Document:

Settlement Agreement and Mutual General Release, dated as of February 14, 2006

 EXHIBIT 10.20 
 EXECUTION COPY 
 SETTLEMENT AGREEMENT AND
MUTUAL GENERAL RELEASE 
 This Settlement Agreement and Mutual General Release
(“Agreement”) is made and entered into as of the 14th day of February, 2006 (the “Effective
Date”), by Raymond F. Schinazi, Ph.D. (“Dr. Schinazi”), and RFS Partners, L.P., a Georgia limited partnership (the “Partnership”), and Raymond F. Schinazi 2005 Qualified Annuity Trust, a Georgia trust (the
“Trust”), and RFS Pharma LLC, a Georgia limited liability company (“RFS Pharma”), each having an address at 2881 Peachtree Road, N.E., Unit 2204, Atlanta, Georgia 30305, USA (collectively, the “Schinazi Parties”) and
Pharmasset, Inc., a Delaware corporation having its principal address at 303-A College Road East, Princeton, NJ 08540, USA, and formerly known as Pharmasset, Ltd., a Barbados corporation (the “Company”) and the stockholders of the Company
listed on Exhibit A hereto (collectively, the “Investors,” and together with the Company, the “Company Parties”). The Schinazi Parties and the Company Parties are each sometimes hereinafter referred to as a
“Party,” and collectively, as the “Parties.” 
 RECITALS 
 WHEREAS, Dr. Schinazi and the Investors are stockholders of the Company, and are parties to a Second Amended and Restated Stockholders’
Agreement dated as of August 4, 2004, as amended (the “Stockholders’ Agreement”); 
 WHEREAS, Dr. Schinazi has
served as a director of the Company from 1998 until June 2005, and as an executive director of the Company from 1998 until June 2004; 
 WHEREAS, Dr. Schinazi is currently the controlling member and majority equity owner of RFS Pharma; 

 WHEREAS, Dr. Schinazi and the Company entered into a Scientific Advisor Agreement dated, as of
July 15, 1998 (the “Advisor Agreement”); 
 WHEREAS, RFS Pharma is currently party to a license agreement with Emory
University and the University of Georgia Research Foundation, Inc. (collectively, the “Universities”) with respect to Amdoxovir (“DAPD”) and Dioxolane Thymine (“DOT”), and their derivatives (the “University License
Agreement”); and 
 WHEREAS, disputes have arisen between the Parties concerning DAPD, DOT and other matters, and the Parties desire to
resolve such disputes (the “Disputes”) on the terms and subject to the conditions stated herein. 
 NOW, THEREFORE, for and in
consideration of the mutual promises, covenants, representations, warranties and agreements contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the Parties agree as
follows: 
 TERMS AND CONDITIONS 
  

	 	1.0	Settlement Obligations 

 1.1 On the Effective Date,
the parties signatory thereto will deliver executed copies of the following agreements: 
  

	 	a.	The License Agreement in the form attached hereto as Exhibit B executed by the Company and RFS Pharma. 

  

	 	b.	The Mutual Termination of Lease Agreement in the form attached hereto as Exhibit C executed by the Company and CS Family, LLC, a Georgia limited liability company.

  

	 	c.	The Waiver Agreement and Second Amendment to the Stockholders’ Agreement in the form attached hereto as Exhibit D executed by Dr. Schinazi, the Company, the Investors and
the other stockholders named as signatories thereto. 

  

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 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE 

	 	d.	The Joinder Agreements in the forms attached hereto as Exhibits E and F executed by the Company and Dr. Schinazi, the Partnership and the Trust. 

  

	 	e.	Each of the Lock-up Agreements in the forms attached hereto as Exhibits G, H, and I executed by each of Dr. Schinazi, the Partnership and the Trust, respectively.

 1.2 On the Effective Date, Dr. Schinazi will surrender the Company share certificate no. C 8 in his name, for the
purpose of reissuing share certificates in accordance with Section 1.3. 
 1.3 On the Effective Date, the Company will deliver to
Dr. Schinazi share certificates in the following names and amounts: (a) Raymond F. Schinazi — 1,564,556 common shares; (b) RFS Partners, L.P. — 1,000,000 common shares; and (c) Raymond F. Schinazi 2005 Qualified Annuity
Trust — 1,000,000 common shares. 
 1.4 On the Effective Date, the Company will deliver by wire or bank check in immediately available
funds to (i) CS Family, LLC, the amount of $1,398,000, pursuant to the Mutual Termination of Lease Agreement and (ii) RFS Pharma LLC the amount of $400,000, pursuant to the License Agreement. 
 1.5 The Company agrees to reimburse Dr. Schinazi for up to $100,000 of reasonably documented legal fees incurred by Dr. Schinazi in connection
with the negotiation of the transactions contemplated by this Agreement, by wire or bank check in immediately available funds to Dr. Schinazi promptly upon receipt of reasonably detailed documentation supporting such legal fees, on or after the
Effective Date. 
 1.6 Dr. Schinazi agrees to use reasonable efforts to assist the Company, as requested, to effectuate any future
financings, including the Company’s proposed initial public offering. Such efforts shall be limited to executing, filing, or completing any customary documents or instruments that the Company reasonably determines it requires Dr. Schinazi
to 

  

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 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE 

 
deliver, or as may be reasonably requested by the managing underwriter of any public offering, including without limitation any filings required under the
Securities Exchange Act of 1934, as amended, and any stockholder or NASD questionnaires, but specifically excluding any requirement to deliver a lock-up agreement other than (x) the lock-up agreement in the form attached hereto as Exhibit G in
connection with the Company’s initial public offering and (y) as may be required by Sections 2.2(c) and 2.12 of the Stockholders’ Agreement. The Parties acknowledge and agree that this Section 1.5 shall not (i) require
Dr. Schinazi to relinquish any rights provided under this Agreement or any other agreement to which the Company and Dr. Schinazi are parties or (ii) require Dr. Schinazi to make false or misleading statements or statements that
are injurious to Dr. Schinazi’s interests or reputation. 
 1.7 The Company agrees to deliver to Dr. Schinazi any disclosure
related to the Schinazi Parties and the Confidential Matters (as defined below) that the Company intends to include in its registration statement on Form S-1, including any exhibits that relate to Confidential Matters, within a reasonable period of
time prior to the Effective Date of this Agreement. Additionally, the Company agrees to deliver to Dr. Schinazi drafts of any amendments to such registration statement that include changes to such disclosure, including any exhibits that relate
to Confidential Matters which have not otherwise been provided, prior to filing such amendments with the Securities and Exchange Commission (the “SEC”); provided, however, that Dr. Schinazi acknowledges and agrees that
the Company may make any such amended filing with the SEC at any time without the prior approval of Dr. Schinazi being required. 
 1.8
The Company and the Schinazi Parties agree that, as of the Effective Date, the Assignment and Non-Disclosure Agreement and the Standstill and Tolling Agreement by and 

  

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between the parties thereto, both dated as of July 29, 2005, shall be terminated and of no further force or effect. The Company and the Schinazi Parties
also acknowledge and agree that the Advisor Agreement has terminated. The Company and the Schinazi Parties have no further obligations under any of the agreements referenced in this Section 1.8, and such agreements are superseded by this
Agreement. 
  

