Exhibit 10.2

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisk denote omissions.

COLLABORATION AND OPTION AGREEMENT

by and between

Infinity Pharmaceuticals, Inc.

and

Novartis International Pharmaceutical Ltd.

 

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COLLABORATION AND OPTION AGREEMENT

This Agreement is made this 16th day of November, 2004 (the “Effective Date”) by
and between Infinity Pharmaceuticals, Inc. (“Infinity”), a Delaware corporation
with principal offices at 780 Memorial Drive, Cambridge, Massachusetts 02139,
and Novartis International Pharmaceutical Ltd. (“Novartis”), a Bermuda
corporation with principal offices at Hurst Holme, 12 Trott Road, Hamilton, HM
LX, Bermuda. Infinity and Novartis are sometimes referred to herein individually
as a “Party” and together as the “Parties.”

INTRODUCTION

WHEREAS, Infinity has developed a proprietary diversity oriented synthesis
methodology to design novel, three-dimensional, natural compound-like synthetic
compounds;

WHEREAS, Novartis and its Affiliates possess expertise in discovering,
developing, manufacturing, marketing, and selling pharmaceuticals worldwide;

WHEREAS, Infinity and Novartis desire to enter into a collaboration, the
objectives of which are the joint design by the Parties of Synthetic Pathways,
as defined herein, and the synthesis by Infinity, using such Synthetic Pathways,
of certain of the Library Compounds, as defined herein (the “Collaboration”);

WHEREAS, each of the Parties, together with its respective Affiliates, is
interested in screening Library Compounds against Targets with the goal of
developing and commercializing drugs for human therapeutic and other purposes;

WHEREAS, in the event that Infinity generates any Lead Programs, as defined
herein, using Library Compounds, then Novartis and its Affiliates shall have the
option to develop, market and sell the same as drugs upon the terms set forth
herein and in a License, Development and Commercialization Agreement identical
in substance to Exhibit A hereto; and

WHEREAS, in connection with the Collaboration, Infinity desires to sell, and
Novartis Pharma AG, an Affiliate of Novartis, desires to purchase on the
Effective Date 3,333,333 shares of Infinity’s Series C Preferred Stock for an
aggregate purchase price of U.S.$15 million, in accordance with the terms and
conditions of the Stock Purchase Agreement (as defined herein);

 

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NOW THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, and other good and valuable consideration, the Parties agree as
follows:

ARTICLE I

DEFINITIONS

1.1. “Acceptance Criteria” shall mean the minimum acceptable criteria set forth
in Section 2.2.4 that each Proposed Compound must meet before such Proposed
Compound can be deemed an Actual Compound.

1.2. “Actual Compound” shall mean Proposed Compounds which meet the Acceptance
Criteria in Section 2.2.4 and have been deemed an Actual Compound as set forth
in Section 2.2.6. For purposes of clarity, an Actual Compound shall also remain
a Library Compound.

1.3. “Active Moiety” shall have the meaning assigned to that term under 21 CFR
314.108(a), as such regulation is in effect on the Effective Date, namely: “the
molecule or ion, excluding those appended portions of the molecule that cause
the drug to be an ester, salt (including a salt with hydrogen or coordination
bonds), or other noncovalent derivative (such as a complex, a chelate or
clathrate) of the molecule, responsible for the physiological or pharmacological
action of the drug substance.”

1.4. “Affiliate” shall mean, with respect to any Person, any other Person which
directly or indirectly, by itself or through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person. The
term “control” (as applied to a Person) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Control will be presumed if one Person owns, either of
record or beneficially, at least fifty percent (50%) of the voting stock of any
other Person. Such other

 

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relationship as in fact results in actual control over the management, business,
and affairs of a Person shall also be deemed to constitute control; provided,
however, that no Person shall be deemed to exercise control over another Person
solely because the latter relies on the former for a majority of its business. A
Person will be deemed an Affiliate only so long as such ownership or control
relationship continues. In the case of Novartis, “Affiliates” shall also
expressly be deemed to include the Novartis Institute for Functional Genomics,
Inc. and the Friedrich Miescher Institute for BioMedical Research and their
respective Affiliates.

1.5. “Background Intellectual Property” shall have the meaning set forth in
Section 7.1.1(a).

1.6. “Collaboration” shall have the meaning set forth in the preamble hereto.

1.7. “Collaboration Intellectual Property” shall mean Compound Related
Intellectual Property, Compound Intellectual Property and Non-Compound Related
Intellectual Property.

1.8. “Compound Intellectual Property” shall have the meaning set forth in
Section 3.2.2.

1.9. “Compound Related Intellectual Property” shall have the meaning set forth
in Section 7.1.2.

1.10. “Controlled” shall mean, with respect to an Intellectual Property right,
the legal authority or right of a Party (other than by license pursuant to this
Agreement) to grant a license or sublicense of such intellectual property rights
to the other Party, or to otherwise disclose such proprietary or trade secret
information to such other Party, as applicable, without breaching the terms of
any agreement with a Third Party.

1.11. “Data Package” shall have the meaning set forth in Section 3.3.3.

1.12. “Data Receipt Notice” shall have the meaning set forth in
Section 3.3.4(a).

 

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1.13. “Derivative Compounds” shall mean any and all compounds that are modified
by chemical and/or molecular-genetic means from a Library Compound. Analogues of
such compounds and their derivatives shall be included within the scope of
Derivative Compounds.

1.14. “Effective Date” shall mean the effective date of this Agreement as set
forth on the first page.

1.15. “Field” shall mean all human and veterinary health-care applications
including, but not limited to, research, diagnosis, therapeutics, and
prophylaxis with respect to any indication, together with all agricultural
purposes.

1.16. “Genus License” shall have the meaning set forth in Section 3.2.1.

1.17. “Infinity Compound” shall have the meaning set forth in Section 3.4(b)
and/or Section 3.5, as applicable.

1.18. “Infinity Compound Patent” shall have the meaning set forth in
Section 3.2.3.

1.19. “Intellectual Property” shall mean all confidential and proprietary data,
technical information, know-how, experience, inventions (whether or not patented
and all Patents claiming such inventions), and trade secrets Controlled by a
Party or its Affiliates.

1.20. “Investors’ Rights Agreement” shall mean that certain Third Amended and
Restated Investors’ Rights Agreement dated as of the Effective Date.

1.21. “Joint Steering Committee” shall have the meaning set forth in
Section 2.3.1.

1.22. “Lead Criteria” shall have the meaning set forth in Section 3.3.2.

1.23. “Lead Program” shall mean any Library Compounds, together with all
Derivative Compounds (and together with any and all compounds having the same
Active Moiety as such Library Compounds or Derivative Compounds), which: (a) are
discovered during the course of screening and initial optimization of the
Library Compounds against a Target by Infinity or its Affiliates; (b) meet the
Lead Criteria; and (c) Infinity wishes to further optimize. A Lead Program may
be composed of one or more Lead Series.

 

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1.24. “Lead Series” shall mean the structurally-related Derivative Compounds
contained in a Lead Program. Each Lead Series shall contain at least [**]
chemical entities.

1.25. “Library Compound” shall mean any chemical entity that may be synthesized
through the synthetic transformations defining a Synthetic Pathway.

1.26. “License Agreement” shall mean the License, Development and
Commercialization Agreement, identical in substance to Exhibit A hereto, to be
executed by Infinity and Novartis with respect to Optioned Lead Program(s).

1.27. “Non-Acceptance Notice” shall have the meaning set forth in
Section 2.2.5(a).

1.28. “Non-Acceptance Notice Period” shall have the meaning set forth in
Section 2.2.5(a).

1.29. “Non-Compound Related Intellectual Property” shall have the meaning set
forth in Section 7.1.3.

1.30. “Novartis Reserved Target” shall have the meaning set forth in
Section 3.1.2(b)(iii).

1.31. “Option” shall have the meaning set forth in Section 3.3.1.

1.32. “Optioned Lead Program” shall mean any Lead Program as to which Novartis
has exercised its Option.

1.33. “Patents” means all existing patents and patent applications and all
patent applications hereafter filed, including any continuation,
continuation-in-part, divisional, provisional or any substitute applications,
any patent issued with respect to any such patent applications, any reissue,
reexamination, renewal or extension (including any supplementary protection
certificate) of any of the foregoing patents, and any confirmation patent or
registration patent or patent of addition based on any of the foregoing patents,
and all foreign counterparts of any of the foregoing.

 

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1.34. “Person” means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization or government or
political subdivision thereof.

1.35. “Proposed Compounds” shall mean that subset of Library Compounds that the
Joint Steering Committee determines are to be synthesized by Infinity during the
Collaboration pursuant to Section 2.2.3.

1.36. “Scaffold” shall mean a skeletal core of a molecule with designated
chemical functionality through which variable substituents can be attached
through standard organic chemical transformations, and that the Joint Steering
Committee designates as part of the Collaboration. Stereochemical variations in
the Scaffold shall be considered the same Scaffold. For clarity, representative
examples of compounds that would be inside or outside of a particular Scaffold
are described in Exhibit B.

1.37. “Stock Purchase Agreement” shall mean that Stock Purchase Agreement dated
as of the Effective Date by and between Infinity and Novartis Pharma AG, an
Affiliate of Novartis.

1.38. “Synthetic Pathway” shall mean any sequence of chemical transformations
that create a Scaffold, and that the Joint Steering Committee designates as part
of the Collaboration.

1.39. “Target” shall mean any biological entity identified as being potentially
involved in one or more disease states.

1.40. “Third Party” shall mean any Person that is not a Party or an Affiliate of
any Party.

1.41. “Threshold Date” shall have the meaning set forth in Section 3.1.2(b).

 

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ARTICLE II

THE COLLABORATION

2.1. Commencement; Direction.

The Collaboration shall commence on the Effective Date. The Joint Steering
Committee shall direct the conduct of the Collaboration.

2.2. Library Design and Synthesis.

2.2.1. Synthetic Pathways. During the course of the Collaboration, the Joint
Steering Committee shall design, and Infinity shall deliver Actual Compounds
from, no fewer than [**] and no more than [**] Synthetic Pathways.

2.2.2. Library Compounds. The Joint Steering Committee shall design Synthetic
Pathways, Scaffolds and their associated Library Compounds so as not to overlap
with compounds outside the scope of the Collaboration that are then in or under
development for the compound collection of a Party or its Affiliates. The vote
by each Party’s representatives to the Joint Steering Committee approving the
designation of a Synthetic Pathway and Scaffold shall be deemed a representation
by such Party that such Synthetic Pathway and Scaffold do not overlap with
compounds outside the scope of the Collaboration that are then in or under
development for the compound collection of such Party or its Affiliates. Upon
approval, each Synthetic Pathway and Scaffold, together with representative
examples and any written descriptions shall be attached and incorporated hereto
as Exhibit C.

2.2.3. Proposed Compounds. The Joint Steering Committee shall identify the
chemical entities to be synthesized by Infinity (the “Proposed Compounds”).
Infinity shall not synthesize more than [**] Actual Compounds using any [**]
Synthetic Pathway. Infinity shall synthesize, on average, between [**] and [**]
micromoles of each Proposed Compound. It is the expectation of the Parties that
Infinity will provide Novartis with [**] micromoles of each Proposed Compound;
provided, however, that for no more than [**] percent ([**]%) of the Proposed
Compounds generated in connection with any Synthetic Pathway, Infinity may
provide Novartis with an amount greater than or equal to [**], but less than
[**], micromoles of each such Proposed Compound. In no event will Infinity
provide Novartis with fewer than [**] micromoles of any Proposed Compound.

 

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2.2.4. Acceptance Criteria. Infinity will deliver to Novartis only Proposed
Compounds that, in Infinity’s reasonable judgment, meet the following Acceptance
Criteria:

(a) The quantities of Proposed Compounds delivered to Novartis shall be no less
than as set forth in Section 2.2.3.

(b) Each Proposed Compound shall be at least [**] percent ([**]%) pure, as
defined by HPLC-MS UV at 210 nm. In the event that the Joint Steering Committee
determines that HPLC-MS UV is not an appropriate detection method for a Proposed
Compound, its purity shall instead be determined by HPLC-MS ELSD.

(c) Infinity will provide Proposed Compounds to Novartis in barcoded Whatman
plates (96-deepwell, 1 ml) with Platelock™ heat-sealed foil covers from
Velocity11 (or other comparable sealing, mutually agreed by the Parties).
Novartis shall provide the Whatman plates to Infinity. If the Platelock™
heat-sealed foil covers from Velocity11 are used, Infinity shall provide them.
If other materials are used, the Parties will mutually agree on which Party
shall supply such other materials. The Proposed Compounds shall be provided in
[**] with eighty-eight (88) Proposed Compounds per plate in columns 1-11 and
with column 12 empty.

(d) The plates will be shipped on dry ice to the shipping destination indicated
by Novartis, via a carrier selected in advance by Novartis, FOB Infinity’s
facility in Cambridge, the cost of which shall be borne by Novartis.

(e) Contemporaneously with its delivery of the Proposed Compounds, Infinity
shall deliver to Novartis an accurate structural description for each Proposed
Compound in an electronic format reasonably acceptable to Novartis.

(f) Contemporaneously with its delivery of the Proposed Compounds, Infinity will
also deliver electronic copies of its production notebooks which contain
Synthetic Pathway information related to the Proposed Compounds that is
reasonably necessary to allow Novartis to

 

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synthesize the Proposed Compounds, which production notebooks include without
limitation all information regarding the reaction conditions, necessary
reagents, materials, and the like used by Infinity to synthesize the Library
Compounds and any intermediates made by Infinity. Such notebooks shall be
delivered in an electronic format reasonably acceptable to Novartis.

2.2.5. Non-Acceptance of a Proposed Compound.

(a) In the event that Novartis, in its reasonable discretion, determines that a
Proposed Compound does not meet the Acceptance Criteria, it shall so notify
Infinity in writing (the “Non-Acceptance Notice”) within [**] calendar days of
the delivery of such Proposed Compound (the “Non-Acceptance Notice Period”).

(b) Novartis shall disclose in any Non-Acceptance Notice which Acceptance
Criteria were not achieved. The Parties will share the data necessary to resolve
differences over whether the Acceptance Criteria were met and shall refer any
unresolved disputes to the Joint Steering Committee pursuant to Section 2.4.2.

(c) Infinity may, in its sole discretion, attempt to address the unachieved
Acceptance Criteria disclosed in the Non-Acceptance Notice, and may then
resubmit the relevant Proposed Compound to Novartis, along with other Proposed
Compounds, in accordance with the procedure specified in Section 2.2.4. The
timetable set forth in subsection (a) shall apply to the resubmitted Proposed
Compound as if it were being submitted to Novartis for the first time.

(d) If a Proposed Compound is ultimately rejected by the Joint Steering
Committee, then Novartis shall delete structural and related information with
respect to such Proposed Compound from Novartis’ databases and return to
Infinity all remaining Proposed Compound material which is not in Novartis’
screening format. Novartis may continue to include such material in screens;
provided, however, that Novartis shall not conduct research on such rejected
Proposed Compounds nor determine the structure of such Proposed Compound through
any analytical or other method.

 

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(e) Notwithstanding the foregoing, any Proposed Compound that is the subject of
a Non-Acceptance Notice or has been rejected by the Joint Steering Committee
shall remain a Library Compound for purposes of this Agreement.

