Exhibit 10.3

TAX SHARING AGREEMENT

This Tax Sharing Agreement (this “Agreement”) is entered into as of June 14,
2010 between Pharmaceutical Product Development, Inc., a North Carolina
corporation (“PPD”), and Furiex Pharmaceuticals, Inc., a Delaware corporation
that currently is wholly owned subsidiary of PPD (“Furiex” each of PPD and
Furiex is a “Party” and, together are the “Parties”. Terms used in this
Agreement and not otherwise defined herein shall have the meanings ascribed to
such terms in the Separation and Distribution Agreement, dated as of the date
hereof, by and between PPD and Furiex (the “Separation Agreement”).

RECITALS

WHEREAS, PPD is the common parent corporation of an affiliated group of
corporations within the meaning of section 1504(a) of the Internal Revenue Code
of 1986, as amended (the “Code”), which has filed consolidated federal income
tax returns;

WHEREAS, Furiex is a newly formed, wholly owned subsidiary of PPD;

WHEREAS, pursuant to the Separation Agreement, among other transactions PPD will
transfer to Furiex all of the Furiex Assets and Furiex will issue to PPD shares
of Furiex Common Stock (the “Contribution”);

WHEREAS, on the Distribution Date at the Effective Time, PPD will distribute all
of the issued and outstanding shares of Furiex Common Stock on a pro rata basis
to holders of PPD Common Stock (the “Distribution”);

WHEREAS, the Parties intend that the Distribution qualify as a non-taxable
distribution described in section 355 of the Code (the “Distribution Tax
Treatment”);

WHEREAS, the Parties intend that after the Distribution Date Furiex will not be
a member of the PPD Group and will not be includable within PPD’s tax return for
federal income tax purposes;

WHEREAS, the Parties intend that the Contribution, taking into account the
Distribution, qualify as a series of tax-free transfers under the Code (the
“Contribution Tax Treatment”); and

WHEREAS, the Parties desire to set forth their rights and obligations with
respect to Taxes (as defined herein) due for periods before and after the
Distribution Date;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.01 General. As used in this Agreement, the following terms shall have the
following meanings:

“Affiliate” shall have the meaning set forth in the Separation Agreement.

“Agreement” shall have the meaning set forth in the preamble to this Agreement.

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“Ancillary Agreements” shall mean the Ancillary Agreements as set forth in the
Separation Agreement, together with the Separation Agreement.

“Code” shall have the meaning set forth in the recitals.

“Compound Business” shall have the meaning set forth in the Separation
Agreement.

“Contribution” shall have the meaning set forth in the recitals.

“Contribution Tax Treatment” shall have the meaning set forth in the recitals.

“Dispute” shall have the meaning set forth in Article VIII.

“Distribution” shall have the meaning set forth in the recitals.

“Distribution Date” shall mean the date hereof.

“Distribution Tax Treatment” shall have the meaning set forth in the recitals.

“Effective Time” shall mean 11:59 p.m., Wilmington, North Carolina time, on the
Distribution Date, at which time the Distribution is effective.

“Final Determination” shall mean a determination within the meaning of section
1313 of the Code or any similar provision of state or local Tax law.

“Governmental Authority” shall have the meaning set forth in the Separation
Agreement.

“Group” shall have the meaning set forth in the Separation Agreement.

“Liability” shall mean any particular single debt, liability or obligation that
is included within the definition of Liabilities.

“Liabilities” shall have the meaning set forth in the Separation Agreement.

“Furiex” shall have the meaning set forth in the preamble to this Agreement.

“Furiex Assets” shall have the meaning set forth in the Separation Agreement.

“Furiex Common Stock” shall have the meaning set forth in the Separation
Agreement.

“Furiex Filed Tax Return” shall have the meaning set forth in Section 2.01(b).

“Furiex Group” shall have the meaning set forth in the Separation Agreement.

“Furiex Indemnitees” shall have the meaning set forth in Section 4.01(a).

“Furiex Taxes” shall have the meaning set forth in Section 2.03(a).

