Document:

exv10w42

Exhibit 10.42

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

EXECUTION COPY

CONSENT AND RELEASE AGREEMENT

     THIS CONSENT AND RELEASE AGREEMENT (this “Agreement”) is made and entered into
effective as of December 18, 2009 (the “Effective Date”), by and among The Medicines Company, a
Delaware corporation with offices at 8 Sylvan Way, Parsippany, NJ 07054 (“MDCO”), Washington
Cardiovascular Associates, LLC, a Maryland limited liability company with offices at 11410 River
Road, Potomac, MD 20854 (“WCA”), HDLT LLC, a Delaware limited liability company with offices at 95
South Terrace, Short Hills, NJ 07078 (“HDLT”), H. Bryan Brewer, Jr., an individual residing at
11410 River Road, Potomac, MD 20854 (“Brewer”), Silvia Santamarina-Fojo, an individual residing at
11410 River Road, Potomac, MD 20854 (“Santamarina-Fojo” and, together with WCA and Brewer, the
“Brewer Parties”) and Michael Matin, an individual residing at 95 South Terrace, Short Hills, NJ
07078 (“Matin” and, together with Brewer, the “Principals”).

     WHEREAS, the Principals own all of the membership interests of HDLT, and Brewer and
Santamarina-Fojo (who is the spouse of Brewer) own all of the membership interests of WCA;

     WHEREAS, WCA and MDCO previously entered into a Confidential Disclosure Agreement,
effective as of May 22, 2009, between them (the “CDA”), relating to certain intellectual property
rights (collectively, the “ACS Asset”) to be licensed from Pfizer Inc., a Delaware corporation
(“Pfizer”);

     WHEREAS, pursuant to the CDA the Brewer/Matin Parties (defined below) made MDCO
aware of the opportunity to license the ACS Asset from Pfizer and provided MDCO with certain
information related to such opportunity;

     WHEREAS, since the date of the CDA, MDCO has conducted discussions (the
“Brewer/Matin Discussions”) with WCA, HDLT and the Principals (collectively and together with
Santamarina-Fojo, the “Brewer/Matin Parties”) concerning a potential transaction between MDCO and
Pfizer relating to the ACS Asset and the Brewer/Matin Parties’ potential participation in such
transaction;

     WHEREAS, while the Brewer/Matin Discussions were ongoing, MDCO, with the knowledge
and consent of the Brewer/Matin Parties, conducted discussions (the “Pfizer Discussions”) with
Pfizer to negotiate the terms of the proposed license of the ACS Asset from Pfizer, which terms are
set forth in the License Agreement, dated as of the Effective Date, by and between MDCO and Pfizer
(the “Pfizer License Agreement”), attached hereto (with certain commercially sensitive terms
redacted therefrom) as Exhibit A;

     WHEREAS, the Brewer/Matin Parties and MDCO (collectively, the “Consenting Parties”)
desire to (i) provide for certain payments to be made by MDCO to the Brewer/Matin Parties in lieu
of the Brewer/Matin Parties’ participation in the development and commercialization of the ACS
Asset in any other manner, and (ii) document the Brewer/Matin Parties’ consent to the Pfizer
License Agreement and the transactions contemplated thereby and the Consenting Parties’ mutual
covenants and releases of claims in connection therewith, in each case on the terms and conditions
of this Agreement; and

 

 

     WHEREAS, the Consenting Parties have placed fully executed originals of this Agreement in
escrow with each of Goodwin Procter LLP (the “Brewer/Matin Agent”) and Wilmer Cutler Pickering Hale
and Dorr LLP (the “MDCO Agent”), to be released by each of them from such escrow on the Effective
Date as specified in this Agreement.

     NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each of the Consenting Parties (specifically including WCA, HDLT and
Santamarina-Fojo despite the fact that payments hereunder are to be received by the Principals
except as the Principals otherwise designate pursuant to Section 3(a)(ii), it being acknowledged
and agreed by each of the Brewer/Matin Parties for all purposes that each of WCA, HDLT and
Santamarina-Fojo is receiving sufficient consideration hereunder by reason of the payments to be
made to the Principals (which payments shall be received by the Principals in their individual
capacities and for the benefit
of each of WCA and HDLT), WCA’s, HDLT’s and Santamarina-Fojo’s access to the reports to be
provided by MDCO hereunder, and otherwise), the Consenting Parties hereby agree as follows:

     1. Certain Definitions. Capitalized terms used in this Agreement without
definition shall have the respective meanings given them in the Pfizer License Agreement. For
purposes of this Agreement the Pfizer License Agreement shall be the form of such agreement as is
attached hereto as Exhibit A on the Effective Date and shall not include any amendments to such
agreement unless and until MDCO and both of the Principals have agreed in writing to include such
amendments to the Pfizer License Agreement for purposes of this Agreement (provided, however, for
clarity, that no consent, approval or agreement of any of the Principals or any other Brewer/Matin
Party will be required for any amendment to the Pfizer License Agreement).

     2. Consent to Pfizer License Agreement. Effective as of the time of release
of this Agreement from escrow on the Effective Date as specified in Section 3(b), each of the
Brewer/Matin Parties hereby consents to the execution, delivery and performance of the Pfizer
License Agreement by each party thereto. MDCO shall give prompt written notice of any amendment or
termination of the Pfizer License Agreement (except to the extent that any such amendment affects
the provisions of the Pfizer License Agreement redacted on Exhibit A hereto or similar commercially
sensitive terms) to each of the Principals, which notice (and the contents thereof) shall
constitute MDCO Confidential Information (as defined below) for purposes of this Agreement.

     3. Upfront Payment; Escrow Release.

          (a) On or prior to the Effective Date, MDCO has deposited with the Brewer/Matin
Agent the aggregate amount of $7,500,000 (the “Upfront Payment”), to be allocated as follows:

               (i) to each Principal, the sum of $[**] (amounting to $[**] for both Principals in
the aggregate); and

               (ii) to one or more Persons designated by the Principals jointly, in writing, to
MDCO prior to the Effective Date, the sum of $[**] as reimbursement of the

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Brewer/Matin Parties’ reasonable out-of-pocket third party costs and expenses actually incurred in connection with the
transactions relating to the ACS Asset, documented in a manner reasonably satisfactory to MDCO.

          (b) The effectiveness of this Agreement shall be deemed to occur at such time
(occurring after this Agreement in fully executed form has been deposited in escrow with each of
the Brewer/Matin Agent and the MDCO Agent and the full amount of the Upfront Payment has been
deposited in escrow with the Brewer/Matin Agent) as MDCO or its counsel confirms to the
Brewer/Matin Agent in writing (the “MDCO Release Confirmation”) that the Pfizer License Agreement
has been entered into by each of MDCO and Pfizer substantially in the form of Exhibit A hereto
(disregarding for this purpose the redacted portions of such Exhibit A). Upon delivery of the MDCO
Release Confirmation to the Brewer/Matin Agent, (i) the Brewer/Matin Agent shall be deemed
authorized to release the full amount of the Upfront Payment from escrow and to deliver the funds
comprising the Upfront Payment to the Brewer/Matin Parties or their designees as specified herein,
(ii) the fully executed form of this Agreement shall be deemed released from escrow (x) by the
Brewer/Matin Agent to the Brewer/Matin Parties and (y) by the MDCO Agent to MDCO, and (iii) this
Agreement shall be deemed released from escrow and effective for all purposes. For clarity, once
the MDCO Release Confirmation has been delivered to the Brewer/Matin Agent, no other action by any
Person shall be necessary to authorize the release of this Agreement or the Upfront Payment from
escrow as specified herein, and each of MDCO and the Brewer/Matin Parties (and their respective
counsel) is authorized to date this Agreement as of the date on which such release occurs (which
shall constitute the Effective Date hereunder) upon such release.

          (c) Upon their release from escrow, the payments made pursuant to this Section 3
shall be one-time upfront, non-refundable and non-creditable payments.

     4. Milestone Payments. MDCO shall notify the Brewer/Matin Parties no later
than when it notifies Pfizer of the achievement of the milestones described in Sections 4(a), 4(b)
and 4(c) below. MDCO shall pay, at the times specified below in this Section 4, the milestone
payment amounts specified below in this Section 4:

          (a) On the date on which the milestone payment described in Section 5.1.2 of the
Pfizer License Agreement as payable “upon Commencement of the first Phase III Clinical Trial of a
Product conducted by LICENSEE, its Affiliates or its or their permitted sublicensees” first becomes
due and payable by MDCO under the Pfizer License Agreement, but in no event later than the date the
milestone payment for such milestone is paid to Pfizer under the Pfizer License Agreement, to each
Principal, the sum of $[**] (amounting to $[**] for both Principals in the aggregate).

          (b) On the date on which the milestone payment described in Section 5.1.2 of the
Pfizer License Agreement as payable “upon receipt by LICENSEE, its Affiliates or its or their
sublicensee(s) of the first Regulatory Approval by the FDA for a Product” first becomes due and
payable by MDCO under the Pfizer License Agreement, but in no event later than the date the
milestone payment for such milestone is paid to Pfizer under the Pfizer License Agreement, to each
Principal, the sum of $[**] (amounting to $[**] for both Principals in the aggregate).

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          (c) On the date on which the milestone payment described in Section 5.1.2 of the
Pfizer License Agreement as payable “upon receipt by LICENSEE, its Affiliates or its or their
sublicensee(s) of the first Regulatory Approval by the EMEA for a Product, including pricing and
reimbursement approval with the applicable Regulatory Authorities in three Major European
Countries” first becomes due and payable by MDCO under the Pfizer License Agreement, but in no
event later than the date the milestone payment for such milestone is paid to Pfizer under the
Pfizer License Agreement, to each Principal, the sum of $[**] (amounting to $[**] for both
Principals in the aggregate).

          (d) All milestone payments specified in this Section 4 as being payable by MDCO
under this Agreement shall be non-creditable and non-refundable payments and shall be subject to
the provisions of Section 5.1.2 of the Pfizer License Agreement (other than the last sentence of
such Section 5.1.2), mutatis mutandis, including the requirement that, regardless of the number of
Products that achieve a milestone, none of the milestone payments specified in this Section 4 shall
be payable more than once.

