Exhibit 10.2

EXECUTION VERSION

NOVACEA, INC.

COMMON STOCK PURCHASE AGREEMENT

This Common Stock Purchase Agreement (“Agreement”) is made as of May 29, 2007,
by and among Novacea, Inc., a Delaware corporation (the “Company”), and Schering
Corporation, a New Jersey corporation (the “Purchaser”).

RECITALS

A. In connection with that certain License, Development and Commercialization
Agreement, dated of even date herewith (the “LDC Agreement”), by and between the
Company and the Purchaser, the Purchaser wishes to purchase from the Company,
and the Company wishes to sell and issue to the Purchaser, certain shares of the
Company’s Common Stock, par value $0.001 per share (the “Common Stock”), upon
the terms and subject to the conditions set forth in this Agreement.

B. The Company and the Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D, as promulgated by the U.S. Securities and Exchange
Commission (the “Commission”) under the Securities Act of 1933, as amended (the
“Securities Act”).

AGREEMENT

In consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Purchaser hereby agree as follows:

SECTION 1. AUTHORIZATION OF SALE OF SHARES.

The Company has authorized the sale and issuance of certain shares of its Common
Stock, par value $0.001 per share (the “Common Stock”), on the terms and subject
to the conditions set forth in this Agreement. The shares of Common Stock sold
hereunder shall be referred to herein as the “Shares”.

SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.

2.1 Sale of Shares. At the Closing (as defined in Section 3), the Company will
sell to the Purchaser, and the Purchaser will purchase from the Company that
number of Shares of Common Stock equal to (x) $12,000,000, divided by (y) the
Per Share Purchase Price (as defined below), as set forth on Exhibit A hereto.
The “Per Share Purchase Price” shall be equal to the average closing sale price
of the Common Stock as quoted on The Nasdaq Stock Market for the twenty
consecutive Trading Days ending on the Trading Day immediately prior to the date
of this Agreement. A “Trading Day” shall be any day on which The Nasdaq Stock
Market is open and available for at least five hours for the trading of
securities.

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SECTION 3. CLOSING AND DELIVERY.

3.1 Closing. The Closing of the purchase and sale of the Shares pursuant to this
Agreement (the “Closing”) shall be held at the offices of Latham & Watkins LLP,
140 Scott Drive, Menlo Park, California 94025, within ten business days of the
Effective Date (as such term is defined in the LDC Agreement), or on such other
date and place as may be agreed to by the Company and the Purchaser. At or prior
to the Closing, the Purchaser shall execute any related agreements or other
documents required to be executed hereunder, dated as of the date of the Closing
(the “Closing Date”).

3.2 Delivery of the Shares at the Closing. At the Closing, the Company shall
deliver to the Purchaser stock certificates registered in the name of the
Purchaser, or in such nominee name(s) as designated by the Purchaser,
representing the number of shares of Common Stock to be purchased by the
Purchaser at the Closing pursuant to Section 2.1 hereof against payment of the
aggregate purchase price for such shares. The name(s) in which the stock
certificates are to be issued to the Purchaser are set forth in the Investor
Questionnaire in the form attached hereto as Appendix I (the “Investor
Questionnaire”), as completed by the Purchaser, which shall be provided to the
Company no later than five business days prior to the Closing.

SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

The Company hereby represents and warrants as of the date hereof to, and
covenants with, the Purchaser as follows:

4.1 Organization and Standing. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of Delaware,
has full corporate power and authority to own or lease its properties and
conduct its business as presently conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the character of
the property owned or leased or the nature of the business transacted by it
makes qualification necessary, except where the failure to be so qualified would
not have a material adverse effect on the business, properties, financial
condition or results or operations of the Company (a “Company Material Adverse
Effect”). The Company has no subsidiaries or equity interest in any other entity
except for Novacea Europe Limited, a wholly-owned subsidiary of the Company.

