Document:

exv10w18

 

EXHIBIT 10.18

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made as of this 4th day of February, 2008,
between David Pendergast (“Executive Chairman”) and Altus Pharmaceuticals Inc. (the “Company”).

          WHEREAS, the Company desires to retain Executive Chairman to act as the Company’s Executive
Chairman on an interim basis while the Company actively seeks to hire a new Chief Executive
Officer;

          WHEREAS, Executive Chairman has agreed to act as Executive Chairman until the Company hires a
new Chief Executive Officer and, in that regard, Executive Chairman has agreed to assist in the
transition; and

          WHEREAS, the Company and Executive Chairman have agreed to document their agreement with
regard to Executive Chairman’s services and compensation therefore;

          NOW,THEREFORE, the Company and Executive Chairman agree as follows:

     1. Term of Employment. The Company hereby agrees to employ Executive Chairman, and
Executive Chairman hereby accepts employment with the Company, upon the terms set forth in this
Agreement for an initial employment period of ninety (90) days (the “Initial Employment Period”).
This Agreement shall thereafter continue on a month-to-month basis until such time as either the
Company or Executive Chairman give notice to the other of termination in accordance with Section 4
of this Agreement (such Initial Employment Period and the month-to-month periods thereafter, if
any, being collectively referred to as the “Agreement Term”). The Initial Employment Period shall
commence as of the date of this Agreement (the “Commencement Date”).

     2. Title; Capacity. The Company will employ Executive Chairman, and Executive
Chairman agrees to work for the Company, as its Executive Chairman to perform the duties and
responsibilities as assigned from time to time by the Company’s Board of Directors (the “Board”),
which duties shall include strategic direction, setting corporate goals and policies, general
company leadership and his assistance and cooperation in transitioning the new Chief Executive
Officer into his role. Executive Chairman shall report to and be subject to the supervision of the
Board. Executive Chairman shall devote half business time and reasonable best efforts in the
performance of the foregoing services during the Agreement Term. Executive Chairman shall also
continue to serve on the Company’s Board and receive separate compensation for such Board service
during the Agreement Term.

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     3. Compensation and Benefits.

          3.1. Salary. The Company shall pay Executive Chairman a base salary of $25,000 per
month, payable in accordance with the Company’s customary payroll practices (the “Base Salary”),
less applicable payroll withholdings.

          3.2. Bonus Incentive. At the end of the Initial Employment Period, and at the end of
each ninety-day period thereafter (each, a “Bonus Period”), the Board will consider whether to
award Executive Chairman an incentive bonus (the “Bonus”) as follows: Executive Chairman will be
eligible to receive a bonus equal to 50% of Executive Chairman’s Base Salary earned during the
relevant Bonus Period upon Executive Chairman’s accomplishment of certain milestones (the
“Milestones”) to be agreed to jointly between Executive Chairman and the Board. The Milestones
shall relate to, but shall not be limited to, achievement of the following, in the Board’s sole
discretion: (a) setting corporate strategy; (b) leading the Company’s senior executive team; (c)
assisting in launching the search for a permanent Chief Executive Officer; (d) meeting Trizytek
milestones; (e) meeting ALTU-238 milestones; and (f) meeting ALTU-237 milestones. The Bonus, if
any, shall be calculated and paid, less applicable payroll deductions, no later than (30) days
following the close of each Bonus Period.

