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Exhibit 10.21    
    

CERTAIN
MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. 

EXCLUSIVE
LICENSE AGREEMENT 

        THIS
EXCLUSIVE LICENSE AGREEMENT ("Agreement") is entered into this 14th day of August, 1996, and shall be effective as of the date specified in Section 2.7 hereof
("Effective Date"), by and among CEDARS-SINAI MEDICAL CENTER, a California nonprofit public benefit corporation, ("CSMC"), the REGENTS OF THE UNIVERSITY OF CALIFORNIA ("UCLA") acting through its
campus at Los Angeles, and PROMETHEUS LABORATORIES, INC., a California corporation, ("Prometheus"). 

R
E C I T A L S 

        A.    CSMC
owns certain CSMC Patent Rights and CSMC Technical Information (as defined below) discovered in the course of certain inflammatory bowel disease programs at CSMC
conducted under the direction of Dr. Stephan Targan ("Targan") as the sole principal investigator. 

        B.    UCLA
owns certain UCLA Patent Rights and UCLA Technical Information (as defined below) discovered in the course of certain inflammatory bowel disease programs at UCLA
conducted under the direction of Dr. Jonathan Braun ("Braun") as the sole principal investigator. 

        C.    CSMC
and UCLA jointly own certain Joint Patent Rights and Joint Technical Information (as defined below) jointly discovered in the course of the programs referred to in
Sections A and B above. 

        D.    CSMC
desires to have the CSMC Patent Rights, the CSMC Technical Information, the Joint Patent Rights and the Joint Technical Information developed, used and
commercialized in the Field of Use (as defined below) by Prometheus, and Prometheus desires to obtain an exclusive worldwide license to conduct research in the Field of Use, and to develop,
manufacture, use and sell Products (as defined below) in the Field of Use, using the CSMC Patent Rights and the Joint Patent Rights and to use the CSMC Technical Information and the Joint Technical
Information in accordance with the terms of this Agreement. Other than the rights expressly granted by CSMC hereunder within the Field of Use, Prometheus acknowledges that CSMC shall retain all other
rights with respect to the CSMC Patent Rights and the CSMC Technical Information and, with UCLA, to the Joint Patent Rights and the Joint Technical Information. 

        E.    UCLA
desires to have the UCLA Patent Rights, the UCLA Technical Information, the Joint Patent Rights and the Joint Technical Information developed, used and
commercialized in the Field of Use by Prometheus, and Prometheus desires to obtain an exclusive worldwide license to conduct research in the Field of Use, and to develop, manufacture, use and sell
Products in the Field of Use, using the UCLA Patent Rights and the Joint Patent Rights and to use the UCLA Technical Information and the Joint Technical Information in accordance with the terms of
this Agreement. Other than the rights expressly granted by UCLA hereunder in the Field of Use, Prometheus acknowledges that UCLA shall retain all other rights with respect to the UCLA Patent Rights
and the UCLA Technical Information and, with CSMC, to the Joint Patent Rights and the Joint Technical Information. 

        F.     CSMC,
UCLA and Prometheus desire to fulfill the "Considerations for Recipients of National Institute of Health ("NIH") Research Grants and Contracts" set forth in
pages 32997-33001 of volume 

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59,
No. 122 of the Federal Register, dated June 27, 1994 and the provisions of 35 U.S.C. Sections 200 to 212. 

        G.    CSMC,
UCLA and Prometheus intend that the execution and performance of this Agreement by each party, and the consummation of the transactions contemplated hereunder,
shall not at any time threaten CSMC's or UCLA's respective tax-exempt status under Section 501(c)(3) of the Internal Revenue Code and Section 23701d of the California Revenue
and Taxation Code or cause CSMC to be in default under any of CSMC's issued and outstanding tax-exempt bonds. 

        NOW,
THEREFORE, in consideration of the mutual covenants and premises herein contained, the parties hereto agree as follows: 

        1.    DEFINITIONS    

        1.1   "Affiliate" or "Affiliates" shall mean any corporation, person or entity
which controls, is controlled by, or is under common control with, a party to this Agreement without regard to stock ownership. 

        1.2   "Patent Rights" shall mean each and all of the CSMC Patent Rights, CSMC Technical Information, Joint Patent Rights, Joint
Technical Information, UCLA Patent Rights and UCLA Technical Information, but expressly excludes each and all GenoMed Intellectual Property Rights. 

        1.2.1  "GenoMed Intellectual Property Rights" shall mean each and all intellectual property rights that are owned by GenoMed
or which may otherwise be the subject of that certain CSMC-GenoMed license agreement of June 7, 1995, including, without limitation, the GenoMed Present Patent Rights, the GenoMed
Prospective Patent Rights, and the GenoMed Technical Information. 

        1.2.2  "GenoMed Present Patent Rights" shall mean the following patent applications, any patent applications in any other
country corresponding or relating to any of the following parent patent applications, or any divisions, continuations, continuations-in-part, reissues, reexaminations,
supplementary protection certificates, extensions thereof or any patents which issues thereon: 

        (1)   U.S.
Patent Application Serial No. [***] entitled [***]; 

        (2)   International
Patent Application No. [***] entitled [***]; 

        (3)   U.S.
Patent Application Serial No. [***] entitled [***]; and 

        (4)   International
Patent Application No. [***] entitled [***]. 

        1.2.3  "GenoMed Prospective Patent Rights" shall mean each and all subject matter that GenoMed may presently or in the future
have a proprietary interest of any kind (e.g., ownership or license) under that certain June 7, 1995 CSMC-GenoMed license agreement
and is embodied in the following parent patent applications, any patent applications in any other country corresponding or relating to any of the following patent applications, or any divisions,
continuations, continuations-in-part, reissues, reexaminations, supplementary protection certificates, extensions thereof or any patents which issues thereon: 

        (1)   U.S.
Patent Application Serial No. [***] entitled [***]; 

        (2)   U.S.
Patent Application Serial No. [***] entitled [***]; 

        (3)   U.S.
Patent Application identified by Docket No. [***] (serial number not yet assigned), entitled [***]; and 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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        (4)   U.S.
Patent Application identified by Docket No. [***] (serial number not yet assigned), entitled [***]. 

        1.2.4  "GenoMed Technical Information" means each and all know-how, trade secrets, unpublished patent
applications, software, bioinformatics, unpatented technology, technical information, statistical information and analyses, biological materials, preclinical information, clinical information, or any
confidential or proprietary information which is embodied in any of the parent or other patent applications under 1.2.2 and 1.2.3 and is, or may be, the subject of that certain June 7, 1995
CSMC-GenoMed license agreement. 

        1.3   "Confidential Information" shall mean all specifications, know-how, trade secrets, technical information,
drawings, software, models, business information and patent applications pertaining to the Patent Rights and as further provided in Section 10 hereof. 

        1.4   "CSMC Patent Rights" shall mean the patents and/or patent applications existing as of the Effective Date which are
described on Schedule A hereto and all patents and/or patent applications (including provisional patent applications) existing as of the Effective Date in any other country corresponding to any
of the foregoing, and all divisions, continuations, continuations-in-part (but only to the extent described and enabled in the parent applications), reissues, reexaminations,
supplementary protection certificates and extensions thereof, and any patents that issue thereon. 

        1.5   "CSMC Technical Information" shall mean, as of the Effective Date, the following information in the Field of Use which is
described in the CSMC Patent Rights: Know-how, trade secrets, unpublished patent applications, software, bioinformatics, unpatented technology, technical information, statistical
information and analyses, biological materials, chemical reagents, preclinical and clinical information, which has been conceived and reduced to practice prior to the Effective Date in the conduct of
the inflammatory bowel disease programs at CSMC under the direction of Targan as the sole principal investigator. CSMC Technical Information shall further include information in the Field of Use
described in Schedule B hereto which is embodied in the CSMC Patent Rights and which has been conceived and reduced to practice prior to the Effective Date in the conduct of the inflammatory
bowel disease programs at CSMC under the direction of Targan as the sole principal investigator. 

        1.6   "UCLA Patent Rights" shall mean the patents and/or patent applications existing as of the Effective Date which are
described on Schedule C hereto and all patents and/or patent applications (including provisional patent applications) existing as of the Effective Date in any other country corresponding to any
of the foregoing, and all divisions, continuations, continuations-in-part (but only to the extent described and enabled in the parent applications), reissues, reexaminations,
supplementary protection certificates and extensions thereof, and any patents that issue thereon. 

        1.7   "UCLA Technical Information" shall mean, as of the Effective Date, the following information in the Field of Use which is
described in the UCLA Patent Rights: Know-how, trade secrets, unpublished patent applications, software, bioinformatics, unpatented technology, technical information, statistical
information and analyses, biological materials, preclinical and clinical information, which has been conceived and reduced to practice prior to the Effective Date in the conduct of the inflammatory
bowel disease programs at UCLA under the direction of Braun as the sole principal investigator. UCLA Technical Information shall further include information in the Field of Use described in
Schedule D hereto which is embodied in the UCLA Patent Rights and which has been conceived and reduced to practice prior to the Effective Date in the conduct of 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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the
inflammatory bowel disease programs at UCLA under the direction of Braun as the sole principal investigator. 

        1.8   "Joint Patent Rights" shall mean the patents and/or patent applications existing as of the Effective Date which are
described on Schedule E hereto and all patents and/or patent applications (including provisional patent applications) existing as of the Effective Date in any other country corresponding to any
of the foregoing, and all divisions, continuations, continuations-in-part (but only to the extent described and enabled in the parent applications), reissues, reexaminations,
supplementary protection certificates and extensions thereof, and any patents that issue thereon. 

        1.9   "Joint Technical Information" shall mean, as of the Effective Date, the following information in the Field of Use which
is described in the Joint Patent Rights: Know-how, trade secrets, unpublished patent applications, software, bioinformatics, unpatented technology, technical information, statistical
information and analyses, biological materials, preclinical and clinical information, which has been conceived and reduced to practice prior to the Effective Date in the conduct of the inflammatory
bowel disease programs at CSMC and UCLA under the direction of Targan and Braun as the sole principal investigators at their respective institutions. Joint Technical Information shall further include
information in the Field of Use described in Schedule F hereto which is embodied in the Joint Patent Rights and which has been conceived and reduced to practice prior to the Effective Date in
the conduct of the inflammatory bowel disease programs at CSMC and UCLA under the direction of Targan and Braun as the sole principal investigators at their respective institutions. 

        1.10 "FDA" shall mean the United States Food and Drug Administration, or any successor agency thereof. 

        1.11 "Field of Use" shall mean the field of use for which the license to the Patent Rights provided by Section 2
hereof is granted to Prometheus, as set forth in Schedule G hereto. 

        1.12 "Funding Agencies" shall mean any public or private granting agencies which have provided funding to CSMC, UCLA or any
of their investigators for the development of any of the Patent Rights prior to the Effective Date. 

        1.13 "Future Patent Rights" shall mean any patents and/or patent applications claiming Inventions invented after the
Effective Date through any use of the Patent Rights licensed hereunder arising from work conducted by Targan or Braun or under the direction of Targan or Braun as sole principal investigator for CSMC
or UCLA, respectively, and any patents and/or patent applications (including provisional patent applications) in any other country corresponding to any of the foregoing, and all divisions,
continuations, continuations-in-part, reissues, reexaminations, supplementary protection certificates and extensions thereof, whether domestic or foreign, and any patents that
issue thereon. 

        1.14 "Future Technical Information" shall mean the following information in the Field of Use developed after the Effective
Date through practicing the Inventions claimed in or otherwise arising through any use of the Patent Rights licensed hereunder arising from work conducted by Targan or Braun or under the direction of
Targan or Braun as sole principal investigator for CSMC or UCLA, respectively: Know how, trade secrets, unpublished patent applications, software, bioinformatics, unpatented technology, technical
information, statistical information and analyses, biological materials, preclinical and clinical information and any and all confidential and proprietary information described in the Future Patent
Rights or Inventions invented after the Effective Date through any use of the Patent Rights. 

        1.15 "Prometheus Improvements" shall mean any and all processes, uses, designs, applications, methods and
compositions-of-matter, indications, improvements, enhancements and modifications 

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in
the Field of Use directly based upon or directly created using the Patent Rights and which were discovered or developed by or on behalf of Prometheus (exclusive of work performed by CSMC or UCLA)
during the term of this Agreement. 

        1.16 "Invention" shall mean all unpatented, patentable and patented inventions, discoveries, designs, apparatuses, systems,
machines, methods, processes, uses, devices, models, composition of matter, technical information, trade secrets, know how, codes, programs or configurations of any kind. 

        1.17 "Product" or "Products" shall mean any human therapeutics, diagnostics
(including algorithms or any components thereof), bioinformatics and any other human health care products and/or services for
the treatment, management, prevention, diagnosis or risk assessment of diseases in the Field of Use utilizing or derived in any manner whatsoever from any of the Patent Rights, Future Patent Rights,
Future Technical Information or Prometheus Improvements. 

        1.18 "Technical Information" shall mean any CSMC Technical Information, UCLA Technical Information and/or Joint Technical
Information. 

        1.19 "Territory" shall mean the World. 

        2.    LICENSE    

        2.1    Grant of Exclusive Rights.    Subject to the following provisions of this Section 2, each of CSMC and
UCLA, as their respective interests may appear, hereby grants to Prometheus, and Prometheus hereby accepts from CSMC and UCLA, as their respective interests may appear, the exclusive, worldwide
license during the term of this Agreement (as provided in Section 6 hereof) to conduct research in the Field of Use using the Patent Rights and to develop, use, make, practice, import, carry
out, manufacture, have manufactured, offer for sale, sell and/or have sold Products in the Field of Use in the Territory using the Patent Rights. The foregoing grant of exclusivity is made expressly
subject to the following: 

        (a)   all
applicable laws and regulations, including, without limitation, the requirements of federal law as pertains to the manufacture of products within the United States; 

        (b)   all
applicable rules of the Funding Agencies which have provided funding to CSMC or UCLA or to any of their respective investigators for the development of the Patent
Rights; and 

        (c)   the
following non-exclusive rights to the Patent Rights, which are retained by CSMC and UCLA within the Field of Use: 

          (i)  Subject
to Prometheus' right to prior review to determine the patentability within [***] days following receipt by Prometheus, the right to
submit for publication the scientific findings from research conducted by or through CSMC, UCLA or their respective investigators related to the Patent Rights; 

         (ii)  Except
as provided in subparagraph (iv) hereof, the right (x) to use any tangible or intangible information contained in the Patent Rights (so long as
CSMC or UCLA, as applicable, shall treat such information as Confidential Information and maintain its confidentiality in accordance with Section 10 hereof), for CSMC's and UCLA's internal
teaching and other educationally-related and non-commercial (except for charges to their own patients) clinical purposes, where clinical use does not involve a third party funding grant to
commercialize such information, and (y) to obtain research funding for further 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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study
and development thereof from governmental and other non-profit organizations (including grant applications); and 

        (iii)  Except
as provided in subparagraph (iv) hereof, the right to conduct research using the Patent Rights, Future Patent Rights and Future Technical Information,
and to develop, use, make, practice, carry-out, and otherwise exploit the Patent Rights, Future Patent Rights and Future Technical Information for CSMC's and UCLA's internal research and
non-commercial (except for charges to their own patients) clinical purposes, where clinical use does not involve a third party funding grant to commercialize any Product. 

        (iv)  Except
as provided by Sections 2.3 and 2.6 hereof, neither CSMC nor UCLA shall, under any circumstances, grant and/or transfer any rights retained by CSMC and
UCLA under this Section 2.1(c) to any third party (other than to Prometheus or, where required by applicable law, rule, regulation, governmental policy or contract, to any Funding Agency or the
United States Government) to commercialize Inventions or information related thereto derived directly from the Patent Rights in the Field of Use as a result of CSMC's or UCLA's teaching and internal
research and clinical activities with respect to the Patent Rights otherwise permitted by subparagraphs (ii) and (iii) above. 

         (d)  Notwithstanding
any other provision hereof to the contrary, all rights to the Patent Rights outside of the Field of Use are retained by CSMC and UCLA. 

        2.2    Right to Sublicense or Assign Rights.    Prometheus shall have the right to grant sublicenses or to assign any
or all of the rights granted hereunder consistent with this Agreement; provided, however, that Prometheus shall not sublicense or assign its rights to any part of the Patent Rights licensed under this
Agreement, or assign its rights under this Agreement, to any entity which is not a recognized biopharmaceutical, pharmaceutical or bio-diagnostic company which either (i) is listed
on Schedule H hereto or (ii) is generally recognized in such industries and has a level of science, management and investors of such quality as shall be acceptable to CSMC and UCLA (an
"Acceptable Assignee") on the basis of their prior written consent. Such consent shall not be unreasonably withheld. In order to preserve and protect the value of the Patent Rights, Prometheus shall
obtain the written consent of CSMC and UCLA prior to entering into any sublicense or assignment with any party who is not an Acceptable Assignee under clause (i) above. Prometheus shall also
keep CSMC and UCLA reasonably informed with respect to the progress of any relations entered into with any sublicenses or assignments entered into by Prometheus with any Acceptable Assignee. As an
express condition of any such sublicense or assignment, any such assignee or sublicensee shall be required to agree in writing to be bound by commercially reasonable royalty reporting and record
keeping, indemnification and inspection provisions, and the applicable provisions of this Agreement, including, without limitation, those pertaining to the use of CSMC's and UCLA's names and marks,
indemnification of CSMC and UCLA and the Confidential Information of CSMC and UCLA. If Prometheus shall conduct one or more audits of its sublicensees or assignees hereunder during the term hereof,
Prometheus shall provide copies of all such audit reports to CSMC and UCLA on a timely basis. The covenants pertaining to the use of CSMC's and UCLA's names and marks, the indemnification of CSMC and
UCLA and the Confidential Information in any sublicense or assignment shall run for the benefit of CSMC and UCLA, who shall be expressly stated as being third-party beneficiaries thereof with respect
to the covenants set forth in this Agreement. 

