Exhibit 10.1
Execution Copy
EMPLOYMENT AGREEMENT
     This AGREEMENT (the “Agreement”) is made as of April 6, 2009 (the
“Effective Date”), by and between EPIX Pharmaceuticals, Inc. (the “Employer” or
the “Company”), and Elkan Gamzu, Ph.D. (the “Executive”). In consideration of
the mutual covenants contained in this Agreement, the Employer and the Executive
agree as follows:
     1. Employment. The Employer agrees to employ the Executive and the
Executive agrees to be employed by the Employer on the terms and conditions set
forth in this Agreement.
     2. Capacity. The Executive shall serve the Employer as Chief Executive
Officer (“CEO”). As CEO, the Executive shall have authority and responsibility
for the general control and supervision of the Employer’s business and, subject
to the determination of the Employer’s Board of Directors (the “Board of
Directors”), shall constitute an officer position pursuant to Section 16 of the
Securities Exchange Act of 1934, as amended. The Executive shall work at the
Employer’s Lexington, Massachusetts office.
     3. Term. Subject to the provisions of Section 6, the Executive’s employment
is “at will” and may be terminated by either the Employer or Executive for any
reason, or for no reason, at any time.
     4. Compensation and Benefits. The regular compensation and benefits payable
to the Executive under this Agreement shall be as follows:
          (a) Salary. Beginning on the Effective Date, the Employer shall pay
the Executive a salary at the annual rate of $162,500 for all services rendered
by the Executive under this Agreement (the “Initial Salary”). The Employer shall
continue to pay the Executive the Initial Salary through the date the Executive
notifies the Employer that he desires to receive an increase in his annual base
salary rate (the “Notification Date”). Within one month of the Notification
Date, the Employer shall begin to pay the Executive a salary for all services
rendered by the Executive under this Agreement at the annual rate of $325,000
(the “Post-Notification Salary”), subject to increase from time to time in the
discretion of the Board of Directors or the Compensation Committee of the Board
of Directors (the “Compensation Committee”). The Executive’s annual base salary
in effect at any given time is referred to herein as “Base Salary.” The Base
Salary shall be payable in periodic installments in accordance with the
Employer’s usual practice for its senior executives, but not less frequently
than once every two weeks.
          (b) Annual Bonus. Beginning with the fiscal year ending December 31,
2009, the Executive shall be eligible for an annual bonus upon the Company
meeting its annual goals, under terms established by the Board of Directors or
the Compensation Committee with such terms as may be established in the sole
discretion of the Board of Directors or Compensation Committee. Bonus payments
for each fiscal year, as approved by the Board of Directors or Compensation
Committee, shall be paid between January 1 and March 15 of the following fiscal
year. The Executive’s target annual bonus will be 50% of the higher of his Base
Salary or the Post-Notification Salary.

 