	 	2.0	Mutual Release of Claims 

 2.1 The Schinazi
Parties’ Release The Schinazi Parties, and each of them, on their own behalf and on behalf of their current and former employees, representatives, companies, corporations, business entities, officers, directors, shareholders, partners,
joint venturers, insurers, trustees, executors, creditors, agents, attorneys, heirs, dependents, predecessors, successors, assigns, parents, subsidiaries, affiliates, related companies, and controlling persons, past and present, and each of them,
hereby release and forever discharge the Company Parties, and all of the Company Parties’ respective former, current and future owners, members, partners, shareholders, officers, directors, employees, agents, representatives, attorneys,
companies, corporations, business entities, joint venturers, insurers, trustees, executors, creditors, heirs, dependents, predecessors, successors, assigns, parents, subsidiaries, affiliates, related companies, and controlling persons, and each of
them (collectively, the “Company Released Parties”), of and from all claims, liabilities, demands, damages, actions, and causes of action, at law or in equity, of every kind and nature, including claims for attorneys’ fees or costs,
whether known or unknown, fixed or contingent, existing, claimed to exist or which may hereafter arise from the beginning of time until the Effective Date of this Release, except in each case for the Reserved Claims (as defined below) (collectively,
“Released Claims”). 
  

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 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE 

 2.2 The Company Parties’ Release The Company Parties, and each of them, on their own behalf
and on behalf of their current and former employees, representatives, companies, corporations, business entities, officers, directors, shareholders, partners, joint venturers, insurers, trustees, executors, creditors, agents, attorneys, heirs,
dependents, predecessors, successors, assigns, parents, subsidiaries, affiliates, related companies, and controlling persons, past and present, and each of them, hereby release and forever discharge the Schinazi Parties, and all of the Schinazi
Parties’ respective former, current and future owners, members, partners, shareholders, officers, directors, employees, agents, representatives, attorneys, companies, corporations, business entities, joint venturers, insurers, trustees,
executors, creditors, heirs, dependents, predecessors, successors, assigns, parents, subsidiaries, affiliates, related companies, and controlling persons, and each of them (collectively, the “Schinazi Released Parties”), of and from all
claims, liabilities, demands, damages, actions, and causes of action, at law or in equity, of every kind and nature, including claims for attorneys’ fees or costs, whether known or unknown, fixed or contingent, existing, claimed to exist or
which may hereafter arise from the beginning of time until the Effective Date of this Release, except in each case for the Reserved Claims (as defined below) (collectively, “Released Claims”). 
 2.3 Reserved Claims The Parties do not release, and hereby expressly reserve, the following claims that each may have against the other (the
“Reserved Claims”): 
  

	 	a.	Claims arising under or to enforce the terms of this Settlement Agreement, including claims that arise after the Effective Date of the Settlement Agreement to enforce the rights of
any of the Parties under the terms of the agreements incorporated hereby and attached as Exhibits B through I, including Claims reserved in Exhibit C. 

  

	 	b.	 Claims for contribution or indemnification (under the Company’s by-laws or otherwise) in connection with any claims, actions, suits or demands (including
shareholder class actions or derivative actions or any tax- 

  

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related matter or any patent, license, sublicense, assignment, confidentiality agreement or other agreement (oral or written) granting rights to any patent,
intellectual property, compound or other property consented to on behalf of the Company at any time prior to June 30, 2005) made against any one or more of the Parties by any person or entity that is not one or more of the Parties (“Third
Party Claims”). In this connection, no right to coverage under any directors’ and officers’ liability insurance is released by the Parties. 

 The Parties acknowledge that claims or facts in addition to or different from those which are now known or believed to exist may later be discovered with
respect to any claim, liability, demand, damage, action or cause of action that they, or any of them, may possess against each other, or their respective current and former employees, representatives, companies, corporations, business entities,
officers, directors, shareholders, partners, joint venturers, insurers, trustees, executors, creditors, agents, attorneys, heirs, predecessors, successors, assigns, parents, subsidiaries, affiliates, related companies, and controlling persons, past
and present, and each of them, but each Party nevertheless intends this release to be effective as a full, general release. 
  

	 	3.0	Third Party Claims 

 The Parties each agree not to
encourage, induce or assist any person or entity to threaten, file or prosecute any Third Party Claims or even suggest that they do so, except as required by law or court order. The Parties agree to make reasonable efforts to assist each other in
defending against Third Party Claims. 
  

	 	4.0	Responsibility for Fees and Costs 

 Except as
provided in Section 1.5 hereof, each of the Parties shall bear and be responsible for his or its own attorneys’ fees and costs incurred through the Effective Date. 
  

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	 	5.0	Denial of Liability 

 5.1 Each Party denies any
liability to any other Party, or any other individual or entity, concerning the Disputes. Each Party acknowledges that each other Party continues to deny liability, disclaim responsibility, and dispute allegations asserted by any other Party.

  

	 	6.0	Warranties 

 6.1 Each of the Parties respectively
represents and warrants that, other than to the extent reflected in any of the agreements attached hereto as Exhibits B through I, no other person or entity has claimed or now claims any interest in the subject of this Agreement (including any of
the agreements incorporated hereto as Exhibits B through I), and that no right, claim, liability, demand, damage, action or cause of action, or any part thereof, of any kind or nature covered by this Agreement, has been sold, assigned, granted or
otherwise transferred to any other person or entity. 
 6.2 Each of the Parties represents and warrants that each has read and understands
this Agreement, and that no promise, inducement, representation or agreement not expressly set forth herein has been made to them in connection with this Agreement. The Parties agree that, prior to the execution of this Agreement, they have apprised
themselves of sufficient relevant data, through resources of their own selection, and have consulted with their respective counsel, in order that they might intelligently exercise their judgment in deciding whether to execute this Agreement. The
Parties agree that this Agreement is executed voluntarily and without duress or undue influence of any nature whatsoever. 
 6.3 Each
Schinazi Party represents and warrants to the Company, jointly and severally, and each of the Company Parties represents and warrants to each Schinazi Party, that: (i) such representing Party has the proper power and authority to enter into and
perform this 

  

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Agreement and, as relevant, any of the incorporated agreements; (ii) that such person signing this Agreement and the incorporated agreements on its
behalf has been duly authorized and directed to do so; (iii) this Agreement has been duly executed and delivered by such Party and is, and each incorporated agreement to which such Party will be a party as of the Effective Date will be, duly
executed and delivered by such Party and will be, the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy law and other
laws of general applicability affecting creditors’ rights and by general principles of equity; and (iv) neither the execution and delivery of this Agreement or any of the incorporated agreements to which it is or will be a party as of the
Effective Date, nor the performance of any of the transactions contemplated hereby or thereby, nor compliance with or fulfillment of the terms, conditions and provisions hereof or thereof will (x) violate any provision of its certificate of
incorporation, articles of organization, bylaws or other charter documents, or (y) violate, require consent of any person or entity pursuant to, or constitute a default under any law, ruling, regulation or other restriction of the Universities
or any governmental body, or (z) constitute a breach or default under any contract or agreement to which it is a party. 
  