        2.3    Certain Future Rights.    The following section shall pertain to Inventions which constitute Future Patent
Rights or Future Technical Information. Subject to the rights and the applicable 

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rules
of the Funding Agencies, Prometheus shall have, for a period of [***] days after either (i) receipt by Prometheus of written notice from CSMC or UCLA disclosing in
adequate detail any such Inventions in the Field of Use, or (ii) written notification by Targan or Braun to each of Prometheus, CSMC and UCLA disclosing in adequate detail any such Inventions
in the Field of Use, the exclusive first right to negotiate with CSMC and UCLA to obtain one or more licenses to the Future Patent Rights in the Field of Use and/or Future Technical Information in the
Field of Use, upon such terms and conditions as shall be discussed by the parties hereto, which terms and conditions shall include provisions for fair market value consideration for the grant of any
such licenses. Subject to the rights and applicable rules of the Funding Agencies or the United States Government, and to the extent it would not impair or jeopardize any efforts of CSMC and UCLA to
obtain domestic or foreign patent rights, CSMC and UCLA shall promptly inform Prometheus of Future Patent Rights in the Field of Use and/or Future Technical Information in the Field of Use as may be
developed by CSMC or UCLA. If Prometheus declines or fails to pursue or if the parties fail to conclude negotiations for a license to such Future Patent Rights in the Field of Use and/or Future
Technical Information in the Field of Use during the [***] day period specified above, then CSMC and UCLA shall have the right to commence discussions with any other party
concerning such Future Patent Rights and/or Future Technical Information. Subject to the provisions of this Section 2.3, Prometheus acknowledges and agrees that CSMC and UCLA expressly retain
and reserve any and all right, title and interest to Future Patent Rights and Future Technical Information, whether or not in the Field of Use, and, accordingly, no license to any Future Patent Rights
or Future Technical Information is granted to Prometheus under this Agreement. CSMC and UCLA shall each use their reasonable and continuing efforts during the term of this Agreement, in accordance
with their policies and procedures, where appropriate, to file and maintain patent applications claiming Inventions in the Field of Use. 

        2.4    License to Use Improvements.    Prometheus hereby grants to CSMC and UCLA the following nonexclusive,
royalty-free, fully paid-up rights and licenses to the Prometheus Improvements: 

        (a)   Subject
to Prometheus' right to prior review to determine the patentability within [***] days following receipt by Prometheus, the right and
license to publish the scientific findings from research conducted by or through Prometheus or on its behalf by CSMC, UCLA or their respective investigators, related to the Prometheus Improvements; 

        (b)   Except
as provided below in Section 2.4 hereof, the right and license to use any tangible or intangible information contained in the Prometheus Improvements (so
long as CSMC and UCLA shall treat such information as Confidential Information and maintain its confidentiality in accordance with Section 10 hereof), for CSMC's and UCLA's internal teaching
and other educationally-related and non-commercial (except for charges to their own patients) clinical purposes, where clinical use does not involve a third party funding grant to
commercialize such information, and to obtain research funding from governmental and other non-profit organizations (including grant applications); and 

        (c)   Except
as provided below in Section 2.4 hereof, the right and license to conduct research using the Prometheus Improvements, and to develop, use, make, practice
and carry out the Prometheus Improvements for CSMC's and UCLA's internal teaching and research and non-commercial (except for charges to their own patients) clinical purposes, where
clinical use does not involve a third party funding grant to commercialize any Product. 

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        Except
as provided in Sections 2.3 and 2.6 hereof, neither CSMC nor UCLA shall, under any circumstances, grant and/or transfer any rights granted to CSMC and UCLA under this
Section 2.4 to any third party (other than to Prometheus or, where required by applicable law, rule, regulation, governmental policy or contract, to any Funding Agency or the United States
Government) to commercialize Inventions in the Field of Use resulting directly from the Prometheus Improvements as a result of CSMC's and UCLA's internal research and clinical activities with respect
to the Prometheus Improvements otherwise permitted by Sections 2.4(b) and (c) above. 

        2.5    Milestones.    Prometheus acknowledges that it is important to CSMC and UCLA, and a requirement of the federal
government under 35 U.S.C. Section 203, that Prometheus pursue the development, commercialization and marketing of Products, work the Patent Rights and otherwise exercise commercially
reasonable efforts to maximize the value of this Agreement to CSMC and UCLA.
Prometheus shall be deemed to have exercised commercially reasonable efforts to maximize the value of this Agreement to CSMC and UCLA, and the milestone requirements of this Section 2.5 shall
be deemed to have been met, if Prometheus meets the respective requirements set forth on Schedule I hereto, with each such requirement being deemed a separate and independent condition each, a
"Milestone." Within [***] days after each anniversary of the Effective Date, Prometheus shall prepare and deliver to CSMC an annual written report (to be certified by an
executive officer of Prometheus) indicating its compliance with the Milestones. If Prometheus fails to meet any annual Milestone designated in Schedule I hereto, CSMC and UCLA may, at their
option and as their sole remedies for Prometheus' breach of this Section 2.5, upon written notice to Prometheus, convert the exclusive license granted under Section 2.1 hereof to a
non-exclusive license or to a co-exclusive license, or terminate this license as provided under 35 U.S.C. Section 203. 

        2.6    Procedure for Granting Access to Technical Information.    The grant of rights by CSMC and UCLA to Prometheus
pursuant to Section 2.1 hereof are expressly subject to the following provisions: 

        (a)   Responsibility for Monitoring Access to Technical Information.    During the term of this Agreement, the
responsibility for monitoring access to the Technical Information in the Field of Use at CSMC shall be borne by Targan or, in the event that Targan shall retire, die, become disabled or otherwise
ceases to be an employee of CSMC for whatever reason, the Senior Vice President for Academic Affairs of CSMC (or his or her functional equivalent at CSMC) and at UCLA shall be borne by Braun or, in
the event that Braun shall retire, die, become disabled or otherwise ceases to be an employee of UCLA for whatever reason, the Director, Business Research Partnerships of UCLA (or his or her
functional equivalent at UCLA) (collectively, the "Gatekeeper"). Subject to Sections 2.1(c), 2.4 and 3.4 hereof, the Gatekeeper shall not grant access to the Technical Information in the Field
of Use to any person except as provided in this Section 2.6, and CSMC's and UCLA's sole responsibility with respect to requests for the grant of access to the Technical Information in the Field
of Use by any person shall be to refer all such requests to the Gatekeeper. 

        (b)   Conditions of Access to the Technical Information.    As a condition to any use of the Technical Information
by, and grant of access to the Technical Information to, any person within the Field of Use during the term of this Agreement, such person shall be required to (i) obtain the written consent of
the Gatekeeper to obtain the use of or access to the Technical Information within the Field of Use, and (ii) after obtaining the Gatekeeper's written consent, execute a material transfer
agreement (to be obtained from the Gatekeeper) in the form customarily employed for such purpose by CSMC or UCLA. Such material transfer agreement shall identify Prometheus' rights in such Technical
Information and specify 

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the
obligations of the transferee, which obligations shall not be less than those of UCLA or CSMC, as applicable, under this Agreement. The Gatekeeper shall then promptly provide the executed
originals of all such material transfer agreements to CSMC and UCLA, with an executed copy to Prometheus for its records. 

        (c)   Special Situations.    Prometheus shall obtain the prior written consent of CSMC to any proposed transfer of
Technical Information to or other license agreement of any Patent Rights to GenoMed Pharmaceuticals, Inc. and any other entity for which special notice is provided by CSMC to Prometheus. 

        2.7    Conditions to Effectiveness.    As a condition to the effectiveness of this Agreement, all of the following
documents and instruments shall have been fully executed and delivered by each of the parties hereto and thereto: (i) this Agreement, (ii) that certain Subscription Agreement by and
between Prometheus and, respectively, CSMC and UCLA, (iii) [***] shares of Series A Preferred Stock shall have been issued to CSMC,
(iv) [***] shares of Series A Preferred Stock shall have been issued to UCLA and (v) those certain Consulting Agreements by and between Prometheus and each
of Targan and Braun. For purposes of this Agreement, the "Effective Date" shall mean, and this Agreement shall become effective upon, the date upon which the last of the documents described in the
preceding sentence has been fully executed and delivered by all of the parties hereto and thereto. 

        3.    REPRESENTATIONS AND WARRANTIES    

        3.1    Exclusive Rights of CSMC.    CSMC represents and warrants to Prometheus that, to the best of its current
knowledge, prior to the Effective Date, CSMC has obtained all rights to the CSMC Patent Rights currently existing in the Field of Use from the individual inventors thereof, in accordance with the
policies of CSMC for each such CSMC Patent Rights (such that the inventor shall retain no rights to the CSMC Patent Rights within the scope of the license granted pursuant to Section 2.1
hereof). Except for the rights, if any, of the Funding Agencies or the United States Government, CSMC represents and warrants that, to the best of its current knowledge (without investigation outside
of CSMC as to the representations and warranties of CSMC) (i) CSMC is the owner of the entire right, title and interest in and to the CSMC Patent Rights free and clear of all liens, charges and
encumbrances, (ii) CSMC has the sole right to grant licenses to the CSMC Patent Rights hereunder, (iii) CSMC has not granted licenses to the CSMC Patent Rights to any other party that
would restrict rights granted hereunder except as stated herein, (iv) the CSMC Patent Rights do not infringe any rights owned or possessed by any third party, and (v) there are no
claims, judgments or settlements to be paid by CSMC with respect to the CSMC Patent Rights or pending claims or litigation relating to the CSMC Patent Rights. Except for any potential or actual rights
of Funding Agencies or the United States Government, CSMC is not aware that any additional rights or licenses are necessary for Prometheus to exercise its license rights granted by CSMC under this
Agreement. 

        3.2    Exclusive Rights of UCLA.    UCLA represents and warrants to Prometheus that it has the lawful right to grant
the licenses in this Agreement. UCLA's further representations and warranties under this Section 3.2 and Section 3.3 are limited to the actual knowledge of the Director of Business
Research Partnerships, the UCLA signatories to this Agreement and Braun. UCLA represents and warrants to Prometheus that, to the best of its current knowledge, prior to the Effective Date, UCLA has
obtained all rights to the UCLA Patent Rights currently existing in the Field of Use from the individual inventors thereof, in accordance with the policies of UCLA for each such UCLA Patent Rights
(such that the inventor shall retain no rights to the UCLA Patent Rights within the scope of the license granted pursuant to Section 2.1 hereof). Except for the 

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rights,
if any, of the Funding Agencies or the United States Government, UCLA, represents and warrants that, to the best of its current knowledge (without investigation outside of UCLA as to the
representations and warranties of UCLA) (i) UCLA is the owner of the entire right, title and interest in and to the UCLA Patent Rights free and clear of all liens, charges and encumbrances,
(ii) UCLA has the sole right to grant licenses to the UCLA Patent Rights hereunder, (iii) UCLA has not granted licenses to the UCLA Patent Rights to any other party that would restrict
rights granted hereunder except as stated herein, (iv) the UCLA Patent Rights do not infringe any rights owned or possessed by any third party, and (v) there are no claims, judgments or
settlements to be paid by UCLA with respect to the UCLA Patent Rights or pending claims or litigation relating to the UCLA Patent Rights. Except for any potential or actual rights of Funding Agencies
or the United States Government, UCLA is not aware that any additional rights or licenses are necessary for Prometheus to exercise its license rights granted by UCLA under this Agreement. 

        3.3    Joint Exclusive Rights.    CSMC and UCLA, severally and not jointly, each represents and warrants to Prometheus
that, to the best of its respective current knowledge, prior to the Effective Date, CSMC and UCLA have obtained all rights to the Joint Patent Rights currently existing in the Field of Use from the
individual inventors thereof, in accordance with the policies of CSMC and UCLA for each such Joint Patent Rights (such that the inventor shall retain no rights to Joint Patent Rights within the scope
of the license granted pursuant to Section 2.1 hereof). Except for the rights, if any, of the Funding Agencies or the United States Government, CSMC and UCLA, severally and not jointly, each
represents and warrants that, to the best of its respective current knowledge (without investigation outside of CSMC or UCLA as to the representations and warranties of CSMC and UCLA under this
Section 3.3) (i) CSMC and UCLA are the owners of the entire right, title and interest in and to the Joint Patent Rights free and clear of all liens, charges and encumbrances,
(ii) CSMC and UCLA have the sole right to grant licenses to the Joint Patent Rights hereunder, (iii) CSMC and UCLA have not granted licenses to the Joint Patent Rights to any other party
that would restrict rights granted hereunder except as stated herein, (iv) the Joint Patent Rights do not infringe any rights owned or possessed by any third party, and (v) there are no
claims, judgments or settlements to be paid by CSMC or UCLA with respect to the Joint Patent Rights or pending claims or litigation relating to the Joint Patent Rights. Except for any potential or
actual rights of Funding Agencies or the United States Government, CSMC and UCLA are not aware that any additional rights or licenses are necessary for Prometheus to exercise its license rights
granted by CSMC and UCLA under this Agreement. 

        3.4    Rights Retained by Funding Agencies.    Prometheus acknowledges that the Patent Rights have been developed in
part under one or more funding agreements with one or more Funding Agencies and that such Funding Agencies have certain statutory non-exclusive rights relative thereto for use for
government purposes as well as regulatory or statutory "march-in rights"
(collectively, "statutory rights"). This Agreement is explicitly made subject to such statutory rights and, to the extent of any conflict between any such statutory rights and this Agreement, such
statutory rights shall prevail. 

        3.5    Limited Warranty.    Neither CSMC nor UCLA makes any representation or warranty other than those expressly
specified in this Agreement. Prometheus accepts the Patent Rights on an "AS IS" basis. NEITHER CSMC NOR UCLA MAKES ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR OTHER ATTRIBUTES OF ANY OF THE PATENT RIGHTS. 

10

 

        4.    CONSIDERATION    

                In
consideration of the execution and delivery by CSMC and UCLA of this Agreement, Prometheus agrees as follows: 

        4.1    Issuance of Common Stock.    As of the Effective Date, Prometheus shall have issued
[***] shares of Series A Preferred Stock, $1.00 par value per share, of Prometheus (the "Shares") to CSMC and [***] Shares to UCLA. Prometheus
represents and warrants to CSMC and UCLA that, as of the Effective Date, the total Shares issuable to CSMC and UCLA hereunder shall equal [***]%, in the aggregate, of the total
outstanding common and preferred shares of Prometheus, as more fully described in the capitalization table attached as Schedule L hereto. CSMC and UCLA each acknowledges and agrees that the
Shares, royalties and the other obligations of Prometheus under this Agreement constitute fair market value for the rights granted to Prometheus under this Agreement based upon arms-length
negotiations with Prometheus and an independent valuation made by CSMC's outside expert. 

        4.2    Ongoing Research Support.    Attached hereto as Schedule K is the Research Agreement form between
Prometheus and CSMC and Targan. 

        4.3    Right of First Consideration.    With respect to continued research in the Field of Use, Prometheus shall
consider CSMC and UCLA as its external research facilities of first choice, for research contracts in excess of [***] Dollars ($[***]) for research in
the Field of Use, where CSMC or UCLA, as the case may be, is generally considered to have demonstrated expertise in the area of research (excluding therefrom clinical trials in which CSMC or UCLA
could be considered to be an inappropriate choice by reason of the relationships of the parties hereto to Targan and Braun). Prometheus shall notify CSMC and UCLA in each case where Prometheus intends
to fund such external research in the Field of Use. Such notice shall specify the general criteria upon which Prometheus intends to choose the appropriate facility to conduct the proposed research,
and CSMC or UCLA, as applicable, shall promptly provide such information to Prometheus as shall be relevant in demonstrating its ability to meet such criteria. Upon the presentation of such
information, CSMC or UCLA, as the case may require, and Prometheus shall negotiate in good faith the proposed terms of a research contract, to be consummated within forty-five
(45) days after receipt of detailed written notice from Prometheus specifying the research to be conducted. 

