Amendment No.1 to Form S-1

Large accelerated filer

Accelerated filer

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

0001193125-12-196282.txt : 20120815 0001193125-12-196282.hdr.sgml : 20120815 20120430164234 ACCESSION NUMBER: 0001193125-12-196282 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 18 FILED AS OF DATE: 20120430 DATE AS OF CHANGE: 20120718 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Durata Therapeutics, Inc. CENTRAL INDEX KEY: 0001544116 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 871247903 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-180280 FILM NUMBER: 12795663 BUSINESS ADDRESS: STREET 1: 89 HEADQUARTERS PLAZA NORTH STREET 2: 14TH FLOOR CITY: MORRISTOWN STATE: NJ ZIP: 09760 BUSINESS PHONE: 973-993-4867 MAIL ADDRESS: STREET 1: 89 HEADQUARTERS PLAZA NORTH STREET 2: 14TH FLOOR CITY: MORRISTOWN STATE: NJ ZIP: 09760 S-1/A 1 d312438ds1a.htm AMENDMENT NO.1 TO FORM S-1 Amendment No.1 to Form S-1

As filed with the Securities and Exchange Commission on April 30, 2012

Registration No. 333-180280

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

DURATA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware	2834	27-1247903
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

89 Headquarters Plaza North, 14th Floor

Morristown, New Jersey 07960

(973) 993-4865

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Paul R. Edick

Chief Executive Officer

Durata Therapeutics, Inc.

89 Headquarters Plaza North, 14th Floor

Morristown, New Jersey 07960

(973) 993-4863

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:


Andrew E. Nagel, Esq. Brian A. Johnson, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 399 Park Avenue New York, New York 10022 (212) 230-8800		Richard D. Truesdell, Jr., Esq. Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4000

Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion

Preliminary Prospectus dated April 30, 2012

P R O S P E C T U S

Shares

LOGO

Common Stock

This is Durata Therapeutics, Inc.’s initial public offering. We are selling shares of our common stock.

We expect the public offering price to be between $ and $ per share. Currently, no public market exists for the shares. After pricing of the offering, we expect that the shares will trade on the Nasdaq Global Market under the symbol “DRTX.”

We are an “emerging growth company” under federal securities laws and are subject to reduced public company disclosure standards. Investing in our common stock involves risks that are described in the “Risk Factors” section beginning on page 9 of this prospectus.


	Per Share	Total
Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to us	$	$

The underwriters may also exercise their option to purchase up to an additional shares from us, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The shares will be ready for delivery on or about , 2012.


BofA Merrill Lynch		Credit Suisse


RBC Capital Markets		Wedbush PacGrow Life Sciences

The date of this prospectus is , 2012.

TABLE OF CONTENTS


	Page
Prospectus Summary		1
Risk Factors		9
Special Note Regarding Forward-Looking Statements		36
Use of Proceeds		37
Dividend Policy		38
Capitalization		39
Dilution		41
Selected Financial Data		43
Management’s Discussion and Analysis of Financial Condition and Results of Operations		45
Business		60
Management		87
Executive Compensation		92
Transactions with Related Persons		110
Principal Stockholders		113
Description of Capital Stock		116
Shares Eligible for Future Sale		120
Material U.S. Tax Considerations for Non-U.S. Holders of Common Stock		122
Underwriters		125
Legal Matters		131
Experts		131
Where You Can Find More Information		131
Index to Consolidated Financial Statements		F-1

We have not authorized anyone to provide you with information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give to you. We are offering to sell shares of our common stock, and seeking offers to buy shares of our common stock, only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common stock.

Neither we nor any of the underwriters have taken any action to permit a public offering of the shares of our common stock or the possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the “Risk Factors” section and our financial statements and the related notes appearing at the end of this prospectus, before making an investment decision.

DURATA THERAPEUTICS, INC.

Company Overview

We are a pharmaceutical company focused on the development and commercialization of novel therapeutics for patients with infectious diseases and acute illnesses. We are currently enrolling and dosing patients in two global Phase 3 clinical trials with our lead product candidate, dalbavancin, for the treatment of patients with acute bacterial skin and skin structure infections, or abSSSI. Dalbavancin is an intravenous antibiotic product candidate designed for once-weekly dosing, which we believe will facilitate the treatment of patients with abSSSI in both the in-patient and out-patient settings by reducing the length of a patient’s hospital stay or avoiding hospital admission altogether and, ultimately, lowering the overall cost of care for these patients. We are conducting each of these Phase 3 clinical trials pursuant to special protocol agreements, or SPAs, with the U.S. Food and Drug Administration, or FDA, based on draft guidance issued by the FDA in 2010 for the development of drugs to treat abSSSI. We also designed these trials based on scientific advice that we received from the European Medicines Agency, or EMA, in December 2010 to meet the regulatory filing requirements in the European Union. We expect to complete these Phase 3 clinical trials and have initial, top-line data available in the beginning of 2013. If our ongoing Phase 3 clinical trials are successful, we plan to submit a New Drug Application, or NDA, to the FDA in the first half of 2013 and a marketing authorization application, or MAA, to the EMA in the second half of 2013. If approved, we intend to directly commercialize dalbavancin in the United States and Western Europe with a targeted hospital sales force and to utilize a variety of types of collaboration arrangements for commercialization in other markets.

We believe that dalbavancin offers a number of potential advantages compared to currently available treatments for abSSSI, including a strong safety and tolerability profile, broad coverage and activity against Gram-positive bacteria, including resistant bacterial strains, suitability in a wide range of patients due to limited drug-drug interaction or need for therapeutic drug monitoring, and simpler administration that facilitates use in multiple settings. In addition, dalbavancin’s pharmacokinetic profile and its relatively long half-life compared to many currently available treatments result in continuous bactericidal, or bacteria killing, activity over a prolonged period of time following treatment. We believe that these potential advantages may provide a more rapid and effective cure for patients with abSSSI, greater patient compliance, improved safety outcomes and, even with branded pricing at a premium to generic products, lower overall cost of care.

We own worldwide commercial rights to dalbavancin. Our worldwide rights are royalty free, other than in Japan, where we are obligated to pay royalties on net sales of dalbavancin. We will also owe a single milestone payment following the first commercial sale of dalbavancin in the United States or one of five major European markets, which we have the right to defer for up to five years. Our dalbavancin rights include three U.S. patents covering dalbavancin’s use and formulation. Each of these patents is scheduled to expire in 2023, and any one, but not all, of these U.S. patents may be eligible for patent term extension. If dalbavancin is approved by the EMA, we expect that dalbavancin will qualify for eight years of data exclusivity and an additional two years of marketing exclusivity in the European Union. In addition to abSSSI, we are pursuing development of dalbavancin for additional indications, including osteomyelitis, diabetic foot infection and pneumonia. We intend to enhance our product pipeline through strategically in-licensing or acquiring clinical stage product candidates or approved products for the hospital and acute care markets.

Our Market Opportunity

Overview

According to Arlington Medical Resources, or AMR, a Decision Resources Group company and a leading provider of medical data from hospitals and other healthcare facilities, 84% of all abSSSI and 94% of cellulitis are caused by Gram-positive bacteria. Common Gram-positive bacteria that can result in abSSSI include species of Staphylococcus, such as Methicillin-Resistant Staphylococcus aureus, or MRSA, and species of Streptococcus. Currently, the most widely prescribed antibiotic for treating Gram-positive infections in the United States is vancomycin, which is available in both branded and generic versions. Vancomycin and other generic antibiotics account for a substantial number of the injectable antibiotic units utilized in the United States. However, because of an increase in MRSA infections that are resistant to treatment with vancomycin and the need to dose vancomycin multiple times per day, more effective antibiotics and antibiotics with less-frequent dosing schedules are gaining a larger share of the market for the treatment of MRSA infections. According to publicly available financial information, three major branded antibiotics, daptomycin (marketed as Cubicin), tigecycline (marketed as Tygacil) and linezolid (marketed as Zyvox), recorded overall sales of approximately $1.5 billion in the United States in 2011. Based on information from AMR, we believe that approximately $510 million of these sales were solely related to the treatment of abSSSI.

Although difficult to precisely estimate, based on our analysis of data from AMR and other industry sources, we believe that in the United States there are approximately 35 million days of treatment annually for MRSA utilizing intravenous antibiotics, with approximately 75% of these treatments occurring in the hospital setting and the remaining 25% occurring in the out-patient setting. This market is significantly larger when expanded to include Methicillin-Sensitive Staphylococcus aureus, or MSSA, treatments and oral step-down therapies prescribed to patients in connection with their discharge from the hospital. We believe that dalbavancin will also be appropriate for use in both the MSSA and oral step-down segments of treatment. We expect the number of treatment days in the out-patient setting to grow at a faster rate than in the hospital in-patient setting as a result of increased use of current agents in the out-patient setting as well as the potential use, if approved, of product candidates with more convenient dosing schedules.

Limitations of Currently Available Treatment Options

Despite widespread use, currently available treatment options have significant limitations in the treatment of abSSSI. Treatment for abSSSI typically begins in the out-patient or emergency room setting, where physicians often treat abSSSI patients with a first-line antibiotic, such as vancomycin. The initial infusion of antibiotics can be a time-consuming process, taking up space and resources in both settings. Because most currently available treatments require multi-day dosing, after initial treatment physicians may admit abSSSI patients to the hospital depending on the severity of the infection and out of concern about patients complying with their dosing regimen. The multi-day stays required for hospital treatment include significant overhead cost and an increased threat of the spread of MRSA, both to and from a particular patient. In addition, because hospitals can be both an expensive and unpleasant treatment setting for patients, the patients may leave the hospital during the course of treatment and not seek further treatment unless the infection returns. This failure to continue treatment may cause patients to then be readmitted to the hospital, which in turn may result in the imposition of reimbursement penalties on the hospital and higher overall cost to the healthcare system.

Dalbavancin

Overview

guidance issued by the FDA in 2010 for the development of drugs to treat abSSSI. We also designed these trials based on scientific advice that we received from the EMA in December 2010 to meet the regulatory filing requirements in the European Union. Dalbavancin previously completed three other Phase 3 clinical trials in May and June 2004 pursuant to prior FDA guidelines that are no longer in effect, in which more than 1,000 patients in total received dalbavancin. Dalbavancin achieved its primary efficacy endpoint in evaluable patients’ clinical response at test of cure, 28 days following therapy, in each of these three completed Phase 3 clinical trials when compared to linezolid, cefazolin or vancomycin, three of the standard-of-care agents for uncomplicated skin and skin structure infections, or uSSSI, and complicated skin and skin structure infections, or cSSSI. The primary efficacy endpoint in each of these completed clinical trials was non-inferiority of dalbavancin compared to the other drug being evaluated based on a pre-determined non-inferiority margin. Non-inferiority comparisons of drugs are the standards for antibiotic drug development, and non-inferiority margins are used in the statistical analysis comparing two treatment arms in a study to distinguish the degree of potential difference between the antibiotics being evaluated. In each of the previously completed clinical trials, dalbavancin was well tolerated and generated a large database of safety information. The rate and duration of adverse events in clinical trials to date for dalbavancin are similar to that of the comparator drugs used in the trials, and we have not observed any negative drug-drug interactions with dalbavancin in clinical development to date.

In 2010, the FDA issued new draft guidance for the study of abSSSI. The purpose of this guidance was to address many of the uncertainties regarding the FDA’s expectations concerning clinical trials for abSSSI. As part of the new draft guidance, the FDA re-evaluated the types of skin and skin structure infections that should be included in clinical trials to support an indication for treatment. The FDA termed these types of infections abSSSI rather than uSSSI or cSSSI. We recently conducted a retrospective analysis of the completed Phase 3 clinical trial comparing dalbavancin and linezolid and determined that dalbavancin could have achieved its primary endpoint if the trial had been designed and conducted under the new FDA draft guidance. This completed Phase 3 clinical trial had been considered a pivotal clinical trial, as it was designed to collect the primary evidence of efficacy and safety to support an application for marketing approval. Although we expect that, if successful, the results from our two ongoing Phase 3 clinical trials will form the primary basis for the FDA’s review of our planned NDA submission and for the evaluation of the efficacy, safety and overall benefit-risk relationship of dalbavancin for marketing approval, we also expect that the FDA will consider as part of its review the results of all submitted preclinical studies and clinical trials of dalbavancin, including the three previously completed Phase 3 clinical trials, as well as chemistry, manufacturing and control information in the NDA.

Differentiating Factors of Dalbavancin

The use of dalbavancin in any treatment setting may have significant advantages over currently available treatments. By limiting or eliminating the admission of patients for treatment in the hospital, we believe use of dalbavancin could reduce overall cost of abSSSI to the healthcare system, improve patient compliance and decrease the spread and cost of MRSA. Although generic vancomycin is a relatively inexpensive drug, the overhead costs of administering vancomycin can be very high. Among other costs, treatment with multi-day antibiotics such as vancomycin generally requires the insertion of a peripherally inserted central catheter, or PICC, line to deliver the drug and either overnight hospital stays or, if a patient is treated on an out-patient basis, at least daily follow-up visits. We believe that dalbavancin, even with branded pricing at a premium to generic products, would generally be less costly overall than treatment with a generic antibiotic, such as vancomycin.

could be diagnosed, treated with the initial dose and released all in a few hours without admission to the hospital, with just one follow-up visit to complete treatment seven days later. We believe that this short, infrequent dosing would be less disruptive to a patient than currently available treatments and would allow doctors to send patients home directly from the emergency room or out-patient setting, rather than admitting patients to the hospital.

We also believe dalbavancin could provide significant therapeutic and economic benefits when administered in the hospital in-patient setting. Because treatment with dalbavancin requires only two doses one week apart, use of dalbavancin in the hospital may make an overall hospital stay shorter and less expensive. We believe that after dosing a patient with dalbavancin, hospitals could discharge the patient after only a short stay and then schedule a follow-up appointment for the second infusion. This second appointment would serve the dual purpose of allowing a doctor to reexamine the patient and to administer the second dose of dalbavancin, all while limiting the duration of the patient’s hospital stay.

We believe that with effective treatment of patients outside the hospital, the use of dalbavancin could decrease the threat of the spread of MRSA, both to and from a particular patient. We also believe that limiting the admission of patients for further treatment in the hospital and avoiding patient compliance and MRSA concerns could decrease readmission rates of patients with abSSSI and therefore increase reimbursement rates for hospitals. In addition, we believe that as the healthcare system evolves with new programs seeking to reduce cost and provide better care for patients, accountable coordinated care models will begin to subject hospitals to quality bonuses or penalties from both government and commercial payors. The accountability metrics, which we expect to be implemented over the next few years, include reduced hospital readmissions, reduced healthcare-acquired infections, minimizing exposure to bundled payments and other improvements based on quality and cost of care. In addition, limiting the admission of patients for further treatment in the hospital may decrease the risk of improper admission of patients for one-day stays under audits conducted pursuant to government payor rules.

Our Strategy

Our goal is to become a fully integrated pharmaceutical company that develops and commercializes specialist oriented therapeutics in areas of high unmet medical need for patients with infectious diseases and acute illness. Key elements of our strategy to achieve this goal are:

•

Complete dalbavancin clinical development in its lead indication (abSSSI).

•

Obtain regulatory approval for dalbavancin in the United States and subsequently in the European Union.

•

Maximize the commercial potential of dalbavancin.

•

Pursue development of dalbavancin in additional indications.

•

Opportunistically in-license or acquire additional clinical stage product candidates or approved products in our areas of focus.

Our History

We acquired our rights to dalbavancin through our acquisition of Vicuron Pharmaceuticals Inc., or Vicuron, from Pfizer Inc., or Pfizer, in December 2009. After Vicuron filed an NDA for dalbavancin with the FDA in December 2004, Pfizer acquired Vicuron in September 2005. In July 2007, Pfizer filed an MAA for dalbavancin with the EMA. Between 2005 and 2007, the FDA issued three approvable letters relating to the NDA filed in December 2004 for dalbavancin. In general, approvable letters identify issues that must be addressed in order to obtain approval of a pending NDA. The first two approvable letters raised, in part, open items on the manufacturing process of dalbavancin. After addressing the first approvable letter by making changes to the manufacturing process, Pfizer made additional changes to the manufacturing process, resulting in a second approvable letter. The third approvable letter in part requested that Pfizer justify the non-inferiority margin used

for the then-current Phase 3 clinical trial comparing dalbavancin and cefazolin. In addition, the EMA questioned the approvability of Pfizer’s MAA application based on remaining objections that a single pivotal trial in cSSSI did not provide sufficiently robust data and that patients enrolled in the trial were not sick enough to support use in the desired indication. In September 2008, Pfizer globally withdrew all marketing applications while it considered conducting a second pivotal trial for the treatment of cSSSI in adults. We believe Vicuron had no substantive operations in 2009 prior to our acquisition of Vicuron from Pfizer in December 2009. Based on discussions with the FDA in June 2010 and in anticipation of the publication of new FDA draft guidance we resumed development of dalbavancin.

Risks Associated With Our Business

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the “Risk Factors” section of this prospectus immediately following this prospectus summary. These risks include the following:

•

We currently depend entirely on the success of dalbavancin. Our ability to generate product revenues, which we do not expect will occur before 2014, at the earliest, will depend heavily on the successful development and commercialization of dalbavancin.

•

Clinical trials of dalbavancin or any other product candidate we develop may not be successful. If we are unable to obtain required marketing approvals for, commercialize, obtain and maintain patent protection for or gain market acceptance by physicians, patients and third-party payors of dalbavancin or any other product candidate we develop, or experience significant delays in doing so, our business will be materially harmed and our ability to generate revenue will be materially impaired.

•

Although dalbavancin is protected by three issued U.S. patents, patent protection is not available for composition-of-matter claims that only recite the active pharmaceutical ingredient for dalbavancin.

•

We may be unable to in-license or acquire from third parties rights to additional product candidates or approved products.

•

We have a short operating history. We currently have no commercial products and we have not received marketing approval for any product candidate.

•

We have incurred significant operating losses since inception and may need substantial additional funding. We expect to incur losses for at least the next several years. Our net loss was $33.0 million for the year ended December 31, 2011 and $11.0 million for the year ended December 31, 2010. As of December 31, 2011, we had a deficit accumulated during the development stage of $44.8 million.

Our Corporate Information

We were incorporated under the laws of the State of Delaware on November 4, 2009 under the name Durata Therapeutics, Inc. Our principal executive offices are located at 89 Headquarters Plaza North, 14^th Floor, Morristown, New Jersey 07960, and our telephone number is (973) 993-4865. Our website address is www.duratatherapeutics.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

In this prospectus, unless otherwise stated or the context otherwise requires, references to “Durata,” “we,” “us,” “our” and similar references refer to Durata Therapeutics, Inc. and its consolidated subsidiaries. The trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.

THE OFFERING

Common stock offered

Common stock to be outstanding after this offering

Option to purchase additional shares

The underwriters have an option for a period of 30 days to purchase up to additional shares of our common stock.

Use of proceeds

We intend to use the net proceeds from this offering to complete the clinical development of, to seek marketing approval in the United States and the European Union for and, if approved for the treatment of patients with abSSSI, to fund commercial activities in the United States and Western Europe for dalbavancin, to pursue the development of dalbavancin in additional indications and for working capital and other general corporate purposes, which may include the in-licensing or acquisition of other products or technologies. See “Use of Proceeds.”

Risk Factors

You should read the “Risk Factors” section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.

Proposed NASDAQ Global Market symbol

“DRTX”

The number of shares of our common stock to be outstanding after this offering is based on 500,000 shares of our common stock outstanding as of March 31, 2012 and 77,197,936 additional shares of our common stock issuable upon the automatic conversion of all outstanding shares of our series A preferred stock upon the closing of this offering.

The number of shares of our common stock to be outstanding after this offering excludes:

•

13,075,000 shares of our common stock issuable upon the exercise of stock options outstanding as of March 31, 2012 at a weighted average exercise price of $0.14 per share;

•

1,425,000 additional shares of our common stock available for future issuance as of March 31, 2012 under our existing stock incentive plan; and

•

6,150,000 additional shares of our common stock that will be available for future issuance, as of the closing of this offering, under our 2012 stock incentive plan.

Unless otherwise indicated, all information in this prospectus assumes:

•

no exercise of the outstanding options described above;

•

no exercise by the underwriters of their option to purchase up to additional shares of our common stock;

•

the automatic conversion of all outstanding shares of our series A preferred stock into an aggregate of 77,197,936 shares of our common stock upon the closing of this offering; and

•

the amendment and restatement of our certificate of incorporation and by-laws upon the closing of this offering.

SUMMARY FINANCIAL DATA

You should read the following summary financial data together with our consolidated financial statements and the related notes appearing at the end of this prospectus and the “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this prospectus. We have derived the consolidated statements of operations data for the period from inception (November 4, 2009) to December 31, 2009, for the years ended December 31, 2010 and 2011 and for the period from inception (November 4, 2009) to December 31, 2011 (as we are a development stage company), and the balance sheet data as of December 31, 2011 from our consolidated financial statements included elsewhere in this prospectus, which have been audited by KPMG LLP, an independent registered public accounting firm. We began operations on November 4, 2009, and therefore no financial data exist before such date. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.


	Period From Inception (November 4, 2009) to December 31, 2009			Year Ended December 31, 2010			Year Ended December 31, 2011			Period From Inception (November 4, 2009) to December 31, 2011
	(In Thousands, Except Share and Per Share Data)
Consolidated Statements of Operations Data
Operating expenses:
Research and development expenses	$	198		$	4,818		$	30,133		$	35,149
General and administrative expenses		912			2,777			4,305			7,994
Acquisition related charges, net		26			6,300			1,121			7,447

Operating loss		1,136			13,895			35,559			50,590
Interest income		—			(3	)		(15	)		(18	)

Loss before income tax benefit		1,136			13,892			35,544			50,572
Income tax benefit		(422	)		(2,878	)		(2,511	)		(5,811	)

Net loss	$	(714	)	$	(11,014	)	$	(33,033	)	$	(44,761	)

Net loss attributable to common stockholders	$	(714	)	$	(11,014	)	$	(33,033	)	$	(44,761	)
Net loss attributable to series A preferred stockholders		—			—			—			—

Net loss	$	(714	)	$	(11,014	)	$	(33,033	)	$	(44,761	)

Net loss per common share:
Basic and diluted net loss per share	$	(16.29	)	$	(58.74	)	$	(68.94	)
Weighted average shares—Basic and diluted		43,860			187,500			479,167
Unaudited pro forma basic and diluted net loss per common share(1)							$	(0.43	)
Weighted-average number of common shares used in pro forma net loss per share applicable to common stockholders—basic and diluted								77,677,103

(1)

Pro forma basic and diluted net loss per common share is calculated using a weighted average common equivalent share number of 77,677,103, which assumes the automatic conversion of all outstanding shares of our series A preferred stock, including shares of our series A preferred stock that we issued and sold in March 2012.

The unaudited pro forma balance sheet data set forth below give effect to:

•

our issuance and sale in March 2012 of an aggregate of 22,000,000 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $22 million; and

•

the automatic conversion of all outstanding shares of our series A preferred stock, including shares of our series A preferred stock that we issued and sold in March 2012, into an aggregate of 77,197,936 shares of our common stock upon the closing of this offering.

The unaudited pro forma as adjusted balance sheet data set forth below give further effect to our issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.


	December 31, 2011
	Actual			Pro Forma (Unaudited)			Pro Forma, As Adjusted (1) (Unaudited)
	(In Thousands)
Balance Sheet Data
Cash and cash equivalents	$	11,485		$	33,485
Working capital		9,156			31,156
Total assets		33,625			55,625
Long-term debt		—			—
Redeemable portion—preferred stock		6,000			—
Common stock		5			777
Preferred stock		492			—
Additional paid-in capital		49,824			77,544
Accumulated deficit during the development stage		(44,761	)		(44,761	)
Total stockholders’ equity		5,560			33,560

(1)

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash and cash equivalents, working capital, total assets and total stockholders’ equity by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

RISK FACTORS

Investing in our common stock involves a high degree of risk. Before investing in our common stock, you should consider carefully the risks described below, together with the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus. If any of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant losses since our inception. We expect to incur losses for at least the next several years and may never achieve or maintain profitability.

Since inception, we have incurred significant operating losses. Our net loss was $33.0 million for the year ended December 31, 2011 and $11.0 million for the year ended December 31, 2010. As of December 31, 2011, we had a deficit accumulated during the development stage of $44.8 million. To date, we have not generated any revenues and have financed our operations primarily through private placements of our preferred stock. We have devoted substantially all of our efforts to research and development. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. The net losses we incur may fluctuate significantly from quarter to quarter.

We anticipate that our expenses will increase substantially in connection with completing our ongoing Phase 3 clinical trials of our lead product candidate, dalbavancin, for the treatment of patients with acute bacterial skin and skin structure infections, or abSSSI, and seeking marketing approval for dalbavancin. In addition, if we obtain marketing approval of dalbavancin, we expect to incur significant sales, marketing, distribution and outsourced manufacturing expenses, as well as ongoing research and development expenses. Our expenses also will increase if and as we:

•

maintain, expand and protect our intellectual property portfolio;

•

in-license or acquire other products and technologies;

•

hire additional clinical, quality control and scientific personnel; and

•

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts.

Our ability to become and remain profitable depends on our ability to generate revenue. We do not expect to generate significant revenue unless and until we obtain marketing approval for, and commercialize, dalbavancin. This will require us to be successful in a range of challenging activities, including:

•

successfully completing our ongoing Phase 3 clinical trials of dalbavancin;

•

subject to successful completion of our ongoing Phase 3 clinical trials, applying for and obtaining marketing approval for dalbavancin;

•

protecting our rights to our intellectual property portfolio related to dalbavancin;

•

contracting for the manufacture of commercial quantities of dalbavancin; and

•

establishing sales, marketing and distribution capabilities to effectively market and sell dalbavancin in the United States and Western Europe.

We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or

increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital expand our business or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

Our short operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We are an early-stage company. We were incorporated and commenced active operations in the fourth quarter of 2009. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital and acquiring and developing dalbavancin. We have not yet demonstrated our ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from a company with a product development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

We may need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the development of and seek marketing approval for dalbavancin and, possibly, other product candidates. We expect that the total costs of our clinical trials of dalbavancin in 2012 will be approximately $43 million and that certain other costs related to these trials and anticipated regulatory filings will be approximately $4 million in 2013. In addition, if we obtain marketing approval for dalbavancin or any other product candidate that we develop, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing. Furthermore, upon the closing of this offering, we expect to incur additional costs associated with operating as a public company. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

We expect that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 24 months. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. This estimate assumes, among other things, that, at our sole discretion pursuant to the terms of our agreement with Pfizer, we elect to defer for a period of up to five years payment of the $25 million milestone that we will become obligated to pay upon the first commercial sale of dalbavancin by delivering to Pfizer a promissory note for such amount. Interest on the outstanding principal amount of the promissory note will accrue at a rate of 10% per annum, compounded annually. Our future capital requirements will depend on many factors, including:

•

the results of our ongoing Phase 3 clinical trials of dalbavancin;

•

the costs, timing and outcome of regulatory review of dalbavancin;

•

the costs of commercialization activities for dalbavancin if we receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

•

subject to receipt of marketing approval, revenue received from commercial sales of dalbavancin;

•

the costs of developing dalbavancin for additional indications;

•

our ability to establish collaborations on favorable terms, if at all;

•

the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property-related claims;

•

the extent to which we in-license or acquire other products and technologies; and

•

the scope, progress, results and costs of product development for our product candidates.

Conducting clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, if approved, dalbavancin or any other product candidate that we develop may not achieve commercial success. Accordingly, we may need to continue to rely on additional financing to achieve our business objectives. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. Adequate additional financing may not be available to us on acceptable terms, or at all.

Raising additional capital may cause dilution to our stockholders, including purchasers of common stock in this offering, restrict our operations or require us to relinquish rights to our technologies or product candidates.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Risks Related to Product Development and Commercialization

We currently depend entirely on the success of our lead product candidate, dalbavancin, which we are developing for the treatment of patients with abSSSI. If we are unable to commercialize dalbavancin or experience significant delays in doing so, our business will be materially harmed.

We have invested a significant portion of our efforts and financial resources in the development of dalbavancin for the treatment of patients with abSSSI. Our ability to generate product revenues, which we do not expect will occur before 2014, at the earliest, will depend heavily on our obtaining marketing approval for and commercializing, dalbavancin. The success of dalbavancin will depend on several factors, including the following:

•

successful completion of clinical trials;

•

receipt of marketing approvals from applicable regulatory authorities;

•

making arrangements with third-party manufacturers;

•

obtaining and maintaining patent and trade secret protection and regulatory exclusivity;

•

protecting our rights in our intellectual property portfolio;

•

launching commercial sales of dalbavancin, if and when approved, whether alone or in collaboration with others;

•

acceptance of dalbavancin, if and when approved, by patients, the medical community and third-party payors;

•

effectively competing with other therapies; and

•

a continued acceptable safety profile of dalbavancin following approval.

Successful development of dalbavancin for additional indications, including osteomyelitis, diabetic foot infection and pneumonia, as well as new formulations, will depend on similar factors.

If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize dalbavancin for the treatment of abSSSI or any additional indication, which would materially harm our business.

If clinical trials of dalbavancin or any other product candidate that we develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or similar regulatory authorities outside the United States or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of dalbavancin or any other product candidate.

Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.

For example, although dalbavancin achieved its primary endpoint of non-inferiority in evaluable patients’ clinical response in three Phase 3 clinical trials completed in May and June 2004, we may nonetheless fail to achieve success in two ongoing Phase 3 clinical trials of dalbavancin that we are conducting. The three completed Phase 3 clinical trials evaluating patients with different types of skin and skin structure infections were designed and conducted pursuant to prior FDA guidelines, which the FDA revised in 2010 and are no longer in effect, and did not include cessation of the spread of the lesion based on lesion size measurement as a component of the primary outcome measure. The primary outcome measure for our two ongoing Phase 3 clinical trials is a comparison of clinical response for patients with abSSSI receiving dalbavancin and patients receiving vancomycin, a widely used injectable antibiotic for Staphylococcal infections, with an option to switch to oral linezolid, based on cessation of the spread of the lesion and body temperature. As part of the new draft guidance, the FDA had re-evaluated the types of skin and skin structure infections that should be included in clinical trials to support an indication for treatment and termed these types of infections abSSSI. Our two ongoing Phase 3 clinical trials also have a stricter pre-specified non-inferiority margin than in the three completed Phase 3 clinical trials. In particular because of these differences in trial design, the results of the completed Phase 3 clinical trials are not necessarily predictive of success in our ongoing Phase 3 clinical trials of dalbavancin.

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:

•

clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

•

the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;

•

our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

•

regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

•

we may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

•

we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks;

•

regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;

•

the cost of clinical trials of our product candidates may be greater than we anticipate;

•

the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and

•

our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials.

If we are required to conduct additional clinical trials or other testing of dalbavancin or any other product candidate that we develop beyond those that we contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:

•

be delayed in obtaining marketing approval for our product candidates;

•

not obtain marketing approval at all;

•

obtain approval for indications or patient populations that are not as broad as intended or desired;

•

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings;

•

be subject to additional post-marketing testing requirements; or

•

have the product removed from the market after obtaining marketing approval.

Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.

We may not be able to initiate or continue clinical trials for dalbavancin or any other product candidate that we develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States. The inclusion and exclusion criteria for our ongoing Phase 3 clinical trials of dalbavancin may adversely affect our enrollment rates for patients in these trials. For example, patients who received systemically or topically administered antibiotics within 14 days prior to enrollment are excluded from these trials. In addition, our inclusion criteria, which are designed to enroll patients with more severe infections, require that patients must have at least one systemic

manifestation of infection, based on fever or a minimum white blood cell count. Many of our competitors also have ongoing clinical trials for product candidates that treat the same indications as dalbavancin, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.

Patient enrollment is affected by other factors including:

•

severity of the disease under investigation;

•

eligibility criteria for the study in question;

•

perceived risks and benefits of the product candidate under study;

•

efforts to facilitate timely enrollment in clinical trials;

•

patient referral practices of physicians;

•

the ability to monitor patients adequately during and after treatment; and

•

proximity and availability of clinical trial sites for prospective patients.

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, which would cause the value of our company to decline and limit our ability to obtain additional financing.

If serious adverse or inappropriate side effects are identified during the development of dalbavancin or any other product candidate that we develop, we may need to abandon or limit our development of dalbavancin or any other product candidate.

Dalbavancin is currently in clinical development and the risk of failure is high. It is impossible to predict when or if dalbavancin or any other product candidate that we develop will prove effective or safe in humans or will receive marketing approval. If our product candidates are associated with undesirable side effects or have characteristics that are unexpected, we may need to abandon their development or limit development to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in clinical or earlier stage testing have later been found to cause side effects that prevented further development of the compound.

For example, although data from completed clinical trials for dalbavancin suggest that dosing should be adjusted for patients with severe renal impairment to maintain appropriate drug concentration and exposure rather than as a response to any safety concern, results from our ongoing Phase 3 clinical trials may not support this conclusion. In addition, changes in blood glucose levels have been observed in clinical trials of dalbavancin. If dalbavancin is found to cause changes in blood glucose levels that would be unsafe for patients, the FDA could restrict its use or physicians may be unwilling to prescribe it, which would negatively impact the revenue potential of dalbavancin.

Even if dalbavancin or any other product candidate that we develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for dalbavancin may be smaller than we estimate.

If any of our product candidates receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. For example, current treatments for abSSSI, including generic options, are well established in the medical community, and doctors may continue to rely on these treatments. If dalbavancin does not achieve an adequate level of

acceptance, we may not generate significant product revenues and we may not become profitable. The degree of market acceptance of dalbavancin or any other product candidate that we develop, if approved for commercial sale, will depend on a number of factors, including:

•

efficacy and potential advantages compared to alternative treatments;

•

the ability to offer our products for sale at competitive prices;

•

convenience and ease of administration compared to alternative treatments;

•

the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

•

the strength of marketing and distribution support;

•

sufficient third-party coverage or reimbursement;

•

the prevalence and severity of any side effects; and

•

the development of resistance by bacterial strains to treatment with dalbavancin.

In addition, the potential market opportunity for dalbavancin is difficult to precisely estimate, particularly in the out-patient setting. Our estimates of the potential market opportunity for dalbavancin include several key assumptions based on our industry knowledge, industry publications, third-party research reports and other surveys. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions. If any of these assumptions proves to be inaccurate, then the actual market for dalbavancin could be smaller than our estimates of our potential market opportunity. If the actual market for dalbavancin is smaller than we expect, our product revenue may be limited and it may be more difficult for us to achieve or maintain profitability.

If we are unable to establish sales and marketing capabilities or enter into sales and marketing agreements with third parties, we may not be successful in commercializing dalbavancin or any other product candidate that we develop if and when dalbavancin or any other product candidate is approved.

We do not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of pharmaceutical products. To achieve commercial success for any approved product, we must either develop a sales and marketing organization or outsource these functions to third parties. We plan to build a commercial organization for dalbavancin in the United States and Western Europe that includes a targeted hospital sales force, a marketing and medical affairs staff, a reimbursement support team, a hospital formulary specialist team and a specialty distribution team. Although we are currently evaluating our commercialization strategy outside the United States and Western Europe, we expect that we would commercialize dalbavancin in other markets through a variety of types of collaboration arrangements with leading pharmaceutical and biotechnology companies.

There are risks involved with both establishing our own sales, marketing and distribution capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing and distribution capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.

Factors that may inhibit our efforts to commercialize our products on our own include:

•

our inability to recruit and retain adequate numbers of effective sales and marketing personnel;

•

the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe any future products;

•

the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

•

unforeseen costs and expenses associated with creating an independent sales and marketing organization.

If we enter into arrangements with third parties to perform sales, marketing and distribution services, our product revenues or the profitability of these product revenues to us are likely to be lower than if we were to market and sell any products that we develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell and market our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

The development and commercialization of new drug products is highly competitive. We face competition with respect to dalbavancin, and will face competition with respect to any other product candidate that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of product candidates for the treatment of abSSSI. Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

There are a variety of available therapies marketed for the treatment of abSSSI. Some of these drugs are branded and subject to patent protection, and others, including vancomycin, are available on a generic basis. Many of these approved drugs are well established therapies and are widely accepted by physicians, patients and third-party payors. Insurers and other third-party payors may also encourage the use of generic products. We expect that if dalbavancin is approved, it will be priced at a significant premium over vancomycin and other competitive generic products. This may make it difficult for us to replace existing therapies with dalbavancin.

There are also a number of products in clinical development by third parties to treat abSSSI. These companies include pharmaceutical companies, biotechnology companies, and specialty pharmaceutical and generic drug companies of various sizes, such as The Medicines Company, Trius Therapeutics, Inc., Cempra, Inc., Rib-X Pharmaceuticals, Inc., Paratek Pharmaceuticals, Inc., Nabriva Therapeutrics AG, Tetraphase Pharmaceuticals, Inc. and Furiex Pharmaceuticals, Inc. Our competitors may develop products that are more effective, safer, more convenient or less costly than dalbavancin or that would render dalbavancin obsolete or non-competitive. Our competitors may also obtain marketing approval from the FDA or other regulatory authorities for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Even if we are able to commercialize dalbavancin or any other product candidate that we develop, the product may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business.

The regulations that govern marketing approvals, pricing and reimbursement for new drug products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.

Our ability to commercialize dalbavancin or any other product candidate successfully also will depend in part on the extent to which reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for dalbavancin or any other product that we commercialize and, if reimbursement is available, the level of reimbursement. Reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining reimbursement for our products may be particularly difficult because of the higher prices often associated with drugs administered under the supervision of a physician. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.

There may be significant delays in obtaining reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar regulatory authorities outside the United States. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs, and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

Our strategy of obtaining rights to product candidates and approved products for the hospital and acute care markets through in-licenses and acquisitions may not be successful.

We intend to enhance our product pipeline through strategically in-licensing or acquiring clinical stage product candidates or approved products for the hospital and acute care markets. Because we do not engage in drug discovery or early stage research, the future growth of our business will depend in significant part on our

ability to in-license or acquire rights to additional product candidates or approved products. However, we may be unable to in-license or acquire any products or product candidates from third parties. The in-licensing and acquisition of pharmaceutical products is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire products or product candidates that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to in-license or acquire the relevant product or product candidate on terms that would allow us to make an appropriate return on our investment. Furthermore, we may be unable to identify suitable products or product candidates within our area of focus. If we are unable to successfully obtain rights to suitable products or product candidates, our business, financial condition and prospects for growth could suffer.

Product liability lawsuits against us could divert our resources, cause us to incur substantial liabilities and limit commercialization of any products that we may develop.

We face an inherent risk of product liability exposure related to the testing of dalbavancin and any other product candidate that we develop in human clinical trials and will face an even greater risk if we commercially sell any products that we develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

•

reduced resources of our management to pursue our business strategy;

•

decreased demand for any product candidates or products that we may develop;

•

injury to our reputation and significant negative media attention;

•

withdrawal of clinical trial participants;

•

significant costs to defend the related litigation;

•

substantial monetary awards to trial participants or patients;

•

loss of revenue; and

•

the inability to commercialize any products that we may develop.

We currently hold $15 million in product liability insurance coverage, which may not be adequate to cover all liabilities that we may incur. We will need to increase our insurance coverage when and if we begin commercializing dalbavancin or any other product candidate that receives marketing approval. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and wastes, we cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Risks Related to Our Dependence on Third Parties

We expect to depend on collaborations with third parties for the development and commercialization of our product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates.

Although we expect to commercialize dalbavancin ourselves in the United States and Western Europe, we intend to seek to commercialize dalbavancin through a variety of types of collaboration arrangements in other markets, including Eastern Europe and Asia. In addition, we may seek third-party collaborators for development and commercialization of other product candidates. Our likely collaborators for any marketing, distribution, development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. We are not currently party to any such arrangement. However, if we do enter into any such arrangements with any third parties in the future, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our product candidates. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.

Collaborations involving our product candidates would pose the following risks to us:

•

collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

•

collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities;

•

collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

•

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

•

a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products;

•

collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

•

collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;

•

disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources; and

•

collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated.

If we are not able to establish collaborations, we may have to alter our development and commercialization plans.

The potential commercialization of dalbavancin and the development and potential commercialization of other product candidates will require substantial additional cash to fund expenses. For some of our product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates. For example, we intend to seek to commercialize dalbavancin through a variety of types of collaboration arrangements outside the United States and Western Europe.

We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate. We may also be restricted under future license agreements from entering into agreements on certain terms with potential collaborators. Collaborations are complex and time-consuming to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.

We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.

We rely on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

We do not independently conduct clinical trials of dalbavancin. We rely on third parties, such as contract research organizations, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials for dalbavancin and expect to rely on these third parties to conduct clinical trials of any

other product candidate that we develop. Any of these third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it would delay our product development activities.

Our reliance on these third parties for clinical development activities reduces our control over these activities but does not relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with standards, commonly referred to as Good Clinical Practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.

We also rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, producing additional losses and depriving us of potential product revenue.

We contract with third parties for the manufacture of dalbavancin for clinical trials and expect to continue to do so in connection with the commercialization of dalbavancin and for clinical trials and commercialization of any other product candidates that we develop. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of dalbavancin and have limited personnel with manufacturing experience. We currently rely on and expect to continue to rely on third-party contract manufacturers to manufacture clinical supplies and commercial quantities of dalbavancin and other drug substances and drug product candidates if and when approved for marketing by applicable regulatory authorities.

We currently rely on one third-party manufacturer to supply us with dalbavancin drug substance and another third-party manufacturer to conduct fill and finish services. We obtain our supplies of the drug substance for dalbavancin on a purchase order basis and do not have a long-term supply arrangement in place. We may be unable to establish long-term supply arrangements with a third-party manufacturer of drug substance or to do so on acceptable terms.

We have a development and supply agreement with Hospira Worldwide, Inc., or Hospira, for our fill and finish services. If Hospira should become unavailable to us for any reason for fill and finish services, we believe that there are a number of potential replacements, although we might incur some delay in identifying or qualifying such replacements. Although Hospira has agreed to supply us with a specified percentage of our requirements of dalbavancin, Hospira is not obligated to manufacture any products in excess of this specified percentage. If Hospira is unable to supply us with product as a result of its breach, a force majeure event or restrictions under applicable law, we may engage an alternate manufacturer to supply us with the quantity of product which Hospira was unable to supply.

Even if we are able to establish and maintain such arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

•

reliance on the third party for regulatory compliance and quality assurance;

•

the possible breach of the manufacturing agreement by the third party;

•

the possible misappropriation of our proprietary information, including our trade secrets and know-how; and

•

the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

Third-party manufacturers may not be able to comply with current good manufacturing practices, or cGMP, regulations or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products and harm our business and results of operations.

Dalbavancin and any other product that we develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. We do not currently have arrangements in place for redundant supply or a second source for bulk drug substance for dalbavancin or for fill-finish services. If either of our existing manufacturers should become unavailable to us for any reason, we believe that there are a number of potential replacements, although we might incur some delay in identifying or qualifying such replacements. We have identified a possible secondary supplier of drug substance and are currently engaged in a technology transfer process with this manufacturer.

Our current and anticipated future dependence upon others for the manufacture of dalbavancin and any other product candidate or product that we develop may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.

If we fail to comply with our obligations in the agreements under which we in-license or acquire development or commercialization rights to products or technology from third parties, we could lose commercial rights that are important to our business.

In December 2010, we acquired from RaQualia Pharma Inc., or RaQualia, rights to commercialize dalbavancin in Japan, which Pfizer had previously granted to RaQualia pursuant to a marketing rights agreement. Under our agreement with RaQualia, if we fail to use reasonable efforts to file a regulatory approval application in Japan for dalbavancin within a specified time, RaQualia has the right to regain rights to dalbavancin in Japan. Although we currently plan to pursue the filing of a regulatory approval application in Japan within the specified time, our failure to do so could result in the loss of our commercial rights in Japan and reduce the commercial value of our rights to dalbavancin.

We may enter into additional agreements, including license agreements, in the future that impose diligence, milestone payment, royalty, insurance and other obligations on us. If we fail to comply with these future obligations, third parties may have the right to terminate these agreements, in which event we might not be able to market any product that is covered by these agreements, which could materially adversely affect the value of the product candidate being developed under any such license agreement. Termination of these license

agreements or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less favorable terms, or cause us to lose right in important intellectual property or technology.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our proprietary technology and products. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel technologies and product candidates that are important to our business. This process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Moreover, if we license technology or product candidates from third parties in the future, these license agreements may not permit us to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering this intellectual property. These agreements could also give our licensors the right to enforce the licensed patents without our involvement, or to decide not to enforce the patents without our consent. Therefore, in these circumstances, we could not be certain that these patents and applications would be prosecuted and enforced in a manner consistent with the best interests of our business.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.

The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Assuming the other requirements for patentability are met, currently, in the United States, the first to make the claimed invention is entitled to the patent, while outside the United States, the first to file a patent application is entitled to the patent. In March 2013, the United States will transition to a first-inventor-to-file system in which, assuming the other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. Moreover, we may be subject to a third party preissuance submission of prior art to the U.S. Patent and Trademark Office, or become involved in opposition, derivation, reexamination, inter partes review or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner.

For example, although dalbavancin is protected by three issued U.S. patents consisting of a method-of-treatment patent, a dosage-form patent and a formulation patent, patent protection is not available for composition-of-matter claims that only recite the active pharmaceutical ingredient for dalbavancin. Because dalbavancin lacks composition-of-matter protection for its active pharmaceutical ingredient, competitors will be able to offer and sell products with the same active pharmaceutical ingredient so long as these competitors do not infringe any other patents covering this drug. Moreover, method-of-treatment patents, are more difficult to enforce than composition-of-matter patents because of the risk of off-label sale or use of the subject compound. Physicians are permitted to prescribe an approved product for uses that are not described in the product’s labeling. Although off-label prescriptions may infringe our method-of-treatment patents, the practice is common across medical specialties and such infringement is difficult to prevent or prosecute. Off-label sales would limit our ability to generate revenue from the sale of our product candidates, if approved for commercial sale. In addition, if a third party were able to design around our dosage-form and formulation patents and create a different formulation and dosage form that is not covered by our patents or patent applications, we would likely be unable to prevent that third party from manufacturing and marketing its product.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

Competitors may infringe our patents, trademarks, copyrights or other intellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such marks. In any infringement litigation, any award of monetary damages we receive may not be commercially valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing

the intellectual property and other proprietary rights of third parties. There is considerable intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology, including interference proceedings before the U.S. Patent and Trademark Office. Third parties may assert infringement claims against us based on existing or future intellectual property rights. We have not conducted a freedom-to-operate search or analysis for dalbavancin, and we may not be aware of pending or future patent applications that, if issued, would block us from commercializing dalbavancin. Thus, we cannot guarantee that dalbavancin, or our commercialization thereof, does not and will not infringe any third party’s intellectual property.

If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

We may be subject to claims by third parties asserting that we or our employees have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer. Litigation may be necessary to defend against these claims.

In addition, while we typically require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Moreover, because we acquired the rights to our lead product candidate from Pfizer, we must rely on Pfizer’s practices, and those of its predecessors, with regard to the assignment of intellectual property therein. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to management.

Intellectual property litigation could cause us to spend substantial resources and could distract our personnel from their normal responsibilities.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or

proceedings could substantially increase our operating losses and reduce the resources available for development, sales, marketing or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patents for some of our technology and products, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. However, we cannot guarantee that we have executed these agreements with each party that may have or have had access to our trade secrets.

Moreover, because we acquired the rights to our lead product candidate from Pfizer, we must rely on Pfizer’s practices, and those of its predecessors, with regard to parties that may have had access to our trade secrets related thereto before our acquisition. Any party with whom we or they have executed such an agreement may breach that agreement and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

We have not yet registered our trademarks in all of our potential markets, and failure to secure those registrations could adversely affect our business.

Our trademark applications may not be allowed for registration, and our registered trademarks may not be maintained or enforced. During trademark registration proceedings, we may receive rejections. Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the U.S. Patent and Trademark Office and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. If we do not secure registrations for our trademarks, we may encounter more difficulty in enforcing them against third parties than we otherwise would.

In addition, we have not yet proposed a proprietary name for dalbavancin in any jurisdiction. Any proprietary name we propose to use with dalbavancin in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

Risks Related to Regulatory Approval and Other Legal Compliance Matters

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize dalbavancin or any other product candidate that we develop, and our ability to generate revenue will be materially impaired.

Our product candidates, including dalbavancin, and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market dalbavancin or any other product candidate from regulatory authorities in any jurisdiction. We have only limited experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third-party contract research organizations to assist us in this process. Securing FDA approval requires the submission of extensive preclinical and clinical data and supporting information to the FDA for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing FDA approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the FDA. The FDA or other regulatory authorities may determine that dalbavancin or any other product candidate that we develop is not effective, or is only moderately effective, or has undesirable or unintended side effects, toxicities, safety profile or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. The FDA has substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

For example, between 2005 and 2007, the FDA issued three approvable letters relating to the NDA filed in December 2004 for dalbavancin, and in September 2008, Pfizer globally withdrew all marketing applications for dalbavancin. In general, approvable letters identify issues that must be addressed in order to obtain approval of a pending NDA. The first two approvable letters raised, in part, open items on the manufacturing process of dalbavancin. After addressing the first approvable letter by making changes to the manufacturing process, Pfizer made additional changes to the manufacturing process, resulting in a second approvable letter. The third approvable letter in part requested that Pfizer justify the non-inferiority margin used for the then-current Phase 3 clinical trial comparing dalbavancin and cefazolin. In addition, the European Medicines Agency, or EMA, questioned the approvability of Pfizer’s marketing authorization application based on remaining objections that a single pivotal trial in complicated skin and skin structure infections did not provide sufficiently robust data and that patients enrolled in the trial were not sick enough to support use in the desired indication. The FDA and the EMA may identify additional issues as their review of our current or future applications proceeds.

If we experience further delays in obtaining approval or if we fail to obtain approval of dalbavancin or any other product candidate that we develop, the commercial prospects for dalbavancin or any other product candidate may be harmed and our ability to generate revenues will be materially impaired.

Our special protocol agreements with the FDA and scientific advice from the European Medicines Agency for dalbavancin do not guarantee ultimate approval and may not lead to a faster development or regulatory review or approval process.

We are currently conducting our Phase 3 clinical trial program for dalbavancin pursuant to special protocol agreements, or SPAs, with the FDA based on draft guidance issued by the FDA in 2010 for the development of drugs to treat abSSSI. We also designed our ongoing Phase 3 clinical trials based on scientific advice that we received from the EMA in December 2010 to meet the regulatory filing requirements for dalbavancin in the European Union. Once the FDA and an applicant reach an agreement under the special protocol assessment process regarding the design and size of a clinical trial, the agreements generally cannot be changed after the clinical trial begins. However, the FDA may revoke or alter an agreement under defined circumstances, such as changes in the relevant data or assumptions provided by the sponsor or the emergence of new public health concerns. A revocation or alteration in our existing SPAs could significantly delay or prevent approval of our application. In addition, any significant change to the protocols for a clinical trial subject to an SPA would require prior FDA approval, which could delay implementation of such a change and the conduct of the related clinical trial. Our SPAs with the FDA and the scientific advice from the EMA do not ensure that dalbavancin will receive marketing approval or that the approval process will be faster than conventional regulatory procedures.

Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.

In order to market and sell dalbavancin and any other product candidate that we develop in the European Union and many other jurisdictions, we or our third-party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We or these third parties may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.

Any product candidate, including dalbavancin, for which we obtain marketing approval could be subject to restrictions or withdrawal from the market and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

Any product candidate, including dalbavancin, for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating to manufacturing, quality control, quality assurance, complaints and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or may be subject to significant conditions of approval, or may impose requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling and regulatory requirements. The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we do not restrict the marketing of our products only to their approved indications, we may be subject to enforcement action for off-label marketing.

In addition, later discovery of previously unknown problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

•

restrictions on such products, manufacturers or manufacturing processes;

•

restrictions on the labeling or marketing of a product;

•

restrictions on product distribution or use;

•

requirements to conduct post-marketing clinical trials;

•

warning or untitled letters;

•

withdrawal of the products from the market;

•

refusal to approve pending applications or supplements to approved applications that we submit;

•

recall of products;

•

fines, restitution or disgorgement of profits or revenue;

•

suspension or withdrawal of marketing approvals;

•

refusal to permit the import or export of our products;

•

product seizure; or

•

injunctions or the imposition of civil or criminal penalties.

Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any product candidates, including dalbavancin, for which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations, include the following:

•

the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federally funded healthcare programs such as Medicare and Medicaid;

•

the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

•

the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

•

the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;

•

the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; and

•

analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of dalbavancin or any other product candidate that we develop, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates, including dalbavancin, for which we obtain marketing approval.

In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for physician administered drugs. In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost reduction initiatives and other provisions of this legislation could decrease the coverage and price that we receive for any approved products. While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors.

More recently, in March 2010, President Obama signed into law the Health Care Reform Law, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. Effective October 1, 2010, the Health Care Reform Law revises the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates to states. Further, the new law imposes a significant annual fee on companies that manufacture or import branded prescription drug products. Substantial new provisions affecting compliance have also been enacted, which may affect our business practices with health care practitioners. We will not know the full effects of the Health Care Reform Law until

applicable federal and state agencies issue regulations or guidance under the new law. Although it is too early to determine the full effect of the Health Care Reform Law, the new law appears likely to continue the pressure on pharmaceutical pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

Risks Related to Employee Matters and Managing Growth

Our future success depends on our ability to retain our chief executive officer and other key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on Paul Edick, our Chief Executive Officer, Corey Fishman, our Chief Operating Officer, and Michael Dunne, our Chief Medical Officer, as well as the other principal members of our management and scientific teams. Although we have formal employment agreements with our executive officers, these agreements do not prevent them from terminating their employment with us at any time. We do not maintain “key person” insurance for any of our executives or other employees. The loss of the services of any of these persons could impede the achievement of our development and commercialization objectives.

Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be critical to our success. We may not be able to attract and retain these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.

We expect to expand our development, regulatory and sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs and sales, marketing and distribution. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The physical expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

Risks Related to Our Common Stock and This Offering

After this offering, our executive officers, directors and principal stockholders will maintain the ability to control all matters submitted to stockholders for approval.

Upon the closing of this offering, our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock before this offering will, in the aggregate, beneficially own shares representing approximately % of our capital stock. As a result, if these stockholders were to choose to act

together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire.

Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our corporate charter and our by-laws that will become effective upon the closing of this offering may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions:

•

establish a classified board of directors such that not all members of the board are elected at one time;

•

allow the authorized number of our directors to be changed only by resolution of our board of directors;

•

limit the manner in which stockholders can remove directors from the board;

•

establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;

•

require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

•

limit who may call stockholder meetings;

•

authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

•

require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or by-laws.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

If you purchase shares of common stock in this offering, you will suffer immediate dilution of your investment.

The initial public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after this offering. To the extent outstanding options are exercised, you will incur further dilution. Based on an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, you will experience immediate dilution of $ per share, representing the difference between our pro forma net tangible book value per share after giving effect to this offering and the assumed initial public

offering price. In addition, purchasers of common stock in this offering will have contributed approximately % of the aggregate price paid by all purchasers of our stock but will own only approximately % of our common stock outstanding after this offering.

An active trading market for our common stock may not develop.

Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations with the underwriters. Although we have applied to list our common stock on The NASDAQ Global Market, an active trading market for our shares may never develop or be sustained following this offering. If an active market for our common stock does not develop, it may be difficult for you to sell shares you purchase in this offering without depressing the market price for the shares or at all.

The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock in this offering.

Our stock price may be volatile. The stock market in general and the market for smaller pharmaceutical and biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, including:

•

the success of competitive products or technologies;

•

results of clinical trials of dalbavancin and any other product candidate that we develop;

•

results of clinical trials of product candidates of our competitors;

•

regulatory or legal developments in the United States and other countries;

•

developments or disputes concerning patent applications, issued patents or other proprietary rights;

•

the recruitment or departure of key personnel;

•

the level of expenses related to any of our product candidates or clinical development programs;

•

the results of our efforts to develop, in-license or acquire additional product candidates or products;

•

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

•

variations in our financial results or those of companies that are perceived to be similar to us;

•

changes in the structure of healthcare payment systems;

•

market conditions in the pharmaceutical and biotechnology sectors;

•

general economic, industry and market conditions; and

•

the other factors described in this “Risk Factors” section.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In this prospectus, we have not included all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, the JOBS Act also provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act, the listing requirements of the NASDAQ Global Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.

However, for as long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies as described in the preceding risk factor. We may remain an emerging growth company until the end of the fiscal year in which the fifth anniversary of this offering occurs, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time or if we have annual gross revenues of $1 billion or more in any fiscal year, we would cease to be an emerging growth company as of December 31 of the applicable year.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we will be required to furnish a report by our management on our internal control over financial reporting. However, as an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm until we are no longer an emerging growth company. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to

document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. After this offering, we will have outstanding shares of common stock based on the number of shares outstanding as of March 31, 2012. This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates. Of the remaining shares, shares are currently restricted as a result of securities laws or lock-up agreements but will be able to be sold after the offering as described in the “Shares Eligible for Future Sale” section of this prospectus. Moreover, after this offering, holders of an aggregate of shares of our common stock will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the “Underwriters” section of this prospectus.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this prospectus, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this prospectus include, among other things, statements about:

•

the timing and conduct of our two ongoing global Phase 3 clinical trials of dalbavancin for the treatment of abSSSI, including statements regarding the timing of completion of the trials and the period during which the results of the trials will become available;

•

the timing of and our ability to obtain U.S. and foreign marketing approval of dalbavancin and other product candidates we develop and the ability of dalbavancin and other product candidates to meet existing or future regulatory standards;

•

the potential receipt of revenues from future sales of dalbavancin;

•

our plans to pursue development of dalbavancin for additional indications other than abSSSI;

•

the potential advantages of dalbavancin;

•

the rate and degree of market acceptance and clinical utility of dalbavancin;

•

our estimates regarding the potential market opportunity for dalbavancin;

•

our ability to in-license or acquire additional clinical stage product candidates or approved products in our areas of focus;

•

our sales, marketing and distribution capabilities and strategy;

•

our ability to establish and maintain arrangements for manufacture of dalbavancin and any other product candidates we develop;

•

our intellectual property position;

•

our expectations related to the use of proceeds from this offering;

•

our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;

•

the impact of government laws and regulations; and

•

our competitive position.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this prospectus, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this prospectus are made as of the date of this prospectus, and we do not assume any obligation to update any forward-looking statements except as required by applicable law.

USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of shares of our common stock in this offering will be approximately $ million, assuming an initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares in full, we estimate that the net proceeds from this offering will be approximately $ million.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the net proceeds from this offering by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions.

As of December 31, 2011, we had cash and cash equivalents of approximately $11.5 million. We currently estimate that we will use the net proceeds from this offering, together with our cash and cash equivalents, as follows:

•

$ million to complete the clinical development of and seek marketing approval in the United States and the European Union for dalbavancin for the treatment of patients with abSSSI;

•

$ million to fund commercial activities for dalbavancin in the United States and Western Europe, if it is approved for the treatment of patients with abSSSI;

•

$ million to pursue the development of dalbavancin in additional indications; and

•

the remainder for working capital and other general corporate purposes, which may include the in-licensing or acquisition of other products or technologies.

This expected use of the net proceeds from this offering and our existing cash and cash equivalents represents our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development and commercialization efforts, the status of and results from clinical trials, as well as any collaborations that we may enter into with third parties for our product candidates, and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. We have no current understandings, agreements or commitments for any material acquisitions or licenses of any products, businesses or technologies.

Based on our planned use of the net proceeds from this offering and our existing cash and cash equivalents, we estimate that such funds will be sufficient to enable us to complete the clinical development of, to seek marketing approval in the United States and the European Union for, and, if approved for the treatment of patients with abSSSI, to commercially launch dalbavancin in the United States and Western Europe. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. This estimate assumes, among other things, that, at our sole discretion pursuant to the terms of our agreement with Pfizer, we elect to defer for a period of up to five years payment of the $25 million milestone that we will become obligated to pay upon the first commercial sale of dalbavancin by delivering to Pfizer a promissory note for such amount. Interest on the outstanding principal amount of the promissory note will accrue at a rate of 10% per annum, compounded annually.

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

DIVIDEND POLICY

We have never declared or paid cash dividends on our common stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. We do not intend to pay cash dividends to holders of our common stock in the foreseeable future.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2011:

•

on an actual basis;

•

on a pro forma basis to give effect to:

•

our issuance and sale in March 2012 of an aggregate of 22,000,000 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $22 million; and

•

on a pro forma as adjusted basis to give further effect to our issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Our capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with “Selected Financial Data,” our financial statements and the related notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus.


	As of December 31, 2011
	Actual			Pro Forma			Pro Forma As Adjusted
	(In Thousands, Except Share and Per Share Data)
Cash and cash equivalents	$	11,485		$	33,485		$

Redeemable portion—series A preferred stock, par value $0.01 per share; 6,000,000 shares authorized, issued and outstanding, actual; no shares authorized and no shares issued or outstanding, pro forma and pro forma as adjusted		6,000			—			—
Stockholders equity:
Preferred stock, par value $0.01 per share; no shares authorized and no shares issued and outstanding, actual; shares authorized and no shares issued and outstanding, pro forma and pro forma as adjusted		—			—			—
Common stock, par value $0.01 per share; 125,000,000 shares authorized, 500,000 shares issued and outstanding, actual; 125,000,000 shares authorized, pro forma and pro forma as adjusted; 77,697,936 shares issued and outstanding, pro forma; shares issued and outstanding, pro forma as adjusted		5			777
Series A preferred stock, par value $0.01 per share; 99,000,000 shares authorized, 49,197,936 shares issued and outstanding, actual; no shares authorized and no shares issued and outstanding, pro forma and pro forma as adjusted		492			—			—
Additional paid-in capital		49,824			77,544
Accumulated deficit during the development stage		(44,761	)		(44,761	)

Total stockholders’ equity		5,560			33,560

Total capitalization	$	11,560		$	33,560		$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization on a pro forma as adjusted basis by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The table above does not include:

•

11,925,000 shares of our common stock issuable upon the exercise of stock options outstanding as of December 31, 2011 at a weighted average exercise price of $0.13 per share;

•

2,575,000 additional shares of our common stock available for future issuance as of December 31, 2011 under our existing stock incentive plan; and

•

6,150,000 additional shares of our common stock available for future issuance, as of the closing of this offering, under our 2012 stock incentive plan.

DILUTION

If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock after this offering.

Our historical net tangible book value as of December 31, 2011 was $(9.5) million, or $(19.08) per share of our common stock. Historical net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of shares of our common stock outstanding.

Our pro forma net tangible book value as of December 31, 2011 was $12.5 million, or $0.16 per share of our common stock. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the pro forma number of shares of our common stock outstanding after giving effect to our issuance and sale in March 2012 of an aggregate of 22,000,000 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $22.0 million and the automatic conversion of all outstanding shares of our preferred stock, including shares of our series A preferred stock that we issued and sold in March 2012, into an aggregate of 77,197,936 shares of our common stock upon the closing of this offering.

After giving effect to our issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of December 31, 2011 would have been $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value per share of $ to existing stockholders and immediate dilution of $ in pro forma net tangible book value per share to new investors purchasing common stock in this offering. Dilution per share to new investors is determined by subtracting pro forma net tangible book value per share after this offering from the initial public offering price per share paid by new investors. The following table illustrates this dilution on a per share basis:


Assumed initial public offering price per share				$
Historical net tangible book value per share as of December 31, 2011	$	(19.08	)
Increase attributable to the conversion of outstanding preferred stock		19.24

Pro forma net tangible book value per share as of December 31, 2011		0.16
Increase in net tangible book value per share attributable to new investors

Pro forma net tangible book value per share after this offering

Dilution per share to new investors				$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, would increase (decrease) our pro forma net tangible book value by approximately $ million, our pro forma net tangible book value per share by approximately $ and dilution per share to new investors by approximately $ , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares or if any additional shares are issued in connection with outstanding options, you will experience further dilution.

The following table summarizes, on a pro forma basis as of December 31, 2011, the total number of shares purchased from us, the total consideration paid, or to be paid, and the average price per share paid, or to be paid, by existing stockholders and by new investors in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. As the table shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing stockholders paid.


	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percentage			Amount	Percentage			Average Price Per Share
Existing stockholders			%		$		%		$
New investors

Total			100	%	$		100	%

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $ million and increase (decrease) the percentage of total consideration paid by new investors by approximately %, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

The table above is based on actual shares of our common stock outstanding as of December 31, 2011 and 77,197,936 additional shares of our common stock issuable upon the automatic conversion of all outstanding shares of our preferred stock, including shares of our series A preferred stock that we issued and sold in March 2012, upon the closing of this offering.

The table above does not include:

•

11,925,000 shares of our common stock issuable upon the exercise of stock options outstanding as of December 31, 2011 at a weighted average exercise price of $0.13 per share;

•

2,575,000 additional shares of our common stock available for future issuance as of December 31, 2011 under our existing stock incentive plan; and

•

6,150,000 additional shares of our common stock available for future issuance, as of the closing of this offering, under our 2012 stock incentive plan.

If the underwriters exercise their option to purchase additional shares in full, the following will occur:

•

the percentage of shares of our common stock held by existing stockholders will decrease to approximately % of the total number of shares of our common stock outstanding after this offering; and

•

the number of shares of our common stock held by new investors will increase to , or approximately % of the total number of shares of our common stock outstanding after this offering.

SELECTED FINANCIAL DATA

You should read the following selected financial data together with our financial statements and the related notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus. We have derived the consolidated statements of operations data for the period from inception (November 4, 2009) to December 31, 2009, for the years ended December 31, 2010 and 2011 and for the period from inception (November 4, 2009) to December 31, 2011 (as we are a development stage company), and the balance sheet data as of December 31, 2010 and 2011 from our consolidated financial statements included elsewhere in this prospectus, which have been audited by KPMG LLP, an independent registered public accounting firm. We have derived the balance sheet data as of December 31, 2009 from our audited consolidated financial statements not included in this prospectus. We began operations on November 4, 2009, and therefore no financial data exist before such date. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.


	Period From Inception (November 4, 2009) to December 31, 2009			Year Ended December 31, 2010			Year Ended December 31, 2011			Period From Inception (November 4, 2009) to December 31, 2011
		(In Thousands, Except Share and Per Share Data)
Consolidated Statements of Operations Data
Operating expenses:
Research and development expenses	$	198		$	4,818		$	30,133		$	35,149
General and administrative expenses		912			2,777			4,305			7,994
Acquisition related charges, net		26			6,300			1,121			7,447

Operating loss		1,136			13,895			35,559			50,590
Interest income		—			(3	)		(15	)		(18	)

Loss before income tax benefit		1,136			13,892			35,544			50,572
Income tax benefit		(422	)		(2,878	)		(2,511	)		(5,811	)

Net loss	$	(714	)	$	(11,014	)	$	(33,033	)	$	(44,761	)

Net loss attributable to common stockholders	$	(714	)	$	(11,014	)	$	(33,033	)	$	(44,761	)
Net loss attributable to Series A preferred stockholders		—			—			—			—

Net loss	$	(714	)	$	(11,014	)	$	(33,033	)	$	(44,761	)

Net loss per common share:
Basic and diluted net loss per share	$	(16.29	)	$	(58.74	)	$	(68.94	)
Weighted average shares—Basic and diluted		43,860			187,500			479,167
Unaudited pro forma basic and diluted net loss per common share(1)							$	(0.43	)
Weighted-average number of common shares used in pro forma net loss per share applicable to common stockholders—basic and diluted								77,677,103

(1)


	December 31
	2009			2010			2011
	(In Thousands)
Balance Sheet Data
Cash and cash equivalents	$	3,626		$	2,264		$	11,485
Working capital		3,480			3,797			9,156
Total assets		25,356			26,455			33,625
Long-term debt		—			—			—
Redeemable portion—preferred stock		6,000			6,000			6,000
Common stock		2			3			5
Preferred stock		80			132			492
Additional paid-in capital		7,927			13,405			49,824
Accumulated deficit during the development stage		(715	)		(11,728	)		(44,761	)
Total stockholders’ equity		7,294			1,812			5,560

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing at the end of this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read the “Risk Factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We acquired our rights to dalbavancin through our acquisition of all of the outstanding shares of capital stock of Vicuron Pharmaceuticals Inc., or Vicuron, from Pfizer Inc., or Pfizer, in December 2009. We paid total upfront consideration of $10 million for the Vicuron shares and dalbavancin inventory to be used in research. In March 2011, Pfizer refunded to us $6 million of the initial purchase price under the terms of our stock purchase agreement, based on documentation we provided that supported the position that marketing approval for dalbavancin required more than one new Phase 3 clinical trial. Following the first commercial sale of dalbavancin for the treatment of abSSSI in the United States, the United Kingdom, Germany, Italy, Spain or France, we are obligated to pay Pfizer an additional milestone payment of $25 million. However, at our sole discretion, we may elect to defer the milestone payment for a period of up to five years if we deliver to Pfizer a promissory note for the full amount of such milestone payment. Interest on the outstanding principal amount of the promissory note will accrue at a rate of 10% per annum, compounded annually.

We were incorporated and commenced active operations in the fourth quarter of 2009. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital and acquiring and developing dalbavancin. To date, we have not generated any revenues and have financed our operations primarily with net proceeds from private placements of our preferred stock. As of December 31, 2011, we had a deficit accumulated during the development stage of $44.8 million. Our net loss was $33.0 million for the year ended December 31, 2011 and $11.0 million for the year ended December 31, 2010. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the development of and seek marketing approval for dalbavancin and, possibly, other product candidates. In addition, if we obtain marketing approval of dalbavancin or any other product candidate that we develop, we expect to incur significant sales, marketing, distribution and outsourced manufacturing expenses, as well as ongoing research and development expenses. Furthermore, upon the closing of this offering, we expect to incur additional costs associated with operating as a public company. Although we cannot reasonably estimate the amount of these additional public company costs, we expect that these costs will include significant legal, accounting, investor relations and other expenses that we did not incur as a private company. Moreover, additional rules and regulations applicable to public companies will increase our legal and financial compliance costs and will make some activities more

time-consuming and costly. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. We will need to generate significant revenues to achieve profitability, and we may never do so.

Financial Operations Overview

Revenue

To date, we have not generated any revenues. Our ability to generate product revenues, which we do not expect will occur before 2014, at the earliest, will depend heavily on our obtaining marketing approval for and commercializing, dalbavancin.

Research and Development Expenses

Research and development expenses consist of costs associated with our research activities, and the development and clinical testing of dalbavancin. Our research and development expenses consist of:

•

employee-related expenses, including salaries, benefits, travel and share-based compensation expense;

•

external research and development expenses incurred under arrangements with third parties, such as contract research organizations, or CROs, manufacturing organizations and consultants, including our scientific advisory board; and

•

facilities and laboratory and other supplies.

We expense research and development costs to operations as incurred. We account for non-refundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received, rather than when the payment is made.

We intend in the future to use our employee and infrastructure resources across multiple research and development projects. We do not allocate employee-related expenses or depreciation to any particular project. To date, the large majority of our research and development work has related to dalbavancin and completing clinical testing to support approval to market dalbavancin.

We anticipate that our research and development expenses will increase substantially in connection with completing our ongoing Phase 3 clinical trials of dalbavancin and seeking marketing approval for dalbavancin. In addition, if we obtain marketing approval of dalbavancin, we expect to incur significant research and development expenses, including expenses for clinical trials for additional product candidates in the future.

We expect that the total costs of our clinical trials of dalbavancin in 2012 will be approximately $43 million. In addition, we expect that certain other costs related to these trials and anticipated regulatory filings will be approximately $4 million in 2013.

The successful development of dalbavancin and future product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

•

the scope, rate of progress and expense of our research and development activities;

•

our ability to market, commercialize and achieve market acceptance for dalbavancin or any other product candidate that we may develop in the future;

•

clinical trial results;

•

the terms and timing of regulatory approvals; and

•

the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights.

A change in the outcome of any of these variables with respect to the development of dalbavancin or any other product candidate that we may develop could mean a significant change in the costs and timing associated with the development of dalbavancin or such product candidate. For example, if the FDA or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of dalbavancin or if we experience significant delays in enrollment in any clinical trials of dalbavancin, we could be required to expend significant additional financial resources and time on the completion of the clinical development of dalbavancin.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs for personnel, including share-based compensation expense, in our executive, finance and business development functions. Other general and administrative expenses include facility costs and professional fees for legal, patent, consulting and accounting services.

We anticipate that our general and administrative expenses will increase in future periods to support increases in our research and development and commercialization activities and as a result of increased headcount, expanded infrastructure, increased legal, compliance, accounting and investor and public relations expenses associated with being a public company and increased insurance premiums, among other factors.

Acquisition Related Charges, Net

In connection with our acquisition of Vicuron in December 2009, we were required to fair value two contingent payment streams on the closing date of the acquisition. The first related to the $25 million milestone payment that we will owe to Pfizer upon the first commercial sale of dalbavancin and the other related to the potential refund of $6 million of the initial purchase price. We completed an assessment of the probability of the successful clinical development, regulatory approval and commercial sale of dalbavancin in future periods and determined that a liability of $5.8 million should be recorded at December 11, 2009 to reflect the best estimate of additional cash consideration likely to be paid related to the potential $25 million milestone payment. We have classified this liability as noncurrent in our consolidated balance sheets, as payment is not expected to occur until at least 2014. We also recorded the fair value of a contingent asset of $0.6 million at December 11, 2009 based on the probability of receiving the potential refund from Pfizer of $6 million of the initial purchase price.

Subsequent to the closing date of the acquisition, we measure the contingent consideration arrangements at fair value for each period with changes in fair value recognized in our statements of operations under acquisition related charges, net. Changes in fair value reflect new information about the acquired in process research and development asset and its progress toward approval, and the passage of time, and therefore ultimately the probability of achieving regulatory approval for dalbavancin. Separately, the possibility of receiving the $6 million contingent asset was also reassessed as development efforts continued. In the absence of new information, changes in fair value reflect only the passage of time as development work towards the achievement of the milestones progresses, and will be accrued based on an accretion schedule. The balance of the contingent liability consideration, which reflects the fair value of the contingent milestone payment, was $18.7 million as of December 31, 2011 and $14.6 million as of December 31, 2010. We received the $6 million contingent receivable in March 2011. As of December 31, 2010, we determined the fair value of the contingent receivable to be $3 million.

Interest Income

Our cash and cash equivalents are invested primarily in money market accounts, which generate a small amount of interest income. We expect to continue that investment philosophy as we obtain more financing proceeds.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and share-based compensation described in greater detail below. We base our estimates on our limited historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in more detail in the notes to our financial statements appearing at the end of this prospectus. However, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our financial condition and results of operations:

•

accrual of research and development expenses;

•

share-based compensation; and

•

valuation of long-lived and intangible assets and goodwill.

Accrued Research and Development Expenses

As part of the process of preparing our financial statements, we are required to estimate our accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses are related to fees paid to CROs in connection with research and development activities for which we have not yet been invoiced.

We base our expenses related to CROs on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs that conduct research and development on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepayment expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. There have been no material changes in estimates for the periods presented.

Share-Based Compensation

As we continue to expand our headcount, we expect to make additional stock option grants, which will result in additional share-based compensation expense. Accordingly, we describe below the methodology we have employed to date in measuring such expenses. Following the consummation of this offering, stock option values will be determined based on the market price of our common stock.

We apply the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation, which we refer to as ASC 718. Determining the amount of share-based compensation to be recorded requires us to develop estimates of the fair value of stock options as of their grant date. Share-based compensation expense is recognized ratably over the requisite service period, which in most cases is the vesting period of the award. Calculating the fair value of share-based awards requires that we make highly subjective assumptions. We use the Black-Scholes option pricing model to value our stock option awards. Use of this valuation methodology requires that we make assumptions as to the volatility of our common stock, the expected term of our stock options, the risk free interest rate for a period that approximates the expected term of our stock options and our expected dividend yield. Because we are a privately-held company with a limited operating history, we utilize data from a representative group of companies to estimate expected stock price volatility. We selected companies from the biopharmaceutical industry with similar characteristics to us, including those in the early stage of product development and with a therapeutic focus. We use the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term of stock option grants to employees as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention to pay cash dividends. The risk-free interest rate used for each grant is based on the U.S. Treasury yield curve in effect at the time of grant for instruments with a similar expected life. We estimated the fair value of options granted using a Black-Scholes option pricing model with the following assumptions:


	2009	2010	2011
Risk-free interest rate	3%	2.25% – 3%	2.25%
Expected volatility	85%	80 – 85%	80%
Expected term (years)	7	7	7
Expected dividend yield	0%	0%	0%

Share-based compensation expense associated with stock options granted to employees was insignificant for the period from November 4, 2009 (inception) to December 31, 2009, and totaled $0.3 million for the year ended December 31, 2010 and $0.8 million for the year ended December 31, 2011. As of December 31, 2011, we had $2.0 million of total unrecognized share-based compensation expense, which we expect to recognize over a weighted-average remaining vesting period of approximately 1.6 years. While our share-based compensation for stock options granted to employees to date has not been material to our financial results, we expect the impact to grow in future periods due to the potential increases in the value of our common stock and headcount.

Under ASC 718, we are required to estimate the level of forfeitures expected to occur and record share-based compensation expense only for those awards that we ultimately expect will vest. Due to the lack of historical forfeiture activity of our plan, we estimated our forfeiture rate based on data from a representative group of companies with similar characteristics to us. Through December 31, 2011, actual forfeitures have not been material.

The following table sets forth information with respect to stock options granted to employees from November 4, 2009 (inception) through December 31, 2011:


	Number of Shares Underlying Options Granted		Exercise Price Per Share		Estimated Fair Value Per Common Share at Grant Date		Reassessed Weighted Average Fair Value per Common Share at Grant Date
November 4, 2009 – June 30, 2010		3,250,000	$	0.12	$	0.05	$	0.05
July 1, 2010 – December 31, 2010		7,200,000		0.12		0.12		0.41	(1)
January 1, 2011 – April 30, 2011		1,425,000		0.21		0.21		0.41	(1)
May 1, 2011 – June 30, 2011		30,000		0.21		0.21		0.41	(1)
July 1, 2011 – December 31, 2011		20,000		0.21		0.21		0.36	(1)
February 28, 2012		1,050,000		0.26		0.26		N.A.
April 9, 2012		767,451		1.25		1.25		N.A.
April 24, 2012		950,000		1.25		1.25		N.A.

(1)

The fair value of common stock at the grant date was adjusted in connection with our reassessment of fair value for financial reporting purposes described below, representing a change in the discount for lack of marketability applied to our common stock from approximately 50% for the January 1, 2011 valuation and 35% for the December 31, 2011 valuation to 10% for both periods, which we believed to be more appropriate given the facts present.

As there was no public market for our common stock, our board of directors determined the estimated fair value of our common stock for purposes of determining the exercise price for option grants, taking into consideration various objective and subjective factors, including:

•

external market conditions affecting the biopharmaceutical industry;

•

prices at which we sold shares of preferred stock to third-party investors;

•

the superior rights and preferences of securities senior to our common stock, such as our series A preferred stock, at the time of each grant;

•

our historical operating and financial performance;

•

the status of our research and development efforts;

•

the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale of our company; and

•

estimates and analysis provided by management and contemporaneous valuations.

Because of the minimal value of non-cash assets owned during the period from inception to December 31, 2011, including the stage and related uncertainty of our research and development efforts under our product rights, the superior preferences associated with our series A preferred stock, the most significant of which are the liquidation rights held by the preferred stockholders, in relation to our common stock and our focus on start-up activities and developing a plan to obtain regulatory approval for our main product candidate, we attributed a nominal fair value to our common stock during this time.

We performed a contemporaneous valuation of our common stock as of December 31, 2009 in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid. Based on the valuation methodology selection criteria set forth in the Practice Aid, with a focus on the early stage of our development as a company, including the status of our development efforts, very limited operations and the fact that we had an incomplete management team, as of December 31, 2009, we determined that an asset-based approach was the most appropriate method to use to determine the enterprise value of our company. We then allocated the enterprise value using the current value method. The asset-based approach provides an indication of a company’s value by developing a valuation based balance sheet. This approach required adjusting the historical asset costs to fair values. Similarly, liabilities were adjusted to their fair value at the valuation date. The excess of assets over liabilities represents the tangible value of a business enterprise. The liquidation preference of our series A preferred stock was then deducted from this amount, and the remaining value was allocated to our common stock. We concluded that this was the most appropriate method since we did not have any projections as of the valuation date due to the early stage of our research and development. As such, an income approach would not have provided a reliable fair value determination. In addition, as a result of the lack of comparative information available for publicly-traded or privately-held start-up enterprises, and because any investments in shares of stock are unlikely to be a reliable indicator of fair value at such an early stage, we concluded that the market approach would also not provide a reliable fair value determination as of this date. The results of this valuation methodology were consistent with our expectations, as we would not have expected any significant value to have been created for the common stockholders. The board of directors did, at its discretion, choose to issue, at this early stage of our development, options with an exercise price of $0.12 per common share, slightly above the $0.05 estimated fair value per share which was calculated in this valuation. We concluded that there were no significant transactions affecting our capital structure or significant developments in our research and development which would have indicated that an update to our valuation was required through June 30, 2010.

Between July 1, 2010 and December 31, 2010, we hired our chief executive officer and chief operating officer, completed an end of Phase 2 meeting with the FDA and negotiated an SPA with the FDA for one of our Phase 3 clinical trials of dalbavancin. The board of directors, at the time, used the same exercise price per share

of $0.12 for all awards granted throughout 2010. However, based on the significance of events after July 1, 2010, we deemed it appropriate to update the valuation of our common stock as of January 1, 2011. This valuation estimated the fair value of a share of our common stock to be $0.21. In addition, in connection with the preparation of our December 31, 2011 financial statements, and in order to determine appropriate 2010 share-based compensation expense, we determined that the fair value per share of our common stock was $0.41 due to the change in the discount for lack of marketability as noted in the footnote to the table above. The results of the January 1, 2011 valuation, as adjusted for this change in the discount for lack of marketability, were used for purposes of determining our share-based compensation for all awards granted from July 1, 2010 to December 31, 2010. Further, we concluded the fair value of our common stock per share had not changed through April 2011 after an assessment of the developments in our business activities combined with the impact on our common stockholders from additional sales of our series A preferred stock. The same fair value per share of $0.41 was then used through April 2011 for financial reporting purposes in that period. The board of directors used the estimated fair value of $0.21 per share determined pursuant to the January 1, 2011 valuation, without the adjustment to the assumption for the discount for the lack of marketability as noted in the footnote to the table above, to determine the exercise price per share for all 2011 awards.

During the period from May 1, 2011 to December 31, 2011, we negotiated an SPA with the FDA for our second Phase 3 clinical trial of dalbavancin, successfully manufactured new clinical supplies using an additional manufacturer, instituted our clinical and microbiology development plans and initiated our second phase 3 clinical trial of dalbavancin. The board of directors continued to grant awards during this time period using the unadjusted January 1, 2011 estimated fair value per common share of $0.21 as the exercise price per share, without the adjustment to the assumption for the discount for the lack of marketability as noted in the footnote to the table above. We performed another valuation of our common stock as of December 31, 2011 based on these developments in accordance with the Practice Aid. This valuation estimated the fair value per share of our common stock to be $0.26. In connection with the preparation of our December 31, 2011 financial statements, and in order to determine appropriate share-based compensation expense for awards granted from May 1, 2011 to June 30, 2011, we determined that the fair value per share of our common stock was $0.41 due to the change in the discount for lack of marketability as noted in the footnote to the table above. Although the events that occurred from May 2011 through December 2011 increased the value of our company as a whole, the estimated value per share of our common stock for financial reporting purposes decreased primarily as a result of additional issuances of our series A preferred stock during 2011, which gave a greater liquidation preference to holders of series A preferred stock in the aggregate. In addition, changes in certain other assumptions in our valuation under the option pricing method, such as term and volatility, also contributed to the decrease in the fair value per share of the common stock underlying the options we granted between July 1, 2011 and December 31, 2011 for the purpose of determining the appropriate share-based compensation expense during such period.

We determined that the option pricing method was the most appropriate enterprise value allocation methodology to estimate the fair value of our common stock given the stage of our development for the purposes of the January 1, 2011 valuation and the December 31, 2011 valuation described above. The option pricing method treats common stock and preferred stock as call options on the enterprise’s value, with exercise prices based on the liquidation preference of the preferred stock. Under this method, the common stock has value only if the funds available for distribution to stockholders exceed the value of the liquidation preference at the time of a liquidity event, such as a merger or sale, assuming the enterprise has funds available to make a liquidation preference meaningful to, and collectible by, the stockholders. The common stock is modeled as a call option that gives its owner the right but not the obligation to buy the underlying enterprise value at a pre-determined or exercise price. In the option pricing method, the exercise price is based on a comparison with the enterprise value rather than, as in the case of a regular call option, a comparison with a per share stock price. Thus, common stock is considered to be a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred stock is liquidated. Key variables in the option pricing method were as follows:

•

Underlying equity value—To estimate the value of our total equity, including both common and preferred equity, we utilized the marketable equity value based on the most recent round of preferred stock financing, our series A preferred stock financing, with a price of $1.00 per share, which we

believed to be the most indicative of our value. This valuation technique used to estimate the enterprise value of our company is referred to as the reverse backsolve method. By incorporating a series of incremental call options, based on the specific rights and values attributable to each equity class, the reverse backsolve method estimates the value of the company by iterating through different enterprise values that result in the most recent per share investment price. The use of the reverse backsolve method was deemed to be appropriate given that the most recent investment round consisted of sophisticated investors and, as a result, would be considered to be an “arms-length,” fair-value transaction in the equity stock of our company. In addition, this method was deemed to be the best indicator of the value of our company because it reflected the price, and total value, at which two willing parties, our company and our investors, exchanged shares in the company. As a result, this transaction, and the resulting reverse backsolve method developed from it, was deemed to be the best indicator of the fair value of our company and our capital stock at that time.

•

Volatility—We estimated volatility based on comparable publicly-traded companies over a three-year period for the January 1, 2011 valuation and a two-year period for the December 31, 2011 valuation. We estimated volatility to be 84% for the January 1, 2011 valuation and 78% for the December 31, 2011 valuation.

•

Time to liquidity—We estimated time to a liquidity event based on the projected time to significant clinical development events for dalbavancin that we believed could lead to an IPO or a company sale. The estimated time to a liquidity event assumed a weighted average timeline of either an IPO or sale as of January 1, 2014 and January 1, 2015. Our estimates were supported by our belief that we would have completed our Phase 3 clinical trials of dalbavancin and filed an NDA with the FDA to obtain regulatory approval in early 2014. At that time, we believed that an IPO or other liquidity event could occur in anticipation of FDA approval of dalbavancin.

•

Risk-free interest rate—We determined the risk-free interest rate based on the yield of a U.S. Treasury bill with a maturity date closest to the estimated time to a liquidity event for our stockholders. We estimated the risk-free rate to be 1.05% for the January 1, 2011 valuation and 0.20% for the December 31, 2011 valuation.

•

Discounts for lack of marketability—Because we are a privately-held company, shares of our common stock are highly illiquid and, as such, warrant a discount in value from their estimated “marketable” price. We estimated the discount factor to be 10% in connection with the preparation of the consolidated financial statements included in this prospectus for illiquidity using legal guidelines from U.S. Tax Court cases regarding privately-held business valuations, fundamental business factors and empirical studies on the discount for lack of marketability. We corroborated the discount factor based on the value of a put option compared to the value of common stock using a Black-Scholes option pricing model. We also considered that our preferred stock has rights that our common stock does not have, including anti-dilution protection, redemption rights and protective provisions in our certificate of incorporation. Our preferred stockholders have control and influence over the enterprise, which provides them with the optionality over future liquidity, financing and other decisions that the common stock option holders do not control.

On February 28, 2012, we awarded options to purchase 1,150,000 shares of our common stock to our employees and directors under our existing stock incentive plan. The options were granted at an exercise price of $0.26 per share, which was the value determined in the December 31, 2011 valuation before adjustment for the discount for lack of marketability described above. In connection with the preparation of our March 31, 2012 interim consolidated financial statements, we intend to evaluate what the appropriate fair value of the common shares was believed to be on such date to determine the appropriate share-based compensation expense to be reflected therein.

On April 9, 2012, we awarded options to purchase 767,451 shares of our common stock to our employees under our existing stock incentive plan. On April 24, 2012, we awarded options to purchase 1,110,000 shares of our common stock to our employees and directors under our existing stock incentive plan. The options were granted with an exercise price of $1.25 per share, which was the fair value as of the date of grant as determined by our board of directors.

There are significant judgments and estimates inherent in the determination of these valuations. These judgments and estimates include assumptions regarding our future performance, including the successful completion of our clinical trials and the time to completing an IPO or sale, as well as the determination of the appropriate valuation methods at each valuation date. If we had made different assumptions, our share-based compensation expense could have been different. The foregoing valuation methodologies are not the only methodologies available and they will not be used to value our common stock once this offering is complete. Accordingly, investors are cautioned not to place undue reliance on the foregoing valuation methodologies as an indicator of our future stock price.

Valuation of Long-Lived and Intangible Assets and Goodwill

Acquired in-process research and development intangible assets represent the right to develop, use, sell or offer for sale intellectual property that we have acquired with respect to processes that have not been completed. These assets are required to be classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. At that time, we will determine the useful life of the asset, reclassify the asset out of in-process research and development and begin amortization. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated. Acquired in-process research and development assets which are determined to have had a decrease in their fair value are adjusted to fair value with an impairment charge. Such assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment.

If the associated research and development effort is abandoned, the related assets likely will be written-off and we will record a non-cash impairment loss on our consolidated statement of operations.

Intangible assets with definite useful lives will be amortized over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of intangible assets is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the assets exceed their estimated future undiscounted net cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceed the fair value of the assets.

Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination accounted for by the acquisition method of accounting and is not amortized, but subject to impairment testing at least annually or when a triggering event occurs that could indicated a potential impairment. We test our goodwill annually for impairment each December 31 using Accounting Standards Update, or ASU, 2011-08, which allows a company the option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under that option, an entity is no longer required to calculate the fair value of its reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount.

Results of Operations

We were incorporated on November 4, 2009. As a result, our results of operations reflect the period from November 4, 2009 (inception) to December 31, 2009 and the years ended December 31, 2010 and 2011. There is no comparable period for 2009.

The following table summarizes selected operating expense data for the period from inception (November 4, 2009) through December 31, 2009, the years ended December 31, 2010 and 2011 and the period from inception (November 4, 2009) to December 31, 2011 (as we are a development stage entity):


	Period from Inception (November 4, 2009) to December 31, 2009		Year Ended December 31, 2010		Year Ended December 31, 2011		Period from Inception (November 4, 2009) to December 31, 2011
			Year Ended December 31, 2010		Year Ended December 31, 2011
	(In Thousands)
Operating expenses:
Research and development expenses	$	198	$	4,818	$	30,133	$	35,149
General and administrative expenses		912		2,777		4,305		7,994
Acquisition related charges, net		26		6,300		1,121		7,447

Research and Development Expenses

Our research and development work since our inception is principally related to the activities associated with seeking approval to market dalbavancin in the United States and to a lesser extent in certain international markets. Such activities include clinical trial costs, trial product manufacturing and sourcing, and regulatory activities related to a potential NDA submission. Our research and development expenses in the year ended December 31, 2011 increased $25.3 million to $30.1 million from $4.8 million in the year ended December 31, 2010. The increase is due to the full scale clinical trial activities in 2011 and production of drug product for our clinical trials and acquisition of comparator products used in the clinical trials. Research and development expenses during the years ended December 31, 2011 and 2010 included the following:

•

CRO and other clinical trial related expenses were $18.3 million for the year ended December 31, 2011, representing 61% of total research and development expenses during the period, and were principally comprised of expenses for clinical trial activities. CRO and other clinical trial expenses were $0.9 million for the year ended December 31, 2010.

•

Chemistry, manufacturing and control, or CMC, related expenses were $7.0 million for the year ended December 31, 2011, representing 25% of total research and development expenses during the period, and were principally comprised of $2.1 million for production of active pharmaceutical ingredient, or API, $0.9 million for production of clinical trial drug product, and $3.7 million for acquisition of comparator products used in the clinical trials. CMC related expenses were $1.8 million for the year ended December 31, 2010, and were principally comprised of $0.4 million for production of clinical trial drug product and $1.0 million for acquisition of comparator products used in the clinical trials.

•

Consulting fees were $2.7 million for the year ended December 31, 2011, representing 9% of total research and development expenses during the period, and were principally comprised of $1.0 million for regulatory consultants, $0.7 million for CMC consultants and $0.9 million for clinical activity consultants, including database, microbiology, toxicology and pharmacology consultants. Consulting fees were $1.6 million for the year ended December 31, 2010, and were principally comprised of $0.4 million for regulatory consultants, $0.4 million for CMC consultants and $0.7 million for clinical activity consultants, including database, microbiology, toxicology and pharmacology consultants.

•

Payroll expenses were $2.2 million for the year ended December 31, 2011, representing 7% of total research and development expenses during the period, and were principally comprised of salaries, payroll taxes and benefits for our employees in research and development. We had eight employees in research and development at December 31, 2011. Payroll expenses for 2011 also included share-based compensation expense for employees of $0.1 million. Payroll expenses for the year ended December 31, 2010 were $0.5 million, which included $19,000 of share-based compensation expense.

Research and development expenses in the period from inception (November 4, 2009) to December 31, 2009 were limited due to the acquisition of dalbavancin in December 2009.

General and Administrative Expenses

Our general and administrative expenses in the year ended December 31, 2011 increased $1.5 million to $4.3 million from $2.8 million in the year ended December 31, 2010. The increase related to our continued expansion efforts in preparation for the anticipated commercial launch of dalbavancin. This includes the hiring of our executive management team in mid-2010. Therefore, 2011 has a full year of expense for those individuals. We also incurred certain expenses related to our contemplated IPO. General and administrative expenses during the years ended December 31, 2011 and 2010 included the following:

•

Payroll expense for the year ended December 31, 2011 was $2.1 million, representing 55% of total general and administrative expenses during the period, and was principally comprised of salaries, payroll taxes and benefits for our general and administrative employees. Payroll expense in 2011 included share-based compensation expense for employees of $0.6 million. Payroll expenses of a similar nature were $1.2 million in 2010, which included $0.3 million of share-based compensation.

•

Professional fee expense for the year ended December 31, 2011 was $0.7 million, representing 15% of total general and administrative expenses during the period, and was principally comprised of fees for audit, tax and legal services. Professional fee expense was $0.7 million in 2010 and was principally comprised of legal fees.

•

Consulting fees for the year ended December 31, 2011 were $0.2 million, representing 4% of total general and administrative expenses during the period, and were principally comprised of business development, public relations and finance consultants. Consulting fees were $0.2 million in 2010.

•

Occupancy and other operating expense for the year ended December 31, 2011 was $0.6 million, representing 14% of total general and administrative expenses during the period, and was principally comprised of rent, utilities, office and other expenses. Occupancy and other operating expense of a similar nature were $0.3 million in 2010.

•

Market research expense for the year ended December 31, 2011 was $0.5 million, representing 13% of total general and administrative expenses during the period. Market research expense was $0.1 million in 2010.

•

Non-employee share-based compensation expense for the year ended December 31, 2011 was $0.3 million representing 6% of total general and administrative expenses during the period, and was principally comprised of expense related to restricted stock awarded to a non-employee. Share-based compensation expense related to the same restricted stock award was $0.1 million in 2010.

General and administrative expenses in the period from inception (November 4, 2009) to December 31, 2009 were $0.9 million and were principally comprised of legal fees related to the acquisition of dalbavancin and our formation. No other material operations were being conducted at that time.

Acquisition Related Charges, Net

Acquisition related charges, net principally consists of two items. First, the increase in the charge is due to the accretion of the contingent liability related to the $25.0 million milestone payment that will be due upon the successful clinical development, regulatory approval and first commercial sale of dalbavancin. The offset to this charge is due to the accretion of the contingent asset due if we provided documentation that supported the position that a marketing approval for dalbavancin required more than one new Phase 3 clinical trial related to a partial refund of $6.0 million of the $10.0 million initial purchase price for dalbavancin. For the period from inception (November 4, 2009) to December 31, 2009, acquisition related charges, net were $26,000 as there was no change in the probability for either contingency being achieved and the change was only due to accretion based on one month of time. For the year ended December 31, 2010, the contingent liability increased by $8.7 million, which is a charge to acquisition related charges, net. Such increase was due to accretion over the year combined with an increase in our estimate of the probability of success of obtaining regulatory approval of dalbavancin. Partially offsetting this amount in 2010 was an increase in the contingent

asset, a credit to this account, of $2.4 million as we also increased our probability assumption for receiving the refund of $6.0 million at December 31, 2010. For the year ended December 31, 2011, the contingent liability continued to increase due to accretion and the increase in our estimate of the probability of success of obtaining regulatory approval of dalbavancin, which totaled $4.1 million. Again, partially offsetting this expense was a credit from the contingent asset which totaled $3.0 million as the $6.0 million refund was actually received in March 2011.

Income Taxes

We recorded an income tax benefit of $2.5 million for the year ended December 31, 2011, $2.9 million for the year ended December 31, 2010 and $0.4 million for the period from inception (November 4, 2009) to December 31, 2009. Such benefits are based on a 38% effective tax rate on pre-tax losses, adjusted for permanent expense items, and were recorded as an offset to certain deferred tax liabilities recorded in connection with the initial acquisition accounting recorded in December 2009. Once such deferred tax liabilities were fully offset, which occurred in early 2011, the additional losses generate net operating losses. Because these net operating losses are not more likely than not to be realized, there is a full valuation allowance recorded and no financial statement tax benefit recorded.

As of December 31, 2011, we had United States federal and New Jersey state income tax net operating loss carryforwards of approximately $42 million. Our ability to utilize the United States net operating losses against future taxable income may be subject to annual limitations in future periods including from any common stock offering, including this offering, pursuant to the “change in ownership rules” under Section 382 of the Internal Revenue Code of 1986.

Liquidity and Capital Resources

Sources of Liquidity

To date, we have not generated any revenues. We have financed our operations to date primarily through private placements of our preferred stock. As of December 31, 2011, we had received $55 million in net proceeds from the issuance of our series A preferred stock. As of December 31, 2011, we had cash and cash equivalents totaling $11.5 million. In March 2012, we received additional proceeds of $22 million from the sale of additional shares of series A preferred stock. Prior to the completion of this offering, our preferred stock purchase agreement with our existing investors provides for the funding of up to an additional $22 million from the sale of preferred stock under such agreements. We do not expect to draw this additional amount. We primarily invest our cash and cash equivalents in U.S. Treasury money market funds. The following table summarizes our cash flow activity for the period from inception (November 4, 2009) to December 31, 2009 and the years ended December 31, 2010 and 2011:


	Period From Inception (November 4, 2009) to December 31, 2009			Year Ended December 31, 2010			Year Ended December 31, 2011
				Year Ended December 31, 2010			Year Ended December 31, 2011
	(In Thousands)
Net cash used in operating activities	$	(374	)	$	(6,519	)	$	(27,358	)
Net cash used in investing activities		(10,000	)		(40	)		—
Net cash provided by financing activities		14,000			5,198			36,579

Operating Activities

The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in the components of working capital. The increase in net cash used in 2011 was primarily related to the increased spending in research and development due to the advancement of our development program for dalbavancin. This was partially offset by the receipt of $6.0 million as a partial refund of our original purchase

price from the acquisition. We expect cash used in operating activities to continue to increase for the foreseeable future as we continue the development of and seek marketing approval for dalbavancin and, possibly, other product candidates. We are currently enrolling and dosing patients in two global Phase 3 clinical trials of dalbavancin. We expect to complete these Phase 3 clinical trials and have initial, top-line data available in the beginning of 2013. We expect that the total costs of such trials in 2012 will be approximately $42.7 million. In addition, we expect that certain other costs related to these trials and anticipated regulatory filings will be approximately $4.2 million in 2013.

Investing Activities

In the period from inception (November 4, 2009) to December 31, 2009, the cash used in investing activities related to the upfront $10.0 million purchase price paid for the acquisition of dalbavancin in December 2009.

Financing Activities

Net cash provided by financing activities is principally the result of the sale and issuance of an aggregate of 55 million shares of series A preferred stock from inception through December 31, 2011.

Funding Requirements

Dalbavancin is still in clinical development. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the development of and seek marketing approval for dalbavancin and, possibly, other product candidates. We anticipate that our expenses will increase substantially in connection with completing our ongoing Phase 3 clinical trials of our lead product candidate, dalbavancin, and seeking marketing approval for dalbavancin. In addition, if we obtain marketing approval of dalbavancin, we expect to incur significant sales, marketing, distribution and outsourced manufacturing expenses, as well as ongoing research and development expenses. Our expenses also will increase if and as we:

•

maintain, expand and protect our intellectual property portfolio;

•

in-license or acquire other products and technologies;

•

hire additional clinical, quality control and scientific personnel; and

•

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts.