“Party” or “Parties” shall have the meaning set forth in the preamble to this
Agreement.

“Person” shall have the meaning set forth in the Separation Agreement.

“Post-Distribution Period” shall mean any taxable year or other taxable period
beginning after the Distribution Date and, in the case of any taxable year or
other taxable period that begins before and ends after the Distribution Date,
that part of the taxable year or other taxable period that begins at the
beginning of the day after the Distribution Date.

 

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“PPD” shall have the meaning set forth in the preamble to this Agreement.

“PPD Filed Tax Return” shall have the meaning set forth in Section 2.01(a).

“PPD Group” shall have the meaning set forth in the Separation Agreement.

“PPD Indemnitees” shall have the meaning set forth in Section 4.01(b).

“PPD Taxes” shall have the meaning set forth in Section 2.03(b).

“Pre-Distribution Period” shall mean any taxable year or other taxable period
that ends on or before the Distribution Date and, in the case of any taxable
year or other taxable period that begins before and ends after the Distribution
Date, that part of the taxable year or other taxable period through the close of
the Distribution Date.

“Separation Agreement” shall have the meaning set forth in the preamble to this
Agreement.

“Subsidiary” shall have the meaning set forth in the Separation Agreement.

“Tax” or “Taxes” shall mean any and all taxes, charges, fees, duties, levies,
imposts, rates or other assessments or governmental charges of any kind imposed
by any federal, state, local or foreign Governmental Authority, including,
without limitation, income, gross receipts, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, custom duties,
property, sales, use, license, capital stock, transfer, franchise, registration,
payroll, withholding, social security, unemployment, disability, value-added,
alternative or add-on minimum or other taxes, whether disputed or not, and
including any interest, penalties, charges or additions attributable thereto,
(ii) liability for the payment of any amount of the type described in clause
(i) above arising as a result of being (or having been) a member of any group or
being (or having been) included or required to be included in any Tax Return
related thereto, and (iii) liability for the payment of any amount of the type
described in clauses (i) or (ii) above as a result of any express or implied
obligation to indemnify or otherwise assume or succeed to the liability of any
other Person.

“Tax Advisor” shall have the meaning set forth in Article VIII.

“Tax Contest” shall have the meaning set forth in Section 5.01.

“Tax Information Packages” shall mean any information required in order to
prepare and file any PPD Filed Tax Return.

“Tax Return” shall mean any return, report, certificate, form or similar
statement or document (including any related supporting information or schedule
attached thereto and any information return, amended tax return, claim for
refund or declaration of estimated tax) required to be supplied to, or filed
with, a Governmental Authority or any bill for or notice related to ad valorem
or other similar Taxes received from a Governmental Authority, in each case, in
connection with the determination, assessment or collection of any Tax or the
administration of any laws, regulations or administrative requirements relating
to any Tax.

 

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“Transfer Taxes” shall have the meaning set forth in Section 2.03(g).

1.02 References; Interpretation. References in this Agreement to the singular
shall be held to include the plural and vice versa and words of one gender shall
be held to include the other gender as the context requires. The terms “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement (or the applicable Ancillary
Agreement) as a whole (including all of the Schedules and Exhibits hereto and
thereto) and not to any particular provision of this Agreement (or such
Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix
references are to the Articles, Sections, Exhibits, Schedules and Appendices to
this Agreement (or the applicable Ancillary Agreement) unless otherwise
specified. The word “including” and words of similar import when used in this
Agreement (or the applicable Ancillary Agreement) shall mean “including, without
limitation,” unless the context otherwise requires or unless otherwise
specified. The word “or” shall not be exclusive. Any definition of or reference
to any statute shall be construed as referring also to any rules and regulations
promulgated thereunder.