          3.3. Equity Incentive. On the Commencement Date, the Company shall grant Executive
Chairman a non-qualified stock option under the Company’s 2002 Amended and Restated Employee,
Director and Consultant Stock Plan, as amended (the “2002 Stock Plan”), to purchase 75,000 shares
of common stock (the “Option”) at an exercise price equal to the Fair Market Value (as defined in
the 2002 Stock Plan) of the Company’s common stock on the Commencement Date. The Option shall vest
as to 12,500 of the shares on the last day of each calendar month following the Commencement Date,
such that the first 12,500 shares will vest on February 29, 2008, and an additional 12,500 shares
will vest on the last day of each calendar month thereafter until such time as all shares have
vested during the Agreement Term. Notwithstanding the foregoing sentence, in the event that prior
to the end of the Initial Employment Period (1) this Agreement is terminated other than (i) for
Cause (as defined in Section 4.5), (ii) upon Executive Chairman’s voluntary resignation, or (iii)
by reason of Executive Chairman’s death or Disability (as defined in the 2002 Stock Plan) (an
“Early Termination”), or (2) there is a Change in Control (as defined in the 2002 Stock Plan) of
the Company, then, upon such Early Termination or Change in Control, the Option shall vest and
become immediately exercisable as to 37,500 of the 75,000 shares. Except as provided herein, the
Option will be subject to the terms and conditions of the 2002 Stock Plan and the customary terms
and conditions of the Company’s standard form of non-qualified stock option agreement. In the
event the Executive Chairman’s employment continues for longer than six months, the Executive
Chairman shall be granted additional stock options in order for Executive Chairman to continue to
receive the option to purchase 12,500 shares of common stock per month employed. The exercise
price of such options shall be equal to the Fair Market Value (as defined in the 2002 Stock Plan)
of the Company’s common stock on the applicable grant dates and will be subject to the terms and
conditions of the 2002 Stock Plan and the customary terms and conditions of the Company’s standard
form of non-qualified stock option agreement.

          3.4. Fringe Benefits. Executive Chairman shall be entitled to participate in all
benefit programs that the Company establishes and makes available to its executive employees, if
any, to the extent that Executive Chairman’s position, tenure, salary, age, health and other

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qualifications make Executive Chairman eligible to participate, including, but not limited to,
health care plans, life insurance plans, disability insurance, retirement plans, and all other
benefit plans from time to time in effect. Executive Chairman shall be entitled to take three
weeks of fully paid vacation in March 2008. In addition, to the extent Executive Chairman’s
employment continues beyond the Initial Employment Period, Executive Chairman shall be entitled to
take one week of fully paid vacation for each three-month period that Executive Chairman serves the
Company pursuant to this Agreement.

          3.5. Reimbursement of Certain Expenses. The Company shall reimburse Executive
Chairman for all reasonable travel, entertainment and other expenses incurred or paid by Executive
Chairman in connection with, or related to, the performance of his duties, responsibilities or
services under this Agreement, upon presentation by Executive Chairman of documentation, expense
statements, vouchers and/or such other supporting information as the Company may request; provided
however, that the amount available for such travel, entertainment and other expenses may be fixed
in advance by the Board. If a business expense reimbursement is not exempt from Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), any reimbursement in one calendar year
shall not affect the amount that may be reimbursed in any other calendar year, and a reimbursement
(or right thereto) may not be exchanged or liquidated for another benefit or payment. Any business
expense reimbursements subject to Section 409A of the Code shall be made no later than the end of
the calendar year following the calendar year in which such business expense is incurred by
Executive Chairman.

          3.6. Indemnification. The Company shall indemnify and hold Executive Chairman
harmless to the fullest extent permitted by the General Corporation Law of the State of Delaware,
as amended from time to time, or by the Company’s Certificate of Incorporation and Bylaws. The
Company shall also insure Executive Chairman under the Company’s Directors & Officer’s liability
policy. Such indemnity and insurance shall survive the termination of Executive Chairman’s
employment by the Company.

     4. Termination. Executive Chairman’s employment shall terminate upon the occurrence
of any of the following:

          4.1. Termination by Company Prior to End of Initial Employment Period. Subject to
Section 5.2 below, the Company may terminate Executive Chairman’s employment at any time prior to
the expiration of the Initial Employment Period.

          4.2. Termination at End of Initial Employment Period. The Executive Chairman’s
employment shall terminate upon the expiration of the Initial Employment Period if either party
informs the other prior to such date that the Executive Chairman’s employment shall terminate upon
the expiration of the Initial Employment Period.

