Exhibit 10.1

 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission.

 

EXECUTION VERSION

 

 

ASSET PURCHASE AGREEMENT

 

Between

 

VERASTEM, INC.

 

and

 

S*BIO PTE LTD.

 

 

Dated as of May 10, 2012

 

 

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TABLE OF CONTENTS

 

 

Page

ARTICLE I Purchase and Sale of Acquired Assets

 

1

 

 

 

 

SECTION 1.01 The Acquisition

 

1

 

SECTION 1.02 Acquired Assets and Excluded Assets

 

1

 

SECTION 1.03 Assumption of Certain Liabilities

 

2

 

SECTION 1.04 Contingent Consideration

 

4

 

SECTION 1.05 Withholding

 

9

 

 

 

 

ARTICLE II The Closing

 

10

 

 

 

 

 

SECTION 2.01 Closing

 

10

 

SECTION 2.02 Transactions to be Effected at the Closing

 

10

 

 

 

ARTICLE III Representations and Warranties of Seller

 

11

 

 

 

 

 

SECTION 3.01 Organization, Standing and Power

 

11

 

SECTION 3.02 Authority; Execution and Delivery; Enforceability

 

11

 

SECTION 3.03 No Conflicts; Consents

 

11

 

SECTION 3.04 Contracts

 

12

 

SECTION 3.05 Title to Assets

 

13

 

SECTION 3.06 Compliance with Laws; Permits

 

13

 

SECTION 3.07 Intellectual Property

 

14

 

SECTION 3.08 Taxes

 

16

 

SECTION 3.09 Litigation

 

16

 

SECTION 3.10 Absence of Changes or Events

 

17

 

SECTION 3.11 Voting Requirements; Consents

 

17

 

SECTION 3.12 Transactions with Subsidiaries

 

17

 

SECTION 3.13 Consents

 

17

 

SECTION 3.14 Brokers or Finders

 

17

 

 

 

 

ARTICLE IV Representations and Warranties of Buyer

 

17

 

 

 

 

 

SECTION 4.01 Organization, Standing and Power

 

17

 

SECTION 4.02 Authority; Execution and Delivery; Enforceability

 

17

 

SECTION 4.03 No Conflicts; Consents

 

18

 

SECTION 4.04 Litigation

 

18

 

SECTION 4.05 Access

 

18

 

SECTION 4.06 No Buyer Vote Required

 

18

 

SECTION 4.07 Financing

 

19

 

 

 

 

ARTICLE V Covenants

 

19

 

 

 

 

 

SECTION 5.01 Confidentiality

 

19

 

SECTION 5.02 Expenses

 

19

 

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SECTION 5.03 Post-Closing Cooperation

 

19

 

SECTION 5.04 Publicity

 

19

 

SECTION 5.05 Further Assurances

 

20

 

SECTION 5.06 Purchase Price Allocation

 

20

 

SECTION 5.07 Tax Matters

 

20

 

SECTION 5.08 Non-Competition

 

21

 

SECTION 5.09 Waiver

 

22

 

 

 

 

ARTICLE VI Indemnification

 

23

 

 

 

 

 

SECTION 6.01 Indemnification by Seller and Buyer

 

23

 

SECTION 6.02 Termination of Indemnification

 

24

 

SECTION 6.03 Exclusive Monetary Remedy

 

25

 

SECTION 6.04 Procedures

 

25

 

SECTION 6.05 Set Off Right

 

26

 

SECTION 6.06 Treatment of Indemnity Payments

 

27

 

SECTION 6.07 No Implied Representations

 

27

 

 

 

 

ARTICLE VII General Provisions

 

27

 

 

 

 

 

SECTION 7.01 Survival of Representations and Covenants

 

27

 

SECTION 7.02 Assignment

 

27

 

SECTION 7.03 No Third-Party Beneficiaries

 

27

 

SECTION 7.04 Notices

 

28

 

SECTION 7.05 Interpretation; Annexes, Exhibits and Schedules; Certain
Definitions

29

 

SECTION 7.06 Counterparts

 

38

 

SECTION 7.07 Entire Agreement

 

38

 

SECTION 7.08 Severability

 

38

 

SECTION 7.09 Specific Enforcement

 

38

 

SECTION 7.10 Arbitration of Disputes

 

38

 

SECTION 7.11 Governing Law

 

39

 

SECTION 7.12 Amendments and Waivers

 

39

 

SECTION 7.13 Disclosure Schedules

 

40

 

Schedules

 

 

 

Purchase Price Allocation

Schedule 5.06

Acquired Patents

Schedule A

 

 

Exhibits

 

 

 

Patent Assignment

Exhibit A

Lead Compound Structure

Exhibit B

[**] and [**] Patents

Exhibit C

Seller’s Knowledge Representatives

Exhibit D

Buyer’s Knowledge Representatives

Exhibit E

 

ii

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This Asset Purchase Agreement (this “Agreement”) is entered into as of May 10,
2012, by and between Verastem, Inc., a Delaware corporation (“Buyer”), and S*Bio
Pte Ltd, a company organized under the laws of Singapore (“Seller”).

 

INTRODUCTION

 

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, certain assets of Seller and its Subsidiaries upon the terms and subject
to the conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained in this Agreement, the parties
hereto agree as follows:

 

ARTICLE I

 

Purchase and Sale of Acquired Assets

 

SECTION 1.01  The Acquisition.  On the terms and subject to the conditions of
this Agreement, at the Closing Seller shall sell, assign, transfer, convey and
deliver to Buyer, and Buyer shall purchase from Seller, all the right, title and
interest, as of the Closing, of Seller and any of its Subsidiaries in, to and
under the Acquired Assets, free and clear of all Liens, for (a) an aggregate
upfront payment of $350,000 (the “Upfront Payment”), payable as set forth in
Section 2.02(c), (b) the contingent right to potentially receive the Contingent
Consideration, on the terms and subject to the conditions set forth in
Section 1.04, and (c) the assumption of the Assumed Liabilities (the “Purchase
Price”).  The purchase and sale of the Acquired Assets and the assumption of the
Assumed Liabilities are referred to in this Agreement as the “Acquisition”.

 

SECTION 1.02  Acquired Assets and Excluded Assets.

 

(a)                                 The term “Acquired Assets” means the
following:

 

(i)                                     all of the Acquired Compounds;

 

(ii)                                  all Acquired Patents, all inventions
claimed therein, and all Program Know-How, including all copyrights in the
Program Know-How and all tangible embodiments of Program Know-How (collectively
the “Assigned Intellectual Property”), and the right to sue and collect damages
related thereto for past, present and future infringement of any of the
foregoing;

 

(iii)                               all Patent Files with respect to the
Acquired Patents (the “Acquired Patent Files”);

 

(iv)                              all laboratory notebooks or portions thereof,
to the extent relating to the Acquired Compounds (or true and complete copies
thereof) (such notebooks or portions, the “Acquired Notebooks”);

 

1

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(v)                                 all of Seller’s and any of its Subsidiaries’
inventory of [**] and any other Acquired Compounds as of the Closing Date (the
“Acquired Inventory”); and

 

(vi)                              all rights and claims to the extent relating
to the items described in paragraphs (i) through (v) of this Section 1.02(a) or
to any Assumed Liability, and all Guarantees, warranties, indemnities and
similar rights in favor of Seller to the extent related to any such Acquired
Asset or any Assumed Liability.

 

(b)                                 The term “Excluded Assets” means:

 

(i)                                     all assets and properties of Seller or
its Subsidiaries of whatever kind and nature not specifically described in
Section 1.02(a);

 

(ii)                                  all rights of Seller under this Agreement
and the Ancillary Agreements;

 

(iii)                               all cash, cash equivalents, accounts
receivable, marketable securities and intercompany accounts receivable of the
Seller;

 

(iv)                              all minute books, stock books, Tax returns and
similar corporate records of the Seller;

 

(v)                                 all assets (including Intellectual Property)
of the Seller used in the Seller’s other businesses and programs, including
Seller’s [**], other than the Acquired Assets;

 

(vi)                              all rights under insurance policies, including
all claims, refunds and credits due or to become due under such policies; and

 

(vii)                           any refund of Taxes of the Seller attributable
to any taxable period (or portion thereof) that ends on or before the Closing
Date.

 

SECTION 1.03  Assumption of Certain Liabilities.

 

(a)                                 Upon the terms and subject to the conditions
of this Agreement, Buyer shall assume, effective as of the Closing, and from and
after the Closing Buyer shall pay, perform and discharge, all of the following
obligations and liabilities of the Seller, whether express or implied,
liquidated, absolute, accrued, matured, unmatured, contingent or otherwise,
known or unknown (the “Assumed Liabilities”):

 

(i)                                     all liabilities and obligations arising
out of or relating to the ownership or use of the Acquired Assets, in each case
relating to or arising from any fact, circumstance, occurrence, condition, act
or omission existing (x) on or occurring prior to the Closing (except, in each
case, to the extent arising out of or relating to (A) any breach by Seller or
any of its Subsidiaries of, or nonperformance by Seller or any of its
Subsidiaries under, any Contract prior to the Closing, or (B) any violation of
Law by

 

2

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Seller or any of its Subsidiaries prior to the Closing) or (y) following the
Closing, other than due to a breach by Seller under this Agreement;

 

(ii)                                  all liabilities and obligations for Taxes
(x) related to the Acquired Assets or the operation of the Acquired Assets that
are attributable to any taxable period (or portion thereof) beginning after the
Closing Date or (y) which are the responsibility of Buyer under Section 5.07;
and

 

(iii)                               any other liabilities or obligations which
the Buyer specifically assumes pursuant to the terms of this Agreement.

 

(b)                                 Notwithstanding any other provision of this
Agreement or any Ancillary Agreement to the contrary, and regardless of any
disclosure to Buyer, Buyer shall not assume or be liable for any liability,
obligation or commitment of Seller or any of its Subsidiaries of any kind
(whether express or implied, liquidated, absolute, accrued, matured, unmatured,
contingent or otherwise (including any liability, obligation or commitment based
on any theory of successor liability) or known or unknown) other than the
Assumed Liabilities (the “Excluded Liabilities”).  The Excluded Liabilities,
which shall be retained and paid, performed and discharged when due by Seller,
include the following:

 

(i)                                     any liability, obligation or commitment
of Seller or any of its Subsidiaries that relates to, or that arises from, any
Excluded Asset, or that arises from the distribution to or ownership by Seller
or any of its Subsidiaries of any Excluded Asset, or that is associated with the
realization of the benefits of any Excluded Asset, whether accruing prior to, at
or after the Closing;

 

(ii)                                  any liability, obligation or commitment of
Seller or any of its Subsidiaries relating to or arising from any actual or
alleged breach by Seller or any of its Subsidiaries of, or nonperformance by
Seller or any of its Subsidiaries under, any Contract prior to the Closing;

 

(iii)                               (A) any Taxes of Seller, (B) any Taxes
related to the Acquired Assets that were incurred in or are attributable to any
taxable period (or portion thereof) ending on or before the Closing Date,
(C) any Taxes of another person for which Seller is liable, including Taxes for
which Seller is liable by reason of Treasury Regulations Section 1.1502-6 (or
any comparable or similar provision of U.S. federal, state, local, Singapore or
other Law), being a transferee or successor, any contractual obligation or
otherwise, and (D) any income, withholding, transfer, sales, use or other Taxes
arising in connection with the consummation of the transactions contemplated by
this Agreement (including any income or withholding Taxes arising as a result of
the transfer by Seller to Buyer of the Acquired Assets);

 

(iv)                              any liability, obligation or commitment for
fees and expenses incurred by Seller or any of its Subsidiaries (including the
fees and expenses of legal counsel, and fees and expenses of any accountant,
auditor, broker, financial advisor or consultant retained by or on behalf of
Seller or any of its Subsidiaries) arising from or in

 

3

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connection with this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby;

 

(v)                                 any liability, obligation or commitment of
Seller or any of its Subsidiaries to any of their respective Affiliates;

 

(vi)                              any Indebtedness of Seller or any of its
Subsidiaries;

 

(vii)                           any liability, obligation or commitment of
Seller or any of its Subsidiaries relating to (A) the employment or termination
of employment (including termination in connection with the transactions
contemplated hereby) with Seller or any of its Subsidiaries of any current or
former director, officer, employee, contractor or consultant of Seller or any of
its Affiliates or (B) any Benefit Plan or Benefit Agreement; and

 

(viii)                        any Controlled Group Liability with respect to
Seller or any Commonly Controlled Entity.

 

(c)                                  Seller shall take all actions necessary to
ensure that Buyer shall acquire the Acquired Assets free and clear of all
liabilities, obligations and commitments of Seller and its Subsidiaries, other
than the Assumed Liabilities, and free and clear of all Liens.

 

SECTION 1.04  Contingent Consideration.

 

(a)                                 Milestone Contingent Payments.

 

(i)                                     Buyer shall pay Seller the Milestone
Contingent Payment below after the first achievement of the associated Milestone
Event below by any Selling Person:

 

“Milestone Event”

 

“Milestone Contingent Payment”

 

(A) [**]

 

$

[**]

 

(B) [**]

 

$

[**]

 

(C) [**]

 

$

[**]

 

(D) [**]

 

$

[**]

 

(E) [**]

 

$

[**]

 

 

4

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“Milestone Event”

 

“Milestone Contingent Payment”

 

(F) [**]

 

$

[**]

 

(G) [**]

 

$

[**]

 

(H) [**]

 

$

[**]

 

(I) [**]

 

$

[**]

 

 

For the sake of clarity, each Milestone Contingent Payment is payable only once
with respect to the first achievement of the relevant Milestone Event.  In no
event shall all Milestone Contingent Payments, in the aggregate, total more than
$20,950,000.

 

(ii)                                  The relevant Milestone Contingent Payment
shall be payable as follows:

 

(A)                               within [**] Business Days after achievement of
the corresponding Milestone Event, if such Milestone Event is first achieved by
Buyer or any of its Affiliates; or

 

(B)                               within [**] days after achievement of the
corresponding Milestone Event, if such Milestone Event is first achieved by a
Selling Person other than Buyer or any of its Affiliates.