2.2.6. Acceptance as an Actual Compound. In the event that Novartis does not
provide Infinity with a Non-Acceptance Notice in respect of a particular
Proposed Compound within the relevant Non-Acceptance Notice Period, such
Proposed Compound, upon expiration of the Non-Acceptance Notice Period, shall
automatically be deemed to be an Actual Compound.

2.2.7. Diligence Obligations. Prior to the [**] anniversary of the Effective
Date, Infinity shall synthesize and deliver to Novartis [**] Actual Compounds;
provided, however, that should Infinity not deliver [**] Actual Compounds to
Novartis by such anniversary date, then Infinity shall not be in breach of this
diligence obligation; provided further that Infinity shall continue using
commercially reasonable efforts to synthesize Actual Compounds thereafter until
Infinity shall have synthesized and delivered [**] Actual Compounds to Novartis,
unless otherwise agreed upon in writing between the Parties.

2.2.8. Payment for Actual Compounds. Upon submission by Infinity of a
corresponding invoice, Novartis shall pay Infinity U.S.$[**] per Actual
Compound, which amount shall be payable within [**] calendar days of receipt of
such invoice; provided, however, that in each case, Infinity shall not submit
any invoices (other than the final invoice of the Collaboration) until the
aggregate amount owed by Novartis equals or exceeds U.S.$[**].

2.3. Joint Steering Committee.

2.3.1. Composition. Upon execution of this Agreement, Infinity and Novartis will
establish a Joint Steering Committee (the “Joint Steering Committee”), which
shall consist of an equal number of executives or scientists as may be
designated by each Party from time to time. The Joint Steering Committee shall
initially have six (6) members. The Committee Chair will be appointed from among
the members of the Joint Steering Committee designated by Novartis.

 

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2.3.2. Meetings; Purposes. The Joint Steering Committee shall hold its first
meeting within thirty (30) calendar days after the Effective Date. At its first
meeting, the Joint Steering Committee shall outline a process to ensure that the
first Synthetic Pathway(s), the scope of the resulting Library Compounds and the
Proposed Compounds to be synthesized by Infinity from such Synthetic Pathways
are approved as quickly as possible so that Infinity can initiate synthesis of
such Proposed Compounds. Thereafter, the Joint Steering Committee shall meet
quarterly, or with such other frequency, and at such times, as may be
established by the Joint Steering Committee, at the offices of Infinity in
Cambridge, Massachusetts or Novartis in Basel, Switzerland or Cambridge,
Massachusetts (provided that no more than one meeting per calendar year shall be
held in Basel, Switzerland without the consent of the Parties), for the
following purposes:

(a) Determining the number of Synthetic Pathways,

(b) Determining the design of Synthetic Pathways, Scaffolds, the resulting
Library Compounds, and the Proposed Compounds to be synthesized by Infinity;

(c) Ensuring that Library Compounds will be designed so as not to overlap with
compounds then in, or under development for, either Party’s (or its Affiliates’)
compound collections outside of the Collaboration;

(d) Determining the Lead Criteria and the Data Package, on a Target by Target
basis, for each Target screened by Infinity pursuant to Article III for which
the Option applies (it being understood that such determinations shall be made,
whenever possible, at regularly scheduled meetings of the Joint Steering
Committee, but in no event more than [**] days after Infinity has proposed such
Target to Novartis in writing; and provided, however, that if the Lead Criteria
and Data Package are not determined within such [**] day period, then the
criteria specified in Sections 3.3.2 and 3.3.3, respectively, shall apply);

(e) Providing general oversight of the entire Collaboration between Infinity and
Novartis, including periodic review of the overall goals and strategy of the
Collaboration;

 

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(f) Attempting to resolve any disagreement between the Parties hereunder,
including disputes relating to an assertion pursuant to a Non-Acceptance Notice
that a Proposed Compound has failed to meet Acceptance Criteria, and discussion
and resolution, if possible, of any other deadlocked issues submitted to it;

(g) Addressing any matters raised under relevant provisions of the License
Agreement;

(h) With respect to a Lead Series which is subject to the Option, determining
whether Infinity shall have the right, if Infinity requests such right, to file
Patent applications, under Infinity’s name and at Infinity’s expense, directed
to such Lead Series, including any Actual Compounds in such Lead Series, prior
to the expiration of the [**] day Option exercise period or Novartis’ declining
the Option for such Lead Series, it being understood that: (i) Novartis and
Infinity shall cooperate in the drafting and filing of such Patent application;
(ii) such Patent application shall be subject to the conditions set forth in
Section 3.2.3 (except if Novartis shall decide otherwise); and (iii) if Novartis
exercises its Option with respect to such Lead Program, such Patent applications
shall be assigned to Novartis, and Infinity shall cause its Affiliates,
employees and/or consultants to so assign such Patent applications;

(i) Determining whether HPLC-MS UV at 210 nm is the appropriate purity detection
method for a synthesized compound described in Sections 2.2.4(b), 3.3.2(a) or
3.3.4(c);

(j) Determining whether to protect (through filing for and maintenance of
intellectual property protection and/or the enforcement or defense thereof, as
applicable) the Compound Related Intellectual Property; and

(k) Making any changes to the Acceptance Criteria set forth in Section 2.2.4.

2.4. Decisions of the Joint Steering Committee; Resolution of Disputes.

2.4.1. The Joint Steering Committee shall make decisions unanimously where
possible, but at least by majority vote, with respect to the matters described
in Sections 2.3.2(d), (h) and (j). In the event of a deadlock with respect to
such matters, Novartis shall have the deciding vote.

 

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2.4.2. The unanimous vote of the Joint Steering Committee shall be required in
order to make decisions with respect to the matters described in Sections
2.3.2(a), (b), (c), (e), (f), (i) and (k). In the event that the Joint Steering
Committee is deadlocked as to any of these issues, then the Parties may have the
issue referred to the Chief Scientific Officer of Infinity and the Vice
President of Global Discovery Chemistry of the Novartis Institutes for
BioMedical Research, Inc. (or their equivalent) for good faith resolution.
Notwithstanding the foregoing, with respect to Section 2.3.2(c), in no event
shall either Party have the right to force the other Party to accept the design
of a Synthetic Pathway or Scaffold which such other Party represents would
overlap with compounds then in, or under development for, such other Party’s (or
its Affiliates’) compound collections outside of the Collaboration.

2.4.3. The unanimous vote of the Joint Steering Committee shall be required in
order to make decisions with respect to the matter described in
Section 2.3.2(g). In the event that the Joint Steering Committee is deadlocked
as to this issue, then the Parties may have the issue referred to the Chief
Executive Officer of Infinity and the President of the Novartis Institutes for
BioMedical Research, Inc. (or their equivalent) for good faith resolution.

2.5. Additional Assistance by Infinity.

2.5.1. Third Party Improvements. In the event that a Third Party, for or on
behalf of Infinity, makes any improvements to reagents, materials, and the like
which are necessary for Novartis to synthesize an Actual Compound, Infinity
shall, at no cost to Novartis, grant Novartis any required permissions or
licenses from Infinity to use such improvements to the extent Infinity Controls
such improvements and will use reasonable efforts to help Novartis secure access
to such improvements from such Third Party on business terms comparable to those
afforded Infinity.

2.5.2. Hosting of Novartis Scientists. Infinity shall, [**], provide work space
and support on its premises for up to [**] Novartis scientists for an aggregate
of up to [**] calendar days each (it being understood that such period shall
refer to the total number of days each scientist is hosted on the Infinity
premises, and not necessarily a period of [**] consecutive calendar days), in
increments of at least [**] calendar days per visit, in order to assist Novartis
in

 

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connection with the resynthesis of Actual Compounds; provided that Novartis
shall reimburse Infinity for any reasonable, documentable expense for reagents
and consumables used by such Novartis scientists in connection with such
resynthesis. Each such visit by a Novartis scientist shall be scheduled at least
[**] weeks in advance.

2.5.3. Provision of Infinity Chemist. At the request of Novartis and on
Novartis’ premises, Infinity shall provide a chemist, reasonably acceptable to
Novartis, for up to [**] per Synthetic Pathway, to assist Novartis with the
resynthesis of Actual Compounds related to such Synthetic Pathway. The provision
of such chemist shall be [**], provided that Novartis shall reimburse Infinity
for any reasonable, documentable out-of-pocket and travel expenses incurred by
such chemist in connection therewith. Each such visit by an Infinity chemist
shall be scheduled at least [**] weeks in advance.

2.6. Exchange of Information.

2.6.1. Status of Collaboration. Infinity and Novartis will share information
with the Joint Steering Committee, no less frequently than at the quarterly
meetings of the Joint Steering Committee, reasonably necessary to facilitate
mutual understanding of the status of the Collaboration and decision-making in
connection therewith.

2.6.2. Misuse of Background Intellectual Property. Neither Party shall use the
Background Intellectual Property of the other (excluding information which is no
longer subject to confidentiality restrictions under Article IV by reason of the
exceptions set forth in Sections 4.2(a), (c), (d) and (e)) for any purpose,
including the filing of Patents containing such information, without the other
Party’s written consent, other than for carrying out the Collaboration or
discharging its responsibilities under the License Agreement, or as otherwise
permitted hereunder or under the License Agreement.

2.6.3. Restrictions on Rights. Neither Party shall be entitled to receive
information from the other Party concerning Intellectual Property discovered or
developed by that Party outside the Collaboration or otherwise unrelated to
design and synthesis of Synthetic Pathways, Scaffolds, Library Compounds, or
Lead Programs under this Agreement or the

 

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License Agreement; except that, with respect to each Proposed Compound, Infinity
shall also disclose to Novartis in a timely manner any and all Intellectual
Property (including, without limitation, know-how and/or technology which it
discovers or develops regarding the Synthetic Pathways and/or Scaffolds) which
Infinity used to synthesize such Proposed Compound.

2.7. Exclusivity; Freedom of Action.

Infinity will collaborate on the Synthetic Pathways with Novartis solely. For
the avoidance of doubt, and except as otherwise set forth in this Agreement or
the License Agreement, either Party and any of its Affiliates shall be free,
alone or together with Third Parties, to pursue the identification, development
or commercialization of chemical entities that modulate any Target, free of any
obligation to the other Party not expressly stated in this Agreement or the
License Agreement (but subject to any Intellectual Property rights of such other
Party not expressly granted in this Agreement or the License Agreement).

ARTICLE III

INTELLECTUAL PROPERTY RIGHTS;

OPTION TO DEVELOP AND COMMERCIALIZE

3.1. Use Rights with Respect to Library Compounds.

3.1.1. Novartis’ Ownership and Use Rights with Respect to Library Compounds.
Novartis shall be the sole owner of all Actual Compounds, including Infinity
Compounds. Subject to the other terms and conditions of this Agreement, Novartis
and its Affiliates shall have the right, alone or with Third Parties, to make,
use, sell, offer to sell, export, import, license and distribute any and all
Library Compounds for research, development, and commercialization purposes;
provided that during the term of this Agreement, Novartis and its Affiliates may
not sell, offer to sell, export, import, license or distribute the Library
Compounds as libraries per se. Notwithstanding the foregoing, a sale, an offer
for sale, an exportation, an importation, a license or a distribution of the
Library Compounds as part of a larger asset transfer or transaction shall not be
deemed “a sale, an offer for sale, an exportation, an importation, a license or
a distribution as a library” hereunder.

 

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3.1.2. Infinity’s Use Rights with Respect to Library Compounds.

(a) Subject to the other terms and conditions of this Agreement (including,
without limitation, Section 3.3.5), Infinity shall have the right to screen
Library Compounds against any Target; provided that Infinity may not sell or
otherwise provide such Library Compounds to any Third Party (except that
Infinity may (i) provide Library Compounds to subcontractors working on
Infinity’s behalf to fulfill Infinity’s obligations under this Agreement and
(ii) sell, license or otherwise distribute to Third Parties Library Compounds
specifically identified as included in a Lead Program with respect to a Target
(other than a Novartis Reserved Target) for which Novartis has declined its
Option, for which the relevant [**] day Option exercise period has expired, or
for which Novartis does not have an Option).

(b) Prior to the [**] anniversary of the Effective Date or the [**] anniversary
of the acceptance by Novartis of the [**] Actual Compound, whichever is later
(the “Threshold Date”), Infinity shall be restricted with respect to screening
Library Compounds, as follows:

 

  (i) Infinity shall offer all Lead Programs to Novartis pursuant to the Option.

 

  (ii) Prior to screening, Infinity must disclose the Target proposed to be
screened or the other screening efforts to be undertaken, as applicable, in
writing to a Novartis representative selected by the Joint Steering Committee.
In the event that such screening efforts are not directed to a particular
Target, then Infinity shall notify the Novartis representative selected by the
Joint Steering Committee promptly upon the identification of the modulated
Target(s) resulting from such screening efforts, and the conditions set forth in
Section 3.3 shall apply regardless of when such Target(s) is identified.

 

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  (iii) If, at the time of disclosure, Novartis has a discovery program or
proposed program regarding the proposed Target, or if Novartis is screening or
otherwise committing scientific effort and resources to study the Target which
effort and resources are consistent with Novartis’ other Target programs or is
planning to screen or otherwise study the Target during the next [**] months,
then Novartis will so notify Infinity in writing within [**] calendar days after
such disclosure that the proposed Target of such screening is a “Novartis
Reserved Target,” in which case the provisions of Section 3.3.5(b) with respect
to Novartis Reserved Targets shall apply.

(c) For the avoidance of doubt, Lead Programs resulting from screening Library
Compounds prior to the Threshold Date shall be subject to Sections 3.3.5.

3.2. Patent Rights and License Grants with Respect to Library Compounds, Actual
Compounds and Infinity Compounds.

3.2.1. Patent Rights and License Grants to Library Compounds that are not Actual
Compounds or Infinity Compounds. At any time, either Party or its Affiliates may
file or obtain Patents with respect to claims (specific or generic) covering
Library Compounds that are not Actual Compounds or Infinity Compounds (including
claims as to the use or manufacture thereof), subject to an automatic grant to
the other Party and its Affiliates under such Patents of a worldwide, perpetual
(subject to the last sentence of this Section 3.2.1), non-exclusive, fully-paid,
royalty-free license (with the right to sublicense) to conduct research with
respect to such Library Compounds in the Field, it being understood that the
purpose of such research is the development of products in the Field. In the
case of Library Compounds that are not Infinity Compounds, Infinity shall
automatically grant Novartis and its Affiliates, under the genus claims of
Infinity’s composition of matter claims in such Patents covering such Library
Compounds and their manufacture, a perpetual (subject to the last sentence of
this Section 3.2.1), worldwide, non-exclusive, fully-paid, royalty-free license
(with right to sublicense), to research, develop,

 

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commercialize, make, use, manufacture, export, import, offer to sell and sell
such Library Compounds in the Field (the “Genus License”); provided, however,
that: (a) this license shall not apply with respect to uses against any Target
that was the basis of a Lead Program for which Novartis has declined to exercise
its Option or for which the relevant [**] day Option exercise period has
expired; and (b) for such Infinity programs arising from screening Library
Compounds after the Threshold Date (and therefore for which no Option applies),
this license shall not apply with respect to Targets for which one or more
Library Compounds are exemplified in such Patents, by way of actual examples, to
modulate such Targets as their primary mechanism of action. The foregoing
licenses shall survive any termination or expiration of this Agreement, except
if such termination is caused by the breach of the Party receiving such license.

