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Exhibit 10.20    
    

SUPPLY AGREEMENT  

 BETWEEN  

 SMITHKLINE BEECHAM CORPORATION

d/b/a GlaxoSmithKline  

 AND  

 PROMETHEUS LABORATORIES INC.  

 DATED AS OF  

 October 31, 2007  

 
TABLE OF CONTENTS  

	 
	 	 
	 	Page No.

	Article I Definitions	 	1
	

Article II Sale and Purchase of Products	
 	

4
	 	2.1	 	General	 	4
	 	2.2	 	Prometheus Monthly Forecasts	 	4
	 	2.3	 	Purchase Orders	 	5
	 	2.4	 	Accommodations	 	6
	 	2.5	 	Quarterly Meetings	 	6
	 	2.6	 	Purchase of Products and Materials upon Expiration or Termination	 	6
	

Article III Prices for Products; Shipment; Payments	
 	

7
	 	3.1	 	Price; Annual Adjustment	 	7
	 	3.2	 	Invoices	 	8
	 	3.3	 	Payment	 	9
	 	3.4	 	Payment Denominations	 	9
	 	3.5	 	Shipment; Title; Inspection	 	9
	 	3.6	 	Taxes	 	10
	 	3.7	 	Timely Delivery	 	11
	

Article IV Manufacture of Products	
 	

11
	 	4.1	 	General	 	11
	 	4.2	 	Specification Changes	 	12
	 	4.3	 	Validations and Stability Studies	 	13
	 	4.4	 	Materials	 	14
	 	4.5	 	Quality Agreement	 	15
	 	4.6	 	Manufacturing Transition; API Materials	 	15
	 	4.7	 	Shelf Life	 	17
	

Article V Confidentiality	
 	

17
	 	5.1	 	Confidentiality	 	17
	 	5.2	 	Limitations	 	17
	 	5.3	 	Term of Confidentiality	 	18
	 	5.4	 	Ownership of Confidential Information	 	18
	

Article VI Product Testing and Quality Assurance; Nonconformity	
 	

18
	 	6.1	 	Testing of Product	 	18
	 	6.2	 	Nonconformity	 	18
	 	6.3	 	Product Holds and Rejections	 	19
	 	6.4	 	Product Complaints	 	19
	 	6.5	 	Adverse Events	 	19
	 	6.6	 	Investigations	 	20
	 	6.7	 	Product Events, Withdrawals, Field Corrections and Field Alerts	 	20
	 	6.8	 	Disposition of Certain Products	 	20
	 	6.9	 	Replacements; Credits; Refunds	 	20
	 	6.10	 	Product Returns from the Field	 	22
	 	6.11	 	Retained Samples	 	22
	

Article VII Regulatory Matters	
 	

22
	 	7.1	 	Manufacturing Consents	 	22
	 	7.2	 	Product Consents	 	22
	 	7.3	 	Drug Application Documentation	 	23

i

 

	 	7.4	 	Regulatory Changes	 	23
	 	7.5	 	Regulatory Inspections	 	23
	 	7.6	 	Warning Letters	 	23
	

Article VIII Intellectual Property	
 	

24
	 	8.1	 	Ownership	 	24
	 	8.2	 	New Developments and Modifications	 	24
	 	8.3	 	Grant of Licenses	 	24
	 	8.4	 	Infringement	 	25
	

Article IX Access; Audit Rights	
 	

25
	 	9.1	 	Audit and Inspection Rights	 	25
	 	9.2	 	Documentation	 	26
	

Article X Representations and Warranties	
 	

26
	 	10.1	 	Representations and Warranties of GSK	 	26
	 	10.2	 	Representations and Warranties of Prometheus	 	27
	

Article XI Liability and Indemnification	
 	

28
	 	11.1	 	Indemnity by GSK	 	28
	 	11.2	 	Indemnity by Prometheus	 	28
	 	11.3	 	Procedures	 	29
	 	11.4	 	Limitations of Liability	 	29
	

Article XII Insurance	
 	

30
	 	12.1	 	GSK Insurance Requirements	 	30
	 	12.2	 	Prometheus Insurance Requirements	 	30
	

Article XIII Force Majeure Event	
 	

30
	 	13.1	 	General	 	30
	 	13.2	 	Termination; Transition	 	31
	

Article XIV Term; Termination; Remedies	
 	

31
	 	14.1	 	Term	 	31
	 	14.2	 	Termination	 	31
	 	14.3	 	Injunctive Relief	 	32
	

Article XV Miscellaneous	
 	

33
	 	15.1	 	Standard Forms	 	33
	 	15.2	 	Notices	 	33
	 	15.3	 	Independent Contractors	 	34
	 	15.4	 	Entire Understanding	 	34
	 	15.5	 	Unintentional Omissions	 	34
	 	15.6	 	Transferability; Binding Effect	 	34
	 	15.7	 	Dispute Resolution	 	34
	 	15.8	 	Subcontractors	 	35
	 	15.9	 	Amendment	 	35
	 	15.10	 	Severability	 	35
	 	15.11	 	Waiver	 	35
	 	15.12	 	Survival	 	35
	 	15.13	 	Drafting Ambiguities	 	35
	 	15.14	 	Headings; Schedules; Counterparts	 	35
	 	15.15	 	Governing Law	 	36

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SCHEDULES TO AGREEMENT  

	2.2(a)	 	Form of Forecast
	2.6(a)	 	API Price
	2.6(b)	 	Materials Specific to the Products
	3.1	 	Product Prices and Standard Batch Sizes
	3.2(c)	 	Form of Trading Services Agreement
	4.1	 	Specifications Index
	4.4(a)	 	API Intermediate Material
	4.5	 	Form of Quality Agreement
	4.6(a)	 	Transition Plan Parameters
	4.6(c)	 	API Raw Material and Intermediates

iii

SUPPLY AGREEMENT  

        THIS SUPPLY AGREEMENT (this "Agreement") is made and entered into as of the 31st day of October, 2007 by and between SMITHKLINE BEECHAM
CORPORATION, a Pennsylvania corporation doing business as GlaxoSmithKline ("GSK"), and PROMETHEUS LABORATORIES INC., a California corporation ("Prometheus"). GSK and Prometheus are sometimes
referred to herein individually as a "Party" and collectively as "Parties." 

RECITALS  

        WHEREAS, on October 31, 2007, GSK and Prometheus entered into an Asset Purchase and Sale Agreement (the "Asset Purchase Agreement") pursuant to which GSK
agreed to sell, and Prometheus agreed to buy, all of GSK's rights, title and interests in certain assets related to the Product (as defined below) for manufacture, distribution, marketing and sale in
the Territory (as defined in the Asset Purchase Agreement); and 

        WHEREAS,
in connection with the Asset Purchase Agreement, the Parties wish to enter into this Agreement pursuant to which, as of the Effective Date, GSK will manufacture and supply the
Product during the Term (as defined below). 

AGREEMENT  

        NOW, THEREFORE, in consideration of the foregoing recitals, mutual covenants, agreements, representations and warranties contained herein, the Parties hereby
agree as follows: 

Article I
 Definitions  

        "Adverse Event" shall have the meaning provided in Section 6.5 of this Agreement. 

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

        "Agreement"
shall have the meaning provided in the first paragraph of this Agreement. 

        "API"
shall mean the active pharmaceutical ingredient included in the Products, alosetron hydrochloride. 

        "API
Intermediate" shall have the meaning provided in Section 4.4(a). 

        "Applicable
Law" means all applicable provisions of any and all federal, national, state, provincial, and local statutes, laws, rules, regulations, administrative codes, ordinances,
decrees, orders, decisions, injunctions, awards, judgments, permits and licenses of or from governmental authorities relating to or governing the use or regulation of the subject item, including,
without limitation, the Medicare and Medicaid Anti-Kickback Statute set forth at 42 U.S.C. §1320a-7b(b), the FD&C Act and the PDMA. 

        "Asset
Purchase Agreement" shall have the meaning provided in the first recital of this Agreement. 

        "Business
Day" (whether or not the word is capitalized) shall mean any day other than (i) a day identified by GSK to Prometheus as a non-working day at the Facility or
a day identified by Prometheus to GSK as a non-working day, or (ii) a day which is a Saturday, a Sunday or any day banks are authorized or required to be closed in the State of
North Carolina or California. 

 

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

        "Claim"
shall have the meaning provided in Section 15.7 of this Agreement. 

        "Closing"
shall have the meaning provided in the Asset Purchase Agreement. 

        "Closing
Date" shall have the meaning provided in the Asset Purchase Agreement. 

        "Confidential
Information" shall have the meaning provided in Section 5.1 of this Agreement. 

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

        "cGMPs"
shall mean all applicable standards relating to manufacturing practices for fine chemicals, intermediates, bulk products or finished pharmaceutical products. For purposes of this
Agreement, cGMPs shall mean (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 CFR Parts 210 and 211 and The Good Manufacturing Practice for Medicinal
Products in the European Community, Volume IV, as each may be amended from time to time; or (ii) promulgated by any Governmental Authority having jurisdiction over the manufacture of the
Products, including those in the form of guidance documents (including but not limited to advisory opinions, compliance policy guides and guidelines) that are being implemented within the
pharmaceutical manufacturing industry for such Products, and subject to any arrangements, additions or clarifications agreed to from time to time by the Parties in the Quality Agreement. 

        "Days"
(whether or not the word is capitalized) shall mean, except where specified otherwise, calendar days. 

        "Delivered"
or "Delivery" shall have the meaning provided in Section 3.5(b) of this Agreement. 

        "Delivery
Date" shall mean for each shipment the date specified by Prometheus in the related Purchase Order that GSK shall make the Products available for such shipment out of the
Facility in accordance with this Agreement. 

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

        "Effective
Date" shall mean the Closing Date. 

        "Facility"
shall mean GSK's manufacturing facility located in Zebulon, North Carolina, USA. 

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

        "FDA"
shall mean the United States Food & Drug Administration or any successor agency. 

        "Firm
Zone" shall have the meaning provided in Section 2.2(b) of this Agreement. 

        "Force
Majeure Event" shall have the meaning provided in Section 13.1 of this Agreement. 

        "Forecast"
shall have the meaning provided in Section 2.2(a) of this Agreement. 

        "Governmental
Authority" shall mean any nation or government, any provincial, state, regional, local, or other political subdivision thereof, any supranational organization of sovereign
states, and any entity, department, commission, bureau, agency, authority, board, court, official or officer, domestic or 

2

 

foreign,
exercising executive, judicial, regulatory or administrative functions of or pertaining to government. 

        "GSK"
shall have the meaning provided in the first paragraph of this Agreement. 

        "GSK
Indemnitee" shall have the meaning provided in Section 11.2 of this Agreement. 

        "GSK
Intellectual Property" shall mean any and all Intellectual Property relating to the manufacture of pharmaceutical products generally that was (i) owned by or licensed by GSK
or GSK Affiliates at the Effective Date (other than Intellectual Property relating to the Products purchased by or licensed to Prometheus under the Asset Purchase Agreement), or (ii) developed
or acquired by GSK or GSK Affiliates on or after the Effective Date. 

        "Indemnified
Party" shall have the meaning provided in Section 11.3 of this Agreement. 

        "Indemnifying
Party" shall have the meaning provided in Section 11.3 of this Agreement. 

        "Initial
Term" shall have the meaning provided in Section 14.1 of this Agreement. 

        "Intellectual
Property" shall have the meaning provided in the Asset Purchase Agreement. 

        "Loss"
and "Losses" shall have the meaning, collectively, provided in the Asset Purchase Agreement. 

        "Materials"
shall mean (i) all raw materials, components, work-in-process and other ingredients including finished API required to manufacture the Products
and (ii) all labels and packaging materials used in the manufacture, storage and shipment of Products. For the avoidance of doubt, the above definition of Materials does not include API
Intermediate or API raw materials and intermediates identified on Schedule 4.6(c). 

        "Materials
Certification" shall have the meaning provided in Section 4.4(c) of this Agreement. 

        "Nonconformity"
shall have the meaning provided in Section 6.2(a) of this Agreement. 

        "Party"
and "Parties" shall have the meanings given such terms, respectively, in the first paragraph of this Agreement. 

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

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

        "Process
Developments" shall have the meaning provided in Section 8.2(a) of this Agreement. 

        "Product
Developments" shall have the meaning provided in Section 8.2(a) of this Agreement. 

        "Product
Event" shall have the meaning provided in Section 6.7 of this Agreement. 

        "Product
Price" shall have the meaning provided in Section 3.1 of this Agreement. 

        "Products"
or "Product" shall mean the Lotronex® (alosetron hydrochloride) pharmaceutical products set forth on  Schedule 3.1. 

        "Prometheus
Indemnitee" shall have the meaning provided in Section 11.1 of this Agreement. 

        "Prometheus
Intellectual Property" shall mean any and all Intellectual Property relating to the Products that was (i) purchased by Prometheus from GSK under the Asset Purchase
Agreement as of the Effective Date, or (ii) developed or acquired by Prometheus on or after the Effective Date. 

        "Prometheus
Rights" shall have the meaning provided in Section 8.3(a) of this Agreement. 

        "Purchase
Order" shall have the meaning provided in Section 2.3 of this Agreement. 

3

 

        "Quality
Agreement" shall have the meaning provided in Section 4.5 of this Agreement. 

        "Quarterly
Meeting" shall have the meaning provided in Section 2.5 of this Agreement. 

        "Regulatory
Acts" shall mean, as applicable, the United States Federal Food, Drug and Cosmetic Act, as amended, the rules and regulations thereunder, and any other laws and regulations
governing the approval, manufacture, sale or licensing of pharmaceutical products or ingredients for inclusion applicable to the Products. 

        "Regulatory
Authorities" shall mean any division of the FDA and any other applicable counterpart agency or authority that administers any Applicable Laws governing the approval,
manufacture, sale or licensing of pharmaceutical products or ingredients for inclusion therein applicable to the Products. 

        "Renewal
Term" shall have the meaning provided in Section 14.1 of this Agreement. 

        "Specifications"
shall mean, as applicable, all specifications for the finished Product, the Materials, approved suppliers, formula, manufacturing, analytical and testing procedures,
release, filling, packaging, storage, labeling, artwork and other processes relating to the manufacture of the Products as agreed by the Parties and indexed in  Schedule 4.1 to this Agreement,
including all master formulas and process flow diagrams, all as amended from time to time by the Parties under
Section 4.2 of this Agreement. 

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

        "Term"
shall have the meaning provided in Section 14.1 of this Agreement. 

        "Territory"
shall have the meaning provided in the Asset Purchase Agreement. 

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

        "Third
Party Claim" shall have the meaning provided in Section 11.1 of this Agreement. 

        "Third
Party Supplier" shall have the meaning provided in Section 4.6 of this Agreement. 

        "Trading
Services Agreement" shall have the meaning provided in Section 3.2(c) of this Agreement. 

Article II
 Sale and Purchase of Products  

        2.1    General.    

        Subject
to the terms and conditions of this Agreement, during the Term, GSK agrees to manufacture the Product exclusively at the Facility for sale to Prometheus, and Prometheus agrees to
purchase on a non-exclusive basis from GSK the Product for sale within the Territory. Until such time as Prometheus obtains all necessary Consents from the appropriate Regulatory
Authorities for manufacture of the Products by Prometheus or its Third Party supplier(s) as described in Section 4.6, Prometheus will not sell Products manufactured by Prometheus or its Third
Parties in the Territory. For the avoidance of doubt, nothing in this Section 2.1 shall limit Prometheus' ability to enter into agreements for the manufacture and supply of the Product from
Third Party Suppliers as contemplated by Section 4.6. 

        2.2    Prometheus Monthly Forecasts.    

        (a)    General.    During the Term, and starting immediately on the Effective Date, Prometheus shall provide to GSK,
substantially in the format set forth in Schedule 2.2(a), the then current Product inventory balance and a projection for the next succeeding
twenty-four (24) months (or such shorter period remaining under the Term) of the anticipated volumes of each Product (each, a "Forecast") to be ordered by Prometheus pursuant to
Section 2.3 below. Projected volumes for each Product for each month in the Forecast shall be equivalent to full increments of GSK's standard batch size for each Product as per  Schedule 3.1.
Prometheus shall provide such rolling projections to GSK on the first Business Day of each month during the Term. 