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          (c) Special Bonus. Upon the consummation by the Company of a
“Restructuring and Financing Event” (as defined below), or any “COC Event” (as
defined below), the Executive shall be eligible for a special bonus of $100,000,
less any required deductions or withholdings. For purposes of this Agreement, a
Restructuring and Financing Event means that each of the following occur:
(a) the monetization by the Company of its rights to Vasovist resulting in gross
proceeds of at least $25 million; (b) the elimination of at least 85% of the
Company’s outstanding 3% Convertible Senior Notes due 2024 through a
restructuring, exchange for cash and/or common stock of the Company, or similar
transaction approved by the Board of Directors; and (c) the consummation of one
or more sales of debt, equity, or equity-linked securities of the Company or
committed funds from one or more newly executed collaborations or licensing
agreements resulting in aggregate cash proceeds to the Company of at least
$20 million. For purposes of this Agreement, COC Event means any of the
following: (a) any consolidation or merger of the Company in which the Company
is not a continuing or surviving corporation or pursuant to which shares of the
Company would be converted into cash, securities, or other property, other than
a consolidation or merger of the Company in which the holders of shares
immediately prior to the consolidation or merger maintain voting control of the
resulting entity immediately after the consolidation or merger; (b) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company; or (c) any
transaction or series of transactions, including in the event of an investment
in the Company, following which a person or a group of persons acting together
shall obtain a “controlling interest” (which shall mean the direct or indirect
ownership of more than 50% of the outstanding voting shares or other ownership
interest of the Company, or the power to elect or appoint more than 50% of the
members of the Company’s board of directors).
          (d) Stock Options. In consideration of the covenants contained in this
Agreement, the Executive is eligible to receive a long-term incentive award of
400,000 shares of the Company’s common stock in the form of stock options (the
“Options”). It is intended that the Options constitute incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, (the “Code”) to the extent permitted under IRC Regulation 1.422-4. To
the extent the $100,000 annual limitation set forth in such regulation is
exceeded, the Options shall be non-qualified. The stock option grant will vest
over four years, with 25% vesting on the date that is three months after the
date of grant (the “Cliff Vesting Amount”) and the remainder vesting in equal
quarterly installments on the two year, three year, and four year anniversary of
the date of grant (the “Quarterly Vesting Amount”). The Cliff Vesting Amount is
subject to acceleration such that 100,000 shares shall be vested upon (i) the
monetization by the Company of its rights to Vasovist resulting in gross
proceeds of at least $25 million, and (ii) the elimination of at least 85% of
the Company’s outstanding 3% Convertible Senior Notes due 2024 through a
restructuring, exchange for cash and/or common stock of the Company, or similar
transaction approved by the Board of Directors (clause (i) and (ii) collectively
referred to as the “Restructuring”). In addition, the Quarterly Vesting Amount
is subject to acceleration under the following circumstance: following the
Restructuring, 50% of the Quarterly Vesting Amount scheduled to vest will
accelerate, such that 150,000 shares of the Quarterly Vesting Amount, to the
extent not already vested, shall be vested, upon the consummation of one or more
sales of debt, equity, or equity-linked securities of the Company or committed
funds from one or more newly executed collaborations or licensing agreements
resulting in aggregate cash proceeds to the Company of at least $20 million.
Also, upon termination of the Executive’s employment without Cause (as set forth
in Section 6(c) below) no more than eighteen (18) months following

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the date of the consummation of a COC Event or upon the Executive’s termination
of his employment with Good Reason (as set forth in Section 6(b) below) no more
than eighteen (18) months following the date of the consummation of a COC Event,
the Cliff Vesting Amount and the Quarterly Vesting Amount are subject to
acceleration such that the Cliff Vesting Amount and the Quarterly Vesting Amount
shall be vested in their entirety to the extent not already vested. The Board of
Directors reserves the right to provide Executive with future long-term
incentive awards in its sole discretion. The stock option grant and any other
grant shall be subject to the Employer’s Stock Option Plan and any relevant
grant agreement.
          (e) Regular Benefits. The Executive shall also be entitled to
participate in any employee benefit plans, medical insurance plans, life
insurance plans, disability income plans, retirement plans, expense
reimbursement plans and other benefit plans which the Employer may from time to
time have in effect for all or most of its senior executives. Such participation
shall be subject to the terms of the applicable plan documents, generally
applicable policies of the Employer, applicable law and the discretion of the
Board of Directors, the Compensation Committee or any administrative or other
committee provided for in or contemplated by any such plan. Nothing contained in
this Agreement shall be construed to create any obligation on the part of the
Employer to establish any such plan or to maintain the effectiveness of any such
plan which may be in effect from time to time.
          (f) Taxation of Payments and Benefits. The Employer shall undertake to
make deductions, withholdings and tax reports with respect to payments and
benefits under this Agreement to the extent that it reasonably and in good faith
believes that it is required to make such deductions, withholdings and tax
reports. Payments under this Agreement shall be in amounts net of any such
deductions or withholdings. Nothing in this Agreement shall be construed to
require the Employer to make any payments to compensate the Executive for any
adverse tax effect associated with any payments or benefits or for any deduction
or withholding from any payment or benefit.
     5. Extent of Service. During the Executive’s employment under this
Agreement, the Executive shall, subject to the direction and supervision of the
Board of Directors, devote the Executive’s full business time, best business
judgment, skill and knowledge to the advancement of the Employer’s interests and
to the discharge of the Executive’s duties and responsibilities under this
Agreement. Nothing herein shall limit the Executive’s rights to provide services
in a non-operative role and/or to serve in a non-operative role on the board of
directors of other corporations, provided that the Executive receives approval
in advance, in writing, by the Board of Directors, whose approval shall not be
unreasonably withheld. Nothing in this Agreement shall be construed as
preventing the Executive from:
          (a) investing the Executive’s assets in any company or other entity in
a manner not prohibited by Section 7(d) of this Agreement and in such form or
manner as shall not require any material activities on the Executive’s part in
connection with the operations or affairs of the companies or other entities in
which such investments are made;
          (b) engaging in religious, charitable or other community or non-profit
activities that do not impair the Executive’s ability to fulfill the Executive’s
duties and responsibilities under this Agreement; or

