Document:

Unassociated Document

    Exhibit
4.17

    

    

    

    

    

    

    
      

      

    

    

    

    

    

    

    
      License
Agreement

    

     

    by
and between

     

    Prometheus
Laboratories Inc.

     

    and

     

    Rosetta
Genomics Ltd.

    
      

       

      April
10, 2009

       

       

       

       

      
        

        

      

    

    
      

    

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

           CONFIDENTIAL

        

         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    

    Page

    
      	
              1.

            	
              DEFINITIONS

            	
              1

            
	 	 	 
	
              2.

            	GRANT
      OF RIGHTS; NON-COMPETE	
              11

            
	 	 	 	 
	 
      	
              2.1

            	
              Licenses

            	
              11

            
	 
      	
              2.2

            	
              Right
      to Sublicense.

            	
              15

            
	 
      	
              2.3

            	
              Ongoing
      Disclosure and Delivery of Licensed Intellectual Property

            	
              16

            
	 
      	
              2.4

            	
              Non-Compete
      in Prometheus Territory.

            	
              17

            
	 
      	
              2.5

            	
              Compliance
      with Upstream License Agreements.

            	
              17

            
	 
      	
              2.6

            	
              After-acquired
      Rights

            	
              18

            
	 	 	 
	
              3.

            	
              DEVELOPMENT
      AND COMMERCIALIZATION MATTERS

            	
              19

            
	 	 	 	 
	 
      	
              3.1

            	
              Development
      Oversight Committee

            	
              19

            
	 
      	
              3.2

            	
              Development
      Program.

            	
              22

            
	 
      	
              3.3

            	
              Improvements.

            	
              25

            
	 
      	
              3.4

            	
              Commercialization.

            	
              28

            
	 
      	
              3.5

            	
              Patent
      Marking

            	
              28

            
	 	 	 
	
              4.

            	
              PAYMENTS

            	
              28

            
	 	 	 	 
	 
      	
              4.1

            	
              Up-Front
      Equity

            	
              28

            
	 
      	
              4.2

            	
              Milestone
      Payments.

            	
              28

            
	 
      	
              4.3

            	
              Royalty.

            	
              29

            
	 
      	
              4.4

            	
              Permitted
      Reductions.

            	
              29

            
	 
      	
              4.5

            	
              Payment
      and Reports

            	
              30

            
	 
      	
              4.6

            	
              Record
      Keeping

            	
              31

            
	 
      	
              4.7

            	
              Audit
      Rights

            	
              31

            
	 
      	
              4.8

            	
              Withholding
      Taxes

            	
              31

            
	 	 	 
	
              5.

            	
              INTELLECTUAL
      PROPERTY RIGHTS

            	
              32

            
	 	 	 	 
	 
      	
              5.1

            	
              Patent
      Prosecution and Maintenance; Product Technical
Information.

            	
              32

            
	 
      	
              5.2

            	
              Infringement
      or Misappropriation of Licensed Intellectual Property.

            	
              33

            
	 
      	
              5.3

            	
              Resolution
      of Potential Blocking Positions

            	
              36

            
	 	 	 
	
              6.

            	
              CONFIDENTIAL
      INFORMATION

            	
              39

            
	 	 	 	 
	 
      	
              6.1

            	
              Confidentiality.

            	
              39

            
	 
      	
              6.2

            	
              Publicity
      and Permitted Disclosures

            	
              40

            
	 	 	 
	
              7.

            	
              REPRESENTATIONS,
      WARRANTIES AND COVENANTS

            	
              41

            
	 	 	 	 
	 
      	
              7.1

            	
              Corporate
      Existence and Power

            	
              41

            
	 
      	
              7.2

            	
              Authority

            	
              41

            
	 
      	
              7.3

            	
              Intellectual
      Property

            	
              41

            

    

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - i
-

        
          

        

      

      
        
        

      

    

     

     

    
      	 
      	
              7.4

            	
              Regulatory
      Matters

            	
              44

            
	 
      	
              7.5

            	
              Compliance
      with Laws.

            	
              44

            
	 
      	
              7.6

            	
              Existing
      Research Agreements

            	
              44

            
	 
      	
              7.7

            	
              Legal
      Proceedings

            	
              44

            
	 
      	
              7.8

            	
              Financial
      Condition

            	
              45

            
	 	 	 
	
              8.

            	
              INDEMNIFICATION

            	
              45

            
	 	 	 	 
	 
      	
              8.1

            	
              Indemnification
      by Rosetta

            	
              45

            
	 
      	
              8.2

            	
              Indemnification
      by Prometheus

            	
              45

            
	 
      	
              8.3

            	
              Indemnification
      Procedures

            	
              46

            
	 
      	
              8.4

            	
              Insurance

            	
              46

            
	 	 	 
	
              9.

            	
              TERM
      AND TERMINATION

            	
              46

            
	 	 	 	 
	 
      	
              9.1

            	
              Term

            	
              46

            
	 
      	
              9.2

            	
              Termination
      of Agreement for Breach

            	
              46

            
	 
      	
              9.3

            	
              Termination
      of Agreement for Insolvency

            	
              47

            
	 
      	
              9.4

            	
              Termination
      of Agreement for Convenience by Prometheus

            	
              47

            
	 
      	
              9.5

            	
              Termination
      for Challenge to Licensed Patents

            	
              47

            
	 
      	
              9.6

            	
              Procedure
      upon Termination or Expiration of Agreement

            	
              48

            
	 
      	
              9.7

            	
              Survival

            	
              48

            
	 	 	 
	
              10.

            	
              LIMITATION
      OF LIABILITY

            	
              48

            
	 	 	 
	
              11.

            	
              DISPUTE
      RESOLUTION

            	
              49

            
	 	 	 	 
	 
      	
              11.1

            	
              Informal
      Resolution

            	
              49

            
	 
      	
              11.2

            	
              Arbitration

            	
              49

            
	 
      	
              11.3

            	
              Escrow

            	
              49

            
	 
      	
              11.4

            	
              Governing
      Law

            	
              50

            
	 	 	 
	
              12.

            	
              MISCELLANEOUS

            	
              50

            
	 	 	 	 
	 
      	
              12.1

            	
              Unenforceability

            	
              50

            
	 
      	
              12.2

            	
              Compliance
      with Law

            	
              50

            
	 
      	
              12.3

            	
              No
      Waiver

            	
              50

            
	 
      	
              12.4

            	
              Drafting;
      Fairness of Agreement

            	
              50

            
	 
      	
              12.5

            	
              Assignment

            	
              50

            
	 
      	
              12.6

            	
              Relationship
      of the Parties

            	
              50

            
	 
      	
              12.7

            	
              Injunctive
      Relief

            	
              51

            
	 
      	
              12.8

            	
              Notices

            	
              51

            
	 
      	
              12.9

            	
              Entire
      Agreement

            	
              52

            
	 
      	
              12.10

            	
              Force
      Majeure

            	
              52

            
	 
      	
              12.11

            	
              Headings

            	
              52

            
	 
      	
              12.12

            	
              Right
      of Set-Off

            	
              52

            
	 
      	
              12.13

            	
              Costs
      and Expenses

            	
              53

            
	 
      	
              12.14

            	
              Applicability
      of Section 365(n) of the Bankruptcy Code.

            	
              53

            

    

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - ii
-

        
          

        

      

      
        
        

      

    

     

     

    
      	 
      	
              12.15

            	
              Counterparts

            	
              53

            
	 	 	 
	
              13.

            	
              CLOSING.

            	
              53

            
	 	 	 	 
	 
      	
              13.1

            	
              Closing
      Date

            	
              53

            
	 
      	
              13.2

            	
              Deliverables
      at Closing by Rosetta

            	
              53

            
	 
      	
              13.3

            	
              Deliverables
      at Closing by Prometheus

            	
              54

            
	 
      	
              13.4

            	
              Conditions
      Precedent to Obligations of Prometheus

            	
              54

            
	 
      	
              13.5

            	
              Conditions
      Precedent to Obligations of Seller

            	
              54

            
	 
      	
              13.6

            	
              Waiver
      of Conditions

            	
              55

            
	 
      	
              13.7

            	
              Notifications.

            	
              55

            
	 
      	
              13.8

            	
              No
      Negotiation.

            	
              55

            

    

     

    
      	
            	Annex
      A	
              Licensed
      Intellectual Property

            	 
      
	
            	Annex
      B	
              Development
      Plan

            	 
      
	
            	Annex
      C	
              Services
      Agreement

            	 
      
	
            	Annex
      D	
              Service
      Agreement Profits

            	 
      
	
            	Annex
      E	
              Estimate
      for Additional Development Expenses

            	 
      
	
            	Annex
      F	
              Existing
      Research Agreements

            	 
      
	
            	Annex
      G	
              Select
      Provisions of JHU Agreement

            	 
      
	
            	Annex
      H	
              Rosetta
      Press Release

            	 
      
	
            	Annex
      I	
              Form
      of THM Written Statement

            	 
      

    

    

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - iii
-

        
          

        

      

      
         

      

    

    LICENSE
AGREEMENT

     

    This
License Agreement (“Agreement”) is
entered into as of April 10, 2009 (the “Execution Date”), and
is by and between Prometheus
Laboratories Inc., a California corporation having its principal place of
business at 9410 Carroll Park Drive, San Diego, CA 92121 USA (“Prometheus”) and
Rosetta
Genomics Ltd., a corporation organized under the laws of Israel, having
its principal place of business at 10 Plaut St., Rehovot, Israel, 76706 (“Rosetta”).

     

    RECITALS

     

    Whereas,
Rosetta is the owner of all right, title and interest in or otherwise has the
right to license certain Patents and Technical Information related to certain
Diagnostic Tests (each as hereinafter defined); and

     

    Whereas,
Rosetta desires to grant, and Prometheus desires to accept, a License (as
hereinafter defined) under such Patents and Technical Information to research,
develop, practice and commercialize Licensed Products for use in the Field and
in the Prometheus Territory (each as hereinafter defined) on the terms and
conditions set forth herein.

     

    AGREEMENT

     

    Now,
Therefore, for and in consideration of the above-described recitals, the
mutual promises and covenants of the parties hereinafter contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties, the parties hereto (each a “Party” and together
the “Parties”),
intending to be legally bound, enter into the agreements contained
herein.

     

    
      	
              1.

            	
              DEFINITIONS

            

    

     

    For
purposes of this Agreement, the following terms shall have the meanings set
forth below:

     

    “Affiliate” shall
mean, with respect to either Party, any person or entity which, directly or
indirectly, controls, is controlled by, or is under common control with, the
specified Party.  For the purposes of this definition, the term “control”, as applied
to any person or entity, means the ownership or control, directly or indirectly,
of (a) more than fifty percent (50%) or (b) the maximum percentage, if equal to
or less than fifty percent (50%), allowed by law in the country of the
controlled person or entity, of all of the voting power of the shares (or other
securities or rights) entitled to vote for the election of directors or other
governing authority; provided that such
entity shall be considered an “Affiliate” only during the time that such
“control” exists.

     

    “Agreement” shall have
the meaning set forth in the Introduction.

     

    “Alliance Manager”
shall have the meaning set forth in Section 3.1.1.

     

    “Budget” shall have
the meaning set forth in Section 3.2.2.

     

    “Claim” shall mean any
charge, allegation, notice, civil, criminal or administrative claim, demand,
complaint, cause of action, suit, Proceeding, arbitration, hearing or
investigation.

     

    “CLIA” shall mean the
Clinical Laboratory Improvement Amendments of 1988.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 1
-

        
          

        

      

      
         

      

    

    “Clinical Development
Subcommittee” shall have the meaning set forth in Section
3.1.5.

     

    “Closing” shall have
the meaning set forth in Section 13.1.

     

    “Commercial Technology
Platforms” shall mean the Real-Time PCR Technology, MGB Probes,
microarrays or other generally commercially available technology platforms used
to provide any Services under the Services Agreement or used by Prometheus or
its Affiliates or Sublicensees to perform any Diagnostic Test.

     

    “Combination Product”
shall have the meaning set forth in Section 4.4.2.

     

    “Commercially Reasonable
Efforts” shall have the meaning set forth in Section 3.2.6(c), except
that in the context of any request that Rosetta is required hereunder to make to
an Upstream Licensor with respect to an amendment, modification or waiver of any
provision of an Upstream License Agreement or any matter that is outside the
scope of such Upstream Licensor’s obligations thereunder, Commercially
Reasonable Efforts shall be limited to Rosetta’s making such request once in a
good-faith manner to a representative of such Upstream Licensor who is
responsible for administering the relevant Upstream License Agreement, and
negotiating in good faith with such Upstream Licensor only if the initial
request is not rejected.

     

    “Committee” shall have
the meaning set forth in Section 3.1.1.

     

    “Competitor” shall
mean any Third Party with (a) a molecular diagnostics business that generates at
least [***] of such Third Party’s total revenue from sales or services, (b) an
oncology diagnostics business, and/or (c) a gastrointestinal diagnostics
business.

     

    “Control” or “Controlled” shall
mean, subject to Section 2.6, with respect to Technical Information or Patents,
that Rosetta and/or its Affiliates has licensed (or otherwise obtained rights to
or under) such Technical Information or Patents from a Third Party and Rosetta
and/or its Affiliates has the right to grant sublicenses to such Technical
Information or Patents.

     

    “Development Fund”
shall mean a ring-fenced account maintained by Rosetta and dedicated solely to
meeting the costs and expenses required to complete the Development
Program.

     

    “Development Plan”
shall have the meaning set forth in Section 3.2.2.

     

    “Development Program”
shall have the meaning set forth in Section 3.2.1.

     

    “Diagnostic Tests”
shall mean each of the following diagnostic tests and any Improvements agreed by
the parties to be incorporated therein: (a) the Squamous Test, (b) the
Mesothelioma Test, (c) the Mets Test, (d) the Second Generation Mets Test, (e)
the IBS Test, and (f) the IBD Test.

     

    “Dispute” shall have
the meaning set forth in Section 11.1.

     

    “Effective Date” shall
have the meaning set forth in Section 13.1.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    “Encumbrance” shall
mean any lien, pledge, security interest, right of first refusal, option, title
defect, Claim, license, restriction, or other adverse claim or interest or
encumbrance of any kind or nature whatsoever, whether or not perfected,
including any restriction on use, transfer, receipt of income or exercise of any
other attribute of ownership.

     

    “Escrow Account” shall
have the meaning set forth in Section 11.3.

     

    “Escrow Agent” shall
have the meaning set forth in Section 11.3.

     

    “Excluded Acquisition
Patents” shall mean any Patents which (a) are acquired by Rosetta or its
Affiliates after the Effective Date and (b) are useful or necessary for the
Exploitation of a Diagnostic Test, and which Rosetta is unable, despite using
Commercially Reasonable Efforts, to license or sublicense (as applicable) to
Prometheus due to the grant of prior exclusive rights to such Patents to Third
Parties prior to the applicable acquisition thereof by Rosetta and/or its
Affiliates.

     

    “Excluded Acquisition
Technical Information” shall mean any Technical Information which (a) is
acquired by Rosetta or its Affiliates after the Effective Date and (b) is useful
or necessary for the Exploitation of a Diagnostic Test, and which Rosetta is
unable, despite using Commercially Reasonable Efforts, to license or sublicense
(as applicable) to Prometheus due to the grant of prior exclusive rights to such
Technical Information to Third Parties prior to the applicable acquisition
thereof by Rosetta and/or its Affiliates or prior to the time at which it is
determined that such Technical Information is useful or necessary for the
Exploitation of a Diagnostic Test.

     

    “Execution Date” shall
have the meaning set forth in the Introduction.

     

    “Existing Research
Agreements” shall have the meaning set forth in Section
2.1.3(b).

     

    “Expert” shall have
the meaning set forth in Section 5.3.2(b).

     

    “Exploit,” “Exploiting” or “Exploitation” shall
mean to develop, make, have made, use, sell, have sold, offer for sale, have
offered for sale, market, promote, distribute and import.  For
clarity, the performance of a Diagnostic Test shall constitute an Exploitation
thereof.

     

    “FDA” shall mean the
U.S. Food and Drug Administration of the U.S. Department of Health and Human
Services and any successor agencies.

     

    “FDA Act” shall mean
the United States Food, Drug and Cosmetic Act and applicable regulations
promulgated thereunder, as they may be amended or supplemented from time to
time, or an equivalent application under any successor laws or
regulations.

     

    “FDA Clearance” shall
mean any approval, certification or clearance that may be required at any time
during the Term by the FDA in connection with the marketing, offer for sale,
sale, performance, provision or transfer from one laboratory to another of any
Licensed Product.

     

    “Field” shall mean the
diagnosis of any disease or any human condition. For the purposes of this
definition, “diagnosis” shall mean use (a) where the medical management of a
human  is involved, for (i) the measurement, observation or
determination of (x) the presence of a human disease,
(y) the stage, progression or severity of a human disease, (z) the risk of
contracting a human disease, and/or (ii) the selection of patients for a
particular treatment with respect to a disease; and/or (b) in a clinical
laboratory for tracking, testing or quality controlling of human body fluids or
tissue samples; and/or (c) designated and regulated by the FDA as a diagnostic
test or analyte specific reagent, to the extent used according to (a) and/or (b)
above.

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    “Force Majeure Event”
shall mean any cause or contingency beyond a Party’s reasonable control,
including, strikes or other labor disturbances, lockouts, riots, quarantines,
communicable disease outbreaks, wars, acts of terrorism, fires, floods, storms,
or compliance with any order or regulation of any Regulatory Authority acting
within color of right and, for purposes of Section 3.2.6(a), any circumstances
caused by the other Party.

     

    “GAAP” shall mean
generally accepted accounting principles in the United States, consistently
applied.

     

    “HHMI” shall have the
meaning set forth in Section 2.5.2.

     

    “IBD Test” shall mean
a diagnostic test for the aggressiveness and predictive response to biologics in
patients with inflammatory bowel disease (IBD).

     

    “IBS Test” shall mean
a diagnostic test for the identification of irritable bowel syndrome (IBS)
subtypes IBS-d, IBS-c and IBS-a, as such subtypes are further defined by the
Committee in the course of the Development Program.

     

    “Improvements” shall
mean new improvements, discoveries, inventions, developments, enhancements,
updates to and new features of the Mets Software, derivative works, technology,
Technical Information and other intellectual property, whether or not patentable
or protectable, necessary or useful for the Exploitation of the Licensed
Products.

     

    “Indemnifying Party”
shall have the meaning set forth in Section 8.3.

     

    “Indemnitee” shall
have the meaning set forth in Section 8.3.

     

    “JHU” shall mean Johns
Hopkins University.

     

    “Joint Improvement”
shall have the meaning set forth in Section 3.3.2.

     

    “Law” shall mean any
federal, state (including the State of New York) or local law, statute or
ordinance, or any rule, regulation, or published final guidelines promulgated by
any governmental or regulatory authority, including the laws of the State of New
York, the laws of the State of Pennsylvania, the FDA Act, CLIA, and the College
of American Pathologists Accreditation 15189.

     

    “License” shall mean
the licenses set forth in Sections 2.1.1, 2.1.2 and 2.1.4 of this
Agreement.

     

    “Licensed Intellectual
Property” shall mean the Licensed Patents, the Product Technical
Information and the Mets Software.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    “Licensed Patents”
shall mean the Platform Patents and the Product Patents.

     

    “Licensed Process”
shall mean any process that, absent the License granted herein, would infringe a
Valid Claim.

     

    “Licensed Product”
shall mean any Diagnostic Test (a) the Exploitation of which, or of any process,
method, material, composition or assay used therein or for the performance
thereof, would infringe a Valid Claim but for the licenses granted herein, (b)
which was developed or manufactured using a Licensed Process, or (c) which
incorporates or is developed using Royalty-Bearing Technical
Information.

     

    “Limited Exclusive”
shall mean with respect to the License granted to Prometheus hereunder,
exclusive even as against Rosetta and its Affiliates, but subject to any
co-exclusivity terms and other retained rights of Upstream Licensors and their
licensees (other than Rosetta and its Affiliates) of the Upstream Licensed
Patents and/or any Upstream Licensed Technical Information.

     

    “Litigation Costs”
shall have the meaning set forth in Section 8.1.

     

    “Losses” shall have
the meaning set forth in Section 8.1.

     

    “Mesothelioma Test”
shall mean a diagnostic test for the differentiation of mesothelioma from
adenocarcinoma.

     

    “Mets Software” shall
mean the source code and object code forms of a certain software application
which contains, among other things, an algorithm created by or on behalf of
Rosetta for the purpose of processing the results of the Mets Test, in the forms
that such software exists as of the Effective Date, and any updates and
Improvements adopted by Rosetta for the Mets Test and distributed by Rosetta to
Prometheus during the Term.

     

     “Mets Test” shall mean
Rosetta’s current diagnostic test for the identification of the origin of the
primary tumor of metastases.

     

     “MGB Probe” shall mean certain
quantitative gene expression probe technology that, as of the Effective Date, is
commercialized and licensed out by Nanogen, Inc., or its licensees and used in
conjunction with the Real-Time PCR Technology in the performance of certain of
the Diagnostic Tests.

     

    “Modification Development
Period” shall have the meaning set forth in Section 5.3.2.

     

    “Mutual Confidentiality
Agreement” shall have the meaning set forth in Section
6.1.6.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 5
-

        
          

        

      

      
         

      

    

     

     

    “Net Sales” shall mean
for any period, the gross sales price or fee for performance of Licensed
Products sold or otherwise supplied or performed by Prometheus and/or its
Affiliates in the Prometheus Territory to Third Parties that are not Affiliates
and/or sublicensees of the selling party (unless any such Affiliate is the end
user of such Licensed Product, in which case the gross sales price therefore
shall be deemed to be the amount that would be billed to a Third Party in an
independent arm’s-length transaction) during such period, less the following
items, as allocable to such
Licensed Products:  (a) discounts, including cash and quantity
discounts, chargeback payments and rebates granted to managed healthcare
organizations or to federal, state or local governments (or their respective
agencies, purchasers and reimbursers) or to trade customers, in each case, as estimated
in accordance with Prometheus’ normal accounting procedures consistently
applied, (b) credits or refunds for claims, (c) freight, postage, shipping and
insurance charges actually allowed or paid for delivery of Licensed Products, to
the extent identified on the invoice, (d) taxes, duties or other governmental
charges (other than income taxes) levied on, absorbed or otherwise imposed on
sales of Licensed Products to the extent identified on the invoice, and (e) bad
debts in accordance with Prometheus’ normal accounting procedures consistently
applied.  Accordingly, such definition of Net Sales shall be
equivalent to net sales and bad debt expense as recorded on Prometheus’ (or its
Affiliates and/or sublicensees) books and accounting records in compliance with
GAAP, and, in the event that Prometheus becomes a publicly listed corporation,
consistent with Prometheus’ audited financial statements filed with the US
Securities and Exchange Commission.  For purposes of clarification, in
no event shall Licensed Products used by Prometheus in quality control testing
or distributed as free (at or below cost) research samples or charitable
contributions be included in calculating Net Sales.

     

    “Overall Time Period”
shall have the meaning set forth in Section 5.3.2.

     

    “Patent(s)” shall mean
(a) patents or patent applications; and (b) any divisionals, continuations,
substitutions, continuations-in-part, extensions, supplementary protection
certificates, renewals, re-examinations or reissues of such patents or
applications, as applicable.

     

    “Permitted Successor”
has the meaning set forth in Section 12.5.

     

    “Plan B Notice” shall
have the meaning set forth in Section 5.3.4.

     

    “Plan C Notice” shall
have the meaning set forth in Section 5.3.5.

     

    “Platform Improvement”
shall mean any Improvement which is covered by one or more claims of a Platform
Patent that is independently developed or otherwise acquired by Prometheus or
its Affiliates during the Term.  For the avoidance of doubt, an
Improvement microRNA sequence is excluded from the definition of Platform
Improvements unless such microRNA sequence is a specifically disclosed sequence
in the Platform Patents.

     

    “Platform Patent(s)”
shall mean all Patents in the Prometheus Territory now or in the future owned or
Controlled by Rosetta and/or its Affiliates that are necessary or useful for the
Exploitation of a Licensed Product and cover one or more compositions of matter
or technologies which can be used across two or more products, including but not
limited to (a) the Patents listed on Annex A-2 as may be
amended from time to time by the Parties; and (b) all Patents in the Prometheus
Territory (i) to which any of the Patents set forth on Annex A-2 claim
priority or (ii) for which any of the Patents on Annex A-2 form a
basis for priority, including any divisionals, continuations, substitutions,
continuations-in-part, extensions, renewals, re-examinations or reissues of such
Patents listed on Annex A-2, provided that Platform
Patents(s) shall not include the Excluded Acquisition Patents.  For
the avoidance of doubt, the Platform Patents include all composition of matter
claims directed to microRNAs within the Licensed Patents.

     

    “Potential Blocking
Patent” shall have the meaning set forth in Section 5.3.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 6
-

        
          

        

      

      
         

      

    

    “Proceeding” shall
mean any action, arbitration, audit (to the knowledge of such Party), hearing,
investigation (to the knowledge of such Party), litigation or suit (whether
civil, criminal, administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving any governmental entity
or arbitrator.

     

    “Product Improvement”
shall mean any Improvement which is covered by one or more claims of a Product
Patent that is independently developed or otherwise acquired by Prometheus or
its Affiliates during the Term.

     

    “Product Patent(s)”
shall mean all Patents in the Prometheus Territory now or in the future owned or
Controlled by Rosetta and/or its Affiliates that are necessary or useful for any
of the Diagnostic Tests and are specifically directed to one or more elements of
any of the Diagnostic Tests that are unique to such Diagnostic Test (as
contrasted to methods of performance in general of tests based on microRNAs or
composition of matter claims that are relevant to multiple indications),
including but not limited to (a) the Patents listed on Annex A-1 as may be
amended from time to time by the Parties; and (b) all Patents in the Prometheus
Territory (i) to which any of the Patents set forth on Annex A-1 claim
priority or (ii) for which any of the Patents on Annex A-1 form a
basis for priority, including any divisionals, continuations, substitutions,
continuations-in-part, extensions, renewals, re-examinations or reissues of such
Patents listed on Annex A-1, provided that Product
Patents(s) shall not include the Excluded Acquisition Patents or the Platform
Patents. For the avoidance of doubt, subject to Section 5.1.1(e), the Product
Patents include all methods of use claims directed to the use of microRNAs for
the indications that are the targets of the Diagnostic Tests, but exclude
all composition of matter claims directed to microRNAs.

     

    “Product Technical
Information” shall mean any Technical Information which is necessary or
useful to Exploit the Licensed Products in the Prometheus Territory and owned or
otherwise Controlled by Rosetta or any of its Affiliates as of the Effective
Date or during the Term, including Rosetta Improvements incorporated into the
Licensed Products, if any, but excluding any Excluded Acquisition Technical
Information and any Technical Information that is claimed or disclosed in the
Licensed Patents.

     

    “Prometheus” shall
have the meaning set forth in the Introduction.

     

    “Prometheus Confidential
Information” shall have the meaning set forth in Section
6.1.2.

     

    “Prometheus Development
Contribution” shall have the meaning set forth in Section
3.2.4.

     

    “Prometheus Product
Improvement” shall have the meaning set forth in Section
3.3.3.

     

    “Prometheus
Indemnitee” shall have the meaning set forth in Section 8.1.

     

    “Prometheus Territory”
shall mean the United States of America, including all of its territories,
commonwealths and possessions (including but not limited to Puerto Rico) and
military bases (provided that for military bases, the specimen required for the
performance of a Diagnostic Test is taken from a patient that is entitled to
treatment under a US military health plan, and is processed through military
channels, including such specimens collected by a civilian medical facility
under contract with the US military).

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    “PTO” shall have the
meaning set forth in Section 5.1.2.

     

    “Real-Time PCR
Technology” shall mean certain real-time polymerase chain reaction
technology that, as of the Effective Date, is commercialized and licensed out by
F. Hoffmann-La Roche Ltd (or its affiliates or its or their licensees) and used
in the performance of the Diagnostic Tests.

     

    “Regulatory Approval”
shall mean with respect to the Licensed Products or any Improvements thereto,
any clearance or approval required by a Regulatory Authority and any other
governmental clearances or approvals required in any jurisdiction in the
Prometheus Territory to Exploit such Licensed Products or Improvements thereto,
including any FDA Clearance.

     

    “Regulatory Authority”
shall mean any Federal (including, to the extent applicable, the FDA), State
(including the State of New York), or other governmental authority in the
Prometheus Territory which has asserted its right to regulate Exploitation of
the Licensed Products.

     

    “Regulatory Filing”
shall mean any filing with a Regulatory Authority relating to or to permit or
request, as applicable, the validation, clinical evaluation or Regulatory
Approval of a Licensed Product.

     

    “Repurchase Right”
shall have the meaning set forth in Section 2.1.6.

     

    “ROFN” shall have the
meaning set forth in Section 2.1.5.

     

    “ROFN Period” shall
have the meaning set forth in Section 2.1.5.

     

    “Rosetta” shall have
the meaning set forth in the Introduction.

     

    “Rosetta Confidential
Information” shall have the meaning set forth in Section
6.1.1.

     

    “Rosetta Improvement”
shall have the meaning set forth in Section 3.3.1.

     

    “Rosetta Indemnitee”
shall have the meaning set forth in Section 8.2.

     

    “Rosetta Owned Technical
Information” shall mean all Product Technical Information which is owned
by Rosetta and/or its Affiliates, excluding any Excluded Acquisition Technical
Information.

     

    “Rosetta Owned
Patents” shall mean all Licensed Patents which are owned by Rosetta
and/or its Affiliates other than the Excluded Acquisition Patents.

     

    “Royalty” shall have
the meaning set forth in Section 4.3.1.

     

    “Royalty-Bearing Technical
Information” shall mean any Upstream Licensed Technical Information
which, if incorporated into a Licensed Product or used in the development
thereof would result in a Royalty being payable to such Upstream
Licensor.  

