Exhibit 10.1

 

 

 

ROYALTY PARTICIPATION AGREEMENT

 

between

 

THERAVANCE, INC.

 

and

 

ELAN CORPORATION PLC

 

Dated as of May 12, 2013

 

 

 

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TABLE OF CONTENTS

 

Article I

 

DEFINITIONS AND INTERPRETATION

 

Article II

 

SALE OF BENEFICIAL INTEREST

 

Section 2.1

 

Sale of Beneficial Interest

 

1

Section 2.2

 

Exclusion of GGL Agreement Rights

 

2

Section 2.3

 

No Obligations Transferred

 

3

Section 2.4

 

Purchase Price

 

3

 

Article III

 

CLOSING

 

Section 3.1

 

Closing

 

3

Section 3.2

 

Payment of Purchase Price; Delivery of Bill of Sale

 

4

Section 3.3

 

Closing Conditions of Each Party

 

4

 

Article IV

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Section 4.1

 

Organization

 

5

Section 4.2

 

Power, Authorization and Enforceability

 

5

Section 4.3

 

No Conflicts or Violations

 

6

Section 4.4

 

Proceedings

 

7

Section 4.5

 

GGL Agreements

 

7

Section 4.6

 

Contractual Rights to Royalty Interest

 

7

Section 4.7

 

Intellectual Property

 

7

Section 4.8

 

UCC Matters

 

8

Section 4.9

 

No Implied Representations and Warranties

 

8

 

Article V

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Section 5.1

 

Organization

 

9

Section 5.2

 

Power, Authorization and Enforceability

 

9

Section 5.3

 

No Conflicts or Violations

 

10

Section 5.4

 

Proceedings

 

10

 

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Section 5.5

 

Financing

 

10

Section 5.6

 

No Implied Representations and Warranties

 

10

 

Article VI

 

COVENANTS

 

Section 6.1

 

Payment of Beneficial Interest

 

10

Section 6.2

 

Tax Matters

 

12

Section 6.3

 

GGL Agreements

 

14

Section 6.4

 

Confidentiality

 

14

Section 6.5

 

Information Rights

 

16

Section 6.6

 

Books and Records

 

16

Section 6.7

 

Public Announcement

 

16

Section 6.8

 

Required Shareholder Approval

 

17

Section 6.9

 

Royalty Pharma Offer

 

17

Section 6.10

 

Reasonable Best Efforts

 

18

Section 6.11

 

UCC Matters

 

18

Section 6.12

 

Royalty Interest Disclosures

 

18

Section 6.13

 

Minimum Seller Percentage of Royalty Interest

 

18

Section 6.14

 

Non-Cash Consideration

 

19

Section 6.15

 

Bankruptcy

 

19

Section 6.16

 

Compliance with Trust Agreement

 

22

 

Article VII

 

TERM AND TERMINATION

 

Section 7.1

 

Term

 

22

Section 7.2

 

Termination Prior to Closing

 

22

Section 7.3

 

Effect of Termination

 

23

 

Article VIII

 

INDEMNIFICATION

 

Section 8.1

 

Indemnification by Seller

 

24

Section 8.2

 

Indemnification by Purchaser

 

24

Section 8.3

 

Indemnification Procedure

 

24

Section 8.4

 

Claims Period for Breach of Representations and Warranties

 

26

Section 8.5

 

Limitations on Indemnification

 

26

Section 8.6

 

Exclusive Remedy

 

27

Section 8.7

 

Disclaimer of Consequential Damages

 

27

 

Article IX

 

MISCELLANEOUS

 

Section 9.1

 

Assignment

 

28

 

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Section 9.2

 

Further Assurances

 

29

Section 9.3

 

Notices

 

29

Section 9.4

 

Specific Performance

 

31

Section 9.5

 

Title; Headings; Captions

 

31

Section 9.6

 

Independent Contractors

 

31

Section 9.7

 

Third-Party Beneficiaries

 

31

Section 9.8

 

Entire Agreement

 

31

Section 9.9

 

Amendment and Supplementation

 

32

Section 9.10

 

No Waiver

 

32

Section 9.11

 

Severability

 

32

Section 9.12

 

Governing Law

 

32

Section 9.13

 

Submission to Jurisdiction

 

32

Section 9.14

 

Waiver of Jury Trial

 

32

Section 9.15

 

Counterparts

 

32

 

 

 

 

 

Appendix A

 

Definitions

 

A-1

Exhibit A

 

Press Release

 

A-1

Exhibit B

 

Form of Bill of Sale

 

B-1

Exhibit C

 

Form of UCC Financing Statement

 

C-1

Exhibit D

 

Form of Assignment Agreement

 

D-1

Exhibit E

 

Form of Trust Agreement

 

E-1

 

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ROYALTY PARTICIPATION AGREEMENT

 

ROYALTY PARTICIPATION AGREEMENT, dated as of May 12, 2013 (this “Agreement”),
between THERAVANCE, INC., a Delaware corporation (“Seller”), and ELAN
CORPORATION PLC, an Irish public limited company (“Purchaser”; and each of
Seller and Purchaser, a “Party” and together, the “Parties”).

 

BACKGROUND

 

A.                                    Seller is party to certain drug research,
development and commercialization agreements with GGL, referred to herein as the
GGL Agreements (each as defined herein), pursuant to which Seller is entitled to
certain royalties, milestone payments and other payments in connection with the
development and commercialization of products under the GGL Agreements.

 

B.                                    Seller wishes to sell to Purchaser, and
Purchaser wishes to purchase, a participation interest in certain royalty
payments when, as and if received by Seller from GGL, but not assign or
otherwise transfer to Purchaser any rights to royalty payments, or any other
rights, under any of the GGL Agreements.

 

C.                                    To effect such intent, Purchaser and
Seller intend for Seller to sell to Purchaser the beneficial interest in a
trust, the corpus of which is a fractional undivided beneficial interest in
amounts representing certain royalty payments, when, as and if received (but
excluding (i) any rights of any kind under the GGL Agreements and (ii) any
milestone payments and other payments) that Seller may receive from GGL pursuant
to the GGL Agreements with respect to certain products, subject to the terms and
conditions of this Agreement and in compliance with the terms and conditions of
the GGL Agreements.

 

DEFINITIONS AND INTERPRETATION

 

Capitalized terms used but not otherwise defined in this Agreement are defined
in Appendix A to this Agreement.  Appendix A also contains rules of
interpretation applicable to this Agreement.

 

SALE OF BENEFICIAL INTEREST

 

Section 2.1                                    Sale of Beneficial Interest.

 

(a)                       Effective as of the Closing:

 

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(i)             Pursuant to the terms of the Assignment Agreement, Seller shall
sell, grant, assign, put over, transfer and convey to Newco the Assignment
Interest, free and clear of all Encumbrances other than Permitted Encumbrances
(the “Assignment”);

 

(ii)          Pursuant to the terms of the Trust Agreement, Newco agrees to
enter into the Trust Agreement in consideration for the Assignment, whereby
Newco appoints the Trustee to hold in trust the Trust Property (as defined in
the Trust Agreement) in favor of the Seller (as beneficiary) (“Declaration of
Trust”); and

 

(iii)       In consideration of the payment of the Purchase Price and subject to
the terms and conditions of this Agreement, Seller shall sell, grant, assign,
put over, transfer and convey to Purchaser, and Purchaser shall purchase,
acquire and accept, the Beneficial Interest, free and clear of all Encumbrances,
other than Permitted Encumbrances.

 

(b)                       For the avoidance of doubt, Purchaser is not acquiring
any right or interest, including any royalty payment rights, under any GGL
Agreement; Purchaser is instead acquiring the beneficial interest in a trust,
the corpus of which is certain amounts when, as and if received by Newco
pursuant to the Assignment Interest in its fractional undivided beneficial
interest equal to the Percentage of the Royalty Interest payments that Seller
may receive from GGL pursuant to the GGL Agreements (but excluding (i) any
contractual rights of Seller to royalty payments, and (ii) any milestone
payments and other payments that Seller may receive, in each case, under the GGL
Agreements).  In no circumstances will the Assignment Interest be based on:

 

(i)             any royalty or other payments received by Seller pursuant to the
GGL Agreements based on or relating to sales of Royalty Interest Products which
occur prior to the Closing Date;

 

(ii)          any royalty or other payments received by Seller pursuant to any
of the GGL Agreements based on or relating to sales of Royalty Interest Products
which occur at any time after the end of the Royalty Interest Term with respect
to any Royalty Interest Product in any country;

 

(iii)       any royalty or other payments received by Seller   pursuant to any
of the GGL Agreements based on or relating to sales of any Excluded Products,
whether before, during or after the Royalty Interest Term; or

 

(iv)      any non-monetary consideration provided to Seller pursuant to the
terms of the GGL Agreements with respect to the Royalty Interest Products,
subject to the terms of Section 6.14 of this Agreement.

 

Section 2.2                                    Exclusion of GGL Agreement
Rights.  It is understood and agreed by the Parties that, notwithstanding
anything to the contrary in the Transaction Documents, Seller shall retain all
of its rights and interests in, and no rights or interests are being sold,
granted, assigned, put over, transferred or conveyed by Seller to Newco (other
than the

 

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Assignment Interest) or to Purchaser, under any of the GGL Agreements.  Without
limiting the foregoing, pursuant to the Trust Agreement, no contractual rights
to any payments (whether to royalties or otherwise) under the GGL Agreements or
the Assignment Agreement are being sold, granted, assigned, put over,
transferred or conveyed, and no security interest or other Encumbrance is being
granted or imposed on the GGL Agreements or the Assignment Agreement or on any
rights to any payments under the GGL Agreements or the Assignment Agreement
(whether to royalties or otherwise).  It is the intent of the Parties that the
transfer of the Assignment Interest shall constitute a true sale of the
Percentage of the undivided beneficial interest in the Royalty Interest to
Newco.  The Seller hereby authorizes the filing under the UCC of a financing
statement in the form attached hereto as Exhibit C with respect to the sale of
the Assignment Interest by Seller to Newco, and any continuation statements
(including amendments to effect such continuation) required under the UCC with
respect thereto reasonably requested by Purchaser (subject to confidentiality
obligations under the GGL Agreements) in order to evidence such sale.

 

Section 2.3                                    No Obligations Transferred. 
Notwithstanding anything to the contrary in the Transaction Documents, the sale,
grant, put over, assignment, transfer and conveyance of the Assignment Interest
and the Beneficial Interest shall not: (i) transfer to Newco, or make Newco
subject to, any obligation or liability of Seller under the GGL Agreements,
except as required to comply with the GGL Agreements (including the
confidentiality obligations therein) and (ii) transfer to Purchaser, or make
Purchaser subject to, any obligation or liability of Seller under the GGL
Agreements.  Such obligations and liabilities, including the VI Reverse
Milestone Payment Obligation, are, and from and after the Closing shall remain,
the obligations and liabilities of Seller.  Purchaser understands and agrees
that, under the Trust Agreement, neither it nor the Trustee shall have any
rights (whether as a third party beneficiary or otherwise) to enforce (or in the
case of Purchaser), to request or require that the Trustee enforce any rights or
obligations under the Assignment Agreement, and for the avoidance of doubt,
Purchaser hereby disclaims any and all such claims.  For the avoidance of doubt,
the foregoing shall not (a) affect Seller’s or Purchaser’s rights under this
Agreement or modify the obligations Purchaser and Seller have under this
Agreement or (b) affect any liability of either Party to the other under the
provisions of Article VIII hereof.

 

Section 2.4                                    Purchase Price.  The Purchase
Price to be paid by Purchaser for the Beneficial Interest is One Billion United
States Dollars (US$1,000,000,000) (the “Purchase Price”).

 

CLOSING

 

Section 3.1                                    Closing.  Subject to the
satisfaction or, if permissible, waiver of the conditions set forth in
Section 3.3, the closing of the Transactions (the “Closing”) will take place on
the Business Day following the satisfaction or waiver of the conditions set
forth in Section 3.3 at the offices of Skadden, Arps, Slate, Meagher & Flom LLP;
525 University Avenue, Suite 1100; Palo Alto, California 94301, unless another
time, date or place is agreed to in writing by the Parties (such date being the
“Closing Date”).

 

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Section 3.2                                    Payment of Purchase Price;
Delivery of Bill of Sale.  At the Closing, (a) Purchaser shall deliver to Seller
payment of the Purchase Price in its entirety, by wire transfer (same day) of
immediately available funds, to the account(s) notified in writing by Seller,
without any reduction, deduction, offset or exclusion, whether for withholding
or other taxes, or otherwise and (b) Seller shall deliver to Purchaser the
executed Bill of Sale duly executed on behalf of Seller and shall instruct the
Trustee to change the beneficiary of the Trust to Purchaser.

 

Section 3.3                                    Closing Conditions of Each Party.

 

(a)                       The respective obligations of each Party to consummate
the Transactions are subject to the satisfaction or (to the extent permitted by
Law) waiver by Seller and Purchaser at or prior to the Closing of the following
conditions:

 

(i)             if required pursuant to Rule 21 of the Irish Takeover
Rules (“Rule 21”), the Required Shareholder Approval approving the Transactions
shall have been obtained (it being understood and agreed that if such approval
is no longer required pursuant to Rule 21, then this condition shall be deemed
satisfied); and

 

(ii)          no Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Law or Order which is then in effect and has the effect
of prohibiting the consummation of the Transactions.

 

(b)                       The obligations of Seller to consummate the
Transactions are subject to the satisfaction at or prior to the Closing of the
following further conditions:

 

(i)             (A) the representations and warranties of Purchaser contained in
Sections 5.1 and 5.2 (1) that are qualified by materiality or Purchaser Material
Adverse Effect shall be true in all respects at and as of the Closing Date as if
made at and as of such date, and (2) that are not qualified by materiality or
Purchaser Material Adverse Effect shall be true in all material respects at and
as of the Closing Date as if made at and as of such time, and (B) Seller shall
have received a certificate signed by an appropriate executive officer of
Purchaser to the foregoing effect.

 

(c)                        The obligations of Purchaser to consummate the
Transactions are subject to the satisfaction at or prior to the Closing of the
following further conditions:

 

(i)             the Initial Transactions shall have been consummated; and

 

(ii)          (A) the representations and warranties of Seller contained in
Sections 4.1, 4.2, 4.5(a), 4.5(c), 4.5(d) and 4.6 (1) that are qualified by
materiality or Seller Material Adverse Effect shall be true in all respects at
and as of the Closing Date as if made at and as of such date, and (2) that are
not qualified by materiality or Seller Material Adverse Effect shall be true in
all material respects at and as of the Closing Date as if made at and as of such
time,

 

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and (B) Purchaser shall have received a certificate signed by an appropriate
executive officer of Seller to the foregoing effect.

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as disclosed in the separate disclosure letter which has been delivered
by Seller to Purchaser prior to the execution of this Agreement (the “Seller
Disclosure Schedule”) (each of which disclosures shall be effective with respect
to (i) the corresponding sections and subsections of this Article IV, and
(ii) any other section or subsection of this Article IV, but only if the
relevance of that reference as an exception to (or a disclosure for purposes of)
such section or subsection would be reasonably apparent to a reasonable person
who has read that reference and such representations and warranties), Seller
hereby represents and warrants to Purchaser as of the date of this Agreement and
as of the Closing Date:

 

Section 4.1                                    Organization.  Seller is a
corporation duly organized, validly existing and in good standing, under the
Laws of the state of Delaware.  As of the Closing, Newco shall be a limited
liability partnership duly organized and validly existing under the laws of
England and Wales.  Seller has made available to Purchaser true, correct and
complete copies of its charter and bylaws, in each case as amended to the date
hereof (the “Seller Charter Documents”), and shall have made available to
Purchaser prior to Closing true, correct and complete copies of Newco’s
organizational documents (the “Newco Charter Documents”) and Delaware Sub’s
organizational documents (the “Delaware Sub Charter Documents”).  All Seller
Charter Documents are in full force and effect, and the Newco Charter Documents
shall, as of the Closing, be in full force and effect.  Seller is not in
violation of the Seller Charter Documents, and, as of the Closing, (i) Newco
shall not be in violation of the Newco Charter Documents, and (ii) Delaware Sub
shall not be in violation of the Delaware Sub Charter Documents, except, in each
case, as would not have, individually or in the aggregate, a Seller Material
Adverse Effect.

 

Section 4.2                                    Power, Authorization and
Enforceability.

 

(a)                       Seller has all necessary corporate power and authority
to execute and deliver the Transaction Documents to which it is a party, to
perform its obligations hereunder and thereunder, and to consummate the
Transactions to which it is a party.  The execution, delivery and performance by
Seller of the Transaction Documents to which it is a party and the consummation
by Seller of the Transactions to which it is a party have been duly and validly
authorized by all necessary corporate action of Seller, and no other corporate
proceedings on the part of Seller are necessary to authorize the execution,
delivery and performance of this Agreement or to consummate such Transactions. 
This Agreement has been duly and validly executed and delivered by Seller and,
assuming it is duly and validly executed and delivered by Purchaser, shall be a
legal and valid binding obligation of Seller, enforceable in accordance with its
terms, subject to applicable Laws affecting creditors’ rights generally and, as
to enforcement, to general principles of equity, regardless of whether applied
in a proceeding at law or in equity.

 

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(b)                       As of the Closing, Newco shall have all necessary
partnership power and authority, and Delaware Sub shall have all necessary
limited liability company power and authority, to execute and deliver the
Transaction Documents to which it is a party, to perform its respective
obligations thereunder, and to consummate the Transactions to which it is a
party.  As of the Closing, the execution, delivery and performance by each of
Newco and Delaware Sub of the Transaction Documents to which it is party and the
consummation by each of Newco and Delaware Sub of the Transactions to which it
is a party shall have been duly and validly authorized by all necessary
partnership action of Newco and all necessary limited liability company action
of Delaware Sub, and no other partnership proceedings on the part of Newco or
limited liability company proceedings on the part of Delaware Sub shall be
necessary to authorize the execution, delivery and performance of such
Transaction Documents or to consummate such Transactions.  As of the Closing,
such Transaction Documents shall have been duly and validly executed and
delivered by each of Newco and Delaware Sub and, assuming such Transaction
Documents are duly and validly executed and delivered by the other parties
thereto, shall be a legal and valid binding obligation of each of Newco and
Delaware Sub, enforceable in accordance with their respective terms, subject to
applicable Laws affecting creditors’ rights generally and, as to enforcement, to
general principles of equity, regardless of whether applied in a proceeding at
law or in equity.

 

Section 4.3                                    No Conflicts or Violations.

 

(a)                       None of the execution and delivery by Seller of the
Transaction Documents to which it is a party, the consummation by Seller of the
Transactions to which it is a party, or Seller’s compliance with such
Transaction Documents will (i) conflict with or violate the Seller Charter
Documents, (ii) constitute a breach or default by Seller under any of the GGL
Agreements, (iii) constitute a breach or default under any agreement (other than
the GGL Agreements) to which Seller or any of its Subsidiaries is a party or by
which any of its or their property or assets are bound, (iv) require Seller to
make any filing with or obtain any permit, authorization, consent or approval of
any Governmental Authority or other Person, or (v) violate any Law or Order to
which Seller or the Beneficial Interest is subject, except, in the case of
Sections 4.3(a)(ii), (iii), (iv) and (v), as would not reasonably be expected to
result in a Seller Material Adverse Effect.

 

(b)                       As of the Closing, none of the execution and delivery
by each of Newco and Delaware Sub of ,the Transaction Documents to which it is a
party, the consummation by each of Newco and Delaware Sub of the Transactions to
which it is a party, or the compliance by each of Newco and Delaware Sub with
such Transaction Documents will (i) conflict with or violate the Newco Charter
Documents or the Delaware Sub Charter Documents, respectively, (ii) constitute a
breach or default by Seller under any of the GGL Agreements, (iii) constitute a
breach or default under any agreement (other than the GGL Agreements) to which
Seller or any of its Subsidiaries is a party or by which any of its or their
property or assets are bound, (iv) require Newco or Delaware Sub to make any
filing with or obtain any permit, authorization, consent or approval of any
Governmental Authority or other Person, or (v) violate any Law or Order to which
Newco, Delaware Sub, or the Assigned Interest will be subject, except, in the
case of Sections 4.3(b)(ii), (iii), (iv) and (v), as would not reasonably be
expected to result in a Seller Material Adverse Effect.

 

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Section 4.4                                    Proceedings.  As of the date
hereof, there is no action, suit, proceeding or, to the Knowledge of Seller,
investigation before any Governmental Authority, court or arbitrator pending or,
to the Knowledge of Seller, threatened in writing against Seller or its
Subsidiaries relating to the GGL Agreements or the Beneficial Interest, except
as would not reasonably be expected to result in a Seller Material Adverse
Effect.

 

Section 4.5                                    GGL Agreements.

 

(a)                       Validity and Enforceability.  Each of the GGL
Agreements is a legal, valid and binding obligation, in full force and effect,
enforceable in accordance with its terms in all material respects, of Seller
and, to the Knowledge of Seller, of GGL, subject to applicable Laws affecting
creditors’ rights generally and, as to enforcement, to general principles of
equity, regardless of whether applied in a proceeding at law or in equity.

 

(b)                       Breach.  Seller is not in breach of any of the GGL
Agreements in any material respect.

 

(c)                        Assignment.  Seller has not assigned to any Person
any of the GGL Agreements since their initial dates of execution, in whole or in
part, except as contemplated herein.

 

(d)                       Other.

 

(i)             GGL does not have any right to unilaterally amend any GGL
Agreement in any manner which would or would reasonably be expected to result,
individually or in the aggregate, in a Seller Material Adverse Effect.

 

(ii)          The information publicly disclosed, as publicly amended and
supplemented, by Seller in the Seller Exchange Act Reports regarding the GGL
Agreements and the Royalty Interest Products, does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make such information, in light of the circumstances in which it was
disclosed, not misleading.

 

Section 4.6                                    Contractual Rights to Royalty
Interest.  Other than in connection with the Initial Transactions, Seller (i) is
the exclusive owner of Seller’s entire right and interest in, to and under the
GGL Agreements and the Royalty Interest, free and clear of all Encumbrances
other than Permitted Encumbrances and (ii) has not assigned or granted to any
Third Party any right or interest (including payments or proceeds) in or to any
Royalty Interest beneficially or otherwise.

 

Section 4.7                                    Intellectual Property.  To the
Knowledge of Seller, except as would not reasonably be expected to have a Seller
Material Adverse Effect, as of the date hereof:

 

(a)                       there are no pending litigations, interferences,
reexaminations, post-grant proceedings or oppositions in any Major Market
Country involving any patents or patent

 

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applications owned by Seller and that cover the composition of matter of any of
the Royalty Interest Products (collectively, the “Key Patents”);

 

(b)                       the Key Patents that have been granted are valid and
enforceable in all material respects;

 

(c)                        there is no Person who is or claims to be an inventor
under any of the Key Patents who is not a named inventor thereof;

 

(d)                       Seller has not received written notice of any claim by
any Person challenging the ownership or the validity or enforceability of the
Key Patents, or asserting that the manufacture, importation, sale, offer for
sale or use of any of the Royalty Interest Products infringes such Person's
patents or other intellectual property rights;

 

(e)                        no Third Party patent rights have been, are or
currently would be, but for an infringement safe harbor, infringed by the
manufacture, importation, sale, offer for sale or use of any of the Royalty
Interest Products;

 

(f)                         no Person is infringing any of the Key Patents in
any material respect; and

 

(g)                        all fees necessary to maintain in effect the issued
Key Patents have been paid as and when due.

 

Section 4.8                          UCC Matters.  The Seller's exact legal name
is, and during the five (5) years prior to the date hereof has been,
"Theravance, Inc.".  The principal place of business of the Seller is, and
during the five (5) years prior to the date hereof has been, located in South
San Francisco.  The jurisdiction of organization of the Seller is, and has been
during the five (5) years prior to the date hereof, located in Delaware.  During
the five (5) years prior to the date hereof, the Seller has not been the subject
of any merger or limited partnership or other reorganization in which its
identity or status was materially changed, except in each case when it was the
surviving or resulting entity.

 

Section 4.9                          No Implied Representations and Warranties. 
Purchaser acknowledges and agrees that: (i) other than the representations and
warranties of Seller specifically contained in this Article IV, there are no
representations or warranties of Seller, Newco or any other Person, and Seller
hereby disclaims all other representations and warranties, whether  express,
statutory or implied, in connection with this Agreement or the Transactions,
including with respect to the Beneficial Interest, the Initial Transactions, the
GGL Agreements, the Royalty Interest Products, the Key Patents or any other
Intellectual Property or data relating to the Royalty Interest Products
including patents and patent applications and other Intellectual Property owned
by GGL, or the Transactions, and (ii) Purchaser does not rely on, and Seller
shall have no liability in respect of, any representation or warranty not
specifically set forth in this Article IV.  Without limiting the foregoing, but
subject to Section 4.5(d)(ii), Purchaser acknowledges and agrees that (a)(i) the
GGL Agreements generally impose confidentiality obligations on information
relating to or generated in connection with those agreements and performance
thereunder, and, accordingly, Purchaser has made its own investigation and
assessment of the Beneficial Interest, the Royalty Interest Products, the GGL
Agreements, the

 

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Key Patents and any other Intellectual Property related to the Royalty Interest
Products, including patents and patent applications and other Intellectual
Property owned by GGL, and the Transactions, that Purchaser is entering into
this Agreement based on such investigation and assessment and that Purchaser has
not relied on and specifically waives any representation, warranty, description
or statement, express or implied, set forth in any advertising, marketing
literature or other documentation or materials concerning the GGL Agreements,
the Beneficial Interest, the Royalty Interest Products, the Key Patents and any
other Intellectual Property related to the Royalty Interest Products including
patents and patent applications and other Intellectual Property owned by GGL,
and (ii) Purchaser is not relying on, and shall have no remedies in respect of,
any implied warranties whatsoever, including as to the future amount or
potential amount of the Beneficial Interest, the creditworthiness of GGL or any
of its Affiliates or any other matter, and (b) except as expressly set forth in
any representation or warranty in this Article IV (as modified by the Seller
Disclosure Schedule), Seller shall have no liability for losses or damages
pursuant to this Agreement (or otherwise) with respect to any information,
documents or materials furnished or made available to Purchaser or any of its
Affiliates in any data room, presentation, interview or in any other form or
manner relating to the Transactions or the GGL Agreements.

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Except as disclosed in the separate disclosure letter which has been delivered
by Purchaser to Seller prior to the execution of this Agreement (the "Purchaser
Disclosure Schedule") (each of which disclosures shall be effective with respect
to (i) the corresponding sections and subsections of this Article V, and (ii)
any other section or subsection of this Article V, but only if the relevance of
that reference as an exception to (or a disclosure for purposes of) such section
or subsection would be reasonably apparent to a reasonable person who has read
that reference and such representations and warranties), Purchaser hereby
represents and warrants to Seller as of the date of this Agreement and as of the
Closing Date:

 

Section 5.1                          Organization.  Purchaser is a public
limited company duly organized and validly existing under the Laws of Ireland. 
Purchaser has made available to Seller true, correct and complete copies of its
memorandum and articles of association or other relevant organizational and
governance documents, in each case as amended to the date hereof (the "Purchaser
Charter Documents").  All Purchaser Charter Documents are in full force and
effect.  Purchaser is not in violation of the Purchaser Charter Documents,
except as would not have, individually or in the aggregate, a Purchaser Material
Adverse Effect. 

 

Section 5.2                          Power, Authorization and Enforceability. 
Purchaser has, all necessary power and authority to execute and deliver the
Transaction Documents to which it is a party, to perform its obligations
hereunder and thereunder, and to consummate the Transactions to which it is a
party.  The execution, delivery and performance by Purchaser of the Transaction
Documents to which it is a party and the consummation by Purchaser of the
Transactions to which it is a party have been duly and validly authorized by all
necessary corporate action of Purchaser, other than the Required Shareholder
Approval, and no other corporate proceedings on the part of Purchaser are
necessary to authorize the execution, delivery and performance of this

 

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Agreement or to consummate such Transactions.  This Agreement has been duly and
validly executed and delivered by Purchaser and, assuming it is duly and validly
executed and delivered by Seller, shall be a legal and valid binding obligation
of Purchaser, enforceable in accordance with its terms, subject to applicable
Laws affecting creditors' rights generally and, as to enforcement, to general
principles of equity, regardless of whether applied in a proceeding at law or in
equity.

 

Section 5.3                          No Conflicts or Violations.  None of the
execution and delivery by Purchaser of the Transaction Documents to which it is
a party, the consummation by Purchaser of the Transactions to which it is a
party, or Purchaser's compliance with such Transaction Documents will (a)
conflict with or violate the Purchaser Charter Documents, (b) constitute a
breach or default under any agreement to which Purchaser or any of its
Subsidiaries is a party or by which any of its or their property or assets is
bound, (c) require Purchaser to make any filing with or obtain any permit,
authorization, consent or approval of any Governmental Authority or other
Person, or (d) violate any Law or Order to which Purchaser is subject, except in
the case of Sections 5.3(b), (c) and (d), as would not reasonably be expected to
result in a Purchaser Material Adverse Effect.

 

Section 5.4                          Proceedings.  There is no action, suit,
proceeding or, to the Knowledge of Purchaser, investigation before any
Governmental Authority, court or arbitrator pending or, to the Knowledge of
Purchaser, threatened in writing against Purchaser or its Affiliates relating to
the Transactions, except as would not reasonably be expected to result in a
Purchaser Material Adverse Effect.

 

Section 5.5                          Financing.  Purchaser has and, at the time
of the Closing will have, sufficient funds in cash available to consummate the
Transactions, including payment of the Purchase Price.  Purchaser acknowledges
and agrees that its obligations hereunder are not subject to any conditions
regarding Purchaser's or any other Person's ability to obtain funding or
financing for the consummation of the Transactions.

 

Section 5.6                          No Implied Representations and Warranties. 
Seller acknowledges and agrees that, other than the representations and
warranties of Purchaser specifically contained in this Article V, there are no
representations or warranties of Purchaser or any other Person either expressed
or implied with respect to the Beneficial Interest or the Transactions, and that
it does not rely on, and Purchaser shall have no liability in respect of, any
representation or warranty not specifically set forth in this Article V.

 

COVENANTS

 

Section 6.1                                    Payment of Beneficial Interest.