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          (c) serving on the board of directors of any companies for which
Executive receives approval in advance, in writing, by the Board of Directors.
     6. Termination and Termination Benefits. The Executive’s employment under
this Agreement shall terminate under the following circumstances set forth in
this Section 6.
          (a) Termination by the Employer for Cause. The Executive’s employment
under this Agreement may be terminated for Cause without further liability on
the part of the Employer effective immediately upon a vote of the Board of
Directors and written notice to the Executive. Only the following shall
constitute “Cause” for such termination:
          (i) willful misappropriation of the funds or property of the Employer;
          (ii) the conviction for, the admission or confession to, or the plea
of “guilty” or “no contest” to (A) a felony or (B) any crime involving moral
turpitude, deceit, dishonesty, or fraud;
          (iii) willful and material failure (other than by reason of the
Executive’s physical or mental illness, incapacity or disability) to perform to
the reasonable satisfaction of the Board of Directors a substantial portion of
the Executive’s duties and responsibilities assigned or delegated under this
Agreement, which failure continues, in the reasonable judgment of the Board of
Directors, for at least thirty (30) days after written notice of the scope and
nature of such failure given to the Executive by the Board of Directors;
          (iv) gross negligence or willful misconduct of the Executive with
respect to the performance of duties assigned by the Employer that has an effect
that is materially adverse to the business assets (including intangible assets),
liabilities, financial condition, property, or results of operations of the
Employer; or
          (v) material breach by the Executive of any of the Executive’s
obligations under Section 7 of this Agreement.
          (b) Termination by the Executive. The Executive’s employment under
this Agreement may be terminated by the Executive without “Good Reason” (as
defined below) by written notice to the Board of Directors at least sixty
(60) days prior to such termination. For the purposes of this Agreement, Good
Reason shall mean (i) any reduction in the higher of Executive’s Base Salary or
the Post-Notification Salary; (ii) the relocation of the Executive’s primary
place of employment to a location more than 100 miles from Lexington,
Massachusetts; (iii) any failure by the Employer to pay the Executive his
compensation or provide him his benefits, as set forth herein, which is not
cured within ten (10) days after the receipt of written notice by the Employer
of a description of the breach; or (iv) a COC Event. The Executive’s employment
under this Agreement may be terminated by the Executive with Good Reason at any
time following the occurrence of events (i) through (iv) as set forth above. For
the purposes of this Agreement, Good Reason shall also mean (v) a material
reduction of the Executive’s responsibilities, duties or authority. The
Executive’s employment under this Agreement may be terminated by the Executive
with Good Reason following the occurrence of event (v) as set forth above only
upon compliance with the “Good Reason Process” (hereinafter defined). Good