     

    “Royalty Reporting
Quarter” shall have the meaning set forth in Section 4.5.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    “Second Generation Mets
Test” shall mean a version of the Mets Test to be developed under this
Agreement that is adapted to be performed using a microarray or another
alternative to the Real-Time PCR Technology and with the objective to include
(a) indications within cancer of unknown primary that are additional to those
targeted by the Mets Test, or (b) other enhancements to the Mets
Test.

     

    “Services” shall have
the meaning set forth in the Services Agreement.

     

    “Services Agreement”
shall mean that certain laboratory services agreement, attached hereto as Annex C, to be
entered into by the Parties at the Closing.

     

    “Services Agreement
Profits” shall mean, with respect to each Diagnostic Test performed on
Prometheus’ behalf as part of the Services, the actual amount received by
Rosetta from Prometheus and/or its Affiliates for the performance of such
Diagnostic Test less the applicable cost of goods (inclusive of reasonable
overhead which shall be no more than [***] of the total costs of goods) for
performing such Diagnostic Test specified in Annex D.

     

    “Significant Direct
Competitor” shall mean any microRNA diagnostic-based product which
competes directly with a Diagnostic Test and that tests for the same indication
that is the target of such Diagnostic Test.

     

    “Specified Diagnostics
Rights” shall have the meaning set forth in Section 2.1.5.

     

    “Squamous Test” shall
mean a diagnostic test for the differentiation of squamous from non-squamous
non-small cell lung caner.

     

    “Sublicense” shall
have the meaning set forth in Section 2.2.

     

    “Sublicensee” shall
mean any person or entity other than an Affiliate of Prometheus that is granted
a Sublicense by Prometheus.

     

    “Technical
Information” shall mean any and all information and materials, including,
but not limited to, discoveries, improvements, processes, algorithms (but
excluding specific software that implements such algorithms and which is
otherwise licensed under Section 2.1.4), methods, protocols, formulas, data,
inventions (including without limitation information and inventions contained in
the Licensed Patents), know-how and trade secrets, whether or not patentable or
protectable.

     

    “Term” shall have the
meaning set forth in Section 9.1.

     

    “Third Party” shall
mean any person or entity other than Rosetta, Prometheus, or their Affiliates or
any Sublicensee of Prometheus.

     

    “Third Party License
Negotiation Period” shall have the meaning set forth in Section
5.3.2.

     

    “Third Party Royalty
Cap” shall mean:

     

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 9
-

        
          

        

      

      
        
        

      

    

     

     

    (a) with
respect to Licensed Products other than the IBS Test or IBD Test, an amount
equivalent to [***] of Net Sales; provided that: (i) if no further consideration
is required to be paid for
the Real-Time PCR Technology, then the Third Party Royalty Cap shall mean an
amount equivalent to [***] of Net Sales, (ii) if no further consideration is
required to be paid for MGB Probes, then the Third Party Royalty Cap shall mean
an amount equivalent to [***] of Net Sales, and (iii) if no further
consideration is required to be paid pursuant to either the Real-Time PCR
Technology or the MGB Probes, then the Third Party Royalty Cap shall mean an
amount equivalent to [***] of Net Sales;

     

    (b) with
respect to the IBS Test and IBD Tests only, an amount equivalent to [***] of Net
Sales; provided that: (i) if no further consideration is required to be paid for
the Real-Time PCR Technology, then the Third Party Royalty Cap shall mean an
amount equivalent to [***] of Net Sales, (ii) if no further consideration is
required to be paid for MGB Probes, then the Third Party Royalty Cap shall mean
an amount equivalent to [***] of Net Sales, and (iii) if no further
consideration is required to be paid pursuant to either the Real-Time PCR
Technology or the MGB Probes, then the Third Party Royalty Cap shall mean an
amount equivalent to [***] of Net Sales, provided that;

     

    (c)
notwithstanding anything herein, in the event that the IBS Test or the IBD Test
includes microRNAs licensed under the JHU Agreement, the Third Party Royalty Cap
applied to such Licensed Product shall be increased by an amount equivalent to
[***] of Net Sales.

     

    “THM” shall mean Tel
Hashomer Medical Research Infrastructure and Services Ltd.

     

    “Up-Front Stock
Issuance” shall have the meaning set forth in Section 4.1.

     

    “Upstream License
Agreement” shall mean, subject to Section 2.6, any license agreements
between Rosetta and a Third Party pursuant to which certain Licensed
Intellectual Property Controlled by Rosetta is licensed to Rosetta by such Third
Party, as may be amended from time to time, including but not limited to the
following: (a) License Agreement between Garching Innovation GmbH and Rosetta,
dated June 30, 2006 (the “Max Planck
Agreement”); (b) Diagnostic License Agreement between The Rockefeller
University and Rosetta, dated May 4, 2006 (the “Rockefeller
Agreement”); (c) Amended and Restated Research Collaboration Agreement
between Tel Hashomer Medical Research Infrastructure and Services Ltd and
Rosetta, dated June 30, 2008 (the “THM Agreement”), and,
if and to the extent that the Committee determines by a unanimous, formal
decision documented in writing that the Second Generation Mets Test will include
any microRNAs subject thereto, the (d) Exclusive License Agreement between Johns
Hopkins University and Rosetta, dated August 2, 2006 (the “JHU Agreement”).
 Notwithstanding
the foregoing, the Upstream License Agreements exclude any Commercial Technology
Platform agreements.

     

    “Upstream Licensed
Patent” means a Licensed Patent Controlled but not owned by Rosetta that
is licensed to Rosetta pursuant to an Upstream License Agreement.

     

     “Upstream Licensed Technical
Information” shall mean all Product Technical Information Controlled but
not owned by Rosetta that is licensed to Rosetta pursuant to the Upstream
License Agreements.

     

    “Upstream Licensor”
shall mean each of the licensors pursuant to the Upstream License
Agreements.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    “Valid Claim” shall
mean either (a) a claim in an issued Patent included within the Licensed
Patents, which claim has not lapsed, been revoked, cancelled or become abandoned
and has not been declared invalid, unpatentable or unenforceable by any
unreversed decision or judgment of a court or other body of competent
jurisdiction, and which has not been admitted to be invalid or unenforceable
through reissue, disclaimer, settlement or otherwise, or (b) a claim of a
pending Patent application included in the Licensed Patents, which claim has not
been abandoned or disallowed and has been pending for less than seven (7) years
from the date such claim was filed with the PTO and has not been cancelled,
withdrawn from consideration, denied or abandoned.  Notwithstanding
the foregoing, in the case of a claim within any Upstream Licensed Patent, the
definition of “Valid Claim” with respect to each such claim shall be the
definition thereof set forth in the applicable Upstream License
Agreement.

     

    “Validation
Subcommittee” shall have the meaning set forth in Section
3.1.6.

     

    1.1.1           Unless
the context of this Agreement otherwise requires:  (a) words of any
gender include each other gender; (b) words using the singular or plural number
also include the plural or singular number, respectively; (c) the terms
“hereof,” “herein,” “hereby,” and derivative or similar towards refer to this
entire Agreement; (d) the terms “Section” or “Annex” refer to the specified
Section or Annex of this Agreement; (e) the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase, “and/or”;
(f) the term “including” means “including, without limitation”; (g) “days”
refers to calendar days; and (h) the term “not to unreasonably withhold
approval” includes not to unreasonably delay or condition such approval. All
accounting terms used but not otherwise defined herein shall have the meanings
ascribed to such terms under GAAP.  All references to “$” amounts
hereunder shall be deemed to be U.S. Dollars, and all payments due hereunder
shall be made in U.S. Dollars.  All reference to the “knowledge” of
Rosetta means the actual knowledge of the following executive officers and key
employees of the Company or any successors to their positions: Yoav Chelouche,
Amir Avniel, Limor Zur Stoller, Dalia Cohen, Ph.D., Ronen Tamir, Ranit Aharonov
Gal, Ph.D., Ayelet Chajut, Ph.D., Tami Fishman Jutkowitz and Tzipora Shoshani
Kofitz, Ph.D., after conducting a reasonable investigation of the subject matter
thereof, and each statement will be deemed to include a representation that such
investigation has been conducted.  For the avoidance of doubt, Rosetta
shall not be required to obtain any freedom to operate opinions in order to meet
the standard of having conducted a “reasonable investigation.”

     

    
      	
              2.

            	
              GRANT
      OF RIGHTS; NON-COMPETE

            

    

     

    2.1           Licenses.

     

    2.1.1           Patent License. Subject to the terms
and conditions set forth herein, Rosetta on behalf of itself and its Affiliates
hereby grants to Prometheus and, subject to Section 2.1.8, Prometheus’
Affiliates, a Limited Exclusive, sublicensable (in accordance with Section 2.2),
royalty-bearing (in accordance with Section 4) license under the Licensed
Patents to Exploit the Licensed Products in the Field in the Prometheus
Territory during the Term through any and all means and channels of distribution
now known or hereinafter discovered.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 11
-

        
          

        

      

      
        
        

      

    

     

    2.1.2           Technical Information
License.  Subject to the
terms and conditions set forth herein, Rosetta on behalf of itself and its
Affiliates hereby grants to Prometheus and, subject to Section 2.1.8,
Prometheus’ Affiliates, a Limited Exclusive, sublicensable (in accordance with
Section 2.2), royalty-bearing (in accordance with Section 4) license under
Rosetta’s intellectual property rights in the Product Technical Information to
Exploit the Licensed Products in the Field in the Prometheus Territory during
the Term through any and all means and channels of distribution now known or
hereinafter discovered.

     

    2.1.3           Restrictions on Use of
Specimens.

     

    (a)           Prometheus
agrees and acknowledges that, notwithstanding the License granted to it pursuant
to Sections 2.1.1, 2.1.2 and 2.1.4, Prometheus, its Affiliates and its
Sublicensees shall not knowingly (after using Commercially Reasonable Efforts to
determine the same) conduct Diagnostic Tests using specimens that were initially
collected from patients at a facility outside the Prometheus
Territory.

     

    (b)           Subject
to Section 2.2, Rosetta agrees and acknowledges that during the Term, it and its
Affiliates shall not knowingly (after using Commercially Reasonable Efforts to
determine the same), except for the benefit of Prometheus, nor shall it or its
Affiliates grant any Third Party the right to, conduct Diagnostic Tests using
specimens that were initially collected from patients at a facility inside the
Prometheus Territory, except in connection with a collaboration or other
research agreement between Rosetta or its Affiliates and an academic or other
not-for-profit research institution, which collaboration or other agreement (i)
was entered into prior to the Execution Date of this Agreement and listed on
Annex F (the
“Existing Research
Agreements”), or (ii) is with an academic or other not-for-profit
research institution located inside or outside the Prometheus Territory and has
been approved by Prometheus via the Committee.

     

    (c)           The
parties shall use Commercially Reasonable Efforts to work together to ensure
that the intent of the restrictions set forth in this Section 2.1.3 are adhered
to.  Prometheus shall be solely responsible for providing instructions
to US military bases and civilian hospitals that contract with such bases with
respect to the processing through military channels of the specimens collected
from a patient that is entitled to treatment under a US military health
plan.  Notwithstanding anything herein, neither Rosetta nor its
licensees or distributors shall have any liability to Prometheus arising from
Rosetta’s, its licensees’ or distributors’ processing of a sample that is
initially obtained outside the Prometheus Territory through US military channels
and that is mistakenly sent to Rosetta, its licensees or
distributors.

     

    2.1.4           Software
License.  Subject to the terms and conditions set forth herein,
Rosetta on behalf of itself and its Affiliates hereby grants to Prometheus and,
subject to Section 2.1.8, Prometheus’ Affiliates, a non-exclusive, sublicensable
(in accordance with Section 2.2), royalty-free license under Rosetta’s
intellectual property rights in the Mets Software to install on an unlimited
number of computers and/or servers and have an unlimited number of end users
execute, use, perform, and display the Mets Software solely for the purpose of
performing a Mets Test in the Field in the Prometheus Territory during the
Term.  Prometheus shall comply with Sections 2.1.4(a), (b) and (c),
and shall impose substantially equivalent restrictions on any of its Affiliates
or Sublicensees to which Prometheus provides the Mets Software:

     

    (a)           Prometheus
and its Affiliates may make a reasonable number of copies of the Mets Software
as necessary for installation, use and back-up, disaster recovery and archival
purposes, provided that, in connection with any copy of the Mets Software,
Prometheus reproduces all confidentiality
and proprietary notices on such copies. Prometheus shall have the right to
modify (directly or through a Third Party software developer subject to a
reasonable confidentiality agreement) the Mets Software, provided that it
promptly provides a copy of such modifications (in object and source code form)
and any documentation relating thereto to Rosetta, grants Rosetta a perpetual,
worldwide, royalty-free, fully paid up, sublicensable license to Exploit such
modifications in conjunction with the Mets Software, and in the case of
modifications to the Mets Software made by a Third Party software developer on
Prometheus’ behalf, obtains from such Third Party an assignment to Prometheus or
a Prometheus Affiliate of all intellectual property rights that such Third Party
may have in such modifications.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 12
-

        
          

        

      

      
        
        

      

    

     

    (b)           Prometheus
and its Affiliates will not distribute, provide or otherwise make the Mets
Software available to any Third Party (other than Sublicensees subject to
Section 2.2, Third Parties performing software development services on
Prometheus’ behalf, and Third Party backup or disaster recovery service
providers subject to reasonable confidentiality and non-use restrictions), in
whole or in part, through any medium or process.

     

    (c)           Rosetta
shall use Commercially Reasonable Efforts during Israeli business hours to
provide via telephone to an appropriately skilled member of Prometheus’
information technology support department, (i) initial training and guidance
regarding the installation, implementation, configuration, use and operation of
the Mets Software (excluding any modifications thereto made by Prometheus), and
(ii) a reasonable amount of ongoing consultation regarding specific problems
encountered by Prometheus or its Affiliates or Sublicensees that Prometheus is
unable to address by consulting the Mets Software documentation supplied by
Rosetta.  Prometheus shall be solely responsible for providing any
further internal training or support required by it, its Affiliates or its
Sublicensees.

     

    (d)           Rosetta
shall provide up to [***] hours of work, using no more than [***] of its
internal resources, to modify the Mets Software as reasonably requested by
Prometheus.  In addition, Rosetta shall use good-faith efforts, using
its then-existing internal resources, to attempt to correct defects in the Mets
Software upon receipt of Prometheus’ written request and a reasonably detailed
description of the defect, but excluding any defect in or arising from any
modifications to the Mets Software made by Prometheus or its Third Party
software developers.  Notwithstanding anything herein, Rosetta does
not guarantee that it will be able to correct and shall have no obligation to
correct defects in the Mets Software or to make Improvements to the Mets
Software.

     

    (e)           Prometheus
acknowledges that the Mets Software is provided strictly on an “as-is” basis
with no warranty of any kind.  TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, ROSETTA DISCLAIMS ALL WARRANTIES WITH RESPECT TO THE METS
SOFTWARE, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, THAT THE METS SOFTWARE WILL
OPERATE UNINTERRUPTED OR BE FREE FROM DEFECTS, OR THAT IT WILL MEET PROMETHEUS’
REQUIREMENTS.  Rosetta acknowledges that any modifications to the Mets
Software provided by Prometheus pursuant to Section 2.1.4(a) is provided
strictly on an “as-is” basis with no warranty of any kind.  TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, PROMETHEUS DISCLAIMS ALL WARRANTIES
WITH RESPECT TO ANY SUCH MODIFICATIONS TO THE METS SOFTWARE, WHETHER EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, THAT THE
MODIFICATIONS TO THE METS SOFTWARE WILL OPERATE UNINTERRUPTED OR BE FREE FROM
DEFECTS, OR THAT IT WILL MEET ROSETTA’S REQUIREMENTS.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 13
-

        
          

        

      

      
        
        

      

    

     

    (f)           If
Rosetta provides any software (in addition to the Mets Software and Improvements
thereto) to Prometheus during the Term, such software shall be deemed to be
licensed to Prometheus on the terms and conditions (mutatis mutandis) set forth
in Section 2.14 unless otherwise agreed in writing by the Parties.

     

    2.1.5           Right of First Negotiation
for Specified Diagnostics Rights. Rosetta hereby grants to
Prometheus a right of first negotiation (“ROFN”) to acquire or
license from Rosetta rights to the following diagnostic tests or programs under
development by Rosetta: (a) colorectal cancer prognosis regarding the risk of
reoccurrence, (b) ovarian cancer responsiveness to carboplatin, and (c) lung
cancer diagnostic tests regarding small cell versus non-small cell lung cancer
(collectively, the “Specified Diagnostics
Rights”).  In the event that Rosetta proposes to sell, license,
offer for sale, offer for license or agree to sell or license any of its Patent
rights or assets relating to the Specified Diagnostic Rights (other than as part
of a single disposition of all or substantially all of Rosetta’s assets, which
for the avoidance of doubt must include all of Rosetta’s rights in the Licensed
Products), and prior to Rosetta offering such Patent rights or assets for sale,
it shall first provide Prometheus with (a) a summary of all material economic
and financial terms upon which such Specified Diagnostic Rights are available
(such terms to be commercially reasonable and provided by Rosetta to Prometheus
in good faith), and (b) a period of [***] to negotiate with Rosetta with respect
to a definitive agreement for an acquisition or license of the offered Patent
rights and/or assets (the “ROFN Period”). During
the ROFN Period, Rosetta shall not negotiate with or enter into any definitive
agreement with any Third Party regarding the applicable Specified Diagnostic
Rights.  In the event that the Parties do not agree, after using good
faith efforts, to definitive terms within such ROFN Period, then solely with
respect to such Specified Diagnostic Rights, Rosetta shall be free to sell or
license the applicable Specified Diagnostics Rights to a Third Party on either
(a) if less than [***] from the time initially offered to Prometheus in
accordance with this Section 2.1.5, terms not (i) less favorable than the terms
last offered by Prometheus to Rosetta in writing prior to the expiration of the
ROFN Period nor (ii) more favorable than those offered by Rosetta to Prometheus
in writing prior to the expiration of the ROFN Period, or (b) if more than [***]
after the time initially offered to Prometheus, on any terms which Rosetta so
desires.  If Rosetta has provided Prometheus with at least one (1)
written offer proposing terms for Prometheus’ acquisition of the Specified
Diagnostic Rights and Prometheus has
rejected such offer and declined to make any other written offer during the ROFN
Period, Rosetta shall be relieved of all obligations under this Section 2.1.5
upon the expiry of the ROFN Period. For the avoidance of doubt, (a) the ROFN
shall not apply to Rosetta’s or its Affiliates’ own development or
commercialization of the Specified Diagnostic Rights, and (b) neither Rosetta
nor its Affiliates shall have any obligation to research or develop any of the
Specified Diagnostic Rights, which activities shall be at Rosetta’s sole
discretion.

     

    2.1.6           Repurchase
Right.  Except
to the extent covered by a Force Majeure Event or Rosetta’s failure to comply
with its obligations under this Agreement, subject to the terms and conditions
of this Agreement and compliance therewith by Rosetta, Rosetta shall have the
right to repurchase from Prometheus (in accordance with the terms hereof) and
terminate the License if Net Sales of the Licensed Products by Prometheus and/or
its Affiliates for the entire 2013 calendar year are less than [***] US dollars
[***] in the aggregate (the “Repurchase Right”).
Rosetta may elect to exercise such Repurchase Right by (a) providing written
notice to Prometheus within thirty (30) days of Prometheus’ notification to
Rosetta of the Royalties earned for the fourth (4th)
calendar quarter of the 2013 calendar year, and (b) payment to Prometheus of an
amount equal to [***] the aggregate Net Sales for the 2013 calendar year within
five (5) business days of such election.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 14
-

        
          

        

      

      
        
        

      

    

     

    2.1.7           Retained
Rights.  Notwithstanding
the licenses granted in Sections 2.1.1, 2.1.2 and 2.1.4, Rosetta retains the
right for itself and its Affiliates under the Licensed Intellectual Property in
the Prometheus Territory (a) to provide the Services pursuant to the Services
Agreement for such period as Rosetta has any obligations to provide Services
thereunder; (b) to conduct Diagnostic Tests or perform in the Prometheus
Territory on a non-commercial, pre-commercial or non-clinical basis any validation studies
or other support for research and development, in each case consistent with, and
as limited by, Section 2.1.3(b); and (c) to conduct Diagnostic Tests on a
commercial basis at its laboratory facilities located inside the Prometheus
Territory using specimens initially collected from patients at a facility
located outside the Prometheus Territory.

     

    2.1.8           Prometheus
Affiliates.  In
the event that Prometheus wishes any of its Affiliates to benefit from the
licenses granted in Sections 2.1.1, 2.1.2 or 2.1.4 , Prometheus shall (a) notify
Rosetta in writing of such fact and provide Rosetta with the full name and
primary business address of the relevant Affiliate, and (b) require such
Affiliate to confirm in writing to Rosetta that it has read and will comply with
the following Articles and Sections of this Agreement, mutatis
mutandis:  2.1.1, 2.1.2, 2.1.3, 2.1.4, 2.1.9, 2.4.2, 2.5,
3.3.3, 3.3.4, 6 and 12.2, and all definitions used in the
foregoing.  Any breach by a Prometheus Affiliate of the foregoing
provisions shall be deemed to be a breach by Prometheus. In no event shall any
Prometheus Affiliate have the right to grant sublicenses or assign its rights
hereunder.  Except as otherwise set forth in Section 8.1, neither
Rosetta nor Prometheus intend that Rosetta shall have any contractual liability
directly with any Prometheus Affiliate in connection with this Agreement, but in
the event that such direct contractual liability may nonetheless arise (other
than pursuant to Section 8.1), Article 10 shall apply thereto.  Any
license granted hereunder to a Prometheus Affiliate shall terminate immediately
and automatically if such entity ceases to qualify under the definition of
“Affiliate” provided in Article 1.

     

    2.1.9           No Implied
Licenses.  For
the avoidance of doubt, the License excludes any Exploitation of the Licensed
Intellectual Property for the research or development of any products or
services other than the Licensed Products or for general research or development
of microRNA technology that is not specifically related to the Licensed
Products.  Without limiting the foregoing, no right or license, either
express or implied, is granted hereunder by implication, estoppel or otherwise,
with respect to any Patent, trade secret, know-how, other information or
intellectual property rights of either Party or its licensors except as
expressly stated in this Agreement.

     

    2.2           Right to
Sublicense.

     

    2.2.1           Prometheus
shall have the right to grant sublicenses (individually, a “Sublicense”) under
the License solely to Third Party laboratories solely for the purposes of such
laboratories conducting the Diagnostic Tests for Prometheus, subject at all
times to the consent of any applicable
Upstream Licensors if and only if such consent is required pursuant to the
Upstream License Agreements.  Prior to receipt of any Rosetta
Confidential Information, each such Sublicensee shall enter into a
confidentiality agreement with Rosetta in a form reasonably acceptable to
Rosetta. Any such Sublicensee shall be required by Prometheus to comply with the
applicable restrictions set forth in this Agreement with respect to (a) the
rights granted to the Licensed Intellectual Property and restrictions on the use
thereof, including Section 2.5, and (b) Rosetta Confidential
Information.  For the avoidance of doubt, (i) Prometheus shall have no
right to grant sublicenses under the License except to Sublicensees as set forth
in this Section 2.2.1, and (ii) Sublicensees shall have no right to sell
Diagnostic Tests (or to charge for the performance thereof) to customers, end
users or any intermediary other than Prometheus and/or its
Affiliates.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 15
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    2.3           Ongoing Disclosure and
Delivery of Licensed Intellectual Property.

     

    2.3.1           Rosetta
shall provide Prometheus with copies of any Patents that become Rosetta Owned
Patents at any time during the Term.  Rosetta shall provide Prometheus
with copies of any Patents that Rosetta is aware have become Upstream Licensed
Patents at any time during the Term.

     

    2.3.2           Within
thirty (30) days following the Effective Date, Rosetta shall promptly provide
Prometheus with object code and source code copies (both in print and, where
available, electronic copies) of the Mets Software and documentation therefor in
the form it exists at such time.  If Rosetta makes or otherwise
acquires Control of any Improvements to the Mets Software during the Term,
Rosetta shall notify Prometheus of the existence of such Improvement and shall
supply Improvements to Prometheus, free of charge, upon written
request.

     

    2.3.3           Within
thirty (30) days following the Effective Date, Rosetta shall promptly disclose
to Prometheus and provide Prometheus with copies (both in print and, where
available, electronic copies) of the Product Technical Information necessary to
Exploit the Diagnostic Test and existing as of the Effective Date in English and
in sufficient detail in order for a reasonably-skilled person to practice and
Exploit such Product Technical Information.  Rosetta shall update the
Product Technical Information previously transferred to Prometheus on a frequent
and regular basis, including in connection with all Committee meetings or at any
time upon Prometheus’ request and, in any case, not to exceed thirty (30)
calendar days following the acquisition or creation by Rosetta of any additional
Product Technical Information or Improvements to the Product Technical
Information.  Without limiting the foregoing, such transfer of Product
Technical Information shall include:

     

    (a)           transfer
of copies of the results of and data from any studies conducted prior to and as
of the Effective Date relating to the Licensed Products (including all
regulatory information, clinical data, training and validation data, hard-copy
case report forms and reports to the extent disclosure thereof to Prometheus is
not prohibited by applicable Laws or regulations outside the Prometheus
Territory);

     

    (b)           transfer
of copies of any written communications with any Regulatory Authorities in the
Prometheus Territory and any relevant written communications with other
Regulatory Authorities, and the minutes of any meetings with any such Regulatory
Authority, in each case relating to the Licensed Products; and

     

    (c)           providing
Prometheus with reasonable access to Rosetta personnel (through, or directly as
approved by, Rosetta’s senior management) with relevant clinical, validation and
regulatory expertise to explain the Product Technical Information transferred
hereunder.

     

    For the
avoidance of doubt, and notwithstanding the foregoing, it is anticipated that
any data to be transferred from Rosetta to Prometheus will be anonymous or
de-identified and not personal data within the meaning of applicable data
protection Laws.  In the event that any such transferred data is
deemed to be or constitutes personal data, the Parties will collaborate to
comply with such Laws, including obtaining exemptions therefrom or constructing
cross-border transfer solutions.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 16
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    2.4           Non-Compete in Prometheus
Territory.

     

    2.4.1            By
Rosetta.  During the Term of this Agreement, neither Rosetta
nor any of its Affiliates shall, directly or indirectly, Exploit a Significant
Direct Competitor in the Prometheus Territory or  assist, transfer or
license rights to any business that Rosetta knows intends to use such assistance
or rights to Exploit a Significant Direct Competitor in the Prometheus
Territory.  Each of the Parties hereto recognizes that the
restrictions contained in, and the terms of, this Section 2.4.1 are properly
required for the adequate protection of Prometheus’ rights hereunder, and agree
that if any provision in this Section 2.4.1 is determined by any court to be
unenforceable by reason of its extending for too great a period of time or over
too great a geographic area, or by reason of its being too extensive in any
other respect, such covenant shall be interpreted to extend only for the longest
period of time and over the greatest geographic area, and to otherwise have the
broadest application as shall be enforceable.  [***].  If
Rosetta or any of its Affiliates are acquired by or merge with a Third Party
that has a Significant Direct Competitor, neither Rosetta nor any of its
Affiliates will have any obligations under this Section 2.4.1 with respect to
such Significant Direct Competitor; provided that the division, subsidiary or
business group of the surviving party in such change of control that pursues
such Significant Direct Competitor shall not have access to, and shall not refer
to, rely upon or use in any manner, the Licensed Intellectual Property with
respect to such Significant Direct Competitor.

     

    2.4.2           By
Prometheus.  During the Term of this Agreement, neither
Prometheus nor any of its Affiliates shall, directly or indirectly, Exploit a
Significant Direct Competitor that is not a Licensed Product in the Prometheus
Territory, or otherwise assist or transfer or license rights to any business
that Prometheus knows intends to use such assistance or rights to Exploit a
Significant Direct Competitor in the Prometheus Territory.  Each of
the Parties hereto recognizes that the restrictions contained in, and the terms
of, this Section 2.4.2 are properly required for the adequate protection of
Rosetta’s rights hereunder, and agree that if any provision in this Section
2.4.2 is determined by any court to be unenforceable by reason of its extending
for too great a period of time or over too great a geographic area, or by reason
of its being too extensive in any other respect, such covenant shall be
interpreted to extend only for the longest period of time and over the greatest
geographic area, and to otherwise have the broadest application as shall be
enforceable.  [***].  If Prometheus or any of its Affiliates
are acquired by or merge with a Third Party that has a Significant Direct
Competitor that is not a Licensed Product, neither Prometheus nor any of its
Affiliates will have any obligations under this Section 2.4.2 with respect to
such Significant Direct Competitor; provided that the division, subsidiary or
business group of the surviving party in such change of control that pursues
such Significant Direct Competitor shall not have access to, and shall not refer
to, rely upon or use in any manner, the Licensed Intellectual Property with
respect to such Significant Direct Competitor, except with Rosetta’s prior
written consent and on the condition that such Significant Direct Competitor be
treated as a Licensed Product hereunder.

     

    2.5    Compliance with Upstream License
Agreements.

     

    2.5.1           Prometheus
acknowledges its receipt prior to the Effective Date of copies of the Max Planck
Agreement, Rockefeller Agreement, THM Agreement and JHU
Agreement.  Prometheus agrees to accept and comply, and to ensure that
its Sublicensees and any Affiliates that receive the benefits of the Licenses
accept and comply, with the following:

     

    (a)           Sections
3.2, 4.2, 4.3, 4.5, 4.6, 5.5 and 8 of the Max Planck Agreement.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 17
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    (b)           All
terms and conditions of the Rockefeller Agreement except for Rosetta’s payment
and reporting obligations.