4.2 Corporate Power; Authorization. The Company has all requisite corporate
power, and has taken all requisite corporate action, to execute and deliver this
Agreement, sell and issue the Shares and carry out and perform all of its
obligations under this Agreement. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors’ rights generally, (ii) as limited by equitable principles generally,
including any specific

 

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performance, and (iii) as to those provisions of Section 8.3 relating to
indemnity or contribution. The execution and delivery of this Agreement does
not, and the performance of this Agreement and the compliance with the
provisions hereof and the issuance, sale and delivery of the Shares by the
Company will not conflict with, or result in a breach or violation of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of any lien pursuant to the terms of, the Certificate of
Incorporation or Bylaws of the Company or any statute, law, rule (including
federal and state securities laws and the rules and regulations of The NASDAQ
Stock Market (the “Principal Market”)) applicable to the Company or regulation
or any state or federal order, judgment or decree applicable to the Company or
any indenture, mortgage, lease or other material agreement or instrument to
which the Company is a party or any of its properties is subject. No approval of
the shareholders of the Company is required for the Company to issue and deliver
to the Purchaser the Shares.

4.3 Issuance and Delivery of the Shares. The Shares, when issued and paid for in
compliance with the provisions of this Agreement, will be validly issued, fully
paid and nonassessable. The issuance and delivery of the Shares is not subject
to preemptive, co-sale, right of first refusal or any other similar rights of
the stockholders of the Company or any liens or encumbrances. Assuming the
accuracy of the representations made by the Purchaser in Section 5, the offer
and issuance by the Company of the Shares is exempt from registration under the
Securities Act.

4.4 SEC Documents; Financial Statements. The Company has filed in a timely
manner all documents that the Company was required to file with the Commission
under Sections 13, 14(a) and 15(d) the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), since becoming subject to the requirements of the
Exchange Act. As of their respective filing dates (or, if amended prior to the
date of this Agreement, when amended), all documents filed by the Company with
the Commission (the “SEC Documents”) complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder. None of the SEC Documents as of their respective dates
contained any untrue statement of material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents (the “Financial Statements”) comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto. The Financial Statements
have been prepared in accordance with United States generally accepted
accounting principles consistently applied and fairly present the financial
position of the Company at the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal, recurring adjustments).

4.5 Capitalization. All of the Company’s outstanding shares of capital stock
have been duly authorized and validly issued, are fully paid and nonassessable,
and have been issued in compliance with all federal and state securities laws.
As of the date of this Agreement, the authorized capital stock of the Company
consists of 123,104,000 shares of common stock. As of the date of this
Agreement, there are 23,276,738 shares of Common Stock issued and outstanding,
of which no shares are owned by the Company. There are no other shares of any
other class or series of capital stock of the Company issued or outstanding. The
Company has no

 

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capital stock reserved for issuance, except that, as of the date of this
Agreement, there are 3,209,924 shares of Common Stock reserved for issuance
pursuant to options and restricted stock units outstanding on such date pursuant
to the Company’s 2001 Stock Option Plan and 2006 Incentive Award Plan. There are
no bonds, debentures, notes or other indebtedness having general voting rights
(or convertible into securities having such rights) (“Voting Debt”) of the
Company issued and outstanding. Except as stated above, there are no existing
options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments of any character, relating to the issued or unissued
capital stock of the Company, obligating the Company to issue, transfer, sell,
redeem, purchase, repurchase or otherwise acquire or cause to be issued,
transferred, sold, redeemed, purchased, repurchased or otherwise acquired any
capital stock or Voting Debt of, or other equity interest in, the Company or
securities or rights convertible into or exchangeable for such shares or equity
interests or obligations of the Company to grant, extend or enter into any such
option, warrant, call, subscription or other right, agreement, arrangement or
commitment. The issuance of Common Stock or other securities pursuant to any
provision of this Agreement will not give rise to any preemptive rights or
rights of first refusal on behalf of any Person or result in the triggering of
any anti-dilution or other similar rights.

