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Exhibit 10.18    
    

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. 

ASSET PURCHASE AND SALE AGREEMENT  

Between 

SMITHKLINE BEECHAM CORPORATION  

 d/b/a  

 GLAXOSMITHKLINE  

and 

GLAXO GROUP LIMITED  

as Seller 

and

PROMETHEUS LABORATORIES INC.  

as Purchaser 

Dated as of October 31, 2007  

 

TABLE OF CONTENTS  

	 
	 	 
	 	Page

	1. DEFINITIONS	 	1
	 	 	1.1	 	Definitions	 	1
	 	 	1.2	 	Other Definitional Provisions	 	10
	

2. PURCHASE AND SALE	
 	

11
	 	 	2.1	 	Purchase and Sale of Purchased Assets	 	11
	 	 	2.2	 	Excluded Assets	 	11
	 	 	2.3	 	Assumed Liabilities	 	11
	 	 	2.4	 	Excluded Liabilities	 	11
	 	 	2.5	 	Unblocking License and Covenant Not to Sue	 	12
	 	 	2.6	 	Purchase Price	 	13
	 	 	2.7	 	Risk of Loss	 	15
	 	 	2.8	 	Audits	 	16
	 	 	2.9	 	Financial Terms	 	17
	

3. CLOSING	
 	

17
	 	 	3.1	 	Closing	 	17
	 	 	3.2	 	Transactions at Closing	 	17
	 	 	3.3	 	Delivery of Purchased Assets by Seller	 	18
	

4. REPRESENTATIONS AND WARRANTIES OF SELLER	
 	

18
	 	 	4.1	 	Organization	 	18
	 	 	4.2	 	Due Authorization	 	19
	 	 	4.3	 	No Conflicts; Enforceability	 	19
	 	 	4.4	 	Title and Sufficiency of Assets	 	19
	 	 	4.5	 	Intellectual Property	 	20
	 	 	4.6	 	Litigation	 	21
	 	 	4.7	 	Consents	 	21
	 	 	4.8	 	Taxes	 	21
	 	 	4.9	 	Compliance with Laws	 	21
	 	 	4.10	 	Regulatory Matters	 	22
	 	 	4.11	 	Financial Statements; Liabilities; Absence of Changes	 	22
	 	 	4.12	 	Inventory	 	23
	 	 	4.13	 	Wholesalers	 	23
	 	 	4.14	 	Other Assets	 	23
	 	 	4.15	 	Brokers, Etc.	 	23
	 	 	4.16	 	Disclaimer	 	24
	

5. REPRESENTATIONS AND WARRANTIES OF PURCHASER	
 	

24
	 	 	5.1	 	Organization	 	24
	 	 	5.2	 	Due Authorization	 	24
	 	 	5.3	 	No Conflicts; Enforceability	 	25
	 	 	5.4	 	Litigation	 	25
	 	 	5.5	 	Consents	 	25
	 	 	5.6	 	Financing	 	25
	 	 	5.7	 	Brokers, Etc.	 	25
	

6. COVENANTS PRIOR TO CLOSING	
 	

26
	 	 	6.1	 	Conduct of the Product or the Business	 	26
	 	 	6.2	 	Required Approvals and Consents	 	26

i

 

	 	 	6.3	 	HSR Act	 	26
	 	 	6.4	 	Transition Activities	 	27
	 	 	6.5	 	Notifications	 	27
	 	 	6.6	 	No Negotiation	 	27
	 	 	6.7	 	Further Assurances; Further Documents	 	27
	

7. CONDITIONS TO CLOSING	
 	

27
	 	 	7.1	 	Conditions Precedent to Obligations of Purchaser and Seller	 	27
	 	 	7.2	 	Conditions Precedent to Purchaser's Obligations	 	28
	 	 	7.3	 	Conditions Precedent to Seller's Obligations	 	28
	

8. ADDITIONAL COVENANTS	
 	

28
	 	 	8.1	 	Confidentiality; Publicity	 	28
	 	 	8.2	 	Use of Trade or Service Marks	 	30
	 	 	8.3	 	Notification of Customers	 	31
	 	 	8.4	 	Product Returns, Rebates and Chargebacks	 	31
	 	 	8.5	 	Accounts Receivable	 	34
	 	 	8.6	 	Regulatory Matters	 	34
	 	 	8.7	 	Non-Compete	 	35
	 	 	8.8	 	Ex-U.S. Rights	 	35
	 	 	8.9	 	Tax Matters	 	35
	

9. TERMINATION AND SURVIVAL	
 	

37
	 	 	9.1	 	Termination	 	37
	 	 	9.2	 	Procedure and Effect of Termination	 	38
	

10. INDEMNIFICATION AND DISPUTE RESOLUTION	
 	

39
	 	 	10.1	 	Indemnification	 	39
	 	 	10.2	 	Indemnification Procedures	 	41
	 	 	10.3	 	Sole Remedy	 	42
	 	 	10.4	 	Dispute Resolution	 	42
	 	 	10.5	 	Limitation on Liability	 	43
	

11. MISCELLANEOUS	
 	

43
	 	 	11.1	 	Assignment; Binding Effect	 	43
	 	 	11.2	 	Survival of Representations and Warranties	 	43
	 	 	11.3	 	Expenses	 	43
	 	 	11.4	 	Notices	 	43
	 	 	11.5	 	Severability	 	44
	 	 	11.6	 	Entire Agreement	 	44
	 	 	11.7	 	No Third Party Beneficiaries	 	44
	 	 	11.8	 	Waiver	 	45
	 	 	11.9	 	Governing Law; Jurisdiction	 	45
	 	 	11.10	 	Injunctive Relief	 	45
	 	 	11.11	 	Amendment	 	45
	 	 	11.12	 	Headings	 	45
	 	 	11.13	 	Counterparts	 	45
	 	 	11.14	 	Schedules	 	45
	 	 	11.15	 	Construction	 	45

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   LIST OF EXHIBITS  

	Exhibit A	 	—	 	Assignment of Copyrights
	Exhibit B	 	—	 	Assignment of Patents
	Exhibit C	 	—	 	Assignment of Product Domain Names
	Exhibit D	 	—	 	Assignment of Trademarks
	Exhibit E	 	—	 	Bill of Sale
	Exhibit F	 	—	 	Distribution, Supply and Transition Agreement
	Exhibit G	 	—	 	Escrow Agreement
	Exhibit H	 	—	 	Stock Purchase Agreement
	Exhibit I	 	—	 	Supply Agreement
	Exhibit J	 	—	 	Transition Services Agreement
	
LIST OF SCHEDULES
	
Schedule 1.1(a)	
 	

—	
 	

Active Promotional Materials
	Schedule 1.1(b)	 	—	 	Applicable Permits
	Schedule 1.1(c)	 	—	 	Inactive Promotional Materials
	Schedule 1.1(d)	 	—	 	INDs
	Schedule 1.1(e)	 	 	 	NDAs
	Schedule 1.1(f)	 	—	 	Product Copyrights
	Schedule 1.1(g)	 	—	 	Product Domain Names
	Schedule 1.1(h)	 	—	 	Product Marks
	Schedule 1.1(i)	 	—	 	Product Patent Rights
	Schedule 1.1(j)	 	—	 	Product Trade Dress
	Schedule 1.1(k)	 	—	 	Promotional Materials Artwork
	Schedule 1.1(l)	 	 	 	Registrations
	Schedule 1.1(m)	 	—	 	Tooling
	Schedule 1.1(n)	 	 	 	Website Artwork
	Schedule 2.2(b)	 	—	 	Excluded Contracts
	
SELLER DISCLOSURE SCHEDULE
	
Schedule 4.4(b)	
 	

—	
 	

Sufficiency of Purchased Assets
	Schedule 4.5	 	—	 	Intellectual Property
	Schedule 4.6	 	—	 	Litigation
	Schedule 4.10(g)	 	—	 	Post-Marketing Commitments
	Schedule 4.11	 	—	 	Financial Statements
	Schedule 4.12(b)	 	—	 	Returns
	Schedule 6.1	 	—	 	Conduct of the Business

i

  

 
 

ASSET PURCHASE AND SALE AGREEMENT    
    

        THIS ASSET PURCHASE AND SALE AGREEMENT (this "Agreement"), dated
as of October 31, 2007 (the "Execution Date"), is entered into by and between SmithKline Beecham Corporation d/b/a GlaxoSmithKline
("SB Corp"), a corporation organized under the laws of the Commonwealth of Pennsylvania, having a place of business at One Franklin Plaza, Philadelphia,
PA 19101 and Glaxo Group Limited ("GGL"), a corporation organized under the laws of England, with offices at Glaxo Wellcome House, Berkeley Avenue,
Greenford, Middlesex, UB6 0NN, United Kingdom (together referred to as "Seller") and Prometheus Laboratories Inc., a corporation organized
under the laws of California, having a place of business at 9410 Carroll Park Drive, San Diego, CA 92121 ("Purchaser"). Each of Seller and Purchaser is
sometimes referred to herein, individually, as a "Party" and, collectively, as the "Parties." 

RECITALS  

        WHEREAS, Seller owns and operates the Business (as hereinafter defined) in the Territory (as hereinafter defined); 

        WHEREAS,
Seller has determined that the sale of certain assets and the transfer of certain liabilities associated with the Business in the Territory, on the terms and conditions set
forth herein, is consistent with and in furtherance of the business strategies of Seller; 

        WHEREAS,
Purchaser has determined that the purchase of certain assets and assumption of certain liabilities associated with the Business in the Territory, on the terms and conditions set
forth herein, is consistent with and in furtherance of the business strategies of Purchaser; and 

        WHEREAS,
Seller desires to sell certain assets and transfer certain liabilities of the Business in the Territory to Purchaser, and Purchaser desires to purchase such assets and assume
such liabilities from Seller, on the terms and conditions set forth herein. 

        NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties, covenants, agreements and provisions set forth herein and in the Other Agreements, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: 

ARTICLE I

DEFINITIONS  

        1.1    Definitions.    The following terms shall have the meanings set forth below for purposes of this Agreement: 

        "Accountants" means an accounting firm of national reputation (excluding each of Seller's and Purchaser's respective regular outside
accounting firms) as may be mutually acceptable to the Parties; provided, however, if the Parties are unable to agree on such accounting firm within ten
(10) days or any such mutually selected accounting firm is unwilling or unable to serve, then Seller shall deliver to Purchaser a list of three (3) other accounting firms of national
reputation, and Purchaser shall select one of such three (3) accounting firms. 

        "Acquiring Party" has the meaning set forth in Section 8.7. 

        "Act" means the United States Federal Food, Drug, and Cosmetic Act, as amended, and regulations promulgated thereunder from time to time. 

        "Action" means any claim, action, suit, arbitration, complaint, inquiry, audit, proceeding or investigation, in each case, by or before
any applicable Governmental Authority. 

        "Active Promotional Materials" means those items attached as Schedule 1.1(a). 

1

 

        "Affiliate" of a Party or Person means any Person, whether de jure or de facto, that directly or indirectly, controls, is controlled by,
or is under common control with such Party or Person, as applicable. Solely as used in this definition, "control" means (a) direct or indirect
ownership of more than fifty percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to
vote on or direct the affairs of such Party or Person, as applicable, or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the policies and management
of such Party or Person, as applicable, whether by the ownership of stock, by contract, or otherwise. 

        "Agreement" has the meaning set forth in the Preamble of this Agreement. 

        "AMP" has the meaning set forth in Section 8.4(f)(i). 

        "ANDA" means an Abbreviated New Drug Application filed with the FDA (as more fully defined in 21 USC. §355(j)). 

        "Annual Net Sales" means aggregate Net Sales in a particular Calendar Year. 

        "API" means the active pharmaceutical ingredient, alosetron HCl. 

        "Applicable Permits" means the permits set forth on Schedule 1.1(b) hereto. 

        "Apportioned Obligations" has the meaning set forth in Section 8.9(h). 

        "Asset Acquisition Statement" has the meaning set forth in Section 8.9(b). 

        "Assets" of any Person means all assets and properties of any kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), and the goodwill related thereto, operated, owned or leased by such Person, including
cash, cash equivalents, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, equipment, inventory, goods and intellectual property. 

        "Assignment of Copyrights" means the Assignment of Copyrights, in the form attached hereto as  Exhibit A. 

        "Assignment of Patents" means the Assignment of Patents, in the form attached hereto as  Exhibit B. 

        "Assignment of Product Domain Names" means the Assignment of Product Domain Names, in the form attached hereto as  Exhibit C. 

        "Assignment of Trademarks" means the Assignment of Trademarks, in the form attached hereto as  Exhibit D. 

        "Assumed Liabilities" has the meaning set forth in Section 2.3. 

        "Best Price" has the meaning set forth in Section 8.4(f)(i). 

        "Bill of Sale" means the Bill of Sale, in the form attached hereto as Exhibit E. 

        "Business" means the business of the Manufacture and Distribution of the Product (and, as applicable with respect to Purchaser
Representatives only, Product Improvements). 

        "Business Day" means any day other than a day which is a Saturday, a Sunday or any day banks are authorized or required to be closed in
the United States. 

        "Calendar Quarter" means a period of three (3) consecutive months ending on the last day of March, June, September, or December,
respectively. 

        "Calendar Year" means the twelve (12) month period commencing on January 1 and ending on December 31. 

2

 

        "Chargeback Period" has the meaning set forth in Section 8.4(e)(i). 

        "Claim" has the meaning set forth in Section 10.2(a). 

        "Clinical Trial Database" means the clinical trial database for the Product and all rights of reference thereto, including
(a) assessment of enrolled patients' disease characteristics, (b) correlation among endpoints without regard to treatment assignment, (c) evaluation of characteristics of screen
failures, and (d) reference to data collection methods. 

        "Closing" means the closing of the purchase and sale of the Purchased Assets and assignment and assumption of the Assumed Liabilities
contemplated by this Agreement. 

        "Closing Date" has the meaning set forth in Section 3.1. 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Commencement Date" means the date on which Purchaser commences the Distribution of the Product in the Territory pursuant to the
Distribution, Supply and Transition Agreement. 

        "Commercially Reasonable Efforts" means that level of efforts and resources consistent with the usual practice followed by a Party in the
exercise of reasonable business discretion relating to other pharmaceutical products owned by it or to which it has exclusive rights, which is of similar market potential and at a similar stage in
development or product life, taking into account issues of patent coverage, safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or
product, the regulatory structure involved, the profitability of the products (including, without limitation, pricing and reimbursement status achieved), and other relevant factors, including, without
limitation, technical, legal, scientific, and/or medical factors. 

        "Common Stock" means the common stock of Prometheus Laboratories Inc., par value $0.001 per share. 

        "Competitive Product" means [***]. With respect to Purchaser, Competitive Product shall not include Product or
Product Improvements. 

        "Confidentiality Agreement" means that certain Mutual Confidential Disclosure Agreement, dated February 7, 2007, between Seller and
Purchaser. 

        "Confidential Information" has the meaning set forth in Section 8.1(a). 

        "Contracts" means any and all binding written commitments, contracts, purchase orders, leases, licenses, easements, permits, instruments,
commitments, arrangements, undertakings, practices or other agreements in effect as of the Closing Date which are used, whether exclusively or not exclusively, by Seller for the Product or the
Business. 

        "Control" or "Controlled by" means, with respect to Intellectual Property, the ability of
a Party (collectively with its Affiliate(s)), whether by ownership, license or otherwise, to grant a license or sublicense. 

        "CMS" has the meaning set forth in Section 8.4(f)(i). 

        "Development Know-How" means Know-How resulting from or used in connection with pre-clinical and
clinical development activities conducted for the Product which has not been published by Seller and which is not exclusively used by Seller or Seller's Affiliates for the conduct of the Business,
including the Clinical Trial Database. 

*** 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. 

3

 

        "Distribution" or "Distribute" means any and all activities related to the distribution,
marketing, promoting, offering for sale and selling of the Product (and, as applicable with respect to Purchaser Representatives only, Product Improvements) in the Territory, including advertising,
detailing, educating, planning, promoting, conducting reporting, storing, handling, shipping and communicating with Governmental Authorities and Third Parties in connection therewith. 

        "Distribution, Supply and Transition Agreement" means the agreement in the form attached hereto as  Exhibit F. 

        "Encumbrance" means any security interest, pledge, hypothecation, mortgage, lien or encumbrance. 

        "Equity Payment" shall have the meaning set forth in Section 2.6(b)(iii). 

        "Escrow Account" shall have the meaning set forth in Section 2.6(a). 

        "Escrow Agent" means Citibank, N.A. or such other Third Party as may be mutually agreed by the Parties. 

        "Escrow Agreement" means the escrow agreement in the form attached hereto as  Exhibit G. 

        "Ex-U.S. Rights" has the meaning set forth in Section 8.8. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 

        "Excluded Assets" means all of Seller's assets, including Patents, Trademarks and Know-How, whether or not relating to the
Product and whether or not located in the Territory, other than the Purchased Assets. 

        "Excluded Contracts" are the Contracts set forth on Schedule 2.2(b). 

        "Excluded Liabilities" has the meaning set forth in Section 2.4. 

        "Execution Date" means the date set forth in the Preamble of this Agreement. 

        "Executives" shall have the meaning set forth in Section 2.8(d). 

        "FDA" means the United States Food and Drug Administration, or any successor agency thereto. 

        "Financial Statements" shall have the meaning set forth in Section 4.11(a). 

        "FSS" has the meaning set forth in Section 8.4(e)(i). 

        "Fraud Claims" shall have the meaning set forth in Section 10.1(a)(iv). 

        "Fundamental Representation Claims" shall have the meaning set forth in Section 10.1(a)(ii). 

        "GAAP" means United States generally accepted accounting principles. 

        "General Claims" shall have the meaning set forth in Section 10.1(a)(v). 

        "Generic Product" means an A-rated generic equivalent to a Product or a Product Improvement. 

        "Governmental Authority" means any nation or government, any provincial, state, regional, local or other political subdivision thereof,
any supranational organization of sovereign states, and any entity, department, commission, bureau, agency, authority, board, court, official or officer, domestic or foreign, exercising executive,
judicial, regulatory or administrative functions of or pertaining to government. 

        "HSR Act" means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder. 

        "IFRS" means the International Financial Reporting Standards. 

4

 

        "Inactive Promotional Materials" means those items attached as Schedule 1.1(c). 

        "IND" means Investigational New Drug Applications set forth on Schedule 1.1(d). 

        "Indemnification Basket" shall have the meaning set forth in Section 10.1(e)(i). 

        "Indemnification Cap" shall have the meaning set forth in Section 10.1(e)(i). 

        "Intellectual Property" means intellectual property rights, including Trademarks, copyrights and Patents, whether registered or
unregistered, and all applications and registrations therefor, domain names, web sites, Know-How, confidential information, trade secrets, and similar proprietary rights in confidential
inventions, discoveries, analytic models, improvements, processes, techniques, devices, methods, patterns, formulations and specifications. 

        "Intermediate Patents" means the Patents (other than Product Patent Rights) that are (a) Controlled by Seller, and (b) used
by Seller or Seller's Affiliates for the Manufacture of the Product as of the Closing and in the last production run for each of the Product and/or API immediately prior to the Closing but is not used
exclusively by Seller or its Affiliates for the Product. 

        "Know-How" means research and development information, validation methods and procedures, unpatented inventions, knowledge,
trade secrets, technical or other data or information, or other materials, methods, procedures, processes, flow diagrams, materials, developments or technology, including all biological, chemical,
pharmacological, toxicological, clinical, manufacturing, analytical, safety, quality assurance, quality control and other information or data, other than such information which is or becomes the
subject of a Valid Claim of a Patent or of a provisional or filed patent application. 

        "Knowledge" means, with respect to a Party, the actual knowledge of such Party after reasonable inquiry. 

        "Law" means each provision of any currently existing federal, provincial, state, local or foreign law, statute, ordinance, order, code,
rule or regulation, promulgated or issued by any applicable Governmental Authority, as well as any judgments, decrees, injunctions or agreements issued or entered into by any applicable Governmental
Authority. 

        "Liability" or "Liabilities" means, collectively, any indebtedness, guaranty, endorsement,
claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, choate or inchoate, liquidated or unliquidated, secured or unsecured, direct or
indirect, matured or unmatured, or absolute, contingent or otherwise, including any product liability. 

        "Licensed Intellectual Property" shall have the meaning set forth in Section 2.5(d). 

        "Losses" means, with respect to any claim or matter, all losses, expenses, obligations and other Liabilities or other damages (whether
absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest
obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and
other experts, and other expenses of litigation). 

        "Manufacture" means those certain activities required to manufacture and supply the finished Product (and, as applicable with respect to
Purchaser Representatives only, Product Improvements), inclusive of the API and certain related intermediates including formulation, testing, packaging, storing, warehousing, and handling thereof. 

        "Manufacturing Know-How" means the Know How (other than Product Know-How and operating procedures of Seller used
generally by Seller in its manufacture of products) that is (a) Controlled by Seller, and (b) used by Seller or Seller's Affiliates for the Manufacture of the Product as of the Closing 

5

 

and
in the last production run for each of the Product and/or API immediately prior to the Closing but is not used exclusively by Seller or its Affiliates for the Product. 

        "Material Adverse Effect" means any change or effect that is materially adverse to the Business, the Purchased Assets and/or the Assumed
Liabilities, taken as a whole, but shall exclude any change, effect or circumstance resulting or arising from: (a) the announcement of or consummation of the Transactions, (b) events,
circumstances, changes or effects that generally affect the industries in which Seller operates, so long as such events, circumstances, changes or effects do not affect the Business, the Purchased
Assets and/or the Assumed Liabilities in a materially disproportionate manner from other pharmaceutical products marketed pursuant to 21 CFR 314 Subpart H, (c) general economic or
political
conditions or events, circumstances, changes or effects affecting the Business, the Purchased Assets and/or the Assumed Liabilities generally, so long as such events, circumstances, changes or effects
do not affect the Business, the Purchased Assets and/or the Assumed Liabilities in a materially disproportionate manner from other pharmaceutical products marketed pursuant to 21 CFR 314
Subpart H, (d) changes caused by a material worsening of current conditions caused by acts of terrorism or war (whether or not declared) occurring after the Execution Date, and/or
(e) any changes in Law so long as such changes do not affect the Business, the Purchased Assets and/or the Assumed Liabilities in a materially disproportionate manner from other pharmaceutical
products marketed pursuant to 21 CFR 314 Subpart H. 

        "Medicaid Rebate Law" means §1927 of the Social Security Act (42 U.S.C. §1396r-8). 

        "Medicaid Regulations" means the Final Rule, Medicaid Program—Prescription Drugs as published at 72 Fed. Reg. 39142
(July 17, 2007) (codified at 42 CFR Part 447). 

        "Milestone Event" has the meaning set forth in Section 2.6(b)(i). 

        "Milestone Payments" has the meaning set forth in Section 2.6(b)(i). 

        "NDA(s)" means the New Drug Application(s) set forth on Schedule 1.1(e). 

        "NDC" means the "National Drug Code," which is the eleven digit code, including the
labeler code, product code and package code, with respect to a pharmaceutical product registered by a company with the FDA pursuant to Section 510(j) of the Act and applicable FDA rules and
regulations. 

        "Net Sales" means the gross amount invoiced for sales of each Product and each Product Improvement by any Purchaser Representatives to
Third Parties, less the following deductions from such gross amounts [***]: 

          (i)  [***]; 

         (ii)  [***]; 

        (iii)  [***];

        (iv)  [***];

         (v)  [***];
and 

        (vi)  [***].

        The
foregoing deductions shall only be deducted to the extent they were initially included in, and not otherwise deducted from, gross amounts invoiced. 

Net
Sales shall also include [***]. For the avoidance of doubt, [***]. In the event that Product and/or Product Improvements are sold, transferred, or
otherwise commercially exploited by any Purchaser Representatives in a manner such that the above means of calculating Net Sales is not possible or otherwise is inappropriate, the Parties agree to
negotiate in good faith a reasonable mechanism for fairly calculating the Net Sales resulting from such sales, transfers, or other commercial exploitation. 

*** 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

 

        Net
Sales, as set forth in this definition, shall be calculated in accordance with GAAP applied in a consistent manner. 

        "Other Agreements" means, collectively, the Assignment of Copyrights, the Assignment of Product Domain Names, the Assignment of Patents,
the Assignment of Trademarks, the Bill of Sale, the Supply
Agreement, the Distribution, Supply and Transition Agreement, the Escrow Agreement, the Transition Services Agreement and the Stock Purchase Agreement. 

        "Party" or "Parties" has the meaning set forth in the first paragraph of this Agreement. 

        "Patents" means patents, patent applications, patent disclosures, invention disclosures and other rights (and all rights related thereto,
including all reissues, reexaminations, divisions, continuations, continuations-in-part, provisionals, continued prosecution applications, substitutions, reissues, extensions
or renewals of any of the foregoing) in the Territory. 

        "Payment Report" has the meaning set forth in Section 2.6(b)(ii). 

        "PDMA" means the Prescription Drug Marketing Act of 1987, as amended, and regulations promulgated thereunder from time to time. 

        "Permitted Encumbrances" means (a) statutory liens for current Taxes of Seller not yet due and payable or Taxes of Seller being
contested in good faith by appropriate proceedings, (b) mechanics', carriers', workers', repairers' and other similar liens arising or incurred in the ordinary course of business relating to
obligations as to which there is no default on the part of Seller, or pledges, deposits or other liens securing the performance of bids, trade contracts, leases or statutory obligations (including
workers' compensation, unemployment insurance or other social security legislation). 

        "Person" means any individual, corporation, partnership, firm, association, joint venture, joint stock company, trust or other entity, or
any government or regulatory administrative or political subdivision or agency, department or instrumentality thereof. 

        "Post-Closing Tax Period" means any Tax period beginning after the Closing Date and the portion of any Straddle Period
beginning after the Closing Date. 

        "Pre-Closing Tax Period" means any Tax period ending on or before the Closing Date and the portion of any Straddle Period
ending on the Closing Date. 

        "Product" means the 0.5 mg and 1 mg tablet of alosetron HCl. Each strength of the dosage form above shall be deemed a separate Product. 

        "Product Copyrights" means the copyrights set forth on Schedule 1.1(f) hereto. 

        "Product Domain Names" means the domain names set forth on Schedule 1.1(g) hereto. 

        "Product Improvements" means any pharmaceutical composition Controlled by Purchaser other than Product which contains alosetron HCl,
whether or not as the sole active ingredient, in any presentations, strength, dosages or formulations. Each presentation, strength, dosage and formulation shall be deemed a separate Product
Improvement. 

        "Product Intellectual Property" means the Product Patent Rights, Product Copyrights, Product Domain Names, Product Know-How,
Product Marks and Product Trade Dress. 

        "Product Know-How" means the Know-How which is Controlled by Seller and exclusively used by Seller for the Product
or the Business in the Territory during the period between (a) the earlier of (i) December 1, 2002 or (ii) the last production run for each Product and/or API, and
(b) the Closing Date. 

        "Product Mark(s)" means the Trademark set forth on Schedule 1.1(h) hereto, and all
common law rights, applications and registrations therefor, and all goodwill associated therewith. 

7

 

        "Product Patent Rights" means the Patents set forth on Schedule 1.1(i). 

        "Product Records" means, to the extent permitted by law and maintained by the Seller, all reasonably accessible written or electronic
books and records relating exclusively to the conduct of the Business by Seller, including copies of all manufacturing records, sales history (including data by customers), marketing studies,
consultant reports, data relating to prescribing program (excluding invoices and any prescribing data), and all complaint files and adverse event files, provided,
however, that Seller may retain copies of any such books and records to the extent necessary for Tax, accounting, litigation or other valid business purposes required by this
Agreement, the Other Agreements or at the written request of Purchaser, which copy shall be deemed to be "Purchaser Proprietary Information" from and after the Closing Date and subject to the
provisions of Section 8.1. For the avoidance of doubt, the following will be excluded from the definition of Product Records: all books, documents, records, files or other items that are
(a) bids received from other parties and strategic, financial or Tax analyses
relating to the divestiture of the Purchased Assets, the Assumed Liabilities, the Product and Business and similar materials prepared in connection with or relating to the Transactions,
(b) maintained by Seller and/or its representatives and agents in connection with their respective tax, legal, regulatory or reporting requirements, or (c) regarded by Seller as attorney
work product, attorney-client communications or protected by privilege. 

        "Product Trade Dress" means the trade dress set forth on Schedule 1.1(j) hereto,
but specifically excluding all Seller Brands used thereon with the exception of the Product Mark. 

        "Promotional Materials" means collectively, the Active Promotional Materials and the Inactive Promotional Materials. 

        "Promotional Materials Artwork" means the images identified on Schedule 1.1(k) hereto. 

        "PTO" means the United States Patent and Trademark Office. 

        "Purchased Assets" means, collectively, the Tooling, Promotional Materials, Sales Training Materials, Applicable Permits, Product Records
and the Product Intellectual Property. 

        "Purchase Price" means the payments made by Purchaser to Seller under Section 2.6, consisting of the Upfront Payment, Milestone
Payments, Royalty Payments and Equity Payment; provided that for purposes of Section 10.1(e)(i) only, the Equity Payment shall be excluded from
the foregoing. 

        "Purchaser" has the meaning set forth in the Preamble of this Agreement. 

        "Purchaser Claim" has the meaning set forth in Section 10.1(a). 

        "Purchaser Indemnitees" has the meaning set forth in Section 10.1(a). 

        "Purchaser Losses" has the meaning set forth in Section 10.1(a). 

        "Purchaser Proprietary Information" has the meaning set forth in Section 8.1(b). 

        "Purchaser Representatives" means collectively, Purchaser, its Affiliates and its and their respective sublicensees. 

        "Purchaser Tax Obligations" has the meaning set forth in Section 10.1(c). 

        "Registrations" means the regulatory approvals, authorizations, licenses, applications, agreements, permits, INDs, NDAs and other
permissions held by Seller relating exclusively to the Product issued by Governmental Authorities in the Territory as set forth on  Schedule 1.1(l) hereto. 

8

   
        "Representatives" means, with respect to any Person, the directors, managers, employees, independent contractors, agents or consultants of
such Person. 

        "Retained Accounts Receivable" has the meaning set forth in Section 2.2(a). 

        "Royalty Payments" has the meaning set forth in Section 2.6(b)(ii). 

        "Royalty Term" has the meaning set forth in Section 2.6(b)(ii). 

        "Sales Training Materials" means those sales training modules which were used exclusively to train sales personnel to sell only the
Product. 

        "SEC" means the United States Securities and Exchange Commission. 

        "Seller" has the meaning set forth in the Preamble of this Agreement. 

        "Seller Brands" means the Trademarks, housemarks, tradenames, and trade dress owned, licensed, controlled or used by Seller, whether or
not registered, other than the Product Marks. 

        "Seller Brand License" has the meaning set forth in Section 8.2. 

        "Seller Claim" has the meaning set forth in Section 10.1(c). 

        "Seller Disclosure Schedule" means the disclosure schedules delivered by Seller to Purchaser in connection with this Agreement and
attached hereto (it being expressly agreed that disclosure of any item or matter under any Section or subsection in such Seller Disclosure Schedule, or in attachments
thereto, and documents referred to therein, shall, to the extent it is reasonably apparent, be deemed disclosure for all purposes). 

        "Seller Indemnitees" has the meaning set forth in Section 10.1(c). 

        "Seller Losses" has the meaning set forth in Section 10.1(c). 

        "Seller Proprietary Information" has the meaning set forth in Section 8.1(c). 

        "Seller Return Period" has the meaning set forth in Section 8.4(b). 

        "Statement of Allocation" has the meaning set forth in Section 8.9(b). 

        "Stock Purchase Agreement" means the stock purchase agreement in the form attached hereto as  Exhibit H. 

        "Straddle Period" means any Tax period beginning before the Closing Date and ending after the Closing Date. 

        "Supply Agreement" means the supply agreement in the form attached hereto as  Exhibit I. 

        "Tax" or "Taxes" means any and all taxes, assessments, levies, tariffs, amounts subject to
escheat, Liabilities arising under or as a result of the application of any "bulk sales" or similar Law, duties or other charges, or impositions in the nature of a tax (together with any and all
interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any applicable Governmental Authority. 

        "Tax Claims" shall have the meaning set forth in Section 10.1(a)(iii). 

        "Tax Period" means any period prescribed by any Governmental Authority for which a Tax Return is required to be filed or a Tax is required
to be paid or measured. 

        "Tax Return" means any report, return (including any information return), claim for refund, election, estimated Tax filing or payment,
request for extension, document, declaration or other information or filing required to be supplied to any applicable Governmental Authority with respect to Taxes, including attachments thereto and
amendments thereof. 

9

 

        "Territory" means the fifty (50) states of the United States of America, the District of Columbia and the Commonwealth of Puerto
Rico. 

        "Third Party(ies)" means any Person other than the Parties or their respective Affiliates. 

        "Third Party Prescription Data Service" means (i) any of the following selected by Purchaser in its sole discretion: IMS Health,
Verispan or Wolters Kluwer Health; or (ii) any other source which is mutually agreed by Seller and Purchaser. 

        "Tooling" means the tooling identified on Schedule 1.1(m). 

        "Trademark" means trademarks, service marks, certification marks, trade dress, internet domain names, trade names, identifying symbols,
designs, product names, company names, slogans, logos or insignia, whether registered or unregistered, and all common law rights, applications and registrations therefor, and all goodwill associated
therewith. 

        "Transactions" means the transactions contemplated by this Agreement and the Other Agreements. 

        "Transfer Taxes" means any and all transfer, documentary, sales, use, gross receipts, stamp, registration, value added, recording, escrow
and other similar Taxes and fees (including any penalties and interest) incurred in connection with the Transactions (including recording and escrow fees and any real property or leasehold interest
transfer or gains tax and any similar Tax). 

        "Transition Services Agreement" means that certain Transition Services Agreement between Seller and Purchaser, in the form attached hereto
as Exhibit J. 

        "Treasury Regulation(s)" means the regulations promulgated under the Code. 

        "Upfront Payment" has the meaning set forth in Section 2.6(a). 

        "Valid Claim" means an issued claim of an unexpired Patent that shall not have been withdrawn, canceled or disclaimed, or held invalid or
unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision. 

        "Website Artwork" means the images identified on Schedule 1.1(n) hereto. 

        1.2    Other Definitional Provisions.    

        (a)   When
a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated. 

        (b)   The
words "hereof," "herein,"
"hereto" and "hereunder" and words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. 

        (c)   The
terms defined in the singular have a comparable meaning when used in the plural, and vice versa. 

        (d)   Words
of one gender include the other gender. 

        (e)   References
to a Person are also to its successors and permitted assigns. 

        (f)    The
terms "dollars" and "$" mean United States dollars. 

        (g)   The
word "including" means "including without limitation" and the words
"include" and "includes" have corresponding meanings. 

10

 
ARTICLE II

PURCHASE AND SALE  

        2.1    Purchase and Sale of Purchased Assets.    On the Closing Date, subject to the terms and the conditions hereof
and in partial consideration of the Purchase Price paid or to be paid to Seller by Purchaser, Seller shall (a) sell, convey, transfer, assign and deliver to Purchaser, and Purchaser shall
purchase, take delivery of and acquire from Seller, all of Seller's right, title and interest in and to the Purchased Assets; and (b) provide Purchaser with the license rights set forth in
Section 2.5. 

        2.2    Excluded Assets.    The Parties acknowledge and agree that Seller is not selling, conveying, transferring,
delivering or assigning any rights whatsoever to the Excluded Assets to Purchaser, and Purchaser is not purchasing, taking delivery of or acquiring any rights whatsoever to the Excluded Assets from
Seller. Without limiting the foregoing, Purchaser expressly acknowledges it is not acquiring any rights whatsoever to: 

        (a)   any
accounts receivable (including any payments received with respect thereto on or after the Closing, unpaid interest accrued on any such accounts receivable and any
security or collateral related thereto) arising from sales of the Product by Seller to Third Parties (collectively, the "Retained Accounts Receivable");
and 

        (b)   any
Contracts, including the Contracts set forth on Schedule 2.2(b) (the "Excluded
Contracts"). 

        2.3    Assumed Liabilities.    As of the Closing Date, Purchaser shall assume and pay, perform or otherwise discharge,
in accordance with their respective terms and subject to their respective conditions thereof, only the following Liabilities (collectively, the "Assumed
Liabilities"): 

        (a)   Purchaser's
obligations under this Agreement and the Other Agreements; and 

        (b)   any
claims for Liability relating to the Product or the Business which arise from events or circumstances occurring on or after the Closing Date, other than
(i) any Liability for which Seller is
required to indemnify Purchaser under the Supply Agreement or the Distribution, Supply and Transition Agreement, or (ii) any Liability for Taxes for any Pre-Closing Tax Period. For
avoidance of doubt, if a claim for Liability arises from an event or circumstance that occurs on or after the Closing Date and alleges defects in the Product labeling, unless Seller is required to
indemnify Purchaser with respect to such claim and any Liability arising therefrom under the Supply Agreement or the Distribution, Supply and Transition Agreement, such claim and any Liability arising
therefrom shall be deemed an Assumed Liability; and 

        (c)   any
claims for Liability relating to the Product, Product Improvements and/or the Business for which Purchaser is required to indemnify Seller under this Agreement, the
Supply Agreement or the Distribution, Supply and Transition Agreement. 

        2.4    Excluded Liabilities.    Other than the Assumed Liabilities, Seller shall retain and shall be responsible for
paying, performing and discharging when due, and Purchaser shall not assume or have any responsibility for, any Liabilities of Seller of any kind, character or description whatsoever (the
"Excluded Liabilities"), including: 

        (a)   any
Liabilities exclusively or primarily relating to or arising out of the Excluded Assets or Excluded Contracts; 

        (b)   any
claims for Liability relating to the Product or the Business which arise from events or circumstances occurring prior to the Closing Date, including the litigation
set forth on Schedule 4.6. For avoidance of doubt, if a claim for Liability arises from an event or circumstance that occurs prior to the Closing
Date and alleges defects in the Product labeling, such claim and any Liability arising therefrom shall be deemed an Excluded Liability; 

        (c)   Seller's
obligations under this Agreement and the Other Agreements; 

11

 

        (d)   any
claims for Liability relating to the Product or the Business for which Seller is required to indemnify Purchaser under this Agreement, the Supply Agreement or the
Distribution, Supply and Transition Agreement; and 

        (e)   any
Liabilities related to (i) income or similar Taxes of Seller, (ii) all other Taxes relating to the Business or the Purchased Assets attributable to any
Pre-Closing Tax Period, or
(iii) Taxes of any other Person for which Seller is liable pursuant to any agreement, by Law, or otherwise. 

        2.5    Unblocking License and Covenant Not to Sue.    

        (a)   Seller
hereby grants to Purchaser a worldwide, royalty-free, irrevocable, non-exclusive, non-transferable (except as may be
assignable pursuant to Section 11.1) and sublicensable license to practice inventions claimed in the Intermediate Patents solely to make, have made, sell, offer for sale, and import the API for
use in Product and Product Improvements that are Distributed by Purchaser Representatives. Seller further covenants that it will not grant any license to any Third Party to practice inventions claimed
in the Intermediate Patents to make, have made, sell, offer for sale or import the API for use in Product or Product Improvements for sale or distribution in the Territory. 

        (b)   Seller
hereby grants to Purchaser a worldwide, royalty-free, irrevocable, non-exclusive, non-transferable (except as may be
assignable pursuant to Section 11.1) and sublicensable license to the Manufacturing Know-How for the sole purpose of manufacturing or having manufactured the API, the Product and
Product Improvements for Distribution by Purchaser Representatives in the Territory. Seller further covenants that it will not grant any license to any Third Party to the Manufacturing
Know-How for the purpose of manufacturing or having manufactured the API, the Product or Product Improvements for sale or distribution in the Territory. 

        (c)   Seller
hereby grants to Purchaser a worldwide, royalty-free, irrevocable, non-exclusive, non-transferable (except as may be
assignable pursuant to Section 11.1) and sublicensable license to use the Development Know-How for the sole purpose of conducting the Business. Seller further covenants that it will
not grant any license to any Third Party to use the Development Know-How for the purpose of conducting the Business. 

        (d)   Seller
hereby grants to Purchaser a royalty-free, irrevocable, exclusive, non-transferable (except as may be assigned pursuant to
Section 11.1) and sublicensable right to use the Promotional Materials Artwork for the sole purpose of conducting the Business. Seller further grants to purchaser a royalty-free,
irrevocable, exclusive, non-transferable (except as may be assigned pursuant to Section 11.1) and sublicensable right to use the Website Artwork solely in connection with the
website, www.lotronex.com. 

        (e)   Notwithstanding
Seller's covenant not to grant any license to a Third Party to practice the Intermediate Patents, the Manufacturing Know-How and the
Development Know-How (collectively, the "Licensed Intellectual Property"), as more particularly described in the last sentence of each
Sections 2.5(a), 2.5(b) and 2.5(c), nothing in this Agreement shall be construed as: 

          (i)  A
requirement that Seller shall file any patent application, secure any patent, or maintain any patent in force; 

         (ii)  An
obligation that Seller bring or prosecute actions or suits against Third Parties for infringement; or 

        (iii)  Granting
by implication, estoppel, or otherwise, any licenses or rights under Patents of Seller, other than the Intermediate Patents, regardless of whether such other
Patents are dominant of or subordinate to any Intermediate Patent. 

        (f)    Seller
agrees that it and its Affiliates will not sue, assert any claim for infringement or otherwise take any action under any Patents or Know-How of Seller
or its Affiliates, that exist as 

12

 

of
the Closing Date and are used by Seller or its Affiliates for the conduct of the Business but for which no rights were granted by Seller to Purchaser under this Agreement or the Other Agreements to
prevent Purchaser and its Affiliates and their respective permitted assignees, or sublicensees from making, having made, using, offering for sale, selling or importing the Product and Product
Improvements in the Territory. Seller shall require as a condition precedent to any sale, license, assignment or transfer of its rights to any such Intellectual Property that the purchaser, licensee,
assignee or transferee agree to be bound by the requirements of this Section 2.5(f) as if such Third Party was Seller. 

        (g)   Purchaser
shall promptly provide Seller with written notice and copy of any sublicense granted or rights transferred to any Third Party as permitted under this
Section 2.5. 

        (h)   The
Licensed Intellectual Property shall continue to be owned by Seller and is licensed to Purchaser only in accordance with this Section 2.5. Any rights to the
Licensed Intellectual Property not expressly granted by Seller pursuant this Section 2.5 are hereby reserved by Seller. For the avoidance of doubt, Seller shall have the right to use the
Licensed Intellectual Property for all purposes, other than for the conduct of the Business, subject to (i) Seller's obligations hereunder, (ii) Seller's obligations under the Other
Agreements, and (iii) Section 8.7 of this Agreement. 

        2.6    Purchase Price.    

        (a)   In
consideration of the sale, assignment, conveyance, and delivery of the Purchased Assets and the license rights granted under this  Article II, Purchaser shall, upon the Closing, assume the Assumed
Liabilities and pay to Seller an upfront payment of Eighty Million Dollars
($80,000,000) (the "Upfront Payment"). The Upfront Payment is non-refundable, except as set forth in Section 9.2, and not creditable
against future milestone payments, royalties or other payments to the Purchaser under this Agreement or any Other Agreement. The Upfront Payment shall be delivered to the Escrow Agent on the Execution
Date for deposit into an escrow account (the "Escrow Account"). Subject to Section 9.2, the Upfront Payment shall be held pursuant to the
provisions of the Escrow Agreement and shall be released to Seller at the Closing. [***]: [***] percent ([***]%) to
[***] and [***] percent ([***]%) to [***]. 

        (b)   In
addition to the Upfront Payment, as part of the Purchase Price for the Purchased Assets, Purchaser shall, upon the Closing, pay to Seller the Milestone Payments and
Royalty Payments and issue to Seller Common Stock, as provided below: 

        (i)    Milestone Payment.    Purchaser shall pay to Seller the following sales performance milestone payments (each a
"Milestone Payment") within thirty (30) days of the occurrence of each of the following milestone event, calculated with respect to Net Sales
occurring after the Closing Date ("Milestone Event"): 

	 
	 	Milestone Event
	 	Milestone Payment

	1. 	 	First time aggregate Net Sales equal [***][***] Dollars ($[***])	 	[***] Dollars ($[***])
	2.	 	First time aggregate Net Sales equal [***] Dollars ($[***])	 	[***] Dollars ($[***])
	3.	 	First time Annual Net Sales equal [***] Dollars ($[***])	 	[***] Dollars ($[***])
	4.	 	First time Annual Net Sales equal [***] Dollars ($[***])	 	[***] Dollars ($[***])
	5.	 	First time Annual Net Sales equal [***] Dollars ($[***])	 	[***] Dollars ($[***])

*** 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

 

Purchaser
shall notify Seller in writing promptly, but in no event later than [***], after the achievement of each Milestone Event and each Milestone Payment above shall be due
and payable within [***] after the achievement of each corresponding Milestone Event. 

Notwithstanding
the foregoing, no more than [***] Milestone Payment shall be required to be paid in any single [***]. To the extent that more than
[***] Milestone Payment would otherwise be required to be paid by Purchaser in any single [***], the first Milestone Payment (e.g., Milestone
Payment 1) shall be due and payable by Purchaser as provided above and the required payment date for any subsequent Milestone Payment(s) (e.g., Milestone Payment 2 through
5) shall be automatically delayed until the date that is [***] after the last day of the [***] in which a prior Milestone Payment has been paid.
As additional clarification, each Milestone Payment will be paid only one time. For example, with respect to Milestones 1 and 2 only above, if Net Sales after Closing reach
[***] Dollars ($[***]) on March 31, 2008, Purchaser would pay a [***] Dollar ($[***]) Milestone
Payment to Seller no later than [***]. If, between April 1, 2008 and November 15, 2008, Net Sales are equal to [***] Dollars
($[***]), Purchaser would pay the [***] Dollar ($[***]) Milestone Payment to Seller no later than [***]
for achievement of the second Milestone Event. For example, with respect to Milestones 3, 4 and 5 only above, if Net Sales are [***] Dollars ($[***])
between January 1, 2009 and December 31, 2009, a [***] Dollar ($[***]) Milestone Payment would be due to Seller and paid by Purchaser in
2009 on a date that is no later than [***] after the achievement of Milestone Event 3 (unless Milestone Payment 2 was paid in [***], in which case
Milestone Payment 3 would be paid no later than [***]), and a [***] Dollar ($[***]) Milestone Payment (i.e., Milestone
Payment 4) would be due to Seller and paid by Purchaser no later than [***] (unless Milestone Payment 3 was delayed until [***], in which case
Milestone Payment 4 would be paid no later than [***]). 

Further,
the Milestone Payments set forth in this Section 2.6(b)(i) shall not be refundable and shall not be creditable against future milestone payments, royalties or other payments to the
Purchaser under this Agreement or any Other Agreement. 

        (ii)    Royalty Payment.    Purchaser shall pay to Seller a royalty on Annual Net Sales at the royalty rate set forth
below ("Royalty Payment"), on an incremental basis, from the Closing Date through the Royalty Term: 

	Annual Net Sales
	 	Royalty Rate

	On Annual Net Sales less than or equal to [***] Dollars ($[***])	 	[***] percent ([***]%)
	On Annual Net Sales greater than [***] Dollars ($[***])	 	[***] percent ([***]%)

The
Royalty Payment shall be determined by aggregating Net Sales in each Calendar Quarter and the Calendar Year to date during the Royalty Term of each Product and each Product Improvement and the
Royalty Payment shall be paid to Seller no later than [***] after the end of each Calendar Quarter. Each Royalty Payment shall be accompanied by a written report describing the
Net Sales during the relevant Calendar Quarter and the Calendar Year to date in the Territory, on a Product-by-Product basis and Product
Improvement-by-Product Improvement basis, specifying the gross sales and Net Sales in the Territory, including an accounting of deductions taken in the calculation of Net Sales
and the royalties payable ("Payment Report"). In addition to the Payment Report, Purchaser shall provide Seller on the fifth (5th)
Business Day of each month, a non-binding estimate of the gross sales and Net Sales for the immediately preceding month. For example, if the aggregate Net Sales of a 

*** 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

 

Product
is [***] Dollars ($[***]) per month in Calendar Year 2008, the royalty rate for the first Calendar Quarter in 2008 would be
[***] percent ([***]%). In the second Calendar Quarter, the first [***] Dollars ($[***]) would be
calculated at the royalty rate of [***] percent ([***]%) and the remaining [***] Dollars
($[***]) would be calculated at the royalty rate of [***] percent ([***]%). The royalty rate for the third and fourth
Calendar Quarter for Net Sales of such Product would be calculated at [***] percent ([***]%). The royalty rate for such Product would recommence
at [***] percent ([***]%) for the first Calendar Quarter of 2009 until Net Sales for such Product reach [***] Dollars
(US$[***]). 

The
Royalty Payment is payable, on a Product-by-Product and Product Improvement-by-Product Improvement basis, until (i) in the case of any
Product, the later to occur of (A) the date of the expiration of the last Valid Claim of the Product Patent Rights (other than the Patents identified on  Schedule 4.5) covering such Product, or
(B) the date of the expiration of regulatory/data exclusivity for such Product in the Territory,
or (ii) in the case of any Product Improvement, the date of the expiration of the last Valid Claim, if any, of the Product Patent Rights (other than the Patents identified on  Schedule 4.5)
covering such Product Improvement. Upon occurrence of either date referenced above for a particular Product or Product Improvement
(the "Expiration"), Purchaser shall pay [***] percent ([***]%) of the Royalty Payment above on
such Product or Product Improvement until the [***] of (A) [***] or (B) the date on which one or more Generic Products comprises,
individually or together, [***] percent ([***]%) or more of the total volume of alosetron HCl sales in the Territory, as demonstrated by
prescription data from a Third Party Prescription Data Service, which ever occurs earlier (the earliest of the foregoing for a particular Product or Product Improvement, the
"Royalty Term"). For purposes of clarification, (1) if the Royalty Rate for a Product or Product Improvement has been reduced as set forth above,
the Royalty Rate for all other Products or Product Improvements remains at the original Royalty Rate until one of the foregoing events occur with respect to such Product or Product Improvement; and
(2) any new patents or patent applications Controlled by Purchaser, other than the Product Patent Rights, which may issue after the Closing Date, covering any Product Improvement shall not
extend the Expiration for such
Product Improvement beyond the expiration of the last Valid Claim of the Product Patent Rights (other than the Patents identified on  Schedule 4.5). 

        (iii)    Common Stock Issuance.    On the Execution Date, Seller and Purchaser shall enter into the Stock Purchase
Agreement and, on the Closing Date, subject to the accuracy of the representations and warranties of Seller set forth in the Stock Purchase Agreement with respect to federal and state securities laws,
Purchaser shall deliver to Seller a stock certificate, issued in the name of Seller or Seller's designee, evidencing One Million Two Hundred Fifty Thousand (1,250,000) shares of Common Stock, subject
to adjustment as set forth in the Stock Purchase Agreement (the "Equity Payment"). 

        2.7    Risk of Loss.    Except as otherwise provided in the Distribution, Supply and Transition Agreement, until the
Closing, any loss of or damage to the Purchased Assets from fire, flood, casualty or any other similar occurrence shall be the sole responsibility of Seller. Except as otherwise provided in the
Distribution, Supply and Transition Agreement, at the Closing, title to the Purchased Assets shall be transferred to Purchaser. Subject to Section 3.3, below, after the Closing, Purchaser shall
bear all risk of loss associated with the Purchased Assets. 

*** 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

  

        2.8    Audits.    

        (a)    Records.    Purchaser shall keep full, true and accurate books of account containing the particulars of Net
Sales and the calculation of royalties. Such books and records must be maintained for the period required by Applicable Law or for [***] after the end of the calendar year to
which they pertain, whichever is longer. These books and records must be made available for examination in accordance with this Section 2.8 for [***] after the end of
the calendar year to which they pertain. To the extent that Purchaser exercises its rights hereunder through a sublicensee, Purchaser shall maintain with its books of account such reports as it
receives from such sublicensee, and use reasonable efforts to obtain records and information consistent with that which is required under this Agreement. In addition, with respect to sublicensees,
Purchaser shall notify Seller in the event Purchaser conducts an audit of one of its sublicensees and the outcome of such audit reveals an underpayment or overpayment from such sublicensee which, in
turn, resulted in an underpayment or overpayment by Purchaser to Seller. 

        (b)    Appointment of Auditor.    Seller may appoint an internationally-recognized independent accounting firm
reasonably acceptable to Purchaser to inspect the relevant books of account, records and reports of Purchaser solely to verify any reports or statements provided under this Article II, or
Royalty Payments or Milestone Payments paid under this Article II, by Purchaser to Seller. The independent accounting firm (and any individuals, if applicable) appointed to perform the
examination under this Agreement must execute a confidential disclosure agreement with Purchaser, or otherwise be subject to terms
governing non-use and non-disclosure of information that Purchaser has agreed in writing are acceptable. 

        (c)    Procedures for Audit.    Seller may exercise its right to have Purchaser's relevant books, records and reports
examined (i) no more than [***] in any period of [***] consecutive quarters, (ii) only [***] with respect to
records covering any specific period of time, and (iii) only with respect to the immediately preceding [***]. Upon at least [***] prior written
notice from Seller, and at the expense of Seller (except as otherwise provided herein), Purchaser is required to make its books, records and reports available for inspection, but only during regular
business hours, only at such place or places where such records are customarily kept, and only at such times as may be mutually agreed upon by the Parties. 

        (d)    Audit Report.    The independent accountant will be instructed to provide an audit report containing its
conclusions regarding the audit, and specifying whether the amounts paid were correct, and, if incorrect, the amount of any underpayment or overpayment. The independent accountant further will be
instructed to redact any proprietary information of Purchaser not relevant to the calculation of royalties. The audit report will be made available to both Parties but shall be deemed to be
Confidential Information of Purchaser, and used by Seller only for purposes germane to this Section 2.8. Absent error, the results of the audit shall be binding on both Parties. Purchaser shall
have [***] from the release of the audit report to send written notice to Seller that Purchaser disputes the results of such audit due to error. Within
[***] after the date of such notice from Purchaser, the Parties will seek to resolve such dispute by good faith negotiation between the Senior Vice President of U.S.
pharmaceuticals, Research Triangle Park at Seller or his/her designee and Chief Executive Officer of Purchaser or his/her designee (the "Executives").
The decision of the Executives shall be binding on both Parties. 

        (e)    Underpayment and Overpayment.    After review of the independent accountant's audit report and, if applicable,
resolution of any dispute concerning the determinations in such report as provided in Section 2.8(d) above: (i) if there is an underpayment by Purchaser for the period in question, then
Purchaser shall pay Seller the full amount of that underpayment, and (ii) if there is 

*** 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.

16

 

an
overpayment by Purchaser for the period in question, then Seller shall provide to Purchaser a credit against future payments (such credit equal to the full amount of that overpayment), or, if
Purchaser is not obligated to make any future payments to Seller, then Seller shall pay to Purchaser the full amount of that overpayment. Any payments due under this Section 2.8 shall be paid
within [***] after the [***] of the date that the final audit report is provided to Seller and Purchaser or, if applicable, resolution of any dispute
concerning the determinations in such report, and any underpayments or overpayments due to either Party shall include interest at the rate provided in Section 2.9(b). Seller shall pay all costs
and expenses of each audit under this Section 2.8; provided, however, that if the total amount of
any underpayment exceeds [***] percent ([***]%) of the amount previously paid by Purchaser for the period subject to audit (as long as that
period is at least four (4) consecutive quarters), then Purchaser shall pay all costs and expenses of the audit. 

        2.9    Financial Terms.    

        (a)    Mode of Payment.    All payments due under this Agreement from Purchaser to Seller shall be made in U.S.
Dollars via wire transfer of immediately available funds to an account to be identified by Seller. 

        (b)    Late Payments.    All past due amounts owed by Purchaser under this Agreement shall bear interest at the rate
of [***] percent ([***]%) per annum; provided, that in no event shall such rate exceed the
maximum legal annual interest rate. The payment of such interest shall not limit Seller from exercising any other rights it may have as a consequence of any late payment. 