     

    (c)           Article
8 of the THM Agreement.

     

    (d)           Prometheus
agrees that neither it nor its Affiliates or Sublicensees shall have any claims
and/or demands of whatever type and nature against THM or its Affiliates,
including in the event of termination of the THM Agreement by THM according to
its terms.

     

    (e)           Prometheus
acknowledges and accepts that, subject to the direct license to be provided by
THM to Prometheus pursuant to that certain letter agreement to be executed by
Rosetta, THM and Prometheus on or before the Closing, the sublicense of THM’s
rights under Sections 2.1.1 and 2.1.2 hereof shall expire automatically upon the
termination of the THM Agreement for any reason, provided that, THM’s
termination of such sublicense license shall in no way affect any Co-Exclusive
rights Prometheus may have obtained or obtain in the future by virtue of
Rosetta’s joint ownership to inventions which were developed under the THM
Agreement.

     

    2.5.2           In
the event that the Committee determines by a unanimous, formal decision
documented in writing that any microRNAs that are subject to the JHU Agreement
will be included in the Second Generation Mets Test (which determination shall
automatically result in the JHU Agreement becoming an Upstream License Agreement
hereunder), the following terms and conditions shall apply (mutatis mutandis) effective
as of the date of such determination:

     

    (a)           The
terms and conditions of the JHU Agreement are hereby incorporated by reference,
including the terms and conditions reproduced in Annex G to this
Agreement.

     

    (b)           JHU
and Howard Hughes Medical Institute (“HHMI”) shall be
deemed to be third party beneficiaries of the obligations of Prometheus
hereunder without imposition of obligation or liability on the part of JHU, HHMI
or their Inventors (as defined in the JHU Agreement) to Prometheus.

     

    Prior to
a final determination by the Committee that any microRNAs that are subject to
the JHU Agreement will be included in the Second Generation Mets Test, Rosetta
shall use Commercially Reasonable Efforts to procure JHU’s consent to an
amendment to the JHU Agreement that (at a minimum) expressly relieves Prometheus
and its Affiliates of any obligation with respect to Rosetta’s payment and
reporting obligations under the JHU Agreement that might otherwise be deemed to
apply to Prometheus or its Affiliates as a consequence of Section
2.5.2(a).

     

    2.6           After-acquired
Rights.  In
order for an Upstream License Agreement entered into by Rosetta after the
Effective Date to be deemed to be Controlled by Rosetta, Prometheus also must
first accept in writing any obligations thereunder that are required by the
Upstream Licensor to be imposed upon sublicensees (other than Rosetta’s own
payment and reporting obligations) as a condition of the grant of a sublicense
thereunder.   Rosetta will use Commercially Reasonable Efforts to
avoid the inclusion in an Upstream License Agreement entered into after the
Effective Date of any term or condition that would require Prometheus or its
Affiliates to make payments or supply reports directly to the Upstream
Licensor.  Notwithstanding the foregoing, any technology covered by
the rights licensed to Rosetta under such future Upstream License Agreements
shall only be incorporated into the Licensed Products in accordance with Section
3.3.1 and the sections cross referenced therein.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 18
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              3.

            	
              DEVELOPMENT
      AND COMMERCIALIZATION MATTERS

            

    

     

    3.1           Development Oversight
Committee

     

    3.1.1           General.  To
facilitate communication between the Parties with respect to the development of
the Licensed Products in the Prometheus Territory, each Party will assign three
(3) of its employees to serve as regular members of the Development Oversight
Committee (the “Committee”).  Each
Party may replace its Committee representatives at any time upon prior written
notice to the other Party.  Prometheus shall have the right to
designate the chairperson of the Committee.  Each Party shall
designate one of its three (3) Committee representatives as the alliance manager
(the “Alliance
Manager”) for such Party.  Each Alliance Manager shall be
responsible for assuring that his or her company is meeting the operating
obligations of this Agreement and for monitoring the overall performance of the
operating relationship.

     

    3.1.2           Meetings.  Unless
otherwise agreed between the Parties, the Committee shall meet in person or via
teleconference or video link at least quarterly, on such dates and at such times
and places as agreed to by the Committee representatives.  Each
Party’s advisors may be permitted to attend meetings of the Committee as the
Committee determines, subject to such advisors agreeing to keep confidential the
subject matter of, and any confidential information disclosed by the other Party
at, such meeting.  Each Party shall be responsible for its own
expenses for participating in the Committee.  Meetings of the
Committee shall be effective only if at least one (1) representative of each
Party is present or participating.  The Committee chairperson shall be
responsible for (a) preparing and circulating an agenda for each meeting at a
reasonable time prior to the meeting (which agenda shall include any item
considered important by either Party), and (b) appointing a secretary for such
meeting from one of the attendees of such meeting who shall be responsible for
the preparation and circulation of minutes of the meeting within a reasonable
time of its conclusion.

     

    3.1.3           Responsibilities.  The
Committee shall have the responsibility and authority to:

     

    (a)           Advise
on the development and any Regulatory Approvals of the Licensed Products in the
Prometheus Territory;

     

    (b)           Review
any proposed amendments or updates to the Development Plan, subject to Section
3.1.4;

     

    (c)           Allocate
between the Parties responsibility for activities and completion dates under the
Development Plan;

     

    (d)           Monitor
the development of the Licensed Products in the Prometheus Territory against the
Development Plan;

     

    (e)           Discuss
and make decisions regarding the findings of the Clinical Development
Subcommittee and the Validation Subcommittee relating to clinical development
and validation of the Licensed Products;

     

    (f)           Subject
to any confidentiality obligations that Rosetta may have to any Third Party,
discuss and advise upon all development, regulatory and commercialization
activities outside the Prometheus Territory which may have an impact on the
Exploitation of the Licensed Products inside the Prometheus
Territory;

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 19
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    (g)           Discuss
and consider any Improvements to any Licensed Products (including the Mets
Software);

     

    (h)           Determine
whether any microRNAs that are subject to the JHU Agreement will be included in
the Second Generation Mets Test; and

     

    (i)           Perform
such other functions as the Parties may agree in writing.

     

    3.1.4           Decision
Making.

     

    (a)           The
Parties shall have joint decision making authority with respect to all matters
pertaining to the development of the Licensed Products inside the Prometheus
Territory that would affect the Licensed Products outside the Prometheus
Territory, which Prometheus acknowledges could potentially include certain
regulatory matters and changes to the Development Plan.  Except as set
forth in the preceding sentence or in Sections 4.4.2 or 5, as between the
Parties, Prometheus shall retain final decision-making authority with respect to
all matters pertaining to the Licensed Products inside the Prometheus
Territory, including development, regulatory and commercialization strategy and
changes to the Development Plan.  For clarification purposes, the
Parties agree that the Development Plan shall be modified as necessary from time
to time to include all activities and deliverables by each of the Parties
necessary to adequately meet the requirements for obtaining any necessary
Regulatory Approvals in the Prometheus Territory, provided that Prometheus shall
(i) keep the Committee reasonably informed with respect to Prometheus’
regulatory strategy related to the Licensed Products inside the Prometheus
Territory and otherwise keep the Committee reasonably involved through good
faith discussions with respect to such activities, (ii) provide Rosetta with
copies of any relevant written or otherwise material correspondence received by
Prometheus from and to be provided by Prometheus to, Regulatory Authorities
inside the Prometheus Territory concerning the Licensed Products, and (iii)
consider in good faith all reasonable suggestions and comments provided by the
Committee with respect to Prometheus’ correspondence and other communications
with Regulatory Authorities inside the Prometheus Territory, and (iv) use
Commercially Reasonable Efforts to allow the Committee reasonable advance
opportunity to comment on initial submissions by Prometheus and subsequent
amendments by Prometheus with respect to the Regulatory Approvals inside the
Prometheus Territory.  Notwithstanding the foregoing, in order to
ensure timely progress with respect to Regulatory Approvals, Rosetta’ members of
the Committee shall provide any suggestions and comments with respect to the
subject matter of subsections 3.1.4(a)(iii) and (iv) within fifteen (15)
business days after receipt of the relevant correspondence, communication,
initial submission or amendment, failing which Prometheus shall be relieved of
its obligations thereunder to consider Rosetta’s suggestions and comments solely
with respect to that item.

     

    (b)           The
Parties shall have joint decision making authority with respect to all matters
pertaining to the development of the Licensed Products by Rosetta outside the
Prometheus Territory that would affect the Licensed Products inside the Prometheus
Territory, which Rosetta acknowledges could potentially include certain
regulatory matters and development matters.  Except as set forth in
the preceding sentence or in Section 5, as between the Parties, Rosetta shall
retain final decision-making authority with respect to all matters pertaining to
the Licensed Products outside the Prometheus
Territory, including development, regulatory and commercialization strategy;
provided that Rosetta shall (i) keep the Committee reasonably informed with
respect to Rosetta’s (and its other licensees to the extent Rosetta has obtained
similar rights from such other licensees) regulatory strategy related to the
Licensed Products outside the Prometheus Territory and otherwise keep the
Committee reasonably involved through good faith discussions with respect to
such activities, (ii) provide Prometheus with copies of any relevant written or
otherwise material correspondence received by Rosetta (and its other licensees
to the extent Rosetta has obtained similar rights from such other licensees)
from and to be provided by Rosetta to, Regulatory Authorities outside the
Prometheus Territory concerning the Licensed Products, and (iii) consider in
good faith all reasonable suggestions and comments provided by the Committee
with respect to Rosetta’s (and its other licensees to the extent Rosetta has
obtained similar rights from such other licensees) correspondence and other
communications with Regulatory Authorities outside the Prometheus Territory, and
(iv) use Commercially Reasonable Efforts to allow the Committee reasonable
advance opportunity to comment on initial submissions by Rosetta and subsequent
amendments by Rosetta (and, in each case, its other licensees to the extent
Rosetta has obtained similar rights from such other licensees) with respect to
the Regulatory Approvals outside the Prometheus
Territory.  Notwithstanding the foregoing, in order to ensure timely
progress with respect to Regulatory Approvals, Prometheus’ members of the
Committee shall provide any suggestions and comments with respect to the subject
matter of subsections 3.1.4(b)(iii) and (iv) within fifteen (15) business days
after receipt of the relevant correspondence, communication, initial submission
or amendment, failing which Rosetta shall be relieved of its obligations
thereunder to consider Prometheus’ suggestions and comments solely with respect
to that item.  Rosetta shall use Commercially Reasonable Efforts to
include similar provisions as those set forth in (i) through (iv) above in its
license agreements with third parties.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 20
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    (c)           The
Parties acknowledge and agree that any changes to the Development Plan or the
allocation of the work thereunder that increase a Party’s costs under the
applicable project budget by more than the [***] shall be outside the authority
of the Committee and escalated for discussion and approval to an executive
officer of each Party, or their delegate, in accordance with the Party’s
respective internal budgetary approvals processes.

     

    3.1.5           Clinical Development
Subcommittee.  The Committee shall form a subcommittee which
shall have primary responsibility for considering, investigating and reporting
to the Committee on all matters related to the clinical development of the
Licensed Products (the “Clinical Development
Subcommittee”).  The Clinical Development Subcommittee shall be
comprised of two (2) representatives of each Party, and unless otherwise agreed
by the Committee, the Clinical Development Subcommittee shall meet in person or
via teleconference or video link at least monthly, on such dates and at such
times and places as agreed to by the Clinical Development Subcommittee
representatives.  The Clinical Development Subcommittee shall not have
any final or binding decision-making authority, but rather shall be responsible
for investigating matters associated with the clinical development of the
Licensed Products and reporting to the Committee so as to enable the Committee
to make decisions on such clinical development matters in accordance with
Section 3.1.4

     

    3.1.6           Validation
Subcommittee.  The Committee shall form a subcommittee which
shall have primary responsibility for considering, investigating and reporting
to the Committee on all matters related to the validation of the Second
Generation Mets Test, the IBS Test and the IBD Test (the “Validation
Subcommittee”).  The Validation Subcommittee shall be comprised
of two (2) representatives of each Party, and unless otherwise agreed by the
Committee, the Validation Subcommittee shall meet in person or via
teleconference or video link at least monthly, on such dates and at such times
and places as agreed to by the Validation Subcommittee
representatives.  The Validation Subcommittee shall not have any final
or binding decision-making authority, but rather shall be responsible for
investigating matters associated with the validation of the Second Generation
Mets Test and reporting to the Committee so as to enable the Committee to make
decisions on such validation matters in accordance with Section
3.1.4.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 21
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    3.2           Development
Program.

     

    3.2.1           Development
Program.  Within one hundred twenty (120) days of the Effective
Date, the Parties shall commence a development and feasibility assessment
program for the purposes of:

     

    (a)           developing
the Licensed Products for use with microarray technology as an alternative to
Real-time PCR Technology;

     

    (b)           obtaining
Regulatory Approval for the Mets Test; and

     

    (c)           designing,
developing, testing, refining, and obtaining Regulatory Approval for each of the
IBD Test, the IBS Test and the Second Generation Mets Test (collectively, the
“Development
Program”).

     

    3.2.2           Development
Plan.  As soon as reasonably practicable following the
Effective Date, the Committee shall agree upon a development plan to carry out
and complete the Development Program which shall be substantially in the form
set forth in Annex
B, as may be amended by agreement of the Parties from time to time (the
“Development
Plan”), acting reasonably.  The Development Plan shall include
Rosetta’s good-faith estimate of the time and actual costs required to conduct
the Development Program (the “Budget”).

     

    3.2.3           Responsibility.  Subject
to oversight by the Committee and in accordance with the Development Plan,
Rosetta shall assume primary responsibility for the validation of the Licensed
Products in the Prometheus Territory in accordance with the Development
Plan.

     

    3.2.4           Development
Expenses.

     

    (a)           Prometheus
shall contribute, subject to the offsetting provided in Section 3.2.4(c), up to
a maximum of [***] US dollars [***] to the Development Fund, which amount shall
be paid in accordance with the Budget (the “Prometheus Development
Contribution”).  The Prometheus Development Contribution shall
be comprised of an initial payment of [***] US dollars [***], which Prometheus
has committed to pay at the commencement of the Development Program to support
transition of the Licensed Products from a Real-Time PCR Technology-based
platform to a microarray platform, and up to [***] additional payments of [***]
US dollars [***], subject to attainment of certain development milestones to be
mutually agreed upon by the Parties and set forth in the Development Plan. In
addition,

    (i)           if
an FDA Clearance is required in order for Rosetta to perform the Services with
respect to a Licensed Product, and Rosetta requires the benefit of such FDA
Clearance for its activities with respect to such Licensed Product in the
Prometheus Territory as permitted hereunder, Rosetta shall so notify Prometheus
in writing and the Parties shall share the costs of obtaining such FDA
Clearance.

     

    (ii)           if
an FDA Clearance is required in order for Rosetta to perform the Services with
respect to a Licensed Product, but Rosetta does not require the
benefit of such FDA Clearance for its activities with respect to such Licensed
Product in the Prometheus Territory as permitted hereunder, Rosetta shall so
notify Prometheus in writing and Rosetta shall obtain such FDA Clearance on
Prometheus’ behalf, provided that Prometheus shall reimburse Rosetta for all of
Rosetta’s reasonable costs of obtaining such FDA Clearance at such time as the
FDA Clearance is transferred to Prometheus;

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 22
-

        
          

        

      

      
        
        

      

    

     

    (iii)           if
an FDA Clearance is not required in order
for Rosetta to perform the Services with respect to a Licensed Product, but
Rosetta nonetheless requires the benefit of such FDA Clearance for its own
activities with respect to such Licensed Product in the Prometheus Territory as
permitted hereunder, Rosetta shall bear [***] of the costs of obtaining such FDA
Clearance;

     

    (iv)           if
an FDA Clearance is required for a Licensed Product in order to transfer such
Licensed Product to a laboratory owned or operated by Prometheus, Rosetta shall
bear [***] of the costs of obtaining such FDA Clearance up to a maximum of [***]
US dollars [***] and any costs in excess of that amount shall be borne solely by
Prometheus; and/or

     

    (v)           if
an FDA Clearance is required for a Licensed Product during any period in which
Prometheus is performing Diagnostic Tests in laboratories owned or operated by
Prometheus, Prometheus shall bear [***] of the costs of obtaining such FDA
Clearance.

     

    Each
Party shall work together to minimize the costs and expenses of the other Party
when such other Party is seeking to obtain FDA Clearance (including, without
limitation, by taking advantage of and sharing any applicable existing data,
documents and/or reports which such Party may have in its possession and is
necessary or useful in order to receive FDA Clearance).  Each Party
shall bear the cost of any CLIA certifications or approvals or other state or
local Regulatory Approvals required for the operation of its own
laboratories.  With respect to any other Regulatory Filings and/or
Regulatory Approvals not expressly addressed in this Section 3.2.4(a) that are
required to be submitted or obtained by either Party, the Party in whose name
such Regulatory Approvals are to be submitted and obtained shall bear all costs
and expenses associated therewith, unless otherwise agreed by the Parties
pursuant to the applicable Development Plan.  Prometheus shall be
responsible for obtaining, at its expense, all samples required for the research
and development of the IBS Test and IBD Test. Except as expressly provided
herein or in the Development Plan, all other additional costs and expenses
required to conduct the Development Plan shall be borne solely by Rosetta,
provided that Rosetta shall receive compensation, in the form of an increase to
the Royalty, equal to [***] of Prometheus’ net savings in cost of goods
resulting from developing the Licensed Products with an alternative technology
to Real-Time PCR Technology. By way of example only, if Prometheus’ net costs to
utilize Real-Time PCR Technology are equal to [***] of Net Sales (including but
not limited to Prometheus’ direct cost of goods and any amounts which Prometheus
or Rosetta is required to pay to a Third Party in royalties or other
consideration), and through the success of the Development Plan, a Diagnostic
Test no longer relies on Real-Time PCR Technology, such that Prometheus’ net
costs are reduced to [***], then the Royalty due to
Rosetta shall be increased from the Royalty stated in Section 4.3.1 by
[***].  For the avoidance of doubt, unless otherwise agreed in writing
by the Parties, the costs of any freedom to operate opinions desired after the
Effective Date are outside the scope of the Development Program and shall not be
payable from the Development Fund.

     

    (b)           In
addition, Prometheus shall contribute to the Development Fund, subject to the
offsetting provided in Section 3.2.4(c), up to an additional [***] US dollars
[***] in funding for the development and validation of the Licensed Products
over a [***] period following the Effective Date (of which up to [***] US
dollars [***] may be used to develop the Second Generation Mets Test) to the
extent that such additional development and validation work is deemed to be
required by the Committee.  The Parties acknowledge and agree that, as
of the Effective Date, Annex E sets forth
the good-faith pre-estimate of the Parties regarding the amount of additional
funding required to conduct the further development and validation of the
Licensed Products described in Annex E.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 23
-

        
          

        

      

      
        
        

      

    

     

    (c)           Rosetta
shall contribute to the Development Fund [***] (such contribution to be made no
later than five (5) business days after receiving [***] from Prometheus) up to
an initial maximum of [***] US dollars [***], and up to a total maximum of [***]
US dollars [***] if the Committee determines that the amounts contributable by
Prometheus pursuant to Section 3.2.4(b) should be
contributed.  Prometheus shall be entitled to reduce its contributions
to the Development Fund under Sections 3.2.4(a) and (b) by [***] contributed to
the Development Fund.

     

    3.2.5           Development Program
Payments.

     

    (a)           In
partial consideration of the development and validation of the Mets Test and
Second Generation Mets Test, Prometheus (or a designated Affiliate) shall pay to
Rosetta:

     

    (i)           a
one-time payment of [***] US dollars [***] upon the publication of clinical
utility data from a clinical utility study (i.e. the MD Anderson study)
supporting the current product profile related to the Mets Test or the Second
Generation Mets Test in a scientific peer-reviewed journal that is recognized by
the scientific community in the Prometheus Territory as
reputable.  Notwithstanding the foregoing, if the clinical utility
data is not submitted by Rosetta for publication on or prior to [***], then the
aforementioned payment shall be reduced to [***].

     

    (ii)           a
one-time payment of [***] US dollars [***] upon the publication of a
pharmacoeconomics study supporting the current product profile related to the
Mets Test or the Second Generation Mets Test in a scientific peer-reviewed
journal that is recognized by the scientific community in the Prometheus
Territory as reputable.

     

    (b)           In
partial consideration of the development and validation of the IBS Test and IBD
Test, Prometheus (or a designated Affiliate) shall pay to Rosetta a one-time
payment of [***] US dollars [***] upon the achievement of the preferred product
profile for the IBS Test and a one-time payment of [***] US dollars [***] upon
the achievement of the preferred product profile for the IBD
Test.   The preferred profile for each of the IBS Test and the
IBD Test shall be defined in advance by the Committee and documented in the
Development Plan prior to Rosetta’s commencement of development work relating
thereto.  In addition, Prometheus (or a designated Affiliate) shall
pay to Rosetta a one-time payment of [***] US dollars [***] if the preferred
product profile for the IBS Test is achieved by the target date defined in
advance by the Committee and documented in the Development Plan. 

     

    3.2.6           Diligence Obligations.

     

    (a)           The
Parties shall use Commercially Reasonable Efforts to adequately and timely
comply with, execute and complete the tasks set forth in the Development Plan
and in accordance with the Budget. Rosetta shall consider any comments provided
by Prometheus through the Committee with respect to such development activities,
including the submission of Regulatory Filings.

     

    (b)           If,
during the Term, Prometheus notifies the Committee that any other Regulatory
Approval is required for any Licensed Product anywhere in the Prometheus
Territory, then the Parties shall use Commercially Reasonable Efforts to obtain
Regulatory Approval for such Licensed Product with the applicable Regulatory
Authority in the Prometheus Territory.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 24
-

        
          

        

      

      
        
        

      

    

     

    (c)           The
term “Commercially
Reasonable Efforts” shall mean that level of effort as is customary in
the laboratory services industry for carrying out in a reasonably sustained
manner a particular task or obligation to develop and commercialize diagnostic
products in the United States, taking into consideration the market potential,
regulatory pathways and cost of development in the United
States.  Notwithstanding the foregoing, a Party’s achievement, by
itself or through its Affiliates or Sublicensees, of any diligence milestone set
forth in the Development Plan by the date set forth therein shall be deemed
sufficient to satisfy the requirement to use Commercially Reasonable Efforts
under this Section 3.2 as of such date provided all previous diligence
milestones set forth in the Development Plan have also been satisfied or waived
in writing by that date, but the failure to do so shall not, in and of itself,
be deemed a failure to satisfy the requirement of Commercially Reasonable
Efforts.

     

    3.3           Improvements.

     

    3.3.1           Rosetta
Improvements.  From time to time during the Term, Rosetta or
its Affiliates or its licensees outside the Prometheus Territory may
independently develop or otherwise acquire Improvements to one or more Licensed
Products for use in the Field over which Rosetta obtains ownership or Control (a
“Rosetta
Improvement”).  In such case, Rosetta shall promptly present to
Prometheus any such Rosetta Improvement for potential inclusion in the Licensed
Products.  Prometheus shall consider such proposal in good faith
(including making the appropriate personnel of Prometheus available to discuss
any such proposal with Rosetta); provided that
Prometheus shall solely control and retain final decision-making authority with
respect to incorporating any such Rosetta Improvements into the Licensed
Products.  Prometheus shall notify Rosetta of its decision to include
or exclude such Rosetta Improvement in a signed writing.  To the
extent Rosetta owns or Controls any Patents with Valid Claims covering the
subject matter of a Rosetta Improvement and such Rosetta Improvement is
incorporated by Prometheus into the Licensed Products during the Term, such
Patents shall be deemed Licensed Patents and added to Annex A and as such
shall be licensed to Prometheus according to the License in Section 2.1 subject
to all terms and conditions hereunder applicable to Licensed Patents including
those set forth in Article 5, and the Term shall be extended
accordingly.  Any incremental costs in sublicensing to Prometheus
Rosetta Improvements which were licensed by Rosetta pursuant to an Upstream
License shall be borne by the parties consistent with the terms of Section
4.4.1(a).  In connection with the foregoing, when Rosetta enters into
any agreement or other arrangement with a Third Party, an Affiliate or a
licensee that may result in the development, creation or acquisition by Rosetta,
its Affiliates or licensees of any Improvements relating to the Licensed
Products for use in the Field, Rosetta will use Commercially Reasonable Efforts
not to limit or otherwise restrict Rosetta’s ability to grant a license or
sublicense to any such Improvements as provided for herein without violating the
terms of any such agreement or other arrangement and shall use Commercially
Reasonable Efforts to minimize any sublicense fees or pass through royalties
which will be owed to the Upstream Licensor thereunder.

     

    3.3.2           Ownership of
Improvements.  The Parties
acknowledge that Prometheus and Rosetta have collaborated and intend to continue
to collaborate in the development of Licensed Products, and that such
collaboration may generate Improvements whether or not
patentable.   In order to permit and encourage a successful
collaboration and protect the key business interests of both Parties, the
Parties agree that, as between the Parties, ownership of any Improvements to
Licensed Products arising from the development of the Licensed Products in the
Prometheus Territory made by one or both of the Parties shall be determined in
accordance with United States laws of inventorship. To the extent any
Improvements are deemed by applicable Law to be jointly owned by the Parties
(“Joint
Improvements”), then notwithstanding any rights of the Parties under the
United States laws of inventorship, and notwithstanding any rights of the
Parties under laws of any jurisdiction regarding the use or licensing of jointly
owned Patents, Prometheus shall have the royalty-free sole and exclusive right
(even as against Rosetta and its Affiliates) to Exploit and license such Joint
Improvements for Licensed Products inside the Prometheus Territory during the
Term and Rosetta shall have the royalty-free sole and exclusive right (even as
against Prometheus and its Affiliates) to Exploit and license such Joint
Improvements for Licensed Products outside the Prometheus Territory during the
Term, provided that Rosetta shall retain the right to Exploit such Joint
Improvements inside the Prometheus Territory for the purposes set forth in
Section 2.1.7.   For the avoidance of doubt, either Party shall
remain free to Exploit and license such Joint Improvements anywhere in the world
in connection with products and services other than the Licensed
Products.  Notwithstanding this Section 3.3.2 (but subject to Section
9), as between the Parties:

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 25
-

        
          

        

      

      
        
        

      

    

     

    (a)           Prometheus
shall exclusively own: (i) all data generated by or on behalf of Prometheus in
connection with Licensed Products, except as set forth in Section 3.3.2(c); (ii)
any and all Regulatory Approvals filed or awarded (y) in any jurisdiction in the
Prometheus Territory related to the Licensed Products, all of which shall be
filed by Rosetta for and on behalf of Prometheus in Prometheus’ name, and (z) in
any jurisdiction inside the Prometheus Territory related to Prometheus’
laboratory facilities; (iii) any Prometheus Confidential Information; and (iv)
as between the Parties, the Prometheus Product Improvements. Rosetta shall have a
non-exclusive right of reference to the Regulatory Approvals for use outside the
Prometheus Territory for any products and services, and inside the Prometheus
Territory for products and services that are not Licensed Products.

     

    (b)           Rosetta
shall exclusively own: (i) all data generated by or on behalf of Rosetta in
connection with the Licensed Products, except as set forth in Section 3.3.2(c);
(ii) any and all Regulatory Approvals filed or awarded (y) in any jurisdiction
outside the Prometheus Territory related to the Licensed Products, or (z) in any
jurisdiction inside the Prometheus Territory related to Rosetta’s laboratory
facilities; (iii) any Rosetta Confidential Information; and (iv) as between the
Parties, the Rosetta Improvements.  Prometheus shall have a
non-exclusive right to use all data generated by Rosetta on behalf of itself,
its other licensees (to the extent permitted) and Prometheus in connection with
the Licensed Products and a right of reference to the Regulatory Approvals for
use inside the Prometheus Territory in connection with the Licensed
Products.

     

    (c)           Data
relating to the Mets Test or the Second Generation Mets Test that is generated
by either Party under the Development Program will be jointly owned by the
Parties.  Data relating to the IBS Test or the IBD Test that is
generated by either Party under the Development Program will be solely owned by
Prometheus.