          (e) MDCO shall provide the Brewer/Matin Parties a copy of each report it provides to
Pfizer pursuant to the third sentence of Section 4.1 of the Pfizer License Agreement at such time
as it provides such report to Pfizer. All such reports shall constitute MDCO Confidential
Information for purposes of this Agreement. In addition, if MDCO so requests in writing, each of
the Brewer/Matin Parties shall enter into a confidentiality agreement with Pfizer reasonably
satisfactory to Pfizer (but not, without the consent of the Brewer/Matin Parties, more restrictive
than the terms and provisions of this Agreement) to further protect the confidentiality of such
reports, of all other information relating to the Pfizer License Agreement and of all data,
documentation and arrangements contemplated thereby (such as, without limitation, royalty or Net
Sales reports (and certifications relating thereto), audit requests and audit reports) or any
amendment thereto.

     5. Continuing Payments; Reports.

          (a) MDCO shall pay to each Principal, on each date on which Royalty payments become
due and payable by MDCO pursuant to Section 5.1.3 of the Pfizer License Agreement, a continuing
payment based on Net Sales of all Products in the Territory, where such continuing payments shall
be calculated each Calendar Quarter by multiplying the Net Sales for such Calendar Quarter by [**]
percent ([**]%) (amounting to [**] percent ([**]%) for both Principals in the aggregate); provided,
however, that if Section 5.1.3(b) of the Pfizer License Agreement becomes operative with respect to
any Product in any country in the Territory, then the continuing payment rate payable with respect
to Net Sales of such Product in such country pursuant to this Section 5 to each Principal shall be
reduced to [**] percent ([**]%) (amounting to [**] percent ([**]%) for both Principals in the
aggregate) commencing at the time such Section 5.1.3(b) first became operative with respect to such
Product in such country and continuing for such period as such Section 5.1.3(b) remains effective
with respect to such Product in such
country. The fact that Section 5.1.3(b) of the Pfizer License Agreement has become operative,
or has ceased to be operative, with respect to any Product in any country in the Territory shall
constitute MDCO Confidential Information for purposes of this Agreement.

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          (b) Continuing payments under this Section 5 shall be payable on a
Product-by-Product and country-by-country basis commencing as of the First Commercial Sale of the
relevant Product in the relevant country and ending on the 30th anniversary of the
Effective Date (provided that if the Royalty Term for such Product in such country shall expire
earlier than the 30th anniversary of the Effective Date, the continuing payments for
such Product in such country shall terminate as of the date such Royalty Term expires), and shall
be otherwise calculated and paid in the manner, and at the times, specified in Sections 5.1.3,
5.1.6, 5.2 and 5.3 of the Pfizer License Agreement with respect to Royalties payable thereunder,
mutatis mutandis and as applicable.

          (c) All continuing payments made pursuant to Section 5(a) shall be accompanied by
delivery to the Brewer/Matin Parties of (i) a copy of the report delivered by MDCO to Pfizer under
Section 5.1.3 of the Pfizer License Agreement for the applicable Calendar Quarter (the “Pfizer
Royalty Report”), with any information relating to the calculation of Royalties payable to Pfizer
and any other information not directly related to the calculation of Net Sales redacted therefrom
in MDCO’s discretion, and (ii) MDCO’s calculation of continuing payments payable to the relevant
Principal hereunder based on the applicable continuing payments rate set forth in Section 5(a) and
the Net Sales (including all Deductions) reported on such Pfizer Royalty Report. Each report
delivered to the Brewer/Matin Parties pursuant to the preceding sentence shall be accompanied by a
certification, signed on behalf of MDCO by MDCO’s chief financial officer, to the effect that the
Pfizer Royalty Report delivered to the Brewer/Matin Parties is identical to the report delivered to
Pfizer pursuant to Section 5.1.3 of the Pfizer License Agreement (other than with respect to any
information redacted therefrom in accordance with this Section 5(c)), subject to such adjustments
as may be reasonably necessary to reflect any amendments to the Pfizer License Agreement entered
into after the Effective Date. MDCO shall also furnish to the Brewer/Matin Parties a copy of any
audit request delivered to MDCO by Pfizer pursuant to Section 6.1.2 of the Pfizer License Agreement
and of any audit report or other information provided to Pfizer in connection with Section 6.1.2 of
the Pfizer License Agreement by an independent auditor appointed pursuant to Section 6.1.2 of the
Pfizer License Agreement, in each case reasonably promptly after the same becomes available to MDCO
in writing and with any information relating to the calculation of Royalties payable to Pfizer and
any other information not directly related to the calculation of Net Sales redacted therefrom in
MDCO’s discretion. All materials, reports and information furnished to the Principals pursuant to
this Section 5(c) shall constitute MDCO Confidential Information for purposes of this Agreement.

          (d) With respect to certain audit matters:

               (i) In the event that the Pfizer does not make at least [**] audit request pursuant
to Section 6.1.2 of the Pfizer License Agreement during the [**]-year period commencing on the
Effective Date (or during any [**]-year period commencing at expiration of the preceding [**]-year
period), with notice of such audit request delivered to the Brewer/Matin Parties as required by
Section 5(c), the Brewer/Matin Parties shall have the right, exercisable by written notice to MDCO
executed by each of the Principals and delivered to MDCO not later than [**] days after expiration
of the applicable [**]-year period, to engage an independent auditor reasonably acceptable to MDCO
to examine the Relevant Records for the purpose of verifying compliance with the payment provisions
of Sections 4 and 5 for such [**]-year period.

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Such audit may be required by the Brewer/Matin Parties not more than [**] with respect to any [**]-year period described above (and, for the
avoidance of doubt, may be so required only if the Brewer/Matin Parties do not receive a copy of at
least [**] audit request delivered to MDCO by Pfizer pursuant to Section 6.1.2 of the Pfizer
License Agreement with respect to such [**]-year period, regardless of whether any such audit
request delivered to MDCO under the Pfizer License Agreement covers the entire such [**]-year
period or any [**]-month or other portion thereof), and may cover all or any portion of such
[**]-year period (but not less than a [**]-month period).

               (ii) Any such audit shall be requested by the Brewer/Matin Parties at least [**]
days in advance, and shall be conducted during MDCO’s normal business hours and otherwise in a
manner that minimizes any interference with MDCO’s business operations. The auditor shall enter
into a reasonable confidentiality agreement with MDCO; shall only be permitted to disclose to the
Brewer/Matin Parties the amount of any discrepancy, with respect to the aggregate periods audited,
between the aggregate payments made by MDCO
hereunder with respect to such periods and the aggregate amount payable by MDCO hereunder with
respect to such periods, and shall not be permitted to disclose to the Brewer/Matin Parties any
other information; and shall deliver its final audit report (the “B/M Audit Report”) simultaneously
to the Brewer/Matin Parties and to MDCO.

               (iii) All costs and expenses of any such audit shall be borne by the Brewer/Matin
Parties and not by MDCO, in all instances (regardless of the outcome of any audit). The
Brewer/Matin Parties shall also be obligated to pay to MDCO, not later than [**] days after
delivery of the B/M Audit Report, an audit fee (the “B/M Audit Fee”) in the amount of $[**] (which
amount may, if not timely paid and in MDCO’ discretion, be deducted from any future payments to be
made by MDCO to the Principals hereunder), in each case unless the B/M Audit Report shows that, for
the periods so audited (in the aggregate), the aggregate payments made by MDCO hereunder with
respect to such periods represented less than 95% of the aggregate amounts payable by MDCO
hereunder with respect to such periods (the “Deficiency Threshold”).

               (iv) If the B/M Audit Report specifies that MDCO underpaid any amounts payable by it
hereunder, then MDCO shall be obligated, within [**] days after MDCO’s receipt of the B/M Audit
Report setting forth such deficiency and the final resolution of any disputes relating thereto, to
pay to each Principal (A) one-half of the amount of such deficiency (amounting to the entire amount
of such deficiency for both Principals in the aggregate) and (B) if (but only if) the B/M Audit
Report shows that, for the periods audited thereby (in the aggregate), the aggregate payments made
by MDCO hereunder with respect to such periods were below the Deficiency Threshold, then the
further sum of $[**] (amounting to $[**] for both Principals in the aggregate). If the B/M Audit
Report specifies that MDCO overpaid any amounts payable by it hereunder, then the Brewer/Matin
Parties shall be obligated to pay to MDCO the amount of any such overpayment within the same [**]
day period (which amount may, if not timely paid and in MDCO’s discretion, be deducted from any
future payments to be made by MDCO to the Principals hereunder).

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               (v) All materials, reports and information furnished to the Principals pursuant to
this Section 5(d) shall constitute MDCO Confidential Information for purposes of this Agreement.

               (vi) Any payment to be made hereunder pursuant to the outcome of any audit conducted
pursuant to this Section 5(d) shall be subject to the application of the provisions of Sections
5.1.6, 5.2 and 5.3 of the Pfizer License Agreement.

          (e) With respect to certain tax matters:

               (i) Unless otherwise required by applicable law, MDCO and the Brewer/Matin Parties
shall treat all payments made pursuant to this Agreement to any of the Brewer/Matin Parties as
compensation for services.

               (ii) The Brewer/Matin Parties have reviewed with their own tax advisors the federal,
state, local and foreign tax consequences of payments contemplated by this Agreement. The
Brewer/Matin Parties are relying solely on such advisors and not on any statements or
representations of MDCO or any of its agents. The Brewer/Matin Parties acknowledge and agree that
MDCO has the right to deduct from payments of any kind otherwise due to the Brewer/Matin Parties
pursuant to this Agreement any federal, state or local taxes of any kind required by law to be
withheld with respect to such payments. The Brewer/Matin Parties understand that they (and not
MDCO) shall be responsible for their own tax liability that may arise as a result of payments
contemplated by this Agreement. To the extent that the Agreement or any payment or benefit
hereunder is compensation and shall be deemed not to comply with Section 409A of the Internal
Revenue Code of 1986, as amended, then neither MDCO, its Board of Directors nor its or their
designees or agents shall be liable to any of the Brewer/Matin Parties or any other Person for any
additional taxes, penalties, interest or other costs, expenses or losses incurred by any of the
Brewer/Matin Parties as the result thereof.