ARTICLE II

TAX RETURNS AND TAX PAYMENTS

2.01 Obligations to File Tax Returns.

(a) PPD shall have the sole and exclusive responsibility for the preparation and
filing of each Tax Return that (i) includes any member of the PPD Group or the
Furiex Group and is for a Tax year ending on or before the Distribution Date or
(ii) includes any member of the PPD Group and is required to be filed after the
Distribution Date (each, a “PPD Filed Tax Return”); provided, however, that
(A) all PPD Filed Tax Returns shall be prepared on a basis that is consistent
with both the Contribution Tax Treatment and the Distribution Tax Treatment,
(B) Furiex shall promptly prepare and deliver to PPD in a manner consistent with
past practices pro forma Tax Returns and Tax Information Packages for any
taxable period in which any member of the Furiex Group is included in, or any
portion of the Compound Business is reflected on, a PPD Filed Tax Return,
(C) PPD shall provide to Furiex sufficiently in advance of the due date for the
filing thereof, and Furiex shall have a reasonable opportunity to review and
comment on, any such PPD Filed Tax Return (or the relevant portion thereof) to
the extent that Furiex is responsible for any portion of the Taxes reported on
such PPD Filed Tax Return, and (D) in the case of any PPD Filed Tax Return that
includes any member of the Furiex Group or the Compound Business for only the
portion of the relevant taxable period that ends on the Distribution Date, Taxes
shall be allocated to the portion of such taxable period that ends on the
Distribution Date based on an actual or hypothetical closing of the books at the
Effective Time. Each member of the Furiex Group hereby irrevocably authorizes
and designates PPD as its agent, coordinator and administrator for the purpose
of taking any and all actions necessary or incidental to the filing of any such
PPD Filed Tax Returns and, except as otherwise provided herein, for the purpose
of making payments to, or collecting refunds from, any Governmental Authority in
respect of a PPD Filed Tax Return. Except as otherwise provided herein, PPD
shall have the exclusive right to file, prosecute, compromise or settle any
claim for, or refund of, Taxes in respect of a PPD Filed Tax Return for which
PPD bears responsibility hereunder and to determine whether any refunds of Taxes
to which the PPD Group may be entitled shall be received by way of refund or
credit against the Tax liability of the PPD Group.

 

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(b) Furiex shall have the sole and exclusive responsibility for the preparation
and filing of each Tax Return that (i) is required to be filed after the
Distribution Date, (ii) includes any member of the Furiex Group or otherwise
relates to the Compound Business and (iii) is not a PPD Filed Tax Return (each,
a “Furiex Filed Tax Return”); provided, however, that, except as otherwise
required by law, (A) all Furiex Filed Tax Returns shall be prepared on a basis
that is consistent with both the Contribution Tax Treatment and the Distribution
Tax Treatment, (B) Furiex shall provide to PPD sufficiently in advance of the
due date for the filing thereof, and PPD shall have a reasonable opportunity to
review and comment on, any such Furiex Filed Tax Return (or the relevant portion
thereof) to the extent that PPD is responsible for any portion of the Taxes
reported on such Furiex Filed Tax Return, and (C) in the case of any Furiex
Filed Tax Return that includes any member of the Furiex Group or the Compound
Business for only the portion of the relevant taxable period that begins after
the Distribution Date, Taxes shall be allocated to the portion of such taxable
period that begins after the Distribution Date based on an actual or
hypothetical closing of the books at the Effective Time.

2.02 Obligation to Remit Taxes. Subject to Section 2.01 and subject always to
the ultimate division of responsibility for Taxes set out in Section 2.03, PPD
and Furiex shall each remit or cause to be remitted to the applicable
Governmental Authority in a timely manner any Taxes due in respect of any Tax
Return that such Party is required to file (or, in the case of a Tax for which
no Tax Return is required to be filed, which is otherwise payable by such Party
or a member of such Party’s Group to any Governmental Authority); provided,
however, that in the case of any Tax Return, the Party not required to file such
Tax Return shall remit to the Party required to file such Tax Return in
immediately available funds the amount of any Taxes reflected on such Tax Return
for which the former Party is responsible hereunder at least two Business Days
before payment of the relevant amount is due to a Governmental Authority.