          4.3. Termination by Company After Initial Employment Period. After the Initial
Employment Period, Executive Chairman’s employment shall terminate at any time upon thirty (30)
days prior written notice by the Company to the Executive Chairman.

          4.4. Voluntary Termination by Executive Chairman. Executive Chairman’s employment
shall terminate at any time upon thirty (30) days prior written notice by Executive Chairman to the
Company.

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          4.5. Termination for Cause. Executive Chairman’s employment shall terminate
immediately for Cause. “Cause” for termination shall result if Executive Chairman engages in
conduct that is detrimental to the interest of the Company and causes the Company material
financial or other harm.

          4.6. Death or Disability. The Employment Period shall terminate immediately upon
Executive Chairman’s death or Executive Chairman’s inability to perform services hereunder due to
Disability.

     5. Effect of Termination.

          5.1. Termination by the Company Prior to End of Initial Employment Period. In the
event that the Company terminates Executive Chairman’s employment prior to the end of the Initial
Employment Period, other than for Cause or as a result of Executive Chairman’s death or Disability,
then (i) the Company shall continue to pay Executive Chairman his Base Salary in equal installments
through the expiration of the Initial Employment Period, (ii) the Option shall vest and become
immediately exercisable as to 37,500 shares, as provided in Section 3.3 hereof, and (iii) the
Company shall have no further obligations under this Agreement other than expense reimbursement and
indemnity obligations as set forth herein.

          5.2. Termination at End of Initial Employment Period. In the event that Executive
Chairman’s employment terminates upon the expiration of the Initial Employment Period, then (i) the
Company shall pay Executive Chairman his Base Salary earned through the last day of the Initial
Employment Period, (ii) the Option shall cease vesting as of the end of the Initial Employment
Period, and (iii) Company shall have no further obligations under this Agreement other than expense
reimbursements and indemnity obligations as set forth herein.

          5.3. Termination After End of Initial Employment Period, for Cause, Voluntarily by
Executive Chairman, or for Death or Disability. If Executive Chairman’s employment is
terminated (a) by the Company after the Initial Employment Period, (b) for Cause; (c) as a result
of Executive Chairman’s voluntary resignation, or (d) as a result of Executive Chairman’s death or
Disability, then (i) the Company shall pay Executive Chairman his Base Salary earned through the
last day of his employment by the Company (including any required notice period), (ii) the Option
shall cease to vest as of the end of the calendar month immediately preceding the last day of
Executive Chairman’s employment (including any required notice period), and (iii) the Company shall
have no further obligations under this Agreement other than expense reimbursements and indemnity
obligations as set forth herein.

     6. Nondisclosure and Inventions Assignment.

               (a) Nondisclosure. Executive Chairman agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature concerning the Company’s
business or financial affairs (collectively, “Proprietary Information”) is and shall be the
exclusive property of the Company. By way of illustration, but not limitation, Proprietary
Information may include inventions, products, processes, methods, techniques, formulas, designs,
drawings, slogans, tests, logos, ideas, practices, projects, developments, plans, research data,
financial data, personnel data, computer programs and codes, and customer and supplier lists.
Executive Chairman will not disclose any Proprietary Information to others outside the

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Company, except in the performance of his duties, or use the same for any unauthorized
purposes without written approval by an officer of the Company, either during or after his
employment, unless and until such Proprietary Information has become public knowledge or generally
known within the industry without fault by Executive Chairman, or unless otherwise required by law.

               (b) Disclosure of Inventions. Executive Chairman shall disclose promptly to an
officer or to attorneys of the Company in writing any idea, invention, work of authorship, whether
patentable or unpatentable, copyrightable or uncopyrightable, including, but not limited to, any
computer program, software, command structure, code, documentation, formula, manual, device,
improvement, method, process, discovery, concept, algorithm, development, secret process, machine
or contribution (any of the foregoing items hereinafter referred to as an “Invention”) that
Executive Chairman may conceive, make, develop or work on, in whole or in part, solely or jointly
with others. The disclosure required by this Section 6(b) applies (i) during the period of
Executive Chairman’s employment with the Company and for one year thereafter; (ii) with respect to
all Inventions whether or not they are conceived, made, developed or worked on by Executive
Chairman during Executive Chairman’s regular hours of employment with the Company; (iii) whether or
not the Invention was made at the suggestion of the Company; (iv) whether or not the Invention was
reduced to drawings, written description, documentation, models or other tangible form; and (v)
whether or not the Invention is related to the general line of business engaged in by the Company.