3.2.2. Patent Rights and License Grants with Respect to Actual Compounds.
Novartis or its Affiliates shall have the sole right to obtain Patents with
respect to claims (whether specific or generic) covering Actual Compounds
(including, without limitation, claims as to the manufacture or use thereof)
that are not Infinity Compounds (the “Compound Intellectual Property”), except
as set forth in Section 2.3.2(h), subject to an automatic grant to Infinity and
its Affiliates under such Patents of a perpetual, worldwide, non-exclusive,
fully-paid, royalty-free license (with the right to sublicense) to conduct
research with respect to such Actual Compounds in the Field. The foregoing
license shall survive any termination or expiration of this Agreement, except if
such termination is caused by Infinity’s breach.

3.2.3. Patent Rights and License Grants with Respect to Infinity Compounds. In
the event that Infinity designates an Actual Compound as an Infinity Compound
pursuant to the terms of Section 3.4(b) or Section 3.5, as applicable, Novartis
shall automatically assign to Infinity, for patenting purposes only, Novartis’
rights in such Infinity Compound, and shall automatically grant Infinity and its
Affiliates a worldwide, exclusive even as to Novartis, fully-paid, royalty-free
license (with the right to sublicense) under its interest in the Collaboration
Intellectual Property to research, develop, commercialize, use, manufacture,
import, export, offer to sell and sell such Infinity Compounds in the Field.
Infinity shall have the sole right, at

 

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Infinity’s expense, to file, prosecute and maintain Patents with respect to
claims covering Infinity Compounds (including claims as to the manufacture or
use thereof) (an “Infinity Compound Patent”); provided that: (i) each individual
Infinity Compound Patent shall not claim Infinity Compounds (including claims as
to the manufacture or use thereof) derived from more than [**] Synthetic Pathway
and shall respect the conditions set forth in Section 3.4(b)(i) through (v); and
(ii) in the event an Infinity Compound Patent erroneously covers an Actual
Compound, Infinity shall grant to Novartis and its Affiliates under such
Infinity Compound Patent a worldwide, exclusive even as to Infinity, fully-paid,
royalty-free license (with right to sublicense) to research, develop,
commercialize, use, manufacture, import, export, offer to sell and sell such
Actual Compounds in the Field, and the research license granted to Infinity
pursuant to Section 3.2.2 shall not be applicable with respect to such Actual
Compound. For the avoidance of doubt, any claims covering an Actual Compound:
(a) in a Lead Series which is subject to the Option for which the relevant [**]
day Option exercise period has not yet expired nor been declined by Novartis
shall not be considered erroneous if: (1) Infinity has been permitted the right
to file and obtain Patents with respect to such Lead Series pursuant to
Section 2.3.2(h), and (2) Infinity designates such Actual Compounds as Infinity
Compounds within [**] days after Novartis has declined its Option with respect
to such Lead Series or for which the relevant [**] day Option exercise period
has expired; (b) in a Lead Series which was subject to the Option which Option
Novartis had declined or for which the relevant [**] day Option exercise period
has expired shall not be considered erroneous if Infinity designates such Actual
Compounds as Infinity Compounds pursuant to Section 3.4(b); or (c) with respect
to Infinity’s screening activities directed at the Library Compounds which are
conducted after the Threshold Date shall not be considered erroneous if Infinity
designates such Actual Compounds as Infinity Compounds pursuant to Section 3.5.
In addition, Infinity shall automatically grant to Novartis and its Affiliates a
worldwide, non-exclusive, full-paid, royalty-free license (with the right to
sublicense) under its interest in the Infinity Compound Patents, the
Collaboration Intellectual Property and the Background Intellectual Property to
conduct research with respect to the relevant Infinity Compound in the Field.
For the avoidance of doubt, the Genus License shall be applicable to its related
Infinity Compound Patent with respect to claims covering Library

 

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Compounds that are not Actual Compounds or Infinity Compounds. The foregoing
licenses shall survive any termination or expiration of this Agreement, except
if such termination is caused by the breach of the Party receiving the license.

3.3. Option with Respect to Lead Programs.

3.3.1. Exclusivity. For Lead Programs developed from screening Library Compounds
prior to the Threshold Date, Novartis shall have the exclusive right (the
“Option”) to obtain a worldwide, exclusive license (with right to sublicense) on
a Target-by-Target basis, to develop and commercialize any such Lead Program in
the Field, under the terms and conditions set forth in the License Agreement.

3.3.2. Lead Criteria. Prior to the Threshold Date, and before Infinity commences
screening a Target (or when a Target is identified as set forth in
3.1.2(b)(ii)), the Joint Steering Committee shall determine, pursuant to
Section 2.3.2(d), the appropriate assays and criteria (the “Lead Criteria”) that
will trigger Novartis’ Option with respect to such Lead Program comprised of one
or more Lead Series, such Lead Criteria to include at least the following:

(a) [**], as applicable, and purification (>[**]% purity by HPLC-MS UV 210 nm;
in the event that the Joint Steering Committee determines that HPLC-MS UV is not
an appropriate detection method, then purity shall instead be determined by
HPLC-MS ELSD), in each case, of at least [**] chemical entities per Lead Series;

(b) [**] in an enzymatic assay or other primary assay;

(c) [**] in a cellular or functional assay than that found in the enzymatic
assay or other primary assay;

(d) evidence of [**]; and

(e) evidence of [**].

3.3.3. Data Package. Infinity shall deliver to Novartis the following
information and materials with respect to such Lead Program (collectively, the
“Data Package”):

(a) Data evidencing achievement of all Lead Criteria set forth in Section 3.3.2;
and

 

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(b) The following data for the most potent compound of each Lead Series:
(i) [**]; (ii) [**]; (iii) [**]; (iv) [**]and (v) [**].

3.3.4. Exercise of an Option.

(a) Novartis shall have [**] calendar days after receipt of the Data Package in
which to provide written notice to Infinity (the “Data Receipt Notice”) as to
whether the Data Package is complete and whether the Lead Criteria have been
achieved with respect to the relevant Lead Program, each as reasonably
determined by Novartis. If Novartis has not provided a Data Receipt Notice to
Infinity within such [**] day period, the Data Package shall be deemed to be
complete and the Lead Criteria shall be deemed to have been achieved with
respect to the Lead Program.

(b) If Novartis reasonably determines that the Data Package is incomplete or
that the Lead Criteria have not been achieved, then Infinity may perform
additional research as necessary and resubmit the Data Package; provided that
Novartis shall have additional [**] calendar day periods to evaluate each such
resubmission.

(c) If Novartis determines that the Data Package is complete and that the Lead
Criteria have been achieved, then, in the Data Receipt Notice, Novartis may
select chemical entities in each Lead Program as set forth in 3.3.2(a) for
synthesis (up [**] milligrams of purified material) and delivery by Infinity to
Novartis for further biological testing which may include the following:
(i) confirmation of activity in primary and cellular systems; (ii) hERG channel
inhibition using patch clamp assay; (iii) in vivo efficacy and PK; (iv) detailed
metabolism studies; and (v) other studies at Novartis’ discretion. In addition,
Infinity will provide access to screening data, if required by Novartis. Within
[**] business days after receipt of the request, Infinity will provide Novartis
with a quote for the expected length of time and the cost to provide each such
chemical entity. Infinity will base such quotation on an FTE rate of U.S.$[**]
per month to synthesize and deliver such chemical entities and in no case shall
the quotation exceed

 

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U.S.$[**] per chemical entity. Novartis shall have [**] calendar days in which
to accept or reject such quote in writing. If Novartis does not accept such
quote within such [**] day period, Infinity shall have no obligation to
synthesize such compounds and deliver the related information. If Novartis
accepts such quote within such [**] day period, Infinity will use its
commercially reasonable efforts to provide such synthesized compounds within
[**] weeks after receipt of Novartis’ written acceptance of such quote. Each
such synthesized compound shall be greater than [**] percent ([**]%) pure as
determined by HPLC-MS UV 210 nm. In the event that the Joint Steering Committee
determines that HPLC-MS UV is not an appropriate detection method, then purity
shall instead be determined by HPLC-MS ELSD. With each such synthesized compound
delivered, Infinity shall also contemporaneously provide a certificate of
analysis including the HPLC chromatogram, proton and carbon NMR spectra and
detailed synthetic protocol used for the synthesis.

(d) It shall be the responsibility of the Novartis representatives of the Joint
Steering Committee to communicate to Infinity if Novartis chooses, in its sole
discretion, to exercise the Option. The Novartis representatives of the Joint
Steering Committee may involve other employees or consultants of Novartis and
its Affiliates in this process, on a need-to-know basis and subject to the
provisions of Article IV, as is reasonably necessary to determine whether or not
to exercise the Option.

(e) Novartis shall have [**] calendar days from receipt of the last requested
samples meeting the criteria described in subsection (c), or, if either no
samples are requested or samples are requested but Novartis does not accept
Infinity’s quote therefor pursuant to subsection (c), [**] calendar days from
receipt of the Data Receipt Notice, to exercise its Option with respect to the
relevant Lead Program. Novartis may exercise such Option by delivery to Infinity
of written notice of exercise, specifying the Lead Program as to which such
Option is being exercised, in which case, once the License Agreement is
executed, Novartis shall have the exclusive right to file, prosecute and
maintain Patents in its name covering inventions relating to the Lead Program as
provided in the License Agreement. The Parties shall then promptly execute the
License Agreement, the terms of which, upon such execution, shall be
incorporated

 

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by reference into, and shall be a part of, this Collaboration Agreement,
pursuant to which terms, Infinity will grant Novartis and its Affiliates a
worldwide, exclusive even as to Infinity license (with the right to sublicense),
to develop and commercialize the Lead Program as an Optioned Lead Program under
Infinity’s Background Intellectual Property and under Infinity’s rights and
interest in the Collaboration Intellectual Property in the Field. If an Option
has previously been exercised with respect to another Lead Program and a License
Agreement is in effect with respect to that Lead Program, then the License
Agreement will be amended to reflect the addition of another Lead Program as an
Optioned Lead Program.

3.3.5. Restrictions on Commercialization or Partnering.

(a) Any Target. Until such time as Novartis affirmatively declines its Option
for a Lead Program, or until the expiration of the relevant [**] day Option
exercise period, whichever comes first, Infinity shall not, subject to
Section 2.3.2(h), file any Patent covering such Lead Program, commercialize such
Lead Program or collaborate with a Third Party (except subcontractors working on
Infinity’s behalf in connection with its obligations hereunder) with respect to
the development or commercialization of such Lead Program.

(b) Novartis Reserved Targets. If Novartis does not exercise its Option for a
Lead Program with respect to any Target that is a Novartis Reserved Target, then
Infinity shall not, subject to Section 2.3.2(h), file any Patent covering such
Lead Program (or otherwise shall assign such Patent to Novartis), or pursue
further development or commercialization of such Lead Program, including any
Derivative Compounds of such Lead Program, whether alone or with a Third Party.

3.4. Declined Options on Targets Other Than Novartis Reserved Targets.

If Novartis does not exercise its Option with respect to any Target that is not
a Novartis Reserved Target during the [**] day Option exercise period or
Novartis affirmatively declines such Option, then the following shall apply:

(a) Upon request from Infinity, Novartis shall provide Infinity any data it has
generated in connection with evaluation of such Lead Program pursuant to
Section 3.3.4(c), and

 

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shall automatically grant to Infinity a non-exclusive license to use such data
for research, development and commercialization purposes, and shall return to
Infinity any remaining amounts of compounds that had been provided by Infinity
under Section 3.3.4(c) for evaluation of such Lead Program.

(b) Prior to initiating further lead optimization activities with respect to
such Lead Program or from time to time thereafter during the term of this
Agreement, and to the extent necessary to protect Infinity’s intellectual
property rights in such Lead Program, Infinity may select and designate Actual
Compounds within such Lead Program as “Infinity Compounds,” provided that
Infinity notifies Novartis of the same in writing and provides Novartis an
electronic data file containing each such proposed Infinity Compound and
Novartis has not, within [**] days of such notification, represented to Infinity
in writing that such Actual Compounds are already covered, specifically or
generically, by a Novartis Patent claiming inventions created before Novartis’
receipt of the Data Package for such Lead Program; and provided, further, that:

 

  (i) Prior to the [**] anniversary of the Effective Date, there shall be no
more than [**] Infinity Compounds at any time;

 

  (ii) After the [**] but prior to the [**] anniversary of the Effective Date,
there shall be no more than [**] Infinity Compounds at any time;

 

  (iii) After the [**] anniversary of the Effective Date, there shall be no more
than [**] Infinity Compounds at any time (including after the Threshold Date);

 

  (iv) In no event may more than [**] Infinity Compounds be derived from any
single Synthetic Pathway (including after the Threshold Date); and

 

  (v) Infinity may redesignate Infinity Compounds as Actual Compounds by
providing written notice and an electronic data file containing each such
Infinity Compound of the same to Novartis, in which case the total number of
Infinity Compounds shall be reduced by those redesignated as Actual Compounds.

 

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(c) For purposes of clarity, Infinity Compounds also remain Actual Compounds.

3.5. Designation of Infinity Compounds During the Term of this Agreement and
After The Threshold Date.

Infinity may select and designate as Infinity Compounds those Actual Compounds
necessary to protect Infinity’s intellectual property rights in lead
optimization efforts resulting from screening activities directed at the Library
Compounds which are conducted after the Threshold Date; provided that Infinity
notifies Novartis of the same in writing and provides Novartis an electronic
data file containing each such proposed Infinity Compound and Novartis has not,
within [**] days of such notification, represented to Infinity in writing that
such Actual Compounds are already covered, whether with generic or specific
claims, by a Patent Controlled by Novartis or its Affiliates that was filed
before Novartis’ receipt of such notification; and provided further that there
shall be neither more than [**] Infinity Compounds at any time nor shall more
than [**] Infinity Compounds be derived from any single Synthetic Pathway.
Infinity may redesignate Infinity Compounds as Actual Compounds by providing
written notice and an electronic data file containing each such Infinity
Compound of the same to Novartis, in which case the total number of Infinity
Compounds shall be reduced by those redesignated as Actual Compounds.

3.6. No Designation of Infinity Compounds After the Term of this Agreement.

After expiration or termination of this Agreement, (a) Infinity shall no longer
have the right to select and designate any Actual Compounds as Infinity
Compounds, and (b) Infinity shall not patent (whether with generic or specific
claims) any Actual Compounds. After expiration or termination of this Agreement,
Infinity shall have the right to screen Library Compounds against any Target;
provided that Infinity may not sell or otherwise provide such Library Compounds
to any Third Party (except to subcontractors working on Infinity’s behalf).

 

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ARTICLE IV

CONFIDENTIALITY

4.1. Undertaking.

During the term of this Agreement, each Party (the “Receiving Party”) shall keep
confidential, and other than as provided herein shall not use or disclose,
directly or indirectly, any trade secrets, confidential or proprietary
information, or any other knowledge, information, documents or materials,
disclosed to the Receiving Party by the other Party (the “Proprietary Party”),
whether in tangible or intangible form, the confidentiality of which such
Proprietary Party takes reasonable measures to protect, including but not
limited to Collaboration Intellectual Property.