2.03 Tax Sharing Obligations and Prior Agreements.

(a) Furiex and the members of the Furiex Group shall be responsible for the
payment of (and shall be entitled to any refund of or credit for) all Taxes
(i) that are attributable to any member of the Furiex Group or the Compound
Business for any taxable period, in accordance with the principles set forth in
clause (D) of the proviso in Section 2.01(a), but applying the principles or
assumptions that (A) the determination of any such Taxes for any
Pre-Distribution Period shall be made treating the Furiex Group or the Compound
Business, as applicable, as a stand-alone corporation, using methods and
conventions consistent with past practices, (B) such Taxes shall not include any
Taxes incurred by any member of any Group in connection with either the
Contribution or the Distribution except as required by 2.03(a)(ii), and (C) such
Taxes shall be net of any Tax attributes attributable to the Furiex Group, the
Compound Business or the PPD Group that are available (taking into account any
Tax liability incurred by any member of the PPD Group in connection with either
the Contribution or the Distribution) to reduce (whether or not they actually
reduce) the Tax Liability of any member of any Group for any Pre-Distribution
Period or any member of the PPD Group for any Post-Distribution Period, or
(ii) resulting from any breach of or inaccuracy in any representation, covenant
or obligation of any member of the Furiex Group under this Agreement (all such
taxes described in this subsection (a) are, collectively, “Furiex Taxes”).

(b) PPD and the members of the PPD Group shall be responsible for the payment of
(and shall be entitled to any refund of or credit for) all Taxes (i) that are
attributable

 

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to any member of the PPD Group, other than Furiex Taxes, or (ii) resulting from
any breach of or inaccuracy in any representation, covenant or obligation of any
member of the PPD Group under this Agreement (collectively, “PPD Taxes”).

(c) If, prior to the Distribution, a deposit (including a payment of estimated
Taxes) was made with respect to any Tax for which Furiex or the members of the
Furiex Group are responsible under this Agreement, such deposit shall be
assigned to Furiex, and Furiex shall be liable only for the amount of such Tax
ultimately due in excess of the applicable deposit. To the extent the amount of
such deposit exceeds the amount of Tax attributable to such deposit that is
ultimately due, PPD shall pay such excess over to Furiex within five days after
the filing of the applicable PPD Filed Tax Return.

(d) If one party receives refunds or claims credits with respect to Taxes for
which the other Party or the members of such other Party’s Group are responsible
under this Agreement, the receiving or claiming party shall remit payment to
such other Party in the amount of such received refund or claimed credit within
five days after the first Party receives such refund or files the Tax Return
claiming such credit, as applicable. If and to the extent that any such refund
is ultimately returned by the recipient or credit is subsequently reduced as a
result of any adjustment required by any Governmental Authority, such other
Party shall pay the amount of such returned refund or reduction to the first
Party within five days of receiving notice of such returned refund or reduction
from the first Party.

(e) At Furiex’s request, the PPD Group shall, at Furiex’s expense, use its
reasonable commercial efforts to obtain any refund or credit of a Tax or item
included in a PPD Filed Tax Return to which any member of the Furiex Group is
entitled pursuant to this Agreement, including through filing appropriate Tax
Returns or related forms with the applicable Governmental Authority; provided,
however, that the PPD Group shall not be required to comply with such request if
PPD reasonably determines that attempting to obtain such refund or credit will
have a material adverse impact on any member of the PPD Group.

(f) Except as set forth in this Agreement, any and all prior Tax sharing or
allocation agreements or practices between any member of the PPD Group and any
member of the Furiex Group shall be terminated with respect to the Furiex Group
as of the Distribution Date, and no member of the Furiex Group shall have any
continuing rights or obligations thereunder.

(g) PPD shall be liable for and shall pay on a timely basis, and pursuant to
Article IV shall indemnify, defend and hold harmless Furiex from and against,
all transfer, documentary, sales, use, registration and such other Taxes
(excluding any Taxes based on or attributable to income or gains) and related
fees (including any penalties, interest, and addition to Tax) arising out of or
incurred in connection with the Contribution or the Distribution (“Transfer
Taxes”), provided, however, nothing herein shall require PPD to pay any amounts
for which Furiex is required to indemnify PPD under Section 2.03(a)(ii) hereof.