4

 

        (b)    Firm Zone.    The volume requirements for each Product as set forth for each of the first four
(4) months of each such Forecast will be a binding commitment to purchase the specified volumes of those Products (each such four month period shall be referred to herein as the "Firm Zone").
In developing the updated monthly Forecast, Prometheus shall ensure that the Product volumes for the new month rolling into the new Firm Zone portion of such updated Forecast (i.e., when month
five (5) in the preceding Forecast becomes month four (4) in such updated Forecast) shall not vary by more than the greater of either (i) plus or minus
[***] or (ii) plus or minus [***] percent (±[***]%) from Prometheus' forecasted
requirements specified for such month in the previous month's submitted Forecast. 

        (c)    Non-Binding Forecasts.    The Product volumes specified for the fifth (5th) through the
twenty-fourth (24th) month of each Forecast shall be non-binding estimates of future Product requirements. 

        2.3    Purchase Orders.    

        Contemporaneously
with its delivery of a Forecast, Prometheus shall deliver to GSK a purchase order (each, a "Purchase Order") for any Product volumes in such Firm Zone for which
Purchase Orders have not already been submitted in prior months, and such Product volumes shall be equivalent to full increments of GSK's standard batch size for each Product as per  Schedule 3.1.
Each Purchase Order shall specify the volumes of Products ordered, and the Delivery Date the Product is to be made available to
Prometheus for pick-up by Prometheus' designated carrier or freight
forwarder. Purchase Orders may be delivered electronically or by other means to such location as GSK shall reasonably designate. Prometheus shall issue each Purchase Order to GSK not less than one
hundred twenty (120) days prior to (i) the Delivery Date on which Prometheus has requested GSK to deliver Product pursuant to each such Purchase Order, and (ii) the termination of
this Agreement pursuant to Section 14.2(a) or the expiration of the Term. Provided that the Product volumes conform to the Firm Zone volumes under Section 2.2 and requested Delivery
Dates on any Purchase Order conform to the requirements of the immediately preceding sentence, GSK will review and accept such Purchase Order within five (5) Business Days after receipt
thereof. If Product volumes or requested Delivery Dates on any Purchase Order do not so conform in any respect, then such Purchase Order shall be reviewed and handled by the parties in accordance with
Section 2.4. In the absence of the receipt by GSK of a Purchase Order for any volumes in the Firm Zone, the volumes forecast in such Firm Zone shall constitute a binding Prometheus Purchase
Order. Purchase Order quantities Delivered by GSK may vary by ± [***] percent ([***]%) from the quantities
ordered. Such variances shall not constitute a breach of contract by GSK, provided that Prometheus shall only be obligated to pay for the amount of invoiced Product actually received, subject to
Sections 6.2 and 6.3. Notwithstanding anything to the contrary herein, following the date on which Prometheus has received the required Regulatory Authority Consents to manufacture the Products
at its own facility, or at a Third Party facility as described in Section 4.6, Prometheus may elect to no longer submit Forecasts or Purchase Orders under Sections 2.2 and 2.3 provided
that Prometheus shall notify GSK in writing that it will no longer submit Forecasts and/or Purchase Orders. If Prometheus provides such notice, then GSK shall only be obligated to accept any Purchase
Orders that conform with the last monthly Forecast and such corresponding Firm Zone submitted by Prometheus prior to such notice. For the avoidance of doubt, Prometheus may continue to submit monthly
Forecasts per Section 2.2 (even if Prometheus already has received the required Regulatory Authority Consents for manufacture as described in Section 4.6) and the Parties' obligations to
submit and accept Purchase Orders shall continue to be governed by Sections 2.3 and 2.4 during the Term and subject to conditions per Section 4.4(a) and 14.2(b). 

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

5

 

        2.4    Accommodations.    

        From
time to time, due to significant unforeseen circumstances, Prometheus may deliver to GSK a Purchase Order for Product volumes in excess of those specified in any Firm Zone or with
Delivery Dates shorter than the periods specified in Section 2.3, accompanied by Prometheus' written request for an accommodation. Within ten (10) Business Days after GSK's receipt of
such Purchase Order and Prometheus' written request, GSK shall determine whether using commercially reasonable efforts it can
provide Prometheus with such excess Product volumes or the Product within such expedited Delivery Date without incurring incremental costs, but shall not be obligated to accommodate Prometheus if
doing so would adversely impact GSK's ability to fulfill its requirements or GSK's commitments to other customers. Within ten (10) Business Days after GSK's receipt of such Purchase Order and
Prometheus' written request, (a) if GSK determines it can accommodate Prometheus' request without incurring any additional incremental costs, then it shall accept such Purchase Order;
(b) if GSK determines it cannot accommodate Prometheus' request or that accommodating Prometheus' request would adversely impact GSK's ability to fulfill its commitments to other customers,
then it shall reject such Purchase Order; and (c) if GSK determines that additional incremental costs (e.g., expedited shipping, special handling, overtime, etc.) or any other
requirements would be needed to accommodate Prometheus' request, then GSK shall provide Prometheus with written notification of such incremental costs or other requirements. If GSK provides written
notice that additional incremental costs or other requirements are necessary to accommodate Prometheus' request, Prometheus shall, at its option, by written notice to GSK, either: (i) agree to
reimburse GSK for such additional incremental costs to be incurred or agree to such other requirements, as applicable (and GSK shall promptly accept such Purchase Order), or (ii) promptly amend
its Purchase Order to reduce its order quantity to the forecasted amount or adjust its lead time to the amount specified in Section 2.3, as applicable. 

        2.5    Quarterly Meetings.    

        Unless
otherwise mutually agreed in writing, the Parties shall meet either face-to-face or via teleconference (as mutually determined by the parties) no less than
quarterly to discuss the Forecasts delivered by Prometheus pursuant to this Agreement and other matters relevant to the supply of Products hereunder (each such meeting hereinafter referred to as a
"Quarterly Meeting"). Prometheus shall provide to GSK at each Quarterly Meeting all other readily available, appropriate data relating to the Products or Prometheus' prospective demands and trends for
the Products. 

        2.6    Purchase of Products and Materials upon Expiration or Termination.    

        (a)    Products and API.    Within ten (10) Business Days of any termination of this Agreement under
Section 14.2(b) and 14.2(d) or by Prometheus pursuant to Section 14.2(a) or 14.2(c) or the expiration of this Agreement, GSK shall provide Prometheus with a description of all finished
Products and API then held in GSK inventory subject to Section 6.1. Within ten (10) Business Days of Prometheus' receipt of such description, Prometheus shall submit a purchase order for
all of such inventory of Products and/or API, which purchase order shall specify a purchase price equal to (i) for the then-current Product Price per  Schedule 3.1 and (ii) the API price
set forth on Schedule 2.6 for finished API, and GSK shall sell all of the foregoing inventory
of Products and/or API to Prometheus for such purchase price. In the event a purchase order is not provided, then Prometheus shall be deemed to have provided a purchase order for all of such inventory
of Products and/or API. For the avoidance of doubt, Products or API sold to Prometheus under this Section 2.6(a) are subject to Article VI. 

6

 

        (b)    Materials.    Within ten (10) Business Days of any termination of this Agreement under
Section 14.2(b) and 14.2(d) or by Prometheus pursuant to Section 14.2(a) or 14.2(c) or the expiration of this Agreement, GSK shall provide Prometheus with a description of all quantities
of Materials listed on Schedule 2.6(b), as such Schedule is amended by the Parties from time to time to conform with Materials changes reflected
in any Specification changes made pursuant to Section 4.2, then held in GSK inventory that are (i) specific to the Product, (ii) have been maintained by GSK consistent with the
requirements of Section 4.4(a) and (iii) not otherwise usable by GSK in its ordinary course of business of manufacturing pharmaceutical products. Within ten (10) Business Days of
Prometheus' receipt of such description, Prometheus shall submit a purchase order for all of such inventory of Materials and such purchase order shall specify a purchase price equal to GSK's invoiced
cost for Materials, and GSK shall sell all of the foregoing inventory of Materials to Prometheus for such purchase price. In the event a purchase order is not provided, then Prometheus shall be deemed
to have provided a purchase order for all of such inventory of Materials. For the avoidance of doubt, Materials sold to Prometheus under this Section 2.6(b) are subject to
Section 6.9(d). 

        (c)   GSK
shall use commercially reasonable efforts to make available to Prometheus for pickup by Prometheus' carrier the Products, API and Materials purchased by Prometheus
under subsections (a) and (b) of this Section 2.6 as soon as practicable (and in any case within fifteen (15) days) after Prometheus' purchase order therefor. Should
Prometheus desire for GSK to destroy any of such Products, API, or Materials, Prometheus shall provide written notice to GSK to destroy such Products, API or Materials at Prometheus' expense and GSK
shall comply with Prometheus request. The Parties
agree and acknowledge that the Parties' rights and obligations under this Section 2.6 with respect to purchases at contract expiration or termination are independent of the Parties' rights and
obligations with respect to purchases during the Initial Term under Sections 4.6(b) and (c). 

Article III
 Prices for Products; Shipment; Payments  

        3.1    Price; Annual Adjustment.    

        (a)   During
the Term, Prometheus shall pay the applicable price for each Product set forth on Schedule 3.1, attached
hereto and incorporated herein ("Product Price"), subject to adjustment as described in this Section 3.1. 

        (b)   The
Product Prices will be reviewed annually during the Initial Term and first Renewal Term, and if required may be adjusted each January 1 beginning in January
2009 upon sixty (60) days written notice from GSK to Prometheus. Any increase during the Initial Term and first Renewal Terms shall not be in excess of [***]. The
Parties promptly shall amend Schedule 3.1 to reflect any such price adjustments during the Initial Term and first Renewal Term. 

        (c)   

          (i)  In
the event Prometheus elects to extend the Agreement per Section 14.1 beyond the first Renewal Term, then at the end of the first Renewal Term, the Product
Prices then in effect shall be automatically increased by [***] percent ([***]%) and the Product Prices shall be applied retroactively to the
beginning of the first Renewal Term and the Parties promptly shall amend Schedule 3.1 to reflect such price adjustments. GSK will calculate the
new value of the Product supplied during the first Renewal Term based on the adjusted Product Price 

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

7

 

per
Schedule 3.1 and issue an invoice (payable in full within ten (10) days) to Prometheus for the difference between the new value of Product supplied and the amount previously invoiced
for Product. Any subsequent invoices for the first Renewal Term shall reflect the adjusted Product Price per the amended Schedule 3.1.
Notwithstanding the foregoing, if GSK's failure to timely perform its obligations under the Transition Plan prevents Prometheus' planned qualification of a Third Party Supplier of Product prior to the
end of the Initial Term, then the effective date of the [***] percent ([***]%) price increase under this Section 3.1(c)(i) shall be
delayed an amount of days equal to the number of days GSK's performance delayed Prometheus' qualification of a Third Party Supplier of Product. 

         (ii)  At
the beginning of any subsequent Renewal Term(s), the Product Prices in effect at the end of the immediately preceding Renewal Term (including, for the avoidance of
doubt, the adjusted price per Section 3.1(c)(i)) shall be automatically increased by [***] percent ([***]%) and the Parties promptly shall
amend Schedule 3.1 to reflect any such price adjustments. 

        (d)   Except
as set forth herein, Prometheus shall be responsible for all costs related to the preparation of new packaging Materials, including all new packaging artwork
design and preparation, die costs, films and proofs. Notwithstanding the foregoing, GSK shall be responsible for those costs associated with the initial labeling change as described in
Section 4.2(d)(ii), other than costs related to obsolete Materials. Prometheus shall be responsible for all costs of obsolete Materials (including all labels and packaging materials) and
associated destruction of such obsolete Materials by GSK related to any changes related to labels or packaging Materials under Section 4.2(d), except where GSK requests a labeling change
pursuant to Section 4.2.(d)(i), in which case GSK shall be responsible for all costs of obsolete Materials (including all labels and packaging materials) and associated destruction of such
obsolete Materials by GSK related to such changes. 

        (e)   Prometheus
shall be responsible for all costs of new or replacement tooling costs specific to the Product which is required and associated with manufacturing or
packaging for the Products, except where the negligence of GSK is the direct cause of Prometheus having to make such new/replacement tooling investment. 

        (f)    Prometheus
shall be responsible for the cost of any Specification changes (i) requested by Prometheus pursuant to Section 4.2 to maintain high standards
but that are not required for compliance with Regulatory Acts and Applicable Laws, (ii) required for compliance with Regulatory Acts and Applicable
Laws that are specific to the Product, or (iii) required for compliance with Regulatory Acts and Applicable Laws that are not specific to the Product but nonetheless impact upon the Product,
but in such case, only such incremental cost attributed to the Product and excluding any amounts attributable to capital expenses (e.g., equipment or Facility improvements) that cannot be
identified specifically to and used exclusively for the Product. 

        (g)   GSK
shall be responsible for the cost of any Specification changes requested by GSK pursuant to Section 4.2 to maintain high standards but that are not required
for compliance with Regulatory Acts and Applicable Laws. In addition, GSK shall be responsible for cost of all other Specification changes required pursuant to Section 4.2 for compliance with
Regulatory Acts and Applicable Laws that are not Prometheus' responsibility under Section 3.1(f). 

        3.2    Invoices.    

        (a)   All
invoices for API, API Intermediate, Materials or API raw materials and intermediates purchased by Prometheus under Sections 2.6(a), 2.6(b) or 4.6(c) or for
expenses, fees or costs 

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

8

 

(other
than expenses, fees or costs for the purchase of Product) that Prometheus is obligated to pay to GSK under this Agreement must be submitted by GSK (or its Affiliate) to Prometheus at
Prometheus' designated address. 

        (b)   All
invoices for Products shall be submitted by GSK (or its Affiliate) to Prometheus at Prometheus' designated address upon release of Products for Delivery to
Prometheus as set forth in the applicable Trading Services Agreement. 

        (c)   Not
less than thirty (30) days prior to Delivery of the first shipment of Product to Prometheus, Prometheus and GSK's Affiliate shall enter into an agreement in
the form set forth in Schedule 3.2(c) (the "Trading Services Agreement"). For the avoidance of doubt, in the event of any inconsistency or
conflict between the terms of the Trading Services Agreement and this Agreement, the terms of this Agreement shall govern. 

        3.3    Payment.    

        Payments
for Products or reimbursable costs and/or expenses invoiced under Section 3.2 shall be due net thirty (30) days from the date of invoice. Any payment due GSK (or
its Affiliate) from Prometheus that is past due under this Agreement and not subject to a bona fide dispute shall bear interest at a rate equal to the [***] of
(i) [***] percent
([***]%) per year or (ii) the maximum rate permitted by Applicable Law, calculated based on the number of days that the payment is delinquent. Prometheus and GSK
stipulate and acknowledge that the credit terms stated herein expressly represent a financial accommodation and are a material and not merely incidental part of this Agreement. Accordingly,
Prometheus' rights to any extension of credit are subject to 11 U.S.C. §§ 365(c)(2) and 365(e)(2)(B). Prometheus and GSK further stipulate and acknowledge that the
financial condition of Prometheus is a material condition to GSK's willingness to sell on credit to Prometheus, and accordingly, if Prometheus fails to timely pay any amounts due under this
Section 3.3 (excluding amounts that are the subject of a bona fide dispute), at GSK's sole election, GSK may (i) require cash payment for all current amounts due, and/or
(ii) require cash payment for all future amounts due or appropriate security before resumption of any future shipments of Product or API. If Prometheus fails to comply with GSK's election under
(i) and/or (ii), at GSK's sole election, GSK may additionally (a) delay or deny future Product or API shipments, and/or (b) delay or suspend its existing manufacturing obligations
under this Agreement. GSK's delay, denial and suspension pursuant to this Section 3.3 shall not be a material breach of GSK's obligations under this Agreement. 

        3.4    Payment Denominations.    

        All
payments to be made under this Agreement shall be made in United States dollars unless otherwise specified herein or agreed by the Parties. 

        3.5    Shipment; Title; Inspection.    

        (a)    General.    All Products shall be shipped [***] (as defined in INCOTERMS, 2000 edition,
published by the International Chamber of Commerce, ICC Publication 560) [***]. GSK will load the Product onto the transport vehicle of Prometheus' designated carrier or
freight forwarder at the Facility. Pallet configurations for the Product shall be set forth in the applicable Specifications. 