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Reason Process shall mean that (1) the Executive reasonably determines in good
faith that his responsibilities, duties, or authority have been materially
reduced (a “Material Reduction”); (2) the Executive notifies the Employer in
writing of a Material Reduction within 60 days of the occurrence of such
condition; (3) the Executive cooperates in good faith with the Employer’s
efforts, for a period not less than 30 days following such notice (the “Cure
Period”), to remedy the Material Reduction; (4) notwithstanding such efforts,
the Material Reduction continues to exist; and (5) the Executive terminates his
employment within 60 days after the end of the Cure Period. If the Employer
cures the Material Reduction condition during the Cure Period, the Executive’s
termination of his employment on the basis of that condition shall be considered
a termination without Good Reason.
          (c) Termination by the Employer Without Cause. Subject to the payment
of Termination Benefits pursuant to Section 6(d), the Executive’s employment
under this Agreement may be terminated by the Employer without Cause upon
60 days’ written notice to the Executive. The Executive’s employment shall not
be considered to be terminated without Cause if the Executive’s employment
terminates by reason of death or disability pursuant to Section 6(e).
          (d) Certain Termination Benefits. Unless otherwise specifically
provided in this Agreement or otherwise required by law, all compensation and
benefits payable to the Executive under this Agreement shall terminate on the
date of termination of the Executive’s employment under this Agreement. If the
Executive’s employment with the Company is terminated for any reason, the
Company shall pay or provide to the Executive any earned but unpaid salary and
any unpaid expense reimbursement on or before the time required by law but in no
event more than thirty (30) days after the date of the Executive’s termination.
Notwithstanding the foregoing, in the event of termination of the Executive’s
employment with the Employer pursuant to Section 6(c) above or termination by
the Executive with Good Reason pursuant to Section 6(b) above, the Employer
shall provide to the Executive the following termination benefits (“Termination
Benefits”), provided that the Executive executes (and does not revoke) a general
release of claims (the “Release”) in substantially the form attached hereto as
Exhibit A, with such modifications as may be required at the time of execution
for a valid and enforceable general release of claims, within the time frame set
forth in the Release:
          (i) a lump sum equal to twelve (12) months salary at the higher of the
Executive’s Base Salary rate as of the date of termination under this Agreement
or the Post-Notification Salary rate, payable in the next regular pay period
that occurs more than 30 days following the date of termination; and
          (ii) continuation of group health plan benefits to the extent
authorized by and consistent with 29 U.S.C. § 1161 et seq. (commonly known as
“COBRA”), with the Gross Cost of the regular premium for such benefits shared in
the same relative proportion by the Employer and the Executive as in effect on
the date of termination until twelve (12) months after the date of termination.
For purposes of this 6(d)(ii), “Gross Cost” shall refer to the total cost of the
regular premium for such benefits without considering the reduction of the
premium cost based on any subsidy authorized by federal, state, or local law.
Notwithstanding the foregoing, nothing in this Section 6(d) shall be construed
to affect the Executive’s right to receive COBRA continuation entirely

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at the Executive’s own cost to the extent that the Executive may continue to be
entitled to COBRA continuation after the Executive’s right to cost sharing under
Section 6(d)(ii) ceases; and
          (iii) that portion of his bonus set forth in Section 4(b) above as had
been accrued by the Employer in accordance with generally accepted accounting
principles as of the end of the fiscal quarter immediately preceding such
termination. This portion of the bonus will be paid to the Executive at the time
the Employer pays bonuses to other senior employees, provided that it shall be
paid no later than March 14 of the calendar year immediately following the
calendar year during which termination of employment occurs.
          (iv) If the Release is not executed (without revocation) within the
time provided in the Release, or the Executive violates any provision of
Section 7 below, the Executive shall forfeit all rights to any Termination
Benefits under this Agreement.
          (e) Disability. The Employer may terminate the Executive’s employment
if he is disabled and unable to perform the essential functions of the
Executive’s then existing position or positions under this Agreement with or
without reasonable accommodation for a period of 180 days (which need not be
consecutive) in any 12-month period. Until the Executive’s employment is
terminated, the Executive will continue to receive payment from the Employer,
which when added to any sick pay or disability pay, shall equal his Salary. Upon
such termination, the Executive shall be entitled to receive a pro rata share of
his bonus for the fiscal year in which termination occurs pursuant to Section
4(b) above. This pro rata bonus shall be paid to the Executive at the time the
Employer pays bonuses to other senior employees, provided that it shall be paid
no later than March 14 of the calendar year immediately following the calendar
year during which termination of employment occurs.
     If any question shall arise as to whether during any period the Executive
is disabled so as to be unable to perform the essential functions of the
Executive’s then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Employer shall,
submit to the Employer a certification in reasonable detail by a physician
selected by the Employer to whom the Executive or the Executive’s guardian has
no reasonable objection as to whether the Executive is so disabled or how long
such disability is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to
submit such certification, the Employer’s determination of such issue shall be
binding on the Executive. Nothing in this Section shall be construed to waive
the Executive’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq.
and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
     7. Confidential Information, Noncompetition and Cooperation.
          (a) Confidential Information. As used in this Agreement, “Confidential
Information” means information belonging to the Employer which is of value to
the Employer in the course of conducting its business and the disclosure of
which could result in a competitive or