 

(a)                       Seller shall irrevocably instruct GGL to make any and
all payments in respect of the Assignment Interest into the Account or, if the
Lock Box Arrangement is in place, into the Lock Box Account (and from the Lock
Box Account into the Account in accordance with the Lock Box Arrangement) when,
as and if any such amounts become payable.  Payments in the Account shall be
released to Purchaser on the earlier to occur of (i) the next

 

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Business Day following the delivery to the Trustee of an Earnings Release
Notification (as such term is defined in the Trust Agreement) and (ii) sixty
(60) days after receipt into the Account of such payments.  Pursuant to the
Trust Agreement, the Settlor can make additional contributions to the Trust for
the benefit of the Beneficiary at any time in its own discretion.  At any time
Seller releases its quarterly or annual public financial statements, Seller
shall promptly thereafter deliver to the Trustee an Earnings Release
Notification (as such term is defined in the Trust Agreement) regarding such
financial statements.  Failure to so notify the Trustee shall be without
prejudice to Purchaser delivering to the Trustee an Earnings Release
Notification (as such term is defined in the Trust Agreement).  Pursuant to the
Trust Agreement, Seller may deliver a certificate setting forth the amount of
any Cost-Sharing Deductions to be remitted to Seller pursuant to the Trust
Agreement.  The Parties shall share equally the out-of-pocket costs and expenses
associated with the Trust, the Lock Box Account and the Account. Notwithstanding
the foregoing, to the extent Seller receives any amounts in respect of the
Assignment Interest from GGL, Seller shall, within two (2) Business Days after
such receipt remit, by wire transfer of immediately available funds in United
States Dollars to the Account. All such payments are subject to withholding for
Taxes, levies and other duties as applicable under the GGL Agreement.

 

(b)                       In the event that GGL reduces, deducts, offsets or
excludes from royalty payments made to Seller in respect of sales of Royalty
Interest Products any amounts that GGL claims Seller owes to GGL (i) related to
the Royalty Interest, the Transactions or any of the Transaction Documents
(including any deduction or withholding for Taxes), and Seller disputes any such
reductions, deductions, offsets or exclusions, Seller shall notify Purchaser (to
the extent not prohibited under the GGL Agreements) of such dispute and, upon
resolution (if any) of such dispute and payment of such disputed amount by GGL
to Seller, Seller shall instruct GGL to make a payment in respect of the
Assignment Interest into the Account with respect to such disputed amount, (ii)
related to the Royalty Interest and (A) there is no dispute between GGL and
Seller as to the amount of the royalty payment due in respect of a Royalty
Interest Product under the GGL Agreements, (B) there is no dispute between GGL
and Seller as to the appropriate amount of the reductions, deductions, offsets
or exclusions from such royalty payment and (C) Seller nonetheless consents to a
reduction, deduction, offset or exclusion from such royalty payment of an amount
in excess of the appropriate reduction, deduction, offset or exclusion amount,
then Seller shall pay to the Account an amount equal to such agreed to
reduction, deduction, offset or exclusion in excess of such appropriate amount
of reductions, deductions, offsets and exclusions multiplied by the Percentage,
or (iii) unrelated to the Royalty Interest, the Transactions or any of the
Transaction Documents, then, Seller shall pay to the Account an amount equal to
the amount of such reduction, deduction, offset or exclusion multiplied by the
Percentage.  

 

(c)                        To the extent that any amount other than payments of
the Assignment Interest is deposited by GGL in the Account, Purchaser shall,
within two (2) Business Days after becoming aware thereof (but in no event prior
to receipt of such amount by Purchaser from the Account), remit such amount, by
wire transfer of immediately available funds in United States Dollars to Seller.

 

(d)                       Purchaser acknowledges and agrees that neither Seller
nor Newco is guaranteeing the performance or payment by GGL of its obligations
under the GGL Agreements,

 

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and without limiting the foregoing, Purchaser shall have no recourse to Seller
or Newco under this Agreement or otherwise due to GGL's failure to perform its
obligations under or breach of the GGL Agreements.

 

(e)                        To the extent that Seller incurs any out-of-pocket
costs and expenses under the GGL Agreements in connection with the Royalty
Interest or brings suit or other action against GGL to enforce Seller's rights
or GGL's obligations under the GGL Agreements with respect to or to the extent
affecting the Royalty Interest, Seller shall be entitled to receive from the
Trustee pursuant to Section 7.1 of the Trust Agreement an amount equal to the
product of (x) the Percentage multiplied by (y) such out-of-pocket costs and
expenses actually incurred by Seller and not reimbursed by GGL pursuant to the
GGL Agreements ("Cost-Sharing Deductions") without duplication (after giving
effect to all actions taken under the other Transaction Documents).  Without
prejudice to Seller’s right to receive such amount under Section 7.1 of the
Trust Agreement, Purchaser reserves the right to object to any claim by Seller
with respect to any such Cost-Sharing Deduction, and following the resolution of
any such objection, Seller shall pay Purchaser such portion (if any) of any such
Cost-Sharing Deduction that is determined to not have been owed to Seller, it
being understood and agreed that any restrictions on Seller's right to provide
information under the GGL Agreements in connection with such claim shall not be
used to prejudice Seller's position in any such dispute.   In the event that any
amounts then in the Account are insufficient to pay in full the Cost-Sharing
Deductions, then Purchaser shall, promptly upon demand from Seller, pay Seller
the extent of any such insufficiency.  To the extent Seller is subsequently
reimbursed by GGL for such Cost-Sharing Deductions, Seller shall deposit into
the Account an amount equal to the product of (x) the Percentage, multiplied by
(y) the amount of such reimbursement.

 

(f)                         If at any time, Seller and GGL (or their successors
under the GGL Agreements) merge, consolidate or otherwise become one and the
same entity and the Royalty Interest ceases to be payable in whole or in part,
then Seller, or if Seller is not the surviving entity, the surviving entity
shall pay to Purchaser at such times as would have been payable an amount equal
to the amounts Purchaser would otherwise have been entitled to receive under the
Transaction Documents as if the GGL Agreements were in full force and effect and
the Royalty Interest remained outstanding.

 

(g)                        Seller shall not, and shall cause Newco not to, amend
or terminate the Assignment Agreement or the Trust Agreement without Purchaser's
prior written consent.

 

Section 6.2                                    Tax Matters.

 

(a)                       Seller shall be entitled to deduct and withhold from
the amounts paid or delivered in connection with the Transactions any amounts
that Seller is required to deduct and withhold with respect to any such
deliveries and payments under the Internal Revenue Code of 1986, as amended, or
any provision of state, local, or non-U.S. Law.  If (A) Seller assigns or
otherwise transfers this Agreement or the GGL Agreements, (B) Seller, Newco or a
Newco Partner changes its jurisdiction of incorporation, residence or
organizational structure for tax purposes, (C) Seller violates Section 6.2(b) or
Section 6.3 or (D) Seller ceases to be a company described in Article 23(2)(c)
of the Treaty, and the amount that is deducted or withheld pursuant to the
previous sentence or any amount deducted or withheld by GGL on a

 

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Royalty Interest payment under the GGL Agreement is greater than the amount that
otherwise would have been deducted or withheld, then Seller (or such assignees
or transferees) shall pay to the Account such additional amounts so that after
all such deduction and withholding have been paid, Purchaser receives an amount
equal to the amount it would have received had such event described in clause
(A), (B), (C) or (D) not occurred, provided that in the event that (W) Purchaser
assigns or otherwise transfers this Agreement, (X) Purchaser changes its
jurisdiction of incorporation, residence, or organizational structure for tax
purposes, (Y) Purchaser violates Section 6.2(c), or (Z) such requirement to
deduct and withhold arises from a change in Law occurring after the date of this
Agreement, the amount payable by Seller (or its assignees or transferees)
pursuant to this sentence shall be reduced to an amount equal to the payment
that would have been required by Seller (or its assignees or transferees) had
such event described in clause (W), (X), (Y) or (Z) not occurred.  To the extent
that Seller withholds such amounts and remits such withheld amounts to the
applicable Governmental Authority, such withheld amounts shall be treated as
having been paid to or on behalf of Purchaser.  If Seller determines that it is
required by Law to deduct and withhold any amount as described in this
Section 6.2(a), Seller shall notify the Trustee and Purchaser of any such
requirement as soon as reasonably practical after such determination is made by
Seller.  Assuming the accuracy of all representations and covenants made by
Purchaser in this Agreement, Seller does not intend, as of the date of this
Agreement and under Law at such time, to deduct and withhold any amount as
described in this Section 6.2(a), provided that Purchaser complies in all
respects with its obligations under this Agreement.  Seller makes no guarantees,
however, as to whether such deduction and withholding may ultimately be
required.

 

(b)                       To the extent not prohibited by the GGL Agreements,
Seller agrees to use its commercially reasonable efforts to provide in a timely
manner such cooperation or assistance (including by providing any necessary tax
forms or other documents) as may be reasonably requested by Purchaser or the
Trustee (at the sole cost of Purchaser) at any time after the date of this
Agreement, so long as the cooperation or assistance could not reasonably be
expected to prejudice in any material respect the legal or commercial position
of Seller, in order to reduce or eliminate any amounts deducted or withheld
pursuant to Section 6.2(a) or any amounts deducted or withheld by GGL on a
Royalty Interest payment under the GGL Agreements.

 

(c)                        Purchaser agrees to use its commercially reasonable
efforts to provide in a timely manner such cooperation or assistance (including
by providing any necessary tax forms or other documents) as may be reasonably
requested by Seller or the Trustee at any time after the date of this Agreement,
so long as the cooperation or assistance could not reasonably be expected to
prejudice in any material respect the legal or commercial position of Purchaser,
in order to reduce or eliminate any amounts deducted or withheld pursuant to
Section 6.2(a) or any amounts deducted or withheld by GGL on a Royalty Interest
payment under the GGL Agreements.

 

(d)                       In the event that Seller or any Seller Affiliate
receives from any Tax Authority any refund or repayment of any amount which has
been deducted or withheld pursuant to Section 6.2(a) or any amount which has
been deducted or withheld by GGL on a Royalty Interest payment under the GGL
Agreements, Seller shall pay such refund or repayment to Purchaser as soon as
reasonably practicable.

 

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Section 6.3                                    GGL Agreements.

 

(a)                       Seller shall comply in all material respects with its
obligations under the GGL Agreements.

 

(b)                       Seller agrees that it will not, without Purchaser’s
prior written consent, (i) consent to any termination of the GGL Agreements with
respect to the Royalty Interest Products, (ii) consent to any amendment of the
provisions of the GGL Agreements that implement the formula for calculating the
royalties payable under the Royalty Interest or (iii) impose an Encumbrance on
the Assignment Interest or Beneficial Interest.

 

(c)                        Purchaser acknowledges and agrees that, except for
the express covenants contained in the Transaction Documents, neither Seller nor
Newco shall have any obligation or liability, whether express or implied, in
connection with the exercise of Seller’s rights and performance of its
obligations under the GGL Agreements and that neither Purchaser nor any other
person shall have any claim of any kind against Seller or Newco based on or
arising out of Seller’s performance under or in connection with the GGL
Agreements, it being understood that Seller shall not be liable or have any
obligation with respect to allocations of resources, scope, intensity and
duration of efforts, and decisions and judgments made in connection with
development and commercialization (including any acts or omissions that result
in, or increase the likelihood of, greater or lesser commercial success)
(i) with respect to, or as among, any Royalty Interest Products, or (ii) as
among any one or more Royalty Interest Products, on the one hand, and any
Excluded Products, other products or therapeutically active components, on the
other hand.

 

Section 6.4                                    Confidentiality.

 

(a)                       Definition.   “Confidential Information” means all
information (whether written or oral, or in electronic or other form, and
whether furnished before or after the date of this Agreement) disclosed or made
available to Purchaser by or on behalf of Seller concerning, or relating in any
way, directly or indirectly, to this Agreement, the Transactions or the Royalty
Interest, including (i) this Agreement,  including all terms and conditions
hereof, (ii) any royalty information, assignments, notices, requests,
correspondence or other information furnished pursuant to this Agreement, and
any other reports, data, materials, notices, correspondence or documents of any
kind relating in any way, directly or indirectly, to this Agreement, the Royalty
Interest or the intellectual property, compounds or products giving rise to the
Royalty Interest, (iii) any inventions, devices, improvements, formulations,
discoveries, compositions, ingredients, patents, patent applications, know-how,
processes, trial results, research, developments or any other intellectual
property, trade secrets or information involving or relating in any way,
directly or indirectly, to the Royalty Interest or the compounds or products
giving rise to the Royalty Interest, and (iv) any other material proprietary and
confidential information, in whatever form.

 

(b)                       Exclusions.  Confidential Information will not include
information which:

 

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(i)             at or prior to the time of disclosure by Seller was known to
Purchaser or its Affiliates through lawful means and is not under any obligation
of confidentiality, as evidenced by Purchaser’s written records;

 

(ii)          at or after the time of disclosure by Seller becomes generally
available to the public through no act or omission on the part of Purchaser or
its Affiliates in violation of any obligation of confidentiality or any other
legal, contractual or fiduciary obligation to Seller, GGL or any of their
respective Affiliates, as evidenced by documents that were generally published
prior to any disclosure of such information by Seller;

 

(iii)       is developed by Purchaser independent of, and without any use of or
access or reference to Confidential Information, as evidenced by Purchaser’s
written records; or

 

(iv)      Purchaser receives from a Third Party free to make such disclosure
free of any obligation of confidentiality and without breach of any other legal
obligation; provided that such Third Party, had the right to disclose such
information to Purchaser (free of any obligation of confidentiality and without
any legal, contractual or fiduciary obligation to Seller, GGL or any of their
respective Affiliates) as evidenced by Purchaser’s written records.

 

(c)                        Requirements.  Purchaser acknowledges the
confidential and proprietary nature of the Confidential Information and agrees
that it shall not discuss, reveal, or disclose the Confidential Information to
any other Person, or use any Confidential Information for any purpose, other
than in connection with the performance of this Agreement, in each case, without
the prior written consent of Seller.  Purchaser agrees to take all reasonable
precautions (no less rigorous than Purchaser takes with respect to its own
comparable confidential and proprietary information) to prevent unauthorized or
inadvertent disclosure of the Confidential Information.

 

(d)                       Disclosure, Legal Obligations.  Notwithstanding the
foregoing, Purchaser may disclose such Confidential Information to its officers,
directors, employees, accountants, counsel, consultants, advisors and agents who
need to know such information in connection with Purchaser’s evaluation and
performance of the Transactions and to its lenders or other financing sources in
connection with obtaining financing for Purchaser’s operations, so long as
(i) such Persons are informed by Purchaser of the confidential nature of such
Confidential Information and agree to treat such information confidentially in
accordance with the requirements of this Section 6.4 for the benefit of Seller
and (ii) Purchaser shall be liable for any breach or violation of such
obligations by any such Person.  Purchaser may also disclose Confidential
Information to the extent required by Law, including the applicable rules of any
stock exchange that are binding on Purchaser, provided that Purchaser shall use
its reasonable best efforts to notify Seller of such requirement (to the extent
permitted by applicable Law) promptly and sufficiently in advance of any such
disclosure so that Seller may seek an appropriate protective order or other
appropriate remedy.  Purchaser shall use its reasonable best efforts to  limit
such disclosures to that portion of the information legally required to be
disclosed and shall use its reasonable best efforts to seek confidential
treatment for such information if so

 

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requested by Seller.  In addition, the Parties will coordinate in advance with
each other in connection with the redaction of certain provisions of this
Agreement with respect to any SEC or foreign equivalent filings of this
Agreement, and each Party shall use its reasonable best efforts to seek
confidential treatment for such terms if so requested by the other Party.

 

(e)                        Return of Information.  Purchaser will, at the
request of Seller, after the expiration of the Term or effective termination of
this Agreement (i) promptly return all Confidential Information held or used by
Purchaser in whatever form, or (ii) at the discretion of Seller, promptly
destroy all such Confidential Information, including all copies thereof, and
those portions of all documents (e.g., analyses, summaries, etc.) that
incorporate or are based on Confidential Information; provided, however, that
(x) Purchaser’s legal department may retain one copy of such information for
legal compliance purposes only for so long as required by applicable Law or
Purchaser’s bona fide pre-existing record-keeping policy, and
(y) notwithstanding anything else in this Agreement to the contrary, the
confidentiality restrictions imposed hereby shall continue to apply to such
information, and shall survive any termination of this Agreement, for so long as
such information is retained.  At the request of Seller, Purchaser will promptly
certify that it has complied in full with this Section 6.4.

 

Section 6.5                                    Information Rights.  Purchaser
hereby acknowledges the confidentiality obligations imposed on Seller by the GGL
Agreements.  Notwithstanding any other provision of this Agreement, Purchaser
agrees that Seller shall not, and shall not be required to, disclose any
information in violation of its obligations under the GGL Agreements.  Unless
prohibited under the GGL Agreements (as determined in Seller’s sole reasonable
discretion), Seller shall use its reasonable efforts to provide to Purchaser
information reasonably requested by Purchaser that is material to the Beneficial
Interest (it being understood that Seller shall not be required to undertake
litigation or incur significant expense pursuant to this Section 6.5).

 

Section 6.6                                    Books and Records.  For
accounting purposes only, each of the Parties will treat the sale and assignment
to Purchaser of the Beneficial Interest pursuant to Section 2.1 as a sale and
assignment on its books and records to the extent permitted under generally
accepted accounting principles in the United States.

 

Section 6.7                                    Public Announcement.

 

(a)                       On the date of execution of this Agreement or such
later date as is mutually agreed by the Parties (the “Announcement Date”), the
Parties shall release the mutually agreed upon press release attached as
Exhibit A hereto announcing the Transactions.  Upon the occurrence of the
Closing, the Parties shall release a mutually agreed upon press release
announcing the closing of the Transactions.  These press releases may be
modified after the date of this Agreement by the mutual written consent of both
Parties.

 

(b)                       Except as required by applicable Law and subject to
the final two (2) sentences of this Section 6.7(b), neither Party will make any
public announcement of any information regarding this Agreement without the
prior written approval of the other Party, which approval shall not be
unreasonably withheld, conditioned or delayed; provided that the foregoing
restriction shall not restrict Seller from making any public announcement of any

 

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information regarding the Royalty Interest Products.  Once any statement is
approved for disclosure by the Parties or information is otherwise made public
in accordance with the preceding sentence, either Party may make a subsequent
public disclosure of the contents of such statement without further approval of
the other Party.  Notwithstanding the foregoing, within sixty (60) days
following the Closing, appropriate representatives of the Parties will meet and
agree upon a process and principles for reaching timely consensus on how the
Parties will make public disclosure concerning this Agreement.

 

Section 6.8                                    Required Shareholder Approval.

 

(a)                       Within ten (10) days of the Announcement Date,
Purchaser shall (i) give notice in compliance with applicable Law and otherwise
in a form to be reasonably agreed by the Parties, of the extraordinary general
meeting of its shareholders to be held to approve the Transactions (the “EGM”)
to all shareholders of Purchaser entitled to such notice, (ii) distribute the
documents required in connection with the EGM to its shareholders, in a form to
be reasonably agreed by the Parties (the “EGM Documents”), and (iii) promptly
take any other actions necessary to comply with applicable Law to convene the
EGM and conduct a valid shareholder vote within thirty-five (35) days of the
Announcement Date (the “Meeting Deadline”).  To the extent that Purchaser
proposes to distribute any other documents or make any other communications to
its shareholders with respect to the Transactions, Purchaser shall first provide
copies thereof to Seller for review and approval, such approval not to be
unreasonably withheld or delayed.

 

(b)                       Purchaser confirms and undertakes that the EGM
Documents and any other documentation with disclosure in respect of the merits
of the Transactions sent to Purchaser’s shareholders in connection with the
Transactions will contain a recommendation from Purchaser’s board of directors
to such shareholders to vote in favor of the Transactions and such
recommendation shall not be withdrawn, modified or altered in any way without
Seller’s prior written consent.

 

(c)                        Following distribution of the EGM Documents, the EGM
shall be held on a date prior to the Meeting Deadline to be reasonably agreed by
the Parties, subject to the requirements of  applicable Law.  Purchaser shall
not postpone or delay the EGM or the shareholder vote for any reason without
Seller’s prior written consent.

 

Section 6.9                                    Royalty Pharma Offer

 

(a)                       To the extent permitted by Law, Purchaser shall give
Seller reasonable prior written notice of any proposed discussion or
correspondence between it or its representatives with the Irish Takeover Panel
with respect to the Transactions and shall give Seller the opportunity to
participate in any such proposed discussion or comment on the correspondence.

 

(b)                       Purchaser agrees to complete the Transactions without
the need for the approval of its shareholders if the offer period in respect of
the offer by Royalty Pharma (to be made through Echo Pharma Acquisition Limited)
for Purchaser announced on April 15, 2013

 

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pursuant to Rule 2.5 of the Irish Takeover Rules ends or Purchaser is not
otherwise required to seek shareholder approval of the Transactions.

 

Section 6.10                             Reasonable Best Efforts.  The Parties
hereto will use their respective reasonable best efforts to consummate and make
effective the Transactions and to cause the conditions to the Closing set forth
herein to be satisfied, including (a) the obtaining of all necessary actions or
non-actions, consents and approvals from Governmental Authorities or other
Persons necessary in connection with the consummation of the Transactions,
including the shareholder vote with respect to the Required Shareholder
Approval, and the making of all necessary registrations and filings (including
filings with Governmental Authorities, if any) and the taking of all reasonable
steps as may be necessary to obtain an approval from, or to avoid an action or
proceeding by, any Governmental Authority or other Persons necessary in
connection with the consummation of the Transactions, provided that neither
Party shall seek or obtain, or be obligated to seek or obtain, any consent or
approval under any GGL Agreement, (b) the defending of any lawsuits or other
legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the Transactions, performed or consummated by
such Party in accordance with the terms and conditions of this Agreement,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Authority vacated or reversed, and (c) the execution
and delivery of any additional instruments necessary to consummate the
Transactions.

 

Section 6.11                             UCC Matters.  The Seller shall file and
maintain in effect all UCC filings, and shall take such other actions under the
UCC, as may be necessary to protect the validity and perfection of Newco’s
Assignment Interest under the UCC.  The Seller will not change its location
(within the meaning of Sections 9-301 and 9-307 of the applicable UCC) or its
legal name without at least ten (10) days’ prior written notice to the
Purchaser.  In the event that the Seller desires to so change its location or
change its legal name, the Seller will make any required filings and will
deliver to the Purchaser copies of all such required filings with the filing
information duly noted thereon by the office in which such filings were made.

 

Section 6.12                             Royalty Interest Disclosures.  Seller
shall comply with its obligations under applicable Law to make prompt disclosure
to the public of material information concerning the Royalty Interest.

 

Section 6.13                             Minimum Seller Percentage of Royalty
Interest.  Seller hereby agrees that, with respect to each of the BREO/RELVAR/VI
Monotherapy Royalty Interest and the ANORO Royalty Interest, during the Holding
Period, either (x) Seller and its Affiliates or (y) the Applicable Successor of
Seller and its Affiliates, shall hold, in the aggregate, the Minimum Percentage
of such Royalty Interest; provided, however, that in the event Seller or an
Applicable Successor is acquired (or all or substantially all of the assets of
Seller or such Applicable Successor are acquired), then, in each case, the
obligations under this Section 6.13 shall apply to such acquiror (provided that,
for purposes of this Section 6.13, such acquiror may take into account the
holding period of its predecessors-in-interest).  For the avoidance of doubt,
nothing in this Section 6.13 shall restrict the rights of Seller, its Affiliates
or an Applicable Successor to pledge, encumber or otherwise grant a lien or
security interest over all or any portion of the Royalty Interest (other than
the Assignment Interest) to a lender in connection with the bona fide borrowing
of money by Seller or its Affiliates or such Applicable Successor from such
lender

 

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(other than a monetization or other transaction designed to hedge or transfer
the economic interest in the Minimum Percentage of the Royalty Interest that
Seller, its Affiliates or any such Applicable Successor may be required to hold
at such time pursuant to this Section 6.13).

 

Section 6.14                             Non-Cash Consideration.  In the event a
Royalty Interest is paid other than in cash, Seller shall pay to the Account an
amount in cash equal to the fair market value, as reasonably determined by a
third party mutually agreed by Purchaser and Seller, of the Percentage of such
non-cash consideration as promptly as reasonably practicable following the
determination of the fair market value of such non-cash consideration.

 

Section 6.15                             Bankruptcy.

 

(a)                       Seller shall, during the term of the Trust, cause
(i) Newco’s organizational documents to include the provisions substantially
similar to the provisions set forth in Exhibit F hereto, and (ii) Delaware Sub’s
limited liability agreement to be substantially in the form attached hereto as
Exhibit G.

 

(b)                       Seller agrees to cause Newco, during the term of the
Trust, to:

 

(i)             keep proper books of account in accordance with its obligations
under English law;

 

(ii)          maintain its registered office in the United Kingdom, and not to
establish a branch, agency or place of business or register as a partnership,
company or body corporate within the United States or any other country or
jurisdiction other than the United Kingdom;

 

(iii)       do all such things as are necessary to maintain its limited
liability partnership existence;

 

(iv)      not:

 

(1)                     amend the Trust Agreement or the Assignment Agreement;

 

(2)                     incur any indebtedness for borrowed money;

 

(3)                     amend its partnership agreement in a manner adverse to
Purchaser;

 

(4)                     unless required by applicable Law, have any employees
(for the avoidance of doubt, the directors of Newco do not constitute
employees);

 

(5)                     enter into any reconstruction, amalgamation, merger or
consolidation or take any voluntary steps with a view to its winding-up;

 

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(6)                     otherwise than as contemplated in the Transaction
Documents, release from or terminate the appointment of the Account Bank (as
that term is defined in the Trust Agreement); or

 

(v)         subject to any requirement under applicable Law to maintain a
registered office, enter into any lease for, or own, any real property.

 

(c)                        Seller agrees to cause Delaware Sub, during the term
of the Trust, to:

 

(i)             hold itself out to the public and all other Persons as a legal
entity separate from the members and any other person and conduct its own
business in its own name and require that all full-time employees of Delaware
Sub, if any, identify themselves as such and not as employees of Seller or any
of its subsidiaries;

 

(ii)          allocate fairly and reasonably any taxes and any overhead expenses
that are shared with an affiliate, including for shared office space and for
services performed by an employee of an Affiliate;

 

(iii)       use separate stationery, invoices and checks bearing its own name;

 

(iv)      conduct all transactions with Seller and each such subsidiary strictly
on an arm’s-length basis;

 

(v)         at all times have a board of managers and not less than two
independent managers, each of who (A) (1) has prior experience as an independent
director, independent manager or independent member with at least three years of
employment experience with one or more entities that provide, in the ordinary
course of their respective businesses, advisory, management or placement
services to issuers of securitization or structured finance instruments,
agreements or securities and (2) is provided by CT Corporation, Corporation
Service Company, National Registered Agents, Inc., Wilmington Trust Company SP
Services, Inc., Stewart Management Company, Lord Securities Corporation or, if
none of those companies is then providing professional Independent Managers,
another nationally-recognized company reasonably approved by Seller and by the
Purchaser, in each case that is not an Affiliate of Delaware Sub and that
provides professional Independent Managers and other corporate services in the
ordinary course of its business, (B) is not, and has not been for a period of
five years prior to his or her appointment as an independent manager of Delaware
Sub:  (1) a stockholder (whether direct, indirect or beneficial), counterparty
under a contract for commercial services, advisor or supplier of Seller or any
of its Affiliates (the “Parent Group”), (2) a director, officer, employee,
partner, attorney or consultant of the Parent Group, (3) a person related to any
person referred to in clauses (1) or (2) above, (4) a person or other entity
controlling or under common control with any such stockholder, partner,
counterparty under a contract for

 

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commercial services, supplier, employee, officer or director or (5) a trustee,
conservator or receiver for any member of the Parent Group and (D) shall not at
any time serve as a trustee in bankruptcy for Delaware Sub, Seller or any
Affiliate thereof (each such individual meeting the requirements set forth
above, the “Independent Manager”), and insure that (v) no resignation or removal
of an Independent Manager shall be effective until (1) Delaware Sub has provided
Purchaser and Purchaser with two Business Days’ prior written notice of such
resignation or removal, and (2) a successor Independent Manager is appointed and
such successor shall have accepted his or her appointment as an Independent
Manager by a written instrument, (w) at least two members of Delaware Sub’s
board of managers shall be Independent Managers, (x) Delaware Sub’s board of
managers shall not approve, or take any other action to cause the filing of, a
voluntary bankruptcy petition with respect to Delaware Sub or consent to an
involuntary bankruptcy petition with respect to Delaware Sub unless a unanimous
vote of Delaware Sub’s board of managers (which vote shall include the
affirmative vote of the Independent Managers) shall approve the taking of such
action in writing prior to the taking of such action, (y) Delaware Sub’s board
of managers shall not vote on any matter requiring the vote of its Independent
Managers under its limited liability company agreement unless and until each
Independent Manager is then serving on Delaware Sub’s board of managers and
(z) the provisions requiring Independent Managers and the provisions described
in clauses (x) and (y) of this paragraph (v) cannot be amended without the prior
written consent of Seller and Purchaser (for the avoidance of doubt, the
Delaware Sub is permitted to have as many additional managers as Seller may
determine in its sole and absolute discretion);

 

(vi)                observe all organizational formalities as a distinct entity,
and ensure that all actions relating to (A) the dissolution or liquidation of
Delaware Sub or (B) the initiation of, participation in, acquiescence in or
consent to any bankruptcy, insolvency, reorganization or similar proceeding
involving Delaware Sub, are duly authorized by unanimous vote of its managers
(including the Independent Managers);

 

(vii)             maintain Delaware Sub’s books, records and bank accounts
separate from those of Seller and each other subsidiary of Seller and otherwise
in such a manner so that such books and records are readily identifiable as its
own assets rather than assets of Seller or any such subsidiary;

 

(viii)          maintain separate financial statements, showing its assets and
liabilities separate and apart from those of any other person and not have its
assets listed on any financial statement of any other person; provided, however,
that Delaware Sub’s assets may be included in a consolidated financial statement
of its Affiliates; provided that (i) appropriate notation shall be made on such
consolidated financial statements to indicate the separateness of Delaware Sub
from such Affiliates and to indicate that Delaware Sub’s assets and credit are
not available to satisfy the debts and other obligations of such Affiliates or
any

 

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other company and (ii) such assets shall also be listed on Delaware Sub’s own
separate balance sheet;

 

(ix)      except as specifically permitted herein or in the Transaction
Documents, not commingle its assets with assets of any other person;

 

(x)         pay all of Delaware Sub’s expenses and liabilities out of its own
funds;

 

(xi)      except as otherwise provided herein, maintain its certificate of
formation and limited liability company agreement in conformity with the
Transaction Documents, such that it does not amend, restate, supplement or
otherwise modify its certificate of formation and limited liability company
agreement in any respect that would impair its ability to comply with the terms
or provisions of any of the Transaction Documents;

 

(xii)   maintain its separateness such that it does not merge or consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, and except as otherwise contemplated
herein) all or substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any Person,
nor at any time create, have, acquire, maintain or hold any interest in any
subsidiary; and

 

(xiii)   maintain at all times adequate capital in light of its contemplated
business operations and liabilities and refrain from making any distributions or
other payments in respect of its membership interests (including any repurchase
of membership interests or return of capital) that would cause it to have
inadequate capital.