        4.4    Payment of Royalties.    Prometheus shall pay to CSMC and UCLA certain royalties, which shall be determined and
paid in accordance with Schedule J hereto. The respective rights and obligations of the parties set forth in Schedule J hereto are hereby incorporated by reference. Prometheus shall
permit representatives of CSMC and UCLA, upon reasonable prior notice, to audit and inspect its books and records (including such thereof as shall exist in computer systems and computer memories) in
order for CSMC and UCLA to determine that Prometheus is in full compliance with its obligations to pay and account for the royalties required by this Agreement. 

        5.    PATENT RIGHTS    

        5.1   Commencing
on the Effective Date, Prometheus shall assume, in coordination with CSMC and UCLA, full responsibility for the application, maintenance, reexamination,
reissue, opposition and prosecution of any kind (collectively "Prosecution") relating to the Patent Rights in the Territory. Subject to the approval of CSMC and UCLA (which approval shall not be
unreasonably withheld), Prometheus shall have the right to select counsel with respect to the responsibility assumed by Prometheus in Section 5.1 hereof, and Prometheus shall diligently pursue
the Prosecution of the Patent Rights to the benefit of CSMC and UCLA. Prometheus shall provide to CSMC and UCLA copies of any and all material or pertinent communications with the United States Patent
and Trademark Office, or any foreign patent office. 

***
Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

11

  

        5.2   Prometheus
shall obtain the prior written consent of CSMC or UCLA, as the case may require (which consent shall not be unreasonably withheld), prior to abandoning,
disclaiming, withdrawing, seeking reissue or allowing to lapse any material patent, patent application or Prometheus Improvements relating to the Patent Rights (collectively, "Patent Rights
Restrictions"). In the event that Prometheus shall elect to abandon the Prosecution or maintenance of any patent or patent application included in the Patent Rights, Prometheus shall notify CSMC and
UCLA of such election at least [***] days before a final due date which would result in abandonment or bar of patentability of the patent or patent application. In such event,
CSMC or UCLA may, at its sole option and expense, continue Prosecution or maintenance of the patent application or patent. Prometheus further agrees that it shall not file any
continuation-in-part application relating to the Patent Rights unless the additional disclosure or material to be included in the continuation-in-part
application is necessary or appropriate to support the patentability of a claim recited in a parent application on which the continuation-in-part application is based. Prior to
filing any such continuation-in-part application, Prometheus shall consult with CSMC and UCLA to discuss the need for filing such an application. If either CSMC or UCLA shall
disagree with Prometheus' conclusion that such a continuation-in-part application is either necessary or appropriate to support the patentability of a claim recited or capable
of being recited in a patent application, then the matter shall be submitted for resolution to independent patent counsel mutually agreed to by the parties, who will determine whether a
continuation-in-part application is necessary or appropriate in accordance with this Section 5.2. Any decision by such independent patent counsel shall be conclusive and
binding upon the parties hereto. 

        5.3   Prometheus
shall pay all expenses resulting from its obligations in Section 5.1 hereof. CSMC and UCLA shall each exercise reasonable efforts to have the inventors
(to the extent they are available and on CSMC's or UCLA's staff as employees) cooperate fully with Prometheus with respect to the Prosecution, maintenance and protection of the Patent Rights and CSMC
and UCLA shall be reimbursed for all reasonable out-of-pocket expenses as such expenses are incurred. 

        5.4   Upon,
and only upon, receipt of written authorization from CSMC, Prometheus is to promptly and expressly abandon U.S. Patent Applications Serial Nos. 08/637,670 and
08/630,672 and provide CSMC with a copy of the notice of abandonment filed in the United States Patent and Trademark Office corresponding to each such application. Prometheus shall also not seek to
revive the aforementioned abandoned application without the advance written consent of CSMC. Prometheus shall pay all expenses relating to its responsibility in Section 5.4 hereof and is to
reimburse CSMC for all of its expenses, including attorneys fees, incurred by CSMC in connection with Prometheus fulfillment of its responsibility under Section 5.4. 

        6.    TERM AND TERMINATION    

        6.1    Term.    Except as provided in Section 6.2 hereof, the term of this Agreement shall commence on the
Effective Date and shall expire on a country-by-country basis, on the date upon which the last to expire of the patents covering the Patent Rights shall expire. 

        6.2    Termination.    Except as provided by Section 6.3 hereof, this Agreement shall terminate upon the
earliest to occur of the following: 

        (a)   automatically
if Prometheus shall enter into a liquidating bankruptcy, be adjudged insolvent, liquidate, dissolve and/or if the business of Prometheus shall be placed in
the hands of a receiver, assignee, or trustee, whether by voluntary act of Prometheus or otherwise; 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

12

 

provided,
however, that if it is involuntary, termination shall not take place unless the act is not reversed within thirty (30) days. Further, Prometheus shall give CSMC and UCLA at least
forty-five (45) days' prior written notice before Prometheus initiates any bankruptcy proceeding, and CSMC and UCLA shall have the right to terminate this Agreement immediately upon
receipt of such notice; 

        (b)   upon
thirty (30) days written notice from CSMC and UCLA if within such thirty (30) day period Prometheus shall fail to pay fully any royalty payment
required by Section 4.4 hereof; 

        (c)   upon
ninety (90) days' written notice from CSMC and UCLA if within such ninety (90) day period Prometheus shall fail to cure fully any breach or default of
any other material obligation under this Agreement as described in such written notice detailing the facts of such breach with reasonable specificity; provided, however, that Prometheus may avoid such
termination if before the end of such 90-day period such breach or default has been substantially cured by Prometheus to the reasonable satisfaction of CSMC and UCLA; 

        (d)   upon
ninety (90) days' written notice from Prometheus (as to the breaching or defaulting party only) if within such ninety (90) day period either CSMC or
UCLA shall fail to cure fully any breach or default of any material obligation under this Agreement as described in such written notice detailing the facts of such breach with reasonable specificity;
provided, however, that CSMC or UCLA, as the case may require, may avoid such termination if before the end of such 90-day period such breach or default has been substantially cured by
CSMC or UCLA, as applicable, to the reasonable satisfaction of Prometheus; provided, however, that in the event of any such termination by Prometheus, all Patent Rights then held by Prometheus shall
be reassigned to the party or parties affected by such termination; or 

        (e)   upon
the mutual written agreement of the parties hereto. 

        6.3    Obligations Upon Termination.    Upon any termination of this Agreement pursuant to Section 6.2 hereof,
nothing herein shall be construed to release any party from any liability for any obligation incurred through the effective date of termination (e.g., confidentiality, reimbursement of patent
expenses incurred prior to such date, etc.) or for any breach of this Agreement prior to the effective date of such termination. Prometheus may, for a period of one (1) year after the effective
date of such termination, sell all tangible Products customarily classified as "inventory" that it has on hand at the date of termination. 

        6.4    Effect of Termination.    In the event of any termination of this Agreement pursuant to Section 6.2
hereof, where such termination has not been caused by any action or inaction on the part of any sublicensee of Prometheus or by any breach by such sublicensee of its obligations under its sublicense
from Prometheus, such termination of this Agreement shall be without prejudice to the rights of each non-breaching sublicensee of Prometheus and each non-breaching sublicensee
shall be deemed to be a licensee of CSMC and UCLA thereunder, and CSMC and UCLA shall be entitled to all rights, but shall not be subject to any obligations (other than the grant of license
and appurtenant obligations under this Agreement to the extent provided for in such sublicense) of Prometheus thereunder. 

        6.5    Right to Institute Legal Actions.    Notwithstanding the provisions of Section 6.2 hereof, CSMC and
UCLA, on the one hand, and Prometheus, on the other hand, may institute any other legal action or pursue any other remedy against the other party permitted by applicable law if the other party does
not substantially cure any breach or default of any material obligation as provided herein. 

13

 

        6.6    Reversion of Rights.    Notwithstanding Section 5 hereof, full responsibility for Prosecution of the
Patent Rights shall, at the option of CSMC and UCLA, and at their sole expense from the date of reversion, revert to CSMC and UCLA upon any termination of this Agreement. 

        7.    INFRINGEMENT BY THIRD PARTIES    

        7.1    Enforcement.    Prometheus shall have the first right to enforce, at its sole expense, any Patent Rights to the
extent licensed hereunder against infringement by third parties and shall notify CSMC and UCLA in writing in advance of all such enforcement efforts. In the case of UCLA, this right of Prometheus to
enforce UCLA Patent Rights shall be subject to approval by the University of California Board of Regents or its designate, which reserves the first right to sue infringers under the UCLA Patent
Rights. UCLA shall make a decision to sue infringers or to permit Prometheus to enforce the UCLA Patent Rights as soon as is practicable, but in no event more than [***] days
after Prometheus' notification to UCLA of its desire to undertake enforcement efforts. In the case of CSMC, upon Prometheus' undertaking to pay all expenditures reasonably incurred by CSMC, CSMC shall
reasonably cooperate in any such enforcement and, as necessary, join as a party therein. Prometheus shall reimburse CSMC for all expenses, including reasonable attorneys' fees, in connection with any
such enforcement. In the event that Prometheus does not file suit against or commence and conclude settlement negotiations with a substantial infringer of Patent Rights within
[***] days of receipt of a written demand from CSMC or UCLA that Prometheus bring suit, then the parties will consult with one another in an effort to determine whether a
reasonably prudent licensee would institute litigation to enforce the patent in question in light of all relevant business and economic factors (including, but not limited to, the projected cost of
such litigation, the likelihood of success on the merits, the probable amount of any damage award, the prospects for satisfaction of any judgment against the alleged infringer, the possibility of
counterclaims against the parties hereto, the impact of any possible adverse outcome on Prometheus and the effect any publicity might have on the parties' respective reputations and goodwill). If
after such process, it is determined that a suit should be filed and Prometheus does not file suit or commence settlement negotiations forthwith against the infringer, then CSMC and UCLA shall have
the right at their own expense to enforce any Patent Rights licensed hereunder on behalf of themselves and Prometheus. Any amount recovered in any such action or suit, whether by judgment or
settlement,
shall be paid to or retained entirely by whichever party brought the action, or, where multiple parties participate in such action or suit, in proportion to the expense incurred by each party. 

        7.2    Defense Of Patent Rights.    In the event that any Patent Rights are the subject of a legal action seeking
declaratory relief or of any reexamination or opposition proceeding instituted by a third party, the parties agree to promptly consult with another concerning the defense of such actions or
proceedings. If the parties agree that such defense should be undertaken, then Prometheus shall bear the expenses, including attorneys' fees, associated with such defense and in any recoupment of
expenses. If the parties disagree, then the party desiring to defend the action or proceeding may proceed with such defense and will bear its own expenses. 

        8.    INDEMNIFICATION    

        8.1    Indemnification by Prometheus.    Subject to Section 8.2 hereof, Prometheus shall hold harmless and
indemnify CSMC and UCLA and their respective officers, directors, employees (including the inventors) and agents, sponsors of the research (except Prometheus) and the Regents of the University of
California, from and against any and all claims, damages and expenses (including reasonable attorneys' fees and expenses and costs of investigation) arising out of any 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

14

 

litigation,
arbitration or dispute of any kind involving Prometheus or its Affiliates or permitted sublicensees or resulting from the grant of this license or the exercise of any rights hereunder, or
any sublicense, or any use of the Patent Rights by Prometheus or its Affiliates or any permitted sublicensee, including, but not limited to, (i) the preclinical development and clinical testing
of Products, and (ii) the manufacture, sale, use, marketing, or other disposition of Products developed, manufactured, sold, marketed, used or otherwise disposed of under the Agreement. As a
part of its obligations hereunder, Prometheus shall reimburse CSMC and UCLA for their respective out-of-pocket expenses (including reasonable attorneys' fees and costs of
investigation) which are incurred as a result of any investigation, defense or settlement relating to the foregoing, which reimbursement shall be made to CSMC and UCLA upon receipt by Prometheus of
invoices reflecting in reasonable detail such expenses incurred by CSMC and UCLA. Prometheus shall obtain and maintain insurance policies (including products liability and general liability policies
at such time as is appropriate) which are reasonable and necessary to cover its activities and to comply with the indemnification obligations set forth above. Such insurance policies shall name CSMC
and UCLA as additional insured parties, and shall provide a minimum of $[***] in coverage per occurrence and provide for a [***] day notice to CSMC and
UCLA of any material change in such policies. Upon initiation of any human clinical studies using a therapeutic molecule covered by the Patent Rights, Prometheus shall have first increased its
insurance coverage to a minimum of $[***] in the aggregate. Prometheus shall provide CSMC and UCLA with Certificates of Insurance within [***] days of
the Effective Date (subject to extension if reasonably required) and annually thereafter, evidencing the policies required in accordance with this Section 8.1. 

        8.2    Notice of Claim.    CSMC or UCLA, as applicable, shall promptly notify Prometheus in writing of any claim or
suit or material threat thereof brought against CSMC or UCLA in respect of which indemnification may be sought and, to the extent allowed by law, shall reasonably cooperate with Prometheus in
defending or settling any such claim or suit. No settlement of any claim, suit or threat thereof received by CSMC or UCLA and for which CSMC or UCLA intends to seek indemnification, shall be made
without the prior joint written approval of Prometheus, CSMC and UCLA. 

        9.    USE OF NAMES    

        Prometheus
shall not, unless as required by any law or governmental regulation, use the name of CSMC or UCLA, or any of their respective trademarks or service marks, without express
prior written consent of the Vice President for Public Relations and Marketing of CSMC or the Director, Business Research Partnerships of UCLA. Further, prior to any reference by Prometheus to the
name or marks of CSMC or UCLA in any manner, Prometheus shall provide the appropriate party with a writing reflecting the proposed reference so that the appropriate party can review the reference
within a
reasonable period of time prior to the proposed use thereof by Prometheus. This limitation includes, but is not limited to, use by Prometheus in any advertising, offering circular, prospectus, sales
presentation, news release or trade publication. Subject to compliance by Prometheus with the foregoing, which shall be deemed conditions precedent to any use of the CSMC or UCLA name or marks by
Prometheus, Prometheus shall ensure that the name of CSMC or UCLA is used as scientifically or academically appropriate in the "byline" of any article, abstract, manuscript or any other publication
related to the subject matter hereof. 

        10.    CONFIDENTIAL INFORMATION    

        10.1 The
parties hereto shall keep the terms of this Agreement and all business and scientific discussions relating to the business of the parties strictly confidential. All
patient information that a party is given access to by another party shall be subject to the provisions of the Confidentiality of 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

15

 

Medical
Information Act (Cal. Civ. Code § 56, et seq.). It may, from time to time, be necessary for the parties, in connection with performance under this Agreement, to disclose
Confidential Information (including know-how) to each other. The party receiving such Confidential Information ("Receiving Party") shall keep in strictest confidence the Confidential
Information ("Disclosing Party"), using the standard of care it normally uses for information of like character, and shall not disclose the Confidential Information to any third party or use it except
as expressly authorized by the prior written consent of the Disclosing Party or as otherwise permitted by this Agreement; provided, however, that Prometheus may disclose the Confidential Information
of CSMC or UCLA to its Affiliates and sublicensees as shall be reasonably necessary to carry out the intent of this Agreement or any sublicense granted by Prometheus as contemplated by this Agreement
if such Affiliates and/or sublicensees each execute a confidentiality agreement containing confidentiality provisions no less restrictive than those confidentiality provisions contained in this
Section 10. The Receiving Party's obligation hereunder shall not apply to Confidential Information that the Receiving Party can show: 

        (a)   is
or later becomes part of the public domain through no fault or neglect of the Receiving Party; 

        (b)   is
received in good faith from a third party having no obligations of confidentiality to the Disclosing Party, provided that the Receiving Party complies with any
restrictions imposed by the third party; 

        (c)   is
independently developed without use of the Disclosing Party's Confidential Information by the Receiving Party; or 

        (d)   is
required by law or regulation to be disclosed (including, without limitation, in connection with FDA filings or required under the California Public Records Act),
provided that the Receiving Party uses reasonable efforts to restrict disclosure and to obtain confidential treatment. 

        10.2 Each
party agrees that any disclosure or distribution of Confidential Information within its own organization shall be made only as is reasonably necessary to carry out
the intent of this Agreement. The parties further agree that any of their respective officers, employees, agents, representatives or approved sublicensees to whom any Confidential Information is
disclosed or distributed shall have agreed to maintain its confidentiality. In such event, the Receiving Party shall identify with reasonable particularity, upon request by the Disclosing Party, each
person within its organization to whom the Receiving Party has disclosed or distributed Confidential Information. 

        10.3 If
a subpoena or other legal process concerning Confidential Information is served upon any party hereto pertaining to the subject matter hereof, the party served shall
notify the other party immediately, and the other party shall cooperate with the party served, at the other's expense, in any effort to contest the validity of such subpoena or other legal process.
This paragraph shall not be construed in any way to limit any party's ability to satisfy any governmental required disclosure of its relationship with the other party. 

        10.4 The
Patent Rights are understood by Prometheus to be the Confidential Information of CSMC and UCLA to the extent "unpublished" as such term is construed under the
United States Patent Laws. As such, Prometheus' confidentiality obligations automatically extend to any and all CSMC Technical Information, UCLA Technical Information and Joint Technical Information
and to any and all patent applications of CSMC and UCLA relating to any Patent Rights and to any and all communications with the United States Patent Office, any foreign patent office, CSMC or UCLA
relating to any Patent Rights. 