     6. Manner of Payment. Except as otherwise provided in Section 3 with
respect to Upfront Payment amounts placed in escrow with the Brewer/Matin Agent, amounts payable to
each Principal hereunder shall be paid by MDCO to such Principal’s bank account designated by such
Principal to MDCO in writing not later than
[**] days prior to the date of the applicable payment. For clarity, (a) all payments payable
to the Principals under this Agreement shall be payable to the Principals or their duly designated
assigns, successors or heirs, and (b) except with respect to amounts placed in escrow with the
Brewer/Matin Agent as set forth in Section 3 (which amounts shall be paid as set forth in such
Section 3), no Brewer/Matin Party other than the Principals and their duly designated assigns,
successors and heirs shall be entitled to any payments hereunder.

     7. Termination of CDA; Other Confidentiality Matters.

          (a) Effective as of the time of effectiveness of this Agreement, the CDA is hereby
terminated in its entirety and shall be of no further force or effect.

          (b) With respect to Project Information (as defined below):

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               (i) All Project Information (A) disclosed by any Brewer/Matin Party (or any of its
Affiliates, members, managers, partners, officers, directors, employees, agents, legal
representatives, attorneys, consultants or advisors (collectively, “Representatives”)) to MDCO or
any of its Representatives or (B) received by any Brewer/Matin Party or any of its Representatives
from either (1) MDCO or its Representatives or (2) Pfizer or its Representatives, in each case at
any time on or prior to the Effective Date, shall constitute MDCO Confidential Information (as
defined below).

               (ii) Subject to the provisions of Section 7(d) (to the extent applicable to Project
Information), all Project Information (A) shall be owned by MDCO, (B) may be used by MDCO in any
manner and for any purpose in connection with the Use of the Compounds and the Products, and (C)
may be disclosed by MDCO to any other Person in MDCO’s reasonable determination in connection with
such Use; provided that (1) MDCO shall not use Project Information for any purpose unrelated to
such Use and shall not disclose Project Information to any other Person except in connection with
such Use or otherwise as permitted by Section 7(d), and (2) subject to any obligation the relevant
Brewer/Matin Party owes to any third party, the Brewer/Matin Parties shall have the right to use
Project Information for any purpose other than in connection with any such Use and to disclose
Project Information to any other Person for a purpose not involving any such Use or otherwise as
permitted by Section 7(c). All developments made by a Consenting Party based on Project
Information shall be the property of such Consenting Party.

               (iii) “Project Information” shall mean (A) any and all inventions, trade secrets and
confidential business information, whether patentable or nonpatentable and whether or not reduced
to practice, know-how, ideas (including clinical trial design and regulatory strategy ideas),
processes, techniques, research and development information, copyrightable works, financial,
marketing and business data, business plans and all other data and information of a financial,
commercial, medical, scientific or technical nature, in each case to the extent and only to the
extent relating in whole or in part to the ACS Asset, the Licensed Technology, any Compound or the
Pfizer License Agreement, the terms thereof or any transactions or other matters contemplated
thereby; (B) any proprietary rights relating to any of the foregoing (including remedies against
infringements thereof and rights of protection of interest therein under the laws of all
jurisdictions); and (C) copies and tangible embodiments thereof.

               (iv) It is understood and agreed that none of the Brewer/Matin Parties makes any
representation or warranty concerning whether any Project Information (including any clinical trial
design ideas, market information, and regulatory strategy) will be accepted by any Regulatory
Authority or will result in the successful development of any Product or any Regulatory Approval.

          (c) With respect to MDCO Confidential Information (as defined below):

               (i) Each of the Brewer/Matin Parties agrees that, without the prior written consent
of MDCO, such Brewer/Matin Party will neither disclose to any other Person nor use for any purpose
any of the MDCO Confidential Information, except as permitted by Section 7(b) with respect to
Project Information and except to the extent that the relevant information (A) is disclosed to a
Brewer/Matin Party’s Representative under obligations of

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confidentiality and non-use not less stringent than those set forth in this Agreement (provided that the
Brewer/Matin Parties shall be responsible for any breach of such confidentiality and non-use
obligations by any of their Representatives), (B) is (at the time the information is first obtained
by the Brewer/Matin Parties) or becomes (after such time) known to the public or part of the public
domain through no breach of this Agreement by any Brewer/Matin Parties or any of their
Representatives, or (C) is required by law, regulation, court order or other legal process to be
disclosed (provided that, with respect to any disclosure under this clause (C), the party subject
to the requirement of such disclosure shall give MDCO reasonable prior notice of such disclosure
and shall cooperate with MDCO in minimizing the extent of such disclosure).

               (ii) Notwithstanding anything to the contrary set forth herein, (A) in the event
that the Principals wish to assign, pledge or otherwise transfer their rights to receive some or
all of the milestone payments or continuing payments payable under this Agreement to a third party
in compliance with the provisions of this Agreement (and solely in compliance with the provisions
of this Agreement), the Brewer/Matin Parties may disclose to such third party copies of this
Agreement and of the notices, certifications and reports delivered to the Principals pursuant to
Sections 2, 4(e), 5(a), 5(c) and 5(d) hereof in connection with any such proposed assignment,
provided that the Brewer/Matin Parties shall hold each such third party, with respect to any such
materials disclosed to it, to written obligations of confidentiality and non-use with terms and
conditions at least as restrictive as those set forth in this Agreement (and the Brewer/Matin
Parties shall be responsible to MDCO for any breach by any such third party of any such obligations
of confidentiality and non-use), and (B) the Brewer/Matin Parties may disclose to a third party,
subject to written obligations of confidentiality and non-use with terms and conditions at least as
restrictive as those set forth in this Agreement, solely the facts that the Brewer/Matin Parties
made MDCO aware of the opportunity to license the ACS Asset from Pfizer and provided MDCO with
certain information related to such opportunity (and the Brewer/Matin Parties shall be responsible
to MDCO for any breach by any such third party of any such obligations of confidentiality and
non-use). In addition, MDCO shall be named as an express third party beneficiary of any and all
obligations of confidentiality and non-use imposed on a third party pursuant to this Section
7(c)(ii), entitled to enforce any and all such obligations directly against each such third party.

               (iii) “MDCO Confidential Information” means, in addition to Project Information, the
terms and provisions of this Agreement and the Pfizer License Agreement; the occurrence and content
of the Brewer/Matin Discussions and the Pfizer Discussions; and all notices, reports,
certifications and information received by any Brewer/Matin Party or its Representatives pursuant
to Sections 2, 4(e), 5(a), 5(c) or 5(d).

          (d) MDCO agrees that, without the prior written consent of each of the Principals,
MDCO will not disclose to any other Person any of the B/M Confidential Information (as defined
below), except to the extent that the relevant information (i) is disclosed to MDCO’s
Representatives or actual or potential contractors, subcontractors, licensees, sublicensees,
acquirors, financing sources, strategic partners and other business counterparties of MDCO, or
their respective Representatives, in each case under obligations of confidentiality and non-use not
less stringent than those set forth in this Agreement (provided that MDCO shall be responsible for
any breach of such confidentiality and non-use obligations by any of its Representatives and such
other counterparties and their Representatives), (ii) is (at the time the

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information is first obtained by MDCO) or becomes (after such time) known to the public or part of the public domain
through no breach of this Agreement by MDCO or any of its Representatives, or (iii) is required by
law, regulation, court order or other legal process to be disclosed (provided that, with respect to
any disclosure under this clause (iii) that is not a SEC-Related Disclosure (as defined below),
MDCO shall give each of the Principals reasonable prior notice of such disclosure and shall
cooperate with each of the Principals in minimizing the extent of such disclosure). In addition,
MDCO shall have the right to disclose this Agreement (redacted to exclude financial terms hereof,
but for clarity, without limitation, without redaction of the provisions of Sections 7 and 8) to
Pfizer in connection with the Pfizer License Agreement, subject to reasonable obligations of
confidentiality. “B/M Confidential Information” means the terms and provisions of this Agreement
and the occurrence and content of the Brewer/Matin Discussions.

          (e) Each of the Brewer/Matin Parties acknowledges and agrees that MDCO is, or may in
the future become, subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended, the rules of The NASDAQ Stock Market, and other federal, state and foreign securities
laws, regulations promulgated thereunder, and rules of other stock exchanges and other
self-regulatory organizations (collectively, the “Securities Laws”), and that MDCO may be required
under the Securities Laws to disclose some or all B/M Confidential Information. If MDCO determines
in good faith that disclosure of all or a portion of B/M Confidential Information
is required or advisable under the Securities Laws (“SEC-Related Disclosure”) and that such
SEC-Related Disclosure will identify any of the Principals by name, then, to the extent reasonably
practicable, MDCO shall give each of the Principals an opportunity to review and provide comments
on such disclosure before it is made and will consider such comments in good faith, provided that
MDCO may accept or reject such comments in its sole discretion.

          (f) Each of the Consenting Parties agrees that the remedy at law for any breach of
this Section 7 would be inadequate and that the non-breaching Consenting Parties shall be entitled
to injunctive relief (without the necessity of posting bond or other security) in addition to any
other remedy it may have upon breach of any provision of this Section 7.

     8. Releases; Non-Disparagement.

          (a) By Brewer/Martin Parties. Effective as of the time of release of this
Agreement from escrow on the Effective Date as specified in Section 3:

               (i) Each of the Brewer/Matin Parties, on behalf of itself and each of its
predecessors, successors, Affiliates, members, managers, partners, officers, directors, employees,
agents, legal representatives, attorneys and assigns (and the predecessors, successors, assigns,
heirs, executors and administrators of each of them) (collectively, the “B/M Releasors”), hereby
releases and forever discharges each of MDCO and Pfizer and their respective predecessors,
successors, Affiliates, members, managers, partners, officers, directors, employees, agents, legal
representatives, attorneys and assigns (and the predecessors, successors, assigns, heirs, executors
and administrators of each of them) (collectively, the “B/M Released Parties”), from any and all
actions, causes of action, suits, costs, damages, judgments, claims, liabilities and demands of any
nature whatsoever, whether presently known or unknown, in law or in equity, which the B/M Releasors
ever had, now have or hereafter can, shall or may have for,

10

 

upon, or by reason or cause of any kind whatsoever (including the Pfizer License Agreement, the CDA, the Brewer/Matin Discussions, the
Pfizer Discussions, Project Information disclosed to any of the B/M Released Parties by any of the
B/M Releasors, and any matter relating to any thereof), from the beginning of the world to the
Effective Date (collectively, the “B/M Released Claims”); provided, however, that none of MDCO’s
obligations arising from or in connection with, or governed or evidenced by, this Agreement, or
claims and liabilities relating to this Agreement or to any breach of this Agreement, shall be
included as B/M Released Claims.

