Execution Version

PROTECTIVE RIGHTS AGREEMENT
THIS PROTECTIVE RIGHTS AGREEMENT (this “Agreement”) is made and entered into as
of March 11, 2019 by and between Infinity Pharmaceuticals, Inc., a Delaware
corporation (“Grantor”), and HCR Collateral Management, LLC, a Delaware limited
liability company (“Agent”), as agent for HealthCare Royalty Partners III, L.P.,
a Delaware limited partnership (“HC Royalty”).
RECITALS:
A.    Grantor and HC Royalty are parties to that certain Purchase Agreement (as
defined below).
B.    Pursuant to the Purchase Agreement, Grantor has agreed to sell, assign,
transfer, convey and grant to HC Royalty, and HC Royalty agreed to purchase,
acquire and accept from Grantor, all of Grantor’s rights, title and interest in
and to the Purchased Assets (as defined in the Purchase Agreement).
C.    Pursuant to the terms of the Purchase Agreement, Grantor has agreed to
enter into this Agreement, under which Grantor grants to Agent, for the benefit
of HC Royalty, a security interest in and to the Collateral (as defined below)
as security for the due performance and payment of all of Grantor’s obligations
to HC Royalty under the Purchase Agreement.
AGREEMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Grantor and Agent, with intent to be legally
bound hereby, covenant and agree as follows:
SECTION 1.Definitions.
For purposes of this Agreement, capitalized terms used herein shall have the
meanings set forth below. Capitalized terms used herein and not otherwise
defined shall have the meaning given such terms in the UCC or the Purchase
Agreement, as applicable.
“Agent” has the meaning set forth in the preamble to this Agreement.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Applicable Covenant” means the covenants set forth in Sections 5.3(a), (b), (d)
and (e), Section 5.4(a), (b) and (e), and Section 5.5(a) and (b) of the Purchase
Agreement.
“Bankruptcy Event” means an Involuntary Seller Bankruptcy or a Voluntary Seller
Bankruptcy that has caused or would reasonably be expected to cause: (i) the
invalidity of the security interest pursuant to this Agreement or the Purchase
Agreement, (ii) impairment of a material portion of the Collateral, (iii)
termination of the License Agreement or (iv) a material change in the timing,
amount or duration of HC Royalty’s payments under the Purchase Agreement.
“Breach Event” means the occurrence of one or more of the following during the
term of the Purchase Agreement:
(a)    any breach by Grantor of any Applicable Covenant under the Purchase
Agreement that has caused or would reasonably be expected to cause: (i) the
invalidity of the security interest pursuant to this Agreement or the Purchase
Agreement, (ii) impairment of a material portion of the Collateral or (iii)
termination of the License Agreement;
(b)    any breach by Grantor of any Applicable Covenant under the Purchase
Agreement that has caused or would reasonably be expected to cause a material
change in the timing, amount or duration of HC Royalty’s payments under the
Purchase Agreement;
(c)    a Bankruptcy Event; or
(d)    any breach by Grantor of Section 5.6 of the Purchase Agreement.
“Collateral” has the meaning set forth in Section 2 of this Agreement.
“Counterparty” means Verastem, Inc., a Delaware corporation.
“Default” means (i) a Recharacterization or (ii) a Breach Event.
“Grantor” has the meaning set forth in the preamble to this Agreement.
“HC Royalty” has the meaning set forth in the preamble to this Agreement.
“License Agreement” means that certain Amended and Restated License Agreement,
effective as of October 29, 2016, by and between Grantor and Counterparty, as
may be further amended from time to time.
“Party” means any of Grantor or Agent as the context indicates and “Parties”
shall mean all of Grantor and Agent.
“Patent Rights” means the Patents solely owned by Grantor set forth on Exhibit D
to the Purchase Agreement.
“Permitted Liens” means (a) the security interest created by this Agreement, (b)
the assignment effected pursuant to the Purchase Agreement, (c) those Liens
created in favor of HC Royalty pursuant to any other Transaction Document to
which HC Royalty is a party and (d) the interest of Counterparty as licensee of
the Intellectual Property Rights under the License Agreement.