16

 

        10.5 In
the event of any termination of this Agreement, the Receiving Party shall promptly return all Confidential Information and any copies made thereof previously made
available to the Receiving Party by the Disclosing Party. 

        11.    INFORMATION EXCHANGE    

        In
addition to the Patent Rights, the parties shall cooperate to exchange such non-confidential information as may be appropriate and necessary to facilitate Prometheus'
development and commercialization of Products incorporating any Patent Rights. 

        12.    PATENT MARKING    

        In
the event any Product is the subject of a patent under the Patent Rights, Prometheus shall mark all products made, sold or otherwise disposed of by or on behalf of it or any of its
sublicensees with the word "Patent" followed by the number of the licensed patent. In such case, Prometheus shall mark any Product made using a process or method covered by any such Patent Rights with
the number of each such patent and shall respond to any request or disclosure under 35 U.S.C. § 287(b)(4)(B) by only notifying CSMC and UCLA of the request for disclosure. 

        13.    MISCELLANEOUS    

        13.1    Notices.    Any notice, request, instruction or other document required by this Agreement shall be in writing
and shall be deemed to have been given (a) if mailed with the United States Postal Service by prepaid, first class, certified mail, return receipt requested, at the time of receipt by the
intended recipient, or (b) if sent by facsimile transmission, when so sent and receipt has been acknowledged by appropriate telephone or facsimile receipt, addressed as follows: 

in
the case of CSMC to: 

Cedars-Sinai
Medical Center

8700 Beverly Boulevard

Los Angeles, California 90048-1865

Telecopier: 310.967.0101

Attn: Senior Vice President for Finance & Business Affairs 

or
in the case of UCLA to:

UCLA
Business Research Partnerships

405 Hilgard Avenue

Los Angeles, California 90095-1525

Telecopier: 310.206.3619

Attn: Director 

or
in the case of

Prometheus to:

Prometheus
Laboratories, Inc.

8110 La Jolla Shore Dr., #101

La Jolla, California 92037

Telecopier: 619.551.8081

Attn: Scott L. Glenn 

or
such other address as may be given from time to time under the terms of this notice provision. 

        13.2    Compliance with Laws.    Each party shall comply with all applicable federal, state and local laws and
regulations in connection with its activities pursuant to this Agreement. 

17

 

        13.3    Governing Law.    This Agreement shall be construed and enforced in accordance with the laws of the United
States of America and of the State of California. Los Angeles, California shall be the situs of any legal proceeding arising out of or relating to this Agreement. 

        13.4    Waiver.    Failure of any party to enforce a right under this Agreement shall not act as a waiver of that
right or the ability to assert that right relative to the particular situation involved. 

        13.5    Enforceability.    If any provision of this Agreement shall be found by a court to be void, invalid or
unenforceable, the same shall be reformed to comply with applicable law or stricken if not so conformable, so as not to affect the validity or enforceability of the remainder of this Agreement. 

        13.6    Modification.    No change, modification, or addition or amendment to this Agreement, or waiver of any term or
condition of this Agreement, is valid or enforceable unless in writing and signed and dated by the authorized officers of the parties to this Agreement. 

        13.7    Entire Agreement.    This Agreement and the Subscription Agreement constitute the entire agreements between
the parties and replace and supersede as of the date thereof any and all prior agreements and understandings, whether oral or written, between the parties with respect to the subject matter of such
agreements. 

        13.8    Successors.    Except as otherwise expressly provided in this Agreement, this Agreement shall be binding upon,
inures to the benefit of, and is enforceable by the parties and their respective heirs, legal representatives, successors and assigns. 

        13.9    Construction.    This Agreement has been prepared, examined, negotiated and revised by each party and their
respective attorneys, and no implication shall be drawn and no provision shall be construed against any party to this Agreement by virtue of the purported identity of the drafter of this Agreement, or
any portion thereof. 

        13.10    Counterparts.    This Agreement may be executed simultaneously in one or more counterparts, each of which
shall constitute one and the same instrument. This Agreement may be executed by telefacsimile. 

        13.11    Attorneys' Fees.    In the event of any action at law or in equity between the parties hereto to enforce any
of the provisions hereof, the unsuccessful party to such litigation shall pay to the successful party all costs and expenses, including actual attorneys' fees, incurred therein by such successful
party; and if such successful party shall recover a judgment in any such action or proceeding, such costs, expenses and attorneys' fees may be included in and as part of such judgment. 

        13.12    Assignment.    This Agreement shall be binding upon and shall inure to the benefit of CSMC and UCLA and their
successors and assigns, but it is personal to Prometheus and only assignable, in accordance with Section 2.2, with the prior written consent of CSMC and UCLA, which consent shall not be
unreasonably withheld. None of the parties shall assign their respective rights under this Agreement without the written consent of the other parties (which consent shall not be unreasonably
withheld). 

        13.13    Further Assurances.    At any time and from time to time after the Effective Date, each party shall each do,
execute, acknowledge and deliver, and cause to be done, executed, acknowledged or delivered, all such further acts, transfers, conveyances, assignments or assurances as may be reasonably required to
consummate the transactions contemplated by this Agreement. 

        13.14    Several Liability.    The obligations of CSMC and UCLA under this Agreement shall be several, and not joint. 

        13.15    Survival.    The following sections shall survive any expiration or earlier termination of this Agreement:
Section 8 ("Indemnification"), Section 9 ("Use of Name") and Section 10 ("Confidentiality"). 

18

 

        IN
WITNESS WHEREOF, the parties have caused their duly authorized representatives to execute this Agreement as of the date first above written. 

	 	 	CEDARS-SINAI MEDICAL CENTER,

a California non-profit public benefit corporation
	

 	
 	

By:	

/s/ James R. Klinenberg, M.D.
 James R. Klinenberg, M.D.

Senior Vice President for

Academic Affairs
	

 	
 	

By:	

/s/ Joseph Luevanos
 Joseph Luevanos

Senior Vice President for Finance &

Business Affairs
	

 	
 	
REGENTS OF THE UNIVERSITY OF CALIFORNIA

acting by and through its campus at Los Angeles
	

 	
 	

By:	

/s/ Christopher T. Moulding
 Christopher T. Moulding

Licensing Associate
	

 	
 	

By:	

/s/ Emily E. Waldron
 Emily E. Waldron

Licensing Associate
	

 	
 	
PROMETHEUS LABORATORIES, INC.,

a California corporation
	

 	
 	

By:	

/s/ Scott L. Glenn
 Scott L. Glenn

Chairman/CEO

19

   Schedule A 

CSMC PATENT RIGHTS  

	TITLE:	 	Methods for Selectively Detecting Perinuclear Anti-Nuclear Cytoplasmic Antibody of Ulcerative Colitis or Primary Sclerosing Cholangitis
	
INVENTORS:	
 	

Stephan R. Targan, M.D.

Alda M. Vidrich, Ph.D.
	
APPLICATION NO.:	
 	

Europe 94,103,727.1
	
FILING DATE:	
 	

March 10, 1994, European Patent Office
	
PRIORITY DATA:	
 	

March 10, 1993, U.S. Serial No. 08/028,784 (P07 31073)
	
PSBC DOCKET NO.:	
 	

FP07 32117

A-1

 

	TITLE:	 	Methods for Selectively Detecting Perinuclear Anti-Neutrophil Cytoplasmic Antibody of Ulcerative Colitis or Primary Sclerosing Cholangitis
	
INVENTORS:	
 	

Stephan R. Targan, M.D.

Alda M. Vidrich, Ph.D.
	
APPLICATION NO.:	
 	

U.S. 08/320,163
	
FILING DATE:	
 	

October 7, 1994, U.S. Patent & Trademark Office
	
PRIORITY DATA:	
 	

Continuation of U.S. Application No. 08/028,784 (P07 31073) filed March 10, 1993
	
PSBC DOCKET NO.:	
 	

P07 32759

A-2

 

	TITLE:	 	Methods for Selectively Detecting Perinuclear Anti-Neutrophil Cytoplasmic Antibody of Ulcerative Colitis, Primary Sclerosing Cholangitis, or Type I Autoimmune Hepatitis
	
INVENTORS:	
 	

Stephan R. Targan, M.D.

Alda M. Vidrich, Ph.D.
	
APPLICATION NO.:	
 	

U.S. 08/480,753
	
FILING DATE:	
 	

June 7, 1995, U.S. Patent & Trademark Office
	
PRIORITY DATA:	
 	

Continuation-in-part of U.S. Application No. 08/320,163 (P07 32759) filed October 7, 1994, which is a continuation of now abandoned U.S. Application No. 08/028,784 (P07 31073) filed March 19, 1993.
	
PSBC DOCKET NO.:	
 	

P07 33571

A-3

 

	TITLE:	 	Methods for Selectively Detecting Perinuclear Anti-Neutrophil Cytoplasmic Antibody of Ulcerative Colitis, Primary Sclerosing Cholangitis, or Type I Autoimmune Hepatitis
	
INVENTORS:	
 	

Stephan R. Targan, M.D.

Alda M. Vidrich, Ph.D.
	
APPLICATION NO.:	
 	

PCT/US95/08758
	
FILING DATE:	
 	

June 5, 1996, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

June 7, 1995, U.S. Application No. 08/480,753 (P07 33571)
	
PSBC DOCKET NO.:	
 	

FP07 34632

A-4

 

	TITLE:	 	Methods of Determining the Risk of Pouchitis Development
	
INVENTORS:	
 	

Phillip Fleschner

Scott E. Plevy

Stephan R. Targan, M.D.
	
APPLICATION NO.:	
 	

U.S. 08/631,429
	
FILING DATE:	
 	

April 12, 1996, U.S. Patent and Trademark Office
	
PRIORITY DATA:	
 	

None Claimed
	
C&F DOCKET NO.:	
 	

P-PM 2060

A-5

 

	TITLE:	 	Methods of Identifying and Diagnosing Inflammatory Bowel Disease
	
INVENTORS:	
 	

Scott E. Plevy

Hui-Ying Yang

Stephan R. Targan

Jerome I. Rotter
	
APPLICATION NO.:	
 	

Not assigned yet
	
FILING DATE:	
 	

August 15, 1996, U.S. Patent and Trademark Office
	
PRIORITY DATA:	
 	

Continuation of U.S. Application No. 08/630,670 (P-PM 2062) filed April 12, 1996
	
C&F DOCKET NO.:	
 	

P-CE 2225

A-6

 

	TITLE:	 	Methods of Diagnosing a Clinical Subtype of Crohn's Disease with Features of Ulcerative Colitis
	
INVENTORS:	
 	

Stephan R. Targan

Eric A. Vasiliauskas

Scott E. Plevy

Huiying Yang

Jerome I. Rotter
	
APPLICATION NO.:	
 	

Not assigned yet
	
FILING DATE:	
 	

August 15, 1996, U.S. Patent and Trademark Office
	
PRIORITY DATA:	
 	

Continuation-in-part of U.S. Application No. 08/630,672 (P-PM 1997) filed April 12, 1996
	
C&F DOCKET NO.:	
 	

P-CE 2224

A-7

   Schedule B 

CSMC Technical Information  

        The
following additional information or material in the Field of Use which is embodied in the CSMC Patent Rights conceived or reduced to practice prior to the Effective Date in the
conduct of the inflammatory bowel disease programs at CSMC under the direction of Targan as the sole principal investigator: 

        [***]

	***
	Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the
omitted portions. 

B-1

   Schedule C 

UCLA PATENT RIGHTS  

	TITLE:	 	Novel Anti-VH3-15 Reagents and Methods for Their Use
	
INVENTOR:	
 	

Jonathan Braun, M.D., Ph.D.
	
APPLICATION NO.:	
 	

U.S. 08/309,025
	
FILING DATE:	
 	

September 19, 1994, U.S. Patent & Trademark Office
	
PRIORITY DATA:	
 	

None claimed
	
PSBC DOCKET NO.:	
 	

P07 32705

C-1

 

	TITLE:	 	Novel Anti-VH3-15 Reagents, VH3-15 Polypeptides, Cell Surface Antigens, and Methods for Their Detection and Use
	
INVENTOR:	
 	

Jonathan Braun, M.D., Ph.D.
	
APPLICATION NO.:	
 	

U.S. 08/320,200
	
FILING DATE:	
 	

October 7, 1994, U.S. Patent & Trademark Office
	
PRIORITY DATA:	
 	

Continuation-in-part of U.S. Application No. 08/309,025 (P07 32705) filed September 19, 1994
	
PSBC DOCKET NO.:	
 	

P07 32560

C-2

 

	TITLE:	 	Novel Anti-VH3-15 Reagents, VH3-15 Polypeptides, Cell Surface Antigens, and Methods for Their Detection and Use
	
INVENTOR:	
 	

Jonathan Braun, M.D., Ph.D.
	
APPLICATION NO.:	
 	

PCT/US95/11789
	
FILING DATE:	
 	

September 18, 1995, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

September 19, 1994, U.S. Application No. 08/309,025

(P07 32705) & October 7, 1994, U.S. Application No. 08/320,200 (P07 32560)
	
PSBC DOCKET NO.:	
 	

FP07 34025

C-3

 

	TITLE:	 	Diagnosis, Prevention and Treatment of a Clinical Subtype of Ulcerative Colitis Using Histone H1
	
INVENTOR:	
 	

Jonathan Braun, M.D., Ph.D.

Mark Eggena
	
APPLICATION NO.:	
 	

U.S. 08/630,671
	
FILING DATE:	
 	

April 12, 1996, U.S. Patent and Trademark Office
	
PRIORITY DATA:	
 	

None Claimed
	
C&F DOCKET NO.:	
 	

P-PM 1998

C-4

   Schedule D 

UCLA TECHNICAL INFORMATION

        The
following additional information or material in the Field of Use which is described in the UCLA Patent Rights conceived and reduced to practice prior to the Effective Date in the
conduct of the inflammatory bowel disease programs at UCLA under the direction of Braun as the principal investigator: 

        [***] 

	***
	Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the
omitted portions. 

D-1

   Schedule E 

JOINT PATENT RIGHTS  

	TITLE:	 	Methods of Screening for Ulcerative Colitis and Crohn's Disease by Detecting VH3-15 Autoantibody and pANCA
	
INVENTORS:	
 	

Jonathan Braun, M.D., Ph.D.

Stephan R. Targan, M.D.
	
APPLICATION NO.:	
 	

U.S. 08/320,515
	
FILING DATE:	
 	

October 7, 1994, U.S. Patent and Trademark Office
	
PRIORITY DATA:	
 	

None claimed
	
PSBC DOCKET NO.:	
 	

P07 32596

E-1

 

	TITLE:	 	Methods of Screening for Ulcerative Colitis and Crohn's Disease by Detecting VH3-15 Autoantibody and p-ANCA
	
INVENTORS:	
 	

Jonathan Braun, M.D., Ph.D.

Stephan Targan, M.D.
	
APPLICATION NO.:	
 	

PCT/US95/13422
	
FILING DATE:	
 	

October 5, 1995, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

October 7, 1994, U.S. Application No. 08/320,515 (P07 32596)
	
PSBC DOCKET NO.:	
 	

FP07 34037

E-2

 

	TITLE:	 	Anti-Neutrophil Cytoplasmic Antibody Material Associated with Ulcerative Colitis and Related Methods and Kits
	
INVENTORS:	
 	

Jonathan Braun, M.D., Ph.D.

Mark P. Eggena

Stephan R. Targan, M.D.
	
APPLICATION NO.:	
 	

U.S. 08/472,688
	
FILING DATE:	
 	

June 6, 1995, U.S. Patent and Trademark Office
	
PRIORITY DATA:	
 	

None claimed
	
PSBC DOCKET NO.:	
 	

P07 32595

E-3

 

	TITLE:	 	Anti-Neutrophil Cytoplasmic Antibody Material Associated with Ulcerative Colitis and Related Methods and Kits
	
INVENTORS:	
 	

Jonathan Braun, M.D., Ph.D.

Mark P. Eggena

Stephan R. Targan, M.D.
	
APPLICATION NO.:	
 	

PCT/US95/08756
	
FILING DATE:	
 	

June 5, 1996, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

June 6, 1995, U.S. Application No. 08/472,688 (P07 32595)
	
PSBC DOCKET NO.:	
 	

FP07 34631

E-4

   Schedule F 

Joint Technical Information

        The
following additional information or material in the Field of Use which is embodied in the Joint Patent Rights conceived or reduced to practice prior to the Effective Date in the
conduct of the inflammatory disease programs at CSMC and UCLA under the direction of Targan and Braun as the sole principal investigators at their respective institutions: 

	1.
	See
Schedule B hereto, as the same pertains to Joint Patent Rights.

	2.
	See
Schedule D hereto, as the same pertains to Joint Patent Rights. 

F-1

   Schedule G 

Field of Use  

        The field of use shall be the diagnosis and treatment of gastrointestinal and hepatic diseases. 

G-1

   Schedule H 

Approved Bio-pharmaceutical, Pharmaceutical and Bio-diagnostic Companies:  

[***] 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions. 

