MEMBERSHIP INTEREST PLEDGE AGREEMENT
 
This Membership Interest Pledge Agreement (“Agreement”) is dated as of March 26,
2014 (“Effective Date”), by and between Retrophin, Inc., a Delaware corporation
(“Pledgor”), on the one hand, and Loring Creek Holdings LLC, a California
limited liability company, Lloyd Glenn, and Matthias Kurth (collectively,
“Secured Party”), on the other hand.
 
RECITALS
 
A.           On the Effective Date, Secured Party and Pledgor executed a certain
Membership Interest Purchase Agreement (the “Purchase Agreement”) for the
purchase by Pledgor of a 100% of the issued and outstanding membership interests
(the “Membership Interests”) in Manchester Pharmaceutical LLC, a California
limited liability company (the “Company”) from the Secured Party.
 
B.           As a material inducement for Secured Party to accept delivery of
that certain Secured Promissory Note (the “Seller Note”) of same date herewith
in the principal amount of Thirty-Three Million United States Dollars
($33,000,000.00) as partial payment of the purchase price for the Membership
Interests, Pledgor has agreed to pledge the Membership Interests (the “Pledged
Membership Interest”), as security for Pledgor’s obligations under the Seller
Note.
 
C.           By execution of this Agreement, the parties hereto desire to
memorialize the Pledgor’s pledge of the Pledged Membership Interest.
 
AGREEMENT
 
Therefore, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
 
1.           Pledge of Pledged Membership Interest.  As security for all
payments and performance due under the Seller Note, Pledgor hereby grants to
Secured Party a security interest in Pledgor’s entire Pledged Membership
Interest, together with the certificate(s) evidencing the same, if any, and all
member rights in the Company pursuant to Company’s Operating Agreement and the
Revised Uniform Limited Liability Company Act (“RULLCA”).
 
2.           Admission as Member. The Pledged Membership Interest shall include
all proceeds of and contract rights relating to Pledgor’s interest in Company,
including Pledgor’s rights as a Member of the Company. Subject to Section 6
below, the Pledged Membership Interest shall not be limited to an economic or
transferable interest (as defined in RULLCA) in the Membership Interest, but
shall include all voting, inspection and all other rights of a member of
Company.
 
3.           Delivery of Certificates.  Pledgor represents and warrants that the
Pledged Membership Interest is uncertificated.  In the event one or more
certificates are issued to evidence some or all of the Pledged Membership
Interest, Pledgor shall deliver to Secured Party such certificates representing
some or all of the Pledged Membership Interest.
 
4.           Assignment of Pledged Membership Interest.  Concurrently with the
execution of this Agreement, Pledgor shall deliver an Assignment of Limited
Liability Company Interest in the form attached hereto as Exhibit A, duly
executed by Pledgor (the “Assignment of Pledged Membership Interest”). The
Assignment of Pledged Membership Interest shall be delivered to Secured Party to
hold and to effectuate all such transfers and/or releases as are in accordance
with the terms of this Agreement.
 
 
 

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5.           Financing Statements.  Pledgor hereby grants Secured Party, and
Secured Party has, the right to file UCC Financing Statements in Pledgor’s state
of incorporation from time to time in Secured Party’s reasonable discretion.
 
6.           Rights of a Member.  Unless an Event of Default under the Seller
Note occurs and is continuing, the Pledgor is entitled to exercise all rights of
a Member with respect to the Pledged Membership Interest including, without
limitation, the right to vote and give consents, waivers and ratifications in
respect thereof, provided that no vote shall be cast or consent, waiver, or
ratification given or action taken that would violate or not comply with any of
the terms of this Agreement.  All rights of Pledgor to vote and give consents,
waivers and ratifications shall cease on the occurrence and continuance of an
Event of Default under the Seller Note.
 
7.           Grant of Proxy.  Pledgor hereby grants to Secured Party an
irrevocable proxy coupled with an interest, to be exercised only upon the
occurrence and continuance of an Event of Default under the Seller Note,
pursuant to which proxy the Secured Party is entitled to vote the Pledged
Membership Interest and exercise all consensual rights in connection
therewith.  Upon request of Secured Party upon the occurrence and during the
continuance of an Event of Default under the Seller Note, Pledgor agrees to
promptly execute and deliver to Secured Party further evidence of this proxy as
Secured Party may reasonably request.
 