     

    3.3.3           Prometheus Product
Improvements.  Prometheus agrees that any research or
development activities that it wishes to pursue using the Licensed Intellectual
Property shall be brought to the attention of the Committee and, subject to the
approval of the Committee, shall be pursued solely through the Development
Program. Nevertheless, if during
the Term Prometheus or its Affiliates or its Sublicensees independently develop
or otherwise acquire Improvements (other than a Platform Improvement, which
shall be subject to Section 3.3.4) to one or more Licensed Products for use in
the Field over which Prometheus obtains ownership or Control (a “Prometheus Product
Improvement”) this Section 3.3.3 shall apply.  In such case,
Prometheus shall promptly after any decision to incorporate such Prometheus
Product Improvement into a Licensed Product inside the Prometheus Territory
present to Rosetta any such Prometheus Product Improvement for potential
inclusion in the Licensed Products outside the Prometheus
Territory.  Rosetta shall consider such proposal in good faith
(including making the appropriate personnel of Rosetta available to discuss any
such proposal with Prometheus); provided that Rosetta and its licensees shall
solely control and retain final decision-making authority with respect to
incorporating any such Prometheus Product Improvements into the Licensed
Products outside the Prometheus Territory.  To the extent Prometheus
owns or Controls any Patents with Valid Claims covering the subject matter of a
Prometheus Product Improvement and such Prometheus Product Improvement is
incorporated by Rosetta or its licensees into the Licensed Products outside the
Prometheus Territory during the Term, such Patents shall be licensed to Rosetta
(with the right to sublicense to the extent permitted by any applicable Third
Party license agreement) on a royalty-free basis (other than amounts due to any
Third Party that has licensed such Prometheus Product Improvement to Prometheus,
to the extent that such amounts are due to Prometheus’ grant of a sublicense to
Rosetta, and the payment by Rosetta of [***] of all of Prometheus’s development
costs incurred in connection with the applicable licensed Prometheus Product
Improvements and [***] of all patent prosecution and maintenance expenses
(including attorney fees) for such Patents outside of the Prometheus Territory,
provided that Rosetta shall only be entitled to grant sublicensees to its
licensees that  have granted a reciprocal license option to Prometheus
under such licensee’s Improvements to Licensed Products, which, for clarity, may
include development cost reimbursement and patent prosecution contributions
substantially similar to the foregoing.  In connection with the
foregoing, when Prometheus enters into any agreement or other arrangement with a
Third Party, an Affiliate or a Sublicensee that may result in the development,
creation or acquisition by Prometheus, its Affiliates or licensees of any
Prometheus Product Improvements for use in the Field, Prometheus will use
Commercially Reasonable Efforts not to limit or otherwise restrict Prometheus’s
ability to grant a license or sublicense to any such Prometheus Product
Improvements as provided for herein without violating the terms of any such
agreement or other arrangement and shall use Commercially Reasonable Efforts to
minimize any sublicense fees or pass through royalties which will be owed to the
licensor thereunder.  Notwithstanding anything to the contrary herein,
if a Prometheus Product Improvement Patent has been licensed by Prometheus from
a Third Party, then neither Rosetta nor any of its sublicensees shall receive a
license under such Prometheus Product Improvement Patent unless and until
Rosetta and its sublicensees, as applicable, have agreed in writing to be bound
by any and all applicable restrictions set forth in the license agreement
between Prometheus and such Third Party and a copy of such agreement to be bound
has been provided to Prometheus.  Any breach by a sublicensee of any
of the applicable obligations under such Third Party license agreement shall be
deemed to be a breach by Rosetta of this Agreement.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 26
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    3.3.4           Prometheus Platform
Improvements.  Prometheus shall notify Rosetta in writing of
any Platform Improvements conceived and reduced to practice by Prometheus and/or
its Affiliates promptly upon Prometheus’ senior management or patent counsel
being notified of the same.  Rosetta shall solely own all intellectual
property rights in and to the Platform Improvements developed by Prometheus
and/or its Affiliates.  Prometheus, on behalf of itself and its
Affiliates, hereby makes all assignments, and agrees to
execute, at Rosetta’s costs and expense, all documents, necessary to perfect
Rosetta’s ownership of such intellectual property rights as set forth in the
preceding sentence.  Prometheus shall have the right to elect to
include such Platform Improvements in the Licensed Products.  To the
extent Rosetta owns or Controls any Patents with Valid Claims covering the
subject matter of a Platform Improvement and such Platform Improvement is
incorporated by Prometheus into the Licensed Products during the Term, such
Patents shall be deemed Licensed Patents and added to Annex A and as such
shall be licensed to Prometheus on according to the License in Section 2.1
subject to all terms and conditions hereunder applicable to Licensed Patents
including those set forth in Article 5, and the Term shall be extended
accordingly, provided that if such Patents constitute the only Licensed Patent
for which there is a Valid Claim covering the Licensed Product the royalty set
forth in 4.3.1 shall be reduced by [***].

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 27
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    3.4           Commercialization.

     

    3.4.1           Control.  Prometheus
shall solely control and assume all responsibility, at its own cost, for
conducting all commercialization activities within the Prometheus Territory
relating to the Licensed Products, including marketing, promotion, sales
detailing and any other activities relating to the Exploitation of the Licensed
Products or Sublicense of rights to perform Diagnostic Tests for
Prometheus.  Notwithstanding the foregoing, Rosetta shall have the
right to participate separately (or if the Parties mutually desire, with
Prometheus) in industry conferences, industry exhibitions and industry events
within the Prometheus Territory for purposes of promoting the Licensed Products
outside of the Prometheus Territory.

     

    3.4.2           Marketing
Plans.  Each Party may, in its sole discretion, share marketing
plans and materials with the other Party with the object of coordinating a
world-wide marketing effort to maximize the commercial potential of the Licensed
Products.

     

    3.4.3           Diligence
Obligations.  Prometheus shall use Commercially Reasonable
Efforts to commercialize each of the Licensed Products in the Prometheus
Territory during the Term, provided that neither Prometheus’ failure to reach
any particular sales level by any particular time, nor Prometheus’ failure to
market or continue to market any Licensed Product(s) due to any Potential
Blocking Patents, shall, in and of itself, be deemed a failure to satisfy the
requirement of Commercially Reasonable Efforts.

     

    3.4.4           Regulatory Action
Letters.  The Parties shall promptly notify each other in
writing of the receipt of any action letters from any Regulatory Authority in
connection with quality or other issues concerning the Licensed
Products.  Within a reasonable time frame prior to submission of
responses to any Regulatory Authority on such quality or other issues concerning
the Licensed Products, a copy of a near final draft response will be provided to
the other Party for review.  Final copies of responses submitted to
any Regulatory Authority will be provided to the other Party within two (2)
weeks of submission.  Furthermore, Prometheus shall promptly notify Rosetta
in writing of any complaints received by Prometheus regarding any Licensed
Product, including the performance of any Diagnostic Test or the results
thereof, in the Prometheus Territory.

     

    3.5           Patent
Marking.  Subject
to applicable laws and regulations, labeling on all Licensed Products sold by or
on behalf of Prometheus or its Affiliates pursuant to this Agreement and on all
product literature will (a) identify Rosetta as licensor of the Licensed Patents
where required by applicable Law, (b) display any specific
patent and patent application numbers as identified by Rosetta, and (c) comply
with all patent marking requirements as specified in 35 U.S.C. §
287.

     

    
      	
              4.

            	
              PAYMENTS

            

    

     

    4.1           Up-Front
Equity.  In
partial consideration of the License granted hereunder and upon the terms and
subject to the conditions set forth in that certain Stock Purchase Agreement
entered into between the Parties concurrently with this Agreement, Rosetta shall
sell, convey, assign and deliver to Prometheus, and Prometheus shall purchase
and accept from Rosetta, two million (2,000,000) ordinary shares at a price of
four US dollars ($4.00) per share for the aggregate purchase price of eight
million US dollars ($8,000,000) (the “Up-Front Stock
Issuance”).

     

    4.2           Milestone
Payments.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 28
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    4.2.1           Commercial Milestone
Payments.  In partial consideration of the License granted
hereunder and subject to the terms and conditions stated herein, Prometheus (or
a designated Affiliate) shall make the following one-time payments to Rosetta
subject to the occurrence of the corresponding milestone events specified
below.  Such payments shall be allocated at the time of payment among
the Diagnostic Tests according to the proportion of total Net Sales attributable
to each Diagnostic Test for the period to which the milestone payment relates.

     

    
      	
              (a)  
      Cumulative Net Sales during the Term of [***]

            	
              [***]
      US dollars [***]

            
	
              (b)  
      First calendar year during the Term in which annual Net Sales exceed
      [***]

            	
              [***]
      US dollars [***]

            

    

     

    Such
milestone payments shall be paid by Prometheus, or its designated Affiliate
within thirty (30) days after the occurrence of the applicable milestone event
set forth above.  Notwithstanding anything to the contrary in this
Agreement, only one (1) milestone payment due pursuant to this Section 4.2.1
shall be payable in any single calendar year during the Term. In the event that
two (2) or more milestone payments become due to Rosetta in any single calendar
year during the Term pursuant to this Section 4.2.1, the first milestone payment
shall be due and payable by Prometheus as set forth herein, and the payment date
for any subsequent milestone payments accrued during the applicable calendar
year shall be automatically delayed until the date that is thirty (30) days
after the last day of the calendar year in which the immediately preceding
accrued milestone payment has been paid.

     

    4.3           Royalty.

     

    4.3.1           In
partial consideration of the License granted hereunder and subject to the terms
and conditions stated herein, until the expiration of the Term, Prometheus shall
pay to Rosetta a royalty (“Royalty”) on Net
Sales by Prometheus, its Affiliates and Sublicensees at the royalty rate, in
each case subject to the permitted reductions set forth in Section 4.4,
of:

     

    (a)           [***]
on annual Net Sales of all Licensed Products within the Prometheus Territory
other than the IBS Test and the IBD Test; and

     

    (b)           [***]
on annual Net Sales of the IBS Test and the IBD Test.

     

    4.3.2           The
annual Net Sales set forth above shall be measured from the beginning of each
calendar year.  Royalties payable under this Section 4.3 will be
payable only once with respect to a particular Licensed Product, regardless of
the number of Licensed Patents, if any, with claims covering a Licensed
Product.

     

    4.4           Permitted
Reductions.

     

    4.4.1           License of Third Party
Intellectual Property.

     

    (a)           As
between the Parties, Prometheus shall be responsible for obtaining all necessary
licenses for any Commercial Technology Platform used in connection with the
Exploitation of Licensed Products.  However, if Rosetta is required to
obtain a license under any Commercial Technology Platform which is necessary to
perform the Services, Rosetta (and, unless otherwise also required, not
Prometheus) shall be responsible for obtaining such license during the period in
which Rosetta is providing the Services.  Prometheus shall be
responsible for paying directly to Third Parties, or increasing its Royalty
payments to Rosetta (if and to the extent Rosetta is required to make payments
directly to a Third Party), any amounts due from Rosetta or Prometheus to any
Third Parties under any Commercial Technology Platform license agreements or due
from Prometheus or Rosetta under any Upstream License Agreements, but solely to
the extent, in each case, such amounts due arise directly from the performance
of the Services on Prometheus’ behalf or Prometheus’, its Affiliates’ and/or its
Sublicensees’ Exploitation of the Products in the Prometheus Territory, and in
each case, solely up to a maximum aggregate amount of the Third Party Royalty
Cap.  To the extent such amounts due exceed the Third Party Royalty
Cap, the excess costs shall be borne by and timely paid by Rosetta.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 29
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    (b)           Except
when Prometheus has elected to proceed under Section 5.3, the Royalty during the
Term may be reduced in the Prometheus Territory by [***] of any and all
royalties paid by Prometheus, its Affiliates and/or Sublicensees to any Third
Party (other than amounts for which Prometheus is responsible pursuant to
Section 4.4.1(a) above), [***].  Prometheus shall use Commercially
Reasonable Efforts to minimize any such royalties or other payments to Third
Parties on account of sales of Licensed Products hereunder.  For the
avoidance of doubt, no reduction shall be available with respect to a
Combination Product if the actual, alleged or potential infringement that
Prometheus wishes to avoid would not occur if the Licensed Product component of
such Combination Product was Exploited without the other diagnostically active
components, or in the case of (iii), the Third Party intellectual property
rights are primarily useful or necessary for the other diagnostically active
components.

     

    4.4.2           Combination
Products.  Prometheus shall not promote, offer for sale or sell
any Licensed Product in combination with another diagnostically active product
or products that are not Licensed Products (each a “Combination Product”)
unless such Combination Product has first received the unanimous consent of the
Committee, which consent shall not be unreasonably withheld.  If the
sale of such a Combination Product is permitted by the Committee, the Royalty
payable by Prometheus to Rosetta with respect to such Combination Product shall
be reduced by an amount which is calculated based on the following
formula:

     

    [***]

     

    [***].  The
amount included in Net Sales with respect to each Combination Product for which
the Licensed Products and other components, products, processes or systems
contained therein do not have established, stand-alone CPT value in a particular
jurisdiction in the Prometheus Territory, shall be based on the actual price of
such items when sold separately or the relative fair market value of each if not
sold separately or, if none of the foregoing can be reasonably determined, based
on the relative cost of goods (determined according to GAAP).  Any
disagreement between the parties regarding the value for any aspect of a
Combination Product shall be determined by the parties through good faith
negotiations.

     

    4.5            Payment and
Reports.  Within
forty-five (45) days after the final calendar quarter of each year during the
Term, and within thirty (30) days after the end of each other calendar quarter
during the Term (each such quarter, a “Royalty Reporting
Quarter”), Prometheus shall provide Rosetta with an updated written
report setting forth on product-by-product basis the Net Sales during such
Royalty Reporting Quarter and the calculation of the Royalty payable to Rosetta
for such Net Sales pursuant to this Section 4, including the allowances for bad
debt and any other any reductions to or deductions from gross sales taken by
Prometheus in accordance with this Agreement.  Such report shall be
accompanied by a payment equal to the total Royalty due, if any, to Rosetta
pursuant to this Section 4.  All payments shall be made to Rosetta on
or before the due date for each such report following the end of the Royalty
Reporting Quarter in United States Dollars.  Sales made in currencies
other than United States Dollars shall be converted to United States Dollars in
accordance with GAAP, treating United States dollars as the reporting
currency.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 30
-

        
          

        

      

      
        
        

      

    

     

    4.6           Record
Keeping.
Prometheus shall keep, and shall cause its Affiliates and Sublicensees to keep,
complete and accurate books of accounts of record in connection with the
sublicensing and sale of Licensed Products to permit verification of payments
made hereunder.  Such records shall be maintained for the period equal
to the later of (a) three (3) years from the date on which they were generated,
or (b) as required by applicable Law.

     

    4.7           Audit
Rights.  Rosetta
shall have the right to have an independent Third Party nationally-recognized
accounting firm reasonably acceptable to Prometheus access the books and records
of Prometheus, its Affiliates and Sublicensees solely to the extent necessary to
verify the accuracy of the reports and payments made hereunder.  Such
audit shall be conducted upon at least thirty (30) days advanced written notice
to Prometheus and shall commence on a date reasonably acceptable to both
Parties, not to be later than one (1) calendar quarter after Rosetta’s
notice.  Such audit shall only be during Prometheus’ normal business
hours.  Such audit shall not be more frequent than once (1) per
calendar year, may occur only with respect to the immediately preceding three
(3) calendar years, may not audit less than a full calendar year, and may not be
conducted more than once with respect to any particular calendar
year.  The auditing party shall be required to sign a confidentiality
agreement for the benefit of, and in a form reasonably acceptable to,
Prometheus.  Prometheus shall be provided the opportunity to discuss
any discrepancies found during such audit with the auditors prior to such
auditor issuing its final report.  In addition, the auditors shall
redact any confidential information disclosed in the proposed final report
identified by Prometheus as confidential and not necessary for purposes of
calculating the Royalty owed.  The final report
shall be shared with both of the Parties and may be shared with any Upstream
Licensors if its interests are affected by the findings in such report, or if
the audit was performed at its request or in fulfillment of a contractual
obligation of Rosetta under the applicable Upstream License Agreement, provided
that the applicable Upstream Licensor must at all times agree to maintain the
confidentiality of such information on terms no less restrictive than those set
forth in Section 6.  If any audit discloses any underpayments by
Prometheus to Rosetta, then unless contested by Prometheus within thirty (30)
days after receipt of the necessary documentation of the amount owed, any
underpayment shall be paid by Prometheus to Rosetta within thirty (30) days of
it being so disclosed.  If any audit discloses any overpayments by
Prometheus to Rosetta, then unless contested by Rosetta within thirty (30) days
after receipt of the necessary documentation of the amount owed, Prometheus
shall have the right to credit the amount of the overpayment against each
subsequent quarterly payment due to Rosetta until the overpayment has been fully
applied.  If the overpayment is not fully applied prior to the final
quarterly payment of Royalties due hereunder, Rosetta shall promptly refund an
amount equal to any such remaining overpayment. If Rosetta’s audit demonstrates
an underpayment of more than [***] for the payment due to Rosetta during the
audited period, Prometheus shall be liable for Rosetta’s reasonable cost of the
audit that discovered such underpayment.  Otherwise, Rosetta shall
bear the costs of such audits.  Any contested amounts shall be subject
to the dispute resolution procedures set forth in Section 11.

     

    4.8           Withholding
Taxes.   
Where required to do so by applicable Law or order of a governmental body, a
Party making payments hereunder shall withhold taxes required to be paid to a
taxing authority in connection with any payments to the other Party hereunder,
and, upon request of the Party to which the payment is due, the paying Party
shall furnish the receiving Party with satisfactory evidence of such withholding
and payment.  Any amounts withheld pursuant to this Section 4.8 shall
be treated as having been paid by the Party making such withholding for all
purposes under this Agreement.  To the extent any payments are made
hereunder without withholding (at the request of the Party which was to receive
such payment), and withholding is later determined to have been required, or is
assessed, by an governmental entity, the Party receiving such payments shall
indemnify the other Party, including, without limitation, for any withholding
tax, interest and/or penalties thereon, and any other reasonable expenses
related thereto.  The Parties shall give reasonable assistance to each
other in obtaining exemption from withholding taxes where available under
applicable Law, or recovering the same where an exemption is not
available.  

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 31
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              5.

            	
              INTELLECTUAL
      PROPERTY RIGHTS

            

    

     

    5.1           Patent Prosecution and
Maintenance; Product Technical Information.

     

    5.1.1           Prosecution and Maintenance
of Licensed Patents.

     

    (a)           As
between the Parties, Rosetta shall have the right and obligation, at its sole
cost and expense (subject to Section 5.1.3), to conduct and control prosecution,
maintenance, challenges against validity and unenforceability or patentability
with respect to the Licensed Patents in the Prometheus Territory, or to cause
its Upstream Licensors to do the same, to the extent that Rosetta has the right
to do so under the applicable Upstream License Agreement (and if not Rosetta
shall use Commercially Reasonable Efforts to obtain such rights pursuant to an
amendment to such Upstream License Agreement).  At Rosetta’s request,
Prometheus shall reasonably cooperate with and assist Rosetta in connection with
such activities.

     

    (b)           Rosetta
shall not abandon, and, to the extent that Rosetta has the right to do so under
the applicable Upstream License Agreement (and if not Rosetta shall use
Commercially Reasonable Efforts to obtain such rights pursuant to an amendment
to such Upstream License Agreement), shall not permit its Upstream Licensors to
abandon (i) any Platform Patent in the Prometheus Territory, but only to the
extent that, considering the Licensed Patents as a whole, such abandonment would
materially reduce Prometheus’ ability to protect any Licensed Product from
competition in the Prometheus Territory, or (ii) any of the Product Patents in
the Prometheus Territory, without providing in each case reasonable prior
written notice to Prometheus of such intention to surrender (which notice shall,
in any event and to the extent Rosetta receives such notice from its applicable
Upstream Licensor, be given no later than sixty (60) days prior to the loss of
any rights in such Licensed Patent) and, to the extent permitted by any
applicable Upstream License Agreement, providing Prometheus an opportunity to
assume responsibility for the prosecution and maintenance of such Licensed
Patent and obtain reimbursement from Rosetta for such payments in the amounts
set forth in paragraph (d) below.

     

    (c)           If
Prometheus reasonably believes that Rosetta or its Upstream Licensor may fail to
make any required payments or take any action required for the preparation,
filing, prosecution, defense or maintenance of any Upstream Licensed Patent in
the Prometheus Territory within a reasonable time, but solely in cases where
Prometheus would have the right to assume responsibility for prosecution and
maintenance pursuant to paragraph (b) above, Prometheus shall provide Rosetta
with written notice of such deficiency.  If, having received such
notice, Rosetta or the Upstream Licensor fails to take the required action at
least five (5) business days before the deadline for taking such action,
Prometheus shall have the right (but with respect to Controlled Patents, solely
to the extent that Rosetta has the right to do so under the applicable Upstream
License Agreement, and if not Rosetta shall use Commercially Reasonable Efforts
to obtain such rights pursuant to an amendment to such Upstream License
Agreement)  to thereafter make any such required payments or take any
such required action and obtain reimbursement from Rosetta for such payments in
the amounts set forth in paragraph (d) below

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 32
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    (d)           In
the event Prometheus elects to assume responsibility for any Licensed Patent in
accordance with Section 5.1.1(b) or incurs any costs and expenses in accordance
with Section 5.1.1(c), Rosetta shall reimburse Prometheus, within thirty (30)
days after the date of a reasonably detailed invoice and back-up therefor
provided by Prometheus: (i) [***] of Prometheus’ expenses associated with the
prosecution and maintenance of any Platform Patents, and (ii) [***] of
Prometheus’ expenses associated with the prosecution and maintenance of any
Product Patents.

     

    (e)           The
Parties acknowledge that it is not the intention of either Party for any
Platform Patent to include any method of use claim directed to the use of
microRNAs for any indication that is a target of a Diagnostic
Test.  In the event that an application for a Platform Patent
nevertheless includes a method of use claim directed to the use of microRNAs for
an indication that is a target of a Diagnostic Test, Rosetta shall promptly
upon notice of the existence of such claim file a divisional application for
such method of use and abandon the correlative claim in the Platform Patent
application, provided that if such method of use claim is needed to preserve the
viability of the Platform Patent application prior to a showing of the utility
of a composition of matter therein, no such divisional or abandonment shall be
required until such showing of utility is made.

     

    5.1.2           Co-operation and Exchange of
Information.  Except to the extent restricted by any of the
Upstream License Agreements, Rosetta shall (a) use counsel reasonably acceptable
to Prometheus for the prosecution and maintenance of the Product Patents in the
Prometheus Territory, (b) keep
Prometheus reasonably informed as to the status of any of the Licensed
Intellectual Property in the Prometheus Territory, (c) consider in good faith
the reasonable requests, suggestions and advice of Prometheus with respect to
the prosecution, maintenance and defense of the Licensed Patents in the
Prometheus Territory, and (d) promptly provide Prometheus with copies of
correspondence and materials (both received and filed from/with) the receiving
office of any PCT application, the U.S. Patent and Trademark Office (“PTO”) and/or other
equivalent intellectual property regulatory authority within the Prometheus
Territory to the extent they relate exclusively to the Licensed
Patents.

     

    5.1.3           Reimbursement of Rosetta’s
Costs.  
Prometheus shall reimburse Rosetta for its prosecution and maintenance expenses
for the Licensed Patents incurred prior to the Effective Date and during the
Term as follows: [***].  Any payment due to Rosetta pursuant to this
Section 5.1.3 for prosecution and maintenance expenses incurred prior to the
Effective Date shall be due and payable by Prometheus within thirty (30) days
after the Effective Date.  Any payment due to Rosetta pursuant to this
Section 5.1.3 for prosecution and maintenance expenses incurred during the Term
shall be due and payable by Prometheus within thirty (30) days after the date of
a reasonably detailed invoice and back-up therefor provided by Rosetta, provided
Rosetta shall not invoice Prometheus more than once (1) per calendar
quarter.

     

    5.2           Infringement or
Misappropriation of Licensed Intellectual Property.

     

    5.2.1           Notice of Infringement by
Third Parties.  If either Party should become aware of any
infringement or misappropriation or threatened infringement or misappropriation
of the Licensed Intellectual Property by a Third Party, it shall promptly notify
the other Party in writing and provide any information available to that Party
relating to such alleged infringement.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 33
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    5.2.2           Responsibility for
Enforcement.

     

    (a)           Rosetta
shall have the initial right (but not the obligation) to bring or control, at
its own expense, any enforcement action directed to an alleged infringement or
misappropriation of the Rosetta Owned Patents and/or the Rosetta Owned Technical
Information by a product or service that competes with a Licensed Product in the
Field in the Prometheus Territory, but shall consult Prometheus in good faith
with regard to all significant decisions, including without limitation, joining
Prometheus as a co-party (e.g., if Prometheus believes
it will need to be joined in order for the party plaintiffs to have standing
and/or a viable claim for lost profit damages).

     

    (b)           To
the extent permitted by the applicable Upstream License Agreement, Rosetta shall
have the initial right to bring or control, at its own expense, any enforcement
action directed to an alleged infringement or misappropriation of the Upstream
Licensed Patents and/or the Upstream Licensed Technical Information by a product
or service that competes with a Licensed Product in the Field in the Prometheus
Territory, but shall consult Prometheus in good faith with regard to all
significant decisions, including without limitation, joining Prometheus as a
co-party (e.g., if
Prometheus believes it will need to be joined in order for the party plaintiffs
to have standing and/or a viable claim for lost profit damages).

     

    (c)           In
the event that the enforcement of any Upstream Licensed Patent and/or any
Upstream Licensed Technical Information is the responsibility of the applicable
Upstream Licensor pursuant to Upstream License Agreements or an enforcement
action cannot be brought by Rosetta
for lack of standing, Rosetta agrees that, to the maximum extent that Rosetta
has the right to do so under the Upstream License Agreement (and if not
permitted Rosetta shall use Commercially Reasonable Efforts to obtain such
rights pursuant to an amendment to such Upstream License Agreement), Rosetta (i)
shall cause such Upstream Licensor to bring or control, at such Upstream
Licensor’s and/or Rosetta’s own expense, any enforcement action directed to an
alleged infringement or misappropriation of the Upstream Licensed Patents and/or
the Upstream Licensed Technical Information by a product or service that
competes with a Licensed Product in the Field in the Prometheus Territory, (ii)
shall consult Prometheus in good faith with regard to all significant decisions,
including without limitation, joining Prometheus and/or Rosetta as co-parties,
and (iii) shall not permit such Upstream Licensor to settle (or make any
stipulation during) such enforcement action in a manner that would negatively
affect Prometheus’ License without first obtaining Prometheus’ prior written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned.

     

    (d)           In
the event that Rosetta or an Upstream Licensor does not file suit against or
commence and conclude settlement negotiations with the party responsible for an
alleged infringement of any Licensed Intellectual Property within [***] days of
receipt of a written demand from Prometheus that Rosetta and/or its Upstream
Licensor bring suit, and it is determined by Prometheus after good faith
consultation with Rosetta that a suit should be filed by Rosetta and/or the
applicable Upstream Licensor, but Rosetta and/or the applicable Upstream
Licensor does not file suit or commence settlement negotiations forthwith
against the infringer, then Prometheus shall have the right, at [***] expense,
to bring or control, at [***] expense, any enforcement action directed to the
alleged infringement on behalf of itself,  Rosetta, and/or the
Upstream Licensor, to the extent permitted by the relevant Upstream License
Agreement (and if not permitted Rosetta shall use Commercially Reasonable
Efforts to obtain such rights pursuant to an amendment to such Upstream License
Agreement).

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 34
-

        
          

        

      

      
        
        

      

    

     

    5.2.3           Cooperation and
Joinder.

     

    (a)           Prometheus
shall reasonably cooperate in any enforcement action brought by Rosetta or an
Upstream Licensor pursuant to Section 5.2.2(a), (b) or (c) above, and, as
necessary (or requested by Prometheus), be permitted to join or be joined as a
party therein, provided Rosetta or
the Upstream Licensor, as applicable, agrees to reimburse Prometheus for all
out-of-pocket costs, damages and expenses, (excluding reasonable attorneys’ fees
unless the Parties are unable to utilize the same legal counsel due to an
ethical conflict), that it may incur in connection with such assistance or
joinder, including any award of costs against it.

     

    (b)           Rosetta
shall reasonably cooperate in any enforcement brought by an Upstream Licensor
pursuant to Section 5.2.2(c), and as necessary join or be joined as a party
therein, provided the Upstream
Licensor agrees to reimburse Rosetta for all out-of-pocket costs, damages and
expenses, (excluding reasonable attorneys’ fees unless the Parties are unable to
utilize the same legal counsel due to an ethical conflict), that it may incur in
connection with such assistance or joinder, including any award of costs against
it.

     

    (c)           Rosetta
shall and shall cause the applicable Upstream Licensor to the extent permitted
by the relevant Upstream License Agreement (and if not permitted Rosetta shall
use Commercially Reasonable Efforts to obtain such rights pursuant to an
amendment to such Upstream License Agreement) to reasonably cooperate in any
enforcement brought by Prometheus pursuant to Section 5.2.2(d), and as necessary
join or be joined as a party therein, provided Prometheus
agrees to reimburse Rosetta for all out-of-pocket costs, damages and expenses,
(excluding reasonable attorneys’ fees
unless the Parties are unable to utilize the same legal counsel due to an
ethical conflict), that it may incur in connection with such assistance or
joinder, including any award of costs against it.

     

    (d)           Any
costs, expenses or damages hereunder to be reimbursed by one Party to the other
shall be paid by the owing Party within thirty (30) days of receipt of evidence
that such costs, expenses or damages have been incurred.

     

    5.2.4           Retention of Amounts
Recovered.  Except as otherwise required by the terms of any
applicable Upstream License Agreements, any amount recovered in any action or
suit brought in accordance with Section 5.2, whether by judgment or settlement,
shall be applied as follows, unless otherwise agreed in writing by the
Parties:

     

    (a)                 First,
to reimburse the Parties for their respective costs and expenses (including
reasonable attorneys’ fees and costs) incurred in prosecuting such infringement
action;

     

    (b)                 Second,
if and to the extent lost sales are specifically determined by the adjudicating
authority, to Prometheus in reimbursement for lost sales (net of royalties)
associated with Products and to Rosetta in reimbursement for lost royalties
owing hereunder based on such lost sales;

     

    (c)                 Third,
any amounts remaining shall be allocated [***] to the Party that controlled the
prosecution of the infringement action and [***] to the non-controlling
Party.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 35
-

        
          

        

      

      
        
        

      

    

     

    In the
absence of any conflict of interest, the Parties shall use commercially
reasonable efforts to utilize the same legal counsel. In the event of any
inconsistency between the terms of this Section 5.2.4 and the terms of any
Upstream License Agreement, amounts recovered in any enforcement action or suit
brought in accordance with Section 5.2 that pertain to the Upstream License
Agreement shall be paid or retained in accordance with the terms of the
applicable Upstream License Agreement.

     

    5.2.5           Notification of Infringement
by a Party.  If the Exploitation of the Licensed Products
results in a claim alleging Patent infringement against either Party (or its
Affiliates, licensees or sublicensees), such Party shall promptly notify the
other Party hereto in writing.  As between the Parties, Prometheus
shall have the initial right to defend and control the defense of any
infringement claim pertaining primarily to infringement inside the Prometheus
Territory, and Rosetta shall have the initial right to defend and control
the defense of any infringement claim pertaining primarily to infringement
outside the Prometheus Territory.  Each Party (a) may use counsel of
its own choice as applicable, and (b) shall keep the other Party informed of all
material developments in connection with any such
claim.  Notwithstanding the foregoing, if the other Party (or its
Affiliates or Sublicensees) is joined in any such action, then it shall have the
right to defend such action and be represented by separate legal
advisors.