	 	7.0	Enforcement of Agreement 

 It is specifically
understood and agreed that this Agreement may be pleaded as a full and complete defense to and may be used as the basis for an injunction against any action, arbitration, suit or other proceeding that may be instituted, prosecuted or attempted in
breach of this Agreement. In the event that litigation is necessary to enforce a provision or provisions of this Agreement, all costs and attorneys’ fees shall be paid by the non-prevailing Party or Parties to the prevailing Party or Parties.

  

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 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE 

	 	8.0	Confidentiality and Public Statements 

 8.1 Except
as set forth in Section 8.2 and Section 8.3, the terms and provisions, and the existence, of this Agreement (including the agreements incorporated hereby), and the disputes as between the Company Parties and the Schinazi Parties (the
“Confidential Matters”), shall be kept confidential by the Parties; provided, however, that information shall no longer be a “Confidential Matter” once it has been disclosed publicly either by (1) by any Party
hereto pursuant to Section 8.3 or (2) by any third party provided that such information was not obtained from any Party hereto in violation of this Section 8. 
  

	 	8.2	The Parties agree not to: 

  

	 	(i)	divulge any Confidential Matters, except as set forth in Section 8.3; or 

  

	 	(ii)	make or knowingly cause or permit to be made any public statement or communication, whether or not a Confidential Matter, concerning any of the Parties or their respective
businesses that is untrue or defamatory; or 

  

	 	(iii)	make or knowingly cause or permit to be made any public statement or communication, whether or not a Confidential Matter, concerning any of the Parties or their respective
businesses that, while true, disparages or in any way impugns the reputation of any of the Parties, their respective subsidiaries and affiliates, together with their respective officers, directors, partners, shareholders, employees and agents, or
any of the foregoing’s respective businesses, except as set forth in Section 8.3 (the statements described in this clause (iii), together with the Confidential Matters, being hereinafter referred to as the “Confidential
Communications”). 

 Notwithstanding the foregoing, nothing in this Section shall prevent the Parties or any other person from making any
truthful statement responding to incorrect, disparaging or derogatory public statements to the extent necessary to correct or refute such public statements. 
 8.3 No Party shall include any statement concerning Confidential Communications in any press release, any public filing with the SEC or other public statement except as and to the extent that (1) any such
statement shall, in good faith, be required by 
  

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applicable law, judicial process or regulatory requirements, or (2) such statement shall have been approved by the other relevant Party or Parties after
having a reasonable opportunity to review (which approval shall not be unreasonably withheld, conditioned or delayed). Nothing contained in the foregoing shall preclude reasonable non-public communications or disclosures to third parties necessary
to implement the provisions of this Agreement or to comply with applicable accounting, securities and other regulatory obligations. 
  

	 	9.0	Good Faith 

 This Agreement represents a good faith
compromise of disputed claims and is not and shall not be considered, regarded or described as an admission of liability or responsibility by any of the Parties. 
  

	 	10.0 	Entire Agreement; Modification and Amendment 

 This
Agreement constitutes the entire agreement between the Parties, and supersedes any and all prior oral and written agreements and understandings. The Agreement may not be altered, amended, or modified or otherwise changed in any respect whatsoever
except by a writing duly executed by the Parties or their authorized representatives. 
  

	 	11.0 	Titles, Captions, and Provisions 

 11.1 All of the
provisions of this Agreement are contractual and not mere recitals, and shall be considered severable, such that if any provision or part hereof shall at any time be held under any law or ruling to be invalid, such provision or part shall remain in
force to the extent allowed by law, and all other provisions shall remain in full force and effect and enforceable. 
 11.2 The Recitals set
forth above shall be merged in and is part of this Agreement, and the titles or captions contained in this Agreement are inserted only as a matter of 

  

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convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision herein. 

 

	 	12.0 	Construction and Jurisdiction 

 This Agreement shall
be construed and enforced according and pursuant to the laws of the State of New York, without regard to the application of conflicts of law principles. Any claims or disputes arising out of or related to this Agreement shall be brought in the state
or federal courts located in Fulton County, Georgia. The Parties agree and consent to exclusive jurisdiction and venue in the state or federal courts of Fulton County, Georgia to enforce the provisions of this Agreement or for the resolution of any
claims or disputes that arise from or are related to this Agreement. 
  

	 	13.0 	Drafting and Interpretation 

 The Parties agree that
the terms and conditions expressed herein have been negotiated and that no ambiguity shall be construed against any Party. 
  

	 	14.0 	Execution and Counterparts 

 This Agreement may be
executed in one or more counterparts and by facsimile signatures, which, taken together, shall constitute a single document representing the whole of the agreement between the Parties. 
  

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 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth in the
first paragraph hereof. 
  

			
	PHARMASSET, INC.
		
	 By:
	 	 /s/ P. Schaefer Price

	 Name:
	 	 P. Schaefer Price

	 Title:
	 	 President and Chief Executive Officer

	
	 /s/ Raymond Schinazi

	Raymond F. Schinazi, Ph.D.
	
	RFS PARTNERS, L.P.
	
	 By: RFS & Associates, LLC

		
	 By:
	 	 /s/ Raymond Schinazi

	 Name:
	 	 Raymond F. Schinazi, Ph.D.

	 Title:
	 	 Manager

	
	RAYMOND F. SCHINAZI 2005 QUALIFIED ANNUITY TRUST
		
	 By:
	 	 /s/ Raymond Schinazi

	 Name:
	 	 Raymond F. Schinazi, Ph.D.

	 Title:
	 	 Trustee

	
	RFS PHARMA LLC
		
	 By:
	 	 /s/ Raymond Schinazi

	 Name:
	 	 Raymond F. Schinazi, Ph.D.

	 Title:
	 	 Director

  

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	BURRILL LIFE SCIENCES CAPITAL FUND, L.P.
	
	By: Burrill & Company (Life Sciences GP), LLC, its General Partner
		
	 By:
	 	 /s/ Steven Burrill

	 Name:
	 	 G. Steven Burrill

	 Title:
	 	 Managing Member

	
	BURRILL INDIANA LIFE SCIENCES CAPITAL FUND, L.P.
	
	By: Burrill and Company (Indiana GP), LLC, its General Partner
		
	 By:
	 	 /s/ Steven Burrill

	 Name:
	 	 G. Steven Burrill

	 Title:
	 	 Managing Member

	
	MPM BIOVENTURES III, L.P.
	