 

(b)                                 Sales-Based Contingent Payments.

 

(i)                                     Subject to Sections 1.04(b)(ii) and
1.04(b)(iii), Buyer shall pay Seller the following tiered Sales-Based Contingent
Payments on Annual Net Sales of each Product, on a Product-by-Product basis, in
each calendar year at the incremental rates set forth below:

 

Annual Net Sales Tiers:

 

“Sales-Based
Contingent Payments”

The portion of Annual Net Sales which is less than or equal to $[**]

 

[**]% of such portion of Annual Net Sales

The portion of Annual Net Sales which is greater than $[**], but less than or
equal to $[**]

 

[**]% of such portion of Annual Net Sales

 

5

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Annual Net Sales Tiers:

 

“Sales-Based
Contingent Payments”

The portion of Annual Net Sales which is greater than $[**]

 

[**]% of such portion of Annual Net Sales

 

(ii)                                  Sales-Based Contingent Payment Period. 
Sales-Based Contingent Payments shall be payable with respect to Net Sales of a
Product in a country during the applicable Sales-Based Contingent Payment Period
for such Product in such country.  Buyer shall pay the relevant Sales-Based
Contingent Payment within [**] days after the end of each Calendar Quarter
during the applicable Sales-Based Contingent Payment Period; provided, however,
that, to the extent that any Sales-Based Contingent Payment is due based on
Annual Net Sales by a Selling Person other than Buyer or any of its Affiliates,
Buyer may pay the relevant portion of such Sales-Based Contingent Payment within
[**] days after the end of the relevant Calendar Quarter during the applicable
Sales-Based Contingent Payment Period.

 

(iii)                               Required Third Party Payments.  If a Selling
Person obtains a license under any Patent Right owned or controlled by a third
party (other than another Selling Person) that would, in the absence of such
license, be infringed by the manufacture, use, sale, offer for sale or
importation of the Acquired Compound contained in a Product in a country (but
excluding any such Patent Right which covers only the formulation or method of
manufacture of such Acquired Compound), then fifty percent (50%) of the
royalties actually paid to such third party with respect to sales of such
Product in such country (such fifty percent (50%) portion, the “Stacking
Payments”) may be deducted from the Sales-Based Contingent Payments due to
Seller with respect to such Product in such country; provided, however, that in
no event shall the Sales-Based Contingent Payments due pursuant to
Section 1.04(b)(i) (subject to Section 1.04(b)(ii)) in any Calendar Quarter be
reduced by more than fifty percent (50%) as a result of any and all such
Stacking Payments in the aggregate.  In the event that the Selling Persons may
not fully deduct the Stacking Payments as a result of the proviso in the
immediately preceding sentence, the Selling Persons may carry forward any
remaining portion of the Stacking Payments to be credited to future Calendar
Quarters, subject, in each future Calendar Quarter, to the proviso in the
immediately preceding sentence.

 

(c)                                  Payment Satisfaction.

 

(i)                                     The obligation of Buyer to pay the
Contingent Consideration hereunder may be satisfied by any of Buyer, any of its
Affiliates or any Selling Person; provided, however, that, except as provided in
Section 1.04(c)(iii), Buyer shall remain liable on a primary basis for such
payment obligations.

 

(ii)                                  All Contingent Consideration shall be paid
in Dollars by wire transfer to an account designated in advance by Seller.

 

6

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(iii)                               Buyer shall not assign, convey or transfer
Buyer’s rights in all or substantially all the Acquired Assets and all of
Buyer’s rights and obligations under this Agreement, following the Closing Date,
to any Person, unless either:

 

(A)                               this Agreement is concurrently assigned in its
entirety to such Person (whether by operation of Law or otherwise) such that
Seller is in privity of contract with such Person, in which case, following
notice thereof to Seller, Buyer shall have no further obligations under this
Agreement and such Person shall be deemed to be the “Buyer” hereunder; or

 

(B)                               such Person has expressly assumed the
obligation to pay all Contingent Payments when due and the obligation to perform
every other duty and covenant of Buyer under this Agreement, provided that Buyer
shall remain liable for the payment of all Contingent Payments when due and the
performance of every duty and covenant of Buyer under this Agreement.

 

For the sake of clarity, the foregoing shall not apply to any license by Buyer
of rights under any or all of the Acquired Assets.

 

(d)                                 Diligence.  From and after the Effective
Date, Buyer shall, and shall cause each Selling Person with rights to a Product
to, use Commercially Reasonable Efforts to achieve the Milestone Events that
have then not been achieved as to which such rights are applicable and, during
the term of any Sales-Based Contingent Payment Period with respect to an Product
in a country, to commercialize such Product in such country.

 

(e)                                  Reporting.

 

(i)                                     Buyer shall provide Seller, by
March 31st of each calendar year, with written summaries of the efforts of the
Selling Persons to achieve each of the Milestone Events with respect to which
the relevant Milestone Contingent Payment has not yet been paid.  Within [**]
days after receipt of such summary, if the Seller requests a meeting with
representatives of Buyer to discuss such report, Buyer shall use its
commercially reasonable efforts to make available for such a meeting (which
meeting shall be by teleconference for a reasonable period of time) a reasonable
number of those of its employees and representatives as are responsible for the
applicable activities set forth in such summaries.  In no event shall Buyer be
required to make any such employees or representatives available for more than
[**] per calendar year.  In no event shall Buyer or any such employee or
representative be required to disclose to Seller any information not otherwise
required to be disclosed by Buyer pursuant to this Agreement and Seller shall
retain all such information in confidence in accordance with Section 5.01.

 

(ii)                                  Buyer shall provide written notice to
Seller of the first achievement of any of the Milestone Events as follows:

 

(A)                               within [**] Business Days after achievement of
such Milestone Event, if such Milestone Event is first achieved by Buyer or any
of its Affiliates; or

 

7

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(B)                               within [**] days after achievement of such
Milestone Event, if such Milestone Event is first achieved by a Selling Person
other than Buyer or any of its Affiliates.

 

(iii)                               During the Sales-Based Contingent Payment
Period, Buyer shall deliver to Seller, within [**] days after the end of each
Calendar Quarter, a written report indicating, on a Product-by-Product and
country-by-country basis, gross sales and Net Sales, the calculation of
Sales-Based Contingent Payments with respect thereto (including deductions,
itemized by major category) and the prices and the number of units of Product
sold, each determined in accordance with GAAP; provided, however, that if, under
the agreement between Buyer or its Affiliate and any Selling Person other than
Buyer or its Affiliates, such Selling Party is not obligated to disclose to
Buyer or its Affiliate all of the items of information listed above, then
Buyer’s obligation shall be to provide Seller with the same information that
such Selling Person provides to Buyer or its Affiliate.  Such amounts shall be
expressed in Dollars, and such reports shall include the rates of exchange used
to convert to Dollars from the currency in which such sales were made or
payments received.

 

(iv)                              During the Contingent Payment Period and for
[**] years thereafter, Buyer shall, and shall cause each of the other Selling
Persons to, keep such complete and accurate books and records as may be
reasonably necessary to ascertain the amounts of any Contingent Consideration
owed hereunder.  This Section 1.04 does not require Buyer or any other Selling
Person to maintain any such record for more than [**] calendar years.

 

(v)                                 During the Contingent Payment Period and for
[**] years thereafter, upon the written request of Seller, Buyer shall permit an
independent public accountant (an “Accountant”) selected by Seller, reasonably
satisfactory to Buyer and subject to reasonable confidentiality obligations to
Buyer, to have reasonable access upon reasonable prior notice and during normal
business hours, but no more than [**] during any calendar year, to review
Buyer’s financial records specified in Section 1.04(e)(iv) for the purpose of
determining the accuracy of the reports described in Sections 1.04(e)(i),
(ii) or (iii) (an “Audit”).  In addition, Buyer shall either (A) require each
other Selling Person to permit an Accountant selected by Seller, reasonably
satisfactory to Buyer and such Selling Person and subject to reasonable
confidentiality obligations to such Selling Person, to have reasonable access
during the Contingent Payment Period and for [**] thereafter, upon reasonable
prior notice and during normal business hours, upon the written request of
Seller but no more than [**] during any calendar year, to review such Selling
Person’s financial records specified in Section 1.04(e)(iv) for the purpose of
conducting an Audit, or (B) upon the written request of Seller but no more than
[**] during any calendar year, conduct, or have an Accountant selected by Buyer,
reasonably satisfactory to Seller and such Selling Person and subject to
reasonable confidentiality obligations to such Selling Person, conduct an Audit
upon reasonable prior notice and during normal business hours of such Selling
Person, to review such Selling Person’s financial records specified in
Section 1.04(e)(iv) for the purpose of conducting an Audit.  Seller shall have
no right to obtain any books or records of any Selling Person.  The Accountant’s
report of any Audit shall be provided concurrently to Seller and Buyer.  A

 

8

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Selling Person’s financial records shall not be subject to audit more than [**]
by Seller, unless after an accounting period has been audited by Seller, such
Selling Person restates its financial results for such accounting period, in
which event Seller may conduct [**] of such records in accordance with this
Section 1.04(e)(v).  Buyer or Seller shall, if necessary, promptly pay to the
other party any amount underpaid or overpaid, respectively, as reflected in the
results of such Audit.  Seller shall bear (and with respect to any Audit
described in clause (B) above, reimburse Buyer within [**] days after receipt of
an invoice for) the full cost of such Audit, unless such Audit discloses an
underpayment by Buyer of five percent (5%) or more of the amount of Sales-Based
Contingent Payments due under this Agreement in any calendar year covered by
such Audit, in which case Buyer shall bear the full cost of Seller’s reasonable
out-of-pocket expenses for such Audit.

 

(f)                                   Payment Period.  The obligations of Buyer
with respect to the Milestone Events and Milestone Contingent Payments,
including the obligations under Sections 1.04(d) with respect to the Milestone
Events and the obligations under Sections 1.04(e)(i) and 1.04(e)(ii), shall
terminate on expiration of the Contingent Payment Period, if not earlier
satisfied.

 

(g)                                  Overdue Payments.  Any Contingent Payment
not paid when due shall bear interest from the due date until the date of
payment thereof at the rate of the one-month London Interbank Offered Rate
(“LIBOR”) as quoted in The Wall Street Journal (or if it no longer exists, a
similarly authoritative source) plus three hundred (300) basis points; provided,
that interest shall not accrue at a rate that exceeds the maximum rate permitted
by applicable law.  The payment of such interest shall not limit Seller from
exercising any other rights it may have as a consequence of the lateness of any
payment.

 

(h)                                 Payment in US Dollars.  All payments
hereunder shall be payable in U.S. dollars.  With respect to each Calendar
Quarter, for countries other than the United States, whenever conversion of
payments from any foreign currency shall be required, such conversion shall be
made at the rate of exchange used throughout the accounting system of the
Selling Person for such Calendar Quarter.

 

SECTION 1.05  Withholding.  Buyer will be entitled to deduct and withhold from
the amounts otherwise payable by it pursuant to this Agreement to any Person,
such amounts as it is legally required to deduct and withhold with respect to
the making of such payment under the Code, or any provision of state, local or
foreign Tax Law, and to collect any necessary Tax forms, including Forms W-8 or
W-9, as applicable, or any similar information, from Seller and any other
recipients of payments hereunder and shall timely pay such Taxes to the proper
Tax authority and send proof of payment to Seller within [**] days following
such payments.  In the event that any amount is so deducted and withheld, and
properly remitted, such amount will be treated for all purposes of this
Agreement as having been paid to the Person to whom the payment from which such
amount was withheld was made.

 

9

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ARTICLE II

 

The Closing

 

SECTION 2.01  Closing.  The closing of the Acquisition (the “Closing”) shall
take place at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109, USA, at 10:00 a.m. Boston time immediately
following the execution and delivery of this Agreement by Buyer and Seller.  The
date on which the Closing occurs is referred to in this Agreement as the
“Closing Date”.

 

SECTION 2.02  Transactions to be Effected at the Closing.  The parties hereby
acknowledge and agree that the following actions have been taken or are being
taken concurrently with the Closing and as a condition thereof, in each case in
the form and pursuant to the method as Buyer shall reasonably specify:

 

(a)                                 Acquired Assets.  The transfer, sale,
conveyance and assignment of the Acquired Assets shall be effectuated by the
execution and delivery at the Closing by Buyer and Seller of one or more bills
of sale and one or more patent assignment documents (including a patent
assignment in the form attached as Exhibit A), together with any reasonably
necessary declarations or other filings, and such other instruments of transfer,
conveyance and assignment as may be required under applicable Law or as Buyer
shall reasonably request to vest in Buyer good and valid title to the Acquired
Assets, in form and substance reasonably acceptable to Seller and Buyer (all
such documents that are executed and delivered by Seller in connection with the
Closing, the “Ancillary Agreements”).

 

(i)                                     On the Closing Date, Seller shall
instruct Seller’s patent counsel in writing that Buyer is the sole owner of the
Acquired Patents and the Acquired Patent Files held by Seller’s patent counsel
and that Seller’s patent counsel should henceforth take instructions in respect
of the Acquired Patents and the Acquired Patent Files solely from Buyer.

 

(ii)                                  As promptly as practicable, and in any
event within [**], following the Closing, Seller shall deliver to Buyer, at such
address as Buyer specifies in writing to Seller at Closing, copies of those
portions of Seller’s and any of its Subsidiaries’ chemistry and biology
laboratory notebooks that constitute part of the Acquired Notebooks, at Buyer’s
expense for shipping and handling costs.

 

(iii)                               On or within [**] following the Closing,
Seller shall ship the Acquired Inventory to Buyer at such address as Buyer
specifies in writing to Seller at Closing, at Buyer’s expense for shipping and
handling costs.