     

    5.2.6           Settlement.  Without
prejudice to the foregoing, neither Party shall settle or compromise any legal
action referred to in Section 5.2 without the prior written consent of the other
Party (not to be unreasonably withheld), provided that Rosetta shall not be
required to obtain Prometheus’ consent to the settlement or compromise of an
infringement claim or action subject to Section 5.2.5 to which Prometheus has
not been joined and which pertains solely to infringement outside the Prometheus
Territory.

     

    5.3          Resolution of Potential Blocking
Positions.

     

    If a
claim alleging Patent infringement arises that is subject to Section 5.2.5, or
if the senior management of either Party become aware of a Third Party Patent
that, if issued, is likely to provide a basis for such a claim in the Prometheus
Territory (collectively, a “Potential Blocking
Patent”), the following provisions shall apply:

     

    5.3.1           To
the extent such notice has not been provided pursuant to Section 5.2.5, the
Party that first becomes aware of such Potential Blocking Patent shall provide
written notice that such a situation may exist to the other Party, following
which the Parties shall discuss and determine whether they wish to enter into a
commonality of interest agreement and to conduct any further discussion through
their respective US counsel before proceeding to discuss the Potential Blocking
Patent.

     

    5.3.2           The
Parties shall enter into good faith discussions for a period of up to [***] with
the objective of determining whether a license under the Potential Blocking
Patent or a modification or redesign (hereinafter “modification”) to one or more
of the Licensed Products is necessary for the Exploitation of one or more of the
Licensed Products in the Prometheus Territory, taking into account
considerations such as, without limitation, the time required to obtain a
license versus the time required to modify the Licensed Product to make it
non-infringing, and the cost of obtaining a license versus the cost of modifying
the affected Licensed Product.  During such [***] period, the Parties
shall discuss and agree upon the appropriate parameters for obtaining such
license and/or developing such modification, [***] (the “Third Party License
Negotiation Period”) and  develop such modification (the “Modification Development
Period”) as well as the overall time limit for attempting both options
should the first chosen option fail, provided that in no event shall such
overall time period exceed [***] (the “Overall Time
Period”).  To the extent necessary, the parties shall discuss
in good faith extending the term of any of the aforementioned periods for a
reasonable duration to conclude any negotiations or development work than in
progress.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 36
-

        
          

        

      

      
        
        

      

    

     

    (a)           If
the Parties agree that such a license or modification is necessary, the Parties
shall immediately proceed as set forth in Section 5.3.3 below, without regard to
Section 5.3.2(b).

     

    (b)           If
the Parties fail to agree as to the necessity of such a license or modification,
the Parties shall within five (5) business days after the conclusion of the
foregoing [***] discussion period select a mutually acceptable Third Party
neutral patent expert with expertise in patent damages and licensing (the “Expert”) to determine
whether it is more likely than not that the patent would be infringed, where
such standard is interpreted in accordance with standard jury instructions for
United States Federal Courts in cases dealing with patent infringement, by the
unlicensed Exploitation of the Licensed Product(s) in the Prometheus
Territory.  Prior to any substantive communications to the Expert, the
Parties and the Expert shall enter into a suitable confidentiality agreement,
and take measures to preserve to the maximum extent possible each Party’s legal
privilege concerning the subject matter of the determination.  The
Expert will determine the procedures for his decision making, including
procedures for presenting information to him and the Parties agree to provide to
the Expert all information and documents that are requested.  The
Expert’s final decision shall be made no more than [***] after initiating the
proceeding.  If the Expert determines that it is more likely than not
(applying the standard described above) that the Potential Blocking Patent would
be infringed by the unlicensed Exploitation of the Licensed Product(s) in the
Prometheus Territory, the Parties shall proceed as set forth
below.  If the Expert
determines that it is not more likely than
not that the Potential Blocking Patent would be infringed by the unlicensed
Exploitation of the Licensed Product(s) in the Prometheus Territory, neither
Party shall have any further obligation under the following subsections of this
Section 5.3 solely with respect to the Potential Blocking Patent in question
(without prejudice to any right of Prometheus to avail itself of Section
4.4.1(b)).  The cost of the Expert shall be borne equally by the
parties.

     

    5.3.3           Prometheus
shall within a reasonable time determine whether it wishes to avail itself of
the royalty reductions available to it pursuant to Section 4.4.1(b), or to
continue to proceed under this Section 5.3.  Prometheus shall notify
Rosetta in writing of such election, and any election to proceed under Section
4.4.1(b) shall discharge Rosetta of any further obligations under this Section
5.3 solely with respect to the Potential Blocking Patent in
question.

     

    5.3.4           If
Prometheus elects to proceed under this Section 5.3 and the parties have agreed
on Rosetta initially attempting to obtain a license over developing a
modification (taking into account the discussions set forth in Section 5.3.2),
Rosetta shall use best commercial endeavors to promptly obtain a license to the
Potential Blocking Patent, [***].  Rosetta shall keep Prometheus
reasonably informed as to the progress of Rosetta’s negotiations with the Third
Party that owns or controls the Potential Blocking
Patents.  Prometheus shall not engage in any discussions or
negotiations with such Third Party relating to the Potential Blocking Patent
prior to the expiration of the Overall Time Period except (a) with Rosetta’s
prior written consent, not to be unreasonably withheld, and subject to a joint
negotiation strategy, or (b) after giving written notice to Rosetta that
Prometheus wishes to enter into sole negotiations with such Third Party and is
electing to proceed under Section 4.4.1(b), which election to proceed under
Section 4.4.1(b) shall discharge Rosetta of any further obligations under this
Section 5.3 solely with respect to the Potential Blocking Patent in
question.  If Rosetta is unable, despite using best commercial
endeavors, to obtain a license to the Potential Blocking Patent, and provided
that there is still sufficient time to successfully modify the Licensed Product
and obtain a non-infringement opinion from reputable outside patent counsel to
the effect that the Licensed Product, as so modified, does not infringe the
Potential Blocking Patent within the Overall Time Period, Rosetta may notify
Prometheus, via a signed writing given to Prometheus no more than five (5)
business days after the expiration of the Third Party License Negotiation Period
(the “Plan B
Notice”), that it desires to develop the necessary modifications in
accordance with the procedures set forth in Section 5.3.5.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 37
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    5.3.5           If
Prometheus elects to proceed under this Section 5.3 and either (a) the parties
have agreed on developing a modification prior to first attempting to obtain a
license (taking into account the discussions set forth in Section 5.3.2) or (b)
Rosetta has properly provided Prometheus with a Plan B Notice, Rosetta shall
promptly modify the affected Licensed Product and obtain a non-infringement
opinion from reputable outside patent counsel to the effect that the Licensed
Product, as so modified, does not infringe the Potential Blocking Patent prior
to the expiration of the Modification Development Period and/or the Overall Time
Period, which ever comes first.  Prometheus shall reimburse [***] of
the costs for developing such modification and obtaining such opinion upon
successfully completion of the modification and obtainment of said
non-infringement opinion.  In return, Prometheus shall be entitled to
reduce its royalty payments hereunder to Rosetta by [***] until Prometheus has
recouped in full its contributions to such development costs, at which time no
further reduction shall be available under this Section 5.3.5.  If
Rosetta is unable, despite using best commercial endeavors, to successfully
modify the Licensed Product or to obtain a non-infringement opinion from
reputable outside patent counsel to the effect that the Licensed Product, as so
modified, does not infringe the Potential Blocking Patent within the Third Party
License Negotiation Period within the Third Party License Negotiation Period,
and provided that Rosetta has not provided
Prometheus with a Plan B Notice and there is still sufficient time to
successfully license the Potential Blocking Patent from a Third Party within the
Overall Time Period, Rosetta may notify Prometheus, via a signed writing given
to Prometheus no more than five (5) business days after the expiration of the
Third Party License Negotiation Period (the “Plan C Notice”), that
it desires to license the Potential Blocking Patent from a Third Party in
accordance with the procedures set forth in Section 5.3.4.

     

    5.3.6           If
Rosetta is unable, despite using best commercial endeavors to either modify the
Licensed Product and obtain a non-infringement opinion from outside patent
counsel to the effect that the Licensed Product, as so modified, does not
infringe the Potential Blocking Patent or to obtain a license under the
Potential Blocking Patent within the Overall Time Period, Rosetta shall so
notify Prometheus in writing within five (5) business days after making such
determination.  [***].  Prometheus shall use Commercially
Reasonable Efforts to minimize any such royalties to Third Parties.

     

    5.3.7           If
(a) Rosetta is unable to modify the Licensed Product and obtain a
non-infringement opinion from outside patent counsel to the effect that the
Licensed Product, as so modified, does not infringe the Potential Blocking
Patent and neither Party is able to obtain a license under the Potential
Blocking Patent within the Overall Time Period and (b) Prometheus stops selling,
or its Board determines to stop selling, the affected Licensed Product (notice
of which decision shall be promptly given to Rosetta), the Parties may mutually
agree to terminate the license with respect to the affected Licensed Product(s),
provided that prior to the effective date of such termination the parties shall
negotiate a reasonable royalty (and if such royalty cannot timely be agreed upon
by the parties, such royalty may be determined pursuant to the Dispute
Resolution procedures set forth in Section 11) which Rosetta shall pay to
Prometheus in connection with Rosetta’s or its Affiliates’ Exploitation of such
Licensed Product(s) in the Prometheus Territory for a period of [***] subsequent
to termination.  For clarification purposes, unless otherwise agreed
upon by the parties, Rosetta shall have no obligation to Exploit the Licensed
Product in the Prometheus Territory. Upon the effective date of termination of
such Licensed Product(s) Rosetta shall also reimburse Prometheus the development
costs for such Licensed Product(s) which were actually paid to Rosetta pursuant
to Section 3.2.4 (crediting to Prometheus any offsets actually taken
thereunder), excluding any performance-based incentives.  Development
costs for development work that benefited more than one Licensed Product shall
be reasonably apportioned between or among the applicable Licensed
Products.  In addition, if subsequent to the effective date of
termination, Rosetta and/or any of its Affiliates license any Third Party the
right to Exploit any Licensed Product(s) subject to this Section 5.3.7 in the
Prometheus Territory, Prometheus shall receive [***] of all consideration
(including, without limitation, all upfront fees, milestone fees and royalties,
whether monetary or otherwise) received by Rosetta and/or its Affiliates but
excluding investments in Rosetta made at fair market value, loans made at
reasonable commercial terms and amounts paid for research funding under a
written agreement with a research project and a budget.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 38
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              6.

            	
              CONFIDENTIAL
      INFORMATION

            

    

     

    6.1           Confidentiality.

     

    6.1.1           Prometheus
agrees to maintain secret and confidential the Product Technical Information,
any Rosetta Improvements and all other confidential information that it may
acquire or has acquired from Rosetta in the course of this Agreement (“Rosetta Confidential
Information”), to use the same exclusively as permitted under this
Agreement, and to disclose the same only to those of its employees,
Affiliates, contractors and Sublicensees appointed pursuant to this Agreement
(if any) to whom and to the extent that such disclosure is reasonably necessary
for the purposes of this Agreement.

     

    6.1.2           Rosetta
agrees to maintain secret and confidential all Prometheus Product Improvements
and all other confidential information that it may acquire or has acquired from
Prometheus in the course of this Agreement (“Prometheus Confidential
Information”) and
to disclose the same only to those of its employees, Affiliates, contractors and
licensees of the Licensed Products to whom and to the extent that such
disclosure is reasonably necessary for the purposes of this
Agreement.

     

    6.1.3           The
foregoing obligations of Sections 6.1.1 and 6.1.2 shall not apply to Technical
Information or other confidential information which:

     

    (a)           prior
to receipt thereof from one Party was in the possession of the recipient Party
and at its free disposal, as can be demonstrated by the recipient Party through
written evidence;

     

    (b)           is
subsequently disclosed to the recipient Party without any obligations of
confidence by a Third Party who has not derived it directly or indirectly from
the disclosing Party;

     

    (c)           is
or becomes generally available to the public through no act or default of the
recipient Party or its Affiliates, employees, contractors, agents, or
Sublicensees;

     

    (d)           is
independently developed by the receiving Party by its employees or contractors
without access to or the benefit of any disclosure hereunder, as demonstrated by
documented evidence prepared contemporaneously with such independent
development; or

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 39
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    (e)           is
required to be disclosed by law, regulation or action of any governmental agency
or authority or to comply with the requirements of any securities exchange or to
any governmental or regulatory agency.

     

    6.1.4           Each
Party shall procure that all its employees, contractors and licensees, who have
access to any information of the other Party to which the obligations of clauses
6.1.1 or 6.1.2 as the case may be apply, shall be made aware of, subject to, and
comply with the above obligations.

     

    6.1.5           Rosetta
shall use Commercially Reasonable Efforts to identify in writing any Rosetta
Confidential Information disclosed by Rosetta to Prometheus that is proprietary
to an Upstream Licensor.  To the extent Rosetta properly identifies in
writing at the time of disclosure to Prometheus the Upstream Licensor whose
Confidential Information Rosetta is disclosing, and provided further that,
Rosetta has also disclosed to Prometheus the applicable confidentiality terms
and restrictions under Rosetta’s Upstream License Agreement, then the
confidentiality terms of such Upstream License Agreement shall supersede the
terms of this Section 6 with respect to Prometheus use and disclosure of such
Upstream Licensor Confidential Information.

     

    6.1.6           The
obligations of confidentiality herein shall survive for a period of [***]
following the date of expiration or termination of this Agreement, and shall
apply to Rosetta Confidential Information and Prometheus Confidential
Information exchanged between the Parties, both prior to and after entering into
this Agreement.  This Agreement supersedes the mutual confidentiality
agreement between
the Parties dated August 27, 2008 (the
“Mutual
Confidentiality Agreement”).  All information exchanged between
the Parties under the Mutual Confidentiality Agreement shall be deemed to have
been disclosed under this Agreement on a going-forward basis and shall be
subject to the terms of this Article 6 as of the Effective
Date.

     

    6.2           Publicity and Permitted
Disclosures.  Each
of the following provisions of this Section 6.2 shall apply except as otherwise
required by Law or court order or as otherwise permitted under this
Agreement:  Prometheus shall not use the name of any Upstream
Licensor, or any variant thereof, in any promotional materials or other public
announcement or disclosure without the prior written consent of such Upstream
Licensor.  All publicity, press releases and public announcements, in
each case relating to the Licensed Products as licensed hereunder in the
Prometheus Territory and/or the transactions contemplated hereby shall be
reviewed in advance by, and shall be subject to the written approval (such
approval not to be unreasonably withheld) of both Parties; provided that such
publicity, press releases and other public announcements shall not disclose any
confidential information of the other Party hereunder and shall give appropriate
attribution to the other Party’s role(s) in the project contemplated
herein.  Each Party shall provide the other Party an opportunity to
review and comment on the language of such attribution prior to first use
thereof in a press release or other public disclosure.  Furthermore,
each Party shall notify the other Party prior to the first public disclosure of
any data generated by it, its Affiliates, Sublicensees or licensees (as
applicable) relating to the Licensed Products in the Prometheus Territory, and
shall provide the other Party an opportunity to review and comment on the
language of such disclosure.  Any information that is contained in an
approved disclosure as described in the preceding sentences may be disclosed
subsequently by either Party without the need to seek any further approval,
subject to any restrictions that apply to the original
disclosure.  Prometheus hereby approves the Rosetta press release
attached hereto as Annex H for release
on or after the Effective Date.  Either Party may disclose the
existence of this Agreement and the terms and conditions hereof, without the
prior written consent of the other Party, as may be required by applicable Law
(including, without limitation, disclosure requirements of the SEC, NYSE, or any
other stock exchange or NASDAQ), in which case the Party seeking to disclose the
information shall give the other Party reasonable advance notice and review of
any such disclosure and shall seek confidential treatment of such information to
the extent possible under applicable Law.  Furthermore,
either Party may disclose the other Party’s Confidential Information, the
existence of this Agreement and the terms and conditions hereof, to its legal
advisers subject to a duty of confidentiality.  Finally, either Party
may disclose the existence of this Agreement and the terms and conditions hereof
under a written confidentiality agreement to its Affiliates, actual and
prospective investors, other financing sources, or acquirers, and in the case of
Rosetta, the Upstream Licensors.  Notwithstanding the foregoing,
neither Party shall have the right to disclose such information to a Competitor
of the other Party except if such Competitor is an acquirer or investor
receiving at least [***] of the Party’s voting shares and either (a) the
other Party has consented in writing to the disclosure to such Competitor, or
(b) the disclosure is made to the Competitor after the full execution (but not
necessarily after the closing) of a definitive agreement for such acquisition or
investment.  Prometheus may disclose Rosetta’s Confidential
Information to its Sublicensees solely on a need-to-know basis subject to
Section 2.2.1.  Rosetta may disclose to its other actual or
prospective licensees Section 3.3.3 (Prometheus Product Improvements) of this
Agreement and the definitions of terms used therein in connection with Rosetta’s
negotiation or enforcement of reciprocal obligations and rights relating to
Improvements on the part of such other actual or prospective
licensees.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 40
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              7.

            	
              REPRESENTATIONS,
      WARRANTIES AND COVENANTS

            

    

     

    
      7.1    Corporate Existence and
Power.  Each
Party hereto represents and warrants to the other Party that, (a) it is a
corporation duly organized, validly existing and in good standing under the laws
of the state or jurisdiction in which it is incorporated or organized; and (b)
it has full power and authority and the legal right to own or license and
operate its property and assets and to carry on its business as it is now being
conducted and as contemplated in this Agreement.

    

     

    7.2           Authority.  Each
Party hereto represents and warrants to the other Party that (a) it has the
power and authority and the legal right to enter into this Agreement and perform
its obligations hereunder; (b) it has taken all necessary action on its part
required to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder; (c) this Agreement has been duly
executed and delivered on behalf of such Party, and constitutes a legal, valid
and binding obligation of such Party and is enforceable against it in accordance
with its terms; (d) as of the Effective Date, all necessary consents, approvals
and authorizations of all governmental authorities, Upstream Licensors and other
persons or entities required to be obtained by such Party in connection with
entry into this Agreement have been obtained; and (e) the execution and delivery
of this Agreement and the performance of such Party’s obligations hereunder (i)
do not conflict with or violate any requirement of applicable Law in existence
as of the Effective Date or any provisions of such Party’s charter documents in
any material way, and (ii) do not conflict with, violate or breach or constitute
a default or require any consent under, any contractual obligation or court or
administrative order in existence as of the Effective Date by which such Party
is bound.

     

    7.3           Intellectual
Property.  Rosetta
represents and warrants to Prometheus that:

     

    7.3.1           Rosetta
has disclosed to Prometheus, or provided Prometheus with copies of, all Rosetta
Owned Patents in existence as of the Effective Date, and covenants that it shall
thereafter continue to provide Prometheus with copies of any Patents that become
Rosetta Owned Patents at any time during the Term.  In the event that
Rosetta becomes aware of any Rosetta Owned Patent in existence as of the
Effective Date that was not disclosed to Prometheus, Rosetta covenants that it
shall promptly disclose such Rosetta Owned Patent to Prometheus.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 41
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    7.3.2           To
Rosetta’s knowledge, Rosetta has disclosed to Prometheus, or provided Prometheus
with copies of, all Upstream Licensed Patents in existence as of the Effective
Date.

     

    7.3.3           As
of the Effective Date, Annex A-1A and Annex A-2A sets forth
a true, correct and complete list of all Patents owned by Rosetta or its
Affiliates necessary or required to Exploit the Licensed Products in the
Prometheus Territory;

     

    7.3.4           To
Rosetta’s knowledge as of the Effective Date, Annex A-1B and Annex A-2B sets forth
a true, correct and complete list of all Patents Controlled by Rosetta or its
Affiliates necessary or required to Exploit the Licensed Products in the
Prometheus Territory;

     

    7.3.5           Rosetta
has the right to grant the licenses to Prometheus that are set forth in this
Agreement and owns or Controls all right, title and interest in and to the
Licensed Intellectual Property;

     

    7.3.6           Rosetta
has not granted any rights in the Licensed Intellectual Property that are
inconsistent with or that limit the rights granted to Prometheus under this
Agreement;

     

    7.3.7           Rosetta
has secured written statements from each entity that is an Upstream Licensors as
of the Effective Date declaring that, to each such Upstream Licensor’s
knowledge, neither it nor Rosetta is in material breach of such Upstream License
Agreement. In instances where an Upstream License Agreement in existence as of
the Effective Date does not already provide the following right, Rosetta has
secured written statements from each entity that is an Upstream Licensor as of
the Effective Date declaring that, should the Upstream License Agreement be
terminated, the applicable Upstream Licensor shall provide prompt notice thereof
to Prometheus and provided that Prometheus is not in material breach of this
Agreement at the time the Upstream License Agreement is terminated as to
Rosetta, the Upstream Licensor shall provide prompt notice thereof to Prometheus
and shall be deemed to have granted a direct license to Prometheus on the same
terms as those set forth in (a) this Agreement, or (b) the Upstream License
Agreement, in each case which apply to the Upstream Licensor’s intellectual
property that is sublicensed to Prometheus under the Upstream License Agreement,
provided that such direct license shall be granted solely in the Prometheus
Territory, and provided further that any upfront or other payments which were
paid by Rosetta to the Upstream Licensor prior to the date of termination of the
Head License shall be deemed to have been paid by Prometheus under the direct
license. Rosetta
further represents and warrants that, during the Term, Rosetta shall maintain
each of the Upstream License Agreements in good standing and shall not take any
action, or omit or fail to take any action, which would result in a breach or
early termination of any of the Upstream License Agreements or any rights
thereunder, unless Prometheus’ license with respect to the Diagnostic Test to
which such Upstream License Agreement pertains has been
terminated.  Rosetta represents and warrants that it shall not amend,
modify or supplement the terms of, or waive any rights under, any Upstream
License Agreement without the prior written consent of Prometheus where and to
the extent that any such amendment or waiver would adversely affect the rights
and licenses granted to Prometheus pursuant to this
Agreement.  Rosetta shall promptly notify Prometheus upon receipt by
Rosetta of any notice from any Upstream Licensor of any actual or alleged breach
under any Upstream License Agreement that could result in the termination of
such agreement or reduction or other limitation in Rosetta’s rights thereunder,
and Rosetta shall promptly cure any such breach within the allotted cure
period.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 42
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    7.3.8           As
of the Effective Date, Rosetta has not assigned, licensed, sublicensed, granted
any interest in or options to the Licensed Intellectual Property or the Licensed
Products in the Prometheus Territory to any Third Party in violation of this
Agreement and shall not do so during the Term.

     

    7.3.9           The
Rosetta Owned Patents and, to Rosetta’s knowledge, the Rosetta Upstream Licensed
Patents are free and clear of all Encumbrances that could (if foreclosed upon or
otherwise) (a) restrict Prometheus’ Limited Exclusive license thereunder as
granted under this Agreement or use thereof as otherwise permitted under this
Agreement or (b) provide a Third Party with rights in the Licensed Patents which
conflict with Prometheus’ Limited Exclusive License.  Rosetta shall
ensure that the Rosetta Owned Patents and its license rights under the Rosetta
Upstream Licensed Patents remain free and clear of such Encumbrances during the
Term of this Agreement.

     

    7.3.10    Product Technical
Information.

     

    (a)          It
has taken commercially reasonable measures to protect the secrecy,
confidentiality and value of the Product Technical Information. 

     

    (b)           To
Rosetta’s knowledge, no event has occurred as of the Effective Date which has
resulted in the unauthorized use or disclosure of any Product Technical
Information or which otherwise resulted in any Product Technical Information
falling into the public domain.

     

    (c)           Rosetta
has the right to grant Prometheus the Limited Exclusive license to the Product
Technical Information in the Prometheus Territory as provided
hereunder.

     

    (d)           As
of the Effective Date, the Product Technical Information is, and will at all
times thereafter remain, free and clear of all Encumbrances that could restrict
Prometheus’ rights to use such Product Technical Information as granted under
this Agreement.

     

    7.3.11    Exploitation of Licensed
Intellectual Property.

     

    (a)           As
of the Effective Date, Rosetta has not received any written Claim alleging that
Rosetta’s or its licensees’ development, use or Exploitation of the Licensed
Intellectual Property or the Licensed Products infringe, or misappropriate any
intellectual property rights of any Third Party (including any Claim that
Rosetta or its licensees must license or refrain from using any intellectual
property rights of any Third Party in order to Exploit the Diagnostic
Tests).

     

    (b)           As
of the Effective Date, to Rosetta’s knowledge, except as may be disclosed in the
Stock Purchase Agreement, there are no facts which would form a reasonable basis
for any Claim of infringement or misappropriation of any intellectual property
rights of any Third Party related to the development or use of the Licensed
Intellectual Property or the Diagnostic Tests, and Rosetta shall promptly notify
Prometheus if it receives notice of any claim or other information at any time
during the Term that would render this representation untrue.

     

    (c)           As
of the Effective Date, to Rosetta’s knowledge, no Third Party has interfered
with, infringed upon, or misappropriated the Licensed Intellectual Property, and
Rosetta shall promptly notify Prometheus if it receives notice of any claim or
other information at any time during the Term that would render this
representation untrue.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 43
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    (d)           As
of the Effective Date, to Rosetta’s knowledge, no Claim is pending or is
threatened which challenges the legality, validity, enforceability, use, or
ownership of any Licensed Intellectual Property, and to Rosetta’s knowledge,
there are no facts which would form a reasonable basis for any such
Claim.

     

    (e)           As
of the Effective Date, to Rosetta’s knowledge, the Exploitation of the
Diagnostic Tests, in the form (if any) in which they exist as of the Effective
Date, in the Prometheus Territory as currently contemplated in this Agreement
does not and will not interfere with, infringe upon, or misappropriate, any
intellectual property rights of any Third Party.

     

    (f)           As
of the Effective Date, The Mets Software does not and will not infringe the
copyrights or misappropriate the trade secrets of any Third Party.

     

    7.4           Regulatory
Matters.  Rosetta
represents and warrants to Prometheus that  Rosetta holds, and is
operating in material compliance with, such exceptions, permits, licenses,
franchises, authorizations and clearances of all Regulatory Authorities required
in connection with the development up to the Effective Date of the Diagnostic
Tests.  Rosetta further represents and warrants to Prometheus that it
has not received any warning letters or written correspondence from any
governmental entity requiring the termination, suspension or modification of any
studies or tests with respect to the Diagnostic Tests.  

     

    7.5           Compliance with
Laws.

     

    7.5.1           Each
Party represents and warrants to that other Party that it is in compliance in
all material respects with all Laws that are applicable to its ownership
interest in, or the operation or use of the Diagnostic Tests, and there are no
events, conditions, circumstances, activities, practices, incidents or actions
known to such Party relating thereto that would interfere with or prevent
compliance or continued compliance with or give rise to any liabilities or
investigative, corrective or remedial obligations under applicable Laws, except
as set forth in the following sentence.  The Parties acknowledge that
as of the Effective Date there are certain state license applications in New
York, Florida, Maryland and California which are currently pending that may be
required to be issued prior to Rosetta’s performance of the Diagnostic Tests
under the Services Agreement on specimens from patients in such
states.  Rosetta shall use commercially reasonable efforts to obtain
all such licenses and upon their issuance, Rosetta shall maintain such state
license in good standing for the remainder of the term of the Services
Agreement.

     

    7.5.2           Prometheus
represents and warrants that the Exploitation of the Licensed Products in the
Prometheus Territory by it or its Affiliates, and any performance of the
Diagnostic Tests by Sublicensees, shall comply in all material respects with all
applicable Laws.

     

    7.6           Existing Research
Agreements.  Rosetta
represents and warrants that a true and complete copy of each Existing Research
Agreement and any and all amendments thereto as of the Effective Date have been
provided to Prometheus.

     

    7.7           Legal
Proceedings.  Rosetta
represents and warrants to Prometheus that there is no pending Proceeding (a)
that has been commenced by or against Rosetta or any of its Affiliates or that
otherwise relates to or may affect the Licensed Intellectual Property, or (b)
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions contemplated by this
Agreement.  To the knowledge of Rosetta, (i) no such Proceeding has
been threatened, and (ii) no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such
Proceeding.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 44
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    7.8           Financial
Condition.  Rosetta
represents and warrants to Prometheus that, as of the Effective Date, (a) it has
not initiated a voluntary proceeding under any applicable bankruptcy code, and
(b) there is no involuntary proceeding under any applicable bankruptcy code
pending against Rosetta.

