CONVERTIBLE LOAN AGREEMENT
This Agreement dated as of July 10, 1996, is among Modex Therapeutiques SA, a Swiss corporation ("Modex")
and CytoTherapeutics, Inc. ("CTI"), a Delaware corporation.
CTI currently owns 6'500 shares of Modex common stock.
Modex wishes to borrow from CTI, and CTI wishes to lend to Modex, a total amount of SFr. 3'600'000.--in the
form of a convertible subordinated loan.
Parties refer to Section 7 of the Statutes of Modex which provides for a conditional capital stock increase, in
order to enable Modex to issue the necessary number of shares required in case of conversion of the hereunder
defined loan, and of the loan agreed today with Societe Financiere Valoria SA, another shareholder of Modex.
Parties agree as follows:
1. Total Amount of Loan
The total amount of the loan is of SFr. 3'600,000.--
2. Delivery of the Funds by CTI
2.1. CTI will immediately provide for a transfer to the bank account of Modex at Banque Cantonale Vaudoise
no.-911.58 12 the amount of SFr. 1'200'000.--. Modex will acknowledge receipt of that amount and
acknowledge owing SFr. 1'200'000.--to CTI, with reference to the present Agreement.
2.2. On the second anniversary of the present Agreement, a similar transfer of the amount of SFr. 1'400'000.--
will be made by CTI, provided that on or before such second anniversary Modex has achieved one of the
following milestones (1) anemia: the earlier of (a) delivery for at least 90 days of 300 units per day of EPO in a
large animal model or functional evidence of a therapeutic benefit of EPO in large animal model or (b)
commencement of a Phase I clinical trial in humans or (2) diabetes: large animal off insulin for 90 days or (3)
the earlier of (a) FaFa rat returned to normal body weight or
(b) demonstrated weight loss in large animal model or in humans. Modex will acknowledge receipt of that amount
3. Repayment of Loan by Modex
All unpaid principal shall be due and payable on the earlier to occur of th