporation shall issue (or be
     deemed to have issued pursuant to Subsection 2(c)(iii) hereof) Additional
     Shares of Common Stock (other than in connection with any issuance or
     deemed issuance where the securities issued, but for the number of shares
     issued or deemed issued, would constitute an Excluded Security) for cash or
     other consideration (including any Options issued in connection therewith)
     per share less than the Series E-2 Conversion Price in effect immediately
     prior to such issuance, then, and in such event, the Series E-2 Conversion
     Price shall be reduced to equal the price per share of the Additional
     Shares of Common Stock so issued.


                                       19



               (vi) Determination of Consideration. For purposes of Subsection
2(c)(v), the consideration received by the Corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:

                    (1) Cash and Property: Such consideration shall:

                         (A) Insofar as it consists of cash, be computed at the
               aggregate of cash received by the Corporation, excluding amounts
               paid or payable for accrued interest or accrued dividends;

                         (B) Insofar as it consists of property other than cash,
               be computed at the fair market value thereof at the time of such
               issue, as determined in good faith by the Board of Directors; and

                         (C) In the event Additional Shares of Common Stock are
               issued together with other shares or securities or other assets
               of the Corporation for consideration which covers both, be the
               proportion of such consideration, computed as provided in
               Subsections 2(c)(vi)(1)(A) and 2(c)(vi)(1)(B) above, received in
               respect of the Additional Shares of Common Stock, as determined
               in good faith by the Board of Directors;

                    (2) Options, Designated Preferred Stock and Convertible
     Securities. The consideration per share received by the Corporation for
     Additional Shares of Common Stock deemed to have been issued pursuant to
     Subsection 2(c)(iii), relating to Options, Designated Preferred Stock and
     Convertible Securities, shall be determined by dividing:

                         (A) The total amount, if any, received or receivable by
               the Corporation as consideration for the issue of such Options,
               Designated Preferred Stock or Convertible Securities, plus the
               minimum aggregate amount of additional consideration (as set
               forth in the instruments relating thereto, without regard to any
               provision contained therein for a subsequent adjustment of such
               consideration until such subsequent adjustment occurs) payable to
               the Corporation upon the exercise of such Options or the
               conversion or exchange of such Designated Preferred Stock or
               Convertible Securities, or in the case of Options for Designated
               Preferred Stock or Convertible Securities, the exercise of such
               Options for Designated Preferred Stock or Convertible Securities
               and the conversion or exchange of such Designated Preferred Stock
               or Convertible Securities, by

                         (B) The maximum number of shares of the Common Stock
               (as set forth in the instruments relating thereto, without regard
               to any provision contained therein for a subsequent adjustment of
               such number until such subsequent adjustment occurs) issuable
               upon the exercise of such Options or the conversion or exchange
               of such


                                       20



               Designated Preferred Stock or Convertible Securities and, in the
               case of Options for Preferred Stock or Convertible Securities,
               the exercise of such Options for Preferred Stock or Convertible
               Securities and the conversion or exchange of such Preferred Stock
               or Convertible Securities.

          (d) Adjustment for Stock Splits, Stock Dividends, Subdivisions,
Combinations or Consolidation of Common Stock. In the event that at any time or
from time to time after the Effective Date the outstanding shares of the Common
Stock shall be split, subdivided, combined or consolidated, by reclassification
or otherwise, into a greater or lesser number of shares of Common Stock, and in
the event that the Corporation shall issue shares of the Common Stock by way of
a stock dividend or other distribution to the holders of the Common Stock, the
Series A Conversion Price, Series B Conversion Price, Series C Conversion Price,
Series D Conversion Price, Series E Conversion Price and Series E-2 Conversion
Price in effect immediately prior to such split, subdivision, stock dividend,
combination or consolidation shall, concurrently with the effectiveness of such
split, subdivision, stock dividend, combination or consolidation, be increased
or decreased proportionately, so that the holder of any share of Designated
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive (in lieu of the number of shares of Common Stock that the holders would
otherwise have been entitled to receive) the number of shares of Common Stock or
other securities of the Corporation that such holder would have owned or would
have been entitled to receive upon or by reason of any of the events described
above, had such share of Designated Preferred Stock been converted immediately
prior to the occurrence of such event.

          (e) Automatic Conversion.

               (i) Each share of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock and Series E-2 Preferred Stock shall automatically be converted into
shares of Common Stock at the then effective relevant Conversion Price upon
either (i) the closing of a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Common Stock for the account of
the Corporation to the public at an initial public offering price per share of
not less than an amount equal to two times the Series E-2 Conversion Price then
in effect with net proceeds to the Corporation of not less than $50,000,000 or
(ii) any other public offering upon the written election of the Company and
holders of at least sixty-six and two-thirds percent (66 2/3 %) of the
outstanding shares of Preferred Stock, voting together on an as-converted basis
(a "Qualified Initial Public Offering").

               (ii) Each share of Series A Preferred Stock, Series B Preferred
Stock, and Series C Preferred Stock shall automatically be converted into shares
of Common Stock at the then relevant Conversion Price upon the written election
of the holders of not less than sixty-six and two-thirds percent (66 2/3%) in
voting power of the then outstanding shares of Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock voting together, treating all
such shares as if converted, to require such mandatory conversion.


                                       21



               (iii) Each share of Series D Preferred Stock shall automatically
be converted into shares of Common Stock at the then relevant Series D
Conversion Price upon the written election of the holders of not less than
sixty-six and two-thirds percent (66 2/3%) in voting power of the then
outstanding shares of Series D Preferred Stock, voting as a separate class,
treating all such shares as if converted, to require such mandatory conversion.

               (iv) Each share of Series E Preferred Stock and Series E-2
Preferred Stock shall automatically be converted into shares of Common Stock at
the then relevant Series E Conversion Price and Series E-2 Conversion Price,
respectively, upon the written election of the holders of not less than
sixty-six and two-thirds percent (66 2/3%) in voting power of the then
outstanding shares of Series E Preferred Stock and Series E-2 Preferred Stock,
voting together, treating all such shares as if converted, to require such
mandatory conversion.

               (v) Upon the occurrence of an event specified in Sections 2(e)(i)
or 2(e)(ii) in the case of Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock or 2(e)(iii) in the case of Series D Preferred
Stock or 2(e)(iv) in the case of Series E Preferred Stock and Series E-2
Preferred Stock all applicable shares of Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock, or Series D Preferred Stock,
Series E Preferred Stock or Series E-2 Preferred Stock, as the case may be,
shall be converted automatically without any further action by any holder of
such shares and whether or not the certificate or certificates representing such
shares are surrendered to the Corporation or the designated transfer agent,
provided, however, that the Corporation shall not be obligated to issue a
certificate or certificates evidencing the shares of Common Stock into which
such shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series
E-2 Preferred Stock, as the case may be, are converted unless the certificate or
certificates representing such shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock or Series E-2 Preferred Stock, as the case may be, being
converted are either delivered to the Corporation or the transfer agent, or the
holder notifies the Corporation or such transfer agent that such certificate or
certificates have been lost, stolen, or destroyed and executes and delivers an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection therewith and, if the Corporation so elects,
provides an appropriate indemnity.

               (vi) Upon the automatic conversion of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Series E-2 Preferred Stock, as the case may be,
each holder of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series
E-2 Preferred Stock, as the case may be, shall surrender the certificate or
certificates representing such holder's shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Series E-2 Preferred Stock, as the case may be, at
the office of the Corporation or of the transfer agent for such shares.
Thereupon, there shall be issued and delivered to such holder, promptly at such
office and in such holder's name as shown on such surrendered certificate or
certificates, a


                                       22



certificate or certificates for the number of shares of Common Stock into which
the shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock Series E Preferred Stock and Series
E-2 Preferred Stock, as the case may be, surrendered were convertible on the
date on which such automatic conversion occurred. No fractional shares of Common
Stock shall be issued upon the automatic conversion of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock or Series E-2 Preferred Stock. In lieu of any
fractional shares of Common Stock to which the holder would otherwise be
entitled, the Corporation shall pay cash equal to such fraction multiplied by
the then effective Conversion Price.

          (f) In case of any capital reorganization or reclassification or other
change of outstanding shares of Common Stock (other than (i) a change in par
value, or from par value to no par value, or from no par value to par value or
(ii) a split, subdivision, combination or consolidation of shares of Common
Stock provided for in Section D.2(d) of this Article FOURTH), or in case of any
consolidation or merger of the Corporation with or into another entity (other
than a consolidation or merger in which the Corporation is the resulting or
surviving corporation and which does not result in any reclassification or
change of outstanding Common Stock), or in case of any sale, lease or other
disposition to another entity of all or substantially all of the assets or
intellectual property of the Corporation (any of the foregoing but excluding a
Reorganization (as defined in Section D.1(c) of this Article FOURTH), a
"Transaction"), the Corporation, or such successor or purchasing entity, as the
case may be, shall execute and deliver to each holder of Designated Preferred
Stock at least 10 business days prior to effecting any of the foregoing
Transactions a certificate that the holder of each share of Designated Preferred
Stock then outstanding shall have the right thereafter to convert such share of
Designated Preferred Stock into the kind and amount of shares of stock or other
securities (of the Corporation or another issuer) or property or cash receivable
upon such Transaction by a holder of the number of shares of Common Stock into
which such share of Designated Preferred Stock could have been converted
immediately prior to such Transaction. Such certificate shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section D.2(c)(v) of this Article FOURTH. If, in the
case of any such Transaction, the stock, other securities, cash or property
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities of an entity other than the successor or purchasing entity and
other than the Corporation, which controls or is controlled by the successor or
purchasing entity or which, in connection with such Transaction, issues stock,
securities, other property or cash to holders of Common Stock, then such
certificate also shall be executed by such entity, and such entity shall, in
such certificate, specifically acknowledge the obligations of such successor or
purchasing entity and acknowledge its obligations to issue such stock,
securities, other property or cash to the holders of Designated Preferred Stock
upon conversion of the shares of Designated Preferred Stock as provided above.
The provisions of this Section D.2(f) and any equivalent thereof in any such
certificate shall apply similarly to successive Transactions. Compliance with
this Section D.2(f) shall be a condition for any Transaction.


                                       23



          (g) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the relevant Conversion Price pursuant to this
Section 2, the Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to each affected
holder of Designated Preferred Stock, a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any affected holder of Designated Preferred Stock furnish
to such holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon conversion of each share of Designated
Preferred Stock.

          (h) Notices of Record Date. In the event that this Corporation shall
propose at any time:

               (i) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock, or other securities, whether or not a
regular cash dividend and whether or not out of earnings or earned surplus;

               (ii) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights, warrants, options or other securities;

               (iii) to effect any reclassification or recapitalization of its
Common Stock outstanding involving a change in the Common Stock; or

               (iv) to engage in any Reorganization or Transaction, or to
liquidate, dissolve, or wind up; then, in connection with each such event, this
Corporation shall send to the holders of the Designated Preferred Stock:

                    (1) at least 10 days' prior written notice of the date on
     which a record shall be taken for such dividend, distribution, or
     subscription rights (and specifying the date on which the holders of Common
     Stock shall be entitled thereto) or for determining rights to vote in
     respect of the matters referred to in (iii) and (iv) above; and

                    (2) in the case of the matters referred to in (iii) and (iv)
     above, at least 10 days' prior written notice of the date when the same
     shall take place (and specifying the date on which the holders of Common
     Stock shall be entitled to exchange their Common Stock for securities or
     other property deliverable upon the occurrence of such event or the record
     date for the determination of such holders if such record date is earlier).

          Each such written notice shall be delivered personally by carrier
service providing evidence of delivery or given by first class mail, postage
prepaid, addressed to the holders of the


                                       24



Designated Preferred Stock at the address for each such holder as shown on the
books of this Corporation; provided, however, that United States mail shall not
be used to effectuate the delivery of any such to addresses outside the United
States. Each such written notice shall state (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights, warrants,
options or other securities, or if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution or rights, warrants, options or other securities are to be
determined, or (y) the date on which such Reorganization, Transaction,
reclassification, recapitalization, dissolution, liquidation or winding up is
expected to become effective. Such notice also shall specify the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their Common Stock for shares of stock or other securities or property
or cash deliverable upon such Reorganization, Transaction, reclassification,
recapitalization, dissolution, liquidation or winding up.

          (i) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Designated Preferred Stock, and shall
take all action required to increase the authorized number of shares of Common
Stock if at any time there shall be insufficient authorized but unissued shares
of Common Stock to permit such reservation or to permit the conversion of all
outstanding shares of Designated Preferred Stock.

          (j) Certain Taxes. The Corporation shall pay any issue or transfer
taxes payable in connection with the conversion of any shares of Designated
Preferred Stock, provided, however, that the Corporation shall not be required
to pay any tax which may be payable in respect of any transfer to a name other
than that of the holder of such Designated Preferred Stock.

          (k) Closing of Books. The Corporation shall at no time close its
transfer books against the transfer of any Designated Preferred Stock, or of any
shares of Common Stock issued or issuable upon the conversion of any shares of
Designated Preferred Stock in any manner which interferes with the timely
conversion or transfer of such Designated Preferred Stock.

          (l) No Impairment. The Corporation shall not, by amendment of its
Certificate of Incorporation (other than by amendment approved by the Designated
Preferred Stock in accordance with the provisions of this Certificate of
Incorporation) or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation but shall at all times in
good faith assist in the carrying out of all the provisions of this Section 2
and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Series E-2 Preferred Stock against impairment.


                                       25



          3. Voting Rights.

          (a) Except as otherwise provided by applicable law and this Restated
Certificate of Incorporation, each holder of outstanding shares of Designated
Preferred Stock shall be entitled to the number of votes equal to the number of
whole shares of Common Stock into which the shares of Designated Preferred Stock
held by such holder are convertible (as adjusted from time to time pursuant to
Section 2 hereof) as of the record date, at each meeting of stockholders of the
Corporation (and written actions of stockholders in lieu of meetings) with
respect to any and all matters presented to the stockholders of the Corporation
for their action or consideration. Except as provided by law or by the
provisions of Section 3(b), (c), (d), (e) and (f) below or by the provisions
establishing any other series of stock, holders of Designated Preferred Stock
and of any other outstanding series of stock shall vote together with the
holders of Common Stock as a single class on an as-converted to Common Stock
basis.

          (b) Notwithstanding the provisions of Section 3(a), at each annual or
special meeting called for the purpose of electing directors, the holders of the
Designated Preferred Stock, voting as a single class, shall be entitled to elect
five (5) members of the Board of Directors and the holders of the Common Stock
shall be entitled to elect two (2) members of the Board of Directors and the
remaining directors shall be elected by the holders of Designated Preferred
Stock and the holders of Common Stock voting together as a single class. The
provisions of this Section 3(b) shall expire and be of no further force or
effect upon conversion of all outstanding shares of Designated Preferred Stock
into Common Stock pursuant to the provisions of Section 2(a) or 2(e) hereof. In
the case of any vacancy in the office of a director elected by a specified group
of stockholders, a successor shall be elected to hold office for the unexpired
term of such director by the affirmative vote of a majority of the shares of
such specified group given at a special meeting of such stockholders duly called
or by an action by written consent for that purpose. Any director who shall have
been elected by a specified group of stockholders may be removed during the
aforesaid term of office, either for or without cause, by, and only by, the
affirmative vote of the holders of a majority of the shares of such specified
group, given at a special meeting of such stockholders duly called or by an
action by written consent for that purpose, and any such vacancy thereby
created, may be filled by the vote of the holders of a majority of the shares of
such specified group represented at such meeting or in such consent.

          (c) The Corporation shall not, without first having obtained the
affirmative vote or written consent of a majority in voting power of the
outstanding shares of Designated Preferred Stock, voting together as a single
class on an as-converted to Common Stock basis:

               (i) Subject to the additional restrictions set forth in Sections
D.3(e) and (f) of this Article FOURTH, redeem, purchase or otherwise acquire for
value (or pay into or set aside for a sinking fund for such purpose) any shares
of Designated Preferred Stock otherwise than by conversion in accordance with
Section D.2 of this Article FOURTH;

               (ii) Authorize or issue, or obligate itself to issue, any other
equity security (including any security convertible into or exercisable for any
equity security) senior to


                                       26



or on a parity with any of the Designated Preferred Stock as to dividend rights,
redemption rights, liquidation preferences, voting rights, where any equity
security issued shall have more than one vote for each such security issued or
be convertible into a voting security which has more than one vote for such
equity security issued, or conversion rights, where any equity security issued
shall be convertible into more than one voting equity security, except for
adjustments made to all Preferred Stock in connection with (A) any stock split,
reverse stock split or like transaction, or (B) any dilutive issuances;

               (iii) Make any redemption, repurchase, payment of dividends or
other distributions with respect to Common Stock (except for acquisitions of
Common Stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares upon termination of services to the
Corporation or in exercise of the Corporation's right of first refusal upon a
proposed transfer);

               (iv) Effect any sale, lease, transfer or other conveyance of all
or substantially all of the assets or intellectual property of the Corporation
or any of its subsidiaries, or any consolidation or merger involving the
Corporation or any of its subsidiaries, or any reclassification or
recapitalization of the Corporation;

               (v) Increase the number of shares reserved under the Company's
1998 Employee, Director and Consultant Stock Option Plan (as amended from
time-to-time); or

               (vi) Increase the number of authorized shares of Preferred Stock.

          (d) The Corporation shall not, without first having obtained the
affirmative vote or written consent of a majority in voting power of the
outstanding shares of Series D Preferred Stock, Series E Preferred Stock and
Series E-2 Preferred Stock, voting together as a single class on an as converted
to Common Stock basis:

               (i) Alter or change the preferences, rights, privileges or powers
of, or the restrictions provided for the benefit of, the Series D Preferred
Stock, the Series E Preferred Stock or the Series E-2 Preferred Stock in a
material and adverse way;

               (ii) Authorize or issue, or obligate itself to issue, any other
equity security (including any security convertible into or exercisable for any
equity security) senior to or on a parity with any of the Series D Preferred
Stock, the Series E Preferred Stock or Series E-2 Preferred Stock as to dividend
rights, redemption rights, liquidation preferences, voting rights, where any
equity security issued shall have more than one vote for each such security
issued or be convertible into a voting security which has more than one vote for
such equity security issued, or conversion rights, where any equity security
issued shall be convertible into more than one voting equity security, except
for adjustments made to all Preferred Stock in connection with (A) any stock
split, reverse stock split or like transaction, or (B) any dilutive issuances;

               (iii) Increase or decrease the authorized number of shares of the
Series D Preferred Stock, the Series E Preferred Stock or the Series E-2
Preferred Stock;


                                       27



               (iv) Amend, alter or repeal any provision of the Restated
Certificate of Incorporation or the Corporation's Bylaws so as to adversely
affect the rights, powers, preferences and privileges of the Series D Preferred
Stock, the Series E Preferred Stock or the Series E-2 Preferred Stock
(including, without limitation, by merger, reconsolidation, recapitalization or
other transactions);

               (v) Effect any sale, lease, transfer or other conveyance of all
or substantially all of the Corporation's assets or intellectual property or
consummate a transaction which results in the holders of the Corporation's
capital stock prior to the transaction owning less than 50% of the voting power
of the Corporation's capital stock after the transaction;

               (vi) Increase or decrease the number of members of the
Corporation's Board of Directors from nine (9); or

               (vii) Effect a substantial change in the principal business of
the Corporation so that the principal business of the Corporation is no longer
related to the discovery, licensing, development and manufacturing of
prophylactic, therapeutic or diagnostic products; provided, that, such consent
shall not be required if the Corporation's Board of Directors has unanimously
approved such change in the Corporation's business.

          (e) The Corporation shall not, without first having obtained the
affirmative vote or written consent of sixty-six and two-thirds percent (66
2/3%) of the voting power of the outstanding shares of Series D Preferred Stock,
voting on an as converted to Common Stock basis, redeem, purchase or otherwise
acquire for value (or pay or set aside for a sinking fund or for any purpose)
any shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or any Junior Stock prior to redeeming, purchasing or otherwise
acquiring for value all of the outstanding shares of Series D Preferred Stock;
provided, however, that any Junior Stock subject to a restriction agreement (or
equivalent terms in any option agreement) may be reacquired by the Corporation
pursuant to the terms of such agreement, if, in the judgment of the Board of
Directors, such reacquisition is in the best interest of the stockholders.

          (f) The Corporation shall not, without first having obtained the
affirmative vote or written consent of sixty-six and two-thirds percent
(66-2/3%) of the voting power of the outstanding shares of Series E Preferred
Stock and Series E-2 Preferred Stock, voting together as a single class on an as
converted to Common Stock basis, (i) notwithstanding anything to the contrary
set forth in Subsection 3(d)(iv), amend the definition of Liquidation Event set
forth in Subsection 1(a) or Subsection 1(c), or (ii) redeem, purchase or
otherwise acquire for value (or pay or set aside for a sinking fund or for any
purpose) any shares of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock or any Junior Stock prior to
redeeming, purchasing or otherwise acquiring for value all of the outstanding
shares of Series E Preferred Stock and Series E-2 Preferred Stock, provided,
however, that any Junior Stock subject to a restriction agreement (or equivalent
terms in any option agreement) may be reacquired by the Corporation pursuant to
the terms of such agreement, if, in the judgment of the Board of Directors, such
reacquisition is in the best interest of the stockholders.


                                       28



          (g) The Corporation shall not, without first having obtained the
affirmative vote or written consent of seventy-five percent (75%) of the voting
power of the outstanding shares of Series E Preferred Stock, voting on an as
converted to Common Stock basis, amend the requirements with respect to the
effectiveness of any waivers of adjustments to the Series E Conversion Price as
a result of the issuance of Additional Shares of Common Stock or otherwise set
forth in Subsection 2(c)(ii).

          (h) The Corporation shall not, without first having obtained the
affirmative vote or written consent of seventy-five percent (75%) of the voting
power of the outstanding shares of Series E-2 Preferred Stock, voting on an as
converted to Common Stock basis, amend the requirements with respect to the
effectiveness of any waivers of adjustments to the Series E-2 Conversion Price
as a result of the issuance of Additional Shares of Common Stock or otherwise
set forth in Subsection 2(c)(ii).

          Notwithstanding the foregoing, approval of a majority of the voting
power of any series of Preferred Stock, voting as a single class, shall be
required for any action that (i) materially and adversely affects holders of
such series in a different manner than other series of Designated Preferred
Stock; provided, however, that the determination of whether any holder of
Preferred Stock or group of such holders is affected differently shall be made
without regard to the number of shares of Shares held by such holder or group of
holders; (ii) increases the Conversion Price of such series or (iii) alters or
changes the liquidation preferences of any such series.

          4. Dividends.

          (a) The Corporation shall not declare or pay any dividends or
distributions (as defined below) on shares of Common Stock unless the holders of
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock and Series E-2
Preferred Stock then outstanding shall have first received, or simultaneously
receive, a like distribution on each outstanding share of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock and Series E-2 Preferred Stock in an amount at
least equal to the product of (i) the per share amount, if any, of the dividends
or distributions to be declared or paid on the Common Stock, multiplied by (ii)
the number of whole shares of Common Stock into which such share of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock or Series E-2 Preferred Stock is
convertible as of the record date for such dividend or distribution.

          (b) The Corporation shall not declare or pay any dividends or
distributions on shares of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock. Series E Preferred Stock or
Series E-2 Preferred Stock unless the holders of the other series of Designated
Preferred Stock shall have first received, or simultaneously receive, a like
distribution on each outstanding share of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock or Series E-2


                                       29



Preferred Stock, as the case may be, in an equal amount; provided, however, the
Corporation shall not pay any dividends or distributions on any shares of Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock or any Junior Stock prior to paying in full such equal dividends
or distributions on all of the outstanding shares of the Series E Preferred
Stock and Series E-2 Preferred Stock; provided, further, the Corporation shall
not pay any dividends or distributions on any shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or any Junior Stock
prior to paying in full such equal dividends or distributions on all of the
outstanding shares of the Series D Preferred Stock. For purposes of this Section
4(b), the determination of whether such dividends or distributions are equal in
amount shall be made based on a comparison of the product of (i) the amount per
share of Designated Preferred Stock of the dividends or distributions to be
declared or set aside multiplied by (ii) the number of whole shares of Common
Stock into which such share of Designated Preferred Stock is convertible as of
the record date for such dividend or distribution.

          (c) For purposes of this Section 4, "distribution" shall mean the
transfer of cash or property without consideration, whether by way of dividend
or otherwise, or the purchase or redemption of shares of the Corporation (other
than repurchases of Common Stock held by employees or directors of, or
consultants to, the Corporation upon termination of their employment or services
pursuant to agreements approved by the Board of Directors providing for such
repurchase at a price equal to the original issue price of such shares or at
fair market value, provided such repurchase at fair market value is approved by
the Board of Directors) for cash or property, including any such transfer,
purchase or redemption by a subsidiary of the Corporation.

          5. No Reissuance of Designated Preferred Stock. No share or shares of
Preferred Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the corporation shall be
authorized to issue.

          6. Residual Rights. All rights accruing to the outstanding shares of
the Corporation not expressly provided for in the terms of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock and Series E-2 Preferred Stock shall
be vested in the Common Stock.

          7. Increasing Common Stock. The number of authorized shares of Common
Stock may be increased or decreased (but not below the number of shares of
Common Stock then outstanding) by an affirmative vote of the holders of a
majority of the Common Stock and the Designated Preferred Stock, voting together
as a single class, on an as-converted basis.

     FIFTH The Corporation is to have perpetual existence.

     SIXTH For the management of the business and for the conduct of the affairs
of the Corporation, and in further definition and not in limitation of the
powers of the Corporation and of its directors and of its stockholders or any
class thereof, as the case may be, conferred by the State of Delaware, it is
further provided that:


                                       30



          A. The management of the business and the conduct of the affairs of
the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed by,
or in the manner provided in, the By-Laws. The phrase "whole Board" and the
phrase "total number of directors" shall be deemed to have the same meaning, to
wit, the total number of directors which the Corporation would have if there
were no vacancies. No election of directors need be by written ballot.

          B. After the original or other By-Laws of the Corporation have been
adopted, amended or repealed, as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State of
Delaware, and, after the Corporation has received any payment for any of its
stock, the power to adopt, amend, or repeal the By-Laws of the Corporation may
be exercised by the Board of Directors of the Corporation.

          C. The books of the Corporation may be kept at such place within or
without the State of Delaware as the By-Laws of the Corporation may provide or
as may be designated from time to time by the Board of Directors of the
Corporation.

     SEVENTH The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented from time to time, indemnify and advance expenses to,
(i) its directors and officers and (ii) any person who at the request of the
Corporation is or was serving as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, from
and against any and all of the expenses, liabilities, or other matters referred
to in or covered by said section as amended or supplemented (or any successor),
provided, however, that except with respect to proceedings to enforce rights to
indemnification, the By-Laws of the Corporation may provide that the Corporation
shall indemnify any director, officer or such person in connection with a
proceeding (or part thereof) initiated by such director, officer or such person
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The Corporation, by action of its Board of
Directors, may provide indemnification or advance expenses to employees and
agents of the Corporation or other persons only on such terms and conditions and
to the extent determined by the Board of Directors in its sole and absolute
discretion. The indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in their official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.

     EIGHTH No director of this Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except to the extent that exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as in effect at the time such liability or limitation thereof
is determined. No amendment, modification or repeal of this Article shall apply
to or have any effect on the liability or alleged liability of any director of
the Corporation for or with


                                       31



respect to any acts or omissions of such director occurring prior to such
amendment, modification or repeal. If the General Corporation Law of the State
of Delaware is amended after approval by the stockholders of this Article to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended.

     NINTH Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths (3/4) in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

                  [Remainder of page intentionally left blank.]


                                       32



          IN WITNESS WHEREOF, the Corporation has caused this Restated
Certificate of Incorporation to be signed by its duly authorized officer this
21st day of September, 2005.

                                        PTC THERAPEUTICS, INC.


                                        By: /S/ STUART W. PELTZ
                                            ------------------------------------
                                        Name: Stuart W. Peltz
                                        Title: President

                                                                     Exhibit 3.3

                           AMENDED AND RESTATED BYLAWS
                                       of
                             PTC THERAPEUTICS, INC.

                                    ARTICLE I
                                  STOCKHOLDERS

     Section 1. Annual Meeting.

An annual meeting of the stockholders, for the election of directors to succeed
those whose terms expire and for the transaction of such other business as may
properly come before the meeting, shall be held at ten o'clock a.m. or such
other time as is determined by the Board of Directors, on such date (other than
a Saturday, Sunday or legal holiday) as is determined by the Board of Directors,
which date shall be within thirteen (13) months subsequent to the later of the
date of incorporation or the last annual meeting of stockholders, and at such
place as the Board of Directors shall each year fix.

     Section 2. Special Meetings.

Subject to the rights of the holders of any class or series of preferred stock
of the Corporation, special meetings of stockholders of the Corporation may be
called only by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors authorized. Special meetings of the
stockholders may be held at such place within or without the State of Delaware
as may be stated in such resolution.

     Section 3. Notice of Meetings.

Written notice of the place, date, and time of all meetings of the stockholders
shall be given, not less than ten (10) nor more than sixty (60) days before the
date on which the meeting is to be held, to each stockholder entitled to vote at
such meeting, except as otherwise provided herein or required by law (meaning,
here and hereinafter, as required from time to time by the Delaware General
Corporation Law or the Certificate of Incorporation of the Corporation) (the
"Certificate of Incorporation").

When a meeting is adjourned to another place, date or time, written notice need
not be given of the adjourned meeting if the place, date and time thereof are
announced at the meeting at which the adjournment is taken; provided, however,
that if the date of any adjourned meeting is more than thirty (30) days after
the date for which the meeting was originally noticed, or if a new record date
is fixed for the adjourned meeting, written notice of the place, date, and time
of the adjourned meeting shall be given in conformity herewith. At any adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting.


                                       -1-



     Section 4. Quorum.

At any meeting of the stockholders, the holders of a majority of all of the
shares of the stock entitled to vote at the meeting, present in person or by
proxy, shall constitute a quorum for all purposes, unless or except to the
extent that the presence of a larger number may be required by law. Except as
otherwise provided in the Certificate of Incorporation, where a separate vote by
a class or classes is required, a majority of the shares of such class or
classes present in person or represented by proxy shall constitute a quorum
entitled to take action with respect to that vote on that matter.

If a quorum shall fail to attend any meeting, the chairman of the meeting or the
holders of a majority of the shares of stock entitled to vote who are present,
in person or by proxy, may adjourn the meeting to another place, date, or time.

     Section 5. Organization.

The Chairman of the Board of Directors or, in his or her absence, such person as
the Board of Directors may have designated or, in his or her absence, the chief
executive officer of the Corporation or, in his or her absence, such person as
may be chosen by the holders of a majority of the shares entitled to vote who
are present, in person or by proxy, shall call to order any meeting of the
stockholders and act as chairman of the meeting. In the absence of the Secretary
of the Corporation, the secretary of the meeting shall be such person as the
chairman of the meeting appoints.

     Section 6. Conduct of Business.

The Chairman of the Board of Directors or his or her designee or, if neither the
Chairman of the Board nor his or her designee is present at the meeting, then a
person appointed by a majority of the Board of Directors, shall preside at, and
act as chairman of, any meeting of the stockholders. The chairman of any meeting
of stockholders shall determine the order of business and the procedures at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as he or she deems to be appropriate.

     Section 7. Proxies and Voting.

At any meeting of the stockholders, every stockholder entitled to vote may vote
in person or by proxy authorized by an instrument in writing filed in accordance
with the procedure established for the meeting.

Each stockholder shall have one (1) vote for every share of stock entitled to
vote which is registered in his or her name on the record for the meeting,
except as otherwise provided herein, in the Certificate of Incorporation or
required by law.

All voting, including on the election of directors but excepting where otherwise
required by law, may be by a voice vote; provided, however, that upon demand
therefore by a stockholder entitled to vote or his or her proxy, a vote by
ballot shall be taken.


                                      -2-



Elections shall be determined in accordance with the voting provisions set forth
in the Corporation's Certificate of Incorporation and in the Second Amended and
Restated Management and Voting Agreement by and among the Corporation and the
stockholders who are signatories thereto, dated as of December 17, 2003
("MVRA"). Except as otherwise provided in the Corporation's Certificate of
Incorporation, the MVRA or required by law, all other matters shall be
determined by a majority of the votes cast.

     Section 8. Action Without Meeting.

Any action required to be taken at any annual or special meeting of
stockholders, or any action which may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be (1) signed and dated by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action on a meeting at which all shares entitled to vote thereon
were present and voted and (2) delivered to the Corporation within sixty (60)
days of the earliest dated consent by delivery to its registered office in the
State of Delaware (in which case delivery shall be by hand or by certified or
registered mail, return receipt requested), its principal place of business, or
an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.

     Section 9. Stock List.

A complete list of stockholders entitled to vote at any meeting of stockholders,
arranged in alphabetical order for each class of stock and showing the address
of each such stockholder and the number of shares registered in his or her name,
shall be open to the examination of any such stockholder, for any purpose
germane to the meeting, during ordinary business hours for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.

The stock list shall also be kept at the place of the meeting during the whole
time thereof and shall be open to the examination of any such stockholder who is
present. Such list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.

                                   ARTICLE II
                               BOARD OF DIRECTORS

     Section 1. Number, Election, Tenure and Qualification.

     The number of directors which shall constitute the whole board shall be
nine (9) directors. The directors shall be elected at any annual or special
meeting of the Corporation's stockholders, or upon an action by written consent,
called or solicited for such purpose, in accordance with the voting provisions
set forth in the Corporation's Certificate of Incorporation and in the MVRA, and


                                       -3-



each director shall hold office until his or her successor is elected and
qualified, unless sooner displaced. Directors need not be stockholders.

     Section 2. Vacancies and Newly Created Directorships.

     Vacancies on the Board of Directors shall be filled in accordance with the
provisions set forth in the Corporation's Certificate of Incorporation and the
MVRA. New directorship of the Board of Directors may only be created in
accordance with the voting provisions set forth in the Corporation's Certificate
of Incorporation and may only be filled in accordance with the provisions set
forth in the Corporation's Certificate of Incorporation and the MVRA.

     Section 3. Resignation.

Any director may resign at any time upon written notice to the Corporation at
its principal place of business or to the chief executive officer or secretary.
Such resignation shall be effective upon receipt unless it is specified to be
effective at some other time or upon the happening of some other event.

     Section 4. Regular Meetings.

Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
written notice of each regular meeting shall not be required.

     Section 5. Special Meetings.

Special meetings of the Board of Directors may be called by the Chairman of the
Board of Directors, if any, the President, the Treasurer, the Secretary or one
or more of the directors then in office and shall be held at such place, on such
date, and at such time as they or he or she shall fix. Notice of the place,
date, and time of each such special meeting shall be given to each director by
whom it is not waived by mailing written notice not less than three (3) days
before the meeting or orally, by telegraph, telex, cable or telecopy given not
less than twenty-four (24) hours before the meeting. Unless otherwise indicated
in the notice thereof, any and all business may be transacted at a special
meeting.

     Section 6. Quorum.

At any meeting of the Board of Directors, a majority of the total number of
members of the Board of Directors shall constitute a quorum for all purposes. If
a quorum shall fail to attend any meeting, a majority of those present may
adjourn the meeting to another place, date, or time, without further notice or
waiver thereof.

     Section 7. Action by Consent.

Unless otherwise restricted by the Certificate of Incorporation or these Bylaws,
any action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting, if all
members of the Board or committee, as the case may


                                      -4-



be, consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.

     Section 8. Participation in Meetings By Conference Telephone.

Members of the Board of Directors, or of any committee thereof, may participate
in a meeting of such Board or committee by way of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other and such participation shall constitute presence
in person at such meeting.

     Section 9. Conduct of Business.

At any meeting of the Board of Directors, business shall be transacted in such
order and manner as the Board may from time to time determine, and all matters
shall be determined by the vote of a majority of the directors present, except
as otherwise provided herein or required by law.

     Section 10. Powers.

The Board of Directors may, except as otherwise required by law or the
Certificate of Incorporation, exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation, including, without
limiting the generality of the foregoing, the qualified power:

     (a) To declare dividends from time to time in accordance with law and the
Certificate of Incorporation;

     (b) To purchase or otherwise acquire any property, rights or privileges on
such terms as it shall determine;

     (c) To authorize the creation, making and issuance, in such form as it may
determine, of written obligations of every kind, negotiable or non-negotiable,
secured or unsecured, to borrow funds and guarantee obligations, and to do all
things necessary in connection therewith;

     (d) To remove any officer of the Corporation with or without cause, and
from time to time to devolve the powers and duties of any officer upon any other
person for the time being;

     (e) To confer upon any officer of the Corporation the power to appoint,
remove and suspend subordinate officers, employees and agents;

     (f) To adopt from time to time such stock, option, stock purchase, bonus or
other compensation plans of directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine;

     (g) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the Corporation
and its subsidiaries as it may determine; and,


                                      -5-



     (h) To adopt from time to time regulations, not inconsistent with these
Bylaws, for the management of the Corporation's business and affairs.

     Section 11. Compensation of Directors.

Directors, as such, may receive, pursuant to a resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, their services as members of committees of the
Board of Directors.

                                   ARTICLE III
                                   COMMITTEES

     Section 1. Committees of the Board of Directors.

The Board of Directors, by a vote of a majority of the Board of Directors, may
from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors, subject to the rights of any preferred
stockholder pursuant to the MVRA, to serve as the member or members,
designating, if it desires other directors as alternate members who may replace
any absent or disqualified member at any meeting of the committee. Any such
committee, to the extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in reference
to amending the Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease, or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or amending the Bylaws of the Corporation. Any committee so
designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of ownership and merger pursuant to Section 253 of the Delaware General
Corporation Law if the resolution which designates the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member subject to the rights of any preferred stockholder pursuant to the MVRA.

     Section 2. Conduct of Business.

Each Committee may determine the procedural rules for meeting and conducting its
business and shall act in accordance therewith, except as otherwise provided
herein or required by law. Adequate provision shall be made for notice to
members of all meetings; one-third (1/3) of the members shall constitute a
quorum; and all matters shall be determined by a majority vote of the members
present. Action may be taken by any committee without a meeting if all members
thereof


                                      -6-



consent thereto in writing, and the writing or writings are filed with the
minutes of the proceedings of such committee.

                                   ARTICLE IV
                                    OFFICERS

     Section 1. Enumeration.

The officers of the Corporation shall be the President, the Treasurer, the
Secretary and such other officers as the Board of Directors or the Chairman of
the Board may determine, including, but not limited to, the Chairman of the
Board of Directors, one or more Vice Presidents, Assistant Treasurers and
Assistant Secretaries.

     Section 2. Election and Compensation.

Officers shall be elected by the Board of Directors at its first meeting
following every annual meeting of stockholders. The compensation of the
officers elected by the Board of Directors shall be fixed from time to time, by
the Board of Directors or by such officers as may be designated by resolution of
the Board of Directors.

     Section 3. Qualification.

No officer need be a stockholder. The Chairman of the Board, if any, and any
Vice Chairman appointed to act in the absence of the Chairman, if any, shall be
elected by and from the Board of Directors, but no other officer need be a
director. Two or more offices may be held by any one person. If required by vote
of the Board of Directors, an officer shall give bond to the Corporation for the
faithful performance of his or her duties, in such form and amount and with such
sureties as the Board of Directors may determine. The premiums for such bonds
shall be paid by the Corporation.

     Section 4. Tenure and Removal.

Each officer shall hold office until the first meeting of the Board of Directors
following the next annual meeting of the stockholders and until his or her
successor is elected or appointed and qualified, or until he or she dies,
resigns, is removed or becomes disqualified, unless a shorter term is specified
in the vote electing or appointing said officer. Any officer may resign by
giving written notice of his or her resignation to the Chairman of the Board, if
any, the President, or the Secretary, or to the Board of Directors at a meeting
of the Board, and such resignation shall become effective at the time specified
therein. Any officer may be removed from office with or without cause by vote of
a majority of the directors.

     Section 5. Chairman of the Board.

The Chairman of the Board, if any, shall preside at all meetings of the Board of
Directors and stockholders at which he or she is present and shall have such
authority and perform such duties as may be prescribed by these Bylaws or from
time to time be determined by the Board of Directors.


                                      -7-



     Section 6. President.

The President shall, subject to the control and direction of the Board of
Directors, have and perform such powers and duties as may be prescribed by these
Bylaws or from time to time be determined by the Board of Directors.

     Section 7. Vice Presidents.

The Vice Presidents, if any, in the order of their election, or in such other
order as the Board of Directors may determine, shall have and perform the powers
and duties of the President (or such of the powers and duties as the Board of
Directors may determine) whenever the President is absent or unable to act. The
Vice Presidents, if any, shall also have such other powers and duties as may
from time to time be determined by the Board of Directors.

     Section 8. Treasurer and Assistant Treasurers.

The Treasurer shall, subject to the control and direction of the Board of
Directors, have and perform such powers and duties as may be prescribed in these
Bylaws or be determined from time to time by the Board of Directors. All
property of the Corporation in the custody of the Treasurer shall be subject at
all times to the inspection and control of the Board of Directors. Unless
otherwise voted by the Board of Directors, each Assistant Treasurer, if any,
shall have and perform the powers and duties of the Treasurer whenever the
Treasurer is absent or unable to act, and may at any time exercise such of the
powers of the Treasurer, and such other powers and duties, as may from to time
be determined by the Board of Directors.

     Section 9. Secretary and Assistant Secretaries.

The Board of Directors shall appoint a Secretary and, in his or her absence, an
Assistant Secretary. The Secretary or, in his or her absence, any Assistant
Secretary, shall attend all meetings of the directors and shall record all votes
of the Board of Directors and minutes of the proceedings at such meetings. The
Secretary or, in his or her absence, any Assistant Secretary, shall notify the
directors of their meetings, and shall have and perform such other powers and
duties as may from time to time be determined by the Board of Directors. If the
Secretary or an Assistant Secretary is elected but is absent from any meeting of
directors, a temporary secretary may be appointed by the directors at the
meeting.

     Section 10. Bond.

If required by the Board of Directors, any officer shall give the Corporation a
bond in such sum and with such surety or sureties and upon such terms and
conditions as shall be satisfactory to the Board of Directors, including without
limitation a bond for the faithful performance of the duties of his office and
for the restoration to the Corporation of all books, papers, vouchers, money and
other property of whatever kind in his or her possession or under his or her
control and belonging to the Corporation.


                                      -8-



     Section 11. Action with Respect to Securities of Other Corporations.

Unless otherwise directed by the Board of Directors, the President, the
Treasurer or any officer of the Corporation authorized by the President shall
have power to vote and otherwise act on behalf of the Corporation, in person or
by proxy, at any meeting of stockholders of, or with respect to any action of
stockholders of any other corporation in which this Corporation may hold
securities and otherwise to exercise any and all rights and powers which this
Corporation may possess by reason of its ownership of securities in such other
corporation.

                                    ARTICLE V
                                      STOCK

     Section 1. Certificates of Stock.

Each stockholder shall be entitled to a certificate signed by, or in the name
of, the Corporation by the Chairman of the Board of Directors, or the President
or a Vice President, and by the Treasurer or Assistant Treasurer, or the
Secretary or an Assistant Secretary, certifying the number of shares owned by
him or her. Any or all of the signatures on the certificate may be by facsimile.

     Section 2. Transfers of Stock.

Transfers of stock shall be made only upon the transfer books of the Corporation
kept at an office of the Corporation or by transfer agents designated to
transfer shares of the stock of the Corporation. Except where a certificate is
issued in accordance with Section 4 of this Article of these Bylaws, an
outstanding certificate for the number of shares involved shall be surrendered
for cancellation before a new certificate is issued therefore.

     Section 3. Record Date.

In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders, or to receive payment of any
dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, subject to the notice provisions of the Certificate of Incorporation,
which record date shall not precede the date on which the resolution fixing the
record date is adopted and which record date shall not be more than sixty (60)
nor 1ess than ten (10) days before the date of any meeting of stockholders, nor
more than sixty (60) days prior to the time for such other action hereinbefore
described; provided, however, that if no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held, and, for determining stockholders entitled to receive payment of any
dividend or other distribution or allotment of rights or to exercise any rights
of change, conversion or exchange of stock or for any other purpose, the record
date shall be at the close of business on the day on which the Board of
Directors adopts a resolution relating thereto.


                                      -9-



A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.

     Section 4. Lost, Stolen or Destroyed Certificates.

In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its p1ace pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.

     Section 5. Regulations.

The issue, transfer, conversion and registration of certificates of stock shall
be governed by such other regulations as the Board of Directors may establish.

     Section 6. Interpretation.

Subject to Article XI of these Bylaws, the Board of Directors shall have the
power to interpret all of the terms and provisions of these Bylaws, which
interpretation shall be conclusive.

                                   ARTICLE VI
                                     NOTICES

     Section 1. Notices.

Except as otherwise specifically provided herein, in the Certificate of
Incorporation or required by law, all notices required to be given to any
stockholder, director, officer, employee or agent shall be in writing and may in
every instance be effectively given by hand delivery to the recipient thereof,
by depositing such notice in the mail postage paid, or by sending such notice by
courier service, prepaid telegram or mailgram, or telecopy, cable, or telex. Any
such notice shall be addressed to such stockholder, director, officer, employee
or agent at his or her last known address as the same appears on the books of
the Corporation. The time when such notice is received, if hand delivered, or
dispatched, if delivered through the mail or by courier, telegram, mailgram,
telecopy, cable, or telex shall be the time of the giving of the notice.

     Section 2. Waiver of Notice.

A written waiver of any notice, signed by a stockholder, director, officer,
employee or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, director, officer, employee or agent. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
Attendance of a director or stockholder at a meeting without protesting prior
thereto or at its commencement the lack of notice shall also constitute a waiver
of notice by such director or stockholder.


                                      -10-



                                   ARTICLE VII
                                 INDEMNIFICATION

     Section 1. Actions other than by or in the Right of the Corporation.

The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than action by or in the right of the Corporation) by reason of the fact
that he or she is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees
), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceedings, had no reasonable cause to believe his or
her conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his or
her conduct was unlawful.

     Section 2. Actions by or in the Right of the Corporation.

The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he or she is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
with the defense or settlement of such action or suit if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the extent
that the Court of Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery of the State of Delaware or such other court shall deem
proper.

     Section 3. Success on the Merits.

To the extent that any person described in Section 1 or Section 2 of this
Article has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in said Sections, or in defense of any claim,
issue or matter therein, he or she shall be indemnified against expenses
(including attorneys' fees) actual and reasonably incurred by him or her in
connection therewith.


                                      -11-



     Section 4. Specific Authorization.

Any indemnification under Section 1 or Section 2 of this Article (unless ordered
by a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of any person described in said
Sections is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in said Sections. Such determination shall be made
(1) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (3) by the stockholders of the Corporation.

     Section 5. Advance Payment.

Expenses incurred in defending any civil, criminal, administrative, or
investigative action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of any person described in said Section to
repay such amount if it shall ultimately be determined that he or she is not
entitled to indemnification by the Corporation as authorized in this Article.

     Section 6. Non-Exclusivity.

The indemnification and advancement of expenses provided by, or granted pursuant
to, the other Sections of this Article shall not be deemed exclusive of any
other rights to which those provided indemnification or advancement of expenses
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.

     Section 7. Insurance.

The Board of Directors may authorize, by a vote of the majority of the full
board, the Corporation to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify him or her
against such liability under the provisions of this Article.

     Section 8. Continuation of Indemnification and Advancement of Expenses.

The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.

     Section 9. Severability.

If any word, clause or provision of this Article or any award made hereunder
shall for any reason be determined to be invalid, the provisions hereof shall
not otherwise be affected thereby but shall remain in full force and effect.


                                      -12-



     Section 10. Intent of Article.

The intent of this Article is to provide for indemnification and advancement of
expenses to the fullest extent permitted by Section 145 of the General
Corporation Law of Delaware. To the extent that such Section or any successor
section may be amended or supplemented from time to time, this Article shall be
amended automatically and construed so as to permit indemnification and
advancement of expenses to the fullest extent from time to time permitted by
law.

                                  ARTICLE VIII
                              CERTAIN TRANSACTIONS

     Section 1. Transactions with Interested Parties.

No contract or transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the Board or
committee thereof which authorizes the contract or transaction or solely because
the votes of such director or officer are counted for such purpose, if:

     (a) The material facts as to his or her relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of Directors
or the committee, and the Board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or

     (b) The material facts as to his or her relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or

     (c) The contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders.

     Section 2. Quorum.

Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.

                                   ARTICLE IX
                                  MISCELLANEOUS

     Section 1. Facsimile Signatures

In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these Bylaws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.


                                      -13-



     Section 2. Corporate Seal.

The Board of Directors may provide a suitable seal, containing the name of the
Corporation, which shall be in the charge of the Secretary. If and when so
directed by the Board of Directors or a committee thereof, duplicates of the
seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.

     Section 3. Reliance upon Books, Reports and Records.

Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.

     Section 4. Fiscal Year

Except as otherwise determined by the Board of Directors from time to time, the
fiscal year of the Corporation shall end on the last day of December of each
year.

     Section 5. Time Periods.

In applying any provision of these Bylaws which requires that an act be done or
not be done on a specified number of days prior to an event or that an act be
done during a period of a specified number of days prior to an event, calendar
days shall be used, the day of the doing of the act shall be excluded, and the
day of the event shall be included.

                                    ARTICLE X
                                   AMENDMENTS

These Bylaws may be amended, added to, rescinded or repealed by the stockholders
or by the Board of Directors, when such power is conferred upon the Board of
Directors by the Certificate of Incorporation, at any meeting of the
stockholders or of the Board of Directors, provided notice of the proposed
change was given in the notice of the meeting or, in the case of a meeting of
the Board of Directors, a notice given not less than two (2) days prior to the
meeting.

                                   ARTICLE XI
                                    CONFLICTS

     In the event of a conflict or inconsistency between the provisions of these
Bylaws and the provisions of the Fourth Amended and Restated Investor Rights
Agreement, made as of December 17, 2003 by and among the Company and the other
signatories thereto, and/or the MVRA (together, the "Agreements"), the
provisions of the Agreements shall control.


                                      -14-

                                                                     EXHIBIT 4.2

                           FIFTH AMENDED AND RESTATED

                            INVESTOR RIGHTS AGREEMENT

      FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement")
made as of September 21, 2005 (the "Effective Date") by and among (i) PTC
Therapeutics, Inc., a Delaware corporation (the "Company"), (ii) the persons
identified on the signature page of this Agreement as Founders (the "Founders"),
(iii) those Holders of shares of Series A Stock and Series B Stock (each as
defined below) of the Company listed on Exhibit A attached hereto (the "Series A
and Series B Investors"), (iv) those Holders of shares of Series C Stock (as
defined below) of the Company listed on Exhibit B attached hereto (the "Series C
Purchasers"), (v) the Holders of shares of Series D Stock (as defined below) of
the Company listed on Exhibit C attached hereto (the "Series D Purchasers"),
(vi) those Holders of Series E Stock (as defined below) of the Company listed on
Exhibit D attached hereto (the "Series E Purchasers"), (vii) the purchasers of
Series E-2 Stock (as defined below) of the Company listed on Exhibit E attached
hereto (the "Series E-2 Purchasers") and (viii) the holders of warrants to
purchase Preferred Stock and/or Common Stock of the Company listed on Exhibit F
attached hereto (the "Warrant Purchasers"). The Series A and Series B Investors,
the Series C Purchasers, the Series D Purchasers, the Series E Purchasers and
the Series E-2 Purchasers may be referred to herein individually as an
"Investor" and collectively as the "Investors." The Founders and the Investors
may be referred to herein individually as a "Stockholder" and collectively as
the "Stockholders."

      WHEREAS, the Company proposes to issue and sell up to an aggregate of
4,132,232 shares of Series E-2 Convertible Preferred Stock, par value $.001 per
share (the "Series E-2 Stock"), to the Series E-2 Purchasers pursuant to that
certain Subscription Agreement dated as of the date hereof among the Company and
the Series E-2 Purchasers (the "Subscription Agreement");

      WHEREAS, in connection with their respective purchases of shares of the
Series C Stock, the Series D Stock, the Series E Stock and the Series E-2 Stock,
the Series C Purchasers, the Series D Purchasers, the Series E Purchasers and
the Series E-2 Purchasers have requested that the Company extend to them
registration rights and certain other rights and covenants as set forth herein,
and the Series C Purchasers, the Series D Purchasers, the Series E Purchasers
and the Series E-2 Purchasers have requested that the Founders enter into
certain restrictions on the transfer of Common Stock (as hereinafter defined)
owned or controlled by such Founders;

      WHEREAS, in connection with their purchase of certain warrants, the
Warrant Purchasers have requested that the Company extend to them registration
rights as set forth herein;

      WHEREAS, the Board of Directors of the Company has determined that it is
in the best interests of the Company that the Company enter into this Agreement;
and

      WHEREAS, the Company and the holders of two-thirds of the outstanding
shares of the Company's Series A Convertible Preferred Stock, par value $.001
per share (the



"Series A Stock"), the Company's Series B Convertible Preferred Stock, par value
$.001 per share (the "Series B Stock"), the Company's Series C Convertible
Preferred Stock, par value $.001 per share (the "Series C Stock"), the holders
of the Company's Series D Convertible Preferred Stock, par value $.001 per share
(the "Series D Stock") and the Company's Series E Convertible Preferred Stock,
par value $.001 per share (the "Series E Stock") (the Series A Stock, the Series
B Stock, the Series C Stock, the Series D Stock, the Series E Stock and the
Series E-2 Stock, collectively being referred to herein as the "Preferred
Stock") have consented to the terms of this Agreement and the amendment and
restatement of that certain Fourth Amended and Restated Investor Rights
Agreement, dated as of December 17, 2003, among the Company and the Investors
named therein (the "Fourth Amended Rights Agreement"), which amended and
restated that certain Third Amended and Restated Investor Rights Agreement,
dated as of August 17, 2001, among the Company and the Investors named therein
(the "Third Amended Rights Agreement"), which amended and restated that certain
Second Amended and Restated Investor Rights Agreement dated as of May 26, 2000
among the Company and the Investors named therein (the "Second Amended Rights
Agreement") which amended and restated that certain Amended and Restated
Investor Rights Agreement dated as of February 9, 2000 among the Company and the
Investors named therein (the "Amended Rights Agreement"), which amended and
restated that certain Investor Rights Agreement dated as of August 19, 1998
among the Company and the Series A and Series B Investors named therein (the
"Original Rights Agreement"), as set forth herein and have evidenced such
consent by executing and delivering either (i) an omnibus signature page in the
form attached hereto as Exhibit H-1 or (ii) a written consent of stockholders in
the form attached hereto as Exhibit H-2 to this Agreement.

      NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties hereto amend
and restate in its entirety the Third Amended Rights Agreement and covenant and
agree as follows:

1.    GENERAL PROVISIONS

1.1. SHARES SUBJECT TO THIS AGREEMENT. The Stockholders expressly agree that the
terms and restrictions of this Agreement shall apply to all shares of capital
stock which any of them now owns or hereafter acquires by any means, including
without limitation by purchase, assignment or operation of law, or as a result
of any stock dividend, stock split, reorganization, reclassification, whether
voluntary or involuntary, or other similar transaction, and to any shares of
capital stock of any successor in interest of the Company, whether by sale,
merger, consolidation or other similar transaction, or by purchase, assignment
or operation of law (the "Shares").

1.2. NO PARTNERSHIP RELATIONSHIP. Notwithstanding, but not in limitation of, any
other provision of this Agreement, the parties understand and agree that the
creation, management and operation of the Company shall not create or imply a
general partnership between or among the Stockholders and shall not make any
Stockholder the agent or partner of any other Stockholder for any purpose.

                                       2


1.3. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:

      "Additional Closing Date" shall have the meaning assigned to such term in
the Subscription Agreement.

      "Affiliate" has the meaning ascribed to that term in Rule 12b-2 under the
Exchange Act, or any successor rule.

      "Commission" shall mean the Securities and Exchange Commission and any
successor agency of the Federal government administering the Securities Act and
the Exchange Act.

      "Common Stock" shall mean (i) the common stock, $.001 par value per share,
of the Company, (ii) any other capital stock of the Company, however designated,
authorized on or after the date hereof, which shall neither be limited to a
fixed sum or percentage of par value in respect of the rights of the holders
thereof to participate in dividends nor entitled to a preference in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company; and (iii) any other securities into
which or for which any of the securities described in (i) or (ii) may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, consolidation, sale of assets or other similar transaction.

      "Company Stock Option Plan" shall mean the Company's 1998 Employee,
Director and Consultant Stock Option Plan (as amended from time-to-time); or
such other arrangements, contracts, or plans as are recommended by management
and approved by the Board of Directors or compensation committee established by
the Board of Directors.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and any similar or successor Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to time.

      "Holder" shall mean the Investors and Warrant Purchasers holding
Registrable Securities or securities convertible into Registrable Securities and
any person holding such securities to whom the rights under this Agreement have
been transferred in accordance with Section 4.12 hereof.

      "Initial Closing Date" shall have the meaning assigned to such term in the
Subscription Agreement.

      "Initial Public Offering" shall mean either (i) the first underwritten
public offering of Common Stock of the Company, offered on a firm commitment
basis pursuant to a registration statement filed with the Commission under the
Securities Act on Form S-1 or its then equivalent with net proceeds to the
Company of not less than $50,000,000 and a per share price of not less than an
amount equal to two times the Adjusted Series E-2 Price (subject to equitable
adjustment in the event of any stock dividend, stock split, combination,
reorganization, recapitalization or similar event involving a change in the
Common Stock) or (ii) any other public offering upon the written election of the

                                       3


Company and Holders of at least sixty-six and two-thirds percent (66 2/3 %) of
the outstanding shares of Preferred Stock, on an as-converted basis.

      "Person" means an individual, corporation, company, partnership, joint
venture, trust or unincorporated organization, or a government or any agency or
political subdivision thereof.

      The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement, or, as the context may require, under the Exchange Act
or applicable state securities laws.

      "Registrable Securities" shall mean any (i) shares of Common Stock issued
or issuable pursuant to the conversion of the Preferred Stock; (ii) shares of
Common Stock issued or issuable pursuant to the exercise of the Warrants (and
the conversion of any Preferred Stock issued or issuable pursuant thereto)
pursuant to the terms set forth therein and (iii) shares of Common Stock issued
or issuable pursuant to the conversion of the Preferred Stock, the exercise of
the Warrants or the exercise or conversion of any warrant, right or other
security issued in exchange for or in replacement of the Preferred Stock or
issued with respect to the Preferred Stock or issued upon any stock split, stock
dividend or other distribution, recapitalization, reorganization, merger,
consolidation, sale of assets or similar event. As to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been sold as permitted by Rule 144 (or any
successor provision) under the Securities Act and the purchaser thereof does not
receive "restricted securities" as defined in Rule 144, (c) they shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not, in the opinion of counsel for
the holders, require registration of them under the Securities Act or (d) they
shall have ceased to be outstanding.

      "Registration Expenses" shall mean the expenses so described in Section
4.7.

      "Securities Act" shall mean the Securities Act of 1933, as amended, and
any similar or successor Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

      "Selling Expenses" shall mean the expenses so described in Section 4.7.

      "Subsidiary" or "Subsidiaries" shall mean any corporation, partnership,
trust or other entity of which the Company and/or any of its other Subsidiaries
directly or indirectly owns at the time a majority of the outstanding shares of
any class of equity security of such corporation, partnership, trust or other
entity.

                                       4


      "Warrants" shall mean those certain warrants to purchase capital stock
issued by the Company to the Warrant Purchasers listed on Exhibit E attached
hereto.

2.    PERCENTAGE MAINTENANCE RIGHTS

2.1. NOTICE OF NEW ISSUANCE. Except with respect to "Exempt Issuances" as
defined in Section 2.3, in the event that the Company issues any (i) shares of
Common Stock, (ii) warrants, options or other rights to purchase Common Stock
(collectively, "Rights"), or (iii) any debentures or other securities
convertible into or exchangeable for shares of Common Stock (collectively,
"Convertible Securities"), the Company will deliver to those Investors then
holding more than half of one percent (0.5%) of the shares of the Preferred
Stock (each a "Qualified Stockholder") a notice (the "Offer Notice") upon the
completion of such issuance (the "New Issuance"), stating the price and other
terms and conditions thereof.

2.2. RIGHT TO PURCHASE SHARES, RIGHTS OR CONVERTIBLE SECURITIES. In the event of
a New Issuance (other than an Exempt Issuance), any Qualified Stockholder shall
have the right to purchase such number of shares of Common Stock, Rights or
Convertible Securities at the price and on the terms upon which the New Issuance
was made, such price to be paid in full in cash or by check at the time of
issuance of such securities to such Qualified Stockholders so that, after giving
effect to the issuance to the Qualified Stockholders and the conversion,
exercise and exchange into or for (whether directly or indirectly) shares of
Common Stock of all such Rights and Convertible Securities, each Qualified
Stockholder who exercises such right will continue to maintain its same
proportionate ownership of Common Stock as of the date immediately preceding the
New Issuance, treating each Qualified Stockholder, for the purpose of such
computation, as the Holder of the number of shares of Common Stock which would
be issuable to it upon conversion, exercise and exchange of all Rights and
Convertible Securities held by it on the date immediately preceding the New
Issuance and assuming the like conversion, exercise and exchange of all such
securities held by other persons. The rights set forth in this Article 2 shall
be exercised by the Qualified Stockholders, if at all, by written notice to the
Company delivered not later than thirty (30) days after the receipt by the
Investors of the Offer Notice in accordance with the terms and conditions stated
therein, and such right shall expire with respect to a Qualified Stockholder at
the end of the thirtieth day after the day of the receipt by such Qualified
Stockholders of the Offer Notice. The Company shall, promptly following the
expiration of such thirty (30) day period, notify all Qualified Stockholders who
have exercised their purchase rights under this Section 2.2 of the aggregate
number of shares of Common Stock, Rights and Convertible Securities to be issued
pursuant to this Section 2.2, and afford each Qualified Stockholder the
opportunity to adjust the number of such securities it purchases under this
Section 2.2 in order to conform its proportionate ownership after the New
Issuance and the exercise of rights under this Section 2.2 to its proportionate
ownership as of the date immediately preceding the New Issuance.

2.3. EXEMPT ISSUANCES. The issuances referred to in Section 2.1 which will not
give the Investors the rights described in Section 2.2 (the "Exempt Issuances")
are issuances in which shares of Common Stock or Rights or Convertible
Securities of the Company are

                                       5


issued or deemed issued (i) as a dividend or distribution payable pro rata to
all holders of Common Stock or other securities of the Company; (ii) up to
2,326,008 shares of Common Stock (subject to equitable adjustment in the event
of any stock dividend, stock split, combination, reorganization,
recapitalization or similar event involving a change in the Common Stock),
including Options therefor, pursuant to the Corporation's 1998 Employee Director
and Consultant Stock Option Plan (as amended from time-to-time); and shares of
Common Stock or Options therefor in excess of such 2,326,008 shares that are
issued pursuant to the Corporation's 1998 Employee, Director and Consultant
Stock Option Plan (as amended from time-to-time), or such other arrangements,
contracts, or plans that are recommended by management and approved by the Board
of Directors or compensation committee established by the Board of Directors,
upon written consent of the holders of a majority of the Preferred Stock; (iii)
upon conversion or exercise of any Rights (including shares issued in connection
with any subsequent conversion of the shares issued upon the exercise of such
Rights) or Convertible Securities outstanding on the date hereof; (iv) as up to
4,132,232 shares of Series E-2 Stock in connection with the Subscription
Agreement (including shares issued in connection with any subsequent conversion
of such Series E-2 Stock); (vi) as up to that number of shares equal to 1% of
the aggregate number of shares (subject to equitable adjustment in the event of
any stock dividend, stock split, combination, reorganization, recapitalization
or similar event involving a change in the Common Stock) of outstanding Common
Stock on an as-converted, fully-diluted basis (after giving effect to the
issuance of the Series E-2 Stock pursuant to the Subscription Agreement)
measured as of the date of the latest issuance of Series E-2 Stock issued after
the date hereof, in each case, in accordance with the terms of the Subscription
Agreement, to institutional lenders in connection with the establishment or
maintenance by the Company of credit facilities, including equipment lease
facilities, approved in each case by a majority of the Board of Directors of the
Company; (vii) pursuant to a registered public offering, the closing of which is
on or after the date hereof; (viii) as up to that number of shares equal to 1%
of the aggregate number of shares (subject to equitable adjustment in the event
of any stock dividend, stock split, combination, reorganization,
recapitalization or similar event involving a change in the Common Stock) of
outstanding Common Stock on an as-converted, fully-diluted basis (after giving
effect to the issuance of the Series E-2 Stock pursuant to the Subscription
Agreement) measured as of the date of the latest issuance of Series E-2 Stock
issued after the date hereof, in each case, in accordance with the terms of the
Subscription Agreement in connection with the sale of Common Stock or
Convertible Securities of the Company to any licensor of technology or patent
rights to the Company or to any collaborative partner or licensee with respect
to the development or commercialization of products; or (ix) as up to that
number of shares equal to 4% of the aggregate number of shares (subject to
equitable adjustment in the event of any stock dividend, stock split,
combination, reorganization, recapitalization or similar event involving a
change in the Common Stock) of outstanding Common Stock on an as-converted,
fully-diluted basis (after giving effect to the issuance of the Series E-2 Stock
pursuant to the Subscription Agreement) measured as of the date of the latest
issuance of Series E-2 Stock issued after the date hereof, in each case, in
accordance with the terms of the Subscription Agreement in connection with the
acquisition by the Company of another business entity by merger,

                                       6


purchase of all or substantially all of its assets or acquisition of all or
substantially all of the equity interest of such business entity.

3.    RESTRICTIONS ON TRANSFER

3.1. NON-COMPLYING TRANSFERS PROHIBITED. No Founder may sell, assign, transfer,
exchange, gift, devise, pledge, hypothecate, encumber or otherwise alienate or
dispose of any Shares owned by such Founder, or any right or interest therein,
whether voluntarily or involuntarily, by operation of law or otherwise, except
in accordance with this Agreement. Notwithstanding the foregoing, a Founder may
transfer any or all of his Shares (i) to his spouse or children or to a trust
established for the benefit of his spouse, children or himself, or (ii) under
his will (each such transferee, a "Permitted Transferee"); provided that such
Shares shall remain subject to this Agreement and such permitted transferee
shall, as a condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of the terms
and conditions of this Agreement. The restrictions on the transfer of shares by
the Founders are in addition to, and not in lieu of, any restrictions on such
Shares contained in each of the Stock Restriction Agreements between the
Founders and the Company dated August 19, 1998.

3.2.  RIGHTS OF FIRST REFUSAL ON VOLUNTARY TRANSFERS.

      3.2.1. RIGHT OF FIRST REFUSAL OF THE COMPANY. Except in cases explicitly
      permitted by Section 3.1, any Founder who intends to sell, assign,
      transfer or otherwise voluntarily alienate or dispose of any Shares (the
      "Selling Stockholder") shall, prior to any such transfer, give written
      notice (the "Selling Stockholder's Notice") of such intention to the
      Company and to each Qualified Stockholder. The Selling Stockholder's
      Notice shall include the name of the proposed transferee, the proposed
      purchase price per Share, the terms of payment of such purchase price and
      all other matters relating to such sale and shall be accompanied by a copy
      of a binding written agreement of the proposed transferee to purchase such
      Shares from the Selling Stockholder. The Selling Stockholder's Notice
      shall constitute a binding offer by the Selling Stockholder to sell to the
      Company all or any part of such number of Shares (the "Offered Shares")
      then owned by the Selling Stockholder as are proposed to be sold in the
      Selling Stockholder's Notice at the monetary price per Share designated in
      the Selling Stockholder's Notice, payable as provided in Section 3.2.3
      hereof. Not later than thirty (30) days after receipt of the Selling
      Stockholder's Notice, the Company shall deliver written notice (the
      "Company Notice") to the Selling Stockholder stating whether the Company
      has accepted the offer stated in the Selling Stockholder's Notice (in
      whole or in part). The closing of any purchase of the Offered Shares by
      the Company shall take place on the later of (i) fifteen (15) days after
      the end of the thirty (30) day period set forth above and (ii) the date on
      which the Buying Stockholders (as hereinafter defined in Section 3.2.2)
      consummate any purchase of Offered Shares pursuant to Section 3.2.2 below.

                                       7


      3.2.2. RIGHT OF FIRST REFUSAL OF THE STOCKHOLDERS. If the Company does not
      accept the offer to purchase all of the Offered Shares within the thirty
      (30) day period provided in Section 3.2.1, no later than the end of such
      thirty (30) day period the Company shall give notice (the "Second Company
      Notice") of that fact to each Qualified Stockholder, and each Qualified
      Stockholder shall have the right to purchase all or any part of its
      Proportionate Percentage (as defined below) of the Offered Shares not
      purchased by the Company (the "Remaining Shares"), at the monetary price
      per Share designated in the Selling Stockholder's Notice, payable as
      provided in Section 3.2.3. Not later than fifteen (15) days after delivery
      of the Second Company Notice, each Qualified Stockholder shall deliver to
      the Company, the other Qualified Stockholders and the Selling Stockholder
      a written notice stating whether such Qualified Stockholder has accepted
      the offer stated in the Selling Stockholder's Notice with respect to its
      Proportionate Percentage of the Remaining Shares. Promptly following the
      expiration of such fifteen (15) day period, the Company shall notify each
      Qualified Stockholder that has exercised its rights under this Section
      3.2.2 (each a "Buying Stockholder") of the number of Remaining Shares (if
      any) that other Qualified Stockholders have not elected to purchase. If
      one or more of the Qualified Stockholders elects not to purchase all of
      the Remaining Shares which it is entitled to purchase pursuant to this
      Section 3.2.2, the Buying Stockholders, by written notice to the Company
      and the Selling Stockholder within five (5) days after the delivery of the
      Company's notice pursuant to the proceeding sentence, may elect to
      purchase all or a part of such unpurchased Remaining Shares without the
      consent of any non-purchasing Qualified Stockholders, pro rata between or
      among them or in such other manner as they may agree. The closing of any
      purchase of the Remaining Shares by the Buying Stockholders shall take
      place no later than fifteen (15) days after the end of the fifteen (15)
      day period set forth above. As used in this Section 3.2.2, "Proportionate
      Percentage" shall mean with respect to each Qualified Stockholder a
      fraction, the numerator of which is the number of Shares owned by such
      Qualified Stockholder (calculated on a fully diluted basis), and the
      denominator of which is the total number of Shares owned by all the
      Qualified Stockholders (calculated on a fully-diluted basis).

      3.2.3. CLOSING. The place for the closing of any purchase and sale
      described in Section 3.2.1 or Section 3.2.2 shall be the principal office
      of the Company or at such other place as the parties shall agree. At the
      closing, the Selling Stockholder shall accept payment on the terms offered
      by the proposed transferee named in the Selling Stockholder's Notice,
      provided, however, that the Company and the Buying Stockholders shall not
      be required to meet any non-monetary terms of the proposed transfer,
      including, without limitation, delivery of other securities in exchange
      for the Shares proposed to be sold. At the closing, the Selling
      Stockholder shall deliver to the Company or the Buying Stockholders, as
      the case may be, in exchange for Shares purchased and sold at the closing,
      certificates for the number of Shares stated in the Selling Stockholder's
      Notice, accompanied by duly executed instruments of transfer.

                                       8


      3.2.4. TRANSFERS TO THIRD PARTIES. If the Company and the Buying
      Stockholders in aggregate fail to accept the offer stated in the Selling
      Stockholder's Notice with respect to all of the Offered Shares, they shall
      not have the right to purchase any Offered Shares, and the Selling
      Stockholder shall, subject to Section 3.3 herein, be free to sell all, but
      not less than all, of the Offered Shares to the designated transferee at a
      price and on terms no less favorable to the Selling Stockholder than
      described in the Selling Stockholder's Notice, provided, however, that
      such sale is consummated within ninety (90) days after the giving of the
      Selling Stockholder's Notice pursuant to Section 3.2.1. As a condition
      precedent to the effectiveness of a transfer pursuant to this Section
      3.2.4, the proposed transferee(s) shall agree in writing prior to such
      transfer to become a party to this Agreement and shall thereafter be
      permitted to transfer Shares only in accordance with this Agreement.

3.3.  PARTICIPATION IN SALES.

      3.3.1. TAKE-ALONG RIGHT. In the event that a Founder (the "Offeree")
      receives a bona fide offer from a third party or parties other than the
      Company or any other Stockholder (the "Third Party Buyer") to purchase any
      of the Shares owned by the Offeree (the "Take-Along Shares"), for a
      specified price payable in cash or otherwise and on specified terms and
      conditions (the "Offer"), and the Offeree proposes to sell or otherwise
      transfer the Take-Along Shares to the Third Party Buyer pursuant to the
      Offer, each Qualified Stockholder shall have the right to sell to the
      Third Party Buyer, at the same price per Share and on the same terms and
      conditions as stated in the Offer, up to the number of Shares equal to the
      Take-Along Shares multiplied by a fraction, the numerator of which is the
      aggregate number of Shares owned by such Qualified Stockholder (calculated
      on a fully diluted, as converted to Common Stock basis) and the
      denominator shall be the aggregate number of Shares held by all
      stockholders (calculated on a fully-diluted, as converted to Common Stock
      basis), provided, however, that if the prospective third-party purchaser
      objects to the delivery of any series of Preferred Stock in lieu of Common
      Stock, such selling Qualified Stockholder shall convert such Preferred
      Stock into Common Stock and deliver Common Stock as provided in this
      Section 3.3.1. The Company agrees to make any such conversion concurrent
      with the actual transfer of such shares to the purchaser and contingent on
      such transfer; and provided further, that such rights of the Qualified
      Stockholders granted pursuant to this 3.3.1 shall not apply to the
      transfer or transfers by a Founder of up to 100,000 Shares in the
      aggregate (subject to appropriate adjustment for stock splits, stock
      dividends, combinations and similar recapitalization events) (a "Permitted
      Transfer"), provided that, such Shares transferred pursuant to a Permitted
      Transfer shall remain subject to this Agreement and such permitted
      transferee shall, as a condition to such transfer, deliver to the Company
      a written instrument confirming that such transferee shall be bound by all
      of the terms and conditions of this Agreement.

      3.3.2. NOTICES OF OFFER AND INTENT TO PARTICIPATE. If a Qualified
      Stockholder wishes to participate in any sale pursuant to Section 3.3.1 it
      shall notify the

                                       9


      Offeree in writing of such intention and the number of Shares it wishes to
      sell pursuant to this Section 3.3 not later than fifteen (15) days after
      delivery of the Second Company Notice (as described in Section 3.2.2
      above). If the Offeree does not receive such notice from a Qualified
      Stockholder within such fifteen (15) day period, the Offeree shall be free
      to consummate the proposed transaction without any obligation to include
      such Qualified Stockholder's Shares in such transaction. The non-exercise
      or partial exercise of the rights of any Qualified Stockholder hereunder
      to participate in one or more sales of Shares made by a Founder shall not
      adversely affect such Qualified Stockholder's right to participate in
      subsequent sales of Shares by a Founder.

      3.3.3. SALE OF TAKE-ALONG SHARES. The Offeree and each Qualified
      Stockholder who has provided timely notice in accordance with Section
      3.3.2 above shall sell to the Third Party Buyer all, or at the option of
      the Third Party Buyer, any part of the Shares proposed to be sold by them
      at not less than the price and upon other terms and conditions, if any,
      not more favorable to the Third Party Buyer than those stated in the
      Offer, provided, however, that any purchase of less than all of such
      Shares by the Third Party Buyer shall be made from the Offeree and each
      Qualified Stockholder pro rata based upon the relative amount of the
      Shares that the Offeree and such Qualified Stockholder is entitled to sell
      pursuant to Section 3.3.1. The stock certificate or certificates that the
      selling Qualified Stockholder delivers to the Offeree pursuant to this
      Section 3.3 shall be transferred to the prospective purchaser in
      consummation of the sale of the Shares pursuant to the terms and
      conditions specified in the transfer notice, and the Offeree shall
      concurrently therewith remit to such selling Qualified Purchaser that
      portion of the sale proceeds to which such selling Qualified Purchaser is
      entitled by reason of its participation in such sale. To the extent that
      any prospective purchaser or purchasers prohibits such assignment or
      otherwise refuses to purchase shares or other securities from a selling
      Qualified Stockholder exercising its take along rights hereunder, the
      Offeree shall not sell to such prospective purchaser or purchasers any
      Shares unless and until, simultaneously with such sale, the Offeree shall
      purchase such shares or other securities from such selling Qualified
      Stockholder for the same consideration and on the same terms and
      conditions as the proposed transfer described in the transfer notice.

      3.3.4. PROHIBITED TRANSFERS.

            (a) In the event any Founder should sell any Shares in contravention
      of the take-along rights of the Qualified Stockholders under Section 3 (a
      "Prohibited Transfer"), the Qualified Stockholders, in addition to such
      other remedies as may be available at law, in equity or hereunder, shall
      have the put option provided below, and such Founder
      shall be bound by the applicable provisions of such option.

            (b) In the event of a Prohibited Transfer, each Qualified
      Stockholder shall have the right to sell to such Founder the type and
      number of the Shares equal to the number of shares each Qualified
      Stockholder would have been

                                       10


      entitled to transfer to the third-party transferee(s) under Section 3.3
      hereof had the Prohibited Transfer been effected pursuant to and in
      compliance with the terms hereof. Such sale shall be made on the following
      terms and conditions:

                  (i) The price per share at which the shares are to be sold to
            such Founder shall be equal to the price per share paid by the
            third-party transferee(s) to such Founder in the Prohibited
            Transfer. Such Founder shall also reimburse each Qualified
            Stockholder for any and all fees and expense, including legal fees
            and expenses, incurred pursuant to the exercise or the attempted
            exercise of the Qualified Stockholder's rights under Section 3.3.4.

                  (ii) Within 45 days after the later of the dates on which the
            Qualified Stockholder (A) received notice of the Prohibited Transfer
            or (B) otherwise became aware of the Prohibited Transfer, each
            Qualified Stockholder shall, if exercising the option created
            hereby, deliver to such Founder the certificate or certificates
            representing shares to be sold, each certificate to be properly
            endorsed for transfer.

                  (iii) Such Founder shall, upon receipt of the certificate or
            certificates for the shares to be sold by a Qualified Stockholder,
            pursuant to this Section 3.3.4, pay the purchase price therefor and
            the amount of reimbursable fees and expenses, as specified in
            Section 3.3.4(b)(i), in cash or by other means acceptable to such
            Qualified Stockholder.

                  (iv) Notwithstanding the foregoing, any attempt by a Founder
            to transfer the Shares in violation of this Agreement shall be null
            and void ab initio and the Company agrees it will not effect such a
            transfer nor will it treat any alleged transferee(s) as the owner of
            such shares without the written consent of a majority in interest of
            the Qualified Stockholders.

            (c) The Qualified Stockholders, severally but not jointly, will
      indemnify the Company against all liabilities incurred by the Company
      relating to tax obligations owed by the Company pursuant to the exercise
      by such Qualified Stockholders of the option set forth in this Section
      3.3.4.

3.4. COMPANY RECORDS. The Company shall not transfer on its books any of the
shares of Common Stock held by any Stockholder or Permitted Transferee without
first ascertaining compliance with all of the applicable provisions of this
Agreement with respect to such transfer. Each Founder agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records. The Company shall not be
required (i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the provisions of this Section 3.3,
or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have
been transferred.

                                       11


3.5. LEGEND-REQUIREMENT. All certificates evidencing Shares subject to Section
3.3 herein shall, during the term of this Agreement, bear such restrictive
legends as the Company and the Company's counsel deem necessary or advisable
under applicable law or pursuant to this Agreement, including without limitation
the following (or a substantially similar legend):

            "THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A RIGHT OF CO-SALE
      BY CERTAIN SHAREHOLDERS OF THE COMPANY, PURSUANT TO AN AGREEMENT RELATING
      TO SUCH SECURITIES, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
      COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT."

4.    TRANSFER OF REGISTRABLE SECURITIES; REGISTRATION

4.1. RESTRICTIVE LEGEND. Each certificate representing shares of Preferred Stock
or Registrable Securities shall, except as otherwise provided in this Section
4.1 or in Section 4.2, be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any legend required under
applicable state securities laws):

            "The securities represented by this certificate have not been
            registered under the Securities Act of 1933, as amended, or any
            other securities laws. These securities have been acquired for
            investment and not with a view to distribution or resale. Such
            securities may not be offered for sale, sold, delivered after sale,
            transferred, pledged or hypothecated in the absence of an effective
            registration statement covering such securities under the Securities
            Act of 1933 and any other applicable securities laws, unless the
            holder shall have obtained an opinion of counsel reasonably
            satisfactory to the corporation that such registration is not
            required."

      Upon request of a Holder of such a certificate, the Company shall remove
the foregoing legend (as well as the legend set forth in Section 4.2 of the
Subscription Agreement) from the certificate or issue to such Holder a new
certificate therefor free of any transfer legend, if there is an effective
registration statement covering the securities represented by such certificate
or, with such request, the Company shall have received either the opinion
referred to in Section 4.2(i) or the "no-action" letter referred to in Section
4.2(ii).

4.2. NOTICE OF PROPOSED TRANSFER. Prior to any proposed sale, pledge,
hypothecation or other transfer of any shares of Preferred Stock or Registrable
Securities (other than under the circumstances described in Section 4.3, 4.4 or
4.5), the Holder thereof shall give written notice to the Company of its
intention to effect such sale, pledge, hypothecation or other transfer. Each
such notice shall describe the manner of the proposed sale, pledge,
hypothecation or other transfer and, if requested by the Company

                                       12


shall be accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company stating that that the proposed sale, pledge, hypothecation or
other transfer may be effected without registration under the Securities Act or
(ii) a "no action" letter from the Commission to the effect that the
distribution of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the Holder of such stock shall be entitled to transfer such
stock in accordance with the terms of its notice; provided, however, that no
such opinion of counsel shall be required for (x) a distribution to one or more
partners of the transferor (in the case of a transferor that is a partnership),
stockholders (in the case of a transferor that is a corporation) or members (in
the case of a transferor that is a limited liability company) in each case in
respect of the beneficial interest of such partner, stockholder or member or (y)
Affiliates, except in the case of clause (y), as the Company shall otherwise
reasonably request. Each certificate for Preferred Stock or Registrable
Securities transferred as above provided shall bear the appropriate restrictive
legend set forth in Section 4.1, except that such certificate shall not bear
such legend if (i) such transfer is in accordance with the provisions of Rule
144 (or any other rule permitting public sale without registration under the
Securities Act) or (ii) the opinion of counsel or "no-action" letter referred to
above is to the further effect that the transferee and any subsequent transferee
(other than an affiliate of the Company) would be entitled to transfer such
securities in a public sale without registration under the Securities Act or
that such legend is not required to establish compliance with any provisions of
the Securities Act. Notwithstanding any other provision hereof, the restrictions
provided for in this Section 4.2 shall not apply to securities which are not
required to bear the legend prescribed by Section 4.1 in accordance with the
provisions of that Section. If the Company does not accept an opinion of counsel
required hereby signed by the original Holder's counsel, the Company will pay
the reasonable fees and disbursements of other counsel in connection with all
opinions rendered by them pursuant to this Section 4.2.

4.3.  REGISTRATION ON FORM S-1.

            (a) If at any time, Holders of more than 20% of the outstanding
      shares of Registrable Securities request that the Company file a
      registration statement for at least 20% of the shares of the outstanding
      Registrable Securities, (such Holders, the "Initiating Holders")
      anticipated aggregate proceeds of which, net of underwriting discounts and
      commissions, would exceed $10,000,000, the Company shall:

                  (i) within ten days of the receipt by the Company of such
            notice, give written notice of the proposed registration,
            qualification or compliance to all other Holders; and

                  (ii) as soon as practicable use its best efforts to effect
            such registration, qualification or compliance (including, without
            limitation, appropriate qualification under applicable blue sky or
            other state securities laws and appropriate compliance with
            applicable regulations issued under the Securities Act and any other
            governmental requirements or regulations) as may be so requested and
            as would permit or facilitate the

                                       13


            sale and distribution of all or such portion of such Registrable
            Securities as are specified in such request, together with all or
            such portion of the Registrable Securities of any Holder or Holders
            joining in such request as are specified in a written request
            received by the Company within 20 days after receipt of such written
            notice from the Company;

            provided, however, that the Company shall not be obligated to take
      any action to effect any such registration, qualification or compliance
      pursuant to this Section 4.3:

                  (A) In any particular jurisdiction in which the Company would
            be required to execute a general consent to service of process in
            effecting such registration, qualification or compliance unless the
            Company is already subject to service in such jurisdiction and
            except as may be required by the Securities Act;

                  (B) Prior to the date six (6) months following the effective
            date of the Company's first registered public offering of its stock,
            pursuant to a firm commitment underwritten offering;

                  (C) After the Company has effected four (4) such registrations
            pursuant to this Section 4.3(a) and such registrations have been
            declared or ordered effective and the securities offered thereunder
            have been sold;

                  (D) If the Company shall furnish to such Holders a certificate
            signed by the President of the Company stating that in the good
            faith judgment of the Board of Directors it would be seriously
            detrimental to the Company or its stockholders for a registration
            statement to be filed in the near future, then the Company's
            obligation to use its best efforts to register, qualify or comply
            under this Section 4.3 shall be deferred for a period not to exceed
            90 days from the date of receipt of written request from the
            Initiating Holders; provided, however, that the Company shall not
            exercise such right more than once in any twelve-month period;
            provided, further, that it shall be considered seriously detrimental
            to the Company and its stockholders for a registration statement to
            be filed in the near future if the Company shall be preparing in
            good faith to commence any offering at the time any such request by
            the Initiating Holders is made.

                  (E) If such Holders propose to dispose of shares of
            Registrable Securities that may be immediately registered on Form
            S-3 pursuant to a request made under the provisions of Section 4.4
            hereof.

Subject to the foregoing clauses (A) through (E), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Initiating Holders.

            (b) Underwriting. If the Initiating Holders request a registration
      pursuant to this Section 4.3 for a registered public offering and intend
      to distribute

                                       14


      the Registrable Securities covered by their request by means of an
      underwriting, they shall so advise the Company as a part of their request
      made pursuant to this Section 4.3 and the Company shall so advise the
      Holders as part of the notice given pursuant to Section 4.3(a)(i). In such
      event, the right of any Holder to registration pursuant to Section 4.3
      shall be conditioned upon such Holder's participation in the underwriting
      arrangements required by this Section 4.3, and the inclusion of such
      Holder's Registrable Securities in the underwriting to the extent
      requested shall be limited to the extent provided herein.

      A registration statement filed pursuant to this Section 4.3 may, subject
to the following provisions, include (i) shares of Common Stock for sale by the
Company for its own account, (ii) shares of Common Stock held by officers or
directors of the Company and (iii) shares of Common Stock held by persons who by
virtue of agreements with the Company are entitled to include such shares in
such registration (the "Other Shareholders"), in each case for sale in
accordance with the method of disposition specified by the requesting Holders.
If such registration shall be underwritten, the Company shall (together with all
Holders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the managing
underwriter of recognized national standing selected for such underwriting by
the Company and reasonably acceptable to a majority of the Holders proposing to
distribute their securities through such underwriting; provided, that, the
Holders shall not be required to make any representation or warranty in the
underwriting agreement in connection with such offering other than as to (i)
their ownership and authority to transfer, free of liens, claims and
encumbrances (other than those that arise under the terms of this Agreement) and
(ii) the accuracy and completeness of any information furnished by them for
inclusion in the registration statement. If and to the extent that the managing
underwriter determines that marketing factors require a limitation on the number
of shares to be included in such registration, then the shares of Common Stock
held by officers or directors (other than Registrable Securities) of the Company
or by Other Shareholders (other than Registrable Securities) and shares of
Common Stock to be sold by the Company for its own account shall be excluded
from such registration to the extent so required by such managing underwriter,
and unless the Holders of such shares and the Company have otherwise agreed in
writing, such exclusion shall be applied first to the shares held by the
directors and officers and the Other Shareholders to the extent required by the
managing underwriter, then to the shares of Common Stock of the Company to be
included for its own account to the extent required by the managing underwriter.
If the managing underwriter determines that marketing factors require a further
limitation of the number of Registrable Securities to be registered under this
Section 4.3, then Registrable Securities shall be excluded in such manner that
the securities to be sold shall be allocated among the selling Holders pro rata
based on their ownership of Registrable Securities. In any event all securities
to be sold other than Registrable Securities will be excluded prior to any
exclusion of Registrable Securities. No Registrable Securities or any other
security excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration.

      If any Holder of Registrable Securities or Other Shareholder disapproves
of the terms of the underwriting, such Holder or Other Shareholder may elect to
withdraw

                                       15


therefrom by written notice to the Company, the managing underwriter and the
Initiating Holders. The Registrable Securities and/or other securities so
withdrawn shall also be withdrawn from registration. All such withdrawn
Registrable Securities and/or other securities shall remain subject to any
agreements executed in connection with Section 4.11.

4.4.  REGISTRATION ON FORM S-3.

            (a) In addition to the rights provided in Sections 4.3 and 4.5,
      subject to a limit of one (1) registration hereunder in any six (6) month
      period, if at any time (i) any Holder or Holders of Registrable Securities
      request that the Company file a registration statement on Form S-3 or any
      comparable or successor form thereto for a public offering of all or any
      portion of the shares of Registrable Securities held by such requesting
      Holder or Holders, the reasonably anticipated aggregate price to the
      public of which would exceed US $5,000,000 and (ii) the Company is a
      registrant entitled to use Form S-3 or any comparable or successor form
      thereto to register such shares, then the Company shall use its best
      efforts to register under the Securities Act on Form S-3 or any comparable
      or successor form thereto, for public sale in accordance with the method
      of disposition specified in such notice, the number of shares of
      Registrable Securities specified in such notice. Whenever the Company is
      required by this Section 4.4 to use its best efforts to effect the
      registration of Registrable Securities, each of the procedures and
      requirements set forth below, including but not limited to the requirement
      that the Company notify all Holders of Registrable Securities from whom
      notice has not been received and provide them with the opportunity to
      participate in the offering, shall apply to such registration.

            (b) The Company shall use its best efforts to qualify for
      registration on Form S-3 or any comparable or successor form or forms; and
      to that end the Company shall register (whether or not required by law to
      do so) the Common Stock under the Exchange Act in accordance with the
      provisions of that Act following the effective date of the first
      registration of any securities of the Company on Form S-1 or any
      comparable or successor form.

            (c) Following receipt of any notice under this Section 4.4, the
      Company shall immediately notify all Holders of Registrable Securities
      from whom notice has not been received and such Holders shall then be
      entitled within thirty (30) days after receipt of such notice from the
      Company to request the Company to include in the requested registration
      all or any portion of their shares of Registrable Securities. The Company
      shall use its best efforts to register under the Securities Act, for
      public sale in accordance with the method of disposition specified in the
      notice from requesting Holders described in paragraph (a) above, the
      number of shares of Registrable Securities specified in such notice (and
      in all notices received by the Company from other Holders within thirty
      (30) days after the receipt of such notice by such Holders). The Company
      shall be obligated to register the Registrable Securities pursuant to this
      Section 4.4 on four (4) occasions; provided, however, that such obligation
      shall be deemed satisfied only

                                       16


      when a registration statement covering all shares of Registrable
      Securities specified in notices received as aforesaid (except to the
      extent reduced by the managing underwriter, if any, pursuant to Section
      4.4(e)), for sale in accordance with the method of disposition specified
      by the requesting Holders, shall have become effective.

            (d) If the Holders requesting such registration intend to distribute
      the Registrable Securities covered by their request by means of an
      underwriting, they shall so advise the Company as a part of their request
      made pursuant to this Section 4.4 and the Company shall include such
      information in the written notice referred to in paragraph (c) above. The
      right of any Holder to registration pursuant to this Section 4.4 shall be
      conditioned upon such Holder's agreeing to participate in such
      underwriting and to permit inclusion of such Holder's Registrable
      Securities in the underwriting; provided, that, the Holders shall not be
      required to make any representation or warranty in the underwriting
      agreement in connection with such offering other than as to (i) their
      ownership and authority to transfer, free of liens, claims and
      encumbrances (other than those that arise under the terms of this
      Agreement), and (ii) the accuracy and completeness of any information
      furnished by them for inclusion in the registration statement. If such
      method of disposition is an underwritten public offering, the Holders of
      at least a majority in interest of the shares of Registrable Securities to
      be sold in such offering may designate the managing underwriter of such
      offering, which managing underwriter shall be reasonably acceptable to the
      Company. A Holder may elect to include in such underwriting all or a part
      of the Registrable Securities it holds.

            (e) A registration statement filed pursuant to this Section 4.4 may,
      subject to the following provisions, include (i) shares of Common Stock
      for sale by the Company for its own account, (ii) shares of Common Stock
      held by officers or directors of the Company and (iii) shares of Common
      Stock held by persons who by virtue of agreements with the Company are
      entitled to include such shares in such registration (the "Other
      Shareholders"), in each case for sale in accordance with the method of
      disposition specified by the requesting Holders. If such registration
      shall be underwritten, the Company, such officers and directors and Other
      Shareholders proposing to distribute their shares through such
      underwriting shall enter into an underwriting agreement in customary form
      with the representative of the underwriter or underwriters selected for
      such underwriting on terms no less favorable to such officers, directors
      or Other Shareholders than the terms afforded the Holders of Registrable
      Securities. If and to the extent that the managing underwriter determines
      that marketing factors require a limitation on the number of shares to be
      included in such registration, then the shares of Common Stock held by
      officers or directors (other than Registrable Securities) of the Company
      or by Other Shareholders (other than Registrable Securities) and shares of
      Common Stock to be sold by the Company for its own account shall be
      excluded from such registration to the extent so required by such managing
      underwriter, and unless the Holders of such shares and the Company have
      otherwise agreed in writing, such exclusion shall be applied

                                       17


      first to the shares held by the directors and officers and the Other
      Shareholders to the extent required by the managing underwriter, then to
      the shares of Common Stock of the Company to be included for its own
      account to the extent required by the managing underwriter. If the
      managing underwriter determines that marketing factors require a further
      limitation of the number of Registrable Securities to be registered under
      this Section 4.4, then Registrable Securities shall be excluded in such
      manner that the securities to be sold shall be allocated among the selling
      Holders pro rata based on their ownership of Registrable Securities. In
      any event all securities to be sold other than Registrable Securities will
      be excluded prior to any exclusion of Registrable Securities. No
      Registrable Securities or any other security excluded from the
      underwriting by reason of the underwriter's marketing limitation shall be
      included in such registration.

      If any Holder of Registrable Securities, officer, director or Other
Shareholder who has requested inclusion in such registration as provided above,
disapproves of the terms of the underwriting, such Holder, officer, director or
Other Shareholder may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. The securities so withdrawn shall also be
withdrawn from registration.

4.5. INCIDENTAL REGISTRATION. If the Company at any time (other than pursuant to
Sections 4.3 and 4.4) proposes to register any of its securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security Holders or both (except with respect to registration
statements on Forms S-4, S-8 or any successor to such forms or another form not
available for registering the Registrable Securities for sale to the public)
each such time it will promptly give written notice to all Holders of the
Registrable Securities of its intention so to do. Upon the written request of
any such Holder, received by the Company within thirty (30) days after the
giving of any such notice by the Company, to register any or all of its
Registrable Securities, the Company will use its best efforts to cause the
Registrable Securities as to which registration shall have been so requested to
be included in the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent requisite to permit the
sale or other disposition by the Holder (in accordance with its written request)
of such Registrable Securities so registered. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders of Registrable Securities
as a part of the written notice given pursuant to this Section 4.5. In such
event the right of any Holder of Registrable Securities to registration pursuant
to this Section 4.5 shall be conditioned upon such Holder's participation in
such underwriting to the extent provided herein. All Holders of Registrable
Securities proposing to distribute their securities through such underwriting
shall (together with the Company and the Other Shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for underwriting by
the Company; provided, that, the Holders shall not be required to make any
representation or warranty in the underwriting agreement in connection with such
offering other than as to (i) their ownership and authority to transfer, free of
liens, claims and encumbrances (other than those that arise under the terms of
this Agreement), and (ii) the accuracy and completeness of any information
furnished by them for inclusion in the registration

                                       18


statement. Notwithstanding any other provision of the Agreement, if the
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Holders on a pro rata basis based on the total number of Registrable
Securities requested to be registered by such Holders; and third, to the Other
Shareholders on a pro rata basis. No such reduction shall (i) reduce the
securities being offered by the Company for its own account to be included in
the registration and underwriting, or (ii) reduce the amount of securities of
the selling Holders included in the registration below twenty-five percent (25%)
of the total amount of securities included in such registration, unless such
offering is the initial public offering and such registration does not include
shares of any other selling shareholders, in which event any or all of the
Registrable Securities of the Holders may be excluded in accordance with the
immediately preceding sentence. Notwithstanding the foregoing provisions, the
Company may withdraw any registration statement referred to in this Section 4.4
without thereby incurring any liability to the Holders of Registrable
Securities. If any Holder of Registrable Securities or Other Shareholder
disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom by written notice to the Company and the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.

4.6. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of Section 4.3, 4.4 or 4.5 to use its best efforts to effect the
registration of any Registrable Securities under the Securities Act, the Company
will, as expeditiously as possible:

            (a) prepare and file with the Commission a registration statement
      with respect to such securities including executing an undertaking to file
      post-effective amendments and use its best efforts to cause such
      registration statement to become and remain effective for the period of
      the distribution contemplated thereby;

            (b) prepare and file with the Commission such amendments and
      supplements to such registration statement and the prospectus used in
      connection therewith as may be necessary to keep such registration
      statement effective for the period specified herein and comply with the
      provisions of the Securities Act with respect to the disposition of all
      Registrable Securities covered by such registration statement in
      accordance with the sellers' intended method of disposition set forth in
      such registration statement for such period;

            (c) furnish to each seller of Registrable Securities and to each
      underwriter such number of copies of the registration statement and each
      such amendment and supplement thereto (in each case including all
      exhibits) and the prospectus included therein (including each preliminary
      prospectus) as such persons reasonably may request in order to facilitate
      the public sale or other disposition of the Registrable Securities covered
      by such registration statement;

                                       19


            (d) use its best efforts to register or qualify the Registrable
      Securities covered by such registration statement under the securities or
      "blue sky" laws of such jurisdictions as the sellers of Registrable
      Securities or, in the case of an underwritten public offering, the
      managing underwriter reasonably shall request, provided, however, that the
      Company shall not for any such purpose be required to qualify generally to
      transact business as a foreign corporation in any jurisdiction where it is
      not so qualified or to consent to general service of process in any such
      jurisdiction, unless the Company is already subject to service in such
      jurisdiction;

            (e) use its best efforts to list the Registrable Securities covered
      by such registration statement with any securities exchange on which the
      Common Stock of the Company is then listed;

            (f) comply with all applicable rules and regulations under the
      Securities Act and Exchange Act;

            (g) immediately notify each seller of Registrable Securities and
      each underwriter under such registration statement, at any time when a
      prospectus relating thereto is required to be delivered under the
      Securities Act, of the happening of any event of which the Company has
      knowledge as a result of which the prospectus contained in such
      registration statement, as then in effect, includes an untrue statement of
      a material fact or omits to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading in
      light of the circumstances then existing, and promptly prepare and furnish
      to such seller a reasonable number of copies of a prospectus supplemented
      or amended so that, as thereafter delivered to the purchasers of such
      Registrable Securities, such prospectus shall not include an untrue
      statement of a material fact or omit to state a material fact required to
      be stated therein or necessary to make the statements therein not
      misleading in light of the circumstances then existing;

            (h) if the offering is underwritten on a "best efforts" basis and at
      the request of any seller of Registrable Securities, use its best efforts
      to furnish on the date that Registrable Securities are delivered to the
      underwriters for sale pursuant to such registration: (i) an opinion dated
      such date of counsel representing the Company for the purposes of such
      registration, addressed to the underwriters to such effects as reasonably
      may be requested by counsel for the underwriters and (ii) a letter dated
      such date from the independent public accountants retained by the Company,
      addressed to the underwriters stating that they are independent public
      accountants within the meaning of the Securities Act and that, in the
      opinion of such accountants, the financial statements of the Company
      included in the registration statement or the prospectus, or any amendment
      or supplement thereof, comply as to form in all material respects with the
      applicable accounting requirements of the Securities Act, and such letter
      shall additionally cover such other financial matters (including
      information as to the period ending no more than five (5) business days
      prior to the date of such letter) with respect to such registration as
      such underwriters reasonably may request;

                                       20


            (i) make available for inspection by each seller of Registrable
      Securities, any underwriter participating in any distribution pursuant to
      such registration statement, and any attorney, accountant or other agent
      retained by such seller or underwriter, reasonable access to all financial
      and other records, pertinent corporate documents and properties of the
      Company, as such parties may reasonably request, and cause the Company's
      officers, directors and employees to supply all information reasonably
      requested by any such seller, underwriter, attorney, accountant or agent
      in connection with such registration statement;

            (j) cooperate with the selling Holders of Registrable Securities and
      the managing underwriter, if any, to facilitate the timely preparation and
      delivery of certificates representing Registrable Securities to be sold,
      such certificates to be in such denominations and registered in such names
      as such Holders or the managing underwriter may request at least two
      business days prior to any sale of Registrable Securities;

            (k) permit any Holder of Registrable Securities which Holder, in the
      sole and exclusive judgment, exercised in good faith, of such Holder,
      might be deemed to be a controlling person of the Company, to participate
      in good faith in the preparation of such registration or comparable
      statement and to require the insertion therein of material, furnished to
      the Company in writing, which in the reasonable judgment of such Holder
      and its counsel should be included; and

            (l) in connection with such registration, use reasonable efforts to
      cause the senior management of the Company to participate in any "road
      show" presentations to prospective investors for such period of time as is
      reasonably requested by the managing underwriters.

      For purposes of this Agreement, the period of distribution of Registrable
Securities in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Registrable Securities in any
other registration shall be deemed to extend until the earlier of the sale of
all Registrable Securities covered thereby or 180 days after the effective date
thereof; provided, however, in the case of any registration of Registrable
Securities on Form S-3 or a comparable or successor form which are intended to
be offered on a continuous or delayed basis, such 180 day-period shall be
extended, if necessary, to keep the registration statement effective until all
such Registrable Securities are sold, provided that Rule 415, or any successor
rule under the Securities Act, permits an offering on a continuous or delayed
basis; and provided, further, that applicable rules under the Securities Act
governing the obligation to file a post-effective amendment, permit, in lieu of
filing a post-effective amendment which (y) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (z) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in (y) and (z) above contained in periodic reports filed
pursuant to Section 13 or 15(d) of the Exchange Act in the registration
statement.

                                       21


      In connection with each registration hereunder, the sellers of Registrable
Securities will furnish to the Company in writing such information requested by
the Company with respect to themselves and the proposed distribution by them as
shall be reasonably necessary in order to assure compliance with Federal and
applicable state securities laws.

4.7.  EXPENSES.

            (a) All expenses incurred by the Company in complying with Sections
      4.3, 4.4 and 4.5, including, without limitation, all registration and
      filing fees, printing expenses, fees and disbursements of counsel and
      independent public accountants for the Company, fees and expenses
      (including counsel fees) incurred in connection with complying with state
      securities or "blue sky" laws, fees of the National Association of
      Securities Dealers, Inc., transfer taxes, fees of transfer agents and
      registrars, costs of any insurance which might be obtained by the Company
      with respect to the offering by the Company, and up to $150,000 in
      reasonable fees and disbursements of one counsel selected by a majority in
      interest of the sellers of Registrable Securities, but excluding any
      Selling Expenses, are called "Registration Expenses". All underwriting
      discounts and selling commissions applicable to the sale of Registrable
      Securities are called "Selling Expenses."

            (b) The Company will pay all Registration Expenses in connection
      with each registration statement under Sections 4.3, 4.4 and 4.5. All
      Selling Expenses in connection with each registration statement under
      Section 4.3, 4.4 or 4.5 shall be borne by the participating sellers in
      proportion to the number of shares registered by each, or by such
      participating sellers other than the Company (except to the extent the
      Company shall be a seller) as they may agree.

4.8.  INDEMNIFICATION AND CONTRIBUTION.

            (a) In the event of a registration of any of the Registrable
      Securities under the Securities Act pursuant to Section 4.3, 4.4 or 4.5,
      the Company will indemnify and hold harmless each Holder of Registrable
      Securities, its officers, directors and partners, each underwriter of such
      Registrable Securities thereunder and each other person, if any, who
      controls such Holder or underwriter within the meaning of the Securities
      Act, against any losses, claims, damages or liabilities, joint or several,
      to which such Holder, officer, director, partner, underwriter or
      controlling person may become subject under the Securities Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or
      actions in respect thereof) arise out of or are based upon (i) any untrue
      statement or alleged untrue statement of any material fact contained in
      any registration statement under which such Registrable Securities were
      registered under the Securities Act pursuant to Section 4.3, 4.4 or 4.5,
      any preliminary prospectus or final prospectus contained therein, or any
      amendment or supplement thereto, or (ii) any omission or alleged omission
      to state in any such registration statement, prospectus, amendment or
      supplement, a material fact required to be stated therein or necessary to
      make the

                                       22


      statements therein not misleading, and will reimburse each such seller,
      and such officer, director and partner, each such underwriter and each
      such controlling person for any legal or other expenses reasonably
      incurred by them in connection with investigating or defending any such
      loss, claim, damage, liability or action, promptly after being so
      incurred, provided, however, that the Company will not be liable in any
      such case if and to the extent that any such loss, claim, damage or
      liability arises out of or is based upon an untrue statement or alleged
      untrue statement or omission or alleged omission so made in conformity
      with written information furnished by any such Holder, any such
      underwriter or any such controlling person in writing specifically for use
      in such registration statement or prospectus.