               (c) Assignment of Inventions to Company; Exemption of Certain Inventions. Executive
Chairman hereby assigns to the Company without royalty or any other further consideration Executive
Chairman’s entire right, title and interest in and to all Inventions which Executive Chairman
conceives, makes, develops or works on during employment and for one year thereafter, except those
Inventions that Executive Chairman develops entirely on Executive Chairman’s own time after the
date of this Agreement without using the Company’s equipment, supplies, facilities or trade secret
information, unless those Inventions either (i) relate at the time of conception or reduction to
practice of the Invention to the Company’s business, or actual or demonstrably anticipated research
or development of the Company; or (ii) result from any work performed by Executive Chairman for the
Company.

               (d) Patents. Executive Chairman will assist the Company in obtaining, maintaining and
enforcing patents and other proprietary rights in connection with any Invention covered by this
Agreement. Executive Chairman further agrees that his obligations under this Section 6 shall
continue beyond the termination of his employment with the Company, but if he is called upon to
render such assistance after the termination of such employment, he shall be entitled to a fair and
reasonable rate of compensation for such assistance. Executive Chairman shall, in addition, be
entitled to reimbursement of any expenses incurred at the request of the Company relating to such
assistance.

     7. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written or oral relating to
the subject matter of this Agreement.

     8. Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and Executive Chairman.

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     9. Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the Commonwealth of Massachusetts without regard to principles of
conflicts of laws thereunder.

     10. Notices. Any notice or other communication required or permitted by this
Agreement to be given to a party shall be in writing and shall be delivered personally or sent by
commercial messenger or courier service, or mailed by U.S. registered or certified mail (return
receipt requested), or sent via facsimile (with receipt of confirmation of complete transmission)
to the party at the party’s last known address or facsimile number or at such other address or
facsimile number as the party may have previously specified by like notice. All notices or other
communications hereunder shall be deemed to have been delivered (a) if by personal delivery or
commercial messenger, at the time of the delivery thereof to the receiving party at the address of
such party as set forth above, (b) if sent by facsimile transmission, at the time receipt has been
acknowledged by electronic confirmation or otherwise, (c)if sent by courier service, on the next
business day following the day such notice is delivered to the courier service, or (d) if sent by
registered or certified mail, on the 5th business day following the day such mailing is made.

     11.  Miscellaneous.

          11.1. No Guarantee of Any Tax Consequences. Notwithstanding any other provision of
this Agreement, the Company makes no guarantee with respect to any federal, state or local incomes
tax consequences including, without limitation, under Section 409A of the Code.

          11.2. Severability. In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions
shall in no way be affected or impaired thereby.

          11.3. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which together shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set
forth above.

	 	 	 	 	 
	 	ALTUS PHARMACEUTICALS INC.

 	 
	 	                    /s/ Jonathan I Lieber
 	 
	 	Name:  	Jonathan I. Lieber 	 
	 	Title:  	Vice President, Chief Financial
Officer and Treasurer` 	 
	 
	 	EXECUTIVE CHAIRMAN

 	 
	 	/s/ David Pendergast
 	 
	 	David D. Pendergast 	 
	 	 	 
	 

6exv10w21

 

EXHIBIT 10.21

Altus Pharmaceuticals Inc.

                    February 4, 2008

Mr. Sheldon Berkle

[Address]

Dear Shelly:

     The purpose of this letter agreement (the “Agreement”) is to set forth the terms of your
resignation from Altus Pharmaceuticals Inc. (the “Company”). Payment of the Separation Pay
described below is contingent on your agreement to and compliance with the terms of this Agreement.
Neither this offer to you nor the Company’s entering into this Agreement shall constitute an
admission by the Company.