We expect that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 24 months. Based on our planned use of the net proceeds from this offering and our existing cash and cash equivalents, we estimate that such funds will be sufficient to enable us to complete the clinical development of, to seek marketing approval in the United States and the European Union for, and, if approved for the treatment of patients with abSSSI, to commercially launch dalbavancin in the United States and Western Europe. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. This estimate assumes, among other things, that, at our sole discretion pursuant to the terms of our agreement with Pfizer, we elect to defer for a period of up to five years payment of the $25 million milestone that we will become obligated to pay upon the first commercial sale of dalbavancin by delivering to Pfizer a promissory note for such amount. Interest on the outstanding principal amount of the promissory note will accrue at a rate of 10% per annum, compounded annually. Our future capital requirements will depend on many factors, including:

•

the results of our ongoing Phase 3 clinical trials of dalbavancin;

•

the costs, timing and outcome of regulatory review of dalbavancin;

•

subject to receipt of marketing approval, revenue received from commercial sales of dalbavancin;

•

the costs of developing dalbavancin for additional indications;

•

our ability to establish collaborations on favorable terms, if at all;

•

the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

•

the extent to which we in-license or acquire other products and technologies; and

•

the scope, progress, results and costs of product development for our product candidates.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. Upon completion of this offering, we will not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Commitments

We lease office space under a non-cancelable operating lease agreement expiring on December 31, 2012. As of December 31, 2011, the future minimum payments for the year ending December 31, 2012 amount to $241,680. We have no other fixed contractual obligations as of December 31, 2011.

Following the first commercial sale of dalbavancin for the treatment of abSSSI in the United States, the United Kingdom, Germany, Italy, Spain or France, we are obligated to pay Pfizer a milestone payment of $25 million. However, at our sole discretion, we may elect to defer the milestone payment for a period of up to five years if we deliver to Pfizer a promissory note for the full amount of such milestone payment. Interest on the outstanding principal amount of the promissory note will accrue at a rate of 10% per annum, compounded annually. We also have the option, in our sole discretion, exercisable at any time before a specified date following the FDA’s acceptance of our NDA for dalbavancin to make a one-time payment to Pfizer of $20 million in lieu of, and in full satisfaction of, our obligation to pay the $25 million milestone payment.

Following the first receipt of the first regulatory approval for dalbavancin in Japan, we are obligated to pay RaQualia Pharma, Inc., or RaQualia, a milestone payment of $2 million. We also agreed to pay RaQualia high single digit royalties of net sales of dalbavancin in Japan until the later of the tenth anniversary of the first commercial sale of dalbavancin in Japan and the last expiration of all patents owned by Durata or Vicuron as of December 2010 that cover the sale of dalbavancin in Japan.

We have employment agreements with certain employees which require the funding of a specific level of payments, if certain events, such as a change in control or termination without cause, occur.

In the course of normal business operations, we also have agreements with contract service providers to assist in the performance of our research and development and manufacturing activities. We can elect to discontinue the work under these agreements at any time. We could also enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require up front payments and even long-term commitments of cash.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under Securities and Exchange Commission rules.

Quantitative and Qualitative Disclosures About Market Risks

We are exposed to market risk related to changes in interest rates. We had cash and cash equivalents of $11.5 million as of December 31, 2011, consisting of cash and money market funds. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term securities. Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio.

We contract with CROs and contract manufacturers globally. We may be subject to fluctuations in foreign currency rates in connection with certain of these agreements. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. As of December 31, 2011 and 2010, substantially all of our total liabilities were denominated in the functional currency.

Recently Issued Accounting Standards

In May 2011, the Financial Accounting Standards Board, or FASB, issued ASU No. 2011-04, Fair Value Measurement (Topic 820), or ASU 2011-04. ASU 2011-04 was issued to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. generally accepted accounting principles and International Financial Reporting Standards. The guidance in ASU 2011-04 explains how to measure fair value, but does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. ASU 2011-04 will be effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2011. The adoption of ASU 2011-04 will not have a material impact on our consolidated financial statements.

BUSINESS

Overview

We are a pharmaceutical company focused on the development and commercialization of novel therapeutics for patients with infectious diseases and acute illnesses. We are currently enrolling and dosing patients in two global Phase 3 clinical trials with our lead product candidate, dalbavancin, for the treatment of patients with acute bacterial skin and skin structure infections, or abSSSI. We are conducting each of these Phase 3 clinical trials pursuant to special protocol agreements, or SPAs, with the U.S. Food and Drug Administration, or FDA, based on draft guidance issued by the FDA in 2010 for the development of drugs to treat abSSSI. We also designed these trials based on scientific advice that we received from the European Medicines Agency, or EMA, in December 2010 to meet the regulatory filing requirements in the European Union. We expect to complete these Phase 3 clinical trials and have initial, top-line data available in the beginning of 2013. If our ongoing Phase 3 clinical trials are successful, we plan to submit a new drug application, or NDA, to the FDA in the first half of 2013 and a marketing authorization application, or MAA, to the EMA in the second half of 2013. If approved, we intend to directly commercialize dalbavancin in the United States and Western Europe with a targeted hospital sales force and to utilize a variety of types of collaboration arrangements for commercialization in other markets.

Dalbavancin is an intravenous antibiotic product candidate designed for once-weekly dosing. We believe that dalbavancin’s once-weekly dosing will facilitate the treatment of patients with abSSSI in both the in-patient and out-patient settings by reducing the length of a patient’s hospital stay or avoiding hospital admission altogether and, ultimately, lowering the overall cost of care for these patients. Dalbavancin’s pharmacokinetic profile, which reflects the absorption, distribution and metabolism of a drug in the body, and its relatively long half-life compared to many currently available treatments result in continuous bactericidal, or bacteria killing, activity over a prolonged period of time following treatment. We believe that dalbavancin offers a number of other important potential advantages compared to currently available treatments for abSSSI, including a strong safety and tolerability profile, broad coverage and activity against Gram-positive bacteria, including resistant bacterial strains, suitability in a wide range of patients due to limited drug-drug interaction or need for therapeutic drug monitoring, and simpler administration that facilitates use in multiple settings. We believe that these potential advantages may provide a more rapid and effective cure for patients with abSSSI, greater patient compliance, improved safety outcomes, even with branded pricing at a premium to generic products, and lower overall cost of care.

Dalbavancin has already completed three Phase 3 clinical trials, in which more than 1,000 patients in total received dalbavancin. Dalbavancin achieved its primary efficacy endpoint in each of these three completed Phase 3 clinical trials when compared to linezolid, cefazolin or vancomycin, three of the standard-of-care agents for uncomplicated skin and skin structure infections, or uSSSI, and complicated skin and skin structure infections, or cSSSI. The primary efficacy endpoint in each of these completed clinical trials was non-inferiority of dalbavancin compared to the other drug being evaluated based on a pre-determined non-inferiority margin. Non-inferiority comparisons of drugs are the standards for antibiotic drug development, and non-inferiority margins are used in the statistical analysis comparing two treatment arms in a study to distinguish the degree of potential difference between the antibiotics being evaluated. These Phase 3 clinical trials were completed in May and June 2004 and were designed and conducted pursuant to prior FDA guidelines, which the FDA revised in 2010 and are no longer in effect. Our two ongoing Phase 3 clinical trials are designed to compare dalbavancin to vancomycin, with an option to switch to oral linezolid, under the new FDA draft guidance. We recently conducted a retrospective analysis of the completed Phase 3 clinical trial comparing dalbavancin and linezolid and determined that dalbavancin could have achieved its primary endpoint if the trial had been designed and conducted under the new FDA draft guidance. In each of the previously completed clinical trials, dalbavancin was well tolerated and generated a large database of safety information. The rate and duration of adverse events in clinical trials to date for dalbavancin are similar to that of the comparator drugs used in the trials, and we have not observed any negative drug-drug interactions with dalbavancin in clinical development to date. Although we expect that, if successful, the results from our two ongoing Phase 3 clinical trials will form the primary basis for the FDA’s

review of our planned NDA submission and for the evaluation of the efficacy, safety and overall benefit-risk relationship of dalbavancin for marketing approval, we also expect that the FDA will consider as part of its review the results of all submitted preclinical studies and clinical trials of dalbavancin, including the three previously completed Phase 3 clinical trials, as well as chemistry, manufacturing and control information in the NDA.

We own worldwide commercial rights to dalbavancin. Our worldwide rights are royalty free, other than in Japan, where we are obligated to pay royalties on net sales of dalbavancin. We will also owe a single milestone payment following the first commercial sale of dalbavancin in the United States or one of five major European markets, which we have the right to defer for up to five years. Our dalbavancin rights include three U.S. patents covering dalbavancin’s use and formulation. Each of these patents is scheduled to expire in 2023, and any one, but not all, of these U.S. patents may be eligible for patent term extension. In addition, if dalbavancin is approved by the EMA, we expect that dalbavancin will qualify for eight years of data exclusivity and an additional two years of marketing exclusivity in the European Union.

Our Strategy

•

Complete dalbavancin clinical development in its lead indication (abSSSI). Dalbavancin previously achieved its primary efficacy endpoint in three completed Phase 3 clinical trials in patients with skin and skin structure infections, and we have two ongoing Phase 3 clinical trials with dalbavancin for abSSSI. The first ongoing clinical trial commenced enrollment in April 2011. The second ongoing clinical trial commenced enrollment in July 2011 and is being conducted in parallel with the first. We expect to complete these Phase 3 clinical trials and have initial, top-line data available at the beginning of 2013.

•

Obtain regulatory approval for dalbavancin in the United States and subsequently in the European Union. We are conducting each of our ongoing Phase 3 clinical trials pursuant to SPAs with the FDA based on new draft guidance issued by the FDA in 2010. We also designed these trials based on scientific advice that we received from the EMA in December 2010 to meet the regulatory filing requirements in the European Union. If our ongoing Phase 3 clinical trials are successful, we plan to submit an NDA to the FDA in the first half of 2013 and an MAA to the EMA in the second half of 2013.

•

Maximize the commercial potential of dalbavancin. If approved, we intend to directly commercialize dalbavancin in the United States and Western Europe with a targeted hospital sales force and to utilize a variety of types of collaboration arrangements for commercialization in other markets. We believe that dalbavancin’s pharmacokinetic profile will allow it to be used to treat patients successfully in hospital, emergency room and out-patient clinic settings, with the out-patient clinic setting increasing in importance over time due to a changing reimbursement landscape and resulting health economic advantages. We expect to establish a highly educated health resources group of regional medical directors to communicate with doctors and payors about the intended treatment and compliance benefits of dalbavancin and the potential for dalbavancin to reduce the length of a patients’ hospital stay or avoid hospital admission altogether.

•

Pursue development of dalbavancin in additional indications. If dalbavancin receives marketing approval, we expect our initial label to be limited to abSSSI caused by susceptible Gram-positive bacteria. We are pursuing development of dalbavancin in additional indications, including osteomyelitis, diabetic foot infection and pneumonia, as well as new formulations.

•

Opportunistically in-license or acquire additional clinical stage product candidates or approved products in our area of focus. We intend to enhance our product pipeline through strategically in-licensing or acquiring clinical stage product candidates or approved products for the hospital and

acute care markets. We believe that our focus on the acute care and hospital markets will make us an attractive partner for companies seeking to out-license products or product candidates in our areas of focus.

Background

Antibiotic Market Overview

Bacteria are broadly classified as Gram-positive or Gram-negative. Gram-positive bacteria possess a single membrane and a thick cell wall and turn dark-blue or violet when subjected to a laboratory staining method known as Gram’s method. According to Arlington Medical Resources, or AMR, a Decision Resources Group company and a leading provider of medical data from hospitals and other healthcare facilities, 84% of all abSSSI and 94% of cellulitis are caused by Gram-positive bacteria. Common Gram-positive bacteria that can result in abSSSI include species of Staphylococcus, such as Methicillin-Resistant Staphylococcus aureus, or MRSA, and species of Streptococcus. Gram-positive bacteria can also cause other serious illness, including osteomyelitis, community- and hospital-acquired bacterial pneumonia and diabetic foot infection.

Antibiotics that treat bacterial infections can be classified as broad spectrum, focused spectrum or narrow spectrum. Antibiotics that are active against both Gram-positive and Gram-negative bacteria are referred to as broad spectrum. Those that are active against either Gram-positive or Gram-negative bacteria, but not both, are referred to as focused spectrum. Antibiotics that are active only against a select subset of Gram-positive or Gram-negative are referred to as narrow spectrum. Because it usually takes from 24 to 48 hours from the time the specimen is received in the laboratory to definitively diagnose a particular bacterial infection, effective first-line treatment in hospital emergency departments of serious infections requires the use of broad-spectrum antibiotics or focused spectrum antibiotics with activity against Gram-positive bacteria, including coverage of MRSA, until the bacterial infection can be diagnosed.

Currently, the most widely prescribed antibiotic for treating Gram-positive infections in the United States is vancomycin, which is available in both branded and generic versions. Vancomycin and other generic antibiotics account for a substantial number of the injectable antibiotic units utilized in the United States. However, because of an increase in MRSA infections that are resistant to treatment with vancomycin and the need to dose vancomycin multiple times per day, more effective antibiotics and antibiotics with less-frequent dosing schedules are gaining a larger share of the market for the treatment of MRSA infections. According to publicly available financial information, three major branded antibiotics, daptomycin (marketed as Cubicin), tigecycline (marketed as Tygacil) and linezolid (marketed as Zyvox), recorded overall sales of approximately $1.5 billion in the United States in 2011. Based on information from AMR, we believe that approximately $510 million of these sales were solely related to the treatment of abSSSI.

The issue of antibiotic-resistant bacterial infections has been widely recognized as an increasingly urgent public health threat, including by the World Health Organization, the Centers for Disease Control and Prevention and the Infectious Disease Society of America. Antibiotic resistance has limited the effectiveness of many existing drugs, and the discovery of new antibiotics to address resistance has not kept pace with the increasing incidence of difficult-to-treat microorganisms. A particular clinical concern relates to the appearance and spread of community-acquired MRSA. According to the Infectious Diseases Society of America, the estimated cost to the U.S. healthcare system of antibiotic-resistant infections is approximately $21 billion to $34 billion annually, a substantial portion of which is due to increased length of stay. According to AMR, approximately 18.1% of all antibiotic usage in the hospital setting is for treatment of abSSSI.

therapies prescribed to patients in connection with their discharge from the hospital. We believe that dalbavancin will also be appropriate for use in both the MSSA and oral step-down segments of treatment. We expect the number of treatment days in the out-patient setting to grow at a faster rate than in the hospital in-patient setting as a result of increased use of current agents in the out-patient setting as well as the potential use, if approved, of product candidates with more convenient dosing schedules.

Limitations of Currently Available Treatment Options

Treatment for abSSSI typically begins in the out-patient or emergency room setting, where physicians often treat abSSSI patients with a first-line antibiotic, such as vancomycin. The initial infusion of antibiotics can be a time-consuming process, taking up space and resources in both settings. Because most currently available treatments require multi-day dosing, after initial treatment physicians may admit abSSSI patients to the hospital depending on the severity of the infection and out of concern about patients complying with their dosing regimen. The multi-day stays required for hospital treatment include significant overhead cost and an increased threat of the spread of MRSA, both to and from a particular patient. In addition, because hospitals can be both an expensive and unpleasant treatment setting for patients, the patients may leave the hospital during the course of treatment and not seek further treatment unless the infection returns. This failure to continue treatment may cause patients to then be readmitted to the hospital, which in turn may result in the imposition of reimbursement penalties on the hospital and higher overall cost to the healthcare system.

Despite widespread use, currently available treatment options have significant limitations in the treatment of abSSSI. These limitations include:

•

Dosing Schedule, Duration and Compliance. Most current intravenous treatment options typically require multiple infusions per day for up to 14 days. The required infusions can be as long as two hours per dose. Because of the duration and frequency of dosing required for current injectable treatment options, including vancomycin, lack of patient compliance may reduce the effectiveness of a treatment. For example, vancomycin is generally administered every six or twelve hours with a 60 to 120 minute infusion time, intravenous Zyvox is administered twice a day with a 30 to 120 minute infusion time, and Tygacil is administered twice a day with a 30 to 60 minute infusion time. Although Cubicin has an infusion time of two minutes as one of its dosing options, Cubicin is administered daily for seven to 14 days. Some oral treatments are available and do not require prolonged hospital stays, but patients receiving oral treatments have significantly lower compliance rates and, as a result, may be at increased risk for hospital readmission.

•

Safety, Tolerability and Suitability of Use. Many current treatment options are associated with adverse events, including allergic reactions, kidney damage, renal toxicity and high rates of vomiting and nausea. Vancomycin, for example, is associated with infusion reactions and can cause kidney damage or renal toxicity, loss of balance, or vestibular toxicity, and loss of hearing, or oto-toxicity, in certain patients. In addition, adjusting the dosage of vancomycin requires frequent therapeutic drug monitoring to ensure safe administration. Zyvox is associated with bone marrow suppression and contraindicated for use in patients taking monoamine oxidase inhibitors, a class of drugs used as anti-depressants, and should not be used without careful observation in people taking selective serotonin reuptake inhibitors, a class of drugs commonly used as anti-depressants, among other uses. Tygacil is generally not used as a front-line antibiotic due to a potentially greater risk of mortality as compared to the active comparators in clinical trials and high rates of vomiting and nausea. Cubicin has been associated with the development of antibiotic resistance during the course of therapy, a reduction of efficacy in patients with moderate renal insufficiency and a side effect profile that includes muscle damage. In vivo potency at the prescribed dose can be limited by restrictions around the amount of drug delivered stemming from safety concerns surrounding some currently available treatments.

•

Spectrum of Coverage, Resistance Profile and Potency. Some of the most frequently prescribed currently available treatment options are narrow spectrum drugs, which prevents their use as a monotherapy for the first-line treatment of serious bacterial infections in which a broader spectrum of coverage is required. Of the most frequently prescribed currently available treatments for abSSSI, only Tygacil is broad spectrum. The predominant branded oral medication on the market, Zyvox, is a narrow spectrum drug. Other currently available treatments, such as vancomycin and Cubicin, are focused spectrum drugs and active against Gram-positive bacteria, but are beginning to show signs of bacterial resistance. For example, there have been recent reports of resistance developing during treatment with Cubicin and concerns about an increasing frequency of strains of S. aureus with reduced susceptibility to vancomycin.

•

Cidality. Antibiotics are either bactericidal or bacteriostatic. Bactericidal antibiotics kill the bacterial pathogen directly, which is particularly important for patients with weakened immune systems that cannot effectively eradicate the infecting bacteria on their own. Numerous currently available treatment options, including both Zyvox and Tygacil, are bacteriostatic, which means that although they stop bacteria from growing or reproducing, the patient’s own immune system must be strong enough to kill the static bacteria itself. Because of the short half-life of many currently available bactericidal treatment options, such as vancomycin and Cubicin, the killing effects of these drugs is limited by the duration of the drug in the blood, and these drugs do not exhibit bactericidal activity for a prolonged, or continuous, period following administration.

Dalbavancin

Overview

Dalbavancin is a second generation, semi-synthetic lipoglycopeptide designed for once-weekly intravenous dosing. We are initially developing dalbavancin for the treatment of patients with abSSSI caused by Gram-positive bacteria, such as S. aureus, including Methicillin-Resistant and multi-drug resistant strains, and certain Streptococcal species. We are enrolling and dosing patients in two global Phase 3 clinical trials with dalbavancin. Dalbavancin previously completed three other Phase 3 clinical trials in May and June 2004 pursuant to prior FDA guidelines that are no longer in effect, in which more than 1,000 patients in total received dalbavancin. Dalbavancin achieved its primary efficacy endpoint of non-inferiority in evaluable patients’ clinical response at test of cure, 28 days following therapy, in each of these three completed Phase 3 clinical trials when compared to linezolid, cefazolin or vancomycin, three of the standard-of-care agents for uSSSI and cSSSI. In these trials, dalbavancin was well tolerated and generated a large database of safety information. The rate and duration of adverse events in clinical trials to date for dalbavancin are similar to that of the comparator drugs used in the trials, and we have not observed any negative drug-drug interactions with dalbavancin in clinical development to date.

After Vicuron Pharmaceuticals Inc., or Vicuron, filed an NDA for dalbavancin with the FDA in December 2004, Pfizer Inc., or Pfizer, acquired Vicuron in September 2005. In July 2007, Pfizer filed an MAA for dalbavancin with the EMA. Between 2005 and 2007, the FDA issued three approvable letters relating to the NDA filed in 2004 for dalbavancin. The first two approvable letters raised, in part, open items on the manufacturing process of dalbavancin. After addressing the first approvable letter by making changes to the manufacturing process, Pfizer made additional changes to the manufacturing process, resulting in a second approvable letter. The third approvable letter in part requested that Pfizer justify the non-inferiority margin used for the then-current Phase 3 clinical trial comparing dalbavancin and cefazolin. In addition, the EMA questioned the approvability of Pfizer’s MAA application based on remaining objections that a single pivotal trial in cSSSI did not provide sufficiently robust data and that patients enrolled in the trial were not sick enough to support use in the desired indication. In September 2008, Pfizer globally withdrew all marketing applications while it considered conducting a second pivotal trial for the treatment of cSSSI in adults.

We acquired our rights to dalbavancin through our acquisition of Vicuron from Pfizer in December 2009. In 2010, the FDA issued new draft guidance for the study of abSSSI. The purpose of this new guidance was to address many of the uncertainties regarding the FDA’s expectations concerning clinical trials for abSSSI. As part

of the new draft guidance, the FDA re-evaluated the types of skin and skin structure infections that should be included in clinical trials to support an indication for treatment. The FDA termed these types of infections abSSSI rather than uSSSI or cSSSI. We recently conducted a retrospective analysis of the completed Phase 3 clinical trial comparing dalbavancin and linezolid, which had been considered a pivotal clinical trial, and determined that dalbavancin could have achieved its primary endpoint if the trial had been designed and conducted under the new FDA draft guidance. In addition, as part of the new draft guidance, the FDA requested that sponsors of drugs for the treatment of abSSSI include additional measurements of lesion size in their evaluation of efficacy that the FDA believes to be more objective and less susceptible to interpretation by investigators.

Based on discussions with the FDA in June 2010 and in anticipation of the publication of the FDA draft guidance, we resumed development of dalbavancin. We also received scientific advice from the EMA on our clinical program in December 2010, including with respect to the design of a new trial to support the abSSSI indication. In preparation for Phase 3 clinical development of dalbavancin pursuant to the new FDA draft guidance, we conducted a Phase 2 clinical trial with the primary objective of defining the variability regarding measurement of lesion size with a ruler when the same investigator measures the lesion on two different occasions, referred to as intra-observer variability, or when different investigators measure the same lesion, referred to as inter-observer variability. We have also negotiated two SPAs with the FDA and begun dosing patients in our two ongoing Phase 3 clinical trials. In addition, we successfully completed the dosing of one QT study and one Phase 1 clinical trial to evaluate the plasma concentration, safety and tolerability of administration of dalbavancin in a single 1,500 mg dose, and have commenced dosing in one pharmacokinetic Phase 1 clinical trial in the Japanese population. We have also begun manufacturing drug substance with a new third-party manufacturer and had clinical supplies of dalbavancin manufactured at an additional source.

Differentiating Factors of Dalbavancin

The use of dalbavancin in any treatment setting may have significant advantages over currently available treatments. By limiting or eliminating the admission of patients for treatment in the hospital, we believe use of dalbavancin could reduce overall cost of abSSSI to the healthcare system, improve patient compliance and decrease the spread and cost of MRSA. Although generic vancomycin is a relatively inexpensive drug, the overhead costs of treatment with vancomycin can be very high. Among other costs, treatment with multi-day antibiotics such as vancomycin may require the insertion of a peripherally inserted central catheter, or PICC, line to deliver the drug and either overnight hospital stays or, if a patient is treated on an out-patient basis, at least daily follow-up visits. We believe that treatment with dalbavancin, even with branded pricing at a premium to generic products, would generally be less costly overall than treatment with a generic antibiotic, such as vancomycin.

Dalbavancin is designed for once-weekly administration, contains the complete first week of treatment in the initial dose and is continuously bactericidal. We believe these attributes could allow doctors to administer dalbavancin to certain patients and release them without admission to the hospital, with confidence in the patients’ antibiotic treatment. Dalbavancin can be delivered through any intravenous catheter, which can be removed after dosing is complete, so that there is no need for insertion of a PICC line. Additionally, we believe that because dalbavancin’s second dose occurs seven days after the first dose, dalbavancin is particularly well suited for use in an emergency room or out-patient setting. In both the emergency room and the out-patient settings, a patient could be diagnosed, treated with the initial dose and released all in a few hours without admission to the hospital, with just one follow-up visit to complete treatment seven days later. We believe that this short, infrequent dosing would be less disruptive to a patient than currently available treatments and would allow doctors to send patients home directly from the emergency room or out-patient setting, rather than admitting patients to the hospital.

We also believe dalbavancin could provide significant therapeutic and economic benefits when administered in the hospital in-patient setting. Because treatment with dalbavancin requires only two doses one week apart, use of dalbavancin in the hospital may make an overall hospital stay shorter and less expensive. We believe that after dosing a patient with the initial infusion of dalbavancin, hospitals could discharge the patient after only a short stay and then schedule a follow-up appointment for the second infusion. This second appointment would serve the dual purpose of allowing a doctor to reexamine the patient and to administer the second dose of dalbavancin, all while limiting the duration of the patient’s hospital stay.

We believe that with effective treatment of patients outside the hospital, the use of dalbavancin could decrease the threat of the spread of MRSA, both to and from a particular patient. We also believe that limiting the admission of patients for further treatment in the hospital and avoiding patient compliance and MRSA concerns could decrease readmission rates of patients with abSSSI and therefore increase reimbursement rates for hospitals. As the healthcare system evolves with new programs seeking to reduce cost and provide better care for patients, we expect that accountable coordinated care models will begin to subject hospitals to quality bonuses or penalties from both government and commercial payors. The accountability metrics, which we expect to be implemented over the next few years, include reduced hospital readmissions, reduced healthcare-acquired infections, minimizing exposure to bundled payments and other improvements based on quality and cost of care. In addition, limiting the admission of patients for further treatment in the hospital may decrease the risk of improper admission of patients for one-day stays under audits conducted pursuant to government payor rules.

Other potential benefits of dalbavancin include the following:

•

Dosing Schedule, Duration and Compliance. We believe that dalbavancin’s pharmacokinetic profile supports once-weekly dosing with a 30 minute infusion time, which may reduce the length of an abSSSI patient’s hospital stay or avoid hospital admission altogether and, ultimately, lower the overall cost of care and lower the incidence of bacterial resistance to dalbavancin. We believe that once-weekly dosing will improve patient compliance compared to many currently existing treatment options that require dosing multiple times per day for up to 14 days. As shown in the graph below, over time, in clinical trials conducted to date, dalbavancin maintains high plasma concentration, which is critical to a drug’s effectiveness in treating abSSSI, compared to vancomycin. Each peak on the graph represents the administration of a dose of either dalbavancin or vancomycin. With respect to dalbavancin, the first peak represents a 1,000 mg dose and the second peak represents a 500 mg dose. With respect to vancomycin, each peak represents a 1,000 mg dose.

LOGO

All of the completed Phase 3 clinical trials for dalbavancin were conducted using the same dosing regimen that we are evaluating in our ongoing Phase 3 clinical trials and that is covered by an issued U.S. patent.

•

Safety, Tolerability and Suitability of Use. Dalbavancin has been well tolerated in all completed clinical trials to date, which included dosing of over 1,000 patients with dalbavancin. Notwithstanding dalbavancin’s relatively long half-life, the rate and duration of adverse events in clinical trials to date for dalbavancin are similar to that of the comparator drugs used in the trials, and we have not observed any negative drug-drug interactions with dalbavancin in clinical development to date. Results from clinical trials of dalbavancin indicate that there is no need to adjust dosing for patients of different body weights and that therapeutic drug monitoring will not be required for the use of dalbavancin. Our clinical data also suggest that the only dosing adjustment required is for patients with severe renal impairment and that this adjustment would be to maintain appropriate drug concentration and exposure rather than as a response to any safety concern.

•

Spectrum of Coverage, Resistance Profile and Potency. In an in vitro assessment, the potency of dalbavancin was 16 to 32 times greater than that of vancomycin against Staphylococci, including MRSA. In vitro potency is measured by determining the concentration of a drug needed to inhibit the growth of 90% of a panel of bacterial strains isolated from patients, referred to as a MIC₉₀ measurement. A lower MIC₉₀ indicates greater potency against a particular bacterium. Based on this in vitro assessment, dalbavancin has a low MIC₉₀ value (£0.06 µg/ml) against S. aureus, including MRSA, compared to vancomycin (1 or 2µg/ml). Over approximately ten years of study, dalbavancin has been tested against more than 60,000 Staphylococcal clinical isolates, but has not yet shown evidence of bacterial resistance. We believe dalbavancin’s potency and activity against Gram-positive bacteria and its ability to date in avoiding resistance would make it a strong candidate for use in first-line treatment against bacterial infections.

•

Cidality. Dalbavancin’s relatively long half-life means that dalbavancin is bactericidal over a prolonged period of time following treatment, as opposed to only a short period after administration. We believe this continuous bactericidal attribute, and the corresponding decrease in number of doses that must be given to treat each infection, means bacteria are less likely to develop a resistance to dalbavancin over time.

Clinical Experience

Dalbavancin has completed a total of fifteen Phase 3, Phase 2 and Phase 1 clinical trials, over approximately ten years, in which more than 1,000 patients have been dosed with dalbavancin. These clinical trials assessed more than 60,000 isolates, from over 390 centers worldwide, the majority of which were Staphylococci and Streptococci, in particular species that are relevant to abSSSI, including MRSA and multiple resistant isolates.

Ongoing Phase 3 Clinical Trials

Based on the draft guidance issued by the FDA in August 2010 regarding expectations from sponsors and clinical trials for abSSSI, we negotiated two SPAs with the FDA for the clinical development of dalbavancin. Based on these SPAs, we are currently enrolling patients in two global multicenter, double-blind, double-dummy, randomized, controlled pivotal Phase 3 clinical trials to compare the clinical efficacy of dalbavancin to vancomycin, with the option to switch to oral linezolid after three days of dosing, for the treatment of patients with suspected or proven Gram-positive abSSSI. We are using the same two dose regimen for dalbavancin in these trials that has been used in each Phase 3 clinical trial for dalbavancin conducted to date, with a 1,000 mg dose administered on day 1 and a 500 mg dose administered on day 8. All patients randomized to active dalbavancin also will receive placebos to mimic the comparator regimen, which includes placebo intravenous infusions to mimic vancomycin and oral placebos to mimic linezolid. Patients randomized to active vancomycin/linezolid also will receive placebo intravenous infusions on days 1 and 8 to mimic dalbavancin. Pharmacists at each trial site are unblinded to the dosing regimens while the clinical investigators and patients remain blinded.

The primary outcome measure will be a comparison of clinical response at 48 to 72 hours following initiation of treatment, based on the cessation of the spread of the lesion and body temperature. To achieve this primary outcome measure, we must demonstrate non-inferiority of dalbavancin compared to vancomycin based on a pre-determined non-inferiority margin. Non-inferiority comparisons of drugs are the standards for antibiotic drug development, and non-inferiority margins are used in the statistical analysis comparing two treatment arms in a study to distinguish the degree of potential difference between the antibiotics being evaluated. The pre-specified non-inferiority margin in our ongoing Phase 3 clinical trials is 10%.

The trial protocol provides for a secondary outcome measure of non-inferiority of clinical response at the end of treatment, which is 14 days following initiation of treatment, based on the investigator’s assessment of the resolution or improvement of all signs and symptoms of the infection. Based on input from the EMA during our scientific advice discussions we expect that this secondary outcome measurement will serve as the primary measure of efficacy for our MAA submission to the EMA.

Patients enrolled in these two Phase 3 clinical trials are required to have at baseline a minimum abSSSI lesion size of 75 cm² and at least one systemic manifestation of infection, based on fever or a minimum white blood cell count. We plan to enroll approximately 556 patients in each ongoing Phase 3 clinical trial and are conducting the two clinical trials simultaneously. We expect to conduct the first Phase 3 clinical trial at

approximately 80 to 90 sites and the second Phase 3 clinical trial at approximately 120 to 150 sites, in each case, in North America, Europe, Asia and Africa. As of March 31, 2012, we had enrolled approximately 308 patients in the first Phase 3 clinical trial and approximately 109 patients in the second Phase 3 clinical trial. We expect to complete these ongoing Phase 3 clinical trials and have initial, top-line data available by the beginning of 2013 and, if these trials are successful, submit an NDA to the FDA in the first half of 2013 and an MAA to the EMA in the second half of 2013. Under the Prescription Drug User Fee Act, or PDUFA, guidelines that are currently in effect, the FDA has a goal of ten months from the date of the receipt of a standard non-priority NDA to review and act on the submission. However, newly proposed PDUFA agreements may change this goal to 12 months for standard NDAs for new molecular entities .. After the efficacy and safety of dalbavancin are further defined in the ongoing Phase 3 clinical trials of abSSSI, we also plan to submit a pediatric development plan to the FDA and EMA for review and comment.

Recently Completed Phase 2 Clinical Trial

We recently completed a non-interventional observational Phase 2 clinical trial to determine the inter- and intra-observer variability regarding lesion size when measured with a ruler. We have submitted the results of this Phase 2 clinical trial to the FDA to support our use of these measurement methods in our ongoing Phase 3 clinical trials. The SPAs we reached with the FDA for our ongoing Phase 3 clinical trials incorporate both the draft FDA guidance issued in 2010 and the methods derived from our Phase 2 clinical trial into the design of the ongoing Phase 3 clinical trials of dalbavancin for abSSSI. These clinical trials require physical and laboratory measurements of the extent and severity of the skin infections that are relatively independent of the traditional physicians’ global assessment of clinical outcome.

Recent Phase 1 Clinical Trials

We commenced dosing in a thorough QT study in April 2011 to evaluate the electrocardiographic effects of a therapeutic dose of 1,000 mg and a supratherapeutic dose of 1,500 mg of dalbavancin relative to a positive control of moxifloxacin and a placebo control. We had previously established tolerability of a single 1,500 mg supratherapeutic dose in a Phase 1 clinical trial in which we dosed eight healthy adults. We enrolled 200 healthy adult male and female subjects in our thorough QT study, with 50 subjects in each treatment group. In this trial, we found no impact of dalbavancin on cardiac conduction.

We commenced dosing in a Phase 1 clinical trial in June 2011 to evaluate the pharmacokinetics, safety and tolerability of a 1,000 mg dose of dalbavancin administered to healthy Japanese adults. As of March 31, 2012, we have enrolled 15 active and three placebo subjects in this trial.

Completed Phase 3 Clinical Trials

Dalbavancin has been studied in three completed Phase 3 clinical trials.

Phase 3 Clinical Trial Comparing Dalbavancin to Cefazolin for uSSSI. The first Phase 3 clinical trial was a randomized, double-blind, controlled study that compared the clinical efficacy and safety of dalbavancin in the treatment of uSSSI relative to cefazolin. Patients received either a 1,000 mg intravenous dose of dalbavancin on day 1 with the option to follow with a 500 mg dose on day 8, with a possible switch to an oral placebo given every six hours, or a 500 mg dose of intravenous cefazolin every eight hours, with a possible switch to a 500 mg dose of oral cephalexin every six hours. In each case, dosing occurred over seven to 14 days, and a total of 367 patients were dosed with dalbavancin. The trial was conducted at 70 sites in seven countries. In this trial, dalbavancin met the primary endpoint of non-inferiority. The pre-specified non-inferiority margin in this trial was -12.5%. Efficacy was assessed by determining clinical and microbiological responses at the end of therapy and at the test of cure visit, a subsequent visit 14 days later. The primary endpoint was based on an analysis of data on a per protocol basis in the clinically evaluable population at the test of cure visit, which includes data only from patients who complied with the trial protocol. Dalbavancin was effective in 89.1% of patients and cefazolin was effective in 89.1% of patients. Based on an intent to treat analysis, which includes data from all

patients enrolled in the trial, dalbavancin was effective in 76.0% of patients and cefazolin was effective in 75.8% of patients. The table below summarizes the success rates of patients dosed with dalbavancin and cefazolin on both a per protocol and intent to treat basis. The table also shows the 95% confidence interval, or 95% CI, of non-inferiority of dalbavancin compared to cefazolin. A 95% CI is a statistical determination that demonstrates the range of possible differences in the point estimates of success that will arise 95% of the time the endpoint is measured. Non-inferiority is based on a lower limit of the difference of the two point estimates of success falling above a pre-determined amount.


Per Protocol (Number (%) of Patients)			Intent to Treat (Number (%) of Patients)
Dalbavancin (N=266)	Cefazolin (N=147)	(95% CI)	Dalbavancin (N=367)	Cefazolin (N=186)	(95% CI)
237 (89.1%)	131 (89.1%)	(-6.8, 6.8)	279 (76.0%)	141 (75.8%)	(-7.7, 8.2)

Phase 3 Clinical Trial Comparing Dalbavancin to Linezolid for cSSSI Caused by Gram-positive Pathogens. The second Phase 3 clinical trial was a randomized, double-blind, controlled study that compared the clinical efficacy and safety of dalbavancin relative to linezolid in cSSSI caused by Gram-positive pathogens. A secondary objective was to compare microbiological efficacy and obtain pharmacokinetic and pharmacodynamic data for dalbavancin. Patients received either a 1,000 mg intravenous dose of dalbavancin on day 1 and a 500 mg dose on day 8, with a possible switch to an oral placebo given every twelve hours, or a 600 mg dose of intravenous linezolid every twelve hours, with a possible switch to a 600 mg dose of oral linezolid every twelve hours. In each case, dosing occurred over 14 days, and a total of 571 patients were dosed with dalbavancin. The trial was conducted at 65 sites in seven countries. The pre-specified non-inferiority margin in this trial was -12.5%. In this trial, dalbavancin met the primary endpoint of non-inferiority. Efficacy was assessed by determining clinical and microbiological responses at the end of therapy and at the test of cure visit, a subsequent visit 14 days later. The primary endpoint was based on an analysis of data on a per protocol basis in the clinically evaluable population at the test of cure visit, which includes data only from patients who complied with the trial protocol. Dalbavancin was effective in 88.9% of patients and linezolid was effective in 91.2% of patients. Based on an intent to treat analysis of data from this clinical trial, dalbavancin was effective in 76.5% of patients and linezolid was effective in 82.7% of patients. In connection with its review of the NDA for dalbavancin, the FDA conducted a separate analysis of the same data. The FDA reassessed, among other things, data from patients who were considered failures in the trial results submitted as part of the NDA. In the FDA’s analysis, dalbavancin was effective on a per protocol basis in 88.3% of patients and linezolid was effective in 89.6% of patients. Based on the FDA’s separate intent to treat analysis of data from this clinical trial, dalbavancin was effective in 73.2% of patients and linezolid was effective in 75.3% of patients. The tables below summarize the success rates of patients dosed with dalbavancin and linezolid on both a per protocol and intent to treat basis using the original trial protocol and the FDA’s separate analysis of the same data. The tables also show the 95% CI of non-inferiority of dalbavancin compared to linezolid.

Original Analysis


Per Protocol (Number (%) of Patients)			Intent to Treat (Number (%) of Patients)
Dalbavancin (N=434)	Linezolid (N=226)	(95% CI)	Dalbavancin (N=571)	Linezolid (N=283)	(95% CI)
386 (88.9%)	206 (91.2%)	(-7.3, 2.9)	437 (76.5%)	234 (82.7%)	(-12.0, - 0.3)

FDA Analysis
Per Protocol (Number (%) of Patients)			Intent to Treat (Number (%) of Patients)
Dalbavancin (N=392)	Linezolid (N=211)	(95% CI)	Dalbavancin (N=523)	Linezolid (N=263)	(95% CI)
346 (88.3%)	189 (89.6%)	(-6.9, 4.3)	383 (73.2%)	198 (75.3%)	(-8.8, -4.7)

Phase 3 Clinical Trial Comparing Dalbavancin to Vancomycin for Skin and Skin Structure Infections Known or Suspected to be Due to MRSA. The third Phase 3 clinical trial was a randomized, open-label controlled study that evaluated the clinical and microbiological efficacy, safety and tolerability of dalbavancin relative to vancomycin in the treatment of adults with skin and skin structure infections known or suspected to be due to MRSA. Patients received either a 1,000 mg intravenous dose of dalbavancin on day 1 and a 500 mg dose on day 8 or a 1,000 mg dose of intravenous vancomycin every twelve hours, with a possible switch to a 500 mg dose of oral cephalexin every six hours following parenteral therapy if the pathogen was susceptible. Dosing occurred over 14 days for patients with cSSSI and either 7 or 14 days for patients with uSSSI, and a total of 107 patients were dosed with dalbavancin. The trial was conducted at 22 sites in two countries. The pre-specified non-inferiority margin in this trial was -20.0%. In this trial, dalbavancin met the primary endpoint of non-inferiority. Efficacy was assessed by determining clinical and microbiological responses at the end of therapy and at the test of cure visit, a subsequent visit 14 days later. Based on the primary analysis of the data from this clinical trial performed on a per protocol basis, dalbavancin was effective in 89.9% and vancomycin was effective in 86.7% of patients. Based on an intent to treat analysis of data from this clinical trial, dalbavancin was effective in 86.0% of patients and vancomycin was effective in 65.3% of patients. The table below summarizes the success rates of patients dosed with dalbavancin and vancomycin on both a per protocol and intent to treat basis. The table also shows the 95% CI of non-inferiority of dalbavancin compared to vancomycin.


Per Protocol (Number (%) of Patients)			Intent to Treat (Number (%) of Patients)
Dalbavancin (N=79)	Vancomycin (N=30)	(95% CI)	Dalbavancin (N=107)	Vancomycin (N=49)	(95% CI)
71 (88.9%)	26 (86.7%)	(-13.0, 19.4)	92 (86.0%)	32 (65.3%)	(4.3, 37.0)

In the three completed Phase 3 clinical trials and in two previously completed Phase 2 clinical trials, dalbavancin exhibited a level of side effects that is typically lower than or equal to comparators. The integrated results from these trials are summarized below for each type of adverse event or serious adverse event, including deadly and life-threatening adverse events, by both the number and percent of patients exhibiting the corresponding adverse event after dosing with dalbavancin or the comparator used in the clinical trial. The first table below shows the adverse events occurring in greater than 2% of patients receiving dalbavancin or the comparator drug, by specific adverse event. Certain of the results do not include a listing of the sub-type of adverse event and are therefore “not otherwise specified”, or NOS. The second table below shows the total number of patients that experienced one or more adverse event or a serious adverse event while using dalbavancin or the comparator used in the clinical trial.

Adverse Events Occurring in More Than 2% of Patients Receiving Dalbavancin

Phase 2/3 Integrated Database

(Number (%) of Patients)


Adverse Event	Total Dalbavancin (N = 1126)	Total Comparator (N = 573)
Patients with at least one adverse event	585 (52.0%)	326 (56.9%)
Nausea	69 (6.1%)	47 (8.2%)
Diarrhea NOS	63 (5.6%)	39 (6.8%)
Headache	54 (4.8%)	33 (5.8%)
Constipation	40 (3.6%)	29 (3.3%)
Vomiting NOS	40 (3.6%)	26 (4.5%)
Urinary tract infection NOS	34 (3.0%)	12 (2.1%)
Anemia NOS	31 (2.8%)	12 (2.1%)
Rash NOS	29 (2.6%)	13 (2.3%)
Pruritus	25 (2.2%)	14 (2.4%)

Overview of Adverse Events

Phase 2/3 Integrated Database

(Number (%) of Patients)


Patients With:	Total Dalbavancin (N = 1126)	Total Comparator (N = 573)
At least one adverse event	585 (52.0%)	362 (56.9%)
At least one treatment-related adverse event	248 (22.0%)	157 (27.4%)
At least one serious adverse event	92 (8.2%)	54 (9.4%)
At least one treatment-related serious adverse event	2 (0.2%)	5 (0.9%)
At least one adverse event leading to discontinuation of study drug	39 (3.5%)	22 (3.8%)
Deaths	9 (0.8%)	7 (1.2%)
Deaths due to treatment-related adverse event	0	0

In the three completed Phase 3 clinical trials and two completed Phase 2 clinical trials, the duration of adverse events exhibited by dalbavancin tended to be shorter than or equal to the duration of the adverse events exhibited by comparators. The integrated results from these trials are summarized below for the percent of adverse events exhibited and the corresponding number of days for which that percent of adverse events was exhibited after dosing with dalbavancin or the comparator used in the clinical trial.

Overview of Duration of Adverse Events

Phase 2/3 Integrated Database

LOGO

Future Clinical Development Plans

We are pursuing development of dalbavancin in additional indications, as well as new formulations:

•

Osteomyelitis. Osteomyelitis is an infection of the bone that generally requires four to eight weeks of intravenous therapy. It can occur as a result of a bloodstream infection that subsequently seeds the bone or from penetration through the skin or contiguous structures, including as a consequence of trauma. Infections can be acute or chronic. Patients present with fever or chills, bone pain and malaise. The difficulty in achieving adequate antibiotic penetration of the bone requires a prolonged duration of intravenous therapy, usually for the duration of the treatment interval. In addition to disease in adults, we believe there is also a need for additional therapeutic options in pediatric patients with osteomyelitis that provides a favorable efficacy and safety profile, as well as increased compliance through weekly, directly observed dosing. The estimated patient population of osteomyelitis is approximately 200,000 patients annually in the United States. We believe dalbavancin’s intermittent dosing and bone penetration observed in in vivo preclinical testing make it a suitable drug for the treatment of osteomyelitis.

•

Diabetic Foot Infection. Diabetic foot infections, or DFI, are typically complicated by micro- and macro-arterial insufficiency, peripheral neuropathy and chronic neuropathic ulcers, and can involve deep tissues, including bones and joints. MRSA is involved in up to 23% of DFI. In more serious DFI, long term systemic antibacterial treatment of up to four weeks is often required, and longer courses are often indicated in DFI complicated by bone involvement. The estimated patient population of DFIs is approximately 340,000 patients annually in the United States. Because treatment of DFI with currently available treatment options requires up to four week dosing, we believe dalbavancin’s intermittent dosing schedule and the results from past clinical trials with respect to MRSA could make dalbavancin an effective treatment for DFI.

•

Community-Acquired Bacterial Pneumonia Requiring Hospitalization. Community-acquired bacterial pneumonia, or CABP, is a leading cause of morbidity and mortality. Overall mortality from CABP remains relatively high, ranging from 5.1% for patients hospitalized or treated in an ambulatory setting to 36.5% for patients treated in an intensive care unit. The estimated patient population of CABP is approximately 5.6 million patients annually. We believe that dalbavancin’s potential benefits in the out-patient setting could avoid a hospital visit for CABP if the condition is otherwise manageable.

Commercialization Strategy and Organization

Given our stage of development, we have not yet established a commercial organization or distribution capabilities. If approved, we intend to directly commercialize dalbavancin in the United States and Western Europe with a targeted hospital sales force and to utilize a variety of types of collaboration arrangements for commercialization in other markets. Prior to receiving approval we plan to establish a health resources group of approximately five to ten regional medical directors with higher science degrees, including M.D.s, Ph.D.s and Pharm.D.s, to target the hospital, emergency room, and out-patient settings and to familiarize the doctors in these settings with dalbavancin. We expect that our regional medical directors would also work with hospitals, provider organizations and payors to demonstrate that use of dalbavancin may reduce the length of a patients’ hospital stay or avoid hospital admission altogether, which we believe would lower the total cost of treatment of abSSSI when treated with dalbavancin. Then, if dalbavancin is approved, we plan to have our sales force and other support organizations target all three settings simultaneously as we believe there is significant overlap in the target audience in each setting.

We expect that our health resources group will work with doctors in the infectious disease field to answer questions regarding dalbavancin’s clinical results, conduct medical education events regarding the emerging science regarding dalbavancin’s pharmacokinetic profile and build awareness of dalbavancin. If dalbavancin is approved by the FDA, we plan to build a commercial infrastructure to launch dalbavancin in the United States. We expect to direct our sales and marketing efforts at the approximately 2,000 hospitals and out-patient acute care settings that we believe account for a substantial majority of the potential market for dalbavancin. We expect

that our commercial infrastructure would be comprised of a targeted hospital sales force led by several experienced sales management personnel, an internal marketing and medical affairs staff, a reimbursement support team, a hospital formulary specialist team and a specialty distribution team. We estimate that an initial sales force of approximately 100 representatives could successfully target key institutions, out-patient clinics, emergency rooms and ambulatory treatment centers.

At the time of expected approval, we plan to have in place a patient support group to assist patients with information requests, reimbursement logistics and assistance, and provide educational materials. We expect that our sales infrastructure will also include managed markets personnel to establish and direct reimbursement activities with third-party payors, such as managed care organizations, group-purchasing organizations, infectious disease group networks and government accounts. We may need to hire personnel to fill some of these functions in advance of the anticipated approval date.

We currently intend to focus our initial commercial efforts on the U.S. and Western European markets, which we believe represent the largest market opportunities for dalbavancin. In addition, we believe that Eastern Europe, Asia and Latin America represent significant opportunities because of the particular importance of out-patient treatment settings in these markets. Although we are currently evaluating our commercialization strategy outside the United States and Western Europe, we intend to seek to commercialize dalbavancin in these markets through a variety of types of collaboration arrangements with leading pharmaceutical and biotechnology companies.

Intellectual Property

We strive to protect the proprietary technology that we believe is important to our business, including seeking and maintaining patents intended to cover our product candidates and compositions, their methods of use and processes for their manufacture and any other inventions that are commercially important to the development of our business. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Our success will significantly depend on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business, defend and enforce our patents, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties. We also rely on know-how and continuing technological innovation to develop and maintain our proprietary position.

Our dalbavancin patent portfolio includes three issued U.S. patents, three U.S. patent applications, and foreign counterparts to these patents and patent applications. The dalbavancin patent portfolio is owned by our wholly-owned subsidiary, Vicuron. The three issued U.S. patents in this portfolio consist of a method-of-treatment patent, a dosage-form patent and a formulation patent, all of which have statutory expiration dates in 2023. The method-of-treatment patent claims a once-weekly dalbavancin regimen. In particular, it recites a method comprising the administration of at least two doses of dalbavancin to treat a bacterial infection, the amount of the doses and the interval between doses. The related pending U.S. applications also relate to methods of treatment. Any U.S. patents that may issue from these applications would have a statutory expiration date in 2023. The U.S. Patent and Trademark Office has allowed one of the three pending U.S. applications. The allowed application contains claims similar to the issued method-of-treatment patent, but recites a broader dosage range. Patent protection is not available for composition-of-matter claims that only recite the active pharmaceutical ingredient for dalbavancin.

The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the United States, the patent term is 20 years from the earliest filing date of a non-provisional patent application. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed

patent. The term of a patent that covers a drug, biological product or medical device approved pursuant to a pre-market approval, or PMA, may also be eligible for patent term extension when FDA approval is granted, provided statutory and regulatory requirements are met. The length of the patent term extension is related to the length of time the drug is under regulatory review while the patent is in force. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration date set for the patent. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be granted an extension and only those claims reading on the approved drug are extended. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug.

We own worldwide commercial rights to dalbavancin. Our worldwide rights are royalty free, other than in Japan, where we are obligated to pay royalties on net sales of dalbavancin. We will also owe a single milestone payment following the first commercial sale of dalbavancin in the United States or one of five major European markets, which we have the right to defer for up to five years. Our dalbavancin rights include three U.S. patents covering dalbavancin’s use and formulation. Although each of these patents is scheduled to expire in 2023, any one, but not all, of these U.S. patents may be eligible for patent term extension. Moreover, if and when dalbavancin receives approval by the FDA, we expect to apply to list each of the issued patents that cover the approved dalbavancin formulation and method of use in the Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book.

We rely, in some circumstances, on trade secrets to protect our technology. However, trade secrets can be difficult to protect. We seek to protect our trade secrets and proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting trade secrets, know-how and inventions.

Acquisition of Vicuron From Pfizer

In December 2009, we acquired all of the outstanding shares of capital stock of Vicuron from Pfizer. We paid total upfront consideration of $10 million for the Vicuron shares and dalbavancin inventory that we acquired pursuant to a separate inventory transfer agreement with Pfizer Overseas LLC. In March 2011, Pfizer refunded to us $6 million of the initial purchase price under the terms of our stock purchase agreement, based on documentation we provided that supported the position that marketing approval for dalbavancin required more than one new Phase 3 clinical trial. Following the first commercial sale of dalbavancin for the treatment of abSSSI in the United States, the United Kingdom, Germany, Italy, Spain or France, we are obligated to pay Pfizer an additional milestone payment of $25 million. However, at our sole discretion, we may elect to defer the milestone payment for a period of up to five years if we deliver to Pfizer a promissory note for the full amount of such milestone payment. Interest on the outstanding principal amount of the promissory note will accrue at a rate of 10% per annum, compounded annually. We also have the option, in our sole discretion, exercisable at any time before a specified date following the FDA’s acceptance of our NDA for dalbavancin to make a one-time payment to Pfizer of $20 million in lieu of, and in full satisfaction of, our obligation to pay the $25 million milestone payment. Prior to paying the milestone payment to Pfizer, we may effect a change of control, as defined in the stock purchase agreement with Pfizer, or sell, exclusively license or otherwise transfer all or substantially all of our or Vicuron’s rights, title and interest in and to dalbavancin only if such transaction is with a qualified successor or with Pfizer’s prior written consent. For purposes of the stock purchase agreement, a qualified successor is a company with a specified market capitalization, tangible net worth and debt to equity ratio. If Pfizer consents to a transaction with a company that is not a qualified successor, the interest rate on the promissory note with respect to the $25 million milestone payment will increase to 14% per annum.

Acquisition of Dalbavancin Commercial Rights in Japan From RaQualia Pharma Inc.

In December 2010, we acquired from RaQualia Pharma Inc., or RaQualia, rights to commercialize dalbavancin in Japan, which Pfizer had previously granted to RaQualia pursuant to a marketing rights agreement. We paid RaQualia upfront consideration of $350,000 for the termination of the marketing rights agreement. Following the first receipt of the first regulatory approval for dalbavancin in Japan, we are obligated to pay RaQualia an additional milestone payment of $2 million. We also agreed to pay RaQualia high single digit royalties of net sales of dalbavancin in Japan until the later of the tenth anniversary of the first commercial sale of dalbavancin in Japan and the last expiration of all patents owned by Durata or Vicuron as of December 2010 that cover the sale of dalbavancin in Japan. If we fail to use reasonable efforts to file a regulatory approval application in Japan for dalbavancin within a specified time, RaQualia has the right to regain commercial rights to dalbavancin in Japan.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. While we believe that our clinical experience and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions. Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of dalbavancin, if approved, are likely to be its efficacy, safety, convenience, price, use in out-patient settings, the level of generic competition and the availability of reimbursement from government and other third party payors.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours. In addition, our ability to compete may be affected because in many cases insurers or other third party payors seek to encourage the use of generic products. Our industry is highly competitive and is currently dominated by generic vancomycin, which generated sales of approximately $189 million in the United States in 2011 and represented a majority of courses prescribed. Additional products are expected to become available on a generic basis over the coming years. If dalbavancin is approved, we expect that it will be priced at a significant premium over competitive generic products.

Our potential competitors include large pharmaceutical and biotechnology companies, and specialty pharmaceutical and generic drug companies, including Pfizer, which markets Zyvox (linezolid) and Tygacil (tigecycline), Cubist Pharmaceuticals, Inc., which markets Cubicin (daptomycin), Theravance, Inc., which markets Vibativ (telavancin), Forest Laboratories, Inc., which markets Teflaro (ceftaroline), Sanofi-Aventis Ltd., which markets Targocid (teicoplanin), and various producers of generic vancomycin. Further, we expect that

product candidates currently in late stage development, or that could enter late stage clinical development in the near future, may represent significant competition if approved. These include oritavancin (under development by The Medicines Company for administration in a single dose with a three-hour infusion time), tedizolid phosphate (under development by Trius Therapeutics, Inc.), fusidic acid (under development by Cempra, Inc.), delafloxin (under development by Rib-X Pharmaceuticals, Inc.), PTK 0796 (under development by Paratek Pharmaceuticals, Inc.), BC-3781 (under development by Nabriva Therapeutics AG), TP-434 (under development by Tetraphase Pharmaceuticals, Inc.) and JNJ-Q2 (under development by Furiex Pharmaceuticals, Inc.). Many of these companies may have significantly greater resources than we have. If approved, we believe that dalbavancin’s features, including its convenient dosing, compliance and efficacy with respect to MRSA, will differentiate it from existing products currently marketed for the treatment of abSSSI.

Manufacturing and Supply

We currently rely on one third-party manufacturer to supply us with dalbavancin drug substance and another third-party manufacturer to conduct fill and finish services. Our third-party manufacturers have successfully manufactured clinical supplies of dalbavancin meeting all of our release specifications. We believe that both of our current manufacturers are capable of producing commercial quantities of dalbavancin. We obtain our supplies of the drug substance for dalbavancin on a purchase order basis and do not have a long-term supply arrangement in place. If this drug substance manufacturer should become unavailable to us for any reason, we believe that there are a number of potential replacements, although we might incur some delay in identifying or qualifying such replacements. We have identified a possible secondary supplier of drug substance and are currently engaged in a technology transfer process with this manufacturer.

We have entered into a development and supply agreement with Hospira Worldwide, Inc., or Hospira, for our fill and finish services. Under this agreement, Hospira is required to supply and we are required to purchase a specified percentage of our commercial requirements of dalbavancin. We are also required to pay Hospira aggregate development fees of $1.7 million based on the occurrence of specified milestone events. Through December 31, 2011, we have paid $0.7 million of this amount. The agreement expires five years after the first commercial sale of dalbavancin, subject to an automatic renewal for an indefinite period. Either party may terminate the agreement with 24 months prior notice before the end of the initial term or during the renewal term. In addition, either party may terminate the product development activities under the agreement following consultation with the other party if the terminating party determines that the development of dalbavancin is not technically or commercially feasible using commercially reasonable efforts. Either party may terminate the agreement with six months prior notice if dalbavancin has not received regulatory approval by December 31, 2015. Finally, either party may terminate the agreement for the other party’s uncured material breach or upon the occurrence of specified bankruptcy events.

If Hospira should become unavailable to us for any reason for fill and finish services, we believe that there are a number of potential replacements, although we might incur some delay in identifying or qualifying such replacements. The agreement includes customary supply terms, including product specifications, batch size requirements, price, payment terms, requirements forecasting, delivery mechanics and quality assurance.

Prior to the time of expected approval of dalbavancin, we intend to have quantities of drug supply manufactured sufficient to meet demand for the first year following commercial launch. We believe this approach will decrease the risk inherent in relying on third-party manufacturers. All lots of drug substance and drug products used in clinical trials are manufactured under current good manufacturing practices.

Government Regulation and Product Approval

Government Regulation

Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, including any manufacturing changes, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import and export of pharmaceutical products such as those we are developing. The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources.

U.S. Drug Approval Process

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

•

completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

•

submission to the FDA of an IND which must become effective before human clinical trials may begin;

•

approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;

•

performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug or biological product for each indication;

•

submission to the FDA of a new drug application, or NDA;

•

satisfactory completion of an FDA advisory committee review, if applicable;

•

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and

•

FDA review and approval of the NDA.

Preclinical Studies

Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess its potential safety and efficacy. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some preclinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical Trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution. Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their ClinicalTrials.gov website.

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.

Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

Special Protocol Assessment

The special protocol assessment process is designed to facilitate the FDA’s review and approval of drugs by allowing the FDA to evaluate the proposed design and size of phase 3 clinical trials that are intended to form the primary basis for determining a drug product’s efficacy. Upon specific request by a clinical trial sponsor, the FDA will evaluate the protocol and respond to a sponsor’s questions regarding, among other things, primary efficacy endpoints, trial conduct and data analysis, within 45 days of receipt of the request. The FDA ultimately assesses whether the protocol design and planned analysis of the trial adequately address objectives in support of a regulatory submission. All agreements and disagreements between the FDA and the sponsor regarding an SPA must be clearly documented in an SPA letter or the minutes of a meeting between the sponsor and the FDA. We are conducting each of our ongoing Phase 3 clinical trials pursuant to SPAs with the FDA, based on draft guidance issued by the FDA in 2010 for the development of drugs to treat abSSSI.

Even if the FDA agrees to the design, execution and analyses proposed in protocols reviewed under the special protocol assessment process, the FDA may revoke or alter its agreement under the following circumstances:

•

public health concerns emerge that were unrecognized at the time of the protocol assessment;

•

a sponsor fails to follow a protocol that was agreed upon with the FDA;

•

the relevant data, assumptions, or information provided by the sponsor in a request for SPA change, are found to be false statements or misstatements, or are found to omit relevant facts; or

•

the FDA and the sponsor agree in writing to modify the protocol and such modification is intended to improve the study.

Marketing Approval

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee.

In addition, under the Pediatric Research Equity Act of 2003, or PREA, as amended and reauthorized by the Food and Drug Administration Amendments Act of 2007, or FDAAA, an NDA or supplement to an NDA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

The FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, plan to mitigate any identified or suspected serious risks. The REMS plan could include medication guides, physician communication plans, assessment plans, and elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization tools.

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity. The FDA is required to refer an application for a novel drug to an advisory committee or explain why such referral was not made. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

The testing and approval process requires substantial time, effort and financial resources, and each may take several years to complete. Data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval on a timely basis, or at all.

If the FDA’s evaluation of the NDA and inspection of the manufacturing facilities are favorable, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing in order for FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. The FDA previously issued three approvable letters (predecessors to current “complete response” letters) regarding dalbavancin as further described in Dalbavancin—Overview.

Even if the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Special FDA Expedited Review and Approval Programs

The FDA has various programs, including fast track designation, accelerated approval and priority review, that are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life threatening conditions and demonstrate the potential to address unmet medical needs. The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious aspect of a serious or life threatening condition and will fill an unmet medical need. The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.

The FDA may give a priority review designation to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists. A priority review means that the targeted time for the FDA to review an application is six months, rather than ten months. Most products that are eligible for fast track designation are also likely to be considered appropriate to receive a priority review.

In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity. As a condition of approval, a sponsor of a drug receiving accelerated approval must perform post-marketing studies to validate the surrogate endpoint or otherwise confirm the effect of the drug on a clinical endpoint, and the drug may be subject to accelerated withdrawal procedures.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

•

restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

•

fines, warning letters or holds on post-approval clinical trials;

•

refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;

•

product seizure or detention, or refusal to permit the import or export of products; or

•

injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Exclusivity and Approval of Competing Products

Hatch-Waxman Exclusivity

Market and data exclusivity provisions under the FDCA can delay the submission or the approval of certain applications for competing products. The FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA submitted by another company that references the previously approved drug. However, an ANDA or 505(b)(2) NDA may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA, or supplement to an existing NDA or 505(b)(2) NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant, are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages, strengths or dosage forms of an existing drug. This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and, as a general matter, does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for generic versions of the original, unmodified drug product. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA; however, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Pediatric Exclusivity

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent exclusivity periods described above. This six-month exclusivity may be granted based on the voluntary completion of a pediatric study or studies in accordance with an FDA-issued “Written Request” for such a study or studies.

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same indication for seven years. For purposes of small molecule drugs, the FDA defines “same drug” as a drug that contains the same active moiety and is intended for the same use as the previously approved orphan drug. For purposes of large molecule drugs, the FDA defines “same drug” as a drug that contains the same principal molecular structural features, but not necessarily all of the same structural features, and is intended for the same use as the drug in question. Notwithstanding the above definitions, a drug that is clinically superior to an orphan drug will not be considered the “same drug” and thus will not be blocked by orphan drug exclusivity.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, orphan drug exclusive marketing rights

in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the drug to meet the needs of patients with the rare disease or condition.

The FDA also administers a clinical research grants program, whereby researchers may compete for funding to conduct clinical trials to support the approval of drugs, biologics, medical devices, and medical foods for rare diseases and conditions. An application for an orphan grant should propose one discrete clinical study to facilitate FDA approval of the product for a rare disease or condition. The study may address an unapproved new product or an unapproved new use for a product already on the market.

Foreign Regulation

In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process in others.

European Union Drug Approval Process

To obtain marketing approval of a drug under European Union regulatory systems, we may submit MAAs either under a centralized or decentralized procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The centralized procedure is compulsory for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, and products with a new active substance indicated for the treatment of certain diseases, and optional for those products that are highly innovative or for which a centralized process is in the interest of patients. We intend to submit an MAA for dalbavancin to the EMA under the centralized procedure. Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the Scientific Advice Working Party of the Committee of Medicinal Products for Human Use, or the CHMP). Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, defined by three cumulative criteria: the seriousness of the disease, such as heavy disabling or life-threatening diseases, to be treated; the absence or insufficiency of an appropriate alternative therapeutic approach; and anticipation of high therapeutic benefit. In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days.

The decentralized procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state, known as the reference member state. Under this procedure, an applicant submits an application, or dossier, and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states. The reference member state prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. Within 90 days of receiving the reference member state’s assessment report, each concerned member state must decide whether to approve the assessment report and related materials. If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points may eventually be referred to the European Commission, whose decision is binding on all member states.

For the EMA, a Pediatric Investigation Plan, or a request for waiver or deferral, is required for submission prior to submitting an MAA for use for drugs in pediatric populations.

In the European Union, new chemical entities qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity. This data exclusivity, if granted, prevents regulatory authorities in the European Union from assessing a generic (abbreviated) application for eight years, after which generic marketing authorization can be submitted but not approved for two years. Even if a compound is considered to be a new chemical entity and the sponsor is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the drug if such company can complete a full MAA with a complete human clinical trial database and obtain marketing approval of its product.

Pharmaceutical Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any drug products for which we may obtain regulatory approval. Sales of any of our product candidates, if approved, will depend, in part, on the extent to which the costs of the products will be covered by third-party payors, including government health programs such as Medicare and Medicaid, commercial health insurers and managed care organizations. The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the drug product once coverage is approved. Third party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the approved drugs for a particular indication.

In order to secure coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable regulatory approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Third party reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our investment in product development.

The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of drugs have been a focus in this effort. Third party payors are increasingly challenging the prices charged for medical products and services and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. If these third-party payors do not consider our products to be cost-effective compared to other available therapies, they may not cover our products after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products at a profit. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. Adoption of such controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals such as the drug product candidates that we are developing and could adversely affect our net revenue and results.

Pricing and reimbursement schemes vary widely from country to country. Some countries provide that drug products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies. For example, the European Union provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states may approve a specific price for a drug product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the drug product on the market. Other member states allow companies to fix their own prices for drug products, but monitor and control company profits. The downward pressure on health care costs in general, particularly prescription drugs, has become

intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert competitive pressure that may reduce pricing within a country. There can be no assurance that any country that has price controls or reimbursement limitations for drug products will allow favorable reimbursement and pricing arrangements for any of our products.

The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect will continue to increase the pressure on drug pricing. Coverage policies, third-party reimbursement rates and drug pricing regulation may change at any time. In particular, the PPACA and a related reconciliation bill, which we collectively refer to as the Affordable Care Act or ACA, contain provisions that may reduce the profitability of drug products, including, for example, increased rebates for covered out-patient drugs sold to Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries, and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

New Legislation and Regulations

From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the testing, approval, manufacturing and marketing of products regulated by the FDA. For example, the FDAAA and PPACA provisions discussed above were enacted in 2007 and 2010, respectively. In addition to new legislation, FDA regulations and policies are often revised or interpreted by the agency in ways that may significantly affect our business and our products. It is impossible to predict whether further legislative changes will be enacted, or FDA regulations, guidance, policies or interpretations changed or what the impact of such changes, if any, may be.

Healthcare Law and Regulation

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we may obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations, include the following:

•

the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under federally funded healthcare programs such as Medicare and Medicaid;

•

the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

•

the federal transparency requirements under the Health Care Reform Law will require manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; and

•

Legal Proceedings

We are not currently subject to any material legal proceedings.

Employees

As of March 31, 2012, we had 16 employees. All of our employees are engaged in administration, finance, clinical, regulatory and business development functions. We believe our relations with our employees are good.

Property and Facilities

We currently occupy a small amount of office space in Morristown, New Jersey, pursuant to an agreement that will expire on December 31, 2012. We believe this office space is adequate for our current needs and that additional or replacement space will be available on commercially reasonable terms as needed. We also plan to open an additional office in Connecticut, which will provide space for research and development, clinical and regulatory functions.

MANAGEMENT

The following table sets forth the name, age and position of each of our executive officers and directors as of , 2012.


Name	Age	Position
Paul R. Edick	56	Chief Executive Officer and Director
Corey N. Fishman	47	Chief Operating Officer
Michael W. Dunne, M.D.	52	Chief Medical Officer
John Shannon	50	Chief Commercial Officer
Brenton K. Ahrens	49	Director
Richard U. De Schutter	71	Director
Dov A. Goldstein, M.D.	44	Director
James I. Healy, M.D., Ph.D.	47	Director
George F. Horner III	67	Director
Ronald M. Hunt	47	Director
Kevin C. O’Boyle	56	Director
Nicole Vitullo	54	Director

(1)	Member of the Audit Committee.

(2)	Member of the Organization and Compensation Committee.

(3)	Member of the Nominating and Corporate Governance Committee.

Paul R. Edick has served as our Chief Executive Officer and as a member of our board of directors since July 2010. From 2008 to 2010, Mr. Edick served as Chief Executive Officer of GANIC Pharmaceuticals, Inc. From 2006 to 2008, Mr. Edick served as Chief Executive Officer of MedPointe Inc. until its acquisition by Meda AB. Mr. Edick also serves as a member of the board of directors of Newlink Genetics Corporation. From 2008 to 2011, Mr. Edick served as Chairman of the board of directors of LifeCycle Pharma A/S. Mr. Edick holds a B.A. in Psychology from Hamilton College in Clinton, New York. We believe that Mr. Edick’s extensive pharmaceutical industry experience with companies at various stages of development give him the qualifications and skills to serve as a director.

Corey N. Fishman has served as our Chief Operating Officer since August 2010. From 2008 to 2010, Mr. Fishman served as Chief Financial Officer of GANIC Pharmaceuticals, Inc. From 2006 to 2008, he served as Chief Financial Officer of MedPointe Inc. until its acquisition by Meda AB. Mr. Fishman holds a B.A. in Economics from the University of Illinois at Urbana-Champaign and an M.S.M. in Finance from the Krannert School of Management at Purdue University.

Michael W. Dunne, M.D. has served as our Chief Medical Officer since September 2010. Dr. Dunne served as our acting Chief Medical Officer on a consulting basis from December 2009 to September 2010. From 1992 to 2009, Dr. Dunne served in a variety of roles in connection with the clinical development of numerous infectious disease compounds at Pfizer Inc., or Pfizer, including as the Vice President, Therapeutic Head of Development for Infectious Disease from 2001 to 2009. Dr. Dunne holds a B.A. in Economics from Northwestern University and an M.D. from the State University of New York Health Sciences Center. He completed his internal medicine residency and fellowships in infectious diseases and pulmonary medicine at Yale University School of Medicine.

John Shannon has served as our Chief Commercial Officer since March 2012. From 2002 until 2012, Mr. Shannon served in a variety of roles at Baxter International Inc., including as General Manager—US Biopharm Business from 2010 to 2011, Vice President Marketing, North America from 2004 to 2010, and Vice President, Renal US Marketing and Business Development from 2002 to 2004. Mr. Shannon holds a B.S. from Western Illinois University.

Brenton K. Ahrens has served as a member of our board of directors since December 2009. Mr. Ahrens is a general partner with Canaan Partners and has been with the firm since 1999. Mr. Ahrens also serves as a member of the board of directors of several private biopharmaceutical companies, including Kalidex Pharmaceuticals, Inc., Elevation Pharmaceuticals Inc. and Relievant MedSystems, Inc. Mr. Ahrens holds a B.S. and an M.S. in

mechanical engineering from the University of Dayton and an M.B.A. from the Tuck School of Business at Dartmouth College. We believe that Mr. Ahrens’ extensive experience as a venture capital investor and his service on the boards of directors of other biopharmaceutical companies give him the qualifications and skills to serve as a director and provide the board with valuable insight into a broad range of issues related to our business activities at this stage in our development.

Richard U. De Schutter has served as a member of our board of directors since April 2012. Mr. De Schutter has been the chairman of the board of directors of Incyte Corporation since 2004. Mr. De Schutter previously served as chairman of the board of directors and Chief Executive Officer of DuPont Pharmaceuticals Company, Chief Administrative Officer of Pharmacia Corporation, Vice Chairman and Chief Administrative Officer of Monsanto Company and Chief Executive Officer of G.D. Searle & Co. Mr. De Schutter also serves as a member of the board of directors of Smith and Nephew plc and several privately held companies. He also served as a member of board of directors of Ecolab, Inc. from 2004 to 2010 and Varian, Inc. from 2001 until its acquisition by Agilent Technologies, Inc. in 2010. We believe that Mr. De Schutter’s career in the pharmaceutical industry, including extensive experience as an executive and service on the boards of directors of other biopharmaceutical companies, gives him the qualifications and skills to serve as a director.

Dov A. Goldstein, M.D. has served as a member of our board of directors since December 2009. Dr. Goldstein has been a partner at Aisling Capital since 2008 and was employed as a principal at Aisling Capital from 2006 to 2008. From 2000 to 2005, Dr. Goldstein served as Chief Financial Officer of Vicuron Pharmaceuticals Inc., which was acquired by Pfizer in September 2005. Dr. Goldstein also serves as a member of the board of directors of ADMA Biologics, Inc. and Cempra, Inc. Dr. Goldstein holds a B.S. in biology from Stanford University, an M.D. from the Yale School of Medicine and an M.B.A. from the Columbia Business School. We believe that Dr. Goldstein’s medical training and his experience in the biopharmaceutical industry as a venture capital investor, as an executive of Vicuron and a member of the boards of directors of other biopharmaceutical companies give him the qualifications and skills to serve as a director, including a valuable perspective on our business.

James I. Healy, M.D., Ph.D. has served as a member of our board of directors since December 2009. Dr. Healy has been a general partner at Sofinnova Ventures since 2000. Dr. Healy also serves as a member of the board of directors of Anthera Pharmaceuticals, Inc., Amarin Corporation plc and InterMune, Inc. From 2001 to 2007, Dr. Healy served as a member of the board of directors of CoTherix, Inc. Dr. Healy holds B.A. degrees in Molecular Biology and Scandinavian Studies from the University of California at Berkeley, an M.D. from Stanford University’s School of Medicine through the Medical Scientist Training Program and a Ph.D. in Immunology from Stanford University. We believe that Dr. Healy’s medical training and his extensive experience in the biopharmaceutical industry, including as a venture capital investor and a member of the boards of directors of other biopharmaceutical companies, give him the qualifications and skills to serve as a director and provide the board with valuable insight into a broad range of issues related to our business activities at this stage in our development.

George F. Horner III has served as a member of our board of directors since December 2009. Mr. Horner serves as chairman of the board of directors of Omthera Pharmaceuticals, Inc., Creabilis SA and DBV Technologies—siège social. From 2009 to 2010, Mr. Horner served as Executive In Residence at Sofinnova Ventures. From 2006 to 2008, Mr. Horner served as the President and Chief Executive Officer of Prestwick Pharmaceuticals, Inc., until it was sold to Biovail Corp. From 2006 to 2009, he served as a member of the board of directors of Endo Pharmaceuticals Holdings Inc. From 1996 until 2005, Mr. Horner served as President, Chief Executive Officer and as a member of the board of directors of Vicuron until its acquisition by Pfizer in September 2005. Mr. Horner holds an A.B. from Belmont Abbey College. We believe that Mr. Horner’s 40-year career in the biotechnology sector, including extensive experience as an executive in a number of private and public companies, including Vicuron, and his service on the boards of directors of other biopharmaceutical companies give him the qualifications and skills to serve as a director and provide the board with valuable insight into a broad range of issues related to our business activities at this stage in our development.

Ronald M. Hunt has served as a member of our board of directors since November 2009. Mr. Hunt has been a Managing Director and Member of New Leaf Venture Partners, L.L.C. since 2005. Mr. Hunt previously acted as a pharmaceutical industry consultant. From 2004 to 2008, Mr. Hunt served as a member of the board ofdirectors of Aspreva Pharmaceuticals Corporation. From 2003 to 2005, Mr. Hunt served as a member of the board of directors of Corixa Corporation. Mr. Hunt holds a B.S. from Cornell University and an M.B.A. from the Wharton School of the University of Pennsylvania. We believe that Mr. Hunt’s experience as a venture capital investor, his experience in the pharmaceuticals industry and his service on the boards of directors of other biopharmaceutical companies give him the qualifications and skills to serve as a director, including a valuable perspective on our business.

Kevin C. O’Boyle has served as a member of our board of directors since April 2012. Since December 2010, Mr. O’Boyle has served in a number of positions at Advanced BioHealing, Inc., including Senior Vice President and Chief Financial Officer and Senior Vice President of Business Operations. From 2004 to 2009, Mr. O’Boyle served as the Chief Financial Officer of NuVasive, Inc. Mr. O’Boyle also serves as a member of the board of directors of GenMark Diagnostics, Inc., Tornier N.V. and Zeltiq Aesthetics, Inc. Mr. O’Boyle holds a B.S. in Accounting from the Rochester Institute of Technology and completed the Executive Management Program at the University of California, Los Angeles, Anderson School of Management. We believe that Mr. O’Boyle’s career in the healthcare industry, including extensive experience as an executive and service on the boards of directors of other biotechnology companies, gives him the qualifications and skills to serve as a director.

Nicole Vitullo has served as a member of our board of directors since December 2009. Ms. Vitullo has been a Managing Member at Domain Associates, L.L.C. since 1999. Ms. Vitullo also serves as a member of the board of directors of Achillion Pharmaceuticals, Inc. From 1998 to 2005, Ms. Vitullo served as a member of the board of directors of Onyx Pharmaceuticals, Inc. Ms. Vitullo holds a B.A. and an M.B.A. from the University of Rochester. We believe that Ms. Vitullo’s service on the boards of directors of other biopharmaceutical companies and her experience as a life sciences venture capital investor give her the qualifications and skills to serve as a director, and will allow her to contribute to our board in such matters as strategic planning, financing, alliance formation and market communications.

Board Composition and Election of Directors

Our board of directors is currently authorized to have and currently has nine members. Following this offering, we anticipate possibly appointing another independent director to the board, with one of our existing directors possibly transitioning off the board. In accordance with the terms of our certificate of incorporation and by-laws that will become effective upon the closing of this offering, our board of directors will be divided into three classes, class I, class II and class III, with members of each class serving staggered three-year terms. Upon the closing of this offering, the members of the classes will be divided as follows:

•

the class I directors will be , and their term will expire at the annual meeting of stockholders to be held in 2013;

•

the class II directors will be , and their term will expire at the annual meeting of stockholders to be held in 2014; and

•

the class III directors will be , and their term will expire at the annual meeting of stockholders to be held in 2015.

Upon the expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting of stockholders in the year in which their term expires. Our directors may be removed only for cause by the affirmative vote of the holders of 75% or more of our voting stock. Under applicable NASDAQ rules, a director will only qualify as an “independent director” if, in the opinion of our board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our board of directors has determined that all of our directors, other than Mr. Edick, are independent directors, as defined by the applicable NASDAQ Marketplace Rules. In making such determination, the board of directors considered the relationships that each such non-employee director has with our company and all other facts and circumstances that the board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

There are no family relationships among any of our directors or executive officers.

Board Committees

Our board of directors has established an audit committee, an organization and compensation committee and a nominating and corporate governance committee, each of which will operate, upon the closing of this offering, under a charter that has been approved by our board. The composition of each committee will be effective upon the closing of this offering.

Our board of directors has determined that all of the members of the audit committee, the organization and compensation committee and the nominating and corporate governance committee are independent as defined under the NASDAQ Marketplace Rules, including, in the case of all the members of our audit committee, the independence requirements contemplated by Rule 10A-3 under the Exchange Act.

Audit Committee

The members of our audit committee are , and . chairs the audit committee. Upon the closing of this offering, our audit committee’s responsibilities will include:

•

appointing, approving the compensation of, and assessing the independence of our registered public accounting firm;

•

overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;

•

reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

•

monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;

•

overseeing our internal audit function;

•

overseeing our risk assessment and risk management policies;

•

establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;

•

meeting independently with our internal auditing staff, our independent registered public accounting firm and management;

•

reviewing and approving or ratifying any related person transactions; and

•

preparing the audit committee report required by Securities and Exchange Commission, or SEC, rules.

All audit and non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our audit committee.

Our board of directors has determined that is an “audit committee financial expert” as defined in applicable SEC rules.

Organization and Compensation Committee

The members of our organization and compensation committee are , and . chairs the organization and compensation committee. Upon the closing of this offering, our organization and compensation committee’s responsibilities will include:

•

annually reviewing and approving corporate goals and objectives relevant to chief executive officer compensation;

•

reviewing and approving, or making recommendations to our board with respect to, the compensation of our chief executive officer and our other executive officers;

•

overseeing an evaluation of our senior executives;

•

overseeing and administering our cash and equity incentive plans;

•

reviewing and making recommendations to our board with respect to director compensation;

•

reviewing and discussing annually with management our “Compensation Discussion and Analysis” disclosure required by SEC rules; and

•

preparing the compensation committee report required by SEC rules.

Nominating and Corporate Governance Committee

The members of our nominating and corporate governance committee are , and . chairs the nominating and corporate governance committee. Upon the closing of this offering, our nominating and corporate governance committee’s responsibilities will include:

•

identifying individuals qualified to become members of our board;

•

recommending to our board the persons to be nominated for election as directors and to each of our board’s committees;

•

reviewing and making recommendations to our board with respect to our board leadership structure;

•

reviewing and making recommendations to our board with respect to management succession planning;

•

developing and recommending to our board corporate governance principles; and

•

overseeing an annual evaluation of our board.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serves as a member of the board of directors or organization and compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or our organization and compensation committee. None of the members of our organization and compensation committee has ever been our employee.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

This section discusses the principles underlying our policies and decisions with respect to the compensation of our executive officers and the most important factors relevant to an analysis of these policies and decisions. This section also describes the material elements of compensation awarded to, earned by or paid to each of our named executive officers for 2011. Our “named executive officers” for 2011 are Paul R. Edick, our chief executive officer, Corey N. Fishman, our chief operating officer, and Michael Dunne, M.D., our chief medical officer. In addition, this section provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our executive officers and is intended to place in perspective the data presented in the tables and narrative that follow.

We commenced operations in December 2009 and hired each of our named executive officers in 2010. The compensation of each of our current executive officers is based on individual terms approved by our board of directors at the time of hire. Our board of directors has developed and is implementing the executive compensation program that will be in place following this offering. Currently our organization and compensation committee oversees our compensation policies and makes recommendations to our board for approval. Following this offering, our organization and compensation committee will oversee these compensation policies and, together with our board of directors, will periodically evaluate the need for revisions to ensure our compensation program is competitive with the companies with which we compete for executive talent.

Objectives and Philosophy of Our Executive Compensation Program

The primary objectives of the organization and compensation committee with respect to executive compensation are to:

•

attract, retain and motivate experienced and talented executives;

•

ensure executive compensation is aligned with our corporate strategies, research and development programs and business goals;

•

recognize the individual contributions of executives but foster a shared commitment among executives by aligning their individual goals with our corporate goals;

•

promote the achievement of key strategic, development and operational performance measures by linking compensation to the achievement of measurable corporate and individual performance goals; and

•

align the interests of our executives with our stockholders by rewarding performance that leads to the creation of stockholder value.

To achieve these objectives, the organization and compensation committee evaluates our executive compensation program with the goal of setting compensation at levels that are justifiable based on each executive’s level of experience, performance and responsibility and that the committee believes are competitive with those of other companies in our industry and our region that compete with us for executive talent. In addition, our executive compensation program ties a portion of each executive’s overall compensation to the achievement of key corporate and individual goals such as: ongoing clinical trial progress, the start-up of new clinical initiatives, product manufacturing readiness, new formulation development initiatives, employee recruitment and retention, implementation of appropriate financing strategies and establishment and maintenance of key strategic relationships. We also provide a portion of our executive compensation in the form of stock options that vest over time, which we believe helps to retain our executives and aligns their interests with those of our stockholders by allowing them to participate in the longer term success of our company as reflected in stock price appreciation.

Use of Compensation Consultants and Market Benchmarking

Our organization and compensation committee did not engage the services of outside consultants or advisors specific to our company to review and provide advice with respect to our executive officer compensation policies and program for 2010 or 2011. To date, our organization and compensation committee has not identified a specified group of peer companies against which we would compare our compensation practices. However, in reviewing compensation levels of our executive officers for 2010 and 2011, our organization and compensation committee relied on several sources, including its members’ collective knowledge of general compensation trends and standards in our industry and information from a survey of private company compensation covering over 150 companies in the biopharmaceutical industry performed by J. Thelander consulting, or the Thelander survey. Our organization and compensation committee has generally targeted our overall compensation at the 75^th percentile of executive compensation based on the data available from the Thelander survey. Based on a review of our executive compensation program for 2010 and 2011, our board of directors determined that our existing program satisfies our compensation philosophy and objectives.

Following the closing of this offering, our organization and compensation committee will be primarily responsible for developing and implementing our compensation policies and establishing and approving the compensation for all of our executive officers. In connection with designing our ongoing compensation program, our board of directors recently retained the services of Compensia, Inc., or Compensia, an independent compensation consultant, to provide additional comparative data on executive compensation practices in our industry and to advise on our executive compensation program generally. Although our board of directors and organization and compensation committee will consider Compensia’s advice and recommendations about our executive compensation program, the board of directors and organization and compensation committee will ultimately make their own decisions about these matters.

In connection with this offering, Compensia has provided our board of directors and organization and compensation committee with comparative data showing where our total compensation and each element of our compensation rate among both public and private companies in the biotechnology and life sciences industry generally and a peer group of publicly-traded companies in the life science industry at a stage of development, market capitalization and size comparable to ours with which the board of directors and organization and compensation committee believe we compete for executive talent. The companies included in this peer group are:


Aegerion Pharmaceuticals, Inc.		NewLink Genetics Corp.
Anacor Pharmaceuticals, Inc.		NuPathe Inc.
Cempra, Inc.		Pacira Pharmaceuticals, Inc.
ChemoCentryx, Inc		Sagent Pharmaceuticals, Inc.
Clovis Oncology, Inc.		Verastem, Inc.
Endocyte, Inc.		Zogenix, Inc.
Horizon Pharma, Inc.

We also expect that Compensia will make suggestions about our executive compensation practices based on the data it provides to us as well as compensation trends in our industry. We expect that our organization and compensation committee will continue its policy of compensating our named executive officers generally at the 75^th percentile based on the data from these surveys of peer company compensation.

We expect that, following the completion of this offering, our organization and compensation committee will continue to review and evaluate our existing compensation programs, objectives and philosophy to determine whether such programs, objectives and philosophy are appropriate after we have become a public company. In addition, as we gain experience as a public company, we expect that the specific direction, emphasis and components of our executive compensation program will continue to evolve as will the specific companies that comprise our relevant peer group.

Annual Compensation Review Process

During the first calendar quarter of each year, we evaluate each executive’s performance for the prior year. In connection with each annual review cycle, Paul Edick, our chief executive officer, meets with those officers who report directly to him to discuss our accomplishments during the year and the individual’s performance and contributions over the prior year. Based on these discussions, the chief executive officer, with respect to each executive other than himself, prepares a written evaluation based on his evaluation of the executive and input from others within our company. The chief executive officer also prepares his own self assessment as well as a detailed review of company performance against stated corporate goals. This process leads to a recommendation by the chief executive officer to the organization and compensation committee with respect to each executive officer, including himself, as to:

•

the achievement of stated corporate and individual and functional performance goals;

•

the level of contributions made to the general management and guidance of our company;

•

the need for salary increases;

•

the amount of bonuses to be paid; and

•

whether or not stock option awards should be made.

These recommendations are reviewed by the organization and compensation committee and taken into account when it makes a recommendation and final determination on all such matters.

Components of Our Executive Compensation Program

The primary elements of our executive compensation program are:

•

base salary;

•

annual performance-based cash bonuses;

•

equity incentive awards;

•

broad-based health and welfare benefits; and

•

severance and change in control benefits.

We do not, and do not expect in the future to, have a formal or informal policy for allocating between long-term and short-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, our organization and compensation committee, after reviewing data it considers relevant, has determined subjectively what it believes to be the appropriate level and mix of the various compensation components. We expect that our organization and compensation committee also will consider information provided to it by Compensia in making this determination. Ultimately, the objective in allocating between long-term and short-term compensation is to ensure adequate base compensation to attract and retain personnel, while providing incentives to maximize long-term value for our company and our stockholders. Therefore, we provide cash compensation in the form of base salary to meet competitive salary norms and in the form of bonus compensation to incentivize and reward superior performance on an annual basis. To further focus our executives on longer-term performance and the creation of stockholder value, we rely upon equity-based awards that vest over a meaningful period of time. In addition, we provide our executives with benefits that are generally available to all our employees, including health and dental insurance, life and disability insurance and a 401(k) plan. Finally, we offer our executives severance benefits to incentivize them to continue to achieve stockholder value in connection with change in control situations.

We are entering into amended employment agreements with our named executive officers. These employment agreements provide for specific base salaries, target annual bonuses and severance and change of control arrangements for these executive officers. Details of these employment agreements are provided below under the heading “—Employment Agreements.”

Base Salary

We use base salaries to recognize the experience, skills, knowledge and responsibilities of our employees, including our executive officers. Base salaries for our named executive officers typically are established through arm’s-length negotiation at the time the executive is hired, taking into account the individual’s particular background and circumstances, the role for which the executive is being considered and the compensation paid to similar persons in similarly situated companies, the demand for people with the executive’s specific expertise and experience, performance goals and other expectations for the executive’s position, a comparison to our other executives having similar levels of expertise and experience, the executive’s qualifications, prior relevant work experience and compensation paid prior to joining us. None of our executive officers is currently party to an employment agreement that provides for automatic or scheduled increases in base salary. However, on an annual basis, our organization and compensation committee reviews and evaluates, with input from our chief executive officer, the need for adjustment of the base salaries of our executives based on changes and expected changes in the scope of an executive’s role and responsibilities, including promotions, the individual contributions made by and performance of the executive during the prior year, the executive’s performance over a period of years, overall labor market conditions, the relative ease or difficulty of replacing the executive with a well-qualified person, our overall growth and development as a company and general salary trends in our industry. In making decisions regarding salary increases, we may also draw upon the experience of members of our board of directors with other companies as well as all available data as referenced above. No formulaic base salary increases are provided to our named executive officers.

Mr. Edick’s 2011 annual base salary was $455,625 pursuant to the terms of the employment agreement that we entered into with him in July 2010 plus a 1.25% cost of living increase granted by the organization and compensation committee at the end of 2010 based on his time with our company in 2010. Mr. Fishman’s 2011 annual base salary was $303,000 pursuant to the terms of the employment agreement that we entered into with him in August 2010 plus a 1.0% cost of living increase granted by the organization and compensation committee at the end of 2010 based on his time with our company in 2010. Dr. Dunne’s 2011 annual base salary was $287,000 pursuant to the terms of the employment agreement that we entered into with in August 2010 plus a 2.5% cost of living increase granted by the organization and compensation committee at the end of 2010 based on his time with our company in 2010.

Our board of directors has increased the base salaries for our current named executive officers for 2012 based on the criteria stated above, after evaluating 2011 performance. Mr. Edick’s 2012 annual base salary is $470,000, an increase of 3.2% based on performance and general salary trends in our industry. Mr. Fishman’s 2012 annual base salary is $325,000, an increase of 7.3% based on performance and general salary trends in our industry. Dr. Dunne’s 2012 annual base salary is $325,000, an increase of 13.2% based on performance and general salary trends in our industry. We believe that the base salaries established for our named executive officers for 2012 are aligned with our executive compensation objectives stated above.

Annual Performance-Based Cash Bonus

We have designed our annual performance-based cash bonus program to emphasize pay-for-performance and to reward our named executive officers for (1) the achievement of specified annual corporate objectives and (2) the achievement of specified annual individual and functional performance objectives. Each executive officer is eligible to receive an annual performance-based cash bonus, which we refer to as an annual cash bonus, in an amount up to a fixed percentage of his base salary, or bonus percentage, and each of the foregoing elements is weighted in determining the percentage of the annual cash bonus that the executive will receive.

The annual corporate objectives component of the annual cash bonus focuses on the achievement of specific research, clinical, regulatory, operational and financial milestones. The corporate objectives are proposed by senior management each year in our annual operating plan that is reviewed and approved by our board of directors at its regularly scheduled meeting in the fourth quarter of our fiscal year, with such modifications as the board deems appropriate. The annual corporate objectives are developed by our chief executive officer and the senior management team based on an annual plan. These objectives and goals are then reviewed by our chief executive officer and our organization and compensation committee, with such modifications as the committee deems appropriate for achieving the annual corporate objectives, and the committee assigns each corporate objective a weighting reflecting its relative importance to achieving our annual plan. These corporate goals form the basis of the performance evaluation for our chief executive officer and the basis for annual funding of our bonus pool. Our organization and compensation committee has the authority, in the event of exceptional company performance, to authorize the funding of the bonus pool of up to 150%.

The individual and functional component of the annual cash bonus focuses on contributions made by each individual executive officer, other than the chief executive officer, within their respective areas of responsibility that facilitate the achievement of our corporate objectives. Our chief executive officer’s bonus is based entirely on corporate objectives. Each executive officer works with our chief executive officer in developing his own annual individual and functional objectives prior to the start of our fiscal year, which are also reviewed and approved by the organization and compensation committee, with such modifications as the committee deems appropriate. Each of these individual and functional goals are also assigned a weighting, based on their relative importance to achieving our annual corporate performance objectives.

Achievement of the corporate and individual and functional objectives is measured on a percentage achievement basis. Each of our named executive officers, based on the percentage achievement of all individual and functional performance objectives in aggregate, is then eligible for a bonus payout of up to 150% of his target bonus as adjusted by the organization and compensation committee based on achievement of our corporate performance objectives, in the event of exceptional individual or functional performance.

Our organization and compensation committee also has the authority to shift both corporate and individual goals to subsequent fiscal years and eliminate them from the current year’s bonus calculation if it determines that circumstances that were beyond the control of the executive were the primary cause of a goal being unattainable. The corporate, individual and functional objectives established by our board of directors and the organization and compensation committee are designed to require significant effort and operational success on the part of our executives and our company, but also to be achievable with hard work and dedication.

Each of our organization and compensation committee and our board of directors has authority to, in its sole discretion, adjust the bonus percentage each year in connection with its review of the executive’s performance and has authority to allow an executive to receive a bonus payment in excess of his or her annual cash bonus for exceptional performance. Further, our board reviews the assessment of each executive’s performance conducted by the organization and compensation committee with respect to the annual cash bonus and retains the authority, in its sole discretion, to modify the amount of the annual cash bonus above or below the amount recommended by the organization and compensation committee.

For 2011, Mr. Edick was eligible to receive a target annual cash bonus of up to 50% of his 2011 base salary, Mr. Fishman was eligible to receive a target annual cash bonus of up to 35% of his 2011 base salary and Dr. Dunne was eligible to receive a target annual cash bonus of up to 25% of his 2011 base salary.

For 2011, the annual corporate objectives were as follows:

•

the successful initiation of our Phase 3 clinical trials of dalbavancin;

•

the successful manufacture of drug product and active pharmaceutical ingredient for dalbavancin;

•

the completion of our clinical and microbiology development plans;

•

the completion of research into reimbursement and pricing on dalbavancin in the United States and the European Union; and

•

specified business development objectives.

The organization and compensation committee determined that we achieved 90% of the 2011 corporate objectives. In making this determination, the organization and compensation committee considered all of the information available to it at the time and concluded that each executive officer should be allocated 90% of the portion of the annual cash bonus related to the achievement of the annual corporate objectives.

For 2011, the individual and functional goals for each of our named executive officers, other than our chief executive officer, were factored into their annual cash bonus by multiplying their percentage achievement of their individual and functional goals by the percentage achievement of our annual corporate objectives. The individual goals for our named executive officers are primarily related to the corporate goals for which they are most responsible and, to a lesser extent, individual development goals or department specific goals.

For 2011, Mr. Edick’s performance was evaluated solely based on the overall corporate objectives. As a result, Mr. Edick was allocated 90% of his annual target cash bonus.

Mr. Fishman’s individual and functional objectives for 2011 related to filling key positions in our company, managing our budget, successfully managing and arranging manufacturing of our clinical supplies, determining the value of our market opportunity and specified business development objectives. The organization and compensation committee determined that Mr. Fishman achieved 100% of his individual and functional objectives. As a result, Mr. Fishman was allocated 90% his annual target cash bonus.

Dr. Dunne’s individual and functional objectives for 2011 related to the successful conclusion of our Phase 2 clinical trial of dalbavancin, the successful initiation of our ongoing Phase 3 clinical trials of dalbavancin and other clinical objectives. The organization and compensation committee determined that Dr. Dunne achieved 105% of his individual and functional objectives. As a result, Dr. Dunne was allocated 95% of his annual target cash bonus.

The amended employment agreements that we are entering into with our named executive officers provide for the same target bonus percentages for our named executive officers as in 2011, other than Dr. Dunne whose target bonus percentage increased from 25% to 35%.

Equity Incentive Awards

Our equity award program is the primary vehicle for offering long-term incentives to our executives. While we do not have any equity ownership guidelines for our executives, we believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives and our stockholders. Because our executives profit from stock options only if our stock price increases relative to the stock option’s exercise price, we believe stock options provide meaningful incentives to our executives to achieve increases in the value of our stock over time. In addition, the vesting feature of our equity grants contributes to executive retention by providing an incentive to our executives to remain in our employ during the vesting period. Following the closing of this offering, our employees and executives will be eligible to receive stock-based awards pursuant to the 2012 stock incentive plan. Under the 2012 stock incentive plan, executives will be eligible to receive grants of stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights and other stock-based equity awards at the discretion of our organization and compensation committee.

We did not grant our named executive officers any equity awards in 2011. To date, we have used equity awards primarily to compensate our executive officers in the form of initial grants in connection with the commencement of employment. In the future, we also generally plan to grant equity awards on an annual basis to our executive officers. We may also make additional discretionary grants, typically in connection with the promotion of an employee, to reward an employee, for retention purposes or in other circumstances recommended by management. In general, the equity awards that we have granted to our executives vest with

respect to 25% of the shares on the first anniversary of the grant date and with respect to the remaining shares in approximately equal monthly installments through the fourth anniversary of the grant date. Vesting and exercise rights cease shortly after termination of employment. Prior to the exercise of a stock option, the holder has no rights as a stockholder with respect to the shares subject to such option, including voting rights or the right to receive dividends or dividend equivalents.

We have historically granted stock options with exercise prices that are set at no less than the fair market value of shares of our common stock on the date of grant as determined by contemporaneous valuations and reviewed and approved by our audit committee and our board of directors. The exercise price of all stock options granted after the closing of this offering will be equal to the fair market value of shares of our common stock on the date of grant, which generally will be determined by reference to the closing market price of our common stock on the date of grant. Following this offering, we intend to grant equity awards annually to our executive officers.

In April 2012, our board of directors approved the grant of options under our existing stock incentive plan to our named executive officers. Each of these options vests in approximately equal monthly installments over four years and has an exercise price of $1.25 per share. The following table sets forth the number of shares of common stock issuable upon exercise of the stock options granted to our named executive officers in April 2012:


Name		Number of Shares of Common Stock Underlying Stock Option
Paul R. Edick		337,871
Corey N. Fishman		172,589
Michael W. Dunne		150,802

In April 2012, our board of directors approved the grant of additional options under our existing stock incentive plan to our named executive officers. Each of these options will only begin vesting after the closing of this offering and will vest monthly over 48 months with (1) 0.8333% of the option vesting on each of the first 12 monthly vesting dates, (2) 1.667% of the option vesting on each of the next 12 monthly vesting dates, (3) 2.5% of the option vesting on each of the next 12 monthly vesting dates and (4) 3.333% of the option vesting on each of the next 12 monthly vesting dates. Each of these options has an exercise price of $1.25 per share. The following table sets forth the number of shares of common stock issuable upon exercise of the stock options granted to our named executive officers in April 2012, the vesting of which is subject to the closing of this offering:


Name	Number of Shares of Common Stock Underlying Stock Option
Paul R. Edick		100,000
Corey N. Fishman		100,000
Michael W. Dunne		100,000

Benefits and Other Compensation

We believe that establishing competitive benefit packages for our employees is an important factor in attracting and retaining highly qualified personnel. We maintain broad-based benefits that are provided to all employees, including medical, dental, group life insurance, accidental death, dismemberment insurance, long and short term disability insurance, and a 401(k) plan. All of our executives are eligible to participate in all of our employee benefit plans, in each case on the same basis as other employees. Consistent with our compensation philosophy, we intend to continue to maintain our current benefits for our named executive officers. The organization and compensation committee in its discretion may revise, amend or add to the named executive officer’s benefits and perquisites if it deems it advisable.

In certain circumstances, we may award cash signing bonuses or may reimburse relocation expenses when executives first join us. Whether a signing bonus is paid or relocation expenses are reimbursed, and the amount of either such benefit, is determined by our chief executive officer on a case-by-case basis.

Severance and Change in Control Benefits

Pursuant to amended employment agreements that we are entering into with our named executive officers, these executives are entitled to specified benefits in the event of the termination of their employment under specified circumstances, including termination following a change in control of our company. These benefits are described in more detail below under the heading “—Employment Agreements.”

We believe providing these benefits helps us compete for executive talent. Based on the substantial business experience of the members of our board of directors and in consultation with Compensia, we believe that our severance and change in control benefits are generally in line with severance packages offered to executives by companies at comparable stages of development in our industry and related industries.

We have structured our change in control benefits as “double trigger” benefits. In other words, the change in control does not itself trigger benefits. Rather, benefits are paid only if the employment of the executive is terminated during a specified period in connection with the change in control. We believe a “double trigger” benefit maximizes stockholder value because it prevents an unintended windfall to executives in the event of a friendly change in control, while still providing them appropriate incentives to cooperate in negotiating any change in control in which they believe they may lose their jobs.