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

9

  

        (b)    Title/Risk of Loss.    Title to and risk of loss with respect to any Products shall pass from GSK to Prometheus
when GSK finishes loading the Product onto the transport vehicles of Prometheus' designated carrier or freight forwarder at the Facility. Product shall be deemed delivered to Prometheus upon GSK's
completion of loading the Product onto the transport vehicles of Prometheus' designated carrier or freight forwarder at the Facility ("Delivered" or "Delivery"). 

        (c)    Inspection.    Following receipt of a shipment of Product from GSK, Prometheus or its designated agent shall,
within thirty (30) days, carry out a visual inspection of such shipment to ensure that packaging and labeling of Product has taken place in accordance with the Specifications and is accompanied
by an associated Certificate of Analysis, and shall notify GSK in writing if the visual inspection reveals any quantitative discrepancies or other deficiencies. For the purposes of this Agreement,
"visual inspection" also shall include: 

          (i)  comparing
the applicable Purchase Order against the documentation accompanying the shipment to verify that the Delivery Date, identity, quantity and exterior shipment
labeling comply with the Purchase Order and match the accompanying documentation for the shipment of Product; 

         (ii)  verifying
that the Certificate of Analysis for the shipment conforms in all material respects with the requirements of this Agreement; and 

        (iii)  visually
inspecting the exterior of the shipment of Products to verify that the shipment appears to be in good condition. 

        3.6    Taxes.    

        (a)   Prometheus
shall be responsible for (i) any personal property Taxes on property it owns or leases; (ii) franchise and privilege Taxes on its business; and
(iii) Taxes based on its net income or gross receipts. 

        (b)   GSK
shall be responsible for (i) any personal property Taxes on property it owns or leases; (ii) franchise and privilege Taxes on its business; and
(iii) Taxes based on its net income or gross receipts. 

        (c)   GSK
shall bear all responsibility and liability for all sales, use, excise, value-added, services, consumption, and other Taxes and duties payable by GSK on any goods or
services used or consumed by GSK in manufacturing the Products where the Tax is imposed on GSK's acquisition or use of such goods or services and the amount of Tax is measured by GSK's costs in
acquiring these goods or services. GSK shall be solely responsible for (i) payment of all compensation to GSK personnel, whether employees or subcontractors of GSK, (ii) all health or
disability insurance, retirement benefits, and other welfare or pension benefits to which GSK employees may be entitled and (iii) all employment Taxes and withholding with respect to GSK
employees. 

10

 

        3.7    Timely Delivery.    

        GSK
shall use commercially reasonable efforts to ensure that each Product delivery to Prometheus and/or its designee is made within the time frames requested by Prometheus on accepted
Purchase Orders. From time to time, GSK may be unable to meet the Delivery Date set forth in an accepted Purchase Order. In such an event, GSK promptly shall notify Prometheus of the revised Delivery
Dates. Prometheus shall provide GSK prompt notice of its agreement to such revised Delivery Dates unless the revised dates would reasonably be expected to result in having less than thirty
(30) days of
safety stock or in short-dated Product inventory with less than twelve (12) months remaining shelf life. If the revised Delivery Dates would result in Prometheus having less than thirty
(30) days of safety stock or short-dated Product situation, Prometheus shall provide GSK notice of its rejection of the revised Delivery Dates and reasonably detailed documentation evidencing
the below thirty (30) day safety stock or short-dated Product situation. Immediately thereafter, GSK shall enter Prometheus' open purchase order(s) into GSK's "Supply Chain Issue Management"
process to escalate the matter to a senior level discussion for evaluation and resolution and shall take those actions necessary to fill such purchase order(s). Prometheus shall receive a discount of
[***] percent ([***]%) for Product delivered more than [***] calendar days past the Delivery Date specified in a Purchase
Order accepted by GSK under Section 2.3, as such Delivery Date may be revised under this Section 3.7. Prometheus shall receive a discount of [***] percent
([***]%) for Product delivered more than [***] calendar days past the Delivery Date specified in a Purchase Order accepted by GSK under
Section 2.3, as such Delivery Date may be revised under this Section 3.7. Prometheus shall receive a discount of [***] percent
([***]%) for Product delivered more than [***] calendar days past the Delivery Date specified in a Purchase Order accepted by GSK under
Section 2.3, as such Delivery Date may be revised under this Section 3.7. For the avoidance of doubt, Prometheus shall not be entitled to any discount for Product reflected on any
Purchase Order reflecting an accommodation and accepted by GSK under Section 2.4. In lieu of receiving a discount, in the event Prometheus already has qualified a Third Party Supplier under
Section 4.6(a), Prometheus may cancel the applicable Purchase Order and, if desired, arrange for manufacture of such quantities by such alternate Third Party supplier. Any discount amount shall
be paid, at GSK's option, either by (a) reflecting such amount in GSK's invoice for such Product subject to the late delivery, (b) granting Prometheus a credit against any outstanding
invoices, or (c) paying Prometheus such amount in cash, by check or via other payment method acceptable to Prometheus. The remedies set forth in this Section 3.7 and
Section 14.2(c) shall constitute Prometheus' sole remedies for GSK's failure to meet the Delivery Date set forth in an accepted Purchase Order. 

Article IV
 Manufacture of Products  

        4.1    General.    

        GSK
shall manufacture, test, package, store, handle, label, release, deliver and perform such stability studies and other required testing (as identified in the Quality Agreement) of the
Product in accordance with the Specifications, cGMPs, Applicable Laws, Regulatory Acts and the Quality Agreement. GSK acknowledges and agrees that it has all Specifications, reference materials and
manufacturing documentation necessary to manufacture, package and test Product as of the Effective Date. During the Term, Prometheus shall be responsible to provide GSK with all Product-specific
tooling required and associated with manufacturing or packaging for the Products. Prometheus shall not remove any of such tooling from the Facility without the written consent of GSK prior to GSK's
completion of all of its manufacturing and supply obligations under this Agreement. GSK acknowledges
and agrees that as of the Effective Date such Product-specific tooling is in GSK's possession at the Facility. 

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

11

 

        4.2    Specification Changes.    

        (a)   During
the Term, GSK will accept a labeling change from Prometheus as contemplated by this Section 4.2 but otherwise the Parties acknowledge and agree that GSK
does not intend to make any material changes (such as packaging design, manufacturing process or similar or related changes) to the existing Product during the Term. 

        (b)   Either
Party may request a Specifications change intended to maintain high standards but that are not required for compliance with Regulatory Acts and Applicable Laws.
The Parties shall discuss in good faith the implementation of any such requested changes; provided however, that, such changes shall be made only with the Parties' mutual consent. Either Party may
provide notice to the other Party regarding a Specifications change required for compliance with Regulatory Acts and Applicable Laws, and the other Party's approval of such Specification change shall
not be unreasonably withheld; provided, however, if there are two or more alternatives for complying with the change in Regulatory Acts and Applicable Laws, each of which GSK believes, in its sole
discretion, it can implement on a product-by-product basis without undue burden to GSK's overall manufacturing operations, then Prometheus shall have the right to choose which
of such alternatives shall be implemented. The costs for changes to the Specifications under this Section 4.2(b) shall be borne as described in Sections 3.1(f) and 3.1(g), as applicable. 

        (c)   GSK
shall not make any revisions to the Specifications without prior written consent of Prometheus in accordance with the Quality Agreement. All requests by GSK for such
revisions shall be submitted in writing to Prometheus on the forms included in the Quality Agreement. 

        (d)   (i)    General.    From time to time Prometheus or GSK may require labeling or artwork changes that
will affect the Products. These changes may either be initiated by Prometheus or GSK or may be a requirement resulting from cGMPs changes. Responsibility for the cost of all such labeling or artwork
changes under this Section 4.2(d) shall be borne as described in Section 3.1. 

        (ii)    Initial Product Labeling.    The Parties agree that the Product labeling for Products shall initially display
GSK's artwork, logos and trademarks and an NDC code that contains GSK's labeler code. GSK shall prepare the initial labeling change for Product to change from GSK's artwork, logos, trademarks and NDC
Code to Prometheus' artwork, logos, trademarks and NDC Code provided that Prometheus supplies GSK with all necessary information, including artwork, logos, trademarks and NDC Code, to make such change
in a timely manner with at least six-months lead-time prior to the Delivery Date specified in any Purchase Order for Product that Prometheus desires will contain such new
labeling. Except with respect to information provided by GSK, Prometheus shall be responsible for ensuring the accuracy of all information contained on all labels and labeling for the Products and for
the compliance of all such labels and labeling with Applicable Laws. Prometheus shall, within ten (10) Business Days of receipt of agreed artwork documents, either provide GSK any necessary
corrections thereto or notify GSK of its approval of such artwork documents. GSK's obligations to supply Prometheus with Product with the new initial labeling by such requested Delivery Date shall be
contingent upon GSK's timely receipt of the foregoing artwork information and timely approval of such artwork and other necessary items and cooperation from Prometheus. 

12

 

        (iii)    All Other Labeling.    Upon completion of the initial labeling per Section 4.2(d)(ii) and receipt of
the associated Materials, GSK shall provide the native files to Prometheus for such labeling. For any changes other than the initial change required to change from GSK's logo and NDC to Prometheus'
logo and NDC, Prometheus shall be responsible for preparing all such labeling or artwork changes. All labeling or artwork changes shall use the existing dielines for such Materials. Any GSK
information, if required, for the labeling such as component number, company name or address shall be provided by GSK to Prometheus and Prometheus shall allow GSK [***]
Business Days to review any change to GSK information reflected in any changed labeling prior to approval. For any such changes, the Parties shall agree upon the timeframe for implementation, provided
that such timeframe to implement shall not be less than [***] days in advance of the Delivery Date under the corresponding Purchase Order planned for implementation. Any
changes to existing dielines must be reviewed and agreed between the Parties prior to establishing and agreeing on implementation of such changes and subject to Section 4.2(b). Additionally,
Prometheus shall be responsible to provide approved native files to the approved vendors of Materials and should Prometheus require proofs, samples or other such items for approval of its artwork,
Prometheus shall work directly with the vendors to obtain such items. Prometheus will provide to GSK final approved artwork in an acceptable graphics form (i.e., InDesign or Ilustrator CS1) and
GSK will migrate such approved artwork into its systems pursuant to Section 4.4(a). 

        (iv)    Confirmation of Labeling Responsibilities.    For avoidance of doubt, except for GSK's preparation of the
initial labeling change under Section 4.2(d)(ii), Prometheus shall have sole responsibility for preparing and providing approved artwork to GSK. GSK's responsibility for labeling changes other
than the initial labeling change shall be limited to (A) providing GSK information to Prometheus and migrating approved artwork into its systems under Section 4.2(d)(iii), and
(B) placing orders with Prometheus' approved vendors under Section 4.4(a). 

        (e)   Prometheus
will be responsible for making appropriate filings or notifications of any such Specification changes to the applicable Governmental Authorities, provided
that to the extent such information has not been previously provided by GSK, GSK shall reasonably cooperate with Prometheus with such filings and/or notifications. Prior to implementation of any
change to the Specifications, the Parties shall agree upon a procedure to ensure that applicable Governmental Authorities have approved the Specifications, to the extent necessary, and that GSK is
given a reasonable period of time to implement any changes required by any such applicable Governmental Authority with regard to the Specifications. 

        4.3    Validations and Stability Studies.    

        (a)    General.    During the Term, GSK shall perform, at no additional cost to Prometheus, on an on-going
basis all validations and stability studies required by the Specifications as in effect as of the Effective Date, cGMPs or Applicable Laws in connection with the regular course of manufacturing the
Products for commercial supply, provided that Prometheus shall reimburse GSK for the cost of any additional validation or stability studies necessitated by a change to the Specifications made at the
request of Prometheus or required by Applicable Law. 

        (b)    Reference Standards.    Unless available through the United States Pharmacopeia, Prometheus shall provide,
without charge to GSK, analytical reference standards for each of the Products. The reference standards shall be provided in quantities reasonably required for GSK to perform its obligations relating
to the manufacture, stability or other testing, or any other obligation under this Agreement. 

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

13

 

        4.4    Materials.    

        (a)    General.    To produce Products under this Agreement, GSK will obtain Materials and API raw materials and
intermediates (identified on Schedule 4.6(c)) only from suppliers named in the Specifications, where applicable, and shall store, maintain, test
and release, as applicable, all Materials, and API raw materials and intermediates (identified on Schedule 4.6(c)) in accordance with the
applicable Specifications, the Quality Agreement, and as otherwise required by cGMPs, Applicable Laws and Regulatory Acts. GSK acknowledges and agrees that (i) it has all Specifications and
manufacturing documentation necessary to manufacture and test API as of the Effective Date, and (ii) it has all Specifications necessary to test Materials as of the Effective Date. To the
extent necessary to fulfill its obligations under this Agreement, GSK shall, during the Initial Term, perform a one-time API manufacture using the Stage 3B (alosetron base PG)
intermediate material (the "API Intermediate") held in inventory by GSK as of the Effective Date as identified on Schedule 4.4(a) to produce API
in standard batch sizes of approximately [***] kilograms each, and total batches not to exceed a total yield of approximately [***] kilograms. Each
batch produced or the total batches produced may vary by ± [***] percent ([***]%). The batches produced in this
one-time API manufacture shall be as outlined in Section 4.6(b) below, and Prometheus acknowledges that production of API from API Intermediate will require at least
six-months lead time from Prometheus' notice under Section 4.6(b)(i) and that GSK may, but shall not be obligated to, complete production of API from API Intermediate earlier than
January 31, 2009. GSK shall not be obligated to manufacture or obtain additional API or API Intermediate beyond the amounts identified in this Section 4.4(a) except to the extent such
API or API Intermediate is not usable or deemed Nonconforming as in Section 4.4(b) below. Additionally, GSK shall only be obligated to manufacture Products in standard batch sizes, and if GSK
no longer possesses sufficient API to produce a single standard size batch of any Product (so long as GSK has otherwise fulfilled its API supply obligations under Section 4.4(b) below), GSK
shall provide written notice of same to Prometheus and this Agreement shall immediately terminate in accordance with Section 14.2(b). 

        (b)    API Supply.    

        (i)    API Intermediate Testing.    GSK will re-test the API Intermediate listed
on Schedule 4.4(a) prior to the Closing Date and, at Closing, GSK shall notify Prometheus of any API Intermediate that is not usable and such
amounts shall not be available for purchase by Prometheus or included as part of the one-time manufacture of API under Section 4.4(a). For the avoidance of doubt, all API
Intermediate quantities available for purchase or manufacture under Section 4.6(b) shall not exceed the amounts identified on Schedule 4.4(a).  

        (ii)    Assurance of API.    Pursuant to the aforementioned Section 4.4(b)(i), in the
event that a sufficient quantity of API Intermediate is not usable in the ordinary course of business to produce two (2) batches of API in standard batch sizes of approximately
[***] kilograms each, which batches may vary by ± [***] percent ([***]%), then GSK
shall manufacture or have manufactured sufficient API Intermediate that meets Specifications to produce up to the lesser of (i) two (2) batches of API in standard batch sizes of
approximately [***] kilograms each, which batches may vary by ± [***] percent ([***]%),
or (ii) such quantity as may be requested by Prometheus to procure as API or API Intermediate pursuant to Section 4.6(b). Thereafter, in accordance with Section 4.4(a), GSK shall
convert such API Intermediate into API for Prometheus. 

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

14

 

        (iii)    Compliance with API Specifications; Nonconforming API.    GSK shall manufacture, have manufactured, store,
maintain, test and release all finished API in accordance with the applicable Specifications. GSK shall provide Prometheus with a Certificate of Analysis for each batch of API shipped to Prometheus.
In the event that API delivered to Prometheus pursuant to Sections 2.6(a), 4.6(b)(i), and 4.4(b)(ii) above is found to have a Nonconformity caused by GSK, then Sections 6.1, 6.2. 6.3,
6.8 and 6.9(b) shall be deemed applicable. Upon confirmation of a Nonconformity, the Parties shall meet to discuss the situation and mutually agree in good faith that there is a compelling need to
replace all or a portion of such Nonconforming API after taking into account all relevant facts and circumstances, including the remaining period in the Term, the status of API manufacturing transfer
activities, the nature of the Nonconformity and ability to rework, current Product inventories, Product sales and anticipated changes in Product demand. To the extent the Parties agree such
Nonconforming API will be replaced, then any replacement schedule shall take into account GSK's manufacturing schedules, availability of materials to produce API, Product sales levels, Product
inventories, and similar relevant considerations. 