ARTICLE III

CLOSING  

        3.1    Closing.    Upon the terms and subject to the conditions of this Agreement, the Closing shall be held on a date
to be specified by the Parties (the "Closing Date") after the later of (i) satisfaction or waiver of all of the conditions set forth in  Article VII, or (ii) January 4, 2008, at a mutually convenient location agreed to by the Parties. The Parties will exchange (or
cause to be exchanged or released) at the Closing, the Upfront Payment, the Equity Payment, agreements, instruments, certificates and other documents, and do, or cause to be done, all of the things
respectively required of each Party as specified in Section 3.2. 

        3.2    Transactions at Closing.    At the Closing, subject to the terms and conditions hereof: 

        (a)   Seller
shall deliver or cause to be delivered to Purchaser: 

          (i)  executed
counterparts of the Assignment of Copyrights, Assignment of Product Domain Names, Assignment of Patents, Assignment of Trademarks, Bill of Sale, and Transition
Services Agreement to which it is a party; 

         (ii)  a
letter from Seller to the FDA, duly executed by Seller, transferring the rights to the Registrations to Purchaser; 

        (iii)  a
letter from Seller to the FDA, Division of Drug Marketing, Advertising and Communication, notifying of the transfer of the Registrations to Purchaser; 

        (iv)  a
certificate of a duly authorized officer of Seller certifying as to the matters set forth in Sections 7.2(a) and 7.2(b) and the accuracy of the representations
and warranties of Seller set forth in the Stock Purchase Agreement with respect to federal and state securities laws; 

*** 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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         (v)  an
executed copy of an Internal Revenue Service Form W-9 and an executed copy of a non-foreign status FIRPTA certificate prepared pursuant
to Treasury Regulation Section 1.1445-2(b)(2); and 

        (vi)  such
other documents and instruments as may be reasonably necessary to effect or evidence the Transactions. 

        For
the avoidance of doubt, Seller shall have previously delivered to Purchaser executed copies of the Distribution, Supply and Transition Agreement and Supply Agreement, each dated as
of the Execution Date. 

        (b)   Purchaser
shall deliver or cause to be delivered to Seller: 

          (i)  instruction
to Escrow Agent for release of the Upfront Payment to Seller; 

         (ii)  a
stock certificate, issued in the name of Seller or Seller's designee, evidencing the Equity Payment; 

        (iii)  executed
counterparts of the Assignment of Copyrights, Assignment of Product Domain Names, Assignment of Patents, Assignment of Trademarks, Bill of Sale, and
Transition Services Agreement to which it is a party; 

        (iv)  a
letter from Purchaser to the FDA duly executed by Purchaser, assuming responsibility for Registrations from Seller; 

         (v)  a
certificate of a duly authorized officer of Purchaser certifying as to the matters set forth in Sections 7.3(a) and 7.3(b) and the accuracy of the
representations and warranties of Purchaser set forth in the Stock Purchase Agreement with respect to federal and state securities laws; and 

        (vi)  such
other documents and instruments as may be reasonably necessary to effect or evidence the Transactions. 

        For
the avoidance of doubt, Purchaser shall have previously delivered to Seller executed copies of the Distribution, Supply and Transition Agreement and Supply Agreement, each dated as
of the Execution Date. 

        3.3    Delivery of Purchased Assets by Seller.    To the extent not already delivered to Purchaser, as soon as
practicable following the Closing (and no more than [***] thereafter unless otherwise mutually agreed by the Parties), Seller shall deliver to Purchaser the Tooling,
Promotional Materials, Applicable Permits, Product Records and the Product Intellectual Property. Seller shall continue to bear the risk of loss and maintain adequate insurance (or
self-insurance) against loss associated with the Purchased Assets until they have been delivered to Purchaser or its common carrier. 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER  

        Seller hereby represents and warrants to Purchaser, as of the Execution Date and as of the Closing Date, as follows (except to the extent a separate date is
specified within the representation and warranty, in which case, the date set forth therein shall apply): 

        4.1    Organization.    

        (a)   SB
Corp is a corporation duly organized, validly existing and in good standing under the laws of Commonwealth of Pennsylvania. SB Corp is in good standing in each
jurisdiction where such qualification is required except for any jurisdiction where failure to so qualify would not have a Material Adverse Effect. SB Corp has all requisite corporate power and
authority to own, lease and operate, as applicable, the Purchased Assets and the Business as now being conducted. 

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        (b)   GGL
is a corporation duly organized, validly existing and in good standing under the laws of England. GGL is in good standing in each jurisdiction where such
qualification is required except for any jurisdiction where failure to so qualify would not have a Material Adverse Effect. GGL has all requisite corporate power and authority to own, lease and
operate, as applicable, the Purchased Assets and the Business as now being conducted. 

        4.2    Due Authorization.    Each Seller has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement and the Other Agreements (as applicable), and the execution and delivery of this Agreement and the Other Agreements (as applicable), the performance of all
of its obligations hereunder and thereunder have been duly authorized by each Seller and, to the extent required by Law, contract or otherwise, its stockholders. No other proceedings on the part of SB
Corp or GGL are necessary to authorize this Agreement or the Other Agreements (as applicable). 

        4.3    No Conflicts; Enforceability.    The execution, delivery and performance of this Agreement and the Other
Agreements (as applicable) by each Seller (a) are not prohibited or limited by, and will not result in the breach of or a default under, any provision of the certificate of incorporation or
bylaws of such Seller, (b) assuming all of the consents, approvals, authorizations and permits described in Section 4.7 have been obtained and all the filings and notifications described
in Section 4.7 have been made and any waiting periods thereunder have terminated or expired, does not conflict with any Law applicable to Seller, and (c) does not conflict with, result
in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or
cancel, or require any notice, consent or waiver under, any agreement or instrument binding on Seller or any applicable order, writ, injunction or decree of any court or applicable Governmental
Authority to which Seller is a party or by which Seller is bound or to which any of its Assets is subject, including the Purchased Assets, except in the case of clauses (b) and (c) for
such conflicts, breaches, defaults, accelerations or rights as would not have, individually or in the aggregate, a Material Adverse Effect. This Agreement and the Other Agreements have been duly
executed and delivered by each Seller (as applicable), and constitute the legal, valid and binding obligations of each Seller, enforceable against such Seller in accordance with their respective
terms, except as enforceability may be limited or affected by applicable bankruptcy, insolvency, moratorium, reorganization or other Laws of general application relating to or affecting creditors'
rights generally. 

        4.4    Title and Sufficiency of Assets.    

        (a)   Seller
owns, leases, licenses or has the right to use the Purchased Assets free and clear of all Encumbrances other than the Permitted Encumbrances, and upon the
consummation of the Transactions, Purchaser shall acquire good and marketable title to, and all right, title and interest of Seller in and to, the Purchased Assets, free and clear of all Encumbrances
other than the Permitted Encumbrances. 

        (b)   The
Purchased Assets (other than the Purchased Assets set forth on Schedule 4.4(b)), together with the license
rights granted under Sections 2.5(a), 2.5(b), 2.5(c), and 2.5(d) constitute all of the assets and rights (i) Controlled by Seller that are currently used by Seller in connection with the
conduct of the Business or (ii) that are otherwise necessary to conduct the Business; however, for the avoidance of doubt, the representation and warranty included in this Section 4.4(b)
excludes any and all assets and capabilities that an established and active company in the pharmaceutical business should customarily be capable of providing in connection with the operation of a
business such as the Business in the Territory or the Manufacture and/or Distribution of a product such as the Product in the Territory, including internal and external infrastructure, manufacturing
equipment and facilities, business permits and licenses from Governmental Authorities, professional services, trade and distribution networks, personnel, facilities, factories and other property,
promotional and brand strategies, and financing. For the 

19

 

further
avoidance of doubt, such representation and warranty does not apply with respect to Applicable Permits, the sufficiency of which are addressed in Section 4.10. 

        (c)   Except
with respect to those Purchased Assets set forth on Schedule 4.4(b), all tangible assets that are part of
the Purchased Assets are in good operating condition and repair (normal wear and tear excepted) and are usable in the ordinary course of business. 

        (d)   For
the avoidance of doubt, other than the representation and warranty under Section 4.4(a), Seller specifically disclaims any representation and warranties with
respect to the Purchased Assets set forth on Schedule 4.4(b). 

        4.5    Intellectual Property.    For purposes of this Section 4.5, the term "Product Intellectual Property"
means the Product Patent Rights, Product Copyrights, Product Domain Names, Product Marks and Product Trade Dress and excludes "Product Know-How." 

        (a)   Except
as set forth on Schedule 4.5 of the Seller Disclosure Schedule, (i) the Product Patent Rights,
Product Copyrights, and Product Marks are, to Seller's Knowledge, enforceable and valid and (ii) none
of the Product Intellectual Property has been or is the subject of (A) any pending adverse judgment, injunction, order, decree or agreement restricting (x) its use in connection with the
Distribution and Manufacture of the Product or (y) assignment or license thereof by Seller, or (B) to Seller's Knowledge, any threatened litigation or claim of infringement threatened or
made in writing or any pending litigation to which Seller is a party. 

        (b)   Except
as set forth on Schedule 4.5 of the Seller Disclosure Schedule, (i) neither Seller nor any of its
Affiliates have granted any licenses to the Product Intellectual Property to Third Parties, (ii) neither Seller nor any of its Affiliates, nor to Seller's Knowledge, any other Person, is party
to any agreements with Third Parties that limit or restrict use of the Product Intellectual Property for the Distribution and Manufacture of the Product or require any payments for the Distribution or
Manufacture of the Product, and (iii) no other Person, including any present or former employee or consultant of Seller, has any joint ownership or royalty interest in the Product Intellectual
Property (other than grant of rights to the United States government pursuant to the Bayh-Dole Act). 

        (c)   Seller
has not received written notice of any misappropriation or infringement of any of the Product Intellectual Property or Intermediate Patents by any Person and, to
the Knowledge of Seller, no Third Party has otherwise engaged in any such material misappropriation or infringement of any of the Product Intellectual Property or Intermediate Patents. Seller has not
received written notice from any Person that the use of the Product Intellectual Property or Intermediate Patents for the Distribution or Manufacture of Product has infringed or misappropriated the
intellectual property of any Third Party (i) in the Territory or (ii) outside the Territory in a manner that would limit, hinder or otherwise negatively affect the conduct of the
Business in the Territory. 

        (d)   Seller
has not received written notice of any misappropriation or infringement of any of the Product Know-How by any Person and, to the Knowledge of Seller,
no Third Party has otherwise engaged in any such material misappropriation or infringement of any of the Product Know-How. Seller has not received written notice from any Person that the
use of the Product Know-How for the Distribution or Manufacture of Product has infringed or misappropriated the intellectual property of any Third Party (i) in the Territory or
(ii) outside the Territory in a manner that would limit, hinder or otherwise negatively affect the conduct of the Business in the Territory. 

        (e)   Except
as set forth on Schedule 4.5, all issuance, renewal, maintenance and other payments that are due with
respect to the Product Intellectual Property have been paid by or on behalf of Seller. 

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        (f)    Seller
has not received written notice of any declared or threatened inventorship challenges or interferences with respect to any Product Patent Rights. 

        (g)   Except
as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, Seller and its Affiliates have taken Commercially
Reasonable Efforts to maintain in confidence all Product Know How that is not in the public domain. 

        (h)   The
Product Patent Rights constitute all of the Patents Controlled by Seller that are used exclusively by Seller or its Affiliates for the conduct of the Business. 

        (i)    The
Product Copyrights constitute all of the copyrights Controlled by Seller that are used exclusively by Seller or its Affiliates for the conduct of the Business. 

        (j)    The
Product Domain Names constitute all of the domain names and websites Controlled by Seller that are used exclusively by Seller or its Affiliates for the conduct of
the Business. 

        (k)   The
Product Know-How constitutes all of the Know-How Controlled by Seller that is used exclusively by Seller or its Affiliates for the conduct of
the Business. 

        (l)    The
Product Marks constitute all of the Trademarks Controlled by Seller that are used exclusively by Seller or its Affiliates for the conduct of the Business. 

        4.6    Litigation.    Except as set forth on Schedule 4.6 of
the Seller Disclosure Schedule, there is no Action pending or, to Seller's Knowledge, threatened (a) related to the Product, the Business or the Transactions, (b) that would have a
Material Adverse Effect, or (c) that would prevent or delay the consummation by Seller of the Transactions or affect the legality, validity or enforceability of this Agreement or the Other
Agreements. 

        4.7    Consents.    Except for the requisite filings under the HSR Act and the expiration or termination of the
waiting period thereunder, the letter to the FDA contemplated by Section 8.6(c), any applicable filings required under the Exchange Act, any applicable Blue Sky Laws and the rules and
regulations of the SEC, and as may be necessary as a result of any facts or circumstances relating solely to Purchaser, no notice to, filing with, authorization of, exemption by, or consent of, any
Person, including any Governmental Authority, is required for Seller to consummate the Transactions, except where the failure to make such filings or notifications, or obtain such consents, approvals,
authorizations or permits, would not, individually or in the aggregate, have a Material Adverse Effect. 

        4.8    Taxes.    

        (a)   All
Tax Returns with respect to the Business and the Purchased Assets have been filed in a timely manner (within any applicable extension periods), all such Tax Returns
are true and complete in all material respects, and all Taxes shown to be due on such Tax Returns have been paid in full or will be timely paid in full by the due date thereof, except where failure to
file such Tax Return or pay such Taxes would not have a Material Adverse Effect. No written claims related to Taxes have been asserted with respect to the Business or the Purchased Assets. There are
no Encumbrances for Taxes upon the Purchased Assets, and Seller has no Knowledge of any reasonable basis for the assertion of any such claims related to Taxes which, if adversely determined, would
result in any such Encumbrances. 

        (b)   Seller
is not a "foreign person" as defined in Section 1445(f)(3) of the Code. The transactions contemplated herein are not subject to the tax withholding
provisions of Section 3406 of the Code or of Subchapter A of Chapter 3 of the Code or of any other provision of law. 

        4.9    Compliance with Laws.    Except to the extent non-compliance would not have a Material Adverse
Effect, the Registrations required for the Distribution of the Product in the Territory are in full force and effect. Except to the extent that it would not have a Material Adverse Effect, the
Business is conducted by Seller in compliance with all applicable permits, government licenses, registrations, approvals, concessions, franchises, authorizations, orders, injunctions, decrees, Laws, 

21

 

regulations,
guidance and guidelines, including the Act and the PDMA. Seller has not received any written notice to the effect that, or otherwise been advised that, it is not in compliance with any of
such permits, government licenses, registrations, approvals, concessions, franchises, authorizations, orders, injunctions, decrees, laws, regulations, guidance or guidelines, including the Act or the
PDMA. 

        4.10    Regulatory Matters.    

        (a)   All
existing Registrations held by Seller as of the date of this Agreement are set forth in Schedule 1.1(k) and
are in full force and effect. Seller is the sole and exclusive owner of the Registrations. To the Knowledge of Seller, the Applicable Permits included in the Purchased Assets constitute all of the
permits, approvals, licenses, franchises or authorizations from any applicable Governmental Authority held by Seller, that are used exclusively for the Product or the Business in the Territory. 

        (b)   To
Seller's Knowledge, the Distribution of the Product by Seller in the Territory has been conducted in material compliance with the Registrations and all applicable
Laws, including the Act and the PDMA. 

        (c)   Seller
has not received any written notice or, to Seller's Knowledge, other notice of proceedings from any applicable Governmental Authority alleging that the Product or
any of the Purchased Assets or the ownership, Manufacturing or Distribution is in violation of any applicable Law during the period between June 7, 2002 and the Execution Date, or at any time
prior to the Execution Date to the extent still active or pending, including (i) any FDA Form 483's with respect to the Product that would have a Material Adverse Effect; (ii) any
FDA Notices of Adverse Findings with respect to the Product; or (iii) any warning letters from the FDA or any other applicable Governmental Authority with respect to the Product. 

        (d)   Except
as could not have a Material Adverse Effect on the Business, there has not been any occurrence of any product recall, market withdrawal or lot replacement
conducted by or on behalf of Seller concerning the Product in the United States or any product recall, market withdrawal or lot replacement conducted by or on behalf of any entity as a result of any
alleged defect in the Product in the United States during the period between [***] and the Execution Date, or at any time prior to the Execution Date to the extent still active
or pending. The Product is approved for commercialization in the United States pursuant to 21 CFR 314 subpart H. To Seller's Knowledge, Seller has made available to Purchaser every complaint
and notice of alleged defect or adverse reaction with respect to the Product in the Territory that has been received in writing by Seller and its Affiliates or that has been orally transmitted to and
recorded by Seller and its Affiliates, other than the litigation set forth on Schedule 4.6. 

        (e)   The
NDA included in the Purchased Assets is the only regulatory approval necessary from the FDA for Seller to Distribute the Product and conduct the Business as
conducted as of the Execution Date. 

        (f)    Seller
has completed and filed all annual or other reports required by the FDA in order to maintain the Registrations, except for the most recent filing not yet due. 

        (g)   Schedule 4.10(g) of the Seller Disclosure Schedule sets forth a complete list of all post-marketing
commitments as may be necessary or required by any applicable Governmental Authority to maintain the NDA and any other Registrations relating to the Product. 

        4.11    Financial Statements; Liabilities; Absence of Changes.    

        (a)   Schedule 4.11 sets forth the "Statements of Net Sales and Product
Contribution" for the Products for the years ended [***] and the period [***] through [***],
collectively, the "Financial  

*** 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.

22

 

 Statements." The Financial Statements have been prepared in accordance with Seller's accounting policies applied on a consistent basis, which are in accordance with GAAP and
fairly present, in all material respects, as of the dates thereof and for the periods then ended the product contribution (as described therein) of Seller's business. 

        (b)   To
Seller's Knowledge, Seller does not have any Liabilities relating to the Business, whether accrued, absolute or contingent (including Liabilities as guarantor or
otherwise with respect to obligations of others or Liabilities for Taxes due or contingent or potential Liabilities relating to activities of Seller with respect to the operation of the Business prior
to the Closing), except Liabilities incurred in the ordinary course of business of Seller consistent with the terms of this Agreement. 

        (c)   Since
the date of the Financial Statements, (i) there has not been any Material Adverse Effect, (ii) Seller has caused the Business to be conducted in the
ordinary course, and (iii) Seller has not mortgaged, pledged or subjected to any Encumbrance (other than Permitted Encumbrance) any Purchased Asset. 

        4.12    Inventory.    

        (a)   Since
January 1, 2007, Seller has not materially altered its activities and practices with respect to inventory levels of Product maintained at the wholesale,
chain, institutional or retail levels. 

        (b)   Schedule 4.12(b) of the Seller Disclosure Schedule sets forth, on a monthly basis, the returns of Product for the
twenty-four (24) month period ended September 30, 2007. 

        4.13    Wholesalers.    None of [***] have provided written notification to Seller that any of
them intends to terminate or materially reduce its business relationship with respect to the Product or the Business after the Execution Date or the Closing Date. 

        4.14    Other Assets.    

        (a)   The
Active Promotional Materials included in the Purchased Assets constitute all of the advertising, promotional and media materials, including materials containing
post-marketing clinical data, that are used exclusively by Seller on the Closing Date for the Distribution of Product in the Territory. 

        (b)   Except
as set forth in Schedule 1.1(a), the Active Promotional Materials have been reviewed and are currently pre-cleared under 21 CFR 314
Subpart H by the FDA's Division of Drug Marketing, Advertising, and Communications in accordance with the Act. To Seller's Knowledge, the Active Promotional Materials are in compliance with
applicable Law. 

        (c)   The
Product Records included in the Purchased Assets constitute all of the books and records, that are used exclusively for the Product or the Business. 

        4.15    Brokers, Etc.    No broker, investment banker, agent, finder or other intermediary acting on behalf of Seller
or under the authority of Seller, is or will be entitled to any broker's or finder's fee or any other commission or similar fee directly or indirectly in connection with any of the Transactions. 

*** 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.

23

  

        4.16    Disclaimer.    EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT OR THE OTHER AGREEMENTS:

        (a)   NONE
OF SELLER AND ITS OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKES OR HAS MADE ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WRITTEN OR ORAL, AT
LAW OR IN EQUITY, IN RESPECT OF THE PURCHASED ASSETS, ASSUMED LIABILITIES, THE PRODUCT OR THE PRODUCT INTELLECTUAL PROPERTY, WHETHER ORALLY OR IN WRITING, IN CERTAIN ELECTRONIC AND PHYSICAL
"DATA ROOMS," MANAGEMENT PRESENTATIONS, FUNCTIONAL "BREAK-OUT" DISCUSSIONS, RESPONSES TO
QUESTIONS SUBMITTED ON BEHALF OF PURCHASER OR IN ANY OTHER FORM IN EXPECTATION OF THE TRANSACTIONS. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED, INCLUDING ANY IMPLIED
REPRESENTATION OR WARRANTY WITH RESPECT TO (I) MERCHANTABILITY, NON-INFRINGEMENT, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, (II) THE OPERATION OF THE BUSINESS WITH
RESPECT TO THE PRODUCT BY PURCHASER AFTER THE CLOSING IN ANY MANNER OTHER THAN AS USED AND OPERATED BY SELLER OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF THE PRODUCT OR THE BUSINESS AFTER
THE CLOSING; 

        (b)   NONE
OF SELLER OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES WILL HAVE OR BE SUBJECT TO ANY LIABILITY OR INDEMNIFICATION OBLIGATION TO PURCHASER OR TO
ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO PURCHASER, ITS AFFILIATES OR REPRESENTATIVES OF, OR PURCHASER'S USE OF, ANY INFORMATION RELATING TO THE PRODUCT OR THE BUSINESS, INCLUDING ANY
INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO PURCHASER, WHETHER ORALLY OR IN WRITING, IN CERTAIN ELECTRONIC AND PHYSICAL "DATA ROOMS,"
MANAGEMENT PRESENTATIONS, FUNCTIONAL "BREAK-OUT" DISCUSSIONS, RESPONSES TO QUESTIONS SUBMITTED ON BEHALF OF PURCHASER OR IN ANY OTHER FORM
IN EXPECTATION OF THE TRANSACTIONS. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED; AND 

        (c)   SELLER'S
INTERESTS IN THE BUSINESS ARE BEING TRANSFERRED THROUGH THE SALE OF THE PURCHASED ASSETS "AS IS, WHERE IS, WITH ALL
FAULTS," AND SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE PURCHASED
ASSETS AND THE PROSPECTS (FINANCIAL OR OTHERWISE), RISKS AND OTHER INCIDENTS OF THE PURCHASED ASSETS. 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER  

        Purchaser represents and warrants to Seller as follows: 

        5.1    Organization.    Purchaser is a corporation duly organized and validly existing and in good standing under the
laws of California. Purchaser is in good standing in each jurisdiction where such qualification is required except for any jurisdiction where failure to so qualify would not have a material adverse
effect on Purchaser. Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. 

        5.2    Due Authorization.    Purchaser has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement and the Other Agreements, and the execution and delivery of this Agreement and the Other Agreements and the performance of all of its obligations 

24

 

hereunder
and thereunder have been duly authorized by Purchaser and, to the extent required by Law, contract or otherwise, its stockholders. No other proceedings on the part of Purchaser are necessary
to authorize this Agreement or the Other Agreements. 

        5.3    No Conflicts; Enforceability.    The execution, delivery and performance of this Agreement and the Other
Agreements by Purchaser (a) are not prohibited or limited by, and will not result in the breach of or a default under, any provision of the certificate of incorporation or bylaws of Purchaser,
(b) assuming all of the consents, approvals, authorizations and permits described in Section 5.5 have been obtained and all the filings and notifications described in Section 5.5
have been made and any waiting periods thereunder have terminated or expired, does not conflict with any Law applicable to Purchaser, and (c) does not conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or
require any notice, consent or waiver under, any material agreement or instrument binding on Purchaser or any applicable order, writ, injunction or decree of any court or applicable Governmental
Authority to which Purchaser is a party or by which Purchaser is bound or to which any of its Assets is subject, except in the case of clauses (b) and (c) for such prohibitions,
limitation, default, notice, filing, permit, authorization, consent, approval, conflict breach or default which would not prevent or delay the consummation by Purchaser of the Transactions. This
Agreement and the Other Agreements have been duly executed and delivered by Purchaser, and constitute the legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance
with their respective terms, except as enforceability may be limited or affected by applicable bankruptcy, insolvency, moratorium, reorganization or other Laws of general application relating to or
affecting creditors' rights generally. 

        5.4    Litigation.    There is no Action pending or, to Purchaser's Knowledge, threatened that would prevent or delay
the consummation by Purchaser of the Transactions or affect the legality, validity or enforceability of this Agreement or the Other Agreements. 

        5.5    Consents.    Except for the requisite filings under the HSR Act and the expiration or termination of the
waiting period thereunder, the letter to the FDA contemplated by Section 8.6(e), and as may be necessary as a result of any facts or circumstances relating solely to Seller, no notice to,
filing with, authorization of, exemption by, or consent of, any Person, including any applicable Governmental Authority, is required for Purchaser to consummate the Transactions, except where the
failure to make such filings or notifications, or obtain such consents, approvals, authorizations or permits, would not, individually or in the aggregate, prevent or delay the consummation by
Purchaser of the Transactions. 

        5.6    Financing.    Purchaser will have sufficient immediately available funds to pay, in cash, the Upfront Payment
and all other amounts payable pursuant to this Agreement and the Other Agreements or otherwise necessary to consummate all the Transactions at the time any such payments are due. Upon the consummation
of the Transactions, (a) Purchaser will not be insolvent, (b) Purchaser will not be left with unreasonably small capital, (c) Purchaser will not have incurred debts beyond its
ability to pay such debts as they mature and (d) the capital of Purchaser will not be impaired in any manner that would prevent or prohibit the consummation by Purchaser of the Transactions. 

        5.7    Brokers, Etc.    No broker, investment banker, agent, finder or other intermediary acting on behalf of
Purchaser or under the authority of Purchaser, including Ian Ferrier, is or will be entitled to receive from Seller any broker's or finder's fee or any other commission or similar fee directly or
indirectly in connection with any of the Transactions. 

25

 
 
 

ARTICLE VI
  COVENANTS PRIOR TO CLOSING    
    

        6.1    Conduct of the Product or the Business.    

        (a)   Between
the Execution Date and the Closing Date, except as otherwise set forth on Schedule 6.1, Seller shall use
Commercially Reasonable Efforts to continue and conduct the Business only in, and not take any action except in, the ordinary and usual course of its business and consistent with past practices or as
contemplated by this Agreement or the Other Agreements or consented to in writing by Purchaser; provided,  however, that Seller may take any action, in its
sole discretion, with respect to the Excluded Contracts so long as such action does not result in a
Material Adverse Effect; provided further, notwithstanding the foregoing, Purchaser acknowledges and agrees that Seller, in its sole discretion, may
terminate, modify, extend and/or amend the terms of the Excluded Contracts identified in items number 1 and 9 of Schedule 2.2(b) so long
as such action does not result in a Material Adverse Effect. 

        (b)   Between
the Execution Date and the Closing Date, except as otherwise set forth on Schedule 6.1 or as contemplated
by this Agreement or consented to in writing by Purchaser, Seller shall: 

          (i)  pay,
discharge or satisfy Liabilities and Actions arising during such period; or 

         (ii)  not
sell, lease, license or encumber or otherwise voluntarily dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any of the Purchased
Assets, other than in the ordinary course of business consistent with past practice. 

        6.2    Required Approvals and Consents.    As soon as reasonably practicable after the Execution Date, the Parties
shall make all filings required to be made in order to consummate the Transactions, including all filings under the HSR Act in accordance with Section 6.3. The Parties shall also cooperate with
each other with respect to all filings that Purchaser elects to make. 

        6.3    HSR Act.    

        (a)   If
required pursuant to applicable Law, each Party shall file as soon as practicable, and in any event no later than ten (10) Business Days after the Execution
Date a Notification and Report Form under the HSR Act with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice. As deemed advisable, each
Party shall respond as promptly as practicable to any inquiries or requests received from any Governmental Authority in the Territory for additional information or documentation. Each Party shall
(i) promptly notify the other Party of any communication to that Party or its Affiliates from any Governmental Authority and, subject to applicable Law, permit the other Party or the other
Party's counsel to review in advance any proposed written communication to any of the foregoing; (ii) not participate, or permit its Affiliates to participate, in any substantive meeting or
discussion with any Governmental Authority in respect of any filings, investigation or inquiry concerning this Agreement unless it consults with the other Party in advance and, to the extent permitted
by such Governmental Authority in the Territory, gives the other Party the opportunity to attend and participate thereat; and (iii) with the exception of business documents deemed confidential
by Purchaser (including documents submitted as attachments to each of Purchaser's Notification and Report Form under the HSR Act), furnish Seller with copies of all
correspondence, filings, and communication (and memoranda setting forth the substance thereof) between Purchaser (its affiliates, and its respective representatives) on the one hand, and any
Governmental Authority or members of their respective staffs on the other hand, with respect to this Agreement. Purchaser shall bear sole responsibility for any required HSR Act filing fees. 

        (b)   If
any administrative, judicial or legislative Action is instituted (or threatened to be instituted) challenging the sale and purchase of the Purchased Assets or any of
the Transactions as 

26

 

violative
of any anti-competition Law, Purchaser shall in its sole discretion determine whether to contest and resist any such Action, and to seek to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order that is in effect and that restricts, prevents or prohibits the consummation of the Transactions. Seller shall cooperate in a commercially
reasonable manner with any such efforts as may be reasonably requested by Purchaser. 

        6.4    Transition Activities.    At the Closing, the Parties shall enter into a Transition Services Agreement, to be
effective immediately on the Closing Date, providing for the services specified therein pursuant to which Seller shall perform certain transitional services for Purchaser in accordance with the terms
thereof. 

        6.5    Notifications.    Between the Execution Date and the Closing Date, Seller, on the one hand, and Purchaser, on
the other hand, shall promptly notify the other Party in writing of any fact, change, condition, circumstance or occurrence or nonoccurrence of any event of which it is aware that will or is
reasonably likely to result in any of the conditions set forth in Article VII becoming incapable of being satisfied;  provided, however, that the
delivery of any notice pursuant to this Section 6.5 shall not limit or otherwise affect the remedies available
hereunder to the Party receiving such notice. 

        6.6    No Negotiation.    Between the Execution Date and the Closing, Seller shall not directly or indirectly solicit,
initiate, encourage or entertain any inquiries or proposals, discuss or negotiate with, provide any information to, or consider the merits of any inquiries or proposals from any Person (other than
Purchaser) relating to any transaction involving, in whole or in part, the Product or the Business, or that would otherwise compromise Seller's ability to consummate the transactions contemplated in
this Agreement and the Other Agreements. 

        6.7    Further Assurances; Further Documents.    

        (a)   As
of the Execution Date, each of the Parties shall use commercially reasonable efforts, (i) to satisfy or cause to be satisfied all the conditions precedent that
are set forth in Article VII, as applicable to each of them, (ii) to cause the Transactions to be consummated, and (iii) without
limiting the generality of the foregoing, to obtain all consents and authorizations of Third Parties and to make all filings with,
and give all notices to, Third Parties that may be necessary or reasonably required on its part in order to consummate the Transactions. 

        (b)   Each
of Purchaser and Seller shall, and shall cause its respective Affiliates to, at the request of the other Party, execute and deliver to such other Party all such
further instruments, assignments, assurances and other documents as such other Party may reasonably request in connection with the carrying out of this Agreement and the Transactions. 

 
 

ARTICLE VII
  CONDITIONS TO CLOSING    
    

        7.1    Conditions Precedent to Obligations of Purchaser and Seller.    The respective obligations of Purchaser and
Seller to consummate the Transactions on the Closing Date are subject to the satisfaction or waiver (in accordance with Section 11.8) at or prior to the Closing Date of the following
conditions: 

        (a)    Litigation.    No preliminary or permanent injunction or other order has been issued by any court or by any
applicable Governmental Authority, body or authority which enjoins, restrains, prohibits or makes illegal pursuant to applicable Law the Transactions on the Closing Date. 

        (b)    HSR Act.    Any waiting period (and any extension thereof) under the HSR Act applicable to the Transactions has
expired or been terminated. 

27

 

        7.2    Conditions Precedent to Purchaser's Obligations.    Purchaser's obligations to consummate the Transactions
shall be subject to the fulfillment of each of the following additional conditions, any one or more of which may be waived, at Purchaser's sole discretion, in writing by Purchaser: 

        (a)    Representations and Warranties.    Each of the representations and warranties of Seller contained in  Article IV shall
be true and correct as of the Execution Date and as of the Closing Date as though made on and as of the Closing Date (except
that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date). 

        (b)    Performance.    Seller shall have performed and complied in all material respects with each of the covenants,
agreements and obligations Seller is required to perform under this Agreement on or before the Closing. 

        (c)    Officer's Certificate.    Purchaser shall have received a certificate executed by a duly elected, qualified and
acting officer of Seller certifying to the satisfaction of the conditions set forth in Sections 7.2(a) and 7.2(b). 

        (d)    Other Agreements.    Seller shall have duly executed and delivered to Purchaser the Other Agreements to
Purchaser. 

        7.3    Conditions Precedent to Seller's Obligations.    Seller's obligation to consummate the Transactions shall be
subject to the fulfillment of each of the following additional conditions, any one or more of which may be waived, at Seller's sole discretion, in writing by Seller: 

        (a)    Representations and Warranties.    Each of the representations and warranties of Purchaser contained in  Article V shall
be true and correct as of the Execution Date and as of the Closing Date as though made on and as of the Closing Date (except that
those representations and warranties which address matters only as of a particular date need only be true and correct as of such date). 

        (b)    Performance.    Purchaser shall have performed and complied in all material respects with each of the
covenants, agreements and obligations Purchaser is required to perform under this Agreement on or before the Closing. 

        (c)    Officer's Certificate.    Seller shall have received a certificate executed by a duly elected, qualified and
acting officer of Purchaser certifying to the satisfaction of the conditions set forth in Sections 7.3(a) and 7.3(b). 

        (d)    Other Agreements.    Purchaser shall have duly executed and delivered the Other Agreements to Seller. 

ARTICLE VIII

ADDITIONAL COVENANTS  

        8.1    Confidentiality; Publicity.    

        (a)   The
terms of the Confidentiality Agreement are hereby incorporated in this Agreement as though fully set forth herein and shall apply to any information provided to
Seller or Purchaser pursuant to this Agreement. As used in this Section 8.1, the term "Confidential Information" shall have the meaning assigned
to such term in the Confidentiality Agreement. Upon the Closing Date, the Confidentiality Agreement shall expire and be of no further force and effect with respect to all Confidential Information
relating to the Business, the Purchased Assets or the Assumed Liabilities; provided, however, such
expiration of the Confidentiality Agreement shall in no way prejudice or adversely affect Seller's or Purchaser's ability to seek damages, or any other remedy available to Seller or Purchaser, as
appropriate, with respect to a violation by such other Party (or its Affiliates or Representatives) of the Confidentiality Agreement prior to or after the Closing Date. Upon and 

28

 

after
the Closing Date, the Confidentiality Agreement shall remain in full force and effect pursuant to its terms with respect to all other Confidential Information that does not relate to the
Business, the Purchased Assets or the Assumed Liabilities. 

        (b)   From
and after the Closing Date, all Confidential Information exclusively concerning the Business, the Purchased Assets and the Assumed Liabilities (the
"Purchaser Proprietary Information") shall be used by Seller and its Affiliates solely as required to perform its obligations, exercise or enforce its
rights under this Agreement (or any Other Agreement), or comply with applicable Law, and for no other purpose. Seller shall not disclose, or permit the disclosure of, any of the Purchaser Proprietary
Information to any Person except those Persons to whom such disclosure is necessary to permit Seller to perform its obligations, exercise or enforce its rights under this Agreement (or any Other
Agreement), or comply with applicable Law. Seller shall treat, and will cause its Affiliates and the directors, officers, employees, agents, representatives and advisors of Seller or any of their
Affiliates to treat, the Purchaser Proprietary Information as confidential, using the same degree of care as Seller normally employs to safeguard its own confidential information from unauthorized use
or disclosure, but in no event less than a reasonable degree of care. 

        (c)   All
Confidential Information obtained by Purchaser (or its Affiliates or representatives) from Seller (or its Affiliates or representatives) other than the Purchaser
Proprietary Information (the "Seller Proprietary Information") shall be used by Purchaser solely as required to perform its obligations, exercise or
enforce its rights under this Agreement (or any Other Agreement), or comply with applicable Law, and for no other purpose. Purchaser shall not disclose, or permit the disclosure of, any of the Seller
Proprietary Information to any Person except those Persons to whom such disclosure is necessary to permit Purchaser to perform its obligations, exercise or enforce its rights under this Agreement (or
any Other Agreement), or comply with applicable Law. Purchaser shall treat, and will cause its Affiliates and the directors, officers, employees, agents, representatives and advisors of Purchaser or
any of their Affiliates to treat, the Seller Proprietary Information as confidential, using the same degree of care as Purchaser normally employs to safeguard its own confidential information from
unauthorized use or disclosure, but in no event less than a reasonable degree of care. 

        (d)   Purchaser
acknowledges and agrees that Seller (and its Affiliates) may together retain one (1) or more copies of all or part of the documentation (including
written or electronic records, files, manuals, filings, etc.), including any Purchaser Proprietary Information contained therein, that it delivers to Purchaser as part of the Purchased Assets, in
accordance with the provisions of and solely for the purposes set forth in this Section 8.1; provided, however, that the use of such
documentation (including written or electronic records, files, manuals, filings, etc.) does not constitute or otherwise facilitate, directly or indirectly, the use of any Competitive Product or
otherwise conflict with the requirements of Section 8.7. 

        (e)   In
the event either Party is requested pursuant to, or required by, applicable Law to disclose any of the other Party's Confidential Information (including Seller
Proprietary Information or Purchaser Proprietary Information, as applicable), it will notify the other Party in a timely manner so that such Party may seek a protective order or other appropriate
remedy or, in such Party's sole discretion, waive compliance with the confidentiality provisions of this Agreement. Each Party will cooperate in all reasonable respects, in connection with any
reasonable actions to be taken for the foregoing purpose. In any event, the Party requested or required to disclose such Confidential Information may furnish it as requested or required pursuant to
applicable Law (subject to any such protective order or other appropriate remedy) without liability hereunder, provided that such Party furnishes only
that portion of the Confidential Information which such Party is advised by a reasoned opinion of its counsel is legally required, and such Party exercises reasonable efforts to obtain reliable
assurances that confidential treatment will be accorded such Confidential Information. 

29

 

        (f)    The
Parties shall jointly agree upon the necessity and content of any press release in connection with the Transactions. Any other publication, news release or other
public announcement by a Party relating to this Agreement or to the performance hereunder shall first be reviewed and consented to in writing by the other Party; provided,
however, that notwithstanding any contrary term contained in the Confidentiality Agreement, (i) any disclosure that is required by Law as advised by the disclosing
Party's counsel may be made without the prior written consent of the other Party, (ii) any Party may issue a press release or public announcement if the contents of such press release or public
announcement have previously been made public other than through a breach of this Agreement by the issuing Party, without the prior written consent of the other Party, and (iii) Purchaser may
make public disclosures in any scientific publication, marketing materials, press release other public announcement in the ordinary course of its business if the contents of such publication relate
primarily to the Product itself and not the terms of this Agreement. Other than the disclosures contemplated in clauses (i) through (iii) of the previous sentence, to the extent
practicable, the disclosing Party shall give at least three (3) Business Days advance notice of any such legally required disclosure to the other Party, and such other Party may provide any
comments on the proposed disclosure during such period and if not practicable, such lesser practicable period, if any. Notwithstanding any contrary term contained in the Confidentiality Agreement, to
the extent that either Party determines that it or the other Party is required to file or register this Agreement, a summary thereof or a notification thereof to comply with the requirements of an
applicable stock exchange, New York Stock, or NASDAQ regulation or any applicable Governmental Authority, including without limitation the SEC, such Party shall use commercially reasonable efforts to
give at least two (2) Business Days advance written notice of any such required
disclosure to the other Party. Prior to making any such filing, registration or notification, the Parties shall consult with respect thereto regarding confidentiality. The Parties shall cooperate,
each at its own expense, in such filing, registration or notification, including without limitation such confidential treatment request, and shall execute all documents reasonably required in
connection therewith. 

        8.2    Use of Trade or Service Marks.    

        (a)   As
of the Closing Date, Seller (or its Affiliate) hereby grants to Purchaser, and Purchaser hereby accepts, a non-exclusive, non-transferable,
non-sublicensable, royalty-free license in the Territory to use the Seller Brands, solely to the extent necessary to allow the Purchaser to Distribute the finished Product
inventory and use the Promotional Materials and otherwise perform its obligations under this Agreement and the Other Agreements (the "Seller Brand
License"). Purchaser acknowledges that the Seller Brand License is being granted solely for transitional purposes and that Purchaser shall use Commercially Reasonable Efforts
to as quickly as is reasonably possible to cease its use of the Seller Brands after the Closing Date. Notwithstanding foregoing, the Seller Brand License will terminate (i) with respect to
Promotional Materials containing the Seller Brands thirty (30) Business Days after the date upon which Purchaser receives notice from the FDA that Purchaser's promotional materials for Products
and/or Product Improvements which do not refer to the Seller Brands have been pre-cleared by the FDA pursuant to 21 CFR 314 Subpart H, and (ii) with respect to packaging and
labeling of the Products and/or Product Improvements containing Seller Brands, on the later of, exhaustion of any finished Products labeled with Seller Brands or six (6) months following
receipt by Purchaser of labeling approval for Products and/or Product Improvement from the FDA. 

        (b)   Purchaser
shall not (i) add any other labels or marks to, or otherwise alter, the Seller Brands as used in the Business as of the Closing Date; (ii) change
in any way the style of the Seller Brands as used in the Business as of the Closing Date; or (iii) otherwise use the Seller Brands in any manner other than as specifically provided in this
Section 8.2. 

        (c)   Purchaser
acknowledges Seller's (or its Affiliate's) ownership of the Seller Brands, shall do nothing inconsistent with such ownership, agrees that all use of the Seller
Brands by Purchaser 

30

 

shall
inure to the benefit and be on behalf of the Seller (or its Affiliate), and agrees not to challenge Seller's (or its Affiliate's) title to the Seller Brands. Nothing in this Agreement shall give
Purchaser any right, title or interest in the Seller Brands other than the right to use the Seller Brands strictly in accordance with this Section 8.2. All use of the Seller Brands by Purchaser
under this Section 8.2 shall conform to the standards followed by the Seller (or its Affiliate) in operating the Business prior to the Closing Date, and upon reasonable notice to Purchaser,
Seller (or its Affiliates) shall have the right to review the standards used by Purchaser to operate the Business after the Closing Date to ensure Purchaser's compliance with this requirement related
to the Seller Brands. Within ten (10) Business Days of the Execution Date, Seller shall provide Purchaser with written standards which Seller expects Purchaser to adhere to in order for
Purchaser to be in compliance with this Section 8.2(c). 

        (d)   Purchaser
shall not have the right to, and shall not, sublicense, assign, pledge, grant or otherwise encumber or transfer to any Third Party any rights licensed by the
Seller (or its Affiliate) to Purchaser under this Section 8.2 without the Seller's prior written consent. The Parties understand and agree that, in addition to all other legal remedies, the
Seller (and its Affiliates) shall be entitled to immediate injunctive relief in order to enforce the terms of this Section 8.2. 

        (e)   Nothing
in this Section 8.2, or any other provision of this Agreement or any provision of the Other Agreements, shall grant the Purchaser any rights in any of
Seller's Internet domain names, registrations or applications for registration, or renewals thereof, registered in the United States or any other country or jurisdiction throughout the world, except
as such Internet domain names, registrations or applications for registration, or renewals thereof are included as part of the Purchased Assets. 

        (f)    Other
than as expressly provided in this Section 8.2 or elsewhere in this Agreement or the Other Agreements, Purchaser shall not use or permit any of its
Affiliates or distributors to use any of the Seller Brands or any other corporate signs, trademarks or service marks or names now or hereafter owned or used by Seller or any of its Affiliates, other
than the Product Intellectual Property on the terms provided herein and in the Other Agreements. 

        8.3    Notification of Customers.    Promptly after the Commencement Date, Purchaser and Seller shall, as provided in
the Distribution, Supply and Transition Agreement, jointly notify all wholesale distributors of the Product that all purchase orders for the Product received by Seller or any of its Affiliates prior
to the Commencement Date but not shipped prior to 11:59 p.m. EST on or prior to the Business Day immediately preceding the Commencement Date will be transferred to Purchaser and that all
purchase orders for the Product received after the Closing Date should be sent to Purchaser. Promptly after the Closing Date, Purchaser and Seller shall jointly notify all wholesale distributors of
the Product of the transfer of the Purchased Assets to Purchaser. 

        8.4    Product Returns, Rebates and Chargebacks.    

        (a)    NDC Numbers.    Following the effective date of the Distribution, Supply and Transition Agreement, Purchaser
shall obtain its own NDC numbers for Products and shall use Commercially Reasonable Efforts to have in place as soon as reasonably practicable all artwork and resources such that sales of Product
after the Commencement Date can be accomplished under the NDC numbers of Purchaser. Purchaser shall use its new NDC numbers on all invoices, orders and other communications with customers and
Governmental Authorities as soon as inventory of Products labeled with Purchaser's NDC number have been sold by Purchaser. 

31

  

        (b)    Product Returns.    

          (i)  From
the Effective Date through and including December 31, 2008 ("Seller Return Period"), Seller shall process
and be financially responsible for all returns of Product that is labeled with Seller NDC numbers; provided, however that Seller will not be financially
responsible for any returns of Product during the Seller Return Period that are due to incorrect shipments of such Product by Purchaser or damaged shipments of such Product by Purchaser, but rather
Purchaser will reimburse Seller for all such amounts paid in connection with such Product returns. Purchaser shall process and be financially responsible for all returns of Product labeled with
Purchaser NDC numbers irrespective of return period, and for all returns of Product labeled with Seller NDC numbers on or after January 1, 2009. For all Product that is returned to Seller but
is the financial responsibility of the Purchaser, Seller will destroy, or cause to be destroyed, all such Product and on the tenth (10th) Business Day of each month, provide to Purchaser a reporting
of such Product returns, including documentation sufficient to determine any appropriate customer reimbursement or credit. Purchaser will then process the return according to Purchaser's
then-current returned goods policy. To the extent that a Party processes, issues credits or remits payment for returns in respect of Product for which the other Party is financially
responsible under this subsection, the other Party shall reimburse such processing or paying Party within thirty (30) days of receipt of invoices that describe the requested payments in
reasonable detail, other than amounts that are the subject of bona fide disputes. Returned Product shall not be transferred between the Parties, but instead shall be destroyed by the receiving Party.
Each Party shall destroy, or cause to be destroyed, all such returned Product in a manner consistent with applicable Law, and the costs of such destruction shall not be reimbursed. 

         (ii)  Neither
Party shall instruct, recommend or attempt to induce customers who have previously purchased Product from it to (A) return such Product when that would
not otherwise have been the case but for such Party's instructions, recommendations or inducement or (B) delay the return of such Product. For the avoidance of doubt, Purchaser's shipment units
of Product to customers in the ordinary course will not be deemed to violate this Section 8.4(b). 

        (c)    Government Rebates.    Seller shall process and be financially responsible for all rebates pursuant to any
government rebate programs for all Product dispensed to patients with Seller NDC numbers through December 31, 2007. The dispense date shall be deemed to be the dispense quarter as claimed in
the rebate submissions by the respective states or the District of Columbia. For Product dispensed with Seller NDC numbers on or after January 1, 2008, Seller shall continue to process
government rebates, and Purchaser will reimburse Seller for all such rebates. Purchaser shall process and be financially responsible for all government rebates related to Product labeled with
Purchaser NDC numbers. To the extent that a Party processes or remits payment for government rebates in respect of Product for which the other Party is financially responsible under this subsection,
the other Party shall reimburse such processing or paying Party within thirty (30) days of receipt of invoices, with corresponding utilization
summary reports, that describe the requested payments in reasonable detail, other than amounts that are the subject of bona fide disputes. 

        (d)    Commercial Rebates.    Seller shall process and be financially responsible for all commercial rebates related
to Product sold by Third Parties through December 31, 2007. Subject to any services required of Seller under the Distribution, Supply and Transition Agreement or Transition Services Agreement,
Purchaser shall process and be financially responsible for all commercial rebates related to Product sold by Third Parties on or after January 1, 2008. To the extent that a Party processes,
issues credits or remits payment for commercial rebates in respect of Product for which the other Party is financially responsible under this subsection, the other Party shall reimburse such
processing or paying Party within thirty (30) days of receipt of invoices that 

32

 

describe
the requested payments in reasonable detail, other than amounts that are the subject of bona fide disputes. 

        (e)    Chargeback Claims.    

          (i)  Seller
shall process and be financially responsible for all chargeback claims related to Product sold by Third Parties through December 31, 2007
("Chargeback Period"), and Purchaser shall process and be financially responsible for all chargeback claims related to Product sold by Third Parties on
or after January 1, 2008. Notwithstanding the foregoing, the Parties acknowledge that the VA National Acquisition Center must approve the removal of the Product from Seller's Federal Supply
Schedule ("FSS") before the responsibility of processing such chargebacks is transferred from Seller to Purchaser. Until such approval is obtained,
Seller shall continue to be responsible for processing the FSS chargebacks claimed under the Seller's NDC numbers after the expiration of the Chargeback Period on Purchaser's behalf, and Purchaser
shall reimburse Seller for such chargeback claims. Purchaser and Seller agree that Seller shall have no financial liability for chargeback claims after the Chargeback Period. To the extent that a
Party processes, issues credits or remits payment for chargeback claims in respect of Product for which the other Party is financially responsible under this subsection, the other Party shall
reimburse such processing or paying Party within thirty (30) days of receipt of invoices that describe the requested payments in reasonable detail, other than amounts that are the subject of
bona fide disputes. 

        (f)    Medicaid Information.    

          (i)  With
respect to Product sold by Purchaser after the Commencement Date that bears an NDC number of Seller or any of Seller's Affiliates, Purchaser will deliver to
Seller, within fifteen (15) days after the end of each Calendar Quarter or reporting period as designated by the Center for Medicare and Medicaid Services
("CMS") to include the following information: (a) on a quarterly basis, the "Best Price" (as
defined under the Social Security Act, 42 USC § 1396r-8(c)(1)(C)) for all Product, identified by NDC number; and (b) on
a monthly and quarterly basis, the average manufacturer price ("AMP") (as defined under the Social Security Act, 42 USC
§ 1396r-8(k)(1)) and the relevant AMP eligible sales dollar amounts, as well as the number of AMP eligible units for all of such Product, each identified by NDC number. 

         (ii)  Purchaser
agrees to provide to Seller any additional data or other information required for the calculation and reporting of a government mandated price, as well as the
calculation of the rebates contemplated in this Section 8.4(f). Purchaser agrees that Seller may use all information described in this Section 8.4(f) in reporting to the CMS. Purchaser
further agrees that all Medicaid pricing data described in Section 8.4(f)(iii) that is included in any report to Seller will be calculated utilizing systems, processes, policies, practices and
pricing methodologies that comply with the requirements of the Medicaid Rebate Law, the Medicaid Regulations, Purchaser's Medicaid agreement, if any, with the Secretary of Health and Human Services
and applicable CMS Medicaid rebate program releases. 

        (iii)  Seller
will provide Purchaser with all applicable Medicaid pricing data for the Product required to support continued filings with CMS after the transition to
Purchaser's NDC number, including, Base Date Average Manufacturer's Price as defined under the Medicaid Rebate Law. 

33

 

        8.5    Accounts Receivable.    The Parties acknowledge and agree that all Retained Accounts Receivable shall remain
the property of Seller and Seller's Affiliates and shall be collected by Seller or Seller's Affiliates subsequent to the Closing. In the event that, subsequent to the Closing, Purchaser or Purchaser's
Affiliates receives any payments from any obligor with respect to an Account Receivable outstanding on the Closing Date, then Purchaser shall within [***] of receipt of such
payment remit the full amount of such payment to Seller. In the case of the receipt by Purchaser of any payment from any obligor of both Seller and Purchaser then, unless otherwise specified by such
obligor, such payment shall be applied first to amounts owed to Purchaser with the excess, if any, remitted to Seller. In the event that, subsequent to the Closing, Seller or Seller's Affiliates
receives any payments from any obligor with respect to an account receivable of Purchaser for any period after the Closing Date, then Seller shall within [***] of receipt of
such payment remit the full amount of such payment to Purchaser. In the case of the receipt by Seller of any payment from any obligor of both Seller and Purchaser then, unless otherwise specified by
such obligor, such payment shall be applied first to amounts owed to Seller with the excess, if any, remitted to Purchaser. 

        8.6    Regulatory Matters.    

        (a)   Subject
to any obligations of Seller under the Transition Services Agreement, from and after the Closing Date, Purchaser, at its cost, shall be solely responsible and
liable for (i) taking all actions, paying all fees and conducting all communication with the applicable Governmental Authority required by Law in respect of the Applicable Permits, including
preparing and filing all reports (including adverse drug experience reports) with the applicable Governmental Authority (whether the Product is sold before or after transfer of the Registrations),
(ii) taking all actions and conducting all communication with Third Parties with respect to Product sold pursuant to the Registrations (whether sold before or after transfer of the
Registrations), including responding to all complaints in respect thereof, including complaints related to tampering or contamination, (iii) investigating all complaints and adverse drug
experiences with respect to Product sold pursuant to the Registrations (whether sold before or after transfer of the Registrations), and (iv) carrying out any Phase IV post approval
commitment (such as patient surveys) consistent with those described on Schedule 4.10(g) of the Seller Disclosure Schedule. At Purchaser's
reasonable request, Seller shall cooperate, at its own expense, in connection with the activities of Purchaser contemplated by this Section 8.6(a). 

        (b)   From
and after the Closing Date, Seller shall promptly notify the Purchaser of complaints or reports received of an adverse drug experience with respect to the Product. 

        (c)   Subject
to the terms in the Supply Agreement with respect to Product Manufactured by Seller, from and after the Closing Date, Purchaser, at its cost, shall be solely
responsible and liable for conducting all voluntary and involuntary recalls of units of the Product sold pursuant to such Registrations (whether sold before or after transfer of such Registrations),
including recalls required by any applicable Governmental Authority and recalls of units of the Product sold by Seller deemed necessary by Seller in its reasonable discretion;  provided, however, that
Seller shall reimburse Purchaser for the reasonable expenses and costs of conducting recalls relating to Product sold by or on
behalf of Seller prior to the Closing, including the costs of notifying customers, the costs associated with shipment of such recalled Product, the price paid for such Product, and reasonable credits
extended to customers in connection with the recall, provided that such recall is not attributable to the negligence or willful
misconduct of Purchaser in conducting the Business. Seller promptly shall notify Purchaser in the event that a recall of the Product sold by Seller is necessary, and at Purchaser's reasonable request,
Seller shall cooperate, at its own expense, in connection with any such recall. 

*** 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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        (d)   To
the extent not otherwise previously completed pursuant to Sections 3.2(a)(ii) or 3.2(a)(iii), Seller shall, within fifteen (15) days of the Closing
Date, notify the FDA of the transfer of the Registrations to Purchaser in accordance with all applicable Laws. 

        (e)   To
the extent not otherwise previously completed pursuant to Section 3.2(b)(iv), Purchaser shall, within fifteen (15) days of the Closing Date, notify the
FDA of its assumption of the Registrations from Seller in accordance with applicable Laws. 