 

Section 6.16                             Compliance with Trust Agreement. 
Purchaser shall not, and shall instruct the Trustee not to, request any
information regarding the payments made into the Account before the time
specified in Section 2.5 of the Trust Agreement.

 

TERM AND TERMINATION

 

Section 7.1                                    Term.  The term of this Agreement
shall commence on the date hereof and end, with respect to each Royalty Interest
Product, upon expiration or termination (including any early termination) of the
Royalty Interest Term with respect to such Royalty Interest Product (the
“Term”).

 

Section 7.2                                    Termination Prior to Closing.
This Agreement may be terminated and the Transactions abandoned prior to the
Closing:

 

(a)                       by Seller if the condition in Section 3.3(a)(ii) shall
have become incapable of fulfillment, and shall not have been waived by Seller;
provided, that, Seller may

 

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only seek termination pursuant to this Section 7.2(a), if Seller has not
breached in any material respect its representations and warranties or covenants
in this Agreement, including, without limitation, its obligations under
Section 6.10;

 

(b)                       by Seller if the Required Shareholder Approval is not
obtained as required by the terms and conditions of this Agreement by the
Meeting Deadline or at the EGM or if the Closing has not occurred by the Meeting
Deadline and the conditions set forth in in Section 3.3(b)(i) are not then
satisfied;

 

(c)                        by Seller if the EGM is not held before the Meeting
Deadline or Purchaser otherwise breaches its obligations under Section 6.8;

 

(d)                       subject to Purchaser’s compliance with
Section 7.3(b)(ii), by Purchaser if the condition in Section 3.3(a)(ii) shall
have become incapable of fulfillment or if the Required Shareholder Approval is
not obtained at the EGM, and, in each case, such condition shall not have been
waived by Purchaser; provided, that, Purchaser may only seek termination
pursuant to this Section 7.2(d), if Purchaser has not breached in any material
respect its representations and warranties or covenants in this Agreement,
including, without limitation, its obligations under Sections 6.8 and 6.10; or

 

(e)                        by Purchaser if the Closing has not occurred by the
Meeting Deadline and the conditions set forth in Section 3.3(c) are not then
satisfied.

 

In the event of termination by Seller or Purchaser pursuant to this Section 7.2,
written notice thereof shall forthwith be given to the other and this Agreement
shall be terminated, without further action by any Party.

 

Section 7.3                                    Effect of Termination.

 

(a)                       If this Agreement is terminated and the Transactions
are abandoned as described in Section 7.2, this Agreement shall be of no further
force and effect, except for the provisions of Section 6.4 (Confidentiality),
this Section 7.3 and 0.  Notwithstanding the foregoing, nothing in this
Section 7.3 shall be deemed to release any Party from any liability for any
prior breach by such Party of the terms and conditions of this Agreement or to
impair the right of any Party to compel specific performance by the other Party
of its obligations under this Agreement.

 

(b)                       If this Agreement is terminated pursuant to
Section 7.2, Purchaser shall pay to Seller Ten Million United States Dollars
(US$10,000,000) by wire transfer of immediately available funds to the bank
account notified by Seller to Purchaser in writing: (i) if this Agreement is
terminated pursuant to Section 7.2(a), 7.2(b) or 7.2(c), within two (2) Business
Days of such termination or (ii) if terminated pursuant to Section 7.2(d) (other
than due to the condition in Section 3.3(a)(ii) having become incapable of
fulfillment in connection with a Specified Claim), contemporaneously with such
termination.

 

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INDEMNIFICATION

 

Section 8.1                                    Indemnification by Seller. 
Subject to the terms and conditions of this Article VIII, Seller shall indemnify
Purchaser, its Affiliates and each of their respective officers, directors,
managers, agents and representatives (collectively “Purchaser Indemnitees”) from
and against any and all direct damages, losses, claims, costs, liabilities,
demands or expenses (including reasonable attorneys’ fees and expenses in
connection with any action, suit or proceeding) (collectively, “Losses”)
suffered or incurred by any such Purchaser Indemnitee arising from:

 

(a)                       any breach of any representation or warranty made by
Seller in this Agreement (provided, however, that for purposes of determining
whether a breach of the representations and warranties set forth in Sections
4.1, 4.3, 4.4, 4.5(a), 4.5(b), 4.5(d)(i) and 4.7 has occurred for purposes of
this Section 8.1(a) only, a violation, conflict, breach, default, failure or the
existence of a state of facts or circumstances shall be deemed to be material or
to have a Seller Material Adverse Effect if it changes the royalty rate payable
in respect of the Royalty Interest Products in a manner adverse to Purchaser);
and

 

(b)                       any breach of any covenant of Seller contained in this
Agreement.

 

Section 8.2                                    Indemnification by Purchaser. 
Subject to the terms and conditions of this Article VIII, Purchaser shall
indemnify Seller, its Affiliates and each of their respective officers,
directors, managers, agents and representatives (collectively “Seller
Indemnitees”) from and against any and all Losses suffered or incurred by any
such Seller Indemnitee arising from:

 

(a)                       any breach of any representation or warranty made by
Purchaser in this Agreement; and

 

(b)                       any breach of any covenant of Purchaser contained in
this Agreement.

 

Section 8.3                                    Indemnification Procedure.

 

(a)                       Third-Party Claims.

 

(i)             Notice of Third-Party Claims. A Party seeking indemnification
(the “Indemnified Party”) with respect to any claim or demand made by any Person
against the Indemnified Party (a “Third-Party Claim”) shall promptly notify the
other Party (the “Indemnifying Party”) in writing (including in such notice a
brief description of the claim for indemnification and the Loss, including
damages sought or estimated, to the extent actually known or reasonably capable
of estimation by the Indemnified Party) of any claim for indemnification,
provided that failure to give such notice shall not relieve the Indemnifying
Party of any liability hereunder except to the extent the Indemnifying Party is
materially prejudiced by such failure.

 

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(ii)          Defense of Third-Party Claims.  The Indemnifying Party shall be
entitled to participate in the defense of the Third-Party Claim and, if it so
chooses, to assume the defense thereof, at its own expense, with counsel
selected by the Indemnifying Party; provided that such counsel is not reasonably
objected to by the Indemnified Party.  If the Indemnifying Party assumes the
defense thereof, the Indemnifying Party (1) shall not be liable to the
Indemnified Party for legal expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof, and (2) shall permit the
Indemnified Party to participate in, but not control, the defense of any such
action or suit through counsel chosen by the Indemnified Party, provided that
such counsel is not reasonably objected to by the Indemnifying Party and the
fees and expenses of such counsel shall be borne by the Indemnified Party.  The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnified Party in the defense of a Third-Party Claim for any period
during which the Indemnifying Party has not assumed the defense thereof (other
than during the period prior to the time the Indemnified Party shall have
notified the Indemnifying Party of such Third-Party Claim).

 

(iii)       Cooperation.  The Indemnified Party shall, if requested by the
Indemnifying Party, give reasonable assistance to  and cooperate with the
Indemnifying Party in defense of any claim.  The Indemnifying Party shall
reimburse the Indemnified Party for any Third Party reasonable legal expenses
directly incurred from providing such assistance and cooperation.  Such
assistance and cooperation shall include (1) the retention of and the provision
to the Indemnifying Party of records and information that are reasonably
relevant to such Third-Party Claim and (2) the making available of employees on
a mutually convenient basis for providing additional information and explanation
of any material provided hereunder.  The Indemnifying Party shall have the right
to consent to the entry of judgment with respect to, or otherwise settle, a
Third-Party Claim with the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld; provided that the Indemnified Party
may withhold its consent if any such judgment or settlement imposes an
unreimbursed monetary or continuing non-monetary obligation on such Indemnified
Party or does not include an unconditional release of such Indemnified Party and
its Affiliates from all liability in respect of claims that are the subject
matter of the indemnified claim.  Regardless of whether the Indemnifying Party
shall have assumed defense of a Third-Party Claim, the Indemnified Party shall
not be entitled to be indemnified pursuant to this Article VIII if the
Indemnified Party shall settle such Third-Party Claim without the prior written
consent of the Indemnifying Party.

 

(b)                       Claims by a Party.  In order for an Indemnified Party
to be entitled to any indemnification under this Article VIII in respect of
Losses that do not arise out of or involve a Third Party Claim, the Indemnified
Party must notify the Indemnifying Party promptly in writing (including in such
notice a brief description of the claim for indemnification and the Loss,
including damages sought or estimated, to the extent actually known or
reasonably capable of estimation by the Indemnified Party); provided, that, the
failure to promptly provide such

 

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notice shall not affect the indemnification provided under this Article VIII
except to the extent that the Indemnifying Party has been actually prejudiced as
a result of such failure.

 

Section 8.4                                    Claims Period for Breach of
Representations and Warranties.  The representations and warranties contained in
this Agreement shall not survive the Closing; however, claims for breach of the:
(a) representations and warranties contained in this Agreement (other than any
claims for breach of the Fundamental Representations) may be made at any time
following the Closing and up to and including the date that is the first
anniversary of the Closing Date; and (b) Fundamental Representations may be made
at any time following the Closing and prior to the expiration of the applicable
statute of limitations.  In no event shall any Party hereto have any liability
for any breach of a representation or warranty set forth in this Agreement
unless the other Party hereto shall have delivered a notice to such Party,
pursuant to Section 8.3 prior to the deadline applicable to the making of such
claim set forth in the preceding sentence.

 

Section 8.5                                    Limitations on Indemnification.

 

(a)                       Notwithstanding anything herein to the contrary,
Seller shall have no liability to Purchaser under this Agreement for any action
taken by Seller or any failure by Seller to take any action pursuant to
Article VI  in compliance with any written instructions of Purchaser or with the
prior written consent of Purchaser.

 

(b)                       Seller or Purchaser, as applicable, shall not be
obligated to indemnify any Purchaser Indemnitee or Seller Indemnitee, as
applicable, if the Losses incurred by such Person arise from the gross
negligence, fraud or willful misconduct of Purchaser or Seller, as applicable,
or their respective Affiliates, officers, directors, managers, agents and
representatives (acting in their capacity as such).

 

(c)                        Notwithstanding anything in this Agreement to the
contrary, Seller shall not have any liability under: (i) Section 8.1 with
respect to any individual item (or any series of related items) if the Loss
related thereto is less than US$750,000, and such items shall not be aggregated
for purposes of Section 8.5(c)(ii); (ii) Section 8.1(a) unless the aggregate
liability for all Losses suffered by the Purchaser Indemnitees thereunder
exceeds US$15,000,000, and then only to the extent of such excess; or
(iii) Section 8.1 (except to the extent of any amounts Seller fails to pay or
have paid Purchaser in breach of Section 6.1 or Section 6.2(a) or for breach of
Section 6.1(g)) in excess of the amount by which (x) the Purchase Price exceeds
(y) the aggregate amount of payments made to Purchaser in respect of the
Beneficial Interest theretofore received or receivable by Purchaser, in the
aggregate; provided, however, that the cap set forth in clause (iii) shall not
be less than Two Hundred Million Dollars (US$200,000,000) except with respect to
any breach for which indemnification is sought that arises from or relates to a
Specified Claim.  Notwithstanding anything to the contrary in any Transaction
Document, for any Loss for which Seller must indemnify any Purchaser Indemnitee
under this Agreement, the amount paid by Seller shall count toward the liability
cap under both this Agreement and under the Assignment Agreement and in no event
shall Seller have any liability for Losses under the Assignment Agreement
arising out of the same matter or set of facts or circumstances as any claims
made, or for which a claim could be made, under this Agreement.

 

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(d)                       Notwithstanding anything in this Agreement to the
contrary, Purchaser shall not have any liability under: (i) Section 8.2 with
respect to any individual item (or any series of related items) if the Loss
related thereto is less than US$750,000, and such items shall not be aggregated
for purposes of Section 8.5(d)(ii); (ii) Section 8.2(a) unless the aggregate
liability for all Losses suffered by the Seller Indemnitees thereunder exceeds
US$15,000,000, and then only to the extent of such excess; or (iii) after the
Closing, Section 8.2 in excess of US$1,000,000,000.

 

(e)                        The amount of any Losses payable under this
Article VIII by an Indemnifying Party shall be reduced by the amount, if any, of
any tax benefit available to the Indemnified Party by reason of such Losses or
the payment thereof and by any insurance proceeds or other recovery from a Third
Party received by the Indemnified Party (net of any expenses incurred by such
Indemnified Party in procuring such recovery) in connection with the matter out
of which such Losses arise.  If the Indemnified Party receives any proceeds
subsequent to an indemnification payment by the Indemnifying Party, then such
Indemnified Party shall reimburse the Indemnifying Party as promptly as
practicable thereafter for any payment made by such Indemnifying Party pursuant
to such Indemnifying Party’s indemnification obligations hereunder up to the
amount received pursuant to this Article VIII by the Indemnified Party from such
Indemnifying Party (net of any expenses incurred by such Indemnified Party in
procuring such recovery).

 

(f)                         For purposes of determining the amount of any Losses
payable pursuant to Sections 8.1 or 8.2 (but not, for the avoidance of doubt,
for the purposes of determining the existence of a breach), any qualification as
to materiality, Seller Material Adverse Effect or Purchaser Material Adverse
Effect contained in the applicable underlying representation or warranty shall
be disregarded.

 

Section 8.6                                    Exclusive Remedy. 
Notwithstanding anything to the contrary in the Transaction Documents the
Parties hereto acknowledge and agree that this Article VIII (including
Section 8.4 and Section 8.5) shall provide the Parties’ sole and exclusive
remedy with respect to any matter or claim arising out of, relating to, or in
connection with, the Transaction Documents and the Transactions, except (i) for
fraud or willful misconduct, (ii) injunctive relief or claims for specific
performance pursuant to Section 9.4 (Specific Performance) and (iii) Purchaser’s
indemnification obligation pursuant to the last sentence of Section 9.1(b).

 

Section 8.7                                    Disclaimer of Consequential
Damages.

 

(a)                       EXCEPT WITH RESPECT TO (i) A PARTY’S FRAUD OR WILLFUL
MISCONDUCT, OR (ii) LOSSES ACTUALLY PAID TO A THIRD PARTY PURSUANT TO A
THIRD-PARTY CLAIM IN ACCORDANCE WITH ARTICLE VIII, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR
ANY THIRD PARTIES FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES, INVESTMENT LOSSES, LOST PROFITS, LOSS OF DATA, OR LOSS OF USE
ARISING IN ANY MANNER OUT OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS
HOWEVER CAUSED WHETHER BY NEGLIGENCE, BREACH OF CONTRACT, TORT OR OTHERWISE AND
WHETHER OR NOT SUCH PARTY HAS

 

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BEEN ADVISED OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF ANY SUCH
DAMAGES.

 

(b)                       THE PARTIES HAVE AGREED THAT THE LIABILITY LIMITATIONS
SPECIFIED IN SECTION 8.5 AND THIS SECTION 8.7 WILL SURVIVE AND APPLY EVEN IF ANY
LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED ITS ESSENTIAL
PURPOSE.

 

MISCELLANEOUS

 

Section 9.1                                    Assignment.

 

(a)                       Assignment Prior to Closing.  Prior to the Closing,
neither Party may assign or otherwise transfer this Agreement, in whole or in
part, without the prior written consent of the other Party, except that
(i) Seller may assign this Agreement in its entirety to an Affiliate of Seller
to which Seller’s interests under the GGL Agreements may be assigned for so long
as such Affiliate remains an Affiliate of Seller and if Seller guarantees the
performance of this Agreement by such Affiliate; (ii) Purchaser may assign this
Agreement in its entirety to an Affiliate of Purchaser for so long as such
Affiliate remains an Affiliate of Purchaser and if Purchaser guarantees the
performance of this Agreement by such Affiliate, and (iii) each of Seller and
Purchaser may and shall assign this Agreement in its entirety to a successor to
all or substantially all of the assets of such Party whether by merger, sale of
stock, sale of assets or other similar transaction.

 

(b)                       Assignment Post-Closing.  Following the Closing,
(i) Seller may not assign or otherwise transfer this Agreement without the prior
written consent of Purchaser except that Seller may assign this Agreement, in
whole or in part, to (A) an acquirer of Seller or a successor to all or
substantially all of the assets of Seller, whether by merger, sale of stock,
sale of assets or other similar transaction, (B) with respect to any Royalty
Interest Product, an Applicable Successor of Seller relating to such Royalty
Interest Product, whether by merger, sale of stock, sale of assets or other
similar transaction or (C) an Affiliate of Seller for so long as such Affiliate
remains an Affiliate of Seller and if Seller guarantees the performance of this
Agreement by such Affiliate; (ii) Purchaser may not assign or transfer this
Agreement or the Beneficial Interest, in whole or in part, without the prior
written consent of Seller except that Purchaser may assign this Agreement in its
entirety to (A) an Affiliate of Purchaser for so long as such Affiliate remains
an Affiliate of Purchaser and if Purchaser guarantees the performance of this
Agreement by such Affiliate or (B) a Third Party that has acquired Purchaser or
all or substantially all of the business or assets of Purchaser; and
(iii) Purchaser may pledge, mortgage or otherwise grant a security interest over
all or any part of the Beneficial Interest to a Third Party lender in connection
with the borrowing of money by Purchaser from such Third Party lender without
the consent of Seller, provided that (A) Purchaser shall remain obligated to
comply with all of its obligations under this Agreement and (B) such Third Party
assignee agrees in writing to comply with this Agreement, including the
confidentiality obligations set forth in Section 6.4 of this Agreement.  For the
avoidance of doubt, the restrictions on assignment contained in this
Section 9.1(b)(ii) shall not restrict Purchaser from selling a participation
interest

 

28

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in the Beneficial Interest as, if and when received, it being understood and
agreed that such sale will not involve any assignment or transfer, in whole or
in part, of this Agreement or any rights or obligations under this Agreement and
the purchaser of such an interest will not have any rights to enforce this
Agreement against Seller or Newco, whether directly, as a third party
beneficiary or otherwise and Purchaser shall indemnify and hold harmless Seller
and Newco  from any such claim brought in violation of this provision.

 

(c)                        Seller Corporate Reorganization.  Notwithstanding
anything to the contrary herein, Seller shall be permitted to assign this
Agreement and the rights and obligations hereunder in respect of the MABA ‘081
Royalty Interest, in whole or in part, without Purchaser’s consent, to a Third
Party pursuant to the Seller Corporate Reorganization.

 

(d)                       Successors and Assigns.  Subject to the terms and
conditions of this Section 9.1, this Agreement shall be binding upon and inure
to the benefit of the Parties hereto and their permitted successors and
assigns.  Any purported assignment or other transfer in violation of this
Section 9.1 shall be void ab initio and of no force or effect.

 

Section 9.2                                    Further Assurances.  After the
Closing, from time to time, as and when reasonably requested by any Party, each
Party shall execute and deliver, or cause to be executed and delivered, all such
documents, certificates, agreements and instruments, and shall take, or cause to
be taken, all such further or other actions, as are reasonably necessary and
appropriate to carry out all of the provisions of this Agreement, or to
consummate the Transactions.

 

Section 9.3                                    Notices.  All notices, requests,
demands, consents, waivers or other communications to or from either Party to
the other Party must be in writing and will be deemed to have been given

 

(a)                       upon delivery, including upon confirmation by the
carrier of delivery (which may be in electronic form), if delivered by hand or
mailed via overnight or express mail service or by courier,

 

(b)                       in the case of a fax, when receipt is confirmed by
telephone, reply email or reply fax from the recipient or other fax confirmation
of receipt, or

 

(c)                        in the case of an email, when receipt is confirmed by
telephone or reply email from the recipient,

 

addressed as follows (or to such other address or addresses as the Seller or the
Purchaser may from time to time designate by notice given in accordance with
this Section 9.3:

 

if to Seller:

 

29

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Theravance, Inc.
901 Gateway Boulevard
South San Francisco, CA 94080
Attention of:                          Bradford J. Shafer

Senior Vice President & General Counsel

Fax No.:                                                 (650) 808-6095

E-mail:                                                       
bshafer@theravance.com

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom, LLP
525 University Avenue, Suite 1100
Palo Alto, California 94301
Attention of:                          Amr Razzak; Jose Esteves

Fax No.:                                                 (650) 470-4570; (917)
777-2948

E-Mail:                                                      
amr.razzak@skadden.com; jose.esteves@skadden.com

 

with a copy to:

 

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
1200 Seaport Blvd.
Redwood City, California 94063
Attention of:                          Brooks Stough; David Young

Fax No.:                                                 (650) 321-2800

E-Mail:                                                      
bstough@gunder.com; dyoung@gunder.com

 

if to the Purchaser:

 

Elan Corporation, plc
Treasury Building
Lower Grand Canal Street
Dublin 2, Ireland
Attention of:                          John Given

General Counsel

Fax No.:                                                 +353 1 709 4700

E-mail:                                                       
john.given@elan.com

 

with a copy to:

 

Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, NY  10281
Attention of:                          Christopher Cox

Fax No.:                                                 (212) 504-6666

E-mail:                                                        ccox@cwt.com

 

with a copy to:

 

30

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A&L Goodbody Solicitors
25/28 International Financial Services Centre
North Wall Quay
Dublin 1, Ireland
Attention of:                          Alan Casey

Fax No.:                                                 + 353 1 649 2649

E-mail:                                                       
acasey@algoodbody.com

 

Section 9.4                                    Specific Performance.  Each of
the Parties hereto acknowledges that the other Party may have no adequate remedy
at law if the first Party fails to perform any of its non-monetary obligations
under this Agreement.  In such event, each of the Parties agrees that the other
Party shall have the right, in addition to any other rights it has (whether at
law or in equity), to pursue equitable remedies such as an injunction or
specific performance of this Agreement without necessity of posting any bond or
undertaking in connection therewith.  This remedy is separate and apart from any
other remedy the Parties may have under this Agreement.

 

Section 9.5                                    Title; Headings; Captions.  The
title, headings and captions in this Agreement are included for convenience only
and will not affect the meaning or interpretation of any provision of this
Agreement.

 

Section 9.6                                    Independent Contractors.  The
Parties recognize and agree that each is operating as an independent contractor
and not as an agent or fiduciary of the other.  Notwithstanding any provision of
this Agreement which may indicate otherwise, it is the specific intent of the
Parties that this Agreement and the relationship created hereby is not, nor
shall it be deemed to be, a separate entity, joint venture or partnership or any
similar arrangement, nor shall any master/servant, employer/employee or
principal/agent relationship be created between the Parties.

 

Section 9.7                                    Third-Party Beneficiaries. 
Except to the extent expressly contemplated with respect to Seller Indemnitees
and Purchaser Indemnitees in Article VIII, this Agreement is for the sole
benefit of Seller and Purchaser and their permitted successors and assigns, and
nothing herein expressed or implied shall give or be construed to give to any
Person, other than the parties hereto and such permitted successors and assigns,
any legal or equitable rights hereunder.  Notwithstanding anything herein to the
contrary, with respect to any indemnification claim made pursuant to
Article VIII, Seller or Purchaser shall make such claim on behalf of the
applicable Seller Indemnitee or Purchase Indemnitee, as applicable, and such
Person (unless such Person is Seller or Purchaser, itself) shall not be entitled
to directly make such claim against Purchaser or Seller, as applicable.

 

Section 9.8                                    Entire Agreement.  This
Agreement, along with the Appendices, Exhibits, Schedules, Seller Disclosure
Letter and Purchaser Disclosure Letter and other attachments hereto, sets forth
the entire agreement and understanding between the Parties hereto with respect
to the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings relating to such subject matter.

 

31

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Section 9.9                                    Amendment and Supplementation. 
This Agreement may be amended, modified or supplemented only by a written
agreement signed by both Parties.

 

Section 9.10                             No Waiver.  Any waiver of, or consent
to depart from, the requirements of any provision of this Agreement shall be
effective only if it is in writing and signed by the Party giving it, and only
in the specific instance and for the specific purpose for which it has been
given.  No failure or delay of either Party in exercising any power, right or
remedy under this Agreement will operate as a waiver.  No single or partial
exercise of any power, right or remedy precludes any other or further exercise
of such power, right or remedy or the exercise of any other power, right or
remedy.

 

Section 9.11                             Severability.  If any of the covenants,
agreements or terms of this Agreement is held invalid, illegal or unenforceable,
then it will be deemed severable from the remaining covenants, agreements or
terms of this Agreement and will in no way affect the validity, legality or
enforceability of the remaining Agreement. Upon such determination that any
covenant, agreement or term is invalid, illegal or unenforceable, this Agreement
shall be deemed modified so as to effect the original intent of the Parties as
closely as possible in order that the Transactions be consummated as originally
contemplated to the fullest extent consistent with applicable Law.

 

Section 9.12                             Governing Law.  THIS AGREEMENT AND ALL
ACTIONS, PROCEEDINGS OR COUNTERCLAIMS (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF EXCEPT AS SET FORTH IN
SECTIONS 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

Section 9.13                             Submission to Jurisdiction.  The
parties submit to the exclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York State Court sitting in
New York, New York for purposes of all legal proceedings arising out of or
relating to this Agreement. The parties irrevocably waive, to the fullest extent
they may do so, any objection that they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

 

Section 9.14                             Waiver of Jury Trial.  Each Party
irrevocably waives, to the fullest extent permitted by applicable Law, any and
all right to trial by jury in any legal proceeding directly or indirectly
arising out of or relating to this Agreement or the Transactions.

 

Section 9.15                             Counterparts.  This Agreement may be
executed in any number of counterparts.  Each counterpart will be an original,
and all counterparts will together constitute one and the same instrument. 
Delivery of an executed counterpart via PDF or other electronic delivery shall
be considered the same as delivery of a manually executed counterpart.

 

[Signature Page Follows]

 

32

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IN WITNESS WHEREOF, the Parties hereto have set their hands by their authorized
representatives as of the year and date first indicated above.

 

 

 

THERAVANCE, INC.

 

 

 

 

 

By:

/s/ Rick E Winningham

 

 

Name:

Rick E Winningham

 

 

Title:

Chief Executive Officer

 

 

 

 

 

ELAN CORPORATION PLC

 

 

 

 

 

By:

/s/ William F. Daniel

 

 

Name:

William F. Daniel

 

 

Title:

Executive Vice President and

 

 

 

Secretary

 

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APPENDIX A

 

DEFINED TERMS

 

A.                                    DEFINITIONS.

 

For the purposes of this Agreement, unless otherwise indicated, the following
terms shall have the respective meanings specified below, and grammatical
variations of such terms shall have corresponding meanings:

 

1.                                      “Account” has the meaning set forth in
the Trust Agreement.

 

2.                                      “Affiliate” means, with respect to
either Party, any other Person directly or indirectly controlling, controlled by
or under common control with, such Party.  For the purposes of this definition
“control” means the possession, directly or indirectly, of (a) the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or other equity interest,
representation on its board of directors or body performing similar functions,
by contract or otherwise, together with (b) ownership of the related equity
interest in such Person; and the terms “controlling” and “controlled” have
corollary meanings.

 

3.                                      “Agreement” has the meaning set forth in
the introductory paragraph of this Agreement.

 

4.                                      “Announcement Date” has the meaning set
forth in Section 6.7 of this Agreement.

 

5.                                      “ANORO” means (a) the combination
medicine comprising UMEC with VI, with no other therapeutically active
component, and explicitly excluding either component as a monotherapy, and which
is proposed, as of the date hereof, to be sold under the brand name “ANORO™
ELLIPTA™”, and (b) any and all product improvements, additional claims, line
extensions, dosage changes and alternate delivery systems, in each case, with
respect to only such combination medicine set forth in subsection (a) comprising
UMEC with VI, with no other therapeutically active component (and explicitly
excluding either component as a monotherapy).

 

6.                                      “ANORO Royalty Interest”:

 

(a)                                 Means Seller’s entitlement under the
Collaboration Agreement to receive the following payments during the Royalty
Interest Term, subject to subsections (b), (c) and (d) of this definition:

 

(i)                                     royalty payments on any net sales
worldwide of ANORO by or on behalf of GGL, pursuant to Section 6.3 of the
Collaboration Agreement;

 

(ii)                                  any interest on amounts referred to in
clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the
Collaboration Agreement;

 

A-1

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(iii)                               any Infringement Payments with respect to
ANORO in lieu of the payments referred to in clause (a)(i) immediately above;
and

 

(iv)                              any Other Amounts with respect to ANORO in
lieu of the payments referred to in clause (a)(i) immediately above.

 

(b)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9
of the Collaboration Agreement.  The VI Reverse Milestone Payment Obligation
shall remain the obligation of Seller, and shall not be a reduction, deduction,
offset or exclusion from the royalty payments under subsection (a) above of this
definition.

 

(c)                                        The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to
reduction, deduction, offset and exclusion from such royalties of any
Cost-Sharing Deductions (without double counting).

 

(d)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition does not include
any (i) signing payments (including any signing payments pursuant to
Section 6.1.1 of the Collaboration Agreement), (ii) one-time fees for new
compounds contributed to the collaboration (including any one-time fee payments
from GGL to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration
Agreement), (iii) milestone payments (including any milestone payments pursuant
to Section 6.2 of the Collaboration Agreement), or (iv) any other payments
(other than those expressly identified in subsection (a) above of this
definition), in the case of clauses (i), (ii), (iii) and (iv) of this clause
(d), paid to Seller relating to ANORO.

 

7.                                      “Applicable Successor” means with
respect to Seller and any of its Affiliates,with respect to each Royalty
Interest Product, the assignee or successor-in-interest to all or substantially
all of Seller’s interest under the applicable GGL Agreement with respect to such
Royalty Interest Product (other than GGL).

 

8.                                      “Assignment” has the meaning set forth
in Section 2.1(a)(i) of this Agreement.

 

9.                                      “Assignment Agreement” means the
Assignment Agreement to be entered into on the Closing Date by Seller and Newco
substantially in the form attached hereto as Exhibit D.