2.04 Amended Returns.

(a) Furiex shall not, and shall not permit any member of the Furiex Group to,
file any amended Tax Return that includes any member of the PPD Group.

 

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(b) PPD shall not, and shall not permit any member of the PPD Group to, file any
amended Tax Return that increases any Furiex Tax or otherwise gives rise to
indemnification pursuant to Section 4.01(b).

ARTICLE III

COVENANTS

3.01 Furiex Covenants. Notwithstanding anything else to the contrary contained
in this Agreement or any other agreement, Furiex (on behalf of itself and all
other members of the Furiex Group) hereby confirms and agrees that neither
Furiex nor any member of the Furiex Group will take or permit to be taken any
action at any time that jeopardizes the Contribution Tax Treatment, the
Distribution Tax Treatment or both. Notwithstanding the foregoing, Furiex may
take or permit to be taken any action prohibited by the preceding sentence,
subject to, and without limiting or modifying, Furiex’s continuing
indemnification obligation under Section 4.01(b), if (a) Furiex obtains the
written consent of PPD (which consent shall not be unreasonably withheld) or
(b) Furiex obtains a ruling from the Internal Revenue Service or an opinion of a
nationally recognized firm, in form and substance reasonably satisfactory to
PPD, that the taking of such action should not materially adversely affect
either the Contribution Tax Treatment or the Distribution Tax Treatment.

3.02 PPD Covenants. Notwithstanding anything else to the contrary contained in
this Agreement or any other agreement, PPD (on behalf of itself and all other
members of the PPD Group) hereby confirms and agrees that neither PPD nor any
member of the PPD Group will take or permit to be taken any action at any time
that jeopardizes the Contribution Tax Treatment, the Distribution Tax Treatment
or both. Notwithstanding the foregoing, PPD or a member of the PPD Group may
take or permit to be taken any action prohibited by the preceding sentence,
subject to, and without limiting or modifying, PPD’s continuing indemnification
obligation under Section 4.01(a), if (a) PPD obtains the written consent of
Furiex (which consent shall not be unreasonably withheld) or (b) PPD obtains a
ruling from the Internal Revenue Service or an opinion of a nationally
recognized firm, in form and substance reasonably satisfactory to Furiex, that
the taking of such action should not materially adversely affect either the
Contribution Tax Treatment or the Distribution Tax Treatment.

ARTICLE IV

INDEMNITY OBLIGATIONS AND PAYMENTS

4.01 Indemnity Obligations.

(a) Notwithstanding whether any action is permitted or consented to hereunder
and notwithstanding anything else to the contrary contained herein, PPD shall
indemnify and hold harmless Furiex, each member of the Furiex Group and their
respective directors, officers and employees (collectively, the “Furiex
Indemnitees”) from and against, and will reimburse the Furiex Indemnitees for,
(i) all PPD Taxes, (ii) any Transfer Taxes, and (iii) all Taxes, Liabilities and
related costs, expenses and losses arising out of, based upon or relating or
attributable to any breach of or inaccuracy in any representation, covenant or
obligation of any member of the PPD Group under this Agreement.

 

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(b) Notwithstanding whether any action is permitted or consented to hereunder
and notwithstanding anything else to the contrary contained herein, Furiex shall
indemnify and hold harmless PPD, each member of the PPD Group and their
respective directors, officers and employees (collectively, the “PPD
Indemnitees”) from and against, and will reimburse the PPD Indemnities, for,
(i) all Furiex Taxes and (ii) all Taxes, Liabilities and related costs, expenses
and losses arising out of, based upon or relating or attributable to any breach
of or inaccuracy in any representation, covenant or obligation of any member of
the Furiex Group under this Agreement.

(c) Any claim for indemnification under this Section 4 shall be governed by, and
be subject to, the provisions of Article V of the Separation Agreement, which
provisions are hereby incorporated by reference into this Agreement and any
references to “Agreement” in such Article V as incorporated herein shall be
deemed to be references to this Agreement.