        8.7    Non-Compete.    Except as to Seller and its Affiliates as required in the Other Agreements and as
to Purchaser and its Affiliates with respect to Product and as provided in this Agreement, neither Seller nor Purchaser nor any of their respective Affiliates, for a period commencing on the Execution
Date and ending on [***], shall, directly or indirectly, Manufacture or Distribute a Competitive Product in the Territory. In addition, Seller agrees that neither it, nor any
of its Affiliates, will utilize the information on the Clinical Trial Database to conduct any analysis of the safety or efficacy of the Product without the prior consent of Purchaser, which consent
will not be unreasonably withheld; however, Purchaser acknowledges and agrees that Seller and its Affiliates may, without the prior consent of Purchaser, utilize any information on the Clinical Trial
Database for any other purpose whatsoever, including in connection with (i) any litigation relating to the Product and/or Business inside and outside of the Territory, and/or
(ii) submitting and/or maintaining any regulatory or governmental filings/approvals for Product outside of the Territory, including responding to correspondence or inquiries from regulatory or
other governmental authorities. Without limiting the foregoing covenant, in the event Seller, Purchaser or their respective Affiliate proposes to acquire any business (or assets) that includes a
Competitive Product which represent [***] percent ([***]%) or more of the net sales of the acquired business or assets, Seller or Purchaser or
their respective applicable Affiliate (the "Acquiring Party"), must divest the Competitive Product within [***] from the
effective date of the closing of the acquisition. If Seller, Purchaser or any of their respective Affiliates is acquired by or merges with a Third Party that has a Competitive Product, neither the
applicable Party nor any of its Affiliates will have any obligations under this Section 8.7 with respect to such Competitive Product; provided,
that, the division, subsidiary or business group of the surviving party in such change of control that pursues such Competitive Product shall not have access to, and shall not
refer to, rely upon or use in any manner, the Purchased Assets. 

        8.8    Ex-U.S. Rights.    Purchaser shall have the right of first refusal to acquire or license any assets
and rights of Seller relating exclusively to the Product for countries and jurisdictions outside the Territory ("Ex-U.S. Rights"). In the
event Seller and Purchaser fail to agree on the sale
or license of the Ex-U.S. Rights, then following [***] after commencement of negotiation with Purchaser, Seller shall be permitted to sell or license the
Ex-U.S. Rights to a Third Party on terms no more favorable, in the aggregate, to the Third Party than those offered by Seller to Purchaser. 

        8.9    Tax Matters.    

        (a)   To
the extent that the transactions contemplated by this Agreement and the Other Agreements result in any Liabilities arising from the application of any applicable
state or local "bulk sales" or similar Laws (including any requirement to withhold any amount from payment of the Purchase Price applicable to the sale of the Purchased Assets to Purchaser by Seller),
regardless of whether those Liabilities are imposed upon Purchaser or Seller, and regardless of any action or failure to act by either Purchaser or Seller, the Parties agree that Seller shall be
solely responsible for such Liabilities. Notwithstanding any other provision to the contrary herein, Seller hereby agrees to indemnify, defend and hold harmless Purchaser and the other Purchaser
Indemnitees from and against any and all such Liabilities. 

        (b)   Purchaser
and Seller each recognize their mutual obligations pursuant to Section 1060 of the Code to timely file an initial and appropriate supplemental IRS
Form 8594 with each of their 

*** 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.

35

 

respective
federal income Tax Returns (the "Asset Acquisition Statement"). Accordingly, Purchaser and Seller agree to cooperate in good faith in the
preparation of the Asset Acquisition Statement for timely filing in each of their respective U.S. federal income Tax Returns in accordance with a written statement (the
"Statement of Allocation"), setting forth an allocation of the Purchase Price (which for such purpose shall be increased by the amount of the Assumed
Liabilities and any other amounts as allowed under the Code and/or Treasury Regulations) between and among each item of the Purchased Assets, covenants and license rights (as applicable for each
Statement of Allocation) in accordance with the provisions of Section 1060 of the Code and the Treasury Regulations. Within thirty (30) days after the Closing Date, Purchaser shall
prepare and deliver to Seller a proposed Statement of Allocation. If Seller approves the Statement of Allocation, then, unless otherwise prohibited by Law, all federal, state and local income Tax
Returns of Purchaser and Seller shall be filed consistently with the allocations made pursuant to the Statement of Allocation and as set forth in the Asset Acquisition Statement. If Seller does not
approve the Statement of Allocation, Purchaser and Seller shall make good faith efforts to agree on the allocation of the consideration between and among each item of the Purchased Assets, covenants
and license rights. If Purchaser and Seller, after good faith negotiations, cannot agree on the allocation of the consideration within one hundred and twenty (120) days following the Closing
Date, then no Statement of Allocation shall be prepared, and each Party shall prepare and file its Tax Returns in accordance with its own allocations. 

        (c)   In
the event that Purchaser and/or Escrow Agent determines in good faith that Taxes must be withheld as required by a Governmental Authority on amounts due Seller under
this Agreement or the Other Agreements, Purchaser and/or Escrow Agent shall notify Seller of the Taxes required to be withheld, deduct such amount from any amounts due to Seller under this Agreement
or the Other
Agreements, remit such amounts to the appropriate Governmental Authority, and supply Seller with a receipt or other available evidence showing payment of such Taxes to the appropriate Governmental
Authority. To the extent that such amounts are withheld by Purchaser and/or Escrow Agent, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to Seller. 

        (d)   Seller
and Purchaser shall provide reasonable cooperation and information to each other in connection with (i) the preparation or filing of any Tax Return,
amended Tax Return, Tax election, Tax consent or certification, or any claim for a Tax refund, (ii) any determination of liability for Taxes, and (iii) any audit, examination or other
proceeding in respect of Taxes related to the Business. Any information obtained under this Section 8.9 shall be kept confidential pursuant to Section 8.1, except as may be otherwise
necessary in connection with the filing of Tax Returns, claims for a Tax refund or in conducting any audit, examination or other proceeding in respect of Taxes. 

        (e)   All
non-U.S. Transfer Taxes (including any Tax arising solely as a result of any of the Business or the Purchased Assets being transferred from a
non-U.S. jurisdiction to Purchaser pursuant to this Agreement or the Other Agreements) shall be paid by the Seller and all U.S. Transfer Taxes shall be paid [***]
by the Purchaser and Sellers, and each Party shall make all Commercially Reasonable Efforts and take such Commercially Reasonable Efforts to avail itself of all available exemptions to or reductions
of such Transfer Taxes. 

        (f)    Purchaser
and Seller agree, upon request, prior to the Closing Date and for a period of [***] following Closing Date, to use their Commercially
Reasonable Efforts to obtain any certificate or other document from any Government Authority or other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed with
respect to the Transactions. 

*** 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.

36

 

        (g)   Each
Party (or their respective Affiliates) shall be responsible for and shall pay all Taxes payable on any payments made to such Party by the other Party (or their
respective Affiliates), except as is otherwise set forth in this Agreement. 

        (h)   To
the extent not otherwise allocated in this Agreement, Seller shall be responsible for and shall promptly pay when due all Taxes levied with respect to the Business
and the Purchased Assets attributable to any Pre-Closing Tax Period. All such Taxes levied with respect to the Business and the Purchased Assets for any Straddle Period (collectively, the
"Apportioned Obligations") shall be apportioned between Purchaser and Seller based on the number of days (including the portion of the Closing Date) of
such Tax Period included in the Pre-Closing Tax Period and the number of days (including the portion of the Closing Date) of such Tax Period included in the Post-Closing Tax
Period. Seller shall be liable for the proportionate amount of such Taxes attributable to the Business and the Purchased Assets that is attributable to the Pre-Closing Tax Period, and
Purchaser shall be liable for the proportionate amount of such Taxes that is attributable to the Post-Closing Tax Period. Upon receipt of any bill for such Taxes relating to the Business
and the Purchased Assets, Purchaser and/or Seller, as applicable, may present a statement to the other setting forth the amount of reimbursement to which each is entitled under this
Section 8.9(h) together with such supporting evidence as is reasonably necessary to calculate the proration amount. The proration amount shall be paid by the party owing it to the other within
ten (10) days after delivery of such statement. In the event that Purchaser or Seller shall make any payment for which it is entitled to reimbursement under this Section 8.9(h), the
applicable party shall make such reimbursement promptly but in no event later than ten (10) days after the presentation of a statement setting forth the amount of reimbursement to which the
presenting party is entitled along with such supporting evidence as is reasonably necessary to calculate the amount of reimbursement. 

        (i)    Any
dispute, controversy, or claim between Seller, on the one hand, and Purchaser, on the other hand, arising out of or relating to the provisions of this Agreement that
relates to Taxes that cannot be resolved by negotiations between Seller and Purchaser shall be submitted to Accountants for resolution. Accountants shall control the proceedings related to the dispute
resolution and may request such evidence and information as it deems necessary. The resolution reached by Accountants shall be binding on the Seller and Purchaser and their respective affiliates. The
expenses of Accountants shall be borne equally by Seller, on the one hand, and Purchaser, on the other hand. 

ARTICLE IX

TERMINATION AND SURVIVAL  

        9.1    Termination.    

        (a)   This
Agreement may be terminated at any time before the Closing Date by mutual written consent of Purchaser and Seller; or 

        (b)   This
Agreement may be terminated by Seller before the Closing Date, in writing, if: 

          (i)  (A)
any representation or warranty of Purchaser set forth in this Agreement shall have become untrue or Purchaser has breached any covenant or agreement of Purchaser
set forth in this Agreement, and (B) such breach or misrepresentation is not capable of being cured within thirty (30) days of notice from Seller; or 

         (ii)  a
material breach of any provision of this Agreement has been committed by Purchaser, such breach has not been waived by Seller and such breach is not cured by 

37

 

Purchaser
within thirty (30) days after written notice thereof or, in the reasonable determination of Seller, is incapable of being cured by Purchaser. 

        (c)   This
Agreement may be terminated by Purchaser before the Closing Date, in writing, if: 

          (i)  (A)
any representation or warranty of Seller set forth in this Agreement shall have become untrue or Seller has breached any covenant or agreement of Seller set forth
in this Agreement, and (B) such breach or misrepresentation is not capable of being cured within thirty (30) days of notice from Purchaser; 

         (ii)  a
material breach of any provision of this Agreement has been committed by Seller, such breach has not been waived by Purchaser and such breach is not cured by Seller
within thirty (30) days after written notice thereof or, in the reasonable determination of Purchaser, is incapable of being cured by Seller; or 

        (iii)  upon
occurrence of a Material Adverse Effect (except where such Material Adverse Effect results from any negligent or willful misconduct of Purchaser with respect to
the Product or Business, including under the Distribution, Supply and Transition Agreement); 

        (iv)  the
labeling for the Product is changed in a manner that has a material adverse effect upon such Product's competitive position in the market sector (except where such
labeling change is caused by the negligence or willful misconduct of Purchaser with respect to the Product or Business); 

         (v)  the
Product is withdrawn, recalled or the sale of the Product is otherwise suspended or halted in the Territory (except where such withdrawal, recall or halting or
suspension of Product sales is caused by any negligent or willful misconduct of Purchaser with respect to the Product or Business, including under the Distribution, Supply and Transition Agreement);
or 

        (vi)  the
Parties have not received any required Governmental Approvals necessary to Close or the notice period under the HSR Act has not lapsed or been terminated prior to
the Closing. 

        (d)   This
Agreement shall be automatically terminated with no further action of the Parties if the Closing does not occur on or before January 31, 2008. 

        9.2    Procedure and Effect of Termination.    Upon termination of this Agreement by Seller or Purchaser pursuant to
Section 9.1, written notice thereof shall forthwith be given to the other Party, and this Agreement shall terminate and shall forthwith become void and there shall be no liability or obligation
on the part of the Parties or their respective Representatives. Termination of this Agreement shall terminate all outstanding obligations and liabilities between the Parties arising from this
Agreement except those described in: (i) Section 8.1, this Article IX and  Article X; (ii) the Confidentiality Agreement; and
(iii) any other provisions of this Agreement which by their nature are intended
to survive any such termination. Termination of this Agreement prior to the Closing, including by the Parties pursuant to Section 9.1(a), by Seller pursuant to Section 9.1(b), by
Purchaser pursuant to Section 9.1(c) or automatically pursuant to Section 9.1(d) shall, in turn, terminate the Escrow Agreement, and the Upfront Payment and all accrued interest and
other earnings thereon shall be disbursed by the Escrow Agent to Purchaser as more particularly described in the Escrow Agreement. 

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ARTICLE X
  INDEMNIFICATION AND DISPUTE RESOLUTION    
    

        10.1    Indemnification.    

        (a)    Seller's Indemnification Obligations.    Subject to Section 10.1(b), Seller shall indemnify, defend and
hold harmless Purchaser and its Affiliates and their respective officers, directors, agents, and employees (collectively, the "Purchaser Indemnitees")
from and against any and all Liabilities, paid or payable by any Purchaser Indemnitee (collectively, "Purchaser Losses") to the extent that such
Purchaser Losses are based on, result from, or arise in connection with (a "Purchaser Claim"): 

          (i)  any
Excluded Liability (collectively, "Excluded Liability Claims"); 

         (ii)  any
Liability arising from any breach of the representations and warranties set forth in Sections 4.1, 4.2, 4.4(a) or 4.5(a) or 4.5(b) (collectively,
"Fundamental Representation Claims"); 

        (iii)  any
Liability of Seller or its Affiliates for Taxes, including Taxes arising from their respective activities, assets and events, circumstances and transactions on or
prior to the Closing Date and any breach of the representations and warranties set forth in Section 4.8 and any covenant with respect to Taxes or tax related matters, including bulk sales laws,
set forth herein or in any Other Agreement, including Section 8.9 of this Agreement (collectively, "Tax Claims"); 

        (iv)  any
Liability arising from fraud, intentional misrepresentation or the cause or Knowledge of a deliberate or willful breach of any representations, warranties or
covenants of Seller under this Agreement or in any agreement, document, certificate, schedule or exhibit delivered pursuant hereto (collectively, "Fraud
Claims"); and 

         (v)  other
than Excluded Liability Claims, Fundamental Representation Claims, Tax Claims and Fraud Claims, any Liability arising from any other breach of any representation,
warranty or covenant of Seller under this Agreement or any act or omission by Seller or its Affiliates, which constitutes negligence, recklessness, gross negligence, or willful misconduct on the part
of a Seller Indemnitee (collectively, "General Claims"); 

provided, however, that Seller shall not be obligated to indemnify, defend or hold harmless any
Purchaser Indemnitee under this Section 10.1(a) from any Purchaser Claim or for any Purchaser Losses incurred by a Purchaser Indemnitee to the extent arising out of or attributable to:
(A) any act or omission by a Purchaser Indemnitee, which constitutes negligence, recklessness, gross negligence, or willful misconduct on the part of such Purchaser Indemnitee, or
(B) the breach of any representation or warranty made by Purchaser or a Purchaser Indemnitee in this Agreement (or an Other Agreement), or (C) any failure of Purchaser or a Purchaser
Indemnitee duly to perform or observe any provision, obligation, covenant or agreement to be performed or observed by Purchaser or a Purchaser Indemnitee pursuant to this Agreement (or an Other
Agreement), or (D) the Assumed Liabilities. 

39

 

        (b)    Limitations on Seller's Indemnification Obligations.    The Liability of Seller to provide any indemnification
to any Purchaser Indemnitee and the right of the Purchaser Indemnitees to indemnification under Section 10.1(a) shall be subject to the following provisions: 

          (i)  no
claims for indemnification shall be made under this Agreement against Seller, and no indemnification shall be payable to any Purchaser Indemnitees, with respect to
General Claims after the date which is [***] following the Closing Date; 

         (ii)  no
claims for indemnification shall be made under this Agreement against Seller, and no indemnification shall be payable to any Purchaser Indemnitees, with respect to
any Tax Claim after the date that is [***] days after expiration of all applicable statutes of limitation with respect to such Tax Claim; 

        (iii)  no
claims for indemnification shall be made under this Agreement against Seller, and no indemnification shall be payable to any Purchaser Indemnitees, with respect to
Fundamental Representation Claims upon [***]; and 

        (iv)  claims
for indemnification with respect to Excluded Liability Claims and Fraud Claims made under this Agreement shall not be subject to any of the limitations set forth
in this Section 10.1(b). 

        (c)    Purchaser's Indemnification Obligations.    Purchaser shall indemnify, defend and hold harmless Seller and its
Affiliates and their respective officers, directors, agents and employees (collectively, the "Seller Indemnitees") from and against any and all
Liabilities paid or payable by any Seller Indemnitee (collectively, "Seller Losses") to the extent that such Seller Losses are based on, result from, or
arise in connection with (a "Seller Claim"): the Assumed Liabilities after the Closing or breach of Purchaser's representations and warranties set forth
in Article V and any covenant with respect to Taxes or tax related matters set forth herein or in any Other Agreement, including
Section 8.9 of this Agreement ("Purchaser Tax Obligations"); provided, however, that Purchaser
shall not be obligated to indemnify, defend or hold harmless any Seller Indemnitee under this Section 10.1(c) from any Seller Claim or for any Seller Losses incurred by a Seller Indemnitee to
the extent arising out of or attributable to: (A) any act or omission by a Seller Indemnitee, which constitutes negligence, recklessness, gross negligence, or willful misconduct on the part of
such Seller Indemnitee, or (B) the breach of any representation or warranty made by Seller or a Seller Indemnitee in this Agreement (or an Other Agreement), or (C) any failure of Seller
or a Seller Indemnitee to duly to perform or observe any provision, obligation, covenant or agreement to be performed or observed by Seller or a Seller Indemnitee pursuant to this Agreement (or an
Other Agreement), or (D) the Excluded Liabilities. 

        (d)    Limitations on Purchaser's Indemnification Obligations.    The Liability of Purchaser to provide any
indemnification to any Seller Indemnitees and the right of the Seller Indemnified Parties to indemnification under Section 10.1(c) shall be subject to the following provisions: 

          (i)  no
claims for indemnification shall be made under this Agreement against Purchaser, and no indemnification shall be payable to any Seller Indemnitees, with respect to a
breach of any representation and warranty in Sections 5.1 or 5.2 after the date that is [***]; 

         (ii)  no
claims for indemnification shall be made under this Agreement against Purchaser, and no indemnification shall be payable to any Seller Indemnitees, with respect to a
breach of any other representation and warranty or any covenant of Purchaser under this Agreement or any act or omission by Purchaser or its Affiliates which constitutes negligence, recklessness, 

*** 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.

40

 

gross
negligence or willful misconduct on the part of a Purchaser Indemnitee, after a date which is [***]; 

        (iii)  no
claims for indemnification shall be made under this Agreement against Purchaser, and no indemnification shall be payable to any Seller Indemnitees, with respect to
any Purchaser Tax Obligations after the date that is [***] days after the expiration of all applicable statutes of limitation with respect to such Purchaser Tax Obligations;
and 

        (iv)  claims
for indemnification with respect to Assumed Liabilities or any Liability arising from fraud, intentional misrepresentation or the cause or Knowledge of a
deliberate or willful breach of any representations, warranties or covenants of Purchaser under this Agreement or in any agreement, document, certificate, schedule or exhibit delivered pursuant shall
not be subject to any of the limitations set forth in this Section 10.1(d). 

        (e)    Further Limitations on Indemnification Obligations.    

          (i)  Purchaser
shall not be entitled to receive any indemnification payments under Section 10.1(a) unless and until the aggregate amount of all indemnifiable
Purchaser Losses equals [***] dollars ($[***]) (the "Indemnification Basket"), whereupon Purchaser shall
be entitled to receive in full indemnity payments for all such Purchaser Losses; provided, that the maximum aggregate amount of indemnification payments
under Section 10.1(a) to which Purchaser shall be entitled (i) commencing on the [***] of the Closing Date to and including the date immediately prior to the
[***] of the Closing Date, shall not exceed [***] percent ([***]%) of the [***] and
(ii) commencing on the [***] of the Closing Date and [***], shall not exceed [***] percent
([***]%) of the [***] (each, the "Indemnification Cap"); provided further
that, to the extent the indemnifiable Purchaser Losses are in excess of the Indemnification Cap, Purchaser may offset from Seller's [***] up to
[***] percent ([***]%) of such Purchaser Losses after deduction of the applicable Indemnification Cap. 

         (ii)  Neither
the Indemnification Basket nor the Indemnification Cap shall apply with respect to Purchaser Losses for any claims made (A) in connection with
Section 4.2, Excluded Liability Claims, Tax Claims, and Fraud Claims; or (B) during the [***] following the Closing Date. 

        10.2    Indemnification Procedures.    

        (a)   Each
indemnified Party shall notify the indemnifying Party in writing (and in reasonable detail) of the claim within ten (10) Business Days after receipt by such
indemnified Party of notice of the Purchaser Claim or Seller Claim, as the case may be, or otherwise becoming aware of the existence or threatened existence thereof (such Purchaser Claim or Seller
Claim being referred to as a "Claim"). Failure to give such notice shall not constitute a defense, in whole or in part, to any Claim by an indemnified
Party hereunder except to the extent the rights of the indemnifying Party are materially prejudiced by such failure to give notice. The indemnifying Party shall notify the indemnified Party of its
intentions as to defense of the Claim or potential Claim in writing within ten (10) Business Days after receipt of notice of the Claim; 

        (b)   With
respect to any Third Party Claim, the indemnifying Party shall assume exclusive control of the defense and settlement (including all decisions relating to
litigation, defense and appeal) of any such Claim (so long as it has confirmed its indemnification obligation responsibility to such indemnified Party under this Section 10.2(b) with respect to
a given Claim); provided, however, that the indemnifying Party may not settle such Claim in any manner
that would require payment by the indemnified Party, or would materially adversely affect the rights granted to the indemnified Party hereunder, or would materially conflict with the terms of this
Agreement (or an Other Agreement), or, in the case of a Purchaser Indemnified Party only, adversely affect the 

*** 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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Purchased
Assets in or outside the Territory, without first obtaining the indemnified Party's prior written consent, which consent shall not be unreasonably withheld; and 

        (c)   With
respect to any Third Party Claim, the indemnified Party shall reasonably cooperate with the indemnifying Party in its defense of the Claim (including, without
limitation, making documents and records available for review and copying and making Persons within its control available for pertinent testimony in accordance with the confidentiality provisions of
Section 8.1, and neither Party shall be required to divulge privileged material to the other) at the indemnifying Party's expense solely with respect to out-of-pocket
expenses incurred by the indemnified Party (but excluding internal costs and expenses, including employee time or other internal overhead costs). With respect to any Third Party Claim, if the
indemnifying Party assumes defense of the Claim, an indemnified Party may participate in, but not control, the defense of such Claim using attorneys of its choice and at its sole cost and expense,
with such cost and expense not being covered by the indemnifying Party. With respect to any Third Party Claim, an indemnifying Party shall have no obligation or liability under this  Article X as to
any Claim for which settlement or compromise of such Claim or an offer of settlement or compromise of such Claim is made by an
indemnified Party without the prior written consent of the indemnifying Party, which consent shall not be unreasonably withheld.
With respect to any Third Party Claim, if an indemnifying Party notifies the indemnified Party in writing that it will not defend the indemnified Party against such a Claim asserted against the
indemnified Party, or if the indemnifying Party assumes the defense of the Claim in accordance with Section 10.2(b) yet fails to defend or take other reasonable, timely action, in response to
such Claim asserted against the indemnified Party, the indemnified Party shall have the right to defend or take other reasonable action to defend its interests in such proceedings, and shall have the
right to litigate, settle or otherwise dispose of any such Claim; provided, however, that no Party shall
have the right to settle a Claim in a manner that would adversely affect the rights granted to the other Party hereunder, or would materially conflict with this Agreement, or would require a payment
by the other Party, or, in the case of a Purchaser Indemnified Party only, adversely affect the Product in or outside the Territory, without the prior written consent of the Party entitled to control
the defense of such Claim. 

        10.3    Sole Remedy.    Each Party acknowledges and agrees that its sole and exclusive remedy after the Closing with
respect to any and all claims and causes of action under this Agreement (other than (i) rights, claims and causes of action under or that are reasonably related to the Other Agreements and
(ii) claims of, or causes of action arising from fraud, intentional misrepresentation, willful misconduct, other tortious acts, or relating to breaches of covenants requiring performance after
the Closing Date) shall be pursuant to the indemnification provisions set forth in this Section 10. In furtherance of the foregoing, each Party hereby waives, from and after the Closing, to the
fullest extent permitted under applicable Law, any and all rights, claims and causes of action under this Agreement (other than (i) rights, claims and causes of action under or that are
reasonably related to the Other Agreements and (ii) claims of, or causes of action arising from, fraud, intentional misrepresentation, willful misconduct, other tortious acts, or relating to
breaches of covenants requiring performance after the Closing Date) it may have against the other Party arising under or based upon any applicable Law or arising under or based upon common law or
otherwise (except pursuant to the indemnification provisions set forth in Section 10.1(a) or 10.1(c), as applicable). 

        10.4    Dispute Resolution.    Except as set forth in Section 2.8, if a dispute or controversy regarding any
right or obligation under this Agreement (or an Other Agreement) arises between the Parties, the Parties will seek to resolve such dispute or controversy or failure to agree by good faith negotiation
between the Executives, to be commenced promptly after such dispute or controversy or failure to agree arises. If such dispute or controversy or failure to agree is not resolved by such negotiation
within thirty (30) days after written notice by one Party to the other, each Party shall be free to pursue such other course of action available to such Party. 

42

 

        10.5    Limitation on Liability.    EXCEPT AS SET FORTH IN SECTION 10.1(a) AND SECTION 10.1(c) AND WITH
RESPECT TO THIRD PARTY CLAIMS, IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, TRUSTEES, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, PUNITIVE,
SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, A PRODUCT CLAIM, OR OTHERWISE ARISING OUT OF OR
RELATED TO THIS AGREEMENT. 

ARTICLE XI

MISCELLANEOUS  

        11.1    Assignment; Binding Effect.    This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors and assigns; provided, however, that either Party may assign this
Agreement and its rights and obligations hereunder without the other Party's consent (a) in connection with the transfer or sale of all or substantially all of such Party's business to which
this Agreement relates to a Third Party, whether by merger, sale of stock, sale of assets, license, sublicense or otherwise, or (b) to any Affiliate of such Party, including any successor in
interest by way of any reincorporation or other reorganization. 

        11.2    Survival of Representations and Warranties.    Each of the representations and warranties contained in this
Agreement and the certificates delivered by Seller and Purchaser pursuant to Sections 3.2(a)(iv) and 3.2(b)(v) shall survive the Closing,  provided, however, that such representations and warranties shall expire on the same dates, if any, as
and to the extent that the rights to indemnification with respect thereto under Section 10.1(b) or 10.1(c) shall expire. 

        11.3    Expenses.    Except as otherwise specified herein, each Party shall bear its own expenses with respect to the
Transactions. 

        11.4    Notices.    All notices, requests, claims, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given (a) when received if delivered personally, (b) when transmitted, if telecopied (which is confirmed), (c) upon receipt, if sent by
registered or certified mail (postage prepaid, return receipt requested) and (d) the day after it is sent, if sent for
next-day delivery to a domestic address by overnight mail or courier, to the Parties at the following addresses: 

If
to Seller, to: 

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

5 Moore Drive

Research Triangle Park, North Carolina 27709

Attention: Senior Vice President, US Pharmaceuticals RTP

Facsimile: (919) 315-3183 

43

 

Glaxo
Group Limited

Glaxo Wellcome House

Berkeley Avenue

Greenford, Middlesex

England UB6 0NN

Attention: The Company Secretary

Facsimile: 44 208 047 6905 

With copies sent concurrently to:

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

2301 Renaissance Boulevard

King of Prussia, PA 19406-2772

Vice President and Associate General Counsel, Business Development Transactions Team

Facsimile: (610) 787-7084 

If
to Purchaser, to: 

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: President

Facsimile: (858) 410-1945 

With copies sent concurrently to:

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: Legal Department

Facsimile: (858) 332-3393 

provided, however, that if any Party shall have designated a different address by notice to the others,
then to the last address so designated. 

        11.5    Severability.    If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void, unenforceable or against its regulatory policy, such determination shall not affect the enforceability of any others or of the remainder
of this Agreement; and in connection with such term, provision, covenant or restriction of this Agreement which is held invalid, void, unenforceable or against regulatory policy, the Parties shall
negotiate in good faith with a view to the substitution therefor of a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such
invalid term, provision, covenant or restriction and, absent any agreement by the Parties, such court of competent jurisdiction or other authority shall substitute therefore such term, provision,
covenant or restriction as is legal, valid and enforceable but otherwise similar to the invalid term, provision, covenant or restriction. 

        11.6    Entire Agreement.    This Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by all of the Parties hereto. This Agreement, the Other Agreements and the Confidentiality Agreement contain the entire agreement of the Parties hereto with respect to the
Transactions, superseding all negotiations, prior discussions and preliminary agreements made prior to the date hereof. 

        11.7    No Third Party Beneficiaries.    This Agreement is solely for the benefit of the Parties hereto and their
respective Affiliates and no provision of this Agreement shall be deemed to confer upon any Third Parties any remedy, claim, liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement. 

44

 

        11.8    Waiver.    The failure of any Party to enforce any condition or part of this Agreement at any time shall not
be construed as a waiver of that condition or part, nor shall it forfeit any rights to future enforcement thereof. 

        11.9    Governing Law; Jurisdiction.    This Agreement (including any claim or controversy arising out of or relating
to this Agreement) shall be governed by the law of the State of New York without regard to conflict of law principles that would result in the application of any Law other than the Law of the State of
New York. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the Supreme Court of the State of New York, and any appellate court from any thereof, in
any Action arising out of or relating to this Agreement, the Other Agreements, the Transactions or for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby
irrevocably and unconditionally (a) agrees not to commence any such Action except in such courts, (b) agrees that any claim in respect of any such Action may be heard and determined in
the Supreme Court of the State of New York, (c) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of
any Action in the Supreme Court of the State of New York, and (d) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such Action in the
Supreme Court of the State of New York. Each of the Parties hereto agrees that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Each Party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 11.4. Nothing in this
Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by Law. 

        11.10    Injunctive Relief.    Notwithstanding anything to the contrary in this Agreement, either Party will have the
right to seek temporary injunctive relief in any court of competent jurisdiction as may be available to such Party under the laws and rules applicable in such jurisdiction with respect to any matters
arising out of the other Party's performance of its obligations under this Agreement. Either Party agrees that in the event the other Party institutes an appropriate Action seeking
injunctive/equitable relief for specific performance under this Agreement, the Party seeking such relief shall not be required to provide the other Party with service of process of a complaint and
summons under the procedures set forth in any Canadian or other non-United States judicial process or system. Under such circumstances, the Party seeking such relief need only provide the
other Party with two copies of a true, correct and lawfully issued summons and complaint, via FedEx (priority delivery). 

        11.11    Amendment.    Any amendment, modification or supplement of or to any provision of this Agreement, including
the Schedules hereto, shall be effective only in a writing and signed by a duly authorized officer of suitable title of all Parties hereto. The Parties hereto waive the right to amend the provisions
of this Section 11.11 orally. 

        11.12    Headings.    The headings of the sections and subsections of this Agreement are inserted for convenience only
and shall not be deemed to constitute a part hereof. 

        11.13    Counterparts.    This Agreement may be executed manually or by facsimile by the Parties, in any number of
counterparts, each of which shall be considered one and the same agreement and shall become effective when a counterpart hereof shall have been signed by each of the Parties and delivered to the other
Party. 

        11.14    Schedules.    Purchaser agrees that any disclosure by Seller in any Schedule attached hereto shall not
establish any threshold of materiality or concede the materiality of any matter or item disclosed. 

        11.15    Construction.    The language in all parts of this Agreement shall be construed, in all cases, according to
its fair meaning. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting Party shall not be employed in the interpretation of this Agreement. 

*
* * * * * * * * * * 

45

 

        IN
WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase and Sale Agreement to be executed by their respective duly authorized officers as of the Execution Date. 

	 	 	SMITHKLINE BEECHAM CORPORATION

d/b/a GLAXOSMITHKLINE
	

 	
 	

By:	

/s/  DONALD F. PARMAN      

	 	 	Name: Donald F. Parman

Title: Vice President & Secretary
	

 	
 	
GLAXO GROUP LIMITED
	

 	
 	

By:	

/s/  VICTORIA WHYTE      

	 	 	Name:	Victoria Whyte

For and on behalf of

Glaxo Group Limited

Title: Corporate Director
	

 	
 	
PROMETHEUS LABORATORIES INC.
	

 	
 	

By:	

/s/  JOSEPH M. LIMBER      

	 	 	Name: Joseph M. Limber

Title: President and Chief Executive Officer

46

   EXHIBIT A  

 ASSIGNMENT OF COPYRIGHTS  

        THIS ASSIGNMENT OF COPYRIGHTS (this "Assignment") is made as of
the day of                                    , 2007 by SmithKline
Beecham Corporation d/b/a GlaxoSmithKline, a corporation organized under the laws of the Commonwealth of Pennsylvania, having a place of business at One
Franklin Plaza, Philadelphia, PA 19101 and Glaxo Group Limited, a company organized and existing under the laws of England and Wales, having offices located at Glaxo Wellcome House, Berkeley Avenue,
Greenford, Middlesex, UB6 0NN, England (the "Assignors") to Prometheus Laboratories Inc., a corporation organized under the laws of the
state of California, having a place of business at 9410 Carroll Park Drive, San Diego, CA 92121 ("Assignee"). 

        WHEREAS, Assignors are entering into an Asset Purchase and Sale Agreement (the "APA")
contemporaneously with the execution of this Assignment; 

        WHEREAS, among the assets to be transferred by Assignors to Assignee under the APA are the copyrights set forth in  Schedule I attached hereto (the "Works"), specifically excluding the Seller Brands as defined in
the APA and specifically excluding any copyrights to the Promotional Materials Artwork set forth in Schedule II and the Website Artwork set forth in Schedule III; 

        WHEREAS, Assignors warrant that they own all rights, title and interests in the Works and Assignors desire to assign all rights, title,
and interests in and to the Works to Assignee ("All Rights in the Works"); and 

        WHEREAS, Assignee desires to accept this Assignment in All Rights in the Works, including the U.S. Copyrights. 

        NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignors do hereby sell, assign, set over
and transfer to Assignee All Rights in the Works. The rights of Assignee at common law and/or to the end of the term or terms of which registration of the Works may be granted or renewed are to be
held and enjoyed by Assignee for Assignee's own use and
enjoyment, and for the use and enjoyment of its successors, assigns and other legal representatives, as fully and entirely as the same would have been held and enjoyed by Assignors if this Assignment
and sale had not been made; including all claims for royalties for licensing of the Marks and damages by reason of past infringement(s) of the Works, with the right to sue for and collect the same for
its own use and benefit, for the use, benefit and on behalf of its successors, assigns and other legal representatives; and further including the exercise of such rights in all media and by any manner
and means now known or hereafter devised. Assignors hereby waive all rights of attribution and integrity in and to the Works for all purposes in accordance with Section 106A of the United
States Copyright Act (17 U.S.C. §106A). 

        FURTHERMORE, Assignee will have the prosecution files for the Works, if any, transferred to Assignee's designated attorneys within fifteen
(15) days for pending applications and within a month for the issued registrations from the date first written above and, at the expense of Assignee, Assignors will (i) execute such
additional documents as are necessary to defend, register, or otherwise give full effect to and perfect the rights of Assignee to the Works; and (ii) take such further actions as Assignee may
reasonably request in order to register and record this Assignment at the appropriate registries to demonstrate Assignee's title to the Works. 

        This
Assignment shall be binding upon the successors and assigns of Assignors and Assignee. This Assignment shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. This Assignment may be executed in one or more counterparts, each of which shall be deemed
and original, but all of which together shall constitute one and the same agreement. 

[The
remainder of this page has been left blank intentionally.] 

A-1

 

        IN WITNESS HEREOF, the parties hereto have executed this Assignment of Copyrights as of the date first written above. 

	GLAXO GROUP LIMITED	 	City of

County of

In the Country England
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public
	
SMITHKLINE BEECHAM CORPORATION

D/B/A GLAXOSMITHKLINE	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

A-2

 

	
PROMETHEUS LABORATORIES INC.	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

A-3

SCHEDULE I  

THE WORKS  

Content
at the Lotronex.com website except as set forth in Schedule III

U.S. Promotional Materials (electronic and print) for LOTRONEX except as set forth in Schedule II

U.S. Training Materials (electronic and print) for LOTRONEX

U.S. Packaging and packaging insert for LOTRONEX 

SCHEDULE II  

PROMOTIONAL MATERIALS ARTWORK  

Images used on LOTRONEX® Sales Aid LOT532  

[Promotional Artwork]  

Patient walking out front door 

[Promotional Artwork]  

Patient on baseball field with kids 

[Promotional Artwork]  

Patient at presentation 

[Promotional Artwork]  

Doctor with patient 

[Promotional Artwork]  

Palm Pilot #1 

[Promotional Artwork]  

Palm Pilot #2 

[Promotional Artwork]  

Patient in grocery store 

SCHEDULE III  

WEBSITE ARTWORK  

LOTRONEX
WEBSITE IMAGES 

[Website
Artwork] 

   EXHIBIT B  

 ASSIGNMENT OF DOMAIN NAMES  

        THIS ASSIGNMENT OF DOMAIN NAMES (this "Assignment") is made as of
the      day
of                                    , 2007 by SmithKline Beecham
Corporation d/b/a GlaxoSmithKline, a corporation organized under the laws of the Commonwealth of Pennsylvania, having a place of
business at One Franklin Plaza, Philadelphia, PA 19101 and Glaxo Group Limited, a company organized and existing under the laws of England and Wales, having offices located at Glaxo Wellcome House,
Berkeley Avenue, Greenford, Middlesex, UB6 0NN, England (the "Assignors") to Prometheus Laboratories Inc., a corporation organized under
the laws of the state of California, having a place of business at 9410 Carroll Park Drive, San Diego, CA 92121 ("Assignee"). 

        WHEREAS, Assignors and Assignee are entering into an Asset Purchase and Sale Agreement (the
"APA") contemporaneously with the execution of this Assignment; 

        WHEREAS, Assignors own the domain names set forth in Schedule I attached hereto (the "Domain
Names"); 

        WHEREAS, among the assets to be transferred by Assignors to Assignee under the APA are the Domain Names; 

        WHEREAS, Assignors warrant that they own all rights, title and interests in the Domain Names and Assignors desire to assign all rights,
title, and interests in and to the Domain Names to Assignee (hereafter "All Rights in the Domain Names"); and 

        WHEREAS, Assignee desires to accept Assignment of All Rights in the Domain Names, 

        NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignors do hereby sell, assign, set over
and transfer to Assignee All Rights in the Domain Names.
The rights of Assignee to the end of the term or terms of which registration of the Domain Names may be granted or renewed are to be held and enjoyed by Assignee for Assignee's own use and enjoyment,
and for the use and enjoyment of its successors, assigns and other legal representatives, as fully and entirely as the same would have been held and enjoyed by Assignors if this Assignment and sale
had not been made; including all claims for royalties for licensing of the Domain Names and damages by reason of past infringement(s) of the Domain Names, with the right to sue for and collect the
same for its own use and benefit, for the use, benefit and on behalf of its successors, assigns and other legal representatives; and further including all rights to use, modify and exploit All Rights
in the Domain Names, the right to exclude others from using All Rights in the Domain Names, and the right to license, assign, convey and pledge All Rights in the Domain Names. 

        FURTHERMORE, at the expense of Assignee, Assignors will (i) execute such additional documents as are necessary to transfer, defend,
register, or otherwise give full effect to and perfect the rights of Assignee in the Domain Names; and (ii) take such further actions as Assignee may request in order to transfer the Domain
Names to Assignee at the appropriate registries. 

        This
Assignment shall be binding upon the successors and assigns of Assignors and Assignee. This Assignment shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. This Assignment may be executed in one or more counterparts, each of which shall be deemed
and original, but all of which together shall constitute one and the same agreement. 

[The
remainder of this page has been left blank intentionally.] 

B-1

 

        IN WITNESS WHEREOF, the parties hereto have executed this Assignment of Domain Names as of the date first written above. 

	GLAXO GROUP LIMITED	 	City of

County of

In the Country England
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public
	
SMITHKLINE BEECHAM CORPORATION

D/B/A GLAXOSMITHKLINE	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

B-2

 

	
PROMETHEUS LABORATORIES INC.	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

B-3

 
SCHEDULE I  

DOMAIN NAMES  

LOTRONEX.COM

LOTRONEX.US

LOTRONEX.INFO

LOTRONEX-NEWS.COM

LOTRONX.COM 

B-4

   EXHIBIT C  

ASSIGNMENT OF PATENTS  

        THIS ASSIGNMENT OF PATENTS (this "Assignment") is made as of the
      day of [            ], 2007 by SmithKline Beecham Corporation d/b/a GlaxoSmithKline, a corporation organized under the laws of the Commonwealth of
Pennsylvania, having a place of business at One Franklin Plaza, Philadelphia, PA 19101 and Glaxo Group Limited, a company organized and existing under the laws of England and Wales, having offices
located at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex, UB6 0NN, England (the "Assignors"), to Prometheus
Laboratories Inc., a corporation organized under the laws of the State of California, having a place of business at 9410 Carroll Park Drive San Diego, CA 92121
("Assignee"). 

        WHEREAS, Assignors are entering into an Asset Purchase and Sale Agreement (the "APA")
contemporaneously with the execution of this Assignment; 

        WHEREAS, Among the assets to be transferred by Assignors to Assignee under the APA are the patents set forth in Schedule I attached
hereto (the "Patents"); 

        WHEREAS, Assignors own all rights title and interests in the Patents and Assignors desire to assign all rights, title, and interests in
and to the Patents to Assignee; and 

        WHEREAS, Assignee desires to accept this Assignment. 

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignors do hereby
sell, assign, transfer, set over, and deliver to Assignee all rights, title and interest in and to: 

          (i)  the
Patents; 

         (ii)  all
divisionals, continuations, continuations-in-part, reissues, extensions, re-examinations or renewal applications related to, or
based on in whole or in part on, the Patents; and 

        (iii)  all
rights of enforcement and the right to damages for past, present and future infringement, misappropriation or other conflicts relating to the Patents. 

        FURTHERMORE, Assignors will, at the expense of Assignee (i) execute and deliver such further instruments including, without
limitation, further instruments of assignment; and (ii) take such further actions as Assignee may reasonably request in order to register this Assignment at the appropriate registries to
demonstrate Assignee's title to the Patents. 

        This
Assignment shall be binding upon the successors and assigns of Assignors and Assignee. This Assignment shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. This Assignment may be executed in one or more counterparts, each of which shall be deemed
and original, but all of which together shall constitute one and the same agreement. 

[The
remainder of this page has been left blank intentionally.] 

C-1

 

        IN WITNESS WHEREOF, the parties hereto have executed this Assignment of Patents as of the date first written above. 

	SMITHKLINE BEECHAM CORPORATION

D/B/A GLAXOSMITHKLINE	 	State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public
	
GLAXO GROUP LIMITED	
 	

City of

County of

In the Country England
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

C-2

 

	
PROMETHEUS LABORATORIES INC.	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

C-3

 
SCHEDULE I  

PATENTS  

	Patent
 
	 	Application No.
	 	Application Date
	 	Grant Date

	US 5,360,800	 	07/741570	 	07-Aug-1991	 	01-Nov-1994
	US 5,183,820*	 	07/691814	 	26-Apr-1991	 	02-Feb-1993
	US 5,196,534	 	07/704099	 	22-May-1991	 	23-Mar-1993
	US 5,225,407	 	07/941951	 	08-Sep-1992	 	06-Jul-1993
	US 6,175,014	 	08/137228	 	18-Oct-1993	 	16-Jan-2001
	US 6,284,770	 	09/529050	 	05-Oct-1998	 	04-Sep-2001
	US 6,429,209*	 	09/834717	 	13-Apr-2001	 	06-Aug-2002
	US 6,593,336	 	10/166401	 	10-Jun-2002	 	15-Jul-2003

	*
	US
5,183,820 has expired, but any/all rights to the patent are transferred. Note, US '820 is linked to US '800 by a previously filed terminal disclaimer.

	*
	US
6,429,209 has expired for non-payment of maintenance fees, but any/all rights to the patent are transferred. Note, US '209 is linked to US '770 and US '336 by previously
filed terminal disclaimers. 

C-4

  

EXHIBIT D  

 ASSIGNMENT OF TRADEMARKS  

        THIS ASSIGNMENT OF TRADEMARKS (this "Assignment") is made as of
the      day
of                                    , 2007 by SmithKline Beecham
Corporation d/b/a GlaxoSmithKline, a corporation organized under the laws of the Commonwealth of Pennsylvania, having a place of
business at One Franklin Plaza, Philadelphia, PA 19101 and Glaxo Group Limited, a company organized and existing under the laws of England and Wales, having offices located at Glaxo Wellcome House,
Berkeley Avenue, Greenford, Middlesex, UB6 0NN, England (the "Assignors") to Prometheus Laboratories Inc., a corporation organized under
the laws of the state of California, having a place of business at 9410 Carroll Park Drive, San Diego, CA 92121 ("Assignee"). 

        WHEREAS, Assignors are entering into an Asset Purchase and Sale Agreement (the "APA")
contemporaneously with the execution of this Assignment; 

        WHEREAS, among the assets to be transferred by Assignors to Assignee under the APA are the trademarks and trade dress set forth in  Schedule I attached hereto (the
"Marks"); 

        WHEREAS, Assignors warrant that they own all rights, title and interests in the Marks and Assignors desire to assign all rights, title,
and interests in and to the Marks to Assignee (hereafter "All Rights in the Marks"); and 

        WHEREAS, Assignee desires to accept Assignment of All Rights in the Marks, including the following: 

          (i)  U.S.
trademark registration listed on the attached Schedule I; 

         (ii)  U.S.
trade dress listed on the attached Schedule I, excluding the Seller Brands as defined in the APA; 

        (iii)  all
the goodwill associated with the use of the Marks on Schedule I; and 

        (iv)  all
other rights, including common law rights, relating to the Marks to the extent such rights exist. 

        NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignors do hereby sell, assign, set over
and transfer to Assignee All Rights in the Marks and the goodwill associated therewith. The rights of Assignee at common law and/or to the end of the term or terms of which registration of the Mark
may be granted or renewed are to be held and enjoyed by Assignee for Assignee's own use and enjoyment, and for the use and enjoyment of its successors, assigns and other legal representatives, as
fully and entirely as the same would have been held and enjoyed by Assignors if this Assignment and sale had not been made; including all claims for royalties for licensing of the Marks and damages by
reason of past infringement(s) of the Marks, with the right to sue for and collect the same for its own use and benefit, for the use, benefit and on behalf of its successors, assigns and other legal
representatives. 

        FURTHERMORE, Assignors will have the prosecution files for the Marks transferred to Assignee's designated attorneys within fifteen
(15) days for pending applications and within a month for the issued registrations from the date first written above and, at the expense of Assignee, Assignors will (i) execute such
additional documents as are necessary to defend, register, or otherwise give full effect to and perfect the rights of Assignee to the Marks; and (ii) take such further actions as Assignee may
reasonably request in order to register and record this Assignment at the appropriate registries to demonstrate Assignee's title to the Marks. 

        This
Assignment shall be binding upon the successors and assigns of Assignors and Assignee. This Assignment shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. This Assignment may be executed in one or more counterparts, each of which shall be deemed
and original, but all of which together shall constitute one and the same agreement. 

[The
remainder of this page has been left blank intentionally.] 

D-1

 

        IN WITNESS HEREOF, the parties hereto have executed this Assignment of Trademarks as of the date first written above. 

	GLAXO GROUP LIMITED	 	City of

County of

In the Country England
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public
	
SMITHKLINE BEECHAM CORPORATION

D/B/A GLAXOSMITHKLINE	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

D-2

 

	
PROMETHEUS LABORATORIES INC.	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

D-3

 
SCHEDULE I  

TRADEMARKS  

LOTRONEX Mark  

U.S.
Reg. No. 2238126 

D-4

 

Design Mark—Common Law 

 

  

 

GET
HELP GOING WHERE YOU WANT TO GO WITH LOTRONEX—Common Law 

HELP
YOUR PATIENTS GET WHERE THEY WANT TO GO WITH LOTRONEX—Common Law 

 
 

TRADE DRESS    
    

No
trademark rights are available in the tablet shape. 

D-5

   EXHIBIT E  

 BILL OF SALE  

        This BILL OF SALE (this "Bill of Sale") is made as of this
[            ] day of [            ], 2007, by and between SmithKline Beecham Corporation d/b/a GlaxoSmithKline, a corporation
organized under the
laws of the Commonwealth of Pennsylvania, having a place of business at One Franklin Plaza, Philadelphia, PA 19101 and Glaxo Group Limited, a corporation organized under the laws of England, with
offices at Glaxo Wellcome House, Berkley Avenue, Greenford, Middlesex, UB6 0NN, United Kingdom (together referred to as "Seller") and Prometheus
Laboratories Inc. a corporation organized under the laws of California, having a place of business at 9410 Carroll Park Drive, San Diego, California 92121
("Purchaser"). Each of Seller and Purchaser are sometimes referred to herein, individually, as a "Party"
and, collectively, as the "Parties." 

        WHEREAS, the Purchaser and the Seller have entered into an Asset Purchase and Sale Agreement
dated                                    , 2007 (the
"Purchase Agreement"); and 

        WHEREAS, pursuant to the Purchase Agreement, Seller has agreed to sell the Purchased Assets to Purchaser, and Purchaser has agreed to
purchase the Purchased Assets from Seller. 

        NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties agree as follows: 

        (i)    Definitions.    Unless otherwise defined herein, all capitalized terms used in this Bill of Sale shall have the
meanings set forth in the Purchase Agreement. 

        (ii)    Conveyance and Acceptance.    In accordance with the provisions of the Purchase Agreement, Seller hereby
sells, conveys, transfers, assigns and delivers to Purchaser, and Purchaser hereby purchases, takes delivery of and acquires from Seller, all of Seller's right, title and interest in and to the
Purchased Assets. 

        (iii)    Miscellaneous.    

        (A)  This
Bill of Sale shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. 

        (B)  This
Bill of Sale (including any claim or controversy arising out of or relating to this Bill of Sale) shall be governed by, interpreted under, and construed and
enforced in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. The Parties hereto agree that any disputes which may arise out of this Bill of
Sale which relate to any Party's rights and/or obligations hereunder shall be resolved in accordance with the provisions of Sections 10.4, 11.9 and 11.10 contained in the Purchase Agreement. 

        (C)  This
Bill of Sale may be amended or modified only by a written instrument executed by all of the Parties. 

        (D)  If
any term, provision, covenant or restriction of this Bill of Sale is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable
or against its regulatory policy such determination shall not affect the enforceability of any others or the remainder of this Bill of Sale. 

        (E)  This
Bill of Sale may be executed manually or by facsimile by the Parties, in any number of counterparts, each of which shall be considered one and the same agreement
and shall become effective when a counterpart hereof shall have been signed by each of the Parties and delivered to the other Party. 

E-1

 

        (F)  Nothing
in this Bill of Sale shall be construed to be a modification of, or limitation on, any provision of the Purchase Agreement, including the representations,
warranties and agreements set forth therein. 

[Signature
Page Follows] 

E-2

 

        IN WITNESS WHEREOF, the Parties hereto have caused this Bill of Sale to be executed by their respective officers thereunto duly authorized
as of the date first above written. 

	GLAXO GROUP LIMITED	 	City of

County of

In the Country England
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public
	
SMITHKLINE BEECHAM CORPORATION

D/B/A GLAXOSMITHKLINE	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

E-3

 

	
PROMETHEUS LABORATORIES INC.	
 	

State of

County of

In the County U.S.A.
	

By:	
 	

    
	
 	

On                                    , before me,

                                    , Notary Public,
personally
	Name:	 	    
	 	appeared                                    , proved to me on
the

basis of satisfactory evidence to be the person whose
	Title:	 	    
	 	name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
	

 	
 	

 	
 	

WITNESS my hand and official seal.
	

 	
 	

 	
 	
Signature of Notary Public

E-4

 
 

EXHIBIT F    
    

DISTRIBUTION, SUPPLY AND TRANSITION AGREEMENT  

Between

 SMITHKLINE BEECHAM CORPORATION  

 d/b/a  

 GLAXOSMITHKLINE  

and

 PROMETHEUS LABORATORIES INC.  

 Dated as of October 31, 2007  

 
Table of Contents  

	 
	 	 
	 	Page

	I. DEFINITIONS	 	F-1
	 	
 1.1	
 	

Definitions	
 	

F-1
	 	
 1.2	
 	

Clarification	
 	

F-7
	

II. APPOINTMENT OF DISTRIBUTION RIGHTS; RIGHTS AND LIMITATIONS	
 	

F-7
	 	
 2.1	
 	

Appointment of Promotion and Distribution Rights; Transition Period	
 	

F-7
	 	
 2.2	
 	

Restriction of Sub-Distributors	
 	

F-7
	 	
 2.3	
 	

Compliance with Registrations	
 	

F-7
	 	
 2.4	
 	

No Manufacturing Rights Conveyed on Effective Date	
 	

F-8
	 	
 2.5	
 	

Suspension of Activities/Obligations	
 	

F-8
	

III. PROMETHEUS RESPONSIBILITIES	
 	

F-8
	 	
 3.1	
 	

Distribution Obligations	
 	

F-8
	 	
 3.2	
 	

Promotional Materials and Promotional Activities	
 	

F-9
	 	
 3.3	
 	

Use of Trademarks and Trade Dress	
 	

F-11
	 	
 3.4	
 	

Use of Seller Brands	
 	

F-11
	 	
 3.5	
 	

Trademark Infringement by Third Parties	
 	

F-12
	 	
 3.6	
 	

Rebates and Chargebacks	
 	

F-12
	 	
 3.7	
 	

Medicaid Information	
 	

F-13
	 	
 3.8	
 	

Product Returns	
 	

F-13
	 	
 3.9	
 	

Pricing	
 	

F-14
	 	
 3.10	
 	

Sales Force	
 	

F-14
	

IV. MANUFACTURE AND SUPPLY OF PRODUCT	
 	

F-14
	 	
 4.1	
 	

Exclusive Purchase of Product	
 	

F-14
	 	
 4.2	
 	

Deliveries of Product	
 	

F-15
	

V. PRICES FOR PRODUCTS; PAYMENTS; SHIPMENT	
 	

F-15
	 	
 5.1	
 	

Prices for Products	
 	

F-15
	 	
 5.2	
 	

Invoices	
 	

F-15
	 	
 5.3	
 	

Payment	
 	

F-15
	 	
 5.4	
 	

Shipment; Title; Risk of Loss	
 	

F-15
	 	
 5.5	
 	

Inspection of Shipments	
 	

F-15
	 	
 5.6	
 	

Taxes	
 	

F-16
	

VI. OTHER RESPONSIBILITIES	
 	

F-17
	 	
 6.1	
 	

Quality and Testing	
 	

F-17

ii

 

	 	
 6.2	
 	

Nonconformity; Product Complaints, Adverse Events; Recalls	
 	

F-17
	 	
 6.3	
 	

Retention of Product Registrations	
 	

F-19
	 	
 6.4	
 	

Prosecution and Maintenance of Product Marks and Product Patent Rights	
 	

F-20
	

VII. ROYALTIES AND AUDIT RIGHTS	
 	

F-21
	 	
 7.1	
 	

Compensation	
 	

F-21
	 	
 7.2	
 	

Manner of Payment	
 	

F-21
	 	
 7.3	
 	

Late Payments	
 	

F-21
	 	
 7.4	
 	

Right of Offset	
 	

F-21
	 	
 7.5	
 	

Audit Rights	
 	

F-22
	

VIII. REPRESENTATIONS AND WARRANTIES	
 	

F-22
	 	
 8.1	
 	

Representations and Warranties of Both Parties	
 	

F-22
	 	
 8.2	
 	

Representations and Warranties of GSK	
 	

F-23
	 	
 8.3	
 	

Representations and Warranties of Prometheus	
 	

F-24
	 	
 8.4	
 	

No Implied Representations or Warranties	
 	

F-24
	 	
 8.5	
 	

No Reliance by Third Parties	
 	

F-24
	

IX. DISPUTE RESOLUTION AND INDEMNIFICATION	
 	

F-25
	 	
 9.1	
 	

Dispute Resolution	
 	

F-25
	 	
 9.2	
 	

GSK Indemnification Obligations	
 	

F-25
	 	
 9.3	
 	

Prometheus Indemnification Obligations	
 	

F-26
	 	
 9.4	
 	

Indemnity Procedures	
 	

F-26
	 	
 9.5	
 	

No Punitive or Exemplary Damages	
 	

F-27
	 	
 9.6	
 	

Insurance	
 	

F-27
	

X. FORCE MAJEURE	
 	

F-27
	 	
 10.1	
 	

Force Majeure	
 	

F-27
	

XI. CONFIDENTIALITY	
 	

F-27
	 	
 11.1	
 	

Definition of "GSK Confidential Information"	
 	

F-27
	 	
 11.2	
 	

Definition of "Prometheus Confidential Information"	
 	

F-27
	 	
 11.3	
 	

Treatment of Confidential Information	
 	

F-28
	 	
 11.4	
 	

Excluded Information	
 	

F-28
	 	
 11.5	
 	

Notification of Mandatory Disclosure	
 	

F-29
	 	
 11.6	
 	

Publicity	
 	

F-29
	 	
 11.7	
 	

Return of Confidential Information	
 	

F-29

iii

 

	

XII. TERM AND TERMINATION	
 	

F-30
	 	
 12.1	
 	

Term	
 	

F-30
	 	
 12.2	
 	

Termination for Material Breach	
 	

F-30
	 	
 12.3	
 	

Termination for Withdrawal of Any Product	
 	

F-30
	 	
 12.4	
 	

Termination Due to Termination of Asset Purchase Agreement	
 	

F-30
	 	
 12.5	
 	

Bankruptcy	
 	

F-30
	 	
 12.6	
 	

Effect of Termination	
 	

F-30
	 	
 12.7	
 	

Survival Upon Termination or Expiration	
 	

F-31
	

XIII. MISCELLANEOUS PROVISIONS	
 	

F-31
	 	
 13.1	
 	

Standard Forms	
 	

F-31
	 	
 13.2	
 	

Notices	
 	

F-31
	 	
 13.3	
 	

Independent Contractors	
 	

F-32
	 	
 13.4	
 	

Entire Understanding	
 	

F-32
	 	
 13.5	
 	

Unintentional Omissions	
 	

F-32
	 	
 13.6	
 	

Transferability; Binding Effect	
 	

F-33
	 	
 13.7	
 	

Amendment	
 	

F-33
	 	
 13.8	
 	

Severability	
 	

F-33
	 	
 13.9	
 	

Waiver	
 	

F-33
	 	
 13.10	
 	

Drafting Ambiguities	
 	

F-33
	 	
 13.11	
 	

Headings; Schedules; Counterparts	
 	

F-33
	 	
 13.12	
 	

Governing Law	
 	

F-33
	 	
 13.13	
 	

Further Actions	
 	

F-34

iv

   DISTRIBUTION, SUPPLY AND TRANSITION AGREEMENT  

 PREAMBLE  

        THIS DISTRIBUTION, SUPPLY AND TRANSITION AGREEMENT (this "Agreement") is entered into as of the 31th day of
October, 2007 (the "Execution Date"), by and between Prometheus Laboratories Inc., a corporation organized under the laws of California, having a
place of business at 9410 Carroll Park Drive, San Diego, CA 92121 ("Prometheus") and SmithKline Beecham Corporation d/b/a GlaxoSmithKline, a
Pennsylvania corporation, with its principal place of business at One Franklin Plaza, 200 North 16th Street, Philadelphia, PA 19101
("GSK"). Prometheus and GSK are sometimes collectively referred to herein as the "Parties" and
separately as a "Party." 