 

10.                               “Assignment Interest” means (i) a twenty-one
percent (21%) undivided beneficial interest in the Royalty Interest and (ii) the
assignment of a non-exclusive right to enforce payment in respect thereof under
the GGL Agreements.

 

11.                               “Beneficial Interest” means 100% of the
beneficial interest in the Trust.

 

12.                               “Bill of Sale” means that certain Bill of Sale
substantially in the form attached to this Agreement as Exhibit B.

 

A-2

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13.                               “BREO/RELVAR” means (a) the combination
medicine comprising FF and VI, with no other therapeutically active component,
and explicitly excluding either component as a monotherapy, and which is
proposed, as of the date hereof, to be sold under the brand name “BREO™
ELLIPTA™” in the United States and “RELVAR™ ELLIPTA™” in the European Union and
Japan, and (b) any and all product improvements, additional claims, line
extensions, dosage changes and alternate delivery systems, in each case, with
respect only to such combination medicine set forth in subsection (a) comprising
FF and VI, with no other therapeutically active component (and explicitly
excluding either component as a monotherapy).

 

14.                               “BREO/RELVAR Royalty Interest”:

 

(a)                                       Means Seller’s entitlement under the
Collaboration Agreement to receive the following payments during the Royalty
Interest Term, subject to subsections (b), (c) and (d) of this definition:

 

(i)                                     royalty payments on any net sales
worldwide of BREO/RELVAR by or on behalf of GGL, pursuant to Section 6.3 of the
Collaboration Agreement;

 

(ii)                                  any interest on amounts referred to in
clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the
Collaboration Agreement;

 

(iii)                               any Infringement Payments with respect to
BREO/RELVAR in lieu of the payments referred to in clause (a)(i) immediately
above; and

 

(iv)                              any Other Amounts with respect to BREO/RELVAR
in lieu of the payments referred to in clause (a)(i) immediately above.

 

(b)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9
of the Collaboration Agreement.  The VI Reverse Milestone Payment Obligation
shall remain the obligation of Seller, and shall not be a reduction, deduction,
offset or exclusion from the royalty payments under subsection (a) above of this
definition.

 

(c)                                        The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to
reduction, deduction, offset and exclusion from such royalties of any
Cost-Sharing Deductions (without double counting).

 

(d)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition does not include
any (i) signing payments (including any signing payments pursuant to
Section 6.1.1 of the Collaboration Agreement), (ii) one-time fees for new
compounds contributed to the collaboration (including any one-time fee payments
from GGL to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration
Agreement), (iii) milestone payments (including any milestone payments pursuant
to Section 6.2 of the Collaboration Agreement), or (iv) any other payments
(other than those expressly identified in subsection (a) above of

 

A-3

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this definition), in the case of clauses (i), (ii), (iii) and (iv) of this
clause (d), paid to Seller relating to BREO/RELVAR.

 

15.                               “BREO/RELVAR/VI Monotherapy Royalty Interest”
means the BREO/RELVAR Royalty Interest together with the VI Monotherapy Royalty
Interest.

 

16.                               “Business Day” means any day that is not a
Saturday, Sunday or other day on which banks are required or expressly
authorized to be closed in London, England, New York, New York, San Francisco,
California or Dublin, Ireland.

 

17.                               “Closing” has the meaning set forth in
Section 3.1 of this Agreement.

 

18.                               “Closing Date” has the meaning set forth in
Section 3.1 of this Agreement.

 

19.                               “Collaboration Agreement” means that certain
Collaboration Agreement by and between Theravance, Inc. and Glaxo Group Limited
dated November 14, 2002, as amended from time to time.

 

20.                               “Confidential Information” has the meaning set
forth in Section 6.4(a) of this Agreement.

 

21.                               “Cost-Sharing Deductions” has the meaning set
forth in Section 6.1(e) of this Agreement.

 

22.                               “Declaration of Trust” has the meaning set
forth in Section 2.1(a)(i).

 

23.                               “Delaware Sub” means the general partner of
Newco.

 

24.                               “Delaware Sub Charter Documents” shall have
the meaning set forth in Section 4.1 of this Agreement.

 

25.                               “EGM” has the meaning set forth in
Section 6.8(a).

 

26.                               “EGM Documents” has the meaning set forth in
Section 6.8(a).

 

27.                               “Encumbrance” means any lien, charge, security
interest, mortgage or pledge.

 

28.                               “Excluded Products” means any therapeutically
active component or product, whether as a monotherapy, combination product or
otherwise, and any delivery devices (whether stand-alone or with any one or more
therapeutically active components or products), other than the Royalty Interest
Products.  “Excluded Products” includes, by way of example:

 

(a)                                 UMEC, as a monotherapy or in a combination
product (other than UMEC and VI, with no other therapeutically active
component), including a combination product that includes (i) UMEC, (ii) VI and
(iii) at least one other therapeutically active component;

 

A-4

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(b)                                 FF, as a monotherapy or in a combination
product (other than FF and VI, with no other therapeutically active component),
including a combination product that includes (i) FF, (ii) VI and (iii) at least
one other therapeutically active component;

 

(c)                                  MABA ‘081 other than as a monotherapy
(i.e.  excluding MABA ‘081 in combination with any one or more other
therapeutically active component(s));

 

(d)                                 VI, in any product other than (i) as a
monotherapy, (ii) ANORO and (iii) BREO/RELVAR; and

 

(e)                                  any other therapeutically active component
or product (including a combination product of two or more therapeutically
active components not expressly specified in the definition of each of ANORO,
BREO/RELVAR, MABA ‘081 and VI Monotherapy).

 

29.                               “FF” means the inhaled corticosteroid
fluticasone furoate (with the chemical structure as set forth in Attachment A-1)
or an ester, salt or other noncovalent derivative thereof.

 

30.                               “Fundamental Representations” means the
representations and warranties set forth in Sections 4.1, 4.2, 4.6, 5.1 and 5.2
of this Agreement.

 

31.                               “GGL” means Glaxo Group Limited and, with
respect to any GGL Agreement, any successor in interest under such GGL
Agreement.

 

32.                               “GGL Agreements” means the Collaboration
Agreement and the Strategic Alliance Agreement.

 

33.                               “Governmental Authority” means any United
States (federal, state or local), Irish or other foreign government, or any
governmental, regulatory, judicial or administrative authority, agency or
commission.

 

34.                               “Holding Period” means the eight (8) year
period commencing on the Closing Date.

 

35.                               “Indemnified Party” has the meaning set forth
in Section 8.3(a) of this Agreement.

 

36.                               “Indemnifying Party” has the meaning set forth
in Section 8.3(a) of this Agreement.

 

37.                               “Infringement Payment” means any net
collections, recoveries, damages, awards or settlement payments that are
actually paid to Seller as a result of any settlement discussion, litigation,
arbitration or other legal proceeding brought against third-party infringers by
Seller pursuant to Section 13 of the Collaboration Agreement or Section 13 of
Strategic Alliance Agreement, as applicable.

 

38.                               “Initial Transactions” means the Assignment
and the Declaration of Trust.

 

39.                               “Intellectual Property” means all worldwide
intellectual property and rights arising from or in respect of the following:
all (a) inventions, discoveries, industrial designs,

 

A-5

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business methods, patents and patent applications (including provisional and
Patent Cooperation Treaty applications), including continuations, divisionals,
continuations-in-part, reexaminations and reissues, extensions, renewals and any
patents that may be issued with respect to the foregoing; (b) trademarks,
service marks, certification marks, collective marks, trade names, business
names, assumed names, d/b/a’s, fictitious names, brand names, trade dress,
logos, symbols, Internet domain names and corporate names, and general
intangibles of a like nature and other indicia of origin or quality, whether
registered, unregistered or arising by Law, and all applications, registrations,
and renewals for any of the foregoing, together with the goodwill associated
with and symbolized by each of the foregoing; (c) published and unpublished
works of authorship in any medium, whether copyrightable or not (including
databases and other compilations of information, computer software, source code,
object code, algorithms, and other similar materials and Internet website
content), copyrights and moral rights therein and thereto, and registrations and
applications therefor, and all issuances, renewals, extensions, restorations and
reversions thereof; and (d) confidential and proprietary information, trade
secrets, and know-how, including methods, processes, business plans, schematics,
concepts, software and databases (including source code, object code and
algorithms), formulae, drawings, prototypes, models, designs, devices,
technology, research and development and customer information and lists.

 

40.                               “Irish Takeover Rules” means the Rules in the
Takeover Panel Act, 1997, 2007 (as amended).

 

41.                               “Key Patents” has the meaning set forth in
Section 4.7(a) of this Agreement.

 

42.                               “Knowledge of Purchaser” means the knowledge,
after reasonable inquiry, of the following individuals:  Kelly Martin, John
Given, Liam Daniel and Nigel Clerkin.

 

43.                               “Knowledge of Seller” means the knowledge,
after reasonable inquiry, of the following individuals:  Rick E Winningham,
Michael Aguiar, Brad Shafer and Jeff Hagenah.

 

44.                               “Law” means any and all domestic (federal,
state or local) or foreign laws, rules, regulations, statutes, orders,
ordinance, judgments or decrees or other pronouncements by any Governmental
Authority.

 

45.                               “Lock Box Account” means a lock box account
that Seller may elect to establish from time to time, to receive the Royalty
Interest payments from GGL, and from which the Beneficial Interest in Royalty
Interest payments received would be paid into the Account.

 

46.                               “Lock Box Arrangement” means the contractual
terms and conditions that govern the Lock Box Account.

 

47.                               “Losses” has the meaning set forth in
Section 8.1 of this Agreement.

 

48.                               “MABA” means a bifunctional muscarinic
antagonist-beta2 agonist.

 

49.                               “MABA ‘081” means (a) the MABA compound known
as GSK961081, solely as a monotherapy (i.e., excluding GSK961081 in combination
with any one or more other

 

A-6

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therapeutically active component(s)), and (b) any and all product improvements,
additional claims, line extensions, dosage changes and alternate delivery
systems, in each case, with respect to only GSK961081 solely as a monotherapy
(i.e., excluding GSK961081 in combination with any one or more other
therapeutically active component(s)).

 

50.                               “MABA ‘081 Royalty Interest”:

 

(a)                                 Means Seller’s entitlement under the
Strategic Alliance Agreement to receive the following payments during the
Royalty Interest Term, subject to subsections (b), (c) and (d) of this
definition:

 

(i)                                     royalty payments on any net sales
worldwide of MABA ‘081 by or on behalf of GGL, pursuant to Section 6.3 of the
Strategic Alliance Agreement;

 

(ii)                                  any interest on amounts referred to in
clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the
Strategic Alliance Agreement;

 

(iii)                               any Infringement Payments with respect to
MABA ‘081 in lieu of the payments referred to in clause (a)(i) immediately
above;

 

(iv)                              any Other Amounts with respect to MABA ‘081 in
lieu of the payments referred to in clause (a)(i) immediately above.

 

(b)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets  in Sections 6.3, 6.4.1 and 6.9 of the
Strategic Alliance Agreement.

 

(c)                                  The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to reduction,
deduction, offset and exclusion from such royalties of any Cost-Sharing
Deductions (without double counting).

 

(d)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition does not include any
(i) signing payments (including any signing payments pursuant to Section 6.1.1
of the Strategic Alliance Agreement), (ii) opt-in fees or payments for equity
investments (including any payments from GGL to Seller pursuant to Sections
6.1.2 or 6.1.4 of the Strategic Alliance Agreement), (iii) milestone payments
(including any milestone payments pursuant to Section 6.2 of the Strategic
Alliance Agreement), or (iv) any other payments (other than those expressly
identified in subsection (a) above of this definition), in the case of clauses
(i), (ii), (iii) and (iv) of this clause (d), paid to Seller relating to MABA
‘081.

 

51.                               “Major Market Country” means each of Canada,
France, Germany, Italy, Japan, Spain, the United Kingdom and the United States.

 

A-7

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52.                               “Material Action” means to file any
insolvency, or reorganization case or proceeding, to institute proceedings to
have Delaware Sub be adjudicated bankrupt or insolvent, to institute proceedings
under any applicable insolvency law, to seek any relief under any law relating
to relief from debts or the protection of debtors, to consent to the filing or
institution of bankruptcy or insolvency proceedings against Delaware Sub, to
file a petition seeking, or consent to, reorganization or relief with respect to
Delaware Sub under any applicable federal or state law relating to bankruptcy or
insolvency, to seek or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian, or any similar official of or for
Delaware Sub or a substantial part of its property, to make any assignment for
the benefit of creditors of Delaware Sub, to admit in writing Delaware Sub’s
inability to pay its debts generally as they become due, or to take action in
furtherance of any of the foregoing.

 

53.                               “Meeting Deadline” shall have the meaning set
forth in Section 6.8 of this Agreement.

 

54.                               “Minimum Percentage” means twenty-one percent
(21%).

 

55.                               “Newco” means an English limited partnership,
the limited partner of which shall initially be Seller and the general partner
of which shall be an Affiliate of Seller.

 

56.                               “Newco Charter Documents” shall have the
meaning set forth in Section 4.1 of this Agreement.

 

57.                               “Newco Partners” means the partners of Newco,
each of which shall initially be United States persons or disregarded entities
of a United States person for U.S. federal income tax purposes.

 

58.                               “Order” means any decree, order, judgment,
ruling, writ, injunction, temporary restraining order or other formal order in
any suit or proceeding by or with any Governmental Authority which has become
final and nonappealable.

 

59.                               “Other Amounts” means (i) in respect of each
of the ANORO Royalty Interest, BREO/RELVAR Royalty Interest, MABA ‘081 Royalty
Interest and VI Monotherapy Royalty Interest, any proceeds (whether cash
proceeds or otherwise) other than those in clauses (a)(ii) and (a)(iii) of the
definition of each of the foregoing Royalty Interests as, if and when received
by Seller in lieu of the royalty payments under clause (a)(i) of the definition
of each of the foregoing Royalty Interests, including without limitation amounts
received by Seller relating to any damages or penalties or following any court
action or out-of-court settlement between Seller and GGL, and in all cases,
subject to the reductions, deductions, offsets and exclusions set forth in
clauses (b), (c) and (d) of the definition of each Royalty Interest, (ii) any
amounts paid or payable to Newco pursuant to the first sentence of
Section 2.4(c) of the Assignment Agreement, and (iii) if a Recharacterization
Event (as defined in the Assignment Agreement) has occurred pursuant to the
second sentence of Section 2.4(c) of the Assignment Agreement, the proceeds
thereof, including any proceeds of assets realized upon foreclosure in
connection therewith.

 

60.                               “Party” has the meaning set forth in the
introductory paragraph of this Agreement.

 

A-8

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61.                               “Percentage” means twenty-one percent (21%).

 

62.                               “Permitted Encumbrances” means any of the
following: (a) statutory Encumbrances for current taxes not yet due and payable,
and (b) landlords’, carriers’, warehousemen’s, mechanics’, suppliers’,
materialmen’s or other like Encumbrances arising in the ordinary course of
business with respect to amounts not yet overdue or being contested in good
faith by appropriate proceedings.

 

63.                               “Person” means any individual, corporation,
limited-liability company, partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental body, or
other entity.

 

64.                               “Purchase Price” shall have the meaning set
forth in Section 2.4 of this Agreement.

 

65.                               “Purchaser” has the meaning set forth in the
introductory paragraph of this Agreement.

 

66.                               “Purchaser Charter Documents” has the meaning
set forth in Section 5.1 of this Agreement.

 

67.                               “Purchaser Disclosure Schedule” has the
meaning set forth in Article V of this Agreement.

 

68.                               “Purchaser Material Adverse Effect” means any
one or more of (a) a material adverse effect on the ability of Purchaser to
consummate the Transactions and perform its obligations under this Agreement and
(b) a material adverse effect on the validity or enforceability of this
Agreement or the rights of Seller hereunder.

 

69.                               “Purchaser Indemnitees” has the meaning set
forth in Section 8.1 of this Agreement.

 

70.                               “Required Shareholder Approval” means the
affirmative vote of the majority of outstanding ordinary shares of Purchaser
represented at a shareholders’ meeting where a quorum is present, as required
pursuant to Rule 21.

 

71.                               “Royalty Interest” means (a) the ANORO Royalty
Interest, (b) the BREO/RELVAR Royalty Interest, (c) the MABA ‘081 Royalty
Interest, and (d) the VI Monotherapy Royalty Interest.

 

72.                               “Royalty Interest Product” means each of
(a) ANORO, (b) BREO/RELVAR, (c) MABA ‘081 and (d) VI Monotherapy, and excluding,
in each case, all Excluded Products.

 

73.                               “Royalty Interest Term” means, with respect to
each Royalty Interest Product, the time period commencing on the Closing Date
and ending, on a country-by-country and product-by-product basis, on the date
that the “Term” (as defined in the Collaboration Agreement, with respect to
ANORO, BREO/RELVAR and VI, and as defined in the Strategic Alliance Agreement,
with respect to MABA ‘081) expires or terminates with respect to such Royalty
Interest Product; provided that in the event that either the Collaboration
Agreement or the Strategic Alliance Agreement is terminated and Seller remains
entitled to Royalty Interest payments under Section 14.6 of the Collaboration

 

A-9

--------------------------------------------------------------------------------

 

Agreement or Section 14.5 of the Strategic Alliance Agreement, the Royalty
Interest Term with respect to the relevant Royalty Interest Product shall be
extended until the expiration or termination of such rights under Section 14.6
of the Collaboration Agreement and Section 14.5 of the Strategic Alliance
Agreement, respectively.

 

74.                               “Rule 21” has the meaning set forth in
Section 3.3(a)(i).

 

75.                               “Seller” has the meaning set forth in the
introductory paragraph of this Agreement.

 

76.                               “Seller Charter Documents” has the meaning set
forth in Section 4.1 of this Agreement.

 

77.                               “Seller Corporate Reorganization” means the
separation of Seller’s businesses as described in Seller’s press release and
related materials dated 25 April 2013, as it may be amended.

 

78.                               “Seller Disclosure Schedule” has the meaning
set forth in Article IV of this Agreement.

 

79.                               “Seller Indemnitees” has the meaning set forth
in Section 8.2 of this Agreement.

 

80.                               “Seller SEC Reports” means all reports,
schedules, forms and statements filed by Seller with the United States
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

 

81.                               “Seller Material Adverse Effect” means any one
or more of: (a) a material adverse effect on the ability of Seller to consummate
the Transactions and perform its obligations under this Agreement, (b) a
material adverse effect on the validity or enforceability of this Agreement or
the rights of Purchaser hereunder, or (c) a material adverse effect on the
Beneficial Interest.

 

82.                               “Specified Claim” means any allegation, claim,
announcement, finding or determination that the Transaction Documents,
Transactions or Seller’s or Newco’s negotiation, performance or disclosure of
the Transaction Documents or the Transactions is or might be a breach of the GGL
Agreements.

 

83.                               “Strategic Alliance Agreement” means that
certain Strategic Alliance Agreement by and between Theravance, Inc. and Glaxo
Group Limited dated March 30, 2004, as amended from time to time.

 

84.                               “Taxation” or “Tax” means all (i) forms of
taxation whether direct or indirect and whether levied by reference to income,
profits, gains, net wealth, net worth, equity, asset values, turnover, gross
receipts, added value or other reference, and statutory, governmental, state,
provincial, local government or municipal impositions, duties, contributions,
rates and levies, whenever and wherever imposed (whether imposed by way of a
deduction or withholding for or on account of tax or otherwise) and in respect
of any Person, and all penalties, fines, levies, charges, costs, interest and
other additional amounts relating thereto.

 

A-10

--------------------------------------------------------------------------------

 

85.                               “Tax Authority” means any taxing or other
Governmental Authority (whether within or outside the United Kingdom) competent
to impose, administer or collect any Taxation.

 

86.                               “Term” has the meaning set forth in
Section 7.1 of this Agreement.

 

87.                               “Territory” means the entire world.

 

88.                               “Third Party” means any Person other than
either Party or any of their respective Affiliates.

 

89.                               “Third-Party Claim” has the meaning set forth
in Section 8.3(a) of this Agreement.

 

90.                               “Transactions” means the transactions
contemplated by the Transaction Documents.

 

91.                               “Transaction Documents” means this Agreement,
the Bill of Sale, the Trust Agreement and the Assignment Agreement.

 

92.                               “Treaty” means the Convention between the
Government of the United Kingdom of Great Britain and Northern Ireland and the
Government of the United States of America for the avoidance of double taxation
and prevention of fiscal evasion with respect to taxes on income and capital
gains of 24 July 2001.

 

93.                               “Trust” means the trust declared pursuant to
the Trust Agreement.

 

94.                               “Trust Agreement” means the Declaration of
Trust to be entered into on the Closing Date among Seller, Newco and the other
parties thereto substantially in the form attached hereto as Exhibit E.

 

95.                               “Trustee” means the trustee under the Trust
Agreement.

 

96.                               “UCC” means the Uniform Commercial Code as in
effect from time to time in the State of New York or in any other state or the
District of Columbia to the extent applicable to the perfection of security
interests or filings in respect thereof.

 

97.                               “UMEC” means the long-acting muscarinic
antagonist umeclidinium bromide (with the chemical structure as set forth in
Attachment A-2) or an ester, salt or other noncovalent derivative thereof.

 

98.                               “VI” means the long-acting beta2 agonist
vilanterol (with the chemical structure as set forth in Attachment A-3) or an
ester, salt or other noncovalent derivative thereof.

 

99.                               “VI Monotherapy” means (a) VI, solely as a
monotherapy (i.e., excluding VI in combination with any one or more other
therapeutically active component(s)), and (b) any and all product improvements,
additional claims, line extensions, dosage changes and alternate delivery
systems, in each case, with respect to only VI solely as a monotherapy (i.e.,
excluding VI in combination with any one or more other therapeutically active
component(s)).

 

A-11

--------------------------------------------------------------------------------

 

100.                        “VI Monotherapy Royalty Interest”:

 

(a)                                 Means Seller’s entitlement under the
Collaboration Agreement to receive the following payments during the Royalty
Interest Term, subject to subsections (b), (c) and (d) of this definition:

 

(i)                                     royalty payments on any net sales
worldwide of VI Monotherapy by or on behalf of GGL, pursuant to Section 6.3 of
the Collaboration Agreement;

 

(ii)                                  any interest on amounts referred to in
clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the
Collaboration Agreement;

 

(iii)                               any Infringement Payments with respect to VI
Monotherapy in lieu of the payments referred to in clause (a)(i) immediately
above; and

 

(iv)                              any Other Amounts with respect to VI
Monotherapy in lieu of the payments referred to in clause (a)(i) immediately
above.

 

(b)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9
the Collaboration Agreement. The VI Reverse Milestone Payment Obligation shall
remain the obligation of Seller, and shall not be a reduction, deduction, offset
or exclusion from the royalty payments under subsection (a) above of this
definition.

 

(c)                                  The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to reduction,
deduction, offset and exclusion from such royalties of any Cost-Sharing
Deductions (without double counting).

 

(d)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition does not include any
(i) signing payments (including any signing payments pursuant to Section 6.1.1
of the Collaboration Agreement), (ii) one-time fees for new compounds
contributed to the collaboration (including any one-time fee payments from GGL
to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration Agreement),
(iii) milestone payments (including any milestone payments pursuant to
Section 6.2 of the Collaboration Agreement), or (iv) any other payments (other
than those expressly identified in subsection (a) above of this definition)  in
the case of clauses (i), (ii), (iii) and (iv) of this clause (d), paid to Seller
relating to VI Monotherapy.

 

101.                        “VI Reverse Milestone Payment Obligation” means
Seller’s obligation to pay to GGL milestone payments in the event a product
containing VI is successfully developed and commercialized, pursuant to
Section 6.2.3 of the Collaboration Agreement.

 

A-12

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B.                                    INTERPRETATION.

 

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

 

(b)           The words “include,” “includes” and “including” when used herein
shall be deemed in each case to be followed by the words “without limitation”
and shall not be construed to limit any general statement which it follows to
the specific or similar items or matters immediately following it.

 

(c)           Neither Party shall be or be deemed to be the drafter of this
Agreement for the purposes of construing this Agreement against the other Party.

 

(d)           All uses of the words “hereto”, “herein”, “hereof”, “hereby” and
“hereunder” and similar expressions refer to this Agreement as a whole and not
to any particular provision of this Agreement.

 

(e)           Unless otherwise specified in this Agreement, words in the
singular include the plural and vice versa and words importing one gender
include all genders.

 

(f)            Any reference to a Person shall also be its permitted successors
and assigns.

 

(g)           Any references to a Law shall include any amendment or
modification to such Law and any rules and regulations issued thereunder,
whether such amendment or modification is made, or issuance of such rules and
regulations occurs, before or after the date of this Agreement.

 

A-13

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ATTACHMENT A-1

 

FF CHEMICAL STRUCTURE

 

STATEMENT ON A NONPROPRIETARY NAME ADOPTED BY THE USAN COUNCIL:

 

USAN

FLUTICASONE FUROATE

 

 

PRONUNCIATION

floo tik’ a sone fur’ oh ate

 

 

THERAPEUTIC CLAIM

Asthma, allergy, and chronic obstructive pulmonary disease

 

CHEMICAL NAMES

 

1.              Androsta-1,4-diene-17-carbothioic acid,
6,9-difluoro-17-[(2-furanylcarbonyl)oxy]-11-hydroxy-16-methyl-3-oxo-,
S-(fluoromethyl) ester, (6α,11β,16α,17α)-

 

2.             
6α,9-difluoro-17-[[(fluoromethyl)sulfanyl]carbonyl]-11β-hydroxy-16α-methyl-3-oxoandrosta-1,4-dien-17α-yl
furan-2-carboxylate

 

3.             
(6α,11β,16α,17α)-6,9-difluoro-17-(((fluoromethyl)thio)carbonyl)-11-hydroxy-16-methyl-3-oxoandrosta-1,4-dien-17-yl-2-furancarboxylate

 

STRUCTURAL FORMULA

 

[g125231kk13i001.jpg]

 

MOLECULAR FORMULA

C27H29F3O6S

 

 

MOLECULAR WEIGHT

538.6

 

 

TRADEMARK

None as yet

 

 

MANUFACTURER

GlaxoSmithKline

 

 

CODE DESIGNATION

GW685698X

 

 

CAS REGISTRY NUMBER

397864-44-7

 

A-14

--------------------------------------------------------------------------------

 

ATTACHMENT A-2

 

UMEC CHEMICAL STRUCTURE

 

STATEMENT ON A NONPROPRIETARY NAME ADOPTED BY THE USAN COUNCIL

 

USAN

UMECLIDINIUM

 

 

PRONUNCIATION

ue mek” li din’ ee um

 

 

THERAPEUTIC CLAIM

Treatment of COPD

 

 

CHEMICAL NAMES

 

 

1. 1-Azoniabicyclo[2.2.2]octane,
4-(hydroxydiphenylmethyl)-1-[2-(phenylmethoxy)ethyl]-

 

2. 1-[2-(benzyloxy)ethyl]-4-(hydroxydiphenylmethyl)-1-azoniabicyclo[2.2.2]octane

 

STRUCTURAL FORMULA

 

[g125231kk13i002.jpg]

 

MOLECULAR FORMULA

C29H34NO2+

 

 

MOLECULAR WEIGHT

428.6

 

 

TRADEMARK

None as yet

 

 

SPONSOR

GlaxoSmithKline

 

 

CODE DESIGNATION

GSK573719

 

 

CAS REGISTRY NUMBER

869185-19-3

 

A-15

--------------------------------------------------------------------------------

 

ATTACHMENT A-3

 

VI CHEMICAL STRUCTURE

 

STATEMENT ON A NONPROPRIETARY NAME ADOPTED BY THE USAN COUNCIL

 

USAN

VILANTEROL TRIFENATATE

 

 

PRONUNCIATION

vye lan’ ter ol trye fen’ a tate

 

 

THERAPEUTIC CLAIM

Treatment of COPD and asthma

 

 

CHEMICAL NAMES

 

 

1.                            Benzeneacetic acid, α,α-diphenyl-, compd. with
(α1R)-α1-[[[6-[2-[(2,6-dichlorophenyl)methoxy]ethoxy]hexyl]amino]methyl]-4-hydroxy-1,3-benzenedimethanol
(1:1)

 

2.                           
4-{(1R)-2-[(6-{2-[(2,6-dichlorophenyl)methoxy]ethoxy}hexyl)amino]-1-hydroxyethyl}-2-(hydroxymethyl)phenol
triphenylacetate

 

3.                            Triphenylacetic
acid-4-{(1R)-2-[(6-{2-[(2,6-dichlorobenzyl)oxy]ethoxy}hexyl)amino]-1-hydroxyethyl}-2-(hydroxymethyl)phenol
(1:1)

 

STRUCTURAL FORMULA

 

[g125231kk13i003.jpg]

 

MOLECULAR FORMULA

C24H33Cl2NO5 . C20H16O2

 

 

MOLECULAR WEIGHT

774.8

 

 

TRADEMARK

None as yet

 

 

MANUFACTURER

GlaxoSmithKline

 

 

CODE DESIGNATION

GW642444M

 

 

CAS REGISTRY NUMBER

503070-58-4

 

A-16

--------------------------------------------------------------------------------

 

EXHIBIT A

 

PRESS RELEASE

 

GRAPHIC [g125231kk13i004.jpg]

GRAPHIC [g125231kk13i005.jpg]

 

Theravance and Elan Enter Into a $1.0 Billion Royalty Participation Agreement

 

Theravance to receive $1.0 billion upfront payment upon closing

 

Elan to receive a 21% participation interest in potential future royalty
payments associated with four respiratory programs

 

SOUTH SAN FRANCISCO, CA and DUBLIN, Ireland — May 13, 2013 — Theravance, Inc.
(NASDAQ: THRX) and Elan Corporation, plc (NYSE: ELN) today announced that they
have entered into a royalty participation agreement wherein Elan will purchase a
participation interest in potential future royalty payments related to four
respiratory programs partnered with GlaxoSmithKline plc (GSK):  RELVAR™
ELLIPTA™/BREO™ ELLIPTA™, ANORO™ ELLIPTA™, MABA (Bifunctional Muscarinic
Antagonist-Beta2 Agonist) monotherapy (GSK961081, or MABA ‘081), and vilanterol
(VI) monotherapy.  Under the terms of the agreement, Elan will make a one-time
cash payment of $1.0 billion to Theravance in exchange for a 21% participation
interest in the potential future royalty payments from the four programs when,
as and if received by Theravance.