“Purchase Agreement” means the Purchase and Sale Agreement entered into as of
March 5, 2019 by and between Grantor and HC Royalty, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
“Recharacterization” means a judgment or order by a court of competent
jurisdiction that the Seller’s right, title and interest in the Purchased Assets
were not fully transferred to the Purchaser pursuant     to, as contemplated by,
and subject to the provisions of the Purchase Agreement and the Bill of Sale,
but instead that such transaction(s) constituted a loan and security device.
“Secured Obligations” means (a) subject to the last sentence of Section 2
relating to a Recharacterization, the payment obligations of Grantor now or
hereafter existing under or arising out of or in connection with this Agreement,
the Purchase Agreement and each other Transaction Document to which it is a
party, and (b) whether or not there is a Recharacterization, any damages,
reimbursement of fees, expenses, indemnities or otherwise pursuant to any of the
Purchase Agreement and other Transaction Documents arising out of a claim by
Agent in connection with a Breach Event.
“Transfer” means any sale, conveyance, assignment, disposition, pledge,
hypothecation or transfer.
“UCC” means the Uniform Commercial Code, as in effect on the date of this
Agreement in the State of New York; provided, that, if, with respect to any
financing statement or by reason of any provisions of Applicable Law, the
perfection or the effect of perfection or non-perfection of the security
interest or any portion thereof granted herein is governed by the Uniform
Commercial Code as in effect in a jurisdiction of the United States other than
New York, then “UCC” means the Uniform Commercial Code as in effect from time to
time in such other jurisdiction for purposes of the provisions of this Agreement
and any financing statement relating to such perfection or effect of perfection
or non-perfection.
SECTION 2.    Grant of Security.
Subject to the final paragraph of this Section 2, Grantor hereby grants Agent,
for the benefit of HC Royalty, a security interest in all of its right, title,
and interest in, to and under the following property, whether now or hereinafter
existing or acquired, whether tangible or intangible and wherever the same may
be located (collectively, the “Collateral”):
(a)    the Purchased Assets;
(b)    the Patent Rights related to the patents listed on Schedule 2(b);
(c)    all books, records and database extracts of Grantor specifically relating
to any of the foregoing Collateral, subject in all respects to the limitations
in the Counterparty Consent; and
(d)    all proceeds of or from any and all of the foregoing Collateral,
including all payments under any indemnity, warranty or guaranty, and all money
now or at any time in the possession or under the control of, or in transit to,
Agent, relating to any of the foregoing Collateral;
provided, however, that the Closing Payment, the First Sales Milestone Payment
(if any), the Second Sales Milestone Payment (if any), the Third Sales Milestone
Payment (if any) and the Fourth Sales Milestone Payment (if any) shall not
constitute Collateral or any proceeds thereof.
Notwithstanding the foregoing definition of the term “Collateral,” the foregoing
security interest is granted subject to all of the obligations of the Grantor
set forth in the License Agreement (after giving effect to the Counterparty
Consent) and the INFI Third Party Agreements, and Agent (on behalf of itself, HC
Royalty, its and their Affiliates, and it and their successors and assigns)
agrees not to take any action, in foreclosure proceedings, in bankruptcy
proceedings or otherwise, to disturb or challenge the enforceability of the
applicable counterparty’s rights under the License Agreement (after giving
effect to the Counterparty Consent) or any INFI Third Party Agreement.
Each item of Collateral listed in this Section 2 that is defined in Article 9 of
the UCC shall have the meaning set forth in the UCC, it being the intention of
Grantor that the description of the Collateral set forth above be construed to
include the broadest possible range of assets described herein.
Grantor’s rights, title and interest in and to the Purchased Assets have been
sold, assigned, transferred, conveyed and granted to HC Royalty pursuant to the
Purchase Agreement and it is the intention of the Parties that such transaction
be treated as a true and absolute sale, without recourse. The security interest
granted in this Section 2 is granted as a precaution against the possibility,
contrary to the Parties’ intentions, that the transaction is subject to a
Recharacterization, and Agent’s recourse to the Collateral for the Secured
Obligations described in clause (a) of the definition of the term “Secured
Obligations” arises only if there is a Recharacterization.