            (b) In the event of a registration of any of the Registrable
      Securities under the Securities Act pursuant to Section 4.3, 4.4 or 4.5,
      each seller of such Registrable Securities thereunder, severally and not
      jointly, will indemnify and hold harmless the Company, each person, if
      any, who controls the Company within the meaning of the Securities Act,
      each officer of the Company who signs the registration statement, each
      director of the Company, each other seller of Registrable Securities, each
      underwriter and each person who controls any underwriter within the
      meaning of the Securities Act, against all losses, claims, damages or
      liabilities, joint or several, to which the Company or such officer,
      director, other seller, underwriter or controlling person may become
      subject under the Securities Act or otherwise, insofar as such losses,
      claims, damages or liabilities (or actions in respect thereof) arise out
      of or are based upon (i) any untrue statement or alleged untrue statement
      of any material fact contained in any registration statement under which
      such Registrable Securities were registered under the Securities Act
      pursuant to Section 4.3, 4.4 or 4.5, any preliminary prospectus or final
      prospectus contained therein, or any amendment or supplement thereto, or
      (ii) any omission or alleged omission to state therein a material fact
      required to be stated therein or necessary to make the statements therein
      not misleading (if and only to the extent that any such statement or
      alleged statement or omission or alleged omission was made in reliance
      upon and in conformity with written information furnished to the Company
      by such seller specifically stating that it is for use in the preparation
      of such registration statement, preliminary prospectus, final prospectus,
      summary prospectus, amendment or supplement) and will reimburse the
      Company and each such officer, director, other seller, underwriter and
      controlling person for any legal or other expenses reasonably incurred by
      them in connection with investigating or defending any such loss, claim,
      damage, liability or action, promptly after being so incurred; provided,
      however, that the liability of such indemnifying party under this Section
      4.8(b) shall be limited to the amount of the net proceeds received by such
      indemnifying party in the offering giving rise to such liability. Such
      indemnity shall remain in full force and effect, regardless of any
      investigation made by or on behalf of the Company or any such director,
      officer or controlling person and shall survive the transfer of such
      securities by such seller.

                                       23


            (c) Promptly after receipt by an indemnified party hereunder of
      notice of the commencement of any action, such indemnified party shall, if
      a claim in respect thereof is to be made against the indemnifying party
      hereunder, notify the indemnifying party in writing thereof, but the
      omission so to notify the indemnifying party shall not relieve it from any
      liability which it may have to such indemnified party other than under
      this Section 4.8 and shall only relieve it from any liability which it may
      have to such indemnified party under this Section 4.8 if and to the extent
      the indemnifying party is actually prejudiced by such omission. In case
      any such action shall be brought against any indemnified party and it
      shall notify the indemnifying party of the commencement thereof, the
      indemnifying party shall be entitled to participate in and, to the extent
      it shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such indemnified party, and, after notice from the
      indemnifying party to such indemnified party of its election so to assume
      and undertake the defense thereof, the indemnifying party shall not be
      liable to such indemnified party under this Section 4.8 for any legal
      expenses subsequently incurred by such indemnified party in connection
      with the defense thereof other than reasonable costs of investigation and
      of liaison with counsel so selected, provided, however, that, if the
      defendants in any such action include both the indemnified party and the
      indemnifying party and the indemnified party shall have reasonably
      concluded that there may be reasonable defenses available to it which are
      different from or additional to those available to the indemnifying party
      or that the interests of the indemnified party reasonably may be deemed to
      conflict with the interests of the indemnifying party, the indemnified
      party shall have the right to select a separate counsel and to assume such
      legal defenses and otherwise to participate in the defense of such action,
      with the expenses and fees of such separate counsel and other expenses
      related to such participation to be reimbursed by the indemnifying party
      as incurred. No indemnifying party, in the defense of any such claim or
      action, shall, except with the consent of each indemnified party, consent
      to entry of any judgment or enter into any settlement which does not
      include as an unconditional term thereof the giving by the claimant or
      plaintiff to such indemnified party of a release from all liability in
      respect to such claim or action. Each indemnified party shall furnish such
      information regarding itself or the claim in question as an indemnifying
      party may reasonably request in writing and as shall be reasonably
      required in connection with defense of such claim and litigation resulting
      therefrom.

            (d) In order to provide for just and equitable contribution to joint
      liability under the Securities Act in any case in which either (i) any
      Holder of Registrable Securities exercising rights under this Agreement,
      or any controlling person of any such Holder, makes a claim for
      indemnification pursuant to this Section 4.8 but it is judicially
      determined (by the entry of a final judgment or decree by a court of
      competent jurisdiction and the expiration of time to appeal or the denial
      of the last right of appeal) that such indemnification may not be enforced
      in such case notwithstanding the fact that this Section 4.8 provides for
      indemnification in such case, or (ii) contribution under the Securities
      Act may be required on the part of any such selling Holder or any such
      controlling person in

                                       24


      circumstances for which indemnification is provided under this Section
      4.8; then, and in each such case, the Company and such Holder will
      contribute to the aggregate losses, claims, damages or liabilities to
      which they may be subject (after contribution from others) in such
      proportion as is appropriate to reflect the relative fault of the Company
      on the one hand and of the Holder on the other in connection with the
      matter that resulted in such loss, claim, damage or liability, as well as
      any other relevant equitable considerations. The relative fault of the
      Company and of the Holder will be determined by a court of law by
      reference to, among other things, whether the untrue or alleged untrue
      statement of a material fact or the omission to state a material fact
      relates to information supplied by the Company or by the Holder and the
      parties' relative intent, knowledge, access to information and opportunity
      to correct or prevent such statement or omission; provided, however, that,
      in any such case, (A) no such Holder of Registrable Securities will be
      required to contribute any amount in excess of the net proceeds received
      from the sale of all such Registrable Securities offered by it pursuant to
      such registration statement; and (B) no person or entity guilty of
      fraudulent misrepresentation (within the meaning of Section 11(f) of the
      Securities Act) will be entitled to contribution from any person or entity
      who was not guilty of such fraudulent misrepresentation. Such Holders'
      obligations to contribute as provided in this Section 4.8(d) are several
      in proportion to the relative value of their respective Registrable
      Securities covered by such registration statement and not joint. In
      addition, no person or entity shall be obligated to contribute hereunder
      any amounts in payment for any settlement of any action or claim effected
      without such person's or entity's consent, which consent shall not be
      unreasonably withheld.

            (e) The indemnities and obligations provided in this Section 4.8
      shall survive the transfer of any Registrable Securities by such Holder.

4.9. CHANGES IN COMMON STOCK. If, and as often as, there is any change in the
Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock as so changed.

4.10. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, except as
provided in paragraph (c) below, at all times after ninety (90) days after any
registration statement covering a public offering of securities of the Company
under the Securities Act shall have become effective, the Company agrees to:

            (a) make and keep public information available, as those terms are
      understood and defined in Rule 144 under the Securities Act (or any
      successor rule);

                                       25


            (b) use its best efforts to file with the Commission in a timely
      manner all reports and other documents required of the Company under the
      Securities Act and the Exchange Act; and

            (c) furnish to each Holder of Registrable Securities forthwith upon
      request (i) a written statement by the Company as to its compliance with
      the reporting requirements of such Rule 144 (or any successor rule), (ii)
      at any time after it has become subject to such reporting requirements, of
      the Securities Act and the Exchange Act, a copy of the most recent annual
      or quarterly report of the Company and (iii) such other reports and
      documents so filed by the Company as such Holder may reasonably request in
      availing itself of any rule or regulation of the Commission allowing such
      Holder to sell any Registrable Securities without registration.

4.11. "MARKET STAND-OFF" AGREEMENT. Each of the Holders of Registrable
Securities agrees, severally and not jointly, if reasonably requested by the
Company and an underwriter of Common Stock (or other securities) of the Company,
not to sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder of Registrable Securities during
a period not to exceed one hundred and eighty (180) days following the effective
date of the Company's Initial Public Offering (or such additional period, not to
exceed 17 days, as may be reasonably requested by the Company in order to permit
the publication or distribution of a research report or make a public appearance
concerning the Company prior to and after the expiration, waiver or termination
of a lock-up agreement executed in connection with the Initial Public Offering),
and to enter into an agreement to such effect; provided, that (y) all persons
including Shares in such offering and (z) all of the Company's officers and
directors and holders of at least 5% of the Company's Common Stock also enter
into agreements to such effect. Nothing in this Section 4.11 shall require any
Investor to make any factual representations other than the Investor's
commitment not to sell or otherwise transfer or dispose of any capital stock of
the Company as provided herein.

      The Company may impose stop-transfer instructions with respect to the
shares (or securities) subject to the foregoing restriction until the end of
said period.

4.12. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Section 4 may be assigned (but
only with all related obligations) by a Holder of Registrable Securities who is
a Qualified Stockholder to a transferee or assignee of such securities who is
not engaged in a business activity competitive with the Company (as reasonably
determined by the Company's Board of Directors) and who, after such assignment
or transfer, holds (i) at least one half of one percent (0.5%) of the shares of
the Preferred Stock (and is, therefore, a Qualified Shareholder) (subject to
appropriate adjustment for stock splits, stock dividends, combinations and
similar recapitalization events), (ii) who, after any such transfer, as a single
entity, holds all Registrable Securities of the Company held by the transferring
party immediately prior to such transfer, or (iii) who is an Affiliate, partner
or member of such Holder, provided that in each of the foregoing cases the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address

                                       26


of such transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if (i) immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Act and (ii) the transferee or assignee shall acknowledge
in writing that the transferred or assigned Registrable Securities shall remain
subject to this Agreement. For the purposes of determining the number of shares
of Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants and
siblings of such partners or spouses who acquire Registrable Securities by gift,
will or intestate succession) shall be aggregated together and with the
partnership; provided, that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 4.

4.13. LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. Except for any registration
rights granted to the parties pursuant to this Agreement and for the
registration rights that are both in effect as of the Effective Date and listed
on Schedule 4.13 hereto, the Company shall not grant to any third party any
registration rights senior to, or that conflict with, any of those contained
herein, so long as any of the registration rights under this Agreement remains
in effect; provided, however, that any additional entity may be added as an
"Other Shareholder" solely for purposes of Section 4.5 and as a "Holder" solely
for purposes of such provisions of Sections 4.6 thru 4.13 that such entity may
agree to become subject as a result of its negotiations with the Company without
an amendment to this Agreement upon the execution and delivery by such entity of
a Joinder Agreement substantially in the form of Exhibit G attached hereto. The
execution of any such Joinder Agreement(s) shall not constitute an amendment for
purposes of Section 7.13 hereof.

5.    AFFIRMATIVE COVENANTS OF THE COMPANY

The Company covenants and agrees that, from and after the date of the Initial
Closing under the Subscription Agreement and thereafter so long as any Investor
owns Preferred Stock or Registrable Securities, it will perform and observe the
following covenants and provisions, and will cause each Subsidiary, if and when
such Subsidiary exists, to perform and observe the following covenants and
provisions as applicable to such Subsidiary.

5.1. FINANCIAL STATEMENTS; OTHER REPORTS. The Company will deliver to each
Qualified Stockholder:

            (a) as soon as available and in any event within 45 days after the
      end of each of the first three quarters of each fiscal year of the
      Company, a consolidated balance sheet of the Company and its Subsidiaries
      as of the end of such quarter and the related statements of income and
      stockholders' equity and of cash flows of the Company for the period
      commencing at the end of the previous fiscal year and ending with the end
      of such quarter, setting forth in each case in

                                       27


      comparative form the corresponding figures for the corresponding period of
      the preceding fiscal year and the budget for such current year, all in
      reasonable detail and prepared in accordance with generally accepted
      accounting principles consistently applied, and duly certified (subject to
      year-end audit adjustments) by the chief financial officer of the Company;

            (b) the Company shall use its best efforts to provide within 90
      days, but in no event more than 120 days, after the end of each fiscal
      year of the Company, a copy of the annual audit report for such year for
      the Company, including therein a consolidated balance sheet of the Company
      and its Subsidiaries as of the end of such fiscal year and statements of
      income and stockholders' equity and of cash flows of the Company for such
      fiscal year, setting forth in each case in comparative form the
      corresponding figures for the preceding fiscal year, all duly certified by
      independent public accountants of recognized standing acceptable to the
      Qualified Stockholders;

            (c) promptly after sending or making available, and only to the
      extent available and requested in writing, such reports and financial
      statements as the Company shall send or make available to the management
      of the Company from time to time;

            (d) promptly upon receipt thereof, any written report submitted to
      the Company by independent public accountants in connection with an annual
      or interim audit of the books of the Company and its Subsidiaries made by
      such accountants;

            (e) promptly after sending, making available, or filing the same,
      such reports and financial statements as the Company shall send or make
      available to the stockholders of the Company; and

            (f) as soon as available in the form approved by the Board of
      Directors, and in any event before the beginning of the fiscal year to
      which it applies, the annual budget and business plan of the Company.

      Neither the foregoing provisions of this Section nor any other provision
of this Agreement shall be in limitation of any rights which a Qualified
Stockholder may have with respect to the books and records of the Company and
its Subsidiaries, or to inspect their properties or discuss their affairs,
finances and accounts, under the laws of the jurisdictions in which they are
incorporated.

5.2. STOCK DISPOSITION AGREEMENT. The Company and each employee, officer,
director or consultant of the Company who hereafter acquires shares of the
Company's capital stock from the Company, or any option or right to acquire
shares of the Company's capital stock from the Company, shall enter into a stock
disposition agreement, or similar agreement, in such form as approved by the
Board of Directors, and with such amendments or modifications as may be entered
into or effected with the approval of the Board of Directors.

                                       28


5.3. CONFIDENTIALITY AND ASSIGNMENT OF INVENTION PROVISIONS. Other than as may
be approved by the Board of Directors from time-to-time on a case-by-case basis,
the Company shall require all officers, employees, contractors and consultants
who may have access to Company Intellectual Property to execute and deliver an
Inventions Agreement. The terms "Company Intellectual Property" and "Inventions
Agreement" shall have the meanings assigned to such terms in the Subscription
Agreement.

5.4. USE OF NAME. Except where required by law or regulation, the Company shall
not use the name of any Investor in any press release or other public disclosure
without the advance consent of the relevant Investor, such consent not to be
unreasonably withheld or delayed. The foregoing notwithstanding, the previous
sentence of this Section 5.3 shall not be interpreted to require the Company to
obtain the advance consent of any Investor in order to identify to potential
third party investors in a private offering in compliance with the Securities
Act the fact that such Investor is an investor in the Company.

6.    PRIOR AGREEMENTS

By execution of this Agreement, the Company, each Series A and Series B
Investor, Founder, Series C Purchaser, Series D Purchaser, Series E Purchaser
and Series E-2 Purchaser agrees as follows:

            (a) the Fourth Amended Rights Agreement, Third Amended Rights
      Agreement, the Second Amended Rights Agreement, the Amended Rights
      Agreement, the Original Rights Agreement are hereby terminated and
      replaced in their entirety by this Fifth Amended and Restated Investor
      Rights Agreement; and

            (b) each Series A and Series B Investor, Series C Purchaser, Series
      D Purchaser and Series E Purchaser agrees and consents to waive any and
      all percentage maintenance rights with respect to the offer and sale by
      the Company of shares of its Series E-2 Stock to the Series E-2 Purchasers
      contemplated by the Subscription Agreement including, without limitation,
      such rights set forth in Section 2 "Percentage Maintenance Rights" of that
      certain Fourth Amended Rights Agreement.

7.    MISCELLANEOUS

7.1. NOTICES. All notices, requests, consents and other communications hereunder
shall be in writing, shall be addressed to the receiving party's address set
forth below or to such other address as a party may designate by notice
hereunder, and shall be either (i) delivered by hand, (ii) made by telecopy or
facsimile transmission, (iii) sent by overnight courier, or (iv) sent by
registered or certified mail, return receipt requested, postage prepaid;
provided, however, that if the notice being provided under this Section 7.1 is
to an address outside of the United States, such notice shall be sent using the
methods specified in (ii) and/or (iii) above.

                                       29


If to the Company:                  PTC Therapeutics, Inc.
                                    100 Corporate Court
                                    Middlesex Business Center
                                    South Plainfield, NJ  07080-2449
                                    Attn.:  Legal Dep't

With a copy to:                     Wilmer Cutler Pickering Hale and Dorr LLP
                                    60 State Street
                                    Boston, Massachusetts  02109

                                    Attn:  David E. Redlick, Esq.
And an email copy to                legal@ptcbio.com

If to the Holders:                  To the addresses set forth on
                                    Exhibit A, Exhibit B, Exhibit C,
                                    Exhibit D, Exhibit E or
                                    Exhibit F attached hereto

All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telecopy, facsimile, or email transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or, in the case of
international deliveries, two business days following the day such notice is
delivered to the courier service or (iv) if sent by registered or certified
mail, on the fifth business day following the day such mailing is made.

7.2. ENTIRE AGREEMENT. This Agreement, together with those certain Stock
Restriction Agreements by and between the Company and each of the Founders dated
August 19, 1998, embodies the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including the Fourth Amended Rights Agreement, the Third Amended
Rights Agreement, the Second Amended Rights Agreement, the Amended Rights
Agreement and the Original Rights Agreement. No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or restrict, the express
terms and provisions of this Agreement.

7.3. MODIFICATIONS AND AMENDMENTS. This Agreement may not be amended or
modified, and no provision hereof may be waived, without the written consent of
the Company, Holders of at least sixty-six and two-thirds percent (66 2/3 %) of
the outstanding shares of Preferred Stock, on an as-converted, fully-diluted
basis (after giving effect to the issuance of the Series E-2 Stock pursuant to
the Subscription Agreement); provided, that, (i) if any such amendment,
modification or waiver adversely affects the interests of any Stockholder or
group of Stockholders differently from the interests of any other Stockholder,
such amendment, modification or waiver shall also require the written consent of
such Stockholder or of a majority of such group of Stockholders, as the case may
be; provided, however, that the determination of whether

                                       30


any Stockholder or group of Stockholders is affected differently shall be made
without regard to the number of shares of Preferred Stock held by such
Stockholder or group of Stockholders and (ii) no such amendment, modification or
waiver shall impose any new or increased obligation on any Stockholder without
the written agreement of the affected Stockholder. Any waiver or consent
hereunder shall be effective only in the specific instance and for the purpose
for which it was given and shall not constitute a continuing waiver or consent.

7.4. ASSIGNMENT. Except by operation of law, the rights and obligations of the
Company under this Agreement may not be assigned by the Company without the
prior written consent of at least a majority of the Holders of Registrable
Securities, unless specifically permitted by the terms hereof. Any purported or
attempted assignment in violation of this Section 7.4 shall be null and void.

7.5. BENEFIT. All statements, representations, warranties, covenants and
agreements in this Agreement shall be binding on the parties hereto and shall
inure to the benefit of the respective successors and permitted assigns of each
party hereto. Nothing in this Agreement shall be construed to create any rights
or obligations except among the parties hereto and no person or entity shall be
regarded as a third-party beneficiary of this Agreement.

7.6. AGGREGATION OF STOCK. All shares held or acquired by affiliated entities or
persons or successor entities of a Stockholder shall be aggregated together with
the shares held by such Stockholder for the purposes of determining the
availability of rights under this Agreement.

7.7. GOVERNING LAW. This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the law of the
State of Delaware, without giving effect to the conflict of law principles
thereof.

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

7.9. INTERPRETATION. The parties hereto acknowledge and agree that: (i) each
party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; (ii) the rule of construction to
the effect that any ambiguities are resolved against the drafting party shall
not be employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all parties hereto
and not in favor of or against any party, regardless of which party was
generally responsible for the preparation of this Agreement.

                                       31


7.10. HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify or affect the meaning or construction of any of the terms or
provisions hereof.

7.11. ENFORCEMENT. Each of the parties hereto acknowledges and agrees that the
rights acquired by each party hereunder are unique and that irreparable damage
would occur in the event that any of the provisions of this Agreement to be
performed by the other parties were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, in addition to any other
remedy to which the parties hereto are entitled at law or in equity, each party
hereto shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement by any other party and to enforce specifically the terms and
provisions hereof in any federal or state court to which the parties have agreed
hereunder to submit to jurisdiction.

7.12. NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a party
hereto in exercising any right, power or remedy under this Agreement, and no
course of dealing among the parties hereto, shall operate as a waiver of any
such right, power or remedy of the party. No single or partial exercise of any
right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.

7.13. COUNTERPARTS. This Agreement may be executed by facsimile signature and in
one or more counterparts, and by different parties hereto on separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

7.14. TERMINATION. The respective rights and obligations of the parties under
the following provisions of this Agreement shall terminate upon the consummation
of an Initial Public Offering: Section 1.1 (but only with respect to Shares
acquired after the Initial Public Offering); Article 2; Article 3 and Article 5.

7.15. LEGAL REPRESENTATIONS OF THE PARTIES. Each Holder and Founder acknowledges
that (i) Credit Suisse First Boston Equity Partners L.P. ("CSFB") retained Paul,
Weiss, Rifkind, Wharton & Garrison LLP ("PWRW&G") to represent CSFB in
connection with this Agreement, (ii) PWRW&G represents CSFB and any other Holder
who has specifically retained PWRW&G in writing for representation with respect
to this Agreement (CSFB and all such Holders, collectively, the "PWRW&G
Clients") and (iii) no Holder, other than the PWRW&G Clients, nor any Founder
has relied on PWRW&G for legal counsel in connection with the negotiation,
preparation, execution, delivery or performance of this Agreement.


                                       32


      IN WITNESS WHEREOF, the parties hereto have executed this Fifth Amended
and Restated Investor Rights Agreement or caused this Fifth Amended and Restated
Investor Rights Agreement to be executed by their duly authorized
representatives, as of the date first written above.

                                              PTC THERAPEUTICS, INC.

                                              By:   /S/ STUART W. PELTZ
                                                    -------------------
                                                    Name: Stuart W. Peltz
                                                    Title: President and CEO

                                              FOUNDERS

                                              By:   /S/ STUART W. PELTZ
                                                    -------------------
                                                    Stuart W. Peltz

                                              By:   /S/ ALLAN S. JACOBSON
                                                    ---------------------
                                                    Allan S. Jacobson

AGREED TO AND ACKNOWLEDGED BY:


/S/ DENISE BROUILLETTE JACOBSON
- -------------------------------
Denise Brouillette Jacobson

[Investors Executed by Means of Omnibus Signature Pages or Stockholder Consents,
     the forms of which are attached hereto as Exhibit H-1and Exhibit H-2,
                                 respectively]

                                                                     Exhibit 4.3

THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER
(A) A REGISTRATION WITH RESPECT TO THERETO SHALL BE EFFECTIVE UNDER THE
SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.

                                               For the purchase of up to 295,000
                                             shares of Series C Preferred Stock,
                                                       par value $.001 per share

No. W-01                                                            May 26, 2000

      PTC THERAPEUTICS, INC., a Delaware corporation (the "Company"),
hereby certifies that, for good and valuable consideration, Three Crowns Capital
(Bermuda) Ltd. or its permitted assigns (the "Warrant Holder") is entitled,
subject to the terms set forth below, to purchase from the Company at any time
on or before 5:00 p.m., eastern time, on May 26, 2010 (the "Exercise Period"),
up to two hundred ninety-five thousand (295,000) fully-paid and non-assessable
shares of Series C Preferred Stock, par value $.001 per share, of the Company
(the "Series C Preferred Stock"), or shares of the Common Stock, par value $.001
per share, of the Company (the "Common Stock") upon a mandatory conversion of
the Series C Preferred Stock as provided in Section 3 hereof (the Series C
Preferred Stock and the Common Stock are hereinafter collectively referred to as
"Shares"), at a price per share (the "Exercise Price") which shall initially be
$2.50 per share and which shall be subject to adjustment as herein provided.

      1. Exercise of Warrants.

      1.1. Exercise. Subject to the terms and conditions of this Warrant, this
Warrant shall become exercisable by the Warrant Holder on May 26, 2000.

      1.2. Procedure to Exercise. This Warrant may be exercised by the Warrant
Holder, in whole or in part, by surrendering this Warrant, with the purchase
form appended hereto as Exhibit A duly executed by such Warrant Holder or by
such Warrant Holder's duly authorized attorney, at the principal office of the
Company, or at such other office or agency as the Company may designate,
accompanied by payment in full by cash, check or wire transfer of the amount
obtained by multiplying the number of Shares in the notice of exercise by the
Exercise Price (the "Purchase Price").

      1.3. Net Issue Exercise. In lieu of exercising this Warrant in the manner
provided above in Section 1.2, the Warrant Holder may elect to receive shares
equal to the value of this Warrant (or the portion thereof being converted) by
surrender of this Warrant, in whole or in part, at the principal office of the
Company together with the notice of exercise attached hereto



as Exhibit A, in which event the Company shall issue to the Warrant Holder the
number of Shares computed using the following formula (a "Net Issue Exercise"):

                                  X = Y (A - B)
                                      ---------
                                          A

Where:      X = The number of Shares to be issued to the Warrant Holder.

            Y = The number of Shares purchasable under this Warrant (at the date
                of such calculation) that are being converted, in whole or in
                part, hereunder.

            A = The Fair Market Value of one Share (at the date of such
                calculation).

            B = The Exercise Price (as adjusted to the date of such
                calculation).

      For purposes of this Section 1.3, if any Shares of the Warrant Holder or
any other shareholder of the Company are registered or publicly traded, then the
Fair Market Value of one Share shall mean the average of the closing bid and
asked prices of the Common Stock quoted in the over the counter market summary
or the closing price quoted by the Nasdaq National Market or any exchange on
which the Common Stock is listed, whichever is applicable, as published in the
Western Edition of The Wall Street Journal for the business day prior to the
date of determination of fair market value. If the Shares are not traded on the
Nasdaq National Market or on an exchange, the Fair Market Value of one Share
shall be determined in good faith by the Company's Board of Directors.

      1.4. Effectiveness. Each exercise or Net Issue Exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the day on which this Warrant shall have been surrendered to the Company as
provided in Sections 1.2 or 1.3 above. At such time, the person or persons in
whose name or names any certificates for the Shares shall be issuable upon such
exercise or Net Issue Exercise as provided in Section 2 below shall be deemed to
have become the holder or holders of record of the Shares represented by such
certificates.

      2. Delivery of Stock Certificate, Etc. As soon as practicable after the
exercise or Net Issue Exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense will cause to be
issued in the name of, and delivered to, the Warrant Holder, or as such Warrant
Holder (upon payment by such Warrant Holder of any applicable transfer taxes)
may direct (i) a certificate or certificates for the number of fully paid and
non-assessable Shares to which the Warrant Holder shall be entitled upon such
exercise or Net Issue Exercise, and (ii) in case such exercise or Net Issue
Exercise is in part only, a new warrant or warrants (dated the date hereof) of
like tenor, calling in the aggregate on the face or faces thereof for the number
of Shares equal (without giving effect to any adjustment therein) to the number
of Shares called for on the face of this Warrant minus the number of Shares
purchased by the Warrant Holder upon such exercise or Net Issuance Exercise as
provided in Sections 1.2 or 1.3 herein.

      3. Adjustments Upon Mandatory Conversion of Series C Preferred Stock. Upon
any mandatory conversion of the Series C Preferred Stock pursuant to the
Company's Certificate of

                                       2


Incorporation, as amended or amended and restated from time to time, this
Warrant shall cease to be exercisable for shares of Series C Preferred Stock and
shall become exercisable for that number of shares of Common Stock into which
the shares of Series C Preferred Stock purchasable hereunder would have been
convertible immediately prior to such mandatory conversion, and such that
payment of the Exercise Price, or any multiple thereof, shall entitle the
Warrant Holder to receive the number of shares of Common Stock as would have
been issued upon conversion of each share of Series C Preferred Stock
purchasable hereunder immediately prior to such mandatory conversion.

      4. Stock Splits, Stock Dividends and Combinations. If the Company at any
time subdivides the outstanding shares of Series C Preferred Stock, or issues a
stock dividend on the outstanding shares of Series C Preferred Stock, the
Exercise Price in effect immediately prior to such subdivision or the issuance
of such stock dividend shall be proportionately decreased, and the number of
Shares shall be proportionately increased, and if the Company at any time
combines the outstanding shares of Series C Preferred Stock, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased, and the number of shares shall be proportionately decreased,
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be. Upon any mandatory conversion of
the Series C Preferred Stock as provided in Section 3, each reference to Series
C Preferred Stock in this Section 4 shall be deemed to be Common Stock.

      5. Conversions; Reorganizations; Reclassifications; Merger; Sales. In case
of any capital reorganization or any reclassification of the capital stock of
the Company or in case of the consolidation or merger of the Company with or
into another corporation or the conveyance of all or substantially all of the
assets of the Company to another corporation, this Warrant shall thereafter be
exercisable for the number of shares of stock or other securities or property to
which a holder of the number of Shares deliverable upon exercise of the Warrant
would have been entitled to upon such conversion, reorganization,
reclassification, consolidation, merger or conveyance and, in any such case,
appropriate adjustment as determined by the Board of Directors of the Company
shall be made in the application of the provisions herein set forth with respect
to the rights and interests thereafter of the Warrant Holder to the end that the
provisions set forth herein (including provisions with respect to changes in and
other adjustments of the Exercise Price and the number of Shares) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the exercise of
the Warrant.

      6. Statement of Adjustment. Whenever the Exercise Price shall be adjusted
as provided herein, the Company shall promptly file with the Secretary of the
Company or at such other place as shall be designated by the Company, a
statement, signed by its chief financial officer, showing in detail the facts
requiring such adjustment, the Exercise Price in effect before and after such
adjustment and the kind and amount of shares of capital stock, securities or
other property thereafter to be received upon the exercise of this Warrant. The
Company shall also cause a copy of such statement to be sent in the manner
specified in Section 16.3 to the Warrant Holder.

      7. Notice of Adjustment. In the event the Company shall propose to take
any action of the types described in Sections 4 or 5, the Company shall give
notice to the Warrant Holder in

                                       3


the manner set forth in Section 16.3, which notice shall specify the record
date, if any, with respect to any such action and the date on which such action
is to take place. Such notice shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the effect of such action
(to the extent such effect may be known at the date of such notice) on the
Exercise Price and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon the exercise hereof. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
ten (10) days prior to the date so fixed, and in case of all other actions, such
notice shall be given at least twenty (20) days prior to the taking of such
proposed action. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.

      8. Taxes. The Company shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Company upon the exercise or conversion hereof.

      9. No Fractional Shares. Each adjustment in the number of Shares
purchasable hereunder shall be calculated, to the nearest whole share with
fractional shares disregarded.

      10. Covenants as to Series C Preferred Stock and Common Stock. The Company
covenants and agrees that the shares of Series C Preferred Stock issuable
hereunder, and the Common Stock issuable upon conversion thereof, and the Common
Stock issuable hereunder, as the case may be, will, upon issuance in accordance
with the terms hereof, be validly issued and outstanding, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
and free from all taxes, liens and charges with respect to the issuance thereof
imposed by or through the Company. The Company further covenants and agrees that
the Company will at all times have authorized and reserved, free from preemptive
rights imposed by or through the Company, a sufficient number of shares of
Series C Preferred Stock and Common Stock to provide for the exercise of the
rights represented by this Warrant. The Company further covenants and agrees
that if any shares of capital stock to be reserved for the purpose of the
issuance of shares upon the exercise of this Warrant require registration or
qualification with or approval by the Securities and Exchange Commission or any
state regulatory agency under Federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company will in good faith
and as expeditiously as possible endeavor to secure such registration,
qualification or approval, as the case may be. Holders of Series C Preferred
Stock and Common Stock issuable upon exercise of this Warrant or conversion of
any such shares, as the case may be, shall be entitled to all the rights and
privileges of the Purchase Agreement and the Registration Rights Agreement dated
as of the date hereof between the Company and the Investors (as defined therein)
with respect to such shares.

      11. No Impairment. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, or any other similar voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrant Holder against
impairment due to such event. Without limiting the generality of the foregoing,
the Company (a) will not increase the

                                       4


par value of any shares of stock receivable on the exercise of the Warrant above
the amount payable therefor on such exercise, (b) will take all action that may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock, free from all taxes, liens
and charges with respect to the issue thereof, on the exercise of all of the
Warrants from time to time outstanding and (c) will not consolidate with or
merge into any other person or permit any such person to consolidate with or
merge into the Company (if the Company is not the surviving person), unless such
other person shall expressly assume in writing and will be bound by all the
terms of this Warrant.

      12. Compliance with Securities Act.

      12.1. Unregistered Securities. The Warrant Holder acknowledges that this
Warrant and the Shares have not been registered under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any successor
legislation (the "Securities Act"), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Shares in
the absence of (i) an effective registration statement under the Securities Act
covering this Warrant or such Shares and registration or qualification of this
Warrant or such Shares under any applicable "blue sky" or state securities law
then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that
such registration and qualification are not required. The Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).

      12.2. Investment Letter. Without limiting the generality of Section 12.1,
unless the offer and sale of any shares of Shares shall have been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue the Shares unless and until the Warrant Holder shall have executed an
investment letter in form and substance satisfactory to the Company, including a
warranty at the time of such exercise that the Warrant Holder is acquiring such
shares for its own account, for investment and not with a view to, or for sale
in connection with, the distribution of any such shares.

      12.3. Legend. Certificates delivered to the Warrant Holder pursuant to
Section 2 shall bear the following legend or a legend in substantially similar
form:

      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933 OR ANY OF THE SECURITIES LAWS. THESE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
      DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
      DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
      OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE
      SECURITIES ACT OF 1933 AND ANY OTHER APPLICABLE SECURITIES LAWS, UNLESS
      THE HOLDER SHALL HAVE OBTAINED AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."

                                       5


      13. Transferability. Without the prior written consent of the Company, the
Warrant shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Warrant or of any rights granted hereunder contrary to
the provisions of this Section 13, or the levy of any attachment or similar
process upon the Warrant or such rights, shall be null and void.

      14. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably in its discretion impose (which shall in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed.

      15. Register of Warrants. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Warrant Holder), a register for the Warrants in which the Company shall record
the name and address of the person in whose name a Warrant has been issued, as
well as the name and address of each transferee and each prior owner of such
Warrant.

      16. Miscellaneous.

      16.1. Waivers and Amendments. This Warrant or any provisions hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the Company and by Warrant Holders who hold or have the right to acquire at
least two-thirds of the Shares at such time issued or issuable upon exercise of
the Warrants, provided that no change, addition, omission or waiver shall be
made without the written consent of the Warrant Holder(s) which affects (i) the
number of Shares issuable on exercise of this Warrant, (ii) the Exercise Price
or (iii) any other provision other than in a manner in which all the Warrants
are affected.

      16.2. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without giving
effect to the conflicts of laws principles thereof.

      16.3. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be hand delivered, sent by facsimile or
other electronic medium, or mailed, postage prepaid, or sent by reputable
overnight courier, delivery charges prepaid, addressed as follows or to such
other address as may be furnished in writing to the other parties hereto:

If to the Warrant Holder:       Three Crowns Capital (Bermuda) Ltd.
                                Clarendon House
                                PO Box HM 666
                                2 Church Street
                                Hamilton HM KX
                                Bermuda
                                441-292-4720 (Fax)
                                Attention:  Peter Svennilson

                                       6


With a copy to:                 Conyers Dill & Pearman
                                Clarendon House
                                2 Church Street
                                Hamilton HM 11
                                Bermuda
                                441-292-4720 (Fax)
                                Attention:  Peter A.S. Pearman

If to the Company:              PTC Therapeutics, Inc.
                                Two Chestnut Street
                                Grafton, MA 01519
                                508-856-5920 (Fax)
                                Attention:  President

With a copy to:                 Mintz, Levin, Cohn, Ferris, Glovsky
                                and Popeo, P.C.
                                One Financial Center
                                Boston, MA 02111
                                617-542-6000
                                617-542-2241 (Fax)
                                Attention:  Jeffrey M. Wiesen, Esq.

      All such notices and communications shall be deemed to have been duly
given (i) five (5) business days after being deposited in the mail, postage
prepaid if mailed, (ii) one (1) business day after being sent by overnight
courier, (iii) when receipt acknowledged if telecopied and (iv) upon receipt if
delivered by hand.

      16.4. Headings. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the terms hereof.

      16.5. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

      16.6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any Shares issued or issuable
upon the exercise of the Warrant in a manner which interferes with the timely
exercise of this Warrant.

      16.7. No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the Warrant Holder to any voting rights or other rights as a stockholder
of the Company prior to the exercise or conversion of the Warrant, provided that
nothing herein shall be construed to limit or impair other rights that the
Warrant Holder may have under this Warrant or otherwise. No provision of this
Warrant, in the absence of affirmative action by the Warrant Holder to purchase
the Shares, and no mere enumeration herein of the rights or privileges of the
Warrant Holder,

                                       7


shall give rise to any liability of such Warrant Holder for the Exercise Price
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

      IN WITNESS WHEREOF, the undersigned has caused this Warrant to be executed
as an instrument under seal.

                                     PTC THERAPEUTICS, INC.

                                     By:  /s/ Stuart Peltz
                                          ____________________________


                                       8


                                    EXHIBIT A

                    NOTICE OF EXERCISE OR NET ISSUE EXERCISE

                                           Date:
                                                 _______________________________

PTC Therapeutics, Inc.
100 Corporate Court
Middlesex Business Center
South Plainfield, NJ 07080
Attention: President

Gentlemen:

      The undersigned hereby elects to exercise or Net Issue Exercise the
enclosed Warrant issued to it by PTC Therapeutics, Inc. (the "Company") and
dated as of ________, 20_.

      The undersigned elects to:

      [ ]   Exercise the Warrant and to purchase thereunder ______ shares of the
            Series C Preferred Stock of the Company (the "Shares") at an
            exercise price of ______ per Share for an aggregate purchase price
            of ________ Dollars ($_______) (the "Purchase Price"). Pursuant to
            the terms of the Warrant, the undersigned has delivered the Purchase
            Price herewith in full.

      [ ]   Net Issue Exercise ____% of the value of the Warrant at the current
            Exercise Price (as defined in the Warrant) of $_______ per Share.

                                        Very truly yours,

                                        _______________________________________

Receipt Acknowledged:

PTC Therapeutics, Inc.

By
  _______________________________
on
  _______________________________

                                       9

                                                                     Exhibit 4.4

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE SECURITIES LAW,
AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 AND AN EXEMPTION
UNDER APPLICABLE STATE LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

                            WARRANT TO PURCHASE STOCK

Corporation:                    PTC Therapeutics, Inc., a Delaware corporation
Number of Shares:               26,000
Class of Stock:                 Common
Initial Exercise Price:         $2.50 per share
Issue Date:                     March 15, 2001
Expiration Date:                March 14, 2008

      THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, SILICON VALLEY BANK ("Holder") is
entitled to purchase the number of fully paid and nonassessable shares of the
class of securities (the "Shares") of the corporation (the "Company") at the
initial exercise price per Share (the "Warrant Price") all as set forth above
and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions
and upon the terms and conditions set forth in this Warrant.

ARTICLE 1. EXERCISE.

            1.1 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also
deliver to the Company a check for the aggregate Warrant Price for the Shares
being purchased.

            1.2 Conversion Right. In lieu of exercising this Warrant as
specified in Section 1.1, Holder may from time to time convert this Warrant, in
whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant Section 1.3.

            1.3 Fair Market Value. If the Shares are traded in a public market,
the fair market value of the Shares shall be the closing price of the Shares (or
the closing price of the Company's stock into which the Shares are convertible)
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company. If the Shares are not



traded in a public market, the Board of Directors of the Company shall determine
fair market value in its reasonable good faith judgment.

            1.4 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.

            1.5 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company shall execute and deliver, in lieu of this Warrant, a new warrant of
like tenor.

            1.6 Assumption on Sale, Merger, or Consolidation of the Company.

                  1.6.1 "Acquisition". For the purpose of this Warrant,
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.

                  1.6.2 Assumption of Warrant. Upon the closing of any
Acquisition, the successor entity shall assume the obligations of this Warrant,
and this Warrant shall be exercisable for the same securities, cash, and
property as would be payable for the Shares issuable upon exercise of the
unexercised portion of this Warrant as if such Shares were outstanding on the
record date for the Acquisition and subsequent closing. The Initial Exercise
Price and/or number of Shares shall be adjusted accordingly.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

            2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities or if the
Company, subdivides the outstanding common stock into a greater amount of common
stock, or, if the Shares are securities other than common stock, subdivides the
Shares in a transaction that increases the amount of common stock into which the
Shares are convertible, then upon exercise of this Warrant, for each Share
acquired, Holder shall receive, without cost to Holder, the total number and
kind of securities to which Holder would have been entitled had Holder owned the
Shares of record as of the date the dividend or subdivision occurred. If the
outstanding shares are combined or consolidated, by reclassification or
otherwise, into a lesser number of shares, the Initial Exercise Price shall be
proportionately increased.

            2.2 Reclassification, Exchange, Combinations or Substitution. Upon
any reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of

                                       2


securities and property that Holder would have received for the Shares if this
Warrant had been exercised immediately before such reclassification, exchange,
substitution, or other event. Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the same
class or series as the Shares to common stock pursuant to the terms of the
Company's Articles of Incorporation upon the closing of a registered public
offering of the Company's common stock. The Company or its successor shall
promptly issue to Holder a new Warrant for such new securities or other
property. The new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
2 including, without limitation, adjustments to the Initial Exercise Price and
to the number of securities or property issuable upon exercise of the new
Warrant. The provisions of this Section 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.

            2.3 Adjustments for Diluting Issuances. The Warrant Price and the
number of Shares issuable upon exercise of this Warrant shall be subject to
adjustment, from time to time in the manner set forth in the Company's
Certificate of Incorporation. The provisions set forth for the Shares in the
Company's Certificate of Incorporation relating to the above in effect as of the
issue Date may not be amended, modified or waived, without the prior written
consent of Holder unless such amendment, modification or waiver affects Holder
in the same manner as they affect all other shareholders of the same series of
shares granted to the Holder.

            2.4 No Impairment. The Company shall not, by amendment of its
Articles of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Article 2 and in taking all such action as may be necessary or appropriate
to protect Holder's rights under this Article against impairment.

            2.5 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder the amount computed by
multiplying the fractional interest by the fair market value of a full Share.

            2.6 Certificate as to Adjustments. Upon each adjustment of the
Warrant Price, the Company shall promptly notify Holder in writing, and, at the
Company's expense, promptly compute such adjustment, and furnish Holder with a
certificate of its Chief Financial Officer setting forth such adjustment and the
facts upon which such adjustment is based. The Company shall, upon written
request, furnish Holder a certificate setting forth the Warrant Price in effect
upon the date thereof and the series of adjustments leading to such Warrant
Price.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

            3.1 Representations and Warranties. The Company represents and
warrants to the Holder as follows:

                                       3


                  (a) The initial Warrant Price referenced on the first page of
this Warrant is not greater than (i) the price per share at which the Shares
were last issued in an arms-length transaction in which at least $500,000 of the
Shares were sold and (ii) the fair market value of the Shares as of the date of
this Warrant.

                  (b) All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any, issuable
upon conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.

                  (c) The Capitalization Table previously provided to Holder
remains true and complete as of the Issue Date.

            3.2 Notice of Certain Events. If the Company proposes at any time
(a) to declare any dividend or distribution upon its common stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of common
stock; (d) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company's
securities for cash, then, in connection with each such event, the Company shall
give Holder (1) at least 10 days prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 10 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of, such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.

            3.3 Registration Under Securities Act of 1933, as amended. If the
Company (i) initiates any public offering of its common stock within one year of
the Issue Date or (ii) amends its Second Amended and Restated Investor Rights
Agreement ("Investor Rights Agreement"), the Company agrees to amend the
Investor Rights Agreement so that the Shares shall be subject to the
registration rights set forth in the Investor Rights Agreement. Once the Shares
are subject to the Investor Rights Agreement, the provisions set forth in the
Investor Right Agreement relating to the above may not be amended, modified or
waived without the prior written consent of Holder unless such amendment,
modification or waiver affects Holder in the same manner as they affect all
other shareholders of the same series of shares granted to the Holder.

                                       4


ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The holder represents and
warrants to the company as follows:

            4.1 Purchase for Own Account. Except for transfers to Holder's
affiliates, this Warrant and the securities to be acquired upon exercise of this
Warrant by the Holder will be acquired for investment for the Holder's account,
not as a nominee or agent, and not with a view to the public resale or
distribution within the meaning of the 1933 Act, and the Holder has no present
intention of selling, granting any participation in, or otherwise distributing
the same. If not an individual, the Holder also represents that the Holder has
not been formed for the specific purpose of acquiring this Warrant or the
Shares.

            4.2 Disclosure of Information. The Holder has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the acquisition of this Warrant
and its underlying securities. The Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the
Holder has access.

            4.3 Investment Experience. The Holder understands that the purchase
of this Warrant and its underlying securities involves substantial risk. The
Holder: (i) has experience as an investor in securities of companies in the
development stage and acknowledges that the Holder is able to fend for itself,
can bear the economic risk of such Holder's investment in this Warrant and its
underlying securities and has such knowledge and experience in financial or
business matters that the Holder is capable of evaluating the merits and risks
of its investment in this Warrant and its underlying securities and/or (ii) has
a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables the Holder to be aware of the character, business acumen and financial
circumstances of such persons.

            4.4 Accredited Investor Status. The Holder is an "accredited
investor" within the meaning of Regulation D promulgated under the 1933 Act.

ARTICLE 5. MISCELLANEOUS.

            5.1 Term. This Warrant is exercisable in whole or in part at any
time and from time to time on or before the Expiration Date.

            5.2 Legends. This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED OR UNDER ANY APPLICABLE STATE LAWS, AND MAY NOT BE
            SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
            REGISTRATION THERE OF

                                       5


            UNDER SUCH ACT AND AN EXEMPTION UNDER APPLICABLE STATE LAW OR
            PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY
            SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
            REGISTRATION IS NOT REQUIRED.

            5.3 Compliance with Securities Laws on Transfer. This Warrant and
the Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holder's notice of
proposed sale.

            5.4 Transfer Procedure. Subject to the provisions of Section 5.3,
Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) at any time to Silicon Valley Bancshares
or The Silicon Valley Bank Foundation, or to any affiliate of Holder, or, to any
other transferee by giving the Company notice of the portion of the Warrant
being transferred with the name, address and taxpayer identification number of
the transferee and surrendering this Warrant to the Company for reissuance to
the transferee(s) (and Holder if applicable). The Company may refuse to transfer
this Warrant to any person who directly competes with the Company, unless the
stock of the Company is publicly traded.

            5.5 Notices. All notices and other communications from the Company
to the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time. All notices to the Holder shall be addressed as follows:

            Silicon Valley Bank
            Attn:  Treasury Department
            3003 Tasman Drive, HG 110
            Santa Clara, CA 95054

            5.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

            5.7 Attorney's Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorney's fees.

                                       6


            5.8 Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of New Jersey, without giving effect to
its principles regarding conflicts of law.

                                PTC THERAPEUTICS, INC.

                                By:    /s/ STUART PELTZ
                                   ---------------------------------------------
                                       Name: STUART PELTZ
                                       Title: Chief Executive Officer

                                "HOLDER"
                                SILICON VALLEY BANK

                                By:    /s/ ASH MILANI
                                   ---------------------------------------------
                                       Name: Ash Milani
                                       Title: Vice President

                                       7


                                   APPENDIX 1

                               NOTICE OF EXERCISE

      1. Holder elects to purchase _________________ shares of the Common/Series
_________________ Preferred [strike one] Stock of PTC Therapeutics, Inc.
pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.

      1. Holder elects to convert the attached Warrant into Shares/cash (strike
one] in the manner specified in the Warrant. This conversion is exercised for
_________________ of the Shares covered by the Warrant.

[Strike paragraph that does not apply.]

      2. Please issue a certificate or certificates representing the shares in
the name specified below:

                       _________________________________
                                  Holders Name

                       _________________________________

                       _________________________________
                                    (Address)

      3. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution except in compliance with applicable securities laws.

                                       HOLDER:

                                       _________________________________________

                                       By:
                                             ___________________________________

                                       Name:
                                             ___________________________________

                                       Title:
                                             ___________________________________

____________________________________
               (Date)

                                       8

                                                                     Exhibit 4.5

THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER
(A) A REGISTRATION WITH RESPECT TO THERETO SHALL BE EFFECTIVE UNDER THE
SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.

                                     For the purchase of up to 507,692 shares of
                                 shares of Series D Convertible Preferred Stock,
                                                       par value $.001 per share

No. W-02                                                         August 17, 2001

      PTC THERAPEUTICS, INC., a Delaware corporation (the "Company"), hereby
certifies that, for good and valuable consideration, Three Crowns Capital
(Bermuda) Ltd. or its permitted assigns (the "Warrant Holder") is entitled,
subject to the terms set forth below, to purchase from the Company at any time
on or before 5:00 p.m., eastern time, on August 17, 2011 (the "Exercise
Period"), up to 507,692 fully-paid and non-assessable shares of Series D
Convertible Preferred Stock, par value $.001 per share, of the Company (the
"Series D Preferred Stock"), or shares of the Common Stock, par value $.001 per
share, of the Company (the "Common Stock") upon a mandatory conversion of the
Series D Preferred Stock as provided in Section 3 hereof (the Series D Preferred
Stock and the Common Stock are hereinafter collectively referred to as
"Shares"), at a price per share (the "Exercise Price") which shall initially be
$3.25 per share and which shall be subject to adjustment as herein provided.

      1. Exercise of Warrants.

      1.1. Exercise. Subject to the terms and conditions of this Warrant, this
Warrant shall become exercisable by the Warrant Holder on August 17, 2001.

      1.2. Procedure to Exercise. This Warrant may be exercised by the Warrant
Holder, in whole or in part, by surrendering this Warrant, with the purchase
form appended hereto as Exhibit A duly executed by such Warrant Holder or by
such Warrant Holder's duly authorized attorney, at the principal office of the
Company, or at such other office or agency as the Company may designate,
accompanied by payment in full by cash, check or wire transfer of the amount
obtained by multiplying the number of Shares in the notice of exercise by the
Exercise Price (the "Purchase Price").

      1.3. Net Issue Exercise. In lieu of exercising this Warrant in the manner
provided above in Section 1.2, the Warrant Holder may elect to receive shares
equal to the value of this Warrant (or the portion thereof being converted) by
surrender of this Warrant, in whole or in



part, at the principal office of the Company together with the notice of
exercise attached hereto as Exhibit A, in which event the Company shall issue to
the Warrant Holder the number of Shares computed using the following formula (a
"Net Issue Exercise"):

                                  X =  Y(A - B)
                                       -------
                                          A

Where:     X =   The number of Shares to be issued to the Warrant Holder.

           Y =   The number of Shares purchasable under this Warrant (at the
                 date of such calculation) that are being converted, in whole
                 or in part, hereunder.

           A =   The Fair Market Value of one Share (at the date of such
                 calculation).

          B =    The Exercise Price (as adjusted to the date of such
                 calculation).

      For purposes of this Section 1.3, if any Shares of the Warrant Holder or
any other shareholder of the Company are registered or publicly traded, then the
Fair Market Value of one Share shall mean the average of the closing bid and
asked prices of the Common Stock quoted in the over the counter market summary
or the closing price quoted by the Nasdaq National Market or any exchange on
which the Common Stock is listed, whichever is applicable, as published in the
Western Edition of The Wall Street Journal for the business day prior to the
date of determination of fair market value. If the Shares are not traded on the
Nasdaq National Market or on an exchange, the Fair Market Value of one Share
shall be determined in good faith by the Company's Board of Directors.

      1.4. Effectiveness. Each exercise or Net Issue Exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the day on which this Warrant shall have been surrendered to the Company as
provided in Sections 1.2 or 1.3 above. At such time, the person or persons in
whose name or names any certificates for the Shares shall be issuable upon such
exercise or Net Issue Exercise as provided in Section 2 below shall be deemed to
have become the holder or holders of record of the Shares represented by such
certificates.

      2. Delivery of Stock Certificates, Etc. As soon as practicable after the
exercise or Net Issue Exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense will cause to be
issued in the name of, and delivered to, the Warrant Holder, or as such Warrant
Holder (upon payment by such Warrant Holder of any applicable transfer taxes)
may direct (i) a certificate or certificates for the number of fully paid and
non-assessable Shares to which the Warrant Holder shall be entitled upon such
exercise or Net Issue Exercise, and (ii) in case such exercise or Net Issue
Exercise is in part only, a new warrant or warrants (dated the date hereof) of
like tenor, calling in the aggregate on the face or faces thereof for the number
of Shares equal (without giving effect to any adjustment therein) to the number
of Shares called for on the face of this Warrant minus the number of Shares
purchased by the Warrant Holder upon such exercise or Net Issuance Exercise as
provided in Sections 1.2 or 1.3 herein.

                                       2


      3. Adjustments Upon Mandatory Conversion of Series D Preferred Stock. Upon
any mandatory conversion of the Series D Preferred Stock pursuant to the
Company's Certificate of Incorporation, as amended or amended and restated from
time to time, this Warrant shall cease to be exercisable for shares of Series D
Preferred Stock and shall become exercisable for that number of shares of Common
Stock into which the shares of Series D Preferred Stock purchasable hereunder
would have been convertible immediately prior to such mandatory conversion, and
such that payment of the Exercise Price, or any multiple thereof, shall entitle
the Warrant Holder to receive the number of shares of Common Stock as would have
been issued upon conversion of each share of Series D Preferred Stock
purchasable hereunder immediately prior to such mandatory conversion.

      4. Stock Splits, Stock Dividends and Combinations. If the Company at any
time subdivides the outstanding shares of Series D Preferred Stock, or issues a
stock dividend on the outstanding shares of Series D Preferred Stock, the
Exercise Price in effect immediately prior to such subdivision or the issuance
of such stock dividend shall be proportionately decreased, and the number of
Shares shall be proportionately increased, and if the Company at any time
combines the outstanding shares of Series D Preferred Stock, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased, and the number of shares shall be proportionately decreased,
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be. Upon any mandatory conversion of
the Series D Preferred Stock as provided in Section 3, each reference to Series
D Preferred Stock in this Section 4 shall be deemed to be Common Stock.

      5. Conversions; Reorganizations; Reclassifications; Merger; Sales. In case
of any capital reorganization or any reclassification of the capital stock of
the Company or in case of the consolidation or merger of the Company with or
into another-corporation or the conveyance of all or substantially all of the
assets of the Company to another corporation, this Warrant shall thereafter be
exercisable for the number of shares of stock or other securities or property to
which a holder of the number of Shares deliverable upon exercise of the Warrant
would have been entitled to upon such conversion, reorganization,
reclassification, consolidation, merger or conveyance and, in any such case,
appropriate adjustment as determined by the Board of Directors of the Company
shall be made in the application of the provisions herein set forth with respect
to the rights and interests thereafter of the Warrant Holder to the end that the
provisions set forth herein (including provisions with respect to changes in and
other adjustments of the Exercise Price and the number of Shares) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the exercise of
the Warrant.

      6. Statement of Adjustment. Whenever the Exercise Price shall be adjusted
as provided herein, the Company shall promptly file with the Secretary of the
Company or at such other place as shall be designated by the Company, a
statement, signed by its chief financial officer, showing in detail the facts
requiring such adjustment, the Exercise Price in effect before and after such
adjustment and the kind and amount of shares of capital stock, securities or
other property thereafter to be received upon the exercise of this Warrant. The
Company shall also cause a copy of such statement to be sent in the manner
specified in Section 16.3 to the Warrant Holder.

                                       3


      7. Notice of Adjustment. In the event the Company shall propose to take
any action of the types described in Sections 4 or 5, the Company shall give
notice to the Warrant Holder in the manner set forth in Section 16.3, which
notice shall specify the record date, if any, with respect to any such action
and the date on which such action is to take place. Such notice shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon the exercise hereof. In
the case of any action which would require the fixing of a record date, such
notice shall be given at least ten (10) days prior to the date so fixed, and in
case of all other actions, such notice shall be given at least twenty (20) days
prior to the taking of such proposed action. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of any such action.

      8. Taxes. The Company shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Company upon the exercise or conversion hereof.

      9. No Fractional Shares. Each adjustment in the number of Shares
purchasable hereunder shall be calculated, to the nearest whole share with
fractional shares disregarded.

      10. Covenants as to Series D Preferred Stock and Common Stock. The Company
covenants and agrees that the shares of Series D Preferred Stock issuable
hereunder, and the Common Stock issuable upon conversion thereof, and the Common
Stock issuable hereunder, as the case may be, will, upon issuance in accordance
with the terms hereof, be validly issued and outstanding, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
and free from all taxes, liens and charges with respect to the issuance thereof
imposed by or through the Company. The Company further covenants and agrees that
the Company will at all times have authorized and reserved, free from preemptive
rights imposed by or through the Company, a sufficient number of shares of
Series D Preferred Stock and Common Stock to provide for the exercise of the
rights represented by this Warrant. The Company further covenants and agrees
that if any shares of capital stock to be reserved for the purpose of the
issuance of shares upon the exercise of this Warrant require registration or
qualification with or approval by the Securities and Exchange Commission or any
state regulatory agency under Federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company will in good faith
and as expeditiously as possible endeavor to secure such registration,
qualification or approval, as the case may be. Holders of Series D Preferred
Stock and Common Stock issuable upon exercise of this Warrant or conversion of
any such shares, as the case may be, shall be entitled to all the rights and
privileges of the Purchase Agreement and the Registration Rights Agreement dated
as of the date hereof between the Company and the Investors (as defined therein)
with respect to such shares.

      11. No Impairment. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, or any other similar voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrant Holder against
impairment due to such event. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of the Warrant above the amount payable therefor on
such exercise, (b) will take all action that may be necessary or

                                       4


appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock, free from all taxes, liens and charges with
respect to the issue thereof, on the exercise of all of the Warrants from time
to time outstanding and (c) will not consolidate with or merge into any other
person or permit any such person to consolidate with or merge into the Company
(if the Company is not the surviving person), unless such other person shall
expressly assume in writing and will be bound by all the terms of this Warrant.

      12. Compliance with Securities Act.

      12.1. Unregistered Securities. The Warrant Holder acknowledges that this
Warrant and the Shares have not been registered under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any successor
legislation (the "Securities Act"), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Shares in
the absence of (i) an effective registration statement under the Securities Act
covering this Warrant or such Shares and registration or qualification of this
Warrant or such Shares under any applicable "blue sky" or state securities law
then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that
such registration and qualification are not required. The Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).

      12.2. Investment Representation. The Warrant Holder represents to the
Company that this Warrant is being acquired for the Warrant Holder's own account
and for the purpose of investment and not with a present view to, or for sale in
connection with, the distribution thereof, nor with any present intention of
distributing or selling the Warrant or Common Stock issuable upon exercise of
the Warrant. The Warrant Holder acknowledges that it has been afforded the
opportunity to meet with the management of the Company and to ask questions of,
and receive answers from, such management and the Company's counsel about the
business and affairs of the Company and concerning the terms and conditions of
the offering of this Warrant, and to obtain any additional information, to the
extent that the Company possessed such information or could acquire it without
unreasonable effort or expense, necessary to verify the accuracy of the
information otherwise obtained by or furnished to the Warrant Holder. The Holder
has received all information which the Warrant Holder considered necessary to
form a decision concerning the purchase of this Warrant, and no valid request to
the Company by the Warrant Holder hereof for information of any kind about the
Company has been refused or denied by the Company or remains unfulfilled as of
the date hereof. The Warrant Holder attests that it may be considered to be a
sophisticated investor, is familiar with the risks inherent in speculative
investments such as in the Company, has such knowledge and experience in
financial business matters that he is capable of evaluating the merits and risk
of the investment in this Warrant and the Shares, and is able to bear the
economic risk of the investment. The Warrant Holder confirms that he is an
"accredited investor" as such term is defined in rule 501(a) of the Securities
Act.

                                       5


      12.3. Investment Letter. Without limiting the generality of Section 12.1,
unless the offer and sale of any shares of Shares shall have been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue the Shares unless and until the Warrant Holder shall have executed an
investment letter in form and substance satisfactory to the Company, including a
warranty at the time of such exercise that the Warrant Holder is acquiring such
shares for its own account, for investment and not with a view to, or for sale
in connection with, the distribution of any such shares.

      12.4. Legend. Certificates delivered to the Warrant Holder pursuant to
Section 2 shall bear the following legend or a legend in substantially similar
form:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY OF THE SECURITIES
            LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
            WITH A VIEW TO DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE
            OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED
            OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
            STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933
            AND ANY OTHER APPLICABLE SECURITIES LAWS, UNLESS THE HOLDER SHALL
            HAVE OBTAINED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
            CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."

      13. Transferability. Without the prior written consent of the Company, the
Warrant shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Warrant or of any rights granted hereunder contrary to
the provisions of this Section 13, or the levy of any attachment or similar
process upon the Warrant or such rights, shall be null and void.

      14. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably in its discretion impose (which shall in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed.

      15. Register of Warrants. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Warrant Holder), a register for the Warrants in which the Company shall record
the name and address of the person in whose name a Warrant has been issued, as
well as the name and address of each transferee and each prior owner of such
Warrant.

                                       6

      16. Miscellaneous.

      16.1. Waivers and Amendments. This Warrant or any provisions hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the Company and by Warrant Holders who hold or have the right to acquire at
least two-thirds of the Shares at such time issued or issuable upon exercise of
the Warrants, provided that no change, addition, omission or waiver shall be
made without the written consent of the Warrant Holder(s) which affects (i) the
number of Shares issuable on exercise of this Warrant, (ii) the Exercise Price
or (iii) any other provision other than in a manner in which all the Warrants
are affected.

      16.2. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without giving
effect to the conflicts of laws principles thereof.

      16.3. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be hand delivered, sent by facsimile or
other electronic medium, or mailed, postage prepaid, or sent by reputable
overnight courier, delivery charges prepaid, addressed as follows or to such
other address as may be furnished in writing to the other parties hereto:

      If to the Warrant Holder:    Three Crowns Capital (Bermuda) Ltd.
                                   Clarendon House
                                   PO Box HM 666
                                   2 Church Street
                                   Hamilton HM KX
                                   Bermuda
                                   441-292-4720 (Fax)
                                   Attention: Peter Svennilson

      With a copy to:              Conyers Dill & Pearman
                                   Clarendon House
                                   2 Church Street
                                   Hamilton HM 11
                                   Bermuda
                                   441-292-4720 (Fax)
                                   Attention: Peter A.S. Pearman

      And:                         Nixon Peabody LLP
                                   101 Federal Street
                                   Boston, MA 02110
                                   617-345-1300
                                   Attention:  Carter S. Boom, Jr.

      If to the Company:           PTC Therapeutics, Inc.
                                   Two Chestnut Street
                                   Grafton, MA 01519
                                   508-856-5920 (Fax)
                                   Attention:  President

                                       7


      With a copy to:        Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
                             One Financial Center
                             Boston, MA 02111
                             617-542-6000
                             617-542-2241 (Fax)
                             Attention:  Jeffrey M. Wiesen, Esq.

      All such notices and communications shall be deemed to have been duly
given (i) five (5) business days after being deposited in the mail, postage
prepaid if mailed, (ii) one (1) business day after being sent by overnight
courier, (iii) when receipt acknowledged if telecopied and (iv) upon receipt if
delivered by hand.

      16.4. Headings. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the terms hereof.

      16.5. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

      16.6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any Shares issued or issuable
upon the exercise of the Warrant in a manner which interferes with the timely
exercise of this Warrant.

      16.7. No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the Warrant Holder to any voting rights or other rights as a stockholder
of the Company prior to the exercise or conversion of the Warrant, provided that
nothing herein shall be construed to limit or impair other rights that the
Warrant Holder may have under this Warrant or otherwise. No provision of this
Warrant, in the absence of affirmative action by the Warrant Holder to purchase
the Shares, and no mere enumeration herein of the rights or privileges of the
Warrant Holder, shall give rise to any liability of such Warrant Holder for the
Exercise Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

                                       8


      IN WITNESS WHEREOF, the undersigned has caused this Warrant to be executed
as an instrument under seal.

                                        PTC THERAPEUTICS, INC.

                                        BY: /S/ STUART W. PELTZ
                                            --------------------------
                                        Name:   Stuart W. Peltz, Ph.D.
                                        Title:  President

AGREED AND ACKNOWLEDGED:

THREE CROWNS CAPITAL (BERMUDA) LTD.

By:  /s/ P. SVENNILSON
     --------------------------------
     Name:  P. Svennilson
     Title:

                                       10


                                    EXHIBIT A

                    NOTICE OF EXERCISE OR NET ISSUE EXERCISE

                                                     Date:
                                                          ______________________

PTC Therapeutics, Inc.
Two Chestnut Street
Grafton, MA 01519
Attention: President

Gentlemen:

      The undersigned hereby elects to exercise or Net Issue Exercise the
enclosed Warrant issued to it by PTC Therapeutics, Inc. (the "Company") and
dated as of ____________, 20__.

      The undersigned elects to:

      [ ]   Exercise the Warrant and to purchase thereunder __ shares of the
            Series D Preferred Stock of the Company (the "Shares") at an
            exercise price of ___ per Share for an aggregate purchase price of
            ___________ Dollars ($___) (the "Purchase Price"). Pursuant to the
            terms of the Warrant, the undersigned has delivered the Purchase
            Price herewith in full.

      [ ]   Net Issue Exercise ____% of the value of the Warrant at the current
            Exercise Price (as defined in the Warrant) of $ ____ per Share.

                                          Very truly yours,

                                          ______________________________________

Receipt Acknowledged:

PTC Therapeutics, Inc.

By:
   ______________________________
on
   ______________________________

                                       10

                                                                     Exhibit 4.6

THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER
(A) A REGISTRATION WITH RESPECT TO THERETO SHALL BE EFFECTIVE UNDER THE
SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.

                                     For the purchase of up to 107,096 shares of
                                 shares of Series D Convertible Preferred Stock,
                                                       par value $.001 per share

No. W-03                                                         August 28, 2001

      PTC THERAPEUTICS, INC., a Delaware corporation (the "Company"), hereby
certifies that, for good and valuable consideration, Three Crowns Capital
(Bermuda) Ltd. or its permitted assigns (the "Warrant Holder") is entitled,
subject to the terms set forth below, to purchase from the Company at any time
on or before 5:00 p.m., eastern time, on August 28, 2011 (the "Exercise
Period"), up to 107,096 fully-paid and non-assessable shares of Series D
Convertible Preferred Stock, par value $.001 per share, of the Company (the
"Series D Preferred Stock"), or shares of the Common Stock, par value $.001 per
share, of the Company (the "Common Stock") upon a mandatory conversion of the
Series D Preferred Stock as provided in Section 3 hereof (the Series D Preferred
Stock and the Common Stock are hereinafter collectively referred to as
"Shares"), at a price per share (the "Exercise Price") which shall initially be
$3.25 per share and which shall be subject to adjustment as herein provided.

      1.    Exercise of Warrants.

      1.1. Exercise. Subject to the terms and conditions of this Warrant, this
Warrant shall become exercisable by the Warrant Holder on August 28, 2001.

      1.2. Procedure to Exercise. This Warrant may be exercised by the Warrant
Holder, in whole or in part, by surrendering this Warrant, with the purchase
form appended hereto as Exhibit A duly executed by such Warrant Holder or by
such Warrant Holder's duly authorized attorney, at the principal office of the
Company, or at such other office or agency as the Company may designate,
accompanied by payment in full by cash, check or wire transfer of the amount
obtained by multiplying the number of Shares in the notice of exercise by the
Exercise Price (the "Purchase Price").

      1.3. Net Issue Exercise. In lieu of exercising this Warrant in the manner
provided above in Section 1.2, the Warrant Holder may elect to receive shares
equal to the value of this Warrant (or the portion thereof being converted) by
surrender of this Warrant, in whole or in part, at the principal office of the
Company together with the notice of exercise attached hereto



as Exhibit A, in which event the Company shall issue to the Warrant Holder the
number of Shares computed using the following formula (a "Net Issue Exercise"):

                                  X = Y (A - B)
                                      ---------
                                          A

Where:      X =         The number of Shares to be issued to the Warrant Holder.

            Y =         The number of Shares purchasable under this Warrant (at
                        the date of such calculation) that are being converted,
                        in whole or in part, hereunder.

            A =         The Fair Market Value of one Share (at the date of such
                        calculation).

            B =         The Exercise Price (as adjusted to the date of such
                        calculation).

      For purposes of this Section 1.3, if any Shares of the Warrant Holder or
any other shareholder of the Company are registered or publicly traded, then the
Fair Market Value of one Share shall mean the average of the closing bid and
asked prices of the Common Stock quoted in the over the counter market summary
or the closing price quoted by the Nasdaq National Market or any exchange on
which the Common Stock is listed, whichever is applicable, as published in the
Western Edition of The Wall Street Journal for the business day prior to the
date of determination of fair market value. If the Shares are not traded on the
Nasdaq National Market or on an exchange, the Fair Market Value of one Share
shall be determined in good faith by the Company's Board of Directors.

      1.4. Effectiveness. Each exercise or Net Issue Exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the day on which this Warrant shall have been surrendered to the Company as
provided in Sections 1.2 or 1.3 above. At such time, the person or persons in
whose name or names any certificates for the Shares shall be issuable upon such
exercise or Net Issue Exercise as provided in Section 2 below shall be deemed to
have become the holder or holders of record of the Shares represented by such
certificates.

      2. Delivery of Stock Certificates, Etc. As soon as practicable after the
exercise or Net Issue Exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense will cause to be
issued in the name of, and delivered to, the Warrant Holder, or as such Warrant
Holder (upon payment by such Warrant Holder of any applicable transfer taxes)
may direct (i) a certificate or certificates for the number of fully paid and
non-assessable Shares to which the Warrant Holder shall be entitled upon such
exercise or Net Issue Exercise, and (ii) in case such exercise or Net Issue
Exercise is in part only, a new warrant or warrants (dated the date hereof) of
like tenor, calling in the aggregate on the face or faces thereof for the number
of Shares equal (without giving effect to any adjustment therein) to the number
of Shares called for on the face of this Warrant minus the number of Shares
purchased by the Warrant Holder upon such exercise or Net Issuance Exercise as
provided in Sections 1.2 or 1.3 herein.

      3. Adjustments Upon Mandatory Conversion of Series D Preferred Stock. Upon
any mandatory conversion of the Series D Preferred Stock pursuant to the
Company's Certificate of

                                       2


Incorporation, as amended or amended and restated from time to time, this
Warrant shall cease to be exercisable for shares of Series D Preferred Stock and
shall become exercisable for that number of shares of Common Stock into which
the shares of Series D Preferred Stock purchasable hereunder would have been
convertible immediately prior to such mandatory conversion, and such that
payment of the Exercise Price, or any multiple thereof, shall entitle the
Warrant Holder to receive the number of shares of Common Stock as would have
been issued upon conversion of each share of Series D Preferred Stock
purchasable hereunder immediately prior to such mandatory conversion.

      4. Stock Splits, Stock Dividends and Combinations. If the Company at any
time subdivides the outstanding shares of Series D Preferred Stock, or issues a
stock dividend on the outstanding shares of Series D Preferred Stock, the
Exercise Price in effect immediately prior to such subdivision or the issuance
of such stock dividend shall be proportionately decreased, and the number of
Shares shall be proportionately increased, and if the Company at any time
combines the outstanding shares of Series D Preferred Stock, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased, and the number of shares shall be proportionately decreased,
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be. Upon any mandatory conversion of
the Series D Preferred Stock as provided in Section 3, each reference to Series
D Preferred Stock in this Section 4 shall be deemed to be Common Stock.

      5. Conversions; Reorganizations; Reclassification; Merger; Sales. In case
of any capital reorganization or any reclassification of the capital stock of
the Company or in case of the consolidation or merger of the Company with or
into another corporation or the conveyance of all or substantially all of the
assets of the Company to another corporation, this Warrant shall thereafter be
exercisable for the number of shares of stock or other securities or property to
which a holder of the number of Shares deliverable upon exercise of the Warrant
would have been entitled to upon such conversion, reorganization,
reclassification, consolidation, merger or conveyance and, in any such case,
appropriate adjustment as determined by the Board of Directors of the Company
shall be made in the application of the provisions herein set forth with respect
to the rights and interests thereafter of the Warrant Holder to the end that the
provisions set forth herein (including provisions with respect to changes in and
other adjustments of the Exercise Price and the number of Shares) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the exercise of
the Warrant.

      6. Statement of Adjustment. Whenever the Exercise Price shall be adjusted
as provided herein, the Company shall promptly file with the Secretary of the
Company or at such other place as shall be designated by the Company, a
statement, signed by its chief financial officer, showing in detail the facts
requiring such adjustment, the Exercise Price in effect before and after such
adjustment and the kind and amount of shares of capital stock, securities or
other property thereafter to be received upon the exercise of this Warrant. The
Company shall also cause a copy of such statement to be sent in the manner
specified in Section 16.3 to the Warrant Holder.

      7. Notice of Adjustment. In the event the Company shall propose to take
any action of the types described in Sections 4 or 5, the Company shall give
notice to the Warrant Holder in

                                       3


the manner set forth in Section 16.3, which notice shall specify the record
date, if any, with respect to any such action and the date on which such action
is to take place. Such notice shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the effect of such action
(to the extent such effect may be known at the date of such notice) on the
Exercise Price and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon the exercise hereof. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
ten (10) days prior to the date so fixed, and in case of all other actions, such
notice shall be given at least twenty (20) days prior to the taking of such
proposed action. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.

      8. Taxes. The Company shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Company upon the exercise or conversion hereof.

      9. No Fractional Shares. Each adjustment in the number of Shares
purchasable hereunder shall be calculated, to the nearest whole share with
fractional shares disregarded.

      10. Covenants as to Series D Preferred Stock and Common Stock. The Company
covenants and agrees that the shares of Series D Preferred Stock issuable
hereunder, and the Common Stock issuable upon conversion thereof, and the Common
Stock issuable hereunder, as the case may be, will, upon issuance in accordance
with the terms hereof, be validly issued and outstanding, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
and free from all taxes, liens and charges with respect to the issuance thereof
imposed by or through the Company. The Company further covenants and agrees that
the Company will at all times have authorized and reserved, free from preemptive
rights imposed by or through the Company, a sufficient number of shares of
Series D Preferred Stock and Common Stock to provide for the exercise of the
rights represented by this Warrant. The Company further covenants and agrees
that if any shares of capital stock to be reserved for the purpose of the
issuance of shares upon the exercise of this Warrant require registration or
qualification with or approval by the Securities and Exchange Commission or any
state regulatory agency under Federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company will in good faith
and as expeditiously as possible endeavor to secure such registration,
qualification or approval, as the case may be. Holders of Series D Preferred
Stock and Common Stock issuable upon exercise of this Warrant or conversion of
any such shares, as the case may be, shall be entitled to all the rights and
privileges of the Purchase Agreement and the Registration Rights Agreement dated
as of the date hereof between the Company and the Investors (as defined therein)
with respect to such shares.

      11. No Impairment. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, or any other similar voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrant Holder against
impairment due to such event. Without limiting the generality of the foregoing,
the Company (a) will not increase the

                                       4


par value of any shares of stock receivable on the exercise of the Warrant above
the amount payable therefor on such exercise, (b) will take all action that may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock, free from all taxes, liens
and charges with respect to the issue thereof, on the exercise of all of the
Warrants from time to time outstanding and (c) will not consolidate with or
merge into any other person or permit any such person to consolidate with or
merge into the Company (if the Company is not the surviving person), unless such
other person shall expressly assume in writing and will be bound by all the
terms of this Warrant.

      12. Compliance with Securities Act.

      12.1. Unregistered Securities. The Warrant Holder acknowledges that this
Warrant and the Shares have not been registered under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any successor
legislation (the "Securities Act"), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Shares in
the absence of (i) an effective registration statement under the Securities Act
covering this Warrant or such Shares and registration or qualification of this
Warrant or such Shares under any applicable "blue sky" or state securities law
then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that
such registration and qualification are not required. The Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).

      12.2. Investment Representation. The Warrant Holder represents to the
Company that this Warrant is being acquired for the Warrant Holder's own account
and for the purpose of investment and not with a present view to, or for sale in
connection with, the distribution thereof, nor with any present intention of
distributing or selling the Warrant or Common Stock issuable upon exercise of
the Warrant. The Warrant Holder acknowledges that it has been afforded the
opportunity to meet with the management of the Company and to ask questions of,
and receive answers from, such management and the Company's counsel about the
business and affairs of the Company and concerning the terms and conditions of
the offering of this Warrant, and to obtain any additional information, to the
extent that the Company possessed such information or could acquire it without
unreasonable effort or expense, necessary to verify the accuracy of the
information otherwise obtained by or furnished to the Warrant Holder. The Holder
has received all information which the Warrant Holder considered necessary to
form a decision concerning the purchase of this Warrant, and no valid request to
the Company by the Warrant Holder hereof for information of any kind about the
Company has been refused or denied by the Company or remains unfulfilled as of
the date hereof. The Warrant Holder attests that it may be considered to be a
sophisticated investor, is familiar with the risks inherent in speculative
investments such as in the Company, has such knowledge and experience in
financial business matters that he is capable of evaluating the merits and risk
of the investment in this Warrant and the Shares, and is able to bear the
economic risk of the investment. The Warrant Holder confirms that he is an
"accredited investor" as such term is defined in rule 501(a) of the Securities
Act.

      12.3. Investment Letter. Without limiting the generality of Section 12.1,
unless the offer and sale of any shares of Shares shall have been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue the Shares unless and until the Warrant

                                       5


Holder shall have executed an investment letter in form and substance
satisfactory to the Company, including a warranty at the time of such exercise
that the Warrant Holder is acquiring such shares for its own account, for
investment and not with a view to, or for sale in connection with, the
distribution of any such shares.

      12.4. Legend. Certificates delivered to the Warrant Holder pursuant to
Section 2 shall bear the following legend or a legend in substantially similar
form:

      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933 OR ANY OF THE SECURITIES LAWS. THESE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
      DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
      DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
      OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE
      SECURITIES ACT OF 1933 AND ANY OTHER APPLICABLE SECURITIES LAWS, UNLESS
      THE HOLDER SHALL HAVE OBTAINED AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."

      13. Transferability. Without the prior written consent of the Company, the
Warrant shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Warrant or of any rights granted hereunder contrary to
the provisions of this Section 13, or the levy of any attachment or similar
process upon the Warrant or such rights, shall be null and void.

      14. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably in its discretion impose (which shall in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed.

      15. Register of Warrants. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Warrant Holder), a register for the Warrants in which the Company shall record
the name and address of the person in whose name a Warrant has been issued, as
well as the name and address of each transferee and each prior owner of such
Warrant.

      16. Miscellaneous.

      16.1. Waivers and Amendments. This Warrant or any provisions hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the Company and by Warrant Holders who hold or have the right to acquire at
least two-thirds of the Shares at such time issued or issuable upon exercise of
the Warrants, provided that no change, addition, omission or waiver shall be
made without the written consent of the Warrant Holder(s)

                                       6


which affects (i) the number of Shares issuable on exercise of this Warrant,
(ii) the Exercise Price or (iii) any other provision other than in a manner in
which all the Warrants are affected.

      16.2. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without giving
effect to the conflicts of laws principles thereof.

      16.3. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be hand delivered, sent by facsimile or
other electronic medium, or mailed, postage prepaid, or sent by reputable
overnight courier, delivery charges prepaid, addressed as follows or to such
other address as may be furnished in writing to the other parties hereto:

If to the Warrant Holder:           Three Crowns Capital (Bermuda) Ltd.
                                    Clarendon House
                                    PO Box HM 666
                                    2 Church Street
                                    Hamilton HM KX
                                    Bermuda
                                    441-292-4720 (Fax)
                                    Attention:  Peter Svennilson

With a copy to:                     Conyers Dill & Pearman
                                    Clarendon House
                                    2 Church Street
                                    Hamilton HM 11
                                    Bermuda
                                    441-292-4720 (Fax)
                                    Attention:  Peter A.S. Pearman

And:                                Nixon Peabody LLP
                                    101 Federal Street
                                    Boston, MA 02110
                                    617-345-1300
                                    Attention:  Carter S. Boom, Jr.

If to the Company:                  PTC Therapeutics, Inc.
                                    Two Chestnut Street
                                    Grafton, MA 01519
                                    508-856-5920 (Fax)
                                    Attention:  President

                                       7


With a copy to:                     Mintz, Levin, Cohn, Ferris, Glovsky and
                                    Popeo, P.C.
                                    One Financial Center
                                    Boston, MA 02111
                                    617-542-6000
                                    617-542-2241 (Fax)
                                    Attention:  Jeffrey M. Wiesen, Esq.

      All such notices and communications shall be deemed to have been duly
given (i) five (5) business days after being deposited in the mail, postage
prepaid if mailed, (ii) one (1) business day after being sent by overnight
courier, (iii) when receipt acknowledged if telecopied and (iv) upon receipt if
delivered by hand.

      16.4. Headings. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the terms hereof.

      16.5. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

      16.6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any Shares issued or issuable
upon the exercise of the Warrant in a manner which interferes with the timely
exercise of this Warrant.

      16.7. No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the Warrant Holder to any voting rights or other rights as a stockholder
of the Company prior to the exercise or conversion of the Warrant, provided that
nothing herein shall be construed to limit or impair other rights that the
Warrant Holder may have under this Warrant or otherwise. No provision of this
Warrant, in the absence of affirmative action by the Warrant Holder to purchase
the Shares, and no mere enumeration herein of the rights or privileges of the
Warrant Holder, shall give rise to any liability of such Warrant Holder for the
Exercise Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

                                       8


      IN WITNESS WHEREOF, the undersigned has caused this Warrant to be executed
as an instrument under seal.

                                   PTC THERAPEUTICS, INC.

                                   By: /s/ Stuart Peltz
                                       ________________________________
                                   Name:    Stuart W. Peltz, Ph.D.
                                   Title:   President

AGREED AND ACKNOWLEDGED:

THREE CROWNS CAPITAL (BERMUDA) LTD.


                                       9


                                    EXHIBIT A

                    NOTICE OF EXERCISE OR NET ISSUE EXERCISE

                                                Date:
                                                      __________________________

PTC Therapeutics, Inc.
100 Corporate Court
Middlesex Business Center
South Plainfield, NJ 07080
Attention:  President

Gentlemen:

      The undersigned hereby elects to exercise or Net Issue Exercise the
enclosed Warrant issued to it by PTC Therapeutics, Inc. (the "Company") and
dated as of _______, 20__.

      The undersigned elects to:

      [ ]   Exercise the Warrant and to purchase thereunder ______ shares of the
            Series D Preferred Stock of the Company (the "Shares") at an
            exercise price of ______ per Share for an aggregate purchase price
            of Dollars ($_______) (the "Purchase Price"). Pursuant to the terms
            of the Warrant, the undersigned has delivered the Purchase Price
            herewith in full.

      [ ]   Net Issue Exercise ____% of the value of the Warrant at the current
            Exercise Price (as defined in the Warrant) of $_______ per Share.

                                                Very truly yours,

                                                ________________________________

Receipt Acknowledged:

PTC Therapeutics, Inc.

By
   ________________________________
on
   ________________________________

                                       10

                                                                     Exhibit 4.7

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED HYPOTHECATED OR
OTHERWISE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS
THEREUNDER, OR THE PROVISIONS OF THIS WARRANT. THIS WARRANT HAS BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE.

No. of Shares of Series D Convertible Preferred             Warrant No. W-GE-01D
Stock: 59,378

                                     WARRANT

               TO PURCHASE SERIES D CONVERTIBLE PREFERRED STOCK OF

                             PTC THERAPEUTICS, INC.

      GENERAL ELECTRIC CAPITAL CORPORATION, or registered assigns, in exchange
for consideration the receipt and sufficiency of which is hereby acknowledged,
is entitled, at any time during the Exercise Period (as hereinafter defined), to
purchase from PTC THERAPEUTICS, INC., a Delaware corporation ("Company"), 59,378
shares of Series D Convertible Preferred Stock (as hereinafter defined and
subject to adjustment as provided herein), in whole or in part, at a purchase
price of THREE and 25/00 Dollars ($3.25) per share (subject to adjustment as
provided in Article IV) (as so adjusted, the "Exercise Price") on the terms and
conditions set forth herein.

I. DEFINITIONS

      The following terms have the meanings set forth below:

      "Additional Shares of Series D Stock" means all shares of Series D Stock
issued by Company after the date of this Warrant other than Warrant Stock.

      "Additional Shares of Stock" has the same meaning ascribed to the term
"Additional Shares of Common Stock" set forth in the Certificate of
Incorporation.

      "Board" means the Board of Directors of Company.

      "Business Day" means any day that is not a Saturday, a Sunday or a day on
which commercial banks in the State of New York are required or permitted by law
or executive order to be closed.

      "Certificate of Incorporation" means the Restated Certificate of
Incorporation of the Company, as may be amended or amended and restated from
time to time.



      "Common Stock" has the same meaning ascribed to the term "Common Stock"
set forth in the Certificate of Incorporation.

      "Company" has the meaning set forth in the recitals.

      "Convertible Security" means any option, warrant or share of preferred
stock of Company or any other security or instrument, including without
limitation any evidence of indebtedness, in any case, which is convertible
directly or indirectly into or exchangeable with or without payment of
additional consideration for Additional Shares of Stock, either immediately or
upon the occurrence of a specified date or a specified event.

      "Current Market Price" means, in respect of a share of Series D Preferred
Stock (or any other security for which this Warrant is then exercisable) on any
date of determination, either (a) if there shall then be a public market for the
trading of Series D Preferred Stock (or any other security for this Warrant is
then exercisable), the average of the daily market prices (determined as
provided below) for ten (10) consecutive trading days commencing 12 trading days
immediately before such date, or (b) if there shall not then be a public trading
market for the Series D Preferred Stock (or any other security for which this
Warrant is then exercisable), the fair market value (determined as provided
below) of a share of the Series D Preferred Stock (or any other security for
which this Warrant is then exercisable) as at such date. For purposes of clause
(a), the "daily market price" for any trading day shall be (i) the closing price
of the principal trading session on such day on the New York Stock Exchange or
other principal national stock exchange or, if none, the last sale price on the
National Market of the NASDAQ on which the Series D Preferred Stock (or any
other security for which this Warrant is then exercisable) is then listed or
admitted to trading, (ii) if no sale takes place on such day on any such
exchange or NASDAQ, the average of the last reported closing bid and ask prices
on such day as officially quoted on any such exchange or NASDAQ, (iii) if the
Series D Preferred Stock (or any other security for which this Warrant is then
exercisable) is not then listed or admitted to trading on any national stock
exchange or National Market of NASDAQ, the average of the last reported closing
bid and ask prices on such day in the over-the-counter market as furnished by
the National Quotation Bureau, Incorporated (or similar organization or agency
succeeding to its functions of reporting security prices), or (iv) if there is
no such firm, as furnished by any member of the NASD or the New York Stock
Exchange selected by the Required Holders and Company or, if they cannot agree
upon such selection, as selected by two such members of the NASD or New York
Stock Exchange, one of which shall be selected by the Required Holders and one
of which shall be selected by Company. For purposes of clause (b), "fair market
value" shall be the price that reflects the value of such shares on a fully
distributed basis (that is, as if such shares were traded on a free and active
market on an exchange or over-the-counter) in a sale by a willing seller under
no compulsion to sell and a willing buyer under no compulsion to buy, without
any premium or discount for any reason, including but not limited to any
discount related to the offering of such shares, any premium for control or any
discount for illiquidity, as agreed upon by Company and the Required Holders;
provided, however, that if Company and the Required Holders cannot agree on such
fair market value, then Company shall engage an investment banking firm of
nationally recognized standing mutually acceptable to and selected

                                      -2-


by Company and the Required Holders within ten (10) days after the date of the
event or notice giving rise to the need to determine fair market value to
determine fair market value in accordance with the preceding provisions. If
Company and the Required Holders cannot agree on a mutually acceptable
investment banking firm within such ten (10) day period, or if a mutually
acceptable investment banking firm is unable or unwilling to perform the
valuation contemplated hereby, Company and the Required Holders shall, within
such ten (10) day period, each choose one investment banking firm of recognized
standing and the respective chosen firms shall, within five (5) days after the
later of such firms is chosen, agree on another investment banking firm which
shall be engaged to make the determination of the fair market value in
accordance with the preceding provisions. The determination by the engaged firm
shall be made as soon as practicable, but not later than thirty (30) days after
the date such firm is engaged. The cost of the investment banking firm or firms
selected shall be borne by Company.

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

      "Exercise Period" has the meaning set forth in Section 2.1.

      "Exercise Price" has the meaning set forth in the first paragraph of this
Warrant.

      "Expiration Date" means the last day of the Exercise Period on which the
Warrant may be exercised.

      "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

      "Holder" means GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, any of its successors, or any of their registered assigns.

      "Investor Rights Agreement" means the Fourth Amended and Restated Investor
Rights Agreement made between the Company and the other signatories thereto,
dated December 17, 2003, as may be amended or amended and restated from time to
time.

      "NASD" means the National Association of Securities Dealers, Inc., or any
successor thereto.

      "NASDAQ" means the automated quotation system of the NASD.

      "Organic Change" means (a) any sale, lease, exchange or other transfer of
all or substantially all of the property, assets or business of Company, (b) any
liquidation, dissolution or winding up of Company, whether voluntary or
involuntary, (c) any merger or consolidation to which Company is a party and
pursuant to which either (i) the holders of the voting

                                      -3-


securities of Company immediately prior thereto own less than a majority of the
outstanding voting securities of the surviving entity immediately following such
transaction or (ii) the holders of the voting securities of Company immediately
prior thereto do not have the ability to elect a majority of the members of the
board of directors (or Persons performing similar functions) of the surviving
entity immediately following such transaction, or (d) any Person or group (as
such term is used in Section 13(d) of the Exchange Act) of Persons, other than
any current shareholder owning 10% of the Common Stock Outstanding as of the
date of issuance of this Warrant, shall either (i) beneficially own (as defined
in Rule 13d-3 under the Exchange Act) securities of Company representing 50% or
more of the voting securities of Company then outstanding or (ii) have the
ability to elect a majority of the members of the board of directors (or Persons
performing similar functions) of the surviving entity. For purposes of the
preceding sentence, "voting securities" shall mean securities, the holders of
which are ordinarily entitled to elect the members of the board of directors (or
Persons performing similar functions).

      "Outstanding" means, (i) when used with reference to Common Stock, on any
date, all issued shares of Common Stock on such date, except shares then owned
or held by or for the account of Company or any Subsidiary thereof (or any
successors or acquiring corporation), including shares of the Common Stock
issuable upon exercise or conversion of any outstanding Rights or Convertible
Securities, and shall include all shares issuable in respect of outstanding
scrip or any certificates representing fractional interests in shares of Common
Stock; and (ii) when used with reference to Series D Preferred Stock, on any
date, all issued shares of Series D Preferred Stock on such date, except shares
then owned or held by or for the account of Company or any Subsidiary thereof
(or any successors or acquiring corporation), including shares of the Series D
Preferred Stock issuable upon exercise or conversion of any outstanding Rights
or Convertible Securities, and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in
shares of Series D Preferred Stock.

      "Permitted Issuances" has the same meaning ascribed to the term "Excluded
Securities" set forth in the Certificate of Incorporation.

      "Qualified Initial Public Offering" has the meaning ascribed to the term
"Initial Public Offering" set forth in the Investor Rights Agreement.

      "Required Holders" means the holders of Warrants exercisable for in excess
of 50% of the aggregate number of Warrant Stock then purchasable upon exercise
of all Warrants.

      "Rights" means any warrants, options or other rights to purchase Series D
Preferred Stock.

      "SEC" means the U.S. Securities and Exchange Commission, or any successor
thereto.

      "Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder.

      "Series D Preferred Stock" has the meaning ascribed to the term "Series D
Preferred Stock" set forth in the Certificate of Incorporation.

                                     - 4 -



      "Stock" means any shares of capital stock of the Company.

      "Subsidiary" has the meaning ascribed to the term "Subsidiary" set forth
in the Investor Rights Agreement.

      "Transfer" means any disposition of any Warrant or Warrant Stock or of any
interest in either thereof, which would constitute a sale thereof within the
meaning of the Securities Act.

      "Warrant" means this Warrant and all warrants issued upon transfer,
division or combination of, or in substitution for, this Warrant. All Warrants
shall at all times be identical as to terms and conditions and date, except as
to the number of shares of Series D Preferred Stock for which they may be
exercised.

      "Warrant Price" means an amount equal to (i) the number of shares of
Series D Preferred Stock being purchased upon exercise of this Warrant pursuant
to Section 2.1, multiplied by (i) the Exercise Price as of the date of such
exercise.

      "Warrant Stock" means the shares of Series D Preferred Stock issued or
issuable upon the exercise of this Warrant.

II. EXERCISE OF WARRANT

      2.1. Exercise Period. From and after the date hereof and until 5:00 P.M.,
New York time, on APRIL 30, 2009 (the "Expiration Date"), subject to extension
pursuant to Section 2.2(e) (the "Exercise Period"), Holder may exercise this
Warrant, on any Business Day, for all or any part of the Warrant Stock.

      2.2. Exercise Notice; Delivery of Certificates.

      (a) In order to exercise this Warrant, Holder shall deliver (which such
delivery may, at Holder's option, be by facsimile) to Company at its principal
office designated by Company in Section 14.2, a duly executed written notice of
Holder's election to exercise this Warrant, specifying the number of shares of
Warrant Stock to be purchased, in substantially the form attached hereto as
Exhibit A (the "Subscription Notice").

      (b) Upon receipt of a Subscription Notice, Company shall, as promptly as
practicable, and in any event within five (5) Business Days, subject to receipt
of any necessary regulatory approvals (including expiration of any applicable
waiting period), thereafter, deliver to Holder a duly executed certificate or
certificates representing the aggregate number of full shares of Warrant Stock
issuable upon such exercise, together with cash in lieu of any fraction of a
share, as hereinafter provided. Such stock certificate or certificates shall be
in such denominations and registered in the name designated in the Subscription
Notice, subject to Article IX.

                                     - 5 -



      (c) In addition, as soon as practicable after the delivery of a
Subscription Notice, but subject to the receipt of any necessary regulatory
approvals (including expiration of any applicable waiting period), Holder shall
deliver in person, by certified mail or courier, to Company at the
aforementioned address, (i) if Holder has elected pursuant to the applicable
Subscription Notice to make payment of the Warrant Price pursuant to Section
2.3(a), such payment and (ii) this Warrant.

      (d) Upon the date required for issuance of the applicable shares of
Warrant Stock pursuant to Section 2.2(b) and receipt of any payment required
pursuant to Section 2.2(c), Holder or any other Person so designated in the
applicable Subscription Notice shall be deemed to have become a holder of record
of the applicable Warrant Stock for all purposes. If this Warrant shall have
been exercised in part, Company shall deliver to Holder a new Warrant evidencing
the rights of Holder to purchase the remaining shares of Warrant Stock issuable
upon exercise of this Warrant, which new Warrant shall in all other respects be
identical with this Warrant, or appropriate notation may be made on this Warrant
and the same returned to Holder.

      (e) If in connection with the exercise of a Warrant or acquisition of
Warrant Stock by Holder, any regulatory approval shall be required, including
expiration of any applicable waiting period, then, if the Warrant is exercised
prior to such approval, the Expiration Date shall be extended while any such
regulatory approval or waiting period is pending. Without limiting the
foregoing, Company hereby acknowledges that the exercise of this Warrant by
Holder may subject Company and/or Holder to the filing requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). If on or before the expiration Date, Holder has sent the Subscription
Notice to Company and Holder has not been able to complete the exercise of this
Warrant prior to the Expiration Date because of restrictions under the HSR Act,
Holder shall be entitled to complete the process of exercising this Warrant in
accordance with the procedures contained herein notwithstanding the fact that
completion of the exercise of this Warrant would take place after the Expiration
Date.

      2.3. Payment of Warrant Price: Net Issue Exercise

      (a) Payment of the Warrant Price shall be made at the option of Holder by
(i) cash, by check or by wire transfer or (ii) cancellation by Holder of
indebtedness of Company to Holder; or (iii) any combination thereof.

      (b) In lieu of the payment methods set forth in Section 2.3(a) above,
Holder may elect to exchange all or part of the Warrant for shares of Warrant
Stock equal to the value of the amount of the Warrant being exchanged on the
date of exchange. All references in this Warrant to an "exercise" of the Warrant
shall include a net issue exercise pursuant to this Section 2.3(b). If Holder
elects to exchange all or part of the Warrant as provided in this Section
2.3(b), Holder shall tender to Company the Warrant for the amount being
exchanged, along with a Subscription Notice indicating Holder's election to
exchange all or part of the Warrant, and Company shall issue to Holder the
number of shares of Warrant Stock computed using the following formula:

                                     - 6 -



      X = Y(A-B)
          ------
            A

      Where

      X = number of shares of Warrant Stock to be issued to Holder upon
exercise;

      Y= total number of shares of Warrant Stock purchasable under the Warrant
(or, if only a portion, the amount of Warrant Stock for which the Warrant is
being exchanged);

      A = Current Market Price of one share of Warrant Stock; and

      B = Exercise Price (as adjusted to the date of such calculation).

      2.4. Payment of Taxes. Company shall pay all expenses, taxes and other
governmental charges with respect to the issue or delivery of the Warrant Stock.
Company shall not be required, however, to pay any transfer tax imposed in
connection with the issue of any certificate for shares of Warrant Stock in any
name other than that of Holder.

      2.5. Fractional Shares. Company shall not be required to issue a
fractional share of Warrant Stock upon exercise of any Warrant. As to any
fraction of a share which Holder of one or more Warrants would otherwise be
entitled to purchase upon such exercise, Company shall pay a cash adjustment in
respect of such fractional share in an amount equal to the same fraction of the
Current Market Price per share of Warrant Stock on the date of exercise.

III. TRANSFER, DIVISION AND COMBINATION

      3.1. Transfer. Subject to compliance with Article IX of this Warrant,
Company shall register any Transfer of this Warrant and all rights hereunder, in
whole or in part, on the books of Company to be maintained for such purpose,
upon surrender by Holder of this Warrant at the principal office of Company
referred to in Section 14.2, together with a duly executed written assignment of
this Warrant substantially in the form of Exhibit B hereto and funds sufficient
to pay any transfer taxes payable upon the making of such Transfer. Promptly
following such surrender and, if required, such payment, Company shall at its
expense, subject to Article IX, execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned in compliance with
Article IX, may be exercised by a new Holder for the purchase of shares of
Series D Preferred Stock without having a new Warrant issued.

      3.2. Division and Combination. Subject to Article IX, this Warrant may be
divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of Company, together with a duly executed written
notice specifying the names and denominations in which new Warrants are to be
issued. Subject to compliance with Section 3.1

                                     - 7 -



and with Article IX as to any Transfer which may be involved in such division or
combination, Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

      3.3. Maintenance of Books. Company agrees to maintain, at its office
referred to in Section 14.2, books for the registration of Transfer of the
Warrants.

IV. ADJUSTMENTS

      The number of shares of Warrant Stock for which this Warrant is
exercisable, and the Exercise Price at which such shares may be purchased upon
exercise of this Warrant, shall be subject to adjustment from time to time as
set forth in this Article IV.

      4.1. Adjustments Upon Mandatory Conversion of Series D Preferred Stock.
Upon any mandatory conversion of the Series D Preferred Stock pursuant to the
Company's Certificate of Incorporation, this Warrant shall cease to be
exercisable for shares of Series D Preferred Stock and shall become exercisable
for that number of shares of Common Stock into which the shares of Series D
Preferred Stock purchasable hereunder would have been convertible immediately
prior to such mandatory conversion, and such that payment of the Exercise Price,
or any multiple thereof, shall entitle the Warrant Holder to receive the number
of shares of Common Stock as would have been issued upon conversion of each
share of Series D Preferred Stock purchasable hereunder immediately prior to
such mandatory conversion.

      4.2. Stock Dividends, Stock Splits, Subdivisions and Combinations. If at
any time Company shall:

      (a) take a record of the holders of Series D Preferred Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Series D Preferred Stock,

      (b) subdivide or split its Outstanding shares of Series D Preferred Stock
into a larger number of shares of Series D Preferred Stock, or

      (c) combine or reclassify its Outstanding shares of Series D Preferred
Stock into a smaller number of shares of Series D Preferred Stock;

then, in each of cases (a), (b) and (c) above, (i) the number of shares of
Warrant Stock for which this Warrant is exercisable immediately after the
occurrence of any such event shall be adjusted to equal the number of shares of
Warrant Stock which a record holder of the same number of shares of Warrant
Stock for which this Warrant is exercisable immediately prior to the occurrence
of such event or the record date therefor, whichever is earlier, would own or be
entitled to receive after the happening of such event, and (ii) the Exercise
Price shall be adjusted to equal (A) the Exercise Price multiplied by the number
of shares of Warrant Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Warrant Stock for
which this Warrant is exercisable immediately after such adjustment.

                                     - 8 -



Upon any mandatory conversion of the Series D Preferred Stock as provided in
Section 4.1, each reference to Series D Preferred Stock in this Section 4.2
shall be deemed to be Common Stock.

      4.3. Certain Other Distributions and Adjustments. If at any time Company
shall take a record of the holders of its Series D Preferred Stock for the
purpose of entitling them to receive a dividend or other distribution, or shall
in any manner declare, order, pay or make a dividend or other distribution
(including, without limitation, any distribution of stock or other securities,
debt or property or rights or warrants to subscribe for securities of Company or
any of its Subsidiaries by way of dividend or spin-off or any other assets) on
its Series D Preferred Stock, other than dividends or distributions of shares of
Series D Preferred Stock which are referred to in Section 4.2, then and in each
such case, (a) the number of shares of Warrant Stock for which this Warrant is
exercisable shall be adjusted to equal the number of shares of Series D
Preferred Stock which a record holder of the same number of shares of Warrant
Stock for which this Warrant is exercisable immediately prior to the occurrence
of such event would own or be entitled to receive after the happening of such
event, and (b) the Exercise Price to be in effect after such record date shall
be determined by multiplying (1) the Exercise Price in effect immediately prior
to such record date by (2) a fraction, the numerator of which shall be the
Exercise Price in effect immediately prior to such record date less the fair
market value (as determined in good faith by the Company's Board) of such
dividend or distribution per share of Series D Preferred Stock and the
denominator of which shall be such the Exercise Price in effect immediately
prior to such record date.

      4.4. Antidilution. It is understood and agreed that in the event of an
antidilution adjustment affecting any Warrant Shares after the date hereof, the
Holder will be entitled to the benefits of such adjustment upon exercise of this
Warrant.

      4.5. Organic Change. In case of any Organic Change, Holder shall have the
right thereafter to receive, upon exercise of the Warrant, in lieu of the
Warrant Stock issuable upon such exercise prior to consummation of such Organic
Change, the kind and amount of shares of stock, other securities, cash and
property receivable (including cash, and including any right to select the
consideration so receivable) upon the consummation of such Organic Change by a
holder of that number of shares of Warrant Stock into which the Warrant was
exercisable immediately prior to such Organic Change (including, on a pro rata
basis, the cash, securities or property received by holders of Series D
Preferred Stock in any tender or exchange offer that is a step in such Organic
Change), assuming such holder of Series D Preferred Stock is not a Person with
which Company consolidated or into which Company merged or which merged into
Company or to which such sale or transfer was made, as the case may be, or an
affiliate of such a Person. In case securities or property other than Series D
Preferred Stock shall be issuable or deliverable upon conversion as aforesaid,
then all references in this Article IV shall be deemed to apply, so far as
appropriate and nearly as may be, to such other securities or property. In case
of any Organic Change, the successor or acquiring corporation (if other than
Company) shall expressly assume the due and punctual observance and performance
of each covenant and condition of this Warrant to be performed and observed by
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined

                                     - 9 -



by resolution of the Board) in order to provide for adjustments of shares of
Warrant Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Article IV.
The foregoing provisions of this Section 4.5 shall similarly apply to successive
Organic Changes.

      4.6. Qualified Initial Public Offering. Upon the completion of any
Qualified Initial Public Offering, the provisions of this Section IV shall be
extinguished and of no further force or effect.

V. NOTICES TO WARRANT HOLDERS

      5.1. Notice of Adjustments. Whenever an adjustment to this Warrant is made
pursuant to Article IV, Company shall promptly deliver to Holder (by facsimile
and by either first class mail, postage prepaid or overnight delivery) a
certificate from the Company setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was calculated,
specifying the number of shares of Warrant Stock for which this Warrant is
exercisable and (if such adjustment was made pursuant to Section 4.5) describing
the number and kind of any other shares of stock or other securities or property
for which this Warrant is exercisable, and any change in Exercise Price, after
giving effect to such adjustment or change. Company shall keep in the office or
agency designated pursuant to Section 14.2 copies of all such certificates and
cause the same to be available for inspection at said office during normal
business hours by any Holder or any prospective purchaser of a Warrant
designated by a Holder thereof. Any adjustment to this Warrant pursuant to
Article IV shall be automatic and shall occur without any action on the part of
Company or Holder, and any failure by Company to comply with the terms of this
Section 5.1 (including any error made by Company in the calculations described
above) shall have no effect on such automatic adjustment. Notwithstanding any
other provision of this Section 5.1, Holder shall retain the right to contest
the adjustment calculations provided by Company described above, and such
calculations shall not be entitled to any presumption of accuracy in any case,
action or other proceeding to determine the actual amount of adjustment required
by Article IV.

      5.2. Notice of Corporate Action. If at any time

      (a) Company shall take a record of the holders of its Series D Preferred
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right; or

      (b) there shall be approved by the Board any capital reorganization of
Company, any reclassification or recapitalization of the capital stock of
Company or any consolidation or merger of Company with, or any sale, transfer or
other disposition of all or substantially all the property, assets or business
of Company to, another corporation, including without limitation any such event
constituting an Organic Change; or

                                     - 10 -



      (c) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of Company;

then, in any one or more of such cases, Company shall give to Holder (i) at
least twenty (20) days' prior written notice of the date on which a record date
shall be selected in respect of such event and (ii) in the case of any such
event, at least sixty (60) days' prior written notice of the date when the same
shall take place; provided that in the case of an Organic Change to which
Section 4.5 applies, Company shall give at least thirty (30) days' written
notice as aforesaid. Such notice shall also specify (i) the date on which the
holders of Series D Preferred Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof and (ii) the date on
which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Series
D Preferred Stock shall be entitled to exchange their shares of Series D
Preferred Stock for securities or other property deliverable upon such event.

VI. NO IMPAIRMENT

      Company shall not by any action, including, without limitation, amending
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issuance or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder against
impairment. Without limiting the generality of the foregoing, Company will take
all such action as may be necessary or appropriate in order that Company may
upon the exercise of this Warrant validly and legally issue fully paid and
nonassessable shares of Series D Preferred Stock that are not subject to
preemptive rights, including taking such action as is necessary for the Exercise
Price to be not less than the par value of the shares of Series D Preferred
Stock issuable upon exercise of this Warrant. Company will obtain all such
authorizations, exemptions or consents from any Governmental Authority having
jurisdiction thereof, or any other Person, as may be necessary to enable Company
to perform its obligations under this Warrant. Without limiting the foregoing,
Company will make any filings under the HSR Act required in order to perform its
obligations under this Warrant.

