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          1.3 Acceleration of Vesting of Unvested Stock Options. Employee was previouslygranted, pursuant to the Company’s Plan, options to purchase up to 610,000 shares of commonstock (the “Options”). As of the Separation Date, 310,000 shares subject to the Options willbe vested and exercisable. Notwithstanding anything in the Stock Option Agreements evidencingthe Options (the “Stock Option Agreements”) to the contrary, the Company agrees to acceleratethe vesting of all of Employee’s 300,000 unvested shares of common stock subject to theOptions (the “Acceleration Shares”), such that Employee shall be vested in all of the sharessubject to the Options as of the Separation Date (including the Acceleration Shares).          1.4 Extension of Exercise Period. The Company agrees to amend the terms of theStock Option Agreements evidencing the Options to provide that Employee will have three yearsfrom the Separation Date in which to exercise all or a portion of the Options. Except asspecifically amended herein, Employee acknowledges that she must exercise her vested optionsin accordance with the terms and conditions of the Stock Option Agreements evidencing herOptions.          1.5 Consulting Agreement. In exchange for the promises set forth herein, theCompany agrees to enter into a Consulting Agreement with Employee, in the form attachedhereto as Exhibit B.          1.6 Health Benefits. For purposes of clarity, Employee shall be entitled to thecontinued health benefits as provided in Section 9.3 of the Employment Agreement.     2. Cooperation. Employee agrees that for the next thirty (30) days Employee shallmake herself reasonably available by telephone to answer questions and assist Company with thetransition of Employee’s duties as may be reasonably necessary in Company’s discretion. As part ofthis cooperation, Employee shall provide Company with Employee’s professional contact informationincluding, but not limited to, the names, titles, company affiliation, telephone numbers, physicaladdresses, and email addresses for all of potential investors Employee has had contact with duringthe last twelve (12) months.     3. Covenant Not to Solicit Stockholders. Through December 31, 2010, Employeecovenants not to solicit votes or encourage other stockholders of Company to take actions or tovote their shares of stock against or in a manner contrary to the actions or matters recommended toCompany’s stockholders for approval by a majority of the Board.     4. Restriction on Transfer of Common Stock. In addition to any other restrictionsand limitations on the transfer of any common stock Employee holds as of the Separation Date (the“Securities”) under the applicable federal and state securities laws and the other agreements towhich Employee is bound, Employee agrees from the Separation Date through the later of (a) 90days after the Separation Date or (b) the term of the Consulting Agreement (as defined in Section2.3 of the Consulting Agreement), each sale of the Securities (which shall include any offer,pledge, contract to sell, any option, right or warrant to sell, lend, or otherwise transfer ordispose of, directly or indirectly, any of the economic consequences of ownership of theSecurities) shall be made in compliance with the volume restrictions applicable to an “affiliate”of Company under Rule 144 of the Securities Exchange Act of 1933, as amended.     5. Mutual General Release.          5.1 General Release by Employee. Employee unconditionally, irrevocably andabsolutely releases and discharges Company, and any parent and subsidiarycorporations, divisions and affiliated corporations, partnerships or other affiliatedentities of
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Company, past and present, as well as Company’s employees, officers, directors,agents, successors and assigns (collectively, “Released Parties”), from all claims related inany way to the transactions or occurrences between them to date, to the fullest extentpermitted by law, including, but not limited to, Employee’s employment with Company, thetermination of Employee’s employment, and all other losses, liabilities, claims, charges,demands and causes of action, known or unknown, suspected or unsuspected, arising directly orindirectly out of or in any way connected with Employee’s employment with Company. Thisrelease is intended to have the broadest possible application and includes, but is not limitedto, any tort, contract, common law, constitutional or other statutory claims, including, butnot limited to, alleged violations of the California Labor Code, the California FairEmployment and Housing Act, Title VII of the Civil Rights Act of 1964, the Americans withDisabilities Act, and all claims for attorneys’ fees, costs and expenses. Employee expresslywaives Employee’s right to recovery of any type, including damages or reinstatement, in anyadministrative or court action, whether state or federal, and whether brought by Employee oron Employee’s behalf, related in any way to the matters released herein. However, thisgeneral release is not intended to bar any claims that, by statute, may not be waived, such asclaims for workers’ compensation benefits, unemployment insurance benefits, and statutoryindemnity.               Employee acknowledges that Employee may discover facts or law different from, or inaddition to, the facts or law that Employee knows or believes to be true with respect to theclaims released in this Separation Agreement and agrees, nonetheless, that this SeparationAgreement and the release contained in it shall be and remain effective in all respectsnotwithstanding such different or additional facts or the discovery of them.               