Risk Considerations in Our Compensation Program

Our organization and compensation committee has reviewed and evaluated the philosophy and standards on which our compensation plans have been developed and implemented across our company. It is our belief that our compensation programs do not encourage inappropriate actions or risk taking by our executive officers. We do not believe that any risks arising from our employee compensation policies and practices are reasonably likely to have a material adverse effect on our company. In addition, we do not believe that the mix and design of the components of our executive compensation program encourage management to assume excessive risks.

We believe that our current business process and planning cycle fosters the following behaviors and controls that mitigate the potential for adverse risk caused by the action of our executives:

•

annual establishment of corporate and individual and functional objectives for our annual cash bonus program for our executive officers that are consistent with our annual operating and strategic plans, that are designed to achieve the proper risk/reward balance, and that should not require excessive risk taking to achieve;

•

the mix between fixed and variable, annual and long-term and cash and equity compensation are designed to encourage strategies and actions that balance our short-term and long-term best interests; and

•

stock option awards vest over a period of time, which we believe encourages executives to take a long-term view of our business.

Tax and Accounting Considerations

Section 162(m) of the Internal Revenue Code of 1986, as amended, which will become applicable to us upon the closing of this offering, generally disallows a tax deduction for compensation in excess of $1.0 million paid to our chief executive officer and certain of our other most highly paid executive officers. Qualifying performance-based compensation is not subject to the deduction limitation if specified requirements are met. We periodically review the potential consequences of Section 162(m) and we generally intend to structure the

performance-based portion of our executive compensation, where feasible, to comply with exemptions in Section 162(m) so that the compensation will remain tax deductible to us. However, the organization and compensation committee may, in its judgment, authorize compensation payments that do not comply with the exemptions in Section 162(m) when it believes that such payments are appropriate to attract and retain executive talent and are in the best interests of our stockholders.

We account for equity compensation paid to our employees in accordance with Financial Accounting Standards Board, or FASB, Accounting Standard Codification, or ASC, Topic 718, which requires us to measure and recognize compensation expense in our financial statements for all share-based payments based on an estimate of their fair value over the service period of the award. We record cash compensation as an expense at the time the obligation is accrued.

100

Summary Compensation Table

The following table sets forth the total compensation awarded to, earned by or paid to our named executive officers during 2011.


Name and Principal Position	Year		Salary ($)		Non-Equity Incentive Plan Compensation ($) (1)		All Other Compensation ($) (2)		Total ($)
Paul R. Edick (3)		2011		455,156		204,820		1,363		661,340
Chief Executive Officer

Corey N. Fishman		2011		302,750		95,366		1,363		399,479
Chief Operating Officer

Michael W. Dunne		2011		286,416		68,024		1,271		355,712
Chief Medical Officer

(1)	The amounts in the “Non-Equity Incentive Plan Compensation” column represent awards to our named executive officers under our annual bonus program. Annual bonus compensation for 2011 was paid in 2012.

(2)	Amounts represent the value of group term life insurance premium.

(3)	Mr. Edick is also a member of our board of directors, but does not receive any additional compensation in his capacity as a director.

101

Outstanding Equity Awards at December 31, 2011

The following table sets forth information regarding outstanding stock options held by our named executive officers as of December 31, 2011.


Name	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)			Option Exercise Price ($/Share)		Option Expiration Date
Paul R. Edick		1,859,375		3,390,625	(1)		0.12	7/1/2020
Corey N. Fishman		583,333		1,166,667	(2)		0.12	8/14/2020
Michael W. Dunne		1,125,000		1,125,000	(3)		0.12	5/23/2020

(1)	The unvested shares under this option are scheduled to vest in approximately equal monthly installments through July 2014.

(2)	The unvested shares under this option are scheduled to vest in approximately equal monthly installments through August 2014.

(3)	The unvested shares under this option are scheduled to vest in approximately equal monthly installments through December 2013.

Pension Benefits

We do not maintain any defined benefit pension plans.

Nonqualified Deferred Compensation

We do not maintain any nonqualified deferred compensation plans.

Employment Agreements

In connection with the commencement of their employment with us, we entered into employment agreements with each of Mr. Edick, Mr. Fishman and Dr. Dunne. We are entering into amended and restated employment agreements with each of these executive officers. Each of these employment agreements provides that employment will continue for a specified term until either we or the employee provides written notice of termination in accordance with the terms of the agreement. In addition, each of these executive officers is prevented by the terms of their amended and restated employment agreement from disclosing confidential information and competing with us during the term of their employment and for a specified time thereafter.

Pursuant to the terms of their amended employment agreements, Mr. Edick, Mr. Fishman and Dr. Dunne will receive the following base salaries and will be eligible for the following bonus percentages.


Name	Annual Base Salary		Bonus Percentage
Paul R. Edick	$	470,000	50%
Corey N. Fishman		325,000	35
Michael W. Dunne		325,000	35

Upon execution and effectiveness of a release of claims, each of Mr. Edick, Mr. Fishman and Dr. Dunne will be entitled to severance payments if his employment is terminated under specified circumstances.

If Mr. Edick, Mr. Fishman or Dr. Dunne’s employment is terminated without cause, as defined in the employment agreement, absent a change in control, as defined in the employment agreement, we will be obligated (1) to pay an amount equal to his monthly base salary for a period of 18 months in the case of Mr. Edick and 12 months in the case of Mr. Fishman and Dr. Dunne and (2) to the extent allowed by applicable law and the applicable plan documents, continue to provide to such executive officer all company employee benefit plans and arrangements that he was receiving at the time of termination for 18 months in the case of Mr. Edick and 12 months in the case of Mr. Fishman and Dr. Dunne.

102

If we terminate Mr. Edick, Mr. Fishman or Dr. Dunne’s employment without cause or if Mr. Edick, Mr. Fishman or Dr. Dunne terminates employment with us for good reason, as defined in the employment agreement, in each case within two months prior to, or 12 months following, a change in control, we will be obligated (1) to pay an amount equal to his monthly base salary for a period of 24 months in the case of Mr. Edick and 12 months in the case of Mr. Fishman and Dr. Dunne, (2) accelerate in full the vesting of all outstanding equity awards and (3) to the extent allowed by applicable law and the applicable plan documents, continue to provide to such executive officer all company employee benefit plans and arrangements that he was receiving at the time of termination for 18 months in the case of Mr. Edick and 12 months in the case of Mr. Fishman and Dr. Dunne.

To the extent that any severance or other compensation payment to Mr. Edick, Mr. Fishman or Dr. Dunne pursuant to his employment agreement or any other agreement constitutes an “excess parachute payment” within the meaning of Sections 280G and 4999 of the Internal Revenue Code, then Mr. Edick, Mr. Fishman or Dr. Dunne will receive the full amount of such severance and other payments, or a reduced amount intended to avoid the application of Sections 280G and 4999, whichever provides the executive with the highest amount on an after-tax basis.

Stock Option and Other Employee Benefit Plans

The two stock incentive plans described in this section are our existing stock incentive plan, which we refer to as our pre-IPO stock incentive plan, and the 2012 stock incentive plan. Prior to this offering, we granted awards to eligible participants under our pre-IPO stock incentive plan. Following the closing of this offering, we expect to grant awards to eligible participants under the 2012 stock incentive plan, which we expect to adopt prior to the closing of this offering.

2012 Stock Incentive Plan

In April 2012 our board of directors adopted and our stockholders approved the 2012 stock incentive plan, which will become effective immediately prior to the closing of this offering. The 2012 stock incentive plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. Upon effectiveness of the plan, the number of shares of our common stock that will be reserved for issuance under the 2012 stock incentive plan will be the sum of (1) 6,150,000 shares plus (2) the number of shares (up to 17,000,000 shares) equal to the sum of the number of shares of our common stock then available for issuance under our pre-IPO stock incentive plan and the number of shares of our common stock subject to outstanding awards under our pre-IPO stock incentive plan, that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of fiscal year 2014 and each subsequent anniversary until the expiration of the 2012 stock incentive plan, equal to the lowest of 3,500,000 shares of our common stock, 2.75% of the number of shares of our common stock outstanding on the first day of the fiscal year and an amount determined by our board of directors.

Our employees, officers, directors, consultants and advisors are eligible to receive awards under the 2012 stock incentive plan. However, incentive stock options may only be granted to our employees. The maximum number of shares of our common stock with respect to which awards may be granted to any participant under the 2012 stock incentive plan is 5,000,000 per calendar year. For purposes of this limit on the maximum number of shares that may be awarded to any participant, the combination of an option in tandem with a stock appreciation right will be treated as a single award.

103

Pursuant to the terms of the 2012 stock incentive, our board of directors administers the plan and, subject to any limitations in the plan, selects the recipients of awards and determines:

•

the number of shares of our common stock covered by options and the dates upon which the options become exercisable;

•

the type of options to be granted;

•

the duration of options, which may not be in excess of ten years;

•

the exercise price of options; and

•

the number of shares of our common stock subject to any stock appreciation rights, restricted stock awards, restricted stock units or other stock-based awards and the terms and conditions of such awards, including conditions for repurchase, issue price and repurchase price.

If our board of directors delegates authority to an executive officer to grant awards under the 2012 stock incentive plan, the executive officer has the power to make awards to all of our employees, except executive officers. Our board of directors will fix the terms of the awards to be granted by such executive officer, including the exercise price of such awards, and the maximum number of shares subject to awards that such executive officer may make.

Upon a merger or other reorganization event, our board of directors may, in its sole discretion, take any one or more of the following actions pursuant to the 2012 stock incentive plan as to some or all outstanding awards other than restricted stock:

•

provide that all outstanding awards shall be assumed, or substantially equivalent awards shall be substituted, by the acquiring or successor corporation (or an affiliate thereof);

•

upon written notice to a participant, provide that all of the participant’s unexercised awards will terminate immediately prior to the consummation of such reorganization event unless exercised by the participant;

•

provide that outstanding awards shall become exercisable, realizable or deliverable, or restrictions applicable to an award shall lapse, in whole or in part, prior to or upon such reorganization event;

•

in the event of a reorganization event pursuant to which holders of shares of our common stock will receive a cash payment for each share surrendered in the reorganization event, make or provide for a cash payment to the participants with respect to each award held by a participant equal to (1) the number of shares of common stock subject to the vested portion of the award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such reorganization event) multiplied by (2) the excess, if any, of the cash payment for each share surrendered in the reorganization event over the exercise, measurement or purchase price of such award and any applicable tax withholdings, in exchange for the termination of such award;

•

provide that, in connection with a liquidation or dissolution, awards shall convert into the right to receive liquidation proceeds.

In the case of certain restricted stock units, no assumption or substitution is permitted, and the restricted stock units will instead be settled in accordance with the terms of the applicable restricted stock unit agreement.

Upon the occurrence of a reorganization event other than a liquidation or dissolution, the repurchase and other rights with respect to outstanding restricted stock will continue for the benefit of the successor company and will, unless the board of directors may otherwise determine, apply to the cash, securities or other property into which shares of our common stock are converted or exchanged pursuant to the reorganization event. Upon the occurrence of a reorganization event involving a liquidation or dissolution, all restrictions and conditions on each outstanding restricted stock award will automatically be deemed terminated or satisfied, unless otherwise provided in the agreement evidencing the restricted stock award.

104

At any time, our board of directors may, in its sole discretion, provide that any award under the 2012 stock incentive plan will become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part.

No award may be granted under the 2012 stock incentive plan on or after , 2022. Our board of directors may amend, suspend or terminate the 2012 stock incentive plan at any time, except that stockholder approval will be required to comply with applicable law or stock market requirements.

Pre-IPO Stock Incentive Plan

Upon the closing of this offering and the approval of the 2012 stock incentive plan, we do not expect to grant any additional awards under our pre-IPO stock incentive plan.

Our pre-IPO stock incentive plan is administered by our board of directors and provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code, non-statutory stock options, stock awards, restricted stock awards and stock appreciation rights. Our employees, directors, consultants and advisors are eligible to receive awards and stock appreciation rights under our pre-IPO stock incentive plan. However, incentive stock options may only be granted to our employees. The terms of awards are set forth in the applicable award agreements. The number of shares of our common stock that are reserved for issuance as of March 31, 2012 under our pre-IPO stock incentive plan is 1,425,000, subject to adjustment as provided below.

Upon the occurrence of any of the following:

•

reclassification, recapitalization, stock split (including in the form of a stock dividend), or reverse stock split;

•

merger, combination, consolidation, or other reorganization;

•

split-up, spin-off, or similar extraordinary dividend distribution in respect of the common stock;

•

exchange of the common stock or other of our securities; or

•

any similar, unusual, or extraordinary corporate transaction in respect of the common stock;

the administrator shall equitably and proportionately adjust:

•

the number and type of shares of common stock or other securities that thereafter may be made in the subject of awards;

•

the number, amount, and type of shares of common stock or other securities or property that are subject to any outstanding awards;

•

the grant, purchase, or exercise or base price of any outstanding awards; and/or

•

the securities, cash, or other property deliverable upon exercise or vesting of any outstanding awards.

In each case, such adjustments are authorized to the extent necessary to preserve but not increase the level of incentives intended by the plan and the then-outstanding awards. Unless otherwise expressly provided in the applicable award agreement, the administrator shall, subject to the foregoing limitation, also equitably and proportionately adjust the performance standards applicable to any then-outstanding performance-based awards.

Upon a change in control event, as defined in our pre-IPO stock incentive plan, each then-outstanding award (whether or not vested and/or exercisable) shall terminate, subject to (1) reasonable advance notice of the impending termination and a reasonable opportunity to exercise any outstanding and vested awards in accordance with their terms and (2) any provision that has been expressly made by the administrator. The administrator may

105

make provision for a cash payment in settlement of, or for the assumption, substitution, or exchange of any or all outstanding awards (or the cash, securities, or other property deliverable to the participants with respect to any or all outstanding awards) based upon the distribution or consideration payable to holders of the common stock upon or in respect of such a change in control event.

The administrator may, in its sole discretion, provide in any applicable award agreement or by an amendment thereto for the accelerated vesting of one or more awards to the extent such awards are outstanding upon a change in control event (or such other circumstances as the administrator may provide). The administrator may take such action to the extent that the administrator deems the action necessary to permit the participant to realize the benefits intended to be conveyed with respect to the underlying shares.

At any time, the administrator may, in its sole discretion, provide that any award under our pre-IPO stock incentive plan will become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part. The administrator may also extend the vesting or exercisability or extend the term of any or all outstanding awards in such circumstances as the administrator deems appropriate. In the event of, or in anticipation of, a termination of employment or service with us for any reason, the administrator may accelerate the vesting and exercisability of all or a portion of the participant’s award, and/or, subject to certain limitations, extend the exercisability period of the participant’s award upon such terms as the administrator and the participant agree.

As of March 31, 2012, under our pre-IPO stock incentive plan, there were options to purchase an aggregate of 13,075,000 shares of common stock at a weighted average exercise price of $0.14 per share and an aggregate of 500,000 shares of restricted common stock. If the 2012 stock incentive plan is approved by our stockholders, we will grant no further stock options or other awards under our pre-IPO stock incentive plan. However, any shares of common stock reserved for issuance under our pre-IPO stock incentive plan that remain available for issuance and any shares of common stock subject to awards under our pre-IPO stock incentive plan that expire, terminate, or are otherwise surrendered, canceled, forfeited or repurchased without having been fully exercised or resulting in any common stock being issued will be available for issuance under the 2012 stock incentive plan up to specified number of shares.

401(k) Retirement Plan

We maintain a defined contribution employee retirement plan for our employees. Our 401(k) plan is intended to qualify as a tax-qualified plan under Section 401 of the Internal Revenue Code so that contributions to our 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan. Our 401(k) plan provides that each participant may contribute up to 100% of his or her pre-tax compensation, up to a statutory limit, which is $16,500 for 2011 and $17,000 for 2012. Participants who are at least 50 years old can also make “catch-up” contributions, which in 2011 and 2012 may be up to an additional $5,500 above the statutory limit. Under our 401(k) plan, each employee is fully vested in his or her deferred salary contributions. Employee contributions are held and invested by the plan’s trustee, subject to Participants’ ability to give investment directions by following certain procedures. Our 401(k) plan also permits us to make discretionary contributions and matching contributions, subject to established limits and a vesting schedule.

Limitation of Liability and Indemnification

Our certificate of incorporation, which will become effective upon the closing of this offering, limits the personal liability of directors for breach of fiduciary duty to the maximum extent permitted by the Delaware General Corporation Law and provides that no director will have personal liability to us or to our stockholders for monetary damages for breach of fiduciary duty or other duty as a director. However, these provisions do not eliminate or limit the liability of any of our directors:

•

for any breach of the director’s duty of loyalty to us or our stockholders;

•

for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

106

•

for voting or assenting to unlawful payments of dividends, stock repurchases or other distributions; or

•

for any transaction from which the director derived an improper personal benefit.

Any amendment to or repeal of these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to such amendment or repeal. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware General Corporation Law.

In addition, our certificate of incorporation, which will become effective upon the closing of this offering, provides that we must indemnify our directors and officers and we must advance expenses, including attorneys’ fees, to our directors and officers in connection with legal proceedings, subject to very limited exceptions.

We maintain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers. In addition, we have entered into indemnification agreements with certain of our directors, and we intend to enter into indemnification agreements with all of our directors and executive officers. These indemnification agreements may require us, among other things, to indemnify each such director for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by him in any action or proceeding arising out of his service as one of our directors.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

Rule 10b5-1 Sales Plans

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from the director or officer. The director or officer may amend or terminate the plan in some circumstances. Our directors and executive officers may also buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.

Director Compensation

During 2011, we did not pay cash compensation to any non-employee director for his service as a director.

We have historically reimbursed our non-employee directors for reasonable travel and other expenses incurred in connection with attending board of director and committee meetings.

We have granted the following equity awards as compensation to certain of our directors.

•

In July 2010, in recognition of his service as our chief executive officer and as a director, we granted Mr. Edick an option to purchase 5,250,000 shares of our common stock. This option vested with respect to 25% of the shares on the first anniversary of the grant date and vests with respect to the remaining shares in approximately equal monthly installments through the fourth anniversary of the grant date. The exercise price of this option is $0.12 per share, the fair value of our common stock on the date of grant as determined by our board of directors, without giving effect to our reassessment of fair value for financial reporting purposes.

•

In March 2010, in recognition of his service as a director, we granted Mr. Horner an option to purchase 250,000 shares of our common stock. This option vested with respect to 6.25% of the shares on the grant date and vests with respect to the remaining shares in 45 approximately equal monthly

107

installments. The exercise price of this option is $0.12 per share, the fair value of our common stock on the date of grant as determined by our board of directors, without giving effect to our reassessment of fair value for financial reporting purposes.

•

In February 2012, in recognition of their service as directors, we granted an option to purchase 50,000 shares of our common stock to each of Dr. Goldstein, Mr. Ahrens, Ms. Vitullo, Mr. Hunt and Dr. Healy. Each option vests in approximately equal monthly installments from the grant date through the third anniversary of the grant date. The exercise price of each option is $0.26 per share, the fair value of our common stock on the date of grant as determined by our board of directors, without giving effect to our reassessment of fair value for financial reporting purposes.

•

In April 2012, in recognition of their service as directors, we granted Mr. De Schutter an option to purchase 70,000 shares of our common stock and Mr. O’Boyle an option to purchase 50,000 shares of our common stock. These options vest in approximately equal monthly installments from the grant date through the third anniversary of the grant date. The exercise price of each option is $1.25 per share, the fair value of our common stock on the date of grant as determined by our board of directors.

•

In April 2012, in recognition of their service as directors, we granted Mr. De Schutter an additional option to purchase 25,000 shares of our common stock and Mr. O’Boyle an additional option to purchase 15,000 shares of our common stock. These options vest in approximately equal monthly installments from the grant date through the first anniversary of the grant date. The exercise price of each option is $1.25 per share, the fair value of our common stock on the date of grant as determined by our board of directors.

During 2011, we did not grant equity awards as compensation to any of our directors.

Effective upon the effectiveness of the registration statement of which this prospectus forms a part, our non-employee directors who are not affiliated with our current principal stockholders, or our outside directors, will be compensated for service on our board of directors as follows:

•

an annual fee for service on our board of directors of $30,000;

•

for the chairman of our board of directors, an additional annual fee of $15,000;

•

for any newly elected outside director, a commencement stock option grant of 50,000 shares of our common stock;

•

for any newly elected chairman of our board of directors, an additional commencement stock option grant of 20,000 shares of our common stock;

•

an annual stock option grant for continuing service on our board of directors of 15,000 shares of our common stock;

•

for the chairman of our board of directors, an additional annual stock option grant of 10,000 shares of our common stock;

•

for members of the audit committee:

•

an annual fee of $5,000 ($15,000 for the chair);

•

a commencement stock option grant of 7,500 shares of our common stock (15,000 for the chair); and

•

an annual stock option grant of 5,000 shares of our common stock (10,000 for the chair);

•

for members of the organization and compensation committee:

•

an annual fee of $5,000 ($7,500 for the chair);

108

•

a commencement stock option grant of 7,500 shares of our common stock (10,000 for the chair); and

•

an annual stock option grant of 5,000 shares of our common stock (5,000 for the chair); and

•

for members of the nominating and corporate governance committee:

•

an annual fee of $2,500 ($5,000 for the chair);

•

a commencement stock option grant of 2,500 shares of our common stock (5,000 for the chair); and

•

an annual stock option grant of 2,500 shares of our common stock (5,000 for the chair).

In addition, we will continue to reimburse our non-employee directors for reasonable travel and other expenses incurred in connection with attending board of director and committee meetings.

109

TRANSACTIONS WITH RELATED PERSONS

Since our incorporation in November 2009, we have engaged in the following transactions with our directors, executive officers, holders of more than 5% of our voting securities, and affiliates of our directors, executive officers and holders of more than 5% of our voting securities. We believe that all of these transactions were on terms as favorable as could have been obtained from unrelated third parties.

Series A Preferred Stock Financings

Since our incorporation in November 2009, we have issued and sold an aggregate of 77,197,936 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $77,197,936. The following table sets forth the date of issuance and aggregate number of shares and purchase price for each issuance of our series A preferred stock:


Date	Shares of Series A Preferred Stock		Aggregate Purchase Price
March 2012		22,000,000	$	22,000,000
August 2011		22,000,000		22,000,000
January 2011		13,999,999		13,999,999
November 2010		115,592		115,592
July 2010		5,000,000		5,000,000
May 2010		82,353		82,353
December 2009		13,999,992		13,999,992

The following table sets forth the aggregate number of shares of our series A preferred stock that we have issued to our directors, executive officers, 5% stockholders, and their affiliates since our incorporation.


Name (1)	Shares of Series A Preferred Stock
5% Stockholders:
Domain Associates (2)		17,953,008
New Leaf Ventures II, L.P. (3)		17,953,008
Aisling Capital III, LP (4)		16,157,707
Sofinnova Venture Partners VII, L.P. (5)		13,464,758
Canaan VIII L.P. (6)		10,771,804
Directors and Executive Officers:
George Horner III		448,825
Corey Fishman		179,531
Paul Edick		157,088
Michael Dunne, M.D.		89,764

(1)	See “Principal Stockholders” for more information about shares held by these directors, executive officers, stockholders, and their affiliates.

(2)

Consists of (a) 17,820,774 shares purchased by Domain Partners VIII, L.P., and (b) 132,234 shares purchased by DP VIII Associates, L.P. Nicole Vitullo, a member of our board of directors is a managing member of One Palmer Square Associates VIII, L.L.C., the general partner of Domain Partners VIII, L.P. and DP VIII Associates, L.P.

(3)	Ronald M. Hunt, a member of our board of directors, is a member of the investment committee of New Leaf Venture Associates II, L.P., which is the General Partner of New Leaf Ventures II, L.P.

(4)	Dov A. Goldstein, a member of our board of directors, is a member of the investment committee of Aisling Capital Partners III, LP, which is the general partner of Aisling Capital III, LP.

110

(5)	James I. Healy, a member of our board of directors, is a managing member of Sofinnova Management VII, L.L.C., which is the general partner of Sofinnova Venture Partners VII, L.P.

(6)	Brenton K. Ahrens, a member of our board of directors, is a manager of Canaan Partners VIII LLC, the General Partner of Canaan VIII L.P.

Restricted Stock Grant to Related Party

In December 2009, in connection with our start-up activities, we issued an aggregate of 500,000 shares of our common stock to Jeremy Lack. At the time we issued the shares to Mr. Lack, he was a Principal at New Leaf Venture Partners, which is one of our 5% stockholders. Mr. Lack’s shares were subject to forfeiture by Mr. Lack pursuant to a restricted stock agreement between Mr. Lack and us. On January 25, 2011, the organization and compensation committee recommended and the board of directors approved the immediate vesting of all of Mr. Lack’s restricted shares.

Registration Rights

We are a party to an investor rights agreement with holders of our series A preferred stock, including some of our directors, executive officers and 5% stockholders and their affiliates and entities affiliated with our directors. The investor rights agreement provides these holders the right, following the completion of this offering, to demand that we file a registration statement or to request that their shares be covered by a registration statement that we are otherwise filing. See “Description of Capital Stock—Registration Rights” for additional information regarding these registration rights.

Indemnification Agreements

Our certificate of incorporation, which will become effective upon the closing of this offering, provides that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. In addition, we intend to enter into indemnification agreements with our directors. See “Executive Compensation—Limitation of Liability and Indemnification” for additional information regarding these agreements.

Policies and Procedures for Related Person Transactions

Our board of directors has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which Durata is a participant, the amount involved exceeds $120,000 and one of our executive officers, directors, director nominees or 5% stockholders, or their immediate family members, each of whom we refer to as a “related person,” has a direct or indirect material interest.

If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related person transaction,” the related person must report the proposed related person transaction to our chief operating officer or principal financial officer. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the committee will review, and, in its discretion, may ratify the related person transaction. The policy also permits the chairman of the committee to review and, if deemed appropriate, approve proposed related person transactions that arise between committee meetings, subject to ratification by the committee at its next meeting. Any related person transactions that are ongoing in nature will be reviewed annually.

A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the committee after full disclosure of the related person’s interest in the transaction. As appropriate for the circumstances, the committee will review and consider:

•

the related person’s interest in the related person transaction;

•

the approximate dollar value of the amount involved in the related person transaction;

111

•

the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;

•

whether the transaction was undertaken in the ordinary course of our business;

•

whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party;

•

the purpose of, and the potential benefits to us of, the transaction; and

•

any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.

The committee may approve or ratify the transaction only if the committee determines that, under all of the circumstances, the transaction is in Durata’s best interests. The committee may impose any conditions on the related person transaction that it deems appropriate.

In addition to the transactions that are excluded by the instructions to the SEC’s related person transaction disclosure rule, our board of directors has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:

•

interests arising solely from the related person’s position as an executive officer of another entity (whether or not the person is also a director of such entity), that is a participant in the transaction, where (a) the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, (b) the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction and (c) the amount involved in the transaction is less than the greater of $200,000 or 5% of the annual gross revenues of the company receiving payment under the transaction; and

•

a transaction that is specifically contemplated by provisions of our charter or by-laws.

The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by the compensation committee in the manner specified in its charter.

We did not have a written policy regarding the review and approval of related person transactions prior to this offering. Nevertheless, with respect to such transactions, it was our policy for our board of directors to consider the nature of and business reason for such transactions, how the terms of such transactions compared to those which might be obtained from unaffiliated third parties and whether such transactions were otherwise fair to and in the best interests of, or not contrary to, our best interests. In addition, all related person transactions required prior approval, or later ratification, by our board of directors.

112

PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial ownership of our common stock as of March 31, 2012 by:

•

each of our directors;

•

each of our named executive officers;

•

all of our directors and executive officers as a group; and

•

each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock.

The column entitled “Percentage of Shares Beneficially Owned—Before Offering” is based on a total of 77,697,936 shares of our common stock outstanding as of March 31, 2012, assuming the conversion of all outstanding shares of our preferred stock into an aggregate of 77,197,936 shares of our common stock upon the closing of this offering. The column entitled “Percentage of Shares Beneficially Owned—After Offering” is based on shares of our common stock to be outstanding after this offering, including the shares of our common stock that we are selling in this offering, but not including any additional shares issuable upon exercise of outstanding options.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of March 31, 2012 are considered outstanding and beneficially owned by the person holding the options for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, the persons and entities in this table have sole voting and investing power with respect to all of the shares of our common stock beneficially owned by them, subject to community property laws, where applicable. Except as otherwise set forth below, the address of the beneficial owner is c/o Durata Therapeutics, Inc., 89 Headquarters Plaza North, 14th Floor, Morristown, New Jersey 07960.


Name and Address of Beneficial Owner	Number of Shares Beneficially Owned		Percentage of Shares Beneficially Owned
Name and Address of Beneficial Owner	Number of Shares Beneficially Owned		Before Offering			After Offering
5% Stockholders:
Domain Associates (1)		17,953,008		23.1	%
New Leaf Ventures II, L.P. (2)		17,953,008		23.1
Aisling Capital III, LP (3)		16,157,707		20.8
Sofinnova Venture Partners VII, L.P. (4)		13,464,758		17.3
Canaan VIII L.P. (5)		10,771,804		13.9

Directors and Named Executive Officers:
Paul R. Edick (6)		2,517,313		3.1
Corey N. Fishman (7)		941,058		1.2
Michael W. Dunne, M.D. (8)		1,430,539		1.8
Brenton K. Ahrens (9)		10,775,968		13.9
Richard U. De Schutter (10)		4,027		*
Dov A. Goldstein, M.D. (11)		16,161,871		20.8
James I. Healy, M.D., Ph.D. (12)		13,468,922		17.3
George F. Horner III (13)		580,542		*
Ronald M. Hunt (14)		17,957,172		23.1
Kevin C. O’Boyle (15)		2,638		*
Nicole Vitullo (16)		17,957,172		23.1
All current executive officers and directors as a group (12 persons) (17)		81,665,063		99.4

*	Represents beneficial ownership of less than one percent of our outstanding common stock.

113

(1)

The address for the Domain Associates funds is One Palmer Square, Suite 515, Princeton, New Jersey, 08542. Consists of (a) 17,820,774 shares of common stock issuable upon conversion of shares of series A preferred stock held by Domain Partners VIII, L.P., and (b) 132,234 shares of common stock issuable upon conversion of shares of series A preferred stock held by DP VIII Associates, L.P. James C. Blair, Brian H. Dovey, Jesse I. Treu, Kathleen K. Schoemaker, Brian K. Halak and Nicole Vitullo, the managing members of One Palmer Square Associates VIII, L.L.C., the general partner of Domain Partners VIII, L.P. and DP VIII Associates, L.P., share the power to vote or dispose of these shares and therefore each of the foregoing managing members may be deemed to have voting and investment power with respect to such shares. Each of the foregoing managing members disclaims beneficial ownership of such shares except to the extent of their pecuniary interest therein, if any. Ms. Vitullo is a member of our board of directors.

(2)

The address for New Leaf Ventures II, L.P. is 7 Times Square, Suite 3502, New York, New York, 10036. Consists of 17,953,008 shares of common stock issuable upon conversion of shares of series A preferred stock. Srinivas Akkaraju, Philippe O. Chambon, Jeani Delagardelle, Ronald M. Hunt, Vijay K. Lathi, and James Niedel, the members of the investment committee of New Leaf Venture Associates II, L.P., which is the General Partner of New Leaf Ventures II, L.P., have the power to vote or dispose of these shares and therefore each of the foregoing members of the investment committee may be deemed to have voting and investment power with respect to such shares. Each of the foregoing members of the investment committee disclaims beneficial ownership of such shares except to the extent of their pecuniary interest therein, if any. Mr. Hunt is a member of our board of directors.

(3)

The address for Aisling Capital III, LP is 888 7th Avenue, 30th Floor, New York, New York, 10106. Consists of 16,157,707 shares of common stock issuable upon conversion of shares of series A preferred stock. Dov A. Goldstein and five other persons on the investment committee of Aisling Capital Partners III, LP, which is the general partner of Aisling Capital III, LP, share the power to vote or dispose of these shares and therefore each member may be deemed to have voting and investment power with respect to such shares. Each of the members disclaims beneficial ownership of such shares except to the extent of their pecuniary interest therein, if any. Dr. Goldstein is a member of our board of directors.

(4)

The address for Sofinnova Venture Partners VII, L.P. is 2800 Sand Hill Road, Suite 150, Menlo Park, California, 94025. Consists of 13,464,758 shares of common stock issuable upon conversion of shares of series A preferred stock. James I. Healy and the other managing members of Sofinnova Management VII, L.L.C., which is the general partner of Sofinnova Venture Partners VII, L.P., share the power to vote or dispose of these shares and therefore may be deemed to have voting and investment power with respect to such shares. Each of the managing members disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein, if any. Dr. Healy is a member of our board of directors.

(5)

The address for Canaan VIII L.P. is 285 Riverside Avenue, Suite 250, Westport, Connecticut, 06880. Consists of 10,771,804 shares of common stock issuable upon conversion of shares of series A preferred stock. Brenton K. Ahrens, John V. Balen, Stephen M. Bloch, Wende Hutton, Maha S. Ibrahim, Alok Mittal, Deepak Kamra, Guy M. Russo, Izhar Shay, and Eric A. Young, the managers of Canaan Partners VIII LLC, the General Partner of Canaan VIII L.P., share the power to vote or dispose of these shares and therefore each of the foregoing managers may be deemed to have voting and investment power with respect to such shares. Each of the foregoing managers disclaims beneficial ownership of such shares except to the extent of their pecuniary interest therein, if any. Mr. Ahrens is a member of our board of directors.

(6)	Consists of (i) 157,088 shares of common stock issuable upon conversion of shares of series A preferred stock, and (ii) 2,360,225 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date.

(7)	Consists of (i) 179,531 shares of common stock issuable upon conversion of shares of series A preferred stock, and (ii) 761,527 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date.

(8)	Consists of (i) 89,764 shares of common stock issuable upon conversion of shares of series A preferred stock, and (ii) 1,340,775 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date.

(9)	Consists of (i) 10,771,804 shares of common stock issuable upon conversion of shares of series A preferred stock purchased by Canaan VIII L.P. and (ii) 4,164 shares of common stock issuable upon exercise of

114

options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date. See also footnote 5.

(10)	Consists of 4,027 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date.

(11)

Consists of (i) 16,157,707 shares of common stock issuable upon conversion of shares of series A preferred stock purchased by Aisling Capital III, LP, and (ii) 4,164 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date. See also footnote 3.

(12)

Consists of (i) 13,464,758 shares of common stock issuable upon conversion of shares of series A preferred stock purchased by Sofinnova Venture Partners VII, L.P. and (ii) 4,164 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date. See also footnote 4.

(13)	Consists of (i) 448,825 shares of common stock issuable upon conversion of shares of series A preferred stock, and (ii) 131,717 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date.

(14)

Consists of (i) 17,953,008 shares of common stock issuable upon conversion of shares of series A preferred stock purchased by New Leaf Ventures II, L.P. and (ii) 4,164 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date. See also footnote 2.

(15)	Consists of 2,638 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date.

(16)

Consists of (i) (a) 17,820,774 shares of common stock issuable upon conversion of shares of series A preferred stock purchased by Domain Partners VIII, L.P., and (b) 132,234 shares of common stock issuable upon conversion of shares of series A preferred stock purchased by DP VIII Associates, L.P.; and (ii) 4,164 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date. See also footnote 1.

(17)	Consists of (i) 77,175,493 shares of common stock issuable upon conversion of shares of series A preferred stock, and (ii) 4,298,318 shares of common stock issuable upon exercise of options that are exercisable as of March 31, 2012 or will become exercisable within 60 days after such date.

115

DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock and provisions of our certificate of incorporation and by-laws are summaries and are qualified by reference to the certificate of incorporation and the by-laws that will be in effect upon the closing of this offering. We intend to file copies of these documents with the SEC as exhibits to our registration statement of which this prospectus forms a part. The description of the capital stock reflects changes to our capital structure that will occur upon the closing of this offering.

Upon the closing of this offering, our authorized capital stock will consist of shares of our common stock, par value $0.01 per share, and shares of our preferred stock, par value $0.01 per share, all of which preferred stock will be undesignated.

As of March 31, 2012, we had issued and outstanding:

•

500,000 shares of our common stock outstanding held by one stockholder of record;

•

77,197,936 shares of our series A preferred stock that will automatically convert into an equal number of shares of our common stock upon the closing of this offering; and

•

options to purchase 13,075,000 shares of our common stock at a weighted average exercise price of $0.14 per share.

Common Stock

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. An election of directors by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.

In the event of our liquidation or dissolution, the holders of common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

Preferred Stock

Under the terms of our certificate of incorporation that will become effective upon the closing of this offering, our board of directors is authorized to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. Upon the closing of this offering, there will be no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.

116

Options

As of March 31, 2012, options to purchase 13,075,000 shares of our common stock at a weighted average exercise price of $0.14 per share were outstanding.

Delaware Anti-Takeover Law and Certain Charter and By-Law Provisions

Delaware Law

We are subject to Section 203 of the Delaware General Corporation Law. Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for three years following the date that the person became an interested stockholder, unless either the interested stockholder attained such status with the approval of our board of directors, the business combination is approved by our board of directors and stockholders in a prescribed manner or the interested stockholder acquired at least 85% of our outstanding voting stock in the transaction in which it became an interested stockholder. A “business combination” includes, among other things, a merger or consolidation involving us and the “interested stockholder” and the sale of more than 10% of our assets. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person. The restrictions contained in Section 203 are not applicable to any of our existing stockholders that will own 15% or more of our outstanding voting stock upon the closing of this offering.

Staggered Board; Removal of Directors

Our certificate of incorporation and our by-laws divide our board of directors into three classes with staggered three-year terms. In addition, our certificate of incorporation and our by-laws provide that directors may be removed only for cause and only by the affirmative vote of the holders of 75% of our shares of capital stock present in person or by proxy and entitled to vote. Under our certificate of incorporation and by-laws, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office. Furthermore, our certificate of incorporation provides that the authorized number of directors may be changed only by the resolution of our board of directors. The classification of our board of directors and the limitations on the ability of our stockholders to remove directors, change the authorized number of directors and fill vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of our company.

Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our certificate of incorporation and our by-laws provide that any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our certificate of incorporation and our by-laws also provide that, except as otherwise required by law, special meetings of the stockholders can only be called by our chairman of the board, our president or chief executive officer or our board of directors. In addition, our by-laws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to our board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our board of directors, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities. These provisions also could discourage a third party from making a tender offer for our common stock, because

117

even if it acquired a majority of our outstanding voting stock, it would be able to take action as a stockholder, such as electing new directors or approving a merger, only at a duly called stockholders meeting and not by written consent.

Super-Majority Voting

The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or by-laws, unless a corporation’s certificate of incorporation or by-laws, as the case may be, requires a greater percentage. Our by-laws may be amended or repealed by a majority vote of our board of directors or the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in any annual election of directors. In addition, the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in any election of directors is required to amend or repeal or to adopt any provisions inconsistent with any of the provisions of our certificate of incorporation described above.

Registration Rights

We have entered into an investor rights agreement, dated December 11, 2009, which we refer to as the investor rights agreement, with holders of our series A preferred stock. Upon the closing of this offering, holders of a total of 77,197,936 shares of our common stock as of , including shares issuable upon conversion of our series A preferred stock, will have the right to require us to register these shares under the Securities Act of 1933, as amended, or the Securities Act, under specified circumstances. After registration pursuant to these rights, these shares will become freely tradable without restriction under the Securities Act. If not otherwise exercised, the rights described below will expire six years after the closing of this offering.

Demand and Form S-3 Registration Rights

Beginning 180 days after the closing of this offering, subject to specified limitations set forth in the investor rights agreement, at any time, the holders of at least 75% of the then outstanding shares having rights under the investor rights agreement, which we refer to as registrable securities, may demand that we register all or a portion of the registrable securities under the Securities Act for purposes of a public offering having an aggregate offering price to the public of not less than $10,000,000. We are not obligated to file a registration statement pursuant to this provision on more than two occasions.

In addition, subject to specified limitations set forth in the investor rights agreement, at any time after we become eligible to file a registration statement on Form S-3, holders of registrable securities outstanding may demand that we register their registrable securities on Form S-3 for purposes of a public offering for which the reasonably anticipated price to the public, net of selling expenses, would exceed $1,000,000.

Incidental Registration Rights

If, at any time after the closing of this offering, we propose to register for our own account any of our securities under the Securities Act, the holders of registrable securities will be entitled to notice of the registration and, subject to specified exceptions, have the right to require us to use our commercially reasonable efforts to register all or a portion of the registrable securities then held by them in that registration.

In the event that any registration in which the holders of registrable shares participate pursuant to our investor rights agreement is an underwritten public offering, we agree to enter into an underwriting agreement containing customary representation and warranties and covenants, including without limitation customary provisions with respect to indemnification of the underwriters of such offering.

In the event that any registration in which the holders of registrable shares participate pursuant to our investor rights agreement is an underwritten public offering, we will use our best efforts to include the requested registrable shares to be included, but may be limited by market conditions.

118

Expenses

Pursuant to the investor rights agreement, we are required to pay all registration expenses, including the fees and expenses of one counsel to represent the selling stockholders, other than any underwriting discounts, selling commissions and stock transfer taxes, related to any demand or incidental registration. We are not required to pay registration expenses if the registration request under the investor rights agreement is withdrawn at the request of holders of a majority of the registrable securities, unless the withdrawal is due to discovery of a materially adverse change in our business.

The investor rights agreement contains customary cross-indemnification provisions, pursuant to which we are obligated to indemnify the selling stockholders in the event of material misstatements or omissions in the registration statement attributable to us, and they are obligated to indemnify us for material misstatements or omissions in the registration statement attributable to them.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be .

NASDAQ Global Market

We have applied to list our common stock on The NASDAQ Global Market under the symbol “DRTX.”

119

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of substantial amounts of our common stock in the public market, including shares issued upon exercise of outstanding options, or the anticipation of these sales, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of equity securities.

Upon the closing of this offering, we will have outstanding shares of our common stock, after giving effect to the issuance of shares of our common stock in this offering, assuming no exercise by the underwriters of their over-allotment option and no exercise of options outstanding as of March 31, 2012.

Of the shares to be outstanding immediately after the closing of this offering, we expect that the shares to be sold in this offering will be freely tradable without restriction under the Securities Act unless purchased by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. The remaining shares of our common stock outstanding after this offering will be “restricted securities” under Rule 144, and we expect that substantially all of these restricted securities will be subject to the 180-day lock-up period under the lock-up agreements as described below. These restricted securities may be sold in the public market only if registered or pursuant to an exemption from registration, such as Rule 144 or Rule 701 under the Securities Act.

Rule 144

In general, under Rule 144, beginning 90 days after the date of this prospectus, any person who is not our affiliate and has held their shares for at least six months, including the holding period of any prior owner other than one of our affiliates, may sell shares without restriction, subject to the availability of current public information about us. In addition, under Rule 144, any person who is not our affiliate and has not been our affiliate at any time during the preceding three months and has held their shares for at least one year, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell an unlimited number of shares immediately upon the closing of this offering without regard to whether current public information about us is available.

Beginning 90 days after the date of this prospectus, a person who is our affiliate or who was our affiliate at any time during the preceding three months and who has beneficially owned restricted securities for at least six months, including the holding period of any prior owner other than one of our affiliates, is entitled to sell a number of shares within any three-month period that does not exceed the greater of:

•

1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering; and

•

the average weekly trading volume of our common stock on The NASDAQ Global Market during the four calendar weeks preceding the filing of a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the sale.

Sales under Rule 144 by our affiliates are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Upon expiration of the 180-day lock-up period described below, approximately shares of our common stock will be eligible for sale under Rule 144, including shares eligible for resale immediately upon the closing of this offering as described above. We cannot estimate the number of shares of our common stock that our existing stockholders will elect to sell under Rule 144.

Rule 701

In general, under Rule 701 of the Securities Act, any of our employees, consultants or advisors, other than our affiliates, who purchased shares from us in connection with a qualified compensatory stock plan or other

120

written agreement is eligible to resell these shares 90 days after the date of this prospectus in reliance on Rule 144, but without compliance with the holding period requirements of Rule 144 and without regard to the volume of such sales or the availability of public information about us. Subject to the 180-day lock-up period described below, approximately shares of our common stock will be eligible for sale in accordance with Rule 701.

Lock-Up Agreements

We and each of our directors and executive officers and certain holders of our outstanding common stock, who collectively own shares of our common stock, based on shares outstanding as of March 31, 2012, have agreed that, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse Securities (USA) LLC on behalf of the underwriters, we and they will not, subject to limited exceptions, during the period ending 180 days after the date of this prospectus, and subject to extension in specified circumstances, either directly or indirectly:

•

offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of our common stock or any securities convertible into or exercisable or exchangeable for common stock, or publicly announce an intention to do the same;

•

enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our common stock, whether such transaction is to be settled by delivery of shares of our common stock or such other securities, in cash or otherwise, or publicly announce an intention to do the same; or

•

make any demand for or exercise any right with respect to the registration of any shares of our common stock or any security convertible into or exercisable or exchangeable for shares of our common stock, or with respect to the filing of any registration statement in connection therewith under the Securities Act.

The lock-up restrictions, specified exceptions and the circumstances under which the lock-up period may be extended are described in more detail under “Underwriters.”

Registration Rights

Subject to the lock-up agreements described above, as of , upon the closing of this offering, the holders of an aggregate of 77,197,936 shares of our common stock will have the right to require us to register these shares under the Securities Act under specified circumstances. After registration pursuant to these rights, these shares will become freely tradable without restriction under the Securities Act. See “Description of Capital Stock—Registration Rights” for additional information regarding these registration rights.

Stock Options

As of March 31, 2012, we had outstanding options to purchase 13,075,000 shares of our common stock, of which options to purchase 5,297,076 shares were vested. Following this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register all of the shares of our common stock subject to outstanding options and options and other awards issuable pursuant to our 2012 stock incentive plan and our pre-IPO stock incentive plan. See “Executive Compensation—Stock Option and Other Employee Benefit Plans” for additional information regarding these plans. Accordingly, shares of our common stock registered under the registration statements will be available for sale in the open market, subject to Rule 144 volume limitations applicable to affiliates, and subject to any vesting restrictions and lock-up agreements applicable to these shares.

121

MATERIAL U.S. TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of material U.S. federal income and estate tax considerations relating to ownership and disposition of our common stock by a non-U.S. holder. For purposes of this discussion, the term “non-U.S. holder” means a beneficial owner of our common stock that is not, for U.S. federal income tax purposes:

•

an individual who is a citizen or resident of the United States;

•

a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States;

•

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

•

a trust, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or if the trust has a valid election to be treated as a U.S. person under applicable U.S. Treasury Regulations.

This discussion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, existing and proposed U.S. Treasury Regulations promulgated thereunder, current administrative rulings and judicial decisions, all as in effect as of the date of this prospectus and all of which are subject to change or to differing interpretation, possibly with retroactive effect. Any change could alter the tax consequences to non-U.S. holders described in this prospectus. In addition, the Internal Revenue Service, or the IRS, could challenge one or more of the tax consequences described in this prospectus.

We assume in this discussion that each non-U.S. holder holds shares of our common stock as a capital asset (generally, property held for investment). This discussion does not address all aspects of U.S. federal income and estate taxation that may be relevant to a particular non-U.S. holder in light of that non-U.S. holder’s individual circumstances nor does it address any aspects of U.S. state, local or non-U.S. taxes. This discussion also does not consider any specific facts or circumstances that may apply to a non-U.S. holder and does not address the special tax rules applicable to particular non-U.S. holders, such as:

•

controlled foreign corporations;

•

passive foreign investment companies; and

•

certain U.S. expatriates.

In addition, this discussion does not address the tax treatment of partnerships or persons who hold their common stock through partnerships or other entities which are pass-through entities for U.S. federal income tax purposes. A partner in a partnership or other pass-through entity that will hold our common stock should consult his, her or its own tax advisor regarding the tax consequences of the ownership and disposition of our common stock through a partnership or other pass-through entity, as applicable.

Prospective investors should consult their own tax advisors regarding the U.S. federal, state, local and non-

U.S. income and other tax considerations of acquiring, holding and disposing of our common stock.

Dividends

If we pay distributions on our common stock, those distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder’s investment, up to such holder’s tax basis in the common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below under the heading “Gain on disposition of common stock.”

As discussed under “Dividend Policy,” we do not expect to pay cash dividends to holders of our common stock in the foreseeable future. In the event we do pay dividends, dividends paid to a non-U.S. holder generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country of residence.

122

Dividends that are treated as effectively connected with a trade or business conducted by a non-U.S. holder within the United States, and if an applicable income tax treaty so provides, that are attributable to a permanent establishment or a fixed base maintained by the non-U.S. holder within the United States, are generally exempt from the 30% withholding tax if the non-U.S. holder satisfies applicable certification and disclosure requirements. However, such U.S. effectively connected income, net of specified deductions and credits, is taxed at the same graduated U.S. federal income tax rates applicable to U.S. persons (as defined in the Code). Any U.S. effectively connected income received by a non-U.S. holder that is a corporation may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country of residence.

A non-U.S. holder of our common stock who claims the benefit of an applicable income tax treaty between the United States and such holder’s country of residence generally will be required to provide a properly executed IRS Form W-8BEN (or successor form) and satisfy applicable certification and other requirements. Non-U.S holders are urged to consult their own tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

A non-U.S. holder that is eligible for a reduced rate of U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim with the IRS.

Gain on Disposition of Common Stock

A non-U.S. holder generally will not be subject to U.S. federal income tax on gain recognized on a disposition of our common stock unless:

•

the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, and if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States; in these cases, the non-U.S. holder will be taxed on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons, and if the non-U.S. holder is a corporation, an additional branch profits tax at a rate of 30%, or a lower rate as may be specified by an applicable income tax treaty, may also apply;

•

the non-U.S. holder is a nonresident alien present in the United States for 183 days or more in the taxable year of the disposition and certain other requirements are met, in which case the non-U.S. holder will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty) on the net gain derived from the disposition, which may be offset by U.S.-source capital losses of the non-U.S. holder, if any; or

•

we are, or have been at any time during the five-year period preceding such disposition (or the non-U.S. holder’s holding period, if shorter), a “U.S. real property holding corporation,” unless our common stock is regularly traded on an established securities market and the non-U.S. holder held no more than 5% of our outstanding common stock, directly or indirectly, during the shorter of the five-year period ending on the date of the disposition or the period that the non-U.S. holder held our common stock. Generally, a corporation is a “U.S. real property holding corporation” if the fair market value of its “U.S. real property interests” equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business.

Although there can be no assurance, we believe that we are not currently, and we do not anticipate becoming, a “U.S. real property holding corporation” for U.S. federal income tax purposes.

No assurance can be provided that our common stock will be regularly traded on an established securities market for purposes of the rule described above.

123

Information Reporting and Backup Withholding

We must report annually to the IRS and to each non-U.S. holder the gross amount of the distributions on our common stock paid to such holder and the tax withheld, if any, with respect to such distributions. Non-U.S. holders may have to comply with specific certification procedures to establish that the holder is not a U.S. person (as defined in the Code) in order to avoid backup withholding at the applicable rate, currently 28%, with respect to dividends on our common stock. Generally, a holder will comply with such procedures if it provides a properly executed IRS Form W-8BEN (or other applicable Form W-8) or otherwise meets documentary evidence requirements for establishing that it is a non-U.S. holder, or otherwise establishes an exemption. Dividends paid to non-U.S. holders subject to withholding of U.S. federal income tax, as described above under the heading “Dividends,” will generally be exempt from U.S. backup withholding.

Information reporting and backup withholding generally will apply to the proceeds of a disposition of our common stock by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the United States through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

Copies of information returns may be made available to the tax authorities of the country in which the non-U.S. holder resides or is incorporated under the provisions of a specific treaty or agreement.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder can be refunded or credited against the non-U.S. holder’s U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.

Federal estate tax

Common stock owned or treated as owned by an individual who is a non-U.S. holder (as specially defined for U.S. federal estate tax purposes) at the time of death will be included in the individual’s gross estate for U.S. federal estate tax purposes and, therefore, may be subject to U.S. federal estate tax, unless an applicable estate tax or other treaty provides otherwise.

Legislation affecting certain non-U.S. holders

Legislation enacted in 2010 generally imposes a U.S. federal withholding tax at a rate of 30% on dividends and the gross proceeds of a disposition of our common stock paid after December 31, 2012 to certain foreign entities (including foreign financial institutions and foreign intermediaries), unless such foreign entity satisfies various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with the entity). Under certain circumstances, a non-U.S. holder may be eligible for refunds or credits of the tax. Non-U.S. holders should consult their own tax advisors regarding the possible implications of this legislation on their investment in our common stock.

The preceding discussion of material U.S. federal tax considerations is for general information only. It is not tax advice. Prospective investors should consult their own tax advisors regarding the particular U.S. federal, state, local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences of any proposed changes in applicable laws.

124

UNDERWRITERS

Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse Securities (USA) LLC are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of shares of common stock set forth opposite its name below.


Underwriter		Number of Shares
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Credit Suisse Securities (USA) LLC
RBC Capital Markets, LLC
Wedbush Securities Inc.

Total

Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the underwriting agreement if any of these shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commissions and Discounts

The representatives have advised us that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. After the initial offering, the public offering price, concession or any other term of the offering may be changed.

The following table shows the public offering price, underwriting discount and proceeds before expenses to us. The information assumes either no exercise or full exercise by the underwriters of their option to purchase additional shares.

Per Share

Without Option

With Option

Initial public offering price

Underwriting discount

Proceeds, before expenses, to Durata Therapeutics, Inc.

The expenses of the offering, not including the underwriting discount, are estimated at $ and are payable by us.

125

Option to Purchase Additional Shares

We have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to additional shares at the public offering price, less the underwriting discount. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter’s initial amount reflected in the above table.

Reserved Shares

At our request, the underwriters have reserved for sale, at the initial public offering price, up to % of the shares offered by this prospectus for sale to some of our directors, officers, employees, distributors, dealers, business associates and related persons. If these persons purchase reserved shares, this will reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus.

No Sales of Similar Securities

We, our executive officers and directors and our other existing security holders have agreed not to sell or transfer any common stock or securities convertible into, exchangeable for, exercisable for, or repayable with common stock, for 180 days after the date of this prospectus without first obtaining the written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse Securities (USA) LLC. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

•

offer, pledge, sell or contract to sell any common stock,

•

sell any option or contract to purchase any common stock,

•

purchase any option or contract to sell any common stock,

•

grant any option, right or warrant for the sale of any common stock,

•

lend or otherwise dispose of or transfer any common stock,

•

request or demand that we file a registration statement related to the common stock, or

•

enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

This lock-up provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. However, among certain other exceptions, it does not apply to the transfer or disposition of shares of our common stock purchased in this offering from the underwriters (other than the reserved shares described above purchased in this offering by an officer or director of the company) or on the open market following this offering. In the event that either (x) during the last 17 days of the lock-up period referred to above, we issue an earnings release or material news or a material event relating to us occurs or (y) prior to the expiration of the lock-up period, we announce that we will release earnings results or become aware that material news or a material event will occur during the 16-day period beginning on the last day of the lock-up period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

Nasdaq Global Market Listing

We expect the shares to be approved for listing on the Nasdaq Global Market, subject to notice of issuance, under the symbol “DRTX.”

126

Before this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations between us and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are

•

the valuation multiples of publicly traded companies that the representatives believe to be comparable to us,

•

our financial information,

•

the history of, and the prospects for, us and the industry in which we compete,

•

an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues,

•

the present state of our development and

•

the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial public offering price.

The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.

In connection with the offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares described above. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option granted to them. “Naked” short sales are sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of common stock made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the Nasdaq Global Market, in the over-the-counter market or otherwise.

127

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Electronic Distribution

In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.

Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Notice to Prospective Investors in the European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), no offer of shares may be made to the public in that Relevant Member State other than:

•

to any legal entity which is a qualified investor as defined in the Prospectus Directive;

•

to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives; or

•

in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of shares shall require us or the representatives to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

Each person in a Relevant Member State (other than a Relevant Member State where there is a Permitted Public Offer) who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed that (A) it is a “qualified investor” within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive, and (B) in the case of any shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the shares acquired by it in the offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than “qualified investors” as defined in the Prospectus Directive, or in circumstances in which the prior consent of the representatives has been given to the offer or resale. In the case of any shares being offered to a financial intermediary as that term is used in

128

Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

We, the representatives and their affiliates will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement.

This prospectus has been prepared on the basis that any offer of shares in any Relevant Member State will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make an offer in that Relevant Member State of shares which are the subject of the offering contemplated in this prospectus may only do so in circumstances in which no obligation arises for us or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive in relation to such offer. Neither we nor the underwriters have authorized, nor do they authorize, the making of any offer of shares in circumstances in which an obligation arises for us or the underwriters to publish a prospectus for such offer.

For the purpose of the above provisions, the expression “an offer to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in the Relevant Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member States) and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Notice to Prospective Investors in the United Kingdom

In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.

Notice to Prospective Investors in Switzerland

The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the offering, us, the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will

129

not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

Notice to Prospective Investors in the Dubai International Financial Centre

This prospectus supplement relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus supplement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus supplement nor taken steps to verify the information set forth herein and has no responsibility for the prospectus supplement. The shares to which this prospectus supplement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus supplement you should consult an authorized financial advisor.

130

LEGAL MATTERS

The validity of the shares of common stock offered hereby is being passed upon for us by Wilmer Cutler Pickering Hale and Dorr LLP, New York, New York. Davis Polk & Wardwell LLP, New York, New York, is acting as counsel for the underwriters in connection with this offering.

EXPERTS

The consolidated financial statements of Durata Therapeutics, Inc. and subsidiary (a development stage company) as of December 31, 2010 and 2011 and for the period from inception (November 4, 2009) to December 31, 2009, the years ended December 31, 2010 and 2011, and the period from inception (November 4, 2009) to December 31, 2011 have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock we are offering to sell. This prospectus, which constitutes part of the registration statement, does not include all of the information contained in the registration statement and the exhibits, schedules and amendments to the registration statement. For further information with respect to us and our common stock, we refer you to the registration statement and to the exhibits and schedules to the registration statement. Statements contained in this prospectus about the contents of any contract, agreement or other document are not necessarily complete, and, in each instance, we refer you to the copy of the contract, agreement or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference to such contract, agreement or document.

You may read and copy the registration statement of which this prospectus is a part at the SEC’s public reference room, which is located at 100 F Street, N.E., Room 1580, Washington, DC 20549. You can request copies of the registration statement by writing to the Securities and Exchange Commission and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the SEC’s public reference room. In addition, the SEC maintains an Internet website, which is located at http://www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. You may access the registration statement of which this prospectus is a part at the SEC’s Internet website. Upon completion of this offering, we will be subject to the information reporting requirements of the Securities Exchange Act of 1934, and we will file reports, proxy statements and other information with the SEC.

131

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Index to Consolidated Financial Statements


	Page

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of December 31, 2010 and 2011		F-3

Consolidated Statements of Operations for the period from inception (November 4, 2009) to December 31, 2009, for the years ended December 31, 2010 and 2011, and the period from inception (November 4, 2009) to December 31, 2011		F-4

Consolidated Statements of Changes in Stockholders’ Equity for the period from inception (November 4, 2009) to December 31, 2011		F-5

Consolidated Statements of Cash Flows for the period from inception (November 4, 2009) to December 31, 2009, for the years ended December 31, 2010 and 2011, and the period from inception (November 4, 2009) to December 31, 2011		F-6

Notes to Consolidated Financial Statements		F-7

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Durata Therapeutics, Inc.:

We have audited the accompanying consolidated balance sheets of Durata Therapeutics, Inc. and subsidiary (a development stage company) as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years ended December 31, 2011 and 2010, the period from inception (November 4, 2009) to December 31, 2009, and the period from inception (November 4, 2009) to December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Durata Therapeutics, Inc. and subsidiary (a development stage company) as of December 31, 2011 and 2010, and the results of their operations and their cash flows for the years ended December 31, 2011 and 2010, the period from inception (November 4, 2009) to December 31, 2009, and the period from inception (November 4, 2009) to December 31, 2011, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Short Hills, New Jersey

March 21, 2012

F-2

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Consolidated Balance Sheets


	December 31						Pro forma December 31, 2011 (unaudited)- Note 7
	2010			2011			Pro forma December 31, 2011 (unaudited)- Note 7
Assets
Current assets:
Cash and cash equivalents	$	2,264,145		$	11,485,266		$	33,485,266
Prepaid expenses and other current assets		47,863			996,270			996,270
Contingent receivable		3,000,000			—			—

Total current assets		5,312,008			12,481,536			34,481,536
Acquired in process research and development		15,292,000			15,292,000			15,292,000
Goodwill		5,811,000			5,811,000			5,811,000
Other assets		40,280			40,280			40,280

Total assets	$	26,455,288		$	33,624,816		$	55,624,816

Liabilities, Redeemable Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	706,261		$	1,956,572		$	1,956,572
Accrued expenses		808,712			1,369,249			1,369,249

Total current liabilities		1,514,973			3,325,821			3,325,821

Deferred income taxes		2,510,653			—			—
Contingent consideration		14,618,000			18,739,000			18,739,000

Total liabilities		18,643,626			22,064,821			22,064,821

Commitments and contingencies
Redeemable portion—Series A Convertible Preferred Stock, $0.01 par value, 6,000,000 shares issued and outstanding actual 2010 and 2011 (liquidation preference $6,000,000), none pro forma 2011		6,000,000			6,000,000			—
Stockholders’ equity:
Common stock, $0.01 par value; 125,000,000 shares authorized, 250,000 shares issued and outstanding at December 31, 2010 actual, 500,000 issued and outstanding at December 31, 2011, 77,697,936 pro forma 2011		2,500			5,000			776,979
Series A Convertible Preferred Stock, $0.01 par value; 99,000,000 shares authorized, 13,197,937 shares issued and outstanding at December 31, 2010 actual (liquidation preference $13,197,937), 49,197,936 shares issued and outstanding at December 31, 2011 (liquidation preference $49,197,936), none pro forma 2011		131,979			491,979			—
Additional paid in capital		13,405,418			49,824,324			77,544,324
Accumulated deficit during the development stage		(11,728,235	)		(44,761,308	)		(44,761,308	)

Total stockholders’ equity		1,811,662			5,559,995			33,559,995

Total liabilities, redeemable preferred stock and stockholders’ equity	$	26,455,288		$	33,624,816		$	55,624,816

See accompanying notes to consolidated financial statements.

F-3

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Consolidated Statements of Operations


	Period from inception (November 4, 2009) to December 31, 2009			Year ended December 31, 2010			Year ended December 31, 2011			Period from inception (November 4, 2009) to December 31, 2011
Operating expenses:
Research and development expenses	$	198,313		$	4,818,049		$	30,132,564		$	35,148,926
General and administrative expenses		911,969			2,776,775			4,305,518			7,994,262
Acquisition related charges, net		26,000			6,300,000			1,121,000			7,447,000

Operating loss		1,136,282			13,894,824			35,559,082			50,590,188
Interest income		—			(2,524	)		(15,356	)		(17,880	)

Loss before income tax benefit		1,136,282			13,892,300			35,543,726			50,572,308
Income tax benefit		(421,907	)		(2,878,440	)		(2,510,653	)		(5,811,000	)

Net loss	$	(714,375	)	$	(11,013,860	)	$	(33,033,073	)	$	(44,761,308	)

Net loss attributable to common stockholders	$	(714,375	)	$	(11,013,860	)	$	(33,030,073	)	$	(44,761,308	)
Net loss attributable to Series A preferred stockholders		—			—			—			—

Net loss	$	(714,375	)	$	(11,013,860	)	$	(33,030,073	)	$	(44,761,308	)

Net loss per common share—Basic and Diluted	$	(16.29	)	$	(58.74	)	$	(68.94	)
Weighted average common shares—Basic and Diluted		43,860			187,500			479,167
Unaudited pro forma net loss per common share (note 7):
Net loss per common share—Basic and Diluted							$	(0.43	)
Weighted average common shares—Basic and Diluted								77,677,103

See accompanying notes to consolidated financial statements.

F-4

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders Equity

Period from inception (November 4, 2009) to December 31, 2011


	Common stock				Series A convertible preferred stock(1)				Additional paid in capital		Accumulated deficit during the development stage			Total
	Shares		Amount		Shares		Amount		Additional paid in capital		Accumulated deficit during the development stage			Total
Balance at inception (November 4, 2009)			$	—		—	$	—	$	—	$	—		$	—
Vesting of restricted common stock grant		125,000		1,250		—		—		5,000		—			6,250
Issuance of Series A convertible preferred stock		—		—		7,999,992		80,000		7,919,992		—			7,999,992
Stock based compensation expense										1,807					1,807
Net loss		—		—		—		—		—		(714,375	)		(714,375	)

Balance at December 31, 2009		125,000		1,250		7,999,992		80,000		7,926,799		(714,375	)		7,293,674
Vesting of restricted common stock grant		125,000		1,250						5,000					6,250
Issuance of Series A convertible preferred stock		—		—		5,197,945		51,979		5,145,966		—			5,197,945
Stock based compensation expense		—		—		—		—		327,653		—			327,653
Net loss		—		—		—		—		—		(11,013,860	)		(11,013,860	)

Balance at December 31, 2010		250,000		2,500		13,197,937		131,979		13,405,418		(11,728,235	)		1,811,662
Vesting of restricted common stock grant		250,000		2,500						10,000					12,500
Issuance of Series A convertible preferred stock		—		—		35,999,999		360,000		35,639,999		—			35,999,999
Stock based compensation expense		—		—		—		—		768,907		—			768,907
Net loss		—		—		—		—		—		(33,033,073	)		(33,033,073	)

Balance at December 31, 2011		500,000	$	5,000		49,197,936	$	491,979	$	49,824,324	$	(44,761,308	)	$	5,559,995

(1)	Does not include the 6,000,000 shares of Series A Convertible Preferred Stock that are redeemable upon certain conditions by the holders.

See accompanying notes to consolidated financial statements.

F-5

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Consolidated Statements of Cash Flows


	Period from inception (November 4, 2009) to December 31, 2009			Year ended December 31, 2010			Year ended December 31, 2011			Period from inception (November 4, 2009) to December 31, 2011
Cash flows from operating activities:
Net loss	$	(714,375	)	$	(11,013,860	)	$	(33,033,073	)	$	(44,761,308	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation expense		8,057			333,903			781,407			1,123,367
Acquisition related charges, net		26,000			6,300,000			1,121,000			7,447,000
Deferred income taxes		(421,907	)		(2,878,440	)		(2,510,653	)		(5,811,000	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(45,213	)		(2,650	)		(948,407	)		(996,270	)
Contingent receivable		—			—			5,421,000			5,421,000
Accounts payable		5,556			700,705			1,250,311			1,956,572
Accrued expenses		767,387			41,325			560,537			1,369,249

Net cash used in operating activities		(374,495	)		(6,519,017	)		(27,357,878	)		(34,251,390	)

Cash flows from investing activities:
Acquisition of in process research and development		(10,000,000	)		—			—			(10,000,000	)
Other assets		—			(40,280	)		—			(40,280	)

Net cash used in investing activities		(10,000,000	)		(40,280	)		—			(10,040,280	)

Cash flows from financing activities:
Proceeds from issuance of Series A Convertible Preferred Stock		13,999,992			5,197,945			35,999,999			55,197,936
Proceeds from receipt of contingent receivable		—			—			579,000			579,000

Net cash provided by financing activities		13,999,992			5,197,945			36,578,999			55,776,936

Net increase (decrease) in cash		3,625,497			(1,361,352	)		9,221,121			11,485,266
Cash and cash equivalents, beginning of year and period		—			3,625,497			2,264,145			—

Cash and cash equivalents, end of year and period	$	3,625,497		$	2,264,145		$	11,485,266		$	11,485,266

See accompanying notes to consolidated financial statements.

F-6

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(1)

Nature of Business, Organization and Liquidity

Durata Therapeutics, Inc. and subsidiary (a development stage company) (the Company) is a Delaware corporation and has its principal place of business in Morristown, New Jersey. The Company is a pharmaceutical company focused on the development and commercialization of novel therapeutics for patients with infectious diseases and acute illnesses. The Company was incorporated on November 4, 2009. In December 2009, the Company entered into an agreement to acquire Vicuron Pharmaceuticals Inc. (Vicuron) (see note 3).

To date, the Company has not generated any revenues and has financed its operations primarily through private placements of its preferred stock. The Company anticipates that its expenses will increase substantially in connection with completing its ongoing Phase 3 clinical trials of its lead product candidate, dalbavancin, for the treatment of patients with acute bacterial skin and skin structure infections (abSSSI) and seeking marketing approval for dalbavancin. The Company had a net loss of $33,389,671 for the year ended December 31, 2011 and had a deficit accumulated during the development stage of $44,761,308, from inception until December 31, 2011.

The Company’s preferred stockholders have committed to fund, in the aggregate, purchases of approximately 99,000,000 shares of the Company’s Series A Convertible Preferred Stock at a purchase price of $1.00 per share. The Company had received $55,197,936 of this amount as of December 31, 2011. The Company received an additional $22,000,000 in March 2012. The remaining $21,802,064 will be available until the closing of a contemplated qualified initial public offering (QIPO) which would raise additional cash. Including the fulfillment of the remaining equity commitments (exclusive of the QIPO), the Company estimates that it has sufficient funding to sustain its operations through at least mid-2013. The Company does believe it has other financing alternatives available to fund additional activities until its operations generate adequate operating cash flows, which include both public and additional private equity sales. The Company also has limited fixed commitments for uses of cash and has the intent and ability, if necessary, to delay or eliminate expenditures until adequate funding is available.

The commitment from the Company’s preferred stockholders is expected, at present, to fund clinical trials and submission of dalbavancin to the appropriate regulatory agencies. However, as the Company faces development risks and the launch is conditional on regulatory approvals, no assurances can be given that the Company will be successful in the development of dalbavancin, including obtaining acceptable results in current and prospective clinical trials, and that commercial sales of this product candidate, if approved, in future periods will be achieved in the estimated timeframe of 2014.

(2)

Summary of Significant Accounting Policies

(a)

Basis of Presentation and Principles of Consolidation

The consolidated financial statements of the Company are prepared on the accrual basis of accounting. All intercompany accounts and transactions have been eliminated. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The Company is subject to certain risks and uncertainties related to product development, regulatory approval, market acceptance, scope of patent and proprietary rights, competition, technological change and product liability.

(b)

Development Stage Company

The Company’s primary activities since inception have been organizing and staffing the Company, business planning, raising capital and acquiring and developing dalbavancin. Accordingly, the Company is considered to be in the “development stage” and has prepared the accompanying

F-7

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

consolidated financial statements in accordance with the provisions of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) No. 915, Accounting for Development Stage Entities.

(c)

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash resources principally in money market funds.

(d)

Financial Instruments

Certain financial instruments reflected in the consolidated balance sheets (for example, cash equivalents, accounts payable, and certain other liabilities) are recorded at cost, which approximates fair value due to their short-term nature. The contingent consideration receivable and contingent liability are maintained at fair value.

(e)

Other Intangible Assets

Acquired in-process research and development intangible assets represent the right to develop, use, sell or offer for sale intellectual property that the Company has acquired with respect to processes that have not been completed. These assets are required to be classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until their processes are completed and the Company receives regulatory approval from a major market to allow for the commencement of commercial marketing activities. At that time, the Company will determine the useful life of the asset, reclassify the asset out of in-process research and development and begin amortization. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated.

If the associated research and development effort is abandoned, the related assets likely will be written-off and the Company will record a non-cash impairment loss on its consolidated statement of operations. Acquired in-process research and development assets which are determined to have had a decrease in fair value are adjusted to fair value with an impairment charge. Such assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment. Intangible assets with definite useful lives will be amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of finite lived intangible assets is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the assets exceed their estimated future undiscounted net cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceed the fair value of the assets.

(f)

Goodwill

F-8

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. The Company tests its goodwill annually for impairment each December 31 using Accounting Standards Update (ASU) 2011-08, which allows a company the option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under that option, an entity is no longer required to calculate the fair value of its reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. There was no impairment of the Company’s goodwill or in process research and development (IPR&D) as a result of impairment tests as of December 31, 2009, 2010 or 2011.

(g)

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

(h)

Research and Development Costs

Research and development costs are expensed as incurred and are primarily comprised of the following types of costs incurred in performing research and development activities:

•

employee-related expenses, including salaries, benefits, travel and share-based compensation expense;

•

external research and development expenses incurred under arrangements with third parties, such as contract research organizations (CROs), manufacturing organizations and consultants, including our scientific advisory board; and

•

facilities and laboratory and other supplies.

(i)

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained.

(j)

Share-Based Compensation

The Company utilizes share-based compensation in the form of stock options and restricted stock. Compensation expense is recognized in the consolidated statements of operations based on the estimated fair value of the shares at grant date. Compensation cost to be recognized reflects an estimate of the number of shares expected to vest after taking into consideration an estimate of forfeiture. The fair values of stock option grants are estimated as of the date of grant using Black-Scholes option valuation model. The fair values of option grants are based on the estimated fair value of the Company’s common stock on the date of grant.

F-9

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(k)

Concentrations

The Company maintains cash and cash equivalent balances with financial institutions which, at times, may exceed insurance limits established by the Federal Deposit Insurance Corporation. Management does not consider this to be a significant risk due to the long-standing reputation of these financial institutions.

The Company has entered into agreements with a contract manufacturer to manufacture clinical and future commercial supplies of dalbavancin. The loss of this supplier could have a material adverse effect upon the Company’s operations.

(l)

New Accounting Pronouncements

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820) (ASU 2011-04). ASU 2011-04 was issued to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and International Financial Reporting Standards (IFRS). The guidance in ASU 2011-04 explains how to measure fair value, but does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. ASU 2011-04 will be effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2011. The adoption of ASU 2011-04 will not have a material impact on the Company’s consolidated financial statements.

(3)

Acquisitions

In December 2009, the Company acquired all of the outstanding shares of capital stock of Vicuron from Pfizer Inc. (Pfizer) pursuant to a stock purchase agreement (Pfizer Agreement). The Company paid total upfront consideration of $10,000,000 for the shares of Vicuron and the dalbavancin inventory to be used in research. In addition, upon the successful clinical development, regulatory approval and first commercial sale of dalbavancin, in the United States or one of five major European markets, the Company is required to pay Pfizer an additional milestone payment of $25,000,000. However, at its sole discretion, the Company may elect to defer the milestone payment for a period of up to five years if it delivers to Pfizer a promissory note for the full amount of such milestone payment. Interest on the outstanding principal amount of the promissory note will accrue at a rate of 10% per annum, compounded annually. The Pfizer Agreement also included a clause allowing for a refund of $6,000,000 of the initial $10,000,000 purchase price if the Company provided documentation that supported the position that marketing approval for dalbavancin required more than one new Phase 3 clinical trial. The transaction has been accounted for as an acquisition of a business and, accordingly, under the acquisition method of accounting, the purchase price was determined using cash paid and the estimated fair values for the two contingent aspects of the consideration using probability factors and assessments as of the acquisition date. As the principal asset acquired was a right to develop, manufacture and sell dalbavancin, that fair value was considered to represent IPR&D. Such value was capitalized at the acquisition date.

F-10

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

The table below lists the fair value of the consideration transferred in the Pfizer Agreement:


	Fair value at acquisition date
Cash paid	$	10,000,000
Contingent obligation		5,871,000
Contingent receivable		(579,000	)

	$	15,292,000

Management completed an assessment of the probability of the successful clinical development, regulatory approval and commercial sale of dalbavancin in future periods and determined that a liability of $5,871,000 should be recorded at December 11, 2009 to reflect fair value of the contingent consideration. The Company has classified this liability as noncurrent in the accompanying consolidated balance sheets, as payment is not expected to occur until at least 2014. The Company also recorded the fair value of the contingent receivable of $579,000 at December 11, 2009 based on the probability of payout. Subsequent to the acquisition date, the Company has measured the contingent consideration arrangements at fair value for each period with changes in fair value recognized in the Company’s statement of operations. Changes in fair value reflect new information about the related IPR&D asset and its progress toward approval, and the passage of time, and therefore ultimately the probability of achieving regulatory approval for the product candidate. Separately, the possibility of receiving the $6,000,000 contingent receivable was also reassessed as development efforts continued. In the absence of new information on development costs and probability of success, changes in fair value during those periods reflect only the passage of time.

The purchase price allocation resulted in the following amounts being allocated to the assets and liabilities assumed at the acquisition date based upon their respected fair values summarized below:


	December 11, 2009
IPR&D asset	$	15,292,000
Deferred tax liability		(5,811,000	)
Goodwill		5,811,000

Total consideration transferred	$	15,292,000

The fair value of the IPR&D asset was estimated using expected future cash flows for dalbavancin, which has not yet received regulatory approval and has no alternative future use. The fair value was based on key assumptions, such as estimates of sales and operating profits related to the product candidate (considering the stage of development), the probability of achieving ultimate approval, the time and resources needed to complete the regulatory approval process for the product candidate and the life of the potential commercialized products and associated risks, including the inherent difficulties and uncertainties in obtaining regulatory approvals. In determining the fair value of the IPR&D acquired related to dalbavancin, the Company used the following assumptions:

•

The expected product approval date was early 2014 with product launch occurring later in 2014. The first year of significant cash inflows was 2015.

•

The Company’s estimate of pricing and costs of product sales at the date of the acquisition was based upon information available at that time. The expected costs of products was based on typical contract manufacturing costs with an expectation of higher costs earlier in the product life cycle and then

F-11

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

decreasing and stabilizing costs in subsequent years. The product sales data was based on the Company’s knowledge of a competitor’s product sales increases and its view of the market for the product as best it understood it at the time.

•

The Company applied a 30% probability of regulatory approval and subsequent commercial launch and a 20% discount rate to the projected cash flows.

The IPR&D asset will not be amortized until approval is achieved.

The Company does not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the Company’s acquisition is not amortized, but is subject to review for impairment annually.

In September 2008, Pfizer globally withdrew all marketing applications while it considered conducting a second pivotal trial for the treatment of complicated skin and skin structure infections in adults. As of December 11, 2009, Vicuron became a wholly owned subsidiary of the Company with minimal operations. Management believes Vicuron had no substantive operations in 2009 prior to the Company’s acquisition of Vicuron from Pfizer in December 2009.

At December 31, 2010 and 2011, the balance of the contingent liability consideration, which reflects the fair value of the contingent milestone payment, was $14,618,000 and $18,739,000, respectively. As of December 31, 2010, the fair value of the contingent receivable was determined to be $3,000,000. The Company received the $6,000,000 contingent receivable in March 2011. The Company’s contingent consideration is based on Level 3 inputs within the fair value hierarchy. Fair values determined based on Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market activity. The probability of payment of the contingent liability was 30%, 70% and 80% as of December 31, 2009, 2010, and 2011, respectively. The probability of receipt of the contingent receivable was 10% and 50% as of December 31, 2009 and 2010, respectively.

(4)

Marketing Rights Agreement

In 2010, the Company acquired from RaQualia Pharma Inc. (RaQualia) rights to commercialize dalbavancin in Japan, which Pfizer had previously granted to RaQualia pursuant to a marketing rights agreement. The Company paid upfront consideration of $350,000 for the termination of the marketing rights agreement. This payment was expensed as research and development in the accompanying 2010 consolidated statement of operations. Following the first receipt of the first regulatory approval for dalbavancin in Japan, the Company is obligated to pay RaQualia an additional milestone payment of $2,000,000. The costs associated with this payment, if made, will be amortized over the ten-year period of the agreement. The Company also agreed to pay RaQualia high single digit royalties of net sales of dalbavancin in Japan until the later of the tenth anniversary of the first commercial sale of dalbavancin in Japan and the last expiration of all patents owned by the Company or Vicuron as of December 2010 that cover the sale of dalbavancin in Japan.

(5)

Stockholders’ Equity and Stock Compensation

(a)

Common Stock

In December 2009, the Company issued 500,000 shares of restricted common stock to an officer in return for services to be rendered over the effective vesting period. This award fully vested in January 2011. The common stock has voting, dividend, and liquidation rights, which are subject to, and qualified by, the rights, powers, and preferences of the holders of the Series A Convertible Preferred Stock. The fair value of the 500,000 shares of restricted common stock was expensed over the vesting period. The estimated fair value per share used for the grant of 500,000 shares of restricted common stock was $0.05 ($25,000 of compensation expense) and was based on a valuation of the Company’s common stock as of December 31, 2009 in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held-Company Equity

F-12

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

Securities Issued as Compensation (the Practice Aid). Based on the valuation methodology selection criteria set forth in the Practice Aid, with a focus on the early stage of the development the Company, including the status of its development efforts, very limited operations and the fact that it had an incomplete management team, as of December 31, 2009, the Company determined that an asset-based approach was the most appropriate method to use to determine the enterprise value of the Company. The Company then allocated the enterprise value using the current value method.

(b)

Series A Convertible Preferred Stock

Since inception, the Company has issued and sold an aggregate of 55,197,936 shares of its Series A Convertible Preferred Stock that resulted in the Company receiving cash proceeds through December 31, 2011 of $55,197,936. In addition, in March 2012, the Company received an additional $22,000,000 from the sale of an additional 22,000,000 shares of Series A Convertible Preferred Stock. The proceeds were, and will be used for, research and development and general working capital.

The Series A Convertible Preferred Stock provides the holder with preferences in distributions, registration of shares (in the event of certain occurrences), voting rights, board representation and conversion features (into common shares) over those afforded to prospective common stock holders. The Series A Convertible Preferred Stock carries a noncumulative, nonaccruing $0.08 dividend per annum. However, the Board of Directors has not declared any dividends through December 31, 2011.

At any time and upon election in writing of a majority of holders of the outstanding shares of preferred stock (at least 75% of the then outstanding shares of such series) such holders may redeem up to 6,000,000 shares, on a pro rata basis to the total preferred shares outstanding, of Series A Convertible Preferred Stock, out of funds legally available therefor. The Company will effect such redemption by paying in cash in exchange for such Series A Convertible Preferred Stock the original issue price of such Series A Convertible Preferred Stock. As a result of this redemption clause, 6,000,000 shares of the Series A Convertible Preferred Stock, with a $6,000,000 value, is presented on the accompanying consolidated balance sheets outside of stockholders equity. All declared but unpaid dividends shall be paid concurrently with any redemption.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the Series A Convertible Preferred Stock holders would be entitled to be paid out an amount equal to $1 per existing share of Series A Convertible Preferred Stock before any payments to holders of common stock. If the Company does not have sufficient funds to pay the Series A Convertible Preferred Stock holders the full $1 per preferred share, then funds shall be distributed ratably in proportion to their respective ownership.

The holders of the Series A Convertible Preferred Stock are also entitled to conversion rights into common stock of the Company upon the option of the holders or a mandatory conversion, which would include a QIPO or a qualified financing agreement with a third party. Each share of Series A Convertible Preferred Stock shall be converted, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into the number of shares of common stock which results from dividing the original issue price for the Series A Convertible Preferred Stock by the conversion price for the Series A Convertible Preferred Stock that is in effect at the time of conversion (the conversion price). The initial conversion price of Series A Convertible Preferred Stock is the original issue price for the Series A Convertible Preferred Stock. The conversion price would be adjusted in the event the Company issues shares for consideration less than the original issue price of the Series A Convertible Preferred Stock. There have been no changes to the conversion price as of December 31, 2011. Upon the occurrence of certain events of the Company (the mandatory conversion), the shares of Series A Convertible Preferred Stock then outstanding would automatically convert into common stock at the effective conversion rate at that time.

F-13

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(c)

Stock Incentive Plan

The Company has a stock incentive plan (the Incentive Plan) that provides for the granting of stock options and other stock awards of the Company to employees and consultants. General awards under the Incentive Plan consist of a specified number of options awarded to an employee or consultant subject to the satisfaction of various vesting conditions determined and specified by the Company at the time of the award. The Company has reserved 14,500,000 common shares for issuance upon exercise of options and contingent awards. In 2009, 2010 and 2011, the Company awarded 3,000,000, 7,450,000 and 1,475,000 options, respectively, under the Incentive Plan. Options, subject to certain restrictions, may be exercisable for a defined period of time from the date of the grant after full vesting occurs.

Upon termination of employment any unvested options are immediately cancelled and available for future grant, while vested options are exercisable for a defined period. The vesting period for awards is to be established by the Company in its discretion on the date of grant. The outstanding option grants at December 31, 2011 have a term of 10 years and generally vest over periods up to 4 years.

Activity with respect to options was as follows:


	Shares		Weighted average exercise price per share		Weighted average remaining contractual life (years)
Outstanding balance, at inception and through December 31, 2009		3,000,000	$	0.12		9.38
Granted		7,450,000		0.12		9.38
Forfeited or expired		—		—		—

Outstanding balance, December 31, 2010		10,450,000		0.12		9.38
Granted		1,475,000		0.21		9.90
Forfeited or expired		—		—		—

Outstanding balance, December 31, 2011		11,925,000	$	0.13		8.52

The following table summarizes additional information regarding options outstanding and exercisable at December 31, 2011:


	Options outstanding						Options exercisable
	Number of options outstanding at year end		Weighted average remaining contractual life (years)		Weighted average exercise price		Number of options exercisable at year end		Weighted average exercise price
Exercise price:
$0.12		10,450,000		9.1	$	0.12		4,210,416	$	0.12
0.21		1,475,000		9.9		0.21		—		0.21

		11,925,000						4,210,416

The options granted contain certain restrictions on the holders ability to exercise the award including limitations as to the number of options exercisable that is determined based on the level of funding received from the original Series A Convertible Preferred Stock investors. For purposes of the

F-14

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

exercisability awards in the table above these restrictions are determined to be non-substantive due to the Company’s expectations of future funding by the preferred holders.

At December 31, 2011 there were 2,575,000 shares reserved for future option grants under the Incentive Plan. On February 28, 2012, the Company granted options to purchase 1,150,000 shares of common stock under the Incentive Plan. The options were granted at an exercise price of $0.26.

The weighted-average grant date fair value of the stock options granted during the period of inception (November 4, 2009) to December 31, 2009 and for the years ended December 31, 2010 and 2011 and was $0.03 per share, $0.35 per share and $0.33 per share, respectively. The Company estimated the fair value of options granted using a Black-Scholes option pricing model with the following assumptions:


	2009	2010	2011
Risk-free interest rate	3%	2.25% –3%	2.25%
Expected volatility	85%	80 – 85%	80%
Expected term (years)	7	7	7
Expected dividend yield	0%	0%	0%

Because the Company is privately-held and has limited operating history, the expected volatility is based on the median historic volatility for a representative group of companies. The Company used the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term of stock option grants to employees due to the Company’s limited operating history. The risk-free interest rate is based on the implied yield on U.S. Treasury zero coupon bonds for periods commensurate with the expected term of the options. The dividend yield on the Company’s common stock is estimated to be zero based on the fact that the Company has not paid and does not intend to pay dividends during the expected term of its stock options. Share-based compensation expense for stock options granted to employees and directors is based on the estimated grant date fair value of options recognized ratably over the requisite service period, which is the vesting period of the award. Compensation expense for options granted to non-employees is based on the fair value of options, which are revalued each reporting period as the stock options vest and are recognized as expense over the service period. The level of forfeitures expected to occur was estimated based on data from a representative group of companies with similar characteristics to us.

Share-based compensation expense related to these options totaled $1,807, $327,653 and $768,907 for the period from inception (November 4, 2009) to December 31, 2009 and for the years ended December 31, 2010 and 2011, respectively, which is included in research and development and general and administrative expenses in the accompanying consolidated statements of operations. The share-based compensation cost related to nonvested awards not yet recognized totals $2,000,400 at December 31, 2011. Such amount will be recognized over the remaining vesting period of two years.

(6)

Net Loss Per Share

Net loss per share is determined in accordance with the two-class method. This method is used for computing basic net loss per share when companies have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the company. Under the two-class method, net loss is allocated between common shares and other participating securities based on their participating rights in both distributed and undistributed earnings. The Company’s Series A Convertible Preferred Stock are participating securities, since the stockholders are entitled to share in dividends declared by the board of directors with the common stock based on their equivalent common shares.

F-15

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

Basic net loss per share is computed by dividing net loss available (attributable) to common stockholders by the weighted average number of shares of common stock outstanding during the period. Because the holders of the participating preferred stock are not contractually required to share in the Company’s losses, in applying the two-class method to compute basic net loss per common share, no allocation to preferred stock was made for the period from November 4, 2009 to December 31, 2009 and for the years ended December 31, 2010 and 2011. Potential common shares in the diluted net loss per share computation are excluded as they would be anti-dilutive.

Potential common shares of 17,374,992, 29,897,937 and 67,122,936 during the period from November 4, 2009 to December 31, 2009 and for the years ended December 31, 2010 and 2011, respectively, that could potentially dilute basic loss per common share in the future were not included in the computation of diluted loss per share because to do so would have been anti-dilutive for the periods presented. Potential dilutive common shares for period from November 4, 2009 to December 31, 2009 and for the years ended December 31, 2010 and 2011 include 13,999,992, 19,197,937 and 55,197,936 common shares related to convertible preferred stock, respectively, and 3,375,000, 10,700,000, and 11,925,000 shares, respectively, related to stock options and restricted stock.

(7)

Unaudited Pro Forma Balance Sheet and Net Loss Per Share

In the event of a QIPO, the Series A Convertible Preferred Stock will convert into common stock on a one-to-one basis. The unaudited pro forma balance sheet data give effect to:

•

the Company’s issuance and sale in March 2012 of an aggregate of 22,000,000 shares (the March 2012 shares) of its Series A Convertible Preferred Stock at a price per share of $1.00 for an aggregate purchase price of $22,000,000; and

•

the automatic conversion of all outstanding shares of the Company’s Series A Convertible Preferred Stock, including the shares of the Company’s Series A Convertible Preferred Stock that were issued and sold in March 2012, into an aggregate of 77,197,936 shares of its common stock upon the closing of a QIPO.

The unaudited pro forma basic and diluted weighted average number of shares outstanding for the year ended December 31, 2011 reflects the conversion of all outstanding shares of Series A Convertible Preferred Stock (including the March 2012 shares) as if the conversion had taken place on January 1, 2011.

The following table shows the unaudited pro forma effects on the basic and diluted net loss per share for the year ended December 31, 2011 as if the conversion occurred on January 1, 2011:


	Year ended December 31, 2011
Numerator:
Net Loss	$	(33,033,073	)
Denominator:
Weighted average shares of common stock outstanding		479,167
Shares issued upon conversion of Series A Convertible Preferred Stock		77,197,936

Pro forma weighted average shares of common stock outstanding—Basic and diluted		77,677,103
Pro Forma Net Loss per share—Basic and Diluted	$	(0.43	)

F-16

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

Excluded from the computation of pro forma diluted net income per common share for the year ended December 31, 2011 were options to purchase 11,925,000 shares of common stock because including them would have had an anti-dilutive effect.

(8)

Accrued Expenses

Accrued expenses principally includes clinical trial costs not yet billed at December 31, 2010 and 2011.

(9)

Income Taxes

The Company has recorded an income tax benefit for the period from inception (November 4, 2009) to December 31, 2009 and for the years ended December 31, 2010 and 2011 of $421,907, $3,170,402, and $2,878,440, respectively. Such benefit is all related to the U.S. operations of the Company and includes Federal taxes at 34% and estimated state and local taxes. State and local taxes are estimated at 4%, which is shown net of a federal tax benefit. Amounts recorded in acquisition related charges, net on the accompanying consolidated statements of operations are treated as permanent items for purpose of the income tax provision and therefore added back to come up with taxable loss for the year.

The following is a reconciliation between the effective tax rate and the federal statutory rate:


	2009	2010	2011
Federal statutory rate	34%	34%	34%
States taxes, net of federal benefit	4%	4%	4%
Permanent items—change in contingent consideration	(1)%	(11)%	(1)%
Valuation allowance	—	—	(30)%

	37%	26%	7%

The deferred tax assets are comprised of net operating loss carryforwards of $3,170,402 and $15,952,338 and stock compensation awards of $129,945 and $426,880 as of December 31, 2010 and 2011, respectively.

A deferred tax liability of $5,811,000 recorded upon the closing of the Pfizer Agreement on the value of the acquired IPR&D allows certain deferred tax assets to be recognized up to this amount. The deferred tax assets were generated principally from net operating losses incurred. Once the deferred tax liability was fully offset, the Company has recorded a valuation allowance for the additional assets generated, which occurred in 2011. Based on an assessment of all available evidence, including historical results of operations and the inherent uncertainties related in the Company’s ability to develop dalbavancin, generate taxable income in future periods, management has concluded, at present, that the realization of these additional deferred tax assets cannot be considered more likely than not. Accordingly, a valuation allowance has been established against the additional deferred tax assets of $10,568,258 at December 31, 2011. No valuation allowance was recorded in 2009 or 2010. As of December 31, 2011, the Company has Federal net operating loss carryforwards and State net operating loss carryforwards of $41,979,838, which begin to expire in 2029 and 2017, respectively.

The Company had no unrecognized tax benefits for the period from inception through December 31, 2011. There are no tax related interest and penalties included in the accompanying consolidated financial statements. The Company files U.S. tax returns and various state tax returns.

F-17

DURATA THERAPEUTICS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(10)

Commitments and Contingencies

(a)

Employment Agreements

The Company has employment agreements with certain employees which require the funding of a specified level of payments, if certain events (such as a change in control) or termination without cause occur.

(b)

Consulting and Other Business Arrangements

In the course of normal business operations, the Company has agreements with contract service providers to assist in the performance of its research and development and manufacturing activities. The Company can elect to discontinue the work under these agreements at any time. The Company could also enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require up front payments and even long-term commitments of cash.

The Company has entered into a development and supply agreement with Hospira Worldwide, Inc., or Hospira, for its fill and finish services. Under this agreement, Hospira is required to supply and the Company is required to purchase a specified percentage of its commercial requirements of dalbavancin. The Company is also required to pay Hospira aggregate development fees of approximately $1,700,000 based on the occurrence of specified milestone events. Through December 31, 2011, the Company has paid $696,000 of this amount. The agreement expires five years after the first commercial sale of dalbavancin, subject to an automatic renewal for an indefinite period.

(c)

Leasing Arrangements

The Company leases office space under a non-cancelable operating lease agreement expiring on December 31, 2012. As of December 31, 2011, the future minimum payments for years ending December 31, 2012 amount to $241,680.

(d)

Contingencies

From time to time, the Company may be involved in various legal actions arising out of the ordinary conduct of business. In the opinion of management, the ultimate disposition of such actions will not materially affect the Company’s consolidated financial position, results of operations or cash flows.

(11)

Subsequent Events

The Company has evaluated subsequent events occurring after the balance sheet date through the date of March 21, 2012 which is the date the financial statements were issued. Based on the evaluation, the Company has determined there were no other subsequent events in addition to what has already been described in these footnotes.

F-18

Through and including , 2012 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Shares

LOGO

Common Stock

PROSPECTUS

BofA Merrill Lynch

Credit Suisse

RBC Capital Markets

Wedbush PacGrow Life Sciences

, 2012

Part II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.

Other Expenses of Issuance and Distribution.

The following table sets forth the expenses to be incurred in connection with the offering described in this Registration Statement, other than underwriting discounts and commissions, all of which will be paid by the Registrant. All amounts are estimates except the Securities and Exchange Commission registration fee and the Financial Industry Regulatory Authority, Inc. filing fee.


	Amount
Securities and Exchange Commission registration fee	$	9,885
Financial Industry Regulatory Authority, Inc. filing fee		9,125
NASDAQ listing fee		*
Accountants’ fees and expenses		*
Legal fees and expenses		*
Blue Sky fees and expenses		*
Transfer Agent’s fees and expenses		*
Printing and engraving expenses		*
Miscellaneous		*

Total Expenses	$	*

*	To be filed by amendment.

Item 14.

Indemnification of Directors and Officers.

Section 102 of the Delaware General Corporation Law permits a corporation to eliminate the personal liability of its directors or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his or her duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our certificate of incorporation provides that no director shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the Delaware General Corporation Law prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.

Section 145 of the Delaware General Corporation Law provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons serving at the request of the corporation in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he or she is or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other court shall deem proper.

Our certificate of incorporation provides that we will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil,

II-1

criminal, administrative or investigative (other than an action by or in the right of us) by reason of the fact that he or she is or was, or has agreed to become, our director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful.

Our certificate of incorporation also provides that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of us to procure a judgment in our favor by reason of the fact that the Indemnitee is or was, or has agreed to become, our director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee or, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys’ fees) actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If we do not assume the defense, expenses must be advanced to an Indemnitee under certain circumstances.

We have entered into indemnification agreements with our directors and executive officers. In general, these agreements provide that we will indemnify the director or executive officer to the fullest extent permitted by law for claims arising in his or her capacity as a director or officer of our company or in connection with their service at our request for another corporation or entity. The indemnification agreements also provide for procedures that will apply in the event that a director or executive officer makes a claim for indemnification and establish certain presumptions that are favorable to the director or executive officer.

We maintain a general liability insurance policy which covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.

The underwriting agreement we will enter into in connection with the offering of common stock being registered hereby provides that the underwriters will indemnify, under certain conditions, our directors and officers (as well as certain other persons) against certain liabilities arising in connection with such offering.

Item 15.

Recent Sales of Unregistered Securities.

Set forth below is information regarding shares of common stock and preferred stock issued, and options granted, by us within the past three years that were not registered under the Securities Act, as amended. Also included is the consideration, if any, received by us for such shares and options and information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.

(a) Issuances of Securities

In March 2012, we issued and sold an aggregate of 22,000,000 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $22,000,000.

II-2

In August 2011, we issued and sold an aggregate of 22,000,000 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $22,000,000.

In January 2011, we issued and sold an aggregate of 13,999,999 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $13,999,999.

In November 2010, we issued and sold an aggregate of 115,592 shares of our series A preferred stock to our executive officers at a price per share of $1.00 for an aggregate purchase price of $115,592.

In July 2010, we issued and sold an aggregate of 5,000,000 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $5,000,000.

In May 2010, we issued and sold an aggregate of 82,353 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $82,353.

In December 2009, we issued and sold an aggregate of 13,999,992 shares of our series A preferred stock at a price per share of $1.00 for an aggregate purchase price of $13,999,992.

In December 2009, we issued 500,000 restricted shares of our common stock at a purchase price of $0.01 per share.

No underwriters were involved in the foregoing sales of securities. The securities described in this section (a) of Item 15 were issued to investors in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(2) under the Securities Act relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required. All purchasers of shares of preferred stock described above represented to us in connection with their purchase that they were accredited investors and were acquiring the shares for their own account for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof and that they could bear the risks of the investment and could hold the securities for an indefinite period of time. The purchasers received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration statement or an available exemption from such registration.

(b) Stock Option Grants

Since inception, we have issued to certain employees, directors and consultants options to purchase an aggregate of 13,255,000 shares of common stock as of March 31, 2012, of which, as of March 31, 2012, no options to purchase shares of common stock had been exercised, options to purchase 180,000 shares had been forfeited and options to purchase 13,075,000 shares of common stock remained outstanding at a weighted-average exercise price of $0.14 per share.

The issuance of stock options and the common stock issuable upon the exercise of such options as described in this section (b) of Item 15 were issued pursuant to written compensatory plans or arrangements with our employees, directors and consultants, in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 701 promulgated under the Securities Act. All recipients either received adequate information about us or had access, through employment or other relationships, to such information.

Item 16.

Exhibits and Financial Statement Schedules.

The exhibits to the registration statement are listed in the Exhibit Index attached hereto and incorporated by reference herein.

II-3

Item 17.

Undertakings.

(a) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(1)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)

For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Morristown, State of New Jersey, on this 30th day of April, 2012.


DURATA THERAPEUTICS, INC.

By:		/S/ PAUL R. EDICK
		Paul R. Edick
		Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities held on the dates indicated.


Signature	Title	Date

/S/ PAUL R. EDICK Paul R. Edick	Chief Executive Officer and Director (Principal Executive Officer)	April 30, 2012

/S/ COREY N. FISHMAN Corey N. Fishman	Chief Operating Officer (Principal Financial and Accounting Officer)	April 30, 2012

* Nicole Vitullo	Director	April 30, 2012

* Ronald M. Hunt	Director	April 30, 2012

* Dov A. Goldstein, M.D.	Director	April 30, 2012

* James I. Healy, M.D., Ph.D.	Director	April 30, 2012

* Brenton K. Ahrens	Director	April 30, 2012

* George F. Horner III	Director	April 30, 2012

/S/ RICHARD U. DE SCHUTTER Richard U. De Schutter	Director	April 30, 2012

/S/ KEVIN C. O’BOYLE Kevin C. O’Boyle	Director	April 30, 2012


*By:		/S/ PAUL E. EDICK
		Paul R. Edick, Attorney-in-Fact

II-5

Exhibit Index


Exhibit Number		Description of Exhibit

1.1**		Underwriting Agreement

3.1*		Amended and Restated Certificate of Incorporation of the Registrant, as amended

3.2*		By-laws of the Registrant

3.3		Restated Certificate of Incorporation of the Registrant (to be effective upon the closing of this offering)

3.4		Amended and Restated By-laws of the Registrant (to be effective upon the closing of this offering)

4.1**		Specimen Stock Certificate evidencing the shares of common stock

5.1**		Opinion of Wilmer Cutler Pickering Hale and Dorr LLP

10.1*		Stock Incentive Plan

10.2		Form of Stock Option Agreement under the Stock Incentive Plan

10.3		2012 Stock Incentive Plan

10.4		Form of Incentive Stock Option Agreement under the 2012 Stock Incentive Plan

10.5		Form of Nonstatutory Stock Option Agreement under the 2012 Stock Incentive Plan

10.6*		Investor Rights Agreement, dated December 11, 2009

10.7*		Office Services Agreement, dated December 10, 2010, between the Registrant and Chartwell Consulting Group, Inc. t/a SymphonySuites, as amended

†10.8		Stock Purchase Agreement, dated as of December 11, 2009, between the Registrant and Pfizer Inc.