     1. Separation of Employment. Your resignation as President and Chief Executive
Officer of the Company is effective as of close of business on Monday, February 4, 2008. Your
employment with the Company therefore ends on February 4, 2008 (the “Separation Date”) in
accordance with your resignation letter delivered as of that date. You acknowledge that from and
after the Separation Date, you shall have no authority to, and shall not, represent yourself as an
employee or executive officer of the Company.

     2. Post-Resignation Payments and Benefits

          a. Separation Pay

     Pursuant to your Severance and Change in Control Agreement with the Company dated as of May
17, 2007 (the “Change in Control Agreement”) and your May 6, 2005 Offer Letter, as modified by the
Change in Control Agreement, in exchange for the mutual promises set forth in this Agreement, the
Company agrees to provide separation pay to you representing your salary for one year in the gross
sum of Four Hundred and Seventy-Five Thousand Dollars ($475,000.00), less all applicable federal,
state, local and other employment-related deductions (“Separation Pay”). The Separation Pay shall
be payable in accordance with the Company’s regular payroll practices for twelve months and such
payments will be made on at least a monthly basis.

     Provided you do not revoke this Agreement, which you are entitled to do, and which is
explained in Section 5 below, the first monthly installment of the Separation Pay shall be made in
the first payroll period following the date this Agreement becomes effective, which is the eighth
(8th) day after you execute this Agreement. However, because you are a “specified employee” of the
Company (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and
any successor statute, regulation and guidance thereto (“Code Section 409A”)) as of your Separation
Date, then limited only to the extent necessary to comply with the

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requirements of Code Section 409A, any payments to which you may become entitled under this
Section 2(a) which are subject to Code Section 409A (and not otherwise exempt from its application)
will be withheld until the first (1st) business day of the seventh (7th) month following
your termination of employment, at which time you shall be paid an aggregate amount equal to the
accumulated, but unpaid, payments otherwise due under the terms of this Section 2(a).
Notwithstanding the foregoing, the Company does not presently expect that, as a specified employee,
there will be a delay in the payment of the Separation Pay to you following the effective date of
this Agreement.

     Furthermore, if any of the benefits set forth in this Section 2(a) are deferred compensation
under Code Section 409A, your termination of employment triggering payment of such benefits must
constitute a “separation from service” under Code Section 409A before distribution of such benefits
can commence. For purposes of clarification, this paragraph shall not cause any forfeiture of
benefits, but shall only act as a delay until such time as a “separation from service” occurs. The
Company views your “separation from service” to be the Separation Date.

          b. Benefits

     Should you decide to continue your dental insurance pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company also agrees to cover
the cost of your COBRA payments to continue your dental insurance coverage for eighteen (18) months
following the Separation Date.

     By law, and regardless of whether you sign this Agreement, you will have the right to continue
your dental insurance pursuant to the provisions of COBRA. You will receive your COBRA notice
under separate cover. If you do not elect COBRA, your dental insurance coverage will cease on
February 29, 2008.

     You were not, as of the Separation Date, insured under the Company’s health insurance plan.

          c. Bonus

     The Company has agreed to pay you a bonus in connection with your performance during the
Company’s fiscal year ending December 31, 2007 in the amount of One Hundred Sixty-Six Thousand and
Two-Hundred Fifty Dollars ($166,250.00). The Company will make such payment to you, less
applicable payroll withholdings, no later than March 15, 2008.

          d. Home and Home Furnishings Lease Arrangements/Relocation

     In the event you are successful in negotiating a buyout of your home lease and home
furnishings lease for your Cambridge, Massachusetts rental home, the Company will pay you the
amount of the buyout in a lump sum, provided such buyout, together with the tax reimbursement

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referenced herein, does not exceed the maximum reimbursement amount of $25,000. If the buyout
reimbursement is deemed personally taxable to you, the Company will thereafter reimburse you in an
amount sufficient to make you whole after taxes, provided that the buyout amount and tax
reimbursement amount do not exceed $25,000.