4.6 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states and other jurisdictions in which shares of Common Stock are
offered and/or sold, which compliance will be effected in accordance with such
laws, (b) the filing of a registration statement and all amendments thereto with
the Commission as contemplated by Section 8.1 of this Agreement and
(c) applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended in connection with the transactions contemplated by the LDC
Agreement and this Agreement.

4.7 No General Solicitation. Neither the Company, nor any of its affiliates, nor
any Person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D
promulgated under the Securities Act) in connection with the offer or sale of
the Shares.

4.8 No Integrated Offering. None of the Company, any of its affiliates, or any
Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would require registration of any of the Shares under the
Securities Act or cause this offering of the Shares to be integrated with prior
offerings by the Company for purposes of the Securities Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of the Principal Market.

SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.

5.1 The Purchaser hereby represents and warrants to and covenants with the
Company that:

 

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(a) The Purchaser is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in shares presenting
an investment decision like that involved in the purchase of the Shares,
including investments in securities issued by the Company, and has requested,
received, reviewed and considered all information the Purchaser deems relevant,
including the SEC Documents, in making an informed decision to purchase the
Shares.

(b) The Purchaser is acquiring the Shares pursuant to this Agreement in the
ordinary course of its business and for its own account for investment only and
with no present intention of distributing any of such Shares or any arrangement
or understanding with any other persons regarding the distribution of such
Shares, except in compliance with Section 5.1(c).

(c) The Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the securities purchased hereunder
except in compliance with the Securities Act, applicable blue sky laws, and the
rules and regulations promulgated thereunder.

(d) The Purchaser has, in connection with its decision to purchase the Shares,
relied with respect to the Company and its affairs solely upon the SEC Documents
and the representations and warranties of the Company contained herein.

(e) The Purchaser is an “accredited investor” within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act or a Qualified Institutional
Buyer within the meaning of Rule 144A promulgated under the Securities Act.

(f) The Purchaser has full right, power, authority and capacity to enter into
this Agreement and to consummate the transactions contemplated hereby and has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement. Upon the execution and delivery of this Agreement by the
Purchaser, this Agreement shall constitute a valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors’ rights generally, (ii) as
limited by equitable principles generally, including any specific performance,
and (iii) as to those provisions of Section 8.3 relating to indemnity or
contribution.

(g) The Purchaser is not a broker or dealer registered pursuant to Section 15 of
the Exchange Act (a “registered broker-dealer”) and is not affiliated with a
registered broker dealer. Purchaser is not party to any agreement for
distribution of the Shares.

(h) The Purchaser shall have completed or caused to be completed and delivered
to the Company, no later than five business days prior to the Closing Date, the
Investor Questionnaire for use in preparation of the Registration Statement, and
the answers to the Investment Questionnaire will be true and correct as of the
Closing Date and the effective date of the Registration Statement; provided that
the Purchaser shall be entitled to update such information by providing notice
thereof to the Company before the effective date of such Registration Statement.

 

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5.2 The Purchaser represents, warrants and covenants to the Company that the
Purchaser has not, either directly or indirectly through an affiliate, agent or
representative of the Company, engaged in any transaction in the Securities of
the Company subsequent to December 15, 2006. The Purchaser represents and
warrants to and covenants with the Company that the Purchaser has not engaged
and will not engage in any short sales of the Company’s Common Stock prior to
the effectiveness of the Registration Statement (either directly or indirectly
through an affiliate, agent or representative).

5.3 The Purchaser understands that nothing in this Agreement or any other
materials presented to the Purchaser in connection with the purchase and sale of
the Shares constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Shares.

5.4 Legends. It is understood that the Shares may bear one or more legends in
substantially the following form and substance:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT UPON SATISFACTION
OF CERTAIN CONDITIONS, WHICH ARE SET FORTH IN THAT CERTAIN COMMON STOCK PURCHASE
AGREEMENT DATED MAY 29, 2007, WHICH ALSO CONTAINS VARIOUS OTHER PROVISIONS
AFFECTING THESE SECURITIES, BINDING UPON TRANSFEREES HEREOF. INFORMATION
CONCERNING THESE RESTRICTIONS AND PROVISIONS MAY BE OBTAINED FROM THE
CORPORATION OR ITS LEGAL COUNSEL.”