(a) The Receiving Party shall take any and all lawful, reasonable measures to
prevent the unauthorized use and disclosure of such information, and to prevent
unauthorized Persons from obtaining or using such information. With the prior
written consent of the Proprietary Party, the Receiving Party may, however, use
and disclose such information to exercise its rights to file, prosecute and
maintain Patents within the Collaboration Intellectual Property as permitted by
this Agreement.

(b) The Receiving Party further agrees to refrain from directly or indirectly
taking any action which would constitute or facilitate the unauthorized use or
disclosure of such information. The Receiving Party may disclose such
information to its Affiliates, officers, employees and agents, to authorized
licensees and sublicensees, and to subcontractors in connection with the
Receiving Party’s obligations hereunder, to the extent necessary to enable such
Persons to perform their obligations hereunder or under the applicable license,
sublicense or subcontract, as the case may be; provided that such Affiliates,
officers, employees, agents, licensees, sublicensees and subcontractors have
entered into appropriate confidentiality agreements for secrecy and non-use of
such information which by their terms shall be enforceable by injunctive relief.
In the event any such Persons violate such agreements with respect to such
information, the Receiving Party shall enforce such agreements.

 

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(c) The Receiving Party shall be liable for any unauthorized use and disclosure
of such information by its Affiliates, officers, employees and agents and any
such licensees, sublicensees and subcontractors.

4.2. Exceptions.

Notwithstanding the foregoing, the provisions of Section 4.1 shall not apply to
knowledge, information, documents or materials that the Receiving Party can
conclusively establish:

(a) were generally available to the public at the time of disclosure or become
generally available to the public without the Receiving Party’s breach of any
obligation owed to the Proprietary Party;

(b) are permitted to be disclosed by the prior written consent of the
Proprietary Party;

(c) were known by the Receiving Party at the time of disclosure, or have become
known to the Receiving Party from a source other than the Proprietary Party,
other than by breach of an obligation of confidentiality owed to the Proprietary
Party;

(d) are disclosed by the Proprietary Party to a Third Party without restrictions
on its disclosure;

(e) are independently developed by the Receiving Party without breach of this
Agreement or any other confidentiality agreement between the Parties or between
a Party and an Affiliate of the other Party, without reference to or reliance
upon knowledge, information or materials of the Proprietary Party; or

(f) are required to be disclosed by the Receiving Party to comply with
applicable laws or regulations, to submit registration filings, to defend or
prosecute litigation or patents or to comply with governmental regulations,
provided that the Receiving Party provides prior written notice of such
disclosure to the Proprietary Party and takes reasonable and lawful actions to
avoid or minimize the degree of such disclosure.

 

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4.3. Publicity.

The Parties have agreed upon the timing and content of the initial press release
relating to this Agreement and the transactions contemplated herein. The Parties
will agree upon the timing and content of any other press release or other
public communications relating to this Agreement and the transactions
contemplated herein.

Except to the extent already disclosed in that initial press release or other
public communication, no public announcement concerning the existence or the
terms of this Agreement or concerning the transactions described herein shall be
made, either directly or indirectly, by Infinity or Novartis, except as may be
legally required by applicable laws, regulations, or judicial order, without
first obtaining the approval of the other Party and agreement upon the nature,
text, and timing of such announcement.

The Party desiring to make any such public announcement shall provide the other
Party with a written copy of the proposed announcement in sufficient time prior
to public release to allow such other Party to comment upon such announcement,
prior to public release.

Notwithstanding the foregoing, either Party may disclose: (a) to bona fide
potential or actual licensees or sublicensees only those terms of this Agreement
that are reasonably necessary to disclose in connection with a license or
sublicense as permitted this Agreement; and (b) to bona fide potential or actual
investors, lenders, investment bankers, acquirors, acquirees, or merger
partners, and to such Party’s consultants and advisors, only those terms of this
Agreement that are reasonably necessary in connection with a proposed equity or
debt financing, acquisition or business combination of such Party.

4.4. Survival.

The provisions of this Article IV shall survive for [**] years after the
termination or expiration of this Agreement.

 

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4.5. Equitable Relief.

The Receiving Party agrees that any breach of this Article IV may cause the
Proprietary Party substantial and irreparable injury and, therefore, in the
event of any such breach, in addition to other remedies that may be available,
the Proprietary Party shall have the right to specific performance and other
injunctive and equitable relief.

ARTICLE V

PUBLICITY

Each of Novartis and Infinity, and their respective Affiliates, agree not to
publish or publicly present any results, data, or scientific findings with
respect to the Collaboration without the prior written consent of the Joint
Steering Committee; provided, however, that, either Party may, without such
consent, file and prosecute Patent applications as permitted by this Agreement.
In the event of information already within the public domain, consent shall not
be unreasonably withheld if sought at least [**] calendar days prior to planned
submission for publication or oral presentation. In all other instances during
the term of this Agreement, publication shall be presumed to be impermissible
until the Joint Steering Committee shall have determined, in its sole judgment,
that all intellectual property rights shall have been adequately protected,
whether by filing of Patents or otherwise.

ARTICLE VI

INDEMNIFICATION

6.1. Indemnification by Infinity.

Infinity will indemnify, defend, and hold Novartis and its Affiliates, their
respective employees, shareholders, officers and directors and the successors,
heirs and assigns of each of them, harmless against any loss, damages, action,
suit, claim, demand, liability, expense, bodily injury, death or property damage
(a “Loss”), that may be brought, instituted or arise against or be incurred by
such Persons to the extent such Loss results from a Third Party claim based on
or arising out of:

 

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(a) the development, manufacture, use, sale, storage or handling of a Library
Compound or Derivative Compound by Infinity or its Affiliates or their
representatives, agents, licensees, sublicensees or subcontractors, or any
actual or alleged violation of law resulting therefrom; or

(b) the breach by Infinity of any of its covenants, representations or
warranties set forth in this Agreement;

(c) provided that the foregoing indemnification shall not apply to any Loss to
the extent such Loss is caused by the negligent or willful misconduct of
Novartis or its Affiliates or their representatives, agents, licensees,
sublicensees or subcontractors.

6.2. Indemnification by Novartis.

Novartis will indemnify, defend, and hold Infinity, and its Affiliates, and
their respective employees, shareholders, officers and directors and the
successors, heirs, and assigns of each of them, harmless against any Loss that
may be brought, instituted or arise against or be incurred by such Persons to
the extent such Loss results from a Third Party claim based on or arising out
of:

(a) the development, manufacture, use, sale, storage or handling of a Library
Compound or Derivative Compound by Novartis or its Affiliates or their
representatives, agents, licensees, sublicensees or subcontractors, or any
actual or alleged violation of law resulting therefrom; or

(b) the breach by Novartis of any of its covenants, representations or
warranties set forth in this Agreement;

(c) provided that the foregoing indemnification shall not apply to any Loss to
the extent such Loss is caused by the negligent or willful misconduct of
Infinity or its Affiliates or their representatives, agents, licensees,
sublicensees or subcontractors.

 

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6.3. Claims Procedures.

Each party entitled to be indemnified by the other party (an “Indemnified
Party”) pursuant to Sections 6.1 or 6.2 shall give notice to the other party (an
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
of any threatened or asserted claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom; provided that:

(a) Counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party’s expense
(unless: (i) the employment of counsel by such Indemnified Party has been
authorized by the Indemnifying Party; or (ii) the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in the defense of such action, in
each of which cases the Indemnifying Party shall pay the reasonable fees and
expenses of one law firm serving as counsel for the Indemnified Party, which law
firm shall be subject to approval, not to be unreasonably withheld, by the
Indemnifying Party);

(b) The failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Agreement to
the extent that the failure to give notice did not result in harm to the
Indemnifying Party;

(c) No Indemnifying Party, in the defense of any such claim or litigation, shall
consent to entry of any judgment or enter into any settlement, except with the
approval of each Indemnified Party (which approval shall not be unreasonably
withheld), except a settlement which imposes only a monetary obligation on the
Indemnifying Party and which includes as an unconditional term thereof the
giving of a release from all liability in respect to such claim or litigation by
the claimant or plaintiff to the Indemnified Party;

(d) Each Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request in writing
and shall be reasonably required in connection with the defense of such claim
and litigation resulting therefrom; and

 

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(e) In the event a claim is based partially on an indemnified claim described in
Sections 6.1 or 6.2 and partially on a non-indemnified claim, or is based
partially on a claim indemnified by one Party and partially on a claim
indemnified by the other Party pursuant to Sections 6.1 and 6.2, any payments
and reasonable attorney fees incurred in connection with such claims are to be
apportioned between the Parties in accordance with the degree of cause
attributable to each Party.

6.4. Compliance.

The Parties shall comply fully with all applicable laws and regulations in
connection with their respective activities under this Agreement.

ARTICLE VII

PATENTABLE INVENTIONS

7.1. Ownership and Licenses.

7.1.1. Background Intellectual Property.

(a) As between the Parties, all: (i) Intellectual Property Controlled by a Party
which is obtained independently from this Agreement (whether before or during
the term of this Agreement); and (ii) all inventions solely made and all
know-how or other Intellectual Property solely generated by such Party or its
Affiliates in the course of the Collaboration but not including Compound Related
Intellectual Property, Compound Intellectual Property and Non-Compound Related
Intellectual Property (collectively, “Background Intellectual Property”) shall
be owned by such Party.

(b) The foregoing notwithstanding, to the extent that use of the Background
Intellectual Property of one Party is necessary to the other Party to carry out
the purposes of the Collaboration or to exploit such other Party’s rights in
Library Compounds consistent with its

 

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other rights set forth herein, then the Party Controlling such Background
Intellectual Property hereby grants to the other Party and its Affiliates a
worldwide, non-exclusive, royalty-free license (with right to sublicense) to
such use in the Field.

7.1.2. Compound Related Intellectual Property. Each Party shall have an
undivided half-interest, independent of inventorship and without a duty to
account, in all inventions made and know-how or other Intellectual Property
generated solely or jointly by the Parties and/or its Affiliates in connection
with the Collaboration and specifically relating to the Library Compounds, but
not including the Library Compounds themselves or any uses thereof
(collectively, “Compound Related Intellectual Property”). Should the Joint
Steering Committee determine that Patents should be filed covering Compound
Related Intellectual Property pursuant to Section 2.3.2(j), then the Parties
shall determine which of them (including their Affiliates) shall be responsible
for filing, prosecuting and maintaining such Patents (for purposes of this
Section 7.1.2, the “Patenting Party”) at its own expense, and the other Party
and/or its Affiliates (for purposes of this Section 7.1.2, the “Non-Patenting
Party”) shall automatically assign (and shall cause its Affiliates, employees
and consultants to assign) to the Patenting Party its rights in such Patents,
and the Patenting Party shall automatically grant to the Non-Patenting Party and
its Affiliates a worldwide, non-exclusive (with the right to sublicense),
fully-paid, royalty-free license under any such Patents to the extent not
inconsistent with the licenses, rights, and obligations set forth herein.

7.1.3. Non-Compound Related Intellectual Property. Each Party shall have an
undivided half-interest, independent of inventorship and without a duty to
account, in all inventions solely or jointly made and all know-how or other
Intellectual Property solely or jointly generated by Infinity and/or its
Affiliates, on the one hand, and Novartis and/or its Affiliates, on the other
hand, in the course of the Collaboration but not including Compound Related
Intellectual Property and Compound Intellectual Property (collectively,
“Non-Compound Related Intellectual Property”). The Party which does not first
choose to patent (under its name or through its Affiliates) a patentable
invention within Non-Compound Related Intellectual Property (for purposes of
this Section 7.1.3, the “Non-Patenting Party”) shall

 

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automatically assign (and shall cause its Affiliates, employees and consultants
to assign) to the other Party (for purposes of this Section 7.1.3, the
“Patenting Party”) its rights in such patentable invention and the Patenting
Party shall automatically grant to the Non-Patenting Party and its Affiliates a
worldwide, non-exclusive (with the right to sublicense), fully-paid,
royalty-free license under any Patents covering such invention.

7.1.4. Preparation and Costs. Infinity or its Affiliates shall take
responsibility and pay for the preparation, filing, prosecution and maintenance
of all Patents with respect to: (a) any Library Compounds which are not Actual
Compounds (including the manufacture and use thereof) it chooses to patent; and
(b) the Infinity Compounds it chooses or is authorized to patent; (c) the
Compound Related Intellectual Property that it chooses to Patent; and (d) the
Non-Compound Related Intellectual Property it chooses to patent; and Novartis or
its Affiliates shall take responsibility and pay for the preparation, filing,
prosecution and maintenance of all Patents with respect to: (i) any Library
Compounds (including, without limitation, Actual Compounds which are not
Infinity Compounds, and Optioned Lead Programs and the manufacture and use
thereof) it chooses to patent; and (ii) Compound Related Intellectual Property
that it chooses to patent; and (iii) the Non-Compound Related Intellectual
Property it chooses to patent.

7.2. Discontinuation.

7.2.1. Should Infinity be responsible under Section 7.1 for the preparation,
filing, prosecution and maintenance of a particular Patent within Collaboration
Intellectual Property, it shall give at least thirty (30) calendar days’ advance
notice to Novartis of any decision to cease preparation, filing, prosecution and
maintenance of that Patent in a jurisdiction listed on Schedule 7.2(a).
Discontinuation may be elected on a country-by-country basis or for Patents
singly or in series. In such case, Novartis may elect at its sole discretion to
continue preparation, filing (under the name of Novartis or its Affiliates), and
prosecution or maintenance of the discontinued Patent at its sole expense.

7.2.2. Should Novartis be responsible under Section 7.1 for the preparation,
filing, prosecution and maintenance of a particular Patent within Non-Compound
Related Intellectual Property or Compound Related Intellectual Property, it
shall give at least thirty (30)

 

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calendar days’ advance notice to Infinity of any decision to cease preparation,
filing, prosecution and maintenance of that Patent in a jurisdiction listed on
Schedule 7.2(b). Discontinuation may be elected on a country-by-country basis or
for Patents singly or in series. In such case, Infinity may elect at its sole
discretion to continue preparation, filing (under the name of Infinity or its
Affiliates), and prosecution or maintenance of the discontinued Patent at its
sole expense.

7.3. Infringement.

Each Party shall notify the other promptly of any possible infringements,
imitations or unauthorized possession, knowledge or use of the Collaboration
Intellectual Property or Background Intellectual Property which the Parties
jointly own or which is exclusively licensed to such other Party pursuant to
this Agreement. Each Party shall promptly furnish the other Party with full
details of such infringements, imitations or unauthorized possession, knowledge
or use, and shall assist in preventing any recurrence thereof.

7.4. No Implied Licenses.

Except as expressly provided in this Agreement, neither Party grants the other
Party any rights or licenses under the first Party’s Intellectual Property or
Patents.

ARTICLE VIII

TERM AND TERMINATION

8.1. Term.

This Agreement will extend for eight (8) years from the Effective Date, unless
earlier terminated by either Party in accordance with this Agreement, or unless
extended by mutual agreement of the Parties.