†10.9*		Rights Transfer Agreement, dated as of December 14, 2010, between the Registrant, Vicuron Pharmaceuticals Inc., and RaQualia Pharma Inc.

†10.10*		Development and Supply Agreement, dated as of December 21, 2010, between the Registrant and Hospira Worldwide, Inc.

10.11**		Employment Agreement, between the Registrant and Paul R. Edick.

10.12**		Employment Agreement, between the Registrant and Corey N. Fishman.

10.13**		Employment Agreement, between the Registrant and Michael W. Dunne.

10.14**		Employment Agreement, between the Registrant and John Shannon.

21.1*		Subsidiaries of the Registrant

23.1		Consent of KPMG LLP

23.2**		Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5.1)

24.1*		Power of Attorney (included on signature page)

24.2		Power of Attorney for Richard U. De Schutter

24.3		Power of Attorney for Kevin C. O’Boyle

*	Previously filed.

**	To be filed by amendment.

†	Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.

EX-3.3 2 d312438dex33.htm RESTATED CERTIFICATE OF INCORPORATION OF THE REGISTRANT Restated Certificate of Incorporation of the Registrant

Exhibit 3.3

RESTATED CERTIFICATE OF INCORPORATION

DURATA THERAPEUTICS, INC.

(originally incorporated on November 4, 2009)

Durata Therapeutics, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:

A. The current name of the Corporation is Durata Therapeutics, Inc. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on November 4, 2009. The Certificate of Incorporation was amended and restated on December 11, 2009 and on November 17, 2010, and was amended on , 2012.

B. A resolution was duly adopted by the Board of Directors of the Corporation pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware setting forth this Restated Certificate of Incorporation and declaring such Restated Certificate of Incorporation advisable. The stockholders of the Corporation duly approved and adopted this Restated Certificate of Incorporation by written consent in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware.

Accordingly, the Certificate of Incorporation of this Corporation, as previously amended and restated, is hereby further amended and restated in its entirety to read as follows:

FIRST: The name of the Corporation is Durata Therapeutics, Inc.

SECOND: The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of its registered agent at that address is The Corporation Trust Company.

THIRD: The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is 130,000,000 shares, consisting of (i) 125,000,000 shares of Common Stock, $0.01 par value per share (“Common Stock”), and (ii) 5,000,000 shares of Preferred Stock, $0.01 par value per share (“Preferred Stock”).

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

A	COMMON STOCK.

1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors upon any issuance of the Preferred Stock of any series.

2. Voting. The holders of the Common Stock shall have voting rights at all meetings of stockholders, each such holder being entitled to one vote for each share thereof held by such holder; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (which, as used herein, shall mean the certificate of incorporation of the Corporation, as amended from time to time, including the terms of any certificate of designations of any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation. There shall be no cumulative voting.

The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of Delaware.

3. Dividends. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor as and when determined by the Board of Directors and subject to any preferential dividend or other rights of any then outstanding Preferred Stock.

4. Liquidation. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders, subject to any preferential or other rights of any then outstanding Preferred Stock.

B	PREFERRED STOCK.

Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors of the Corporation as hereinafter provided. Any shares of Preferred Stock which may be redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law.

Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designations relating thereto in accordance with the General Corporation Law of the State of Delaware, to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such

-2-

resolutions, all to the full extent now or hereafter permitted by the General Corporation Law of the State of Delaware. Without limiting the generality of the foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law.

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares then outstanding) by the affirmative vote of the holders of a majority of the voting power of the capital stock of the Corporation entitled to vote thereon, voting as a single class, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of Delaware.

FIFTH: Except as otherwise provided herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute and this Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.

SIXTH: In furtherance and not in limitation of the powers conferred upon it by the General Corporation Law of the State of Delaware, and subject to the terms of any series of Preferred Stock, the Board of Directors shall have the power to adopt, amend, alter or repeal the Bylaws of the Corporation by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present. The stockholders may not adopt, amend, alter or repeal the Bylaws of the Corporation, or adopt any provision inconsistent therewith, unless such action is approved, in addition to any other vote required by this Certificate of Incorporation, by the affirmative vote of the holders of at least seventy-five percent (75%) of the votes that all the stockholders would be entitled to cast in any annual election of directors or class of directors. Notwithstanding any other provisions of law, this Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article SIXTH.

SEVENTH: Except to the extent that the General Corporation Law of the State of Delaware prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. If the General Corporation Law of the State of Delaware is amended to permit further elimination or limitation of the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware as so amended.

-3-

EIGHTH: The Corporation shall provide indemnification as follows:

1. Actions, Suits and Proceedings Other than by or in the Right of the Corporation. The Corporation shall indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) (all such persons being referred to hereafter as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), liabilities, losses, judgments, fines (including excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974), and amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

2. Actions or Suits by or in the Right of the Corporation. The Corporation shall indemnify any Indemnitee who was or is a party to or threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made under this Section 2 in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation, unless, and only to the extent, that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses (including attorneys’ fees) which the Court of Chancery of Delaware or such other court shall deem proper.

3. Indemnification for Expenses of Successful Party. Notwithstanding any other provisions of this Article EIGHTH, to the extent that an Indemnitee has been successful, on the

-4-

merits or otherwise, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article EIGHTH, or in defense of any claim, issue or matter therein, or on appeal from any such action, suit or proceeding, Indemnitee shall be indemnified against all expenses (including attorneys’ fees) actually and reasonably incurred by or on behalf of Indemnitee in connection therewith. Without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe his or her conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

4. Notification and Defense of Claim. As a condition precedent to an Indemnitee’s right to be indemnified, such Indemnitee must notify the Corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving such Indemnitee for which indemnity will or could be sought. With respect to any action, suit, proceeding or investigation of which the Corporation is so notified, the Corporation will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to Indemnitee. After notice from the Corporation to Indemnitee of its election so to assume such defense, the Corporation shall not be liable to Indemnitee for any legal or other expenses subsequently incurred by Indemnitee in connection with such action, suit, proceeding or investigation, other than as provided below in this Section 4. Indemnitee shall have the right to employ his or her own counsel in connection with such action, suit, proceeding or investigation, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the Corporation, (ii) counsel to Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and Indemnitee in the conduct of the defense of such action, suit, proceeding or investigation or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, suit, proceeding or investigation, in each of which cases the fees and expenses of counsel for Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided by this Article EIGHTH. The Corporation shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above. The Corporation shall not be required to indemnify Indemnitee under this Article EIGHTH for any amounts paid in settlement of any action, suit, proceeding or investigation effected without its written consent. The Corporation shall not settle any action, suit, proceeding or investigation in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Corporation nor Indemnitee will unreasonably withhold or delay its consent to any proposed settlement.

5. Advance of Expenses. Subject to the provisions of Section 6 of this Article EIGHTH, in the event of any threatened or pending action, suit, proceeding or investigation of which the Corporation receives notice under this Article EIGHTH, any expenses (including attorneys’ fees) incurred by or on behalf of Indemnitee in defending an action, suit, proceeding

-5-

or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter; provided, however, that the payment of such expenses incurred by or on behalf of Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined by final judicial decision from which there is no further right to appeal that Indemnitee is not entitled to be indemnified by the Corporation as authorized in this Article EIGHTH; and provided further that no such advancement of expenses shall be made under this Article EIGHTH if it is determined (in the manner described in Section 6) that (i) Indemnitee did not act in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation, or (ii) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe his or her conduct was unlawful. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment.

6. Procedure for Indemnification and Advancement of Expenses. In order to obtain indemnification or advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article EIGHTH, an Indemnitee shall submit to the Corporation a written request. Any such advancement of expenses shall be made promptly, and in any event within 60 days after receipt by the Corporation of the written request of Indemnitee, unless (i) the Corporation has assumed the defense pursuant to Section 4 of this Article EIGHTH (and none of the circumstances described in Section 4 of this Article EIGHTH that would nonetheless entitle the Indemnitee to indemnification for the fees and expenses of separate counsel have occurred) or (ii) the Corporation determines within such 60-day period that Indemnitee did not meet the applicable standard of conduct set forth in Section 1, 2 or 5 of this Article EIGHTH, as the case may be. Any such indemnification, unless ordered by a court, shall be made with respect to requests under Section 1 or 2 only as authorized in the specific case upon a determination by the Corporation that the indemnification of Indemnitee is proper because Indemnitee has met the applicable standard of conduct set forth in Section 1 or 2, as the case may be. Such determination shall be made in each instance (a) by a majority vote of the directors of the Corporation consisting of persons who are not at that time parties to the action, suit or proceeding in question (“disinterested directors”), whether or not a quorum, (b) by a committee of disinterested directors designated by majority vote of disinterested directors, whether or not a quorum, (c) if there are no disinterested directors, or if the disinterested directors so direct, by independent legal counsel (who may, to the extent permitted by law, be regular legal counsel to the Corporation) in a written opinion, or (d) by the stockholders of the Corporation.

7. Remedies. The right to indemnification or advancement of expenses as granted by this Article EIGHTH shall be enforceable by Indemnitee in any court of competent jurisdiction. Neither the failure of the Corporation to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Section 6 of this Article EIGHTH that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct. In any suit brought by Indemnitee to enforce a right to indemnification, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall have the burden of proving that Indemnitee is not entitled to be indemnified, or to such advancement of expenses,

-6-

under this Article EIGHTH. Indemnitee’s expenses (including attorneys’ fees) reasonably incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation. Notwithstanding the foregoing, in any suit brought by Indemnitee to enforce a right to indemnification hereunder it shall be a defense that the Indemnitee has not met any applicable standard for indemnification set forth in the General Corporation Law of the State of Delaware.

8. Limitations. Notwithstanding anything to the contrary in this Article EIGHTH, except as set forth in Section 7 of this Article EIGHTH, the Corporation shall not indemnify an Indemnitee pursuant to this Article EIGHTH in connection with a proceeding (or part thereof) initiated by such Indemnitee unless the initiation thereof was approved by the Board of Directors of the Corporation. Notwithstanding anything to the contrary in this Article EIGHTH, the Corporation shall not indemnify an Indemnitee to the extent such Indemnitee is reimbursed from the proceeds of insurance, and in the event the Corporation makes any indemnification payments to an Indemnitee and such Indemnitee is subsequently reimbursed from the proceeds of insurance, such Indemnitee shall promptly refund indemnification payments to the Corporation to the extent of such insurance reimbursement.

9. Subsequent Amendment. No amendment, termination or repeal of this Article EIGHTH or of the relevant provisions of the General Corporation Law of the State of Delaware or any other applicable laws shall adversely affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal.

10. Other Rights. The indemnification and advancement of expenses provided by this Article EIGHTH shall not be deemed exclusive of any other rights to which an Indemnitee seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), agreement or vote of stockholders or disinterested directors or otherwise, both as to action in Indemnitee’s official capacity and as to action in any other capacity while holding office for the Corporation, and shall continue as to an Indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administrators of Indemnitee. Nothing contained in this Article EIGHTH shall be deemed to prohibit, and the Corporation is specifically authorized to enter into, agreements with officers and directors providing indemnification rights and procedures different from those set forth in this Article EIGHTH. In addition, the Corporation may, to the extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article EIGHTH.

11. Partial Indemnification. If an Indemnitee is entitled under any provision of this Article EIGHTH to indemnification by the Corporation for some or a portion of the expenses (including attorneys’ fees), liabilities, losses, judgments, fines (including excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974) or amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with any action, suit, proceeding or investigation and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of

-7-

such expenses (including attorneys’ fees), liabilities, losses, judgments, fines (including excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974) or amounts paid in settlement to which Indemnitee is entitled.

12. Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) against any expense, liability or loss incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware.

13. Savings Clause. If this Article EIGHTH or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Indemnitee as to any expenses (including attorneys’ fees), liabilities, losses, judgments, fines (including excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974) and amounts paid in settlement in connection with any action, suit, proceeding or investigation, whether civil, criminal or administrative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article EIGHTH that shall not have been invalidated and to the fullest extent permitted by applicable law.

14. Definitions. Terms used herein and defined in Section 145(h) and Section 145(i) of the General Corporation Law of the State of Delaware shall have the respective meanings assigned to such terms in such Section 145(h) and Section 145(i).

NINTH: This Article NINTH is inserted for the management of the business and for the conduct of the affairs of the Corporation.

1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

2. Number of Directors; Election of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of directors of the Corporation shall be established by the Board of Directors. Election of directors need not be by written ballot, except as and to the extent provided in the Bylaws of the Corporation.

3. Classes of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of Directors shall be and is divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The Board of Directors is authorized to assign members of the Board of Directors already in office to Class I, Class II or Class III at the time such classification becomes effective.

4. Terms of Office. Subject to the rights of holders of any series of Preferred Stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class I shall serve for a term expiring at

-8-

the Corporation’s first annual meeting of stockholders held after the effectiveness of this Restated Certificate of Incorporation; each director initially assigned to Class II shall serve for a term expiring at the Corporation’s second annual meeting of stockholders held after the effectiveness of this Restated Certificate of Incorporation; and each director initially assigned to Class III shall serve for a term expiring at the Corporation’s third annual meeting of stockholders held after the effectiveness of this Restated Certificate of Incorporation; provided further, that the term of each director shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, resignation or removal.

5. Quorum. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors fixed pursuant to Section 2 of this Article NINTH shall constitute a quorum of the Board of Directors. If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

6. Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law or by this Certificate of Incorporation.

7. Removal. Subject to the rights of holders of any series of Preferred Stock, directors of the Corporation may be removed only for cause and only by the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors.

8. Vacancies. Subject to the rights of holders of any series of Preferred Stock, any vacancy or newly created directorship in the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. A director elected to fill a vacancy shall hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification of a successor and to such director’s earlier death, resignation or removal.

9. Stockholder Nominations and Introduction of Business, Etc. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws of the Corporation.

10. Amendments to Article. Notwithstanding any other provisions of law, this Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article NINTH.

-9-

TENTH: Stockholders of the Corporation may not take any action by written consent in lieu of a meeting. Notwithstanding any other provisions of law, this Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article TENTH.

ELEVENTH: Special meetings of stockholders for any purpose or purposes may be called at any time by only the Board of Directors, the Chairman of the Board or the Chief Executive Officer, and may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. Notwithstanding any other provisions of law, this Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article ELEVENTH.

IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which restates, integrates and amends the certificate of incorporation of the Corporation, and which has been duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, has been executed by its duly authorized officer this day of , 2012.


DURATA THERAPEUTICS, INC.

By:
	Name:	Paul Edick
	Title:	Chief Executive Officer

-10-

EX-3.4 3 d312438dex34.htm AMENDED AND RESTATED BY-LAWS OF THE REGISTRANT Amended and Restated By-laws of the Registrant

Exhibit 3.4

AMENDED AND RESTATED BYLAWS

DURATA THERAPEUTICS, INC.

TABLE OF CONTENTS


			Page
ARTICLE I STOCKHOLDERS

	1.1	Place of Meetings		1

	1.2	Annual Meeting		1

	1.3	Special Meetings		1

	1.4	Notice of Meetings		1

	1.5	Voting List		2

	1.6	Quorum		2

	1.7	Adjournments		3

	1.8	Voting and Proxies		3

	1.9	Action at Meeting		3

	1.10	Nomination of Directors		4

	1.11	Notice of Business at Annual Meetings		8

	1.12	Conduct of Meetings		11

	1.13	No Action by Consent in Lieu of a Meeting		12

ARTICLE II

DIRECTORS

	2.1	General Powers		13

	2.2	Number, Election and Qualification		13

	2.3	Chairman of the Board; Vice Chairman of the Board		13

	2.4	Classes of Directors		13

	2.5	Terms of Office		13

	2.6	Quorum		14

	2.7	Action at Meeting		14

	2.8	Removal		14



	2.9	Vacancies	14

	2.10	Resignation	15

	2.11	Regular Meetings	15

	2.12	Special Meetings	15

	2.13	Notice of Special Meetings	15

	2.14	Meetings by Conference Communications Equipment	15

	2.15	Action by Consent	16

	2.16	Committees	16

	2.17	Compensation of Directors	17

ARTICLE III

OFFICERS

	3.1	Titles	17

	3.2	Election	17

	3.3	Qualification	17

	3.4	Tenure	17

	3.5	Resignation and Removal	17

	3.6	Vacancies	18

	3.7	President; Chief Executive Officer	18

	3.8	Vice Presidents	18

	3.9	Secretary and Assistant Secretaries	19

	3.10	Treasurer and Assistant Treasurers	19

	3.11	Salaries	20

	3.12	Delegation of Authority	20

ARTICLE IV

CAPITAL STOCK

	4.1	Issuance of Stock	20

	4.2	Stock Certificates; Uncertificated Shares	20

	4.3	Transfers	21



	4.4	Lost, Stolen or Destroyed Certificates	22

	4.5	Record Date	22

	4.6	Regulations	23

ARTICLE V

GENERAL PROVISIONS

	5.1	Fiscal Year	23

	5.2	Corporate Seal	23

	5.3	Waiver of Notice	23

	5.4	Voting of Securities	23

	5.5	Evidence of Authority	23

	5.6	Certificate of Incorporation	24

	5.7	Severability	24

	5.8	Pronouns	24

ARTICLE VI

AMENDMENTS			24

iii

ARTICLE I

STOCKHOLDERS

1.1 Place of Meetings. All meetings of stockholders shall be held at such place as may be designated from time to time by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President or, if not so designated, at the principal office of the corporation.

1.2 Annual Meeting. The annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time designated by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President (which date shall not be a legal holiday in the place where the meeting is to be held).

1.3 Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by only the Board of Directors, the Chairman of the Board or the Chief Executive Officer, and may not be called by any other person or persons. The Board of Directors may postpone or reschedule any previously scheduled special meeting of stockholders. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

1.4 Notice of Meetings. Except as otherwise provided by law, notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the General Corporation Law of the State of Delaware) by the stockholder to whom the notice is given. The notices of all meetings shall state the place, date and time of the meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If notice is given by mail, such notice shall be deemed given when deposited in the United States mail, postage

prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. If notice is given by electronic transmission, such notice shall be deemed given at the time specified in Section 232 of the General Corporation Law of the State of Delaware.

1.5 Voting List. The Secretary shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

1.6 Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the holders of a majority in voting power of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at the meeting, present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors in its sole discretion, or represented by proxy, shall constitute a quorum for the transaction of business; provided, however, that where a separate vote by a class or classes or series of capital stock is required by law or the Certificate of Incorporation, the holders of a majority in voting power of the shares of such class or classes or series of the capital stock of the corporation issued and outstanding and entitled to vote on such matter, present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors in its sole discretion, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.

1.7 Adjournments. Any meeting of stockholders may be adjourned from time to time to any other time and to any other place at which a meeting of stockholders may be held under these Bylaws by the chairman of the meeting or by the stockholders present or represented at the meeting and entitled to vote, although less than a quorum. It shall not be necessary to notify any stockholder of any adjournment of less than 30 days if the time and place of the adjourned meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

1.8 Voting and Proxies. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law or the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person (including by means of remote communications, if any, by which stockholders may be deemed to be present in person and vote at such meeting) or may authorize another person or persons to vote for such stockholder by a proxy executed or transmitted in a manner permitted by the General Corporation Law of the State of Delaware by the stockholder or such stockholder’s authorized agent and delivered (including by electronic transmission) to the Secretary of the corporation. No such proxy shall be voted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period.

1.9 Action at Meeting. When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting shall be decided by the vote of the holders of shares of stock having a majority in voting power of the votes cast by the holders of all of the shares of stock present or represented at the meeting and voting affirmatively or negatively on such matter (or if there are two or more classes or series of stock entitled to vote as separate classes, then in the case of each such class or series, the holders of a majority in voting power of the shares of stock of that class or series present or represented at the meeting and voting affirmatively or negatively on such matter), except when a different vote is required by law, the Certificate of Incorporation or these Bylaws. When a quorum is present at any meeting, any election by stockholders of directors shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election.

1.10 Nomination of Directors.

(a) Except for (1) any directors entitled to be elected by the holders of preferred stock, (2) any directors elected in accordance with Section 2.9 hereof by the Board of Directors to fill a vacancy or newly-created directorship or (3) as otherwise required by applicable law or stock exchange regulation, at any meeting of stockholders, only persons who are nominated in accordance with the procedures in this Section 1.10 shall be eligible for election as directors. Nomination for election to the Board of Directors at a meeting of stockholders may be made (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who (x) timely complies with the notice procedures in Section 1.10(b), (y) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting and (z) is entitled to vote at such meeting.

(b) To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation as follows: (i) in the case of an election of directors at an annual meeting of stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (x) in the case of the annual meeting of stockholders of the corporation to be held in 2013 or (y) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs; or (ii) in the case of an election of directors at a special meeting of stockholders, provided that the Board of Directors, the Chairman of the Board or the Chief Executive Officer has determined, in accordance with Section 1.3, that directors shall be elected at such special meeting and provided further that the nomination made by the

stockholder is for one of the director positions that the Board of Directors, the Chairman of the Board or the Chief Executive Officer, as the case may be, has determined will be filled at such special meeting, not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of (x) the 90th day prior to such special meeting and (y) the tenth day following the day on which notice of the date of such special meeting was mailed or public disclosure of the date of such special meeting was made, whichever first occurs. In no event shall the adjournment or postponement of a meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth: (A) as to each proposed nominee (1) such person’s name, age, business address and, if known, residence address, (2) such person’s principal occupation or employment, (3) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such person, (4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among (x) the stockholder, the beneficial owner, if any, on whose behalf the nomination is being made and the respective affiliates and associates of, or others acting in concert with, such stockholder and such beneficial owner, on the one hand, and (y) each proposed nominee, and his or her respective affiliates and associates, or others acting in concert with such nominee(s), on the other hand, including all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made or any affiliate or associate thereof or person acting in concert therewith were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant, and (5) any other information concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made (1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a

description of any agreement, arrangement or understanding between or among such stockholder and/or such beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are being made or who may participate in the solicitation of proxies in favor of electing such nominee(s), (4) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder or such beneficial owner, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner with respect to shares of stock of the corporation, (5) any other information relating to such stockholder and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (6) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person(s) named in its notice and (7) a representation whether such stockholder and/or such beneficial owner intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock reasonably believed by such stockholder or such beneficial owner to be sufficient to elect the nominee (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies from stockholders in support of such nomination (and such representation shall be included in any such solicitation materials). Not later than 10 days after the record date for the meeting, the information required by Items (A)(1)-(5) and (B)(1)-(5) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. In addition, to be effective, the stockholder’s notice must be accompanied by the written consent of the proposed nominee to serve as a director if elected. The corporation may require any proposed nominee to furnish such other information as the corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the corporation or whether such nominee would be independent under applicable Securities and Exchange Commission and stock exchange rules and the corporation’s publicly disclosed

corporate governance guidelines. A stockholder shall not have complied with this Section 1.10(b) if the stockholder (or beneficial owner, if any, on whose behalf the nomination is made) solicits or does not solicit, as the case may be, proxies in support of such stockholder’s nominee in contravention of the representations with respect thereto required by this Section 1.10.

(c) The chairman of any meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 1.10 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee in compliance with the representations with respect thereto required by this Section 1.10), and if the chairman should determine that a nomination was not made in accordance with the provisions of this Section 1.10, the chairman shall so declare to the meeting and such nomination shall not be brought before the meeting.

(d) Except as otherwise required by law, nothing in this Section 1.10 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any nominee for director submitted by a stockholder.

(e) Notwithstanding the foregoing provisions of this Section 1.10, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present a nomination, such nomination shall not be brought before the meeting, notwithstanding that proxies in respect of such nominee may have been received by the corporation. For purposes of this Section 1.10, to be considered a “qualified representative of the stockholder”, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.

(f) For purposes of this Section 1.10, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

1.11 Notice of Business at Annual Meetings.

(a) At any annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (2) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (3) properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, (i) if such business relates to the nomination of a person for election as a director of the corporation, the procedures in Section 1.10 must be complied with and (ii) if such business relates to any other matter, the business must constitute a proper matter under Delaware law for stockholder action and the stockholder must (x) have given timely notice thereof in writing to the Secretary in accordance with the procedures in Section 1.11(b), (y) be a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (z) be entitled to vote at such annual meeting.

(b) To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (x) in the case of the annual meeting of stockholders of the corporation to be held in 2013 or (y) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an annual meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth: (A) as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting, (2) the text of the proposal (including the exact text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Bylaws, the exact text of the proposed amendment), and (3) the reasons for conducting such business at the annual meeting, and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being made (1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a description of any material interest of such stockholder or such beneficial owner and the respective affiliates and associates of, or others acting in concert with, such stockholder or such beneficial owner in such business, (4) a description of any agreement, arrangement or understanding between or among such stockholder and/or such beneficial owner and any other person or persons (including their names) in connection with the proposal of such business or who may participate in the solicitation of proxies in favor of such proposal, (5) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder or such beneficial owner, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner with respect to shares of stock of the corporation, (6) any other information relating to such stockholder and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the business proposed pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (7) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting and (8) a representation whether such stockholder and/or such beneficial owner intends or is part of a group which intends (x) to deliver a proxy statement

and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the proposal (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies from stockholders in support of such proposal (and such representation shall be included in any such solicitation materials). Not later than 10 days after the record date for the meeting, the information required by Items (A)(3) and (B)(1)-(6) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting of stockholders except in accordance with the procedures in this Section 1.11; provided that any stockholder proposal which complies with Rule 14a-8 of the proxy rules (or any successor provision) promulgated under the Exchange Act and is to be included in the corporation’s proxy statement for an annual meeting of stockholders shall be deemed to comply with the notice requirements of this Section 1.11. A stockholder shall not have complied with this Section 1.11(b) if the stockholder (or beneficial owner, if any, on whose behalf the proposal is made) solicits or does not solicit, as the case may be, proxies in support of such stockholder’s proposal in contravention of the representations with respect thereto required by this Section 1.11.

(c) The chairman of any annual meeting shall have the power and duty to determine whether business was properly brought before the annual meeting in accordance with the provisions of this Section 1.11 (including whether the stockholder or beneficial owner, if any, on whose behalf the proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s proposal in compliance with the representation with respect thereto required by this Section 1.11), and if the chairman should determine that business was not properly brought before the annual meeting in accordance with the provisions of this Section 1.11, the chairman shall so declare to the meeting and such business shall not be brought before the annual meeting.

(d) Except as otherwise required by law, nothing in this Section 1.11 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any proposal submitted by a stockholder.

(e) Notwithstanding the foregoing provisions of this Section 1.11, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting to present business, such business shall not be considered, notwithstanding that proxies in respect of such business may have been received by the corporation.

(f) For purposes of this Section 1.11, the terms “qualified representative of the stockholder” and “public disclosure” shall have the same meaning as in Section 1.10.

1.12 Conduct of Meetings.

(a) Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the Chairman’s absence by the Vice Chairman of the Board, if any, or in the Vice Chairman’s absence by the Chief Executive Officer, or in the Chief Executive Officer’s absence, by the President, or in the President’s absence by a Vice President, or in the absence of all of the foregoing persons by a chairman designated by the Board of Directors. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

(b) The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as

shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

(c) The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.

(d) In advance of any meeting of stockholders, the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.

1.13 No Action by Consent in Lieu of a Meeting. Stockholders of the corporation may not take any action by written consent in lieu of a meeting.

ARTICLE II

DIRECTORS

2.1 General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by law or the Certificate of Incorporation.

2.2 Number, Election and Qualification. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of directors of the corporation shall be established by the Board of Directors. Election of directors need not be by written ballot. Directors need not be stockholders of the corporation.

2.3 Chairman of the Board; Vice Chairman of the Board. The Board of Directors may appoint from its members a Chairman of the Board and a Vice Chairman of the Board, neither of whom need be an employee or officer of the corporation. If the Board of Directors appoints a Chairman of the Board, such Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors and, if the Chairman of the Board is also designated as the corporation’s Chief Executive Officer, shall have the powers and duties of the Chief Executive Officer prescribed in Section 3.7 of these Bylaws. If the Board of Directors appoints a Vice Chairman of the Board, such Vice Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors. Unless otherwise provided by the Board of Directors, the Chairman of the Board or, in the Chairman’s absence, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors.

2.4 Classes of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of Directors shall be and is divided into three classes: Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The allocation of directors among classes shall be determined by resolution of the Board of Directors.

2.5 Terms of Office. Subject to the rights of holders of any series of Preferred Stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class I shall serve for a term expiring at the corporation’s first annual meeting of stockholders held after the effectiveness of these Amended and Restated Bylaws; each director initially assigned to Class II shall serve for a term

expiring at the corporation’s second annual meeting of stockholders held after the effectiveness of these Amended and Restated Bylaws; and each director initially assigned to Class III shall serve for a term expiring at the corporation’s third annual meeting of stockholders held after the effectiveness of these Amended and Restated Bylaws; provided further, that the term of each director shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, resignation or removal.

2.6 Quorum. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors established by the Board of Directors pursuant to Section 2.2 of these Bylaws shall constitute a quorum of the Board of Directors. If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.7 Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number is required by law or by the Certificate of Incorporation.

2.8 Removal. Subject to the rights of holders of any series of Preferred Stock, directors of the corporation may be removed only for cause and only by the affirmative vote of the holders of at least 75% of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors.

2.9 Vacancies. Subject to the rights of holders of any series of Preferred Stock, any vacancy or newly-created directorship on the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. A director elected to fill a vacancy shall hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification of a successor or until such director’s earlier death, resignation or removal.

2.10 Resignation. Any director may resign by delivering a resignation in writing or by electronic transmission to the corporation at its principal office or to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event.

2.11 Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.

2.12 Special Meetings. Special meetings of the Board of Directors may be held at any time and place designated in a call by the Chairman of the Board, the Chief Executive Officer, the President, two or more directors, or by one director in the event that there is only a single director in office.

2.13 Notice of Special Meetings. Notice of the date, place and time of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (a) in person or by telephone at least 24 hours in advance of the meeting, (b) by sending written notice by reputable overnight courier, telecopy, facsimile or electronic transmission, or delivering written notice by hand, to such director’s last known business, home or electronic transmission address at least 48 hours in advance of the meeting, or (c) by sending written notice by first-class mail to such director’s last known business or home address at least 72 hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.

2.14 Meetings by Conference Communications Equipment. Directors may participate in meetings of the Board of Directors or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.

2.15 Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent to the action in writing or by electronic transmission, and the written consents or electronic transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

2.16 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation with such lawfully delegable powers and duties as the Board of Directors thereby confers, to serve at the pleasure of the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these Bylaws for the Board of Directors. Except as otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

2.17 Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary entities in any other capacity and receiving compensation for such service.

ARTICLE III

OFFICERS

3.1 Titles. The officers of the corporation shall consist of a Chief Executive Officer, a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine, including one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.

3.2 Election. The Chief Executive Officer, President, Treasurer and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting.

3.3 Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4 Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office until such officer’s successor is elected and qualified, unless a different term is specified in the resolution electing or appointing such officer, or until such officer’s earlier death, resignation or removal.

3.5 Resignation and Removal. Any officer may resign by delivering a written resignation to the corporation at its principal office or to the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer may be removed at any time, with or without cause, by vote of a majority of the directors then in office.

Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following such officer’s resignation or removal, or any right to damages on account of such removal, whether such officer’s compensation be by the month or by the year or otherwise, unless such compensation is expressly provided for in a duly authorized written agreement with the corporation.

3.6 Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of Chief Executive Officer, President, Treasurer and Secretary. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is elected and qualified, or until such officer’s earlier death, resignation or removal.

3.7 President; Chief Executive Officer. Unless the Board of Directors has designated another person as the corporation’s Chief Executive Officer, the President shall be the Chief Executive Officer of the corporation. The Chief Executive Officer shall have general charge and supervision of the business of the corporation subject to the direction of the Board of Directors, and shall perform all duties and have all powers that are commonly incident to the office of chief executive or that are delegated to such officer by the Board of Directors. The President shall perform such other duties and shall have such other powers as the Board of Directors or the Chief Executive Officer (if the President is not the Chief Executive Officer) may from time to time prescribe. In the event of the absence, inability or refusal to act of the Chief Executive Officer or the President (if the President is not the Chief Executive Officer), the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform the duties of the Chief Executive Officer and when so performing such duties shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer.

3.8 Vice Presidents. Each Vice President shall perform such duties and possess such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

3.9 Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.

Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.

In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the chairman of the meeting shall designate a temporary secretary to keep a record of the meeting.

3.10 Treasurer and Assistant Treasurers. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned by the Board of Directors or the Chief Executive Officer. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these Bylaws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation.

The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.

3.11 Salaries. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.

3.12 Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

ARTICLE IV

CAPITAL STOCK

4.1 Issuance of Stock. Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any shares of the authorized capital stock of the corporation held in the corporation’s treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such lawful consideration and on such terms as the Board of Directors may determine.

4.2 Stock Certificates; Uncertificated Shares. The shares of the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the corporation’s stock shall be uncertificated shares. Every holder of stock of the corporation represented by certificates shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, representing the number of shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with Section 158 of the General Corporation Law of the State of Delaware.

Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these Bylaws, applicable securities laws or any agreement among any number of stockholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of each certificate representing shares of such class or series of stock, provided that in lieu of the foregoing requirements there may be set forth on the face or back of each certificate representing shares of such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests a copy of the full text of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 202(a) or 218(a) of the General Corporation Law of the State of Delaware or, with respect to Section 151 of General Corporation Law of the State of Delaware, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

4.3 Transfers. Shares of stock of the corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of shares of stock of the corporation shall be made only on the books of the corporation or by transfer agents designated to transfer shares of stock of the corporation. Subject to applicable law, shares of stock represented by certificates shall be transferred only on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require.

Except as may be otherwise required by law, by the Certificate of Incorporation or by these Bylaws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these Bylaws.

4.4 Lost, Stolen or Destroyed Certificates. The corporation may issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity and posting of such bond as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.

4.5 Record Date. The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not precede the date on which the resolution fixing the record date is adopted, and such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.

If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. If no record date is fixed, the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

4.6 Regulations. The issue, transfer, conversion and registration of shares of stock of the corporation shall be governed by such other regulations as the Board of Directors may establish.

ARTICLE V

GENERAL PROVISIONS

5.1 Fiscal Year. Except as from time to time otherwise designated by the Board of Directors, the fiscal year of the corporation shall begin on the first day of January of each year and end on the last day of December in each year.

5.2 Corporate Seal. The corporate seal shall be in such form as shall be approved by the Board of Directors.

5.3 Waiver of Notice. Whenever notice is required to be given by law, by the Certificate of Incorporation or by these Bylaws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

5.4 Voting of Securities. Except as the Board of Directors may otherwise designate, the Chief Executive Officer, the President or the Treasurer may waive notice of, vote, or appoint any person or persons to vote, on behalf of the corporation at, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at, any meeting of stockholders or securityholders of any other entity, the securities of which may be held by this corporation.

5.5 Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

5.6 Certificate of Incorporation. All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.

5.7 Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.

5.8 Pronouns. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

ARTICLE VI

AMENDMENTS

These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the Board of Directors or by the stockholders as provided in the Certificate of Incorporation.

EX-10.2 4 d312438dex102.htm FORM OF STOCK OPTION AGREEMENT UNDER THE STOCK INCENTIVE PLAN Form of Stock Option Agreement under the Stock Incentive Plan

Exhibit 10.2

DURATA THERAPEUTICS, INC.

STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (this “Option Agreement”) dated XX by and between Durata Therapeutics, Inc., a Delaware corporation (the “Corporation”), and XX (the “Participant”) evidences the stock option (the “Option”) granted by the Corporation to the Participant as to the number of shares of the Corporation’s Common Stock, par value $0.01 per share, first set forth below.

Number of Shares of Common Stock:¹

Award Date: XX

Exercise Price per Share:¹

$XX

Expiration Date:^1,² XX

Vesting Commencement Date:

Type of Option (check one):

Nonqualified Stock Option

Incentive Stock Option

Vesting^1,2The Option shall become vested as to XX. Notwithstanding the foregoing, this Option may be “early exercised” to the extent permitted by the Board of Directors of the Corporation pursuant to Section 5.8 of the Plan (defined below) upon execution by the Participant of the Restricted Stock Award Agreement attached hereto as Exhibit B.

The Option is granted under the Durata Therapeutics, Inc. Stock Incentive Plan (the “Plan”) and subject to the Terms and Conditions of Stock Option (the “Terms”) attached to this Option Agreement (incorporated herein by this reference) and to the Plan. The Option has been granted to the Participant in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Participant. Capitalized terms are defined in the Plan if not defined herein. The parties agree to the terms of the Option set forth herein. The Participant acknowledges receipt of a copy of the Terms, the Plan and the Stock Option Questions & Answers for the Plan, specifically acknowledges and agrees to Section 13 of the Terms, and agrees to maintain in confidence all information provided to him/her in connection with the Option.


“PARTICIPANT”				DURATA THERAPEUTICS, INC., a Delaware corporation

Signature
				By:
Print Name
				Its:
Address

City, State, Zip Code

CONSENT OF SPOUSE

In consideration of the Corporation’s execution of this Option Agreement, the undersigned spouse of the Participant agrees to be bound by all of the terms and provisions hereof and of the Plan.



Signature of Spouse				Date

¹	Subject to adjustment under Section 7.3.1 of the Plan.

²	Subject to early termination under Section 5.6 or 7.3 of the Plan.

TERMS AND CONDITIONS OF STOCK OPTION

1.	Vesting; Limits on Exercise.

The Option shall vest and, except as provided in this Section 1, become exercisable in percentage installments of the aggregate number of shares subject to the Option as set forth on the cover page of this Option Agreement. The Option may be exercised only to the extent the Option is vested and exercisable.

•

Effect of Change in Control on Vesting. [If a Qualifying Change in Control (as such term is defined in Exhibit 3) occurs while the Participant is an employee of the Company and the Participant is not offered continued employment with the Company (or the acquiring or resulting entity as a result of such Qualifying Change in Control) following the consummation of such Qualifying Change in Control, the Option, to the extent then outstanding and not vested, shall become fully vested upon (or to the extent appropriate to give effect to such accelerated vesting, immediately prior to) such Qualifying Change in Control. If, however, a Change in Control (as defined in Exhibit 3) occurs and the prior sentence does not apply, the Option, to the extent then outstanding and not vested, shall become vested as to an additional portion of the Option such that 50% of the total number of shares then subject to the Option that have not yet become vested as of such Change in Control shall become vested upon (or to the extent appropriate to give effect to such accelerated vesting, immediately prior to) such Change in Control.] [OR] [If a Qualifying Change in Control (as such term is defined in Exhibit 3) occurs while the Participant is an a member of the Board of Directors of the Company, then the Option shall become fully vested upon such Qualifying Change in Control.]

•

Exercisability. Notwithstanding anything contained in the Plan or this Option Agreement to the contrary, the Option may not be exercised at any time prior to the first to occur of (i) a Termination Event (as such term is defined in that certain Stockholders and Subscription Agreement of Durata Therapeutics, Inc., dated as of December 11, 2009, as amended from time to time, by and among the Corporation and the other parties thereto) or (ii) the Participant’s Severance Date (the first of such events to occur, the “Triggering Event”). Upon the occurrence of the Triggering Event, a portion of the Option (whether or not vested) shall terminate upon (or to the extent appropriate to give effect to such forfeiture, immediately prior to) such event, such portion of the Option to be determined by multiplying the total number of shares subject to the Option at such time by the Forfeiture Percentage (in the event that any portion of the Option is unvested on the Triggering Event, the portion of the Option that shall terminate shall be determined proportionately against the vested and unvested portion of the Option and, as to any unvested portion, proportionately as to any remaining vesting installments). The “Forfeiture Percentage” shall mean the percentage derived by dividing (a) the total amount obtained by subtracting the amount, as of the Triggering Event, that the Investors have funded pursuant to their original funding commitment of $XX from the aggregate initial funding commitment of the Investors of $XX (the “Funding Commitment”) by (b) the total Funding

Commitment. The portion of the Option that remains outstanding after application of the Forfeiture Percentage shall, subject to the vesting requirements set forth above, be exercisable on or following the Triggering Event (subject to the Expiration Date of the Option or early termination of the Option pursuant to Section 4 below). The remainder of the Option shall terminate upon the Triggering Event and the Participant shall have no further rights with respect thereto. For purposes of clarity and by way of example only, if on the occurrence of the Triggering Event the Option is fully vested and the Forfeiture Percentage is 30% (because the Investors, as of that Triggering Event, have funded only $XX of the Funding Commitment of $XX), the Participant will be entitled to exercise 70% of the Option on or after the Triggering Event and the remaining 30% of the Option will terminate at such time. For purposes of this Option Agreement, the term “Investors” shall mean Domain Partners VIII, L.P., DP VIII Associates, L.P., New Leaf Ventures II, L.P., Canaan VIII, L.P., Aisling Capital III, L.P., and Sofinnova Venture Partners VII, L.P.

•

Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Participant has the right to exercise the Option (to the extent not previously exercised), and such right shall continue, until the expiration or earlier termination of the Option.

•

No Fractional Shares. Fractional share interests shall be disregarded, but may be cumulated.

•

Minimum Exercise. No fewer than 100 shares of Common Stock (subject to adjustment under Section 7.3.1 of the Plan) may be purchased at any one time, unless the number purchased is the total number at the time exercisable under the Option.

•

ISO Value Limit. If the Option is designated as an Incentive Stock Option (an “ISO”), as indicated on the cover page of this Option Agreement, and if the aggregate fair market value of the shares with respect to which ISOs (whether granted under the Option or otherwise) first become exercisable by the Participant in any calendar year exceeds $100,000, as measured on the applicable Award Dates, the limitations of Section 5.5.1 of the Plan shall apply and to such extent the Option will be rendered a Nonqualified Stock Option.

2.	Continuance of Employment/Service Required; No Employment/Service Commitment.

Except as provided in Section 1 of this Agreement, the vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Option and the rights and benefits under this Option Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan.

- 2 -

Nothing contained in this Option Agreement or the Plan constitutes a continued employment or service commitment by the Corporation or any of its Affiliates, affects the Participant’s status, if he or she is an employee, as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Corporation or any Affiliate, interferes in any way with the right of the Corporation or any Affiliate at any time to terminate such employment or service, or affects the right of the Corporation or any Affiliate to increase or decrease the Participant’s other compensation.

3.	Method of Exercise of Option.

The Option shall be exercisable by the delivery to the Secretary of the Corporation (or such other person as the Administrator may require pursuant to such administrative exercise procedures as the Administrator may implement from time to time) of:

•

an executed Exercise Agreement (stating the number of shares of Common Stock to be purchased pursuant to the Option) in substantially the form attached hereto as Exhibit A or such other form as the Administrator may require from time to time (the “Exercise Agreement”), pursuant to which the Participant will become a party to, and be obligated to comply with the terms and conditions of that certain Right of First Refusal, Drag-Along and Co-Sale Agreement of Durata Therapeutics, Inc., dated as of December 11, 2009, as amended from time to time, by and among the Corporation and the other parties thereto (the “Co-Sale Agreement”) and that certain Common Holder Voting Agreement of Durata Therapeutics, Inc., dated as of December 11, 2009, as amended from time to time, by and among the Corporation and the other parties thereto, (the “Voting Agreement”), unless such requirement to be bound by the Co-Sale Agreement and Voting Agreement is expressly waived by the Administrator;

•

payment in full for the Exercise Price of the shares to be purchased, in cash or by electronic funds transfer to the Corporation, or by certified or cashier’s check payable to the order of the Corporation subject to such specific procedures or directions as the Administrator may establish;

•

any written statements or agreements required pursuant to Section 7.5.1 of the Plan;

•

satisfaction of the tax withholding provisions of Section 7.6.1 of the Plan;

The Administrator also may, but is not required to, authorize a non-cash payment alternative specified below at or prior to the time of exercise. In which case, the Exercise Price and/or applicable withholding taxes, to the extent so authorized, may be paid in full or in part by delivery to the Corporation of:

•

shares of Common Stock already owned by the Participant, valued at their Fair Market Value on the exercise date; and/or

- 3 -

•

if the Common Stock is then registered under the Exchange Act and listed or quoted on a recognized national securities exchange, irrevocable instructions to a broker to, upon exercise of the Option, promptly sell a sufficient number of shares of Common Stock acquired upon exercise of the Option and deliver to the Corporation the amount necessary to pay the Exercise Price (and, if applicable, the amount of any related tax withholding obligations); and/or

•

a note meeting the requirements of Section 5.3.3 of the Plan (or, in the case of tax loans, Section 7.6.2 of the Plan).

An Option will qualify as an ISO only if it meets all of the applicable requirements of the Code. If the Option is designated as an ISO, the Option may be rendered a Nonqualified Stock Option if the Administrator permits the use of one or more of the non-cash payment alternatives referenced above.

Notwithstanding anything herein to the contrary, the Participant may exercise the Option prior to the vesting of such Option to the extent permitted by the Board of Directors of the Corporation, provided that the Participant satisfies the requirements for exercise set forth above and otherwise herein, and executes, with respect to any unvested portion of the Option, the Restricted Stock Award Agreement attached hereto as Exhibit B.

4.	Early Termination of Option.

The Option, to the extent not previously exercised, and all other rights in respect thereof, whether vested and exercisable or not, shall terminate and become null and void prior to the Expiration Date in the event of:

•

the termination of the Participant’s employment or services as provided in Section 5.6 of the Plan, or

•

the termination of the Option pursuant to Section 7.3 of the Plan.

All or a portion of the Option is also subject to termination prior to the Expiration Date pursuant to Section 1 of these Terms.

[Notwithstanding any post-termination exercise period provided for herein or in the Plan, an Option will qualify as an ISO only if it is exercised within the applicable exercise periods for ISOs under, and meets all of the other requirements of, the Code. If the Option is designated as an ISO and is not exercised within the applicable exercise periods for ISOs or does not meet such other requirements, the Option will be rendered a Nonqualified Stock Option. Further, upon the Participant’s termination for any reason other than Cause (as defined in the Plan), the Participant shall be entitled to exercise the vested portion of the Option until the earlier of (i) the XX-month anniversary of the Participant’s termination and (ii) the Expiration Date of the Option.] [OR] [Notwithstanding any post-termination exercise period provided for herein or in the Plan, upon the Participant’s retirement from the Board of Directors for any reason other than Cause (as defined in the Plan), the Participant shall be entitled to exercise the vested portion of the Option until the earlier of (i) the XX-month anniversary of the Participant’s retirement from the Board of Directors and (ii) the Expiration Date of the Option.]

- 4 -

5.	Non-Transferability and Other Restrictions.

The Option and any other rights of the Participant under this Option Agreement or the Plan are nontransferable and exercisable only by the Participant, except as set forth in Section 7.2 of the Plan. Any shares of Common Stock issued on exercise of the Option are subject to substantial restrictions on transfer, and are subject to call, rights of first refusal, and other rights in favor of the Corporation as set forth herein, in the Exercise Agreement, in the Voting Agreement (as applicable), in the Co-Sale Agreement (as applicable), and in the Restricted Stock Award Agreement (as applicable). The restrictions imposed on any such shares pursuant to the Voting Agreement and the Co-Sale Agreement are in addition to, and not in lieu of, any restrictions and repurchase rights imposed on such shares pursuant to the Plan, the Restricted Stock Award Agreement (as applicable) and this Option Agreement.

6.	Securities Law Compliance.

The Participant acknowledges that the Option and the shares of Common Stock are not being registered under the Securities Act, based, in part, in reliance upon an exemption from registration under Securities and Exchange Commission Rule 701 promulgated under the Securities Act, and a comparable exemption from qualification under applicable state securities laws, as each may be amended from time to time. The Participant, by executing this Option Agreement, hereby makes the following representations to the Corporation and acknowledges that the Corporation’s reliance on federal and state securities law exemptions from registration and qualification is predicated, in substantial part, upon the accuracy of these representations:

•

The Participant is acquiring the Option and, if and when he/she exercises the Option, will acquire the shares of Common Stock solely for the Participant’s own account, for investment purposes only, and not with a view to or an intent to sell, or to offer for resale in connection with any unregistered distribution, all or any portion of the shares within the meaning of the Securities Act and/or any applicable state securities laws.

•

The Participant has had an opportunity to ask questions and receive answers from the Corporation regarding the terms and conditions of the Option and the restrictions imposed on any shares of Common Stock purchased upon exercise of the Option. The Participant has been furnished with, and/or has access to, such information as he or she considers necessary or appropriate for deciding whether to exercise the Option and purchase shares of Common Stock. However, in evaluating the merits and risks of an investment in the Common Stock, the Participant has and will rely upon the advice of his/her own legal counsel, tax advisors, and/or investment advisors.

•

The Participant is aware that the Option may be of no practical value, that any value it may have depends on its vesting and exercisability as well as an increase in the Fair Market Value of the underlying shares of Common Stock to an amount in excess of the Exercise Price, and that any investment in common shares of a closely held corporation such as the Corporation is non-marketable, non-transferable and could require capital to be invested for an indefinite period of time, possibly without return, and at substantial risk of loss.

- 5 -

•

The Participant understands that any shares of Common Stock acquired on exercise of the Option will be characterized as “restricted securities” under the federal securities laws, and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances, including in accordance with the conditions of Rule 144 promulgated under the Securities Act, as presently in effect, with which the Participant is familiar.

•

The Participant has read and understands the restrictions and limitations set forth in the Plan, this Option Agreement (including these Terms), the Exercise Agreement, the Voting Agreement and the Co-Sale Agreement, which are imposed on the Option and any shares of Common Stock which may be acquired upon exercise of the Option.

•

At no time was an oral representation made to the Participant relating to the Option or the purchase of shares of Common Stock and the Participant was not presented with or solicited by any promotional meeting or material relating to the Option or the Common Stock.

7.	Lock-Up Agreement.

Neither the Participant (nor any permitted transferee) may, directly or indirectly, offer, sell or transfer or dispose of any of the shares of Common Stock acquired upon exercise of the Option (the “Shares”) or any interest therein (or agree to do any thereof) (collectively, a “Transfer”) during the period commencing as of 14 days prior to and ending 180 days, or such lesser period of time as the relevant underwriters may permit, after the effective date of a registration statement covering any public offering of the Corporation’s securities of which the Participant has notice. (The term “Participant” includes, where the context so requires, any permitted direct or indirect transferee of the Participant.) The Participant shall agree and consent to the entry of stop transfer instructions with the Corporation’s transfer agent against the Transfer of the Corporation’s securities beneficially owned by the Participant and shall confirm the limitations hereunder and under the Exercise Agreement by agreement with and for the benefit of the relevant underwriters by a lock-up agreement or other agreement in customary form. Notwithstanding anything else herein to the contrary, this Section 7 shall not be construed so as to prohibit the Participant from participating in a registration or a public offering of the Common Stock with respect to any shares which he or she may hold at that time, provided, however, that such participation shall be at the sole discretion of the Board.

8.	Limited Call Right; Mandatory Sale; Transfer Restrictions.

8.1 Corporation’s Call Right. The Corporation shall have the right (but not the obligation), subject to the terms and conditions of this Section 8, to repurchase in one or more transactions, and the Participant (or any permitted transferee) shall be obligated to sell any of the Shares acquired upon exercise of the Option at the Repurchase Price (as defined below) (the “Call Right”) in connection with a termination of the Participant’s employment or services by the Corporation or an Affiliate for Cause (as defined in the Plan). To exercise the Call Right, the

- 6 -

Corporation must give written notice thereof to the Participant (the “Call Notice”) during the Call Period determined under Section 8.4. The Call Notice is irrevocable by the Corporation and must (a) be in writing and signed by an authorized officer of the Corporation, (b) set forth the Corporation’s intent to exercise the Call Right and contain the total number of Shares to be sold to the Corporation pursuant to the Call Right, and (c) be mailed or delivered in accordance with Section 10.

8.2 Repurchase Price. The price per Share to be paid by the Corporation upon settlement of the Corporation’s Call Right (the “Repurchase Price”) shall equal the Fair Market Value of a Share determined as of the date of the Call Notice; provided, however, that if the Participant’s employment or service is terminated by the Corporation or an Affiliate for Cause, the Repurchase Price shall equal the lesser of (i) the price per Share paid by the Participant to acquire the Shares upon exercise of the Option or (ii) the Fair Market Value of a Share determined as of the date of the Call Notice.

8.3 Closing. The closing of any repurchase under this Section 8 shall be at a date to be specified by the Corporation, such date to be no later than 30 days after the date of the Call Notice. The aggregate Repurchase Price shall be paid at the closing in the form of a check or by cancellation of money purchase indebtedness against surrender by the Participant of a stock certificate evidencing the Shares with duly endorsed stock powers. No adjustments (other than pursuant to Section 7.3.1 of the Plan) shall be made to the Repurchase Price for fluctuations in the fair market value of the Common Stock after the date of the Call Notice.

8.4 Call Period; Termination of Call Right. The “Call Period” is the period of time during which the Call Notice must be delivered to the Participant in the event the Corporation wants to exercise its Call Right. The Call Period as to any particular Shares acquired upon exercise of the Option shall commence on the later of:

(a)

the Participant’s Severance Date (determined in accordance with the Plan); or

(b)

the date that is six months and one day after the Participant acquired the Shares from the Corporation upon exercise of the Option.

The Call Period as to any particular Shares acquired upon exercise of the Option shall terminate on the first to occur of:

(x)

twelve (12) months after the later of (i) the Participant’s Severance Date or (ii) the date that the Participant acquired the Shares from the Corporation upon exercise of the Option; or

(y)

the Public Offering Date.

8.5 Assignment. Notwithstanding anything to the contrary, the Corporation may assign any or all of its rights under this Section 8 to one or more stockholders of the Corporation.

- 7 -

9.	No Stockholder Rights Following Exercise of a Call.

If the Participant (or any permitted transferee) holds Shares as to which the Call Right has been exercised (in connection with the termination of the Participant’s employment, service or otherwise), the Participant shall be entitled to payment in accordance with the provisions of Section 8, but (unless otherwise required by law) shall no longer be entitled to participation in the Corporation or other rights as a stockholder with respect to the shares subject to the call or repurchase. To the maximum extent permitted by law, the Participant’s rights following the exercise of the Call Right shall, with respect to the call or repurchase and the Shares covered thereby, be solely the rights that he or she has as a general creditor of the Corporation to receive payment of the amount specified in Section 8, as applicable.

10.

Notices.

Any notice to be given under the terms of this Option Agreement or the Exercise Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Participant at the address reflected or last reflected on the Corporation’s payroll records. Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Participant is no longer an Eligible Person, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 10.

11.

Plan.

The Option and all rights of the Participant under this Option Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference, and, if applicable, the Restricted Stock Award Agreement. The Participant agrees to be bound by the terms of the Plan and this Option Agreement (including these Terms) and the Restricted Stock Award Agreement (if applicable). The Participant acknowledges having read and understood the Plan, the Stock Option Questions & Answers for the Plan, this Option Agreement, and the Restricted Stock Award Agreement (if applicable). Unless otherwise expressly provided in other sections of this Option Agreement or the Restricted Stock Award Agreement (if applicable), provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

12.

Entire Agreement.

This Option Agreement (including these Terms and together with the form of Exercise Agreement attached hereto and the Restricted Stock Award Agreement attached hereto) and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan, this Option Agreement, the Restricted Stock Award Agreement (if applicable), and the

- 8 -

Exercise Agreement may be amended pursuant to Section 7.7 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof or of the Exercise Agreement in writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. The Voting Agreement and the Co-Sale Agreement are both outside the scope of the foregoing integration provision as to any shares of Common Stock that may be issued upon exercise of the Option.

13.

Satisfaction of All Rights to Equity.

The Option and the related Restricted Stock Award Agreement (if applicable) are complete satisfaction of any and all rights that the Participant may have (under an employment, consulting, or other written or oral agreement with the Corporation or any of its Affiliates, or otherwise) to receive (1) stock options or stock awards with respect to the securities of the Corporation or any of its Affiliates, and/or (2) any other equity or derivative security in or with respect to the Corporation or any of its Affiliates. This Option Agreement and related Restricted Stock Award Agreement (if applicable) supersede the terms of all prior understandings and agreements, written or oral, of the parties with respect to such matters. The Participant shall have no further rights or benefits under any prior agreement conveying any right with respect to any security or derivative security in or with respect to the Corporation or any of its Affiliates. The foregoing notwithstanding, this Section 13 shall not adversely affect the Participant’s rights under any prior stock option or stock award agreement under the Plan (provided such agreement is expressly labeled as a stock option or stock award agreement under the Plan and is similar in form to this Option Agreement) which has been signed by an authorized officer of the Corporation.

14.

Governing Law; Limited Rights; Severability.

14.1. Delaware Law; Construction. This Option Agreement, the Restricted Stock Award Agreement (if applicable) and the Exercise Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. The terms of the Option grant have resulted from the negotiations of the parties and each of the parties has had an opportunity to obtain and consult with its own counsel. The language of all parts of the Plan, this Option Agreement (including these Terms), the Restricted Stock Award Agreement, and the Exercise Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the parties.

14.2. Limited Rights. The Participant has no rights as a stockholder of the Corporation with respect to the Option as set forth in Section 7.8 of the Plan. The Option does not place any limit on the corporate authority of the Corporation as set forth in Section 7.15 of the Plan.

14.4. Severability. If a court of competent jurisdiction determines that any portion of this Option Agreement, the Plan, the Restricted Stock Award Agreement (if applicable), or the Exercise Agreement is in violation of any statute or public policy, then only the portions of this Option Agreement, the Plan, the Restricted Stock Award Agreement, or the Exercise Agreement,

- 9 -

as applicable, which violate such statute or public policy shall be stricken, and all portions of this Option Agreement, the Plan, the Restricted Stock Award Agreement, and the Exercise Agreement which do not violate any statute or public policy shall continue in full force and effect. Furthermore, it is the parties’ intent that any court order striking any portion of this Option Agreement, the Plan, the Restricted Stock Award Agreement, and/or the Exercise Agreement should modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties hereunder.

14.5. Stockholder Approval. Notwithstanding anything else contained herein to the contrary, the Option and all rights of the Participant under this Option Agreement are subject to approval of the Plan by the Corporation’s stockholders (such approval to be obtained in accordance with the terms of the Plan, the Corporation’s Bylaws, and applicable law) within 12 months after the Effective Date of the Plan.

(Remainder of Page Intentionally Left Blank)

- 10 -

EXHIBIT A

[To the Stock Option Agreement]

DURATA THERAPEUTICS, INC.

STOCK INCENTIVE PLAN

OPTION EXERCISE AGREEMENT

The undersigned (the “Purchaser”) hereby irrevocably elects to exercise his/her right, evidenced by that certain Stock Option Agreement dated as of , 2010 (the “Option Agreement”) under the Durata Therapeutics, Inc. Stock Incentive Plan (the “Plan”), as follows:

•

the Purchaser hereby irrevocably elects to purchase shares of Common Stock, par value $0.01 per share (the “Shares”), of Durata Therapeutics, Inc., a Delaware corporation (the “Corporation”), and

•

such purchase shall be at the price of $ per share, for an aggregate amount of $ (subject to applicable withholding taxes pursuant to Section 7.6.1 of the Plan).

Capitalized terms are defined in the Plan if not defined herein.

1. Delivery of Share Certificate. The Purchaser requests that a certificate representing the Shares be registered to Purchaser and delivered to: .

2. Investment Representations. The Purchaser acknowledges that the sale of the Shares by the Purchaser is restricted by Securities and Exchange Commission Rule 701. The Purchaser hereby affirms as made as of the date hereof the representations in Section 6 of the “Terms and Conditions of Stock Option” (which are attached to and a part of the Option Agreement, the “Terms”) and such representations are incorporated herein by this reference. The Purchaser represents that he/she has no need for liquidity in this investment, has the ability to bear the economic risk of this investment, and can afford a complete loss of the purchase price for the Shares.

The Purchaser also understands and acknowledges (a) that the certificates representing the Shares will be legended as provided for in Section 7.5.3 of the Plan, and (b) that the Corporation has no obligation to register the Shares or file any registration statement under federal or state securities laws.

3. Limitation on Disposition and Other Restrictions. The Shares are subject to and the Purchaser hereby agrees to the following terms and conditions of the sale of the Shares to the Purchaser:

•

any transfer of the Shares must comply with the restrictions on transfer set forth in Section 7.2 of the Plan and all applicable laws as set forth in Section 7.5 of the Plan;

A – 1

•

the Shares are subject to, and following any otherwise permitted transfer of the Shares, the Shares shall remain subject to and the transferee shall be bound by, the lock-up provisions set forth in Section 7 of the Terms, the Corporation’s call right set forth in Section 8 of the Terms, the share legend requirements of Section 7.5.3 of the Plan, the foregoing provisions of this Section 3, and additional restrictions as set forth in the Voting Agreement and the Co-Sale Agreement;

•

as a condition to any otherwise permitted transfer of the Shares, the Corporation may require the transferee to execute a written agreement, in a form acceptable to the Administrator, that the transferee acknowledges and agrees to the foregoing terms and restrictions imposed on the Shares.

4. Joinder to Co-Sale Agreement and Voting Agreement. The Purchaser understands that certain holders of preferred stock of the Corporation (“Investors”) have entered into the Stockholders and Subscription Agreement of the Corporation dated as of December 11, 2009, by and among the Corporation and the Stockholders named therein (as the same may hereafter be amended, the “Stockholders Agreement”), and has been informed by the Corporation that it is a condition to the Corporation’s issuance of any securities to the Purchaser that the Purchaser agree to be bound by the Right of First Refusal, Drag Along and Co-Sale Agreement dated as of December 11, 2009, by and among the Corporation, the Investors listed on Schedule A thereto and the Common Holders listed on Schedule B thereto (the “Co-Sale Agreement” as the same may be amended) and the Common Holder Voting Agreement by and among the Corporation and the Investors and the Common Holders, and the Stockholders named therein (as the same may be amended, the “Voting Agreement”) and to make the additional acknowledgments and agreements under this Section 4. By executing and delivering this Agreement to the Corporation, the Purchaser hereby agrees to become a party to, to be bound by, and to comply with the provisions of (a) the Co-Sale Agreement, and (b) the Voting Agreement, in the same manner as if the Purchaser were an original signatory to such agreements. The Purchaser agrees that the Purchaser shall be a Common Holder, as such term is defined in each of the Voting Agreement and Co-Sale Agreement. For the avoidance of doubt, the Purchaser shall not receive any rights under the Stockholders Agreement. Copies of the Co-Sale Agreement and the Voting Agreement are attached hereto as Exhibits 1 and 2, respectively.

In addition to the foregoing, the Purchaser further acknowledges and agrees, for the benefit of the Corporation and each Investor, that (i) subject to the Delaware General Corporation Law, when an Investor takes any action under the Stockholders Agreement to give or withhold its consent, such Investor shall have no duty (fiduciary or other) to consider the interests of the Corporation, its subsidiaries or other security holders of the Corporation and may act exclusively in its own interests and shall only have the duty to act in good faith, (ii) to the extent not prohibited by antitrust, competition or any other applicable law, the Purchaser hereby agrees and acknowledges that each director of the Corporation designated by an Investor may share confidential, non-public information about the Corporation and its subsidiaries with the Investor, subject to the obligation of the director of the Corporation and Investor to hold such shares in confidence pursuant to the Stockholders Agreement, and (iii) the Purchaser shall have no authority to manage the business or affairs of the Corporation or contract for or incur on behalf of the Corporation any debts, liabilities or other actions, and no such actions of the undersigned shall be binding on the Corporation.

A – 2

5. Plan and Option Agreement. The Purchaser acknowledges that all of his/her rights are subject to, and the Purchaser agrees to be bound by, all of the terms and conditions of the Plan and the Option Agreement (including the Terms), both of which are incorporated herein by this reference. If a conflict or inconsistency between the terms and conditions of this Exercise Agreement and of the Plan or the Option Agreement shall arise, the terms and conditions of the Plan and/or the Option Agreement shall govern. The Purchaser acknowledges receipt of a copy of all documents referenced herein (including the Terms and the Stock Option Questions & Answers for the Plan) and acknowledges reading and understanding these documents and having an opportunity to ask any questions that he/she may have had about them.

6. Entire Agreement. This Exercise Agreement, the Option Agreement (including the Terms), the Restricted Stock Award Agreement (if applicable), and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan, the Option Agreement, the Restricted Stock Award Agreement, and this Exercise Agreement may be amended pursuant to Section 7.7 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof or of the Option Agreement in writing to the extent such waiver does not adversely affect the interests of the Purchaser hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. The Voting Agreement and the Co-Sale Agreement are both outside the scope of the foregoing integration provision as to any Shares that may be issued upon exercise of the Option.

7. Notice of Sale of ISO Shares. If the Shares are being acquired upon exercise of an Option intended to qualify as an Incentive Stock Option, the Purchaser agrees that, upon any sale or other transfer of the Shares within either one year of the date that they are acquired by the Purchaser or two years after the Award Date set forth in the Option Agreement, the Purchaser shall provide the notice required under Section 5.5.3 of the Plan.


“PURCHASER”				ACCEPTED BY: DURATA THERAPEUTICS, INC.,
				a Delaware corporation
Signature

				By:
Print Name
Print Name				Its:

Date				(To be completed by the corporation after the price (including applicable withholding taxes), value (if applicable) and receipt of funds is verified.)

A – 3

CONSENT OF SPOUSE

I, [ ], spouse of [ ] acknowledge that I have read (a) the Co-Sale Agreement, (b) the Voting Agreement, (c) this Option Exercise Agreement, and (d) the Restricted Stock Award Agreement (if applicable) (together with the Co-Sale Agreement, the Voting Agreement and the Option Exercise Agreement, the “Agreements”), and that I know the contents of the Agreements. I am aware that (i) the Co-Sale Agreement contains provisions providing certain rights to certain other holders of Capital Stock of the Company upon a Proposed Common Holder Transfer of shares of Transfer Stock of the Company which my spouse may own, including any interest I might have therein, and (ii) the Common Holder Voting Agreement contains provisions regarding the voting and transfer of shares of Capital Stock of the Company which my spouse may own, including any interests I might have therein.

I hereby agree that my interest, if any, in (i) any shares of Transfer Stock of the Company, subject to the Co-Sale Agreement, (ii) any shares of Capital Stock, subject to the Voting Agreement and (iii) any shares of Stock subject to the Restricted Stock Award Agreement, shall be irrevocably bound by the Agreements and further understand and agree that any community property interest I may have in such shares of Transfer Stock of the Company or Capital Stock of the Company shall be similarly bound by the Agreements.

I am aware that the legal, financial and related matters contained in the Agreements are complex and that I am free to seek independent professional guidance or legal counsel with respect to this Consent of Spouse. I have either sought such guidance or legal counsel or determined after reviewing the Agreements carefully that I will have elected to waive such right.

Dated as of the day of , 20 .

Signature

Print Name

EXHIBIT B

[To the Stock Option Agreement]

DURATA THERAPEUTICS, INC.

STOCK INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is dated as of the day of , by and between Durata Therapeutics, Inc., a Delaware corporation (the “Corporation”), and (the “Participant”).

W I T N E S S E T H

WHEREAS, pursuant to the Durata Therapeutics, Inc. Stock Incentive Plan (the “Plan”), the Corporation hereby grants to the Participant, effective as of the date first set forth above (the “Award Date”), a restricted stock award (the “Award”), upon the terms and conditions set forth herein and in the Plan; and

WHEREAS, the Participant desires to accept the shares of restricted stock subject to the Award on and subject to the terms and conditions set forth herein, in the Option Agreement, in the Exercise Agreement and in the Plan.

NOW THEREFORE, in consideration of the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

1. Defined Terms. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings given to such terms in the Option Agreement, the Exercise Agreement or the Plan.

2. Grant. Subject to the terms of this Agreement, the Corporation hereby grants to the Participant an Award with respect to an aggregate of restricted shares of Common Stock of the Corporation (subject to adjustment as provided in Section 7.3.1 of the Plan) (the “Restricted Shares”).

Concurrently with the execution of this Agreement, (i) the Participant agrees to execute and deliver to the Corporation, and be bound by the terms and conditions of, a Voting Agreement with the Corporation with respect to the Restricted Shares (the “Voting Agreement”), such Voting Agreement to be in substantially the form attached hereto as Exhibit B, and (ii the Participant agrees to execute and deliver to the Corporation, and be bound by the terms and conditions of, a Right of First Refusal, Drag-Along and Co-Sale Agreement of Durata Therapeutics, Inc. in substantially the form attached hereto as Exhibit C (the “Co-Sale Agreement”). The Corporation shall have no obligation to issue any shares of Common Stock pursuant to the Award unless such executed Voting Agreement and executed Co-Sale Agreement are so delivered to and received by the Corporation.

3. Vesting. The Award shall be vested, and restrictions imposed on the Restricted Shares pursuant to Section 6(a) below shall lapse at the time and in the manner set forth on the

cover page to the Option Agreement and in Section 1 of the Terms and Conditions of Stock Option in the Option Agreement, in each case provided that the Participant is employed by or providing services to the Corporation or one of its Affiliates on such date and has otherwise not previously incurred a Severance Date (as determined under the Plan).

4. Continuance of Employment/Service Required; No Employment/Service Commitment. The vesting schedule in Section 3 requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or service as provided in Section 6 below or under the Plan.

Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation or any of its Affiliates, affects the Participant’s status, if he or she is an employee, as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Corporation or any Affiliate, interferes in any way with the right of the Corporation or any Affiliate at any time to terminate such employment or service, or affects the right of the Corporation or any Affiliate to increase or decrease the Participant’s other compensation or benefits.

5. Dividend and Voting Rights. After the Award Date, the Participant shall be entitled to cash dividends and voting rights with respect to the Restricted Shares subject to the Award even though such shares are not vested, provided that such rights shall terminate immediately as to any Restricted Shares that are forfeited pursuant to Section 6(a), 9 or 10 of this Agreement and provided further that Restricted Shares, both before and after the time that they have become vested pursuant to Section 3, are subject to the voting and other restrictions as set forth in the Voting Agreement and Co-Sale Agreement.

6. Restrictions on Transfer.

(a) Restrictions Prior to Vesting; Effect of Termination of Employment Prior to Vesting. Prior to the time that they have become vested pursuant to Section 3, the Restricted Shares, any interest therein, amount payable in respect thereof, and the Restricted Property (as defined in Section 12) may not be sold or transferred, except as provided in Section 7.2 of the Plan. If the Participant ceases to be employed by or ceases to provide services to the Corporation or an Affiliate, the Participant’s Restricted Shares (and related Restricted Property) shall be forfeited to the Corporation to the extent such shares have not become vested pursuant to Section 3 hereof as of the Participant’s Severance Date (regardless of the reason for such termination of employment or service, whether with or without cause, voluntarily or involuntarily, or due to death or disability).

(b) Restrictions After Vesting. Upon and after the time that they have become vested pursuant to Section 3, the Restricted Shares shall not continue to be subject to the restrictions set forth in Section 6(a), but such shares shall continue to be subject to the other limitations and restrictions set forth herein and in the Plan (including, without limitation, the provisions of Section 7.5 of the Plan and Sections 8, 9, 10 and 11 of this Agreement).

(c) Voting Agreement and Co-Sale Agreement. The Restricted Shares, both before and after the time that they have become vested pursuant to Section 3, are subject to substantial restrictions on transfer as set forth in the Voting Agreement and the Co-Sale Agreement. The restrictions imposed on any such shares pursuant to the Voting Agreement and the Co-Sale Agreement are in addition to, and not in lieu of, any restrictions and forfeiture rights imposed on such shares pursuant to the Plan and this Agreement.

(d) Other Transfers Void. Any sale or transfer, or purported sale or transfer, of any Restricted Shares acquired pursuant to this Agreement or any interest therein other than to the Corporation shall be null and void unless the terms, conditions and provisions of this Agreement, the Plan and the Co-Sale Agreement are strictly observed and followed. Furthermore, the proposed transferee in any otherwise permitted transfer of the Restricted Shares acquired pursuant to this Agreement shall, as a condition precedent to any such transfer, agree in writing with the Corporation to be bound by the restrictions on such shares set forth in this Agreement, the Option Agreement, the Exercise Agreement and in the Plan (including, without limitation, the provisions of Sections 8, 9, and 10 of this Agreement and the Co-Sale Agreement, which shall continue in effect with respect to the shares).

(e) Charter Documents. The Certificate of Incorporation and Bylaws of the Corporation, as either of them may be amended from time to time, may provide for additional restrictions and limitations with respect to the Common Stock (including additional restrictions and limitations on the transfer of shares). To the extent that these restrictions and limitations are greater than those set forth in this Agreement, such restrictions and limitations shall apply to the Restricted Shares (both before and after such shares shall have become vested) and are incorporated herein by this reference. Such restrictions and limitations are not, however, in lieu of, nor shall they in any way reduce or eliminate, any limitation or restriction on the Restricted Shares imposed under the Plan or this Agreement.

7. Delivery of Shares.

(a) Form. The Corporation shall, in its discretion, issue the Restricted Shares either: (1) in certificate form as provided in clause (b) below; or (2) if the Common Stock is then publicly-traded, in book entry form, registered in the name of the Participant with notations regarding the applicable restrictions on transfer imposed under this Agreement.

(b) Certificates to be Held by Corporation; Legend. Any certificates representing the Restricted Shares that may be delivered to the Participant by the Corporation prior to vesting of the Restricted Shares pursuant to Section 3 shall be redelivered to the Corporation to be held by the Corporation or its designee until the shares represented thereby vest pursuant to Section 3 or are forfeited pursuant to this Agreement. Any such certificates will bear a legend making appropriate reference to the restrictions imposed hereunder.

(c) Delivery of Certificates Upon Vesting. Promptly after the vesting of any Restricted Shares pursuant to Section 3, the Corporation shall, as applicable, either remove the notations on any such vested Restricted Shares issued in book entry form or deliver to the Participant a certificate or certificates evidencing the number of such vested Restricted Shares (or, in either case, such lesser number of shares as may be permitted pursuant to the tax

withholding provisions referred to in Section 13). The Participant (or the beneficiary or personal representative of the Participant in the event of the Participant’s death or incapacity, as the case may be) shall deliver to the Corporation any representations or other documents or assurances as the Corporation may deem necessary or reasonably desirable to ensure compliance with all applicable legal and regulatory requirements. The shares so delivered shall no longer be restricted pursuant to Section 6(a) but shall continue to be subject to the restrictions referred to in Section 6(b).

(d) Stock Power; Power of Attorney. Concurrent with the execution and delivery of this Agreement, the Participant shall deliver to the Corporation an executed stock power in the form attached hereto as Exhibit A, in blank, with respect to the Restricted Shares and any related Restricted Property. The Participant, by acceptance of the Award, shall be deemed to appoint, and does so appoint by execution of this Agreement, the Corporation and each of its authorized representatives as the Participant’s attorney(s)-in-fact to (1) effect any transfer to the Corporation of the Restricted Shares acquired pursuant to this Agreement (including any related Restricted Property) that are forfeited to the Corporation, and (2) execute such documents as the Corporation or such representatives deem necessary or advisable in connection with any such transfer.

(e) Share Legend Generally. The certificate(s) representing the Restricted Shares (both before and after such shares shall have become vested pursuant to Section 3) shall bear the legend set forth in Section 7.5.3 of the Plan and/or any other appropriate or required legends under applicable laws. Such legends shall remain on the certificate(s) representing the Restricted Shares until the later of (1) the Public Offering Date (or such later date that counsel to the Corporation may reasonably determine is advisable to help ensure the Corporation’s compliance with all applicable legal and regulatory requirements) or (2) the date that such shares become vested pursuant to Section 3. For purposes of this Agreement, the term “Public Offering Date” means the first day that the Common Stock is registered under the Exchange Act and listed or quoted on a recognized national securities exchange.

8. Lock-Up Agreement. Neither the Participant (nor any permitted transferee) may, directly or indirectly, offer, sell or transfer or dispose of any of the Restricted Shares after such shares have vested pursuant to Section 3 (the “Shares”) or any interest therein (or agree to do any thereof) (collectively, a “Transfer”) during the period commencing as of 14 days prior to and ending 180 days, or such lesser period of time as the relevant underwriters may permit, after the effective date of a registration statement covering any public offering of the Corporation’s securities of which the Participant has notice. (The term “Participant” for purposes of this Agreement includes, where the context so requires, any permitted direct or indirect transferee of the Participant.) The Participant shall agree and consent to the entry of stop transfer instructions with the Corporation’s transfer agent against the Transfer of the Corporation’s securities beneficially owned by the Participant and shall confirm the limitations hereunder by agreement with and for the benefit of the relevant underwriters by a lock-up agreement or other agreement in customary form. Notwithstanding anything else herein to the contrary, this Section 8 shall not be construed so as to prohibit the Participant from participating in a registration or a public offering of the Common Stock with respect to any Shares which he or she may hold at that time, provided, however, that such participation shall be at the sole discretion of the Board.

9. Vesting; Forfeiture of Shares on Triggering Event.

For the avoidance of doubt, the shares of Common Stock covered by this Award are subject to the provisions governing a Qualifying Change in Control and the forfeiture provisions, if any, each set forth in Section 1 of the Terms and Conditions of Stock Option of the Option Agreement.

10. Forfeiture of Shares on Termination For Cause. If the Participant ceases to be employed by or ceases to provide services to the Corporation or an Affiliate as a result of a termination by the Corporation or an Affiliate for Cause (as defined in the Plan), the Participant’s shares of Common Stock covered by the Award (whether or not such shares are vested) shall be forfeited to the Corporation as of the Participant’s Severance Date.

11. Other Forfeiture Provisions.

(a) Return of Shares. Upon the occurrence of any forfeiture of shares hereunder (whether pursuant to Section 6(a), 9 or 10), such forfeited shares and related Restricted Property shall be automatically transferred to the Corporation as of the time of the forfeiture, without any other action by the Participant (or the Participant’s Beneficiary or Personal Representative in the event of the Participant’s death or disability, as applicable). The Corporation may exercise its powers under Section 7(d) hereof and take any other action necessary or advisable to evidence any transfer of shares to the Corporation pursuant to this Agreement. The Participant (or the Participant’s Beneficiary or Personal Representative, as the case may be) shall deliver any additional documents of transfer that the Corporation may request to confirm the transfer of such shares and related Restricted Property to the Corporation. In connection with the transfer of the forfeited shares (together with any related Restricted Property) back to the Corporation, the Corporation shall pay to the Participant the lesser of (i) the Participant’s Option Exercise Price paid for the shares and (ii) the fair market value of the shares, as determined by the Board in its sole discretion; provided, however, that if the forfeiture is pursuant to Section 10, no payment shall be made by the Corporation for the shares and instead the shares shall be forfeited for no consideration; and, provided, further, however, that the failure by the Corporation to pay any such amount pursuant to the first clause of this sentence shall in no way affect the forfeiture of the shares pursuant to this Agreement.

(b) No Stockholder Rights Following Forfeiture. If the Participant (or any permitted transferee) holds shares that have been forfeited pursuant to this Agreement, the Participant shall no longer be entitled to participation in the Corporation or other rights as a stockholder with respect to the shares subject to the forfeiture.

12. Adjustments upon Specified Events. Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.3.1 of the Plan, the Administrator shall make adjustments in accordance with such section in the number and kind of securities that may become vested under the Award. If any adjustment is made to the Restricted Shares pursuant to Section 7.3.1 of the Plan, the restrictions applicable to the Restricted Shares will continue in effect with respect to any consideration or other securities (the “Restricted Property” and, for the purposes of this Agreement, “Restricted Shares” shall include “Restricted Property,” unless the context otherwise requires) received in respect of such Restricted Shares.

Such Restricted Property shall vest at such times and in such proportion as the Restricted Shares to which the Restricted Property is attributable vest, or would have vested pursuant to the terms hereof if such Restricted Shares had remained outstanding. To the extent that the Restricted Property includes any cash (other than regular cash dividends provided for in Section 5 hereof), such cash shall be invested, pursuant to policies established by the Administrator, in interest bearing, FDIC-insured (subject to applicable insurance limits) deposits of a depository institution selected by the Administrator, the earnings on which shall be added to and become a part of the Restricted Property.

13. Tax Withholding. The Corporation shall reasonably determine the amount of any federal, state, local or other income, employment, or other taxes which the Corporation or any of its subsidiaries may reasonably be obligated to withhold with respect to the grant, vesting, making of an election under Section 83(b) of the Code or other event with respect to the Restricted Shares. The Corporation’s obligation to deliver the Restricted Shares or any certificates evidencing the Restricted Shares, or otherwise remove the restrictive notations or legends on such shares or certificates that refer to the transfer restrictions set forth in Section 6(a), is subject to the condition precedent that the Participant either pay or provide for the amount of any such withholding obligations in such manner as may be authorized by the Administrator under, or as may otherwise be permitted under, Section 7.6.1 of the Plan.

14. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Participant at the address reflected or last reflected on the Corporation’s payroll records. Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Participant is no longer an Eligible Person, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 14.

15. Plan. The Award and all rights of the Participant under this Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference, the Option Agreement and the Exercise Agreement. The Participant agrees to be bound by the terms of the Plan, this Agreement, the Option Agreement and the Exercise Agreement. The Participant acknowledges having read and understood the Plan, the Stock Award Questions & Answers for the Plan, the Option Agreement and this Agreement. Unless otherwise expressly provided in other sections of this Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

16. Entire Agreement. This Agreement (including the exhibit hereto), the Option Agreement, the Exercise Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan, the Option Agreement and the Exercise Agreement and this Agreement may be amended pursuant to Section 7.7 of the Plan. Any such

amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not materially and adversely affect the Participant’s rights with respect to the Award, provided that no such waiver shall operate or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. The Voting Agreement and the Co-Sale Agreement are each outside the scope of the foregoing integration provision as to the Restricted Shares.

17. Effect of this Agreement. This Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Corporation.

18. Governing Law; Severability; Miscellaneous.

(a) Delaware Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder.

(b) Construction. The terms of the Award grant have resulted from the negotiations of the parties and each of the parties has had an opportunity to obtain and consult with its own counsel. The language of all parts of the Plan and this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the parties.

(c) Limited Rights. The Participant shall have no rights as a stockholder of the Corporation with respect to the Restricted Shares until the shares have been issued by the Corporation in the name of the Participant. The Participant’s rights with respect to the Restricted Shares after the date of such issuance are subject to the terms and conditions set forth herein.

(d) Severability. If a court of competent jurisdiction determines that any portion of this Agreement or the Plan is in violation of any statute or public policy, then only the portions of this Agreement or the Plan, as applicable, which violate such statute or public policy shall be stricken, and all portions of this Agreement and the Plan which do not violate any statute or public policy shall continue in full force and effect. Furthermore, it is the parties’ intent that any court order striking any portion of this Agreement, the Option Agreement, the Exercise Agreement and/or the Plan should modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties hereunder.

(e) Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(f) Section Headings. The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

(g) Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein.

19. Securities Law Representations. The Participant acknowledges that the Restricted Shares are not being registered under the Securities Act, based, in part, in reliance upon an exemption from registration under Securities and Exchange Commission Rule 701 promulgated under the Securities Act, and a comparable exemption from qualification under applicable state securities laws, as each may be amended from time to time. The Participant, by executing this Agreement, hereby makes the following representations to the Corporation and acknowledges that the Corporation’s reliance on federal and state securities law exemptions from registration and qualification is predicated, in substantial part, upon the accuracy of these representations:

•

The Participant is acquiring the Restricted Shares solely for the Participant’s own account, for investment purposes only, and not with a view to or an intent to sell, or to offer for resale in connection with any unregistered distribution, all or any portion of the shares within the meaning of the Securities Act and/or any applicable state securities laws.

•

The Participant has had an opportunity to ask questions and receive answers from the Corporation regarding the terms and conditions of the Award and the restrictions imposed on the Restricted Shares. The Participant has been furnished with, and/or has access to, such information as he or she considers necessary or appropriate for deciding whether to acquire the Restricted Shares. However, in evaluating the merits and risks of an investment in the Restricted Shares, the Participant has and will rely upon the advice of his/her own legal counsel, tax advisors, and/or investment advisors.

•

The Participant is aware that the Restricted Shares may be of no practical value and that any investment in common shares of a closely held corporation such as the Corporation is non-marketable, non-transferable and could require capital to be invested for an indefinite period of time, possibly without return, and at substantial risk of loss.

•

The Participant understands that the Restricted Shares will be characterized as “restricted securities” under the federal securities laws, and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances, including in accordance with the conditions of Rule 144 promulgated under the Securities Act, as presently in effect. The Participant acknowledges receiving a copy of Rule 144 promulgated under the Securities Act, as presently in effect, and represents that he is familiar with such rule, and understands the resale limitations imposed thereby and by the Securities Act and the applicable state securities law.

•

The Participant has read and understands the restrictions and limitations set forth in the Plan, this Agreement, the Voting Agreement and the Co-Sale Agreement which will be imposed on the Restricted Shares (including those restrictions and limitations which will continue after the shares have vested), including, but not limited to, the provisions of Section 6, 8, 9, and 10 of this Agreement.

•

At no time was an oral representation made to the Participant relating to the Award or the acquisition of Restricted Shares and the Participant was not presented with or solicited by any promotional meeting or material relating to the Award or the Restricted Shares.

•

The Participant understands and acknowledges that (a) any certificate evidencing the Restricted Shares (or evidencing any other securities issued with respect thereto pursuant to any stock split, stock dividend, merger or other form of reorganization or recapitalization) when issued shall bear, in addition to any other legends which may be required by applicable state securities laws, the legend set forth in Section 7.5.3 of the Plan, and (b) the Corporation has no obligation to register the Restricted Shares or file any registration statement under federal or state securities laws.

20. Satisfaction of All Rights to Equity. The Award and the related Option Agreement are in complete satisfaction of any and all rights that the Participant may have (under an employment, consulting, or other written or oral agreement with the Corporation or any of its Affiliates, or otherwise) to receive (1) stock options or stock awards with respect to the securities of the Corporation or any of its Affiliates, and/or (2) any other equity or derivative security in or with respect to the Corporation or any of its Affiliates. This Agreement and the related Option Agreement supersede the terms of all prior understandings and agreements, written or oral, of the parties with respect to such matters. The Participant shall have no further rights or benefits under any prior agreement conveying any right with respect to any security or derivative security in or with respect to the Corporation or any of its Affiliates. The foregoing notwithstanding, this Section 20 shall not adversely affect the Participant’s rights under any prior stock option or stock award agreement under the Plan (provided such agreement is expressly labeled as a stock option or stock award agreement under the Plan and is similar in form to this Agreement) which has been signed by an authorized officer of the Corporation.

[The remainder of this page has intentionally been left blank.]

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set his or her hand as of the date and year first above written.


DURATA THERAPEUTICS, INC.,
a Delaware corporation

By:


Name:
Its:

“PARTICIPANT”


Signature


Print Name


Address


City, State, Zip Code

EXHIBIT A

[To the Restricted Stock Award Agreement]

STOCK POWER

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Award Agreement between Durata Therapeutics, Inc., a Delaware corporation (the “Corporation”), and the individual named below (the “Individual”) dated as of , the Individual, hereby sells, assigns and transfers to the Corporation, an aggregate shares of Common Stock of the Corporation, standing in the Individual’s name on the books of the Corporation and represented by stock certificate number(s) to which this instrument is attached, and hereby irrevocably constitutes and appoints as his or her attorney in fact and agent to transfer such shares on the books of the Corporation, with full power of substitution in the premises.

Dated ,

Signature

Print Name

(Instruction: Please do not fill in any blanks other than the signature line. The purpose of the assignment is to enable the Corporation to exercise its forfeiture rights set forth in the Restricted Stock Award Agreement without requiring additional signatures on the part of the Individual.)

EXHIBIT B

[To the Restricted Stock Award Agreement]

VOTING AGREEMENT

EXHIBIT C

[To the Restricted Stock Award Agreement]

CO-SALE AGREEMENT

EXHIBIT 1

[To the Stock Option Agreement]

CO-SALE AGREEMENT

EXHIBIT 2

[To the Stock Option Agreement]

VOTING AGREEMENT

EXHIBIT 3

[To the Stock Option Agreement]

Definition of Qualifying Change of Control

“Qualifying Change in Control” shall mean the consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any corporation or other entity a majority of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company (a “Subsidiary”), a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its Subsidiaries (each, a “Business Combination”), in each case that results in: (a) the sale or other disposition by the Investors of at least 65% of their Investment in the Company, (b) the Investors ceasing to beneficially own, directly or indirectly, more than 50% of the combined voting power of the voting securities entitled to vote generally in the election of directors (on a fully diluted basis) of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets directly or through one or more subsidiaries), and (c) the total proceeds received by the each of the Investors in the form of cash and/or readily marketable securities at the closing of such Business Combination in respect of such Business Combination from the sale of their Investment equals or exceeds an amount equal to the product of (i) such Investor’s Invested Capital and (ii) 2.0. For purposes of clarity, such proceeds (in the form of cash and/or readily marketable securities) received by the an Investor in respect of such a Business Combination from the sale of its Investment shall exclude for this purpose: (1) any future consideration or potential future consideration (other than proceeds in the form of cash and/or readily marketable securities paid at or within 30 days following the closing of the Business Combination), (2) any consideration paid or payable in respect of stock, options, warrants other rights to acquire shares of capital stock of the Company or other equity securities of the Company not held by the Investor, and (d) any non-cash consideration other than readily marketable securities.

EX-10.3 5 d312438dex103.htm 2012 STOCK INCENTIVE PLAN 2012 Stock Incentive Plan

Exhibit 10.3

DURATA THERAPEUTICS, INC.

2012 Stock Incentive Plan

Purpose

The purpose of this 2012 Stock Incentive Plan (the “Plan”) of Durata Therapeutics, Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to better align the interests of such persons with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).

2.	Eligibility

All of the Company’s employees, consultants and advisors, officers and directors, as well as consultants and advisors to the Company (as such terms are defined and interpreted for purposes of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), or any successor form) are eligible to be granted Awards under the Plan. Each person who is granted an Award under the Plan is deemed a “Participant.” “Award” means Options (as defined in Section 5), SARs (as defined in Section 6), Restricted Stock (as defined in Section 7), Restricted Stock Units (as defined in Section 7) and Other Stock-Based Awards (as defined in Section 8).

3.	Administration and Delegation

(a) Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.

(b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or officers.

(c) Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Options and other Awards that constitute rights under Delaware law (subject to any limitations under the Plan) to employees or officers of the Company and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of such Awards to be granted by such officers (including the exercise price of such Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to such Awards that the officers may grant; provided further, however, that no officer shall be authorized to grant such Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange Act). The Board may not delegate authority under this Section 3(c) to grant Restricted Stock, unless Delaware law then permits such delegation.

4.	Stock Available for Awards

(a) Number of Shares; Share Counting.

(1) Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan (any or all of which Awards may be in the form of Incentive Stock Options, as defined in Section 5(b)) for up to such number of shares of common stock, $0.01 par value per share, of the Company (the “Common Stock”) as is equal to the sum of:

(A) 6,150,000 shares of Common Stock; plus

(B) such additional number of shares of Common Stock (up to 17,000,000 shares) as is equal to the sum of (x) the number of shares of Common Stock reserved for issuance under the Company’s Stock Incentive Plan (the “Existing Plan”) that remain available for grant under the Existing Plan immediately prior to the closing of the Company’s initial public offering and (y) the number of shares of Common Stock subject to awards granted under the Existing Plan which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right (subject, however, in the case of Incentive Stock Options to any limitations of the Code); plus

(C) an annual increase to be added on the first day of each of the fiscal year, beginning with the fiscal year ending December 31, 2014, equal to the lesser of (i) 3,500,000 shares of Common Stock, (ii) 2.75% of the outstanding shares on such date or (iii) an amount determined by the Board.

Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

-2-

(2) Share Counting. For purposes of counting the number of shares available for the grant of Awards under the Plan:

(A) all shares of Common Stock covered by SARs shall be counted against the number of shares available for the grant of Awards under the Plan; provided, however, that (i) SARs that may be settled only in cash shall not be so counted and (ii) if the Company grants an SAR in tandem with an Option for the same number of shares of Common Stock and provides that only one such Award may be exercised (a “Tandem SAR”), only the shares covered by the Option, and not the shares covered by the Tandem SAR, shall be so counted, and the expiration of one in connection with the other’s exercise will not restore shares to the Plan;

(B) if any Award (i) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or (ii) results in any Common Stock not being issued (including as a result of an SAR that was settleable either in cash or in stock actually being settled in cash), the unused Common Stock covered by such Award shall again be available for the grant of Awards; provided, however, that (1) in the case of Incentive Stock Options, the foregoing shall be subject to any limitations under the Code, (2) in the case of the exercise of an SAR, the number of shares counted against the shares available under the Plan and against the sublimits listed in the first clause of this Section 4(a)(2) shall be the full number of shares subject to the SAR multiplied by the percentage of the SAR actually exercised, regardless of the number of shares actually used to settle such SAR upon exercise and (3) the shares covered by a Tandem SAR shall not again become available for grant upon the expiration or termination of such Tandem SAR; and

(C) shares of Common Stock delivered (either by actual delivery, attestation, or net exercise) to the Company by a Participant to (i) purchase shares of Common Stock upon the exercise of an Award or (ii) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards.

(b) Section 162(m) Per-Participant Limit. Subject to adjustment under Section 9, the maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan shall be 5,000,000 per calendar year. For purposes of the foregoing limit, the combination of an Option in tandem with an SAR shall be treated as a single Award. The per Participant limit described in this Section 4(b) shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder (“Section 162(m)”).

(c) Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a)(1) or any sublimit contained in the Plan, except as may be required by reason of Section 422 and related provisions of the Code.

-3-

5.	Stock Options

(a) General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable.

(b) Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to employees of Durata Therapeutics, Inc., any of Durata Therapeutics, Inc.’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. An Option that is not intended to be an Incentive Stock Option shall be designated a “Nonstatutory Stock Option.” The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or if the Company converts an Incentive Stock Option to a Nonstatutory Stock Option.

(c) Exercise Price. The Board shall establish the exercise price of each Option and specify the exercise price in the applicable Option agreement. The exercise price shall be not less than 100% of the fair market value per share of Common Stock as determined by (or in a manner approved by) the Board (“Fair Market Value”) on the date the Option is granted; provided that if the Board approves the grant of an Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Fair Market Value on such future date.

(d) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement; provided, however, that no Option will be granted with a term in excess of 10 years.

(e) Exercise of Options. Options may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with payment in full (in the manner specified in Section 5(f)) of the exercise price for the number of shares for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.

(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

(1) in cash or by check, payable to the order of the Company;

(2) except as may otherwise be provided in the applicable Option agreement or approved by the Board, in its sole discretion, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

-4-

(3) to the extent provided for in the applicable Option agreement or approved by the Board, in its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their Fair Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

(4) to the extent provided for in the applicable Nonstatutory Stock Option agreement or approved by the Board in its sole discretion, by delivery of a notice of “net exercise” to the Company, as a result of which the Participant would receive (i) the number of shares underlying the portion of the Option being exercised, less (ii) such number of shares as is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the Fair Market Value on the date of exercise;

(5) to the extent permitted by applicable law and provided for in the applicable Option agreement or approved by the Board, in its sole discretion, by payment of such other lawful consideration as the Board may determine; or

(6) by any combination of the above permitted forms of payment.

(g) Repricing. The Board may, without stockholder approval, (1) amend any outstanding Option granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option, (2) cancel any outstanding option (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan (other than Awards granted pursuant to Section 4(c)) covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled option, (3) cancel in exchange for a cash payment any outstanding Option with an exercise price per share above the then-current Fair Market Value, other than pursuant to Section 9, or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the NASDAQ Stock Market.

6.	Stock Appreciation Rights

(a) General. The Board may grant Awards consisting of stock appreciation rights (“SARs”) entitling the holder, upon exercise, to receive an amount of Common Stock or cash or a combination thereof (such form to be determined by the Board) determined by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Common Stock over the measurement price established pursuant to Section 6(b). The date as of which such appreciation is determined shall be the exercise date.

(b) Measurement Price. The Board shall establish the measurement price of each SAR and specify it in the applicable SAR agreement. The measurement price shall not be less than 100% of the Fair Market Value on the date the SAR is granted; provided that if the Board approves the grant of an SAR effective as of a future date, the measurement price shall be not less than 100% of the Fair Market Value on such future date.

-5-

(c) Duration of SARs. Each SAR shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable SAR agreement; provided, however, that no SAR will be granted with a term in excess of 10 years.

(d) Exercise of SARs. SARs may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with any other documents required by the Board.

(e) Repricing. The Board may, without stockholder approval, (1) amend any outstanding SAR granted under the Plan to provide a measurement price per share that is lower than the then-current measurement price per share of such outstanding SAR, (2) cancel any outstanding stock appreciation right (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan (other than Awards granted pursuant to Section 4(c)) covering the same or a different number of shares of Common Stock and having a measurement price per share lower than the then-current measurement price per share of the cancelled stock appreciation right, (3) cancel in exchange for a cash payment any outstanding SAR with a measurement price per share above the then-current Fair Market Value, other than pursuant to Section 9, or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the NASDAQ Stock Market.

7.	Restricted Stock; Restricted Stock Units

(a) General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. The Board may also grant Awards entitling the recipient to receive shares of Common Stock or cash to be delivered at the time such Award vests (“Restricted Stock Units”) (Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).

(b) Terms and Conditions for All Restricted Stock Awards. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any.

(1) Dividends. Unless otherwise provided in the applicable Award agreement, any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of Restricted Stock (“Accrued Dividends”) shall be paid to the Participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares. Each payment of Accrued Dividends will be made no later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the lapsing of the restrictions on transferability and the forfeitability provisions applicable to the underlying shares of Restricted Stock.

-6-

(2) Stock Certificates. The Company may require that any stock certificates issued in respect of shares of Restricted Stock, as well as dividends or distributions paid on such Restricted Stock, shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to his or her Designated Beneficiary. “Designated Beneficiary” means (i) the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death or (ii) in the absence of an effective designation by a Participant, the Participant’s estate.

(d) Additional Provisions Relating to Restricted Stock Units.

(1) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to receive from the Company one share of Common Stock or (if so provided in the applicable Award agreement) an amount of cash equal to the Fair Market Value of one share of Common Stock. The Board may, in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a mandatory basis or at the election of the Participant in a manner that complies with Section 409A of the Code.

(2) Voting Rights. A Participant shall have no voting rights with respect to any Restricted Stock Units.

(3) Dividend Equivalents. The Award agreement for Restricted Stock Units may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid currently or credited to an account for the Participant, may be settled in cash and/or shares of Common Stock and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, in each case to the extent provided in the Award agreement.

8.	Other Stock-Based Awards

(a) General. Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“Other Stock-Based-Awards”). Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board shall determine.

(b) Terms and Conditions. Subject to the provisions of the Plan, the Board shall determine the terms and conditions of each Other Stock-Based Award, including any purchase price applicable thereto.

-7-

9.	Adjustments for Changes in Common Stock and Certain Other Events

(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) the share counting rules and sublimit set forth in Sections 4(a) and 4(b), (iii) the number and class of securities and exercise price per share of each outstanding Option, (iv) the share and per-share provisions and the measurement price of each outstanding SAR, (v) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award and (vi) the share and per-share-related provisions and the purchase price, if any, of each outstanding Other Stock-Based Award, shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

(b) Reorganization Events.

(1) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (b) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.

(2) Consequences of a Reorganization Event on Awards Other than Restricted Stock.

(A) In connection with a Reorganization Event, the Board may take any one or more of the following actions as to all or any (or any portion of) outstanding Awards other than Restricted Stock on such terms as the Board determines (except to the extent specifically provided otherwise in an applicable Award agreement or another agreement between the Company and the Participant): (i) provide that such Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a Participant, provide that all of the Participant’s unexercised Awards will terminate immediately prior to the consummation of such Reorganization Event unless exercised by the Participant (to the extent then exercisable) within a specified period following the date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such Reorganization Event, (iv) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon

-8-

consummation thereof a cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to Participants with respect to each Award held by a Participant equal to (A) the number of shares of Common Stock subject to the vested portion of the Award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such Reorganization Event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise, measurement or purchase price of such Award and any applicable tax withholdings, in exchange for the termination of such Award, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 9(b)(2), the Board shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.

(B) Notwithstanding the terms of Section 9(b)(2)(A), in the case of outstanding Restricted Stock Units that are subject to Section 409A of the Code: (i) if the applicable Restricted Stock Unit agreement provides that the Restricted Stock Units shall be settled upon a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i), and the Reorganization Event constitutes such a “change in control event”, then no assumption or substitution shall be permitted pursuant to Section 9(b)(2)(A)(i) and the Restricted Stock Units shall instead be settled in accordance with the terms of the applicable Restricted Stock Unit agreement; and (ii) the Board may only undertake the actions set forth in clauses (iii), (iv) or (v) of Section 9(b)(2)(A) if the Reorganization Event constitutes a “change in control event” as defined under Treasury Regulation Section 1.409A-3(i)(5)(i) and such action is permitted or required by Section 409A of the Code; if the Reorganization Event is not a “change in control event” as so defined or such action is not permitted or required by Section 409A of the Code, and the acquiring or succeeding corporation does not assume or substitute the Restricted Stock Units pursuant to clause (i) of Section 9(b)(2)(A), then the unvested Restricted Stock Units shall terminate immediately prior to the consummation of the Reorganization Event without any payment in exchange therefor.