H-1

   Schedule I 

Milestones

	1.
	On
or before December 31, 1996, Prometheus shall introduce to the market its tests for AEA-15 or pANCA. Promotional activities will include, but not be limited to,
participation in the annual Gastroenterology meeting.

	2.
	Prometheus
shall submit for approval by the FDA assays for AEA-15 or pANCA prior to the end of calendar year 1998.

	3.
	Prometheus
shall identify certain epitopes and peptides for use as potential therapeutic candidates in Crohn's Disease and Ulcerative Colitis prior to the end of each of
calendar years 1999 and 2000 (one per year).

	4.
	Prometheus
or its sublicensees shall expend at least Two Hundred Fifty Thousand Dollars ($250,000) (in the aggregate) annually toward the development and promotion of Products based on
the Patent Rights, commencing from the Effective Date and continuing to the end of calendar quarter 2000. 

I-1

  

Schedule J 

ROYALTY PROVISIONS  

        All capitalized terms not otherwise defined in this Schedule J shall have the meanings ascribed to them in this Agreement. 

        1.    Royalties.    Prometheus shall pay, or cause to be paid, to CSMC and UCLA aggregate royalty fees (each, a
"Royalty" and collectively, "Royalties") equal to the following percentage of the amount of the Gross Sales Price (as defined in Section 6(a) below) received by Prometheus or its licensees from
the Sale (as defined in Section 6(b) below) of Royalty Bearing Products (as defined in Section 6(c) below) or Intellectual Property (as defined in Section 6(d) below) to
non-Affiliate parties. The Royalty shall be determined as follows: 

[***]
Percent ([***]%) of the Gross Sales Price for the Sale of Royalty Bearing Products or Intellectual Property until there has been a cumulative
total of $[***] of such Sales. 

[***]
Percent ([***]%) of the Gross Sales Price for the Sale of Royalty Bearing Products or Intellectual Property after there has been a cumulative
total of $[***] of such Sales until there has been a cumulative total of $[***] of such Sales. 

[***]
Percent ([***]%) of the Gross Sales Price for the Sale of Royalty Bearing Products or Intellectual Property after a cumulative total of
$[***] of such Sales. 

        2.    No Duplicative Royalties.    In those circumstances in which a Royalty is payable to CSMC and UCLA from the sale
of a Royalty Bearing Product by a licensee of Prometheus, and in which a royalty is also payable to Prometheus from the Sale of the same Royalty Bearing Product by the same licensee, then Prometheus
shall not be required to pay a Royalty to CSMC and UCLA with respect to the royalties so received by Prometheus on the same Royalty Bearing Product, if and to the extent the required royalty is
received by CSMC and UCLA from the licensee or sublicensee. This exclusion is intended to avoid the payment of duplicative royalties, shall be strictly construed, and shall not apply to other forms of
compensation paid to Prometheus by its licensees. 

        3.    Reduction in Royalty Rate.    In the event that no patent with respect to any Patent Rights issues within
[***] of the date of this Agreement, then the Royalty payable on the Sale of a Royalty Bearing Product shall be reduced to [***]
([***]%) of the amount of the Gross Sales Price received by Prometheus or its licensee therefore. This reduction shall apply prospectively only, and shall continue only until
such time, if ever, a patent covering any such Patent Right is issued. 

        4.    Payment and Accounting.    

        (a)   Payment Terms and Reports.    Royalties shall accrue and be payable on a quarterly basis within
forty-five (45) days following the end of each calendar quarter in which any Sale of Royalty Bearing Products occurs. Each payment of Royalties shall be accompanied by a statement
setting forth in reasonable detail (i) with respect to Sales of Royalty Bearing Products or Intellectual Property, the number and each type of Royalty Bearing Product sold and the Gross Sales
Price applicable thereto, (ii) with respect to Sales of Intellectual Property, the nature of the Sale and revenues applicable thereto, and (iii) such additional details as may be
reasonably requested by CSMC or UCLA for the determination of Royalties payable hereunder. Except as otherwise provided in Section 4(c), all Royalties shall be paid in United States dollars and
shall be made without set off (except as expressly provided in Section 5 below) and free and clear of (and 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

J-1

 

without
any deduction or withholding for) any taxes, duties, levies, imposts or similar fees or charges. 

        (b)   Records and Audits.    Prometheus shall create and maintain complete and accurate records and documentation
concerning all Sales of Royalty Bearing Products or Intellectual Property by Prometheus and its licensees in sufficient detail to enable the Royalties payable hereunder to be determined. Prometheus
shall retain such records and documentation for not less than seven (7) years from the date of their creation. During the term of this Agreement and for a period of three (3) years
thereafter, CSMC and UCLA and their representatives shall have the right to audit such records and documentation as shall pertain to the determination and payment of Royalties. Such examiners shall
have reasonable access to Prometheus' offices and the relevant records, files and books of account, and shall have the right to examine any other records reasonably necessary to determine the accuracy
of the calculations provided by Prometheus under this Schedule. The costs of any such audit shall be borne by CSMC and UCLA, unless as a result of such inspection it is determined that the amounts
payable by Prometheus for any period are in error by greater than [***] Percent ([***]%), in which case the costs of such audit shall be borne by
Prometheus. CSMC and UCLA shall report the results of any such audit to Prometheus within forty-five (45) days of completion. Thereafter, Prometheus shall promptly pay to CSMC and
UCLA the amount of any underpayment discovered in such audit, or CSMC and UCLA shall credit to Prometheus against future Royalty payments the amount of any overpayment discovered in such audit, as the
case may be. In addition, Prometheus shall pay interest on any underpayment at a rate that is the lower of (i) [***] Percent ([***]%) over the
rate of interest announced by Bank of America in Los Angeles, California (or any successor in interest thereto or any commercially equivalent financial institution if no such successor exists) to be
its "prime rate" or (ii) the highest rate permitted by applicable law, from the date such amount was underpaid to the date payment is actually received. 

        (c)   Currency Transfer Restrictions.    If any restrictions on the transfer of currency exist in any country or
other jurisdiction so as to prevent Prometheus from making payments to CSMC and UCLA in the United States, Prometheus shall take all reasonable steps to obtain a waiver of such restrictions or to
otherwise enable Prometheus to make such payments. If Prometheus is unable to do so, Prometheus shall make such payments to CSMC and UCLA in a bank account or other depository designated by CSMC and
UCLA in such country or jurisdiction, which payments shall be in the local currency of such country or jurisdiction, unless payment in United States dollars is permitted. Any payment by Prometheus to
CSMC and UCLA on the basis of Sales of Royalty Bearing Products or Intellectual Property in currencies other than United States dollars shall be calculated using the appropriate foreign
exchange rate for such currency quoted in The Wall Street Journal for the close of business of the last banking day of the calendar quarter in which
such payment is being made. 

        (d)   Late Charges.    A service charge of [***] Percent ([***]%) per
month, not to exceed the maximum rate allowed by applicable law, shall be payable by Prometheus on any portion of Prometheus' outstanding Royalty balance that is not paid to CSMC and UCLA within
thirty (30) days past the due date. 

        (e)   Taxes.    Prometheus shall pay, or cause to be paid, any and all taxes required to be paid or withheld on any
sales, licenses or other transfers for value for which the revenues of CSMC or UCLA; provided, however, that under no circumstances shall the amounts of such taxes be deducted from the total amount of
payments otherwise due to CSMC and UCLA hereunder. Upon CSMC's and UCLA's request, Prometheus shall secure and send to CSMC and UCLA proof of any such taxes withheld and paid by Prometheus or its
licensees. 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

J-2

 

        5.    Right of Offset.    In the event that Prometheus reasonably determines that any Royalty Bearing Product
infringes upon the rights of a third party and is obliged to obtain a license under such right, then, in lieu of any other right or remedy, Prometheus shall have the right to deduct from the Royalties
otherwise payable hereunder or the amount, up to a maximum of [***] Percent ([***]%) of the Royalties otherwise payable, that Prometheus is obliged to
pay under the license in order to obtain from the third party whose rights are so infringed the right to the Royalty Bearing Product. 

        6.    Certain Definitions.    

        (a)   "Gross
Sales Price" means the gross amount of all revenues (whether in the form of cash, property or otherwise) received by Prometheus or its licensees from the sale,
license or other transfer for value of Royalty Bearing Products or Intellectual Property less (but only to the extent separately itemized as a part of the gross price charged):
(i) transportation, handling, insurance and sales taxes, and (ii) rebates and other allowances actually paid or allowed and which are standard and customary in the industry; provided,
however, that no deduction shall be made for royalties, commissions, costs of collection or similar items payable with respect to the Royalty Bearing Products. For the purposes of the definition of
"Gross Sales Price", it is acknowledged and agreed by the parties that Sales to wholly owned subsidiaries of Prometheus shall not be included. 

        (b)   "Sales"
means the sale, license or other transfer for value. 

        (c)   "Royalty
Bearing Product" means (i) any Product that is covered by any of the Patent Rights or Future Patent Rights, or (ii) any Product that, although not
covered by a Patent Right or Future Patent Right, includes or embodies, as a part of such Product, Technical Information or Future Technical Information that is licensed to Prometheus hereunder and is
not part of the public domain. 

        (d)   "Intellectual
Property" means Patent Right, Future Patent Rights, Technical Information and Future Technical Information. 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

J-3

   Schedule K 

RESEARCH
AGREEMENT 

        This
Research Agreement ("Agreement") is entered into effective the              day of
                                    , 1995, by and between
Prometheus Laboratories, Inc., a California corporation ("Prometheus"), and Cedar-Sinai Medical Center, a California nonprofit public benefit corporation ("Medical Center"). 

RECITALS

        A.    Prometheus
desires to obtain clinical research assistance for he performance of clinical trials on various patient samples for Inflammatory Bowel Disease diagnosis using
p-ANCA and AEA-15 assays according to specific protocols ("Protocols") for research project ("Project"); and 

        B.    Medical
Center is willing to assist Prometheus by furnishing such personnel and facilities for studies for the Project. 

        NOW,
THEREFORE, in consideration of the mutual promises and covenants herein, the parties hereto agree as follows: 

	1.
	Research
Project. 

        (a)   The
Project, in general, involves the testing of patient serum samples using p-ANCA and AEA-15 assays. The Protocols for the Project are attached
to the Agreement as Attachment A. Prometheus shall reimburse the Medical Center for the cost of all requisite supplies for the Project such as reagents, controls and patient samples. 

        (b)   Dr. Stephan
Targan, as principle investigator ("Investigator"), shall have the sole responsibility for the scientific and technical conduct of the Project. Each
Protocol of the Project shall be subject to the receipt of all appropriate internal approvals of the Medical Center. 

        (c)   The
Project shall conduct within a one (1) year period which shall begin on the effective date noted above. This Agreement shall automatically expire at the end
of this period unless specifically extended upon mutual agreement of the parties. 

	2.
	Research
Grant. 

        (a)   Prometheus
shall pay the Medical Center a total of [***] Dollars ($[***]) ("Research Grant") to conduct the Project. The
Medical Center shall not be obligated to expend any more than funds provided by Prometheus. 

        (b)   Prometheus
shall pay the Research Grant in four (4) equal quarterly payments of [***] Dollars ($[***]) each
beginning of the effective date of this Agreement. Payments shall be sent to the Medical Center to the attention of the Assistant Director for Finance/Grant Accounting, Tax I.D.
No. 95-1644600. 

        (c)   If
a Protocol is delayed by no fault of the Medical Center or Investigator, by, for example, Prometheus's inability to provide the funding required for a Protocol,
Prometheus shall pay for any animals or other supplies purchased for the Protocol separate and apart from the Research Grant. Prometheus shall also be liable for a standby fee for any lab space
reserved for a Protocol if such space is not utilized as scheduled. 

***
Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

K-1

 
	3.
	Progress
Reports 

        (a)   The
Investigator, on behalf of the Medical Center, shall periodically, and not less frequently than once a month, during the term of this Agreement report in writing to
Prometheus on the progress of the Project and the results being obtained and shall make available to Prometheus all information relative thereto. No fiscal reports will be required for either the
Medical Center of the Investigator. 

        (b)   Prometheus
shall have the right to have representatives periodically visit the applicable lab space where the Project is being conducted to observe the Protocols in
progress. All such visits shall be coordinated through the Investigator and the office of the Senior Vice President for Academic Affairs (or his designee) at the Medical Center. 

4.    Independent
Contractors.    It is understood that in the performance of this Agreement the Medical Center and the Investigator are acting solely
as independent contractors and not as employees of Prometheus. Further, nothing in the Agreement shall be constructed or applied to create a relationship of partners, agency, joint venture or of the
employer and employee. 

5.    Use
of Name.    Prometheus shall not refer to this Agreement of to the Medical Center's or Investigator's participation or use the Medical
Center's or Investigator's names in any advertising or promotional materials or statement to the public without the prior written approval of the Medical Center and Investigator, respectively.
However, Prometheus shall have the right to refer to this Agreement as appropriate in the conduct of this business and in any filings required with any government agency or as otherwise required by
law. The Medical Center may not refer to this Agreement or its terms to the public without the prior written approval of Prometheus. 

6.    Publication.    The
Medical Center, Investigator and the other individuals involved with the Project will be free to publish the results of any
research conducted under this Agreement after providing a copy of the publication to Prometheus. Where title is not retained by the publisher, title to and the right to determine disposition of any
copyrightable material, first produced or composed in the performance of this research shall remain with the Medical Center provided that the Medical Center shall grant to Prometheus an irrevocable,
royalty-free, non-exclusive right to reproduce, translate, and use any such copyrighted material for its own internal purposes. Any publication or disclosure by the Medical
Center or Investigator shall give appropriate credit to Prometheus and the Medical Center. 

7.    Patents
and Intellectual Property Rights.    The parties agree as follows with respect to any patents, inventions, intellectual property and
other proprietary information ("Intellectual Property") developed by the Medical Center alone or in collaboration with Prometheus with respect to the Project under this Agreement between the parties
dated                                     . 

8.    Key
Personnel.    Dr. Stephan Targan is designated as a "Key Person" for this Project. In the event the services of named Key Person are
lost to the Project for any reason, the Medical Center shall notify Prometheus in writing, and may propose substitute personnel to Prometheus. Prometheus's approval of the substitute personnel shall
not be withheld unreasonably. 

9.    Changes
in Agreement.    Any agreement changing the terms of this Agreement in any way shall be valid only in the change is made in writing and
approved by authorized representatives of the Medical Center and Prometheus. The Investigator is not a party to and in not authorized to alter or amend the Agreement, except that his or her written
concurrence shall be required to alter or amend the statement of work referred to in the Project. 

10.    Assignment
and Changes of Ownership or Control.    Neither party may assign of transfer and of its rights or responsibilities under this
Agreement without prior written consent of the other party. This Agreement is personal to the particular parties and would not have been entered into except for the participation of the principles of
each party in the Agreement. In the event of any change of ownership 

K-2

 

or
control of a party from the original individuals owning and/or controlling the particular party, the other party shall have the right to terminate the Agreement upon written notice to the other
party. 

11.    Compliance
with Law.    The parties agree to comply with all the applicable federal, state and local laws, regulations, ordinances and orders
with respect to the performance of the Project and this Agreement. 

12.    Governing
Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of California. 

13.    Notices.    Whenever
notices are required or permitted hereunder, they shall be given by registered or certified mail, return receipt requested,
and postage pre-paid, or telefaxed and addressed as follows: 

	If to Medical Center:	 	Cedar-Sinai Medical Center

8700 Beverly Boulevard

Los Angeles, California 90048-1865

Attention: Senior Vice President for Academic Affairs
	

with a copy to Principle Investigator.
	

If to Prometheus:	
 	

Prometheus Laboratories, Inc.

8110 La Jolla Shores Drive, Suite 101-B

La Jolla, California 92037

Attention: Chief Executive Officer

or
to such other address as either of the respective parties may from time to time specify in writing by notice given to the other party in the manner herein provided. Service of any such notice shall
be deemed complete as of the day of actual delivery as shown by the addressee's registry or certification receipt of the expiration of the third day after the date of mailing, whichever occurs first. 

        IN
WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date first written above. 

	PROMETHEUS LABORATORIES, INC	 	CEDARS-SINAI MEDICAL CENTER
	

By:	

    
 Scott L. Glenn

President & CEO	
 	

By:	

    
 James R. Klinenberg, M.D.

Senior Vice President for

Academic Affairs
	

 	

 	
 	

By:	

    
 Daniel M. Oshiro

Administrator

Academic Affairs/Research Institute
	ACKNOWLEDGED AND AGREED:	 	 	 
	

INVESTIGATOR:	
 	

 	

 
	    
 Stephan Targan, M.D.	 	 	 

K-3

 
ATTACHMENT
A

PROTOCOLS 

	1.
	Clinical
Testing of Patient Serum Samples for pANCA and AEA-15. 

        Introduction.
AEA-15 and pANCA are autoantibodies that have been proposed to be useful in diagnosis of ulcerative colitis and Crohn's
Disease, respectively. AEA-15 is an autoantibody against a protein component of the neutrophil nucleus. It is proposed that the use of the
combination of these assays in a "panel" should allow the diagnosis of ulcerative colitis of Crohn's Disease. 