8.2. Termination by Novartis for Cause.

Upon written notice to Infinity, Novartis may at its sole discretion
unilaterally terminate this Agreement upon the occurrence of any of the
following events (without prejudice to its rights to seek damages in connection
with any such event):

 

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(a) Infinity shall materially breach any of its material obligations under this
Agreement, the License Agreement, or the Stock Purchase Agreement, and such
material breach shall not have been remedied or steps initiated to remedy the
same to Novartis’ reasonable satisfaction, within ninety (90) calendar days
after Novartis sends written notice of breach to Infinity;

(b) Upon the insolvency or bankruptcy of Infinity, or upon Infinity’s ceasing to
function as a going concern by suspending or discontinuing its business for any
reason except for interruptions caused by Force Majeure; or

(c) Upon a sale, merger, consolidation, transfer, or other reorganization of
Infinity in which: (i) substantially all of the assets of Infinity are
transferred to a Third Party; or (ii) the holders of Infinity’s capital stock
immediately prior to the transaction hold less than a majority of the capital
stock of the surviving entity subsequent to the transaction and the Person(s)
which acquire the majority of the capital stock of the surviving entity have the
right to elect, and are not prohibited, whether by contract or otherwise, from
electing a majority of the Board of Directors of the surviving entity.

In the event of any valid termination under this Section 8.2, Novartis shall not
be required to make any payments under Section 2.2.8 for a Proposed Compound
unless such Proposed Compound had been deemed accepted as an Actual Compound
pursuant to Section 2.2.6 or Novartis has not returned to Infinity such Proposed
Compound pursuant to Section 8.4(b).

8.3. Termination by Infinity for Cause.

Infinity may at its sole discretion terminate this Agreement upon written notice
to Novartis upon the occurrence of any of the following events:

(a) Novartis shall materially breach any of its material obligations under this
Agreement, the License Agreement or the Stock Purchase Agreement and such
material breach shall not have been remedied or steps initiated to remedy the
same to Infinity’s reasonable satisfaction, within ninety (90) calendar days
after Infinity sends written notice of breach to Novartis; or

 

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(b) Upon the insolvency or bankruptcy of Novartis, or upon Novartis’ ceasing to
function as a going concern by suspending or discontinuing its business for any
reason except for interruptions caused by Force Majeure.

Notwithstanding the foregoing, the Stock Purchase Agreement, the Investors’
Rights Agreement, and any License Agreement then in effect shall each continue
in effect unless it is expressly terminated in accordance with its terms.

8.4. Effect of Termination.

(a) Except where explicitly provided elsewhere herein, termination of this
Agreement for any reason, or expiration of this Agreement, will not affect:
(i) obligations which have accrued as of the date of termination or expiration;
(ii) obligations and rights which expressly are intended to survive termination
or expiration of this Agreement, including obligations of confidentiality under
Article IV; (iii) the survival of Sections 2.6.2, 3.1.1, 3.1.2(a), 3.1.2(b)
(unless Infinity terminates this Agreement pursuant to Section 8.3), 3.2.1,
3.2.2, 3.2.3, 3.3.5(b), 3.6, 7.1, 7.2, 7.3, 7.4, 8.4 and 9.3, and Article VI and
X; (iv) the Option shall terminate upon termination of this Agreement by
Infinity pursuant to Section 8.3; and (v) the Stock Purchase Agreement,
Investors’ Rights Agreement, and any License Agreement in effect upon the
expiration or any termination of this Agreement shall each continue in effect
unless it is expressly terminated in accordance with its terms.

(b) Upon termination or expiration of this Agreement, Novartis shall delete
structural and related information with respect to Proposed Compounds for which
Novartis has not paid the relevant fee set forth in Section 2.2.8 from Novartis’
databases and return all remaining Proposed Compound material which is not in
Novartis’ screening format. Novartis may continue to include such material in
screens; provided, however, that Novartis shall not conduct research on such
rejected Proposed Compounds nor determine the structure of such Proposed
Compound through any analytical or other methods.

 

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ARTICLE IX

REPRESENTATIONS AND WARRANTIES

9.1. Representations and Warranties of Infinity.

Infinity represents and warrants to Novartis as follows:

(a) Authorization. This Agreement has been duly executed and delivered by
Infinity and constitutes the valid and binding obligation of Infinity,
enforceable against Infinity in accordance with its terms except as
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
bankruptcy, reorganization, moratorium and other laws relating to or affecting
creditors’ rights generally and by general equitable principles. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action on the part of Infinity, its officers and directors.

(b) Infinity Controlled Rights. As of the Effective Date, Infinity owns or
possesses adequate licenses or other rights to grant the licenses under the
Background Intellectual Property which Infinity Controls as of the Effective
Date. To the actual knowledge of Infinity as of the Effective Date, Infinity’s
practice, as of the Effective Date, of the Background Intellectual Property
which Infinity Controls as of the Effective Date does not infringe any Third
Party Patent. The granting of an Option to Novartis hereunder does not violate
any right of any Third Party.

9.2. Representations and Warranties of Novartis.

Novartis represents and warrants to Infinity as follows:

(a) Authorization. This Agreement has been duly executed and delivered by
Novartis and constitutes the valid and binding obligation of Novartis,
enforceable against Novartis in accordance with its terms except as
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
bankruptcy, reorganization, moratorium and other laws

 

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relating to or affecting creditors’ rights generally and by general equitable
principles. The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of Novartis, its officers
and directors.

(b) Novartis Controlled Rights. As of the Effective Date, Novartis owns or
possesses adequate licenses or other rights to grant the licenses under the
Background Intellectual Property which Novartis Controls as of the Effective
Date.

9.3. Disclaimer of Other Warranties.

EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 2.2.2, 3.4, 3.5, 9.1, 9.2 AND 10.15,
EACH PARTY EXPRESSLY DISCLAIMS ANY OTHER WARRANTY, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE X

MISCELLANEOUS PROVISIONS

10.1. Invoice Requirement.

Any amounts payable to Infinity hereunder shall be made in U.S. dollars within
sixty (60) calendar days after receipt by Novartis, or its nominee designated
for that purpose in advance by Novartis in writing to Infinity, of an invoice
covering such payment.

10.2. Governing Law and Jurisdiction.

This Agreement shall be governed and construed in accordance with the internal
laws of the State of Delaware.

10.3. Waiver.

No provision of this Agreement may be waived except in writing by both Parties.
No failure or delay by either Party in exercising any right or remedy hereunder
or under applicable law will operate as a waiver thereof, or a waiver of any
right or remedy on any subsequent occasion.

 

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10.4. Force Majeure.

Neither Party will be in breach hereof by reason of its delay in the performance
of or failure to perform any of its obligations hereunder, if that delay or
failure is caused by strikes, acts of God or the public enemy, riots, war,
terrorism, incendiaries, interference by civil or military authorities,
compliance with governmental priorities for materials, or any fault beyond its
control or without its fault or negligence (“Force Majeure”).

10.5. Severability.

Should one or more provisions of this Agreement be or become invalid, then the
Parties shall attempt to agree upon valid provisions in substitution for the
invalid provisions, which in their economic effect come so close to the invalid
provisions that it can be reasonably assumed that the Parties would have
accepted this Agreement with those new provisions. If the Parties are unable to
agree on such valid provisions, the invalidity of such one or more provisions of
this Agreement shall nevertheless not affect the validity of this Agreement as a
whole, unless the invalid provisions are of such essential importance for this
Agreement that it may be reasonably presumed that the Parties would not have
entered into this Agreement without the invalid provisions.

10.6. Government Acts.

In the event that any act, regulation, directive, or law of a country or its
government, including its departments, agencies or courts, should make
impossible or prohibit, restrain, modify or limit any material act or obligation
of the Parties under this Agreement, the Party, if any, not so affected, shall
have the right, at its option, to suspend or terminate this Agreement as to such
country, if good faith negotiations between the Parties to make such
modifications therein as may be necessary to fairly address the impact thereof,
are not successful after a reasonable period of time in producing mutually
acceptable modifications to this Agreement.

 

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10.7. Government Approvals.

Each Party will obtain any government approval required in its country of
domicile to enable this Agreement to become effective, or to enable any payment
hereunder to be made, or any other obligation hereunder to be observed or
performed. Each Party will keep the other informed of progress in obtaining any
such government approval, and will cooperate with the other Party in any such
efforts.

10.8. Export Controls.

This Agreement is made subject to any restrictions concerning the export of
materials and technology from the United States that may be imposed upon or
related to either Party from time to time by the Government of the United
States. Furthermore, each Party agrees that it will not export, directly or
indirectly, any technical information acquired from the other Party under this
Agreement or any products using such technical information to any countries for
which the United States Government or any agency thereof at the time of export
requires an export license or other governmental approval, without first
obtaining the written consent to do so from the Department of Commerce or other
agency of the United States Government when required by applicable statute or
regulation.

10.9. Assignment.

This Agreement may not be assigned or otherwise transferred by either Party
without the prior written consent of the other Party; provided that Novartis may
assign this Agreement without the consent of Infinity: (i) to any of its
Affiliates, if Novartis guarantees the full performance of its Affiliate’s
obligations hereunder; or (ii) in connection with the transfer or sale of all or
substantially all of its (or a subsidiary or division’s) assets or business, or
a controlling interest in its equity, or in the event of its merger or
consolidation with another company. Any purported assignment in contravention of
this Section 10.9 shall, at the option of the nonassigning Party, be null and
void and of no effect. No assignment shall release either Party from
responsibility for the performance of any accrued obligation of such Party
hereunder. This Agreement shall be binding upon and enforceable against the
successor to or any permitted assignees of either of the Parties.

 

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10.10. Affiliates and Subcontractors.

Each Party may perform its obligations hereunder personally or through one or
more Affiliates or subcontractors, although each Party shall nonetheless be
solely responsible for the performance of its Affiliates and subcontractors.
Neither Party shall permit any of its Affiliates or subcontractors to commit any
act (including any act of omission) that such Party is prohibited hereunder from
committing directly. The use of subcontractors by either Party shall not
increase the financial obligations of the other Party hereunder in any respect.

10.11. Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed to
be original and both of which shall constitute one and the same Agreement.

10.12. No Agency.

Nothing herein contained shall be deemed to create an agency, joint venture,
amalgamation, partnership or similar relationship between Novartis and Infinity
and their respective Affiliates. Notwithstanding any of the provisions of this
Agreement, neither Party shall at any time enter into, incur, or hold itself out
to Third Parties as having authority to enter into or incur, on behalf of the
other Party, any commitment, expense, or liability whatsoever, and all
contracts, expenses and liabilities in connection with or relating to the
obligations of each Party under this Agreement shall be made, paid, and
undertaken exclusively by such Party on its own behalf and not as an agent or
representative of the other.

10.13. Notice.

All communications between the Parties with respect to any of the provisions of
this Agreement will be sent to the addresses set out below, or to such other
addresses as may be designated by one Party to the other by notice pursuant
hereto, by prepaid, certified mail (which shall be deemed received by the other
Party on the seventh business day following deposit in the mails), or by
facsimile transmission (which shall be deemed received when transmitted), with
confirmation by first class mail letter, postage pre-paid, given by the close of
business on or before the next following business day:

 

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if to Novartis, at:

Novartis International Pharmaceutical Ltd.

Hurst Holme

12 Trott Road

P.O. Box 2899

Hamilton, HM LX

Bermuda

Attention: Emil Bock

Fax: (441) 296-5083

with a copy to:

Novartis Institutes for BioMedical Research, Inc.

400 Technology Square

Cambridge, Massachusetts 02139

Attention: Robert L. Thompson, Vice President and General Counsel

Fax: (617) 871-3354

if to Infinity, at:

Infinity Pharmaceuticals, Inc.

780 Memorial Drive

Cambridge, Massachusetts 02139

Attention: Adelene Perkins

Fax: (617) 453-1001

with a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention: Steven D. Singer, Esq.

Fax: (617) 526-5000

10.14. Headings.

The paragraph headings are for convenience only and will not be deemed to affect
in any way the language of the provisions to which they refer.

 

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10.15. Authority.

The undersigned represent that they are authorized to sign this Agreement on
behalf of the Parties. The Parties each represent that no provision of this
Agreement will violate any other agreement that such Party may have with any
other Person. Each Party has relied on that representation in entering into this
Agreement.

10.16. Entire Agreement.

This Agreement, together with the License Agreement (if and when executed) and
the Stock Purchase Agreement, and their respective schedules and exhibits, if
any, contain the entire understanding of the Parties relating to the matters
referred to herein, and may only be amended by a written document, duly executed
on behalf of the respective Parties.

10.17. No Consequential Damages.

NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL,
EXEMPLARY, PUNITIVE OR MULTIPLE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE
EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, LOST PROFITS
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY
NOTICE OF SUCH DAMAGES.

[Signature page follows]

 

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INFINITY PHARMACEUTICALS, INC. By:  

/s/ Adelene Q. Perkins

Title:   Chief Business Officer NOVARTIS INTERNATIONAL PHARMACEUTICAL LTD. By:  

/s/ Emil Boch

Title:   Member of Board of Directors By:  

/s/ Wendy Wiseman

Title:   Account Manager

 

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Schedule 7.2(a)

List of Countries Regarding Infinity Patent Protection

 

[**]   [**]   [**]

 

Collaboration Agreement — Confidential

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Schedule 7.2(b)

List of Countries Regarding Novartis Patent Protection

 

[**]   [**]   [**]

 

Collaboration Agreement — Confidential

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EXHIBIT A

LICENSE AGREEMENT

EXHIBIT A

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

This License, Development and Commercialization Agreement (this “License
Agreement”) is made this      day of                     , 200   by and between
Infinity Pharmaceuticals, Inc. (“Infinity”), a Delaware corporation with
principal offices at 780 Memorial Drive, Cambridge, Massachusetts 02139, and
Novartis International Pharmaceutical Ltd. (“Novartis”), a Bermuda corporation
with principal offices at Hurst Holme, 12 Trott Road, Hamilton, HM LX, Bermuda.
Infinity and Novartis are sometimes referred to herein individually as a “Party”
and together as the “Parties.”

Capitalized terms used but not defined in this License Agreement have the
meanings provided in the Collaboration and Option Agreement by and between
Infinity and Novartis, dated as of November     , 2004 (the “Collaboration
Agreement”).

Introduction

WHEREAS, pursuant to the Collaboration Agreement, Infinity and Novartis are, or
have been, engaged in designing Synthetic Pathways, synthesizing certain Library
Compounds using Synthetic Pathways, and Infinity is, or has been, generating
Lead Programs using Library Compounds; and

WHEREAS, Novartis has exercised its option under the Collaboration Agreement to
license exclusively one or more Optioned Lead Programs for worldwide development
and commercialization in the Field;

NOW THEREFORE, in consideration of the foregoing premises, the Parties agree as
follows:

 

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ARTICLE I

Definitions

1.1. “Affiliate” shall mean, with respect to any Person, any other Person which
directly or indirectly, by itself or through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person. The
term “control” (as applied to a Person) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Control will be presumed if one Person owns, either of
record or beneficially, at least fifty percent (50%) of the voting stock of any
other Person. Such other relationship as in fact results in actual control over
the management, business, and affairs of a Person shall also be deemed to
constitute control; provided, however, that no Person shall be deemed to
exercise control over another Person solely because the latter relies on the
former for a majority of its business. A Person will be deemed an Affiliate only
so long as such ownership or control relationship continues. In the case of
Novartis, “Affiliates” shall also expressly be deemed to include the Novartis
Institute for Functional Genomics, Inc. and the Friedrich Miescher Institute for
BioMedical Research and their respective Affiliates.

1.2. “Active Moiety” shall mean the smallest chemical pharmacophoric element or
three dimensional structure responsible for the physiological or pharmacological
action of the drug substance.