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other disadvantage to the Employer. Confidential Information includes, without
limitation, financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets; know-how; designs,
processes or formulae; software; market or sales information or plans; customer
lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities) which have been
discussed or considered by the management of the Employer. Confidential
Information includes information developed by the Executive in the course of the
Executive’s employment by the Employer, as well as other information to which
the Executive may have access in connection with the Executive’s employment.
Confidential Information also includes any third party’s information that the
Employer agrees to keep in confidence and/or trust or to not disclose to others
pursuant to an agreement with the third party. Notwithstanding the foregoing,
Confidential Information does not include information in the public domain,
unless due to breach of the Executive’s duties under Section 7(b), or
information that is shown by documentary evidence to have been known by
Executive prior to disclosure to Executive by the Employer.
          (b) Confidentiality. The Executive understands and agrees that the
Executive’s employment creates a relationship of confidence and trust between
the Executive and the Employer with respect to all Confidential Information. At
all times, both during the Executive’s employment with the Employer and after
its termination, the Executive will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the written consent of the Employer, except as may be
necessary in the ordinary course of performing the Executive’s duties to the
Employer.
          (c) Documents, Records, etc. All documents, records, data, apparatus,
equipment and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Executive by the Employer or are
produced by the Executive in connection with the Executive’s employment will be
and remain the sole property of the Employer. The Executive will return to the
Employer all such materials and property as and when requested by the Employer.
In any event, the Executive will return all such materials and property
immediately upon termination of the Executive’s employment for any reason. The
Executive will not retain with the Executive any such material or property or
any copies thereof after such termination.
          (d) Noncompetition and Nonsolicitation. During the Executive’s
employment with the Company and for one year thereafter (or, if longer, for the
number of months’ salary paid as severance, as defined in Section 6(d)(i)), the
Executive will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise, engage,
participate, assist or invest in any Competing Business (as hereinafter
defined). During the Executive’s employment with the Company and for one year
thereafter, the Executive (i) will refrain from attempting to employ, recruiting
or otherwise soliciting, inducing or influencing any person to leave employment
with the Employer (other than terminations of employment of subordinate
employees undertaken in the course of the Executive’s employment with the
Employer); and (ii) will refrain from soliciting or encouraging any customer or
supplier to terminate or otherwise modify adversely its business relationship
with the Employer. The Executive understands that the restrictions set forth in
this Section 7(d) are intended to protect the Employer’s interest in its
Confidential Information and established employee, customer and supplier
relationships and goodwill, and agrees that such restrictions are reasonable and

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appropriate for this purpose. For purposes of this Agreement, the term
“Competing Business” shall mean a business with a primary focus on discovering
drugs targeting GPCR’s through the use of in silico discovery and development
technologies. Notwithstanding the foregoing, the Executive may own up to one
percent (1%) of the outstanding stock of a publicly held corporation which
constitutes or is affiliated with a Competing Business.
          (e) Third-Party Agreements and Rights. The Executive hereby confirms
that the Executive is not bound by the terms of any agreement with any previous
employer or other party which restricts in any way the Executive’s use or
disclosure of information or the Executive’s engagement in any business. The
Executive represents to the Employer that the Executive’s execution of this
Agreement, the Executive’s employment with the Employer and the performance of
the Executive’s proposed duties for the Employer will not violate any
obligations the Executive may have to any such previous employer or other party.
In the Executive’s work for the Employer, the Executive will not disclose or
make use of any information in violation of any agreements with or rights of any
such previous employer or other party, and the Executive will not bring to the
premises of the Employer any copies or other tangible embodiments of non-public
information belonging to or obtained from any such previous employment or other
party.
          (f) Litigation and Regulatory Cooperation. During and after the
Executive’s employment, the Executive shall cooperate fully with the Employer in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Employer which relate
to events or occurrences that transpired while the Executive was employed by the
Employer. The Executive’s full cooperation in connection with such claims or
actions shall include, but not be limited to, being reasonably available to meet
with counsel to prepare for discovery or trial and to act as a witness on behalf
of the Employer at mutually convenient times. During and after the Executive’s
employment, the Executive also shall cooperate fully with the Employer in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the Employer.
The Employer shall reimburse the Executive for any reasonable out-of-pocket
expenses and time (at a mutually agreed upon rate) incurred in connection with
the Executive’s performance of obligations pursuant to this Section 7(f).
          (g) Injunction. The Executive agrees that it would be difficult to
measure any damages caused to the Employer which might result from any breach by
the Executive of the promises set forth in this Section 7, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
subject to Section 8 of this Agreement, the Executive agrees that if the
Executive breaches, or proposes to breach, any portion of this Agreement, the
Employer shall be entitled, in addition to all other remedies that it may have,
to an injunction or other appropriate equitable relief to restrain any such
breach, without showing or proving any actual damage to the Employer.
     8. Arbitration of Disputes. Any controversy or claim arising out of this
Agreement or the breach thereof shall, to the fullest extent permitted by law,
be settled by arbitration in any forum and form agreed upon by the parties or,
in the absence of such an agreement, under the auspices of the American
Arbitration Association (“AAA”) in Boston, Massachusetts in