        Research.
3,000 serum samples will be tested in a blinded fashion using appropriate assay systems for the individual autoantibodies. Included in these sera
will be patients with known Crohn's disease and ulcerative colitis. In addition, patients with infective colitis, patients with chronic diarrhea, patients with rectal bleeding, patients with
abdominal pain not related to Crohn's Disease or ulcerative colitis, and a healthy control of patients who have no known symptoms or diseases will be included. Sera will be coded by and
independent observer. The individual running the assays will be totally blinded to the origin of the serum samples. Sera will be batched every 100 samples and combine assays will be run in batch.
Following the determinations of the presence of AEA-15 or pANCA, the code will be broken by an independent observer and matched to the given patient. The accrual of the information will be
unknown to the individual who will continue to run the assays. 

        Anticipated
Results. Results from these clinical studies would be able to determine the sensitivity and specificity of each of these individual tests, as
well as the panel to diagnose inflammatory bowel disease, and to differentiate between ulcerative colitis and Crohn's Disease. In addition, because of the breadth of sera obtained, it should
define at what time during the clinical presentation of these diseases, i.e. at the time of the presentation, or the duration of the disease activity required in
order for these tests to be useful. 

K-4

  

Schedule L 

 
  Capitalization of Prometheus  
    

 
  PROMETHEUS LABORATORIES, INC.
  CAPITALIZATION TABLE (JULY 1, 1996)    
    

PREFERRED STOCK  

	NAME
 
	 	SHARES
	 	% PREFERRED
	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	[***]	 	[***]	 	[***]	 
	Total	 	520,000	 	45.6	%

Common Shares  

	Name
 
	 	Shares
	 	% Common
	 
	Dr. Stephan Targan	 	200,000	 	33.3	%
	[***]	 	[***]	 	33.3	%
	[***]	 	[***]	 	33.3	%
	Total	 	600,000	 	100.0	%
	
Stock Options Purchased under 83(b) with 4 year vesting.	
 	

 	
 	

 	
 
	[***]	 	[***]	 	 	 
	[***]	 	[***]	 	 	 
	[***]	 	[***]	 	 	 
	[***]	 	[***]	 	 	 
	Total Outstanding	 	75,000	 	 	 
	 	Total Approved for issuance	 	150,000	 	 	 

***
Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

L-1

QuickLinks

Exhibit 10.21

Capitalization of Prometheus

PROMETHEUS LABORATORIES, INC. CAPITALIZATION TABLE (JULY 1, 1996)QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.22    
    

CERTAIN
MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. 

 
 

Exclusive License Agreement
  Between
  The Regents of the University of California and Prometheus Laboratories, Inc.    
    

        This license agreement ("Agreement") is effective this 1st day of December, 1999 (the "Effective Date"), by and between The Regents of the University of
California ("The Regents"), a California corporation, having its statewide administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200, acting through
the offices of The University of California, Los Angeles located at 405 Hilgard Avenue, Los Angeles, California 90095-1406 and Prometheus Laboratories, Inc. ("Prometheus"), a
California corporation, having a principal place of business at 5739 Pacific Center Boulevard, San Diego, California 92121. 

Recitals  

        Whereas, certain inventions (the "UCLA Inventions"), useful for diagnostic testing, disease management and isolation of therapeutic targets and candidates were
made in the course of inflammatory bowel research (the "UCLA Research") at the University of California, Los Angeles ("UCLA") by Dr. Jonathan Braun ("Dr. Braun") et al. and are claimed
in the Patent Rights defined below; and 

        Whereas,
certain other inventions (the "Joint Inventions"), also useful for diagnostic testing, disease management and isolation of therapeutic targets and candidates were made jointly
by (i) Dr. Braun et al. in the course of the UCLA Research and (ii) Dr. Stephen Targan et al. in the course of similar research at Cedars-Sinai Medical Center ("CSMC") and
are also claimed in the Patent Rights defined below; and 

        Whereas,
in this Agreement the UCLA Inventions and the Joint Inventions shall be collectively referred to as the "Invention"; and 

        Whereas,
concurrently with the execution of this Agreement, Prometheus is entering into an agreement or amendment with CSMC for the license from CSMC of CSMC's interest in the Joint
Inventions; 

        Whereas,
Prometheus entered into a Secrecy Agreement ("Secrecy Agreement"), having U.C. Agreement Control No. LA99-058-01, effective March 19, 1999 that
allowed Prometheus to evaluate its interest in taking a license to the Invention; Whereas, the Invention was made in work done in conjunction with Prometheus and funding provided by the NIH; and 

        Whereas,
under 35 USC 200-212, The Regents may elect to retain title to any invention (including the Invention) made by it under U.S. Government funding; Whereas, if The
Regents elects to retain title to the Invention, then the law requires that The Regents grant to the U.S. Government a nontransferable, paid-up, nonexclusive, irrevocable license to use
the Invention by or on behalf of the U.S. Government throughout the world for the purposes set forth in said law; 

        Whereas,
The Regents elected to retain title to the Invention and granted the required licenses to the U.S. Government; 

        Whereas,
Dr. Braun is an employee of UCLA; 

        Whereas,
Prometheus is a "small entity" as defined in 37 CFR §1.9 and a "small-business concern" defined in 15 U.S.C. §632; 

 

        Whereas,
both parties recognize that royalties due under this Agreement will be paid on pending patent applications and issued patents; 

        Whereas,
Prometheus requested a license of certain rights from The Regents to commercialize the Invention; and 

        Whereas,
The Regents responded to the request of Prometheus by granting the following rights to Prometheus so that the products and other benefits derived from the Invention can be
enjoyed by the general public. 

        The
parties agree as follows: 

1.    Definitions  

        As used in this Agreement, the following terms will have the meaning set forth below: 

        1.1   "Patent Rights" means the Regents' interest in all U.S. patents and patent applications and foreign patents and patent
applications assigned to The Regents, including any reissues, extensions, substitutions, continuations, and divisions, and continuations-in-part applications (only to the
extent, however, that claims in the continuation-in-part applications are enabled and specifically described in the specification of the parent patent application) based on and
including any subject matter claimed in or covered by the U.S. patent applications set forth on Exhibit A hereto. 

        1.2   "Patent Product(s)" means: 

	i.
	any
kit, composition of matter, material, or product;

	ii
	any
kit, composition of matter, material, or product to be used in a manner requiring the performance of the Patent Method; or

	iii
	any
kit, composition of matter, material, or product produced by the Patent Method; 

to
the extent that the manufacture, use, or sale of such kit, composition of matter, material, or product, in a particular country, would be covered by or infringe, but for the licenses granted to
Prometheus pursuant to this Agreement and pursuant to the 1996 License Agreement, an unexpired claim of a patent or pending claim of a patent application were it issued as a claim in a patent under
Patent Rights in that country in which such patent has issued or application is pending. This definition of Patent Products also includes a service either used by Prometheus or provided by Prometheus
to its customers when such service requires the practice of the Patent Method. 

        1.3   "Patent Method" means any process or method covered by the claims of a patent application or patent within Patent Rights
or the use or practice of which would constitute in a particular country, but for the license granted to Prometheus pursuant to this Agreement and pursuant to the CSMC License Agreement, an
infringement of an unexpired claim of a patent or pending claim of a patent application were it issued as a claim in a patent within Patent Rights in that country in which the Patent Method is used or
practiced. 

        1.4   "Net Sales" means the amount collected from the sale of Patent Products by Prometheus, an Affiliate, a Joint Venture, or
a sublicensee to independent third parties for cash or other forms of consideration in accordance with generally accepted accounting principles limited to the following deductions (if not already
deducted from the gross invoice price and at rates customary within the industry): (a) allowances (actually paid and limited to rejections, returns, and prompt payment and volume discounts
granted to customers of Patent Products, whether in cash or Patent Products in lieu of cash); (b) freight, transport packing, insurance charges associated with transportation; and
(c) taxes, tariff, or import/export duties based on sales when included in gross sales, but not value-added taxes or taxes assessed on income derived from such sales. Where Prometheus
distributes Patent Products for end use to itself, an Affiliate, a Joint Venture, or a sublicensee, then such distribution will be considered a sale at the price normally charged to independent third
parties, and The Regents will be entitled to collect a royalty on such sale in accordance with Article 3. (Royalties). 

2

 

        1.5   "Affiliate(s)" of Prometheus means any entity which, directly or indirectly, controls Prometheus, is controlled by
Prometheus, or is under common control with Prometheus ("control" for these purposes being defined as the actual, present capacity to elect a majority of the directors of such affiliate, or if not,
the power to direct at least forty percent (40%) of the voting rights entitled to elect directors) provided, however, that in any country where the local law will not permit foreign equity
participation of a majority, then an "Affiliate" will include any company in which Prometheus owns or controls, directly or indirectly, the maximum percentage of such outstanding stock or voting
rights permitted by local law. Each reference to Prometheus herein will be meant to include its Affiliates. 

        1.6   "Joint Venture" means any separate entity established pursuant to an agreement between a third party and Prometheus to
constitute a vehicle for a joint venture, in which the separate entity manufactures, uses, purchases, sells, or acquires Patent Products from Prometheus. Each reference to Prometheus herein will be
meant to include its Joint Venture(s). 

        1.7   "Field of Use" means all diagnostic uses. 

        1.8   "Invention" has the meaning as defined in Recitals Paragraph 3. 

        1.9   "Joint Inventions" has the meaning as defined in Recitals Paragraph 2. 

        1.10 "UCLA Inventions" has the meaning as defined in Recitals Paragraph 1. 

        1.11 "Territory" shall mean the World. 

        1.12 "Funding Agencies" shall mean any public or private granting agencies which have provided funding to The Regents or any
of its investigators for the development of any of the Patent Rights prior to the Effective Date. 

        1.13 "1996 License Agreement" shall mean, collectively, (i) the Exclusive License Agreement dated August 14,
1996 between The Regents, Cedars-Sinai Medical Center and Prometheus; and (ii) the Partial Assignment and Consent dated December 16, 1996 pursuant to which Prometheus assigned to
Santarus certain rights relating to human therapeutic products. 

        1.14 "Combination Product" shall mean any product which is a Patent Product and which also contains other product(s) or
component(s) ("Other Product"), which Other Product (i) is not a Patent Product; (ii) the sale, use or import of which, by itself, does not contribute to the infringement of the Patent
Rights; (iii) can be sold separately by Licensee; and (iv) enhances the market price of the final Patent Product(s) sold, used or imported by Licensee. 

2.    Grant  

        2.1    License.    Subject to the limitations set forth in this Agreement and subject to the
licenses granted to the U.S. Government as set forth in the Recitals above, The Regents hereby grants to Prometheus an exclusive license under the Patent Rights, in the Territory, in the Field of Use,
to conduct research in the Field of Use using the Patent Rights and to make, have made, use, sell, have sold, offer for sale, and import Patent Products and to practice the Patent Method The license
is exclusive for the life of the Patent Rights. 

        2.2    U.S. Government Rights.    The licenses granted hereunder will be subject to the
overriding obligations to the U.S. Government including those set forth in 35 U.S.C. 200-212 and applicable governmental implementing regulations. 

        2.3    Government Regulations.    The manufacture of Patent Products and the practice of the
Patent Method will be subject to applicable government importation laws and regulations of a particular country on Patent Products made outside the particular country in which such Patent Products are
used or sold. 

3

 

        2.4    Sublicense Right.    The Regents also grants to Prometheus the right to issue
sublicenses to third parties to conduct research in the Field of Use using the Patent Rights and to make, have made, use, sell, have sold, offer for sale, and import Patent Products and to practice
the Patent Method, provided Prometheus retains current exclusive rights thereto under this Agreement. To the extent applicable, such sublicenses will include all of the rights of and obligations due
to The Regents (and, if applicable, the United States Government) that are contained in this Agreement including payment of royalties at the rates provided for in Article 3 (Royalties). 

        2.5    Sublicense Obligations.    Prometheus will notify The Regents of each sublicense
granted hereunder and provide The Regents with a copy of each sublicense and royalty report upon request. Prometheus will collect and pay all fees and royalties due The Regents as set forth in
Paragraph 3.1 below (and guarantee all such payments due) from the sublicensees. Prometheus will require the sublicensees to provide it with royalty reports in accordance with the provisions
herein. 

        2.6    Effect of Termination on Sublicenses.    Upon termination of this Agreement for any
reason, such The Regents, at its sole discretion, will determine whether any or all sublicenses will be canceled or assigned to The Regents. 

        2.7    Publication; Use of Technical Data.    Nothing in this Agreement will be deemed to
limit the right of The Regents to publish any and all technical data resulting from any research performed by The Regents relating to the Invention and to make and use the Invention, Patent
Product(s), Patent Method(s), and
associated technology solely for educational and research purposes and for purposes not covered by this Agreement. 

        2.8    Other Agreements.    The parties acknowledge and agree that, concurrently with the
execution of this Agreement, the parties are also entering into the following agreements: (i) a license agreement between The Regents and Santarus, Inc. ("Santarus") for the license of
the Inventions in the therapeutic field of use (the "Santarus License Agreement"); and (ii) an amendment to the 1996 License Agreement to include the license from CSMC to Prometheus (in the
diagnostic field of use) and to Santarus (in the therapeutic filed of use) of CSMC's interest in the Joint Inventions. 

3.    Royalties  

        3.1    Earned Royalty.    As further consideration for all the rights and licenses granted to
Prometheus, Prometheus and its sublicensees will pay to The Regents an earned royalty at the following rates: 

	(i)
	[***] percent
([***]%) based on the Net Sales of Patent Products manufactured or sold in countries where there are pending
patent applications or existing patents within the Patent Rights; and

	(ii)
	[***] percent
([***]%) based on the Net Sales of Patent Products not or sold in countries where there are pending patent
applications or existing patents within the Patent Rights. 

        3.2    Accrual of Earned Royalties.    Paragraphs 1.1,1.2, and 1.3 define Patent
Rights, Patent Products, and Patent Method, so that royalties will be payable on Patent Products and Patent Method covered by both pending patent applications and issued patents. Earned royalties will
accrue in each country for the duration of Patent Rights in that country and will be payable to The Regents when Patent Products are invoiced, or if not invoiced, when delivered to a third party or to
itself, an Affiliate, Joint Venture, or the sublicensee in the case where such delivery of the Patent Products to Prometheus, an Affiliate, Joint Venture, or the sublicensee is intended for end use or
sold for some financial return. By way of example and not limitation, earned royalties will not accrue on the delivery of sales samples or units used for clinical trials. 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions. 

4

 

        3.3    Right of Offset.    In the event that Prometheus reasonably determines that any Patent
Product infringes upon the patent rights of a third party and is obliged to obtain a license under such right, then, in lieu of any other right or remedy, Prometheus shall have the right to deduct (at
a rate of [***] percent ([***]%) for every one percent royalty rate of such third party license) from the royalties otherwise due and payable
hereunder or the amount, up to a maximum of [***] percent ([***]%) of the royalties otherwise payable, that Prometheus is obliged to pay under
the license in order to obtain from the third party whose rights are so infringed the right to the Patent Product. 

        3.4    Combination Products.    In the event that a Patent Product is also a Combination
Product, then the Net Sales on which earned royalties are payable by the Licensee shall be calculated as hereinafter set forth. The Net Sales on which an earned royalty is payable for the sale of a
Combination Product shall be the portion of the total sales price of the Combination Product equal to the fair market value of the Patent Product (on which Net Sales Licensee shall pay the royalty
rate set forth herein) as compared to the fair market value of all products and components of the Combination Product (i.e., the sales price of the Combination Product). The values described
above shall be determined by the parties hereto in good faith negotiations, based upon the then available facts and circumstances, particularly, for example, data as to the sale price of the distinct
components when sold separately, or the increased sales price of a Combination Product when it has the particular component, as distinguished from the sales price of the same or similar product when
it does not have the particular component. 

        3.5    Timing of Payment.    Royalties accruing to The Regents will be paid to The Regents
quarterly on or before the following dates of each calendar year: 

	•
	March 31
for the calendar quarter ending December 31;

	•
	June 30
for the calendar quarter ending March 31;

	•
	September 30
for the calendar quarter ending June 30; and

	•
	December 31
for the calendar quarter ending September 30. 

        3.6    Amount of Payment.    Each such payment will be for royalties which accrue up to the
most recently completed calendar quarter of Prometheus. 

        3.7    1996 License Agreement; Multiple Patents.    

	(a)
	Pursuant
to the 1996 License Agreement between Prometheus, The Regents and CSMC, Prometheus was obligated to pay certain royalties jointly to The Regents and CSMC for products
produced using the patent rights licensed under the 1996 License Agreement (the "Original Patent Rights"). The parties acknowledge that the 1996 License Agreement will continue to cover the payment of
royalties under the Original Patent Rights to both The Regents and CSMC.