               (ii) The B/M Releasors agree that they will not commence or prosecute any action or
proceeding against the B/M Released Parties that concerns any of the B/M Released Claims. The B/M
Releasors further agree that they will not assert any B/M Released Claims against the B/M Released
Parties in any action or proceeding.

               (iii) The B/M Releasors represent and warrant that they are the sole owners of and
that they have not sold, assigned, transferred, conveyed or otherwise disposed of any claim, demand
or cause of action or any part thereof relating to any matter covered by this Section 8(a).

               (iv) Except to the extent necessary to enforce their rights under this Agreement in
a proceeding in a court of law or before an arbitrator, neither any of the Brewer/Matin Parties nor
any of their respective Affiliates shall, at any time prior to the [**] anniversary of the
Effective Date, publish, utter, broadcast, or otherwise communicate to any Person other than MDCO
any information, misinformation, comments, opinions, remarks, articles, letters, or any other form
of communication (whether written or oral and regardless of its believed truth) which is adverse
to, reflects unfavorably upon, or tends to disparage MDCO, the ACS Asset, the Pfizer License
Agreement, the Licensed Technology or any Compound or Product.

               (v) Each of the B/M Released Parties not party to this Agreement shall be an express
third party beneficiary of this Agreement, entitled to enforce the provisions of this Section 8
against any B/M Releasor in such B/M Released Party’s own name.

          (b) By MDCO. Effective as of the time of release of this Agreement from
escrow on the Effective Date as specified in Section 3:

               (i) MDCO, on behalf of itself and each of its predecessors, successors, Affiliates,
members, managers, partners, officers, directors, employees, agents, legal representatives,
attorneys and assigns (and the predecessors, successors, assigns, heirs, executors and
administrators of each of them) (collectively, the “MDCO Releasors”), hereby releases and forever
discharges the Brewer/Matin Parties and their respective predecessors, successors, Affiliates,
members, managers, partners, officers, directors, employees, agents, legal representatives,
attorneys and assigns (and the predecessors, successors, assigns, heirs, executors and
administrators of each of them) (collectively, the “MDCO Released Parties”), from any and all
actions, causes of action, suits, costs, damages, judgments, claims, liabilities and demands of any
nature whatsoever, whether presently known or unknown, in law or in equity, which the MDCO
Releasors ever had, now have or hereafter can, shall or may have for, upon, or by reason or cause
of any kind whatsoever (including the Pfizer License Agreement, the CDA, the

11

 

Brewer/Matin Discussions, the Pfizer Discussions, Project Information disclosed to any of the MDCO Releasors by
any of the MDCO Released Parties, and any matter relating to any thereof), from the beginning of
the world to the Effective Date (collectively, the “MDCO Released Claims”); provided, however, that
none of the obligations of any Brewer/Matin Party arising from or in connection with, or governed
or evidenced by, this Agreement, or claims and liabilities relating to this Agreement or to any
breach of this Agreement, shall be included as MDCO Released Claims.

               (ii) The MDCO Releasors agree that they will not commence or prosecute any action or
proceeding against the MDCO Released Parties that concerns any of the MDCO Released Claims. The
MDCO Releasors further agree that they will not assert any MDCO Released Claims against the MDCO
Released Parties in any action or proceeding.

               (iii) The MDCO Releasors represent and warrant that they are the sole owners of and
that they have not sold, assigned, transferred, conveyed or otherwise disposed of any claim, demand
or cause of action or any part thereof relating to any matter covered by this Section 8(b).

               (iv) Except to the extent necessary to enforce its rights under this Agreement in a
proceeding in a court of law or before an arbitrator, neither MDCO nor any of its Affiliates shall,
at any time prior to the [**] anniversary of the Effective Date, publish, utter, broadcast, or
otherwise communicate to any Person other than any Brewer/Matin Party any information,
misinformation, comments, opinions, remarks, articles, letters, or any other form of communication
(whether written or oral and regardless of its believed truth) which is adverse to, reflects
unfavorably upon, or tends to disparage any of the Brewer/Matin Parties.

          (c) For purposes of this Agreement, the term “Affiliate” means, with respect to a
Person, any other Person that controls, is controlled by, or is under common control with, the
first Person, and, with respect to an individual, any other individual related by blood, adoption
or marriage to the first individual.

     9. Representations and Warranties.

          (a) By Brewer/Martin Parties. Each of the Brewer Parties hereby represents
and warrants to MDCO that Brewer and Santamarina-Fojo own and hold, in the aggregate and both of
record and beneficially, all of the limited liability company interests of WCA, and that no other
Person owns or holds any option, warrant or other right to acquire any such interest. Each of the
Brewer/Matin Parties hereby represents and warrants to MDCO that the Principals own and hold, in
the aggregate and both of record and beneficially, all of the limited liability company interests
of HDLT, and that no other Person owns or holds any option, warrant or other right to acquire any
such interest, Further, each of the Brewer/Matin Parties hereby represents and warrants to MDCO
that:

               (i) If such Brewer/Matin Party is an entity, it is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and has all requisite
power and authority to enter into, and perform its obligations under, this Agreement.

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               (ii) Such Brewer/Matin Party has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.

               (iii) The execution, delivery and performance by such Brewer/Matin Party of this
Agreement and the consummation by such Brewer/Matin Party of the transactions contemplated hereby
have been duly and validly authorized by all necessary action on the part of such Brewer/Matin
Party.

               (iv) This Agreement has been duly and validly executed and delivered by such
Brewer/Matin Party and constitutes a valid and binding obligation of such Brewer/Matin Party,
enforceable against such Brewer/Matin Party in accordance with its terms except (x) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws
of general application relating to or affecting the enforcement of creditors’ rights generally, or
(y) as limited by laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies.

               (v) Neither the execution and delivery by such Brewer/Matin Party of this Agreement
nor the consummation by such Brewer/Matin Party of the transactions contemplated hereby will (1)
conflict with or violate any provision of the organizational documents of such Brewer/Matin Party,
(2) require on the part of such Brewer/Matin Party any notice to or filing with, or any permit,
authorization, consent or approval of, any governmental entity, agency or body, (3) conflict with,
result in a breach of, constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party the right to terminate,
modify or cancel, or require any notice, consent or waiver under, any contract or instrument to
which such Brewer/Matin Party is a party or by which such Brewer/Matin Party is bound or to which
any of its assets is subject, (4) result in the imposition of any lien or encumbrance upon any
assets of such Brewer/Matin Party or (5) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to such Brewer/Matin Party or any of its properties or assets.

          (b) By MDCO. MDCO hereby represents and warrants to the Brewer/Matin
Parties that:

               (i) MDCO is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and authority to enter into,
and perform its obligations under, this Agreement.

               (ii) MDCO has all requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.

               (iii) The execution, delivery and performance by MDCO of this Agreement and the
consummation by MDCO of the transactions contemplated hereby have been duly and validly authorized
by all necessary action on the part of MDCO.

               (iv) This Agreement has been duly and validly executed and delivered by MDCO and
constitutes a valid and binding obligation of MDCO, enforceable against MDCO in accordance with its
terms except (x) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or other laws of general application relating

13

 

to or affecting the enforcement of creditors’ rights generally, or (y) as limited by laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies.

               (v) Neither the execution and delivery by MDCO of this Agreement nor the
consummation by MDCO of the transactions contemplated hereby will (1) conflict with or violate any
provision of the certificate of incorporation or the by-laws of MDCO, (2) require on the part of
MDCO any notice to or filing with, or any permit, authorization, consent or approval of, any
governmental entity, agency or body, (3) conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the acceleration of
obligations under, create in any party the right to terminate, modify or cancel, or require any
notice, consent or waiver under, any contract or instrument to which MDCO is a party or by which
MDCO is bound or to which any of its assets is subject, (4) result in the imposition of any lien or
encumbrance upon any assets of
MDCO or (5) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to MDCO or any of its properties or assets.

     10. Miscellaneous.

          (a) Counterparts. This Agreement may be executed by facsimile or other
electronically transmitted signatures, and may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall be one and the same document.

          (b) Successors Bound; Assignment.

               (i) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.

               (ii) To the extent permitted by law and unless provided otherwise in Section
10(b)(iv), and solely after compliance with the other provisions of this Section 10(b)(ii) and of
Section 10(b)(iii), each Principal (a “Selling Principal”) may assign his (A) rights to receive
some or all of the payments payable to him hereunder, together with (B) the Brewer/Matin Parties’
rights under Sections 2 (last sentence only), 4(e), 5(c) and 5(d) with respect to the right to
receive payments so assigned (collectively, all of the rights described in clauses (A) and (B) of
this sentence and intended to be assigned pursuant to this Section 10(b)(ii), the “Assigned
Interest”), in each case after compliance with the provisions of Section 10(b)(iii) and to not more
than [**] Qualified Buyers (as defined below); provided that (x) each such Qualified Buyer agrees
in writing with MDCO to be subject to, and bound by, the Selling Principal’s obligations under this
Agreement (including the obligations under Section 7 and this Section 10, but excluding Sections 8
and 9), (y) not more than [**] Qualified Buyers may have or receive any rights under this Agreement
at any given time and (z) notwithstanding any such assignment, only a single Person (treating the
Brewer/Matin Parties and their respective trusts, successors, heirs and permitted assigns, to the
extent acting jointly, as a single Person for this purpose) shall be entitled to exercise any of
rights of any of the Brewer/Matin Parties set forth in Section 2, 4(e), 5(c) or 5(d) of this
Agreement.