4.02 Notice. The Parties shall give each other prompt written notice of any
payment that may be due to the provider of such notice under this Agreement.

4.03 Treatment Of Payments. The Parties agree that any payment made between the
Parties pursuant to this Agreement or any other Ancillary Agreement with respect
to a Pre-Distribution Period or as a result of an event or action occurring in a
Pre-Distribution Period shall be treated, to the extent permitted by law, for
all Tax purposes as a nontaxable payment (i.e., a distribution or a capital
contribution) made immediately prior to the Distribution as made pursuant to an
obligation existing between the Parties as of the Distribution.

ARTICLE V

TAX CONTESTS

5.01 Notice. PPD shall promptly notify Furiex in writing upon receipt by PPD or
any member of the PPD Group of a written communication from any Governmental
Authority with respect to any pending or threatened audit, dispute, suit,
action, proposed assessment or other proceeding (a “Tax Contest”) concerning any
Taxes for which Furiex may be liable under this Agreement. Furiex shall promptly
notify PPD in writing upon receipt by Furiex or any member of the Furiex Group
of a written communication from any Governmental Authority with respect to any
Tax Contest concerning any Taxes for which PPD may be liable under this
Agreement.

5.02 Control of Contests by PPD. PPD shall have the sole responsibility and
control over the handling of any Tax Contest, including the exclusive right to
communicate with agents of the Governmental Authority and to control, resolve,
settle or agree to any deficiency, claim or adjustment proposed, asserted or
assessed in connection with or as a result of any such Tax Contest, involving
(a) any PPD Filed Tax Return, or (b) the Contribution or the Distribution or any
transaction associated therewith as described in the Separation Agreement.
Subject to PPD’s control right, upon request by Furiex, Furiex shall, at
Furiex’s expense, be allowed to participate in the handling of any such Tax
Contest with respect to any item that may affect the liability of Furiex or any
member of the Furiex Group under this Agreement or that relates to the
Contribution Tax Treatment or the Distribution Tax Treatment, and PPD shall not
settle any such Tax Contest without the consent of Furiex, which consent shall
not be unreasonably withheld, conditioned or delayed. Notwithstanding anything
else to the contrary contained herein, in the

 

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case of any such Tax Contest relating to the Contribution Tax Treatment or the
Distribution Tax Treatment, absent a settlement of such Tax Contest pursuant to
the preceding sentence, PPD shall be required to exhaust, at Furiex’s expense,
all administrative remedies available with respect to such Tax Contest.

5.03 Control of Contests by Furiex. Furiex shall have the full responsibility
and control over the handling of any Tax Contest, including the exclusive right
to communicate with agents of the Governmental Authority and to control,
resolve, settle or agree to any deficiency, claim or adjustment proposed,
asserted or assessed in connection with or as a result of any such Tax Contest,
involving any Furiex Filed Tax Return. Subject to Furiex’s control right, upon
request by PPD, PPD shall, at PPD’s expense, be allowed to participate in the
handling of any such Tax Contest with respect to any item that may affect the
liability of PPD or any member of the PPD Group under this Agreement, and Furiex
shall not settle any such Tax Contest with respect to any such items without the
consent of PPD, which consent shall not be reasonably withheld, conditioned or
delayed.

ARTICLE VI

COOPERATION

6.01 General. Each Party shall fully cooperate, and shall cause all members of
such Party’s Group to fully cooperate, with the other Party in connection with
the preparation and filing of any Tax Return or the conduct of any Tax Contest
(including, where appropriate or necessary, providing a power of attorney)
concerning any issues or any other matter contemplated under this Agreement.
Each Party shall make its employees and facilities available on a mutually
convenient basis to facilitate such cooperation.

6.02 Consistent Treatment. Unless and until there has been a Final Determination
to the contrary, each Party agrees not to take any position on any Tax Return in
connection with any Tax Contest or otherwise that is inconsistent with (a) the
allocation of Taxes between the PPD Group and the Furiex Group as set forth in
this Agreement or (b) the Contribution Tax Treatment and the Distribution Tax
Treatment.