RECITALS  

        WHEREAS, GSK and Prometheus are, simultaneously with the execution of this Agreement, entering into that certain Asset Purchase and Sale Agreement (the
"Asset Purchase Agreement") pursuant to which Prometheus is purchasing from GSK certain assets, including the Products (as hereinafter defined); 

        WHEREAS,
in connection with the sale of such assets, the Parties are entering into this Agreement for Prometheus to exclusively market, promote and distribute the Products in the
Territory (as hereinafter defined) during the Term (as hereinafter defined); 

        WHEREAS,
the Parties desire to transition in an orderly manner the obligations and services which are required and/or necessary to market, promote and distribute the Products; and 

        WHEREAS,
Prometheus desires to purchase from GSK, and GSK agrees to supply to Prometheus, Prometheus' entire requirements of the Products for distribution in the Territory during the
Term (as hereinafter defined) pursuant to the terms hereof. 

AGREEMENT  

        NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby mutually acknowledged, Prometheus and GSK hereby agree as follows: 

ARTICLE I  

 DEFINITIONS  

        1.1    Definitions.    The following capitalized terms will have the meanings set forth below when used in this
Agreement (including any Schedule attached hereto), and all terms defined in the singular will have the same meanings when used in the plural (and vice versa), unless otherwise specified. 

        "Affiliate" of a Party or Person means any Person, whether de jure or de facto, that directly or indirectly, controls, is controlled by,
or is under common control with such Party or Person, as applicable. Solely as used in this definition, "control" means (a) direct or indirect ownership of more than fifty percent (50%) of the
equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or direct the affairs of such Party or
Person, as applicable, or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the policies and management of such Party or Person, as applicable,
whether by the ownership of stock, by contract, or otherwise. 

        "Agreement" will have the meaning set forth in the Preamble. 

        "AMP" will have the meaning set forth in Section 3.7(a). 

F-1

 

        "Anti-Kickback Statute" means the Medicare and Medicaid Anti-Kickback Statute set forth in 42 U.S.C.
§1320a-7b(b). 

        "Applicable Law" means all applicable provisions of any and all Federal, national, state, provincial, and local statutes, laws, rules,
regulations, administrative codes, ordinances, decrees, orders, decisions, injunctions, awards judgments, permits and licenses of or from governmental authorities relating to or governing the use or
regulation of the subject item, including, without limitation, the Anti-Kickback Statute, the FD&C Act and the PDMA. 

        "Asset Purchase Agreement" will have the meaning set forth in the Recitals. 

        "Auditor" will have the meaning set forth in Section 7.5(a). 

        "Background Information" will have the meaning set forth in Section 4.2. 

        "Business Day" means any day other than a day which is a Saturday, a Sunday or any day banks are authorized or required to be closed in
the State of North Carolina or the State of California. 

        "Calendar Quarter" means a period of three (3) consecutive months ending on the last day of March, June, September, or December,
respectively. 

        "Carve-Out Promotional Materials" will have the meaning set forth in Section 3.2(a)(v). 

        "Certificate of Analysis" means a document identified as such and provided by GSK to Prometheus that (i) sets forth the analytical
test results for a specified lot of Products shipped to Prometheus or its designee hereunder, (ii) is in conformance with each applicable Drug Application and (iii) states whether such
Products are manufactured in accordance with cGMPs and the Specifications. 

        "Closing" means the closing of the purchase and sale of the assets and assignment and assumption of the certain liabilities as
contemplated by the Asset Purchase Agreement. 

        "Closing Date" means date of the Closing. 

        "CMS" means the Center for Medicare and Medicaid Services. 

        "Commencement Date" means November 1, 2007. 

        "Commercially Reasonable Efforts" means that level of efforts and resources consistent with the usual practice followed by a Party in the
exercise of reasonable business discretion relating to other pharmaceutical products owned by it or to which it has exclusive rights, which is of similar market potential and at a similar stage in
development or product life, taking into account issues of patent coverage, safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or
product, the regulatory structure involved, the profitability of the products (including, without limitation, pricing and reimbursement status achieved), and other relevant factors, including without
limitation technical, legal, scientific, and/or medical factors. 

        "Confidential Information" will have the meaning set forth in Section 11.3. 

        "Consent" shall mean any consent, authorization, permit, certificate, license or approval of, exemption by, or filing or registration
with, any Governmental Authority or other Person. 

        "Cure Period" will have the meaning set forth in Section 12.2. 

        "Current Good Manufacturing Practices" or "cGMPs" shall mean all applicable standards
relating to manufacturing practices for fine chemicals, intermediates, bulk products or finished pharmaceutical products. For purposes of this Agreement, cGMPs shall mean (i) the principles
detailed in the U.S. Current Good Manufacturing Practices, 21 CFR Parts 210 and 211 and The Good Manufacturing Practice for Medicinal Products in the European Community, Volume IV, as each may
be amended from time to time; or (ii) promulgated by any Governmental Authority having jurisdiction over the 

F-2

 

manufacture
of the Products, including those in the form of guidance documents (including but not limited to advisory opinions, compliance policy guides and guidelines) that are being implemented
within the pharmaceutical manufacturing industry for such Products, and subject to any arrangements, additions or clarifications agreed to from time to time by the Parties. 

        "Customers" means Third Party purchasers of the Products in the Territory. 

        "Customer Orders" means the orders for the Products made by Customers. 

        "DDMAC" means the FDA's Division of Drug Marketing, Advertising and Communications. 

        "Destination Site" will mean Integrated Commercial Solutions, Inc., 345 International Blvd., Suite 200, Brooks, KY 40109. 

        "Detail" means an interactive face-to-face visit in the Territory by a sales representative of Prometheus with a
physician or his or her legally empowered designee, during which the FDA-approved indicated uses, safety, effectiveness, contraindications, side effects, warnings, and other relevant
characteristics of the Products may be described by such sales representative in a fair and balanced manner consistent with Applicable Law and the PhRMA Code, and using, as necessary or desirable, the
product labeling or the Promotional Materials; however, incidental contacts between such sales representatives and a physician will not constitute a Detail. When used as a verb, "Detail" means to
engage in a Detail. 

        "Dispute" will have the meaning set forth in Section 9.1. 

        "Dispute Notice" will have the meaning set forth in Section 9.1. 

        "Drug Application" means any New Drug Application (NDA) filed with the FDA, any Abbreviated New Drug Application (ANDA) filed with the
FDA, any Supplemental New Drug Application (sNDA) filed with the FDA, any product license or any equivalent drug application or similar pharmaceutical product approval administered by any foreign
Governmental Authority, or extension or renewal of any of the foregoing. 

        "Effective Date" means the HSR Clearance Date. 

        "Execution Date" will have the meaning set forth in the Preamble. 

        "Executives" will have the meaning set forth in Section 7.5(c). 

        "Existing Inventory Delivery" will have the meaning set forth in Section 4.2. 

        "FDA" means the United States Food and Drug Administration, or any successor agency thereto. 

        "FD&C Act" means the Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated thereunder from time to time. 

        "FSS" will have the meaning set forth in Section 3.6(c). 

        "Governmental Authority" means any Federal, state or local governmental authority, regulatory agency or other governmental body in the
Territory. 

        "GSK" will have the meaning set forth in the Preamble. 

        "GSK Chargeback Period" will have the meaning set forth in Section 3.6(c). 

        "GSK Confidential Information" will have the meaning set forth in Section 11.1. 

        "GSK Indemnitees" will have the meaning set forth in Section 9.3. 

        "GSK Promotional Materials" will have the meaning set forth in Section 3.2(a)(i). 

        "GSK Return Period" will have the meaning set forth in Section 3.8(a). 

F-3

 

        "HSR Act" means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder. 

        "HSR Clearance Date" means the earliest date on which both Parties have actual knowledge that all applicable waiting periods under the HSR
Act with respect to the transactions contemplated hereunder have expired or have been terminated. 

        "Ineligible Person" means an individual or entity who: (a) is currently excluded, debarred, suspended or otherwise ineligible to
participate in the Federal health care programs or in Federal procurement or nonprocurement programs, or (b) has been convicted of a criminal offense that falls within the ambit of 42 U.S.C.
1320a-7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible. 

        "Indemnitee" will have the meaning set forth in Section 9.4. 

        "Indemnitor" will have the meaning set forth in Section 9.4. 

        "Intellectual Property" means intellectual property rights, including Trademarks, copyrights and Patents, whether registered or
unregistered, and all applications and registrations therefor, domain names, web sites, Know-How, confidential information, trade secrets, and similar proprietary rights in confidential
inventions, discoveries, analytic models, improvements, processes, techniques, devices, methods, patterns, formulations and specifications. 

        "Know-How" means research and development information, validation methods and procedures, unpatented inventions, knowledge,
trade secrets, technical or other data or information, or other materials, methods, procedures, processes, flow diagrams, materials, developments or technology, including all biological, chemical,
pharmacological, toxicological, clinical, manufacturing, analytical, safety, quality assurance, quality control and other information or data, other than such information which is or becomes the
subject of a Valid Claim of a Patent or of a provisional or filed patent application. 

        "Losses" will have the meaning set forth in Section 9.2. 

        "Materials" shall mean (i) all raw materials, components, work-in-process and other ingredients required to
manufacture the Products and (ii) all labels and packaging materials used in the manufacture, storage and shipment of Products. 

        "Medicaid Rebate Law" shall mean §1927 of the Social Security Act (42 U.S.C. §1396r-8). 

        "Medicaid Regulations" shall mean the Final Rule, Medicaid Program—Prescription Drugs as published at 72 Fed. Reg. 39142
(July 17, 2007) (codified at 42 C.F.R. Part 447). 

        "NDA" means a New Drug Application filed with the FDA for any product, requesting permission to place a drug on the market in accordance
with 21 CFR Part 314, and all amendments or supplements filed pursuant to the requirements of the FDA, including all documents, data and other information concerning such product which are
necessary for FDA approval to market such product in the Territory. 

        "NDC" means National Drug Code. 

        "Net Sales" means the gross amount invoiced for sales of each Product by any Purchaser Representatives to Third Parties, less the
following deductions from such gross amounts [***]: 

          (i)  [***]; 

***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.

F-4

 

         (ii)  [***]; 

        (iii)  [***]; 

        (iv)  [***]; 

         (v)  [***];
and 

        (vi)  [***].

The
foregoing deductions shall only be deducted to the extent they were initially included in, and not otherwise deducted from, gross amounts invoiced. 

Net
Sales shall also include [***]. For the avoidance of doubt, [***]. In the event that Product is sold, transferred, or otherwise commercially
exploited by any Purchaser Representatives in a manner such that the above means of calculating Net Sales is not possible or otherwise is inappropriate, the Parties agree to negotiate in good faith a
reasonable mechanism for fairly calculating the Net Sales resulting from such sales, transfers, or other commercial exploitation. 

Net
Sales, as set forth in this definition, shall be calculated, in accordance with GAAP applied in a consistent manner. 

        "Nonconformity" will have the meaning set forth in Section 6.2(a). 

        "NOV" means notice of violation, otherwise known as an "untitled letter" sent by DDMAC. 

        "Party" or "Parties" will have the meaning set forth in the Preamble. 

        "Patents" means patents, patent applications, patent disclosures, invention disclosures and other rights (and all rights related thereto,
including all reissues, reexaminations, divisions, continuations, continuations-in-part, provisionals, continued prosecution applications, substitutions, reissues, extensions
or renewals of any of the foregoing) in the Territory. 

        "PDMA" means the Prescription Drug Marketing Act of 1987, as amended, and the regulations promulgated thereunder from time to time. 

        "PhRMA Code" means the PhRMA Code on Interactions with Health Care Professionals, as amended. 

        "Person" means any individual, corporation, partnership, firm, association, joint venture, joint stock company, trust or other entity, or
any Governmental Authority. 

        "Prescribing Program Call Center" will have the meaning set forth in Section 3.1(b). 

        "Product(s)" means the Lotronex® (alosetron hydrochloride) pharmaceutical product(s) set forth on  Schedule 3.1. 

        "Product Copyrights" means the copyrights set forth on Schedule 1.1(a) hereto. 

        "Product Event" will have the meaning set forth in the Section 6.2(c)(i). 

        "Product Know-How" means the Know-How which is Controlled by GSK and exclusively used by GSK for the Product in
the Territory during the period between (a) the earlier of (i) December 1, 2002 or (ii) the last production run for Product and/or API, and (b) the Closing Date. 

***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.

F-5

 

        "Product Intellectual Property" means the Product Patent Rights, Product Copyrights, Product Know-How, Product Marks and
Product Trade Dress. 

        "Product Mark(s)" means the Trademark(s) set forth on Schedule 1.1(b) hereto, and
all common law rights, applications and registrations therefor, and all goodwill associated therewith. 

        "Product Patent Rights" means the Patents set forth on Schedule 1.1(c). 

        "Product Trade Dress" means the trade dress set forth on Schedule 1.1(d) hereto,
but specifically excluding all Seller Brands used thereon with the exception of the Product Mark. 

        "Promotional Activities" will have the meaning set forth in Section 3.2(b)(i). 

        "Promotional Materials" will have the meaning set forth in Section 3.2(a)(iii). 

        "Prometheus" will have the meaning set forth in the Preamble. 

        "Prometheus Confidential Information" will have the meaning set forth in Section 11.2. 

        "Prometheus Indemnitees" will have the meaning set forth in Section 9.2. 

        "Purchaser Representatives" shall mean collectively, Prometheus, its Affiliates and its and their respective sublicensees. 

        "Registration(s)" means the regulatory approvals, authorizations, licenses, applications, agreements, permits, INDs, NDAs and other
permissions held by GSK relating exclusively to the Product issued by Governmental Authorities in the Territory as set forth on Schedule 2.3
hereto. 

        "Representative" will have the meaning set forth in Section 11.3(b). 

        "Seller Brands" means the trademarks, housemarks, tradenames, and trade dress owned, licensed, controlled or used by GSK, whether or not
registered, other than the Product Marks. 

        "Specifications" means the specifications with respect to the Products as set forth in  Schedule 6.1. 

        "Tax" or "Taxes" means any and all taxes, assessments, levies, tariffs, amounts subject to
escheat, duties or other charges, or impositions in the nature of a tax (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by
any applicable Governmental Authority. 

        "Term" will have the meaning set forth in Section 12.1. 

        "Territory" means the fifty (50) states of the United States of America, the District of Columbia and the Commonwealth of Puerto
Rico. 

        "Third Party(ies)" means any Person other than the Parties or their respective Affiliates. 

        "Trademark" means trademarks, service marks, certification marks, trade dress, internet domain names, trade names, identifying symbols,
designs, product names, company names, slogans, logos or insignia, whether registered or unregistered, and all common law rights, applications and registrations therefor, and all goodwill associated
therewith. 

        "Transition Period" means the period commencing on the Effective Date and ending at 12:01 a.m. Eastern Standard Time on the
Commencement Date. 

        "Valid Claim" means an issued claim of an unexpired Patent that shall not have been withdrawn, canceled or disclaimed, or held invalid or
unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision. 

F-6

 

        1.2    Clarification.    The word "including" or any variation thereof
means "including without limitation" and the word "including" or any variation thereof will not be construed to limit any general statement which it
follows to the specific or similar items or matters immediately following it. The word "annual" means each period during the Term from January until
December, pro rated as necessary. 

ARTICLE II  

 APPOINTMENT OF DISTRIBUTION RIGHTS; RIGHTS AND LIMITATIONS  

        2.1    Appointment of Promotion and Distribution Rights; Transition Period.    

        (a)   Subject
to the terms and conditions of this Agreement, GSK hereby appoints Prometheus as GSK's exclusive distributor (except as otherwise provided in this Agreement) of
the Products in the Territory, and, in connection therewith, grants to Prometheus the exclusive right (except as otherwise provided in this Agreement) to market, Detail, promote, advertise, sell and
distribute the Products in the Territory. In connection with the foregoing, GSK grants to Prometheus an exclusive license (except as to GSK who shall continue to have such rights during the Transition
Period) under the Product Intellectual Property solely as is necessary for Prometheus to distribute and sell the Products in the Territory. The appointment and license made in the preceding sentences
will commence on the Effective Date and continue throughout the Term, and for clarity, such appointment will not survive past the expiration or earlier termination of this Agreement. Except as
otherwise provided in this Agreement or the Asset Purchase Agreement, GSK and its Affiliates will not engage in any marketing, Detailing, promotion, advertisement, sale or distribution of the Products
in the Territory after the Commencement Date. 

        (b)   Notwithstanding
Section 2.1(a), GSK or its Affiliates will retain the exclusive right to manufacture and supply the Products and/or to have any Product
manufactured by a Third Party in the Territory,
and to ship the Products through its distribution channels in the Territory, as long as such shipment is solely in connection with providing the Products to Prometheus or its Affiliates. 

        (c)   During
the Transition Period, GSK will continue to sell and distribute the Products in the Territory in a manner consistent with GSK's practices prior to the Effective
Date. Further, during the Transition Period, GSK will be solely responsible for invoicing Customers for sales of the Products and booking all sales of the Products in the Territory. 

        2.2    Restriction of Sub-Distributors.    During the Term, Prometheus will not grant to any Third Party
any rights to market, Detail, promote, advertise, sell or distribute any Product, and will not enter into any agreement or arrangement with respect to co-promoting any Product. The
foregoing notwithstanding, Prometheus may employ the services of a Third Party in the acceptance and fulfillment of orders, generation of invoices and collection and management of receivables with
respect to Prometheus' sales of the Products in the Territory. 

        2.3    Compliance with Registrations.    Prometheus will not at any time do, and neither will Prometheus permit its
agents or representatives to do, any act in violation of the Registrations for any of the Products in the Territory. In the event that any filings are required to be made with or Consents required to
be obtained from applicable Governmental Authorities in order to sell the Products to Prometheus or for Prometheus to initiate distribution, Detailing, marketing, advertisement, sale or promotion of
the Products in the Territory, the Parties will use Commercially Reasonable Efforts to ensure that such filings and Consents are obtained or made as expeditiously as reasonably practicable. Prometheus
will not alter in any manner any of the Products or its packaging as sold to it by GSK hereunder and will resell the Products without alteration in the form sold to it by GSK. 

F-7

   
        2.4    No Manufacturing Rights Conveyed on Effective Date.    Except for Prometheus' right to use the Product Marks
and Product Trade Dress, no right or license under any trademark, or under any Patent or Know-How owned or controlled by GSK or any of its Affiliates to make or have made any Product is
granted under this Agreement to Prometheus. 

        2.5    Suspension of Activities/Obligations.    In the event either Party receives notice of any
non-frivolous lawsuit alleging, in whole or in part, that the use, making, marketing, distribution, offer for sale or sale of Products in the Territory by Prometheus or GSK (as applicable)
hereunder infringes any third party's intellectual property rights or is otherwise ordered or enjoined by a court of competent jurisdiction from using, making, marketing, distributing, offering for
sale or selling Products in the Territory, either Party shall have the right to suspend its obligations hereunder, including without limitation, to purchase and/or take delivery of or make (as
applicable) any Product until such time as the matter has been favorably resolved. 

ARTICLE III  

 PROMETHEUS RESPONSIBILITIES  

        3.1    Distribution Obligations.    In fulfillment of its obligations under this Agreement, commencing on the
Commencement Date and continuing during the Term, Prometheus will: 

        (a)   use
Commercially Reasonable Efforts to sell, market, Detail (only after appropriate training), promote, advertise and distribute the Products in a manner that will not
have a material adverse effect on the Products; 

        (b)   provide
and maintain, at its expense, a prescribing program call center ("Prescribing Program Call Center") and will
collect and maintain all data arising therefrom; provided that GSK shall make its medical affairs group reasonably accessible to Prometheus for the purposes of responding to inquiries from the
Prescribing Program Call Center; 

        (c)   not
take any action relating to the Products which constitutes a material violation of Applicable Law or a material breach of this Agreement; 

        (d)   accept
Customer Orders for the Products in the Territory from Customers; 

        (e)   establish
and maintain systems for supporting and responding to medical and Customer inquiries; 

        (f)    store,
release and transport the Products in accordance with cGMPs, Specifications and Applicable Laws; 

        (g)   communicate
with wholesale distributors in connection with the distribution of the Products; 

        (h)   purchase
the Products from GSK in accordance with Article IV of this Agreement; 

        (i)    not
repackage or cause any Third Party to repackage any of the Products except with GSK's prior written consent; 

        (j)    in
accordance with the terms of Section 3.6, report rebates for the Products to applicable Governmental Authorities and maintain the systems necessary, at
Prometheus' expense, to conduct such reporting activities; and 

        (k)   report
all Adverse Events (including, without limitation, Serious Adverse Events) (as such terms are defined in the Safety Data Exchange Agreement) to GSK in accordance
with the terms of the Safety Data Exchange Agreement entered into by the Parties as of the Execution Date in form attached hereto as Exhibit A. 

F-8

 

        3.2    Promotional Materials and Promotional Activities.    

        (a)    GSK Promotional Materials and Promotional Materials.    

          (i)  As
soon as practical after the Effective Date, GSK will provide Prometheus with copies (in electronic and/or paper form, as applicable, however maintained by GSK) of
any advertising or promotional materials in its possession and actively used by GSK as of the Effective Date relating to the Products in the Territory, which materials are listed on
Schedule 3.2 (the "GSK Promotional Materials"), and any training materials in GSK's possession. During the Term, Prometheus shall only use the
GSK Promotional Materials to promote, advertise, Detail and market the Products in the Territory without any changes, amendments or modifications to the GSK Promotional Materials, except to the extent
required by Applicable Law and/or to replace Seller Brands on the GSK Promotional Materials with Prometheus' corporate trademark, but only to the extent that Prometheus obtains approval from the FDA
to make such trademark changes on the GSK Promotional Materials. 

         (ii)  Subject
to the foregoing and Prometheus' compliance with Applicable Law and the terms of this Agreement (including Sections 3.3 and 3.4), GSK hereby grants
Prometheus a non-exclusive right in the Territory to copy, use, perform, display and distribute the GSK Promotional Materials in order to promote, advertise, Detail and market the Products
in the Territory as provided in this Agreement. 

        (iii)  Notwithstanding
anything to the contrary in Section 3.2(a)(i), during the Term Prometheus shall also have the right to change, modify or amend the GSK
Promotional Materials and to design and prepare new materials and advertisements for use in the promotion, advertising, Detailing and marketing of the Products in the Territory (collectively, the
"Promotional Materials"). In addition, during the Term Prometheus may submit to FDA for review any Promotional Materials prepared by or for Prometheus
by way of a Form FDA-2253, consistent with 21 CFR Part 314.81. Prometheus acknowledges and agrees, however, that, except as permitted under Section 3.2(a)(i) and 3.2(a)(v),
it will not use any Promotional Materials for the promotion, advertising, Detailing and marketing of the Products in the Territory during the Term, but rather that it may only use the Promotional
Materials following the Closing. It is understood that the Promotional Materials may include use of all or a portion of the GSK Promotional Materials. Accordingly, GSK hereby grants to Prometheus a
non-exclusive license during the Term to update, adapt and use such GSK Promotional Materials in the Territory to design and create the Promotional Materials and to make copies of and
distribute the same to FDA for review and approval, subject to Sections 3.3 and 3.4. 

        (iv)  During
the Term, GSK, its Affiliates and any third party licensors reserve and retain title and all rights not expressly granted hereunder, including copyright rights,
in and to all GSK Promotional Materials, whether written, visual or electronic works provided by it to Prometheus under this Agreement. 

         (v)  During
the Term, Prometheus may use the: (1) press release announcing the Asset Purchase Agreement and/or this Agreement, which press release has been agreed to
by GSK, (2) letter prepared by Prometheus to health professionals enrolled in the Prescribing Program for Lotronex® announcing the Asset Purchase Agreement and/or this Agreement,
and (3) letter prepared by Prometheus to pharmacists announcing the Asset Purchase Agreement and/or this Agreement, (collectively, the "Carve-Out Promotional
Materials"); provided that, Prometheus obtains DDMAC pre-clearance for each Carve-Out Promotional
Material, as provided in 21 CFR 314 Subpart H in accordance with the FD&C Act, prior to Prometheus' use of such Carve-Out Promotional Material and GSK will be given a reasonable
opportunity 

F-9

 

to
review and comment on each Carve-Out Promotional Material prior to Prometheus' submission of such Carve-Out Promotional Material to DDMAC. If DDMAC makes any comments to the
Carve-Out Promotional Materials, such comments will be promptly shared by Prometheus with GSK. Prometheus will address all such comments from DDMAC and confer with GSK as to how the DDMAC
comments have been addressed. Further, Prometheus will obtain final consent from GSK prior to Prometheus' use of any Carve-Out Promotional Materials during the Term. 

        (b)    Promotional Activities Conducted by Prometheus.    

          (i)  After
the Commencement Date, Prometheus will be solely responsible, at its sole expense and under its sole control, for designing and conducting all promotional
activities used in the promotion, advertising, Detailing and marketing of the Products in the Territory during the Term (the "Promotional Activities"). 

         (ii)  Prometheus
will ensure that all Promotional Activities comply with the applicable labeling and Registration for each Product, Applicable Law (including any applicable
state laws governing Promotional Activities and gift disclosure law and the Health Insurance Portability and Accountability Act), the PhRMA Code and the PhRMA Guiding Principles,
Direct-to-Consumer Advertisements About Prescription Medicines. Prometheus will be solely responsible for fulfilling regulatory requirements pertaining to its Promotional
Activities. To this effect, GSK will, upon the Effective Date, or as soon thereafter as is reasonably practicable, place a letter on file with DDMAC with respect to the Products advising DDMAC that
Prometheus will be the sole marketer and promoter of the Products in the Territory commencing on the Commencement Date and requesting that DDMAC address regulatory inquiries and concerns regarding
Prometheus' Promotional Activities solely with Prometheus. During the Term, each Party will promptly, but in no event within more than two (2) Business Days after its receipt thereof, provide a
copy to the other Party of any correspondence from a Governmental Authority with respect to any Product, including, but not limited to, the FDA, reflecting any purported legal or regulatory violations
or legal or regulatory action being considered or taken by such Governmental Authority, including without limitation, copies of FDA NOV's and warning letters. Subject to Prometheus' obligation to
provide correspondence with Governmental Authorities in accordance with this Section 3.2(b)(ii), unless otherwise required, Prometheus will not notify GSK of any Promotional Activities unless
pursuant to a written request by GSK, in which case such information will be provided by Prometheus to GSK within three (3) Business Days of such request by GSK. 

        (c)   If
either Party receives a warning letter from the FDA during the Term which relates to marketing, promotion, advertisement, sale or distribution of Product after the
Commencement Date, or either Party receives an NOV from the FDA which relates to the marketing, promotion, advertisement, sale or distribution of Product after the Commencement Date, GSK will have the
right to call, and Prometheus will participate/or attend at its own expense, a meeting between Prometheus (which will include senior level marketing and sales management of Prometheus) and GSK, to be
held at GSK's offices in Research Triangle Park, N.C. The purpose of such meeting will be to discuss the GSK Promotional Materials or Promotional Activities which led to the issuance of the warning
letter or the NOV, as the case may be, and to discuss, if appropriate, appropriate corrective or remedial measures to Prometheus' promotional review process;  provided, however,
 that if such warning letter or NOV is based upon Prometheus' Promotional Activities,
Prometheus will co-operate with GSK and implement any actions GSK determines in its commercially reasonable discretion are necessary to correct or remediate the conduct underlying the NOV
or warning letter. 

F-10

 

        3.3    Use of Trademarks and Trade Dress.    After the Effective Date and for the duration of the Term, and subject to
the terms and conditions of this Agreement: 

        (a)   GSK
hereby grants to Prometheus an exclusive (except as otherwise provided in this Agreement), royalty free license to use the Product Marks and Product Trade Dress to
promote, market, sell and distribute the Products in the Territory during the Term. Prometheus will not identify any Product by any designation other than the Product Marks, except that Prometheus may
identify itself as distributor of the Products. The use of the Product Marks and Product Trade Dress by Prometheus will be expressly subject to Section 3.3(c). 

        (b)   Prometheus
will use the Product Marks and Product Trade Dress solely with respect to the Products purchased from GSK or its designee as provided in this Agreement, only
in accordance with the standards of quality established or approved by GSK or its designee, and only in the Territory. Prometheus will permit duly authorized representatives of GSK to inspect on the
premises of Prometheus and will use Commercially Reasonable Efforts to permit duly authorized representatives of GSK to inspect on the premises of Prometheus' subcontractors and agents, at reasonable
dates and times mutually agreed upon by the Parties during normal business hours and upon reasonable prior written notice from GSK, inventories of the Products, Prometheus' quality control records,
and Prometheus' facilities used in or relating to the sale of the Products to ensure compliance with quality control standards and with applicable terms of this Agreement pertaining to the use of the
Product Marks and Product Trade Dress. 

        (c)   From
the Commencement Date and during the Term, whenever Prometheus uses the Product Marks in any Promotional Materials or in any other manner in connection with any
Product, Prometheus will
clearly indicate that the Product Marks are owned by the GlaxoSmithKline group of companies. When using the Product Marks and Product Trade Dress under this Agreement, Prometheus will comply with all
Applicable Law pertaining to the Product Marks and Product Trade Dress in force at any time in the Territory. 

        (d)   Prometheus
acknowledges and agrees that GSK and/or its Affiliates, is, and at all times will remain the owner of the Product Marks and Product Trade Dress during the
Term. Prometheus will not at any time do, cause to be done, or permit any of its employees, agents, contractors and subcontractors to commit any act inconsistent with, contesting or in any way
impairing, or tending to impair, such ownership. 

        3.4    Use of Seller Brands.    

        (a)   GSK
hereby grants to Prometheus a non-exclusive, non-transferable, non-sublicensable, royalty-free license in the Seller
Brands, solely to the extent necessary to allow Prometheus to promote, market, sell and distribute the Products in the Territory during the Term. 

        (b)   In
connection with the use of the Seller Brands during the Term, Prometheus shall not (i) add any other labels or marks to, or otherwise alter, the Seller Brands
as used by GSK prior to the Commencement Date with respect to the Products; (ii) change in any way the style of the Seller Brands as used by GSK prior to the Commencement Date with respect to
the Products; or (iii) otherwise use the Seller Brands in any manner other than as specifically provided in this Section 3.4. For the avoidance of doubt, Prometheus may identify itself
as distributor of the Products. 

        (c)   Prometheus
acknowledges GSK's (or its Affiliate's) ownership of the Seller Brands, shall do nothing inconsistent with such ownership, agrees that all use of the Seller
Brands by Prometheus shall inure to the benefit and be on behalf of GSK (or its Affiliate), and agrees not to challenge GSK's (or its Affiliate's) title to the Seller Brands. Nothing in this Agreement
shall give Prometheus any right, title or interest in the Seller Brands other than the right to use the Seller Brands strictly in accordance with this Section 3.4. All use of the Seller Brands
by Prometheus 

F-11

 

under
this Section 3.4 shall conform to the standards followed by the GSK (or its Affiliate) in promoting, marketing, distributing and selling the Product in the Territory prior to the
Commencement Date, and upon reasonable notice to Prometheus, GSK (or its Affiliates) shall have the right to review the standards used by Prometheus to promote, market, distribute and sell the
Products in the Territory to ensure Prometheus' compliance with this requirement related to the Seller Brands. 

        (d)   Prometheus
shall not have the right to, and shall not, sublicense, assign, pledge, grant or otherwise encumber or transfer to any Third Party any rights licensed by GSK
(or its Affiliate) to Prometheus under this Section 3.4 without GSK's prior written consent. The Parties understand and agree that, in addition to all other legal remedies, GSK (and its
Affiliates) shall be entitled to immediate injunctive relief in order to enforce the terms of this Section 3.4. 

        (e)   Other
than as expressly provided in this Section 3.4 or elsewhere in this Agreement, Prometheus shall not use or permit any of its Affiliates or distributors to
use any of the Seller Brands or any other corporate signs, trademarks or service marks or names now or hereafter owned or used by GSK or any of its Affiliates, other than the Product Intellectual
Property on the terms provided herein. 

        3.5    Trademark Infringement by Third Parties.    If either Party becomes aware that a Third Party is infringing any
Product Marks or Product Trade Dress used in connection with any Product in the Territory, such Party will give written notice to the other Party describing in detail the nature of such infringement.
During the Term, GSK and its Affiliates will have the obligation to enforce any such Product Marks or Product Trade Dress against such Third Party infringer and to settle or compromise any such
possible infringement by taking such action as GSK or its Affiliates may determine in their reasonable discretion upon consultation with Prometheus;  provided, however, that no settlement or consent judgment or other voluntary final disposition of any
suit or action pursuant to this Section 3.5 may be entered into without the prior written consent of Prometheus. 

        3.6    Rebates and Chargebacks.    

        (a)    Government Rebates.    GSK shall process and be financially responsible for all rebates pursuant to any
government rebate programs for all Product dispensed to patients with GSK NDC numbers through December 31, 2007. The dispense date shall be deemed to be the dispense quarter as claimed in the
rebate submissions by the respective states or the District of Columbia. For Product dispensed with GSK NDC numbers on or after January 1, 2008, GSK shall continue to process government
rebates, and Prometheus will reimburse GSK for all such rebates. Prometheus shall process and be financially responsible for all government rebates related to Product labeled with Prometheus NDC
numbers. To the extent that a Party processes or remits payment for government rebates in respect of Product for which the other Party is financially responsible under this Section 3.6(a), the
other Party shall reimburse such processing or paying Party within thirty (30) days of receipt of invoices, with corresponding utilization summary reports, that describe the requested payments
in reasonable detail, other than amounts that are the subject of bona fide disputes. 

        (b)    Commercial Rebates.    GSK shall process and be financially responsible for all commercial rebates related to
Product sold by Third Parties through December 31, 2007. Subject to any services required of GSK under this Agreement, Prometheus shall process and be financially responsible for all commercial
rebates related to Product sold by Third Parties on or after January 1, 2008. To the extent that a Party processes, issues credits or remits payment for commercial rebates in respect of Product
for which the other Party is financially responsible under this Section 3.6(b), the other Party shall reimburse such processing or paying Party within thirty (30) days of receipt of
invoices that describe the requested payments in reasonable detail, other than amounts that are the subject of bona fide disputes. 

F-12

 

        (c)    Chargeback Claims.    GSK shall process and be financially responsible for all chargeback claims related to
Product sold by Third Parties through December 31, 2007 ("GSK Chargeback Period"), and Prometheus shall process and be financially responsible
for all chargeback claims related to Product sold by Third Parties on or after January 1, 2008. Notwithstanding the foregoing, the Parties acknowledge that the VA National Acquisition Center
must approve the removal of the Product from GSK's Federal Supply Schedule ("FSS") before the responsibility of processing such chargebacks is
transferred from GSK to Prometheus. Until such approval is obtained, GSK shall continue to be responsible for processing the FSS chargebacks claimed under the GSK's NDC numbers after the expiration of
the GSK Chargeback Period on Prometheus' behalf, and Prometheus shall reimburse GSK for such chargeback claims. Prometheus and GSK agree that GSK shall have no financial liability for chargeback
claims after the GSK Chargeback Period. To the extent that a Party processes, issues credits or remits payment for chargeback claims in respect of Product for which the other Party is financially
responsible under this Section 3.6(c), the other Party shall reimburse such processing or paying Party within thirty (30) days of receipt of invoices that describe the requested payments
in reasonable detail, other than amounts that are the subject of bona fide disputes. 

        3.7    Medicaid Information.    

        (a)   With
respect to Product sold by Prometheus after the Commencement Date that bears an NDC number of GSK or any of GSK's Affiliates, Prometheus will deliver to GSK, within
fifteen (15) calendar days after the end of each Calendar Quarter or reporting period as designated by CMS to include the following information: (i) on a quarterly basis, the
"best price" (as defined under the Social Security Act, 42 USC § 1396r-8(c)(1)(C)) for all Product, identified by NDC
number; and (ii) on a monthly and quarterly basis, the average manufacturer price ("AMP") (as defined under the Social Security Act, 42 USC
§ 1396r-8(k)(1)) and the relevant AMP eligible sales dollar amounts, as well as the number of AMP eligible units for all of such Product, each identified by NDC number. 

        (b)   Prometheus
agrees to provide to GSK any additional data or other information required for the calculation and reporting of a government mandated price, as well as the
calculation of the rebates contemplated in this Section 3.7. Prometheus agrees that GSK may use all information described in this Section 3.7 in reporting to the CMS. Prometheus further
agrees that all Medicaid pricing data described in this Section 3.7(b) that is included in any report to GSK will be calculated utilizing systems, processes, policies, practices and pricing
methodologies that comply with the requirements of the Medicaid Rebate Law, the Medicaid Regulations, Prometheus' Medicaid agreement, if any, with the Secretary of Health and Human Services and
applicable CMS Medicaid rebate program releases. 

        (c)   GSK
will provide Prometheus with Medicaid pricing data for the Product required to support continued filings with CMS after the transition to Prometheus NDC number,
including, Base Date Average Manufacturer's Price as defined under the Medicaid Rebate Law. 

        3.8    Product Returns.    

        (a)   From
the Effective Date through and including December 31, 2008 ("GSK Return Period"), GSK shall process and be
financially responsible for all returns of Product that is labeled with GSK NDC numbers; provided, however, that GSK will not be financially responsible
for any returns of Product during the GSK Return Period that are due to incorrect shipments of such Product by Prometheus or damaged shipments of such Product by Prometheus, but rather Prometheus will
reimburse GSK for all such amounts paid in connection with such Product returns. Prometheus shall process and be financially responsible for all returns of Product labeled with Prometheus NDC numbers
irrespective of return period, and for all returns of Product labeled with GSK NDC numbers on or after January 1, 2009. To the extent that a Party processes, 

F-13

 

issues
credits or remits payment for returns in respect of Product for which the other Party is financially responsible under this Section 3.8, the other Party shall reimburse such processing
or paying Party within thirty (30) days of receipt of invoices that describe the requested payments in reasonable detail, other than amounts that are the subject of bona fide disputes. Returned
Product shall not be transferred between the Parties, but instead shall be destroyed by the receiving Party. Each Party shall destroy, or cause to be destroyed, all such returned Product in a manner
consistent with Applicable Law, and the costs of such destruction shall not be reimbursed. 

        (b)   Neither
Party shall instruct, recommend or attempt to induce customers who have previously purchased Product from it to (A) return such Product when that would
not otherwise have been the case but for such Party's instructions, recommendations or inducement or (B) delay the return of such Product. For the avoidance of doubt, Prometheus' shipment units
of Product to customers in the ordinary course will not be deemed to violate this Section 3.8(b). 

        3.9    Pricing.    As of the Commencement Date and continuing during the Term, Prometheus will have the sole authority
to determine the prices of the Products sold by it during the Term and to establish its own pricing policy for the Products in the Territory, including price increases or decreases and the timing
thereof as determined by Prometheus. 

        3.10    Sales Force.    

        (a)   All
members of Prometheus' sales force (including sales management and sales representatives) will complete a Product-related training program conducted by Prometheus at
its cost and expense.
Prometheus will have the sole responsibility for preparing all materials for the Products for sales training purposes as needed. Ongoing training of Prometheus' sales representatives and other
personnel will be the responsibility of Prometheus at its cost and expense. The contents of any training provided by Prometheus that relates to the Products will be developed and coordinated by
Prometheus, and Prometheus will be solely responsible for training its sales force (including sales management and sales representatives) with regard to Applicable Law and directing such sales force
and sales force personnel to be compliant with Applicable Law, regardless of whether Prometheus utilizes materials previously used by GSK for training. 

        (b)   As
of the Commencement Date and continuing during the Term, Prometheus will maintain a compliance and audit program to ensure that the activities of its sales force
(including management and sales representatives) are consistent with the FD&C Act, the Anti-Kickback Statute, the PDMA and the PhRMA Code. 

        (c)   As
of the Commencement Date and continuing during the Term, Prometheus will not hire or employ an Ineligible Person as either an employee or contractor to conduct any
promotional, sales, distribution and/or any other activities relating to any Product in the Territory under this Agreement. 

ARTICLE IV  

 MANUFACTURE AND SUPPLY OF PRODUCT  

        4.1    Exclusive Purchase of Product.    During the Term and subject to the terms and conditions of this Agreement,
GSK agrees to exclusively supply and sell to Prometheus, and Prometheus agrees to exclusively purchase from GSK, the Products. Notwithstanding the foregoing, GSK shall have the right to supply the
Products to its Customers prior to the Commencement Date to fill Customer Orders accepted by GSK prior to the Commencement Date. 

F-14

 

        4.2    Deliveries of Product.    Within three (3) Business Days after the Effective Date, each Party shall
provide information reasonably requested by the other Party to establish such Party as a supplier or customer within the other Party's systems (the "Background
Information"). Thereafter, GSK shall, not later than the [***] following provision of such Background Information, deliver the Product quantities
specified on Schedule 4.2 (the "Existing Inventory Delivery"). Additionally, within
[***] after the Effective Date, Prometheus shall deliver to GSK one (1) purchase order (for the Existing Inventory Delivery);  provided, however, that
if GSK does not receive a purchase order for any such delivery, Prometheus shall
be deemed to have provided a purchase order for the Existing Inventory Delivery. 

ARTICLE V  

 PRICES FOR PRODUCTS; PAYMENTS; SHIPMENT  

        5.1    Prices for Products.    During the Term, Prometheus shall pay the applicable price for each Product set forth
on Schedule 5.1, attached hereto and incorporated herein. 

        5.2    Invoices.    All invoices for Products shall be submitted by GSK (or its Affiliate) to Prometheus at 9410
Carroll Park Drive, San Diego, CA 92121 upon delivery of Products to the Destination Site. 

        5.3    Payment.    Payments for Products invoiced under Section 5.2 above shall be due net thirty
(30) days from the date of invoice. Any payment due GSK (or its Affiliate) from Prometheus that is past due under this Agreement and not subject to a bona fide dispute shall bear interest at a
rate equal to the [***] of (i) [***] percent ([***]%) per year or (ii) the maximum rate permitted by
Applicable Law, calculated based on the number of days that the payment is delinquent. Prometheus and GSK stipulate and acknowledge that the credit terms stated herein expressly represent a financial
accommodation and are a material and not merely incidental part of this Agreement. Accordingly, Prometheus' rights to any extension of credit are subject to 11 U.S.C.
§§ 365(c)(2) and 365(e)(2)(B). Prometheus and GSK further stipulate and acknowledge that the financial condition of Prometheus is a material condition to GSK's
willingness to sell on credit to Prometheus, and accordingly, if Prometheus fails to timely pay any amount due under this Section 5.3 (excluding amounts that are the subject of a bona fide
dispute), at GSK's sole election, GSK may require cash payment or appropriate security before manufacture or shipment of any further orders. 

        5.4    Shipment; Title; Risk of Loss.    During the Term, all Products shall be shipped [***]
(as defined in INCOTERMS, 2000 edition, published by the International Chamber of Commerce, ICC Publication 560) the [***]. Title to and risk of loss with respect to any
Products shall pass from GSK to Prometheus when such Products are [***] the [***]. 

        5.5    Inspection of Shipments.    

        (a)    General; Acceptance.    Prometheus shall inspect each delivery of the Products and shall report to GSK any loss
or damage observed in such shipment within [***] of delivery of such shipment to the Destination Site. Prometheus shall notify GSK of Prometheus' placing any Products on hold
for further investigation of a Nonconformity, or of Prometheus' rejection of any batch (or part thereof) of any Product within [***] after delivery of such Products to
Prometheus. Prometheus' notice shall state the basis for the hold or rejection. Other than with respect to a latent defects, failure to give notice within this thirty (30) day period shall
constitute acceptance of any Product delivered. In the event that Prometheus discovers a latent defect that constitutes a Nonconformity then the Parties shall perform an investigation and take the
actions pursuant to Section 6.2(c). 

***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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        (b)    Quantitative Discrepancies.    Prometheus shall notify GSK in writing of any claim relating to quantitative
discrepancies from the applicable shipping documentation in any shipment of the Products for which Prometheus considers GSK to be responsible within [***] following receipt of
any such shipment. Any claim related to a quantitative discrepancy that is not made within such [***] will be deemed to have been waived by Prometheus and Prometheus will be
obligated to make payment for such Product in accordance with Section 5.3 above. In the event Prometheus determines there is a quantitative discrepancy, then GSK will investigate such
discrepancy, with Prometheus' reasonable cooperation. If the investigation results determine that GSK is responsible for such discrepancy, the actual quantity will be adjusted to reflect the results
of such investigation. Prometheus' exclusive remedy will be to pay for actual quantity shipped as provided herein. 

        5.6    Taxes.    Prometheus shall timely pay (i) any and all Taxes arising out of any payment, transaction, or
activity under this Agreement to the extent that Prometheus is liable for such Taxes under the Laws of the Governmental Authority that imposes said Taxes and (ii) any and all Taxes arising out
of any payment, transaction, or activity under this Agreement to the extent that GSK (or, when applicable, GSK's Affiliates, successors or assigns) is liable for such Taxes but only if, and to the
extent that, the Laws of the Governmental Authority that imposes said Taxes mandate that Prometheus shall pay said Taxes on behalf of GSK (or GSK's Affiliates, successors or assigns);  provided,
however, that Prometheus shall not be responsible for the payment of any fines, penalties,
additions to tax, or other amounts imposed by reason of the failure of GSK to comply with the requirements of the applicable Governmental Authority or the negligence or willful misconduct of GSK, its
Affiliates, successors or assigns. Prometheus shall be entitled to deduct and offset from any payment due to GSK (or, when applicable, to GSK's Affiliates, successors or assigns) under this Agreement
an amount that is equal to the amount of Taxes actually paid by Prometheus to a Governmental Authority pursuant to the immediately preceding sentence;  provided, however, that: 

        (a)   the
amount that Prometheus may deduct and offset under this Section 5.6(a) shall not include any interest, fines, penalties, additions to tax, or additional
amounts imposed solely by reason of the failure of Prometheus to comply with the reporting requirements of the applicable Governmental Authority and/or timely pay said Taxes pursuant to this
Agreement, and provided, further, that: 

        (b)   Prometheus
(i) produces to GSK proof of actual payment of said Taxes to the applicable Governmental Authority, (ii) further produces to GSK any other
documents and information reasonably requested by GSK that could assist GSK to obtain any applicable tax credit with respect to said Taxes, (iii) uses Commercially Reasonable Efforts to comply
with reasonable written requests of GSK, at GSK's sole expense, to take any proper action that may minimize or eliminate any Taxes referred to in this Section 5.6(a), (iv) uses
Commercially Reasonable Efforts to cooperate with GSK, at GSK's sole expense, so that GSK may claim a refund of, or an exemption from, such Taxes, and (v) uses Commercially Reasonable Efforts
to otherwise render assistance to GSK, at GSK's sole expense, so that GSK could be in a position to comply with the Applicable Laws pertaining to Taxes of the applicable Governmental Authority. 

***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.

F-16

  

ARTICLE VI  

 OTHER RESPONSIBILITIES  

        6.1    Quality and Testing.    

        (a)    Quality.    GSK shall manufacture, test, package, store, label, release and deliver all Products in accordance
with the Specifications, cGMPs, and Applicable Laws. 

        (b)    Testing of Product.    Prior to release of the Products to finished goods inventory, GSK shall test the
Products in accordance with the testing procedures described in the Specifications, and shall provide Prometheus with a Certificate of Analysis for each batch of Product upon delivery to Prometheus. 

        (c)    Distribution Compliance Audit.    At any time during the Term (but no more than once), during normal business
hours and upon reasonable notice from GSK (and at dates and times mutually agreed upon by the Parties), duly authorized representatives of GSK may review and inspect, to the extent relevant to
Prometheus' marketing, distribution and storage of the Products, Prometheus' premises and facilities, as well as the records and documentation maintained by Prometheus, for the purpose of determining
compliance by Prometheus with its obligations under this Agreement. 

        (d)    Facility Audit and Inspection Rights.    In the event of an Adverse Event, recall, or inspection required by
the FDA or other Governmental Authority during the Term and solely related to the Product, Prometheus shall have the right at any time upon oral or written notice to GSK of
[***] to audit and inspect those portions of the facility used in the manufacture, packaging, storage, testing, holding, distribution or other handling, receiving or invoicing
of the Products for the sole purposes of ensuring compliance with the Specifications, and, as related to the Products, each of cGMPs and Applicable Laws. Prometheus shall have the right to audit and
inspect all inventories of Products contained at such facility. Such audits or inspections shall be limited to not more than [***] and shall occur during normal business hours.
Prometheus' audit and inspection rights under this Section 6.1(d) shall not extend to any portions of the facility, documents, records or other information which do not relate to Products. GSK
may redact information relating to Third Parties or their respective products or materials from any documents deliverable to Prometheus in connection with Prometheus' exercise of its audit and
inspection rights hereunder. Inspection by Prometheus or documentation provided to Prometheus related to any of GSK's suppliers or subcontractors related to the manufacture of Product is subject to
consent of such GSK supplier or subcontractor. GSK may participate in Prometheus' audit and shall respond to any issues raised by Prometheus based on such audit. For the avoidance of doubt, nothing in
this Section 6.1(d) shall obligate GSK to make available to Prometheus documents indicating GSK's underlying costs related to manufacture of the Products. 

        6.2    Nonconformity; Product Complaints, Adverse Events; Recalls.    

        (a)    Notice.    If either Party becomes aware that any batch or shipment of Product has a Nonconformity, at any time
regardless of the status of GSK's testing and quality assurance activities, such Party shall notify the other Party within twenty-four (24) hours of becoming aware of such
Nonconformity. "Nonconformity" means a Product characteristic that is (i) attributable to a Party's failure to manufacture, test, package, store,
label, release or deliver, as applicable, any Product in accordance with the Specifications, cGMPs and/or Applicable Laws or (ii) causes any Product to fail to conform to the Specifications. 

***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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        (b)    Products Subject to Nonconformity.    Any batch or shipment of Product that is the subject of a Nonconformity
shall be handled as follows: 

          (i)  Any
Products held in inventory by GSK shall not be shipped to Prometheus; and 

         (ii)  Any
Products shipped to Prometheus and held in stock by Prometheus shall maintain a "hold" or "unpassed" status, and shall not be released into passed inventory of
Prometheus, until the Parties have completed any investigations related to such Products and mutually approved in writing the disposition of the Product subject to the Nonconformity. 

        (c)    Investigations.    During the Term, GSK shall be responsible for investigating all reports of Nonconformity,
Product complaints, Adverse Events, field alerts, Product recalls and Product-related investigations in order to assure the conformity of Products to Specifications and cGMPs and the safety and
efficacy of the Products. The Parties shall act promptly and shall cooperate fully in such investigations. Unless otherwise specified in the Safety Data Exchange Agreement, within
twenty-four (24) hours after receipt, Prometheus shall notify GSK, via telephone and e-mail, of any and all reports that Prometheus receives of Product complaints,
Adverse Events, field alerts, Product recalls and Product-related investigations. 

        (i)    Recalls.    After conducting an investigation pursuant to this Section 6.2(c), in the event GSK deems it
necessary or is otherwise required by a Governmental Authority to initiate a recall, withdrawal or field correction of, field alert report or comparable report with respect to any Product (in each
instance, a "Product Event"), GSK shall notify Prometheus and Prometheus shall fully cooperate with GSK to address such Product Event. The costs and
expense of such Product Event shall be borne by GSK except to the extent that the recall is required as a result of any Nonconformity occurring after the delivery of the Product to Prometheus'
Destination Site, in which case Prometheus shall bear the costs of such recall. 

        (ii)    Independent Testing.    If the Parties disagree as to whether any Product subject to hold or rejection had a
Nonconformity or latent defect, Prometheus' most senior quality assurance officer and GSK's Manufacturing Division Quality Director, or such other persons as they may designate in writing, shall
confer to review samples and/or batch records, as appropriate. If the disagreement is not resolved, then samples, batch records and other data relating to the batch in dispute shall promptly be
submitted for testing and evaluation to an independent Third Party (including a testing laboratory) approved in writing by both Parties. The findings of the Third Party shall be final and binding on
the Parties. The Product shall be deemed properly rejected if the Product is found by the Third Party to have had a Nonconformity at the time of delivery to Prometheus Destination Site and shall be
deemed accepted by Prometheus if the Product is found by the Third Party to have not had a Nonconformity at the time of delivery to Prometheus Destination Site. The costs of the testing and evaluation
shall be borne by Prometheus except to the extent that the Product is found to have a Nonconformity at the time of delivery to Prometheus Destination Site. 

        (iii)    Replacement/Refunds for Existing Inventory Delivery.    In the event the Existing Inventory Delivery contains
Nonconforming Product, and it is determined pursuant to an investigation under Section 6.2(c) herein that such Nonconformity occurred prior to delivery to the Prometheus' Destination Site, then
GSK shall (1) refund Prometheus the price paid by Prometheus to GSK for the affected Product under the original invoice for such affected Product or (2) reimburse Prometheus for the
actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket charges incurred 

F-18

 

in
connection with the collection, transportation and, as determined at GSK's discretion, return or destruction of the affected Product. 