               (iii) Each Selling Principal shall, prior to seeking Qualified Buyers interested in
an assignment of the Assigned Interest pursuant to Section 10(b)(ii) (but in any

14

 

event prior to effecting any such assignment), (A) give written notice to MDCO of his desire to effect such
assignment (the “ROFN Notice”), specifying (1) whether the proposed assignment relates to all or a
portion of the Selling Principal’s rights to receive payments hereunder (and if a portion, a
reasonably detailed description of such portion) and offering (the “ROFN Offer”) to engage in good
faith negotiations with MDCO, for a period of not less than [**] days (the “ROFN Period”), with a
view toward reaching agreement on the terms and conditions of a purchase of the Assigned Interest
by MDCO or one or more of its Affiliates. MDCO shall have [**] days or such longer period as may
be specified in the ROFN Notice (the “ROFN Offer Period”) to accept or decline the ROFN Offer by
notice in writing (the “ROFN Offer Response Notice”) to the relevant Selling Principal, provided
that if MDCO does not give the ROFN Offer Response Notice to such Selling Principal prior to the
expiration of the ROFN Offer Period, MDCO shall be deemed to have declined such ROFN Offer as of
the expiration of the ROFN Offer Response Period. If the ROFN Offer Response Notice was timely
given and indicated MDCO’s acceptance of the ROFN Offer, then MDCO and the relevant Selling
Principal shall, for the duration of the ROFN Period, negotiate in good faith the terms and
conditions of an assignment of the Assigned Interest to MDCO or one or more of its Affiliates. If
MDCO declined or did not timely accept the ROFN Offer, or if MDCO and the relevant Selling
Principal fail to reach agreement with respect to the assignment of the Assigned Interest to MDCO
or one or more of its Affiliates prior to the expiration of the ROFN Period, then the such Selling
Principal shall, subject to Section 10(b)(ii) and the other applicable provisions of this Section
10(b), have the right to assign the Assigned Interest to Qualified Buyer(s) at any time during [**]
days after expiration of the ROFN Period (or, if earlier, the date on which MDCO declined the ROFN
Offer in writing or the date on which MDCO was deemed to have so declined the ROFN Offer at the
expiration of the ROFN Offer Period as set forth above, as applicable), on such terms and
conditions as the Selling Principal and the Qualified Buyer(s) may agree. If the Selling Principal
fails to close the assignment of the Assigned Interest to a Qualified Buyer prior to the expiration
of the [**] day period referenced in the preceding sentence, then any subsequent assignment of the
Assigned Interest to be made pursuant to Section 10(b)(ii) shall again require prior compliance
with the provisions of this Section 10(b)(iii). For purposes of this Agreement, “Qualified Buyer”
shall mean an institutional financial investor (excluding, for the avoidance of doubt, any
pharmaceutical, biotechnology or other operating company, business or enterprise) regularly engaged
in, and experienced in, the purchase of royalty or revenue streams similar in nature to the
Principals’ right to receive payments hereunder.

               (iv) To the extent permitted by law, rights and obligations of a Principal hereunder
may be assigned (A) to a trust, established for bona fide estate planning purposes, the sole
beneficiaries of which are such Principal and one or more other individuals related to such
Principal by blood, adoption or marriage, (B) to a charitable organization validly registered as a
non-profit organization with the Internal Revenue Service and all applicable state authorities, or
(C) by will or by the laws of descent and distribution to one or more individuals related to such
Principal by blood, adoption or marriage who agree to be bound by the provisions of this Agreement
(including provisions of Section 7 and this Section 10) applicable to the assigning Principal, in
each case provided that (x) the assignee agrees in writing with MDCO to be subject to, and bound
by, all of the assigning Principal’s obligations under this Agreement (including the obligations
under Section 7 and this Section 10, but excluding, solely in the case of a charitable organization
described in clause (B) of this sentence that is not an Affiliate of any of the Brewer/Matin
Parties, Sections 8 and 9), and (y) notwithstanding any such assignment,

15

 

only a single Person (treating the Brewer/Matin Parties and their respective trusts, successors, heirs and permitted
assigns, to the extent acting jointly, as a single Person for this purpose) shall be entitled to
exercise any of the rights of any of the Brewer/Matin Parties set forth in Sections 2, 4(e), 5(c)
and 5(d) of this Agreement.

               (v) Except as permitted by the provisions of Sections 10(b)(ii) or 10(b)(iv), none
of the Brewer/Matin Parties may assign this Agreement, or any of their respective rights or
obligations hereunder, to any other Person without MDCO’s prior written consent (which may be
granted or withheld in MDCO’s sole discretion). To the maximum extent permitted by law, any
attempted or purported assignment by any of the Brewer/Matin Parties of its rights to receive
payment hereunder, or of any other rights hereunder, or of any portion of any thereof, in each case
in contravention of the provisions of Section 10(b)(ii), 10(b)(iii) or 10(b)(iv) or of this Section
10(b)(v), as applicable, shall be void. In the event that the restrictions set forth in Sections
10(b)(ii), 10(b)(iii) or 10(b)(iv) or in this Section 10(b)(v) on assignment of a Principal’s
rights to receive payment hereunder are deemed to be invalid or otherwise unenforceable under
applicable law (in whole or in part), and such Principal makes (or purports or attempts to make) an
assignment of such rights in contravention of such restrictions, neither the assignee nor the
assigning Principal shall thereafter be entitled to exercise any of the rights (but shall, to the
maximum extent permitted by law, be subject to, and bound by, the obligations) of the assigning
Principal hereunder (including for the avoidance of doubt any rights under Sections 2, 4(e), 5(c)
and 5(d)) except that the assignee (to the extent of the assignment) or the assigning Principal, as
applicable, shall nonetheless be entitled to continue to receive payments hereunder. In addition,
if any limited liability company interest or other equity security or interest (or any option,
warrant or other right to acquire the same) of WCA or HDLT is transferred or issued to any Person
that is not an Affiliate of the Brewer/Matin Parties, then (i) the Principals shall, not later than
[**] days thereafter, give written notice thereof to MDCO, and, unless MDCO otherwise consents in
writing, (ii) effective as of the effectiveness of such transfer or issuance, WCA and/or HDLT (as
applicable) shall cease to be entitled to (A) exercise any rights (but shall continue to be subject
to, and bound by, the obligations) set forth in this Agreement (other than the rights set forth in
Section 8) or (B) receive or otherwise have access to any notices, certifications, reports or
information provided, delivered or furnished, or to be provided, delivered or furnished, by MDCO
hereunder (and the other B/M Parties shall ensure that WCA and/or HDLT (as applicable) cease to
receive, and have no further access to, any such notices, certifications, reports or information).

               (vi) Except as permitted by this Section 10(b)(vi), MDCO may not assign this
Agreement, or any of its rights or obligations hereunder, to any other Person without the prior
written consent of each of the Principals, and to the maximum extent permitted by law, any
attempted or purported assignment by MDCO of its rights or obligations hereunder, or of any portion
of any thereof, in each case in contravention of the provisions of this Section 10(b)(vi), shall be
void. However, notwithstanding the foregoing or any other provision of this Agreement to the
contrary, MDCO may assign and delegate its rights and obligations hereunder, in whole or by Product
(as applicable) and with no need for any consent or other action of any of the Brewer/Matin
Parties, to any other Person in connection with a sale, assignment or other transfer by MDCO of (x)
all or substantially all of MDCO’s business and assets to which this Agreement relates, or (y) a
specific Product or Products, provided in each case that either (1) such assignee assumes MDCO’s
applicable obligations under this Agreement,

16

 

or (2) MDCO retains information rights and financial resources sufficient to enable continued calculation and payment of amounts
payable by MDCO hereunder on the basis of milestones achieved by, or Net Sales generated by,
such assignee. In the event of such an assignment by MDCO pursuant to this Section 10(b)(vi),
the definition of Net Sales under the Pfizer License Agreement shall, solely for purposes of this
Agreement, be deemed amended to include such assignee as a Selling Party.

               (vii) No permitted or required assignment hereunder shall relieve the assignor of
liability for its obligations (including confidentiality obligations) under this Agreement.

          (c) Governing Law/Arbitration.

               (i) This Agreement shall be governed by and construed under the laws in effect in
the State of New York without giving effect to any conflicts of laws provision thereof or of any
other jurisdiction that would produce a contrary result.

               (ii) Any disputes relating to the validity, interpretation or enforcement of this
Agreement (including any dispute relating to any audit conducted pursuant to Section 5(d)) that are
not otherwise resolved by the Consenting Parties shall be submitted to binding arbitration with the
office of the American Arbitration Association in New York County, New York in accordance with the
then-prevailing commercial arbitration rules of the American Arbitration Association. The American
Arbitration Association shall appoint a single arbitrator who is neutral to the Consenting Parties
to hear the dispute. The place of arbitration shall be New York, New York.

               (iii) The cost of the arbitration, including the fees and expenses of the
arbitrator, will be shared equally by the Consenting Parties involved in the dispute. The
substantially prevailing Consenting Party shall be entitled to recover from the losing Consenting
Party the substantially prevailing Consenting Party’s attorneys’ fees and costs. The arbitrator
shall have the right to apportion liability among the Consenting Parties involved in the dispute,
to grant injunctive and other equitable relief, and to determine the substantially prevailing
Consenting Party and the losing Consenting Party, but will not have the authority to award any
punitive or exemplary damages. The arbitration award will be presented to the Consenting Parties
involved in the dispute in writing, and upon the request of any such Consenting Party, will include
findings of fact and, where appropriate, conclusions of law. The award may be confirmed and
enforced in any court of competent jurisdiction.

               (iv) Notwithstanding the foregoing, application may be made to any court of
competent jurisdiction by a Consenting Party seeking (A) preliminary injunctive or other temporary
equitable relief pending arbitration in connection with this Agreement, or (B) preliminary or
permanent injunctive relief from any court of competent jurisdiction in order to enforce compliance
with the provisions of this Section 10(c).

          (d) Waivers and Amendments. The failure of any Consenting Party to assert a
right hereunder or to insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to perform any such

17

 

term or condition by any other Consenting Party. No waiver shall be effective unless it has been given
in writing and signed by the Consenting Party giving such waiver. No provision of this Agreement
may be amended or modified other than by a written document signed by authorized representatives of
each Consenting Party.