 

(iv)                              Except as set forth above regarding Acquired
Patent Files and Acquired Notebooks, on or promptly after Closing, Seller shall
also deliver to Buyer, at such address as Buyer specifies in writing to Seller
at Closing, any electronic files and original documents (or, if no originals
exist and Seller or its Subsidiaries only have copies thereof, such copies)
that, in each case, are within the Acquired Assets, at Buyer’s expense for
shipping and handling costs.

 

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(b)                                 Assumed Liabilities.  Seller shall assign
and transfer to Buyer, and Buyer shall assume, the Assumed Liabilities by the
execution and delivery at the Closing by Buyer and Seller of one or more
Ancillary Agreements; provided that the terms of such instruments shall not
result in an increase in the obligations of Buyer beyond those expressly set
forth in this Agreement.

 

(c)                                  Payment of Upfront Payment.  Buyer shall
deliver in cash, by wire transfer to Seller, an amount equal to the Upfront
Payment.

 

ARTICLE III

 

Representations and Warranties of Seller

 

Except as set forth in the disclosure schedule (with specific references to the
section of this Agreement to which the information stated in such disclosure
relates) delivered by Seller to Buyer (the “Disclosure Schedule”), Seller hereby
represents and warrants to Buyer as follows:

 

SECTION 3.01  Organization, Standing and Power.  Seller and each of its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized.  Seller
and each of its Subsidiaries has all requisite corporate power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold and operate its
properties and assets and to carry on its business as presently conducted. 
Seller has delivered to Buyer true and complete copies of its charter, by-laws
and other organizational documents, in each case as amended through the date of
this Agreement.  There is no predecessor entity of Seller or any of its
Subsidiaries, and neither Seller nor any of its Subsidiaries is the surviving
entity resulting from any merger.

 

SECTION 3.02  Authority; Execution and Delivery; Enforceability.  Seller has all
requisite corporate power and authority to execute and deliver this Agreement
and the Ancillary Agreements to which it is a party, to consummate the
Acquisition and the other transactions contemplated hereby and thereby and to
comply with the provisions hereof and thereof.  The execution and delivery by
Seller of this Agreement and the Ancillary Agreements to which it is a party,
the consummation by Seller of the Acquisition and the other transactions
contemplated hereby and thereby and the compliance by Seller with the provisions
hereof and thereof have been duly authorized by all necessary corporate action. 
The Board of Directors has declared that it is in the commercial interests of
the Seller to enter into the Acquisition and approved the Acquisition and the
terms of, and the transactions contemplated by, this Agreement.  Seller has duly
executed and delivered this Agreement and each Ancillary Agreement to which it
is a party, and, assuming the due authorization, execution and delivery by
Buyer, this Agreement and the Ancillary Agreements to which Seller is a party
constitute its legal, valid and binding obligation, enforceable against it in
accordance with their terms, except to the extent that their enforceability may
be subject to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and to
general equitable principles.

 

SECTION 3.03  No Conflicts; Consents.  The execution and delivery by Seller of
this Agreement and each Ancillary Agreement to which it is a party, the
consummation of the

 

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Acquisition and the other transactions contemplated hereby and thereby and
compliance by Seller with the terms hereof and thereof do not and will not
conflict with, or result in any violation or breach of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancelation or acceleration of any obligation or to loss of a
benefit under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any other Person under, or result in the creation of any Lien
upon any of the Acquired Assets under, (a) any provision of the charter or
by-laws of Seller or any of its Subsidiaries, (b) any Contract to which Seller
or any of its Subsidiaries is a party or by which any of the Acquired Assets are
bound or (c) any injunction, judgment, order, decree or ruling (“Judgment”) or
statute, law (including common law), ordinance, rule or regulation (“Law”)
applicable to Seller or any of its Subsidiaries or any of their respective
properties or assets (including any Acquired Asset).  No consent, approval,
license, permit, order or authorization (“Consent”) of, or registration,
declaration or filing with, any Federal, state or local, domestic or foreign,
government or any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a “Governmental
Entity”) is required to be obtained or made by or with respect to Seller or any
of its Subsidiaries in connection with the execution and delivery of this
Agreement or any Ancillary Agreement, the consummation of the Acquisition or the
other transactions contemplated hereby or thereby (alone or in combination with
any other event) or the compliance with the provisions hereof or thereof.

 

SECTION 3.04  Contracts.

 

(a)                                 Neither Seller nor any of its Subsidiaries
is a party to or bound by:

 

(i)                                     a Contract granting a Lien upon any
Acquired Asset;

 

(ii)                                  a Contract containing a covenant not to
compete or other similar restriction that may limit, in any respect, the use of
any Acquired Asset by Buyer after Closing;

 

(iii)                               a Contract containing any provisions
(A) prohibiting or imposing any restrictions on the assignment of all or any
portion of the Acquired Assets to Buyer or (B) having the effect of providing
that the consummation of any of the transactions contemplated by this Agreement
or the Ancillary Agreements (alone or in combination with any other event) or
the execution and delivery of this Agreement or the Ancillary Agreements (alone
or in combination with any other event) will conflict with, result in a
violation or breach of, or constitute a default under (with or without notice or
lapse of time, or both), such Contract or give rise under such Contract to any
right of, or result in, a termination, right of first refusal, amendment,
revocation, cancelation or acceleration, or loss of benefit, or the creation of
any Lien in or upon any of the Acquired Assets, or to any increased, guaranteed,
accelerated or additional rights or entitlements of any Person; or

 

(iv)                              a Contract other than as set forth above that
restricts the use or operation of the Acquired Assets.

 

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SECTION 3.05  Title to Assets.  Other than Assigned Intellectual Property that
is covered by Section 3.07, as of the Closing Date (but prior to giving effect
to the Closing), Seller has good, valid and marketable title to the Acquired
Assets free and clear of all mortgages, liens, security interests, charges,
easements, leases, subleases, covenants, rights of first refusal, options,
claims, restrictions or encumbrances of any kind (collectively, “Liens”), other
than Permitted Encumbrances.

 

SECTION 3.06  Compliance with Laws; Permits.

 

(a)                                 Seller and its Subsidiaries are currently
operating and have been and are in compliance with all Laws and Judgments
applicable to the conduct or operation of Seller’s business related to the
Acquired Assets.  Neither Seller nor any of its Subsidiaries has received a
notice or other written communication alleging a possible violation of any Law
or Judgment applicable to the Acquired Assets.  No approvals, authorizations,
certificates, filings, franchises, licenses, notices and permits of or with any
Governmental Entities (“Permits”) are necessary for the conduct of Seller’s
business related to the Acquired Assets as currently conducted.

 

(b)                                 Seller and its Subsidiaries have, and to
Seller’s Knowledge, any contractors to Seller or its Subsidiaries have,
developed, tested, manufactured, stored and disposed of, as applicable, the
Acquired Compounds in compliance with applicable Law, including, where
applicable, those requirements relating to the FDA’s, EMA’s, MHLW’s and any
other Governmental Entity’s current good laboratory practices.

 

(c)                                  Neither Seller nor any of its Subsidiaries
has ever (i) imported for sale, exported for sale, marketed for sale, sold,
offered for sale, distributed for sale, processed for sale, packaged for sale or
otherwise commercialized any Acquired Compounds, or (ii) conducted, or had
conducted on their behalf, any clinical trials of any Acquired Compounds.

 

(d)                                 Neither Seller nor any of its Subsidiaries
nor any of their respective employees or consultants, in their capacity as
employees or consultants of Seller or any of its Subsidiaries, has made an
untrue or fraudulent statement to the FDA or any other applicable Governmental
Entity, or in any records and documentation prepared or maintained to comply
with applicable Laws, with respect to any Acquired Compound, or failed to
disclose a material fact required to be disclosed to the FDA or any other
similar Governmental Entity with respect to any Acquired Compound.

 

(e)                                  Neither Seller nor any of its Subsidiaries
nor any of their respective employees or consultants, in their capacity as
employees or consultants of Seller or any of its Subsidiaries, has been
debarred, excluded or received notice of action or threat of action with respect
to debarment, exclusion or other action under the provisions of 21 U.S.C. §§
335a, 335b, or 335c, 42 U.S.C. § 1320a-7 or any equivalent provisions in any
other applicable jurisdiction.   Neither Seller, any of its Subsidiaries nor any
of the employees or consultants to Seller or any of its Subsidiaries, in their
capacity as employees or consultants of Seller or any of its Subsidiaries, nor
to Seller’s Knowledge, any contractor to Seller or any of its Subsidiaries, in
its capacity as a contractor to the Seller or any of its Subsidiaries, has
received written notice of or been subject to any other material enforcement
action involving the FDA or any other similar Governmental Entity, including any
suspension, consent decree, notice of criminal investigation, indictment,

 

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sentencing memorandum, plea agreement, court order or target or no-target
letter, and none of the foregoing are pending or, to the Knowledge of Seller,
threatened in writing against same.

 

SECTION 3.07  Intellectual Property.

 

(a)                                 Section 3.07(a)(1) of the Disclosure
Schedule sets forth, with respect to the Scheduled Patents, the following
information, as applicable:  (i) the title thereof; (ii) each owner thereof;
(iii) each jurisdiction in which such Scheduled Patent has been or is
registered, granted, issued or in which registrations, grants or issuances have
been applied for; (iv) all registration numbers, issuance numbers, grant
numbers, serial numbers and application numbers, as applicable, in each
jurisdiction; (v) all filing, maintenance, renewal, expiration and other
deadlines relating to such Scheduled Patent occurring between the date hereof
and September 30, 2012; and (vi) all filing, registration, issuance, and grant
dates of such Scheduled Patents, as applicable, in each jurisdiction.  Except as
disclosed in Section 3.07(a)(2) of the Disclosure Schedule, (A) the Scheduled
Patents have been duly filed, prosecuted and maintained, including the timely
submission of all necessary filings and fees in accordance with the legal and
administrative requirements of the appropriate Government Entity; (B) the
Scheduled Patents have not lapsed, been abandoned, or been forfeited, in whole
or in part; (C) no Acquired Patent has been or is the subject of any pending or,
to the Knowledge of Seller, threatened, interference, reissue, reexamination,
opposition, concurrent use, cancelation, invalidity, or other proceeding; and
(D) no Acquired Patent, other than the Scheduled Patents, has been filed.

 

(b)                                 Each Scheduled Patent properly identifies
all inventors of each invention claimed or otherwise disclosed in such Scheduled
Patent.  Each inventor of each such invention has executed a valid and
enforceable written agreement assigning all of such inventor’s rights, title and
interests in, to and under such invention (and all Patent Rights claiming or
otherwise disclosing such inventions) to Seller or a Subsidiary of Seller, and
all such assignments have been timely and properly recorded with the United
States Patent and Trademark Office, or its foreign equivalent, as applicable. 
Section 3.07(b) of the Disclosure Schedule accurately identifies each Acquired
Patent that is subject to a terminal disclaimer, and the corresponding Patent
Right over which the terminal disclaimer has been or is being filed.  Each such
Acquired Patent identified on Section 3.07(b) of the Disclosure Schedule has
been and continues to be commonly owned with the applicable corresponding Patent
Right.

 

(c)                                  Section 3.07(c) of the Disclosure Schedule
sets forth a true, complete and accurate list of all agreements, arrangements
and understandings (in each case, whether written or oral) relating to any right
in, to or under any Assigned Intellectual Property (including all licenses,
options, settlement agreements, coexistence agreements, consent agreements,
covenants not to sue, assignments and security interests) that has been granted
(i) to Seller or any of its Subsidiaries or (ii) by Seller or any of its
Subsidiaries to any other Person; provided, however, that Section 3.07(c) of the
Disclosure Schedule need not list (1) licenses for off-the-shelf software or
generally available software; (2) non-disclosure agreements with third parties
protecting the Assigned Intellectual Property; (3) materials transfer agreements
on customary terms; (4) invention assignment agreements with employees,
consultants and contractors that assign or grant to Seller or a Seller
Subsidiary ownership of inventions and intellectual property developed in the
course of providing services to Seller or a Seller Subsidiary by such employees,
consultants and contractors; or (5) customary powers of attorney granted to
Seller’s patent

 

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prosecution counsel solely for purposes of representing Seller before the United
States Patent and Trademark Office or its foreign equivalent in the ordinary
course of business.  Neither Seller nor any of its Subsidiaries has sold,
assigned, licensed, transferred or otherwise conveyed to any Person any right to
sue or collect damages for past, present or future infringement of any Assigned
Intellectual Property.

 

(d)                                 The activities conducted by or on behalf of
Seller or its Subsidiaries related to the Acquired Compounds and the use of the
other Acquired Assets and the practice of Assigned Intellectual Property by or
on behalf of Seller or its Subsidiaries have not infringed or misappropriated
any Intellectual Property rights of any Person.  Neither Seller nor any of its
Subsidiaries has received any written communication (i) alleging that the
activities conducted by or on behalf of Seller or its Subsidiaries related to
the Acquired Compounds or use of the other Acquired Assets or the practice of
any Assigned Intellectual Property infringes or misappropriates the Intellectual
Property rights of any Person, or (ii) that the practice of any Assigned
Intellectual Property or the research, development, manufacture, use, sale,
offer for sale or importation of any Acquired Compound requires or would require
a license to any Person’s Intellectual Property.

 

(e)                                  Except as set out in Section 3.07(e) of the
Disclosure Schedule, no Assigned Intellectual Property has been developed or
otherwise obtained, in whole or in part, through the use of funding or other
resources of any Governmental Entity or institution of higher learning.

 

(f)                                   Except as set out in Section 3.07(f) of
the Disclosure Schedule, to the Knowledge of Seller, no third party is
infringing or misappropriating any of the Assigned Intellectual Property and no
such claims or assertions have been made against a third party by Seller or any
of its Subsidiaries.

 

(g)                                  Seller and each of its Subsidiaries have
taken commercially reasonable steps to protect the confidentiality of all
confidential or non-public information included in the Program Know-How.