(C) For purposes of Section 9(b)(2)(A)(i), an Award (other than Restricted Stock) shall be considered assumed if, following consummation of the Reorganization Event, such Award confers the right to purchase or receive pursuant to the terms of such Award, for each share of Common Stock subject to the Award immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise or settlement of the Award to consist solely of such number of shares of common stock of the acquiring or succeeding corporation (or an affiliate thereof) that the Board determined to be equivalent in value (as of the date of such determination or another date specified by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

-9-

(3) Consequences of a Reorganization Event on Restricted Stock. Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the repurchase and other rights of the Company with respect to outstanding Restricted Stock shall inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise, apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to such Restricted Stock; provided, however, that the Board may provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, either initially or by amendment. Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Stock then outstanding shall automatically be deemed terminated or satisfied.

10.	General Provisions Applicable to Awards

(a) Transferability of Awards. Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant; provided, however, that the Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if the Company would be eligible to use a Form S-8 under the Securities Act for the registration of the sale of the Common Stock subject to such Award to such proposed transferee; provided further, that the Company shall not be required to recognize any such permitted transfer until such time as such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees. For the avoidance of doubt, nothing contained in this Section 10(a) shall be deemed to restrict a transfer to the Company.

(b) Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.

(c) Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

-10-

(d) Termination of Status. The Board shall determine the effect on an Award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.

(e) Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on exercise, vesting or release from forfeiture of an Award or at the same time as payment of the exercise or purchase price, unless the Company determines otherwise. If provided for in an Award or approved by the Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery (either by actual delivery or attestation) of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

(f) Amendment of Award. The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option. The Participant’s consent to such action shall be required unless (i) the Board determines that the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 9.

(g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously issued or delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

(h) Acceleration. The Board may at any time provide that any Award shall become immediately exercisable in whole or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part, as the case may be.

-11-

11.	Miscellaneous

(a) No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award by virtue of the adoption of the Plan, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares.

(c) Effective Date and Term of Plan. The Plan shall become effective on the date the Plan is approved by the Company’s stockholders (the “Effective Date”). No Awards shall be granted under the Plan after the expiration of 10 years from the Effective Date, but Awards previously granted may extend beyond that date.

(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time provided that (i) to the extent required by Section 162(m), no Award granted to a Participant that is intended to comply with Section 162(m) after the date of such amendment shall become exercisable, realizable or vested, as applicable to such Award, unless and until the Company’s stockholders approve such amendment in the manner required by Section 162(m); and (ii) no amendment that would require stockholder approval under the rules of the NASDAQ Stock Market may be made effective unless and until the Company’s stockholders approve such amendment;. In addition, if at any time the approval of the Company’s stockholders is required as to any other modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 11(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of Participants under the Plan. No Award shall be made that is conditioned upon stockholder approval of any amendment to the Plan unless the Award provides that (i) it will terminate or be forfeited if stockholder approval of such amendment is not obtained within no more than 12 months from the date of grant and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.

(e) Authorization of Sub-Plans (including for Grants to non-U.S. Employees). The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable securities, tax or other laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the

-12-

Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.

(f) Compliance with Section 409A of the Code. Except as provided in individual Award agreements initially or by amendment, if and to the extent (i) any portion of any payment, compensation or other benefit provided to a Participant pursuant to the Plan in connection with his or her employment termination constitutes “nonqualified deferred compensation” within the meaning of Section 409A of the Code and (ii) the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in accordance with its procedures, by which determinations the Participant (through accepting the Award) agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of “separation from service” (as determined under Section 409A of the Code) (the “New Payment Date”), except as Section 409A of the Code may then permit. The aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.

The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not to satisfy the conditions of that section.

(g) Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, employee or agent of the Company. The Company will indemnify and hold harmless each director, officer, employee or agent of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning the Plan unless arising out of such person’s own fraud or bad faith.

(h) Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than the State of Delaware.

-13-

EX-10.4 6 d312438dex104.htm FORM OF INCENTIVE STOCK OPTION AGREEMENT Form of Incentive Stock Option Agreement

Exhibit 10.4

DURATA THERAPEUTICS, INC.

Incentive Stock Option Agreement

Granted Under 2012 Stock Incentive Plan

1.	Grant of Option.

This agreement evidences the grant by Durata Therapeutics, Inc., a Delaware corporation (the “Company”), on , 2012 (the “Grant Date”) to [ ], an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2012 Stock Incentive Plan (the “Plan”), a total of [ ] shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $[ ] per Share.¹ Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on [ ] (the “Final Exercise Date”).²

It is intended that the option evidenced by this agreement shall be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

2.	Vesting Schedule.

This option will become exercisable (“vest”) as to % of the original number of Shares on the [ ] anniversary of the Grant Date and as to an additional % of the original number of Shares at the end of each successive [ ] period following the [ ] anniversary of the Grant Date until the [ ] anniversary of the Grant Date.

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

3.	Exercise of Option.

(a) Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than ten whole shares.

This must be at least 100% of the fair market value of the Common Stock on the date of grant (or 110% in the case of a Participant that owns more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary (a “10% Shareholder”)) for the option to qualify as an incentive stock option (an “ISO”) under Section 422 of the Code.

The Final Exercise Date must be no more than 10 years (5 years in the case of a 10% Shareholder) from the date of grant for the option to qualify as an ISO. The correct approach to calculate the final exercise date is to use the day immediately prior to the date ten years out from the date of the stock option award grant (5 years in the case of a 10% stockholder). For example, an award granted to someone on October 1, 2001 would expire on September 30, 2011 (not on October 1, 2011).

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee or officer of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an “Eligible Participant”).

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon written notice to the Participant from the Company describing such violation.

(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for “cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.

(e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s employment is terminated by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment. If, prior to the Final Exercise Date, the Participant is given notice by the Company of the termination of his or her employment by the Company for Cause, and the effective date of such employment termination is subsequent to the date of delivery of such notice, the right to exercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s employment shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment (in which case the right to exercise this option shall, pursuant to the preceding sentence, terminate upon the effective date of such termination of employment). If the Participant is party to an employment or severance agreement with the Company that contains a definition of “cause” for termination of employment, “Cause” shall have the meaning ascribed to such term in such agreement. Otherwise, “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement

- 2 -

between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant’s employment shall be considered to have been terminated for Cause if the Company determines, within 30 days after the Participant’s resignation, that termination for Cause was warranted.

4.	Agreement in Connection with Initial Public Offering.

The Participant agrees, in connection with the initial underwritten public offering of the Common Stock pursuant to a registration statement under the Securities Act, (i) not to (a) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any other securities of the Company or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of shares of Common Stock or other securities of the Company, whether any transaction described in clause (a) or (b) is to be settled by delivery of securities, in cash or otherwise, during the period beginning on the date of the filing of such registration statement with the Securities and Exchange Commission and ending 180 days after the date of the final prospectus relating to the offering (plus up to an additional 34 days to the extent requested by the managing underwriters for such offering in order to address Rule 2711(f) of the National Association of Securities Dealers, Inc. or any similar successor provision), and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering. The Company may impose stop-transfer instructions with respect to the shares of Common Stock or other securities subject to the foregoing restriction until the end of the “lock-up” period.

5.	Tax Matters.

(a) Withholding. No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

(b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.

6.	Transfer Restrictions.

(a) This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

(b) The Participant agrees that he or she will not transfer any Shares issued pursuant to the exercise of this option unless the transferee, as a condition to such transfer, delivers to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of Section 4; provided that such a written confirmation shall not be required with respect to Section 4 after the completion of the lock-up period in connection with the Company’s initial underwritten public offering.

- 3 -

This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this option.

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.


DURATA THERAPEUTICS, INC.

By:

		Name:
		Title:

- 4 -

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2012 Stock Incentive Plan.


PARTICIPANT:



Address:

- 5 -

EX-10.5 7 d312438dex105.htm FORM OF NONSTATUTORY STOCK OPTION AGREEMENT Form of Nonstatutory Stock Option Agreement

Exhibit 10.5

DURATA THERAPEUTICS, INC.

Nonstatutory Stock Option Agreement

Granted Under 2012 Stock Incentive Plan

1.	Grant of Option.

This agreement evidences the grant by Durata Therapeutics, Inc., a Delaware corporation (the “Company”), on , 2012 (the “Grant Date”) to [ ], an [employee], [consultant], [director] of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2012 Stock Incentive Plan (the “Plan”), a total of [ ] shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $[ ] per Share.¹ Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on [ ] (the “Final Exercise Date”).

It is intended that the option evidenced by this agreement shall not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

2.	Vesting Schedule.

3.	Exercise of Option.

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he

¹	Under the Plan, there are no restrictions on the exercise price; however, if the exercise price is less than 100% of fair market value of the Common Stock as of the date of grant, the Company will incur a charge to earnings as the result of the grant of the option.

or she exercises this option, is, and has been at all times since the Grant Date, an employee or officer of, or consultant or advisor to, the Company or any other entity the employees, officers, directors, consultants, or advisors of which are eligible to receive option grants under the Plan (an “Eligible Participant”).

(e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s employment or other relationship with the Company is terminated by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment or other relationship. If, prior to the Final Exercise Date, the Participant is given notice by the Company of the termination of his or her employment or other relationship by the Company for Cause, and the effective date of such employment or other termination is subsequent to the date of the delivery of such notice, the right to exercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s employment or other relationship shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment or other relationship (in which case the right to exercise this option shall, pursuant to the preceding sentence, terminate immediately upon the effective date of such termination of employment or other relationship). If the Participant is party to an employment, consulting or severance agreement with the Company that contains a definition of “cause” for termination of employment or other relationship, “Cause” shall have the meaning ascribed to such term in such agreement. Otherwise, “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant’s employment or other relationship shall be considered to have been terminated for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that termination for Cause was warranted.

-2-

4.	Agreement in Connection with Initial Public Offering.

5.	Withholding.

No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

6.	Transfer Restrictions.

7.	Provisions of the Plan.

This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this option.

-3-

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.


DURATA THERAPEUTICS, INC.

By:

		Name:
		Title:

-4-

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2012 Stock Incentive Plan.


PARTICIPANT:



Address:

-5-

EX-10.8 8 d312438dex108.htm STOCK PURCHASE AGREEMENT Stock Purchase Agreement

Exhibit 10.8

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

Execution Version

STOCK PURCHASE AGREEMENT

Dated as of December 11, 2009

between

PFIZER, INC.

and

DURATA THERAPEUTICS, INC.

TABLE OF CONTENTS


		Page

1.	DEFINITIONS; CERTAIN RULES OF CONSTRUCTION		1

2.	PURCHASE AND SALE OF SHARES		12

	2.1. Purchase and Sale of Shares		12

	2.2. Purchase Price		12

	2.3. The Closing		13

	2.4. Closing Deliveries		13

	2.5. Milestone Payment		13

	2.6. FDA Confirmatory Milestone		14

3.	REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY BY THE SELLER		16

	3.1. Organization, Qualification; Subsidiaries		16

	3.2. Capital Structure		17

	3.3. Power and Authorization		17

	3.4. Noncontravention		17

	3.5. Litigation		18

	3.6. Intellectual Property		18

	3.7. Regulatory Compliance		19

	3.8. Company Contracts		20

	3.9. Employees and Consultants		21

	3.10. Real Property		22

	3.11. Environmental Matters		22

	3.12. No Brokers		22

	3.13. Taxes		22

	3.14. Insurance		24

	3.15. Governmental Authorizations		24

	3.16. Books and Records		24

	3.17. Asset and Liability Statement		24

	3.18. No Undisclosed Liabilities		25

	3.19. Compliance with Legal Requirements		25

- i -



	3.20. Seller’s Knowledge	25

	3.21. Residual Assets	25

	3.22. No Other Representations or Warranties	25

4.	REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER BY THE SELLER	26

	4.1. Organization	26

	4.2. Power and Authorization	26

	4.3. Authorization of Governmental Authorities	26

	4.4. Noncontravention	26

	4.5. Shares	27

	4.6. No Brokers	27

	4.7. Indemnification	27

	4.8. Other Contractual Obligations	27

	4.9. RaQualia Agreement	27

	4.10. Competing Products	28

	4.11. Inventory	28

5.	REPRESENTATIONS AND WARRANTIES OF THE BUYER	28

	5.1. Organization	28

	5.2. Power and Authorization	28

	5.3. Authorization of Governmental Authorities	28

	5.4. Noncontravention	29

	5.5. Investment Experience; Investigation; Reliance	29

	5.6. No Brokers	30

	5.7. Budget	30

	5.8. Corporate Status	30

	5.9. No Other Representations or Warranties	30

6.	COVENANTS	30

	6.1. Closing	30

	6.2. Conduct of Business	31

	6.3. Buyer’s Access to Premises	32

	6.4. Notice of Developments	33

	6.5. Expenses	33

- ii -



	6.6. Exclusivity	33

	6.7. Notices and Consents	34

	6.8. FDA Confirmatory Milestone	34

	6.9. Diligence	34

	6.10. Confidentiality	34

	6.11. Publicity	36

	6.12. Further Assurances	36

	6.13. Buyers Non-Transitory Corporation Covenant	37

	6.14. Listed Transactions	37

	6.15. Payment of Indebtedness	37

7.	CONDITIONS TO THE BUYERS OBLIGATIONS AT THE CLOSING	37

	7.1. Representations and Warranties	37

	7.2. Performance	37

	7.3. Stock Certificates	38

	7.4. Compliance Certificate	38

	7.5. Qualifications	38

	7.6. Absence of Litigation	38

	7.7. Ancillary Agreements	38

	7.8. Excluded Assets; Excluded Liabilities	38

8.	CONDITIONS TO THE SELLER’S OBLIGATIONS AT THE CLOSING	38

	8.1. Representations and Warranties	38

	8.2. Performance	39

	8.3. Compliance Certificate	39

	8.4. Qualifications	39

	8.5. Absence of Litigation	39

	8.6. Ancillary Agreements	39

	8.7. Excluded Assets	39

9.	TERMINATION	39

	9.1. Termination of Agreement	39

	9.2. Effect of Termination	40

- iii -



10.	INDEMNIFICATION	40

	10.1. Indemnification by the Seller	40

	10.2. Indemnity by the Buyer	42

	10.3. Time for Claims	43

	10.4. Third Party Claims	44

	10.5. Other Limitations	45

	10.6. Remedies Cumulative	46

	10.7. Knowledge and Investigation	46

	10.8. No Right of Set-Off	46

	10.9. Exclusive Remedy	46

11.	TAX MATTERS	47

	11.1. Tax Indemnification	47

	11.2. Straddle Period	47

	11.3. Tax Sharing Agreements	47

	11.4. Certain Taxes and Fees	47

	11.5. Cooperation on Tax Matters	48

	11.6. Tax Contests	48

	11.7. Tax Returns	48

	11.8. Other	49

12.	MISCELLANEOUS	49

	12.1. Notices	49

	12.2. Succession and Assignment; No Third-Party Beneficiary	50

	12.3. Amendments and Waivers	51

	12.4. Entire Agreement	51

	12.5. Exhibits; Listed Documents, etc	51

	12.6. Counterparts	51

	12.7. Severability	51

	12.8. Headings	51

	12.9. Construction	52

	12.10. Governing Law	52

	12.11. Dispute Resolution	52

	12.12. Jurisdiction; Venue; Service of Process	53

- iv -

EXHIBITS


Exhibit 1(a)		Excluded Assets

Exhibit 1(b)		Excluded Liabilities

Exhibit 1(c)		Included Assets

Exhibit 1(d)		Included Liabilities

Exhibit 1(e)		Inventory Transfer Agreement

Exhibit 1(f)		Pleuromutilin Structure

Exhibit 1(g)		RaQualia Assignment Agreement

Exhibit 1(h)		Reverse TSA Assignment Agreement

Exhibit 1(i)		Knowledge

Exhibit 1(j)		Transition Services Agreement

Exhibit 2.5.1		Form of Promissory Note

Exhibit 5.7		Buyer’s Development and Commercialization Budget for the Product

Exhibit 6.2.1(f)		Company Contract Modifications

Exhibit 7.4		Form of Seller’s Compliance Certificate

Exhibit 8.3		Form of Buyer’s Compliance Certificate

SCHEDULES

Schedule 1(a)		Lincosamide Patents

Schedule 3		Seller’s Disclosure Schedules

Schedule 4.3		Authorization of Government Authorities

Schedule 4.4		Noncontravention

Schedule 4.11		Inventory Specifications

Schedule 5.3		Authorization of Government Authorities

Schedule 5.4		Noncontravention

- v -

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT, dated as of December 11, 2009 (the “Execution Date”), is by and between (i) Durata Therapeutics, Inc., a Delaware corporation (the “Buyer”) and, (ii) Pfizer, Inc., a Delaware corporation (the “Seller”) (the “Agreement”).

THE PARTIES ENTER INTO THIS AGREEMENT ON THE BASIS OF THE FOLLOWING FACTS, INTENTIONS AND UNDERSTANDINGS:

A. The Seller is the sole record and beneficial owner of all of the outstanding shares of capital stock (the “Shares”) of Vicuron Pharmaceuticals Inc., a Delaware corporation and a wholly owned subsidiary of the Seller (the “Company”).

B. The Company has, prior to the Execution Date, advised Buyer that (i) the Company has assigned, sold, distributed or otherwise transferred all of the Excluded Assets (as defined below) to the Seller, its Affiliates, its subsidiaries or third parties (or will do so prior to the Closing Date), and (ii) the Seller, its Affiliates, its subsidiaries or third parties have acquired all right, title and interest in and to all of the Excluded Liabilities (as defined below) related thereto (or will do so prior to the Closing Date).

C. The Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, all of the Shares for the consideration, and upon the terms and subject to the conditions set forth, in this Agreement.

NOW THEREFORE, in consideration of the premises and mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Buyer and the Seller hereby agree as follows.

1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. As used herein, the following terms shall have the following meanings:

“Action” means any claim, action, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, investigation, hearing, charge, complaint, demand, notice, whistle-blowing action or proceeding to, from, by or before any Governmental Authority or any Regulatory Authority.

“Affiliate” means any entity directly or indirectly controlled by, controlling, able to control, or under common control with, a specified Person, but only for so long as such control shall continue. For purposes of this definition, “control” (including, with correlative meanings, “controlled by”, “controlling” and “under common control with”) means possession, direct or indirect, of (a) the power to direct or cause direction of the management and policies of such Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), or (b) at least 50% of the voting securities (whether directly or pursuant to any option, warrant or other similar arrangement) or other comparable equity interests of such Person. For the avoidance of doubt, (i) neither of the parties to this Agreement shall be deemed to be an “Affiliate” of the other solely as a result of their entering into this Agreement, and (ii)

-1-

each stockholder of the Buyer on the Execution Date (“Buyer’s Original Affiliates”) shall be deemed to be an Affiliate of the Buyer so long as it owns beneficially not less than 10% of the voting securities of the Buyer.

“Agreement” is defined in the Preamble.

“Ancillary Agreements” means (i) the certificates delivered pursuant to Sections 7.4 and 8.3, (ii) the Transition Services Agreement, the (iii) RaQualia Assignment Agreement, (iv) the Inventory Transfer Agreement, (v) the Reverse TSA Assignment Agreement, and (vi) the Promissory Note.

“Anidulafungin”, also known as ERAXIS or ECALTA, means any finished or semi-finished good containing the compound having the chemical name 1-[(4R, 5R)-4,5 Dihydroxy-N2-[[4”-pentyloxy)[1,1’:4’,1”-terphenyl]-4-yl]carbonyl]-L-ornithine]echinocandin B (including any analogs, stereoisomers and mixtures thereof (such as racemates), radiosomers, metabolites, salts, solvates and polymorphs and prodrugs thereof) and all dosage strength and sizes thereof, together with all expansions and improvements thereon.

“Asset and Liability Statement” is defined in Section 3.17.

“Biosearch Manufacturing” means Biosearch Manufacturing Srl., an Italian limited liability company.

“Bona Fide Transaction” means an arms-length disposition transaction to a bona fide third party that is not an Affiliate of more than two of the Buyer’s Original Affiliates.

“Budget” means the Buyer’s budget for securing Market Approval from the FDA in the U.S. for the Product in cSSS1 in adults (including the Upfront Consideration) that is established in good faith by the Buyer, an initial draft of which has been delivered to the Seller prior to the Execution Date in the form attached hereto as Exhibit 5.7, as such budget may from time to time be amended or modified by the Buyer in accordance with and subject to the provisions of Section 5.7.

“Business Day” means any weekend other than a weekend on which banks in New York City are authorized or required to be closed.

“Buyer” is defined in the Preamble.

“Buyer Indemnified Person” is defined in Section 10.1.1.

“Buyer’s Original Affiliates” is defined in the definition of Affiliates.

“Buyout Period” is defined in Section 2.5.2.

“CERCLA” is defined in Section 3.11.2.

“Change of Control,” with respect to the Buyer, means an event in which: (A) any other Person or group of Persons acting in concert (other than a Parent Entity of the Buyer or Buyer’s

-2-

Original Affiliates) acquires beneficial ownership of securities of the Buyer representing more than 50% of the voting power of the then outstanding securities of the Buyer with respect to the election of directors of the Buyer; (B) the Buyer enters into a merger, consolidation, scheme of arrangement or similar transaction with another Person, unless (i) the members of the Board of Directors of the Buyer immediately prior to such transaction constitute more than 50% of the members of the Board of Directors of the Buyer (or a Parent Entity of the Buyer) immediately following such transaction, and (ii) the Persons who beneficially owned the outstanding voting securities of the Buyer immediately prior to such transaction beneficially own securities of the Buyer representing at least 50% of the voting power with respect to the election of directors of the Buyer immediately following such transaction, or a Parent Entity of the Buyer beneficially owns securities of the Buyer representing 100% of the voting power with respect to the election of directors of the Buyer immediately following such transaction; or (C) the Buyer sells to any Person(s), in one or more related transactions, a majority of the property and assets of the Buyer. For purposes of this definition, a “Parent Entity” of the Buyer means any Person that acquires directly or indirectly, by merger or otherwise, the capital stock of the Buyer if the holders of securities that represented 100% of the voting power with respect to the election of directors (“Voting Stock”) of the Buyer immediately prior to such acquisition directly own 100% of the Voting Stock of the Parent Entity immediately after such acquisition and in the exact same percentages as they owned Voting Stock in the Buyer immediately prior to such acquisition.

“Closing” is defined in Section 2.3.

“Closing Date” means December 18, 2009, or such later date on which Closing actually occurs as the parties mutually agree in writing in accordance with Section 2.3.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Commercially Reasonable” is defined in Section 6.9.

“Company” is defined in the Recitals of this Agreement.

“Company Acquisition Date” means September 14, 2005 (the date that the Company was acquired by the Seller).

“Company Contracts” is defined in Section 3.8.1.

“Company Patents” is defined in Section 3.6.1.

“Company Trademarks” is defined in Section 3.6.2.

“Confidential Information” is defined in Section 6.10.1.

“Confidentiality Agreements” is defined in Section 6.10.2.

“Consent” means any approval, consent, ratification, waiver, license, permit or other authorization (including any Governmental Authorization).

-3-

“Contemplated Transactions” means, collectively, the transactions contemplated by this Agreement, including (a) the sale and purchase of the Shares, and (b) the execution, delivery and performance of the Ancillary Agreements.

“Contractual Obligation” means, with respect to any Person, any contract, agreement, deed, mortgage, lease, license, commitment, promise, undertaking, arrangement or understanding, whether written or oral and whether express or implied, or other document or instrument (including any document or instrument evidencing or otherwise relating to any Debt) to which or by which such Person is a party or otherwise subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound.

“cSSSI” means any indication for the treatment of complicated skin and skin structure infections.

“Debt” means, with respect to any Person, all obligations (including all obligations in respect of principal, accrued interest, penalties, fees and premiums) of such Person (a) for borrowed money (including overdraft facilities), (b) evidenced by notes, bonds, debentures or similar Contractual Obligations, (c) for the deferred purchase price of property, goods or services (other than trade payables or accruals incurred in the Ordinary Course of Business), (d) under capital leases (in accordance with GAAP), (e) in respect of letters of credit and bankers’ acceptances, (f) for Contractual Obligations relating to interest rate protection, swap agreements and collar agreements, and (g) in the nature of Guarantees of the obligations described in clauses (a) through (f) above of any other Person.

“Disclosing Party” is defined in Section 6.10.1.

“Disclosure Schedule” is defined in Section 3.

“Encumbrance” means any change, claim, community or other marital property interest, condition, equitable interest, lien, license, option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first offer or first refusal, buy/sell agreement and any other restriction or covenant with respect to, or condition governing the use, construction, voting (in the case of any security or equity interest), transfer, receipt of income or exercise of any other attribute of ownership).

“Enforceable” means, with respect to any Contractual Obligation stated to be Enforceable by or against any Person, that such Contractual Obligations is a legal, valid and binding obligation of such Person enforceable by or against such Person in accordance with its terms, except to the extent that enforcement of the rights and remedies created thereby is subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).

“Environmental Laws” means any applicable Federal, state or local Legal Requirements, in each case as amended and in effect in the jurisdiction in which the applicable site or premises are located, pertaining to the protection of human health, safety or the environment, including without limitation, the following statutes and all regulations promulgated thereunder. CERCLA; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the

-4-

Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Federal Clean Air Act, 42 U.S.C. § 7401 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the Toxic Substance Control Act, 15 U.S.C. § 2601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801 et seq.; the Atomic Energy Act, 42 U.S.C. § 2014 et seq.; any state or local statute or similar effect; and any Laws relating to protection of the environment which regulate the management or disposal of biological agents or substances including medical or infectious wastes.

“Excluded Assets” means (i) all interest in, and assets held by, the Italian branch of the Company, (ii) all direct or indirect equity or other interests in Biosearch Manufacturing and Vicuron Pharmaceuticals Italy, (iii) the assets related to the Anidulafungin franchise, including the assets set forth on Exhibit 1(a) attached hereto, (iv) the manufacturing plant and real estate assets of the Company including real estate relating to Vicuron Pharmaceuticals Italy, Biosearch Manufacturing, the Pisticci Plant, and the Geranzano Research Center and any other assets not directly relating to the Product or the Residual Assets For the avoidance of doubt the Excluded Assets shall not include the Included Assets

“Excluded Liabilities” means all Liabilities relating directly or indirectly to the Excluded Assets (including any environmental liabilities arising out of any Environmental Laws and any foreign equivalents thereof) or Hazardous Materials (including those treated as such under foreign equivalents of Environmental Laws) relating to Vicuron Pharmaceuticals Italy, Biosearch Manufacturing, the Pisticci Plant or the Geranzano Research Center, and those Liabilities set forth on Exhibit 1(b).

“Execution Date” is defined in the Preamble.

“FDA” means the U.S. Food and Drug Administration of the United States Department of Health and Human Services or any successor agency thereof.

“FDA Confirmatory Milestone” means an FDA Response which specifically confirms or indicates from Type Meeting or other Formal FDA Meeting that Marketing Approval in the U.S. for the Product in cSSSI in adults shall require evidence from Study 8 and/or Study 9 only or no more than one additional successful Phase III Trial (appropriately powered and designed in addition to Study 8 and Study 9).

“FDA Milestone Period” is defined in Section 2.6.1.

“FDA Response” means the FDA’s final written minutes of Formal FDA Meeting Special Protocol Assessment Letter, or any other written correspondence from the FDA following Formal FDA Meeting that addresses the number and type of additional successful Phase III Trials required to receive Marketing Approval in the U.S. for the Product in cSSSI in adults.

“FDACM Notice” is defined in Section 2.6.1.

“FDCA” is defined in Section 3.7.1.

-5-

“Final Termination Date” is defined in Section 9.1(b).

“First Commercial Sale” means, with respect to the Product, the first commercial sale of the Product (i) in the United States after Marketing Approval has been granted for the Product in cSSSI in adults in the United States or (ii) in any of the United Kingdom, Germany, Italy, Spain, or France after (a) Marketing Approval has been granted by the European Medicines Agency or (b) Marketing Approval has been granted by Regulatory Authority in any three of the following five countries: United Kingdom, Germany, Italy, Spain, and France in each of (a) and (b), for the Product in cSSSI in adults in the applicable foregoing country.

“First Commercial Sale Date” is defined in Section 2.5.1

“Formal FDA Meeting” means Type A, Type B or Type C meeting as described in the FDA Guidance for Industry, “Formal Meetings Between the FDA and Sponsors or Applicants” (Revision 1, May 2009) at which the number and type of additional successful Phase III Trials required to receive Marketing Approval in the U.S. for the Product in cSSSI in adults is discussed.

“Fundamental Representations and Warranties” is defined in Section 10.1.2.

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

“Geranzano Research Center” means the research center located in Via Lepetit 34, 21040 Gerenzano VA, Italy.

“Government Order” means any order, writ, judgment, injunction, decree, stipulation, ruling, determination or award entered by or with any Governmental Authority.

“Governmental Authorization” means any Consent issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Legal Requirement.

“Governmental Authority” means any United States federal, state or local or any foreign government or political subdivision thereof, or any multinational organization or authority or any authority agency or commission, in each case, entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power any court or tribunal (or any department bureau or division thereof), or any arbitrator or arbitral body.

“Guarantee” means with respect to any Person, (a) any guarantee of the payment or performance of, or any contingent obligation in respect of, any Debt or other Liability of any other Person, (b) any other arrangement whereby credit is extended to any obligor (other than such Person) on the basis of any promise or undertaking of such Person (i) to pay the Debt or other Liability of such obligor, (ii) to purchase any obligation owed by such obligor, (iii) to purchase or lease assets under circumstances that are designed to enable such obligor to discharge one or more of its obligations, or (iv) to maintain the capital, working capital, solvency or general financial condition of such obligor, and (c) any Liability as general partner of partnership or as venturer in joint venture in respect of Debt or other obligations of such partnership or venture.

-6-

“Hazardous Materials” means (a) any chemicals materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “chemical substances,” “toxic substances,” “toxic pollutants,” “pollutants,” “contaminants,” “pesticides,” or “oil” as defined in any applicable Environmental Law or (b) any petroleum or petroleum products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls, urea formaldehyde foam insulation, radon and any other substance defined or designated as hazardous toxic or harmful to human health safety or the environment under any Environmental Law.

“Included Assets” means those assets of the Company relating directly to the Product including those assets described on Exhibit 1(c) attached hereto For the avoidance of doubt, the Included Assets shall not include the Excluded Assets.

“Included Liabilities” means all Liabilities set forth on Exhibit 1(d) and all other Liabilities relating directly to the Included Assets other than (i) any Liabilities arising out of breach of or inaccuracy in any of Sellers representations and warranties in Sections 3 and 4 of this Agreement or in any Ancillary Agreement and (ii) all Excluded Liabilities for which the Seller has agreed to indemnify the Buyer under Section 10.1.1(d). For the avoidance of doubt, the Included Liabilities shall not include the Excluded Liabilities.

“Indemnified Party” means, with respect to any Indemnity Claim, the party asserting such claim under Section 10.1 or 10.2, as applicable.

“Indemnifying Party” means, with respect to any Indemnity Claim, the Buyer or the Seller under Section 10.1 or 10.2, as applicable, against whom such claim is asserted.

“Indemnity Cap” is defined in Section 10.1.2(a).

“Indemnity Claim” means claim for indemnity under Section 10.1 or 10.2, as applicable.

“Inventory Transfer Agreement” means that certain Inventory Transfer Agreement by and among Pfizer Overseas LLC and the Buyer, to be executed on or before the Closing Date, the form of which is attached hereto as Exhibit 1(e).

“Knowledge” is defined in the definition of Seller’s Knowledge.

“Legal Requirement” means any United States federal, state or local or foreign law, statute, standard, ordinance, code, rule, act, regulation resolution or promulgation, or any Government Order, or any license franchise permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law.

“Liability” means, with respect to any Person, any liability or obligation of such Person whether known or unknown whether asserted or unasserted, whether determined, determinable or otherwise, whether absolute or contingent, whether accrued or unaccrued whether liquidated or unliquidated whether incurred or consequential whether due or to become due and whether or not required under GAAP to be accrued on the financial statements of such Person.

-7-

“Licensed Patents” is defined in Section 3.6.1.

“Lincosamide Asset” means the Patents identified on Schedule 1(a) and all know-how, data and other intellectual property owned by the Company as of the Execution Date that relate directly to the compounds described and disclosed in such Patents.

“Losses” is defined in Section 10.1.1.

“Market” means any regulatory jurisdiction for which the Company obtains Marketing Approval for the Product, other than Japan, including, at such time the Company obtains Marketing Approval for the Product in such countries the United States and all current and future member countries of the European Union.

“Marketing Approval” means, with respect to the Product in any regulatory jurisdiction and for any indication, the approval of all Regulatory Authorities required to authorize the marketing of the Product in such jurisdiction for such indication.

“Material Adverse Effect” means, with respect to any Person, any development in, change in, or effect on, the business operations, assets, condition or prospects (financial or otherwise) of such Person which, when considered either individually or in the aggregate, together with all other adverse developments, changes, or effects with respect to which such phrase is used in this Agreement, is, or is reasonably likely to be, materially adverse to the business, operations, assets (including in the case of the Company the Product) condition or prospects financial or otherwise of such Person taken as whole.

“Milestone Buyout” is defined in Section 2.5.2.

“Milestone Payment” is defined in Section 2.2.

“Ordinary Course of Business” means an action taken by any Person in the ordinary course of such Persons business which is consistent with the past customs and practices of such Person (including past practice with respect to quantity, amount, magnitude and frequency standard employment and payroll policies and past practice with respect to management of working capital and interactions with Regulatory Authorities) which is taken in the ordinary course of the normal day-to-day operations of such Person.

“Organizational Documents” means with respect to any Person (other than an individual), (a) the certificate or articles of incorporation or organization and any joint venture, limited liability company, operating or partnership agreement and other similar documents adopted or filed in connection with the creation, formation or organization of such Person and (b) all by-laws, voting agreements and similar documents instruments or agreements relating to the organization or governance of such Person in each case as amended or supplemented.

“Owned Patents” is defined in Section 3.6.1.

-8-

“Parent Entity” is defined in the definition of Change of Control.

“Patents” means all patents and applications in any country or region (including PCT filings and provisional applications), together with any and all patents that have issued or in the future issue therefrom, including any and all divisional continuations, continuations-in-part, re-examination certificates, substitutions, registrations, confirmations, extensions, supplementary protection certificates, confirmation patents, patents of additions, certificates of invention, utility model and design patents, renewals, reissues of or relating to any of the aforesaid patents and/or patent applications, as applicable.

“Permitted Encumbrance” means (a) statutory liens for current Taxes, special assessments or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP, (b) mechanics’, materialmen’s, carriers’, workers’, repairers’, and similar statutory liens arising or incurred in the Ordinary Course of Business which liens have not had and are not reasonably likely to have Material Adverse Effect on the Person subject to such liens, (c) zoning, entitlement, building and other land use regulations imposed by Governmental Authorities having jurisdiction over any real property which are not violated in any material respect by the current use and operation of the real property, (d) deposits or pledges made in connection with, or to secure payment of, workers compensation, unemployment insurance, old age pension programs mandated under applicable Legal Requirements or other social security, (e) covenants, conditions, restrictions easements, encumbrances and other similar matters of record affecting title to but not adversely affecting current occupancy or use of the real property in any material respect, and (f) restrictions on the transfer of securities arising under federal and state securities Legal Requirements.

“Person” means any individual or corporation, association, partnership, limited liability company, joint venture, joint stock or other company, business trust, trust, organization, Governmental Authority or other entity of any kind.

“Phase III Trial” means pivotal clinical study designed to establish the safety and effectiveness of drug product for its proposed intended use and which if it successfully meets the protocol defined end-points and applicable statistical criteria, is intended to be submitted to Regulatory Authorities in Market as part of an application for Marketing Approval.

“PHSA” is defined in Section 3.7.1.

“Pisticci Plant” means the manufacturing site located in Via Pomarico 75015 Pisticci Scalo (MT) Italy.

“Pleuromutilin Asset” means all know-how, data, and other intellectual property owned by the Company as of the Execution Date that relates directly to compounds of the polycyclic formula represented by the chemical structure set forth on Exhibit 1(f).

“Post-Closing Tax Period” means any Tax period other than Pre-Closing Tax Period.

“Pre-Closing Tax Period” is defined in Section 11.1.

-9-

“Product Transfer” is defined in Section 2.5.3.

“Product” means all pharmaceutical formulations and dosage forms of dalbavancin or any salt prodrug, hydrate, solvate, metabolite, or polymorph form of dalbavancin.

“Promissory Note” is defined in Section 2.5.1.

“Purchase Price” is defined in Section 2.2.

“Qualified Successor” is defined in Section 2.5.3.

“RaQualia” means RaQualia Pharma Inc.

“RaQualia Agreement” means that certain Dalbavanein Marketing Rights Agreement by and between Pfizer Inc and RaQualia Pharma, Inc. dated as of June 30, 2008 as amended.

“RaQualia Assignment Agreement” means that certain agreement by and among the Seller and the Buyer, to be executed on or before the Closing Date, the form of which is attached hereto as Exhibit 1(g).

“Receiving Party” is defined in Section 6.10.1.

“Regulatory Authorities” means the FDA and comparable regulatory or Governmental Authorities in any Market in the world.

“Representative” means with respect to any Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel accountants and financial advisors.

“Residual Assets” means the Lincosamide Asset and the Pleuromutilin Asset.

“Reverse TSA Assignment Agreement” means that certain Assignment Agreement by and between Pfizer Overseas LLC and the Buyer, to be executed on or before the Closing Date, the form of which is attached hereto as Exhibit 1(h).

“Securities Act” means the Securities Act of 1933, as amended.

“Seller” is defined in the Preamble.

“Seller Documentation” is defined in Section 6.3.

“Seller Indemnified Person” is defined in Section 10.2.1.

“Sellers Dispute Notice” is defined in Section 2.6.5.

“Seller’s Knowledge” or “Knowledge” means the actual knowledge of the individuals listed on Exhibit 1(i) attached hereto which list includes such individuals’ titles and operating responsibilities with respect to the Company or other relationship to the Company through which such individuals would have acquired such actual knowledge.

-10-

“Seller Payment” is defined in Section 2.6.1.

“Shares” is defined in the Recitals to this Agreement.

“Special Indemnity Cap” is defined in Section 10 1.2(c).

“Special Protocol Assessment” means an FDA review of, and written agreement with, a study sponsor regarding the proposed clinical protocols for one or more Phase III Trials whose data will form the primary basis for an efficacy claim for drug product as further described in the FDA Guidance for Industry, Special Protocol Assessments (May 2002).

“Special Protocol Assessment Letter” means written correspondence from the FDA to study sponsor documenting the outcome of Special Protocol Assessment.

“Stockholders And Subscription Agreement” means that certain Stockholders And Subscription Agreement to be executed on or before the Closing Date, by and among the Buyer and the investors party thereto. Neither the Company nor the Seller are parties to the Stockholders And Subscription Agreement, have the right to rely thereon or are third-party beneficiaries thereof.

“Straddle Period” is defined in Section 11.2.

“Study 8” means the Phase III Trial for the Product known as VER001-8.

“Study 9” means the Phase III Trial for the Product known as VER001-9.

“Tax” or “Taxes” means (a) any and all federal, state, local, or foreign income, gross receipts, license, payroll, employment, ,excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar including FICA), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum estimated or other tax of any kind or any charge of any kind in the nature of (or similar) to taxes whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, and any Liability for the payment of any amounts of the type described in clause (a) of this definition as result of being member of an affiliated, consolidated, combined or unitary group for any period as result of any tax sharing or tax allocation agreement, arrangement or understanding, or as result of being liable for another Person’s taxes as transferee or successor by contract or otherwise.

“Tax Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto and including any amendment thereof.

“Termination Date” is defined in Section 9.1.

“Third Party Claim” is defined in Section 10.4.1.

“Third Party Confidential Information” is defined in Section 6.10.3.

-11-

“Threshold Amount” is defined in Section 10.1.2(a).

“Total Project Cost” means the good faith estimate of the Buyer’s Board of Directors of the total cost (including the Upfront Consideration) required to secure Marketing Approval from the FDA in the U.S for the Product in cSSSI in adults, taking into account all information available to the Buyer, including (i) the FDA Response, (ii) Buyer’s correspondence and filings with the FDA after the Closing Date, (iii) any correspondence and filings with the FDA included in the Seller Documentation furnished to the Buyer pursuant to Section 6.3 of this Agreement, and (iv) any correspondence and filings with the FDA furnished to Buyer pursuant to the Transition Services Agreement.

“Transition Services Agreement” means the transition services agreement to be executed on or before the Closing Date between the Buyer and the Seller relating to (a) the transfer of certain Seller Documentation and other records, technology and materials relating to the Included Assets, and (b) certain consulting services, the form of which is attached hereto as Exhibit 1(j).

“Treasury Regulations” means the regulations promulgated under the Code.

“Type A Meeting” means meeting between study sponsor and the FDA to discuss an otherwise stalled product development program, as described in the FDA Guidance for Industry, “Formal Meetings Between the FDA and Sponsors or Applicants” (Revision 1, May 2009).

“Upfront Consideration” is defined in Section 2.2.

“Vicuron Pharmaceuticals Italy” means Vicuron Pharmaceuticals Italy, Srl.

Except as otherwise explicitly specified in this Agreement to the contrary, (a) references to Section Article Exhibit or Schedule means Section or Article of or Schedule or Exhibit to, this Agreement, unless another agreement is specified, (b) the word including shall be construed as “including without limitation,” (c) references to a particular statute or regulation shall be construed to include all rules and regulations thereunder and any predecessor or successor statute, rules or regulation, in each case as amended or otherwise modified from time to time, (d) words in the singular or plural form shall include the plural and singular form, respectively, and (e) references to particular Person shall include such Persons successors and assigns to the extent not prohibited by this Agreement.

2. PURCHASE AND SALE OF SHARES.

2.1. Purchase and Sale of Shares. At the Closing, subject to the terms and conditions of this Agreement, the Seller shall sell transfer and deliver to the Buyer, and the Buyer shall purchase from the Seller, the Shares, including all of the Sellers right, title and interest in and to all of the Shares.

2.2. Purchase Price. The aggregate consideration for the Shares shall be (a) Nine Million Seven Hundred Fifty Thousand Dollars ($9,750,000) paid to the Seller by the Buyer (the “Upfront Consideration”), plus subject to and in accordance with the terms of this Agreement (including Section 2.5.2), the Seller’s contingent right to receive final payment of Twenty Five Million Dollars ($25,000,000) (the “Milestone Payment”) from the Buyer, as more particularly set forth in Section 2.5 (collectively, the “Purchase Price”).

-12-

2.3. The Closing. The purchase and sale of the Shares (the “Closing”) shall take place at the offices of Ropes Gray LLP at 1211 Avenue of the Americas, New York, New York or at such other place as the Buyer and Seller may mutually agree in writing on the Closing Date. If on or prior to December 18, 2009 the conditions set forth in Sections 7 and 8 and have not been satisfied or waived in writing by the Buyer or the Seller, as applicable, subject to any rights of termination as set forth in Section 9, the Closing shall take place on such other date, not later than the fifth Business Day following the satisfaction of such conditions, as the Buyer and the Seller may mutually agree in writing. Except as otherwise provided in Section 9, the failure to consummate the purchase and sale of the Shares provided for in this Agreement on the date and time and at the place specified herein shall not relieve any party to this Agreement of any obligations under this Agreement.

2.4. Closing Deliveries. The parties hereto shall take the actions set forth in this Section 2.4 at the Closing, in each case, subject to satisfaction or written waiver of the conditions set forth in Sections 7 and 8.

2.4.1. The Buyer shall deliver to the Seller the Upfront Consideration (by wire transfer of immediately available federal funds to the account furnished to the Buyer by the Seller) against delivery to the Buyer of certificates evidencing the Shares duly endorsed (or accompanied by duly executed stock transfer powers). The Seller shall furnish its account information to the Buyer in writing not fewer than [**] Business Days prior to the scheduled Closing Date.

2.4.2. The parties hereto will execute and deliver the Ancillary Agreements.

2.4.3. The Buyer shall pay to Pfizer Overseas LLC the “Purchase Price” under the Inventory Transfer Agreement, as such term is defined in the Inventory Transfer Agreement.

2.5. Milestone Payment.

2.5.1. Subject to Section 2.5.2, within [**] Business Days after the occurrence of the First Commercial Sale of the Product (the “First Commercial Sale Date”), Buyer shall pay to Seller (by wire transfer of immediately available federal funds to the account furnished by the Seller), without demand or offset, the Milestone Payment; provided, however, that the Buyer may, in its sole discretion, elect to defer payment of all or portion of the Milestone Payment for period of up to five years from the First Commercial Sale Date upon written notice thereof to the Seller and the execution and delivery to the Seller, within such [**] Business Day period, of promissory note in favor of the Seller in the form attached hereto as Exhibit 2.5.1 in the principal amount of the Milestone Payment being so deferred (the “Promissory Note”).

2.5.2. The Buyer shall have the option, in the Buyer’s sole discretion, exercisable at any time by the Buyer commencing on the Closing Date and expiring on the earlier of (i) [**] days prior to the date on which [**] for the Product, and (ii) [**] months

-13-

following the [**] for the Product (the “Buyout Period”) to make one-time payment to the Seller in the amount of $20,000,000 in cash in lieu of, and in full satisfaction of, its obligation to pay the Milestone Payment (the “Milestone Buyout”). In any case, Buyer shall, promptly after becoming aware thereof, notify Seller in writing of the date that the events described in clauses (i) and (ii) of this Section 2.5.2 occur. Upon exercise of the Milestone Buyout, in the Buyer’s sole election in accordance with the provisions of this Section 2.5.2, and payment in full in cash of the Milestone Buyout to the Seller, the Buyer’s obligations to make the Milestone Payment under Section 2.5.1 shall automatically terminate and shall no longer be deemed due or payable by the Buyer.

2.5.3. Subject to Section 12.2, if, after the Closing, and if any portion of the Purchase Price remains unpaid, and the Buyer or any of its permitted successors or assigns (a) effects Change of Control, or (b) sells, exclusively licenses, or otherwise transfers, or causes the Company to sell, exclusively license or otherwise transfer, all or substantially all of its or the Company’s rights, title and interest in and to the Product (a “Product Transfer”), such transaction shall be made only with Qualified Successor, except that such transaction may be made with Person that is not Qualified Successor with the Seller’s prior written consent; provided, however, that if the Buyer or any of its permitted successors or assigns requests and receives such consent from the Seller, the per annum interest rate on the Promissory Note shall automatically increase to fourteen percent (14%). If permitted Change of Control or other permitted Product Transfer occurs pursuant to the foregoing sentence, the permitted acquirer or successor shall unconditionally assume all of the Buyer’s obligations under this Agreement, including the obligations set forth in Section 2.5, Section 6.8, and Section 6.9. As used in this Section, a “Qualified Successor” means Person having:

(a) market capitalization in excess of $[**] (or in the case of privately held company, valuation of its total outstanding equity securities based on its most recently completed arms-length equity financing or an independent valuation of its equity pursuant to Rule 409A under the Internal Revenue Code, in excess of $[**]; and

(b) a tangible net worth in excess of $[**]; and

2.6. FDA Confirmatory Milestone.

2.6.1. Subject to the terms of Section 2.6.5, the Seller shall promptly, and in no event later than [**] days, after the date on which the Buyer provides the Seller with the FDACM Notice (as defined below), make one-time payment to the Buyer in the amount of Six Million Dollars ($6,000,000) (the “Seller Payment”), without demand or offset, if, between the Closing Date and the date that is [**] days after the Closing Date (as such period may be extended pursuant to Section 2.6.3, the “FDA Milestone Period”), following Type Meeting to discuss Special Protocol Assessment or any other Formal FDA Meeting, the Buyer provides written notice to the Seller (the “FDACM Notice”) certifying that (i) the Buyer did not receive an FDA Response that meets the FDA Confirmatory Milestone, and (ii) the Buyer has reasonably and in good faith determined that, as direct result of the FDA Response failing to meet the FDA Confirmatory Milestone, the Total Project Cost will exceed:

(a) the total project expenses set forth in the Budget, and, as result, the Buyer has determined, in its sole discretion, that it would no longer be Commercially Reasonable to continue the Buyer’s efforts to seek to develop and commercialize the Product and the Buyer’s Board of Directors has resolved to terminate the business operations relating to the Product and to liquidate or otherwise wind down the business and operations of the Buyer; provided, however, that the Seller Payment shall not be payable by the Seller in the event such liquidation or winding down is effected by means of disposition of any of Buyer’s business, assets (including the Product) or Company shares in transaction that is not Bona Fide Transaction; or

-14-

(b) $[**].

2.6.2. (a) Subject to Section 12.11.2(d), any past due amount of the Seller Payment payable by the Seller to the Buyer under Section 2.6.1, and (b) any past due amount of the Milestone Payment not evidenced by the Promissory Note executed and delivered by Buyer pursuant to Section 2.5.1, shall, in each such case, bear interest (compounded annually) at per annum rate of [**]% (calculated on the basis of 360-day year) from and after the date such Seller Payment or Milestone Payment, as the case may be, was due until such amount is paid in full.

2.6.3. Notwithstanding anything in Section 2.6.1, or elsewhere in this Agreement, to the contrary, the FDA Milestone Period may be extended by the Buyer as set forth in Section 2.6.4, in the Buyer’s sole discretion, upon written notice to the Seller if one or both of the following occurs:

(a) the Buyer has taken all Commercially Reasonable actions to receive an FDA Response during the FDA Milestone Period, but Buyer has not received the FDA Response within the FDA Milestone Period through no delay or other fault of Buyer, and/or

(b) the Seller breaches its obligations under Section 1 of the Transition Services Agreement and such breach causes the Buyer to not receive an FDA Response within the FDA Milestone Period.

2.6.4. In the event of one or more delays described in Section 2.6.3, the term “FDA Milestone Period” shall thereafter mean the period between (1) the Closing Date and (2) the date that occurs the following number of days after the Closing Date:

(a) For delay described in Section 2.6.3(a), 270 days plus the total number of days between (and including) the following two dates:

(i) the date that is 270 days after the Closing Date, and

(ii) the earlier of (x) 14 days after the date that the Buyer has received the FDA Response, and (y) the date that is 365 days after the Closing Date.

-15-

(b) For delay described in Section 2.6.3(b), 270 days plus the total number of days between (and including) the following two dates:

(i) the date on which Seller breaches an obligation under Section 1 of the Transition Services Agreement that causes the Buyer to not receive an FDA Response within the FDA Milestone Period, and

(ii) the date on which such breach is cured in accordance with the Transition Services Agreement.

(c) For delays under both Section 2.6.3(a) and Section 2.6.3(b), 270 days plus the greater of the number of days that would be added to the FDA Milestone Period under Section 2.6.4(a) or Section 2.6.4(b).

2.6.5. In the event the Seller elects to contest the Buyer’s FDACM Notice certification described in Section 2.6.1(ii)(b), the Seller shall so notify the Buyer in writing within [**] days after Seller’s receipt of the FDACM Notice specifying in reasonable detail the basis for Seller’s contest (“Sellers Dispute Notice”), whereupon the dispute shall be resolved pursuant to and in accordance with the dispute resolution procedures set forth in Section 12.11.

3. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY BY THE SELLER.

Except as set forth in the disclosure schedule (with specific reference to the particular Section or subsection of this Agreement to which the information set forth in such disclosure schedule relates; provided, however, that any information set forth in one Section of the disclosure schedule shall be deemed to apply to each other Section or subsection of the disclosure schedule and of this Section 3 to which its relevance is readily apparent on its face) delivered on or prior to the Execution Date and attached hereto as Schedule 3 (the “Disclosure Schedule”), the Seller represents and warrants to the Buyer as follows; provided, however, notwithstanding anything in this Agreement or any Ancillary Agreement to the contrary, the Seller makes no representation or warranty of any nature whatsoever with respect to the Residual Assets, express or implied, directly or indirectly, other than the representations and warranties of the Seller set forth in Section 3.21, and any representations and warranties of the Seller in this Section 3 with respect to the Company or its business, assets, products, properties, conditions, prospects, operations, activities, obligations or liabilities shall not in any way cover, refer to or be affected by the Residual Assets:

3.1. Organization, Qualification; Subsidiaries. The Company is (a) duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full corporate power and authority to conduct its business as now being conducted, to own and use the properties, assets and products (including the Product) that it purports to own or use and to perform all of its obligations under this Agreement, the Ancillary Agreements and the Company Contracts; and (b) is duly qualified to do business as foreign corporation and in good standing in each jurisdiction where such qualification is required to own or use its property and products (including the Product) or otherwise conduct its business, except where the failure to so qualify has not had, and is not reasonably likely to have, Material Adverse

-16-

Effect on the Company. The Company has delivered to the Buyer true, correct and complete copies of the Company’s Organizational Documents. The Company’s Organizational Documents so made available are in full force and, effect and since being made so available to Buyer, have not been amended or modified. As of the Closing Date, the Company shall have no direct or indirect subsidiaries.

3.2. Capital Structure. The entire authorized capital stock of the Company consists of 1,000 Shares of common stock, par value $0.01 per share, of which 1,000 Shares are issued and outstanding and no Shares are held in treasury. All of the issued and outstanding Shares have been duly authorized and are validly issued, fully paid, and nonassessable, and are owned beneficially and of record by the Seller, free and clear of any Encumbrance, and were not issued in violation of any preemptive rights or similar rights of any stockholder or in violation of any Contractual Obligation, Securities Act requirement, or any Legal Requirement. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other Contractual Obligations or commitments that could require the Company to issue, sell or otherwise cause to become outstanding any of its capital stock or other securities of the Company. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to the Company. There are no voting trusts, proxies or other agreements or understandings with respect to the voting of the capital stock of the Company. The Company is not party to any Contractual Obligation to acquire any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business.

3.3. Power and Authorization. The consummation of the Contemplated Transactions is within the power and authority of the Company.

3.4. Noncontravention. The consummation of the Contemplated Transactions will not directly or indirectly (with or without notice or lapse of time) (a) contravene, conflict with or violate or give any Governmental Authority, Regulatory Authority or other Person the legal right to challenge the Contemplated Transactions or to exercise any remedy or obtain any relief under, any provision of any Contractual Obligation, Company Contract, Legal Requirement or Government Order applicable to the Company or any of the assets or products (including the Product) owned or used by the Company, (b) contravene, conflict with or result in breach or violation of, or default under or give any Person the right to declare default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Company Contract, (c) require any action by (including any authorization, consent or approval) or in respect of (including notice to), any Person under any Company Contract, (d) result in the creation or imposition of an Encumbrance upon, or the forfeiture of, any asset of the Company, (e) contravene, conflict with, or result in breach or violation of, or default under, the Company’s Organizational Documents or any resolution adopted by the board of directors, committee of the board of directors or stockholders of the Company, except, in the cases of clauses (a) through (d) above, as would not, either individually or in the aggregate, be reasonably likely to have Material Adverse Effect on the Company. Except as set forth in Section 3.4 of the Disclosure Schedule, the Seller is not and the Company is not, and will not be required to give any notice to, or obtain any Consent from any Governmental Authority or other Person in connection with the consummation or performance of any of the Contemplated Transactions or any Contractual Obligations.

-17-

3.5. Litigation.

3.5.1. There is no Action pending or, to the Seller’s Knowledge, threatened against or affecting the Company, or, to the Seller’s Knowledge, investigation by any Governmental Authority or Regulatory Authority involving, the Company or that otherwise relates to, or may affect the business of, or any of the assets or products (including the Product) owned or used by, the Company; or that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, consummation of or performance under any of the Contemplated Transactions or any of the Contractual Obligations. The Actions listed in Section 3.5 of the Disclosure Schedule shall not have Material Adverse Effect on the business, operations, assets, condition, or prospects of the Company.

3.5.2. There is no Government Order outstanding against the Company or to which the Company, or any of the assets or products (including the Product) owned or used by the Company, is subject. The Company is, and at all times since the Company Acquisition Date has been, in full compliance with all of the terms and requirements of each Government Order to which it, or any of the assets or products (including the Product) owned or used by it, is or has been subject. The Seller has no Knowledge that any event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) violation of, or failure to comply with, any term or requirement of any Government Order to which the Company, or any of the assets or products (including the Product) owned or used by the Company, is subject. The Company has, to the Seller’s Knowledge, not received at any time since the Company Acquisition Date any notice or other written communication from any Governmental Authority, Regulatory Authority or any other Person regarding any actual or alleged violation of, or failure to comply with, any term or requirement of any Government Order to which the Company, or any of the assets or products (including the Product) owned or used by the Company, is or has been subject, except, in the cases of the second sentence in this Section 3.5.2 above, for any actual or alleged non-compliance or violation that would not, either individually or in the aggregate, be reasonably likely to have Material Adverse Effect on the Company.

3.6. Intellectual Property.

3.6.1. Company Patents. Section 3.6.1 of the Disclosure Schedule lists all of the Patents owned solely by the Company or which the Company has any ownership rights, and/or has exclusively licensed, as of the Execution Date (excluding any Patents pertaining solely to the Excluded Assets), setting forth in each case the jurisdictions in which the Patents have been issued, and patent applications have been filed and identifying which Patents are owned by the Company (“Owned Patents”) and which are licensed to the Company, (“Licensed Patents”) (collectively, the “Company Patents”). The Company is the sole owner of all right, title and interest in and to the Owned Patents, free and clear of any Contractual Obligation, mortgage, pledge, claim, security interest, covenant, easement, encumbrance, lien, lease, sublease, option or charge of any kind, limitations on transfer or any subordination arrangement in favor of third party. The Company has the right to use the Licensed Patents in accordance with the terms of the applicable license and such license is in full force and effect and unmodified from the versions, if any, last provided to the Buyer prior to the Execution Date, and the Company is not in breach or default thereunder, except as would not, either individually or in the aggregate, have Material Adverse Effect on the Company.

-18-

3.6.2. Company Trademarks. Section 3.6.2 of the Disclosure Schedule lists all of the trademarks that have been registered, and trademark applications that have been filed, and registered trademark rights (or trademark rights for which applications for registration have been filed) owned solely by the Company as of the Execution Date (excluding any trademarks, trademark applications and other trademark rights pertaining solely to the Excluded Assets), setting forth in each case the owner thereof and the jurisdictions in which each of such trademarks have been registered and trademark applications have been filed (collectively, the “Company Trademarks”). The Company owns or has adequate rights to use the Company Trademarks.

3.6.3. Enforceability. Except as set forth in Section 3.6.3 of the Disclosure Schedule, since the Company Acquisition Date, to the Seller’s Knowledge, neither the Seller nor the Company has entered into any Contractual Obligations with any Person not to assert any charge of infringement of the Company Patents or Company Trademarks against such Person.

3.6.4. No Infringement; No Challenge. Except as set forth in Section 3.6.4 of the Disclosure Schedule, since the Company Acquisition Date, to the Seller’s Knowledge, neither the Seller nor the Company has received written notice or any written “offer to license” from any Person claiming an ownership interest in the Company Patents or the Company Trademarks, nor has the Seller or the Company received any written notice asserting that the Seller or the Company infringes or misappropriates any intellectual property of any Person or constitutes unfair competition or trade practices under any Contractual Obligation or the applicable Legal Requirements of any jurisdiction Except as provided in Section 3.6.4 of the Disclosure Schedule, there is no pending or, to the Seller’s Knowledge, threatened claims (including interferences, oppositions and similar Actions) challenging the validity of the Company Patents. Except as set forth in Section 3.6.4 of the Disclosure Schedule, no Person has contested or asserted in writing to the Company that the Company Patents are not valid or enforceable.

3.6.5. No Infringement by Third Parties. To the Seller’s Knowledge, no Person is infringing or misappropriating the Company Patents or the Company Trademarks.

3.7. Regulatory Compliance. Except as set forth in Section 3.7 of the Disclosure Schedule:

3.7.1. FDCA. The Company is, and has been since the Company Acquisition Date, in compliance in all material respects with the applicable provisions of the Federal Food and Drug and Cosmetic Act (“FDCA”), as amended, and the applicable rules, regulations, and requirements adopted by the FDA thereunder, including those relating to establishment registration, registration of clinical trials, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, labeling, and recordkeeping and filing of reports. To the Seller’s Knowledge, there are no pending, completed, or threatened actions against the Company relating to any of the foregoing (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation), except for regular inspections in the Ordinary Course of Business. The Company has conducted all clinical trials that took place after

-19-

the Company Acquisition Date substantially in accordance with good clinical practices and all applicable Legal Requirements, Governmental Orders, Regulatory Authorities and the stated protocols for such clinical trials and all Contractual Obligations, except as would not, either individually or in the aggregate, have Material Adverse Effect on the Company. The Company is in compliance with all applicable adverse event reporting requirements pertaining to the clinical trials that took place after the Company Acquisition Date in the United States and outside of the United States under applicable Legal Requirements, Governmental Orders, Governmental Authority, Regulatory Authorities and with all applicable Contractual Obligations, except as would not, either individually or in the aggregate, have Material Adverse Effect on the Company. The Company is not debarred under the Generic Drug Enforcement Act of 1992 or otherwise excluded from, or restricted in any manner from, participation in any government program related to pharmaceutical products and, to the Seller’s Knowledge, does not employ or use the services of any individual who is debarred or otherwise excluded or restricted.

3.7.2. Regulatory Filings. The Company has made available to the Buyer (A) true and correct copies of U.S. new drug application number [**] and the U.S. investigational new drug application number [**], in each case, with respect to the Product, and has provided the Buyer with all material data and records associated with such applications, (B) true and correct copies of the application number [**] for community marketing authorization for the Product in Europe dated [**], and (C) all material correspondence to and from the FDA and other Governmental Authorities pertaining to the Product.

3.7.3. Notices. Neither the Company nor any Subsidiary has received any notice or other communication, whether written or non-written, from the FDA or any other Regulatory Authority, which: (i) enjoins production at any facility of the Company or any of its Subsidiaries; (ii) imposes clinical hold on any clinical investigation by the Company or any of its Subsidiaries; (iii) enters or proposes to enter into U.S consent decree of permanent injunction with the Company or any of its Subsidiaries; or (iv) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have Material Adverse Effect on the Company.

3.7.4. Violations; Costs. To the Seller’s Knowledge, the Company has not received, at any time since the Company Acquisition Date, any written notice or other communications (other than notices or communications concerning routine or periodic inspections or reviews) from any Governmental Authority, Regulatory Authority or any other Person regarding (i) any actual or alleged, violation of, or failure to comply with, any Legal Requirement, or (ii) any actual or alleged obligation on the part of the Company to undertake, or to bear all or any portion of the costs of, any remedial action with respect to any such violation or failure.

3.8. Company Contracts.

3.8.1. Contractual Obligations of the Company.

(a) A true, correct and complete list of all material Contractual Obligations of the Company relating to the Included Assets and the Included Liabilities, including any amendments thereto (the “Company Contracts”), is set forth in

-20-

Section 3.8.1 of the Disclosure Schedule. The Seller has delivered or made available to the Buyer, a true, correct and complete copy of each such Company Contract that exists as of the Execution Date.

(b) Each Company Contract is legally binding arrangement of the Company and is in full force and effect. Except as would not, either individually or in the aggregate, be reasonably likely to have Material Adverse Effect on the Company, or as otherwise set forth in Section 3.8.1 of the Disclosure Schedule, the Company is not in breach or default under any Company Contract. To the Seller’s Knowledge, except as would not, either individually or in the aggregate, be reasonably likely to have Material Adverse Effect on the Company, or as otherwise set forth in Section 3.8 of the Disclosure Schedule, no other party to Company Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default thereunder. To the Seller’s Knowledge, since the Company Acquisition Date, the Company has not received any written notice (a) that it has breached or defaulted under any Company Contract, or (b) of the intention of any party to any Company Contract to terminate such Company Contract, nor to the Seller’s Knowledge, has the Company received oral notice of such breach, default or intent to terminate. Effective upon the Closing, except as set forth in Section 3.8.1 of the Disclosure Schedule, neither the Company nor the Buyer shall be party to, or be bound by, any Contractual Obligation relating to, or constituting, the Excluded Assets or the Excluded Liabilities. With the sole exception of the RaQualia Agreement the Company has not entered into any agreement granting to one or more Third Parties license to develop or commercialize the Product.

3.8.2. Other Contractual Obligations. No contracts relevant to the Product, or any aspect thereof, exist by and between the Company and any other counter-party, or the Seller and any counter-party, except as set forth in Section 3.8.2 of the Disclosure Schedule.

3.9. Employees and Consultants. As of the Execution Date, the Company has no employees (including part-time employees and temporary employees), leased employees, independent contractors or consultants. The Company is not party to, or bound by, any currently effective employment contract, deferred compensation arrangement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employee or director compensation plan or agreement or collective bargaining or other labor Contractual Obligations. No retired employee or director of the Company, or their dependents, is receiving benefits from the Company or scheduled to, or otherwise eligible to, receive such benefits in the future. Except as would not reasonably be expected, individually or in the aggregate, to have Material Adverse Effect on the Company, since the Company Acquisition Date, the Company has complied in all respects with all Legal Requirements relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closings. The Company is not liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements.

-21-

3.10. Real Property. As of the Execution Date, the Company does not own any real property or have any leasehold or other interest in real property (including any occupancy obligations), and is not bound by any lease for real property or occupancy obligation, and does not have any financial obligations to any Person with respect thereto, including the Seller.

3.11. Environmental Matters. Notwithstanding anything else in this Agreement to the contrary, this Section 3.11 shall constitute the sole representations and warranties with respect to environmental matters.

3.11.1. Except as set forth in Section 3.11.1 of the Disclosure Schedule, the Company is not in violation of, and has not been notified in writing by any Governmental Authority or Regulatory Authority at any time since the Company Acquisition Date that it is in violation of, any Environmental Law. Except as set forth in Section 3.11.1 of the Disclosure Schedule, since the Company Acquisition Date, there has been no generation, use, handling, storage or disposal of any Hazardous Materials by the Company in violation of any Environmental Law at any property currently owned or operated by, or premises leased or occupied by, the Company during the period of the Company’s ownership, operation, lease or occupancy which created any requirement pursuant to Environmental Law for the Company to remediate such property.

3.11.2. No property currently or formerly owned or operated by, or premises currently or formerly leased or occupied by, the Company is listed, or proposed for listing, on the National Priorities List or the Comprehensive Environmental Response, Compensation, and Liability Information System, both as maintained under the Federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), or on any comparable state governmental lists. The Company has not received written notification of any potential responsibility or Liability of the Company pursuant to the provisions of (a) CERCLA or (b) any similar Federal, state, local, foreign or other Environmental Law.

3.12. No Brokers. The Company has no Liability of any kind to any broker, finder or agent with respect to the Contemplated Transactions.

3.13. Taxes.

3.13.1. All Tax Returns with respect to the Company and its branches and subsidiaries required to have been filed as of the Closing Date, have been filed, and all such Tax Returns are true, correct and complete. All material Taxes due and payable on or before the Closing Date with respect to the Company and its branches and subsidiaries have been timely paid in full.

3.13.2. The reserve for Taxes on the face of the most recent Company balance sheet (other than any notes thereto) is sufficient for all accrued and unpaid Taxes, whether or not disputed, of the Company as of the Closing Date, and except for the disposition of the Excluded Assets and Excluded Liabilities, and Ordinary Course of Business activities, the Company has not incurred or become subject to any Tax since the date of the most recent Company balance sheet that the Seller has provided to the Buyer.

-22-

3.13.3. Neither the Company, nor the Seller, has received any written claim or deficiency for any Tax asserted against the Company which has not been resolved and/or paid in full. Seller has no Knowledge of any pending, current or threatened Actions for the assessment or collection of Taxes with respect to the Company.

3.13.4. Seller has no Knowledge of any liens for Taxes against the Company’s assets or products including the Product other than liens that would constitute Permitted Encumbrance.

3.13.5. The Company has not waived any statute of limitations in respect of Taxes or entered into any agreement extending the period for assessment or collection of any Taxes and on the Closing Date the Company will not be party to any Tax allocation or sharing agreement. The Company is not liable for the Taxes of any other Person as transferee, by Contractual Obligation or otherwise, other than pursuant to Treasury Regulation § 1502-6 or any analogous or similar state, local, or foreign Legal Requirement for the Taxes of the consolidated group of which Seller is the parent.

3.13.6. The Company has complied in all material respects with all applicable Legal Requirements relating to the payment and withholding of Taxes from employees, shareholders and other Persons.

3.13.7. The Company has not been the “distributing corporation” or the “controlled corporation” (in each case, within the meaning of Section 355(a)(1) of the Code) with respect to transaction described in Section 355 of the Code (a) within the three (3)-year period ending as of the Execution Date, or (b) in distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the Contemplated Transactions.

3.13.8. Since the Company Acquisition Date the Company has not engaged in “reportable transaction,” as set forth in Treasury Regulation Section l.6011-4(b)(1).

3.13.9. Neither the Company nor the Seller have received any written claim from any Tax authority in any jurisdiction in which the Company does not file Tax Returns, that the Company is, or may be, subject to any Tax by that jurisdiction.

3.13.10. Since the Company Acquisition Date, the Company has not owned any interest in an entity that is characterized as partnership for U.S federal income tax purposes.

3.13.11. The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any period (or any portion thereof) ending after the Closing Date as result of any: (a) installment sale or other open transaction disposition made on or prior to the Closing Date; (b) prepaid amount received on or prior to the Closing Date; (c) written and legally binding agreement with Governmental Authority or Regulatory Authority relating to Taxes; (d) election under Section 108(i) of the Code; or (e) change in method of accounting in any taxable period ending on or before the Closing Date or as result of the Contemplated Transactions.

-23-

3.14. Insurance. Neither the Seller nor the Company maintain an insurance policy that applies exclusively to the Company.

3.15. Governmental Authorizations. Except as set forth in Section 15 of the Disclosure Schedule, (i) there are no Governmental Authorizations that are held by, or on behalf of the Company or that otherwise relate to the business of, or to any of the assets owned or used by, the Company, including the Product or the Included Assets, and (ii) there are no other Governmental Authorizations necessary to permit the Company to lawfully conduct and operate its business in the manner in which it currently conducts and operates such business, and to permit the Company to own and use its assets relating to the Product in the manner in which it currently owns and uses such assets. Section 3.15 of the Disclosure Schedule contains true, correct and complete list of all material Governmental Authorizations that are held by, or held on behalf of, the Company or that otherwise relate to the business of, or to any of the assets owned or used by the Company relating to the Product. Each Governmental Authorization listed or required to be listed in Section 3.15 of the Disclosure Schedule is valid and in full force and effect and is not subject to any outstanding late filing fees or penalties. Except as set forth in Section 3.15 of the Disclosure Schedule:

(a) Except as would not, either individually or in the aggregate, be reasonably likely to have Material Adverse Effect, to the Seller’s Knowledge, the Company, at all times since the Company Acquisition Date, has been, in compliance with all of the terms and requirements of each Governmental Authorization (including all authorizations from any Regulatory Authority) identified or required to be identified in Section 3.15 of the Disclosure Schedule; and

(b) the Company has not received at any time since the Company Acquisition Date, any written notice or other communication from any Governmental Authority (including all authorizations from any Regulatory Authority) or any other Person regarding (i) any actual or alleged violation of, or failure to comply with, any term or requirement of any Governmental Authorization (including all authorizations from any Regulatory Authority), or (ii) any actual or proposed revocation, withdrawal, suspension, cancellation, termination of, or modification to any Governmental Authorization (including all authorizations from any Regulatory Authority).

3.16. Books and Records. All of the post-Company Acquisition Date corporate books of account, corporate minute books, stock record books, and other corporate records of the Company, true, complete and correct copies of which have been made available to the Buyer, are the only post-Company Acquisition Date corporate books and records of the Company that exist as of the Execution Date. At the Closing, the Company shall cause true, correct and complete originals of all of the pre-Company Acquisition Date and post-Company Acquisition Date books and records to be in the actual, physical possession of the Buyer.

3.17. Asset and Liability Statement. No audited financial statements for the Company have been prepared by the Seller or the Company. The Seller has delivered to the Buyer true, correct and complete listing of all assets and liabilities of the Company dated as of the Execution Date, after giving effect to the disposition of the Excluded Assets and the

-24-

Excluded Liabilities (the “Asset and Liability Statement”). To Seller’s Knowledge, the Asset and Liability Statement lists all assets and liabilities of the Company of nature and type that would be required to be disclosed on the face of the Company’s balance sheet by GAAP, after giving effect to the disposition of the Excluded Assets and Excluded Liabilities.

3.18. No Undisclosed Liabilities. Except as set forth on Section 3.18 of the Disclosure Schedule, to the Seller’s Knowledge, the Company has no material liabilities, except for (a) liabilities reflected or reserved against in the Asset and Liability Statement, (b) liabilities constituting Included Liabilities, and (c) current liabilities not exceeding Ten Thousand Dollars ($10,000) in the aggregate incurred in the Ordinary Course of Business since the date of the Asset and Liability Statement.

3.19. Compliance with Legal Requirements. To the Seller’s Knowledge, the Company is not currently in violation of, and has not, since the Company Acquisition Date, been in violation of, any Legal Requirement, the violation of which would reasonably be expected, individually or in the aggregate, to have Material Adverse Effect on the Company.

3.20. Seller’s Knowledge. The individuals listed on Exhibit 1(i) attached hereto are employees of the Seller who have direct operating and legal responsibilities with respect to the Company or the Seller in the principle subject areas covered by the representations and warranties in Section 3 and 4 that are qualified by Seller’s Knowledge.

3.21. Residual Assets. To the Seller’s Knowledge, and except as would not reasonably be expected, either individually or in the aggregate, to have Material Adverse Effect on the Company, (i) the Company owns and has sole and exclusive, good and marketable title to all of the Residual Assets, and (ii) there are no liens, claims, or encumbrances of any kind on any of the Residual Assets. The Company has not, since the Company Acquisition Date, dosed any patients in any clinical trial with any drug candidates in the programs relating to the Residual Assets.

3.22. No Other Representations or Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS SECTION 3 AND SECTION 4, NONE OF THE COMPANY, THE SELLER OR ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY ON BEHALF OF THE COMPANY OR THE SELLER WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS SET FORTH IN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS SECTION 3 AND SECTION 4, THE SELLER AND THE COMPANY MAKE NO REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, REGARDING THE ASSETS, PROPERTIES, BUSINESS OR BUSINESS PROSPECTS OF THE COMPANY, INCLUDING ANY WARRANTY AS TO MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR NONINFRINGEMENT. THE BUYER HEREBY ACKNOWLEDGES AND AGREES THAT THE BUYER IS PURCHASING THE SHARES AND ACQUIRING THE COMPANY ON AN “AS-IS, WHERE-IS” BASIS, IN RELIANCE ON ONLY THOSE REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLER EXPRESSLY SET FORTH IN THIS SECTION 3 AND SECTION 4.

-25-

4. REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER BY THE SELLER.

The Seller hereby represents and warrants to the Buyer as follows; provided, however, notwithstanding anything in this Agreement or any Ancillary Agreement to the contrary, the Seller makes no representation or warranty of any nature whatsoever with respect to the Residual Assets, express or implied, directly or indirectly, other than the representations and warranties of the Seller set forth in Section 3.21, and any representations and warranties of the Seller in this Section 4 with respect to the Company or the Seller or their respective businesses, assets, products, properties, conditions, prospects, operations, activities, obligations or liabilities shall not in any way cover, refer to or be affected by the Residual Assets:

4.1. Organization. The Seller is (a) duly organized, validly existing and in good standing under the laws of the State of Delaware with full corporate power and authority to perform its obligations under this Agreement and the Ancillary Agreements, and (b) is duly qualified to do business as foreign corporation and in good standing in each jurisdiction where such qualification is required to own or use its property or otherwise conduct its business, except where the failure to so qualify has not had, and is not reasonably likely to have, Material Adverse Effect on the Seller.

4.2. Power and Authorization. The execution delivery and performance by the Seller of this Agreement and each Ancillary Agreement to which it is (or will be) a party and the consummation of the Contemplated Transactions are within the power and authority of the Seller. This Agreement and each Ancillary Agreement to which the Seller is (or will be) a party (a) has been (or, in the case of Ancillary Agreements to be entered into at or prior to the Closing, will be) duly authorized by all necessary action on the part of the Seller and duly executed and delivered by the Seller, and (b) is (or in the case of Ancillary Agreements to be entered into at or prior to the Closing, will be) a legal, valid and binding obligation of the Seller, Enforceable against the Seller in accordance with its terms. The Seller has the full corporate power and authority to own and use its assets and carry on its business as presently conducted.

4.3. Authorization of Governmental Authorities. Except as disclosed on Schedule 4.3, no action by (including any authorization consent or approval), or in respect of, or filing with, any Governmental Authority is required for, or in connection with, the valid and lawful (a) authorization, execution, delivery and performance by the Seller of this Agreement and each Ancillary Agreement to which it is (or will be) a party, or (b) the consummation of the Contemplated Transactions by the Seller, except any such action or filing with any Governmental Authority which if not obtained or made would not have Material Adverse Effect on the Seller or adversely affect the ability of the Seller to consummate the Contemplated Transactions.

4.4. Noncontravention. Except as disclosed on Schedule 4.4, neither the execution, delivery and performance by the Seller of this Agreement or any Ancillary Agreement to which the Seller is (or will be) a party, nor the consummation of the Contemplated Transactions will directly or indirectly (with or without notice or lapse of time) (a) contravene, conflict with, or violate or give any Governmental Authority, Regulatory Authority or other Person the right to challenge the Contemplated Transactions or to exercise any remedy or obtain

-26-

any relief under, any provision of any Legal Requirement or Government Order applicable to the Seller or any of the assets (including the Product) owned or used by the Seller, (b) contravene, conflict with or result in breach or violation of, or default under, or give any Person the right to declare default or exercise any remedy under, or to accelerate the maturity or performance of or to cancel, terminate or modify, any Contractual Obligation to which the Seller is party, (c) require any action by (including any authorization, consent or approval) or in respect of (including notice to), any Person under any Contractual Obligation to which the Seller is party, (d) result in the creation or imposition of an Encumbrance upon, or the forfeiture of, any asset of the Seller, or (e) contravene, conflict with, or result in breach or violation of, or default under, the Seller’s Organizational Documents or any resolution adopted by the board of directors, committee of the board of directors or stockholders of the Seller, except, in the cases of clauses (a) through (d) above, as would not, either individually or in the aggregate, be reasonably likely to have Material Adverse Effect on the Seller.

4.5. Shares. Immediately prior to the Execution Date, the Seller held of record and owned beneficially all of the Shares, and as of the Closing Date, the Seller will hold of record and beneficially all of the Shares, in both instances, free and clear of any restrictions on transfer (other than any restrictions under the Securities Act and state securities Legal Requirements), Taxes (except Taxes payable by the Seller on the disposition thereof), liens, options, warrants, purchase rights, contracts, commitments, equities, claims, Encumbrances and demands. The Seller is not party to any option, warrant, purchase right, or other Contractual Obligation that could require the Seller to sell, transfer or otherwise dispose of any capital stock of the Company (other than this Agreement and the Contemplated Transactions). No legend or other reference to any purported Encumbrance (other than standard Securities Act of 1933 restricted stock legend) appears upon any certificate representing equity securities of the Company.

4.6. No Brokers. Other than Liabilities which will be borne by the Seller, the Seller has no Liability of any kind to any broker, finder or agent with respect to the Contemplated Transactions, and the Seller agrees to satisfy in full all such Liabilities.

4.7. Indemnification. The Seller has full power (corporate and otherwise) to make representations by, on behalf of and with respect to the Company, and to indemnify the Buyer for any breaches of any representations, warranties or covenants by, on behalf of, and with respect to, the Company and the Seller.

4.8. Other Contractual Obligations. As of the Closing Date and after giving effect to the transactions contemplated by this Agreement, no contracts relevant to the development or commercialization of the Product, or any aspect thereof, exist by and between the Seller and any counter-party, except for those contracts that constitute Excluded Assets or that otherwise relate directly or indirectly to any Excluded Product (as defined in Exhibit 1(a)).

4.9. RaQualia Agreement. The Seller has delivered to the Buyer true, correct and complete copies of the RaQualia Agreement as amended through the Execution Date. The “Other RaQualia Agreements,” as defined in the RaQualia Agreement, are unrelated in all respects to the Company and the Included Assets.

-27-

4.10. [**].

4.11. Inventory. As of the Execution Date, subject to de minimis adjustments due to breakage or loss in the ordinary course, (a) the amount of Product contained in clinical drug product inventory lot number [**] located at the [**] facility is [**] vials and the stated expiration date for the Product in such lot is [**]; and (b) the amount of active pharmaceutical ingredient for the Product located in the Seller’s [**] facility (i) in inventory lot number [**] is [**] and the expiration date for such active pharmaceutical ingredient is [**], and (ii) in inventory lot number [**] is [**] and the stated expiration date for such active pharmaceutical ingredient is [**]. The Product and active pharmaceutical ingredient for the Product referenced in subsections (a) and (b) and of this Section 4.11 met the specifications set forth on Schedule 4.11 on the most recent date prior to the Execution Date that such material was tested; provided, however, nothing herein shall be construed to represent or warrant that the clinical drug inventory or active pharmaceutical ingredients referred to herein shall be in sufficient or suitable quality or condition for use by the Company or the Buyer after the Closing Date or that the stated expiration dates will remain valid after the Closing Date.

5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.

The Buyer hereby represents and warrants to the Seller that:

5.1. Organization. The Buyer is (a) duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full corporate power and authority to perform its obligations under this Agreement and the Ancillary Agreements, and (b) is duly qualified to do business as foreign corporation and in good standing in each jurisdiction where such qualification is required to own or use its property or otherwise conduct its business, except where the failure to so qualify has not had, and is not reasonably likely to have, a Material Adverse Effect on the Buyer.

5.2. Power and Authorization. The execution, delivery and performance by the Buyer of this Agreement and each Ancillary Agreement to which it is (or will be) a party and the consummation of the Contemplated Transactions are within the power and authority of the Buyer and have been duly authorized by all necessary action on the part of the Buyer. This Agreement and each Ancillary Agreement to which the Buyer is (or will be) a party (a) has been (or, in the case of Ancillary Agreements to be entered into at or prior to the Closing, or, in the case of the Promissory Note if entered into after the Closing, will be) duly executed and delivered by the Buyer, and (b) is (or in the case of Ancillary Agreements to be entered into at or prior to the Closing, or, in the case of the Promissory Note if entered into after the Closing, will be) a legal, valid and binding obligation of the Buyer, Enforceable against the Buyer in accordance with its terms. The Buyer has the full corporate power and authority necessary to own and use its assets and carry on its business as presently conducted.

5.3. Authorization of Governmental Authorities. Except as disclosed on Schedule 5.3, no action by (including any authorization, consent or approval), or in respect of, or filing with, any Governmental Authority is required for, or in connection with, the valid and lawful (a) authorization, execution, delivery and performance by the Buyer of this Agreement and each Ancillary Agreement to which it is (or will be) a party, or (b) the consummation of the

-28-

Contemplated Transactions by the Buyer, except any filing with any Governmental Authority which if not obtained would not have Material Adverse Effect on the Buyer or adversely affect the ability of the Buyer to consummate the Contemplated Transactions.

5.4. Noncontravention. Except as disclosed on Schedule 5.4, neither the delivery and performance by the Buyer of this Agreement or the execution, delivery and performance by the Buyer of any Ancillary Agreement to which it is (or will be) a party, nor the consummation of the Contemplated Transactions will directly or indirectly (with or without notice or lapse of time) (a) contravene, conflict with or violate or give any Governmental Authority or other Person the right to challenge the Contemplated Transactions or to exercise any remedy or obtain any relief under, any provision of any Legal Requirement or Government Order applicable to the Buyer or any of the assets owned or used by the Buyer, contravene, conflict with, or result in breach or violation of, or default under or give any Person the right to declare default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Contractual Obligation to which the Buyer is party, (c) require any action by (including any authorization, consent or approval) or in respect of (including notice to), any Person under any Contractual Obligation to which the Buyer is a party, (d) result in the creation or imposition of an Encumbrance upon, or the forfeiture of, any asset of the Buyer, (e) contravene, conflict with, or result in breach or violation of, or default under, the Buyer’s Organizational Documents or any resolution adopted by the board of directors, committee of the board of directors or stockholders of the Buyer, except, in the cases of clauses (a) through (d) through above as would not, either individually or in the aggregate, be reasonably likely to have Material Adverse Effect on the Buyer.

5.5. Investment Experience; Investigation; Reliance.

5.5.1. The Buyer has been advised and understands that the Shares have not been registered under the Securities Act, on the basis that no distribution or public offering of the Shares is to be effected, except in compliance with applicable securities Legal Requirements or pursuant to an exemption therefrom, and that the Seller is relying in part on the Buyer’s representations set forth in this Section 5.5.

5.5.2. The Buyer is purchasing the Shares for investment purposes, for its own account, not as nominee or agent and not with view to the distribution of any part thereof. The Buyer has no present intention of selling, granting any participation in, or otherwise distributing the Shares in manner contrary to the Securities Act or to any applicable state securities Legal Requirements.

5.5.3. The Buyer is an “accredited investor” within the meaning of Regulation D, Rule 501(a) of the Securities Act.

5.5.4. The Buyer is able to bear the economic risk of the full loss of the value of the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares.

5.5.5. In entering into this Agreement, purchasing the Shares and consummating the Contemplated Transactions, the Buyer is not relying upon any representations

-29-

or warranties made by the Seller or the Company or any of their Representatives or Affiliates other than the representations and warranties set forth in this Agreement, it being acknowledged and agreed by the Buyer that the representations and warranties of the Buyer set forth herein are fundamental to the Seller’s decision to enter into this Agreement, sell the Shares to the Buyer and to consummate the Contemplated Transactions.

5.6. No Brokers. The Buyer has no Liability of any kind to any broker, finder or agent with respect to the Contemplated Transactions for which the Seller could be liable.

5.7. Budget. On or immediately prior to the Closing, subject to and pursuant to the terms of the Stockholders And Subscription Agreement, a confidential copy of which has been delivered to Seller under separate cover for informational purposes only, the Buyer shall have sufficient funds available to it from the Buyer’s Original Affiliates to consummate the Closing and to perform its obligations under this Agreement. Attached hereto as Exhibit 5.7 is true and correct copy of an initial draft of the Budget; provided, however, Buyer expressly reserves the right to reallocate any amounts within the Budget or to change any amounts set forth therein in any manner and at any time at the Buyer’s sole election after the Execution Date without the consent of the Seller, and nothing in this Agreement or in the Budget shall in any way be construed to obligate the Buyer to expend all sums set forth in the Budget in the amounts or in the manner specified in the Budget; provided, further, however, that no reduction in the total project expenses set forth in the form of Budget attached hereto as Exhibit 5.7 made by the Buyer after the Execution Date shall be taken into account or given any effect for purposes of determining whether the Total Project Cost will exceed the total project expenses set forth in the Budget pursuant to Buyer’s certification under Section 2.6.1(a).

5.8. Corporate Status. The Buyer (i) shall be classified as corporation for U.S federal income tax purposes prior to and including the Closing Date, and (ii) has no current plan or intent (a) to change such classification (by election or otherwise), or (b) to liquidate, dissolve, or merge out of existence.

5.9. No Other Representations or Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS SECTION 5, NEITHER THE BUYER NOR ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY ON BEHALF OF THE BUYER.

6. COVENANTS.

6.1. Closing. Subject to the terms and conditions of this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take, or cause to be taken, as promptly as reasonably practicable, all actions and to do, or cause to be done, all things necessary, proper, or advisable in order to consummate and make effective the Contemplated Transactions (including satisfaction, but not waiver, of the Closing conditions set forth in Sections 7 and 8) as soon as reasonably practicable and in any event prior to December 30, 2009.

-30-

6.2. Conduct of Business.

6.2.1. Between the Execution Date and the Closing Date, the Seller shall, and shall cause the Company to:

(a) conduct the business of the Company only in the Ordinary Course of Business;

(b) other than as may be required in connection with the Company’s sale or disposition of the Excluded Assets to the Seller, its Affiliates or third parties, and the assumption of the Excluded Liabilities by the Seller, its Affiliates or third parties, preserve intact the Company’s assets (including the Product and Included Assets), and maintain in effect all Governmental Authorizations and authorizations of any Regulatory Authority;

(c) keep available the services of the current agents of the Company, and maintain the relations and goodwill with all material suppliers, and others having material business relationships with the Company relating to the Included Assets or Included Liabilities;

(d) confer with the Buyer concerning relevant operational matters of material nature (and all matters pertaining to the Company concerning any Governmental Authority, Regulatory Authority and the FDA shall be deemed material);

(e) otherwise report periodically to the Buyer concerning any material developments regarding the Product with any Governmental Authority, Regulatory Authority and the FDA and any material developments regarding the Product or the business operations and finances of the Company; and

(f) maintain all of the Company Contracts in full force and effect and unmodified from the versions last provided to the Buyer prior to the Execution Date (except for modifications described on Exhibit 6.2.1(f) or any modifications as may be approved in writing by the Buyer).

6.2.2. From the Execution Date until the Closing Date, the Seller shall cause the Company to not:

(a) engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business (other than as may be required in connection with the transfer, assignment, sale or disposition of the Excluded Assets to the Seller, its Affiliates or third parties, and the assumption of the Excluded Liabilities by the Seller, its Affiliates or third parties); provided, however, in no event shall any sale or other disposition or Encumbrance (or agreement to do so) with respect to the Included Assets occur;

(b) declare, set aside, or pay any dividend or make any distribution with respect to its capital stock or redeem, purchase or otherwise acquire any of its capital stock (other than dividend or distribution solely of the Excluded Assets and/or Excluded Liabilities to the Seller or proceeds received thereon);

-31-

(c) except as set forth herein, directly or indirectly, sell or otherwise transfer, offer, agree or commit (in writing or otherwise) to sell or otherwise transfer any of the Shares or any of the Included Assets or any interest in, or right relating to, any of the Shares or any of the Included Assets;

(d) permit or offer, agree or commit( in writing or otherwise) to permit any Shares or any Included Assets to become subject, directly or indirectly, to any Encumbrance;

(e) make, revoke or change any Tax election, change any Tax method of accounting or adopt any new Tax method of account, or, without prior written notification to the Buyer, file an amended Tax Return, claim any refund of Taxes or settle or compromise any Liability relating to Taxes;

(f) amend any of the Company’s Organizational Documents or effect or allow the Company to become party to any recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction other than partial redemption transaction;

(g) incur any capital expenditures or indebtedness or create any new subsidiaries (other than in connection with the creation of any new subsidiaries as may be required in connection with the sale or disposition of the Excluded Assets to the Seller, its Affiliates or third parties, and the assumption of Excluded Liabilities by the Seller, its Affiliates or third parties), or incur or increase any Included Liabilities other than to consummate the transactions contemplated by this Agreement and the Ancillary Agreements;

(h) enter into, modify, or amend in manner adverse to the Company, or terminate any Company Contract, or waive, release or assign any rights or claims thereunder, in each case, in manner adverse to the Company, other than any entry into, modification, amendment or termination of any such Company Contract in the Ordinary Course of Business and which is disclosed to the Buyer in writing; or

(i) enter into any transaction or take any other action that is reasonably likely to cause or constitute breach of any representation or warranty of the Seller in this Agreement.

6.3. Buyer’s Access to Premises. From the Execution Date until the Closing Date, subject to and in accordance with the Transition Services Agreement, the Seller and the Company shall, in each case, upon Buyer’s reasonable request, (a) permit the Buyer and its Representatives to have full and free access (at all reasonable times and upon reasonable notice) to the Seller’s personnel with knowledge of the Company, and to all books, records, financial, scientific and operating data, correspondence and filings with the FDA, and other information and other documents, in each case, pertaining to any of the Product, the Included Assets and the Included Liabilities (“Seller Documentation”), (b) furnish the Buyer and its Representatives with true and correct copies of such Seller Documentation, and (c) furnish the Buyer and its Representatives with such additional information respecting any of the Company, the Included Assets, and the Included Liabilities as the Buyer may reasonably request.

-32-

6.4. Notice of Developments. From the Execution Date until the Closing Date, the Company and the Seller shall give the Buyer prompt written notice (i) of any event, development or circumstance that, to the Seller’s Knowledge, affects (or may reasonably be expected to affect) the timing or likelihood of achieving the FDA Confirmatory Milestone or (ii) of any material event, development or circumstance that, to the Seller’s Knowledge, could reasonably be expected to result in breach of, or inaccuracy in, any of the Seller’s representations and warranties set forth in Sections 3 or 4; provided, however, that except as otherwise set forth in this Agreement, no such disclosure shall be deemed to prevent or cure any breach of, or inaccuracy in any representation or warranty set forth in this Agreement. The Seller shall be entitled to deliver to the Buyer supplement to the Disclosure Schedule that discloses to the Buyer in reasonable detail (and which specifically references specific representation or warranty) any facts and circumstances arising after the Execution Date that could constitute or result in breach of the representations and warranties set forth in Sections 3 or 4. The Buyer shall have the right to terminate this Agreement pursuant to Section 9.1(f) within ten (10) days after receipt of such supplemental Disclosure Schedule if the supplemented provisions of such Disclosure Schedule disclose any facts and circumstances that would be reasonably likely to have Material Adverse Effect on the Company or otherwise cause the conditions to the Closing in Section 7 (other than Sections 7.1, 7.2, and 7.4) not to be satisfied; provided, however, that if the Buyer does not exercise such right to terminate this Agreement within the aforesaid ten (10) day period after receipt of such supplemental Disclosure Schedule, or if the Buyer consummates the Closing, the Buyer shall, in each such case, be deemed to have accepted such supplemental Disclosure Schedule, and such supplemental Disclosure Schedule shall supersede and amend the original Disclosure Schedule, be treated for all purposes of this Agreement as the Disclosure Schedule and be deemed to cure any breach of the specific representation or warranty on the original Disclosure Schedule to the extent such specific representation or warranty was modified on the supplemental Disclosure Schedule.

6.5. Expenses. Except as expressly set forth in this Agreement, and subject to the Transition Services Agreement, each party hereto shall bear its own legal and other expenses in connection with any due diligence and the negotiation, drafting, execution and performance of this Agreement, the Ancillary Agreements and any other agreements and other actions required to consummate the Contemplated Transactions.

6.6. Exclusivity. From the Execution Date until the earlier of the Termination Date or the Closing neither the Seller nor the Company shall (and the Company and Seller shall not permit their respective Affiliates or any of their or their Affiliates’ Representatives to) directly or indirectly: (a) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to, or enter into or consummate any transaction relating to, the acquisition of any capital stock in the Company or any merger, recapitalization, share exchange, sale of substantial assets (including the Product) (other than partial redemption of shares, sales of inventory in the Ordinary Course of Business or sales or other dispositions of the Excluded Assets) or any similar transaction or alternative to the Contemplated Transactions, or (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do

-33-

or seek any of the foregoing. The parties hereto agree that irreparable damage would occur in the event that the provisions in the preceding sentence of this Section 6.6 were breached by the Company or the Seller. Accordingly, the parties hereto agree that the Buyer shall be entitled to seek an immediate injunction or injunctions to prevent breaches of the provision of this Section 6.6 and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, and that this remedy is in addition to any other remedy to which the Buyer may be entitled at law or in equity.

6.7. Notices and Consents.

6.7.1. The Company. As promptly as practicable after the Execution Date, the Seller shall cause the Company to give all notices to, make all filings with, and use its commercially reasonable efforts to obtain all Consents from any Governmental Authority or other Person as reasonably requested in writing by the Buyer.

6.7.2. Seller. The Seller shall give all notices to, make all filings with, and use its commercially reasonable efforts to obtain all Consents from, any Person as reasonably requested in writing by the Buyer.

6.7.3. Buyer. The Buyer shall give all notices to, make all filings with and use its commercially reasonable efforts to obtain all Consents from any Governmental Authority or other Person as reasonably requested in writing by the Seller.

6.8. FDA Confirmatory Milestone. After the Closing, and subject to the qualifications and limitations of the Budget, the Buyer shall, and shall cause its Affiliates and the Company to, use Commercially Reasonable efforts to seek to achieve the FDA Confirmatory Milestone.

6.9. Diligence. After the Closing, the Buyer shall, and shall cause the Company and the Affiliates and sublicensees of the Buyer and the Company to, use Commercially Reasonable efforts to develop the Product For the purpose of Section 6.8, Section 6.9, and Section 2.6, acting in “Commercially Reasonable” manner or using “Commercially Reasonable” efforts means using those efforts and resources generally consistent with the usual practice of financially viable biotechnology company in pursuing the development of its own pharmaceutical products that are of similar market potential as the Product, taking into account safety, tolerability, and efficacy of the Product and any developments in the marketplace for pharmaceutical or biologic drugs negatively impacting the likely outcome of further development of the Product. This Section 6.9 shall have no force or effect once the Milestone Payment or Milestone Buyout has been paid in full in accordance with Sections 2.5.1, and 2.5.2, as applicable.

6.10. Confidentiality.

6.10.1. Except as otherwise provided in this Section 6.10, each party hereto (in each case the “Receiving Party”) shall maintain in confidence and use only for purposes of this Agreement and the Ancillary Agreements, the terms and conditions of this Agreement and the Ancillary Agreements, any activities conducted in connection with, or pursuant to this Agreement or the Ancillary Agreements, and any information, in any form or

-34-

medium (whether nor not it is labeled or otherwise identified as confidential), disclosed to such Receiving Party by the other party or its Representatives or Affiliates (in each case, the “Disclosing Party”) in accordance with this Agreement or the Ancillary Agreements (collectively “Confidential Information.”) The Buyer agrees and acknowledges that the manuscript substantially in the form attached as Exhibit B to that certain Research License Agreement between the Seller and the Company dated as of November 30, 2009, does not constitute Confidential Information of the Company, the Seller or the Buyer, and the Buyer consents to the publication thereof.

6.10.2. The parties hereto acknowledge and agree that all information provided to the Buyer and its Affiliates and Representatives by the Seller and its Affiliates and Representatives is hereby subject to the terms of those certain confidentiality agreements made between the Seller and each of New Leaf Venture Partners L.L.C (dated November 19, 2008 as amended) Sofinnova Ventures Inc dated (November 19, 2008, as amended), Aisling Capital LLC (dated January 30, 2009, as amended), Domain Associates (dated February 2, 2009 as amended) and Canaan Partners (dated July 20, 2009) (collectively the “Confidentiality Agreements” and (a) prior to the Closing, such information shall be deemed the Confidential Information of the Seller and hence the Buyer shall be considered Receiving Party with respect thereto), and (b) after the Closing such information shall be deemed the Confidential Information of the Buyer and hence the Seller shall be considered Receiving Party with respect thereto), except to the extent such information comprises or relates to the Excluded Assets (in which case the Buyer shall be considered Receiving Party with respect thereto).

6.10.3. The Buyer agrees that after the Closing Date, the Buyer shall, and shall use commercially reasonable efforts to, cause its Representatives, Affiliates and the Company, to not disclose to any third parties and use only for the purposes of this Agreement and the Ancillary Agreements all Third Party Confidential Information that is disclosed, to the Buyer by the Seller. For purposes of this Agreement “Third Party Confidential Information” means all information in the possession of the Seller with respect to or concerning any third party which is not necessary for the development and commercialization of the Product and is not otherwise Company asset. Notwithstanding anything to the contrary herein, the foregoing provision shall not apply in the event the Buyer enters into separate agreement with an applicable third party, which such separate agreement governs the disclosure and use of such Third Party Confidential Information.

6.10.4. In the event the Receiving Party is requested or required (in any Action, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information of the Disclosing Party or Third Party Confidential Information (in the case of the Buyer), the Receiving Party shall promptly notify the Disclosing Party of the request or requirement so that the Disclosing Party may seek to obtain at its sole expense an appropriate protective order or waive compliance with the provisions of Section 6.10.1. If, in the absence of protective order or the receipt of waiver hereunder, the Receiving Party is, on the advice of counsel, compelled to disclose any Confidential Information of the Disclosing Party or Third Party Confidential Information (in the case of the Buyer) to any tribunal, such Party may disclose such information to the tribunal, provided, however, that such party shall use its reasonable efforts to obtain at the request of the Disclosing Party an order or other assurance that confidential treatment shall be accorded to such portion of Confidential Information or Third Party Confidential Information as applicable required to be disclosed as the Disclosing Party shall designate.

-35-

6.10.5. This Section 6.10 shall not apply to any information that (a) at the time of disclosure or thereafter is generally available to the public (other than as result of disclosure directly by the Receiving Party or its Affiliates or Representatives), (b) is or becomes available to the Receiving Party from third party source free of an obligation of confidentiality with respect to such information to the Disclosing Party, (c) is known by the Receiving Party, prior to its disclosure by the Disclosing Party, from third party source that is free of an obligation of confidentiality to the Disclosing Party with respect to such information, provided that such prior knowledge can be proven by the Receiving Party’s written records, except to the extent such information comprises or relates to the Excluded Assets, (d) is independently developed or acquired by the Receiving Party or its Affiliates or Representatives without access or reference to or use of the Confidential Information of the Disclosing Party. Further, the Seller may disclose Confidential Information to any Persons involved in an assignment or potential assignment of the Sellers rights to receive the Milestone Payment from Buyer (including such Person or Persons’ directors, partners, members, officers, lenders, investors and advisors), including (a) this Agreement (and all amendments hereto), and (b) correspondence related to, and notices given under, this Agreement; provided, however, that such Persons receiving such Confidential Information from the Seller shall have agreed in writing to keep confidential and not disclose such information to any third party.