	By: MPM BioVentures III GP, L.P., its General Partner
	
	By: MPM BioVentures III LLC, its General Partner
		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

  

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	BB BIOVENTURES L.P.
	
	By: BAB BioVentures L.P., its General Partner
	
	By: BAB BioVentures N.V., its General Partner
		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

	
	MPM BIOVENTURES PARALLEL FUND, L.P.
	
	 By: MPM BioVentures I LP, its General Partner

	
	 By: MPM BioVentures I LLC, its General Partner

		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

	
	MPM ASSET MANAGEMENT INVESTORS 1999 LLC
		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

	
	MPM BIOVENTURES III-QP, L.P.
	
	By: MPM BioVentures III GP, L.P., its General Partner
	
	By: MPM BioVentures III LLC, its General Partner
		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

  

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	MPM BIOVENTURES III GMBH & CO. BETEILIGUNGS KG
	
	By: MPM BioVentures III GP, L.P., in its capacity as the Managing Limited Partner
	
	By: MPM BioVentures III LLC, its General Partner
		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

	
	MPM BIOVENTURES III PARALLEL FUND, L.P.
	
	By: MPM BioVentures III GP, L.P., its General Partner
	
	By: MPM BioVentures III LLC, its General Partner
		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

	
	MPM ASSET MANAGEMENT INVESTORS 2004 BVIII LLC
		
	 By:
	 	 /s/ Ansbert Gadicke

	 Name:
	 	 Ansbert Gadicke

	 Title:
	 	 General Partner

  

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	TVM V LIFE SCIENCE VENTURES GMBH & CO. KG
		
	 By:
	 	 /s/ Mark C. Cipriano

	 Name:
	 	 Mark C. Cipriano

	 Title:
	 	 Managing Limited Partner

		
	 By:
	 	 /s/ David Poltack

	 Name:
	 	 David Poltack

	 Title:
	 	 Managing Limited Partner

	
	TVM IV GMBH & CO. KG
		
	 By:
	 	 /s/ Mark C. Cipriano

	 Name:
	 	 Mark C. Cipriano

	 Title:
	 	 Authorized Signatory

		
	 By:
	 	 /s/ David Poltack

	 Name:
	 	 David Poltack

	 Title:
	 	 Authorized Signatory

	
	MDS LIFE SCIENCES TECHNOLOGY FUND II NC LIMITED PARTNERSHIP
	
	By: MDS LSTF II (NCGP) Inc., its General Partner
		
	 By:
	 	 /s/ Graysanne Bedell /s/ Richard Lockie

	 Name:
	 	 G. Bedell/ R. Lockie

	 Title:
	 	 Vice President/ Vice President

  

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	MDS LIFE SCIENCES TECHNOLOGY FUND II QUEBEC LIMITED PARTNERSHIP
	
	By: MDS LSTF II (QGP) Inc., its General Partner
		
	 By:
	 	 /s/ Graysanne Bedell /s/ Richard Lockie

	 Name:
	 	 G. Bedell/ R. Lockie

	 Title:
	 	 Vice President/ Vice President

	
	MLII CO-INVESTMENT FUND NC LIMITED PARTNERSHIP
	
	By: MLII (NCGP) Inc., its General Partner
		
	 By:
	 	 /s/ Graysanne Bedell /s/ Richard Lockie

	 Name:
	 	 G. Bedell/ R. Lockie

	 Title:
	 	 Vice President/ Vice President

	
	CDIB BIOSCIENCE VENTURES I, INC.
		
	 By:
	 	 /s/ Benny Hu

	 Name:
	 	 Benny Hu

	 Title:
	 	 Chairman

  

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 EXHIBIT A 
 THE INVESTORS 
 BURRILL LIFE SCIENCES CAPITAL FUND, L.P. 
 BURRILL INDIANA LIFE SCIENCES CAPITAL FUND, L.P. 
 MPM BIOVENTURES III, L.P. 
 BB BIOVENTURES L.P. 
 MPM BIOVENTURES PARALLEL FUND, L.P. 
 MPM ASSET MANAGEMENT INVESTORS 1999 LLC 
 MPM BIOVENTURES III-QP, L.P. 
 MPM BIOVENTURES III GMBH & CO. BETEILIGUNGS KG

 MPM BIOVENTURES III PARALLEL FUND, L.P. 
 MPM ASSET MANAGEMENT INVESTORS 2004 BVIII LLC 
 TVM V LIFE SCIENCE VENTURES GMBH & CO. KG 
 TVM IV GMBH & CO. KG 
 MDS LIFE SCIENCES TECHNOLOGY FUND II NC LIMITED PARTNERSHIP 
 MDS LIFE SCIENCES TECHNOLOGY
FUND II QUEBEC LIMITED PARTNERSHIP 
 MLII CO-INVESTMENT FUND NC LIMITED PARTNERSHIP 
 CDIB BIOSCIENCE VENTURES I, INC. 

 EXHIBIT B 
 LICENSE AGREEMENT 
 (Please refer to Exhibit 10.10 to the S-1) 

 EXHIBIT C 
 MUTUAL TERMINATION OF LEASE AGREEMENT 
 (Please refer to Exhibit 10.19 to the S-1) 

 EXHIBIT D 
 WAIVER AGREEMENT AND 
 SECOND AMENDMENT TO STOCKHOLDERS’ AGREEMENT 
 (Please refer to Exhibit 4.8 to the S-1) 

 EXHIBIT E 
 PARTNERSHIP JOINDER AGREEMENT 
 (Please refer to Exhibit 4.9 to the S-1) 

 EXHIBIT F 
 TRUST JOINDER AGREEMENT 
 (Please refer to Exhibit 4.10 to the S-1) 

 EXHIBIT G 
 DR. SCHINAZI LOCK-UP AGREEMENT 

 February 14, 2006 
 To
the Lead Managing Underwriter(s) 
 of the initial public offering of Pharmasset, Inc. 
 As Representative of the Several Underwriters 
  

	Re:	Pharmasset, Inc. (the “Company”) 

 Ladies and Gentlemen: 
 The undersigned is an owner of record or beneficially of certain shares of Common Stock of the Company (“Common
Stock”) or securities convertible into or exchangeable or exercisable for Common Stock. The Company proposes to carry out a public offering of Common Stock (the “Offering”) for which you will act as a representative(s) of the
underwriters. The undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the Company. The undersigned acknowledges that you and the other underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in entering into underwriting arrangements with the Company with respect to the Offering. 
 In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not, (and will cause any spouse or immediate family member of the spouse or the undersigned living in the undersigned’s household not to),
without the prior written consent of the Lead Managing Underwriter(s) (which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale),
pledge, transfer, establish an open “put equivalent position” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise dispose
of or transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of) including the filing (or participation in the filing of) of a registration statement with the Securities and
Exchange Commission in respect of, any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities exchangeable or exercisable for or convertible into shares of Common Stock currently or hereafter owned either of
record or beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the undersigned (or such spouse or family member), or publicly announce an intention to do any of the foregoing, for a period commencing on
the effective date of the registration statement used in connection with the Offering and continuing through the close of trading on the date 180 days after the date of the Prospectus (the “Lock-Up Period”), provided that the Offering has
been consummated. In addition, the undersigned agrees that, without the prior written consent of the Lead Managing Underwriter(s), it will not, during the Lock-Up Period, make any demand for or exercise any 

  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 
right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.