 

(h)                                 Except as set out in Section 3.07(h) of the
Disclosure Schedule, each employee, consultant and other contractor of Seller or
any of its Subsidiaries has entered into a valid and binding written agreement
with Seller or the applicable Subsidiary sufficient to, in the case of each
employee, vest exclusive title in Seller or the applicable Subsidiary of all
Assigned Intellectual Property created or developed by such employee acting
within the scope of his or her employment for Seller or the applicable
Subsidiary or, in the case of each consultant or other contractor, to vest
exclusive title in Seller or the applicable Subsidiary of all Assigned
Intellectual Property created or developed by such consultant or other
contractor in the performance of his or her services to Seller or the applicable
Subsidiary (each such agreement, an “IP Agreement”).  Except as set out in
Section 3.07(h) of the Disclosure Schedule, no current or former employee,
consultant or other contractor of Seller or any of its Subsidiaries (A) has any
actual or, to Seller’s Knowledge, alleged, right, license, claim or interest
whatsoever in or with respect to any of the Assigned Intellectual Property
created or developed in the course of his or her employment with, or the
provision of services to, Seller or any of its Subsidiaries, or (B) to Seller’s
Knowledge, is in breach of any IP Agreement.

 

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(i)                                     Except as set out in Section 3.07(i) of
the Disclosure Schedule, none of the Assigned Intellectual Property is subject
to or bound by any outstanding Judgment, charge, settlement or other disposition
of any dispute.

 

(j)                                    The execution and delivery by Seller of
this Agreement and the Ancillary Agreements and the consummation by Seller of
the transactions contemplated hereby and thereby (alone or in combination with
any other event) and Seller’s compliance with the provisions of this Agreement
and the Ancillary Agreements do not and will not conflict with, alter, or
impair, any rights of Seller and its Subsidiaries in any of the Assigned
Intellectual Property or, to Seller’s Knowledge, the validity, enforceability,
use, right to use, ownership, priority, duration, scope or effectiveness of any
Assigned Intellectual Property.

 

(k)                                 At the Closing, Seller shall transfer good,
valid and marketable title to the Assigned Intellectual Property free and clear
of all Liens and of any licenses with any future obligations or limitations.

 

SECTION 3.08  Taxes.

 

(a)                                 Seller has properly filed on a timely basis
all Tax Returns that it was required to file, and all such Tax Returns are true,
correct and complete in all respects and were prepared in compliance with all
applicable Laws and regulations.  Seller has paid on a timely basis all Taxes,
whether or not shown on any Tax Return, that were due and payable.

 

(b)                                 All Taxes that Seller is or was required by
Law to withhold or collect have been duly withheld or collected and, to the
extent required, have been properly paid to the appropriate Governmental Entity,
and Seller has complied with all information reporting and backup withholding
requirements, including the maintenance of required records with respect
thereto, in connection with amounts paid to any employee, independent
contractor, creditor, or other third party.

 

(c)                                  No examination or audit or other action of
or relating to any Tax Return of Seller by any Governmental Entity is currently
in progress or, to the Knowledge of Seller, threatened or contemplated.  No
deficiencies for Taxes of Seller have been claimed, proposed or assessed by any
Governmental Entity.

 

(d)                                 There are no liens or other encumbrances
with respect to Taxes upon any of the Acquired Assets, other than with respect
to Taxes not yet due and payable.

 

(e)                                  Seller does not have and has not had a
permanent establishment in any country outside its country of formation as
defined in any applicable Tax treaty or convention between the United States and
such foreign country.

 

SECTION 3.09  Litigation.  There is no Litigation pending or, to the Knowledge
of Seller, threatened that could reasonably be expected to affect the Acquired
Assets or impair or delay the ability of Seller to effect the Closing, nor is
there any Judgment of any Governmental Entity or arbitrator outstanding against,
or, to the Knowledge of Seller, investigation by any Governmental Entity
involving, the Acquired Assets or that could reasonably be expected to impair or
delay the ability of Seller to effect the Closing.  Neither Seller nor any of
its

 

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Subsidiaries has, since its date of formation, commenced any Litigation relating
to the Acquired Assets.

 

SECTION 3.10  Absence of Changes or Events.  Since December 31, 2011, neither
Seller nor any of its Subsidiaries has experienced any event or condition that,
individually or in the aggregate, has had or is reasonably likely to have, a
material adverse effect on the Acquired Assets.

 

SECTION 3.11  Voting Requirements; Consents.  The affirmative vote or written
consent of holders of seventy-five percent (75%) of Seller’s issued and
fully-paid Series C CRPS is the only vote or consent of the holders of any class
or series of Seller’s capital stock necessary to execute and deliver this
Agreement and to consummate the transactions contemplated by this Agreement and,
before the Closing, Seller shall have obtained such vote or consent.

 

SECTION 3.12  Transactions with Subsidiaries.  No Contracts between or among
Seller or any of its Subsidiaries, on the one hand, and any of its directors,
officers, employees, consultants, stockholders or Affiliates, on the other hand,
relating in whole or in part to any Acquired Asset or Assumed Liability or the
use or operation of any Acquired Asset, will continue in effect subsequent to
the Closing, other than any such Contracts that assigned rights to any Acquired
Asset to Seller prior to the Closing, any non-disclosure agreement and IP
Agreements.

 

SECTION 3.13  Consents.  Seller has obtained and delivered to Buyer any third
party consent required (a) in order for Seller to transfer or assign to Buyer
any right, title or interest in, to or under any Acquired Asset, (b) in order
for Buyer to assume from Seller the Assumed Liabilities or (c) to otherwise
effect the transactions contemplated by this Agreement or any Ancillary
Agreement.  Section 3.13 of the Disclosure Schedule lists each such consent and
the party from whom it was obtained.

 

SECTION 3.14  Brokers or Finders.  No agent, broker, investment banker or other
Person is or will be entitled to any broker’s or finder’s fee or any other
commission or similar fee from Seller or its Affiliates in connection with the
Acquisition or any of the other transactions contemplated by this Agreement.

 

ARTICLE IV

 

Representations and Warranties of Buyer

 

Buyer hereby represents and warrants to Seller as follows:

 

SECTION 4.01  Organization, Standing and Power.  Buyer is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has all requisite corporate power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold its properties
and assets and to carry on its business as presently conducted.

 

SECTION 4.02  Authority; Execution and Delivery; Enforceability.  Buyer has all
requisite power and authority to execute this Agreement and the Ancillary
Agreements to which

 

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it is a party, to consummate the Acquisition and the other transactions
contemplated hereby and thereby and to comply with the terms hereof and
thereof.  The execution and delivery by Buyer of this Agreement and the
Ancillary Agreements to which it is a party, the consummation by Buyer of the
Acquisition and the other transactions contemplated hereby and thereby and the
compliance by Buyer with the terms hereof and thereof have been duly authorized
by all necessary corporate action.  Buyer has duly executed and delivered this
Agreement and each Ancillary Agreement to which it is a party, and, assuming the
due authorization, execution and delivery by Seller, this Agreement and the
Ancillary Agreements to which it is a party constitute Buyer’s legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
to the extent that their enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and to general equitable principles.

 

SECTION 4.03  No Conflicts; Consents.  The execution and delivery by Buyer of
this Agreement and each Ancillary Agreement to which it is a party, the
consummation of the Acquisition and the other transactions contemplated hereby
and thereby and compliance by Buyer with the terms hereof and thereof do not and
will not conflict with, or result in any violation or breach of or default (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancelation or acceleration of any obligation or to loss of a
benefit under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any other Person under (a) any provision of the charter or
by-laws of Buyer or any of its Subsidiaries, (b) any material Contract to which
Buyer or any of its Subsidiaries is a party and or by which any of their
respective material properties or assets are bound, or (c) any Judgment or Law
applicable to Buyer.  No Consent of, or registration, declaration or filing
with, any Governmental Entity or any other Person is required to be obtained or
made by or with respect to Buyer or any of its Subsidiaries in connection with
the execution and delivery of this Agreement or any Ancillary Agreement, the
consummation of the Acquisition or the other transactions contemplated hereby or
thereby (alone or in combination with any other event) or the compliance with
the provisions hereof or thereof.

 

SECTION 4.04  Litigation.  There is no Litigation pending or, to the Knowledge
of Buyer, threatened that could reasonably be expected to impair or delay the
ability of Buyer to effect the Closing, nor is there any Order of any
Governmental Entity or arbitrator outstanding against, or, to the Knowledge of
Buyer, investigation by any Governmental Entity that could reasonably be
expected to impair or delay the ability of Buyer to effect the Closing.

 

SECTION 4.05  Access.  To the Knowledge of Buyer, neither Buyer nor any of its
representatives has had unauthorized access to, or has used, any confidential
information of the Seller regarding the process undertaken by the Seller in
connection with the Seller’s solicitation of potential acquisition offers or the
terms of any such other offers.

 

SECTION 4.06  No Buyer Vote Required.  No vote or other action of the
stockholders of Buyer is required by applicable Law, the certificate of
incorporation of Buyer, the bylaws of Buyer or otherwise in order for Buyer to
consummate the Acquisition.

 

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SECTION 4.07  Financing.  Buyer has sufficient funds on hand and available
through existing liquidity facilities (without restrictions on drawdown that
would delay payment of the Upfront Payment) to pay the Upfront Payment on the
Closing.

 

ARTICLE V

 

Covenants

 

SECTION 5.01  Confidentiality.  Except as otherwise provided herein, Seller
shall keep confidential, shall cause its Subsidiaries to keep confidential, all
information included in or solely related to the Acquired Assets and the Assumed
Liabilities, except as required by Law; provided, however, that the publication
of those pending or in-process publications set forth in Section 5.01 of the
Disclosure Schedule shall not constitute a breach of this Section 5.01.  Buyer
and Seller acknowledge that the confidentiality obligations set forth herein
shall not extend to (i) information that is available to the public on the
Closing Date, or thereafter becomes available to the public other than as a
result of a breach of this Section 5.01 or Section 5.08, (ii) any information in
the possession of any Third Party Acquiror of Seller prior to a Change of
Control Transaction, other than as a result of disclosure by or on behalf of
Seller or any of its Subsidiaries, (iii) any information that is independently
developed or discovered by any Third Party Acquiror without reference to any
information included in the Acquired Assets other than information described in
clause (i), (ii) or (iv), or (iv) is rightfully communicated to any Third Party
Acquiror by another third party (other than Seller or any of its Subsidiaries),
free and clear of any obligation of confidence and not acquired in any manner
from Seller or any of its Subsidiaries.

 

SECTION 5.02  Expenses.  Whether or not the Closing takes place, and except as
otherwise explicitly set forth in this Agreement, all costs and expenses
incurred in connection with this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby (including fees, costs and expenses
of legal counsel, financial advisors and other representatives and consultants)
shall be paid by the party incurring such costs or expenses.

 

SECTION 5.03  Post-Closing Cooperation.

 

(a)                                 Buyer and Seller shall cooperate with each
other, and shall cause their Subsidiaries, officers, employees, agents, auditors
and representatives to cooperate with each other, for a period of [**] days
after the Closing, to ensure the orderly transition of the Acquired Assets and
Assumed Liabilities from Seller or any of its Subsidiaries to Buyer.

 

(b)                                 Neither party shall be required by this
Section 5.03 to take any action that would unreasonably interfere with the
conduct of its business or unreasonably disrupt its normal operations.

 

SECTION 5.04  Publicity.  Notwithstanding anything to the contrary contained
herein, except as may be required to comply with the requirements of any
applicable Law and the rules and regulations of any stock exchange upon which
the securities of one of the parties is listed, from and after the date hereof,
no press release or similar public announcement or communication shall be made
or caused to be made by either party and/or any of such party’s

 

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Affiliates relating to this Agreement or the transactions contemplated hereby
unless specifically approved in advance by the other party; provided, however,
that:  (a) the parties may jointly issue one or more press release(s) announcing
the consummation of the transactions contemplated by this Agreement; (b) either
party may issue such press releases, public announcements or communications or
make such SEC filings as it determines are reasonably necessary to comply with
applicable Law (including disclosure requirements of the SEC) or with the
requirements of any stock exchange on which securities issued by a party or its
Affiliates are traded; and (c) Seller may deliver such communications to its
shareholders regarding this Agreement and the transactions contemplated hereby
as may be required by applicable Law or Seller’s charter, bylaws or other
organizational documents.

 

SECTION 5.05  Further Assurances.  Each of Buyer and Seller agrees, and agrees
to cause its Subsidiaries to, to execute and deliver, upon the written request
of the other party, any and all such further documents, certificates, papers,
schedules and instruments and take such other actions (including cooperating for
purposes of obtaining any third-party consents) as may reasonably be deemed
necessary or desirable by the other party to consummate the transactions
contemplated hereby (including (a) transferring back to Seller any Excluded
Asset or Excluded Liability, which Excluded Asset or Excluded Liability was
inadvertently transferred to Buyer at the Closing, (b) transferring to Buyer any
Acquired Asset or Assumed Liability contemplated by this Agreement to be
transferred to Buyer at the Closing which was not so transferred at the Closing
and (c) taking all actions reasonably necessary to perfect any rights in the
Assigned Intellectual Property).

 

SECTION 5.06  Purchase Price Allocation.  The Purchase Price shall be allocated
among the Acquired Assets in accordance with Schedule 5.06.  Buyer and Seller
agree to report the Federal, state, local and other tax consequences of the
purchase and sale hereunder (including in filing Internal Revenue Service
Form 8594) in a manner consistent with such allocation and that it will not take
any position inconsistent therewith in connection with any Tax Return, refund
claim, litigation or otherwise, unless and to the extent required to do so by
applicable Law.

 

SECTION 5.07  Tax Matters.

 

(a)                                 Seller shall be responsible for and shall
pay all Taxes of Seller for all periods and all Taxes that relate to the
Acquired Assets that were incurred in or are attributable to any taxable period
(or portion thereof) ending on or before the Closing Date.  Seller shall prepare
and file its Tax Returns for all periods and all Tax Returns that relate to the
Acquired Assets for any Taxable periods ending on or before the Closing Date.
Such returns will be prepared and filed in accordance with applicable Law and in
a manner consistent with past practices.