          (e) Notices. All notices, consents, waivers, and other communications under
this Agreement must be in writing (and, with respect to any such notice, consent, waiver or other
communication given by any of the Brewer/Matin Parties, signed by each of the Principals) and will
be deemed to have been duly given when: (a) delivered by hand (with written confirmation of
receipt), (b) sent by fax (with written confirmation of receipt), provided that a copy is sent by
an internationally recognized overnight delivery service (receipt requested), or (c) when received
by the addressee, if sent by an internationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and fax numbers set forth below (or to such
other addresses and fax numbers as a Consenting Party may designate by written notice pursuant to
this Section 10(e), provided that at all times, a single Brewer/Matin Party shall be designated, in
the manner provided in this Section 10(e), to receive
all notices, consents, waivers, and other communications under this Agreement for all of the
Brewer/Matin Parties in the aggregate):

If to MDCO:

The Medicines Company

8 Sylvan Way

Parsippany, NJ 07054

Fax: 1-862-207-6062

Attention: General Counsel

With a copy to:

WilmerHale

60 State Street

Boston, MA 02109

Fax: 1-617-526-5000

Attention: David E. Redlick, Esq.

If to any Brewer/Matin Party:

c/o HDLT LLC

95 South Terrace

Short Hills, NJ 07078

Fax: 1-301-299-6983

Attention: H. Bryan Brewer, Jr.

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With a copy to:

Goodwin Procter LLP

620 Eighth Avenue

New York, NY 10018

Fax: 1-212-355-3333

Attention: Kevin T. Collins, Esq.

          (f) Severability. Any provision of this Agreement which is invalid, illegal
or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability, without affecting in any way the remaining
provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.

          (g) Expenses. Except as otherwise expressly provided in this Agreement,
each party hereto shall pay and be solely responsible for all fees and expenses (including, without
limitation, legal fees and expenses) incurred by it in connection with the negotiation,
preparation, execution and delivery of this Agreement.

          (h) Section Headings; References. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties. All references to Sections and Exhibits are to the Sections of, and
Exhibits to, this Agreement unless the context clearly indicates otherwise.

          (i) Entire Agreement. This Agreement, which includes its Exhibits, sets
forth the entire agreement and understanding of the Consenting Parties as to the subject matter
hereof and supersedes all proposals, oral or written, and all other prior communications between or
among any of the Consenting Parties with respect to such subject matter, including the CDA;
provided, however, that any payment instructions furnished by the
Principals to MDCO prior to the Effective Date with respect to payments to be made by MDCO on
the Effective Date shall remain effective notwithstanding the execution and delivery of this
Agreement.

          (j) Waiver of Rule of Construction. Each Consenting Party has had the
opportunity to consult with counsel in connection with the review, drafting and negotiation of this
Agreement. Accordingly, any rule of construction that any ambiguity in this Agreement shall be
construed against the drafting party shall not apply. In construing this Agreement, (a) use of the
singular includes the plural and vice versa; (b) “include” or “including” means “including without
limitation”, and (c) except where the context otherwise requires, the word “or” is used in the
inclusive sense.

          (k) Relationship of the Parties. Subject only to Section 10(l) below,
nothing in this Agreement shall be deemed to constitute a partnership, joint venture, or legal
entity of any type among the Consenting Parties, or to constitute one Consenting Party as the agent
of any of the other Consenting Parties. Moreover, each of the Consenting Parties agrees not to
construe this Agreement, or any of the transactions contemplated hereby, as a partnership for any
tax purposes. Each of the Consenting Parties shall act solely as an independent contractor, and

19

 

nothing in this Agreement shall be construed to give any Consenting Party the power or authority to
act for, bind, or commit any of the other Consenting Parties. In the event one of the Principals is
found to have breached his obligations under this Agreement it will not constitute a breach of this
Agreement by the other Principal nor will it affect the non-breaching Principal’s rights under this
Agreement.

          (l) Obligations of the Brewer/Matin Parties. All obligations of the
Brewer/Matin Parties hereunder (including liability for breach of any representations, warranties,
covenants and agreements) are (i) as between the Brewer Parties, on the one hand, and Matin, on the
other hand, several (and not joint and several) in a 50/50 ratio, (ii) as among the Brewer Parties,
joint and several in all respects, and (iii) to the extent attributable or allocable to HDLT, joint
and several as among all of the Brewer/Matin Parties.

          (m) Counterparts; Manner of Execution. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed by facsimile or other
electronic means (such as e-mail exchange of .pdf or .tif files) with the same effect as physical
delivery of manually signed originals.

[remainder of page intentionally left blank; signature page follows]

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     IN WITNESS WHEREOF, the undersigned Consenting Parties have executed this Consent
and Release Agreement as of the Effective Date.

	 	 	 	 	 
	 	MDCO:

The Medicines Company

 	 
	 	By:  	/s/ Paul M. Antinori
 	 
	 	 	Name:  	Paul M. Antinori 	 
	 	 	Title:  	SVP and General Counsel 	 
	 
	 	Brewer/Matin Parties:

Washington Cardiovascular Associates, LLC

 	 
	 	By:  	/s/ H. Bryan Brewer, Jr.
 	 
	 	 	Name:  	H. Bryan Brewer, Jr. 	 
	 	 	Title:  	Director 	 
	 
	 	HDLT LLC

 	 
	 	By:  	/s/ Michael Matin
 	 
	 	 	Name:  	Michael Matin 	 
	 	 	Title:  	Chairman of the Board and
Chief Executive Officer 	 
	 
	 	 	 
	 	                                              /s/ H. Bryan Brewer, Jr.
 	 
	 	H. Bryan Brewer, Jr. 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ Silvia Santamarina-Fojo
 	 
	 	Silvia Santamarina-Fojo 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ Michael Matin
 	 
	 	Michael Matinexv10w7

Exhibit 10.7

CHANGE IN CONTROL

TERMINATION BENEFITS AGREEMENT

     THIS CHANGE IN CONTROL TERMINATION BENEFITS AGREEMENT (the “Agreement”), dated as of the
11th day of January 2010 is between Endeavour International Corporation, a Nevada
corporation (the “Company”), and James Joseph Emme (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company considers it essential to the best interests of the Company and its
stockholders that its executive management be encouraged to remain with the Company and to continue
to devote full attention to the Company’s business in the event of a transaction or series of
transactions that could or do result in a change in control of the Company;

     WHEREAS, the Company recognizes that the possibility of a change in control and the
uncertainty which it may raise among management may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders;

     WHEREAS, the Executive is a key executive-level employee of the Company;

     WHEREAS, the Company believes that the Executive has made (and will continue to make) valuable
contributions to the Company;

     WHEREAS, should the Company receive a proposal for, or otherwise consider, any such
transaction, in addition to the Executive’s regular duties, the Executive may be called upon to
assist in the assessment of proposals, advise management and the Board of Directors of the Company
(the “Board”) as to whether a proposed transaction would be in the best interests of the Company
and its stockholders, and take such other actions as the Board might determine to be appropriate;
and

     WHEREAS, the Board has determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued services of the Executive,
notwithstanding the possibility, threat or occurrence of a change in control of the Company and
believes that it is imperative to diminish the potential distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or threatened change in control, to
assure the Executive’s full attention and dedication to the Company in the event of any threatened
or pending change in control, and to provide the Executive with appropriate severance arrangements
following a change in control.

     NOW, THEREFORE, to assure the Company that it will have the continued undivided attention and
services of the Executive and the availability of the Executive’s advice and counsel
notwithstanding the possibility, threat or occurrence of a change in control of the Company, and to
induce the Executive to remain in the employ of the Company, and for other good and valuable
consideration, the Company and the Executive agree as follows:

 

 

     1. Change in Control. For purposes of the Agreement, a “Change in Control” shall be
deemed to have taken place if any of the following occurs:

          (a) the Company (i) shall not be the surviving entity in any merger, consolidation or
other reorganization (or survives only as a subsidiary of an entity other than a previously
wholly-owned subsidiary of the Company), or (ii) is to be dissolved and liquidated, and as a result
of or in connection with such transaction, the persons who were directors of the Company before
such transaction shall cease to constitute a majority of the Board;

          (b) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the
Exchange Act, acquires or gains ownership or control (including, without limitation, power to vote)
of 30% or more of the outstanding shares of the Company’s voting stock (based upon voting power),
and as a result of or in connection with such transaction, the persons who were directors of the
Company before such transaction shall cease to constitute a majority of the Board;

          (c) the Company sells all or substantially all of the assets of the Company to any other
person or entity (other than a wholly-owned subsidiary of the Company) in a transaction that
requires shareholder approval pursuant to applicable corporate law; or

          (d) during a period of two consecutive calendar years, individuals who at the beginning of
such period constitute the Board, and any new director(s) whose election by the Board or nomination
for election by the Company’s stockholders was approved by a vote of at least a majority of the
directors then still in office, who either were directors at the beginning of the two (2) year
period or whose election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board.

     2. Circumstances Triggering Receipt of Termination Benefits.

          (a) Subject to Section 2(c), the Company will provide the Executive with the benefits set
forth in Section 4 upon any termination of the Executive’s employment:

          (i) by the Company at any time within the first 24 months after a Change in Control;

          (ii) by the Executive for “Good Reason” (as defined in Section 2(b) below) at any time
within the first 24 months after a Change in Control; or

          (iii) by the Company or the Executive pursuant to Section 2(d).

          (b) In the event of a Change in Control, the Executive may terminate employment with the
Company and/or any subsidiary for “Good Reason,” following notice and opportunity for remedy as set
forth herein and in Section 3. For purposes hereof, “Good Reason” shall mean (subject to such
notice and opportunity to remedy) any of the occurrence of any of the following events without the
Executive’s prior written consent:

 

 

          (i) A material reduction of the Executive’s authorities, duties, or responsibilities
as an executive and/or officer of the Company from those in effect as of ninety (90)
calendar days prior to the Change in Control, other than an insubstantial and inadvertent
reduction that is remedied by the Company promptly after receipt of notice thereof given by
the Executive.

          (ii) The Company’s requiring the Executive to be based at a location in excess of
fifty (50) miles from the location of the Executive’s principal job location or office
immediately prior to the Change in Control; except for required travel on the Company’s
business to an extent substantially consistent with the Executive’s then present business
travel obligations;

          (iii) A reduction by the Company of the Executive’s Base Salary and/or target annual
bonus opportunity in effect on the Effective Date hereof, or as the same shall be increased
from time to time;

          (iv) The failure of the Company to obtain a satisfactory agreement from any successor
to the Company to assume and agree to perform the Company’s obligations under this
Agreement, as contemplated in Section 8 (where it requires successors to accept this
Agreement) herein; or

          (v) A material breach of this Agreement by the Company which is not remedied by the
Company within ten (10) business days of receipt of written notice of such breach delivered
by the Executive to the Company.