ARTICLE VII

RETENTION OF RECORDS; ACCESS

7.01 Retention of Records; Access. For so long as the contents thereof may
become material in the administration of any matter under applicable Tax law,
but in any event until the later of (a) the expiration of any applicable statute
of limitation and (b) seven years after the Distribution Date, the Parties shall
(i) retain records, documents, accounting data and other information (including
computer data) necessary for the preparation and filing of all Tax Returns in
respect of Taxes of any member of either the PPD Group or the Furiex Group for
any Pre-Distribution Period or any Post-Distribution Period or for any Tax
Contests relating to such Tax Returns, and (ii) provide to the other Party
reasonable access to such records, documents, accounting data and other
information (including computer data) and to its personnel (ensuring their
cooperation) and premises, for the purpose of the review or audit of such Tax
Returns to the extent relevant to an obligation or liability of the requesting
Party under this Agreement or for

 

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purposes of the preparation or filing of any such Tax Return of the requesting
Party, the conduct of any Tax Contest or any other matter reasonably and in good
faith related to the Tax affairs of the requesting Party. At any time thereafter
that a Party proposes to destroy such material or information, it shall notify
the other Party in writing at least 30 days in advance, and the other Party
shall be entitled to receive such materials or information proposed to be
destroyed.

ARTICLE VIII

DISPUTE RESOLUTION

8.01 Dispute Resolution. The Parties shall attempt in good faith to resolve any
disagreement arising under this Agreement, including any dispute in connection
with a claim by a third party (a “Dispute”). Either Party may give the other
Party written notice of any Dispute not resolved in the normal course of
business. If such a Dispute is not resolved within 60 days following the date on
which one Party gives such notice, the Parties shall jointly retain a nationally
recognized law or accounting firm, reasonably acceptable to the Parties (the
“Tax Advisor”), to act as an arbitrator in order to resolve the Dispute. The Tax
Advisor’s determination as to any Dispute shall be made in accordance with the
terms of this Agreement and shall be final and binding on the Parties and not
subject to collateral attack for any reason (other than manifest error). All
fees and expenses of the Tax Advisor shall be shared equally by PPD, on the one
hand, and Furiex, on the other hand.

ARTICLE IX

MISCELLANEOUS PROVISIONS

9.01 Governing Law. This Agreement, except as expressly provided herein, shall
be governed by and construed and interpreted in accordance with the laws of the
State of North Carolina, irrespective of the choice of laws principles of the
State of North Carolina as to all matters, including matters of validity,
construction, effect, enforceability, performance and remedies.

9.02 Application to Present and Future Subsidiaries. This Agreement is being
entered into by PPD and Furiex on behalf of themselves and the members of their
respective Groups. This Agreement shall constitute a direct obligation of each
such entity. Articles III and VI of this Agreement shall be deemed to have been
readopted and affirmed on behalf of any entity that becomes a Subsidiary of PPD
or Furiex in the future.

9.03 Further Assurances. Subject to the provisions hereof, the Parties hereto
shall make, execute, acknowledge and deliver such other instruments and
documents, and take all such other actions, as reasonably required in order to
effectuate the purposes of this Agreement and to consummate the transactions
contemplated hereby.

9.04 Survival. Notwithstanding any other provision of this Agreement to the
contrary, all representations, covenants and obligations contained in this
Agreement shall survive until the expiration of the applicable statute of
limitations with respect to any such matter (including extensions thereof).

 

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9.05 Addresses and Notices. All notices, consents, requests, instructions,
approvals, statements, reports and other communications provided for herein
shall be in writing and shall be deemed to be duly given when (a) delivered in
person or (b) deposited in the United States mail or private express mail,
postage prepaid, addressed as follows:

If to PPD:

Pharmaceutical Product Development, Inc.