 If (i) the Company issues an earnings release or material news, or a material event relating to the Company occurs, during the last 17 days of the
lock-up period, or (ii) prior to the expiration of the lock-up period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the lock-up period, the restrictions imposed by this
agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless the Lead Managing Underwriter(s) waive(s), in writing,
such extension. The undersigned hereby acknowledges that the Company has agreed in the Underwriting Agreement to provide written notice of any event that would result in an extension of the Lock-Up Period pursuant to the previous sentence to the
undersigned and agrees that any such notice properly delivered will be deemed to have been given to, and received by, the undersigned. The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that
is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and including the 34th day following the expiration of the Lock-Up Period, it will give notice thereof to the Company and will not
consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to the previous paragraph) has expired. 
 The foregoing paragraph shall not apply to (i) any shares acquired from any underwriter as part of the Offering in connection with the directed share program,
(ii) transactions relating to shares of Common Stock or other securities acquired in open market transactions after completion of the Offering or (iii) the transfer of any or all of the shares of Common Stock owned by the undersigned,
either during his lifetime or on death, by gift, will or intestate succession to the immediate family of the undersigned or to a trust the beneficiaries of which are exclusively the undersigned and/or a member or members of his immediate family;
provided, however, that in any such case it shall be a condition to such transfer that the transferee executes and delivers to the Lead Managing Underwriter(s) an agreement stating that the transferee is receiving and holding the Common Stock
subject to the provisions of this letter agreement, and there shall be no further transfer of such Common Stock except in accordance with this letter. 
 The
undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of shares of Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock held by the undersigned except in compliance with the foregoing restrictions. 
 With respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities Act of any Common Stock owned either of record or beneficially by the undersigned, including any rights to receive notice of the Offering. 
  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 This agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal
representatives, and assigns of the undersigned. 
  

	
	
	 /s/ Raymond F. Schinazi, Ph.D.

	 Raymond F. Schinazi, Ph.D.

  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 EXHIBIT H 
 SCHINAZI PARTNERSHIP LOCK-UP AGREEMENT 

 February 14, 2006 
 To
the Lead Managing Underwriter(s) 
 of the initial public offering of Pharmasset, Inc. 
 As Representative of the Several Underwriters 
  

	Re:	Pharmasset, Inc. (the “Company”) 

 Ladies and Gentlemen: 
 The undersigned is an owner of record or beneficially of certain shares of Common Stock of the Company (“Common
Stock”) or securities convertible into or exchangeable or exercisable for Common Stock. The Company proposes to carry out a public offering of Common Stock (the “Offering”) for which you will act as a representative(s) of the
underwriters. The undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the Company. The undersigned acknowledges that you and the other underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in entering into underwriting arrangements with the Company with respect to the Offering. 
 In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not, (and will cause any spouse or immediate family member of the spouse or the undersigned living in the undersigned’s household not to),
without the prior written consent of the Lead Managing Underwriter(s) (which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale),
pledge, transfer, establish an open “put equivalent position” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise dispose
of or transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of) including the filing (or participation in the filing of) of a registration statement with the Securities and
Exchange Commission in respect of, any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities exchangeable or exercisable for or convertible into shares of Common Stock currently or hereafter owned either of
record or beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the undersigned (or such spouse or family member), or publicly announce an intention to do any of the foregoing, for a period commencing on
the effective date of the registration statement used in connection with the Offering and continuing through the close of trading on the date 180 days after the date of the Prospectus (the “Lock-Up Period”), provided that the Offering has
been consummated. In addition, the undersigned agrees that, without the prior written consent of the Lead Managing Underwriter(s), it will not, during the Lock-Up Period, make any demand for or exercise any 

  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 
right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.

 If (i) the Company issues an earnings release or material news, or a material event relating to the Company occurs, during the last 17 days of the
lock-up period, or (ii) prior to the expiration of the lock-up period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the lock-up period, the restrictions imposed by this
agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless the Lead Managing Underwriter(s) waive(s), in writing,
such extension. The undersigned hereby acknowledges that the Company has agreed in the Underwriting Agreement to provide written notice of any event that would result in an extension of the Lock-Up Period pursuant to the previous sentence to the
undersigned and agrees that any such notice properly delivered will be deemed to have been given to, and received by, the undersigned. The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that
is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and including the 34th day following the expiration of the Lock-Up Period, it will give notice thereof to the Company and will not
consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to the previous paragraph) has expired. 
 The foregoing paragraph shall not apply to (i) any shares acquired from any underwriter as part of the Offering in connection with the directed share program,
(ii) transactions relating to shares of Common Stock or other securities acquired in open market transactions after completion of the Offering or (iii) the transfer of any or all of the shares of Common Stock owned by the undersigned,
either during his lifetime or on death, by gift, will or intestate succession to the immediate family of the undersigned or to a trust the beneficiaries of which are exclusively the undersigned and/or a member or members of his immediate family;
provided, however, that in any such case it shall be a condition to such transfer that the transferee executes and delivers to the Lead Managing Underwriter(s) an agreement stating that the transferee is receiving and holding the Common Stock
subject to the provisions of this letter agreement, and there shall be no further transfer of such Common Stock except in accordance with this letter. 
 The
undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of shares of Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock held by the undersigned except in compliance with the foregoing restrictions. 
 With respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities Act of any Common Stock owned either of record or beneficially by the undersigned, including any rights to receive notice of the Offering. 
  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 This agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal
representatives, and assigns of the undersigned. 
  

					
	RFS PARTNERS, L.P.
		
	 By:
	 	RFS & ASSOCIATES, LLC
		
	By:	 	 /s/ Raymond F. Schinazi, Ph.D.

		 	 Name:
	 	 Raymond F. Schinazi, Ph.D.