        6.3    Retention of Product Registrations.    

        (a)   During
the Term, GSK will have sole responsibility for maintaining, and will maintain, the Registrations in the Territory at its expense, including without limitation
filing NDA Annual Reports, and paying all user fees, product fees and establishment fees associated with the Registrations in the Territory. Prometheus will cooperate with GSK with respect to
obtaining and maintaining the Registrations, and will execute, acknowledge and deliver such further instruments at GSK's request, and use Commercially Reasonable Efforts to do all such other acts, as
promptly as possible, which may be necessary or appropriate to obtain and maintain the Registrations in the Territory. Prometheus will, on a timely basis and in response to requests made by GSK from
time to time, provide to GSK all information that Prometheus has from time to time during the Term for the Products that is reasonably necessary and relevant to GSK's obligations hereunder to fulfill
such Registration maintenance requirements (including, but not limited to, providing sales distribution information concerning the Products). 

        (b)   During
the Term, GSK and Prometheus each will make its respective facilities available at reasonable times during business hours for inspection by representatives of
Governmental Authorities
relating to the manufacture, sale, marketing, promotion, distribution, or use of the Products in the Territory. GSK and Prometheus each will notify the other within twenty-four
(24) hours (or, if such twenty-four (24) hour period ends on a day that is not a Business Day, then prior to noon on the next following Business Day) of receipt, and provide
a copy thereof, of any notice of any FDA or other Governmental Authority inspection, investigation or other inquiry, or other material governmental notice or communication, relating to the
manufacture, sale, marketing, promotion, distribution, or use of any Product in the Territory during the Term. Prometheus and GSK will cooperate with each other during any such inspection,
investigation or other inquiry. Prometheus and GSK will discuss any response to observations or notifications received in connection with any such inspection, investigation or other inquiry and each
will give the other an opportunity to comment upon any proposed response before it is made; provided,  however, that Prometheus will be solely responsible
for responding to inquiries and actions from Governmental Authorities relating to Promotional
Activities and Promotional Materials as contemplated by Section 3.2. During the Term, in the event of disagreement concerning the form or content of such response, however, GSK will be
responsible for deciding the appropriate form and content of any response with respect to any of its Governmental Authority cited activities and Prometheus will be responsible for deciding the
appropriate form and content of any response with respect to any of its Governmental Authority cited activities. Prometheus and GSK will provide each other with copies of all correspondence received
by it from, or filed by it with, any Governmental Authority to the extent pertaining to any Product in the Territory or its labeling, packaging, distribution, promotion, advertisement, marketing or
sale in the Territory. Subject to Prometheus' obligation to provide correspondence with Governmental Authorities in accordance with Section 3.2(b)(ii) or this Section 6.3(b), Prometheus
will not provide copies of Promotional Materials to GSK unless requested by GSK in writing as provided in Section 3.2(b)(ii). In addition, GSK will provide Prometheus copies of all material
correspondence received by GSK from, or filed by GSK with, any Governmental Authority to the extent such correspondence or filing could reasonably, in GSK's opinion, have a material affect on
Prometheus' ability to perform its obligations under this Agreement. 

F-19

 

        (c)   During
the Term, GSK will have sole responsibility and authority for, and control of, all package inserts and package labeling (and any changes or supplements thereto)
for the Products, and will have the responsibility at its expense for securing any approvals required by FDA to any such changes or supplements thereto. Prometheus will not at any time do, and neither
will Prometheus permit its agents or representatives to do, any act in the Territory in violation of the Registration for any Product. In the event that any filings are required to be made with or
approvals required to be obtained from applicable regulatory authorities in order to change or supplement the package inserts and labeling, GSK will have the sole responsibility for and authority to
effect such filings and the sole right and discretion on how to effect such changes at GSK's expense. GSK will promptly, but in no event less than five (5) Business Days, advise Prometheus in
writing of any changes or supplements to the package inserts and package labeling for any Product. The Parties acknowledge and agree that all Products sold during the Term will be sold under a GSK
label. 

        6.4    Prosecution and Maintenance of Product Marks and Product Patent Rights.    

        (a)   GSK
will have the obligation to register and maintain, or cause to be registered and maintained, at its cost and expense, the Product Marks in the Territory during the
Term. 

        (b)   Notwithstanding
any other provision of this Agreement to the contrary, GSK and its Affiliates will have the obligation to prosecute and maintain the Product Patent
Rights and Product Know-How during the Term. GSK will not abandon any Product Patent Rights in the Territory during the Term. 

        (c)   GSK
will have the sole right, but not the obligation, at its sole discretion and expense, to maintain and enforce any contract entered into by GSK covering the supply of
any compounds, intermediates, biomaterials, packaging components, containers and other materials used in the manufacture of the Products. 

        (d)   During
the Term, if either Party becomes aware of actual or threatened infringement of any Product Patent Rights anywhere in the Territory by a Third Party, including
any action or proceeding filed in
connection with an ANDA filed by a Third Party related to the Product Intellectual Property, that Party will promptly notify the other Party in writing. During the Term, GSK will have the first right,
but not the obligation, to bring, at its own expense, an infringement action against any Third Party. If GSK does not commence a particular infringement action within [***] of
receipt of the notice of infringement, then Prometheus, after notifying GSK in writing, will be entitled but will have no obligation to bring such infringement action at its own expense. The Party
conducting such action will have full control over and will use Commercially Reasonable Efforts to conduct such action, including settlement thereof subject to Section 6.4(f). In any event,
during the Term, GSK and Prometheus will provide reasonable assistance to one another and will reasonably cooperate in any such litigation at the other's request without expense to the requesting
Party. 

        (e)   GSK
and Prometheus will recover its actual and reasonable out-of-pocket expenses associated with any litigation or settlement thereof from any
recovery made by either Party. In the event GSK was the Party to commence an infringement action pursuant to Section 6.4(d), any excess amount attributable to compensatory or punitive damages
for infringement of any Product Patent Rights will be shared between Prometheus and GSK, provided that Prometheus' share of any excess amount attributable to compensatory or punitive damages for sales
of the infringing product that was the subject of the litigation will be limited to the amount of, or proportionate to, 

***Certain
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F-20

 

compensation
that Prometheus would have been entitled to receive had those been sales of a Product in the Territory made by Prometheus. In the event Prometheus was the Party to commence an
infringement action pursuant to Section 6.4(d), then any excess amount attributable to infringement of any patents included within the Product Intellectual Property will be retained solely by
Prometheus. 

        (f)    If
such infringement litigation or settlement is commenced during the Term, the Parties will keep one another informed of the status of its activities regarding any
litigation or settlement thereof concerning the Product Intellectual Property; provided, however, that
no settlement or consent judgment or other voluntary final disposition of any suit or action pursuant to Section 6.4(d) may be entered into without the consent of the other Party if such
settlement would subject such Party to an injunction or if such settlement or judgment would materially diminish or limit or otherwise materially and adversely affect the rights, activities or
financial interests of such Party. 

        (g)   Each
Party shall retain the right to be represented by counsel of its own selection and its own expense in any suit or other action instituted by the other Party
pursuant to Section 6.4(d). 

ARTICLE VII  

 ROYALTIES AND AUDIT RIGHTS  

        7.1    Compensation.    In consideration of GSK entering into this Agreement, and in addition to its payments for
Product supply under Section 5.3, Prometheus shall pay GSK a royalty of [***] percent ([***]%) of Net Sales of all Products sold by
Prometheus during the Term. All royalty payments will be made by Prometheus to GSK within thirty (30) days of the end of the Term. 

        7.2    Manner of Payment.    

        (a)   All
payments to be made by Prometheus to GSK or its designated Affiliates pursuant to this Agreement will be made in the currency of the United States and by wire
transfer to the designated account in accordance with the wire instructions provided by GSK in writing to Prometheus. 

        (b)   Prometheus
acknowledges and agrees that unauthorized deductions or past due accounts may result in a delay or a suspension of Product shipments, unless such amounts are
subject to a bona fide dispute. 

        7.3    Late Payments.    In the event that any uncontested payment due under this Agreement is not made when due, the
payment will accrue interest from the date due at an interest rate per annum equal to the [***] of (i) [***] percent
([***]%) or (ii) the maximum rate permitted by Applicable Law, calculated based on the number of days that the payment is delinquent. The payment of such interest will
not limit a Party from exercising any other rights it may have as a consequence of the lateness of any payment. 

        7.4    Right of Offset.    The Parties agree that in the event that any undisputed payment obligation on the part of
Prometheus to GSK under the terms of this Agreement is not made by Prometheus when such payment is due, then in such event and as long as such amount remains unpaid GSK will be entitled to offset such
unpaid amount against any amounts which may otherwise be due to Prometheus from GSK under this Agreement. 

***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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        7.5    Audit Rights.    

        (a)   Subject
to the other terms of this Section 7.5, upon prior written notice from GSK to the Prometheus (and at a date and time agreed upon by the Parties), and at
the expense of GSK (except as otherwise provided herein), Prometheus will permit an independent certified public accountant reasonably selected by GSK and reasonably acceptable to Prometheus (the
"Auditor") to inspect (during regular business hours) the records relating to sales of the Products in the Territory for purposes of verifying Net
Sales. Such inspection shall be limited to a single time and must take place within twelve (12) months of expiration of the Term. 

        (b)   The
Auditor will be instructed to provide an audit report containing its conclusions regarding the audit, and specifying whether the amounts paid by Prometheus to GSK
hereunder were correct, and, if incorrect, the amount of any underpayment or overpayment. The Auditor further will be instructed to redact any proprietary information of Prometheus not relevant to the
calculation of royalties prior to providing that audit report to GSK. The audit report will be made available to both Parties but shall deemed to be Confidential Information of Prometheus, and used by
GSK only for purposes germane to this Section 7.5. Absent error, the results of the audit shall be binding on both Parties. 

        (c)   Prometheus
shall have [***] from the release of the audit report to send written notice to GSK that Prometheus disputes the results of such audit
due to error. Within [***] after the date of such notice from Prometheus, the Parties will seek to resolve such dispute by good faith negotiation between the Senior Vice
President of U.S. pharmaceuticals, Research Triangle Park at GSK or his/her designee and Chief Executive Officer of Prometheus or his/her designee (the
"Executives"). The decision of the Executives shall be binding on both Parties. 

        (d)   After
review of the Auditor's report: (i) if there is an underpayment by Prometheus for the period in question, then Prometheus shall pay GSK the full uncontested
amount of that underpayment, and (ii) if there is an overpayment by Prometheus for the period in question, then GSK shall provide to Prometheus a credit against future payments (such credit
equal to the full amount of that overpayment), or, if Prometheus is not obligated to make any future payments to GSK, then GSK shall pay to Prometheus the full amount of that overpayment. Any
uncontested payments due under this section shall be paid within ten (10) business days after the audit report is received, and any underpayments due to GSK shall include interest at the rate
provided in Section 7.3. If the total amount of any underpayment exceeds [***] percent ([***]%) of the amount previously paid by
Prometheus for the period subject to audit, then Prometheus shall pay all costs and expenses for the audit, otherwise GSK shall pay the costs for the audit. 

ARTICLE VIII  

 REPRESENTATIONS AND WARRANTIES  

        8.1    Representations and Warranties of Both Parties.    Each Party hereby represents and warrants to the other Party
that, as of the Effective Date: 

        (a)    Good Standing.    Such Party is duly organized, validly existing and in good standing under the Applicable Law
of the state of its incorporation, is duly qualified to transact the business in which it is engaged in each jurisdiction where failure to be so qualified would have a material adverse effect upon its
business as currently conducted, and has full corporate power and authority to enter into this Agreement and to carry out the provisions of this Agreement. 

***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.

F-22

 

        (b)    Power and Authority.    Such Party has the requisite power and authority and the legal right to enter into this
Agreement, and to perform its obligations hereunder, and has taken all necessary corporate action on its part to authorize the execution and delivery of the Agreement and the performance of its
obligations hereunder. All Persons who have executed this Agreement on behalf of such Party, or who
will execute on behalf of such Party any agreement or instrument contemplated hereby, have been duly authorized to do so by all necessary corporate action. 

        (c)    Binding Obligation.    This Agreement has been duly executed and delivered on its behalf and (assuming the due
execution and delivery hereof by the other Party) each such agreement is a legal and valid obligation binding upon it and is enforceable in accordance with its terms, except that: 

          (i)  such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar Applicable Law now or hereafter in effect relating to creditors
rights generally; and 

         (ii)  such
enforcement may be limited by equitable principles and Applicable Law. 

        8.2    Representations and Warranties of GSK.    GSK hereby represents and warrants to Prometheus that, as of the
Effective Date: 

        (a)    No Violation of Instruments or Contracts.    The execution and the delivery of this Agreement and the
consummation of the transactions contemplated hereby will not: 

          (i)  violate
the Certificate of Incorporation or By-Laws of GSK; 

         (ii)  to
GSK's knowledge, materially conflict with or result in a material breach of any of the terms, conditions or provisions of, or constitute an express event of default
under, any material instrument, agreement, mortgage, judgment, order, award, or decree to which GSK is a party or by which it is bound; or 

        (iii)  except
for the requisite filings under the HSR Act and the expiration or termination of the waiting period thereunder, to GSK's knowledge, require the affirmative
approval, consent, authorization or other order or action of any court, Governmental Authority or of any creditor of GSK or any of its Affiliates. 

        (b)    Compliance with Applicable Law.    

          (i)  GSK
and its Affiliates are, and will ensure that they remain throughout the Term, in compliance with all requirements of Applicable Law within the Territory, except to
the extent that any noncompliance
would not have a material adverse effect on the conduct of the distribution, manufacture or sale of any Product, and would not have a material adverse effect on GSK's ability to perform its
obligations under this Agreement. 

         (ii)  Throughout
the Term, the manufacture, packaging, processing, transport, storage, disposal and other handling of any Products by GSK until delivery to the Destination
Site shall be in accordance with and conform to the Specifications, cGMPs and all material Applicable Laws. 

        (iii)  Neither
GSK nor any of its Affiliates are debarred, suspended or otherwise excluded by any Governmental Authority from receiving government contracts in the Territory,
nor is it, or its Affiliates or any of its employees debarred under the applicable provisions of the FD&C Act. 

F-23

 

        (iv)  Except
as set forth in Schedule 3.2, the GSK Promotional Materials have been reviewed and pre-cleared under 21 CFR 314 Subpart H by DDMAC in
accordance with the FD&C Act. 

        (c)   Other
than for Third Party claims, GSK's sole liability and Prometheus' exclusive remedy for GSK's breach of the foregoing warranty in Sections 8.2(b)(ii) and
8.2(b)(iii) shall be as set forth in Section 6.2(c)(iii). 

        (d)    Disclaimer:    THE REPRESENTATIONS AND WARRANTIES OF GSK PROVIDED IN THIS AGREEMENT DO NOT APPLY TO ANY
PRODUCTS TO THE EXTENT THAT SUCH PRODUCTS FAIL TO CONFORM TO SPECIFICATIONS DUE TO (i) OCCURRENCES AFFECTING OR ALTERING THE PRODUCTS AFTER THEY ARE DELIVERED TO THE DESTINATION SITE, OR
(ii) ACTIONS TAKEN OR FAILED TO BE TAKEN AFTER THE PRODUCTS WERE DELIVERED BY GSK TO PROMETHEUS. 

        8.3    Representations and Warranties of Prometheus.    Prometheus hereby represents and warrants to GSK that, as of
the Effective Date: 

        (a)    No Violation of Instruments or Contracts.    The execution and the delivery of this Agreement and the
consummation of the transactions contemplated hereby will not: 

          (i)  violate
the Certificate of Incorporation or By-Laws of Prometheus; 

         (ii)  to
Prometheus' knowledge, materially conflict with or result in a material breach of any of the terms, conditions or provisions of, or constitute an express event of
default under, any material instrument, agreement, mortgage, judgment, order, award, or decree to which Prometheus is a party or by which it is bound, or 

        (iii)  except
for the requisite filings under the HSR Act and the expiration or termination of the waiting period thereunder, to Prometheus' knowledge, require the
affirmative approval, consent, authorization or other order or action of any court, Governmental Authority or of any creditor of Prometheus or any of its Affiliates. 

        (b)    Compliance with Applicable Law.    

          (i)  Prometheus
and its Affiliates are, and will ensure that they remain throughout the Term, in compliance with all requirements of Applicable Law, Specifications and cGMPs
in connection with the transport, store, marketing, promotion, distribution and sale of the Product within the Territory, except to the extent that any noncompliance would not have a material adverse
effect upon its ability to perform its obligations under this Agreement. 

         (ii)  Neither
Prometheus nor any of its Affiliates are debarred, suspended or otherwise excluded by any Governmental Authority from receiving government contracts in the
Territory, nor is it, or its Affiliates or any of its employees debarred under the applicable provisions of the FD&C Act. 

        8.4    No Implied Representations or Warranties.    OTHER THAN AS EXPRESSLY SET FORTH IN THIS ARTICLE VIII, NEITHER
PARTY MAKES OR GIVES ANY OTHER REPRESENTATIONS OR WARRANTIES UNDER THIS AGREEMENT WHATSOEVER, AND EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE, AND WARRANTIES OF NON-INFRINGEMENT OF THE
INTELLECTUAL PROPERTY OF ANY THIRD PARTY. NOTHING IN THIS SECTION 8.4 OR THIS AGREEMENT IS INTENDED TO MODIFY AND/OR LIMIT ANY PROVISIONS, OBLIGATIONS, RIGHTS OR REMEDIES IN THE ASSET PURCHASE
AGREEMENT. 

        8.5    No Reliance by Third Parties.    The representations and warranties of a Party set forth in this Agreement are
intended for the sole and exclusive benefit of the other Party hereto, and may not be relied upon by any Third Party. 

F-24

 
ARTICLE IX  

 DISPUTE RESOLUTION AND INDEMNIFICATION  

        9.1    Dispute Resolution.    Except as set forth in Section 7.5(c), if a dispute or controversy regarding any
right or obligation under this Agreement, arises between the Parties which they are unable to resolve (a "Dispute"), each of the Parties will, within a
reasonable amount of time after any such Dispute arises (or in the event that the Cure Period applies, then within a reasonable amount of time after the expiration of the Cure Period), be entitled to
submit to the other Party written notice of such Dispute, with such notice setting forth in reasonable detail the nature of the Dispute (the "Dispute
Notice"). For a period of [***] after the date of the receiving Party's receipt of the Dispute Notice, the Parties will seek to resolve such Dispute by
good faith negotiation between the Executives. If at the end of such [***] period the Dispute remains unresolved, the Parties may seek relief for such Dispute using any
appropriate administrative or judicial
mechanism which may be available, subject to Section 13.12. The provisions of this Section 9.1 will not restrict in any way the Parties' rights to seek preliminary injunctive or other
equitable relief from any court having jurisdiction. 

        9.2    GSK Indemnification Obligations.    GSK will indemnify, defend and hold harmless Prometheus, its Affiliates,
and their respective officers, directors, trustees, agents, employees and sublicensees (collectively, "Prometheus Indemnitees"), from and against any
and all losses, liabilities, claims, obligations, demands, awards, settlements, penalties, fines, suits, damages, costs (including costs of investigation, defense and enforcement of this Agreement),
fees, taxes, and expenses, including reasonable attorneys' fees, experts' fees and expenses (collectively, "Losses"), involving a claim or action of a
Third Party, incurred or suffered by the Prometheus Indemnitees or any of them by reason of, arising out of or in connection with: 

        (a)   the
negligent, reckless or willful actions or omissions of GSK in performing GSK's obligations under this Agreement; 

        (b)   the
material breach of any obligation, covenant, warranty or representation made by GSK under this Agreement; 

        (c)   the distribution, marketing, advertisement, promotion or sale of any Product in the Territory by or on behalf of GSK
and/or its Affiliates prior to the Commencement Date; 

        (d)   any violation of Applicable Law by GSK in the performance of any of GSK's obligations under this Agreement; 

        (e)   the
content of the GSK Promotional Materials; 

        (f)    any
claim that the Product, the Product Intellectual Property, the Seller Brands or GSK's manufacturing processes or procedures infringe upon or misappropriate the
Intellectual Property rights of any Third Party; or 

        (g)   Taxes
(or the nonpayment thereof) that are the responsibility of GSK pursuant to Section 5.6; 

        provided, however, except in each case to the extent that such Loss is attributable to any
matter for which Prometheus is obligated to indemnify a GSK Indemnitee as provided in Section 9.3 below. 

***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.

F-25

   
        9.3    Prometheus Indemnification Obligations.    Prometheus will indemnify, defend and hold harmless GSK, its
Affiliates, and their respective officers, directors, trustees, agents, employees and sublicensees (collectively, "GSK Indemnitees"), from and against
any and all Losses, involving a claim or action of a Third Party, incurred or suffered by the GSK Indemnitees or any of them, by reason of, arising out of or in connection with: 

        (a)   the
negligent, reckless or willful actions or omissions of Prometheus in performing Prometheus' obligations under this Agreement; 

        (b)   the
material breach of any obligation, covenant, warranty or representation made by Prometheus under this Agreement; 

        (c)   any
claims for liability relating to the Product which arise from events or circumstances occurring on or after the Closing Date; 

        (d)   the
distribution, marketing, advertisement, promotion or sale of any Product by Prometheus or its Affiliates during the Term; 

        (e)   any
violation of Applicable Law by Prometheus in the performance of any of Prometheus' obligations under this Agreement; 

        (f)    any
claim that use of the Prometheus corporate trademark on the GSK Promotional Materials infringe upon or misappropriate the Intellectual Property rights of any Third
Party; 

        (g)   any
claim that the Product, the Product Intellectual Property, the Seller Brands or GSK's manufacturing processes or procedures infringe upon or misappropriate the
Intellectual Property rights of any Third Party solely to the extent related to a change in Specifications requested by Prometheus after the Effective Date; or 

        (h)   Taxes
(or the nonpayment thereof) that are the responsibility of Prometheus pursuant to Section 5.6; 

        provided, however, except in each case to the extent that such Loss is attributable to any
matter for which GSK is obligated to indemnify a Prometheus Indemnitee as provided in Section 9.2 above. 

        9.4    Indemnity Procedures.    A Person entitled to indemnification pursuant to either Section 9.2 or
Section 9.3 will hereinafter be referred to as an "Indemnitee." A Party obligated to indemnify an Indemnitee hereunder will hereinafter be
referred to as an "Indemnitor." In the event an Indemnitee is seeking indemnification under either Section 9.2 or Section 9.3, the
Indemnitee will inform the Indemnitor of a claim as soon as reasonably practicable after it receives notice of the claim, it being understood and agreed that the failure by an Indemnitee to give
notice of a Third Party claim as provided in this Section 9.4. will not relieve the Indemnitor of its indemnification obligation under this Agreement except and only to the extent that such
Indemnitor is actually prejudiced as a result of such failure to give notice. The Indemnitee will permit the Indemnitor to assume direction and control of the defense of the claim (including, subject
to this Section 9.4, the right to settle the claim solely for monetary consideration), and, at the Indemnitor's expense, will co-operate as reasonably requested in the defense of
the claim. The Indemnitee will have the right to retain its own counsel at its own expense; provided,  that, if the Indemnitor assumes control of such
defense and the Indemnitee reasonably concludes, based on advice from counsel, that the Indemnitor and
the Indemnitee have conflicting interests with respect to such action, suit, proceeding or claim, the Indemnitor will be responsible for the reasonable fees and expenses of counsel to the Indemnitee
solely in connection therewith. The Indemnitor may not settle such action or claim, or otherwise consent to an adverse judgment in such action or claim, which would subject the Indemnitee to an
injunction or if such settlement or judgment would materially diminish or limit or otherwise adversely affect the rights, activities or financial interests of the Indemnitee, without the express
written consent of the 

F-26

 

Indemnitee;  provided, that, the Parties expressly acknowledge that any payment of Tax by a Party will
not constitute the settlement of a Third-Party Claim. 

        9.5    No Punitive or Exemplary Damages.    IN NO EVENT WILL EITHER PARTY BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL
OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) SUFFERED BY EITHER PARTY, RESPECTIVELY UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT OF ANY SUCH DAMAGES PAID TO A THIRD PARTY AS
PART OF A THIRD PARTY CLAIM. 

        9.6    Insurance.    

        (a)    GSK Insurance Requirements.    During the Term of this Agreement, GSK shall at all times maintain insurance
policies or self-insurance in such amounts and with such scope of coverage as are adequate to cover GSK's obligations under this Agreement. 

        (b)    Prometheus Insurance Requirements.    During the Term of this Agreement, Prometheus shall at all times maintain
insurance policies or self-insurance in such amounts and with such scope of coverage as are adequate to cover Prometheus' obligations under this Agreement. 

ARTICLE X  

 FORCE MAJEURE  

        10.1    Force Majeure.    Any delays in performance by any Party under this Agreement, other than with respect to the
payment of obligations, shall not be considered a breach of this Agreement if and to the extent caused by occurrences beyond the reasonable control of the Party affected, including but not limited to
acts of God, embargoes, governmental restrictions, terrorism, materials shortages or failure of any supplier (where such shortage or failure is attributable to an event of force majeure suffered by
such supplier), fire, flood, explosion, earthquake, hurricanes, storms, tornadoes, riots, wars, civil disorder, failure of public utilities or common carriers, labor disturbances, rebellion or
sabotage. The Party suffering such occurrence shall notify the other Party as soon as practicable of such inability and of the period for which such inability is expected to continue, and any time for
performance hereunder shall be extended by the actual time of delay caused by the occurrence; provided,  that, the Party suffering such occurrence uses
Commercially Reasonable Efforts to mitigate any damages incurred by the other Party. 

ARTICLE XI  

 CONFIDENTIALITY  

        11.1    Definition of "GSK Confidential Information".    As used herein, the term "GSK
Confidential Information" shall mean all confidential business and technical communications, documents and other information, whether in written, oral or other form, which GSK
or a GSK Affiliate furnishes or discloses to Prometheus or which Prometheus otherwise learns in connection with the negotiation or performance of this Agreement (whether relating to GSK, a GSK
Affiliate or any Third Party for which GSK has an obligation of confidentiality). Prometheus agrees that the provisions of this Agreement shall apply to all GSK Confidential Information disclosed by
GSK or a GSK Affiliate to Prometheus or learned by Prometheus prior to the Effective Date. Prometheus represents and warrants that prior to the Effective Date, it has not used or disclosed to any
Third Party any GSK Confidential Information, except as would be permitted hereunder. 

        11.2    Definition of "Prometheus Confidential Information".    As used herein, the term
"Prometheus Confidential Information" shall mean all confidential business and technical communications, documents or other information, in each case,
not constituting rights of GSK, whether in written, oral or other form, of Prometheus or a Prometheus Affiliate that are disclosed to GSK by Prometheus or a Prometheus Affiliate or GSK otherwise
learns in connection with the negotiation or performance of 

F-27

 

this
Agreement; provided, however, that all information relating to the Products shall be GSK
Confidential Information. GSK agrees that the provisions of this Agreement shall apply to all Prometheus Confidential Information disclosed by Prometheus or any Prometheus Affiliate or learned by GSK
prior to the Effective Date. 

        11.3    Treatment of Confidential Information.    Both during the Term of this Agreement and thereafter, and except as
mutually agreed to by the Parties, Prometheus shall treat all GSK Confidential Information and GSK shall treat all Prometheus Confidential Information in accordance with the requirements of this
Article XI. For convenience, GSK Confidential Information and Prometheus Confidential Information are both referred to herein as "Confidential
Information" for purposes of establishing the obligations of each Party with regard to the other Party's Confidential Information. 

        (a)    Nondisclosure.    Confidential Information of the other Party shall be kept strictly confidential by the
receiving Party and, except as expressly permitted herein or otherwise mutually agreed to by the Parties, shall not be disclosed to any Third Party by the receiving Party in any manner whatsoever
including without limitation, any Affiliates, in whole or in part, without first obtaining the other Party's prior written consent to such disclosure. The standard of care required of each Party in
protecting the confidentiality of the other Party's Confidential Information shall be at least the same standard of care that the receiving Party uses in protecting its own confidential and trade
secret information, but in no event shall either Party use less than a reasonable standard of care. Except as mutually agreed upon by the Parties, Confidential Information may be used by the receiving
Party only for the purpose of performing under this Agreement. 

        (b)    Permitted Exceptions.    Each Party may disclose the other Party's Confidential Information (i) to its
employees or outside advisors and financing sources in connection with this Agreement who reasonably need to know such information for the purpose of advising or assisting it in connection with this
Agreement (each, a "Representative"), (ii) to a Third Party pursuant to a contractual obligation under a material contract, whereby failure to
disclose such Confidential Information shall have material adverse effect on the disclosing Party, and (iii) to any Parties required under operation of law. Prior to disclosing any Confidential
Information to any Representative pursuant to this Section 11.3(b), the receiving Party will inform such Representative of the proprietary nature of the Confidential Information and will
require such Representative to agree in writing (except in the case of outside legal advisors or auditors, who may orally agree) to be bound by the requirements of this Article XI and not to
use or disclose the Confidential Information except as permitted herein. Each Party agrees to be responsible for any breach of these confidentiality obligations by its Representatives. It is
specifically agreed that (i) GSK may disclose Prometheus Confidential Information to any GSK Affiliate under the same conditions provided in this Article XI on a
need-to-know basis and
(ii) Prometheus may disclose GSK Confidential Information to any Prometheus Affiliate under the same conditions provided in this Article XI on a need-to-know
basis. 

        (c)    Consent.    Confidential Information of the other Party shall not be utilized by a receiving Party except as
expressly permitted herein, without first obtaining the other Party's prior written consent to such utilization and without first entering into a separate agreement duly executed by authorized
representatives of the Parties hereto. 

        11.4    Excluded Information.    Notwithstanding any provision herein to the contrary, the requirements of this
Article XI shall not apply to any information of either Party which: 

        (a)   at
the time of disclosure hereunder is generally available to the public; 

        (b)   after
disclosure hereunder becomes generally available to the public, except through breach of this Article XI by the receiving Party or its Representatives; 

F-28

 

        (c)   was
not acquired directly or indirectly from the disclosing Party or its Affiliates and which the receiving Party lawfully had in its possession prior to disclosure by
the disclosing Party; 

        (d)   is
independently developed by employees or agents of the receiving Party without the use of the Confidential Information of the disclosing Party; or 

        (e)   becomes
available to the receiving Party from a Third Party that is not legally prohibited from disclosing such Confidential Information, provided such information was
not acquired directly or indirectly from the disclosing Party or its Affiliates. 

        11.5    Notification of Mandatory Disclosure.    

        (a)    Procedures.    In the event that either Party is required by Applicable Law or by judicial or administrative
process to disclose any part of the other Party's Confidential Information, such Party
shall (i) promptly notify the other Party of each such requirement and identify the documents so required thereby, so that the other Party may seek an appropriate protective order or other
remedy and/or waive compliance by the first Party with the provisions of this Article XI, (ii) consult with the other Party on the advisability of taking legally available steps to
resist or narrow the scope of such requirement, (iii) assist the other Party in seeking a protective order or equivalent, and (iv) comply with any applicable protective order or
equivalent. 

        (b)    Limitations.    If, in the absence of such a protective order or such a waiver by the other Party of the
provisions of this Article XI, the first Party is nonetheless required by Applicable Law to disclose any part of the other Party's Confidential Information, the first Party may disclose such of
the other Party's Confidential Information without liability under this Agreement, except that the first Party shall (i) furnish only that portion of the other Party's Confidential Information
which is legally required and (ii) use its best efforts to obtain an order or other reliable assurances that confidential treatment will be accorded to the portion of such Confidential
Information so required to be disclosed. 

        11.6    Publicity.    Prometheus will not issue any press release or otherwise make any public statement,
advertisement or disclosure with respect to this Agreement, any of the Products, or the transactions contemplated hereby without the prior written consent of GSK, such consent not to be unreasonably
withheld and GSK will not issue any press release or otherwise make any public statement with respect to this Agreement or that refers directly or indirectly to Prometheus as a distributor of the
Products without the prior written consent of Prometheus, such consent not to be unreasonably withheld; provided,  however, that either Party shall be
entitled to make a public announcement of this Agreement after giving prior written notice to the other Party
hereto, if, in the opinion of the disclosing Party's legal counsel, such announcement complies with Applicable Laws and provided to the extent practicable the other Party has received at least two
(2) days notice. 

        11.7    Return of Confidential Information.    At any time upon the request of the other Party, to the extent such
Confidential Information is not reasonably necessary to enable a Party to perform its obligations under this Agreement, the receiving Party shall promptly return to the other Party or destroy the
other Party's Confidential Information, and shall destroy all copies thereof, together with all notes, drawings, abstracts and other information relating to the other Party's Confidential Information
prepared by the receiving Party or any of its Representatives, regardless of the medium in which such information is stored; provided,  however, that the
receiving Party may maintain a single archival copy of the other Party's Confidential Information in its files for purposes of
establishing the extent of disclosures by the other Party under this Agreement. At either Party's written request, such Party's Confidential Information that is otherwise required to be returned to it
shall be destroyed by the receiving Party and such destruction shall be certified in writing by an authorized officer of the receiving Party. The return and/or destruction of such Confidential
Information as provided above shall not relieve the receiving Party of its other obligations under this Article XI. 

F-29

 
ARTICLE XII  

 TERM AND TERMINATION  

        12.1    Term.    The term of this Agreement will commence on the Effective Date and, unless sooner terminated as
provided in this Article XII, expire on the Closing Date ("Term"). 

        12.2    Termination for Material Breach.    Each Party will be entitled to terminate this Agreement in its entirety at
any time during the Term by written notice to the other Party in the event that the other Party is in material default or breach of any of its obligations hereunder, and fails to remedy any such
default or breach within [***] (the "Cure Period") after notice thereof by the
non-defaulting/non-breaching Party. If such default or breach is not corrected within the applicable Cure Period, the non-defaulting/non-breaching Party
will have the right to immediately terminate this Agreement by giving written notice to the Party in default or breach. If the Parties in good faith dispute the existence of a material breach or
whether a Party has cured a material breach, termination of this Agreement shall not be deemed to occur until such dispute has been resolved by the Parties' designated executives in accordance with
Section 9.1 hereof. 

        12.3    Termination for Withdrawal of Any Product.    In the event that any Product is withdrawn by the FDA in the
Territory pursuant to its rights under 21 C.F.R. 314 Subpart H, this Agreement shall immediately and partially terminate with respect to such Product or, if all of the Products are withdrawn,
then this Agreement shall be immediately terminated in its entirety. 

        12.4    Termination Due to Termination of Asset Purchase Agreement.    In the event that the Asset Purchase Agreement
is terminated in accordance with the terms thereof, this Agreement shall immediately terminate. 

        12.5    Bankruptcy.    Either Party may terminate this Agreement in its entirety at any time during the Term by giving
written notice to the other Party if the other Party files in any court or agency pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver or trustee of the Party or of its assets, or if the other Party proposes a written agreement of composition or extension of
its debts, or if the other Party is served with an involuntary petition against it, filed in any insolvency proceeding, and such petition will not be dismissed with sixty (60) calendar days
after the filing thereof, or if the other Party proposes or is a party to any dissolution or liquidation, or if the other Party makes an assignment for the benefit of creditors. 

        12.6    Effect of Termination.    Upon the effective date of an early termination of this Agreement for any reason,
all licenses and rights granted to Prometheus by GSK under this Agreement, including, without limitation under the Product Intellectual Property, will terminate, and all rights therein will revert to
GSK. Upon the early termination of this Agreement, Prometheus will: 

        (a)   at
GSK's discretion, either destroy all Promotional Materials, or assign and transfer to GSK all such Promotional Materials (including, without limitation, any copyright
rights therein), at which time such Promotional Materials will be regarded as GSK's Confidential Information; 

        (b)   return
to GSK all relevant records, materials or Confidential Information relating to the Products in Prometheus' (or any of its Affiliates' or contractors') possession;
and 

        (c)   cease
all marketing, sale, promotion, advertising and distribution of the Products in the Territory; provided that GSK shall repurchase all remaining Product from
Prometheus at Prometheus' cost therefor if the termination is not in response to a material breach of Prometheus and so long as Prometheus has complied with its obligations hereunder with regard to
such Product, including the receipt, storage and handling of such Product. 

***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.

F-30

 

        12.7    Survival Upon Termination or Expiration.    

        (a)   The
following provisions will survive any expiration or termination of this Agreement for the time period specified in such Sections or Articles, as applicable, or if no
such time period is specified, indefinitely: 

          (i)  Sections 3.6,
3.8, 5.3, 5.6, 6.2, 7.1, 7.3, 7.5, 12.6 and 12.7 and Article IX, Article XI and Article XIII; 

         (ii)  The
foregoing notwithstanding, if this Agreement expires on the Closing Date and the Asset Purchase Agreement becomes effective, the terms of Article XI shall
not survive expiration of this Agreement and the confidentiality provisions of the Asset Purchase Agreement shall govern the rights and responsibilities of the Parties with respect to Confidential
Information. 

        (iii)  Article I
for the sole purposes of interpreting the obligations and liabilities between the Parties surviving expiration or termination of this Agreement. 

        (b)   Upon
expiration or termination of this Agreement, GSK will have the right to retain any sums already paid by Prometheus hereunder, and GSK will have the right to receive
all payments previously accrued under Section 7.1. 

        (c)   Expiration
or termination of this Agreement will not relieve the Parties of any liability which accrued hereunder prior to the effective date of such termination,
including any payment obligations, nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement nor
prejudice either Party's right to obtain performance of any obligation. 

ARTICLE XIII  

 MISCELLANEOUS PROVISIONS  

        13.1    Standard Forms.    In all communications, GSK and Prometheus may employ their standard forms, but nothing in
those forms shall be construed to modify or amend the terms and conditions of this Agreement, and, in the case of any conflict herewith, the terms and conditions of this Agreement shall control. 

        13.2    Notices.    In addition to the other specific procedures for notification required herein, all notices,
demands, requests and other communications made hereunder shall be in writing and shall be given either by personal delivery, by nationally recognized overnight courier (with charges prepaid), or by
facsimile transmission (with telephone confirmation), and shall be deemed to have been given or made: (i) if personally delivered, on the day of such delivery; (ii) if sent by overnight
courier, on the day following the date deposited with such overnight courier service; or (iii) if by facsimile transmission, on the date transmitted to receiving facsimile machine and confirmed
by telephone, in each case pending the designation of another address, addressed as follows: 

If to GSK:

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

5 Moore Drive

Research Triangle Park, North Carolina 27709

Attention: Senior Vice President, US Pharmaceuticals RTP

Facsimile: (919) 315-3183

F-31

 

and

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

P.O. Box 13398

Five Moore Drive

Research Triangle Park, NC 27709-3398

Attention: Attention: Director of Contract Manufacturing NA Rx

Facsimile: (704) 625-9163 

With a copy (which shall not constitute notice) to:

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

2301 Renaissance Boulevard

King of Prussia, PA 19406-2772

Vice President and Associate General Counsel, Business Development Transactions Team

Facsimile: (610) 787-7084

If to Prometheus:

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: President

Facsimile: (858) 410-1945 

With a copy (which shall not constitute notice) to:

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: Legal Department

Facsimile: (858) 332-3393 

        13.3    Independent Contractors.    In the exercise of its obligations and in respect of its rights and entitlements
hereunder or in respect hereof, Prometheus and GSK are and shall in all respects be treated as independent contractors with respect to each other. Neither Party shall be deemed to be a
co-venturer or partner of the other. Neither Party is an employee or a legal representative of the other Party for any purpose. Neither Party shall have the authority to enter into any
contracts in the name of or on behalf of the other Party. 

        13.4    Entire Understanding.    This Agreement, the Schedules attached hereto and any other document identified
herein, represent the entire understanding and agreement between the Parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and
understandings between the Parties with respect to such subject matter, which are hereby expressly terminated. 

        13.5    Unintentional Omissions.    The Parties acknowledge that they have expended substantial effort in preparing
this Agreement and attempting to describe, in the Schedules hereto, as thoroughly and precisely as possible, Specifications, Products, and other information. However, despite these efforts, the
Parties acknowledge the possibility of involuntary or inadvertent omissions from the Schedules. The Parties will agree in writing to the changes to be made to the Schedules to add these inadvertent or
involuntary omissions and any such written agreement executed by the Parties shall serve as an amendment to this Agreement. 

F-32

 

        13.6    Transferability; Binding Effect.    Neither this Agreement, nor any of the rights or obligations of a Party
may be directly or indirectly assigned, sold, delegated or otherwise disposed of without the prior written consent of the other Party, which consent may not be unreasonably withheld;  provided,
however, that either Party may assign this Agreement to an Affiliate, including any successor
in interest by way of any reincorporation or other reorganization, and either Party may assign this Agreement to a successor by merger, acquisition, or sale of all or substantially all of such Party's
business assets in the field to which this Agreement relates without the consent of the other Party, provided that in each case such assigning Party shall continue to be liable for any breaches of
this Agreement by the assignee. 

        13.7    Amendment.    Any amendment, modification or supplement of or to any provision of this Agreement, including
the Schedules hereto, shall be effective only in a writing and signed by a duly authorized officer of suitable title of all Parties hereto. The Parties hereto waive the right to amend the provisions
of this Section 13.7 orally. 

        13.8    Severability.    If and to the extent that any court of competent jurisdiction holds any provision (or any
part thereof) of this Agreement to be invalid or unenforceable, such holding shall in no way affect the validity or enforceability of the remainder of this Agreement, and the invalid or unenforceable
provision shall be fully severed from this Agreement and there shall automatically be added in lieu thereof a provision as similar in terms and intent to such severed provision as may be legal, valid
and enforceable. 

        13.9    Waiver.    Any failure of Prometheus or GSK to comply with any obligation, covenant, agreement or condition
herein contained may be expressly waived, in writing only, by the other Party hereto and such waiver shall be effective only in the specific instance and for the specific purpose for which made or
given. 

        13.10    Drafting Ambiguities.    Each Party to this Agreement and its counsel have reviewed and revised this
Agreement. The rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement or any amendment or
Schedule to this Agreement. 

        13.11    Headings; Schedules; Counterparts.    

        (a)    Headings.    The headings of the Sections of this Agreement are for reference purposes only, are not part of
this Agreement and shall not in any way affect the meaning or interpretation of this Agreement. 

        (b)    Schedules.    All Schedules delivered pursuant to this Agreement shall be deemed part of this Agreement and
incorporated herein by reference, as if fully set forth herein. All provisions contained in any Schedule delivered by or on behalf of the Parties hereto, or in connection with the transactions
contemplated hereby, are an integral part of this Agreement. 

        (c)    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same instrument. 

        13.12    Governing Law.    This Agreement (including any claim or controversy arising out of or relating to this
Agreement) shall be governed by the law of the State of New York without regard to conflict of law principles that would result in the application of any Applicable Law other than the laws of the
State of New York. All actions arising out of or relating to this Agreement shall be heard and determined exclusively in the Supreme Court of the State of New York, and any appellate court from any
thereof, in any action arising out of or relating to this Agreement, or for recognition or enforcement of any judgment relating to this Agreement, and each of the Parties hereby irrevocably and
unconditionally (a) agrees not to commence any such action except in such courts, (b) agrees that 

F-33

 

any
claim in respect of any such action may be heard and determined in the Supreme Court of the State of New York, (c) waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any action in the Supreme Court of the State of New York, and (d) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action in the Supreme Court of the State of New York. Each of the Parties hereto agrees that a final judgment in any such action shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each Party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 13.2. Nothing in this Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by Applicable Law. 

        13.13    Further Actions.    Each Party agrees to execute, acknowledge and deliver such further instruments, and to do
all such other commercially reasonable acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 

[The remainder of this page is intentionally left blank.]

F-34

 

        IN
WITNESS WHEREOF, the Parties have caused this Distribution, Supply and Transition Agreement to be executed by their duly authorized representatives as of the Effective Date. 

	 	 	SMITHKLINE BEECHAM CORPORATION d/b/a GLAXOSMITHKLINE
	

 	
 	

By:	

 
	 	 	 	
 Name: Donald F. Parman

Title: Vice President and Secretary
	

 	
 	
PROMETHEUS LABORATORIES INC.
	

 	
 	

By:	

 
	 	 	 	
 Name: Joseph M. Limber

Title: President and Chief Executive Officer

F-35

EXHIBIT A  

 ARTICLE XIV SAFETY DATA EXCHANGE AGREEMENT  

        This Safety Data Exchange Agreement (this "Agreement") is entered into as of the
[        ] day of October, 2007 (the "Execution Date"), by and between Prometheus Laboratories Inc., a corporation
organized under the laws of California, having a place of business at 9410 Carroll Park Drive, San Diego, CA 92121 ("Prometheus") and SmithKline Beecham
Corporation d/b/a GlaxoSmithKline, a Pennsylvania corporation, with its principal place of business at One Franklin Plaza, 200 North 16th Street, Philadelphia, PA 19101
("GSK"). Prometheus and GSK are sometimes collectively referred to herein as the "Parties" and separately as a "Party." 

        WHEREAS,
GSK and Prometheus are, simultaneously with the execution of this Agreement, entering into that certain Asset Purchase and Sale Agreement (the "Asset Purchase Agreement")
pursuant to which Prometheus is purchasing from GSK certain assets, including the Products (as such term is defined in the Asset Purchase Agreement); 

        WHEREAS,
in connection with the sale of such assets by GSK to Prometheus pursuant to the Asset Purchase Agreement, GSK and Prometheus are, simultaneously with the execution of this
Agreement, entering into that certain Distribution Supply and Transition Agreement (the "Distribution Agreement") pursuant to which Prometheus will exclusively market, promote and distribute the
Products in the Territory (as such capitalized terms are defined in the Asset Purchase Agreement). 

        NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby
mutually acknowledged, Prometheus and GSK hereby agree as follows: 

1.    Definitions.    

        1.1    "Abuse" means persistent or sporadic intentional excessive use of a
Product by a patient accompanied by harmful physical and/ or psychological effects. 

        1.2    "Adverse Event" or "AE"
means any untoward medical occurrence in a patient temporally associated with the use of any Product, whether or not considered related to such Product, including (a) any unfavorable and
unintended sign, symptom, or disease (new or exacerbated) temporally associated with the use of any Product; (b) an Adverse Event occurring from an overdose, whether accidental or
intentional, related to any Product; (c) an Adverse Event occurring from drug abuse related to any Product; and (d) any failure of expected pharmacological action, or such other
definition as may from time to time be set forth in 21 CFR Part 314.80. For a marketed Product, AEs can also include failure to produce expected benefits (i.e. lack of efficacy),
and adverse events associated with circumstances of Abuse or Misuse. Adverse Events include "Serious Adverse Events". 

        1.3    "Closing" has that meaning ascribed to such term in the Asset Purchase
Agreement. 

        1.4    "Confidential Information" has that meaning ascribed to such term in the
Distribution Agreement. 

        1.5    "Day" means a calendar day. 

        1.6    "Marketing Authorisation" such authorisation(s) granted by the relevant
regulatory authorities which are necessary to market the Product in the Territory. 

        1.7    "Product" or "Products"
has that meaning ascribed to such term in the Asset Purchase Agreement. 

        1.8    "Misuse" means the use of a Product in a way that is not in accordance
with its Regulatory or Marketing Authorisation accompanied by harmful physical and/or psychological effects. 

        1.9    "Pregnancy Report" means a report of pregnancy in a patient to whom a
Product has been administered or a report of a pregnancy where the father is a patient or trial subject to whom a Product has been administered. 

        1.10    "Receipt" means such time at which Prometheus (including any member of
the personnel of Prometheus) becomes aware of a report of an AE or a Pregnancy Report. For the purposes of this definition, "personnel" includes those persons employed by Prometheus or persons engaged
by Prometheus for the provision of services. 

        1.11    "Serious Adverse Event" means an Adverse Event occurring at any dose
that results in any of the following outcomes: death, a life-threatening Adverse Event, inpatient hospitalization or prolongation of existing hospitalization, a persistent or significant
disability/incapacity, or a congenital anomaly/birth defect. Important medical events that may not result in death, be life-threatening, or require hospitalization may be considered a
Serious Adverse Event when, based upon appropriate medical judgment, they may jeopardize the patient or subject and may require medical or surgical intervention to prevent one of the outcomes listed
in this definition. 

        1.12    "Territory" has that meaning ascribed to such term in the Distribution
Agreement. 

2.    Exchange of AEs and Pregnancy Reports.    

        2.1    During the term of the Distribution Agreement Prometheus shall provide GSK in accordance with the contact information on
Appendix 1 with all information regarding AEs and Pregnancy Reports which it receives arising from any source, in the form in which it is received, immediately upon, and in any event no later
than twenty-four (24) hours (or three (3) Days in the event the time period would expire during a weekend or public holiday) of Receipt. 

        2.2    After the Closing of the Asset Purchase Agreement GSK shall provide Prometheus in accordance with the contact information
on Appendix 1 with all information regarding AEs and Pregnancy Reports which it receives arising from any source, in the form in which it is received, immediately upon, and in any event no
later than twenty-four (24) hours (or three (3) Days in the event the time period would expire during a weekend or public holiday) of Receipt. 

3.    Confidential Information.    

        3.1    During the term of the Distribution Agreement any information transmitted to GSK by Prometheus hereunder will be deemed
to be the "Confidential Information of GSK" as such term is defined in Section 11.1 of the Distribution Agreement and subject to the terms of Article XI thereof. 

        3.2    During the term of the Asset Purchase Agreement any information transmitted to Prometheus by GSK hereunder will be deemed
to be "Purchaser Proprietary Information" as such term is defined in Section 8.1(b) of the Asset Purchase Agreement and subject to the terms of Section 8.1 thereof. 

        3.3    The Parties shall ensure that to the extent any Confidential Information is provided by email, that those emails and any
attachments sent to the receiving Party are encrypted. The Parties shall agree upon the appropriate software and email service to be utilized by the Parties for the purposes of secure email exchange
of information exchanged under these terms. The Parties will maintain all subscriptions,
payments, certificates and arrangements necessary for continued access to and use of such software and service during the term of the Distribution Agreement and Asset Purchase Agreement. 

4.    Follow up of AEs and Pregnancy Reports.    A Party providing an AE or
Pregnancy Report hereunder will notify the other Party of any follow up information about AEs and Pregnancy Reports provided hereunder which it receives and/or of which it becomes aware with respect
to the Product. Any report of follow up information will be made in the same timelines set out in Section 2 above. 

5.    Tracking AEs and Pregnancy Reports.    

        5.1    Each AE and Pregnancy Report from any source that is provided by Parties hereunder (including follow up data) will
include: 

          (i)  date
of its Receipt by the notifying Party, 

         (ii)  a
unique reference number assigned by the notifying Party; and 

        (iii)  a
description of the original source of the AE or Pregnancy Report (whether healthcare professional, consumer, regulatory authority, literature or otherwise). 

        5.2    The Party providing an AE or Pregnancy Report hereunder shall conduct appropriate routine checks to confirm that the AEs
and Pregnancy Reports that it sends have been received and will promptly re-send the AE or Pregnancy Report. 

6.    Regulatory Authority and other Inquiries.    

        6.1    During the term of the Distribution Agreement Prometheus will promptly notify GSK of the receipt of any notice or inquiry
concerning a potential safety issue with the Product from a regulatory authority, a healthcare professional or a consumer. In each case, Prometheus shall provide GSK with all available information it
has regarding the enquiry/issue. Responses to any such queries received by
Prometheus will be prepared by GSK and provided by GSK to the enquiring regulatory authority within any timeframe set by the enquiring regulatory authority for the receipt of a response, and to any
healthcare professional or consumer as soon as is reasonably practicable. 

        6.2    During the term of the Asset Purchase Agreement GSK will promptly notify Prometheus of the receipt of any notice or
inquiry concerning a potential safety issue with the Product from a regulatory authority, a healthcare professional or a consumer. In each case, GSK shall provide Prometheus with all available
information it has regarding the enquiry/issue. Responses to any such queries received by GSK will be prepared by Prometheus and provided by Prometheus to the enquiring regulatory authority within any
timeframe set by the enquiring regulatory authority for the receipt of a response, and to any healthcare professional or consumer as soon as is reasonably practicable. 

7.    Audits/Adverse findings by Regulatory Authorities.    Each Party shall be
entitled to conduct audits to assess the other Party's compliance with the terms of this Agreement provided such audits are requested at reasonable and objectively justifiable times/intervals and that
the scope of such audits is reasonable having regard to their intended purpose. For purposes hereof, the Party conducting such an audit will be the "Auditor" and the Party being audited will be the
"Auditee". The Auditor may conduct an audit of the Auditee upon thirty (30) Days prior written notice. The Auditee shall ensure that Auditor may
enter onto the premises at which relevant functions are conducted by it or on its behalf in order that the Auditor may conduct a full and proper audit through the inspection of relevant documentation,
compliance metrics, systems and personnel interviews. The Auditee shall afford Auditor all reasonable co-operation in the conduct of audits under this Section 7. 

8.    Obligations Surviving Termination of this Agreement.    This Agreement will
terminate upon termination of both the Distribution Agreement and the Asset Purchase Agreement. Provided the requesting Party shall cover the assisting Party's reasonable costs of cooperating, the
assisting Party shall not unreasonably withhold, refuse or delay a request for assistance in respect of for information from a regulatory authority arising after termination of this Agreement. 

        IN
WITNESS WHEREOF, the Parties have caused this Safety Data Exchange Agreement to be executed by their duly authorized representatives as of the Effective Date. 

	SMITHKLINE BEECHAM CORPORATION	 	PROMETHEUS
	 	 	 	 	 
	D/B/A GLAXOSMITHKLINE	 	LABORATORIES INC.
	 	 	 	 	 
	 	 	 	 	 
	By:	    
	 	By:	    

	

Name:	

    
	
 	

Name:	

    

	

Title:	

    
	
 	

Title:	

    

	

 	

 	
 	

 	

 

  

 
 

Appendix 1    
    
    Contacts    
    

GlaxoSmithKline  

	General SDE enquiries	 	Kristina Black

Manager, Case Management Group

Global Clinical Safety and Pharmacovigilance	 	GlaxoSmithKline

Five Moore Drive

P.O. Box 13398

Research Triangle Park

North Carolina 27709

USA

Tel: [***]

Fax: [***]

e-mail: [***]
	

Medical Inquiries	
 	

Neil Broadwell

Manager, Safety Evaluation and Risk Management

Global Clinical Safety and Pharmacovigilance	
 	

GlaxoSmithKline R&D

Five Moore Drive

P.O. Box 13398

Research Triangle Park

North Carolina 27709

USA

Tel: [***]

Fax: [***]

e-mail: [***]
	

AE reports	
 	

Clinical Case Administrator	
 	

Fax:: [***]

e-mail: [***]

*** 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.

1

 

Prometheus  

	General SDE enquiries	 	John Baker

Manger, Safety Medical & Regulatory Affairs	 	9410 Carroll Park Drive

San Diego, CA 92121

Tel: [***]

Fax: [***]

e-mail: [***]
	

Medical Inquiries	
 	

John Baker

Manger, Safety Medical & Regulatory Affairs	
 	

9410 Carroll Park Drive

San Diego, CA 92121

Tel: [***]

Fax: [***]

e-mail: [***]
	

AE reports	
 	

John Baker

Manger, Safety Medical & Regulatory Affairs	
 	

9410 Carroll Park Drive

San Diego, CA 92121

Tel: [***]

Fax: [***]

e-mail: [***]

*** 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.

2

 
Schedule 1.1(a) 

Product
Copyrights 

Content
at the Lotronex.com website

Promotional Materials (electronic and print) for LOTRONEX

Training Materials (electronic and print) for LOTRONEX

Packaging and packaging insert for LOTRONEX 

3

 
Schedule 1.1(b) 

Product
Marks 

LOTRONEX Mark  

U.S.
Reg. No. 2238126 

Design Mark—Common Law

  

 

GET
HELP GOING WHERE YOU WANT TO GO WITH LOTRONEX—Common Law 

HELP
YOUR PATIENTS GET WHERE THEY WANT TO GO WITH LOTRONEX—Common Law 

4

 
Schedule 1.1(c) 

Product
Patent Rights 

	Patent
 
	 	Application No.
	 	Application Date
	 	Grant Date

	US 5,360,800	 	07/741570	 	07-Aug-1991	 	01-Nov-1994
	US 5,183,820*	 	07/691814	 	26-Apr-1991	 	02-Feb-1993
	US 5,196,534	 	07/704099	 	22-May-1991	 	23-Mar-1993
	US 5,225,407	 	07/941951	 	08-Sep-1992	 	06-Jul-1993
	US 6,175,014	 	08/137228	 	18-Oct-1993	 	16-Jan-2001
	US 6,284,770	 	09/529050	 	05-Oct-1998	 	04-Sep-2001
	US 6,429,209*	 	09/834717	 	13-Apr-2001	 	06-Aug-2002
	US 6,593,336	 	10/166401	 	10-Jun-2002	 	15-Jul-2003

	*
	US
5,183,820 has expired, but any/all rights to the patent are transferred. Note, US '820 is linked to US '800 by a previously filed terminal disclaimer.