VII. RESERVATION AND AUTHORIZATION OF SERIES D PREFERRED STOCK AND COMMON STOCK

      From and after the date of this Warrant, Company shall at all times
reserve and keep available for issue upon the exercise of this Warrant such
number of its authorized but unissued shares of Series D Preferred Stock and the
Common Stock issuable upon the conversion thereof, and the Common Stock issuable
hereunder, as the case may be, as will be sufficient to permit the exercise in
full of this Warrant. All shares of Warrant Stock which shall be so issuable,
when issued upon exercise of this Warrant and payment therefor in accordance
with the

                                     - 11 -



terms of this Warrant, shall be duly and validly issued and fully paid and
nonassessable, and not subject to preemptive rights.

VIII. TAKING OF RECORD; STOCK AND WARRANT TRANSFER OF BOOKS

      In the case of all dividends or other distributions by Company to the
holders of its Series D Preferred Stock with respect to which any provision of
Article IV refers to the taking of a record of such holders, Company will take
such record as of the close of business on a Business Day. Company will not at
any time, except upon dissolution, liquidation or winding up of Company, close
its stock transfer books or Warrant transfer books so as to prevent or delay the
exercise or transfer of this Warrant.

IX. RESTRICTIONS ON TRANSFERABILITY

      The Warrant and the Warrant Stock shall not be transferred, hypothecated
or assigned before satisfaction of the conditions specified in this Article IX.
Holder, by acceptance of this Warrant, agrees to be bound by the provisions of
this Article IX.

      9.1. Restrictive Legends.

      (a) Except as otherwise provided in this Article IX, each certificate for
Warrant Stock initially issued upon the exercise of this Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form:

      "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED HYPOTHECATED OR OTHERWISE TRANSFERRED IN VIOLATION OF SUCH
      ACT OR THE RULES AND REGULATIONS THEREUNDER."

      (b) Except as otherwise provided in this Article IX, each Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form:

      "THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED HYPOTHECATED OR
      OTHERWISE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS
      THEREUNDER OR THE PROVISIONS OF THIS WARRANT."

      9.2. Notice of Proposed Transfers. Prior to or promptly following any
Transfer of any Warrants or any shares of restricted Warrant Stock, the holder
of such Warrants or restricted Warrant Stock shall give written notice to
Company of such Transfer. Each certificate,

                                     - 12 -



if any, evidencing such shares of restricted Warrant Stock issued upon such
Transfer shall bear the restrictive legend set forth in Section 9.1(a), and each
Warrant issued upon such Transfer shall bear the restrictive legend set forth in
Section 9.1(b), unless such restrictive legend is not required pursuant to
Section 9.3.

      9.3. Termination of Restrictions. The restrictions and requirements
imposed by this Article IX shall terminate as to any particular Warrant or share
of Warrant Stock (a) when and so long as such security shall have been
effectively registered under the Securities Act, (b) when Company shall have
received an opinion of counsel (which may be Holder's inside corporate counsel)
that such security may be transferred without registration thereof under the
Securities Act or (c) a sale of such security is made pursuant to SEC Rule 144.
Whenever the restrictions imposed by Article IX shall terminate as to this
Warrant, as hereinabove provided, Holder shall be entitled to receive from
Company, at the expense of Company, a new Warrant without the restrictive legend
set forth in Section 9.1(b). Whenever the restrictions imposed by this Article
IX shall terminate as to any share of Warrant Stock, as hereinabove provided,
the holder thereof shall be entitled to receive from Company, at the expense of
Company, a new certificate representing such Series D Preferred Stock not
bearing the restrictive legend set forth in Section 9.1(a).

X. SUPPLYING INFORMATION

      Company shall cooperate with each Holder of a Warrant and each holder of
Warrant Stock in supplying such information as may be reasonably requested with
respect to the Company and its businesses and operations (including reasonable
access to management and operational personnel): (i) in connection with such
Holder evaluating if, and to what extent, it shall exercise the Warrant, and
(ii) in order for such Holder to complete and file any information reporting
forms presently or hereafter required by the SEC or any other governmental
entity as a condition to the availability of an exemption from the registration
requirements of the Securities Act for the sale of any Warrant or share of
Warrant Stock. Company shall also supply such information as may be reasonably
necessary for such Holder to comply with tax and other applicable laws and
applicable financial reporting and accounting rules standards.

XI. LOSS OR MUTILATION

      Upon receipt by Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it being
understood that the written agreement of Holder shall be sufficient indemnity),
and in case of mutilation upon surrender and cancellation hereof, Company will
execute and deliver in lieu hereof a new Warrant of like tenor to such Holder;
provided, in the case of mutilation, no indemnity shall be required if this
Warrant in identifiable form is surrendered to Company for cancellation.

                                     - 13 -



XII. NO STOCKHOLDER RIGHTS; LIMITATION OF LIABILITY

      No provision hereof shall be deemed to impose any rights or obligations
upon Holder as a stockholder in Company prior to Holder's exercise of this
Warrant and the issuance to Holder of Warrant Shares. Without limiting the
foregoing, no provision hereof and no enumeration herein of the rights or
privileges of Holder hereof, shall give rise to any liability of such Holder for
the purchase price of any Warrant Stock or as a stockholder of Company, whether
such liability is asserted by Company, by creditors of Company or by any third
party.

XIII. REPRESENTATIONS AND WARRANTIES OF COMPANY

      Company hereby represents and warrants to Holder that the statements in
the following paragraphs of this Article XIII are true and correct (a) as of the
date hereof and (b) except where any such representation and warranty relates
specifically to an earlier date, as of the date of any exercise of this Warrant.

      13.1. Corporate Organization and Authority. Company (a) is a corporation
duly organized, validly existing, and in good standing in its jurisdiction of
incorporation, (b) has the corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted; and (c) is qualified as a foreign corporation in all jurisdictions
where such qualification is required.

      13.2. Corporate Power. Company has all requisite legal and corporate power
and authority to execute, issue and deliver the Warrant, to issue the Series D
Preferred Stock issuable upon exercise or conversion of the Warrant, to issue
the Common Stock issuable upon the conversion of the Series D Preferred Stock,
and to carry out and perform its obligations under the Warrant and any related
agreements.

      13.3. Authorization; Enforceability. All corporate action on the part of
Company, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of its obligations under this
Warrant and for the authorization, issuance and delivery of the Warrant and the
Warrant Stock issuable upon exercise of the Warrant has been taken and this
Warrant constitutes the legally binding and valid obligation of Company
enforceable in accordance with its terms.

      13.4. Valid Issuance of Warrant and Warrant Stock. The Warrant has been
validly issued and is free of restrictions on transfer other than restrictions
on transfer set forth herein, in the Investor Rights Agreement and under
applicable state and federal securities laws. The Warrant Stock issuable upon
conversion of this Warrant, when issued, sold and delivered in accordance with
the terms of this Warrant for the consideration expressed herein, will be duly
and validly issued, fully paid and nonassessable, and will be free of
restrictions on transfer other than restrictions on transfer under this Warrant,
in the Investor Rights Agreement and under applicable state and federal
securities laws. Subject to applicable restrictions on transfer, the issuance
and delivery of the Warrant and the Warrant Stock issuable upon conversion of
the Warrant are not subject to any preemptive or other similar rights or any
liens or encumbrances

                                     - 14 -



except as specifically set forth in the Certificate of Incorporation, the
Investor Rights Agreement or this Warrant. The offer, sale and issuance of the
Warrant and Warrant Stock, as contemplated by this Warrant, are exempt, from the
prospectus and registration requirements of applicable United States federal and
state security laws, and neither Company nor any authorized agent acting on its
behalf has or will take any action hereafter that would cause the loss of such
exemption.

      13.5. No Conflict with Other Instruments. The execution, delivery, and
performance of this Warrant will not result in any violation of, be in conflict
with, or constitute a default under, with or without the passage of time or the
giving of notice (a) any provision of the Certificate of Incorporation or
by-laws; (b) any provision of any judgment, decree, or order to which Company is
a party or by which it is bound or an event which results in the creation of any
material lien, charge or encumbrance upon any material assets of Company; (c)
any contract, obligation, or commitment to which Company is a party or by which
it is bound; or (d) any statute, rule, or governmental regulation applicable to
Company.

      13.6. Capitalization. As of recent date, the authorized capital stock of
Company consists of 546,992,837,337 shares of Common Stock, $0.001 par value, of
which 2,135,312 were issued and outstanding, and 149,275,350 shares of Preferred
Stock, $0.001 par value, of which 145,773,877 were issued and outstanding. The
outstanding shares have been duly authorized and validly issued (including,
without limitation, issued in compliance with applicable federal and state
securities laws), are fully paid and nonassessable. Company has reserved
455,655,829,025 shares of Common Stock for issuance upon conversion of the
Preferred Stock. Company has delivered to Holder a capitalization table showing
all outstanding warrants, options, conversion privileges, preemptive rights or
other rights or agreements to purchase or otherwise acquire or issue any equity
securities or Convertible Securities of Company. Except as set forth on such
capitalization table, the Company has not authorized the issuance of any of the
aforesaid rights to acquire securities of Company as of the date hereof.

      13.7. Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of Company is
required in connection with the offer, sale or issuance of the Warrant (and the
Warrant Stock issuable upon conversion of the Shares), or the consummation of
any other transaction contemplated hereby, except for the following: (a) the
filing of a notice on Form D under the Securities Act and (b) the compliance
with other applicable state securities laws, which compliance will have occurred
within the appropriate time periods therefor. The offer, sale and issuance of
the Warrant and the shares of Warrant Stock in conformity with the terms of this
Warrant are exempt from the registration requirements of the Securities Act and
any applicable state laws.

      13.8. Registration Rights. Attached hereto as Annex I is the current
version of the Investor Rights Agreement which lists all rights (including
piggyback registration rights) to have any transaction or proposed transaction
involving securities of Company registered with the SEC or any other
governmental authority as of the date of issuance of this Warrant.

                                     - 15 -



XIV. MISCELLANEOUS

      14.1. Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice Holder's rights, powers or remedies. If
Company fails to make, when due, any payments provided for under this Warrant,
or fails to comply with any other provision of this Warrant, Company shall pay
to Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys' fees, including those of
appellate proceedings, incurred by Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

      14.2. Notices. All notices and communications to be given or made under
this Warrant shall be in writing and delivered by hand-delivery, registered
first class mail (return receipt requested), facsimile, or air courier
guaranteeing overnight delivery, addressed as follows, or to such other Person
or address as the party named below may designate by notice:

      (a) If to any Holder or holder of Warrant Stock, at its last known address
appearing on the books of Company maintained for such purpose and any other
address sent by such Holder to Company in compliance with this Section 14.2.

      (b) If to Company at

          PTC THERAPEUTICS, INC.
          100 CORPORATE CT.
          MIDDLESEX BUSINESS CENTER
          SOUTH PLAINFIELD, NJ 07080
          ATTN:  MARK E. BOULDING

Each such notice or other communication shall be deemed to have been duly given
or served on the date on which personally delivered, with receipt acknowledged,
or confirmed by telecopy answerback with respect to notice by telecopy, or three
Business Days after the same shall have been deposited in the United States
mail.

      14.3. Successors and Assigns. Subject to the provisions of Section 3.1 and
Article IX, this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of Company and the successors and
assigns of Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder. No other Person shall have any right, benefit or
obligation under this Warrant.

      14.4. Amendment. No amendment or waiver of any provision of this Warrant
or any other Warrant shall be effective without the written consent of Company
and all Holders,

      14.5. Severability. If one or more provisions of this Warrant are held to
be unenforceable to any extent under applicable law, such provision shall be
interpreted as if it were

                                     - 16 -



written so as to be enforceable to the maximum extent permitted by law so as to
effectuate the parties' intent to the maximum extent, and the balance of this
Warrant shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms to the maximum extent permitted by law.

      14.6. Section and Other Headings. The section and headings contained in
this Warrant are for the convenience only and shall not affect the meaning or
interpretation of this Warrant.

      14.7. Governing Law. This Warrant shall be governed by, construed and
enforced in accordance with the laws of the State of New York, without regard to
the conflict of law principles of such state.

      14.8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS WARRANT OR THE WARRANT SHARES.

      14.9. CHOICE OF FORUM. EACH OF THE PARTIES HERETO IRREVOCABLE SUBMITS TO
THE EXCLUSIVE JURISDICTION OF (A) THE SUPREME COURT OF THE STATE OF NEW YORK,
NEW YORK COUNTY, AND (B) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING
ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY (AND EACH
AGREES THAT NO SUCH ACTION, SUIT OR PROCEEDING RELATING TO THIS WARRANT SHALL BE
BROUGHT BY IT IN SUCH COURTS). EACH OF THE PARTIES HERETO IRREVOCABLE AND
UNCONDITIONALLY WAIVE (AND AGREES NOT TO PLEAD OR CLAIM), ANY OBJECTION TO THE
LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS WARRANT OR
THE WARRANT SHARES IN (A) THE SUPREME COURT OF THE STATE OF NEW YORK, NEW YORK
COUNTY, AND (B) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK OR THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

      14.10. Remedies. Each Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate. In any action or proceeding brought to enforce any provision
of this Warrant or where any provision hereof is validly asserted as a defense,
the successful party shall be entitled to recover reasonable attorneys' fees in
addition to any other available remedy.

      14.11. Counterparts. For the convenience of the parties, any number of
counterparts of this Warrant may be executed by the parties hereto and each such
executed counterpart shall be, and shall be deemed to be, an original
instrument.

                         [SIGNATURES BEGIN ON NEXT PAGE]

                                     - 17 -



      IN WITNESS WHEREOF, Company has caused this Warrant to be duly executed by
an authorized officer.

Dated:

                             PTC THERAPEUTICS, INC.

                             By: /s/ Mark E. Boulding
                                ______________________________
                                Name: Mark E. Boulding
                                Title: SVP, Business Development and Legal

ACKNOWLEDGED AND ACCEPTED BY:

GENERAL ELECTRIC CAPITAL CORPORATION

By: DIANE EARLE
    _____________________
    Name:  Diane Earle
    Title: Senior Vice President

                                     - 18 -



                                                                     Exhibit 4.7

                                    EXHIBIT A

                               SUBSCRIPTION NOTICE

                 [To be executed only upon exercise of Warrant]

      The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of ________ Shares of Series D Preferred Stock of
PTC THERAPEUTICS, INC. and herewith makes payment therefor, all at the price and
on the terms and conditions specified in this Warrant (including without
limitation the conditions set forth in Section 2.1 hereof relating to required
regulatory approvals) and requests that certificates for the shares of Warrant
Stock hereby purchased (and any securities or other property issuable upon such
exercise, including any cash in lieu of fractional shares) be issued in the name
of and delivered to ______________ whose address is __________________ and, if
such shares of Warrant Stock shall not include all of the shares of Warrant
Stock issuable as provided in this Warrant, that a new Warrant of like tenor and
date for the balance of the shares of Warrant Stock issuable hereunder be
delivered to the undersigned.

      [_____] The undersigned shall tender payment in the following
form:_________________________.

      [_____] The undersigned hereby elects the net issue exercise option
pursuant to Section 2.3(b) of the Warrant, and accordingly requests delivery of
a net of____________ shares of Series D Preferred Stock.

                             _________________________
                             (Name of Registered Owner)

                             _________________________
                             (Signature of Registered Owner)

                             _________________________
                             (Street Address)

                             _________________________
                             (City) (State) (Zip Code)

NOTICE: The signature on this subscription must correspond with the name as
        written upon the face of the Warrant in every particular, without
        alteration or enlargement or any change whatsoever.



                                                                     Exhibit 4.7

                                    EXHIBIT B

                                 ASSIGNMENT FORM

      FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below the rights of the
undersigned under this Warrant, with respect to the number of shares of Warrant
Stock set forth below:

Name and Address of Assignee                      No. of Shares of Warrant Stock






and does hereby irrevocably constitute and appoint ___________________________
attorney-in-fact to register such transfer on the books of PTC THERAPEUTICS,
INC. maintained for the purpose, with full power of substitution in the
premises.

Dated:                             Print Name:
                                               _______________________

                                   Signature:
                                               _______________________
                                   Witness:
                                               _______________________

NOTICE: The signature on this assignment must correspond with the name as
        written upon the face of the Warrant in every particular, without
        alteration or enlargement or any change whatsoever.

                                                                     Exhibit 4.8

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES
      LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
      VIEW TO DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE OFFERED FOR
      SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED
      (EACH A "TRANSFER") IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY OTHER
      APPLICABLE SECURITIES LAWS, UNLESS THE HOLDER SHALL HAVE OBTAINED AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
      REGISTRATION IS NOT REQUIRED.

      THE TRANSFER AND VOTING OF THE SECURITIES OBTAINABLE UPON EXERCISE OF THIS
      STOCK PURCHASE WARRANT ARE RESTRICTED BY THE TERMS OF THE AMENDED AND
      RESTATED MANAGEMENT AND VOTING AGREEMENT, DATED AUGUST 17, 2001, AMONG THE
      COMPANY AND THE STOCKHOLDERS NAMED THEREIN, AND THE THIRD AMENDED AND
      RESTATED INVESTOR RIGHTS AGREEMENT, DATED AUGUST 17, 2001, AMONG THE
      COMPANY AND THE STOCKHOLDERS NAMED THEREIN AS SUCH AGREEMENTS MAY BE
      AMENDED FROM TIME TO TIME (THE "STOCKHOLDER AGREEMENTS"), COPIES OF WHICH
      MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE. THE COMPANY WILL NOT
      REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY
      UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS
      OF THE STOCKHOLDER AGREEMENTS.

No. SPW-1                                                       December 6, 2002

                             PTC THERAPEUTICS, INC.

                             STOCK Purchase Warrant

                                -----------------

      THIS STOCK PURCHASE WARRANT (this "WARRANT") certifies that, for value
received, Tularik Inc., or its registered assigns (the "HOLDER"), is entitled to
subscribe for and purchase from PTC Therapeutics, Inc., a Delaware corporation
(the "COMPANY"), up to 500,000 (subject to adjustment pursuant to Section 4
hereof) shares (the "SHARES") of the Company's Common Stock, par value $0.001
per share ("COMMON STOCK") at a price per share of $3.25 (subject to adjustment
pursuant to Section 4 hereof). This Warrant is being issued pursuant to



PTC Warrant No. SPW-1                                               Confidential

that certain Securities Acquisition Agreement, dated as of the date hereof, by
and between the Company and Tularik Inc. (the "AGREEMENT").

      This Warrant is subject to the following terms and conditions:

      1. Vesting and Expiration of Shares. The exercise of this Warrant shall be
subject to the Company's achievement of the following milestones:

            (a) This Warrant shall become exercisable for up to 250,000 Shares
upon the Company's submission to the United States Food and Drug Administration
(the "FDA") in the U.S. or to an equivalent regulatory authority in a foreign
country of an Investigational New Drug Application (or the corresponding filing
or documentation of any foreign country) with respect to a Product Candidate
(the "FIRST IND FILING"). As used herein "PRODUCT CANDIDATE" shall mean any
product candidate for use in the Field. As used herein the "FIELD" shall mean
the therapeutic treatment of disease in humans or other animals by means of the
suppression of nonsense mutations. The right to purchase the above referenced
250,000 Shares shall expire and be of no force or effect if not exercised prior
to the tenth (10th) anniversary of receipt by Holder of written notice from the
Company of the First IND Filing.

            (b) This Warrant shall become exercisable for up to an additional
150,000 Shares upon the enrollment of the first human patient in a Phase II
Clinical Trial for any Product Candidate. As used herein "PHASE II CLINICAL
TRIAL" shall mean a clinical study conducted to evaluate the effectiveness of
the Product Candidate for a particular indication or indications in patients
with the disease or condition under study. The right to purchase the above
referenced 150,000 Shares shall expire and be of no force or effect if not
exercised prior to the eighth (8th) anniversary of receipt by Holder of written
notice from the Company of the commencement of the first Phase II Clinical
Trial.

            (c) This Warrant shall become exercisable for up to an additional
100,000 Shares upon any of the Company's Product Candidates receiving Marketing
Approval from the FDA or from an equivalent regulatory authority in a foreign
country. As used herein, "MARKETING APPROVAL" shall mean any approval necessary
for the marketing, promotion, sale or use of a Product Candidate as a
pharmaceutical product in a country. The right to purchase the above referenced
100,000 Shares shall expire and be of no force or effect if not exercised prior
to the fifth (5th) anniversary of receipt by Holder of written notice from the
Company of the first Marketing Approval of a Product Candidate.

            (d) Notwithstanding the foregoing, both Holder's right to continued
vesting of purchase rights as described in this Section and Holder's right to
purchase Shares pursuant to this Warrant shall expire and be of no force or
effect as of the 20th anniversary of the date of this Warrant.

      2. Method of Exercise; Payment.

            (a) Cash Exercise. Subject to the provisions of Section 1, the
purchase rights represented by this Warrant may be exercised by the Holder, in
whole or in part, at any time, or from time to time, by the surrender of this
Warrant (together with a duly executed notice of exercise (the "NOTICE OF
EXERCISE") in the form attached hereto as Exhibit A) at the Company's

                                     - 2 -


PTC Warrant No. SPW-1                                               Confidential

principal offices, and by payment to the Company of an amount equal to the
Exercise Price multiplied by the number of the Shares being purchased, which
amount shall be paid in cash, by check or by wire transfer of immediately
available funds to an account designated by the Company. The person in whose
name any certificate representing the Shares issuable upon any exercise of this
Warrant shall be deemed to have become the holder of record of, and shall be
treated for all purposes as the record holder of, the Shares represented thereby
(and such Shares shall be deemed to have been issued) immediately prior to the
close of business on the date or dates upon which such surrender and payment are
made. As used herein, the term "PERSON" means any individual or any corporation,
partnership, trust, limited liability company or other entity or organization of
any kind.

            (b) Net Issue Exercise. In lieu of exercising this Warrant pursuant
to Section 2(a) hereof, the Holder may elect to receive a number of Shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
exercised) by surrender of this Warrant at the Company's principal offices
together with a duly executed Notice of Exercise in which the appropriate
alternative is initialed by the Holder. In such event, the Company shall issue
to the Holder the number of Shares computed using the following formula:

                    X = Y (A-B)
                        -------
                           A

      Where X       =      the number of Shares to be issued to the Holder.

            Y       =      the number of Shares subject to this Warrant or, if
                           only a portion of this Warrant is being exercised,
                           the portion of this Warrant being exercised (at the
                           time of such calculation).

            A       =      the Fair Market Value of one Share (at the date of
                           such calculation).

            B       =      the Exercise Price (as adjusted to the date of such
                           calculation).

            (c) Fair Market Value. For purposes of this Section 2, the Fair
Market Value of one Share shall equal:

                  (i) the average of the closing sale prices of the Common Stock
(or any other security for which this Warrant is then exercisable) quoted on the
Nasdaq Stock Market or in the Over-The-Counter Market Summary or the closing
price quoted on any national securities exchange on which such securities are
listed, whichever is applicable, as published in the Western Edition of The Wall
Street Journal for the ten trading days immediately prior to the date of
determination of Fair Market Value (or, if no sales take place on any such
trading day, the average of the closing bid and asked prices on such trading
day); or

                  (ii) if the Common Stock (or any other security for which this
Warrant is then exercisable) is not traded on the Nasdaq Stock Market or
Over-The-Counter or on a national securities exchange, the Fair Market Value of
a Share shall be established in good faith by the Company's Board of Directors.

                                     - 3 -


PTC Warrant No. SPW-1                                               Confidential

            (d) Stock Certificates. In the event of any exercise of the rights
represented by this Warrant, as promptly as practicable on or after the date of
exercise, the Company at its expense shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates representing
the number of Shares issued upon such exercise. In the event that this Warrant
is exercised in part, as promptly as practicable on or after the date of
exercise, the Company at its sole expense will execute and deliver a new Warrant
in the form of this Warrant exercisable for the number of Shares for which this
Warrant may then be exercised.

            (e) Taxes. The issuance of the Shares upon the exercise of this
Warrant, and the delivery of certificates or other instruments representing such
Shares, shall be made without charge to the Holder for any tax or other charge
of whatever nature in respect of such issuance and the Company shall bear any
such taxes in respect of such issuance.

      3. Stock Fully Paid; Reservation of Shares. All of the Shares issuable
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all preemptive rights, rights of first refusal or first offer, taxes,
liens and charges of whatever nature, except as set forth in the Stockholder
Agreements (as defined in the Agreement) with respect to the issuance thereof.
During the period within which the rights represented by this Warrant may be
exercised, the Company shall at all times have authorized and reserved for
issuance a sufficient number of shares of its Common Stock to provide for the
full exercise of the rights represented by this Warrant.

      4. Certain Adjustments.

            (a) Special Definitions. For the purposes of this Section 4, the
following definitions shall apply:

                  (i) "ADDITIONAL SHARES OF COMMON STOCK" means all shares of
Common Stock issued (or, pursuant to Section 4(c), deemed to be issued) by the
Company after the Original Issue Date, other than:

                        (A) shares of Common Stock issued or issuable as a
dividend or distribution payable pro rata to all holders of Common Stock
(determined on a fully-diluted, as converted basis) of the Company;

                        (B) up to 3,000,000 shares of Common Stock or Options
issued or issuable to employees, consultants, officers, directors, advisors and
other persons performing services for the Company pursuant to the Company's 1998
Employee, Director and Consultant Stock Option Plan or other arrangement
approved by the Board of Directors of the Company; provided that, more than
3,000,000 shares of Common Stock or Options may be issued or issuable pursuant
to the Corporation's 1998 Employee, Director and Consultant Stock Option Plan
and not considered "Additional Shares of Common Stock" upon written consent of
the holders of a majority of the Preferred Stock;

                        (C) shares of Common Stock issued or issuable in
connection with the conversion or exercise of any Option or Convertible
Securities outstanding on the date hereof;

                                     - 4 -


PTC Warrant No. SPW-1                                               Confidential

                        (D) shares of Common Stock issued or issuable under the
Agreement or in connection with the conversion or exercise of any Option or
Convertible Securities issued under the Agreement;

                        (E) up to 175,000 shares of Common Stock or Options
issued or issuable to institutional lenders in connection with the establishment
or maintenance by the Company of credit facilities, including equipment lease
facilities, approved in each case by a majority of the Company's Board of
Directors;

                        (F) shares of Common Stock issued or issuable pursuant
to a registered public offering, the closing of which is on or after the
Original Issue Date;

                        (G) up to 175,000 shares of Common Stock or Options
issued or issuable in connection with the sale of Common Stock or Convertible
Securities of the Company to any licensor of technology or patent rights to the
Company or to any collaborative partner or license with respect to the
development or commercialization of products;

                        (H) up to 1,000,000 shares of Common Stock or Options
issued or issuable in connection with the acquisition by the Company of another
corporation by merger, purchase of all or substantially all of its assets or
acquisition of all or substantially all of the capital stock of such
corporation; or

                        (I) shares of Common Stock that are exempted from the
definition of "Additional Shares of Common Stock" contained in the Shareholder
Documents (as defined below) by action of the holders of Preferred Stock as
provided for in the Shareholder Documents.

                  (ii) "CONVERTIBLE SECURITIES" means any evidences of
indebtedness, shares (other than the Common Stock), or other securities directly
or indirectly convertible into or exchangeable for the Common Stock; including
any series of Preferred Stock convertible by its terms into Common Stock.

                  (iii) "OPTION" means any right, option or warrant to subscribe
for, purchase or otherwise acquire Common Stock or Convertible Securities.

                  (iv) "ORIGINAL ISSUE DATE" means the date hereof.

                  (v) "PREFERRED STOCK" means any class of series of stock
designated as such under the Company's Restated Certificate of Incorporation, as
amended from time to time.

                  (vi) "SHAREHOLDER DOCUMENTS" shall mean collectively the
Company's Restated Certificate of Incorporation, as amended from time to time,
the Amended and Restated Management and Voting Agreement, dated as of August 17,
2001, by and among the Company, Tularik Inc. and certain other stockholders
named therein, and the Third Amended and Restated Investor Rights Agreement,
dated as of August 17, 2001, by and among the Company, Tularik Inc. and certain
other stockholders named therein.

                                     - 5 -


PTC Warrant No. SPW-1                                               Confidential

            (b) No Adjustment of Exercise Price. No adjustment shall be made in
the Exercise Price as a result of the issuance of Additional Shares of Common
Stock or otherwise, unless the consideration per share determined pursuant to
Section 4(f) for an Additional Share of Common Stock issued or deemed to be
issued by the Company is less than the Exercise Price in effect on the date of,
and immediately prior to, the issue of such Additional Shares of Common Stock.

            (c) Issue of Options and Convertible Securities Deemed Issue of
Additional Shares of Common Stock. If the Company at any time or from time to
time after the Original Issue Date shall issue any Options or Convertible
Securities, or shall fix a record date for the determination of holders of any
class of securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares of the Common Stock (as set forth
in the instrument relating thereto without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise
of such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on
such record date, provided, that Additional Shares of Common Stock shall not be
deemed to have been issued unless the consideration per share determined
pursuant to Section 4(f) for such Additional Shares of Common Stock would be
less than the Exercise Price in effect on the date of and immediately prior to
such issue, or such record date, as the case may be, and provided, further, that
in any such case in which Additional Shares of Common Stock are deemed to be
issued:

                  (i) No further adjustment in the Exercise Price shall be made
upon the subsequent issue of Convertible Securities or shares of the Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;

                  (ii) If such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase or decrease,
other than any decrease due to anti-dilution provisions, in the consideration
payable to the Company, or decrease or increase, other than any increase due to
anti-dilution provisions, in the number of shares of the Common Stock issuable,
upon the exercise, conversion or exchange thereof, the Exercise Price computed
upon the original issue thereof (or upon the occurrence of a record date with
respect thereto), and any subsequent adjustments based thereon, shall, upon the
effectiveness of any such increase or decrease in consideration, or decrease or
increase in the number of shares, be recomputed to reflect such increase or
decrease in consideration, or decrease or increase in the number of shares,
insofar as it affects such Options or the right of conversion or exchange under
such Convertible Securities;

                  (iii) Upon the expiration of any such Options or any rights of
conversion or exchange under such Convertible Securities which shall not have
been exercised, the Exercise Price computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto) and any subsequent
adjustments based thereon shall, upon such expiration, be recomputed as if:

                                     - 6 -


PTC Warrant No. SPW-1                                               Confidential

                        (A) In the case of Convertible Securities or Options for
Common Stock, the only Additional Shares of Common Stock issued were the shares
of the Common Stock, if any, actually issued upon the exercise of such Options
or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
Company for the issue of all such Options, whether or not exercised, plus the
consideration actually received by the Company upon such exercise, or for the
issue of all such Convertible Securities which were actually converted or
exchanged, plus the additional consideration, if any, actually received by the
Company upon such conversion or exchange; and

                        (B) In the case of Options for Convertible Securities,
only the Convertible Securities, if any, actually issued upon the exercise
thereof were issued at the time of issue of such Options, and the consideration
received by the Company for the Additional Shares of Common Stock deemed to have
been then issued was the consideration actually received by the Company for the
issue of all such Options, whether or not exercised, plus the consideration
deemed to have been received by the Company determined pursuant to Section 4(c)
upon the issue of the Convertible Securities with respect to which such Options
were actually exercised;

                  (iv) No recomputation pursuant to Section 4(c)(ii) or Section
4(c)(iii) above shall have the effect of increasing the Exercise Price to an
amount that exceeds the lower of (A) the Exercise Price prior to the original
adjustment for such deemed issuance, or (B) the Exercise Price that would have
resulted from any issuance of Additional Shares of Common Stock between the
original adjustment date and such recomputation date,

                  (v) In the case of any Options which expire by their terms not
more than thirty (30) days after the date of issue thereof, no adjustment of the
Exercise Price shall be made until the expiration or exercise of all such
Options, whereupon such adjustment shall be made in the same manner provided in
Section 4(c)(iii) above; and

                  (vi) If such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date fixed therefor, the
adjustment previously made in the Exercise Price which became effective on such
record date shall be canceled as of the close of business on such record date,
and thereafter the Exercise Price shall be adjusted pursuant to this Section
4(c)(iii) as of the actual date of their issuance.

            (d) Stock Dividends, Stock Distributions and Subdivisions. In the
event the Company at any time or from time to time after the Original Issue Date
shall declare or pay any dividend or make any other distribution on the Common
Stock payable in Common Stock, or effect a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in Common Stock), then and in any such event, Additional Shares of Common Stock
shall be deemed to have been issued:

                  (i) In the case of any such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend or
distribution; or

                                     - 7 -


PTC Warrant No. SPW-1                                               Confidential

                  (ii) In the case of any such subdivision, at the close of
business on the date immediately prior to the date upon which such corporate
action becomes effective.

                  If such record date shall have been fixed and such dividend
shall not have been fully paid on the date fixed therefor, the adjustment
previously made in the Exercise Price which became effective on such record date
shall be canceled as of the close of business on such record date, and
thereafter the Exercise Price shall be adjusted pursuant to this Section 4(d) as
of the time of actual payment of such dividend.

            (e) Adjustment of Exercise Price and Shares Upon Certain Events. If,
after the Original Issue Date, the Company shall issue Additional Shares of
Common Stock, including Additional Shares of Common Stock deemed to be issued
pursuant to Section 4(c) hereof, but excluding Additional Shares of Common Stock
deemed to be issued pursuant to Section 4(d) (which event is dealt with in
Section 4(g)) without consideration or for a consideration per share less than
the Exercise Price in effect immediately prior to such issue, then and in such
event, the Exercise Price shall be reduced, concurrently with such issue, to a
price (calculated to the nearest cent, provided that any adjustments not
required to be made by virtue of such rounding shall be carried forward and
taken into account in any subsequent adjustment) determined by multiplying the
Exercise Price in effect immediately prior to such issue by a fraction (x) the
numerator of which shall be (A) the number of shares of Common Stock outstanding
immediately prior to such issue (including shares of the Common Stock issuable
upon exercise or conversion of any outstanding Options or Convertible
Securities) plus (B) the number of shares of the Common Stock which the
aggregate consideration received by the Company for the total number of
Additional Shares of Common stock so issued would purchase at the Exercise Price
in effect immediately prior to such issue and (y) the denominator of which shall
be (A) the number of shares of the Common Stock outstanding immediately prior to
such issue (including shares of Common Stock issuable upon exercise or
conversion of any outstanding Options or Convertible Securities) plus (B) the
number of such Additional Shares of Common Stock so issued or deemed to be
issued. Upon each adjustment of the Exercise Price (other than pursuant to a
stock split, reverse stock split or similar transaction), the aggregate number
of Shares issuable upon exercise of the Warrant shall be adjusted to equal the
quotient obtained by dividing (a) the product resulting from multiplying (i) the
number of Shares issuable upon exercise of the Warrant and (ii) the Exercise
Price, in each case as in effect immediately before such adjustment, by (b) the
adjusted Exercise Price. The number of Shares vesting pursuant to Section 1
shall be proportionately adjusted in accordance with the adjustment made
pursuant to this Section 4(e). Upon the occurrence of each adjustment of the
Exercise Price, the Company at its expense shall promptly compute such
adjustment in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based.

            (f) Determination of Consideration. For purposes of Section 4(e),
the consideration received by the Company for the issue of any Additional Shares
of Common Stock shall be computed as follows:

                  (i) Cash and Property: Such consideration shall:

                                     - 8 -


PTC Warrant No. SPW-1                                               Confidential

                        (A) Insofar as it consists of cash, be computed at the
aggregate of cash received by the Company, excluding amounts paid or payable for
accrued interest or accrued dividends;

                        (B) Insofar as it consists of property other than cash,
be computed at the fair market value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and

                        (C) In the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the Company
for consideration which covers both, be the proportion of such consideration,
computed as provided in Sections 4(f)(i)(A) and 4(f)(i)(B) above, received in
respect of the Additional Shares of Common Stock, as determined in good faith by
the Board of Directors;

                  (ii) Options and Convertible Securities. The consideration per
share received by the Company for Additional Shares of Common Stock deemed to
have been issued pursuant to Section 4(c), relating to Options and Convertible
Securities, shall be determined by dividing:

                        (A) The total amount, if any, received or receivable by
the Company as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration until such
subsequent adjustment occurs) payable to the Company upon the exercise of such
Options or the conversion or exchange of such Convertible Securities, or in the
case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible
Securities, by

                        (B) The maximum number of shares of the Common Stock (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number until such
subsequent adjustment occurs) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.

            (g) Adjustment for Stock Splits, Stock Dividends, Subdivisions,
Combinations or Consolidation of Common Stock. In the event that at any time or
from time to time after the Original Issue Date the outstanding shares of the
Common Stock shall be split, subdivided, combined or consolidated, by
reclassification or otherwise, into a greater or lesser number of shares of
Common Stock, and in the event that the Company shall issue shares of the Common
Stock by way of a stock dividend or other distribution to the holders of the
Common Stock, the Exercise Price and/or number of Shares covered by this Warrant
in effect immediately prior to such split, subdivision, stock dividend,
combination or consolidation shall, concurrently with the effectiveness of such
split, subdivision, stock dividend, combination or consolidation, be increased
or decreased proportionately.

            (h) Termination of Adjustment Rights. The provisions of this Section
4 (other than Section 4(g)) shall terminate immediately prior to the closing of
a firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities

                                     - 9 -


PTC Warrant No. SPW-1                                               Confidential

Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Company to the public at an initial public offering price per
share of not less than $8.00 (subject to equitable adjustment in the event of
any stock dividend, stock split, combination, reorganization, recapitalization
or similar event involving a change in the Common Stock) with net proceeds to
the Company of not less than $40,000,000 (a "QUALIFIED INITIAL PUBLIC
OFFERING"). Thereafter, the provisions of this Section 4 shall be of no further
force or effect.

            (i) No Impairment. The Company shall not, by amendment of its
Restated Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company but shall
at all times in good faith assist in the carrying out of all the provisions of
hereof and in the taking of all such action as may be necessary or appropriate
in order to protect the rights of Holder against impairment.

      5. Notices.

            (a) In the event that the Company shall propose at any time:

                  (i) to declare any dividend or distribution upon its Common
Stock (or other stock or securities at the time receivable upon the exercise of
this Warrant) whether in cash, property, stock or other securities, whether or
not a regular cash dividend and whether or not out of earnings or earned
surplus;

                  (ii) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights;

                  (iii) to effect any reclassification or recapitalization of
its Common Stock outstanding involving a change in the Common Stock;

                  (iv) to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all its property or
business, or to liquidate, dissolve or wind up; or

                  (v) to effect its Qualified Initial Public Offering;

then, in connection with each such event, the Company shall send to the Holder
(1) at least ten days' prior written notice of the date on which a record shall
be taken for such dividend, distribution or subscription rights (and specifying
the date on which the holders of Common Stock shall be entitled thereto) or for
determining rights to vote, if any; and (2) at least ten days' prior written
notice of the date when the same shall take place (and specifying the date, if
any is to be fixed, on which the holders of record of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon the occurrence of such event). Notwithstanding the above, the
ten days' notice requirement may be shortened or waived upon the written consent
of the Holder.

                                     - 10 -


PTC Warrant No. SPW-1                                               Confidential

            (b) Any written notice by the Company or the Holder required or
permitted hereunder shall be given in the manner provided in the Agreement;
provided, however the delivery of a Notice of Exercise shall be made in person,
by first class mail (postage pre-paid) or by nationally recognized overnight
courier and accompanied by this Warrant.

      6. Rights and Obligations.

            (a) The Shares shall be subject to the provisions of the Stockholder
Agreements in accordance with their respective terms, including, without
limitation, all applicable transfer restrictions set forth in the Stockholder
Agreements.

            (b) The Holder shall be entitled to incidental registration rights
with respect to the Shares on a pro rata basis with other security holders of
the Company solely to the extent such other security holders are entitled to
have their securities registered pursuant to Section 4.5 of the IR Agreement (as
defined in the Agreement); provided, however, that such Section 4.5 of the IR
Agreement shall be read without giving effect to the parenthetical phrase
"(other than pursuant to Sections 4.3 and 4.4)" solely with respect to the
Holder. Solely for purposes of determining the rights and obligations of the
Holder with respect to the incidental registration rights granted pursuant to
this Section 6(b), the Shares shall be treated as if they were "Registrable
Securities" (as defined in the IR Agreement) and the Holder shall be treated as
if it was a "Holder" (as defined in the IR Agreement) for purposes of Sections
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12 and 4.13 of the IR Agreement; provided,
however, that except as expressly set forth herein, this Section 6(b) shall not
be interpreted in any manner that would expand the Holder's registration rights
beyond those incidental registration rights set forth in Section 4.5 of the IR
Agreement.

      7. Limitations of Transfer. Notwithstanding anything set forth herein to
the contrary, this Warrant may not be offered for sale, sold, transferred,
pledged, hypothecated or otherwise encumbered under any circumstances prior to
December 5, 2007; provided, however, the foregoing provision of this Section 7
shall not apply with respect to the transfer of this Warrant by the Holder to an
Affiliate (as defined in the Termination and License Agreement, dated the date
hereof, by and between the Company and Tularik Inc. (the "TERMINATION AND
LICENSE AGREEMENT")) or in connection with the sale or merger of all or
substantially all of the Holder's business, so long as such transfer is
otherwise permissible under all applicable securities laws, the terms of this
Warrant and any other obligations or limitations to which the Holder or this
Warrant is subject.

      8. Legend. Each certificate evidencing the Shares issued upon exercise of
this Warrant, or transfer of such shares (other than a transfer registered under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), or any subsequent
transfer of shares so registered) shall be stamped or imprinted with a legend
substantially in the following form:

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
            OTHER SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR
            INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE. SUCH

                                     - 11 -


PTC Warrant No. SPW-1                                               Confidential

            SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
            TRANSFERRED, PLEDGED OR HYPOTHECATED (EACH A "TRANSFER") IN THE
            ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH
            SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY OTHER APPLICABLE
            SECURITIES LAWS, UNLESS THE HOLDER SHALL HAVE OBTAINED AN OPINION OF
            COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
            REGISTRATION IS NOT REQUIRED.

            THE TRANSFER AND VOTING OF ANY OF THE SECURITIES REPRESENTED BY THIS
            CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE AMENDED AND RESTATED
            MANAGEMENT AND VOTING AGREEMENT, DATED AUGUST 17, 2001, AMONG THE
            COMPANY AND THE STOCKHOLDERS NAMED THEREIN AND THE THIRD AMENDED AND
            RESTATED INVESTOR RIGHTS AGREEMENT, DATED AUGUST 17, 2001, AMONG THE
            COMPANY AND THE STOCKHOLDERS NAMED THEREIN, AS SUCH AGREEMENTS MAY
            BE AMENDED FROM TIME TO TIME (THE "STOCKHOLDER AGREEMENTS"), COPIES
            OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE. THE
            COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE
            BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN
            COMPLIANCE WITH THE TERMS OF THE STOCKHOLDER AGREEMENTS.

      9. Removal of Legend. Upon request of a holder of a certificate with the
legends required by Section 8 hereof, the Company shall issue to such holder a
new certificate therefor free of any transfer legend, if, with such request, the
Company shall have received an opinion of counsel satisfactory to the Company in
form and substance to the effect that any transfer by such holder of the shares
evidenced by such certificate will not violate the Securities Act, any
applicable state securities laws, or any applicable provision of any Stockholder
Agreement.

      10. Fractional Shares. No fractional shares will be issued in connection
with any exercise hereunder. All shares of Common Stock (including fractions
thereof) issuable upon exercise of this Warrant by the Holder shall be
aggregated for purposes of determining whether the exercise would result in the
issuance of any fractional share. Any fraction of a share resulting from any
calculation will be rounded down to the next whole share.

      11. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Holder as follows:

            (a) This Warrant has been duly authorized and executed by the
Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms;

            (b) Prior to the date that this Warrant becomes exercisable, the
Shares will have been duly authorized and reserved for issuance by the Company
and, when issued in

                                     - 12 -


PTC Warrant No. SPW-1                                               Confidential

accordance with the terms hereof, will be validly issued, fully paid and
nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges of whatever nature, except as set forth in
the Stockholder Agreements; and

            (c) The execution and delivery of this Warrant are not, and the
issuance of the Shares upon exercise of this Warrant in accordance with the
terms hereof will not be, inconsistent with the Company's Restated Certificate
of Incorporation, as then in effect, and its bylaws, as then in effect.

      12. Representations and Warranties by the Holder. The Holder represents
and warrants to the Company as follows:

            (a) This Warrant is being acquired for its own account, for
investment and not with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act. Upon exercise of
this Warrant, the Holder shall, if so requested by the Company, confirm in
writing, in a form reasonably satisfactory to the Company, that the Shares
issuable upon exercise of this Warrant are being acquired for investment and not
with a view toward distribution or resale that would violate the Securities Act.

            (b) The Holder understands that this Warrant and the Shares have not
been registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act pursuant to Section 4(2) thereof, and that they must be held
by the Holder indefinitely, and that the Holder must therefore bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is
registered under the Securities Act or is exempted from such registration.

            (c) The Holder has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
purchase of this Warrant and the Shares purchasable pursuant to the terms of
this Warrant and of protecting its interests in connection therewith.

            (d) The Holder is able to bear the economic risk of the purchase of
the Shares pursuant to the terms of this Warrant.

      13. Rights of Stockholders. Subject to Sections 4 and 5 hereof, no Holder,
as such, shall be entitled to vote or receive dividends or be deemed the holder
of the Shares or any other securities of the Company that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares purchasable upon the exercise
hereof shall have become issuable, as provided herein.

                                     - 13 -


PTC Warrant No. SPW-1                                               Confidential

      14. Miscellaneous.

            (a) This Warrant shall be governed by and construed for all purposes
under and in accordance with the laws of the State of Delaware without regard to
principles of conflicts of law.

            (b) The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof.

            (c) The representations, warranties, covenants and conditions of the
respective parties contained herein or made pursuant to this Warrant shall
survive the execution and delivery of this Warrant.

            (d) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of the Company and of the Holder or
holders hereof and of the Shares issued or issuable upon the exercise hereof.

            (e) This Warrant, together with the Agreement and the Termination
and License Agreement, constitute the full and entire understanding and
agreement between the parties with regard to the acquisition of this Warrant and
the Shares (as defined in the Agreement).

            (f) The Company shall not, by amendment of its Restated Certificate
of Incorporation or bylaws, or through any other means, directly or indirectly,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant and shall at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against impairment.

            (g) Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the case
of any such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the Company,
at its expense, will execute and deliver to the Holder, in lieu thereof, a new
Warrant of like date and tenor.

            (h) Except as otherwise provided herein, this Warrant and any
provision hereof may be amended, waived or terminated only by an instrument in
writing signed by the Company and the Holder.

                            [Signature Page Follows]

                                     - 14 -


PTC Warrant No. SPW-1                                               Confidential

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                             PTC THERAPEUTICS, INC.

                                             By /s/ MARK E. BOULDING
                                                ________________________________
                                                Mark E. Boulding
                                                Senior Vice President, Business
                                                Development and Legal; Secretary
                                                of the Corporation

Acknowledged and Accepted:

TULARIK INC.

By /s/ J. Rieflin
  _________________________________
Name:  J. Rieflin
Title: Vice President

                                     - 15 -


                                                                    Confidential

                                                                       Exhibit A

                               NOTICE OF EXERCISE

TO: PTC Therapeutics, Inc.

      Attention: Legal Department

      1. The undersigned hereby elects to purchase _______________ (leave blank
if you choose Alternative No. 2 below) shares of Common Stock, par value $0.001
per share, of PTC Therapeutics, Inc. pursuant to the terms of this Warrant, and
tenders herewith payment of the purchase price of such shares in full. (Initial
here if the undersigned elects this alternative). _________

      2. In lieu of exercising the attached Warrant for cash, the undersigned
hereby elects to effect the net issuance provision of Section 2(b) of this
Warrant and receive ____________ (leave blank if you choose Alternative No. 1
above) shares of Common Stock, par value $0.001 per share, of PTC Therapeutics,
Inc. pursuant to the terms of this Warrant. (Initial here if the undersigned
elects this alternative). ___________

      3. Please issue a certificate or certificates representing said securities
in the name of the undersigned or in such other name as is specified below:

                    _________________________________________
                                     (Name)

                    _________________________________________

                    _________________________________________
                                    (Address)

      4. The undersigned hereby represents and warrants that the aforesaid
securities are being acquired for the account of the undersigned for investment
and not with a view to, or for resale, in connection with the distribution
thereof, and that the undersigned has no present intention of distributing or
reselling such shares and all representations and warranties of the undersigned
set forth in Section 12 of the attached Warrant are true and correct as of the
date hereof.

                                       _________________________________________
                                       (Signature and Date)

                                                                     Exhibit 4.9

                             STOCK PURCHASE WARRANT

                                     For the purchase of up to 534,397 shares of
                                           Series E Convertible Preferred Stock,
                                                       par value $.001 per share

No. W-TCC-01E                                                  December 19, 2003

PTC Therapeutics, Inc., a Delaware corporation (the "Company"), hereby certifies
that, for good and valuable consideration, Three Crowns Capital (Bermuda) Ltd.
or its permitted assigns (the "Warrant Holder") is entitled, subject to the
terms set forth below, to purchase from the Company at any time on or before
5:00 p.m., Boston, Massachusetts time, on December 19, 2013 (the "Exercise
Period"), up to 534,397 fully-paid and non-assessable shares of Series E
Convertible Preferred Stock, par value $.001 per share, of the Company (the
"Series E Preferred Stock"), or shares of the Common Stock, par value $.001 per
share, of the Company (the "Common Stock") upon a mandatory conversion of the
Series E Preferred Stock as provided in Section 3 hereof (the Series E Preferred
Stock and the Common Stock are hereinafter collectively referred to as
"Shares"), at a price per share (the "Exercise Price") which shall initially be
$0.397644 per share and which shall be subject to adjustment as herein provided.

     1. Exercise of Warrants.

     1.1. Exercise. Subject to the terms and conditions of this Warrant, this
Warrant shall become exercisable by the Warrant Holder on December 19, 2003.

     1.2. Procedure to Exercise. This Warrant may be exercised by the Warrant
Holder, in whole or in part, by surrendering this Warrant, with the purchase
form appended hereto as Exhibit A duly executed by such Warrant Holder or by
such Warrant Holder's duly authorized attorney, at the principal office of the
Company, or at such other office or agency as the Company may designate,
accompanied by payment in full by cash, check or wire transfer of the amount
obtained by multiplying the number of Shares in the notice of exercise by the
Exercise Price (the "Purchase Price").

     1.3. Net Issue Exercise. In lieu of exercising this Warrant in the manner
provided above in Section 1.2, the Warrant Holder may elect to receive shares
equal to the value of this Warrant (or the portion thereof being converted) by
surrender of this Warrant, in whole or in part, at the principal office of the
Company together with the notice of exercise attached hereto as Exhibit A, in
which event the Company shall issue to the Warrant Holder the number of Shares
computed using the following formula (a "Net Issue Exercise"):

                                  X = Y (A - B)
                                      ---------
                                          A

Where: X = The number of Shares to be issued to the Warrant Holder.

       Y = The number of Shares purchasable under this Warrant (at the date of


                                      A-1



              such calculation) that are being converted, in whole or in part,
              hereunder.

          A = The Fair Market Value of one Share (at the date of such
              calculation).

          B = The Exercise Price (as adjusted to the date of such calculation).

     For purposes of this Section 1.3, if any Shares of the Warrant Holder or
any other shareholder of the Company are registered or publicly traded, then the
Fair Market Value of one Share shall mean the average of the closing bid and
asked prices of the Common Stock quoted in the over the counter market summary
or the closing price quoted by the Nasdaq National Market or any exchange on
which the Common Stock is listed, whichever is applicable, as published in the
Western Edition of The Wall Street Journal (or the Financial Times (US Edition)
if not published in The Wall Street Journal) for the business day prior to the
date of determination of fair market value. If the Shares are not traded on the
Nasdaq National Market or on an exchange, the Fair Market Value of one Share
shall be determined in good faith by the Company's Board of Directors.

     1.4. Effectiveness. Each exercise or Net Issue Exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the day on which this Warrant shall have been surrendered to the Company as
provided in Sections 1.2 or 1.3 above. At such time, the person or persons in
whose name or names any certificates for the Shares shall be issuable upon such
exercise or Net Issue Exercise as provided in Section 2 below shall be deemed to
have become the holder or holders of record of the Shares represented by such
certificates.

     2. Delivery of Stock Certificates, Etc. As soon as practicable after the
exercise or Net Issue Exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense will cause to be
issued in the name of, and delivered to, the Warrant Holder, or as such Warrant
Holder (upon payment by such Warrant Holder of any applicable transfer taxes)
may direct (i) a certificate or certificates for the number of fully paid and
non-assessable Shares to which the Warrant Holder shall be entitled upon such
exercise or Net Issue Exercise, and (ii) in case such exercise or Net Issue
Exercise is in part only, a new warrant or warrants (dated the date hereof) of
like tenor, calling in the aggregate on the face or faces thereof for the number
of Shares equal (without giving effect to any adjustment therein) to the number
of Shares called for on the face of this Warrant minus the number of Shares
purchased by the Warrant Holder upon such exercise or Net Issuance Exercise as
provided in Sections 1.2 or 1.3 herein.



     3. Adjustments Upon Mandatory Conversion of Series E Preferred Stock. Upon
any mandatory conversion of the Series E Preferred Stock pursuant to the
Company's Certificate of Incorporation, as amended or amended and restated from
time to time, this Warrant shall cease to be exercisable for shares of Series E
Preferred Stock and shall become exercisable for that number of shares of Common
Stock into which the shares of Series E Preferred Stock purchasable hereunder
would have been convertible immediately prior to such mandatory conversion, and
such that payment of the Exercise Price, or any multiple thereof, shall entitle
the Warrant Holder to receive the number of shares of Common Stock as would have
been issued upon conversion of each share of Series E Preferred Stock
purchasable hereunder immediately prior to such mandatory conversion.

     4. Stock Splits, Stock Dividends and Combinations. If the Company at any
time subdivides the outstanding shares of Series E Preferred Stock, or issues a
stock dividend on the outstanding shares of Series E Preferred Stock, the
Exercise Price in effect immediately prior to such subdivision or the issuance
of such stock dividend shall be proportionately decreased, and the number of
Shares shall be proportionately increased, and if the Company at any time
combines the outstanding shares of Series E Preferred Stock, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased, and the number of shares shall be proportionately decreased,
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be. Upon any mandatory conversion of
the Series E Preferred Stock as provided in Section 3, each reference to Series
E Preferred Stock in this Section 4 shall be deemed to be Common Stock.

     5. Conversions; Reorganizations; Reclassifications; Merger; Sales. In case
of any capital reorganization or any reclassification of the capital stock of
the Company or in case of the consolidation or merger of the Company with or
into another corporation or the conveyance of all or substantially all of the
assets of the Company to another corporation (an "M&A Transaction"), this
Warrant shall thereafter be exercisable for the number of shares of stock or
other securities or property to which a holder of the number of Shares
deliverable upon exercise of the Warrant would have been entitled to upon such
conversion, reorganization, reclassification, consolidation, merger or
conveyance and, in any such case, appropriate adjustment as determined by the
Board of Directors of the Company shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the Warrant Holder to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustments of the Exercise
Price and the number of Shares) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of the Warrant. Should the Board of
Directors make a good faith determination that compliance with the terms of this
Section will have a material adverse effect on the M&A Transaction, then the
Company may require that Warrant Holder exercise all or part of this Warrant on
the terms set forth herein.

     6. Statement of Adjustment. Whenever the Exercise Price shall be adjusted
as provided herein, the Company shall promptly file with the Secretary of the
Company or at such other place as shall be designated by the Company, a
statement, signed by its chief financial officer, showing in detail the facts
requiring such adjustment, the Exercise Price in effect before and after such
adjustment and the kind and amount of shares of capital stock, securities or
other property thereafter to be received upon the exercise of this Warrant. The
Company shall also



cause a copy of such statement to be sent in the manner specified in Section
16.3 to the Warrant Holder.

     7. Notice of Adjustment. In the event the Company shall propose to take any
action of the types described in Sections 4 or 5, the Company shall give notice
to the Warrant Holder in the manner set forth in Section 16.3, which notice
shall specify the record date, if any, with respect to any such action and the
date on which such action is to take place. Such notice shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action (to the extent such effect may be known at the date of
such notice) on the Exercise Price and the number, kind or class of shares or
other securities or property which shall be deliverable or purchasable upon the
occurrence of such action or deliverable upon the exercise hereof. In the case
of any action which would require the fixing of a record date, such notice shall
be given at least ten (10) days prior to the date so fixed, and in case of all
other actions, such notice shall be given at least twenty (20) days prior to the
taking of such proposed action. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.

     8. Taxes. The Company shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Company upon the exercise or conversion hereof; provided,
however, Company shall have no obligation to pay any documentary, stamp or other
transactional taxes on transfers initiated by Warrant Holder.

     9. No Fractional Shares. Each adjustment in the number of Shares
purchasable hereunder shall be calculated, to the nearest whole share with
fractional shares disregarded.

     10. Covenants as to Series Preferred Stock and Common Stock. The Company
covenants and agrees that the shares of Series E Preferred Stock issuable
hereunder, and the Common Stock issuable upon conversion thereof, and the Common
Stock issuable hereunder, as the case may be, will, upon issuance in accordance
with the terms hereof, be validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issuance thereof imposed by or through the Company. The Company further
covenants and agrees that the Company will at all times have authorized and
reserved, free from preemptive rights imposed by or through the Company, a
sufficient number of shares of Series E Preferred Stock and Common Stock to
provide for the exercise of the rights represented by this Warrant. The Company
further covenants and agrees that if any shares of capital stock to be reserved
for the purpose of the issuance of shares upon the exercise of this Warrant
require registration or qualification with or approval by the Securities and
Exchange Commission or any state regulatory agency under Federal or state law
(or by any analogous foreign regulatory body) before such shares may be validly
issued or delivered upon exercise, then the Company will in good faith and as
expeditiously as possible endeavor to secure such registration, qualification or
approval, as the case may be. Holders of Series E Preferred Stock and Common
Stock issuable upon exercise of this Warrant or conversion of any such shares,
as the case may be, shall be entitled to all the rights and privileges, and
bound by the obligations, of the Purchase Agreement, the Investor Rights
Agreement, and the Amended and Restated Voting Rights Agreement, all dated as of
the date hereof between the Company and the Investors (as defined therein) with
respect to such shares (the "Shareholder Agreements"). Upon exercise of the
Warrant, Warrant Holder at Company's request shall sign any counterpart
signature pages required in connection with becoming a party to such Shareholder
Agreements.



     11. No Impairment. The Company will not voluntarily avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Warrant Holder against impairment due to such event.

     12. Compliance with Securities Act.

     12.1 Unregistered Securities. The Warrant Holder acknowledges that this
Warrant and the Shares have not been registered under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any successor
legislation (the "Securities Act"), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Shares in
the absence of (i) an effective registration statement under the Securities Act
covering this Warrant or such Shares and registration or qualification of this
Warrant or such Shares under any applicable "blue sky" or state securities law
then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that
such registration and qualification are not required. The Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).

     12.2 Investment Representation. The Warrant Holder represents to the
Company that this Warrant is being acquired for the Warrant Holder's own account
and for the purpose of investment and not with a present view to, or for sale in
connection with, the distribution thereof, nor with any present intention of
distributing or selling the Warrant or Common Stock issuable upon exercise of
the Warrant. The Warrant Holder acknowledges that it has been afforded the
opportunity to meet with the management of the Company and to ask questions of,
and receive answers from, such management and the Company's counsel about the
business and affairs of the Company and concerning the terms and conditions of
the offering of this Warrant, and to obtain any additional information, to the
extent that the Company possessed such information or could acquire it without
unreasonable effort or expense, necessary to verify the accuracy of the
information otherwise obtained by or furnished to the Warrant Holder. The Holder
has received all information which the Warrant Holder considered necessary to
form a decision concerning the purchase of this Warrant, and no valid request to
the Company by the Warrant Holder hereof for information of any kind about the
Company has been refused or denied by the Company or remains unfulfilled as of
the date hereof. The Warrant Holder attests that it is considered to be a
sophisticated investor, is familiar with the risks inherent in speculative
investments such as in the Company, has such knowledge and experience in
financial business matters that he is capable of evaluating the merits and risk
of the investment in this Warrant and the Shares, and is able to bear the
economic risk of the investment. The Warrant Holder confirms that he is an
"accredited investor" as such term is defined in rule 501(a) of the Securities
Act.

     12.3 Investment Letter. Without limiting the generality of Section 12.1,
unless the offer and sale of any shares of Shares shall have been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue the Shares unless and until the Warrant Holder shall have executed an
investment letter in form and substance satisfactory to the Company, including a
warranty at the time of such exercise that the Warrant Holder is acquiring such
shares for its own



account, for investment and not with a view to, or for sale in connection with,
the distribution of any such shares.

     12.4 Legend. Certificates delivered to the Warrant Holder pursuant to
Section 2 shall bear the following legend or a legend in substantially similar
form (as well any such other legends as Company may reasonably require of its
shareholders generally):

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER SECURITIES LAWS. THESE
     SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
     DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
     DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
     OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE
     SECURITIES ACT OF 1933 AND ANY OTHER APPLICABLE SECURITIES LAWS, UNLESS THE
     HOLDER SHALL HAVE OBTAINED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
     THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."

     THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OR SERIES OF
     STOCK. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO
     SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
     PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR
     SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
     PREFERENCES AND/OR RIGHTS.

     THE SHARES REPRESENTED HEREBY ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER
     CONTAINED IN CERTAIN SUBSCRIPTION AND INVESTOR RIGHTS AGREEMENTS, AND MAY
     NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE
     TERMS THEREOF. THE COMPANY WILL FURNISH A COPY OF THE FULL TEXT OF SUCH
     RESTRICTIONS TO THE HOLDER OF THIS CERTIFICATE UPON WRHTEN REQUEST AND
     WITHOUT CHARGE.

     THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A CERTAIN AMENDED
     AND RESTATED VOTING AGREEMENT DATED AS OF _________, 20__ BY AND AMONG THE
     COMPANY AND THE STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH AGREEMENT IS
     AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY OR MAY BE OBTAINED
     FROM THE COMPANY UPON REQUEST AND WITHOUT CHARGE.

     13. Transferability. Without the prior written consent of the Company,
neither the Warrant nor the shares issuable upon exercise thereof (the "Warrant
Shares") shall be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) or be subject to execution, attachment or similar
process. Any attempted transfer, assignment, pledge,



hypothecation or other disposition of the Warrant, Warrant Shares, or of any
rights granted hereunder contrary to the provisions of this Section 13, or the
levy of any attachment or similar process upon the Warrant, Warrant Shares, or
such rights, shall be null and void. If, in connection with a registration
statement filed by the Company pursuant to the Securities Act of 1933, the
Company or its underwriter so requests, the Warrant Holder will agree not to
sell any Warrant Shares for a period not to exceed 180 days following the
effectiveness of such registration.

     14. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably in its discretion impose (which shall in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed.

     15. Register of Warrants. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Warrant Holder), a register for the Warrants in which the Company shall record
the name and address of the person in whose name a Warrant has been issued, as
well as the name and address of each transferee and each prior owner of such
Warrant.

     16. Miscellaneous.

     16.1 Waivers and Amendments. This Warrant or any provisions hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the Company and by Warrant Holders who hold or have the right to acquire at
least two-thirds of the Shares at such time issued or issuable upon exercise of
the Warrants, provided that no change, addition, omission or waiver shall be
made without the written consent of the Warrant Holder(s) which affects (i) the
number of Shares issuable on exercise of this Warrant, (ii) the Exercise Price
or (iii) any other provision other than in a manner in which all the Warrants
are affected.

     16.2 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware (US) without
giving effect to the conflicts of laws principles thereof.

     16.3 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be hand delivered, sent by facsimile or
other electronic medium, or mailed, postage prepaid, or sent by reputable
overnight courier, delivery charges prepaid, addressed as follows or to such
other address as may be furnished in writing to the other parties hereto:

     If to the Warrant Holder: Three Crowns Capital (Bermuda) Ltd.
                               Suite 1139
                               48 Par-La-Ville Road
                               Hamilton HM11
                               Bermuda
                               441-293 7107 (Fax)
                               Attention: Peter Svennilson

     With a copy to:           Conyers Dill & Pearman



                               Clarendon House
                               2 Church Street
                               Hamilton HM 11
                               Bermuda
                               441-292-4720 (Fax)
                               Attention: Peter A. S. Pearman

     And:                      Nixon Peabody LLP
                               101 Federal Street
                               Boston, MA 02110
                               617-345-1300 (Fax)
                               Attention: Carter S. Bacon, Esq.

     If to the Company:        PTC Therapeutics, Inc.
                               Attention: Legal Department
                               100 Corporate Court
                               Middlesex Business Center
                               South Plainfield, NJ 07080

                               with an email copy to: legal@ptcbio.com

     With a copy to:           Wilmer Cutler Pickering Hale and Dorr LLP
                               60 State Street
                               Boston, Massachusetts 02109
                               Attn: David E. Redlick, Esq.

     All such notices and communications shall be deemed to have been duly given
(i) five (5) business days after being deposited in the mail, postage prepaid if
mailed, (ii) one (1) business day after being sent by overnight courier, (iii)
when receipt acknowledged if telecopied and (iv) upon receipt if delivered by
hand.

     16.4 Headings. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the terms hereof.

     16.5 Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

     16.6 Currency. All currency references herein are to United States Dollars.

     16.7 Closing of Books. The Company will at no time close its transfer books
against the transfer of any Warrant or of any Shares issued or issuable upon the
exercise of the Warrant in a manner which interferes with the timely exercise of
this Warrant.

     16.8 No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the Warrant Holder to any voting rights or other rights as a stockholder
of the Company prior to the



exercise or conversion of the Warrant, provided that nothing herein shall be
construed to limit or impair other rights that the Warrant Holder may have under
this Warrant or otherwise. No provision of this Warrant, in the absence of
affirmative action by the Warrant Holder to purchase the Shares, and no mere
enumeration herein of the rights or privileges of the Warrant Holder, shall give
rise to any liability of such Warrant Holder for the Exercise Price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.



     IN WITNESS WHEREOF, the undersigned has caused this Warrant to be executed
as an instrument under seal.

                                   PTC Therapeutics, Inc.


                                   By: /s/ MARK E. BOULDING
                                       ------------------------------------
                                   Name: Mark E. Boulding
                                         ----------------------------------
                                   Title: S.V.P., Business Development and Legal
                                          ---------------------------------


AGREED AND ACKNOWLEDGED:

THREE CROWNS CAPITAL (BERMUDA) LTD.





                                    EXHIBIT A

                    NOTICE OF EXERCISE OR NET ISSUE EXERCISE

                                                         Date: ________ __, 20__

YY

Gentlemen:

The undersigned hereby elects to exercise or Net Issue Exercise the enclosed
Warrant issued by YY (the "Company") and dated as of ____ __, 2003.

     The undersigned elects to:

     [ ]  Exercise the Warrant and to purchase thereunder _____ shares of the
          Series __ Preferred Stock of the Company (the "Shares") at an exercise
          price of _____ per Share for an aggregate purchase price of _________
          (the "Purchase Price"). Pursuant to the terms of the Warrant, the
          undersigned has delivered the Purchase Price herewith in full.

     [ ]  Net Issue Exercise ____% of the value of the Warrant at the current
          Exercise Price (as defined in the Warrant) of ____ per Share.

                                        Very truly yours,


                                        ----------------------------------------

                                                                    Exhibit 4.10

                             STOCK PURCHASE WARRANT

                                     For the purchase of up to 460,018 shares of
                                           Series E Convertible Preferred Stock,
                                                       par value $.001 per share

No. W-TCC-02E                                                     April 21, 2004

PTC Therapeutics, Inc., a Delaware corporation (the "Company"), hereby certifies
that, for good and valuable consideration, Three Crowns Capital (Bermuda) Ltd.
or its permitted assigns (the "Warrant Holder") is entitled, subject to the
terms set forth below, to purchase from the Company at any time on or before
5:00 p.m., Boston, Massachusetts time, on April 21, 2014 (the "Exercise
Period"), up to 460,018 fully-paid and non-assessable shares of Series E
Convertible Preferred Stock, par value $.001 per share, of the Company (the
"Series E Preferred Stock"), or shares of the Common Stock, par value $.001 per
share, of the Company (the "Common Stock") upon a mandatory conversion of the
Series E Preferred Stock as provided in Section 3 hereof (the Series E Preferred
Stock and the Common Stock are hereinafter collectively referred to as
"Shares"), at a price per share (the "Exercise Price") which shall initially be
$0.397644 per share and which shall be subject to adjustment as herein provided.

     1. Exercise of Warrants.

     1.1. Exercise. Subject to the terms and conditions of this Warrant, this
Warrant shall become exercisable by the Warrant Holder on April 21, 2004.

     1.2. Procedure to Exercise. This Warrant may be exercised by the Warrant
Holder, in whole or in part, by surrendering this Warrant, with the purchase
form appended hereto as Exhibit A duly executed by such Warrant Holder or by
such Warrant Holder's duly authorized attorney, at the principal office of the
Company, or at such other office or agency as the Company may designate,
accompanied by payment in full by cash, check or wire transfer of the amount
obtained by multiplying the number of Shares in the notice of exercise by the
Exercise Price (the "Purchase Price").

     1.3. Net Issue Exercise. In lieu of exercising this Warrant in the manner
provided above in Section 1.2, the Warrant Holder may elect to receive shares
equal to the value of this Warrant (or the portion thereof being converted) by
surrender of this Warrant, in whole or in part, at the principal office of the
Company together with the notice of exercise attached hereto as Exhibit A, in
which event the Company shall issue to the Warrant Holder the number of Shares
computed using the following formula (a "Net Issue Exercise"):

                                  X = Y (A - B)
                                      ---------
                                          A

Where: X = The number of Shares to be issued to the Warrant Holder.

       Y = The number of Shares purchasable under this Warrant (at the date of


                                      A-1



           such calculation) that are being converted, in whole or in part,
           hereunder.

       A = The Fair Market Value of one Share (at the date of such calculation).

       B = The Exercise Price (as adjusted to the date of such calculation).

     For purposes of this Section 1.3, if any Shares of the Warrant Holder or
any other shareholder of the Company are registered or publicly traded, then the
Fair Market Value of one Share shall mean the average of the closing bid and
asked prices of the Common Stock quoted in the over the counter market summary
or the closing price quoted by the Nasdaq National Market or any exchange on
which the Common Stock is listed, whichever is applicable, as published in the
Western Edition of The Wall Street Journal (or the Financial Times (US Edition)
if not published in The Wall Street Journal) for the business day prior to the
date of determination of fair market value. If the Shares are not traded on the
Nasdaq National Market or on an exchange, the Fair Market Value of one Share
shall be determined in good faith by the Company's Board of Directors.

     1.4. Effectiveness. Each exercise or Net Issue Exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the day on which this Warrant shall have been surrendered to the Company as
provided in Sections 1.2 or 1.3 above. At such time, the person or persons in
whose name or names any certificates for the Shares shall be issuable upon such
exercise or Net Issue Exercise as provided in Section 2 below shall be deemed to
have become the holder or holders of record of the Shares represented by such
certificates.

     2. Delivery of Stock Certificates, Etc. As soon as practicable after the
exercise or Net Issue Exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense will cause to be
issued in the name of, and delivered to, the Warrant Holder, or as such Warrant
Holder (upon payment by such Warrant Holder of any applicable transfer taxes)
may direct (i) a certificate or certificates for the number of fully paid and
non-assessable Shares to which the Warrant Holder shall be entitled upon such
exercise or Net Issue Exercise, and (ii) in case such exercise or Net Issue
Exercise is in part only, a new warrant or warrants (dated the date hereof) of
like tenor, calling in the aggregate on the face or faces thereof for the number
of Shares equal (without giving effect to any adjustment therein) to the number
of Shares called for on the face of this Warrant minus the number of Shares
purchased by the Warrant Holder upon such exercise or Net Issuance Exercise as
provided in Sections 1.2 or 1.3 herein.



     3. Adjustments Upon Mandatory Conversion of Series E Preferred Stock. Upon
any mandatory conversion of the Series E Preferred Stock pursuant to the
Company's Certificate of Incorporation, as amended or amended and restated from
time to time, this Warrant shall cease to be exercisable for shares of Series E
Preferred Stock and shall become exercisable for that number of shares of Common
Stock into which the shares of Series E Preferred Stock purchasable hereunder
would have been convertible immediately prior to such mandatory conversion, and
such that payment of the Exercise Price, or any multiple thereof, shall entitle
the Warrant Holder to receive the number of shares of Common Stock as would have
been issued upon conversion of each share of Series E Preferred Stock
purchasable hereunder immediately prior to such mandatory conversion.

     4. Stock Splits, Stock Dividends and Combinations. If the Company at any
time subdivides the outstanding shares of Series E Preferred Stock, or issues a
stock dividend on the outstanding shares of Series E Preferred Stock, the
Exercise Price in effect immediately prior to such subdivision or the issuance
of such stock dividend shall be proportionately decreased, and the number of
Shares shall be proportionately increased, and if the Company at any time
combines the outstanding shares of Series E Preferred Stock, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased, and the number of shares shall be proportionately decreased,
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be. Upon any mandatory conversion of
the Series E Preferred Stock as provided in Section 3, each reference to Series
E Preferred Stock in this Section 4 shall be deemed to be Common Stock.

     5. Conversions; Reorganizations; Reclassifications; Merger; Sales. In case
of any capital reorganization or any reclassification of the capital stock of
the Company or in case of the consolidation or merger of the Company with or
into another corporation or the conveyance of all or substantially all of the
assets of the Company to another corporation (an "M&A Transaction"), this
Warrant shall thereafter be exercisable for the number of shares of stock or
other securities or property to which a holder of the number of Shares
deliverable upon exercise of the Warrant would have been entitled to upon such
conversion, reorganization, reclassification, consolidation, merger or
conveyance and, in any such case, appropriate adjustment as determined by the
Board of Directors of the Company shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the Warrant Holder to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustments of the Exercise
Price and the number of Shares) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of the Warrant. Should the Board of
Directors make a good faith determination that compliance with the terms of this
Section will have a material adverse effect on the M&A Transaction, then the
Company may require that Warrant Holder exercise all or part of this Warrant on
the terms set forth herein.

     6. Statement of Adjustment. Whenever the Exercise Price shall be adjusted
as provided herein, the Company shall promptly file with the Secretary of the
Company or at such other place as shall be designated by the Company, a
statement, signed by its chief financial officer, showing in detail the facts
requiring such adjustment, the Exercise Price in effect before and after such
adjustment and the kind and amount of shares of capital stock, securities or
other property thereafter to be received upon the exercise of this Warrant. The
Company shall also



cause a copy of such statement to be sent in the manner specified in Section
16.3 to the Warrant Holder.

     7. Notice of Adjustment. In the event the Company shall propose to take any
action of the types described in Sections 4 or 5, the Company shall give notice
to the Warrant Holder in the manner set forth in Section 16.3, which notice
shall specify the record date, if any, with respect to any such action and the
date on which such action is to take place. Such notice shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action (to the extent such effect may be known at the date of
such notice) on the Exercise Price and the number, kind or class of shares or
other securities or property which shall be deliverable or purchasable upon the
occurrence of such action or deliverable upon the exercise hereof. In the case
of any action which would require the fixing of a record date, such notice shall
be given at least ten (10) days prior to the date so fixed, and in case of all
other actions, such notice shall be given at least twenty (20) days prior to the
taking of such proposed action. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.

     8. Taxes. The Company shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Company upon the exercise or conversion hereof; provided,
however, Company shall have no obligation to pay any documentary, stamp or other
transactional taxes on transfers initiated by Warrant Holder.

     9. No Fractional Shares. Each adjustment in the number of Shares
purchasable hereunder shall be calculated, to the nearest whole share with
fractional shares disregarded.

     10. Covenants as to Series Preferred Stock and Common Stock. The Company
covenants and agrees that the shares of Series E Preferred Stock issuable
hereunder, and the Common Stock issuable upon conversion thereof, and the Common
Stock issuable hereunder, as the case may be, will, upon issuance in accordance
with the terms hereof, be validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issuance thereof imposed by or through the Company. The Company further
covenants and agrees that the Company will at all times have authorized and
reserved, free from preemptive rights imposed by or through the Company, a
sufficient number of shares of Series E Preferred Stock and Common Stock to
provide for the exercise of the rights represented by this Warrant. The Company
further covenants and agrees that if any shares of capital stock to be reserved
for the purpose of the issuance of shares upon the exercise of this Warrant
require registration or qualification with or approval by the Securities and
Exchange Commission or any state regulatory agency under Federal or state law
(or by any analogous foreign regulatory body) before such shares may be validly
issued or delivered upon exercise, then the Company will in good faith and as
expeditiously as possible endeavor to secure such registration, qualification or
approval, as the case may be. Holders of Series E Preferred Stock and Common
Stock issuable upon exercise of this Warrant or conversion of any such shares,
as the case may be, shall be entitled to all the rights and privileges, and
bound by the obligations, of the Purchase Agreement, the Investor Rights
Agreement, and the Amended and Restated Voting Rights Agreement, all dated as of
the date hereof between the Company and the Investors (as defined therein) with
respect to such shares (the "Shareholder Agreements"). Upon exercise of the
Warrant, Warrant Holder at Company's request shall sign any counterpart
signature pages required in connection with becoming a party to such Shareholder
Agreements.



     11. No Impairment. The Company will not voluntarily avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Warrant Holder against impairment due to such event.

     12. Compliance with Securities Act.

     12.1 Unregistered Securities. The Warrant Holder acknowledges that this
Warrant and the Shares have not been registered under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any successor
legislation (the "Securities Act"), and agrees not to sell, pledge, distribute,
offer for sale, transfer or otherwise dispose of this Warrant or any Shares in
the absence of (i) an effective registration statement under the Securities Act
covering this Warrant or such Shares and registration or qualification of this
Warrant or such Shares under any applicable "blue sky" or state securities law
then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that
such registration and qualification are not required. The Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).

     12.2 Investment Representation. The Warrant Holder represents to the
Company that this Warrant is being acquired for the Warrant Holder's own account
and for the purpose of investment and not with a present view to, or for sale in
connection with, the distribution thereof, nor with any present intention of
distributing or selling the Warrant or Common Stock issuable upon exercise of
the Warrant. The Warrant Holder acknowledges that it has been afforded the
opportunity to meet with the management of the Company and to ask questions of,
and receive answers from, such management and the Company's counsel about the
business and affairs of the Company and concerning the terms and conditions of
the offering of this Warrant, and to obtain any additional information, to the
extent that the Company possessed such information or could acquire it without
unreasonable effort or expense, necessary to verify the accuracy of the
information otherwise obtained by or furnished to the Warrant Holder. The Holder
has received all information which the Warrant Holder considered necessary to
form a decision concerning the purchase of this Warrant, and no valid request to
the Company by the Warrant Holder hereof for information of any kind about the
Company has been refused or denied by the Company or remains unfulfilled as of
the date hereof. The Warrant Holder attests that it is considered to be a
sophisticated investor, is familiar with the risks inherent in speculative
investments such as in the Company, has such knowledge and experience in
financial business matters that he is capable of evaluating the merits and risk
of the investment in this Warrant and the Shares, and is able to bear the
economic risk of the investment. The Warrant Holder confirms that he is an
"accredited investor" as such term is defined in rule 501(a) of the Securities
Act.

     12.3 Investment Letter. Without limiting the generality of Section 12.1,
unless the offer and sale of any shares of Shares shall have been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue the Shares unless and until the Warrant Holder shall have executed an
investment letter in form and substance satisfactory to the Company, including a
warranty at the time of such exercise that the Warrant Holder is acquiring such
shares for its own



account, for investment and not with a view to, or for sale in connection with,
the distribution of any such shares.

     12.4 Legend. Certificates delivered to the Warrant Holder pursuant to
Section 2 shall bear the following legend or a legend in substantially similar
form (as well any such other legends as Company may reasonably require of its
shareholders generally):

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER SECURITIES LAWS. THESE
     SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
     DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
     DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
     OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE
     SECURITIES ACT OF 1933 AND ANY OTHER APPLICABLE SECURITIES LAWS, UNLESS THE
     HOLDER SHALL HAVE OBTAINED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
     THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."

     THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OR SERIES OF
     STOCK. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO
     SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
     PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR
     SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
     PREFERENCES AND/OR RIGHTS.

     THE SHARES REPRESENTED HEREBY ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER
     CONTAINED IN CERTAIN SUBSCRIPTION AND INVESTOR RIGHTS AGREEMENTS, AND MAY
     NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE
     TERMS THEREOF. THE COMPANY WILL FURNISH A COPY OF THE FULL TEXT OF SUCH
     RESTRICTIONS TO THE HOLDER OF THIS CERTIFICATE UPON WRHTEN REQUEST AND
     WITHOUT CHARGE.

     THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A CERTAIN AMENDED
     AND RESTATED VOTING AGREEMENT DATED AS OF ______, 20__ BY AND AMONG THE
     COMPANY AND THE STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH AGREEMENT IS
     AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY OR MAY BE OBTAINED
     FROM THE COMPANY UPON REQUEST AND WITHOUT CHARGE.

     13. Transferability. Without the prior written consent of the Company,
neither the Warrant nor the shares issuable upon exercise thereof (the "Warrant
Shares") shall be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) or be subject to execution, attachment or similar
process. Any attempted transfer, assignment, pledge,



hypothecation or other disposition of the Warrant, Warrant Shares, or of any
rights granted hereunder contrary to the provisions of this Section 13, or the
levy of any attachment or similar process upon the Warrant, Warrant Shares, or
such rights, shall be null and void. If, in connection with a registration
statement filed by the Company pursuant to the Securities Act of 1933, the
Company or its underwriter so requests, the Warrant Holder will agree not to
sell any Warrant Shares for a period not to exceed 180 days following the
effectiveness of such registration.

     14. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably in its discretion impose (which shall in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed.

     15. Register of Warrants. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Warrant Holder), a register for the Warrants in which the Company shall record
the name and address of the person in whose name a Warrant has been issued, as
well as the name and address of each transferee and each prior owner of such
Warrant.

     16. Miscellaneous.

     16.1 Waivers and Amendments. This Warrant or any provisions hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the Company and by Warrant Holders who hold or have the right to acquire at
least two-thirds of the Shares at such time issued or issuable upon exercise of
the Warrants, provided that no change, addition, omission or waiver shall be
made without the written consent of the Warrant Holder(s) which affects (i) the
number of Shares issuable on exercise of this Warrant, (ii) the Exercise Price
or (iii) any other provision other than in a manner in which all the Warrants
are affected.

     16.2 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware (US) without
giving effect to the conflicts of laws principles thereof.

     16.3 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be hand delivered, sent by facsimile or
other electronic medium, or mailed, postage prepaid, or sent by reputable
overnight courier, delivery charges prepaid, addressed as follows or to such
other address as may be furnished in writing to the other parties hereto:

If to the Warrant Holder: Three Crowns Capital (Bermuda) Ltd.
                          Suite 1139
                          48 Par-La-Ville Road
                          Hamilton HM11
                          Bermuda
                          441-293 7107 (Fax)
                          Attention: Peter Svennilson

With a copy to:           Conyers Dill & Pearman



                          Clarendon House
                          2 Church Street
                          Hamilton HM 11
                          Bermuda
                          441-292-4720 (Fax)
                          Attention: Peter A. S. Pearman

And:                      Nixon Peabody LLP
                          101 Federal Street
                          Boston, MA 02110
                          617-345-1300 (Fax)
                          Attention: Carter S. Bacon, Esq.

If to the Company:        PTC Therapeutics, Inc.
                          Attention: Legal Department
                          100 Corporate Court
                          Middlesex Business Center
                          South Plainfield, NJ 07080

                          with an email copy to: legal@ptcbio.com

With a copy to:           Wilmer Cutler Pickering Hale and Dorr LLP
                          60 State Street
                          Boston, Massachusetts 02109
                          Attn: David E. Redlick, Esq.

     All such notices and communications shall be deemed to have been duly given
(i) five (5) business days after being deposited in the mail, postage prepaid if
mailed, (ii) one (1) business day after being sent by overnight courier, (iii)
when receipt acknowledged if telecopied and (iv) upon receipt if delivered by
hand.

     16.4 Headings. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the terms hereof.

     16.5 Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

     16.6 Currency. All currency references herein are to United States Dollars.

     16.7 Closing of Books. The Company will at no time close its transfer books
against the transfer of any Warrant or of any Shares issued or issuable upon the
exercise of the Warrant in a manner which interferes with the timely exercise of
this Warrant.

     16.8 No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the Warrant Holder to any voting rights or other rights as a stockholder
of the Company prior to the



exercise or conversion of the Warrant, provided that nothing herein shall be
construed to limit or impair other rights that the Warrant Holder may have under
this Warrant or otherwise. No provision of this Warrant, in the absence of
affirmative action by the Warrant Holder to purchase the Shares, and no mere
enumeration herein of the rights or privileges of the Warrant Holder, shall give
rise to any liability of such Warrant Holder for the Exercise Price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.



     IN WITNESS WHEREOF, the undersigned has caused this Warrant to be executed
as an instrument under seal.

                                      PTC Therapeutics, Inc.


                                      By: /s/ MARK E. BOULDING
                                          ------------------------------------
                                      Name: Mark E. Boulding
                                            ----------------------------------
                                      Title: SVP, Business Development and Legal
                                             ---------------------------------

AGREED AND ACKNOWLEDGED:

THREE CROWNS CAPITAL (BERMUDA) LTD.


By: /s/ HARALD EKMAN
    ---------------------------------
Name: Harald Ekman
      -------------------------------
Title: President
       ------------------------------



                                    EXHIBIT A

                    NOTICE OF EXERCISE OR NET ISSUE EXERCISE

                                                         Date: ________ __, 20__

YY

Gentlemen:

The undersigned hereby elects to exercise or Net Issue Exercise the enclosed
Warrant issued by YY (the "Company") and dated as of ____ __, 2003.

     The undersigned elects to:

[ ]  Exercise the Warrant and to purchase thereunder _____ shares of the Series
     __ Preferred Stock of the Company (the "Shares") at an exercise price of
     _____ per Share for an aggregate purchase price of _________ (the "Purchase
     Price"). Pursuant to the terms of the Warrant, the undersigned has
     delivered the Purchase Price herewith in full.

[ ]  Net Issue Exercise ____% of the value of the Warrant at the current
     Exercise Price (as defined in the Warrant) of ____ per Share.

                                        Very truly yours,


                                        ----------------------------------------

                                                                    Exhibit 10.1
                             PTC THERAPEUTICS, INC.
                           SIXTH AMENDED AND RESTATED
            1998 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN

1.   DEFINITIONS. Unless otherwise specified or unless the context otherwise
     requires, the following terms, as used in this Sixth Amended and Restated
     PTC Therapeutics, Inc. 1998 Employee, Director and Consultant Stock Option
     Plan, have the following meanings:
          Administrator means the Board of Directors, unless it has delegated
          power to act on its behalf to the Committee, in which case the
          Administrator means the Committee.

          Affiliate means a corporation which, for purposes of Section 424 of
          the Code, is a parent or subsidiary of the Company, direct or
          indirect.

          Board of Directors means the Board of Directors of the Company.
          Certificate means an Option Certificate.

          Code means the United States Internal Revenue Code of 1986, as
          amended.

          Committee means the committee of the Board of Directors to which the
          Board of Directors has delegated power to act under or pursuant to the
          provisions of the Plan.

          Common Stock means shares of the Company's common stock, $.001 par
          value per share.

          Company means PTC Therapeutics, Inc., a Delaware corporation.

          Disability or Disabled means permanent and total disability as defined
          in Section 22(e)(3) of the Code.

          Fair Market Value of a Share of Common Stock means:
          (a) If the Common Stock is listed on a national securities exchange or
          traded in the over-the-counter market and sales prices are regularly
          reported for the Common Stock, the closing or last price of the Common
          Stock on the Composite Tape or other comparable reporting system for
          the trading day immediately preceding the applicable date;
          (b) If the Common Stock is not traded on a national securities
          exchange but is traded on the over-the-counter market, if sales prices
          are not regularly reported for the Common Stock for the trading day
          referred to in clause (a), and if bid and asked prices for the Common
          Stock are regularly reported, the mean between the bid and the asked
          price for the Common Stock at the close of trading in the
          over-the-counter market for the trading day on which Common Stock was
          traded immediately preceding the applicable date; and
          (c) If the Common Stock is neither listed on a national securities
          exchange nor traded in the over-the-counter market, such value as the
          Administrator, in good faith, shall determine.
          ISO means an option meant to qualify as an incentive stock option
          under Section 422 of the Code.

          Key Employee means any employee of the Company or of an Affiliate
          (including, without limitation, an employee who is also serving as an
          officer or director of the Company or of an Affiliate), or otherwise
          designated by the Administrator to be eligible to be granted one or
          more Options under the Plan.

          Non-Qualified Option means an option which is not intended to qualify
          as an ISO.

          Option means an ISO or Non-Qualified Option granted under the Plan.
          Option Certificate means a certificate delivered to the Participant by
          the Company pursuant to the Plan, in such form as the Administrator
          shall approve, which sets forth the terms and conditions of a Stock
          Option Grant.

          Participant means a Key Employee, director or consultant to whom one
          or more Options are granted under the Plan. As used herein,
          "Participant" shall include "Participant's Survivors" where the
          context requires.

          Plan means this Sixth Amended and Restated PTC Therapeutics, Inc. 1998
          Employee, Director and Consultant Stock Option Plan.

          Shares means shares of the Common Stock as to which Options have been
          or may be granted under the Plan or any shares of capital stock into
          which the Shares are changed or for which they are exchanged within
          the provisions of Paragraph 3 of the Plan. The Shares issued upon
          exercise of Options granted under the Plan may be authorized and
          unissued shares or shares held by the Company in its treasury, or
          both.

          Stock Option Grant means a grant of an option to purchase Shares under
          the Plan in either the form of an ISO or Non-Qualified Option.

          Survivors means a deceased Participant's legal representatives and/or
          any person or persons who acquired the Participant's rights to an
          Option by will or by the laws of descent and distribution.

2.   PURPOSES OF THE PLAN. The Plan is intended to encourage ownership of Shares
     by Key Employees and directors of and certain consultants to the Company in
     order to attract such people, to induce them to work for the benefit of the
     Company or of an Affiliate and to provide additional incentive for them to
     promote the success of the Company or of an Affiliate. The Plan provides
     for the granting of Stock Option Grants.

3.   SHARES SUBJECT TO THE PLAN.
            a.  The number of Shares which may be issued from time to time
                pursuant to this Plan shall be equal to Two Million Four Hundred
                Twenty-six Thousand Eight (2,426,008), or the equivalent of such
                numbers of Shares after the Administrator, in its sole
                discretion, has interpreted the effect of any stock split, stock
                dividend, combination, recapitalization or similar transaction
                in accordance with Paragraph 16 of the Plan;

            b.  The maximum number of Shares that may be issued as ISOs pursuant
                to this Plan shall be equal to Two Million Three Hundred
                Twenty-six Thousand Eight (2,326,008), or the equivalent of such
                numbers of Shares after the Administrator, in its sole
                discretion, has interpreted the effect of any stock split, stock
                dividend, combination, recapitalization or similar transaction
                in accordance with Paragraph 16 of the Plan; and

            c.  If an Option ceases to be "outstanding", in whole or in part,
                the Shares which were subject to such Option shall be available
                for the granting of other Options under the Plan. Any Option
                shall be treated as "outstanding" until such Option is exercised
                in full, or terminates or expires under the provisions of the
                Plan, or by agreement of the parties to the pertinent Option
                Certificate.

4.   ADMINISTRATION OF THE PLAN. The Administrator of the Plan will be the Board
     of Directors, except to the extent the Board of Directors delegates its
     authority to the Committee, in which case the Committee shall be the
     Administrator. Subject to the provisions of the Plan, the Administrator is
     authorized to:

          a.   Interpret the provisions of the Plan or of any Stock Option Grant
               or Option Certificate and to make all rules and determinations
               which it deems necessary or advisable for the administration of
               the Plan;
          b.   Determine which employees of the Company or of an Affiliate shall
               be designated as Key Employees and which of the Key Employees,
               directors and consultants shall be granted Options;
          c.   Determine the number of Shares for which an Option or Options
               shall be granted, provided, however, that in no event shall
               Options to purchase more than 700,000 Shares be granted to any
               Participant in any fiscal year; and
          d.   Specify the terms and conditions upon which an Option or Options
               may be granted


     provided, however, that all such interpretations, rules, determinations,
     terms and conditions shall be made and prescribed in the context of
     preserving the tax status under Section 422 of the Code of those Options
     which are designated as ISOs. Subject to the foregoing, the interpretation
     and construction by the Administrator of any provisions of the Plan or of
     any Option granted under it shall be final, unless otherwise determined by
     the Board of Directors, if the Administrator is the Committee.

5.   ELIGIBILITY FOR PARTICIPATION. The Administrator will, in its sole
     discretion, name the Participants in the Plan, provided, however, that each
     Participant must be a Key Employee, director or consultant of the Company
     or of an Affiliate at the time an Option is granted. Notwithstanding the
     foregoing, the Administrator may authorize the grant of an Option to a
     person not then an employee, director or consultant of the Company or of an
     Affiliate; provided, however, that the actual grant of such Option shall be
     conditioned upon such person becoming eligible to become a Participant at
     or prior to the time of the delivery of the Option Certificate evidencing
     such Option. ISOs may be granted only to Key Employees. Non-Qualified
     Options may be granted to any Key Employee, director or consultant of the
     Company or an Affiliate. The granting of any Option to any individual shall
     neither entitle that individual to, nor disqualify him or her from,
     participation in any other grant of Options.

6.   TERMS AND CONDITIONS OF OPTIONS. Each Stock Option Grant shall be set forth
     in writing in an Option Certificate, duly executed by the Company and, to
     the extent required by law or requested by the Company, by the Participant.
     The Administrator may provide that Options be granted subject to such terms
     and conditions, consistent with the terms and conditions specifically
     required under this Plan, as the Administrator may deem appropriate
     including, without limitation, subsequent approval by the shareholders of
     the Company of this Plan or any amendments thereto.

          A. Non-Qualified Options: Each Option intended to be a Non-Qualified
          Option shall be subject to the terms and conditions which the
          Administrator determines to be appropriate and in the best interest of
          the Company, subject to the following minimum standards for any such
          Non-Qualified Option:

               a.   Option Price: Each Option Certificate shall state the option
                    price (per share) of the Shares covered by each Stock Option
                    Grant, which option price shall be determined by the
                    Administrator but shall not be less than 85% of the Fair
                    Market Value per share of Common Stock;

               b.   Each Option Certificate shall state the number of Shares to
                    which it pertains;

               c.   Each Option Certificate shall state the date or dates on
                    which it first is exercisable and the date after which it
                    may no longer be exercised, and may provide that the Option
                    rights accrue or become exercisable in installments over a
                    period of months or years, or upon the occurrence of certain
                    conditions or the attainment of stated goals or events, or
                    through other circumstances or programs approved by the
                    Administrator (the "Vesting Provisions");

               d.   The provisions of Paragraph 6(A)(c) above notwithstanding,
                    with the consent of the Administrator, the vesting
                    provisions specified in a Participant's employment agreement
                    shall be the Vesting Provisions that apply to the relevant
                    Non-Qualified Options; and

               e.   Exercise of any Option may be conditioned upon the
                    Participant's execution of a Share purchase agreement in
                    form satisfactory to the Administrator providing for certain
                    protections for the Company and its other shareholders,
                    including requirements that:

                    i.   The Participant's or the Participant's Survivors' right
                         to sell or transfer the Shares may be restricted; and

                    ii.  The Participant or the Participant's Survivors may be
                         required to execute letters of investment intent and
                         must also acknowledge that the Shares will bear legends
                         noting any applicable restrictions.

          B. ISOs: Each Option intended to be an ISO, in accordance with Section
          422 of the Code, shall be issued only to a Key Employee and be subject
          to the following terms and conditions, with such additional
          restrictions or changes as the Administrator determines are
          appropriate but not in conflict with Section 422 of the Code and
          relevant regulations and rulings of the Internal Revenue Service:

               a.   Minimum standards: The ISO shall meet the minimum standards
                    required of Non-Qualified Options, as described in Paragraph
                    6(A) above, except clause (a) thereunder;

               b.   Option Price: Immediately before the ISO is granted, if the
                    Participant owns, directly or by reason of the applicable
                    attribution rules in Section 424(d) of the Code:

                    i.   Ten percent (10%) or less of the total combined voting
                         power of all classes of stock of the Company or an
                         Affiliate, the Option price per share of the Shares
                         covered by each ISO shall not be less than one hundred
                         percent (100%) of the Fair Market Value per share of
                         the Shares on the date of the Stock Option Grant; or

                    ii.  More than ten percent (10%) of the total combined
                         voting power of all classes of stock of the Company or
                         an Affiliate, the Option price per share of the Shares
                         covered by each ISO shall not be less than one hundred
                         ten percent (110%) of the said Fair Market Value on the
                         date of the Stock Option Grant;

               c.   Term of Option: For Participants who own:

                    i.   Ten percent (10%) or less of the total combined voting
                         power of all classes of stock of the Company or an
                         Affiliate, each ISO shall terminate not more than ten
                         (10) years from the date of the Stock Option Grant or
                         at such earlier time as the Option Certificate may
                         provide; or

                    ii.  More than ten percent (10%) of the total combined
                         voting power of all classes of stock of the Company or
                         an Affiliate, each ISO shall terminate not more than
                         five (5) years from the date of the Stock Option Grant
                         or at such earlier time as the Option Certificate may
                         provide;

               d.   Limitation on Yearly Exercise: The Option Certificates shall
                    restrict the amount of ISOs which may be exercisable in any
                    calendar year (under this or any other ISO plan of the
                    Company or an Affiliate) so that the aggregate Fair Market
                    Value (determined at the time each ISO is granted) of the
                    stock with respect to which ISOs are exercisable for the
                    first time by the Participant in any calendar year does not
                    exceed one hundred thousand dollars ($100,000), provided
                    that this subparagraph (d) shall have no force or effect if
                    its inclusion in the Plan is not necessary for Options
                    issued as ISOs to qualify as ISOs pursuant to Section 422(d)
                    of the Code; and

               e.   Intention to be Treated as an ISO: It is the Company's
                    intent that an ISO qualify for the favorable tax treatment
                    provided to holders of Options that meet the standards of
                    Section 422 of the Code. Any provision of this Plan, an
                    Option Certificate or any other relevant document which
                    conflicts with the Code so that an Option intended to be an
                    ISO would not be deemed an ISO is null and void and any
                    ambiguities shall be resolved so that the Option qualifies
                    as an ISO. Nonetheless, if the Option is determined not to
                    be an ISO, the Participant shall be deemed to acknowledge
                    and agree that neither the Company nor any Affiliate is
                    responsible to compensate him or her or otherwise make up
                    for the treatment of the Option as a Non-






                    Qualified Option and not as an ISO. The Participant is
                    deemed to have been advised to consult with his or her own
                    tax advisors regarding the tax effects of the Option and the
                    requirements necessary to obtain favorable tax treatment
                    under Section 422 of the Code, including, but not limited
                    to, holding period requirements.

7.   EXERCISE OF OPTIONS AND ISSUE OF SHARES. An Option (or any part or
     installment thereof) shall be exercised by giving written notice to the
     Company at its principal executive office address, together with provision
     for payment of the full purchase price in accordance with this Paragraph
     for the Shares as to which the Option is being exercised, and upon
     compliance with any other condition(s) set forth in the Option Certificate.
     Such written notice shall be signed by the person exercising the Option,
     shall state the number of Shares with respect to which the Option is being
     exercised and shall contain any representation required by the Plan or the
     Option Certificate. Payment of the purchase price for the Shares as to
     which such Option is being exercised shall be made (a) in United States
     dollars in cash or by check, or (b) at the discretion of the Administrator,
     through delivery of shares of Common Stock having a Fair Market Value equal
     as of the date of the exercise to the cash exercise price of the Option, or
     (c) at the discretion of the Administrator, by having the Company retain
     from the shares otherwise issuable upon exercise of the Option, a number of
     shares having a Fair Market Value equal as of the date of exercise to the
     exercise price of the Option, or (d) at the discretion of the
     Administrator, by delivery of the grantee's personal recourse note bearing
     interest payable not less than annually at no less than 100% of the
     applicable Federal rate, as defined in Section 1274(d) of the Code, or (e)
     at the discretion of the Administrator, in accordance with a cashless
     exercise program established with a securities brokerage firm, and as
     approved by the Administrator, or (f) at the discretion of the
     Administrator, by any combination of (a), (b), (c), (d) and (e) above.
     Notwithstanding the foregoing, the Administrator shall accept only such
     payment on exercise of an ISO as is permitted by Section 422 of the Code.

     The Company shall then reasonably promptly deliver the Shares as to which
     such Option was exercised to the Participant (or to the Participant's
     Survivors, as the case may be). In determining what constitutes "reasonably
     promptly," it is expressly understood that the issuance and delivery of the
     Shares may be delayed by the Company in order to comply with any law or
     regulation (including, without limitation, state securities or "blue sky"
     laws) which requires the Company to take any action with respect to the
     Shares prior to their issuance. The Shares shall, upon delivery, be
     evidenced by an appropriate certificate or certificates for fully paid,
     non-assessable Shares.

     The Administrator shall have the right to accelerate the date of exercise
     of any installment of any Option; provided that the Administrator shall not
     accelerate the exercise date of any installment of any Option granted to
     any Key Employee as an ISO (and not previously converted into a
     Non-Qualified Option pursuant to Paragraph 19) if such acceleration would
     violate the annual vesting limitation contained in Section 422(d) of the
     Code, as described in Paragraph 6.B.d.

     The Administrator may, in its discretion, amend any term or condition of an
     outstanding Stock Option Grant provided (i) such term or condition as
     amended is permitted by the Plan, (ii) any such amendment shall be made
     only with the consent of the Participant to whom the Option was granted, or
     in the event of the death of the Participant, the Participant's Survivors,
     if the amendment is adverse to the Participant, and (iii) any such
     amendment of any ISO shall be made only after the Administrator, after
     consulting the counsel for the Company, determines whether such amendment
     would constitute a "modification" of any Option which is an ISO (as that
     term is defined in Section 424(h) of the Code) or would cause any adverse
     tax consequences for the holder of such ISO.

8.   RIGHTS AS A SHAREHOLDER. No Participant to whom an Option has been granted
     shall have rights as a shareholder with respect to any Shares covered by
     such Option, except after due exercise of the Option and tender of the full
     purchase price, if any, for the Shares being purchased pursuant to such
     exercise and registration of the Shares in the Company's share register in
     the name of the Participant.

9.   ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS. By its terms, an Option
     granted to a Participant shall not be transferable by the Participant other
     than (i) by will or by the laws of descent and distribution, (ii) as
     approved by the Administrator in its sole discretion and set forth in the
     applicable Option Certificate, (iii) if approved by the Administrator in
     its sole discretion, through establishment of blind trusts, family limited
     partnerships, or other estate planning vehicles wherein the Participant or
     his direct descendants are the primary beneficiary, (iv) if approved by the
     Administrator in its sole discretion, in accordance with the division of
     property rights set forth in an authorized settlement agreement arising
     from the Participant's divorce, or (v) under any other circumstances that
     are approved by the Administrator in its sole discretion. Notwithstanding
     the foregoing, an ISO transferred in accordance with subsections 9(ii)-(v)
     above shall no longer qualify as an incentive stock option under Section
     422 of the Code. The designation of a beneficiary of an Option by a
     Participant, with the prior approval of the Administrator and in such form
     as the Administrator shall prescribe, shall not be deemed a transfer
     prohibited by this Paragraph. Except as provided above, during the
     Participant's lifetime, an Option shall only be exercisable by such
     Participant (or by his or her legal representative) and shall not be
     assigned, pledged or hypothecated in any way (whether by operation of law
     or otherwise) and shall not be subject to execution, attachment or similar
     process. Any attempted transfer, assignment, pledge, hypothecation or other
     disposition of any Option or of any rights granted thereunder contrary to
     the provisions of this Plan, or the levy of any attachment or similar
     process upon an Option, shall be null and void.

     The Participant is required to notify the Company in writing immediately
     after the Participant makes a Disqualifying Disposition of any of the
     Shares acquired pursuant to the exercise of the Option. A Disqualifying
     Disposition is defined in Section 424(c) of the Code and includes any
     disposition (including any sale) of such Shares before the later of (a) two
     years after the date the Participant was granted the Option or (b) one year
     after the date the Participant acquired Shares by exercising the Option,
     except as otherwise provided in Section 424(c) of the Code. If the
     Participant has died before the Shares are sold, these holding period
     requirements do not apply and no Disqualifying Disposition can occur
     thereafter.

10.  EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
     DISABILITY. Except as otherwise provided in the pertinent Option
     Certificate, in the event of a termination of service (whether as an
     employee, director or consultant) with the Company or an Affiliate before
     the Participant has exercised an Option, the following rules apply:

          a.   A Participant who ceases to be an employee, director or
               consultant of the Company or of an Affiliate (for any reason
               other than termination "for cause", Disability, or death for
               which events there are special rules in Paragraphs 11, 12, and
               13, respectively), may exercise any Option granted to him or her
               (i) within three (3) months of such termination to the extent
               that the Option is exercisable on the date of such termination of
               service, but only if the Administrator has so designated in the
               pertinent Option Certificate, or (ii) over such other term as the
               Administrator shall determine in its sole discretion;

          b.   Except as provided in Subparagraph (c) below, or Paragraph 12 or
               13, in no event may an Option Certificate provide, if an Option
               is intended to be an ISO, that the time for exercise be later
               than three (3) months after the Participant's termination of
               employment;





          c.   The provisions of this Paragraph, and not the provisions of
               Paragraph 12 or 13, shall apply to a Participant who subsequently
               becomes Disabled or dies after the termination of employment,
               director status or consultancy in all cases with the Company or
               an Affiliate, provided, however, in the case of a Participant's
               Disability or death within three (3) months after the termination
               of employment, director status or consultancy, the Participant or
               the Participant's Survivors may exercise the Option within one
               (1) year after the date of the Participant's termination of
               employment, but in no event after the date of expiration of the
               term of the Option;

          d.   Notwithstanding anything herein to the contrary, if subsequent to
               a Participant's termination of employment, termination of
               director status or termination of consultancy, but prior to the
               exercise of an Option, the Board of Directors determines that,
               either prior or subsequent to the Participant's termination, the
               Participant engaged in conduct which would constitute "cause",
               then such Participant shall forthwith cease to have any right to
               exercise any Option;

          e.   A Participant to whom an Option has been granted under the Plan
               who is absent from work with the Company or with an Affiliate
               because of temporary disability (any disability other than a
               permanent and total Disability as defined in Paragraph 1 hereof),
               or who is on leave of absence for any purpose, shall not, during
               the period of any such absence, be deemed, by virtue of such
               absence alone, to have terminated such Participant's employment,
               director status or consultancy with the Company or with an
               Affiliate, except as the Administrator may otherwise expressly
               provide; and

          f.   Except as required by law or as set forth in the pertinent Option
               Certificate, Options granted under the Plan shall not be affected
               by any change of a Participant's status within or among the
               Company and any Affiliates, so long as the Participant continues
               to be an employee, director or consultant of the Company or any
               Affiliate.