     

    8.           INDEMNIFICATION

     

    8.1           Indemnification by
Rosetta.  Rosetta
shall indemnify and hold harmless Prometheus and its Affiliates, Sublicensees
and each of their respective employees, officers, directors and agents (each a
“Prometheus
Indemnitee”) from and against (a) any and all fines, sanctions,
liabilities, losses and damages (“Losses”) finally
awarded to a Third Party by a court of competent jurisdiction or finally imposed
by any government agency that result from any Claim made or brought against a
Prometheus Indemnitee by or on behalf of such Third Party or such government
agency, and (b) subject to Section 8.3, any direct out-of-pocket costs and
expenses (including reasonable attorneys’ fees) (“Litigation Costs”)
incurred by a Prometheus Indemnitee while investigating or conducting the
defense of such Claim, in any such case (a) and (b), solely to the extent such
Claim is based on or arises out of (i) the breach by Rosetta of any
representation, warranty or covenant contained in this Agreement; (ii) any Third
Party Claim that Rosetta misappropriated, willfully disclosed or made available
to Prometheus any Licensed Intellectual Property in violation of an obligation
of Rosetta to such Third Party; (iii) the Exploitation of a Licensed Product or
a Prometheus Improvement by Rosetta, its Affiliates or its licensees outside the
Prometheus Territory; (iv) a Rosetta Indemnitee’s breach of any Upstream License
Agreement or any indemnification claim by an Upstream Licensor to the extent
that such breach or indemnification claim did not arise from a Prometheus
Indemnitee’s breach of Section 2.5 (Compliance with Upstream License Agreements)
or any requirements binding on sublicensees under an Upstream License Agreement
arising after the Effective Date and accepted by Prometheus pursuant to Section
2.6; (v) a Claim by an Upstream Licensor for breach of confidentiality arising
from such Prometheus Indemnitee’s use, in strict accordance with this Agreement,
of Rosetta Confidential Information that is proprietary to such Upstream
Licensor but which was not timely identified as such by Rosetta pursuant
to Section 6.1.5, or (vi) a breach by a Rosetta Indemnitee or Rosetta
sublicensee of any applicable term of a Third Party license agreement entered
into between Prometheus and such Third Party concerning a Prometheus Product
Improvement sublicensed to Rosetta hereunder, provided,
however, in each case that such indemnification right shall not apply to any
Claims, Losses or Litigation Costs (x) to the extent directly attributable to
the negligence, reckless misconduct, or intentional misconduct of a Prometheus
Indemnitee or Prometheus’ breach of this Agreement, or (y) for which Prometheus
is obligated to indemnify Rosetta under Section 8.2.

     

    8.2           Indemnification by
Prometheus.  Prometheus
shall indemnify and hold harmless Rosetta and its Affiliates, and the Upstream
Licensors and each of their respective employees, officers, directors and agents
(each a “Rosetta
Indemnitee”) from and against (a) any and all Losses finally awarded to a
Third Party by a court of competent jurisdiction or finally imposed by any
government agency that result from any Claim made or bought against an Rosetta
Indemnitee by or on behalf of such Third Party or such government agency, and
(b) subject to Section 8.3, any Litigation Costs incurred by an Rosetta
Indemnitee while investigating or conducting the defense of such Claim, in any
such case (a) and (b), solely to the extent such Claim is based on or arises out
of (i) the breach by Prometheus of any representation, warranty or covenant
contained in this Agreement; or (i) the Exploitation of the Licensed Products by
Prometheus, its Affiliates or its Sublicensees; provided, however, that such
indemnification right shall not apply to any Claims, Losses or Litigation Costs
(x) to the extent directly attributable to the negligence, reckless misconduct,
or intentional misconduct of an Rosetta Indemnitee or Rosetta’s breach of this
Agreement, (y) for which Rosetta is obligated to indemnify Prometheus under
Section 8.1, or (z) based on or arising out of a breach of any Upstream License
Agreement or any indemnification claim by an Upstream Licensor to the extent
that such
breach or indemnification claim did not arise from a Prometheus Indemnitee’s
breach of Section 2.5 (Compliance with Upstream License Agreements) or any
requirements binding on sublicensees under an Upstream License Agreement arising
after the Effective Date and accepted by Prometheus pursuant to Section
2.6.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 45
-

        
          

        

      

      
        
        

      

    

     

    8.3           Indemnification
Procedures.  Promptly
after receipt by a party seeking indemnification under this Section 8 (an “Indemnitee”) of
notice of any pending or threatened Claim against it, such Indemnitee shall give
written notice thereof to the Party from whom the Indemnitee is entitled to seek
indemnification pursuant to this Section 8 (the “Indemnifying Party”);
provided that the failure so to notify the Indemnifying Party shall not relieve
it of any liability that it may have to any Indemnitee hereunder, except to the
extent the Indemnifying Party demonstrates that it is materially prejudiced
thereby.  The Indemnifying Party shall be entitled to participate in
the defense of such Claim and, to the extent that it elects within ten (10)
business days of its receipt of notice of the Claim from the Indemnitee, to
assume control of the defense of such Claim (unless (i) the Indemnifying Party
is also a party to such proceeding and the Indemnifying Party has asserted a
cross claim against the Indemnitee or a court has otherwise determined that such
that joint representation would be inappropriate, or (ii) the Indemnifying Party
fails to provide reasonable assurance to the Indemnitee of its financial
capacity to defend the Indemnitee in such Proceeding) with counsel reasonably
satisfactory to the Indemnitee and, after notice from the Indemnifying Party to
the Indemnitee of its election to assume the defense of such Claim, the
Indemnifying Party shall not, as long as it diligently conducts such defense, be
liable to the Indemnitee for any Litigation Costs subsequently incurred by the
Indemnitee.  The Indemnitee shall provide the Indemnifying Party with
such information and assistance as the Indemnifying Party may reasonably request
with regard to the Claim.  No compromise or settlement of any Claim
may be effected by the Indemnifying Party without the Indemnitee’s written
consent, which consent shall not be unreasonably withheld or delayed, unless (a)
there is no finding or admission of any violation of Law or any violation of the
rights of any person and no effect on any other claims that may be made against
the Indemnitee, (b) the sole relief provided is monetary damages that are paid
in full by the Indemnifying Party, and (c) the Indemnitee’s rights under this
Agreement are not restricted by such compromise or settlement.

     

    8.4           Insurance.  Each
of Rosetta and Prometheus shall have and maintain such type and amounts of
liability insurance covering its activities under this Agreement as is normal
and customary in the clinical laboratory industry generally for parties
similarly situated.  Each Party shall, upon request of the other
Party, provide the requesting Party with a copy of the foregoing policies of
insurance, along with any amendments and revisions
thereto.  

     

    
      	
              9.

            	
              TERM
      AND TERMINATION

            

    

     

    9.1           Term.  The
term of this Agreement shall begin upon the Effective Date and shall continue
through the date upon which the last Valid Claim covering a Licensed Product
expires, or solely with respect to Royalty-Bearing Technical Information, such
additional duration as is required by the applicable Upstream License Agreement
(the “Term”).

     

    9.2           Termination
of Agreement for Breach.  Either
Party may terminate this Agreement and the License for material breach of this
Agreement by the other Party by giving sixty (60) days’ written notice to the
breaching Party (specifying in reasonable detail the basis for such termination)
and such breaching Party has not cured such breach within such sixty (60) day
period, except in the case of a payment default as to which the breaching Party
shall have only a thirty (30) day notice and cure period.  For the
avoidance of doubt, and without limitation, any material breach by either Party
of its diligence obligations under Section 3.2 to use Commercially Reasonable
Efforts, Prometheus’ material breach of its payment obligations under Section 4,
Rosetta’s material breach of its Limited Exclusive license grant under Section
2.1, and Prometheus’ material breach of its diligence obligations under Section
3.4.3, shall be deemed a material breach of this Agreement for the purposes of
this Section 9.2.  Notwithstanding the foregoing, if any material
breach relates to one or more Licensed Products but not all of the Licensed
Products then the non-breaching party shall only be permitted to terminate this
Agreement on a product-by-product basis with the rights and obligations with
respect to unaffected Licensed Products remaining in full force and effect,
provided that, notwithstanding the foregoing, the non-breaching party shall be
entitled to terminate the Mesothelioma Test and the Squamous Test together if
the material breach related to either one.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 46
-

        
          

        

      

      
        
        

      

    

     

    9.3           Termination of Agreement for
Insolvency.  A
Party may terminate this Agreement and the License upon the occurrence of one or
more of the following:

     

    9.3.1           immediately
upon written notice to the other Party in the event that the other Party
initiates a voluntary proceeding under any applicable bankruptcy code;
or

     

    9.3.2           immediately
upon written notice to the other Party in the event that the other Party becomes
the subject of an involuntary proceeding under any applicable bankruptcy code
and such proceeding is not dismissed or stayed within ninety (90) days of its
commencement.

     

    9.4           Termination of Agreement for
Convenience by Prometheus.  
Prometheus may terminate this Agreement upon not less than [***] written notice
to Rosetta in its entirety or as to one or more of the Licensed Products only,
provided that any termination as to the Mesothelioma Test shall be deemed also
to be a termination as to the Squamous Test, and vice versa.  Upon
notice by Prometheus of its intent to terminate, Prometheus shall work with
Rosetta in good faith to avoid devaluing the Licensed Products during such
notice period and to complete any work in progress during such time but
Prometheus shall not be obligated to make material expenditures during such
notice period.

     

    9.5           Termination for Challenge to
Licensed Patents.   This
Agreement, and all licenses granted to Prometheus hereunder, may be terminated
by Rosetta on [***] prior written notice (or with respect to any Upstream
Licensed Patent, any shorter period to the extent required under its Upstream
License Agreements) in the event that Prometheus or a Prometheus Affiliate
directly or indirectly opposes or disputes, or willingly (e.g., it shall not be deemed
willing if Prometheus is required to participate in an opposition pursuant to a
subpoena or court order or a proceeding is otherwise initiated by the United
States Patent and Trademark office other than at the instigation
of Prometheus, and not by Prometheus) assists any Third Party to oppose or
dispute, the validity or enforceability of any of the Licensed Patents in a
court of competent jurisdiction or in proceedings before the United States
Patent and Trademark Office or any other national patent office or
supra-national patent authority established pursuant to international treaty,
including under the auspices of the European Union, provided that (and with
respect to any Upstream Licensed Patent, to the extent such an exception is
consistent with the applicable Upstream License Agreement) an Upstream Licensor,
Rosetta, its Affiliates and/or any of its licensees have not asserted such
Licensed Patents against Prometheus.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 47
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    9.6           Procedure upon Termination
or Expiration of Agreement.  Termination
shall not relieve either Party of any obligations which have accrued prior to
the effective date of such termination.  In the case of any breach of
the terms of the License, a decision not to terminate does not reduce or
eliminate any recourse otherwise available to either Party.  Upon the
natural expiration or any termination of this Agreement by Rosetta pursuant to
Section 9.2, 9.3, or 9.5, or by Prometheus pursuant to Section 9.2 or 9.4, all
rights under the License and any license to Rosetta Improvements granted to
Prometheus or its Affiliates hereunder shall automatically terminate and revert
to Rosetta.  Upon any termination of this Agreement by Prometheus
pursuant to 9.3, or the occurrence of any event set forth therein regardless of
termination by Prometheus, in addition to any other rights or remedies
Prometheus may have at law or in equity for breach, all rights and licenses
herein granted to Prometheus in any Licensed Patents shall be irrevocable and
shall continue in full force and effect in perpetuity, subject to Prometheus’s
payment of all amounts due hereunder, as if this Agreement remained in full
force and effect, into the bankruptcy estate or as otherwise directed by a
competent legal authority having jurisdiction over such matters.  The
Parties agree that the terms of this Agreement are fair and reasonable and have
been negotiated in an arms-length transaction between unrelated parties with
each Party represented by legal counsel.  If any provision herein is
deemed onerous or otherwise unenforceable by any applicable bankruptcy court,
the Parties shall use good faith efforts to amend the Agreement (e.g., removing such onerous
provision) so as to avoid any consequences thereof under applicable bankruptcy
laws.

     

    9.6.1           Upon
termination of this Agreement or a Licensed Product by Prometheus for any
reason, Prometheus and its Affiliates and Sublicensees shall have the
non-exclusive right to continue to supply the terminated Licensed Products
within its Control for a period not to exceed [***] from the date of notice of
termination.  In addition, upon the termination of this Agreement by
Prometheus pursuant to Section 9.4 or by Rosetta pursuant to Section 9.2,
Prometheus shall grant Rosetta an exclusive license under and transfer to
Rosetta all Prometheus owned rights in the Licensed Products, the Regulatory
Filings and Regulatory Approvals (and provide prompt written notice to the
applicable Regulatory Authorities of such transfers), any domain names
registered to Prometheus or its Affiliates and utilized exclusively in
connection with the Licensed Products and not in connection with Prometheus’
and/or its Affiliates’ other products or services, and any Prometheus (or its
Affiliates) owned trademarks or trademarks licensed from Third Parties to
Prometheus or its Affiliates and utilized exclusively in connection with the
Licensed Products and not in connection with Prometheus’ and/or its Affiliates’
other products or services.  The Parties shall negotiate in good faith
fair and reasonable license and transfer fees for the foregoing, provided that
if the Parties are unable to negotiate such financial terms and execute an
addendum or agreement with respect thereto, a fair market value shall be
determined pursuant to the dispute resolution provisions set forth in Section
11.

     

    9.7           Survival.  Except
as expressly provided herein, Articles and Sections 5.3.7, 6 (Confidential
Information), 8 (Indemnification), 9.6 (Procedure Upon Termination or Expiration
of Agreement), 10 (Limitation of Liability), 11 (Dispute Resolution), 12.7
(Injunctive Relief), 12.8 (Notices) and 12.14 (Applicability of Section 365(n)
of the Bankruptcy Code), all definitions used in any of the foregoing articles
or sections, and any accrued rights to payment shall survive any expiration or
early termination of this Agreement.

     

    
      	
              10.

            	
              LIMITATION OF
      LIABILITY

            

    

     

    EXCEPT
WITH RESPECT TO ANY INDEMNIFICATION OBLIGATION OWED WITH RESPECT TO A THIRD
PARTY LOSS, A BREACH OF ARTICLE 6 (CONFIDENTIAL INFORMATION)
OR  INFRINGEMENT OF A PARTY’S INTELLECTUAL PROPERTY RIGHTS, NEITHER
PARTY SHALL BE LIABLE (NOR SHALL ITS LICENSORS BE LIABLE) TO THE OTHER PARTY
UNDER ANY CIRCUMSTANCES OR ANY LEGAL OR EQUITABLE THEORY, WHETHER IN CONTRACT,
STRICT LIABILITY OR OTHERWISE, FOR ANY CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOST
PROFITS ARISING OUT OF OR RELATED TO THE LICENSED INTELLECTUAL PROPERTY OR TO
THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE
LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OR ANY
LIMITED REMEDY.  NOTWITHSTANDING THE FOREGOING, THESE LIMITATIONS
SHALL NOT APPLY TO ANY THIRD-PARTY CLAIM THAT IS THE SUBJECT OF SECTION 9, TO
THE EXTENT SUCH THIRD PARTY HAS BEEN AWARDED SUCH DAMAGES.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 48
-

        
          

        

      

      
        
        

      

    

     

     

    
      	
              11.

            	
              DISPUTE
      RESOLUTION

            

    

     

    11.1           Informal
Resolution.  Subject
to Section 12.7, in the event of any controversy, dispute or claim arising out
of, in connection with, or in relation to the interpretation, performance, or
alleged breach of this Agreement (the “Dispute”), prior to
instituting any arbitration on account of such Dispute, the Parties shall
attempt in good faith to settle such Dispute first by negotiation and
consultation between themselves, including referral of such Dispute to the Chief
Executive Officer of Prometheus and the Chief Executive Officer of
Rosetta.  In the event said executives are unable to resolve such
Dispute or agree upon a mechanism to resolve such Dispute within thirty (30)
days of the first written request for dispute resolution under this Section
11.1, then the Parties shall resolve all such Disputes in accordance with
Section 11.2.

     

    11.2           Arbitration.  Subject
to Section 12.7, if any Dispute has not been resolved by good faith negotiations
between the Parties pursuant to Section 11.1 above, then the Parties shall
settle the Dispute by submitting the matter to binding arbitration in accordance
with Rules of the International Chamber of Commerce. The arbitration shall be
held in the English language in New York.  In any such arbitration,
Prometheus shall select one (1) arbitrator and Rosetta shall select one (1)
arbitrator, who, in each case, shall have substantial expertise in the human
diagnostics industry and shall be fluent in English.  The arbitrators
selected by the Parties shall select a third arbitrator to act as Chairman, who
shall be an experienced lawyer or judge (or retired lawyer or judge) and fluent
in English.  Judgment upon the award may be entered in any court
having jurisdiction.

     

    11.3           Escrow. 
In the event that any Dispute in excess of [***] is not resolved by the Chief
Executive Officers within thirty (30) days after submission of the Dispute to
the Executive Officers, and either Party initiates arbitration pursuant to
Section 11.2, Prometheus shall have the obligation to pay into an escrow account
(the “Escrow
Account”) with a mutually acceptable, reputable commercial bank in the
USA (the “Escrow
Agent”) the amount of royalties are other amounts allegedly owed
hereunder which Prometheus withheld as set-off for Prometheus’ reasonably
claimed monetary damages in accordance with Section 12.2, subject to the
following conditions:

     

    11.3.1    The Parties
shall split all costs relating to the Escrow Account, including setting up and
maintaining the Escrow Account, provided that, the arbitrator shall have the
right to award the costs relating to the Escrow Account to the Party prevailing
in such arbitration.

     

    11.3.2    All amounts
paid into the Escrow Account in excess of any damages awarded to Prometheus
shall be paid by the Escrow Agent promptly to Rosetta upon proof of
determination of the Dispute, with interest on such amount calculated from the
date such royalties were due at the lower of either [***] per year or the
maximum amount permitted by applicable Law.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 49
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    11.4           Governing
Law.  This
Agreement shall be governed by the laws of the State of New York, excluding that
body of law known as conflicts of law.

     

    
      	
              12.

            	
              MISCELLANEOUS

            

    

     

    12.1           Unenforceability.  Both
Parties hereby expressly state that it is the intention of neither Party to
violate any Law.  If any of the provisions of this Agreement are held
to be void or unenforceable, then the Parties shall use good faith efforts for a
period of no more than ten (10) business days to replace such void or
unenforceable provisions with valid and enforceable provisions which will
achieve as far as possible the economic business intentions of the Parties,
failing which, such void or unenforceable provisions shall be deemed to be
severed from this Agreement without replacement.

     

    12.2           Compliance with
Law.  Each
Party shall comply with and shall use Commercially Reasonable Efforts to ensure
that its and its Affiliates’ and sublicensees’ respective employees, agents,
clinical institutions and clinical investigators comply with all applicable Laws
in carrying out its rights and obligations under this Agreement.

     

    12.3           No Waiver.  The
failure by either Party to take any action or assert any right hereunder shall
in no way be construed to be a waiver of such right, nor in any way be deemed to
affect the validity of this Agreement or any part hereof, or the right of a
Party to thereafter enforce each and every provision of this
Agreement.

     

    12.4           Drafting; Fairness of
Agreement.  This
Agreement shall not be construed more strictly against one Party than the other
because it may have been drafted by one of the Parties or its counsel, each
Party having contributed through its counsel substantially and materially to the
negotiation and drafting thereof pursuant to an arms-length
negotiation.  Furthermore, the Parties acknowledge and agree that the
terms and conditions set forth herein and the rights, obligations and
consideration afforded to each of the Parties, are fair and reasonable, are not
excessively onerous to one Party or the other  and are not materially
outside the scope of what can reasonably considered market terms.

     

    12.5           Assignment.  This
Agreement and the Parties’ rights and obligations hereunder shall not be
assignable except with the prior written consent of the other Party, not to be
unreasonably withheld, conditioned or delayed, except that  either
Party shall have the right to assign this Agreement or its rights and
obligations under this Agreement without the other Party’s prior written consent
to any of its Affiliates, successors in interest or acquiror of all or
substantially all of its assets relating to the Licensed Intellectual Property
and the Licensed Products, including any successor in interest by way of any
merger, consolidation, reincorporation or other reorganization; provided that
such Affiliate, successor in interest or acquiror assumes all of such Party’s
obligations under this Agreement (a “Permitted
Successor”).  In addition, Rosetta covenants and agrees that it
shall not assign, without Prometheus’ consent, which shall not be unreasonably
withheld, any of the Licensed Intellectual Property to any Third Party other
than to a Permitted Successor.

     

    12.6           Relationship of the
Parties.  In
making and performing this Agreement, the Parties are acting, and intend to be
treated, as independent entities and nothing contained in this Agreement shall
be construed or implied to create an agency, partnership, joint venture, or
employer and employee relationship between or among any of the
Parties.  Except as otherwise provided herein, no Party may make any
representation, warranty or commitment, whether express or implied, on behalf of
or incur any charges or expenses for or in the name of any other
Party.  No Party shall be liable for the act of any other Party unless
such act is expressly authorized in writing by such Party.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 50
-

        
          

        

      

      
        
        

      

    

     

    12.7           Injunctive
Relief.  Each
of the Parties agrees that in the event of any breach of Article 6 (Confidential
Information), (a) severe and irreparable damage would occur, (b) no adequate
remedy at law would exist, and (c) damages would be difficult to
determine.  Each of the Parties agrees that, in such case, the injured
Party shall be authorized and entitled to obtain from any court of competent
jurisdiction injunctive relief, whether preliminary or permanent, as well as any
other relief permitted by applicable law, and the breaching Party shall waive
any requirement that such Party post bond as a condition for obtaining any such
relief.

     

    12.8           Notices.  Every
notice, election, demand, consent, request, approval, report, offer, acceptance,
certificate, or other communication required or permitted under this Agreement
or by applicable Law shall be in writing and shall be deemed to have been
delivered and received (a) when personally delivered, (b) on the seventh (7th)
business day after which sent by registered or certified mail, postage prepaid,
return receipt requested,
(c) on the date on which transmitted by facsimile or other electronic means
generating a receipt evidencing a successful transmission (provided that, on
that same date, a copy of such notice is sent by registered or certified mail,
postage prepaid, return receipt requested), or (d) on the third (3rd)
business day after the business day on which deposited with a regulated public
carrier (e.g., Federal Express) for overnight delivery (receipt verified),
freight prepaid, addressed to the party for whom intended at the mailing address
or facsimile number set forth below, or such other mailing address or facsimile
number, notice of which is given in a manner permitted by this Section
12.8.

     

    For
Rosetta:

    

    Rosetta
Genomics Ltd.

    10 Plaut
St.

    Rehovot

    Israel,
76706

    Attn:
CEO

    Facsimile:
+972.73.222.0701

    

    With a copy (which shall not
constitute notice) to:

    

    Office of
General Counsel

    10 Plaut
St.

    Rehovot

    Israel,
76706

    Attn:
Tami Fishman Jutkowitz

    

    And a second copy (which
shall not constitute notice) to:

    

    Mintz
Levin PC

    One
Financial Center

    Boston,
MA 02111

    USA

    Attn:
Jeff Wiesen

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 51
-

        
          

        

      

      
        
        

      

    

    

    For
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

     

    12.9    Entire Agreement.  This
Agreement and the Annexes and Schedules hereto (which are hereby incorporated
herein) contain the entire understanding between the Parties relating to the
subject matter hereof and supersedes any and all prior agreements,
understandings and arrangements, whether written or oral, between the Parties
hereto relating to such subject matter and to the extent relating to the
Licensed Products.  No amendments, changes, modifications, waivers or
alterations of the terms and conditions of this Agreement shall be binding upon
either Party hereto unless in writing and signed by both Parties.

     

    12.10    Force
Majeure.  If
and to the extent that either Party is prevented or delayed by a Force Majeure
Event from performing any of its obligations under this Agreement and promptly
so notifies the other Party, specifying the matters constituting the Force
Majeure Event together with such evidence in verification thereof as it can
reasonably give and specifying the period for which it is estimated that the
prevention or delay will continue, then the Party so affected shall be relieved
of liability to the other for failure to perform or for delay in performing such
obligations (as the case may be), but shall nevertheless use its best endeavours
to resume full performance thereof, provided that if the Force Majeure Event
continues for a period of ninety (90) days or more following notification, the
Party not affected by the Force Majeure Event may terminate this Agreement by
giving not less than thirty (30) days prior notice to the other
Party.  In addition, neither Rosetta nor Prometheus shall be obligated
to make any payments for any part of any services not performed as a result of
any Force Majeure Event.

     

    12.11    Headings.  The
captions to the Sections hereof are not a part of this Agreement, but are merely
guides or labels to assist in locating and reading the several Sections
hereof.

     

    12.12    Right of
Set-Off.  Notwithstanding
anything to the contrary in this Agreement, Prometheus shall have a right to
set-off any Royalties or other amounts due to Rosetta under this Agreement only
against any damages incurred by Prometheus and/or its Affiliate under this
Agreement, subject to its obligations under Section 11.3.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 52
-

        
          

        

      

      
        
        

      

    

     

    12.13    Costs and
Expenses.  Except
as otherwise expressly set forth in Section 3.2.3 or 3.2.4 or otherwise in the
Development Plan, each Party shall bear its own costs and expenses in performing
its obligations under the Development Plan and this Agreement.

     

    12.14    Applicability of Section
365(n) of the Bankruptcy Code.

     

    12.14.1    In the event
Rosetta becomes a debtor under Title 11 of the U.S. Code, this Agreement shall
be deemed to be, for purposes of Section 365(n) of Title 11, a license to
“Intellectual Property” as defined therein and Prometheus and its Affiliates,
and each of their successors and assigns as licensees shall have the rights and
elections as specified in Section 365(n) of Title 11 of the U.S.
Code.  Without limiting the foregoing, upon termination of this
Agreement by a trustee or executor of Rosetta which has
rejected this Agreement pursuant to any non-contractual rights afforded to it by
applicable bankruptcy law and/or a U.S. or foreign bankruptcy court or other
tribunal of competent jurisdiction, all rights and licenses herein granted to
Prometheus shall nonetheless continue in full force and effect in accordance
with the terms of this Agreement.

     

    12.14.2    In the event
Prometheus becomes a debtor under Title 11 of the U.S. Code, this Agreement
shall be deemed to be, for purposes of Section 365(n) of Title 11, a license to
“Intellectual Property” as defined therein and Rosetta and its Affiliates, and
each of their successors and assigns as licensees shall have the rights and
elections as specified in Section 365(n) of Title 11 of the U.S.
Code.  Without limiting the foregoing,, upon termination of this
Agreement by a trustee or executor of Prometheus which has rejected this
Agreement pursuant to any non-contractual rights afforded to it by applicable
bankruptcy law and/or a U.S. or foreign bankruptcy court or other tribunal of
competent jurisdiction, all rights and licenses herein granted to Rosetta shall
continue in full force and effect in accordance with the terms of this
Agreement.

     

    12.15    Counterparts.  This
Agreement may be executed in counterparts and each such counterpart shall be
deemed an original hereof.

     

    
      	
              13.

            	
              CLOSING.

            

    

     

    13.1           Closing
Date.  The
closing of the transactions, rights and obligations contemplated under this
Agreement (the “Closing”) shall take
place at the offices of Latham & Watkins, LLP, 12636 High Bluff Drive, Suite
400, San Diego, CA 92130 (or at such other place as the parties may designate in
writing) at 10:00 a.m. (local time) on a date to be specified by the parties,
but no later than April 30, 2009, unless another time or date, or both, are
agreed to in writing by the parties hereto.  The date on which the
Closing shall be held is referred to in this Agreement as the “Effective
Date.”

     

    13.2           Deliverables at Closing by
Rosetta.  At
or before the Closing, Rosetta shall deliver to Prometheus the items described
in clauses 13.2.1 through 13.2.5 below:

     

    13.2.1    an executed
copy of the Services Agreement to be attached as Annex C;

     

    13.2.2    the
pre-estimate of additional funding to be attached as Annex E pursuant to
Section 3.2.4(b);

     

    13.2.3    an executed
copy of the Max Planck written statement referenced in Section
7.3.7;

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 53
-

        
          

        

      

      
        
        

      

    

     

    13.2.4    an executed
copy of the Rockefeller written statement referenced in Section 7.3.7;
and

     

    13.2.5    an executed
copy of the THM written statement referenced in Section 7.3.7, in the form set
forth in Annex
I hereto.

     

    13.3           Deliverables at Closing by
Prometheus.  At
or before the Closing, Prometheus shall deliver to Rosetta the items described
in clauses 13.3.1 through 13.3.3 below:

     

    13.3.1    an executed
copy of the Services Agreement to be attached as Annex C;

     

    13.3.2    an executed
copy of the THM written statement referenced in Section 7.3.7.

     

    13.4           Conditions Precedent to
Obligations of Prometheus.  The
obligations of Prometheus under this Agreement to consummate the transactions
contemplated hereby at the Closing shall be subject to the satisfaction, at or
prior to the Closing, of all of the following conditions:

     

    13.4.1    The
representations and warranties made by Rosetta in this Agreement or in any
annex, exhibit, schedule or document delivered pursuant hereto shall be true and
complete in all material respects, in each case when made and as of the
Effective Date as if made on and as of that date (other than the representations
and warranties that refer to a specific date);

     

    13.4.2    All of the
terms, covenants and conditions to be complied with and performed by Rosetta on
or prior to the Effective Date shall have been complied with or performed in all
material respects;

     

    13.4.3    There shall
not be in effect any Law or court of competent jurisdiction restraining,
enjoining or otherwise preventing consummation of the transactions contemplated
by this Agreement;

     

    13.4.4    Since the
Execution Date, no loss or modification of or limitation on any Upstream License
Agreement shall have occurred without the written consent of Prometheus in its
sole discretion, including, but not limited to, any forfeiture, expiration
without renewal, termination or other loss thereof; and

     

    13.4.5    Prometheus
shall have received a certificate or certificates, dated as of the Closing,
executed on behalf of Rosetta, by an authorized executive officer thereof,
certifying in such detail as Prometheus may reasonably request that the
conditions specified in subsections 13.4.1-13.4.4 hereof have been
fulfilled.

     

    13.5           Conditions Precedent to
Obligations of Seller.  The
obligations of Rosetta under this Agreement to consummate the transactions
contemplated hereby at the Closing shall be subject to the satisfaction, at or
prior to the Closing, of all the following conditions:

     

    13.5.1    All
representations and warranties of Prometheus made in this Agreement or in any
annex, exhibit, schedule or document delivered pursuant hereto shall be true and
complete in all material respects, in each case when made and as of the
Effective Date as if made on and as of that date (other than representations and
warranties that refer to a specific date);

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 54
-

        
          

        

      

      
        
        

      

    

     

    13.5.2    All of the
terms, covenants and conditions to be complied with and performed by Prometheus
on or prior to the Effective Date shall have been complied with or performed in
all material respects; and

     

    13.5.3    There shall
not be in effect any Law or court of competent jurisdiction restraining,
enjoining or otherwise preventing consummation of the transactions contemplated
by this Agreement.