		 	 Title:
	 	 Manager

  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 EXHIBIT I 
 SCHINAZI TRUST LOCK-UP AGREEMENT 

 February 14, 2006 
 To
the Lead Managing Underwriter(s) 
 of the initial public offering of Pharmasset, Inc. 
 As Representative of the Several Underwriters 
  

	Re:	Pharmasset, Inc. (the “Company”) 

 Ladies and Gentlemen: 
 The undersigned is an owner of record or beneficially of certain shares of Common Stock of the Company (“Common
Stock”) or securities convertible into or exchangeable or exercisable for Common Stock. The Company proposes to carry out a public offering of Common Stock (the “Offering”) for which you will act as a representative(s) of the
underwriters. The undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the Company. The undersigned acknowledges that you and the other underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in entering into underwriting arrangements with the Company with respect to the Offering. 
 In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not, (and will cause any spouse or immediate family member of the spouse or the undersigned living in the undersigned’s household not to),
without the prior written consent of the Lead Managing Underwriter(s) (which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale),
pledge, transfer, establish an open “put equivalent position” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise dispose
of or transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of) including the filing (or participation in the filing of) of a registration statement with the Securities and
Exchange Commission in respect of, any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities exchangeable or exercisable for or convertible into shares of Common Stock currently or hereafter owned either of
record or beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the undersigned (or such spouse or family member), or publicly announce an intention to do any of the foregoing, for a period commencing on
the effective date of the registration statement used in connection with the Offering and continuing through the close of trading on the date 180 days after the date of the Prospectus (the “Lock-Up Period”), provided that the Offering has
been consummated. In addition, the undersigned agrees that, without the prior written consent of the Lead Managing Underwriter(s), it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock. 
  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 If (i) the Company issues an earnings release or material news, or a material event relating to the Company occurs,
during the last 17 days of the lock-up period, or (ii) prior to the expiration of the lock-up period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the lock-up period, the
restrictions imposed by this agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless the Lead Managing
Underwriter(s) waive(s), in writing, such extension. The undersigned hereby acknowledges that the Company has agreed in the Underwriting Agreement to provide written notice of any event that would result in an extension of the Lock-Up Period
pursuant to the previous sentence to the undersigned and agrees that any such notice properly delivered will be deemed to have been given to, and received by, the undersigned. The undersigned hereby further agrees that, prior to engaging in any
transaction or taking any other action that is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and including the 34th day following the expiration of the Lock-Up Period, it will give notice
thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to the previous paragraph) has
expired. 
 The foregoing paragraph shall not apply to (i) any shares acquired from any underwriter as part of the Offering in connection with the
directed share program, (ii) transactions relating to shares of Common Stock or other securities acquired in open market transactions after completion of the Offering or (iii) the transfer of any or all of the shares of Common Stock owned
by the undersigned, either during his lifetime or on death, by gift, will or intestate succession to the immediate family of the undersigned or to a trust the beneficiaries of which are exclusively the undersigned and/or a member or members of his
immediate family; provided, however, that in any such case it shall be a condition to such transfer that the transferee executes and delivers to the Lead Managing Underwriter(s) an agreement stating that the transferee is receiving and holding the
Common Stock subject to the provisions of this letter agreement, and there shall be no further transfer of such Common Stock except in accordance with this letter. 
 The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of shares of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock held by the undersigned except in compliance with the foregoing restrictions. 
 With respect to the Offering only, the
undersigned waives any registration rights relating to registration under the Securities Act of any Common Stock owned either of record or beneficially by the undersigned, including any rights to receive notice of the Offering. 
  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE 

 This agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal
representatives, and assigns of the undersigned. 
  

					
	RAYMOND F. SCHINAZI 2005 QUALIFIED ANNUITY TRUST
		
	By:	 	 /s/ Raymond F. Schinazi, Ph.D.

		 	 Name:
	 	 Raymond F. Schinazi, Ph.D.

		 	 Title:
	 	 Trustee

  

 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASEConsulting Agreement, dated June 28, 2005

 EXHIBIT 10.22 
 CONSULTING AGREEMENT 
 THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into
as of the 28th day of June, 2005, by and between Pharmasset, Inc. (the “Company”), a Delaware corporation, and Michael Inouye, an individual (“Consultant”). 
 WITNESSETH: 
 WHEREAS, the Company desires to engage Consultant to
provide services to the Company, and Consultant desires to accept engagement on the terms and conditions hereinafter stated; 
 NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows: 
 1. Services. 

1.1 Beginning on the Effective Date, Consultant shall be an active consultant to the Company and will provide services to the Company upon request as
further described in Exhibit A hereto. 
 1.2 Consultant and the Company acknowledge and agree this Agreement is an independent contractor
agreement and does not create an employer/employee relationship between the Company and Consultant. Consultant is solely responsible for the payment of all taxes resulting from the performance of services under this Agreement. The Company will issue
an IRS form 1099 for each year in which the Consultant provided such services. The Consultant agrees to timely and properly file all income, employment and other tax returns, and to report all income paid to him under this Agreement, and to pay all
required tax liabilities. To the extent the Consultant does not satisfy the above requirements, the Consultant specifically agrees to indemnify the Company (and its employees, affiliates and agents) from any and all costs (including, but not limited
to, tax liabilities, interest, penalties and attorneys’ fees) incurred as a result of such breach. 
 1.3 Consultant is not eligible for
any employee benefits and shall not have any rights to participate as an employee under any employee benefit plans of the Company that are in existence or hereafter adopted or implemented. Consultant and the Company agree that the consideration paid
to Consultant under this Agreement was negotiated based on the fact that Consultant is not eligible for any employee benefits of any nature. Consultant specifically understands and acknowledges that he has agreed to perform the services specified in
this Agreement based solely upon the consideration stated herein. Accordingly, the Consultant agrees never to make a claim for benefits of any kind, and in the event that a determination is made that he is a common law employee, whether by a court
or otherwise, or such benefits are otherwise provided to Consultant, he will reimburse the Company for the value of those benefits. 
 1.4 As
an independent contractor, Consultant shall not have the power or authority to bind the Company to any obligations whatsoever to third parties without the prior written consent of the Company. 
  

					
	CONFIDENTIAL	 	Page 1 of 9	 	Inouye Consulting 062705

 1.5 Consultant represents and warrants to the Company that this Agreement does not violate or breach, and
Consultant’s performance of Consultant’s obligations hereunder will not violate or breach, any terms or provisions of any agreement or understanding to which Consultant is subject or bound. Consultant represents, warrants, covenants and
agrees that Consultant will not, during his engagement by the Company, improperly use or disclose any proprietary information or trade secrets of any other party, and will not bring onto the premises of the Company any unpublished documents or any
property belonging to any other party unless consented to in writing by said party. 
 1.6 Consultant represents and warrants that Consultant
has not been debarred or received notice of any action or threat with respect to debarment under the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. § 335(a). Consultant agrees to promptly notify the Company upon receipt of
any such notice and further agrees, upon the Company’s request, to provide a separate written certification, on a form provided by the Company, to this effect. 
 2. Termination. 
 2.1 Either the Company or Consultant may terminate this Agreement at
any time without Cause by giving not less than five (5) business days prior written notice thereof to the other party. 
 2.2 Upon
termination of engagement, all obligations of the Company under this Agreement shall terminate except with respect to all accrued compensation and reimbursement of expenses, if any, to which the Consultant is entitled under the terms of this
Agreement. 
 3. Compensation. 
 3.1 In consideration of the services provided by Consultant as set forth in Exhibit A, the Company shall pay to Consultant according to the following schedule: 
 3.1.1 $200 per hour for less than eight hours of service in a single day; 
 3.1.2 $1,350 per day for eight (8) or more hours of service in a single day. 
 3.2 Consultant shall submit
invoices to the Company detailing Consultant’s time spent on behalf of the Company prior to any payment by the Company to Consultant. 
 3.3 The Company shall make payment to Consultant in accordance with undisputed invoices within fifteen (15) business days of the Company’s receipt of appropriate invoices as set forth in Section 3.2 above. 
 3.4 Any activities of Consultant associated with Company board observer and/or Company board member duties and obligations shall not be compensable under
this Agreement. 
  