11.  EFFECT OF TERMINATION OF SERVICE "FOR CAUSE". Except as otherwise provided
     in the pertinent Option Certificate, the following rules apply if the
     Participant's service (whether as an employee, director or consultant) with
     the Company or an Affiliate is terminated "for cause" prior to the time
     that all his or her outstanding Options have been exercised:

          a.   All outstanding and unexercised Options as of the time the
               Participant is notified his or her service is terminated "for
               cause" will immediately be forfeited;

          b.   In addition to any definition of the term "for cause" set forth
               in any employment agreement between the Company and the
               Participant, for purposes of this Plan, the term "cause" shall
               include, without limitation (i) the failure of the Participant to
               perform any of his material duties to the Company or any of its
               Affiliates, (ii) the conviction of the Participant of any felony
               involving moral turpitude, (iii) any acts of fraud or
               embezzlement by the Participant involving the Company or any of
               its Affiliates, (iv) violation of any federal, state or local
               law, or administrative regulation related to the business of the
               Company or any of its Affiliates, (v) a conflict of interest,
               (vi) conduct that could result in publicity reflecting
               unfavorably on the Company or any of its Affiliates in a material
               way, (vii) failure to comply with the policies of the Company or
               any of its Affiliates, (viii) the unauthorized disclosure of
               confidential information, or (ix) a breach of the terms of any
               employment agreement, confidentiality agreement, non-competition
               and non-solicitation agreement or any other agreement between the
               Participant and the Company or any of its Affiliates, after
               giving effect to the notification provisions, if any, and the
               mechanisms to remedy or cure a breach, if appropriate, as
               described in any such agreement. The determination of the
               Administrator as to the existence of "cause" will be conclusive
               on the Participant and the Company; and

          c.   "Cause" is not limited to events which have occurred prior to a
               Participant's termination of service, nor is it necessary that
               the Administrator's finding of "cause" occur prior to
               termination. If the Administrator determines, subsequent to a
               Participant's termination of service but prior to the exercise of
               an Option, that either prior or subsequent to the Participant's
               termination the Participant engaged in conduct which would
               constitute "cause," then the right to exercise any Option is
               forfeited.

12.  EFFECT OF TERMINATION OF SERVICE FOR DISABILITY. Except as otherwise
     provided in the pertinent Option Certificate, a Participant who ceases to
     be an employee, director or consultant of the Company or of an Affiliate by
     reason of Disability may exercise any Option granted to such Participant:

          a.   To the extent that the Option has become exercisable according to
               the vesting period of such Option as of the date of Disability;
               and

          b.   To the extent of a pro rata portion through the date of
               Disability of any additional Options that would have become
               exercisable on the next vesting date had the Participant not
               become Disabled. The proration shall be based upon the number of
               days accrued in the current vesting period prior to the date of
               Disability.

     A Disabled Participant may exercise such rights only within the period
     ending one (1) year after the date of the Participant's termination of
     employment, directorship or consultancy, as the case may be,
     notwithstanding that the Participant might have been able to exercise the
     Option as to some or all of the Shares on a later date if the Participant
     had not become disabled and had continued to be an employee, director or
     consultant or, if earlier, within the originally prescribed term of the
     Option.

     The Administrator shall make the determination both of whether Disability
     has occurred and the date of its occurrence (unless a procedure for such
     determination is set forth in another agreement between the Company and
     such Participant, in which case such procedure shall be used for such
     determination). If requested, the Participant shall be examined by a
     physician selected or approved by the Administrator, the cost of which
     examination shall be paid for by the Company.

13.  EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT. Except as
     otherwise provided in the pertinent Option Certificate, in the event of the
     death of a Participant while the Participant is an employee, director or
     consultant of the Company or of an Affiliate, the Participant's Survivors
     may exercise any outstanding Option granted to the Participant:

          a.   To the extent that the Option has become exercisable according to
               the vesting period of such Option as of the date of death; and

          b.   To the extent of a pro rata portion through the date of death of
               any additional Options that would have become exercisable on the
               next vesting date had the Participant not died. The proration
               shall be based upon the number of days accrued in the current
               vesting period prior to the date of death.
     If the Participant's Survivors wish to exercise the Option, they must take
     all necessary steps to exercise the Option within one (1) year after the
     date of death of such Participant, notwithstanding that the decedent might
     have been able to exercise the Option as to some or all of the Shares on a
     later date if he or she had not died and had continued to be an employee,
     director or consultant or, if earlier, within the originally prescribed
     term of the Option.




14.  PURCHASE FOR INVESTMENT. Unless the offering and sale of the Shares to be
     issued upon the particular exercise of an Option shall have been
     effectively registered under the Securities Act of 1933, as now in force or
     hereafter amended (the "1933 Act"), the Company shall be under no
     obligation to issue the Shares covered by such exercise unless and until
     the following conditions have been fulfilled:

          a.   The person(s) who exercise(s) such Option shall warrant to the
               Company, prior to the receipt of such Shares, that such person(s)
               are acquiring such Shares for their own respective accounts, for
               investment, and not with a view to, or for sale in connection
               with, the distribution of any such Shares, in which event the
               person(s) acquiring such Shares shall be bound by the provisions
               of the following legend which shall be endorsed upon the
               certificate(s) evidencing their Shares issued pursuant to such
               exercise or such grant:

               "The shares represented by this certificate have been taken for
               investment, and they may not be sold or otherwise transferred by
               any person, including a pledgee, unless (1) either (a) a
               Registration Statement with respect to such shares shall be
               effective under the Securities Act of 1933, as amended, or (b)
               the Company shall have received an opinion of counsel
               satisfactory to it that an exemption from registration under such
               Act is then available, and (2) there shall have been compliance
               with all applicable state securities laws."; and

          b.   At the discretion of the Administrator, the Company shall have
               received an opinion of its counsel that the Shares may be issued
               upon such particular exercise in compliance with the 1933 Act
               without registration thereunder.

15.  DISSOLUTION OR LIQUIDATION OF THE COMPANY. Upon the dissolution or
     liquidation of the Company, all Options granted under this Plan which as of
     such date shall not have been exercised will terminate and become null and
     void; provided, however, that if the rights of a Participant or a
     Participant's Survivors have not otherwise terminated and expired, the
     Participant or the Participant's Survivors will have the right immediately
     prior to such dissolution or liquidation to exercise any Option to the
     extent that the Option is exercisable as of the date immediately prior to
     such dissolution or liquidation.

16.  ADJUSTMENTS. Upon the occurrence of any of the following events, a
     Participant's rights with respect to any Option granted to him or her
     hereunder which has not previously been exercised in full shall be adjusted
     as hereinafter provided, unless otherwise specifically provided in the
     pertinent Option Certificate or, subject to the consent of the
     Administrator, as otherwise specified in an employment or other agreement
     between the Company and the Participant:

                    A. Stock Dividends and Stock Splits. If (i) the shares of
                    Common Stock shall be subdivided or combined into a greater
                    or smaller number of shares or if the Company shall issue
                    any shares of Common Stock as a stock dividend on its
                    outstanding Common Stock, or (ii) additional shares or new
                    or different shares or other securities of the Company or
                    other non-cash assets are distributed with respect to such
                    shares of Common Stock, the number of shares of Common Stock
                    deliverable upon the exercise of such Option may be
                    appropriately increased or decreased proportionately, and
                    appropriate adjustments may be made in the purchase price
                    per share to reflect such events. The number of Shares
                    subject to the limitation in Paragraph 4(c) shall also be
                    proportionately adjusted upon the occurrence of such events.

                    B. Consolidations or Mergers. If the Company is to be
                    consolidated with or acquired by another entity in a merger,
                    sale of all or substantially all of the Company's assets or
                    otherwise (an "Acquisition"), the Administrator or the board
                    of directors of any entity assuming the obligations of the
                    Company hereunder (the "Successor Board"), shall, as to
                    outstanding Options, either (i) make appropriate provision
                    for the continuation of such Options by substituting on an
                    equitable basis for the Shares then subject to such Options,
                    including without limitation any provisions relating to the
                    acceleration of vesting, either the consideration payable
                    with respect to the outstanding shares of Common Stock in
                    connection with the Acquisition or securities of any
                    successor or acquiring entity; or (ii) upon written notice
                    to the Participants, provide that all vested Options must be
                    exercised (either to the extent then exercisable, including
                    Options subject to accelerated vesting provisions, or, at
                    the discretion of the Administrator, all Options being made
                    fully exercisable for purposes of this Subparagraph), at the
                    end of which period the Options shall terminate; or (iii)
                    terminate all Options in exchange for a cash payment equal
                    to the excess of the Fair Market Value of the Shares subject
                    to such Options (either to the extent then exercisable or,
                    at the discretion of the Administrator, all Options being
                    made fully exercisable, including Options subject to
                    accelerated vesting provisions, for purposes of this
                    Subparagraph) over the exercise price thereof.

                    C. Recapitalization or Reorganization. In the event of a
                    recapitalization or reorganization of the Company (other
                    than a transaction described in Subparagraph B above)
                    pursuant to which securities of the Company or of another
                    corporation are issued with respect to the outstanding
                    shares of Common Stock, a Participant upon exercising an
                    Option shall be entitled to receive for the purchase price,
                    if any, paid upon such exercise the securities which would
                    have been received if such Option had been exercised prior
                    to such recapitalization or reorganization.

                    D. Modification of ISOs. Notwithstanding the foregoing, any
                    adjustments made pursuant to Subparagraph A, B or C above
                    with respect to ISOs shall be made only after the
                    Administrator, after consulting with counsel for the
                    Company, determines whether such adjustments would
                    constitute a "modification" of such ISOs (as that term is
                    defined in Section 424(h) of the Code) or would cause any
                    adverse tax consequences for the holders of such ISOs. If
                    the Administrator determines that such adjustments made with
                    respect to ISOs would constitute a modification of such
                    ISOs, it may refrain from making such adjustments, unless
                    the holder of an ISO specifically requests in writing that
                    such adjustment be made and such writing indicates that the
                    holder has full knowledge of the consequences of such
                    "modification" on his or her income tax treatment with
                    respect to the ISO.


17.  ISSUANCES OF SECURITIES. Except as expressly provided herein, no issuance
     by the Company of shares of stock of any class, or securities convertible
     into shares of stock of any class, shall affect, and no adjustment by
     reason thereof shall be made with respect to, the number or price of shares
     subject to Options. Except as expressly provided herein, no adjustments
     shall be made for dividends paid in cash or in property (including without
     limitation, securities) of the Company prior to any issuance of Shares
     pursuant to a Stock Option Grant.

18.  FRACTIONAL SHARES. No fractional shares shall be issued under the Plan and
     the person exercising such right shall receive from the Company cash in
     lieu of such fractional shares equal to the Fair Market Value thereof.

19.  CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs. The
     Administrator, at the written request of any Participant, may in its
     discretion take such actions as may be necessary to convert such
     Participant's ISOs (or any portions thereof) that have not been exercised
     on the date of conversion into Non-Qualified Options at any time prior to
     the expiration of such ISOs, regardless of whether the Participant is an
     employee of the Company or an Affiliate at the time of such conversion.
     Such actions may include, but not be limited to,




     extending the exercise period or reducing the exercise price of the
     appropriate installments of such Options. At the time of such conversion,
     the Administrator (with the consent of the Participant) may impose such
     conditions on the exercise of the resulting Non-Qualified Options as the
     Administrator in its discretion may determine, provided that such
     conditions shall not be inconsistent with this Plan. Nothing in the Plan
     shall be deemed to give any Participant the right to have such
     Participant's ISOs converted into Non-Qualified Options, and no such
     conversion shall occur until and unless the Administrator takes appropriate
     action. The Administrator, with the consent of the Participant, may also
     terminate any portion of any ISO that has not been exercised at the time of
     such conversion.

20.  WITHHOLDING. In the event that any federal, state, or local income taxes,
     employment taxes, Federal Insurance Contributions Act ("F.I.C.A.")
     withholdings or other amounts are required by applicable law or
     governmental regulation to be withheld from the Participant's salary, wages
     or other remuneration in connection with the exercise of an Option or a
     Disqualifying Disposition (as defined in Paragraphs 9 and 21), the Company
     may withhold from the Participant's compensation, if any, or may require
     that the Participant advance in cash to the Company, or to any Affiliate of
     the Company which employs or employed the Participant, the statutory
     minimum amount of such withholdings unless a different withholding
     arrangement, including the use of shares of the Company's Common Stock or a
     promissory note, is authorized by the Administrator (and permitted by law).
     For purposes hereof, the fair market value of the shares withheld for
     purposes of payroll withholding shall be determined in the manner provided
     in Paragraph 1 above, as of the most recent practicable date prior to the
     date of exercise. If the fair market value of the shares withheld is less
     than the amount of payroll withholdings required, the Participant may be
     required to advance the difference in cash to the Company or the Affiliate
     employer. The Administrator in its discretion may condition the exercise of
     an Option for less than the then Fair Market Value on the Participant's
     payment of such additional withholding.

21.  NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. Each Key Employee who
     receives an ISO must agree to notify the Company in writing immediately
     after the Key Employee makes a Disqualifying Disposition of any shares
     acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is
     any disposition (including any sale) of such shares before the later of (a)
     two years after the date the Key Employee was granted the ISO, or (b) one
     year after the date the Key Employee acquired Shares by exercising the ISO.
     If the Key Employee has died before such stock is sold, these holding
     period requirements do not apply and no Disqualifying Disposition can occur
     thereafter.

22.  TERMINATION OF THE PLAN. The Plan will terminate on August 12, 2008, the
     date which is ten (10) years from the earlier of the date of its adoption
     and the date of its approval by the shareholders of the Company. The Plan
     may be terminated at an earlier date by vote of the shareholders of the
     Company; provided, however, that any such earlier termination shall not
     affect any Option Certificates executed prior to the effective date of such
     termination.

23.  AMENDMENT OF THE PLAN AND CERTIFICATES. The Plan may be amended by the
     shareholders of the Company. The Plan may also be amended by the
     Administrator, including, without limitation, to the extent necessary to
     qualify any or all outstanding Options granted under the Plan or Options to
     be granted under the Plan for favorable federal income tax treatment
     (including deferral of taxation upon exercise) as may be afforded incentive
     stock options under Section 422 of the Code, and to the extent necessary to
     qualify the shares issuable upon exercise of any outstanding Options
     granted, or Options to be granted, under the Plan for listing on any
     national securities exchange or quotation in any national automated
     quotation system of securities dealers. Any amendment approved by the
     Administrator which the Administrator determines is of a scope that
     requires shareholder approval shall be subject to obtaining such
     shareholder approval. Any modification or amendment of the Plan shall not,
     without the consent of a Participant, adversely affect his or her rights
     under an Option previously granted to him or her. With the consent of the
     Participant affected, the Administrator may amend outstanding Option
     Certificates in a manner which may be adverse to the Participant but which
     is not inconsistent with the Plan. In the discretion of the Administrator,
     outstanding Option Certificates may be amended by the Administrator in a
     manner which is not adverse to the Participant. Except as provided herein,
     the terms and provisions of any Option Certificate may be waived, or
     consent for the departure therefrom granted, only by written document
     executed by the party entitled to the benefits of such terms or provisions.
     No such waiver or consent shall be deemed to be or shall constitute a
     waiver or consent with respect to any other terms or provisions of such
     Option Certificate, whether or not similar. Each such waiver or consent
     shall be effective only in the specific instance and for the purpose for
     which it was given, and shall not constitute a continuing waiver or
     consent.

24.  EMPLOYMENT OR OTHER RELATIONSHIP. Nothing in this Plan or any Option
     Certificates shall be deemed to prevent the Company or an Affiliate from
     terminating the employment, consultancy or director status of a
     Participant, nor to prevent a Participant from terminating his or her own
     employment, consultancy or director status or to give any Participant a
     right to be retained in employment or other service by the Company or any
     Affiliate for any period of time.

25.  GOVERNING LAW. This Plan shall be construed and enforced in accordance with
     the law of the State of Delaware.

                                                                    Exhibit 10.4

          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

              RESEARCH COLLABORATION AND EXCLUSIVE OPTION AGREEMENT

      This Research Collaboration and Exclusive Option Agreement ("Agreement")
is made as of December 1, 2005 (the "Effective Date") by and between Bausch &
Lomb Incorporated, a New York corporation with a place of business at One Bausch
& Lomb Place, Rochester, New York 14604-2701 ("B&L") and PTC Therapeutics, Inc.,
a Delaware corporation with a place of business at 100 Corporate Court, South
Plainfield, New Jersey 07080-2449 ("PTC").

                                    RECITALS

      WHEREAS, B&L desires to evaluate certain compounds in the possession of
PTC for the purpose of identifying potential candidates for development by B&L
for the treatment of ophthalmic diseases caused by angiogenesis;

      WHEREAS, PTC is pursuing a subset of these compounds as development
candidates in the area of oncology;

      WHEREAS, PTC desires to grant, and B&L desires to receive, an exclusive
option to license one or more such compounds selected by B&L for use in the
treatment, diagnosis and/or prevention of diseases of the eye.

      NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, PTC and B&L hereby agree as follows:

1. Definitions. In addition to any terms defined elsewhere in this Agreement,
the following terms shall have the meanings set forth below.

      1.1 "Affiliate" means any corporation, association or other entity, which
directly or indirectly controls, is controlled by or is under common control
with the party in question. Solely for purposes of this definition the term
"control" means direct or indirect beneficial ownership of more than 50% of the
voting stock in such corporation or other business entity, or such other
relationship as in fact constitutes actual control.

      1.2 "Applicable Know-How" means any technical information, including all
biological, chemical, pharmacological, toxicological, clinical and assay
information, data, discoveries, inventions, improvements, know-how, materials,
processes, formulae and trade secrets, whether patentable or unpatentable (but
not patented), that at any time during the applicable Term are Controlled by PTC
and that relate to an Evaluation Compound in the applicable Field.



                                      -2-

      1.3 "Applicable Laws" means all laws, ordinances, rules and regulations
applicable to this Agreement or the activities contemplated hereunder, including
without limitation the U.S. Federal Food, Drug, and Cosmetic Act, as amended.

      1.4 "Applicable Patents" means all U.S. and international patents and U.S.
and international patent applications that at any time during the applicable
Term are Controlled by PTC, the claims of which may be infringed, absent a
license, by the manufacture, use, sale, offer for sale or importation of an
Evaluation Compound in the applicable Field.

      1.5 "Confidential Information" means any information communicated by one
party hereto to the other, which is identified as proprietary or confidential by
the disclosing party, or which would be reasonably understood to be the type of
information which should be treated as proprietary or confidential. PTC's
Confidential Information shall include the Applicable Know-How. B&L's
Confidential Information shall include the B&L Improvements.

      1.6 "Controlled" means, with respect to any know-how or intellectual
property right, possession by a party, directly or through an Affiliate
controlled by such party, of the ability to grant the right to access or use, or
to grant a license or a sublicense to, such know-how or intellectual property
right as provided for herein without violating the terms of the agreement or
other arrangement with any third party under which such rights to access or use
are obtained.

      1.7 "Evaluation Compounds" means both the PTC Development Compounds and
the PTC Program Compounds.

      1.8 "Field" means (i) with respect to the PTC Program Compounds, the
treatment, diagnosis or prevention of diseases of the eye, and (ii) with respect
to the PTC Development Compounds, the treatment, diagnosis or prevention of
diseases of the eye through local delivery to the eye including without
limitation intravitreal injection and implantation.

      1.9 "PTC Development Compound" means any chemical compound listed on
Exhibit A-2 to this Agreement as supplemented from time to time with additional
compounds in related series.

      1.10 "PTC Program Compound" means any chemical compound listed on Exhibit
A-1 to this Agreement.

2. Evaluation Activities.

      2.1 Provision of Information regarding Evaluation Compounds. PTC shall
provide the following information to B&L to the extent available for each
Evaluation Compound promptly following B&L's request with respect to the first
group of Evaluation Compounds to be evaluated and then within [**] following
B&L's request with regard to subsequent groups of Evaluation Compounds to be
evaluated, provided that such requests with regard to subsequent groups of
Evaluation Compounds may occur no more often than [**] and no more often than
[**] during the Initial Term and [**] during the Extension Term:

            (a) PTC Compound Number ([**]);



                                      -3-



            (b) molecular weight;

            (c) chemical name and structure, including calculated 2D and 3D
molecular features; provided, however, that (i) chemical names and structures
for PTC Program Compounds shall only be provided for inspection at PTC's offices
until such time as specific compounds are selected for evaluation by B&L, at
which time the names and structures of only those compounds selected will be
provided, and (ii) chemical names and structures for PTC Development Compounds
shall not be provided until after the in vitro screening proposed by B&L is
complete, and then only for those PTC Development Compounds actually screened
and for which B&L submits a written notice of continued interest;

            (d) [**];

            (e) [**];

            (f) [**];

            (g) [**];

            (h) a summary description of the government grants received by PTC
in support of its research and development efforts relating to any Evaluation
Compounds;

            (i) any additional Applicable Know-How that would reasonably be
expected to be material to B&L's evaluation of the Evaluation Compounds;
provided, however, that such additional Applicable Know-How shall only be
provided for inspection at PTC's offices until such time as specific Evaluation
Compounds are selected for evaluation by B&L; and

            (j) information regarding any of the following of which PTC becomes
aware following the Effective Date: (i) patent or other intellectual property
rights owned or controlled by any third party that would be infringed by such
Evaluation Compound or B&L's exercise of the evaluation license granted under
Section 4.1 in accordance with this Agreement; (ii) any claims made against PTC
asserting the invalidity, unenforceability, abuse or misuse of any of the
Applicable Know-How or Applicable Patents; (iii) any claim made by PTC of any
violation or infringement or misappropriation by others of PTC's rights in an
Evaluation Compound, or the Applicable Know-How or Applicable Patents; (iv) any
claim made that PTC is in conflict with or infringing upon the asserted rights
of others in connection with the Applicable Compound, or the Applicable Know-How
or Applicable Patents within the Field; (v) any patent or other intellectual
property rights owned or controlled by any third party that would be infringed
by the composition of matter of an Evaluation Compound or use of an Evaluation
Compound in the applicable Field; and (vi) any licenses or covenants not to sue
granted by PTC under the Applicable Know-How or Applicable Patents in the
applicable Field; provided that PTC shall have no liability for any Third Party
Claims under any provision of this Agreement based on any failure to disclose
any information described in this Section 2.1(l); and further provided that
PTC's obligation to provide the information described in this Section 2.1(l)
shall only commence once B&L intends to engage [**].

      2.2 Restrictions on Use of Information. B&L shall limit access to the
information disclosed pursuant to Section 2.1 above to those individuals under
its control who are involved in the evaluation process. In particular, B&L shall
not store such information on any computer system or in any database that is
either generally available to B&L scientific personnel or third party
consultants or advisers, unless B&L implements reasonable technological
measures (e.g.,

                                      -4-


two-factor authentication employing unique userids and passwords) to prevent
such information from being accessed by individuals other than individuals who
are involved in the evaluation process. B&L shall not combine or aggregate such
information within any database containing information not developed pursuant to
the activities contemplated under this Agreement or a License Agreement.

      2.3 Provision of Evaluation Compounds. Subject to the limitation set forth
in Sections 2.6 and 2.7, PTC shall, upon request by B&L, make available to B&L
in such quantities as B&L may reasonably request any Evaluation Compound
selected by B&L for evaluation, screening, testing and formulation. Such
Evaluation Compounds shall be made available at PTC's facilities or shall be, at
B&L's request and expense, provided to B&L at B&L's facilities.

      2.4 Evaluation of PTC Development Compounds by B&L. B&L agrees that it
shall select the PTC Development Compounds as the first of the Evaluation
Compounds to be evaluated and shall, promptly following the Effective Date,
begin evaluation, screening, testing and formulation activities with regard to
the PTC Development Compounds. If the evaluation, screening, testing and/or
formulation done by B&L fails, B&L shall promptly notify PTC in writing whether
B&L intends to continue evaluation, screening, testing or formulation activities
with regard to the PTC Development Compounds.

      2.5 Support of Evaluation Activities. Subject to the limitation set forth
in Sections 2.6 and 2.7, PTC shall support B&L's evaluation activities under
this Agreement as reasonably requested by B&L, including without limitation, (i)
providing reasonable access to PTC's facilities and equipment required to
conduct such activities, (ii) procuring reagents, assays and other chemicals and
materials required to conduct such activities, (iii) making available one or
more qualified employees to conduct or assist in the conduct of such activities,
and (iv) otherwise reasonably cooperating with B&L.

      2.6 Payment for PTC Obligations. B&L shall pay PTC $[**] during the
Initial Term for PTC's obligations pursuant to Sections 2.3 and 2.5 (the "PTC
Obligations"), invoiced by PTC and paid by B&L in four installments of $[**] on
a quarterly basis (with quarters, for this purpose, deemed to be the four
consecutive three-calendar-month periods commencing with the Effective Date),
representing the equivalent of [**] Absent any additional payments by B&L
pursuant to Section 2.7, PTC's provision of [**] support during the Initial Term
shall represent an upper limit on the amount of support that PTC is required to
provide to fulfill the PTC Obligations.

      2.7 Additional Resources. By mutual agreement, PTC may provide additional
support for the B&L's evaluation activities beyond the PTC Obligations, for
which B&L shall reimburse PTC at a rate of $[**] for PTC resources (whether
internal or outsourced), or in the case of any out-of-pocket purchase of
materials or equipment, for the actual cost to PTC of such materials or
equipment.

      2.8 Payment Terms. Subject to Section 2.6 (which specifies the payment
amount for PTC's performance of the PTC Obligations), PTC shall invoice B&L at
the end of each quarter for activities during the quarter then ended specifying
the work performed, the man hours expended and the out of pocket expenses
incurred, and B&L shall pay such invoices within [**]


                                      -5-


following receipt of invoice. If B&L disputes any amounts in an invoice, it
shall notify PTC in writing of the reasons for such dispute within [**] of
receipt of such invoice. B&L's failure to pay such disputed amounts after
written notice is given to PTC shall not constitute a material breach of this
Agreement for such time period as the parties are working together in good faith
to resolve the dispute.


3. Option.

      3.1 Fee for Option Grant. Within fifteen (15) days following the Effective
Date, B&L shall pay to PTC the sum of Three Hundred Thousand Dollars ($300,000)
via check or wire transfer to a bank account designated by PTC.

      3.2 Option to PTC Program Compounds.

            (a) Grant of Option. Subject to the terms and conditions set forth
in this Agreement, PTC hereby grants to B&L, and B&L hereby accepts, an
exclusive option (the "PTC Program Compounds Option") to obtain, from time to
time during the Term, one or more exclusive, worldwide licenses to develop and
commercialize one or more of the PTC Program Compounds in the applicable Field
pursuant to the terms and conditions set forth in Exhibit B (each such license,
a "License Agreement").

            (b) Exercise of PTC Program Compounds Option. B&L may exercise the
PTC Program Compounds Option at any time and as often during the Term as B&L, in
its sole discretion, may determine, by providing written notice of such exercise
to PTC specifying the PTC Program Compound that is the subject of such exercise.
Following exercise of the PTC Program Compounds Option, the parties shall
memorialize the license granted to B&L by executing a written License Agreement
for such PTC Program Compound in the form attached hereto as Exhibit B, and such
PTC Program Compound shall be deemed a "Licensed Compound".

            (c) Exercise Fee. Within [**] following execution of the first such
License Agreement for a Licensed Compound under Section 3.2(b), B&L shall pay to
PTC the sum of [**] Dollars ($[**]), and within [**] following execution of each
subsequent License Agreement for a Licensed Compound under Section 3.2(b), B&L
shall pay to PTC the sum of [**] Dollars ($[**]). Such amounts shall be paid via
check or wire transfer to a bank account designated by PTC at the time of
execution of each such License Agreement.

      3.3 Option to PTC Development Compounds.

            (a) Grant of Option. Subject to the terms and conditions set forth
in this Agreement, PTC hereby grants to B&L, and B&L hereby accepts, an
exclusive option (the "PTC Development Compounds Option") to obtain a worldwide
license to develop and commercialize the PTC Development Compounds in the
applicable Field as further described in this Section.

            (b) Exercise of Option. B&L may exercise the PTC Development
Compounds Option at any time during the DC Term that B&L, in its sole
discretion, may determine, by providing written notice of such exercise to PTC.


                                      -6-



            (c) Negotiation of License Agreement. Following the Effective Date
the parties shall negotiate the terms and conditions of an exclusive, worldwide
license to develop and commercialize the PTC Development Compounds in the
applicable Field. Following exercise of the PTC Development Compounds Option and
execution of a license agreement with respect thereto, the PTC Development
Compounds shall be deemed "Licensed Compounds". Notwithstanding the foregoing,
if after B&L exercises the PTC Development Compounds Option the parties do not
reach agreement on the terms of such license agreement and enter into such
license agreement prior to the date [**] following the expiration of the DC
Term, B&L's rights under this Agreement with respect to the PTC Development
Compounds shall expire and be of no further force or effect; provided that the
parties shall extend their negotiations for an additional [**] beyond the
expiration of such negotiation period if, by mutual agreement, the parties
determine that such negotiations then remain active and viable.

4. Intellectual Property.

      4.1 Evaluation License. PTC hereby grants to B&L, and B&L hereby accepts,
an exclusive license under the Applicable Know-How and the Applicable Patents to
evaluate, screen, test and formulate the Evaluation Compounds for utility in the
applicable Field. With the consent of PTC, not to be unreasonably withheld, B&L
may transfer the Evaluation Compounds to, and have such evaluation, screening,
testing and formulation performed for it by, a third-party service provider,
provided that B&L shall be responsible for compliance with the terms of this
Agreement by any such third-party service provider.

      4.2 Exclusivity. PTC agrees that, during the applicable Term, it shall not
evaluate, screen or test for any third party, or permit any third party to
evaluate, screen, or test (i) any of the Evaluation Compounds for utility in the
applicable Field, (ii) disclose any Applicable Know-How to any third party for
use in the applicable Field, or (iii) grant or have granted, within the
applicable Field, any license, option to license or covenant not to sue under
any of the Applicable Patents to any third party.

      4.3 B&L Improvements. B&L shall own all right, title and interest in and
to, any new process, manufacture, compound, composition of matter, improvement,
discovery, claim, formula, process, trade secret, technology or know-how
relating to any Evaluation Compound that is conceived or first reduced to
practice solely by B&L employees, agents and/or third party contractors during
the applicable Term as a result of the activities contemplated under this
Agreement, including all patent and other intellectual property rights thereto
(collectively, "B&L Improvements").

      4.4 Joint Improvements. The parties shall jointly own all right, title and
interest in and to, any new process, manufacture, compound, composition of
matter, improvement, discovery, claim, formula, process, trade secret,
technology or know-how relating to any Evaluation Compound that is conceived or
first reduced to practice jointly by one or more B&L employees, agents and/or
third party contractors, on the one hand, and one or more PTC employees, agents
and/or third party contractors, on the other hand, during the applicable Term as
a result of the activities contemplated under this Agreement, including all
patent and other intellectual property rights thereto (collectively, "Joint
Improvements"). Subject to Section 4.5, each party may freely license or assign
its interest in Joint Improvements without the consent of

                                      -7-

the other party and without any duty to account to the other party. B&L and PTC
shall be jointly responsible, using outside patent counsel mutually agreed upon
by the parties and free of ethical conflict, for the preparation, filing,
prosecution and maintenance of Joint Improvement patents and patent applications
and the parties shall share equally the responsibility for all documented
external costs associated therewith. Should either party elect to discontinue
its payment obligations under this Section 4.4 for costs incurred for the
filing, prosecution and maintenance of a Joint Improvement patent or patent
application in one or more countries, at the request of the other party such
party will assign its full right, title and interest in and to such particular
patent or patent application to such other party

      4.5 License to B&L Improvements and Joint Improvements. B&L hereby grants
to PTC, and PTC hereby accepts, a non-exclusive, royalty-free, worldwide
license, with the right to sublicense, to B&L Improvements for use outside of
the applicable Field. At the request of PTC, B&L shall negotiate terms,
including the payment of fees and royalties, under which (i) such non-exclusive
licenses may be converted to exclusive licenses, and (ii) B&L will grant an
exclusive license to B&L's interest in the Joint Improvements for use outside of
the applicable Field.

      4.6 Restriction on Practice and Use of Applicable Know-How and Applicable
Patents. Notwithstanding the license rights granted herein, B&L shall not
practice or use any Applicable Know-How or Applicable Patents to synthesize or
discover any compound other than Evaluation Compounds, nor to determine the
structure of any PTC Development Compound in advance of a disclosure of such
compound's structure pursuant to Section 2.1(b). Breach of this Section 4.6
shall constitute material breach of this Agreement under Section 5.3, remedies
for which shall not be limited by Section 8.

5. Term and Termination.

      5.1 Initial Term. The term of this Agreement shall commence as of the
Effective Date and, unless extended or earlier terminated as forth
below, shall continue:

      (i) with respect to the PTC Program Compounds, for a period of one (1)
      year following the Effective Date (the "Initial Term"); and

      (ii) with respect to the PTC Development Compounds, until the earlier of
      (a) the date, if any, on which B&L has notified PTC in writing pursuant to
      Section 2.4 that B&L does not intend to continue evaluation, screening,
      testing or formulation activities with regard to the PTC Development
      Compounds; (b) the date, if any, of the execution of a license agreement
      pursuant to Section 3.3; or (c) one (1) year following the Effective Date
      (the "DC Term").

      5.2 Extension Term. B&L may elect to extend the term of this Agreement
solely with respect to the PTC Program Compounds for one (1) additional period
of six (6) months following the Initial Term (the "Extension Term") by (i)
notifying PTC in writing of such election at least [**] prior to the expiration
of the Initial Term, which written notice shall specify the PTC Program
Compounds that remain the subject of interest by B&L (the "Extension
Compounds"), and (ii) paying to PTC the non-refundable sum of [**] Dollars
($[**]) prior to the

                                      -8-


expiration of the Initial Term. Following such extension, the term "Evaluation
Compounds" shall refer only to the Extension Compounds. With respect to PTC
Program Compounds, the Initial Term together with any applicable Extension Term
shall be referred to herein as the "Term." With respect to PTC Development
Compounds, any references to the "Initial Term" or the "Term" shall mean the DC
Term.

      5.3 Termination for Breach. Either party may terminate this Agreement upon
written notice to the other party in the event that the other party has failed
to perform a material obligation under this Agreement, and has failed to cure
such non-performance within sixty (60) days following receipt of written notice
specifying in reasonable detail the nature of such failure.

      5.4 Termination by B&L. B&L may terminate this Agreement without cause in
B&L's sole discretion upon ninety (90) days written notice to PTC.

      5.5 Effect of Expiration and Termination.

            (a) Expiration of DC Term. Subject to Section 3.3(c), upon
expiration of the DC Term, (i) the PTC Development Compound Option shall expire;
(ii) rights granted to the PTC Development Compounds shall, if they are not
Licensed Compounds, revert to PTC; (iii) the evaluation license granted under
Section 4.1 shall terminate with respect to the PTC Development Compounds; and
(iv) B&L shall disclose to PTC and permit PTC to use all evaluation, screening,
testing and formulation data and the like generated pursuant to this Agreement
relating to the PTC Development Compounds, if they are not Licensed Compounds.

            (b) Expiration of the Term. Upon expiration of the Term, (i) the PTC
Program Compounds Option shall expire; (ii) rights to all PTC Program Compounds
that are not Licensed Compounds shall revert to PTC; (iii) the evaluation
license granted under Section 4.1 shall terminate with respect to the PTC
Program Compounds; and (iv) B&L shall disclose to PTC and permit PTC to use all
evaluation, screening, testing and formulation data and the like generated
pursuant to this Agreement relating to all PTC Program Compounds that are not
Licensed Compounds.

            (c) Termination. Upon termination of this Agreement under Sections
5.3 or 5.4, (i) each of the PTC Development Compounds Option and the PTC Program
Compounds Option shall expire; (ii) rights to all Evaluation Compounds that are
not Licensed Compounds shall revert to PTC; (iii) the evaluation license granted
under Section 4.1 shall terminate; and (iv) B&L shall disclose to PTC and permit
PTC to use all evaluation, screening, testing, formulation and similar data (but
not techniques, protocols or methodologies) generated pursuant to this Agreement
relating to all Evaluation Compounds that are not Licensed Compounds.

            (d) License upon Expiration or Termination. B&L shall, and hereby
does, grant to PTC a non-exclusive license, effective as of expiration or
termination of the applicable Term with respect to an Evaluation Compound that
is not a Licensed Compound, under all know-how and patent rights that are
conceived or first reduced to practice by B&L employees, agents and/or third
party contractors prior to such expiration or termination as a result of the
activities contemplated under this Agreement which know-how and patent rights
cover the Evaluation Compound or method of use of such Evaluation Compound in
the applicable Field,

                                      -9-



with the right to sublicense, to make, have made, use, offer for sale, sell and
import such Evaluation Compound, and only the Evaluation Compound, in any
country of the world. At the request of PTC, B&L shall negotiate terms,
including the payment of fees and royalties, under which such non-exclusive
license may be converted to an exclusive license, subject to any non-exclusive
licenses that may have been granted by B&L to any third parties prior to such
request.

            (e) No Effect on Licensed Compounds. Neither termination nor
expiration of this Agreement shall terminate or otherwise affect licenses
granted with regard to Licensed Compounds prior to the date of such termination
or expiration, and all such licenses shall survive such termination or
expiration.

      5.6 Survival. Termination or expiration shall not relieve either party
from any obligations accrued as of the date of such termination or expiration.
The obligations of the parties under Sections 2.2, 4.3, 4.4, 4.5, 5.5, 5.6, 7,
8, 9, 10 and 11 shall survive termination or expiration of this Agreement.

6. Warranties, Representations and Covenants.

      6.1 Representations, Warranties and Covenants of Each Party.

            (a) Authority. Each party represents and warrants that it possesses
all right, title, interest and authority necessary to enter into this Agreement,
perform its obligations hereunder and grant the rights embodied herein and that
it is not aware of any legal impediment that would inhibit its ability to
perform its obligations under this Agreement.

            (b) No Conflicts. Each party represents and warrants to the other
that the execution, delivery and performance of this Agreement does not: (i)
conflict with, or constitute a breach of, any order, judgment, agreement or
instrument to which such party is a party or is otherwise bound; or (ii) require
the consent of any person or entity.

      6.2 Representations, Warranties and Covenants of PTC.

            (a) Compliance with Laws. PTC covenants, represents and warrants
that it shall comply with all Applicable Laws.

            (b) Third Party Intellectual Property. PTC represents and warrants
that to its knowledge as of the Effective Date there are no patent or other
intellectual property rights owned or controlled by any third party that would
be infringed by the Evaluation Compounds or B&L's exercise of the evaluation
license granted under Section 4.1 in accordance with this Agreement.

      6.3 Representations, Warranties and Covenants of B&L. B&L covenants,
represents and warrants that it shall comply with all Applicable Laws.

                                      -10-

7. Indemnification.

      7.1 PTC Indemnification.

            (a) Indemnity. PTC shall indemnify, defend and hold harmless B&L and
its Affiliates, and their directors, officers, agents and employees
(collectively, the "B&L Indemnified Parties") from and against all claims,
demands, losses, liabilities, damages, costs and expenses (including reasonable
attorneys' fees and any costs of settlement) incurred by the B&L Indemnified
Parties resulting from or arising in connection with any claim, suit, action or
proceeding brought by a third party (a "Third Party Claim") against any such B&L
Indemnified Party based on:

                  (i) PTC's breach of any of PTC's covenants, representations or
warranties hereunder; or

                  (ii) any act or omission constituting recklessness, gross
negligence or willful misconduct on the part of PTC.

            (b) Limitations on PTC Indemnification. PTC shall have no obligation
to indemnify, defend or hold harmless the B&L Indemnified Parties in connection
with any Third Party Claim to the extent such Third Party Claim is covered by
B&L's obligations under Section 7.2, or arises from: (i) a B&L Indemnified
Party's breach of any of B&L's covenants, representations or warranties
hereunder; or (ii) any act or omission constituting recklessness, gross
negligence or willful misconduct on the part of any of the B&L Indemnified
Parties.

      7.2 B&L Indemnification.

            (a) Indemnity. B&L shall indemnify, defend and hold harmless PTC,
its Affiliates, and their directors, officers, agents and employees
(collectively, the "PTC Indemnified Parties") against all claims, demands,
losses, liabilities, damages, costs and expenses (including reasonable
attorneys' fees and any costs of settlement) incurred by the PTC Indemnified
Parties resulting from or arising in connection with a Third Party Claim brought
against any such PTC Indemnified Party based on:

                  (i) B&L's breach of any of B&L's covenants, representations or
warranties hereunder; or

                  (ii) any act or omission constituting recklessness, gross
negligence or willful misconduct on the part of B&L.

            (b) Limitations on B&L Indemnification. B&L shall have no obligation
to indemnify, defend or hold harmless the PTC Indemnified Parties in connection
with any Third Party Claim to the extent such Third Party Claim is covered by
PTC's obligations under Section 7.1, or arises from: (i) a PTC Indemnified
Party's breach of any of PTC's covenants, obligations, agreements,
representations or warranties hereunder; or (ii) any act or omission
constituting recklessness, gross negligence or willful misconduct on the part of
any of the PTC Indemnified Parties.

                                      -11-




      7.3 Indemnification Procedure.

            (a) Notification and Cooperation. The party seeking indemnification
hereunder (the "Indemnified Party") shall: (i) promptly notify in writing the
party obligated to indemnify (the "Indemnifying Party") of any claim, action or
proceeding of a third party for which the Indemnified Party seeks
indemnification; and (ii) cooperate fully with the Indemnifying Party and its
legal representatives in the investigation of any such claim, action or
proceeding. The Indemnified Party's failure to comply with its obligations under
this Section shall not constitute a breach of this Agreement nor relieve the
Indemnifying Party of its indemnification obligations hereunder, except to the
extent, if any, that the Indemnifying Party's defense or settlement of the
affected claim, action or proceeding was actually and materially impaired
thereby.

            (b) Defense. The Indemnifying Party shall conduct, at its own
expense, the defense of any and all such claims, charges, suits or other actions
by a third party, and the Indemnified Party may, at its own expense, assist in
such defense if it so chooses, provided that the Indemnifying Party shall
control such defense and all negotiations relative to the settlement of any such
claim. Neither party shall settle or admit liability with respect to any such
claims, charges, suits or other actions which could result in liability to the
other party without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed.

8. Limitation of Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, NEITHER PTC NOR B&L, NOR THEIR RESPECTIVE AFFILIATES, DIRECTORS,
OFFICERS, EMPLOYEES OR AGENTS, SHALL HAVE ANY LIABILITY TO THE OTHER FOR ANY
SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT, EVEN IF SUCH DAMAGES WERE FORESEEABLE, EXCEPT TO
THE EXTENT SUCH DAMAGES ARE OWED TO A THIRD PARTY BY A PARTY ENTITLED TO
INDEMNIFICATION UNDER THIS AGREEMENT AND EXCEPT FOR ANY DAMAGES ARISING FROM
BREACH OF A PARTY'S CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT.

9. Confidentiality.

      9.1 Nondisclosure and Nonuse Obligations. During the Term, and thereafter
after expiration or termination hereof, each party will maintain all
Confidential Information of the other party in trust and confidence and will not
disclose any Confidential Information of the other party to any third party or
use any Confidential Information of the other party except to the extent
required to enjoy its rights or comply with its obligations under this
Agreement. Confidential Information shall be disclosed only to employees,
agents, Affiliates and consultants who have a need for such information and who
are bound by obligations of nondisclosure and non-use at least as restrictive as
those set forth herein. Each party shall be responsible for any disclosure or
use of the Confidential Information by such employees, agents, Affiliates and
consultants. Each party shall protect the other party's Confidential Information
using not less than the same standard of care with which it treats its own
Confidential Information, but at all times shall use at least reasonable care.



                                      -12-


      9.2 Exceptions. Confidential Information shall not include any information
which:

            (a) is now, or lawfully becomes, generally known or available to the
public through no fault of the recipient;

            (b) is known by the receiving party at the time of receiving such
information;

            (c) is hereafter lawfully furnished to the receiving party by a
third party, as a matter of right and without restriction on disclosure;

            (d) is independently developed by the receiving party without any
breach of this Section as evidenced by its written records; or

            (e) is the subject of a written permission to disclose provided by
the disclosing party.

      9.3 Authorized Disclosure. Notwithstanding any other provision of this
Agreement, each party may disclose Confidential Information of the other party
if such disclosure is required: (i) by an order of a court or other governmental
body, or any political subdivision thereof or arbitral panel with jurisdiction
over the disclosing party; or (ii) by law or regulation (including, without
limitation, to comply with any applicable securities regulation, stock exchange
or NASDAQ disclosure requirements), but only to the extent that any such
disclosure is reasonably necessary. With respect to any order of a court or
other governmental body, the disclosing party shall, if practicable, first have
given written notice to the other party hereto and shall use reasonable efforts
to limit the scope and content of such disclosure to the required scope and
content. With respect to disclosure required by Applicable Laws or regulations
(including, without limitation, any applicable securities regulation, stock
exchange or NASDAQ disclosure requirements), the disclosing party shall, if
practicable, first give written notice to the other party hereto and allow the
other party a reasonable opportunity to comment on the content of such
disclosure and shall consult with the other party with respect to the comments
of such other party.

      9.4 Obligations at End of Term. Each party agrees, at the request of the
other party, upon expiration or termination of this Agreement to either: (i)
return to the other party all originals and copies of the other party's
Confidential Information; or (ii) at the other party's option, destroy all
originals and copies of the other party's Confidential Information and to
certify in writing such destruction to the other party; provided, however that
(a) the receiving party may keep one copy of the other party's Confidential
Information in a secure location, solely for purposes of enforcing and
determining such party's rights and obligations under this Agreement; (b) PTC
shall have no obligation to return or destroy any copies embodying the B&L
Improvements or the Joint Improvements; and (c) B&L shall have no obligation to
return or destroy any Applicable Know-How relating to any Licensed Compounds or
the Joint Improvements.

      9.5 Injunctive Relief. The parties agree that any breach of the
restrictions contained in this Section or Section 4.6 will cause irreparable
harm to the non-breaching party entitling the non-breaching party to injunctive
or other preliminary relief in addition to all other legal remedies.


                                      -13-

10. Publicity. All publicity, press releases and other announcements regarding
this Agreement or the transactions contemplated hereby shall be reviewed in
advance by, and subject to the written approval of, both parties.
Notwithstanding the foregoing, either party may, without the written consent of
the other, disclose the terms of this Agreement insofar as reasonably required
to comply with applicable securities laws (including, without limitation, any
applicable stock exchange or NASDAQ disclosure requirements); provided, however,
that where practicable the disclosing party shall provide advance notice and a
reasonable opportunity to the other party to provide comments regarding any
confidential treatment or similar request. The disclosing party shall if
practicable reasonably consider any such comments from the other party. In
addition, each party shall have the right to disclose, under obligations of
confidentiality and as reasonably required, the terms of this Agreement to
potential acquirers, investors, lenders, licensees, sublicensees, contractors
and other third parties in connection with acquisition, financing, product
development or commercialization activities.

11. Miscellaneous.

         11.1 Bankruptcy. All licenses granted under this Agreement by PTC to
B&L, for all purposes of Section 365(n) of Title XI of the United States Code
("Title XI"), are licenses of rights to "intellectual property" as defined in
Title XI. If PTC seeks or involuntarily is placed under Title XI and the trustee
rejects this Agreement as contemplated under 11 U.S.C. 365(n)(1), B&L hereby
elects pursuant to Section 365(n) to retain all rights granted to B&L under this
Agreement to the extent permitted by law.

         11.2 Relationship of the Parties. Nothing in this Agreement shall be
deemed to create any contract or relationship of employment between B&L and PTC
or any personnel of PTC. PTC shall be responsible for all federal, state and
local laws pertaining to income taxes, withholding taxes, Social Security,
unemployment compensation, worker's compensation and any other rights, benefits,
or obligations relating to such personnel.

         11.3 Notices. All notices required or permitted hereunder must be given
in writing and mailed postage prepaid, certified or registered mail, return
receipt requested, or sent by a nationally recognized express courier service,
or hand-delivered at the following addresses:

         To PTC:           PTC Therapeutics, Inc.
                           100 Corporate Court
                           South Plainfield, New Jersey 07080-2449
                           Attn.: Legal Dep't

         Email copy to: legal@ptcbio.com

         To B&L:           Bausch & Lomb Incorporated
                           One Bausch & Lomb Place
                           Rochester, New York  14604-2701
                           Attn.: Senior Vice President - Research and
                                  Development and Chief Scientific Officer



                                      -14-

         Copy to:          Bausch & Lomb Incorporated
                           One Bausch & Lomb Place
                           Rochester, New York  14604-2701
                           Attn.: Senior Vice President and General Counsel

         All notices shall be deemed made upon receipt by the addressee as
evidenced by the applicable written receipt.

         11.4 Captions and Section References. The titles, headings or captions
in this Agreement do not define, limit, extend, explain or describe the scope or
extent of this Agreement or any of its terms or conditions and therefore shall
not be considered in the interpretations, construction or application of this
Agreement.

         11.5 Severability. If any term or provision of this Agreement shall be
found to be invalid, illegal or otherwise unenforceable, such finding shall not
affect the other terms or provisions of this Agreement, or the whole of this
Agreement, but such term or provision shall be deemed modified to the extent
necessary to render such term or provision enforceable, and the rights and
obligations of the parties shall be construed and enforced accordingly,
preserving to the fullest permissible extent the intent and agreements of the
parties set forth in this Agreement.

         11.6 Amendment. No amendment, change or modification of any of the
terms, provisions or conditions of this Agreement shall be effective unless made
in a writing that expressly references this Agreement and is signed on behalf of
the parties hereto by their duly authorized representatives.

         11.7 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or construed as a further or continuing waiver of any such or
other term, provision or condition of this Agreement.

         11.8 Force Majeure. Neither party shall be liable hereunder to the
other party nor shall be in breach for failure to perform its obligations caused
by circumstances beyond the control of either party, including, but not limited
to: acts of nature; fires; earthquakes; floods; riots; wars; civil disturbances;
sabotage; accidents; shortages or government actions. In the case of any such
event, the affected party shall promptly notify the other party, and shall keep
the other party informed of the event in writing specifying the extent to which
its performance will likely be affected. The party affected shall exert
reasonable diligent efforts to eliminate, cure or overcome any such cause and
resume performance as soon as practicable.

         11.9 Benefits and Binding Nature of Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns permitted under this Agreement.

         11.10 Assignment; Change in Control. The rights under this Agreement
may not be assigned by either party (the "Assigning Party") without the written
consent of the other party (the "Non-Assigning Party") except (i) to any
Affiliate of the Assigning Party or (ii) to any party



                                      -15-

which acquires substantially all of the assets and business of the Assigning
Party to which this Agreement relates.

         11.11 Entire Agreement. This Agreement, including the Exhibits attached
hereto, sets forth the entire agreement between the parties hereto pertaining to
the subject matter hereof and supersedes all negotiations, preliminary
agreements, memoranda or letters of proposal or intent, discussions and
understandings of the parties hereto in connection with the subject matter
hereof.

         11.12 Governing Law and Forum. This Agreement and all claims related to
it, its execution or the performance of the parties under it, shall be construed
and governed in all respects according to the laws of the State of New York. The
parties agree that all actions or proceedings arising in connection with this
Agreement shall be tried and litigated exclusively in the courts located in the
Borough of Manhattan, New York, New York. This choice of venue is intended by
the parties to be mandatory and not permissive in nature, and to preclude the
possibility of litigation between the parties with respect to, or arising out
of, this Agreement in any jurisdiction other than that specified in this
Section. Each party waives any right it may have to assert the doctrine of forum
non-conveniens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this Section.

         11.13 Counterparts. This Agreement may be executed in counterparts. For
purposes hereof, a facsimile copy of this Agreement, including the signature
page hereto, shall be deemed to be an original. Notwithstanding the foregoing,
the parties shall deliver original execution copies of this Agreement to one
another as soon as practicable following execution thereof.

         [The remainder of this page is left intentionally blank. Signature page
follows.]



                                      -16-

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first above written.

BAUSCH & LOMB INCORPORATED                     PTC THERAPEUTICS, INC.

By: /s/ STEPHEN C. McCLUSKI                    By: /s/ MARK E. BOULDING
   -----------------------------                  -----------------------------

Name: Stephen C. McClusky                      Name: Mark E. Boulding

Title: Senior Vice President and CFO           Title: SVB, Business Development
                                                      and Legal



                                    EXHIBIT A
                                       TO
                             RESEARCH COLLABORATION
                         AND EXCLUSIVE OPTION AGREEMENT

                          LIST OF EVALUATION COMPOUNDS

Exhibit A-1 (PTC Program Compounds):  [attached]
Exhibit A-2 (PTC Development Compounds):  [attached]




EXHIBIT A-1 (PTC PROGRAM COMPOUNDS)

Note: These aliases were assigned using PTC MTA reference code [**]

[**]
[**]
[**]
[**]



EXHIBIT A-2 (PTC DEVELOPMENT COMPOUNDS)

Note: These aliases were assigned using PTC MTA reference code [**]

[**]
[**]
























                                      -1-


                                    EXHIBIT B
                                       TO
                             RESEARCH COLLABORATION
                         AND EXCLUSIVE OPTION AGREEMENT

                                LICENSE AGREEMENT

         This License Agreement ("Agreement") is entered into as of [INSERT DATE
OF EXERCISE OF THE OPTION] by and between Bausch & Lomb Incorporated, a New York
corporation with a place of business at One Bausch & Lomb Place, Rochester, New
York 14604-2701 ("B&L") and PTC Therapeutics, Inc., a Delaware corporation with
a place of business at 100 Corporate Court, South Plainfield, New Jersey
07080-2449 ("PTC") and shall be effective as of the HSR Clearance Date or, if no
filing is to be made under the HSR Act, then it shall be effective on the date
set forth above (in either case, the "Effective Date").

                                    RECITALS

         WHEREAS, B&L and PTC have entered into a Research Collaboration and
Exclusive Option Agreement dated as of December 1, 2005 under which B&L is
granted the exclusive right to evaluate certain compounds in the possession of
PTC for the purpose of identifying potential candidates for development by B&L
for the treatment, diagnosis and/or prevention of diseases of the eye (the
"Research Collaboration and Exclusive Option Agreement");

         WHEREAS, under the terms of the Research Collaboration and Exclusive
Option Agreement, B&L was granted an exclusive option to license one or more
such compounds selected by B&L for use in the treatment, diagnosis and/or
prevention of diseases of the eye; and

         WHEREAS, B&L has exercised such option with regard to the Licensed
Compound (as defined below) and PTC desires to grant to B&L, and B&L wishes to
acquire from PTC, an exclusive worldwide right and license to such Licensed
Compound in accordance with the terms and conditions of this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, PTC and B&L hereby agree as follows:

1. Definitions. In addition to any terms defined elsewhere in this Agreement,
the following terms shall have the meanings set forth below.

         1.1 "Affiliate" means any corporation, association or other entity,
which directly or indirectly controls, is controlled by or is under common
control with the party in question. Solely for purposes of this definition the
term "control" means direct or indirect beneficial ownership of more than 50% of
the voting stock in such corporation or other business entity, or such other
relationship as in fact constitutes actual control.

         1.2 "Annual Net Sales" means worldwide Net Sales actually invoiced
during a Fiscal Year, or portion thereof, during the term of this Agreement.



         1.3 "Applicable Laws" means all laws, ordinances, rules and regulations
applicable to this Agreement or the activities contemplated hereunder, including
without limitation the U.S. Federal Food, Drug, and Cosmetic Act, as amended.

         1.4 "B&L Improvement" means any new compound that is conceived or first
reduced to practice by B&L employees, agents and/or third party contractors
during the term of this Agreement, including all patent and other intellectual
property rights thereto Controlled by B&L, but only to the extent the foregoing
covers a compound that is a chemical modification of a Licensed Compound.

         1.5 "Commercially Reasonable Efforts" means the efforts and resources
normally used by an established pharmaceutical company for a pharmaceutical
product owned exclusively by such company (i.e., without any royalty or similar
obligation to another person or entity in respect of development or
commercialization of such product) with a similar market potential at a similar
stage in its development or commercialization, taking into account the
competitiveness of the marketplace, its proprietary position with respect to
such product, applicable regulatory circumstances, the profitability of such
product, the likelihood of success of commercialization, and other relevant
factors. Commercially Reasonable Efforts shall be deemed to have not occurred if
B&L, an Affiliate of B&L or sublicensee of B&L has not, within three (3) years
following the Effective Date, submitted an IND for a Licensed Product, commenced
human clinical trials for a Licensed Product, received Registration Approval for
a Licensed Product or made a commercial sale of a Licensed Product in a Major
Territory.

         1.6 "Confidential Information" means any information communicated by
one party hereto to the other, which is identified as proprietary or
confidential by the disclosing party, or which would be reasonably understood to
be the type of information which should be treated as proprietary or
confidential. All reports provided by B&L to PTC under this Agreement shall be
deemed Confidential Information of B&L no matter how marked or disclosed.

         1.7 "Controlled" means, with respect to any know-how or intellectual
property right, possession by a party, directly or through an Affiliate
controlled by such party, of the ability to grant the right to access or use, or
to grant a license or a sublicense to, such know-how or intellectual property
right as provided for herein under which such rights to access or use are
obtained.

         1.8 "FDA" means the United States Food and Drug Administration.

         1.9 "Field" means the treatment, diagnosis or prevention of diseases of
the eye.

         1.10 "Fiscal Quarter" means B&L's fiscal quarters which are based on
the Fiscal Year and are published annually by B&L's Corporate Finance
Department.

         1.11 "Fiscal Year" means the fiscal year of B&L, which is the 52 or 53
week period ending on the last Saturday in December of each calendar year.

         1.12 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (15 U.S.C. Sec. 18a), and the rules and regulations
promulgated thereunder.

                                        2



         1.13 "HSR Clearance Date" means the earlier of (a) the date on which
the FTC or DOJ shall notify PTC and B&L of early termination of the applicable
waiting period under the HSR Act or (b) the day after the date on which the
applicable waiting period under the HSR Act expires.

         1.14 "IND" means an Investigational New Drug Application filed by B&L
with the FDA or any comparable application filed with a Regulatory Authority of
a country other than the United States as may be required as a legal
prerequisite to the commencement of human clinical trials of the Licensed
Compound.

         1.15 "Licensed Compound" means the compound known as [INSERT NAME OF
LICENSED COMPOUND], as further described on Schedule 1.14, and equivalents
thereof, including, but not limited to, analogs, homologs, derivatives,
variants, conjugates, tautomers, isomers and prodrugs thereof, but expressly
excluding the PTC Development Compounds (as defined in the Research
Collaboration and Exclusive Option Agreement).

         1.16 "Licensed Know-How" means any technical information, including all
biological, chemical, pharmacological, toxicological, clinical and assay
information, data, discoveries, inventions, improvements, know-how, materials,
processes, formulae and trade secrets, whether patentable or unpatentable (but
not patented), that at any time during the term of this Agreement prior to the
first commercial sale in a Major Territory of a Licensed Product by B&L, or an
Affiliate or sublicensee of B&L, are Controlled by PTC, and that relate to the
Licensed Compound in the Field.

         1.17 "Licensed Patents" means (a) all U.S. and international patents
and U.S. and international patent applications that at any time during the term
of this Agreement prior to the first commercial sale in a Major Territory of a
Licensed Product by B&L, or an Affiliate or sublicensee of B&L, are Controlled
by PTC, the claims of which may be infringed, absent a license, by the
manufacture, use, sale, offer for sale or importation of the Licensed Compound
in the Field, (b) all continuations, divisionals, substitutions, extensions,
reissues and reexaminations thereof and, solely to the extent entirely supported
by any of the foregoing, claims in continuations-in-part thereof, and (c)
patents resulting from the foregoing.

         1.18 "Licensed Product" means any prophylactic, diagnostic or
therapeutic product composed of or including a Licensed Compound.

         1.19 "Major Territory" means each of (i) the United States, (ii) Japan,
and (iii) at least three of the following: France, the United Kingdom, Germany,
Italy, and Spain.

         1.20 "NDA" means a New Drug Application or similar application or
submission filed with a Regulatory Authority of a country or group of countries
by B&L or an Affiliate of B&L, approval of which by such Regulatory Authority
would constitute Registration Approval.

         1.21 "Net Sales" means the gross invoice price of Licensed Products
sold or commercially disposed of for value by B&L or an Affiliate or sublicensee
of B&L in an arm's length transaction with a third party (other than an
Affiliate or sublicensee of B&L), less the following:

                                       3



         (a) discounts, charge backs, Medicare or other government rebates, and
         rebates taken or allowed;

         (b) credits or allowances given or made for rejections or return of any
         previously sold Licensed Product taken or allowed;

         (c) to the extent included in such gross invoice price any tax or
         government charge imposed on the production, import, export, sale,
         delivery or use of such Licensed Product, including, without
         limitation, any value added or similar tax or government charge, but
         not including any tax levied with respect to income; and

         (d) to the extent included in such gross invoice price any reasonable
         and documented packaging and shipping charges.

         Notwithstanding any other provision of this Section, Net Sales shall
not include the transfer:

         (i) without consideration of any Licensed Product for use in any
         clinical trial or in any pre-clinical or other research;

         (ii) without consideration of any Licensed Product as samples or other
         use to promote additional Net Sales in commercially reasonable amounts
         consistent with the normal business practices of B&L; or

         (iii) without consideration of any Licensed Product for compassionate
         use.

         Such adjustments shall be consistent with customary accounting
practices within B&L and in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP"), consistently applied.

         If a Licensed Product is sold in the form of a combination product
containing one or more active ingredients that are themselves not the Licensed
Product (a "Combination Product"), then for the purpose of calculating royalties
owed on sales of the Combination Product, Net Sales shall be calculated as
follows: first, B&L shall determine the actual Net Sales of such Combination
Product (calculated using the above described deductions) and then such amount
shall be multiplied by the fraction A/(A+B), where A is the invoice price of the
actual Licensed Product component of such Combination Product, and B is the
total invoice price of the other active ingredient component(s) of such
Combination Product. If the invoice price of either the Licensed Product or the
other active ingredient component(s) of such Combination Product cannot be
determined, Net Sales of such Combination Product shall be equitably determined
by an independent third party selected by mutual agreement of the parties.

         1.22 "New Active Ingredient" means a chemically modified Licensed
Compound which is neither (i) [**] or efficacy of the first Licensed Compound,
nor (ii) a regulatory equivalent of the first Licensed Compound, such as those
delineated in 37 C.F.R. Section 1.710(b)(1).

                                       4



         1.23 "Phase I Clinical Trial" means an initial human clinical trial of
the Licensed Compound conducted by B&L or an Affiliate or sublicensee of B&L in
order to initially study the safety, absorption, distribution, metabolism and/or
excretion of the Licensed Compound.

         1.24 "Phase II Clinical Trial" means a human clinical trial of the
Licensed Compound that is conducted by B&L or an Affiliate or sublicensee of B&L
in order to initially study the efficacy of the Licensed Compound for a specific
indication within the Field, which trial follows a Phase I Clinical Trial.

         1.25 "Pivotal Clinical Trial" means a pivotal human clinical trial of
the Licensed Compound that is conducted by B&L or an Affiliate of B&L in an
extended patient population intended to support the filing of an NDA for such
Licensed Compound within the Field.

         1.26 "Registration Approval" means, with respect to any country or
group of countries, all approvals by the appropriate Regulatory Authority
necessary to permit commercial marketing and sales of the Licensed Product in
the Field in such country or group of countries.

         1.27 "Regulatory Authority" means the FDA in the United States or the
equivalent of the FDA in any country other than the United States, or a
successor agency to the foregoing in a given country.

         1.28 "Successful Completion" means that the applicable Phase I Clinical
Trial, Phase II Clinical Trial, or Pivotal Clinical Trial has been completed in
essential accordance with the protocol for the trial and sufficient data have
been obtained that satisfy the objectives and clinical endpoints specified in
the protocol. With respect to a specific trial, "Successful Completion" shall be
deemed to have occurred upon the subsequent commencement of any other trial that
has objectives and/or clinical endpoints that are more advanced than those set
forth in the protocol for the completed trial.

         1.29 "Valid Claim" means any claim covering the Licensed Compound (i)
of an issued and unexpired patent within the Licensed Patents, which has not
lapsed, been revoked or abandoned or held permanently unenforceable or invalid
by a decision of a court or other governmental agency of competent jurisdiction,
or (ii) of a patent application within the Licensed Patents that has been
pending for no more than seven years, or (iii) of an issued and unexpired patent
within the B&L Improvements, which has not lapsed, been revoked or abandoned or
held permanently unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, or (iv) of a patent application
within the B&L Improvements that has been pending for no more than seven years.
For the purpose of clarity, patent and patent applications within the B&L
Improvements may be owned by B&L.

2. License Grant.

         2.1 Grant. PTC hereby grants to B&L, and B&L hereby accepts, an
exclusive, worldwide license, with the right to sublicense, under the Licensed
Know-How and Licensed Patents to develop, make, have made, use, sell, offer for
sale, promote and import Licensed Products, solely in the Field.

                                       5



         2.2 Sublicenses. B&L shall have the exclusive right to grant
sublicenses under the license granted under Section 2.1 without the prior
written approval of PTC, provided, however, that any such sublicense shall be
subject in all respects to the restrictions, exceptions, royalty obligations,
reports, termination provisions, development and commercialization diligence
obligations, and other provisions contained in this Agreement. B&L shall pay
PTC, or cause its Affiliates or sublicensees to pay PTC, royalties, as set forth
in Section 3.2, on Net Sales of such Affiliates or sublicensees as if such Net
Sales had been made by B&L. Each Affiliate and sublicensee shall report its Net
Sales to PTC through B&L, which Net Sales shall be aggregated with any Net Sales
of B&L for purposes of determining the Net Sales upon which royalties are to be
paid to PTC. B&L and its Affiliates shall have the right to appoint resellers
and distributors for the sale and distribution of the Licensed Product in the
Field and B&L shall have the right to appoint third parties to promote or
co-promote the Licensed Product in the Field subject to the terms of this
Agreement, all without the consent of PTC.

         2.3 Technology Transfer; Adverse Events. Upon execution of this
Agreement and thereafter within [**] following request by B&L (provided that
such requests may occur no more often than once [**]) until the first commercial
sale in a Major Territory of a Licensed Product by B&L, PTC shall provide to B&L
any update to the information provided by PTC to B&L pursuant to Section 2.1 of
the Research Collaboration and Exclusive Option Agreement that is then known to
PTC with respect to the Licensed Compound. In addition, each party shall
promptly disclose to the other all safety information, technical complaints and
adverse events regarding the Licensed Compound and any products containing such
Licensed Compound in accordance with customary procedures for sharing such
information between two entities in the pharmaceutical industry that each have
obligations to report and/or act on such information.

         2.4 License to B&L Improvements. B&L hereby grants to PTC, and PTC
hereby accepts, a non-exclusive, royalty-free, worldwide license, with the right
to sublicense, to B&L Improvements for use outside of the Field. At the request
of PTC, B&L shall negotiate terms, including the payment of fees and royalties,
under which such non-exclusive licenses may be converted to exclusive licenses.

3. Consideration.

         3.1 Milestone Payments. B&L shall pay to PTC the following payments
within thirty (30) days following the occurrence of each milestone event:



   NO.                MILESTONE EVENT          PAYMENT
                                         
    1       [**]                                $[**]
    2       [**]                                $[**]
    3       [**]                                $[**]
    4       [**]                                $[**]
    5       [**]                                $[**]
    6       [**]                                $[**]


                                       6





                                          
    7       [**]                                $[**]
    8       [**]                                $[**]
    9       [**]                                $[**]


In the event that any milestone event in the table above does not occur but then
a subsequent milestone event in the table above does occur with respect to a
Licensed Compound or Licensed Product, the milestone payment for the missed
milestone event shall become payable concurrently with the milestone payment for
the subsequently occurring milestone event, provided, however, that milestone
number 6 and milestone number 7 shall not be payable unless they have actually
occurred, milestone number 8 shall not be payable unless milestone number 6 has
first occurred and milestone number 9 shall not be payable unless milestone
number 7 has first occurred.

         3.2 Royalties. B&L shall pay to PTC a royalty on Net Sales as follows:

                  (a) [**]% of that portion of Annual Net Sales that is less
than or equal to $[**];

                  (b) [**]% of that portion of Annual Net Sales that exceeds
$[**] but is less than or equal to $[**];

                  (c) [**]% of that portion of Annual Net Sales that exceeds
$[**] but is less than or equal to $[**]; and

                  (d) [**]% of that portion of Annual Net Sales that exceeds
$[**].

         No more than one royalty payment shall be made with respect to any unit
of a Licensed Product.

         3.3 Lump Sum Payment. In addition, B&L shall pay to PTC a lump sum (one
time) payment of $[**] within [**] following the end of the first Fiscal Year in
which Annual Net Sales equals or exceeds $[**].

         3.4 Quarterly Reporting and Payment. Within [**] following the end of
each Fiscal Quarter during the term of this Agreement, B&L shall (a) calculate
and report to PTC (i) the number of units of each Licensed Product sold during
such Fiscal Quarter; (ii) B&L's calculation, based upon the books and records of
B&L, of Net Sales during such Fiscal Quarter, including an itemization of gross
amounts invoiced and amounts deducted in the calculation of such Net Sales; and
(iii) B&L's calculation of amounts owed to PTC under Section 3.2 and Section 3.3
(if applicable) for such Fiscal Quarter, taking into account the cumulative Net
Sales for any preceding Fiscal Quarters for the Fiscal Year in which such Fiscal
Quarter falls; and (b) pay to PTC the amounts owed to PTC under Section 3.2 and
Section 3.3 for such Fiscal Quarter.

         3.5 Post-Termination Report. Within [**] days following any termination
of this Agreement, B&L shall (a) calculate and report to PTC (i) the number of
units of each Licensed Product sold prior to such termination and not previously
reported; (ii) B&L's calculation, based

                                       7



upon the books and records of B&L, of Net Sales for any portion of a Fiscal
Quarter prior to such termination not previously reported, including an
itemization of gross amounts invoiced and amounts deducted in the calculation of
such Net Sales; and (iii) B&L's calculation of amounts owed to PTC under Section
3.2 and Section 3.3 (if applicable) for such portion of a Fiscal Quarter prior
to such termination; and (b) pay to PTC the amounts owed to PTC under Section
3.2 and Section 3.3 (if applicable) for such period following termination and
not yet paid.

         3.6 Offsets for Adverse Patents. Should B&L determine in its reasonable
discretion that in order to commercialize a Licensed Product it is necessary to
obtain rights under one or more patents or patent applications owned or
controlled by one or more third parties and that cover the Licensed Compound or
its manufacture, use, sale, offering for sale or importation in the Field, then
B&L shall be entitled to negotiate and enter into agreements with such third
parties and [**]% of any amounts payable with respect to the Licensed Compound
by B&L under such agreements shall be credited against royalties payable by B&L
to PTC, with respect to Net Sales in the country(-ies) for which such third
party agreements are necessary, under Section 3.2 of this Agreement, provided,
however, that such amounts credited shall not exceed [**] percent ([**]%) of
amounts otherwise due to PTC in any Fiscal Quarter with respect to Net Sales in
any country(-ies) for which such third party agreements are necessary.

         3.7 Reduction in Royalty Rate in Response to Generic Competition.
Notwithstanding the foregoing Section 3.2, on a Fiscal Quarter-by-Fiscal Quarter
basis and a country-by-country basis, in any country where there is a Competing
Product (as defined below) sold in such country and (a) there exists no Valid
Claim, or (b) after consultation with each other, PTC and B&L elect not to
pursue individually or jointly action seeking to stop the sale of such Competing
Product in such country, or (c) B&L and/or its Affiliates and/or sublicensees
are not entitled to bring or able to initiate an action (whether in their own
name or in the name of PTC) to, or otherwise able to, stop any person from
selling a Competing Product in such country, the royalty payable under Section
3.2 (after giving effect to any reduction under Section 3.6) on Net Sales in
such country shall be reduced (i) to [**] percent ([**]%) of the otherwise
applicable royalty if the aggregate sales of Competing Products in such country
exceed [**] percent ([**]%) but are less than [**] percent ([**]%) of the total
market for sales of products in the same ophthalmic therapeutic class and of the
same type in such country, and (ii) to [**] percent ([**]%) of the otherwise
applicable royalty if the aggregate sales of Competing Products in such country
exceed [**] percent ([**]%) in the same ophthalmic therapeutic class and of the
same type in such country. For purposes of this provision, "Competing Product"
shall mean any product that incorporates the Licensed Compound.

         3.8 Determination of Otherwise Applicable Royalty for Purposes of
Reduction Pursuant to Section 3.6 or 3.7. For any Fiscal Quarter in which (a)
B&L's aggregate royalty obligation under Section 3.2 would, before any offset or
reduction pursuant to Section 3.6 or 3.7, be calculated based on two or more
applicable royalty rates pursuant to Section 3.2 and (b) an offset or reduction
pursuant to Section 3.6 or 3.7 is applicable with respect to any country, the
royalty payable on Net Sales in such country during such Fiscal Quarter, before
any offset or reduction pursuant to Section 3.6 or 3.7, shall be determined by
applying the royalty rate brackets to Net Sales in such country in the same
proportion as the royalty rate brackets are applied to worldwide Net Sales
during such Fiscal Quarter. By way of example, if, before any offset or
reduction pursuant to Section 3.6 or 3.7, the royalty rate applicable to [**]%
of

                                       8



worldwide Net Sales during such Fiscal Quarter is [**]%, and the royalty rate
applicable to [**]% of worldwide Net Sales during such Fiscal Quarter is [**]%,
then the royalty rate applicable to [**]% of Net Sales in such country during
such Fiscal Quarter shall be deemed [**]%, and the royalty rate applicable to
[**]% of Net Sales in such country during such Fiscal Quarter shall be deemed
[**]%.

         3.9 Records and Audit Rights. B&L shall, in accordance with GAAP, keep
full and accurate books and records with respect to the amounts payable
hereunder for no less than three (3) calendar years after the end of the Fiscal
Year in respect of which payment is to be made hereunder. B&L shall permit PTC
to have such books and records examined by certified public accountants retained
by PTC and reasonably acceptable to B&L, during regular business hours and upon
reasonable advance written notice, but not later than three (3) calendar years
following the rendering of any reports, accounting and payments under this
Agreement and no more often than one (1) time per Fiscal Year. Such accountants
shall keep confidential any information obtained during such examination and
shall report only the amounts which the accountants believe to be due and
payable hereunder. Any such information so reviewed and any such information
reported shall be considered the Confidential Information of B&L. If the audit
discloses an underpayment, B&L shall promptly remit to PTC any shortfall. If the
audit discloses an underpayment that is in excess of 10% of the total amount due
to PTC for any Fiscal Quarter, B&L shall pay PTC's reasonable out-of-pocket
costs of the audit.

         3.10 Currencies. Payments under this Agreement shall be made in United
States dollars. Net Sales data for each country shall be converted into United
States dollars using the applicable monthly exchange rate for converting such
local currency to United States dollars in accordance with B&L's worldwide
accounting systems.

         3.11 Taxes. B&L may withhold the appropriate tax from any payment to be
made to PTC under this Agreement provided that such withholding is required by
Applicable Laws and B&L submits the amounts withheld to the applicable tax
authorities. In such event B&L shall furnish PTC with proof of payment of such
tax together with official or other appropriate evidence issued by the
applicable government authority. B&L and PTC shall cooperate to take advantage
of any applicable tax treaties pursuant to which the withholding of taxes can be
legally avoided or minimized.

         3.12 Duration of Royalty Obligations. The obligation of B&L to pay
royalties under this Section 3 shall terminate on a country-by-country basis on
the later of (i) the date on which there exists no Valid Claim in such country,
or (ii) ten (10) years after the first commercial sale for monetary value for
use or consumption by the general public of the Licensed Product by B&L or any
of its Affiliates or sublicensees in such country following Registration
Approval for the Licensed Product in such country. Following termination of
B&L's obligation to pay royalties in a country pursuant to this Section 3.12,
the license and rights granted to B&L hereunder with respect to such country
shall become non-exclusive, fully paid-up, royalty-free, irrevocable and
perpetual.

4. Obligations of B&L.

                                       9



         4.1 Control and Cooperation. B&L shall, at its own expense, solely
control and be solely responsible for developing, manufacturing, registering and
commercializing the Licensed Compound. All registration filings will be made in
the name of B&L and shall be held by B&L. PTC shall cooperate, at B&L's expense
(as mutually agreed by the parties in connection with any request by B&L for
such assistance), to the extent reasonably necessary to assist B&L in such
filings, in obtaining Registration Approvals and in complying with all ongoing
regulatory requirements including analysis of technical complaints and adverse
events.

         4.2 Diligence. B&L shall use Commercially Reasonable Efforts to develop
a Licensed Product, and to obtain Registration Approval for and market a
Licensed Product in all Major Territories.

         4.3 Joint Development Committee.

                  (a) Formation. Within sixty (60) days following the Effective
Date, the parties shall form a committee (the "Joint Development Committee")
comprising at least two representatives from each party of appropriate
backgrounds and level.

                  (b) Responsibilities. The Joint Development Committee will be
responsible for (i) reviewing and providing consultation regarding B&L's plans
and progress in developing, manufacturing, registering and commercializing a
Licensed Product and (ii) discussing other matters related to this Agreement
referred to it by either party. Each party's representatives to the Joint
Development Committee shall communicate with one another as necessary to perform
the parties' respective obligations hereunder. B&L's representatives shall (a)
provide to PTC's representatives quarterly written reports regarding the status
of B&L's efforts in developing, manufacturing, registering and commercializing
the Licensed Compound, including information regarding clinical planning and the
progress of any clinical trials; (b) permit PTC's representatives to be present
during clinical trial investigator calls and meetings; (c) permit PTC's
representatives to review development and clinical data, minutes of project team
meetings and regulatory correspondence (including drafts of material regulatory
correspondence to be sent by B&L to Regulatory Authorities reasonably in advance
of submission); and (d) provide PTC's representatives with access to such other
information regarding B&L's plans and progress in developing, manufacturing,
registering and commercializing a Licensed Product as PTC's representatives
shall reasonably request.

                  (c) Meetings. The Joint Development Committee shall hold its
first meeting in person within ninety (90) days following the Effective Date.
Thereafter, the Joint Development Committee will meet on a quarterly basis
either in person or by telephone at mutually acceptable times and locations. At
each meeting, each party may bring one or more additional advisors, experts or
vendors to participate in the meeting, provided that each such advisor, expert
or vendor signs an appropriate nondisclosure agreement prohibiting disclosure of
Confidential Information acquired in connection with such participation.

                  (d) Disagreements. Any matter of disagreement related to
development, manufacture, registration and commercializing of the Licensed
Compound shall be referred to a designated senior executive of each party for
resolution. [**] any matter of disagreement that is not resolved by such
referral if such senior executives are unable to resolve the dispute within a

                                       10



reasonable time period after such referral. For the avoidance of doubt, nothing
in this Section 4.3 shall be construed as giving either party the right to
modify any provision of this Agreement.

5. Term and Termination.

         5.1 Term. The term of this Agreement shall commence as of the Effective
Date and unless terminated earlier as set forth below, shall continue until B&L
has no further obligation to pay royalties pursuant to Section 3.

         5.2 Termination by PTC. PTC may terminate this Agreement upon written
notice to B&L in the event that:

                  (a) B&L has failed to pay any undisputed amounts when due
hereunder within forty-five (45) days following receipt by B&L of written notice
from PTC demanding the payment of such amount; or

                  (b) B&L has failed to use Commercially Reasonable Efforts to
develop a Licensed Product in accordance with Section 4.2, above, and PTC has
reviewed all information contained in the reports and other information provided
by B&L pursuant to Section 4.3, above, has compared such information with the
standards set forth in Section 4.2, above, and has provided written notice to
B&L that specifically identifies how B&L has failed to comply with Section 4.2;
provided that PTC's right of termination shall not become effective unless B&L
has failed, within [**] following receipt of such written notice, to either
begin or resume Commercially Reasonable Efforts to develop a Licensed Product in
accordance with Section 4.2, which termination right shall be PTC's sole remedy
for failure by B&L to use Commercially Reasonable Efforts to develop a Licensed
Product in accordance with Section 4.2 and which termination, and the effect of
termination under Section 5.4 below, shall apply only to the Major Territory in
which B&L has failed to use Commercially Reasonable Efforts to develop a
Licensed Product, provided that if such termination applies to all three of the
Major Territories, such termination, and the effect of termination under Section
5.4 below, shall also apply to all countries and territories outside the Major
Territories in which B&L, or an Affiliate or sublicensee of B&L, has not
received Registration Approval for, or made a commercial sale as of, a Licensed
Product prior to the effective date of such termination; or

                  (c) B&L has failed to perform any other material obligation
under this Agreement, and has failed to cure such non-performance within [**]
following receipt by B&L of written notice from PTC specifying in reasonable
detail the nature of such failure.

         5.3 Termination by B&L. B&L may terminate this Agreement without cause
in B&L's sole discretion upon ninety (90) days written notice to PTC.

         5.4 Effect of Termination.

                  (a) Termination of Licenses, Reversion of Rights, Etc. Upon
any termination of this Agreement by PTC pursuant to Section 5.2 or by B&L
pursuant to Section 5.3 (i) the licenses granted hereunder shall terminate; (ii)
all rights granted hereunder to B&L shall revert to PTC for the benefit of PTC
and B&L shall transfer to PTC all pre-clinical and clinical data, all regulatory
filings, including drug master files, IND's, NDA's and Registration Approvals,
and

                                       11



the like regarding the Licensed Product; (iii) if requested by PTC, B&L will
supply reasonable quantities of the Licensed Product to PTC, on a cost plus
[**]% basis, for up to [**] (if B&L or any of its Affiliates are manufacturing
Licensed Product as of such termination) or transition any third party supply
arrangement for the Licensed Product to PTC that B&L has in force as of such
termination to the extent permitted under such supply arrangement; and (iv) for
the [**] immediately following termination B&L shall be entitled to sell any
completed inventory of Licensed Product which remain on hand as of the date of
the termination, and to sell new inventory to the extent necessary to satisfy
its contractual and legal obligations, so long as B&L pays to PTC the royalties
applicable to said subsequent sales in accordance with the terms and conditions
as set forth in this Agreement. Neither termination nor expiration of this
Agreement shall terminate or otherwise affect the Research Collaboration and
Exclusive Option Agreement or any other licenses granted to B&L under any other
agreements between B&L and PTC.

                  (b) Grant of License to PTC. B&L shall, and hereby does, grant
to PTC a non-exclusive license, effective as of termination pursuant to Section
5.2 or Section 5.3, under all know-how Controlled by B&L prior to such
termination and under all patent rights Controlled by B&L prior to such
termination the claims of which may be infringed, absent such license, by the
manufacture, use, sale, offer for sale or importation of the Licensed Compound,
with the right to sublicense, to make, have made, use, offer for sale, sell and
import the Licensed Compound, and only the Licensed Compound, in any country of
the world. No other, further or different license is granted or implied pursuant
to this Section 5.4(b). At the request of PTC, B&L shall negotiate terms,
including the payment of fees and royalties, under which such non-exclusive
license may be converted to an exclusive license, subject to any licenses that
may have been granted by B&L to any third parties prior to such request.

         5.5 Survival. Termination or expiration shall not relieve either party
from any obligations accrued as of the date of such termination or expiration.
The obligations of the parties under Sections 2.4, 3.5, 3.9, 3.12, 5.4, 5.5, 9,
10, 11, 12 and 13 shall survive termination or expiration of this Agreement.

6. Warranties, Representations and Covenants.

         6.1 Representations, Warranties and Covenants of Each Party.

                  (a) Authority. Each party represents and warrants that it
possesses all right, title, interest and authority necessary to enter into this
Agreement, perform its obligations hereunder and grant the rights embodied
herein and that it is not aware of any legal impediment that would inhibit its
ability to perform its obligations under this Agreement.

                  (b) No Conflicts. Each party represents and warrants to the
other that the execution, delivery and performance of this Agreement does not:
(i) conflict with, or constitute a breach of, any order, judgment, agreement or
instrument to which such party is a party or is otherwise bound; or (ii) require
the consent of any person or entity.

         6.2 Representations and Warranties of PTC.

                  (a) Compliance with Laws. PTC covenants, represents and
warrants that it shall comply with all Applicable Laws.

                                       12

            (b) No Claims. PTC represents and warrants as of the Effective Date
that, except as disclosed by PTC to B&L in writing prior to the Effective Date
with respect to the Licensed Compound, which disclosure is also set forth on
Schedule 6.2(b) attached hereto, (i) there have been no claims made against PTC
asserting the invalidity, unenforceability, abuse or misuse of any of the
Licensed Know-How and Licensed Patents specifically relating to the Licensed
Compound; (ii) PTC has not made any claim of any violation or infringement or
misappropriation by others of PTC's rights in the Licensed Compound, or the
Licensed Know-How or Licensed Patents specifically relating to the Licensed
Compound within the Field; and (iii) PTC has not received any notice that PTC is
in conflict with or infringing upon the asserted rights of others in connection
with the Licensed Compound, or the Licensed Know-How or Licensed Patents
specifically relating to the Licensed Compound within the Field.

            (c) Third Party Intellectual Property. PTC represents and warrants
to its knowledge as of the Effective Date that, except as disclosed by PTC to
B&L in writing prior to the Effective Date with respect to the Licensed
Compound, which disclosure is set forth on Schedule 6.2(c) attached hereto,
there are no patent or other intellectual property rights owned or controlled by
any third party that would be infringed by the composition of matter of the
Licensed Compound or use of the Licensed Compound in the Field that would
prevent B&L from making, using, selling, offering for sale or importing the
Licensed Compound in the Field pursuant to this Agreement.

            (d) No Conflicting Licenses. PTC covenants, represents and warrants
that, except as disclosed by PTC to B&L in writing prior to the Effective Date
with respect to the Licensed Compound, which disclosure is set forth on Schedule
6.2(d) attached hereto, no licenses or covenants not to sue under the Licensed
Know-How or Licensed Patents, and no rights to make, have made, use, sell, offer
for sale, promote or import products containing the Licensed Compound, have been
or shall be granted by PTC in the Field.

            (e) U.S. Government Support. PTC represents and warrants as of the
Effective Date that, except as disclosed by PTC to B&L in writing prior to the
Effective Date with respect to the Licensed Compound, which disclosure is set
forth on Schedule 6.2(e) attached hereto, no research support was received from
the United States or any other government body relating to the research or
development of the Licensed Compound and that none of the Licensed Patents or
Licensed Know-How may be deemed a "subject invention" under 35 U.S.C. Section
201.

      6.3 Representations, Warranties and Covenants of B&L. B&L covenants,
represents and warrants that it shall comply with all Applicable Laws.

7.    Patent Preparation, Filing, Prosecution and Maintenance.

      7.1 Responsibility. PTC is responsible for preparing, filing, prosecuting
and maintaining the Licensed Patents, including any interferences, oppositions,
reissues or reexaminations. However, PTC shall provide, or cause its agent to
provide, to B&L copies of relevant correspondence between PTC and the United
States Patent Office or the various international patent offices and matters.
Upon B&L's request, PTC shall be available to consult with B&L on matters
relating to preparing, filing, prosecuting or maintaining any of the
applications or patents that are part of the Licensed Patents. PTC shall
implement all reasonable


                                       13

requests made by B&L with regard to the preparation, filing, prosecution and
maintenance of the patent applications and patents within the Licensed Patents.

      7.2 Abandonment. If PTC desires to abandon any patent or patent
application that is part of the Licensed Patents, it shall provide reasonable
written notice to B&L and provide B&L the opportunity, at B&L's expense, to
assume responsibility for preparing, filing, prosecuting and maintaining such
patent application or patent in PTC's name. B&L shall have no obligation to pay
royalties attributable to any such patents maintained by B&L; accordingly,
patents maintained by B&L shall not be deemed Licensed Patents for the purpose
of determining whether, under Section 3.7 or Section 3.12, a Valid Claim exists.

      7.3 Cooperation. PTC and B&L shall cooperate in preparing, filing,
prosecuting and maintaining the patent applications and patents that are part of
the Licensed Patents.

8.    Infringement of Intellectual Property.

      8.1 Notice. If either party becomes aware of any misappropriation or
infringement or threatened misappropriation or infringement of any the Licensed
Know-How and the Licensed Patents in the Field, then such party shall give
written notice to the other party within ten (10) days of becoming aware of such
infringement or threat.

      8.2 Enforcement Actions. B&L shall have the right, but not the obligation,
to bring an enforcement action and take any other reasonable steps to defend the
Licensed Know-How and the Licensed Patents against misappropriation or
infringement in the Field at its own expense; which steps may include the
negotiation of appropriate settlements and cross-licenses. PTC hereby agrees, in
addition to its other obligations under this Section, to be joined as a party to
any such action. If PTC is required to be joined as a party, PTC may retain its
own counsel at its own expense or may elect to be represented in the enforcement
action by B&L's counsel at B&L's expense. PTC shall also have the right to
co-fund an enforcement action or defense. If B&L does not initiate a response to
any infringement within ninety (90) days after it has received notice thereof,
then PTC shall have the right to undertake such action itself at its own
expense. Each party shall have the right to approve any settlement,
cross-license, etc., such approval not to be unreasonably withheld or delayed.

      8.3 Distribution of Amounts Paid by Third Parties. In any legal proceeding
brought by a party and funded solely by that party, any damages or other amounts
recovered as a result of the proceeding will be retained by that party. In any
other legal proceeding, any damages or other amounts will be distributed as
follows: the damages or other amounts will first be used to reimburse each party
for the cost of the suit or action (including attorneys' fees and any other
third-party costs) actually paid by each party, then split evenly. Damages or
other amounts recovered as a result of the proceeding retained by B&L shall not
be deemed Annual Net Sales or otherwise subject to royalties or other payment
obligations to PTC under this Agreement.

9.    Indemnification.

      9.1 PTC Indemnification.


                                       14

            (a) Indemnity. PTC shall indemnify, defend and hold harmless B&L and
its Affiliates, and their directors, officers, agents and employees
(collectively, the "B&L Indemnified Parties") from and against all claims,
demands, losses, liabilities, damages, costs and expenses (including reasonable
attorneys' fees and any costs of settlement) incurred by the B&L Indemnified
Parties resulting from or arising in connection with any claim, suit, action or
proceeding brought by a third party (a "Third Party Claim") against any such B&L
Indemnified Party based on:

                  (i) PTC's breach of any of PTC's covenants, representations or
warranties hereunder; or

                  (ii) any act or omission constituting recklessness, gross
negligence or willful misconduct on the part of PTC.

            (b) Limitations on PTC Indemnification. PTC shall have no obligation
to indemnify, defend or hold harmless the B&L Indemnified Parties in connection
with any Third Party Claim to the extent such Third Party Claim is covered by
B&L's obligations under Section 9.2, or arises from: (i) a B&L Indemnified
Party's breach of any of B&L's covenants, representations or warranties
hereunder; or (ii) any act or omission constituting recklessness, gross
negligence or willful misconduct on the part of any of the B&L Indemnified
Parties.

      9.2 B&L Indemnification.

            (a) Indemnity. B&L shall indemnify, defend and hold harmless PTC,
its Affiliates, and their directors, officers, agents and employees
(collectively, the "PTC Indemnified Parties") against all claims, demands,
losses, liabilities, damages, costs and expenses (including reasonable
attorneys' fees and any costs of settlement) incurred by the PTC Indemnified
Parties resulting from or arising in connection with a Third Party Claim brought
against any such PTC Indemnified Party based on:

                  (i) B&L's breach of any of B&L's covenants, representations or
warranties hereunder;

                  (ii) the pre-clinical testing, clinical testing, manufacture,
distribution, marketing, advertisement, promotion or sale of the Licensed
Product by B&L, its Affiliates and sublicensees, including without limitation
any Third Party Claim based on personal injury, death or infringement of patent
or other intellectual property rights that relate to a Licensed Product (other
than infringement resulting from a breach by PTC of its representations and
warranties hereunder) resulting from such pre-clinical testing, clinical
testing, manufacture, distribution, marketing, advertisement, promotion or sale
of the Licensed Product; or

                  (iii) any act or omission constituting recklessness, gross
negligence or willful misconduct on the part of B&L.

            (b) Limitations on B&L Indemnification. B&L shall have no obligation
to indemnify, defend or hold harmless the PTC Indemnified Parties in connection
with any Third Party Claim to the extent such Third Party Claim is covered by
PTC's obligations under Section 9.1, or arises from: (i) a PTC Indemnified
Party's breach of any of PTC's covenants,

                                       15

obligations, agreements, representations or warranties hereunder; or (ii) any
act or omission constituting recklessness, gross negligence or willful
misconduct on the part of any of the PTC Indemnified Parties.

      9.3 Indemnification Procedure.

            (a) Notification and Cooperation. The party seeking indemnification
hereunder (the "Indemnified Party") shall: (i) promptly notify in writing the
party obligated to indemnify (the "Indemnifying Party") of any claim, action or
proceeding of a third party for which the Indemnified Party seeks
indemnification; and (ii) cooperate fully with the Indemnifying Party and its
legal representatives in the investigation of any such claim, action or
proceeding. The Indemnified Party's failure to comply with its obligations under
this Section shall not constitute a breach of this Agreement nor relieve the
Indemnifying Party of its indemnification obligations hereunder, except to the
extent, if any, that the Indemnifying Party's defense or settlement of the
affected claim, action or proceeding was actually and materially impaired
thereby.

            (b) Defense. The Indemnifying Party shall conduct, at its own
expense, the defense of any and all such claims, charges, suits or other actions
by a third party, and the Indemnified Party may, at its own expense, assist in
such defense if it so chooses, provided that the Indemnifying Party shall
control such defense and all negotiations relative to the settlement of any such
claim. Neither party shall settle or admit liability with respect to any such
claims, charges, suits or other actions which could result in liability to the
other party without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed.

10.   Limitation of Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, NEITHER PTC NOR B&L, NOR THEIR RESPECTIVE AFFILIATES, DIRECTORS,
OFFICERS, EMPLOYEES OR AGENTS, SHALL HAVE ANY LIABILITY TO THE OTHER FOR ANY
SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT, EVEN IF SUCH DAMAGES WERE FORESEEABLE, EXCEPT TO
THE EXTENT SUCH DAMAGES ARE OWED TO A THIRD PARTY BY A PARTY ENTITLED TO
INDEMNIFICATION UNDER THIS AGREEMENT AND EXCEPT FOR ANY DAMAGES ARISING FROM
BREACH OF A PARTY'S CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT.

11.   Confidentiality.

      11.1 Nondisclosure and Nonuse Obligations. During the term of this
Agreement, and thereafter after expiration or termination hereof, each party
will maintain all Confidential Information of the other party in trust and
confidence and will not disclose any Confidential Information of the other party
to any third party or use any Confidential Information of the other party except
to the extent required to enjoy its rights or comply with its obligations under
this Agreement. Confidential Information shall be disclosed only to employees,
agents, Affiliates and consultants who have a need for such information and who
are bound by obligations of nondisclosure and non-use at least as restrictive as
those set forth herein. Each party shall be responsible for any disclosure or
use of the Confidential Information by such employees, agents,

                                       16

Affiliates and consultants. Each party shall protect the other party's
Confidential Information using not less than the same standard of care with
which it treats its own Confidential Information, but at all times shall use at
least reasonable care.

      11.2 Exceptions. Confidential Information shall not include any
information which:

            (a) is now, or lawfully becomes, generally known or available to the
public through no fault of the recipient;

            (b) is known by the receiving party at the time of receiving such
information;

            (c) is hereafter lawfully furnished to the receiving party by a
third party, as a matter of right and without restriction on disclosure;

            (d) is independently developed by the receiving party without any
breach of this Section as evidenced by its written records; or

            (e) is the subject of a written permission to disclose provided by
the disclosing party.

      11.3 Authorized Disclosure. Notwithstanding any other provision of this
Agreement, each party may disclose Confidential Information of the other party
if such disclosure is required: (i) by an order of a court or other governmental
body, or any political subdivision thereof or arbitral panel with jurisdiction
over the disclosing party; or (ii) by law or regulation (including, without
limitation, to comply with any applicable securities regulation, stock exchange
or NASDAQ disclosure requirements), but only to the extent that any such
disclosure is reasonably necessary. With respect to any order of a court or
other governmental body, the disclosing party shall, if practicable, first have
given written notice to the other party hereto and shall use reasonable efforts
to limit the scope and content of such disclosure to the required scope and
content. With respect to disclosure required by Applicable Laws or regulations
(including, without limitation, any applicable securities regulation, stock
exchange or NASDAQ disclosure requirements), the disclosing party shall, if
practicable, first give written notice to the other party hereto and allow the
other party a reasonable opportunity to comment on the content of such
disclosure and shall consult with the other party with respect to the comments
of such other party.

      11.4 Obligations at End of Term. Each party agrees, at the request of the
other party, upon expiration or termination of this Agreement to either: (i)
return to the other party all originals and copies of the other party's
Confidential Information; or (ii) at the other party's option, destroy all
originals and copies of the other party's Confidential Information and to
certify in writing such destruction to the other party; provided, however that
the receiving party may keep one copy of the other party's Confidential
Information in a secure location, solely for purposes of enforcing and
determining such party's rights and obligations under this Agreement.

      11.5 Injunctive Relief. The parties agree that any breach of the
restrictions contained in this Section will cause irreparable harm to the
non-breaching party entitling the non-breaching party to injunctive or other
preliminary relief in addition to all other legal remedies.


                                       17

12.   Publicity. All publicity, press releases and other announcements regarding
this Agreement or the transactions contemplated hereby shall be reviewed in
advance by, and subject to the written approval of, both parties.
Notwithstanding the foregoing, either party may, without the written consent of
the other, disclose the terms of this Agreement insofar as reasonably required
to comply with applicable securities laws (including, without limitation, any
applicable stock exchange or NASDAQ disclosure requirements); provided, however,
that where practicable the disclosing party shall provide advance notice and a
reasonable opportunity to the other party to provide comments regarding any
confidential treatment or similar request. The disclosing party shall if
practicable reasonably consider any such comments from the other party. In
addition, each party shall have the right to disclose, under obligations of
confidentiality and as reasonably required, the terms of this Agreement to
potential acquirers, investors, lenders, licensees, sublicensees, contractors
and other third parties in connection with acquisition, financing, product
development or commercialization activities..

13.   Miscellaneous.

      13.1 Bankruptcy. All licenses granted under this Agreement by PTC to B&L,
for all purposes of Section 365(n) of Title XI of the United States Code ("Title
XI"), are licenses of rights to "intellectual property" as defined in Title XI.
If a bankruptcy proceeding is commenced by or against PTC under Title XI, B&L
shall be entitled to a copy of any and all such intellectual property maintained
by PTC, and the same, if not in the possession of B&L, shall be promptly
delivered to it (a) upon B&L's written request following the commencement of
such bankruptcy proceeding, unless PTC, or its trustee or receiver, elects
within Thirty (30) days to continue to perform all of its obligations under this
Agreement, or (b) if not delivered as provided under Section (a) above, upon
B&L's request following the rejection of this Agreement by or on behalf of PTC.
If B&L has taken possession of all applicable embodiments of the intellectual
property of PTC pursuant to this Section and the trustee in bankruptcy of PTC
does not reject this Agreement, B&L shall return such embodiments upon request.
If PTC seeks or involuntarily is placed under Title XI and the trustee rejects
this Agreement as contemplated under 11 U.S.C. 365(n)(1), B&L hereby elects
pursuant to Section 365(n) to retain all rights granted to B&L under this
Agreement to the extent permitted by law.

      13.2 Notices. All notices required or permitted hereunder shall be given
in writing and mailed postage prepaid, certified or registered mail, return
receipt requested, or sent by a nationally recognized express courier service,
or hand-delivered at the following addresses:

      To PTC:     PTC Therapeutics, Inc.
                  100 Corporate Court
                  South Plainfield, New Jersey 07080-2449
                  Attn.: Legal Dep't

      Email copy to: legal@ptcbio.com

      To B&L:     Bausch & Lomb Incorporated
                  One Bausch & Lomb Place
                  Rochester, New York  14604-2701


                                       18

                  Attn.: Senior Vice President - Research and Development and
                         Chief Scientific Officer

      Copy to:    Bausch & Lomb Incorporated
                  One Bausch & Lomb Place
                  Rochester, New York  14604-2701
                  Attn.: Senior Vice President and General Counsel

      All notices shall be deemed made upon receipt by the addressee as
evidenced by the applicable written receipt.

      13.3 Captions and Section References. The titles, headings or captions in
this Agreement do not define, limit, extend, explain or describe the scope or
extent of this Agreement or any of its terms or conditions and therefore shall
not be considered in the interpretations, construction or application of this
Agreement.

      13.4 Severability. If any term or provision of this Agreement shall be
found to be invalid, illegal or otherwise unenforceable, such finding shall not
affect the other terms or provisions of this Agreement, or the whole of this
Agreement, but such term or provision shall be deemed modified to the extent
necessary to render such term or provision enforceable, and the rights and
obligations of the parties shall be construed and enforced accordingly,
preserving to the fullest permissible extent the intent and agreements of the
parties set forth in this Agreement.

      13.5 Amendment. No amendment, change or modification of any of the terms,
provisions or conditions of this Agreement shall be effective unless made in a
writing that expressly references this Agreement and is signed on behalf of the
parties hereto by their duly authorized representatives.

      13.6 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or construed as a further or continuing waiver of any such or
other term, provision or condition of this Agreement.

      13.7 Force Majeure. Neither party shall be liable hereunder to the other
party nor shall be in breach for failure to perform its obligations caused by
circumstances beyond the control of either party, including, but not limited to:
acts of nature; fires; earthquakes; floods; riots; wars; civil disturbances;
sabotage; accidents; shortages or government actions. In the case of any such
event, the affected party shall promptly notify the other party, and shall keep
the other party informed of the event in writing specifying the extent to which
its performance will likely be affected. The party affected shall exert
reasonable diligent efforts to eliminate, cure or overcome any such cause and
resume performance as soon as practicable.

      13.8 Benefits and Binding Nature of Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns permitted under this Agreement.


                                       19

      13.9 Assignment; Change in Control. The rights under this Agreement may
not be assigned by either party (the "Assigning Party") without the written
consent of the other party (the "Non-Assigning Party") except (i) to any
Affiliate of the Assigning Party or (ii) to any party which acquires
substantially all of the assets and business of the Assigning Party to which
this Agreement relates.

      13.10 Entire Agreement. This Agreement sets forth the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all negotiations, preliminary agreements, memoranda or letters of
proposal or intent, discussions and understandings of the parties hereto in
connection with the subject matter hereof.

      13.11 Governing Law and Forum. This Agreement and all claims related to
it, its execution or the performance of the parties under it, shall be construed
and governed in all respects according to the laws of the State of New York. The
parties agree that all actions or proceedings arising in connection with this
Agreement shall be tried and litigated exclusively in the courts located in the
Borough of Manhattan, New York, New York. This choice of venue is intended by
the parties to be mandatory and not permissive in nature, and to preclude the
possibility of litigation between the parties with respect to, or arising out
of, this Agreement in any jurisdiction other than that specified in this
Section. Each party waives any right it may have to assert the doctrine of forum
non-conveniens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this Section.

      13.12 Counterparts. This Agreement may be executed in counterparts. For
purposes hereof, a facsimile copy of this Agreement, including the signature
page hereto, shall be deemed to be an original. Notwithstanding the foregoing,
the parties shall deliver original execution copies of this Agreement to one
another as soon as practicable following execution thereof.

            [The remainder of this page is left intentionally blank.
                            Signature page follows.]



                                       20

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the day and year first above written.

BAUSCH & LOMB INCORPORATED               PTC THERAPEUTICS, INC.

By:________________________________      By:________________________________

Name:______________________________      Name:______________________________

Title:_____________________________      Title:_____________________________




                                       21

                                  SCHEDULE 1.14

                    DESCRIPTION OF LICENSED COMPOUND SCAFFOLD



                                       22

                                 SCHEDULE 6.2(B)

                                     CLAIMS



                                       23

                                 SCHEDULE 6.2(C)

                        THIRD PARTY INTELLECTUAL PROPERTY



                                       24

                                 SCHEDULE 6.2(D)

                              CONFLICTING LICENSES



                                       25

                                 SCHEDULE 6.2(E)

                               GOVERNMENT SUPPORT



                                       26

                                                                    Exhibit 10.5

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.




                       COLLABORATION AND LICENSE AGREEMENT

                           dated as of March 17, 2006

                                 by and between

                             PTC THERAPEUTICS, INC.