1.3. “Collaboration Agreement” shall have the meaning set forth in the preamble.

1.4. “Collaboration Intellectual Property” shall have the meaning set forth in
Section 1.7 of the Collaboration Agreement.

1.5. “Compound Patent” shall mean any Patent filed by Novartis and covering
molecules of an Optioned Lead Program Compound or a Derivative Compound. For the
avoidance of doubt, any subsequent Patent Controlled by Novartis covering,
without limitation, the manufacture, use or formulation of such molecules shall
not be within the definition of Compound Patent.

 

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1.6. “Controlled” shall mean, with respect to an Intellectual Property right,
the legal authority or right of a Party (other than by license pursuant to this
License Agreement) to grant a license or sublicense of such intellectual
property rights to the other Party, or to otherwise disclose such proprietary or
trade secret information to such other Party, as applicable, without breaching
the terms of any agreement with a Third Party.

1.7. “Licensed Derivative Compounds” shall mean all compounds that share
substantially the same Active Moiety as the Optioned Lead Program Compounds.

1.8. “Derivative Compounds” shall mean any and all compounds that are modified
by chemical and/or molecular-genetic means from a Optioned Lead Program
Compounds. Analogues of such compounds and their derivatives shall be included
within the scope of Derivative Compounds.

1.9. “Drug Product” shall mean a product prepared from bulk Optioned Lead
Program Compounds or Licensed Derivative Compounds (but not other Derivative
Compounds) (a “Licensed Drug Product”) or from bulk Derivative Compounds (but
not Licensed Derivative Compounds or Optioned Lead Program Compounds) (an “Other
Drug Product”), in finished dosage form ready for administration, as the case
may be, either to the ultimate consumer as a human or as a veterinary
pharmaceutical, or for agricultural purposes.

1.10. “FDA” shall mean the United States Food and Drug Administration, and any
successor agency serving the same function.

1.11. “Field” shall mean all human and veterinary health-care applications
including, but not limited to, research, diagnosis, therapeutics, and
prophylaxis with respect to any indication, together with all agricultural
purposes.

1.12. “First Commercial Sale” shall mean the first shipment of a Drug Product to
a Third Party by Novartis or its Affiliate or sublicensee in a country following
applicable Regulatory Approval of the Drug Product in such country.

 

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1.13. “IND” shall mean an application to the FDA, the filing of which is
necessary to commence clinical testing of pharmaceutical compounds in humans, or
the equivalent application to the equivalent agency in any other country or
group of countries.

1.14. “IND Acceptance” shall mean non-refusal of an IND by the FDA, or the
equivalent notice from a governmental authority other than the FDA.

1.15. “Infinity Background Intellectual Property” shall mean the Background
Intellectual Property Controlled by Infinity, as defined in Section 7.1 of the
Collaboration Agreement.

1.16. “Intellectual Property” shall have the meaning set forth in Section 1.19
of the Collaboration Agreement.

1.17. “Lead Program” shall have the meaning set forth in Section 1.23 of the
Collaboration Agreement.

1.18. “Library Compound” shall have the meaning set forth in Section 1.25 of the
Collaboration Agreement.

1.19. “Licensed Intellectual Property” shall mean the Licensed Patents, Licensed
Technology and Infinity Background Intellectual Property.

1.20. “Licensed Patents” shall mean any Patents Controlled by Infinity
(including without limitation any Patent within Collaboration Intellectual
Property) which, in the absence of a license hereunder, would be infringed by
using, making, offering to sell, importing, or commercializing the Optioned Lead
Program, Optioned Lead Program Compounds or Licensed Drug Products, a list of
which Patents is appended hereto as Schedule A and will be updated periodically
to reflect additions thereto during the course of this License Agreement.

1.21. “Licensed Technology” shall mean all data, technical information,
know-how, experience, inventions (whether or not patented), trade secrets,
processes and methods discovered, developed or applied (with the consent of its
owner) (including without limitation any Patent within Collaboration
Intellectual Property), other than Infinity Background

 

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Intellectual Property, which are Controlled by Infinity or its Affiliates and
which are necessary to Novartis’ exercise of its licensed rights to the Optioned
Lead Program, Optioned Lead Program Compound or Licensed Drug Product.

1.22. “Live Claim” shall mean a claim of any issued, unexpired Licensed Patent
or Compound Patent that shall not have been withdrawn, canceled or disclaimed,
nor held invalid or unenforceable by a court of competent jurisdiction in an
unappealed or unappealable decision.

1.23. “Major Market Country” shall mean the United States, United Kingdom,
France, Germany, Italy, Spain, or Japan.

1.24. “NDA” means a New Drug Application submitted to the FDA seeking approval
to market and sell a Drug Product in the Field in the United States of America,
or a corresponding application filed with any other regulatory agency seeking
approval to market and sell a Drug Product in the Field in another Major Market
Country.

1.25. “Net Sales” shall mean, with respect to any Optioned Lead Program
Compound, Derivative Compound or Drug Product, the gross amount invoiced by or
on behalf of Novartis and any Novartis Affiliate or sublicensee for that
Optioned Lead Program Compound, Derivative Compound or Drug Product sold to
Third Parties (other than sales to sublicensees for resale) in bona fide,
arm’s-length transactions, less the following deductions, determined in
accordance with Novartis’ standard accounting methods as generally and
consistently applied by Novartis, to the extent included in the gross invoiced
sales price of any Optioned Lead Program Compound, Derivative Compound or Drug
Product or otherwise directly paid or incurred by Novartis, its Affiliates or
sublicensees with respect to the sale of such Optioned Lead Program Compound,
Derivative Compound or Drug Product:

(a) Normal and customary trade and quantity discounts actually allowed and
properly taken directly with respect to sales of the Optioned Lead Program
Compound, Derivative Compound or Drug Product;

(b) Amounts repaid or credited by reason of defects, rejection, recalls,
returns, rebates and allowances of goods, or because of retroactive price
reductions specifically identifiable to such Optioned Lead Program Compound,
Derivative Compound or Drug Product;

 

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(c) Chargebacks and other amounts paid on the sale or dispensing of such
Optioned Lead Program Compound, Derivative Compound or Drug Product;

(d) Amounts payable resulting from governmental (or agency thereof) mandated
rebate programs;

(e) Third Party cash rebates and chargebacks related to sales of the Optioned
Lead Program Compound, Derivative Compound or finished Drug Product, to the
extent actually allowed;

(f) Tariffs, duties, excise, sales, value-added, and other taxes (other than
taxes based on income);

(g) Retroactive price reductions that are actually allowed or granted;

(h) Cash discounts for timely payment;

(i) Delayed ship order credits;

(j) Discounts pursuant to indigent patient programs and patient discount
programs, including, without limitation, “Together Rx” and coupon discounts;

(k) All freight, postage and insurance included in the invoice price; and

(l) Amounts repaid or credited for uncollectible amounts on previously sold
Optioned Lead Program Compounds, Derivative Compounds or Drug Products;

(m) Deduction of [**] percent ([**]%) for distribution and warehousing expenses;
and

 

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(n) Any other specifically identifiable amounts included in the gross invoice of
the Optioned Lead Program Compound, Derivative Compound or Drug Product that
should be credited for reasons substantially equivalent to those listed above

all as determined in accordance with Novartis’ usual and customary accounting
methods, as consistently applied at Novartis. Sales from Novartis to its
Affiliates and sublicensees for resale shall be disregarded for the purpose of
calculating Net Sales. Any of the items set forth above that would otherwise be
deducted from the invoice price in the calculation of Net Sales but which are
separately charged to Third Parties shall not be deducted from the invoice price
in the calculation of Net Sales. In the case of any sale for consideration other
than cash, such as barter or countertrade, Net Sales shall be calculated on the
fair market value of the consideration received as agreed by the Parties.

Furthermore:

(i) In the case of any sale or other disposal of an Optioned Lead Program
Compound, Derivative Compound or Drug Product between or among Novartis and its
Affiliates, and sublicensees for resale, Net Sales shall be calculated as above
only on the value charged or invoiced on the first arm’s-length sale thereafter
to a Third Party;

(ii) In the case of any sale which is not invoiced or is delivered before
invoice, Net Sales shall be calculated at the time of shipment or when the
Optioned Lead Program Compound, Derivative Compound or Drug Product is paid for,
if paid for before shipment or invoice;

(iii) In the case of any sale or other disposal for value, such as barter or
countertrade, of any Optioned Lead Program Compound, Derivative Compound or Drug
Product, or part thereof, otherwise than in an arm’s-length transaction
exclusively for money, Net Sales shall be calculated as above on the value of
the non-cash consideration received or the fair market price (if higher) of the
Optioned Lead Program Compound, Derivative Compound or Drug Product in the
country of sale or disposal; and

 

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(iv) In the event that the Drug Product is sold in a finished dosage form
containing the Optioned Lead Program Compound or Derivative Compound in
combination with one or more other active ingredients (a “Combination Product”),
the Net Sales of the Drug Product, for the purpose of determining royalty
payments, shall be determined by multiplying the Net Sales (as defined above in
this Section) of the Combination Product by the fraction A/(A+B), where A is the
weighted (by sales volume) average sales price in a particular country of the
Drug Product when sold separately in finished form and B is the weighted average
sales price in that country of the other product(s) sold separately in finished
form. In the event that such average sales price cannot be determined for both
the Drug Product and the other product(s) in combination, Net Sales for purposes
of determining royalty payments shall be agreed by the Parties based on the
relative value contributed by each component, and such agreement shall not be
unreasonably withheld.

1.26. “Option” shall have the meaning set forth in Section 3.3.1 of the
Collaboration Agreement.

1.27. “Optioned Lead Program” shall mean a Lead Program as to which Novartis has
exercised its Option.

1.28. “Optioned Lead Program Compound” shall mean any Library Compounds,
together with all Derivative Compounds (and together with any and all compounds
having the same Active Moiety as such Library Compounds or Derivative Compounds)
identified at the time the Option is exercised as being within a particular
Optioned Lead Program.

1.29. “Patents” shall mean all existing patents and patent applications and all
patent applications hereafter filed, including any continuation,
continuation-in-part, division, provisional or any substitute applications, any
patent issued with respect to any such patent applications, any reissue,
reexamination, renewal or extension (including any supplementary protection
certificate) of any such patent, and any confirmation patent or registration
patent or patent of addition based on any such patent, and all foreign
counterparts of any of the foregoing.

 

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1.30. “Person” shall mean, any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization or
government or political subdivision thereof.

1.31. “Phase III Clinical Trial” shall mean human clinical trials, the principal
purpose of which is to establish safety and efficacy of one or more particular
doses in patients being studied, and which will (or are intended to) satisfy the
requirements of a pivotal trial for purposes of preparing and submitting a
filing for Regulatory Approval in a particular country.

1.32. “Registration Filing” shall mean, with respect to each Optioned Lead
Program Compound, Derivative Compound or related Drug Product, the submission to
the relevant governmental regulatory authority of an appropriate application
seeking any Regulatory Approval, and shall include, without limitation, any
marketing authorization application, supplementary application or variation
thereof, or any equivalent applications.

1.33. “Regulatory Approval” shall mean all authorizations by the appropriate
governmental entity or entities necessary for commercial sale of a Drug Product
in a particular country including, without limitation and where applicable,
approval of labeling, price, reimbursement and manufacturing.

1.34. “Third Party” shall mean any Person that is not a Party or an Affiliate of
any Party.

ARTICLE II

Rights and Licenses

2.1. Novartis Rights. Subject to the other provisions of this License Agreement,
Infinity grants to Novartis and its Affiliates a worldwide, royalty-bearing
license, exclusive even as to Infinity (with the right to sublicense) under the
Licensed Intellectual Property (including, without limitation, Infinity’s
interest in the Collaboration Intellectual

 

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Property), to research and have researched, develop and have developed, make and
have made, manufacture and have manufactured, use and have used, market and have
marketed, distribute and have distributed, sell and have sold, export and import
for sale, and have exported or imported for sale, the Optioned Lead Program,
Optioned Lead Program Compounds or Licensed Drug Product in the Field. To the
extent that Novartis or its Affiliates desires to receive a license from
Infinity under relevant Intellectual Property in order to research and have
researched, develop and have developed, make and have made, manufacture and have
manufactured, use and have used, market and have marketed, distribute and have
distributed, sell and have sold, export and import for sale, and have exported
or imported for sale any Other Drug Product, then Novartis shall provide
Infinity with written notice of the same, and the Parties shall discuss, in good
faith, whether and under what terms such a license would be granted. For the
avoidance of doubt, the licenses granted to Novartis in this Section 2.1 shall
be effective with respect to any other lead program that Novartis may pursue
using the Optioned Lead Program, Optioned Lead Program Compounds or Licensed
Drug Product. Infinity shall not develop, make, have made, use, market and sell,
itself or through a Third Party licensee, for use within the Field, any other
Lead Program involving the Optioned Lead Program Compounds and/or Licensed Drug
Product.

2.2. Immunity from Suit. In the event that the exercise by Novartis and/or its
Affiliates or sublicensees of the licenses and rights granted pursuant to this
License Agreement would infringe during the term of this License Agreement a
claim of an issued Patent Controlled by Infinity, and which Patent is not
covered by the grant in Section 2.1, Infinity hereby grants to Novartis and its
Affiliates or sublicensees a worldwide, non-exclusive, sublicensable,
royalty-free license and immunity from suit by Infinity and its Affiliates under
such issued Patent for Novartis, its Affiliates and or sublicensees to discover,
research, develop, make, use, import, export, distribute, market, promote, offer
for sale, and sell the Optioned Lead Program Compounds and the Licensed Drug
Products in the Field.

2.3. Technology Necessary to the License. If Infinity or any of its Affiliates
conceives and reduces to practice during the term of this License Agreement any
new Intellectual Property relating to an Optioned Lead Program or Licensed Drug
Product and such new Intellectual Property is necessary to Novartis’ exercise of
its licensed rights, then Infinity hereby

 

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grants to Novartis and its Affiliates and sublicensees a worldwide,
non-exclusive, sublicensable, royalty-free license under such new Intellectual
Property to discover and have discovered, research and have researched, develop
and have developed, make and have made, use and have used, import and have
imported, export and have exported, distribute and have distributed, market and
have marketed, promote and have promoted, offer for sale and have offered for
sale, sell and have sold the Optioned Lead Program Compounds or the Licensed
Drug Products in the Field.

ARTICLE III

Development and Commercialization

3.1. Development and Commercialization Rights. Novartis, its Affiliates and
sublicensees shall have sole and worldwide rights, even as to Infinity, to
develop, commercialize, manufacture, promote, sell, and distribute each Optioned
Lead Program, Optioned Lead Program Compound or Licensed Drug Product in the
Field. The foregoing right to manufacture is subject to any applicable United
States statutory requirement that technology, the development of which was
funded in part by the United States government, must be manufactured
domestically, unless the United States government shall waive such requirement.
As between Novartis and Infinity, Novartis, its Affiliates and sublicensees, in
their sole discretion, shall select, file, and own all rights to any and all
trademarks and trade dress relating to the Drug Product which trademarks are not
then trademarks of Infinity.