In addition stock certificates representing the Shares may contain:

(a) Any legend required by the laws of the State of California, including any
legend required by the California Department of Corporations.

(b) Any legend required by the blue sky laws of any other state to the extent
such laws are applicable to the sale of the Shares hereunder.

5.5 Restricted Securities. The Purchaser understands that the Shares are
characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Shares may be resold without registration under the Securities Act only in
certain limited circumstances. In this connection, the Purchaser represents that
it is familiar with Commission Rule 144, as presently in effect, and understands
the resale limitations imposed thereby and by the Securities Act.

 

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SECTION 6. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING.

The Company’s obligation to complete the sale and issuance of the Shares and
deliver shares of Common Stock to the Purchaser shall be subject to the
following conditions to the extent not waived by the Company:

6.1 Receipt of Payment. The Company shall have received payment, by wire
transfer of immediately available funds, in the full amount of the purchase
price for the Shares being purchased by the Purchaser at the Closing as set
forth on Exhibit A hereto.

6.2 Representations and Warranties. The representations and warranties made by
the Purchaser in Section 5 hereof shall be true and correct in all material
respects when made and shall be true and correct in all material respects on the
Closing Date.

SECTION 7. CONDITIONS TO PURCHASER’S OBLIGATIONS AT THE CLOSING.

The Purchaser’s obligation to accept delivery of the Shares and to pay for the
Shares shall be subject to the following conditions to the extent not waived by
the Purchaser:

7.1 Representations and Warranties Correct. The representations and warranties
made by the Company in Section 4 hereof shall be true and correct in all
material respects when made, and any failure of such representations and
warranties to be true and correct in all material respects after the date hereof
shall not have resulted in a Company Material Adverse Effect as of the Closing
Date (except to the extent any such representations and warranties are made as
of a particular date, in which case such representations and warranties shall
have been true and correct as of the date so specified).

7.2 Compliance Certificate. The Purchaser shall have received a certificate
signed by an officer of the Company certifying to the fulfillment of the
conditions set forth in Section 7.

SECTION 8. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.

8.1 Registration Procedures and Expenses. The Company is obligated to do the
following:

(a) The Company shall use its commercially reasonable efforts to prepare and
file with the Commission, within 60 days of the Closing Date, a resale
registration statement on Form S-3 (or such other resale registration form that
the Company may then be eligible to use) in order to register with the
Commission the resale by the Purchaser, from time to time, of the Shares through
Nasdaq or the facilities of any national securities exchange on which the
Company’s Common Stock is then traded, or in privately-negotiated transactions
(a “Registration Statement”). The Company shall provide the Purchaser and its
counsel a reasonable opportunity to review and comment upon the Registration
Statement prior to its filing with the Commission, and shall consider and act in
good faith with respect to the incorporation of any changes in the Registration
Statement reasonably proposed by the Purchaser. The Company shall use its
commercially reasonable efforts to cause such Registration Statement to be
declared effective as soon thereafter as reasonably practicable.

 