					
	CONFIDENTIAL	 	Page 2 of 9	 	Inouye Consulting 062705

 4. Expense Reimbursements. 
 Consultant shall be reimbursed for normal, reasonable, bona fide and necessary expenses incurred by Consultant in the performance of Consultant’s duties hereunder as detailed in Exhibit B attached hereto.
Consultant shall obtain prior approval before incurring any expense in excess of $150.00. Consultant shall submit documentation and receipts itemizing his expenses, and reflecting the date, amount and nature of the expense, within ten (10) business
after the end of each calendar month. The Company will reimburse Consultant for such expenses with fifteen (15) business days of receipt of appropriate documentation as described above. 
 5. Trade Secrets and Confidential Information. 
 5.1 “Trade Secret” means information
not generally known about the Company’s business which is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality and from which the Company derives economic value now or in the future from
the fact that the information is not generally known to other persons. Trade Secrets include, but are not limited to, business, marketing, strategic, scientific, legal and financial information, strategies and/or plans, technical or non-technical
data, compilations, programs and methods, designs, techniques, improvements, drawings, processes, formulae, financial data, business and product development plans, service reports, price lists, product licensing information, computer programs and
source codes of the Company. 
 5.2 Consultant covenants and agrees that Consultant will treat as confidential and will not use (other than
in the performance of Consultant’s duties hereunder), or disclose in any manner, either during or after the term of Consultant’s engagement under this Agreement, any Trade Secrets. Consultant also agrees that Consultant will diligently
protect all Trade Secrets against loss by inadvertent or unauthorized disclosure and will comply with any regulations established by the Company for the purpose of protecting such information. 
 5.3 “Confidential Information” means any information or material which is not generally available to or used by others or the utility or value
of which is not generally known or recognized as standard practice, whether or not the underlying details are in the public domain, including but not limited to business, strategic, scientific, legal and financial information, which, by virtue of
the Consultant’s engagement by the Company, may be disclosed to or otherwise come into the possession of Consultant. 
 5.4 Consultant
covenants and agrees that Consultant will treat as confidential and will not use (other than in the performance of Consultant’s duties hereunder), or disclose in any manner, any Confidential Information for a period of three (3) years, measured
from the date of termination of the Consultant’s engagement. Consultant also agrees that Consultant will diligently protect all Confidential Information against loss by inadvertent or unauthorized disclosure and will comply with any regulations
established by the Company for the purpose of protecting such information. 
 5.5 All Trade Secrets and Confidential Information which may be
disclosed to or otherwise come into the possession of Consultant, shall be and remain the sole and exclusive property of the Company. Consultant agrees that upon the termination of Consultant’s engagement 
  

					
	CONFIDENTIAL	 	Page 3 of 9	 	Inouye Consulting 062705

 by the Company, or at any other prior time upon request, Consultant will promptly deliver to the Company the originals
and all copies of any of the foregoing that are in Consultant’s possession, custody, or control, including electronic files stored on electronic media, and will delete any relevant files in Consultant’s personal computer and certify such
destruction to the Company. 
 6. Inventions. 
 6.1 The terms and provisions of this Section 6 shall apply only to Inventions (as hereinafter defined) which Consultant makes, develops, invents, first reduces to practice, conceives, creates, or authors, either
solely or jointly with others, while Consultant is providing services to the Company, whether during or outside business hours, whether or not on the Company’s premises, whether at the request of the Company or otherwise, or with the use of the
Company’s Trade Secrets, material, facilities, employees or advisors. 
 6.2 Subject to Section 6.1 above, Consultant hereby assigns and
agrees to assign to the Company, its successors, assigns, or designees, all of Consultant’s worldwide rights, titles and interests to inventions, improvements, discoveries, processes, formulae, designs, technical information, know-how, data,
specifications, Trade Secrets, test results, patents, trademarks, copyrights, computer programs, and other proprietary information relating to the development, production, distribution and licensing of antiviral and anticancer agents,
immunomodulators and other treatments of chronic or life-threatening diseases (“Inventions”) which, during the term of Consultant’s engagement by the Company, Consultant makes, develops, invents, first reduces to practice, conceives,
creates, or authors, either solely or jointly with others, while Consultant is providing services to the Company, whether during or outside business hours, whether or not on the Company’s premises, whether at the request of the Company or
otherwise, or with the use of the Company’s Trade Secrets, material, facilities, employees or advisors. 
 6.3 Subject to Section 6.1
above, Consultant agrees to fully and promptly disclose in writing to the Company any such Inventions as such Inventions from time to time may arise. Consultant further agrees, without charge to the Company other than reimbursement of
Consultant’s reasonable out-of-pocket expenses, to execute and deliver all such further documents, including applications for patents and copyrights, and to perform such acts, at any time during or after the term of this Agreement as may be
necessary, to obtain and to enforce patents, copyrights, Trade Secrets and other proprietary and intellectual property rights, titles and interests in respect of the Inventions and to vest title to such Inventions and to all associated patent,
copyright, mask work, and other intellectual property rights in the Company, its successors, assigns, or designees and to carry out the purpose of this Section. Without limiting the generality of the foregoing, Consultant further agrees to give all
lawful testimony, including without limitation depositions, during or after the term of Consultant’s engagement, which may be required in connection with any proceedings involving any Trade Secret, patent, patent application, copyright, mask
work rights or applications therefor, so assigned by Consultant. Consultant shall not (except as provided for in this Agreement) apply for any letters patent, copyright, trademarks, or mask rights or other form of protection hereby with respect to
any Invention. 
 6.4 Without limiting any other provision of this Agreement, any Invention qualifying for protection under the copyright
laws of the United States of America and qualifying as a “work made 
  