3.2. Information Transfer. The Parties agree and acknowledge that Infinity has
delivered to Novartis the information pursuant to Sections 2.2.4 and 3.3.3 of
the Collaboration Agreement. From time to time during the term of this License
Agreement, the Parties shall discuss any other information Controlled by
Infinity that is necessary or useful for further development, manufacture and
commercial exploitation and distribution of an Optioned Lead Program, Optioned
Lead Program Compounds or Licensed Drug Product and Infinity shall promptly
thereafter deliver such information to Novartis. This information shall also
include copies of all Patents filed by Infinity pursuant to Section 2.3.2(h) of
the Collaboration Agreement.

 

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3.3. Regulatory Approvals. Novartis, its Affiliates and sublicensees will be
responsible for all required Regulatory Approvals. All filings will be made by
Novartis, its Affiliates or sublicensees. All Regulatory Approvals will be held
in the name of Novartis, its Affiliates or sublicensees. Novartis, its
Affiliates or sublicensees shall have the right to cross-reference information
and regulatory filings arising out of development work which previously has been
conducted by Infinity and its Affiliates with respect to the Optioned Lead
Program and Optioned Lead Program Compounds, for the purpose of regulatory
filings hereunder.

ARTICLE IV

Milestone and Royalty Payments

4.1. Milestone Payments.

(a) Novartis shall make milestone payments in accordance with this Section 4.1
with respect to each Optioned Lead Program. Milestone payments shall be payable
only once with respect to a particular Optioned Lead Program, even though the
Optioned Lead Program, Optioned Lead Program Compound, Derivative Compound or
Drug Product may be subsequently developed for indications other than those for
which Regulatory Approval was initially sought. In the event that an Optioned
Lead Program Compound, Derivative Compound or Drug Product fails in development,
any milestone payments previously paid with respect to such Optioned Lead
Program Compound, Derivative Compound or Drug Product shall be fully creditable
toward the same milestone due with respect to another Optioned Lead Program
Compound, Derivative Compound or Drug Product included within the same Optioned
Lead Program. Novartis may deduct from any milestone payments otherwise due to
Infinity under this Article IV the amount of any withholding and similar taxes
required under applicable law to be withheld from such payments and paid to
applicable tax authorities and shall furnish Infinity with proof of payment of
such taxes as soon as practicable after such payment is made.

 

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(b) The following milestone payments shall be payable within [**] days following
delivery of an invoice by Infinity to Novartis with respect to the relevant
event.

 

MILESTONE

   PAYMENT

[**]

   $[**]

[**]

   $[**]

[**]

   $[**]

[**]

   $[**]

[**]

   $[**]

4.2. Royalty Payments. Novartis shall make the following royalty payments to
Infinity on total annual Net Sales of each Drug Product incorporating an
Optioned Lead Program Compound or Derivative Compound, for which there is a Live
Claim covering such Optioned Lead Program, or the related Optioned Lead Program
Compounds, Derivative Compounds or Drug Products, or their uses or manufacture
thereof on a country-by-country and Drug Product-by-Drug Product basis. The
royalties shall be paid in full by Novartis within [**] days following delivery
of an invoice by Infinity with respect to such royalties.

 

TOTAL WORLDWIDE ANNUAL NET SALES

   ROYALTY
AMOUNT

On Net Sales less than or equal to $[**]

   [**]%

On the increment of Net Sales greater than $[**]

   [**]%

4.3. Reduced Milestone and Royalty Obligations. The obligation of Novartis, its
Affiliates and sublicensees to pay milestones and royalties to Infinity under
this License Agreement shall be reduced upon the occurrence of the following
events:

 

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(a) In the event of Infinity’s material breach of this License Agreement, which
shall remain uncured [**] days after written notice by Novartis to Infinity of
the same, the rights of Novartis, its Affiliates and sublicensees under this
License Agreement shall remain unaffected but its milestone and royalty payment
obligations shall be reduced by [**] percent ([**]%).

(b) In the event of Infinity’s material breach of the Collaboration Agreement
which shall remain uncured [**] days after written notice by Novartis to
Infinity of the same, or if Infinity does not deliver [**] Actual Compounds to
Novartis prior to the [**] anniversary of the Effective Date (as defined in the
Collaboration Agreement), then the rights of Novartis, its Affiliates and
sublicensees under this License Agreement shall remain unaffected but its
milestone and royalty payment obligations shall be reduced by [**] percent
([**]%).

(c) In the event that Novartis, its Affiliates or sublicensees is required to
pay Third Party royalties, milestones or license fees in order to avoid
infringement of Third Parties’ intellectual property rights covering the
composition of matter of the Optioned Lead Program, Optioned Lead Program
Compound or Licensed Drug Product, Novartis’ obligation to pay royalties to
Infinity shall be reduced dollar for dollar on par with the amounts actually
paid by Novartis or its Affiliate to such Third Party; provided, however, that
in no event shall the amount paid to Infinity be less than [**] percent ([**]%)
of the amount otherwise payable to Infinity pursuant to Section 4.2.

ARTICLE V

Reporting Obligations

During the term of this License Agreement, Novartis shall deliver to Infinity a
written notice of the occurrence of each of the events described in
Section 4.1(b) with respect to each Optioned Lead Program within [**] days after
such occurrence. During the term of this License Agreement, but only after the
First Commercial Sale of a Drug Product, Novartis shall deliver to

 

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Infinity within [**] days after the end of each calendar quarter a written
report showing actual Net Sales of such Drug Product by Novartis, its Affiliates
and sublicensees in each country during such calendar quarter. All Net Sales
shall be stated in United States dollars, and Novartis shall convert the amounts
into United States dollars from the currency in which such amounts are received
by Novartis, its Affiliates and sublicensees using Novartis’ then-current
standard exchange rate methodology applied in its external reporting for the
translation of foreign currency sales into United States dollars. Novartis will
keep complete, true and accurate books of account and records for the purpose of
showing the derivation of Net Sales and all amounts payable to Infinity under
this License Agreement. Novartis, its Affiliates or sublicensees will keep such
books and records for at least three (3) years following the end of the calendar
quarter to which they pertain. Infinity shall have the right for a period of
three (3) years after receiving any report or statement with respect to
royalties due and payable to appoint an internationally-recognized independent
accounting firm reasonably acceptable to Novartis (the “Auditor”) to inspect the
relevant records of Novartis, its Affiliates or sublicensees to verify such
reports, statements, records or books of accounts, as applicable. Before
beginning its audit, the Auditor shall execute an undertaking reasonably
acceptable to Novartis by which the Auditor shall keep confidential all
information reviewed during such audit; although the Auditor shall have the
right to disclose to Infinity its conclusions regarding any payments owed to
Infinity. Novartis, its Affiliates and/or sublicensees shall make its records
available for inspection by the Auditor during regular business hours at such
place or places where such records are customarily kept, upon reasonable notice
from Infinity, solely to verify the accuracy of the sales reports, payments
records or books of accounts and the compliance by Novartis, its Affiliates
and/or sublicensees in other respects with this License Agreement. Such
inspection right shall not be exercised more than once in any calendar year not
nor more frequently than once with respect to records covering any specific
period of time. Infinity agrees to hold in strict confidence all information
received and all information learned in the course of any audit or inspection,
except to the extent necessary in order to enforce its rights under this License
Agreement or if disclosure is required by law, regulation or judicial order.
Infinity shall pay for such inspections, as well as its own attorneys’ fees
associated with enforcing its rights with respect to any payments hereunder,
except that in the event there is any upward adjustment in aggregate amounts
payable for any

 

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year shown by such inspection of more than five percent (5%) of the amount paid,
Novartis shall pay for such inspection and shall pay to Infinity the amount of
any underpayment, along with interest thereon at a rate per annum equal to the
lesser of [**], as reported by The Wall Street Journal, [**], or the highest
rate permitted by applicable law, calculated on the number of days such payments
are paid after the date such payments were originally due.

ARTICLE VI

Confidentiality

6.1. Undertaking. During the term of this License Agreement, each Party (the
“Receiving Party”) shall keep confidential, and other than as provided herein
shall not use or disclose, directly or indirectly, any trade secrets,
confidential or proprietary information, or any other knowledge, information,
documents or materials, disclosed to the Receiving Party by the other Party (the
“Proprietary Party”), whether in tangible or intangible form, the
confidentiality of which such Proprietary Party takes reasonable measures to
protect, including but not limited to Collaboration Intellectual Property.

(a) The Receiving Party shall take any and all lawful, reasonable measures to
prevent the unauthorized use and disclosure of such information, and to prevent
unauthorized Persons from obtaining or using such information. With the prior
written consent of the Proprietary Party, the Receiving Party may, however, use
and disclose such information to exercise its rights to file, prosecute and
maintain Patents within the Collaboration Intellectual Property as permitted by
the Collaboration Agreement.

(b) The Receiving Party further agrees to refrain from directly or indirectly
taking any action that would constitute or facilitate the unauthorized use or
disclosure of such information. The Receiving Party may disclose such
information to its Affiliates, officers, employees and agents, to authorized
licensees and sublicensees, and to subcontractors in connection with the
Receiving Party’s obligations hereunder, to the extent necessary to enable such
Persons to perform their

 

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obligations hereunder or under the Collaboration Agreement or under the
applicable license, sublicense or subcontract, as the case may be; provided,
that such Affiliates, officers, employees, agents, licensees, sublicensees and
subcontractors have entered into appropriate confidentiality agreements for
secrecy and non-use of such information which by their terms shall be
enforceable by injunctive relief. In the event any such Persons violate such
agreements with respect to such information, the Receiving Party shall enforce
such agreements.

(c) The Receiving Party shall be liable for any unauthorized use and disclosure
of such information by its Affiliates, officers, employees and agents and any
such sublicensees and subcontractors.

6.2. Exceptions. Notwithstanding the foregoing, the provisions of Section 6.1
shall not apply to knowledge, information, documents or materials that the
Receiving Party can conclusively establish:

(a) were generally available to the public at the time of disclosure or become
generally available to the public without the Receiving Party’s breach of any
obligation owed to the Proprietary Party;

(b) are permitted to be disclosed under the prior written consent of the
Proprietary Party;

(c) were known by the Receiving Party at the time of disclosure, or have become
known to the Receiving Party from a source other than the Proprietary Party,
other than by breach of an obligation of confidentiality owed to the Proprietary
Party;

(d) are disclosed by the Proprietary Party to a Third Party without restrictions
on its disclosure;

(e) are independently developed by the Receiving Party without breach of this
License Agreement or any other confidentiality agreement between the Parties or
between a Party and an Affiliate of the other Party, without reference to or
reliance upon knowledge, information, or materials of the Proprietary Party; or

 

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(f) are required to be disclosed by the Receiving Party to comply with
applicable laws or regulations, to submit Registration Filings, to defend or
prosecute litigation or Patents, or to comply with governmental regulations,
provided that the Receiving Party provides prior written notice of such
disclosure to the Proprietary Party and takes reasonable and lawful actions to
avoid or minimize the degree of such disclosure.

6.3. Publicity. Except with respect to the initial press release described in
Section 4.3 of the Collaboration Agreement, the Parties will agree upon the
timing and content of any other press releases or other public communications
relating to the License Agreement and the transactions contemplated herein will
be determined jointly by Infinity and Novartis.

Except to the extent already disclosed in that initial press release or other
public communication, no public announcement concerning the existence or the
terms of this License Agreement or concerning the transactions described herein
shall be made, either directly or indirectly, by Infinity or Novartis, except as
may be legally required by applicable laws, regulations, or judicial order,
without first obtaining the approval of the other Party and agreement upon the
nature, text, and timing of such announcement.

The Party desiring to make any such public announcement shall provide the other
Party with a written copy of the proposed announcement in sufficient time prior
to public release to allow such other Party to comment upon such announcement,
prior to public release.

Notwithstanding the foregoing, either Party may disclose: (a) to bona fide
potential or actual licensees or sublicensees only those terms of this License
Agreement that are reasonably necessary to disclose in connection with a license
or sublicense as permitted this License Agreement; and (b) to bona fide
potential or actual investors, lenders, investment bankers, acquirors, acquirees
or merger partners, and to such Party’s consultants and advisors, only those
terms of this License Agreement that are reasonably necessary in connection with
a proposed equity or debt financing, proposed acquisition or business
combination of such Party.

 

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6.4. Survival. The provisions of this Article VI shall survive for five (5)
years after the termination or expiration of this License Agreement.

6.5. Equitable Relief. The Receiving Party agrees that any breach of this
Article VI may cause the Proprietary Party substantial and irreparable injury
and, therefore, in the event of any such breach, in addition to other remedies
that may be available, the Proprietary Party shall have the right to specific
performance and other injunctive and equitable relief.

ARTICLE VII

Patents

7.1. Inventions. All inventions conceived of and reduced to practice during the
term of and as a result of, this License Agreement, jointly by employees or
agents of Infinity or its Affiliates, on one hand, and employees or agents of
Novartis or its Affiliates, on the other hand and all Patents claiming the same,
shall be owned by Novartis.

7.2. Preparation. Subsequent to the date on which Novartis exercises its Option
with respect to a particular Optioned Lead Program, Novartis or its Affiliates
shall take responsibility and pay for the preparation, filing, prosecution and
maintenance of any and all Patents covering such Optioned Lead Program, Optioned
Lead Program Compound or Licensed Drug Product, and for any uses, formulations,
manufacture and other process inventions with respect thereto made by or on
behalf of Novartis or its Affiliates. If Infinity was authorized to file a
Patent pursuant to Section 2.3.2(h) of the Collaboration Agreement with respect
to an Optioned Lead Program, Infinity shall assign, and shall cause its
Affiliates, employees and/or consultants to assign, such Patent to Novartis.
Upon reasonable request, Infinity shall furnish to Novartis copies of
significant documents relevant to any such preparation, filing, prosecution or
maintenance of Patents covered by this Section 7.2, and shall cooperate fully in
the preparation, filing, prosecution and maintenance of the same, executing all
papers and instruments so as to enable Novartis to apply for, file, prosecute
and maintain such Patents in its name in any country. The Parties acknowledge
the importance of maintaining the confidentiality of any inventions or other
information relating to potential Patent claims prior to the filing of
applications with respect thereto.

 

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7.3. Infringement. Each Party shall notify the other promptly of any possible
infringements, imitations or unauthorized possession, knowledge or use of the
Intellectual Property embodied in any of the Optioned Lead Programs,
Collaboration Intellectual Property, or Licensed Intellectual Property related
to the manufacture or use of the Optioned Lead Program, Optioned Lead Program
Compounds or Licensed Drug Product by Third Parties in any country, of which
such Party becomes aware. Each Party shall promptly furnish the other Party with
full details of such infringements, imitations or unauthorized possession,
knowledge or use, and shall assist the Controlling Party in preventing any
recurrence thereof; provided, that Novartis or its Affiliates shall be initially
responsible, at its expense, for bringing any action on account of any such
infringements with respect to the Patents described in Section 7.2 exclusively
licensed to Novartis hereunder, and Infinity shall cooperate with Novartis, its
Affiliates and sublicensees, as Novartis may reasonably request, in connection
with any such action. Damages recovered in any such actions shall be apportioned
in accordance with the royalty schedules contained in this License Agreement,
after reimbursement to each Party of their respective expenses in prosecuting
such actions as provided hereunder.