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accordance with the Employment Dispute Resolution Rules of the AAA, including,
but not limited to, the rules and procedures applicable to the selection of
arbitrators. In the event that any person or entity other than the Executive or
the Employer may be a party with regard to any such controversy or claim, such
controversy or claim shall be submitted to arbitration subject to such other
person or entity’s agreement. Judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. This Section 8 shall be
specifically enforceable. Notwithstanding the foregoing, this Section 8 shall
not preclude either party from pursuing a court action for the sole purpose of
obtaining a temporary restraining order or a preliminary injunction in
circumstances in which such relief is appropriate; provided that any other
relief shall be pursued through an arbitration proceeding pursuant to this
Section 8.
     9. Consent to Jurisdiction. To the extent that any court action is
permitted consistent with or to enforce Section 8 of this Agreement, the parties
hereby consent to the jurisdiction of the Superior Court of the Commonwealth of
Massachusetts and the United States District Court for the District of
Massachusetts. Accordingly, with respect to any such court action, the Executive
(a) submits to the personal jurisdiction of such courts; (b) consents to service
of process; and (c) waives any other requirement (whether imposed by statute,
rule of court, or otherwise) with respect to personal jurisdiction or service of
process.
     10. Integration. This Agreement, together with any stock option plans and
grants, constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements between the parties
with respect to any related subject matter.
     11. Section 409A.
          (a) Anything in this Agreement to the contrary notwithstanding, if at
the time of the Executive’s separation from service within the meaning of
Section 409A of the Code, the Employer determines that the Executive is a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code,
then to the extent any payment or benefit that the Executive becomes entitled to
under this Agreement would be considered deferred compensation subject to the 20
percent additional tax imposed pursuant to Section 409A(a) of the Code as a
result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment
shall not be payable and such benefit shall not be provided until the date that
is the earlier of (A) six months and one day after the Executive’s separation
from service, or (B) the Executive’s death. The determination of whether and
when a separation from service has occurred shall be made in accordance with the
presumptions set forth in Treasury Regulation Section 1.409A-1(h).
          (b) The parties intend that this Agreement will be administered in
accordance with Section 409A of the Code. To the extent that any provision of
this Agreement is ambiguous as to its compliance with Section 409A of the Code,
the provision shall be read in such a manner so that all payments hereunder
comply with Section 409A of the Code. The parties agree that this Agreement may
be amended, as reasonably requested by either party, and as may be necessary to
fully comply with Section 409A of the Code and all related rules and regulations
in order to preserve the payments and benefits provided hereunder without
additional cost to either party.

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          (c) The Employer makes no representation or warranty and shall have no
liability to the Executive or any other person if any provisions of this
Agreement are determined to constitute deferred compensation subject to
Section 409A of the Code but do not satisfy an exemption from, or the conditions
of, such Section.
     12. Assignment; Successors and Assigns. Neither the Employer nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided that the Employer may assign its rights under this Agreement
without the consent of the Executive in the event that the Employer shall effect
a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity. This Agreement shall inure to the benefit of and be binding
upon the Employer and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
     13. Enforceability. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
     14. Waiver. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
     15. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Executive at the last address the Executive has filed in writing with the
Employer or, in the case of the Employer, at its main offices, attention of the
Board of Directors, and shall be effective on the date of delivery in person or
by courier or three (3) days after the date mailed.
     16. Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Employer.
     17. Governing Law. This is a Massachusetts contract and shall be construed
under and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of such
Commonwealth. With respect to any disputes concerning federal law, such disputes
shall be determined in accordance with the law as it would be interpreted and
applied by the United States Court of Appeals for the First Circuit.

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     18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
     IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Employer, by its duly authorized officer, and by the Executive, as of the
Effective Date.

                  EPIX PHARMACEUTICALS, INC.    
 
           
 
  By:   /s/ Mark Leuchtenberger
 
   
 
           
 
  Name: Mark Leuchtenberger    
 
           
 
  Title: Chairman of the Compensation Committee    
 
                /s/ Elkan Gamzu, Ph.D.                   Elkan Gamzu, Ph.D.    