        (c)    Materials Certifications.    GSK shall prepare or cause to be prepared by its suppliers, as the case may be,
all certifications as to any Materials and API raw materials and intermediates (identified on Schedule 4.6(c)) required by cGMPs or Applicable
Laws (each, a "Materials Certification"). Such Materials Certifications shall include, without limitation, any and all required certifications related to Materials derived from animal products. 

        (d)    Supply Shortages.    Without limiting any other rights or remedies available to Prometheus, in the event of any
shortage in the supply of any Materials due to a Force Majeure Event or otherwise, GSK shall develop an allocation plan that allows it to substantially meet its obligations to Prometheus and its other
customers taking into account required delivery dates, product volumes and anticipated timing of deliveries to GSK of additional quantities of Materials in short supply. 

        4.5    Quality Agreement.    

        At
least thirty (30) days prior to the first Delivery of Products under this Agreement, the Parties will enter into a Quality Agreement in substantially the form attached hereto
as Schedule 4.5 (the "Quality Agreement"). Each Party shall comply with its obligations set forth in the Quality Agreement. In the event of a
conflict between the terms of the Quality Agreement and the terms of this Agreement, the terms of this Agreement shall control. The Quality Agreement shall establish the procedure to be followed if
either GSK or Prometheus desires to change any aspect of the manufacturing procedure for Products, including but not limited to any change in the Specifications as described in Section 4.2
above. The Quality Agreement shall contain a mechanism to assure that any applicable Governmental Authorities have approved the Specifications, to the extent necessary, and that GSK is given a
reasonable period of time to implement any changes required by any such applicable Governmental Authority with regard to the Specifications. 

        4.6    Manufacturing Transition; API Materials.    

        (a)   Prometheus
shall use commercially reasonable efforts (i) to transfer manufacture of the Products to one or more Third Party suppliers of Prometheus that
Prometheus believes in its sole discretion is capable of obtaining necessary Consents from the appropriate Regulatory Authorities and is able to meet Prometheus' anticipated demands for Product (each,
a "Third Party Supplier"), and (ii) to obtain all necessary Consents from the appropriate Regulatory Authorities of the transfer as soon as practicable after the Effective Date of this
Agreement. For the avoidance of doubt, the manufacturing transfer described in the immediately preceding sentence includes the transfer of both API manufacture and Product manufacture and any related
stability studies to 

15

 

Prometheus
or one or more of its Third Party Suppliers. Prometheus will perform, at its own expense, all studies required by any Governmental Authority in connection therewith, and shall prepare or
have prepared the necessary documentation as required by any Governmental Authority to effect such a transfer and Prometheus shall diligently seek such Consents. Promptly (and in any case within five
(5) Business Days) after learning that Regulatory Authorities have provided the necessary Consents for the manufacture of the Products at a Third Party Supplier's facility, Prometheus shall
provide written notice thereof to GSK. GSK agrees to reasonably cooperate with Prometheus in connection with the transfer contemplated by this Section 4.6 and in Prometheus receiving the
necessary Consents therefor. GSK's reasonable cooperation shall include assistance in the transfer of API manufacture and Product manufacture and any related stability studies within those parameters
generally outlined in Schedule 4.6(a). Within [***] days after the Closing Date, Prometheus shall have identified Third
Party Supplier(s) to whom it intends to transition API manufacture and Product manufacture and any related stability studies. Within [***] days after the Closing Date,
Prometheus shall present to GSK a written plan that Prometheus deems consistent with this Agreement and that outline the activities, timelines and other requirements in sufficient detail necessary to
transition API manufacture and Product manufacture and any related stability studies (such written plan, the "Transition Plan"). GSK shall review the Transition Plan (which review shall not be
unreasonably withheld) and agree (i) activities to be performed by GSK in accordance with the GSK resources committed in Schedule 4.6(a),
and (ii) related timeframes to be met by GSK consistent with GSK's ongoing obligations, normal manufacturing practices and scheduling. 

        (b)   With
respect to the API Intermediate, Prometheus shall: 

          (i)  Within
[***] days after the Closing Date, subject to Section 2.6(a) and 4.4(a), provide GSK written notice of the quantities
(e.g. zero (0) quantity or such other required amount in [***] kg increments) of that portion of the API Intermediate identified on  Schedule 4.4(a) it desires GSK to manufacture into API
per Section 4.4(a). Except as set forth in Section 2.6(a), Prometheus shall
have no obligation to purchase such requested quantity of API. 

         (ii)  Within
[***] days after the Closing Date, provide GSK written notice of that portion of the API Intermediate identified on  Schedule 4.4(a) remaining, after taking into account the amount covered by
Prometheus' written notice under Section 4.6(b)(i) and any
amount that may be required by GSK to fulfill its obligations under Section 4.4(b), that Prometheus agrees at that time to purchase, which amount may be adjusted and will only be available for
purchase after successful completion of the one-time manufacture of API pursuant to Section 4.4(a). Upon successful completion of the one-time manufacture, GSK shall
notify Prometheus of the remaining API Intermediate available and within ten (10) Business Days after the date of such notice, Prometheus shall (i) confirm, revise or cancel the
quantities of API Intermediate it intends to purchase, and (ii) provide a purchase order for the amount of API Intermediate it has confirmed and agreed to purchase, if any, pursuant to
subsection (i) above. GSK will accept the purchase order and pursuant to Prometheus' purchase order and at Prometheus' expense, GSK shall make the purchased quantities of API Intermediate
available to Prometheus' carrier or freight forwarder for shipment within thirty (30) days of receipt of the confirmation and purchase order from Prometheus. GSK shall provide Prometheus with a
Certificate of Analysis or other applicable documents for each batch of API Intermediate shipped to Prometheus. 

        If
Prometheus does not provide notice required under this Section 4.6(b), GSK may, at its discretion, elect to manufacture the API Intermediate pursuant to Section 4.4(a)
and Prometheus shall be obligated to purchase such API pursuant to Section 2.6. 

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

16

 

        (c)   As
promptly as practical but not greater than [***] days after the Closing Date, Prometheus shall provide GSK written notice of the quantities of
raw materials and intermediate identified on Schedule 4.6(c) it agrees to purchase, which amount will only be available for purchase after GSK's
successful completion of the one-time manufacture of API. Upon successful completion of the one-time manufacture, GSK shall notify Prometheus of the remaining raw materials and
intermediate available and within ten (10) Business Days after the date of such notice, Prometheus shall (i) confirm, revise or cancel the quantities of raw materials and intermediate it
intends to purchase, and (ii) provide a purchase order for the amount of raw materials and intermediate it has confirmed and agreed to purchase, if any, pursuant to subsection (i) above.
GSK will accept the purchase order and pursuant to Prometheus' purchase order and at Prometheus' expense, GSK shall make the purchased quantities of raw materials and intermediates available to
Prometheus' carrier or freight forwarder for shipment. GSK shall provide Prometheus with applicable testing documents for each batch of raw materials and intermediates shipped to Prometheus. 

        4.7    Shelf Life.    

        GSK
shall ensure that as of the later of the Delivery Date or the actual date Product is made available to Prometheus' carrier or freight forwarder for shipment, each batch of Products
shall have at least the [***] of eighteen (18) months of expiry or [***] percent ([***]%) of its shelf life
remaining. 

Article V
 Confidentiality  

        5.1    Confidentiality.    GSK and Prometheus agree to keep secret and confidential any and all information
("Confidential Information") either Party disclosed hereunder to the other Party and not to disclose such Confidential Information to any person or entity, except (i) to employees, Affiliates,
attorneys, accountants, consultants, agents or representatives of each Party having a need to know the information in order to fulfill such Party's rights or obligations hereunder; (ii) as
required by an applicable Regulatory Authority, or (iii) to contractors, manufacturers, suppliers, potential investors, lenders or acquirers of the receiving Party who are subject to terms of
confidentiality at least as restrictive as those set forth in this Article V. The parties shall use the Confidential Information solely for the purpose of carrying out the obligations contained
in this Agreement. 

        5.2    Limitations.    The obligations imposed by this Section shall not apply to any Confidential Information: 

        (a)   which
at the time of disclosure is in the public domain; 

        (b)   which,
after disclosure, becomes part of the public domain by publication or otherwise, through no fault of the receiving Party; 

        (c)   which
at the time of disclosure is already in the receiving Party's possession, except through prior disclosure by GSK, Prometheus or an Affiliate of either of them, and
such possession can be properly documented by the receiving Party in its written records, and was not made available to the receiving Party by any person or party owing an obligation of
confidentiality to the disclosing Party; 

        (d)   which
is rightfully made available to the receiving Party from sources independent of the disclosing Party; 

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

17

  

        (e)   which
is required to be disclosed in the course of litigation or other legal or administrative proceedings; or 

        (f)    which
is required to be disclosed by law or governmental agency, including the Securities Exchange Commission or the FDA; provided that in all cases the party receiving
the Confidential Information shall, to the extent permitted, give the other Party prompt notice of the pending disclosure and shall cooperate in such other Party's attempts, at such other Party's sole
expense, to seek an order maintaining the confidentiality of the Confidential Information. 

        5.3    Term of Confidentiality.    The obligation of confidentiality and nonuse set forth in this Article V
shall survive for a period of ten (10) years beyond the termination or expiration of this Agreement. 

        5.4    Ownership of Confidential Information.    Confidential Information shall remain the exclusive property of the
disclosing Party. 

Article VI
 Product Testing and Quality Assurance; Nonconformity  

        6.1    Testing of Product.    

        Prior
to release of Product to finished goods inventory or release for Delivery to Prometheus, GSK shall test the Products for Nonconformities (as defined below), in accordance with the
testing procedures described in the Specifications and the Quality Agreement and as otherwise required by cGMPs, Applicable Laws and Regulatory Acts. GSK shall provide Prometheus with a Certificate of
Analysis for each batch of Product shipped to Prometheus. 

        6.2    Nonconformity.    

        (a)    Nonconformity.    If either Party becomes aware that any batch or shipment of Product sold to Prometheus has a
Nonconformity, at any time regardless of the status of GSK's testing and quality assurance activities, such Party shall notify the other Party as soon as reasonably practicable of becoming aware of
such Nonconformity (provided such failure to provide notice by Prometheus shall not affect Prometheus' ability to reject the Product except as otherwise specified in Section 6.3).
"Nonconformity" means a Product characteristic that (i) is attributable to a Party's failure to manufacture (if manufactured by a Party or any of its Affiliates or Third Party designee(s)),
test, package, store, label, release or deliver, as such responsibilities are applicable to a Party or any of its Affiliates or Third Party designee(s), any Product in accordance with the
Specifications, cGMPs, Applicable Laws, Regulatory Acts and/or the Quality Agreement; or (ii) causes any Product to fail to conform to the Specifications. In the event of a Nonconformity, the
Parties shall follow the procedure set forth in Section 6.2(b) and Section 6.3. 

        (b)    Products Subject to Nonconformity.    Any batch or shipment of Product sold to Prometheus, which is the subject
of a Nonconformity inquiry pursuant to Section 6.2(a) shall be handled as follows: 

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

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

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        6.3    Product Holds and Rejections.    

        (a)    General.    Prometheus or its designated agent shall notify GSK in writing promptly (and, in any case, within
thirty (30) days after Delivery of such Product to Prometheus or its designated agent) after placing any Product on hold for further investigation of a Nonconformity, or of Prometheus'
rejection of any batch (or part thereof) of any Product. Prometheus' or its designated agent's notice shall state the basis for the hold or rejection. Failure to give notice within this thirty
(30) day period shall constitute acceptance of any Product Delivered. Notwithstanding the foregoing, if such Nonconformity is deemed to have existed, pursuant to Section 6.3(b) below,
prior to Delivery and is not readily detectable upon initial inspection (e.g. a latent defect), GSK shall remain liable to Prometheus to the
extent provided in Section 6.8 and 6.9 for any latent defect that subsequently is discovered which renders the Product unsalable provided that Prometheus immediately informs GSK by a notice in
writing of such defect and rejection of the relevant shipment not later than ten (10) Business Days from the date of discovery of such latent defect. For the avoidance of doubt, GSK shall have
no liability to
Prometheus with respect to latent defects of Product or API held by Prometheus in inventory that has reached its expiry prior to Prometheus' notice to GSK. 

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

        6.4    Product Complaints.    

        Prometheus
shall provide prompt notice to GSK in writing of any and all complaints that Prometheus receives which implicate GSK's manufacturing or other processes at the Facility. Any
and all complaints of which GSK becomes aware relating to any Product shall promptly be forwarded to Prometheus' senior quality officer or his designee. Written notification between the Parties shall
be given as defined in the Quality Agreement. Prometheus shall be responsible for all complaint interactions with any Third Party complainant and, subject to Section 6.7, any Product
replacement if required. 

        6.5    Adverse Events.    

        For
the purposes of this Agreement, "Adverse Event" shall mean any adverse event associated with the use of any Product manufactured at the Facility in humans, whether or not considered
drug-related. With respect to any Product, GSK shall notify Prometheus promptly following its receipt of information of a possible Adverse Event. To the extent an Adverse Event of which
Prometheus becomes aware implicates GSK's manufacturing or other processes at the Facility, Prometheus shall promptly inform GSK of such Adverse Event and shall disclose to GSK any information it has
regarding that Adverse Event. Prometheus shall be responsible for all Adverse Event reporting to the applicable Governmental Authorities. 

19

 

        6.6    Investigations.    

        The
Parties shall investigate all reports of Nonconformity, Product complaints with respect to Product manufactured at the Facility and Adverse Events in order to assure the conformity
of Products to Specifications and cGMPs and the safety and efficacy of the Products. The Parties shall act promptly and shall cooperate fully in such investigations. GSK's obligations under this
Section 6.6 are limited to matters related to GSK's manufacturing or other processes at the Facility. 

        6.7    Product Events, Withdrawals, Field Corrections and Field Alerts.    

        In
the event Prometheus deems it necessary or is otherwise required by a Governmental Authority to initiate a recall, withdrawal or field correction of, field alert report or comparable
report with respect to any Product manufactured by GSK pursuant to this Agreement (in each instance, a "Product Event"), Prometheus shall notify GSK and GSK shall fully cooperate with Prometheus to
address, as appropriate, such Product Event. The costs and expense of such Product Event shall be borne by Prometheus except to the extent GSK is required to bear such costs and expenses under
Section 6.9. Without limiting the generality of the foregoing, with respect to product recalls each Party: 

        (a)   Shall
immediately notify the other Party of any defect found, subsequent to release, which may be grounds to initiate a recall; 

        (b)   Maintain
a procedure to handle Product recalls, including contact arrangements for hours falling outside the typical Business Day; and 

        (c)   Provide
all support reasonably necessary to support any Product recall investigation and subsequent actions. 

In
any event, Prometheus will be responsible for leading all Product Event investigations and for all associated communications with Governmental Authorities. 

        6.8    Disposition of Certain Products.    

        If
GSK's failure to manufacture, test, package, store, label, or release any Product in accordance with the Specifications, cGMPs, Applicable Laws, Regulatory Acts, and the Quality
Agreement directly results in any quantity of that Product having a Nonconformity or Product Event, then Prometheus
shall, at GSK's direction and at GSK's expense as set forth in Section 6.9, either (i) return the affected Product to GSK for rework or reprocessing by GSK; (ii) return the
affected Product for destruction by GSK; or (iii) have the Product disposed of by a Third Party designated by Prometheus (Prometheus or such Third Party to provide GSK with written
documentation of destruction) and in accordance with Applicable Laws. In addition, Prometheus shall be entitled to the remedies set forth in Section 6.9. The remedies provided in this
Section 6.8 and Section 6.9 shall be Prometheus' sole remedy with respect to any rejected quantity not distributed to Third Parties, and GSK shall have no other liability therefor. The
Party undertaking destruction of the Product shall be solely responsible for compliance with all Applicable Laws in connection with the destruction. 