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(b) If such a Registration Statement has been filed, the Company shall use its
commercially reasonable efforts to prepare and file with the Commission (i) such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith, (ii) such reports with the Commission and (iii) such
other filings required by the Commission, in each case as may be necessary to
keep the Registration Statement effective and not misleading until the earliest
of (A) the second anniversary date of the Closing Date, or (B) such time as all
of the Shares held by the Purchaser can be sold within a given three-month
period pursuant to Rule 144 under the Securities Act. Notwithstanding the
foregoing, following the effectiveness of the Registration Statement, the
Company may, at any time, suspend the effectiveness of the Registration
Statement for up to an aggregate of 60 days, as appropriate (a “Suspension
Period”), by giving notice to the Purchaser, if the Company shall have
determined that the Company may be required to disclose any material corporate
development. Notwithstanding the foregoing, the Company may not suspend the
effectiveness of the Registration Statement more than twice during any
twelve-month period. Each Purchaser agrees that, upon receipt of any notice from
the Company of a Suspension Period, such Purchaser will not sell any Shares
pursuant to the Registration Statement until (i) such Purchaser is advised in
writing by the Company that the use of the applicable prospectus may be resumed,
(ii) such Purchaser has received copies of any additional or supplemental or
amended prospectus, if applicable, and (iii) such Purchaser has received copies
of any additional or supplemental filings which are incorporated or deemed to be
incorporated by reference in such prospectus.

(c) The following term used in this Section 8.1(c) shall have the following
definitions:

(i) “Effectiveness Deadline” means, with respect to the Registration Statement
required to be filed pursuant to Section 8.1(a) hereof, the first anniversary of
the Effective Date; provided that if the Effectiveness Deadline falls on a
Saturday, Sunday or other day that the Commission is closed for business, the
Effectiveness Deadline shall be extended to the next business day on which the
Commission is open for business.

If: (i) a Registration Statement filed or required to be filed hereunder is not
declared effective by the Commission (or otherwise does not become effective) by
the Effectiveness Deadline; or (ii) after the Effectiveness Deadline, a
Registration Statement ceases for any reason to remain continuously effective as
to all Shares for which it is required to be effective or the Purchaser are
otherwise not permitted to utilize the prospectus therein to resell such Shares
for more than 20 consecutive calendar days or more than an aggregate of 60
calendar days in any 12-month period (which need not be consecutive), (any such
failure or breach in clauses (i) through (ii) above being referred to as an
“Event,” and, for purposes of clause (i), the date on which such Event occurs,
or for purposes of clause (ii), the date on which such 20 or 60 calendar period
(as applicable) is exceeded, being referred to as “Event Date”), then in
addition to any other rights the Purchaser may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such date)
until the applicable Event is cured, the Company shall pay to the Purchaser an
amount in cash, as partial liquidated damages and not as a penalty (“Liquidated
Damages”), equal to 1.0% of the aggregate purchase price paid by the Purchaser
pursuant to the Purchase Agreement for any Shares then held by the Purchaser;
provided that all periods shall be

 

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tolled in respect of any delay that results from a pending request by the
Company to the Commission for confidential treatment of all or a portion of the
LDC Agreement and any agreements or amendments related thereto. If the Company
fails to pay any partial Liquidated Damages pursuant to this Section in full
within seven business days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the
date such partial Liquidated Damages are due until such amounts, plus all such
interest thereon, are paid in full. The partial Liquidated Damages pursuant to
the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an Event. For the avoidance of doubt, the Company
shall not be liable hereunder for any Liquidated Damages in respect of any
periods following the second anniversary of the Effective Date.

(d) In order to facilitate the public sale or other disposition of all or any of
the Shares by the Purchaser, the Company shall furnish to the Purchaser with
respect to the Shares registered under the Registration Statement such number of
copies of prospectuses, prospectus supplements, preliminary prospectuses and
final prospectuses as the Purchaser reasonably requests in conformity with the
requirements of the Securities Act.

(e) The Company shall file any documents required of the Company for normal blue
sky clearance in states specified in writing by the Purchaser; provided,
however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented as of the date of this Agreement.

(f) Other than fees and expenses, if any, of counsel or other advisers to the
Purchaser, which fees and expenses shall be borne by the Purchaser, the Company
shall bear all expenses (exclusive of any brokerage fees, underwriting discounts
and commissions) in connection with the procedures in paragraphs (a) through
(e) of this Section 8.1.