          (c) Notwithstanding Sections 2(a) and (b) above, no benefits shall be payable by
reason of this Agreement in the event of:

          (i) Termination of the Executive’s employment with the Company and/or its
subsidiaries by reason of the Executive’s death or Disability, provided that the
Executive has not previously given a valid “Notice of Termination” pursuant to Section 3.
For purposes hereof, “Disability” shall mean the Executive’s inability, due to physical or
mental infirmity, to perform the Executive’s material duties and responsibilities to the
Company and its subsidiaries for any period of six consecutive months or for any period of
eight months out of any 12-month period, as determined by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive’s legal
representative (such agreement as to acceptability not to be withheld unreasonably);

          (ii) Termination of the Executive’s employment with the Company and/or its
subsidiaries on account of the Executive’s retirement without Good Reason; provided,
however, that, if at the time of such retirement the Executive has Good Reason to
terminate the Executive’s employment hereunder, then such retirement shall be treated
hereunder as a termination of the Executive’s employment for Good Reason and the Executive
shall be entitled to the benefits provided in Section 4 hereof;

          (iii) Termination of the Executive’s employment with the Company and its subsidiaries
for Cause. For the purposes hereof, “Cause” shall mean:

               (A) The Executive’s willful failure to substantially perform his or her duties
with the Company (other than any such failure resulting from the Executive’s

 

 

Disability), after a written demand for substantial performance is delivered to the
Executive that specifically identifies the manner in which the Committee believes that the
Executive has not substantially performed his or her duties, and the Executive has failed to
remedy the situation within fifteen (15) business days of such written notice from the
Company;

               (B) Gross negligence in the performance of the Executive’s duties which results in
material financial harm to the Company;

               (C) The Executive’s conviction of, or plea of guilty or nolo contendere, to any felony
or any other crime involving the personal enrichment of the Executive at the expense of the
Company;

               (D) The Executive’s willful engagement in conduct that is demonstrably and materially
injurious to the Company, monetarily or otherwise; or

               (E) The Executive’s willful violation of any of the covenants contained in Section 7.

     Notwithstanding the foregoing, “Cause” shall not exist unless and until the Company has
delivered to the Executive, along with the Notice of Termination for Cause, a copy of a resolution
duly adopted by three-quarters (3/4) of the entire Board (excluding the Executive if the Executive
is a Board member) at a meeting of the Board called and held for such purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the Board an event (or events) set
forth in clauses (A)-(E) above has occurred and specifying the particulars thereof in detail.

     This Section 2(c) shall not preclude the payment of any amounts otherwise payable to the
Executive under any of the Company’s employee benefit plans, stock plans, programs and
arrangements, which payment shall be governed exclusively by the terms thereof.

          (d) A termination of the Executive’s employment by the Company without Cause or by the
Executive for an event that would constitute Good Reason following a Change in Control that occurs,
in either event, prior to a Change in Control, but occurs (i) not more than 200 days prior to the
date on which a Change in Control occurs and (ii) (x) at the request of a third party who has
indicated an intention or taken steps reasonably calculated to effect a Change in Control or (y)
otherwise arose in connection with, or in anticipation of, a Change in Control, shall be deemed to
be a termination or removal of the Executive without Cause within the first 24 months after a
Change in Control for purposes of this Agreement and the date of such Change in Control shall be
deemed to be the date immediately preceding the date the Executive’s employment terminates.

     3. Notice of Termination; Termination Date. Any termination of the Executive’s employment
with the Company and its subsidiaries as contemplated by Section 2 shall be communicated by written
“Notice of Termination” to the other party hereto. Any “Notice of Termination” shall indicate the
effective date of termination, which, shall be more than 60 days after the date the Notice of
Termination is delivered (the “Termination Date”), the specific provision in this Agreement relied
upon,

 

 

and, except for a termination pursuant to Section 2(d), will set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such termination including, if
applicable, the failure by the Company, after provision of written notice by the Executive, to
effect a remedy pursuant to the final clause of Section 2(b)(i) or 2(b)(vi). Executive must
provide the Notice of Termination to the Company within 90 days of the events constituting “Good
Reason” for termination and the Company shall have a period of 30 days after the Notice of
Termination during which the Company may remedy the condition before such termination shall be
effective. In the event the Company effects a remedy within such 30-day period and the Executive
does not rescind the Notice of Termination upon being notified of such remedy, the termination
benefits described in Section 4 hereof shall not be payable with respect to such termination.

     4. Termination Benefits. Subject to the conditions set forth in Section 2(a) and contingent
upon the Executive’s executing (and not revoking) the “Release” (as defined below), the following
post-termination payments or benefits shall be paid or provided to the Executive following the
Executive’s termination of employment:

          (a) Severance Payment. The Company shall pay to the Executive, as a severance
payment, an amount equal to the sum of (i) two times (A)the Executive’s “Base Pay”, which shall be
an amount equal to the greater of (x) the Executive’s rate of annual base salary (prior to any
deferrals) at the Termination Date or (y) the Executive’s rate of annual base salary (prior to any
deferrals) immediately prior to the Change in Control, and (B) the Executive’s “Incentive Pay”,
which shall be an amount equal to the average annual bonus earned by the Executive under the
Company’s incentive compensation plan or any other annual bonus plan (whether paid currently or on
a deferred basis) during the three fiscal years of the Company immediately preceding the fiscal
year of the Company in which the Change in Control occurred plus (ii) a pro rata portion of the
Executive’s target bonus for the fiscal year in which the Termination Date occurs, which payment
shall be made in a single lump sum on the first business day following the expiration of the
revocation period for the Release. Notwithstanding the foregoing, if all or any portion of the
severance payment is determined to be “nonqualified deferred compensation” subject to Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and the Company determines that the
Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and Final
Treasury Regulations promulgated thereunder (the “Treasury Regulations”) and other guidance
published thereunder, then such payment (or portion thereof) shall be paid on the first day of the
seventh month following the Executive’s “separation from service” (as such term is defined in the
Treasury Regulations, giving effect to the default presumptions of Section 1.409A-1(h) thereof).

          (b) Health Benefits. To the extent the Executive timely elects to continue
healthcare coverage through COBRA, the Company shall pay that portion of the COBRA premium equal to
the difference between the COBRA premium and Executive’s monthly contribution towards health
benefits that is in effect as of the date of Executive’s termination of employment for a period
equal to 18 months following the Termination Date; provided, that, the Company’s obligation
to provide such health benefits shall cease at the time Executive becomes eligible for such health
benefits from another employer.

          (c) Release. The Company’s obligation to make the payment and provide the benefits
described in this Section 4 are conditioned expressly on the Executive’s executing (and not
revoking) a general release of claims against the Company (as “Company” is defined in Section 8)
and its subsidiaries

 

 

in a form reasonably satisfactory to the Company (the “Release”) within 45 days following the
Termination Date. The Company will provide the Release to the Executive within seven days
following the Termination Date.

     5. Certain Additional Payments by the Company.

          (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be
determined (as hereafter provided) that any payment (other than the Gross-Up payments provided for
in this Section 5) or benefit provided by the Company or any of its subsidiaries to or for the
benefit of the Executive, whether paid or payable or provided pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or
arrangement, including without limitation any stock option, stock appreciation right or similar
right, restricted stock, deferred stock or the lapse or termination of any restriction on, deferral
period for, or the vesting or exercisability of any of the foregoing (a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto)
by reason of being considered “contingent on a change in ownership or control” of the Company,
within the meaning of Section 280G of the Code (or any successor provision thereto) or to any
similar tax imposed by state or local law, or any interest or penalties with respect to any such
tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively
referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional
payment or payments (collectively, a “Gross-Up Payment”). The Gross-Up Payment shall be in an
amount such that, after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax and any income tax imposed upon the
Gross-Up Payment, the Executive retains an amount of Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.

          (b) Subject to the provisions of Section 5(f), all determinations required to be made under
this Section 5, including whether an Excise Tax is payable by the Executive and the amount of such
Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Executive
and the amount of such Gross-Up Payment, if any, shall be made by the Company’s outside auditors
immediately prior to the Change in Control (the “Accounting Firm”). The Executive shall direct the
Accounting Firm to submit its determination and detailed supporting calculations to both the
Company and the Executive within 30 days after the Change in Control Date, the Termination Date, if
applicable, and any such other time or times as may be requested by the Company or the Executive.
If the Accounting Firm determines that any Excise Tax is payable by the Executive, the Company
shall pay the required Gross-Up Payment to the Executive as soon as reasonably practicable
thereafter but in any event no later than the end of the Executive’s taxable year next following
the taxable year in which the Executive remits such Excise Tax to the Internal Revenue Service. If
the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the Company and the Executive an opinion that the
Executive has substantial authority not to report any Excise Tax on the Executive’s federal, state
or local income or other tax return. As a result of the uncertainty in the application of Section
4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty
regarding applicable state of local tax law at the time of any determination by the Accounting Firm
hereunder, it is possible that a Gross-Up Payment which will not have been made by the Company
should have been made (an “Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to
Section 5(f) and the Executive thereafter is required to make a payment of any

 

 

Excise Tax, the Executive shall direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed supporting calculations
to both the Company and the Executive as promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the Executive within five business days
after receipt of such determination and calculations but in any event no later than the end of the
Executive’s taxable year next following the taxable year in which the Executive remits such
Underpayment to the Internal Revenue Service.

          (c) The Company and the Executive shall each provide the Accounting Firm access to and copies
of any books, records and documents in the possession of the Company or the Executive, as the case
may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determinations and calculations
contemplated by Section 5(b). Any determination by the Accounting Firm as to the amount of the
Gross-Up Payment shall be binding upon the Company and the Executive.

          (d) The federal, state and local income or other tax returns filed by the Executive shall be
prepared and filed on a consistent basis with the determination of the Accounting Firm with respect
to the Excise Tax payable by the Executive. The Executive shall make proper payment of the amount
of any Excise Tax, and at the request of the Company, provide to the Company true and correct
copies (with any amendments) of the Executive’s federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with
the applicable taxing authority, and such other documents reasonably requested by the Company,
evidencing such payment. If prior to the filing of the Executive’s federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm determines that the
amount of the Gross-Up Payment should be reduced, the Executive shall, within five business days,
pay to the Company the amount of such reduction.