        6.9    Replacements; Credits; Refunds.    

        (a)    Product.    Upon disposition of Product in accordance with Section 6.8, if GSK's failure to manufacture,
test, package, store, label, or release any Product in accordance with the Specifications, cGMPs, Applicable Laws, Regulatory Acts, and the Quality Agreement directly results in any quantity of a
Product having a Nonconformity or Product Event or if such Nonconformity is deemed to have existed pursuant to Section 6.3, prior to Delivery, then (i) GSK shall reimburse or credit
Prometheus the price paid by Prometheus to GSK for the affected Product under the original invoice for such affected Product, including any freight, taxes and insurance charges paid; (ii) upon
Prometheus' request, GSK shall promptly (but in no event longer than seventy-five (75) days, subject to availability of API as set forth in Section 4.4(a) and (b)), 

20

 

supply
Prometheus with replacement Product, which replacement Product shall be invoiced as any other shipment of Product under Section 3.2(b); and (iii) GSK shall also reimburse or
credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket charges incurred in
connection with collection, transportation and return or destruction of the affected Product. Prometheus shall provide GSK with such information and documentation as GSK may reasonably request to
confirm any of the foregoing charges, costs or expenses. Notwithstanding the foregoing, any replacement of Product under this Section 6.9(a) shall be subject to the limitation of
Section 4.4(a) and limited to the fulfillment of Purchase Orders accepted by GSK under Section 2.3 and 2.4. 

        (b)    API.    If GSK fails to manufacture, have manufactured, test, store, or release any API sold to Prometheus in
accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then (i) GSK shall reimburse or credit Prometheus the price paid by Prometheus to GSK for the affected API under
the original invoice for such affected API, including any freight, taxes, duties and insurance charges paid; and (ii) GSK shall reimburse or credit Prometheus for the actual costs incurred,
directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket charges incurred in connection with collection, transportation and return
or destruction of the affected API. Prometheus shall provide GSK with such information and documentation as GSK may reasonably request to confirm any of the foregoing charges, costs or expenses. For
the avoidance of doubt, any replacement of API is subject to the limitations of Section 4.4(a) and 4.4(b). 

        (c)    API Intermediate.    If GSK fails to manufacture, have manufactured, test, store, or release any API
Intermediate sold to Prometheus in accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then (i) GSK shall reimburse or credit Prometheus the price paid by
Prometheus to GSK for the affected API Intermediate under the original invoice for such affected API Intermediate, including any freight, taxes, duties and insurance charges paid; and (ii) GSK
shall reimburse or credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket
charges incurred in connection with collection, transportation and return or destruction of the affected API Intermediate. Prometheus shall provide GSK with such information and documentation as GSK
may reasonably request to confirm any of the foregoing charges, costs or expenses. For the avoidance of doubt, any replacement of API Intermediate is subject to the limitations of
Section 4.4(a) and 4.6(b). 

        (d)    Materials (other than API) Purchased Under Section 2.6(b).    If GSK fails to test, store or release any
Materials (other than API) sold to Prometheus pursuant to Section 2.6(b) in accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then GSK shall (i) reimburse
or credit Prometheus the price paid by Prometheus to GSK for the affected Materials (other than API) under the original invoice for such affected Materials (other than API), including any freight,
taxes, duties and insurance charges paid; and (ii) reimburse or credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or
any other out-of-pocket charges incurred in connection with collection, transportation and return or destruction of the affected Materials (other than API). Prometheus shall
provide GSK with such information and documentation as GSK may reasonably request to confirm any of the foregoing charges, costs or expenses. For the avoidance of doubt, GSK shall not be obligated to
replace any Materials (other than API) purchased by Prometheus under Section 2.6(b). 

        (e)    API Raw Materials and Intermediates Purchased Under Section 4.6(c).    If GSK fails to test, store or
release any API raw materials and intermediates sold to Prometheus pursuant to Section 4.6(c) in accordance with the Specifications, cGMPs, Applicable Laws, and Regulatory Acts, then GSK shall
(i) reimburse or credit Prometheus the price paid by Prometheus to GSK for 

21

 

the
affected API raw materials and intermediates under the original invoice for such affected API raw materials and intermediates, including any freight, taxes, duties and insurance charges paid; and
(ii) reimburse or credit Prometheus for the actual costs incurred, directly or indirectly, in shipping, insurance premiums, duties, taxes paid or any other out-of-pocket
charges incurred in connection with collection, transportation and return or destruction of the affected API raw materials and intermediates. Prometheus shall provide GSK with such information and
documentation as GSK may reasonably request to confirm any of the foregoing charges, costs or expenses. In addition, upon Prometheus' request, to the extent available in GSK's inventories, GSK shall
promptly (but in any event within sixty (60) days) supply Prometheus with replacement API raw materials and intermediates pursuant to Section 4.6(c), which replacement API raw materials
and intermediates shall be invoiced upon shipment under Section 3.2(a). 

        6.10    Product Returns from the Field.    

        During
the Term, Product returns are handled in the manner described in the Asset Purchase Agreement. 

        6.11    Retained Samples.    

        GSK
shall retain samples from each batch of Products for a period of one (1) year after the shipment of such batch to Prometheus or such longer period required by Applicable Laws
for record keeping, testing and regulatory purposes. In the event that Prometheus want samples from any batch of Products retained longer than one (1) year, Prometheus shall provide a written
request to GSK not less than thirty days prior to the first anniversary of the shipment of such batch requesting that such Product be shipped to Prometheus or a specified designee. Promptly after
receiving such request, GSK shall ship such Product to Prometheus at Prometheus' sole cost and expense. In the absence of any such request, GSK shall have the right to dispose of Product samples in
accordance with Applicable Law at GSK's sole cost and expense. 

Article VII
 Regulatory Matters  

        7.1    Manufacturing Consents.    

        (a)   GSK
holds and shall maintain all Consents now required of GSK, its Affiliates, and the Facility for the performance of its obligations under this Agreement during the
Term. 

        (b)   After
Regulatory Authorities have provided the necessary Consents for the manufacture of the Products at a Third Party Supplier's facility as contemplated by
Section 4.6, Prometheus shall use commercially reasonable efforts to maintain, or to cause its Third Party Supplier(s) to maintain all Consents which may from time to time be required by any
Regulatory Authority with respect to manufacture of the Products. 

        7.2    Product Consents.    

        Prometheus
shall, at its expense, actively and diligently seek to obtain, and after obtaining, shall maintain any such Consents which may from time to time be required by any
Governmental Authority with respect to ownership of the Drug Applications or with respect to the manufacturing, marketing, distribution, clinical investigation, import or export of the Products. After
obtaining such Consents, Prometheus shall be responsible for responding to all requests for information related to such Consents made by, and making all legally required filings relating to such
Consents with, any Governmental Authority having jurisdiction to make such requests or require such filings. In the event any Consent held by Prometheus relating directly to any of the Products is
hereafter suspended or revoked, Prometheus shall promptly notify GSK of the event and shall promptly inform GSK of the impact on 

22

 

Prometheus'
purchases of the affected Product and Prometheus' general intentions with respect to the affected Product. 

        7.3    Drug Application Documentation.    

        Prometheus
shall maintain all United States Drug Applications with respect to the Products, including, without limitation, Phase IV post approval commitments (such as Patient
Surveys), semi-annual reports of FDA commitments and Adverse Event reporting and shall take all actions, pay all fees and conduct all communications with the appropriate Governmental
Authority and Regulatory Authorities required by Applicable Laws in respect of each Product. For the avoidance of doubt, Prometheus shall bear all costs incurred in connection with compliance with
this Section 7.3. 

        7.4    Regulatory Changes.    

        The
Parties will promptly notify each other of any material revisions or amendment of or additions to cGMPs and will confer with each other with respect to the best means to comply with
such requirements. 

        7.5    Regulatory Inspections.    

        If
GSK is notified that either the Product or the Facility (for reasons directly related to either Product) will be subject to an inspection by any Governmental Authority, GSK promptly
shall advise Prometheus of such investigation and fully cooperate with and allow any such inspection to the extent required by Applicable Laws. GSK shall promptly notify Prometheus of the results of
such investigation and, subject to the last sentence of Section 7.6, shall provide copies of any letter or notices provided by the Governmental Authority unless the results of such
investigation are not directly related to the Product. 

        7.6    Warning Letters.    

        (a)   In
the event GSK receives or otherwise becomes aware of any notices, letters, warnings and/or other communications from any Governmental Authority or any other Person
alleging or threatening that GSK or the Facility is or may be in violation of any Applicable Law that may affect or relate to the Products and/or result in the inability of GSK to perform its
obligations hereunder, GSK shall immediately notify Prometheus thereof and shall promptly provide Prometheus copies of such notices, letters, warnings and/or other communications. 

        (b)   In
the event that prior to completion of the one-time API manufacture pursuant to Section 4.4(a) GSK receives or otherwise becomes aware of any
notices, letters, warnings and/or other communications from any Governmental Authority or any other Person alleging or threatening that GSK or the facility where the API is manufactured is or may be
in violation of any Applicable Law that may affect or relate to the API and/or result in the inability of GSK to perform its obligations hereunder, GSK shall immediately notify Prometheus thereof and
shall promptly provide Prometheus copies of such notices, letters, warnings and/or other communications. 

        (c)   GSK
may redact from any copies of notices, letters, warnings and/or other communications from any Governmental Authority provided to Prometheus under Sections 7.5
or 7.6 any information related to GSK's other customers, and Prometheus shall treat any copies so provided as Confidential Information of GSK and shall comply with its obligations under the Asset
Purchase Agreement with respect thereto. 

23

 
Article VIII
 Intellectual Property  

        8.1    Ownership.    

        (a)    GSK Rights.    Prometheus acknowledges and agrees that, as between GSK and Prometheus, GSK owns all rights in
and to the GSK Intellectual Property and such GSK Intellectual Property shall be deemed the Confidential Information of GSK (subject to Section 5.2). 

        (b)    Prometheus Rights.    GSK acknowledges and agrees that, as between GSK and Prometheus, Prometheus owns all
rights in and to the Prometheus Intellectual Property and such Prometheus Intellectual Property shall be deemed the Confidential Information of Prometheus (subject to Section 5.2). 

        8.2    New Developments and Modifications.    

        (a)    Product Developments.    All Intellectual Property relating to a Product, excluding Process Developments (as
defined below), conceived, reduced to practice, authored, or otherwise generated or developed in whole or in part in the course of activities under this Agreement, whether patentable or not, and any
authorship of works relating to a Product, including any trademarks, trade dress, trade secrets or copyrights, shall be "Product Developments." Such Product Developments shall not include any
Intellectual Property, including, without limitation, know-how or improvements relating to the manufacture of pharmaceutical products generally, conceived, reduced to practice or otherwise
developed by or on behalf of GSK, in connection with the performance of its obligations hereunder (which such developments are referred to herein as "Process Developments"). 

        (b)    Ownership of Product Developments.    Without further payment to GSK, Prometheus shall own all right, title and
interest in and to all Product Developments and such Product Developments shall be deemed the Confidential Information of Prometheus (subject to Section 5.2). 

        (c)    Ownership of Process Developments.    Without payment to Prometheus, GSK shall own all right title and interest
in and to all Process Developments and such Process Developments shall be deemed the Confidential Information of GSK (subject to Section 5.2). 

        8.3    Grant of Licenses.    

        (a)    By Prometheus.    Under the terms and subject to the conditions of this Agreement, Prometheus hereby grants GSK
and its Affiliates the non-exclusive, royalty-free right under the Prometheus Intellectual Property and the Product Developments (collectively, the "Prometheus Rights") to
utilize the Prometheus Rights, solely to perform GSK's obligations hereunder. 

24

  

        (b)    Prometheus Sublicense to GSK.    Solely to the extent necessary for GSK to perform its obligations under this
Agreement, Prometheus hereby grants GSK a non-exclusive, royalty-free sublicense under all Intellectual Property owned by a Third Party which Prometheus has the right to
sublicense to GSK during the period of GSK's performance under this Agreement, which (i) as of the Closing constituted Purchased Assets under the Asset Purchase Agreement and was subsequently
transferred by Prometheus to such Third Party, (ii) constitutes any trademarks or copyrightable materials provided by Prometheus to GSK in connection with the Product labeling and/or packaging;
or (iii) claim any manufacturing processes required as a result of a change to the Specifications requested by Prometheus, provided that, in each case, GSK only uses such Intellectual Property
provided to GSK by Prometheus to perform GSK's obligations hereunder and solely in accordance with any and all terms, conditions, covenants and restrictions set forth in the underlying Third Party
license granted to Prometheus therefor. To the extent the license rights granted in this Section 8.3(b) are not sufficient, GSK's obligation to perform under this Agreement shall be suspended. 

        8.4    Infringement.    

        Any
Party that becomes aware of any allegation or that receives notification of infringement of any Third Party Intellectual Property based upon the manufacture, use or sale of the
Products promptly shall provide written notice to the other Party. In the event GSK receives notice of any non-frivolous lawsuit alleging, in whole or in part, that the use, sale,
distribution, manufacture or supply of Products by either Party as provided hereunder infringes an intellectual
property right Controlled by a Third Party or if either Party is otherwise ordered or enjoined by a court of competent jurisdiction from performing any of the aforementioned activities in the
Territory, GSK may suspend performance hereunder until such time as the matter has been favorably resolved. 

Article IX
 Access; Audit Rights  

        9.1    Audit and Inspection Rights.    

        During
the Term of this Agreement, Prometheus shall have the right to audit and inspect those portions of the Facility used in the manufacture, packaging, storage, testing, holding,
distribution or other handling, receiving or invoicing of the Products and Materials for the sole purposes of ensuring compliance with the Specifications and the Quality Agreement, and, as related to
the Products and Materials, each of cGMPs, Applicable Laws, and Regulatory Acts. Prometheus shall have the right to audit and inspect all inventories of Products and Materials contained at the
Facility. Such audits or inspections shall be limited to not more than [***] Business Days and shall occur during normal business hours and shall be scheduled by Prometheus at
least [***] Business Days in advance by written notice outlining the purpose and focus of the audit or inspection, whereby such audit or inspection date shall be mutually
agreed by the Parties; provided, however, that in the event of an Adverse Event or any proposed or actual inspection by the FDA or other Governmental Authority, Prometheus shall have the right at any
time upon oral or written notice to GSK of five (5) Business Days to conduct an audit or inspection hereunder. Except in the case of an Adverse Event, Prometheus shall limit such audits to no
more than once every twelve (12) months. Prometheus' audit and inspection rights under this Section 9.1 shall not extend to any portions of the Facility, documents, records or other
information which do not relate to Products or Materials. GSK may redact information relating to Third Parties or their respective products or materials from any documents deliverable to Prometheus in
connection with Prometheus' exercise of its audit and inspection rights hereunder. Inspection by Prometheus or documentation provided to Prometheus related to any of GSK's suppliers or 

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

25

 

subcontractors
related to the manufacture of Product is subject to consent of such GSK supplier or subcontractor. GSK may participate in Prometheus' audit and shall respond to any issues raised by
Prometheus based on such audit, with a corrective action plan mutually acceptable to the Parties. For the avoidance of doubt, nothing in this Section 9.1 shall obligate GSK to make available to
Prometheus documents indicating GSK's underlying costs related to manufacture of the Products. 

        9.2    Documentation.    

        Each
Party shall maintain, in accordance with and for the period required under cGMPs and Applicable Laws, complete and adequate records pertaining to the methods and facilities used for
the cGMPs manufacture, processing, testing, packing, labeling, holding and distribution of the Products. Upon expiration or termination of this Agreement, GSK shall transfer all batch records created
during the Term for all batches of Product and records created during the Term relating to stability studies. GSK shall be entitled to retain copies of any records that it is required to retain in
accordance with and for the period required under cGMPs and Applicable Laws. 

Article X
 Representations and Warranties  

        10.1    Representations and Warranties of GSK.    

        GSK
represents and warrants that: 

        (a)    Status; Enforceability.    GSK is a validly existing corporation in good standing under the laws of
Pennsylvania; the execution, delivery and performance of this Agreement by GSK (where applicable) has been duly authorized by all requisite corporate action; this Agreement constitutes the legal,
valid and binding obligation of GSK, enforceable against GSK in accordance with the terms hereof, subject to the effect of bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally and the effect of general principles of equity, whether applied by a court of law or equity; and the execution, delivery and
performance of this Agreement by GSK will not violate or conflict with any other agreement or instrument to which GSK is a Party. 