8.           Distributions.  Notwithstanding any provision to the contrary
contained herein, Secured Party is entitled to retain as part of the Pledged
Membership Interest:
 
(a)           all additional evidences of membership interests or securities
paid or distributed by way of a distribution in respect of the Pledged
Membership Interest; and
 
(b)           all securities or property paid or distributed in respect of the
Pledged Membership Interest by way of any reclassification, combination,
consolidation, merger, exchange, conveyance of assets, liquidation or
reorganization.
 
9.           Representations and Warranties of Pledgor.  Pledgor represents and
warrants to Secured Party that the Pledged Membership Interest is, and during
the term of this Agreement will remain, free and clear of all security
interests, pledges, liens or other encumbrances, and restrictions on the
transfer and assignment thereof, except for (i) the security interest created by
this Agreement, (ii) any other liens afforded priority as a matter of law or
statute or (iii) restrictions on transfer imposed by applicable law.
 
10.           Covenants.  Pledgor covenants and agrees until the full and final
payment and performance of all of Pledgor’s obligations and amounts due under
the Seller Note that Pledgor will not, without the prior written consent of
Secured Party, in each instance:
 
(a)           take any action to pledge or otherwise encumber, or allow to be
encumbered, the Pledged Membership Interest or any part thereof or interest
therein, except for any encumbrances afforded priority as a matter of law; or
 
 
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(b)           take any action to gift, sell, offer to sell, or otherwise
transfer the Pledged Membership Interest or any part thereof or interest
therein.
 
11.           [Reserved].
 
12.           Remedies Upon Event of Default.  Upon the occurrence and during
the continuance of any Event of Default under the Seller Note, Secured Party is
entitled to take any or all of the following actions:
 
(a)           Secured Party shall have an irrevocable right (the “Assignment
Right”) to transfer to itself all of the Pledged Membership Interest, which
Assignment Right shall be exercised by Secured Party by providing written notice
(the "Assignment Notice") to Pledgor at any time following an the occurrence and
continuance of an Event of Default under the Seller Note.  Upon delivery to
Pledgor of the Assignment Notice, Secured Party shall become the legal and
beneficial owner of the Pledged Membership Interest being assigned and all
rights and interest therein or related thereto, and Secured Party shall have the
right to transfer into its own name the Pledged Membership Interest without
further action by Pledgor;
 
(b)           Secured Party shall have the right to vote all or any part of the
Pledged Membership Interest (whether or not registered in the name of Secured
Party) and give all consents, waivers and ratifications in respect thereof and
otherwise act with respect to the Pledged Membership Interest as though Secured
Party were the outright owner thereof pursuant to the proxy granted in this
Agreement;
 
(c)           Secured Party shall have the right to receive all amounts and
distributions payable in respect of the Pledged Membership Interest; and
 
(d)           Secured Party shall have the right to sell, upon no less than
fifteen (15) days’ prior written notice to Pledgor of the time and place of any
public sale or of the date after which a private sale may be consummated (which
notice Pledgor hereby agrees is reasonable) and without liability for any
diminution in price  may have occurred, all of the Pledged Membership Interest
in such manner, whether at public or private sale, and whether in one lot as an
entirety, or in separate portions, and for such price and on such other terms
and conditions as Secured Party may determine in its sole discretion, all of
which shall be subject to applicable law.  At any sale, Secured Party shall be
free to purchase all or any part of the Pledged Membership Interest unless
otherwise prohibited by applicable law.  Upon any sale or other disposition,
Secured Party shall have the right to deliver, assign and transfer to the
purchaser thereof the Pledged Membership Interest so sold or disposed of.  If
any consent, approval or authorization of any state, municipal or other
governmental department, agency or authority should be necessary to effectuate
any sale or other disposition of the Pledged Membership Interest, or any partial
sale or other disposition of the Pledged Membership Interest, Pledgor will
execute all such applications and other instruments as may be required in
connection with securing any such consent, approval or authorization, and will
otherwise use Pledgor’s commercially reasonable efforts to secure the same.
 
Pledgor recognizes that Secured Party may be unable to effect a public sale of
all or a part of the Pledged Membership Interest without registration thereof by
reason of certain prohibitions pursuant to the Securities Act of 1933, as
amended, and applicable state securities law, but may be compelled to resort to
one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire the Pledged Membership Interest
for their own account, for investment and not with a view to the distribution or
resale thereof.
 