                                       and

                                 ESSEX CHEMIE AG
           (a wholly-owned subsidiary of Schering-Plough Corporation)

                                                               EXECUTION VERSION

                                TABLE OF CONTENTS



                                                                                                         Page
                                                                                                   
 ARTICLE 1  DEFINITIONS.............................................................................     1

 ARTICLE 2  RESEARCH PROGRAM........................................................................     18
       2.1      Collaborative Research..............................................................     18
       2.2      Conduct of the Research; Allocation of Responsibilities.............................     18
       2.3      PTC Research Efforts................................................................     19
       2.4      Schering Research Efforts...........................................................     19
       2.5      Research Funding; Responsibility for Costs of the Research Program..................     19
       2.6      Disclosure of Facilitating Research Technology......................................     20
       2.7      Information Regarding Collaboration Compound........................................     20
       2.8      Extension of Research Term..........................................................     21
       2.9      Material Transfer...................................................................     21
      2.10      Exclusivity.........................................................................     22
      2.11      Subcontractors......................................................................     23
      2.12      Termination of Research Program.....................................................     23
      2.13      Testing of Active Compounds Identified by PTC Outside of the Research Program.......     23
      2.14      Allocation of Active Compounds......................................................     24

 ARTICLE 3  JOINT STEERING COMMITTEE................................................................     24
       3.1      Creation and Structure of the JSC...................................................     24
       3.2      Meetings............................................................................     24
       3.3      Responsibilities of the JSC.........................................................     25
       3.4      Subcommittees of the JSC............................................................     26
       3.5      Decisions of the JSC................................................................     26
       3.6      Limitation on JSC Authority.........................................................     27
       3.7      Project Leaders.....................................................................     27
       3.8      Project Team Access.................................................................     27
       3.9      Reports to JSC......................................................................     27

 ARTICLE 4  DEVELOPMENT AND COMMERCIALIZATION OF LICENSED PRODUCTS..................................     27
       4.1      Responsibility for Development; Diligence...........................................     27
       4.2      Responsibility for Development Costs................................................     30
       4.3      Development Plans...................................................................     30
       4.4      Ownership of Development Data and Other Know-How....................................     30
       4.5      Access [**].........................................................................     31
       4.6      [**]                                                                                     31
       4.7      Responsibility for Commercialization................................................     31
       4.8      Meetings to Discuss Schering's [**] ................................................     32
       4.9      Manufacturing and Supply Responsibilities...........................................     32



                                       i

                                                               EXECUTION VERSION


                                                                                                   
      4.10      Regulatory Matters Related to Schering Viral Products...............................     32
      4.11      Regulatory Matters Related to Other Licensed Products...............................     33
      4.12      Impact of Change of Control of Schering.............................................     33
      4.13      Additional Reports and Information to be Provided Following Termination of the JSC..     33
      4.14      Certain Expenses of PTC.............................................................     34

ARTICLE 4A  DEVELOPMENT AND COMMERCIALIZATION OF DESIGNATED NV COMPOUNDS BY EITHER PARTY............     34
      4A.1      Designation of Designated NV Compounds..............................................     34
      4A.2      Development of NV Compounds by Schering.............................................     35
      4A.3      Development of NV Compounds by PTC..................................................     36
      4A.4      No Development or Commercialization of Collaboration Compounds in the Viral Field by
                     PTC............................................................................     36
      4A.5      No Development or Commercialization of NV Compounds in the Viral Field by Schering..     36
      4A.6      Applicability of Restrictions.......................................................     36

 ARTICLE 5  LICENSES                                                                                     37
       5.1      Research Licenses...................................................................     37
       5.2      Exclusive Development and Commercialization License to Schering.....................     37
       5.3      Co-Exclusive Research and Development Licenses to Both Parties......................     37
       5.4      Exclusive Licenses to Develop and Commercialize NV Compounds........................     38
       5.5      Right to Sublicense.................................................................     38
       5.6      No Further Rights...................................................................     39
       5.7      Section 365(n) of the Bankruptcy Code...............................................     39
       5.8      No Rights to Other Compounds........................................................     40

 ARTICLE 6  CONSIDERATION...........................................................................     40
       6.1      Up-front Payment....................................................................     40
       6.2      Development Milestone Payments for Schering Viral Products..........................     40
       6.3      Approval Milestone Payments for a Second Schering Viral Product.....................     43
       6.4      Sales Milestones....................................................................     44
       6.5      Royalties Payable by Schering on Sales of Schering Viral Products...................     44
       6.6      Compulsory License..................................................................     46
       6.7      Responsibility for Third Party Royalties............................................     46
       6.8      Limit on Adjustments................................................................     48
       6.9      Royalties Payable by Schering on Sales of Schering Non-Viral Products...............     48
      6.10      Royalties Payable by PTC on Sales of PTC Products...................................     48
      6.11      Royalty Reports and Payments........................................................     49
      6.12      Payments; Interest..................................................................     49
      6.13      Taxes...............................................................................     50
      6.14      Additional Tax Matters..............................................................     50
      6.15      Payment Currency....................................................................     50
      6.16      Schering's Records of Net Sales and Audits of the Same..............................     50
      6.17      PTC's Records of Net Sales and Audits of the Same...................................     51



                                       ii

                                                               EXECUTION VERSION


                                                                                                   
 ARTICLE 7  CONFIDENTIALITY.........................................................................     51
       7.1      Confidential Information............................................................     51
       7.2      Public Domain.......................................................................     52
       7.3      Legal Disclosure....................................................................     52
       7.4      Permitted Use and Disclosures.......................................................     52
       7.5      Public Disclosure...................................................................     53
       7.6      Termination of Prior Agreement......................................................     53
       7.7      Publications........................................................................     53
       7.8      Delay...............................................................................     54
       7.9      Confidential Terms..................................................................     54

 ARTICLE 8  REPRESENTATIONS AND WARRANTIES..........................................................     54
       8.1      PTC  ...............................................................................     54
       8.2      Schering............................................................................     55
       8.3      Knowledge of Pending Litigation.....................................................     55
       8.4      Additional Representations and Warranties of PTC....................................     55
       8.5      Additional Representations and Warranties of Schering...............................     56
       8.6      Disclaimer..........................................................................     56

 ARTICLE 9  INTELLECTUAL PROPERTY...................................................................     57
       9.1      Ownership of Disclosure of Program Inventions.......................................     57
       9.2      Assignment of Program Inventions by Employees, Agents or Independent Contractors....     58
       9.3      Patent Prosecution and Related Activities...........................................     58
       9.4      Cooperation; Request to Responsible Party...........................................     59
       9.5      Election Not to Prosecute...........................................................     59
       9.6      Third Party Infringement............................................................     60
       9.7      Infringement Claims by Third Parties................................................     61
       9.8      Certification Under Drug Price Competition and Patent Restoration Act...............     62
       9.9      Listing of Patents..................................................................     62
      9.10      Diligence with Respect to Marketing Exclusivity and Patent Term.....................     62

ARTICLE 10  INDEMNIFICATION.........................................................................     63
      10.1      PTC.................................................................................     63
      10.2      Schering............................................................................     63
      10.3      Procedure...........................................................................     63

ARTICLE 11  TERM AND TERMINATION....................................................................     64
      11.1      Term................................................................................     64
      11.2      Schering's Unilateral Termination Right.............................................     64
      11.3      Termination for Cause...............................................................     64
      11.4      Termination for Insolvency..........................................................     65
      11.5      Additional Terminations.............................................................     65
      11.6      Early Termination of Research Program...............................................     66
      11.7      Consequences of Certain Terminations by the Parties.................................     67
      11.8      Consequences of Certain Terminations by Schering....................................     73



                                       iii

                                                               EXECUTION VERSION


                                                                                                   
      11.9      Effect of Termination and Expiration................................................     74
     11.10      Survival............................................................................     74

ARTICLE 12  DISPUTE RESOLUTION......................................................................     75

ARTICLE 13  MISCELLANEOUS...........................................................................     75
      13.1      Governing Law.......................................................................     75
      13.2      Independent Contractors.............................................................     75
      13.3      Assignment..........................................................................     76
      13.4      Notices.............................................................................     76
      13.5      Force Majeure.......................................................................     77
      13.6      Advice of Counsel...................................................................     77
      13.7      Further Assurances..................................................................     77
      13.8      Severability........................................................................     77
      13.9      Waiver..............................................................................     77
     13.10      Complete Agreement..................................................................     77
     13.11      Use of Name.........................................................................     77
     13.12      Headings............................................................................     78
     13.13      Third Party Beneficiaries...........................................................     78
     13.14      Consequential Damages...............................................................     78
     13.15      Counterparts........................................................................     78



                                       iv

                                                               EXECUTION VERSION


                       COLLABORATION AND LICENSE AGREEMENT

         THIS COLLABORATION AND LICENSE AGREEMENT (the "Agreement"), dated as of
March 17, 2006 (the "Effective Date"), is entered into by and between PTC
Therapeutics, Inc. with a principal place of business at 100 Corporate Court,
South Plainfield, NJ 07080 ("PTC"), and Essex Chemie AG, a corporation organized
under the laws of Switzerland and a wholly-owned subsidiary of Schering-Plough
Corporation, with a place of business at Weystrasse 20, CH-6006 Lucerne 6,
Switzerland ("Schering"). PTC and Schering are sometimes referred to herein
individually as a "Party" and collectively as the "Parties".

                                   BACKGROUND

         WHEREAS, PTC and its Affiliates possess proprietary technology and
know-how related to the discovery, identification and/or synthesis of small
molecule drug candidates that inhibit the Hepatitis C virus ("HCV") by
modulating (either directly or indirectly) the function of the HCV internal
ribosome entry site ("HCV IRES"), and have identified certain chemical compounds
that are inhibitors of HCV; and

         WHEREAS, Schering and its Affiliates are engaged in the research,
development and marketing of products for the treatment of, among other things,
HCV and other viral diseases; and

         WHEREAS, PTC and Schering desire to collaborate in the discovery,
development and commercialization of Collaboration Compounds (defined below) for
use in the treatment of diseases and conditions in humans and animals, all as
set forth herein.

         NOW, THEREFORE, PTC and Schering, intending to be legally bound, hereby
agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         1.1 "Active Compound" means any compound that (x) [**] at a
concentration of [**] and (y) does not cause more than [**] [**], or such other
appropriate assay as may be mutually agreed by the Parties) at a concentration
that is [**]. Active Compounds include Highly Active Compounds.

         1.1A "Active Ingredient" means, with respect to any Collaboration
Compound, such Collaboration Compound, or any metabolites, prodrugs, solvates
(including without limitation hydrates), esters, salts, stereoisomers,
racemates, tautomers and polymorphs, of any such Collaboration Compound.

         1.2 "Affiliate" means, with respect to a specified Person, any Person
that directly or indirectly controls, is controlled by, or is under common
control with the specified Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the


                                       1

                                                               EXECUTION VERSION


power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" shall be presumed to exist
if one of the following conditions are met: (a) in the case of corporate
entities, direct or indirect ownership of more than fifty percent (50%) of the
stock or shares having the right to vote for the election of directors, and (b)
in the case of non-corporate entities, direct or indirect ownership of more than
fifty percent (50%) of the equity interest with the power to direct the
management and policies of such non-corporate entities.

         1.3 "Back-up Development Candidate" means those Collaboration Compounds
that Schering accepts as suitable for progression to pre-clinical Development as
a Back-Up Development Candidate for use in the Viral Field in accordance with
its then current internal decision-making processes. It is intended that the JSC
develop criteria for a Back-Up Development Candidate that are based on knowledge
gained as a result of the primary Development Candidate selection, and may
reflect properties identified as desirable by the JSC given the strengths and
weaknesses of a Development Candidate, including, for example, enhanced potency,
better pharmacokinetics, structural distinctiveness, or patentably distinct
chemical structure. It is understood that PTC or the JSC may propose, and
Schering shall have the right to designate, Collaboration Compounds as Back-Up
Development Candidates even if such compounds do not meet all of the criteria
set forth in this Section 1.3 or on Schedule 1.14.

         1.4 "Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in New
York, New York.

         1.5 "Collaboration Compound" means (i) the PTC Compounds, (ii) the
Schering Compounds, and (iii) any compound that is an Active Compound and is
either (x) first synthesized, or identified as a Viral IRES Inhibitor, by PTC or
Schering, or any of their respective Affiliates, or any Third Party working in
collaboration with or on behalf of PTC or Schering or any of their respective
Affiliates, following the Effective Date in the course of performing work under
the Research Program, or (y) claimed or covered in a Patent that claims a
Program Invention, together in the case of both (x) and (y) with any metabolites
and prodrugs, and any solvates (including without limitation hydrates), esters,
salts, stereoisomers, racemates, tautomers and polymorphs, of any such compound
that are themselves Active Compounds or are converted to an Active Compound in
vivo.

         1.6 "Combination Product" means any Licensed Product that contains or
comprises a Collaboration Compound and one or more active ingredients that are
not themselves Collaboration Compounds.

         1.7 "Commercially Reasonable Efforts" means (i) with respect to
Schering, that degree of skill, effort, expertise, and resources normally used
by an established pharmaceutical company and (ii) with respect to PTC, that
degree of skill, effort, expertise, and resources normally used by an
established biotechnology company, in each case with respect to a pharmaceutical
product which is of similar market potential at a similar stage in its product
life, taking into account the safety and efficacy of the compound or product,
the cost to Develop and Commercialize the product, the risks inherent in the
Development and Commercialization of the product, the competitiveness of the
marketplace, the proprietary position of the compound or product, the likelihood
of obtaining Regulatory Approval for the product, the potential economic


                                       2

                                                               EXECUTION VERSION


return from the applicable product, and other technical, legal, scientific,
medical or commercial factors that such Party deems in good faith to be
relevant.

         1.8 "Commercialization" and "Commercialize" shall refer to all
activities undertaken relating to the pre-marketing, marketing, promotion,
distribution and sale of a product, and the process of Commercialization,
respectively.

         1.9 "Competitor" means a Third Party or any of its Affiliates which,
(a) together with its Affiliates, had worldwide annual revenues from the sale of
pharmaceutical products in excess of [**] Dollars ($ [**]) during its most
recently reported fiscal year, or (b) is engaged in the Research, Development or
Commercialization of a product for the treatment of HCV (either alone or in
collaboration with a Third Party).

         1.10 "Compulsory License" means a compulsory license under PTC Patents
or Schering Patents obtained by a Third Party through the order, decree, or
grant of a competent governmental authority or court, authorizing such Third
Party to Develop, make, have made, use, sell, offer to sell or import a Schering
Viral Product in any country in the Territory.

         1.11 "Confidential Information" means all data or other information
regarding a Party's technology, products or business, or its activities related
to Collaboration Compound or Licensed Product, which a Party considers
proprietary or confidential and which is disclosed to the other Party pursuant
to this Agreement. Disclosures of Confidential Information may be made by
written, graphic, oral, or electronic means, or in any other form.

         1.12 "Control" or "Controlled" means, with respect to any Patents or
Know-How, possession (whether by ownership or license, other than pursuant to
this Agreement) by a Party or its Affiliates of the ability to grant the
licenses or sublicenses as provided for herein without violating the terms of
any agreement or other arrangement with any Third Party. Patents or Know-How
that are licensed or acquired by a Party following the Effective Date and that
would otherwise be considered to be under the Control of a Party shall not be
deemed to be under the Control of such Party if the application of such
definition in the context of any license grants or sublicenses under this
Agreement would require such Party to make any additional payments or royalties
to a Third Party in connection with such license grants or sublicenses, unless
the other Party agrees to cover the costs of such license grants or sublicenses.

         1.13 "Development" means non-clinical (including, without limitation,
pre-clinical) and clinical drug development activities and related research,
including, among other things: conducting toxicology studies, statistical
analysis and report writing, conducting clinical trials for the purpose of
obtaining or maintaining Regulatory Approval (including, without limitation,
post-marketing studies) and regulatory affairs related to all of the foregoing.
Development shall not include Research or any study that is initiated after
receipt of Regulatory Approval for a Licensed Product and is principally
intended to support the Commercialization of the Licensed Product. When used as
a verb, "Develop" means to engage in Development.

         1.14 "Development Candidate" means those Collaboration Compounds that
Schering accepts as suitable for progression to Development (starting with GLP
toxicology studies) for use in the Viral Field in accordance with its then
current internal decision making processes. It is


                                       3

                                                               EXECUTION VERSION


intended that Collaboration Compounds which are designated by Schering as
Development Candidates will meet a significant majority of the criteria set
forth in Schedule 1.14, as it may be amended from time to time by the JSC;
provided, however, it is understood that Schering shall have the right to
designate Collaboration Compounds as Development Candidates even if such
compounds do not meet all of the criteria set forth on Schedule 1.14.

         1.15 "Development Data" means all data and other information resulting
from the Development of any Collaboration Compound or Licensed Product following
the Effective Date, including without limitation, the results of any
non-clinical and clinical studies involving a Collaboration Compound or Licensed
Product.

         1.16 "EMEA" means the European Medicines Evaluation Agency, or any
successor agency with responsibility for regulating the Development, Manufacture
and Commercialization of human or veterinary pharmaceutical, diagnostic, or
prophylactic products.

         1.17 "EU" means the countries of the European Union, as they may exist
from time to time during the Term.

         1.18 "Exclusivity Term" means the period beginning on the Effective
Date and ending on the one-year anniversary of the expiration or termination of
the Research Term.

         1.19 "FDA" means the United States Food and Drug Administration, or any
successor agency with responsibility for regulating the Development, Manufacture
and Commercialization of human or veterinary pharmaceutical, diagnostic, or
prophylactic products.

         1.20 "Field" means the prevention, treatment or diagnosis of all
diseases or conditions in humans or animals. The Field consists of the Viral
Field and the Non-Viral Field.

         1.21 "First Commercial Sale" means (x) with respect to a Party, the
first bona fide arms length sale of a Licensed Product sold to a Third Party on
an arms' length basis in any country in the Territory by a Party, its Affiliates
or Sublicensees after Regulatory Approval has been obtained for such Licensed
Product in such country, and (y) with respect to a Third Party, the first bona
fide arms length sale of a finished pharmaceutical or veterinary product (in
each case in all formulations, dosage forms and packaging configurations,
including, but not limited to, as part of a combination product) to another
party (not an Affiliate or sublicensee of such Third Party) on an arms' length
basis in any country in the Territory by such Third Party, its Affiliates or
sublicensees after Regulatory Approval has been obtained for such finished
pharmaceutical or veterinary product in such country. Sales for clinical trial
purposes or compassionate or similar use shall not be considered to constitute a
First Commercial Sale.

         1.22 "FTE" means a full-time scientific or research/development person
dedicated by Schering or PTC (or their Affiliates, as applicable) to the
Research Program, or in the case of less than a full-time dedicated scientific
or research/development person, a full-time, equivalent scientific or
research/development person year, based upon a total of [**] hours per year.

         1.23 "FTE Rate" means [**] per full twelve-month (12-month) period per
FTE.


                                       4

                                                               EXECUTION VERSION


         1.24 "Full Development" means the commencement of any clinical trial
for a Schering Viral Product after (i) demonstration of Proof of Concept with
respect to such Schering Viral Product or initiation of synthesis of clinical
material for use in a Pivotal Trial of such Schering Viral Product, and (ii)
completion of all GLP toxicity studies required to support the initiation of a
Pivotal Trial for such Schering Viral Product.

         1.25 "GLP" means the current good laboratory practices applicable to
the Development of Licensed Products under applicable Law, to the extent that
such standards are not less stringent than the United States current good
laboratory practice, including but not limited to 21 C.F.R. Part 58.

         1.26 "Highly Active Collaboration Compound" means any Collaboration
Compound that is a Highly Active Compound.

         1.27 "Highly Active Compound" means any compound that (x[**] at a
concentration of [**] and (y) does not cause more than [**] (as measured by the
MTS assay, or such other appropriate assay as may be mutually agreed by the
Parties) at a concentration that is [**].

         1.28 "IND" means (a) (i) in the United States, an Investigational New
Drug Application, as defined in the federal Food, Drug and Cosmetic Act, as
amended from time to time (the "FD&C Act"), and the regulations promulgated
thereunder, as amended from time to time, that is required to be filed with the
FDA before beginning clinical testing of a Licensed Product in human subjects,
or any successor application or procedure, and (ii) any counterpart of such
Investigational New Drug Application in any country other than the United States
in the Territory (e.g., a CTX), and (b) all supplements and amendments that may
be filed with respect to any of the foregoing.

         1.29 "Initial Research Term" means the period commencing on the
Effective Date and, subject to the provisions of Sections 2.12 and Article 11,
terminating three (3) years from the Effective Date.

         1.30 "Invent" or "Invented" means inventorship as determined by
utilizing the standards for inventorship for patent applications under United
States patent law.

         1.31 "Joint Know-How" means all Know-How that was developed by one or
more employees, agents or consultants of PTC or any of its Affiliates and one or
more employees, agents or consultants of Schering or any of its Affiliates
during the course of performing work under the Research Program. Joint Know-How
shall exclude Joint Patents.

         1.32 "Joint Patents" means all Patents that claim Joint Inventions.

         1.33 "Know-How" means proprietary, non-public information and
materials, whether patentable or not, including, but not limited to, (a) ideas,
discoveries, inventions, improvements or trade secrets, (b) pharmaceutical,
chemical and biological materials, products and compositions, (c) tests, assays,
techniques, data, methods, procedures, formulas, and/or processes, (d) technical
and non-technical data and other information relating to any of the foregoing,
(e) drawings, plans, designs, diagrams, sketches, specifications and/or other


                                       5

                                                               EXECUTION VERSION


documents containing or relating to such information or materials, and (f)
business processes, price data and information, marketing data and information,
sales data and information, marketing plans and market research.

         1.34 "Laws" means all laws, statutes, rules, regulations, ordinances
and other pronouncements having the effect of law or similar binding effect of
any federal, national, multinational, supranational, state, provincial, county,
city or other political subdivision, or any agency, department or bureau
thereof.

         1.35 "Licensed Product" means a Schering Non-Viral Product, a Schering
Viral Product or a PTC Product.

         1.36 "Major Market" means each of the United States, Japan, Germany,
France, the United Kingdom, Italy and Spain.

         1.37 "Manufacture" means all activities related to the manufacturing of
a pharmaceutical product, or any ingredient thereof, including but not limited
to test method development and stability testing, formulation, process
development, manufacturing scale-up, manufacturing for use in non-clinical and
clinical studies, manufacturing for commercial sale, packaging, release of
product, quality assurance/quality control development, quality control testing
(including in-process, in-process release and stability testing) and release of
product or any component or ingredient thereof, and regulatory activities
related to all of the foregoing.

         1.38 "Marketing Exclusivity" means, with respect to a Licensed Product,
any data or market exclusivity periods, including (a) the marketing or data
exclusivity afforded approved drug products pursuant to (i) Sections 505(c),
505(j), and 505A of the FD&C Act, and the regulations promulgated thereunder, as
amended from time to time, or its equivalent in a country other than the United
States, or (ii) the orphan drug exclusivity afforded approved drugs designated
for rare diseases or conditions under Sections 526 and 527 of the FD&C Act, and
the regulations promulgated thereunder, as amended from time to time, or its
equivalent in a country other than the United States, and/or (iii) any other
period of data or market exclusivity listed in FDA's Orange Book or a foreign
equivalent for a Licensed Product, and/or (b) the coverage of such Licensed
Product by a Law which precludes the Regulatory Authority in a country from
granting Regulatory Approval or accepting an application for Regulatory Approval
for another product because the application for the other product (i) references
a Licensed Product, (ii) seeks approval of a product containing the same Active
Ingredient as that which is contained in the applicable Licensed Product and/or
(iii) seeks approval of a product for a use for which the applicable Licensed
Product is approved.

         1.39 "NDA" means (a) the single application or set of applications for
approval and/or pre-market approval to make and sell commercially a
pharmaceutical therapeutic, diagnostic, or prophylactic product or delivery
systems or device filed with the FDA, including without limitation all
information included in Drug Master Files related to such application(s), and
any related registrations with or notifications to the FDA, and (b) any
counterparts to such applications filed with any other national or supranational
Regulatory Authority in the Territory, and (c) all supplements and amendments
that may be filed with respect to any of the foregoing.


                                       6

                                                               EXECUTION VERSION


         1.40 "Net Sales" means, with respect to any Licensed Product, the gross
invoiced sales of such Licensed Product by a Party, its Affiliates and
Sublicensees to Third Parties, less the following deductions to the extent
included in the gross invoiced sales price for such Licensed Product or
otherwise directly paid or incurred by such Party or its Affiliates or
Sublicensees with respect to the sale of such Licensed Product:

              (a) bad debts actually written off which are attributable to sales
of the Licensed Product;

              (b) trade, quantity and cash discounts, and any other adjustments,
including, without limitation, those granted on account of price adjustments,
billing errors, rejected goods, damaged goods, returns, rebates, chargeback
rebates, fees, reimbursements or similar payments granted or given to
wholesalers or other distributors, buying groups, health care insurance carriers
or other institutions;

              (c) freight and insurance charges to the extent that they are
included in the price or otherwise paid by the purchaser;

              (d) customs or excise taxes, including, without limitation, import
duties, sales tax and other taxes (except income taxes) or duties relating to
sales;

              (e) any payment (other than a payment imposed as a result of
violation of applicable Law) in respect of sales to any governmental authority
in respect of any government-subsidized program, including, without limitation,
Medicare and Medicaid rebates;

              (f) [**];[**]distribution, packing, handling and transportation
charges for Licensed Product to the extent that they are included in the price
or otherwise paid by the customer;

              (g) [**]; and

              (h) [**].

The foregoing adjustments shall be consistent with customary accounting
practices within the selling Party and its Affiliates (or their respective
Sublicensees) and in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP"), consistently applied.

The Net Sales from any Combination Product shall be determined by multiplying
the Net Sales of the Combination Product (as determined based on the definition
of "Net Sales" excluding this paragraph) during the applicable royalty reporting
period, by the fraction, A/(A+B), where A is the weighted (by sales volume)
average sale price of the Licensed Product which includes the Collaboration
Compound when sold separately in finished form and for the same indication in
the country in which the Combination Product is sold (the "Monotherapy Licensed
Product") and B is the weighted (by sales volume) average sale price of the
other product(s) which contain the other active ingredient(s) included in the
Combination Product when sold separately as a monotherapy and in finished form
and for the same indication in the country in which the Combination Product is
sold, in each case during the applicable royalty reporting period or, if sales
of both the Monotherapy Licensed Product and the other product(s) did not occur
in such


                                       7

                                                               EXECUTION VERSION


period, then in the most recent royalty reporting period in which sales of both
occurred. In the event that such average sale price cannot be determined for
both the Monotherapy Licensed Product and all other products(s) included in the
Combination Product, then Net Sales for purposes of determining royalty payments
[**].

It is understood, however, that in certain countries in the Territory, a Party
or its Affiliates may Commercialize Licensed Products through a Third Party
distributor or agent under an arrangement in which such Party or its Affiliates
(x) transfer the Licensed Product to such distributor or agent at a fixed price
that is not necessarily related to the final selling price of the distributor or
agent, and (y) are not responsible for marketing and promoting such Licensed
Product in such countries and receive no compensation from the sale of such
Licensed Products by the distributor or agent. To the extent that such Third
Party distributors or agents would be considered "Sublicensees", the Parties
agree that the gross invoiced sales prices for the sale of the Licensed Product
by the applicable Party or its Affiliates to such Third Parties shall be the
price to be used for purposes of computing Net Sales in such countries.

         1.41 "Non-Viral Field" means the prevention, treatment or diagnosis of
all diseases or conditions in humans or animals, excluding the Viral Field.

         1.42 "NV Compounds" means Collaboration Compounds that are not Highly
Active Collaboration Compounds.

         1.43 "Patent" means all existing patents and patent applications and
all patent applications hereafter filed, including any continuations,
continuations-in-part, divisions, provisionals or any substitute applications,
any patent issued with respect to any such patent applications, any reissue,
reexamination, renewal or extension (including any supplementary protection
certificate) of any such patent, and any confirmation patent or registration
patent or patent of addition based on any such patent, and all foreign
counterparts of any of the foregoing.

         1.44 "Person" means any natural person, corporation, general
partnership, limited partnership, joint venture, proprietorship or other
business organization.

         1.45 "Pivotal Trial" means a human clinical trial that is designed to
confirm with statistical significance the efficacy and safety of a drug in a
given patient population, the results of which are intended to form the basis
for approval of an NDA by a Regulatory Authority.

         1.46 "Program Invention" means all inventions that are Invented by one
or more employees, agents or consultants of PTC or any of its Affiliates and/or
one or more employees, agents or consultants of Schering or any of its
Affiliates in the course of performing work under the Research Program.

         1.47 "Proof of Concept" means that the data from a randomized,
placebo-controlled study sponsored by Schering or its Affiliates demonstrates
that [**] In the event that Schering elects to initiate clinical Development for
a Schering Viral Product in an indication other than the treatment of HCV, the
Parties shall agree upon a corresponding definition of "Proof of Concept" for
such indication. For the avoidance of doubt, Proof of Concept shall be deemed to
have been met with respect to any Schering Viral Product for which Schering
commences all of those GLP


                                       8

                                                               EXECUTION VERSION


toxicity studies referenced in Section 1.24(ii).

         1.47A "PTC Background Patents" means the Patents within the Control of
PTC either as of the Effective Date or thereafter during the Term, which are
listed on Schedule 1.47A, as may be modified by mutual written agreement of the
Parties.

         1.48 "PTC Compounds" means (i) compounds that are synthesized by or on
behalf of PTC or its Affiliates prior to the Effective Date and that are known
to PTC to be Highly Active Compounds as of the Effective Date, (ii) Active
Compounds that are either (x) synthesized prior to the Effective Date during the
course of PTC's medicinal chemistry program directed at viral IRES inhibitors,
or (y) synthesized or Invented by or on behalf of PTC or its Affiliates prior to
the end of the Research Term and claimed in a Patent (including without
limitation any patent application) Controlled by PTC as having activity as an
antiviral compound that inhibits the HCV virus by modulating the function of the
HCV IRES, or for which sufficient support exists in the written description of
such Patent or patent application to support a claim and there is the ability to
prosecute such claim, and (iii) any compound that is first synthesized by or on
behalf of PTC or its Affiliates prior to the end of the Research Term and is
both (a) identified by PTC or its Affiliates prior to the end of the Research
Term as an Active Compound and (b) identified as a Viral IRES Inhibitor in
accordance with the provisions of Section 2.13, together, in the case of each of
(i), (ii) and (iii), with any metabolites and prodrugs, and any solvates
(including without limitation hydrates), esters, salts, stereoisomers,
racemates, tautomers and polymorphs of any such compounds that are themselves
Active Compounds or are converted to an Active Compound in vivo. Attached hereto
as Schedule 1.48 is a list of all PTC Compounds believed by PTC to exist as of
the Effective Date; provided, however, it is understood that any compound that
meets the criteria set forth in this Section 1.48 shall be deemed to be a PTC
Compound regardless of whether such compound is identified on Schedule 1.48.

         1.49 "PTC Intellectual Property" means PTC Patents and PTC Technology
Platform.

         1.50 "PTC Know-How" means Know-How within the Control of PTC, either as
of the Effective Date or thereafter during the Term, which is proprietary to PTC
or its Affiliates and either (i) relates to the HCV IRES, to compounds that are
Viral IRES Inhibitors or that are Collaboration Compounds, methods of preparing
or using Viral IRES Inhibitors or Collaboration Compounds or methods of
treating, diagnosing or preventing any disease or condition using Viral IRES
Inhibitors or Collaboration Compounds, or (ii) is necessary or useful for the
Research, Development, Manufacture, use or sale of Collaboration Compounds or
Licensed Products and is developed prior to the end of the Research Term.
Notwithstanding anything herein to the contrary, PTC Know-How shall exclude PTC
Patents but shall include Joint Know-How to the extent Controlled by PTC.
Information within the PTC Know-How shall cease to be proprietary at such time
as it becomes publicly available, or otherwise becomes known to Third Parties
without an obligation of confidentiality, in each case other than through a
breach by Schering, its Affiliates or Sublicensees of the obligations under
Article 7. Furthermore, information within the PTC Know-How shall not be deemed
proprietary to PTC if it is (x) known to Schering prior to disclosure under this
Agreement, as shown by written evidence, or (y) is independently developed by
Schering or its Affiliates without the use of or reliance on any proprietary,
non-public information within the PTC Know-How, as shown by contemporaneous


                                       9

                                                               EXECUTION VERSION


written evidence.

         1.51 "PTC NV Know-How" means, with respect to a Designated NV Compound
designated by Schering, any PTC Know-How which (x) relates to such Designated NV
Compound (or a Related Compound), methods of preparing or using such Designated
NV Compound (or a Related Compound) in the Non-Viral Field or methods of
treating, diagnosing or preventing any disease or condition in the Non-Viral
Field using such Designated NV Compound (or a Related Compound), and (y) is
developed prior to the date that Schering designated such NV Compound as a
Designated NV Compound.

         1.52 "PTC NV Patents" means, with respect to a Designated NV Compound
designated by Schering, any Patents Controlled by PTC, either as of the
Effective Date or thereafter during the Term, which (x) claim inventions that
are Invented prior to the date that Schering designates such NV Compound as a
Designated NV Compound, and (y) claim or cover (i) the composition of matter of
such Designated NV Compound (or a Related Compound), (ii) the use of such
Designated NV Compound (or a Related Compound) in the Non-Viral Field, (iii) a
method of treating, diagnosing or preventing any disease or condition in the
Non-Viral Field using such Designated NV Compound (or a Related Compound) or
(iv) a method of Manufacturing such Designated NV Compound (or a Related
Compound).

         1.53 "PTC Patents" means the Patents within the Control of PTC, either
as of the Effective Date or thereafter during the Term, which (i) relate to
Licensed Products, HCV IRES, Viral IRES Inhibitors, or methods of preparing or
using Licensed Products, Viral IRES Inhibitors, or methods of treating,
diagnosing or preventing any disease or condition using Licensed Products or
Viral IRES Inhibitors, or relate to methods or materials used for discovering,
identifying, or assaying for Viral IRES Inhibitors or Licensed Products, (ii)
contain claims that would be infringed by the Research, Development,
Manufacture, use, import or sale of Collaboration Compounds or Licensed Products
in the Field, and (iii) claim inventions Invented prior to the end of the
Research Term. The PTC Patents shall include the PTC NV Patents, as well as the
Joint Patents to the extent Controlled by PTC. The PTC Patents shall not include
the PTC Background Patents. The PTC Patents existing as of the Effective Date
are listed in Schedule 1.53.

         1.54 "PTC Product" means any finished pharmaceutical or veterinary
product containing a Designated NV Compound designated by PTC (or a Related
Compound) that PTC or its Affiliates Develop and/or Commercialize (either alone
or in collaboration with one or more Third Parties) in the Non-Viral Field in
accordance with the provisions of Article 4A, in all formulations, dosage forms
and package configurations, including, but not limited to, as part of a
Combination Product. For the avoidance of doubt, a PTC Product may not include a
Highly Active Collaboration Compound, a Schering Field NV Compound (unless such
designation has lapsed pursuant to Section 4.1(a)), a Designated NV Compound
designated by Schering (or a Related Compound), unless such designation has
lapsed pursuant to Section 4A.1(c), or any Schering Compound.

         1.55 "PTC Technology Platform" means (i) PTC Know-How, and (ii) any PTC
Compounds.


                                       10

                                                               EXECUTION VERSION


         1.56 "Regulatory Approval" means any approvals, licenses, registrations
or authorizations of any federal, state, multinational, supranational or local
regulatory agency, department, bureau or other governmental entity necessary or
reasonably useful for the importation, commercial manufacture, use, sale or
other Commercialization of a pharmaceutical product in a regulatory
jurisdiction, including but not limited to pricing and/or reimbursement
approvals.

         1.57 "Regulatory Authority" means any governmental regulatory authority
involved in granting Regulatory Approvals with respect to any Licensed Product
in the Territory, including, without limitation, the FDA and the European
Commission.

         1.58 "Related Compound" means, with respect to a particular NV
Compound, any Collaboration Compound that (i) has the same core structure as
such NV Compound, and (ii) has an activity level against the same target that
was utilized to designate the applicable NV Compound that is at least [**]
percent ([**]%) of the activity level of such NV Compound when measured in the
same assay that was utilized to designate such NV Compound as a Designated NV
Compound (i.e., if the Designated NV Compound has [**] [**] against the same
target). For purposes of this definition, "core structure" means the exact atom
arrangement that makes up the original core structure present in the structure
of the applicable NV Compound, minus any substituent R groups. Notwithstanding
the foregoing, Related Compounds shall not encompass any compound whose activity
against the given target is a result of general toxic properties or other
nonspecific inhibitory properties, e.g. denaturing of a protein. Furthermore,
Related Compounds shall not encompass any Highly Active Compounds, any Schering
Compounds, any Schering Field NV Compounds or any Collaboration Compounds that
are either NV Compounds previously designated by either Party pursuant to
Section 4A.1, or Related Compounds to such other NV Compounds previously
designated by either Party pursuant to Section 4A.1 (unless such designation has
lapsed pursuant to Section 4A.1(c)).

         1.59 "Research" means all activities relating to the identification and
early pre-clinical testing of compounds, including synthesis and testing by in
vitro assay of compounds, the further testing, including structural studies
thereof and/or via animal model, leading up to, but not including, GLP
toxicology testing. Research shall exclude Development.

         1.60 "Research Plan" means the specific plan for conducting the
Research Program, as described in Section 2.1 and attached hereto as Schedule
1.60, as such plan may be revised from time to time by the JSC in accordance
with the provisions of Article 3.

         1.61 "Research Program" means the collaborative research program
undertaken by the Parties pursuant to Article 2 of this Agreement to discover,
identify, synthesize and evaluate PTC Compounds and other Collaboration
Compounds for use in the Viral Field.

         1.62 "Research Technology" means all tangible and intangible know-how,
trade secrets, inventions (whether or not patentable), discoveries,
developments, data, information, and physical, chemical or biological material,
and any replication of or any part of any of the foregoing, that was made by
employees or agents of PTC, Schering, and/or any of their respective Affiliates,
either alone or jointly, during the course of and in the conduct of the Research
Program during the Research Term.


                                       11

                                                               EXECUTION VERSION


         1.63 "Research Term" means the period during which the Parties shall
conduct the Research Program pursuant to the provisions of Article 2. The
Research Term shall include the Initial Research Term and the Extended Research
Term. The Research Term will automatically terminate upon termination of the
Research Program pursuant to Sections 2.12 or Article 11, or upon termination of
this Agreement for any reason.

         1.64 "Schering Background Know-How" means Know-How within the Control
of Schering, either as of the Effective Date or thereafter during the Research
Term, which is proprietary to Schering or its Affiliates and either (i) relates
to the HCV IRES, to compounds that are Viral IRES Inhibitors, methods of
preparing or using Viral IRES Inhibitors, or methods of treating, diagnosing or
preventing any disease or condition using Viral IRES Inhibitors, or (ii) is
necessary or useful for the Research to be performed under the Research Plan.
Notwithstanding anything herein to the contrary, Schering Background Know-How
shall not include Schering Background Patents. Information within the Schering
Background Know-How shall cease to be proprietary at such time as it becomes
publicly available, or otherwise becomes known to Third Parties without an
obligation of confidentiality, in each case other than through a breach by PTC,
its Affiliates or Sublicensees of the obligations under Article 7. Furthermore,
information within the Schering Background Know-How shall not be deemed
proprietary to Schering if it is (x) known to PTC prior to disclosure under this
Agreement, as shown by written evidence, or (y) independently developed by PTC
or its Affiliates without the use of or reliance on any proprietary, non-public
information within the Schering Background Know-How, as shown by contemporaneous
written evidence.

         1.65 "Schering Background Patents" means Patents within the Control of
Schering, either as of the Effective Date or thereafter during the Research
Term, which (i) contain claims that would be infringed by the Research to be
performed under the Research Plan, including but not limited to chemical
optimization or initial biological characterization of Collaboration Compounds,
or (ii) relate to methods or materials used for discovering, identifying, or
assaying for Viral IRES Inhibitors. The Schering Background Patents existing as
of the Effective Date are listed in Schedule 1.65.

         1.66 "Schering Background Technology" means Schering Background
Know-How and Schering Background Patents.

         1.67 "Schering Compounds" means Active Compounds that are either (x)
identified as Viral IRES Inhibitors by Schering prior to the Effective Date, or
(y) first synthesized or identified by Schering or its Affiliates during the
Term through the use of PTC Know-How that is proprietary to PTC at the time of
first use for synthesis or identification of such Active Compounds by Schering
or its Affiliates or through the use of Joint Know-How, together, in the case of
both (x) and (y), with any metabolites and prodrugs, and any solvates (including
without limitation hydrates), esters, salts, stereoisomers, racemates, tautomers
and polymorphs of any such synthesized compounds that are themselves Active
Compounds or are converted to an Active Compound in vivo. Attached hereto as
Schedule 1.67 is a list of all Schering Compounds believed by Schering to exist
as of the Effective Date; provided, however, it is understood that any compound
that meets the criteria set forth in this Section 1.67 shall be deemed to be a


                                       12

                                                               EXECUTION VERSION


Schering Compound regardless of whether such compound is identified on Schedule
1.67.

         1.68 "Schering Field NV Compounds" means any NV Compound that Schering
elects to Develop as a Schering Viral Product in accordance with the provisions
of Section 4.1, together with any Related Compounds.

         1.69 "Schering Intellectual Property" means Schering Patents and
Schering Technology.

         1.70 "Schering Know-How" means Know-How within the Control of Schering
that is developed by Schering or its Affiliates during the Term in the conduct
of the Research, Development or Manufacture of Collaboration Compounds or
Licensed Products, which is proprietary to Schering or its Affiliates.
Notwithstanding anything herein to the contrary, Schering Know-How shall exclude
Schering Patents but shall include Joint Know-How to the extent Controlled by
Schering. Information within the Schering Know-How shall cease to be proprietary
at such time as it becomes publicly available, or otherwise becomes known to
Third Parties without an obligation of confidentiality, in each case other than
through a breach by PTC, its Affiliates or Sublicensees of the obligations under
Article 7. Furthermore, information within the Schering Know-How shall not be
deemed proprietary to Schering if it is (x) known to PTC prior to disclosure
under this Agreement, as shown by written evidence, or (y) is independently
developed by PTC or its Affiliates without the use of or reliance on any
proprietary, non-public information within the Schering Know-How, as shown by
contemporaneous written evidence.

         1.71 "Schering Licenses" means the licenses and other rights granted or
to be granted to Schering pursuant to Sections 5.1(a), 5.1(b), 5.2, 5.3(a) and
5.4(a).

         1.72 "Schering Non-Viral Product" means any finished pharmaceutical or
veterinary product containing a Designated NV Compound designated by Schering
(or a Related Compound) that Schering or its Affiliates Develop and/or
Commercialize (either alone, or in collaboration with one or more Third Parties)
in the Non-Viral Field in accordance with the provisions of Article 4A, or a
Related Compound, in all formulations, dosage forms and packaging
configurations, including, but not limited to, as part of a Combination Product.
For the avoidance of doubt, a Schering Non-Viral Product may not include any
Designated NV Compound designated by PTC (or a Related Compound), unless such
designation has lapsed pursuant to Section 4A.1(c). Notwithstanding the
foregoing, a product Developed by Schering that contains either (x) both an NV
Compound and a Highly Active Collaboration Compound, or (y) an NV Compound that
Schering elects to Develop as a Schering Viral Product in accordance with the
provisions of Section 4.1, shall not be deemed a Schering Non-Viral Product and
shall instead be deemed a Schering Viral Product.

         1.73 "Schering NV Know-How" means, with respect to a Designated NV
Compound designated by PTC, any Schering Know-How which (x) relates to such
Designated NV Compound (or a Related Compound), methods of preparing or using
such Designated NV Compound (or a Related Compound) in the Non-Viral Field or
methods of treating, diagnosing or preventing any disease or condition in the
Non-Viral Field using such Designated NV Compound (or a Related Compound), and
(y) is developed prior to the date that PTC designated such NV Compound as a
Designated NV Compound.


                                       13

                                                               EXECUTION VERSION


         1.74 "Schering NV Patents" means, with respect to a Designated NV
Compound designated by PTC, any Patents Controlled by Schering during the Term
which (x) claim inventions that are Invented prior to the date that PTC
designates such NV Compound as a Designated NV Compound, and (y) claim or cover
(i) the composition of matter of such Designated NV Compound (or a Related
Compound), (ii) the use of such Designated NV Compound (or a Related Compound)
in the Non-Viral Field, (iii) a method of treating, diagnosing or preventing any
disease or condition in the Non-Viral Field using such Designated NV Compound
(or a Related Compound) or (iv) a method of Manufacturing such Designated NV
Compound (or a Related Compound).

         1.75 "Schering Patents" means those Patents Controlled by Schering
during the Term which (i) claim Program Inventions, or other inventions Invented
by Schering or its Affiliates during the Term in the conduct of Research,
Development or Manufacture of Highly Active Collaboration Compounds (or, in the
case of the license to be granted under Section 5.3(b), NV Compounds), Schering
Field NV Compounds or Schering Viral Products, and (ii) contain claims that
would be infringed by the Research, Development, Manufacture, use, import or
sale of Highly Active Collaboration Compounds (or, in the case of the license to
be granted under Section 5.3(b), NV Compounds), Schering Field NV Compounds or
Schering Viral Products in the Field. The Schering Patents shall include the
Joint Patents to the extent Controlled by Schering, but except as explicitly
provided in this Section 1.75 do not include the Schering NV Patents.

         1.76 "Schering Technology" means (i) Schering Know-How, and (ii) any
Schering Compounds.

         1.77 "Schering Viral Product" means any finished pharmaceutical or
veterinary product containing either a Highly Active Collaboration Compound or
Schering Field NV Compound, in each case in all formulations, dosage forms and
packaging configurations, including, but not limited to, as part of a
Combination Product. For the avoidance of doubt, a Schering Viral Product may
not include any Designated NV Compound designated by PTC pursuant to Section
4A.1 (or any Related Compound), unless such designation has lapsed pursuant to
Section 4A.1(c).

         1.78 "Specified Third Party Patents" means any Patents owned or
controlled by a Third Party (and not Controlled by a Party or its Affiliates)
which claim the composition of matter of a Highly Active Collaboration Compound
or Schering Field NV Compound, the use of a Highly Active Collaboration Compound
or Schering Field NV Compound in the Field, a method of treating, diagnosing or
preventing any disease or condition through the use of a Highly Active
Collaboration Compound or Schering Field NV Compound, or a method of
manufacturing a Highly Active Collaboration Compound or Schering Field NV
Compound.

         1.79 "Sublicensee" means a Third Party to whom a Party has granted a
license or sublicense to make, have made, import, use, sell, or offer for sale
Licensed Products pursuant to Section 5.5(b), 5.5(c) or 5.5(d). Third Parties
that are permitted to distribute and resell Licensed Product purchased from
Schering, its Affiliates or any entity designated by Schering or its Affiliates,
or from PTC or its Affiliates, or any entity designated by PTC or its
Affiliates, shall be


                                       14

                                                               EXECUTION VERSION


considered Sublicensees only if such Third Parties are also responsible for
marketing and promoting the applicable Licensed Product in the applicable
country. In addition, Third Parties that Manufacture Licensed Product on behalf
of a Party for supply to a Party or its Affiliates or Sublicensees (and have no
other rights to Develop or Commercialize such Licensed Product) are not
Sublicensees.

         1.80 "Territory" means all countries of the world.

         1.81 "Third Party" means any entity other than PTC or Schering or any
of their respective Affiliates.

         1.82 "Third Party License Agreement" means any contract or agreement
pursuant to which a Party or its Affiliates obtains or has obtained rights to or
under any Third Party Patents or Third Party Know-How to Research, Develop,
Manufacture or Commercialize Collaboration Compounds or Licensed Products in the
Field. The Third Party License Agreements existing as of the Effective Date are
set forth in Schedule 1.82

         1.83 "Valid Claim" means a claim of any issued, unexpired Patent which
has not been revoked, withdrawn, canceled, disclaimed or held unenforceable or
invalid by a decision of a court or tribunal of competent jurisdiction from
which no appeal can be taken, or with respect to which an appeal is not taken
within the time allowed for appeal, and which has not been disclaimed, denied or
admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise.

         1.84 "Viral Field" means the prevention, treatment or diagnosis of all
viral diseases or conditions in humans or animals.

         1.85 "Viral IRES Inhibitor" means a compound which has as its primary
mechanism of action the inhibition (either directly or indirectly) of viral
replication by virtue of decreasing IRES-dependent translation of viral
proteins. For clarity, a compound which broadly inhibits viral replication as a
result of general toxic properties or other nonspecific inhibitory properties
shall not be considered a Viral IRES Inhibitor.

         ADDITIONAL DEFINITIONS. Each of the following definitions is set forth
in the section of this Agreement indicated below:

DEFINITION                                                SECTION
- ----------                                                -------
AEs                                                       4.10(d)
Agreement                                                 Preamble
Blocking Patent                                           11.5(b)
Collaboration Patents                                     9.3(e)
Designated NV Compound                                    4A.1(a)
Designation Date                                          4A.1(a)
Development Milestones Group                              6.2
Development Plan                                          4.3
Dollars or "$"                                            6.15

                                       15

                                                               EXECUTION VERSION


Effective Date                                            Preamble
Existing Third Party License Agreement                    6.7(f)
Extended Research Plan                                    2.8(b)
Extended Research Term                                    2.8(a)
FD&C Act                                                  1.28
GAAP                                                      1.40
HCV                                                       Recitals
HCV IRES                                                  Recitals
Indemnitor                                                10.3
Invention Policy                                          9.1
IRES Research Program                                     2.10(a)
Joint Inventions                                          9.1(c)
JPT                                                       9.3(e)
JSC                                                       3.1
key internal Schering project team meetings               3.8
Liability                                                 10.1
LIBOR                                                     6.12
Materials                                                 2.9
Monotherapy Licensed Product                              1.40
Party; Parties                                            Preamble
Project Leaders                                           3.7
PTC                                                       Preamble
PTC Licensed Compound Patents                             9.3(b)
PTC Indemnitee                                            10.2
PTC Triggering Event                                      11.6(a)
Publishing Party                                          7.7
Reviewing Party                                           7.7
Schering                                                  Preamble
Schering Indemnitee                                       10.1
Schering Triggering Event                                 4.12
Second Schering Viral Product                             6.3
Term                                                      11.1
Terminated Compound                                       11.7(b)(ii)
Termination Date                                          11.7(b)(iii)
Third Party Activity                                      2.10(e)
Unqualified Blocking Opinion                              11.5(b)
Unqualified Opinion                                       6.7(a)
USPTO                                                     8.4(i)


                                       16

                                                               EXECUTION VERSION


                                    ARTICLE 2

                                RESEARCH PROGRAM

         2.1 Collaborative Research. Commencing on the Effective Date, and
subject to the terms and conditions herein, the Parties shall each use
Commercially Reasonable Efforts to conduct the Research Program on a
collaborative basis pursuant to the Research Plan. The Research Plan, among
other things, shall specify the scientific direction of the program, the
specific research objectives to be achieved during the Research Program, the
specific responsibilities of each of the Parties under the Research Plan, and
the specific number of FTEs to be provided by PTC (and funded by Schering
pursuant to Section 2.5(a)) to support the Research Plan. The Parties agree that
the goal of the Research Program is to identify one or more Highly Active
Collaboration Compounds that are suitable for designation as potential
Development Candidates, as well as to identify one or more Highly Active
Collaboration Compounds that are suitable for designation as potential Back-Up
Development Candidates. The Research Plan may be amended by the JSC from time to
time in accordance with the provisions of Article 3.

         2.2 Conduct of the Research; Allocation of Responsibilities.

              (a) The Research Program will be managed and directed by the JSC,
as provided in Article 3 hereof.

              (b) Subject to the oversight of the JSC, PTC shall, with the
advice and assistance of Schering, be primarily responsible for the chemical
optimization activities and biological/pharmacological characterization
activities as defined in the Research Plan, and Schering shall, with the advice
and assistance of PTC, be responsible for all other aspects of the Research Plan
that are necessary to determine whether or not a Highly Active Collaboration
Compound is suitable for designation as a potential Development Candidate or a
Back-Up Development Candidate.

              (c) During the Research Term, (i) PTC shall disclose to Schering
such of the PTC Know-How as Schering reasonably needs to perform its obligations
and assigned tasks under the Research Plan, and (ii) Schering shall disclose to
PTC such of the Schering Background Know-How as PTC reasonably needs to perform
its obligations and assigned tasks under the Research Plan. Notwithstanding the
foregoing, nothing in this Agreement shall require PTC to disclose to Schering
its Know-How or Patents relating to its GEMS screening technology (other than
the published or issued Patents listed on Schedule 1.47A).

              (d) All work conducted by either Party in the course of the
Research Program shall be completely and accurately recorded, in sufficient
detail and in good scientific manner, in separate laboratory notebooks distinct
from other work being conducted by such Party. On reasonable notice, and at
reasonable intervals, each Party shall have the right to inspect and copy all
such records of the other Party or its Affiliates reflecting Research Technology
or work done under the Research Program.


                                       17

                                                               EXECUTION VERSION


              (e) The Parties acknowledge and agree that neither Party
guarantees the success of the Research Program tasks undertaken hereunder.

         2.3 PTC Research Efforts. During the Research Term, PTC agrees to
commit to the Research Program such number of FTEs in its or its Affiliates'
employ as shall be specified in the Research Plan. In conducting the Research
Program, PTC shall be responsible for the tasks allocated to it under the
Research Plan. In the performance of such work, PTC shall maintain and utilize
scientific and research/development staff, laboratories, offices and other
facilities consistent with such undertaking. PTC shall use personnel with
sufficient skills and experience as are required to accomplish efficiently and
expeditiously the objectives of the Research Program as set forth in the
Research Plan in good scientific manner and in compliance in all material
respects with all applicable Laws.

         2.4 Schering Research Efforts. During the Research Term, Schering shall
commit to the Research Program sufficient FTEs in its or its Affiliates' employ
to conduct Schering's obligations under the Research Plan, and shall report to
the JSC the approximate number of Schering FTEs that are engaged in the Research
Program. In conducting the Research Program, Schering shall be responsible for
the tasks allocated to it under the Research Plan. In the performance of such
work, Schering shall maintain and utilize scientific and research/development
staff, laboratories, offices and other facilities consistent with such
undertaking. Schering shall use personnel with sufficient skills and experience
as are required to accomplish efficiently and expeditiously the objectives of
the Research Program as set forth in the Research Plan in good scientific manner
and in compliance in all material respects with all requirements of applicable
Laws.

         2.5 Research Funding; Responsibility for Costs of the Research Program.

              (a) During the Initial Research Term, Schering agrees to provide
PTC with funding (at the FTE Rate) for the number of FTEs set forth in the
Research Plan, as it may be amended from time to time. The JSC shall have the
discretion to adjust the number of FTEs to be provided by PTC and supported by
Schering during the Initial Research Term consistent with changes in the
Research Plan; provided that in the initial phase of the Research Plan (prior to
Schering's acceptance of the first Development Candidate), the JSC shall not (i)
increase the number of FTEs funded by Schering on an annualized basis to greater
than [**], or (ii) decrease the number of FTEs funded by Schering on an
annualized basis to fewer than [**]. Following Schering's acceptance of the
first Development Candidate, the number of FTEs to be funded by Schering will be
decreased by the JSC to reflect the decreased activities, if any, required under
the Research Plan to identify a Back-up Development Candidate and support the
accepted Development Candidate. It is currently expected that the number of FTEs
to be funded by Schering during the second phase of the Research Plan (following
Schering's acceptance of the first Development Candidate) will be approximately
[**] of the number that is funded by Schering during the initial phase of the
Research Plan; provided, however, that in no case will the number of FTEs funded
by Schering during this second phase of the Research Plan exceed [**] or be
fewer than [**] on an annualized basis. Following designation of a Back-Up
Development Candidate by Schering, the number of FTEs to be funded by Schering
will be


                                       18

                                                               EXECUTION VERSION


decreased by the JSC to reflect the decreased activities required under the
Research Plan to support the accepted Back-up Development Candidate and accepted
Development Candidate. Funding of any PTC FTEs by Schering during the Extended
Research Term shall be as provided in Section 2.8.

              (b) The amounts due to PTC under this Section 2.5 shall be payable
in equal installments on a quarterly basis, on the fifteenth (15th) day of each
January, April, July and October of each year during the Research Term.

              (c) Except for the FTE funding to be provided by Schering pursuant
to Sections 2.5(a) and 2.8, each Party shall be solely responsible for all costs
and expenses incurred by it in performing activities assigned to it under the
Research Plan. Notwithstanding the foregoing, to the extent that PTC agrees to
undertake any activities that are not related to the chemical optimization or
biological or pharmacological characterization of Collaboration Compounds,
Schering shall be responsible for any PTC internal costs (such costs to be
calculated by multiplying the number of PTC FTEs by the FTE Rate), as well as
any external costs incurred by PTC in performing such activities (but only to
the extent such external costs have been approved by Schering in advance).

         2.6 Disclosure of Facilitating Research Technology. Each Party will
disclose to the other all Research Technology discovered, Invented, or otherwise
made by such Party that is necessary to enable the other Party to perform its
obligations under the Research Plan or to exercise its rights under this
Agreement, including, without limitation, information regarding Collaboration
Compounds, activities of Collaboration Compounds, and results of in vitro and in
vivo studies, assay techniques and new assays. Such Research Technology will be
promptly disclosed to the other Party, with meaningful discoveries or advances
being communicated as promptly as practicable after such information is obtained
or its significance is appreciated.

         2.7 Information Regarding Collaboration Compounds. PTC shall inform
Schering and the JSC in writing on a quarterly basis and otherwise reasonably
promptly in response to Schering's written request of its discovery, synthesis,
or biological characterization of Collaboration Compounds during the Research
Term. In addition, the Project Leaders shall implement procedures for the prompt
sharing between them of information and materials generated under the Research
Plan relating to the discovery, synthesis, or biological characterization of
Collaboration Compounds. Without limiting PTC's obligations pursuant to Sections
2.6, 2.14 or 3.9, PTC will provide Schering with such information regarding such
Collaboration Compounds as Schering shall reasonably request in writing,
including without limitation the structures of Collaboration Compounds and the
results of PTC's testing of such compounds, and will provide Schering with
samples of such Collaboration Compounds in amounts to be agreed upon by the
Parties but which are sufficient to enable Schering to complete its
responsibilities to characterize such Collaboration Compounds according to the
Research Plan. Without limiting Schering's obligations pursuant to Sections 2.6,
2.14 or 3.9, results of studies performed by Schering on such Collaboration
Compounds will be communicated to PTC and the JSC on a quarterly basis during
the Research Term.


                                       19

                                                               EXECUTION VERSION


         2.8 Extension of Research Term.

              (a) By written notice to PTC given at least [**] prior to the
expiration of the Initial Research Term, Schering may extend the Research Term
for an additional year. In the event that Schering has elected to extend the
Research Term for an additional year, then, by written notice to PTC given at
least [**] prior to the then scheduled expiration of the Research Term, Schering
may extend the Research Term for a further additional year, subject to PTC's
written consent within [**] of receipt of Schering's notice, such consent not to
be unreasonably withheld or delayed. Any period during which the Research Term
has been extended beyond the Initial Research Term pursuant to this Section 2.8
is referred to herein as the "Extended Research Term".

              (b) During the Extended Research Term, the JSC shall propose a
revised Research Plan (the "Extended Research Plan"), which shall specify the
number of FTEs to be contributed by PTC and funded by Schering and the specific
Research activities to be performed by PTC during such period; provided,
however, that (i) PTC shall not be required to perform a level of chemical
optimization or biological or pharmacological characterization activities that
cannot reasonably be accomplished by the number of FTEs to be funded by
Schering, and (ii) PTC shall not be required to perform activities that are not
related to chemical optimization or biological/pharmacological characterization
of Collaboration Compounds without PTC's consent.

         2.9 Material Transfer. In order to facilitate the Research Program,
either Party may provide to the other Party certain biological materials or
chemical compounds including, but not limited to Collaboration Compounds,
receptors, reagents and screens (collectively, "Materials") owned by or licensed
to the supplying Party (other than under this Agreement) for use by the other
Party in furtherance of the Research Program. Except as otherwise provided under
this Agreement, all such Materials delivered to the other Party shall, subject
to the licenses granted the other Party pursuant to Article 5, remain the sole
property of the supplying Party, shall be used only in furtherance of the
Research Program and solely under the control of the other Party and its
Affiliates, shall not be used or delivered to or for the benefit of any Third
Party without the prior written consent of the supplying Party, and shall not be
used in research or testing involving human subjects. The Materials supplied
under this Section 2.9 must be used with prudence and appropriate caution in any
experimental work, since not all of their characteristics may be known. Each
Party represents and warrants to the other that it has the right to provide the
Materials to the other Party for the uses contemplated herein. EXCEPT AS
EXPRESSLY SET FORTH IN THIS SECTION 2.9 OR IN SECTION 8.4, THE MATERIALS ARE
PROVIDED "AS IS" AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF
FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS
WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD
PARTY.


                                       20

                                                               EXECUTION VERSION


         2.10 Exclusivity.

              (a) During the Exclusivity Term, each Party agrees not to, and
agrees to cause its Affiliates not to, (i) conduct any activity, either on its
own, or for the benefit of, sponsored by, or pursuant to any type of corporate
partnership, licensing arrangement or joint venture with, any Third Party, that
has as its goal or intent discovering, identifying or otherwise Researching
Viral IRES Inhibitors except pursuant to this Agreement (an "IRES Research
Program"), (ii) Develop, either on its own, or for the benefit of, sponsored by,
or pursuant to any type of corporate partnership, licensing arrangement or joint
venture with, any Third Party, any compound resulting from an IRES Research
Program, except pursuant to this Agreement, or (iii) grant any license, either
express or implied, or any option to license, to any Third Party to utilize any
intellectual property Controlled by such Party or its Affiliates for the purpose
of discovering, identifying or otherwise Researching Viral IRES Inhibitors
except pursuant to this Agreement. Each Party acknowledges that the other Party
is in the business of developing products in the Viral Field and that, except as
explicitly provided to the contrary in this Agreement, but subject to the
licenses granted to Schering pursuant to Section 5.2, each Party has and will
have programs related to the Research and Development of products for the
treatment of viral diseases or conditions. For the avoidance of doubt, nothing
in this Section 2.10 shall preclude either Party from (x) entering into
collaborations with academic or government entities in support of the Research
Program that are consistent with the other provisions of this Agreement
(including without limitation the licenses granted to Schering pursuant to
Sections 5.1(a) and 5.1(b)), or (y) Developing or Commercializing outside of the
scope of this Agreement any compound or product that is not a Collaboration
Compound (subject to the restriction set forth in subsection (ii) above).
Without limiting the generality of the foregoing, it is expressly understood
that Schering and its Affiliates shall have the right to conduct Development
during the Exclusivity Term with respect to compounds or products that are Viral
IRES Inhibitors that are acquired or in-licensed following the Effective Date if
such compounds or products have initiated human clinical trials as of the time
they were in-licensed or acquired by Schering or its Affiliates.

              (b) In the event of a breach of the provisions of Section 2.10(a)
by a Party or its Affiliates, the non-breaching Party may, as one of its
remedies and not to the exclusion of any other remedy such Party may have, (i)
terminate this Agreement pursuant to Section 11.3, and/or (ii) terminate the
provisions of Section 2.10(a) as it applies to such non-breaching Party.

              (c) In the event this Agreement is terminated pursuant to Section
11.4 or 11.5(a), or Schering terminates this Agreement pursuant to Section 11.2
or 11.5(b), the restrictions set forth in this Section 2.10 shall automatically
terminate. Furthermore, in the event that a Party terminates this Agreement
pursuant to Section 11.3, the restrictions set forth in this Section 2.10 shall
automatically terminate with respect to such Party (but shall remain in effect
with respect to the breaching Party).

              (d) The Parties agree that, given the high costs and significant
risks involved in discovering and developing pharmaceutical products, and given
that the Parties will be exchanging Confidential Information in order to perform
the Research Program, the exclusive relationship between them which is reflected
in this Section 2.10 is a fair and efficient means to reach a satisfactory
conclusion from their cooperative efforts.


                                       21

                                                               EXECUTION VERSION


              (e) The provisions of Section 2.10(a) are not intended to apply to
any activity otherwise prohibited by Section 2.10(a) if a Party's involvement in
such activity results from such Party's acquisition by or of a Third Party (by
merger or otherwise), but only if (i) such Third Party, prior to such
acquisition or merger, was already engaged in such prohibited activity (the
"Third Party Activity"), (ii) such Third Party Activity remains separate from
the activities contemplated by this Agreement, and no Patent rights or Know-How
of the other Party are used in connection with such Third Party Activities, and
(iii) in the case of an acquisition of a Third Party by a Party, such Party does
not significantly expand the scope of, or financial commitment to, such Third
Party Activity.

         2.11 Subcontractors. PTC may not perform any of its obligations under
the Research Program through a subcontractor without first obtaining Schering's
prior written consent, such consent not to be unreasonably withheld or delayed.
The subcontractors identified on Schedule 2.11 as currently used, or planned to
be used, by PTC are hereby deemed to be approved for the purposes of this
Section 2.11. It is understood that as part of the approval process, any
subcontractors must undertake in writing obligations of confidentiality and
non-use regarding Schering's and PTC's Confidential Information which are
substantially the same as those undertaken by PTC pursuant to Article 7 hereof
(either directly with Schering, or through their agreements with PTC). In the
event PTC is authorized to perform one or more of its obligations under the
Research Program through a subcontractor, then PTC shall at all times be
responsible for the performance of such subcontractor.

         2.12 Termination of Research Program.

              (a) In the event that Schering has not accepted a Development
Candidate within two years of the Effective Date, Schering shall have the right
to terminate the Research Program upon [**] prior written notice to PTC.

              (b) At any time following designation of a Back-Up Development
Candidate by Schering, Schering shall have the right to terminate the Research
Program upon [**] prior written notice to PTC.

              (c) At the end of the Research Term, whether extended or not
pursuant to the provisions of Section 2.8, all obligations of the Parties to
conduct any further activities under the Research Plan shall terminate, but the
other rights and obligations under this Agreement shall not otherwise be
affected, except to the extent otherwise provided herein.

         2.13 Testing of Active Compounds Identified by PTC Outside of the
Research Program. In the event that any compound synthesized by or on behalf of
PTC or its Affiliates prior to the end of the Research Term and outside of any
activities conducted under the Research Program is identified by PTC or its
Affiliates prior to the end of the Research Term as an Active Compound, PTC
shall promptly undertake appropriate steps to determine whether such Active
Compound is a Viral IRES Inhibitor. Any such compound that is identified as a
Viral IRES Inhibitor shall be deemed a PTC Compound pursuant to the provisions
of Section 1.48(iii).


                                       22

                                                               EXECUTION VERSION


         2.14 Allocation of Certain Collaboration Compounds. Reasonably promptly
following the Effective Date, the Parties shall establish appropriate provisions
for transferring to Schering (i) an amount of PTC's existing inventory of each
of the NV Compounds to be determined as follows: the [**] the [**], and any
remaining PTC inventory [**] and (ii) in addition to any shipments of Highly
Active Collaboration Compounds required elsewhere in this Agreement, all of
PTC's remaining inventory of Highly Active Collaboration Compounds within [**]
after the end of the Research Term. With respect to any quantities of NV
Compounds that are synthesized following the Effective Date and prior to the end
of the Research Term, the Parties shall share the inventory of each such
compound equally.

                                    ARTICLE 3

                            JOINT STEERING COMMITTEE

         3.1 Creation and Structure of the JSC. The Parties shall create a joint
steering committee (the "JSC") to facilitate the Parties' collaboration called
for herein. The JSC shall consist of three representatives designated by each
Party, or such other number as the Parties may mutually agree. As soon as
practicable following the Effective Date (but in no event more than thirty (30)
days following the Effective Date), each Party shall designate their initial
representatives on the JSC. Schering shall designate one of its representatives
as the Chairperson of the JSC. Each Party shall be free to change its
representatives on notice to the other or to send a substitute representative to
any JSC meeting; provided, however, that each Party will ensure that at all
times during the existence of the JSC, their representatives on the JSC are
appropriate in terms of expertise and seniority (including at least one member
of senior management) for the then current stage of Research and Development of
Collaboration Compounds or Schering Viral Products. The JSC shall continue to
function until such date as Schering has received the first Regulatory Approval
for a Schering Viral Product in each of the United States, in three Major
Markets in the European Union, and in Japan; provided, however, that once
Schering receives the first Regulatory Approval for a Schering Viral Product in
the United States, in three Major Markets in the European Union, or in Japan,
then the JSC's activities shall cease to exist with respect to the United
States, the European Union or Japan, respectively.

         3.2 Meetings. During the Research Term, the JSC shall meet on a
quarterly basis, or at such other frequency as the Parties shall agree.
Following the Research Term, the JSC shall meet semi-annually, or at such other
frequency as the Parties shall agree. During the Research Term, meetings of the
JSC shall alternate between the offices of PTC and Schering. Following the end
of the Research Term, meetings of the JSC shall occur at the offices of
Schering, or at such other location as Schering and PTC shall agree. A JSC
member of the Party hosting the meeting shall serve as Secretary of that
meeting, who shall be responsible for preparing the minutes of the meeting. Such
minutes shall provide a description in reasonable detail of the discussions held
at the meeting and a list of any actions, decisions or determinations approved
by the JSC. The Parties agree that they shall endeavor to ensure that draft
minutes of each meeting shall be distributed within fifteen (15) days of the
meeting, and final minutes shall be approved by both Parties within forty-five
(45) days of the meeting. Final minutes of each meeting shall be distributed to
the members of the JSC by the Chairperson. The JSC may also convene, or be
polled or consulted, from time to time by means of telecommunications, video
conferencing or


                                       23

                                                                  EXECUTION COPY


written correspondence, as deemed necessary or appropriate. Each Party shall
disclose to the other proposed agenda items in advance of each meeting of the
JSC. The JSC may invite other representatives of the Parties with special skills
or knowledge to attend meetings where appropriate. The JSC shall adopt such
other rules as shall be necessary or convenient for its work. Each Party shall
be responsible for all travel and other costs for its representatives to attend
meetings of, and otherwise participate on, the JSC.

         3.3 Responsibilities of the JSC. The JSC shall be the primary vehicle
for interaction between the Parties with respect to the Research Program and the
Development of Schering Viral Products, and shall function as a forum for the
Parties to inform and consult with one another concerning progress of the
Research Program and make decisions regarding the Research Program, as well as
for Schering to inform and consult with PTC concerning the Development of
Schering Viral Products. Without limiting the foregoing, the JSC shall be
responsible for:

              (i) directing, managing and monitoring the progress of the
Research Program;

              (ii) making any modifications to the Research Plan as the JSC
deems appropriate;

              (iii) developing and approving a charter for a joint project team,
which shall include participation of appropriate representatives from both
Parties and shall be responsible for drafting recommendations with respect to
the Research Plan;

              (iv) identifying to the Parties that the criteria set forth in
Schedule 1.14 as guidelines for Development Candidates have been reasonably met
with respect to a particular Collaboration Compound, and making recommendations
to Schering that one or more Collaboration Compounds be designated by Schering
as a Development Candidate;

              (v) reviewing and approving any changes to Schedule 1.14, and
developing and approving criteria for the Back-Up Development Candidate
referenced in Section 1.3;

              (vi) making recommendations to Schering that one or more
Collaboration Compounds be designated by Schering as a Back-Up Development
Candidate;

              (vii) reviewing and approving Schering's initial Development Plans
for the first Development Candidate or first Back-Up Development Candidate, as
well as reviewing and commenting upon (but not approving) any changes to such
Development Plans which Schering determines are necessary or appropriate (for
clarity, if the Development of a Development Candidate or Back-Up Development
Candidate is terminated for any reason prior to the first Regulatory Approval of
such Development Candidate or Back-Up Development Candidate, and Schering
subsequently continues to Develop one or more other Schering Viral Products,
then the next most advanced Development Candidate (and, if any exist, the next
most advanced Back-Up Development Candidate) shall be deemed "first" for the
purposes of this Section 3.3(vii));

              (viii) reviewing the progress under such Development Plans;


                                       24

                                                               EXECUTION VERSION


              (ix) reviewing and commenting upon the patent filing and
prosecution strategies of the Parties as provided in Article 9, including
directing, managing and monitoring the activities of the Joint Patent Team
pursuant to Section 9.3(e); and

              (x) reviewing and coordinating each Party's internal approval of
any publications by the Parties to the extent required pursuant to Section 7.7.

         3.4 Subcommittees of the JSC. From time to time, the JSC may establish
one or more subcommittees to oversee particular projects or activities related
to the Research Program, and such subcommittees will be constituted as the JSC
agrees.

         3.5 Decisions of the JSC. At least two JSC representatives from each
Party must participate in a meeting of the JSC in order for there to be a quorum
for such meeting. Subject to the remainder of this Section 3.5, all decisions of
the JSC shall be made by the unanimous vote of the Parties, with the JSC
representatives of each Party collectively having one vote. The Parties shall
use reasonable good faith efforts to reach consensus on all issues within the
responsibility of the JSC. In the event that the members of the JSC cannot agree
with respect to a particular issue within the responsibility of the JSC, then:

              (a) if the issue relates to the Research Program, or activities to
be conducted under the Research Plan, or the approval of either of the initial
Development Plans within the scope of Section 3.3(vii), such issue shall be
referred to the Vice-President, Discovery of the Schering-Plough Research
Institute division of Schering Corporation and the Senior Vice President, Drug
Discovery Technologies of PTC, who shall meet in a good faith effort to resolve
the dispute within [**]. In the event such individuals cannot agree on a
resolution of the dispute within such [**] period, such issue shall be referred
to the CEO of PTC and the Senior Vice-President, Research & Development of
Schering-Plough Corporation, who shall meet in a good faith effort to resolve
the dispute within [**]. In the event such individuals cannot agree on a
resolution of the dispute within such [**] period, Schering's decision shall
control; provided, however, in no event [**] [**] pursuant to this Section
3.5(a) in order to modify the Research Plan in a manner that would (i) be
inconsistent with the provisions of Section 2.5(a), (ii) require PTC to perform
a level of chemical optimization or biological/pharmacological characterization
activities that cannot reasonably be accomplished by the number of FTEs to be
funded by Schering, (iii) require PTC to perform activities that are not related
to chemical optimization or biological/pharmacological characterization of
Collaboration Compounds without PTC's consent, or (iv) prevent PTC from
presenting for designation a Development Candidate or Back-Up Development
Candidate.

              (b) if the issue relates to the Development of a Schering Viral
Product (other than the approval of the initial Development Plans within the
scope of Section 3.3(vii)), or any activities conducted under a Development
Plan, or relates to any other matter within the responsibility of the JSC, then
Schering's decision shall control.

         3.6 Limitation on JSC Authority. Notwithstanding the creation of the
JSC, each Party shall retain the rights, powers and discretions granted to it
hereunder, and the JSC shall not be delegated or vested with any such rights,
powers or discretion unless such delegation or vesting


                                       25

                                                               EXECUTION VERSION


is expressly provided for herein or the Parties expressly so agree in writing.
The JSC shall not have the power to make any decisions other than those set
forth in Section 3.3 or otherwise expressly set forth in this Agreement. Without
limiting the generality of the foregoing, the JSC may not amend or modify this
Agreement, which may be amended or modified only as provided in Section 13.10.
Furthermore, it is understood that the JSC shall not have any responsibilities
related to the Research or Development of Schering Non-Viral Products or PTC
Products.

         3.7 Project Leaders. Schering and PTC shall each appoint one or more
persons to coordinate their respective activities under the Research Program
(the "Project Leaders"). Such individuals shall be responsible for, among other
things, ensuring the appropriate level of information exchange between the
Parties regarding Collaboration Compounds and Schering Viral Products, as
contemplated by Section 3.9, as well as scheduling the JSC meetings.

         3.8 Project Team Access. Until Schering pays the milestone payment set
forth in Section 6.2(e), (i) [**] and as are reasonably acceptable [**], shall
have the right [**], and (ii) Schering shall provide [**]. For purposes of this
Section 3.8, [**] relating to such products.

         3.9 Reports to JSC. During the Exclusivity Term, each Party shall
provide the JSC on a quarterly basis with reports regarding the activities
performed by such Party under the Research Plan. Each report shall summarize in
reasonable detail the major activities undertaken by such Party during the prior
quarter, as well as the results of such activities. Such reports will be
accurate and, where appropriate, will contain raw data from studies carried out
by or on behalf of such Party. Following the Exclusivity Term, with respect to
any Schering Viral Products within the scope of Section 3.3(vii), Schering shall
also provide semi-annual progress reports to the JSC regarding the Development
of such products under the applicable Development Plans.

                                    ARTICLE 4

             DEVELOPMENT AND COMMERCIALIZATION OF LICENSED PRODUCTS

         4.1 Responsibility for Development; Diligence.

              (a) Selection of Development Candidates and Back-Up Development
Candidates. Based upon the criteria set forth in Schedule 1.14 and the criteria
it develops under Section 1.3, the JSC shall review all data relating to the
Collaboration Compounds and shall identify appropriate Collaboration Compounds
for recommendation to Schering for selection as Development Candidates and
Back-Up Development Candidates. It is understood and agreed that, subject to the
provisions of Section 4.1(d), all decisions regarding the designation of
Development Candidates and Back-Up Development Candidates shall be made by
Schering in its sole discretion; provided, however, Schering agrees to make such
decisions in good faith based upon its then-current internal decision-making
standards and processes. Upon the designation of any Collaboration Compound by
Schering as a Development Candidate or Back-Up Development Candidate, Schering
shall promptly notify PTC in writing. In addition, for the avoidance of doubt,
the first Highly Active Collaboration Compound


                                       26

                                                               EXECUTION VERSION


(or NV Compound designated as a Schering Field NV Compound pursuant to this
Section 4.1(a)) for which Schering commences GLP toxicology studies intended to
support submission of an IND shall be deemed to be a Development Candidate, and
the second Highly Active Collaboration Compound (or NV Compound designated as a
Schering Field NV Compound pursuant to this Section 4.1(a)) for which Schering
commences GLP toxicology studies intended to support submission of an IND shall
be deemed to be a Back-Up Development Candidate. In addition to selecting Highly
Active Collaboration Compounds for Development as Schering Viral Products, it is
understood that Schering shall also have the right at any time to designate one
or more NV Compounds for Development as Schering Viral Products in the Viral
Field; provided that Schering shall not make any such designation unless it (1)
has a good faith intention to Develop and Commercialize such NV Compound in the
Viral Field, and (2) has provided PTC with data supporting its designation,
together with a written research plan describing Schering's planned initial
Research regarding such compound, which research plan is consistent with a
commitment by Schering to initiate [**] (or a later downstream Research or
Development activity) with respect to such compound (or a Related Compound)
within [**] of the date of such designation by Schering. For clarity, Schering
may not designate a particular NV Compound for Development as a Schering Viral
Product if either (x) PTC has previously designated such compound as a
Designated NV Compound pursuant to Section 4A.1, or (y) such NV Compound is a
Related Compound for another NV Compound previously designated by PTC as a
Designated NV Compound pursuant to Section 4A.1. If, with respect to any NV
Compound designated by Schering for Development as a Schering Viral Product,
Schering fails to initiate [**] (or later downstream activities) with respect to
such compound, or any Related Compound, within the [**] period described above
in this Section 4.1(a), then Schering's exclusive license to such NV Compound
(and any Related Compounds) shall terminate, PTC shall have the right to
designate such compound as a PTC Designated NV Compound in accordance with the
provisions of Section 4A.1, and Schering shall have no right to re-designate
such NV Compound as a compound for Development as a Schering Viral Product or
Schering Non-Viral Product for a period of [**] following the end of the [**]
period described above in this Section 4.1(a).

              (b) Responsibility for Development. Following the Effective Date,
[**] Development of Schering Viral Products in the Field, and shall [**] make
decisions relating thereto, subject in each case to Schering's obligations under
Section 4.1(d) and the provisions of Article 3. Without limiting the generality
of the foregoing, [**] shall be responsible for (a) determining which Highly
Active Collaboration Compounds and Schering Field NV Compounds will be Developed
as Schering Viral Products in the Field, (b) determining the Development
strategy for all Schering Viral Products, (c) preparing the Development Plans
and, to the extent set forth in Section 3.3, reviewing the same with the JSC,
(d) developing protocols for all pre-clinical and clinical studies to be
conducted for Schering Viral Products, and (e) conducting any pre-clinical and
clinical studies regarding Highly Active Collaboration Compounds and Schering
Viral Products.

              (c) PTC's Participation in Early Development Activities. Schering
may request that PTC perform certain Development activities related to
pre-clinical or Phase I clinical studies for any Schering Viral Product
following the Effective Date. PTC may agree to perform such services, subject to
the provisions of Section 4.2, but is not obligated to do so.

              (d) Diligence. Schering and its Affiliates shall use Commercially
Reasonable Efforts to Develop at least one Schering Viral Product in each of the
Major Markets. It is understood that Schering shall have no obligation to
Develop any particular Schering Viral Product, and Schering's failure to Develop
any particular Schering Viral Product shall in no way


                                       27

                                                                  EXECUTION COPY


be considered a breach of Schering's obligations under this Section 4.1(d) or
provide any basis for PTC to seek termination of this Agreement.

              (e) Development Benchmarks. In the event that Schering has not (i)
[**] following its acceptance of the first Development Candidate, or (ii) has
not [**] of acceptance of the applicable Development Candidate, then PTC shall
have the right to request that the Parties meet to discuss in good faith any
concerns that PTC may have regarding Schering's satisfaction of its diligence
obligations set forth in Section 4.1(d). During such discussions, Schering shall
provide a reasonable explanation as to why it believes either of the foregoing
specified events has not occurred by the applicable date.

                           (i) If (A) after good faith discussions PTC still
         reasonably believes that Schering's failure to achieve either of the
         events specified in Section 4.1(e) by the dates specified therein
         demonstrates that Schering has breached its diligence obligation
         pursuant to Section 4.1(d), or (B) such good faith discussions have not
         been initiated within [**] of PTC's request therefor or completed
         within [**] (or in either case such longer time period as the Parties
         may mutually agree), then PTC shall have the right to initiate dispute
         resolution proceedings pursuant to Article 12. In such proceedings,
         [**].

                           (ii) For the avoidance of doubt, nothing in Section
         4.1(d) is intended to limit the ability of PTC to bring claims in good
         faith against Schering at any time regarding Schering's alleged
         breaches of Section 4.1(d); provided, however, it is understood that
         [**] shall apply solely with respect to the specific issue described in
         such section and only with respect to those proceedings (including
         litigation) related to such specific issue and not to any other
         allegations of PTC regarding lack of diligence (whether such
         allegations are raised in a dispute resolution proceeding initiated
         pursuant to Section 4.1(e)(i) or otherwise).

                           (iii) The Parties acknowledge that there are numerous
         reasons that are beyond the control of Schering that might impact
         Schering's ability to achieve either of the events specified in Section
         4.1(e) by the dates specified therein (e.g., safety concerns which
         arise during testing of the Development Candidate), and it is
         understood that the failure by Schering to achieve either of such
         events by such dates shall not, in and of itself, be deemed a breach of
         Schering's diligence obligations under Section 4.1(d) or create any
         inference that Schering has breached its obligations under Section
         4.1(d).

              (f) Development Deadlines. In the event that [**] following
acceptance of the first Development Candidate, then PTC shall have the right to
terminate this Agreement upon written notice to Schering. Any termination by PTC
pursuant to this Section 4.1(f) shall have the same effect as if Schering
terminated this Agreement pursuant to Section 11.2.

         4.2 Responsibility for Development Costs. Schering shall be responsible
for all costs and expenses related to its Development of Schering Viral
Products.

         4.3 Development Plans. For each Schering Viral Product for which
Schering elects to initiate human clinical trials, Schering shall prepare a
development plan outlining the major


                                       28

                                                               EXECUTION VERSION


Development activities that Schering expects to undertake, including anticipated
timescales, relating to the product up to the submission of the initial NDA for
the applicable product, which plan shall reflect a level of diligence consistent
with Schering's obligations under Section 4.1(d) (each, a "Development Plan").
It is understood that each Development Plan is intended to be a fluid document
and is subject to change by Schering based on, among other things, changes in
the market, discussions with investigators and Regulatory Authorities and the
results of studies undertaken; provided that in no event shall any changes made
by Schering to a Development Plan reflect a level of diligence that is less than
that required by Section 4.1(d). Subject to the provisions of Article 7, during
the Term, Schering shall provide PTC with access to copies of [**]. The
Development Plans will be created, approved, and amended according to Schering's
then-current internal standards and processes for such plans.

         4.4 Ownership of Development Data and Other Know-How.

              (a) PTC shall own (i) all data, results and other Know-How
generated or developed by it prior to the Effective Date and (ii) all data,
results and other Know-How generated or developed in the performance of any
activities conducted by PTC or any of its Affiliates under the Research Plan,
subject in the case of both (i) and (ii) to the Schering Licenses. All such
data, results and other Know-How shall be considered PTC Confidential
Information.

              (b) Schering shall own (i) all data, results and other Know-How
generated or developed by it prior to the Effective Date and (ii) all data,
results and other Know-How generated or developed in the performance of any
activities conducted by Schering or any of its Affiliates under the Research
Plan, subject, in the case of both (i) and (ii) to the licenses granted or to be
granted to PTC pursuant to Sections 5.1(c), 5.3(b), 5.4(b) and 11.7. All such
data, results and other Know-How shall be considered Schering Confidential
Information.

              (c) Schering shall own Development Data and other Know-How
generated or developed in the performance of Development, Commercialization or
Manufacturing activities performed by or on behalf of it relating to Highly
Active Collaboration Compounds, Schering Field NV Compounds, or Schering Viral
Products, including without limitation all data accumulated from all clinical
trials conducted under any Development Plan, subject to the licenses to be
granted to PTC pursuant to Section 11.7.

              (d) Schering shall own Development Data and other Know-How
generated or developed in the performance of Research, Development,
Commercialization or Manufacturing activities performed by or on behalf of it
relating to NV Compounds or Schering Non-Viral Products, including without
limitation all data accumulated from all clinical trials conducted by it with
respect to such products, subject to the licenses granted to PTC pursuant to
Sections 5.3(b) and 5.4(b).

              (e) PTC shall own Development Data and other Know-How generated or
developed in the performance of Research, Development, Commercialization or
Manufacturing activities performed by or on behalf of it relating to NV
Compounds or PTC Products, including


                                       29

                                                               EXECUTION VERSION


without limitation all data accumulated from all clinical trials conducted by it
with respect to such products, subject to the licenses granted to Schering
pursuant to Sections 5.3(a) and 5.4(a).

         4.5 Access [**]. Subject to PTC's obligations under Article 7, during
the Term and promptly upon their availability, Schering shall provide PTC with
[**] Schering Viral Products.

         4.6 [**]. During the term of the JSC, PTC shall have the right to [**].
For purposes of clarity, it is understood that the foregoing provisions are
intended to apply to [**], and not to [**].

         4.7 Responsibility for Commercialization. Schering shall have full
responsibility for the Commercialization of Schering Viral Products in the
Field. Schering agrees to use Commercially Reasonable Efforts to Commercialize
at least one Schering Viral Product in the Field in each of the Major Markets.

         4.8 Meetings to Discuss Schering's [**]. Following the date that
Schering [**], representatives from the Parties' respective marketing
organizations shall meet to discuss Schering's [**]. Thereafter, until [**] any
Schering Viral Product [**], the Parties' representatives shall continue to meet
for the purpose of (i) [**] with [**], and (ii) discussions with respect thereto
between Schering and PTC. For clarity, the Parties' obligations pursuant to this
Section 4.8 shall terminate at such time [**].

         4.9 Manufacturing and Supply Responsibilities. Schering shall be
responsible for Manufacturing or having Manufactured all quantities of Highly
Active Collaboration Compound, Schering Field NV Compound and Schering Viral
Product necessary for its Development and Commercialization throughout the
Territory, as well as all activities related to process development and scale-up
of the manufacturing process, all at its sole costs and expense. Following the
Effective Date and during the Research Term, PTC shall provide Schering on a
quarterly basis, or reasonably promptly in response to Schering's written
request, with any Know-How or other information related to synthesis methods for
Highly Active Collaboration Compounds or Schering Field NV Compounds developed
by or on behalf of PTC and Controlled by PTC, either prior to or during the
Research Term.

         4.10 Regulatory Matters Related to Schering Viral Products. Schering,
its Affiliates and Sublicensees shall be responsible for all regulatory matters
related to Schering Viral Products, and shall be responsible for all costs and
expenses incurred in performing its regulatory responsibilities. All INDs
regarding Schering Viral Product in the Territory, and all NDAs, shall be filed
in the name of and owned by Schering, its Affiliates and Sublicensees, and
Schering, its Affiliates and Sublicensees shall hold all Regulatory Approvals
for Schering Viral Product throughout the Territory.


                                       30

                                                               EXECUTION VERSION


              (a) Regulatory Submissions. Schering, its Affiliates and
Sublicensees shall oversee, monitor and coordinate all regulatory actions,
communications and filings with, and submissions to, the FDA and other
Regulatory Authorities in the Territory with respect to all Schering Viral
Products.

              (b) Regulatory Meetings and Correspondence. Schering, its
Affiliates and Sublicensees shall be responsible for interfacing, corresponding
and meeting with the FDA and other Regulatory Authorities throughout the
Territory with respect to Schering Viral Products. Until the completion of any
pre-IND meetings with FDA and EMEA for the initial Development Candidate, PTC
shall have the right to have [**], or another senior, experienced employee of
PTC reasonably acceptable to Schering, participate as an observer in such
pre-IND meetings, as well as participate in internal Schering meetings or
discussions occurring immediately before or after, and related to, such pre-IND
meetings, and shall be provided with advance access to Schering materials
prepared for such meetings. PTC shall also have the right to review and comment
upon any correspondence with FDA or EMEA related to such meetings. With respect
to any meetings with FDA or EMEA beyond the pre-IND meetings (e.g., end of Phase
I meetings, end of Phase II meetings), PTC shall have the right to request that
one of its representatives be permitted to participate as an observer in such
meetings, and Schering shall consider such requests in good faith.

              (c) Additional Information Regarding Regulatory Activities in the
Territory. Schering shall provide PTC [**], and respond within a reasonable time
frame to all reasonable inquiries by PTC with respect thereto. Schering shall
also provide PTC in a timely manner [**] concerning the same.

              (d) Pharmacovigilance. Schering shall be responsible for the
collection, review, assessment, tracking and filing of information related to
adverse events ("AEs") associated with Schering Viral Products, in accordance
with US 21 C.F.R. 312.32, 314.80 and comparable regulations, guidance,
directives and the like governing AEs associated with Schering Viral Products
that are applicable outside of the United States.

         4.11 Regulatory Matters Related to Other Licensed Products. Schering
shall be responsible for all regulatory matters related to Schering Non-Viral
Products, and shall be responsible for all costs and expenses incurred in
performing its regulatory responsibilities. PTC shall be responsible for all
regulatory matters related to PTC Products, and shall be responsible for all
costs and expenses incurred in performing its regulatory responsibilities.

         4.12 Impact of Change of Control of Schering. In the event that a Third
Party, either alone or together with its Affiliates, acquires, directly or
indirectly, fifty percent (50%) or more of the voting stock of Schering or
Schering-Plough Corporation, or all or substantially all of the assets of
Schering or its Affiliates related to the Schering antiviral business, whether
through merger, consolidation, acquisition or otherwise (a "Schering Triggering
Event"), then such Third Party (or the applicable Affiliate of such Third Party)
shall, within [**] of such Schering Triggering Event, confirm in writing to PTC
its intentions to continue to meet its obligations under this Agreement, and
offer to meet with PTC to discuss any initial plans it may have to revise the
applicable Development Plans in effect immediately prior to the effective date
of the Schering Triggering Event (it being understood that nothing in this
Section 4.12 is intended to


                                       31

                                                               EXECUTION VERSION


limit in any way Schering's right to make subsequent changes to the Development
Plans in accordance with the provisions of Section 4.1(b)).

         4.13 Additional Reports and Information to be Provided Following
Termination of the JSC. Following the termination of the JSC pursuant to Section
3.1, Schering shall (x) provide PTC with annual written reports summarizing the
progress of its Development of any Schering Viral Products during the prior
year, and (y) at the request of PTC, meet on a semi-annual basis for informal
discussions regarding its Development activities with respect to Schering Viral
Products.

         4.14 Certain Expenses of PTC. PTC shall be solely responsible for any
expenses incurred by it in connection with any activities undertaken by it
pursuant to Sections 4.6, 4.8, 4.12 and 4.13.


                                   ARTICLE 4A

  DEVELOPMENT AND COMMERCIALIZATION OF DESIGNATED NV COMPOUNDS BY EITHER PARTY

         4A.1 Designation of Designated NV Compounds.

              (a) At any time following the Research Term, either Party shall
have the right to designate one or more NV Compounds as candidates for
Development and Commercialization in the Non-Viral Field according to the
provisions set forth in this Section 4A.1. In order to designate an NV Compound
as a Designated NV Compound (as defined below) for Development and
Commercialization in the Non-Viral Field, the designating Party must provide a
written notice to the other Party which identifies the specific structure of the
NV Compound, and either (x) provides data which demonstrates that the NV
Compound has [**] against a given target in the Non-Viral Field, and includes a
commitment [**] (or later downstream Research or Development activity) with
respect to the NV Compound (or a Related Compound) within [**] of the
Designation Date (as defined below) for such NV Compound, or (y) in cases where
[**] provides a description of the assay or methods used to measure activity in
the Non-Viral Field and a description of the activity observed, and includes a
commitment [**] with respect to the NV Compound (or a Related Compound) within
[**] of the Designation Date for such NV Compound. As used in this Agreement,
"Designation Date" means the date on which a written notice is received by the
non-designating Party complying with the foregoing requirements. For purposes of
designating an NV Compound, activity against a given target must be measured
using either (x) a published assay that is generally accepted in the scientific
community as a valid measure of activity against such target, or (y) an assay
that is proprietary to the designating Party and that would be considered by one
of ordinary skill in the art as a valid measure of activity against the given
target. Each Party agrees that it shall not designate an NV Compound under this
Section 4A.1(a) unless it has a good faith intention to Develop and
Commercialize the NV Compound (or a Related Compound) for at least one
indication in the Non-Viral Field. An NV Compound designated pursuant to and in
compliance with the provisions of this Section 4A.1(a) shall be referred to as a
"Designated NV Compound."


                                       32

                                                               EXECUTION VERSION


              (b) If a Party validly designates an NV Compound as a Designated
NV Compound pursuant to the provisions of Section 4A.1(a), then it shall receive
those licenses with respect to such Designated NV Compound and any Related
Compounds specified in Section 5.4.

              (c) If a Party fails [**], as applicable under Section 4A.1(a)
above (or later downstream Development or Commercialization activity) with
respect to a Designated NV Compound (or Related Compound) designated by it
within [**] of the Designation Date for such Designated NV Compound, then the
following provisions shall be applicable:

                           (i) The designating Party's designation of such NV
         Compound as a Designated NV Compound shall be null and void, and the
         license granted to it pursuant to Section 5.4 with respect to such
         Designated NV Compound and Related Compounds shall automatically
         terminate;

                           (ii) The designating Party shall thereafter be
         precluded from designating such Designated NV Compound and Related
         Compounds as a Designated NV Compound for a period of [**] from the end
         of the applicable [**] period under Section 4A.1(a); and

                           (iii) The other Party shall have the right to
         designate such NV Compound and Related Compounds as a Designated NV
         Compound, subject to the satisfaction of the conditions of Section
         4A.1(a) and without use of any Confidential Information of the other
         Party with respect to such NV Compound, provided, however, that it is
         understood that the mere fact that an NV Compound has been designated
         without reference to any data provided by the other Party in connection
         with such designation shall not constitute Confidential Information of
         the other Party solely for the purposes of this Subsection
         4A.1(c)(iii).

              (d) The Parties further agree that, in the event a Party
designates an NV Compound pursuant to this Section 4A.1, the non-designating
Party shall not be required to remove such Designated NV Compound (or compound
known by it to be a Related Compound) from its screening library, so long as the
non-designating Party does not utilize any data it has generated, or may in the
future generate, with respect to the screening of such Designated NV Compound
(or compound known by it to be a Related Compound) unless such designation has
lapsed pursuant to Section 4A.1(c).

              (e) For clarity, (x) PTC may not designate any Schering Compound,
any Schering Field NV Compound or any Designated NV Compound (or any Related
Compound thereof) previously designated by Schering (unless such designation has
lapsed pursuant to Section 4A.1(c)), and (y) Schering may not designate as a
Designated NV Compound any Designated NV Compound (or any Related Compound
thereof) previously designated by PTC (unless such designation has lapsed
pursuant to Section 4A.1(c)).

         4A.2 Development of NV Compounds by Schering. Following the expiration
or termination of the Research Term, Schering and its Affiliates shall not
conduct any clinical development work, or license any Third Party to conduct any
clinical development work, on any


                                       33

                                                               EXECUTION VERSION


NV Compound until either (x) such NV Compound has been designated by Schering as
a Designated NV Compound as provided in Section 4A.1, or (y) such NV Compound
has been designated by Schering for Development for use in the Viral Field in
accordance with the provisions of Section 4.1(a).

         4A.3 Development of NV Compounds by PTC. PTC and its Affiliates shall
not conduct any clinical development work, or license any Third Party to conduct
any clinical development work, on any NV Compound until such NV Compound has
been designated by PTC as a Designated NV Compound as provided in Section 4A.1.

         4A.4 No Development or Commercialization of Collaboration Compounds in
the Viral Field by PTC. PTC agrees that during the Term neither it nor any of
its Affiliates shall (A) conduct, cause any Third Party to conduct, or authorize
any licensee of PTC (excluding Schering) to conduct, a human clinical trial or
an animal study within the Viral Field with respect to any Collaboration
Compound or PTC Product, or knowingly provide financial support to, or furnish a
Collaboration Compound or PTC Product to, any Third Party for any such purpose,
(B) publish or authorize any licensee to publish any data from any human
clinical trial or animal study which would promote a Collaboration Compound or
PTC Product for use in the Viral Field, or (C) market or promote, or authorize a
Third Party to market or promote, a Collaboration Compound or PTC Product for
use in the Viral Field through advertising, promotion or the like. PTC shall
impose the restrictions set forth in this Section 4A.4 on all its
licensees/sublicensees and distributors of PTC Products.

         4A.5 No Development or Commercialization of NV Compounds in the Viral
Field by Schering. Schering agrees that, except to the extent Schering has
designated a particular NV Compound for Development in the Viral Field pursuant
to the provisions of Section 4.1(a), during the Term neither it nor any of its
Affiliates shall (A) conduct, cause any Third Party to conduct, or authorize any
licensee of Schering to conduct, a human clinical trial or an animal study
within the Viral Field with respect to any NV Compound or Schering Non-Viral
Product, or knowingly provide financial support to, or furnish a NV Compound or
Schering Non-Viral Product to, any Third Party for any such purpose, (B) publish
or authorize any licensee to publish any data from any human clinical trial or
animal study which would promote a NV Compound or Schering Non-Viral Product for
use in the Viral Field, or (C) market or promote, or authorize a Third Party to
market or promote, a NV Compound or Schering Non-Viral Product for use in the
Viral Field through advertising, promotion or the like. Schering shall impose
the restrictions set forth in this Section 4A.5 on all its
licensees/sublicensees and distributors of Schering Non-Viral Products.

         4A.6 Applicability of Restrictions. Each Party acknowledges that the
restrictions set forth in Sections 4A.2 through 4A.5 that are applicable to it
shall apply regardless of whether any license under the other Party's Patents or
Know-How is required in order to enable it to Develop or Commercialize the
applicable compound or the applicable Licensed Product containing such compound.


                                       34

                                                               EXECUTION VERSION


                                    ARTICLE 5

                                    LICENSES

         5.1 Research Licenses.

              (a) Subject to the other provisions of this Agreement, PTC hereby
grants to Schering and its Affiliates an exclusive (even as to PTC and its
Affiliates) worldwide, paid-up right and license under the PTC Intellectual
Property to perform Schering's obligations under the Research Plan during the
Research Term and to otherwise conduct Research with respect to Collaboration
Compounds during the Research Term; provided, however, that PTC shall retain the
right to practice the PTC Intellectual Property in order to enable it to perform
its obligations under the Research Plan during the Research Term.

              (b) Subject to the other provisions of this Agreement, PTC hereby
grants to Schering and its Affiliates a non-exclusive worldwide, paid-up right
and license under the PTC Background Patents solely for the purpose of enabling
Schering to perform its obligations under the Research Plan during the Research
Term and to otherwise conduct Research with respect to Collaboration Compounds
during the Research Term.

              (c) Subject to the other provisions of this Agreement, Schering
hereby grants to PTC and its Affiliates a non-exclusive worldwide, paid-up right
and license under the Schering Background Technology solely for the purpose of
enabling PTC to perform its obligations under the Research Plan during the
Research Term.

         5.2 Exclusive Development and Commercialization License to Schering. In
addition to the rights granted to Schering pursuant to Section 5.1(a) and
5.1(b), and subject to the other provisions of this Agreement, PTC hereby grants
to Schering (x) an exclusive (even as to PTC and its Affiliates), worldwide,
royalty-bearing right and license, with the right to grant sublicenses (in
accordance with the provisions of Section 5.5(b) below), under the PTC
Intellectual Property to Develop, make, have made, use, and import Highly Active
Collaboration Compound(s) and Schering Field NV Compounds in the Field and to
Develop, make, have made, use, sell, offer to sell and import Schering Viral
Product(s) in the Field, and (y) a non-exclusive, worldwide, right and license
under the PTC Intellectual Property to use Collaboration Compounds for Research
purposes.

         5.3 Co-Exclusive Research Licenses to Both Parties.

              (a) Effective as of the expiration or termination of the Research
Term, PTC hereby grants to Schering a co-exclusive (together with PTC and its
Affiliates), world-wide right and license, with the right to grant sublicenses
(in accordance with the provisions of Section 5.5(c) below), under the PTC
Intellectual Property to Research, make, have made, use, and import NV
Compound(s) (excluding any Schering Field NV Compounds) in the Non-Viral Field.

              (b) Effective as of the expiration or termination of the Research
Term, Schering hereby grants to PTC a co-exclusive (together with Schering and
its Affiliates), world-


                                       35

                                                               EXECUTION VERSION


wide right and license, with the right to grant sublicenses (in accordance with
the provisions of Section 5.5(c) below), under the Schering Patents, Schering NV
Know-How, and Schering Know-How existing as of the end of the Research Term to
Research, make, have made, use and import NV Compound(s) (excluding Schering
Compounds and Schering Field NV Compounds) in the Non-Viral Field.

         5.4 Exclusive Licenses to Develop and Commercialize Designated NV
Compounds.

              (a) Effective automatically upon valid designation of a NV
Compound as a Designated NV Compound by Schering pursuant to the provisions of
Section 4A.1, (x) PTC hereby grants to Schering an exclusive, world-wide,
royalty-bearing right and license, with the right to grant sublicenses (in
accordance with the provisions of Section 5.5(d) below), under the PTC NV
Patents and PTC NV Know-How to Research, Develop, make, have made, use, and
import the Designated NV Compound and any Related Compounds in the Non-Viral
Field and to Research, Develop, make, have made, use, sell, offer to sell and
import Schering Non-Viral Product(s) which contain such Designated NV Compound
or any Related Compound in the Non-Viral Field, and (y) the license granted by
Schering to PTC pursuant to the provisions of Section 5.3(b) shall automatically
terminate with respect to (but only with respect to) such Designated NV Compound
and any Related Compounds.

              (b) Effective automatically upon valid designation of a NV
Compound as a Designated NV Compound by PTC pursuant to the provisions of
Section 4A.1, (x) Schering hereby grants to PTC an exclusive, worldwide,
royalty-bearing right and license, with the right to grant sublicenses (in
accordance with the provisions of Section 5.5(d) below), under the Schering NV
Patents and Schering NV Know-How to Research, Develop, make, have made, use, and
import the applicable Designated NV Compound and any Related Compounds in the
Non-Viral Field and to Research Develop, make, have made, use, sell, offer to
sell and import PTC Product containing such Designated NV Compound or any
Related Compounds in the Non-Viral Field, and (y) the license granted by PTC to
Schering pursuant to the provisions of Section 5.3(a) shall automatically
terminate with respect to (but only with respect to) such Designated NV Compound
and any Related Compounds.

         5.5 Right to Sublicense.

              (a) Neither Party shall have the right to grant sublicenses under
the rights granted to it in Section 5.1, except to the extent required for use
of approved subcontractors pursuant to Section 2.11.

              (b) Subject to the terms and conditions of this Agreement,
Schering shall have the right to grant sublicenses under the rights granted to
it in Section 5.2 to its Affiliates. Schering shall also have the right to grant
sublicenses under the rights granted to it in Section 5.2 to Third Parties;
provided, however, that in the case of any sublicense that is granted to a Third
Party with respect to a Major Market in which Schering grants the Sublicensee
the right to Develop any Licensed Product, such sublicense shall be subject to
the prior written consent of PTC, which consent shall not be unreasonably
withheld or delayed. Each such sublicense shall be consistent with all the terms
and conditions of this Agreement, and Schering shall guarantee


                                       36

                                                               EXECUTION VERSION


the performance of its Affiliates and Sublicensees with respect to any
sublicense granted pursuant to this Section 5.5(b). Upon granting any sublicense
to a Third Party pursuant to this Section 5.5(b), Schering shall promptly inform
PTC and shall provide the relevant details regarding such sublicense (i.e., name
of Sublicensee, product involved and territory involved).

              (c) Either Party shall have the right to grant sublicenses to its
Affiliates under the rights granted to it pursuant to Section 5.3. Neither Party
shall have the right to grant to a Third Party any sublicense under the rights
granted to it pursuant to such Section 5.3 without the prior written consent of
the other Party, such consent not to be unreasonably withheld or delayed. Each
such sublicense shall be consistent with all the terms and conditions of this
Agreement, and the sublicensing Party shall guarantee the performance of its
Affiliates and Sublicensees with respect to any sublicense granted pursuant to
this Section 5.5(c). Upon granting any sublicense to a Third Party pursuant to
this Section 5.5(c), the Party granting such sublicense shall promptly inform
the other Party and shall provide the relevant details regarding such sublicense
(i.e., name of Sublicensee, product involved and territory involved).

              (d) Either Party shall have the right to grant sublicenses under
the rights granted to it under Section 5.4, subject to the restrictions set
forth in Section 4A.4 (in the case of PTC) and Section 4A.5 (in the case of
Schering). Each such sublicense shall be consistent with all the terms and
conditions of this Agreement, and the sublicensing Party shall guarantee the
performance of its Affiliates and Sublicensees with respect to any sublicense
granted pursuant to this Section 5.5(d). Upon granting any sublicense pursuant
to this Section 5.5(d), the sublicensing Party shall (x) promptly inform the
other Party and shall provide the relevant details regarding such sublicense
(i.e., name of Sublicensee, product involved and territory involved), and (y)
provide sufficient evidence to the other Party to demonstrate that it has
complied with the undertakings set forth in Section 4A.4 or 4A.5, as applicable.

              (e) The right to grant sublicenses provided in this Section 5.5
shall survive any termination or expiration of this Agreement, but only to the
extent that the underlying license so survives; provided, however, that the
restriction set forth in Section 5.5(c) with respect to Third Party sublicenses
shall terminate in the event that the other Party's underlying co-exclusive
license terminates.

         5.6 No Further Rights. Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect. No other
license rights shall be granted or created by implication, estoppel or
otherwise.

         5.7 Section 365(n) of the Bankruptcy Code. All rights and licenses
granted under or pursuant to any section of this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy
Code, licenses of rights to "intellectual property" as defined under Section
101(35A) of the Bankruptcy Code. Each Party shall retain and may fully exercise
all of its rights and elections under the Bankruptcy Code or equivalent
legislation in any other jurisdiction. Upon the bankruptcy of either Party, the
other Party shall further be entitled to a complete duplicate of (or complete
access to, as appropriate) any such intellectual property, and such, if not
already in its possession, shall be promptly delivered to such other Party,
unless the


                                       37

                                                               EXECUTION VERSION


Party in bankruptcy elects to continue, and continues, to perform all of its
obligations under this Agreement.