	(b)
	The
purpose of this Agreement, currently being entered into between The Regents and Prometheus, is to cover the license of additional patent rights, herein referred to as the Patent
Rights, to Prometheus by The Regents. Therefore, (i) this Agreement covers the payment of royalties under the Patent Rights to only The Regents for the Inventions (including UCLA Inventions
which are solely owned by The Regents and Inventions which are Joint Inventions which are jointly owned by The Regents and CSMC); and (ii) the 1996 License Agreement will be amended to provide
that the 1996 License Agreement covers the payment of royalties under the Patent Rights to CSMC for the Inventions (including Inventions which are Joint Inventions which are jointly owned by The
Regents and CSMC). 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions. 

5

 

	(c)
	For
the avoidance of doubt, the parties hereby agree that, notwithstanding how many patents or patent applications under the Original Patent Rights or the current Patent Rights being
licensed under this Agreement are utilized for a single Patent Product, only one royalty will be earned on the sale of that Patent Product (i.e., the maximum basic rate to be applied would be
[***]%.) The parties also agree that if the Patent Rights utilized for a Patent Product cover a Joint Invention, and/or if both Original Patent Rights and current Patent Rights
are utilized in a Patent Product, and Prometheus is obligated to pay royalties to under the 1996 License Agreement in addition to the royalties due The Regents hereunder, then (i) the total
combined royalty payable by Prometheus to both The Regents and CSMC (under both this Agreement and the 1996 License Agreement) may not exceed [***]% of Net Sales of the Patent
Product; and (ii) Prometheus will pay (a) [***]% of the total earned royalty (under both this Agreement and the 1996 License Agreement) on a Patent Product which
is a Joint Invention to The Regents and (b) [***]% of the total earned royalty (under both this Agreement and the 1996 License Agreement) on a Patent Product which is a
Joint Invention to CSMC. 

        3.8    Currency.    All monies due The Regents will be payable in United States funds
collectible at par in San Francisco, California. When Patent Products are sold for monies other than United States dollars, the earned royalties will first be determined in the foreign currency of the
country in which such Patent Products were sold and then converted into equivalent United States funds. The exchange rate will be that rate quoted in the Wall Street Journal on the last business day
of the reporting period. 

        3.9    Taxes.    Earned royalties on Net Sales of Patent Products occurring in any country
outside the United States will not be reduced by any taxes, fees, or other charges imposed by the government of such country except those taxes, fees, and charges allowed under the provisions of
Paragraph 1.4 (Net Sales). The Regents and Prometheus shall each be responsible for its own bank transfer charges. 

        3.10    Invalidity of Patents.    In the event that any patent or any claim thereof included
within the Patent Rights is held invalid in a final decision by a court of competent jurisdiction, unappealable or unappealed, and it is commercially unfeasible to appeal, all obligation to pay
royalties based on such patent or claim or any claim patentably indistinct therefrom will cease as of the date of such final decision. Prometheus will not, however, be relieved from paying any
royalties that accrued before such decision or that are based on another patent or claim that has not expired or that is not involved in such decision. 

        3.11    Sales to U.S. Government.    No royalties will be collected or paid hereunder to The
Regents on Patent Products sold to the account of the U.S. Government. Prometheus and its sublicensees will reduce the amount charged for Patent Products distributed to the United States Government by
an amount equal to the royalty for such Patent Products otherwise due The Regents as provided herein. 

        3.12    No Duplicative Royalties.    In those circumstances in which a royalty is payable to
The Regents from the sale of a Patent Product by a licensee of Prometheus, and in which a royalty is also payable to Prometheus from the sale of the same Patent Product by the same licensee, then
Prometheus shall not be required to pay a royalty to The Regents with respect to the royalties so received by Prometheus on the same Patent Product, if and to the extent the required royalty is
received by The Regents from the licensee. This exclusion is intended to avoid the payment of duplicative royalties, shall be strictly construed, and shall not apply to other forms of compensation
paid to Prometheus by its licensees. 

        3.13    Reduction in Royalty Rate.    In the event that no patent with respect to any Patent
Rights issues within [***] years of the Effective Date, then the royalty payable on the sale of a Patent Product shall be reduced to [***]% of the
amount of the Net Sales Price received by Prometheus or its licensee therefore. This reduction shall apply prospectively only, and shall continue only until such time, if ever, a patent covering such
Patent Right is issued. 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions. 

6

 
4.    Due Diligence  

        4.1    Commercially Reasonable Efforts.    Prometheus, upon execution of this Agreement, will
use commercially reasonable efforts to develop, manufacture, market and sell Patent Products in commercially reasonable quantities sufficient to meet the market demands therefor. 

        4.2    Business Judgment.    Prometheus will be entitled to exercise prudent and reasonable
business judgment in the manner in which it meets its due diligence obligations hereunder. In no case, however, will Prometheus be relieved of its obligations to meet the due diligence provisions of
this Article 4 (Due Diligence). 

        4.3    Government Approvals.    Prometheus will obtain all necessary governmental approvals in
each country it chooses to manufacture, use, or sell Patent Products. 

        4.4    Diligence Milestones.    If Prometheus is unable to fill the market demand for Patent
Products following commencement of marketing at any time during the exclusive period of this Agreement; then The Regents will have the right and option to terminate this Agreement or reduce the
exclusive licenses granted to Prometheus to non-exclusive licenses in accordance with Paragraph 4.6 hereof. The exercise of this right and option by The Regents supersedes the
rights granted in Article 2 (Grant). If additional patents are added to the Patent Rights, appropriate diligence milestones for the Inventions covered by such patents will be mutually agreed to
by the parties and added to this Section. 

        4.5    Development Expenditures.    In addition to the obligations set forth above, Prometheus
will spend an aggregate of not less than $[***] for the development and marketing of Patent Products during the first 5 years of this Agreement. 

        4.6    Exercise of Rights.    To exercise either the right to terminate this Agreement or
reduce the exclusive licenses granted to Prometheus to non-exclusive licenses for lack of diligence required in this Article 4 (Due Diligence), The Regents will give Prometheus
written notice of the deficiency. Prometheus thereafter has 120 days to cure the deficiency and provide The Regents with written notice of such cure. If Prometheus has not cured the deficiency
within the 120-day period and has not provided written tangible evidence to The Regents thereof, then The Regents may, at its option, terminate this Agreement or reduce the exclusive
licenses granted to Prometheus to non-exclusive licenses by giving written notice to Prometheus. These notices will be subject to Article 15 (Notices). 

5.    Progress and Royalty Reports  

        5.1    Royalty Reports.    Commencing ninety (90) days after the first commercial sale
of a Patent Product, Prometheus will provide The Regents with quarterly royalty reports to The Regents on or before each February 28, May 31, August 31, and November 30 of
each year. Each such royalty report will cover the most recently completed calendar quarter of Prometheus (October through December, January through March, April through June, and July through
September) and will show: 

	5.1a
	the
gross sales and Net Sales of Patent Products sold by Prometheus and reported to Prometheus as sold by its sublicensees during the most recently completed calendar quarter;

	5.1b
	the
number of Patent Products sold or distributed by Prometheus and reported to Prometheus as sold or distributed by its sublicensees;

	5.1c
	the
royalties, in U.S. dollars, payable hereunder with respect to Net Sales; and

	5.1d
	the
exchange rates used, if any. 

        5.2    No Sales.    If no sales of Patent Products have been made during any reporting period
after the first commercial sale of a Patent Product, then a statement to this effect is required. 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions. 

7

 
6.    Books and Records  

        6.1    Prometheus' Obligation.    Prometheus will keep books and records accurately showing
all Patent Products manufactured, used, and/or sold under the terms of this Agreement. Such books and records will be preserved for at least five years after the date of the royalty payment to which
they pertain and will be open to inspection by representatives or agents of The Regents at reasonable times to determine the accuracy of the books and records and to determine compliance by Prometheus
with the terms of this Agreement. 

        6.2    Audit Expenses.    The fees and expenses of representatives of The Regents performing
such an examination will be borne by The Regents. However, if an error in royalties of more than [***] Dollars ($[***]) for any year is discovered, then
the fees and expenses of these representatives will be borne by Prometheus. 

7.    Life of the Agreement  

        7.1    Term.    Unless otherwise terminated by operation of law or by acts of the parties in
accordance with the terms of this Agreement, this Agreement will be in force from the Effective Date recited on page one and shall expire on a country-by-country basis, on the
date upon which the last to expire of the patents covering the Patent Rights shall expire, or until the last patent application licensed under this Agreement is abandoned. 

        7.2    Survival.    Any termination of this Agreement will not affect the rights and
obligations set forth in the following Articles: 

	Article 6	 	Books and Records
	Article 10	 	Disposition of Patent Products on Hand Upon Termination
	Article 11	 	Use of Names and Trademarks
	Article 12	 	Limited Warranty
	Article 14	 	Indemnification
	Article 19	 	Failure to Perform
	Article 24	 	Confidentiality

        7.3    Effect of Termination.    Any termination of this Agreement shall not relieve
Prometheus of its obligation to pay any monies due or owing at the time of such termination and shall not relieve any obligations, of either party to the other party, established prior to termination. 

8.    Termination for Cause  

	(a)
	By
The Regents. If Prometheus should violate or fail to perform any term or covenant of this Agreement, then The Regents may give written notice of such default ("Notice of Default")
to Prometheus. If Prometheus should fail to repair such default within 90 days after the date of such notice takes effect, The Regents will have the right to terminate this Agreement and the
licenses herein by a second written notice ("Notice of Termination") to Prometheus. If a Notice of Termination is sent to Prometheus, this Agreement will automatically terminate on the date such
notice takes effect. Such termination will not relieve Prometheus of its obligation to pay any royalty or license fees owing at the time of such termination and will not impair any accrued right of
The Regents. These notices will be subject to Article 15 (Notices). 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions. 

8

 

	(b)
	By
Prometheus. If The Regents should violate or fail to perform any term or covenant of this Agreement, then Prometheus may give written notice of such default ("Notice of Default")
to The Regents. If The Regents should fail to repair such default within 90 days after the date such notice takes effect, Prometheus will have the right to terminate this Agreement and the
licenses herein by a second written notice ("Notice of Termination") to The Regents. If a Notice of Termination is sent to The Regents, this Agreement will automatically terminate on the date such
notice takes effect. Such termination will not impair any accrued right of Prometheus. These notices will be subject to Article 15 (Notices).

	(c)
	Right
to Institute Legal Actions. Notwithstanding the termination provisions of this Paragraph 8, The Regents and Prometheus may institute any other legal action or pursue any
other remedy against the other party permitted by applicable law if the other party does not substantially cure any breach or default of any material obligation as provided herein. 

9.    Discretionary Termination by Prometheus  

        9.1    Scope of Right.    Prometheus will have the right at any time to terminate this
Agreement in whole or as to any portion of Patent Rights by giving notice in writing to The Regents. Such Notice of Termination will be subject to Article 15 (Notices) and termination of this
Agreement will be effective 90 days after the effective date thereof. 

        9.2    Effect of Termination.    Any termination pursuant to the above paragraph will not
relieve Prometheus of any obligation or liability accrued hereunder prior to such termination or rescind anything done by Prometheus or any payments made to The Regents hereunder prior to the time
such termination becomes effective, and such termination will not affect in any manner any rights of The Regents arising under this Agreement prior to such termination. Such termination will not
relieve Prometheus of its obligation to pay any fees or royalties owing at the time of such termination and will not impair any accrued right of The Regents. 

10.    Disposition of Patent Products on Hand Upon Termination  

        10.1 Upon
termination of this Agreement, Prometheus will have the privilege of selling of all previously made or partially made Patent Products, but no more, within a period
of six (6) months following the effective date of termination, provided, however, that the sale of such Patent Products will be subject to the terms of this Agreement including, but not limited
to the payment of royalties based on the Net Sales of Patent Products at the rates and at the times provided herein and the rendering of reports in connection therewith. 

11.    Use of Names and Trademarks  

        11.1    No Right to Use Name.    Nothing contained in this Agreement will be construed as
conferring any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of either party hereto by the other (including contraction,
abbreviation or simulation of any of the foregoing). Unless required by law or consented to in writing by The Regents, the use by Prometheus of the name "The Regents of the University of California"
or the name of any campus of the University of California for use in advertising, publicity, or other promotional activities is
expressly prohibited. Notwithstanding the foregoing, Prometheus may disclose and report that Prometheus has entered into this Agreement with The Regents after receiving prior approval from The Regents
of the text of the disclosure, which approval will not be unreasonably withheld. 

9

  

        11.2    Terms of Agreement.    It is understood that The Regents will be free to release to
the inventors and senior administrative officials employed by The Regents the terms of this Agreement upon their request. If such release is made, The Regents will request that such terms will be kept
in confidence in accordance with the provisions of Article 24 (Confidentiality) and not be disclosed to others. It is further understood that should a third party inquire whether a license to
Patent Rights is available, The Regents may disclose the existence of this Agreement and the extent of the grant in Article 2 (Grant) to such third party, but will not disclose the name of
Prometheus, except where The Regents is required to release such information under either the California Public Records Act or other applicable law. 

12.    Limited Warranty  

        12.1    Scope.    The Regents warrants to Prometheus (i) that it has the lawful right
to grant this license; and (ii) to the extent of the knowledge of The Regents' patent administrator responsible for administration of the Patent Rights licensed hereunder, The Regents are the
sole owner of the Patent Rights covering the UCLA Inventions, and The Regents and CSMC are the sole joint owners of the Patent Rights covering the Joint Inventions. 

        12.2    Disclaimer.    This license and the associated Invention, Patent Rights, Patent
Products, and Patent Methods are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR
WARRANTY THAT THE INVENTION, PATENT RIGHTS, PATENT PRODUCTS, OR PATENT METHOD WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT. 

        12.3    No Consequential Damages.    IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY
INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION, PATENT RIGHTS, PATENT METHOD, OR PATENT PRODUCTS. 

        12.4    No Implied Obligations.    Nothing in this Agreement will be construed as: 

	12.4a
	a
warranty or representation by The Regents as to the validity, enforceability, or scope of any Patent Rights; or

	12.4b
	a
warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of patents of
third parties; or

	12.4c
	an
obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Article 13 (Patent Infringement); or

	12.4d
	conferring
by implication, estoppel, or otherwise any license or rights under any patent of The Regents other than Patent Rights as defined herein, regardless of whether such
patents are dominant or subordinate to Patent Rights; or

	12.4e
	an
obligation to furnish any know-how not provided in Patent Rights. 

13.    Patent Matters  

        13.1    Prosecution.    The Regents will diligently prosecute and maintain the United States
and foreign patents comprising Patent Rights using counsel of its choice, and The Regents will instruct its patent counsel to furnish to Prometheus whenever possible with copies of all relevant
documentation and any proposed United States or foreign filings at least thirty (30) days prior to the date of filing, so that Prometheus may be currently and promptly informed and apprised of
the continuing prosecution, and may comment upon such documentation sufficiently in advance of any initial deadline for filing a 

10

 

response,
provided, however, that if Prometheus has not commented upon such documentation prior to the initial deadline for filing a response with the relevant government patent office or The Regents
must act to preserve Patent Rights, The Regents will be free to respond appropriately without consideration of comments by Prometheus, if any. Both parties hereto will keep this documentation in
confidence in accordance with the provisions of Article 24 (Confidentiality) herein. Counsel for The Regents will take instructions only from The Regents. Notwithstanding the foregoing, The
Regents shall give due consideration to the requests of Prometheus concerning submissions of documents to government patent offices. 

        13.2    Amendments Requested by Prometheus.    The Regents will use all reasonable efforts to
amend any patent application to include claims requested by Prometheus and required to protect the Patent Products contemplated to be sold or Patent Method to be practiced under this Agreement. 

        13.3    Extensions.    The Regents and Prometheus will cooperate in applying for an extension
of the term of any patent included within Patent Rights, if appropriate, under the Drug Price Competition and Patent Term Restoration Act of 1984. Prometheus will prepare all such documents, and The
Regents will execute such documents and will take such additional action as Prometheus may reasonably request in connection therewith. 

        13.4    Foreign Filings.    The Regents will, at the request of Prometheus, file, prosecute,
and maintain patent applications and patents covered by Patent Rights in foreign countries if available. Prometheus must notify The Regents within seven months of the filing of the corresponding
United States application of its decision to request The Regents to file foreign counterpart patent applications. This notice concerning foreign filing must be in writing and must identify the
countries desired. The absence of such a notice from Prometheus to The Regents within the seven month period will be considered an election by Prometheus not to request The Regents to secure foreign
patent rights on behalf of Prometheus. The Regents will have the right to file patent applications at its own expense in any country Prometheus has not included in its list of desired countries, and
such applications and resultant patents, if any, will not be included in the licenses granted under this Agreement. 

        13.5    Prosecution Expenses.    All present and future costs of preparing, filing,
prosecuting and maintaining all United States and foreign patent applications and all costs and fees relating to the preparation and filing of patents covered by Patent Rights will be borne by
Prometheus. 