6.11. Publicity. No public announcement or disclosure shall be made by any party hereto with respect to the subject matter of this Agreement or the Contemplated Transactions without the prior written consent of the Buyer and the Seller; provided, however, that the provisions of Section 6.10 and 6.11 shall not prohibit (a) any disclosure required by any applicable Legal Requirements (in which case the disclosing party shall provide the other parties with the opportunity to review in advance the disclosure) or (b) any disclosure made in connection with the enforcement of any right or remedy relating to this Agreement or the Contemplated Transactions. Notwithstanding anything herein to the contrary, the parties hereto agree that each party hereto may disclose to any and all Persons, without limitation of any kind, the Tax treatment and Tax structure (as such terms are used in Code Sections 6011 and 6112 and the regulations thereunder) of the Contemplated Transactions. The authorization set forth in the preceding sentence is not intended to permit disclosure of any other information including (i) any portion of any materials to the extent not related to the Tax treatment or Tax structure of the Contemplated Transactions, or (ii) any other term or detail not relevant to the Tax treatment or Tax structure of the Contemplated Transactions.

6.12. Further Assurances. From and after the Closing Date, each of the parties hereto shall do, execute, acknowledge and deliver all such further acts, assurances, deeds, assignments, transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the Contemplated Transactions. Without limiting the generality of the foregoing, from and after the Closing Date, the Buyer shall assign, transfer, and convey to the Seller without consideration, upon the Sellers written request, or upon the Buyer’s own initiative, any of the Company’s right, title and interest in and to any of the Excluded Assets and Excluded Liabilities The Seller shall not take any action that is designed or intended to have the effect of discouraging any lessor, licensor, supplier, distributor or customer of the Company

-36-

or other Person with whom the Company has relationship from maintaining the same relationship with the Company after the Closing as it maintained prior to the Closing. The Seller shall promptly refer all customer inquiries and other inquiries relating to the Company to the Buyer, or the Company, as appropriate, from and after the Closing.

6.13. Buyers Non-Transitory Corporation Covenant. The Buyer is classified as corporation for U.S. federal income tax purposes and shall continue to be classified as corporation for U.S. federal income tax purposes (a) at all times prior to and including the Closing Date and (b) at all times following the Closing Date until the date that is the earlier of (i) three (3) years following the Closing Date, or (ii) the date on which the Buyer’s Board of Directors resolves to terminate the business operations relating to the Product and to liquidate or otherwise wind down the business and operations of the Buyer, but not if such liquidation or winding down is effected by means of disposition of any of Buyer’s business, assets (including the Product) or Company shares in transaction that is not Bona Fide Transaction or (iii) the date that Buyer is merged into another entity treated as corporation for U.S. federal income tax purposes. In the case of merger described in (iii), above, such merger shall not take place unless the corporation into which Buyer is merged succeeds to the terms of this covenant as if it were the Buyer.

6.14. Listed Transactions. After Closing, neither Buyer or its stockholders or Affiliates nor Company shall take any action or cause any action to be taken that would cause the transactions contemplated in this Agreement to be part of, or substantially similar to, the listed transaction identified in Notice 2008-111, 2008-51 IRB 1299.

6.15. Payment of Indebtedness. The Seller shall pay or cause the Company to pay all indebtedness (including all liabilities and payables on the Asset and Liability Statement) of the Company immediately prior to the Closing

7. CONDITIONS TO THE BUYERS OBLIGATIONS AT THE CLOSING.

The obligations of the Buyer to consummate the Closing are subject to the fulfillment of each of the following conditions (unless waived by the Buyer in writing in accordance with Section 12.3):

7.1. Representations and Warranties. The representations and warranties of the Seller contained in this Agreement and in any Ancillary Agreement (a) that are not qualified by materiality or Material Adverse Effect shall be true, correct and complete in all material respects at and as of the Closing with the same force and effect as if made as of the Closing, and (b) that are qualified by materiality or Material Adverse Effect shall be true, correct and complete in all respects at and as of the Closing with the same force and effect as if made as of the Closing, in each case, other than representations and warranties that expressly speak only as of specific date or time, which shall be true, correct and complete (or true, correct and complete in all material respects, as the ease may be) as of such specified date or time.

7.2. Performance. The Company and the Seller shall have performed and complied in all material respects, with all agreements, obligations and covenants contained in this Agreement that are required to be performed or complied with by them at or prior to the Closing.

-37-

7.3. Stock Certificates. The Seller shall have delivered to the Buyer certificates, duly endorsed (or accompanied by duly executed stock transfer powers) evidencing all of the Shares.

7.4. Compliance Certificate. The Seller shall have delivered to the Buyer certificate substantially in the form of Exhibit 7.4.

7.5. Qualifications. No provision of any applicable Legal Requirement and no Government Order shall prohibit the consummation of any of the Contemplated Transactions.

7.6. Absence of Litigation. No Action shall be pending or threatened which may result in Government Order (nor shall there be any Government Order in effect) (a) which would prevent, significantly delay, make illegal or otherwise interfere with the consummation of any of the Contemplated Transactions, (b) which would result in any of the Contemplated Transactions being rescinded following consummation, or (c) which could limit or otherwise adversely affect the right of the Buyer to own the Shares (including the right to vote the Shares), to control the Company, or to operate all or any portion of either the business or assets of the Company, including the Product.

7.7. Ancillary Agreements. Each of the Ancillary Agreements to which the Buyer is party shall have been executed and delivered by the Seller. Without limiting the generality of the foregoing, Seller will have caused (i) Pfizer Overseas LLC to enter into the Inventory Transfer Agreement, and (ii) Pfizer Italia S.r.l to enter into the Reverse TSA Assignment Agreement.

7.8. Excluded Assets; Excluded Liabilities. The Company shall have assigned, sold, distributed or otherwise transferred the Excluded Assets to the Seller, its subsidiaries, its Affiliates or third parties, and the Seller shall have assumed or caused an Affiliate or third party to assume, as applicable, all of the Excluded Liabilities

8. CONDITIONS TO THE SELLER’S OBLIGATIONS AT THE CLOSING.

The obligations of the Seller to consummate the Closing are subject to the fulfillment of each of the following conditions (unless waived by the Seller in writing in accordance with Section 12.3):

8.1. Representations and Warranties. The representations and warranties of the Buyer contained in this Agreement and in any Ancillary Agreement (a) that are not qualified by materiality or Material Adverse Effect shall be true, correct and complete in all material respects at and as of the Closing with the same force and effect as if made as of the Closing and (b) that are qualified by materiality or Material Adverse Effect shall be true, correct and complete in all respects at and as of the Closing with the same force and effect as if made as of the Closing, in each case, other than representations and warranties that expressly speak only as of specific date or time, which shall be true, correct and complete (or true, correct and complete in all material respects, as the case may be) as of such specified date or time.

-38-

8.2. Performance. The Buyer shall have performed and complied with, in all material respects, all agreements, obligations and covenants contained in this Agreement that are required to be performed or complied with by the Buyer at or prior to the Closing.

8.3. Compliance Certificate. The Buyer shall have delivered to the Seller certificate in the form of Exhibit 8.3.

8.4. Qualifications. No provision of any applicable Legal Requirement and no Government Order shall prohibit the consummation of any of the Contemplated Transactions.

8.5. Absence of Litigation. No Action shall be pending or threatened which may result in Government Order, nor shall there be any Government Order in effect, (a) which would prevent consummation of any of the Contemplated Transactions, or (b) which would result in any of the Contemplated Transactions being rescinded following consummation.

8.6. Ancillary Agreements. Each of the Ancillary Agreements to which the Seller is party shall have been executed and delivered by the Buyer.

8.7. Excluded Assets. The Company shall have assigned sold distributed or otherwise transferred the Excluded Assets to the Seller, its Affiliates or third parties, and the Excluded Liabilities shall have been assumed by the Seller, its Affiliates or third parties.

9. TERMINATION.

9.1. Termination of Agreement. This Agreement maybe terminated (the date on which the Agreement is terminated, the “Termination Date”) at any time prior to the Closing

(a) by mutual written consent of the Buyer and the Seller;

(b) by either the Buyer or the Seller, so long as the Buyer or the Seller, respectively, is/are not then in breach of its/their obligations under this Agreement in any material respect, by providing written notice to the other at any time on or after December 30, 2009 (the “Final Termination Date”) in the event that the Closing has not occurred on or prior to the Final Termination Date;

(c) by either the Buyer or the Seller if final nonappealable Government Order permanently enjoining, restraining or otherwise prohibiting the Closing shall have been issued by Governmental Authority of competent jurisdiction;

(d) by the Buyer, so long as the Buyer is not then in breach of its obligations under this Agreement in any material respect, if either (i) there shall have been material breach of, or inaccuracy in, any representation or warranty of the Seller contained in this Agreement as of the Execution Date or as of any subsequent date (other than representations or warranties that expressly speak only as of specific date or time, with respect to which the Buyer’s right to terminate shall arise only in the event of breach of, or inaccuracy in, such representation or warranty as of such specified date or time) which breach or inaccuracy would give rise, or could reasonably be expected to give rise, to failure of condition set forth in Section 7 and which is not cured on or prior to the

-39-

earlier of (x) the [**] day following written notice of such breach, or (y) the Final Termination Date, or (ii) the Seller shall have breached or violated in any material respect any of its covenants and agreements contained in this Agreement, which breach or violation would give rise, or could reasonably be expected to give rise, to failure of any condition set forth in Section 7 and such breach or violation is not cured on or prior to the earlier of (A) the [**] day following written notice of such breach, or (B) the Final Termination Date;

(e) by the Seller, so long as the Seller is not then in breach of its obligations under this Agreement in any material respect, if either (i) there shall have been material breach of, or inaccuracy in, any representation or warranty of the Buyer contained in this Agreement as of the Execution Date or as of any subsequent date other than representations or warranties that expressly speak only as of specific date or time, with respect to which the Seller’s right to terminate shall arise only in the event of breach of, or inaccuracy in, such representation or warranty as of such specified date or time), which breach or inaccuracy would give rise, or could reasonably be expected to give rise, to failure of condition set forth in Section 8 and which is not cured on or prior to the earlier of (x) the [**] day following notice of such breach, or (y) the Final Termination Date, or (ii) by the Buyer shall have breached or violated in any material respect any of its covenants and agreements contained in this Agreement, which breach or violation would give rise, or could reasonably be expected to give rise, to failure of the condition set forth in Section 8 and such breach or violation is not cured on or prior to the earlier of (A) the [**] day following notice of such breach, or (B) the Final Termination Date; or

(f) by the Buyer pursuant to Section 6.4.

9.2. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 9.1, this Agreement, other than the provisions of this Section 9.2 and Sections 3.12 (No Brokers), 4.6 (No Brokers) and 5.6 (No Brokers), 6.5 (Expenses) 6.10 (Confidentiality), 6.11 (Publicity) and 12 (Miscellaneous), shall then be null and void and have no further force and effect and all other rights and Liabilities of the parties hereunder shall terminate without any Liability of any party to any other party, except for Liabilities arising in respect of breaches under this Agreement by any party on or prior to the Termination Date. Each party’s right of termination under Section 9.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of right of termination shall not be an election of remedies.

10. INDEMNIFICATION.

10.1. Indemnification by the Seller.

10.1.1. Indemnification. Subject to the limitations set forth in this Section 10, the Seller shall indemnify and hold harmless the Buyer and each of its Affiliates (including following the Closing, the Company), and the Representatives and Affiliates of each of the foregoing Persons (each, a “Buyer Indemnified Person”), from, against, and in respect of, any and all Actions, Liabilities, Government Orders, Encumbrances, losses, damages, bonds, dues, assessments, fines, penalties, Taxes, fees, costs (including costs of investigation, defense and

-40-

enforcement of this Agreement), expenses or amounts paid in settlement (in each case, including reasonable outside attorneys, and experts fees and expenses), whether or not involving Third Party Claim (collectively “Losses”), incurred or suffered by the Buyer Indemnified Persons or any of them to the extent, directly or indirectly, resulting from, arising out of, or relating to:

(a) any breach of, or inaccuracy in, any representation or warranty made by the Seller in Section 3 or Section 4 of this Agreement or Section 1.5 of the Transition Services Agreement

(b) any breach or violation of any covenant or agreement of the Seller (including, where applicable, any failure to cause the Company to comply with such covenant or agreement) in or pursuant to this Agreement or any Ancillary Agreement (other than any breach of Seller’s obligations under Section 3 of the Transition Services Agreement (i.e., Consulting Services));

(d) the Excluded Assets or the Excluded Liabilities (including, by definition, Liabilities arising out of any Environmental Laws and foreign equivalents thereof or Hazardous Materials (including those treated as such under foreign equivalents of Environmental Laws) relating to Vicuron Pharmaceuticals Italy, Biosearch Manufacturing, the Pisticci Plant or the Geranzano Research Center); or

(e) any claim, action or suit brought by RaQualia (or any successor or assignee thereof) that is based on the inaccuracy of information contained in the recital set forth in the first sentence of the first full paragraph of the RaQualia Agreement that begins with “WHEREAS.”

10.1.2. Monetary Limitations.

(a) The Seller shall have no obligation to indemnify the Buyer Indemnified Persons in respect of Losses arising from the breach of, or inaccuracy in, any representation or warranty pursuant to Section 10.1.1(a) or Losses arising from the breach of any covenant or agreement to be performed prior to Closing pursuant to Section 10.1.1(b) unless the aggregate amount of all such Losses incurred or suffered by the Buyer Indemnified Persons exceeds [**] Dollars ($[**]) (the “Threshold Amount”), in which case the Seller shall indemnify the Buyer Indemnified Persons or all such Losses, including the Threshold Amount, and not only to the extent such Losses exceed the Threshold Amount, and the Seller’s aggregate Liability in respect of Indemnification Claims arising from the breach of, or inaccuracy in, any representation or warranty pursuant to Section 10.1.1(a) and Indemnification Claims brought after the Closing arising from the breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 10.1.1(b) shall not exceed [**] Dollars ($[**]) (the “Indemnity Cap”).

(b) Notwithstanding anything to the contrary in Section 10.1.2(a), the monetary limitations in this Section 10.1.2 shall not apply to

-41-

Indemnification Claims pursuant to Sections 10.1.1(a) in respect of breaches of, or inaccuracies in, representations and warranties set forth in Sections 3.1 (Organization), 3.2 (Capital Structure), 3.3 (Power and Authorization), 3.4(e) (Noncontravention of Organizational Documents), 3.11 (Environmental Matters) 3.12 (No Brokers), 3.13 (Taxes) 4.2 (Power and Authorization) 4.4(e) (Noncontravention of Organizational Documents) and 4.6 (No Brokers) (said Sections 3.1, 3.2, 3.3, 3.4(e), 3.11, 3.12, 3.13, 4.2, 4.4(e) and 4.6 being hereinafter referred to collectively as the “Fundamental Representations and Warranties”).

(c) Notwithstanding anything to the contrary in Section 10.1.2(a) and Section 10.1.2(b) the Sellers aggregate Liability in respect of Indemnification Claims arising from the breach of or inaccuracy in the representations or warranties set forth in Section 3.5.1 (Litigation) and Section 3.8.1(a) (Contractual Obligations of the Company) pursuant to Section 10.1.1(a), together with the Seller’s aggregate Liability for Indemnification Claims brought after the Closing arising from the breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 10.1.1(b) and Indemnification Claims arising from the breach of, or inaccuracy in, any other representation or warranty pursuant to Section 10.1.1(a), other than in respect of the Fundamental Representations and Warranties shall not exceed [**] Dollars ($[**]) (the “Special Indemnity Cap”).

(d) Notwithstanding anything to the contrary in this Agreement, Indemnification Claims pursuant to Sections 10.1.1(c), 10.1.1(d) or 10.1.1(c), or for Losses arising from the breach of any covenant or agreement to be performed by Seller after the Closing pursuant to Section 10.1.1(b) other than any breach of Sellers obligations under Section 3 of the Transition Services Agreement (i.e., Consulting Services) are not subject to any of the monetary limitations in this Section 10.1.2, including the Threshold Amount, the Indemnity Cap and the Special Indemnity Cap.

10.2. Indemnity by the Buyer.

10.2.1. Indemnification. Subject to the limitations set forth in this Section 10, the Buyer shall indemnify and hold harmless the Seller and the Seller’s respective Affiliates (including, prior to the Closing, the Company), and the Representatives and Affiliates of each of the foregoing Persons (each, a “Seller Indemnified Person”) from, against, and in respect of, any and all Losses incurred or suffered by the Seller Indemnified Persons or any of them to the extent directly or indirectly resulting from, arising out of or relating to:

(a) any breach of or inaccuracy in any representation or warranty made by the Buyer in Section 5 of this Agreement

(b) any breach or violation of any covenant or agreement of the Buyer in or pursuant to this Agreement or any Ancillary Agreement

-42-

(d) the ownership development use or operation of the Included Assets and the Residual Assets by the Buyer or the Company after the Closing including the development commercialization marketing sale and promotion of the Product and the Residual Assets except to the extent such Losses result from breach of any representation warranty or covenant of the Seller under this Agreement or any Ancillary Agreement or from any Excluded Liabilities for which the Seller has agreed to indemnify the Buyer under Section 10.1.1(d) and ii the failure of the Buyer or the Company to discharge perform and satisfy in full the Included Liabilities 10.2.2.

10.2.2. Monetary Limitations. The Buyer shall have no obligation to indemnify the Seller Indemnified Persons in respect of Losses arising from the breach of, or inaccuracy in, any representation or warranty pursuant to Section 10.2.1(a) or Losses arising from the breach of any covenant or agreement to be performed prior to Closing pursuant to Section 10.2.1(b), unless the aggregate amount of all such Losses incurred or suffered by the Seller Indemnified Persons exceeds the Threshold Amount, in which case the Buyer shall indemnify the Seller Indemnified Persons for all such Losses, including the Threshold Amount, and not only to the extent such Losses exceed the Threshold Amount, and the Buyer’s aggregate Liability in respect of Indemnification Claims arising from the breach of, or inaccuracy in, any representation or warranty pursuant to Section 10.2 1(a) and Indemnification Claims brought after Closing arising from the breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 10.2.1(b) will not exceed Three Million Dollars ($3,000,000); provided, however, that the foregoing monetary limitations in this Section 10.2.2 will not apply to Indemnification Claims pursuant to Sections 10.2.1(a) in respect of breaches of, or inaccuracies in, representations and warranties set forth in Sections 5.1 (Organization), 5.2 (Power and Authorization), 5.4(e) (Breach of Organizational Documents) or 5.6 (No Brokers). Indemnification Claims pursuant to Sections 10.2.1(c) or 10.2.1(d), or for Losses arising from the breach of any covenant or agreement to be performed by the Buyer after the Closing pursuant to Section 10.2.l(b), are not subject to the monetary limitations set forth in this Section 10.2.2.

10.3. Time for Claims. No claim may be made or suit instituted seeking indemnification pursuant to Sections 10.1.19(a), 10.1.l(b), 10.1.1(c), 10.2.1(a), 10.2.1(b), or 10.2.1(c) unless written notice describing the breach of, or inaccuracy in, any representation or warranty, or the breach or violation of any covenant or agreement, or the purported fraud, in each case, in reasonable detail in light of the circumstances then known to the Indemnified Party, is provided to the Indemnifying Party:

(a) at any time, in the case of any breach of, or inaccuracy in, the representations and warranties set forth in Sections 3.1 (Organization), and 5.1 (Organization), 3.2 (Capital Structure), 3.3 (Power and Authorization) 4.2 (Power and Authorization) and 5.2 (Power Authorization) 3.4(e) (Noncontravention of Organizational Documents), 4.4(e) (Noncontravention of Organizational Documents), 5.4(e) (Breach of Organizational Documents), 3.12 (No Brokers), 4.6 (No Brokers), and 5.6 (No Brokers);

(b) at any time prior to the expiration of the applicable statute of limitations in the case of any claim or suit based upon fraud or for any breach of or inaccuracy in the representations and warranties set forth in Section 3.11 (Environmental Matters) or Section 3.13 (Taxes);

-43-

(c) at any time prior to June 30, 2011, in the case of (i) any breach of, or inaccuracy in, any other representation and warranty in this Agreement, or (ii) any breach of any covenant or agreement to be performed prior to the Closing

Notwithstanding anything to the contrary in this Agreement, Indemnification Claims pursuant to Sections 10.1.1(d), 10.1.1(e), and 10.2.1(d) are not subject to the limitations set forth in this Section 10.3.

10.4. Third Party Claims.

10.4.1. Notice of Claim. If any third party notifies an Indemnified Party with respect to any Action (a “Third Party Claim”) which may give rise to an Indemnification Claim against an Indemnifying Party under this Section 10, then the Indemnified Party shall promptly give written notice to the Indemnifying Party of such Third Party Claim; provided, however, that no delay on the part of the Indemnified Party in so notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation under this Section 10, except to the extent such delay actually and materially prejudices the Indemnifying Party.

10.4.2. Assumption of Defense etc. The Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim that is the subject of written notice given by the Indemnified Party pursuant to Section 10.4.1. In addition, the Indemnifying Party shall have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (a) the Indemnifying Party gives written notice to the Indemnified Party within [**] days after the Indemnified Party has given written notice of the Third Party Claim that the Indemnifying Party shall indemnify the Indemnified Party from and against the entirety of any and all Losses the Indemnified Party may suffer resulting from arising out of, relating to, in the nature of, or caused by the Third Party Claim to which the Indemnified Party is entitled to be indemnified under Section 10.1 or 10.2, (b) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party shall have adequate financial resources, or ready access to adequate financial resources (which may, but need not, include defense costs from insurance) to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (c) the Third Party Claim involves primarily money damages and does not seek material injunctive or other equitable relief against the indemnified Party, (d) the Indemnified Party has not been advised by counsel in good faith that an actual conflict exists between the Indemnified Party and the Indemnifying Party in connection with the defense of the Third Party Claim, (e) the Third Party Claim does not relate to or otherwise arise in connection with any criminal or regulatory enforcement Action or any patent, trademark or other intellectual property dispute, and (f) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. The Indemnified Party may retain separate co counsel at its sole cost and expense and participate in the defense of the Third Party Claim; provided, however, that the Indemnifying Party shall pay the fees and expenses of separate co-counsel retained by the Indemnified Party that are incurred prior to Indemnifying Party’s assumption of control of the defense of the Third Party Claim.

-44-

10.4.3. Limitations on Indemnifying Party. The Indemnifying Party shall not consent to the entry of any judgment or enter into any compromise or settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party unless such judgment, compromise or settlement (a) provides for the payment by the Indemnifying Party of money as sole relief for the claimant, (b) results in the full and general release of the Buyer Indemnified Persons or Seller Indemnified Persons, as applicable, from all Liabilities arising or relating to, or in connection with, the Third Party Claim, or (c) contains no finding or admission of any violation of any Legal Requirements or the rights of any other Person.

10.4.4. Indemnified Party’s Control. If the Indemnifying Party does not deliver the written notice contemplated by clause (a), or the evidence contemplated by clause (b), of Section 10.4.2 within [**] days after the Indemnified Party has given written notice of the Third Party Claim, or otherwise at any time fails to conduct the defense of the Third Party Claim actively and diligently, the Indemnified Party may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim; provided, however, that the Indemnifying Party shall not be bound by the entry of any such judgment consented to, or any such compromise or settlement effected, without its prior written consent (which consent shall not be unreasonably withheld or delayed). In the event that the Indemnified Party conducts the defense of the Third Party Claim pursuant to this Section 10.4.4, the Indemnifying Party shall (a) advance the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable outside attorneys’ fees and expenses, but excluding the expenses of any attorneys who are employees of the Indemnified Party), and (b) remain responsible for any and all other Losses that the Indemnified Party may incur or suffer resulting from, arising out of, relating to, in the nature of or caused by the Third Party Claim to the fullest extent provided in this Section 10.

10.4.5. Consent to Jurisdiction Regarding Third Party Claim. The Buyer and the Seller, each in its capacity as an Indemnifying Party, hereby consents to the non-exclusive jurisdiction of any court in which any Third Party Claim may be brought against any Indemnified Party for purposes of any claim which such Indemnified Party may have against such Indemnifying Party pursuant to this Agreement in connection with such Third Party Claim, and in furtherance thereof, the provisions of Section 12.12 are incorporated herein by reference, mutatis mutandis.

10.5. Other Limitations.

10.5.1. Insurance. The amount of any Losses shall be reduced or reimbursed, as the case may be, by any amount received by the Indemnified Party with respect thereto under any insurance coverage, less all reasonable out-of-pocket costs incurred by the Indemnified Party in its pursuit of such amount. The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance coverage. To the extent that any insurance payment is actually recovered by an Indemnified Party after the related indemnification payment has been made by an Indemnifying Party pursuant to this Agreement, the Indemnified Party shall pay over to the Indemnifying Party the amounts of such insurance payments (net of all legal costs and expenses incurred to collect the same) promptly after they are actually recovered.

-45-

10.5.2. Mitigation. Indemnified Parties shall use commercially reasonable efforts to mitigate any Losses that may provide the basis for an indemnifiable claim (that is, the Indemnified Parties shall mitigate such Losses in the same manner that they would mitigate such Losses in the absence of the indemnification provided for in this Agreement provided, however, that the Indemnified Parties shall not be required to incur any undue expense or take any action that would cause undue hardship, including impairing its ability to conduct business). Any request for indemnification of specific costs shall include invoices and supporting documents containing reasonably detailed information about the costs and/or damages for which indemnification is being sought.

10.5.3. No Double Recovery. Notwithstanding anything herein to the contrary, no Indemnified Party shall be entitled to indemnification or reimbursement under any provision of this Agreement for any amount to the extent such party has actually been indemnified or reimbursed for such amount under any other provision of this Agreement or otherwise.

10.6. Remedies Cumulative. The rights of each Buyer Indemnified Person and Seller Indemnified Person under this Section 10 are cumulative, and each Buyer Indemnified Person and Seller Indemnified Person, as the case may be, shall have the right in any particular circumstance, in its sole discretion, to enforce any provision of this Section 10 without regard to the availability of remedy under any other provision of this Section 10.

10.7. Knowledge and Investigation. If any condition contained in this Agreement or in any Ancillary Agreement based on the truth and accuracy of any representation or warranty, or the performance of or compliance with, any covenant or agreement is expressly waived in writing by an Indemnified Party, the right of such Indemnified Party to indemnification pursuant to this Section 10 based on such representation, warranty, covenant or agreement shall be deemed waived at Closing to the extent such waiver expressly states that such right to indemnification is also being waived.

10.8. No Right of Set-Off. The Buyer expressly waives any and all right of set-off against the Milestone Payment, the Milestone Buyout and the Promissory Note, including any and all right to apply the amount of any Losses referenced in this Section 10 against the Milestone Payment, the Milestone Buyout and the Promissory Note.

10.9. Exclusive Remedy. Except for remedies that cannot be waived as matter of law or the equitable remedy of specific performance in connection with the breach of any covenant contained in this Agreement, this Section 10 shall provide the sole and exclusive remedy following the Closing for any and all Losses sustained or incurred by any Indemnified Party relating to or arising in connection with (a) any breach of, or inaccuracy in any representation or warranty made in connection with this Agreement, (b) any breach or violation of any covenant or agreement in or pursuant to this Agreement or any Ancillary Agreement which does not require performance after the Closing Date or any other Losses that arise in connection with this Agreement or with respect to which indemnification is provided in this Section 10; provided, however, the remedies provided in this Section 10 shall not be exclusive of, or limit, any other remedies that may be available to any Indemnified Party in the case of any Losses arising in connection with the commission of fraud or in connection with any breach or violation of any covenant or agreement in Section 2.

-46-

11. TAX MATTERS.

11.1. Tax Indemnification. The Seller shall indemnify, exonerate and hold free and harmless each Buyer Indemnified Person from and against any Losses attributable to (a) all Taxes (or non-payment thereof) of the Company and its branches and subsidiaries, except for those Taxes that result from any transaction (or deemed transaction by way of any election or otherwise) caused by the Buyer outside the Ordinary Course of Business of the Company and occurring on the Closing Date after the event of Closing (i) for all Taxable periods ending on or before the Closing Date, and (ii) the portion of the Taxable period ending on or before the Closing Date for any Taxable period that includes, but does not end, on the Closing Date (each, a “Pre-Closing Tax Period”), (b) all Pre-Closing Tax Period Taxes of any other member of the affiliated, consolidated, combined or unitary group of which the Company was member on or prior to the Closing Date, including pursuant to Treasury Regulation Section 1.1502-6 or any analogous or similar state, local, or foreign Legal Requirement (including all Taxes of the foreign branches and subsidiaries included in the Excluded Assets), (c) any and all Taxes relating to Pre-Closing Tax Period of any Person imposed on the Company in the Company’s capacity as transferee or successor to such Person, by Contractual Obligation or otherwise, and (d) all value added Taxes arising out of or relating to the transfer of assets under the Inventory Transfer Agreement. Nothing in this Section 11.1 shall limit or expand upon Seller’s liability for indemnification pursuant to Section 10.

11.2. Straddle Period. In the case of any Taxable period that includes (but does not end on) the Closing Date (a “Straddle Period”), the amount of any Taxes of the Company based upon or measured by net income or gain for the Pre-Closing Tax Period shall be determined based on an interim closing of the books as of the close of business on the Closing Date, except that, any item caused by the Buyer outside the Ordinary Course of Business of the Company and resulting in Tax that is incurred after the event of Closing, but on the Closing Date, shall be allocated solely to the Post-Closing Tax Period. The amount of Taxes other than Taxes of the Company based upon or measured by net income or gain for Straddle Period which relate to the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the entire Taxable period multiplied by a fraction, the numerator of which is the number of days in the Taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period.

11.3. Tax Sharing Agreements. All Tax sharing agreements or similar agreements and all powers of attorney with respect to or involving the Company shall be terminated prior to the Closing and, after the Closing, the Company shall not be bound thereby or have any Liability thereunder.

11.4. Certain Taxes and Fees.

11.4.1. All transfer, documentary, sales use stamp, registration and other such Taxes, and any conveyance fees or recording charges incurred in connection with the Contemplated Transactions, shall be paid by the Seller when due. Seller shall, at its own

-47-

expense, file all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges incurred in connection with the Contemplated Transaction and, if required by applicable Legal Requirements, Buyer shall (and shall cause its Affiliates to) join in the execution of any such Tax Returns and other documentation.

11.4.2. Seller shall timely pay in full all Taxes due and payable after the Closing Date with respect to the Company’s branches and subsidiaries that are included in the Excluded Assets.

11.5. Cooperation on Tax Matters. The Buyer and the Seller shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with any Tax matters relating to the Company (including by the provision of reasonably relevant records or information). The party requesting such cooperation shall pay the reasonable out-of-pocket expenses of the other party.

11.6. Tax Contests. Notwithstanding Section 10.4, the Seller shall have the responsibility for, and the right to control, at the Seller’s sole expense, the audit and/or litigation (and disposition thereof) of any Tax Return relating to taxable periods ending on or prior to the Closing Date, and the Seller shall have the right to participate, at its own expense, in the disposition of the audit of any Tax Return relating to periods ending after the Closing Date, if and to the extent that such audit or disposition thereof is reasonably likely to give rise to claim for indemnification under either Sections 10.1 or 11.1. The Buyer shall have the right directly or through its designated representatives at Buyer’s sole expense, to review in advance and comment upon all submissions made by the Seller in the course of audits or appeals thereof to any Governmental Authority relating to taxable periods ending on or prior to the Closing Date and to approve the disposition of any audit adjustment with respect to such periods, such approval not to be unreasonably withheld or delayed.

11.7. Tax Returns.

11.7.1. The Seller shall prepare and file (or cause the Company to prepare and file), at Seller’s sole expense, all Tax Returns related to the Company that are due on or prior to the Closing Date, and shall timely pay (taking into consideration any extensions for filing) any Taxes with respect thereto.

11.7.2. In addition to Section 11.7.1, the Seller shall prepare and file, at Seller’s sole expense, (i) all the Seller combined or consolidated U.S. federal Tax Returns (income or non-income) of which Company is includible,(ii) all Seller combined, unitary or consolidated state or local Tax Returns (income or non-income) of which the Company is includible, and (iii) all Italian Tax Returns (income and non-income) related to the Italian branches and subsidiaries that are included in the Excluded Assets, and shall timely pay (taking into consideration any extensions for filing) any Taxes with respect to (i), (ii) and (iii), above. The Company shall provide, at the Company’s sole expense, all information in its possession and not otherwise available to Seller required to be included in such returns as the Seller may reasonably request within [**] days of such request.

-48-

11.7.3. The Company shall prepare and file, at the Company’s sole expense, all Tax Returns related to the Company, other than those described in Section 11.7.1 and Section 11.7.2 that are due after the Closing Date (including those non-income Tax Returns and separate state and local income Tax Returns for Taxable Periods ending after the Closing Date), and shall timely pay (taking into consideration any extensions for filing) any Taxes with respect thereto.

11.7.4. With respect to Section 11.7.3 at least [**] days prior to the date on which each such Tax Return is due (taking into consideration any extensions for filing), the Company shall submit such Tax Return to the Seller for the Seller’s review, comment and approval, which approval shall not be unreasonably withheld or delayed, and shall not be withheld in any event if such Tax Return has been prepared substantially in accordance with Company’s past practices.

11.8. Other. Any refund of Taxes received by any Person with respect to any Taxes paid by Seller for Pre-Closing Tax Period, shall be the property of the Seller.

12. MISCELLANEOUS.

12.1. Notices. All notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided under this Agreement must be in writing and must be delivered, given or otherwise provided:

(a) by hand (in which case, it shall be effective upon delivery);

(b) by facsimile (in which case, it shall be effective upon receipt of confirmation of good transmission); or

(c) by overnight delivery by nationally recognized courier service (in which case, it shall be effective on the Business Day after being deposited with such courier service);

in each case, to the address (or facsimile number) listed below:

If to the Buyer, to it at:

Durata Therapeutics, Inc.

Times Square Tower

7 Times Square, Suite 1603

Facsimile number: (646) 519-2782

Attention: Mr. Ron M. Hunt

with copy to:

O’Melveny Myers LLP

2 Embarcadero Center, 28^th Floor

San Francisco, CA 94111

Facsimile number: (415) 984-8701

Attention: Peter T. Healy, Esq.

-49-

If to the Seller, to it at:

Pfizer Inc.

234 East 42nd Street

New York, NY 10017

Facsimile number: (212) 573-0768

Attention: Senior Vice President and General Counsel

with copy to:

Ropes & Gray LLP

One International Place

Boston, MA 02110

Facsimile number: (617) 235-0223

Attention: Steven A. Wilcox, Esq.

Each of the parties to this Agreement may specify different address or facsimile number by giving notice in accordance with this Section 12.1 to each of the other parties hereto.

12.2. Succession and Assignment; No Third-Party Beneficiary. Subject to the immediately following sentence, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and permitted assigns, each of which such permitted successors and permitted assigns shall be deemed to be party hereto for all purposes hereof. The Seller may assign or otherwise transfer any or all of its rights or interests under this Agreement to receive any Milestone Payment (or Milestone Buyout, as applicable) from Buyer, with the consent of the Buyer, which such consent shall not be unreasonably withheld or delayed, and provided further, that the Seller shall have entered into an indemnity and release in favor of the Buyer, confirming that Buyer’s obligations to the Seller to make any Milestone Payment or Milestone Buyout payment shall be deemed to be discharged and satisfied in full to the extent Buyer makes such payments to the Seller’s designated assignee in accordance with the written payment instructions furnished to the Buyer by or on behalf of the Seller, in form and substance reasonably satisfactory to Buyer. The Buyer, and other than as provided in the prior sentence, the Seller, may not assign, delegate or otherwise transfer either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other party. Notwithstanding the foregoing, without the consent of the other party, (a) each party hereto may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates, and (ii) designate one or more of its Affiliates to perform its obligations hereunder, in each case, so long as the assigning party is not relieved of any Liability hereunder, and (b) the Buyer may assign and delegate this Agreement and all of its rights, interests and obligations hereunder to Qualified Successor (i) in connection with Change of Control of Buyer with such Qualified Successor or (ii) in connection with Product Transfer to such Qualified Successor, so long as, in the case of subsections (b)(i) and (b)(ii) of this Section 12.2, such Qualified Successor unconditionally assumes all of the Buyer’s Liabilities under this Agreement. Any such assignment and delegation of this Agreement made in conformity with subsection (b)

-50-

of this Section 12.2 shall operate to relieve the Buyer of its liabilities and obligations hereunder if such Qualified Successor expressly and unconditionally agrees in writing with Seller that it shall be bound by and shall assume, pay and perform all of the Buyer’s obligations as set forth in Section 2.5.3 of this Agreement. Except as expressly provided herein, this Agreement is for the sole benefit of the parties hereto and their permitted successors and permitted assignees and nothing herein expressed or implied shall give or be construed to give any Person, other than the parties hereto and such successors and assignees, any legal or equitable rights hereunder

12.3. Amendments and Waivers. No amendment or waiver of any provision of this Agreement shall be valid and binding unless it is in writing and signed, in the case of an amendment, by the Buyer and the Seller, or in the case of waiver, by the party against whom the waiver is to be effective. No waiver by any party hereto of any breach or violation or default under, or inaccuracy in, any representation, warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent breach, violation, default under, or inaccuracy in, any such representation, warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on the part of any party hereto in exercising any right, power or remedy under this Agreement shall operate as waiver thereof.

12.4. Entire Agreement. This Agreement, together with the Ancillary Agreements and any documents, instruments and certificates explicitly referred to herein, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, with respect thereto, except for the Confidentiality Agreements.

12.5. Exhibits; Listed Documents, etc. The listing or description of any item, matter or document in any Schedule hereto will be deemed to modify, qualify or disclose an exception to any representation or warranty of any party made herein or in connection herewith to which it reasonably relates.

12.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. This Agreement shall become effective when duly executed by each party hereto.

12.7. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. In the event that any provision hereof would, under applicable Legal Requirements, be invalid or unenforceable in any respect, each party hereto intends that such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable Legal Requirements.

12.8. Headings. The headings contained in this Agreement are for convenience purposes only and shall not in any way affect the meaning or interpretation hereof.

-51-

12.9. Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The parties intend that each representation, warranty and covenant contained herein shall have independent significance. Except as otherwise set forth herein, if any party has breached or violated, or if there is an inaccuracy in, any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached or violated, or in respect of which there is not an inaccuracy, shall not detract from or mitigate the fact that the party has breached or violated, or there is an inaccuracy in, the first representation, warranty or covenant.

12.10. Governing Law. This Agreement, the rights of the parties and all Actions arising in whole or in part under or in connection herewith, shall be governed by and construed in accordance with the domestic substantive Legal Requirements of the State of New York, without giving effect to any choice or conflict of law provision or rule (other than Section 5-1401 and 5-1402 of the New York General Obligation Law) that would cause the application of the Legal Requirements of any other jurisdiction.

12.11. Dispute Resolution.

12.11.1. If a dispute arises under this Agreement which cannot be resolved by the Buyer and the Seller prior to initiating an Action, either party hereto may invoke the dispute resolution procedure set forth in this Section 12.11 by giving written notice to the other party hereto, designating an executive officer with appropriate authority to be its representative in negotiations relating to the dispute. Upon receipt of such written notice, the other party hereto shall, within [**] days, designate an executive officer with similar authority to be its representative. The designated executive officers shall, following whatever investigation each deems appropriate, promptly enter into discussions concerning the dispute. Neither party may commence an Action of any matter hereunder (other than injunctive or other equitable relief) until the expiration of [**] days after its notice designating such executive officers.

12.11.2. Notwithstanding the last sentence of Section 12.11.1, in the event that the Seller elects to dispute the Buyers FDACM Notice certification described in Section 2.6.1(ii)(b), the parties will submit the matter to non-binding mediation and binding arbitration as follows :

(a) The parties shall first submit such dispute to panel of three (3) experts in the field of clinical development of antibiotic drugs, one (1) expert to be appointed by the Seller within [**] days from the notice of initiation of arbitration, one (1) expert to be appointed by the Buyer within [**] days from the notice of initiation of arbitration, and the third expert to be selected by mutual agreement of the Seller’s appointed expert and the Buyer’s appointed expert within [**] days of the date that the last of such experts was appointed. The three experts shall be instructed by the parties to complete the arbitration within [**] days after selection of the final expert. The third expert shall be wholly independent of each party shall not have any conflicts of interest with either the Buyer, the Seller or the Company.

-52-

(b) If either party disagrees with the final decision of the panel of experts under Section 12 11.2a, or the parties fail to select such panel of experts within [**] days from the notice of initiation of arbitration, the disputed matter shall be resolved in binding arbitration in New York, New York before single independent arbitrator appointed jointly by the Seller and the Buyer. The arbitration shall be administered by JAMS pursuant to its (Comprehensive Arbitration Rules and Procedures) (Streamlined Arbitration Rules and Procedures) or, if agreed by the Buyer and the Seller in writing, any alternate provider pursuant to its rules and procedures.

(c) Each party hereto shall bear 50% of the experts’ and arbitrators’ fees and the applicable filing costs, but each party hereto shall bear sole responsibility for its own legal, accounting, advisory and other fees associated with proceedings under Section 12.11.2a and Section 12.11.2b. The experts and arbitrator shall resolve only those matters in dispute. Judgment of the arbitrator on the award may be entered in any court having jurisdiction. This Section 12.11.2 shall not preclude the parties hereto from seeking provisional remedies in aid of arbitration from court of appropriate jurisdiction.

(d) During the pendency of any mediation or arbitration proceeding under Section 12.11.2a and Section 12.11.2b, the Seller Payment shall not be due and interest thereon shall not begin to accrue and shall be suspended until the dispute has been finally resolved.

12.12. Jurisdiction; Venue; Service of Process.

12.12.1. Jurisdiction. Subject to the provisions of Section 10.4.5 and Section 12.11, each party hereto, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any New York state court sitting in New York, New York, United States of America for the purpose of any Action between the parties arising in whole or in part under or in connection with this Agreement, (b) hereby waives to the extent not prohibited by applicable Legal Requirements, and agrees not to assert, by way of motion, as defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) hereby agrees not to commence any such Action other than before one of the above-named courts. Notwithstanding the previous sentence, party may commence any Action in court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts.

-53-

12.12.2. Venue. Each party waives any claim and shall not assert that venue should properly lie in any other location within the selected jurisdiction.

12.12.3. Service of Process. Each party hereby (a) consents to service of process in any Action between the parties arising in whole or in part under or in connection with this Agreement in any manner permitted by New York Legal Requirements, (b) agrees that service of process made in accordance with clause (a) or made by registered or certified mail, return receipt requested, at its address specified pursuant to Section 12.1, shall constitute good and valid service of process in any such Action and (c) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any such Action any claim that service of process made in accordance with clause (a) or (b) does not constitute good and valid service of process.

12.12.4. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LEGAL REQUIREMENTS THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY SHALL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, AND SUCH PROCEEDING SHALL INSTEAD BE TRIED IN COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT JURY.

[The remainder of this is page intentionally blank]

-54-

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as an agreement under seal as of the Execution Date.


“BUYER”

DURATA THERAPEUTICS, INC

By:	/s/ Dov. A. Goldstein
	Name:	Dov A. Goldstein
	Title:	Interim Co-President

By:	/s/ Ronald M. Hunt
	Name:	Ronald M. Hunt
	Title:	Interim Co-President

“SELLER”

PFIZER

By:	/s/ William Ringo
	Name:	William Ringo
	Title:	SVP, Worldwide Business Development, Strategy & Innovation

EX-23.1 9 d312438dex231.htm CONSENT OF KPMG LLP Consent of KPMG LLP

Exhibit 23.1

CONSENT OF REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Durata Therapeutics, Inc:

We consent to the use of our report included herein and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

Short Hills, New Jersey

April 30, 2012

EX-24.2 10 d312438dex242.htm POWER OF ATTORNEY FOR RICHARD U. DE SCHUTTER Power of Attorney for Richard U. De Schutter

Exhibit 24.2

DURATA THERAPEUTICS, INC.

Power of Attorney

The person whose signature appears below appoints Paul R. Edick and Corey Fishman, and each of them singly (with full power to each of them to act alone), his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him and in his name, place and stead, and in any and all capacities, to sign any or all amendments (including post-effective amendments) to the Registration Statement on Form S-1 of Durata Therapeutics, Inc., and any other registration statement for the same offering pursuant to Rule 462(b) of the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 30th day of April, 2012.

/s/ Richard U. De Schutter

By: Richard U. De Schutter

Title: Director

EX-24.3 11 d312438dex243.htm POWER OF ATTORNEY FOR KEVIN C. O'BOYLE Power of Attorney for Kevin C. O'Boyle

Exhibit 24.3

DURATA THERAPEUTICS, INC.

Power of Attorney

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 30th day of April, 2012.