         5.8 No Rights to Other Compounds. Each Party acknowledges that the
other Party is in the business of developing products in the Viral Field and
that the other Party has or will have extensive programs related to the Research
and Development of products for the treatment of HCV and other viral diseases or
conditions. Each Party expressly acknowledges and agrees that, except as set
forth in Sections 5.3 and 5.4 (as such sections relate to Related Compounds), it
shall have no rights of any kind under this Agreement to any compounds or
products (or intellectual property related thereto) that are synthesized,
discovered, Developed or Commercialized by the other Party or its Affiliates
during the Term that are not Collaboration Compounds or Licensed Products.

                                    ARTICLE 6

                                  CONSIDERATION

         6.1 Up-front Payment. In partial consideration of the rights granted to
it by PTC under the Schering Licenses, Schering shall pay to PTC an upfront fee
of twelve million Dollars ($12,000,000) within ten (10) Business Days from the
Effective Date. The upfront payment will be unconditional and as such shall not
be subject to any offset, credit, reduction or repayment for any reason
whatsoever.

         6.2 Development Milestone Payments for Schering Viral Products. As
further consideration for the rights granted to it by PTC under the Schering
Licenses, within [**] following the first occurrence of the relevant events
specified below, Schering shall pay to PTC the following amounts:



MILESTONE                                  AMOUNT
- ---------                                  ------
                                           
(a)  [**]               [**]                     [**] Dollars ($ [**])
                        [**]                     [**] Dollars ($ [**])
                        [**]                     [**] Dollars ($ [**])

(b)  [**]               [**] Dollars ($ [**])

(c)  [**]               [**] Dollars ($ [**])

(d)  [**]               [**] Dollars ($ [**])

(e) [**]                [**] Dollars ($ [**])



                                       38

                                                               EXECUTION VERSION



                                           
(f)  [**]               [**] Dollars ($ [**])

(g)  [**]               [**] Dollars ($ [**])

(h)  [**]               [**] Dollars ($ [**])

(i)  [**]               [**] Dollars ($ [**])

(j)   [**]              [**] Dollars ($ [**])

(k)  [**]               [**] Dollars ($ [**])

(l)  [**]               [**] Dollars ($ [**])

(m)  [**]               [**] Dollars ($ [**])

(n)  [**]               [**] Dollars ($ [**])


It is understood that each of the above milestone payments shall be payable only
once (upon the first achievement of such milestone event by any Schering Viral
Product), regardless of the number of Schering Viral Products that achieve such
milestones. For purposes of clarity, if the Development of a Schering Viral
Product is terminated for any reason prior to the first Regulatory Approval of
such Schering Viral Product, and Schering subsequently continues to Develop one
or more other Schering Viral Products, the above milestones will be paid only
when a Schering Viral Product reaches a milestone beyond the last milestone
achieved by any previous Schering Viral Product. Furthermore, for the milestones
payable under Sections 6.2(a), (c), (e), and (f) (the "Development Milestones
Group"), payment of a milestone within the Development Milestone Group with
respect to a Schering Viral Product shall trigger payment of any earlier unpaid
milestones within the Development Milestone Group for such Schering Viral
Product, and payment of any milestone with respect to such Schering Viral
Product under Sections 6.2(g), (h), and (i) shall trigger payment of all earlier
unpaid milestones within the Development Milestone Group for such Schering Viral
Products. Similar principles shall apply to payment of milestones for an
indication in the Field other than for HCV under Sections 6.2(j)-(n).

For the purposes of Section 6.2(a), a Collaboration Compound will be considered
to have been [**] at such time as PTC has (i) completed all biological
characterization activities for such compound that are required to be performed
by PTC under the Research Plan, (ii) presented the specific chemical structure
of such Collaboration Compound to Schering, and (iii) provided Schering with
sufficient quantities (as determined by the JSC) of such Collaboration Compound
for Schering to commence its evaluation pursuant to the Research Plan.

For purposes of Section 6.2(d), the potential for [**] shall be deemed to have
been demonstrated if either (x) the clinical study results indicate [**], or (y)
Schering or its Affiliates or Sublicensees commence a Pivotal Trial for a
Schering Viral Product that includes a [**] for such product.


                                       39

                                                               EXECUTION VERSION


For purposes of this Section 6.2, (xx) a clinical trial will be deemed to have
commenced upon administration of the first dose to the first patient enrolled in
the trial, and (yy) in the United States, an NDA shall be deemed to have been
"filed" on the earlier of (i) receipt by Schering of written notice from the FDA
of acceptance for filing of the applicable NDA, or (ii) [**] following the
filing of such NDA submission without the receipt by Schering during such [**]
period of a "Notice of Refusal to File" from the FDA with respect to such NDA.

Milestone payments pursuant to this Section 6.2 will not be subject to any
offset, credit, reduction or repayment for any reason whatsoever.

         6.3 Approval Milestone Payments for a Second Schering Viral Product. As
further consideration for the rights granted to it by PTC under the Schering
Licenses, within [**] following the first occurrence of the relevant events
specified below, Schering shall pay to PTC the following amounts:



MILESTONE                                               AMOUNT
- ---------                                               ------
                                                     
[**]                                                    [**] Dollars ($ [**])
[**]                                                    [**] Dollars ($ [**])
[**]                                                    [**] Dollars ($ [**])


For purposes of this Section 6.3, a "Second Schering Viral Product" means a
Schering Viral Product that contains a different Collaboration Compound from the
first Schering Viral Product to achieve Regulatory Approval for the treatment of
HCV in the relevant market. For the avoidance of doubt, it is understood that
the milestone payments set forth in this Section 6.3 shall be payable only once,
regardless of the number of Schering Viral Products that achieve Regulatory
Approval for the treatment of HCV and shall not be payable with respect to
Regulatory Approvals for any indication other than the treatment of HCV.
Furthermore, [**] percent ([**]%) of any milestone payments that are paid by
Schering pursuant to this Section 6.3 shall be fully creditable against any
future royalties that are payable by it pursuant to Section 6.5 with respect to
the Second Schering Viral Product.

Except as explicitly provided in the foregoing paragraph, milestone payments
pursuant to this Section 6.3 will not be subject to any offset, credit,
reduction or repayment for any reason whatsoever.

         6.4 Sales Milestones. As further consideration for the rights granted
to Schering under the Schering Licenses, Schering shall pay PTC each of the
amounts specified below within [**] after the end of the calendar quarter in
which any of the following thresholds are achieved:


                                       40

                                                               EXECUTION VERSION




SALES THRESHOLDS                                                  AMOUNT
- ----------------                                                  ------
                                                        
      [**]                                                 [**] Dollars ($ [**])
      [**]                                                 [**] Dollars ($ [**])


It is understood that each of the above sales milestones shall be payable only
once, regardless of the number of Schering Viral Products that achieve the
applicable sales thresholds. Milestone payments pursuant to this Section 6.4
will not be subject to any offset, credit, reduction or repayment for any reason
whatsoever.

         6.5 Royalties Payable by Schering on Sales of Schering Viral Products.

              (a) Royalty on Net Sales. As further consideration for the rights
granted to Schering under the Schering Licenses, Schering shall pay to PTC, on a
Schering Viral Product-by-Schering Viral Product basis, the following
incremental royalties based on Net Sales of such Schering Viral Product:



                                         Net Sales                                               Rate
                                         ---------                                               ----
                                                                                          
On the first [**] Dollars ($ [**]) in worldwide Net Sales of such Schering Viral Product     [**] percent
in a calendar year                                                                           ([**]%)

On worldwide Net Sales of the Schering Viral Product in excess of [**] Dollars ($ [**])      [**] percent
but less than [**] Dollars ($ [**]) in a calendar year                                       ([**]%)

On worldwide Net Sales of the Schering Viral Product in excess of [**] Dollars ($ [**])      [**] percent
but less than [**] Dollars ($ [**]) in a calendar year                                       ([**]%)

On worldwide Net Sales of the Schering Viral Product in excess of [**] Dollars ($ [**])      [**] percent
but less than [**] Dollars ($ [**]) in a calendar year                                       ([**]%)

On worldwide Net Sales of the Schering Viral Product in excess of [**] Dollars ($ [**]) in   [**] percent
a calendar year                                                                              ([**]%)


The royalty rates set forth in this Section 6.5(a) are subject to adjustment as
set forth in Sections 6.5(b), 6.5(e) and 6.6, and are subject to any credit
offset to which Schering is entitled pursuant to Section 6.3, 6.7 and 9.7(a),
subject to the overall limits on certain adjustments and credits set forth in
Section 6.8.

              (b) Know-How Royalty. In a country where (x) the sale of a
Schering Viral Product would not infringe a Valid Claim of a PTC Patent or Joint
Patent, Schering shall pay royalties at a rate that is [**]percent ([**]%) of
the applicable royalty rate determined in accordance with Section 6.5(a);
provided, however, the foregoing reduction shall not apply so long as the
Schering Viral Product is entitled to Marketing Exclusivity in such country, and
there


                                       41

                                                               EXECUTION VERSION


are no other products on the market in such country that contains, as one of its
active ingredients, the same Active Ingredient that is contained in the Schering
Viral Product.

              (c) Duration of Obligation to Pay Royalties.

                           (i) Schering's obligation to pay royalties for any
         Schering Viral Product pursuant to Section 6.5(a) shall remain in
         effect on a country-by-country basis until the later of (A) the
         expiration of the last to expire PTC Patent (including any Joint
         Patent) in such country which contains a Valid Claim which claims such
         Schering Viral Product or its use in the Viral Field or for the
         approved indication, or (B) the expiration of any Marketing Exclusivity
         for such Schering Viral Product in such country (or, if earlier, the
         date of the First Commercial Sale of a Third Party product in such
         country that contains, as one of its active ingredients, the same
         Active Ingredient that is contained in the Schering Viral Product).[**]

                           (ii) Schering's obligation to pay royalties for any
         Schering Viral Product pursuant to Section 6.5(b) shall remain in
         effect until [**] after the First Commercial Sale of any Schering Viral
         Product in such country which contains the same Collaboration Compound
         as that which is contained in the Schering Viral Product.

                           (iii) The obligation to pay royalties pursuant to
         Section 6.5 is imposed only once with respect to the same unit of a
         Schering Viral Product, and there are no circumstances under which
         royalties are payable pursuant to both Sections 6.5(a) and 6.5(b) with
         respect to the sale of the same unit.

              (d) Paid-up License. Upon expiration of the royalty term for a
Schering Viral Product in a country as described in Section 6.5(c)(i) or
6.5(c)(ii), whichever is later, Schering shall thereafter have a fully paid-up,
non-exclusive license to PTC Know-How to make, have made, use, sell, offer for
sale, and import such Schering Viral Product in that country in the Field.

              (e) Adjustment to Royalty Rates. With respect to each country in
the Territory, on a country-by-country basis, the royalty payable pursuant to
Section 6.5(a) (but not Section 6.5(b)) with respect to any Schering Viral
Product shall be reduced by [**] percent ([**]%) the first time that Third Party
total unit sales of any products having the same Collaboration Compound as that
which is contained in such Schering Viral Product in such country exceed [**]
percent ([**]%) of the total unit sales of such Schering Viral Product by
Schering, its Affiliates and Sublicensees in that country during two consecutive
calendar quarters (calculated on an equivalent per kilogram of Collaboration
Compound basis). Thereafter, such royalties would be further reduced by an
additional [**] percent ([**]%) for each additional [**] percent ([**]%)
increase in the unit sales of such products by Third Parties in such country
compared to the unit sales of Schering, its Affiliates and Sublicensees, so that
upon such Third Party products reaching [**]% of total unit sales such royalty
will reach (and be subject to) the [**]% limit set forth in Section 6.8.
Notwithstanding the foregoing, this Section 6.5(e) shall not apply with respect
to any country in which royalties on Net Sales of a Schering Viral Product are
determined under Section 6.6.


                                       42

                                                               EXECUTION VERSION


         6.6 Compulsory License. Schering and PTC shall use reasonable efforts
to prevent any Third Party from obtaining or being granted a Compulsory License,
and to the extent that a Third Party obtains or is granted such a Compulsory
License, Schering and PTC will use reasonable efforts to limit or reduce the
scope or applicability of such Compulsory License. If, notwithstanding
Schering's and PTC's use of reasonable efforts, any Third Party obtains a
Compulsory License, then PTC or Schering (whoever has first notice) shall
promptly notify the other Party. If the royalty rate payable by the grantee of
the Compulsory License is less than the effective royalty rates payable to PTC
pursuant to Section 6.5 with respect to the applicable country (as such rates
are adjusted by the other provisions of this Agreement), then the royalty rate
payable by Schering with respect to such country shall automatically be reduced
to [**]. For the avoidance of doubt, for purposes of determining the royalties
due PTC under Section 6.5 with respect to sales of a product by any compulsory
licensee, Schering's Net Sales from such sales shall be calculated based solely
on the actual royalty payments, if any, paid by the compulsory licensee to
Schering under the Compulsory License.

         6.7 Responsibility for Third Party Royalties.

              (a) In the event that, following the Effective Date, Schering
believes that it is necessary or appropriate to obtain a license to one or more
Specified Third Party Patents, it shall notify PTC and the Parties shall meet to
discuss in good faith the basis for Schering's conclusion. In the event that the
Parties are unable to agree on whether to enter into a Third Party License
Agreement related to a Specified Third Party Patent, the Parties shall confer
[**]. If, following such consultation, the Parties are still unable to agree
upon whether to enter into such Third Party License Agreement, Schering shall
[**] provided, that, if, within [**] of Schering notifying PTC in writing of
such decision, PTC notifies Schering in writing [**], then Schering shall not
enter into such Third Party License Agreement until the earlier of (i) [**] from
the date of PTC's notice, or (b) the date PTC informs Schering [**]. If [**]
within such [**] period, and Schering enters into such Third Party License
Agreement, then any royalties, fees or other payments owing under such Third
Party License Agreement that are in consideration for a Patent [**] and which
claims the composition of matter of the relevant Highly Active Collaboration
Compound or Schering Field NV Compound shall be credited at the rate set forth
in Subsection 6.7(b)(y) of this Agreement rather than the rate that is set forth
in Subsection 6.7(b)(x) of this Agreement; provided, however, that [**] pursuant
to this Section 6.7(a), if as a result of any judgment in favor of, or
settlement with, a Third Party pursuant to Section 9.7(a), Schering is required
to pay to such Third Party royalties or other consideration related to such
Third Party's Patents which claim the composition of matter of a Highly Active
Collaboration Compound or Schering Field NV Compound, Schering shall be entitled
to treat such payments pursuant to Section 6.7(b)(x). For the purposes of this
Agreement, [**] pursuant to this Agreement with respect to a Highly Active
Collaboration Compound (or, for the purposes of this Section 6.7(a) only, a
Schering Field NV Compound) [**]. Schering, with the participation of PTC, shall
be responsible for negotiating any Third Party License Agreements related to any
Specified Third Party Patent. The Parties shall endeavor to agree upon all of
the key financial and other terms of such Third Party License Agreements; [**].


                                       43

                                                               EXECUTION VERSION


              (b) In the event that Schering, or its Affiliates or Sublicensees
enters into any Third Party License Agreement following the Effective Date
related to any Specified Third Party Patents, Schering shall be entitled to
credit against any royalties that are due PTC pursuant to Section 6.5 (x) [**]
percent ([**]%) of the amount of any royalties, fees or other payments due under
such Third Party License Agreement to the extent such payments are in
consideration for a Patent that claims the composition of matter of a Highly
Active Collaboration Compound or Schering Field NV Compound (except as provided
above in Section 6.7(a)), and (y) [**] percent ([**]%) of the amount of any
royalties, fees or other payments due under such Third Party License Agreement
to the extent such payments are in consideration for a Patent that claims (i)
the use of a Highly Active Collaboration Compound or Schering Field NV Compound
in the Viral Field, (ii) a method of treating, diagnosing or preventing any
disease or condition in the Viral Field through the use of a Highly Active
Collaboration Compound or Schering Field NV Compound, or (iii) a method of
manufacturing a Highly Active Collaboration Compound or Schering Field NV
Compound, in all cases subject to the limits set forth in Section 6.8.

              (c) With the exception of any Third Party License Agreements
within the scope of Section 6.7(a), Schering shall be solely responsible for
negotiating and entering into any other Third Party License Agreements related
to any Schering Viral Product, and shall be solely responsible for any fees,
royalties or other payments due to Third Parties under such agreement.

              (d) Schering shall be solely responsible for negotiating any Third
Party License Agreements that relate to a Schering Non-Viral Product, and shall
be solely responsible for any fees, royalties or other payments due to Third
Parties under such agreement.

              (e) PTC shall be solely responsible for negotiating any Third
Party License Agreements that relate to a PTC Product, and shall be solely
responsible for any fees, royalties or other payments due to Third Parties under
such agreement.

              (f) Each Party shall be solely responsible for any fees, royalties
or other payments due to Third Parties under Third Party License Agreements to
which it or its Affiliates are a Party as of the Effective Date (each, an
"Existing Third Party License Agreement").

         6.8 Limit on Adjustments. Notwithstanding anything in this Agreement to
the contrary, in no event shall the aggregate of all adjustments and credits
applicable under Sections 6.5(e) or 6.7(b) with respect to any Schering Viral
Product for any calendar quarter cause the royalties payable by Schering under
Section 6.5(a) and (b) in such calendar quarter to be reduced by more than [**]
percent ([**]%) of the amounts that would otherwise be due under such Sections
(after taking into consideration any credits to which Schering shall be entitled
pursuant to Section 6.3) for such Schering Viral Product in such calendar
quarter; provided, however, that any unused credits or adjustments shall be
carried over to future calendar quarters throughout the Term.

         6.9 Royalties Payable by Schering on Sales of Schering Non-Viral
Products.

              (a) Royalty on Net Sales. As further consideration for the rights
granted to Schering pursuant to Section 5.4(a), Schering shall pay to PTC, on a
Schering Non-Viral


                                       44

                                                               EXECUTION VERSION


Product-by-Schering Non-Viral Product basis, a royalty in the amount of [**]
percent ([**]%) of Net Sales of such Schering Non-Viral Product.

              (b) Schering's obligation to pay royalties for any Schering
Non-Viral Product pursuant to Section 6.9(a) shall remain in effect on a
country-by-country basis until the later of (i) the expiration of the last to
expire PTC NV Patent or Joint Patent in such country which contains a Valid
Claim which claims such Schering Non-Viral Product or its use in the Non-Viral
Field, (ii) the expiration of any Marketing Exclusivity for such Schering
Non-Viral Product in such country (or, if earlier, the date of the First
Commercial Sale of a Third Party product in such country that contains, as one
of its active ingredients, the same Active Ingredient that is contained in the
Schering Non-Viral Product), or (iii) [**] following First Commercial Sale of
any Schering Non-Viral Product in such country which contains, as one of its
active ingredients, the same Active Ingredient as that which is contained in the
Schering Non-Viral Product.

              (c) Upon expiration of the royalty term for a Schering Non-Viral
Product in a country as described in Section 6.9(b), Schering shall thereafter
have a fully paid-up, non-exclusive license to PTC NV Know-How to make, have
made, use, sell, offer for sale, and import such Schering Non-Viral Product in
that country in the Non-Viral Field.

         6.10 Royalties Payable by PTC on Sales of PTC Products.

              (a) Royalty on Net Sales. As partial consideration for the rights
granted to PTC pursuant to Section 5.4(b), PTC shall pay to Schering, on a PTC
Product-by-PTC Product basis, a royalty in the amount of [**] percent ([**]%) of
Net Sales of such PTC Product. Notwithstanding the foregoing, PTC shall not be
required to pay Schering any royalties pursuant to this Section 6.10(a) with
respect to a PTC Product that contains a PTC Compound that is set forth in
Schedule 1.48 attached hereto but does not contain any other Collaboration
Compound.

              (b) PTC's obligation to pay royalties for any PTC Product pursuant
to Section 6.10(a) shall remain in effect on a country-by-country basis until
the later of (i) the expiration of the last to expire Schering NV Patent
(including any Joint Patent) in such country which contains a Valid Claim which
claims such PTC Product or its use in the Non-Viral Field, (ii) the expiration
of any Marketing Exclusivity for such PTC Product in such country (or, if
earlier, the date of the First Commercial Sale of a Third Party product in such
country that contains, as one of its active ingredients, the same Active
Ingredient that is contained in the PTC Product), or (iii) [**] following First
Commercial Sale of any PTC Product in such country which contains, as one of its
active ingredients, the same Active Ingredient as that which is contained in the
PTC Product.

              (c) Upon expiration of the royalty term for a PTC Product in a
country as described in Section 6.10(b), PTC shall thereafter have a fully
paid-up, non-exclusive license to Schering NV Know-How to make, have made, use,
sell, offer for sale, and import such PTC Product in that country in the
Non-Viral Field.

         6.11 Royalty Reports and Payments. Each Party shall make royalty
payments due the other under this Article 6 within [**] after the end of each
calendar quarter in which Net Sales


                                       45

                                                               EXECUTION VERSION


occurred. A report summarizing the Net Sales of each Licensed Product during the
relevant quarter on a country-by-country basis shall be delivered to the other
Party within [**] following the end of each calendar quarter for which royalties
are due.

         6.12 Payments; Interest. Any payments due a Party under this Agreement
shall be due on such date as is specified in this Agreement and, in the event
such date is not a Business Day, then the next succeeding Business Day;
provided, however, that any expenses for which a Party is to be reimbursed under
this Agreement shall be payable within forty-five (45) days of the reimbursing
Party's receipt of an invoice detailing such expenses from the invoicing Party.
Any failure by a Party to make a payment within ten (10) Business Days after the
date when due shall obligate such Party to pay interest, the interest period
commencing on the due date and ending on the payment date. The applicable
interest rate shall be two percent (2%) above the average rate of the one (1)
month London Inter-Bank Offering Rate ("LIBOR") for Dollars, as quoted on the
British Banker's Association's website currently located at www.bba.org.uk (or
such other source as may be mutually agreed by the Parties) from time to time,
effective for the applicable days of the period of default. For clarity, it is
understood that the calculation of Net Sales will require an ongoing
reconciliation process, and no interest shall be payable under this Section 6.12
with respect to any adjustments that are made from the initial statement of Net
Sales, as applicable, for a particular calendar quarter so long as the
calculation of Net Sales that was reflected in the initial royalty statement for
such calendar quarter was made in good faith, and such adjustment is made on or
before the later of (x) twelve (12) months from the date of the initial
statement, and (y) three (3) months from the date that the applicable invoice or
statement underlying the adjustment is received by Schering or PTC or each of
their respective Affiliates or Sublicensees from the relevant Third Party (e.g.,
a Third Party payor in the case of a rebate).

         6.13 Taxes. Each Party shall pay any and all taxes levied on account of
all payments it receives under this Agreement. If laws or regulations require
that taxes be withheld, the paying Party will (a) deduct those taxes from the
remittable payment, (b) timely pay the taxes to the proper taxing authority, and
(c) send proof of payment to the other Party within thirty (30) days of receipt
of confirmation of payment from the relevant taxing authority. The paying Party
will reasonably cooperate with the other Party to obtain the benefit of any
applicable tax law or treaty, including the pursuit of any refund or credit of
such tax to the Party to whom payment is due.

         6.14 Additional Tax Matters. Each Party shall be entitled to all tax
benefits, including in particular, tax credits and/or tax deductions
attributable to amounts that such Party has funded regarding the Development of
Licensed Products. Each Party shall file any applicable national, regional, and
local tax returns on a basis consistent with this Agreement, and shall not take
any action inconsistent with the other Party's entitlement to such tax benefits.
In the event that a Party, in its reasonable judgment, determines that it must
obtain information and verification regarding the use or application of such
expenditures in order to prepare its tax returns or to respond to any inquiry
during a tax audit or any other inquiry relating to such treatment of its tax
return, or to defend its tax position in any proceeding including litigation,
the other Party shall reasonably cooperate with the requesting Party and furnish
it with such information as it may reasonably require at the requesting Party's
request and expense.


                                       46

                                                               EXECUTION VERSION


      6.15 Payment Currency. Except as otherwise noted, or as mutually agreed in
writing by the Parties from time to time, all payments due hereunder will be
paid in Dollars. All payments shall be paid by wire transfer of immediately
available funds to an account at a commercial bank designated by the Party to
whom payment is due at least ten (10) Business Days before payment is due. For
the purposes of this Agreement, "Dollars" or "$" means United States Dollars.
Where Licensed Product is sold in a currency other than Dollars, conversion of
sales recorded in local currencies to Dollars will be performed in a manner
consistent with a Party's (or its Sublicensee's) normal practices used to
prepare its or their audited financial statements for internal and external
reporting purposes in accordance with GAAP.

      6.16 Schering' Records of Net Sales and Audits of the Same. Schering shall
maintain, and cause its Affiliates and Sublicensees to maintain, complete and
accurate records of all Net Sales of Schering Viral Products and Schering
Non-Viral Products. PTC shall have the right, through an internationally
recognized certified public accountant reasonably acceptable to Schering, and
following reasonable notice, to examine such records during regular business
hours; provided, however, that such examination shall not (i) be of records for
more than the prior three (3) years, (ii) take place more often than once in any
calendar year, and (iii) cover any records which date prior to the date of the
last examination. The sole purpose of such examination shall be to verify the
correctness of the calculations of Net Sales under this Agreement. PTC shall
bear its own costs related to such audit; provided, that if any examination
results in a finding of underpayments greater than five percent (5%) by Schering
for the period audited (or any one-year sub-period thereof), Schering shall pay
PTC the amount of the underpayment, interest at the rate specified in Section
6.12 from the time the amount was due, and PTC's out-of-pocket expenses incurred
in conducting the audit (provided, however, in no event shall Schering be
obligated to reimburse any expenses in excess of the amount of the
underpayment). For any underpayments less than five percent (5%) by Schering for
the period audited, Schering shall pay PTC the amount of such underpayment and
interest at the rate specified in Section 6.12 from the time the amount was due.
Any overpayments by Schering will be credited to future royalties due PTC under
this Agreement. Any records or accounting information received from Schering or
otherwise obtained during the audit process shall be part of Schering's
Confidential Information. Results of any audit carried out hereunder (including
without limitation any audit reports) shall be promptly provided to both Parties
and shall also be part of Schering's Confidential Information.

      6.17 PTC's Records of Net Sales and Audits of the Same. PTC shall
maintain, and cause its Affiliates and Sublicensees to maintain, complete and
accurate records of all Net Sales of PTC Products. Schering shall have the
right, through an internationally recognized certified public accountant
reasonably acceptable to PTC, and following reasonable notice, to examine such
records during regular business hours; provided, however, that such examination
shall not (i) be of records for more than the prior three (3) years, (ii) take
place more often than once in any calendar year, and (iii) cover any records
which date prior to the date of the last examination. The sole purpose of such
examination shall be to verify the correctness of the calculations of Net Sales
under this Agreement. Schering shall bear its own costs related to such audit;
provided, that if any examination results in a finding of underpayments greater
than five percent (5%) by PTC for the period audited (or any one-year sub-period
thereof), PTC shall pay Schering the amount of the underpayment, interest at the
rate specified in Section 6.12 from the time the amount was due, and Schering's
out-of-pocket expenses incurred in conducting the audit


                                       47



                                                               EXECUTION VERSION

(provided, however, in no event shall PTC be obligated to reimburse any expenses
in excess of the amount of the underpayment). For any underpayments less than
five percent (5%) by PTC for the period audited, PTC shall pay Schering the
amount of such underpayment and interest at the rate specified in Section 6.12
from the time the amount was due. Any overpayments by PTC will be credited to
future royalties due Schering under this Agreement. Any records or accounting
information received from PTC or otherwise obtained during the audit process
shall be part of PTC's Confidential Information. Results of any audit carried
out hereunder (including without limitation any audit reports) shall be promptly
provided to both Parties and shall also be part of PTC's Confidential
Information.

                                   ARTICLE 7

                                 CONFIDENTIALITY

      7.1 Confidential Information. Except as expressly provided herein, the
Parties agree that, from the Effective Date until the fifth anniversary of the
expiration or termination of this Agreement, or for a period of [**] from the
Effective Date, whichever is the longer, the receiving Party shall keep
confidential and shall not publish or otherwise disclose to any Third Party and
shall not use for any purpose except for the purposes contemplated by this
Agreement any Confidential Information of the other Party which it receives or
learns pursuant to this Agreement, except to the extent that it can be
established by the receiving Party by competent proof that such Confidential
Information:

            (a)   is or becomes public or available to the general public
otherwise than through the act or default of the receiving Party or its
Affiliates;

            (b) is obtained by the receiving Party or its Affiliates from a
Third Party who is lawfully in possession of such Confidential Information and
is not subject to an obligation of confidentiality or non-use regarding the
Confidential Information owed to the disclosing Party or its Affiliates;

            (c)   is previously known to the receiving Party or its
Affiliates prior to disclosure under this Agreement, as shown by written
evidence; or

            (d) is independently developed by the receiving Party or its
Affiliates without the use of or reliance on any Confidential Information
provided by the disclosing Party hereunder, as shown by contemporaneous written
evidence.

      7.2 Public Domain. For the purposes of this Agreement, specific
information disclosed as part of the Confidential Information shall not be
deemed to be in the public domain or in the prior possession of the receiving
Party merely because it is embraced by more general information in the public
domain or by more general information in the prior possession of the receiving
Party.

      7.3 Legal Disclosure. If the receiving Party becomes legally required to
disclose any Confidential Information of the disclosing Party (whether in
response to a valid order of a court


                                       48



                                                               EXECUTION VERSION

or any governmental or regulatory body or otherwise required by Law), the
receiving Party will give the disclosing Party prompt notice of such fact so
that the disclosing Party may have an opportunity to obtain a protective order
or other appropriate remedy concerning such disclosure. The receiving Party will
reasonably cooperate with the disclosing Party in connection with the disclosing
Party's efforts to obtain any such order or other remedy, at the expense of the
disclosing Party. If any such order or other remedy does not fully preclude
disclosure, the receiving Party will make such disclosure only to the extent
that such disclosure is legally required and will use reasonable efforts to have
confidential treatment accorded to the disclosed Confidential Information.

      7.4 Permitted Use and Disclosures. Notwithstanding the provisions of
Section 7.1, each Party may disclose Confidential Information of the other Party
to its Affiliates, Sublicensees, consultants and outside contractors, on a
need-to-know basis and on the condition that such entities or persons agree to
confidentiality and non-use obligations with respect to the Confidential
Information that are substantially the same as those undertaken by the receiving
Party under this Article 7. In addition, either Party may disclose to Third
Parties Confidential Information disclosed to it by the other Party to the
extent such disclosure is (x) reasonably necessary in complying with applicable
governmental regulations, including submitting information to tax or other
governmental authorities, (y) reasonably necessary or useful in conducting
Development or Commercialization of Collaboration Compounds or Licensed Products
in accordance with the terms of this Agreement, or (z) reasonably necessary in
otherwise exercising its rights hereunder.

      7.5 Public Disclosure. In connection with the execution of this Agreement,
the Parties shall jointly issue one or more press releases, the contents of
which shall be substantially similar to Schedule 7.5, with such other contents
and changes as may be mutually agreed. Except as otherwise required by Law,
neither Party shall issue any additional press release or make any other public
disclosure concerning this Agreement or the subject matter hereof without first
providing the other Party with a copy of the proposed release or public
disclosure for review and comment, provided that such right of review and
comment shall only apply for the first time that specific information is to be
disclosed, and shall not apply to the subsequent disclosure of substantially
similar information that has previously been disclosed. The Party proposing to
make the press release or other public disclosure shall give due consideration
to any reasonable comments by the other Party relating to such proposed press
release or other public disclosure. The principles to be observed by Schering
and PTC in press releases or other public disclosures with respect to this
Agreement shall be: accuracy, compliance with applicable legal requirements, the
requirements of confidentiality under this Article 7 and normal business
practice in the pharmaceutical industry for disclosures by companies comparable
to Schering and PTC. For the avoidance of doubt, either Party may issue such
press releases as it determines, based on advice of counsel, are reasonably
necessary to comply with Law or for appropriate market disclosure. It is
understood, however, that unless required by Law, the Parties shall not disclose
the specific financial terms and conditions of this Agreement in any press
release or other public disclosure. In addition, if a public disclosure is
required by Law, including without limitation in a filing with the United States
Securities and Exchange Commission, the disclosing Party shall provide copies of
the proposed disclosure reasonably in advance of such filing or other disclosure
for the non-disclosing Party's prior review and comment and shall give due


                                       49



                                                               EXECUTION VERSION

consideration to any reasonable comments by the non-filing Party relating to
such filing, including without limitation the provisions of this Agreement for
which confidential treatment should be sought.

      7.6 Termination of Prior Agreement. The Parties agree that as of the
Effective Date, all previously executed confidentiality agreements between the
Parties or any of their respective Affiliates, including without limitation the
Secrecy Agreement, dated July 18, 2003, as amended prior to the Effective Date,
and the Confidentiality Agreement, dated May 27, 2005, as amended prior to the
Effective Date, are hereby terminated and superseded by the provisions of this
Agreement, and any disclosures made by PTC under the terms of such prior
confidentiality agreements shall be deemed to have been made under, and governed
solely by, the confidentiality terms of this Agreement.

      7.7 Publications. Each Party recognizes the mutual interest of the Parties
in obtaining valid patent protection and, to the extent practicable, providing
the other Party with advance notice of any publications relating to
Collaboration Compounds and Licensed Products. Consequently, if a Party or its
Affiliates wishes to publish (including any oral disclosure made in a public
forum without obligation of confidentiality) any data or other information
related to Collaboration Compounds or Licensed Products developed by or on
behalf of such Party or its Affiliates (the "Publishing Party"), it shall
transmit to the other Party (the "Reviewing Party") a copy of the proposed
written publication and/or a written summary of the proposed oral disclosure at
least thirty (30) days prior to submission of the publication or abstract or
oral disclosure. The Reviewing Party shall have the right to (a) request a delay
in submission of the publication or presentation in order to protect patentable
information, and (b) propose modifications to the publication for patent
reasons. With respect to publications or disclosures by investigators or other
Third Parties, such publications and disclosures shall be subject to review by
the Reviewing Party under this Section 7.7 only to the extent that the
Publishing Party has the right to do so. The provisions of this Section 7.7
shall not be applicable to any publications by a Party regarding a particular
Licensed Product being Developed by it following such Party's election to
initiate clinical Development for such Licensed Product under this Agreement. It
is understood that in no event shall a Party disclose the structures of any
Collaboration Compound being Developed by the other Party in any publication or
other public forum without the prior written consent of the Developing Party;
provided, however, the foregoing shall not preclude a Party from including such
structures in any patent applications that are filed and prosecuted in
accordance with the provisions of Article 9. In addition, each Party shall
acknowledge the scientific contributions of the other Party in any written
publication with respect to a Collaboration Compound or a Licensed Product.

      7.8 Delay. If the Reviewing Party requests a delay as described in Section
7.7 above, the Publishing Party shall delay submission or presentation of the
publication for a period of forty-five (45) days from the date of such request
to enable patent applications protecting each Party's rights in such information
to be filed. Upon the expiration of forty-five (45) days from transmission of
such proposed disclosures to the Reviewing Party, the Publishing Party shall be
free to proceed with the written publication or the oral presentation unless the
Reviewing Party has requested the delay described above. If a trade secret that
is the subject of a request made


                                       50



                                                               EXECUTION VERSION

under Section 7.7 cannot be otherwise protected without unreasonable expense to
the Reviewing Party, such information shall be omitted from the publication.

      7.9 Confidential Terms. Except as otherwise required by Law, the terms of
this Agreement shall be considered Confidential Information of each Party.
Notwithstanding the provisions of Section 7.1, each Party shall be entitled to
disclose the terms of this Agreement to a Party's or its Affiliates'
accountants, attorneys and other professional advisors, and any existing or
potential bona fide investors, lenders, or acquirors, on the condition that such
entities or persons agree to keep such terms confidential for the same time
periods and to the same extent as such Party is required to keep such terms
confidential.

                                    ARTICLE 8

                         REPRESENTATIONS AND WARRANTIES

      8.1 PTC. PTC represents and warrants that: (i) it is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (ii) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of PTC; (iii)
it has the right to grant the rights and licenses granted to Schering herein
(including without limitation the Schering Licenses); (iv) none of the
execution, delivery or performance of this Agreement will conflict with, or
result in a breach under any agreement, instrument or understanding, oral or
written, to which it or its Affiliates is a party or by which it or its
Affiliates may be bound; (v) this Agreement constitutes a legal, valid and
binding obligation of PTC, enforceable in accordance with its terms; and (vi)
PTC has obtained all necessary consents, approvals and authorizations of all
government authorities and other Third Parties required to be obtained by PTC or
its Affiliates in connection with the execution, delivery and performance of
this Agreement.

      8.2 Schering. Schering represents and warrants that: (i) it is a
corporation duly organized, validly existing and in good standing under the laws
of Switzerland; (ii) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
Schering; (iii) it has the right to grant the rights and licenses granted to PTC
herein; (iv) none of the execution, delivery or performance of this Agreement
will conflict with, or result in a breach under any agreement, instrument or
understanding, oral or written, to which it or its Affiliates is a party or by
which it or its Affiliates may be bound; (v) this Agreement constitutes a legal,
valid and binding obligation of Schering, enforceable in accordance with its
terms; and (vi) Schering has obtained all necessary consents, approvals and
authorizations of all government authorities and other Third Parties required to
be obtained by Schering or its Affiliates in connection with the execution,
delivery and performance of this Agreement.


                                       51



                                                               EXECUTION VERSION

      8.3 Knowledge of Pending Litigation. Each Party represents and warrants to
the other Party as of the Effective Date that, to its knowledge, there is no
claim, investigation, suit, action or proceeding pending or threatened against
it before or by any court, governmental entity or arbitrator that, individually
or in the aggregate, could reasonably be expected to materially impair the
ability of such Party to perform any obligation under this Agreement.

      8.4 Additional Representations and Warranties of PTC. PTC further
represents and warrants to Schering, as of the Effective Date, as follows:

            (a) To the best of its knowledge, Schedule 1.48 contains a complete
and accurate list of all PTC Compounds.

            (b) Taken together, Schedule 1.47A and Schedule 1.53 contain a
complete and accurate list of all Patents that are Controlled by PTC or any of
its Affiliates that are relevant to the Research of a Viral IRES Inhibitor.
Except as disclosed on Schedule 1.47A the Patents listed on Schedule 1.47A are
owned by PTC free and clear of any liens, charges, claims and encumbrances, and
no other person, corporate or other private entity, or governmental or
university entity or subdivision thereof has any claim of ownership or right to
obtain compensation with respect to such Patents.

            (c) Schedule 1.53 contains a complete and accurate list of all
Patents that are Controlled by PTC or any of its Affiliates that are relevant to
the Development, Manufacture, use or Commercialization of Collaboration
Compounds in the Field. Schedule 8.4(c) is a list of all agreements between PTC
or its Affiliates and any Third Party relating to any of the PTC Compounds
listed on Schedule 1.48. The Patents listed on Schedule 1.53 are owned by PTC
free and clear of any liens, charges, claims and encumbrances, and no other
person, corporate or other private entity, or governmental or university entity
or subdivision thereof has any claim of ownership or right to obtain
compensation with respect to such Patents.

            (d) Except as disclosed on Schedule 1.47A, there are no Patents or
Know-How owned or licensed by PTC or its Affiliates as of the Effective Date
that may be relevant to the Research of a Viral IRES Inhibitor that are not
Controlled by PTC.

            (e) There are no Patents or Know-How owned or licensed by PTC or its
Affiliates as of the Effective Date that may be relevant to the Development,
Manufacture, use or Commercialization of Collaboration Compounds in the Field
that are not Controlled by PTC.

            (f) To the best of PTC's knowledge, the conception, development and
reduction to practice of the PTC Intellectual Property, and the identification
and synthesis of the PTC Compounds, has not constituted or involved the
misappropriation of trade secrets of any Third Party.

            (g) To the best of PTC's knowledge, the importation, manufacture,
use and sale of PTC Compounds in the Field does not and will not infringe the
Patent rights or other intellectual property rights of any Third Party.

            (h) To the best of PTC's knowledge, none of the PTC Patents is
invalid or


                                       52



                                                               EXECUTION VERSION

unenforceable. No claim has been made against PTC or its Affiliates asserting
the invalidity, misuse, unregisterability, unenforceability or non-infringement
of any of the PTC Patents or challenging its or its Affiliates' rights to use or
ownership of any of the PTC Patents or making any adverse claim of ownership
thereof. It is understood, however, that PTC does not warrant that any PTC
Patent will be granted or upheld if its validity or enforceability is contested.

            (i) PTC has maintained the PTC Patents in full force and effect,
including without limitation by paying all maintenance fees associated with such
patents. PTC has complied in all material respects with all applicable laws,
rules and regulations during the course of its filing and prosecution of the PTC
Patents in the Territory, including without limitation all rules of the United
States Patent and Trademark Office ("USPTO") and any regulations applicable to
the filing and prosecution of Patent rights before the USPTO.

            (j) Prior to the date hereof, PTC has not conducted any Research
with the intent of synthesizing or identifying Active Compounds except as part
of its medicinal chemistry program directed at viral IRES inhibitors.

      8.5 Additional Representations and Warranties of Schering. To the best of
its knowledge, Schedule 1.67 contains a complete and accurate list of all
Schering Compounds existing as of the Effective Date.

      8.6 Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT NOTHING IN
THIS AGREEMENT IS OR SHALL BE CONSTRUED AS A WARRANTY OR REPRESENTATION BY
EITHER PARTY AS TO THE VALIDITY OR SCOPE OF ANY PTC PATENT OR SCHERING PATENT OR
A REPRESENTATION OR WARRANTY BY EITHER PARTY OF THE ACCURACY, SAFETY, OR
USEFULNESS FOR ANY PURPOSE OF ANY INTELLECTUAL PROPERTY AT ANY TIME MADE
AVAILABLE TO THE OTHER PARTY.

                                    ARTICLE 9

                              INTELLECTUAL PROPERTY

      9.1   Ownership and Disclosure of Program Inventions.  All right, title
and interest in all Program Inventions shall be owned as follows:

            (a)   PTC shall own all Program Inventions that are Invented
solely by one or more employees, agents or consultants of PTC or its
Affiliates;

            (b)   Schering shall own all Program Inventions that are Invented
solely by one or more employees, agents or consultants of Schering or its
Affiliates; and

            (c) PTC and Schering shall jointly own all Program Inventions that
are Invented by one or more employees, agents or consultants of PTC or its
Affiliates, together with one or more employees, agents or consultants of
Schering or its Affiliates (together, the "Joint Inventions").


                                       53



                                                               EXECUTION VERSION

In the event of a dispute regarding inventorship, the Parties shall resolve such
dispute through referral to binding arbitration by a single arbitrator mutually
agreed by the Parties under the Commercial Arbitration Rules of the American
Arbitration Association (or such other arbitral body and rules as the Parties
may mutually agree), and the arbitrator's judgment on inventorship shall be
binding on the Parties and may be enforced by application to any governmental
entity or court having jurisdiction thereof. The Parties acknowledge that the
ownership rights set out in this Section 9.1 are subject to the licenses and
other rights granted to and obligations of each Party pursuant to Article 4A,
Article 5, Article 6 and Section 11.7 of this Agreement. Subject to the licenses
and other rights granted to and obligations of each Party pursuant to Article
4A, Article 5, Article 6 and Section 11.7 and the provisions of Section 2.10,
each Party shall be free to use and exploit (which shall include the right to
grant licenses under such Parties' interest therein) the Joint Patents, without
any duty of accounting to the other Party except with respect to the payment
obligations under Article 6 and Section 11.7.

In order to protect the Parties' patent rights under U.S. law in any inventions
Invented in the performance of the Research Program, each Party agrees to
maintain a policy which requires its employees or others acting on behalf of
such Party or its Affiliates or licensees to record and maintain all data and
information developed during the Research Program in such a manner as to enable
the Parties to use such records to establish the earliest date of invention
and/or diligence to reduction to practice (an "Invention Policy"). Such
Invention Policy shall, among other things, provide that such individuals are
(i) to record all inventions generated by them in standard laboratory notebooks
(or electronic equivalents that meet the requirements of applicable Law) that
are dated and corroborated by non-inventors on a regular, contemporaneous basis,
and (ii) to complete invention disclosure memorandums or similar documents with
respect to any invention first identified, discovered, conceived, developed, or
reduced to practice by them. At regularly scheduled meetings of the Joint Patent
Team and promptly in response to a written request from the other Party, each
Party shall disclose to the other Party all Program Inventions disclosed to it
and its Affiliates pursuant to such Invention Policy, as well as any other
Program Inventions that come to its attention and that are Invented by employees
or others acting on its behalf or its Affiliates.

      9.2 Assignment of Program Inventions by Employees, Agents or Independent
Contractors. Each Party agrees that all of its employees or its Affiliates
employees acting on its or its Affiliates' behalf in conducting Research under
the Research Plan, or Development, Manufacturing, or Commercialization
activities with respect to Licensed Products, shall be obligated to assign to
such Party, or as such Party shall direct, all Program Inventions Invented by
such employees. In the case of non-employees working on behalf of a Party or its
Affiliates in connection with the Research Plan, that Party shall endeavor to
obtain either an assignment or license establishing its Control of all Program
Inventions Invented by such non-employees. Each Party agrees that it will use
reasonable efforts to ensure that any employees, agents, or independent
contractors in their employ or who are hired or retained by it to perform or
manage performance of any activities required pursuant to this Agreement will
comply with the applicable Invention Policy and promptly disclose to it any
Program Inventions.

      9.3   Patent Prosecution and Related Activities.


                                       54



                                                               EXECUTION VERSION

            (a) Schering Patents. Schering shall be responsible, at its sole
expense, for preparing, filing, prosecuting, handling any interferences, and
maintaining Schering Patents (excluding Joint Patents). PTC shall have full
rights of consultation with Schering and the patent counsel selected by Schering
in all matters related to the Schering NV Patents. Schering shall use reasonably
diligent efforts to implement all reasonable requests made by PTC with regard to
the preparation, filing, prosecution and/or maintenance of such Schering NV
Patents.

            (b) PTC Patents. PTC shall be primarily responsible for preparing,
filing, prosecuting, handling any interferences, and maintaining those PTC
Patents (excluding Joint Patents) that are relevant to the Development,
Manufacturing or Commercialization of Highly Active Collaboration Compounds,
Schering Field NV Compounds or Schering Viral Products in the Field (the "PTC
Licensed Compound Patents"). Schering shall have full rights of consultation
with PTC and the patent counsel selected by PTC in all matters related to the
PTC Licensed Compound Patents. All strategic decisions related to the
preparation, filing, prosecuting, handling of any interferences and maintaining
such PTC Licensed Compound Patents shall be subject to the mutual agreement of
the Parties. The reasonable out-of-pocket costs and expenses incurred following
the Effective Date in connection with the preparation, filing, prosecuting,
handling any interferences and maintaining such PTC Licensed Compound Patents
[**]. PTC shall be responsible, at its sole expense, for preparing, filing,
prosecuting, handling any interferences, and maintaining any PTC Patents
(excluding Joint Patents) that are not PTC Licensed Compound Patents. Schering
shall have full rights of consultation with PTC and the patent counsel selected
by PTC in all matters related to the PTC NV Patents. PTC shall use reasonable
diligent efforts to implement all reasonable requests made by Schering with
regard to the preparation, filing, prosecution and/or maintenance of such PTC NV
Patents.

            (c) Joint Patents. Schering shall be primarily responsible for
preparing, filing, prosecuting, handling any interferences, and maintaining
Joint Patents. PTC shall have full rights of consultation with Schering and the
patent counsel selected by Schering in all matters that are related to the
prosecution of the Joint Patents. All strategic decisions related to the
preparation, filing, prosecuting, handling of any interferences and maintaining
such Joint Patents shall be subject to the mutual agreement of the Parties. The
reasonable out-of-pocket costs and expenses incurred in filing, prosecuting,
handling any interferences with respect to, and maintaining any Joint Patents
shall be shared equally by the Parties on an ongoing basis.

            (d) Permitted Disclosures. Subject to the prior consent of the other
Party, not to be unreasonably withheld, a Party shall be entitled to disclose in
the specification of a patent application filed by it pursuant to this Agreement
any Know-How owned by the other Party to the extent reasonably necessary to
support and enable claims in such Patent applications.

            (e) Joint Patent Team; Related Matters. Following the Effective
Date, the Parties shall form a joint team consisting of at least one
representative from each Party's patent or legal department in order to oversee
the filing, prosecution, any interferences, and maintenance of the PTC Licensed
Compound Patents, PTC NV Patents, Joint Patents, and Schering NV Patents
(collectively, "Collaboration Patents") as contemplated by this Article 9 (the
"JPT"). The JPT shall meet as needed during the Term, but no less than
semi-annually


                                       55



                                                               EXECUTION VERSION

(unless otherwise agreed by the Parties), and shall participate in and report to
regular meetings of the JSC as requested by the JSC. Following a termination of
this Agreement under Article 11, the JPT shall survive until there are no
further actual prosecutions or potential prosecutions of any Collaboration
Patents, at which time the JPT shall automatically terminate.

      9.4 Cooperation; Request to Responsible Party. Each of PTC and Schering
shall keep the other Party fully informed as to the filing and prosecution of
the Collaboration Patents for which it is the responsible prosecuting Party,
including, without limitation, by providing the other Party with the opportunity
to fully review and comment on any documents which will be filed in any patent
office as far in advance of the applicable filing date as feasible, and
providing the other Party with copies of any documents that such Party receives
from such patent offices promptly after receipt, including notice of all
interferences, reissues, re-examinations, oppositions or requests for patent
term extensions. PTC and Schering shall each reasonably cooperate with and
assist the other at its own expense in connection with such activities, at the
other Party's request. Notwithstanding anything in this Section 9.4 to the
contrary, but subject to the provisions of Section 9.3, each Party shall always
be entitled to proceed with any submission or other contemplated action if it
determines time is of the essence, provided that it makes reasonable efforts to
inform the other Party as early as practicable and to consider in good faith its
comments where applicable.

      9.5 Election Not to Prosecute. Upon sixty (60) days prior written notice
to the other Party, the Party that is responsible for prosecuting a particular
Collaboration Patent pursuant to the provisions of Section 9.3 may elect to
discontinue the prosecution of any Patent applications relating to such
Collaboration Patent and/or not to file or conduct any further activities with
respect to such Collaboration Patent. In the event the responsible Party
declines to file or, having filed, fails to further prosecute or maintain any
Collaboration Patent filed pursuant to Section 9.3(a), 9.3(b) or 9.3(c) or to
conduct any interferences, re-examinations, reissues, or oppositions with
respect thereto, the other Party shall have the right to prepare, file,
prosecute and maintain such Collaboration Patent in such countries as it deems
appropriate, and conduct any interferences, re-examinations, reissues or
oppositions related thereto at its sole expense. The Party that elected to
discontinue patent prosecution activities pursuant to this Section 9.5 agrees to
cooperate in any manner reasonably requested in connection with any such actions
by such Party, at the expense of the requesting Party, and shall assign all
right, title and interest in and to such Patent to the Party continuing such
activities.

      9.6   Third Party Infringement.

            (a) Notification of Infringement. Should any Third Party infringe,
or reasonably appear to be infringing, any Collaboration Patent, the Party
learning of such infringement or potential infringement shall promptly notify
the other Party upon learning of the same.

            (b) Right to Enforce Collaboration Patents. Schering shall have the
primary right, at its expense, to initiate and direct legal action to enforce
the Collaboration Patents (excluding Schering NV Patents) against infringement
or misappropriation by Third Parties, as well as to defend any action or
proceeding relating to the invalidity or unenforceability of such


                                       56

                                                               EXECUTION VERSION

Patents. PTC shall have the primary right, at its expense, to initiate and
direct legal action to enforce the Schering NV Patents against infringement or
misappropriation by Third Parties, as well as to defend any action or proceeding
relating to the invalidity or unenforceability of such Patents.

            (c) Right to Enforce Other Patents. Except as provided in Section
11.7(c)(iv), Schering shall have the sole right to initiate and direct legal
action to enforce the Schering Patents (to the extent they are not Collaboration
Patents) and the Schering Background Patents against infringement or
misappropriation by Third Parties, as well as to defend any action or proceeding
relating to the invalidity or unenforceability of such Patents. PTC shall have
the sole right to initiate and direct legal action to enforce the PTC Patents
(to the extent they are not Collaboration Patents) and the PTC Background
Patents against infringement or misappropriation by Third Parties, as well as to
defend any action or proceeding relating to the invalidity or unenforceability
of such Patents.

            (d) Failure to Enforce Collaboration Patents. If within forty-five
(45) days (or such shorter period as is required to enable a Party to comply
with deadlines provided by applicable Law) following receipt of written notice
of an infringement of a Collaboration Patent (or written notice of an action or
proceeding alleging invalidity or unenforceability of such Collaboration
Patent), the Party that has the primary right to prosecute infringers of such
Patent pursuant to Section 9.6(b) fails to take action to halt such alleged
infringement by filing suit against the alleged infringer or taking other
appropriate action (e.g., initiating discussions with the infringing Third
Party) or to defend such an action or proceeding, the other Party may, at its
expense, take such legal action as it deems appropriate, in its own name, to
halt such an alleged infringement or defend such an action or proceeding. Each
Party agrees to render such reasonable assistance as the prosecuting Party may
request, including without limitation joining as a party if necessary for the
maintenance of the legal action. The prosecuting Party shall retain its rights
under Section 9.6(b) to initiate patent infringement litigation with respect to
an infringer of a Collaboration Patent if it places such infringer on proper
legal notice that such infringer's infringing activities will be addressed in a
legal action initiated subsequent to the resolution of another infringement
action involving a Collaboration Patent.

            (e) No Settlement Without Consent. Neither Party shall enter into
any settlement of any claim, suit or proceeding under Sections 9.6(b) or 9.6(d)
which admits or concedes that any aspect of the Collaboration Patents are
invalid or unenforceable without the prior written consent of the other Party.

            (f) Cooperation. Each Party shall keep the other reasonably informed
of the progress of any claim, suit or proceeding subject to Sections 9.6(b) or
9.6(d) and cooperate reasonably in connection with such activities at the
request and expense of the Party involved in such claim, suit or proceeding.
Each Party may be represented by counsel of its own selection at its own expense
in any suit or proceeding brought by the other Party to restrain or obtain
monetary damages for infringement by any Third Party of any Patents owned
(solely or jointly) by it; provided, however, the foregoing shall not affect the
right to control such litigation by the Party which has instituted it.


                                       57

                                                               EXECUTION VERSION

            (g) Retention of Recoveries. All amounts recovered from a Third
Party pursuant to this Section 9.6 shall be used first to reimburse the
reasonable costs and expenses (including reasonable attorney's fees and costs)
of the Party prosecuting or defending such action (including any settlement
negotiation or proceeding). With respect to any recovery for infringement of a
Collaboration Patent (i) if Schering initiated and prosecuted the action
pursuant to Section 9.6(b) or (d), Schering shall receive [**] percent ([**]%)
of the remaining amount and PTC shall receive the balance of such remaining
amount, and (ii) if PTC initiated and prosecuted the action pursuant to Section
9.6(b) or (d), PTC shall receive [**] percent ([**]%) of the remaining amount
and Schering shall receive the balance of such remaining amount. With respect to
any recovery for infringement of a Patent that is not a Collaboration Patent,
except as provided in Section 11.7(c)(iv), the Party which owns such Patent
shall receive [**] percent ([**]%) of such remaining amount.

      9.7   Infringement Claims by Third Parties.

            (a) Infringement Claims Related to Schering Viral Products. In the
event that a Third Party sues PTC, Schering, or any of their Affiliates or any
Sublicensee alleging that Schering's or its Affiliates' or Sublicensees' making,
using, importing, selling or offering to sell a Highly Active Collaboration
Compound, Schering Field NV Compound, or Schering Viral Product during the Term
infringes or will infringe claims in said Third Party's Patents, Schering shall
be responsible for defending such claim, suit or proceeding in accordance with
the provisions of Section 10.2(ii) and 10.3. If, as a result of a judgment in
the litigation or settlement with the Third Party, Schering or its Affiliates or
Sublicensees is required to pay to such Third Party royalties or other
consideration related to such Third Party's Patents which claim the composition
of matter of a Highly Active Collaboration Compound or Schering Field NV
Compound, the use of a Highly Active Collaboration Compound or Schering Field NV
Compound in the Field, or a method of treating, diagnosing or preventing any
disease or condition through the use of a Highly Active Collaboration Compound
or Schering Field NV Compound, or a method of manufacturing a Highly Active
Collaboration Compound or Schering Field NV Compound, Schering may treat such
payments as royalties payable under Third Party License Agreements for purposes
of Section 6.7(b), subject to the limits set forth in Section 6.8.

            (b) Infringement Claims Related to Schering Non-Viral Products. In
the event that a Third Party sues PTC, Schering, or any of their Affiliates or
any Sublicensee of Schering alleging that Schering's or its Affiliates' or
Sublicensees' making, using, importing, selling or offering to sell a Schering
Non-Viral Product, or a NV Compound contained therein, infringes or will
infringe claims in said Third Party's Patents, Schering shall be responsible for
defending any such claim, suit or proceeding in accordance with the provisions
of Section 10.2(ii) and Section 10.3.

            (c) Infringement Claims Related to PTC Products. In the event that a
Third Party sues Schering, PTC, or any of their Affiliates or any Sublicensee of
PTC alleging that PTC's or its Affiliates' or Sublicensees' making, using,
importing, selling or offering to sell a PTC Product, or a NV Compound contained
therein, infringes or will infringe claims in said Third Party's Patents, PTC
shall be responsible for defending any such claim, suit or proceeding in
accordance with the provisions of Section 10.1(ii) and Section 10.3.


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                                                               EXECUTION VERSION

      9.8 Certification Under Drug Price Competition and Patent Restoration Act.
Each Party shall immediately give written notice to the other Party of any
certification of which they become aware filed pursuant to 21 U.S.C. Section
355(b)(2)(A) (or any amendment or successor statute thereto) claiming that any
Collaboration Patent is invalid or unenforceable, or that infringement will not
arise from the manufacture, use, importation or sale of a product containing a
Collaboration Compound by a Third Party.

      9.9 Listing of Patents. With respect to any Schering Viral Products or
Schering Non-Viral Products, Schering shall have the sole right to determine
which of the PTC Patents, PTC NV Patents, Joint Patents, and Schering Patents,
if any, shall be listed for inclusion in the Approved Drug Products with
Therapeutic Equivalence Evaluations pursuant to 21 U.S.C. Section 355, or any
successor law in the United States, together with any comparable laws or
regulations in any other country in the Territory. With respect to any PTC
Products, PTC shall have the sole right to determine which of the PTC Patents,
Joint Patents, Schering NV Patents, and Schering Patents, if any, shall be
listed pursuant to such Laws.

      9.10 Diligence With Respect to Marketing Exclusivity and Patent Term
Extensions. Each Party shall use Commercially Reasonable Efforts to secure any
available forms of Marketing Exclusivity and extensions of patent term as may be
available in a particular country or region for any Licensed Product that is
being Commercialized by it or its Affiliates or Sublicensees.

                                   ARTICLE 10

                                 INDEMNIFICATION

      10.1 PTC. PTC shall indemnify, defend and hold harmless Schering, its
Affiliates, and each of their respective directors, officers, employees and
agents (each a "Schering Indemnitee") from and against any and all liabilities,
damages, losses, costs and expenses (including reasonable attorneys' and
professional fees and other expenses of litigation and/or arbitration) (a
"Liability") resulting from a claim, suit or proceeding made or brought by a
Third Party against a Schering Indemnitee arising from or occurring as a result
of (i) any breach of the representations and warranties of PTC set forth in
Article 8, (ii) the practice by PTC of any rights granted pursuant to Section
5.4(b) or 11.7(b) (including, without limitation, claims arising from or
occurring as a result of PTC's or any Third Party's Development, testing,
Manufacture, importation, use, offer for sale, sale or other distribution of a
PTC Product or a Schering Viral Product pursuant to the exercise of such
licenses), (iii) the use by PTC or any of its Affiliates of any Materials
provided by Schering, or (iv) the negligence or willful misconduct of PTC,
except, (A) in the case of Subsections 10.1(i) and 10.1(iv), to the extent such
Liability results from the negligence or willful misconduct of Schering, and (B)
in the case of Subsection 10.1(iii), to the extent such Liability results from
the breach of any warranty provided by Schering pursuant to Section 2.9.

      10.2 Schering. Schering shall indemnify, defend and hold harmless PTC, its
Affiliates

                                       59

                                                               EXECUTION VERSION

and each of their respective directors, officers, employees and agents (each a
"PTC Indemnitee") from and against any and all Liability resulting from a claim,
suit or proceeding made or brought by a Third Party against a PTC Indemnitee
arising from or occurring as a result of (i) any breach of the representations
and warranties of Schering set forth in Article 8, (ii) any Development,
testing, Manufacture, importation, use, offer for sale, sale or other
distribution of any Licensed Product by Schering or its Affiliates and
Sublicensees (including, without limitation, product liability claims), (iii)
the use by Schering, its Affiliates or Sublicensees of any Materials provided by
PTC, or (iv) the negligence or willful misconduct of Schering, except, (A) in
the case of Subsections 10.2(i) or 10.2(iv), to the extent such Liability
results from the negligence or willful misconduct of PTC, and (B) in the case of
Subsection 10.2(iii), to the extent such Liability results from the breach of
any warranty provided by PTC pursuant to Section 2.9.

      10.3 Procedure. In the event that any Indemnitee intends to claim
indemnification under this Article 10 it shall promptly notify the other Party
(the "Indemnitor") in writing of the claim, suit or proceeding. The Indemnitor
shall have the sole right to control the defense and settlement thereof;
provided, however, the indemnifying Party will not, absent the consent of the
indemnified Party (which consent will not be unreasonably withheld or delayed),
consent to the entry of any judgment or enter into any settlement (x) that
provides for any relief other than the payment of monetary damages for which the
indemnifying Party shall be solely liable, or (y) where the claimant or
plaintiff does not release the indemnified Party from all liability in respect
thereof. The Indemnitee shall cooperate with the Indemnitor and its legal
representatives in the investigation and defense of any action, claim or
liability covered by this Article 10. The Indemnitee shall not, except at its
own cost, voluntarily make any payment or incur any expense with respect to any
claim or suit without the prior written consent of the Indemnitor, which the
Indemnitor shall not be required to give. In no event shall a Party be liable
pursuant to this Article 10 for any claims that are compromised or settled
without its prior written consent.

                                   ARTICLE 11

                              TERM AND TERMINATION

      11.1 Term. The term of this Agreement (the "Term") shall commence on the
Effective Date and, unless earlier terminated as provided in this Article 11,
shall continue in full force and effect on a country-by-country and Licensed
Product-by-Licensed Product basis until there are no remaining royalty payment
obligations in such country with respect to such Licensed Product, at which time
the Agreement shall expire in its entirety with respect to such Licensed Product
in such country. The Term shall expire on the date the Agreement has expired
with respect to all Licensed Products in all countries in the Territory.

      11.2 Schering's Unilateral Termination Right. At any time following the
date that is three (3) years after the Effective Date, Schering shall have the
right to terminate this Agreement, at any time and for any reason, upon [**]
prior written notice to PTC; provided, however, in the event that Schering has
not designated a Development Candidate within two (2) years following the
Effective Date, then Schering shall have the right to terminate this

                                       60

                                                               EXECUTION VERSION

Agreement pursuant to this Section 11.2 at any time after the date that is two
(2) years after the Effective Date. In the event that Schering terminates this
Agreement pursuant to the provisions of this Section 11.2, the provisions of
Section 11.7 shall be applicable.

      11.3 Termination for Cause. In the event of a material breach of this
Agreement by a Party, the other Party shall be entitled to give the Party in
default notice requiring it to cure such default. If such material breach is not
cured within sixty (60) days after receipt of such notice, the notifying Party
shall be entitled (without prejudice to any of its other rights conferred on it
by this Agreement) to terminate this Agreement by giving written notice to the
defaulting Party, with such termination to take effect immediately.
Notwithstanding the foregoing, in the event of a default which is curable, if
the material breach is not reasonably capable of being cured within the sixty
(60) day cure period and the defaulting Party is making a good faith effort to
cure such default, the notifying Party may not terminate this Agreement for so
long as the defaulting Party is diligently pursuing a cure; provided, however,
that the breaching Party shall lose its right to continue to cure pursuant to
this sentence if at any time such Party ceases to make a good faith effort to
cure such default. The right of either Party to terminate this Agreement as
herein above provided shall not be affected in any way by its waiver of, or
failure to take action with respect to, any previous default. Notwithstanding
the foregoing, if the material breach relates only to a specific Licensed
Product in a specific country or group of countries, then any termination
pursuant to this Section 11.3 shall apply only to the affected Licensed Products
or countries. Termination of this Agreement pursuant to this Section 11.3 shall
automatically be stayed pending the outcome of any dispute resolution
proceedings initiated pursuant to Article 12 that relate to the subject matter
of such termination. In the event of a termination under this Section 11.3 by
PTC, the provisions of Section 11.7 shall be applicable, and in the event of a
termination under this Section 11.3 by Schering, the provisions of Section 11.8
shall be applicable.

      11.4 Termination for Insolvency. This Agreement may be terminated by a
Party upon written notice to the other Party in the event that (i) the other
Party shall make an assignment for the benefit of its creditors, file a petition
in bankruptcy, petition or apply to any tribunal for the appointment of
custodian, receiver, or any trustee for it or a substantial part of its assets,
or shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (ii) if there shall
have been filed against the other Party any such bona fide petition or
application, or any such proceeding shall have been commenced against it, in
which an order for relief is entered or which remains undismissed or unstayed
for a period of ninety (90) days or more; or (iii) if the other Party by any act
or omission shall indicate its consent to, approval of or acquiescence in any
such petition, application or proceeding or order for relief or the appointment
of a custodian, receiver or trustee for it or any substantial part of its
assets, or shall suffer any such custodianship, receivership or trusteeship to
continue undischarged or unstayed for a period of ninety (90) days or more; or
(iv) anything analogous to any of the foregoing occurs in any applicable
jurisdiction. Termination shall be effective upon the date specified in such
notice. In the event of a termination under this Section 11.4 by PTC, the
provisions of Sections 5.7 and 11.7 shall be applicable, and in the event of a
termination under this Section 11.4 by Schering, the provisions of Section 5.7
and 11.8 shall be applicable.

      11.5  Additional Terminations.


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                                                               EXECUTION VERSION

            (a) Termination for Futility. If during the Research Term, the
Parties mutually determine, in good faith, that the pursuit of Viral IRES
Inhibitors for use in the Viral Field is impracticable for scientific or
commercial reasons, or that the Research Program is not likely to lead to a
Development Candidate, then upon such determination the Parties shall terminate
this Agreement. Upon termination of this Agreement pursuant to this Section
11.5(a), each Party shall as promptly as practicable provide to the other Party
all copies of all data, reports, records and materials in its possession or
control which relate to Collaboration Compounds or the Research Program and
which have not previously been disclosed to the other Party (provided that the
provision to a Party of the foregoing copies shall not be deemed to create any
additional rights or licenses in any such copies or the intellectual property
embodied therein, and such Party's rights to use or exploit such information and
rights shall be solely as expressly granted by the disclosing Party to the other
Party elsewhere in the Agreement and, with respect to Joint Know-How or Joint
Patents, those rights of the receiving Party as a joint owner). In the event of
a termination pursuant to this Section 11.5(a), (i) Schering's rights under the
licenses granted to it pursuant to Sections 5.1(a), 5.1(b) and 5.2 shall
terminate, (ii) all Highly Active Collaboration Compounds shall thereafter be
deemed to be NV Compounds, (iii) the Parties' licenses under the rights granted
to each of them pursuant to Article 4A and Sections 5.3, 5.4 and 5.5(c) and
5.5(d) shall survive termination, and (iv) in addition to the provisions set
forth in Section 11.10, the provisions of Sections 6.7(d), 6.7(e), 6.7(f), and
6.9 through and including 6.17 shall continue to apply with respect to
Schering's Development and Commercialization of Schering NV Products and PTC's
Development and Commercialization of PTC Products.

            (b) Termination due to Publication of Third Party Patent Rights. In
the event that, during the Research Term, a Patent (including without limitation
a patent application) owned by a Third Party is either granted or published in a
Major Market and such Patent claims (A) the composition of matter of, or
pharmaceutical preparations containing, a substantial portion of the Highly
Active Collaboration Compounds, or (B) the use of Highly Active Collaboration
Compounds or pharmaceutical preparations containing Highly Active Collaboration
Compounds in the Viral Field (a "Blocking Patent"), then the Parties shall
confer in good faith and endeavor to agree upon an appropriate course of action.
As part of such activities, the Parties shall, upon the request of either Party,
seek the advice of an independent Third Party patent counsel mutually acceptable
to the Parties. If the Parties are unable to agree upon an appropriate course of
action within ninety (90) days of conferring regarding the same, then Schering
shall have the right to terminate this Agreement upon written notice to PTC;
provided, that, if, within ten (10) days of receiving such written notice PTC
notifies Schering in writing that it intends to obtain an Unqualified Blocking
Opinion with respect to such Blocking Patent, then such written notice of
termination by Schering shall not be effective until the earlier of (i) ninety
(90) days from the date of PTC's notice, or (ii) the date PTC informs Schering
it is unable to obtain such Unqualified Blocking Opinion; and provided, further,
if PTC obtains an Unqualified Blocking Opinion within such ninety (90) day
period, then Schering shall have no right to terminate this Agreement pursuant
to this Section 11.5(b). In the event of a termination under this Section
11.5(b), the provisions of Section 11.7 shall be applicable. For the purposes of
this Agreement, "Unqualified Blocking Opinion" means an opinion concluding that
there is not [**] would find that the activities of the Parties pursuant to this
Agreement with respect to a Highly Active Collaboration Compound would infringe
[**], and such opinion [**].


                                       62

                                                               EXECUTION VERSION

      11.6  Early Termination of Research Program.

            (a) Termination of Certain Provisions for Triggering Event. In the
event that a Competitor, either alone or together with its Affiliates, acquires,
directly or indirectly, fifty percent (50%) or more of the voting stock of PTC
or any of its Affiliates, or all or substantially all of the assets of PTC or
its Affiliates related to the PTC Patents and PTC Know-How, whether through
merger, consolidation, acquisition or otherwise, or in the event that PTC or any
of its Affiliates engages in the Research, Development or Commercialization of a
product for the treatment of HCV (either alone or in collaboration with a Third
Party) other than pursuant to this Agreement (a "PTC Triggering Event"),
Schering shall have the right to terminate the provisions of Article 3 upon
written notice to PTC; provided, however, in the event that such PTC Triggering
Event occurs prior to the end of the Research Term, then the termination of
Article 3 pursuant to this Section 11.6(a) shall not apply to the JSC's
oversight and direction of the Research Program unless, following such
Triggering Event, PTC or its Affiliates continues to engage in the Research,
Development or Commercialization of a product for the treatment of HCV (either
alone or in collaboration with a Third Party). In the event that Schering
exercises its right to terminate the provisions of Article 3, then the following
additional provisions shall also terminate: Sections 4.3, 4.5, 4.6, 4.8,
4.10(c), PTC's participation rights under Sections 4.10(b) and Section 4.13. In
addition, should the PTC Triggering Event occur at any time prior to the
expiration of the Research Term, Schering shall also have the right to terminate
the Research Program upon sixty (60) days prior written notice to PTC.
Notwithstanding anything in this Section 11.6(a) to the contrary, a PTC
Triggering Event shall not include any internal PTC Research efforts not
undertaken through, or as part of, a collaboration or licensing arrangement with
a Third Party. For the avoidance of doubt, subcontracting to perform aspects of
PTC's internal Research efforts on behalf of PTC shall not be deemed to be a
collaboration or licensing arrangement with a Third Party.

            (b) Effect of Terminating the Research Program. Upon termination of
the Research Program by Schering pursuant to Section 11.6(a), PTC shall promptly
provide to Schering copies of all data, reports, records and materials in PTC's
or its Affiliates possession or Control that relate to Collaboration Compounds
or the Research Program to the extent not previously provided to Schering. The
provision to Schering of the foregoing copies shall not be deemed to create any
additional rights or licenses in any such copies or the intellectual property
embodied therein, and Schering's rights to use or exploit such information and
rights shall be solely as expressly granted by PTC to Schering in Article 5 and,
with respect to Joint Know-How or Joint Patents, those rights of Schering as a
joint owner. Upon such termination, (x) all of PTC's obligations under Article 2
(excluding Sections 2.6, 2.7 and 2.10) shall immediately terminate, (y) the
following provisions shall terminate: Article 3, and Sections 4.3, 4.5, 4.6,
4.8, 4.10(c), and PTC's participation rights under Sections 4.10(b), and (z) the
Research Term shall terminate. For clarity, Schering's exercise of its rights
under this Section 11.6 shall not terminate any other rights (including without
limitation the licenses granted to Schering or PTC or their respective
Affiliates pursuant to Sections 5.2, 5.3, 5.4 and 5.5 hereof) or obligations of
the Parties (including without limitation either Party's obligations pursuant to
Article 6 hereof) under this Agreement.

      11.7 Consequences of Certain Terminations by the Parties. In the event
this

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                                                               EXECUTION VERSION

Agreement is terminated by Schering pursuant to Section 11.2 or 11.5(b), or by
PTC pursuant to Section 11.3 or 11.4, then:

            (a) Schering's rights under the licenses granted to it pursuant to
Sections 5.1(a), 5.1(b) and 5.2 shall terminate. In the case of a termination by
PTC pursuant to Section 11.3 that does not relate to a Schering Non-Viral
Product, Schering's license under Section 5.3 shall terminate, but Schering's
licenses under Section 5.4 shall survive for any Designated NV Compounds as of
the termination date. In the case of a termination by PTC pursuant to Section
11.3 that relates to a Schering Non-Viral Product, Schering's licenses under
Sections 5.3 and 5.4 shall terminate;

            (b) Schering shall, at the election of PTC, grant PTC the following
rights and licenses:

                  (i) an exclusive, worldwide license, with the right to grant
      sublicenses, under any Schering Patents and Schering Know-How existing at
      the time of termination which claim or constitute Program Inventions, or
      for which sufficient support exists in the written descriptions of such
      Schering Patents to support such a claim and there is an ability to
      prosecute such a claim (the "Schering Termination IP"), solely to Develop,
      make, have made, use, import, offer to sell and sell Schering Viral
      Products in the Field;

                  (ii) an exclusive, worldwide license, with the right to grant
      sublicenses, under any Schering Patents existing at the time of
      termination (excluding Schering Termination IP) which claim the
      composition of matter or method of using a Highly Active Collaboration
      Compound or Schering Field NV Compound that is being Developed in humans
      or Commercialized by Schering or its Affiliates as of the Termination Date
      (a "Terminated Compound") solely to Develop, make, have made, use, import,
      offer to sell and sell Schering Viral Product in the Field; and

                  (iii) an exclusive, worldwide license, with the right to grant
      sublicenses, under any Schering Patents and Schering Know-How existing at
      the time of termination (excluding Schering Termination IP) which (a) is
      being utilized for a Terminated Compound, and (b) is not within the scope
      of the license grant in Section 11.7(b)(ii), solely to Develop, make, have
      made, use, import, offer to sell and sell in the Field: (A) the specific
      formulations of Schering Viral Products that are then in clinical
      Development or are being Manufactured or Commercialized by Schering and
      its Affiliates as of the effective date of the termination (the
      "Termination Date"), and (B) any other formulations of such Schering Viral
      Products which differ from the foregoing specific formulations only with
      respect to the quantity or concentration of active ingredient contained
      therein or the quantity or concentration of any of the excipients
      contained in such specific formulations; provided, however, it is
      understood that the provisions of this Section 11.7(b)(iii)(B) shall not
      apply to any Schering Viral Product which includes different excipients or
      active ingredients from those contained in the foregoing specific
      formulations or which utilizes any proprietary Schering drug delivery or
      formulation technology that has not been applied to the foregoing specific


                                       64

                                                               EXECUTION VERSION

      formulations. For the avoidance of doubt, the license granted pursuant to
      this Section 11.7(b)(iii) shall not include (x) except as expressly
      provided in Section 11.7(b)(iii)(B), the right to utilize any Schering
      Patents or Schering Know-How to Develop or Commercialize any formulations
      of Schering Viral Products that differ from the specific formulations that
      are then in clinical Development or are being Manufactured or
      Commercialized by Schering and its Affiliates as of the Termination Date,
      or (y) the right to utilize any Patents that are Controlled by Schering
      that are not part of the Schering Patents.

      In the event a termination is limited to a specific country or group of
      countries, then the licenses granted to PTC pursuant to this Section 11.7
      shall be limited to such country or group of countries. PTC may specify
      which portions of the Schering Intellectual Property it wishes to license
      under this Section 11.7(b).

            (c) Schering shall reasonably cooperate with PTC in order to enable
PTC to assume the Development, Manufacture and/or Commercialization of all
Schering Viral Products then being Manufactured, Commercialized or in clinical
Development by Schering. Such cooperation and assistance shall be provided in a
timely manner (having regard to the nature of the cooperation or assistance
requested) and shall include without limitation:

                  (i) Schering shall transfer to PTC (or its nominee) all INDs
      and NDAs made or obtained by Schering or its Affiliates to the extent
      relating to the Terminated Compounds. Furthermore, Schering agrees that it
      will not thereafter exercise any rights under an agreement with a Third
      Party for the purpose of precluding PTC from referencing a Drug Master
      File controlled by such Third Party that is related to such a Terminated
      Compound and, to the extent Schering's consent is required in order to
      reference such Drug Master File, Schering hereby agrees to provide PTC
      with such consent.

                  (ii) Schering shall transfer to PTC (or its nominee), to the
      extent not previously provided, a copy of all Development Data in its
      possession or under its control relating to any Schering Viral Product
      then being Commercialized or in clinical Development by Schering and
      reasonably necessary or useful for its continued Development and/or
      Commercialization, including without limitation all such information
      contained in Schering's regulatory and/or safety databases, all in the
      format then currently maintained by Schering; provided, however, nothing
      in this Section 11.7(c)(ii) shall be deemed to expand the scope of the
      licenses or other rights granted to PTC pursuant to Section 11.7(b).

                  (iii) Schering shall grant a worldwide, royalty-free exclusive
      license to PTC, at PTC's request, to all trademarks and associated trade
      names and trade dress (together with the goodwill associated therewith)
      then being used on or in connection with the Schering Viral Products,
      provided that Schering shall not be obligated to license any trademarks,
      trade names or trade dress that include the words "Schering" or the name
      of any other Schering Affiliate, or any other words or marks used in
      connection with other drug products sold by Schering or its Affiliates;
      provided further that such license shall be limited solely for use in
      connection with Schering Viral Products.


                                       65

                                                               EXECUTION VERSION

                  (iv) (1) Schering's rights under Section 9.3(b) shall
      terminate (except, in the case of a termination pursuant to Section 11.2
      or 11.4, the last two sentences of Section 9.3(b)), (2) PTC shall assume
      primary responsibility for preparing, filing, prosecuting, handling of
      interferences and maintaining Joint Patents under Section 9.3(c), and
      Schering shall have the same right of consultation related to Joint
      Patents as PTC has under Section 9.3(c), (3) PTC shall thereafter be
      solely responsible for all costs and expenses related to the preparation,
      filing, prosecution, handling of interferences and maintaining of the PTC
      Patents (excluding Joint Patents), (4) Schering's right to enforce Third
      Party infringement of certain Collaboration Patents under Section 9.6(b)
      shall terminate (excluding, in the case of a termination pursuant to
      Section 11.2 or 11.4, the PTC NV Patents), (5) Schering's rights and
      obligations with respect to infringement claims by Third Parties under
      Section 9.7(a) shall terminate, (6) Schering's rights with respect to the
      listing of Patents relating to Schering Viral Products under Section 9.9
      shall terminate, and PTC shall have equivalent rights with respect to such
      listings, (7) PTC shall have a right to consult with Schering with respect
      the prosecution of any Schering Patents that are licensed to PTC pursuant
      to Section 11.7(b), (8) PTC shall have "march-in" rights with respect to
      the enforcement of the Schering Patents that are licensed to PTC pursuant
      to Section 11.7(b)(i) or (ii) against Third Party infringers that are
      comparable in scope to the rights it has with respect to the Collaboration
      Patents pursuant to Section 9.6(d), and Schering shall have the
      obligations of the non-prosecuting Party, but only to the extent that the
      alleged Third Party infringer is Commercializing a product that competes
      with a Schering Viral Product that is licensed to PTC pursuant to Section
      11.7(b), and (9) to the extent that PTC exercises its "march-in" rights
      pursuant to Section 11.7(c)(iv)(8), the provisions of Section 9.6(g)(ii)
      shall be applicable, but only to the extent such recovery relates to an
      infringer that is Commercializing a product that competes with a Schering
      Viral Product that is licensed to PTC pursuant to Section 11.7(b), (10)
      PTC shall have "march-in" rights with respect to the enforcement of the
      Schering Patents that are licensed to PTC pursuant to Section 11.7(b)(iii)
      against Third Party infringers that are comparable in scope to the rights
      it has with respect to the Collaboration Patents pursuant to Section
      9.6(d), but only to the extent that the alleged Third Party infringer is
      Commercializing a product that competes with a Schering Viral Product that
      is licensed to PTC pursuant to Section 11.7(b); provided, however, that
      such right shall not be applicable with respect to any such Schering
      Patent which also claims the composition of matter or method of use of any
      compound that is the subject of an active Research, Development or
      Commercialization program by Schering or its Affiliates or licensees.

                  (v) Schering shall grant PTC a worldwide, royalty-free
      non-exclusive license, including the right to grant sublicenses, to
      Patents and Know-How Controlled by Schering or its Affiliates which are
      necessary or useful for the Manufacture of a Terminated Compound, solely
      for the purpose of Manufacturing (or having Manufactured) such Terminated
      Compound.

                  (vi) If, as of the Termination Date, Schering its Affiliates
      or Sublicensee is engaged in the Manufacture of any Schering Viral Product
      that is then in clinical Development or is being Commercialized, then
      Schering, its Affiliates or Sublicensees must, as requested by PTC, use
      commercially reasonable efforts to

                                       66

                                                               EXECUTION VERSION

      Manufacture and supply PTC's requirements for the Schering Viral Product
      until the earlier of (i) such time as PTC can secure an alternative
      Manufacturing source reasonably satisfactory to PTC, or (ii) [**] from the
      Termination Date. In addition, at PTC's option, as of the Termination Date
      (A) Schering shall permit PTC to purchase all or any part of Schering's
      worldwide unsold inventory of raw materials and work-in-process for
      Schering Viral Products, and (B) at PTC's request and expense, but only to
      the extent within Schering's control, Schering shall transfer to PTC, or
      PTC's designee, or arrange to have transferred, any methods, standards, or
      other Manufacturing related data and information for Schering Viral
      Products, and (C) Schering shall use its commercially reasonable efforts
      to assign to PTC any Third Party Manufacturing contract relating to the
      Schering Viral Products to which Schering or any of its Affiliates is a
      party; provided, however, it is understood that Schering shall not be
      obligated to pay any compensation to the Third Party, or incur any
      unreimbursed expenses, in order to obtain such assignment; provided,
      further that, if Schering is unable to assign to PTC any such Third Party
      Manufacturing contract, the obligation to use commercially reasonable
      efforts to assign such contract shall be deemed to be satisfied if
      Schering notifies PTC of such non-assignability and continues to supply
      PTC's requirements for Schering Viral Product for [**] from the
      Termination Date. All Schering Viral Product supplied to PTC by Schering
      shall be supplied at a price equal to Schering's fully absorbed cost of
      Manufacture, plus a markup of [**] percent ([**]%).

            (d) With respect to any Third Party License Agreements related to
Schering Viral Products to which Schering is a party, Schering shall provide PTC
with copies of such agreements (subject to any applicable confidentiality
restrictions) and PTC shall notify Schering in writing within [**] of receipt of
such copies whether it wishes Schering to attempt to obtain an assignment or
sublicense to PTC of Schering's rights under the applicable Third Party License
Agreements. In the event PTC wishes Schering to attempt to obtain such an
assignment or sublicense, then Schering shall use reasonable and diligent
efforts to effect the same (it being understood that Schering shall have no
obligation to pay any compensation to the Third Party, or to incur any
unreimbursed expense, in order to obtain such assignment or sublicense and shall
have no liability to PTC in the event such assignment or sublicense is not
obtained despite such efforts) and PTC shall thereafter be responsible for
paying any royalties, fees or other consideration due to the Third Party
following the Termination Date under the applicable Third Party License
Agreements. In the event PTC does not so notify Schering within the applicable
[**] period, then Schering shall have no further obligations to PTC with respect
to such Third Party License Agreements.

            (e) In partial consideration for the licenses granted to PTC
pursuant to Section 11.7(b) and 11.7(c), PTC shall pay to Schering on a
country-by-country and Schering Viral Product-by-Schering Viral Product basis,
royalties on the Net Sales of any Schering Viral Product by PTC, its Affiliates
or any Sublicensee. The applicable royalty rate shall be based on the stage of
Development at the time of the Termination Date and shall be determined as
follows:

                  (i) [**]:


                                       67

                                                               EXECUTION VERSION



                                                                           Rate
                                                                           ----
                          Net Sales
                          ---------
                                                                      
On the first [**] Dollars ($ [**]) in worldwide Net Sales of             [**]
such Schering Viral Product in a calendar year                           percent
                                                                         ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than [**] Dollars ($            percent
[**]) in a calendar year                                                 ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than [**] Dollars ($            percent
[**]) in a calendar year                                                 ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than [**] Dollars ($            percent
[**]) in a calendar year                                                 ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than one [**]                   [**]
Dollars ($ [**]) in a calendar year                                      percent
                                                                         ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) in a calendar year                       percent
                                                                         ([**]%)


                  (ii)  [**]:



                                                                           Rate
                                                                           ----
                          Net Sales
                          ---------
                                                                      
On the first [**] Dollars ($ [**]) in worldwide Net Sales of             [**]
such Schering Viral Product in a calendar year                           percent
                                                                         ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than [**] Dollars ($            percent
[**]) in a calendar year                                                 ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than [**] Dollars ($            percent
[**]) in a calendar year                                                 ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than [**] Dollars ($            percent
[**]) in a calendar year                                                 ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) but less than [**] Dollars ($            percent
[**]) in a calendar year                                                 ([**]%)

On worldwide Net Sales of such Schering Viral Product in                 [**]
excess of [**] Dollars ($ [**]) in a calendar year                       percent
                                                                         ([**]%)


provided, however, (x) in the event the Agreement is terminated by PTC pursuant
to Section 11.3, the royalties payable by PTC pursuant to this Section 11.7(e)
shall be at a rate which is [**] percent ([**]%) of the rate that would
otherwise be payable by PTC pursuant to the royalty schedule specified above,
and (y) in the event PTC terminates this Agreement due to a breach by

                                       68

                                                               EXECUTION VERSION

Schering of Section 2.10 then no royalty shall be payable by PTC pursuant to
this Section 11.7(e).

Any royalties payable pursuant to this Section 11.7(e) shall be payable for a
period from the date of First Commercial Sale of such Schering Viral Product by
PTC or its Affiliates or licenses in the applicable country until the later of
(i) expiration of the last to expire PTC Patent (including any Joint Patent)
which claims an invention Invented prior to the Termination Date or Schering
Patent in such country which contains a Valid Claim which claims such Schering
Viral Product or its use in the Field, or (ii) the expiration of any Marketing
Exclusivity for such Schering Viral Product in such country (or, if earlier, the
date of the First Commercial Sale of a Third Party product in such country that
contains, as one of its active ingredients, the same Active Ingredient that is
contained in the Schering Viral Product). The provisions of Sections 6.5(e),
6.6, 6.7(b), 6.8, and 9.7(a) shall apply, mutatis mutandis, to the payment of
royalties under this Subsection 11.7(e).

            (f) (i) In the event of a termination by PTC pursuant to Section
      11.3, (A) the license granted to PTC pursuant to Section 5.1(c) shall
      terminate; (B) the licenses granted or to be granted to PTC pursuant to
      Section 5.4(b) shall survive, (C) the license granted to PTC pursuant to
      Section 5.3(b) shall convert from a co-exclusive license to an exclusive
      (even as to Schering) license, and (D) the provisions of Sections 6.7(d),
      6.7(e), 6.7(f), and 6.9 through and including 6.17 shall continue to apply
      with respect to PTC's Development and Commercialization of PTC Products
      and Schering's Development and Commercialization of Schering Non-Viral
      Products.

                  (ii) In the event of a termination by Schering pursuant to
      Section 11.2 or 11.5(b), or by PTC pursuant to Section 11.4, (A) the
      license granted to PTC pursuant to Section 5.1(c) shall terminate, (B) the
      licenses granted or to be granted to PTC pursuant to Sections 5.3(b) and
      5.4(b) shall survive; (C) the licenses granted or to be granted to
      Schering pursuant to Sections 5.3(a) and 5.4(a) shall survive, and (D) the
      provisions of Sections 6.7(d), 6.7(e), 6.7(f), and 6.9 through and
      including 6.17 shall continue to apply with respect to PTC's Development
      and Commercialization of PTC Products and Schering's Development and
      Commercialization of Schering Non-Viral Products.

      11.8  Consequences of Certain Terminations by Schering.

            (a) In the event Schering terminates this Agreement pursuant to
Section 11.3, then (i) PTC's rights under the licenses granted to it pursuant to
Section 5.1(c), 5.3(b) and 5.4(b) shall terminate (except for existing licenses
under Section 5.4(b) for PTC Designated NV Compounds unrelated to any PTC
breach) and the licenses granted to Schering pursuant to Section 5.3(a) shall
convert from co-exclusive licenses to exclusive (even as to PTC) licenses, (ii)
Schering's rights under Article 5 (including, without limitation, its rights
under the Schering Licenses) shall survive termination, (iii) the provisions of
Article 6 and Sections 4.1(d) and 4.7 shall continue to apply with respect to
Schering's Development and Commercialization of Licensed Products, and the
provisions of Sections 6.7(e), 6.7(f), and 6.10 through and including 6.17 shall
apply to PTC's Development and Commercialization of PTC Products, subject to
Section 11.9(a); provided, however in the case where Schering terminates
pursuant to Section

                                       69

                                                               EXECUTION VERSION

11.3 and it has not accepted a Development Candidate by the Termination Date or
within six (6) months thereafter, (A) no Milestones shall be payable by Schering
pursuant to Sections 6.2(a) and 6.2(b), (B) the Milestones payable pursuant to
Sections 6.2(c), 6.2(d), 6.2(e) and 6.2(f) shall be reduced by [**] percent
([**]%), and (C) the royalty rates specified in Sections 6.5(a) and 6.5(b) shall
automatically be reduced by [**] percent ([**]%); provided further, in the event
Schering terminates this Agreement due to a breach by PTC of Section 2.10 then
no further payments shall be payable by Schering pursuant to Section 6.5.

            (b) In the event Schering terminates this Agreement pursuant to
Section 11.4, then (i) PTC's rights under the licenses granted to it pursuant to
Section 5.1(c) shall terminate, (ii) Schering's rights under Article 5
(including, without limitation, its rights under the Schering Licenses) shall
survive termination, (iii) the provisions of Article 6 and Sections 4.1(d) and
4.7 shall continue to apply with respect to Schering's Development and
Commercialization of Licensed Products, subject to Section 11.9(a), (iv) the
licenses granted to PTC pursuant to Sections 5.3(b) and 5.4(b) shall survive and
the provisions of Sections 6.7(e), 6.7(f), and 6.10 through and including 6.17
shall continue to apply with respect to PTC's Development and Commercialization
of PTC Products.

      11.9  Effect of Termination and Expiration.

            (a) Accrued Rights and Obligations. Termination of this Agreement
for any reason shall not release either Party hereto from any liability which,
at the time of such termination, has already accrued or which is attributable to
a period prior to such termination nor preclude either Party from pursuing any
rights and remedies it may have hereunder or at Law or in equity with respect to
any breach of this Agreement. It is understood and agreed that monetary damages
may not be a sufficient remedy for any breach of this Agreement and that the
non-breaching Party may be entitled to seek injunctive relief as a remedy for
any such breach.

            (b) Stock on Hand. In the event this Agreement is terminated for any
reason, Schering or PTC, as the case may be, shall have the right to sell or
otherwise dispose of the stock of any Licensed Product then on hand or in
process until the first anniversary of the effective date of such termination.
Sales made pursuant to this Section 11.9(b) shall be treated as Net Sales and
any royalty otherwise payable on such Net Sales absent such termination thereon
shall be paid to the applicable Party.

      11.10 Survival.

            (i) The rights and obligations set forth in this Agreement shall
extend beyond the term or termination of this Agreement only to the extent
expressly provided for herein, or to the extent that the survival of such rights
or obligations are necessary to permit their complete fulfillment or discharge.
Without limiting the generality of the foregoing, it is agreed that the
provisions of Sections 4.4, 5.7, 5.8, 6.12 through 6.17, as well as Articles 1,
7, 10, 11, 12 and 13, shall survive expiration or termination of this Agreement
for any reason.

            (ii)  In addition, the following Sections will explicitly survive
as follows:

                                       70

                                                               EXECUTION VERSION

                  (A) Article 9 shall survive expiration or termination of this
      Agreement for any reason, subject to the restrictions and modifications
      set forth in Section 11.7;

                  (B) Article 4A shall survive expiration or termination of this
      Agreement for any reason, except that a Party's right to continue to
      designate NV Compounds under Section 4A.1 will terminate in the event that
      such Party's co-exclusive Research license under Section 5.3 terminates;

                  (C) Section 2.14 shall survive expiration or termination of
      this Agreement for any reason, except that (1) Section 2.14 shall
      terminate in the event that the Parties agree to terminate the Agreement
      pursuant to Section 11.5(a) or Schering's co-exclusive Research license
      under Section 5.3 terminates, and (2) Section 2.14(ii) shall terminate in
      the event that Schering's exclusive Development and Commercialization
      license under Section 5.2 terminates.

            (iii) Further, each of Sections 11.2, 11.3, 11.4, 11.5, 11.7 and
11.8 set forth specific additional provisions in this Agreement that will
survive in the event of a termination under Section 11.2, 11.3, 11.4 or 11.5.

                                   ARTICLE 12

                               DISPUTE RESOLUTION

In the event of any controversy or claim arising out of or relating to this
Agreement, or the rights or obligations of the Parties hereunder (other than
those to be resolved pursuant to the provisions of Sections 1.40, 3.5 and 9.1),
the Parties shall first try to settle their differences amicably between
themselves. Either Party may initiate such informal dispute resolution by
sending written notice of the dispute to the other Party, and within thirty (30)
days after such notice appropriate representatives of the Parties shall meet for
attempted resolution by good faith negotiations. If such representatives are
unable to resolve promptly such disputed matter within the said thirty (30)
days, either Party may refer the matter by written notice to the Senior
Vice-President, Research and Development of Schering-Plough Corporation or his
or her designee and the Senior Vice President, Drug Discovery Technologies of
PTC or his or her designee for discussion and resolution. If such individuals or
their designees are unable to resolve such dispute within thirty (30) days of
such written notice, either Party may refer the matter by written notice to the
President, Global Prescription Business of Schering-Plough Corporation and the
CEO of PTC. If such individuals are unable to resolve such dispute within thirty
(30) days of such written notice, either Party may initiate litigation in
accordance with the provisions of Section 13.1.

                                   ARTICLE 13

                                  MISCELLANEOUS


                                       71


                                                               EXECUTION VERSION

        13.1 Governing Law. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with the laws of State of New York, without regard for its conflicts
of laws rules; provided that the Parties' rights and obligations under Section
9.1 shall be governed by the intellectual property laws of the United States and
provided further with respect to matters involving enforcement of intellectual
property rights, the Laws of the applicable country in question shall be
applicable. The provisions of the United Nations Convention on Contracts for the
International Sale of Goods shall not apply to this Agreement or any subject
matter hereof or thereof.

         13.2 Independent Contractors. The relationship of the Parties hereto is
that of independent contractors. It is expressly agreed that for tax, legal or
other purposes (i) this Agreement or any portion of this Agreement shall not be
considered to be a partnership agreement, and (ii) the relationship between the
two Parties shall not constitute a partnership, joint venture or agency. Neither
PTC nor Schering shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior consent of the other Party to do so.

         13.3 Assignment. Either PTC or Schering may assign its rights and
obligations under this Agreement to any Affiliate, provided such interest shall
be retransferred to the assigning Party if such entity ceases to be an Affiliate
of such Party, and provided further that the assigning Party shall guarantee the
performance of such Affiliate. Neither Party may assign this Agreement to any
Third Party hereto without the written consent of the other Party, which consent
shall not be unreasonably withheld or delayed; except either Party may assign
this Agreement, without such consent, to an entity that acquires all or
substantially all of its assets relating to its antiviral business, whether by
merger, reorganization, acquisition, sale, or otherwise. This Agreement shall be
binding upon and inure to the benefit of the Parties and their successors and
assigns.

         13.4 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission or by registered or certified mail,
return receipt requested, postage prepaid, in each case to the respective
address specified below, or such other address as may be specified in writing to
the other Party hereto:

If to PTC:                                 If to Schering:

PTC Therapeutics, Inc.                     Essex Chemie AG
100 Corporate Court                        Topferstrasse 5
South Plainfield, New Jersey 07080         6000 Lucern 6
USA                                        Switzerland
Attention: Legal Department                Attention: General Manager
Facsimile No.: 1-908-222-1128              Facsimile No.: 011 41 418 16 26

and an email copy to:

legal@ptcbio.com

                                       72



                                                               EXECUTION VERSION

With a copy to:                            With a copy to:

Wilmer Cutler Pickering Hale & Dorr LLP    Schering Corporation
60 State Street                            2000 Galloping Hill Road
Boston, Massachusetts 02109                Kenilworth, New Jersey 07033-0530
USA                                        USA
Attention: Steven D. Singer, Esq.          Attention:  Law Department,
Facsimile No. 1-617-526-6000               Senior Legal Director, Licensing
                                           Facsimile No.:  1-908-298-5310

         13.5 Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses (except for payment obligations)
on account of failure of performance to the extent such failure or delay is
caused by or results from causes beyond the reasonable control of the affected
Party and is not caused by the negligence, or willful misconduct of the
non-performing Party; provided, however, the non-performing Party has exerted
all reasonable efforts to avoid or remedy, and minimize the duration of, such
event of force majeure; provided, further that in no event shall a Party be
required to settle any labor dispute or disturbance. Each Party shall provide
the other Parties with prompt written notice of any delay or failure to perform
that occurs by reason of force majeure.

         13.6 Advice of Counsel. PTC and Schering have each consulted counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one Party or another
and will be construed accordingly.

         13.7 Further Assurances. At any time or from time to time on and after
the date of this Agreement, either Party shall at the request of the other Party
hereto (i) deliver to the requesting Party any records, data or other documents,
(ii) execute, and deliver or cause to be delivered, all such consents, documents
or further instruments of transfer or license, and (iii) take or cause to be
taken all such actions, as the requesting Party may reasonably deem necessary in
order for the requesting Party to obtain the full benefits of this Agreement and
the transactions contemplated hereby; in each case, consistent with the
provisions of this Agreement.

         13.8 Severability. When possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable Law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable Law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement. The Parties shall make a good faith effort to replace the invalid or
unenforceable provision with a valid one that in its economic effect is most
consistent with the invalid or unenforceable provision.

         13.9 Waiver. It is agreed that no waiver by either Party hereto of any
breach of default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.

         13.10 Complete Agreement. The Parties agree that this Agreement, with
its Schedules, constitutes the entire agreement, both written and oral, between
the Parties with respect to the

                                       73



                                                               EXECUTION VERSION

subject matter hereof, and that all prior agreements respecting the subject
matter hereof, including the confidentiality agreements referenced in Section
7.6, either written or oral, expressed or implied, are merged and canceled, and
are null and void and of no effect. No amendment or change hereof or addition
hereto shall be effective or binding on either of the Parties hereto unless
reduced to writing and duly executed on behalf of both Parties.

         13.11 Use of Name. Neither Party shall use the name or trademarks of
the other Party without the prior written consent of such other Party except in
connection with the disclosure of the existence of this Agreement.

         13.12 Headings. The captions to the several Sections and Articles
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.

         13.13 Third Party Beneficiaries. No person or entity other than PTC,
Schering or their respective Affiliates and permitted assignees hereunder shall
be deemed an intended beneficiary hereunder or have any right to enforce any
obligation of this Agreement.

         13.14 Consequential Damages. UNLESS RESULTING FROM A PARTY'S WILLFUL
MISCONDUCT, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS
RIGHTS OR PERFORMANCE OF ITS OBLIGATIONS HEREUNDER, INCLUDING WITHOUT LIMITATION
LOST PROFITS, ANTICIPATED PROFITS, LOST GOODWILL, LOST REVENUE, LOST PRODUCTION,
LOST CONTRACTS AND LOST OPPORTUNITY, ARISING FROM OR RELATING TO ANY BREACH OF
THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS
SECTION 13.14, HOWEVER, IS INTENDED TO LIMIT OR RESTRICT ANY PAYMENT OBLIGATION
OR THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY. NOTWITHSTANDING
THE FOREGOING, NOTHING IN THIS AGREEMENT LIMITS OR EXCLUDES ANY PARTY'S
LIABILITY FOR FRAUD OR FOR DEATH OR PERSONAL INJURY CAUSED BY THAT PARTY'S OWN
NEGLIGENCE OR WILLFUL MISCONDUCT.

         13.15 Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed an original and which together shall constitute
one instrument.

                [Remainder of this page intentionally left blank]

                                       74



                                                               EXECUTION VERSION

         IN WITNESS WHEREOF PTC and Schering have executed this Agreement by
their respective duly authorized representatives.


PTC THERAPEUTICS, INC.                    ESSEX CHEMIE AG


By:      /s/ Stuart Peltz                 By:      /s/ P. Th. Klaassen
    --------------------------------          ----------------------------------

Print Name:       Stuart Peltz            Print Name:       P. Th. Klaassen
            ------------------------                  --------------------------

Title:     President & CEO                Title:            Director
         ---------------------------             -------------------------------

                                       75



                                                               EXECUTION VERSION

                                  SCHEDULE 1.14

                       CRITERIA FOR DEVELOPMENT CANDIDATES



Assay                                                     Result
                                                       
[**]                                                      [**]
[**]                                                      [**]
                                                          [**]
                                                          [**]
[**]                                                      [**]

[**]
[**]
[**]                                                      [**]
[**]                                                      [**]
[**]                                                      [**]
[**]                                                      [**]
[**]                                                      [**]
[**]

[**]                                                      [**]
[**]                                                      [**]
                                                          [**]

[**]                                                      [**]
[**]
[**]

[**]                                                      [**]
[**]                                                      [**]
[**]                                                      [**]
[**]
[**]
[**]


[**]                                                      [**]
[**]                                                      [**]
[**]                                                      [**]
[**]                                                      [**]
                                                          [**]

[**]                                                      [**]
[**]                                                      [**]
[**]                                                      [**]
[**]




                                                               EXECUTION VERSION



Assay                                                     Result
                                                       
[**]                                                      [**]
[**]                                                      [**]

[**]
[**]                                                      [**]
[**]                                                      [**]

[**]                                                      [**]
[**]

[**]                                                      [**]
[**]
[**]





                                                               EXECUTION VERSION
                                 SCHEDULE 1.47A

                 PTC BACKGROUND PATENTS AS OF THE EFFECTIVE DATE


[**]

UNITED STATES
         US Application No. [**]

INTERNATIONAL

         PCT Publication No. [**]   Canadian Application No. [**]
                  European Application No. [**]

                                                                            [**]
UNITED STATES
US Publication No. [**]INTERNATIONAL
         PCT Application No. [**]

*See also Schedule 1.82 for Third Party License Agreements.