 

(b)                                 Any real property, personal property or
similar Taxes applicable to the Acquired Assets for a taxable period that
includes but does not end on the Closing Date shall be paid by Buyer or Seller,
as applicable, and such Taxes shall be apportioned between Buyer and Seller
based on the number of days in the portion of the taxable period that ends on
the Closing Date (the “Pre-Closing Tax Period”) and the number of days in the
entire taxable period.  Seller shall pay Buyer an amount equal to any such Taxes
payable by Buyer which are attributable to the Pre-Closing Tax Period, and Buyer
shall pay Seller an amount equal to any such Taxes

 

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payable by Seller which are not attributable to the Pre-Closing Tax Period. 
Such payments shall be made on or prior to the Closing Date or, if later, on the
date such Taxes are due (or thereafter, promptly after request by Buyer or
Seller if such Taxes are not identified by Buyer or Seller on or prior to the
Closing Date).

 

(c)                                  All transfer, value added taxes,
withholding, sales, and use taxes, deed excise stamps and similar charges
(“Transfer Taxes”) related to the sale of the Acquired Assets contemplated by
this Agreement shall be paid by Seller.  The party required under applicable Law
will file any necessary Tax Returns and other documentation with respect to all
such Taxes and, if Buyer is required by applicable Law to file such Tax Returns,
Seller shall pay over to Buyer any such Transfer Taxes payable with respect to
such Tax Return.

 

(d)                                 After the Closing, upon reasonable written
notice, Buyer and Seller shall furnish or cause to be furnished to each other,
as promptly as practicable, such information and assistance (to the extent
within the control of such party) relating to the Acquired Assets and Assumed
Liabilities (including, access to books and records) as is reasonably necessary
for the filing of all Tax Returns, the making of any election related to Taxes,
the preparation of any available Tax clearance certificate, the preparation for
any audit by any Governmental Entity, and the prosecution or defense of any
claim, suit or proceeding related to any Tax Return.  Seller and Buyer shall
cooperate with each other in the conduct of any audit or other proceeding
relating to Taxes involving the Acquired Assets and Assumed Liabilities.  Seller
shall not after the Closing take any position in any Tax Return, or reach any
settlement or agreement on audit, which is in any manner inconsistent with any
position taken by Seller in any filing, settlement or agreement made by Seller
prior to the Closing if such inconsistent position (i) requires the payment by
Buyer of more Tax than would have been required to be paid had such position not
been taken or such settlement or agreement not been reached, (ii) affects the
determination of useful life, basis or method of depreciation, amortization or
accounting of any of the Acquired Assets or any of the properties, assets or
rights of Buyer or (iii) accelerates the time at which any Tax must be paid by
Buyer; unless Buyer has previously consented to such position in a writing to
Seller.

 

SECTION 5.08  Non-Competition.

 

(a)                                 During the period commencing on the Closing
Date and ending on the [**] anniversary of the Closing Date, Seller and its
Subsidiaries shall not directly or indirectly:

 

(i)                                     engage in the Business or any aspect
thereof; or

 

(ii)                                  induce any Person which was or is a
client, collaboration partner, licensee or customer with respect to the Business
(as of the Closing Date or during the prior [**] period ending on the Closing
Date) (a “Business Contact”) to terminate any of its relationships with Buyer or
any Affiliate of Buyer;

 

provided, however, that this Section 5.08 shall not be construed to prohibit or
restrict any Third Party Acquiror or any of such Third Party Acquiror’s
Affiliated companies (other than Seller or any of its Subsidiaries), from
engaging in the Business, if the applicable compound or product is: 
(i) controlled by the Third Party Acquiror or any of its Affiliated companies
(other than Seller or

 

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any of its Subsidiaries) prior to consummation of the relevant Change of Control
Transaction and not acquired in any manner from Seller or any of its
Subsidiaries; (ii) acquired (whether by in license or otherwise) by such Third
Party Acquiror or any of its Affiliated companies (other than Seller or any of
its Subsidiaries) after consummation of such Change of Control Transaction and
not acquired in any manner from Seller or any of its Subsidiaries; or
(iii) developed internally by such Third Party Acquiror or any of its Affiliated
companies (other than Seller or any of its Subsidiaries), either before or after
consummation of such Change of Control Transaction, without the use of or
reference to any of the Acquired Assets or any other confidential information of
Buyer.

 

(b)                                 Seller agrees, on behalf of itself and its
Subsidiaries, that the duration and geographic scope of the non-competition
provision set forth in this Section 5.08 are reasonable.  In the event that any
court of competent jurisdiction determines that the duration or the geographic
scope, or both, are unreasonable and that such provision is to that extent
unenforceable, each of the parties agrees that the provision shall remain in
full force and effect for the greatest time period and in the greatest area that
would not render it unenforceable.  Each of the parties intends that this
non-competition provision shall be deemed to be a series of separate covenants,
one for each country in the world other than the United States of America and
one for each and every county of each and every state of the United States of
America where this provision is intended to be effective.  Seller agrees that
damages may be an inadequate remedy for any breach of this provision and that
Buyer shall, whether or not it is pursuing any potential remedies at Law, be
entitled to seek equitable relief in the form of preliminary and permanent
injunctions, without bond or other security, upon any actual or threatened
breach of this Section 5.08.

 

(c)                                  Seller further acknowledges that Buyer
would not enter into this Agreement but for the restrictions in this
Section 5.08.

 

(d)                                 If Seller breaches the obligations of this
Section 5.08, Seller shall, and hereby does, assign to Buyer all right, title
and interest in and to any inventions conceived, reduced to practice or
otherwise generated by or on behalf of Seller in breach of this Section 5.08, as
admitted by Seller or determined pursuant to the provisions of Section 7.10, and
all Intellectual Property rights therein.

 

SECTION 5.09  Waiver.  Seller and its Subsidiaries hereby waive any obligations
of confidentiality, non-competition and exclusivity imposed on any of their
employees, consultants, contractors and third party service providers (including
manufacturers) with respect solely to the Acquired Assets, solely to the extent
necessary to permit Buyer to enter into agreements with such employees,
consultants, contractors and service providers to operate the Business from and
after the Closing.

 

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ARTICLE VI

 

Indemnification

 

SECTION 6.01  Indemnification by Seller and Buyer.

 

(a)                                 From and after the Closing, Buyer and its
Affiliates and their respective officers, managers, directors, employees and
agents (collectively, the “Buyer Indemnified Parties”) shall be held harmless
and indemnified by Seller to the extent of any loss, liability, obligation,
damage or expense ((x) including reasonable legal fees, costs and expenses, but
(y) excluding any unforeseeable, speculative, special, indirect, consequential,
exemplary and punitive damages except in respect of a Third Party Claim)
(collectively, “Losses”) arising from, in connection with or otherwise with
respect to:

 

(i)                                     any inaccuracy in, or breach of, any
representation or warranty of Seller contained in this Agreement or any
Ancillary Agreement;

 

(ii)                                  any failure by Seller or any of its
Subsidiaries to perform, fulfill or comply with any covenant, agreement,
obligation or undertaking of Seller or any of its Subsidiaries contained in this
Agreement or any Ancillary Agreement;

 

(iii)                               any Excluded Liability, or the operation or
ownership of any Excluded Assets; and

 

(iv)                              any and all actions, suits, proceedings,
demands, assessments, judgments, damages, awards, costs and expenses (including
third-party fees and expenses, subject to and in compliance with Section 6.04)
related to any of the foregoing or incurred in connection with the enforcement
of the rights of any such Buyer Indemnified Party with respect to clauses (i),
(ii) and (iii).

 

(b)                                 From and after the Closing, Seller and its
Affiliates and their respective officers, managers, directors, employees and
agents (collectively, the “Seller Indemnified Parties”) shall be held harmless
and indemnified by Buyer to the extent of any Losses arising from, in connection
with or otherwise with respect to:

 

(i)                                     any inaccuracy in, or breach of, any
representation or warranty of Buyer contained in this Agreement or any Ancillary
Agreement;

 

(ii)                                  any failure by Buyer to perform, fulfill
or comply with any covenant, agreement, obligation or undertaking of the Seller
contained in this Agreement or any Ancillary Agreement;

 

(iii)                               any Assumed Liability; and

 

(iv)                              any and all actions, suits, proceedings,
demands, assessments, judgments, damages, awards, costs and expenses (including
third-party fees and expenses) incident to any of the foregoing or incurred in
connection with the enforcement of the rights of any such Seller Indemnified
Party with respect to clauses (i), (ii) and (iii).

 

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(c)                                  The obligations of Seller under
6.01(a)(i) after the Closing shall not be affected by any knowledge by any Buyer
Indemnified Party at or prior to the Closing of any breach of a representation
or warranty, whether such knowledge came from Seller, Buyer or any other
Person.  The obligations of Buyer under 6.01(b)(i) after the Closing shall not
be affected by any knowledge by any Seller Indemnified Party at or prior to the
Closing of any breach of a representation or warranty, whether such knowledge
came from Seller, Buyer or any other Person.

 

(d)                                 Any indemnification payment under this
Agreement shall be treated by the parties as an adjustment to the Purchase Price
for Tax purposes.

 

SECTION 6.02  Termination of Indemnification.

 

(a)                                 Except in the case of Seller’s fraud,
Seller’s obligations to indemnify and hold harmless a Buyer Indemnified Party
pursuant to Section 6.01(a)(i) and Section 6.01(a)(iv) (with respect to
6.01(a)(i)): (x) other than with respect to the representations and warranties
set forth in Sections 3.01, 3.02, 3.03(a), 3.07(k), 3.08(a) and 3.14 (the
“Seller Fundamental Representations”), shall terminate on the date that is
eighteen (18) months from the date of this Agreement, and (y) with respect to
the Seller Fundamental Representations shall terminate on the date that is
twenty-four (24) months from the date of this Agreement; provided, however, that
such obligations to indemnify and hold harmless shall not terminate with respect
to any item as to which a Buyer Indemnified Party shall have, before the
expiration of such applicable period, previously made a claim by delivering a
notice of such claim in accordance with this Agreement to Seller, which
obligations shall survive until all such claims have been resolved.

 

(b)                                 Except with respect to Buyer’s fraud,
Buyer’s obligations to indemnify and hold harmless any other party pursuant to
Section 6.01(b)(i) and Section 6.01(b)(iv) (with respect to 6.01(b)(i)):
(x) other than with respect to the representations and warranties set forth in
Sections 4.01, 4.02, 4.03 and 4.07 (the “Buyer Fundamental Representations”),
shall terminate on the date that is eighteen (18) months from the date of this
Agreement and (y) with respect to the Buyer Fundamental Representations shall
terminate on the date that is twenty-four (24) months from the date of this
Agreement after the expiration of the applicable statue of limitations;
provided, however, that such obligations to indemnify and hold harmless shall
not terminate with respect to any item as to which a Seller Indemnified Party
shall have, before the expiration of such applicable period, previously made a
claim by delivering a notice of such claim in accordance with this Agreement to
Seller, which obligations shall survive until all such claims have been
resolved.

 

(c)                                  Any other obligation to indemnify and hold
harmless any Buyer Indemnified Party or Seller Indemnified Party shall terminate
ninety (90) days after expiration of the relevant statute of limitations under
applicable Law, taking into account extensions thereof; provided, however, that
such obligations shall not terminate with respect to any item as to which a
Buyer Indemnified Party or a Seller Indemnified Party, as the case may be, has,
before the expiration of the relevant period, taking into account extensions
thereof, previously made a claim by delivering a notice of such claim in
accordance with this Agreement to Seller or Buyer, as the case may be, which
obligations shall survive until all such claims have been resolved.

 

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SECTION 6.03  Exclusive Monetary Remedy.

 

(a)                                 Except in the case of fraud, the right to
indemnification under this Article VI shall constitute the sole and exclusive
monetary remedy of the Buyer Indemnified Parties and the Seller Indemnified
Parties for Losses or otherwise arising from, in connection with this Agreement,
including pursuant to Section 6.01(a) and Section 6.01(b), and the Ancillary
Agreements or otherwise with respect to any of the transactions contemplated
hereby.

 

(b)                                 Except in the case of Seller’s fraud,
(x) except for a breach of the Seller Fundamental Representations, Seller’s
aggregate liability to Buyer Indemnified Parties pursuant to
Section 6.01(a)(i) and Section 6.01(a)(iv) (with respect to 6.01(a)(i)) shall
not exceed $70,000 plus 20% of each Milestone Contingent Payment that is earned
under this Agreement (the “Cap”), and (y) Seller’s aggregate liability under
Section 6.01(a) shall not exceed the sum of the Upfront Payments and the
Contingent Consideration actually paid by Buyer under this Agreement.  No Buyer
Indemnified Party shall be entitled to recover any Losses under
Section 6.01(a)(i) unless and until the aggregate Losses for which they would
otherwise be entitled to indemnification under Section 6.01(a)(i) exceed
$30,000, at which point the Buyer Indemnified Parties shall become entitled to
be indemnified for such Losses in excess of $30,000.

 

(c)                                  Except in the case of Buyer’s fraud,
(x) except for a breach of the Buyer Fundamental Representations, Buyer’s
aggregate liability to Seller Indemnified Parties pursuant to
Section 6.01(b)(i) and Section 6.01(b)(iv) (with respect to 6.01(b)(i)) shall
not exceed the Cap, and (y) except in the case of product liability claims (with
respect to which Buyer’s liability shall not be limited), Buyer’s aggregate
liability under Section 6.01(b) shall not exceed $21,300,000.  No Seller
Indemnified Party shall be entitled to recover any Losses under
Section 6.01(b)(i) unless and until the aggregate Losses for which they would
otherwise be entitled to indemnification under Section 6.01(b)(i) exceed
$30,000, at which point the Seller Indemnified Parties shall become entitled to
be indemnified for such Losses in excess of $30,000.

 

SECTION 6.04  Procedures.

 

(a)                                 Third Party Claims.