(g) With a view to making available to the Purchaser the benefits of Rule 144
promulgated under the Securities Act (“Rule 144”) and any other rule or
regulation of the Commission that may at any time permit the Purchaser to sell
Shares to the public without registration or pursuant to registration, the
Company covenants and agrees to use its commercially reasonable efforts to:
(i) make and keep public information available, as those terms are understood
and defined in Rule 144, until the earlier of (A) the second anniversary of the
Closing Date or (B) such date as all of the Shares shall have been resold;
(ii) file with the Commission in a timely manner all reports and other documents
required of the Company under the Exchange Act; and (iii) furnish to the
Purchaser upon request, as long as the Purchaser owns any Shares, (A) a written
statement by the Company that it has complied with the reporting requirements of
the Exchange Act, (B) a copy of the most recent annual or quarterly report of
the Company, and (C) such other information as may be reasonably requested in
order to avail any Purchaser of any rule or regulation of the Commission that
permits the selling of any such Shares without registration under the Securities
Act.

8.2 Transfer of Shares After Registration. The Purchaser agrees that it will not
effect any disposition of the Shares that would constitute a sale within the
meaning of the Securities Act, except:

 

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(a) pursuant to the Registration Statement, in which case the Purchaser shall
submit the certificates evidencing the Shares to the Company’s transfer agent,
accompanied by a separate certificate executed by the Purchaser or by an officer
of, or other authorized person designated by, the Purchaser, to the effect that
(A) the Shares have been sold in accordance with the Registration Statement and
(B) the requirement of delivering a current prospectus has been satisfied; or

(b) in a transaction exempt from registration under the Securities Act, in which
case the Purchaser shall, prior to effecting such disposition, submit to the
Company an opinion of counsel in form and substance reasonably satisfactory to
the Company to the effect that the proposed transaction is in compliance with
the Securities Act.

8.3 Indemnification. As used in this Section 8.3 the following terms shall have
the following respective meanings:

(a) “Selling Stockholder” shall mean the Purchaser and any transferee of the
Purchaser who is entitled to resell Shares pursuant to the Registration
Statement;

(b) “Registration Statement” shall include any final prospectus, exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section 8.1; and

(c) “Untrue Statement” shall include any untrue statement or alleged untrue
statement, or any omission or alleged omission to state in the Registration
Statement a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

The Company agrees to indemnify and hold harmless each Selling Stockholder from
and against any losses, claims, damages or liabilities to which such Selling
Stockholder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any Untrue Statement on or
after the effective date of the Registration Statement, or on or after the date
of any prospectus or prospectus supplement or the date of any sale by the
Purchaser thereunder, or arise out of any failure by the Company to fulfill any
undertaking included in the Registration Statement and the Company will
reimburse such Selling Stockholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the Company shall not be
liable to such Selling Stockholder in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an Untrue
Statement made in such Registration Statement in reliance upon and in conformity
with information furnished to the Company by or on behalf of such Selling
Stockholder in writing specifically for use in preparation of the Registration
Statement, or the failure of such Selling Stockholder to comply with the
covenants and agreements contained in Section 8.1 or 8.2 hereof respecting sale
of the Shares or any statement or omission in any Prospectus that is corrected
in any subsequent prospectus that was delivered to the Selling Stockholder prior
to the pertinent sale or sales by the Selling Stockholder.

 

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The Purchaser hereby agrees to indemnify and hold harmless the Company (and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration Statement
and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 8.1 or 8.2 hereof
respecting sale of the Shares, or any Untrue Statement contained in the
Registration Statement on or after the effective date thereof, or in any
prospectus supplement as of its issue date or date of any sale by the Purchaser
thereunder, if such Untrue Statement was made in reliance upon and in conformity
with information furnished by or on behalf of the Purchaser in writing
specifically for use in preparation of the Registration Statement, and the
Purchaser will reimburse the Company (or such officer, director or controlling
person), as the case may be, for any legal or other expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim.