Employee declares and represents that Employee intends this Separation Agreement to becomplete and not subject to any claim of mistake, and that the release herein expresses a fulland complete release and Employee intends the release herein to be final and complete.Employee executes this release with the full knowledge that this release covers all possibleclaims against the Released Parties, to the fullest extent permitted by law.          5.2 General Release by Company. The Company, on behalf of itself, itsaffiliates, successors, heirs, administrators, and assigns, as well as Company’s officers anddirectors, fully and forever releases Employee, her heirs, administrators and assigns(collectively, “Employee Released Parties”) from any and all claims, losses, liabilities,actions, causes of actions, demands, rights, damages, costs and expenses of any kind, to thefullest extent permitted by law, arising out Employee’s employment or services as an officeror director, except for any claims or causes of action based on fraud, known or unknown,suspected or unsuspected This release is intended to have the broadest possible applicationand includes but is not limited to any tort other than fraud, contract, common law,constitutional or other statutory claims.          5.3 Company and Employee each acknowledge that they may discover facts or law differentfrom, or in addition to, the facts or law that they know or believe to be true with respect tothe claims released in this Separation Agreement and agree, nonetheless, that this SeparationAgreement and the release contained in it shall be and remain effective in all respectsnotwithstanding such different or additional facts or the discovery of them.          5.4 Company and Employee each declare and represent that they intend this SeparationAgreement to be complete and not subject to any claim of mistake, and that the release hereinexpresses a full and complete release and Company and Employeeeach intend the release herein to be final and complete. Company and Employee each
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execute this release with the full knowledge that this release covers all possible claimsagainst the Released Parties, to the fullest extent permitted by law.     6. California Civil Code Section 1542 Waiver. Company, on behalf of itself, itsaffiliates, successors, heirs, administrators, and assigns, and Employee, on her behalf, eachexpressly acknowledge and agree that all rights under Section 1542 of the California Civil Codeare expressly waived. That section provides:A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW ORSUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENTWITH THE DEBTOR.     7. Representation Concerning Filing of Legal Actions. Employee represents that, asof the date of this Separation Agreement, Employee has not filed any lawsuits, charges,complaints, petitions, claims or other accusatory pleadings against Company or any of the otherReleased Parties in any court or with any governmental agency. Employee further agrees that, tothe fullest extent permitted by law, Employee will not prosecute, nor allow to be prosecuted onEmployee’s behalf, in any administrative agency, whether state or federal, or in any court,whether state or federal, any claim or demand of any type related to the matters released in thisSeparation Agreement; provided, however, that Employee may file a claim for unemployment benefitsand the Company will not take any actions to dispute or challenge Employee’s claim tounemployment benefits.     8. Mutual Nondisparagement. Employee agrees that Employee will not make any writtenor verbal statements, or encourage others to make any such statements, that defame, disparage orcriticize the personal or business reputation, practices or conduct of Company or any of theother Released Parties. In exchange for Employee’s promises set forth herein, neither theCompany nor the members of its Board of Directors will make, and the Company agrees to instructits officers to not make, any voluntary statements, written or oral, or cause or encourage othersto make any such statements that defame, disparage or in any way criticize Employee or Employee’spersonal and/or business reputation.     9. Confidentiality and Return of Company Property. Employee understands and agreesthat as a condition of receiving the Severance Package in paragraph 1, all Company property mustbe returned to Company; provided, however, the Employee shall be entitled to keep the blackberryand computer she used during her service at the Company (the “Employee Retained Property”). Bysigning this Separation Agreement, Employee represents and warrants that Employee has returned toCompany all Company property, data and information belonging to Company (other than the EmployeeRetained Property) and agrees that Employee will not use or disclose to others any confidentialor proprietary information of Company or the Released Parties (including any confidential orproprietary information of the Company or the Release parties contained on the Employee RetainedProperty). In addition, Employee agrees to keep the terms of this Separation Agreementconfidential between Employee and Company, except that Employee may tell Employee’s immediatefamily and attorney or accountant, if any, as needed, but in no event should Employee discussthis Separation Agreement or its terms with any current or prospective employee of Company. TheCompany agrees to allow a representative of Employee to pick up all of Employee’s personalproperty at the Company’s premises on Friday, February 19, 2010 at 4:00 p.m., or at such othertime mutually agreed by the Company and Employee.     10. Continuing Obligations. Employee further agrees to comply with the continuingobligations regarding confidentiality set forth in the surviving provisions of Company’sInformation and Inventions Agreement previously signed by Employee.