     If you are unable to agree to a buyout, the Company will pay you an amount equal to the cost
of your home lease and home furnishings on a monthly basis for a period of up to twelve (12) months
following the Effective Date of this Agreement, up to a maximum amount of $25,000, inclusive of the
taxes imposed upon you, if any, by virtue of such reimbursement.

     You have represented to the Company that you bought out your automobile lease last year.

     The Company has agreed to reimburse you the cost of relocating your automobile and your
household possessions from Cambridge, Massachusetts to Naples, Florida, including the reasonable
costs of transportation for you to and from such areas as needed to effectuate the relocation, up
to a maximum of $25,000, which maximum reimbursement shall include any amounts necessary to make
you whole for any relocation expenses that are deemed personally taxable to you.

          e. Tax Consequences. The Company makes no guarantee of any tax consequences,
including, without limitation, under Code Section 409A. You acknowledge that you have had the
opportunity to consult with your own legal counsel and tax advisor with respect to the terms of
this Agreement.

******

     You acknowledge and agree that the payments and benefits set forth in this Section 2 are not
otherwise due or owing to you under any Company employment agreement (oral or written) or Company
policy or practice absent your execution of this Agreement. You also agree that the Separation Pay
to be provided to you is not intended to and does not constitute a severance plan and does not
confer a benefit on anyone other than the parties to this Agreement. You further acknowledge that
except for the specific financial consideration set forth in this Agreement, and your final wages
and vacation pay, which shall be paid to you in accordance with the Company’s regular payroll
practices and applicable law upon the Separation Date (whether or not you sign this Agreement), you
are not now and shall not in the future be entitled to any other compensation from the Company
including, without limitation, other wages, commissions, bonuses, vacation pay, holiday pay, paid
time off or any other form of compensation or benefit.

     3. Equity Interests and Extension of Option Exercise Period.  The Company has agreed,
as additional consideration for this Agreement, to allow you to exercise any stock options vested
as of the Separation Date within six months following the Separation Date, i.e., up until August 4,
2008, but you may not exercise such options thereafter. Any stock option you choose to exercise
shall only be exercisable to the extent it has become exercisable and is in effect on the
Separation Date.

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     4. Confidentiality. You expressly acknowledge and agree to the following:

     (i) The Non-Competition, Non-Solicitation, Non-Disclosure and Assignment Agreement (the
“Non-Compete Agreement”) annexed to the Company’s Offer Letter to you dated May 6, 2005 shall
survive the signing of this Agreement. Further, you agree that you will abide by any and all
common law and/or statutory obligations relating to protection and non-disclosure of the Company’s
trade secrets and/or confidential and proprietary documents and information. You shall not be
deemed to be in breach of this confidentiality provision (a) in the event such information is
already in the public domain, (b) in the event that you are required to disclose confidential
information in connection with a judicial or special proceeding or pursuant to court order, and (c)
if you obtain the Company’s prior written permission to disclose such information;

     (ii) that all information relating in any way to the negotiation of this Agreement, including
the terms and amount of financial consideration provided for in this Agreement, shall be held
confidential by you and shall not be publicized or disclosed to any person (other than an immediate
family member, legal counsel or financial advisor, provided that any such individual to whom
disclosure is made agrees to be bound by these confidentiality obligations), business entity or
government agency (except as mandated by state or federal law), except that nothing in this
paragraph shall prohibit you from participating in an investigation with a state or federal agency
if requested by the agency to do so, provided, however, that you and the Company
acknowledge that the Company is required to disclose the material terms of this Agreement in its
reports to the Securities and Exchange Commission;

     (iii) that you will not make any statements that are professionally or personally disparaging
about, or adverse to, the interests of the Company (including its officers, directors, employees
and consultants) including, but not limited to, any statements that disparage any person, product,
service, finances, financial condition, capability or any other aspect of the business of the
Company, and that you will not engage in any conduct which could reasonably be expected to harm
professionally or personally the reputation of the Company and its officers, directors, employees
and consultants; and

     (iv) the Company will ensure that its senior officers, Directors and managers will not make
any statements that are professionally or personally disparaging about, or adverse to, your
interests, including, but not limited to, any statements that disparage your performance,
character, finances, or capabilities or could otherwise detrimentally affect your reputation.