 

“We are very excited to partner with Elan in a transaction that recognizes the
significant value of four programs from our GSK collaborations targeted at
respiratory disease,” said Rick E Winningham, Theravance’s Chief Executive
Officer.  “This agreement complements our strategy to facilitate and accelerate
the return of capital to our stockholders and build value, consistent with our
recently announced plan to separate Theravance into two entities, Royalty
Management Company and Theravance Biopharma.”

 

Mr Kelly Martin, Chief Executive Officer of Elan commented, “This transaction,
upon closing, will immediately diversify our business with an investment in four
high quality and late stage clinical assets within a large and growing
therapeutic area. This diversification should benefit our shareholders by
spreading the inherent risk embedded in any one specific asset. In addition, the
long term and future potential cash flow streams and net income will be shared
with investors both directly - through a dividend pass through - and indirectly
through overall after tax earnings.”

 

Mr Martin added, “Being involved, even indirectly, with an important therapeutic
area that addresses the needs of millions of patients who suffer from
respiratory disease is particularly meaningful to all of us at Elan.”

 

RELVAR™ ELLIPTA™/BREO™ ELLIPTA™ (fluticasone furoate (FF)/vilanterol (VI)),
ANORO™ ELLIPTA™ (umeclidinium bromide (UMEC)/VI) and VI monotherapy have been
developed under the LABA collaboration with GSK.  For RELVAR™ ELLIPTA™/BREO™
ELLIPTA™ and VI, Theravance is entitled to receive royalties from GSK of 15% of
the first $3.0 billion of combined annual global net sales, and 5% of combined
annual global net sales above $3.0 billion.  If ANORO™ ELLIPTA™ is approved and
commercialized, royalties on annual global net sales are upward tiering and
range from the mid-single digits to 10%.  The transaction does not include any
royalty participation interest associated with UMEC/VI/FF, an investigational
medicine also in development under the LABA collaboration with GSK.

 

MABA ‘081 is an investigational medicine in development under the strategic
alliance between Theravance and GSK.  If MABA ‘081 is successfully developed and
commercialized as monotherapy, Theravance is entitled to receive royalties from
GSK of between 10% and 20% of the first $3.5 billion of annual global net sales,
and 7.5% of all annual global net sales above $3.5 billion.  The transaction
does not include any royalty participation interest associated with MABA ‘081 in
combination with any other therapeutically active component, including an
inhaled corticosteroid, or any other MABA compound as monotherapy or in
combination.

 

A-1

--------------------------------------------------------------------------------

 

The transaction is not subject to any material conditions, other than approval
by Elan’s shareholders.  Elan plans to promptly prepare the required
documentation to enable a shareholder vote, which Elan has agreed to hold within
35 days.  If approved by Elan’s shareholders, the parties expect the transaction
to be consummated by the end of June 2013.

 

Theravance Tax Treatment and Use of Proceeds

 

Theravance does not expect to pay significant income taxes associated with the
transaction.

 

As previously disclosed, Theravance intends to separate its biopharmaceutical
operations and its late stage partnered respiratory assets into two independent
publicly traded companies, referred to as Theravance Biopharma and Royalty
Management Co, respectively.  We intend for Royalty Management Co to be the
primary vehicle for the return of capital and that the proceeds from this
transaction will facilitate and accelerate returns to its stockholders following
the separation.  Theravance Biopharma will be primarily focused on the
discovery, development and commercialization of small-molecule medicines in
areas of significant unmet medical need. This transaction does not change the
overall structure of the planned separation, including which assets are expected
to be in each company.  Additionally, we do not plan to increase 2013 research
and development spending above what was included in our 2013 expense guidance.
Theravance is currently evaluating the optimal strategies to return capital to
stockholders of Royalty Management Co following completion of the separation,
including through dividends or the repurchase of shares and/or convertible debt.

 

Centerview Partners LLC is acting as financial advisor and Skadden, Arps, Slate,
Meagher & Flom LLP and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP are acting as legal advisors to Theravance in connection with the
transaction.

 

Evercore Partners and Ondra Partners are acting as financial advisors to Elan.
Cadwalader, Wickersham & Taft LLP and A&L Goodbody are acting as legal advisors
to Elan in connection with the transaction.

 

Conference Call and Webcast Information

 

Theravance will discuss this announcement at 8:30 a.m. Eastern Daylight Time
today. To participate in the live call by telephone, please dial (877) 837-3908
from the U.S., or (973) 890-8166 for international callers. Those interested in
listening to the conference call live via the internet may do so by visiting
Theravance’s web site at www.theravance.com. To listen to the live call, please
go to the web site 15 minutes prior to its start to register, download, and
install any necessary audio software.

 

A replay of the conference call will be available on Theravance’s web site for
30 days through June 12, 2013. An audio replay will also be available through
11:59 p.m. Eastern Daylight Time on May 20, 2013 by dialing (855) 859-2056 from
the U.S., or (404) 537-3406 for international callers, and entering confirmation
code 71715858.

 

For more information, please visit Theravance’s website at www.theravance.com.

 

About Four Respiratory Programs

 

RELVAR™ ELLIPTA™/BREO™ ELLIPTA™, ANORO™ ELLIPTA™, VI monotherapy and MABA
monotherapy (GSK961081, or MABA ‘081), are assets developed in collaboration
with GlaxoSmithKline plc (GSK).

 

In November 2002, Theravance entered into its LABA collaboration with GSK to
develop and commercialize once-daily long-acting beta2 agonist (LABA) products
for the treatment of chronic obstructive pulmonary disease (COPD) and asthma.
For the treatment of COPD, the collaboration is developing two combination
products: (1) RELVAR™ ELLIPTA™ or BREO™ ELLIPTA™ (FF/VI), an investigational
once-daily combination medicine consisting of a LABA, vilanterol (VI), and an
inhaled corticosteroid (ICS), fluticasone furoate (FF) and (2) ANORO™ ELLIPTA™
(UMEC/VI), a once-daily investigational medicine combining a long-acting
muscarinic antagonist (LAMA), umeclidinium

 

2

--------------------------------------------------------------------------------

 

bromide (UMEC), with a LABA, VI. For the treatment of asthma, the collaboration
is developing FF/VI. BREO™ ELLIPTA™ 100/25 mcg is approved in the United States
as an inhaled long-term, once-daily maintenance treatment of airflow obstruction
in patients with COPD, including chronic bronchitis and/or emphysema. It is also
indicated to reduce exacerbations of COPD in patients with a history of
exacerbations.  RELVAR™ ELLIPTA™ for the treatment of COPD and asthma patients
is currently under review by the European Medicines Agency (EMA) and Japan. 
FF/VI is not approved or licensed in the European Union or anywhere outside of
the United States.  ANORO™ ELLIPTA™ for the treatment of COPD patients is
currently under review by the U.S. Food and Drug Administration, the EMA and
Japan.  The Prescription Drug User Fee Act goal date for ANORO™ ELLIPTA™ is
December 18, 2013.  ANORO™ ELLIPTA™ (UMEC/VI) is an investigational medicine and
is not currently approved anywhere in the world.

 

In March 2004, Theravance entered into its strategic alliance with GSK. Under
this alliance, GSK received an option to license exclusive development and
commercialization rights to product candidates from certain of Theravance’s
discovery programs on predetermined terms and on an exclusive, worldwide basis. 
In 2005, GSK licensed Theravance’s MABA program for the treatment of COPD. 
GSK961081 (‘081), the lead MABA, is an investigational, single molecule
bifunctional bronchodilator with both muscarinic antagonist and beta2 receptor
agonist activities.  Based on the results from a Phase 2b study, GSK and
Theravance plan to advance ‘081 monotherapy into Phase 3 and the ‘081/FF
combination into Phase 3-enabling studies, later in 2013.

 

Important Safety Information

 

BREO ELLIPTA is contraindicated in patients with severe hypersensitivity to milk
proteins or who have demonstrated hypersensitivity to either fluticasone
furoate, vilanterol, or any of the excipients.

 

BREO ELLIPTA should not be initiated in patients during rapidly deteriorating or
potentially life-threatening episodes of COPD, or as rescue therapy for the
treatment of acute episodes of bronchospasm, which should be treated with an
inhaled, short-acting beta2-agonist.

 

BREO ELLIPTA should not be used more often than recommended, at higher doses
than recommended, or in conjunction with other medications containing LABAs, as
an overdose may result.

 

Oropharyngeal candidiasis has occurred in patients treated with BREO ELLIPTA.

 

An increase in the incidence of pneumonia has been observed in subjects with
COPD receiving the fluticasone furoate/vilanterol combination, including BREO
ELLIPTA 100 mcg/25 mcg, in clinical trials. There was also an increased
incidence of pneumonias resulting in hospitalization. In some incidences these
pneumonia events were fatal.

 

Patients who use corticosteroids are at risk for potential worsening of existing
tuberculosis; fungal, bacterial, viral, or parasitic infections; or ocular
herpes simplex. A more serious or even fatal course of chickenpox or measles may
occur in susceptible patients.

 

Particular care is needed for patients who have been transferred from
systemically active corticosteroids to inhaled corticosteroids because deaths
due to adrenal insufficiency have occurred in patients with asthma during and
after transfer from systemic corticosteroids to less systemically available
inhaled corticosteroids.

 

Hypercorticism and adrenal suppression may occur with very high dosages or at
the regular dosage of inhaled corticosteroids in susceptible individuals.

 

Caution should be exercised when considering the coadministration of BREO
ELLIPTA with long-term ketoconazole and other known strong CYP3A4 inhibitors
because increased systemic corticosteroid and cardiovascular adverse effects may
occur.

 

3

--------------------------------------------------------------------------------

 

Inhaled medicines can produce paradoxical bronchospasm, which may be
life-threatening. Vilanterol, the LABA in BREO ELLIPTA, can produce clinically
significant cardiovascular effects in some patients. Decreases in bone mineral
density have been observed with long-term administration of products containing
inhaled corticosteroids, as have glaucoma, increased intraocular pressure, and
cataracts.

 

The most common adverse reactions (>3% and more common than in placebo) reported
in two 6-month clinical trials with BREO ELLIPTA (and placebo) were
nasopharyngitis, 9% (8%); upper respiratory tract infection, 7% (3%); headache,
7% (5%); and oral candidiasis, 5% (2%). In addition to the events reported in
the 6-month studies, adverse reactions occurring in >3% of the subjects treated
with BREO ELLIPTA in two 1-year studies included COPD, back pain, pneumonia,
bronchitis, sinusitis, cough, oropharyngeal pain, arthralgia, hypertension,
influenza, pharyngitis, diarrhea, peripheral edema, and pyrexia.

 

BREO ELLIPTA is not indicated for the relief of acute bronchospasm or the
treatment of asthma. The safety and efficacy of BREO ELLIPTA in patients with
asthma have not been established. Long-acting beta2-adrenergic agonists (LABAs),
such as vilanterol, one of the active ingredients in BREO ELLIPTA, increase the
risk of asthma-related death. A placebo-controlled trial with another LABA
(salmeterol) showed an increase in asthma-related deaths in subjects receiving
salmeterol. This finding with salmeterol is considered a class effect of all
LABAs, including vilanterol.

 

About Elan

 

Elan Corporation, plc is a biotechnology company, headquartered in Ireland,
committed to making a difference in the lives of patients and their families by
dedicating itself to bringing innovations in science to fill significant unmet
medical needs that continue to exist around the world. Elan shares trade on the
New York and Irish Stock Exchanges. For additional information about Elan,
please visit www.elan.com.

 

As required by the Irish Takeover Rules, the Directors of Elan accept
responsibility for the information contained in this announcement. To the best
of their knowledge and belief (having taken all reasonable care to ensure such
is the case); the information contained in this announcement is in accordance
with the facts and does not omit anything likely to affect the import of such
information.

 

Any holder of 1% or more of any class of relevant securities of Elan may have
disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997,
Takeover Rules 2007 (as amended).

 

About Theravance

 

Theravance is a biopharmaceutical company with a pipeline of internally
discovered product candidates and strategic collaborations with pharmaceutical
companies. Theravance is focused on the discovery, development and
commercialization of small molecule medicines across a number of therapeutic
areas including respiratory disease, bacterial infections, and central nervous
system (CNS)/pain. Theravance’s key programmes include: RELVAR™ ELLIPTA™ or
BREO™ ELLIPTA™ (FF/VI), ANORO™ ELLIPTA™ (UMEC/VI) and MABA (Bifunctional
Muscarinic Antagonist-Beta2 Agonist), each partnered with GlaxoSmithKline plc,
and its oral Peripheral Mu Opioid Receptor Antagonist program.  By leveraging
its proprietary insight of multivalency to drug discovery, Theravance is
pursuing a best-in-class strategy designed to discover superior medicines in
areas of significant unmet medical need. For more information, please visit
Theravance’s web site at www.theravance.com.

 

THERAVANCE®, the Theravance logo, and MEDICINES THAT MAKE A DIFFERENCE® are
registered trademarks of Theravance, Inc.

 

RELVAR™, BREO™, ANORO™ and ELLIPTA™ are trademarks of the GlaxoSmithKline group
of companies. The use of the brand names ANORO™ and RELVAR™ has not yet been
approved by any regulatory authority.

 

4

--------------------------------------------------------------------------------

 

Theravance Forward-Looking Statements

 

This press release contains and the conference call will contain certain
“forward-looking” statements as that term is defined in the Private Securities
Litigation Reform Act of 1995 regarding, among other things, statements relating
to goals, plans, objectives and future events. Theravance intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform Act of 1995. Examples
of such statements include statements relating to the expected timing of the
Elan shareholder vote on the transaction and the outcome of such vote, the
expected timing for consummating the transaction if Elan shareholder approval is
obtained, the effect of the transaction if it is consummated on the strategies,
plans and objectives of Theravance, the timing, manner and amount of anticipated
potential returns of capital to stockholders if the transaction and/or
Theravance’s previously announced planned separation is consummated, the timing,
plans and objectives of and the possible impact of the transaction on
Theravance’s previously announced, planned separation, the status and timing of
clinical studies, data analysis and communication of results, statements
regarding the potential benefits and mechanisms of action of drug candidates,
statements concerning the timing of seeking regulatory approval of product
candidates, statements concerning the enabling capabilities of Theravance’s
approach to drug discovery and its proprietary insights, statements concerning
expectations for product candidates through development and commercialization
and projections of the tax effects of the transaction and other financial items.
These statements are based on the current estimates and assumptions of the
management of Theravance as of the date of this press release and the conference
call and are subject to risks, uncertainties, changes in circumstances,
assumptions and other factors that may cause the actual results of Theravance to
be materially different from those reflected in the forward-looking statements.
Important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements include, among others, risks
related to delays or difficulties encountered in obtaining, or the failure to
obtain, the approval of Elan’s shareholders for the transaction, the possibility
that intervening events could arise which could alter the timing, or the ability
to consummate, the transaction, the anticipated separation of Theravance into
two independent companies or the intended return of capital to stockholders, the
risk that third parties could challenge the transaction, the risk that
Theravance’s net operating loss may not be available to offset taxes from the
transaction, the potential that results of clinical or non-clinical studies
indicate product candidates are unsafe or ineffective, our dependence on third
parties in the conduct of our clinical studies, delays or failure to achieve
regulatory approvals for product candidates and risks of collaborating with
third parties to develop and commercialize products. These and other risks are
described in greater detail under the heading “Risk Factors” contained in
Theravance’s Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (SEC) on May 1, 2013 and the risks discussed in our other
periodic filings with the SEC. Given these uncertainties, you should not place
undue reliance on these forward-looking statements. Theravance assumes no
obligation to update its forward-looking statements.

 

Elan Forward-Looking Statements

 

This press release contains forward-looking statements that involve substantial
risks and uncertainties. You can identify these statements by the fact that they
use words such as “anticipate”, “estimate”, “project”, “target”, “intend”,
“plan”, “will”, “believe”, “expect” and other words and terms of similar meaning
in connection with any discussion of future financial performance or events.
Among the factors that could cause actual results to differ materially from
those described or projected herein are the following: risks related to delays
or difficulties encountered in obtaining, or the failure to obtain, the approval
of Elan’s shareholders for the transaction; the possibility that intervening
events could arise which could alter the timing, or the ability to consummate
the transaction if Elan shareholder approval is obtained; the risk that third
parties could challenge the transaction, even if the transaction is approved by
Elan shareholders and consummated; risks related to the development, approval
and commercialization of the products or potential products that underlie the
royalty participation interest; whether this agreement will provide
diversification benefits to Elan shareholders; whether any cash flow streams
will result from this agreement; as Elan’s principal source of revenue may
remain a royalty on sales of Tysabri, the potential of Tysabri, which may be
severely constrained by increases in the incidence of serious adverse events
(including death) associated with Tysabri (in particular, by increases in the
incidence rate for cases of PML), or by competition from existing or new
therapies (in particular, oral therapies), and the potential for the successful
development and commercialization of

 

5

--------------------------------------------------------------------------------

 

products, whether internally or by acquisition, especially given the separation
of the Prothena business which left Elan with no material pre-clinical research
programs or capabilities; Elan’s ability to maintain sufficient cash, liquid
resources, and investments and other assets capable of being monetized to meet
its liquidity requirements; the success of our development activities, and
research and development activities in which Elan retains an interest,
including, in particular, the impact of the announced discontinuation of the
development of bapineuzumab intravenous in mild to moderate Alzheimer’s disease;
failure to comply with anti-kickback, bribery and false claims laws in the
United States, Europe and elsewhere; difficulties or delays in manufacturing and
supply of Tysabri; trade buying patterns; the impact of potential biosimilar
competition, the trend towards managed care and health care cost containment,
including Medicare and Medicaid; legislation and other developments affecting
pharmaceutical pricing and reimbursement (including, in particular, the dispute
in Italy with respect to Tysabri sales), both domestically and internationally;
failure to comply with Elan’s payment obligations under Medicaid and other
governmental programs; exposure to product liability (including, in particular,
with respect to Tysabri) and other types of lawsuits and legal defense costs and
the risks of adverse decisions or settlements related to product liability,
patent protection, securities class actions, governmental investigations and
other legal proceedings; Elan’s ability to protect its patents and other
intellectual property; claims and concerns that may arise regarding the safety
or efficacy of Elan’s product candidates; interest rate and foreign currency
exchange rate fluctuations and the risk of a partial or total collapse of the
euro; governmental laws and regulations affecting domestic and foreign
operations, including tax obligations; whether Elan is  deemed to be an
Investment Company or a Passive Foreign Investment Company; general changes in
United States and International generally accepted accounting principles; growth
in costs and expenses; and the impact of acquisitions, divestitures,
restructurings, product withdrawals and other unusual items. A further list and
description of these risks, uncertainties and other matters can be found in
Elan’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012,
and in its Reports of Foreign Issuer on Form 6-K filed with the SEC. Elan
assumes no obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise.

 

(THRX-G)

 

Contact Information:

 

Theravance, Inc.

Michael W. Aguiar

Senior Vice President and Chief Financial Officer

650-808-4100

investor.relations@theravance.com

 

Elan Corporation, plc
Investor Relations:
Chris Burns, +1-800-252-3526
David Marshall, +353-1-709-4444

 

or

 

Media Relations:
Emer Reynolds, +353-1-709-4022
Jonathan Birt/FTI Consulting, +44-751-559-7858
Jamie Tully/Sard Verbinnen & Co, +1-212-687-8080

 

6

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EXHIBIT B

 

FORM OF BILL OF SALE

 

BILL OF SALE (this “Bill of Sale”), is made and effective as of [    ] [    ],
2013, between THERAVANCE, INC., a Delaware corporation (“Seller”), and ELAN
CORPORATION PLC, an Irish public limited company (“Purchaser”).  Capitalized
terms used but not otherwise defined herein shall have the meanings specified in
the Participation Agreement (as defined below).

 

WITNESSETH

 

WHEREAS, Seller and Purchaser have entered into a Royalty Participation
Agreement dated as of May 12, 2013 (the “Participation Agreement”), pursuant to
which Seller has agreed to sell, grant, assign, put over, transfer and convey to
Purchaser, and Purchaser has agreed to purchase, acquire and accept from Seller,
all right, title and interest in and to the Beneficial Interest.

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements contained herein and in the Participation Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and as contemplated by Section 3.2 of the Participation Agreement,
the Parties hereto agree as follows:

 

1.                                      Conveyance, Assignment and Acceptance of
Assigned Rights.  Seller hereby sells, grants, assigns, puts over, transfers and
conveys to Purchaser all right, title and interest in the Beneficial Interest,
and Purchaser hereby purchases, acquires and accepts such sale, grant,
assignment, put over, transfer and conveyance.

 

2.                                      Governing Law.  THIS BILL OF SALE AND
ALL ACTIONS, PROCEEDINGS OR COUNTERCLAIMS (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS BILL OF SALE WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF EXCEPT AS SET FORTH
IN SECTIONS 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

3.                                      Counterparts.  This Bill of Sale may be
executed in any number of counterparts.  Each counterpart will be an original,
and all counterparts will together constitute one and the same instrument. 
Delivery of an executed counterpart via PDF or other electronic delivery shall
be considered the same as delivery of a manually executed counterpart.

 

4.                                      Successors and Assigns.  This Bill of
Sale shall be binding upon and inure to the benefit of Seller and Purchaser and
their permitted successors and assigns.

 

5.                                      Severability.  If any of the covenants,
agreements or terms of this Bill of Sale is held invalid, illegal or
unenforceable, then it will be deemed severable from the remaining

 

B-1

--------------------------------------------------------------------------------

 

covenants, agreements or terms of this Bill of Sale and will in no way affect
the validity, legality or enforceability of the remaining Bill of Sale.  Upon
such determination that any covenant, agreement or term is invalid, illegal or
unenforceable, this Bill of Sale shall be deemed modified so as to effect the
original intent of the Parties as closely as possible in order that the
Transactions be consummated as originally contemplated to the fullest extent
consistent with applicable Law.

 

6.                                      Entire Agreement.  This Bill of Sale is
subject to all of the terms, conditions and limitations set forth in the
Participation Agreement, and together with the Participation Agreement, and the
other documents and agreements referenced in Section 9.8 of the Participation
Agreement, sets forth the entire agreement and understanding between the Parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings relating to such subject matter.

 

7.                                      Conflicts.  Notwithstanding anything to
the contrary contained in this Bill of Sale, in the event of any conflict
between the terms of this Bill of Sale and the terms of the Participation
Agreement, the terms of the Participation Agreement shall control.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties hereto have set their hands by their authorized
representatives as of the year and date first indicated above.

 

 

 

THERAVANCE, INC.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

ELAN CORPORATION PLC

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

FORM OF UCC FINANCING STATEMENT

 

EXHIBIT A TO UCC1 FINANCING STATEMENT

 

Debtor:

[Taurus]

 

901 Gateway Boulevard

 

South San Francisco

 

California 94080

 

 

Secured Party:

[Newco]

 

 

I.  This FINANCING STATEMENT covers the following collateral:

 

TWENTY-ONE PERCENT (21%) UNDIVIDED BENEFICIAL INTEREST IN (1) CERTAIN PAYMENT
OBLIGATIONS UNDER SECTIONS 6.3, 6.8 AND 13.4 OF THAT CERTAIN COLLABORATION
AGREEMENT, DATED NOVEMBER 14, 2002, BETWEEN TAURUS AND GOLIATH (2) CERTAIN
PAYMENT OBLIGATIONS UNDER SECTIONS 6.3, 6.8 AND 13.4 OF THAT CERTAIN STRATEGIC
ALLIANCE AGREEMENT, DATED MARCH 30, 2004, BETWEEN TAURUS AND GOLIATH, AND ALL
PROCEEDS THEREOF (THE “COLLATERAL”):

 

It is intended by the Debtor and the Secured Party that all right, title and
interest of the Debtor in and to the Collateral is being conveyed to the Secured
Party under the transactions between such parties, and the use of the terms
“Debtor,” “Secured Party” and “Collateral” shall not be construed to evidence a
contrary intent, nor shall this FINANCING STATEMENT constitute an admission or
acknowledgment by Debtor, or Secured Party or any other person that the
transactions between Debtor and Secured Party create only a security interest in
the foregoing property.

 

C-1

--------------------------------------------------------------------------------

 

EXHIBIT D

 

FORM OF ASSIGNMENT AGREEMENT

 

 

 

ASSIGNMENT AGREEMENT

 

between

 

THERAVANCE, INC.

 

and

 

[NEWCO]

 

Dated as of [ ] [ ], 2013

 

 

 

D-1

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Article I

 

 

 

 

DEFINITIONS AND INTERPRETATION

 

 

 

 

Article II

 

 

 

 

ASSIGNMENT OF ASSIGNMENT INTEREST

 

 

 

 

Section 2.1

Assignment of Assignment Interest

1

Section 2.2

Exclusion of GGL Agreement Rights

2

Section 2.3

No Obligations Transferred

2

Section 2.4

Intent; Savings Clause

2

 

 

 

Article III

 

 

 

CLOSING

 

Section 3.1

Closing

3

Section 3.2

Delivery of Trust Agreement

3

 

 

Article IV

 

 

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

 

 

Section 4.1

Organization

4

Section 4.2

Power, Authorization and Enforceability

4

Section 4.3

No Conflicts or Violations

4

Section 4.4

Proceedings

4

Section 4.5

GGL Agreements

4

Section 4.6

Contractual Rights to Royalty Interest

5

Section 4.7

Intellectual Property

5

Section 4.8

UCC Matters

6

Section 4.9

No Implied Representations and Warranties

6

 

 

 

Article V

 

 

 

 

REPRESENTATIONS AND WARRANTIES OF NEWCO

 

 

 

 

Section 5.1

Organization

7

Section 5.2

Power, Authorization and Enforceability

7

Section 5.3

No Conflicts or Violations

7

Section 5.4

Proceedings

8

Section 5.5

No Implied Representations and Warranties

8

 

i

--------------------------------------------------------------------------------

 

Article VI

 

 

 

COVENANTS

 

 

 

 

Section 6.1

Payment of Assignment Interest

8

Section 6.2

Tax Matters

9

Section 6.3

GGL Agreements

10

Section 6.4

Confidentiality

11

Section 6.5

Information Rights

12

Section 6.6

Books and Records

13

Section 6.7

Public Announcement

13

Section 6.8

UCC Matters

13

Section 6.9

Royalty Interest Disclosures

13

Section 6.10

Non-Cash Consideration

13

 

 

 

Article VII

 

 

 

 

TERM

 

 

 

 

Section 7.1

Term

13

 

 

 

Article VIII

 

 

 

INDEMNIFICATION

 

 

 

Section 8.1

Indemnification by Seller

14

Section 8.2

Indemnification by Newco

14

Section 8.3

Indemnification Procedure

14

Section 8.4

Claims Period for Breach of Representations and Warranties

16

Section 8.5

Limitations on Indemnification

16

Section 8.6

Exclusive Remedy

17

Section 8.7

Disclaimer of Consequential Damages

17

 

 

 

Article IX

 

 

 

 

MISCELLANEOUS

 

Section 9.1

Assignment

18

Section 9.2

Further Assurances

18

Section 9.3

Notices

19

Section 9.4

Specific Performance

20

Section 9.5

Title; Headings; Captions

20

Section 9.6

Independent Contractors

20

Section 9.7

Third-Party Beneficiaries

20

Section 9.8

Entire Agreement

20

Section 9.9

Amendment and Supplementation

21

Section 9.10

No Waiver

21

Section 9.11

Severability

21

 

ii

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Section 9.12

Governing Law

21

Section 9.13

Submission to Jurisdiction

21

Section 9.14

Waiver of Jury Trial

21

Section 9.15

Counterparts

21

 

Appendix A

Definitions

A-1

Exhibit A

Form of UCC Financing Statements

A-1

Exhibit B

Form of Trust Agreement

B-1

 

iii

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ASSIGNMENT AGREEMENT

 

ASSIGNMENT AGREEMENT, dated as of [    ] [    ], 2013 (this “Agreement”),
between THERAVANCE, INC., a Delaware corporation (“Seller”), and [NEWCO], an
English limited partnership (“Newco”; and each of Seller and Newco, a “Party”
and together, the “Parties”).

 

BACKGROUND

 

A.                                    Seller is party to certain drug research,
development and commercialization agreements with GGL, referred to herein as the
GGL Agreements (each as defined herein), pursuant to which Seller is entitled to
certain royalties, milestone payments and other payments in connection with the
development and commercialization of products under the GGL Agreements.

 

B.                                   Seller wishes to sell to Newco, and Newco
wishes to acquire, a participation interest in certain royalty payments (but
excluding (i) any rights of any kind under the GGL Agreements (other than the
Assignment Interest) and (ii) any milestone payments and other payments) that
Seller may receive from GGL pursuant to the GGL Agreements with respect to
certain products, subject to the terms and conditions of this Agreement and in
compliance with the terms and conditions of the GGL Agreements, but not assign
or otherwise transfer to Newco any rights to royalty payments, or any other
rights, under any of the GGL Agreements (other than the Assignment Interest).

 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

Capitalized terms used but not otherwise defined in this Agreement are defined
in Appendix A to this Agreement.  Appendix A also contains rules of
interpretation applicable to this Agreement.

 

ARTICLE II

 

ASSIGNMENT OF ASSIGNMENT INTEREST

 

Section 2.1            Assignment of Assignment Interest.

 

(a)        Seller hereby sells, grants, assigns, puts over, transfers and
conveys to Newco the Assignment Interest, free and clear of all Encumbrances
other than Permitted Encumbrances (the “Assignment”).

 

1

--------------------------------------------------------------------------------

 

(b)        In consideration for Assignment, and simultaneously with the
execution of this Agreement, Newco is entering into the Trust Agreement,
pursuant to which Newco is appointing the Trustee to hold in trust the Trust
Property (as defined in the Trust Agreement) in favor of the Seller (as
beneficiary) (“Declaration of Trust”).

 

(c)        For the avoidance of doubt, Newco is not acquiring any right or
interest, including any royalty payment rights (other than the Assignment
Interest) under any GGL Agreement.  In no circumstances will the Assignment
Interest be based on:

 

(i)    any royalty or other payments received by Seller pursuant to the GGL
Agreements based on or relating to sales of Royalty Interest Products which
occur prior to the date hereof;

 

(ii)   any royalty or other payments received by Seller pursuant to any of the
GGL Agreements based on or relating to sales of Royalty Interest Products which
occur at any time after the end of the Royalty Interest Term with respect to any
Royalty Interest Product in any country;

 

(iii)  any royalty or other payments received by Seller   pursuant to any of the
GGL Agreements based on or relating to sales of any Excluded Products, whether
before, during or after the Royalty Interest Term; or

 

(iv)  any non-monetary consideration provided to Seller pursuant to the terms of
the GGL Agreements with respect to the Royalty Interest Products, subject to the
terms of Section 6.10 of this Agreement.