					
	CONFIDENTIAL	 	Page 4 of 9	 	Inouye Consulting 062705

 for hire” under such laws, shall be “works made for hire” under such copyright laws, and shall be the sole
and exclusive property of the Company and the Company shall be considered the author thereof. 
 6.5 Consultant hereby irrevocably appoints
the Company, both during and after Consultant’s retention by the Company, to be Consultant’s attorney in Consultant’s name and on Consultant’s behalf to execute any and all such instruments and documents and to do all such things
and generally use Consultant’s name for the purpose of assuring to the Company (or its designee) the full benefit of the provisions of this Section 6. 
 7. Nonsolicitation of Employees and Independent Contractors. 
 During Consultant’s engagement by the Company and
for a period of 18 months after the termination of such engagement for any reason, Consultant will not, without the prior consent of the Company, directly or indirectly, on Consultant’s own behalf or in the service or on behalf of others
solicit, divert or recruit any employee or independent contractor of the Company to leave such employment or engagement and become employed or engaged by a competing business, whether or not such employment of engagement is pursuant to a written
contract by the Company or at will. 
 8. Remedies. 
 8.1 Consultant acknowledges and agrees that, by virtue of the duties attendant to Consultant’s engagement by the Company and the knowledge of the Company’s proprietary information, affairs, business, and
operations that Consultant may acquire, the Company will have as a consequence of such engagement irreparable loss and damage if Consultant should breach or violate any of the covenants and agreements contained in Sections 5, 6, or 7 hereof.
Consultant further acknowledges and agrees that each of such covenants is reasonably necessary to protect and preserve the business and the assets of the Company. Consultant therefore agrees and consents that, in addition to any other remedies
available to the Company, the Company shall be entitled to an injunction to prevent a breach or contemplated breach by Consultant of any of the covenants or agreements contained in such Sections. 
 8.2 Nothing contained in this Agreement shall limit, abridge, or modify the rights of the parties under applicable trade secret, trademark, copyright, or
patent law or under the laws of unfair competition. 
 9. Notices. 
 All notices, requests, consents, and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument
delivered in person (including delivery by overnight or express courier) or duly sent by certified mail, return receipt requested, proper postage prepaid, addressed to such party at the address set forth below or such other addresses as may
hereafter be designated in writing by the addressee to the addressor listing all parties: 
  

					
	CONFIDENTIAL	 	Page 5 of 9	 	Inouye Consulting 062705

			
	Company:	  	 Pharmasset, Inc.
 Attn: Legal Affairs
 1860 Montreal Road
 Tucker, GA 30084 U.S.A.
  

	Consultant:	  	 Michael Inouye
 417 Deerhill Drive
 San Ramon, CA 94583 U.S.A.

 All such notices, advices, and communications shall be deemed to have been received (a) in the case of personal
delivery, on the date of actual personal receipt, and (b) in the case of mailing, on the third day after the posting by certified mail, return receipt requested. 
 10. Binding Agreement. 
 The rights and obligations of the Company under this Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of the Company. This Agreement is a personal service agreement and may not be assigned in whole or in part by Consultant. The covenants of Consultant contained in Sections 5, 6 and 7 shall be
binding upon the heirs and legal representatives of Consultant. 
 11. Severable Provisions. 
 The provisions of this Agreement are severable and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or
in part, the remaining provisions, and any partial enforceable provision to the extent enforceable in any jurisdiction, shall nevertheless be binding and enforceable. 
 12. Waiver. 
 The waiver by one party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent breach of the same or any other provision by the other party. 
 13. Entire
Agreement. 
 This Agreement constitutes the entire agreement of the parties hereto with respect to the engagement of Consultant by
the Company and may not be changed orally, but only by an agreement in writing signed by the party against whom the enforcement of any waiver, change, modification, extension, or discharge is sought. 
  

					
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 14. Counterparts. 
 This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all which together shall constitute one and the same instrument. 
 15. Governing Law and Jurisdiction. 
 This
Agreement shall be governed by and interpreted under the laws of the State of New Jersey, without giving effect to the principles of conflicts of law of any jurisdiction. In the event that a party to this Agreement perceives the existence of a
dispute with the other party concerning any right or duty provided for herein, the parties will, as soon as practicable, confer and attempt to resolve the dispute. If the parties are unable to resolve such dispute amicably, then the parties hereby
submit to final, binding arbitration. Arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association by three arbitrators, one to be appointed by the Company, one to be appointed by Employee, and one to
be appointed by the two arbitrators appointed by Company and Employee. Arbitration shall take place in New York, NY and the decision of the arbitrators shall be enforceable, but not appealable, in a court of competent jurisdiction. The fees
and expenses incurred in connection with such arbitration shall be borne by the party initiating the arbitration proceeding (or equally by both parties if both parties jointly initiate such proceeding) subject to reimbursement by the party which
does not prevail in such proceeding if permitted by applicable law. 
 16. Confidentiality. 
 Consultant agrees to maintain the confidentiality of the terms and provisions of this Agreement and not disclose such terms and provisions to any party
other than Consultant’s affiliates or advisors. 
 IN WITNESS WHEREOF, the duly authorized representatives of the parties hereto have
caused this Agreement to be duly executed as of the date set forth. 
  

									
	Pharmasset, Inc.	 		 	Michael Inouye
	(“Company”)	 		 	(“Consultant”)
				
	By:	 	 /s/ P. Schaefer Price
	 		 	 /s/ Michael Inouye

		 	 P. Schaefer Price
 President and CEO
	 		 		 	
					
	Date:	 	 28 June 2005
	 		 	Date:	 	 28 June 2005

  

					
	CONFIDENTIAL	 	Page 7 of 9	 	Inouye Consulting 062705

 EXHIBIT A 
 Description of Consultant’s Services 
  

	 	•	 	Upon request by an authorized Company representative: 

  

	 	•	 	Assist the Company in reviewing corporate strategy; 

  

	 	•	 	Assist the Company in the development of market strategies; 

  

	 	•	 	Assist the Company in product positioning analyses; 

  

	 	•	 	Assist the Company in reimbursement strategy. 

  

					
	CONFIDENTIAL	 	Page 8 of 9	 	Inouye Consulting 062705

 EXHIBIT B 
 Expense Reimbursement 
 Pursuant to Section 4 of the Agreement, the Company will reimburse Consultant for expenses in
accordance with the following schedule: 
  

	 	•	 	Air Travel: 

  

	 	•	 	Coach air fare for all domestic air travel requested or required by the Company. Time for such travel will not be charged as consulting time. 

  

	 	•	 	Business class air fare for air travel outside of the U.S. and its territories. Time for such travel will not be billed as consulting time if less than eight (8) hours in duration
one-way. Time for such travel exceeding eight (8) hours in duration one-way will be billed at $200.00 per hour. 

  

	 	•	 	Ground Travel: 

  

	 	•	 	Mileage for use of personal automobile at $0.40.5/mile. 

  

	 	•	 	Reasonable rental car rates for no larger than a mid-size automobile. 

  

	 	•	 	Rail or limousine service if requested by the Company. 

  

	 	•	 	Lodging and Meals: 

  

	 	•	 	Reasonable costs for accommodations and meals associated with travel requested by the Company, including on-site work at the Company’s location(s) and sites designated by the
Company. 

  

	 	•	 	Pass-Through Expenses: 

  

	 	•	 	Expenses such as postage, telecommunications charges, parking, honoraria, data acquisition, etc. will be individually itemized on Consultant’s invoices.

  

					
	CONFIDENTIAL	 	Page 9 of 9	 	Inouye Consulting 062705

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