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Exhibit A
RELEASE AGREEMENT
          For and in consideration of the mutual agreements and promises
contained in the Employment Agreement, dated April 6, 2009 (the “Employment
Agreement”) between Elkan Gamzu, Ph.D. (“Executive”) and Epix Pharmaceuticals,
Inc.(“the Company”), and other good and valuable consideration, the Executive,
for himself and his successors, assigns, heirs, executors and administrators,
hereby fully and unconditionally releases and forever discharges the Company,
including its shareholders, subsidiaries, affiliates, officers, directors,
employees, agents, and attorneys (collectively the “Releasees”) of and from any
and all claims, causes of action, suits, obligations, demands, debts,
agreements, promises, liabilities, controversies, costs, damages, expenses and
attorneys’ fees, of any kind and character, whether based on any federal, state,
or local law or right of action, at law or in equity, including without
limitation claims arising under Title VII of the Civil Rights Act, the Americans
with Disabilities Act, the Age Discrimination in Employment Act, Massachusetts
General Laws Chapter 151B, or any other applicable federal state or local
employment discrimination statute, regulation, or ordinance prohibiting
discrimination on the basis of age, race, sex, national origin, religion, sexual
preference, disability, veteran status, genetic information or any other
protected characteristic, whether accrued or unaccrued, whether known or
unknown, and whether direct or contingent, which Executive claimed or could have
claimed against any of the Releasees, from the beginning of time through and
including the date Executive signs this Release. This Release includes, without
implication of limitation, the complete release of all claims of or for: breach
of express or implied contract; wrongful termination of employment whether in
contract or tort; intentional, reckless, or negligent infliction of emotional
distress; breach of any express or implied covenant of employment, including the
covenant of good faith and fair dealing; interference with contractual or
advantageous relations, whether prospective or existing; deceit or
misrepresentation; discrimination or retaliation under state, federal, or
municipal law, including, without implication of limitation, defamation or
damage to reputation; reinstatement; punitive or emotional distress damages;
wages, severance pay, vacation pay, back or front pay or other forms of
compensation; and attorney’s fees and costs. Executive understands that this
general release of claims extends to any and all claims related to Executive’s
employment by the Company and Executive’s separation from employment.
     This Release of Claims is intended to comply with the Older Workers Benefit
Protection Act of 1990 with regard to the release of claims under the Age
Discrimination in Employment Act. Executive hereby acknowledges and agrees:
     (a) Executive is specifically waiving rights and claims under the ADEA.
Such waiver of rights does not extend to any rights or claims under the ADEA
arising after the date Executive executes this Release;
     (c) Executive has been advised to consult with an attorney of his choice
before executing this Release;

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     (d) Executive would not be entitled to certain termination benefits under
the Employment Agreement but for his execution of this Release;
     (e) Executive has read this Release, understands its terms, and has
executed it voluntarily and without coercion of any kind;
     (f) Executive has been provided twenty-one (21) days to consider this
Release before signing it (“Consideration Period”). If the Executive elects to
sign this Release in fewer than 21 days, Executive represents that he has
voluntarily elected to waive the remaining Consideration Period in order to
avail himself of the termination benefits under his Employment Agreement more
quickly. Executive also has the right to revoke his agreement to this Release
within seven (7) days after signing it (“Revocation Period”). Such revocation
must be in writing delivered during the Revocation Period to the Company’s head
of Human Resources at fax number781-761-7641; and
     (g) Any severance or related payments owed to Executive under Section 6 of
the Employment Agreement will only be made by the Company after the Revocation
Period has elapsed without the Executive having revoked this Release.
     Nothing in this Release is intended to release the Company from any rights
the Executive may have to indemnification from the Company for conduct within
the scope of his duties during his employment, including without limitation such
indemnification as may be provided in the Company By-Laws, through a directors’
and officers’ liability insurance policy, or such other contractual or common
law indemnification rights as may exist.
     Executive hereby reaffirms all of his post-employment, confidentiality,
noncompetition and cooperation obligations set forth in Section 7 of the
Employment Agreement. Executive further agrees not to make any disparaging
statements or remarks, whether orally or in writing, concerning or relating to
the Company or any of the Releasees (in their official and personal capacities),
its and their services and/or products. In addition, Executive shall not take
any actions or conduct herself in any way that would reasonably be expected to
affect adversely the reputation or good will of the Company or any of the
Releasees.
     This Release shall not be construed as an admission by the Company or any
other Releasee of any improper, discriminatory or unlawful action against the
Executive.

                             
 
 
 
Elkan Gamzu, Ph.D.    

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