                                                               EXECUTION VERSION

                                  SCHEDULE 1.48

                     PTC COMPOUNDS AS OF THE EFFECTIVE DATE


                                   [Attached]




                                                               EXECUTION VERSION

                                  SCHEDULE 1.53

                      PTC PATENTS AS OF THE EFFECTIVE DATE

     [**]
UNITED STATES
US Application No. [**]INTERNATIONAL
         PCT Application No. [**]

     [**]
UNITED STATES
         US Application No. [**]
         US Provisional Application No. [**]
         US CIP Application No. [**]

INTERNATIONAL
PCT Application No. [**]



                                                               EXECUTION VERSION

                                  SCHEDULE 1.60

                                  RESEARCH PLAN
OVERVIEW

[**]
PTC THERAPEUTICS ACTIVITIES:



AREA        FTE    ACTIVITIES
             
[**]        [**]    [**]
[**]        [**]             [**]
[**]        [**]    [**]
Total       [**]


SCHERING-PLOUGH ACTIVITIES

[**]
[**]


APPENDIX
[**]

[Chart describing screening tier studies]



                                                               EXECUTION VERSION

                                  SCHEDULE 1.65

              SCHERING BACKGROUND PATENTS AS OF THE EFFECTIVE DATE


                                      [**]



                                                               EXECUTION VERSION

                                  SCHEDULE 1.67

                   SCHERING COMPOUNDS AS OF THE EFFECTIVE DATE


                                      [**]



                                                               EXECUTION VERSION

                                  SCHEDULE 1.82

                     EXISTING THIRD PARTY LICENSE AGREEMENTS


Schering's Existing Third Party License Agreements

[**]

PTC's Existing Third Party License Agreements

[**]




                                                               EXECUTION VERSION

                                  SCHEDULE 2.11

                             APPROVED SUBCONTRACTORS


THE FOLLOWING WILL ONLY BE DEEMED APPROVED SUBCONTRACTORS FOR A PERIOD OF THREE
(3) MONTHS FOLLOWING THE EFFECTIVE DATE, TO ALLOW FOR TRANSITION OF THEIR
ASSIGNED WORK TO PTC FTES:

[**]




                                                               EXECUTION VERSION

                                  SCHEDULE 7.5

                CONTENTS OF EXECUTION ANNOUNCEMENT PRESS RELEASE




                                                               EXECUTION VERSION

                                 SCHEDULE 8.4(C)

                   PTC AGREEMENTS RELATED TO THE PTC COMPOUNDS

[**]

                                                                   Exhibit 10.12

                                Table of Contents

                                TABLE OF CONTENTS
              OF LEASE BETWEEN 46.24 ASSOCIATES L.P., AS LANDLORD,
         AND PTC THERAPEUTICS, INC., AS TENANT, FOR PREMISES LOCATED IN
                 100 CORPORATE COURT, MIDDLESEX BUSINESS CENTER,
                          SOUTH PLAINFIELD, NEW JERSEY



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1.    DEMISED PREMISES AND TERM..................................     1
ARTICLE 2.    USE AND OPERATION..........................................     3
ARTICLE 3.    RENT.......................................................     3
ARTICLE 4.    SUBORDINATION..............................................     4
ARTICLE 5.    AS-IS; LANDLORD'S WORK; TENANT'S WORK......................     6
ARTICLE 6.    ALTERATIONS AND REPAIRS....................................    11
ARTICLE 7.    INDEMNITY AND INSURANCE....................................    14
ARTICLE 8.    FIRE DAMAGE................................................    16
ARTICLE 9.    WAIVER OF SUBROGATION......................................    17
ARTICLE 10.   CONDEMNATION...............................................    17
ARTICLE 11.   ASSIGNMENT AND SUBLETTING..................................    18
ARTICLE 12.   COMMON AREA MAINTENANCE....................................    20
ARTICLE 13.   UTILITIES..................................................    22
ARTICLE 14.   TAXES......................................................    23
ARTICLE 15.   REMEDIES OF LANDLORD.......................................    24
ARTICLE 16.   WAIVER OF TRIAL BY JURY....................................    27
ARTICLE 17.   ACCESS TO PREMISES.........................................    27
ARTICLE 18.   NO WAIVER..................................................    28
ARTICLE 19.   REQUIREMENTS OF LAW; INSURANCE REQUIREMENTS................    28
ARTICLE 20.   SIGNS......................................................    29
ARTICLE 21.   TENANT'S ADDITIONAL COVENANTS..............................    29
ARTICLE 22.   EASEMENTS FOR UTILITIES....................................    31
ARTICLE 23.   CONSENTS AND APPROVALS.....................................    31
ARTICLE 24.   CONTROL OF TENANT..........................................    31
ARTICLE 25.   END OF TERM HOLDOVER.......................................    31
ARTICLE 26.   AUTHORITY TO EXECUTE.......................................    33



                                        i


                                Table of Contents
                                   (continued)



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 27.   NOTICES....................................................    33
ARTICLE 28.   BROKER.....................................................    33
ARTICLE 29.   MEMORANDUM OF LEASE........................................    33
ARTICLE 30.   AIR AND WATER POLLUTION....................................    33
ARTICLE 31.   SUBDIVISION................................................    36
ARTICLE 32.   THERE IS NO ARTICLE 32 IN THIS LEASE.......................    36
ARTICLE 33.   FINANCING REQUIREMENTS.....................................    36
ARTICLE 34.   RELATIONSHIP OF PARTIES....................................    37
ARTICLE 35.   CAPTIONS...................................................    37
ARTICLE 36.   DEFINITIONS................................................    37
ARTICLE 37.   ENTIRE AGREEMENT...........................................    37
ARTICLE 38.   SUCCESSORS IN INTEREST.....................................    37
ARTICLE 39.   SECURITY...................................................    38
ARTICLE 40.   EXTENSION OPTION(S)........................................    40



                                       ii


     THIS LEASE, made as of the 11th day of July 2000, by and between 46.24
ASSOCIATES L.P., a Delaware limited partnership, having a mailing address c/o
National Realty & Development Corp., 3 Manhattanville Road, Purchase, New York
10577 (hereinafter referred to as "Landlord") and PTC THERAPEUTICS, INC., a
Massachusetts corporation, having its principal office at 2 Chestnut Street,
Grafton, Massachusetts 01519 (hereinafter referred to as "Tenant").

                                   WITNESSETH:

     WHEREAS, the Landlord has constructed a building (hereinafter referred to
as "Building") for the purposes of office use, known as Building No. 100 located
within the area designated as Lot No. 46.24 (hereinafter referred to as "Lot No.
46.24") on the attached plot plan (hereinafter referred to as "Plot Plan") which
is annexed hereto as Exhibit "A" and made a part hereof; and

     WHEREAS, Landlord and the owner of the area designated as Lot Not 46.25
(hereinafter referred to as "Lot No. 46.25") on the Plot Plan each has the right
to operate and use the Common Areas (as hereinafter defined) within Lots 46.24
and 46.25; and

     WHEREAS, Tenant is desirous of leasing from Landlord and Landlord is
desirous of leasing to Tenant certain premises in the Building which is situated
within MIDDLESEX BUSINESS CENTER (hereafter referred to as "Center") hereinafter
described, upon and subject to the provisions, agreements, covenants and
conditions set forth herein;

     NOW, THEREFORE, it is mutually agreed as follows:

                      ARTICLE 1. DEMISED PREMISES AND TERM

     Section 1.01.

          (a) In consideration of the rents and additional rents hereinafter
reserved and all of the provisions, agreements, covenants and conditions
hereinafter contained, Landlord hereby leases and demises to Tenant, and Tenant
hereby hires, leases and takes from Landlord approximately 21,700 square feet of
floor space ("Floor Space") in the Building, more particularly indicated and
described by cross-hatching on the Plot Plan (such Floor Space being hereinafter
referred to as the "Demised Premises") located on Lot No. 46.24 in the Center
located in the BOROUGH OF SOUTH PLAINFIELD, COUNTY OF MIDDLESEX and STATE OF NEW
JERSEY, together with all improvements to be constructed thereon by the Landlord
for the use of the Tenant, and all easements, tenements and appurtenances
thereto.

          (b) The parties acknowledge that the Landlord intends to erect or has
erected other buildings on Lot No. 46.24 (which may be different in design and
construction from the Building) which buildings may be constructed at the sole
option of Landlord. Landlord shall have sole control and discretion in
connection with the scope, design and aesthetics of any such additional
construction. Notwithstanding the foregoing, any such other buildings and
improvements associated therewith shall not unreasonably interfere with access
to the Demised Premises or the loading area thereof, nor reduce the number of
parking spaces below the number required by municipal code.


                                      -1-



          (c) The Demised Premises are demised and let subject to (i) the
existing state of the title thereof; (ii) any state of facts which an accurate
survey or physical inspection thereof might disclose; (iii) all zoning
regulations, restrictions, rules and ordinances now in effect or hereafter
adopted by any governmental authority having jurisdiction; and (iv) any utility,
sewer or drainage easements or agreements and the installations made pursuant
thereto now existing or hereafter granted or installed; all without
representation or warranty by Landlord, except as expressly set forth herein.
Notwithstanding the foregoing, Landlord hereby represents, that, to the best of
Landlord's knowledge: (a) the Building is presently zoned to permit the use of
the Demised Premises for typical office/laboratory purposes; and (b) any
existing utility, sewer or drainage easements or agreements and the
installations made pursuant thereto will not unreasonably interfere with
Tenant's use and occupancy of the Demised Premises. Landlord further represents
to Tenant that Landlord is presently the fee owner of the Building and is
authorized and empowered to enter into this Lease as Landlord and to perform the
obligations of Landlord hereunder.

     Section 1.02. As long as Tenant occupies the Demised Premises, Tenant,
together with its employees, customers, invitees and business guests, shall have
the right to use, in common with Landlord, its successors, assigns, tenants,
subtenants, designees, concessionaires, licensees and any of their customers,
invitees, and business guests, all of the Common Areas (as such term is defined
in Section 12.01 hereof) at any time and from time to time existing within Lot
No. 46.24, except for areas reserved for the exclusive use of other tenants,
occupants, or designees and except for periods of time during which the Common
Areas are being repaired, altered or reconstructed. Neither Landlord nor Tenant
nor anyone holding under or through either of them shall make any charge for the
use of the Common Areas to the other or to the employees, customers, invitees or
business guests of Landlord or Tenant or of anyone else hereinbefore granted the
right to use the Common Areas, except as provided in Article 12 of this Lease.

     Section 1.03. The term ("Term") of this Lease shall commence on that date
("the Commencement Date") which is the first to occur of: (a) the date upon
which the Demised Premises are first occupied by Tenant for the conduct of
business operations at the Demised Premises, or (b) the date which is thirty
(30) days following the date upon which the Landlord's Work (as hereinafter
defined) shall be duly certified by Landlord or Landlord's agent as being
substantially completed, except for those items the completion of which will not
unreasonably interfere with Tenant's use and occupancy of the Demised Premises
as provided herein, and shall expire on the date which is the FIVE (5) years
following the last day of the calendar month in which the Rent Commencement Date
(as hereinafter defined) shall occur ("Expiration Date"). Landlord represents to
Tenant that Landlord's Work shall be performed in accordance with all applicable
codes so as to enable Tenant to apply for and obtain a certificate of occupancy
for the Demised Premises upon completion of Tenant's improvements and Tenant's
fixturing and equipping of the Demised Premises. Tenant may, at any time after
execution of this Lease and prior to the Commencement Date, without incurring
any liability for payment of annual minimum rental or additional rent, measure
the Demised Premises, design and layout of the tenant improvements and Tenant's
Property (hereinafter defined), and place and install its personal property,
furniture, furnishings, signs, telecommunication equipment, equipment and trade
fixtures ("Tenant's Property"), in the Demised Premises at Tenant's risk and
expense. In exercising the foregoing rights, Tenant shall not cause any material
interference with or delay to


                                      -2-



Landlord, and Tenant's indemnity provided for in this Lease shall apply to
Tenant's entry under this Section.

     Section 1.04. The parties shall, within ten (10) days following request of
the other, execute a written document, in recordable form, expressing the
Commencement Date and Expiration Date of the Term hereof, as such have been
determined in accordance with the provisions of this Lease.

     Section 1.05. The term "Lease Year" is defined to mean twelve (12)
consecutive calendar months; the first Lease Year to commence on the first day
of the succeeding calendar month following the Commencement Date and each
succeeding Lease Year to commence on the anniversary date of the commencement of
the first Lease Year. The portion of the Term prior to the first Lease Year
shall be deemed a "Partial Lease Year" and any obligations of Tenant for such
Partial Lease Year shall be prorated on a per diem basis.

                          ARTICLE 2. USE AND OPERATION

     Section 2.01. Subject to the other provisions of this Lease, Tenant shall
occupy and use the Demised Premises solely for office and laboratory purposes
and incidental uses normally associated therewith, and for no other use. Tenant
hereby covenants and agrees that it, its successors and assigns, or anyone
holding by, through or under them, shall not use, nor permit the use of the
Demised Premises for any other use or purpose. Immediately following
certification under Section 1.03 above, Tenant shall fixture, furnish and equip
the Demised Premises for Tenant's intended business purpose and upon the
Commencement Date, Tenant shall occupy and open for business in the Demised
Premises.

                                 ARTICLE 3. RENT

     Section 3.01. The annual minimum rental during the Term shall be as
follows:

     (A) During the FIRST (1st) and SECOND (2nd) years following the Rent
Commencement Date: ONE HUNDRED EIGHT FOUR THOUSAND FOUR HUNDRED FIFTY AND 00/100
($184,450.00) DOLLARS per annum - FIFTEEN THOUSAND THREE HUNDRED SEVENTY AND
00/100 ($15,370.00) DOLLARS per month;

     (B) During the THIRD (3rd) year following the Rent Commencement Date: ONE
HUNDRED NINETY FIVE THOUSAND THREE HUNDRED AND 00/100 ($195,300.00) DOLLARS per
annum - SIXTEEN THOUSAND TWO HUNDRED SEVENTY FIVE AND 00/100 ($16,275.00)
DOLLARS per month; and

     (C) During the balance of the Term of this Lease: TWO HUNDRED SIX THOUSAND
ONE HUNDRED FIFTY AND 00/100 ($206,150.00) per annum - SEVENTEEN THOUSAND ONE
HUNDRED SEVENTY NINE AND 17/100 ($17,179.17) DOLLARS per month.

     The "Rent Commencement Date" shall be the sixty-first day occurring
following the expiration of the "Rent Concession Period", in accordance with the
provisions hereinafter set


                                      -3-



forth in Section 5.05 of this Lease, or as otherwise determined in accordance
with said Section 5.05.

     All annual minimum rental payable under this Lease during the Term hereof
shall be paid to the Landlord in advance, on the first day of each calendar
month during the Term hereof at the office of Landlord or such other place or to
such other person or party as Landlord may designate, without prior demand
therefor and without any setoff or deduction whatsoever, except as herein
provided. Annual minimum rent and additional rent shall be prorated for a
fraction of a month, if any, based on the number of days within such fractional
month. Unless and until otherwise designated by Landlord in writing all annual
minimum rent and additional rent payable under this Lease shall be paid to
National Realty & Development Corp., at 3 Manhattanville Road, Purchase, New
York 10577.

     Section 3.02. All taxes, charges, costs and expenses which Tenant assumes
or agrees to pay under any provision of this Lease, together with any and all
other sums and legal fees which may become due, by reason of any default of
Tenant or failure on Tenant's part to comply with the provisions, covenants and
conditions of this Lease on Tenant's part to be performed, and each or any of
them, shall be collectible and recoverable as additional rent, and, in the event
of nonpayment thereof, Landlord shall have all the rights and remedies herein
provided as in the case of nonpayment of annual minimum rent.

                            ARTICLE 4. SUBORDINATION

     Section 4.01. This Lease and all rights of Tenant hereunder are, and shall
be, subject and subordinate to any mortgages, deeds of trust (including blanket
mortgages or deeds of trust covering the Demised Premises and/or the Center
and/or other properties) or any other security interest which has been or which
hereinafter may affect the Demised Premises, and to any ground or underlying
leases of all or part of the Center, and to any renewals, modifications,
consolidations, replacements and extensions thereof (hereinafter collectively
referred to as "Landlord's Financing"). Landlord represents that, as of the date
hereof, the sole holder of Landlord's Financing is The Travelers Life and
Annuity Company, One Tower Square, 2 SHS, Hartford, Connecticut 06183. Tenant
acknowledges that the interest of Landlord under this Lease may be assigned by
Landlord as collateral security to any of the foregoing parties holding
interests to which this Lease is subject and subordinate. In the event of
foreclosure of any such interest, or termination of any such ground of
underlying lease, or in the event of an exercise of the power of sale under any
mortgage or other security interest made by Landlord covering the premises of
which the Demised Premises forms a part, Tenant shall, at the sole option and
direction of any such party, recognize the rights of any such party under and
pursuant to the provisions of such collateral assignment and/or attorn to and
recognize any purchaser at a foreclosure sale of any mortgage or deed of trust
or any such purchaser at a sale exercised in connection with the mortgagee's or
trustee's remedy of power of sale pursuant to any mortgage or deed of trust
affecting the Demised Premises and/or Center or any transferee who acquires the
Demised Premises and/or Center by deed in lieu of foreclosure, and the
successors and/or assigns of such transferee or purchaser. Notwithstanding
anything to the contrary contained herein, this Lease shall not be subject and
subordinate to the lien of Landlord's Financing, unless an instrument, duly
executed by the holder(s) of Landlord's Financing, shall be delivered to Tenant
which instrument shall contain an agreement in substance, to be effective only
so long as Tenant


                                      -4-



shall not be in default under the provisions of this Lease, that such holder
shall recognize Tenant's rights under this Lease, shall not cut off or terminate
this Lease through foreclosure of the documents securing Landlord's Financing,
and Tenant shall not be disturbed in its possession of the Demised Premises or
the exercise of any of its rights under the Lease, which agreement may also
contains such provisions as are typically included therein by commercial lenders
(such agreement hereinafter referred to as the "Subordination, Non-Disturbance
and Attornment Agreement"). The Subordination, Non-Disturbance and Attornment
Agreement shall be in recordable form and in substance reasonably satisfactory
to Tenant, Landlord and the holder(s) of Landlord's Financing. Tenant
acknowledges that the form annexed hereto as Exhibit D is satisfactory to
Tenant.

     Section 4.02. The provisions of Section 4.01 shall be self-operative, but
Tenant covenants and agrees that it shall, within ten (10) days following
request, at any time or times, execute, acknowledge and deliver to Landlord any
instruments in order to subordinate this Lease and Tenant's rights hereunder, as
aforesaid, said instruments to be in the form required by any mortgagee, ground
lessor or other secured party.

     Section 4.03. If Tenant shall fail or neglect to execute, acknowledge and
deliver any documents required by this Article, Landlord, in addition to any
other remedies, may, as agent or attorney-in-fact of Tenant, execute,
acknowledge and deliver same on behalf of Tenant, and Tenant hereby irrevocably
nominates, constitutes and appoints Landlord as Tenant's proper and legal
attorney-in-fact for such purpose, hereby ratifying all such acts that Landlord
may do as attorney-in-fact of Tenant.

     Section 4.04. Tenant shall, at any time and from time to time, upon not
less than ten (10) days prior notice, execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect (or, if there have been modifications, that the same is in
full force and effect, as modified, and stating the modifications) and the dates
to which the rent and other charges have been paid in advance, if any, and
stating whether or not Landlord is in default in the performance of any
provision, covenant or condition contained in this Lease, and if so, specifying
each such default, and containing any other statements or certifications
required by a mortgagee, and/or ground lessor and/or other secured party, it
being intended that any statement or certification delivered pursuant to this
Section may be relied upon by any party to whom it may be delivered by Landlord.

     Section 4.05. The ground and underlying leases and mortgages referred to in
this Article 4 to which this Lease is subject and subordinate are hereinafter
sometimes called "superior leases" and "superior mortgages", respectively, and
the lessor of a superior lease, or its successor in interest at the time, is
hereinafter sometimes called the "lessor" of such superior lease. No pre-payment
of more than one month's rent shall be valid or binding upon the holder of a
superior mortgage or the lessor of a superior lease unless expressly approved in
writing by such holder or lessor or by any of its predecessors in interest.

     Section 4.06. Tenant agrees not to look to the mortgagee, as mortgagee,
mortgagee in possession, or successor in title to the Demised Premises and/or
the Center, for accountability for any security deposit required by Landlord
hereunder, unless said sums have actually been received by said mortgagee as
security for Tenant's performance of this Lease.


                                      -5-



                ARTICLE 5. AS-IS; LANDLORD'S WORK; TENANT'S WORK

     Section 5.01. Tenant has examined the Demised Premises and has made a
complete inspection of same and is familiar with the physical condition thereof.
Landlord has not made and does not make any representation as to the physical
condition or any other matter affecting or relating to the Demised Premises,
except as is in this Lease specifically set forth, and Tenant specifically
acknowledges that no such representation has been made, except that Landlord
represents, to the best of its knowledge and except as disclosed in the Phase I
Environmental Assessment prepared by Environmental Management Services dated
June 19, 2000, there are no environmental hazards present within the Demised
Premises. Tenant further acknowledges that Landlord has afforded Tenant the
opportunity for a full and complete investigation, examination, and inspection
of the Demised Premises and Tenant agrees to accept the Demised Premises "as
is", except that Tenant shall replace non-functioning horns, strobes and
pullboxes in the Demised Premises, provided, however, Landlord shall reimburse
Tenant for the one-half of the cost of replacing non-functioning horns, strobes
and pullboxes in the Demised Premises (Landlord reimbursement not to exceed
$3,000), subject to Landlord's receipt and approval of the estimates for such
work, which approval shall not be unreasonably withheld or delayed, and receipt
by Landlord of satisfactory documentation evidencing the payment and lien-free
completion of such work.

     Section 5.02. Landlord or Landlord's contractor may give Tenant notice that
the Landlord's Work is substantially complete to the extent that it is
practicable for Tenant to enter therein for the performance of work by Tenant
necessary to occupy the Demised Premises and open for business, and if such
notice shall be given, Tenant shall promptly thereafter commence all work that
is necessary to open the Demised Premises for business. Subject to the foregoing
provisions of this Section, Tenant shall have the right to install its fixtures
and equipment during construction, provided Tenant does not interfere with the
construction of the Demised Premises or Building, and, further, provided, that
insurance meeting the requirements of Section 7.02 is furnished to Landlord
prior to any such entry. Such entry into the Demised Premises by Tenant prior to
the Commencement Date is and shall be at the Tenant's sole cost and risk, and
the provisions of Section 7.01 and Section 7.02 shall be applicable during any
such period prior to the Commencement Date. Prior to commencing any work, Tenant
shall give Landlord prior written notice of the date on which Tenant intends to
commence such work, which notice shall describe the type of labor (i.e. union or
non-union labor) Tenant intends to hire for its work. Notwithstanding anything
herein to the contrary, Landlord may require Tenant to use union labor for all
work performed in the Demised Premises, the Building and/or in the Center if, in
Landlord's reasonable judgment, the use of non-union labor would delay or
interfere with the progress of any construction within the Building and/or
Center and/or the operation of any business in the Building and/or Center. In
the event that Landlord does not initially require Tenant to use union labor and
a labor dispute subsequently arises due to Tenant's use of non-union labor, then
Tenant shall, within twenty-four (24) hours following notice from Landlord
(which may be oral or written), cause each conflicting labor to leave the
Demised Premises, the Building and Center, and thereafter Tenant shall prosecute
its work only with local union labor. All fixturing and/or other work to be
performed by or on behalf of Tenant (other than Landlord's work hereunder) shall
be done in accordance with plans and specifications therefor submitted to and
approved by Landlord prior to the commencement of such fixturing and/or other
work, which approval shall not be unreasonably withheld, and in accordance with
and subject to the


                                      -6-



provisions of Article 19 hereof. No changes shall be made in said plans and
specifications nor shall there be any deviation in the prosecution of the work
in accordance with said plans and specifications without Landlord's prior
written approval.

     Section 5.03. If Tenant claims that some or all of the construction
requirements imposed upon Landlord pursuant to the provisions of this Lease have
not been complied with by Landlord upon delivery of notice of substantial
completion of Landlord's Work, as provided herein, Tenant shall, within ten (10)
days of said date (or ten days following the date Tenant opens for the
transaction of business, whichever date is sooner), submit to Landlord a written
list of the work Tenant claims remains to be performed by Landlord, and Landlord
shall have ninety (90) days thereafter to complete such work. If Landlord fails
to complete such work, the sole remedy of Tenant shall be to complete such work
and Tenant shall have the right to set off the cost thereof from the rent due
Landlord in order to reimburse Tenant for the cost and expense of completion of
the work. Upon written request of Landlord, Tenant will, within five (5) days
following request (but not sooner than the date required by the first sentence
of this Section), furnish to Landlord a written statement that Tenant is in
occupancy of the Demised Premises, that the construction of the Demised Premises
has been completed in accordance with Landlord's obligations or in lieu thereof,
a list of the work Tenant claims to be incomplete. Notwithstanding the
foregoing, the aforesaid time period shall not be applicable to latent defects
in the Landlord's Work for which notice may be given to Landlord promptly
following the date upon which Tenant discovers, or reasonably could have
discovered, any such latent defects. Landlord agrees to assign to Tenant all
warranties relating to the Landlord's Work, provided, however, the Landlord
reserves the right to enforce same, jointly with, or independently of Tenant.

     Section 5.04. Landlord shall substantially complete the construction of the
Landlord's Work on or prior to that date which is one hundred twenty (120) days
following the date of issuance of a building permit for the Landlord's Work to
be performed at the Demised Premises.

     If possession of the substantially completed Demised Premises shall not be
delivered to Tenant on or prior to such date, Tenant shall have the right to
cancel this Lease upon notice to Landlord to be given within fifteen (15) days
following such date, unless the substantially completed Demised Premises shall
be delivered to Tenant prior thereto. If Tenant shall not exercise such right of
cancellation, the date by which Landlord is obligated to deliver possession of
the Demised Premises shall be deemed to be automatically extended for an
additional period of ninety (90) days. If possession of the substantially
completed Demised Premises is not delivered to Tenant prior to the expiration of
such extension period, or if Tenant shall cancel this Lease pursuant to the
first sentence of this paragraph, this Lease shall automatically terminate and
be null and void and of no further force and effect, and the parties shall be
mutually released of and from all rights and obligations hereunder. Tenant's
right to cancel this Lease, as provided herein, shall be Tenant's sole remedy
for Landlord's failure to deliver possession on or before the required date.

     If the substantial completion of the Landlord's Work is delayed by reason
of: (i) any act or omission of Tenant or any of its employees, agents or
contractors; or (ii) any failure (not due to any act or omission of Landlord or
any of its employees, agents or contractors) to plan or execute Tenant's work
necessary for Tenant's occupancy of the Demised Premises with reasonable speed
and diligence, or (iii) any changes by Tenant in the plans or specifications for


                                      -7-



the construction of the Demised Premises or any changes or substitutions
requested by Tenant; or (iv) Tenant's failure to furnish plans and
specifications required to be furnished by Tenant, or subsequent changes
thereto; or (v) Tenant's request for materials, finishes or installations other
than Landlord's typical building standard; or (vi) the performance or
incompletion of work by a party employed or retained by Tenant; then the
Landlord's Work shall be deemed substantially completed on the date when the
same would have been substantially completed but for such delay and, in
addition, Tenant shall pay to Landlord all costs and damages which Landlord may
sustain by reason of such delay.

     Section 5.05.

          (a) Tenant, at Tenant's sole cost and expense, subject to the Tenant
Allowance (as hereinafter defined), shall perform all work necessary to
renovate, fixture and equip the Demised Premises for Tenant's use in accordance
with the provisions of Section 2.01 of this Lease (the "Tenant Improvements").
Tenant covenants and agrees that Tenant shall commence the performance of the
Tenant Improvements within fifteen (15) days following the issuance of a
building permit, and thereafter Tenant shall diligently prosecute such Tenant
Improvements and complete same as soon as possible, but in no event more than
three (3) months from and after the date that the building permit shall have
been issued ("Tenant Improvement Completion Date"). Tenant agrees to apply for
the building permit immediately following Tenant's receipt of notice from
Landlord that Landlord has approved the plans and specifications for the
performance of the Tenant Improvements.

          (b) Subject to completion of Tenant Improvements in accordance with
Tenant's Plans (as hereinafter defined) and the provisions set forth below in
this Section 5.05(B), Landlord shall reimburse Tenant for amounts actually
expended by Tenant for a portion of the construction of the Tenant Improvements,
in an amount not to exceed the sum of $217,000.00 (the "Tenant Allowance"). Such
reimbursement shall be in the form of a credit to be taken by Tenant against the
first payments of annual minimum rental payable hereunder. The portion of the
Tenant Improvements for which the Tenant Allowance shall be paid shall be only
that portion thereof that is office installation work (e.g. partitioning, doors,
electrical, etc., including, without limitation, upgrading and replacing of
existing mechanical systems in the Demised Premises) and in no event shall the
Tenant Allowance be used for any work related to Tenant's trade fixtures or
equipment (such portion of the Tenant Improvements for which Tenant may receive
the Tenant Allowance is hereinafter called the "Tenant Allowance Work").
Supplementing the foregoing, Landlord acknowledges and agrees that the work
described in Exhibit E annexed hereto shall be deemed to be Tenant Allowance
Work. Pending the completion of the Tenant Allowance Work (which "completion"
shall be deemed to include the delivery to Landlord of the documentation
required pursuant to Subparagraph (C) of this Section 5.05, the annual minimum
rental payable pursuant to Section 3.01 of this Lease shall be abated (the
period for which annual minimum rental is abated is referred to herein as the
"Rent Concession Period"). Notwithstanding anything to the contrary set forth
herein, in the event that the Tenant Improvements have not been completed and
the documentation required pursuant to Subparagraph (C) of this Section 5.05
have not been delivered to Landlord on or before the Tenant Improvement
Completion Date, Tenant shall make immediate payment to Landlord of any monthly
minimum rental payments that have been abated during the Rent Concession Period,
the Rent Commencement Date shall be deemed to be the Commencement Date of this


                                      -8-



Lease and Tenant will immediately commence payment of annual minimum rental
amounts as set forth in 3.01. Landlord shall be entitled to draw upon the letter
of credit for the purpose of collecting such unpaid minimum rental payments.
Notwithstanding the foregoing, in the event that the completion of the Tenant
Improvements and the delivery to Landlord of the documentation required pursuant
to Subparagraph (C) of this Section 5.05 has not occurred by the Tenant
Improvement Completion Date by reason of the causes set forth in Section 5.06
below, then the Tenant Improvement Completion Date shall be extended for such
period of delay, but in no event shall any such delay extend for more than an
additional three (3) months following the Tenant Improvement Completion Date. It
is further acknowledged and agreed by Tenant that in the event that the monies
expended by Tenant for the completion of the Tenant Allowance Work are less than
the amount of the Tenant Allowance, Tenant shall not be entitled to any credit
for the unused portion thereof, nor is Tenant entitled to any additional sums
from Landlord in the event that the monies expended by Tenant in connection with
the completion of the Tenant Allowance Work or the Tenant Improvements exceeds
the amount of the Tenant Allowance.

          (c) The Tenant Improvements shall be effected solely in accordance
with the plans and specifications approved by Landlord (such plans and
specifications hereinafter referred to as "Tenant's Plans"). The Tenant
Improvements shall be performed in accordance with the foregoing and the
following provisions of this Article 5:

     1. All work shall be done in a good and workmanlike manner.

     2. Tenant and its contractor and any subcontractor shall agree to employ
only such labor as will not result in jurisdictional disputes or strikes or
result in causing disharmony with other workers employed at the Building. Tenant
will inform Landlord in writing of the names of any contractor or subcontractor
Tenant proposes to use in the Demised Premises within a reasonable time prior to
the beginning of work by such contractor or subcontractor. A copy of any
contract or subcontract affecting Tenant Improvements, the Demised Premises or
the Building shall be submitted to Landlord prior to commencement of the work
provided for therein.

     3. The Tenant Improvements shall be effected in compliance with all
applicable laws, ordinances, rules and regulations of governmental bodies having
or asserting jurisdiction thereover and Tenant shall procure and furnish to
Landlord copies of all governmental permits and authorizations which may be
required in connection with such work, prior to the commencement thereof.

     4. Tenant, at its expense, and with diligence and dispatch, shall procure
the cancellation or discharge of all notices of violation arising from or
otherwise connected with work performed or alleged to have been performed by its
contractor(s) or subcontractor(s) and which shall be issued by the Borough of
South Plainfield or any other public authority having or asserting jurisdiction.
Tenant shall defend, indemnify and save harmless Landlord against any and all
mechanic's and other liens and financing or title retention devices filed in
connection therewith and against all costs, expenses and liabilities (including
reasonable attorney's fees) incurred in connection with any such lien, financing
statement, conditional bill of sale, chattel mortgage or other financing or
title retention devices, or any action or proceeding brought


                                      -9-



thereon. Tenant shall keep the Land, the Building and the Demised Premises free
and clear of all liens for any work or material claimed to have been furnished
to Tenant or to the Demised Premises on Tenant's behalf, and all work to be
performed by Tenant shall be done in a manner which will not interfere with or
disturb other tenants or occupants of the Building. All notices of intention,
mechanic's liens, financing statements, conditional bills of sale, chattel
mortgages and other financing or title retention devices filed against Tenant,
the Demised Premises, or the Building for work claimed to have been done for or
materials claimed to have been furnished to Tenant shall be cancelled and
discharged of record by Tenant at its expense within ten (10) days after such
filing, by payment or filing of the bond required by law.

     Neither Tenant nor any of its agents, employees, representatives,
contractors or subcontractors shall have any power or authority to do any act or
thing or to make any contract or agreement which will bind Landlord or which may
create or be the foundation for any mechanic's lien or other lien or claim upon
or against Landlord or Landlord's interest in the Real Property; and further,
Landlord shall have no responsibility to Tenant or to any architect, engineer,
contractor, subcontractor, supplier, material man, workman or other person, firm
or corporation who shall engage in or participate in the performance of Tenant
Improvements, any additional work or any installation, alteration or improvement
to be performed or made by Tenant under any of the terms of this Lease, or
otherwise, unless Landlord shall expressly undertake such obligation by an
agreement in writing, signed by Landlord, and made between Tenant and Landlord
or such other party. Notice is hereby given that Landlord shall not be liable
for any labor or materials furnished or to be furnished to Tenant upon credit
and that no mechanic's or other lien for any such labor or materials shall
attach to or affect the reversion or other estate or interest of Landlord in and
to the Demised Premises, the Land and/or the Building. A copy of the foregoing
provisions of this paragraph shall be included in any contract entered into by
or on behalf of Tenant for the performance of or the furnishing or installation
of Tenant Work, any additional work, or any installation, alteration or
improvement to the Demised Premises.

     5. During the progress of the work to be done by Tenant, said work shall be
subject to inspection by representatives of Landlord, which shall be permitted
access and the opportunity to inspect at all reasonable times, but this
provision shall not in any way whatsoever create any obligation on Landlord to
conduct an inspection or impose any liability on Landlord for the failure of any
such work.

     6. Prior to commencement of any Tenant Work, Tenant or Tenant's contractor
shall furnish to Landlord policies of insurance or certificates thereof
evidencing the existence of the insurance coverages required by Section 7.02
hereof, including without limitation comprehensive general liability and
builder's risk insurance. Upon request by Landlord, Tenant's contractors and/or
subcontractors shall furnish to Landlord Performance Bonds and/or Completion
Bonds, in form and substance reasonably satisfactory to Landlord.

     7. Upon completion of the work, Tenant shall, at its sole cost and expense,
remove all debris from the Demised Premises and the Building, and clean the
same. If it is necessary for Landlord to do any work to clean the Building
and/or the Center or any part thereof, Tenant shall reimburse Landlord, upon
demand therefor, Landlord's cost of cleaning same, plus Landlord supervision
charges of fifteen (15%) percent.


                                      -10-



     8. Upon completion of Tenant Improvements, Tenant shall submit to Landlord
in form and substance satisfactory to Landlord and counsel for Landlord the
following:

     (a) A Certificate of Completion by a licensed architect or engineer, which
Certificate shall certify that all Tenant Improvements has been completed in
accordance with the approved plans and specifications;

     (b) A certificate by Tenant, or if Tenant is a corporation by an executive
officer of Tenant, that the entire cost of Tenant Improvements has been paid and
the amount thereof, that all those who furnished work or materials have been
paid in full, and that no party has filed any lien or possesses any claim which
is unpaid or remains undischarged;

     (c) A Certificate of Occupancy, or an equivalent permit or certificate,
required by any governmental authorities prior to opening for business within
the Demised Premises;

     (d) A final release and lien waiver signed by Tenant's general contractor
and all subcontractors and materialmen, together with a certificate by the
general contractor to the effect that all those who furnished work or materials
to the Demised Premises have been paid in full and that the release and waiver
has been signed by all those who furnished work or materials to the Demised
Premises; and

     (e) Final and complete "as-built" plans (architectural and mechanical) for
the Demised Premises.

     Section 5.06. If there shall be a delay in the completion of the Landlord's
Work or repair or restoration of the Demised Premises or Center or any portion
thereof caused by strikes, riots, acts of God, shortages of labor or materials,
national emergency, governmental restrictions, laws or regulations, the act or
failure to act of Tenant, including without limitation, delays in delivering
construction criteria and plan approval, or for any other cause or causes beyond
Landlord's control, at Landlord's option such delay shall not be a violation of
this Lease, and the time periods set forth in this Lease for any such work
shall, at Landlord's option, be extended for a period of time equal to the
period of delay.

     Section 5.07. The Plot Plan shows the approximate location of existing
buildings, buildings under construction, proposed buildings and certain areas
reserved for related site improvements and future construction at the option of
Landlord. Landlord shall have the right to develop the Center in the manner it
sees fit and in the sole and absolute discretion of Landlord: to construct or
not construct any buildings other than the Building, to change the nature or
identity of the occupants of any such buildings, and to vary the floor areas,
stories and heights, sizes, shapes and design of any such buildings and the
divisions or portions thereof.

                       ARTICLE 6. ALTERATIONS AND REPAIRS

     Section 6.01. No alterations or additions shall at any time be made by or
at the instance of Tenant without Landlord's prior written consent, except that
Tenant may make alterations, the cost or value of which is not greater than
$10,000.00, without Landlord's consent, provided such alterations do not affect
the exterior or load bearing structural integrity of the Building or materially
or adversely affect the building systems serving the Demised Premises. All work,


                                      -11-



repairs, and/or alterations made by or at the instance of Tenant shall be done
in a good and workmanlike manner, with first class materials, in compliance with
any applicable governmental rules and regulations, and subject to Article 19
hereof, and the cost thereof shall be paid by Tenant in cash or its equivalent,
so that the Demised Premises shall at all times be free of liens for labor or
materials supplied or claimed to have been supplied to the Demised Premises. Any
alterations, installations, repairs, additions or improvements (inclusive of
paneling and other wall coverings), except Tenant's trade fixtures, shall, at
the option of Landlord, become the property of Landlord and shall remain upon
and be surrendered with the Demised Premises, as part thereof, at the expiration
or sooner termination of the Term. If Tenant is in default hereunder or is
dispossessed, or vacates the premises, voluntarily or otherwise, and fails to
remove any property, equipment and fixtures within ten (10) days following
notice by Landlord, then and in that event, the said property, equipment and
fixtures shall be deemed, at the option of Landlord, to be abandoned; or in lieu
thereof, at the Landlord's option, Landlord may remove and store or dispose of
such property and charge the cost and expense of removal, storage and disposal
to Tenant, provided, however, Landlord's option to elect that such alterations
either remain with the Demised Premises or be removed at the Tenant's expense,
and the Landlord's determination as to whether any particular fixtures are
"trade fixtures", shall be made within thirty days (30) following Tenant's
written request to Landlord to make such determination with respect to any
particular installation of any of such alterations or fixtures. Trade fixtures
shall be defined as fixtures and equipment used by Tenant in the operation of
its business, but not including any fixtures and equipment which are part of the
operation of the Demised Premises or the Building.

     Section 6.02. Anything to the contrary contained herein notwithstanding, it
is expressly understood and agreed that Tenant may install, connect and operate
such machinery, fixtures and equipment as may be deemed necessary by the Tenant
for its business, subject to compliance with applicable rules and regulations of
governmental bodies and bureaus having jurisdiction thereover. Subject to the
terms and conditions of this Lease, the machinery, fixtures and equipment
belonging to Tenant shall, at all times, be considered and intended to be
personal property of Tenant, and not part of the realty, and subject to removal
by Tenant, provided, at the time of such removal, that Tenant is not in default
pursuant to any of the terms, covenants, provisions or conditions of this Lease.
Tenant, at its own cost and expense, shall pay for any damage to the Demised
Premises or Building caused by the installation thereof or such removal, and
this obligation shall survive the expiration or sooner termination of the Term.

     Section 6.03. Landlord shall, following reasonable notice from Tenant, make
all necessary repairs and replacements to the exterior structural portions of
the Demised Premises, including the roof and foundations thereof, provided,
however, Landlord shall not be required to make any repairs or replacements
caused by any act, omission, or negligence of Tenant, any subtenant, or
concessionaire, or their respective employees, agents, invitees, licensees or
contractors, including any repairs to the roof necessitated by roof penetrations
made by Tenant, it being understood that Landlord shall be responsible for any
roof repairs arising out of Landlord's Work. Tenant shall make all other repairs
and replacements to the Demised Premises. Tenant shall maintain throughout the
Term, including any extension term hereof, a protective service maintenance
contract with a contractor approved by Landlord, which approval shall not be
unreasonably withheld, providing for periodic maintenance of the H.V.A.C. system
serving the Demised Premises, including without limitation periodic changing of
any and all filters, changing of belts, lubricating of equipment and maintenance
of operating levels of freon in


                                      -12-


accordance with manufacturers specifications. Said contract shall provide for
maintenance inspection and service not less than two (2) times per year. A copy
of any such maintenance contract shall be delivered to Landlord on a yearly
basis or more often if required by Landlord. Tenant shall keep all glass clean
and in good condition, and Tenant shall replace any glass which may be damaged
or broken with glass of the same quality. Tenant shall keep the sidewalk, if
any, adjacent to the Demised Premises free and clear of trash, litter and
rubbish.

     Section 6.04. To the extent permitted by law, nothing contained in this
Lease shall authorize Tenant to do any act which may create or be the foundation
for any lien, mortgage or other encumbrance upon the reversion or other estate
of Landlord, or of any interest of Landlord in the Demised Premises, or upon or
in the Building or Center of which the same form a part; it being agreed that
should Tenant cause any alterations, changes, additions, installations,
improvements or repairs to be made to the Demised Premises, or cause materials
to be furnished or labor to be performed therein or thereon, neither Landlord
nor the Demised Premises shall, under any circumstances, be liable for the
payment of any expense incurred or for the value of any work done or materials
furnished to the Demised Premises or any part thereof. Tenant shall, upon
request of Landlord, deliver such documents as may be required by Landlord in
order to effectuate the lien protection required by this paragraph and Section
6.01 hereof, including without limitation, waivers of lien in advance from all
contractors. All such alterations, changes, additions, improvements, repairs,
materials and labor shall be at Tenant's sole expense and Tenant shall be solely
and wholly responsible to contractors, subcontractors, laborers and materialmen
furnishing labor and material to the Demised Premises and Building or any part
thereof. If, because of any act or omission of Tenant, any mechanic's or other
lien or order for the payment of money shall be filed against the Demised
Premises or the Building or improvements thereon or therein, or upon the Center,
or against Landlord (whether or not such lien or order is valid or enforceable
as such), Tenant shall, at Tenant's own cost and expense, within ten (10) days
after notice of the filing thereof, cause the same to be canceled and discharged
of record, or furnish Landlord with a surety bond issued by a surety company
reasonably satisfactory to Landlord, protecting Landlord from any loss because
of nonpayment of such lien or claim, and Tenant hereby indemnifies and saves
harmless Landlord from and against any and all costs, expenses, claims, losses
or damages, including reasonable counsel fees, resulting therefrom or by reason
thereof.

     Section 6.05. Except for the repair obligations of Landlord under Section
6.03 above and the restoration obligations of Landlord under and as set forth in
Articles 8 and 10 hereof, the Tenant shall take good care of the Demised
Premises and, at its cost and expense, keep and maintain in good repair the
interior and exterior of the Demised Premises, including, but not limited to the
air conditioning and heating plant, the plumbing pipes and fixtures belonging
thereto; and shall repair or replace all mechanical and working parts used in
connection with the air conditioning, electrical, heating and plumbing plants,
fixtures and systems; and shall keep the water and sewer pipes and connections,
including the gutters, leaders, and roof drains, free from other obstructions;
and shall generally maintain and repair the interior and exterior of the Demised
Premises and shall, at the end or the expiration of the Term (or Extension Term,
whichever is applicable), deliver up the Demised Premises in good order and
condition, damages by the elements, ordinary wear and tear excepted. Tenant
covenants and agrees that it shall not cause or permit any waste (other than
reasonable wear and tear), damage or disfigurement to the Demised Premises, or
any overloading of the floors of the Building.


                                      -13-



     Section 6.06. Landlord hereby acknowledges that Tenant may obtain financing
for its laboratory and/or office equipment, and that in such event, Tenant may
grant a security interest to such lender or equipment lessor in connection with
such financing and/or leasing. Landlord further acknowledges that such financing
or leasing by Tenant shall not be deemed to be a violation of the provisions of
Section 6.04 so long as the lien of such lender or equipment lessor extends
solely to the trade fixtures or other property of the Tenant located at the
Demised Premises, and does not attach to, affect in any manner whatsoever, the
building or property of the Landlord located at the Building, including, without
limitation, the building fixtures and equipment located in the Demised Premises.

                       ARTICLE 7. INDEMNITY AND INSURANCE

     Section 7.01.

          (a) To the extent not covered by the insurance required to be
maintained by Landlord hereunder, Tenant hereby indemnifies and saves harmless
Landlord from and against any claims and all loss, cost, liability, damage
and/or expense, including, but not limited to reasonable counsel fees, penalties
and fines, incurred in connection with or arising from (i) any default by Tenant
in the observance or performance of any of the provisions, covenants or
conditions of this Lease on Tenant's part to be observed or performed, (ii) the
use or occupancy or manner of use or occupancy of the Demised Premises by Tenant
or any person claiming through or under Tenant, or (iii) any acts, omissions, or
negligence of Tenant or any such person, or any contractor, agent, servant,
employee, visitor or licensee of Tenant, or any such person, in or about the
Demised Premises. If any action or proceeding shall be brought against Landlord
based upon any such claim, Tenant, upon notice from Landlord, shall cause such
action or proceeding to be defended, at Tenant's expense, by counsel acting for
Tenant's insurance carriers in connection with such defense or by other counsel
reasonably satisfactory to Landlord.

          (b) To the extent not covered by insurance required to be maintained
by Tenant hereunder, Landlord hereby indemnifies and saves harmless Tenant from
and against any claims and all loss, cost, liability, damage and/or expense,
including, but not limited to reasonable counsel fees, penalties and fines,
incurred in connection with or arising from (i) any default by Landlord in the
observance or performance of any of the provisions, covenants or conditions of
this Lease on Landlord's part to be observed or performed, or (ii) any acts,
omissions, or negligence of Landlord or any such person, or any contractor,
agent, servant, employee, visitor or licensee of Landlord, or any such person,
in or about the Demised Premises. If any action or proceeding shall be brought
against Tenant based upon any such claim, Landlord, upon notice from Tenant,
shall cause such action or proceeding to be defended, at Landlord's expense, by
counsel acting for Landlord's insurance carriers in connection with such defense
or by other counsel reasonably satisfactory to Tenant.

     Section 7.02. Tenant shall, during the Term (including any extension term)
and during any period prior to the commencement of the Term during which Tenant
or anyone acting by or on behalf of Tenant enters the Demised Premises, at
Tenant's own cost and expense, maintain and provide: (a) comprehensive general
liability insurance for the benefit and protection of Landlord and Tenant (said
policy to name Landlord, ground lessor, if any, and any other parties designated
by Landlord, as co-insureds) in an amount not less than $1,000,000 for injuries
or


                                      -14-



death to any one person, and not less than $3,000,000 for injuries or death to
more than one person in any one accident or occurrence and for damage to
property in an amount not less than $500,000 arising out of any one accident or
occurrence; (b) plate glass insurance covering all plate glass in the Demised
Premises; (c) worker's compensation insurance covering all persons employed in
connection with Tenant's use and occupancy of the Demised Premises or any
construction or alteration work therein; (d) insurance against loss or damage to
Tenant's contents, including without limitation, trade fixtures and equipment,
by fire, lightning, and other risks from time to time included under standard
"extended coverage" policies, and vandalism and malicious mischief, in amounts
sufficient to prevent Landlord and Tenant from becoming co-insurers of any loss
under such policy, but in any event, not less than 100 percent of the full
insurable value of such property; (e) boiler and pressure vessel insurance on
all of Tenant's equipment, parts thereof and appurtenances attached or connected
to the Demised Premises which by reason of their use or existence are capable of
bursting, erupting, collapsing or exploding, in the minimum amount of Five
Hundred Thousand ($500,000.00) Dollars for damage to property resulting from
such perils; and (f) insurance covering such other risks as may be reasonably
requested by Landlord occasioned by or attributable to the use or occupancy or
manner of use or occupancy of the Demised Premises by Tenant. Said policies
shall be issued by companies satisfactory to Landlord and licensed to do
business in the state in which the Demised Premises is located. Said policies or
certificates thereof shall be delivered to Landlord at the commencement of the
Term (or prior thereto in the event of earlier entry by Tenant upon the Demised
Premises), together with proof of payment of premium therefor, and renewal
policies or certificates therefor shall be delivered to Landlord not less than
twenty (20) days prior to the expiration dates thereof. Said policies and/or
certificates shall contain an undertaking by the insurer to give Landlord not
less than twenty (20) days written notice of any cancellation or change in scope
or amount of coverage of said policies.

     Section 7.03.

          (a) Landlord shall, during the Term, maintain and provide general
hazard insurance during the course of construction (including "builder's risk
endorsements") against loss or damage to the Building by fire, lightning and
other risks from time to time included under standard "Extended Coverage"
policies, vandalism and malicious mischief, in amounts not less than 100 percent
of the full replacement value of the Building and any other building or portion
thereof covered by such insurance and rent loss insurance covering all minimum
and additional rental payable hereunder. Tenant shall pay its proportionate
share of the cost of maintaining and providing such insurance, which
proportionate share shall be a fraction having as its numerator the number of
square feet of floor area within the Demised Premises and as its denominator,
the total number of square feet of floor area of all buildings within Lot 46.24.

          (b) Such payment shall be made to Landlord, at Landlord's Option,
either annually within thirty (30) days of demand therefor or in monthly
installments on or before the first day of each calendar month, in advance, in
an amount estimated by Landlord. Periodically, Landlord shall furnish Tenant
with a written statement of the actual amount of Tenant's proportionate share of
said insurance costs. If the total amount paid by Tenant under this section for
any period during the Lease Term shall be less than the actual amount due from
Tenant for such period, as shown on such statement, Tenant shall pay to Landlord
the difference between the amount paid by Tenant and the actual amount due, such
deficiency to be paid within ten (10)


                                      -15-


days after demand therefor by Landlord; and if the total amount paid by Tenant
hereunder for any such period shall exceed the actual amount due from Tenant for
such period, the excess shall promptly be applied by Landlord to the next
accruing monthly installments thereof or, at Landlord's option, to any other
charges payable by Tenant. For the calendar years in which this Lease commences
and terminates, the provisions of this section shall apply and Tenant's
liability for its proportionate share thereof for such years shall be subject to
a pro rata adjustment based on the number of days of said calendar years during
the Lease Term. Prior to or at the commencement of the Lease Term and from time
to time thereafter throughout the Lease Term, Landlord will notify Tenant in
writing of Landlord's estimate of Tenant's monthly installments due hereunder.
Tenant's obligations under this section shall survive the expiration of the
Lease Term.

     Section 7.04. Insurance coverages required of Tenant hereunder shall be
reviewed on an annual basis and Landlord may require that said coverages shall
be updated in accordance with the provisions hereinabove set forth as to amounts
and scope of coverage.

     Section 7.05. In the event of any insured loss covered under the terms and
conditions of this Lease, and for which Tenant is obligated to maintain
insurance coverage, all insurance carriers' checks in satisfaction of the same
shall be made payable to the Landlord and the holder of the first mortgage
covering the Building and Tenant waives any and all rights to be designated a
payee on such loss payment, except as to losses under the coverage in Section
7.02(d) above.

                             ARTICLE 8. FIRE DAMAGE

     Section 8.01. If the Demised Premises shall be partially damaged by fire or
other insured casualty, the damages shall be repaired by and at the expense of
Landlord and the annual minimum rental until such repairs shall be made shall
abate equitably according to the part of the Demised Premises which is unusable
by Tenant or, if by reason thereof, the Demised Premises are rendered
untenantable, said rental shall totally abate until such repairs shall be made.
Notwithstanding the foregoing, if the Demised Premises or the Building shall be
damaged to such extent that Landlord shall decide to demolish same, or not to
rebuild same, then, and in such event, Landlord may terminate this Lease upon
notice to Tenant given within ninety (90) days following such event, and upon
the date specified in such notice, which date shall not be less than thirty (30)
days nor more than sixty (60) days following the giving of said notice, this
Lease shall terminate and Tenant shall vacate and surrender the Demised Premises
to Landlord. Any annual minimum rental prepaid by Tenant beyond said date shall
be promptly refunded to Tenant. Notwithstanding any of the foregoing provisions
of this Article, if Landlord or the holder of any superior mortgage shall be
unable to collect all of the insurance proceeds (including rent insurance
proceeds) applicable to damage or destruction of the Demised Premises or the
Building by fire or other cause, by reason of some action or inaction on the
part of the Tenant or any of its employees, agents or contractors, then, without
prejudice to any other remedies which may be available against Tenant, the
abatement of Tenant's rents provided for in this Article shall not be effective
to the extent of the uncollected insurance proceeds.

     Section 8.02. If this Lease shall not be terminated as provided above in
this Article, Landlord shall, at its expense, proceed with the restoration of
the Demised Premises, provided, Landlord's obligations hereunder shall not
exceed the scope of Landlord's initial construction


                                      -16-



obligations under this Lease and further provided, that Landlord's restoration
obligations shall be subject to building and zoning laws then in effect. No
penalty shall accrue for reasonable delay which may arise by reason of
adjustment of insurance on the part of Landlord. Landlord shall use diligent
efforts to adjust insurance promptly. If Landlord shall so restore the Demised
Premises, Tenant shall repair, restore and redecorate the Demised Premises and
reoccupy and reopen the Demised Premises, within fifteen (15) days following
notice of restoration, in a manner and to the condition existing prior to the
event of damage, except to the extent that Landlord is obligated above, and
Tenant shall hold in trust the proceeds of all insurance carried by Tenant on
its property for the purpose of such repair and restoration.

     Section 8.03. Nothing hereinabove contained with respect to Tenant's right
to abate the rent under proper conditions shall be construed to limit or affect
Landlord's right to payment under the rental loss coverage to be provided
pursuant to Section 7.03 hereof.

                        ARTICLE 9. WAIVER OF SUBROGATION

     Section 9.01. Landlord, its officers, agents, employees, subsidiaries and
affiliated entities and corporations shall not be liable for any damage to or
destruction of any of Tenant's goods, merchandise, fixtures, furniture or
property of whatsoever nature, caused by fire or any other cause whatsoever,
including, without limitation, the negligence of any such parties, and Tenant
hereby releases and waives any right of recovery against Landlord, its officers,
agents, employees, subsidiaries and affiliated entities and corporations for any
such loss. Tenant shall procure a waiver of subrogation on the part of the
insurer against such parties by an endorsement to all insurance policies whereby
the insurer recognizes the provisions of this Article.

     Section 9.02. Tenant, its officers, agents, employees, subsidiaries and
affiliated entities and corporations shall not be liable for any damage to or
destruction of any of Landlord's goods, merchandise, fixtures, furniture or
property of whatsoever nature, caused by fire or any other cause whatsoever,
including, without limitation, the negligence of any such parties, and Landlord
hereby releases and waives any right of recovery against Tenant, its officers,
agents, employees, subsidiaries and affiliated entities and corporations for any
such loss. Landlord shall procure a waiver of subrogation on the part of the
insurer against such parties by an endorsement to all insurance policies whereby
the insurer recognizes the provisions of this Article.

                            ARTICLE 10. CONDEMNATION

     Section 10.01. If the whole of the Demised Premises shall be taken by any
governmental authority under the power of condemnation, eminent domain, or
expropriation, or in the event of a conveyance in lieu thereof, the Term shall
cease as of the day possession shall be taken by such governmental authority. If
more than 25 percent of the Demised Premises shall be so taken or conveyed,
either Landlord or Tenant shall have the right to terminate this Lease upon
notice to the other party, effective as of the day possession shall be taken by
such governmental authority. If this Lease is so terminated, annual minimum
rental shall be prorated as of the date that possession must be surrendered to
the condemning authority.

     Section 10.02. If this Lease continues after a partial taking, the annual
minimum rental shall abate equitably as to the part of the Demised Premises
which is taken. If this Lease


                                      -17-



continues after any such taking or conveyance, Landlord shall make all necessary
repairs and restorations so as to restore the remainder of the Demised Premises
to a complete architectural unit. Landlord's reconstruction obligations shall
not exceed the amount of the award or compensation for the taking, shall not
exceed the scope of Landlord's initial construction obligations hereunder, and
shall be subject to building and zoning laws then in effect.

     Section 10.03. If so much of the Center, Common Areas or Building shall be
so taken or conveyed so that in the reasonable exercise of Landlord's judgment,
the continued operation of the Building for use by its tenants is unfeasible,
then, in such event, Landlord may, by notice to Tenant, delivered not later than
thirty (30) days following the date that possession of the premises taken or
conveyed is delivered to the governmental authority, terminate this Lease, and
rent shall be pro rated as of the date that possession must be surrendered to
the condemning authority.

     Section 10.04. Tenant and not Landlord shall be entitled to any portion of
the award made to Tenant for the value of Tenant's removable trade fixtures and
equipment other than equipment necessary for the operation of the Building. All
compensation awarded for the taking of the Building, the fee and the leasehold
shall belong to and be the property of Landlord, and Tenant shall not be
entitled to and hereby waives any damages for the unexpired portion of the Term,
or injury to its leasehold interest.

                      ARTICLE 11. ASSIGNMENT AND SUBLETTING

     Section 11.01. Tenant, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors and assigns, as the case may
be, expressly covenants that it shall not assign, mortgage or encumber this
agreement, nor sublet or underlet nor suffer or permit the Demised Premises or
any part thereof to be used by others without the prior written consent of
Landlord in each instance. If, with consent of Landlord, this Lease may be
assigned, or the Demised Premises or any part thereof be underlet or occupied by
anybody other than Tenant, Landlord may collect rent from the assignee,
undertenant or occupant and apply the amount collected to the rent herein
reserved, but no such assignment, underletting, occupancy or collecting shall be
deemed to relieve Tenant or any guarantor of this Lease or guarantor of the
obligations of Tenant hereunder of any of its or their obligations hereunder nor
be deemed a waiver of this covenant, or the acceptance of the assignee,
undertenant or occupant as tenant; or a release of Tenant or any guarantor of
this Lease or any guarantor of the obligations of Tenant hereunder from its or
their obligations under the covenants, provisions and conditions hereof; it
being understood and agreed that Tenant and any guarantor of this Lease or any
guarantor of the obligations of Tenant hereunder shall at all times, including
during any extension term, remain obligated as primary obligors under this
Lease. The consent by Landlord to an assignment or underletting shall not in any
wise be construed to relieve Tenant or any other Tenant, assignee, undertenant,
or occupant of the Demised Premises from obtaining the express consent in
writing of Landlord to any further assignment or underletting, and no such
assignment or subletting shall be made to anyone who shall occupy the Demised
Premises for any use other than as specifically permitted by the terms of this
Lease. Notwithstanding anything contained in this Lease to the contrary, in the
event that it shall be found by a court of competent jurisdiction that Landlord
was unreasonable in withholding its consent to the assignment of this Lease or
the subletting of all or any portion of the Demised Premises, Tenant's sole
remedy shall be limited to specific


                                      -18-



performance and Tenant shall not be entitled to damages or any other affirmative
relief or remedy as a result thereof. In the event of a leveraged buy-out or
other take-over of Tenant, Landlord's consent to an assignment of this Lease or
subletting of the Demised Premises to the successor entity shall not be deemed
to have been unreasonably withheld if said successor entity shall not have a net
worth (in the event of a corporate entity, on a market value basis) as certified
to by a certified public accountant at least equal to the net worth of Tenant
upon the date of execution of this Lease.

     Section 11.02. Supplementing the provisions of Section 11.01 of this Lease,
provided Tenant is not in default under any of the terms, covenants, conditions
and provisions of the Lease, Landlord shall not unreasonably withhold or delay
or condition its consent to any proposed assignment of this Lease, or subletting
of all or any portion(s) of Demised Premises. Any assignment or transfer of this
Lease and any subletting of all or a portion of the Demised Premises shall be
subject to Landlord's prior written consent and subject to the terms of all of
the sections of this Article 11 and shall be made only if, and shall not be
effective until, the assignee or subtenant shall execute, acknowledge and
deliver to Landlord a recordable agreement, in form and substance satisfactory
to Landlord and counsel for Landlord, whereby the assignee or subtenant shall
assume for the benefit of Landlord the obligations and performance of this Lease
and agree to be personally bound by and upon all of the covenants, agreements,
terms, provisions and conditions hereof on the part of Tenant to be performed or
observed, and whereby Tenant (and any guarantor of this Lease or of the Tenant's
obligations hereunder) covenants and agrees to remain liable as a primary
obligor for the due performance of all of the covenants, agreements, terms,
provisions and conditions of this Lease on the part of Tenant to be performed or
observed. In the event of any assignment of this Lease or any subletting of all
or any portion of the Demised Premises, the obligations of Tenant and any
guarantor of this Lease or any guarantor of the obligations of Tenant under this
Lease as a primary obligor shall be unaffected and shall remain in full force
and effect.

     Section 11.03. In the event that Tenant desires to assign this Lease or
sublet all or a portion of the Demised Premises, Tenant shall first notify
Landlord in writing of its intention, and such notice shall include the
information described in the last sentence of Section 11.04 hereof and state the
name of the proposed assignee or subtenant, together with its full address and a
description of its proposed use (but nothing contained herein shall permit, nor
obligate Landlord to permit, a use other than the use permitted by Section 2.01
of this Lease, it being understood that any change in use shall be subject to
Landlord's consent, which Tenant agrees may, notwithstanding anything contained
herein to the contrary, be unreasonably withheld). Tenant shall include
therewith such financial information as may be available concerning the proposed
assignee or subtenant, including without limitation current updated financial
statements (which financial information Tenant, and/or the proposed assignee or
subtenant shall supplement on demand if required by Landlord). In addition,
Tenant shall simultaneously tender a duplicate original of the instrument of
assignment or sublease and a termination and surrender agreement in proper form,
reasonably satisfactory to counsel for Landlord ("Surrender Agreement") executed
in and on behalf of Tenant. Thereafter, Landlord shall have sixty (60) days in
which to decide whether to accept a surrender of the Demised Premises or to
respond to the notification above, it being understood that during such sixty
(60) day period Landlord shall have the right to negotiate with such assignee
and/or subtenant, without Landlord incurring any obligation whatsoever to
Tenant, for all or a portion of the Demised Premises or such other or greater or


                                      -19-



lesser area of the Center as Landlord shall determine in its sole discretion. In
the event that Landlord shall accept the Surrender Agreement, Landlord shall
execute the Surrender Agreement and this Lease shall terminate as of the
sixtieth day following the day that Landlord received Tenant's notification
("Surrender Date"), with the same force and effect as if such date were the
Expiration Date. Upon the termination of this Lease pursuant hereto, Tenant
shall pay all annual minimum rent and additional rent on a pro rata basis for
each day prior to the Surrender Date. In the event that any item of additional
rent cannot be calculated as of the Surrender Date, Tenant hereby covenants to
pay its pro rata share promptly upon being billed therefor and this obligation
shall survive the Surrender Date.

     Section 11.04. Tenant hereby covenants and agrees to tender to Landlord
upon receipt fifty (50%) percent of any annual minimum rent or additional rent
or lump sum or installment payment or sum which Tenant shall receive from or on
behalf of any assignee(s) or subtenant(s) or any occupant by, through or under
Tenant, which is in excess of the annual minimum rent or additional rent payable
by Tenant in accordance with the provisions of this Lease (or in the event of a
subletting of less than the whole of the Demised Premises, the annual minimum
rent or additional rent allocable to that portion of the Demised Premises
affected by such sublease) less the actual bona-fide expenses paid by Tenant in
connection with such subletting or assignment (e.g. cost of alterations, and
brokerage, legal and architectural and engineering fees). At the time of
submission of the proposed assignment or sublease to Landlord, Tenant shall
certify to Landlord in writing whether or not the assignee or subtenant has
agreed to pay any such monies to Tenant or any designee of Tenant other than as
specified and set forth in such instruments, and if so Tenant shall certify the
amounts and time of payment thereof in reasonable detail.

     Section 11.05. Notwithstanding anything to the contrary contained in this
Article, Tenant may assign this Lease or sublet any portion of the Demised
Premises at any time during the term of this lease, without obtaining Landlord's
consent, upon Tenant giving Landlord prior written notice, to (a) another
corporation succeeding to substantially all of the assets of Tenant as a result
of a consolidation or merger or to a corporation to which all or substantially
all of the assets of Tenant have been sold; (b) a wholly-owned subsidiary
corporation; or (c) an affiliated corporation (defined as any corporation whose
majority of shares are owned or controlled by the same persons owning or
controlling the majority of shares of Tenant); provided: (i) documentation in
compliance with Section 11.02 above shall be delivered to Landlord prior to the
effective date of such assignment or sublease, and (ii) Tenant shall remain
primarily liable under all terms and conditions of this Lease (unless Tenant's
corporate existence ends as a matter of law pursuant to such consolidation or
merger).

                       ARTICLE 12. COMMON AREA MAINTENANCE

     Section 12.01. As used in this Lease, the term "Common Area Operating
Costs" shall include the total cost and expense incurred by Landlord in
operating, lighting, striping, maintaining, cleaning, landscaping, repairing
(including replacement and resurfacing) managing, signing, equipping and
insuring the Common Areas within Lot Nos. 46.24 and 46.25 plus ten (10%) percent
of the foregoing costs to cover Landlord's administrative and overhead costs.
Such costs and expenses shall include, without limitation (including appropriate
reserves): cleaning; fire and police protection and general security (Landlord
not incurring or assuming any obligation to provide such protection or security
or any liability for the failure of the same);


                                      -20-



repairing and replacing paving; keeping the Common Areas supervised, drained,
reasonably free of snow, ice, rubbish and other obstructions, and in a neat,
clean, orderly and sanitary condition; the charges for rubbish containers and
removal (except that at Landlord's option, Tenant shall be directly responsible
for contracting for and for providing (subject to Landlord's approval of the
provisions and conditions of the agreement therefor) rubbish containers and
removal); the maintenance of any and all fire protection systems servicing Lot
Nos. 46.24 and 46.25; the cost of public liability insurance; keeping the Common
Areas suitably lighted; maintaining signs (other than Tenant's signs), markers,
painted lines delineating parking spaces, and other means and methods of
pedestrian and vehicular traffic control; constructing, maintaining and
repairing of onsite and offsite traffic controls; maintaining adequate roadways,
entrances and exits; maintaining any plantings and landscaped areas; Lot Nos.
46.24 and 46.25 management fees incurred by Landlord, including management fees
payable to parties or entities owned or controlled by Landlord or any of them;
maintenance and repair of all utilities, utility conduits and storm drainage
systems situated within or servicing Lot Nos. 46.24 and 46.25; fees for required
licenses and permits; and depreciation of machinery and equipment used in the
operation and maintenance of the Common Areas and personal property taxes and
other charges incurred in connection with such equipment. The term "Common
Areas" shall be defined as all paved areas, driveways, truckways, walkways, and
landscaped and planted areas within Lot Nos. 46.24 and 46.25. Landlord shall
maintain, light, clean and repair (including snow removal) the Common Areas so
that such Common Areas may be used for their intended purposes, and in order to
enable Landlord to perform its obligations as aforesaid, Landlord may incur such
Common Area Operating Costs as Landlord, in its sole discretion, may determine,
in the performance of Landlord's obligations hereunder to maintain the Common
Areas.

     Section 12.02. During the initial term of this Lease and during any
extension term hereof, Tenant shall pay Landlord Tenant's proportionate share of
Common Area Operating Costs incurred or expended by Landlord as aforesaid. Such
payment shall be made to Landlord in monthly installments on or before the first
day of each calendar month, in advance, in an amount estimated by Landlord.
Following the expiration of each calendar year during the Term hereof, Landlord
shall furnish Tenant with a written statement of the actual amount of Tenant's
proportionate share of the Common Area Operating Costs for such year. If the
total amount paid by Tenant under this section for any calendar year during the
Term shall be less than the actual amount due from Tenant for such year, as
shown on such statement, Tenant shall pay to Landlord the difference between the
amount paid by Tenant and the actual amount due, such deficiency to be paid
within ten (10) days after demand therefor by Landlord; and if the total amount
paid by Tenant hereunder for any such calendar year shall exceed such actual
amount due from Tenant for such calendar year, such excess shall promptly be
applied by Landlord to the next accruing monthly installments of Tenant's
proportionate share of Common Area Operating Costs or, at Landlord's option, to
any other charges payable by Tenant. For the calendar years in which this Lease
commences and terminates, the provisions of this section shall apply, and
Tenant's liability for its proportionate share of any Common Area Operating
Costs for such years shall be subject to a pro rata adjustment based on the
number of days of said calendar years during the Term. Prior to or at the
commencement of the Term and from time to time thereafter throughout the Term,
Landlord will notify Tenant in writing of Landlord's estimate of Tenant's
monthly installments due hereunder. Landlord shall have the right to make
special assessments from time to time for extraordinary Common Area Operating
Costs and Tenant shall pay any such special assessment within ten (10) days
following Landlord's billing therefor.


                                      -21-



Extraordinary Common Area Operating Costs shall include, without limitation, any
charge not anticipated by Landlord in determining Landlord's estimate of
Tenant's proportionate share of Common Area Operating Costs for the year in
question and any charges, costs and expenses incurred by Landlord which might
cause the amounts paid by Tenant pursuant to Landlord's estimate of Tenant's
proportionate share of Common Area Operating Costs for the year in question to
be less than the amount actually due from Tenant for such year pursuant to this
Section 12.02. Tenant's obligations under this section shall survive the
expiration of the Term. Tenant's proportionate share of Common Area Operating
Costs shall be a fraction, having as its numerator, the number of square feet of
floor area within the Demised Premises and as its denominator, the total number
of square feet of floor area of all buildings within Lot Nos. 46.24 and 46.25
or, at Landlord's option, the portion thereof affected by such cost, including
the Demised Premises. Notwithstanding the foregoing provisions of this Article,
in the event the obligations of Tenant under this Article 12 are specifically
identifiable separate charges relating to Tenant and/or the Demised Premises,
then, and in such event, the obligations of Tenant under this Article 12 may, at
Landlord's option, be measured and payable in accordance with such separate and
specifically identifiable charge and not by the provisions of the preceding
sentence.

     Section 12.03. Tenant, its concessionaires, officers, employees, and agents
may use the Common Areas, subject to such reasonable rules and regulations as
Landlord may from time to time impose, including the designation of specific
areas in which vehicles owned or operated by Tenant, its concessionaires,
officers, employees and agents must be parked. Tenant shall abide by such rules
and regulations and cause its concessionaires, officers, employees, agents,
customers and invitees to conform thereto. Landlord may, at any time, close
temporarily any Common Areas to make repairs or changes therein or to effect
construction repairs or changes within Lot Nos. 46.24 and 46.25, and Landlord
may do such other acts in and to the Common Areas as in its reasonable judgment
may be desirable to improve the convenience thereof. In the event that any such
temporary closures of the Common Areas shall exceed two (2) business days,
Landlord shall use diligent efforts to arrange for appropriate alternate parking
for Tenant.

     Section 12.04. Notwithstanding anything to the contrary herein contained,
Landlord hereby reserves the right (and Tenant hereby consents thereto) to
construct or permit the construction, use and maintenance within the Common
Areas of Lot Nos. 46.24 and 46.25 including without limitation, the parking
areas, of various commercial type buildings, structures, and appurtenances, and
equipment incidental thereto, subject, however, to the provisions of the last
sentence of Section 1.01(b).

                              ARTICLE 13. UTILITIES

     Section 13.01. Tenant shall pay, as and when they shall be due and payable,
all water charges, taxes, water rates and/or meter charges, sprinkler charges
(standby or otherwise), sewer taxes, sewer charges, sewer fees, and sewer rental
taxes and charges for utilities, including, without limitation, the charges for
gas, electricity, and other utilities furnished to Tenant and consumed in the
Demised Premises. Tenant shall heat the Demised Premises whenever the weather
shall require. If Landlord, or any property of Landlord, shall be held
responsible for any expense covered by this Article, Tenant shall pay Landlord
the amount thereof within five (5) days following written request. Landlord
shall not be responsible to Tenant for any failure or


                                      -22-



interruption of any such services, irrespective of the cause thereof, except the
negligence or misconduct of Landlord, or Landlord's employees agents, or
contractors.

                                ARTICLE 14. TAXES

     Section 14.01.

          (a) Subject to the reimbursement obligations of Tenant hereinafter set
forth, Landlord shall pay during the Term of this Lease, all real estate taxes
assessed or imposed upon or respecting the land and improvements within and upon
Lot No. 46.24. The term "real estate taxes" for purposes of this Lease shall
exclude income, franchise, estate or inheritance taxes levied against Landlord
or taxes based upon rental receipts, but shall include any taxes levied in lieu
of or as a substitute for real estate taxes. Tenant shall pay to Landlord, as
additional rent, at the time and in the manner set forth in Section 14.01 (b),
Tenant's proportionate share of such taxes, which proportionate share shall be a
fraction having as its numerator the number of square feet of floor area within
the Demised Premises and as its denominator, the total number of square feet of
floor area of all buildings within Lot 46.24. Notwithstanding the foregoing, if
the improvements within the Demised Premises and/or the balance of the
improvements or any part thereof upon Lot No. 46.24 shall receive a separate
assessment based upon the certification of the Tax Assessor, then the taxes
payable by Tenant for such improvements may, at Landlord's option, be based
thereon.

          (b) All amounts payable by Tenant pursuant to this Article shall be
paid to Landlord in monthly installments on or before the first day of each
calendar month, in advance, in an amount estimated by Landlord; provided, that
in the event Landlord is required under any mortgage encumbering Lot No. 46.24
to escrow real estate taxes, Landlord may, but shall not be obligated to, use
the amount required to be so escrowed as a basis for its estimate of the monthly
installments due from Tenant hereunder. As soon as shall be reasonably
practicable following the expiration of each calendar year during the Term,
Landlord shall furnish Tenant with a written statement of the actual amount of
Tenant's share of the taxes for such year. If the total amount paid by Tenant
under this Section for any calendar year during the Term shall be less than the
actual amount due from Tenant for such year, as shown on such statement, Tenant
shall pay to Landlord the difference between the amount paid by Tenant and the
actual amount due, such deficiency to be paid within ten (10) days after demand
therefor by Landlord; and if the total amount paid by Tenant hereunder for any
such calendar year shall exceed such actual amount due from Tenant for such
calendar year, such excess shall be applied by Landlord to the next accruing
monthly installments of taxes due from Tenant or, at Landlord's option, to any
other charges payable by Tenant. For the calendar years in which this Lease
commences and terminates the provisions of this Section shall apply, and
Tenant's liability for its share of taxes for such years shall be subject to a
pro rata adjustment based on the number of days of said calendar years during
the Term. Prior to or at the commencement of the Term and from time to time
thereafter throughout the Term, Landlord may notify Tenant in writing of
Landlord's estimate of Tenant's monthly installments due hereunder. Landlord
shall have the right to make special assessments from time to time for
extraordinary real estate taxes and Tenant shall pay any such special assessment
within ten (10) days following Landlord's billing therefor. Extraordinary real
estate taxes shall include, without limitation, any charge not anticipated by
Landlord in determining Landlord's estimate of Tenant's proportionate share of
real estate taxes


                                      -23-



for the year in question and any real estate taxes incurred by Landlord which
might cause the amounts paid by Tenant pursuant to Landlord's estimate of
Tenant's proportionate share of real estate taxes for the year in question to be
less than the amount actually due from Tenant for such year pursuant to this
Section 14.01(b). Tenant's obligations under this Section shall survive the
expiration of the Term.

     Section 14.02. Tenant shall be liable for all taxes on or against property
and trade fixtures and equipment placed by Tenant in or about the Demised
Premises, and all taxes on Tenant's right to occupy the Demised Premises. If any
such taxes are levied against Landlord or Landlord's property, and if Landlord
pays same, or if the assessed valuation of Landlord's property is increased by
the inclusion therein of a value placed upon such property, and if the Landlord
pays the taxes based on such increased assessment, Tenant, upon demand, shall
repay to Landlord the taxes so paid by Landlord or the portion of such taxes
resulting from such increase in assessment.

                        ARTICLE 15. REMEDIES OF LANDLORD

     Section 15.01.

          (a) If Tenant shall default in the payment of the annual minimum
rental reserved herein, or in the payment of any item of additional rent or
other monies due hereunder, or any part of same, and any such default shall
continue for more than five (5) days after written notice of such default; or

          (b) If Tenant shall default in the observance of any of the
provisions, covenants and conditions of this Lease (other than a default covered
by subsection (a) above and other than sections hereof which provide a specific
period or date for performance), and such default shall continue for more than
twenty (20) days after written notice of such default, or for such other period
provided in the relevant section hereof provided, however, that Tenant shall not
be in default if Tenant commences to cure such default within said twenty (20)
day period and thereafter diligently pursues said cure; or

          (c) If Tenant shall fail to occupy the Demised Premises and open for
business at the commencement of the Term of this Lease, as above provided, or if
the Demised Premises shall be abandoned, deserted or vacated for a period
exceeding three (3) consecutive months, or if Tenant shall sublet the Demised
Premises or assign this Lease, except as herein provided, or if Tenant shall be
in default under any other obligations of Tenant to Landlord of any nature
whatsoever, including in connection with any other lease between Tenant and any
of the Landlords or between Tenant and any entity in which any partner of
Landlord holds an interest; or

          (d) If Tenant or any guarantor of Tenant's obligations hereunder shall
make an assignment for the benefit of creditors, or if any such party shall file
or have filed against it a petition in bankruptcy, or be adjudicated a bankrupt
by any court and such adjudication shall not be vacated within thirty (30) days,
or if Tenant or any guarantor of Tenant's obligations hereunder takes the
benefit of any insolvency act, or if Tenant or any guarantor of Tenant's
obligations hereunder be dissolved voluntarily or involuntarily or have a
receiver of its property


                                      -24-



appointed in any proceedings other than bankruptcy proceedings and such
appointment shall not be vacated within thirty (30) days after it has been made,
or if any levy, sale or execution of any kind is made upon or of any property of
Tenant in the Demised Premises; or

          (e) If, within any period of three hundred and sixty-five consecutive
days: (i) Tenant shall default (the "First Default") in any of its obligations
under this Lease and notice thereof shall be given to Tenant as provided above;
and (ii) Tenant shall default under this Lease for a second time (the "Second
Default") (notwithstanding that Tenant may have cured the First Default) and
notice thereof shall be given to Tenant as provided above, and (iii) Tenant
shall default under this Lease for a third time (the "Third Default")
(notwithstanding that Tenant may have cured the First Default and/or the Second
Default) and notice thereof shall be given to Tenant as provided above, and the
First Default, Second Default and Third Default shall be similar (without
limiting the definition of the term "similar", with respect to non-monetary
defaults, all monetary defaults shall be deemed to be similar to each other);

then, upon the happening of any one or more of the defaults or events specified
above, at the option of Landlord: (1) this Lease and the Term hereof shall
wholly cease and terminate, with the same force and effect as though such
termination was the date of the expiration of the Term of this Lease, and
thereupon, or at any time thereafter, Landlord may re-enter said premises either
by force, or otherwise, and have possession of the same and/or may recover
possession thereof by summary proceeding, or otherwise (but Tenant shall remain
liable to Landlord as hereinafter provided); or (2) Landlord may, without
further notice, exercise any remedy available at law or in equity.

     Section 15.02. In case of any default, event, re-entry, expiration,
termination and/or dispossession by summary proceedings, or otherwise, Tenant
shall, nevertheless, remain and continue liable to Landlord in a sum equal to
all annual minimum rental and additional rent herein reserved for the balance of
the Term herein demised as the same may become due and payable pursuant to the
provisions of this Lease. Landlord may repair or alter the Demised Premises in
such manner as to Landlord may seem necessary or advisable, and/or let or relet
the Demised Premises and any and all parts thereof for the whole or any part of
the remainder of the original Term hereof or for a longer period, in Landlord's
name, or as the agent of Tenant, and, out of any rent so collected or received,
Landlord shall, first, pay to itself, the expense and cost of retaking,
repossessing, repairing and/or altering the Demised Premises, and the expense of
removing all persons and property therefrom, second, pay to itself, any cost or
expense sustained in securing any new tenant or tenants, and third, pay to
itself, any balance remaining on account of the liability of Tenant to Landlord
for the sum equal to the annual minimum rental and additional rent reserved
herein and unpaid by Tenant for the remainder of the Term herein demised. Any
entry or re-entry by Landlord, whether had or taken under summary proceedings or
otherwise, shall not absolve or discharge Tenant from liability hereunder.

     Section 15.03. Should any rent so collected by Landlord after the payment
aforesaid be insufficient fully to pay to Landlord a sum equal to all annual
minimum rental and additional rent herein reserved, the balance or deficiency
shall be paid by Tenant on the rent days herein specified; that is, upon each of
such rent days Tenant shall pay to Landlord the amount of the deficiency then
existing and Tenant shall be and remain liable for any such deficiency, and the
right of Landlord to recover from Tenant the amount thereof, or a sum equal to
the amount of all


                                      -25-



annual minimum rental and additional rent herein reserved if there shall be no
reletting, shall survive the issuance of any dispossessory warrant or other
termination hereof.

     Section 15.04. Suit or suits for the recovery of such deficiency or damage,
or for a sum equal to any installment or installments of annual minimum rental
or additional rent hereunder, may be brought by Landlord from time to time at
Landlord's election, and nothing herein contained shall be deemed to require
Landlord to await the date on which this Lease or the Term hereof would have
expired by limitation had there been no such default by Tenant or no such
termination or cancellation.

     Section 15.05. Tenant hereby expressly waives service of any notice of
intention to re-enter subsequent to the giving of the aforesaid notices under
Section 15.01 above. Tenant hereby expressly waives any and all right to recover
or regain possession of the Demised Premises or to reinstate or to redeem this
tenancy or this Lease as is permitted or provided by or under any statute, law,
or decision now or hereafter in force and effect.

     Section 15.06. Tenant shall reimburse Landlord, within five (5) days
following written demand, for any reasonable counsel fees or collection charges
actually incurred or expended by Landlord by reason of Tenant's default in the
performance of any provision, covenant, or condition of this Lease and any such
amounts, at the option of Landlord, may be recovered in the same action or
proceeding forming the basis of the default or in another action or proceeding.

     Section 15.07. Notwithstanding any other remedy provided for hereunder and
without the requirement of notice, except as provided in this Section, if Tenant
shall not comply with any of its obligations hereunder, Landlord shall have the
right, at Landlord's sole option, at anytime in the event of an emergency or
otherwise after ten (10) days notice to Tenant, to cure such breach at Tenant's
expense. Tenant shall reimburse Landlord, within ten (10) days following demand,
as additional rent, for all costs and expenses incurred by Landlord in curing
such breach, together with interest computed thereon at the rate of eighteen
(18%) percent per annum or the maximum rate permitted by law, whichever shall be
the lesser.

     Section 15.08. Notwithstanding anything to the contrary contained in this
Lease, if Tenant fails to pay any rent, additional rent or any other money item
due hereunder within thirty (30) days after same are due and payable, Landlord
shall have the right (in addition to any other rights or remedies of Landlord
and without the requirement of any notice) to commence immediate legal
proceedings or action for dispossession and damages or Landlord may avail itself
of any other remedies at law or in equity and include in such action or
proceeding any amounts then due and payable as of the date of the commencement
of such action or proceeding. Notwithstanding anything contained in this Lease,
if Tenant fails to pay any monetary items due hereunder on the date on which the
same are due and payable, a late charge of four ($.04) cents for each ONE
($1.00) DOLLAR so overdue shall become immediately due and payable to the
Landlord as damages for failure to make prompt payment and the same shall be
considered as additional rent hereunder payable together with the next
installment of monthly rent. In addition, all such unpaid monetary items shall
bear interest at the maximum rate permitted by law from the date such monies
were due until the date on which Landlord shall receive payment.


                                      -26-



     Section 15.09. The rights and remedies whether herein or elsewhere provided
in this Lease shall be cumulative and the exercise of any one right or remedy
shall not preclude the exercise of or act as a waiver of any other right or
remedy of Landlord hereunder, or which may be existing at law, or in equity, by
statute or otherwise.

     Section 15.10. Tenant covenants and agrees to give any mortgagee and/or
ground lessor of the Center or any portion thereof notice of any default by
Landlord under this Lease and such mortgagee and/or ground lessor shall be
afforded the right (but shall not have the obligation) to cure any default by
Landlord within such reasonable period of time as may be required by such
mortgagee and/or ground lessor.

                       ARTICLE 16. WAIVER OF TRIAL BY JURY

     Section 16.01. It is mutually agreed by and among Landlord, Tenant and any
guarantor of the obligations of Tenant hereunder, that the respective parties
hereto shall and they hereby do waive trial by jury in any action, proceeding,
or counterclaim brought by the parties hereto on any matters whatsoever arising
out of or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Demised Premises, and/or any claim of
injury or damage, and any emergency, summary or statutory remedy. If Landlord
commences any summary proceeding, or any other action for collection of rent or
additional rent hereunder, Tenant shall not interpose any counterclaim or cross
claim of any nature in any such proceeding or action, nor shall Tenant move to
consolidate any such claim with any claim being maintained by Landlord.

                         ARTICLE 17. ACCESS TO PREMISES

     Section 17.01. Landlord and its designees shall have the right to enter
upon the Demised Premises at all times during normal business hours and upon
twenty four (24) hours telephonic notice to Tenant's designated representation
at the Demised Premises (except in emergency situations) to inspect and examine
same, to make repairs, additions, alterations, or improvements to the Demised
Premises, the Building within which the Demised Premises are located or any
property owned or controlled by Landlord within such Building. In the case of
emergency situations, Landlord may have access to the Demised Premises but shall
still be required to give telephonic notice to Tenant's designated
representative at the Demised Premises within a reasonable time following
Landlord's gaining access to the Demised Premises. Any work performed by
Landlord shall be performed in such a manner so as not to interfere with any
ongoing experiments being conducted by Tenant at the Demised Premises.
Landlord's rights of entry as aforesaid, and the taking of all property into and
upon the Demised Premises that may be required in connection therewith, shall
not be considered an eviction of Tenant, in whole or in part, constructive or
otherwise, and Landlord shall not be liable to Tenant for any expense, damage,
or loss or interruption of the business of Tenant by reason thereof, and the
rent reserved hereunder shall continue without abatement during the period of
any such entry and while such repairs, alterations, improvements or additions
are being made. Landlord or Landlord's designees shall have the right to enter
the Demised Premises at all times to show the Demised Premises to prospective
purchasers, mortgagees or lessees of the Demised Premises, the Building or the
Center. During the six month period prior to the expiration of the Term hereof,
Landlord may exhibit the Demised Premises to prospective tenants and Landlord
may place upon the


                                      -27-



Demised Premises notices reading, "To Let" or "For Rent", which notices Tenant
shall allow to be posted conspicuously without molestation.

                              ARTICLE 18. NO WAIVER

     Section 18.01. No delay or omission of the exercise of any right by either
party hereto shall impair any such right or shall be construed as a waiver of
any default or as acquiescence therein. One or more waivers of any provision,
covenant, or condition of this Lease by either party shall not be construed by
the other party as a waiver of a subsequent breach of any other or the same
provisions, covenant, or condition. No requirements whatsoever of this Lease
shall be deemed waived or varied because of either party's failure or delay in
taking advantage of any default, and Landlord's acceptance of any payment from
Tenant with actual or constructive knowledge of any default shall not constitute
a waiver of Landlord's rights in respect to such default, nor of any subsequent
or continued breach of any such default or any other requirement of this Lease.

     Section 18.02. No payment by Tenant or receipt and acceptance by Landlord
of a lesser amount than the rent or other sum stipulated to be paid or reserved
shall be deemed an accord and satisfaction or a modification or waiver of any
rights or obligations or liabilities hereunder notwithstanding any statement,
written or oral, accompanying such payment, or by way of endorsement or
otherwise; and Landlord may accept any such payment whether by check, draft or
other means whatsoever without prejudice to Landlord's right to recover the
balance owing, or to pursue any other remedy in this Lease or at law or in
equity provided. Landlord may apply such payment to any sums then due and
payable by Tenant to Landlord as Landlord shall determine in its sole
discretion. Landlord may, at Landlord's option, accept payment of rent or any
other charge hereunder from any person or entity other than the Tenant named
herein and the same shall not constitute a recognition by Landlord of, or vest
in said person or entity, any rights hereunder.

             ARTICLE 19. REQUIREMENTS OF LAW; INSURANCE REQUIREMENTS

     Section 19.01. In Tenant's performance of its rights and obligations under
this Lease, including without limitation, any pre-term right, obligation or
entry into the Demised Premises, Tenant covenants and agrees to comply with all
laws, orders, and regulations of federal, state, city, county, governmental and
municipal authorities, fire insurance rating organizations and fire insurance
underwriters, and insurance companies issuing coverage respecting the Demised
Premises and Tenant shall make all alterations or installations necessary to
comply therewith. Tenant shall secure all permits or approvals necessary to
operate its business within the Demised Premises and shall only operate its
business within the Demised Premises in compliance with all laws, orders and
regulations of federal, state, city and county, governmental and municipal
authorities, fire insurance rating organizations and fire insurance
underwriters, and insurance companies issuing coverage respecting the Demised
Premises.

     Section 19.02. Tenant shall not use or occupy the Demised Premises or do or
permit anything to be done therein in any manner which shall make it impossible
for Landlord and/or Tenant to obtain at standard rates any insurance required or
desired, or which will invalidate or increase the cost to Landlord of any
insurance. Landlord hereby acknowledges that Tenant shall


                                      -28-



be permitted to use and occupy the Demised Premises for the chemical and
biological laboratory research contemplated to be conducted in the Demised
Premises, provide same is conducted in accordance with industry standards and
the requirements of all applicable governmental authorities.

     Section 19.03. If, by reason of Tenant's failure to comply with the
provisions of Section 19.01 above, or if, by reason of any act or failure to act
of Tenant, its agents, servants, contractors, employees or licensees, or if, by
reason of the use of the Demised Premises, the fire insurance rates applicable
to the Demised Premises, or of the Building or any other premises in said
Building, shall be increased above the rate applicable to the occupancy
permitted hereunder, Tenant shall pay to Landlord, within three (3) days
following demand, the amount of additional premium for fire insurance payable by
reason thereof.

     Section 19.04. No abatement, diminution, or reduction in annual minimum
rental or any sums constituting additional rent shall be claimed by or allowed
to Tenant for any inconvenience or interruption, cessation or loss of business
caused directly or indirectly, by any present or future laws, ordinances, rules
or regulations, requirements or orders of federal, state, county, township or
municipal governments or any other lawful authority whatsoever, or by
priorities, rationing, or curtailment of labor or materials, or by war, civil
commotion, strikes or riots, or any manner or thing resulting therefrom, or by
any other cause or causes beyond the control of Landlord, nor shall this Lease
be affected by any such causes.

                                ARTICLE 20. SIGNS

     Section 20.01. Tenant shall not place, install or maintain any sign upon or
outside the Demised Premises or in the Center until approved by Landlord, nor
shall Tenant place, install or maintain any sign within one-half mile of the
Center; nor shall Tenant place, install or maintain any awning, canopy, aerial,
antenna or the like in or upon the Demised Premises, the Building or the Center.
Landlord's approval of Tenant's signs shall not be unreasonably withheld,
conditioned or delayed. Any sign must conform to all applicable rules,
regulations, codes and directives of governmental agencies having jurisdiction,
and Tenant shall, at its expense, apply for and obtain all permits necessary in
connection therewith. If Landlord shall submit to Tenant a general sign criteria
or specification, Tenant shall comply therewith. Tenant shall be solely
responsible for all maintenance and repairs respecting its signs.

                    ARTICLE 21. TENANT'S ADDITIONAL COVENANTS

     Section 21.01. Tenant covenants and agrees for itself, its officers,
employees, contractors, agents, servants, licensees, invitees, subtenants,
concessionaires, and all others doing business with Tenant (hereinafter for the
purposes of this Article, collectively referred to as "Tenant") that:

          (a) Tenant shall execute such further assurances and/or guarantees
which are stated by Landlord as intended to be necessary to secure the approval
of Tenant's credit rating;

          (b) Tenant shall not encumber or obstruct the Center or sidewalks in
and about the Demised Premises;


                                      -29-



          (c) Tenant shall not display, advertise or sell its products or goods
in the Common Areas of the Center or sidewalk in and about the Demised Premises;

          (d) Intentionally omitted.

          (e) Tenant shall not cause or permit trash, refuse, dirt or other
rubbish to accumulate on the Demised Premises or in the Center and shall cause
same to be promptly removed;

          (f) Tenant shall not injure, overload, deface, commit waste or
otherwise harm the Demised Premises or any part thereof;

          (g) Tenant shall not commit any nuisance;

          (h) Tenant shall not permit the emission from the Demised Premises of
any objectionable noise or odor. Normal laboratory practices conducted in
accordance with industry standards and the requirements of governmental
authorities shall be excepted from the foregoing;

          (i) Tenant shall not burn any trash, rubbish, dirt or refuse within
the Center;

          (j) Tenant shall use the Demised Premises only for business and
commercial purposes (subject to the provisions of Article 2 hereof) and Tenant
shall not use, allow or permit any industrial, manufacturing or processing
activities within the Demised Premises, except as may be expressly permitted by
Section 2.01 of this Lease;

          (k) Tenant shall conform and comply with all nondiscriminatory and
uniformly applicable rules and regulations which Landlord may promulgate for the
management and use of the Center;

          (l) Tenant shall not use any advertising medium that may constitute a
nuisance, such as loudspeakers, sound amplifiers or phonographs, in a manner to
be heard outside the Demised Premises;

          (m) Intentionally omitted.

          (n) Tenant shall not place a load on any floor of the Demised Premises
exceeding the floor load per square foot which such floor was designed to carry;

          (o) Tenant shall not install, operate or maintain in the Demised
Premises any electrical equipment which will overload the electrical system
therein or any part thereof beyond the capacity for proper and safe operation,
as determined by Landlord, in relation to the overall system and requirements
for electricity in the Building;

          (p) Tenant shall not install, operate, or maintain any electrical
equipment in the Demised Premises which does not bear underwriters approval; and

          (q) No portion of the Demised Premises shall be used or occupied for
the sale, dispensing, storage or display of food, foodstuffs, or food products
for consumption on or off the


                                      -30-


Demised Premises, provided that the foregoing shall not prohibit the use and
occupancy of the Demised Premises as permitted by Section 2.01 hereof, and
further provided that the foregoing shall not prohibit vending machines,
refrigerators, microwave ovens or other food service areas maintained by Tenant
for the use of Tenant's employees and visitors.

                      ARTICLE 22. EASEMENTS FOR UTILITIES

     Section 22.01. Landlord or its designee shall have the right and Tenant
shall permit Landlord or its designee to erect, use, maintain and repair pipes,
cables, conduits, plumbing, vents and wires in, to and through the Demised
Premises as and to the extent that Landlord may now or hereafter deem necessary
or appropriate for the use or proper operation and maintenance of the Demised
Premises, or the Building or any other portion of the Center. Landlord's rights
under this Article shall be exercised, as far as practicable, in such manner as
to avoid unreasonable interference with Tenant's occupancy of the Demised
Premises.

                       ARTICLE 23. CONSENTS AND APPROVALS

     Section 23.01. With respect to any provision of this Lease providing that
Landlord shall not unreasonably withhold or unreasonably delay any consent or
any approval, Tenant, in no event, shall be entitled to make, nor shall Tenant
make, any claim for, and Tenant hereby waives any claim for money damages; nor
shall Tenant claim any money damages by way of setoff, counterclaim or defense,
based upon any claim or assertion by Tenant that Landlord has unreasonably
withheld or unreasonably delayed any consent or approval; but Tenant's sole
remedy shall be an action or proceeding to enforce any such provision, or for
specific performance, injunction or declaratory judgment.

                         ARTICLE 24. CONTROL OF TENANT

     Section 24.01. If Tenant hereunder is a corporation (other than a
corporation whose shares are regularly and publicly traded on a duly recognized
stock exchange), Tenant represents that ownership and power to vote its entire
outstanding capital stock is vested in the officers executing this Lease or the
members of their immediate families. If there shall be any change in the
ownership of and/or power to vote the majority of said outstanding capital
stock, without the prior written consent of Landlord, then, and in such event,
Landlord shall have the option to terminate this Lease upon not less than thirty
(30) days notice to Tenant.

                        ARTICLE 25. END OF TERM HOLDOVER

     Section 25.01. If the last day of the Term falls on a Sunday, or legal
holiday, this Lease shall expire on the business day immediately following. Upon
the expiration or other termination of the Term of this Lease, Tenant shall quit
and surrender to Landlord the Demised Premises, together with all buildings and
improvements thereon, "broom-clean" and in good order and condition, ordinary
wear and tear and damage by the elements excepted, and Tenant shall thereupon
remove all property of Tenant which shall be deemed to include, without
limitation, the removal of all of Tenant's laboratory equipment and fixtures
such as laboratory hoods and benches, including the capping of all utilities for
such equipment, but shall not include the removal of the acid neutralization pit
and tank. In the event Tenant fails to remove such property, Landlord may cause
all of the said property to be removed, stored and/or disposed of at


                                      -31-



the expense of Tenant. Tenant shall pay all costs and expenses thereby incurred.
Any property not so removed shall be deemed to have been abandoned by Tenant and
may be retained or disposed of by Landlord as Landlord, in its sole discretion,
shall determine and Tenant hereby releases Landlord from all claims for loss or
damage to such property arising out of such retention or disposition thereof.
Tenant's obligations under this Article shall survive the expiration or other
termination of the Term.

     Section 25.02. If Tenant remains in possession of the Demised Premises at
the expiration or earlier termination of the Term hereof, Tenant, at Landlord's
option, shall be deemed to be occupying the Demised Premises as a tenant from
month to month, at a monthly rental equal to the greater of (i) one and one-half
times the sum of the monthly installment of annual minimum rent payable during
the last month of the Term hereof or (ii) twice the sum of the then prevailing
market rate rent, as determined by Landlord at its sole and absolute discretion,
plus all additional rent coming due hereunder. Acceptance by Landlord of rent
after the expiration or earlier termination of the Term hereof shall not
constitute a consent to a month-to-month tenancy or result in a renewal. In the
event of such holdover, Tenant's occupancy of the Demised Premises, except as
aforesaid, shall be subject to all other conditions, provisions and obligations
of this Lease, but only insofar as the same are applicable to a month to month
tenancy. Such month to month tenancy shall be terminable by Landlord upon one
(1) month's notice to Tenant, and if Landlord shall give such notice, Tenant
shall quit and surrender the Demised Premises to Landlord as above provided. In
the event that (a) Tenant shall remain in possession of the Demised Premises at
the expiration or earlier termination of the Term hereof and Landlord shall not
have elected to deem Tenant to be occupying the Demised Premises as a tenant
from month-to-month or (b) Landlord shall terminate any month-to-month tenancy
of the Demised Premises and Tenant shall fail to quit and surrender the Demised
Premises to Landlord upon the termination date as above provided, then, in
either such event, Tenant shall be liable to Landlord for all losses, damages,
claims, costs and/or expenses incurred by Landlord by reason of Tenant's failure
to deliver timely possession of the Demised Premises to Landlord, including,
without limitation, any consequential and incidental damages so incurred by
Landlord, including, without limitation, any losses, damages, claims, costs
and/or expenses incurred in connection with or arising from the inability of
Landlord to lease and deliver possession of the Demised Premises, or any portion
thereof, to any third party and/or the termination or cancellation of any lease
of the Demised Premises, or any portion thereof to any third party.

     Section 25.03. Notwithstanding anything to the contrary contained in this
Lease, if Landlord shall be unable to provide possession of the Demised Premises
because of the holding-over or retention of possession of any prior tenant,
undertenant or occupants, or for any other reason whatsoever, Landlord shall not
be subject to any liability for the failure to give possession on the date
herein provided, if any, and the validity of this Lease shall not be impaired
under such circumstances, but the Term shall be extended proportionately until
after Landlord shall have given Tenant written notice that the Demised Premises
are ready for Tenant's occupancy. If permission is given to Tenant to enter into
possession of the Demised Premises or to occupy premises other than the Demised
Premises prior to the date specified as the commencement of the Term, Tenant
covenants and agrees that such occupancy shall be deemed to be under all of the
terms, covenants, conditions and provisions of this Lease.


                                      -32-



                        ARTICLE 26. AUTHORITY TO EXECUTE

     Section 26.01. Landlord and Tenant do hereby respectively represent to the
other that it has the capacity to enter into this Agreement.

                              ARTICLE 27. NOTICES

     Section 27.01. All notices to be given pursuant to this Lease shall be in
writing and sent by prepaid certified or registered U.S. mail, return receipt
requested, or by a recognized overnight courier service which requires
acknowledgment of receipt of delivery from addressee, to the address of the
parties below specified or at such other address as may be given by written
notice in the manner prescribed in this paragraph. Landlord's address for notice
shall be c/o National Realty & Development Corp., 3 Manhattanville Road,
Purchase, New York 10577. Tenant's address for notices given prior to the
Commencement Date shall be the address first set forth above for Tenant.
Tenant's address for notices given on or subsequent to the Commencement Date
shall be the address of the Demised Premises. Notice shall be deemed to be given
upon delivery to the U.S. Postal Service or recognized overnight courier
service. Unless Landlord shall otherwise inform Tenant in writing to the
contrary, any notice given to Tenant by National Realty & Development Corp.
shall, for the purposes of this Lease, be deemed to be a notice given to Tenant
by Landlord.

                               ARTICLE 28. BROKER

     Section 28.01. Tenant covenants, warrants and represents that it has dealt
with no broker except Colliers Houston & Co., 200 Cottontail Lane, Somerset, New
Jersey 08873 ("Colliers/Houston") respecting this Lease and that no
conversations, correspondence or negotiations were had with any broker except
with said Colliers/Houston concerning the renting or leasing of the Demised
Premises. Tenant shall hold Landlord and National Realty & Development Corp.
harmless and defend (by counsel satisfactory to Landlord) said parties against
any claims for a brokerage commission arising out of any conversations,
correspondence or negotiations with any broker except said Colliers/Houston.
Landlord shall pay any commissions owing to said Colliers/Houston in accordance
with separate agreement.

                        ARTICLE 29. MEMORANDUM OF LEASE

     Section 29.01. Tenant agrees not to record this Lease. The parties agree,
upon request of either, to execute, in recordable form, a short form lease
entitled "Memorandum of Lease", it being the intention of the parties that this
Lease will not be recorded, but only a memorandum thereof. Such short form lease
shall contain those provisions of this Lease as shall be desired in the
reasonable discretion of counsel for the parties hereto, provided that in no
event shall such short form lease contain any provisions relevant to the annual
minimum rent and/or additional rent payable under this Lease.

                      ARTICLE 30. AIR AND WATER POLLUTION

     Section 30.01.


                                      -33-



          (a) Tenant hereby indemnifies and saves Landlord harmless against any
claim, damage, liability, costs, penalties or fines which the Landlord may
suffer as a result of air, land or water pollution caused by Tenant in its use
or occupancy or manner of use or occupancy of the Demised Premises or in its
storage, handling, possession, transportation and/or disposal of any Hazardous
Waste or Hazardous Substance (as such terms are hereafter defined) within or
about the Demised Premises. Tenant covenants and agrees to notify Landlord
immediately of any claim or notice served upon it with respect to any such claim
that Tenant is causing air, land or water pollution; and Tenant, in any event,
will take immediate steps to halt, remedy and cure any pollution of air, land or
water caused by Tenant by its use of the Demised Premises, at its sole cost and
expense.

          (b) Landlord hereby represents to Tenant that Landlord has not
received any notice or directive, and is not aware of any claim, from any
environmental agency having jurisdiction over the Demised Premises regarding any
violation of the Environmental Statutes at the Demised Premises. Landlord agrees
to indemnify and hold the Tenant harmless from and against any and all claims
brought by any such environmental agency relating to the Demised Premises proven
to have arisen prior to the date that Landlord delivers possession of the
Demised Premises to Tenant. In no event shall Tenant be held responsible for the
actions of the prior occupant of the Demised Premises.

     Section 30.02.

          (a) Tenant shall comply with all state and federal environmental laws,
including the Spill Compensation and Control Act ("SCCA") (N.J.S.A. 58:10-23.11
et seq.) and Industrial Site Recovery Act ("ISRA") (N.J.S.A. 13:1K-6 et seq.) as
the same may have been or may hereafter be amended (collectively, the
"Environmental Statutes") as the same may relate to Tenant's use and occupancy
or manner of use and occupancy of the Demised Premises or any act or failure to
act of Tenant. Tenant shall supply Landlord on demand with any information
Landlord may require in order to enable Landlord to comply with the
Environmental Statutes, including, without limitation, ISRA, whether upon the
transfer of title or closing of operations at the Demised Premises, or for any
reason whatsoever.

          (b) Tenant shall not use the Demised Premises for the purpose of
refining, producing, storing, handling, transferring, processing or transporting
said "Hazardous Substances", as such term is defined in N.J.S.A. 5B:10-23.llb(k)
of the New Jersey Spill Compensation and Control Act (N.J.S.A. 58:10-23.11 et
seq.), except in de minimus quantities in strict compliance with the
requirements of all applicable governmental authorities.

          (c) Tenant shall not use the Demised Premises to generate,
manufacture, refine, transport, treat, store, handle or dispose of "Hazardous
Substances", or "Hazardous Wastes", as such terms are defined in N.J.A.C.
7:1-3.3.

          (d) Tenant shall not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part, a releasing,
spilling, leaking, pumping, emitting, pouring, emptying or dumping of a
"Hazardous Substance", as such term is defined in N.J.S.A. 58:10-23.llb(k) into
waters of the State of New Jersey or onto the lands from which it might flow or
drain into said waters, or into waters outside the jurisdiction of the State of
New Jersey where


                                      -34-



damage may result to the lands, waters, fish, shellfish, wildlife, biota, air
and other resources owned, managed, held in trust or otherwise controlled by the
State of New Jersey. Landlord acknowledges that proper disposal of a Hazardous
Substance in accordance with the requirements of all applicable governmental
authorities shall not be a violation of this Section 30.02 (d).

          (e) Tenant shall not use the Demised Premises as a "Major Facility",
as such term is defined in N.J.S.A. 58:10-23.lb(1).

          (f) Tenant shall not install nor permit to be installed in the Demised
Premises friable asbestos or any substance containing asbestos and deemed
hazardous by federal or state regulations respecting such material. Landlord
acknowledges that the Demised Premises contains asbestos and Tenant shall not be
responsible in any manner therefor.

     Section 30.03. Tenant represents that Tenant has not received a summons,
citation, directive, letter or other communication, written or oral, from the
New Jersey Department of Environmental Protection concerning any intentional or
unintentional action or omission on Tenant's part resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying or dumping of "Hazardous
Substances", as such term is defined in N.J.S.A. 58:10-23.llb(k), into the
waters or onto the lands of the State of New Jersey, or into the waters outside
the jurisdiction of the State of New Jersey resulting in damage to the lands,
waters, fish, shellfish, wildlife, biota, air and other resources owned,
managed, held in trust or otherwise controlled by the State of New Jersey.

     Section 30.04.

          (a) In the event that Tenant does not expeditiously proceed with any
compliance required by any State or Federal authority under the Environmental
Statutes, Landlord may elect to undertake such compliance in order to protect
its interest in the Demised Premises. Any monies expended by Landlord in efforts
to comply with any environmental statute (including but not limited to: the
costs of hiring consultants, undertaking sampling and testing, performing any
cleanup necessary or useful in the compliance process and attorney's fees),
together with interest at the maximum rate permitted by law, will be added to
and payable with the next payment of annual minimum rental due from Tenant, or
will be payable on demand of Landlord.

          (b) Tenant will provide Landlord with all information as to the use or
manner of use of the Demised Premises by Tenant, and an environmental audit of
the Demised Premises which is designed to describe any materials on the Demised
Premises which would require a filing and/or any disclosure under the
Environmental Statutes in the event of any transfer or closure, or which would
require remedial action under any other Environmental Statutes.