Promptly after receipt by any indemnified person of a notice of a claim or the
beginning of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 8.3, such indemnified person shall
notify the indemnifying person in writing of such claim or of the commencement
of such action, and, subject to the provisions hereinafter stated, in case any
such action shall be brought against an indemnified person and such indemnifying
person shall have been notified thereof, such indemnifying person shall be
entitled to participate therein, and, to the extent it shall wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
person. After notice from the indemnifying person to such indemnified person of
its election to assume the defense thereof, such indemnifying person shall not
be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof;
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate, in the opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel for all
indemnified parties.

8.4 Termination of Conditions and Obligations. The conditions precedent imposed
by Section 5 or this Section 8 upon the transferability of the Shares shall
cease and terminate as to any particular number of the Shares when such Shares
shall have been sold or otherwise disposed of in accordance with the intended
method of disposition set forth in the Registration Statement covering such
Shares or at such time as an opinion of counsel satisfactory to the Company
shall have been rendered to the effect that such conditions are not necessary in
order to comply with the Securities Act.

8.5 Information Available. So long as the Registration Statement is effective
covering the resale of Shares owned by the Purchaser, the Company will furnish
to the Purchaser, upon reasonable request, an adequate number of copies of the
prospectuses and supplements to supply to any other party requiring such
prospectuses.

 

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8.6 Plan of Distribution. The Purchaser agrees to distribute the Shares in
compliance with the plan of distribution set forth in the Registration
Statement.

SECTION 9. BROKER’S FEE.

The Company and the Purchaser each hereby represent that there are no brokers or
finders entitled to compensation in connection with the sale of the Shares, and
shall indemnify each other for any such fees for which they are responsible.

SECTION 10. NOTICES.

All notices, requests, consents and other communications hereunder shall be in
writing, shall be sent by confirmed facsimile or mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, and shall be deemed given when so sent in the case of
facsimile transmission, or when so received in the case of mail or courier, and
addressed as follows:

(a) if to the Company, to:

Novacea, Inc.

601 Gateway Boulevard, Suite 800

South San Francisco, California 94080

Attention: Chief Executive Officer

Facsimile: (650) 228-1088

with a copy (not constituting notice) mailed to:

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Attention: Alan C. Mendelson and Mark V. Roeder

Facsimile: (650) 463-2600

or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and

(b) if to the Purchaser, at the address as set forth at the end of this
Agreement, or at such other address or addresses as may have been furnished to
the Company in writing.

SECTION 11. MISCELLANEOUS.

11.1 Waivers and Amendments. Neither this Agreement nor any provision hereof may
be changed, waived, discharged, terminated, modified or amended except upon the
written consent of the Company and the Purchaser.

11.2 Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.

 

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11.3 Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

11.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware as applied to contracts
entered into and performed entirely in Delaware by Delaware residents, without
regard to conflicts of law principles.

11.5 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.

11.6 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.

11.7 Entire Agreement. This Agreement and other documents delivered pursuant
hereto, including the exhibit, constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.

11.8 Payment of Fees and Expenses. Each of the Company and the Purchaser shall
bear its own expenses and legal fees incurred on its behalf with respect to this
Agreement and the transactions contemplated hereby. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney’s fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.

[signature pages follow]

 

13

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.

 

NOVACEA, INC.

By:

  /s/ John P. Walker

Name:

  John P. Walker

Title:

  Chairman—Interim CEO

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PURCHASER:

 

SCHERING CORPORATION

By:

 

/s/ Michael J. DuBois

Name:

 

Michael J. DuBois

Title:

 

Vice President

2000 Galloping Hill Road Kenilworth, NJ 07033 Attention: Senior Vice President,
Global Licensing Fax No.: (908) 298-7366 with copies to: Attention: Senior Legal
Director, Licensing Fax No.: (908) 298-2739

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EXHIBIT A

 

Name and Address

  

Per Share

Purchase Price

  

Number of

Shares

SCHERING CORPORATION

2000 Galloping Hill Road Kenilworth, NJ 07033

   $ 8.049    1,490,868

Total:

      1,490,868