/s/ Kevin C. O’Boyle

By: Kevin C. O’Boyle

Title: Director

GRAPHIC 13 g312438g19e87.jpg GRAPHIC begin 644 g312438g19e87.jpg M_]C_X``02D9)1@`!`@$`8`!@``#_[0E*4&AO=&]S:&]P(#,N,``X0DE-`^T` M`````!``8`````$``0!@`````0`!.$))300-```````$````'CA"24T$&0`` M````!````!XX0DE-`_,```````D```````````$`.$))300*```````!```X M0DE-)Q````````H``0`````````".$))30/U``````!(`"]F9@`!`&QF9@`& M```````!`"]F9@`!`*&9F@`&```````!`#(````!`%H````&```````!`#4` M```!`"T````&```````!.$))30/X``````!P``#_____________________ M________`^@`````_____________________________P/H`````/______ M______________________\#Z`````#_____________________________ M`^@``#A"24T$"```````$`````$```)````"0``````X0DE-!!X```````0` M````.$))300:``````!M````!@``````````````Y@```@$````&`&<`,0`Y M`&4`.``W`````0`````````````````````````!``````````````(!```` MY@`````````````````````````````````````````````X0DE-!!$````` M``$!`#A"24T$%```````!`````(X0DE-!`P`````!JT````!````<````#(` M``%0``!!H```!I$`&``!_]C_X``02D9)1@`!`@$`2`!(``#_[@`.061O8F4` M9(`````!_]L`A``,"`@("0@,"0D,$0L*"Q$5#PP,#Q48$Q,5$Q,8$0P,#`P, M#!$,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,`0T+"PT.#1`.#A`4#@X. M%!0.#@X.%!$,#`P,#!$1#`P,#`P,$0P,#`P,#`P,#`P,#`P,#`P,#`P,#`P, M#`P,#`S_P``1"``R`'`#`2(``A$!`Q$!_]T`!``'_\0!/P```04!`0$!`0$` M`````````P`!`@0%!@<("0H+`0`!!0$!`0$!`0`````````!``(#!`4&!P@) M"@L0``$$`0,"!`(%!P8(!0,,,P$``A$#!"$2,05!46$3(G&!,@84D:&Q0B,D M%5+!8C,T)E\K.$P]-U MX_-&)Y2DA;25Q-3D]*6UQ=7E]59F=H:6IK;&UN;V-T=79W>'EZ>WQ]?G]Q$` M`@(!`@0$`P0%!@<'!@4U`0`"$0,A,1($05%A<2(3!3*!D12AL4(CP5+1\#,D M8N%R@I)#4Q5C+RLX3#TW7C\T:4 MI(6TE<34Y/2EM<75Y?569G:&EJ:VQM;F]B7I[?'_]H`#`,!``(1 M`Q$`/P#TVFBC[/634T^QOYH\$U0Q[&;_`$/3UB'L#3]R)3/V:O:8.P0?.$"Z MR_&QVNN>+G&ZIDANWVV65T_1#C]'U$E-C[/C_P"B9_FA+[/C_P"B9_FA$224 MC^SX_P#HF?YH2^SX_P#HF?YH1$DE(_L^/_HF?YH2^SX_^B9_FA$224C^SX_^ MB9_FA+[/C_Z)G^:$1))2/[/C_P"B9_FA+[/C_P"B9_FA$224C^SX_P#HF?YH M0[Z*!1816SZ#OS1X*PAY']'M_J._(DI__]#TC&]1USF.&ZG[/5`U^D?5#Q^Y M]%K4'(%7V"*:'4!M]3MA:&DEEM5N[V_O;%;Q:&-C($^I956P^$,#BV/^W'J- MK+14P6O%CO6K(+6[=`]O;<]$;A39Y3JM+J&3596ZE@/M>=NT-T/Z5N[VU_1_ MF_\`KBQP'T3L<75V'V;7^S^Q;*2KG-QVF'$M(!)T)`#3MLES-S?T;OYS]Q2^V8<[?7KF2(W"9`WQS^Y[T ME4>R9)0;=2Z`U[3N,""#)(]0?^!^].U['?1<'2`X09T/T7)*HCHR0\C^CV_U M'?D1$/(_H]O]1WY$D/\`_]'U''_H]7]1OY%7OQF/J-556P>O78Z(;N(?7>^T M:_ZO1J'AM-8(((:V1M/A\$GVXSGLJ>X>H9L969#B*RS=8UGTG,K?95O_`.,8 MDD&B#V0?8S`$GQ=#0`2YV[)TW?\`:C\_^7^D2=A;@=Q<2=Q)VMDDG1W/^B_0 MO_TBM^HWS^X_W)>HWS^X_P!R%!=[L^_X-8XL3L+FNDN#H!AW%;^?\&S]%_+J M]CT,],H)^@(!!'L;(#6[:VM?]+]&_P#2,>KOJ-\_N/\`_TGZ9G^CM3C#/#G%TQ,M;!EQLN[_X?V[T]M^0ZXMQZ MZ;ZV%HLW6%KV/T>[[/NM]C$EQ)+G3N]K8,GW;F_P`NL>E9^^G=AN=N]SCNW$2UKH)'IUN] MQ_,JW5_\(K7J-\_N/]R7J-\_N/\`8E^.VE)26EI32FM7\E*23_`%K67;Z1D7SN MLJNGKYZZ5.HLLHA.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-'H3JWRKA,GS3V7< M.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-'H3JWRKA,GS3V M7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-'H3JWRKA,GS M3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-'H3JWRKA, MGS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-'H3JWRK MA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-'H3JW MRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-'H3 MJWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N-' MH3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ3N M-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW#KZ M3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]EW# MKZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T]E MW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3)\T M]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX3) M\T]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\JX M3)\T]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$ZM\ MJX3)\T]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z$Z MM\JX3)\T]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C1Z M$ZM\JX3)\T]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D[C M1Z$ZM\JX3)\T]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ^D M[C1Z$ZM\JX3)\T]EW#KZ3N-'H3JWRKA,GS3V7<.OI.XT>A.K?*N$R?-/9=PZ M^D[C1Z$ZM\JX3)\UYW?W+IWX3K/_`+AB_P#U7/*R9/FO_]#NP\+O[.N)W^-& MB?Z6U7"D^)4E\*$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,( MF$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$P MB81,(F$3")A$PB81,(F$3")A$PB81>:3D+(O_]'NP\+O[.N)W^-&B?Z6U7"D M^)4E\*$PB816P>[TQ.WHZ^4MU8)?7$(>RH4@\_%%MZ]<3="R4GT:T9V$RI"$ M>%%$71410!4.SVNU\,(K7/NW3"=;>7)3;FL"5".LQJ7(6H]^JA:VQN)':<>> MIO)PTL$6VLQ'ZQ$!8'5*Z!8P$[':$`PBR?A$PB81,(F$3")A$PB81,(F$3") MA$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,( MF$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(O-)R%D7__TN[#PN_LZXG? MXT:)_I;5<*3XE27PH3")A%KPWQJ#;&Q-UQ!J'KUY0D8J??V-MNF)GM5KTBQK MV71%QU%)VC8T,+2%WNWVE0X6QNH>M-X\\K7SMG3=T[6`Q!08%(6)873VX(NY M5';BW%N45K52UE2M+NN-Z%MT6+N3F:YJ[8]/?;@BWZMZ2U^-;5B+BVIR2;F0 M;3AJZFJJ9@4@$8GA3G[5L?TQ4)O7VGM44*S2Q9ZR4C6M%J%@G2F4.6:FZU5X MN&E98IUBD5.61?LE%@$P`8>W\0ZY*\E5:X-X,4V;N:-=.R0ZC=`M/=;#!03* ME[PQGC.@*@LH0`1Z%5<)B4@CV2F`3=!(OUKIXXD-?41^[<.7;I]3:P\415[P0'MBJ<.@"'9ZCU`BMS6':#6NO`.)3'"C5+MF*42%,;Y!']H2D$ MQQ*41_@`F'I_Y1PBOG")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A M$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F M$3")A$PB81,(F$3"+S26<7*J(1;5\SBW,DM88A*/;R$5I6]E'/F39.2HWW\2(Z[:<=X2K//!J=RH7QO8M[#PN_LZXG?XT:)_I;5<*3XE27PH3")A%`2[5F= ML_+2&.ST;9X&OTAVA>FN[V$35GA]A[1=:HLM'@XYS:'D\O-TO66OZS8545D$ MHY=29GW0D,BW8MWOSLI^'BHGZKXX[#UA`T"/DN.MZV?I/7<.UJS745Z@^)C+ M;,E<7^H;#KN6L\BOKAY3==VRD0J2"$`SE99TXLJZUEEGRQU8@B#D84Y^WJML M.F:Q9:1I_5%+NWU'XY*\JK7!PR9)LW@M1.HW*J#JFLVT@X.7O2IG6ML'+`9=)-(PE*B M9/J7M"8#=`$"**7[>FV;/M_CNXEK=)H3$M3-V^HP4+5)E=I;')1JRXZGYI*\;W MG))\7EQ\AG````6*)Y>UQ/B'.']!('Z%.'.(LJ81,(F$3")A$PB81,(F$3") MA$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,( MF$3")A$PB81,(F$3")A$PB81,(F$3")A$PB\TG(61?_6[L/"[^SKB=_C1HG^ MEM5PI/B5)?"A,(F$3")A$PBI,PC.K()%@)*)C7(*]5E9B%>3B"B'8,'=I-V4 M_7E$5>\$![8JG#H`AV>H]0(M3?[-4Z,OI;E1''59JGJO[A'+:!4\(!RG(=Q; M8FS&*\(==?L.3?>/ME`.ST0,G\!'J8UUYM%ZLI2VDPB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB8 M1,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3") MA$PB81,(F$3")A%YI.0LB__7[L/"[^SKB=_C1HG^EM5PI/B5)?"A,(F$3")A M$PBM*WLHY\R;)R5&^_B1'7;3CO"59YX-3N5"^-[%KE(IF7[(BGU3.97[?^GL M]1`BTZ?LAD%#6W+DQ`[DEGYB;'V2^:`1,J32P7F(KBLL@T`AE3),&Z$2V113 M%13L%1Z]HQC&,-_YY_\`RH_L:J&,?W69QG[>I)^]:E3_`'_VR$_TK=QE`6VF M$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB M81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(O-)R M%D7_T.[#PN_LZXG?XT:)_I;5<*3XE9WLMLJU+BSSEQLM?J<*FLBV/+V69CH* M+(X<")6Z!Y"4;W'E29A2]>7>C;*K%> ME)J*Y"O=2;:L3.W7&;U!;*G3M;U/;3*K3&O=?:HJI)OYO847$O&LGE@(B@DQ M7>.9!T4I^"CI$:>KS=]7965XM7I3BNQJ],A+MH933LZ]F9+DW'ZZV'%6+:CC M7J;5>5LX'"5AZVI;4$'4>YG")S17QVC8\TE"G/V]5MMTQ$W.`T]JB"V.^-*; M#A=:T6)OLF9P1V:1N<;5XMG:'QG:9U2.C.YQ%=05"F,!^UU`1Z]2JM<'# M)DFS=R.PUZ"U$ZC]*F=:VPT)@-T`0(M M/G[+X%9UC?4>54W22LT/<03$X&!Y\UNVY:D$Z4"=$@*_+0@:]2`4@BP'H4/X MC?\`G'S0Z!_CBN&9^Z*%^/P[\_[2TZOC*/MS^D_\BW;Y0%N)A$PB81,(F$3" M)A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81, M(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3"+S2>3\[P\B]OMUMY\0]J@ MGSJ1[$/#62NZSO\`3ZM*N%6YU'S1HHV>*D%$[DIBBB.0I&<>*R9P$IL36>-E M/FV>GFFB)B_N)NWV;6L?KR1T\SA)%U.2;)@H.HWK.)1U](OJ^S9K/&B3!B95 MPUU#H)%I=_:;$T1/V)FIV$DKMQ[K$^W0![XQS=I^Y]*@YH_I M:\]?'\.FG6Z/?]H_4Y__`+%NXSY^MQ,(F$3")A$PB81,(F$3")A$PB81,(F$ M3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB8 M1,(F$3")A$PB81,(F$3")A$PB81>:3D+(O_2[L/"[^SKB=_C1HG^EM5PI/B5 M![]T*H,(UQIK8T3%4C7+V9LDK3MD\G%.-VVMUWS7U6BJK/6.D1:4QQSO&N=U M5N+E;>@+5!P62+$-W+O^8HDX4;I.H*EOQ67?VQ[_`,B+KH)_'0OSB2E1=/RL`([;,Y) MN^;)@CL9Z+8WDKRF$3")A%:5O;>)9-B?)K;-=EUVNXJ%E^[#U+^2H'?.7?WL MJ/B&OQ[/=]^K]L0-V/AV@(M-O[>B@P;K@U8T4G"<-MO07.BM&5<`N55R]B^4 MM,VEK4YP4/\`P=4^6LJX][VEOM%[/9#O>OT'?CU*.[A/[RO-0=]P-1T4G]#Q M&.G3]"TX>CHC\"'_`/.R/]*W?Y\^6XF$3")A$PB81,(F$3")A$PB81,(F$3" M)A$PB81,(F$3")A%@_C+M\W('CGHC>:LZ6?,H*5N-3B9 MZ6@FKUPD@N[1A)-\JU!4Y"&."/:$`$>F=/Q)&"1@N#'% MH<1\,@`X^U>(W^I&Q^/$`K.&TPB81,(F$3")A$PB81,(F$3")A$PB81,( MF$3")A$PB81,(F$3")A$PB81,(F$3")A$PB\TG(61?_3[L/"[^SKB=_C1HG^ MEM5PI/B5!;]V^PR\3"\9HM*4EHRJ3>U+?]]1+?\`E7K^INX^-U=9W$,VMK;?8;HV-HBOMHDEUV-7-6O+5RU0GX==PM.1@LJ\>Z3<4U1;H2\8)B0I_6MQ>F4KVAI_5".T M3E4V8CK6BI;%4*H58I[VG5XLEN.54@B14IK`#@0,'P-_$,E>4V.K*H-(Y5CM M""U@W%R=-9_,1$+(FDEA2,9)F@M/2C)BB4A"F.8I4CJF[("!BE`P&(M0W&\X M5GA'^U7MHQRK(ZZWE3H*9D`((-U8;D"3;/&=N1QW(BFBU<7C<$&Y(;J!0P)BF^@V_VVXY;0SUFH]P^^!L-@D?[$3Q]Q*TV](Z[\>#_`->6_K(6\//G MRW$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB816AL+_P#>/_`)0L MO_P5[FQ5_P"]5O\`I&_K"AWY3]R@9^T)9OO7^VMQ%?&,L*T3K)2D.TW#7P;A MH_UQ:+#KZ1CUVP@4R:T<^K"CF\FDD@"*D:\\*,4HF9J#5J*8HD(%"81,(F$5)F%IU%!(T!&Q,DY%7HLE,33R#030[!A[Q)PR@+"HLKW@`'8%(@ M=!$>UU#H)%J'T11I78_[+T!6(-3PMN'C];;)2'*8*."Q^QJ18;!=]>ORE3(1 M9:\P6Z%`IS@GT#H(ATO,]IE/G,4\HS!ZT37CSC>QC)!^+'."U&M[JA`\ M<''W@DC]*VM:WNC#9.NZ%L6*(*<7?J75KI&IF,4YDV%I@V,XS(8Y!$IA*W?% M`1`1`!&5>F:R])A$PB81,(F$3") MA$PB81,(F$3")A$PB81,(F$3")A%CS;DHC!ZHV=-.$U%F\/KRZ2BZ2/9[Y5& M/K7G#''["M??[5<>O MK_4-VT9("U!YKF6U9;HWPBJJJ+VN;NX_:HV:YEB`X306(FOM"5M30O\`+*4P M,NU_J,8I;7SAXM["MLV9[9FRM.?@Z&>6,#_JQ$?Q6O5^5A8?AC](!_7E;1\I M*VDPB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81, M(F$3")A$PB\TG(61?__5[L/"[^SKB=_C1HG^EM5PI/B5$?EDC!;[W]*:0D[@ M^TU.\==&-]_ZZV-%\C;%Q_L]BV+M=39&N(B(25K4*ZEW&HH6&IS]*S3"*[@[ M5Q*-D4V2ARF,,*1T&5EO]M>I5.`XB:EL5(D=IJUS8M5@[JP@-G[3E-O!5?'1 MC9LO&4:X2;./-*T)^Y:G?QKY-!$LL@Z*_$A3.3%"5!\2IZ84)A$PB816E;_D M_@FWSG[V]QXK^5]T/OUXWONY4_ZS]PO^T?"]CK_OOY';Z?\`2[.$4,_VO2IG MX!<9R=DQDC4-X7LK@H8YDS6BPAV5@7ZJB82C]H#_`&NO\?CE@Y1_Y]>Q_J?] MFQ8:_P"Y9^/ZRK?AII;@!*3=4M,)*'X22\\K.:ZV-$$7F67%16?,16:UEL>% M:MS24!H-M816>5ZQ-RN(ZL-WYHR1*QC&31WF])&.5,CG@D;_`#(UG;)&>AL] MOA)&3T=/VX$D9PZ0M[V=SW.:O(/H$@C]C\#_`&?L/V>1^'@>BV&1LE'3,='S M$/(,I:(EF362BY2-=(/HZ2CGR";IC(1[YJHJV>,GC94JB2J9C)J)F`Q1$!`< MJ;V/C>^.1A;(TD$$8((Z$$'J"#XA;'CU'@N;GE$PB81,(F$3")A$PB81,(F$ M3")A$PB81,(F$3")A%B#D'_]@]W_`/X@V5_]&36=#4_^::W_`,1'_P`\+Q)^ M[D_NG]2A9J=<-5[FXBVA8P-:QREXDTK2,BJ`F(BIMS2%3>[>UC??,/^BF<(I/P;(V#IC'SD]/CA M9\KH3\',`_$=1^C*V993%LIA$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3 M")A$PB81,(F$3")A$PB81,(F$3")A%YI.0LB_];NP\+O[.N)W^-&B?Z6U7"D M^)60=G:'T=NP(0-S:9U3ML*R[%_6PV=KNH7T*^^,9,YGL(%JAY7Y4[$Z)!%1 M#NS]2`/7X!A1E9.:-&K!JV8L6S=DR9-T6C-FT13;-6C5LF5%NV;-T2D10;H( MD`A"$`"E*`````812=!N5F_V\1JL$HM&AOMC5YC M6I*K6>>62C234I+.W4FBR01=/3,6J*2AT4"K+K*"4C&"H)1%[@U'U=9RV^=X M)<35ZO3'MYVLONK;C.Y1?*)SKK8:UDUL]V*691ME92119PKA>I)N6L>WNZJ, M/X$CAP,4I"G]:VVZ8>WB2T]JB1V:U,QV3(:UHKW83(S<&AF=X=5>+7MC4S4" M)@V,WGE'!!3`I>QTZ=`Z=,E>2KMF&]F7,@-?EX*,(4JGBBS%=D)TRQA$G="@ M=E::Z#8I``W:`Q5>UU#H)>GQ(HI_MZ,6\=PCXR-FJ*2"8ZFK;I0B!!32,Z?I M*/GRQ4S'4$GB7KE100[0]!,/QRP/6S^ M.LR^LW#56J+4"6>O92U<2-@SDC5=6%?O!0B3ZIH`;:C`=+@=`V=A2M#V7Q2E55`;FF-NP39[J!147( M-2+(\@Z`^M^EXUJY,H11$DU,P\@9(_51HD8BI$\9XU:L`OTUJ&\SRB=B7PS^ MX>&3$^?8Q[<^#CTS/K-;TD:6'[?#^D=%+Z"GX*T1#"P5F:B;%`RJ`.HN;@I% MG+Q$DU,8Q2N6$E'K.&3Q`QBB`'3.8HB`_'.!+%+!(Z*:-S)6G!#@00?M!ZA9 M001D'(56S&I3")A$PB81,(F$3")A$PB81,(F$3")A$PB811XY=NG+'B?R>>L MUU&SMGQXW4Z:N43BFLWAB*)*D`Q1#X@(9UM`T.WNE:X9:;<( M/_6-6.;]U+_=/ZE;]TT-#[IXYT"A,[#,ZYG:O!ZZMFJM@U0&YY[6%_IL.S5I MUJB&;X%(^50CC"9L]CG93-)2+<.62X=TX.(9:VTDUVWM6G1-FB>Z1LL;ORR, M>3WM)'49\0X=6N`<.H4.C#XVMS@C&#Y$>"L>BJ*(LUP6X MV.9-]8Z+3)+0UQD%C.W5QXWVRSZ%F'T@8$2B_L#'64I7JQ=5C$;D*=.>CY1N MJ4H`=,W0.G>CY-N`QL-JP+5<=`RPULX`\FF0.W[_`$I_5S]S96#RP.BCLF;^ M64$?ZP_TC'ZBOPGR%Y(THX([CX97)ZT3ZD M$_@0?^0_H58B.=W%)[(-82Q[:8:CLCU8S5I5.0=>MW'2T/'J?;[UG&06\H"@ M2$TLF*9OBQ(Y34*7MIF.3H8<((P1]X*S9SU'@N;GE$PB81,(F$3")A$PB81,(F$3" M)A%&7FJ_:17#;EK*/U>X8QO&7?+]ZOW:JOK+4XG0`$?AG:XXUS^0Z%C1EQNP`?>96K%-TAE/^J?U+.M,9.HRGU2-?(BW>Q]: M@F3Q`QB&,@Z:1;5!PB8R9CD,*:J8E$2B(#T^`YR[#FOL3O:'E6*P=%F%D70#G7XN[BVGQ=;&[)OR M_ICFO7O1ASD#L$2:::VK"W"O45AW8%*9&FK54#]V43&$>T)K!_,;[0QN]?!= M=_\`,>',F_&:(L<\_;,)5B]$-_=/+?L\1_0?#\,+Z>.Y_:]_Z[!<:.3,.A]D M[JO2=ZXQ7Y1N'^DZ%>GB;\HT[*@'P.!YNOM5#=3E[D.B61V\5M_EEN4I#\'! MEEG_`,3?0>T?[$A^_P`4_;M^#7#\6G_2/TA?=+F9'5HHDWCQ^Y,:(41'NW-S?PR/Z1E9;U]R]GY<3IWG??SNWT_CV_M M=?X_'._RK_B/=?\`B'_K6&#]S%_="DU<;E6*!7W=JN$LA!U]BYB6;N3E`ZS:E#(`0"3GQT'']QRC:0:30T76=I(R1S8VEH);#$^:0@N+1\L4;WXSDAN!DD M`W/FPN.K0;7ZG/+W+ZR;6!@K?8*KP=TE:P!E`D6E7L^UU?9T>[Z>0>#AVN!'B'#)P?N)!!!!((*^@>Z'MI MR7VBYMN.!\L%<[BFYN7P2>K!(UP!:^*0M87-/5I#F,>Q[7QR,9(QS16-K;.Q M1ON5=9&B+!&/(6?BHV;AY M%$6\A$R[%K)1CYN80,*#Q@]26:ND1,4!$IR&+U#^&=..22)[9(GEL@/0@D$? M<1U"II`(P1T6OV%X[\%;KM_<&L*#K)+4&U]7J4R4O3S0]AMO&R;?A=ZZC.0% M@:S6A[90Y"?*1J<$7)W74Z2Y"E5(9)1$ZNU4Y[L;-^_IW;)T]BH&=S+#63M[ M9&]S2T3"3I\#@`@_>";GN_;;D&AX9POW`NU&#C6_-IM:2,NR'TYC!-'*.UH8 M_N'[)$64Z`HG#O\FY#H>-:RTUE_8W8*T1E/[,23R-B87D-<\,# MG@N(#B!DAI/1<77M^YLV2@5'9%+=\3.1%2N%8BK17W"Y=N<69N0C)9LD]:I/ M4?\`]K(YG-HM5>[<)"""7C$S$$&Y1$$O-&YP[9H)QZD3RQQ:[J',=CN8\=' MM(<.A"^-FYNW#5%HHE'W?Q/VY7;-LU_(Q5%4U=;M1[<@;%(P3%&0GV[,1NU( MNR8,6CE,Z/?0":CP3`DD07!DD%-.Z=%6V&IUT?(H3-==(UGJ,EBP8V]V'GM> MP=WY6X>1W$`D9RNMQW@?)N4<8YQRW4TFR:KCT->6W\WSB.S*86.C:!\_:X%\ MG4=D;7/ZAKL7T7G?QZCQ!*]N-LZ><%[L''YT\?-[ZLAVQECJE2#[YV_74;0G MQ#%0,85&DJY2*4INT8!*<"];^6-L_K5$%@?_`$9X)2?]ADA>/Q:"J3Z\8_-D M?>"/TXPKJTSS'XV[]=V=EK#;5)L#FLVMQ4^[;VJLK?>-9%E'/D)RH"QF7@6. MLR!)($D'B'4IG**R)BE42.4*Q6E?:L[BFVK,VS0G]&=KF$%C^T.&1\`X'Y2< M9P?)7OEG`>0\,UG"=QN8H_X9R#6-O4Y&.+FOB,CXG,<2UN)HWL_:1C/:U\;L MD/:3E+<6U:SH_65QVQKT:)&9FDH)FE(2QF17#=L<6+)=TR3P M*I1$H#TZCT`=;:;&OJ-?:V5H.->%O<[M&3C('09&?'S6'@7"MQ[C&O+1AI&>T]<9P.HOB&F(NQ0\38(-^VE82=C6,Q#R M;)0%F,.CDC<6/8X?!S7`M(^!!6.)G=="@-R4K1 M,M(+M+]L"HVBXU9NHBF6.D653<,4Y*-([,N"HS:S1RN\0;E2,"C2.=J"8O=` M!M&7;4X=I4T\CR+L\3WL'P(81D9_M8)KU;+@3ZD;[+7F.0MQCT0YK(GO+AVRSP-#3WY&6N6N] MP>OTYTB*!XR"DY]I*O&LO9'*[IL$76FB4.J+MX`*`U*(**%!(JBA,&VW%'2P MUK&P>6023-C[O@TN!()Z9(ZOMY[:/9WCEOLAKJV'W"@Q711(QE*9*VN?IJJ M\8Y*Y,NN^AIF!`'B1T4RII/6QB'4[2H)*?\4\:_\`V%?_`+9BH5C]Q/\` MW#^HK->D]P4_?NJZ7N&@FDC5&]Q1I6'+,LRQ\J@FB]=1SMK(LTUW22#MF_9* MI'!-55,3$ZD.8H@8:?J=I5W.NJ;2EW?33-RWN $$9/4$$>)'D2KU[B<#W MWMAS7D/`N3B'^.ZV81R^D\OC)+&R-]=,97<]M>TJFK$;%/&_/6<(\F4T99Z=9(C`DDHV28M.@*'7?NT$@+T M.8Y(N[6GK[.MJV7D26I3&SIT[@TN^8_#.`T>.7.`^.1[XM[>\EYEH^<<@T5= MDE+C]%ENT"[$GHNF9$3$P`EYC#G32=6AD,4CRJ7F+>HHH+(.+!68RTPDLQ!)RX,XA)1F_50164!(YG3%R3N^R MF4Y^;3VM.]:V=*!Q^IJ2-9(#YN8'M(ZG+2"0"<=6N&.F3=^3^WW).)YK>X".:%W=EQ:V]+C:8JC5&U7: M=%P6$IUT&EN\DWNEX[K0S^(W[<-:+N/:WU)Y&Q,[G8.&]S MADX.!UPL-(4CC9RJH-6V-8M3:NVM5M@5F+GXU78NN:A:W"T7+1J?=LI1K88N M5[AZT;*BU8#YF]\;BTN8X@=T;L=T;P,/86N'0A1I MM?&O@[KS:NJ=01-(G]'WCAHT7FKV%5=S<2@&H[Y2V;=_\ MGGD5VC(S)9@Y:QZZ:Q>R1-%7;L\^V%?8ZW5["\)[%MLIC]>.*<.]+M+VDRM> M[N(?W#'7HX]P.,]/2>VV_P"0<*YMS[456/T7'IJ++O:YPDC&P=8C@E#0.TQ" M2N8Y"7`M=+#AKFEY9E/VY;YJ)3CJ?FGM1)(%$U&U*.ZAU;M.]:=NZ`V;;7&F:0MVN))Q M$3XQD*XKO*2/4;RJX).HTKB50(HU5("RJ)S'[GFZW9\*W8O&G8V-=U>S)`\. M9#/A\;NTY(?7/:?$$-R00>T'(5XYQ[>\J]O).+LY##`6;C24MK5?&YQ:^K>B M$L75S!B1GS1RMP0V1C@USV]KW75?.:%]T9592\&;3-_H%\T7 MM&FQ:DW)Q\(Q,Z;*;)I6RU$G4U*H-D10K*QCJ&Z&*GU3!3QN_P"!:;6S[5W( MH75XRP.:Z.9DGSR-C!`['1X!<'._:Y[<]H<>BQ^WW!^1^YG+=;PKC%1K]];C ML.B:YW:UWTU::T]O<`2"Z.%X9D!O<1WN8W+A=R'/#0#9%-6XI[GU<*B*2_>; M2XX;^I4*-\2\O*1"-6(N[L*+U*X-S1I'*D>LW26%D] M:KI]X18!#CRT]C#N':*75V6[+Z46`TQN^:'O,9>W'4M:X8WW1O$QKERCT4[LW9'M?:[(]/X#GF6">N[LGA> MQWDX$']*JX(/4'(5BZ3W70^0.OV&RMA^Q(-RLI1C)5V8>0LBSD MF`++F9+]^S[U,IC=5&RJ2H?94+G(U.VI[JDR_1>3`YSF]1@@M<6D$?#J,CS! M!^*O/N)[>K2 MO[N#=-%T9!URR[#>N(R"LM]J&NV\FDD@=K'35UD@BHAY+JKN6Q64*@Z$!=.` M[?ATNJ@E[!3"#9[6GJ(8+%YY;#),R('X!TAPTNZC#<^)^`ZJ.!^WO)?:2)==95^D6:PIN694HQ:)OQ9L856+>D75,Z50-`JE#\5]P;0A/'M MQ:N5X"UY,@EI>CZHD86CM!]9IC(+NX!V>T@`UW9-[AM6:ZOVSK&C(.*]KFE6 MF]SS>)005@>T^8<,C_P!W MP6OR+0;7BF_W/&=Y5,.YU]J2O,P_U9(GECP#\1D'M<.CA@CH0K-V-NRAZKL^ MIZI8/5;&\Q-#2'NC87SR`EH;!#,_)+0UV6LZ2HRQ'0-V4;9% MYW!KFNN'Q;9H^RP5:O$=(-T6XD4LU;9V6"F(PR+IR+J$DFZZ[9-50$5!=L') M.[[!"'4YE+;4[]S:48''ZFI(UL@(Q^=H>UPZG+2"0"<'+7#&`";URCV[Y)Q' MC?`N6;6*,Z/D=.:Q3D8XNR*]A]>:*3+6]LT;FLDWTIH7=_;RI=RU_(W1UIF=M5?H\+6D8"3M4C4S-7RB<:RBDU7CEE)KLU(7K[@MONF9ZW6K3^J+1?XHT%?+)K6B MSUVA#(^'-#6Z8J\7(62*,WZ!W!H^9<+(B3H'9['3_9DKRKMF&]F7,@-?EX*, M(4JGBBS%=D)TRQA$G="@=E::Z#8I``W:`Q5>UU#H)>GQ(M4?[.'(RLZA9J-(QHIEB+IJF:D;)5X]^U!65>OU+)3;A3)2'G"BDBBFHFT M6)\'8$)AO[R38\SYOKK,(9+5V5AL;AX2Q1V)8.X?,3W-DA>UXP`/D/\`6P/M MWN?[3T.$<0]K^7:/:.LT-QJ:AN1/SZM+8R:^EL71.Q&QGH6*E^M8J.[GN<#. MP_N>YTN^==9+>.-\YK\\FYA$MC[.XZ:W7F6(B$C$--@.>[>MY0VFRP_4Z?>WVQ/_=RNI:'96F1R=#^SD?$UDG3)8X@8)!63^/&Q)78 M^KH9[:RMVVQZJX?:^VQ%MQZ$BMGTM4(:W)))BDB8D=*/40DHXW8`KB+?-ER= M4U2&'H:2])?U\3[.!?C)CF`^$L?RO_`GYF^;'-(Z$*F^ZO%:7$^9["OI"Y_$ MKK67M9([QDU]L>K5).3F2-A,$XR2RQ#-&[#F.`A?L%"QU'EMM3D[5JW(W,FE M*K2M?[+J=96A6]FE]/6&AV&]V-W"*3\W!Q,G8:K:T824"-6<)G=1Z"A6_5RH MD1:JW1/6Y+L>05Z[I?I(XXY6,[0]T#HW2.+>YS07,?Z;^PD9:#V_,0#^@^+2 MZG>^QG"O9S=;>+7NY%=MW=?9L"5U>+:078*<#9A!#-+'!9K&W7^H:QPCG>PR MXA8]T<^K;:(QQJ6S76-55>0Z^NIFT,%T2'16=1BM:F7.S8C.ML6XSF(P.>#YCL)'C]B_,.CTUR+G.GX];8([[=M%7>"00V M06&Q.!+<@@.R"1D$>&5#3B"U7TQ-5G4DHH@C7MQ:-U-MW7AD$02CBW6FZTH^ MN=T55@X.*0F[#2(KL^V1%,JBHR<@H`=E$_9JW&&NU4M?6R$""U3AFB\O49%' M%.P'[FQ2`8R>]Y^!7Z`]^)H_<'7[?G5-KG;70KO9.9/I+6PN7]39>T9\ M72WJ4C^XM;]/583F1N;XYRZ_9;=HNK=0R+H(YGL[(ZJN?Y;^46."\DYGSNI#ZL^FT#[(CSALK?XAKH9(I.A!CDCF>QS2" MUP/:X%I(.;^/^RWVU-80TY86:43?81S)T?:-?3,!@KVSJ6]5K]VC$OL)">-4 MF&9W4I(>IQ((GB.=N28K$N8*1< M`N!\)-C0W?);9KM!/ROLZ^_<@9@YFLQ56$'N:&2 MUYAKKH<3^2A6JBR+U]HS:4/'+H*"BHWDYRES,-&N.^*:WATG;2M[G3=`V*;U8QC'[*?Y MS@>&&S>JWIT&`,#X]3W6-CD_&_;+W-<'R37M6-==ER'_`./U)^E:)'@`B676 MC7SD29X.>`>W&'*S7,QMG=>I*Y4Y$L3>Z5I'?FV-G>5^;7"19/T.O_$L%'!1^'P'G53/QK8\CTNMOQ#'=+K;6OY$+PB'PGA' MH30O_P!W,V)REKJ#949M_6U4V'%M5XXM@CS_`#2$>=?F%9LL8Z<0]LJC:6A[>K3XL<"6O8?]9CPYI^T%?# M>><0N<#Y=N^*W9FRFK*/3F;^2Q7D:V6M9C\61B`"!"GRM:38;#C^]M[>A=E@AL79:TKHWN80[N#JSB6D9`>Y\8SX.F;C M'5?I;F#8^:>UFBX&[+]WJ.,4-W08>H?"V&6'<0L:0<2&M'6OD@@>CKI^X.=V M8OWDSP=XOU34W>T#6CG6CF1V)HRD,8[4U\V-JJ$,C?\`=^M*"I%EKE`N%9K! M$'36;%!(RC7L,C'[Y(4E"@H%SY5R3=6M-)7MV_7;)9JM/JLCD+BZU",%TC7. MPXG#NN""0[HOBGL5#'#[BP7&?(:NFWEGN&?D^FTFQL>H`/ZT8B[VX!/JJ?7%A@(O8>JUF]J*7>[#B7N>R201\IU,=F;P=VWZKY-=L0YQ!S)- M9J&^03WMBO0]V2[N.$N0NM.4E:W%,7R)W=5MP67CEJ?7F[(QE?=&QY9N6@DM MA;$8S;%H?6-TH"!9J*K$'(.`%NQ[E>T4*]> M7U^SU&2'N]$.],9_-T)<"5]7]F)Z[?;"/B=[8_35^6[K::D3//; M%%.[6T'43-X`P&[+`)W.($3`)A@QC,YX2Z\Y3P\18(RB<0MRUZ9C8^7CIJN[ MFVWI]66AY)JU>,Y6&BY'2^ZHUUXUF<5D$%I9ND<'!"FX30G!!'4-/GCK@?DK84-IJ;]W5[*IZ6QK3/BEC=EKX MY(W%CV.!!PYK@6D?`C"@/Q'W-M[CK&1[ZT<6=ASVNN4\]#VN@NM6W334\[<; MYW M+^`@4K$7YOJ-.98VQ6(#T.-??LRP2QN:,5;-61G:R&5C,];[Y*TZYV3CI7MD MT7'/>SD6NFDK[*IQNIZ$S1\\=AW)-"YICZ$A_I1S$.`P`#U!(S M4^-'._C]6=3U_76VMFNJ5;M4*J:J?R&S:3L77;F?BZ@V3;4JX32-ZJ5>=UR5 MO%%)'2:[*239.TGCLZ8(]D414]\8T&_EHV-::9FN:Z;Z60L>R3N+&1OC>"QS M@_U()(I"6Y`+R,_*<:?O;7U1YC%S/2]K./A]5//%;JX^`I[&O= MJ1YZNCA8_P#KK"5PY/<9I?DE(HLQ1Z]] M7UG.C>"R&2.=KW.RWHP"5LAS_5C+AX!?:N!O.[]H>.>UL-D.M\GI;XU(R?DD MOUK>ILTXV]>EB9VMGJ0$#YGW&1'Y9'XF7^X;8&KO]OOF0^KTA'2R#WCAN*#, MX8N6\@U42F:5+PDBW*LV5.EW_A)`Y0Z&ZD,(#_$,^C:1YJ;G6V)"8S%*V3)Z M8[#WAW7X`C*_)NHI?Q'<:K6F$R&>U%$6?%W?(UG;\#DYQXA6%P':_DQ6:OQW MD&@Q<5/Z@U_OC4I%.\3(O#6&KU:/W#5"D5$3'F*7M!W\T>&$>THA;&IC=I4% MC9\MX:W^%5Z^C>WMC?5CL0_W7,8)V?WF2GO=YB9OQROU'_F`\8YMR^W3]?61[G1 MU;J<_ M`4YJ@W^)321MM(G6Y_MHR4!)F,F!OBFY;BDY1,H@LDH>PZK8,V=**R&%DWY9 M&'\T<@_/&X>;3^!&'#+2"?C?N#PRSP3E%[1OLMLZTXFIVF=8KM*4DUK<+AT, M<\>'8_-&\/BD#98WL;`^K)(ZYV6IR0;JEBHJ>Y7;CT+ME8R1S,5Z%:;@XJU" MF9YP0!(S7J^[J_'HLG)BBDV969Z54Z9%#G)3JX%&^=ZT]L;]E/7F\O3>\LC< MX_#LG:T-/@&ROR0"2/TQN7RVT0/66$Q?C+^S'_/^T^0)7P_V#:&> M\OMU?YS6Y(HW'!Y]Q)S:7'"6(DSD-; MVN;O&OR_[I.>TGMFS3UNJ3N,3.)!40HD^\DZHX(F400+#ME#C_Q28FQ:)WT< MVQT4F`^"1TD?^M!,]SV$?]&XOA./#L:3^8+H^[5?^9=;POW:HN,E7;T8:=[X MF';ZRO#5LMD(S@W(6U]DPN.7FU*UH_8O`P[S`H]@NVZ=.*TID@_V'0-&[^VS MKIFN8$@D;CK'>?"*X,*Z#D2F!HE=6<6X@EU>@]AK)JYR^3U)[>UU9J,#KT-. MS-$/-\5B@\-S\/4`,9/D\J^^PW(]7QWV]Y^SD-AT7%=IR32ZR^X#/IU=AI^7 M57S]O3N-1\C+C&YZR5V*;VN[W7]GT6I[#JJZJ]?N,#'3\8+A,4'B"$@W(L9C M(M3"*C*5CEA,W=-S]%&[E(Z9P`Q1#+;1N0;"G6O5CF"5@<,]#U'@1\"/`CQ! M!!\%^=.5\:VG#>2;SBNZC#=I0LR02=I[F$L<1WQN\'QR##XWCY7QN:]I((*U MZ<7E#Z]V'1K&3PY:[RL'?;!^*JG*"D\>WG7]\FO&%Z@ M\)\E:@)#$(IW%)X\32O4YQCT-E]0#Y^K'8GF8[[3)'))W?UOV;>F`>W]3^\K M6\IXKR34GO.UX3_!7LP,M%"YIM3K;,/098RG=I5/2/6(_5SD.#G,]647*]NV MD]?46!?(MG#"?Y'<7&CY!TBFX2<-HOD%KFS&:F;K=45TGIX$J*I3E,445#_# M+!R1K9*5.%X!8^]4!!ZY`LQ/QC[>W!^PE?&O9"6:GRGDNSK2/9:J\2Y$YCFD MM+72:2_7[@X=06"8O:00>]K>JI_$"?=-=30ND[0W?1VS..$-6-.WME(D6!27 M+58%K$U38L0X6,<9.K;,KT:G*LG)3'["BB[540_&KAFYQL/<332QR\/Y;8L;6F^,C$7U, MSI;-&5HQZ=G7SR.K2QD#+6QS,!AFBMW9UCV/5MR,H@U`HDD9>/9)G((I)G)R=D)X>0 MWMW2#OK-?7J2`MZ/+.^YZ[&$=?FB?D`?F>U@(Z`CZA[=;.L/:+B'MQM[X@TG M+]QR*H]SG$01V'5^,G569P<,Q!L:O:^1W6"K/8>UP#WM=(=YP]X+[`C&%Y<< M9.,LVSEHU"RQEW1U!KAN_5BI5%.9),L+6U@&TJU;2398%E%DW!`624-VQ$IC M`/T^MRO>BO'+6Y#:^DV@ MG=#)$6?M&S,>6.C+<9[P\%I;X]W1:]^*?%#546VT5#RQ]OTM/D/Q8UUN*O/] M5<@=]Z8/"[6KE0J"&X8][%:NV34XUX6P-+K"2+-)\T60$8URBL50B+=,M!X/ MNK^D9K:_IUWP[+7P6,25X)?VT4,,_67+]ZQK7M=GYA#8AO1R#+AB>N6!K>Y9@8SF; M<-3UVPB:+#)Y)+1?&R]N*K?:EQPVFZ5L&S=-UQ2+V#K_CM::G+.71J_O* M0KM/I;ZP1XJOU$I$[%W,2:QD09JJJ-JB_P#@-;EFQWO?;AU[+;*LQ+8Y7-BD MJUWL?^:$.].R6`Y[`V*:5_<"PA_WVNR7D_L5P?VD`[]W;T=K?ZQCNBLEK6Y=+/0I0AKG2,[9%P3Y6>\_MM:=$`*VUALEV<]@ MK$V#(!C),?I=[0`22T8!.`J+I[DG8]%W>]ZAO/%3E%2JW:INS[DR<+/$VLV5IX5/PZ(+:^KTT6OW= M_CT&\I/J2--FN[NDC9A[R)X09HHB'12D28(#1'.P`D-=CJ\^E_GS@/%?=..- MSM[3,6FW`Z%SIH82=7>?@DGZRC"ZL]Q)+K&NED?\TPSC_D_R$UAN&\P%0DJU MR-HWR_0'(=S&R-DXA\EP?U[9LM+:63U+:8YJEK!R@Y:0S^.D'`R*1O"M7R;9 MFJY0WW"-US2Q"Y]8\QT%::/YVB:B*^ZEV$#R&'Y)HA%$1D@A[B6.+6X ME7K_`/<7XK6.DU&>N.W:M0K%+UV,=6.$M#2QU=O!VHK1!.SU=-[98B/:N9"N MSG?M%4B+**E,@;KU`HCE@T>KW.\T^NVU37.?'/$UQ#,.[78P]I`)'-(< M`000>J^,^XG&?Y#YSRKA\TQ['[:`.S7G!;\KF3P&.9CFGM=9VXT+M:E2$E'FJ2'WCT'>W<8SGG#D MM#E8A*R1"4CW";0SA\Q5*J9-P=0:/3U&YU.[M[>QJ;+*-V_+3>]T3P!/$_L@ M:26XSW^K!CQ]1S!XN*_3/,HX>8>T?'N!P2M_F'B_&J.\JQ`M)?3N19W#6_'U M&QFAL<=Q_P`+#9.`(F@;GHF9B)YDE)0E/9:S-)5M<+&!"UE392M/+KHLK*N)IFW;IC*_P`YXZ2;%$7!RICYP4RL MH6.S0E2CV\I8'OR]@ZGJM66Z_AG;KO)NZV>(IU99=TR;N5B_,K)/-&W>&*"* M/>]XJCV\I%/?!R#=J_ M:^*8.DU.[7236)VNRRCGS)LG)4;[^)$==M M..\)5GG@U.Y4+XWL6N4BF9?LB*?5,YE?M_Z>SU$"+2C^WGKBT07[7O"+<>OH MR8FMMZ:KT[O>S6V=9'8R9V3*;=3U)8&<1:"AB'1L+%H=` M_7M`I7>0032;#>[[7Q/=L(=WLI&M;CND@EV<[Y82#@.+H^K1GI*UI:?/]=W= M_JOYXG]L.77ZT/"MQQ+CE:2:P'>E3VE/B=*OK=BU[`Y\3(;CNRP\-(?1FG;* MSP[-B6T]C4S;^M./%RUU/Q]FJ5\Y`:!E86;8JB*8-6%N8W!1!XU.0KMA*))0 M9FKAFX(BY9NC"FN0ATSDS!L;U39T-':HS-DK37:Q:X>0>']1X@_+@M."T]"` M00J'POB?(.!\O]U>/\LU:SB^ZBEA>.O<^L^J"QP/:^,F82,E87QRQ@.C MN3$`U2H.X+0QCW`LDG^ MMK14XV&7EU6QA:5V=>'US1Z<[P#C,3V M,87D?+%(XN/:T8GV^EO>YO"M_P"T-ES;/(*D3+O'P]T;91/%.XW=77>]O>67 MZ]FQ:95;(/5O4X&Q,,L[^^Z])G8S^T>7L@F9E(1#G;]"@DQ(=%\RE&A>+VAK M`+PIR@=LX8/F=N(F4`$Y3E3$W42F`,V=263;#D[QAT1M1M\P1])7=GR((?\` MH7#]Q&V=9PSV(JO$D5YFANS'(+'QN_F+>-5AEDG#Z-E=11.I!=3%$AK,B=P*UHT_:"/T4XMT M9)^6N*1RZ!5T4USH<"Q.-)K.1:*8R-@CIS257'J#"(_@B+621[279]L5R6N0W%?:5S"]UB, M.A-]MN.4QR.C;)*S8NC4-@Z@J55:K!4+]KME5Y_5UL9E(L^U_L"I1S=.'>M3 MHK=EW$K=T>/DVG>"WDHIPNV4[2:HY8[VH;=UE:LT^E<@#'0O'C'(P#M(\Q_5 M>,XA7Q/BGN1+Q;GF]W4T?U_&-M)8@V-9V0R[1M2.,K'`CY91D3UY>T/ M@LLBE9AS%A")VPVWF'`:Y$!LSL"^U[7*;`@2DO;`Y#CR(MDW/N+Y-6W25HZ4V6N9;HS\DTMFE>BE9^SEALUJ M[)&/CRUWJC\I:YHN_8*D)QZWTPW:\.-ULK< M>C*\C(:"WNB=(X`?NPYP`"X7%F['W4]LK7MU7;]7S706!;U$1DB$\U&;U/XE MKZC']LEB1LQAO05(7OD/^-?#`YSGE5#4]8J^QVW+ZI65DUL-0N6]K##R[$5C MBTE828TKIY!8^(^\+5YON=SQ*;V'WNHL/J[[7\:@EB?@=TYT<#]ZN%Z1M/CEK^(R[*".031ZK:5XM MC9,3&M8)(*\U6*"WKQ(T_-ZL$4DCJQ1DR,RN9/6DX*+EDN\I&ST&!(N2;BJ`)BHD[3#Q#9$P67?:Z2S7%^@T# M=50Y\#O,XR8G=1F.7'8X9Z9#A\S0OA?M'S2EH]O)Q'ETKW^U^^DAK[2'.!'& M7=L>PARUX9;%=_;EW:^!Y]*:0&Q=>[#K&W^0]"V%4))M)5V1XHR,U%J- ME4U%T/OGLNMC(1TP0ASF92L.[IH-%FQRIK-G:3E)4O>)B5/4I7:^SWE*[5D# MH':TN&/]>5N0[R+2S!'0@AP/4=+)RGBNXX'[5N`]\?3YW8=X]/8>Z/M$QT;6V^:UI;]5+H98SAW9GU+$.J ML1=I+`YU:O=!DQ7B#HN/IFAP>WN.VTH*QE<$C-O;=Y0O%W;51)*18-'N^-BQ ME.G(MVW,8[2=A(2(C';5P54YVSUN0Z1P`B8%\ZJG#L]'L89\^G:LVSD>(!L2 MAC@1X.:UK"#GHX`@]`LON#R;8\$]UN%[+4EAN:'1<=8&N!,;W,TU&2U#(UPP MZ&::6Q%(PM`DA>YKVDN<3BR9VT^OFMJ;JW87<@YIQ6E(?;C:\) MWEK7SEXFCB-K1V:]FA+,P!HM49K,U*2.4-E+FQ2]KFRQ/?G+?M6EJ39ZWR=U M]&R#VTT="-J^UJ_!1JTI(;&T0^L+)S9FH1#59%Q,V?5Z3AU8($$BK/!,1ZQ; M)J&D3)GZ^ZKR5+$'(*4;C8A`9,UHR9:Y<"\=H.7/BR9(\9=^=C0>_!^;^V&Z MH\BT^V]G.4W(H]+LG26-;/-((V4-RR![:[O5<"V*OL2V.C=+BV+!KV97-%1K MV_'45JKNQN1.WK_4Y)K-U&R<<^)_W?E&X*BA,1+NRR$:RS!>WFSNUI`^M)1I]I']8%UMX/7S#QT/7IU63G>EVO M$_:C@G%]Y3?6WM3EG)?7C=C,4K8./5GQDM)!+'U7'N:2TAP[21U-N4)U5N,V MZ[/IE9VK4=/;!JU6N^C(Q^SDQK,-=(AK:XK;NLJI/+F-DE<$'L;(T/$T3'=0,-9'(V/.?FD+1@ M8'6Y-#NO>#V[TWN!'`+W/=5=LT]Q(QT?U$M25U:75["S".U[RZ>Q=I3W.TLQ M#3;.\2R!TG&U3J%OMG@-H?7\H\7KD_(Z$TO8HJS$:H/I.G[+8U*M6J)N#)NY M,"8OH>XI@Y,B0Z15$^V@4R:9_AYUVL;LN&Z:E(\QS.IP.#\9+)0QKP\`_%K^ MN.F1D=`5FYMSN7@_^9WW,Y12KMMZN+D^V@DKEQ9':U[[-BM+5>YO7LEJDQAQ M#BUW;(0YS>MK4S<`;HV#Q').D)#;1ICC:8[EH(LWD5*4?:,%J-"`L;%>*E"! M)DJYW%W45BW@@9M(,GC-PDJUKU=I_%;O&1,.S81&;UX\$&.5L(:X$'KV M9D)8[P)CJ3,JA3>4:+*)E99D:CHU]\-. MW&_:0X.'#62UA/Q;%@_?BV523K$BZ46U'?);P"1Z? M:>R29D3QDXX_:N1S2U=TG#/\`+_-2L/K[.'57+L;F$L?' M)_'MG"R8.&"V5KZ>`X'O:(H^HPU0&G>*O#/656Y9ZEMO'WCJ>]:YH]_V5HZU M6'55-A+_`&[5TKKN;M\;&FMJC-M9-A$U5;(V5BG"Z;M;N8QA''=@5P4538V< MMWVEU/(^-/Y%:]"O6E=68^:3#J[HG.#6ASR'^BX/C);U$89W8))/TIG'/_4/ MF7LA[M:[2GLV^XH5=RZLUKHX-K#L(:[YGB-G;5.R@?5MLCE:!):EL^CW1AK& M["MC:;O57"H%4XX\M(BQP3]J\C+#2[C$[1X9-;/2+9!RC9E+ MP%GK4F!D'31V@BL40*<"BFT@. M:]AZ$$`_'P(7WOM7[J<'QRQ/,1/<0&Y$62#G/-XS!9]V/;FUPB*O]3S[C;9+6K`D8)[6N>>^_KHH MW`.LOJ.#MA5ABUK*CQ]J=^U^X0S6PUG8.[>7(S,9*%%= M*:KT[R;W`6+*Z$%._2'[N"T(CT,19J5-,"]V=,.S[TM:"[I[D%J(/KSV[O<# M_6:ZW/C/Q_+C'Q&!X$+5]TMYMN+^YG&-IH=@^KN-7QWC'I21]##/#Q_5^IV] M,']OZA=D%DA6CM.V#CA=[0,]?=0)>N6DE,"0EKM^G;=R* MT:GK[83T@.5`F9-6KRKB/>R)`[M::AG9UDRG`Y!XDEB1FKFT5RQWW*M^G$"[ M\[X'V:_IR'K\Q["6N=X&1CB1G(7U6CIJ-OGVK]VN.:;Z;C.^XCR:^Z.+)K5= MK5T6X-ZBP]H]*,6(V3Q0'YF5+4#8WEO:X27Y.5M:+94??=9C)AW>-&VR$F'` M5F/DI6):&1`B@=K.]R"`QLJ M;FO&\VZ19V%TVAIL"K-UTA[HQY-2CB10AOYJ*C`Q#@0P&* M/B*U6O\`(-=;J3-EK_PZ4MQT.ZXC[.\UX_R'62T= MT.::Z.:&5O9('U-=M>CFGKB,7`6D?*YLPY[Y&M)/:%L;'6S^['M M[K.2Z>`3\^XW5-;9Q-E89[&IK1Q-U^QC@<&R2FG%WT;I@,WI5J]*>5D;/5E- M+T;JRG;FX::;@+DU<.VDY3HN]1,W%OW,3.5ZRV$DC.1]TI<]%JMG\'+,3V!5 M:/=ME`,"*H!VCIG,!\>HUU7:\6U<-II+7Q"1K@2US7.RX21N&"TCN):X'P/Q M!Z[ON1S3?^W_`/F`Y_L^/S-CGK7Y*5YC+(*-CG:%".F7$>+2!:Y.*ZO0W_6A:GNB6BHV2F$Y#C]*O7Y9 MYQ9(:)[;M[':XFY-.>2?%174B&J;Y7L]PJXSJ;YK=?-4Y#'EIA?F6KY'[-7'131[&"6SJ8I)(XBS=QL9Z+:\L MN&LDOPQNI.A+F-M2&LS/J,B5=U#(1]AWWR4LD4];2\:LQT3#1TPP0>$72$Y54WI?MF*!0+EUCV3[G?3QO#HR*[0X'((],O M&".A'[3NR/$.\5S>=U;6K]L?:+47:[X+;9-S*^)[2V1KS=95>7M<`]C@ZGZ1 M8[!:Z(_*"23A6%L,?QM2WCQVF)!M%UU.E;*W%QJ3F&*D3$R%*D6MDLM\U=!S M/>_*I-?3]E<&,E'%41?,JQ(L>PD9LW,J3E13LT(V^CE>&P>E+/5[A@&,ASY( MFN\#Z+ST;D.;$YF!VMR/H6PU=KWZ]"H^;;'8T-7OS$\2RLMQNKUZ>QF MBQZD8VE=H#IRU\,NP@L]SQ-*&.R(;2BEYXNZ2B(!\,%L_5^O-9V745T50Z/: MS?:M3XE..%\B"B'BJ]8TD3QDY'G,"+V,=KI&Z&[!R;W\)-SCVIB@?V;"O!$Z M&3XLD8QN,^;7?DD;X.82/(BJ#W$;QOWF]Q;VTK?4\.W.UV%?:5`[Y+%*S:E, MG8<.[9X"18IS@%T-B*-XR.YKK2B-LL-U7OAY,H-E8:S1=@V:YV54I-E)0T_K M^_Q6C)!C8Z#.P$NW1DXZ2CG5Z363.KU3<,BI.$#KMW**YM:+9,VUSB\H;V6& MOE,K""UT<@KD.C>KKVZ^U&^ M.6"[2DW#'P789XG&.2.1M-S7!OS,E+XI6Q2PR1BO;=0+QTV;$\A(*80@=<[( MN%.I_).$?1;UW74&R\=.P%4W*E*-G9&M&E82:>Q3"=?N$#L7T01$7!T%&I%C M9MF/X'L(]W#*&49Y6,M-():!AS63Y!Q&6N+&R.([7,QW$%H*YG!93[LDV1LSHQ=NCXN M%MK[EF28CV%A@+IR$L,=*-91LE(Q=ABX[36H*"]9/6+PBK9W'`VKAF!DSD%) M9)'KT,4W:-LZB.*R_DGJL#X9;K@01D.`@AC((/0C#>W'@0/B"N'[C7=AHZ_L M>ZA:EJ[37<6@DC=&XLD@DDVNTNL>Q[2'-D[IQ,'`]S7/Q\I;@18MD][ M\7+/+K#/:XFH:9U.$HRF6:UMT1.W:C3M<>0LC+N'K>QDUQ+3[FJO/#.#J-?E M3VGO/IJ+?X9MJ\L6R]-\3Q5W,-2Y#.R:.)K'0&_%!'LHO48&R?4 MRMC>]T4@;+WDO0)Z=J;'9NND%S[GTA\ZO>L$VR:ZYK*X)$J$L>LY!F@X;"_A MMF0[?Y:HF)@%)V+9R3HHW)EFW]*::LS840?XK4[I(L9^8X^:(@$9;*T=I'P/ M:X=6A?"/:#E&LUF[L\/Y9(T>WW(_1I[`N+1].TR@P;!CG-=V2Z^5WKM=CYHO M6A=\DKE8NL-C5'<'))6\4:4+)U\G&BN`)U4'+&3:2$[M.WH/(.;AGR+>2KU@ MK;NH+-W[%XFDZ;.#BFHF0Q#`.GK[U;9[XVZ!^T;..3TC9@5CW!"MHFO\FDQCYEC\L>JNTVC`=W M5A&756:`F7OY^&(=(5',FH4?6&:3=Q-:X,UFP<_H>C6VNCA@YP/J&=Y(QUD9 MD9=(5BS;]U?:O86)H7V>=\-BKX>T]TL_'SWQ/]1@:7/_`(18-5K9>X]E*TYK M^V&FTJAZGU#K+>FB]IUO9M3@KG7KYOCEW%R:$DP9.@&+;K$/3(GMD@$CJRW*&.:1X.;V-V;1=^F&>E(#6FP)-[`OY*I16U( M^295N$4N%2OJ4&,BPE6"[^+`SHR)%$UBJ)$[FEYCOK^N=I-IO+;[\#.R:.5\ MGS8):)6M><.9+V]X>S+3G&<@@<#W?X%6TF[DYIQ;7P'VTW6*>&+U8 MX[#]?(Z-SG5[5'UOIY*UEL5@",/[#&YLCLORFLMOR=ZU/9; MF].KL]"7:52"DM(*%E=P7*?2.XF(FSH35+6EH4#3M8,G1M5TVZP M<%9$I=CMF6J,\C-3.QIY.SZGDZ@-J:)($!BG-0T^V65QU/29"PM9:/EQ*S4LKRQ33E(HDD'QU%%14GN"861HCC M#;H"SUYT2CZFM4-!67L4)2QSD['*:%K,-R8V=LZ/>:UC8:O'72=3&J[5!Q7R MYB_AFA5:VSCW9G$9\$HS]J87PUMQ(FJHAK^?EH>D'V-3%.,3%"WMCBM-QM=U M9K:MTK8D1#SBD6E(M&4T9"21!!,R:<@U<=E<``W8*RF%L*SRI3")A%YI.0LB M_]/NP\+O[.N)W^-&B?Z6U7"D^)4E\*$PB81,(F$3"*TK>]CF+)LI)7G[AI'= M=A.1\75F?C%.Y4-X+MVN+E69OL@*G1,A5?L?ZNSU`2*%7[5<8WA_V\.)K%J9 M8Z(:K8NP,N8AE.\DI65DER]2)IE[!%W9@)\.H$``$1'J(Z=-YE;2Y:> M?O?9E<PZ*(2^I)$`"R21K2UK\?U'CNZD?FP,C( M#EU-=[V;2'@.ZX5NM-#?O2:\T:6P>]S+=*I+/'-/6[@#]37D,8$<V;1 MR(B4&K(B;ZMWC.SY'%$-EKM2RB9&-#?7+;%FR^S(UK6CUYY;4DD[NIDE+Y2>YY M`J.]="ZUY&4-WKO:$2[D8)PN+I!S$RCV"G8MRJS>1;Q:)FXU5%\Q^9PDD[CW MA"F[MW'O%VRQ3I*G(.3<::AO:;J.PB+H2<@@EK@<$'M<.HRTEKO@YKBTY!(6 MK[:^YO+O:;DT'*^&7HXMDQO:YLL;)H9&A[9&B6&0%C_3FCBGB)'=%/%%+&6O M8UPS+G47S]84/Q\UC^<33>C:*D&%]0*\4>&83%8K&1,&9: M'X[NTD$D8Q]$;[I&)L_U1KPV2WUF5I+/;8?7[ MS$9F-D:UKBXNS$]9,Y)F[CI%HV?Q[]LNR?,7J"3IF]9NDCH.6CMLN11%PV<( MJ&(HF"U5G?%:B>U['L M<6N8YI!:YK@06N:0"UP(((!!RL4Z7T;KW0-;F:EK1A(QE?FK5)VY2/D9B0F@ M8O9)I&QQ(Z,7DUG#EG!147#M6C)KVS$;-D")E^R`9SM5J*6E@EK4&.;`^0OP M7%V"0!@$Y(:`T!H^``"NWN%[DNG6O+C#WBJR$7*/8=^PF(=\T M?`W.Y8JIF=0\F9DF1XT4[2+A,H=0`Q2F+&ST]';?2&Y&2Z"5LC""6D.:0<9' MBTX'<#T(_!3P7W*Y9[=?S$WC-R-D.UH2T[+)(V2L?%*QS.X->"&RQ][C%*W# MF.)P<$@YASJ*A+#U,T/K/7VRMA;6J$$>$M6T6L.WN)6KYT$(^+5*550!5%0Y^75T]"E?O;&K#V6;`;WX)[26EQR&^`) M+B7$?F/4]*\)WVR%C2:9\KJO[PC2PU:QL5(^6BGH'!-=$XE.FJBLB=)RR? M-%R%6;N43IKMER$52.10A3!MVZE:_6FJ6X@^O(,.!^/^D$>((P0<$$$*N\;Y M)N^([S6\CXYL9*NZJ2!\4C,9!'0@@@M>QP):^-X!K+75;U)0 MJOKBH%D2URHQA(N,-,2;N9EETP45<+NY.5?**NG[]Z[74654./VE#CT``Z`' MC7T8-;3KT:H=Z$3<#N)WYSR?<\MWIB.VO3&23THVQ1 M`X#0V.-@#6,8T-:UH'1H&23DFV;]HG6NR;QK38]H@S*W34TR>9J$^P=+1SY/ MO2&[R(E56HD-,5\SL$W7@E^TB5V@FJ4`,41'7N:>A?MT+UB'-NL_N8X'!_NG M'YFYP>T],@%=CC'N5R_B/'.7\2TVQ`X]O*XBM0O:)&'!Z2QAV?2G#>Z/U68> M8GN820>F8,ZBH2P]K'0^LM.SNQ)_7D",`YV=-,IZR,D7;A6)0=L4794FT!&K M'.W@(D[V2>/!9M@(V*[>KJ$(3O!#.7K]/K]7->FHP]CK#PYPR<9&>C1X-&2Y MW:.G*:SE6S^JBTU=\,#RUHEN]@19I2NS:2?;%LZ7CI6*D&JA7$9.P,NS.D^AI MZ'>$*LU=('*HDH4/XE$Q1S;'75-K3EHW8^Z!_D2"".H@7)WNYOXY#LWM=LK]J6Q*6@-:99Y'22$- M'1H+W'`'0#HK)<:4UVXW+&;\^2]QLV,I$IKWYVU7.V3D:U*2,=*`WF&B71*2 MW]SVQ_B/=PZ;8QWO1<`XQV(XWQ]T3CUC;(U^96MZ/>YQ<0>QD8` M)R>UK&-:T9.`%=?<'W(Y+[F;#4;/DYJ_5TJ7TK/0@CKM_;?W/YG[3\C@Y/PK:?3[!F`YKV-E@E:'->ULT,@,<@9(QDL9 M([HY8V2QN;(QKAF;.JOGZP\QT/K*+W9(\@XR!&.V=,TE]0IJ59.W"#"9AI"2 MJ\FN[DH/[`.C-&J:)SF333`G+9I]?'MG[J.'MV#HC&X@D!S M26$DM\"[Y&CN\<``G`&+[9]S.87?;NI[6W-GZO#J^Q9=AC>UKGQ2LCL1ALV#_%SO]'/IB61\C6ASWEV0[36*_=JU8*=;(EI.UBU0TE7K#"OR"HREH689 MK,)./=$`Q3"@[9KG(;H(&`#?`0'H.;UBO!;KS5;,8?7D86N:?`M<,$'[PJKI M=SM..[?5[_27I*VYI6(YX)F'#XI8G!\;VGS:YH(R".G4$*V-3ZOJ^F-?U[6M M-&7-7*T62!BK/2[N>F7"LO,2$](NI.8?G4>R+MU*2BRAU53"[T(\X[G%SOF<7$EQZDDDG)78YQS+<^X/*=KR_D`@&VN&/O$,388FB* M)D,;8XF`,C:V.-C0UH`&.BH6Q]#:RVI:= M#Z,XC>^,31EK_3>]A):XA9BSJ*@K"=.X]ZKU_M*Y[>IT`:OVN_1#:)LK:.>+ MMZVX,C)+2SN6:5LA@BXZ;FGRI5'[E`A#/%$RJ*`*HJ'/R:NDUU+8VMG5A[+, MS0UP!(:>O<7!O@'./5Q'YB,GKDGZ)O\`W3YKRCAG'^";_:"UI-7.Z6NZ1C76 M&YC$38G6#^TDAB8"V&-Y(B:XM9A@:UM_WND5O9--LE#M[$9&MVJ)=0\LV376 M:.0;N2="N6#YL=)W&R;%<"+M72!R+M7*9%4C%4(4P;MRI!?JST[+.Z"1I:1X M'!^((Z@CQ!'4$`CJ%5^-YIZM>QP+9(WC+) M(W@LDCGMSEK0QIFLROFE+6CHUI>]Q#1T`Z#P5CVC0>L+=MB@[LF()7 M\Q=)0DYHGCC8V4.[&%N8SD(H0Z:A"J) MJ%,0Y#E`Q#D,`E,0Y3`)3%,4>@@/P$,ZA`(((Z*@--811(VM,G2JB4!7FC:/)X=@W M[+=MVC%2*1/LD+RM7IJ&G%INOB+(YI.\MR2`<`8:#^5H`Z-'0?#`Z*_\^]SN M7^YDG'[',;S+-S74A5CE$;&22,$CY#)8>T`SSN<\]\S\R28!>7.RX_?>&CJ! MR$H;O7>QF3]Q".'\?*-GL-(*P\]$2,US2/BUPZC(RT^;20>A*Q^W'N/RCVLY-!RO MB=B)NQ;$^-S)6"6&6.08+98G?*\-<&RLSU9+''(TAS&D958LF\:Q9QS0@IM6 M#5NR;$,8QS$;M42((D$YQ$YQ*FF`=1$1'_;G18QL;&L:/E``'W!4JS8EMV;% MN=V9Y7N>XXQESB23@=!U/@L5*Z*UJKN=EOTL(=OLIG5W]34E&SUTBPD6#X6" M9'\G#E4^7O)^/8L?!MWXD!T1BL=N)S)`F4G..GH':LW/HXOB,LR"<$''4M\" MX`=H=X]I+QDK'QR,#HW`@@C((/0@CX@CQ"I=2W:H6JUZC8?#=A MD;)'(QQ:]CV$.8]CA@M3SDJZ[5L]DEEW98UBDFF@U1,X'N'R;W-WL/(^63PR[9E2&OW1Q,A#F0M[0YS(PU MOJ/)<^1P`[GN<[`SAA]9[XBH**V-!'DONQ/QUDKLFP?.HF:AI)@\:.U2 ML91BHDY(PETV96[YL83(.VPB0Y1$"F+YVFGU^XCACO0]WIO#FD$M!'0_!9>`^Y?,/;2[LKO$]D(?K*LE>>-[&RPRQO8YH[XW@M+XBXOAD&' MQ2`.:1EP.8/=.J\,N=%[&Q MJZBC6&#2 M>XEV,=QP3U5[Y%[D\NY5Q/AO"]YL&S:/0B<5!V-:]K9_2!9)(T!TK8Q"UL'J M=QA87,80PX%ZW6DU38M9DZ==X)C8ZU,%;ED(F0(TL>T@@MI))/4KH\WYGNO<'E&UY?R$P?QBX8_4]&)D M,0$43(6!D3`&,:V.-@#6@`8Z`+\6O55.N%PH5_DFCMI=-;/I!Q6;)#/W$5)E MCIEKX2=J\JNU,7YS49TA$E'4I/&_CVWC8VQ7E8V2/U(G=T-B,. M_=6H27-CGC[9!')+&28Y'M=%U38=W9[/<<='%LD$;(CN1QMEQ9G3A)*5:<5$ M13V:L_4JI8HIE>^!!OXZ951^Q6Q4.7.S[I*!5HJH4 M1.?F'NCGU>DY!6[Q->"K;I;;B<)OC,9>'C[3,$A&NHU'+%X=G%)3J;TA.X8` M4RV3VIE7I7N3]QG'$8=>`UU",H)#7[6_-IFVRS.7G)R^[/NNJVS75Z`PAPD> MU-4=<8I!V7O9M\X".*9LJB=P=VIE4>%Y0[.L(4R*C*YJQ:?V7'Z>L]9>,+1/ MS=MVMH6:1;=V_FH`M`45;*-_#-ITIE4R`Q!`ZXL#KU3*^-?Y7[ M%;UUE;K_`$VB1<`-+0,3O&Q'+EVIE0>Q+5):]1G*[54Z M7;[BCJV,>-YN5*81,(O-)R%D7__4[L/"[^SKB=_C1HG^EM5PI/B5)?"A,(F$3"*.W(*P M6IBYTE3:O=Y36P;6W`M1I^]0#"FR%BK\+':>V[LI$8$FP:];J<@^F;#KUA&G M4>Q3\/"O52(D3<'271*1\5@=`-U^!%$OAC6MFZYXH<>Z*XI%6 M8N*MJFH1#EO)V>>KLB#AK%(E<+/X,==.C1;QVL)E54C**'*O=D]<]Z_/=AJ[T5G62;&7T9 M(GMDB=$TAK/3>TEKHPUH#.TEO:`&],*37C]D?A2D>H,]^F>=5?+T\?LC\*4C MU!GOTSPBIT7.;0?ME5W-%I\:HG(S#(K=QL&>%11O&R[Z.:/R]=7I_P`B5:M2 M.DOA\$UB_$W\1(JCX_9'X4I'J#/?IGA$\?LC\*4CU!GOTSPBIRLYM!.78QQ: M+3U&KJ.E'JTH78,]X9FX8.8=!LP5#\KQ`5Y).2543^T'V6I_@/\`$I%4?'[( M_"E(]09[],\(GC]D?A2D>H,]^F>$5.E)S:#!LDNVHM/DE%)&'9&;M]@SP*)M MY*78QSM^;IJ]3^1%-71W2OP^*:)OB7^($51\?LC\*4CU!GOTSPB>/V1^%*1Z M@SWZ9X1/'[(_"E(]09[],\(J=#SFT)*(BY%W1:?%.G\N8MUL&>%S&N'39 M)=9@X$=7I"*[-104S_9+]HH_`/X815'Q^R/PI2/4&>_3/")X_9'X4I'J#/?I MGA%3F,YM!TYF$%J+3V:<;(I,FCA78,\*H,]^F>$5.5G-H)R[&.+1:>HU= M1TH]6E"[!GO#,W#!S#H-F"H?E>("O))R2JB?V@^RU/\``?XE(JCX_9'X4I'J M#/?IGA$\?LC\*4CU!GOTSPBI,_8]E0D%-31*139`\1$R4H1@AL*?*N]-'LUG M96B)@U>J(*N12[!1`IOB;^`_PPBJWC]D?A2D>H,]^F>$3Q^R/PI2/4&>_3/" M)X_9'X4I'J#/?IGA%3H>&>.'[F80-3C4E%/M#]ET3X!_$ MQ%4?'[(_"E(]09[],\(GC]D?A2D>H,]^F>$5.?3FT&KF'01HM/>)R4BJR=N$ MM@SP)Q3=.(E)$K]UTU>?J@HZ8)-0^)?YCDGQ_P!@D51\?LC\*4CU!GOTSPB> M/V1^%*1Z@SWZ9X14Z8G-H1L1*2+2BT^5=,(Y\];1;78,\#F2<-6RJZ+!N(:O M5$%WBB8)D^R;[1@^`_PPBJ/C]D?A2D>H,]^F>$3Q^R/PI2/4&>_3/")X_9'X M4I'J#/?IGA%3HN-EWT_3/")X_9'X4I'J#/?IGA%3DIS:"DN^ MCC46GIM6L=%O490VP9[PSQP_ZCR2`KG#I\2)B'4O\`J`B_?A+A\X&Q?E]K7[P#&!"C._?* M4^<##E=&?%B1D_RN\:,85Z85@0[?=`J(G[/:^.$5M05!"K=G[LZ2TA7.P^^9 MD^12ORCLR7>/5?F!?E^HV_9?=[).3=Z'\SM.%!Z]3FZD7QFZ[*L4V]J0TAJ* M8L5)83\A43(3ZPS;!V]3%IE4ASNYP]G=&BZ[$1YG-E52504L+@S1FB*TXHBNN6[@K4$'":;I4[=9!805+.45S/J12Y29BK%)U"KR-@@F#R*A)U]`13N9AH MR12%"0C8J3<-%'L>P?HCV%D43D35+\#`(9"+E,ZM6(\K(K"N0+$L:_\`FL<5 MG$1[8K"3&(5K_P`Q9`BW(#5_\A7.Q[XG94\&PB81,(O-)R%D7 M_]7NP\+O[.N)W^-&B?Z6U7"D^)4E\*$PB81,(K)F["I"F#H8`$"*O(((MD46S9 M%)NW;I)H((()D21012(":2**28%(FDF0H%*4H```'0,(OKA$PB81,(F$3")A M$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F M$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81>:3D+(O_];N MP\+O[.N)W^-&B?Z6U7"D^)4E\*$PB81,(F$3"+`7)V,G9?2MG8P3";ETCS%` M<6^#K3:1?6*P:M8[%J;_`'%7(*-AS%EY:8L.J&TTR;,VG5R\67*BD!E%"@)2 M/%4/BI$GB->6%&-K&BHK7T9(0SR?C(B_VJ3:TJK7 M*:BV*:BBU;I,A9@E98ZG8;(Q35RHNHBB0ZI"D>*RQK77U?U1K^G:VJGS$:[2 M*]&5N)5F)%Q+S#EI&-B-RO)>5=F,YDI5Z<@K.5S]!56.8W0.O0"A7OA$PB81 M,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB8101V_5]U0&]+OL'2T?:[=; MK!QIG8"J,[/.O/RMJUM)?]?,(PL/&R*\?26,PSC%9"=7:*+-7]A,V%LN]3;) MMC,BGX*\>#<%=:OQ_1KE]K-\JTY#[>Y'H-V>S)E*Q760K[OD-M"4K,[-3R2R MY9P\Q`OVZR4@!A2DD3%=H"=NNB:]C^JJ/=N1'[F M4/:MP35?F;2ZK5:U'U#IW7[:<:PJ$O*MMMZ8O+V M4,][2D@_CX5)W'G)V7;M9U3#5++CUOWF7<>+?(#7]4NCW5O(^]76^Q&KJUI25MMWC=.RFRZ/7 M]-UJ4LL)K:U4=P$[J=&2L[Q.4L%'?$+*F=(S3IG&+-"%&!U'Q6SO@G.3\OJ7 M8+*4>OI>O4_E%RPH6MIR2>*R#J2UM3.0>P8&M-"/5P[UU'5$S1>`8J")Q481 M*)NVIU[PTJ"IHX4)A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB8 M1,(F$3")A$PB81>:3D+(O__1[;O$CEOQ3K?%/C)7;%R;X]P%@@./>EX6=@IK M=&N(J9A9F*UQ6V,G$RT8^LB#V.DXYZ@=%=!8A%452&(CP MZ^K'C1Z[:M\U83!\D]Z/#KZL>-'KMJWS5A,'R3WH\.OJQXT>NVK?-6$P?)/> MCPZ^K'C1Z[:M\U83!\D]Z/#KZL>-'KMJWS5A,'R7X5YK<-4$E%U^6W&5%%%, MZJRRN^=5II)))E$ZBBBA[6!")D(`B(B(``!U'"8/DB7-;AJNDFNARUXRK(K) MD5162WSJM1)5)0H'3434):Q(=,Y!`0$!$!`>H83!\E^_>CPZ^K'C1Z[:M\U8 M3!\D]Z/#KZL>-'KMJWS5A,'R3WH\.OJQXT>NVK?-6$P?)/>CPZ^K'C1Z[:M\ MU83!\D]Z/#KZL>-'KMJWS5A,'R3WH\.OJQXT>NVK?-6$P?)/>CPZ^K'C1Z[: MM\U83!\D]Z/#KZL>-'KMJWS5A,'R3WH\.OJQXT>NVK?-6$P?)/>CPZ^K'C1Z M[:M\U83!\D]Z/#KZL>-'KMJWS5A,'R3WH\.OJQXT>NVK?-6$P?)/>CPZ^K'C M1Z[:M\U83!\D]Z/#KZL>-'KMJWS5A,'R3WH\.OJQXT>NVK?-6$P?)/>CPZ^K M'C1Z[:M\U83!\D]Z/#KZL>-'KMJWS5A,'R3WH\.OJQXT>NVK?-6$P?)/>CPZ M^K'C1Z[:M\U83!\D]Z/#KZL>-'KMJWS5A,'R7Q5YL\,D3MTUN7'&))1VL9NT M35WWJI,[IP5NN[,@W*:U@998K5JJJ)2]3`FF8W3H41`HP?)?;WH\.OJQXT>N MVK?-6%.#Y)[T>'7U8\:/7;5OFK"8/DGO1X=?5CQH]=M6^:L)@^2I$7RPX-PC MF=>PO);BC$/+1,!8;,[B]R:A8.;%/EB(F`+.3J[2QI*R\P6!@6+('+@5%@:, MD$>UW:*92DP5Q+=RAX&[`K,W2KYR(XC7:FV6/7B;'4K=MO3=DK-@BG(`5S&S M<#,V![%2L>X*'0Z*Z2B9P_B`X3JJI%\O>%$)&QT+"\H>+41#Q#%I%Q,3%[KU M,PC8R-8-TVC&.CF+2S)-63%DU2(FBBF0J::90*4```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`$X?N0AQBXOMN(>LI\K7=G*R)D&%M5CGADI2D\?TU3Q]M>J^ M'5*JU<[/>$/7VP*%,FXC0EQ`2J))B/M@RCEP.QUM8P$R:(.G5.3:FKC[L=Z=-%G'N'"@K/^HGC!RB[ M*.>$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3"+SV/W\OWBK]8_W! MM64KB[=?EU/_`&^=D-['&34>[4=0EVY(0SL$+A(2:#-PV2F*S4F!%:KX4YA* ML569+WAV[X"AE:WIU^*A=WSA)RSU_P`X>+NH>3>N%$D8;9=7;/I>`!XD]>4N MY,3&C;G2)15(""+^K61JX:B0B81,(F$3")A$ MPB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$ M3"+_T^_QA$PB81,(F$3"+5-S<_Y0GWAOGN\_Y;ON)_+I?N?R$3 M")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F$3"+15<_P#_`#Q?>BK>+_Y, M/COOO+?>[Q'L?\7_`.$;IXG[Q]Y_._\`$/A^\\5_Z;W?7^;V<]?/]J+9MQ,] MF'Y9R/L5]L'Y.??"4^;>TS\J?RS^_P#\J@OG7S'\GO\`NM]\/DGRSQ7>_P#& M^%\+WG\ONL@Y^/BBD_D(F$3")A$PB81,(F$3")A$PB81,(F$3")A$PB81,(F <$3")A$PB81,(F$3")A$PB81,(F$3")A$PB__V3\_ ` end GRAPHIC 14 g312438g32u15.jpg GRAPHIC begin 644 g312438g32u15.jpg M_]C_X``02D9)1@`!`@$`8`!@``#_[0]D4&AO=&]S:&]P(#,N,``X0DE-`^T` M`````!``8`````$``0!@`````0`!.$))300-```````$````'CA"24T$&0`` M````!````!XX0DE-`_,```````D```````````$`.$))300*```````!```X M0DE-)Q````````H``0`````````".$))30/U``````!(`"]F9@`!`&QF9@`& M```````!`"]F9@`!`*&9F@`&```````!`#(````!`%H````&```````!`#4` M```!`"T````&```````!.$))30/X``````!P``#_____________________ M________`^@`````_____________________________P/H`````/______ M______________________\#Z`````#_____________________________ M`^@``#A"24T$"```````$`````$```)````"0``````X0DE-!!X```````0` M````.$))300:``````!M````!@``````````````9@```)0````&`&<`,P`R M`'4`,0`U`````0`````````````````````````!``````````````"4```` M9@`````````````````````````````````````````````X0DE-!!$````` M``$!`#A"24T$%```````!`````(X0DE-!`P`````#,<````!````<````$T` M``%0``!E$```#*L`&``!_]C_X``02D9)1@`!`@$`2`!(``#_[@`.061O8F4` M9(`````!_]L`A``,"`@("0@,"0D,$0L*"Q$5#PP,#Q48$Q,5$Q,8$0P,#`P, M#!$,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,`0T+"PT.#1`.#A`4#@X. M%!0.#@X.%!$,#`P,#!$1#`P,#`P,$0P,#`P,#`P,#`P,#`P,#`P,#`P,#`P, M#`P,#`S_P``1"`!-`'`#`2(``A$!`Q$!_]T`!``'_\0!/P```04!`0$!`0$` M`````````P`!`@0%!@<("0H+`0`!!0$!`0$!`0`````````!``(#!`4&!P@) M"@L0``$$`0,"!`(%!P8(!0,,,P$``A$#!"$2,05!46$3(G&!,@84D:&Q0B,D M%5+!8C,T)E\K.$P]-U MX_-&)Y2DA;25Q-3D]*6UQ=7E]59F=H:6IK;&UN;V-T=79W>'EZ>WQ]?G]Q$` M`@(!`@0$`P0%!@<'!@4U`0`"$0,A,1($05%A<2(3!3*!D12AL4(CP5+1\#,D M8N%R@I)#4Q5C+RLX3#TW7C\T:4 MI(6TE<34Y/2EM<75Y?569G:&EJ:VQM;F]B7I[?'_]H`#`,!``(1 M`Q$`/P#U5))))2DDDDE*4++:J]OJ/:S<0UNX@23H&ME4>M=2?@TL90W?DWG9 M4.8_E1^=]+VH>%T.IKAD]0/VO,,$NL]S6G]UC?H^U1'(3/@@.(CYB=(PO_NE MID;X0+K?L&KC9]?2,O,Q,HO-9L]6@P7$A^KE<9]8NDNC=::YT!>QP'^=MVJG M]:,72G,;V/I6?`^ZO_I*]T2AHZ10Q[00\%[FD2#O(<7I)T'S18XF8D8"J&HL-VF^F]F^FQMC#^G8M])))2KE))))*?__0]522224I))))3S_UBN]#J.#>1N%4O+?$!S)6 M[3;7=4VVIP?6\2UPX(67]8>G6Y=++Z&[[:)E@Y\'S7ZJKY3Q>2_W<>]Z^3T&1?5C4OON=MK8)<5B?5A MY?;FV$1ZCFOV^&XV.C\5C9>=EYKVG(>;#/LK`@`G]RMOYW_372=`Z?9AXSGW M#;=>0YS/W6@0QI_E*.&4YL\3$$0QWO\`UA2V,S.8H:1MU$DDE=9E))))*?_1 M]527`=%O^O/7:LC(Q.KU4UT7OH++:6$RT-?(V5_1VV*QF=0^OGU<:,WJ+J.K M]/;`O])OIO8)^G[6U[?Z_P"FK_TGI?SB2GMTEA]5ZT+?JED]9Z5;M)QG6X]A M`):X?O,?N;OK=['L5CZL9>3F]`P9TG`S# MNNJ'J?Z1OM=_G-^E_;6']<^K]2Z;D]&9@W^BW+RVU9`VM=N875C9^D:[;]+\ MQ1^NO4^L8F9TC$Z7DC%?GW/I>XL:\232RISM[7?0]3\Q"48R%2`D/%!`.A%M MY_U5QR?T>18T>!#7?P:DSZK8P/Z2^QP\&AK?X.6,[JWUK^KW5<&CKF13U#`S M[!0+JZ_3W;^<]KO=ZGZ/>NU47W7#=\`_%;[4.S4Q.EX.'K14`_O8? M<[_/-S6[MKVNB_$8\&^IM0: MY[(,L:[T_:BEZ=)Y6RGU/\)?_@TE M.?T`W'_%AU3U9VCU_2G]W:PO_P#!_676?4W_`,2_3?\`B1^4JU3T/`IZ+^Q& M-/V,TNH<)]Q#P1:]SO\`26.>^S^NN5Z>/KM]5ZCTRG`9UC!83]FN8\5N`)WP M[Z;F\_S;JOI_S=_II*3_`.,$$YOU>`$DY[(']JI1_P`8/VC]I?5_[+M.3]I= M]G#_`*'J;L?TO4_D;_IJ6'TCZR=>ZWB]6^L%3,'$Z>?4Q<)K@]Q?RTN@N_.# M76/?_H_393_A%>^M?2>HY_5N@Y&'3ZM6%E>IDNW-;L9OH=NBQS7/]M;_`.;2 M4\\7=3SOK=@8?UOL&,:'"W"JI:!1;8"'5-;=N<[WV,9]/]S[/^B]7]+Z';;7 M34^ZUP976TO>X\!K1NH_5!N#]A+.JY!;CYL]0ZX;39U8&BNME;G[,8B-N]OY^QM+?\`K"WO\6?5FW=/OZ0ZSU'8 M+R['<1!=183!V_2]EN__`(OU*ZUU'3>EXW3^GX^#6UKFXU;:]Q`EQ'TWG^58 M_P!ZPNJ]&ZEC?6S`Z[TFCU:K&_9^I5M31TBDWYF0WT6@.:S:U^EMFZUS&^VK?L_X1)3Q&']:.AO M^LO4NL=6+WU7,.+A5-K-@]`^Q[W1]#U6,^C_`,/8M/\`Q;=5QVV9O1*K3916 M]V1@/<"'&HG98US7?0C8N`6-+Z6#U3`,V.]]SI_ MXQ97UCZ+U`=:Z7U[HU`NOQ7^EETME.W MMI9[W^*IOV_L._9MV_:SMXV1]J;MX_P7_?$7++CT;,]N.WRQG;F_F_SGLK]Z MC,LG]:_;TTE_.>O_`)RVY>/R_P#.;?3LV[(MOIM]-YH+8NIG8[<)V>XN_25_ MG^]1/4W#J?V7:/LW\T;O^'+?6%/_`&S_`--#PM@S\@]/VNQ('J@:5^O'_:=S M-WYG]*_]*>HLP_8_L3MQN_:GJF2!9M^U;_;I/V3Z?_@"<3E```)E$DR_K1C\ ML(G]+BXDW.J&X)OR[.KU#/R:,MF/4^BEII=:;,B0V6N:S9N:]G[R&[JN395A M/K]+'^UUNL>;YANWTX:V'5_2]1/?Z/[8I^V>F!]E?(?!;NWU?1]1+JIC-PX% M+O9=`O.VO_`_G;7^Y*7N5.5RJQ4:-U<%'BU.N^S8=EWL.$TFNPY+RVQ[)VP& M/MW5>[^0IOR;OMYQ6!L>@;6N,SOW;!.OT%4RO5-?3S7Z;GZ7T7L9_P!;4\;UCU9YR]HO-`]-EHXW_+&=_P`7C_\`H]`'H>MUG[1_,^SU(YV^@S="`$P! M5WQS^;]T>YP?]PKU:;[G?_"X4U-O6+FUW[**Z["'>B[?O##XVCV>KM_X-,_- MRG=2=B5&JL5[';+=V^UAUMLI(R!ISDS34)296AL;6ASAXN#H1 M``$"!0($`P0$"`H*`P````$"`P`1!`4&(1(Q01,'82(447$R%8$C%@B1H4)2 M8G(SL[&"LL)S-'0U=3;!T9*BTL,DM$87=C='_]H`#`,!``(1`Q$`/P"_QI"# M2$&D(-(0:0@TA!I"/4NB1R@LW5[G;72414[2JK=7H5()#]M=`Z:Z*G2;X'(8 MIRC\0$!#?5#B$N(6VJ>U0(,B09'30@@@^(((Y&(4`I)2>!'N_&-1]$*UX@WD M^&,NYYP%DRT)M4H^=>6N%G[5+D:D>JMU&[1X]+_C]SJI!+A<2MQ4IRD"25'BM!0H>`,,68Y.QK*+`WCP.(/\!C=R'(H0BB9RJ)J%* MZL\:4QB^)*(8M8178-5P`_AR&(76/X M;;^]&27FUY1EE[1;+,VYO%"EN1<01(H<;!!2"#H7W''&U25TP0(M]FI\TN59 M2W2[5HIJ)*MP8"9%22."D\0"#IO4I23KM!`B,7N:XQ"+N%-RQ'MNEK:H\]6L M"J9``@3D$3Q$2Y<&Z0$SF2A5C(E^8?R<=]@;?-K#[SF,>EO%FRRG:DU5MEAT MCAU6M6R?%;9*1X,\N>+]SK7TJRBNS:?(ZG8O]9.J2?$I,OR."V MC.\CN=%?65KMK%$I?D4I!ZA<;2C4?HE9D9@RX&[_5#`'_``4L]#$TGQTSU>Z*_0%19&"L4@JZ@7JIMS`@Z<0:+%)- MIW#"(@O'2&^^X@(AOKH&H[$72PSJ>W.?5]!4)F0T\LJ:4?8HM!("9_G,N^Z> ML;!#R!Q'YTAY5CV[= MJDCBDG2&60DU$V.(C9^!D6DM"S#-"0C)-BL1PT>LG2954'""Q!$ITU"&`?V0 M^P=AUTO15M)J/K!I"#2$&D(-(0:0C__T;_&D(-(0:0@TA!I"-3OMF"E46Z7(R15 MRU*IV.S"B<#B18(&'>2HI'!,2J"50&NP@40'8?A\=6F_W,62Q7J\E`4*2D>> MD>?2;4N6FNNWE'DN%5Z*@K:V4^BRM4*<.CQT8U51(T#XE1\28Q2E.FD8O)WW>L<3E%^R#N M!D!-37LO@-E>HZ[DUN.GEN0DI#?).\D`%*"-3=O+<+I7W#(+A]94(7Y2=?K% M34I?O2);?9N)T($.*UV/&Y(CCRQQ@.6<$7FN-6XN)N.8#::V0A.MJS-82GCJXG< MV/U^7&,;RVU_-K#7TR4S?2GJ(]NY&H`\5":?XT0P]KBN=J!RW;CDW\PEZS7& MR@_N/*&4G)OB%_X7SMN)M]_V@;;?'?2WW6K;LH,NNZD_M'F64GV=-*UJ'T]5 M$_<(POM932I[O6$?$M"!_%"E'^4(:[KK"-L1QG/N((3-V,;'295JBH_59N'U M7D#@4%H>SM6ZIHA^@L.QDTQ7'M+E`0!5LHH01`#;AA>?X?0YOC%QLE6TDU!0 M5,+/%M](/36#R$_*L:;D%23QBRY!9V+Y:ZFA=0"X4DH/-*P/*1].A]H)$02] ML;(TK*5_(&,Y)THX85A:*L5;35/UF9MIM60;S;-+?YB-"O6J"Q"`(E!5PJ/P M$WQT1]V'(ZNJM^08S4NE5/2J;>9!_)#I6'4CV)W)2H#AN6H\]<#[87)UVGN% ML<5-MHI6CP"IA0]TP#[R8:GKJN-K0:0@TA!I"#2$&D(__]*_QI"#2$&D(-(0 M:0CD7('^0;-O^B+)/\39K6(=P?\`(6;_`.$5G_;N19\A_N"^?V-[]VJ%%^WM MGV!QG;I['EQ?MHF`R`I'KQ,R]5!!E&V=@59NBV>KJ&*BV:S;5P"?>./21=%( MHB!3F,'(GW>L_H,9N]?CMY?2S;[@4%MQ1DE#Z)@)43HE+J3+<=`I*!H%$C4/ M;S(*>V5E1;JUP(IZ@@I4=`E8F)$\`%`RGR('MAZ.NZHWM!I"#2$&D(C=R@SY M`8'QM+2B[Y$;E-L7T;1H0BA?'/9A5'L%DQ1`#&)%P1ERN'*AND@@4J0&[BJ8 M#K;NCG]!@6-5=4M\?.7VU(I6P?,IPB6^7YC4PM9,AH$`[E)!QK*<@I[#;7G5 M.#UKB2EI/,JE+=^JFOI$&TBR,(F82\>H/P6CY)J)54C?:`&Z3`4Y3%#\MZ^PW= MDHK&%D3_`"5I_)<0>:%IDI)\9&1!`Y9N=MJK37/T%6B3S9EX$2?5-3MB&X[]O>O-4VXQC-A:I)B0=>5UECQ2@) M0A)\%=4>!C&[CW/K74J;ME`AF?Y2SO5[PD`)!]^X0N.Y7>VY#GW=HNU@DK+/ M/0*5>2DUQ65!),3"DV;I@!$&;-#K'MH(D313`1Z2AKG"\WR[Y%<';I>[@[4U MZ^*UF9D."0."4CDE("1R`C6];75=QJ%U5=4*=J%<2HS^@<@!R`D!R$.B]N?# M$U0J!8,B65FM'R&2E(H8./H1**O42@NQ>LK\ICF^/;*`[!R9DOW:\OMRW'<=K&+C M23T22&'I>PI6>D9<)AT$G\D1J6Y=M+Q3*4JW/-U+7(3V+_`H[?IW:^P1$V=X MYYZK:ITI;#^0T@3,!#.&=5EY9AU#ML4LC$MGT><3;_#94=_N^S6I:_MQGMM6 MI%7A]Q$CQ2PXXG_;;2I!^A48D_CE_IB0]9ZD>(;4H?A2"/QQ@V^%\Q.EDV[; M$^2EUU1Z4T4:+9U%#CL(B!2%BQ$=@`1']@`WUX6\*S)U:6VL3N:G#P`I7R3_ M`+D>=-EO*U!*;34E1]C2_P#ACN%*X,\DKDLD!Z-Z28G$@*2=SD6<,FB!Q+\3 MQI%'<^?I*.X]#,P!ML([[!K.;)V+[E7E:0;%Z1@\5U*TM@>]`*G?P-GV<8OM M%@N2UJA.AZ+?YSA"9?1JO\"88W@WV\L>X]>LK)DB1)DJQ,SIN&L4HR!I3&#D M@]0&5C5SKN+`=(P!TBZ$C/'>BKK4KAY7X7S/TM8X>P>7>-\1X/QWE+QWX3Q?A%>UW.GN=H M_3OTCLA&,G\LXKJDFM"6C)F/ZW,MB(J.(B?N=G9_`2S"89#U@(DV=1SAP@/4`; MA\WQTA&^:F?,JJM-QB=D>,B)N%CO&L&=T64< M-2HLU3BH1(2`5(X[[%-LA&=<.$&B"[ITNBV:MD5'#ERX4(B@W01(919==90Q M4TD4DRB8QC"!2E`1$=M(1ROZ^8*_GIQ+_2-3_P#/.D)&#Z^8*_GIQ+_2-3_\ M\Z0D8V*LY.QM='ZL73LA4>V2;=HI(+QU9MD#.OT6"2R#=5ZJTBW[IPFT3<.D MDS*"4"`=0I1'JD8M-VB>AJW#-CHIN)>?E&,/&(*.%2H-R+/Y% M=LU2.NN&R=>;_2 M4,6R41)Q"M$-72JR"MJL]T:O$Y+U!"S)!3;D@TQ2[0)CND$`^P M!U$XB<1NX[8/M!\K*SQ"YN6I_D?C;>748TJ5[DYB2G8BI04M)!$Q^0J#9 MIU(LLA5(5V()V"NN3`$$-I]^W_#-S%^EN(/ZSJSH.,0. M,=:]FK_#-XI?HE;?ZSKQH>,#QAG&HB(J:_A>/[1DY)TQ[%1]F:(1F`"6%`\2\FX6Q12"QWL0D4XK M,ERBD8P``&$#%GE#E'P>X-[;=C]HV,QUR]X=\A\HLVK?(T92Y-G8WL.WM<2\ MDX^7G81PXE*VPKT#<:K(EKZ[.2C746"9^ZGU$6145!(#.`,XMO<9\MFSYQWP M=FQ5FC&NLJXIH=\D8QN"OAXR5LU:CI67C&PK[JG;QTFY513.(CUD(!MQ`=]4 MQ3'99!^QBF#V4DW;=A&QK1R_D'[Q9-NT9,6:)W#MVZ<*F*D@W;()F.UF]S>F0\^YHF/N1%7@:I*',NRB$JFVC9ME3L9OEP M.(LW%ZQ/49()%)$!()G+HYMA6+UU>$5RTE%^F.EJ=R'PDTF:U+KNJ%F[%Z;Z M%FV0)$=J57(M6!5E(-R*E<(I/0BYGVE=^W"!KD.\\Q2>4Q!,G4J9+M*J;E$W2)8G$ M$SA:_P"(9S=;\C6;CK[?6'&$C:[QD"5HYMXAN<'V61%>_\`&.82J::+DY?& M.\76$7DE0'@@()F$(5PVD87H*400;1K83F$RNVAB##Y]1$1__]=EWX(37_+D7\>X4ZP/\X&W`?CH.,!QB<_LU?X9O%+]$K;_ M`%G7C0\8'C#.-1$14U_"\?VX_P#5G_V@=28J5RB.WN$Y$R]B?WWAR%@7'/U; MRY68O'+JEX[\MF)?U.^=8%0CGS7RV`.'.R"I#!V=Q^4!`9Y0'". M%YMY.,Q=CJMXAQKC[%%-06;5+&E*J]"K2# MA7ONDX*HPC*!B@=N.DHN78LF!!54$-U%!$P_$1U3%,*A]]+E.''/@Y;*C!R* M;6_\C'2V'J^B50Q7B-4DV2CC)LRFF0Z9S-4:F!HPQP-NDYF&YMA#<-2(D<85 MOA&K^W^I[-DWQ8M7*/CI#9URM`2&SFH5I.X^AGZKAX*T,XAH M:$BZ[*@4?R::CX`W!4X&OI6.[?=4.J\/6[>$DV5,39-LTHB(JQ?AMOX=^XQ^E MN"OWXY&ZDQ4KE%HF;FHJMPLO8IY^WBH.`BW\U,R;P_;:1T5%M%7TB_=*;#VV M[-F@=0YON*41U$4Q3/\`;^Y*X'SQ[I>?^?7*/,./L6P5<":5PG#90M4/7I`5 M;&BXHE$;1K-^^*B["CXHC'*+TR1#D3D7B"X&!0P&&H\(J/"4>,8Y_P`'\+O> MR?6[!^5Z)>>+O*24)'6*1H=I8S-8JZ>990JSAG++1Z[N/B%J'E]@5Z5,X%,U MKRP`7MIKZ)&6*B)S)%5()@`#%WDQ48LE6KW'^`=.@GUB ME^9/&YXPCDCK.&]5R]2KU.J$(0ZABL:O2)>PV645$I!V3;-%E#&V*`"(@`Q* M(D8K"\D\QWSWW>;>*<#X#@;/`<8\3NW#F4MTG'JI*L(&4>,_7>6K4U3,+*)< MOHR,2C:U%N%1<*K``&.D=ZNDWJX1/"+&/N6\7W^M$758M(%`!P^FX6L*130BHB05G)!$0$`.6F('&%3>RE[I/' M&H<:ZKQ/Y#9!KN%+_B*1LT969W(3M"K4ZW52:LLO9VX.+7(BU@8"Q5Q_,KL% MVT@HT[K=%NJF==4S@$I(@1#!N9WO!<.>/V&;G+XZSKC;-&67]>DV&.*;B.X0 MF0!<6I\S<-HA_/SE4=R\'7(.(>&*Y=J.G":QD4Q(@FJL=-,R4)1$7\.!@2UX MYXN91S':(]Y$-L\W^*/36CU`$32=-QW&/XQM:&_4`+BRE['8)-LEU[`C?EW@)SEG&\`1?D7@N+= MSM<4CFYS3%]H+$KJ1LN.]D#`H^D4@,>2A2]"JH/TCM40+XY0V@B`8VOV7^>I MN9O&1I7;Y.A(Y[P:G&T_(AGBXGEK7`F043I>15NX8RKM>>8,SM9%;J,8TJS7 M5.!"N$@$8$0ICEQ&I^ZW[S=1XJD>R+G`7&>.F("]N(5ZHAT-:L9&:S))(.`3 M7/%R<[=58VG"NF78IV;=4-AW-IP$3P$,P_W>_P!N;_LWEK^E.4_YCI.(F84_ M=,90'LF^[%@JVTEU.QW%/.-<:5B3<6"0-)&85:=6C:KD:.EYI8A%I(:#<$8F MVF$I"'*U5;H?-\W6XB)XB+CQ3%.4IBF`Q3`!BF*("4Q1#<#%$-P$!`?@.HBF M*L?X;;^'?N,?I;@K]^.1NI,5*Y1-WW\>4X8"X3R6,8*2%G?.3P![=TO)2,L\KF5S/) M1\[D70IY0DTTQDQ>RZ4A5(>5(GN.^Z#E$^X!\VVX"G"9AIN$N/N%.-]-1 MH&"\9U+&-42.19:-J\8FU7E'9$^T61GY945YFR2W9`""\D'#ET8@`45!```( MB([%I"%@<;R5,R#*KF6*+\%)U: M4E5U!,*S\\?Y@OU?E5S]).F9Q,S')<5>PM[=.,;`TL;['USRHZ8.DWC&/RK> M'PB(A@R MBXJ+9-8Z,C(YJ@QCXZ/8H$;,F#!DV(DV9LF;9(J:2292D3(4"E````U$1$0Y MG@1QFGN5D5S3DZ=+K<@X7P/E]J);[.C&)>75-6DM.JK)29:\KVZ\L9(>IN/4 M<>L?G^.D)Q,G2$07Q%[I2J%S<&?3 ML8YHXS)ZN,,I*]MX@S!L#9H[;HJ($3%%/I0G&,O$:WY$O^%J?,QEVR MJ1`EWM%FN=KNTU+%3E'TTX$'MIE915L>3EGYG#PR8E,Z533,H)A3+LA.)F:0 MB*?*[A5QUYK5FK5/D-2E[=%TN=<6*M*Q\_.5B4C'[V/4C7Z:4K7W\>^,P?MS M$%=N8XI**((G$O4D000B150K$;2:G6*9"GD58>HUV%K$2I+R;Z:EE(V`C6T4 MP/*3,FLYDI:1.U:$%=TX44775ZCJ&,8PB*$1EXM<&..'#60R?*8"J,K5WN87 MM>?WQ22MEDLY9-U5U[0XACMD[!)2!(P&ZMQ?B8K<$P4[H`;?H)LA.,9R+X`\ M8>5V2<=94SK2Y>Z6;%:+)"G-3W&TQ=;9I,YX+&(BY^)E(&;CVDM"S<<]B)>+D$$W3"2BY)LJS?Q[U MLJ4R3AH\:+'343,`E.0P@(;#I"%.?W'/MV>GO2/TRO?I/S[U/Z:^M65O)O/_ M``/EGFO@_5?3X[RW\W[N_<[7R]6IF8F9C__2MB7#`C6"S[AS&C++>>AKM\@, MA24V=?*4NI)$<5>-:NXT&+DJ!$D$S*K#W0,FH)@^P2ZYDO.`M4&?X;C+&77_ M`.75]/5K=)KG"N;"$J1M5(`"9\TP9^$:QK+`AC(+-;$7>O\`3/MO*5-]4YH` M*9&6GCH8Z7RM,XQ#@S&C&%M]K:LX'*M!CWMCD;"^5GGL*4\RXD`G)AN9LXD$ ME$B;J@<.DY2!N4=M9+W7+F(8+C+%%>*M#-/=:5"GEO*+JF_K"OJN"16"!YIZ M$`3&D7/+-UGL5L;8K'0ANK:!65G>4^8GZ=JL)=PUX:\]1.4;[QM98?3<6]QB MG,5SRL8B,&C.IVFZO[8C!@L>5/&':)O63,&*DB*#@#"7J[@(``[=(;W_`+:L MX>ER\.8IF5;=B`T'0_4J?#4RX4%(4E.TKDNB0K> MX7`F>[;*8$IR/OE"[Z!>G[:+Q_+4;,V3[#R$F"VJA+[ MCK"ZM+5O=H;U5.9"NLVEC>I2%-[U3 MW)((`VR,R=!,\IARMPM,31ZI8[C.JBC#UB&D9R1.7;N"VCFJCI1)$HB`'<+] MOH3+]IU#``?$==F7BZTECM5QO->O;1TK*W5GGM0DJ('M)E(#F2!&YZRJ:H:2 MIK'S)EI!4?F[,`M0],>&>D;)$(DW;HA\-S#K07:C),HI\C5;\RJ%J^T5*;E1A2E*2V M=RRNG0%?#]1L<"$@)0A(YF,`Q.Y71NY&GO+BC\Q:-2S,DA.IFV)\/)M5(``` M>,;%S"E89ME'C;#7'(EIQOCZ<^L7JZ9K%GD*PJ/EM>K#J`\0Z8E6*I_TV9)( MG<24V!L1U<>\571MY3VUHKQD=5;<>?^8>H<8?6P?(RRIJ:DSG];M2)I M/Q$"4YQZ1T=(OZ)(9*F)");%_DCYM#JLBJ5W44E>V:DE)&H&NDXDE$3$N?F9;H(\I(G@T,`P$DC#&?.312,BI=%$%'Z4<*H MM$WJB`=!E0("@D^`CMK9-)65BN\]WH%53AH4X^TL-[E=,+-205A$]H41H52G M+2<9*R\\I*XKOKQY$) M/G*<8[=MGK8K=TY8%5!JNY0*(@0YR"8H#\!#2[UE8CN_B-"BJ<%$NU52E-A2 M@A2@I,E*1/:2.1(F.4*MYY.86AA+J@RJD=)3,[201(D<"1R,<%Y(861J,OBZ M8A,IYM;*Y2Y%TFD6%F&2I4D(`Y1(.RX[1PUQZSFWKMQR#-.CX\R'/-9 MFWVQY/3D6_;4B0(V&)E!3:N(]-NHT*JF"8@8BVYP$!'6P;GCJ,,[>9TW;KS< M7W3;JMU+E0^IUU"Q3+`Z:Y)*`"D*$M0J9!G&0U5N39<=OJ::LJ%J],\L*<<* ME)(:,MJM")2F)<]8TRQY>LV-N'N*[="G++7^T4/$5:KSN;6,[*O:K;78=(9: M36='.9XN@05W0BJ)@56('*JV8=:JM@[[@[3TZ$%6LW'$)\RB>)&JM>)X\X^ MU#B7(N8U)_-\AL^JY"4*1X]M45?7$?%DEQ3#K)'UDK46#>!(K\I6NX&[/R=P MH#L'W1VDJ':9+];W$R`Y"1N4^W5%"`Y+78SMVAH'@W.>W3S`JJ2()"("42D`14,D`^/NV]<[;;,236UU>,10_MN;](2 MA_:&P&EJ*9J2TIS<7ML]))$U%$_CERZFFI;0'GZ@6@+E5+:T7+:`DF4R$%4R MN7@.,H/1.-OH-XO]9;('T;]8^MO6OKA7SOTUY-Y-]-_4_3YCY5ZE_./"^'\9 MW_S7M]WY]3\DQK[!=;_V9=';^F6/\`N]':^N...YW. MGM]ON2W7U]7R]'3OOO\`#;7B[Z[?LQC^^6SY[1SGPE-RC_`-6K*GEWIKQOE,3V/!>5^*ZO4T)U=GL?E=^C??I^[?7W[R?)_P#U MIE?IO3=?I-RV[-W[9KA+7A[(KS+T7V9NO2Z6_8F4ML_C3[(UCE\\?1V.N->?-8.S+M(9>6D2GCXM&47(5`SAVM12T0J:EO(K3,E+)62=,AX-=DDZ!!(A?%%2$P@79O<^IO-QP?'6\DMJ[?:'ZE@W=06EWTS M*%IW(2&%.+<#SNWIJ;2YM2!U0B9ED^4.UM38[D6Z@UA!"NFA)$TC8 M5*5O5+:4A4A\B@]12FJP+[( M:"E;B8][%+"JNY4403*DCTJ*%3,;6M[JCM;UK#4=JG7_`+>,UK*Z1I7S*50` MH!QG=5@LMH4V2I2R4@)3)2@DF,;JQBV^@.QX+L^%Z?3 MDKU=GL?DMNO??I^_?6?Y5T/L9D_IMG0^6U,MLMO[%SA+3C[(R"Z]/Y-<^E+9 MZ9V4N'P*]D0^XOY$RAZ.PS6T^.D%Z9\BK4:.229=Q]YEY-X1))6S#3BL?4G> M\)NJ9EW/$;;E$=]:=[7Y%E/R;#+:GMRQ\LZ#*/6"X4F_I[0"]Z?;UI[9J+<] M_*39TMU5`M9IUACK$MOM5#B>A\?E4A2BL`&22%!3?LN2JVE MRKU=G:155GHPEU@JZ:MF^:7$.*&SXM"DDGPUFGT4=U=K3RB@+7F:'B<761OC M2P16-<6,996XRSZ.-)IJV*SS=LA8\]53(F3\FFW!PDN;<@]H.@QE:+&[>[KW M2M]VS2C:M5R3;'44="EPU#BD;P7GW7VT=`2^$(WI4=/(-I*Z:%==5933U=Z9 M12U(I5I98"NHHC=YUJ<2.GX`3!X::3.Y\MO[,G_RZPQ_XDU>>[G_`.8__+[= M_P`Z/;EW_C'^,4W\^.N\@?Y!LV_Z(LD_Q-FM9?W!_P`A9O\`X16?]NY%WR'^ MX+Y_8WOW:HC3M-QS1#0IUXX MRNJ&G5#Z`V?TMFBY'V:?1'4[_.9OKD%296MT:K9&<%BUFN4ZL2R,:H55RY81 M@J2=8E[&!8TL?'/4GG6D[,`JME"AMU?.3*L@KLXMM!9*NVV*EN3@:*:Y@/)8 MFHH1-;#CWDV(4')I&]2!YD*7Y9`[IA M7$$<]0K?JKOTT]=]BB^4_K<^D/J'Y1Z`[WA/SGQG=].^ M#_RG3^;ZY:G;?LQ\^Z=!Z/[7]3Y7O/HM_2V^G]7T_23V^?J;O1]/\J7U<:L_ >Z;Y9Z_:QT?F^[TLST)[)=/K;>EP\VZ?1V\Y>6/_9 ` end GRAPHIC 15 g312438g38a63.jpg GRAPHIC begin 644 g312438g38a63.jpg M_]C_X``02D9)1@`!`@$`8`!@``#_[0OB4&AO=&]S:&]P(#,N,``X0DE-`^T` M`````!``8`````$``0!@`````0`!.$))300-```````$````'CA"24T$&0`` M````!````!XX0DE-`_,```````D```````````$`.$))300*```````!```X M0DE-)Q````````H``0`````````".$))30/U``````!(`"]F9@`!`&QF9@`& M```````!`"]F9@`!`*&9F@`&```````!`#(````!`%H````&```````!`#4` M```!`"T````&```````!.$))30/X``````!P``#_____________________ M________`^@`````_____________________________P/H`````/______ M______________________\#Z`````#_____________________________ M`^@``#A"24T$"```````$`````$```)````"0``````X0DE-!!X```````0` M````.$))300:``````!M````!@`````````````!C@```DT````&`&<`,P`X M`&$`-@`S`````0`````````````````````````!``````````````)-```! MC@`````````````````````````````````````````````X0DE-!!$````` M``$!`#A"24T$%```````!`````(X0DE-!`P`````"44````!````<````$P` M``%0``!CP```"2D`&``!_]C_X``02D9)1@`!`@$`2`!(``#_[@`.061O8F4` M9(`````!_]L`A``,"`@("0@,"0D,$0L*"Q$5#PP,#Q48$Q,5$Q,8$0P,#`P, M#!$,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,`0T+"PT.#1`.#A`4#@X. M%!0.#@X.%!$,#`P,#!$1#`P,#`P,$0P,#`P,#`P,#`P,#`P,#`P,#`P,#`P, M#`P,#`S_P``1"`!,`'`#`2(``A$!`Q$!_]T`!``'_\0!/P```04!`0$!`0$` M`````````P`!`@0%!@<("0H+`0`!!0$!`0$!`0`````````!``(#!`4&!P@) M"@L0``$$`0,"!`(%!P8(!0,,,P$``A$#!"$2,05!46$3(G&!,@84D:&Q0B,D M%5+!8C,T)E\K.$P]-U MX_-&)Y2DA;25Q-3D]*6UQ=7E]59F=H:6IK;&UN;V-T=79W>'EZ>WQ]?G]Q$` M`@(!`@0$`P0%!@<'!@4U`0`"$0,A,1($05%A<2(3!3*!D12AL4(CP5+1\#,D M8N%R@I)#4Q5C+RLX3#TW7C\T:4 MI(6TE<34Y/2EM<75Y?569G:&EJ:VQM;F]B7I[?'_]H`#`,!``(1 M`Q$`/P#T^VFLN]0@AYVM+@2#`,[?:1^\G^SU^+O\]W_DD#J;7MP\BQMCVD5F M`TQ!$G(QQH;^D?IN`D[C`[_P`DE]GK M\7?Y[O\`R2EZ;O\`2._#_P`BEZ;O]([\/_(I*8_9Z_%W^>[_`,DE]GK\7?Y[ MO_)*7IN_TCOP_P#(I>F[_2._#_R*2F/V>OQ=_GN_\DE]GK\7?Y[O_)*7IN_T MCOP_\BEZ;O\`2._#_P`BDIC]GK\7?Y[O_))?9Z_%W^>[_P`DI>F[_2._#_R* M7IN_TCOP_P#(I*8_9Z_%W^>[_P`DE]GK\7?Y[O\`R2EZ;O\`2._#_P`BEZ;O M]([\/_(I*8_9Z_%W^>[_`,DH74L;38X%X(:2#O?X?UD7TW?Z1WX?^10[V.%% MGO=]!WAX?U4E/__0]'Z@_P!3`R+*[&OI-;@-NON!+7_I`[;_`"-NU4/JMU/+ MZ@.K,R-D8'4\C#HV-C]%7Z;J]^IW6?I?IHPWCHMK0T>F&6>Z2#NWV;P&'=[/ MW/>L[ZD3N^L,"?\`+>7^2A)3T^OBEKXII?X#[_\`8E+_``'W_P"Q)2^OBEKX MII?X#[_]B4O\!]_^Q)2^OBEKXII?X#[_`/8E+_`??_L24OKXI:^*:7^`^_\` MV)2_P'W_`.Q)2^OBEKXII?X#[_\`8E+_``'W_P"Q)2^OBAY$^A9K^8[\BG+_ M``'W_P"Q0R"[T+-!]!W?R^"2G__1[YKFMZ)96P/7Q\*%KY%3<;I5V,7E[VUO<71$[BYQ/[OTG+E^C.V8GUA>1/I] MT_0=X>'Q1)"'D$>A9_4=^1)3__TO2NID?8,ALB?3<8[KD. MD_\`)_UE_P#3QU+_`-MG+K^J,:<"]Q:"X5F"1)7'])`^P?64QK^V.I:_^@SD ME,G]7S^G?4CHCL&P4V>ATQKK(:X[;BRFQFVQKV?0:NI?US!9U7'Z3+SDY+;7 M,(:=@]#:;@ZP_P#&?FKB>H@?\Q^BZHJS<.[)OQ:KF/R,79]HJ:X%U?J#?3ZK?S/49[F(TCQ7$_5PN'U@^L&TPYS M>C@D@'Z=(98??/NVOXD)2%R/5LW)JZIT5]#S2,W-KIR&,^BZIV/Z[J"UWMV>HK]77+'_6/(Z2 M<6H4TX/VQM@)+B[U7X_IN]FUOT$E._(2D+G.F_6-M^#U?,S,5K?V5F9.**Z! MO+VXS!=N]X9[WMW_`,A7:.N])LZ=@]0N'V:GJ#*GU&QH@&X`TU6/;N8U[_HI M*=:0E(57[5@#,&"_97D.!-5;]H-@`#[/0;.^ST6N;ZOM]BI=-ZUA9N5GX=E( MHNZ9Z/VA[MIJ(O9Z]/I6NV/=MK_G?4JJ_2?Z1)3KR%#((]"S^H[\BJ=4S\'I M>#;GY%9?116ZU_IM:X[&B7$26HSQ39B.M8P`/K+A($P6RDI__]/U"['JO:6V M@N:X06R0".=0"JHZ)TYE5S*L>MOVA]EMH@['VVC9;=ALK]G_4(+*^B-R79 MGHD6VL]$6BFX6>G(>ZJVS;N]/U'[]B1_:_J.V[_3W")_=^?O3/\`VMO.SU8] M`1QM];?[OI>_^8_]!_\`KB2FQ1T?IIQ;6UT5AF8Y]UK=KFML=<-MEE]#G>^V MRKV7>I[U*SH?37X]&+]GJ-%!865.!+&BO^:]%F[;5Z?^#_<59_[8G]'OVZ_' MCV_3_E*_A>M!];=NAL[IY]TQN_L_024P=TG#?F59;JFNMI:X5VNW&UI?M:_9 M?OW-:]C=MBBSH^'4_(MIJKKNR2SU'AKI>VL!E;;]MC?6]-N_TO\`1J^DDIS[ M>D474.Q;FLMQW![358'O:6.^BQP?KNJK]_P#-_I%?224__]D`.$))300A``````!5`````0$````/`$$` M9`!O`&(`90`@`%``:`!O`'0`;P!S`&@`;P!P````$P!!`&0`;P!B`&4`(`!0 M`&@`;P!T`&\`-@)U+47-W>7MSB8N#DA=K:G&`HQ(B,R)"4V-=4FAUB(R!I!UAE)46%"1#.3 M5(25)UD1`0`!!`(#`0$!``,!```````!$2$Q`E$R07$2`X%AD4)2(O_:``P# M`0`"$0,1`#\`O\`,77I.3D+6O,U*9N(3I2)4M,Z=M,D3KMQB:68.%2ZN<:24 M7+G%$TJ%4NK6J0T&C64Z=.6:M,NY`UGW:XVZ#%X7,GI+U0$A MDM`Q#,U)0G4P'!D<_4]6?GE(/K;)2G*F6HM*HI)DR7NFA+)]P$$*6I0KQ*K) M0[7C4T;)OY"5G?;9AGZKLN\Y+Y;K7/:5JVM,434 M>RUS":DAEEEY%C"@9G.%3%`K3JQHEC%2$DD]1^76K,7F)QH^+&Z78N`L:U9B M\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+& MZ78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6 MK,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-' MQ8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N` ML:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F) MQH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[ M%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B M\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+& MZ78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6 MK,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-' MQ8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N` ML:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F) MQH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[ M%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B M\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+& MZ78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6 MK,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-' MQ8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N` ML:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F) MQH^+&Z78N`L:U9B\Q.-'Q8W2[%P%C6K,7F)QH^+&Z78N`L\.H7IRL3KE-.UM M?'_'N=P/)C7"?Z87%)(3HJRF6*)K);KC M481))L(UJD\]*22$D(QWWV1!*(RJO>TX`(2<;5UN^:DC))"E&N>5%6RU_4]. M)4(1A+&L;.F[6T2Q:E"::$-]/-+#=B"TELK1EC[4L+@7P_]6_P`Q=>DY.0M:\S4IFXA.E(E2TSIVTR1.N MW&)I9@X5+JYQI)1U[KR6K5D@ MLOUK]SF$YWVX+8]&R1"^:JQW>AJF5=P*-V9;A+#U;":YUMH-_'>LVR%-2N33 ME4*Y&@<6$.L9K5*9Z,:FB:>;"C=(HRF$79K.8"\V:N0F(E5:5W/R>KIBBH24*1LW55"-4E1J3U:98U-3EHU:D(K9A*%RCF4O M=^2OEIL9NE)'ID7,0K-.X:^]#!DQ&P2_"I2-E5BV#"IDJ,E/[9:DE8Q---]D M9)8?S"ZY)Z[(\=Z9]/;*_P!%:AXR2QO;K+&G;7VW0\>9"_9S`L<>9"O9[]G,"QQYD)S86:]>SW[.8%CCS(3FPLUZ]GOV_9S`L<>9"O9[ M]G,"QQYD)S86:]>SW[.8%CCS(3FPLUZ]GOV_9S`L<>9"O9[]G,"QQYD)S86:]>SW[. M8%CCS(3FPLUZ]GOV_9S`L<>9"O9[]G,"QQYD)S86:]>SW[.8%CCS(3FPLUZ]GOV_9S`L<>9" MO9[]G,"QQYD)S86:]>SW[.8%CCS(3FPLUZ]GOV_9S`L<>9"O9[]G,"QQYD)S86:]>S MW[.8%CCS(3FPLUZ]GOV_9S`L<>9" MO9[]G,"QQYD)S86:]>SW[.8%CCS(3FPLUZ]GOV M_9S`L<>9"O9[]G,"QQYD)S86:]>SW[.8%CCS(3FPLUZ]GOV_9S`L<>9"O9[]G,"QQYD)S86: M]>SW[.8%CCS(3FPLUZ]GOV_9S`L< M>9"O9[]G,"QQYD)S86:]>SW[.8%CCS(3FPLUZ] MGOV_9S`L<>9"O9[]G,"QQYD)S86:]>SW[.8%D>V]I)5"7'+*:0J5DO M6\9R=8G/K)6DJU)IJE*-*66L+4?_6O\`` M``C1ECYK6KUE\+OG%L2"PBAG=[SG=X_?O([Y?U\77,)/79#_`+TSZ>V5_HK4 M/&26-[=99T[:^U@8K1EC[ M4L+@7P__U[_````(T98^:UJ]9?"[YQ;$@L(H9W>\YW>/W[R.^7]?%US"3UV0 M_P"],^GME?Z*U#QDEC>W66=.VOM8&'-H```````````````````````````` M```````````````````````````````````````````````````````````! M&AU>^+8GJT98^U+"X%\/_]"_P```"-&6/FM:O67PN^<6Q(+"*&=WO.=WC]^\ MCOE_7Q=V5_HK4/&26-[=99T[:^U@8K1EC[4L+@7P__TK_````(T98^ M:UJ]9?"[YQ;$@L(H9W>\YW>/W[R.^7]?%US"3UV0_P"],^GME?Z*U#QDEC>W M66=.VOM8&'-H```````````````````````````````````````````````` M```````````````````````````````````````!&AU>^+8GJT98^U+"X%\/ M_]._P`POD2Z9&59.XSHJ.5QM"FD($]:HX6>BIZ^["-.L;*E9Y&RG*]8NCP7S M\M>)8F9.U)"1(Q6D,F(PHTIP6,M:C$N)>$P^K(GS-REVY2*H*;+I-]@-UV76 MK'S3;=N1=PF^M5UNX:`S2%N;OJUBK55D4TZZ9Z$]:D42*T3%>:0\65ST7FR8 MN9JN_"C4MVF-]E(ZTV3N1&(-9:="@\XH==#4"^75DJJ42IH%-MK!E5+J1RG2 MI5*\E:G$M+5C/P=3>;V:I"-6;!ARULH>[V@NI*&G4I7OD;&A.DN$^M5*E3R` MK^^EK4CC80):$D)?MA-+/4C&/V;D/XBZY)Z[(N=Z9]/;*_T5J'C)+&]NLL:= MM?:@]^HS(3GVO+ZSWO\`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```"-&6/FM:O67PN^<6Q(+"*&=WO.=W MC]^\COE_7Q=;>2[LV] MDC'*XKF*4)#IV-&C&XPL?BL`"-&6/FM:O67PN^<6Q(+"*&=WO.=WC]^\COE_ M7Q= M.5B-/O1&O">=J\8N-+Q;+.RJ]L=+&W34RBR:N_08[.+6M<3_`'XE7:)GCQ=\ M2&5*NWTJJ239$^%8A`\K2G"TD\M1U6&!60!&C+'S6M7K+X7?.+8D%A%#.[WG M.[Q^_>1WR_KXNN82>NR'_>F?3VRO]%:AXR2QO;K+.G;7VYW0X/4ZVF%WN=8G M=6BQ/LM:HVX3F4EP0``````````````````````````````````````````` M``````````````````````````````````````````1H=7OBV)ZM&6/M2PN! M?#__T+)E[Z"B\LS6ED%;V[-FF:S+8++::+D=-R%%K7B5%2@AWM/X^/YI6ULU M7L0->*4;K!60!&C+'S6M7K+X M7?.+8D%A%#.[WG.[Q^_>1WR_KXNN82>NR'_>F?3VRO\`16H>,DL;VZRSIVU] MN=T.#U.MIA=[G6)W5HL3[+6J-N$YE)<$```````````````````````````` M`````````````````````````````````````````````````````````$:' M5[XMB>K1EC[4L+@7P__1L/7$QDPS8N4\60\LYLI6T_'R_:%WIK%E8VR/VJ(T MKKYA4;\(S'67,2Q>5C#2;;MR6==*HG$55UEETS2,0EI&9Z$(U(1JLTPVY9$N MF1E63N,Z*CE<;0II"!/6J.%GHJ>ONPC3K&RI6>1LIRO6+H\%\_+7B6)F3M20 MD2,5I#)B,*-*<5(RUNLZZ%\S%5ES2W/>;BB:.6B-V436QP[X0G=0=.5%Q$2[ MMO[G/NDRZ!=[JUJL>2S:+JZG7T;BJ6L;4J-<]6I3*E6+9+S,U7?A1J6[3&^R MD=:;)W(C$&LM.A0><4.NAJ!?+JR55*)4T"FVU@RJEU(Y3I4JE>2M3B6EJQGX M.IO-[-4A&K-@PY:V4/=[074E#3J4KWR-C0G27"?6JE2IY`5_?2UJ1QL($M"2 M$OVPFEGJ1C'[-R'\1=W66-.VOMSNAP>IUAL-3 MK\EQ`Q3E+-MHU2\N-MC(4*M=[+)>M4HPM@UX4JE:A3M^9DH59Y-R,TDM2I"6 M,=R$TVYNQVX32LI):=<+9=FG5ISRTX220ISPGA/-&,TF\A"<6H__]+?_EVP;D/W MO+;?*K"QY+OU+MJ;Q?<#Z<2:[;KU6XNMHW=&)(R4NDTV5=QOVZ+NIMG3Q-RH M9AP-E0F(IC(KF3?&9:LF%2,;C&6_D5@`1HRQ\UK5ZR^%WSBV)!810SN]YSN\ M?OWD=\OZ^+KF$GKLA_WIGT]LK_16H>,DL;VZRSIVU]N=T.#U.MIA=[G6)W5H ML3[+6J-N$YE)<$`````````````````````````````````````````````` M```````````````````````````````````````$:'5[XMB>K1EC[4L+@7P_ M_].P+EHVGTK=Z!;I3:%A+@.RGJ]CRD*;SMZMY@'*RN8FC/5B>+&Z!">>6XZY;\Q6`!&C+'S6M7K+X7?.+ M8D%A%#.[WG.[Q^_>1WR_KXNN82>NR'_>F?3VRO\`16H>,DL;VZRSIVU]N=T. M#U.MIA=[G6)W5HL3[+6J-N$YE)<$```````````````````````````````` M`````````````````````````````````````````````````````$:'5[XM MB>K1EC[4L+@7P__4WA9#N.+C[QHJZKIV@>K"*V>NWC4Q4MYVPN+BK;MY**'= M>[5.W]N'0\GJ2)J&55Q[=.H[O#QMGI!].*EDXQ.4.T*T=)A)&XPL;"L`"-&6 M/FM:O67PN^<6Q(+"*&=WO.=WC]^\COE_7Q=LOA=\XMB06$4,[O><[O'[]Y'?+^OBZYA)Z[( M?]Z9]/;*_P!%:AXR2QO;K+.G;7VYW0X/4ZVF%WN=8G=6BQ/LM:HVX3F4EP0` M```````````````````````````````````````````````````````````` M````````````````````````1H=7OBV)ZM&6/M2PN!?#_]:R"_;KY66:RY=3 M1GR-N4\[#RW@M*H.U2IXXV-<#:L:AY&W(D0;;VE<;O4[QV^N.I$3BPHP2BZF MAM9?JI"35)&3U2I6A7C"-4BF+MVXK(`C1ECYK6KUE\+OG%L2"PBAG=[SG=X_ M?O([Y?U\77,)/79#_O3/I[97^BM0\9)8WMUEG3MK[<[H<'J=;3"[W.L3NK18 MGV6M4;<)S*2X(``````````````````````````````````````````````` M``````````````````````````````````````(T.KWQ;$]6C+'VI87`OA__ MU[*E\\AL>I3 MS)5-<9(BFJ9M$.5J4TE!3+)ZR6.)1VL4J1A/+3,4JE&>,-R:6,-V`K+4ZSGW M?&!G"%0=+K?KN7%G'S#ST?"S51KW7&6:[9;$EM7,88R48++ M[D1CD9:A!/)585J9&D?*UIXUS9*W,U7?A1J6[3&^RD=:;)W(C$&LM.A0><4. MNAJ!?+JR55*)4T"FVU@RJEU(Y3I4JE>2M3B6EJQGX.IO-[-4A&K-@PY:V4/= M[074E#3J4KWR-C0G27"?6JE2IY`5_?2UJ1QL($M"2$OVPFEGJ1C'[-R'\1=< MD]=D7.],^GME?Z*U#QDEC>W66-.VOMSNAP>IUAL-3K\EQ`Q3E+-MHU2\N-MC M(4*M=[+)>M4HPM@UX4JE:A3M^9DH59Y-R,TDM2I"6,=R$TVYNQVX32LI):=< M+9=FG5ISRTX220ISPGA/-&,TF\A"<6H_]#?)ES<5M6_[T9II1%?U?4GRDXN%78F MJMO\=7W66=.VOMSNAP>IUM,+O:"K>&_-.U%PF.@>4I]57TU+*VH56>L(%_C=^T6XZX;SA6`!&C+'S6M7K+X7?.+8D%A%#.[WG.[Q^_>1WR_K MXNN82>NR'_>F?3VRO]%:AXR2QO;K+.G;7VYW0X/4ZVF%WN=8G=6BQ/LM:HVX M3F7Y66$([N[`"(1"%Y%M=`7',L]WN_2Z0W4=3754Q3R)L&8GH)J M02KJ!ZM)0HKD]:O/2*EYIH220C--&&Y"$8Q%^9X3_P"?_38Y:.X1.[=J;8W6 M3DXRD)]S;>LNX1%).U:5K[MM20K4$6HGOYO*3LNHQJ##+6;O:V*]\Z+>M[6L^8M5DDI5CE"1JJ"G M0=%0PVSR[,GF.+HT(1.3RWC6[?(*P`(T98^:UJ]9?"[YQ;$@L(H9W>\YW>/W M[R.^7]?%US"3UV0_[TSZ>V5_HK4/&26-[=99T[:^W.Z'!ZG6TPN]SK$[JT6) M]EK5&W"+'X[F%C,$8V]2\/?3S(WC]%=POPDKCI.)K1EC[4L M+@7P_].WJG=W%:%$O!0O4@76R?;SC)O>Z[X3D!#OPZ$UC)5:^=V$Z]MWFNF- M0O3E(DV1<.XR04/JJ7)&%`Y.6I\)OHR0B"U\-@8(`(T98^:UJ]9?"[YQ;$@L M(H9W>\YW>/W[R.^7]?%US"3UV0_[TSZ>V5_HK4/&26-[=99T[:^W.Z'!ZG6T MPN]SK$[JT6)]EK5&W"+'X[F%C,$8V]2\/?3S(WC]%=POPD MKCI.). MIT3;Z+FHD31I-GGH\)3DJ<'-#?2RQW80XU>CXGE9MQ=R!;656/UJLB&329@R:*REE2"6<4$^!F6"K5)-R,/M%8F*31GL$` M```````````````````````````````````````````````````````````` M```````````````````1H=7OBV)ZM&6/M2PN!?#_U+_````(T98^:UJ]9?"[ MYQ;$@L(H9W>\YW>/W[R.^7]?%US"3UV0_P"],^GME?Z*U#QDEC>W66=.VOMS MNAP>IUM,+O-U@:C#CMVELN%9````````` M```````````````````````````````````````````````````````````` M```````````1H=7OBV)ZM&6/M2PN!?#_U;_`#XSB3U150E=-1%XRUE<\GF2J M:XR1%-4S:(6F8I5*,\8;DTL8;L`&J9L7'R#@T M\6YU]X74JO93QVP.6$`I!L3:)=JZ+U>U=+RQAG+4I[^C&K72DS-5WX4:ENTQOLI'6FR=R(Q!K+3H4'G%#KH:@7RZL ME52B5-`IMM8,JI=2.4Z5*I7DK4XEI:L9^#J;S>S5(1JS8,.6ME#W>T%U)0TZ ME*]\C8T)TEPGUJI4J>0%?WTM:D<;"!+0DA+]L)I9ZD8Q^SRR M7K5*,+8->%*I6H4[?F9*%6>33&G;5M]C; M(LHC<($OUP8MQF,)CI4U8U"I!]3<')`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````(T98^:UJ]9?"[YQ;$@L(H9W>\YW>/W[R.^7]? M%US"3UV0_P"],^GME?Z*U#QDEC>W66=.VOMSNAP>IUM,+O-U@:C#CMVELN%9````````````````````````````````` M```````````````````````````````````````````````1H=7OBV)ZM&6/ MM2PN!?#_U[_````(T98^:UJ]9?"[YQ;$@L(H9W>\YW>/W[R.^7]?%US"3UV0 M_P"],^GME?Z*U#QDEC>W66=.VOMSNAP>IUM,+O-U@:C#CMVELN%9`%)%S_NJ+_H#E<*%1Q3LZ8I(JXK)-*O4>;UEJ5Z:< M?,$Y*U266CO99ZDM&$T80^R$8B5=/B.5E/NL,VW3W@>)B1D4\60W[?+2D^7H MTYVXVE!14TND7:QTL5+FY#2I+*;C6-2UXQGEC#>RQA]@L,;12:-C8(`````` M```````````````````````````````````````````````````````````` M````````"-#J]\6Q/5HRQ]J6%P+X?__0O\````C1ECYK6KUE\+OG%L2"PBAG M=[SG=X_?O([Y?U\77,)/79#_`+TSZ>V5_HK4/&26-[=99T[:^W.Z'!ZG6TPN M]SK$[JT6)]EK5&W"+'X[F%C,$8V]2\/?3S(WC]%=POPDKC MI.)$=*4"M*6GOIHS_9N1K,7 M0Z_]219__P`^L\__`.)Q([78M)X+?^H!BCO][/O*D\F^A'>S30W(QYO1&'0J_;6?3!:OIEN[XW3 MQJ,.6_9OX%8````````````````````````````````````````````````` M`````````````````````````!&AU>^+8GJT98^U+"X%\/_1O\````C1ECYK M6KUE\+OG%L2"PBAG=[SG=X_?O([Y?U\77,)/79#_`+TSZ>V5_HK4/&26-[=9 M9T[:^W.Z'!ZG6TPN]SK$[JT6)]EK5&W"+'X[F%C,$8V]2\ M/?3S(WC]%=POPDKCI.)68>/;8=[-<"RU76VUJYK:(++>43*0NH M:L1KGI*Y)3250G5+UZ4\(3TZM.:6,(1@%5^9X9VLGD58G)%`5G38.[;"N^W$ M)8BWUE;M^Y$YS)J8MP)%5&*4=-IM:O2H'H$#M&MPV5_HK4/&26-[=99T[:^W.Z'!ZG6TPN M]SK$[JT6)]EK5&W"+'X[F%C,$8V]2\/?3S(WC]%=POPDKC MI.)*ZK;37#1.F4!07[>6\<3N1R*X733R6HUT%9B\Q#6XR+Y=YT]&8T7C2N1@6?K7B7/MS6-.@[F5EL<> MYI!//0WDU?DT[SS52U!#:YQT5[J.NJOFFVBJZRXE5(03"K/5G)E32@?,%R\9 M*=0Q6GEFJ32/?0]WYB; M>EYX_P![KIN9MW08&KNLZ*GVON$XB9/6IJ(3U1>!64-OGDLYI#><92K-P56; M@YJD9)MR>6:$)5J-9F*PSCAEWBV*>?GE(_3&]UEY>2?4_7?C=DNQG<6Z]ZTZ MM:/K0DI?&.F:FJ&_X#?\#P4N_P![OY-VU28F,IQ@@``````````````````` M````````````````````````````````````````````"-#J]\6Q/5HRQ]J6 M%P+X?__3O\``#7[DIS"BW:L["D,6E1W:=9[RN8==5UTQMK!Q MMD%.T+L;MRR;);U.906$LDXDDVFI,M>N?B2*F2JA3C48EZ[-A=?R8R&"4;#` M(NE!,9"XC&5A9K/,H@'DQ1*9<60K(R:313*,8T6D*RU.$C" MIO8RQJ1[14S"7GJKY2]WY3=+!U/+T7ID7.5,ZTI+@TRM-8)?EGH<"G4:4Y?@ MY/YM]-NPC_`77)/7:Z/'>F?3VRO]%:AXR2QO;K+&G;7VYW0X/4ZK&';QNK0Q M'Q9H$[-Z<4HXY60I%3OE#;A73"U.V;8DH&M&JE8U2^D4H0GWDT8S2;NY'[8# M3C,16;L#]XFY;@*C(QL*..V>JR;'-S%Z>96US1%O>5I'S&-*AH)&A3,3<-&, M8;[=W)=S[18S"6IM?Q+]U]/,C>/T5W"_"2N.LXERC,.8B/.]CIE]T4[+F$N[ M5P[*)%IN.TRA:%-D)JVOB`FZ=1@JJT85]`-%IS!7=C&,-[/&,?L&H<=J5F[T MO>;NJY)_"JZA-;M3Q`EUW+8V4VL:](*KH4DN0%K9Y)^+RA>0P9W]66633JV9>E,R>T.@6EK&]$HS35."DC":IO=[# M[8@D4K%WA+%^9&SGHKM[^$D@=HQ#C.9<[G.GWW,QNM1D)[6W<.$YGV]6O77T MML?M>G`^$C$?(&@U[?:WE*N1M:J8.ZV)"!HQGR9L.31=&4:-6K6_I2RS[^6. M]_FW/XPB+#.^8NLS:[7>YD?S*;'@@K%(Y-=KO] M=RJ.+R'JXK5O(=I:-QD56-#X/&^S]*A_B).20L8T@M))5_EA#><)O8_;+$9G M+KKUAMZ_:IK;O1_UX:JLC7+2?TO:?_M*F-[BW@?U$:+_`*2I5=,TSA:G]CYD?S*;'@@%(Y-=KO"`4CDUVN]S(_ MF4V/!`*1R:[7>YD?S*;'@@%(Y-=KO"`4CDUVN]S(_F4V/!`*1R:[7>YD?S*;'@@% M(Y-=KO"`4CDUVN]S(_F4V/!`*1R:[7>YD?S*;'@@%(Y-=KO"`4CDUVN]S(_F4V/!`*1R M:[7>YD?S*;'@@%(Y-=KO"`4CDUVN]S(_F4V/!`*1R:[7>YD?S*;'@@%(Y-=KO"`4CDUV MN]S(_F4V/!`*1R:[7>YD?S*;'@@%(Y-=KO"`4CDUVN]S(_F4V/!`*1R:[7>YD?S* M;'@@%(Y-=KO"`4CDUVN]S(_F4V/!`*1RCBYWC=6.7%D*\UF]X;IXY934J!+RAMR; M2"U:YF'\YW>/W[R.^7]?%US"3UV0_P"],^GME?Z*U#QDEC>W66=. MVOMSNAP>IUM,+O-U@:C#CMVEZ+O4_<5O! M]XK%?,-:D5(?V.KBY<[Z_P`[O+[U.'QN<'"IMD][$GP*S&8]HUV+\R-G/17;W\))`ZQB'*NOI<4_:G^YUD5UEZWLMM^+#.^86CQ7-6SP9QRM'<;#K& MA^/A"7G*\'=9AAK[E7U*X5QISZPLJ2"4,GU`Y/3=E.28P:KSQFFC"6$-V/\` M`;C6)B+)MM,;3$2J5=[^SV\P>\4R&:;4(U$U`2?)+H!*JH*2I4HZ=8VV:D:W MQ]7.'U&OPATY4GAPE6?>PFWLNY+"66'/:VTNWYS72)EO[_:2_P#N`?\`*I_U M(A"?IX7)A7,`5[N\][]__P!-_)$CCW^E?RRZ;;1KW$UN\N'D\X/615-B/TO^135. MS3ANWK5Y:_*1QAQ"][>,[5_B/R2,+1=*U]TG2],J;S1.#X&;A=_31-3;7YBM M6_@5@`````:([WVY=-]\[\GVVJY(9;6W:ULV%C;JFTK'9*73M`U2M=YMY]GW M$>,-YFKR>E&5%0,H]":>O&E"K-O=R,8_9N6(B:DS\QK2$#LPL@'3W13UQRR( M1;G9?9-MQ:<>;3&[KQXL?C MN86,P1C;U+P]]/,C>/T5W"_"2N.DXERC,.8B/.]CJ.]SC],'"[T-)GC=8&HP MX[=I>B[U/W%;P?>*Q7S#6I%2']CJXN7.^O\`.[R^]3A\;G!PG,O:Z%/[:SZ8 M+5],MW?&Z>+&'+?LV7]XO]/C.WJ;9/>Q)\"LQF/:-=B_,C9ST5V]_"20.L8A MRG,N=SG3[[F8W6HR$]K;N'"K7KKZ7%/VI_N=9%=9>M[+;?BPSOF%H\5S M:).[E]PW$7T`6U_#1$=-<0QOVV]J;_?7_4WR7_W-?+]:D%R85S5U;/,._F0;?>=U%[/K-ADG5:_F4+<+-*W3XM(D, MIO(5N%(L87WK2I(E(ZTF@RDN" M,1F+S5*$D2<:LM2O4C-4FA&6$N-HI+K^\74VN%[;<>1(-\? MU?O&G(`0`S&[SG#W`URLUI9+/Y<9ZX_4,^XVR626&\7?3.)*:?E3#=>L9;*. MIT"<],Y-"6$E6:6>:'VPAN!58UF<,<8Q]\A@/F!>%`L18BZ#DI45UY`()E":@F$*L\LL]6$:D8;V7=FC"`E5G68O+:,* MRT[2?4'S?^XF(GX2N>-Z>4WQK_6C+]R5YD<:_2H[/PC3$_3PU^69:..YQ^I] MA=Z94SQ0L#G&7;;K+J.C3@`(QY9Y?V)PDM:7O)D0YE%IL$TZDEET51+;2\ZC M,S@6R:J?3BL4QN$%%0EI52R*8C&K&GPY<.MNU[`U=UG6D]$5G$<)ZU M.M"92+P*,AE#RH]Y^I2 M['_E02L-?&S=PEJ1183$Y7(3S52*J1**1*K-)/2FJ%#Q>F9+3S4ZD):E.:>C M5A&,LT(1A_"(K#]P````````````````````````````````````"-#J]\6Q M/5HRQ]J6%P+X?__6O\````C1ECYK6KUE\+OG%L2"PBAG=[SG=X_?O([Y?U\7 M7,)/79#_`+TSZ>V5_HK4/&26-[=99T[:^W.Z'!ZG6TPN]SK$[JT6)]EK5&W" M+'X[F%C,$8V]2\/?3S(WC]%=POPDKCI.)+_3XSMZFV3WL2?`K,9CVC78 MOS(V<]%=O?PDD#K&(RVWXL,[YA:/%+J;7"]MN/(S"[X_J_>-. M0`HZ_NOO>$Q.]#3U_&]$9EUTQ*`?[=/ZK-D/N9>OV3NL(RN_5TAAIQ:=I/J# MYO\`W$Q$_"5SQO3RF^-?ZT9?N2O,CC7Z5'9^$:8GZ>&ORS+1QW./U/L+O3*F M>*%@!55UI M8N6ZF5Q:3D3;QVK+I">5(H5*K",8&9YJD\^[N0C+O;$5G)6(BLPT2]_&H9?F ML(DJE?*_5G+DLORYL.:DW6)C:N6G6Y%N#>?,"*C.Z%'(&YI>H1+%XUY*A7BV M6:K-4EFA6DWD99VVM(K5K\]HG:T*N&%WOBXG=9>Q/M2:HYNTXEUM1MYVM?-: M]N2#0OOC)9#'Q]6RMQ&[;!R0?;N=-Q;3*]W)I86<4;!)R"DHR*EW1M;(0E4/ M*N=J&:]0T8C_`'>E"62'\T8V(K-%M$3,PTZ=\2IYM&.[DR*HW=R,L<_+>3^2 M/6%J,_%AP6X<:KO;ZVQF2>+GF>R3?Y5&T%D4*,]"'!1JPK4VVM M(F:FFT3M$1JHSCF[NPQ;GS>L/[F-?Q(1&W"6UMO[K( M20M0*P64M&N(TTAWIB3S2[D8USFTS#*0` M`````````QG>EP*[2LY=EU-\WQ>O-FV;[<"(?T6:6,81$-,]EZ6;UR[.VGN,J]X[?,@J/^VC$>RD13[%X M3P($C[J:R4NG"A&!G&>N8@3+F#\TE+A)YY]Y"&^FC'=B-_/^I.T1,Q\P\C8? MOF,;,<3E]K'9^9EK"Y>:VE_7BVVZKK]AW'%9/VOHMYG&&Q74(XZV.)6ZB8BK M&5*$=[2IG-R$.%AO>#&)M,PW29B)B&V+$_.+%S.%O.QU8NW/\IZ"QEDDWW2? MU*N&RN*U=1(Q42931;AM)I'3O#$I8S\(7IUJ4O\`"::$WV`DQ,92P!`````` M`````````1H=7OBV)ZM&6/M2PN!?#__7O\````C1ECYK6KUE\+OG%L2"PBAG M=[SG=X_?O([Y?U\77,)/79#_`+TSZ>V5_HK4/&26-[=99T[:^W.Z'!ZG6TPN M]SK$[JT6)]EK5&W"+'X[F%C,$8V]2\/?3S(WC]%=POPDKC MI.)+_3XSMZ MFV3WL2?`K,9CVC78OS(V<]%=O?PDD#K&(RVWXL,[YA:/%+J;7 M"]MN/(S"[X_J_>-.31K5JY"7JR$S,HTQC-==:UN;;?-+1A6(_ M<$-![M"\./A9[7YO!?DT-Z>4WQK_6C+]R5YD<:_2H[/PC3$_3PU^69:..YQ^I]A=Z M94SQ0L#G&7;;K+J.C3@U(7F^ID:ZBC-]O]Q1K7*;8CVU+?N$O<,2/3];W\-O MX7?JOY=I]*D6%WOBXG=9>Q/M2:HXO1.)=;4;>=JHS']_+!?T`9W?B7"\:UR3 MUGW#7YWU_P!,C)?_`'-?,#:D7?K*?GWA0.'%Z788MSYO6']S&OXD(C;A.91, MSIR"O%85!Q])6-3+:*#XOCD4EV7@9NN3=)]J(J49L]>>YYQ6B5:"RAJ]50A7 MM?1+4_ZTU.$AF>,TD8[V,K,T3F9:L^\%NMW@:M@_E8F7`,XI+2W(1C]D(Q&OF M6?J.)>$L%W]O=\O&R=JW5>_(ZWUM[PN!BMQ5N6PDQJW6.)S1>IQ-H5G`@D3, MK26):Q1/49IZ=..EF?Y80_JS_P!J.*MSK-<-N%F[R6TR!MHU+Q6==91[VU>Y M0V>:KJ(E%,B46"A%3/(QNM1*+)%-4Z,M%33:]*,*M"G&,:<8PA&6,(QK.$8^ M\P=#I9F".2CE93I56LZ42N;<2&1JG$-Q(9HBKHY^!4S/+ M)7+5J=:3?;LLT(@NN80N_2,C?\1^>?Q\9;]+@Z?,,?<_Y_PR9W662;-KX0VS MI7FR.1UVXB8^\D$!75+QWF*+UR*Z8V\G+QM]I4G,L/AR&G6H5"3.32%`M4.5 M)YXDJ=&$L=Y"04S5)3*K76TQ?393E"2E4K% M)CR4:-E8&:-.O)--3WV_EA/+&,/M@",>Y&>[W?;T-7/_``0N`L9AKC3IJM'?M0?=[RQ],K*_ M!%8(3?,+8(KF`````-"+:LZ?O*[\@'B[,AD,;,;)&W[216Z MT;MNAO-U&0&>SKDH[;0TU,2"%*C3HE2U*G"$O\!J-8F$G:8FD45N>_(,7$QT MR#M(U[>9`9/FTQSJ3XRDU5[O9<4")+1R4D='I5)* M/"1FGWN^FFC'.\4F*.OYS]1,SRRI^VLNY=9[]X@M(STN=<)WH\N.5RSLJ4Z' MHY%]-E.4'1;FG0-RD552-E8&:,E:>66IO-_+">:$(_;$9A=XLOP#3D````C0 MZO?%L3U:,L?:EA<"^'__T+_````(T98^:UJ]9?"[YQ;$@L(H9W>\YW>/W[R. M^7]?%US"3UV0_P"],^GME?Z*U#QDEC>W66=.VOMSNAP>IUM,+O-U@:C#CMVEZ+O4_<5O!]XK%?,-:D5(?V.KBY<[Z_P`[ MO+[U.'QN<'"IMD][$GP*S& M8]HUV+\R-G/17;W\))`ZQB'*NOI<4_:G M^YUD5UEZWLMM^+#.^86CQ7-HD[N7W#<1?0!;7\-$1TUQ#&_;;VIO]]?]3?)? M_*]=NI\IF*`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`:=[!?VL@>N!EE[=7J.FN&=LJK_[C_WI;&>@&E[1'J,?IF'7\NL^ MW^W[83ZD:YU:+H?BNVHQ&6]^KH1#3BA3 M>.*E_P"X%"UMJ;GF7`_C;>6G63;BE;RZ+-,G&^W#*.375(D9>[*;B>;I)9EP M$I*TM.M-4EB9D_EW([H%$O01&AU>^+8GJT98^U+"X%\/_]&_P``(#9,W1N8S M[H$4=N/999_`M:V2K9UFIB*V5`AD-L3<2HGG*]5=,T9*%.O2EG+EYJF_KS24Y9I@(8!R-:.4%YKNXOW#0 ML:%1*3+&..ZJRX22M=BT\#ZO0?MLU)D)U)&@3<9DO&L34#LM6OP\]*'`PCO8 MS3;DHL32:DTI,58.S%Q_RWR.QAO18YK8\3(;AN6S3+;2E=?NS;&5&(&JYLF8 MEKJ$4Y<.GH%X2EXPCP=*>;=C#[!9VK$Q1G76DQ-577_MK.\^V5LUZW4C_5XY MTEW^]5S1B74O;BQB:S2EP\7':=(8Y8[-XL^59O7/M"=HFREH;:DZ3F44,H8= MA4Z;I5Z+>KU2U.>2G5J0C+",)9HQA"N=(F+W*=3-<[;)F3=V+40*ES2XB'DPO7,QHN.K6@7HUC4)I M]Y+--O81W(1C]@W]1PQ\_P"JB/\`VUG>?;*V:];J1_J\%UE;(/[&=9<"U9"V<4=RKK6NM:>JBJ$R154E0T:2)%-RIZC4HZ/5W)85:-. M>,T-S<%F*DL)HPEWTT*EN7HN*LF/^&-:];%I/_,PW]1P MQ\_ZI\./]M]WG"RX5U8H-*SU*@JK*HI4:56[J-PM.D>/5S5.G5WA&:3A))*L M(3;D8PW?X1'*DN_W"SSW3UAY..\[S'V05NK=8ONI M*,WQLM?NS+;671QJ4C1YJLUL-LX9*78M1$J8-(:(13#%M6*QFDW\LLV]C#=A"/V#I]1PY_/^JNN1?[?3O*;R9!WUN\A,>U26B74 MO)<^Y".F*UW4""JG)3X>RXYT\BIP)EC)2"@4**DE.MP52I3X26.]FFEW(QYS M%9F7>-HB(AO4[F;$3,GNV;%72M7=2PA1]K#[NS/:*I61UFG1EF>,>&+2':$T*=2'V5)?M@*S2.4%<5[(Y96 M&QOLA9AQXZUEA>M?;1ILE7542[-KXI"@?;Z273S)M.B>7BAR).M4HQFDX6E3 MGWL?MEA$:C:D1%&=M:S,U:).\`[COO%,N,N;M9"LJW-NFTV;@ZA\6(KINXUY M5TEJI;-F,@YIT$F513X:2H-JK5I<'6G_`*-23?;DV[+#&UYF777:-=8AL6[D M[`3-ONQ_U,>5FR",_O+=Y&>(/)W=I@3\4^3;RK<:\<:RJ"%N:?K\6T?@>%__ M``:N_P![_+OD63:8VI=NQ;>2=W74LO\`0DG$Y^S'[:NXDR7-`SC(N'V M&R;C%Y2%69XQE/%(MM_I\9JLNY"%>-2G_&G$5FDE4JG!S3T][ M/-J-J12B;16:U:8>\[[G'O!AUJ:W3EDW:N_WTDV[+"&YNYVO-6])C6*3+*G#,&YC]M5.%:E"&[1DA2FC]E6&Y6*1RAK;^U.5;1N5E*]3N.!LR M0OMD%-=YNE"MV+61.(Z)-96R]LX)BUPS@I48*O&UM#9C^A-5HZ/7I?S[_?RR MW6:>$VB)I?PU,=ZYW4^>N?=P;3N^V]HVDS2+`9JTVU(L][MLN4T=-*:W(ITJ MY&""86*,2].C+O9N$FDFWW$1A]HFUVM*:UK+%W=:]S;W@V".9MO4#-)0N:E0HTXPC&K)/4FA&'!QW:Q2.41I;:940RB.],5ZJK#6'0H45"JXJ4Q;@:M2.]DFW$8[D(W6:5LFT1,1%6 MNWO7.[OSASZM]:=H6WLJ@LTZP'DM.12,O>[3"D*G2JFB2)=&@1XA/K%:)BG6 MEWTW"2R2[W^$8Q^P-I^J+I369F9:\<$^XM[QG%7+VP>1#QMY;=Q-BTS\*.M: M1&U=QLS+RD3+DCQ68LEP5*:>GQ,S3FH1APM:G)N0C]HQ1TG:)B86VUW).[K= M470?D.&97C"0I+Q2E5IJ<9MW?SR[ MV`TYTCE%-^6_RE=F6U;(,GC6H%FS4QT0;-P13-V;4\>P74FY;I>U94C"DXJB M?Q343UVG2E_K<-PTDV[)"7$N:.<6-Y&R]OK%)K27BMR MVP]IU5Y7:MY*D3$$-*V=V;*#[IU7R[R3'0 M8%KGV9,2U%Y02UE8+TS4TKQAHQ:))",1C4CNPA-"6'_U#3G2.48[[,K**ZN2 M&.MYT?&E23D&SEM,C62NI2E=BU$%=4/WE5K!J"$;28%7&8)Q)I=.TQV4WPU6 ME/OC-'@Y9X<)O+$TFI,1,3%49N\`Q;S"RXQ&NUCTRL?Z+: MLI*RBA,Q/B6+ZWTZU2C765.C",8PA&6G-&:,/LW!IRI$^6$\K6QD]?T_C(;; M>,RJC260R0)7H<$JW=BT\)E9!+62O?;&=*1M`96N@4,0A7C2HZ,7K? MS[_>2S(FDQ):DQ5AW*BR.65^<;[WV8;F.M9'7KH6T=C)2%5;NS:^"0GGW`DF M$\L;48D5XV<@3HU*T)I^"I5)][#[)8Q&IVK$Q1G76DQ-55S_`+:SO/ME;->M MU(_U>.=)=_O5<6LV_P"^F'6$MJFO66^NI%#&96I5U5&5$VC5K78M-P5.J>)5RM.>KO M'+-/P?;*V:];J1_J\CE$DFW(1AN1C7.:3,S5^G(IR7]S;PH=+5M?C(Y46GD':]IKK+67?PJ4I:=2>G5FWL?X1B*12)R]7Q5DQ_PQK7 MK8M)_P"9AOZCAS^?]5$;B_MT.\S>5P7V[R+.M$5).IY.=R$RQN[J)I18JN+9 MY4+T#/`DZM'2*-$U"6?>S32[Z$=R,8?:.5'>-XB(A9"[H;'#+SN\,4U"P=SL M>Y7LY#EV7?<"198EV;9S(DJ:XD9III4E/%P+2,?TZA5;]6:IN48T][/+N31C MNPA88VF)FM4WUV]%Z;]V8NFB,W%9Z%8N0C>ZSU`XM7.L^3HE'0UEMZ6B7:YB ME3=M3[L6JB0.GVJUDI".&R,3+AH&(DS!@A-/2X222?>1AOI81W8#I]?XQ M.M9F:JX&8O<,=X_D=D]>B^+68%LD-O7+>1ER)20OW<;D%D@5K%"9>6@H03J) MTE`Q"8M&,>#JU)=R,/M'.;S,NNNT1K$-PG#DGDWG\8PC]@19-IC;RVYM M3)6[;S,/`JB8H/NI58SO.L=>@9N?9DO+37D]+1E@Q3*S3/&.DEH$ETO&%2&Y M",T9H?\`TBLTCE!K&2RN6-C[$V[M4X,=*ZLLLY+/$3RBC79M=%,-5#2VJ*DD MY2)U>*&MY+1/2RQW].6.^A'_`,-R(U&U(B*,SK69FK%!5H][]9F^U_[AXX8T M8TJK+OFH6T631*]MV*D7.D*3"MZF,BK2+P8CC+)4"1R8E/5EWT]6IN1ANQE^ MV49F:S5N/FD1,IEX\W=[TK3'1^J_$NR/%^BI6I7Z>;KIVF:9PI[CO6CRDO#@ M-%X#1M%T3^??\+PGV;P2Y37Q+.:'DG=UPN5[-1.Q.?L5=@'D1/<,M>YMFJ)> M4PX$`DY$[0C$SQC*#@K(Q#0:%)OU9:FY6C4WT\NY+&&[ M&$B%VVB8HLB4\E;MU7\3& M9E!%KPFI[F[+)"$W_B*Q2.4/&Y:W*I&OWEA=@QC>S;3:-V;5Q4 MT8@SL>[16@/%%R$[@D*P.&ENWAHU2T>I6DT6O2WTTM3?R2W6:5LFT1-+M?/> M7X)]Y?EDMV"<$N0:$SEM53;CU+85BZMIK2C6E-:UEAON_>[U[Z#&7+JTE[[_`#Y>5Y;2 M,G7W6RVWZM5)T:QZR6R>;10?\">C@H-D]Q.YE\D?_O,\."T7A*>[5DD@,TEJ M=M9BC>HYKJ7MFRRLH;GQ<=M(_0QVRA+%DF-S[0S5CI0UWF M2W)3Q!+E6'(J%$HG6554Q*42THI4-5*<3BJIFIX4RY:E">O7GCO9)9H_8`]H M```#RCU?#3MRVSSN>RV4;[>3ZI`N84#<*U2-0ZK*!5(1TPB4*TC!Y36%I7/4 M"9(F6I531PW7IT:-.>K/++$/WMES-]YM]'=;46$]P-MP)Y9415I+,TS:>I)Y MNG"I0,EJ].,99Y)Y8_;#[)I9H1EFA",(P@'W``!\=P.!#::"LNASJZE(R.EE:IU24U(\:GIER9$B4HSU:M6>:62226,8QA"`#XK#N$S M+FM^1T,1P$G$BQ.G4RL8*P,4#!!53:T2ZDCJZ:>HE51%64ZO#>&"9NC0,T9H MPA/)+NP`>R```!Y1J/EH/F1PU&>XDMQTVHZUMC..HE&9#=-'=[:K4RS@;IVI M3W9*:HC&JD*1FENQC1JPC)-N32S0@'JP```8VMU=Q@78H*IM@+1E=)H]8O0- MGIV^Y$:4P1G,4(R[V._W)Y8S!DD```&,D&\ MUK'0_G!:YO/A!5W\UBYXRN-HD9FJG2E-(KHQ5=EI5>#@3/F&V:K5 MJI=52*2&Y:,QFA"H*,F@```Q!4OQ:RC!0FJ'D MUN''<>*IKE,H%)K'ZQ9N)U2UK>?R M+:Y;?*`F/]PT2E=);)HWO#QB"G,IRHU&M/O(E")UP3(9^"87,5*5=2B0-:+) M6T:OP89,```!CIW7JHG"Y22>8P8HTIQ1D4```&,UB\UIF^ONIK+=QV:EN)BLJ MO<=[(YUP)M`\SV&7C_4=CHHSUX3("'&$(S25S7!25)))II-]+)-&`H]`RGTT M;BH-%SLI=).!$K&3I&)LIPM.H544TS4)J:6HDC5(N?2E9-.4IJ1DH9I4C%"I M+&6I)+-#<`>L``'BU.XS"1GJVK;JCO;Q&X#Q(JRHUV775"DKF7$I"H3F%A5( M(L*D3]5*3:?#<+K:ZW*B\UU M0HM(\5QLJAE$<";14B-2L3,&$A7)U2U?@YYH25JWF^X[DK9IN,!!550H46'BN$4LTMGTUN)M6I`XJF""02JF3'`R30H4 M9=]/&6$8;H?,9%WK9W)572B,5YHCF5F6;IDW*13#$U2LG353JLET34O"4Z6K&L5KTZ89'``'BWU<9A6Q22"[<-WMYF)"JX4!I M)1]QJA1+H*CI=*C12&XW4V)JI3F4%M;4C$M(L6HPGK59HQWLL80C&`?)2KQ6 MO7+A+%J4E[H)ZX:"4,G5-JT34>,J5`A*CS*T"^_DE+*!A"E<2;%1HEZE6LFP M4B<34M+2B_""C)0``\7<.XS"M*S'#<2YSO;S#8S43C*LXG4Z50HCHJ2GE:PJ&U%2/5:)4M2W\\LDN^FW9ZDTLDL( MS30A$/+T+T6V-OU,MF3<%8Z\U=&)N`FG$4!RG2,J0HIJBL)YL\X2J/5;:5IZ M75@Y03TI M&1TLK5.J2FI'C4],N3(D2E&>K5JSS2R222QC&,(0!&(2.3E@ET6ZC5X9Z M+%5OH),P;K$E*975@Y03TI&1TLK5.J2FI'C4],N3(D2E&> MK5JSS2R222QC&,(0!&,4+(BQ[E-,-.1KGM$RL7-7G(UF*WJRG(0<[@:UEK%%L)-PWP@M-2>54[(W":L9FI5U"@F'$1/5E2:6G3JZ"@HR@YDV@=43 M'!$"=91*R5JTDQBC"5CB$9J-]U4T= MUSI="M13E"*>9BGF:LIB23?TY8@L/16@94+=6T9S)XH1D*HWDF4F834!97W& MF2&YJ]>I/-/,1D@``>0?Z(N.1 ME.A";"HC(CC4T8Z5059Q-RD[F^GJ\U*,R<:6VQ6.ILJ\DTS16'?J*NW!KNAL57"G,M.4$)`@T6BV":,9@QV8R$HV;DB MVIJM6O$K--5C4A-&;?1GC$LS5*($``!$7%C'5PV"IN.@J++9D2C[6MRSTAG, M*#V+,@K6MY*[J)VXA5&>SK=1ENN:X1)R$BR@GEZYFD5+()*2)T[-#A)"S-4N M@0``$*K+8O.RTEZ'8^I;A&%%F+BW?EQ\3SK;^/'5X[?2[#J+OQF/QI+2Z6H M&4V+@;::>9].@<(3&:-0T4JST9*M*$\9X%B:,E6;MXX610N"N/%31E!Y75N$ M8N*YZ#9+'BK613D&>S6"EHK?D4ZM10,%B;989"8R:K2T9SRC4,F>!H0K0I2$ M9E``&('I;#6FZ%FKC%ZJ85K6Q4WB9/QK$]^J*B2E&>*+)63)RCBNE<9_)Q9))Z`33$Y[.8XNE$N M!:$LE.6L0I&=Y4C)"$DTT(QE^P"9JR^"`#$%TK8>4)9L^M4:R85-VONDGO[2 M3I/2#E9.H-ESH1Y+3#,LL:A.L?JK=">>.["2>6AN3;L82[A8G+%F.MFKB6]= M%P'7<^6WRDO.4NF(B&M,I17*11'92&M.93;S"1&37;;>:[';#>E<-2>6!&!H M^I&JT]91-FIZ=">03*60(`,07SMAY7K>F&;3K)A0Y%S,1QD#ZH3TVB0,-![- M]T5:Q>266:K1.F"*56+TZDFY-)&O]L=[&;=+$T8G2;!/J7)HE>Q;=K6JQEXK1R54PJ:N5;%^,9.4%@GIZD,?T]RI#@]V2,)MR($6EB`WBR=CERAY2D[MOFK3IH;A05ZVZL3 MMX=;5-+--%`;;>;[659;>4[@I+6(+!`\X*Q*HOU:?'RB8KT."HFC1>J6MJ)> M@C'MVF-3N;:VXMNZG%\(O9E.9L4*RJ4E/)Y0XM(YP@0/F2LTL_"R)YVM3KPW M(;^$U.$9=R:$(@0C4EXO.5-OJS+H%E]K)2>W:;9,+2N@2/A-?3H)MVTQ^VD] MN5XK,ZS#$6F8?5S-!=TNLGRUJ4Y*B7@4B9I%U8N6J03G8+C/(ESJ3 MZ?+!M4WVCI3U8K(5B:?.7(Z(T*5!`,J;?-G825E`I74(UC&Y&%*N7CO9I2<( M+M;!>XB%-<.:-PFO1(7Y4F_2NJBG(OY]'6:VFX^SK\E*VTN$]7&=>KCTM2<%2:8L:52E0I3I$D8HEU8U5L.?Z(N.1E.A";"HC(CC4T8Z5059Q-RD[ MF^GJ\U*,R<:6VQ6.ILJ\DTSJ3+TBY,N1+T2U2=_P!DP;KL2$9.>%TZ--[/M:,$T--+)A:N=K[V7AC=6B5EFJ3[ MD-]/&,=S[01A2^5CE*\2@V9DUPI5OYDU'+GYB\*B=;5_(+ ML;,&67.PI;X]`\774\_"62E73YY80G@6&)[[8H/*Y;O9SO:5U%A&64>U]>UB M@O+"X\4Y73:_':6N)=V4M.M^MM%I.AZ)I@J:@82%E.JH*G$S3EJTZ96E7)G1 M7_'K[`8\.>TJTCUW&ZD%=1K;YE+EVXB0G4JQ0LV6"IF:U2G)4C)+0A#>QWP+$5?JMQD[8:Z=O46Z# M5N8VZ+27")D]3J.HW%CK25H#Q,6Z5"+E;3QE1'"V%1(N&3K()HL?+%ZU!8I3 M%)I85]R2(I+ZAK(S'LC+7G.WVLT3D*N*1GF9S5SV07E+NVH;4B%-KUYJRY)" MBXISR,SZ7K>,]_)CD<;1?C^MF]I$ MV;<),IZVS;JCPD*A>M+(6DO:5;^6* MH-A->U>]5I:+,6:IR@CNZK<=G4VPJUD\Q1*'Z*:OSK,$H]5(FC%.G6EI59HT MJE266;/*Y'665%2VZ>W+@-MX$[KO%RV[9KE92P MF.]I&[@-5H++]4V4=<;>.**:F.2=HMI3.T2]:>6-21/K2[L*G!R5!1G````` M````````````````````````````````````!__5O\`````````````````` M```````````````````````````(IY48_OJ^E.PZO;.YK5M8^;!7V)WO;RP] M[8*UVVLLF:%I[MVH,-Y6:B'=*SZK+2K$;KU3E,S269(TZQ*22:E4EJ31E+$T MJA&N]U8Y3K=3D%&R4*%*CH(N4W?U:<-F)W`J7-?3NRI3\NUMXLV"?=ALD+74 MJ]QJ)HA*G5:+AHR(AF6EOXFZ6FSRB_7^/EW8[HFA<*PT;(H%[4!F<>.S,AT7 M!=M.RQFJJO4QE8]7FZD,T9.M2[C#=M%6LXFNFDET)#2TH(#C*%-XII-2C$O0 M**'U>M'HW)W5$CO2+SM=A)-5KUZ]>K-+3HT:-.6,TTTT82RRPC&,=P!Y+RC6]V\9 MG*A$\.!:3P>4:WNWC,Y4(GAP%)X/*-;W;QF#RC6]V\9G*A$\.`I/!Y1K>[>,SE0B>'`4G@\HUO=O&9RH1/#@*3P>4:WNWC M,Y4(GAP%)X/*-;W;QF#RC6]V\9G*A$\.`I M/!Y1K>[>,SE0B>'`4G@\HUO=O&9RH1/#@*3P>4:WNWC,Y4(GAP%)X/*-;W;Q MF#RC6]V\9G*A$\.`I/!Y1K>[>,SE0B>'`4 MG@\HUO=O&9RH1/#@*3P>4:WNWC,Y4(GAP%)X/*-;W;QF1EO1."TOBA4(J6CMP/#<#/O-]N;[>3;G\(@C[(`````` M`````````````````````````/_7O\`````````````````````````````` M``````C+FK3IUL-LM:-:G)5I5<9;\TZM*I)+4IU*=2UCJEGIU))H1EGDGEC& M$81A&$81!8S#7_?6XB3;16RJ.M##C$=P,S&.:OI,[D3"R(YW;*F6`MY?)4A0 M*I=K%I*2YIY'U%/+QFK5MV)>%6>$-_O(7YF8J5OK%9NS[<]"I=*,S5YQ8NWAZBNU&:Y[$@H0GG;=SW6]9%?'MM)3BM^B6\:;?>22IJ MS/K(%1<5DZX:2N\&E52$M>-,\7KDS4E`V6.42T6D\O:6/7L2<@7:92[?6`L\ M9;)=AP;)@L01U!(,2)9YIS3R'29XV5,RU834IYZ M>]GF$UCRP0R[O671F7;!ZY`XF8[MA+O1C\EY`V_FM8U$-Y&::545K/H;@:SN M*N>WK-3VZ91U"^SJ.U+IMS$YC/6 MVZZAUW.DN9E6705]SU&]0M>PKF5E,4G"T6I;A=O"<46LE)R$=8B9K&9J>E3JTHU)3="N7IQ9K' ME+K].>/?,39KU8,C_48J5GE5_P"[O[XZU>-2$(QEA)&5;G6D5JW2M MJLQ4AQWC+7>Q9QC*H5M;FH=F6VG6H8E)ZW`N)<5V6\M1N74IFZM4W)2(Q3:QLQ4HD*=8Q1,\4F7EUG)'!%M><>-+;2F:R8-6A6> M-6Q[*I%JRRK4;AQ>"`JIBBDIIUKK=M5"V2HGJ90]&F;KJA>8D3I:5&L*3 MRR6;4K"U+4N-_MS%JQ*\M>7:A8BWZ$;:;40T5S+2]=1'M>U5U><4K!63K:09 MIUJ134IZ2:?,ER5"K*7H&C'!4:@OR_M35,>;6DSA"_N,5ED!U(I=TN5P>2>W M;?NFUT>U#.3FNHKUXE\Y*Q&\NM%L)>M=&@9('B/&D:Y=`*5 M9:,TY@S5I&I)(IL^G0BTGEYYP9$=WDT6;*^7;8A`:B+%);[NGDBJPSSL,XZ(B>RJ3@;RTFM]S4"+E5F^G$7',WE5<(4ZU%*T\V8 MTJ:)2B9@34=#%)?PS+H8<.2M7)+N+;;:*@GW$=+%<&E609RPD,\F1O[<''9B M.UXKB2B5B2*B7)?EN%"@6C+P_%U0O7F.S42=#39Q?E(.T3*Q5O8PT2Y++Q]8 M%!I.8L746V==-BF^TS2\BG210^G.!-2UQMDU*HAJA4W+.4,STI)#-/\`J4]] M2FDGFJ7Y?,8K"8K"R^>11C,MILLH?QN8)D\5:;<1VZ7.F*5S[C4J=$PP0``````````````````````````````'__ MT+_````````````````````````````````````(R9L5)Z6&F6]6G0JF9Z>, ME^JDA:A&C+6,3R6K=O>2'ENPN[R7CG^[?J2\GCJN7Y,_,BP^$U@\A.6/DB\R7$7&&A?_:[W2_[Q MPPMZ?XO%X3^N3?9OZXD/*CA=?[6'R'7VWNL;JQ.U>\AO&EH?+KQ]PF6.IW$V MG:JZ5QC_`'K@-]HW]#3A$_J$RO?;$+B&76C"[/'2N,'?PVN+J.^6+<\GR;IG M&>LF6/EGU6U;XNU6TG_"=8-`U?\`\;UT MUZ=5M-9N!UN6>-N-_+?ECQGQMKQQAI^^_OO&6D:1_5X0":^91;8]]L+M16GJ MQA=WB_%&JUJ?(_K$ZG_Y4M1].(^3_P#3=KKECY8M4.$T/C347^XZ'HO&_P#= MM'`OS#ZQ6^V%>KR5Q#A=FYH']^T#4IU0UGXGU0;_`!SINJ66.N&H&HO%VGZ5 M_@7%N\TC^EN@7Y?0K7VPOT2[F_PNR_U;\GN3.M/!.IO>3W4/7]L?J+\AO`98 MZC;_`,K'%.\\G/\`?M9^`XJ_Q#>@7Y?]?E]L,.,'7K7A=F!Q1JX>X^U?=3>\ MCN@_HW4N,.)=2LL?(_K?^BWA.$XK_P`,P M+TS9]"P%]L?^)K,^0G"[)?BCCFMY(?\`:JR/^E_("V^%_P`XY8Z3YB^+O])_ MTO\`X?XAPH$U\RG%Y=KI?\%V2_*K#KM8BI_5:/N_;[=Q%^KJTGZ$<+LE_P!5 MG^WODK_VJ<7-D\]>//'ECY./-QQQ_I'_`/;_`-ZX`2S<_=+S9NFN'?:VG$U[ M=:L+LMM]Y:V/Y2]2W59WRA>73R8V?U)\GGDURQ\H^MGDOU7X/4O_`.UX?A?Z MG&8K']15=-]L)M/(\9879N<::C2\9:F.J/&&J&[=;6ORGZ@Y8Z3INDZS:]ZS M_P"(Z5O-9?ZV@B+?F$D"E]K*_IK=7`8791^0;6R7CO2W5976CRC:[(?$_$&G M98^5[RE^4OBSB+BG_&M8-%XM_OO`@7KF["JC?;$G5^GQQA=FYO.,[AZ^\;NH MGY1=#XCMIY3_`-56G98^4SR::FZH\;^4_P#V9X@XKX;_``_1@+\O:N2^.-YA MGK!$:?:UL$'/B)GPOE2-ESA-575]?5"%Q%JP!9BI]%RJSY M(RY5EWX2Q?4D.22M-24Z=.WE,Y/&6A+*:A&$"WY9;N7?;%'0(:[X79Q4?4#+'C7BS7OBG>:P_P!VXTWO%_\`7X0$OR^Y1OMC M'Y1)-%PNS,UG\K:SQYH;J:^H?E%_46^M%\J&C98^2W5;]3NLVJFLO^S>LW&G M$/\`6TL"_*9MEK['/([:;R/879+^23R:,3R6_P"U6*_FYU62M2/\T98ZS?Y9 MT7_2/]^__4?U=^*G]?IM@]'(],NGP:E4N; M<:I.=3I[4W.N:GTBU"?^G-`W7*UHS_V: GRAPHIC 16 g312438logo.jpg GRAPHIC begin 644 g312438logo.jpg M_]C_X``02D9)1@`!`@``9`!D``#_[``11'5C:WD``0`$````9```_^X`#D%D M;V)E`&3``````?_;`(0``0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$! M`0$!`0$!`0$!`0$!`0("`@("`@("`@("`P,#`P,#`P,#`P$!`0$!`0$"`0$" M`@(!`@(#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,# M`P,#`P,#`P,#_\``$0@`#@!N`P$1``(1`0,1`?_$`&$```,!`0$````````` M``````<("08$!0$!`````````````````````!```00#`0`!!`,!`0`````` M!0,$!@C35*)BN@8HV43U:L,M\O)2,3>9_A9+3?4%L\[.;*]7N.7>>?4U?0!_`?%*U M[PNK:>SX;&LD;F@O0&B\CY6FUG/0U(%=;!2H(2>E<`^/N?"PJ+QBZ+S80'I:SG49"RQ]&\2J`3&>5 M_6T1;&\K"V4P-`("1*$EED%MAXYP.4PGM^;I]`,;:[;M:#>D/8/-UH=XUUS# M0M0\P55T'7!N55Y3JTC_`'4]?S9G)8IIO+M\$+`'QEG$='35H/;?MW'Y7V=E M-]OMYW#7=9](]DTOTYY-<_;](0*$LNNXSH-7TCT3QR1\?;5HUK15X-0H7B29J0X*XX/ZI!U_&[$84R7*@)>QE3VD6$3C MB@R:+X)YD.[Y!%#?*CW=UC7YJY#V*QM:SN3_``1X_?<65[%B/5MO\NTUK3<9 MU!-'8V57$M$D=]MOO:XR!(ZY]&+ M5?>'@OTWY3F@6'V`YJ&E[3:L3<.$36-N34RE\-@$^@9X,4R@Y1S&I%(GZ'S: MKMW";T=KKG.VF=T]@ST-[MHGGXU:S"<'X'&"@V8'87' MMCSQF=A2*;8.R&2?9#9)71CNBHTUWQLDI_.O_H$H!=>V65Y^FEQ1WTNH^9/( M=Q$.N^T`/]'IC+NG[7F"(`S5FB1X#\H>F.EY^.2&)N(Z=7P744>MEFBF'">N M=P-/N_'JAE/G=/`UCS__`)E8BE@5<^Y%ES(-)S\G;]H!Y2@8YU"0P;#@DAD6 M3\NES#(A1=!IOHT&/G:ZVR:":JF@1,F5=QEUU+5Y`AT$&'=7.Z*N#3_0B!$P M&RU$Q_,)XW$;,E^Z#EM&GHQ,/!C8AA6\2V&.G[QW`2Z)9BDY$MW9#4*R>ONA MMQ=?CWM&TX*W"1OT1K:6QW4[(9`+5L"4,JXL8>!JN#HQ6!S,QU!5/+E1KA#;&?H,;VK\YL1Z=9^FC.KZ2H^ M5^95B`;.-1.6S2Q,5.P-]%D"E=3`4,!UIA]-R\'+O(D+1W';_N2DK9J.&P?1 MDJA]`L!R)2^'+^*(8O9D=N/I:%]YIR?IJ83_`%M*!2:W>FR/+6J1JM`84M4> M'88M'Z)+!E`1&2IQX,Y`"66,.-G#G&N082;GDX][$>B#Z-C, MZK2Q;9S$3X&K0!NU%TK)+D)353BNU8U/!3XF@L.&'GQH>FPT4=(::KIXP&9] M%7#DSU;XU27N@%RU#HJ')=QFYS7,OG99$N@1$]QEUK9[^ M\*VG=2\U'K*8/5:^MJGRU$E;6F`^`$&J[*+&@H]QL9$NFJGXZ#5-/?Z"[O3) M2RR'C3`EASUO5N:E\JQ_?HNM6?*T0X"%Q'F"0`)I;'N2;R/R>VFH&M:.,=618FI!Y;#?^&N;'*Z0ZS13L:Q>`!1D<0_:Z MJZN,(-EU?H+.>FLNZ[FOF]UE'9Y2E0TO3I#BJW1-BSTU=QF<.098O&1`]E)6 M0V$5.2/[P2'1_)@B0U;BWQLFKJS;-62>=N/63]IYZA M1M[6(\Z%:.%2M.XIB:Q^L3@X&&I_^QM`N]GOE9`BH88ZDTV0]^Q;CU"3I/+< #/__9 ` end GRAPHIC 17 g312438respltr1_pg001a.jpg GRAPHIC begin 644 g312438respltr1_pg001a.jpg M_]C_X``02D9)1@`!`@``9`!D``#_[``11'5C:WD``0`$````9```_^X`#D%D M;V)E`&3``````?_;`(0``0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$! M`0$!`0$!`0$!`0$!`0("`@("`@("`@("`P,#`P,#`P,#`P$!`0$!`0$"`0$" M`@(!`@(#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,# M`P,#`P,#`P,#_\``$0@`;@!N`P$1``(1`0,1`?_$`&T``0`"`@(#```````` M```````'"`8)!`4"`PH!`0`````````````````````0``$$`P`!!0`"`0,$ M`P````4#!`8'`0((`!$2$Q0)%18A,2(805$C%T(S"A$!```````````````` M`````/_:``P#`0`"$0,1`#\`^U#M+DFL>WN;;2YSM,6S<"Y[%#HR.R/=KJJ: MKR9NA#YG&+#BCS7*;L5)8F2=:.FZR"B>^V-=DMLY24WTV#Y-3,J$1+ASD']( MC%,1//6?X?=&8Y4[]K..Q^-B'4TKFOW6*3FKW^.700&O"R(8_'9Y%"+A/"0U MP\=JH;Z:X4V\#:1$OS_H&2@./>4U:SJ`K*+)D9S]'.NYE%(U%B`M1=)V2/P^ M-`-UASUDZK\[=EF,!$='9Q_&O8-$"3+='=#=?3<(2U[][7C'X?=>=N)7/&]K MVYUNRZ8/!-F=,UX/K]*'4AT&YH<7'',-:CM$UF9\&CJ0R*(PQV)DMD)1Y%\$'2:+J#$HV MQCTHD3E%HZPT3;J-6ZN=DE-=]?=D*4PC]0;)D?Y%$.G%8V*V[>C`2R^>955+ MEEJ/:".VZ>92L%80XP$QLIJ-BT:4A1&;/FWO_P#%%&RF^NW^,>!`-B]V]61' M\\_Q^Z?*=.QZ$GNRKQY5A724[/UA5;&)A(!TG"#4RE)T&V,L4@\+VK;`+V#W M+I1RCLW54V?87WQIMH$F=C=A]"TE^87:77_._9D!O][3$^$+T[:3:J((^$KL M`\GA%8V+6$N9!1PR%3!F-F10BY;'0V4%-O\`8WSOGZZF50D7G7H6U+YZ\Z7X MBM@Y6_9O*S'DBN;=)W$R@4;;,H19-@EW`8KS%:;J'K.ZNEAHM'6FTF':-VK$ MDQ&>S#I-7"B+C8*,_A)>W/==_E55M=RCG;H:<.9L1N]&UC$,XKOVX(;9R3BY MK'!LM3L[BE9R>,V*DUB>C48IG+MUHW3;Y:[8T^';34.Y_%N:#.?OQCLVYZ@K MX5O;4LZ(Z8AM:!B`I06:GEI'>E)94'-<%F"CW5$ZFQ&2*0!P^S=UM\@@?JKK M[=,)[X\"RL4_03H>ROPSN7L9O*!5?]F\SU%?["X44X8")A!_1_*[F5!IO&C$ M+,MU&+$#,B462=;((917;,2:>4%-(:;[A]'G@:-+8_*PU9?Z/6C9CU>/NN".LZ;B4@['I5[ MNWVQ:73%&:DH33+K80FFEE("_A\PU,%'&/?]DM$&'S^ONT\"9ORIXSOGC/GR M2QV_YG=T+BZ%N>Y9P&F36TIXM7$>CMRWP0O5 M9P444II"1*EHJLHF)PR19;HO,[_8^PEKKE'8+O7]5GZ(W=SF$FXWD?UE2+UW6_/A63E!]>UIU_;U4DJ5Z%NUW(&L2(N-', MA@@<$@D_;,%7+K5R8QLV0RYUSL$6R'\]>VE^(_R8YQ%@>;BM@?GQ>/,EKV,3 M,6_.QT(GPKF"-FHFT`1)1O1Q8PF[L5@;ROE9\T23$J(>S;5YC?W:A*W=?'G9 M_8W&'8_+L6KGE&D&O00Z!,8.*'VE-C;)"6YG>T^MNU;&D["B02FSTS_7PXX: M('BG&RJNSEZZ?ZYSHAJ'<5IPYTOR;TG-^A.31%%MJYZFKB.;=6<22$0R M.=(PN--HZ`OJC9Q%*H/#]%)2);Z,)6- M!8;S!;X:HY59%1J6.ZC!6N[(E#N'S]6<6'-K&;($7LDK$&7A'TG$H38J[8:% M\9QILOKC/^$O`H]QM^7?55?4]SORMU9#>8+`YZKWJ#H?IJW6T3M2P3^U@G+. M(V%**I!:PV1TS&FSH564QL-4DYT<%-,.B`L:Y2]OP[IY#W/ORUZ=KRM_V)YK MY]`<_`.9_P!!AIU]SS$BMG3('O1]@6%4C:J;:.2(",IXRPQ%I:\:MCK9D.=K MKM]VNS;?;.5OG3"RU@4-^B,]X34XS0K_`)6B^I'C*:A"L7B0HH07/OM5/O/U]&2`]+&GSJNTPP6(W2'%` M2:)<6.N0K&M4A>-BD59B&:T8`\!X#P'@/`>`\!X#P'@/`>`\!X#P'@/`>`\!X#P'@/`>`\!X# MP'@/`>`\!X#P'@/`>`\!X#P'@/`>`\!X#P'@/`>`\!X#P'@/`>`\!X#P'@=0 M9D`&.MTW<@-B`3157*"3HR29"VZBV$E%LHIK/5D$]U<(I;[^W&^R*J&Z>?=C?7;.N=?\ M^OIX'K'$AQABT*"7[(H,?H:.6)$L7K97'N2<-';915NX04U_SKOIMG7. M/],^!S?`XR+UFX<.VB#MLNZ8;HIOFR*Z2CAENX1U<(:.T=-]E&VZ[??533&^ M-<[:9QMCUQGU\#KEI)'6Q="/N#P5`\ZTU5:A%BC%(NY3WU7WT40&[KZO5M-] M&JN<9UTSC.$]L_\`QSZ!QS,OB<<(QP/(91'0):8DU0L1%F38T61E1ANR<$UQ M,<8OG*#DX31'-%7&Z#75575!+??.OMUSG`9%X#P'@/`>`\!X&DK][*=EEX<; M5Q#H%3LON.7CNPN5YNT'0NF-+S*Q.-0:TQ$EL.8.(4Y9N1SX8/K\>207:NMD MFY?1Q_&[YVU>9TV#6GQ#!?TRH.O.,.48P"MFD.=.H_P!>:8-< M`THPY(N:K>>0O)RPN_`<(X261@T"MMS4]Y*!!T?80\6^*,7$=N4)&&^C%JF" M$HCG6F5DWR3O=^B&SG\A>AOTAFT4Z%4_1Z&VM@C"X-SW/J](F^9%*C,DR\GI M?4_T'6T7"Q48BWL!W75LLG(H?\+;[[[39/=/"VBR6ETW[ MR?UC8U9?J6*J>\#+*MZADL@6Y,NIU=4OJR/UC;?]J>1]K&A5=\\DPZLB(,EW MC9!E'4=T=%<;IY4"P_Z#EI/C]<:/E?+D*@%N=:4O^6WZ.2N#1%=F#+OVULMT M*6S1@.=.$W@]\`:'SY_=HQU>/1_O1*K:)K(Z.]U-@UU7;)/V%O6L^>[3D-4= M"OKIYMZHF-F\\6VYXN&`[6;L'?YP3-O+0U@T=H%7CHF):=<39"$B'[EJV_F1 M>=R&FZ^!_P![`70$=A_LTZZWH9Z0J*[$N/`>`\!X#P'@/`>`\#"`M9U MQ&YA+;#CM?P@!/Y_J+TG+K8; MHZ:Z)^W7&,>!F_@/`>`\!X#P'@/`>`\!X#P'@/`>`\!X#P'@/`>`\#P4^3X] M_B]F5?9M\>%,YPG\GIGV>_.N,[8T]W^OI_GT\"E9B%]%6+5LP#VNR`IR<9=, M8DU[U$1=,OI[]E7*+-V$2](4-,BU;VA!8]6L]FKFR^C#AF+RC2.`HKG`:-V7&Y!,9_H3 MRW+0R`5A\DAS^2PH(= MN1"V,/5(_N25#O!M&=71C>_',A#328R>2`YZYL2<-VHAJM,1#KH.M3L/AU6E M(])W,DG:1/G)F?'*I$Q""X!TT;,AN&.'CE-T$_#X-T7O9AY)L2OA!BB>9L#L ML*%(TB2*Q_?OIE*(=K%GVK/6./(F`H#8_E\A\>SU(`2U9J(_)LW1U#:3X#P' M@/`\%%-$M-U5-M=$T]-E%-]L^FNFFF,[;;;9S_C&NNN/7/@51)]61610&036 MCEXI9_\`2[4C%>31JO+,!T`K`C/&$0/'6JXL7)5"+ENV767&-M]&R9'?377= M=NG[E-0YG15T6+41VHFT-BD.ES&P9]&X*L!('3C>P9$4D$E!LG;.`@10)\/W M;0^![G)2:*$'23-@.!;:J:8T6W=-@C2W^G+@K^M+(`#E9@H@.`070J8MFW)-+!(-J&1TW0'.7VV^'#_*&$EPS^][OL^K M2-(Z1R#1$WK9DRB4,)0\C)2^]BD#DD/1]N7%086#!O@SII`(*J>DYLP^=I,6 M@\!MKMIC1QLZ;!5>3]W75%2LY@+VK*U6LJ)+?SZ>RTHFT>@CZ'M:/LR[2C8& M8E<0"%YLGJG6^03*5BVFT;?O7;I73TW"D&7@3)=W9)"M2M$?UZ(LR0"TXN$G M<@=EM)(Y<1N-')M5L00U+NXL),!X&S20L=5YN>/K-@>%!FS7Y/1,@+C;4JFGFVZ,_ M6`(P"Q`#B3VRT6*KQAX[WB_U_IO]:)J//L([-?8BGER%]F9\(0`M M92P*L7T!Q_O,_O?QGV$_O_4^] M]7U_\OT\+8;_`&/;Z?\`U_-GV^O_`'\#ULBHTBL3;,'[1XX"O\"BZ+9=-948 M2V8,2NK!]HGMMLV=Y&E&R_Q[^FWPKZ;>GIMC.0Y_@8D0BT*1!&610."0CCHB MYE1Y%\BV1%*$DR6DB=G2.5_:WU63)M=7BBV^<>U33WYSCT]?`@^//^6.FY>( ML**EH+9TXJ!-R/#R0$77VD,0&RI\+*+Z-E6+IF\_K?%MYJHG5T=8+6`'?@I&J*U>#/0<5?" MBQ5,"DQ=H-XFL5-@6!!VJ*T9JNR#%NZ6V47024U#-TZ>K1.2NY;K$163CUL. M;*N-T]U&Z>1EA%+70=M6&ZFS%H16L4LH87[P$1U61B96V!_)"XI*RU%)O"`!<98LD8N-RJX-^BL\ M&OF[=O\`,YD"F?`SO2&1II8E[$;NMQB2A&TZKQ2Q0HT1>J@Q;"1>W-X@G.$! M==@&T>^4(1#HN$7I<\BKD=]A5RV8N![/0)3NQK)VH:HTI\]U,U_%*OK)Q*,V M$^M^/5';.^RIX".86:<"Q.13.!R'5ZLR/.=CP)5IH3;L63C=19?;*`1C'836 M#,?/&1:Z3YBQD*GC_P#[Q,ZPSI4?+GT%Q4O(Z"&Q\?@'M)VVF6(?9=/&WJ5] M2[K57/W4#FJ0<&L[CVC8G6A+CS#UDQ'0!1[O514QTD]C#2O8J,K M%4]LE&QSUBTV)QZ3)N-Q+)IK@4[RM&'F`PRP853DFJHE_<;@1JX+*/[CFHD: MZ`])6!7M5C$;/K+$\TKHH]@@,;/@;D(');E=OX]J/RP,&$M-4@;8DXU"!.;J MC&H%+70AO6%>.;X?MJG^B]INK;O@B$[@=\!UEJ^WL?DYSS M"#*-YQ'D%LV&VJ>/BVL@=/-4GJ\U.F5G&B.Z!1-J$6PR$5$\BTH%5#=$N$6, MO4LG:N)0QB'4+J0LAV.7F<>FA-L./QQR^5);6C]<^632;[E,2/T;.-,R'U;Y M#V!XE2J-:MO_`&/9J'\`O$YJH#;:-[QD<+&0Q+I""$;":PF0#:OK@"9'.]&S M8>FJ)"LMTT7*NS/7(Q-RXR'F?@XIQ-XPZ87*"8U[FA+>_J+90-S8,R;(#72[@*[5#OXS"C8Q7L73-M.9#IO MN\?S]Z12O5!19HSO"4R9F#FH6/TR#=1=L9A.748(KL"4D)-HGA(FAML'RR2P M&(/XZQ+&\HCIR$B*QBLY1(`+Z!8Z[D$EA56XHNV(^YK2K1^M=H*2ZEMI!C,@ M1DK5=EODU\;-B,U?[`-4@DF*@.4] GRAPHIC 18 g312438respltr1_pg001b.jpg GRAPHIC begin 644 g312438respltr1_pg001b.jpg M_]C_X``02D9)1@`!`@``9`!D``#_[``11'5C:WD``0`$````9```_^X`#D%D M;V)E`&3``````?_;`(0``0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$! M`0$!`0$!`0$!`0$!`0("`@("`@("`@("`P,#`P,#`P,#`P$!`0$!`0$"`0$" M`@(!`@(#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,# M`P,#`P,#`P,#_\``$0@`'0+&`P$1``(1`0,1`?_$`&P```$%`0$!`0$````` M``````@`!08'"00#`0(*`0$`````````````````````$``!!0$!```&`P`" M`P$!`0`&`@,$!08>?21TL%#?>(==0X&:N4Z1,K=U])934;07:I6Y'5M:AXH?FZYIUNSO,+WZ M^+1,S'C&Q?(VV306\I%\[\.TGKTSM8-$=9.D\8DL<>="?>V&J+._-'^A7FB) M>[\2$^-_Y1T1G,T(UV8JO1XEL'Y.]HI3*MI%$,VZK=9L#$&FS;ZW6IG[R+RO MB(2Y%C_30!?;;_HQ"\^W6WT4O`-'.!/RX`^=-`UXV&R;.8O(X1O$PNIX-F)# M-Z35MT2VHO("I"I4%?(:Y"._^E:E?32\$H=_T.%:"RUP*T/*C@)UO,]JR;#Z M7.&IE,9OZ.2;R-H+LGGC-T&.W$=FNL!UF?*N4OL\?I6:B8OJ)"$LJ?#ZGW>5 M2S?"[I9V-2G:@ME#F$Y# M-T>%E8D3M=1($K?2;=QI,0G4/88[%UR MQJ,1PK1KPTR2CU(DM!S0QX;<@\X[!VNX1BM'!/JGTJ3%H@+UU39RYDE MRDE#5X&3$V:IL='.M<0J/Q[JOEX%/6&Z0L9]O>F=?U6B(QR)4>%O&KL[/JNT M08623D[]+^G,\&AR@CUTI=',(S:[XF>#B`:[,$02O)"(6PTHWF`3#15JUD`1KH&(:`4EU:++[9EN M+=Q9,=[G$M-NO@S_`.KUV34/C!1<-$)EGQ=7;QX_AQK0/,R`3MZ^&=^I,;SX MSHIMF(W%;^3K+L,+[.KE,N..QG&Y*EHYQQ+3B`I==QJN-E.C76F(]&PO,IW[ MM\89_P"3Q5>IR*[31VX+20<`M#NBFTM"&:82/,)3I\Z*XT*6TV9.DU_)W$0H MU=)C--A=WH'T!:;5Y=]6OYWFA+98XG'_`%\!?W;#-J"@<:*LF$=$$;RRHAR+ M:1S%P?\`[!%IM/!LXKB)G9L;DA,9,)2)G0BOFWW`)U7DO.2S@S>%X(!9]YPQ MFK/!R^HR-_4_01?19T$=RH4H(DV41KNZ8X)F:ZTG3FX\=F4EWY%/?1?^D$YO M/?Q16V>.AE=Y(VVST_9=$VO.!T,MI8OG45^9BH.WH,TKJ2#4)H9R[!"T?<[^ M+L4Q&.N2&'VG&D+:YQ81@6]G#8%PTA#N=;B>VY5_I&>^1^5AAI`]>OUNA3!) M\[5=C%8-501\B\:S"2%M7WFEN6[H9.A_4'N=HNL.=>M&I2'G&XL:/.? MB`6V4:;3>G/.(?K,42.@87VK,:XSIALQ>C#1Y`%C0?;MZ1VS6&DEFX.6TNGG MM/\`$,3TS(:E\2OZ3R%)2&"W_83;D?X3RB)S*O9"39GQM+T!/J->QYYV_P"& MK0J_:M["LR_[$HV#D1BQ;Y9K:[6)E_;?^O[#^?YC_`;%:;ZK&O-QCB&2V>;' MTH:/-&R;#*@ZFWM1V/\`LFH-3:T6D%S.=%,IU.7;%MA-MN0B M6PK*&@1=UM=$3QE_YIEI!C-H;:4I;(:D0]BDSL.&]H1E.K0II**!Y(G(;D=A M4FLCTLP_$(X-E]#96S%8-7`J];?_`+BGYO(U8U%D.K<4VUWO0#RJ_P!&X)$, M8].&<+,B`OUSU'LODF,,UQKGBJ2DTG%QS6".YN?WMRZ12D`)=1CMO-K9^`D^=>]1S9AC)*T)RHL?V39*ST*\G&+TA%Z66'-^7],LGUR9JK549-RNQ7.GYI M)_(C2[OZSC]C+B_\`+2I7'.]=4CY^*_YYWX`9_#>46FX> M&"$MM=PWT2UZ'M?MB@&-J@;5H=L3"3&:^K-K",[Y+JBPFNPDN'PX6#ZR#^*N MJ^=6RHH.2&D=K8O\`#TUGKL3[D":HO>\$]U28#9/A M^@:.#UWGS(/34W8(!)FXZ,*R[<@_7R;/)]>^G%;=>X%S>4?0I!ZAP\5W-[&2C(:31!8..QK_`$'Z2^;_`"IZ%8QN9%:]0[Z% M81$$'CN&J4$2S4^)0"(2V%RD:Y'NHD&:-J?=C,L,N=;>2E*^JYW^0>-"]ZLY MSZM5YGL<=(;V/^P^9AQLR%R.';6[CWI^1L5:.72<^[41IZA@"L\6L7">:F>O ME95/M3N(<0E]MH-!G4K4TXEMSK3BFUI0[Q/%];7U/>)(C#5/%N=>@9&?&0-JNQ9A/F0C;018AH M;656Y)-A7>BBM5^AV2(%>\QUNQ4AE"WFVPB1-N/L.$7['F_F2-Z!+GIW@/#? M0"0C8X,)&[9UJD[T)<9SHM6/M:!%A0:@]T/&QHAF4]1,6NA61#S3]5=%!.:LU=T#+;B65,-&#C35 M.&4!$W!M%N3*I5^M'.IC/16FP#OT?#V8G]@?Z(YQB)+O%`>)&]B8-S1"QM M$1X]I`2M;G(Z/H+?`"M-]Q5I:>_YA>P3D`,<'S`J9WDS"ZDU.PR3-TT1T7Q@ MPUP:5W5'$M[0LNV:6'!M>MSDV3/'&TH9>XI8;FA%T1$(E0WI:'R\^(K2 MO:FVP78W-*03QJ2[U2OQ=AM3 MV5[P(69MKI9=EGL#&M&OO.@,3#A8(@PZ<^3BRRJJ\>S,F+Z.F%9RO26.%#1F M[)BRIK*_Q;CO7$QVT=^`(,2_TJ!2O-A+4F\HT6OH20&"K2RJWY`U,*A'7=)V MR;Y]!O.UZ/5EK,F.:G9:;46$&6F)]S`K.UDE4A]*>,]>!UG^\R.+=8^#,>6- M?1I>S:3M^7C(T2S:$"I7[7&,PEZK^TUQ"<*H9]WGIO1QNL5MJQ5\4B8U(:>8 M0IGG'`Z,J_T,#->B>;9`UEQ[#?\`2^&>@=B&H-U.$H<@9M?-MZ$BN@YP2.,W MDJ-^;62F[4>#817)%5(;CN/=?2CK?S@RU?\`I&+%0!EYEGV&[1HEX>^=,R]2 M7F;!@\HD.0[,=7L)U:)5_88^W;UU^?6\F@N?LZUJ0S&DII)??O&__3QX-(FU M\<;0YQ*T\<0E?$N(4VXGBD\5Q*VU=^`P[>UK:O'GHWU?N M=\4&^I^"4^AZ?.-H!K2POC$C\;]E8#A1K&]$9V_83K6]L,'L"/0)R#^@:ZK] M::<8O*QM$.-9QU!Z-4%VT'>M6E-ANKV-*]9OS:<,!+F)8UQ9Q_G)5)+H[3JVULP_JN` M:F>F;&\!)D_:"-Z,"T@OT+/JJ2LC;CRS,>%""S#WC@>M!.S8MZ2F(IU9(B@)ZI,2>_P`9`Y-._P!&:#%8&U5> MHXN=TVJ8H)89H]CE]&0!1#*+,W]`Z@[CP<4BA4JXJAV0[2GM?.@W4*0Y'D1' M(G%L?=,R([KH#7/]`VN>_P"D4N_*\TO!S7-?\/9*+A7G"RU,%62%QK%].[?$ M5&H+3I8_F"K&'G-,Z037HLM+J:F*I#OSR&4L\#:N`[+?@PGY\1-?.>B1G9L! M,E$Q,*6XRA:VI!`:VP<($HC1>FJF\G.RIJ()O6S]K`(<*)H:U&$*4EIR%7.QYK/UV)#:O@# MTS?2FMC3IT5`K9U8B,EUCG]05_G*^16:,U$IX"B&^$95#-[/BT]5;V#]3U]Q M3#_;"!)^ESY&T.K#(6!=DN.&/I;QYN)_JT7#_.EQ(]_V'HVTT/0I1=*\26S1 M,45N123Z(4O'@7%]_HP/``^5RCO#=/ M%KFK\;G_`+;SD5>LA*?8Z1D&5P*F6;#:+1=VQ4"VLBK)+3=L*B?)5'2BU:6Q M.E?3D\9`7RGUDY3>U?.^T'N<$>?7&@^(?0-!DV(WNB@DDDUHL)/1?E&%D52* MR:\MDYTR8:+&OW4P694N/+AM.N)FK9:0OJ0VOJ)%K:T%?)N*UT8N;"K8=L*E MN?"M'Z*?)CI4_#19,-N5\Y^O>7U/U4)4RM2?YYQ2?_Z&)T'TON8M_FW"+W=. M)K_6CCWN3>3&]A(HX[*(1<4-O]/"7RU#*U,UM'5BD:U#0S6K:KFX;,]B. MXMA7.+2H([IGJG;L]]+:!XPI3@A=$;?V[X;RP:TZPLW;8Y`\F](XUI>M:8!K M-+!J1/<(GKC";"!3SI?W%C7Q#&&EM_YVHJV@);&2XITNL]PY/JFXZ&(9]Y)] M4%@,QIP^0.#AU;Y)98EDVYT-'=:9R.Y?MR,ZF:E)K';"(I%I/B5<5N3(==[* M7*#SRX6WB9_GN#VOKW>]S"C<;#M,M[XB`YE,$[D05%D8D*?/22>PH:%IZ1L4 M+-9-)$GTT*&RBY+9"FI,=]?_`,ZP-;R9&W:)YBP*-Z?LH-QZ':R4%3L]E7PX M%>Q+T3]?@])G'8=3U5.Q/Y9=6F5R%_$+LKCG8_.,]1S@$)\`O@%\`O@%\`O@ M%\`O@%\`O@%\`O@%\`O@%\`O@%\`O@%\`O@%\`O@/-YEF2R['D--/QWVG&7V M'FTNLO,NIZAUIUI?%(<:<0KO%)[SO.\[_'?@`QS+_/GRCCSWFR1GV9M4;ODJ M/KL3"W/S%O,<$XFX/JDZ%%D.S9;[UW'L'NI5'1,4\F%UMOZ'R?31_`=VQ>(, M>W*_W$@-[71TN^B<+I?.&HUM`9.TM3:Y)0VA/;P1^NCQH*GJ68J66 MA?4:':C90&Z-@%>Q6Y/H>96X^U6O@A:+QF54 M@JOT?'-:G'.O$Y]B(EH@6,7Q6=NWCEQ3:Q8#%IH/"R-(KN1+9\@F@])U/TD1 MFZ]%4PW"1&;4^EX)[MN"9AZ$&:@8TZBD6*!D3M3LM-T.3K6,@>&GKM\=S(#ML+9>6W. M@9[?07A6*./C9^''Y%/NZ^[JU0IL6PD\4VI+;$5M@)*CQV%2.X1,(M,W8V(_ M/&AS-/!"\TTN3?$SK>QOM6F^\L'Y*OYFJ3*2 M$]](>=`/U+FWX6@YK*9"R-X5LYEWFY;3GH:I^WAL.3T1*@S':^P M^DTMM+[L-#;WU&%.LN![;!Y]#MR%@`4/+DS=C9QHV9ZQ1V=->M4MQ,/,COH! M4$W5W(A5Z(EBW!**N//>B_01#DO-<2XTIGJFNA243P!BM4C;Z@>)MG&<^WU_ M3[,SR*BU2_BY;5DVTQ+*-JQ4&"SWW/!>S-W[RPFR8S#W:EFTL)$^-#8FKX^D M(E)_S#\PRZ`V%W?[39H-"$<>'"BMJ]0)1]N01>?XH_&QO8:YX>=JI5%NP)T2 MJ5L%\%R/DQF^S@A"R8H*; MZP[9,Q)5L(RTI:@(8K["9UD-"\(#-GBX!7!>\:%>7FDR$&U<^=PHP51G446L M2>_[GJKQP(I(>=\TH?`9%;'MIE/7-5#UQ'>>BM?14CO0KOOA'&.^.G/"BKO5 M58`X$IS)4!>A62S7N:\BHKU@W=`4QTI53O5B.Q5OJD=LE,+4G[K_`)_GX!@, M_P#._#S[0X>JE!/LT\\B3\!O.WG-*GL]DE'FJ\MKS+RE^`W"Y6(M&';V8U9, MLLM5UJA_ZLF,N4AJ0@.27_G%@[OX>RK"3:!@Y&]SU'T*+:B+:;94NB#9YM[C MCFQ5]==QX?8CX%I77?\`],>EQ9-2I33"V6&7(L5;($)KWG<"V[$+#`CF>;/! MUC'$T.V\`RNF#?DX((J,L';A\LE/S;"VL62$=BR)29_W<:RXE;,QF1'>=:6% M)"_^?N)B%D&6500:SQ0!Z.//58I$EGCLF!6[%J%44U.@6JHRZWG)E&3LGE\X M[5O= M82="W`'M+-4-^O(<[T$[D_EWZF?$D-0K!EAZ"J*J,Q],+_\`/?GD,\S8D,8' MFUR:O!09`M*T9G%A`DF*:N%9SIMCQE-W-@\[+_'29Z^Q^R&G5BX@"^>;.AHKY$04H\SS"&2PL[K1"B7`>8&IP>T9V_8LB.KBE]L%_ M7XZEN/QD+.Q?'Q?!\@S_`!`%F$"PG+P^G`0OI!:_F;RL$QR`W4#=4[<.QVW[ M#E#31V8C#TCCDA;3".O+=<^=Q0"]3_YU890YSFV459-LT<%QT]%M,RZE5I4Y M]`69AQ7>&U+;U[K\%QRP<22D#[[J9_9B7D<0PK_T)ZUT+YS_`,[!F<::=;#4 MW)M>:#HX,!9^7W!<3/WC5M29G9&UN'*[#5'8CU\VNG:)<=6Y%2REUN7QM2>H M9CI:#SQ3"E8UAC&+U^@F]BIA)\J`9S[^U)"@9Z=DQ(31H0U+4=S4B2+:;8%A-9&YT7D]H]?&1\;7#,2-9%9;>2$H5.LG85?&B1V6 M6V(-=7Q8\*%'C0X[$=L(:/\`F<&&O1QYZCKKT\5I.E`PCFY;"EDO)(9-#0&8 M26854QA=4#D:O4.6IE;R69#*T2G7+%WC[CK?&D-A2M?_`)V8/3Z9.UJHO-;K MR^61^AR1EY&A2I<"N<]2\II&Q5$2'90)W'J2XNAV!/@M2E27*=Z&TQ"<8@I^ MT^`['O\`/7S]-"?/V<6_3F_!O-.>&F49J,$)*Q=4[N>'F>O9/=BIK`L*E^,= M5J@Q> M6:"[<74RY/@^8`$%@3MJK&:>XZH1GNQ&&$Q&8K'5J?2U]RM;R@K.F_SFPL9& M\.'1,HV@57YZ5KT3.B.BTJ;&*6QC>+6'>ZH#WUP]`D*OA,HNZR)+ZR^CLB(_ M#85&?9^DC^`Y`K_-K!\W_HJ2`%V]!MW@>0U?GZB)A[9":NOCC#J&VD78UE^I M2F?XC&5`)V,V0NGD*98M:G[J1R'+9Y(>^<"6Q_&FLHNMINVB8@NN[)K5GJ;U M)971!:T`:]-&A@753B,4BN;R12P+-(NFTG1XSC$#MM.E.1XT=M?R?`>V=X>- MYP0Z\10"`T(W-M+^'!M5&-U&OJ/E_P`%Z$)^>CKE5D=-/7=$!6LK^PVU=BJ9 M@H7U'7UONN@.$+_-WS0*#^.C^0PSS`.8%8ZRYDMMB1S:A5F)"VXE[AUI^8,I M4FSJ;'*R$GY'E-44N*_#JW*^&J!R*N(PI`6GI7C3SUKQ+/,=#"%$Q1:^][WOP`MWWA+"3`@]*W9TDX.(/K8U(G#=K0I5#6U[-=)"; M,+KGUM5\VGD0I:5_+(><>E-,OM@VF?@/$=&&M#I3ZWTTOO=3ILF%S32+@SYW M2+$-Q`E=-LT#HQ'"JX;54/T)K+DW#J(L=E^PL9C[TQU_KG>HG"K?!"$Y6CKM'2?9-)IGX%<\XQU33G\R$+_E[ZBTH4D!PLO\W_`"\FFI:S M/A\GP^Q$MW/?2`&58F5SP(DS_4M6@3*S4I@D]&1+JH0OHT&TF-W%"]$D4DOD MM?>Q>=2SUH+EO_*F*&!1D!L;#_`5+?>0?="#+XB3.S,BQMAPOE,@TD*5`1`:A)L3VWD+DMJ3/>7.6VZ^MCB& M4A`._P"?."R@LA!KN?IY/77?G*Z\DU]J1Z#9V1*'^=R94=)-G(E?=9:G04$D M6OA,6%O([*()C-=#X[.4J,RI`?K1O\^L#UJ%45VB/'Q1"J/.A)Y<;CSREM+, MK+BFS%+VP-871%/C*>N[IEKY?FERD.O2%HXM_KKBEJ4`Z M#'B3%Q[`CCS5.?.S'*STK,#FT@F!A,L;VK,#K0[#7K\C&B:`Q5W5#:T?( MH3C#O/QEFI*H?&&FFFD`XR?&N+V0\:5=Y&([XF/]0#=K(]1LKI'--=U?-FQN M-FAO7$-?"@PZ>?GM>'UL2JBQ8C-:W$C*9=C.HDR^2`BQ5X/QXI!6`)!3LXE# M>V&TW\H(<_U.^!R_0=AM;!JU6:GE^.\A/W[U=81H[D&!\K53`Y"AHCQ6VX,) M#`-!'X`S@J',]'K;:?6BGIR0$HP&EO#0FA4GY!?2+1"ZZ/#:[F6MI- MN+&R(RTADR[>XG29T]SOS.+^5MOY6VTH;0A"0L+X!?`+X!?`+X!?`+X!?`+X M!?`+X#('RC_I1;:K7AQ/K\_!HH<4^9)?I4ML,LN3=VTPJJB*%.L#FC5Y/!?9 M(G+KI*_%BOU#W)79]6XWR"XV^VZV!7W'L@`E05?KU_"$""NE'M40BVKAF@59 M#2V8SBQ3L56N=3TM7*DPZN0-T/+5$TY!"9@.;5QC3@)I<9WS2-0J:$A!028<5M')H8) M!?#I/7SN<==3&CL3&4R'FGG$-*`J/@%\``OL#U458&<9T(4!#AH17$V8[+IY M`8[J\;?A&HF4W>1TZ!^FC`_%6/)]FWICLEQ]:)'TFX/$H8<4Y_P$C$?(1R M1*;B,JXOX")FOO$2B3*V2&1E,@KE=Z8:N]'/A4\I*:NOO.$FHIB)REH6:1!, M8C<,H=L*^7+@1U)<=A\5$4^VKB^A?`CZFR(WT+N;T,PJ5;.%.B@==>60*6TP M7>'^2VMW5:*#T);:U$.FMR096.3GUM,N*;DQ8C[L9QY+#_TP(OX!?`9D>Q?; MAMYTTV^%!^1AL.I#L&I]HDUFI3S^$4:/8VQP6"3`$#2A"LMH--.D+&6FFYDJ M)/\`XEV+/\Q_I(6KX`FHWK7)_P!L@A5O^V4=NY=485>6DD2O)@**:G?BU88P MLGO=#K(
J%0FFT^]=.YN?FO`@KB8KRU[K4?/R)FC>BG%F"]HIOW,6NX M\_*1#?Q<4DYVG MO8D.4[3D%/)1)A2F^+9=3\[?>I?9>:;"U/@%\!EID'O`R-=OJ0(@5AUB/D^G M>DP9`H&7)I&U[-AW`2#2:A)X:1;R%(%22JM_T".Q+C078,N-(NXSC");+4CJ M`)T8]IX&4@I#I$:[*:D1&\J&-QES27/C8>FR\B-9!#&#SVMI;.C8NIE22K%9 M_8K/(_)RFV/G4PE+C?5A[S?9&'5T?5;6?9%L47QV00UQ>;K`BY85V^$BJ&#$ MXS5$C%2[7SB2F+[!F"J'U3;SZE]>C\>C-NOMAY7?LG'AJA'[J_AZ74S+ZO+; MUT2E9<:_NH^)@,N!"-#8@&F:EV;%#*!^VB?Q9,_<1K!,II4!4M*OYX#!,]I9 MN/V]O5D+-Y;/3SFSI,UK\V%R30[PV"J')\HU"_.XM..5\^9)K::%J$?JT1$/ M2'V5L_;LO.+4C@&.RZA]EI]OYOIO-H=;^=MQI?R.)XM/SM.I0ZVKY>_\I5SB MN=_X[SG?@/3X`4O9>^W7F[&X^AT/0N-.GZ7E(!VWT+A"X'CL313VC#YA%S3Q[53J&(W4*=!"\P]D#%J.L1R^V9T,OB"'=`(+G`6AX9\CUQ53[1-\1W89/@LP>./27)$1UWZ;<7GUO@'AWWAY\;':XB M9GG5DF36Z1=7%/29L9WMX&4^-W0M0ZU9FT.FJ9S([$S^:9UJIG77>JDL24NP MN2D?\_`=#_L`*@2=UKE1Y!/>Y(B[(*T;!*^Y*+:V`JK(03389->*JZ^9#&62 M.27.0JM4I;:;/K'\Q./J;D<;#YD'J\4#8V8G-15"!K70AQ MS>KYP?SRNBUEQ'L+Q],VVZF(IU75=[Q/W3B([#J.)!QI?8F;E1""TP@,:J25 M1YKIMC%:9Q\W)Z\2:*<[AFG[?,_)W$"`Y,'::]!)]9<>:< MX!8_`+X"FR/3I]'NN49&U41)-;HF>[(9S+MLJBM\Y_/S]^`A\OUGBT$WLPB5;D#*JF]OPV48=#B?N=*T$6')Q M<09S%.DUBA^4;5@W5R9"X;;RN*=CNQ4+5-;7&2$9I?;F%WX]((*UX_4MV+FM MB*CQIXML1U1F@141W%\"'T M?O7*>"\\C+H1C![7D&UOV]<.9UH!!9@N88YJA=F-KH^GTT8?5<@M5&L1*0W* M1,80]V3&E\C-/M1)#C86T->K3-&'Q1L[ ML0>M/)50R-V5[P+4JR94P^Y$D,,NH:?6^TME($A\`O@*49U6<[Z,L<0_#PTU MD#%*75>7_P!V]V>[.MCJ^$54_P!C]'C"8<>/2\>^K]3J^K=^7Y>[7G`A=A]K]3[*#9,2HD>XB MLL7%3-K[)AUB=!=E0W/G4WQWZS3S;84HGTA:_P#9[^GW!2$C*WD.9["T_P#) M/=FR/1D81YK$K,N5/V_V7XCF/J5/1/X_U?;*.]#ZWQ2/Y^`X!WW5Y\)J"84P M;(\B4'1^H)Q:QN,KT2G_`+)J+TPJ<\JUYG"L!QBS-)LL^(*ZG1$BL=EKEV,1 M26U,2F'G`_+?NC!GX%@Y&7HTDCI"TC"B+.V\K/$Z0/786-!)@;N68<]2-6BZ M41'-&I)$NQCV4=N*[(>=;;4#33^W,]EW!^V\V^0T44V!AS'%9Q7VQL2 M:Q1EOG_-]XE$M;15\3ZK,"HI#I;CKO\`/&$PVV%=7]>2TRL)Z*^OL1/3$6#` M&U)SF05#8>6-7HH#%UP+T-)H59/MP687W$>H^068)H=7)XV[,0TQ%D-=8EKC MOJ;;6!._`+X`/=N]1S,4]`X?FUL)0YF7Z,&:(0:%I"K=<6;E\ND-\:S\#LI= M-V(Y'L0Z]*]5;@6TSK[*ZCKL:4M/8:)CK`1R![JS*A'+*TU--@/6=.:^BX5[ M#%*$D,H@?E^#[UHV,.ZN<2:NK>4-#,O@,E^2XZGO4/JD\92ZQ$D.M!] M;^S6_P#5:^<.0[V^W9PJCW[&A";JHS)ABA]+'F(5K4F!#CUHJ-/([P&H["-$ MG6!E7",I5O65,EIIRW^W^S;^1^0TI(4F'^_,P(9Y!=SF+EK*7H8D5`Q]1"A< M15B\B*U3:>@W#1[2NJ7:G/\`.=`+J:U9''9*^NR:2I7=R/HUSZ76@[2GW?FE M(;`M5$:LVP.YT[8LH*3DC&RVACK,,@IRUBXH\Q@2J5,[4+3]_%':+B:IF2B7 M+[\D+LE?><^`.&!+3/@PYZ&9<9$V)'EHCSXST*=^`ZO@*0]":[*Q?.N$]/0Q"HN(#'/LS`!FQN%#U5>'^IFU$ M`B4:ZOFZZW>IJ"+;D#V_/D(KW.[D_I)0')@*C(YXP M9YEL^B1]`O!,L&Z$@AY:6Y`)PIV>VUO41:0Q';F7I$KJI3#_`,WR1&'V4.Q9 M33Z@,3X!?`9=;I[K,\I]`Z;F51_1-I$S2@RZTJC-PL-!C6QT.(96^ZRTI24QGV7G`M7+?3N4; M#?QQ\-F$W'KD?L3`(M"`,)QD?TT,IY]55VY?FUY=UD*O+Q^MGWL%+CT=?5=9 MFQI*$JBR6'W`B/I?T=;X;/!(H\)1#!IURTT#7W'Y\F(YGWG8*E4M9I6E0FHD M>4JSN!R<6UKL>`YQI,R&U.<2O^8W>=".V'L*$/;/;91=@)1:LRO10M@(E?A- M;*(HR'K_`,QTOHJ04F?4);:I:N&S*EP__5U[O(S'W:OX9;D*;"T,N].93KY( MT+B$HI1-M162>AD\B"2D8HM*`(4ZIK)IQF]Y=U<.M+QJ)/OX"7'HSG5\:L(D MCB.QI<9YT"#^`7P&V;,3+LBQS4F,K,] M4JE_C'Y%JZQ)-!&Z:AO\9;72VK[W'N_03\X62KVR`#A,95^BPKD:%X&QS,L# MS*".D5P-RXU5,%P*PO2TAC5ZJ8?6[MTVW'68R777T-UGW;R6X_7'6PI8F_T6 M6,`>ASIF67:CH/R?V3KL%QJ+9OYJ]2^4]Q(<@33VA+$8DV#5^2M5T66ZQ'CO M?0>>^BGJENQTN`2EC[%R:J%R$EL*G5(CXF4]$R,3DY4:Q3.EF='FS!BSLZ*5 M5,+@#LT1>381Y[SB(\CBOM6U*G__`"?`,[WNSSS]\W&JK4[)Z]Q[.*]),*Y5 MHU\**O=C%!DUR0;;OX(TN"_>Z+0&-8NO9;4M*'YK+$E4=YUM"P(',=.%-<%& MR\0=LOL4VU\.VE;>5%@/D`\3"MQ,'R8:(*.U8C3ZNYH[JO>CO-K3U"NHXXTI MQI;;B@L+X"F_0>E7..8T>ZM2448D7GE4P7W=3*D/Q>.!='9P9^@3(SL9IYU5 MG4@K-C+B-_+U+LIAM"OX2KO?@!PO_:?!O5?0(S8B4)S-LGR8M+@LWAW"G9V@ MZ!DHR.&6PA,>O6PW!;8IJ33A=FL>:D..S9Z;=KJ$\@\ZH)/']L98-5-[%UUR M[`S4#`6"X[K7`XQ[1R9E9>#`,91P&QDTZ'RFNH]*+(-0P]Q#?WO9C$ACKL5? M7T@PE?N44#34,B7H/HU:`D&,:SJY):3RVW/FX$T)/7N:@-G=5)3961/:JO#=0U197GVAFEUT1SL M6S4E,K2[;KZ.5#^L-P-)@S'WH[O8TF++8;B?7E<<9X';)]F84T3U0W#M2V\C MW-P`#$(Q',]-;[/NF6ITE$49\&2#6LI)%%%(R87)ZZQ:;<=2RS%GQOKNM.2& M6UA!A7WYC1#GU"?3A_5Z#\S$/[^<)OYH4W)<)@6;&4X*)])+Z<>@6CM&%Q+. M%WJ9"_Y>>_AU#+3JXTE+06`CV-A#AHL,007G4-$SP2Z;J#BAO,4&C6?U^L)& M$Z&[5H%GIS^96/+M#[9<)_F?SR\^O[>;+U)0-VM^P_9TL#')7%?<_S(ZC^`>9*? M,\;)BCN4.M71ZW/WG\*D'8\PC.82S!?AW2TV/"17F.06C%?51\[5:J3UODFV M>)4?*[QJN6RM`%H`(P'FTG/V$C8%FWXKV#PD^O$%FQ?O>A'B;FIJH^HG.VB4 MHK4B?1Y+O\]4\JTY)ZE*8W5@(=J]8KUG-X@'7:_'\O\`/:'BQR_(*RY!9D%S M6F\EQUT=AF8A+H8)DTU+FH&HY#)K+Q8]'F.1I=2Y6_+RF^25])70OK2D>6OZ5%.$4GT!P7_4_]'/L5U\( M#40]@*U>5W=M_R1_KJXG%3U_+7_=I1Q4CY0T=^ M`7P&8GJQEES9-24,67HF&0H\CTW=78R"D\VV5;(Q_AMJO8*:R5NY!4OPCA3_ M``@3_,=E^)R+UI7>=>XA/0J4/:P3L@2>!)WHY/F3FYX,B!7HJP!>?.;MW,,V M[DLEZXOKA&[-5B;SHJF2QR"N)T\XA3CO&.SD\""`\?"^5QTVS;[.YI+FP^(U MVLRB'/*C+436N[)>=SB.55N)%+^*V&MH*.2^:(]82XM\JI57]:;2TFMXH/FA M->=N9L0.'%AZ75YO<%_;"<1B)J,90/0[!--H7-:=SRPY>+-+*X="_P!MZ!ME M<:)#;I?NN+6M7V7?@--LMYG_`#TAZHZ.K+E'G>8=_8J;ENK2*H3P%LOT_P#3 M7(KJ[1WBJCZO;#[M*. MF?ZJB6M-YWBA4;>.EGHGMUVYL1:^F;3-&$6_"[@]R5%CP5-=B]M^I;XGG0A& MJ,X8O"1_HS8>HX^>-_YX>>?[20`T^$RRV;YE[96R_*]RN7T)F2,9W_`'IMZOR>Z?VV\%;.E;(Y1^.^7M<%\T#/TRW= M.DO$/6+H(57?:*$F]9:@0^!O)Z75]D=ZO@"J4Q_\]_P`>W8VW.7K3/J-5-,) M1[Q"H+G!R;X!_>&<1KM;)TX=5TKI5VN_470N5,ZW86BF.]EIA_4ZRGJ_XY\!0?K9&3*I/1B3E_4F$K!?**3! MT5B!,JFCT_=P/.`CWT#>;#$I8NDE[-Z>M$;C`_T32KDISD=4KJ0#7#V_(B0' M9$BLO9'J[F5?Z4I+'JJNP2-2K&^F&%A3<=U49414K MEDODI/>J"V!5/F'^S=N_0WMR_??ZK3WT?T;BAW879RUO)_P#/'FA1Q"HPZ2U, M'^['"_Z^K)IAC=Q2.MNV[7B_W-(\Q+971*Y]LI,I*/F`DPYO-U#/E'@'+UIK MB?5^[+#ERJ\!D3GKM,WTJK5XQVU:V<6+'`'('[`B`_5+=NT)_'+2TM7W"/@- M$?@%\`#?I5F0]O7G[@98:_7ZYS.?0?1A69TV(W%6X$=N,(_?$D[>UWM'"9FI MMOP/XWM>IQ[J>ROJ\XCB?Y`49;.38^BJP[P M6C#GZ^MS:9>,Q./>A?ZJ?>B$EK!%))2H.Z8_N34UYJLY3\3]@YV;UK^`K&N8 MSA0CI/!>S]C-$;6?^GE^KU1J+SD^=SL^3Z9W']WC$:'R*.+55\[H?[]T'>$5 M3'VQ[ZW/I+7^/[\`7F0\P'[RE_0G-$[6_P#=TR[0\4R,>* MGA$G/J+S[;A[@!W1R3\"J:O9R*DLF25))]]_Q`2XQV+\OU>\5\GP`V5K6=\[ M3+I[#U,YG"S'UZGS;%I:C`V:2+L*:'4N:>^"3Y5X]?3I#L?]\Z'M&L:,.ML? M>[ M'!.>LN^@/[UY^1[/CM2NC_*/M5]7DKG'>QN9K\_4=ZQ\O/@'(X5D#'E7#'=`7)Z<7E79VYZW>M:+T:[Z.]$.)B:_%\=EE/!IFL!\F,D$.EL=_EA>. MVT.;1M!$BADU<6%/BV3[L=3$BL8L94@+;T]KP6[P31;3[*#:*T8&Z"2-0J?+ MMJ"-,I\,8O\`50Q#VRZILLD"[N0<%>/J^NU9H*^H[7I77<>XH+-A->=^GOCQ MV+.T]`^C_KLG"(-;5>5G;Z0[V!/^T>'+;/[EG;(>8HG];_L!N@A/AJ_X>^@X MFK[;_P`!M+\`O@!!V+F&_P!ZU7=97/\`G_ZB>F>7J+ENF[EW<2Z9X%_;2R]U M]WETFS2[RHY'2VCL15?V=UU7'.,\Z&,,AGP&H#S/]JL=/9)F\Y]*.6O/1E-X MSD[5+SKOK77NVT26K=+V)`K]!3I?2A(Y('>2KOM?Q:KEGEEV.G@%QN*?)7;/ MVG^:=]#)L.VWGG\E^@,!RUH(^3*'[G_K#]Y(1UV[7,^W_L'[SY%I7\_\?-WY MO@-B*7\'^MU/ZU]G^M?@X'X#\-]+\?\`@_L&OQ7XKZ'_`*/L_L/I_0^3_P`/ MD^7^/^/@,6$M8&K&("@>?ZB8PMKQ)Y1[Z*9J:G'Y7W_G?HY;\`4Z+)OKJ&15 M)RC*^6RC-0>U-<4-]^5OB9?*Y70GFFI\?_@,(_>W=?ZSSU-[/[CG*Q@:26+] M#=T+8_SB0CM-)5?ME#9IVR_K]5'Q=DM'(_WO$L=F_P`!K2+.67($?[Y=RR*/2!=JU5*^;LA-:XN`E[YN1U=:^3OP#]\`-OK M7]!_HLF_L+IMR#^;`OU'N8\AJU'FK_OPU_3WI?Z937QA=# MG/.W=<\X?J',_<3*79J4W:\#?ZL[8)XM=`I'YCB?E3\P75E30*WOR4:'-VR; MZ,3I0CVU?T&KRFL;=JE>=-M[GB&(F86]L(L9XT-],N)5#> M)"&^6V@)&U^?U4DWTM(&'/-FZJ\OL:%5Y%"S"+A_]B8=RY97+&;>?J$\E^TX M*]'7+YF,_P#K?5;601R%BW+S.N$#=/,!K>P,+._6*_J M/:]9,Q$FI&^(YQ*IO;7O`9_1_/\`/#GH+4.^U%B"BON/`OX5.^MCB`9&06W,G6EUR4HD\D]@\5SL?D/O0@.<-8=V+EJ:6;Z-;)?\`LGA* MV7=#J\K>NOSZ?\]%=BQ]#8L;=BOX,/>5^24WSS;GYMHD4I4=IQ:>)4%L^1&@ M5LNPY3,W>Y5,YYL*5>3&=G+I/PO3?D]#?4V_*[C'S<[WO``TN9\@*S'!.E]CZ3:2UFF%]G>@VAQ.&_Z8_OZ*BJS61(?`G/5[G]S=X$I]G->:G-"ON:?./H<_AV^N]7>U6!V6-*L$^<&?YCS6]^N*G. M$7#X/_\`XCTY:K1JY^Z^U:<@??\`P#YYT3YM_K&F_KY[=.CG]D?Y^]B?LL8- M3=?EDX#YPYC"9G*R6J+VE=".472E7/\`W(LNS^0^+9XQWH&QYAX!_K]9 M2U0ODZ\GB_YY\`2W MP$.T7]2_KXZ_?OM_T3].)_W7[S^?M/U+\)._8_NOE_\`+[?\/];Y_P"/^?E_ MGX#'FE1Y;_Z9>*DVDCTKT;3Z)H>PW2Z'GB=T>)DE9AW6$^E(_P!\JACYPY`_ M(\,^U;KKR*;Z'8?%K^WY\!'A-C`/[6VGH=9[-W070;U!^:3^#\:\)Z^@[Z?S M1.B]U1960],[>`V2:0F#4K`.SD*ZE_BE]!_S]KR2C.-+11S=AD42?+_ M`/H`B[DCU9F4,.=SOIOFG]SR,B@C5O.SYB,FW^P_3V:60X-*1]]]R[R7];^0 MNVM3Y[_LUWZ#VR?L/Z)Z@_CCT8,Y4_A^XUY%YH'65?15/ M59"7"4A=MP1]E>CHP;$'1*&CC M&+=C*'6@IB_DU-ZL48DOMOML/2V)D>0%C4S&4]%IO]4VOJYM[F1^I'C']2H, M`=(U^;O[R-OR-;;?MI*S3-W?-$_9/TB;!^:_[%^\_(Q>*^3X"V>I\>_JB?E= MU'^K_P#MO\R^?;U71WMI_P!"N\XU\RI/"7F._P#7_P#A7U$\[??FO_'Y/H_R $KX#_V3\_ ` end CORRESP 19 filename19.htm SEC Response Letter