     

    13.6           Waiver of
Conditions.  Prometheus
may unilaterally and in its sole discretion waive any of the conditions to
Closing set forth herein.  Rosetta may unilaterally and in its sole
discretion waive any of the conditions to Closing set forth herein.

     

    13.7           Notifications.  Between
the Execution Date and the Effective Date, Rosetta, on the one hand, and
Prometheus, 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 Section 13.4 becoming incapable of being
satisfied; provided,
however, that the delivery of any notice pursuant to this Section shall
not limit or otherwise affect the remedies available hereunder to the Party
receiving such notice.

    

    13.8           No
Negotiation. 
Between the Execution Date and the Effective Date, Rosetta shall not directly or
indirectly solicit, initiate, encourage or entertain any inquiries or proposals,
discuss or negotiate with, provide any information to (other than the
publication and dissemination of the press release approved by Prometheus and
set forth in Annex
H), or consider the merits of any inquiries or proposals from any person
or entity (other than Prometheus) relating to any transaction involving, in
whole or in part, the Licensed Products, or that would otherwise compromise
Rosetta’s ability to consummate the transactions contemplated in this Agreement
or the Services Agreement.

     

    [Remainder
of Page Left Blank Intentionally]

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        - 55
-

        
          

        

      

      
        
        

      

    

     

    In
Witness Whereof, the parties hereto have executed this License
Agreement as of the date first set forth above.

     

    ROSETTA
GENOMICS LTD.

     

     

    By: 
/s/ Y.
Chelouche

    Name: Y.
Chelouche

    Title:
Chairman

     

     

    PROMETHEUS
LABORATORIES INC.

     

     

    By: 
/s/ Joseph M.
Limber

    Name:  Joseph
M. Limber

    Title:
President and Chief Executive Officer

     

    

    
      
        
          CONFIDENTIAL

           

          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
A

    Licensed
Intellectual Property

     

    ANNEX
A-1

     

    ISSUED
AND PENDING PRODUCT PATENTS

     

     

    Part
A:

     

    
      
        	 
      	
                Application

              	
                Assignee

              	
                Application
      No.

              
	
                1

              	
                [***]

              	
                [***]

              	
                [***]

              
	
                2

              	
                [***]

              	
                [***]

              	
                [***]

              
	
                3

              	
                [***]

              	
                [***]

              	
                [***]

              
	
                4

              	
                [***]

              	
                [***]

              	
                [***]

              

      

    

     

     

     

    PART
B:

     

    
      
        	 
      	
                Application

              	
                Assignee

              	
                Application
      No.

              
	
                1

              	
                [***]

              	
                [***]

              	
                [***]

              

      

    

    

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    ANNEX
A-2

     

    ISSUED
AND PENDING PLATFORM PATENTS

     

    

    
      Part
A:

       

      
        	 
      	
                Application

              	
                Assignee

              	
                Application
      No.

              
	
                1

              	
                [***]

              	
                [***]

              	
                [***]

              
	
                2

              	
                [***]

              	
                [***]

              	
                [***]

              
	
                3

              	
                [***]

              	
                [***]

              	
                [***]

              
	
                4

              	
                [***]

              	
                [***]

              	
                [***]

              

      

       

       

       

      PART
B:

       

      
        	 
      	
                Application

              	
                Assignee

              	
                Application
      No.

              
	 
      	
                [***]

              	
                [***]

              	
                [***]

              
	 
      	
                [***]

              	
                [***]

              	
                [***]

              

      

       

      
 

    

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
B

    Development
Plan

     

    [to be completed]

    

    

    

    FTE Rate for IBS and IBD
Test Development Work

    

    Rosetta
FTEs used in the performance of Development Program activities relating to the
IBS Test or IBD Test shall be budgeted at [***] US dollars [***] per
year.  Rosetta shall be entitled to deduct FTE payments and other
amounts from the Development Fund in accordance with the milestones for such
deductions set forth elsewhere in the Development Plan.

     

    

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
C

    Services
Agreement

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
D

    Service
Agreement Profits

     

    

     

    Cost of
Goods Sold:

     

    Mesothelioma
Test: [***] plus [***] of the prices stipulated in the Fee Schedule attached as
Exhibit 1 to
the Services Agreement

     

    Squamous
Test: [***] plus [***]of the prices stipulated in the Fee Schedule attached as
Exhibit 1 to
the Services Agreement

     

    Mets
Test: [***] plus [***] of the prices stipulated in the Fee Schedule attached as
Exhibit 1 to
the Services Agreement

     

    The cost
of goods sold for the Second Generation Mets Test, the IBS Test, and the IBD
Test shall be determined taking into account the same elements (allowing for
changes to the commercial technology platform) as the other Diagnostic Tests set
forth above.

     

    Either
Party shall have the right, no more than once every six (6) months during the
Term, to request a review of Rosetta’s cost of goods sold and to make any
necessary increase or decrease to the amounts set forth above resulting from
such review.  In connection with the foregoing, within thirty (30)
days of such request, Rosetta shall provide Prometheus with reasonable written
evidence of any actual change in Rosetta’s cost of goods sold.  Unless
otherwise disputed by Prometheus in accordance with Section 11 of the Agreement,
the adjustment to the costs of goods sold shall take effect ten (10) business
days after Rosetta provides Prometheus with reasonable written evidence of such
change.

     

    

     

    

    

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
E

    Estimate
for Additional Development Expenses

     

     

    [***]

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
F

    Existing
Research Agreements

     

    
      	
              1.

            	
              Material
      Transfer Agreement between University of Iowa Research Foundation and
      Rosetta Genomics Ltd. Dated February 3,
2009;

            

    

     

    
      	
              2.

            	
              Research
      and License Agreement between the University of Texas M.D. Anderson Cancer
      Center and Rosetta Genomics Ltd. Dated April 2008;
  and

            

    

     

    
      	
              3.

            	
              Research
      Agreement between the Johns Hopkins University and Rosetta Genomics Ltd.
      Dated August 27, 2008.

            

    

     

    

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
G

    Selected
Provisions of JHU Agreement

     

    The
paragraph numbers below refer to paragraphs in the JHU Agreement as of the
Effective Date.  All capitalized terms used in below in this Annex
G  have the definitions set forth in the JHU Agreement, provided that
references to Company shall be interpreted as applying to
Prometheus.

    

    6.2           Representations by
JHU.  JHU warrants that it has good and marketable title to its
interest in the inventions claimed under PATENT RIGHTS with the exception of
certain retained rights of the United States Government, which may apply if any
part of the JHU research was funded in whole or in part by the United States
Government, and HHMI.  JHU warrants and represents that it has no
knowledge of any legal suit, proceeding or claim of ownership by a third party
contesting JHU’s ownership or the validity of the PATENT RIGHTS.  JHU
does not warrant the validity of any patents or that practice under such patents
shall be free of infringement.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
PARAGRAPH 6.2, COMPANY, AFFILIATED COMPANIES AND SUBLICENSEE(S) AGREE THAT THE
PATENT RIGHTS ARE PROVIDED “AS IS”, AND THAT JHU MAKES NO REPRESENTATION OR
WARRANTY WITH RESPECT TO THE PERFORMANCE OF LICENSED PRODUCT(S) INCLUDING THEIR
SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY.  JHU DISCLAIMS ALL
WARRANTIES WITH REGARD TO PRODUCT(S) AND SERVICE(S) LICENSED UNDER THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESSED OR IMPLIED,
OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR
PURPOSE.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, JHU
ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF JHU AND
INVENTORS, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT,
SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS’ AND EXPERTS’ FEES, AND COURT
COSTS (EVEN IF JHU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR
COSTS), ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR SALE OF
THE PRODUCT(S) AND SERVICE(S) LICENSED UNDER THIS AGREEMENT.  COMPANY,
AFFILIATED COMPANIES AND SUBLICENSEE(S) ASSUME ALL RESPONSIBILITY AND LIABILITY
FOR LOSS OR DAMAGE CAUSED BY A PRODUCT AND/OR SERVICE MANUFACTURED, USED, OR
SOLD BY COMPANY, ITS SUBLICENSEE(S) AND AFFILIATED COMPANIES WHICH IS A LICENSED
PRODUCT(S) OR AS DEFINED IN THIS AGREEMENT.

    

    7.1           Indemnification.  JHU,
HHMI and the Inventors will have no legal liability exposure to third parties if
JHU does not license the LICENSED PRODUCT(S), and any royalties JHU, HHMI and
the Inventors may receive is not adequate compensation for such legal liability
exposure.  Therefore, JHU requires Company to protect JHU, HMMI and
the Inventors from such exposure to the same manner and extent to which
insurance, if available, would protect JHU, HHMI and
Inventors.  Furthermore, JHU, HHMI and the Inventors will not, under
the provisions of this Agreement or otherwise, have control over the manner in
which Company or its AFFILIATED COMPANIES or its SUBLICENSEE(S) or those
operating for its account or third parties who purchase LICENSED PRODUCT(S) from
any of the foregoing entities, develop, manufacture, market or practice the
inventions of LICENSED PRODUCT(S).

    

    a)           Company,
AFFILIATED COMPANY and SUBLICENSEE shall indemnify, defend with counsel
reasonably acceptable to JHU, and hold JHU, The Johns Hopkins Health Systems,
their present and former trustees, officers, Inventors of PATENT RIGHTS, agents,
faculty, employees and students harmless as against any judgements, fees,
expenses, or other costs arising from or incidental to any product liability or
other lawsuit, claim, demand or other action brought as a consequence of the
practice of said inventions by any of the foregoing entities, whether or not JHU
or said Inventors, either jointly or severally,
is named as a party defendant in any such lawsuit and whether or not JHU or the
Inventors are alleged to be negligent or otherwise responsible for any injuries
to persons or property.  Practice of the inventions covered by
LICENSED PRODUCT(S) by an AFFILIATED COMPANY or an agent or a SUBLICENSEE(S) or
a third party on behalf of or for the account of Company or by a third party who
purchases LICENSED PRODUCT(S) from Company, shall be considered Company’s
practice of said inventions for purposes of this Paragraph.  The
obligation of Company to defend and indemnify as set out in this Paragraph
7.1(a) shall survive the termination of this Agreement, shall continue even
after assignment of rights and responsibilities to an AFFILIATED COMPANY or
SUBLICENSEE, and shall not be limited by any other limitation of liability
elsewhere in this Agreement.

     

    
 

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    

    b)           HHMI
and its trustees, officers, employees, and agents (collectively, “HHMI
Indemnitees”), will be indemnified, defended by counsel acceptable to HHMI, and
held harmless by Company, AFFILIATED COMPANY and SUBLICENSEE from and against
any claim, liability, cost, expense, damage, deficiency, loss, or obligation, of
any kind or nature (including, without limitation, reasonable attorneys’ fees
and other costs and expenses of defense) (collectively, “Claims”), based upon,
arising out of, or otherwise relating to this Agreement, including without
limitation any cause of action relating to product liability.  The
previous sentence will not apply to any Claim that is determined with finality
by a court of competent jurisdiction to result solely from the gross negligence
or wilful misconduct of an HHMI Indemnitee.  The obligation of Company
to defend and indemnity as set out in this Paragraph 7.1(b) shall survive the
termination of this Agreement, shall continue even after assignment of rights
and responsibilities to an AFFILIATED COMPANY and SUBLICENSEE, and shall not be
limited by any other limitation of liability elsewhere in this
agreement.

    

    10.1           Use of
Name.  Company, AFFILIATED COMPANIES and SUBLICENSEE(S) shall
not use the name of the Howard Hughes Medical institute, The Johns Hopkins
University or The Johns Hopkins Health System or any of their constituent parts,
such as the Johns Hopkins Hospital or any contraction thereof or the name of
Inventors in any advertising, promotional, sales literature or fundraising
documents without prior written consent from an authorized representative of
JHU.  Company, AFFILIATED COMPANIES and SUBLICENSEE(S) shall allow at
least seven (7) business days notice of any proposed public disclosure for JHU’s
and/or HHMI’s review and comment or to provide written consent.  For
the purposes of this Paragraph, notice to HHMI should be directed
to:

    

    Howard
Hughes Medical Institute

    4000
Jones Bridge Road

    Chevy
Chase, Maryland 20815

    Attn:
Office of the General Counsel

    

    Without
limiting any of the foregoing, it is understood that the Company may use the
name of the Howard Hughes Medical Institute, The Johns Hopkins University or The
Johns Hopkins Health System in any filings as required by the SEC (or any other
securities exchange authority), and may distribute any such filing in the
ordinary course of its business.

    

    10.4           Product
Liability.  Prior to initial human testing or first commercial
sale of any LICENSED PRODUCT(S) in any particular country, Company shall
establish and maintain, in each country in which Company, an AFFILIATED COMPANY
or SUBLICENSEE(S) shall test or sell LICENSED PRODUCT(S), product liability or
other appropriate insurance coverage in the minimum amount of [***] dollars
[***] per claim and will annually present evidence to JHU that such coverage is
being maintained.  Upon JHU’s request, Company will furnish JHU with a
Certificate of Insurance of each product liability insurance policy
obtained.  JHU and HHMI shall be listed as an additional insureds in
Company’s said insurance policies.  If such Product Liability
insurance is underwritten on a ‘claims made’ basis, Company
agrees that any change in underwriters during the term of this Agreement will
require the purchase of ‘prior acts’ coverage to ensure that coverage will be
continuous throughout the term of this Agreement.

     

     

    
 

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Annex
H

    Rosetta
Press Release

     

    
    

     

    
      	 	 

    

     

     

    

    Prometheus
and Rosetta Genomics Announce License and Collaboration Agreement

    

    MicroRNA-based
Molecular Diagnostics to Mark Prometheus’ Entry into Oncology Market; Rosetta to
Receive Milestones and Research and Development Funding plus Future
Royalties

    

    San
Diego, Philadelphia and Rehovot, Israel, April 13, 2009 (tentative) – Prometheus
Laboratories Inc., a specialty pharmaceutical and diagnostic company, and
Rosetta Genomics Ltd. (Nasdaq: ROSG), an innovative molecular diagnostic
company, today announced the execution of a license and collaboration agreement
under which Rosetta shall grant Prometheus U.S. rights to three recently
introduced, microRNA-based cancer diagnostic tests: miRviewTM mets, miRviewTM
squamous and miRviewTM meso.

    

    The terms
of the license agreement provide for payments to Rosetta, either as milestones
or research and development funding, as well as royalty payments on net sales in
the U.S. Under the terms of a separate stock purchase agreement, Prometheus will
also make an equity investment in Rosetta of $8 million at $4.00 per ordinary
share, representing an approximate 41% premium over the closing price of Rosetta
stock over three business days. The license and collaboration agreement and the
stock purchase agreement are expected to close before the end of April 2009 and
are subject to customary closing conditions.

    

    In
addition, Prometheus and Rosetta have agreed to collaborate to develop two new
microRNA-based gastroenterology tests, which may result in additional,
success-based milestones and royalty payments to Rosetta. Funding for
development of these gastroenterology tests will be provided by
Prometheus.

    

    “Prometheus
has established its position as a leader in the gastroenterology market by
building an integrated portfolio of diagnostic and pharmaceutical products as
well as a highly trained and efficient sales force,” said Joseph M. Limber,
President and Chief Executive Officer of Prometheus. “Leveraging our core
strengths, we intend to apply this business model to oncology, where there is an
unmet need to guide the use of a growing number of targeted therapies. We
believe these three molecular diagnostic tests can help oncologists personalize
therapy and are ideally suited to lead our entry into the oncology market, while
complementing our emerging internal oncology diagnostics program.”

    

    “We
believe that with this agreement Rosetta has proven the great commercial value
of its first three products, and has established itself as a leader in the
development of novel, molecular diagnostic products based on microRNAs. We are
delighted to enter into this comprehensive partnership with Prometheus,” said
Amir Avniel, President and Chief Executive Officer of Rosetta Genomics. “With
Prometheus these tests now will be available across the U.S., and will be
supported by an organization with a proven ability in diagnostic testing
services and in launching new products.”

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    About
miRviewTM mets

     

    miRviewTM
mets is designed to accurately identify the primary tumor site in patients
presenting with metastatic cancer, as well as in patients whose tumor has not
been identified and consequently has been labeled Cancer of Unknown Primary
(CUP). As metastases need to be treated according to their primary origin,
accurate identification of the primary origin is critical for determining
optimal treatment, enabling better patient outcomes. Current diagnostic methods
to identify the origin of a metastasis include a range of costly, time-consuming
and at times inefficient tests. miRviewTM mets offers physicians a fast, accurate
and easy-to-interpret diagnosis of the predicted primary origin.

    

    About
miRviewTM squamous

    

    Using a
single microRNA, miRviewTM squamous is designed to differentiate squamous from
non-squamous non-small cell lung cancer (NSCLC). When administered targeted
therapy, whether currently available or under development, patients with
differing histology, i.e. squamous or non-squamous NSCLC, have demonstrated
histologic-specific response patterns ranging from a high incidence of severe or
fatal bleeding in the lungs to poor response to treatment. Current methods for
differentiating squamous from non-squamous NSCLC are not standardized, are
difficult to reproduce and can have low accuracy. miRviewTM squamous produces a
single objective measure that indicates whether a sample is squamous or
non-squamous NSCLC.

    

    About
miRviewTM meso

    

    miRviewTM
meso leverages microRNA’s high-specificity biomarkers to differentiate
mesothelioma, a cancer connected to asbestos exposure, from other carcinomas in
the lung and pleura, a medically and legally important differential diagnosis.
As mesothelioma patients require specific treatment regimens, an accurate
diagnosis is critical. Currently there is no single diagnostic test that is
conclusive for this differentiation. In addition, pathological diagnosis may
suffer from significant inter-observer variability, and in the absence of a
single specific and reliable marker, mesothelioma can be difficult to identify
from other cancers. miRviewTM meso is a highly accurate test that may also assist
physicians in ruling out mesothelioma in patients diagnosed with adenocarcinoma
in the lung who have been exposed to mesothelioma-related substances, primarily
asbestos particles and heavy metals.

    

    About
MicroRNA

    

    MicroRNAs
(miRNAs) are recently discovered, naturally occurring, small RNAs that act as
master regulators and have the potential to form the basis for a new class of
diagnostics and therapeutics. Since many diseases are caused by the abnormal
activity of proteins, the ability to selectively regulate protein activity
through microRNAs could provide the means to treat a wide range of human
diseases. In addition, microRNAs have been shown to have different expression in
various pathological conditions. As a result, these differences may provide for
a novel diagnostic and therapeutic strategy for many diseases.

    

    About
Rosetta Genomics

    

    Rosetta
Genomics is a leading molecular diagnostics company committed to develop and
commercialize products based on microRNAs for targeted therapy and preventive
medicine. Rosetta developed a unique methodology to find microRNAs in body
fluids and other clinical samples, and discovered in the past few years hundreds
of novel microRNAs that can be used as important biomarkers and drug targets.
Rosetta performs its commercial molecular diagnostics tests at Rosetta
Laboratories in Philadelphia. Building on its
strong intellectual property position and proprietary platform technologies,
Rosetta is working on the application of these technologies in the development
of novel molecular diagnostics products.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    About
Prometheus

    

    Prometheus
Laboratories Inc. is a specialty pharmaceutical and diagnostic company committed
to developing and commercializing novel pharmaceutical and diagnostic products
to help physicians individualize patient care. Prometheus is a leader in
applying the principles of personalized medicine to the diagnosis and treatment
of gastrointestinal diseases and intends to apply these principles to oncology.
Its strategy includes the marketing and delivery of pharmaceutical products
complemented by proprietary, high-value diagnostic testing services. By
integrating pharmaceutical products and diagnostic testing services, Prometheus
believes it can address the full continuum of care, thereby providing physicians
with a comprehensive solution to treat chronic diseases. Prometheus’ corporate
offices are located in San Diego.

    

    Rosetta
Forward-Looking Statements

    

    Various
statements in this release concerning Rosetta’s future expectations, plans and
prospects, including without limitation, statements regarding the parties’
ability to consummate the transactions, relating to the role of microRNAs in
human physiology and disease, the potential of microRNAs in the diagnosis and
treatment of disease, the potential for milestone, royalty and other payments
under the collaboration with Prometheus, and the potential development of two
new microRNA-based gastroenterology tests, constitute forward-looking statements
for the purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
indicated by these forward-looking statements as a result of various important
factors, including risks related to: Rosetta’s approach to discover microRNA
technology and to work on the application of this technology in the development
of novel diagnostics and therapeutic tools, which is unproven and may never lead
to commercially accepted products or services; Rosetta’s ability to obtain,
maintain and protect its intellectual property; Rosetta’s ability to enforce its
patents against infringers and to defend its patent portfolio against challenges
from third parties; Rosetta’s need and ability to obtain additional funding to
support its business activities; Rosetta’s dependence on third parties for
development, manufacture, marketing, sales and distribution of products;
Rosetta’s ability to successfully develop its candidate tools, products and
services; Rosetta’s ability to obtain regulatory clearances or approvals that
may be required for its products and services; the ability to obtain coverage
and adequate payment from health insurers for the products and services
comprising Rosetta’s technology; competition from others using technology
similar to Rosetta’s and others developing products for similar uses; Rosetta’s
dependence on collaborators; and Rosetta’s short operating history; as well as
those risks more fully discussed in the “Risk Factors” section of Rosetta’s
Annual Report on Form 20-F for the year ended December 31, 2007 as filed with
the Securities and Exchange Commission. In addition, any forward-looking
statements represent Rosetta’s views only as of the date of this release and
should not be relied upon as representing its views as of any subsequent date.
Rosetta does not assume any obligation to update any forward-looking statements
unless required by law.

    

    Contacts:

     

    
      	Ron
      Kamienchick                                               	Bruce
      Voss                                               	Pete
      De Spain
	Rosetta
      Genomics                                               	Lippert/Heilshorn
      &
      Associates                                                                       	Prometheus
      Laboratories Inc.
	646-509-1893                                               	310-691-7100                                               	858-587-4117
	investors@rosettagenomics.com                                                                                              	bvoss@lhai.com                                   	pdespain@prometheuslabs.com

    

     

     

     

     

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Annex
I

    Form
of THM Written Statement

    

    

    [Rosetta
letterhead]

    

    [date]

    

    

    Tel
Hashomer Medical Research Infrastructure and Services Ltd.

    Tel
Hashomer

    52621

    Israel

    

    

    Dear
[________]:

    

    Rosetta
Genomics Ltd. (“Rosetta”) and Tel Hashomer Medical Research Infrastructure and
Services Ltd. (“THM”) are parties to
a license agreement effective 30 July 2008 (the “Head License”).  As
we have discussed, Rosetta has negotiated the terms of a license
agreement  (the “License Agreement”) with Prometheus Laboratories Inc.
(“Prometheus”) relating to the exploitation by Prometheus of certain Rosetta
intellectual property in the territory for which Prometheus is licensed pursuant
to the License Agreement (the “Territory”), including the grant of a sublicense
under the Head License.

    

    Prometheus
has requested that THM provide a letter confirming and agreeing to the
following:

    

    1.  To
THM’s knowledge, neither Rosetta nor THM is in material breach of the Head
License.

    

    2.  If
the Head License is terminated for any reason, THM shall provide prompt notice
thereof to Prometheus and, notwithstanding Section 7.04(A)(ii)(a) of the Head
License and Section 2.5.1(c) of the License Agreement, provided that at the time
the Head License is terminated as to Rosetta, Prometheus is not in breach of
either (i) the License Agreement or (ii) the terms of the Head License
applicable to sublicensees, THM shall be deemed to have granted a direct license
to Prometheus, solely in the Territory but otherwise on the same terms as those
set forth in the Head License, including without limitation Article 8 of the
Head License (mutatis
mutandis, as set forth in Appendix A hereto).   All
capitalized terms used in Appendix A shall have the meanings given them in the
Head License.  Prometheus shall notify
THM within sixty (60) days of THM notifying Prometheus that the Head License has
been terminated, whether or not it accepts the terms of the Head License. For
clarity, as a condition of such direct license Prometheus shall assume
responsibility for paying directly to THM any unpaid amounts equitably
apportioned to the Territory (as set forth above) payable under the Head License
by Rosetta to THM prior to the date of termination of the Head License, provided that, any amounts
which have been paid by Rosetta to THM under the Head License, equitably
apportioned to the Territory (as set forth above) shall be deemed to have been
paid by Prometheus under the direct license and, provided further that, if Prometheus elects
not to pay THM such amounts payable under the Head License by Rosetta prior to
the date of termination, THM’s sole and exclusive recourse against Prometheus
shall be termination of the direct license from THM to Prometheus
hereunder.  Furthermore, THM’s termination of such direct license
shall in no way affect any co-exclusive rights Prometheus may have obtained or
obtain in the future by virtue of Rosetta’s joint ownership to inventions which
were developed under the Head License.

    

    My
signature below confirms that Rosetta agrees with the terms and conditions set
forth in this letter.

     

    
 

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    I would
appreciate your confirming THM’s agreement with paragraphs 1 and 2 above by
signing a copy of this letter in the space indicated below and returning an
original signed copy to me.  Thank you for your assistance with this
matter.

    

    

     [closing]

    

    [Rosetta
signatory]

    

    

    On behalf
of Tel Hashomer Medical Research Infrastructure and Services Ltd., I confirm and
agree to paragraphs 1 and 2 above.

    

    ____________________________________

    (signature)

    

    Name
(printed): _______________________

    Title:
________________________________

    Tel
Hashomer Medical Research Infrastructure and Services Ltd.

    

    On behalf
of Prometheus Laboratories Inc. I confirm and agree to paragraph 2
above.

    

    ____________________________________

    (signature)

    

    Name
(printed): _______________________

    Title:
________________________________

    Prometheus
Labs Inc.

    

    

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    Appendix
A

    

     

    8.    Payments for
License.

     

    8.01.    In
consideration for the grant and during the term of the License with respect to
each Licensed Product, PROMETHEUS shall pay to THM:

     

    (a)    Royalties of
[***] of all Net Sales by or on behalf of PROMETHEUS; and ("Royalties")

     

    (b)    [***] of any
Sublicense Income ("Sublicense
Fees").

     

    8.02    Stacking
Protection.

     

    (a) In the event that
PROMETHEUS becomes obligated to pay to Third Parties Royalties in consideration
for the use of Intellectual Property Rights which are necessary in order to
develop, manufacture and use the Licensed Product, or in order to provide the
Licensed Product as a service test, and the aggregate amount of all royalties
(including royalties to THM) shall exceed [***] of Net Sales, then the royalty
rate will be reduced as follow: as for each additional percentage of royalties
PROMETHEUS is required to pay to Third Party, PROMETHEUS shall be entitled to
deduct an amount of [***],  provided that in no event the royalties
due to THM under Section 8.01(i) be reduced to less than [***] of Net Sales (for
example, if the aggregate royalties are [***], the royalties to THM would be
reduced from [***] to [***]).

     

    (b) In
the event that PROMETHEUS becomes obligated to pay a share of Sublicense Income
to  person or entity in consideration for the use of Intellectual
Property Rights which are necessary in order to develop or manufacture the
Licensed Product, or in order to provide the Licensed Product as a service test,
and the aggregate share of Sublicense Income (including the share payable to
THM) shall exceed [***] of Sublicense Income, then the share of Sublicense
Income payable to THM will be as follow: for each additional percentage out of
Sublicense Income PROMETHEUS is required to pay to Third Parties, PROMETHEUS
shall be entitled to deduct an amount of [***] from the amount THM is entitled
to, provided that in no event shall THM share of Sublicense Income under Section
8.01(ii) be reduced to less than [***] of Sublicense Income.

     

    8.03.    For the
purpose of computing the royalties due to THM hereunder, the year shall be
divided into four parts ending on March 31, June 30, September 30, and December
31.

     

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    As of the
Date of First Commercial Sale, not later than [***] after each last day of
December, March, June, and September in each Calendar Year during the term of
the License, PROMETHEUS shall submit to THM a detailed report of royalties or
payments due THM under the terms of this Agreement for the preceding quarter
year (hereinafter "the Quarter-Year Report").

     

    Payment
of the full amount of any royalties or other payments due to THM for the
preceding quarter year shall accompany each Quarter-Year Report on royalties and
payments. PROMETHEUS shall keep for a period of at least five (5) years after
the date of entry, full, accurate and compete books and records consistent with
sound business and accounting practices and in such form and in such detail as
to enable the determination of the amounts due to THM from PROMETHEUS pursuant
to the terms of this Agreement.

     

    8.04.    PROMETHEUS
shall provide THM with the following written reports:  (a) a
detailed quarterly report, commencing with the first calendar quarter in which
any Net Sales are made, or Sublicense Income is received,  signed by
the chief financial officer of PROMETHEUS, specifying all amounts payable to THM
under this section 8 in respect of the previous quarter to which the report
refers. Such report shall include: (i) [***]; (ii)  [***]; and (iii)
[***]; and (b) following the Date of First Commercial Sale - [***], PROMETHEUS
will provide THM with a detailed report, certified by its chief financial
officer and by its independent auditor, stating all amounts due to THM pursuant
to this section 8 in the reported year including relevant Invoices issued and
all invoices and all payments received by PROMETHEUS with respect to its Net
Sales and to the Sublicense Income as detailed in the quarterly
reports.

     

    8.05.    On reasonable
notice and during regular business hours, the external auditor of THM shall each
have the right to inspect the books of accounts, records and other relevant
documentation of PROMETHEUS insofar as they relate to the production, marketing
and sale of the Licensed Products, in order to ascertain or verify the amount of
royalties and other payments due to THM hereunder. The cost of such inspection
shall be borne by THM, unless it is determined in such inspection that THM has
been underpaid in any period by more than [***] of the amount which THM should
have been paid, in which case the cost of such inspection shall be reimbursed to
THM by PROMETHEUS.