	*
	US
6,429,209 has expired for non-payment of maintenance fees, but any/all rights to the patent are transferred. Note, US '209 is linked to US '770 and US '336 by previously
filed terminal disclaimers. 

5

 
Schedule 1.1(d) 

Product
Trade Dress 

[Image of Product Trade Dress]

6

Schedule 2.3 

Registrations

CARDS BRIEF REPORT  

	Description of Document
 
	 	Submission Date
	 	Approval Date
	 	Submission/Supplement Type

	NDA 21-107; LOTRONEXTM (Alosetron Hydrochloride) Tablet

Approval Letter	 	29-Jun-99	 	

9-Feb-00	 	

Original: Irritable bowel syndrome (IBS) in women whose predominant bowel symptom is diarrhea.
	NDA 21-107/S-001; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	10-Feb-00	 	

7-Mar-00	 	

CMC: Alternate primary packaging facility for the blister container/closure system.
	NDA 21-107/S-002; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	17-Jul-00	 	

11-Aug-00	 	

Labeling: Safety labeling for Patient Medication Guide and Healthcare Letters.
	NDA 21-107/S-003; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	21-Aug-00	 	

7-Jun-02	 	

Labeling: Superceded/Incorporated into S-005.
	NDA 21-107/S-004; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	25-Oct-00	 	

7-Jun-02	 	

Labeling: Superceded/Incorporated into S-005.
	NDA 21-107/S-005; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	7-Dec-01	 	

7-Jun-02	 	

Clinical/Labeling: Safety and efficacy data, revised risk management plan and revised labeling.
	NDA 021107/S-006; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	16-Apr-02	 	

3-Jun-02	 	

CMC: Qualification of a 50-cc blue HDPE bottle to contain 30-tablets.
	NDA 21-107/S-007; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	20-Sep-02	 	

20-Mar-03	 	

Labeling: Changes to Patient Physician Agreement Form and Physician Attestation Form.
	NDA 21-107/S-008; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	25-Jun-03	 	

23-Dec-03	 	

CMC: Qualification of a 0.5 mg strength tablet and waiver to conduct in vivo bioequivalence studies.
	NDA 21-107/S-009; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	30-Mar-04	 	

31-Jan-05	 	

Efficacy: Effect on bowel function and ability to sustain therapeutic effect long-term.
	NDA 21-107/S-010; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	9-Aug-04	 	

4-Feb-05	 	

Labeling: Changes to PI, Med Guide, Patient-Physician Agreement Form, Physician Attestation Form.
	NDA 21-107/S-011; LOTRONEX® (alosetron hydrochloride)

Approval Letter	 	20-Aug-04	 	

18-Feb-05	 	

Labeling: Revisions to Clinical Pharmacology, Contraindications and Precautions Sections.
	NDA 21-107/S-012; LOTRONEX® (alosetron hydrochloride) T

Approval Letter	 	12-Sep-05	 	

10-Mar-06	 	

Labeling: Revision to PI to include information regarding hepatically impaired patients.
	NDA 021107/0013; LOTRONEX® (alosetron hydrochloride) T	 	1-Jun-07	 	

Not Approved	 	

Efficacy/Labeling: Revision to labeling to include post-marketing studies.

CARDS BRIEF REPORT  

	Description of Document
 
	 	Submission Date
	 	Inactivation Date
	 	Indicated For:

	IND 34,672; GR68755 (alosetron hydrochloride) Tablets

Initial Investigational New Drug Application	 	

10-Apr-90	 	

22-Jul-94	 	

Treatment of Age Associated Memory Impairment.
	IND 39,083: GR68755 (alosetron hydrochloride) Tablets

Initial Investigational New Drug Application	 	

11-Mar-92	 	

26-Apr-01	 	

Treatment of Schizophrenia.
	IND 48,487; GR68755 Tablets (alosetron hydrochloride)

Initial Investigational New Drug Application	 	

4-Aug-95	 	 	 	

Treatment of Irritable Bowel Syndrome in Adults.
	IND 59,496; Alosetron Hydrochloride Oral Solution

Initial Investigational New Drug Application	 	

17-Dec-99	 	

5-Jan-07	 	

Treatment of Irritable Bowel Syndrome in Pediatric Patients.

Schedule 3.1 

Products 

Lotronex
(alosetron HCl) 0.5mg

Lotronex (alosetron HCl) 1mg 

Schedule 3.2 

GSK
Promotional Materials 

A)    ACTIVE MATERIALS—Pre-cleared with DDMAC  

	PAR #
	 	Description

	LOT468R1	 	Lotronex PPL Physician Kit
	LOT525R1	 	Lotronex PPL Prescription Sticker Sheet
	LOT534R0	 	Website—Patient Section
	LOT535R0	 	Website—Physician Section
	LOT536R0	 	Website—Pharmacist Section
	LOT530R0	 	Lotronex: Understanding the Risks & Benefits—Slide Set
	LOT515R0	 	Current Thinking on IBS—slide set
	LOT532R0	 	Sales Aid
	LOT521R0	 	Patient Brochure

B)    ACTIVE MATERIALS—Not Pre-cleared with DDMAC  

	LOT467R0(1)	 	Physician-patient Agreement Form
	LOT514R0(1)	 	PPL Physician Enrollment Form
	LOT537R0(2)	 	PPL Physician Enrollment Kit

(enrollment form LOT514 + LOT530 on CD-ROM)
	LOT512R0(3)	 	Non-compliance Physician Letter
	LOT533(1)	 	Medication Guide
	LOT483(1)	 	PI

	(1)
	Active
Materials that have not been pre-cleaned by DDMAC but have been approved by the FDA as part of the approval for the product label under the NDA.

	(2)
	The
Kit has not been pre-cleared by DDMAC but the enrollment form (LOT514) has been approved by the FDA as set forth in Note 1 above and the Slide Set (LOT530) has
been individually pre-cleared.

	(3)
	Letter
is a limited correspondence that is non-promotional and does not require DDMAC pre-clearance but used as part of the PPL program. 

Schedule 4.2

Product
Quantities for Existing Inventory Delivery 

	Product
	 	Quantity to Be Ordered

	Lotronex (alosetron HCl) 0.5 mg (30 tablet bottle)	 	[***] bottles (12 pallets)
	Lotronex (alosetron HCl) 1 mg (30 tablet bottle)	 	[***] bottles

*** 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. 

Schedule 5.1

Product
Prices 

	Product
 
	 	Price Per Unit
	 	Standard Batch Size

	Lotronex (alosetron HCl) 0.5 mg (30 tablet bottle)	 	$[***]	 	[***] bottles
	Lotronex (alosetron HCl) 1 mg (30 tablet bottle)	 	$[***]	 	[***] bottles

*** 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. 

Schedule 6.1

Specifications
Index 

[***]

	Test
 
	 	Acceptance Criteria
	 	Method Reference(1)

	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]

Notes:

	1.
	[***]

*** 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. 

EXHIBIT G  

 ESCROW AGREEMENT  

        THIS ESCROW AGREEMENT (the "Agreement") is entered into as of
October         , 2007, by and among SmithKline Beecham Corporation d/b/a GlaxoSmithKline ("SB Corp"), a corporation organized under the
laws of the Commonwealth of Pennsylvania, having a place of business at One Franklin Plaza, Philadelphia, PA 19101 and Glaxo Group Limited ("GGL"), a
corporation organized under the laws of England, with offices at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex, UB6 0NN, United Kingdom (together referred to as
"Seller") and Prometheus Laboratories Inc., a corporation organized under the laws of California, having a place of business at 9410 Carroll Park
Drive, San Diego, CA 92121 ("Purchaser") and Citibank, N.A., a national banking association organized and existing under the laws of the United States
of America and acting through its Agency and Trust Division and solely in its capacity as escrow agent under the Agreement, and any successors appointed pursuant to the terms hereof (the
"Escrow Agent"). Seller, Purchaser and Escrow Agent are sometimes individually referred to herein as a
"Party" and collectively as the "Parties." The Purchaser and Seller are sometimes collectively referred
to herein as the "Interested Parties." 

RECITALS  

        WHEREAS, Purchaser and Seller have entered into an Asset Purchase and Sale Agreement dated October             , 2007
(the
"Purchase Agreement"), pursuant to which Seller will sell to Purchaser, and Purchaser will purchase from Seller, certain rights, title and interest in
and to the Products (defined below) and the business of manufacturing and distributing Products in the Territory; 

        WHEREAS,
the Purchase Agreement provides that on the Execution Date, an escrow fund will be established to hold the Upfront Payment (defined below) of Purchaser to be distributed to
Seller at Closing; and 

        WHEREAS,
the Parties hereto desire to establish the terms and conditions pursuant to which such escrow fund will be established and maintained. 

        NOW,
THEREFORE, the Parties hereto hereby agree as follows: 

        1.    Definitions.    The following terms shall have the meanings set forth below for purposes of this Agreement: 

        (a)   "Business Day" shall mean any day that the Escrow Agent is open for business. 

        (b)   "Closing" means the closing of the transaction contemplated by the Purchase Agreement. 

        (c)   "Execution Date" means the date on which the Purchase Agreement is fully executed by the Seller and Purchaser. 

        (d)   "Products" means the 0.5 mg and 1 mg tablet of alosetron HCl. 

        2.    Escrow of Upfront Payment.    

        (a)    Escrow Fund.    Simultaneously with the execution of this Agreement, Purchaser shall deposit with the Escrow
Agent, by wire transfer, the sum of Eighty Million Dollars (U.S.$80,000,000) (the "Upfront Payment"). The Escrow Agent hereby acknowledges receipt of
the Upfront Payment. Such Upfront Payment, together with any investment income or proceeds received by the Escrow Agent from the investment thereof from time to time pursuant to Section 4(a)
below is referred to herein as the "Escrow Fund." The Escrow Fund shall be held by the Escrow Agent in escrow and shall not be subject to any lien,
attachment, trustee process or any other judicial process of any creditor of any Party hereto. The Escrow Fund shall be invested in accordance with Section 4(a). The Escrow Agent agrees to hold
the Escrow Fund in an escrow account subject to the terms and conditions of this Agreement. 

        (b)    Purpose.    The Escrow Fund is established to hold the Upfront Payment made by Purchaser to Seller until the
Closing. 

 

        (c)    Closing.    Seller or Purchaser shall notify Escrow Agent in writing as soon as the date of the Closing is
determined by Seller and Purchaser. 

        (d)    Transferability.    The interest of Seller in the Escrow Fund shall not be assignable or transferable, other
than by operation of law. Written notice of any such assignment or transfer by operation of law shall be given to the Escrow Agent and Purchaser, and no such assignment or transfer shall be valid
until such written notice is given. 

        3.    Disbursement of Escrow Fund.    

        (a)    Disbursement by Escrow Agent.    The Escrow Agent shall disburse the Escrow Fund only in accordance with this
Section 3 pursuant to: 

          (i)  a
written instrument delivered to the Escrow Agent that is executed by Purchaser and Seller that instructs the Escrow Agent as to the disbursement of the Upfront
Payment to Seller (and any undistributed earnings to Purchaser) in connection with the Closing under the Purchase Agreement, 

         (ii)  a
written instrument delivered to the Escrow Agent that is executed by Purchaser and Seller that instructs the Escrow Agent as to the disbursement of the Escrow Fund to
Purchaser in connection with the early termination of the Purchase Agreement in accordance with Section 9.1 of the Purchase Agreement, or 

        (iii)  an
order of a court of competent jurisdiction, a copy of which is delivered to the Escrow Agent by either Purchaser or Seller, that instructs the Escrow Agent as to
the disbursement of the Escrow Fund, such order to be accompanied by an opinion of counsel to the claiming party to the effect that such order is final. 

        (b)    Earnings on Upfront Payment.    Within five (5) days of the conclusion of each calendar quarter, or if
sooner, the Closing under the Purchase Agreement, the Escrow Agent shall remit to Purchaser any interest, dividends or other earnings on the Escrow Fund during such calendar quarter or portion
thereof. 

        (c)    Disbursement on Closing Date.    Purchaser acknowledges that when the Upfront Payment is released to Seller in
accordance herewith, the Upfront Payment shall be non-refundable. 

        4.    Investment of Escrow Fund.    

        (a)    Permitted Investment.    

          (i)  Any
monies held in the Escrow Fund shall be invested by the Escrow Agent, to the extent permitted by law, in the money market mutual fund identified in  Attachment A hereto. The Escrow Agent shall keep
monies held in the Escrow Fund invested as set forth herein at all times prior to disbursement. The
Escrow Agent shall have no liability for any investment losses, fees, taxes or other charges, including, without limitation, any market loss on any investment liquidated prior to maturity in order to
make a payment required hereunder to the extent the monies held in the Escrow Fund are invested as provided above. 

         (ii)  The
Escrow Agent shall invest monies in the Escrow Fund on the date of deposit provided that it is received on or before 1:00 p.m. (E.D.T.). Any monies received
by the Escrow Agent after 1:00 p.m. (E.D.T.) shall be treated as if received on the following Business Day. 

        (b)    Tax Reporting.    The Parties hereto agree that, for tax reporting purposes, all interest or other income
earned or losses incurred from the investment of the Escrow Fund in any tax year to the extent such interest or other income is distributed by the Escrow Agent to any person or entity 

G-2

 

pursuant
to the terms of this Agreement during such tax year, shall be allocated to that person or entity. 

        (c)    Certification of Tax Identification Number.    The Interested Parties shall provide the Escrow Agent with a
certified tax identification number by signing and returning a Form W-9 (or Form W-8, in the case of non-U.S. persons) to the Escrow Agent prior to
the date on which any income earned on the investment of the Escrow Fund is credited to such Escrow Fund. Each of the Interested Parties understands that, in the event its tax identification number is
not certified to the Escrow Agent, the Internal Revenue Code of 1986, as amended from time to time, may require withholding of a portion of any distribution of the Escrow Fund. 

        (d)    Investment Direction.    Any investment direction contained herein may be executed through an affiliated broker
dealer of the Escrow Agent. The affiliated broker dealer or the Escrow Agent shall only be entitled to such usual and customary fees related to such investment charged by the money market mutual funds
identified in Attachment A hereto that are included in the stated yield (i.e., yields that are net of fees). Except as otherwise provided herein,
no other fees or charges shall be taken out of the Escrow Fund or any earnings thereon by either the Escrow Agent or its affiliated broker dealers. Neither Citigroup nor any of its affiliates assume
any duty or liability for monitoring the investment rating. 

        (e)    IRS Circular 230 Disclosure.    Citigroup, Inc., its affiliates, and its employees are not in the
business of providing tax or legal advice to any taxpayer outside of Citigroup, Inc. and its affiliates. This Agreement and any amendments or attachments are not intended or written to be used,
and cannot be used or relied upon, by any such taxpayer or for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer's particular circumstances for an
independent tax advisor. 

        5.    Fees and Expenses.    Seller shall promptly (i) pay all fees of the Escrow Agent for the services to be
rendered by the Escrow Agent hereunder, which are set forth on Attachment B hereto, and (ii) reimburse the Escrow Agent for all of its reasonable
and documented expenses (including reasonable attorney's fees and expenses) incurred in connection with the performance of its duties under this Agreement. 

        6.    Limitation of Escrow Agent's Liability.    

        (a)    Limitation on Liability.    

          (i)  The
Escrow Agent shall incur no liability with respect to any action taken or suffered by it in reliance upon any notice, order, judgment, direction, instruction,
consent, statement or other documents believed by it to be genuine and duly authorized, nor for other action or inaction, except its own willful misconduct or gross negligence. The Escrow Agent shall
not be responsible for the validity or sufficiency of this Agreement or any other agreement referred to herein. In all questions arising under the Escrow Agreement, the Escrow Agent may conclusively
rely on the advice of counsel of its selection, and the Escrow Agent shall not be liable to anyone for anything done, omitted or suffered in good faith by the Escrow Agent based on such advice. The
Escrow Agent shall not be required to take any action hereunder involving any expense unless the payment of such expense is made or provided for in a manner reasonably satisfactory to it. In no event
shall the Escrow Agent be liable for indirect, punitive, incidental, special or consequential damages, regardless of the form of action and whether or not any such losses or damages were foreseeable
or contemplated. 

G-3

 

         (ii)  Each
Party acknowledges and agrees that (1) the duties, responsibilities and obligations of the Escrow Agent shall be limited to those expressly set forth in
this Agreement and no other duties, responsibilities or obligations shall be inferred or implied, (2) this Agreement shall constitute the entire agreement of the Parties with respect to the
subject matter and supersedes all prior oral or written agreements in regard thereto, (iii) the Escrow Agent shall not be obligated to take any legal or other action hereunder which might in
its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification; and (iv) the Escrow Agent shall not be liable for the
acts or omissions of any nominees, correspondents, designees, agents, subagents or subcustodians. 

        (b)    Indemnification.    Purchaser and Seller agree, jointly and severally, to indemnify the Escrow Agent for, and
hold it harmless against, any and all loss, liability, damage, claim or expense incurred without gross negligence or willful misconduct on the part of Escrow Agent, arising out of or in connection
with its carrying out of its duties hereunder. As between Purchaser and Seller, each shall be liable for [***] of all such amounts; provided
however, that if any such loss, liability or expense is incurred primarily as a result of Purchaser's gross negligence or willful misconduct in which case Purchaser shall be
liable for all such amount; and provided further that if any such loss, liability or expense is incurred primarily as a result of Seller's gross
negligence or willful misconduct in which case Seller shall be liable for all such amount. 

        7.    Termination.    This Agreement shall terminate upon the disbursement by the Escrow Agent of all of the Escrow
Funds in accordance with this Agreement; provided that the provisions of Sections 5 and 6 shall survive such termination. 

        8.    Successor Escrow Agent.    In the event the Escrow Agent becomes unavailable or unwilling to continue in its
capacity herewith, the Escrow Agent may resign and be discharged from its duties or obligations hereunder by delivering a written resignation to the Parties to this Escrow Agreement, not less than
sixty (60) days prior to the date when such resignation shall take effect. Purchaser may appoint a successor Escrow Agent with the written consent of Seller, which shall not be unreasonably
withheld. If, within such notice period, Purchaser provides to the Escrow Agent written instructions (with a copy to Seller) with respect to the appointment of a successor Escrow Agent and directions
(with a copy to Seller) for the transfer of any Escrow Fund then held by the Escrow Agent to such successor, the Escrow Agent shall act in accordance with such instructions and promptly transfer such
Escrow Fund to such designated successor. If no successor Escrow Agent is named as provided in this Section 8 prior to the date on which the resignation of the Escrow Agent is to properly take
effect, the Escrow Agent may, at the expense of Seller, apply to a court of competent jurisdiction for appointment of a successor Escrow Agent. 

*** 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.

G-4

 

        9.    Dispute Resolution.    In the event of any disagreement among any of the Interested Parties to this Agreement,
or between any of them and any other person, resulting in adverse claims or demands being made with respect to the subject matter of the Agreement, or in the event that the Escrow Agent, in good
faith, is in doubt as to any action it should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands and refuse to take any other action hereunder, so long as
such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not be liable in any way or to any person for its failure or refusal to act, and the Escrow Agent shall
be entitled to continue to so refuse to act and refrain from acting until (i) the rights of all parties having or claiming an interest in the Escrow Fund shall have been fully and finally
adjudicated by a court of competent jurisdiction, or all differences and doubts shall have been resolved by agreement among all of the Interested Parties, and (ii) the Escrow Agent shall, in
the case of adjudication by a court of competent jurisdiction, have received a final order, judgment or decree (in each case accompanied by an opinion as to its finality) by such court of competent
jurisdiction, which order,
judgment or decree is not subject to appeal, and in the case of resolution of differences and doubts by agreement, have received a notice in writing signed by an Authorized Person (as defined below)
of each of the Interested Parties setting forth in detail the agreement. The Escrow Agent shall have the option, after 30 calendar days' notice to the Interested Parties of its intention to do so, to
file an action in interpleader requiring the Interested Parties hereto to answer and litigate any claims and rights among themselves. The costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Escrow Agent in connection with such proceeding shall be paid by, and be the joint and several obligation of, the Interested Parties. Seller and Purchaser acknowledge that as
between themselves, such costs and expenses shall be paid equally by the Interested Parties. The rights of the Escrow Agent under this Section 9 are cumulative of all other rights which it may
have by law or otherwise. 

        10.    Instructions, Verification, Communications.    

        (a)   All
instructions required under the Agreement shall be delivered to the Escrow Agent in writing, in English, in facsimile or original form and, if so requested by the
Escrow Agent, an original, executed by an Authorized Person (as hereinafter defined) of each of the Interested Parties or an entity acting on its behalf. The identity of such Authorized Persons, as
well as their specimen signatures, title, telephone number and e-mail address, shall be delivered to the Escrow Agent in the list of authorized signers form as set forth on  Attachment C and shall remain
in effect until the applicable Interested Party, or an entity acting on its behalf, notifies Escrow Agent of any change
thereto (the person(s) so designated from time to time, the "Authorized Persons"). The Escrow Agent and the Interested Parties agree that the above
constitutes a commercially reasonable security procedure and further agree to comply with any direction or instruction (other than those contained herein or delivered in accordance with this
Agreement) from any Interested Party. 

        (b)   In
the event funds transfer instructions are given (other than in writing at the time of execution of this Agreement), whether in writing, by telecopier,.pdf,
e-mail, or otherwise, such funds transfer instructions should contain a selected test word also evidenced on Attachment C. Test Words must
contain at least 8 alphanumeric characters, established at document execution and changed each time Attachment C is updated in accordance with
(a) above. In addition or in lieu of test words, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call back to the applicable person(s) specified to the
Escrow Agent from time to time by an Authorized Person and the Escrow Agent may rely upon the confirmations of anyone purporting to be the person(s) so designated. To ensure the accuracy of the
instructions it receives, the Escrow Agent may record such call backs. If the Escrow Agent is unable to verify the instruction, or is not satisfied in its sole discretion with the verification it
receives, it will not execute the instruction 

G-5

 

until
all issues have been resolved to its satisfaction. The persons and telephone numbers for call backs may be changed only in writing, signed by an Authorized Person, actually received and
acknowledged by the Escrow Agent. The Interested Parties to the Agreement acknowledge that these security procedures for funds transfers are commercially reasonable. 

        (c)   Notwithstanding
anything to the contrary herein, any and all email communications (both text and attachments) by or from the Escrow Agent that the Escrow Agent deems to
contain confidential, proprietary and/or sensitive information shall be encrypted. The recipient (the "Email Recipient") of the encrypted email
communication will be required to complete a registration process. Instructions on how to register and/or retrieve an encrypted message will be included in the first secure email sent by the Escrow
Agent to the Email Recipient. Additional information and assistance on using the encryption technology can be found at Citibank's Secure Email website at
www.citigroup.com/citigroup/citizen/privacy/email.htm or by calling (866) 535-2504 (in the U.S.) or (904) 954-6181. 

        (d)   To
help the U.S. government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account. When an account is opened, the Escrow Agent will ask for information that will allow the Escrow Agent to identify relevant parties. The
Interested Parties hereby acknowledge such information disclosure requirements and agree to comply with all such information disclosure requests from time to time from the Escrow Agent. 

        (e)   The
provisions of this Section 10(a)-(d) may be amended by the Escrow Agent unilaterally upon notice to the Interested Parties. 

        11.    General.    

        (a)    Entire Agreement.    Except for those provisions of the Purchase Agreement referenced herein, this Agreement
constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements or representations by or among the Parties, written or oral, with respect to the subject matter
hereof. 

        (b)    Succession and Assignment.    This Agreement shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns. 

        (c)    Counterparts and Facsimile Signature.    This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile signature. 

        (d)    Headings.    The section headings contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement. 

        (e)    Notices.    All notices, instructions, requests, claims, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) when received if delivered personally, (b) when transmitted if telecopied (which is confirmed), (c) upon receipt, if sent
by registered or certified mail (postage prepaid, return receipt requested) and (d) the day 

G-6

 

after
it is sent, if sent for next-day delivery to a domestic address by overnight mail or courier, to the Parties at the following addresses: 

If
to Seller, to: 

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

5 Moore Drive

Research Triangle Park, North Carolina 27709

Attention: Senior Vice President, US Pharmaceuticals RTP

Facsimile: (919) 315-3183 

and 

Glaxo
Group Limited

Glaxo Wellcome House

Berkeley Avenue

Greenford, Middlesex

England UB6 0NN

Attention: The Company Secretary

Facsimile: 44 208 047 6905 

With copies sent concurrently to:

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

2301 Renaissance Boulevard

King of Prussia, PA 19406-2772

Vice President and Associate General Counsel, Business Development Transactions Team

Facsimile: (610) 787-7084

SmithKline Beecham Corporation (a GlaxoSmithKline company) 

If
to Purchaser, to: 

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: President

Facsimile: (858) 410-1945 

With copies sent concurrently to:  

Prometheus Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: Legal Department

Facsimile: (858) 332-3393 

If
to Escrow Agent, to: 

Citibank,
N.A.

Agency & Trust

388 Greenwich Street, 14th Floor

New York, NY 10013

Attn.: Barbara E. Bennett

Facsimile: (212) 657-2762 

G-7

 

provided, however, that if any Party shall have designated a different address by notice to the others,
then to the last address so designated. 

        (f)    Wiring Instructions.    Any funds to be paid to or by the Escrow Agent hereunder shall be sent by wire transfer
pursuant to the following instructions (or by such method of payment and pursuant to such instruction as may have been given in advance and in writing to or by the Escrow Agent, as the case may be, in
accordance with Section 10 above): 

If
to the Purchaser: 

Bank:

ABA#:

A/C#:

Attn:

Ref: 

If
to the Seller: 

SB
Corp:

Bank:

ABA#:

A/C#:

GGL:

Bank:

ABA#:

A/C#: 

If
to the Escrow Agent: 

CITIBANK,
N.A.

ABA:

Account Name:

CREDIT A/C No.:

For further credit to:

Reference: 

        Whenever
under the terms hereof the time for giving a notice or performing an act falls upon a Saturday, Sunday, or a banking holiday in New York, such time shall be extended to the next
day on which the Escrow Agent is open for business. 

        (g)    Governing Law.    This Agreement shall be governed by and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State. 

        (h)    Amendments and Waivers.    This Agreement may be amended only with the written consent of Purchaser, Seller and
the Escrow Agent. No waiver of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver. No waiver by any Party with respect to any
condition, default or breach of covenant hereunder shall be deemed to extend to any prior or subsequent condition, default or breach of covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent occurrence. 

        (i)    Submission to Jurisdiction.    All suits, actions or other proceedings (each, an
"Action") arising out of this Agreement or any transaction contemplated hereby arising out of or relating to this Agreement shall be heard and
determined exclusively in the Supreme Court of the State of New York, and any appellate court from any thereof, or for recognition or enforcement of any 

G-8

 

judgment
relating to such Action, and each of the Parties hereby irrevocably and unconditionally (a) agrees not to commence any such Action except in such courts, (b) agrees that any
claim in respect of any such Action may be heard and determined in the Supreme Court of the State of New York, (c) waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any Action in the Supreme Court of the State of New York, (d) waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such Action in the Supreme Court of the State of New York and (e) waives any right to trial by jury with respect to any proceeding relating to
this Agreement. Each of the Parties hereto agrees that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each Party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 11(e). Nothing in this Agreement will affect the right of
any Party to this Agreement to serve process in any other manner permitted by Law. 

        (j)    Force Majeure.    Notwithstanding anything contained in this Agreement to the contrary, the Escrow Agent shall
not incur any liability for not performing any act or fulfilling any obligation hereunder by reason of any occurrence beyond its control (including, without limitation, any provision of any present or
future law or regulation or any act of any governmental authority, any act of God or war or terrorism, or the unavailability of the Federal Reserve Bank wire services or any electronic communication
facility). 

        (k)    Use of Name.    No printed or other material in any language, including prospectuses, notices, reports, and
promotional material which mentions "Citibank", or "Citigroup" or "Citi" by name or the rights, powers, or duties of the Escrow Agent under this Agreement shall be issued by any Interested Parties
hereto, or on such party's behalf, without the prior written consent of the Escrow Agent. 

*
* * * * * 

G-9

 

        IN
WITNESS WHEREOF, the Parties have duly executed this Escrow Agreement as of the day and year first above written. 

	 	 	SMITHKLINE BEECHAM CORPORATION

d/b/a GLAXOSMITHKLINE
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	
GLAXO GROUP LIMITED
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	Victoria Whyte

For and on behalf of

Glaxo Group Limited
	 	 	Title:	Corporate Director
	

 	
 	
PROMETHEUS LABORATORIES INC.
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	Joseph M. Limber
	 	 	Title:	President and Chief Executive Officer
	

 	
 	
CITIBANK, N.A., as Escrow Agent
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

G-10

  

Attachment A
  Permitted Investments 

Goldman
Sachs Financial Square Treasury Instruments Fund 

11

 
Attachment B
  Escrow Agent Fees 

Acceptance Fee:  

        To cover the acceptance of the Escrow Agency appointment, the study of the Escrow Agreement, and supporting due diligence documents submitted in connection with
the execution and delivery thereof, communication with other members of the working group: 

$[***] 

Flat Administration Fee:  

        To cover maintenance of the escrow account including safekeeping of assets, normal administrative functions of the Escrow Agent, including maintenance of the
Escrow Agent's records, follow-up of the Escrow Agreement's provisions, and any other duties required of the Escrow Agent under the terms of the Escrow Agreement: 

$[***] 

Legal Fee:  

        To cover review of legal documents by Citibank's outside counsel on behalf of Citibank: 

[***].

***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

 

Attachment C
  Authorized List of Signers

or Officer's Certificate 

	SMITHKLINE BEECHAM CORPORATION	 	 
	 	 	 	 	Specimen Signature
	Name	 	Donald F. Parman	 	 
	Title	 	Vice President and Secretary	 	 
	Phone	 	[***]	 	 
	E-mail Address	 	[***]	 	

	

Name	
 	

Audrey Klijian	
 	

 
	Title	 	Treasurer	 	 
	Phone	 	[***]	 	 
	E-mail Address	 	[***]	 	

	
GLAXO GROUP LIMITED	
 	

 
	 	 	 	 	Specimen Signature
	Name	 	Paul F. Blackburn	 	 
	Title	 	Director	 	 
	Phone	 	[***]	 	 
	E-mail Address	 	[***]	 	

	

Name	
 	

Ashley A. Grist for

Edinburgh Pharmaceuticals

Industries Limited	
 	

 
	Title	 	Director	 	 
	Phone	 	[***]	 	 
	E-mail Address	 	[***]	 	

	
PROMETHEUS LABORATORIES INC.	
 	

 
	 	 	 	 	Specimen Signature
	Name	 	William Franzblau	 	 
	Title	 	Vice President, Legal Affairs	 	 
	Phone	 	[***]	 	 
	E-mail Address	 	[***]	 	

	

Name	
 	

Joseph M. Limber	
 	

 
	Title	 	President and Chief Executive Officer	 	 
	Phone	 	[***]	 	 
	E-mail Address	 	[***]	 	

***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

 
 
 

Test Word    
    

	 	 	
	 	 

Test
Words must contain at least 8 alphanumeric characters, and should be established at document execution and changed each time the List of Authorized Signers/Approvers is updated. All instructions
should clearly display the Test Word, which may be used in lieu of a callback to confirm the authenticity of the instruction. However, Citi reserves the right to perform the callback in addition to
the Test Word if circumstances warrant. 

14

EXHIBIT H  

STOCK PURCHASE AGREEMENT  

        THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
October 31, 2007 by and between Prometheus Laboratories Inc., a corporation organized under the laws of the State of California (the
"Company"), and SmithKline Beecham Corporation d/b/a GlaxoSmithKline, a corporation organized under the laws of the Commonwealth of Pennsylvania
("GSK"). 

        The
parties intending to be legally bound hereby agree as follows: 

        1.    Issuance of Stock.    Pursuant to Section 2.7(b)(iv) of that certain Asset Purchase and Sale Agreement,
of even date hereof, by and between the Company and GSK (the "Asset Purchase Agreement"), at the Closing (as defined in the Asset Purchase Agreement),
the Company hereby agrees to issue to GSK and GSK hereby agrees to acquire an aggregate of One Million Two Hundred Fifty Thousand (1,250,000) shares of the Company's Common Stock, par value $0.001 per
share (the "Shares") as partial consideration to GSK for its sale of the Purchased Assets (as defined in the Asset Purchase Agreement) to the Company.
Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Asset Purchase Agreement. 

        2.    Company Representations.    In connection with the issuance of the Shares, the Company represents and warrants
to GSK that the following representations are true and correct as of the date of this Agreement. 

        (a)    Organization.    The Company is a corporation duly organized and validly existing and in good standing under
the laws of California. The Company is in good standing in each jurisdiction where such qualification is required except for any jurisdiction where failure to so qualify would not have a material
adverse effect on the Company. Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. 

        (b)    Due Authorization.    The Company has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement, and the execution and delivery of this Agreement and the performance of all of its obligations hereunder and thereunder have been duly authorized by the
Company and, to the extent required by Law, contract or otherwise, its stockholders. No other proceedings on the part of the Company are necessary to authorize this Agreement. 

        (c)    No Conflicts; Enforceability.    The execution, delivery and performance of this Agreement by the Company
(i) are not prohibited or limited by, and will not result in the breach of or a default under, any provision of the certificate of incorporation or bylaws of the Company, (ii) assuming
all of the consents, approvals, authorizations and permits described in Section 2.5 have been obtained and all the filings and notifications described in Section 2.5 have been made and
any waiting periods thereunder have terminated or expired, does not conflict with any Law applicable to the Company, and (iii) does not conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice,
consent or waiver under, any material agreement or instrument binding on the Company or any applicable order, writ, injunction or decree of any court or applicable Governmental Authority to which the
Company is a party or by which the Company is bound or to which any of its Assets is subject, except in the case of clauses (ii) and (iii) for such prohibitions, limitation, default,
notice, filing, permit, authorization, consent, approval, conflict breach or default which would not prevent or delay the consummation by the Company of the issuance, sale and delivery of the Shares
contemplated hereby. This Agreement when executed and delivered by the Company will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, except
as enforceability may be limited or affected by applicable bankruptcy, insolvency, moratorium, reorganization or other laws of general application relating to or affecting creditors' rights generally. 

 

        (d)    Consents.    Except for filings pursuant to Regulation D of the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws, which have been made or will be made in a timely manner, and for requisite filings under the
HSR Act and the expiration or termination of the waiting period thereunder, and as may be necessary as a result of any facts or circumstances relating solely to Seller, no notice to, filing with,
authorization of, exemption by, or consent of, any Person, including any applicable Governmental Authority, is required for Purchaser to consummate the issuance, sale and delivery of the Shares
contemplated hereby, except where the failure to make such filings or notifications, or obtain such consents, approvals, authorizations or permits, would not, individually or in the aggregate, prevent
or delay the consummation by Purchaser of the issuance, sale and delivery of the Shares contemplated hereby 

        (e)    Capitalization.    The authorized capital of the Company consists, as of the date of this Agreement, of: 

          (i)  60,000,000
shares of Common Stock, 5,858,994 shares of which are issued and outstanding as of the date of this Agreement. All of the outstanding shares of Common Stock
have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state
securities laws. The Company holds no treasury stock and no shares of Preferred Stock (as defined in the following subsection) in its treasury. 

         (ii)  36,000,000
shares of Preferred Stock, of which 1,560,000 shares have been designated Series A Preferred Stock, 2,809,998 shares have been designated
Series B Preferred Stock, 5,517,241 shares have been designated Series C Preferred Stock, 15,560,802 shares have been designated Series D Preferred Stock and 10,474,777 shares
have been designated Series E Preferred Stock (collectively, the "Preferred Stock"), all of which are issued and outstanding as of the date of
this Agreement. All of the outstanding shares of Preferred Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state
securities laws. The rights, privileges and preferences of the Preferred Stock are as stated in the Amended and Restated Articles of Incorporation of the Company and as provided by the general
corporation law of the State of California. 

        (iii)  The
Company has reserved 12,180,000 shares of Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to equity incentive
plans duly adopted by the Board of Directors of the Company and approved by the Company's shareholders (the "Equity Incentive Plans"). Of such reserved shares of Common Stock, as of
September 30, 2007, options to purchase 8,339,700 shares have been granted and are currently outstanding, 3,147,494 options have been exercised and 692,806 options remain available for issuance
to officers, directors, employees and consultants pursuant to the Equity Incentive Plans. 

        (iv)  The
Company has reserved 3,966,594 shares of Common Stock for issuance pursuant to outstanding warrants and 417,942 shares of Series D Preferred Stock for
issuance pursuant to outstanding warrants. 

        (f)    Validity of Shares.    The Shares, when issued, sold and delivered in accordance with the terms and for the
consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement,
applicable state and federal securities laws and liens or encumbrances created by or imposed by GSK. Assuming the accuracy of the representations of GSK in Section 3 of this Agreement and
subject to the filings described in Section 2(f) below, the Shares will be issued in compliance with all applicable federal and state securities laws. 

H-2

 

        (g)    Litigation.    There is no Action pending or, to Purchaser's Knowledge, threatened that would prevent or delay
the consummation by Purchaser of the issuance, sale and delivery of the Shares contemplated hereby or affect the legality, validity or enforceability of this Agreement. 

        3.    Investment Representations.    In connection with the issuance of the Shares, GSK represents to the Company the
following: 

        (a)   This
Agreement when executed and delivered by GSK will constitute a valid and legally binding obligation of GSK, enforceable in accordance with its terms, except as
enforceability may be limited or affected by applicable bankruptcy, insolvency, moratorium, reorganization or other laws of general application relating to or affecting creditors' rights generally. 

        (b)   The
Shares to be acquired by GSK hereunder will be acquired for investment for GSK's own account and not with a view to the public resale or distribution thereof within
the meaning of the Securities Act. GSK further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any
third person with respect to any of the Shares. 

        (c)   GSK
has received and reviewed information about the Company and has had an opportunity to discuss the Company's business, management and financial affairs with its
management and to review the Company's facilities. GSK believes it has received all the information it considers necessary or appropriate for deciding whether to acquire the Shares. GSK understands
and acknowledges that such discussions, as well as any written information issued by the Company, (i) were intended to describe the aspects of the Company's business and prospects which the
Company believes to be material, but were not necessarily an exhaustive description, and (ii) may have contained forward-looking statements involving known and unknown risks and uncertainties
which may cause the Company's actual results in future periods or plans for future periods to differ materially from what was anticipated and that no representations or warranties were or are being
made with respect to any such forward-looking statements or the probability of achieving any of the results projected in any of such forward-looking statements. 

        (d)   GSK
understands that the acquisition of the Shares involves substantial risk. GSK: (i) has experience as an investor in securities of companies like the Company
and acknowledges that GSK is able to fend for itself, can bear the economic risk of GSK's investment in the Shares and has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of its investment in the Shares and protecting its investment; and/or (ii) has a preexisting business relationship with the Company and/or certain of
its other officers, directors or controlling persons of a nature and duration that enables GSK to be aware of the character, business acumen and financial circumstances of such persons. 

        (e)   GSK
is an accredited investor within the meaning of Regulation D promulgated under the Securities Act. 

        (f)    GSK
understands that the Shares are characterized as "restricted securities" under the Securities Act, are being issued in a transaction not involving a public offering
and that under the Securities Act
and applicable regulations thereunder such securities may be resold without registration under the Securities Act only in certain limited circumstances. GSK represents that it is familiar with
Rule 144 of the Securities and Exchange Commission and understands the resale limitations imposed thereby and by the Securities Act. GSK understands that the Company is under no obligation to
register any of the securities sold hereunder. 

        (g)   GSK
understands that the Shares have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities
Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein. GSK understands and acknowledges that the offering of the Shares pursuant to this
Agreement will not 

H-3

 

be
registered under the Securities Act on the ground that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from the registration requirements of the
Securities Act. 

        4.    Conditions to GSK's Obligation to Complete the Closing.    The obligation of GSK to acquire the Shares at the
Closing is subject to fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived: 

        (a)    Representations and Warranties.    The representations and warranties of the Company contained in
Section 2 shall be true and correct in all material respects as of the date when made. 

        (b)    Performance.    The Company shall have performed and complied with all covenants, agreements, obligations and
conditions contained in this Agreement and the Asset Purchase Agreement that are required to be performed by or complied with by it on or before such Closing. 

        (c)    Compliance Certificate.    The Company shall deliver a certificate executed by its President certifying that
the conditions specified in Sections 4(a) and 4(b) have been fulfilled. 

        (d)    Qualifications.    All authorizations, approvals or permits, if any of any governmental authority or regulatory
body of the United States or of any state that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing. 

        (e)    Secretary's Certificate.    The Company shall deliver a certificate executed by its Secretary certifying
(i) the Bylaws of the Company, and (ii) resolutions of the Board of Directors of the Company approving this Agreement and the transactions contemplated hereby. 

        5.    Conditions to the Company's Obligation to Complete the Closing.    The obligation of the Company to issue the
Shares at the Closing is subject to fulfillment, on or before the Closing, of each of the following conditions: 

        (a)    Representations and Warranties.    The representations and warranties of GSK contained in Section 3
shall be true and correct in all material respects as of the Closing. 

        (b)    Performance.    GSK shall have performed and complied with all covenants, agreements, obligations and
conditions contained in this Agreement and the Asset Purchase Agreement that are required to be performed by or complied with by it on or before such Closing. 

        (c)    Qualifications.    All authorizations, approvals or permits, if any of any governmental authority or regulatory
body of the United States or of any state that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing. 

        6.    Stock Certificate Legends.    The share certificate evidencing the Shares issued hereunder shall be endorsed
with the following legends: 

        (a)   THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT. 

H-4

 

        (b)   THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE HOLDER
OF THIS CERTIFICATE, DATED OCTOBER 31, 2007. 

        (C)  Any
legend required by the Company's bylaws and any applicable state securities laws. 

        7.    Market Stand-Off Agreement.    GSK hereby agrees, if so requested by the managing underwriters or
the Company in connection with the initial public offering of the Company's Common Stock, that, without the prior written consent of such managing underwriters, GSK will not offer, sell, contract to
sell, grant any option to purchase, make any short sale or otherwise dispose of, assign any legal or beneficial interest in or make a distribution of any capital stock of the Company held by or on
behalf of GSK or beneficially owned by GSK in accordance with the rules and regulations of the Securities and Exchange Commission for a period of up to one hundred eighty (180) days following
the effective date of a registration statement of the Company filed under the Securities Act (and such longer period of time as may be required to comply with Rule 2711 of the National
Association of Securities Dealers, Inc. (or any successor rule thereto)); provided that all directors and officers and holders of five percent
(5%) or more of the Company's Common Stock are similarly bound. The Company may impose stop-transfer instructions with respect to the Shares subject to the foregoing restriction until the
end of said one hundred eighty (180) day (or longer) period. 

        8.    Restrictions on Transfer of the Shares.    For a period of [***] from the date of this
Agreement, GSK shall not offer, sell, contract to sell, grant any option to purchase, assign,
transfer, pledge or otherwise dispose of any Shares (other than a transfer of the Shares by GSK to any of its Affiliates (as defined in the Asset Purchase Agreement),  provided, however, that GSK shall cause any such party to agree in writing to be subject to the terms,
provisions and conditions of this Agreement, including, but not limited to, Sections 7, 8 and 9, to the same extent as GSK hereunder). 

        9.    Dispositions.    Following the expiration of the [***] period described in
Section 8 and subject to any market stand-off agreement to which GSK is a party as provided in Section 7, GSK agrees as follows with respect to disposition of all or any part
of the Shares: 

        (a)   Any
sales of Shares by GSK shall be pursuant to (i) Rule 144 (or any successor rule) under the Securities Act of 1933, as amended (the
"Securities Act") ("Rule 144") or (ii) a private placement exempt from registration under
the Securities Act or repurchase of such Shares by the Company unless GSK is invited by the Company to participate as a selling shareholder pursuant to a resale registration statement filed by the
Company. 

        (b)   As
long as the Shares which GSK continues to hold represent more than one percent (1%) of the Company's outstanding Common Stock, until the later of (i) the date
that GSK is eligible to sell any of the Shares pursuant to Rule 144(k) (or any successor rule) or (ii) the first anniversary of the initial public offering of the Company's Common Stock,
GSK shall not sell Shares in excess of [***]% of the Company's outstanding Common Stock in any 90-day period (notwithstanding that GSK might otherwise have been
free to sell additional shares under the provisions of Rule 144) unless such GSK follows the process set forth in Section 9(c) below. 

***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-5

 

        (c)   If
at any time that Section 9(b) would otherwise apply to sale of Shares, GSK proposes to sell, offer to sell, solicit offers to buy, dispose of, loan, pledge or
grant any right with respect to Shares in an amount in excess of [***]% of the Company's outstanding Common Stock (each, a
"Disposition") to any party other than an Affiliate of GSK, GSK shall give the Company at least five business days' notice of such Disposition, which
notice shall indicate the approximate number of Shares subject to the Disposition, the proposed timing of the Disposition, the desired minimum net price per share and other relevant terms (a
"Notice of Disposition"). The Company shall have the right, but not the obligation, by providing notice to GSK within five (5) business days of
receipt of a Notice of Disposition (a "Block Trade Notice"), either to (i) repurchase the Shares which are subject to the Disposition at a price
not less than the minimum net price designated in the Notice of Disposition or (ii) designate a nationally recognized broker/dealer (the "Broker") to facilitate the proposed sale through a
block trade or other organized process to be determined in the reasonable judgment of the Broker. If the Company exercises its right under Section 9(c)(ii), GSK shall cooperate in good faith
with the efforts of the Broker to complete the proposed Disposition for a period equal to the longer of (X) the time frame proposed for the Disposition in the Notice of Disposition or
(Y) ten
(10) business days after receipt of the Block Trade Notice from the Company, after which time GSK may proceed with the Disposition of any remaining Shares that were the subject of the
precipitating Notice of Disposition within the following ten (10) business days. If the Company waives its right to provide a Block Trade Notice or does not provide such a Block Trade Notice
within five (5) business days of receipt of a Notice of Disposition, GSK shall be free to make a Disposition of up to the number of Shares indicated in such Notice of Disposition at a price not
less than the minimum net price designated in the Notice of Disposition without first offering such Shares to the Company again pursuant this Section 9(c). 

        10.    Adjustment for Stock Split.    All references to the number of Shares and the purchase price of the Shares in
this Agreement shall be appropriately adjusted to reflect any stock split, reverse stock split or stock dividend or other similar change in the Shares which may be made by the Company after the date
of this Agreement and prior to the Closing. 

        11.    Termination.    In the event the Asset Purchase Agreement is terminated for any reason prior to the Closing,
this Agreement shall automatically terminate and shall forthwith become void and the parties shall have no further obligations hereunder. 

        12.    Tax Consequences.    GSK has reviewed with GSK's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this Agreement. GSK is relying solely on such advisors and not on any statements or representations of the Company or any of its
agents. GSK understands that GSK (and not the Company) shall be responsible for GSK's own tax liability that may arise as a result of this investment or the transactions contemplated by this
Agreement. 

        13.    California Corporate Securities Law.    THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS
NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES
TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 

***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-6

 

        14.    General Provisions.    

        (a)   This
Agreement shall be governed by the laws of the State of California. This Agreement represents the entire agreement between the parties with respect to the
acquisition of the Shares by GSK and may only be modified or amended in writing signed by both parties. 

        (b)   All
notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) when received, if
delivered personally, (ii) when transmitted, if telecopied (which is confirmed), (iii) upon receipt, if sent by registered or certified mail (postage prepaid, return receipt requested)
and (iv) the day after it is sent, if sent for next-day delivery to a domestic address by overnight mail or courier, to the parties at the following addresses: 

If
to GSK, to: 

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

5 Moor Drive

Research Triangle Park, North Carolina 27709

Attention: Senior Vice President, US Pharmaceuticals RTP

Facsimile: (919) 315-3183 

With copies sent concurrently to:

SmithKline
Beecham Corporation d/b/a GlaxoSmithKline

2301 Renaissance Boulevard

King of Prussia, PA 19406-2772

Vice President and Associate General Counsel, Business Development Transactions Team

Facsimile: (610) 787-7084 

If
to Company, to: 

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: President

Facsimile: (858) 410-1945 

With copies sent concurrently to:

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: Legal Department

Facsimile: (858) 332-3393 

provided, however, that if any party shall have designated a different address by notice to the others,
then to the last address so designated. 

        (c)   The
rights and benefits of the Company under this Agreement shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by the Company's successors and assigns. The rights and obligations of GSK under this Agreement may only be assigned with the prior written consent of
the Company and otherwise in accordance with Section 8 hereof; any other purported transfer otherwise shall be null and void. 

H-7

 

        (d)   Either
party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor
prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party's
right to assert all other legal remedies available to it under the circumstances. 

        (e)   GSK
agrees upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement. 

        (f)    GSK
has reviewed this Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all
provisions of this Agreement. 

        (g)   This
Agreement may be executed manually or by facsimile by the parties, in any number of counterparts, each of which shall be considered one and the same agreement and
shall become effective when a counterpart hereof shall have been signed by each of the parties and delivered to the other party. 

[Remainder of page intentionally left blank]

H-8

 

        IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above. 

	 	 	PROMETHEUS LABORATORIES INC.
	

 	
 	

By:	

 
	 	 	 	
 Name: Joseph M. Limber

Title: President and Chief Executive Officer
	

 	
 	
SMITHKLINE BEECHAM CORPORATION

d/b/a GLAXOSMITHKLINE
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

SIGNATURE PAGE TO PROMETHEUS LABORATORIES INC.

STOCK PURCHASE AGREEMENT  

H-9

EXHIBIT I  

SUPPLY AGREEMENT  

 BETWEEN  

 SMITHKLINE BEECHAM CORPORATION

d/b/a GlaxoSmithKline  

 AND  

 PROMETHEUS LABORATORIES INC.  

 DATED AS OF  

 October 31, 2007  

 
TABLE OF CONTENTS  

	 
	 	 
	 	Page No.

	Article I Definitions	 	1
	

Article II Sale and Purchase of Products	
 	

4
	 	2.1	 	General	 	4
	 	2.2	 	Prometheus Monthly Forecasts	 	4
	 	2.3	 	Purchase Orders	 	5
	 	2.4	 	Accommodations	 	6
	 	2.5	 	Quarterly Meetings	 	6
	 	2.6	 	Purchase of Products and Materials upon Expiration or Termination	 	6
	

Article III Prices for Products; Shipment; Payments	
 	

7
	 	3.1	 	Price; Annual Adjustment	 	7
	 	3.2	 	Invoices	 	8
	 	3.3	 	Payment	 	9
	 	3.4	 	Payment Denominations	 	9
	 	3.5	 	Shipment; Title; Inspection	 	9
	 	3.6	 	Taxes	 	10
	 	3.7	 	Timely Delivery	 	11
	

Article IV Manufacture of Products	
 	

11
	 	4.1	 	General	 	11
	 	4.2	 	Specification Changes	 	12
	 	4.3	 	Validations and Stability Studies	 	13
	 	4.4	 	Materials	 	14
	 	4.5	 	Quality Agreement	 	15
	 	4.6	 	Manufacturing Transition; API Materials	 	15
	 	4.7	 	Shelf Life	 	17
	

Article V Confidentiality	
 	

17
	 	5.1	 	Confidentiality	 	17
	 	5.2	 	Limitations	 	17
	 	5.3	 	Term of Confidentiality	 	18
	 	5.4	 	Ownership of Confidential Information	 	18
	

Article VI Product Testing and Quality Assurance; Nonconformity	
 	

18
	 	6.1	 	Testing of Product	 	18
	 	6.2	 	Nonconformity	 	18
	 	6.3	 	Product Holds and Rejections	 	19
	 	6.4	 	Product Complaints	 	19
	 	6.5	 	Adverse Events	 	19
	 	6.6	 	Investigations	 	20
	 	6.7	 	Product Events, Withdrawals, Field Corrections and Field Alerts	 	20
	 	6.8	 	Disposition of Certain Products	 	20
	 	6.9	 	Replacements; Credits; Refunds	 	20
	 	6.10	 	Product Returns from the Field	 	22
	 	6.11	 	Retained Samples	 	22
	

Article VII Regulatory Matters	
 	

22
	 	7.1	 	Manufacturing Consents	 	22
	 	7.2	 	Product Consents	 	22
	 	7.3	 	Drug Application Documentation	 	23

i

 

	 	7.4	 	Regulatory Changes	 	23
	 	7.5	 	Regulatory Inspections	 	23
	 	7.6	 	Warning Letters	 	23
	

Article VIII Intellectual Property	
 	

24
	 	8.1	 	Ownership	 	24
	 	8.2	 	New Developments and Modifications	 	24
	 	8.3	 	Grant of Licenses	 	24
	 	8.4	 	Infringement	 	25
	

Article IX Access; Audit Rights	
 	

25
	 	9.1	 	Audit and Inspection Rights	 	25
	 	9.2	 	Documentation	 	26
	

Article X Representations and Warranties	
 	

26
	 	10.1	 	Representations and Warranties of GSK	 	26
	 	10.2	 	Representations and Warranties of Prometheus	 	27
	

Article XI Liability and Indemnification	
 	

28
	 	11.1	 	Indemnity by GSK	 	28
	 	11.2	 	Indemnity by Prometheus	 	28
	 	11.3	 	Procedures	 	29
	 	11.4	 	Limitations of Liability	 	29
	

Article XII Insurance	
 	

30
	 	12.1	 	GSK Insurance Requirements	 	30
	 	12.2	 	Prometheus Insurance Requirements	 	30
	

Article XIII Force Majeure Event	
 	

30
	 	13.1	 	General	 	30
	 	13.2	 	Termination; Transition	 	31
	

Article XIV Term; Termination; Remedies	
 	

31
	 	14.1	 	Term	 	31
	 	14.2	 	Termination	 	31
	 	14.3	 	Injunctive Relief	 	32
	

Article XV Miscellaneous	
 	

33
	 	15.1	 	Standard Forms	 	33
	 	15.2	 	Notices	 	33
	 	15.3	 	Independent Contractors	 	34
	 	15.4	 	Entire Understanding	 	34
	 	15.5	 	Unintentional Omissions	 	34
	 	15.6	 	Transferability; Binding Effect	 	34
	 	15.7	 	Dispute Resolution	 	34
	 	15.8	 	Subcontractors	 	35
	 	15.9	 	Amendment	 	35
	 	15.10	 	Severability	 	35
	 	15.11	 	Waiver	 	35
	 	15.12	 	Survival	 	35
	 	15.13	 	Drafting Ambiguities	 	35
	 	15.14	 	Headings; Schedules; Counterparts	 	35
	 	15.15	 	Governing Law	 	36

ii

 
SCHEDULES TO AGREEMENT  

	2.2(a)	 	Form of Forecast
	2.6(a)	 	API Price
	2.6(b)	 	Materials Specific to the Products
	3.1	 	Product Prices and Standard Batch Sizes
	3.2(c)	 	Form of Trading Services Agreement
	4.1	 	Specifications Index
	4.4(a)	 	API Intermediate Material
	4.5	 	Form of Quality Agreement
	4.6(a)	 	Transition Plan Parameters
	4.6(c)	 	API Raw Material and Intermediates

iii

SUPPLY AGREEMENT  

        THIS SUPPLY AGREEMENT (this "Agreement") is made and entered into as of the 31st day of October, 2007 by and between SMITHKLINE BEECHAM
CORPORATION, a Pennsylvania corporation doing business as GlaxoSmithKline ("GSK"), and PROMETHEUS LABORATORIES INC., a California corporation ("Prometheus"). GSK and Prometheus are sometimes
referred to herein individually as a "Party" and collectively as "Parties." 