SECTION 3.    Security for Obligations.
This Agreement secures, and the Collateral is collateral security for, the due
and punctual payment or performance in full of all Secured Obligations.
SECTION 4.    Grantor to Remain Liable.
Anything contained herein to the contrary notwithstanding, (a) Grantor shall
remain liable under any contracts and agreements included in the Collateral, to
the extent set forth therein, to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
the exercise by Agent of any of its rights hereunder shall not release Grantor
from any of its duties or obligations under any contracts and agreements
included in the Collateral, and (c) Agent shall not have any obligation or
liability under any contracts, licenses, and agreements included in the
Collateral by reason of this Agreement, nor shall Agent be obligated (i) to
perform any of the obligations or duties of Grantor thereunder, (ii) to take any
action to collect or enforce any claim for payment assigned hereunder, or (iii)
to make any inquiry as to the nature or sufficiency of any payment Grantor may
be entitled to receive thereunder.
SECTION 5.    Representations and Warranties. Grantor represents and warrants as
follows:
(a)    Validity. This Agreement creates a valid security interest in the
Collateral securing the payment and performance in full of the Secured
Obligations. Upon the filing of appropriate UCC financing statements,
substantially in the form set forth on Schedule 5(a), in the filing offices
listed on Schedule 5(b), all filings, registrations, recordings and other
actions necessary or appropriate to create, preserve, protect and perfect a
first priority security interest in the Collateral will have been accomplished
and such security interest will be prior to the rights of all other Persons
therein and free and clear of any and all Liens, except any Permitted Liens, to
the extent that a security interest in such Collateral can be perfected by
filing of a UCC financing statement.
(b)    Authorization, Approval. No authorization, approval, or other action by,
and no notice to or filing with, any government or agency of any government or
other Person is required either (i) for the grant by Grantor of the security
interest granted hereby or for the execution, delivery and performance of this
Agreement by Grantor; or (ii) for the perfection of, and the first priority of,
the grant of the security interest created hereby or the exercise by Agent of
its rights and remedies hereunder, other than in the case of clause (ii), the
filing of financing statements or intellectual property security agreements in
the respective offices listed on Schedule 5(b).
(c)    Enforceability. This Agreement is the legally valid and binding
obligation of Grantor, enforceable against Grantor in accordance with its terms,
subject, as to enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
or general equitable principles.
(d)    Office Locations; Type and Jurisdiction of Organization. The sole place
of business, the chief executive office and each office where Grantor keeps its
records regarding the Collateral are, as of the date hereof, located at the
locations set forth on Schedule 5(d); Grantor’s type of organization (e.g.,
corporation) and jurisdiction of organization are listed on Schedule 5(d).
(e)    Names. The name listed for Grantor on the signature pages hereof is the
correct legal name of Grantor. Except as set forth on Schedule 5(e), Grantor (or
any predecessor by merger or otherwise) has not, within the five-year period
preceding the date hereof, had a different name from the name listed for Grantor
on the signature pages hereof.
SECTION 6.    Further Assurances.
Grantor agrees that from time to time, at its expense, Grantor will promptly
execute and deliver and will cause to be executed and delivered all further
instruments and documents, and will take all further action, that may be
necessary, or that Agent may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, Grantor will
deliver such other instruments or notices, in each case, as may be necessary, or
as Agent may reasonably request, in order to perfect and preserve the security
interests granted or purported to be granted hereby or to enable Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
Grantor agrees to furnish Agent promptly upon reasonable request by Agent, with
any information that is reasonably requested by Agent in order to complete such
financing statements, continuation statements, or amendments thereto.
SECTION 7.    Certain Covenants of Grantor. Grantor shall give Agent 30 days’
written notice before any change in Grantor’s name, identity, the address of its
sole place of business, chief executive office, or where Grantor keeps its
records regarding the Collateral, or corporate structure or reincorporation,
reorganization, or taking of any other action that results in a change of the
jurisdiction of organization of Grantor. Any such notice shall be accompanied by
a revised Schedule 5(d) which shall replace Schedule 5(d) hereto and shall, upon
effectiveness of the change set forth therein, become a part of this Agreement.