        (b)    Certain Persons.    GSK has not used, in any capacity associated with or related to the manufacture of the
Products, the services of any Persons who have been, or are in the process of being, debarred under 21 U.S.C. § 335a(a) or (b) or any comparable Regulatory Act. Furthermore,
neither GSK nor any of its officers, employees, or consultants has been convicted of an offense under (i) either a federal or state law that is cited in 21 U.S.C. § 335(a) as
a ground for debarment, denial
of approval, or suspension, or (ii) any other law cited in any comparable Regulatory Act as a ground for debarment, denial of approval or suspension. 

        (c)    Manufacturing Consents.    As of the date of this Agreement, GSK has and will maintain throughout the Term all
manufacturing Consents necessary for the performance of its obligations hereunder. 

        (d)    Product Marketing and Sales.    GSK will not sell the Products produced under this Agreement in the Territory
except for sales to Prometheus permitted by this Agreement. 

        (e)    Compliance.    The manufacture, packaging, processing, storage, disposal and other handling of the Products and
the API by GSK until Delivery to Prometheus' designated carrier or freight forwarder at the Facility shall be in accordance with and conform to the Specifications, cGMPs, Applicable Laws, Regulatory
Acts and the Quality Agreement. Product shall not be adulterated or misbranded within the meaning of the FD&C Act. 

        (f)    Intellectual Property Infringement.    To GSK's knowledge, none of the GSK Intellectual Property, including
manufacturing processes or procedures utilized by GSK, its Affiliates or the 

26

 

Facility
in the performance of this Agreement infringes upon or misappropriates the Intellectual Property rights of any Third Party. 

        (g)    DISCLAIMER.    THE REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS AGREEMENT DO NOT APPLY TO THE PRODUCTS TO
THE EXTENT THAT THE PRODUCTS FAIL TO CONFORM TO APPLICABLE SPECIFICATIONS DUE TO (i) OCCURRENCES AFFECTING OR ALTERING THE PRODUCT OR API AFTER IT IS DELIVERED TO PROMETHEUS' CARRIER OR FREIGHT
FORWARDER AT THE FACILITY OR THE API FACILITY, OR (ii) ACTIONS TAKEN OR FAILED TO BE TAKEN AFTER THE PRODUCTS WERE DELIVERED BY GSK TO PROMETHEUS' CARRIER OR FREIGHT FORWARDER AT THE FACILITY.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, GSK DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE. 

        10.2    Representations and Warranties of Prometheus.    

        Prometheus
represents and warrants to GSK that: 

        (a)    Status; Enforceability.    Prometheus is a validly existing corporation and is in good standing under the
Applicable Laws of the jurisdiction of its incorporation; the execution, delivery and performance of this Agreement by Prometheus has been duly authorized by all requisite corporate action; this
Agreement constitutes the legal, valid and binding obligation of Prometheus, enforceable against Prometheus in accordance with the terms hereof, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting the rights and remedies of creditors generally and the effect of general principles of equity, whether applied by a court of
law or equity; and the execution, delivery and performance of this Agreement will not violate or conflict with any other agreement or instrument to which it is a Party. 

        (b)    Intellectual Property.    To Prometheus' knowledge, the Prometheus Rights and the other Intellectual Property
licensed or sublicensed to GSK pursuant to Article VIII (collectively, the "Licensed Technology"), are free and clear of any lien, encumbrance, security interest or restriction or license that
interferes with the rights granted to GSK herein, and Prometheus has not previously granted and will not grant to any Third Party during the Term of this Agreement, any right, license or interest in
or to the Licensed Technology, or any portion thereof, inconsistent with the rights granted to GSK herein. 

        (c)    No Other License Required.    To Prometheus' knowledge, except for a license required as a result of change
made by GSK pursuant to Section 3.1(g), the manufacture and supply of Products and API pursuant to this Agreement do not and shall not require a license under any Intellectual Property owned or
controlled by Prometheus or any Third Party other than as provided to GSK hereunder. 

        (d)    Noninfringement.    To Prometheus' knowledge, except for any change made by GSK pursuant to
Section 3.1(g), the manufacture and supply of Products and API pursuant to this Agreement in accordance with any Specification changes made after the Effective Date will not infringe upon nor
misappropriate the Intellectual Property of any Third Party. 

        (e)    Regulatory Consents.    Prometheus or its Third Party Suppliers will obtain and thereafter maintain all
Consents necessary for the performance of its obligations hereunder and for the manufacturing of Products and API and distribution of the Products for commercial sale in the Territory. 

        (f)    Technical Capabilities.    Prometheus will engage as Third Party Suppliers only Third Party Suppliers which to
its knowledge at the time of engagement have the technical ability, production 

27

 

capacity
and financial resources available to manufacture and supply the API and Product to Prometheus or its designee. 

        (g)    Compliance by Prometheus and its Third Party Suppliers.    The storage, disposal, transportation and other
handling of Products by Prometheus shall be in accordance with and conform to the Specifications, cGMPs, Applicable Laws, the Quality Agreement and Regulatory Acts. Upon receipt of Consents by
Prometheus or its Third Party Supplier, the manufacture, packaging, processing, storage, disposal, transportation and other handling of Products by Prometheus or its Third Party Supplier shall be in
accordance with and conform to the Specifications, cGMPs, Applicable Laws, the Quality Agreement and Regulatory Acts. 

Article XI
 Liability and Indemnification  

        11.1    Indemnity by GSK.    

        Subject
to Section 11.4 below, GSK shall indemnify, defend and hold Prometheus and each Prometheus Affiliate and their respective directors, officers, employees and agents (each a
"Prometheus Indemnitee") harmless from and against all Losses arising from any Third Party claim, demand, suit, action or proceeding (a "Third Party Claim") to the extent arising out of (a) any
breach or nonperformance of any of GSK's covenants, obligations, representations or warranties under this Agreement; (b) GSK's failure to obtain, maintain or comply in any material respect with
any of its Consents which are required to perform any of its obligations hereunder or under Applicable Laws; (c) any material violation of Applicable Laws by GSK in the performance of its
obligations hereunder; (d) GSK's failure to pay any Tax for which it is responsible under Section 3.6, or (e) any claim that GSK's manufacturing processes or procedures utilized
by GSK other than those required as a result of a change to the Specifications requested by Prometheus, specifically related to the API or Product, the GSK Intellectual Property and Process
Developments, infringe upon or misappropriate the Intellectual Property rights of any Third Party. The foregoing indemnification obligations shall not apply to the extent any particular Loss is a
direct result of (i) Prometheus' breach of any covenant, obligation, representation or warranty under this Agreement, (ii) negligent acts, omissions or willful misconduct of any
Prometheus Indemnitee, (iii) any matter for which Prometheus is obligated to indemnify GSK pursuant to Section 11.2 below; (iv) GSK's compliance with the Specifications; or
(v) other than in connection with a corresponding breach by GSK of cGMP or Applicable Laws, GSK's compliance with an order of a Governmental Authority directed to GSK specifically regarding its
compliance with cGMPS or Applicable Laws. Nothing in this Section 11.1 or Section 11.2 below shall be construed to limit, and these provisions shall be in addition to, any
indemnification provision in any other agreement between the Parties. 

        11.2    Indemnity by Prometheus.    

        Prometheus
shall indemnify, defend and hold GSK and each GSK Affiliate and their respective directors, officers, employees and agents (each a "GSK Indemnitee") harmless from and against
all Losses from any Third Party Claim to the extent arising out of (a) breach of any of Prometheus' covenants, obligations, representations or warranties under this Agreement;
(b) Prometheus' failure to obtain, maintain or comply in any respect with any of its Consents which are required to perform any of its obligations hereunder, or under Applicable Laws,
(c) any material violation of Applicable Laws by Prometheus in the performance of its obligations hereunder; (d) Prometheus' failure to pay any Tax for which it is responsible under
Section 3.6 or (e) any claim that the manufacturing processes or procedures utilized by GSK that are required as a result of a change requested by Prometheus, including a change to the
Specifications, infringe upon or misappropriate the Intellectual Property rights of any Third Party. The foregoing indemnification obligations shall not apply in each case to the extent any particular
Loss is a direct result of (i) GSK's breach of any covenant, obligation, representation or warranty under this Agreement, (ii) negligent acts, omissions or willful misconduct of 

28

 

any
GSK Indemnitee, or (iii) any matter for which GSK is obligated to indemnify Prometheus pursuant to Section 11.1 above. Nothing in this Section 11.2 or Section 11.1
above shall be construed to limit, and these provisions shall be in addition to, any indemnification provision in any other agreement between the Parties. 

        11.3    Procedures.    

        Any
Person that may be entitled to indemnification under this Agreement (an "Indemnified Party") shall give written notice to the Person obligated to indemnify it (an "Indemnifying
Party") with reasonable promptness upon becoming aware of any Third Party Claim or other facts upon which a claim for indemnification will be based. Such notice shall set forth such information with
respect thereto as is then reasonably available to the Indemnified Party. The Indemnifying Party shall have the right to undertake the defense of any such Third Party Claim with counsel reasonably
satisfactory to the Indemnified Party and the Indemnified Party shall cooperate in such defense and make available all records, materials and witnesses reasonably requested by the Indemnifying Party
in connection therewith at the Indemnifying Party's expense. If the Indemnifying Party shall have assumed the defense of the Third Party Claim with counsel reasonably satisfactory to the Indemnified
Party, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses (other than for reasonable costs of investigation) subsequently incurred by the Indemnified
Party in connection with the defense thereof; provided, that the Indemnifying Party shall pay the reasonable legal fees and expenses of counsel for the Indemnified Party if, following the Indemnifying
Party's assumption of the defense of the Third Party Claim with counsel reasonably satisfactory to the Indemnified Party, cross claims between the Indemnifying Party and Indemnified Party are filed in
any suit, action or proceeding and it is finally determined that the Indemnifying Party was responsible to the Indemnified Party under the cross claim. The Indemnifying Party shall not be liable for
any Third Party Claim settled without its consent, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party shall obtain the written consent of the Indemnified Party prior
to ceasing to defend, settling or otherwise disposing of any Third Party Claim if as a result thereof the Indemnified Party would become subject to injunctive or other equitable relief or if the
Indemnified Party may reasonably object to such disposition of such Third Party Claim based on a material adverse effect on the Indemnified Party. 

        11.4    Limitations of Liability.    

        (a)   EXCEPT
WITH RESPECT TO ANY INDEMNIFICATION OBLIGATIONS HEREUNDER FOR THIRD PARTY CLAIMS UNDER SECTION 11.1 OR IN THE EVENT OF GSK'S WILLFUL MISCONDUCT PURSUANT TO
SECTION 11.4(B), GSK'S TOTAL, AGGREGATE LIABILITY FOR ALL CLAIMS BETWEEN THE PARTIES (I.E., NOT BASED ON A THIRD PARTY LOSS) ARISING UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT, STRICT
LIABILITY OR OTHERWISE, SHALL NOT EXCEED [***] DOLLARS ($[***]). 

        (b)   EXCEPT
ONLY IN THE EVENT OF GSK'S WILLFUL MISCONDUCT, GSK SHALL HAVE NO LIABILITY FOR ANY CLAIM FOR FAILURE TO SUPPLY OR DELAYED SUPPLY OF ANY PRODUCT, AND PROMETHEUS'
EXCLUSIVE REMEDIES FOR FAILURE TO SUPPLY OR DELAYED SUPPLY OF ANY PRODUCT ARE THE DISCOUNT UNDER SECTION 3.7 AND THE RIGHT TO TERMINATE THIS AGREEMENT IN ACCORDANCE WITH THE TERMS OF
SECTION 14.2. 

        (c)   EXCEPT
WITH RESPECT TO ANY INDEMNIFICATION OBLIGATIONS HEREUNDER FOR THIRD PARTY CLAIMS UNDER SECTION 11.2, PROMETHEUS' TOTAL, AGGREGATE LIABILITY FOR ALL CLAIMS
BETWEEN THE PARTIES (I.E., NOT BASED ON A THIRD PARTY LOSS) ARISING UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, SHALL NOT EXCEED [***]
DOLLARS ($[***]). 

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

29

 

        (d)   IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER, FOR ANY CONSEQUENTIAL, INCIDENTAL, LIQUIDATED OR INDIRECT DAMAGES OR LOSSES, INCLUDING ANY LOSS OF PROFITS,
EARNINGS, GOODWILL, SAVINGS OR BUSINESS SUFFERED BY PROMETHEUS OR GSK, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, REGARDLESS OF ANY FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY AVAILABLE UNDER THIS
AGREEMENT. FOR THE AVOIDANCE OF DOUBT, THIS SECTION 11.4(D) DOES NOT LIMIT A PARTY'S RIGHT TO INDEMNIFICATION UNDER SECTION 11.1 OR 11.2 WITH RESPECT TO ANY CONSEQUENTIAL, INCIDENTAL,
LIQUIDATED OR INDIRECT DAMAGES OR LOSSES PAID IN RESPECT OF A THIRD PARTY CLAIM. 

        (e)   NOTWITHSTANDING
ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, THE PARTIES RIGHTS AND OBLIGATIONS WITH RESPECT TO THIRD PARTY CLAIMS BASED UPON INHERENT
CHARACTERISTICS OF THE PRODUCT (E.G., EFFICACY AND SAFETY) AS APPROVED BY APPLICABLE REGULATORY AUTHORITIES SHALL BE ADDRESSED PURSUANT TO THE ASSET PURCHASE AGREEMENT. 

Article XII
 Insurance  

        12.1    GSK Insurance Requirements.    

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

        12.2    Prometheus Insurance Requirements.    

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

Article XIII
 Force Majeure Event  

        13.1    General.    

        Neither
Party shall be liable to the other on account of any failure to perform or on account of any delay in performance of any obligation, other than with respect to the payment of
obligations, under this Agreement, if and to the extent that such failure or delay shall be due to a cause beyond the reasonable control of the relevant Party and which, by the exercise of its
commercially reasonable efforts of diligence and care, such Party could not reasonably have been expected to avoid, including but not limited to acts of God, embargoes, governmental restrictions,
terrorism, materials shortages or failure of any supplier (where such shortage or failure is attributable to an event of force majeure suffered by such supplier), fire, flood, explosion, earthquake,
hurricanes, storms, tornadoes, riots, wars, civil disorder, failure of public utilities or common carriers, labor disturbances, rebellion or sabotage (a "Force Majeure Event"). The Party experiencing
the delay and seeking relief under this Article XIII shall promptly notify the other Party of the delay and the probable duration of the delay and shall use commercially reasonable efforts to
overcome such delay. The Party affected shall be excused from the performance of such obligation to the extent such performance is prevented, hindered or delayed thereby during the continuance of any
such happening or event. This Agreement, in so far as it relates 

30

 

to
such obligation, shall be deemed suspended so long as and to the extent that such cause delays the performance of any Force Majeure Event obligation. 

        13.2    Termination; Transition.    

        If
as a result of a Force Majeure Event, GSK is unable to fully perform its obligations for a period of three (3) months, Prometheus shall have the right to terminate this
Agreement upon thirty (30) days
prior notice to GSK thereafter. In the event Prometheus terminates this Agreement as provided in this Section 13.2 and provided Prometheus reimburses GSK for all amounts due and payable
pursuant to this Agreement, including those amounts due under Section 2.6, GSK agrees to use commercially reasonable efforts in a manner consistent with Section 4.6(a) and mutually
agreed by the Parties to assist Prometheus with transfer of the manufacture of the API and the Products to any other facility or facilities selected by Prometheus, in its sole discretion. 

Article XIV
 Term; Termination; Remedies  

        14.1    Term.    

        Unless
otherwise terminated in accordance with Section 13.2 or this Article XIV, this Agreement shall commence on the Effective Date and will expire on the second
anniversary of the Effective Date (the "Initial Term"), unless Prometheus delivers six (6) month advance, written notice prior to the expiration of the Initial Term or the
then-current Renewal Term that Prometheus is electing to extend this Agreement for an additional one (1) year (each such successive one-year extension, a "Renewal
Term"). The Initial Term and all Renewal Terms, if any, collectively are referred to in this Agreement as the "Term." Notwithstanding any provision of this Agreement to the contrary, unless earlier
terminated by the Parties in accordance with Section 14.2, upon receipt of Consents and in accordance with Section 2.3 this Agreement shall expire at either the (a) the end of the
then-current Term (inclusive of any Renewal Term properly elected by Prometheus) or (b) six (6) months after receipt of the Consents. 