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11. Consideration Period. Employee has until 5:00 p.m. on February 17, 2010 to considerwhether or not to enter into this Separation Agreement. This Separation Agreement shall notbecome effective or enforceable until the day Employee signs this Separation Agreement(“Effective Date”). If the signed Separation Agreement is not received by Company’s legalcounsel, Jeff Thacker, DLA Piper, 4365 Executive Drive, Suite 1100, San Diego, CA 92121-2133, FaxNo. (858) 638-5128, by 5:00 p.m. Pacific Time on February 17, 2010, Company will assume thatEmployee is not interested in the Severance Package, the offer will be automatically withdrawnand Company will terminate Employee’s employment without Cause on the Separation Date.     12. No Admissions. By entering into this Separation Agreement, the Released Partiesmake no admission that they have engaged, or are now engaging, in any unlawful conduct. Theparties understand and acknowledge that this Separation Agreement is not an admission ofliability and shall not be used or construed as such in any legal or administrative proceeding.     13. Severability. In the event any provision of this Separation Agreement shall befound unenforceable, the unenforceable provision shall be deemed deleted and the validity andenforceability of the remaining provisions shall not be affected thereby.     14. Legal Representation. Employee acknowledges and agrees that DLA Piper LLP (US)represents only the Company with respect to her separation of employment from Company and thisSeparation Agreement and that it does not represent Employee. In addition, Employee acknowledgesand agrees that she has obtained her own legal counsel to review and negotiate the terms of thisSeparation Agreement.     15. Full Defense. This Separation Agreement may be pled as a full and completedefense to, and may be used as a basis for an injunction against, any action, suit or otherproceeding that may be prosecuted, instituted or attempted by Employee or the Company, asapplicable. Employee agrees that in the event an action or proceeding is instituted by theReleased Parties in order to enforce the terms or provisions of this Separation Agreement, theReleased Parties shall be entitled to an award of reasonable costs and attorneys’ fees incurredin connection with enforcing this Separation Agreement, to the fullest extent permitted by law.Company agrees that in the event an action or proceeding is instituted by the Employee ReleasedParties in order to enforce the terms or provisions of this Separation Agreement, the EmployeeReleased Parties shall be entitled to an award of reasonable costs and attorneys’ fees incurredin connection with enforcing this Separation Agreement, to the fullest extent permitted by law.     16. Applicable Law. The validity, interpretation and performance of this SeparationAgreement shall be construed and interpreted according to the laws of the United States ofAmerica and the State of California.
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     17. Entire Agreement; Modification. This Separation Agreement, including thesurviving provisions of Company’s Information and Inventions Agreement previously executed byEmployee and Company’s Plan and related stock option agreements, the sections of the EmploymentAgreement referenced herein and the Consulting Agreement are intended to be the entire agreementbetween the parties and supersedes and cancels any and all other and prior agreements, written ororal, between the parties regarding the subject matters in the Separation Agreement and theConsulting Agreement. This Separation Agreement may be amended only by a written instrumentexecuted by all parties hereto.THE PARTIES TO THIS SEPARATION AGREEMENT HAVE READ THE FOREGOING SEPARATION AGREEMENT AND FULLYUNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THISSEPARATION AGREEMENT ON THE DATES SHOWN BELOW.       Dated: 2/17/10   By: /s/ Juliet Singh             Juliet Singh           **Transdel Pharmaceuticals, Inc.**       Dated: 2/17/10   By: /s/ John Lomoro             **John Lomoro**
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