SECTION 8.    Special Covenants With Respect to the Collateral.
(a)    Except as otherwise permitted by the Purchase Agreement, Grantor shall
not Transfer, or agree to Transfer, any Collateral; provided that Grantor may
Transfer or agree to Transfer any Collateral in connection with the merger or
consolidation of the Grantor or the assignment of such Grantor’s obligations and
rights by operation of law so long as (A) the Person into which the Grantor has
been merged or consolidated or which has acquired such Collateral of the Grantor
has delivered evidence to Agent, in form and substance reasonably satisfactory
to Agent, that such Person has assumed all of Grantor’s obligations under the
Transaction Documents and (B) all steps have been taken satisfactory to Agent to
assure to Agent of the continued perfection and priority of its security
interest in the Collateral.
(b)    Grantor shall, concurrently with the execution and delivery of this
Agreement, execute and deliver to Agent one original of a Special Power of
Attorney in the form of Exhibit I annexed hereto for execution of an assignment
of the Collateral to Agent, or the implementation of the sale or other
disposition of the Collateral pursuant to Agent’s good faith exercise of the
rights and remedies granted hereunder; provided, however, Agent agrees that it
will not exercise its rights under such Special Power of Attorney unless a
Default has occurred and is continuing.
(c)    Grantor further agrees that a breach of any of the covenants contained in
this Section 8 (other than the covenant contained in Section 8(a)(i)) will cause
irreparable injury to Agent, that Agent has no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section 8 shall be specifically enforceable against Grantor, and Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants (other than any such defense based on the
assertion that Grantor had performed and is performing its obligations pursuant
to such covenant(s)).
SECTION 9.    Standard of Care.
The powers conferred on Agent hereunder are solely to protect its interest in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of good faith and of reasonable care in the
accounting for monies actually received by Agent hereunder, Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.
Agent shall have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Agent accords its own property.
SECTION 10.    Remedies Upon Default.
(a)    If, and only if, any Default shall have occurred and be continuing, Agent
may, in good faith, exercise in respect of the Collateral all rights and
remedies provided for herein, including, without duplication, any rights or
remedies provided for under the Purchase Agreement, the UCC or under other
applicable law, in all relevant jurisdictions.
(b)    If, and only if, any Default shall have occurred and be continuing, Agent
shall have the right (but not the obligation) to bring suit, in the name of
Grantor, Agent or otherwise, to exercise the Agent’s rights as a secured party
with respect to any Collateral (it being understood that this Section 10(b)
shall not supersede Section 5.3 of the Purchase Agreement), in which event
Grantor shall, at the request of Agent, do any and all lawful acts and execute
any and all documents required by Agent in aid of such enforcement. Grantor
shall promptly, upon demand, reimburse and indemnify Agent as provided in
Section 12 hereof in connection with the exercise of its rights under this
Section 10.
SECTION 11.    Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all proceeds net of
enforcement expenses received by Agent, for the benefit of HC Royalty, in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral shall be applied in good faith to satisfy such item or
part of the Secured Obligations as Agent may designate.
SECTION 12.    Expenses.
Grantor agrees to pay to Agent upon demand the amount of any and all documented,
reasonable out-of-pocket costs and expenses, including the reasonable fees and
expenses of counsel and of any experts and agents, that Agent may reasonably and
actually incur in connection with (i) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Collateral during the continuance of a Default, (ii) the preservation of or
exercise or enforcement of any of the rights of Agent hereunder during the
continuance of a Default, or (iii) the failure by Grantor to perform or observe
any of the provisions hereof, which failure, if reasonably capable of being
cured within 30 days, continues without cure after such period.
SECTION 13.    Continuing Security Interest; Termination.
This Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until termination of the Purchase
Agreement in accordance with Section 7.1 thereof, (ii) be binding upon Grantor
and its respective successors and assigns, and (iii) inure, together with the
rights and remedies of Agent hereunder, to the benefit of Agent and its
successors, transferees and assigns. Upon termination of the Purchase Agreement
in accordance with Section 7.1 thereof, the security interest granted hereunder
shall terminate and all rights to the Collateral shall revert to Grantor and
Agent shall, at the expense of Grantor, execute such instruments of release and
otherwise take such actions, or permit Grantor to take such actions, as Grantor
may reasonably request to release the Collateral from the security interest
granted hereby.

SECTION 14.    Amendments.
(a)    This Agreement or any term or provision hereof may not be amended,
changed or modified except with the written consent of the Parties and the
approval of such amendment, change or modification by each Party’s counsel. No
waiver of any right hereunder shall be effective unless such waiver is signed in
writing by the Party against whom such waiver is sought to be enforced.
(b)    No failure or delay by either Party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
(c)    No waiver or approval hereunder shall, except as may otherwise be stated
in such waiver or approval, be applicable to subsequent transactions. No waiver
or approval hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
applicable law.
SECTION 15.    Notices.
All notices, consents, waivers and other communications hereunder shall be in
writing and shall be delivered in accordance with Section 9.3 of the Purchase
Agreement.
SECTION 16.    Severability.
If one or more provisions of this Agreement are held to be invalid, illegal or
unenforceable by a court of competent jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement,
which shall remain in full force and effect, and the Parties shall replace such
invalid, illegal or unenforceable provision with a new provision permitted by
Applicable Law and having an economic effect as close as possible to the
invalid, illegal or unenforceable provision. Any provision of this Agreement
held invalid, illegal or unenforceable only in part or degree by a court of
competent jurisdiction shall remain in full force and effect to the extent not
held invalid, illegal or unenforceable.
SECTION 17.    Headings and Captions.
The headings and captions in this Agreement have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 18.    Governing Law; Jurisdiction.
(a)    This Agreement shall be governed by, and construed, interpreted and
enforced in accordance with, the internal substantive laws of the State of New
York, USA without giving effect to the rules thereof relating to conflicts of
law thereof (other than Section 5-1401 of the General Obligations Law of the
State of New York) and the obligations, rights and remedies of the Parties
hereunder shall be determined in accordance with such laws. Each Party
unconditionally and irrevocably consents to the exclusive jurisdiction of the
courts of the State of New York, USA located in the County of New York and the
Federal district court for the Southern District of New York located in the
County of New York with respect to any suit, action or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby. Each
Party hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in this Section 18(a). Each
Party hereby irrevocably waives, to the fullest extent permitted by Applicable
Law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court. Each Party agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
Applicable Law.
(b)    Each Party hereby irrevocably consents to service of process in the
manner provided for notices in Section 15. Nothing in this Agreement will affect
the right of any party hereto to serve process on the other Party in any other
manner permitted by Applicable Law. Each of the Parties waives personal service
of any summons, complaint or other process, which may be made by any other means
permitted by New York law.
SECTION 19.    Waiver of Jury Trial.
EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY
HERETO WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 19.
SECTION 20.    Counterparts; Effectiveness.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
Party shall have received a counterpart hereof signed by the other Party. Any
counterpart may be executed by facsimile or other electronic transmission, and
such facsimile or other electronic transmission shall be deemed an original.
[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.
INFINITY PHARMACEUTICALS, INC.
By: /s/Seth A. Tasker______________________________
Name: Seth A. Tasker
Title: VP, General Counsel & Secretary

HCR COLLATERAL MANAGEMENT, LLC
By: /s/John Urquhart_______________________________
Name: John Urquhart
Title: Partner

SCHEDULES AND EXHIBITS OMITTED PURSUANT TO ITEM 601(a)(5) of REGULATION S-K
Schedule 2(b) Patents
Schedule 5(a) Form of Financing Statement
Schedule 5(b) Filing Offices
Schedule 5(d) Office Locations, Type and Jurisdiction of Organization
Schedule 5(e) Name Changes
Exhibit I Special Power of Attorney

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