 

(i)                                     If a claim by a third party is made
against a Buyer Indemnified Party or Seller Indemnified Party (each, an
“Indemnified Party”) in respect of, arising out of or involving a matter for
which the Indemnified Party is entitled to be indemnified pursuant to this
Article VI (a “Third Party Claim”), such Indemnified Party shall notify the
indemnifying party (the “Indemnifying Party”) in writing of the Third Party
Claim promptly following receipt by such Indemnified Party of written notice of
the Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent
(and only to the extent) the Indemnifying Party shall have been actually and
materially prejudiced as a result of such failure.

 

(ii)                                  The Indemnified Party shall control all
proceedings in connection with such Third Party Claim and, without limiting the
foregoing, may in its sole

 

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discretion, subject to Section 6.04(a)(iii), pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any
Governmental Authority with respect thereto, and, subject to
Section 6.04(a)(iii), may, in its sole discretion, either pay the amount claimed
and sue for a refund where applicable Law permits such refund suits or settle or
contest the Third Party Claim.  For the avoidance of doubt, neither Indemnifying
Party nor Indemnifying Party’s counsel shall be entitled to participate in the
defense of any Third Party Claim; provided that the Indemnified Party shall use
reasonable efforts to provide Indemnifying Party with records and information
that are reasonably relevant to such Third Party Claim.  The Indemnifying Party
shall be responsible for the reasonable fees and expenses of counsel employed by
the Indemnified Party with respect to any Third Party Claim for which
Indemnified Party is entitled to indemnification under this Agreement.

 

(iii)                               The Indemnified Party shall not settle or
compromise any Third Party Claim without the written consent of the Indemnifying
Party, which consent will not be unreasonably withheld, conditioned or delayed. 
No such consent will be required if the Indemnified Party agrees to non-monetary
remedies or to forego all claims for indemnification from the Indemnifying Party
with respect to such Third Party Claim; provided, however, that the Indemnified
Party shall use reasonable efforts to obtain in such settlement a release of the
Indemnifying Party with respect to all such Third Party Claims.

 

(b)                                 Direct Claims.  In the event any Indemnified
Party should have a claim against an Indemnifying Party under Section 6.01 that
does not involve a Third Party Claim being asserted against or sought to be
collected from such Buyer Indemnified Party, the Indemnified Party shall deliver
notice of such claim to the Indemnifying Party.  The failure by any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party from any liability that it may have to such Buyer Indemnified Party under
Section 6.01, except to the extent (and only to the extent) that the
Indemnifying Party shall have been actually and materially prejudiced as a
result of such failure.  If the Indemnifying Party does not notify the
Indemnified Party within 20 days following its receipt of such notice that the
Indemnifying Party disputes Indemnifying Party’s liability to the Indemnified
Party under Section 6.01, such claim specified by the Indemnified Party in such
notice shall be conclusively deemed a Loss of the Indemnifying Party under
Section 6.01 and Indemnifying Party shall pay the amount of such Loss to the
Indemnified Party on demand or, in the case of any notice in which the amount of
the claim (or any portion thereof) is estimated, on such later date when the
amount of such claim (or such portion thereof) becomes finally determined.

 

SECTION 6.05  Set Off Right.  Notwithstanding any provision of this Agreement to
the contrary, the parties acknowledge and agree that, in addition to any other
right hereunder:

 

(a)                                 Subject to the limitations set forth in
Section 6.03, Buyer and its Affiliates shall have the right, but not the
obligation, from time to time to set off any Losses for which the Buyer
Indemnified Parties are entitled to indemnification hereunder against any
Contingent Payment.

 

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(b)                                 If at any time any Contingent Payment is due
and payable the amount of Losses with respect to which shall not have been
finally determined, then the amount of such Contingent Payment shall be reduced
by the amount of Losses Buyer reasonably estimates to be subject to such
indemnification claim and that is set forth in the claim notice.  If the final
amount of Losses for such indemnification claim is less than the amount by which
such Contingent Payment was reduced for such claim, then Buyer shall promptly
deliver the difference to Seller, together with accrued interest calculated in
accordance with Section 1.04(g).

 

SECTION 6.06  Treatment of Indemnity Payments.  Any payments made to an
Indemnified Party pursuant to this Article VI shall be treated as an adjustment
to the Purchase Price for Tax purposes.

 

SECTION 6.07  No Implied Representations.  The parties acknowledge that, except
as expressly provided in ARTICLE III and IV, none of the parties hereto has made
or is making any representations or warranties whatsoever, implied or otherwise.

 

ARTICLE VII

 

General Provisions

 

SECTION 7.01  Survival of Representations and Covenants.  The representations,
warranties, covenants and agreements contained in this Agreement and in any
document delivered in connection herewith shall survive the Closing and remain
in full force and effect until the indemnification obligation therefor
terminates in accordance with Section 6.02.

 

SECTION 7.02  Assignment.  Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be transferred, conveyed or assigned,
in whole or in part, by operation of Law or otherwise, by either party without
the prior written consent of the other party, except that: (i) Buyer may assign,
in its sole discretion, any or all of its rights, interests and obligations
under this Agreement (a) to any of its Subsidiaries or Affiliates, but, except
in the case of assignment of this Agreement as a whole to any such Subsidiary or
Affiliate in conjunction with the assignment, conveyance or transfer to such
Subsidiary or Affiliate of Buyer’s rights in all or substantially all the
Acquired Assets as contemplated by Section 1.04(c)(iii)(A), no such assignment
shall relieve Buyer of any of its obligations hereunder, or (b) provided that
the terms and conditions of Section 1.04(c)(iii), if applicable, are satisfied,
in connection with the transfer or sale of all or substantially all of Buyer’s
business related to the Acquired Assets to a third party, whether by merger,
sale of stock, sale of assets or otherwise; and (ii) Seller may assign, in its
sole discretion, this Agreement in whole to a single third party in connection
with the transfer or sale of all or substantially all of Seller’s business
related to the Excluded Assets to such third party, whether by merger, sale of
shares, sale of assets or otherwise, but no such assignment shall relieve Seller
of its obligations hereunder.  Any assignment not in accordance with the
foregoing shall be void.  Subject to the preceding sentences, this Agreement
will be binding upon, inure to the benefit of and be enforceable by, the parties
and their respective permitted successors and assigns.

 

SECTION 7.03  No Third-Party Beneficiaries.  This Agreement is for the sole
benefit of the parties and their permitted successors and assigns and nothing
herein expressed or implied

 

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shall give or be construed to give to any Person, other than the parties and
such successors and assigns, any legal or equitable rights hereunder (other
than, in the case of Article VI, the Buyer Indemnified Parties and the Seller
Indemnified Parties).

 

SECTION 7.04  Notices.  All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or facsimile, or if mailed, five (5) Business Days after
mailing (two (2) Business Days in the case of express mail or overnight courier
service), to the parties at the following addresses or facsimiles (or at such
other address or facsimile for a party as shall be specified by like notice:

 

(a)                                 if to Buyer,

 

Verastem, Inc.

215 First Street, Suite 440

Cambridge, Massachusetts 02142

USA

Telephone:  +1 (617) 252-9300

Facsimile:  +1 (617) 812-0059

Attention:  Chief Executive Officer

 

with a copy to:

 

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

USA

Telephone: +1 (617) 526-6000

Facsimile:  +1 (617) 526-5000

Attention: Hal J. Leibowitz, Esq.

 

(b)                                 if to Seller,

 

S*BIO Pte Ltd.

c/o EDBI

250 North Bridge Rd #28-00 Raffles City Tower

Singapore 179101

Telephone: +65 6832 6326

Facsimile: +65 6832 6838

Attention: Heng Tong Choo

 

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with a copy to:

 

Cooley LLP

4401 Eastgate Mall

San Diego, CA  92121

USA

Telephone: +1 (858) 550-6000

Facsimile: +1 (858) 550-6420

Attention: Jane K. Adams

 

SECTION 7.05  Interpretation; Annexes, Exhibits and Schedules; Certain
Definitions.

 

(a)                                 The headings contained in this Agreement,
any Annex, Schedule or Exhibit hereto, the Disclosure Schedule and in the table
of contents to this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.  All Annexes,
Schedules and Exhibits annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein.  Any capitalized terms used in any Annex, Schedule, Exhibit or the
Disclosure Schedule but not otherwise defined therein shall have the meanings as
defined in this Agreement.  When a reference is made in this Agreement to an
Article, a Section or an Annex, Schedule, Exhibit, such reference shall be to an
Article or a Section of, or an Exhibit to, this Agreement unless otherwise
indicated.  The words “hereof”, “herein” and “hereunder”, and words of similar
import, when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.  Except where the context
clearly otherwise requires, the meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.  Any
matter set forth in any provision, subprovision, section or subsection of any
Schedule referred to herein shall, unless the context otherwise manifestly
requires, be deemed set forth for all purposes of such Schedule.  Whenever the
words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”.

 

(b)                                 For purposes of this Agreement:

 

“Acquired Compound” means each of the following:  (i) [**]; (ii) any compound
claimed generically or specifically in patent applications set forth on Schedule
A; and (iii) any derivative, analog, salt, hydrate, solvate, ester, polymorph,
isomer, regioisomer or stereoisomer (including enantiomer and diastereoisomer)
of any compound described in clause (i) or (ii) above.  For the avoidance of
doubt, the Acquired Compounds exclude [**].

 

“Acquired Patents” means (a) the patents and patent applications set forth on
Schedule A (the “Scheduled Patents”); (b) any and all divisionals, continuations
and continuations-in-part of the Scheduled Patents; (c) any and all foreign
patent applications associated with the patent applications referenced in the
preceding clauses (a) and (b); (d) any and all patents issued or issuing from
the patent applications referenced in the preceding clauses (a) through (c); and
(e) any and all certificates of correction, substitutions, reissues,
confirmations, reexaminations, renewals, restorations, supplemental protection
certificates and extensions of any patent or patent application referenced in
the preceding clauses (a) through (d) in any jurisdiction (including any

 

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supranational jurisdiction).  For the avoidance of doubt, the Acquired Patents
exclude the [**] Patents.

 

“Affiliate” of any Person means another Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first Person.  For purposes of this definition,
“control” (including the terms “controlled by” and “under common control with”),
means the possession, directly or indirectly, of the power to direct or cause
the direction of the affairs or management of a Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Annual Net Sales” means, with respect to a Product and a calendar year, Net
Sales of such Product during such calendar year in each country with respect to
which the relevant Sales-Based Contingent Payment Period has not expired.

 

“Benefit Agreement” means any employment, consulting, bonus, incentive or
deferred compensation, equity or equity-based compensation, severance, change in
control, retention, termination or other similar Contract between Seller or any
of its Affiliates, on the one hand, and any employees or consultants of Seller
or any of its Affiliates, in their capacity as employees or consultants of
Seller or any of its Subsidiaries, on the other hand.

 

“Benefit Plan” means any (i) pension plan or post-retirement or employment
health or medical plan, program, policy or arrangement, (ii) bonus, incentive or
deferred compensation or equity or equity-based compensation plan, program,
policy or arrangement, (iii) severance, change in control, retention or
termination plan, program, policy or arrangement or (iv) other compensation or
benefit plan, program, policy or arrangement, in each case, sponsored,
maintained, contributed to or required to be maintained or contributed to by
Seller, any of its Affiliates or any Commonly Controlled Entity for the benefit
of any employees or consultants of Seller, any of its Affiliates or any Commonly
Controlled Entity in their capacity as employees or consultants of Seller or any
of its Subsidiaries.

 

“Business” means the research, development, manufacture, use, sale, offer for
sale, importation, other commercialization or other exploitation of any Acquired
Compound or Product.

 

“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 The City of New
York.

 

“Calendar Quarter” means each of the three (3) month periods ending on March 31,
June 30, September 30, and December 31 of any year.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commercially Reasonable Efforts” means such level of efforts required to carry
out an obligation in a sustained manner consistent with the efforts normally
used by Buyer for a similar activity with respect to a product which is of
similar market potential and at a similar stage of development or
commercialization, as applicable, as the relevant Product, based on conditions
then prevailing, and taking into account technical, medical, clinical efficacy,
safety, manufacturing, and delivery considerations, product labeling or
anticipated labeling, the

 

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regulatory environment, potential reimbursement issues, the existence of other
competitive or potentially competitive products in the market place, the
strength of the patent and proprietary position of such Product, the regulatory
structure involved, the anticipated profitability of such Product and other
relevant factors.

 

“Commonly Controlled Entity” means any Person or entity that, together with
Seller, is treated as a single employer under Section 414 of the Code or under
any similar provision of applicable local or foreign Law.

 

“Contingent Consideration” means the Milestone Contingent Payments and the
Sales-Based Contingent Payments.

 

“Contingent Payment” means any Milestone Contingent Payment and any Sales-Based
Contingent Payment.

 

“Contingent Payment Period” means the period beginning on the Closing Date and
ending on the expiration of the last-to-expire Sales-Based Contingent Payment
Period.

 

“Contract” means any loan or credit agreement, bond, debenture, note, mortgage,
indenture, guarantee, lease, purchase order or other contract, commitment,
agreement, instrument, arrangement, understanding, obligation, undertaking,
permit, concession, franchise or license, whether oral or written (including all
amendments and modifications thereto).

 

“Control” means, with respect to any Intellectual Property, possession by a
Person of the ability (whether by ownership, license or otherwise) to transfer
ownership of, to grant access to, to grant use of, or to grant a license or a
sublicense of or under such Intellectual Property without violating the terms of
any agreement or other arrangement with any third party who is not an Affiliate
of such Person.

 

“Controlled Group Liability” means any and all liabilities (i) under Title IV of
ERISA, (ii) under Section 302 or 4068(a) of ERISA, (iii) under Section 412(n) or
4971 of the Code, (iv) for violation of the continuation coverage requirements
of Sections 601 et seq. of ERISA and Section 4980B of the Code or the group
health requirements of Sections 701 et seq. of ERISA and Sections 9801 et seq.
of the Code, or (v) under any similar provision of applicable local or foreign
Law, in the case of each of the foregoing clauses (i) through (v), with respect
to any Commonly Controlled Entity.