929 Front Street

Wilmington, North Carolina 28401

Attention: CFO

Phone: (910) 251-0081

Facsimile: (910) 762-5280

With a copy to its General Counsel at the same address.

If to Furiex:

Furiex Pharmaceuticals, Inc.

3900 Paramount Parkway, Suite 150

Morrisville, North Carolina 27560

Attention: CFO

Phone: (919) 456-7800

Facsimile: (919) 456-7750

Either Party may, by written notice to the other Party, change the address to
which such notices are to be given. Notice delivered personally shall be deemed
delivered when received by the recipient. Notice given by mail as set out above
shall be deemed delivered five calendar days after the date the same is mailed.

9.06 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties and their successors and assigns.

9.07 Waivers of Default. The failure of either Party to require strict
performance by the other Party of any provision in this Agreement, or to
exercise any right or remedy under this Agreement will not waive or diminish
such Party’s right to demand strict performance or exercise thereafter of that
or any other provision, right or remedy hereof.

9.08 Invalidity of Provisions. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby, so long as the economic or
legal substance of the transactions contemplated hereby or thereby, as the case
may be, is not affected in any manner adverse to any Party. Upon such
determination, the Parties shall negotiate in good faith in an effort to agree
upon such a suitable and equitable provision to affect the original intent of
the Parties.

 

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9.09 Complete Agreement. This Agreement contains the entire agreement between
the Parties pertaining to the subject matter of this Agreement and supersedes
all prior agreements, negotiations, discussions, writings, understanding,
commitments and conversations pertaining thereto and there are no agreements or
understandings between the Parties other than those set forth or referred to in
this Agreement. In the event of any inconsistency between this Agreement and the
Separation Agreement or any other agreements relating to the transactions
contemplated by the Separation Agreement, the provisions of this Agreement shall
control.

9.10 Construction. The language in all parts of this Agreement shall in all
cases be construed according to its fair meaning and shall not be strictly
construed for or against any Party.

9.11 No Double Recovery. No provision of this Agreement shall be construed to
provide an indemnity or other recovery for any costs, damages or other amounts
for which the damaged Party has been fully compensated under any other provision
of this Agreement or under any other agreement or action at law or equity.
Unless expressly required in this Agreement, a Party shall not be required to
exhaust all remedies available under other agreements or at law or equity before
recovering under the remedies provided in this Agreement.

9.12 Setoff. All payments to be made by any Party under this Agreement may be
netted against payments due to such Party under this Agreement, but otherwise
shall be made without setoff, counterclaim or withholding, all of which are
hereby expressly waived.

9.13 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be considered one and the same agreement, and shall become
effective when each counterpart has been signed by each of the Parties and
delivered to the other Party.

9.14 No Third-Party Rights. This Agreement is only intended to allocate the
responsibility for certain Taxes between PPD and Furiex and to address the other
Tax matters stated herein. Nothing in this Agreement, express or implied, is
intended or shall confer any right, benefit, claim or remedy of any nature
whatsoever under or by reason of this Agreement upon any member of a Party’s
Group or Person other than PPD and Furiex. PPD and Furiex acknowledge and agree
that the respective rights of the PPD Indemnitees and the Furiex Indemnitees
expressly provided under this Agreement may only be enforced by PPD and Furiex,
respectively.

9.15 Separation Agreement. To the extent not inconsistent with any specific term
of this Agreement, the provisions of the Separation Agreement shall apply in
relevant part to this Agreement, including Article VII (Confidentiality),
Sections 9.5 (Limitation of Liability,) 11.1 (Termination), 12.10 (Headings),
12.13 (Specific Performance), 12.14 (Amendments) and 12.15 (Waiver of Jury
Trial) thereof.

[Signature Page Follows]

 

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

 

PHARMACEUTICAL PRODUCT
DEVELOPMENT, INC. By:  

/s/ David L. Grange

Name:   David L. Grange Title:   Chief Executive Officer

 

FURIEX PHARMACEUTICALS, INC. By:  

/s/ June S. Almenoff

Name:  

June S. Almenoff

Title:  

President and CMO

 

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