 

Section 2.2            Exclusion of GGL Agreement Rights.  It is understood and
agreed by the Parties that, notwithstanding anything to the contrary in the
Transaction Documents, Seller shall retain all of its rights and interests in,
and no rights or interests are being sold, granted, assigned, put over,
transferred or conveyed by Seller to Newco (other than the Assignment Interest)
under, any of the GGL Agreements or this Agreement.

 

Section 2.3            No Obligations Transferred.  Notwithstanding anything to
the contrary in this Agreement, the sale, grant, put over, assignment, transfer
and conveyance of the Assignment Interest shall not transfer to Newco, or make
Newco subject to, any obligation or liability of Seller under the GGL
Agreements, except as required to comply with the GGL Agreements (including the
confidentiality obligations therein).  For the avoidance of doubt, the foregoing
shall not (a) affect Seller’s or Newco’s rights under this Agreement or modify
the obligations Newco and Seller have under this Agreement or (b) affect any
liability of either Party to the other under the provisions of Article VIII
hereof.

 

Section 2.4            Intent; Savings Clause.

 

(a)        This Agreement is intended to effect a sale of the Assignment
Interest by Seller to Newco and, immediately after giving effect to the transfer
contemplated by Section 2.1, Seller will have no further interest (legal or
equitable) in any of the Assignment Interest.  The Seller hereby authorizes the
filing under the UCC of a financing statement in the form attached hereto as
Exhibit A with respect to the sale of the Assignment Interest by Seller to

 

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Newco, and any continuation statements (including amendments to effect such
continuation) required under the UCC with respect thereto reasonably requested
by Newco (subject to confidentiality obligations under the GGL Agreements) in
order to evidence such sale.

 

(b)        If, notwithstanding Section 2.4(a), the transfer of the Assignment
Interest pursuant to this Agreement (taken together with the Declaration of
Trust) is characterized as a collateral transfer for security or as a financing
transaction (a “Recharacterization Event”), Seller intends that Newco have a
first priority, perfected security interest in, and lien on, the Assignment
Interest to secure an obligation of Seller to pay to Newco an amount (the
“Seller Secured Amount”) equal to the Assignment Interest.  Accordingly, if a
Recharacterization Event occurs, Seller shall be deemed to have granted, and
Seller does hereby grant, a security interest in, to and under the Assignment
Interest and all proceeds thereof, whether now owned or existing or hereafter
acquired, in each case to secure the obligation of the Seller set forth in
Section 2.4(c).

 

(c)        If a Recharacterization Event has occurred, Seller agrees to pay or
cause to be paid to Newco all amounts that would have been required to be paid
to Newco if the Recharacterization Event had not occurred; such payments to be
made when, as and if payments of the Assignment Interest are received from GGL. 
The maximum amount payable by Seller to Newco pursuant to this Section 2.4 shall
be the Seller Secured Amount.  If Seller fails to pay to Newco any such amounts,
(i) Newco may exercise all rights and remedies of a secured party under the
relevant UCC (including the rights of a secured party obtaining a lien under
Section 9-608 of the relevant UCC) and (ii) Seller may exercise all of the
rights of a debtor granting a lien under the relevant UCC (including the rights
of a debtor granting a lien under Section 9-623).

 

ARTICLE III

 

CLOSING

 

Section 3.1            Closing.  The closing of the Transactions (the “Closing”)
will take place simultaneously with the execution of this Agreement by Seller
and Newco, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP; 525
University Avenue, Suite 1100; Palo Alto, California 94301.

 

Section 3.2            Delivery of Trust Agreement.  At the Closing, Newco and
Seller shall deliver to each other the executed Trust Agreement duly executed on
behalf of Seller, Newco and the other parties thereto.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as disclosed in the separate disclosure letter which has been delivered
by Seller to Newco prior to the execution of this Agreement (the “Seller
Disclosure Schedule”) (each of which disclosures shall be effective with respect
to (i) the corresponding sections and subsections of this Article IV, and
(ii) any other section or subsection of this Article IV, but only if the
relevance of that reference as an exception to (or a disclosure for purposes of)
such section

 

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or subsection would be reasonably apparent to a reasonable person who has read
that reference and such representations and warranties), Seller hereby
represents and warrants to Newco as of the date of this Agreement:

 

Section 4.1            Organization.  Seller is a corporation duly organized,
validly existing and in good standing, under the Laws of the state of Delaware. 
Seller has made available to Newco true, correct and complete copies of its
charter and bylaws, in each case as amended to the date hereof (the “Seller
Charter Documents”).  All Seller Charter Documents are in full force and
effect.  Seller is not in violation of the Seller Charter Documents, except as
would not have, individually or in the aggregate, a Seller Material Adverse
Effect.

 

Section 4.2            Power, Authorization and Enforceability.  Seller has all
necessary corporate power and authority to execute and deliver the Transaction
Documents to which it is a party, to perform its obligations hereunder and
thereunder, and to consummate the Transactions to which it is a party.  The
execution, delivery and performance by Seller of the Transaction Documents to
which it is a party and the consummation by Seller of the Transactions to which
it is a party have been duly and validly authorized by all necessary corporate
action of Seller, and no other corporate proceedings on the part of Seller are
necessary to authorize the execution, delivery and performance of this Agreement
or to consummate such Transactions.  This Agreement has been duly and validly
executed and delivered by Seller and, assuming it is duly and validly executed
and delivered by Newco, shall be a legal and valid binding obligation of Seller,
enforceable in accordance with its terms, subject to applicable Laws affecting
creditors’ rights generally and, as to enforcement, to general principles of
equity, regardless of whether applied in a proceeding at law or in equity.

 

Section 4.3            No Conflicts or Violations.  None of the execution and
delivery by Seller of the Transaction Documents to which it is a party, the
consummation by Seller of the Transactions to which it is a party, or Seller’s
compliance with such Transaction Documents will (a) conflict with or violate the
Seller Charter Documents, (b) constitute a breach or default by Seller under any
of the GGL Agreements, (c) constitute a breach or default under any agreement
(other than the GGL Agreements) to which Seller or any of its Subsidiaries is a
party or by which any of its or their property or assets are bound, (d) require
Seller to make any filing with or obtain any permit, authorization, consent or
approval of any Governmental Authority or other Person, or (e) violate any Law
or Order to which Seller or the Assignment Interest is subject, except, in the
case of Sections 4.3(b), (c), (d) and (e), as would not reasonably be expected
to result in a Seller Material Adverse Effect.

 

Section 4.4            Proceedings.  As of the date hereof, there is no action,
suit, proceeding or, to the Knowledge of Seller, investigation before any
Governmental Authority, court or arbitrator pending or, to the Knowledge of
Seller, threatened in writing against Seller or its Subsidiaries relating to the
GGL Agreements or the Assignment Interest, except as would not reasonably be
expected to result in a Seller Material Adverse Effect.

 

Section 4.5            GGL Agreements.

 

(a)        Validity and Enforceability.  Each of the GGL Agreements is a legal,
valid and binding obligation, in full force and effect, enforceable in
accordance with its terms in

 

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all material respects, of Seller and, to the Knowledge of Seller, of GGL,
subject to applicable Laws affecting creditors’ rights generally and, as to
enforcement, to general principles of equity, regardless of whether applied in a
proceeding at law or in equity.

 

(b)        Breach.  Seller is not in breach of any of the GGL Agreements in any
material respect.

 

(c)        Assignment.  Seller has not assigned to any Person any of the GGL
Agreements since their initial dates of execution, in whole or in part, except
as contemplated herein.

 

(d)        Other.

 

(i)    GGL does not have any right to unilaterally amend any GGL Agreement in
any manner which would or would reasonably be expected to result, individually
or in the aggregate, in a Seller Material Adverse Effect.

 

(ii)   The information publicly disclosed, as publicly amended and supplemented,
by Seller in the Seller Exchange Act Reports regarding the GGL Agreements and
the Royalty Interest Products, does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make such
information, in light of the circumstances in which it was disclosed, not
misleading.

 

Section 4.6            Contractual Rights to Royalty Interest.  Seller (i) is
the exclusive owner of Seller’s entire right and interest in, to and under the
GGL Agreements and the Royalty Interest, free and clear of all Encumbrances
other than Permitted Encumbrances and (ii) has not assigned or granted to any
Third Party any right or interest (including payments or proceeds) in or to any
Royalty Interest beneficially or otherwise.

 

Section 4.7            Intellectual Property.  To the Knowledge of Seller,
except as would not reasonably be expected to have a Seller Material Adverse
Effect:

 

(a)        there are no pending litigations, interferences, reexaminations,
post-grant proceedings or oppositions in any Major Market Country involving any
patents or patent applications owned by Seller and that cover the composition of
matter of any of the Royalty Interest Products (collectively, the “Key
Patents”);

 

(b)        the Key Patents that have been granted are valid and enforceable in
all material respects;

 

(c)        there is no Person who is or claims to be an inventor under any of
the Key Patents who is not a named inventor thereof;

 

(d)        Seller has not received written notice of any claim by any Person
challenging the ownership or the validity or enforceability of the Key Patents,
or asserting that

 

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the manufacture, importation, sale, offer for sale or use of any of the Royalty
Interest Products infringes such Person’s patents or other intellectual property
rights;

 

(e)        no Third Party patent rights have been, are or currently would be,
but for an infringement safe harbor, infringed by the manufacture, importation,
sale, offer for sale or use of any of the Royalty Interest Products;

 

(f)        no Person is infringing any of the Key Patents in any material
respect; and

 

(g)        all fees necessary to maintain in effect the issued Key Patents have
been paid as and when due.

 

Section 4.8            UCC Matters.  The Seller’s exact legal name is, and
during the five (5) years prior to the date hereof has been,
“Theravance, Inc.”.  The principal place of business of the Seller is, and
during the five (5) years prior to the date hereof has been, located in South
San Francisco.  The jurisdiction of organization of the Seller is, and has been
during the five (5) years prior to the date hereof, located in Delaware.  During
the five (5) years prior to the date hereof, the Seller has not been the subject
of any merger or limited partnership or other reorganization in which its
identity or status was materially changed, except in each case when it was the
surviving or resulting entity.

 

Section 4.9            No Implied Representations and Warranties.  Newco
acknowledges and agrees that: (i) other than the representations and warranties
of Seller specifically contained in this Article IV, there are no
representations or warranties of Seller or any other Person, and Seller hereby
disclaims all other representations and warranties, whether  express, statutory
or implied, in connection with this Agreement or the Transactions, including
with respect to the Assignment Interest, the GGL Agreements, the Royalty
Interest Products, the Key Patents or any other Intellectual Property or data
relating to the Royalty Interest Products including patents and patent
applications and other Intellectual Property owned by GGL, or the Transactions,
and (ii) Newco does not rely on, and Seller shall have no liability in respect
of, any representation or warranty not specifically set forth in this
Article IV.  Without limiting the foregoing, but subject to Section 4.5(d)(ii),
Newco acknowledges and agrees that (a)(i) the GGL Agreements generally impose
confidentiality obligations on information relating to or generated in
connection with those agreements and performance thereunder, and, accordingly,
Newco has made its own investigation and assessment of the Assignment Interest,
the Royalty Interest Products, the GGL Agreements, the Key Patents and any other
Intellectual Property related to the Royalty Interest Products, including
patents and patent applications and other Intellectual Property owned by GGL,
and the Transactions, that Newco is entering into this Agreement based on such
investigation and assessment and that Newco has not relied on and specifically
waives any representation, warranty, description or statement, express or
implied, set forth in any advertising, marketing literature or other
documentation or materials concerning the GGL Agreements, the Assignment
Interest, the Royalty Interest Products, the Key Patents and any other
Intellectual Property related to the Royalty Interest Products including patents
and patent applications and other Intellectual Property owned by GGL, and
(ii) Newco is not relying on, and shall have no remedies in respect of, any
implied warranties whatsoever, including as to the future amount or potential
amount of the Assignment Interest, the creditworthiness of GGL or

 

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any of its Affiliates or any other matter, and (b) except as expressly set forth
in any representation or warranty in this Article IV (as modified by the Seller
Disclosure Schedule), Seller shall have no liability for losses or damages
pursuant to this Agreement (or otherwise) with respect to any information,
documents or materials furnished or made available to Newco or any of its
Affiliates in any data room, presentation, interview or in any other form or
manner relating to the Transactions or the GGL Agreements.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF NEWCO

 

Except as disclosed in the separate disclosure letter which has been delivered
by Newco to Seller prior to the execution of this Agreement (the “Newco
Disclosure Schedule”) (each of which disclosures shall be effective with respect
to (i) the corresponding sections and subsections of this Article V, and
(ii) any other section or subsection of this Article V, but only if the
relevance of that reference as an exception to (or a disclosure for purposes of)
such section or subsection would be reasonably apparent to a reasonable person
who has read that reference and such representations and warranties), Newco
hereby represents and warrants to Seller as of the date of this Agreement:

 

Section 5.1            Organization.  Newco is a limited liability partnership
duly organized and validly existing under the laws of England and Wales.  Newco
has made available to Seller true, correct and complete copies of Newco’s
organizational documents (the “Newco Charter Documents”).  All Newco Charter
Documents are in full force and effect.  Newco is not in violation of the Newco
Charter Documents, except as would not have, individually or in the aggregate, a
Newco Material Adverse Effect.

 

Section 5.2            Power, Authorization and Enforceability.  Newco has all
necessary partnership power and authority to execute and deliver the Transaction
Documents to which it is a party, to perform its obligations thereunder, and to
consummate the Transactions to which it is a party.  The execution, delivery and
performance by Newco of the Transaction Documents to which it is party and the
consummation by Newco of the Transactions to which it is a party has been duly
and validly authorized by all necessary partnership action of Newco, and no
other partnership proceedings on the part of Newco are necessary to authorize
the execution, delivery and performance of such Transaction Documents or to
consummate such Transactions.  This Agreement has been duly and validly executed
and delivered by Newco and, assuming this Agreement is duly and validly executed
and delivered by Seller, shall be a legal and valid binding obligation of Newco,
enforceable in accordance with their respective terms, subject to applicable
Laws affecting creditors’ rights generally and, as to enforcement, to general
principles of equity, regardless of whether applied in a proceeding at law or in
equity.

 

Section 5.3            No Conflicts or Violations.  None of the execution and
delivery by Newco of the Transaction Documents to which it will be a party, the
consummation by Newco of the Transactions to which it is a party, or Newco’s
compliance with such Transaction Documents will (a) conflict with or violate the
Newco Charter Documents, (b) constitute a breach or default under any agreement
to which Newco or any of its Subsidiaries is a party or by which any of its or
their property or assets are bound, (c) require Newco to make any filing with or
obtain any

 

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permit, authorization, consent or approval of any Governmental Authority or
other Person, or (d) violate any Law or Order to which Newco is subject, except,
in the case of Sections 5.3(b), (c) and (d), as would not reasonably be expected
to result in a Newco Material Adverse Effect.

 

Section 5.4            Proceedings.  There is no action, suit, proceeding or, to
the Knowledge of Newco, investigation before any Governmental Authority, court
or arbitrator pending or, to the Knowledge of Newco, threatened in writing
against Newco or its Affiliates relating to the Transactions, except as would
not reasonably be expected to result in a Newco Material Adverse Effect.

 

Section 5.5            No Implied Representations and Warranties.  Seller
acknowledges and agrees that, other than the representations and warranties of
Newco specifically contained in this Article V, there are no representations or
warranties of Newco or any other Person either expressed or implied with respect
to the Assignment Interest or the Transactions, and that it does not rely on,
and Newco shall have no liability in respect of, any representation or warranty
not specifically set forth in this Article V.

 

ARTICLE VI
COVENANTS

 

Section 6.1            Payment of Assignment Interest.

 

(a)        The Parties shall work in good faith to negotiate the terms of the
Lock Box Arrangement that are reasonably acceptable to the parties and shall
cooperate fully in implementing the Lock Box Arrangement.  The parties
anticipate that the Lock Box Arrangement will provide for the establishment of a
bank account not within the dominion and control of the Seller into which GGL
shall be instructed to make payments in respect of the Assignment Interest and
from which the financial institution in control of the Lock Box Account will
disburse such amounts to the Account when, as and if any such amounts become
payable.  Notwithstanding the foregoing, the Parties hereby expressly agree that
Seller shall have fully satisfied the requirements of this Assignment Agreement
by delivering to GGL a written instruction to make all payments in respect of
the Assignment Interest into the Account; such instruction to be revocable only
upon completion of the Lock Box Arrangement.  Upon implementation of the Lock
Box Arrangement and the establishment of the Lock Box Account, the Seller shall
irrevocably instruct GGL to make any and all payments in respect of the
Assignment Interest into the Lock Box Account.  Notwithstanding the foregoing,
to the extent Seller receives any amounts in respect of the Assignment Interest
from GGL, Seller shall, within two (2) Business Days after such receipt remit,
by wire transfer of immediately available funds in United States Dollars to the
Account. All such payments are subject to withholding for Taxes, levies and
other duties as applicable under the GGL Agreement.

 

(b)        In the event that GGL reduces, deducts, offsets or excludes from
royalty payments made to Seller in respect of sales of Royalty Interest Products
any amounts that GGL claims Seller owes to GGL (i) related to the Royalty
Interest, the Transactions or any of the Transaction Documents (including any
deduction or withholding for Taxes), and Seller disputes any such reductions,
deductions, offsets or exclusions, Seller shall notify Newco (to the extent not
prohibited under the GGL Agreements) of such dispute and, upon resolution (if
any) of such

 

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dispute and payment of such disputed amount by GGL to Seller, Seller shall
instruct GGL to make a payment in respect of the Assignment Interest into the
Account with respect to such disputed amount, (ii) related to the Royalty
Interest and (A) there is no dispute between GGL and Seller as to the amount of
the royalty payment due in respect of a Royalty Interest Product under the GGL
Agreements, (B) there is no dispute between GGL and Seller as to the appropriate
amount of the reductions, deductions, offsets or exclusions from such royalty
payment and (C) Seller nonetheless consents to a reduction, deduction, offset or
exclusion from such royalty payment of an amount in excess of the appropriate
reduction, deduction, offset or exclusion amount, then Seller shall pay to the
Account an amount equal to such agreed to reduction, deduction, offset or
exclusion in excess of such appropriate amount of reductions, deductions,
offsets and exclusions multiplied by the Percentage, or (iii) unrelated to the
Royalty Interest, the Transactions or any of the Transaction Documents, then,
Seller shall pay to the Account an amount equal to the amount of such reduction,
deduction, offset or exclusion multiplied by the Percentage.

 

(c)        To the extent that any amount other than payments of the Assignment
Interest is deposited by GGL in the Account, Newco shall, within two
(2) Business Days after becoming aware thereof (but in no event prior to receipt
of such amount by Newco from the Account), remit such amount, by wire transfer
of immediately available funds in United States Dollars to Seller.

 

(d)        Newco acknowledges and agrees that Seller is not guaranteeing the
performance or payment by GGL of its obligations under the GGL Agreements, and
without limiting the foregoing, Newco shall have no recourse to Seller under
this Agreement or otherwise due to GGL’s failure to perform its obligations
under or breach of the GGL Agreements.

 

(e)        To the extent that Seller incurs any out-of-pocket costs and expenses
under the GGL Agreements in connection with the Royalty Interest or brings suit
or other action against GGL to enforce Seller’s rights or GGL’s obligations
under the GGL Agreements with respect to or to the extent affecting the Royalty
Interest, Seller shall be entitled to receive from the Trustee pursuant to
Section 7.1 of the Trust Agreement an amount equal to the product of (x) the
Percentage multiplied by (y) such out-of-pocket costs and expenses actually
incurred by Seller and not reimbursed by GGL pursuant to the GGL Agreements
(“Cost-Sharing Deductions”) without duplication (after giving effect to all
actions taken under the other Transaction Documents and the Participation
Agreement).  In the event that any amounts then in the Account are insufficient
to pay in full the Cost-Sharing Deductions, then Newco shall, promptly upon
demand from Seller, pay Seller the extent of any such insufficiency.  To the
extent Seller is subsequently reimbursed by GGL for such Cost-Sharing
Deductions, Seller shall deposit into the Account an amount equal to the product
of (x) the Percentage multiplied by (y) the amount of such reimbursement.

 

Section 6.2            Tax Matters.

 

(a)        Seller shall be entitled to deduct and withhold from the amounts paid
or delivered in connection with the Transactions any amounts that Seller is
required to deduct and withhold with respect to any such deliveries and payments
under the Internal

 

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Revenue Code of 1986, as amended, or any provision of state, local, or non-U.S.
Law.  To the extent that Seller withholds such amounts and remits such withheld
amounts to the applicable Governmental Authority, such withheld amounts shall be
treated as having been paid to or on behalf of Newco.  If Seller determines that
it is required by Law to deduct and withhold any amount as described in this
Section 6.2(a), Seller shall notify Newco of any such requirement as soon as
reasonably practical after such determination is made by Seller.

 

(b)        To the extent not prohibited by the GGL Agreements, Seller agrees to
use its commercially reasonable efforts to provide in a timely manner such
cooperation or assistance, (including by providing any necessary tax forms or
other documents) as may be reasonably requested by Newco (at the sole cost of
Newco) at any time after the date of this Agreement, so long as the cooperation
or assistance could not reasonably be expected to prejudice in any material
respect the legal or commercial position of Seller, in order to reduce or
eliminate any amounts deducted or withheld pursuant to Section 6.2(a) or any
amounts deducted or withheld by GGL on a Royalty Interest payment under the GGL
Agreements.

 

Section 6.3            GGL Agreements.

 

(a)        Seller shall comply in all material respects with its obligations
under the GGL Agreements.

 

(b)        Seller agrees that it will not, without Newco’s prior written
consent, (i) consent to any termination of the GGL Agreements with respect to
the Royalty Interest Products, (ii) consent to any amendment of the provisions
of the GGL Agreements that implement the formula for calculating the royalties
payable under the Royalty Interest or (iii) impose an Encumbrance on the
Assignment Interest.

 

(c)        Newco acknowledges and agrees that, except for the express covenants
contained in the Transaction Documents, Seller shall have any obligation or
liability, whether express or implied, in connection with the exercise of
Seller’s rights and performance of its obligations under the GGL Agreements and
that neither Newco nor any other person shall have any claim of any kind against
Seller based on or arising out of Seller’s performance under or in connection
with the GGL Agreements, it being understood that Seller shall not be liable or
have any obligation with respect to allocations of resources, scope, intensity
and duration of efforts, and decisions and judgments made in connection with
development and commercialization (including any acts or omissions that result
in, or increase the likelihood of, greater or lesser commercial success)
(i) with respect to, or as among, any Royalty Interest Products, or (ii) as
among any one or more Royalty Interest Products, on the one hand, and any
Excluded Products, other products or therapeutically active components, on the
other hand.

 

(d)        The Parties hereto acknowledge and agree (and expressly and
irrevocably disclaim any right to the contrary) that, notwithstanding any other
provision of this Agreement or any other Transaction Document to the contrary,
Newco has the nonexclusive right, but no obligation, to bring any enforcement
action against GGL under any of the GGL Agreements, and neither the Trustee nor
the Beneficiary shall have any third party beneficiary rights (expressed,
implied or otherwise) in connection with the GGL Agreements.  Any such
enforcement action by Newco requires the consent of the general manager of
Newco.

 

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Section 6.4            Confidentiality.

 

(a)        Definition.  “Confidential Information” means all information
(whether written or oral, or in electronic or other form, and whether furnished
before or after the date of this Agreement) disclosed or made available to Newco
by or on behalf of Seller concerning, or relating in any way, directly or
indirectly, to this Agreement, the Transactions or the Royalty Interest,
including (i) this Agreement,  including all terms and conditions hereof,
(ii) any royalty information, assignments, notices, requests, correspondence or
other information furnished pursuant to this Agreement, and any other reports,
data, materials, notices, correspondence or documents of any kind relating in
any way, directly or indirectly, to this Agreement, the Royalty Interest or the
intellectual property, compounds or products giving rise to the Royalty
Interest, (iii) any inventions, devices, improvements, formulations,
discoveries, compositions, ingredients, patents, patent applications, know-how,
processes, trial results, research, developments or any other intellectual
property, trade secrets or information involving or relating in any way,
directly or indirectly, to the Royalty Interest or the compounds or products
giving rise to the Royalty Interest, and (iv) any other material proprietary and
confidential information, in whatever form.

 

(b)        Exclusions.  Confidential Information will not include information
which:

 

(i)    at or prior to the time of disclosure by Seller was known to Newco
through lawful means and is not under any obligation of confidentiality, as
evidenced by Newco’s written records;

 

(ii)   at or after the time of disclosure by Seller becomes generally available
to the public through no act or omission on the part of Newco in violation of
any obligation of confidentiality or any other legal, contractual or fiduciary
obligation to Seller, GGL or any of their respective Affiliates, as evidenced by
documents that were generally published prior to any disclosure of such
information by Seller;

 

(iii)  is developed by Newco independent of, and without any use of or access or
reference to Confidential Information, as evidenced by Newco’s written records;
or

 

(iv)  Newco receives from a Third Party free to make such disclosure free of any
obligation of confidentiality and without breach of any other legal obligation;
provided that such Third Party, had the right to disclose such information to
Newco (free of any obligation of confidentiality and without any legal,
contractual or fiduciary obligation to Seller, GGL or any of their respective
Affiliates) as evidenced by Newco’s written records.

 

(c)        Requirements.  Newco acknowledges the confidential and proprietary
nature of the Confidential Information and agrees that it shall not discuss,
reveal, or disclose the Confidential Information to any other Person, or use any
Confidential Information for any purpose, other than in connection with the
performance of this Agreement, in each case,

 

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without the prior written consent of Seller.  Newco agrees to take all
reasonable precautions (no less rigorous than Newco takes with respect to its
own comparable confidential and proprietary information) to prevent unauthorized
or inadvertent disclosure of the Confidential Information.

 

(d)        Disclosure, Legal Obligations.  Notwithstanding the foregoing, Newco
may disclose such Confidential Information to its officers, directors,
employees, accountants, counsel, consultants, advisors and agents who need to
know such information in connection with Newco’s evaluation and performance of
the Transactions and to its lenders or other financing sources in connection
with obtaining financing for Newco’s operations, so long as (i) such Persons are
informed by Newco of the confidential nature of such Confidential Information
and agree to treat such information confidentially in accordance with the
requirements of this Section 6.4 for the benefit of Seller and (ii) Newco shall
be liable for any breach or violation of such obligations by any such Person. 
Newco may also disclose Confidential Information to the extent required by Law,
including the applicable rules of any stock exchange that are binding on Newco,
provided that Newco shall use its reasonable best efforts to notify Seller of
such requirement (to the extent permitted by applicable Law) promptly and
sufficiently in advance of any such disclosure so that Seller may seek an
appropriate protective order or other appropriate remedy.  Newco shall use its
reasonable best efforts to  limit such disclosures to that portion of the
information legally required to be disclosed and shall use its reasonable best
efforts to seek confidential treatment for such information if so requested by
Seller.  In addition, the Parties will coordinate in advance with each other in
connection with the redaction of certain provisions of this Agreement with
respect to any SEC or foreign equivalent filings of this Agreement, and each
Party shall use its reasonable best efforts to seek confidential treatment for
such terms if so requested by the other Party.

 

(e)        Return of Information.  Newco will, at the request of Seller, after
the expiration of the Term or effective termination of this Agreement
(i) promptly return all Confidential Information held or used by Newco in
whatever form, or (ii) at the discretion of Seller, promptly destroy all such
Confidential Information, including all copies thereof, and those portions of
all documents (e.g., analyses, summaries, etc.) that incorporate or are based on
Confidential Information; provided, however, that (x) Newco’s legal department
may retain one copy of such information for legal compliance purposes only for
so long as required by applicable Law or Newco’s bona fide pre-existing
record-keeping policy, and (y) notwithstanding anything else in this Agreement
to the contrary, the confidentiality restrictions imposed hereby shall continue
to apply to such information, and shall survive any termination of this
Agreement, for so long as such information is retained.  At the request of
Seller, Newco will promptly certify that it has complied in full with this
Section 6.4

 

Section 6.5            Information Rights.  Newco hereby acknowledges the
confidentiality obligations imposed on Seller by the GGL Agreements. 
Notwithstanding any other provision of this Agreement, Newco agrees that Seller
shall not, and shall not be required to, disclose any information in violation
of its obligations under the GGL Agreements.  Unless prohibited under the GGL
Agreements (as determined in Seller’s sole reasonable discretion), Seller shall
use its reasonable efforts to provide to Newco information reasonably requested
by Newco that is material to the Assignment Interest (it being understood that
Seller shall not be required to undertake litigation or incur significant
expense pursuant to this Section 6.4).

 

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Section 6.6            Books and Records.  For accounting purposes only, each of
the Parties will treat the sale and assignment to Newco of the Assignment
Interest pursuant to Section 2.1 as a sale and assignment on its books and
records to the extent permitted under generally accepted accounting principles
in the United States.

 

Section 6.7            Public Announcement.  Except as required by applicable
Law and subject to the final two (2) sentences of this Section 6.5, neither
Party will make any public announcement of any information regarding this
Agreement without the prior written approval of the other Party, which approval
shall not be unreasonably withheld, conditioned or delayed; provided that the
foregoing restriction shall not restrict Seller from making any public
announcement of any information regarding the Royalty Interest Products.  Once
any statement is approved for disclosure by the Parties or information is
otherwise made public in accordance with the preceding sentence, either Party
may make a subsequent public disclosure of the contents of such statement
without further approval of the other Party.  Notwithstanding the foregoing,
within sixty (60) days following the Closing, appropriate representatives of the
Parties will meet and agree upon a process and principles for reaching timely
consensus on how the Parties will make public disclosure concerning this
Agreement.

 

Section 6.8            UCC Matters.  The Seller shall file and maintain in
effect all UCC filings, and shall take such other actions under the UCC, as may
be necessary to protect the validity and perfection of Newco’s Assignment
Interest under the UCC.  The Seller will not change its location (within the
meaning of Sections 9-301 and 9-307 of the applicable UCC) or its legal name
without at least ten (10) days’ prior written notice to the Newco.  In the event
that the Seller desires to so change its location or change its legal name, the
Seller will make any required filings and will deliver to the Newco copies of
all such required filings with the filing information duly noted thereon by the
office in which such filings were made.

 

Section 6.9            Royalty Interest Disclosures.  Seller shall comply with
its obligations under applicable Law to make prompt disclosure to the public of
material information concerning the Royalty Interest.