 

“Cover” or “Covered” or “Covering” means, (a) with respect to a Product and an
Acquired Patent that is an issued patent, that, in the absence of ownership of
or a license granted under a Valid Claim of such Acquired Patent, the
manufacture, use, offer for sale, sale or importation of such Product would
infringe such Valid Claim; and (b) with respect to a Product and an Acquired
Patent that is a patent application, that, in the absence of ownership of or a
license granted under a Valid Claim of such Acquired Patent, the manufacture,
use, offer for sale, sale or importation of such Product would infringe such
Valid Claim if such patent application were to issue as a patent.

 

“Development” means pre-clinical and clinical drug development activities,
including clinical trials, relating to the development of pharmaceutical
compounds and pharmaceutical

 

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products and submission of information to a Regulatory Authority for the purpose
of obtaining Regulatory Approval of a pharmaceutical product, and activities to
develop manufacturing capabilities for pharmaceutical products.  Development
includes optimization and pre-clinical activities, pharmacology studies,
toxicology studies, formulation, manufacturing process development and scale-up
(including bulk compound production), quality assurance and quality control,
technical support, pharmacokinetic studies, clinical trials and regulatory
affairs activities.

 

“Dollar” or “$” means U.S. Dollar.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“EMA” means the European Medicines Agency, or any successor entity thereto.

 

“EU” means the European Union, as constituted from time to time.

 

“FDA” means the U.S. Food and Drug Administration, or any successor entity
thereto.

 

“First Commercial Sale” means, with respect to a Product in a country, the first
sale of such Product by or on behalf of a Selling Person, to a Person who is not
a Selling Person or an Affiliate of a Selling Person, for end use or consumption
in such country after Marketing Approval has been received for such Product in
such country.  Transfers of reasonable quantities of a Product for clinical
trial purposes and transfers or sales of reasonable quantities of a Product for
compassionate or similar use shall not be considered a First Commercial Sale.

 

“GAAP” means U.S. Generally Accepted Accounting Principles or other similar
generally accepted accounting principles used by the relevant Selling Person,
including International Financial Reporting Standards, as applicable; in each
case, consistently applied.

 

“Guarantee” of or by any Person means any obligation, contingent or otherwise,
of such Person guaranteeing any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) any Indebtedness of any
primary obligor or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the owner of any
Indebtedness of any primary obligor of the payment of such Indebtedness or
(iii) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay any Indebtedness of such primary obligor; provided, however, that
the term Guarantee shall not include endorsements for collection or deposit, in
each case in the ordinary course of business.

 

“IND” means an investigational new drug application filed with the FDA pursuant
to 21 CFR 312 or any other equivalent filing made with an applicable
Governmental Entity outside the United States of America; but excluding any IND
for an exploratory IND study (also known as a Phase 0 study) conducted in
accordance with the FDA’s 2006 Guidance on Exploratory Investigational New Drug
(IND) Studies or pursuant to a Clinical Trial Notification in Australia or a
similar process in another country.

 

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“Indebtedness” of any Person means (i) all obligations of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all obligations of such Person
upon which interest charges are customarily paid by such Person, other than
trade credit incurred in the ordinary course of business, (iv) all obligations
of such Person under conditional sale or other title retention agreements
relating to property or assets purchased by such Person, (v) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services, (vi) all indebtedness of others secured by (or for which the holder of
such indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (vii) all Guarantees by such
Person, (viii) all capital lease obligations of such Person, (ix) the notional
amount of all obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements and (x) all obligations of such Person as an account
party in respect of letters of credit and bankers’ acceptances.  The
Indebtedness of any Person shall include the Indebtedness of any partnership in
which such Person is a general partner.

 

“Indication” means a specific disease, infection or other condition which is
recognized by a Regulatory Authority as being a disease, infection or
condition.  All variants of a single disease, infection or condition (whether
classified by severity or otherwise) will be treated as the same Indication,
except that different types of cancer (e.g., as defined by site or cancer cell
origin) will be treated as different Indications.

 

“Intellectual Property” means the following subsisting throughout the world: 
(i) Patent Rights; (ii) registered trademarks and service marks, logos, Internet
domain names, corporate names and doing business designations and all
registrations and applications for registration of the foregoing, common law
trademarks and service marks and trade dress, and all goodwill in the foregoing
(collectively, “Trademarks”); (iii) copyrights, designs, data and database
rights and registrations and applications for registration thereof, including
moral rights of authors; (iv) Know-How, whether patentable or nonpatentable,
whether copyrightable or noncopyrightable and whether or not reduced to
practice; and (v) other proprietary rights relating to any of the foregoing.

 

“Know-How” means all technical information, know-how and data, including
inventions (whether patentable or not), discoveries, trade secrets,
specifications, instructions, processes, formulae, materials, expertise and
other technology applicable to compounds, formulations, compositions, products
or to their manufacture, research, development, registration, use or
commercialization or methods of assaying or testing them or processes for their
manufacture, formulations containing them, compositions incorporating or
comprising them and including all biological, chemical, pharmacological,
biochemical, toxicological, pharmaceutical, physical and analytical, safety,
quality control, manufacturing, preclinical and clinical data, instructions,
processes, formulae, expertise and information.

 

“Knowledge”, as it relates to Seller, means, with respect to any matter in
question, the actual knowledge, after reasonable inquiry, of the individuals set
forth on Exhibit D, and, as it relates to Buyer, means, with respect to any
matter in question, the actual knowledge, after reasonable inquiry, of the
individuals set forth on Exhibit E.  Reasonable inquiry does not require

 

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that any of such Persons conduct or obtain any freedom-to-operate opinions or
similar opinions of counsel or any Intellectual Property clearance searches.

 

“Litigation” means any suit, claim, action, arbitration, investigation or
proceeding.

 

“Marketing Approval” means, with respect to any Product in a country or
jurisdiction, the approval, license or authorization of the applicable
Regulatory Authority(ies) necessary for the marketing and sale of such Product
for a particular Indication in such country or jurisdiction.

 

“MHLW” means the Japanese Ministry of Health, Labor and Welfare and any
successor agency thereto.

 

“NDA” means a New Drug Application (as more fully described in 21 CFR 314.50 et
seq. or its successor regulation) submitted to the FDA.

 

“Net Sales” means, with respect to a Product, the gross amount invoiced for any
sale of such Product by a Selling Person to a Person other than another Selling
Person, less the sum of the following deductions, to the extent attributable to
such Product and to the extent included in the invoice price or otherwise
actually incurred, allowed, accrued, granted or taken (if not previously
deducted from the amount invoiced):

 

(i)                                     reasonable and customary quantity, trade
and cash discounts and reasonable and customary rebates to customers granted in
the ordinary course of business;

 

(ii)                                  amounts repaid or credited by reason of
rejections or returns of such Product (including returns of such Product by
reason of a recall or damaged or defective goods);

 

(iii)                               customs, duties, tariffs and other
governmental charges, as well as sales, use, excise, inventory, value added, and
other Taxes, related to the sale, delivery or use of such Product by the Selling
Person borne by the Selling Person without reimbursement from any Third Party
(but not including taxes assessed against the income derived from such sale);

 

(iv)                              discounts, adjustments, rebates, fees,
credits, reimbursements, cash sale incentives, deductions, retroactive price
reductions and chargebacks granted to managed health care organizations,
healthcare institutions, other buying groups, providers of healthcare or social
and welfare systems, and including government-mandated rebates;

 

(v)                                 postage charges, shipping materials,
freight, insurance and other transportation charges; and

 

(vi)                              amounts previously included in Net Sales of
such Product that are written-off by the relevant Selling Person as
uncollectible in accordance with GAAP.

 

Such amounts shall be determined from the books and records of the applicable
Selling Person in accordance with GAAP.  Sales of a Product between or among the
Selling Persons for

 

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resale shall not be included within Net Sales; provided, however, that any
subsequent sale of a Product by any Selling Person to another Person that is not
a Selling Person shall be included within Net Sales.

 

Use or transfer of a Product for promotional, sampling, compassionate use,
patient assistance, named patient or research and development purposes, shall
not be considered Net Sales; provided, that, the quantity of Product that may be
given away as free samples for such purposes will be such quantities customary
in the industry for this sort of Product.

 

In the case of any sale of a Product for value other than in an arm’s length
transaction exclusively for cash, such as barter or counter-trade, Net Sales
shall be calculated based on the fair market value of the consideration
received.

 

“Patent Files” means, with regard to an Acquired Patent:  (a) the complete file
histories for such Acquired Patent; and (b) all files relating to such Acquired
Patent that are held or maintained on Seller’s behalf by Seller’s outside patent
counsel, Phillips Ormonde Fitzpatrick, including all contents of such files.

 

“Patent Rights” means any patents (including certificates of correction,
substitutions, extensions (including supplemental protection certificates),
registrations, confirmations, reissues, re-examinations and renewals), any
patent applications (including any provisional applications, divisionals,
continuations and continuations-in-part) in any jurisdiction (including any
supranational jurisdiction), and any invention disclosures.

 

“Permitted Encumbrances” means, each of the following as are immaterial,
individually or in the aggregate, in amount and would not impair the ownership
or use of the Acquired Assets: (a) liens for current Taxes not yet due and
payable or that are being contested in good faith by appropriate proceedings;
(b) deposits or pledges made in connection with, or to secure payment of,
workers’ compensation, unemployment insurance or similar programs mandated by
applicable Law or governmental regulations; (c) statutory or common Law liens in
favor of carriers, warehousemen, mechanics and materialmen, to secure claims for
labor, materials or supplies, and other like liens; (d) the terms and conditions
of (i) licenses for off-the-shelf software or generally available software,
(ii) non-disclosure agreements, and (iii) materials transfer agreements on
customary terms; and (e) liens in favor of customs and revenue authorities
arising as a matter of Law to secure payment of customs duties in connection
with the importation of goods.

 

“Person” means any individual, firm, corporation, partnership, limited liability
company, trust, joint venture, Governmental Entity or other entity.

 

“Phase 2 Trial” means, with respect to a Product, a clinical trial of such
Product in any country that meets the requirements of 21 CFR § 312.21(b), as
amended (or its successor regulation or comparable laws in countries outside the
United States).

 

“Phase 3 Trial” means, with respect to a Product, a clinical trial of such
Product in any country that meets the requirements of 21 CFR § 312.21(c), as
amended (or its successor regulation or comparable laws in countries outside the
United States).

 

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“Pivotal Trial” means, with respect to a Product, a human clinical trial of such
Product that is intended to form the primary basis of an efficacy claim in an
NDA submission and is the subject of a special protocol assessment agreement
with the FDA.

 

“Pricing Approval” means, with respect to a Product in a country or
jurisdiction, the approval, agreement, determination or governmental decision
establishing the price or level of reimbursement for such Product, if required
in the relevant country or jurisdiction prior to sale of such Product in such
country or jurisdiction.

 

“Product” means any product (including any pharmaceutical or therapeutic product
or mixture) containing an Acquired Compound as an ingredient, including all
formulations, dosage forms, line extensions, indications and modes of
administration thereof.

 

“Program Know-How” shall mean Know-How not included in the Acquired Patents,
which Know-How is Controlled by Seller or any of its Subsidiaries immediately
prior to the Closing or prepared by a third party consultant or contractor on
behalf of Seller or any of its Subsidiaries, to the extent such Know-How is
directed to the research, Development, manufacture (including synthesis,
formulation, finishing or packaging), use, offer for sale, sale or import of any
Acquired Compound.

 

“Regulatory Approval” means, with respect to an Product in a country or
jurisdiction, (a) Marketing Approval, and (b) all Pricing Approvals with respect
to such Product in such country or jurisdiction; provided, however, that, with
respect to the EU, such Pricing Approval is obtained from the relevant
Governmental Entity(ies) in France, Germany, Italy, Spain or the United Kingdom.

 

“Regulatory Authority” means any federal, national, multinational, state,
provincial or local regulatory agency, department, bureau or other governmental
entity with authority over the marketing, pricing or sale of a pharmaceutical
product in a country, including the FDA, the EMA, and the MHLW.

 

“Sales-Based Contingent Payment Period” means, with respect to a Product and a
country, the period of time beginning on the date of First Commercial Sale of
such Product in such country and ending on the expiration of the last Valid
Claim of any Acquired Patents Covering such Product in such country.

 

“[**]” means the compound designated by Seller as “[**],” the structure of which
is described in Exhibit B.

 

“[**]” means the compound designated by Seller as “[**],” the structure of which
is disclosed in the patents and patent applications set forth on Exhibit C.

 

“[**] Patents” means (a) the patents and patent applications set forth on
Exhibit C; (b) any and all divisionals, continuations and, to the extent
claiming subject matter claimed in a patent or patent application set forth on
Exhibit C, continuations-in-part of the Scheduled Patents; (c) any and all
foreign patent applications associated with the patent applications referenced
in the preceding clauses (a) and (b); (d) any and all patents issued or issuing
from the patent applications referenced in the preceding clauses (a) through
(c); and (e) any and all

 

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certificates of correction, substitutions, reissues, confirmations,
reexaminations, renewals, restorations, supplemental protection certificates and
extensions of any patent or patent application referenced in the preceding
clauses (a) through (d) in any jurisdiction (including any supranational
jurisdiction).

 

“Selling Person” means, with respect to a Product, Buyer and its Affiliates and
each licensee, sublicensee, assignee or other grantee of rights to develop,
market and sell such Product.

 

“Subsidiary” of any Person means another Person, an amount of the voting
securities, other ownership or voting partnership interests of which is
sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, fifty percent (50%)
or more of the equity interests of which) is owned directly or indirectly by
such first Person or by another Subsidiary of such Person.