 
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Pledgor agrees that private sales so made may be at prices and on other terms
less favorable to the Secured Party than if the Pledged Membership Interest were
sold at public sale, and that Secured Party has no obligation to delay the sale
of any Pledged Membership Interest in order to register the Pledged Membership
Interest for public sale under any securities law.  Pledgor agrees that a
private sale or sales made under the foregoing circumstances shall be deemed to
have been made in a commercially reasonable manner.
 
13.           Application of Moneys Received.  All cash proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Pledged Membership Interest may, in the sole
discretion of Secured Party, be held by Secured Party as collateral for, and/or
applied (after payment of any amounts payable to Secured Party pursuant to
Section 17(b), below) in whole or in part by Secured Party against, all or any
part of any obligations due Secured Party from Pledgor in such order as Secured
Party shall elect.  Pledgor shall be liable to Secured Party for any deficiency
that may remain after such sale, disposition, collection or liquidation of the
Pledged Membership Interest.  In turn, Secured Party agrees to remit to Pledgor
any surplus remaining after all obligations due Secured Party from Pledgor have
been paid in full or otherwise satisfied.
 
14.           Pledgor’s Obligations Absolute.  Subject to the terms of this
Agreement, the Purchase Agreement and the Seller Note, the rights of Secured
Party and the obligations of Pledgor under this Agreement are absolute and
unconditional and remain in full force and effect without regard to, and shall
not be released, suspended, discharged, terminated, lessened or otherwise
affected by, any circumstance or occurrence whatsoever, including without
limitation:
 
(a)           any renewal, extension, substitution, amendment or modification of
the Seller Note, the Purchase Agreement or this Agreement, or any assignment or
transfer of any of the foregoing;
 
(b)           any waiver, consent, extension, indulgence or other action or
inaction under the Seller Note, the Purchase Agreement, this Agreement, or any
other document, instrument or agreement between the parties hereto;
 
(c)           any furnishing of any additional collateral or security to Secured
Party, or any acceptance thereof, or any release of any collateral or security
in whole or in part by Secured Party; or
 
(d)           any bankruptcy, insolvency or other like proceeding relating to
Pledgor or the Company, or any action taken with respect to the Seller Note, the
Purchase Agreement or this Agreement by any court appointed trustee, receiver or
any court, in any such proceeding.
 
15.           Termination and Release.  Upon the payment and performance in full
of all of Pledgor’s obligations under the Seller Note, the security interest
granted hereby shall terminate and all rights to the Pledged Membership Interest
shall revert to Pledgor.  Upon any such termination, Secured Party will, at
Pledgor’s request, execute and deliver to Pledgor such documents as Pledgor
shall reasonably request to evidence such termination and will duly assign,
transfer and deliver to Pledgor the share certificate(s) representing the
Pledged Membership Interest.
 
 
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16.           Operating Agreement.  Pledgor hereby consents to Secured Party’s
exercise of Pledgor’s management rights though the Membership Interest as
provided herein or the transfer thereof to Secured Party (along with the voting
and economic rights thereto) as a substitute member in the event of an exercise
of Secured Party’s rights under this Agreement or pursuant to applicable
law.  Pledgor shall not amend the Operating Agreement of Company (“Operating
Agreement”) in any way that undermines the exercise of such management rights by
Secured Party or the substitution of Secured Party as a member with full
economic, voting and management rights.  Notwithstanding the above, Pledgor (a)
irrevocably waives any and all provisions of the Operating Agreement that
prohibit, restrict, condition, or otherwise affect the grant hereunder of any
lien, security interest or encumbrance on the Pledge Membership Interest or any
enforcement action that may be taken in respect of any such lien, security
interest, or encumbrance, (b) irrevocably waives any rights to acquire the
Membership Interest upon pledge or assignment to Secured Party, (c) consents to
the pledge and assignment to, and admission of, Secured Party, and each of them,
as a member upon the occurrence and continuance of an Event of Default under the
Seller Note, and (d) upon written request of Secured Party, shall amend the
Operating Agreement of Company as necessary in order to authorize the pledge and
assignment of the Pledged Membership Interest to Secured Party, and each of
them.  In the event of an assignment of the Pledged Membership Interest to
Secured Party, or any each of them, and upon written request of Secured Party,
the Operating Agreement shall be amended by the Pledgor and any manager of the
Company to reflect the changes contemplated by this Agreement, upon receipt by
the Pledgor and any manager of the Assignment of Pledged Membership Interest
following the occurrence and continuance of an Event of Default under the Seller
Note, without further action by any members of the Company.
 