        14.2    Termination.    

        (a)   Prometheus
may terminate this Agreement by delivery of a six (6) month advance, written notice given at any time. 

        (b)   This
Agreement shall immediately terminate upon GSK's written notice to Prometheus described in Section 4.4(a). 

        (c)   Either
Party may terminate this Agreement effective upon ninety (90) days prior written notice to the other Party, if the other Party commits a material breach of
this Agreement and fails to cure such breach by the end of such ninety (90) day period; provided, however, if Prometheus fails to pay amounts due under this Agreement (excluding amounts that
are the subject of a bona fide dispute over
quantities Delivered or a Nonconformity under investigation) within thirty (30) days after such payments are due (as set forth in Section 3.3), GSK shall be relieved of any further
obligation to perform under this Agreement until all such amounts due are brought current, and shall have the right to suspend the supply of any future batches of Product unless Prometheus shall also
have provided reasonable security for future payment as required by GSK; provided further, if Prometheus fails to cure its breach of payment within such ninety (90) day period, GSK may
immediately terminate this Agreement. 

        (d)   In
the event Prometheus fails to submit FDA filings to register its Third Party Supplier to manufacture Product within twenty-four (24) months after
the Effective Date, GSK may terminate this Agreement at the end of the Initial Term (irrespective of any Renewal Term elected pursuant to Section 14.1); however, if Prometheus has submitted FDA
filings to register its Third Party Supplier to manufacture Product within twenty-four (24) months after the Effective Date, then 

31

 

GSK
shall continue to supply the Product during the first Renewal Term (if such Renewal Term has been elected by Prometheus pursuant to Section 14.1). GSK may in its discretion, elect to
terminate this Agreement at the end of the first Renewal Term, if any, and shall upon such termination have no further obligations hereunder (subject to Section 15.12). For the avoidance of
doubt, any decision to supply Product beyond the first Renewal Term shall be in GSK's sole discretion (after discussion by the Parties if Prometheus requests per Section 14.1 supply of Product
beyond the first Renewal Term) and pursuant to terms identified in Section 3.1(c). 

        (e)   Except
to the extent limited by Applicable Law, either Party may terminate this Agreement effective upon written notice to the other Party, if the other Party becomes
insolvent or admits in writing its inability to pay its debts as they become due, makes an assignment for the benefit of its creditors or has a receiver, trustee or other court officer appointed for
its properties or assets. 

        (f)    Except
to the extent limited by Applicable Law, the Term of this Agreement shall automatically expire and this Agreement shall terminate, without the necessity of any
notice or action by either party, upon the expiration of fifteen (15) days after any resolution by Prometheus' Board of Directors authorizing either (i) the filing of a petition for
relief under Title 11 of the United States Code, or (ii) consent to entry of an order for relief under 11 U.S.C. § 303, provided, however, that in GSK's sole discretion, and
subject to a demonstration of adequate protection for GSK, GSK may elect to waive the effect of this Section 14.2(e). 

        (g)   Upon
expiration or termination of this Agreement, each Party shall return the other Party's Confidential Information and all rights and obligations shall cease to exist
except for: (a) the payment of unpaid invoices due for finished Products Delivered or to be Delivered in accordance with this Agreement; (b) the rights and obligations of the Parties
which are set forth to survive pursuant to Section 15.12; and (c) within thirty (30) days following the completion of GSK's manufacturing and supply obligations under this
Agreement, GSK shall return to Prometheus, at Prometheus' expense, all tooling provided to GSK pursuant to Section 4.1 and that is then being used or held for use in connection with Product
manufacturing. In addition, upon termination of this Agreement under Section 14.2(b) or
14.2(d) or by Prometheus pursuant to Section 14.2(a) or 14.2(c), if requested by Prometheus and provided that Prometheus is not delinquent in paying any amounts properly invoiced to Prometheus,
GSK shall: (i) complete the manufacture of and supply to Prometheus and/or its designates all Products which Prometheus ordered from GSK pursuant to accepted Purchase Orders prior to
termination, provided that Prometheus also has complied with Sections 2.2, 2.3 and sufficient API is available for such manufacture as described in Section 4.4(a); and (ii) ship
any Materials in GSK's possession or control that Prometheus is required to purchase at GSK's cost pursuant to Section 2.6. In addition, upon termination of this Agreement under
Section 14.2(b) or by Prometheus pursuant to Section 14.2(c), GSK shall use commercially reasonable efforts in a manner consistent with Section 4.6(a) and mutually agreed by the
Parties to assist Prometheus with transfer of the manufacture of the API and the Products to any other facility or facilities selected by Prometheus, in its sole discretion. 

        14.3    Injunctive Relief.    

        In
the event that either Prometheus or GSK breaches or threatens to breach any provision of Article VIII of this Agreement, the Parties agree that irreparable harm to the other
Party is presumed and the damage to such Party likely would be very difficult to ascertain and would be inadequate. Accordingly, in the event of such circumstances, each of Prometheus and GSK agree
that, in addition to any other right and remedies available at law or in equity, the non-breaching Party shall have the right to seek injunctive relief from any court of competent
jurisdiction, and the breaching Party waives the requirement that a bond be posted. 

32

   Article XV
 Miscellaneous  

        15.1    Standard Forms.    

        In
all communications, GSK and Prometheus may employ their standard forms, but nothing in those forms, including Purchase Orders, shall be construed to modify or amend the terms and
conditions of this Agreement, and, in the case of any conflict herewith, the terms and conditions of this Agreement shall control. 

        15.2    Notices.    

        In
addition to the other specific procedures for notification required herein, all notices, demands, requests and other communications made hereunder shall be in writing and shall be
given either by personal delivery, by nationally recognized overnight courier (with charges prepaid), or by facsimile transmission (with telephone confirmation), and shall be deemed to have been given
or made: (i) if personally delivered, on the day of such delivery; (ii) if sent by overnight courier, on the day following the date deposited with such overnight courier service; or
(iii) if by facsimile transmission, on the date transmitted to receiving facsimile machine and confirmed by telephone, in each case pending the designation of another address, addressed as
follows: 

If to GSK:

GlaxoSmithKline

P.O. Box 13398

Five Moore Drive

Research Triangle Park, NC 27709-3398

Attention:    Attention: Director of Contract Manufacturing NA Rx

Facsimile:    (704) 625-9163 

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

GlaxoSmithKline

One Franklin Plaza

200 North 16th Street

Philadelphia, PA 19102

Attention:    Vice President, Associate General Counsel

Facsimile:    (215) 751-3489 

If to Prometheus:

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn:    President

Facsimile:    (858) 410-1945 

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

Prometheus
Laboratories Inc.

9410 Carroll Park Drive

San Diego, CA 92121

Attn:    Legal Department

Facsimile:    (858) 332-3393 

33

 

        15.3    Independent Contractors.    

        In
the exercise of its obligations and in respect of its rights and entitlements hereunder or in respect hereof, Prometheus and GSK are and shall in all respects be treated as
independent contractors with respect to each other. Neither Party shall be deemed to be a co-venturer or partner of the other. Neither Party is an employee or a legal representative of the
other Party for any purpose. Neither Party shall have the authority to enter into any contracts in the name of or on behalf of the other Party. 

        15.4    Entire Understanding.    

        This
Agreement, including the Asset Purchase Agreement (and the Other Agreements as that term is defined therein), the Quality Agreement, the Trading Services Agreement, the Schedules
attached hereto and any other document identified herein, represent the entire understanding and agreement between the Parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and understandings between the Parties with respect to such subject matter, which are hereby expressly terminated. Without limiting the foregoing, the Parties
acknowledge and agree that their respective rights and obligations with respect to confidential information and publicity are set forth in Section 8.1 of the Asset Purchase Agreement. 

        15.5    Unintentional Omissions.    

        The
Parties acknowledge that they have expended substantial effort in preparing this Agreement and attempting to describe, in the Schedules hereto, as thoroughly and precisely as
possible, Specifications, Products, and other information. However, despite these efforts, the Parties acknowledge the possibility of involuntary or inadvertent omissions from the Schedules. The
Parties will agree in writing to the changes to be made to the Schedules to add these inadvertent or involuntary omissions and any such written agreement executed by the Parties shall serve as an
amendment to this Agreement. 

        15.6    Transferability; Binding Effect.    

        Neither
this Agreement, nor any of the rights or obligations of a Party may be directly or indirectly assigned, sold, delegated or otherwise disposed of without the prior written consent
of the other Party, which consent may not be unreasonably withheld; provided, however, that either Party may assign this Agreement to an Affiliate, including any successor in interest by way of any
reincorporation or other reorganization, and either Party may assign this Agreement to a successor by merger, acquisition, or sale of all or substantially all of such Party's business assets in the
field to which this Agreement relates without the consent of the other Party, provided that in each case, absent a novation agreement between the assigning Party and the other Party, such assigning
Party shall continue to be liable for any breaches of this Agreement by the assignee. 

        15.7    Dispute Resolution.    

        If
the Parties fail to resolve any claim, dispute, or controversy of whatever nature arising out of or relating to this Agreement (other than one relating to a breach of a Party's
obligations with respect to confidential information under Section 8.1 of the Asset Purchase Agreement or with respect to the validity, enforceability, infringement or misappropriation of
Intellectual Property rights, which shall not be subject to this Section 15.7), or concerning the interpretation, effect, termination, validity, performance and/or breach of this Agreement (a
"Claim"), either Party may refer the dispute, by notice to the other Party, to their respective officers designated below or such other officers as the 

34

 

Parties
may designate in writing from time to time, for attempted resolution by good faith negotiations within thirty (30) days after that notice is received. The designated officers are as
follows: 

	For GSK:	 	Vice President, Associate General Counsel
	

For Prometheus:	
 	

Vice President, Legal Affairs

        If
such dispute is not solved by the end of the thirty (30) day period, the Parties shall be free to pursue any legal or equitable remedy available to them. Each Party will bear
its own attorneys' fees and other costs and expenses. 

        15.8    Subcontractors.    

        GSK
may utilize subcontractors with appropriate expertise and experience in the performance of its obligations under this Agreement. 

        15.9    Amendment.    

        Any
amendment, modification or supplement of or to any provision of this Agreement, including the Schedules hereto, shall be effective only in writing and signed by a duly authorized
officer of suitable title of all Parties hereto. The Parties hereto waive the right to amend the provisions of this Section 15.9 orally. 

        15.10    Severability.    

        If
and to the extent that any court of competent jurisdiction holds any provision (or any part thereof) of this Agreement to be invalid or unenforceable, such holding shall in no way
affect the validity or enforceability of the remainder of this Agreement, and the invalid or unenforceable provision shall be fully severed from this Agreement and there shall automatically be added
in lieu thereof a provision as similar in terms and intent to such severed provision as may be legal, valid and enforceable. 

        15.11    Waiver.    

        Any
failure of Prometheus or GSK to comply with any obligation, covenant, agreement or condition herein contained may be expressly waived, in writing only, by the other Party hereto and
such waiver shall be effective only in the specific instance and for the specific purpose for which made or given. 

        15.12    Survival.    

        Article I,
Article V, Article VI, Article VIII, Article XI, Article XII, Article XV, and Sections 3.3, 3.5, 3.6, 9.2, 13.2, and
14.3, and any other provision which by its terms specifically shall so state, together with any obligation to make accrued but unpaid payments due hereunder, shall survive the termination or
expiration of this Agreement. 

        15.13    Drafting Ambiguities.    

        Each
Party to this Agreement and its counsel have reviewed and revised this Agreement. The rule of construction to the effect that any ambiguities are to be resolved against the drafting
Party shall not be employed in the interpretation of this Agreement or any amendment or Schedule to this Agreement. 

        15.14    Headings; Schedules; Counterparts.    

        (a)    Headings.    The headings of the Sections of this Agreement are for reference purposes only, are not part of
this Agreement and shall not in any way affect the meaning or interpretation of this Agreement. 

35

 

        (b)    Schedules.    All Schedules delivered pursuant to this Agreement shall be deemed part of this Agreement and
incorporated herein by reference, as if fully set forth herein. All provisions contained in any Schedule delivered by or on behalf of the Parties hereto, or in connection with the transactions
contemplated hereby, are an integral part of this Agreement. 

        (c)    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same instrument. 

        15.15    Governing Law.    

        This
Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York without regard to principles of conflicts of law, and the Parties hereby
irrevocably consents to the jurisdiction of the state and federal courts of New York. The United Nations Convention on Contracts for the International Sale of Goods is expressly disclaimed. 

[signature page follows]

36

[Signature Page to Supply Agreement]

        IN
WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be duly executed as of the date first written above. 

	 	 	SMITHKLINE BEECHAM CORPORATION

(d/b/a GlaxoSmithKline)
	

 	
 	

By:	

/s/  DONALD F. PARMAN      

	 	 	Name:	Donald F. Parman

	 	 	Title:	Vice President & Secretary

	

 	
 	

PROMETHEUS LABORATORIES INC.
	

 	
 	

By:	

/s/  JOSEPH M. LIMBER      

	 	 	Name:	Joseph M. Limber

	 	 	Title:	President & CEO

   Schedule 2.2(a)  

Form of Forecast 

[***] 

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

2

 
Schedule 2.6(a)  

API Price 

	Product
	 	Price Per Unit
	 	Standard Batch Size

	Lotronex (alosetron HCl) 0.5 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles
	Lotronex (alosetron HCl) 1 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles

	*
	Price
is inclusive of all Materials. 

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

3

 
Schedule 2.6(b)  

Materials Specific to the Products 

[***]

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

4

 
Schedule 3.1

Product,
Product Prices and Standard Batch Sizes 

	Product
	 	Price Per Unit
	 	Standard Batch Size

	Lotronex (alosetron HCl) 0.5 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles
	Lotronex (alosetron HCl) 1 mg (30 tablet bottle)	 	$[***]*	 	[***] bottles

	*
	Price
is inclusive of all Materials. 

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

5

 
Schedule 3.2(c)  

Form of Trading Services Agreement 

[***]

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

6

 
Schedule 4.1

Specifications
Index 

	Specification Title
 
	 	Specification Reference #

	Finished Product Specifications	 	 
	[***]	 	[***]
	[***]	 	[***]
	Excipient Specifications	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	Packaging Component Specifications—0.5 mg 30s	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	Packaging Component Specifications—1 mg 30s	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	API Specifications (including finished API, Intermediates & Raw Materials)	 	 
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]
	[***]	 	[***]

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

7

  

Schedule 4.4(a) 

API
Intermediate Material 

	API Intermediate Material
 
	 	Cost per Kg

	[***]	 	$[***]

	 

	Material Location
 
	 	Material
	 	Description
	 	Batch No
	 	Quantity (Kg)
	 	Supply Source

	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	 	 	 	 	[***]	 	[***]	 	[***]	 	 

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

8

 
Schedule 4.5

[***] 

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

9

 
Schedule 4.6(a)  

[***]

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

10

 
Schedule 4.6(c)  

API
Raw Material and Intermediates 

	API Raw Material and/or API Intermediate Material
 
	 	Cost per Kg

	[***]	 	$[***]
	[***]	 	$[***]

	 

	Material Location
 
	 	Material
	 	Description
	 	Batch No
	 	Quantity (Kg)
	 	Supply Source

	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	 	 	 	 	[***]	 	[***]	 	[***]	 	 
	

[***]	
 	

[***]	
 	

[***]	
 	

[***]	
 	

[***]	
 	

[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	 	 	 	 	[***]	 	[***]	 	[***]	 	 

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

11

QuickLinks

Exhibit 10.20QuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

Exhibit 10.21    
    

EXCLUSIVE
LICENSE AGREEMENT 

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

R
E C I T A L S 

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

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

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

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

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

        F.     CSMC,
UCLA and Prometheus desire to fulfill the "Considerations for Recipients of National Institute of Health ("NIH") Research Grants and Contracts" set forth in
pages 32997-33001 of volume 59, No. 122 of the Federal Register, dated June 27, 1994 and the provisions of 35 U.S.C. Sections 200 to 212. 