 

“Taxes” means any and all taxes, charges, fees, duties, contributions, levies or
other similar assessments or liabilities, including, without limitation, income,
gross receipts, corporation, ad valorem, premium, value-added, net worth,
capital stock, capital gains, documentary, recapture, alternative or add-on
minimum, disability, registration, recording, excise, real property, personal
property, sales, use, license, lease, service, service use, transfer,
withholding, employment, unemployment, insurance, social security, national
insurance, business license, business organization, environmental, workers
compensation, payroll, profits, severance, stamp, occupation, escheat, windfall
profits, customs duties, franchise, estimated and other taxes of any kind
whatsoever imposed by Singapore, the United States of America or any state,
local or other government, or any agency or political subdivision thereof, and
any interest, fines, penalties, assessments or additions to tax imposed with
respect to such items or any contest or dispute thereof.

 

“Tax Returns” means any and all reports, returns (including information
returns), declarations, or statements relating to Taxes, including any schedule
or attachment thereto and any related or supporting workpapers or information
with respect to any of the foregoing, including any amendment thereof filed with
or submitted to any Governmental Entity in connection with the determination,
assessment, collection or payment of Taxes or in connection with the
administration, implementation or enforcement of or compliance with any legal
requirement relating to any Tax.

 

“Third Party Acquiror” means a third party which acquires Seller, whether by
merger, sale of stock, sale of assets or otherwise (a “Change of Control
Transaction”), which third party (a) is not the surviving entity following a
merger of Seller and (b) was not an Affiliate of Seller or an officer, director,
employee or consultant of Seller or any of its Subsidiaries, nor stockholder of
Seller or any of its Subsidiaries, prior to the closing of such Change of
Control Transaction.

 

“Valid Claim” means (a) any claim in any unexpired and issued patent that has
not been disclaimed, revoked or held invalid or unenforceable by a decision of a
court or other governmental agency 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 that has not been disclaimed or admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise,

 

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or (b) any claim of a pending patent application that has not been abandoned,
finally rejected or expired without the possibility of appeal or re-filing, nor
pending for [**] or more years, in the case of U.S. patent applications, or [**]
or more years, in the case of all other patent applications from the earlier
priority date claimed for such application.

 

SECTION 7.06  Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each party and delivered to the other party.

 

SECTION 7.07  Entire Agreement.  This Agreement and each Ancillary Agreement to
which both Buyer and Seller are parties contain the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.  Neither party shall be liable or bound to any other party in
any manner by any representations, warranties or covenants relating to such
subject matter except as specifically set forth herein, in each Ancillary
Agreement to which both Buyer and Seller are parties.

 

SECTION 7.08  Severability.  If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any Person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other Persons or
circumstances.

 

SECTION 7.09  Specific Enforcement.  The parties agree that irreparable damage
may occur and that the parties may not have any adequate remedy at law if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement, without bond or other security, this being in addition to any
other remedy to which any party is entitled at law or in equity.

 

SECTION 7.10  Arbitration of Disputes.

 

(a)                                 In the event any party has a dispute
regarding the Agreement, including the interpretation, performance, application,
termination or breach of this Agreement (the “Disputes”), such party shall
notify the other party regarding the nature and terms of such dispute.  The
parties hereto shall attempt in good faith to resolve all Disputes by mutual
agreement.

 

(b)                                 If any Dispute cannot be resolved by the
parties pursuant to Section 7.10(a) or otherwise within [**] days of the notice
of such Dispute, then upon written demand by either party such Dispute shall be
finally settled under the Rules of Arbitration of the International Chamber of
Commerce by three (3) arbitrators appointed in accordance with the said Rules
(the “Arbitral Tribunal”), each party nominating one (1) arbitrator and the two
(2) party-appointed arbitrators nominating the chairperson.  The place of
arbitration shall be San

 

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Francisco, California, USA, if Buyer demands arbitration, and Boston,
Massachusetts, USA, if Seller demands arbitration.  Subject to each party’s
right to seek injunctive relief pursuant to Section 7.10(c), the arbitration
shall be the sole and exclusive forum for resolution of any such Dispute, and
the award rendered shall be final and binding.  Judgment on the award rendered
may be entered in any court having jurisdiction thereof.

 

(c)                                  The procedures for arbitration pursuant to
this Section 7.10 shall be as follows:

 

(i)                                     The arbitration shall be conducted in
the English language and any non-English-language documents presented to the
Arbitral Tribunal at such arbitration shall be accompanied by an English
translation thereof.

 

(ii)                                  Any award of the Arbitral Tribunal: (A)
shall be in writing; and (B) shall state the reasons upon which such award is
based.

 

(iii)                               The Arbitral Tribunal shall have no
authority to award punitive damages or any other damages not measured by the
prevailing party’s actual damages.

 

(iv)                              Prior to the appointment of the Arbitral
Tribunal, any party may seek appointment of an emergency arbitrator pursuant to
said rules or may apply to any court having jurisdiction hereof and seek
injunctive relief in order to maintain the status quo until such time as the
arbitration award is rendered or the Dispute is otherwise resolved.  After the
appointment of the Arbitral Panel, any party may make an application to the
Arbitral Tribunal seeking injunctive relief to maintain the status quo until
such time as the arbitration award is rendered or the Dispute is otherwise
resolved.

 

(d)                                 Notwithstanding the foregoing, in addition
to the right of the parties to arbitrate Disputes in this Section 7.10, the
Arbitral Tribunal shall have the power to (i) enter an award or order of
specific performance to enforce the observance and performance of such covenant
or agreement and (ii) grant an injunction restraining such breach or threatened
breach.  The non-breaching party shall not be required to provide any bond or
other security in connection with any such award, order or injunction or in
connection with any arbitration or related action or proceeding.  Any
arbitration awards, whether preliminary or final, shall be enforceable in a
court of competent jurisdiction.

 

SECTION 7.11  Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.

 

SECTION 7.12  Amendments and Waivers.  This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.  By
an instrument in writing, Buyer or Seller may waive compliance by the other
party with any term or provision of this Agreement that such other party was or
is obligated to comply with or perform.  Each party agrees that no failure or
delay by the other party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right, power or
privilege hereunder.

 

39

--------------------------------------------------------------------------------

 

SECTION 7.13  Disclosure Schedules.  The representations and warranties
contained in Article III of this Agreement are subject to (a) the exceptions and
disclosures set forth in the part of the Disclosure Schedule corresponding to
the particular Section of Article III in which such representation and warranty
appears; (b) any exceptions or disclosures explicitly cross-referenced in such
part of the Disclosure Schedule by reference to another part of the Disclosure
Schedule; and (c) any exception or disclosure set forth in any other part of the
Disclosure Schedule to the extent it is readily apparent on its face and without
further inquiry that such exception or disclosure is intended to qualify such
representation and warranty.  The information set forth in the Disclosure
Schedule is disclosed solely for the purposes of this Agreement, and no
information set forth therein shall be deemed to be an admission by any party
hereto to any third party of any matter whatsoever, including of any violation
of Law or breach of any agreement.  The Disclosure Schedule and the information
and disclosures contained therein are intended only to qualify and limit the
representations, warranties and covenants of Seller contained in this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

40

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Buyer and Seller have duly executed this Agreement as of the
date first written above.

 

 

VERASTEM, INC.

 

 

 

By:

/s/ Robert Forrester

 

 

Name: Robert Forrester

 

 

Title: COO

 

 

 

 

 

 

 

S*BIO PTE LTD.

 

 

 

By:

/s/ Tamar Howson

 

 

Name: Tamar Howson

 

 

Title: CEO

 

[Signature Page to Asset Purchase Agreement.]

 

41

--------------------------------------------------------------------------------

 

SCHEDULE 5.06

 

Purchase Price Allocation

 

The Purchase Price shall be allocated by the Buyer and Seller among the Acquired
Assets and the non-competition covenants in accordance with Section 1060 of the
Code and any applicable U.S. Treasury Regulations.  The Buyer will provide
Seller a proposed allocation as soon as possible and in any event within [**]
Business Days from the date of this Agreement, and Seller will deliver to the
Buyer a notice setting forth any proposed changes to such proposed allocation
within [**] Business Days after the delivery of the proposed allocation to
Seller.  The Buyer and Seller will negotiate in good faith to resolve any
disputed items, and if they are unable to agree on the allocation within [**]
Business Days after Seller’s delivery of its notice of proposed changes to the
Buyer, then such dispute shall be deemed a Dispute (as defined in Section 7.10
of the Agreement) and will be resolved pursuant to Section 7.10 of the
Agreement.

 

Schedule 5.06-1

--------------------------------------------------------------------------------

 

SCHEDULE A

 

Acquired Patents

 

[**]

Jurisdiction

 

Application No.

 

Patent No. (if any)

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

Jurisdiction

 

Application No.

 

Patent No. (if any)

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

Schedule A-1

--------------------------------------------------------------------------------

 

EXHIBIT A

 

PATENT ASSIGNMENT

 

[attached]

 

Exhibit A-1

--------------------------------------------------------------------------------

 

ASSIGNMENT OF PATENTS AND PATENT APPLICATIONS

 

S*Bio Pte Ltd., a company organized under the laws of Singapore, located at c/o
EDBI, 250 North Bridge Rd #28-00 Raffles City Tower, Singapore 179101
(“Assignor”), hereby irrevocably sells, transfers, conveys and assigns to
Verastem, Inc., a Delaware corporation, located at 215 First Street, Suite 440,
Cambridge, Massachusetts 02142 USA (“Assignee”), the entire right, title and
interest for the United States of America and its territorial possessions, and
all foreign countries and patent regions, including all rights of priority, in
inventions disclosed in the patents and patent applications identified on
Schedule A, all such patents and patent applications, and in and to all Letters
Patents of the United States and all foreign countries and patent regions which
may or shall be granted on said inventions or applications, or any parts
thereof, or any divisional, continuing, reissue, reexamination, extension or
other applications based in whole or in part thereon or which claim priority or
are related by terminal disclaimer thereto or therefrom, including the right to
recover for past infringement (the “Assignment”).

 

Assignor acknowledges having received consideration for the Assignment.

 

Assignor agrees to execute all applications, amended specifications, deeds or
other instruments, and to do all acts necessary or proper to secure the grant of
Letters Patent in the United States and in all other countries and patent
regions to Assignee, to vest and confirm in Assignee, its successors and
assigns, the legal title to all such patents and patent applications, including
any separate written forms of assignment necessary to perfect the Assignment in
specific countries and patent regions.  Assignor appoints any officer of
Assignee as its duly authorized attorney to execute, file, prosecute and protect
the same before any government agency, court or authority.  Assignor hereby
declares that the foregoing powers are coupled with an interest and are and
shall be irrevocable by Assignor.

 

Assignor does hereby authorize and request the Commissioner of Patents and
Trademarks of the United States, and the equivalent authority in each other
country and patent region in the world, to issue such Letters Patent as shall be
granted upon said inventions or applications based thereon to Assignee, its
successors and assigns.

 

[Remainder of page left intentionally blank.]

 

Patent Assignment-S*Bio to Verastem

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed by its
duly authorized officer.

 

 

S*BIO PTE LTD.

 

 

 

 

 

Name:

 

Title:

 

Date:

 

STATE OF

)

 

 

 

 

 

 

 

)

ss

 

 

 

 

 

 

COUNTY of

 

On this        day of May, 2012, before me, the undersigned notary public,
personally appeared                                             , proved to me
through satisfactory evidence of identification, which was
                                              , to be the person whose name is
signed on the preceding document, and acknowledged to me that she signed it
voluntarily for its stated purpose.

 

[affix seal]

 

Notary Public

My commission expires:

 

S*Bio Signature Page—Patent Assignment-S*Bio to Verastem

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Assignee has caused this Assignment to be executed by its
duly authorized officer.

 

 

VERASTEM, INC.

 

 

 

 

 

Name:

 

Title:

 

Date:

 

COMMONWEALTH OF MASSACHUSETTS

 

County of

 

On this        day of May, 2012, before me, the undersigned notary public,
personally appeared                                             , proved to me
through satisfactory evidence of identification, which was
                                              , to be the person whose name is
signed on the preceding document, and acknowledged to me that he signed it
voluntarily for its stated purpose.

 

[affix seal]

 

Notary Public

My commission expires:

 

Verastem Signature Page—Patent Assignment-S*Bio to Verastem

 

--------------------------------------------------------------------------------

 

Schedule A

 

Assignment of Patents and Patent Applications

 

1.             Patents and patent applications titled: [**]

 

Priority Information

 

[**]

PCT Application Number

 

[**]

PCT Filing Date

 

[**]

 

[**]

Jurisdiction

 

Application No.

 

Filing Date or
National phase
entry date
(dd/mm/yyyy)

 

Patent No. (if
any)

 

Grant date (if
applicable)
(dd/mm/yyyy)

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

List of Patents—Patent Assignment-S*Bio to Verastem

 

A-1

--------------------------------------------------------------------------------

 

2.             Patents and patent applications titled: [**]

 

Priority Information

 

[**]

PCT Application Number

 

[**]

PCT Filing Date

 

[**]

 

[**]

Jurisdiction

 

Application No.

 

Filing Date or
National phase
entry date
(dd/mm/yyyy)

 

Patent No. (if any)

 

Grant date (if
applicable)
(dd/mm/yyyy)

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

List of Patents—Patent Assignment-S*Bio to Verastem

 

A-2

--------------------------------------------------------------------------------

 

EXHIBIT B

 

[**] STRUCTURE

 

[**]

 

[**]

 

B-1

--------------------------------------------------------------------------------

 

EXHIBIT C

 

[**] and [**] Patents

 

[**]

 

Chemical Name   : [**]

 

[**]

Jurisdiction

 

Application No.

 

Patent No. (if any)

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

C-1

--------------------------------------------------------------------------------

 

EXHIBIT D

 

SELLER’S KNOWLEDGE REPRESENTATIVES

 

[**]

 

[**]

 

[**]

 

D-1

--------------------------------------------------------------------------------

 

EXHIBIT E

 

BUYER’S KNOWLEDGE REPRESENTATIVES

 

[**]

 

[**]

 

E-1

--------------------------------------------------------------------------------