ARTICLE VIII

Term and Termination

8.1. Term. The term of this License Agreement with respect to any Optioned Lead
Program, and the related Optioned Lead Program Compounds, Derivative Compounds
and Drug Products, shall extend in each country for the longer of (a) ten (10)
years after Novartis has exercised the Option with respect to the relevant
Optioned Lead Program, or (b) the expiration of the last to expire of the
Licensed Patents or Compound Patents in that country having a Live Claim
covering such Optioned Lead Program, or the related Optioned Lead Program
Compounds, Derivative Compounds or Drug Products, or their uses or manufacture
thereof. In the case of member countries of the European Union, the term of the
License Agreement shall extend in each country for the longer of (a) ten (10)
years after Novartis has exercised the Option

 

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with respect to the relevant Optioned Lead Program, or (b) the later of: (i) the
expiration the last to expire of the Licensed Patents or Compound Patents in
that country having a Live Claim covering such Optioned Lead Program, or the
related Optioned Lead Program Compounds, Derivative Compounds or Drug Products,
or the uses or manufacture thereof; or (ii) ten (10) years from the date of
First Commercial Sale of the Optioned Lead Program Compounds, Derivative
Compounds or Drug Products with respect to such Optioned Lead Program in that
country. With respect to licenses of non-Patented Intellectual Property included
in Infinity Background Intellectual Property, Licensed Technology or in
Collaboration Intellectual Property, such licenses shall be perpetual and
fully-paid with respect to such Optioned Lead Program, and the related Optioned
Lead Program Compounds and Licensed Drug Products.

8.2. Material Breach by Novartis. Upon any material breach of the provisions of
this License Agreement or of the Collaboration Agreement by Novartis, which
material breach remains uncured by Novartis, its Affiliates or sublicensees one
hundred eighty (180) days after receipt of written notice of the same from
Infinity: (a) the licenses and rights granted to Novartis and/or its Affiliates
or sublicensees hereunder shall terminate; and (b) Novartis shall exclusively
license, and shall cause its Affiliates and sublicensees to exclusively license,
to Infinity any Patents assigned to Novartis pursuant to Section 7.2 and any
Patents filed by Novartis or its Affiliates covering the Optioned Lead Program
Compounds in order to research and have researched, develop and have developed,
make and have made, manufacture and have manufactured, use and have used, market
and have marketed, distribute and have distributed, sell and have sold, export
and import for sale, and have exported or imported for sale the Optioned Lead
Program Compounds and the drug products prepared from bulk Optioned Lead Program
Compounds (but not other Derivative Compounds); and (c) Novartis shall use
commercially reasonable efforts to prosecute, maintain and enforce such Patents
which specifically cover the Optioned Lead Program Compounds, such drug products
prepared from bulk Optioned Lead Program Compounds (but not other Derivative
Compounds), or the uses of foregoing; provided, however, that if Novartis
declines to prosecute, maintain or enforce any such Patent, it shall give
Infinity reasonable notice to this effect and thereafter Infinity may, upon
written notice to Novartis, prosecute, maintain or enforce, as applicable, such
Patents in Novartis’ name and Novartis shall reasonably cooperate in such
prosecution, maintenance or enforcement.

 

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8.3. Termination. Either Party may terminate this License Agreement immediately
upon the bankruptcy or financial insolvency of the other Party. Novartis may
terminate this License Agreement without cause at any time and the provisions of
Section 8.2 shall apply.

8.4. Effect of Termination. Termination of this License Agreement for any
reason, or expiration of this License Agreement, will not affect:
(a) obligations, including the payment of any milestones or royalties, which
have accrued as of the date of termination or expiration; and (b) rights and
obligations under the following provisions of this License Agreement, which
shall survive termination or expiration of this License Agreement: Articles V,
VI and IX, Sections 8.2(a) through (c) (as provided in Sections 8.2 or 8.3), and
Section 8.4. Following expiration of this License Agreement under Section 8.1
with respect to a particular country, the licenses granted by Infinity to
Novartis hereunder under the Infinity Background Intellectual Property, Licensed
Patents and under Infinity’s interest in the Collaboration Intellectual Property
shall be fully-paid in that country.

ARTICLE IX

Miscellaneous Provisions

9.1. Invoice Requirement. Any amounts payable to Infinity hereunder shall be
made within sixty (60) days after receipt by Novartis, or its nominee designated
for that purpose in advance by Novartis in writing to Infinity, of an invoice
covering such payment.

9.2. Governing Law, and Jurisdiction. This License Agreement shall be governed
and construed in accordance with the internal laws of the State of Delaware.
Both Parties agree to submit to personal jurisdiction in the State of Delaware
and to accept and agree to venue in that State.

9.3. Adverse Events. During the term of this License Agreement, the Parties
shall keep each other promptly and fully informed and Novartis will promptly
notify appropriate

 

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authorities in accordance with applicable law, after receipt of information with
respect to any serious adverse event (as defined by the ICH Harmonized
Tripartite Guideline on Clinical Safety Data Management), directly or indirectly
attributable to the use or application of any Optioned Lead Program, Optioned
Lead Program Compound, Derivative Compound or Drug Product.

9.4. Third Party Actions; Disclaimer of Warranties.

(a) To Infinity’s actual knowledge, as of the date Novartis exercises the Option
with respect to any Optioned Lead Program, the exercise of the rights by
Novartis hereunder with respect to such Optioned Lead Program will not result in
the infringement of then-valid issued Patents of Third Parties. Nevertheless,
each Party will promptly notify the other in the event any relevant Third Party
Patents come to its notice. Notwithstanding the foregoing, neither Party gives a
representation or warranty to the other regarding the non-infringement of Third
Party rights by the development, manufacture, use or sale of the Optioned Lead
Programs, Optioned Lead Program Compounds, Derivative Compounds or Drug
Products, and gives no indemnity against costs, damages, expenses or other
losses arising out of proceedings brought against the other Party or any other
Person by any Third Party. In the event Novartis, its Affiliates or sublicensees
are sued for infringement of any rights of any Third Party in the course of its
development, manufacture, marketing and sale of an Optioned Lead Program
Compound, Derivative Compounds or Drug Product or its use of Infinity Background
Intellectual Property in connection therewith, Infinity shall extend to
Novartis, its Affiliates and sublicensees, at no charge, good faith assistance
and support in defending such action, and may participate in the conduct of the
suit at its own expense. Legal expenses and fees arising from such a legal
action shall be paid by Novartis, its Affiliates or sublicensees.

(b) EXCEPT AS EXPRESSLY PROVIDED IN SECTION 9.16, EACH PARTY EXPRESSLY DISCLAIMS
ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

 

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9.5. Waiver. No provision of this License Agreement may be waived except in
writing by both Parties. No failure or delay by either Party in exercising any
right or remedy hereunder or under applicable law will operate as a waiver
thereof, or a waiver of any right or remedy on any subsequent occasion.

9.6. Force Majeure. Neither Party will be in breach hereof by reason of its
delay in the performance of or failure to perform any of its obligations
hereunder, if that delay or failure is caused by strikes, acts of God or the
public enemy, riots, war, terrorism, incendiaries, interference by civil or
military authorities, compliance with governmental priorities for materials, or
any fault beyond its control or without its fault or negligence.

9.7. Severability. Should one or more provision of this License Agreement be or
become invalid, then the Parties shall attempt in good faith to agree upon valid
provisions in substitution for the invalid provisions, which in their economic
effect come so close to the invalid provisions that it can be reasonably assumed
that the Parties would have accepted this License Agreement with those new
provisions. If the Parties are unable to agree on such valid provisions, the
invalidity of such one or more provisions of this License Agreement shall
nevertheless not affect the validity of the License Agreement as a whole, unless
the invalid provisions are of such essential importance for this License
Agreement that it may be reasonably presumed that the Parties would not have
entered into this License Agreement without the invalid provisions.

9.8. Government Acts. In the event that any act, regulation, directive, or law
of a country or its government, including its departments, agencies or courts,
should make impossible or prohibit, restrain, modify or limit any material act
or obligation of the Parties under this License Agreement, the Party, if any,
not so affected, shall have the right, at its option, to suspend or terminate
this License Agreement as to such country, if good faith negotiations between
the Parties to make such modifications herein as may be necessary to fairly
address the impact thereof, are not successful after a reasonable period of time
in producing mutually acceptable modifications to this License Agreement.

 

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9.9. Government Approvals. Each Party will obtain any government approval
required in its country of domicile to enable this License Agreement to become
effective, or to enable any payment hereunder to be made, or any other
obligation hereunder to be observed or performed. Each Party shall keep the
other informed of progress in obtaining any such government approval, and will
cooperate with the other Party in any such efforts.

9.10. Export Controls. This License Agreement is made subject to any
restrictions concerning the export of Optioned Lead Program Compounds,
Derivative Compounds, Drug Products, Infinity Background Intellectual Property,
Licensed Intellectual Property or Collaboration Intellectual Property from the
United States that may be imposed upon or related to either Party from time to
time by the Government of the United States. Furthermore, each Party agrees that
it will not export, directly or indirectly, any Infinity Background Intellectual
Property, Licensed Intellectual Property, Collaboration Intellectual Property
acquired from the other Party under this License Agreement or any Optioned Lead
Program Compounds, Derivative Compounds or Drug Products utilizing the same to
any countries for which the United States government or any agency thereof at
the time of export requires an export license or other governmental approval,
without first obtaining the written consent to do so (of which Novartis will
promptly inform Infinity) from the Department of Commerce or other agency of the
United States government when required by applicable statute or regulation.

9.11. Assignment. This License Agreement may not be assigned or otherwise
transferred by either Party without the prior written consent of the other
Party; provided, however, that either Party may assign this License Agreement,
without consent of the other Party: (a) to any of its Affiliates, if the
assigning Party guarantees to full performance of its Affiliates’ obligations
hereunder; or (b) in connection with the transfer or sale of all or
substantially all of its assets or business, or a controlling equity interest,
or in the event of its merger or consolidation with another company. Any
purported assignment in contravention of

 

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this Section 9.11 shall, at the option of the nonassigning Party, be null and
void and of no effect. No assignment shall release either Party from
responsibility for the performance of any accrued obligation of such Party
hereunder. This License Agreement shall be binding upon and enforceable against
the successor to or any permitted assignees of either of the Parties.

9.12. Counterparts. This License Agreement may be executed in counterparts, each
of which shall be deemed to be original and both of which shall constitute one
and the same License Agreement.

9.13. No Agency. Nothing in this License Agreement shall be deemed to create an
agency, joint venture, amalgamation, partnership or similar relationship between
Infinity and Novartis and their respective Affiliates. Notwithstanding any of
the provisions of this License Agreement, neither Party shall at any time enter
into, incur, or hold itself out to Third Parties as having authority to enter
into or incur, on behalf of the other Party, any commitment, expense, or
liability whatsoever, and all contracts, expenses and liabilities in connection
with or relating to the obligations of each Party under this License Agreement
shall be made, paid, and undertaken exclusively by such Party on its own behalf
and not as an agent or representative of the other.

9.14. Notice. All communications between the Parties with respect to any of the
provisions of this License Agreement will be sent to the addresses set out below
or to such other addresses as may be designated by one Party to the other by
notice pursuant hereto, by prepaid certified mail (which shall be deemed
received by the other Party on the seventh business day following deposit in the
mails), or by facsimile transmission (which shall be deemed received when
transmitted), with confirmation by first class letter, postage pre-paid, given
by the close of business on or before the next following business day:

if to Novartis, at:

Novartis International Pharmaceutical Ltd.

Hurst Holme

12 Trott Road

P.O. Box 2899

Hamilton, HM LX

Bermuda

Attention: Emil Bock

Fax: (441) 296-5083

 

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with a copy to:

Novartis Institutes for BioMedical Research, Inc.

400 Technology Square

Cambridge, Massachusetts 02139

Attention: Robert L. Thompson, Vice President and General Counsel

Fax: (617) 871-3354

if to Infinity, at:

Infinity Pharmaceuticals, Inc.

780 Memorial Drive

Cambridge, Massachusetts 02139

Attention: Adelene Perkins

Fax: (617) 453-1001

with a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention: Steven D. Singer, Esq.

Fax: (617) 526-5000

9.15. Headings. The paragraph headings are for convenience only and will not be
deemed to affect in any way the language of the provisions to which they refer.

9.16. Authority. The undersigned represent that they are authorized to sign this
License Agreement on behalf of the Parties. The Parties each represent that no
provision of this License Agreement will violate any other agreement that a
Party may have with any other Person. Each Party has relied on that
representation in entering into this License Agreement.

9.17. Entire Agreement. This License Agreement and its schedules contain the
entire understanding of the Parties relating to the matters referred to herein,
and may only be amended by a written document, duly executed on behalf of the
respective Parties.

 

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9.18. No Consequential Damages. NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR MULTIPLE DAMAGES ARISING OUT
OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING, WITHOUT
LIMITATION, LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS LICENSE
AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.

9.19. Affiliates and Subcontractors. Each Party may perform its obligations
hereunder personally or through one or more Affiliates or subcontractors,
although each Party shall nonetheless be solely responsible for the performance
of its Affiliates and subcontractors. Neither Party shall permit any of its
Affiliates or subcontractors to commit any act (including any act of omission)
that such Party is prohibited hereunder from committing directly. The use of
subcontractors by either Party shall not increase the financial obligations of
the other Party hereunder in any respect.

[Signature page follows]

 

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INFINITY PHARMACEUTICALS, INC. By:  

 

Title:  

 

Date of Signature:  

 

NOVARTIS INTERNATIONAL PHARMACEUTICAL LTD. By:  

 

Title:  

 

Date of Signature:  

 

By:  

 

Title:  

 

Date of Signature:  

 

 

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Schedule A

Licensed Patents

[to be provided]

 

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License, Development and Commercialization Agreement – Confidential

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EXHIBIT B

SCAFFOLD EXAMPLES

The scheme below serves as an example of what would and would not be included as
part a single Scaffold, as defined in Sections 1.36. The scheme describes the
synthesis of a Scaffold which would include the structures 4b-d and 5b-d. 4b-d
and 5b-d are rigid, densely functionalized compounds that can undergo further
reactions to introduce a variety of functional groups around the [**] structure.
The [**] groups can serve as substrates for [**] cross-coupling reactions. The
[**] can react with [**] while simultaneously unmasking [**] for subsequent
reactions. All of these modifications to the Scaffold would be considered as
part of the same Scaffold.

Additionally, it is conceivable that many other [**] could have been employed to
create the [**] precursor to the [**] embedded in the [**] scaffold and those
which are accessible via a reasonable synthetic pathway would also be considered
part of the same Scaffold.

In this example, replacement of the designated [**] precursor to the [**] with
another would create a different Scaffold because it would create different
array of chemical functionality for subsequent attachment of a variety of
substituents using synthetic organic transformations and would be considered a
different Scaffold. Notwithstanding the foregoing, if the use of various [**]
were explored and was found to react similarly (as the [**] were found to in
this example), then the scope of such variability would be considered part of
the same Scaffold; provided that the same array of chemical functionality for
subsequent attachment of a variety of substitutes is present. For example, it
might be that the [**] was tested and found to react similarly and therefore
should be included in the Scaffold.

Additionally, breaking the [**] embedded in the [**] structure would result in a
compound with significantly different topology and physicochemical properties
which would introduce many unanticipated synthetic organic chemistry challenges
at the level of creating the Scaffold as well as introducing substituents that
this would be considered a different Scaffold.

[**]

 

Collaboration Agreement — Confidential

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EXHIBIT C

SYNTHETIC PATHWAYS AND SCAFFOLDS

[to be provided]

 

Collaboration Agreement — Confidential