     5. Your Release of Claims. You hereby agree and acknowledge that by signing this
Agreement and accepting the Separation Pay, and for other good and valuable consideration, you are
waiving your right to assert any and all forms of legal claims against the Company1/ of
any

 

			
	1/	 	For purposes of this Agreement, the Company includes
the Company and any of its divisions, affiliates (which means all persons and
entities directly or indirectly controlling, controlled by or under common
control with the Company), subsidiaries and all other related entities, and its
and their directors, officers, employees, trustees, agents, successors and
assigns.

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kind whatsoever, whether known or unknown, arising from the beginning of time through the date
you execute this Agreement (the “Execution Date”). Except as set forth below, your waiver and
release herein is intended to bar any form of legal claim, complaint or any other form of action
(the “Claim” or “Claims”) against the Company seeking any form of relief, including, without
limitation, equitable relief (whether declaratory, injunctive or otherwise), the recovery of any
damages, or any other form of monetary recovery whatsoever (including, without limitation, back
pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys fees
and any other costs) against the Company, for any alleged action, inaction or circumstance existing
or arising through the Execution Date.

     Without limiting the foregoing general waiver and release, you specifically waive and release
the Company from any Claim arising from or related to your prior employment relationship with the
Company or the termination thereof, including, without limitation:

	 	**	 	Claims under any state or federal discrimination, fair employment practices or
other employment related statute, regulation or executive order (as they may have been
amended through the Execution Date) prohibiting discrimination or harassment based upon
any protected status including, without limitation, race, national origin, age, gender,
marital status, disability, veteran status or sexual orientation. Without limitation,
specifically included in this paragraph are any Claims arising under the federal Age
Discrimination in Employment Act, the Civil Rights Acts of 1866 and 1871, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With
Disabilities Act and any similar Massachusetts or other state statute.
	 
	 	**	 	Claims under any other state or federal employment related statute, regulation
or executive order (as they may have been amended through the Execution Date) relating
to any other terms and conditions of employment.
	 
	 	**	 	Claims under any state or federal common law theory including, without
limitation, wrongful discharge, breach of express or implied contract, promissory
estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing,
violation of public policy, defamation, interference with contractual relations,
intentional or negligent infliction of emotional distress, invasion of privacy,
misrepresentation, deceit, fraud or negligence.
	 
	 	**	 	Any other Claim arising under state or federal law.

     You acknowledge and agree that, but for providing this waiver and release, you would not be
receiving the economic benefits being provided to you under the terms of this Agreement.

     Nothing in this waiver and release shall limit or impair (i) your right to enforce the terms
of this Agreement; (ii) claims for indemnification in your capacity as an officer or director of
the Company under the Company’s Certificate of Incorporation, By—laws or policy, plan or
agreement, if any, providing for director or officer indemnification and/or insurance coverage,

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(iii) rights to receive insurance payments under any policy maintained by the Company, provided
such payments are permitted under the terms of any applicable insurance plan, and (iv) rights to
receive any accrued and vested benefits as provided in applicable Company plans, documents, or
policies in accordance with the terms of any such Company plans, documents or policies.

     It is the Company’s desire and intent to make certain that you fully understand the provisions
and effects of this Agreement. To that end, you have been encouraged and given the opportunity to
consult with legal counsel for the purpose of reviewing the terms of this Agreement. Also, because
you are over the age of 40 and consistent with the provisions of the Age Discrimination in
Employment Act (“ADEA”), which prohibits discrimination on the basis of age, the Company is
providing you with twenty-one (21) days in which to consider and accept the terms of this Agreement
by signing below and returning it to the Company by February 26, 2008.