RECITALS  

        WHEREAS, on October 31, 2007, GSK and Prometheus entered into an Asset Purchase and Sale Agreement (the "Asset Purchase Agreement") pursuant to which GSK
agreed to sell, and Prometheus agreed to buy, all of GSK's rights, title and interests in certain assets related to the Product (as defined below) for manufacture, distribution, marketing and sale in
the Territory (as defined in the Asset Purchase Agreement); and 

        WHEREAS,
in connection with the Asset Purchase Agreement, the Parties wish to enter into this Agreement pursuant to which, as of the Effective Date, GSK will manufacture and supply the
Product during the Term (as defined below). 

AGREEMENT  

        NOW, THEREFORE, in consideration of the foregoing recitals, mutual covenants, agreements, representations and warranties contained herein, the Parties hereby
agree as follows: 

Article I
 Definitions  

        "Adverse Event" shall have the meaning provided in Section 6.5 of this Agreement. 

        "Affiliate"
of a Party or Person means any Person, whether de jure or de facto, that directly or indirectly, controls, is controlled by, or is under common control with such Party or
Person, as
applicable. Solely as used in this definition, "control" means (a) direct or indirect ownership of more than fifty percent (50%) of the equity (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or direct the affairs of such Party or Person, as applicable, or (b) the possession,
directly or indirectly, of the power to direct or cause the direction of the policies and management of such Party or Person, as applicable, whether by the ownership of stock, by contract, or
otherwise. 

        "Agreement"
shall have the meaning provided in the first paragraph of this Agreement. 

        "API"
shall mean the active pharmaceutical ingredient included in the Products, alosetron hydrochloride. 

        "API
Intermediate" shall have the meaning provided in Section 4.4(a). 

        "Applicable
Law" means all applicable provisions of any and all federal, national, state, provincial, and local statutes, laws, rules, regulations, administrative codes, ordinances,
decrees, orders, decisions, injunctions, awards, judgments, permits and licenses of or from governmental authorities relating to or governing the use or regulation of the subject item, including,
without limitation, the Medicare and Medicaid Anti-Kickback Statute set forth at 42 U.S.C. §1320a-7b(b), the FD&C Act and the PDMA. 

        "Asset
Purchase Agreement" shall have the meaning provided in the first recital of this Agreement. 

        "Business
Day" (whether or not the word is capitalized) shall mean any day other than (i) a day identified by GSK to Prometheus as a non-working day at the Facility or
a day identified by Prometheus to GSK as a non-working day, or (ii) a day which is a Saturday, a Sunday or any day banks are authorized or required to be closed in the State of
North Carolina or California. 

 

        "Certificate
of Analysis" shall mean a document identified as such and provided by GSK to Prometheus that (i) sets forth the analytical test results for a specified lot of
Products shipped to Prometheus or its designee hereunder, (ii) is in conformance with each applicable Drug Application and (iii) states whether such Products are manufactured in
accordance with cGMPs and the Specifications. 

        "Claim"
shall have the meaning provided in Section 15.7 of this Agreement. 

        "Closing"
shall have the meaning provided in the Asset Purchase Agreement. 

        "Closing
Date" shall have the meaning provided in the Asset Purchase Agreement. 

        "Confidential
Information" shall have the meaning provided in Section 5.1 of this Agreement. 

        "Consent"
shall mean any consent, authorization, permit, certificate, license or approval of, exemption by, or filing or registration with, any Governmental Authority or other Person. 

        "cGMPs"
shall mean all applicable standards relating to manufacturing practices for fine chemicals, intermediates, bulk products or finished pharmaceutical products. For purposes of this
Agreement, cGMPs shall mean (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 CFR Parts 210 and 211 and The Good Manufacturing Practice for Medicinal
Products in the European Community, Volume IV, as each may be amended from time to time; or (ii) promulgated by any Governmental Authority having jurisdiction over the manufacture of the
Products, including those in the form of guidance documents (including but not limited to advisory opinions, compliance policy guides and guidelines) that are being implemented within the
pharmaceutical manufacturing industry for such Products, and subject to any arrangements, additions or clarifications agreed to from time to time by the Parties in the Quality Agreement. 

        "Days"
(whether or not the word is capitalized) shall mean, except where specified otherwise, calendar days. 

        "Delivered"
or "Delivery" shall have the meaning provided in Section 3.5(b) of this Agreement. 

        "Delivery
Date" shall mean for each shipment the date specified by Prometheus in the related Purchase Order that GSK shall make the Products available for such shipment out of the
Facility in accordance with this Agreement. 

        "Drug
Application" shall mean any New Drug Application (NDA) filed with the FDA, any Abbreviated New Drug Application (ANDA) filed with the FDA, any Supplemental New Drug Application
(sNDA) filed with the FDA, any product license or any equivalent drug application or similar pharmaceutical product approval administered by any foreign Governmental Authority, or extension or renewal
of any of the foregoing. 

        "Effective
Date" shall mean the Closing Date. 

        "Facility"
shall mean GSK's manufacturing facility located in Zebulon, North Carolina, USA. 

        "FD&C
Act" means the Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated thereunder from time to time. 

        "FDA"
shall mean the United States Food & Drug Administration or any successor agency. 

        "Firm
Zone" shall have the meaning provided in Section 2.2(b) of this Agreement. 

        "Force
Majeure Event" shall have the meaning provided in Section 13.1 of this Agreement. 

        "Forecast"
shall have the meaning provided in Section 2.2(a) of this Agreement. 

        "Governmental
Authority" shall mean any nation or government, any provincial, state, regional, local, or other political subdivision thereof, any supranational organization of sovereign
states, and any entity, department, commission, bureau, agency, authority, board, court, official or officer, domestic or 

2

 

foreign,
exercising executive, judicial, regulatory or administrative functions of or pertaining to government. 

        "GSK"
shall have the meaning provided in the first paragraph of this Agreement. 

        "GSK
Indemnitee" shall have the meaning provided in Section 11.2 of this Agreement. 

        "GSK
Intellectual Property" shall mean any and all Intellectual Property relating to the manufacture of pharmaceutical products generally that was (i) owned by or licensed by GSK
or GSK Affiliates at the Effective Date (other than Intellectual Property relating to the Products purchased by or licensed to Prometheus under the Asset Purchase Agreement), or (ii) developed
or acquired by GSK or GSK Affiliates on or after the Effective Date. 

        "Indemnified
Party" shall have the meaning provided in Section 11.3 of this Agreement. 

        "Indemnifying
Party" shall have the meaning provided in Section 11.3 of this Agreement. 

        "Initial
Term" shall have the meaning provided in Section 14.1 of this Agreement. 

        "Intellectual
Property" shall have the meaning provided in the Asset Purchase Agreement. 

        "Loss"
and "Losses" shall have the meaning, collectively, provided in the Asset Purchase Agreement. 

        "Materials"
shall mean (i) all raw materials, components, work-in-process and other ingredients including finished API required to manufacture the Products
and (ii) all labels and packaging materials used in the manufacture, storage and shipment of Products. For the avoidance of doubt, the above definition of Materials does not include API
Intermediate or API raw materials and intermediates identified on Schedule 4.6(c). 

        "Materials
Certification" shall have the meaning provided in Section 4.4(c) of this Agreement. 

        "Nonconformity"
shall have the meaning provided in Section 6.2(a) of this Agreement. 

        "Party"
and "Parties" shall have the meanings given such terms, respectively, in the first paragraph of this Agreement. 

        "PDMA"
means the Prescription Drug Marketing Act of 1987, as amended, and the regulations promulgated thereunder from time to time. 

        "Person"
shall mean any individual, corporation, partnership, firm, association, joint venture, joint stock company, trust or other entity, or any Governmental Authority. 

        "Process
Developments" shall have the meaning provided in Section 8.2(a) of this Agreement. 

        "Product
Developments" shall have the meaning provided in Section 8.2(a) of this Agreement. 

        "Product
Event" shall have the meaning provided in Section 6.7 of this Agreement. 

        "Product
Price" shall have the meaning provided in Section 3.1 of this Agreement. 

        "Products"
or "Product" shall mean the Lotronex® (alosetron hydrochloride) pharmaceutical products set forth on  Schedule 3.1. 

        "Prometheus
Indemnitee" shall have the meaning provided in Section 11.1 of this Agreement. 

        "Prometheus
Intellectual Property" shall mean any and all Intellectual Property relating to the Products that was (i) purchased by Prometheus from GSK under the Asset Purchase
Agreement as of the Effective Date, or (ii) developed or acquired by Prometheus on or after the Effective Date. 

        "Prometheus
Rights" shall have the meaning provided in Section 8.3(a) of this Agreement. 

        "Purchase
Order" shall have the meaning provided in Section 2.3 of this Agreement. 

3

 

        "Quality
Agreement" shall have the meaning provided in Section 4.5 of this Agreement. 

        "Quarterly
Meeting" shall have the meaning provided in Section 2.5 of this Agreement. 

        "Regulatory
Acts" shall mean, as applicable, the United States Federal Food, Drug and Cosmetic Act, as amended, the rules and regulations thereunder, and any other laws and regulations
governing the approval, manufacture, sale or licensing of pharmaceutical products or ingredients for inclusion applicable to the Products. 

        "Regulatory
Authorities" shall mean any division of the FDA and any other applicable counterpart agency or authority that administers any Applicable Laws governing the approval,
manufacture, sale or licensing of pharmaceutical products or ingredients for inclusion therein applicable to the Products. 

        "Renewal
Term" shall have the meaning provided in Section 14.1 of this Agreement. 

        "Specifications"
shall mean, as applicable, all specifications for the finished Product, the Materials, approved suppliers, formula, manufacturing, analytical and testing procedures,
release, filling, packaging, storage, labeling, artwork and other processes relating to the manufacture of the Products as agreed by the Parties and indexed in  Schedule 4.1 to this Agreement,
including all master formulas and process flow diagrams, all as amended from time to time by the Parties under
Section 4.2 of this Agreement. 

        "Tax"
or "Taxes" means any and all taxes, assessments, levies, tariffs, amounts subject to escheat, duties or other charges or impositions in the nature of a tax (together with any and
all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority. 

        "Term"
shall have the meaning provided in Section 14.1 of this Agreement. 

        "Territory"
shall have the meaning provided in the Asset Purchase Agreement. 

        "Third
Party(ies)" shall mean any Person other than the Parties or their respective Affiliates. 

        "Third
Party Claim" shall have the meaning provided in Section 11.1 of this Agreement. 

        "Third
Party Supplier" shall have the meaning provided in Section 4.6 of this Agreement. 

        "Trading
Services Agreement" shall have the meaning provided in Section 3.2(c) of this Agreement. 

Article II
 Sale and Purchase of Products  

        2.1    General.    

        Subject
to the terms and conditions of this Agreement, during the Term, GSK agrees to manufacture the Product exclusively at the Facility for sale to Prometheus, and Prometheus agrees to
purchase on a non-exclusive basis from GSK the Product for sale within the Territory. Until such time as Prometheus obtains all necessary Consents from the appropriate Regulatory
Authorities for manufacture of the Products by Prometheus or its Third Party supplier(s) as described in Section 4.6, Prometheus will not sell Products manufactured by Prometheus or its Third
Parties in the Territory. For the avoidance of doubt, nothing in this Section 2.1 shall limit Prometheus' ability to enter into agreements for the manufacture and supply of the Product from
Third Party Suppliers as contemplated by Section 4.6. 

        2.2    Prometheus Monthly Forecasts.    

        (a)    General.    During the Term, and starting immediately on the Effective Date, Prometheus shall provide to GSK,
substantially in the format set forth in Schedule 2.2(a), the then current Product inventory balance and a projection for the next succeeding
twenty-four (24) months (or such shorter period remaining under the Term) of the anticipated volumes of each Product (each, a "Forecast") to be ordered by Prometheus pursuant to
Section 2.3 below. Projected volumes for each Product for each month in the Forecast shall be equivalent to full increments of GSK's standard batch size for each Product as per  Schedule 3.1.
Prometheus shall provide such rolling projections to GSK on the first Business Day of each month during the Term. 

4

 

        (b)    Firm Zone.    The volume requirements for each Product as set forth for each of the first four
(4) months of each such Forecast will be a binding commitment to purchase the specified volumes of those Products (each such four month period shall be referred to herein as the "Firm Zone").
In developing the updated monthly Forecast, Prometheus shall ensure that the Product volumes for the new month rolling into the new Firm Zone portion of such updated Forecast (i.e., when month
five (5) in the preceding Forecast becomes month four (4) in such updated Forecast) shall not vary by more than the greater of either (i) plus or minus
[***] or (ii) plus or minus [***] percent (±[***]%) from Prometheus' forecasted
requirements specified for such month in the previous month's submitted Forecast. 

        (c)    Non-Binding Forecasts.    The Product volumes specified for the fifth (5th) through the
twenty-fourth (24th) month of each Forecast shall be non-binding estimates of future Product requirements. 

        2.3    Purchase Orders.    

        Contemporaneously
with its delivery of a Forecast, Prometheus shall deliver to GSK a purchase order (each, a "Purchase Order") for any Product volumes in such Firm Zone for which
Purchase Orders have not already been submitted in prior months, and such Product volumes shall be equivalent to full increments of GSK's standard batch size for each Product as per  Schedule 3.1.
Each Purchase Order shall specify the volumes of Products ordered, and the Delivery Date the Product is to be made available to
Prometheus for pick-up by Prometheus' designated carrier or freight
forwarder. Purchase Orders may be delivered electronically or by other means to such location as GSK shall reasonably designate. Prometheus shall issue each Purchase Order to GSK not less than one
hundred twenty (120) days prior to (i) the Delivery Date on which Prometheus has requested GSK to deliver Product pursuant to each such Purchase Order, and (ii) the termination of
this Agreement pursuant to Section 14.2(a) or the expiration of the Term. Provided that the Product volumes conform to the Firm Zone volumes under Section 2.2 and requested Delivery
Dates on any Purchase Order conform to the requirements of the immediately preceding sentence, GSK will review and accept such Purchase Order within five (5) Business Days after receipt
thereof. If Product volumes or requested Delivery Dates on any Purchase Order do not so conform in any respect, then such Purchase Order shall be reviewed and handled by the parties in accordance with
Section 2.4. In the absence of the receipt by GSK of a Purchase Order for any volumes in the Firm Zone, the volumes forecast in such Firm Zone shall constitute a binding Prometheus Purchase
Order. Purchase Order quantities Delivered by GSK may vary by ± [***] percent ([***]%) from the quantities
ordered. Such variances shall not constitute a breach of contract by GSK, provided that Prometheus shall only be obligated to pay for the amount of invoiced Product actually received, subject to
Sections 6.2 and 6.3. Notwithstanding anything to the contrary herein, following the date on which Prometheus has received the required Regulatory Authority Consents to manufacture the Products
at its own facility, or at a Third Party facility as described in Section 4.6, Prometheus may elect to no longer submit Forecasts or Purchase Orders under Sections 2.2 and 2.3 provided
that Prometheus shall notify GSK in writing that it will no longer submit Forecasts and/or Purchase Orders. If Prometheus provides such notice, then GSK shall only be obligated to accept any Purchase
Orders that conform with the last monthly Forecast and such corresponding Firm Zone submitted by Prometheus prior to such notice. For the avoidance of doubt, Prometheus may continue to submit monthly
Forecasts per Section 2.2 (even if Prometheus already has received the required Regulatory Authority Consents for manufacture as described in Section 4.6) and the Parties' obligations to
submit and accept Purchase Orders shall continue to be governed by Sections 2.3 and 2.4 during the Term and subject to conditions per Section 4.4(a) and 14.2(b). 

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5

 

        2.4    Accommodations.    

        From
time to time, due to significant unforeseen circumstances, Prometheus may deliver to GSK a Purchase Order for Product volumes in excess of those specified in any Firm Zone or with
Delivery Dates shorter than the periods specified in Section 2.3, accompanied by Prometheus' written request for an accommodation. Within ten (10) Business Days after GSK's receipt of
such Purchase Order and Prometheus' written request, GSK shall determine whether using commercially reasonable efforts it can
provide Prometheus with such excess Product volumes or the Product within such expedited Delivery Date without incurring incremental costs, but shall not be obligated to accommodate Prometheus if
doing so would adversely impact GSK's ability to fulfill its requirements or GSK's commitments to other customers. Within ten (10) Business Days after GSK's receipt of such Purchase Order and
Prometheus' written request, (a) if GSK determines it can accommodate Prometheus' request without incurring any additional incremental costs, then it shall accept such Purchase Order;
(b) if GSK determines it cannot accommodate Prometheus' request or that accommodating Prometheus' request would adversely impact GSK's ability to fulfill its commitments to other customers,
then it shall reject such Purchase Order; and (c) if GSK determines that additional incremental costs (e.g., expedited shipping, special handling, overtime, etc.) or any other
requirements would be needed to accommodate Prometheus' request, then GSK shall provide Prometheus with written notification of such incremental costs or other requirements. If GSK provides written
notice that additional incremental costs or other requirements are necessary to accommodate Prometheus' request, Prometheus shall, at its option, by written notice to GSK, either: (i) agree to
reimburse GSK for such additional incremental costs to be incurred or agree to such other requirements, as applicable (and GSK shall promptly accept such Purchase Order), or (ii) promptly amend
its Purchase Order to reduce its order quantity to the forecasted amount or adjust its lead time to the amount specified in Section 2.3, as applicable. 

        2.5    Quarterly Meetings.    

        Unless
otherwise mutually agreed in writing, the Parties shall meet either face-to-face or via teleconference (as mutually determined by the parties) no less than
quarterly to discuss the Forecasts delivered by Prometheus pursuant to this Agreement and other matters relevant to the supply of Products hereunder (each such meeting hereinafter referred to as a
"Quarterly Meeting"). Prometheus shall provide to GSK at each Quarterly Meeting all other readily available, appropriate data relating to the Products or Prometheus' prospective demands and trends for
the Products. 

        2.6    Purchase of Products and Materials upon Expiration or Termination.    

        (a)    Products and API.    Within ten (10) Business Days of any termination of this Agreement under
Section 14.2(b) and 14.2(d) or by Prometheus pursuant to Section 14.2(a) or 14.2(c) or the expiration of this Agreement, GSK shall provide Prometheus with a description of all finished
Products and API then held in GSK inventory subject to Section 6.1. Within ten (10) Business Days of Prometheus' receipt of such description, Prometheus shall submit a purchase order for
all of such inventory of Products and/or API, which purchase order shall specify a purchase price equal to (i) for the then-current Product Price per  Schedule 3.1 and (ii) the API price
set forth on Schedule 2.6 for finished API, and GSK shall sell all of the foregoing inventory
of Products and/or API to Prometheus for such purchase price. In the event a purchase order is not provided, then Prometheus shall be deemed to have provided a purchase order for all of such inventory
of Products and/or API. For the avoidance of doubt, Products or API sold to Prometheus under this Section 2.6(a) are subject to Article VI. 

6

 

        (b)    Materials.    Within ten (10) Business Days of any termination of this Agreement under
Section 14.2(b) and 14.2(d) or by Prometheus pursuant to Section 14.2(a) or 14.2(c) or the expiration of this Agreement, GSK shall provide Prometheus with a description of all quantities
of Materials listed on Schedule 2.6(b), as such Schedule is amended by the Parties from time to time to conform with Materials changes reflected
in any Specification changes made pursuant to Section 4.2, then held in GSK inventory that are (i) specific to the Product, (ii) have been maintained by GSK consistent with the
requirements of Section 4.4(a) and (iii) not otherwise usable by GSK in its ordinary course of business of manufacturing pharmaceutical products. Within ten (10) Business Days of
Prometheus' receipt of such description, Prometheus shall submit a purchase order for all of such inventory of Materials and such purchase order shall specify a purchase price equal to GSK's invoiced
cost for Materials, and GSK shall sell all of the foregoing inventory of Materials to Prometheus for such purchase price. In the event a purchase order is not provided, then Prometheus shall be deemed
to have provided a purchase order for all of such inventory of Materials. For the avoidance of doubt, Materials sold to Prometheus under this Section 2.6(b) are subject to
Section 6.9(d). 

        (c)   GSK
shall use commercially reasonable efforts to make available to Prometheus for pickup by Prometheus' carrier the Products, API and Materials purchased by Prometheus
under subsections (a) and (b) of this Section 2.6 as soon as practicable (and in any case within fifteen (15) days) after Prometheus' purchase order therefor. Should
Prometheus desire for GSK to destroy any of such Products, API, or Materials, Prometheus shall provide written notice to GSK to destroy such Products, API or Materials at Prometheus' expense and GSK
shall comply with Prometheus request. The Parties
agree and acknowledge that the Parties' rights and obligations under this Section 2.6 with respect to purchases at contract expiration or termination are independent of the Parties' rights and
obligations with respect to purchases during the Initial Term under Sections 4.6(b) and (c). 

Article III
 Prices for Products; Shipment; Payments  

        3.1    Price; Annual Adjustment.    

        (a)   During
the Term, Prometheus shall pay the applicable price for each Product set forth on Schedule 3.1, attached
hereto and incorporated herein ("Product Price"), subject to adjustment as described in this Section 3.1. 

        (b)   The
Product Prices will be reviewed annually during the Initial Term and first Renewal Term, and if required may be adjusted each January 1 beginning in January
2009 upon sixty (60) days written notice from GSK to Prometheus. Any increase during the Initial Term and first Renewal Terms shall not be in excess of [***]. The
Parties promptly shall amend Schedule 3.1 to reflect any such price adjustments during the Initial Term and first Renewal Term. 

        (c)   

          (i)  In
the event Prometheus elects to extend the Agreement per Section 14.1 beyond the first Renewal Term, then at the end of the first Renewal Term, the Product
Prices then in effect shall be automatically increased by [***] percent ([***]%) and the Product Prices shall be applied retroactively to the
beginning of the first Renewal Term and the Parties promptly shall amend Schedule 3.1 to reflect such price adjustments. GSK will calculate the
new value of the Product supplied during the first Renewal Term based on the adjusted Product Price 

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7

 

per
Schedule 3.1 and issue an invoice (payable in full within ten (10) days) to Prometheus for the difference between the new value of Product supplied and the amount previously invoiced
for Product. Any subsequent invoices for the first Renewal Term shall reflect the adjusted Product Price per the amended Schedule 3.1.
Notwithstanding the foregoing, if GSK's failure to timely perform its obligations under the Transition Plan prevents Prometheus' planned qualification of a Third Party Supplier of Product prior to the
end of the Initial Term, then the effective date of the [***] percent ([***]%) price increase under this Section 3.1(c)(i) shall be
delayed an amount of days equal to the number of days GSK's performance delayed Prometheus' qualification of a Third Party Supplier of Product. 

         (ii)  At
the beginning of any subsequent Renewal Term(s), the Product Prices in effect at the end of the immediately preceding Renewal Term (including, for the avoidance of
doubt, the adjusted price per Section 3.1(c)(i)) shall be automatically increased by [***] percent ([***]%) and the Parties promptly shall
amend Schedule 3.1 to reflect any such price adjustments. 

        (d)   Except
as set forth herein, Prometheus shall be responsible for all costs related to the preparation of new packaging Materials, including all new packaging artwork
design and preparation, die costs, films and proofs. Notwithstanding the foregoing, GSK shall be responsible for those costs associated with the initial labeling change as described in
Section 4.2(d)(ii), other than costs related to obsolete Materials. Prometheus shall be responsible for all costs of obsolete Materials (including all labels and packaging materials) and
associated destruction of such obsolete Materials by GSK related to any changes related to labels or packaging Materials under Section 4.2(d), except where GSK requests a labeling change
pursuant to Section 4.2.(d)(i), in which case GSK shall be responsible for all costs of obsolete Materials (including all labels and packaging materials) and associated destruction of such
obsolete Materials by GSK related to such changes. 

        (e)   Prometheus
shall be responsible for all costs of new or replacement tooling costs specific to the Product which is required and associated with manufacturing or
packaging for the Products, except where the negligence of GSK is the direct cause of Prometheus having to make such new/replacement tooling investment. 

        (f)    Prometheus
shall be responsible for the cost of any Specification changes (i) requested by Prometheus pursuant to Section 4.2 to maintain high standards
but that are not required for compliance with Regulatory Acts and Applicable Laws, (ii) required for compliance with Regulatory Acts and Applicable
Laws that are specific to the Product, or (iii) required for compliance with Regulatory Acts and Applicable Laws that are not specific to the Product but nonetheless impact upon the Product,
but in such case, only such incremental cost attributed to the Product and excluding any amounts attributable to capital expenses (e.g., equipment or Facility improvements) that cannot be
identified specifically to and used exclusively for the Product. 

        (g)   GSK
shall be responsible for the cost of any Specification changes requested by GSK pursuant to Section 4.2 to maintain high standards but that are not required
for compliance with Regulatory Acts and Applicable Laws. In addition, GSK shall be responsible for cost of all other Specification changes required pursuant to Section 4.2 for compliance with
Regulatory Acts and Applicable Laws that are not Prometheus' responsibility under Section 3.1(f). 

        3.2    Invoices.    

        (a)   All
invoices for API, API Intermediate, Materials or API raw materials and intermediates purchased by Prometheus under Sections 2.6(a), 2.6(b) or 4.6(c) or for
expenses, fees or costs 

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(other
than expenses, fees or costs for the purchase of Product) that Prometheus is obligated to pay to GSK under this Agreement must be submitted by GSK (or its Affiliate) to Prometheus at
Prometheus' designated address. 

        (b)   All
invoices for Products shall be submitted by GSK (or its Affiliate) to Prometheus at Prometheus' designated address upon release of Products for Delivery to
Prometheus as set forth in the applicable Trading Services Agreement. 

        (c)   Not
less than thirty (30) days prior to Delivery of the first shipment of Product to Prometheus, Prometheus and GSK's Affiliate shall enter into an agreement in
the form set forth in Schedule 3.2(c) (the "Trading Services Agreement"). For the avoidance of doubt, in the event of any inconsistency or
conflict between the terms of the Trading Services Agreement and this Agreement, the terms of this Agreement shall govern. 

        3.3    Payment.    

        Payments
for Products or reimbursable costs and/or expenses invoiced under Section 3.2 shall be due net thirty (30) days from the date of invoice. Any payment due GSK (or
its Affiliate) from Prometheus that is past due under this Agreement and not subject to a bona fide dispute shall bear interest at a rate equal to the [***] of
(i) [***] percent
([***]%) per year or (ii) the maximum rate permitted by Applicable Law, calculated based on the number of days that the payment is delinquent. Prometheus and GSK
stipulate and acknowledge that the credit terms stated herein expressly represent a financial accommodation and are a material and not merely incidental part of this Agreement. Accordingly,
Prometheus' rights to any extension of credit are subject to 11 U.S.C. §§ 365(c)(2) and 365(e)(2)(B). Prometheus and GSK further stipulate and acknowledge that the
financial condition of Prometheus is a material condition to GSK's willingness to sell on credit to Prometheus, and accordingly, if Prometheus fails to timely pay any amounts due under this
Section 3.3 (excluding amounts that are the subject of a bona fide dispute), at GSK's sole election, GSK may (i) require cash payment for all current amounts due, and/or
(ii) require cash payment for all future amounts due or appropriate security before resumption of any future shipments of Product or API. If Prometheus fails to comply with GSK's election under
(i) and/or (ii), at GSK's sole election, GSK may additionally (a) delay or deny future Product or API shipments, and/or (b) delay or suspend its existing manufacturing obligations
under this Agreement. GSK's delay, denial and suspension pursuant to this Section 3.3 shall not be a material breach of GSK's obligations under this Agreement. 

        3.4    Payment Denominations.    

        All
payments to be made under this Agreement shall be made in United States dollars unless otherwise specified herein or agreed by the Parties. 

        3.5    Shipment; Title; Inspection.    

        (a)    General.    All Products shall be shipped [***] (as defined in INCOTERMS, 2000 edition,
published by the International Chamber of Commerce, ICC Publication 560) [***]. GSK will load the Product onto the transport vehicle of Prometheus' designated carrier or
freight forwarder at the Facility. Pallet configurations for the Product shall be set forth in the applicable Specifications. 

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        (b)    Title/Risk of Loss.    Title to and risk of loss with respect to any Products shall pass from GSK to Prometheus
when GSK finishes loading the Product onto the transport vehicles of Prometheus' designated carrier or freight forwarder at the Facility. Product shall be deemed delivered to Prometheus upon GSK's
completion of loading the Product onto the transport vehicles of Prometheus' designated carrier or freight forwarder at the Facility ("Delivered" or "Delivery"). 

        (c)    Inspection.    Following receipt of a shipment of Product from GSK, Prometheus or its designated agent shall,
within thirty (30) days, carry out a visual inspection of such shipment to ensure that packaging and labeling of Product has taken place in accordance with the Specifications and is accompanied
by an associated Certificate of Analysis, and shall notify GSK in writing if the visual inspection reveals any quantitative discrepancies or other deficiencies. For the purposes of this Agreement,
"visual inspection" also shall include: 

          (i)  comparing
the applicable Purchase Order against the documentation accompanying the shipment to verify that the Delivery Date, identity, quantity and exterior shipment
labeling comply with the Purchase Order and match the accompanying documentation for the shipment of Product; 

         (ii)  verifying
that the Certificate of Analysis for the shipment conforms in all material respects with the requirements of this Agreement; and 

        (iii)  visually
inspecting the exterior of the shipment of Products to verify that the shipment appears to be in good condition. 

        3.6    Taxes.    

        (a)   Prometheus
shall be responsible for (i) any personal property Taxes on property it owns or leases; (ii) franchise and privilege Taxes on its business; and
(iii) Taxes based on its net income or gross receipts. 

        (b)   GSK
shall be responsible for (i) any personal property Taxes on property it owns or leases; (ii) franchise and privilege Taxes on its business; and
(iii) Taxes based on its net income or gross receipts. 

        (c)   GSK
shall bear all responsibility and liability for all sales, use, excise, value-added, services, consumption, and other Taxes and duties payable by GSK on any goods or
services used or consumed by GSK in manufacturing the Products where the Tax is imposed on GSK's acquisition or use of such goods or services and the amount of Tax is measured by GSK's costs in
acquiring these goods or services. GSK shall be solely responsible for (i) payment of all compensation to GSK personnel, whether employees or subcontractors of GSK, (ii) all health or
disability insurance, retirement benefits, and other welfare or pension benefits to which GSK employees may be entitled and (iii) all employment Taxes and withholding with respect to GSK
employees. 

10

 

        3.7    Timely Delivery.    

        GSK
shall use commercially reasonable efforts to ensure that each Product delivery to Prometheus and/or its designee is made within the time frames requested by Prometheus on accepted
Purchase Orders. From time to time, GSK may be unable to meet the Delivery Date set forth in an accepted Purchase Order. In such an event, GSK promptly shall notify Prometheus of the revised Delivery
Dates. Prometheus shall provide GSK prompt notice of its agreement to such revised Delivery Dates unless the revised dates would reasonably be expected to result in having less than thirty
(30) days of
safety stock or in short-dated Product inventory with less than twelve (12) months remaining shelf life. If the revised Delivery Dates would result in Prometheus having less than thirty
(30) days of safety stock or short-dated Product situation, Prometheus shall provide GSK notice of its rejection of the revised Delivery Dates and reasonably detailed documentation evidencing
the below thirty (30) day safety stock or short-dated Product situation. Immediately thereafter, GSK shall enter Prometheus' open purchase order(s) into GSK's "Supply Chain Issue Management"
process to escalate the matter to a senior level discussion for evaluation and resolution and shall take those actions necessary to fill such purchase order(s). Prometheus shall receive a discount of
[***] percent ([***]%) for Product delivered more than [***] calendar days past the Delivery Date specified in a Purchase
Order accepted by GSK under Section 2.3, as such Delivery Date may be revised under this Section 3.7. Prometheus shall receive a discount of [***] percent
([***]%) for Product delivered more than [***] calendar days past the Delivery Date specified in a Purchase Order accepted by GSK under
Section 2.3, as such Delivery Date may be revised under this Section 3.7. Prometheus shall receive a discount of [***] percent
([***]%) for Product delivered more than [***] calendar days past the Delivery Date specified in a Purchase Order accepted by GSK under
Section 2.3, as such Delivery Date may be revised under this Section 3.7. For the avoidance of doubt, Prometheus shall not be entitled to any discount for Product reflected on any
Purchase Order reflecting an accommodation and accepted by GSK under Section 2.4. In lieu of receiving a discount, in the event Prometheus already has qualified a Third Party Supplier under
Section 4.6(a), Prometheus may cancel the applicable Purchase Order and, if desired, arrange for manufacture of such quantities by such alternate Third Party supplier. Any discount amount shall
be paid, at GSK's option, either by (a) reflecting such amount in GSK's invoice for such Product subject to the late delivery, (b) granting Prometheus a credit against any outstanding
invoices, or (c) paying Prometheus such amount in cash, by check or via other payment method acceptable to Prometheus. The remedies set forth in this Section 3.7 and
Section 14.2(c) shall constitute Prometheus' sole remedies for GSK's failure to meet the Delivery Date set forth in an accepted Purchase Order. 

Article IV
 Manufacture of Products  

        4.1    General.    

        GSK
shall manufacture, test, package, store, handle, label, release, deliver and perform such stability studies and other required testing (as identified in the Quality Agreement) of the
Product in accordance with the Specifications, cGMPs, Applicable Laws, Regulatory Acts and the Quality Agreement. GSK acknowledges and agrees that it has all Specifications, reference materials and
manufacturing documentation necessary to manufacture, package and test Product as of the Effective Date. During the Term, Prometheus shall be responsible to provide GSK with all Product-specific
tooling required and associated with manufacturing or packaging for the Products. Prometheus shall not remove any of such tooling from the Facility without the written consent of GSK prior to GSK's
completion of all of its manufacturing and supply obligations under this Agreement. GSK acknowledges
and agrees that as of the Effective Date such Product-specific tooling is in GSK's possession at the Facility. 

*** 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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        4.2    Specification Changes.    

        (a)   During
the Term, GSK will accept a labeling change from Prometheus as contemplated by this Section 4.2 but otherwise the Parties acknowledge and agree that GSK
does not intend to make any material changes (such as packaging design, manufacturing process or similar or related changes) to the existing Product during the Term. 

        (b)   Either
Party may request a Specifications change intended to maintain high standards but that are not required for compliance with Regulatory Acts and Applicable Laws.
The Parties shall discuss in good faith the implementation of any such requested changes; provided however, that, such changes shall be made only with the Parties' mutual consent. Either Party may
provide notice to the other Party regarding a Specifications change required for compliance with Regulatory Acts and Applicable Laws, and the other Party's approval of such Specification change shall
not be unreasonably withheld; provided, however, if there are two or more alternatives for complying with the change in Regulatory Acts and Applicable Laws, each of which GSK believes, in its sole
discretion, it can implement on a product-by-product basis without undue burden to GSK's overall manufacturing operations, then Prometheus shall have the right to choose which
of such alternatives shall be implemented. The costs for changes to the Specifications under this Section 4.2(b) shall be borne as described in Sections 3.1(f) and 3.1(g), as applicable. 

        (c)   GSK
shall not make any revisions to the Specifications without prior written consent of Prometheus in accordance with the Quality Agreement. All requests by GSK for such
revisions shall be submitted in writing to Prometheus on the forms included in the Quality Agreement. 

        (d)   (i)    General.    From time to time Prometheus or GSK may require labeling or artwork changes that
will affect the Products. These changes may either be initiated by Prometheus or GSK or may be a requirement resulting from cGMPs changes. Responsibility for the cost of all such labeling or artwork
changes under this Section 4.2(d) shall be borne as described in Section 3.1. 

        (ii)    Initial Product Labeling.    The Parties agree that the Product labeling for Products shall initially display
GSK's artwork, logos and trademarks and an NDC code that contains GSK's labeler code. GSK shall prepare the initial labeling change for Product to change from GSK's artwork, logos, trademarks and NDC
Code to Prometheus' artwork, logos, trademarks and NDC Code provided that Prometheus supplies GSK with all necessary information, including artwork, logos, trademarks and NDC Code, to make such change
in a timely manner with at least six-months lead-time prior to the Delivery Date specified in any Purchase Order for Product that Prometheus desires will contain such new
labeling. Except with respect to information provided by GSK, Prometheus shall be responsible for ensuring the accuracy of all information contained on all labels and labeling for the Products and for
the compliance of all such labels and labeling with Applicable Laws. Prometheus shall, within ten (10) Business Days of receipt of agreed artwork documents, either provide GSK any necessary
corrections thereto or notify GSK of its approval of such artwork documents. GSK's obligations to supply Prometheus with Product with the new initial labeling by such requested Delivery Date shall be
contingent upon GSK's timely receipt of the foregoing artwork information and timely approval of such artwork and other necessary items and cooperation from Prometheus. 

12

 

        (iii)    All Other Labeling.    Upon completion of the initial labeling per Section 4.2(d)(ii) and receipt of
the associated Materials, GSK shall provide the native files to Prometheus for such labeling. For any changes other than the initial change required to change from GSK's logo and NDC to Prometheus'
logo and NDC, Prometheus shall be responsible for preparing all such labeling or artwork changes. All labeling or artwork changes shall use the existing dielines for such Materials. Any GSK
information, if required, for the labeling such as component number, company name or address shall be provided by GSK to Prometheus and Prometheus shall allow GSK [***]
Business Days to review any change to GSK information reflected in any changed labeling prior to approval. For any such changes, the Parties shall agree upon the timeframe for implementation, provided
that such timeframe to implement shall not be less than [***] days in advance of the Delivery Date under the corresponding Purchase Order planned for implementation. Any
changes to existing dielines must be reviewed and agreed between the Parties prior to establishing and agreeing on implementation of such changes and subject to Section 4.2(b). Additionally,
Prometheus shall be responsible to provide approved native files to the approved vendors of Materials and should Prometheus require proofs, samples or other such items for approval of its artwork,
Prometheus shall work directly with the vendors to obtain such items. Prometheus will provide to GSK final approved artwork in an acceptable graphics form (i.e., InDesign or Ilustrator CS1) and
GSK will migrate such approved artwork into its systems pursuant to Section 4.4(a). 

        (iv)    Confirmation of Labeling Responsibilities.    For avoidance of doubt, except for GSK's preparation of the
initial labeling change under Section 4.2(d)(ii), Prometheus shall have sole responsibility for preparing and providing approved artwork to GSK. GSK's responsibility for labeling changes other
than the initial labeling change shall be limited to (A) providing GSK information to Prometheus and migrating approved artwork into its systems under Section 4.2(d)(iii), and
(B) placing orders with Prometheus' approved vendors under Section 4.4(a). 

        (e)   Prometheus
will be responsible for making appropriate filings or notifications of any such Specification changes to the applicable Governmental Authorities, provided
that to the extent such information has not been previously provided by GSK, GSK shall reasonably cooperate with Prometheus with such filings and/or notifications. Prior to implementation of any
change to the Specifications, the Parties shall agree upon a procedure to ensure that applicable Governmental Authorities have approved the Specifications, to the extent necessary, and that GSK is
given a reasonable period of time to implement any changes required by any such applicable Governmental Authority with regard to the Specifications. 

        4.3    Validations and Stability Studies.    

        (a)    General.    During the Term, GSK shall perform, at no additional cost to Prometheus, on an on-going
basis all validations and stability studies required by the Specifications as in effect as of the Effective Date, cGMPs or Applicable Laws in connection with the regular course of manufacturing the
Products for commercial supply, provided that Prometheus shall reimburse GSK for the cost of any additional validation or stability studies necessitated by a change to the Specifications made at the
request of Prometheus or required by Applicable Law. 

        (b)    Reference Standards.    Unless available through the United States Pharmacopeia, Prometheus shall provide,
without charge to GSK, analytical reference standards for each of the Products. The reference standards shall be provided in quantities reasonably required for GSK to perform its obligations relating
to the manufacture, stability or other testing, or any other obligation under this Agreement. 

*** 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

 

        4.4    Materials.    

        (a)    General.    To produce Products under this Agreement, GSK will obtain Materials and API raw materials and
intermediates (identified on Schedule 4.6(c)) only from suppliers named in the Specifications, where applicable, and shall store, maintain, test
and release, as applicable, all Materials, and API raw materials and intermediates (identified on Schedule 4.6(c)) in accordance with the
applicable Specifications, the Quality Agreement, and as otherwise required by cGMPs, Applicable Laws and Regulatory Acts. GSK acknowledges and agrees that (i) it has all Specifications and
manufacturing documentation necessary to manufacture and test API as of the Effective Date, and (ii) it has all Specifications necessary to test Materials as of the Effective Date. To the
extent necessary to fulfill its obligations under this Agreement, GSK shall, during the Initial Term, perform a one-time API manufacture using the Stage 3B (alosetron base PG)
intermediate material (the "API Intermediate") held in inventory by GSK as of the Effective Date as identified on Schedule 4.4(a) to produce API
in standard batch sizes of approximately [***] kilograms each, and total batches not to exceed a total yield of approximately [***] kilograms. Each
batch produced or the total batches produced may vary by ± [***] percent ([***]%). The batches produced in this
one-time API manufacture shall be as outlined in Section 4.6(b) below, and Prometheus acknowledges that production of API from API Intermediate will require at least
six-months lead time from Prometheus' notice under Section 4.6(b)(i) and that GSK may, but shall not be obligated to, complete production of API from API Intermediate earlier than
January 31, 2009. GSK shall not be obligated to manufacture or obtain additional API or API Intermediate beyond the amounts identified in this Section 4.4(a) except to the extent such
API or API Intermediate is not usable or deemed Nonconforming as in Section 4.4(b) below. Additionally, GSK shall only be obligated to manufacture Products in standard batch sizes, and if GSK
no longer possesses sufficient API to produce a single standard size batch of any Product (so long as GSK has otherwise fulfilled its API supply obligations under Section 4.4(b) below), GSK
shall provide written notice of same to Prometheus and this Agreement shall immediately terminate in accordance with Section 14.2(b). 

        (b)    API Supply.    

        (i)    API Intermediate Testing.    GSK will re-test the API Intermediate listed
on Schedule 4.4(a) prior to the Closing Date and, at Closing, GSK shall notify Prometheus of any API Intermediate that is not usable and such
amounts shall not be available for purchase by Prometheus or included as part of the one-time manufacture of API under Section 4.4(a). For the avoidance of doubt, all API
Intermediate quantities available for purchase or manufacture under Section 4.6(b) shall not exceed the amounts identified on Schedule 4.4(a).  

        (ii)    Assurance of API.    Pursuant to the aforementioned Section 4.4(b)(i), in the
event that a sufficient quantity of API Intermediate is not usable in the ordinary course of business to produce two (2) batches of API in standard batch sizes of approximately
[***] kilograms each, which batches may vary by ± [***] percent ([***]%), then GSK
shall manufacture or have manufactured sufficient API Intermediate that meets Specifications to produce up to the lesser of (i) two (2) batches of API in standard batch sizes of
approximately [***] kilograms each, which batches may vary by ± [***] percent ([***]%),
or (ii) such quantity as may be requested by Prometheus to procure as API or API Intermediate pursuant to Section 4.6(b). Thereafter, in accordance with Section 4.4(a), GSK shall
convert such API Intermediate into API for Prometheus. 

*** 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

 

        (iii)    Compliance with API Specifications; Nonconforming API.    GSK shall manufacture, have manufactured, store,
maintain, test and release all finished API in accordance with the applicable Specifications. GSK shall provide Prometheus with a Certificate of Analysis for each batch of API shipped to Prometheus.
In the event that API delivered to Prometheus pursuant to Sections 2.6(a), 4.6(b)(i), and 4.4(b)(ii) above is found to have a Nonconformity caused by GSK, then Sections 6.1, 6.2. 6.3,
6.8 and 6.9(b) shall be deemed applicable. Upon confirmation of a Nonconformity, the Parties shall meet to discuss the situation and mutually agree in good faith that there is a compelling need to
replace all or a portion of such Nonconforming API after taking into account all relevant facts and circumstances, including the remaining period in the Term, the status of API manufacturing transfer
activities, the nature of the Nonconformity and ability to rework, current Product inventories, Product sales and anticipated changes in Product demand. To the extent the Parties agree such
Nonconforming API will be replaced, then any replacement schedule shall take into account GSK's manufacturing schedules, availability of materials to produce API, Product sales levels, Product
inventories, and similar relevant considerations. 

        (c)    Materials Certifications.    GSK shall prepare or cause to be prepared by its suppliers, as the case may be,
all certifications as to any Materials and API raw materials and intermediates (identified on Schedule 4.6(c)) required by cGMPs or Applicable
Laws (each, a "Materials Certification"). Such Materials Certifications shall include, without limitation, any and all required certifications related to Materials derived from animal products. 

        (d)    Supply Shortages.    Without limiting any other rights or remedies available to Prometheus, in the event of any
shortage in the supply of any Materials due to a Force Majeure Event or otherwise, GSK shall develop an allocation plan that allows it to substantially meet its obligations to Prometheus and its other
customers taking into account required delivery dates, product volumes and anticipated timing of deliveries to GSK of additional quantities of Materials in short supply. 

        4.5    Quality Agreement.    

        At
least thirty (30) days prior to the first Delivery of Products under this Agreement, the Parties will enter into a Quality Agreement in substantially the form attached hereto
as Schedule 4.5 (the "Quality Agreement"). Each Party shall comply with its obligations set forth in the Quality Agreement. In the event of a
conflict between the terms of the Quality Agreement and the terms of this Agreement, the terms of this Agreement shall control. The Quality Agreement shall establish the procedure to be followed if
either GSK or Prometheus desires to change any aspect of the manufacturing procedure for Products, including but not limited to any change in the Specifications as described in Section 4.2
above. The Quality Agreement shall contain a mechanism to assure that any applicable Governmental Authorities have approved the Specifications, to the extent necessary, and that GSK is given a
reasonable period of time to implement any changes required by any such applicable Governmental Authority with regard to the Specifications. 

        4.6    Manufacturing Transition; API Materials.    

        (a)   Prometheus
shall use commercially reasonable efforts (i) to transfer manufacture of the Products to one or more Third Party suppliers of Prometheus that
Prometheus believes in its sole discretion is capable of obtaining necessary Consents from the appropriate Regulatory Authorities and is able to meet Prometheus' anticipated demands for Product (each,
a "Third Party Supplier"), and (ii) to obtain all necessary Consents from the appropriate Regulatory Authorities of the transfer as soon as practicable after the Effective Date of this
Agreement. For the avoidance of doubt, the manufacturing transfer described in the immediately preceding sentence includes the transfer of both API manufacture and Product manufacture and any related
stability studies to 

15

 

Prometheus
or one or more of its Third Party Suppliers. Prometheus will perform, at its own expense, all studies required by any Governmental Authority in connection therewith, and shall prepare or
have prepared the necessary documentation as required by any Governmental Authority to effect such a transfer and Prometheus shall diligently seek such Consents. Promptly (and in any case within five
(5) Business Days) after learning that Regulatory Authorities have provided the necessary Consents for the manufacture of the Products at a Third Party Supplier's facility, Prometheus shall
provide written notice thereof to GSK. GSK agrees to reasonably cooperate with Prometheus in connection with the transfer contemplated by this Section 4.6 and in Prometheus receiving the
necessary Consents therefor. GSK's reasonable cooperation shall include assistance in the transfer of API manufacture and Product manufacture and any related stability studies within those parameters
generally outlined in Schedule 4.6(a). Within [***] days after the Closing Date, Prometheus shall have identified Third
Party Supplier(s) to whom it intends to transition API manufacture and Product manufacture and any related stability studies. Within [***] days after the Closing Date,
Prometheus shall present to GSK a written plan that Prometheus deems consistent with this Agreement and that outline the activities, timelines and other requirements in sufficient detail necessary to
transition API manufacture and Product manufacture and any related stability studies (such written plan, the "Transition Plan"). GSK shall review the Transition Plan (which review shall not be
unreasonably withheld) and agree (i) activities to be performed by GSK in accordance with the GSK resources committed in Schedule 4.6(a),
and (ii) related timeframes to be met by GSK consistent with GSK's ongoing obligations, normal manufacturing practices and scheduling. 

        (b)   With
respect to the API Intermediate, Prometheus shall: 

          (i)  Within
[***] days after the Closing Date, subject to Section 2.6(a) and 4.4(a), provide GSK written notice of the quantities
(e.g. zero (0) quantity or such other required amount in [***] kg increments) of that portion of the API Intermediate identified on  Schedule 4.4(a) it desires GSK to manufacture into API
per Section 4.4(a). Except as set forth in Section 2.6(a), Prometheus shall
have no obligation to purchase such requested quantity of API. 

         (ii)  Within
[***] days after the Closing Date, provide GSK written notice of that portion of the API Intermediate identified on  Schedule 4.4(a) remaining, after taking into account the amount covered by
Prometheus' written notice under Section 4.6(b)(i) and any
amount that may be required by GSK to fulfill its obligations under Section 4.4(b), that Prometheus agrees at that time to purchase, which amount may be adjusted and will only be available for
purchase after successful completion of the one-time manufacture of API pursuant to Section 4.4(a). Upon successful completion of the one-time manufacture, GSK shall
notify Prometheus of the remaining API Intermediate available and within ten (10) Business Days after the date of such notice, Prometheus shall (i) confirm, revise or cancel the
quantities of API Intermediate it intends to purchase, and (ii) provide a purchase order for the amount of API Intermediate it has confirmed and agreed to purchase, if any, pursuant to
subsection (i) above. GSK will accept the purchase order and pursuant to Prometheus' purchase order and at Prometheus' expense, GSK shall make the purchased quantities of API Intermediate
available to Prometheus' carrier or freight forwarder for shipment within thirty (30) days of receipt of the confirmation and purchase order from Prometheus. GSK shall provide Prometheus with a
Certificate of Analysis or other applicable documents for each batch of API Intermediate shipped to Prometheus. 

        If
Prometheus does not provide notice required under this Section 4.6(b), GSK may, at its discretion, elect to manufacture the API Intermediate pursuant to Section 4.4(a)
and Prometheus shall be obligated to purchase such API pursuant to Section 2.6. 

*** 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.

16

 

        (c)   As
promptly as practical but not greater than [***] days after the Closing Date, Prometheus shall provide GSK written notice of the quantities of
raw materials and intermediate identified on Schedule 4.6(c) it agrees to purchase, which amount will only be available for purchase after GSK's
successful completion of the one-time manufacture of API. Upon successful completion of the one-time manufacture, GSK shall notify Prometheus of the remaining raw materials and
intermediate available and within ten (10) Business Days after the date of such notice, Prometheus shall (i) confirm, revise or cancel the quantities of raw materials and intermediate it
intends to purchase, and (ii) provide a purchase order for the amount of raw materials and intermediate it has confirmed and agreed to purchase, if any, pursuant to subsection (i) above.
GSK will accept the purchase order and pursuant to Prometheus' purchase order and at Prometheus' expense, GSK shall make the purchased quantities of raw materials and intermediates available to
Prometheus' carrier or freight forwarder for shipment. GSK shall provide Prometheus with applicable testing documents for each batch of raw materials and intermediates shipped to Prometheus. 

        4.7    Shelf Life.    

        GSK
shall ensure that as of the later of the Delivery Date or the actual date Product is made available to Prometheus' carrier or freight forwarder for shipment, each batch of Products
shall have at least the [***] of eighteen (18) months of expiry or [***] percent ([***]%) of its shelf life
remaining. 

Article V
 Confidentiality  

        5.1    Confidentiality.    GSK and Prometheus agree to keep secret and confidential any and all information
("Confidential Information") either Party disclosed hereunder to the other Party and not to disclose such Confidential Information to any person or entity, except (i) to employees, Affiliates,
attorneys, accountants, consultants, agents or representatives of each Party having a need to know the information in order to fulfill such Party's rights or obligations hereunder; (ii) as
required by an applicable Regulatory Authority, or (iii) to contractors, manufacturers, suppliers, potential investors, lenders or acquirers of the receiving Party who are subject to terms of
confidentiality at least as restrictive as those set forth in this Article V. The parties shall use the Confidential Information solely for the purpose of carrying out the obligations contained
in this Agreement. 

        5.2    Limitations.    The obligations imposed by this Section shall not apply to any Confidential Information: 

        (a)   which
at the time of disclosure is in the public domain; 

        (b)   which,
after disclosure, becomes part of the public domain by publication or otherwise, through no fault of the receiving Party; 

        (c)   which
at the time of disclosure is already in the receiving Party's possession, except through prior disclosure by GSK, Prometheus or an Affiliate of either of them, and
such possession can be properly documented by the receiving Party in its written records, and was not made available to the receiving Party by any person or party owing an obligation of
confidentiality to the disclosing Party; 

        (d)   which
is rightfully made available to the receiving Party from sources independent of the disclosing Party; 

*** 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.

17

  

        (e)   which
is required to be disclosed in the course of litigation or other legal or administrative proceedings; or 

        (f)    which
is required to be disclosed by law or governmental agency, including the Securities Exchange Commission or the FDA; provided that in all cases the party receiving
the Confidential Information shall, to the extent permitted, give the other Party prompt notice of the pending disclosure and shall cooperate in such other Party's attempts, at such other Party's sole
expense, to seek an order maintaining the confidentiality of the Confidential Information. 

        5.3    Term of Confidentiality.    The obligation of confidentiality and nonuse set forth in this Article V
shall survive for a period of ten (10) years beyond the termination or expiration of this Agreement. 

        5.4    Ownership of Confidential Information.    Confidential Information shall remain the exclusive property of the
disclosing Party. 

Article VI
 Product Testing and Quality Assurance; Nonconformity  

        6.1    Testing of Product.    

        Prior
to release of Product to finished goods inventory or release for Delivery to Prometheus, GSK shall test the Products for Nonconformities (as defined below), in accordance with the
testing procedures described in the Specifications and the Quality Agreement and as otherwise required by cGMPs, Applicable Laws and Regulatory Acts. GSK shall provide Prometheus with a Certificate of
Analysis for each batch of Product shipped to Prometheus. 

        6.2    Nonconformity.    

        (a)    Nonconformity.    If either Party becomes aware that any batch or shipment of Product sold to Prometheus has a
Nonconformity, at any time regardless of the status of GSK's testing and quality assurance activities, such Party shall notify the other Party as soon as reasonably practicable of becoming aware of
such Nonconformity (provided such failure to provide notice by Prometheus shall not affect Prometheus' ability to reject the Product except as otherwise specified in Section 6.3).
"Nonconformity" means a Product characteristic that (i) is attributable to a Party's failure to manufacture (if manufactured by a Party or any of its Affiliates or Third Party designee(s)),
test, package, store, label, release or deliver, as such responsibilities are applicable to a Party or any of its Affiliates or Third Party designee(s), any Product in accordance with the
Specifications, cGMPs, Applicable Laws, Regulatory Acts and/or the Quality Agreement; or (ii) causes any Product to fail to conform to the Specifications. In the event of a Nonconformity, the
Parties shall follow the procedure set forth in Section 6.2(b) and Section 6.3. 

        (b)    Products Subject to Nonconformity.    Any batch or shipment of Product sold to Prometheus, which is the subject
of a Nonconformity inquiry pursuant to Section 6.2(a) shall be handled as follows: 

          (i)  Any
Nonconforming Product held in inventory by GSK shall not be shipped to Prometheus; and 

         (ii)  Any
Nonconforming Product shipped to Prometheus and held in stock by Prometheus shall maintain a "hold" or "unpassed" status, and shall not be released into passed
inventory of Prometheus, until Prometheus has completed any investigations related to such Product and approved in writing the disposition of the Product subject to the Nonconformity. 

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        6.3    Product Holds and Rejections.    

        (a)    General.    Prometheus or its designated agent shall notify GSK in writing promptly (and, in any case, within
thirty (30) days after Delivery of such Product to Prometheus or its designated agent) after placing any Product on hold for further investigation of a Nonconformity, or of Prometheus'
rejection of any batch (or part thereof) of any Product. Prometheus' or its designated agent's notice shall state the basis for the hold or rejection. Failure to give notice within this thirty
(30) day period shall constitute acceptance of any Product Delivered. Notwithstanding the foregoing, if such Nonconformity is deemed to have existed, pursuant to Section 6.3(b) below,
prior to Delivery and is not readily detectable upon initial inspection (e.g. a latent defect), GSK shall remain liable to Prometheus to the
extent provided in Section 6.8 and 6.9 for any latent defect that subsequently is discovered which renders the Product unsalable provided that Prometheus immediately informs GSK by a notice in
writing of such defect and rejection of the relevant shipment not later than ten (10) Business Days from the date of discovery of such latent defect. For the avoidance of doubt, GSK shall have
no liability to
Prometheus with respect to latent defects of Product or API held by Prometheus in inventory that has reached its expiry prior to Prometheus' notice to GSK. 