     

    

     

     

    
      Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.Exhibit
4.18

     

    LABORATORY SERVICES
AGREEMENT

     

    This
Laboratory Services Agreement (“Agreement”) is made
and entered into effective as of April 10, 2009, (the “Effective Date”) by
and between Rosetta
Genomics Inc., a
corporation organized under the laws of Delaware, having a principal place of
business at 3711 Market St., Suite 740, Philadelphia, PA, 19104 (“Rosetta”), and Prometheus
Laboratories Inc., a California corporation,
having its principal place of business at 9410 Carroll Park Drive, San Diego, CA
92121 USA (“Prometheus”).  Rosetta
and Prometheus each may be referred to herein as a “Party” or collectively as
the “Parties”.

     

    Recitals

     

    Whereas,
the Parties have entered into that certain License Agreement simultaneously
herewith for the license to Prometheus of certain intellectual property rights
owned or controlled by Rosetta covering certain Diagnostic Tests which will be
exploited by Prometheus in the Prometheus Territory (the “License Agreement”;
capitalized terms not defined herein shall have the definitions ascribed in the
License Agreement);

     

    Whereas,
Rosetta is capable of performing the Diagnostic Tests; and

     

    Whereas,
in connection with Prometheus’ Exploitation of its rights under the License
Agreement, Prometheus desires that Rosetta provide the Services (as defined
below) under the terms and conditions set forth in this Agreement and Rosetta
desires to provide the Services for Prometheus.

     

    Agreement

     

    Now
Therefore, in consideration of the mutual promises and covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:

     

    
      	
              1.

            	
              THE
      SCOPE OF THE SERVICES

            

    

     

    1.1           The
Services.  Rosetta shall perform the Diagnostic Tests for
Prometheus with respect to specimens sent by Prometheus to Rosetta and obtained
from any person inside the Prometheus Territory (the “Services”).

     

    1.2           SOP.  Rosetta
shall perform each Diagnostic Test according to the standard operating
procedures (“SOP”) agreed upon in
writing by the
Parties, which may be amended from time to time subject to the Parties’ mutual
written consent.  Rosetta agrees not to change or deviate from the SOP
without Prometheus’ prior written approval.

     

    1.3           Customer
Service.  Prometheus shall be solely responsible for all
customer service relating to the Services, including opening customer accounts,
ordering and disseminating collection kits to customer
accounts,  paying for and tracking the shipment of Laboratory Samples
(defined below) to Rosetta at the Licensed Facility (defined below), and
providing to customer the Test Results (defined below) supplied by Rosetta to
Prometheus.

     

    1.4           Standard
Disclaimers.  Prometheus shall provide in writing to all
customers that order Diagnostic Tests the standard disclaimers and collection
instructions attached hereto as Exhibit 2, as such
Exhibit may be modified from time to time upon the mutual written agreement of
the Parties.

     

    
      
        
          Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment under Rule 24b-2
of the Securities Exchange Act of 1934, as amended.

          CONFIDENTIAL

        

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	
              2. 

            	
              CONDUCT
      OF DIAGNOSTIC TESTS

            

    

     

    
      	
               
      

            	
              2.1

            	
              Performance of
      Services.

            

    

     

    a)           Rosetta
shall timely perform all Services to meet the requirements of Prometheus and its
Affiliates in the Prometheus Territory, in accordance with Rosetta’s maximum
turnaround time for the performance of each Diagnostic Test set forth in Section
4.1 and business operating procedures agreed in writing by the Parties from time
to time.  Rosetta will process Laboratory Samples in the order
received unless otherwise requested in writing by Prometheus, and,
notwithstanding anything herein, (unless otherwise agreed to in writing by a
duly authorized representative of Rosetta) in no event shall Rosetta be required
to process more than [***] Laboratory Samples per business day.

     

    b)           Rosetta
shall use reasonable care and comply with generally prevailing industry
standards in the performance of the Services and in the preparation of all
findings, conclusions, assessments and reports in connection
therewith.  Rosetta shall perform the Services in compliance with all
Laws.

     

    2.2           Further Information.
After a Diagnostic Test has been completed, Rosetta may be requested by
Prometheus to provide additional information concerning any Diagnostic Test
performed by Rosetta, including such information and other scientific or
technical information reasonably required to be disclosed to fulfill the
objectives of  42 C.F.R. 493.1445(9) and as reasonably provided by CLIA
certified laboratories.  Upon such a request by Prometheus or a Prometheus
customer, Rosetta shall provide the requested information subject to generally
accepted industry standards relating to the protection of confidential
information.  Under no circumstances shall Rosetta be required to make any
clinical decision or offer any clinical interpretation of the Test Results
(defined below).  Rosetta shall make available upon reasonable request its
laboratory director and a senior scientist to be identified by Rosetta to
address questions relating to the Diagnostic Tests which may arise from health
professionals from time to time during the Term of this Agreement. 
Notwithstanding the foregoing, the Parties shall use reasonable efforts to work
together in good faith to protect information which each party considers and has
previously protected as strictly confidential information. 

     

    2.3           Laboratory
Samples.  Prometheus shall be responsible for supplying
collection kits to customers and delivering Laboratory Samples to Rosetta for
testing.  Rosetta shall dispose of any waste generated from its
possession, testing or creation of the Laboratory Samples in accordance with all
Laws and the terms of the applicable SOP.  For the purposes of this
Section, “Laboratory
Samples” shall mean any tissue sample that Prometheus furnishes to
Rosetta for any purpose related to this Agreement, or that Rosetta creates as a
result of performing the Services for Prometheus.

     

    2.4           Laboratory Location;
Visits. Unless otherwise agreed by Prometheus in writing, all Services to
be performed by Rosetta hereunder shall be performed at its licensed laboratory
facility located at 3711 Market Street, Suite 740, Philadelphia, PA 19104 (the
“Licensed
Facility”), provided that Rosetta shall have the right to change the
location of the Licensed Facility to a substantially equivalent and
appropriately licensed laboratory facility within the United States upon one
hundred thirty-five (135) days’ prior written notice to
Prometheus.  Prometheus’ designated representatives may visit the
Licensed Facility upon reasonable advance notice and with reasonable frequency
to observe the performance of the Services and to ensure compliance with this
Agreement.  Such Prometheus representatives shall be subject to and
bound by the applicable confidentiality obligations set forth in Section
6.1.

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

          CONFIDENTIAL

        

         

      

      
        - 2
-

        
          

        

      

      
         

      

    

     

     

    
      	
              3. 

            	
              PERSONNEL

            

    

     

    Rosetta
shall provide a sufficient number of qualified personnel to support Rosetta’s
obligations under this Agreement and to timely perform all Services in
accordance with this Agreement.  Rosetta shall have the right, in its
sole discretion, to engage appropriately qualified, non-employee staff on a
contract basis to perform the Services at the Licensed
Facility.  Rosetta shall not otherwise subcontract all or any portion
of the Services to any third party without Prometheus’ prior written
consent.  Rosetta shall obtain all appropriate agreements (e.g.
non-disclosure and inventions assignment agreements) from its employees, agents
and contractors sufficient to ensure full compliance with all of the provisions
of this Agreement.

     

    
      	
              4.

            	
              RECORDS
      AND REPORTS

            

    

     

    4.1           Test
Results.  Rosetta shall use commercially reasonable efforts to
furnish a report to Prometheus providing the data and results of the applicable
Diagnostic Test as specified in the SOP (the “Test Results”) within
[***] of the delivery of each Laboratory Sample to Rosetta (with Laboratory
Samples received by Rosetta after 12 noon being treated as having been delivered
on the following business day), subject to the limit on the number of Laboratory
Samples to be processed in any single business day as set forth in Section
2.1.  Each Laboratory Sample will be supplied to Rosetta in two (2)
collection tubes containing the  tissue to be tested.  If,
having started to run the Diagnostic Test on the first tube, Rosetta determines
that the tissue in the first tube is not adequate to complete the Diagnostic
Test, Rosetta shall so notify Prometheus in accordance with the SOP, and Rosetta
shall be entitled to an extension of an additional [***] to provide the Test
Results using the second tube.  All Test Results shall be branded by
Prometheus and shall be in the standard format of Rosetta unless otherwise
specified in the SOP, and shall be prepared in accordance with all
Laws.  All Test Results, Laboratory Samples, slides and tissue shall
be owned by Prometheus and shall be Prometheus’ Confidential Information,
provided that Rosetta shall be entitled to retain a copy of all Test Results for
its records and to discuss the Test Results with Prometheus’ customers pursuant
to Section 2.2.  Without prejudice to Section 10 hereof, Rosetta shall
maintain ownership of all physical copies of laboratory notebooks and other
original records of the work done to produce the Test Results and shall be
authorized to use and archive such items for purposes of regulatory compliance,
provided that Prometheus shall be entitled to retain a copy of all such
notebooks and records and use and disclose the same for Prometheus’ and its
Affiliates’ business purposes.

     

    4.2    Records.

     

    a)           Rosetta
shall keep complete and accurate records of the status and progress of each
Diagnostic Test, as required by the SOP and all Laws, and shall maintain records
covering such Diagnostic Test and all other Services in compliance with all
Laws.  Such records shall be owned by Rosetta and shall constitute
Prometheus Confidential Information, provided that Rosetta shall be entitled to
retain and use such records for the purpose of regulatory
compliance.

     

    b)           Each
Party hereto shall permit, and shall ensure that any subcontractor permits, the
United States Department of Health and Human Services and General Accounting
Office to review appropriate books and records relating to the performance
hereunder to the extent required under Section 1861(v)(1)(I) of the Social
Security Act, 42 U.S.C. Section 1395x(v)(1)(I), or any successor law or
regulation for a period of four (4) years following the last day such Party
provided services hereunder.  The access shall be provided in
accordance with the provisions of 42 C.F.R. Part 420, Subpart D.

     

    c)           If
Rosetta carries out any of the duties of this Agreement through a subcontract,
with a value or cost
of Ten Thousand Dollars ($10,000) or more over a twelve (12) month period, with
a related organization, such subcontract shall contain a clause to the effect
that until the expiration of four (4) years after the furnishing of such
services pursuant to such subcontract, the related organization shall make
available, upon written request to the Secretary of the United States Department
of Health and Human Services or upon request to the Comptroller General of the
United States, or any of their duly authorized representatives, the subcontract,
and books, documents and records of such organization that are necessary to
verify the nature and extent of the costs incurred pursuant to such
subcontract.

     

    
       

      
        
          
            Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

            CONFIDENTIAL

          

           

        

        
          - 3
-

          
            

          

        

        
           

        

      

    

     

     

    
      	
              5.

            	
              COMPENSATION

            

    

     

    5.1           Compensation.  Prometheus
shall pay Rosetta in accordance with the pricing set forth in the fee schedule
attached hereto in Exhibit 1 (“Fee Schedule”) for
the applicable Diagnostic Test.  Rosetta shall invoice Prometheus
pursuant to a single invoice at the beginning of each calendar month for all
Test Results provided by Rosetta during the prior calendar
month.  Invoices are due and payable within thirty (30) days after
receipt by Prometheus, and Prometheus agrees to pay all invoices submitted provided that such
Services were performed by Rosetta in accordance with the SOP and are not the
subject of a bona fide dispute.  All invoices and payments due
pursuant to this Agreement shall be in United States Dollars.  Each
invoice shall be accompanied by a report specifying, for each Diagnostic Test
conducted in the prior month, the type, quantity, and price of each Diagnostic
Test conducted. 
Any necessary and appropriate changes in the Fee Schedule for any Diagnostic
Test, as revised by amendments thereto, will be subject to written approval by
authorized representatives of Rosetta and Prometheus.

     

    5.2           Delays.  Rosetta
shall promptly notify Prometheus if it believes it will be delayed in the
provision of any Test Result by more than two (2) business days in excess of the
time specified in Section 4.1.

     

    
      	
              6.

            	
              PRIVACY;
      CONFIDENTIALITY

            

    

     

    6.1           Confidentiality.  The
provisions of Section 6 of the License Agreement shall be deemed incorporated
herein, with references to the “Agreement” therein being construed as references
to this Agreement as well.  Any Prometheus representatives that visit
the Licensed Facility will use reasonable efforts to avoid accessing or
observing any confidential information of Rosetta unrelated to the Services, or
any confidential information of Rosetta’s other licensees, collaborators or
customers, and shall follow all reasonable instructions of Rosetta’s personnel
with respect to such matters. In the event that Prometheus’ representatives do
access or observe any such confidential information, it shall be treated as
Rosetta Confidential Information; provided that notwithstanding anything to the
contrary in Section 6.1.1 of the License Agreement, Prometheus shall not be
entitled to use such information for any purpose or to disclose it to any other
of its employees, Affiliates, contractors, Sublicensees or third party except as
expressly stated in Section 6.1.3 of the License Agreement.

     

    6.2           Privacy.  The
Parties acknowledge the applicability of the privacy standards as set forth in
the Health Insurance Portability and Accountability Act of 1996, Public Law
104-191 ("HIPAA") and all
regulations promulgated thereunder by the U.S. Department of Health and Human
Services, including 45 C.F.R. §§ 164.500-164.534 (the "Privacy Rule ") and
164.302-164.318 (the "Security Standards")
as the same may be amended from time to time, and agree that each will comply
with their respective obligations as required by HIPAA and any other applicable
privacy laws.  Further, the Parties agree to take all other reasonable
steps to protect the confidentiality of any patient health and medical
information in compliance with all Laws.

     

    
       

      
        
          
            Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

            CONFIDENTIAL

          

           

        

        
          - 4
-

          
            

          

        

        
           

        

      

    

     

     

    
      	
              7.

            	
              USE
      OF NAMES

            

    

     

    Neither
Party will use the other Party’s name or the name of any employee of the other
Party in any advertising, packaging, or promotional material, except as required
or permitted under the License Agreement or agreed in writing by the
Parties.

     

    
      	
              8.

            	
              WARRANTIES

            

    

     

    Rosetta
hereby represents and warrants that:

     

    8.1           the
Services provided to Prometheus in connection with each Diagnostic Test
conducted under this Agreement shall conform to the SOP for such Diagnostic Test
(unless otherwise agreed by the Parties in writing) and shall be in compliance
with all Laws; provided, however, that Rosetta makes no representation and gives
no warranty that the Diagnostic Tests may be performed in compliance with Law on
Laboratory Samples obtained in New York, Florida, Maryland or California until
such time as Rosetta’s pending state license applications in such states
issue.  Rosetta shall use commercially reasonable efforts to obtain
all licenses in New York, Florida, Maryland and California which are necessary
to in order perform the Services with respect to Laboratory Samples collected in
such states.  Rosetta shall promptly notify Prometheus upon the
issuance of each such state license and thereafter Rosetta shall maintain such
state license in good standing for the remainder of the Term. Rosetta shall not
perform any Diagnostic Tests on any Laboratory Samples obtained from states
where it is not properly licensed to provide the Services; provided, however,
that Rosetta shall be entitled to rely on the information supplied by Prometheus
or its customers as to the state in which a given Laboratory Sample has been
obtained.

     

    8.2           the
Licensed Facility is, and at all times during the Term shall be, licensed or
certified according to all applicable Laws.  Rosetta shall provide
Prometheus with a copy of each of Rosetta’s licenses and certifications upon
request; and

     

    8.3           it
is not now nor has it ever been sanctioned, debarred, suspended, or excluded
from participation in any federally funded health care program, including
Medicare or Medicaid, and agrees that it shall notify Prometheus in the event of
any adverse action relating to its license, permit, certification or right to
receive reimbursement from any federally funded health care program, including
Medicare and Medicaid.

     

    
      	
              9.

            	
              INDEMNITIES

            

    

     

    9.1           Indemnification by
Rosetta.  Rosetta shall indemnify, defend and hold harmless
Prometheus and its officers, directors, employees, agents and representatives
(“Prometheus
Indemnitees”) from and against any and all liabilities, claims, demands,
actions, suits, losses, damages, fines, sanctions, costs and expenses (including
reasonable attorneys’ fees) arising from third party claims, including
investigations or actions by any government agency, to the extent based upon or
arising out of Rosetta’s negligence, willful or deliberate misconduct,
recklessness or Rosetta’s breach of any covenant, agreement, representation or
warranty made by Rosetta in this Agreement; provided, however, that Rosetta
shall not be required to indemnify a Prometheus Indemnitee to the extent such
claims arise from the negligence, willful or deliberate misconduct, or
recklessness of a Prometheus Indemnitee or Prometheus’ breach of this
Agreement.

     

    9.2           Indemnification by
Prometheus.  Prometheus shall indemnify, defend and hold
harmless Rosetta and its officers, directors, employees, agents and
representatives (“Rosetta Indemnitees”)
from and against any and all liabilities,
claims, demands, actions, suits, losses, damages, fines, sanctions, costs and
expenses (including reasonable attorneys’ fees) arising from third party claims,
including investigations or actions by any government agency, to the extent
based upon or arising out of Prometheus’ negligence, willful or deliberate
misconduct, recklessness or Prometheus’ breach of any covenant, agreement,
representation or warranty made by Prometheus in this Agreement; provided,
however, that Prometheus shall not be required to indemnify a Rosetta Indemnitee
to the extent such claims arise from the negligence, willful or deliberate
misconduct, or recklessness of a Rosetta Indemnitee or Rosetta’s breach of this
Agreement.

     

    
       

      
        
          
            Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

            CONFIDENTIAL

          

           

        

        
          - 5
-

          
            

          

        

        
           

        

      

    

     

     

    9.3           Indemnification
Procedure. The provisions of Section 8.3 of the License Agreement shall
be deemed incorporated herein, with references to the “Agreement” therein being
construed as references to this Agreement as well.

     

    
      	
              10.

            	
              OWNERSHIP

            

    

     

    10.1           Ownership of Prometheus
IP.  Subject to any provision to the contrary in the License
Agreement or this Agreement, all intellectual property rights in any materials,
processes, inventions and/or discoveries relating to Prometheus’ performance
under this Agreement, shall remain the sole and exclusive property of Prometheus
(the “Prometheus
IP”) and shall be subject to any licenses applicable thereto under the
License Agreement.

     

    10.2           Ownership of Rosetta
IP. Subject to any provision to the contrary in the License Agreement or
this Agreement, all intellectual property rights in any inventions and/or
discoveries relating to Rosetta’s performance of the Services, including all
testing methods and processes employed by Rosetta, and whether created outside
of or during the course of Rosetta’s performance of the Services, are and shall
remain the sole and exclusive property of Rosetta (the “Rosetta IP”) and
shall be subject to any licenses applicable thereto under the License
Agreement.

     

    
      	
              11.

            	
              INSURANCE

            

    

     

    Without
limiting Section 8.4 (Insurance) of the License Agreement, each Party shall
carry insurance sufficient to cover its interest or liabilities hereunder
including, but not limited to worker’s compensation and comprehensive general
liability.  At a minimum, each Party shall obtain and maintain in
force during the term of this Agreement, comprehensive general liability
insurance in the amount of [***] per occurrence and [***] in the annual
aggregate plus professional liability insurance in the amount of [***] per
occurrence and [***] in the aggregate.

     

    
      	
              12.

            	
              TERM
      AND TERMINATION

            

    

     

    12.1           Term.  Unless
earlier terminated by the Parties as set forth below, this Agreement will
commence on the Effective Date and will continue for one (1) year and from year
to year thereafter unless terminated as set forth herein (the “Term”).

     

    12.2           Termination for
Convenience.  Prometheus shall have the right to terminate the
Services in their entirety or with respect to any one or more Diagnostic Tests
at any time without cause upon sixty (60) days prior written notice to
Rosetta.  Rosetta shall have the right to terminate the Services in
their entirety or with respect to any one or more Diagnostic Tests at any time
without cause upon ninety (90) days prior written notice to Prometheus, to be
given no earlier than ninety (90) days prior to the third (3rd)
anniversary of the Effective Date.

     

    12.3           Termination for
Breach.  Either Party may terminate this Agreement at any time
upon sixty (60) days prior written notice to the other Party (or thirty (30)
days in the case of a breach consisting of a failure by a Party to make timely
payment of any amount that is not the subject a bona fide dispute and is due
under this Agreement pursuant to a properly rendered invoice), for material
breach of this Agreement by the other Party where such breach is not remedied to
the non-breaching Party’s reasonable satisfaction within the applicable notice
period.

     

    
 

    
      
        
          
            Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

            CONFIDENTIAL

          

           

        

        
          - 6
-

          
            

          

        

        
           

        

      

    

     

     

    12.4           Termination upon Termination
of License Agreement.  This
Agreement shall automatically terminate in the event that the License Agreement
is terminated pursuant to its terms.

     

    12.5           Consequences of
Termination.  Upon termination of this Agreement for any
reason, Rosetta shall complete the performance of any Diagnostic Tests
previously ordered by Prometheus and/or its customers and shall submit a final
invoice to Prometheus.  Prometheus shall pay such final invoice in
accordance with Section 5.1 and otherwise comply with all terms and conditions
of this Agreement relating to such Diagnostic Tests and payment therefor as if
the Agreement were still in force.

     

    12.6           Survival.  Upon
expiration or termination of this Agreement, neither Party will have any further
obligations under this Agreement, except that (i) the liabilities, including for
payment, accrued through the date of termination and (ii) Article and Sections
4.2 (Records), 6 (Privacy; Confidentiality), 9 (Indemnity), 10 (Ownership), 11
(Insurance), 12.5 (Consequences of Termination), 12.6 (Survival), 13 (Dispute
Resolution) and 14 (Miscellaneous) shall survive the expiration or termination
of this Agreement.

     

    
      	
              13.

            	
              EXCLUSIONS
      OF LIABILITY; DISPUTE RESOLUTION

            

    

     

    13.1           EXCEPT
WITH RESPECT TO ANY INDEMNIFICATION OBLIGATION OWED WITH RESPECT TO A THIRD
PARTY LOSS, A BREACH OF ARTICLE 6 (PRIVACY, CONFIDENTIALITY), NEITHER PARTY
SHALL BE LIABLE (NOR SHALL ITS LICENSORS BE LIABLE) TO THE OTHER PARTY UNDER ANY
CIRCUMSTANCES OR ANY LEGAL OR EQUITABLE THEORY, WHETHER IN CONTRACT, STRICT
LIABILITY OR OTHERWISE, FOR ANY CONSEQUENTIAL DAMAGES EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY
FAILURE OF ESSENTIAL PURPOSE OR ANY LIMITED REMEDY.  NOTWITHSTANDING
THE FOREGOING, THESE LIMITATIONS SHALL NOT APPLY TO ANY THIRD-PARTY CLAIM THAT
IS THE SUBJECT OF SECTION 9, TO THE EXTENT SUCH THIRD PARTY HAS BEEN AWARDED
SUCH DAMAGES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS
SECTION 13.1 SHALL IN NO WAY LIMIT EITHER PARTY’S RIGHTS TO SEEK AND/OR OBTAIN
DIRECT DAMAGES, INCIDENTAL DAMAGES AND/OR LOST PROFITS, PROVIDED THAT IN NO
EVENT SHALL ROSETTA BE LIABLE FOR THE COSTS OF SETTING UP A SUBSTITUTE
LABORATORY TO CONDUCT THE DIAGNOSTIC TESTS, WHETHER SUCH COSTS ARE CHARACTERIZED
AS INCIDENTAL OR DIRECT DAMAGES OR ANY OTHER FORM OF DAMAGES.

     

    13.2           The
provisions of Sections 11 of the License Agreement shall be deemed incorporated
herein, with references to the “Agreement” therein being construed as references
to this Agreement as well.

     

    
      	
              14.

            	
              MISCELLANEOUS

            

    

     

    14.1    Notices. The
provisions of Section 12.8 of the License Agreement shall be deemed incorporated
herein, with references to the “Agreement” therein being construed as references
to this Agreement as well

     

    
      
         

        
          
            
              Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

              CONFIDENTIAL

            

             

          

          
            - 7
-

            
              

            

          

          
             

          

        

      

       

    

     

    14.2           Independent
Contractors.  The business relationship of Rosetta and
Prometheus established by this Agreement is that of independent contractors, and
nothing contained in this Agreement shall be construed to (i) give either Party
the power to direct or control the day-to-day activities of the other, (ii)
constitute the Parties as partners, joint venturers, employer, employee,
co-owners or otherwise as participants in a joint or common undertaking, or
(iii) allow either Party to create or assume any obligation on behalf of the
other Party for any purpose whatsoever.

     

    14.3           Assignment;
Headings.  This Agreement,
and the rights and obligations hereunder, may not be assigned or transferred by
either Party without the prior written consent of the other Party; provided,
however, without such written consent either Party may assign this Agreement in
connection with the transfer or sale of all or substantially all of its assets
or business to which this Agreement relates or its merger or consolidation with
another company, provided that such successor is bound by the terms of this
Agreement.  Headings and captions in this Agreement are for
convenience only and are not to be used in the interpretation of this
Agreement.

     

    14.4           Right of Set-Off.  Notwithstanding
anything to the contrary in this Agreement, Prometheus shall have a right to
set-off any amounts due under this Agreement only against any damages incurred
by Prometheus and/or its Affiliates under this Agreement, subject to the
obligations under Section 11.3 of the License Agreement.

     

    14.5           Entire Agreement.  This Agreement
and the License Agreement, together with all attached Annexes and Schedules
contain the entire understanding between the Parties relating to the subject
matter hereof and supersede any and all prior agreements, understandings and
arrangements, whether written or oral, between the Parties relating to such
subject matter and to the extent relating to the Services.  In the
event that there is a conflict between any provision of the License Agreement
and any provision of this Agreement, the License Agreement shall
prevail.  No amendments, changes, modifications, waivers or
alterations of the terms and conditions of this Agreement shall be binding upon
either Party unless in writing and signed by both Parties.

     

    14.6           Unenforceability.  Both
Parties hereby expressly state that it is the intention of neither Party to
violate any Law.  If any of the provisions of this Agreement are held
to be void or unenforceable, then the Parties shall use good faith efforts for a
period of no more than ten (10) business days to replace such void or
unenforceable provisions with valid and enforceable provisions which will
achieve as far as possible the economic business intentions of the Parties,
failing which, such void or unenforceable provisions shall be deemed to be
severed from this Agreement without replacement.

     

    14.7           Non-Exclusive
Agreement.  Except as otherwise set forth in the License
Agreement, this Agreement is not exclusive.  Accordingly, Prometheus
and Rosetta shall have the right to enter into one or more agreements relating
to the same or similar matters as are covered by this Agreement, and execution
by Prometheus and Rosetta of such agreements shall not constitute a breach of
this Agreement.

     

    14.8           Governing Law;
Counterparts.  This Agreement
will in all events and for all purposes be governed by, and construed in
accordance with, the laws of the State of New York, without regard to any choice
of law principle that would dictate the application of the law of another
jurisdiction.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but both of which
together will constitute one and the same instrument.

     

    14.9           Force
Majeure.  A “Force Majeure Event”
shall mean any cause or contingency beyond a Party’s reasonable control which is
not reasonably preventable by taking precautions which are customary and/or
prudent for a company and/or facility the size of that being operated by the
affected Party (the Parties agree that such precautions shall not include
maintaining a back-up laboratory facility), including, strikes or other labor
disturbances, lockouts, riots, quarantines, communicable disease outbreaks,
wars, acts of terrorism, fires, floods, storms, or compliance with any order or
regulation of any Regulatory Authority acting within color of right and any
circumstances caused by the other Party or, in the case of Prometheus and its
Affiliates, their respective customers or any entity in their chain of
distribution. If and to the extent that either Party is prevented or delayed by
a Force Majeure Event from performing any of its obligations under this
Agreement and promptly so notifies the other Party, specifying the matters
constituting the Force Majeure Event together with such evidence in verification
thereof as it can reasonably give and specifying the period for which it is
estimated that the prevention or delay will continue, then the Party so affected
shall be relieved of liability to the other for failure to perform or for delay
in performing such obligations (as the case may be), but shall nevertheless use
commercially reasonable efforts to resume full performance thereof, provided
that if the Force Majeure Event continues for a period of ninety (90) days or
more following notification, the Party whose performance is not affected by the
Force Majeure Event may terminate this Agreement by giving not less than thirty
(30) days prior notice to the other Party.

     

    

      
        
          
            Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

            CONFIDENTIAL

          

           

        

        
          - 8
-

          
            

          

        

        
           

        

      

    

     

     

    In
Witness Whereof, duly authorized representatives of the Parties have
signed this Agreement
as of the Effective Date.

     

     

    ROSETTA
GENOMICS INC.

     

     

    By: 
/s/ Amir
Avniel

    Name:
Amir Avniel

    Title:
CEO

     

     

    PROMETHEUS
LABORATORIES INC.

     

     

    By: 
/s/ Joseph M.
Limber

    Name:  Joseph
M. Limber

    Title:   President
and Chief Executive Officer

     

     

    

     

     

    

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

           

          Signature
Page to Laboratory Services Agreement

          CONFIDENTIAL

        

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    Exhibit
1

     

    Fee
Schedule

     

    
      	Squamous
    Test:	US $[***]	 
	METS Test:	US $[***]	 
	Mesothelioma
      Test:	US $[***]	 

    

     

     

           

     

              

     

        

     

    

     

    
      
        
          Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

          CONFIDENTIAL

        

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    Exhibit
2

     

    Disclaimers
and Collection Instructions

     

    Prometheus
diagnostic services provide important information to aid in the diagnosis and
management of certain diseases and conditions.  How this information
is used to guide patient care is the responsibility of the
physician.

     

    Specimen
Instructions

     

    The
specimen collection instructions are attached hereto.  Such specimen
collection instructions may not be modified by either party without the prior
written consent of the other party, such consent not to be unreasonably
withheld, provided that Prometheus shall have the right to make non-substantive
modifications without the prior consent of Rosetta.

     

     

     

    
      Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

      CONFIDENTIAL

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