     You may rescind your assent to this Agreement if, within seven (7) days after you sign this
Agreement, you deliver by hand or send by mail (certified, return receipt and postmarked within
such 7 day period) a notice of rescission to the Company. The eighth (8th) day
following your signing of this Agreement is the Effective Date.

     Also, consistent with the provisions of federal and state discrimination laws, nothing in this
waiver and release shall be deemed to prohibit you from challenging the validity of this waiver and
release under such discrimination laws (the “Discrimination Laws”) or from filing a charge or
complaint of age or other employment related discrimination with the Equal Employment Opportunity
Commission (“EEOC”) or state equivalent, or from participating in any investigation or proceeding
conducted by the EEOC or state equivalent. Further, nothing in this waiver and release or
Agreement shall be deemed to limit the Company’s right to seek immediate dismissal of such charge
or complaint on the basis that your signing of this Agreement constitutes a full release of any
individual rights under the Discrimination Laws, or to seek restitution to the extent permitted by
law of the economic benefits provided to you under this Agreement in the event that you
successfully challenge the validity of this waiver and release and prevail in any claim under the
Discrimination Laws.

     6. Entire Agreement/Modification/Waiver/Choice of Law/Enforceability. You acknowledge
and agree that except for your Non-Compete Agreement, this Agreement supersedes any and all prior
or contemporaneous oral and/or written agreements between you and the Company, and sets forth the
entire agreement between you and the Company. No variations or modifications hereof shall be
deemed valid unless reduced to writing and signed by the parties hereto. The failure of the
Company to seek enforcement of any provision of this Agreement in any instance or for any period of
time shall not be construed as a waiver of such provision or of the Company’s right to seek
enforcement of such provision in the future. This Agreement shall be deemed to have been made in
the Commonwealth of Massachusetts and shall be construed in accordance with the laws of
Massachusetts without giving effect to conflict of law principles. The provisions of this
Agreement are severable, and if for any reason any part hereof shall be found to be unenforceable,
the remaining provisions shall be enforced in full.

6

 

     Any controversy, dispute or claim arising out of or in connection with this Agreement will be
settled by final and binding arbitration conducted in Boston, Massachusetts pursuant to the
national rules for the resolution of employment disputes of the American Arbitration Association.

     By executing this Agreement, you are acknowledging that: (1) you have carefully read and
understand the terms and effects of this Agreement, including Section 5 entitled Your Release of
Claims; (2) you understand that the Release of Claims in Section 5 is legally binding and by
signing this Agreement, you give up certain rights, including rights and claims under the Age
Discrimination in Employment Act; (3) you have been afforded sufficient time to understand the
terms and effects of this Agreement; (4) your agreements and obligations hereunder are made
voluntarily, knowingly and without duress; and (5) neither the Company nor its agents or
representatives have made any representations inconsistent with the provisions of this Agreement.

     The parties agree that the last act necessary to render this Agreement effective is for the
Company to sign the Agreement, and that the Agreement may be signed on one or more copies, each of
which when signed will be deemed to be an original, and all of which together will constitute one
and the same Agreement. If the foregoing correctly sets forth our understanding, please sign, date
and return the enclosed copy of this Agreement to me by February 26, 2008.

	 	 	 	 	 
	 	Sincerely,

ALTUS PHARMACEUTICALS INC.

 	 
	 	By:  	/s/ Jonathan I Lieber
 	 
	 	 	[name] 	 
	 	Its: 	 Vice President, Chief Financial Officer
and Treasurer 	 
		 	 	 
	 	Dated: 	February 4, 2008	 
	 

	 	 	 
	Confirmed, Agreed and Acknowledged:
	 	 
	 
	 	 
	/s/ Sheldon Berkle
	 	 
	 

Sheldon Berkle

	 	 
	 
	 	 
	Dated: February 4, 2008
	 	 

7

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