        (b)    Independent Testing.    If the Parties disagree as to whether any Product subject to hold or rejection had a
Nonconformity or latent defect, Prometheus' most senior quality assurance officer and GSK's Manufacturing Division Quality Director, or such other persons as they may designate in writing, shall
confer to review samples and/or batch records, as appropriate. If the disagreement is not resolved, then samples, batch records and other data relating to the batch in dispute shall promptly be
submitted for testing and evaluation to an independent Third Party (including a testing laboratory) approved in writing by both Parties. The findings of the Third Party shall be final and binding on
the Parties. The Product shall be deemed properly rejected if the Product is found by the Third Party to have had a Nonconformity at the time of Delivery to Prometheus or its designated representative
and shall be deemed accepted by Prometheus if the Product is found by the Third Party to have not had a Nonconformity at the time of Delivery to Prometheus or its designated representative. The costs
of the testing and evaluation shall be borne by Prometheus except to the extent that the Product is found to have a Nonconformity at the time of Delivery to Prometheus or its designated
representative. 

        6.4    Product Complaints.    

        Prometheus
shall provide prompt notice to GSK in writing of any and all complaints that Prometheus receives which implicate GSK's manufacturing or other processes at the Facility. Any
and all complaints of which GSK becomes aware relating to any Product shall promptly be forwarded to Prometheus' senior quality officer or his designee. Written notification between the Parties shall
be given as defined in the Quality Agreement. Prometheus shall be responsible for all complaint interactions with any Third Party complainant and, subject to Section 6.7, any Product
replacement if required. 

        6.5    Adverse Events.    

        For
the purposes of this Agreement, "Adverse Event" shall mean any adverse event associated with the use of any Product manufactured at the Facility in humans, whether or not considered
drug-related. With respect to any Product, GSK shall notify Prometheus promptly following its receipt of information of a possible Adverse Event. To the extent an Adverse Event of which
Prometheus becomes aware implicates GSK's manufacturing or other processes at the Facility, Prometheus shall promptly inform GSK of such Adverse Event and shall disclose to GSK any information it has
regarding that Adverse Event. Prometheus shall be responsible for all Adverse Event reporting to the applicable Governmental Authorities. 

19

 

        6.6    Investigations.    

        The
Parties shall investigate all reports of Nonconformity, Product complaints with respect to Product manufactured at the Facility and Adverse Events in order to assure the conformity
of Products to Specifications and cGMPs and the safety and efficacy of the Products. The Parties shall act promptly and shall cooperate fully in such investigations. GSK's obligations under this
Section 6.6 are limited to matters related to GSK's manufacturing or other processes at the Facility. 

        6.7    Product Events, Withdrawals, Field Corrections and Field Alerts.    

        In
the event Prometheus deems it necessary or is otherwise required by a Governmental Authority to initiate a recall, withdrawal or field correction of, field alert report or comparable
report with respect to any Product manufactured by GSK pursuant to this Agreement (in each instance, a "Product Event"), Prometheus shall notify GSK and GSK shall fully cooperate with Prometheus to
address, as appropriate, such Product Event. The costs and expense of such Product Event shall be borne by Prometheus except to the extent GSK is required to bear such costs and expenses under
Section 6.9. Without limiting the generality of the foregoing, with respect to product recalls each Party: 

        (a)   Shall
immediately notify the other Party of any defect found, subsequent to release, which may be grounds to initiate a recall; 

        (b)   Maintain
a procedure to handle Product recalls, including contact arrangements for hours falling outside the typical Business Day; and 

        (c)   Provide
all support reasonably necessary to support any Product recall investigation and subsequent actions. 

In
any event, Prometheus will be responsible for leading all Product Event investigations and for all associated communications with Governmental Authorities. 

        6.8    Disposition of Certain Products.    

        If
GSK's failure to manufacture, test, package, store, label, or release any Product in accordance with the Specifications, cGMPs, Applicable Laws, Regulatory Acts, and the Quality
Agreement directly results in any quantity of that Product having a Nonconformity or Product Event, then Prometheus
shall, at GSK's direction and at GSK's expense as set forth in Section 6.9, either (i) return the affected Product to GSK for rework or reprocessing by GSK; (ii) return the
affected Product for destruction by GSK; or (iii) have the Product disposed of by a Third Party designated by Prometheus (Prometheus or such Third Party to provide GSK with written
documentation of destruction) and in accordance with Applicable Laws. In addition, Prometheus shall be entitled to the remedies set forth in Section 6.9. The remedies provided in this
Section 6.8 and Section 6.9 shall be Prometheus' sole remedy with respect to any rejected quantity not distributed to Third Parties, and GSK shall have no other liability therefor. The
Party undertaking destruction of the Product shall be solely responsible for compliance with all Applicable Laws in connection with the destruction. 

        6.9    Replacements; Credits; Refunds.    

        (a)    Product.    Upon disposition of Product in accordance with Section 6.8, if GSK's failure to manufacture,
test, package, store, label, or release any Product in accordance with the Specifications, cGMPs, Applicable Laws, Regulatory Acts, and the Quality Agreement directly results in any quantity of a
Product having a Nonconformity or Product Event or if such Nonconformity is deemed to have existed pursuant to Section 6.3, prior to Delivery, then (i) GSK shall reimburse or credit
Prometheus the price paid by Prometheus to GSK for the affected Product under the original invoice for such affected Product, including any freight, taxes and insurance charges paid; (ii) upon
Prometheus' request, GSK shall promptly (but in no event longer than seventy-five (75) days, subject to availability of API as set forth in Section 4.4(a) and (b)), 

20

 

supply
Prometheus with replacement Product, which replacement Product shall be invoiced as any other shipment of Product under Section 3.2(b); and (iii) GSK shall also reimburse or
credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket charges incurred in
connection with collection, transportation and return or destruction of the affected Product. Prometheus shall provide GSK with such information and documentation as GSK may reasonably request to
confirm any of the foregoing charges, costs or expenses. Notwithstanding the foregoing, any replacement of Product under this Section 6.9(a) shall be subject to the limitation of
Section 4.4(a) and limited to the fulfillment of Purchase Orders accepted by GSK under Section 2.3 and 2.4. 

        (b)    API.    If GSK fails to manufacture, have manufactured, test, store, or release any API sold to Prometheus in
accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then (i) GSK shall reimburse or credit Prometheus the price paid by Prometheus to GSK for the affected API under
the original invoice for such affected API, including any freight, taxes, duties and insurance charges paid; and (ii) GSK shall reimburse or credit Prometheus for the actual costs incurred,
directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket charges incurred in connection with collection, transportation and return
or destruction of the affected API. Prometheus shall provide GSK with such information and documentation as GSK may reasonably request to confirm any of the foregoing charges, costs or expenses. For
the avoidance of doubt, any replacement of API is subject to the limitations of Section 4.4(a) and 4.4(b). 

        (c)    API Intermediate.    If GSK fails to manufacture, have manufactured, test, store, or release any API
Intermediate sold to Prometheus in accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then (i) GSK shall reimburse or credit Prometheus the price paid by
Prometheus to GSK for the affected API Intermediate under the original invoice for such affected API Intermediate, including any freight, taxes, duties and insurance charges paid; and (ii) GSK
shall reimburse or credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket
charges incurred in connection with collection, transportation and return or destruction of the affected API Intermediate. Prometheus shall provide GSK with such information and documentation as GSK
may reasonably request to confirm any of the foregoing charges, costs or expenses. For the avoidance of doubt, any replacement of API Intermediate is subject to the limitations of
Section 4.4(a) and 4.6(b). 

        (d)    Materials (other than API) Purchased Under Section 2.6(b).    If GSK fails to test, store or release any
Materials (other than API) sold to Prometheus pursuant to Section 2.6(b) in accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then GSK shall (i) reimburse
or credit Prometheus the price paid by Prometheus to GSK for the affected Materials (other than API) under the original invoice for such affected Materials (other than API), including any freight,
taxes, duties and insurance charges paid; and (ii) reimburse or credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or
any other out-of-pocket charges incurred in connection with collection, transportation and return or destruction of the affected Materials (other than API). Prometheus shall
provide GSK with such information and documentation as GSK may reasonably request to confirm any of the foregoing charges, costs or expenses. For the avoidance of doubt, GSK shall not be obligated to
replace any Materials (other than API) purchased by Prometheus under Section 2.6(b). 

        (e)    API Raw Materials and Intermediates Purchased Under Section 4.6(c).    If GSK fails to test, store or
release any API raw materials and intermediates sold to Prometheus pursuant to Section 4.6(c) in accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then GSK shall
(i) reimburse or credit Prometheus the price paid by Prometheus to GSK for 

21

 

the
affected API raw materials and intermediates under the original invoice for such affected API raw materials and intermediates, including any freight, taxes, duties and insurance charges paid; and
(ii) reimburse or credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket
charges incurred in connection with collection, transportation and return or destruction of the affected API raw materials and intermediates. Prometheus shall provide GSK with such information and
documentation as GSK may reasonably request to confirm any of the foregoing charges, costs or expenses. In addition, upon Prometheus' request, to the extent available in GSK's inventories, GSK shall
promptly (but in any event within sixty (60) days) supply Prometheus with replacement API raw materials and intermediates pursuant to Section 4.6(c), which replacement API raw materials
and intermediates shall be invoiced upon shipment under Section 3.2(a). 

        6.10    Product Returns from the Field.    

        During
the Term, Product returns are handled in the manner described in the Asset Purchase Agreement. 

        6.11    Retained Samples.    

        GSK
shall retain samples from each batch of Products for a period of one (1) year after the shipment of such batch to Prometheus or such longer period required by Applicable Laws
for record keeping, testing and regulatory purposes. In the event that Prometheus want samples from any batch of Products retained longer than one (1) year, Prometheus shall provide a written
request to GSK not less than thirty days prior to the first anniversary of the shipment of such batch requesting that such Product be shipped to Prometheus or a specified designee. Promptly after
receiving such request, GSK shall ship such Product to Prometheus at Prometheus' sole cost and expense. In the absence of any such request, GSK shall have the right to dispose of Product samples in
accordance with Applicable Law at GSK's sole cost and expense. 

Article VII
 Regulatory Matters  

        7.1    Manufacturing Consents.    

        (a)   GSK
holds and shall maintain all Consents now required of GSK, its Affiliates, and the Facility for the performance of its obligations under this Agreement during the
Term. 

        (b)   After
Regulatory Authorities have provided the necessary Consents for the manufacture of the Products at a Third Party Supplier's facility as contemplated by
Section 4.6, Prometheus shall use commercially reasonable efforts to maintain, or to cause its Third Party Supplier(s) to maintain all Consents which may from time to time be required by any
Regulatory Authority with respect to manufacture of the Products. 

        7.2    Product Consents.    

        Prometheus
shall, at its expense, actively and diligently seek to obtain, and after obtaining, shall maintain any such Consents which may from time to time be required by any
Governmental Authority with respect to ownership of the Drug Applications or with respect to the manufacturing, marketing, distribution, clinical investigation, import or export of the Products. After
obtaining such Consents, Prometheus shall be responsible for responding to all requests for information related to such Consents made by, and making all legally required filings relating to such
Consents with, any Governmental Authority having jurisdiction to make such requests or require such filings. In the event any Consent held by Prometheus relating directly to any of the Products is
hereafter suspended or revoked, Prometheus shall promptly notify GSK of the event and shall promptly inform GSK of the impact on 

22

 

Prometheus'
purchases of the affected Product and Prometheus' general intentions with respect to the affected Product. 

        7.3    Drug Application Documentation.    

        Prometheus
shall maintain all United States Drug Applications with respect to the Products, including, without limitation, Phase IV post approval commitments (such as Patient
Surveys), semi-annual reports of FDA commitments and Adverse Event reporting and shall take all actions, pay all fees and conduct all communications with the appropriate Governmental
Authority and Regulatory Authorities required by Applicable Laws in respect of each Product. For the avoidance of doubt, Prometheus shall bear all costs incurred in connection with compliance with
this Section 7.3. 

        7.4    Regulatory Changes.    

        The
Parties will promptly notify each other of any material revisions or amendment of or additions to cGMPs and will confer with each other with respect to the best means to comply with
such requirements. 

        7.5    Regulatory Inspections.    

        If
GSK is notified that either the Product or the Facility (for reasons directly related to either Product) will be subject to an inspection by any Governmental Authority, GSK promptly
shall advise Prometheus of such investigation and fully cooperate with and allow any such inspection to the extent required by Applicable Laws. GSK shall promptly notify Prometheus of the results of
such investigation and, subject to the last sentence of Section 7.6, shall provide copies of any letter or notices provided by the Governmental Authority unless the results of such
investigation are not directly related to the Product. 

        7.6    Warning Letters.    

        (a)   In
the event GSK receives or otherwise becomes aware of any notices, letters, warnings and/or other communications from any Governmental Authority or any other Person
alleging or threatening that GSK or the Facility is or may be in violation of any Applicable Law that may affect or relate to the Products and/or result in the inability of GSK to perform its
obligations hereunder, GSK shall immediately notify Prometheus thereof and shall promptly provide Prometheus copies of such notices, letters, warnings and/or other communications. 

        (b)   In
the event that prior to completion of the one-time API manufacture pursuant to Section 4.4(a) GSK receives or otherwise becomes aware of any
notices, letters, warnings and/or other communications from any Governmental Authority or any other Person alleging or threatening that GSK or the facility where the API is manufactured is or may be
in violation of any Applicable Law that may affect or relate to the API and/or result in the inability of GSK to perform its obligations hereunder, GSK shall immediately notify Prometheus thereof and
shall promptly provide Prometheus copies of such notices, letters, warnings and/or other communications. 

        (c)   GSK
may redact from any copies of notices, letters, warnings and/or other communications from any Governmental Authority provided to Prometheus under Sections 7.5
or 7.6 any information related to GSK's other customers, and Prometheus shall treat any copies so provided as Confidential Information of GSK and shall comply with its obligations under the Asset
Purchase Agreement with respect thereto. 

23

 
Article VIII
 Intellectual Property  

        8.1    Ownership.    

        (a)    GSK Rights.    Prometheus acknowledges and agrees that, as between GSK and Prometheus, GSK owns all rights in
and to the GSK Intellectual Property and such GSK Intellectual Property shall be deemed the Confidential Information of GSK (subject to Section 5.2). 

        (b)    Prometheus Rights.    GSK acknowledges and agrees that, as between GSK and Prometheus, Prometheus owns all
rights in and to the Prometheus Intellectual Property and such Prometheus Intellectual Property shall be deemed the Confidential Information of Prometheus (subject to Section 5.2). 

        8.2    New Developments and Modifications.    

        (a)    Product Developments.    All Intellectual Property relating to a Product, excluding Process Developments (as
defined below), conceived, reduced to practice, authored, or otherwise generated or developed in whole or in part in the course of activities under this Agreement, whether patentable or not, and any
authorship of works relating to a Product, including any trademarks, trade dress, trade secrets or copyrights, shall be "Product Developments." Such Product Developments shall not include any
Intellectual Property, including, without limitation, know-how or improvements relating to the manufacture of pharmaceutical products generally, conceived, reduced to practice or otherwise
developed by or on behalf of GSK, in connection with the performance of its obligations hereunder (which such developments are referred to herein as "Process Developments"). 

        (b)    Ownership of Product Developments.    Without further payment to GSK, Prometheus shall own all right, title and
interest in and to all Product Developments and such Product Developments shall be deemed the Confidential Information of Prometheus (subject to Section 5.2). 

        (c)    Ownership of Process Developments.    Without payment to Prometheus, GSK shall own all right title and interest
in and to all Process Developments and such Process Developments shall be deemed the Confidential Information of GSK (subject to Section 5.2). 

        8.3    Grant of Licenses.    

        (a)    By Prometheus.    Under the terms and subject to the conditions of this Agreement, Prometheus hereby grants GSK
and its Affiliates the non-exclusive, royalty-free right under the Prometheus Intellectual Property and the Product Developments (collectively, the "Prometheus Rights") to
utilize the Prometheus Rights, solely to perform GSK's obligations hereunder. 

24

  

        (b)    Prometheus Sublicense to GSK.    Solely to the extent necessary for GSK to perform its obligations under this
Agreement, Prometheus hereby grants GSK a non-exclusive, royalty-free sublicense under all Intellectual Property owned by a Third Party which Prometheus has the right to
sublicense to GSK during the period of GSK's performance under this Agreement, which (i) as of the Closing constituted Purchased Assets under the Asset Purchase Agreement and was subsequently
transferred by Prometheus to such Third Party, (ii) constitutes any trademarks or copyrightable materials provided by Prometheus to GSK in connection with the Product labeling and/or packaging;
or (iii) claim any manufacturing processes required as a result of a change to the Specifications requested by Prometheus, provided that, in each case, GSK only uses such Intellectual Property
provided to GSK by Prometheus to perform GSK's obligations hereunder and solely in accordance with any and all terms, conditions, covenants and restrictions set forth in the underlying Third Party
license granted to Prometheus therefor. To the extent the license rights granted in this Section 8.3(b) are not sufficient, GSK's obligation to perform under this Agreement shall be suspended. 

        8.4    Infringement.    

        Any
Party that becomes aware of any allegation or that receives notification of infringement of any Third Party Intellectual Property based upon the manufacture, use or sale of the
Products promptly shall provide written notice to the other Party. In the event GSK receives notice of any non-frivolous lawsuit alleging, in whole or in part, that the use, sale,
distribution, manufacture or supply of Products by either Party as provided hereunder infringes an intellectual
property right Controlled by a Third Party or if either Party is otherwise ordered or enjoined by a court of competent jurisdiction from performing any of the aforementioned activities in the
Territory, GSK may suspend performance hereunder until such time as the matter has been favorably resolved. 

Article IX
 Access; Audit Rights  

        9.1    Audit and Inspection Rights.    

        During
the Term of this Agreement, Prometheus shall have the right to audit and inspect those portions of the Facility used in the manufacture, packaging, storage, testing, holding,
distribution or other handling, receiving or invoicing of the Products and Materials for the sole purposes of ensuring compliance with the Specifications and the Quality Agreement, and, as related to
the Products and Materials, each of cGMPs, Applicable Laws, and Regulatory Acts. Prometheus shall have the right to audit and inspect all inventories of Products and Materials contained at the
Facility. Such audits or inspections shall be limited to not more than [***] Business Days and shall occur during normal business hours and shall be scheduled by Prometheus at
least [***] Business Days in advance by written notice outlining the purpose and focus of the audit or inspection, whereby such audit or inspection date shall be mutually
agreed by the Parties; provided, however, that in the event of an Adverse Event or any proposed or actual inspection by the FDA or other Governmental Authority, Prometheus shall have the right at any
time upon oral or written notice to GSK of five (5) Business Days to conduct an audit or inspection hereunder. Except in the case of an Adverse Event, Prometheus shall limit such audits to no
more than once every twelve (12) months. Prometheus' audit and inspection rights under this Section 9.1 shall not extend to any portions of the Facility, documents, records or other
information which do not relate to Products or Materials. GSK may redact information relating to Third Parties or their respective products or materials from any documents deliverable to Prometheus in
connection with Prometheus' exercise of its audit and inspection rights hereunder. Inspection by Prometheus or documentation provided to Prometheus related to any of GSK's suppliers or 

*** 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.

25

 

subcontractors
related to the manufacture of Product is subject to consent of such GSK supplier or subcontractor. GSK may participate in Prometheus' audit and shall respond to any issues raised by
Prometheus based on such audit, with a corrective action plan mutually acceptable to the Parties. For the avoidance of doubt, nothing in this Section 9.1 shall obligate GSK to make available to
Prometheus documents indicating GSK's underlying costs related to manufacture of the Products. 

        9.2    Documentation.    

        Each
Party shall maintain, in accordance with and for the period required under cGMPs and Applicable Laws, complete and adequate records pertaining to the methods and facilities used for
the cGMPs manufacture, processing, testing, packing, labeling, holding and distribution of the Products. Upon expiration or termination of this Agreement, GSK shall transfer all batch records created
during the Term for all batches of Product and records created during the Term relating to stability studies. GSK shall be entitled to retain copies of any records that it is required to retain in
accordance with and for the period required under cGMPs and Applicable Laws. 

Article X
 Representations and Warranties  

        10.1    Representations and Warranties of GSK.    

        GSK
represents and warrants that: 

        (a)    Status; Enforceability.    GSK is a validly existing corporation in good standing under the laws of
Pennsylvania; the execution, delivery and performance of this Agreement by GSK (where applicable) has been duly authorized by all requisite corporate action; this Agreement constitutes the legal,
valid and binding obligation of GSK, enforceable against GSK in accordance with the terms hereof, subject to the effect of bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally and the effect of general principles of equity, whether applied by a court of law or equity; and the execution, delivery and
performance of this Agreement by GSK will not violate or conflict with any other agreement or instrument to which GSK is a Party. 

        (b)    Certain Persons.    GSK has not used, in any capacity associated with or related to the manufacture of the
Products, the services of any Persons who have been, or are in the process of being, debarred under 21 U.S.C. § 335a(a) or (b) or any comparable Regulatory Act. Furthermore,
neither GSK nor any of its officers, employees, or consultants has been convicted of an offense under (i) either a federal or state law that is cited in 21 U.S.C. § 335(a) as
a ground for debarment, denial
of approval, or suspension, or (ii) any other law cited in any comparable Regulatory Act as a ground for debarment, denial of approval or suspension. 

        (c)    Manufacturing Consents.    As of the date of this Agreement, GSK has and will maintain throughout the Term all
manufacturing Consents necessary for the performance of its obligations hereunder. 

        (d)    Product Marketing and Sales.    GSK will not sell the Products produced under this Agreement in the Territory
except for sales to Prometheus permitted by this Agreement. 

        (e)    Compliance.    The manufacture, packaging, processing, storage, disposal and other handling of the Products and
the API by GSK until Delivery to Prometheus' designated carrier or freight forwarder at the Facility shall be in accordance with and conform to the Specifications, cGMPs, Applicable Laws, Regulatory
Acts and the Quality Agreement. Product shall not be adulterated or misbranded within the meaning of the FD&C Act. 

        (f)    Intellectual Property Infringement.    To GSK's knowledge, none of the GSK Intellectual Property, including
manufacturing processes or procedures utilized by GSK, its Affiliates or the 

26

 

Facility
in the performance of this Agreement infringes upon or misappropriates the Intellectual Property rights of any Third Party. 

        (g)    DISCLAIMER.    THE REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS AGREEMENT DO NOT APPLY TO THE PRODUCTS TO
THE EXTENT THAT THE PRODUCTS FAIL TO CONFORM TO APPLICABLE SPECIFICATIONS DUE TO (i) OCCURRENCES AFFECTING OR ALTERING THE PRODUCT OR API AFTER IT IS DELIVERED TO PROMETHEUS' CARRIER OR FREIGHT
FORWARDER AT THE FACILITY OR THE API FACILITY, OR (ii) ACTIONS TAKEN OR FAILED TO BE TAKEN AFTER THE PRODUCTS WERE DELIVERED BY GSK TO PROMETHEUS' CARRIER OR FREIGHT FORWARDER AT THE FACILITY.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, GSK DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE. 

        10.2    Representations and Warranties of Prometheus.    

        Prometheus
represents and warrants to GSK that: 

        (a)    Status; Enforceability.    Prometheus is a validly existing corporation and is in good standing under the
Applicable Laws of the jurisdiction of its incorporation; the execution, delivery and performance of this Agreement by Prometheus has been duly authorized by all requisite corporate action; this
Agreement constitutes the legal, valid and binding obligation of Prometheus, enforceable against Prometheus in accordance with the terms hereof, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting the rights and remedies of creditors generally and the effect of general principles of equity, whether applied by a court of
law or equity; and the execution, delivery and performance of this Agreement will not violate or conflict with any other agreement or instrument to which it is a Party. 

        (b)    Intellectual Property.    To Prometheus' knowledge, the Prometheus Rights and the other Intellectual Property
licensed or sublicensed to GSK pursuant to Article VIII (collectively, the "Licensed Technology"), are free and clear of any lien, encumbrance, security interest or restriction or license that
interferes with the rights granted to GSK herein, and Prometheus has not previously granted and will not grant to any Third Party during the Term of this Agreement, any right, license or interest in
or to the Licensed Technology, or any portion thereof, inconsistent with the rights granted to GSK herein. 

        (c)    No Other License Required.    To Prometheus' knowledge, except for a license required as a result of change
made by GSK pursuant to Section 3.1(g), the manufacture and supply of Products and API pursuant to this Agreement do not and shall not require a license under any Intellectual Property owned or
controlled by Prometheus or any Third Party other than as provided to GSK hereunder. 

        (d)    Noninfringement.    To Prometheus' knowledge, except for any change made by GSK pursuant to
Section 3.1(g), the manufacture and supply of Products and API pursuant to this Agreement in accordance with any Specification changes made after the Effective Date will not infringe upon nor
misappropriate the Intellectual Property of any Third Party. 

        (e)    Regulatory Consents.    Prometheus or its Third Party Suppliers will obtain and thereafter maintain all
Consents necessary for the performance of its obligations hereunder and for the manufacturing of Products and API and distribution of the Products for commercial sale in the Territory. 

        (f)    Technical Capabilities.    Prometheus will engage as Third Party Suppliers only Third Party Suppliers which to
its knowledge at the time of engagement have the technical ability, production 

27

 

capacity
and financial resources available to manufacture and supply the API and Product to Prometheus or its designee. 

        (g)    Compliance by Prometheus and its Third Party Suppliers.    The storage, disposal, transportation and other
handling of Products by Prometheus shall be in accordance with and conform to the Specifications, cGMPs, Applicable Laws, the Quality Agreement and Regulatory Acts. Upon receipt of Consents by
Prometheus or its Third Party Supplier, the manufacture, packaging, processing, storage, disposal, transportation and other handling of Products by Prometheus or its Third Party Supplier shall be in
accordance with and conform to the Specifications, cGMPs, Applicable Laws, the Quality Agreement and Regulatory Acts. 

Article XI
 Liability and Indemnification  

        11.1    Indemnity by GSK.    

        Subject
to Section 11.4 below, GSK shall indemnify, defend and hold Prometheus and each Prometheus Affiliate and their respective directors, officers, employees and agents (each a
"Prometheus Indemnitee") harmless from and against all Losses arising from any Third Party claim, demand, suit, action or proceeding (a "Third Party Claim") to the extent arising out of (a) any
breach or nonperformance of any of GSK's covenants, obligations, representations or warranties under this Agreement; (b) GSK's failure to obtain, maintain or comply in any material respect with
any of its Consents which are required to perform any of its obligations hereunder or under Applicable Laws; (c) any material violation of Applicable Laws by GSK in the performance of its
obligations hereunder; (d) GSK's failure to pay any Tax for which it is responsible under Section 3.6, or (e) any claim that GSK's manufacturing processes or procedures utilized
by GSK other than those required as a result of a change to the Specifications requested by Prometheus, specifically related to the API or Product, the GSK Intellectual Property and Process
Developments, infringe upon or misappropriate the Intellectual Property rights of any Third Party. The foregoing indemnification obligations shall not apply to the extent any particular Loss is a
direct result of (i) Prometheus' breach of any covenant, obligation, representation or warranty under this Agreement, (ii) negligent acts, omissions or willful misconduct of any
Prometheus Indemnitee, (iii) any matter for which Prometheus is obligated to indemnify GSK pursuant to Section 11.2 below; (iv) GSK's compliance with the Specifications; or
(v) other than in connection with a corresponding breach by GSK of cGMP or Applicable Laws, GSK's compliance with an order of a Governmental Authority directed to GSK specifically regarding its
compliance with cGMPS or Applicable Laws. Nothing in this Section 11.1 or Section 11.2 below shall be construed to limit, and these provisions shall be in addition to, any
indemnification provision in any other agreement between the Parties. 

        11.2    Indemnity by Prometheus.    

        Prometheus
shall indemnify, defend and hold GSK and each GSK Affiliate and their respective directors, officers, employees and agents (each a "GSK Indemnitee") harmless from and against
all Losses from any Third Party Claim to the extent arising out of (a) breach of any of Prometheus' covenants, obligations, representations or warranties under this Agreement;
(b) Prometheus' failure to obtain, maintain or comply in any respect with any of its Consents which are required to perform any of its obligations hereunder, or under Applicable Laws,
(c) any material violation of Applicable Laws by Prometheus in the performance of its obligations hereunder; (d) Prometheus' failure to pay any Tax for which it is responsible under
Section 3.6 or (e) any claim that the manufacturing processes or procedures utilized by GSK that are required as a result of a change requested by Prometheus, including a change to the
Specifications, infringe upon or misappropriate the Intellectual Property rights of any Third Party. The foregoing indemnification obligations shall not apply in each case to the extent any particular
Loss is a direct result of (i) GSK's breach of any covenant, obligation, representation or warranty under this Agreement, (ii) negligent acts, omissions or willful misconduct of 

28

 

any
GSK Indemnitee, or (iii) any matter for which GSK is obligated to indemnify Prometheus pursuant to Section 11.1 above. Nothing in this Section 11.2 or Section 11.1
above shall be construed to limit, and these provisions shall be in addition to, any indemnification provision in any other agreement between the Parties. 

        11.3    Procedures.    

        Any
Person that may be entitled to indemnification under this Agreement (an "Indemnified Party") shall give written notice to the Person obligated to indemnify it (an "Indemnifying
Party") with reasonable promptness upon becoming aware of any Third Party Claim or other facts upon which a claim for indemnification will be based. Such notice shall set forth such information with
respect thereto as is then reasonably available to the Indemnified Party. The Indemnifying Party shall have the right to undertake the defense of any such Third Party Claim with counsel reasonably
satisfactory to the Indemnified Party and the Indemnified Party shall cooperate in such defense and make available all records, materials and witnesses reasonably requested by the Indemnifying Party
in connection therewith at the Indemnifying Party's expense. If the Indemnifying Party shall have assumed the defense of the Third Party Claim with counsel reasonably satisfactory to the Indemnified
Party, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses (other than for reasonable costs of investigation) subsequently incurred by the Indemnified
Party in connection with the defense thereof; provided, that the Indemnifying Party shall pay the reasonable legal fees and expenses of counsel for the Indemnified Party if, following the Indemnifying
Party's assumption of the defense of the Third Party Claim with counsel reasonably satisfactory to the Indemnified Party, cross claims between the Indemnifying Party and Indemnified Party are filed in
any suit, action or proceeding and it is finally determined that the Indemnifying Party was responsible to the Indemnified Party under the cross claim. The Indemnifying Party shall not be liable for
any Third Party Claim settled without its consent, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party shall obtain the written consent of the Indemnified Party prior
to ceasing to defend, settling or otherwise disposing of any Third Party Claim if as a result thereof the Indemnified Party would become subject to injunctive or other equitable relief or if the
Indemnified Party may reasonably object to such disposition of such Third Party Claim based on a material adverse effect on the Indemnified Party. 

        11.4    Limitations of Liability.    

        (a)   EXCEPT
WITH RESPECT TO ANY INDEMNIFICATION OBLIGATIONS HEREUNDER FOR THIRD PARTY CLAIMS UNDER SECTION 11.1 OR IN THE EVENT OF GSK'S WILLFUL MISCONDUCT PURSUANT TO
SECTION 11.4(B), GSK'S TOTAL, AGGREGATE LIABILITY FOR ALL CLAIMS BETWEEN THE PARTIES (I.E., NOT BASED ON A THIRD PARTY LOSS) ARISING UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT, STRICT
LIABILITY OR OTHERWISE, SHALL NOT EXCEED [***] DOLLARS ($[***]). 

        (b)   EXCEPT
ONLY IN THE EVENT OF GSK'S WILLFUL MISCONDUCT, GSK SHALL HAVE NO LIABILITY FOR ANY CLAIM FOR FAILURE TO SUPPLY OR DELAYED SUPPLY OF ANY PRODUCT, AND PROMETHEUS'
EXCLUSIVE REMEDIES FOR FAILURE TO SUPPLY OR DELAYED SUPPLY OF ANY PRODUCT ARE THE DISCOUNT UNDER SECTION 3.7 AND THE RIGHT TO TERMINATE THIS AGREEMENT IN ACCORDANCE WITH THE TERMS OF
SECTION 14.2. 

        (c)   EXCEPT
WITH RESPECT TO ANY INDEMNIFICATION OBLIGATIONS HEREUNDER FOR THIRD PARTY CLAIMS UNDER SECTION 11.2, PROMETHEUS' TOTAL, AGGREGATE LIABILITY FOR ALL CLAIMS
BETWEEN THE PARTIES (I.E., NOT BASED ON A THIRD PARTY LOSS) ARISING UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, SHALL NOT EXCEED [***]
DOLLARS ($[***]). 

*** 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.

29

 

        (d)   IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER, FOR ANY CONSEQUENTIAL, INCIDENTAL, LIQUIDATED OR INDIRECT DAMAGES OR LOSSES, INCLUDING ANY LOSS OF PROFITS,
EARNINGS, GOODWILL, SAVINGS OR BUSINESS SUFFERED BY PROMETHEUS OR GSK, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, REGARDLESS OF ANY FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY AVAILABLE UNDER THIS
AGREEMENT. FOR THE AVOIDANCE OF DOUBT, THIS SECTION 11.4(D) DOES NOT LIMIT A PARTY'S RIGHT TO INDEMNIFICATION UNDER SECTION 11.1 OR 11.2 WITH RESPECT TO ANY CONSEQUENTIAL, INCIDENTAL,
LIQUIDATED OR INDIRECT DAMAGES OR LOSSES PAID IN RESPECT OF A THIRD PARTY CLAIM. 

        (e)   NOTWITHSTANDING
ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, THE PARTIES RIGHTS AND OBLIGATIONS WITH RESPECT TO THIRD PARTY CLAIMS BASED UPON INHERENT
CHARACTERISTICS OF THE PRODUCT (E.G., EFFICACY AND SAFETY) AS APPROVED BY APPLICABLE REGULATORY AUTHORITIES SHALL BE ADDRESSED PURSUANT TO THE ASSET PURCHASE AGREEMENT. 

Article XII
 Insurance  

        12.1    GSK Insurance Requirements.    

        During
the Term of this Agreement, GSK shall at all times maintain insurance policies or self-insurance in such amounts and with such scope of coverage as are adequate to
cover GSK's obligations under this Agreement. 

        12.2    Prometheus Insurance Requirements.    

        During
the Term of this Agreement, Prometheus shall at all times maintain insurance policies or self-insurance in such amounts and with such scope of coverage as are adequate
to cover Prometheus' obligations under this Agreement. 

Article XIII
 Force Majeure Event  

        13.1    General.    

        Neither
Party shall be liable to the other on account of any failure to perform or on account of any delay in performance of any obligation, other than with respect to the payment of
obligations, under this Agreement, if and to the extent that such failure or delay shall be due to a cause beyond the reasonable control of the relevant Party and which, by the exercise of its
commercially reasonable efforts of diligence and care, such Party could not reasonably have been expected to avoid, including but not limited to acts of God, embargoes, governmental restrictions,
terrorism, materials shortages or failure of any supplier (where such shortage or failure is attributable to an event of force majeure suffered by such supplier), fire, flood, explosion, earthquake,
hurricanes, storms, tornadoes, riots, wars, civil disorder, failure of public utilities or common carriers, labor disturbances, rebellion or sabotage (a "Force Majeure Event"). The Party experiencing
the delay and seeking relief under this Article XIII shall promptly notify the other Party of the delay and the probable duration of the delay and shall use commercially reasonable efforts to
overcome such delay. The Party affected shall be excused from the performance of such obligation to the extent such performance is prevented, hindered or delayed thereby during the continuance of any
such happening or event. This Agreement, in so far as it relates 

30

 

to
such obligation, shall be deemed suspended so long as and to the extent that such cause delays the performance of any Force Majeure Event obligation. 

        13.2    Termination; Transition.    

        If
as a result of a Force Majeure Event, GSK is unable to fully perform its obligations for a period of three (3) months, Prometheus shall have the right to terminate this
Agreement upon thirty (30) days
prior notice to GSK thereafter. In the event Prometheus terminates this Agreement as provided in this Section 13.2 and provided Prometheus reimburses GSK for all amounts due and payable
pursuant to this Agreement, including those amounts due under Section 2.6, GSK agrees to use commercially reasonable efforts in a manner consistent with Section 4.6(a) and mutually
agreed by the Parties to assist Prometheus with transfer of the manufacture of the API and the Products to any other facility or facilities selected by Prometheus, in its sole discretion. 

Article XIV
 Term; Termination; Remedies  

        14.1    Term.    

        Unless
otherwise terminated in accordance with Section 13.2 or this Article XIV, this Agreement shall commence on the Effective Date and will expire on the second
anniversary of the Effective Date (the "Initial Term"), unless Prometheus delivers six (6) month advance, written notice prior to the expiration of the Initial Term or the
then-current Renewal Term that Prometheus is electing to extend this Agreement for an additional one (1) year (each such successive one-year extension, a "Renewal
Term"). The Initial Term and all Renewal Terms, if any, collectively are referred to in this Agreement as the "Term." Notwithstanding any provision of this Agreement to the contrary, unless earlier
terminated by the Parties in accordance with Section 14.2, upon receipt of Consents and in accordance with Section 2.3 this Agreement shall expire at either the (a) the end of the
then-current Term (inclusive of any Renewal Term properly elected by Prometheus) or (b) six (6) months after receipt of the Consents. 

        14.2    Termination.    

        (a)   Prometheus
may terminate this Agreement by delivery of a six (6) month advance, written notice given at any time. 

        (b)   This
Agreement shall immediately terminate upon GSK's written notice to Prometheus described in Section 4.4(a). 

        (c)   Either
Party may terminate this Agreement effective upon ninety (90) days prior written notice to the other Party, if the other Party commits a material breach of
this Agreement and fails to cure such breach by the end of such ninety (90) day period; provided, however, if Prometheus fails to pay amounts due under this Agreement (excluding amounts that
are the subject of a bona fide dispute over
quantities Delivered or a Nonconformity under investigation) within thirty (30) days after such payments are due (as set forth in Section 3.3), GSK shall be relieved of any further
obligation to perform under this Agreement until all such amounts due are brought current, and shall have the right to suspend the supply of any future batches of Product unless Prometheus shall also
have provided reasonable security for future payment as required by GSK; provided further, if Prometheus fails to cure its breach of payment within such ninety (90) day period, GSK may
immediately terminate this Agreement. 

        (d)   In
the event Prometheus fails to submit FDA filings to register its Third Party Supplier to manufacture Product within twenty-four (24) months after
the Effective Date, GSK may terminate this Agreement at the end of the Initial Term (irrespective of any Renewal Term elected pursuant to Section 14.1); however, if Prometheus has submitted FDA
filings to register its Third Party Supplier to manufacture Product within twenty-four (24) months after the Effective Date, then 

31

 

GSK
shall continue to supply the Product during the first Renewal Term (if such Renewal Term has been elected by Prometheus pursuant to Section 14.1). GSK may in its discretion, elect to
terminate this Agreement at the end of the first Renewal Term, if any, and shall upon such termination have no further obligations hereunder (subject to Section 15.12). For the avoidance of
doubt, any decision to supply Product beyond the first Renewal Term shall be in GSK's sole discretion (after discussion by the Parties if Prometheus requests per Section 14.1 supply of Product
beyond the first Renewal Term) and pursuant to terms identified in Section 3.1(c). 

        (e)   Except
to the extent limited by Applicable Law, either Party may terminate this Agreement effective upon written notice to the other Party, if the other Party becomes
insolvent or admits in writing its inability to pay its debts as they become due, makes an assignment for the benefit of its creditors or has a receiver, trustee or other court officer appointed for
its properties or assets. 

        (f)    Except
to the extent limited by Applicable Law, the Term of this Agreement shall automatically expire and this Agreement shall terminate, without the necessity of any
notice or action by either party, upon the expiration of fifteen (15) days after any resolution by Prometheus' Board of Directors authorizing either (i) the filing of a petition for
relief under Title 11 of the United States Code, or (ii) consent to entry of an order for relief under 11 U.S.C. § 303, provided, however, that in GSK's sole discretion, and
subject to a demonstration of adequate protection for GSK, GSK may elect to waive the effect of this Section 14.2(e). 

        (g)   Upon
expiration or termination of this Agreement, each Party shall return the other Party's Confidential Information and all rights and obligations shall cease to exist
except for: (a) the payment of unpaid invoices due for finished Products Delivered or to be Delivered in accordance with this Agreement; (b) the rights and obligations of the Parties
which are set forth to survive pursuant to Section 15.12; and (c) within thirty (30) days following the completion of GSK's manufacturing and supply obligations under this
Agreement, GSK shall return to Prometheus, at Prometheus' expense, all tooling provided to GSK pursuant to Section 4.1 and that is then being used or held for use in connection with Product
manufacturing. In addition, upon termination of this Agreement under Section 14.2(b) or
14.2(d) or by Prometheus pursuant to Section 14.2(a) or 14.2(c), if requested by Prometheus and provided that Prometheus is not delinquent in paying any amounts properly invoiced to Prometheus,
GSK shall: (i) complete the manufacture of and supply to Prometheus and/or its designates all Products which Prometheus ordered from GSK pursuant to accepted Purchase Orders prior to
termination, provided that Prometheus also has complied with Sections 2.2, 2.3 and sufficient API is available for such manufacture as described in Section 4.4(a); and (ii) ship
any Materials in GSK's possession or control that Prometheus is required to purchase at GSK's cost pursuant to Section 2.6. In addition, upon termination of this Agreement under
Section 14.2(b) or by Prometheus pursuant to Section 14.2(c), GSK shall use commercially reasonable efforts in a manner consistent with Section 4.6(a) and mutually agreed by the
Parties to assist Prometheus with transfer of the manufacture of the API and the Products to any other facility or facilities selected by Prometheus, in its sole discretion. 

        14.3    Injunctive Relief.    

        In
the event that either Prometheus or GSK breaches or threatens to breach any provision of Article VIII of this Agreement, the Parties agree that irreparable harm to the other
Party is presumed and the damage to such Party likely would be very difficult to ascertain and would be inadequate. Accordingly, in the event of such circumstances, each of Prometheus and GSK agree
that, in addition to any other right and remedies available at law or in equity, the non-breaching Party shall have the right to seek injunctive relief from any court of competent
jurisdiction, and the breaching Party waives the requirement that a bond be posted. 

32

   Article XV
 Miscellaneous  

        15.1    Standard Forms.    

        In
all communications, GSK and Prometheus may employ their standard forms, but nothing in those forms, including Purchase Orders, shall be construed to modify or amend the terms and
conditions of this Agreement, and, in the case of any conflict herewith, the terms and conditions of this Agreement shall control. 

        15.2    Notices.    

        In
addition to the other specific procedures for notification required herein, all notices, demands, requests and other communications made hereunder shall be in writing and shall be
given either by personal delivery, by nationally recognized overnight courier (with charges prepaid), or by facsimile transmission (with telephone confirmation), and shall be deemed to have been given
or made: (i) if personally delivered, on the day of such delivery; (ii) if sent by overnight courier, on the day following the date deposited with such overnight courier service; or
(iii) if by facsimile transmission, on the date transmitted to receiving facsimile machine and confirmed by telephone, in each case pending the designation of another address, addressed as
follows: 

If to GSK:

GlaxoSmithKline

P.O. Box 13398

Five Moore Drive

Research Triangle Park, NC 27709-3398

Attention:    Attention: Director of Contract Manufacturing NA Rx

Facsimile:    (704) 625-9163 

With a copy (which shall not constitute notice) to:

GlaxoSmithKline

One Franklin Plaza

200 North 16th Street

Philadelphia, PA 19102

Attention:    Vice President, Associate General Counsel

Facsimile:    (215) 751-3489 

If to Prometheus:

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn:    President

Facsimile:    (858) 410-1945 

With a copy (which shall not constitute notice) to:

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn:    Legal Department

Facsimile:    (858) 332-3393 

33

 

        15.3    Independent Contractors.    

        In
the exercise of its obligations and in respect of its rights and entitlements hereunder or in respect hereof, Prometheus and GSK are and shall in all respects be treated as
independent contractors with respect to each other. Neither Party shall be deemed to be a co-venturer or partner of the other. Neither Party is an employee or a legal representative of the
other Party for any purpose. Neither Party shall have the authority to enter into any contracts in the name of or on behalf of the other Party. 

        15.4    Entire Understanding.    

        This
Agreement, including the Asset Purchase Agreement (and the Other Agreements as that term is defined therein), the Quality Agreement, the Trading Services Agreement, the Schedules
attached hereto and any other document identified herein, represent the entire understanding and agreement between the Parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and understandings between the Parties with respect to such subject matter, which are hereby expressly terminated. Without limiting the foregoing, the Parties
acknowledge and agree that their respective rights and obligations with respect to confidential information and publicity are set forth in Section 8.1 of the Asset Purchase Agreement. 

        15.5    Unintentional Omissions.    

        The
Parties acknowledge that they have expended substantial effort in preparing this Agreement and attempting to describe, in the Schedules hereto, as thoroughly and precisely as
possible, Specifications, Products, and other information. However, despite these efforts, the Parties acknowledge the possibility of involuntary or inadvertent omissions from the Schedules. The
Parties will agree in writing to the changes to be made to the Schedules to add these inadvertent or involuntary omissions and any such written agreement executed by the Parties shall serve as an
amendment to this Agreement. 

        15.6    Transferability; Binding Effect.    

        Neither
this Agreement, nor any of the rights or obligations of a Party may be directly or indirectly assigned, sold, delegated or otherwise disposed of without the prior written consent
of the other Party, which consent may not be unreasonably withheld; provided, however, that either Party may assign this Agreement to an Affiliate, including any successor in interest by way of any
reincorporation or other reorganization, and either Party may assign this Agreement to a successor by merger, acquisition, or sale of all or substantially all of such Party's business assets in the
field to which this Agreement relates without the consent of the other Party, provided that in each case, absent a novation agreement between the assigning Party and the other Party, such assigning
Party shall continue to be liable for any breaches of this Agreement by the assignee. 

        15.7    Dispute Resolution.    

        If
the Parties fail to resolve any claim, dispute, or controversy of whatever nature arising out of or relating to this Agreement (other than one relating to a breach of a Party's
obligations with respect to confidential information under Section 8.1 of the Asset Purchase Agreement or with respect to the validity, enforceability, infringement or misappropriation of
Intellectual Property rights, which shall not be subject to this Section 15.7), or concerning the interpretation, effect, termination, validity, performance and/or breach of this Agreement (a
"Claim"), either Party may refer the dispute, by notice to the other Party, to their respective officers designated below or such other officers as the 

34

 

Parties
may designate in writing from time to time, for attempted resolution by good faith negotiations within thirty (30) days after that notice is received. The designated officers are as
follows: 

	For GSK:	 	Vice President, Associate General Counsel
	

For Prometheus:	
 	

Vice President, Legal Affairs

        If
such dispute is not solved by the end of the thirty (30) day period, the Parties shall be free to pursue any legal or equitable remedy available to them. Each Party will bear
its own attorneys' fees and other costs and expenses. 

        15.8    Subcontractors.    

        GSK
may utilize subcontractors with appropriate expertise and experience in the performance of its obligations under this Agreement. 

        15.9    Amendment.    

        Any
amendment, modification or supplement of or to any provision of this Agreement, including the Schedules hereto, shall be effective only in writing and signed by a duly authorized
officer of suitable title of all Parties hereto. The Parties hereto waive the right to amend the provisions of this Section 15.9 orally. 

        15.10    Severability.    

        If
and to the extent that any court of competent jurisdiction holds any provision (or any part thereof) of this Agreement to be invalid or unenforceable, such holding shall in no way
affect the validity or enforceability of the remainder of this Agreement, and the invalid or unenforceable provision shall be fully severed from this Agreement and there shall automatically be added
in lieu thereof a provision as similar in terms and intent to such severed provision as may be legal, valid and enforceable. 

        15.11    Waiver.    

        Any
failure of Prometheus or GSK to comply with any obligation, covenant, agreement or condition herein contained may be expressly waived, in writing only, by the other Party hereto and
such waiver shall be effective only in the specific instance and for the specific purpose for which made or given. 

        15.12    Survival.    

        Article I,
Article V, Article VI, Article VIII, Article XI, Article XII, Article XV, and Sections 3.3, 3.5, 3.6, 9.2, 13.2, and
14.3, and any other provision which by its terms specifically shall so state, together with any obligation to make accrued but unpaid payments due hereunder, shall survive the termination or
expiration of this Agreement. 

        15.13    Drafting Ambiguities.    

        Each
Party to this Agreement and its counsel have reviewed and revised this Agreement. The rule of construction to the effect that any ambiguities are to be resolved against the drafting
Party shall not be employed in the interpretation of this Agreement or any amendment or Schedule to this Agreement. 

        15.14    Headings; Schedules; Counterparts.    

        (a)    Headings.    The headings of the Sections of this Agreement are for reference purposes only, are not part of
this Agreement and shall not in any way affect the meaning or interpretation of this Agreement. 

35

 

        (b)    Schedules.    All Schedules delivered pursuant to this Agreement shall be deemed part of this Agreement and
incorporated herein by reference, as if fully set forth herein. All provisions contained in any Schedule delivered by or on behalf of the Parties hereto, or in connection with the transactions
contemplated hereby, are an integral part of this Agreement. 

        (c)    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same instrument. 

        15.15    Governing Law.    

        This
Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York without regard to principles of conflicts of law, and the Parties hereby
irrevocably consents to the jurisdiction of the state and federal courts of New York. The United Nations Convention on Contracts for the International Sale of Goods is expressly disclaimed. 

[signature page follows]

36

[Signature Page to Supply Agreement]

        IN
WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be duly executed as of the date first written above. 

	 	 	SMITHKLINE BEECHAM CORPORATION

(d/b/a GlaxoSmithKline)
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	

PROMETHEUS LABORATORIES INC.
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

   Schedule 2.2(a)  

Form of Forecast 

[***] 

***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. 

2

 
Schedule 2.6(a)  

API Price 

	Product
	 	Price Per Unit
	 	Standard Batch Size

	Lotronex (alosetron HCl) 0.5 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles
	Lotronex (alosetron HCl) 1 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles

	*
	Price
is inclusive of all Materials. 

***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. 

3

 
Schedule 2.6(b)  

Materials Specific to the Products 

[***]

***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

 
Schedule 3.1

Product,
Product Prices and Standard Batch Sizes 

	Product
	 	Price Per Unit
	 	Standard Batch Size

	Lotronex (alosetron HCl) 0.5 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles
	Lotronex (alosetron HCl) 1 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles

	*
	Price
is inclusive of all Materials. 

***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

 
Schedule 3.2(c)  

Form of Trading Services Agreement 

[***]

***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

 
Schedule 4.1

Specifications
Index 

	Specification Title
 
	 	Specification Reference #

	Finished Product Specifications	 	 
	[***]	 	[***]
	[***]	 	[***]
	Excipient Specifications	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	Packaging Component Specifications—0.5 mg 30s	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	Packaging Component Specifications—1 mg 30s	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	API Specifications (including finished API, Intermediates & Raw Materials)	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]

***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

  

Schedule 4.4(a) 

API
Intermediate Material 

	API Intermediate Material
 
	 	Cost per Kg

	[***]	 	$[***]

	 

	Material Location
 
	 	Material
	 	Description
	 	Batch No
	 	Quantity (Kg)
	 	Supply Source

	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	 	 	 	 	[***]	 	[***]	 	[***]	 	 

***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

 
Schedule 4.5

[***] 

***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.

9

 
Schedule 4.6(a)  

[***]

***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.

10

 
Schedule 4.6(c)  

API
Raw Material and Intermediates 

	API Raw Material and/or API Intermediate Material
 
	 	Cost per Kg

	[***]	 	$[***]
	[***]	 	$[***]

	 

	Material Location
 
	 	Material
	 	Description
	 	Batch No
	 	Quantity (Kg)
	 	Supply Source

	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	 	 	 	 	[***]	 	[***]	 	[***]	 	 
	

[***]	
 	

[***]	
 	

[***]	
 	

[***]	
 	

[***]	
 	

[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	 	 	 	 	[***]	 	[***]	 	[***]	 	 

***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

   EXHIBIT J  

TRANSITION SERVICES AGREEMENT  

[Not
yet finalized] 

J-1

QuickLinks

Exhibit 10.18

ASSET PURCHASE AND SALE AGREEMENT

ARTICLE VI COVENANTS PRIOR TO CLOSING

ARTICLE VII CONDITIONS TO CLOSING

ARTICLE X INDEMNIFICATION AND DISPUTE RESOLUTION

TRADE DRESS

EXHIBIT F

Appendix 1 Contacts

Test WordQuickLinks
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Exhibit 10.19  

 
  AMENDMENT NO. 1 TO THE
  ASSET PURCHASE AND SALE AGREEMENT    
    

        THIS AMENDMENT NO. 1 TO THE ASSET PURCHASE AND SALE AGREEMENT (this "Amendment No. 1"), dated as of
December 21, 2007 (the "Effective Date"), is made by and between SmithKline Beecham Corporation d/b/a GlaxoSmithKline
("SB Corp"), a corporation organized under the laws of the Commonwealth of Pennsylvania, having a place of business at One Franklin Plaza, Philadelphia,
PA 19101 and Glaxo Group Limited ("GGL"), a corporation organized under the laws of England, with offices at Glaxo Wellcome House, Berkeley Avenue,
Greenford, Middlesex, UB6 0NN, United Kingdom (together referred to as "Seller") and Prometheus Laboratories, Inc., a corporation
organized under the laws of California, having a place of business at 9410 Carroll Park Drive, San Diego, CA 92121 ("Purchaser"). Each of Seller and
Purchaser are sometimes collectively referred to herein as the "Parties" and separately as a "Party". 

        WHEREAS,
Seller and Purchaser entered into that certain Asset Purchase and Sale Agreement dated October 31, 2007 (the "Agreement");
and 

        WHEREAS,
Seller and Purchaser desire to amend the Agreement as set forth in this Amendment No. 1; 

        NOW,
THEREFORE, in consideration of the foregoing premises and the representations, covenants and agreements contained herein, Seller and Purchaser, intending to be legally bound, hereby
agree as follows: 

	1.
	Capitalized
terms used herein and not otherwise defined will have the meanings given to them in the Agreement.

	2.
	The
last sentence of Section 2.6(a) is hereby deleted in its entirety.

	3.
	This
Amendment No. 1 shall be construed, and the respective rights of the Parties determined, according to the substantive law of the State of New York notwithstanding the
provisions governing conflict of laws under New York law to the contrary.

	4.
	This
Amendment No. 1 may be executed in any three counterparts, each of which, when executed, shall be deemed to be an original and both of which together shall constitute one
and the same document. This Amendment No. 1 may be executed by facsimile signatures, which signatures shall have the same force and effect as original signatures.

	5.
	Except
as set forth in this Amendment No. 1, the Agreement shall remain in full force and effect and are hereby ratified and confirmed except that each reference to the
"Agreement" or words of like import in the Agreement will mean and be a reference to the Agreement as amended by this Amendment No. 1. 

[Signature Page Follows]

1

        IN
WITNESS WHEREOF, duly authorized representatives of the Parties have duly executed this Amendment No. 1 to the Agreement as of the Effective Date. 

	 	 	SMITHKLINE BEECHAM

CORPORATION D/B/A

GLAXOSMITHKLINE
	

 	
 	

By:	
 	

/s/ Donald F. Parman

	 	 	Name:	 	Donald F. Parman
	 	 	Title:	 	Vice President and Secretary
	

 	
 	
GLAXO GROUP LIMITED
	

 	
 	

By:	
 	

/s/ Victoria Whyte

	 	 	Name:	 	Victoria Whyte
	 	 	Title:	 	Assistant Secretary
	

 	
 	
PROMETHEUS LABORATORIES INC.
	

 	
 	

By:	
 	

/s/ Joseph M. Limber

	 	 	Name:	 	Joseph M. Limber
	 	 	Title:	 	President and Chief Executive Officer

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AMENDMENT NO. 1 TO THE ASSET PURCHASE AND SALE AGREEMENT

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