April 30, 2012

VIA EDGAR SUBMISSION

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, DC 20549

Attention: Jeffrey P. Riedler

Re: Durata Therapeutics, Inc.

Registration Statement on Form S-1

File Number 333-180280

Ladies and Gentlemen:

On behalf of Durata Therapeutics, Inc. (the “Company”), submitted herewith for filing is Amendment No. 1 (“Amendment No. 1”) to the Registration Statement referenced above (the “Registration Statement”).

Amendment No. 1 is being filed in response to comments contained in the letter dated April 18, 2012 from Jeffrey P. Riedler of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) to Paul R. Edick, the Company’s Chief Executive Officer. The responses set forth below are based upon information provided to Wilmer Cutler Pickering Hale and Dorr LLP by the Company. The responses are keyed to the numbering of the comments and the headings used in the Staff’s letter. Where appropriate, the Company has responded to the Staff’s comments by making changes to the disclosure in the Registration Statement as set forth in Amendment No. 1.

On behalf of the Company, we advise you as follows:

FORM S-1

General

1. Please provide us proofs of all graphic, visual, or photographic information you will provide in the printed prospectus prior to its use, for example in a preliminary prospectus. Please note we may have comments regarding these materials.

Response: The Company does not currently intend to include any graphic, visual or photographic information in the printed prospectus. If the Company

Securities and Exchange Commission

April 30, 2012

Page 2

determines to include any visual information in the prospectus, the Company will promptly provide such material to the Staff on a supplemental basis. The Company acknowledges that the Staff may have additional comments regarding this material.

2. Please note that where we provide examples to illustrate what we mean by our comments, they are examples and not complete lists. If our comments are applicable to portions of the filing that we have not cited as examples, please make the appropriate changes in accordance with our comments.

Response: The Company acknowledges the Staff’s comment. To the extent applicable, the Company has revised the disclosure in other portions of Amendment No. 1 in response to the Staff’s comments.

3. Please update the discussion in your prospectus to the most recent date practicable.

Response: The Company acknowledges the Staff’s comment. To the extent applicable, the Company has revised the disclosure in Amendment No. 1 to the most recent date practicable.

4. Please note that our comments on your request for confidential treatment will be provided under separate cover. Please be advised that we will not be in a position to consider a request for acceleration of effectiveness of the registration statement until we resolve all issues concerning the confidential treatment request.

Response: The Company acknowledges the Staff’s comment.

5. Please note that when you file a pre-effective amendment containing pricing-related information, we may have additional comments. As you are likely aware, you must file this amendment prior to circulating the prospectus.

Response: The Company acknowledges that the Staff may have additional comments when the Company files a pre-effective amendment containing pricing-related information. The Company is aware that it must file this amendment prior to circulating the prospectus.

6. Please note that when you file a pre-effective amendment that includes your price range, it must be bona fide. We interpret this to mean that your range may not exceed $2 if you price below $10 per share and 20% if you price above $10.

Response: The Company acknowledges the Staff’s interpretation regarding the parameters of a bona fide price range. When the Company files a pre-effective amendment containing a price range, the range will satisfy these parameters.

Securities and Exchange Commission

April 30, 2012

Page 3

Our Market Opportunity Overview, Page 2

7. We note your reference to overall sales of $1.5 billion for major branded antibiotics including Cubicin, Tygacil and Zyvox. Please clarify whether sales of vancomycin are included in this estimate and whether overall sales were solely related to the treatment of abSSSI. If these sales were not solely related to the treatment of abSSSI, please expand the discussion to clarify what portion of such sales correlates to your target market.

Response: The Company advises the Staff that sales of vancomycin are not included in the $1.5 billion sales estimate for branded antibiotics and that overall sales were not solely related to the treatment of abSSSI. The Company has revised the disclosure on pages 2 and 62 of Amendment No. 1 accordingly.

Dalbavancin Overview, page 2

8. Here and elsewhere in your prospectus where you discuss the fact that dalbavancin previously completed three other Phase 3 clinical trials, please clarify whether these trials will be relevant to the FDA’s consideration of marketing approval for dalbavancin and in all instances make clear that these tests were conducted pursuant to FDA guidelines that are no longer in effect.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 3, 12, 60, 61 and 64 of Amendment No. 1.

9. We note your disclosure that between 2005 and 2007, the FDA issued three approvable letters relating to the NDA for dalbavancin filed in 2004, which NDA was later withdrawn by Pfizer. Please advise us whether there is any relationship between the approvable letters and the three completed Phase 3 clinical trials for dalbavancin. Similarly, please advise us whether the EMA’s questions about the approvability of Pfizer’s MAA application related to any of the three completed Phase 3 trials that you reference. We may have further comment based on your response.

Response: The Company advises the Staff that the NDA filed for dalbavancin in 2004 was based on and included results from the three completed Phase 3 clinical trials for dalbavancin. Pfizer’s MAA for dalbavancin also was based on and included the results from the three completed Phase 3 clinical trials for dalbavancin.

10. Please expand the discussion to explain the meaning and significance of the terms:

•
“primary efficacy endpoint of non-inferiority;” and

•
“pivotal clinical trial.”

Securities and Exchange Commission

April 30, 2012

Page 4

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 3 and 60 of Amendment No. 1.

Differentiating Factors of Dalbavancin, page 3

11. We note your discussion concerning the use of PICC for the administration of vancomycin. Please expand the discussion to explain how Dalbavancin is administered.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 3 and 65 of Amendment No. 1.

Risk Factors

“We may need substantial additional funding…,” page 10

12. To the extent possible, please quantify the cost of your currently anticipated research and development activities through completion of Phase 3 for dalbavancin.

Response: In response to the Staff’s comment, the Company has revised the disclosure on page 10 of Amendment No. 1.

13. We note your estimates are based upon deferral of a $25 million milestone payment to Pfizer. Please expand the discussion to explain whether you have an unconditional right to defer this payment by delivering of a promissory note and the effect of exercising this option.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 10, 37 and 57 of Amendment No. 1.

“If we experience delays or difficulties in the enrollment of patients…,” page 13

14. Please expand the discussion to indicate whether you have encountered any difficulties in patient enrollment with respect to your two ongoing Phase 3 clinical trials and how these delays have impacted the cost and timing of these trials.

Response: The Company advises the Staff that it has not encountered any material difficulties to date in patient enrollment with respect to its two ongoing Phase 3 clinical trials.

“We expect to depend on collaborations with third parties…,” page 19

15. Please expand the discussion to clarify whether and the extent to which you currently have collaboration agreements.

Response: The Company advises the Staff that it does not currently have any collaboration agreements. The Company has revised the disclosure on pages 19 and 20 of Amendment No. 1 accordingly.

Securities and Exchange Commission

April 30, 2012

Page 5

“We rely on third parties to conduct our clinical trials…,” page 20

16. Please identify the third party contract research organizations you are reliant upon in this risk factor. In addition, please file your agreements with these organizations as exhibits to the registration statement and describe their material terms in the Business section of the prospectus. Alternatively, please provide us with an analysis that supports your conclusion that the agreements are not required to be filed pursuant to Item 601(b)(10) of Regulation S-K.

Response: The Company advises the Staff that it does not believe that it is substantially dependent on any particular third party for conducting its clinical trials. The contracts with contract research organizations and other third party service providers that conduct the Company’s clinical trials are terminable by the Company on short notice without penalty. In addition, the Company believes that there are many third parties that can perform the services described in this risk factor and that the Company could easily replace any of these third parties without significant delay, expense or other disruption. The Company respectfully submits that because it is not substantially dependent upon any such third party for conducting its clinical trials, the identity of the third parties that conduct the Company’s clinical trials is not material to investors in this offering.

The Company also believes that its arrangements with contract research organizations and other third party service providers that conduct the Company’s clinical trials are of the type that ordinarily accompany the kind of business conducted by the Company and are made in the ordinary course of business. As discussed above, the Company does not believe that the Company’s business is substantially dependent on any specific arrangement. Accordingly, the Company respectfully submits that the agreements with these third parties are neither required to be filed as exhibits to the Registration Statement nor described in the Business section of the prospectus.

“If we fail to comply with our obligations in the agreements under which we in-license…,” page 22

17. Please expand the discussion to state whether you have filed a regulatory approval application in Japan and, if not, whether you currently believe you will timely file the required application.

Response: In response to the Staff’s comment, the Company has revised the disclosure on page 22 of Amendment No. 1.

Securities and Exchange Commission

April 30, 2012

Page 6

“Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights….” Page 24

18. To the extent you have experienced problems in the past or are aware of any claims regarding infringement of intellectual property rights, please expand the discussion to describe these problems or claims.

Response: The Company advises the Staff that it has not experienced any problems in the past and that it is not aware of any claims regarding infringement of its intellectual property rights.

Management’s Discussion and Analysis, page 43

Overview

19. Please expand the discussion to quantify the anticipated amount of additional costs associated with a public company.

Response: The Company advises the Staff that it cannot reasonably estimate the anticipated amount of additional costs associated with becoming a public company. However, the Company has revised its disclosure on pages 45 and 46 of Amendment No. 1 to qualitatively describe the categories of, and reasons for, such additional costs.

Critical Accounting Policies and Significant Judgments and Estimates

Accrued Research and Development Expenses, page 46

20. You disclose that you do not expect your estimates to be materially different from the amounts actually incurred. Please revise to disclose how accurate the estimate has been in the past and how much the estimate has changed in the past. Please refer to Section 501.14 of the Financial Reporting Codification added by FR-72.

Response: In response to the Staff’s comment, the Company has revised the disclosure on page 48 of Amendment No. 1.

Share-Based Compensation, page 46

21. We have read your disclosure and have the following comments:

•
Please discuss the significant factors, assumptions, and methodologies used to determine enterprise fair value at each date and the enterprise value allocation method used at each valuation date.

Securities and Exchange Commission

April 30, 2012

Page 7

•
You disclose that in 2011 you used a marketable equity value based on the most recent preferred stock financing which you believed to be the most indicative of your value and that the reverse backsolve method was used to estimate the enterprise value of your company. Please describe the reverse backsolve approach to applying the option pricing method, why it was the appropriate method at this stage, and disclose why you believe the most recent preferred stock financing is the best indication of value.

•
Also, you disclose that the most significant preference of the preferred stock holder is the liquidation right. It appears that the liquidation preference of the preferred stock would be less valuable as the likelihood of an initial public offering increases. Please tell us when your board of directors began contemplating your initial public offering and the date you commenced discussions with your underwriter. Discuss how these events impacted your valuations in 2011, including your assumption that the earliest liquidity event will be January 1, 2014.

•
Once you can reasonably estimate the IPO price, qualitatively and quantitatively discuss each significant factor contributing to the difference between each valuation and the estimated IPO price.

•
Please update your schedule of stock options granted to the date of your response to these comments.

•
Disclose the intrinsic value of the outstanding vested and unvested options based on the estimated IPO price and the options outstanding as of the most recent balance-sheet date presented in the registration statement.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 49, 50, 51 and 52 of Amendment No. 1 to clarify the significant factors, assumptions and methodologies used at each valuation date and the enterprise value allocation method used at each reporting date, to further describe the reverse backsolve approach and indicate why it believes that approach was the appropriate method and to update the schedule of stock options granted.

As of the December 31, 2011 valuation, the Company was not in discussions, with bankers or other parties related to a potential near term liquidity event, such as an IPO or a sale. Those discussions began in late January 2012. Since the discussions with underwriters did not start until January 2012, they did not have an impact on the Company’s December 31, 2011 valuation.

Once the Company can reasonably estimate the IPO price, it will qualitatively and quantitatively discuss each significant factor contributing to the difference between its most recent valuation and the estimated IPO price. The Company has already disclosed the significant contributing factors to differences between each of the previous valuations.

Securities and Exchange Commission

April 30, 2012

Page 8

Once the Company can reasonably estimate the IPO price, it will disclose the intrinsic value of its outstanding vested and unvested options based on such price and the outstanding options as of the most recent balance sheet date presented. To provide additional context for this response and further information for the Staff’s consideration, the Company supplementally advises the Staff that the Company currently anticipates that the price range for this offering will be within the range of $1.62 to $2.43 per share (before giving effect to a reverse stock split that the Company plans to implement prior to effectiveness of the Registration Statement). This indicative price range is based on a number of factors, including existing conditions in the public capital markets, the Company’s prospects and the prospects and history for the Company’s industry, the market prices of comparable publicly traded companies and preliminary discussions with the underwriters regarding potential valuations of the Company. The actual price range to be included in a subsequent amendment to the Registration Statement (which will comply with the Staff’s interpretation regarding the parameters of a bona fide price range) has not yet been determined and remains subject to adjustment based on factors outside of the Company’s control. However, the Company believes that the foregoing indicative price range will not be subject to significant change.

In addition, the Company supplementally advises the Staff that the Company intends to include an explanation of the board of directors’ determination of the fair value of the common stock underlying the stock options that the Company granted in April 2012 in a subsequent amendment to the Registration Statement. The board’s determination of the fair market value of the Company’s common stock for the purposes of the April 2012 stock option grants was based, in part, on a valuation that was performed as of March 31, 2012. In a subsequent amendment to the Registration Statement, the Company proposes to add the following disclosure regarding the March 31, 2012 valuation.

“In January 2012, we began discussion with underwriters regarding a potential IPO. During the remainder of the first quarter of 2012, we made significant progress in our preparation for a potential IPO, including engaging the underwriters for this offering, selecting outside counsel and preparing drafts of the prospectus for this offering. We initially filed our registration statement for this offering with the Securities and Exchange Commission on March 22, 2012. Our board of directors considered market conditions and a shorter time to an expected liquidity event when it determined the fair value of our common stock as of March 31, 2012. After consideration of these factors, we decided to use a probability-weighted expected return model, or PWERM, to determine our enterprise

Securities and Exchange Commission

April 30, 2012

Page 9

value and related allocation. This approach models potential future liquidity events and applies probabilities to each scenario. These future liquidity events are then discounted to present value and, after applying the relevant probability for each potential event, result in a probability-weighted equity value of a company. With the initial filing of the registration statement for this offering, the probability of an IPO has increased significantly in the near term. However, given the current market environment, specifically as it relates to life sciences companies, there is no certainty that there will be sufficient demand for this offering at a price that will be attractive enough to consummate the offering, or at all. We estimated the probability of an IPO in two to six months at 40%, an IPO in nine to twelve months at 30%, and remaining private with an exit in July 2013 or July 2014 at 30%. We anticipate that if we miss the two IPO windows the most likely exit event will be in the form of an acquisition. As a result, a 21% probability (based on 30% probability of remaining private multiplied by 70% probability of a merger or sale) was assigned to the backsolve method developed under an assumed merger or sale exit event and a 9% probability was assigned to the backsolve method developed under an assumed IPO exit event. A discount rate of 19% was applied, based on the industry cost of equity of public peer companies using the capital asset pricing model. The risk free rate used in our analysis ranged from 0.07% to 0.27% and the volatility ranged from 77% to 103% depending on the term assumption under each scenario. The results of the PWERM were reduced by a discount for lack of marketability of 11% for the two to six month scenario and 16% for the nine to 12 month and remaining private scenarios. This resulted in our board of directors determining that the fair value of our common stock was $1.25 per share.”

Business – Overview, page 58

22. Please expand the discussion relative to your various trials to indicate when the specific trial referred to in discussion was completed.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 3, 12, 60 and 64 of Amendment No. 1.

23. Please disclose the meaning and significance of “inter- and intra-observer variability” on page 62.

Response: In response to the Staff’s comment, the Company has revised the disclosure on page 65 of Amendment No. 1.

Securities and Exchange Commission

April 30, 2012

Page 10

24. We note that if the Phase 3 clinical trials are successful you intend to submit a NDA in the first half of 2013. Please expand the discussion to indicate the anticipated duration of the FDA approval process.

Response: In response to the Staff’s comment, the Company has revised the disclosure on page 68 of Amendment No. 1.

25. We note your reference to possible advantages of dalbavancin compared to currently available treatments. Please balance the discussion to describe the negative aspects, if any, of your product including cost, resistance issues, and limitations.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 1, 3, 60 and 65 of Amendment No. 1.

Antibiotic Market Overview, page 59

26. Please expand the discussion to indicate the basis for the following statements:

•
“More than 95% of all abSSSI is caused by Gram-positive bacteria.”

•
“… overall sales in excess of $1.5 billion.”

•
“.. .the estimated excess cost related to antibiotic resistance is approximately $20 billion annually.”

•
“… approximately 35 million days of treatment annually for MRSA utilizing intravenous antibiotics, with approximately 75% of these treatments occurring in the hospital setting and the remaining 25% occurring in the out-patient setting.”

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 2 and 62 of Amendment No. 1.

27. We note your product is designed to treat abSSSI. Please expand the discussion to clarify the extent to which your references to $1.5 billion of annual sales and estimated excess cost of $20 billion related to antibiotic resistance refer to sales or expenses pertaining to the treatment of abSSSI.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 2 and 62 of Amendment No. 1.

Differentiating Factors of Dalbavancin, page 63

28. With respect to the graph at the top of page 64, please disclose the doses of vancomycin that were administered.

Response: In response to the Staff’s comment, the Company has revised the disclosure on page 66 of Amendment No. 1.

Securities and Exchange Commission

April 30, 2012

Page 11

Ongoing Phase 3 Clinical Trials, page 65

29. We note you intend to enroll approximately 556 patients in each of the two pending trials. Please expand the discussion to indicate the approximate number of enrollees you currently have in each trial as of the most recent practicable date.

Response: In response to the Staff’s comment, the Company has revised the disclosure on page 68 of Amendment No. 1.

Employees, page 84

30. We note you have 17 employees, including your executive staff, engaged in clinical and business development activities. Please expand your disclosure to describe any consulting agreements, independent contractor arrangements or other means by which you engage personnel to carry out the development of your proposed products. To the extent any of such arrangements are material to your business, please revise the discussion to provide a description of the material terms of each agreement, including, but not limited to, payment provisions, obligations, rights, term and termination provisions. In addition, please file these agreements as exhibits or provide us with a detailed analysis supporting your determination that the agreements are not required to be filed pursuant to Item 601(b)(10) of Regulation S-K.

Response: Consistent with the response to comment 16 above, the Company advises the Staff that it does not believe that it is substantially dependent on any particular third party service provider for development of its product candidates. Contracts with third party service providers are terminable by the Company on short notice without penalty. In addition, the Company believes that there are many third parties that can perform these services and that the Company could easily replace any of these service providers without significant delay, expense or other disruption. The Company respectfully submits that because it is not substantially dependent upon any such service provider for development of its product candidates, the identity of the service providers that assist in development of its product candidates is not material to investors in this offering.

The Company also believes that its arrangements with third party service providers that assist in the development of its product candidates are of the type that ordinarily accompany the kind of business conducted by the Company and are made in the ordinary course of business. As discussed above, the Company does not believe that the Company’s business is substantially dependent on any specific arrangement. Accordingly, the Company respectfully submits that the agreements with these consultants are neither required to be filed as exhibits to the Registration Statement nor described in the Business section of the prospectus.

Securities and Exchange Commission

April 30, 2012

Page 12

Consolidated Financial Statements

Consolidated Statement of Cash flows, page F-6

31. It appears that Pfizer’s $6 million refund of the original purchase price in 2011 should be classified as cash flows from investing activities. Please tell us why you disclose $579,000 as the proceeds from the receipt of the contingent receivable in investing activities and $5,421,000 as the change in receivable in operating activities.

Response: The Company advises the Staff that it accounted for the contingent receivable in its cash flow statement consistent with the treatment for contingent consideration. The Company analyzed the two elements of the arrangement and bifurcated the portion that related to its initial recognition and measurement of consideration transferred as a financing activity (financed purchase price of $579,000) and the portion that related to subsequent changes in measurement as an operating activity as it generated net income ($5,421,000). The portion of the contingent consideration arrangement that is included as part of the initial measurement of consideration is a method of financing the acquisition of a target, and classification as a financing activity is consistent with Accounting Standards Codification (“ASC”) subparagraph 230-10-45-13c, which indicates that the portion of property, plant, equipment and other productive assets that is not paid for at or soon after the time of purchase is considered seller financing, and future payments are treated as repayment of debt principal, which is a financing activity. The portion of the contingent consideration arrangement recognized in earnings as operating income is classified as cash flows from operating activities in the cash flow statement, including both (1) accretion expense and (2) changes in amount or timing of payment. This is based on the guidance in ASC Section 230-10-20 that states, in part, that “cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of net income.”

(3) Acquisitions, page F-10

32. You identify several key assumptions used to fair value the in-process research and development acquired relating to dalbavancin. Please quantify these assumptions. For example:

•
the period in which material net cash inflows from significant projects are expected to commence;

•
material anticipated changes from historical pricing, margins and expense levels; and,

Securities and Exchange Commission

April 30, 2012

Page 13

•
the risk adjusted discount rate applied to the project’s cash flows.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages F-11 and F-12 of Amendment No. 1

33. Further, please explain to us how you accounted for the fair value of the dalbavancin inventory acquired from Pfizer. Also it appears that documentation that supported your position that marketing approval for dalbavancin required more than one new Phase 3 clinical trial is a triggering event that could indicate a possible impairment of IPR&D and goodwill. Please disclose the conclusion of your impairment analysis related to this event.

Response: The Company advises the Staff that it did not assign value to the $250,000 of inventory acquired from Pfizer as the majority of the inventory received was product from the previously completed Phase 3 clinical trials that was primarily used for batch validation and had no alternative future use outside of the in-process research and development (“IPR&D”) for dalbavancin. As such, the Company did not believe it was capitalizable as an asset until it was used. Other inventory included test tubes and other equipment that the Company mostly disposed of upon the acquisition.

The Company’s decision to conduct an additional Phase 3 clinical trial increased its estimated costs to receive regulatory approval. This event, which occurred in the fourth quarter of 2010, was subsequent to two events that increased the Company’s estimate of the probability of regulatory approval and, as a result, the total net projected cash flows from the IPR&D asset and the Company. The first event was the end of Phase 2 meeting with the FDA in June 2010, and the second event was the receipt of Special Protocol Agreement from the FDA on the Company’s first Phase 3 clinical trial in September 2010. Because the Company determined to conduct a second Phase 3 clinical trial in the fourth quarter of 2010, the Company did not perform an additional impairment test apart from its December 31, 2010 impairment tests of the IPR&D asset and goodwill. No impairment was noted as a result of the Company’s impairment tests. The Company respectfully advises the Staff that it does not believe that there is a requirement to disclose this event as the Company already states that it completed the required annual impairment tests for IPR&D assets and goodwill. However, the Company has revised the disclosure on page F-9 of Amendment No. 1 to add disclosure to explicitly state that there were no impairments as a result of the Company’s tests.

34. With respect to the fair value of the contingent consideration, please provide the disclosures required under paragraphs 2(b) and (e) of ASC 820-10-50. Also explain to us how the changes in fair value that reflect only the passage of time comply with ASC 820.

Securities and Exchange Commission

April 30, 2012

Page 14

Response: In response to the Staff’s comment, the Company has revised the disclosure on page F-12 of Amendment No. 1 to include the requested disclosures, which now describe the level within the fair value hierarchy that the contingent consideration falls and the probability of payment and receipt of the contingent consideration items for each period presented.

To clarify, the Company’s subsequent measurement of the fair value of contingent consideration is based on (1) the passage of time and (2) revisions to the amount or timing of the initial measurement of the contingent consideration based on new information available to the Company as required by ASC 820. The Company respectfully advises the Staff that it believes its disclosures in the footnotes comply with ASC 820.

(5) Stockholders’ Equity and Stock Compensation

(a) Common Stock, page F-12

35. Please tell us and disclose how you determined the fair value of the 500,000 restricted shares.

Response: In response to the Staff’s comment, the Company has revised the disclosure on pages F-12 and F-13 of Amendment No. 1. The Company advises the Staff that the estimated fair value per share used for the grant of 500,000 shares of restricted common stock was $0.05 ($25,000 of compensation expense) and was based on a contemporaneous valuation of the Company’s common stock as of December 31, 2009 in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid. Based on the valuation methodology selection criteria set forth in the Practice Aid, with a focus on the early stage of the Company’s development, including the status of its development efforts, very limited operations and the fact that it had an incomplete management team, as of December 31, 2009, the Company determined that an asset-based approach was the most appropriate method to use to determine the enterprise value of the Company. The Company then allocated the enterprise value using the current value method.

(b) Series A Convertible Preferred Stock, page F-12

36. Based on your disclosure it appears that there is an initial conversion price and the conversion price in effect at the time of the conversion. Please disclose how the latter conversion price is determined and the events that make the initial conversion price subject to change.

Securities and Exchange Commission

April 30, 2012

Page 15

Response: In response to the Staff’s comment, the Company has revised the disclosure on page F-13 of Amendment No. 1

(9) Income Taxes, page F-16

37. Please revise your disclosure to explain how the value of the acquired IPR&D resulted in a deferred tax liability and how certain deferred tax assets can be recognized up to this amount. Include a schedule of your deferred tax assets and liabilities as required by ASC 740-10-50-2 and disclose the expiration dates of your net operating loss carryforwards as required by ASC 740-10-50-3. Disclose a reconciliation of the tax expense (benefit) using statutory rates to the amount of reported income tax expense (benefit) as required by ASC 740-10-50-12.

Response: The Company advises the Staff that because the Company acquired the IPR&D in a non-taxable transaction, the tax basis in the IPR&D was zero. As a result, the Company recorded a deferred tax liability for the book-to-tax basis difference in its IPR&D asset as required by ASC 740. Although IPR&D is classified as an indefinite-lived asset, the Company determined with sufficient reliability that the IPR&D asset would, at a minimum, begin to reverse beginning in 2014, which is the expected year of marketing approval for dalbavancin. The Company estimated a 10 year amortization period and notes that the substantial majority of its earliest net operating losses do not begin to expire until 2029. As a result, the Company considered the deferred tax liability reversal as a source of taxable income in the Company’s assessment for the need for a valuation allowance as required under ASC 740.

The Company respectfully advises the Staff that it disclosed the components of its deferred tax assets and liabilities in narrative format and believes the disclosure complies with ASC 740-10-50-2 in this respect. In response to the Staff’s comment, the Company has revised the disclosure on page F-17 of Amendment No. 1 to add disclosure regarding the expiration date of the Company’s net operating loss carryforwards and a rate reconciliation of tax expense (benefit).

Exhibits

38. We note exhibits 3.3 and 3.4 are “forms of “exhibits. Please tell us when you anticipate filing the actual documents currently reflected as “forms of.”

Response: The Company has filed Exhibits 3.3 and 3.4 with Amendment No. 1.

Securities and Exchange Commission

April 30, 2012

Page 16

39. Please file the executive management employment agreements as exhibits.

Response: The Company has added descriptions of the executive management employment agreements in Amendment No. 1 and intends to file the executive management employment agreements with a subsequent amendment.

40. Please file your pre-IPO incentive plan and the 2012 stock incentive plan as exhibits.

Response: The Company filed its pre-IPO stock incentive plan with the initial filing of the Registration Statement as Exhibit 10.1 and it has filed the 2012 stock incentive plan with Amendment No. 1.

* * *

Securities and Exchange Commission

April 30, 2012

Page 17

If you have any further questions or comments, or if you require any additional information, please contact the undersigned by telephone at (212) 937-7206 or facsimile at (212) 230-8888. Thank you for your assistance.

Very truly yours,

/S/ BRIAN A. JOHNSON

Brian A. Johnson