 

Section 6.10          Non-Cash Consideration.  In the event a Royalty Interest
is paid other than in cash, Seller shall pay to the Account an amount in cash
equal to the fair market value, as reasonably determined by Seller, of the
Percentage of such non-cash consideration as promptly as reasonably practicable
following the determination of the fair market value of such non-cash
consideration.

 

ARTICLE VII

 

TERM

 

Section 7.1            Term.  The term of this Agreement shall commence on the
date hereof and end, with respect to each Royalty Interest Product, upon
expiration or termination (including any early termination) of the Royalty
Interest Term with respect to such Royalty Interest Product (the “Term”).

 

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ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.1            Indemnification by Seller.  Subject to the terms and
conditions of this Article VIII, Seller shall indemnify Newco and its officers,
directors, managers, agents and representatives (but expressly excluding any
Trustee or Beneficiary) (collectively “Newco Indemnitees”) from and against any
and all direct damages, losses, claims, costs, liabilities, demands or expenses
(including reasonable attorneys’ fees and expenses in connection with any
action, suit or proceeding) (collectively, “Losses”) suffered or incurred by any
such Newco Indemnitee arising from:

 

(a)        any breach of any representation or warranty made by Seller in this
Agreement (provided, however, that for purposes of determining whether a breach
of the representations and warranties set forth in Sections 4.1, 4.3, 4.4,
4.5(a), 4.5(b), 4.5(d)(i) and 4.7 has occurred for purposes of this
Section 8.1(a) only, a violation, conflict, breach, default, failure or the
existence of a state of facts or circumstances shall be deemed to be material or
to have a Seller Material Adverse Effect if it changes the royalty rate payable
in respect of the Royalty Interest Products in a manner adverse to Newco); and

 

(b)        any breach of any covenant of Seller contained in this Agreement.

 

Section 8.2            Indemnification by Newco.  Subject to the terms and
conditions of this Article VIII, Newco shall indemnify Seller, its Affiliates
and each of their respective officers, directors, managers, agents and
representatives (collectively “Seller Indemnitees”) from and against any and all
Losses suffered or incurred by any such Seller Indemnitee arising from:

 

(a)        any breach of any representation or warranty made by Newco in this
Agreement; and

 

(b)        any breach of any covenant of Newco contained in this Agreement.

 

Section 8.3            Indemnification Procedure.

 

(a)        Third-Party Claims.

 

(i)    Notice of Third-Party Claims. A Party seeking indemnification (the
“Indemnified Party”) with respect to any claim or demand made by any Person
against the Indemnified Party (a “Third-Party Claim”) shall promptly notify the
other Party (the “Indemnifying Party”) in writing (including in such notice a
brief description of the claim for indemnification and the Loss, including
damages sought or estimated, to the extent actually known or reasonably capable
of estimation by the Indemnified Party) of any claim for indemnification,
provided that failure to give such notice shall not relieve the Indemnifying
Party of any liability hereunder except to the extent the Indemnifying Party is
materially prejudiced by such failure.

 

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(ii)   Defense of Third-Party Claims.  The Indemnifying Party shall be entitled
to participate in the defense of the Third-Party Claim and, if it so chooses, to
assume the defense thereof, at its own expense, with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemnified Party.  If the Indemnifying Party assumes the defense thereof,
the Indemnifying Party (1) shall not be liable to the Indemnified Party for
legal expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof, and (2) shall permit the Indemnified Party to participate
in, but not control, the defense of any such action or suit through counsel
chosen by the Indemnified Party, provided that such counsel is not reasonably
objected to by the Indemnifying Party and the fees and expenses of such counsel
shall be borne by the Indemnified Party.  The Indemnifying Party shall be liable
for the fees and expenses of counsel employed by the Indemnified Party in the
defense of a Third-Party Claim for any period during which the Indemnifying
Party has not assumed the defense thereof (other than during the period prior to
the time the Indemnified Party shall have notified the Indemnifying Party of
such Third-Party Claim).

 

(iii)  Cooperation.  The Indemnified Party shall, if requested by the
Indemnifying Party, give reasonable assistance to  and cooperate with the
Indemnifying Party in defense of any claim.  The Indemnifying Party shall
reimburse the Indemnified Party for any Third Party reasonable legal expenses
directly incurred from providing such assistance and cooperation.  Such
assistance and cooperation shall include (1) the retention of and the provision
to the Indemnifying Party of records and information that are reasonably
relevant to such Third-Party Claim and (2) the making available of employees on
a mutually convenient basis for providing additional information and explanation
of any material provided hereunder.  The Indemnifying Party shall have the right
to consent to the entry of judgment with respect to, or otherwise settle, a
Third-Party Claim with the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld; provided that the Indemnified Party
may withhold its consent if any such judgment or settlement imposes an
unreimbursed monetary or continuing non-monetary obligation on such Indemnified
Party or does not include an unconditional release of such Indemnified Party and
its Affiliates from all liability in respect of claims that are the subject
matter of the indemnified claim.  Regardless of whether the Indemnifying Party
shall have assumed defense of a Third-Party Claim, the Indemnified Party shall
not be entitled to be indemnified pursuant to this Article VIII if the
Indemnified Party shall settle such Third-Party Claim without the prior written
consent of the Indemnifying Party.

 

(b)        Claims by a Party.  In order for an Indemnified Party to be entitled
to any indemnification under this Article VIII in respect of Losses that do not
arise out of or involve a Third Party Claim, the Indemnified Party must notify
the Indemnifying Party promptly in writing (including in such notice a brief
description of the claim for indemnification and the Loss, including damages
sought or estimated, to the extent actually known or reasonably capable of
estimation by the Indemnified Party); provided, that, the failure to promptly
provide such

 

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notice shall not affect the indemnification provided under this Article VIII
except to the extent that the Indemnifying Party has been actually prejudiced as
a result of such failure.

 

Section 8.4            Claims Period for Breach of Representations and
Warranties.  The representations and warranties contained in this Agreement
shall not survive the Closing; however, claims for breach of the:
(a) representations and warranties contained in this Agreement (other than any
claims for breach of the Fundamental Representations) may be made at any time
following the Closing and up to and including the date that is the first
anniversary of the date hereof; and (b) Fundamental Representations may be made
at any time following the Closing and prior to the expiration of the applicable
statute of limitations.  In no event shall any Party hereto have any liability
for any breach of a representation or warranty set forth in this Agreement
unless the other Party hereto shall have delivered a notice to such Party,
pursuant to Section 8.3 prior to the deadline applicable to the making of such
claim set forth in the preceding sentence.

 

Section 8.5            Limitations on Indemnification.

 

(a)        Notwithstanding anything herein to the contrary, Seller shall have no
liability to Newco under this Agreement for any action taken by Seller or any
failure by Seller to take any action pursuant to Article VI in compliance with
any written instructions of Newco or with the prior written consent of Newco.

 

(b)        Seller or Newco as applicable, shall not be obligated to indemnify
any Newco Indemnitee or Seller Indemnitee, as applicable, if the Losses incurred
by such Person arise from the gross negligence, fraud or willful misconduct of
Newco or Seller, as applicable, or their respective Affiliates, officers,
directors, managers, agents and representatives (acting in their capacity as
such).

 

(c)        Notwithstanding anything in this Agreement to the contrary, Seller
shall not have any liability under: (i) Section 8.1 with respect to any
individual item (or any series of related items) if the Loss related thereto is
less than US$750,000, and such items shall not be aggregated for purposes of
Section 8.5(c)(ii); (ii) Section 8.1(a) unless the aggregate liability for all
Losses suffered by the Newco Indemnitees thereunder exceeds US$15,000,000, and
then only to the extent of such excess; or (iii) Section 8.1 in excess of the
amount by which (x) the One Billion United States Dollars (US$1,000,000,000)
exceeds (y) the aggregate amount of payments made to Newco in respect of the
Assignment Interest theretofore received or receivable by Newco, in the
aggregate; provided, however, that the cap set forth in clause (iii) shall not
be less than Two Hundred Million Dollars (US$200,000,000) except with respect to
any breach for which indemnification is sought that arises from or relates to a
Specified Claim.  Notwithstanding anything to the contrary in any Transaction
Document, for any Loss for which Seller must indemnify any Newco Indemnitee
under this Agreement, the amount paid by Seller shall count toward the liability
cap under both this Agreement and under the Participation Agreement and in no
event shall Seller have any liability for Losses under the this Agreement
arising out of the same matter or set of facts or circumstances as any claims
made, or for which a claim could be made, under the Participation Agreement.

 

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(d)        Notwithstanding anything in this Agreement to the contrary, Newco
shall not have any liability under: (i) Section 8.2 with respect to any
individual item (or any series of related items) if the Loss related thereto is
less than US$750,000, and such items shall not be aggregated for purposes of
Section 8.5(d)(ii); (ii) Section 8.2(a) unless the aggregate liability for all
Losses suffered by the Seller Indemnitees thereunder exceeds US$15,000,000, and
then only to the extent of such excess or (iii) after the Closing, Section 8.2
in excess of US$1,000,000,000.

 

(e)        The amount of any Losses payable under this Article VIII by an
Indemnifying Party shall be reduced by the amount, if any, of any tax benefit
available to the Indemnified Party by reason of such Losses or the payment
thereof and by any insurance proceeds or other recovery from a Third Party
received by the Indemnified Party (net of any expenses incurred by such
Indemnified Party in procuring such recovery) in connection with the matter out
of which such Losses arise.  If the Indemnified Party receives any proceeds
subsequent to an indemnification payment by the Indemnifying Party, then such
Indemnified Party shall reimburse the Indemnifying Party as promptly as
practicable thereafter for any payment made by such Indemnifying Party pursuant
to such Indemnifying Party’s indemnification obligations hereunder up to the
amount received pursuant to this Article VIII by the Indemnified Party from such
Indemnifying Party (net of any expenses incurred by such Indemnified Party in
procuring such recovery).

 

(f)        For purposes of determining the amount of any Losses payable pursuant
to Sections 8.1 or 8.2 (but not, for the avoidance of doubt, for the purposes of
determining the existence of a breach), any qualification as to materiality,
Seller Material Adverse Effect or Newco Material Adverse Effect contained in the
applicable underlying representation or warranty shall be disregarded.

 

(g)        To the extent Seller is obligated to indemnify Purchaser for any
Losses arising out of the same occurrence or omission in respect of which Seller
is liable to Newco under the provisions of this Article VIII, Seller shall
indemnify Purchaser pursuant to the Participation Agreement with respect to such
occurrence or omission, and Newco’s claims with respect to such occurrence or
omission shall be deemed to have been satisfied in respect thereof following
such indemnification of Purchaser.

 

Section 8.6            Exclusive Remedy.  Notwithstanding anything to the
contrary in the Transaction Documents, the Parties hereto acknowledge and agree
that this Article VIII (including Section 8.4 and Section 8.5) shall provide the
Parties’ sole and exclusive remedy with respect to any matter or claim arising
out of, relating to, or in connection with, the Transaction Documents and the
Transactions, except (i) for fraud or willful misconduct and (ii) injunctive
relief or claims for specific performance pursuant to Section 9.4 (Specific
Performance).

 

Section 8.7            Disclaimer of Consequential Damages.

 

(a)        EXCEPT WITH RESPECT TO (i) A PARTY’S FRAUD OR WILLFUL MISCONDUCT, OR
(ii) LOSSES ACTUALLY PAID TO A THIRD PARTY PURSUANT TO A THIRD-PARTY CLAIM IN
ACCORDANCE WITH ARTICLE VIII, TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO
EVENT SHALL EITHER

 

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PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTIES FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INVESTMENT LOSSES, LOST
PROFITS, LOSS OF DATA, OR LOSS OF USE ARISING IN ANY MANNER OUT OF OR IN
CONNECTION WITH THE TRANSACTION DOCUMENTS HOWEVER CAUSED WHETHER BY NEGLIGENCE,
BREACH OF CONTRACT, TORT OR OTHERWISE AND WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF ANY SUCH
DAMAGES.

 

(b)        THE PARTIES HAVE AGREED THAT THE LIABILITY LIMITATIONS SPECIFIED IN
SECTION 8.5 AND THIS SECTION 8.7 WILL SURVIVE AND APPLY EVEN IF ANY LIMITED
REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED ITS ESSENTIAL
PURPOSE.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1            Assignment.

 

(a)        Assignment by Seller.  Seller may not assign or otherwise transfer
this Agreement without the prior written consent of Newco, except that Seller
may assign this Agreement, in whole or in part, to (A) an acquiror of Seller or
a successor to all or substantially all of the assets of Seller, whether by
merger, sale of stock, sale of assets or other similar transaction, (B) with
respect to any Royalty Interest Product, an Applicable Successor to Seller
relating to such Royalty Interest Product, whether by merger, sale of stock,
sale of assets or other similar transaction or (C) an Affiliate of Seller for so
long as such Affiliate remains an Affiliate of Seller and if Seller guarantees
the performance of this Agreement by such Affiliate.

 

(b)        Assignment by Newco.  Newco may not assign or transfer this Agreement
or the Assignment Interest, in whole or in part, without the prior written
consent of Seller.

 

(c)        Seller Corporate Reorganization.  Notwithstanding anything to the
contrary herein, Seller shall be permitted to assign this Agreement and the
rights and obligations hereunder in respect of the MABA ‘081 Royalty Interest,
in whole or in part, without Newco’s consent, to a Third Party pursuant to the
Seller Corporate Reorganization.

 

(d)        Successors and Assigns.  Subject to the terms and conditions of this
Section 9.1, this Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their permitted successors and assigns.  Any purported
assignment or other transfer in violation of this Section 9.1 shall be void ab
initio and of no force or effect.

 

Section 9.2            Further Assurances.  From time to time, as and when
reasonably requested by any Party, each Party shall execute and deliver, or
cause to be executed and delivered, all such documents, certificates, agreements
and instruments, and shall take, or cause to be taken, all such further or other
actions, as are reasonably necessary and appropriate to carry out all of the
provisions of this Agreement, or to consummate the Transactions.

 

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Section 9.3            Notices.  All notices, requests, demands, consents,
waivers or other communications to or from either Party to the other Party must
be in writing and will be deemed to have been given

 

(a)        upon delivery, including upon confirmation by the carrier of delivery
(which may be in electronic form), if delivered by hand or mailed via overnight
or express mail service or by courier,

 

(b)        in the case of a fax, when receipt is confirmed by telephone, reply
email or reply fax from the recipient or other fax confirmation of receipt, or

 

(c)        in the case of an email, when receipt is confirmed by telephone or
reply email from the recipient,

 

addressed as follows (or to such other address or addresses as the Seller or the
Newco may from time to time designate by notice given in accordance with this
Section 9.3:

 

if to Seller:

 

Theravance, Inc.
901 Gateway Boulevard
South San Francisco, CA 94080

 

Attention of: Bradford J. Shafer, Senior Vice President & General Counsel

 

Fax No.:

(650) 808-6095

 

 

E-mail:

bshafer@theravance.com

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom, LLP
525 University Avenue, Suite 1100
Palo Alto, California 94301

 

Attention of:  Amr Razzak

 

Fax No.:

(650) 470-4570

 

 

E-Mail:

amr.razzak@skadden.com

 

if to the Newco:

 

[Newco]

 

[Address]

 

Attention of:

 

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Fax No.:

 

E-mail:

 

with a copy to:

 

[Address]

 

Attention of:

 

Fax No.:

 

E-Mail:

 

Section 9.4            Specific Performance.  Each of the Parties hereto
acknowledges that the other Party may have no adequate remedy at law if the
first Party fails to perform any of its non-monetary obligations under this
Agreement.  In such event, each of the Parties agrees that the other Party shall
have the right, in addition to any other rights it has (whether at law or in
equity), to pursue equitable remedies such as an injunction or specific
performance of this Agreement without necessity of posting any bond or
undertaking in connection therewith.  This remedy is separate and apart from any
other remedy the Parties may have under this Agreement.

 

Section 9.5            Title; Headings; Captions.  The title, headings and
captions in this Agreement are included for convenience only and will not affect
the meaning or interpretation of any provision of this Agreement.

 

Section 9.6            Independent Contractors.  The Parties recognize and agree
that each is operating as an independent contractor and not as an agent or
fiduciary of the other.  Notwithstanding any provision of this Agreement which
may indicate otherwise, it is the specific intent of the Parties that this
Agreement and the relationship created hereby is not, nor shall it be deemed to
be, a separate entity, joint venture or partnership or any similar arrangement,
nor shall any master/servant, employer/employee or principal/agent relationship
be created between the Parties.

 

Section 9.7            Third-Party Beneficiaries.  Except to the extent
expressly contemplated with respect to Seller Indemnitees and Newco Indemnitees
in Article VIII, this Agreement is for the sole benefit of Seller and Newco and
their permitted successors and assigns, and nothing herein expressed or implied
shall give or be construed to give to any Person (including Trustee or
Beneficiary), other than the parties hereto and such permitted successors and
assigns, any legal or equitable rights hereunder.  Notwithstanding anything
herein to the contrary, with respect to any indemnification claim made pursuant
to Article VIII, Seller or Newco shall make such claim on behalf of the
applicable Seller Indemnitee or Newco Indemnitee, as applicable, and such Person
(unless such Person is Seller or Newco, itself) shall not be entitled to
directly make such claim against Newco or Seller, as applicable.

 

Section 9.8            Entire Agreement.  This Agreement, along with the
Appendices, Exhibits, Schedules, Seller Disclosure Letter and Newco Disclosure
Letter and other attachments hereto, sets forth the entire agreement and
understanding between the Parties hereto with respect

 

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to the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings relating to such subject matter.

 

Section 9.9            Amendment and Supplementation.  This Agreement may be
amended, modified or supplemented only by a written agreement signed by both
Parties.

 

Section 9.10          No Waiver.  Any waiver of, or consent to depart from, the
requirements of any provision of this Agreement shall be effective only if it is
in writing and signed by the Party giving it, and only in the specific instance
and for the specific purpose for which it has been given.  No failure or delay
of either Party in exercising any power, right or remedy under this Agreement
will operate as a waiver.  No single or partial exercise of any power, right or
remedy precludes any other or further exercise of such power, right or remedy or
the exercise of any other power, right or remedy.

 

Section 9.11          Severability.  If any of the covenants, agreements or
terms of this Agreement is held invalid, illegal or unenforceable, then it will
be deemed severable from the remaining covenants, agreements or terms of this
Agreement and will in no way affect the validity, legality or enforceability of
the remaining Agreement. Upon such determination that any covenant, agreement or
term is invalid, illegal or unenforceable, this Agreement shall be deemed
modified so as to effect the original intent of the Parties as closely as
possible in order that the Transactions be consummated as originally
contemplated to the fullest extent consistent with applicable Law.

 

Section 9.12          Governing Law.  THIS AGREEMENT AND ALL ACTIONS,
PROCEEDINGS OR COUNTERCLAIMS (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF EXCEPT AS SET FORTH IN SECTIONS
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

Section 9.13          Submission to Jurisdiction.  The parties submit to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State Court sitting in New York, New
York for purposes of all legal proceedings arising out of or relating to this
Agreement. The parties irrevocably waive, to the fullest extent they may do so,
any objection that they may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.

 

Section 9.14          Waiver of Jury Trial.  Each Party irrevocably waives, to
the fullest extent permitted by applicable Law, any and all right to trial by
jury in any legal proceeding directly or indirectly arising out of or relating
to this Agreement or the Transactions.

 

Section 9.15          Counterparts.  This Agreement may be executed in any
number of counterparts.  Each counterpart will be an original, and all
counterparts will together constitute one and the same instrument.  Delivery of
an executed counterpart via PDF or other electronic delivery shall be considered
the same as delivery of a manually executed counterpart.

 

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[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have set their hands by their authorized
representatives as of the year and date first indicated above.

 

 

THERAVANCE, INC.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

[NEWCO]

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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APPENDIX A

 

DEFINED TERMS

 

A.            DEFINITIONS.

 

For the purposes of this Agreement, unless otherwise indicated, the following
terms shall have the respective meanings specified below, and grammatical
variations of such terms shall have corresponding meanings:

 

1.                                      “Account” has the meaning set forth in
the Trust Agreement.

 

2.                                      “Affiliate” means, with respect to
either Party, any other Person directly or indirectly controlling, controlled by
or under common control with, such Party.  For the purposes of this definition
“control” means the possession, directly or indirectly, of (a) the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or other equity interest,
representation on its board of directors or body performing similar functions,
by contract or otherwise, together with (b) ownership of the related equity
interest in such Person; and the terms “controlling” and “controlled” have
corollary meanings.

 

3.                                      “Agreement” has the meaning set forth in
the introductory paragraph of this Agreement.

 

4.                                      “ANORO” means (a) the combination
medicine comprising UMEC with VI, with no other therapeutically active
component, and explicitly excluding either component as a monotherapy, and which
is proposed, as of the date hereof, to be sold under the brand name “ANORO™
ELLIPTA™”, and (b) any and all product improvements, additional claims, line
extensions, dosage changes and alternate delivery systems, in each case, with
respect to only such combination medicine set forth in subsection (a) comprising
UMEC with VI, with no other therapeutically active component (and explicitly
excluding either component as a monotherapy).

 

5.                                      “ANORO Royalty Interest”:

 

(a)                                 Means Seller’s entitlement under the
Collaboration Agreement to receive the following payments during the Royalty
Interest Term, subject to subsections (b), (c) and (d) of this definition:

 

(i)                                     royalty payments on any net sales
worldwide of ANORO by or on behalf of GGL, pursuant to Section 6.3 of the
Collaboration Agreement;

 

(ii)                                  any interest on amounts referred to in
clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the
Collaboration Agreement;

 

A-1

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(iii)                               any Infringement Payments with respect to
ANORO in lieu of the payments referred to in clause (a)(i) immediately above;
and

 

(iv)                              any Other Amounts with respect to ANORO in
lieu of the payments referred to in clause (a)(i) immediately above.

 

(b)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9
of the Collaboration Agreement.  The VI Reverse Milestone Payment Obligation
shall remain the obligation of Seller, and shall not be a reduction, deduction,
offset or exclusion from the royalty payments under subsection (a) above of this
definition.

 

(c)                                        The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to
reduction, deduction, offset and exclusion from such royalties of any
Cost-Sharing Deductions (without double counting).

 

(d)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition does not include
any (i) signing payments (including any signing payments pursuant to
Section 6.1.1 of the Collaboration Agreement), (ii) one-time fees for new
compounds contributed to the collaboration (including any one-time fee payments
from GGL to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration
Agreement), (iii) milestone payments (including any milestone payments pursuant
to Section 6.2 of the Collaboration Agreement), or (iv) any other payments
(other than those expressly identified in subsection (a) above of this
definition), in the case of clauses (i), (ii), (iii) and (iv) of this clause
(d), paid to Seller relating to ANORO.

 

6.                                      “Applicable Successor” means with
respect to Seller and any of its Affiliates with respect to each Royalty
Interest Product, the assignee or successor-in-interest to all or substantially
all of Seller’s (or Seller’s Affiliate’s) interest under the applicable GGL
Agreement with respect to such Royalty Interest Product (other than GGL).

 

7.                                      “Assignment” has the meaning set forth
in Section 2.1(a) of this Agreement.

 

8.                                      “Assignment Interest” means (i) a
twenty-one percent (21%) undivided beneficial interest in the Royalty Interest
and (ii) the assignment of a non-exclusive right to enforce payment in respect
thereof under the GGL Agreements.

 

9.                                      “Beneficiary” means the beneficiary
under the Trust Agreement

 

10.                               “BREO/RELVAR” means (a) the combination
medicine comprising FF and VI, with no other therapeutically active component,
and explicitly excluding either component as a monotherapy, and which is
proposed, as of the date hereof, to be sold under the brand name “BREO™
ELLIPTA™” in the United States and “RELVAR™ ELLIPTA™” in the European Union and
Japan, and (b) any and all product improvements, additional claims, line
extensions, dosage changes and alternate delivery systems, in each case, with
respect to only such combination medicine set forth in subsection (a) comprising
FF and VI, with

 

A-2

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no other therapeutically active component (and explicitly excluding either
component as a monotherapy).

 

11.                               “BREO/RELVAR Royalty Interest”:

 

(a)                                       Means Seller’s entitlement under the
Collaboration Agreement to receive the following payments during the Royalty
Interest Term, subject to subsections (b), (c) and (d) of this definition:

 

(i)

 

royalty payments on any net sales worldwide of BREO/RELVAR by or on behalf of
GGL, pursuant to Section 6.3 of the Collaboration Agreement;

 

 

 

(ii)

 

any interest on amounts referred to in clause (a)(i) immediately above that is
paid pursuant to Section 6.8 of the Collaboration Agreement;

 

 

 

(iii)

 

any Infringement Payments with respect to BREO/RELVAR in lieu of the payments
referred to in clause (a)(i) immediately above; and

 

 

 

(iv)

 

any Other Amounts with respect to BREO/RELVAR in lieu of the payments referred
to in clause (a)(i) immediately above.

 

(b)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9
of the Collaboration Agreement.  The VI Reverse Milestone Payment Obligation
shall remain the obligation of Seller, and shall not be a reduction, deduction,
offset or exclusion from the royalty payments under subsection (a) above of this
definition.

 

(c)                                        The entitlement to the payments and
amounts set forth in subsection (a) above of this definition is subject to
reduction, deduction, offset and exclusion from such royalties of any
Cost-Sharing Deductions (without double counting).

 

(d)                                       The entitlement to the payments and
amounts set forth in subsection (a) above of this definition does not include
any (i) signing payments (including any signing payments pursuant to
Section 6.1.1 of the Collaboration Agreement), (ii) one-time fees for new
compounds contributed to the collaboration (including any one-time fee payments
from GGL to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration
Agreement), (iii) milestone payments (including any milestone payments pursuant
to Section 6.2 of the Collaboration Agreement), or (iv) any other payments
(other than those expressly identified in subsection (a) above of this
definition), in the case of clauses (i), (ii), (iii) and (iv) of this clause
(d), paid to Seller relating to BREO/RELVAR.

 

12.                               “Business Day” means any day that is not a
Saturday, Sunday or other day on which banks are required or expressly
authorized to be closed in London, England, New York, New York, San Francisco,
California or Dublin, Ireland.

 

13.                               “Closing” has the meaning set forth in
Section 3.1 of this Agreement.

 

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14.                               “Collaboration Agreement” means that certain
Collaboration Agreement by and between Theravance, Inc. and Glaxo Group Limited
dated November 14, 2002, as amended from time to time.

 

15.                               “Confidential Information” has the meaning set
forth in the Section 6.4(a) of this Agreement.

 

16.                               “Cost-Sharing Deductions” has the meaning set
forth in Section 6.1(e) of this Agreement.

 

17.                               “Declaration of Trust” has the meaning set
forth in Section 2.1(a).

 

18.                               “Encumbrance” means any lien, charge, security
interest, mortgage or pledge.

 

19.                               “Excluded Products” means any therapeutically
active component or product, whether as a monotherapy, combination product or
otherwise, and any delivery devices (whether stand-alone or with any one or more
therapeutically active components or products), other than the Royalty Interest
Products.  “Excluded Products” includes, by way of example:

 

(a)                                 UMEC, as a monotherapy or in a combination
product (other than UMEC and VI, with no other therapeutically active
component), including a combination product that includes (i) UMEC, (ii) VI and
(iii) at least one other therapeutically active component;

 

(b)                                 FF, as a monotherapy or in a combination
product (other than FF and VI, with no other therapeutically active component),
including a combination product that includes (i) FF, (ii) VI and (iii) at least
one other therapeutically active component;

 

(c)                                  MABA ‘081 other than as a monotherapy
(i.e.  excluding MABA ‘081 in combination with any one or more other
therapeutically active component(s));

 

(d)                                 VI, in any product other than (i) as a
monotherapy, (ii) ANORO and (iii) BREO/RELVAR; and

 

(e)                                  any other therapeutically active component
or product (including a combination product of two or more therapeutically
active components not expressly specified in the definition of each of ANORO,
BREO/RELVAR, MABA ‘081 and VI Monotherapy).

 

20.                               “FF” means the inhaled corticosteroid
fluticasone furoate (with the chemical structure as set forth in Attachment A-1)
or an ester, salt or other noncovalent derivative thereof.

 

21.                               “Fundamental Representations” means the
representations and warranties set forth in Sections 4.1, 4.2, 4.6, 5.1 and 5.2
of this Agreement.

 

22.                               “GGL” means Glaxo Group Limited and, with
respect to any GGL Agreement, any successor in interest under such GGL
Agreement.

 

A-4

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23.                               “GGL Agreements” means the Collaboration
Agreement and the Strategic Alliance Agreement.

 

24.                               “Governmental Authority” means any United
States (federal, state or local), Irish or other foreign government, or any
governmental, regulatory, judicial or administrative authority, agency or
commission.

 

25.                               “Indemnified Party” has the meaning set forth
in Section 8.3(a) of this Agreement.

 

26.                               “Indemnifying Party” has the meaning set forth
in Section 8.3(a) of this Agreement.

 

27.                               “Infringement Payment” means any net
collections, recoveries, damages, awards or settlement payments that are
actually paid to Seller as a result of any settlement discussion, litigation,
arbitration or other legal proceeding brought against third-party infringers by
Seller pursuant to Section 13 of the Collaboration Agreement or Section 13 of
Strategic Alliance Agreement, as applicable.

 

28.                               “Intellectual Property” means all worldwide
intellectual property and rights arising from or in respect of the following:
all (a) inventions, discoveries, industrial designs, business methods, patents
and patent applications (including provisional and Patent Cooperation Treaty
applications), including continuations, divisionals, continuations-in-part,
reexaminations and reissues, extensions, renewals and any patents that may be
issued with respect to the foregoing; (b) trademarks, service marks,
certification marks, collective marks, trade names, business names, assumed
names, d/b/a’s, fictitious names, brand names, trade dress, logos,
symbols, Internet domain names and corporate names, and general intangibles of a
like nature and other indicia of origin or quality, whether registered,
unregistered or arising by Law, and all applications, registrations, and
renewals for any of the foregoing, together with the goodwill associated with
and symbolized by each of the foregoing; (c) published and unpublished works of
authorship in any medium, whether copyrightable or not (including databases and
other compilations of information, computer software, source code, object code,
algorithms, and other similar materials and Internet website content),
copyrights and moral rights therein and thereto, and registrations and
applications therefor, and all issuances, renewals, extensions, restorations and
reversions thereof; and (d) confidential and proprietary information, trade
secrets, and know-how, including methods, processes, business plans, schematics,
concepts, software and databases (including source code, object code and
algorithms), formulae, drawings, prototypes, models, designs, devices,
technology, research and development and customer information and lists.