          (c) In the event that Tenant receives notice from the Department of
Environmental Protection or any other governmental authority or bureau having or
asserting jurisdiction thereover under SCCA of a discharge on or about the
Demised Premises, or any other notice of violation of the Environmental Statutes
or any alleged or claimed violation thereof, Tenant will immediately send a copy
of such notice to Landlord and Tenant will


                                      -35-



promptly proceed to remedy the condition described in the notice. Tenant shall
take all action necessary to ensure that the SCCA administrator does not spend
Spill Fund monies to clean up the site. In the event that the SCCA administrator
should spend money cleaning up property owned by Landlord due to Tenant's use or
occupancy or manner of use or occupancy of the Demised Premises or the act or
failure to act of Tenant, and/or a lien is imposed on the Demised Premises or
any portion of the parcel of which it forms a part or any property of Landlord,
Landlord may take such actions as it deems necessary to remove such lien,
including satisfaction thereof, or may require it to be bonded by Tenant, and
Tenant agrees to defend, indemnify and hold Landlord free and harmless from and
against all loss, costs, damage and expense (including attorney's fees and
costs) Landlord may sustain by reason of the assertion against Landlord by any
party of any claim in connection therewith. Landlord may demand such security,
in amounts and types which it deems appropriate in its sole discretion, for the
purpose of protecting its property from any such lien or to guarantee cleanup.

                            ARTICLE 31. SUBDIVISION

     Section 31.01. Landlord shall have the right at any time during the Term or
any extension term hereof, and Tenant hereby consents thereto, to subdivide Lot
No. 46.24 into such additional lot or lots as Landlord may in its sole
discretion elect and/or to expand Lot No. 46.24 as Landlord may in its sole
discretion elect, provided that the whole of the Building shall remain entirely
within one such subdivision. Notwithstanding anything contained in this Lease to
the contrary, in the event of any such subdivision or expansion of Lot No. 46.24
by Landlord then, at Landlord's option, (i) references in this Lease to Lot No.
46.24 may be deemed to be to the original (pre-subdivision or pre-expansion) Lot
No. 46.24 or any portion(s) thereof of which the Demised Premises forms a part,
and (ii) in calculating Tenant's proportionate share(s), Landlord may use as the
denominator of the fraction(s) representing Tenant's proportionate share(s) the
building(s) or portions thereof within said original Lot No. 46.24 or any
portion(s) thereof of which the Demised Premises forms a part. In the event of
such subdivision or expansion, Tenant agrees to execute an agreement in
recordable form setting forth the description of Lot No. 46.24 as so subdivided
or expanded and as renamed and/or renumbered.

                ARTICLE 32. THERE IS NO ARTICLE 32 IN THIS LEASE

                       ARTICLE 33. FINANCING REQUIREMENTS

     Section 33.01. Landlord intends to procure the funds for construction of
the Center from one or more lenders. If any such lender disapproves the credit
rating of Tenant for purposes of such financing, or if any such lender shall
require or suggest changes in this Lease as a condition of its approval of this
Lease for such financing and if within ten (10) days following notice from
Landlord (a) Tenant fails to execute such further assurances and/or guarantees
which are stated by Landlord as intended to be necessary to secure the approval
of Tenant's credit rating, or (b) if Tenant fails to execute, acknowledge and
deliver any amendments to this Lease setting forth the changes which are stated
by Landlord to be needed in connection with the approval of this Lease for
purposes of such financing, or if, for any reason, other than Landlord's willful
default, such financing in amount and interest rate satisfactory to Landlord
cannot be obtained, Landlord may terminate this Lease at any time prior to
Landlord's giving of notice of substantial completion. If this Lease be
terminated, it shall become null and void and the parties shall be automatically


                                      -36-



released, as of the date of termination, from any and all liability, rights or
obligations hereunder, except that Landlord shall return any security deposited
by Tenant hereunder.

                      ARTICLE 34. RELATIONSHIP OF PARTIES

     Section 34.01. Nothing herein contained shall be deemed or construed by the
parties hereto, nor by any third party, as constituting the Landlord a partner
of Tenant in the conduct of Tenant's business, or as creating the relationship
of principal and agent or joint venturers between the parties hereto, it being
the intention of the parties hereto that the relationship between them is and
shall at all times be and remain that of Landlord and Tenant only. Tenant agrees
upon the demand of Landlord to deliver to Landlord and any mortgagee of Landlord
the most recently available financial statements of Tenant and any guarantor of
this Lease, certified to by a certified public accountant, and updated to the
extent reasonably requested by Landlord or any such mortgagee.

                              ARTICLE 35. CAPTIONS

     Section 35.01. The Article captions contained herein are for convenience
only and do not define, limit, or construe the contents of such Articles and are
in no way to be construed as a part of this Lease.

                            ARTICLE 36. DEFINITIONS

     Section 36.01. Words of any gender used in this Lease shall be held to
include any other gender, and words in the singular number shall be held to
include the plural, when the sense requires.

     Section 36.02. If any provision of this Lease or the application thereof to
any person or circumstances shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each provision of this Lease shall be valid
and be enforced to the fullest extent permitted by law.

                          ARTICLE 37. ENTIRE AGREEMENT

     Section 37.01. This instrument of Lease contains the entire and only
agreement between the parties concerning the Demised Premises. No prior oral or
written statements or representation, if any, of any party hereto or any
representative of a party hereto, not contained in this instrument, shall have
any force or effect. This Lease shall not be modified in any way, except by a
writing executed by Landlord and Tenant. No oral agreement or representations
shall be deemed to constitute a lease other than this agreement. This agreement
shall not be binding until it shall have been executed and delivered by Landlord
and Tenant. The submission of this Lease to Tenant prior to its execution by
Landlord shall not be an offer to lease.

                       ARTICLE 38. SUCCESSORS IN INTEREST

     Section 38.01. All provisions herein contained shall bind and inure to the
benefit of the respective parties hereto, their heirs, personal representatives,
successors and assigns, as the case


                                      -37-



may be. In the event Landlord or any successor-lessor (owner) of the Demised
Premises shall convey or otherwise dispose of the Demised Premises and/or the
Center and/or the Tax Lot of which the Demised Premises forms a part, all
liabilities and obligations of Landlord or such successor-lessor (owner), as
Landlord under this Lease shall terminate upon such conveyance or disposal.

     Section 38.02. If Landlord, or any successor in interest to Landlord, shall
be an individual, joint venture, tenancy-in-common, trustee, trust, estate,
executor, conservator, personal representative, limited liability company,
limited liability partnership, partnership, general or limited, firm, company or
corporation, there shall be no personal liability on the part of such
individual, trustee, executor, conservator or personal representative or on the
part of any members, managers, partners, directors, officers and/or shareholders
of such joint venture, tenancy-in-common, trustee, trust, estate, executor,
conservator, personal representative, limited liability company, limited
liability partnership, partnership, general or limited, firm, company or
corporation or on the part of such joint venture, tenancy-in-common, trustee,
trust, estate, executor, personal representative, limited liability company,
limited liability partnership, partnership, general or limited, firm, company,
or corporation as to any of the provisions, covenants or conditions of this
Lease. Tenant hereby acknowledges that it shall look solely to the real property
interest of Landlord in Lot No. 46.24 (or, in the event of a subdivision of said
Lot, such subdivided portion thereof which includes the Demised Premises) for
the satisfaction or assertion of any claims, rights and remedies of Tenant
against Landlord, in the event of breach by Landlord of any of the terms,
provisions, covenants or conditions of this Lease.

                              ARTICLE 39. SECURITY

     Section 39.01. Tenant has delivered to Landlord a letter of credit in the
amount of TWO HUNDRED SEVENTEEN THOUSAND AND 00/100 ($217,000.00) DOLLARS as
security for the faithful performance and observance by Tenant of the terms,
provisions, covenants and conditions of this Lease, including without limitation
the completion of the Tenant Allowance Work and the Tenant Improvements pursuant
to the provisions of Article 5 of this Lease. Landlord and Tenant acknowledge
and agree that upon completion of the Tenant Improvements and delivery to
Landlord of the documentation required pursuant to Subparagraph (C) of Section
5.05 of this Lease, said $217,000.00 Letter of Credit shall be reduced to the
amount of $46,110.00, which amount shall thereafter serve as the security
deposit under this Lease. At any time during which Landlord shall be holding a
letter of credit as the security deposit under this Lease, Tenant shall have the
right to substitute a cash deposit for said letter of credit by delivering to
Landlord a check in the amount of the letter of credit then being held by the
Landlord. Upon receipt and clearance of the funds, Landlord shall return the
letter of credit to Tenant for cancellation. Thereafter, all references herein
to the security deposit herein shall be deemed to refer to such cash security
deposit.

     Upon delivery of this Lease to Landlord as executed by Tenant, Tenant shall
deliver to Landlord an irrevocable, unconditional Letter of Credit from Fleet
Bank (or another money center bank reasonably acceptable to Landlord), in the
form annexed hereto as Exhibit C in the amount of $217,000.00, which letter of
credit shall serve as security for the faithful performance and observance by
Tenant of the terms, provisions, covenants and conditions of this Lease. Said
letter of credit shall name National Realty & Development Corp. as sole
beneficiary and shall


                                      -38-



expire on the Expiration Date hereof; provided, however, said letter of credit
may provide that it will expire prior to the Expiration Date (but in no event
prior to the one (1) year anniversary of the Commencement Date) if said letter
of credit is renewed by Tenant, without amendment, and evidence of such renewal
is delivered to Landlord prior to that date which is thirty (30) days prior to
the expiration date thereof. The letter of credit shall provide that partial
drawings shall be permitted. If, for any reason, such letter of credit shall
expire without National Realty & Development Corp. (as agent of Landlord) having
drawn thereon for any reason, including, without limitation, the inadvertent
failure to do so by National Realty & Development Corp., then Tenant shall
deliver to National Realty & Development Corp. a replacement of such letter of
credit or a cash deposit to bring the security deposit required hereunder to the
appropriate balance. Said letter of credit shall specifically provide that
Landlord and National Realty & Development Corp. will receive not less than
forty-five (45) days written notice of the election of the issuing bank to not
renew the same. Whether or not Landlord or National Realty & Development Corp.
shall receive notice of cancellation or non-renewal of the letter of credit,
Tenant shall deliver to National Realty & Development Corp. a replacement of
such letter of credit prior to that date which is thirty (30) days prior to the
cancellation date, expiration date or non-renewal date of the letter of credit.
Tenant's failure to deliver evidence of the renewal of the letter of credit or a
replacement letter of credit as aforesaid shall, in either case, be deemed a
default under this Lease, and without further notice, National Realty &
Development Corp. shall be entitled to draw upon the expiring letter of credit
in the entire amount thereof.

     In the event Tenant defaults in respect of any of the provisions, covenants
or conditions of this Lease, including, but not limited to, defaults in the
payment of annual minimum rent or additional rent, beyond the applicable notice
and cure periods provided for herein, or in the event that that Tenant has
vacated, abandoned or deserted the performance of the Tenant Improvements or is
not diligently pursuing the same to completion or Tenant has failed to pay for
the furnishings, installation or construction of Tenant Improvements (including
the Tenant Allowance Work) or any portion thereof, or in the event that Tenant
has failed to complete the Tenant Improvements by the Tenant Improvements
Completion Date, then National Realty & Development Corp. may, on Landlord's
behalf, from time to time draw upon the security deposit and use, apply, or
retain the whole or any part thereof to the extent required for the payment of
any annual minimum rent (including payment of annual minimum rental previously
abated as set forth in Section 5.05 of this Lease) and additional rent or any
other sum as to which Tenant is in default or for any sum which Landlord may
expend or may be required to expend by reason of Tenant's default, beyond the
applicable notice and cure periods provided herein, in respect of any of the
provisions, covenants and conditions of this Lease, including, but not limited
to, reasonable counsel fees and other collection charges, or with respect to any
damages or deficiency in the re-letting, repairing or altering of the Demised
Premises, whether such damages or deficiency accrued before or after summary
proceedings or re-entry by Landlord, or in connection with the removal of the
Installations (hereinafter defined) (the amount which National Realty &
Development Corp. may draw determined as set forth in this sentence is
hereinafter referred to as the "default amount").

     In the event National Realty & Development Corp. (as agent of Landlord)
shall draw upon a letter of credit deposited as a security deposit hereunder and
the amount drawn by National Realty & Development Corp. shall be in excess of
the default amount, the excess shall be held by in a non-interest-bearing
account at a commercial bank or financial institution as a


                                      -39-



security deposit hereunder to be used for the purposes set forth herein. After
the expiration of the Lease, and after delivery of entire possession of the
Demised Premises to Landlord, and after applying or retaining any portion of the
security required to cure any and all defaults by Tenant under this Lease, the
letter of credit and the cash security deposit, if any, then held by Landlord
shall be returned to Tenant without interest. If, due to Tenant's default
hereunder, Landlord shall be entitled to apply or retain any portion of said
security, Tenant shall, within five (5) days following demand, secure for the
sole benefit of Landlord, a new or additional letter of credit naming Tenant as
beneficiary and complying with the requirements set forth herein or deliver to
Landlord a cash security deposit sufficient to comply with this Section,
including the required amount. Tenant shall not assign or encumber the security
deposited hereunder and neither Landlord or its successors or assigns shall be
bound by any such assignment or encumbrance. In the absence of evidence
satisfactory to Landlord of any assignment of the right to receive the security,
or the remaining portion thereof, Landlord may return the security to the
original tenant regardless of any number of assignments of the Lease itself. In
the event of a sale of the Demised Premises or larger premises of which the
Demised Premises form a part, Landlord shall have the right to transfer the cash
security and the beneficiary rights under any letter of credit to the purchaser
who shall hold the same for the benefit of Tenant in accordance with the terms
of this Lease, and Landlord and National Realty & Development Corp., after
giving notice to Tenant, shall be deemed released by Tenant from all liability
for the return of such security and Tenant shall look solely to the new owner
for the release or the return thereof. Tenant shall, upon request, deliver
confirmation of said transfer of beneficiary rights and a replacement letter of
credit naming the transferee as beneficiary if necessary or if requested.
Landlord agrees to return any letter of credit it is then holding with respect
to this Lease to the issuing bank if required by the issuing bank to receive a
replacement letter of credit. No holder of any mortgage upon the Demised
Premises or the larger property of which the Demised Premises forms a part shall
be responsible in connection with the security deposited hereunder unless such
mortgagee shall have in fact received such security or be named beneficiary
thereof and acknowledged such receipt or beneficiary status in writing to
Tenant. In the event of a foreclosure of the Demised Premises, or the larger
property of which the Demised Premises forms a part, Tenant shall, on demand of
mortgagee, reissue the letter of credit in compliance with this Section, naming
the mortgagee, or such other party as may be designated by mortgagee, as the
sole beneficiary. Tenant acknowledges that Tenant is to perform certain
obligations under this Lease prior to the Commencement Date of the term of this
Lease and that the security deposit may be applied by Landlord (or by National
Realty & Development Corp. on behalf of Landlord) in the event Tenant shall
default under any such obligations beyond any applicable notice and cure periods
notwithstanding that the Commencement Date may not yet have occurred.

                        ARTICLE 40. EXTENSION OPTION(S)

     Section 40.01. Tenant shall have the option, provided it is not in default
hereunder, to extend the Term for TWO (2) successive additional term of FIVE (5)
years each, upon the same terms and conditions as provided herein, except that
the annual minimum rental during said extension period shall be as provided
below, and except that Tenant shall have no further extension options. Tenant
shall give written notice to Landlord not less than twelve (12) months prior to
the last day of the prior term of its election to extend the Term hereof, or
such option shall be deemed waived. If Tenant shall exercise such extension
option(s), the parties will, at the request of either, execute an agreement in
form for recording, evidencing such extension. If


                                      -40-



Tenant shall exercise such extension option(s), all references in this Lease to
the Term hereof shall be deemed to mean the term as so extended, except where
expressly otherwise provided.

     Section 40.02. As of the first day of each extension term ("adjustment
date"), the annual minimum rental shall be adjusted by multiplying the annual
minimum rental payable hereunder during the last Lease Year of the prior Term,
times a fraction having as its numerator the "Index" (hereinbelow defined) as of
the adjustment date and as its denominator the Index in effect upon the
commencement date of the initial term hereof; provided, however, the annual
minimum rental payable subsequent to the adjustment date shall not be less than
twenty-five (25%) percent greater than the annual minimum rental payable during
the last preceding Lease Year of the prior Term.

     Section 40.03. The "Index" shall be defined as the United States Department
of Labor, Bureau of Labor Statistics, "Consumer Price Index-All Urban Consumers
- - (CPI-U) N.Y., N.Y. - Northeastern N.J. (1982-84=100)". If publication of such
Index shall be discontinued, the adjustments in the annual minimum rental
provided for in this Lease shall thereafter be computed on the basis of such
other official price index as shall be most nearly comparable thereto, and
conversion tables, if any, issued upon the promulgation of such other official
index, are to be used where applicable in making the computation hereunder.

     IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the
day and year first above written.

ATTEST:                                 46.24 ASSOCIATES L.P.


                                        By: MIDDLESEX REALTY CORP.,
                                            General Partner


                                        By: /s/ Robert C. Baker
                                            -----------------------------------
                                        Title: President

                                                       (LANDLORD)


                                        PTC THERAPEUTICS, INC.


                                        By: /s/ Stuart Peltz
                                            ------------------------------------
                                        Title: PRESIDENT

                                                        (TENANT)


                                      -41-



                                    EXHIBIT B

                          WORK LETTER TO BE ATTACHED TO
                        LEASE WITH PTC THERAPEUTICS, INC.
                               100 CORPORATE COURT
                            MIDDLESEX BUSINESS CENTER
                          SOUTH PLAINFIELD, NEW JERSEY

Landlord agrees to perform the Landlord's Work set forth in this Exhibit B. Any
work not expressly specified herein and any work necessary to comply with codes
attributable to Tenant's use shall be furnished and installed at the sole cost
and expense of Tenant. Except as specifically set forth below, any existing
construction within the Demised Premises shall be accepted by Tenant in "as is"
condition in accordance with the provisions of Section 5.01 of this Lease.
Landlord shall:

1.   Provide a watertight roof and windows.

2.   INTENTIONALLY OMITTED.

3.   Replace stained or damaged ceiling tiles.

4.   Repair exterior fence enclosure.

5.   Provide a canopy over the side entrance.

6.   Replace broken windows and glass doors.

7.   Provide HVAC in good working order.

8.   Relamp light fixtures as needed.

9.   The blue or brown mesh remaining along the window line in the lab and in
     the cooler will be removed.

10.  The Landlord will clean or replace all HVAC distribution supply or return
     duct (flexible pipes), VAV boxes and registers, diffusers or grills.

11.  Landlord shall remove the asbestos linings present in the fume hoods
     located in the Demised Premises.

12.  The existing acid neutralization tank will be put by Landlord into clean
     operating condition consistent with all applicable governmental
     regulations;

                                  MISCELLANEOUS

A. All "Tenant Extras" furnished by Landlord as may be hereafter agreed to,
shall be computed at Landlord's cost, plus a twenty-one (21%) percent
administrative fee.


                                      -44-



B. Credits to Tenant based upon deletions and reductions below Building standard
set forth above, shall be computed based upon Landlord's unit cost therefor,
without factor of overhead and profit.

C. All prices, if any, set forth in this Work Letter are predicated upon
quotations now in the hands of Landlord. Such quotations, by their terms, expire
at various intervals and accordingly these prices are subject to variation based
upon market conditions following the expiration of such quotations.

D. All prices are subject to inclusion of applicable taxes, but Landlord's
overhead and profit shall be computed without regard to such taxes.

E. Landlord shall furnish Tenant with a statement(s) computing the net Tenant
extras or credits due to Landlord or Tenant, as the case may be. Any amount due
to Landlord shall be due and payable in full simultaneously with the delivery by
Tenant to Landlord of the authorization for such work. Any credit due Tenant
shall give rise to a reduction in the first installments of minimum rent and
additional rent until such credit has been exhausted.

F. Prior to or promptly after execution of this Lease, Tenant shall furnish
Landlord with design criteria and specifications necessary to enable Landlord to
comply with its obligations above. All authorizations, deletions and
implementations of the foregoing Work Letter shall be in writing and confirmed
by authorized representatives of Landlord and Tenant.

G. If there shall be any conflict between the provisions of this Work Letter and
the final approved Plans, the final approved Plans shall govern and control.

H. Landlord reserves the right to substitute for any materials and equipment
specified herein, materials and equipment of substantially equal quality,
provided Tenant's architect approves of the same, which approval shall not be
unreasonably withheld or delayed.

I. Unless specifically stated in this Exhibit B or this Lease to the contrary,
and notwithstanding anything contained on any plans or drawings, Tenant, and not
Landlord, shall be responsible for furnishing and installing at its sole cost
and expense any and all furniture, Tenant fixtures, appliances, shelving,
cabinetry, phone systems, computer wiring and the like for the Demised Premises
in accordance with the provisions of this Lease.


                                      -45-



                                    EXHIBIT C

                                     [BANK]

[NAME ALL LANDLORDS]
c/o National Realty & Development Corp.
3 Manhattanville Road
Purchase, New York 10577

RE: Irrevocable Letter of Credit No. _________

Accountee: [Name of Tenant]

Gentlemen:

     We hereby issue our Irrevocable Letter of Credit No. _____________ in favor
of [Name All Landlords] at the request of [Name of Tenant] whose address is
________________ __________________________________, for an aggregate amount of
[Amount as required by Lease] and _____/100 Dollars (U.S. $___) effective
immediately.

     Funds are available against your signed draft(s) drawn on [Name of Bank]
signed by an authorized representative of National Realty & Development Corp.
mentioning this Letter of Credit No. _____ accompanied by a written statement
signed by an authorized representative of National Realty & Development Corp.
requesting to draw upon a specified dollar amount on Letter of Credit No.
________ as follows:

          "This drawing in the amount of $_______ is pursuant to Lease dated
          ___________________, 2000 between [Name All Landlords], as Landlord,
          and [Name of Tenant], as Tenant."

     This Letter of Credit shall expire on [Expiration Date of the Lease].

     The beneficiaries named above shall be given not less than thirty (30) days
written notice of the cancellation or non-renewal of the Letter of Credit. The
beneficiaries of this Letter of Credit may draw upon the entire amount of the
Letter of Credit if they shall receive notice of its cancellation or non-renewal
or if it shall expire prior to the Expiration Date (as defined in the Lease) of
the Lease. Partial drawings are permitted under this Letter of Credit.

                                     [BANK]


                                      -46-



                                    EXHIBIT D

                        SUBORDINATION, NONDISTURBANCE AND
                              ATTORNMENT AGREEMENT

                                  by and among

                        PTC THERAPEUTICS, INC., as Tenant

                                       and

                      46.24 ASSOCIATES, L.P., as Mortgagor

                                       and

              THE TRAVELERS LIFE AND ANNUITY COMPANY, as Mortgagee

                                Dated: June, 2000

Record and Return to: Windels, Marx, Davies & Ives
                      120 Albany Street Plaza
                      New Brunswick, New Jersey 08901
                      Attn: Howard P. Lakind, Esq.


                                      -47-



             SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

     THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT, made this ___
day of April, 2000 by and among

     PTC THERAPEUTICS, INC., a Massachusetts corporation, having its principal
office at 2 Chestnut Street, Grafton, Massachusetts 01519 (the "Tenant"),

     46.24 ASSOCIATES, L.P., a Delaware limited partnership with its principal
office located 3 Manhattanville Road, Purchase, New York 10577 (the
"Mortgagor"),

     and

     THE TRAVELERS LIFE AND ANNUITY COMPANY, having an office located at One
Tower Square, 2 SHS, Hartford, Connecticut 06183 (the "Mortgagee").

                                   WITNESSETH:

     WHEREAS, the Tenant has entered into a certain Lease dated ______________,
2000 (the "Lease"), with Mortgagor as landlord, covering all or a portion of
those premises (the "Leasehold Premises") in the Borough of South Plainfield,
County of Middlesex, State of New Jersey, all as more particularly described in
SCHEDULE "A" attached hereto and made a part hereof (the "Mortgaged Premises");
and

     WHEREAS, the Mortgagee has agreed to make or has made a mortgage loan in
the aggregate principal amount of $4,609,851.06 to the Mortgagor (the "Loan"),
which Loan is secured by a certain First Mortgage and Security Agreement dated
May 16, 1984, as modified by certain Note and Mortgage Modification Agreement,
dated as of February 14, 1995 but effective as of May 1, 1994 and modified by
that certain Mortgage Modification Agreement dated as of April 30, 1999 granted
by the Mortgagor to the Mortgagee upon the Mortgaged Premises (the "Mortgage");
and

     WHEREAS, the execution and delivery of this Subordination, Nondisturbance
and Attornment Agreement is a condition to the making of the Loan.

     NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) by each
party in hand paid to the other, receipt of which is hereby acknowledged, and in
consideration of the premises and. the mutual covenants and agreements
hereinafter contained, the parties hereto, intending to be legally bound hereby,
hereby agree as follows:

1.   The Tenant hereby covenants and agrees:

     (a)  subject to this Agreement, the Lease and the Tenant's leasehold estate
          and any and all estates, options, liens and charges therein contained
          or created thereby are, and shall b, and remain, subject and
          subordinate in all respects to the lien and effects of the Mortgage
          and to all of the terms, conditions, and provisions thereof, with the
          same force and effect as if the Mortgage had been executed, delivered
          and duly recorded prior to the execution and delivery of the Lease;


                                      -48-



     (b)  from time to time, upon request by the Mortgagee, it shall forthwith
          provide the Mortgagee within ten (10) business days of such request
          with an estoppel certificate certifying that, to the best of its
          knowledge, no defaults, claims, offsets or events, or situations
          which, with the passage of time, could become a default or the basis
          for a claim or offset against the Mortgagor by the Tenant, exist under
          the Lease or, if the same exist, certifying and describing such items
          as are in existence;

     (c)  it will forward to the Mortgagee copies of any notice, claim or demand
          given or made by the Tenant to or on the Mortgagor, in all cases
          concurrently with forwarding same to the Mortgagor, such copies to be
          provided to the Mortgagee by the same method of sending or mailing as
          the statement, notice, claim or demand was made or given to or on the
          Mortgagor;

     (d)  without the prior written consent of the Mortgagee (i) no rent or
          other sums due under the Lease shall be paid more than thirty (30)
          days in advance of the due date therefor established by the Lease,
          except the security deposit, if any, (ii) no modifications shall be
          made in the provisions of the Lease nor shall the term be extended or
          renewed, except as provided therein, (iii) the Lease shall not be
          terminated except as provided therein and in this agreement nor shall
          the Tenant tender or accept a surrender of the Lease, (iv) it shall
          only sublet the Leasehold Premises or assign the Tenant's interest in
          the Lease in accordance with the provisions of said Lease, and (v) it
          shall not subordinate the Lease except to the Mortgage;

     (e)  in the event of any act or omission by the Mortgagor which would give
          the Tenant the right to terminate the Lease or to claim a partial or
          total eviction, reduce rents or to credit or offset any amounts
          against future rents, the Tenant will not exercise such right (i)
          until it shall have given written notice of such act or omission to
          the Mortgagee, and (ii) until a reasonable time for remedying such act
          or omission shall have elapsed following such giving of notice, and if
          it so elects, the Mortgagee shall have the right to cure any default
          by the Mortgagor under the Lease, including, if necessary to cure any
          such default, the right of access to the Leasehold Premises in
          accordance with the terms of the Lease;

     (f)  notices required to be given to the Mortgagee under this Agreement
          will be given to any successor-in-interest of the Mortgagee under the
          Mortgage provided that, prior to the event for which notice is
          required to be given to the Mortgagee, such successor-in-interest of
          the Mortgagee shall have given written notice to the Tenant of its
          acquisition of the Mortgagee's interest therein, and designated the
          address to which such notice is to be directed;

     (g)  if the holder of the Mortgage (as now or hereafter constituted), or
          anyone claiming from or through any such holder, shall enter into and
          lawfully become possessed of the Mortgaged Premises, or shall succeed
          to the rights of the Mortgagor under the Lease, either through
          foreclosure of said Mortgage or otherwise howsoever, (i) the Tenant
          shall attorn to, and recognize, such holder or


                                      -49-



          anyone claiming from or through such holder as its landlord under the
          Lease for the unexpired balance of the term of the Lease and any
          extension or renewal thereof, subject to all of the terms and
          conditions of the Lease provided such successor landlord recognizes
          Tenant's rights under the Lease, and (ii) the Tenant shall make all
          payments payable by the Tenant under the Lease directly to the holder
          of the Mortgage upon such holder's written instructions to the Tenant;
          and if, by operation of law, tie institution of any action or other
          proceedings by the Mortgagee under the Mortgage or the entry into and
          taking possession of the Mortgaged Premises shall result in the
          cancellation or termination of the Lease or the Tenant's obligations
          thereunder, the Tenant shall, upon request, execute and deliver a new
          lease of the Leasehold Premises pursuant to the Lease, containing the
          same terms and conditions as the Lease, except that the term and any
          extension thereof shall be the unexpired term and unexpired extended
          term or terms of the Lease as of the date of execution and delivery of
          said new lease;

     (h)  the Mortgagee shall have no responsibility, liability or obligation to
          cure any defaults by the Mortgagor under the Lease, nor be subject to
          claims, defenses or offsets under the Lease or against the Mortgagor
          possessed by the Tenant and which arose or existed prior to actual
          foreclosure of the Mortgage or recording of a deed in lieu of
          foreclosure or entry under and taking possession of the Mortgaged
          Premises by the Mortgagee except to the extent such claim, defense or
          offset is continuing as of the date of Mortgagee takes possession of
          the Mortgaged Premises. If the Mortgagee forecloses the Mortgage or
          takes title to the Mortgaged Premises pursuant to a deed in lieu of
          foreclosure or enters upon and takes actual possession of the
          Mortgaged Premises, the Mortgagee or any other purchaser at such
          foreclosure sale shall do so free and clear of all prior defaults,
          claims, defenses or offsets which the Tenant might have against any
          prior landlord (including the Mortgagor), and shall not be liable or
          responsible to the Tenant for any act or omission of any prior
          landlord (including the Mortgagor) except to the extent such act is
          continuing as of the date the Mortgagee succeeds to the interest of
          Landlord under the Lease, or be responsible or liable far any deposit
          or security which was delivered by the Tenant to any prior landlord
          (including the Mortgagor) but which was not subsequently delivered to
          the Mortgagee, or be bound by any rent or additional rent which the
          Tenant might have paid for more than the current month to any prior
          landlord (including the Mortgagor) but which was not subsequently
          delivered to the Mortgagee, or be obligated or liable to the Tenant
          with respect to the construction and completion of any improvements on
          the Mortgaged Premises for the Tenant's use, enjoyment or occupancy,
          or be bound by any restriction on competition beyond the Mortgaged
          Premises contained in the Lease, or be bound by any amendment or
          modification of the Lease made without the Mortgagee's prior written
          consent;

     (i)  the institution of any action or other proceedings by the Mortgagee
          under the Mortgage in order to realize upon the Mortgagor's interest
          in the Mortgaged Premises shall not, by operation of law or otherwise,
          result in the cancellation or termination of the Lease or the Tenant's
          obligations thereunder;


                                      -50-



     (j)  any right of Tenant to make any claim or receive any proceeds arising
          out of taking by eminent domain shall be subject and subordinate to
          the rights of the Mortgagee; and

     (k)  Tenant hereby indemnifies and saves Mortgagee harmless against any
          claim, damage, liability, costs, penalties or fines which the
          Mortgagee may suffer as a result of air, land or water pollution
          caused by Tenant in its use or occupancy or manner of use or occupancy
          of the Mortgaged Premises or in its storage, handling, possession,
          transportation and or disposal of any hazardous or toxic substances,
          waste or materials (including, without limitation, PCB's or asbestos)
          within the Mortgaged Premises.

2.   The Mortgagee hereby agrees:

     (a)  so long as the Tenant is not in default (beyond all applicable periods
          given the Tenant under the Lease to cure such default) and shall pay
          the rents and additional rents thereunder, and shall fully comply with
          and perform all the terms, covenants, conditions and provisions of the
          Lease on the part of the Tenant thereunder to be complied with and
          performed (i) the Tenant's possession and occupancy of the Leasehold
          Premises and the Tenant's rights and privileges under the Lease, or
          any extension or renewal thereof which may be effected in accordance
          with the terms of the Lease, shall not be disturbed by the Mortgagee
          or any successor-in-interest to the Mortgagee; (ii) the Mortgagee
          shall not join the Tenant as party to any action or proceeding brought
          as a result of a default under the Mortgage for the purposes of
          terminating the Tenant's interest and estate under the Lease, and
          subject further to the condition that the Mortgagee shall not be bound
          by any rent or other payment which the Tenant might have paid more
          than thirty (30) days in advance of the time stipulated for payment
          under the Lease or by any amendment or modification of the Lease made
          without its written consent; and

     (b)  if the interest of the Mortgagor shall vest in the Mortgagee by reason
          of foreclosure or any other procedures brought by it, or in any other
          manner, the Mortgagee and its successors-in-interest shall have the
          option, but not the obligation to cure any defaults of the Mortgagor,
          and, upon such vesting, agrees to be bound by all of the undischarged
          obligations of Mortgagor under the Lease occurring after such
          foreclosure or other action.

3.   The Tenant hereby represents and warrants that:

     (a)  the Lease is in full force and effect;

     (b)  neither the Tenant nor, to the best knowledge of the Tenant, the
          Mortgagor is in default in the performance of or compliance with any
          provision of the Lease;

     (c)  the Tenant has not received any notice of default or termination of
          the Lease;


                                      -51-



     (d)  the Lease is a complete statement of the agreement of the parties
          thereto with respect to the leasing of the Leasehold Premises;

     (e)  the Tenant has no option under the Lease to purchase all or any
          portion of the Mortgaged Premises; and

     (f)  the Tenant is the sole owner of the leasehold estate created thereby.

4.   The Tenant acknowledges that Mortgagor has executed or will execute an
     Absolute Assignment of Leases and Rents to the Mortgagee. The Mortgagor
     hereby irrevocably authorizes and directs the Tenant, upon receipt from the
     Mortgagee of written notice to do so, to pay all rents and other monies
     payable by the Tenant under the Lease to or at the direction of the
     Mortgagee. The Mortgagor irrevocably releases the Tenant from any liability
     to the Mortgagor for all payments so made, and the Mortgagor agrees to
     defend, indemnify and hold the Tenant harmless from and against any and all
     claims, demands, losses, or liabilities asserted by, through, or under the
     Mortgagor (except by the Mortgagee) for any and all payments so made. The
     Tenant agrees that upon receipt of such notice it will pay all monies then
     due and becoming due from the Tenant under the Lease to or at the direction
     of the Mortgagee notwithstanding any provision of the Lease to the
     contrary. Such payments shall continue until the Mortgagee directs the
     Tenant otherwise in writing. The Tenant agrees that neither the Mortgagee's
     demanding or receiving any such payments, nor the Mortgagee's exercising
     any other right, remedy, privilege, power or immunity granted by the Lease
     or this Agreement will operate to impose any liability upon the Mortgagee
     for the performance of any obligation of the Mortgagee under the Lease
     unless and until the Mortgagee elects otherwise in writing or unless the
     Mortgagee takes possession of the Mortgaged Premises and assumes the
     functions of a landlord.

5.   Any notice, demand or consent hereunder shall be in writing any may be
     given, sent by a nationally recognized overnight courier service that
     provides a receipt for delivery, sent by facsimile, or mailed by registered
     or certified mail, return receipt requested, addressed, to the Mortgagee at
     the address set forth on the first page of this Agreement. Any party may
     designate a new address by notice in writing to the other party. Any notice
     given in accordance herewith shall be effective upon delivery, sending or
     deposit in the United States mails in accordance herewith.

6.   This Agreement shall be binding upon and inure to the benefit of the
     successors and assigns of each of parties hereto. The term "Mortgagee"
     shall include the respective holders from time to time of the Mortgage (as
     now or hereafter constituted), the term "Mortgagor' shall be synonymous
     with the term "Landlord" during the term of the Mortgage and the terms
     "Landlord" and "Tenant" shall include the holder from time to time of the
     lessor's interest, and the holder from time to time of the lessee's
     interest, respectively, in the Lease.

7.   Any claim by the Tenant against the Mortgagee under the Lease or this
     Agreement shall be satisfied solely out of the interest of the Mortgagee in
     the Mortgaged Premises and the


                                      -52-



     proceeds thereof and the Tenant shall not seek recovery against or out of
     any other assets of the Mortgagee.

8.   This Agreement shall be governed by and construed under the laws of the
     State of New Jersey.

9.   This Agreement may be executed in separate counterparts, all of which shall
     constitute a single instrument.

     IN WITNESS WHEREOF, the Tenant, the Mortgagor and the Mortgagee have caused
this Subordination, Nondisturbance and Attornment Agreement to be duly executed
and delivered, all as of the day and year above written.

[Attest:] [WITNESS:]                    TENANT:

                                        PTC THERAPEUTICS, INC.


By:                                     By:
    ---------------------------------       ------------------------------------
Name and Title:                         Name and Title:
                ---------------------                   ------------------------


                                        MORTGAGOR:

                                        46.24 ASSOCIATES, L.P.


- -------------------------------------
*** Attest/Witness ***


By:                                     By:
    ---------------------------------       ------------------------------------
    *** Attestor/Witness Name ***           Middlesex Realty Corp., President


                                        MORTGAGEE:

                                        THE TRAVELERS LIFE AND ANNUITY COMPANY


                                        By:
                                            ------------------------------------
                                        Name: William P. Geary
                                        Title:
                                               ---------------------------------


                                      -53-



                                  SCHEDULE "A"

                   ATTACHED TO AND MADE A PART OF THAT CERTAIN
                  SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
                 AGREEMENT, DATED AS OF __________________, 2000

                      Description of the Mortgaged Premises


                                      -54-



                                    EXHIBIT E


                           
PTC TENANT FIT UP LIST

6/21/2000 SCOPE OF WORK

DEMOLITION                    CEILING TILE REMOVAL
                              WALL REMOVAL
                              OBSOLETE SYSTEMS AND WIRING REMOVAL
                              DISPOSAL AND CLEAN UP

CONSTRUCTION                  FLOOR PLAN CHANGES: 5-7 OFFICES
                              CEILING REPLACEMENT
                              NMR ROOM CONSTRUCTION
                              INSTALL SHOWERS
                              CONSTRUCT RECEPTION AREA
                              ADDITIONAL EXECUTIVE OFFICE
                              RENOVATE or REPLACE WINDOW TREATMENTS
                              UPGRADE LUNCHROOM FACILITIES, DISHWASHER ETC.

PAINTING                      ENTIRE INTERIOR

CARPET                        ENTIRE ADMINISTRATIVE AREA
                              SELECTED OUTER OFFICES

PHONE SYSTEM                  NEW SYSTEM AND WIRING

WIRING                        COMPLETE NEW WIRING FOR VOICE/DATA
                              SYSTEMCHECK, RENOVATE A-V SYSTEM FOR LARGER
                              MEETING ROOM

SECURITY                      NEW KEY CARD ENTRY SYSTEM
                              UPGRADE FIRM ALARM
                              UPGRADE INTERNAL SECURITY SYSTEM

CASEWORK                      RENOVATE/REPLACE 10 (MIN) ISLANDS FOR CASE
                              WORK AND THE INSTALLATION OF WORKSPACE
                              CARRELS FOR TECHNICAL ST 12/15

FUME HOODS                    REPLACE EXISTING FUME HOODS WITH LARGER
                              MODELS
                              BENCH TOP WITH 2 FLAMMABLE CABINETS BELOW
                              EACH
                              INSTALL ADDITIONAL HOODS
                              UPGRADE PLUMBING AND WIRING FOR EACH HOOD
                              UPGRADE EXHAUST SYSTEMS, DUCTS, FANS etc.



                                      -55-




                           
                              "MAKE-UP" AIR SYSTEM FOR HOODS INSTALLED
                              (NEEDED TO BALANCE HVAC)

ARCHITECTURAL & ENGINEERING   BUILDING DRAWNINGS FOR FLOOR PLAN AND "AS
                              BUILT" MECHANICALS

WATER TREATMENT               RE-COMMISSION, UPGRADE DEIONIZED WATER
                              SYSTEM
                              REPLACE MILLIPORE WATER FILTRATION SYSTEM
                              (OBSOLETE
                              REPLACE MONITORING AND CHEMICAL DELIVERY
                              SYSTEM FOR ACID TANK

FIRE PROTECTION               HORNS/STROBE SYSTEM BROUGHT TO CODE (SPLIT
                              WITH NATIONAL)
                              15-20 NEW FIRE EXTINGUISHERS

BUILDING SYSTEMS              COMPRESSOR UPGRADE
                              REPAIR GENERATOR (DOOR), START-UP INSPECTION,
                              LOAD TESTING AND MAINTENANCE CONTRACT
                              INSTALL VACUUM SYSTEM FOR LAB USE

ELECTRICAL                    WIRING FOR NEW CONSTRUCTION
                              SYSTEM TRACE FOR ALL CIRCUITS AND PANEL RE-
                              LABELING SYSTEM UPGRADE FOR "UPS"

PLUMBING                      SYSTEM TRACE AND INTEGRITY CHECK FOR LAB
                              WATER SYSTEM
                              SHOWER INSTALLATION
                              SAFETY STATION (SHOWERS, EYEWASH) UPGRADE
                              SYSTEM TRACE AND INTEGRITY CHECK FOR
                              SPECIALIZED GA

GLASSWARE CLEANING            REPLACE STEAM GENERATOR
                              REPLACE STERILIZER (RECONDITIONED UNIT)
                              REPLACE WASHER

COLD ROOM                     SYSTEM CHECK AND RE-COMMISSION, INCLUDING
                              CONTROL SYSTEMS



                                      -56-

                    FIRST MODIFICATION AND EXTENSION OF LEASE

      This FIRST MODIFICATION and EXTENSION OF LEASE (this "Modification") is
made as of the 1st day of December, 2003 (the "Building 200 Premises
Commencement Date") by and between 46.24 ASSOCIATES L.P., a Delaware limited
partnership, for the purposes of this Modification, having its office and P.O.
Address c/o National Realty & Development Corp., 3 Manhattanville Road,
Purchase, New York 10577 (hereinafter referred to as "Landlord"), and PTC
THERAPEUTICS, INC. a Delaware corporation, having an office at 100 Corporate
Court, Middlesex Business Center, South Plainfield, NJ 07080 (hereinafter
referred to as "Tenant").

                              W I T N E S S E T H:

      WHEREAS, Landlord, and Tenant entered into that certain lease (herein
referred to as the "Lease") dated as of July 11, 2000, as amended by letter
agreements dated July 10, 2000 and December 14, 2000, by which Tenant leased
from Landlord, and Landlord leased to Tenant, certain premises in building #100
(the "Building") of the Middlesex Business Center (the "Center") in the BOROUGH
OF SOUTH PLAINFIELD, COUNTY OF MIDDLESEX, and STATE OF NEW JERSEY, which
premises consist of approximately 21,700 square feet and are more particularly
described in the Lease (such premises are herein referred to as the "Existing
Premises"); and

      WHEREAS, Tenant is currently occupying certain space (the "Additional
Premises"), also located in building #100 of the Center, which premises are
directly adjacent to the Existing Premises, which Tenant initially occupied
pursuant to a Sub-Tenancy Agreement dated June 1, 2001, between Catalyst
Communications, Inc. ("Catalyst") as sublessor, and Tenant as Sublessee. (The
Existing Premises, together with the Additional Premises, constitute the total
leasable area of the Building, 30,000 square feet.)

      WHEREAS, Landlord and Tenant now desire to modify the Lease in certain
respects;

      NOW, THEREFORE, for TEN and 00/100 ($10.00) DOLLARS and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

      1. Tenant hereby leases from Landlord, and Landlord hereby leases to
Tenant, for a term commencing on January 1, 2003 (the "Effective Date") and
ending on the Revised Expiration Date (as hereinafter defined) (or that date on
which the Lease shall be sooner terminated) approximately 8,300 square feet of
floor space in the Building more particularly indicated and described by
hatching on the left (\\\) on the plot plan annexed hereto as "Exhibit A" and
hereby made a part hereof (such 8,300 square feet of floor space is hereinafter
referred to as the "Additional Premises"). From and after the Effective Date,
the Additional Premises shall be deemed to be part of the Demised Premises, as
if the same was included within the Demised Premises as the same is defined by
the Lease (so that from and after the Effective Date the Demised Premises shall
consist of approximately 30,000 square feet). From and after the Effective Date,
the plot plan attached to the Lease as Exhibit A thereto shall be deemed



deleted from the Lease and the plot plan attached as Exhibit A to this
Modification shall be deemed substituted therefore.

      2. Tenant has examined the Additional Premises and has made a complete
inspection of same and is familiar with the physical condition thereof. Landlord
has not made and does not make any representation as to the physical condition
or any other matter affecting or relating to the Additional Premises, except as
is in this Modification specifically set forth, and Tenant specifically
acknowledges that no such representation has been made, except that Landlord
represents, to its knowledge, without independent investigation, that except as
disclosed in the Phase I Environmental Assessment prepared by Environmental
Management Services dated June 19th, 2000, there were no environmental hazards
present within the Additional Premises prior to Tenant's occupancy thereof.
Tenant further acknowledges that Landlord has afforded Tenant the opportunity
for a full and complete investigation, examination, and inspection of the
Additional Premises and Tenant accepts the Additional Premises "as is".

      3. Tenant hereby leases from Landlord, and Landlord hereby leases to
Tenant, for a term commencing on December 1, 2003 and ending on the Revised
Expiration Date (or that date on which the Lease shall be sooner terminated)
approximately 11,500 square feet of floor space in the building known as 200
Corporate Court in the Center, which floor space is more particularly indicated
and described by cross hatching on the plot plan annexed hereto as "Exhibit A"
and hereby made a part hereof (such 11,500 square feet of floor space is
hereinafter referred to as the "Building 200 Premises"). From and after December
1, 2003 the Building 200 Premises shall be deemed to be part of the Demised
Premises, as if the same was included within the Demised Premises as the same is
defined by the Lease (so that from and after the Building 200 Premises
Commencement Date the Demised Premises shall consist of approximately 41,500
square feet).

      4. A. Tenant has examined the Building 200 Premises and has made a
complete inspection of same and is familiar with the physical condition thereof.
Landlord has not made and does not make any representation as to the physical
condition or any other matter affecting or relating to the Building 200
Premises, except as is in this Modification specifically set forth, and Tenant
specifically acknowledges that no such representation has been made, except that
Landlord represents, to its knowledge, without independent investigation, except
as disclosed in the Phase I Environmental Assessment prepared by Environmental
Management Services dated June 19th, 2000, there were no environmental hazards
present within the Building 200 Premises prior to Tenant's occupancy thereof.
Tenant further acknowledges that Landlord has afforded Tenant the opportunity
for a full and complete investigation, examination, and inspection of the
Building 200 Premises and Tenant accepts the Building 200 Premises "as is"
except as otherwise set forth herein.

      B. Tenant, at Tenant's expense, shall pursuant to plans and specifications
prepared by Tenant and approved by Landlord and otherwise subject to provisions
of the law, including without limitation the provisions of the Lease: (i)
perform such work as is needed so that the Building 200 Premises are demised
separately from the remainder of the building of which such premises are a part,
(ii) install demising walls with respect to the Building 200 Premises in the
locations shown on the plan attached hereto as Exhibit A-1 which is hereby made
a part hereof, (iii) paint such demising walls a color of Tenant's choosing from
Landlord's standard paint


                                      -2-


selections, and (iv) separate the utilities currently servicing the Building 200
Premises so that such premises are separately metered and that such meters
measure only the consumption for the Building 200 Premises.

      C. Tenant shall be responsible for performing such work as is needed so
that the interior portion of the Additional Premises and Building 200 Premises
are compliant with the ADA. Landlord represents that it has performed such work
as is needed so that the exterior portion of the Additional Premises and the
exterior of the Building 200 Premises are compliant with the Americans with
Disabilities Act (the "ADA").

      5. Landlord and Tenant agree that the Term of the Lease shall expire,
notwithstanding anything to the contrary in Section 1.03 of the Lease, on July
31, 2009 (the "Revised Expiration Date").

      6. Effective as of the Effective Date, the annual minimum rental payable
under Section 3.01 of the Lease shall be as follows, notwithstanding anything in
Section 3.01 of the Lease to the contrary,

            (A) From the Rent Commencement Date (as defined in the Lease)
            through December 31, 2002 (inclusive): ONE HUNDRED EIGHTY FOUR
            THOUSAND FOUR HUNDRED FIFTY AND 00/100 ($184,450.00) DOLLARS PER
            ANNUM - FIFTEEN THOUSAND THREE HUNDRED SEVENTY AND 83/100
            ($15,370.83) DOLLARS PER MONTH; and

            (B) From and including January 1, 2003 until March 31, 2004: TWO
            HUNDRED FIFTY SEVEN THOUSAND SEVEN HUNDRED THIRTY AND 04/100
            ($257,730.04) DOLLARS PER ANNUM - TWENTY ONE THOUSAND FOUR HUNDRED
            SEVENTY SEVEN AND 50/100 ($21,477.50) DOLLARS PER MONTH.

            (C) From April 1, 2004 (the "Building 200 Rent Commencement Date")
            through July 31, 2009: THREE HUNDRED SEVENTY THREE THOUSAND FIVE
            HUNDRED AND 00/100 ($373,500.00) DOLLARS PER ANNUM - THIRTY ONE
            THOUSAND ONE HUNDRED TWENTY FIVE AND 50/100 ($31,125.00) DOLLARS PER
            MONTH;

      7. Provided that (i) Tenant is in compliance with the provisions of that
certain License Agreement dated September 22, 2003 by and between Landlord and
Tenant (the "License Agreement") with respect to Renovations Work, and (ii)
Tenant has complied with the provisions of Section 5.05(c) of the Lease as same
apply to the Renovations Work pursuant to said License Agreement and (iii)
Tenant has completed all work necessary to renovate, fixture and equip the
Additional Premises and Building 200 Premises for use in accordance with the
provisions of Article 2 of the Lease (the "Additional Tenant Improvements"), and
(iv) Tenant complies with the requirements of Section 5.05(C) of the Lease, and
provided further that the Lease shall not be terminated prior to the dates
Tenant is entitled to such credits, Tenant shall be entitled to a credit of
$31,125.00 against the payment of the monthly installments of annual minimum
rent due under the Lease for the months of July 2004 and August 2004, and a
credit of


                                      -3-


$31,125.00 against the payment of annual minimum rent due under the Lease for
the months of June 2009 and July 2009 (and such credits shall be in lieu of the
rent abatement set forth in that certain letter agreement dated December 14,
2000 between Landlord and Tenant.)

      8. Section 5.05(B) of the Lease is hereby amended in its entirety to read
as follows:

      "Subject to completion of the Additional Tenant Improvements in accordance
with Tenant's plans and specifications which shall be approved by Landlord in
advance, and the provisions set forth in Section 5.05(C) of the Lease, Landlord
shall reimburse Tenant for amounts actually expended by Tenant for a portion of
the construction of the Additional Tenant Improvements, in an amount not to
exceed the sum of $159,700.00, and for partitioning and installation of separate
HVAC systems (the "HVAC Improvements") in an amount not to exceed $6,000 (both
amounts together, the "Tenant Allowance"). Such reimbursement shall be in the
form of a credit to be taken by Tenant against the first payments of annual
minimum rental payable hereunder which accrue subsequent to the completion of
the Additional Tenant Improvements and the HVAC Improvements, which shall be
credited starting no earlier than August 31, 2004 until exhausted.

      The portion of the Additional Tenant Improvements for which the Tenant
Allowance shall be paid shall be only that portion thereof that is office
installation work (e.g. partitioning, doors, electrical, etc., including,
without limitation, upgrading and replacing of existing mechanical systems in
the Demised Premises) and in no event shall the Tenant Allowance be used for any
work related to Tenant's trade fixtures or equipment (such portion of the
Additional Tenant Improvements for which Tenant may receive the Tenant Allowance
is hereinafter called the "Tenant Allowance Work"). It is acknowledged and
agreed by Tenant that in the event that the monies expended by Tenant for the
completion of the Tenant Allowance Work and the HVAC Improvements are less than
the amount of the Tenant Allowance, Tenant shall not be entitled to any credit
for the unused portion thereof, nor is Tenant entitled to any additional sums
from Landlord in the event that the monies expended by Tenant in connection with
the completion of the Tenant Allowance Work, the HVAC Improvements or the
Additional Tenant Improvements exceeds the amount of the Tenant Allowance."

      9. Tenant and Landlord acknowledge that Tenant has held annual minimum
rent and additional rent accruing with respect to the Additional Premises for
the period of time from and after January 1, 2003 in escrow pending resolution
of the status of the Catalyst Lease and the Catalyst Sublease (as defined
herein). Upon execution of this Modification by Tenant, Tenant shall pay to
Landlord annual minimum rent and additional rent for the Additional Premises for
the period from January 1, 2003 through the last day of January 2004 in the
amount of ONE HUNDRED SIXTEEN THOUSAND NINETY FIVE AND 57/100 ($116,095.57)
DOLLARS (which together with rent previously paid by Tenant with respect to the
Existing Premises, the Landlord accepts in full satisfaction of the amount owed
pursuant to Section 6(B), above, for the period from January 1, 2003 through
February 29 , 2004, subject to year end reconciliation for additional rent.). As
between Landlord and Tenant, Landlord hereby waives any rights or remedies it
may have (either under the Lease, the Catalyst Lease, or the Catalyst Sublease)
with respect to such payments, the underlying rent or costs to which the
payments relate, or the timing of such payments.

                                      -4-



      10. Landlord represents and warrants, and Tenant acknowledges, that the
lease by and between Landlord and Catalyst Communications, Inc. ("Catalyst") by
which Catalyst leased the Additional Premises (the "Catalyst Lease") was
terminated as to the Additional Premises effective as of December 31, 2002 and
that, accordingly, that certain sublease by and between Catalyst and Tenant by
which Tenant subleased the Additional Premises from Catalyst also terminated as
of December 31, 2002 (the "Catalyst Sublease"). In recognition of Tenant's
payments hereunder, Landlord hereby indemnifies and saves harmless Tenant from
and against any claims and all loss, cost, liability, damage and/or expense,
including but not limited to reasonable counsel's fees, penalties and fines,
incurred in connection with or arising from the payment of annual minimum rent
or additional rent from January 1, 2003 forward under the Catalyst Lease or the
Catalyst Sublease, Tenant's good faith efforts to preserve rents on the
Additional Premises in an escrow account pending resolution of issues between
Landlord and Catalyst, or any other financial issues regarding the payment of
rent or additional rent to Landlord by Catalyst or to Catalyst by Tenant.

      11. Article 40 of the Lease is hereby deleted and replaced with the
following quoted language:

      "ARTICLE 40. OPTIONS FOR EXTENSION AND ADDITIONAL SPACE

      Section 40.01. Tenant shall have the option, provided it is not in default
      hereunder, to extend the term of this Lease for ONE (1) successive
      additional term of FIVE (5) years, from August 1, 2009 through July 31,
      2014, upon the same terms and conditions as provided herein, except that
      the fixed annual rent during said extension period shall be as provided
      below, and except that Tenant shall have no further extension options.
      Tenant shall give written notice to Landlord prior to November 1, 2008 of
      its election to extend the term hereof, or such option shall be deemed
      waived. If Tenant shall exercise such extension option, the parties will,
      at the request of either, execute an agreement in form for recording,
      evidencing such extension. If Tenant shall exercise such extension option,
      all references in this Lease to the term hereof shall be deemed to mean
      the term as so extended, except where expressly otherwise provided.

      Section 40.02. If Tenant shall duly elect to extend the term of this Lease
      as herein provided, the fixed annual rent payable by Tenant during said
      extension term shall be FOUR HUNDRED TWENTY NINE THOUSAND FIVE HUNDRED
      TWENTY FIVE AND 00/100 ($429,525.00) DOLLARS per annum- THIRTY FIVE
      THOUSAND SEVEN HUNDRED NINETY THREE AND 001/000 ($35,793.75) DOLLARS per
      month.

      Section 40.03. If at any time Landlord proposes to lease space within the
      building known as 200 Corporate Court in the Center, or enters into
      discussions with a potential tenant(s) for some or all of such space,
      Landlord shall give Tenant notice thereof (the "Start Notice") in order to
      provide Tenant with a reasonable right of first negotiation with respect
      to such additional space upon substantially similar terms and conditions
      as provided herein, except that the fixed annual rent applicable to such
      space shall be as negotiated in good faith by the parties. In the event
      that Landlord and Tenant do not enter into a lease for such space within
      thirty (30) days of the Start Notice, then Tenant


                                      -5-


      shall, at its expense, within thirty (30) days of Landlord's request,
      undertake all actions necessary so that the utilities serving the Building
      200 Premises are located solely within the Building 200 Premises, and not
      otherwise in Building 200, and shall also take all actions necessary so
      that no utilities serving the portion of Building 200 not within the
      Building 200 Premises are located within the Building 200 Premises, such
      that the Building 200 Premises and the other portions of Building 200 can
      be used by two (2) (or more) unrelated tenants without any utilities
      located other than within the particular tenant's demised premises."

      12. Tenant covenants, warrants and represents that it has dealt with no
broker other than Colliers Houston & Co. respecting this Modification and that
no conversations, correspondence or negotiations were had with any broker
(except with Colliers Houston & Co. concerning the negotiation of the Lease)
concerning the renting or leasing of the Additional Premises or Building 200
Premises. Tenant shall hold Landlord and National Realty & Development Corp.
harmless and defend (by counsel satisfactory to Landlord) said parties against
any claims for a brokerage commission arising out of any conversations,
correspondence or negotiations with any broker except said Colliers Houston &
Co. regarding the Lease. Landlord shall pay any commissions owing to said
Colliers Houston & Co. with respect to this Modification in accordance with
separate agreement.

      13. Upon execution of this Modification by Tenant, Tenant shall deliver to
Landlord adequate and proper insurance policies with respect to the Additional
Premises and the Building 200 Premises including, without limitation,
comprehensive general liability insurance in the amounts specified in and in
accordance with the provisions of Article 7 of this Lease.

      14. Section 24.01 of the Lease is hereby deleted and replaced with the
following quoted language:

      "Tenant represents that its officer(s) executing this lease have been duly
      authorized to do so by formal action of a duly-elected Board of Directors.
      Until such time as Tenant is a corporation whose shares are regularly and
      publicly traded on a recognized stock exchange, Tenant shall upon written
      request provide to Landlord a capitalization table showing ownership (by
      class and entity) of Tenant's capital stock prepared or reviewed by a
      certified public accountant."

Landlord hereby waives any right of termination of the Lease that may have
accrued to Landlord pursuant to the former language of Section 24.01 of the
Lease.

      15. Except as expressly modified herein, all of the terms and conditions
of the Lease shall continue unmodified and in full force and effect. Capitalized
terms used herein without definition shall have the meaning given to such terms
in the Lease. Obligations under this Agreement shall be deemed obligations under
the Lease and that a default hereunder shall constitute a default under the
Lease.

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
the day and year first above written.

                                      -6-





                                                       
WITNESS:                                                  46.24 ASSOCIATES L.P., a Delaware limited partnership

                                                          By:    Middlesex Realty Corp., general partner

/s/ Jennifer H. Lawrence                                         By:  /s/ Robert C. Baker
- --------------------------------------------                         -------------------------------------------
                                                                 Name:  Robert C. Baker
                                                                 Title:  President

                                                                           (LANDLORD)

                                                          PTC THERAPEUTICS, INC., a Delaware corporation

                                                          By:    /s/ Mark E. Boulding
- --------------------------------------------                  --------------------------------------------------
                                                          Name:  Mark E. Boulding
                                                          Title:  Secretary of the Corporation

                                                                            (TENANT)



                                      -7-




State of New York
                     } SS:
County of Westchester

      On the 17th day of February in the year 2004 before me, the undersigned, a
Notary Public in and for said State, personally appeared Robert C. Baker,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity as President of
MIDDLESEX REALTY CORP., general partner of 46.24 ASSOCIATES, INC., and that by
his signature on the instrument, the individual or the corporation upon behalf
of which the individual acted, executed the instrument.


                                                   Notary Public

STATE OF NEW JERSEY        )
                           } SS.:
COUNTY OF MIDDLESEX        )

         On the 9th day of February in the year 2004 before me, the undersigned,
a Notary Public in and for said State, personally appeared Mark E. Boulding,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity as Secretary of PTC
THERAPEUTICS, and that by his signature on the instrument, the individual or the
corporation upon behalf of which the individual acted, executed the instrument..


                                                   Notary Public


                                      -8-



                                    EXHIBIT A

                             [GRAPHIC OMITTED][MAP]


                                    EXHIBIT A





                                   EXHIBIT A-1



                         [GRAPHIC OMITTED] [FLOOR PLAN]

                                                                   Exhibit 10.13

                            MASTER SECURITY AGREEMENT
                                   NO. 4081064
                     Dated as of JULY 30, 2004 ("AGREEMENT")

      THIS AGREEMENT (this "Agreement") is between OXFORD FINANCE CORPORATION
(together with its successors and assigns, if any, "SECURED PARTY") and PTC
Therapeutics, Inc. ("DEBTOR"). Secured Party has an office at 133 N. Fairfax
Street, Alexandria, VA 22314. Debtor is a corporation organized and existing
under the laws of the state of Delaware. Debtor's mailing address and chief
place of business is 100 Corporate Court, South Plainfield, NJ 07080.

1.    CREATION OF SECURITY INTEREST.

      Debtor grants to Secured Party, its successors and assigns, a security
interest in and against all property listed on any collateral schedule now or in
the future annexed to or made a part of this Agreement ("COLLATERAL SCHEDULE"),
and in and against all additions, attachments, accessories and accessions to
such property, all substitutions, replacements or exchanges therefore, and all
insurance and/or other proceeds thereof (all such property is individually and
collectively called the "COLLATERAL"). This security interest is given to secure
the payment and performance of certain Promissory Notes from time to time
identified on any Collateral Schedule (collectively "NOTES" and each a "NOTE"),
the "Debt Documents" (as defined below), and any renewals, extensions and
modifications of such debts, obligations and liabilities (such Notes, debts,
obligations and liabilities are called the "INDEBTEDNESS"). Debtor acknowledges
that, notwithstanding that the Note(s) may be paid in full, this Security
Agreement shall continue to secure the payment and performance of any remaining
Indebtedness of Debtor to Secured Party, now existing or arising in the future,
and that Secured Party shall be under no obligation to release the Collateral
unless and until all Indebtedness of Debtor to Secured Party has been paid and
satisfied; provided, however, Secured Party, in its sole and exclusive
discretion, may elect to release some of the Collateral without prejudice to
Secured Party's security interest in the remaining Collateral. Unless otherwise
provided by applicable law, notwithstanding anything to the contrary contained
in this Agreement, to the extent that Secured Party asserts a purchase money
security interest in any items of Collateral ("PMSI COLLATERAL"): (i) the PMSI
Collateral shall secure only that portion of the Indebtedness which has been
advanced by Secured Party to enable Debtor to purchase, or acquire rights in or
the use of such PMSI Collateral (the "PMSI INDEBTEDNESS"), and (ii) no other
Collateral shall secure the PMSI Indebtedness.

2.    REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

      Debtor represents, warrants and covenants as of the date of this Agreement
and as of the date of each Collateral Schedule that:

      (a)   Debtor's exact legal name is as set forth in the preamble of this
            Agreement (or, upon any change thereto, Debtor will notify Secured
            Party in accordance with the terms of this Agreement) and Debtor is,
            and will remain, duly organized, existing and in good standing under
            the laws of the State set forth in the preamble of this Agreement,
            has its chief executive offices at the location specified in the
            preamble (or, upon any change thereto, Debtor will notify Secured
            Party in accordance with the terms of this Agreement), and is, and
            will remain, duly qualified and licensed in every jurisdiction
            wherever necessary to carry on its business and operations;

      (b)   Debtor has adequate power and capacity to enter into, and to perform
            its obligations under this Agreement, each Note and any other
            documents evidencing, or given in connection with, any of the
            Indebtedness (all of the foregoing are called the "DEBT DOCUMENTS");

      (c)   This Agreement and the other Debt Documents have been duly
            authorized, executed and delivered by Debtor and constitute legal,
            valid and binding agreements enforceable in accordance with their
            terms, except to the extent that the enforcement of remedies may be
            limited under applicable bankruptcy and insolvency laws;

      (d)   No approval, consent or withholding of objections is required from
            any governmental authority or instrumentality with respect to the
            entry into, or performance by Debtor of any of the Debt Documents,
            except any already obtained;

      (e)   The entry into, and performance by, Debtor of the Debt Documents
            will not (i) violate any of the organizational documents of Debtor
            or any judgment, order, law or regulation applicable to Debtor, or
            (ii) result in any breach of or constitute a default under any
            contract to which Debtor is a party, or result in the creation of
            any lien, claim or encumbrance on any of Debtor's property (except
            for liens in favor of Secured Party) pursuant to any indenture,
            mortgage, deed of trust, bank loan, credit agreement, or other
            agreement or instrument to which Debtor is a party;

      (f)   Except as otherwise disclosed to Secured Party, there are no suits
            or proceedings pending in court or before any commission, board or
            other administrative agency against or affecting Debtor which could,
            in the aggregate, have a material adverse effect on Debtor, its
            business or operations, or its ability to perform its obligations
            under the Debt Documents, nor does Debtor have reason to believe
            that any such suits or proceedings are threatened;



      (g)   All financial statements delivered to Secured Party in connection
            with the Indebtedness have been prepared in accordance with
            generally accepted accounting principles, and since the date of the
            most recent financial statement, there has been no material adverse
            change in Debtors financial condition;

      (h)   The Collateral is not, and will not be, used by Debtor for personal,
            family or household purposes;

      (i)   The Collateral is, and will remain, in good condition and repair and
            Debtor will not be negligent in its care and use;

      (j)   All of the tangible Collateral is located at the locations set forth
            on each Collateral Schedule. Debtor shall give the Secured Party 30
            days prior written notice of any relocation of any Collateral (other
            than between such locations);

      (k)   Debtor is, and will remain, the sole and lawful owner, and in
            possession of, the Collateral, and has the sole right and lawful
            authority to grant the security interest described in this
            Agreement;

      (l)   The Collateral is, and will remain, free and clear of all liens,
            claims and encumbrances of any kind whatsoever, except for (i) liens
            in favor of Secured Party, (ii) liens for taxes not yet due or for
            taxes being contested in good faith and which do not involve, in the
            reasonable judgment of Secured Party, any risk of the sale,
            forfeiture or loss of any of the Collateral, and (iii) inchoate
            material men's, mechanic's, repairmen's and similar liens arising by
            operation of law in the normal course of business for amounts which
            are not delinquent (all of such liens are called "PERMITTED LIENS");

      (m)   All federal, state and local tax returns required to be filed by
            Debtor have been filed with the appropriate governmental agencies
            and all taxes due and payable by Debtor have been timely paid.
            Debtor will pay when due all taxes, assessments and other
            liabilities except as contested in good faith and by appropriate
            proceedings and for which adequate reserves have been established;
            provided, however, the omission to file and/or pay any related fine
            in connection with any employee benefit plan for the calendar years
            ending in 2002 and 2003 shall not be deemed a breach of this
            Subsection 2(m);

      (n)   No event or condition exists under any material agreement,
            instrument or document to which Debtor is a party or may be subject,
            or by which Debtor or any of its properties are bound, which
            constitutes a default or an event of default thereunder;

      (o)   All reports, certificates, schedules, notices and financial
            information submitted by Debtor to the Secured Party pursuant to
            this Agreement shall be certified as true and correct by the
            president or chief financial officer of Debtor; provided, however,
            if and to the extent that Secured Party accepts reports,
            certificates, schedules, notices and financial information without
            the required certification or fails to provide an objection to the
            omission to provide the required certification, the omission to
            certify shall not be deemed a breach of this Subsection 2(o);

      (p)   Debtor shall give the Secured Party prompt written notice of any
            event, occurrence or other matter which has resulted or may result
            in a material adverse change in its financial condition, business
            operations, prospects, product development, technology, or business
            or contractual relations with third parties of Debtor which would
            impair the ability of Debtor to perform its obligations hereunderor
            under any of the other material financing agreements to which it is
            a party or of Secured Party to enforce the Indebtedness or realize
            upon the Collateral; and

      (q)   Debtor has previously delivered to the Secured Party a certificate
            signed by the Debtor and entitled "Perfection Certificate" (the
            "PERFECTION CERTIFICATE"). The Debtor represents and warrants to the
            Secured Party as follows: (a) the Debtor's exact legal name is that
            indicated on the Perfection Certificate and on the signature page
            hereof, (b) the Debtor is an organization of the type, and is
            organized in the jurisdiction set forth in the Perfection
            Certificate, (c) the Perfection Certificate accurately sets forth
            the Debtor's organizational identification number or accurately
            states that the Debtor has none, (d) the Perfection Certificate
            accurately sets forth the Debtor's place of business or, if more
            than one, its chief executive office, as well as the Debtor's
            mailing address, if different, (e) all other information set forth
            on the Perfection Certificate pertaining to the Debtor is accurate
            and complete, and (f) that there has been no change in any
            information provided in the Perfection Certificate since the date on
            which it was executed by the Debtor other than any change of which
            Debtor has notified Secured Party in accordance with the terms of
            this Agreement.

3.    COLLATERAL.

      (a)   Until the declaration of any default, Debtor shall remain in
            possession of the Collateral; except that Secured Party shall have
            the right to possess (i) any chattel paper or instrument that
            constitutes a part of the Collateral, and (ii) any other Collateral
            in which Secured Party's security interest may be perfected only by
            possession. Secured Party may inspect any of the Collateral during
            normal business hours after giving Debtor reasonable prior notice.

Page 2 of 7


      (b)   Debtor shall (i) use the Collateral only in its trade or business,
            (ii) maintain all of the Collateral in good operating order and
            repair, normal wear and tear excepted, (iii) use and maintain the
            Collateral only in compliance with manufacturers recommendations and
            all applicable laws, and (iv) keep all of the Collateral free and
            clear of all liens, claims and encumbrances (except for Permitted
            Liens).

      (c)   Secured Party does not authorize and Debtor agrees it shall not (i)
            part with possession of any of the Collateral (except to Secured
            Party or for maintenance and repair), (ii) remove any of the
            Collateral from the continental United States, or (iii) sell, rent,
            lease, mortgage, license, grant a security interest in or otherwise
            transfer or encumber (except for Permitted Liens) any of the
            Collateral.

      (d)   Debtor shall pay promptly when due all taxes, license fees,
            assessments and public and private charges levied or assessed on any
            of the Collateral, on its use, or on this Agreement or any of the
            other Debt Documents. At its option, Secured Party may discharge
            taxes, liens, security interests or other encumbrances at any time
            levied or placed on the Collateral and may pay for the maintenance,
            insurance and preservation of the Collateral and effect compliance
            with the terms of this Agreement or any of the other Debt Documents,
            provided that, Secured Party shall not take any of such actions
            unless and until Debtor has failed to do so in a timely manner,
            Secured Party has delivered to Debtor written notice of any such
            failure, and Debtor has not cured such failure within ten days after
            receipt of such written notice. Debtor agrees to reimburse Secured
            Party, on demand, all costs and expenses incurred by Secured Party
            in connection with such payment or performance and agrees that such
            reimbursement obligation shall constitute Indebtedness.

      (e)   Debtor shall, at all times, keep accurate and complete records of
            the Collateral, and Secured Party shall have the right to inspect
            and make copies of all of Debtor's books and records relating to the
            Collateral during normal business hours, after giving Debtor
            reasonable prior notice.

      (f)   Debtor agrees and acknowledges that any third person who may at any
            time possess all or any portion of the Collateral shall be deemed to
            hold, and shall hold, the Collateral as the agent of, and as pledge
            holder for, Secured Party. Secured Party may at any time give notice
            to any third person described in the preceding sentence that such
            third person is holding the Collateral as the agent of, and as
            pledge holder for, the Secured Party.

4.    INSURANCE.

      (a)   Debtor shall at all times bear the entire risk of any loss, theft,
            damage to, or destruction of, any of the Collateral from any cause
            whatsoever, subject to the limitations set forth in Section 6(c).

      (b)   Debtor agrees to keep the Collateral insured against loss or damage
            by fire and extended coverage perils, theft, burglary, and for any
            or all Collateral, which are vehicles, for risk of loss by
            collision, and if requested by Secured Party, against such other
            risks as Secured Party may reasonably require. The insurance
            coverage shall be in an amount no less than the full replacement
            value of the Collateral, and deductible amounts, insurers and
            policies shall be acceptable to Secured Party. Debtor shall deliver
            to Secured Party policies or certificates of insurance evidencing
            such coverage. Each such policy or certificate shall name Secured
            Party as a loss payee, shall not be subject to co-insurance, and
            shall provide that if coverage is canceled or lowered, the insurer
            shall give thirty (30) days prior written notice to Secured Party.
            Debtor appoints Secured Party as its attorney-in-fact to make proof
            of loss, claim for insurance and adjustments with insurers, and to
            receive payment of and execute or endorse all documents, checks or
            drafts in connection with insurance payments. Secured Party shall
            not act as Debtor's attorney-in-fact unless Debtor is in default
            under the Debt Documents. Proceeds of insurance shall be applied, at
            the option of Secured Party, to repair or replace the Collateral or
            to reduce any of the Indebtedness.

5.    REPORTS.

      (a)   Debtor shall promptly notify Secured Party of (i) any change in the
            name of Debtor, (ii) any change in the state of its incorporation or
            registration, (iii) any relocation of its chief executive offices,
            (iv) any of the Collateral being lost, stolen, missing, destroyed,
            materially damaged or worn out, or (v) any lien, claim or
            encumbrance other than Permitted Liens attaching to or being made
            against any of the Collateral.

      (b)   Debtor will deliver to Secured Party within one hundred twenty (120)
            days of the close of each fiscal year of Debtor, a copy of the
            annual audit report of Debtor, including a balance sheet, income
            statement, statement of shareholders' equity and statement of cash
            flows, each prepared in accordance with generally accepted
            accounting principles consistently applied, certified by a
            recognized firm of certified public accountants. Debtor will deliver
            to Secured Party copies of Debtor's balance sheet, income statement
            and statement of cash flows, each prepared by Debtor in accordance
            with generally accepted accounting principles consistently applied
            by Debtor and certified (subject to year-end audit adjustments) by
            Debtor's chief financial officer, within ninety (90) days after the
            close of each of the first three quarters of each fiscal year of
            Debtor. Debtor will deliver to Secured Party copies of all Forms
            10-K and 10-Q, if any, within 30 days after the dates on which they
            are filed with the Securities and Exchange Commission. Debtor will
            deliver to Secured Party copies of monthly bank account statements
            or other statements provided with respect to Debtor's cash
            management activities within forty-five (45) days after the close of
            each month.

      (c)   Secured Party promptly upon request of Secured Party, in form
            satisfactory to Secured Party, such other and additional information
            as Secured Party may reasonably request from time to time, provided
            that,

Page 3 of 7


            i.    Such additional information exists or could be created without
                  significant additional cost on the part of Debtor;

            ii.   If Debtor indicates such additional information is
                  confidential or proprietary, Secured Party will provide
                  written assurances of confidential treatment upon Debtor's
                  request, ensure limited access to such additional information,
                  and guarantee no improper use or transfer thereof; and

            iii.  Such additional information will not violate any law,
                  regulation or contractual or other obligation by which Debtor
                  is bound.

6.    FURTHER ASSURANCES.

      (a)   Debtor shall, upon request of Secured Party, furnish to Secured
            Party such further information, execute and deliver to Secured Party
            such documents and instruments (including, without limitation,
            Uniform Commercial Code financing statements) and shall do such
            other acts and things as Secured Party may at any time reasonably
            request to perfect or protect the security interest created by this
            Agreement or for the purpose of carrying out the intent of this
            Agreement. Without limiting the foregoing, Debtor shall cooperate
            and do all acts reasonably deemed necessary or advisable by Secured
            Party to continue in Secured Party a perfected first security
            interest in the Collateral, and shall use its best efforts under the
            circumstances to obtain and furnish to Secured Party any
            subordinations, releases, landlord waivers, lessor waivers,
            mortgagee waivers, or control agreements, and similar documents as
            may be from time to time reasonably requested by, and in form and
            substance reasonably satisfactory to, Secured Party.

      (b)   Debtor shall use its best efforts under the circumstances to perform
            any and all acts requested by the Secured Party to establish,
            maintain and continue the Secured Party's security interest and
            liens in the Collateral, including but not limited to, executing or
            authenticating financing statements and such other instruments and
            documents when and as reasonably requested by the Secured Party.
            Debtor hereby authorizes Secured Party through any of Secured
            Party's employees, agents or attorneys to file any and all financing
            statements, including, without limitation, any original filings,
            continuations, transfers or amendments thereof required to perfect
            Secured Party's security interest and liens in the Collateral under
            the UCC without authentication or execution by Debtor. Debtor hereby
            irrevocably authorizes the Secured Party at any time and from time
            to time to file in any filing office in any Uniform Commercial Code
            jurisdiction any initial financing statement(s) and amendments
            thereto that (a) indicate the Collateral (i) is subject to the
            Secured Party's security interest, regardless of whether any
            particular asset comprised in the Collateral falls within the scope
            of Article 9 of the Uniform Commercial Code of the State or such
            jurisdiction, or (ii) as being of an equal or lesser scope or with
            greater detail, and (b) provide any other information required by
            part 5 of Article 9 of the Uniform Commercial Code of the State or
            such other jurisdiction for the sufficiency or filing office
            acceptance of any financing statement or amendment, including (i)
            whether the Debtor is an organization, the type of organization and
            any organization identification number issued to the Debtor, and
            (ii) in the case of a financing statement filed as a fixture filing,
            a sufficient description of real property to which the Collateral
            relates. The Debtor agrees to furnish any such information to the
            Secured Party promptly upon the Secured Party's request.

      (c)   Debtor shall indemnify and defend the Secured Party, its successors
            and assigns, and their respective directors, officers and employees,
            from and against all claims, actions and suits (including, without
            limitation, related attorneys' fees) of any kind whatsoever arising,
            directly or indirectly, in connection with any of the Collateral,
            provided that, Debtor shall have no such obligation to indemnify or
            defend Secured Party or any such entities or persons from and
            against any such claims, actions or suits (including without
            limitation attorneys' fees) arising, directly or indirectly, in
            connection with any of the following:

            (i) Secured Party's or its agents' failure to comply with any
            applicable laws, rules or regulations in relation to its handling,
            use or transport of the Collateral;

            (ii) Secured Party's or its agents' failure to utilize properly
            trained or experienced personnel for the handling, use or transport
            of any materials or other items of Collateral which constitute or
            contain hazards or dangers known or identified to Secured Party as
            such; or

            (iii) Secured Party's or its agents' gross negligence or willful
            misconduct.

7.    DEFAULT AND REMEDIES.

      (a)   Debtor shall be in default under this Agreement and each of the
            other Debt Documents if:

            (i)   Debtor breaches its obligation to pay when due any installment
                  or other amount due or coming due under any of the Debt
                  Documents and fails to cure such breach within five (5) days
                  of when due;

            (ii)  Debtor, without the prior written consent of Secured Party,
                  attempts to or does sell, rent, lease, license, mortgage,
                  grant a security interest in, or otherwise transfer or
                  encumber (except for Permitted Liens) any of the Collateral;

            (iii) Debtor breaches any of its insurance obligations under Section
                  4;

            (iv)  Debtor breaches any of its other non-payment obligations under
                  any of the Debt Documents and fails to cure that breach within
                  thirty (30) days after written notice from Secured Party;

            (v)   Any material warranty, representation or statement made by
                  Debtor in any of the Debt Documentsor otherwise in connection
                  with any of the Indebtedness shall be false or misleading in
                  any material respect as of the date made;

Page 4 of


            (vi)  Any of the Collateral is subjected to attachment, execution,
                  levy, seizure or confiscation in any legal proceeding or
                  otherwise, or if any legal or administrative proceeding is
                  commenced against Debtor or any of the Collateral, which in
                  the good faithreasonable judgment of Secured Party subjects
                  any of the Collateral to a material risk of attachment,
                  execution, levy, seizure or confiscation and no bond is posted
                  or protective order obtained to negate such risk;

            (vii) Debtor breaches or is in default under any other agreement
                  between Debtor and Secured Party;

            (viii) Debtor or any guarantor or other obligor for any of the
                  Indebtedness (collectively "GUARANTOR") dissolves, terminates
                  its existence, becomes insolvent or ceases to do business as a
                  going concern;

            (ix)  With respect to any Debtor or any Guarantor who is a natural
                  person, Debtor or any such Guarantor dies or becomes
                  incompetent;

            (x)   A receiver is appointed for all or of any part of the property
                  of Debtor or any Guarantor, or Debtor or any Guarantor makes
                  any assignment for the benefit of creditors;

            (xi)  Debtor or any Guarantor files a petition under any bankruptcy,
                  insolvency or similar law, or any such petition is filed
                  against Debtor or any Guarantor and is not dismissed within
                  forty-five (45) days;

            (xii) Debtor's improper filing of an amendment or termination
                  statement relating to a filed financing statement describing
                  the Collateral.

            (xiii) Except with the Secured Party's prior written consent which
                  shall not be unreasonably withheld, conditioned or delayed,
                  Debtor shall merge with or consolidate into any other entity
                  or sell all or substantially all of its assets or in any
                  manner terminate its existence;

            (xiv) Except with the Secured Party's prior written consent which
                  shall not be unreasonably withheld, conditioned or delayed,
                  Debtor is a privately held corporation, more than 50% of
                  Debtor's voting capital stock, or effective control of
                  Debtor's voting capital stock, issued and outstanding from
                  time to time, is not retained by the holders of such stock on
                  the date the Agreement is executed;

            (xv)  Except with the Secured Party's prior written consent which
                  shall not be unreasonably withheld, conditioned or delayed,
                  Debtor is a publicly held corporation, there shall be a change
                  in the ownership of Debtor's stock such that Debtor is no
                  longer subject to the reporting requirements of the Securities
                  Exchange Act of 1934 or no longer has a class of equity
                  securities registered under Section 12 of the Securities Act
                  of 1933;

            (xvi) Debtor defaults under any other material financing arrangement
                  between Debtor and a third party; and

            (xvii) A change or event shall have occurred which would impair the
                  ability of Debtor to perform its material obligations
                  hereunder or of Secured Party to enforce the Indebtedness or
                  realize upon the Collateral;

      (b)   If Debtor is in default, the Secured Party, at its option, may
            declare any or all of the Indebtedness to be immediately due and
            payable, without demand or notice to Debtor or any Guarantor. The
            accelerated obligations and liabilities shall bear interest (both
            before and after any judgment) until paid in full at the lower of
            thirteen percent (13%) per annum or the maximum rate not prohibited
            by applicable law.

      (c)   Upon a default of this Agreement by Debtor or the occurrence of an
            event which would constitute a default, Secured Party shall have all
            of the rights and remedies of a Secured Party under the Uniform
            Commercial Code, and under any other applicable law. Without
            limiting the foregoing, Secured Party shall have the right in such
            circumstances to (i) notify any account debtor of Debtor or any
            obligor on any instrument which constitutes part of the Collateral
            to make payment to the Secured Party, (ii) with or without legal
            process, enter any premises where the Collateral may be and take
            possession of and remove the Collateral from the premises or store
            it on the premises, (iii) sell the Collateral at public or private
            sale, in whole or in part, and have the right to bid and purchase at
            said sale, or (iv) lease or otherwise dispose of all or part of the
            Collateral, applying proceeds from such disposition to the
            obligations then in default. Upon a default of this Agreement by
            Debtor or the occurrence of an event that would constitute a
            default, if requested by Secured Party, Debtor shall promptly
            assemble the Collateral and make it available to Secured Party at a
            place to be designated by Secured Party, which is reasonably
            convenient to both parties. Upon a default of this Agreement by
            Debtor or the occurrence of an event which would constitute a
            default, Secured Party may also render any or all of the Collateral
            unusable at the Debtor's premises and may dispose of such Collateral
            on such premises without liability for rent or costs. Any notice
            that Secured Party is required to give to Debtor under the Uniform
            Commercial Code of the time and place of any public sale or the time
            after which any private sale or other intended disposition of the
            Collateral is to be made shall be deemed to constitute reasonable
            notice if such notice is given to the last known address of Debtor
            at least five (5) days prior to such action. Upon a default of this
            Agreement by Debtor or the occurrence of an event of default and
            during the continuation of such default or event, Debtor hereby
            appoints Secured Party as Debtor's attorney-in-fact, with full
            authority in Debtor's place and stead and in Debtor's name or
            otherwise, from time to time in Secured Party's sole and arbitrary
            discretion, to take any action and to execute any instrument which
            Secured Party reasonably deems necessary or advisable to accomplish
            the purpose of this Agreement.

      (d)   Proceeds from any sale or lease or other disposition shall be
            applied: first, to all costs of repossession, storage, and
            disposition including without limitation attorneys', appraisers',
            and auctioneers' fees; second, to discharge the obligations then in
            default; third, to discharge any other Indebtedness of Debtor to
            Secured Party, whether as obligor, endorser, guarantor, surety or
            indemnitor; fourth, to expenses incurred in paying or settling liens
            and claims against the Collateral; and lastly, to Debtor, if there
            exists any surplus. Debtor shall remain fully liable for any
            deficiency.

Page 5 of 7


      (e)   Upon a default of this Agreement by Debtor or the occurrence of an
            event which with the passage of time or the giving of notice would
            constitute a default, Debtor agrees to pay all reasonable attorneys'
            fees and other costs incurred by Secured Party in connection with
            the enforcement, assertion, defense or preservation of Secured
            Party's rights and remedies under this Agreement, or if prohibited
            by law, such lesser sum as may be permitted. Debtor further agrees
            that such fees and costs shall constitute Indebtedness.

      (f)   Secured Party's rights and remedies under this Agreement or
            otherwise arising are cumulative and may be exercised singularly or
            concurrently. Neither the failure nor any delay on the part of the
            Secured Party to exercise any right, power or privilege under this
            Agreement shall operate as a waiver, nor shall any single or partial
            exercise of any right, power or privilege preclude any other or
            further exercise of that or any other right, power or privilege.
            SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS RIGHTS
            UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR
            PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING
            AND SIGNED BY SECURED PARTY. A waiver on any one occasion shall not
            be construed as a bar to or waiver of any right or remedy on any
            future occasion.

      (g)   DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A
            JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
            OF THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE
            INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED
            PARTY RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY
            RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING
            ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS
            WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
            THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS
            WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER
            ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
            OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO
            ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR
            ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
            CONSENT TO A TRIAL BY THE COURT.

8.    MISCELLANEOUS.

            (a)   This Agreement, any Note and/or any of the other Debt
                  Documents may be assigned, in whole or in part, by Secured
                  Party without notice to Debtor, and Debtor agrees not to
                  assert against any such assignee, or assignee's assigns, any
                  set-off, recoupment claim or counterclaim which Debtor has or
                  may at any time have against Secured Party for any reason
                  whatsoever, except in any case of the defense of payment.
                  Debtor agrees that if Debtor receives written notice of an
                  assignment from Secured Party, Debtor will pay all amounts
                  payable under any assigned Debt Documents to such assignee or
                  as instructed by Secured Party. Debtor also agrees to confirm
                  in writing receipt of the notice of assignment as may be
                  reasonably requested by Secured Party or assignee.

            (b)   All notices to be given in connection with this Agreement
                  shall be in writing, shall be addressed to the parties at
                  their respective addresses set forth in this Agreement (unless
                  and until a different address may be specified in a written
                  notice to the other party), and, in the case of all such
                  notices to Debtor, a copy shall be sent by email to
                  legal@ptcbio.com, and shall be deemed given (i) on the date of
                  receipt if delivered in hand or by facsimile transmission,
                  (ii) on the next business day after being sent by express
                  mail, and (iii) on the fourth business day after being sent by
                  regular, registered or certified mail. As used herein, the
                  term "business day" shall mean and include any day other than
                  Saturdays, Sundays, or other days on which commercial banks in
                  New York, New York are required or authorized to be closed.

            (c)   Upon notice to Debtor, Secured Party may fill in all blanks in
                  any Collateral Schedule consistent with the agreement of the
                  parties. With the consent of Debtor, Secured Party may correct
                  patent errors and fill in all blanks in this Agreement
                  consistent with the terms hereof, provided that, consistent
                  with the agreement of the parties, Secured Party may fill in
                  the date in any Note or this Agreement without further notice
                  to or consent of Debtor.

            (d)   Time is of the essence of this Agreement. This Agreement shall
                  be binding, jointly and severally, upon all parties described
                  as the "Debtor" and their respective heirs, executors,
                  representatives, successors and assigns, and shall inure to
                  the benefit of Secured Party, its successors and assigns.

            (e)   This Agreement and its Collateral Schedules constitute the
                  entire agreement between the parties with respect to the
                  subject matter of this Agreement and supersede all prior
                  understandings (whether written, verbal or implied) with
                  respect to such subject matter. THIS AGREEMENT AND ITS
                  COLLATERAL SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY
                  OR BY COURSE OF CONDUCT, BUT ONLY BY A WRITING SIGNED BY BOTH
                  PARTIES. Section headings contained in this Agreement have
                  been included for convenience only, and shall not affect the
                  construction or interpretation of this Agreement.

            (f)   This Agreement shall continue in full force and effect until
                  all of the Indebtedness has been indefeasibly paid in full to
                  Secured Party or its assignee. The surrender, upon payment or
                  otherwise, of any Note or any of the other documents
                  evidencing any of the Indebtedness shall not affect the right
                  of Secured Party to retain the Collateral for such other
                  Indebtedness as may then exist or as it may be reasonably
                  contemplated will exist in the future. This Agreement shall
                  automatically be reinstated if Secured Party is ever required
                  to return or restore the payment of all or any portion of the
                  Indebtedness (all as though such payment had never been made).

Page 6 of 7


            DEBTOR AGREES THAT SECURED PARTY AND/OR ITS SUCCESSORS AND ASSIGNS
            SHALL HAVE THE OPTION BY WHICH STATE LAWS THIS AGREEMENT SHALL BE
            GOVERNED AND CONSTRUED: (A) THE LAWS OF THE COMMONWEALTH OF
            VIRGINIA; OR (B) IF COLLATERAL HAS BEEN PLEDGED TO SECURE THE
            LIABILITIES, THEN BY THE LAWS OF THE STATE OR STATES WHERE THE
            COLLATERAL IS LOCATED, AT SECURED PARTY'S OPTION. THIS CHOICE OF
            STATE LAWS IS EXCLUSIVE TO THE SECURED PARTY. DEBTOR SHALL NOT HAVE
            ANY OPTION TO CHOOSE THE LAWS BY WHICH THIS AGREEMENT SHALL BE
            GOVERNED. DEBTOR ACKNOWLEDGES THAT THIS AGREEMENT IS BEING SIGNED BY
            THE SECURED PARTY IN PARTIAL CONSIDERATION OF SECURED PARTY'S RIGHT
            TO ENFORCE IN THE JURISDICTION STATED ABOVE. DEBTOR CONSENTS TO
            JURISDICTION IN THE COMMONWEALTH OF VIRGINIA OR THE STATE IN WHICH
            ANY COLLATERAL IS LOCATED AND VENUE IN ANY FEDERAL OR STATE COURT IN
            THE COMMONWEALTH OF VIRGINIA OR THE STATE IN WHICH COLLATERAL IS
            LOCATED FOR SUCH PURPOSES AND WAIVES ANY AND ALL RIGHTS TO CONTEST
            SAID JURISDICTION AND VENUE AND ANY OBJECTION THAT SAID COUNTY IS
            NOT CONVENIENT. DEBTOR WAIVES ANY RIGHTS TO COMMENCE ANY ACTION
            AGAINST SECURED PARTY IN ANY JURISDICTION EXCEPT VIRGINIA, OR IF
            SECURED PARTY CHOOSES TO LITIGATE IN A STATE WHERE COLLATERAL IS
            LOCTAED THEN IN SUCH COUNTY AND STATE.

      IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally
bound hereby, have duly executed this Agreement in one or more counterparts,
each of which shall be deemed to be an original, as of the day and year first
aforesaid.

SECURED PARTY:                             DEBTOR:

OXFORD FINANCE CORPORATION                 PTC THERAPEUTICS, INC.

By: /S/ MICHAEL J. ALTENBURGER             By: /S/ WILLAIM BAIRD

Name: Michael J. Altenburger               Name: William Baird III

Title: Chief Financial Officer             Title: Vice President Finance

Page 7 of 7

                                                                   EXHIBIT 10.14


                                 PROMISSORY NOTE

                   TO MASTER SECURITY AGREEMENT NO. _________

                              ____________________
                                     (DATE)

  FOR VALUE RECEIVED, PTC Therapeutics, Inc., a Delaware corporation, located at
  the address stated below ("MAKER") promises, jointly and severally if more
  than one, to pay to the order of OXFORD FINANCE CORPORATION or any subsequent
  holder hereof (each, a "PAYEE") at its office located at 133 N. FAIRFAX
  STREET, ALEXANDRIA, VA 22314 or at such other place as Payee or the holder
  hereof may designate, the principal sum of ____________________ DOLLARS
  ($____________________), with interest on the unpaid principal balance, from
  the date hereof through and including the dates of payment, at a fixed
  interest rate of ______ and _____ hundredths percent (____%) per annum, in
  ________ consecutive monthly installments of principal and interest as
  follows:



        Periodic
        Installment                Amount
        _________________________________
                                
                                   $



  each ("PERIODIC INSTALLMENT") and a final installment which shall be in the
  amount of the total outstanding principal and interest. The first Periodic
  Installment shall be due and payable on ____________________ and the following
  Periodic Installments and the final installment shall be due and payable on
  the same day of each succeeding _______________ (each, a "PAYMENT DATE"). Such
  installments have been calculated on the basis of a 360-day year of twelve
  30-day months. Each payment may, at the option of the Payee, be calculated and
  applied on an assumption that such payment would be made on its due date.
  Maker agrees to pay any initial partial month interest payment from the date
  of this Note to the first day of the following month ("Interim Interest").

  The acceptance by Payee of any payment which is less than payment in full of
  all amounts due and owing at such time shall not constitute a waiver of
  Payee's right to receive payment in full at such time or at any prior or
  subsequent time.

  The Maker hereby expressly authorizes the Payee to insert the date value is
  actually given in the blank space on the face hereof and on all related
  documents pertaining hereto.

  This Note may be secured by a security agreement, chattel mortgage, pledge
  agreement or like instrument (each of which is hereinafter called a "SECURITY
  AGREEMENT" AND ANY SECURITY AGREEMENT, THIS NOTE AND ANY OTHER DOCUMENT
  EVIDENCING OR SECURING THIS LOAN IS HEREINAFTER CALLED A "DEBT DOCUMENT").

  Time is of the essence hereof. If any installment or any other sum (not
  including any accelerated amount) due under this Note or any Security
  Agreement is not received when due, or within five (5) days thereafter, the
  Maker agrees to pay, in addition to the amount of each such installment or
  other sum, a late payment charge of five percent (5%) of the amount of said
  installment or other sum, but not exceeding any lawful maximum. If (i) Maker
  fails to make payment of any amount due hereunder within five (5) days after
  the due date; or (ii) Maker is in default under any Security Agreement, then
  the entire principal sum remaining unpaid, together with all accrued interest
  thereon and any other sum payable under this Note or any Security Agreement,
  at the election of Payee, shall immediately become due and payable, with
  interest thereon at the lesser of (x) two and one-half percent (2.5%) per
  annum plus the applicable non-default rate per annum under the Debt Documents;
  and (y) the maximum rate not prohibited by applicable law from the date of
  such accelerated maturity until paid (both before and after any judgment).

  Maker may prepay in full any indebtedness hereunder upon 5 days' notice to the
  Payee. The repayment shall be accompanied by payment of (i) all accrued and
  unpaid interest on the principal and the outstanding principal balance of this
  Note and (ii) a premium of 8% of the principal prepaid if such prepayment
  shall occur in Year 1, a premium of 6% of the principal prepaid if such
  prepayment shall occur in Year 2 and a premium of 4% of the principal prepaid
  if such prepayment shall occur in Year 3. There shall be no prepayment premium
  in Year 4 or thereafter. Year 1 will mean the period consisting of the 1st
  through the 12th installments under this Note and subsequent years will refer
  to the subsequent twelve monthly payment periods.

  The Maker and all sureties, endorsers, guarantors or any others (each such
  person, other than the Maker, an "OBLIGOR") who may at any time become liable
  for the payment hereof jointly and severally consent hereby to any and all
  extensions of time, renewals, waivers or modifications of, and all
  substitutions or releases of, security or of any party primarily or
  secondarily liable on this Note or any Security Agreement or any term and
  provision of either, which may be made, granted or consented to by Payee, and
  agree that suit may be brought and maintained against any one or more of them,
  at the election of Payee without joinder of


IMPORTANT NOTICE:
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

                                  PAGE 1 OF 4

  any other as a party thereto, and that Payee shall not be required first to
  foreclose, proceed against, or exhaust any security hereof in order to enforce
  payment of this Note. The Maker and each Obligor hereby waives presentment,
  demand for payment, notice of nonpayment, protest, notice of protest, notice
  of dishonor, and all other notices in connection herewith, as well as filing
  of suit (if permitted by law) and diligence in collecting this Note or
  enforcing any of the security hereof, and agrees to pay (if and to the extent
  permitted by law) all reasonable expenses incurred in collection, including
  Payee's reasonable actual attorneys' fees. Maker and each Obligor agrees that
  fees not in excess of twenty percent (20%) of the amount then due shall be
  deemed reasonable.

  Maker and Payee intend to strictly comply with all applicable federal and
  Virginia laws, including applicable usury laws (or the usury laws of any
  jurisdiction whose usury laws are deemed to apply to the Note or any other
  Debt Document despite the intention and desire of the parties to apply the
  usury laws of the Commonwealth of Virginia). Accordingly, the provisions of
  this paragraph shall govern and control over every other provision of this
  Note or any other Debt Document which conflicts or is inconsistent with this
  Section, even if such provision declares that it controls. As used in this
  paragraph, the term "INTEREST" includes the aggregate of all charges, fees,
  benefits or other compensation which constitute interest under applicable law,
  provided that, to the maximum extent permitted by applicable law, (a) any
  non-principal payment shall be characterized as an expense or as compensation
  for something other than the use, forbearance or detention of money and not as
  interest, and (b) all interest at any time contracted for, reserved, charged
  or received shall be amortized, prorated, allocated and spread, in equal parts
  during the full term of the obligations. In no event shall Maker or any other
  person be obligated to pay, or Payee have any right or privilege to reserve,
  receive or retain, (a) any interest in excess of the maximum amount of
  non-usurious interest permitted under the laws of the Commonwealth of Virginia
  or the applicable laws (if any) of the United States or of any other state, or
  (b) total interest in excess of the amount which Payee could lawfully have
  contracted for, reserved, received, retained or charged had the interest been
  calculated for the full term of the obligations. On each day, if any, that the
  interest rate (the "Stated Rate") called for under this Note or any other Debt
  Document exceeds the maximum non-usurious rate, the rate at which interest
  shall accrue shall automatically be fixed by operation of this sentence at the
  maximum non-usurious rate for that day. Thereafter, interest shall accrue at
  the Stated Rate unless and until the Stated Rate again exceeds the maximum
  non-usurious rate, in which case, the provisions of the immediately preceding
  sentence shall again automatically operate to limit the interest accrual rate
  to the maximum non-usurious rate. The daily interest rates to be used in
  calculating interest at the maximum non-usurious rate shall be determined by
  dividing the applicable maximum non-usurious rate by the number of days in the
  calendar year for which such calculation is being made. None of the terms and
  provisions contained in this Note or in any other Debt Document which directly
  or indirectly relate to interest shall ever be construed without reference to
  this paragraph, or be construed to create a contract to pay for the use,
  forbearance or detention of money at an interest rate in excess of the maximum
  non-usurious rate. If the term of any obligation is shortened by reason of
  acceleration of maturity as a result of any Default or by any other cause, or
  by reason of any required or permitted prepayment, and if for that (or any
  other) reason Payee at any time, including but not limited to, the stated
  maturity, is owed or receives (and/or has received) interest in excess of
  interest calculated at the maximum non-usurious rate, then and in any such
  event all of any such excess interest shall be canceled automatically as of
  the date of such acceleration, prepayment or other event which produces the
  excess, and, if such excess interest has been paid to Payee, it shall be
  credited pro tanto against the then-outstanding principal balance of Maker's
  obligations to Payee, effective as of the date or dates when the event occurs
  which causes it to be excess interest, until such excess is exhausted or all
  of such principal has been fully paid and satisfied, whichever occurs first,
  and any remaining balance of such excess shall be promptly refunded to its
  payor.

  THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
  CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY,
  THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE
  RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
  TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER
  AND PAYEE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
  AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT
  LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
  COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
  MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO
  ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
  NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
  TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION,
  THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

  This Note, any Security Agreement and all other Debt Documents constitute the
  entire agreement of the Maker and Payee with respect to the subject matter
  hereof and supersedes all prior understandings, agreements and
  representations, express or implied.

  No variation or modification of this Note, or any waiver of any of its
  provisions or conditions, shall be valid unless in writing and signed by an
  authorized representative of Maker and Payee. Any such waiver, consent,
  modification or change shall be effective only in the specific instance and
  for the specific purpose given.


IMPORTANT NOTICE:
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

  Any provision in this Note or any Security Agreement which is in conflict with
  any statute, law or applicable rule shall be deemed omitted, modified or
  altered to conform thereto.

  Upon receipt of an affidavit of an officer of Payee as to the loss, theft,
  destruction or mutilation of this Note or any Debt Document which is not of
  public record, and, in the case of any such loss, theft, destruction or
  mutilation, upon surrender and cancellation of such Note or other Debt
  Document, Maker will issue, in lieu thereof, a replacement Note or other Debt
  Document in the same principal amount thereof and otherwise of like tenor.

  It is understood and agreed that this Note and all of the Debt Documents were
  negotiated and have been or will be delivered to Payee in the Commonwealth of
  Virginia, which State the parties agree has a substantial relationship to the
  parties and to the underlying transactions embodied by this Note and the Debt
  Documents. Maker agrees to furnish to Payee at Payee's office in Alexandria,
  VA, all further instruments, certifications and documents to be furnished
  hereunder. The parties also agree that if collateral is pledged to secure the
  debt evidenced by this Note, that the state or states in which such collateral
  is located each have a substantial relationship to the parties and to the
  underlying transaction embodied by this Note and the Debt Documents.

  MAKER AGREES THAT THE PAYEE OF THIS NOTE SHALL HAVE THE OPTION BY WHICH STATE
  LAWS THIS NOTE SHALL BE GOVERNED AND CONSTRUED: (A) THE LAWS OF THE
  COMMONWEALTH OF VIRGINIA; OR (B) IF COLLATERAL HAS BEEN PLEDGED TO SECURE THE
  DEBT EVIDENCED BY THIS NOTE, THEN BY THE LAWS OF THE STATE OR STATES WHERE THE
  COLLATERAL IS LOCATED, AT PAYEE'S OPTION. THIS CHOICE OF STATE LAWS IS
  EXCLUSIVE TO THE PAYEE OF THIS NOTE. MAKER SHALL NOT HAVE ANY OPTION TO CHOOSE
  THE LAWS BY WHICH THIS NOTE SHALL BE GOVERNED. MAKER AND GUARANTORS HEREBY
  CONSENT TO THE EXERCISE OF JURISDICTION OVER IT BY ANY FEDERAL COURT SITTING
  IN VIRGINIA OR ANY VIRGINIA COURT SELECTED BY PAYEE, FOR THE PURPOSES OF ANY
  AND ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTE, THE LOAN
  AGREEMENT AND ALL OTHER DOCUMENTS. MAKER AND GUARANTORS IRREVOCABLY WAIVE, TO
  THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
  HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN ANY
  SUCH COURT, ANY CLAIM BASED ON THE CONSOLIDATION OF PROCEEDINGS IN SUCH COURTS
  IN WHICH PROPER VENUE MAY LIE IN DIVERGENT JURISDICTIONS, AND ANY CLAIM THAT
  ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
  INCONVENIENT FORUM. MAKER AND GUARANTORS HEREBY IRREVOCABLY WAIVE, TO THE
  FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
  LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, THE OTHER DOCUMENTS
  OR THE TRANSACTIONS CONTEMPLATED THEREBY.

  Confession of Judgment. In the event that this Note or any installment under
  this Note is not paid when due or within five days thereafter, whether by
  maturity or acceleration, Maker hereby appoints and constitutes Cindi E. Cohen
  and Lauri E. Cleary, either of whom may act (a Virginia attorney) as Maker's
  duly constituted attorney-in-fact to confess judgment pursuant to the
  provisions of Section 8.01-431 et seq. of the Code of Virginia of 1950, as
  amended, against Maker for all principal and interest due and payable under
  this Note, together with reasonable attorneys' fees and collection fees as
  provided in this Note (to the extent permitted by law), which judgment shall
  be confessed in the Clerk's Office of the Circuit Court of the City of
  Alexandria and/or Fairfax and/or Arlington Counties, Virginia. Maker shall,
  upon Payee's request, name such additional or alternative persons designated
  by Payee as Maker's duly constituted attorney-in-fact to confess judgment
  against Maker pursuant to the above Section. Upon request of Payee, Maker also
  shall agree to the designation of any additional circuit courts in the
  Commonwealth of Virginia in which judgment may be confessed against Maker. No
  single exercise of the power to confess judgment shall be deemed to exhaust
  the power and no judgment against fewer than all the persons constituting
  Maker shall bar any subsequent action or judgment against any one or more of
  such persons against whom judgment has not been obtained on this Note.


                                        PTC Therapeutics, Inc.

 ________________________               By:  _______________________
 (Witness)
 ________________________               Name:___________________________
 (Print name)
 ________________________               Title:______________________
 (Address)
                                        Federal Tax ID #: 04-3416587

                                        Address: 100 Corporate Court
                                                 South Plainfield, NJ 07080

IMPORTANT NOTICE:
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

                                  PAGE 3 OF 4

IMPORTANT NOTICE:
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

                                  PAGE 4 OF 4

                                                                    EXHIBIT 23.1

            Consent of Independent Registered Public Accounting Firm

The Board of Directors
PTC Therapeutics, Inc:

We consent to the use of our report dated March 31, 2006 with respect to the
balance sheets of PTC Therapeutics, Inc. as of December 31, 2004 and 2005, and
the related statements of operations, stockholders' equity (deficit) and
comprehensive loss, and cash flows for each of the years for the three-year
period ended December 31, 2005 and for the period from March 31, 1998
(inception) to December 31, 2005, included herein and to the reference to our
firm under the headings "Selected Financial Data" and "Experts" in the
prospectus.

/s/ KPMG LLP

Philadelphia, Pennsylvania
March 31, 2006