17.           General Provisions.
 
(a)           Further Assurances.  Pledgor agrees that from time to time, at
Pledgor’s expense, Pledgor will promptly execute, acknowledge and deliver all
documents and instruments and take all further actions as Secured Party may
reasonably request that are necessary or desirable in order to perfect and
protect the security interest granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies with respect to the Pledged
Membership Interest.
 
(b)           Expenses.  Without duplication of any other expense reimbursement
provision, Pledgor will promptly upon written demand pay to Secured Party the
amount of any and all reasonable and documented out of pocket expenses,
including reasonable and documented attorneys’ fees and costs, which Secured
Party may incur in connection with (i) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Pledged Membership Interest, (ii) the exercise or enforcement of any of the
rights of Secured Party hereunder, or (iii) the failure by Pledgor to perform or
observe any of the provisions hereof.  Secured Party will promptly upon demand
pay to Pledgor the amount of all reasonable expenses, including attorneys’ fees
and costs, which Pledgor may incur in connection with (1) the enforcement of any
of the rights of Pledgor hereunder, or (2) the failure by Secured Party to
perform or observe any of the provisions hereof.
 
 
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(c)           Notices.  All notices and other communications to any party shall
be in writing and delivered in accordance with the provisions of Section 9.1 of
the Purchase Agreement.
 
(d)           Amendment.  This Agreement may be changed, waived, discharged, or
terminated only by an instrument in writing signed by the parties hereto or by
the party agreeing to the waiver.
 
(e)           Binding Effect.  This Agreement is binding upon and inures to the
benefit of the parties hereto and their respective heirs, executors, personal
representatives, successors and permitted assigns.
 
(f)           Governing Law.  This Agreement and all matters arising hereunder
or in connection herewith shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to laws that may be
applicable under conflicts of laws principles (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
 
(g)           Severability.  Wherever possible, each provision hereof shall be
interpreted in such a manner as to be effective and valid under applicable law. 
In case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision or provisions shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability, without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable, and any such provision shall be amended so as to implement the
original intentions of the parties in a lawful manner.
 
(h)           Integration.  Except for the Purchase Agreement and the Seller
Note, (i) this Agreement represents the entire and integrated agreement of the
parties with regard to the subject matter set forth herein, and (ii) there are
no statements, representations, inducements or agreements made by or between the
parties with regard to the Pledged Membership Interest, except as set forth
herein.
 
(i)           Remedies.  Each right, power and remedy of Secured Party provided
in this Agreement, or now or hereafter existing at law or in equity or by
statute or otherwise shall be cumulative and concurrent and shall be in addition
to every other such right, power or remedy.  The exercise or beginning of the
exercise by Secured Party of any one or more of the rights, powers or remedies
provided for in this Agreement, now or hereafter existing at law or in equity or
by statute or otherwise shall not preclude the simultaneous or later exercise by
Secured Party of all such other rights, powers or remedies, and no failure or
delay on the part of Secured Party to exercise any such right, power or remedy
shall operate as a waiver thereof.
 
(j)           This Agreement may be executed and delivered in counterpart
signature pages executed and delivered via facsimile transmission or via email
with scanned or PDF attachment, and any such counterpart so executed and
delivered via facsimile transmission or via email will be deemed an original for
all intents and purposes.
 
[Signature page follows]
 
 
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This Membership Interest Pledge Agreement is executed by the parties as of the
Effective Date.
 
Pledgor:
 
Retrophin, Inc.
 
By: /s/ Marc Panoff                                      
Name: Marc Panoff                                       
Title: Chief Financial Officer                        
 
Address:
_______________________________
_______________________________
_______________________________
 
Phone: __________________________
Fax: ____________________________
Secured Party:
 
Loring Creek Holdings LLC,
a California limited liability company
 
By: /s/ Ken Greathouse                                   
       Ken Greathouse, Member
 
/s/ Lloyd Glenn                                                 
Lloyd Glenn
 
/s/ Matthias Kurth                                           
Matthias Kurth
 
 
Address:
_________________________________
_________________________________
_________________________________
 
Phone: ___________________________
Fax: _____________________________

 
[Signature Page to Membership Interest Pledge Agreement].
 
 
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EXHIBIT A

ASSIGNMENT OF LIMITED LIABILITY COMPANY INTEREST
 
 
[See attached.]