        13.6    Term of Obligation.    The obligation of Prometheus to underwrite and to pay patent
preparation, filing, prosecution, maintenance, and related costs will continue for costs incurred until thirty (30) days after receipt by either party of a notice of termination ("Notice of
Termination") of this Agreement or license with respect to a particular patent or patent application within the Patent Rights. Prometheus will reimburse The Regents for all patent costs incurred
during the term of this Agreement and for thirty (30) days thereafter whether or not invoices for such costs are received during the thirty-day period after receipt of a Notice of
Termination. Prometheus may with respect to any particular patent application or patent terminate its obligations in any or all designated countries upon thirty (30) days written notice to The
Regents. The Regents may continue prosecution and/or maintenance of such application(s) or patent(s) at its sole discretion and expense, provided, however, that Prometheus will have no further
licenses hereunder. 

        13.7    Small Entity Status.    Prometheus will notify The Regents of any change of its status
as a small entity (as defined by the United States Patent and Trademark Office) and of the first sublicense granted to an entity that does not qualify as a small entity as defined therein. 

        13.8    Patent Marking.    Prometheus will mark all Patent Products made, used, or sold under
the terms of this Agreement, or their containers, in accordance with the applicable patent marking laws. 

        13.9    Instructions to Counsel.    The Regents have given instructions to The Regents' patent
counsel to forward all relevant patent prosecution documentation covered in the Patent Rights to Prometheus 

11

 

simultaneously
when forwarding such documentation to The Regents so long as this Agreement is active. Prometheus may request that The Regents supply estimates of patent expenses associated with the
filing and prosecution of foreign and United States patents in the Patent Rights, and The Regents shall make reasonable efforts to supply such information to Prometheus on a timely basis. Prometheus
may also request estimates of such expenses from The Regents' patent counsel if Prometheus desires to do so. 

        13.10    Patent Infringement.    In the event that either party learns of the substantial
infringement of any patent licensed under this Agreement, such party will call the attention of the other party thereto in writing and will provide the other party with reasonable evidence of such
infringement. Both parties to this Agreement acknowledge that during the period and in a jurisdiction where Prometheus has exclusive rights under this Agreement, neither will notify a third party of
the infringement of any of Patent Rights without first obtaining consent of the other party, which consent will not be unreasonably withheld. Both parties will use their best efforts in cooperation
with each other to terminate such infringement without litigation. 

        13.11    Enforcement.    If Prometheus desires that Patent Rights be enforced against
infringers, Prometheus either may request permission from The Regents to file suit against the infringement of Patent Rights or may request that The Regents take legal action against the infringement
of Patent Rights. Such
request must be made in writing and must include reasonable evidence of such infringement and damages to Prometheus. If the infringing activity has not been abated within 90 days following the
effective date of such request, The Regents will have the right to elect to: 

	13.11a
	commence
suit on its own account; or in the case of Joint Inventions, jointly with the co-owner; or

	13.11b
	refuse
to participate in such suit; and 

The
Regents will give notice of its election in writing to Prometheus by the end of the 100th day after receiving notice of such request from Prometheus. Prometheus may thereafter bring suit
for patent infringement if and only if The Regents elects not to commence suit and if the infringement occurred during the period and in a jurisdiction where Prometheus had exclusive rights under this
Agreement. However, in the event Prometheus elects to bring suit in accordance with this Paragraph, The Regents may thereafter join such suit at its own expense. 

        13.12    Infringement Expenses.    Such legal action as is decided upon will be at the expense
of the party on whose behalf the suit is brought and all recoveries recovered thereby will belong to such party, provided, however, that legal action brought jointly by The Regents and Prometheus and
participated in by both will be at the joint expense of the parties and all recoveries will be allocated in the following order: a) to each party reimbursement in equal amounts of the
attorney's costs, fees, and other related expenses to the extent each party paid for such costs, fees, and expenses until all such costs, fees, and expenses are consumed for each party; and
b) any remaining amount shared jointly by them in proportion to the share of expenses paid by each party. 

        13.13    Cooperation.    Each party will cooperate with the other in litigation proceedings
instituted hereunder but at the expense of the party on account of whom suit is brought. Such litigation will be controlled by the party bringing the suit, except that The Regents may be represented
by counsel of its choice in any suit brought by Prometheus. 

        13.14    1996 License Agreement.    As both The Regents and CSMC have an ownership interest in
the Joint Inventions, the license of the Patent Rights covering such Joint Inventions to Prometheus is covered by both (i) this Agreement (for license of The Regents' interest in the Patent
Rights); and (ii) the 1996 License Agreement (for license of CSMC's interest in the Patent Rights). This Agreement provides The Regents with certain rights with respect to prosecution and
maintenance and other matters affecting The Regent's interest in the Patent Rights, while the 1996 License Agreement 

12

 

provides
CSMC with certain rights with respect to CSMC's interest in the Patent Rights. The administrative procedures and obligations of Prometheus with respect to protecting such rights are not
completely consistent with respect to both agreements; therefore, The Regents agree to cooperate in all reasonable respects in order to assist Prometheus in fulfilling its obligations under both this
Agreement as well as the 1996 License Agreement. In the event of a conflict between the agreements relating to third party infringement matters, The Regents and Prometheus will work in good faith with
CSMC to reach an equitable resolution of any such matters. 

14.    Indemnification  

        14.1    Obligation.    Prometheus will (and require its sublicensees to) indemnify, hold
harmless, and defend The Regents, its officers, employees, and agents; the sponsors of the research that led to the Invention; the inventors of any invention covered by patents or patent applications
in Patent Rights (including the Patent Products and Patent Method contemplated thereunder) and their employers against any and all claims, suits, losses, damage, costs, fees, and expenses resulting
from or arising out of exercise of this license or any sublicense. This indemnification will include, but will not be limited to, any product liability. 

        14.2    Insurance.    Prometheus, at its sole cost and expense, will insure its activities in
connection with the work under this Agreement and obtain, keep in force, and maintain products liability insurance (or an equivalent program of self-insurance) in a minimum of
$[***] in coverage per occurrence and, upon initiation of any human clinical studies using a therapeutic molecule covered by the Patent Rights, Prometheus shall have first
increased its insurance coverage to a minimum of $[***] in the aggregate. It should be expressly understood, however, that the coverages and limits referred to under the above
will not in any way limit the liability of Prometheus. Prometheus will furnish The Regents with certificates of insurance evidencing compliance with all requirements upon written request of The
Regents. Such certificates will: 

	14.2a
	Provide
for 30 day advance written notice to The Regents of any modification;

	14.2b
	Indicate
that The Regents has been endorsed as an additional Insured under the coverages referred to under the above; and

	14.2c
	Include
a provision that the coverages will be primary and will not participate with nor will be excess over any valid and collectable insurance or program of
self-insurance carried or maintained by The Regents. 

If,
in the future, reasonable reductions and deletions are recommended by an independent professional insurance consultant, in view of the nature of Prometheus' business activities and the
availability of reasonably priced insurance coverage, then The Regents will consider such reductions or deletions. Nothing in the preceding sentence, however, shall obligate The Regents to make such
reductions or deletions. 

        14.3    Notification.    The Regents will promptly notify Prometheus in writing of any claim
or suit brought against The Regents in respect of which The Regents intends to invoke the provisions of this Article 15 (Indemnification). Prometheus will keep The Regents informed on a current
basis of its defense of any claims pursuant to this Article 14 (Indemnification). 

15.    Notices  

        15.1 Any
notice or payment required to be given to either party will be deemed to have been properly given and to be effective: 

	15.1a
	on
the date of delivery if delivered in person; 

*** Certain
information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions. 

13

 

	15.1b
	on
the date of mailing if mailed by first-class certified mail, postage paid; or

	15.1c
	on
the date of mailing if mailed by any global express carrier service that requires the recipient to sign the documents demonstrating the delivery of such notice of payment; 

to
the respective addresses given below, or to another address as designated in writing by the party changing its prior address. 

	In the case of Prometheus:	 	Prometheus Laboratories, Inc.

5739 Pacific Center Blvd.

San Diego, CA 92121

Telephone: 619-824-0892

Facsimile: 619-350-7941

Attention: Mike Walsh, President & CEO
	

In the case of The Regents:	
 	

The Regents of the University of California

University of California, Los Angeles

Office of Sponsored Research

Box 951406, 1401 Ueberroth Building

Los Angeles, California 90095-1406

Telephone: (310) 206-4401

Facsimile: (310) 206-3619

Attention: Director

16.    Assignability  

        16.1 This
Agreement is binding upon and will inure to the benefit of The Regents, its successors and assigns, but will be personal to Prometheus and assignable by Prometheus
only with the written consent of The Regents, which consent shall not be unreasonably withheld. Any other attempt by Licensee to assign this Agreement is void unless Licensee obtains the prior written
consent of The Regents. 

17.    Late Payments  

        17.1 In
the event royalty payments, fees, or patent prosecution costs are not received by The Regents when due, Prometheus will pay to The Regents interest charges at a rate
of ten percent (10%) simple interest per annum. Such interest will be calculated from the date payment was due until actually received by The Regents. Acceptance by The Regents of any late payment
interest from Prometheus under this Paragraph 17 will in no way affect the provision of Article 18 (Waiver) herein. 

18.    Waiver  

        18.1 It
is agreed that no waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth will be deemed a waiver as to any
subsequent and/or similar breach or default. 

19.    Failure to Perform  

        19.1 In
the event of a material failure of performance due under the terms of this Agreement and if it becomes necessary for either party to undertake legal action against
the other on account thereof, then the prevailing party will be entitled to reasonable attorney's fees in addition to costs and necessary disbursements. 

14

 
20.    Governing Laws  

        20.1 THIS
AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules that would direct the
application of the laws of another jurisdiction, but the scope and validity of any patent or patent application will be governed by the applicable laws of the country of such patent or patent
application. 

21.    Government Approval or Registration  

        21.1 If
this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, Prometheus will
assume all legal obligations to do so. Prometheus will notify The Regents if it becomes aware that this Agreement is subject to a United States or foreign government reporting or approval requirement.
Prometheus will make all necessary filings and pay all costs including fees, penalties, and all other out-of-pocket costs associated with such reporting or approval process. 

22.    Export Control Laws  

        22.1 Prometheus
will observe all applicable United States and foreign laws with respect to the transfer of Patent Products and related technical data to foreign countries,
including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations. 

23.    Force Majeure  

        23.1 The
parties to this Agreement will be excused from any performance required hereunder if such performance is rendered impossible or unfeasible due to any acts of God,
catastrophes, or other major events beyond their reasonable control, including, without limitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes,
lock-outs, or other serious labor disputes; and floods, fires, explosions, or other natural disasters. However, any party to this Agreement will have the right to terminate this Agreement
upon 30 days' prior written notice if either party is unable to fulfill its obligations under this Agreement due to any of the causes mentioned above and such inability continues for a period
of one year. Notices will be subject to Article 15 (Notices). 

24.    Confidentiality  

        24.1 Prometheus
and The Regents respectively will treat and maintain the proprietary business, patent prosecution, software, engineering drawings, process and technical
information, and other proprietary information ("Proprietary Information") of the other party in confidence using at least the same degree of care as that party uses to protect its own proprietary
information of a like nature for a period from the date of disclosure until five years after the date of termination of this Agreement. This confidentiality obligation will apply to the information
defined as "Data" under the Secrecy Agreement, and such Data will be treated as Proprietary Information hereunder. 

        24.2 All
Proprietary Information will be labeled or marked confidential or as otherwise similarly appropriate by the disclosing party, or if the Proprietary Information is
orally disclosed, it will be reduced to writing or some other physically tangible form, marked and labeled as set forth above by the disclosing party, and delivered to the receiving party within
30 days after the oral disclosure as a record of the disclosure and the confidential nature thereof. Notwithstanding the foregoing, Prometheus and The Regents may use and disclose Proprietary
Information to its employees, agents, consultants, contractors, and, in the case of Prometheus, its sublicensees, provided that any such parties are bound by a like duty of confidentiality. 

15

 

        24.3 Nothing
contained herein will in any way restrict or impair the right of Prometheus or The Regents to use, disclose, or otherwise deal with any Proprietary Information: 

	24.3a
	that
recipient can demonstrate by written records was previously known to it;

	24.3b
	that
is now, or becomes in the future, public knowledge other than through acts or omissions of recipient;

	24.3c
	that
is lawfully obtained without restrictions by recipient from sources independent of the disclosing party;

	24.3d
	that
is required to be disclosed to a governmental entity or agency in connection with seeking any governmental or regulatory approval, or pursuant to the lawful requirement or
request of a governmental entity or agency; or

	24.3e
	that
The Regents is required to disclose pursuant to the California Public Records Act or other applicable law. 

        24.4 Upon
termination of this Agreement, Prometheus and The Regents will destroy or return to the disclosing party proprietary information received from the other in its
possession within 15 days following the effective date of termination. Prometheus and The Regents will provide each other, within 30 days following termination, with a written notice
that Proprietary Information has been returned or destroyed. Each party may, however, retain one copy of Proprietary Information for archival purposes in non-working files. 

25.    Infringement under Drug Price Competition Act  

        25.1 In
the event either party receives notice pertaining to any patent included within Patent Rights pursuant to the Drug Price Competition and Patent Term Restoration Act
of 1984, (Public Law 98-417, "the Act") including but not necessarily limited to notices pursuant to Sections 101 and 103 of the Act from persons who have filed an abbreviated NDA
("ANDA") or a "paper" NDA, or in the case of an infringement of Patent Rights as defined in Section 271(e) of Title 35 of the United States Code, such party will notify the other party
promptly. 

        25.2 The
Regents hereby authorizes Prometheus to include in any NDA for a Patent Product, a list of patents included within Patent Rights identifying The Regents as patent
owner. 

26.    Miscellaneous  

        26.1    Headings.    The headings of the several sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 

        26.2    Effectiveness of Agreement.    This Agreement will not be binding upon the parties
until it has been signed below on behalf of each party, in which event, it will be effective as of the Effective Date recited on page one. 

        26.3    Amendment.    No amendment or modification hereof will be valid or binding upon the
parties unless made in writing and signed on behalf of each party. 

        26.4    Entire Agreement.    This Agreement embodies the entire understanding of the parties
and will supersede all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter hereof. The Secrecy Agreement specified in
the Recitals in this Agreement and dated March 19, 1999 is hereby terminated. 

        26.5    Severability.    In case any of the provisions contained in this Agreement are held to
be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not 

16

 

affect
any other provisions hereof, but this Agreement will be construed as if such invalid or illegal or unenforceable provisions had never been contained herein. 

        26.6    Joint Preparation.    This Agreement has been negotiated and prepared jointly by both
parties and shall not be construed for or against any party but shall be given a fair and reasonable construction in accordance with the intention of the parties. 

        26.7    Independent Contractors.    The relationship between the parties is that of
independent contractors. The parties are not joint venturers, partners, principal and agent, master and servant, employer and employee, and have no other relationship other than independent
contracting parties. Neither party shall have power to bind or obligate each other in any manner, other than as is expressly set forth in this Agreement. 

        26.8    Compliance with Laws.    Each party shall comply with all applicable federal, state
and local laws an regulations in connection with its activities pursuant to this Agreement. 

        26.9    Attorneys' Fees.    In the event of any action at law or in equity between the parties
hereto to enforce any of the provisions hereof, the unsuccessful party to such litigation shall pay to the successful party all costs and expenses, including actual attorney's fees, incurred therein
by such successful party, and if such successful party shall recover a judgment in any such action or proceeding, such costs, expenses and attorneys' fees may be included in and as part of such
judgment 

17

 

        In
witness whereof, both The Regents and Prometheus have executed this Agreement, in duplicate originals, by their respective officers hereunto duly authorized, on the date and year
hereinafter written. 

	Prometheus Laboratories, Inc.	 	 
	

By:	

/s/ Michael J. Walsh
 Michael J. Walsh, Chief Executive Officer	
 	

 
	
The Regents of the University of California	
 	

 
	

By:	

/s/ Patricia Brennan
	
 	

 
	Name:	Patricia Brennan	 	 
	Title:	Director Office of Sponsored Research	 	 

18

 
 
 

EXHIBIT A
  PATENT RIGHTS    
    

Joint Inventions Patent Rights
  (UCLA/CSMC)  

S.N.
08/837,058

Diagnosis, prevention and treatment of ulcerative colitis, and clinical subtypes thereof, using Histone H1 

PCT/US97/06987

Diagnosis, prevention and treatment of ulcerative colitis, and clinical subtypes thereof, using Histone H1 

S.N.
08/804,106/ FP-PM-2713

Ulcerative colitis pANCA secretory vesicle antigen and methods of using same 

PCT/US97/13059

Ulcerative colitis pANCA secretory vesicle antigen and methods of using same 

UCLA Inventions Patent Rights  

S.N.09/041,889

Diagnosis, prevention and treatment of ulcerative colitis, and clinical subtypes thereof, using microbial UC pANCA antigens

(UCLA) 

UCLA
Case No. LA 99-558-01

DNA Sequence from Organism Implicated In IBD 

19

QuickLinks

Exhibit 10.22

Exclusive License Agreement Between The Regents of the University of California and Prometheus Laboratories, Inc.

EXHIBIT A PATENT RIGHTS

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