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

1

 

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

        1.    DEFINITIONS    

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2

 

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

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

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

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

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

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

        1.9   "Joint Technical Information" shall mean, as of the Effective Date, the following information in the Field of Use which
is described in the Joint Patent Rights: Know-how, trade 

3

 

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

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

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

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

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

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

        1.15 "Prometheus Improvements" shall mean any and all processes, uses, designs, applications, methods and
compositions-of-matter, indications, improvements, enhancements and modifications in the Field of Use directly based upon or directly created using the Patent Rights and which
were discovered or developed by or on behalf of Prometheus (exclusive of work performed by CSMC or UCLA) during the term of this Agreement. 

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

        1.17 "Product" or "Products" shall mean any human therapeutics, diagnostics
(including algorithms or any components thereof), bioinformatics and any other human health care products and/or services for the treatment, management, prevention, diagnosis or risk assessment of
diseases 

4

 

in
the Field of Use utilizing or derived in any manner whatsoever from any of the Patent Rights, Future Patent Rights, Future Technical Information or Prometheus Improvements. 

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

        1.19 "Territory" shall mean the World. 

        2.    LICENSE    

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

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

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

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

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

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

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

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

5

 

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

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

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

        2.3    Certain Future Rights.    The following section shall pertain to Inventions which constitute Future Patent
Rights or Future Technical Information. Subject to the rights and the applicable rules of the Funding Agencies, Prometheus shall have, for a period of [***] days after either
(i) receipt by Prometheus of written notice from CSMC or UCLA disclosing in adequate detail any such Inventions in the Field of Use, or (ii) written notification by Targan or Braun to
each of Prometheus, CSMC and UCLA disclosing in adequate detail any such Inventions in the Field of Use, the exclusive first right to negotiate with CSMC and UCLA to obtain one or more licenses to the
Future Patent Rights in the Field of Use and/or Future Technical Information in the Field of Use, upon such terms and conditions as shall be discussed by the parties hereto, which terms and conditions
shall include provisions for fair market value consideration for the grant of any such licenses. Subject to the rights and applicable rules of the Funding Agencies or the United States Government, and
to the extent it would not impair or jeopardize any efforts of CSMC and UCLA 

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

6

 

to
obtain domestic or foreign patent rights, CSMC and UCLA shall promptly inform Prometheus of Future Patent Rights in the Field of Use and/or Future Technical Information in the Field of Use as may
be developed by CSMC or UCLA. If Prometheus declines or fails to pursue or if the parties fail to conclude negotiations for a license to such Future Patent Rights in the Field of Use and/or Future
Technical Information in the Field of Use during the [***] day period specified above, then CSMC and UCLA shall have the right to commence discussions with any other party
concerning such Future Patent Rights and/or Future Technical Information. Subject to the provisions of this Section 2.3, Prometheus acknowledges and agrees that CSMC and UCLA expressly retain
and reserve any and all right, title and interest to Future Patent Rights and Future Technical Information, whether or not in the Field of Use, and, accordingly, no license to any Future Patent Rights
or Future Technical Information is granted to Prometheus under this Agreement. CSMC and UCLA shall each use their reasonable and continuing efforts during the term of this Agreement, in accordance
with their policies and procedures, where appropriate, to file and maintain patent applications claiming Inventions in the Field of Use. 

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

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

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

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

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

        2.5    Milestones.    Prometheus acknowledges that it is important to CSMC and UCLA, and a requirement of the federal
government under 35 U.S.C. Section 203, that Prometheus pursue the development, commercialization and marketing of Products, work the Patent Rights and otherwise exercise commercially
reasonable efforts to maximize the value of this Agreement to CSMC and UCLA. Prometheus shall be deemed to have exercised commercially reasonable efforts to 

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

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

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

        (b)   Conditions of Access to the Technical Information.    As a condition to any use of the Technical Information
by, and grant of access to the Technical Information to, any person within the Field of Use during the term of this Agreement, such person shall be required to (i) obtain the written consent of
the Gatekeeper to obtain the use of or access to the Technical Information within the Field of Use, and (ii) after obtaining the Gatekeeper's written consent, execute a material transfer
agreement (to be obtained from the Gatekeeper) in the form customarily employed for such purpose by CSMC or UCLA. Such material transfer agreement shall identify Prometheus' rights in such Technical
Information and specify the obligations of the transferee, which obligations shall not be less than those of UCLA or CSMC, as applicable, under this Agreement. The Gatekeeper shall then promptly
provide the executed originals of all such material transfer agreements to CSMC and UCLA, with an executed copy to Prometheus for its records. 

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

        2.7    Conditions to Effectiveness.    As a condition to the effectiveness of this Agreement, all of the following
documents and instruments shall have been fully executed and delivered by each of the parties hereto and thereto: (i) this Agreement, (ii) that certain Subscription Agreement by and 

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

        3.    REPRESENTATIONS AND WARRANTIES    

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

        3.2    Exclusive Rights of UCLA.    UCLA represents and warrants to Prometheus that it has the lawful right to grant
the licenses in this Agreement. UCLA's further representations and warranties under this Section 3.2 and Section 3.3 are limited to the actual knowledge of the Director of Business
Research Partnerships, the UCLA signatories to this Agreement and Braun. UCLA represents and warrants to Prometheus that, to the best of its current knowledge, prior to the Effective Date, UCLA has
obtained all rights to the UCLA Patent Rights currently existing in the Field of Use from the individual inventors thereof, in accordance with the policies of UCLA for each such UCLA Patent Rights
(such that the inventor shall retain no rights to the UCLA Patent Rights within the scope of the license granted pursuant to Section 2.1 hereof). Except for the rights, if any, of the Funding
Agencies or the United States Government, UCLA, represents and warrants that, to the best of its current knowledge (without investigation outside of UCLA as to the representations and warranties of
UCLA) (i) UCLA is the owner of the entire right, title and interest in and to the UCLA Patent Rights free and clear of all liens, charges and encumbrances, (ii) UCLA has the sole right
to grant licenses to the UCLA Patent Rights hereunder, (iii) UCLA has not granted licenses to the UCLA Patent Rights to any other party that would restrict rights granted hereunder except as
stated herein, (iv) the UCLA Patent Rights do not infringe any rights owned or possessed by any third party, and (v) there are no claims, judgments or settlements to be paid by UCLA with
respect to the UCLA Patent Rights or pending claims or litigation relating to the UCLA Patent Rights. Except for any potential or actual rights of Funding Agencies or the United States Government,
UCLA is not aware that any additional rights or licenses are necessary for Prometheus to exercise its license rights granted by UCLA under this Agreement. 

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9

 

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

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

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

        4.    CONSIDERATION    

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

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

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10

 

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

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

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

        5.    PATENT RIGHTS    

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

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

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

        5.4   [***].
Prometheus shall pay all expenses relating to its responsibility in Section 5.4 hereof and is to reimburse CSMC for all of its
expenses, including attorneys fees, incurred by CSMC in connection with Prometheus fulfillment of its responsibility under Section 5.4. 

        6.    TERM AND TERMINATION    

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

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

        (a)   automatically
if Prometheus shall enter into a liquidating bankruptcy, be adjudged insolvent, liquidate, dissolve and/or if the business of Prometheus shall be placed in
the hands of a receiver, assignee, or trustee, whether by voluntary act of Prometheus or otherwise; provided, however, that if it is involuntary, termination shall not take place unless the act is not
reversed within thirty (30) days. Further, Prometheus shall give CSMC and UCLA at least forty-five (45) days' prior written notice before Prometheus initiates any bankruptcy
proceeding, and CSMC and UCLA shall have the right to terminate this Agreement immediately upon receipt of such notice; 

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12

 

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

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

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

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

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

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

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

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

13

 

        7.    INFRINGEMENT BY THIRD PARTIES    

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

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

        8.    INDEMNIFICATION    

        8.1    Indemnification by Prometheus.    Subject to Section 8.2 hereof, Prometheus shall hold harmless and
indemnify CSMC and UCLA and their respective officers, directors, employees (including the inventors) and agents, sponsors of the research (except Prometheus) and the Regents of the University of
California, from and against any and all claims, damages and expenses (including reasonable attorneys' fees and expenses and costs of investigation) arising out of any litigation, arbitration or
dispute of any kind involving Prometheus or its Affiliates or permitted sublicensees or resulting from the grant of this license or the exercise of any rights hereunder, or any sublicense, or any use
of the Patent Rights by Prometheus or its Affiliates or any permitted sublicensee, including, but not limited to, (i) the preclinical development and clinical testing of 

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14

 

Products,
and (ii) the manufacture, sale, use, marketing, or other disposition of Products developed, manufactured, sold, marketed, used or otherwise disposed of under the Agreement. As a part
of its obligations hereunder, Prometheus shall reimburse CSMC and UCLA for their respective out-of-pocket expenses (including reasonable attorneys' fees and costs of
investigation) which are incurred as a result of any investigation, defense or settlement relating to the foregoing, which reimbursement shall be made to CSMC and UCLA upon receipt by Prometheus of
invoices reflecting in reasonable detail such expenses incurred by CSMC and UCLA. Prometheus shall obtain and maintain insurance policies (including products liability and general liability policies
at such time as is appropriate) which are reasonable and necessary to cover its activities and to comply with the indemnification obligations set forth above. Such insurance policies shall name CSMC
and UCLA as additional insured parties, and shall provide a minimum of $[***] in coverage per occurrence and provide for a [***] day notice to CSMC and
UCLA of any material change in such policies. Upon initiation of any human clinical studies using a therapeutic molecule covered by the Patent Rights, Prometheus shall have first increased its
insurance coverage to a minimum of $[***] in the aggregate. Prometheus shall provide CSMC and UCLA with Certificates of Insurance within [***] days of
the Effective Date (subject to extension if reasonably required) and annually thereafter, evidencing the policies required in accordance with this Section 8.1. 

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

        9.    USE OF NAMES    

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

        10.    CONFIDENTIAL INFORMATION    

        10.1 The
parties hereto shall keep the terms of this Agreement and all business and scientific discussions relating to the business of the parties strictly confidential. All
patient information that a party is given access to by another party shall be subject to the provisions of the Confidentiality of Medical Information Act (Cal. Civ. Code § 56, et
seq.). It may, from time to time, be necessary for the parties, in connection with performance under this Agreement, to disclose Confidential Information (including know-how) to each
other. The party receiving such Confidential Information ("Receiving Party") shall keep in strictest confidence the Confidential Information 

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15

 

("Disclosing
Party"), using the standard of care it normally uses for information of like character, and shall not disclose the Confidential Information to any third party or use it except as
expressly authorized by the prior written consent of the Disclosing Party or as otherwise permitted by this Agreement; provided, however, that Prometheus may disclose the Confidential Information of
CSMC or UCLA to its Affiliates and sublicensees as shall be reasonably necessary to carry out the intent of this Agreement or any sublicense granted by Prometheus as contemplated by this Agreement if
such Affiliates and/or sublicensees each execute a confidentiality agreement containing confidentiality provisions no less restrictive than those confidentiality provisions contained in this
Section 10. The Receiving Party's obligation hereunder shall not apply to Confidential Information that the Receiving Party can show: 

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

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

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

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

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

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

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

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

16

 

        11.    INFORMATION EXCHANGE    

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

        12.    PATENT MARKING    

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

        13.    MISCELLANEOUS    

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

in
the case of CSMC to: 

Cedars-Sinai
Medical Center

8700 Beverly Boulevard

Los Angeles, California 90048-1865

Telecopier: 310.967.0101

Attn: Senior Vice President for Finance & Business Affairs 

or
in the case of UCLA to:

UCLA
Business Research Partnerships

405 Hilgard Avenue

Los Angeles, California 90095-1525

Telecopier: 310.206.3619

Attn: Director 

or
in the case of

Prometheus to:

Prometheus
Laboratories, Inc.

8110 La Jolla Shore Dr., #101

La Jolla, California 92037

Telecopier: 619.551.8081

Attn: Scott L. Glenn 

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

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

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

17

 

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

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

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

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

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

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

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

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

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

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

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

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

18

 

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

	 	 	CEDARS-SINAI MEDICAL CENTER,

a California non-profit public benefit corporation
	

 	
 	

By:	

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

Senior Vice President for

Academic Affairs
	

 	
 	

By:	

/s/ Joseph Luevanos
 Joseph Luevanos

Senior Vice President for Finance &

Business Affairs
	

 	
 	
REGENTS OF THE UNIVERSITY OF CALIFORNIA

acting by and through its campus at Los Angeles
	

 	
 	

By:	

/s/ Christopher T. Moulding
 Christopher T. Moulding

Licensing Associate
	

 	
 	

By:	

/s/ Emily E. Waldron
 Emily E. Waldron

Licensing Associate
	

 	
 	
PROMETHEUS LABORATORIES, INC.,

a California corporation
	

 	
 	

By:	

/s/ Scott L. Glenn
 Scott L. Glenn

Chairman/CEO

19

   Schedule A 

CSMC PATENT RIGHTS  

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

Stephan R. Targan, M.D.

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

Europe 94,103,727.1
	
FILING DATE:	
 	

March 10, 1994, European Patent Office
	
PRIORITY DATA:	
 	

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

FP07 32117

A-1

 

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

Stephan R. Targan, M.D.

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

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

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

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

P07 32759

A-2

 

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

Stephan R. Targan, M.D.

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

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

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

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

P07 33571

A-3

 

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

Stephan R. Targan, M.D.

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

PCT/US95/08758
	
FILING DATE:	
 	

June 5, 1996, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

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

FP07 34632

A-4

 

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

Phillip Fleschner

Scott E. Plevy

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

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

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

None Claimed
	
C&F DOCKET NO.:	
 	

P-PM 2060

A-5

 

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

Scott E. Plevy

Hui-Ying Yang

Stephan R. Targan

Jerome I. Rotter
	
APPLICATION NO.:	
 	

Not assigned yet
	
FILING DATE:	
 	

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

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

P-CE 2225

A-6

 

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

Stephan R. Targan

Eric A. Vasiliauskas

Scott E. Plevy

Huiying Yang

Jerome I. Rotter
	
APPLICATION NO.:	
 	

Not assigned yet
	
FILING DATE:	
 	

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

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

P-CE 2224

A-7

   Schedule B 

CSMC Technical Information  

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

        [***]

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

B-1

   Schedule C 

UCLA PATENT RIGHTS  

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

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

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

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

None claimed
	
PSBC DOCKET NO.:	
 	

P07 32705

C-1

 

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

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

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

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

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

P07 32560

C-2

 

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

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

PCT/US95/11789
	
FILING DATE:	
 	

September 18, 1995, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

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

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

FP07 34025

C-3

 

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

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

Mark Eggena
	
APPLICATION NO.:	
 	

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

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

None Claimed
	
C&F DOCKET NO.:	
 	

P-PM 1998

C-4

   Schedule D 

UCLA TECHNICAL INFORMATION

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

        [***] 

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

D-1

   Schedule E 

JOINT PATENT RIGHTS  

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

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

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

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

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

None claimed
	
PSBC DOCKET NO.:	
 	

P07 32596

E-1

 

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

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

Stephan Targan, M.D.
	
APPLICATION NO.:	
 	

PCT/US95/13422
	
FILING DATE:	
 	

October 5, 1995, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

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

FP07 34037

E-2

 

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

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

Mark P. Eggena

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

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

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

None claimed
	
PSBC DOCKET NO.:	
 	

P07 32595

E-3

 

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

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

Mark P. Eggena

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

PCT/US95/08756
	
FILING DATE:	
 	

June 5, 1996, Patent Cooperation Treaty
	
PRIORITY DATA:	
 	

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

FP07 34631

E-4

   Schedule F 

Joint Technical Information

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

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

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

F-1

   Schedule G 

Field of Use  

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

G-1

   Schedule H 

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

[***] 

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

H-1

   Schedule I 

Milestones

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

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

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

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

I-1

  

Schedule J 

ROYALTY PROVISIONS  

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

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

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

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

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

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

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

        4.    Payment and Accounting.    

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

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

J-1

 

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

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

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

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

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

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

J-2

 

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

        6.    Certain Definitions.    

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

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

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

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

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

J-3

   Schedule K 

        [***]

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

K-1

   Schedule L 

        [***]

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

L-1

QuickLinks

Exhibit 10.21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]