          (e) The fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by Section 5(b) shall be borne by the Company. If such
fees and expenses are initially paid by the Executive, the Company shall reimburse the Executive
the full amount of such fees and expenses paid by Executive within five business days after receipt
from the Executive of a statement therefor and reasonable evidence of payment thereof.

          (f) The Executive shall notify the Company in writing of any claim, by the Internal Revenue
Service or any other taxing authority that, if successful, would require the payment by the Company
of a Gross-Up Payment or any additional Gross-Up Payment. Such notification shall be given as
promptly as practicable but no later than l0 business days after the Executive actually receives
notice of such claim, and the Executive shall further apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid (in each case, to the extent known
by the Executive). The Executive shall not pay such claim prior to the earlier of (x) the
expiration of the 30-day period following the date on which the Executive gives such notice to the
Company and (y) the date that any payment with respect to such claim is due. If the Company
notifies the Executive in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:

          (i) provide the Company with any written records or documents in the Executive’s
possession relating to such claim reasonably requested by the Company;

 

 

          (ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without limitation accepting
legal representation with respect to such claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;

          (iii) cooperate with the Company in good faith in order effectively to contest such
claim; and

          (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such contest and shall
indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or
income tax including interest and penalties with respect thereto, imposed as a result of such
contest and payment of costs and expenses. Without limiting the foregoing provisions of this
Section 5(f), the Company shall control all proceedings taken in connection with the contest of any
claim contemplated by this Section 5(f) and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim (provided, however, that the Executive may participate therein at the
Executive’s own cost and expense) and may, at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to pay the tax claimed
and sue for a refund, the Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income or other tax, including interest or penalties with respect thereto,
imposed with respect to such advance; and provided further, that any extension of
the statute of limitations relating to payment of taxes for the taxable year of the Executive with
respect to which the contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of any such contested claim shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

          (g) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 5(f), the Executive receives any refund with respect to such claim, the Executive shall
(subject to the Company’s complying with the requirements of Section 5(f)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited thereon after any
taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 5(f), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the Executive in writing
of its intent to contest such denial or refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to be repaid and the
amount of any such advance shall offset, to the extent thereof, the amount of any Gross-Up Payment
required to be paid by the Company to the Executive pursuant to this Section 5.

 

 

     6. No Mitigation Obligation; Obligations Absolute. The payment of the severance
compensation by the Company to the Executive in accordance with the terms of this Agreement is
hereby acknowledged by the Company to be reasonable, and the Executive will not be required to
mitigate the amount of any payment or other benefit provided in this Agreement by seeking other
employment or otherwise, nor will any profits, income, earnings or other benefits from any source
whatsoever create any mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise, except as expressly provided in Section 12 hereof. The
obligations of the Company to make the payments and provide the benefits provided herein to the
Executive are absolute and unconditional (except as provided herein) and may not be reduced under
any circumstances, including without limitation any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or any third party at any time.

     7. Continuing Obligations.

          (a) Confidentiality. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive’s employment by the Company and which shall not be
or become public knowledge (information that has become public knowledge shall not include any
information that has entered the public domain as a result of acts or omissions by the Executive or
representatives of the Executive in violation of this Agreement). After termination of the
Executive’s employment with the Company and its subsidiaries for any reason, the Executive shall
not, without the prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to anyone other than
the Company and those designated by it.

          (b) Non-Solicitation. During the term of this Agreement and for a period of twelve
(12) months after the Termination Date, the Executive shall not, directly or indirectly, employ or
retain or solicit for employment or arrange to have any other person, firm, or other entity employ
or retain or solicit for employment or otherwise participate in the employment or retention of any
person who is an employee of the Company.

          (c) Cooperation. Executive agrees to cooperate with the Company and its attorneys in
connection with any and all lawsuits, claims, investigations, or similar proceedings that have been
or could be asserted at any time arising out of or related in any way to Executive’s employment by
the Company or any of its subsidiaries.

          (d) Non-Disparagement. At all times following the Termination Date, the Executive
agrees not to disparage the Company or any of its directors or executive officers, or otherwise
make comments harmful to the Company’s business or reputation

          (e) Blue Penciling. It is expressly understood and agreed that although the
Executive and the Company consider the restrictions contained in Sections 7(a) through (d) to be
reasonable, if a judicial determination is made by a court of competent jurisdiction that the time
or territory or any other restriction contained in this Agreement is an unenforceable restriction
against the Executive, the provisions of this Agreement shall not be rendered void but shall be

 

 

deemed amended to apply as to such maximum time and territory and to such maximum extent as
such court may judicially determine or indicate to be enforceable. Alternatively, if any court of
competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and
such restriction cannot be amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.

     8. Successors.

          (a) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance reasonably satisfactory to the Executive to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. Failure of such
successor entity to enter into such agreement prior to the effective date of any such succession
(or, if later, within three business days after first receiving a written request for such
agreement) shall constitute a breach of this Agreement and shall entitle the Executive to terminate
employment pursuant to Section 2(a)(ii) and to receive the payments and benefits provided under
Section 4. As used in this Agreement, “Company” shall mean the Company as herein before defined and
any successor to its business and/or assets as aforesaid which executes and delivers the Agreement
provided for in this Section 7 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.

          (b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive dies while any amounts are payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive’s designee or, if there is no such designee, to the Executive’s estate.

     9. Notices. For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to be given hereunder
will be in writing and will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return receipt requested,
postage prepaid, or three business days after having been sent by a nationally recognized overnight
courier service such as FedEx, UPS, or DHL, addressed to the Company (to the attention of the
Secretary of the Company, with a copy to the General Counsel of the Company) at its principal
executive office and to the Executive at the Executive’s principal residence, or to such other
address as any party may have furnished to the other in writing and in accordance herewith, except
that notices of changes of address shall be effective only upon receipt.

     10. Governing Law. The validity, interpretation, construction and performance of this
agreement shall be governed by the laws of the State of Texas, without regard to conflicts of law
principles.

     11. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in a writing signed by the Executive and
the

 

 

Company. No waiver by either party hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or any
prior or subsequent time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement (or in any employment or other written agreement relating to the
Executive). Nothing expressed or implied in this Agreement will create any right or duty on the
part of the Company or the Executive to have the Executive remain in the employment of the Company
or any subsidiary prior to or following any Change in Control. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes as the Company is
required to withhold pursuant to any law or government regulation or ruling. In the event that the
Company refuses or otherwise fails to make a payment when due and it is ultimately decided that the
Executive is entitled to such payment, such payment shall be increased to reflect an interest
factor, compounded annually, equal to the prime rate in effect as of the date the payment was first
due plus two points. For this purpose, the prime rate shall be based on the rate identified by
Chase Manhattan Bank as its prime rate.

     All headings and section references used herein are for convenience only and do not constitute
a part of this Agreement. Where specific language is used to clarify by example a general
statement contained herein, such specified language shall not be deemed to modify, limit or
restrict in any manner the construction of the general statement to which it relies. The language
used in this Agreement is deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any such party.

     12. Reduction for Other Severance. Any payments or other benefits provided to the
Executive under this Agreement shall be offset or reduced by any payments or other benefits
provided under any severance plan or employment agreement which the Executive is eligible to
receive (or has received) as a result of the termination of the Executive’s employment.

     13. Separability. The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

     14. Non-assignability. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder, except as provided in Section 8. Without limiting the foregoing, the
Executive’s right to receive payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by will or by the laws
of descent or distribution, and in the event of any attempted assignment or transfer by the
Executive contrary to this Section 14 the Company shall have no liability to pay any amount so
attempted to be assigned or transferred to any person other than the Executive or, in the event of
death, the Executive’s designated beneficiary or, in the absence of an effective beneficiary
designation, the Executive’s estate.

     15. Effectiveness; Term. This Agreement will be effective and binding as of the date first
above written immediately upon its execution and shall continue in effect through the second
anniversary of such date; provided, however, that the term of this Agreement shall
automatically be extended for an

 

 

additional day for each day that passes so that there shall at any time be two years remaining
in the term unless the Company provides written notice to the Executive that it does not wish the
term of this Agreement to continue to be so extended, in which case the Agreement shall terminate
on the second anniversary of such notice if there has not been a Change in Control prior to such
second anniversary. In the event that a Change in Control has occurred during the term of this
Agreement, then this Agreement shall continue to be effective until the second anniversary of such
Change in Control. Notwithstanding any other provision of this Agreement, if, prior to a Change in
Control, the Executive ceases for any reason to be an employee of the Company and any subsidiary
(other than a termination of employment pursuant to Section 2(d) hereof), thereupon without further
action the term of this Agreement shall be deemed to have expired and this Agreement will
immediately terminate and be of no further effect. For purposes of this Section 15, the Executive
shall not be deemed to have ceased to be an employee of the Company and any subsidiary by reason of
the transfer of the Executive’s employment between the Company and any subsidiary, or among any
subsidiaries. Notwithstanding any provision of this Agreement to the contrary, the parties’
respective rights and obligations under Sections 4 through 8 will survive any termination or
expiration of this Agreement or the termination of the Executive’s employment following a Change in
Control for any reason whatsoever.

     16. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one and the same
agreement.

     17. Code Section 409A. Notwithstanding any other provision of this Agreement to the
contrary, the Company shall modify the time and/or form of any payment or benefit provided
hereunder any if and to the extent that the Company or the Executive determines such modification
to be necessary or advisable to avoid the imposition upon the Executive of earlier or additional
taxes pursuant to Code Section 409A (including, without limitation, to the extent necessary if the
Executive has received payments or benefits that would be aggregated with such payment or benefit
under any other plan or agreement of the Company). In making any such modification, the
determination by the Company or the Executive must be made in good faith, be based on advice of
counsel and be designed, in the Company’s sole judgment, to fulfill as closely as possible the
Company’s original commitment to the Executive with respect to the payment or benefit being
modified to comply with Section 409A without increasing the Company’s costs in providing such
payment or benefit No modification shall be made by the Company without the Executive’s prior
written consent.

[SIGNATURE PAGE FOLLOWS]

 

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of
the day and year first above set forth.

Endeavour International Corporation

Signatures

/s/ William L. Transier               

William L. Transier

Chairman, CEO and President

/s/ James Joseph Emme               

James Joseph Emme

Executive VP of North America

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