 

29.                               “Key Patents” has the meaning set forth in
Section 4.7(a) of this Agreement.

 

30.                               “Knowledge of Newco” means the knowledge,
after reasonable inquiry, of the following individuals:  [                    ].

 

31.                               “Knowledge of Seller” means the knowledge,
after reasonable inquiry, of the following individuals:  Rick E Winningham,
Michael Aguiar, Brad Shafer and Jeff Hagenah.

 

A-5

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32.                               “Law” means any and all domestic (federal,
state or local) or foreign laws, rules, regulations, statutes, orders,
ordinance, judgments or decrees or other pronouncements by any Governmental
Authority.

 

33.                               “Losses” has the meaning set forth in
Section 8.1 of this Agreement.

 

34.                               “MABA” means a bifunctional muscarinic
antagonist-beta2 agonist.

 

35.                               “MABA ‘081” means (a) the MABA compound known
as GSK961081, solely as a monotherapy (i.e., excluding GSK961081 in combination
with any one or more other therapeutically active component(s)), and (b) any and
all product improvements, additional claims, line extensions, dosage changes and
alternate delivery systems, in each case, with respect to only GSK961081 solely
as a monotherapy (i.e., excluding GSK961081 in combination with any one or more
other therapeutically active component(s)).

 

36.                               “MABA ‘081 Royalty Interest”:

 

(a)                                 Means Seller’s entitlement under the
Strategic Alliance Agreement to receive the following payments during the
Royalty Interest Term, subject to subsections (b), (c) and (d) of this
definition:

 

(i)

 

royalty payments on any net sales worldwide of MABA ‘081 by or on behalf of GGL,
pursuant to Section 6.3 of the Strategic Alliance Agreement;

 

 

 

(ii)

 

any interest on amounts referred to in clause (a)(i) immediately above that is
paid pursuant to Section 6.8 of the Strategic Alliance Agreement;

 

 

 

(iii)

 

any Infringement Payments with respect to MABA ‘081 in lieu of the payments
referred to in clause (a)(i) immediately above;

 

 

 

(iv)

 

any Other Amounts with respect to MABA ‘081 in lieu of the payments referred to
in clause (a)(i) immediately above.

 

(b)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets  in Sections 6.3, 6.4.1 and 6.9 of the
Strategic Alliance Agreement.

 

(c)                                  The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to reduction,
deduction, offset and exclusion from such royalties of any Cost-Sharing
Deductions (without double counting).

 

(d)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition does not include any
(i) signing payments (including any signing payments pursuant to Section 6.1.1
of the Strategic Alliance Agreement), (ii) opt-in fees or payments for equity
investments (including any payments from GGL to Seller pursuant to Sections
6.1.2 or 6.1.4 of the Strategic Alliance Agreement), (iii)

 

A-6

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milestone payments (including any milestone payments pursuant to Section 6.2 of
the Strategic Alliance Agreement) or (iv) any other payments (other than those
expressly identified in subsection (a) above of this definition), in the case of
clauses (i), (ii), (iii) and (iv) of this clause (d), paid to Seller relating to
MABA ‘081.

 

37.                               “Major Market Country” means each of Canada,
France, Germany, Italy, Japan, Spain, the United Kingdom and the United States.

 

38.                               “Newco Charter Documents” shall have the
meaning set forth in Section 4.1 of this Agreement.

 

39.                               “Newco Disclosure Schedule” has the meaning
set forth in Article V of this Agreement.

 

40.                               “Newco Indemnitees” has the meaning set forth
in Section 8.1 of this Agreement.

 

41.                               “Newco Material Adverse Effect” means any one
or more of (a) a material adverse effect on the ability of Newco to consummate
the Transactions and perform its obligations under this Agreement and (b) a
material adverse effect on the validity or enforceability of this Agreement or
the rights of Seller hereunder.

 

42.                               “Order” means any decree, order, judgment,
ruling, writ, injunction, temporary restraining order or other formal order in
any suit or proceeding by or with any Governmental Authority which has become
final and nonappealable.

 

43.                               “Other Amounts” means in respect of each of
the ANORO Royalty Interest, BREO/RELVAR Royalty Interest, MABA ‘081 Royalty
Interest and VI Monotherapy Royalty Interest, any proceeds (whether cash
proceeds or otherwise) other than those in clauses (a)(ii) and (a)(iii) of the
definition of each of the foregoing Royalty Interests as, if and when received
by Seller in lieu of the royalty payments under clause (a)(i) of the definition
of each of the foregoing Royalty Interests, including without limitation amounts
received by Seller relating to any damages or penalties or following any court
action or out-of-court settlement between Seller and GGL, and in all cases,
subject to the reductions, deductions, offsets and exclusions set forth in
clauses (b), (c) and (d) of the definition of each Royalty Interest.

 

44.                              “Participation Agreement” means the Royalty
Participation Agreement dated as of May [ ], 2013 between Seller and Elan
Corporation PLC.

 

45.                               “Party” has the meaning set forth in the
introductory paragraph of this Agreement.

 

46.                               “Percentage” means twenty-one percent (21%).

 

47.                               “Permitted Encumbrances” means any of the
following: (a) statutory Encumbrances for current taxes not yet due and payable,
and (b) landlords’, carriers’, warehousemen’s, mechanics’, suppliers’,
materialmen’s or other like Encumbrances arising in the ordinary course of
business with respect to amounts not yet overdue or being contested in good
faith by appropriate proceedings.

 

A-7

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48.                               “Person” means any individual, corporation,
limited-liability company, partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental body, or
other entity.

 

49.                               “Purchaser” has the meaning given to such term
in the Participation Agreement.

 

50.                               “Recharacterization Event” has the meaning set
forth in Section 2.4(b).

 

51.                               “Royalty Interest” means (a) the ANORO Royalty
Interest, (b) the BREO/RELVAR Royalty Interest, (c) the MABA ‘081 Royalty
Interest, and (d) the VI Monotherapy Royalty Interest.

 

52.                               “Royalty Interest Product” means each of
(a) ANORO, (b) BREO/RELVAR, (c) MABA ‘081 and (d) VI Monotherapy, and excluding,
in each case, all Excluded Products.

 

53.                               “Royalty Interest Term” means, with respect to
each Royalty Interest Product, the time period commencing on the date hereof and
ending, on a country-by-country and product-by-product basis, on the date that
the “Term” (as defined in the Collaboration Agreement, with respect to ANORO,
BREO/RELVAR and VI, and as defined in the Strategic Alliance Agreement, with
respect to MABA ‘081) expires or terminates with respect to such Royalty
Interest Product; provided that in the event that either the Collaboration
Agreement or the Strategic Alliance Agreement is terminated and Seller remains
entitled to Royalty Interest payments under Section 14.6 of the Collaboration
Agreement or Section 14.5 of the Strategic Alliance Agreement, the Royalty
Interest Term with respect to the relevant Royalty Interest Product shall be
extended until the expiration or termination of such rights under Section 14.6
of the Collaboration Agreement and Section 14.5 of the Strategic Alliance
Agreement, respectively.

 

54.                               “Seller SEC Reports” means all reports,
schedules, forms and statements filed by Seller with the United States
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

 

55.                               “Seller” has the meaning set forth in the
introductory paragraph of this Agreement.

 

56.                               “Seller Charter Documents” has the meaning set
forth in Section 4.1 of this Agreement.

 

57.                               “Seller Corporate Reorganization” means the
separation of Seller’s businesses as described in Seller’s press release and
related materials dated 25 April 2013, as it may be amended.

 

58.                               “Seller Disclosure Schedule” has the meaning
set forth in Article IV of this Agreement.

 

59.                               “Seller Indemnitees” has the meaning set forth
in Section 8.2 of this Agreement.

 

60.                               “Seller Material Adverse Effect” means any one
or more of: (a) a material adverse effect on the ability of Seller to consummate
the Transactions and perform its obligations under this Agreement, (b) a
material adverse effect on the validity or enforceability of

 

A-8

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this Agreement or the rights of Newco hereunder, or (c) a material adverse
effect on the Assignment Interest.

 

61.                               “Seller Secured Amount” has the meaning set
forth in Section 2.4(b).

 

62.                               “Specified Claim” means any allegation, claim,
announcement, finding or determination that the Transaction Documents,
Transactions or Seller’s or Newco’s negotiation, performance or disclosure of
the Transaction Document or the Transactions is or might be a breach of the GGL
Agreements.

 

63.                               “Strategic Alliance Agreement” means that
certain Strategic Alliance Agreement by and between Theravance, Inc. and Glaxo
Group Limited dated March 30, 2004, as amended from time to time.

 

64.                               “Taxation” or “Tax” means all (i) forms of
taxation whether direct or indirect and whether levied by reference to income,
profits, gains, net wealth, net worth, equity, asset values, turnover, gross
receipts, added value or other reference, and statutory, governmental, state,
provincial, local government or municipal impositions, duties, contributions,
rates and levies, whenever and wherever imposed (whether imposed by way of a
deduction or withholding for or on account of tax or otherwise) and in respect
of any Person, and all penalties, fines, levies, charges, costs, interest and
other additional amounts relating thereto.

 

65.                              “Tax Authority” means any taxing or other
Governmental Authority (whether within or outside the United Kingdom) competent
to impose, administer or collect any Taxation.

 

66.                               “Term” has the meaning set forth in
Section 7.1 of this Agreement.

 

67.                               “Territory” means the entire world.

 

68.                               “Third Party” means any Person other than
either Party or any of their respective Affiliates.

 

69.                               “Third-Party Claim” has the meaning set forth
in Section 8.3(a) of this Agreement.

 

70.                               “Transactions” means the transactions
contemplated by the Transaction Documents.

 

71.                               “Transaction Documents” means this Agreement
and the Trust Agreement.

 

72.                               “Trust” means the trust declared pursuant to
the Trust Agreement.

 

73.                               “Trust Agreement” means the Declaration of
Trust to be entered into simultaneously with this Agreement among Seller, Newco
and the other parties thereto substantially in the form attached hereto as
Exhibit B.

 

74.                               “Trustee” means the trustee under the Trust
Agreement.

 

A-9

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75.                               “UCC” means the Uniform Commercial Code as in
effect from time to time in the State of New York or in any other state or the
District of Columbia to the extent applicable to the perfection of security
interests or filings in respect thereof.

 

76.                               “UMEC” means the long-acting muscarinic
antagonist umeclidinium bromide (with the chemical structure as set forth in
Attachment A-2) or an ester, salt or other noncovalent derivative thereof.

 

77.                               “VI” means the long-acting beta2 agonist
vilanterol (with the chemical structure as set forth in Attachment A-3) or an
ester, salt or other noncovalent derivative thereof.

 

78.                               “VI Monotherapy” means (a) VI, solely as a
monotherapy (i.e., excluding VI in combination with any one or more other
therapeutically active component(s)), and (b) any and all product improvements,
additional claims, line extensions, dosage changes and alternate delivery
systems, in each case, with respect to only VI solely as a monotherapy (i.e.,
excluding VI in combination with any one or more other therapeutically active
component(s)).

 

79.                              “VI Monotherapy Royalty Interest”:

 

(a)                                 Means Seller’s entitlement under the
Collaboration Agreement to receive the following payments during the Royalty
Interest Term, subject to subsections (b), (c) and (d) of this definition:

 

(i)

 

royalty payments on any net sales worldwide of VI Monotherapy by or on behalf of
GGL, pursuant to Section 6.3 of the Collaboration Agreement;

 

 

 

(ii)

 

any interest on amounts referred to in clause (a)(i) immediately above that is
paid pursuant to Section 6.8 of the Collaboration Agreement;

 

 

 

(iii)

 

any Infringement Payments with respect to VI Monotherapy in lieu of the payments
referred to in clause (a)(i) immediately above; and

 

 

 

(iv)

 

any Other Amounts with respect to VI Monotherapy in lieu of the payments
referred to in clause (a)(i) immediately above.

 

(b)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to the
reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9
the Collaboration Agreement. The VI Reverse Milestone Payment Obligation shall
remain the obligation of Seller, and shall not be a reduction, deduction, offset
or exclusion from the royalty payments under subsection (a) above of this
definition.

 

(c)                                  The entitlement to the payments and amounts
set forth in subsection (a) above of this definition is subject to reduction,
deduction, offset and exclusion from such royalties of any Cost-Sharing
Deductions (without double counting).

 

A-10

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(d)                                 The entitlement to the payments and amounts
set forth in subsection (a) above of this definition does not include any
(i) signing payments (including any signing payments pursuant to Section 6.1.1
of the Collaboration Agreement), (ii) one-time fees for new compounds
contributed to the collaboration (including any one-time fee payments from GGL
to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration Agreement),
(iii) milestone payments (including any milestone payments pursuant to
Section 6.2 of the Collaboration Agreement) or (iv) any other payments (other
than those expressly identified in subsection (a) above of this definition), in
the case of clauses (i), (ii), (iii) and (iv) of this clause (d), paid to Seller
relating to VI Monotherapy.

 

80.                               “VI Reverse Milestone Payment Obligation”
means Seller’s obligation to pay to GGL milestone payments in the event a
product containing VI is successfully developed and commercialized, pursuant to
Section 6.2.3 of the Collaboration Agreement.

 

B.                                    INTERPRETATION.

 

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

 

(b)                                 The words “include,” “includes” and
“including” when used herein shall be deemed in each case to be followed by the
words “without limitation” and shall not be construed to limit any general
statement which it follows to the specific or similar items or matters
immediately following it.

 

(c)                                  Neither Party shall be or be deemed to be
the drafter of this Agreement for the purposes of construing this Agreement
against the other Party.

 

(d)                                 All uses of the words “hereto”, “herein”,
“hereof”, “hereby” and “hereunder” and similar expressions refer to this
Agreement as a whole and not to any particular provision of this Agreement.

 

(e)                                  Unless otherwise specified in this
Agreement, words in the singular include the plural and vice versa and words
importing one gender include all genders.

 

(f)                                   Any reference to a Person shall also be
its permitted successors and assigns.

 

(g)                                  Any references to a Law shall include any
amendment or modification to such Law and any rules and regulations issued
thereunder, whether such amendment or modification is made, or issuance of such
rules and regulations occurs, before or after the date of this Agreement.

 

A-11

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ATTACHMENT A-1

 

FF Chemical Structure

 

[See Attached]

 

A-12

--------------------------------------------------------------------------------

 

ATTACHMENT A-2

 

UMEC Chemical Structure

 

[See Attached]

 

A-13

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ATTACHMENT A-3

 

VI Chemical Structure

 

[See Attached]

 

A-14

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EXHIBIT A

 

FORM OF UCC FINANCING STATEMENTS

 

A-1

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EXHIBIT B

 

FORM OF TRUST AGREEMENT

 

B-1

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EXHIBIT E

 

FORM OF TRUST AGREEMENT

 

NEWCO
as Settlor

 

[Parent]
as Beneficiary

 

and

 

[·]
as Trustee and Account Bank

 

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DECLARATION OF TRUST

 

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Cadwalader, Wickersham & Taft LLP
Dashwood House
69 Old Broad Street
London, EC2M 1QS

 

Tel:  +44 (0) 20 7170 8700
Fax: +44 (0) 20 7170 8600

 

E-1

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

1

INTERPRETATION

1

2

DECLARATION OF TRUST

5

3

COVERED PAYMENTS

6

4

THE ACCOUNT

6

5

PAYMENTS AND APPLICATION OF MONEYS

7

6

ACCOUNT SERVICES

7

7

REMOVAL OR RESIGNATION OF THE ACCOUNT BANK

9

8

REMUNERATION AND INDEMNIFICATION OF TRUSTEE

10

9

TRUSTEE’S POWERS AND LIABILITY

11

10

APPOINTMENT, RETIREMENT AND REMOVAL OF TRUSTEE

12

11

TRANSFER OF BENEFICIAL INTEREST

12

12

NOTICES

12

13

GOVERNING LAW

13

14

MISCELLANEOUS

13

 

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THIS DECLARATION OF TRUST has been executed as a Deed by the parties set out
below on [  ] 2013

 

(1)                                 NEWCO of [·], an English limited liability
partnership (the “Settlor”);

 

(2)                                 [Parent] of [·] and any transferee thereof
pursuant to Section 11 hereof (the “Beneficiary”);

 

(3)                                 [·] of [·] as “Trustee”; and

 

(4)                                 [·] of [·] “Account Bank”.

 

WHEREAS:

 

(A)                               Pursuant to the Assignment Agreement,
Beneficiary has sold, granted, assigned, put over, transferred and conveyed
(collectively, “Transferred” and “Transfer” shall be interpreted accordingly) to
the Settlor the Assignment Interest.  The Settlor holds the Assignment Interest,
and accordingly the beneficial title to the corresponding Covered Payments.

 

(B)                               Pursuant to this Deed, the Settlor wishes to
declare a trust in favour of the Beneficiary by which the Trustee shall hold
upon such trust as bare trustee: the Trust Property (as defined below) and
subject at all times to the trust established by this Deed.

 

(C)                               The Settlor, the Trustee and the Beneficiary
intend that nothing in this Deed shall result in the disposal, sale or transfer
by the Settlor of any interest in, or ownership of, the Royalty Interest (or any
part thereof) or any payments on, or in respect of, the GGL Agreements.

 

(D)                               Nothing in this Deed is intended to give rise
to any obligations on the part of the Settlor that would be in breach of, or
provide the Trustee or the Beneficiary with any rights under, or any right to
enforce any provisions of, the GGL Agreements or the Assignment Agreement.

 

NOW THIS DEED WITNESSETH AND IT IS HEREBY DECLARED as follows:

 

1                                         INTERPRETATION

 

1.1                               In this Deed:

 

Capitalized terms used herein without a definition shall have the meaning
ascribed thereto in the Royalty Participation Agreement between [·] and [·],
dated as of May [·], 2013 (the “Participation Agreement”).

 

“Account” means the account established by the Account Bank at the request of
the Settlor in accordance with clause 4 of this Deed.

 

“Additional Amounts” is defined in clause 2.1(c).

 

“Aggregate Payment” is defined in clause 2.1.

 

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“Beneficiary” means, initially, Seller and thereafter, the Person designated in
accordance with clause 11.1 hereof.

 

“Business Day” means a day (other than Saturday or Sunday) which is a day on
which commercial banks and foreign exchange markets settle payments and are open
for general business in London, England, New York, New York, San Francisco,
California, and Dublin, Ireland.

 

“Company” means Glaxo Group Limited, including any successor entity under the
GGL Agreements.

 

“Consideration” means the Transfer of the Assignment Interest to the Settlor
pursuant to the terms of the Assignment Agreement.

 

“Cost-Sharing Deduction” has the meaning set forth in the Participation
Agreement.

 

“Cost-Sharing Instruction” means a written notice from the Settlor or Seller to
the Trustee and the Account Bank setting forth the amount of a Cost-Sharing
Deduction.

 

“Covered Payments” means the Paid Amounts, when, as and if received by the
Account Bank.

 

“Deed” means this deed and “this Deed” shall be construed accordingly.

 

“Earnings Release Notification” means (i) a written notification by the Settlor
to the Account Bank and the Trustee that Parent has publicly announced its
financial statements with respect to the most recently ended quarter or year (as
applicable), or (ii) a written notification by the Beneficiary to the Account
Bank and the Trustee (together with a copy of the applicable public filing
containing the Seller’s financial statements for the relevant period) that
Parent’s financial statements with respect to the most recently ended quarter or
year (as applicable) are available for review on the U.S. Securities and
Exchange Commission’s “Electronic Data Gathering, Analysis, and Retrieval”
(EDGAR) system.

 

“Fitch” means Fitch Ratings Ltd.

 

“Goliath” means Glaxo Group Limited, including any successor entity under the
GGL Agreements.

 

“Insolvency Event” means, in respect of any entity, that such entity is (1) is
dissolved (other than pursuant to a consolidation, amalgamation or merger);
(2) becomes insolvent or is unable to pay its debts or fails or admits in
writing its inability generally to pay its debts as they become due or is deemed
under applicable law to, or is declared to, be unable to pay its debts;
(3) makes a general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors’
rights, or a petition is presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not

 

2

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dismissed, discharged, stayed or restrained in each case within 60 days of the
institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management, examination or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator, receiver,
trustee, custodian, examiner or other similar official for it or for all or
substantially all its assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 60 days thereafter; (8) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (1) to
(7) (inclusive); or (9) takes any action in furtherance of, or indicating its
consent to, approval or, or acquiescence in, any of the foregoing acts.

 

“Liability” means any loss, damage, cost, charge, claim, demand, expense,
judgment, action, proceedings or other liability whatsoever (including without
limitation, taxes, duties, levies, imposts and other charges, any value added
tax or similar tax charged or chargeable in respect thereof) and the reasonable
fees and expenses of any legal advisers or accounting or investment banking
firms employed by the Trustee pursuant to this Deed.

 

“Lock Box Account” means a lock box account that Seller or Newco may elect to
establish from time to time, to receive the Royalty Interest payments from GGL,
and from which Paid Amounts would be paid into the Account.

 

“Lock Box Arrangement” means the contractual terms and conditions that govern
the Lock Box Account, which shall be in form and substance reasonably
satisfactory to the Beneficiary.

 

“Moody’s” means Moody’s Investors Service Limited.

 

“Paid Amounts” means, in relation to the Assignment Interest, (i) 100 per cent
of the cash payments, when, as and if received under the Assignment Agreement,
(ii) any amounts paid or payable to Settlor pursuant to the first sentence of
Section 2.4(c) of the Assignment Agreement, and (iii) if a Recharacterization
Event (as defined in the Assignment Agreement) has occurred pursuant to the
second sentence of Section 2.4(c) of the Assignment Agreement, the proceeds
thereof, including any proceeds of assets realized upon foreclosure in
connection therewith.

 

“Related Rights” means all powers, rights, claims, discretions, title, interest
and benefit whatsoever whether now or in the future which the Settlor has under
or otherwise in connection with the Account including without limitation all and
any right of the Settlor to require the Account Bank to deliver title to and
possession of any or all monies standing to the credit of the Account.

 

“Relevant Rating Agencies” means S&P, Moody’s and Fitch.

 

“Relevant Required Rating” means at least [·] by S&P, [·] by Moody’s, [·] by
Fitch and [·] by DBRS.

 

3

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“Seller” has the meaning set forth in the Assignment Agreement.

 

“S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill
Companies, Inc.

 

“Termination Date” is defined in clause 2.6.

 

“Trust Property” means, collectively: (i) the Covered Payments; (ii) the cash
standing to the credit of the Account; (iii) any Related Rights and (iv) and the
amounts deposited to the Account pursuant to clause 2.1(c) and pursuant to
clause 2.1(d).

 

“Trustee Acts” means the Trustee Act 1925 and the Trustee Act 2000 of England
and Wales.

 

“Withholding Instruction” means a written notice from the Settlor or Seller to
the Trustee and the Account Bank setting forth the amount of any amount the
Settlor or Seller is required to deduct and withhold for Taxes as set forth in
Section 6.2 of the Participation Agreement or Section 6.2 of the Assignment
Agreement.

 

“Written Instructions” shall mean written communications received by the Trustee
via S.W.I.F.T., tested telex, certified letter, facsimile transmission, or any
other method or system specified by the Trustee as available for use in
connection with this Deed.

 

1.2                               Interpretation

 

(a)                                 All references in this Deed to any statute
or any provision of any statute shall be deemed also to refer to any statutory
modification or re-enactment thereof or any statutory instrument, order or
regulation made thereunder or under such modification or re-enactment.

 

(b)                                 In this Deed references to clauses,
schedules and paragraphs to the schedules (unless otherwise specified) shall be
construed as references to the clauses, schedules and paragraphs to the
schedules to this Deed and of this Deed respectively.

 

(c)                                  Save where the contrary is indicated, any
reference in this Deed to the Deed or any other agreement or document shall be
construed as a reference to this Deed or, as the case may be, such other
agreement or document as the same may from time to time be amended,
supplemented, varied, novated or replaced.

 

(d)                                 Words denoting the singular number shall
include the plural number also and vice versa.

 

(e)                                  References to any person shall include
references to its permitted successors, transferees and assigns.

 

(f)                                   A “person” includes any individual, firm,
company, corporation, government, state or agency of a state or any association,
trust, joint venture, consortium, partnership or other entity (whether or not
having separate legal personality.

 

4

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2                                         DECLARATION OF TRUST

 

2.1                               With effect from the date of this Deed, the
Settlor in consideration of the receipt of the Consideration hereby declares a
bare trust absolutely in favour of the Beneficiary over the Settlor’s beneficial
interest in:

 

(a)                                 the Covered Payments;

 

(b)                                 any cash standing to the credit of the
Account, and any Related Rights;

 

(c)                                  any other amounts deposited to the Account
by the Settlor from time to time for the benefit of the Beneficiary (the
“Additional Amounts”); and

 

(d)                                 any amounts paid by Seller to the Account
pursuant to Section 6.1(b) of the Participation Agreement or the last sentence
of Section 6.1(e) of the Participation Agreement

 

(together, the “Aggregate Payment”).

 

2.2                               The parties to this Deed acknowledge and agree
that, notwithstanding anything to the contrary in this Deed or in connection
with the trust set out herein, Newco has no obligation to bring any enforcement
action against GGL under any of the GGL Agreements.  Any such enforcement action
by Newco requires the consent of the general partner of Newco. Notwithstanding
anything to the contrary in this Deed, nothing in this Deed is intended to give
rise to any obligation on the part of the Settlor that would be in breach of, or
provide the Trustee or the Beneficiary with any rights or interests under, or
any right to enforce any provisions of, the Royalty Interests, the GGL
Agreements, the Assignment Agreement, the Participation Agreement (whether as an
express or implied third party beneficiary or otherwise).  The trust set out in
clause 2.1 above is not intended by the Settlor to, and shall not, result in the
disposal of any interest in, or ownership by the Beneficiary or Trustee in any
payment right, or part of any right, that the Settlor holds in, or in respect
of, the Royalty Interest, the GGL Agreements, the Assignment Agreement or the
Participation Agreement.  Each of the Beneficiary and the Trustee hereby
expressly disclaims any such interest or right.

 

2.3                               The Settlor hereby appoints the Trustee as a
trustee of the bare trust created under this Deed and the Trustee hereby
acknowledges and declares it shall at all times hold the Trust Property on trust
for the Beneficiary.

 

2.4                              The Trustee further acknowledges and agrees
that it holds the Trust Property upon the terms and subject to the conditions
set forth in this Deed and agrees to be bound by the same. The Trustee holds the
bare legal title to the Trust Property upon trust absolutely and unconditionally
for the Beneficiary.

 

2.5                               The Account Bank shall maintain any
information regarding any Covered Payments, including the amounts of any such
Covered Payments, as strictly confidential (including by not disclosing such
information to the Trustee or the Beneficiary), except that the Account Bank
shall disclose the amount of, the Aggregate Payment (but not the Covered Amount
in the event that any Earnings Release Notification for the relevant period has
not been delivered) to the Trustee and the Beneficiary

 

5

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promptly following the payment of such Aggregate Payment or any portion thereof
to the Beneficiary. For the avoidance of doubt, the Account Bank may not, and
shall be under no obligation to, disclose any information with respect to any
Covered Payment in respect of which it has not received an Earnings Release
Notification.  Each of the Trustee and the Beneficiary expressly acknowledges
and agrees to the foregoing confidentiality obligations of the Account Bank, and
expressly waives any duty or obligation of the Account Bank to the Trustee and
the Beneficiary in connection with the foregoing in this clause 2.5.

 

2.6                               The trust created under this Deed shall cease
to have effect upon the date on which all Paid Amounts arising under the
Assignment Agreement have been collected by the Trustee and paid to the
Beneficiary in full (such date being the “Termination Date”).

 

3                                         COVERED PAYMENTS

 

3.1                               The Settlor shall procure and take all
necessary steps to ensure that when, as and if any Paid Amounts are paid by
Company or any other person in accordance with the GGL Agreements the
corresponding Covered Payments shall be paid promptly into the Account or, if
the Lock Box Account is in place, promptly into the Lock Box Account and from
the Lock Box Account to the Account in accordance with the Lock Box Arrangement.

 

3.2                               References in this clause 3 to Covered
Payments are to the amount actually paid by the Company, or any other person in
accordance with the GGL Agreements.

 

3.3                               All actions required by the Settlor under this
clause 3 shall be subject to all applicable fiscal and other tax, legal or
regulatory requirements.

 

3.4                               All payments under this clause 3 shall be made
in the currency in which the relevant Covered Payment amount is actually paid.

 

4                                         THE ACCOUNT

 

4.1                               The Account Bank shall establish the Account
for the purpose of receiving, holding and distributing the Covered Payments in
accordance with the provisions of this Deed.

 

4.2                               The Trustee shall hold the Trust Property in
the Account and shall identify the Trust Property on its books and records as
being held subject to the trusts contained in this Deed. The Trustee will not
comingle the Trust Property with any other property.

 

4.3                               Pursuant to this Deed, but subject to the
terms and conditions herein (including clauses 2.5 and 5.1), the Beneficiary
shall enjoy the same rights to the Account as the Settlor would have enjoyed had
the transactions contemplated in this Deed not taken place and had the Settlor
retained the beneficial ownership of the Account and the contents of the
Account, including the right to demand payment from the Account Bank of any sums
held in the Account in accordance with the terms of the Account and of this
Deed.

 

4.4                               In accordance with the declaration of trust
set out at clause 2.1 but subject to the termination provisions set out in
clause 2.6, the Settlor shall deliver an irrevocable,

 

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written instruction to the Company that all payments in respect of the Royalty
Interest shall be paid into the Lock Box Account (or if there is no Lock Box
Account, the Account) when, as and if any such amounts become payable.  Covered
Payments shall be paid out of the Lock Box Account into the Account in
accordance with the terms of the Lock Box Arrangement.  This obligation is
without prejudice to any obligation Seller may have to deliver similar written
instructions to the Company pursuant to the Participation Agreement and/ or
Assignment Agreement.

 

5                                         PAYMENTS AND APPLICATION OF MONEYS

 

5.1                               Immediately following the earlier of (i) the
receipt by the Trustee of an Earnings Release Notice, and (ii) 60 days following
the receipt into the Account of a Covered Payment, the Trustee shall procure
that the following amounts are paid in the following order:

 

first, pursuant to clause 8.1 of this Deed;

 

second, to an account of the Settlor, an amount equal to the Cost-Sharing
Deductions set forth in any Cost-Sharing Instruction theretofore received by the
Trustee and not previously paid to the Settlor and an amount equal to the amount
specified in any Withholding Instruction, and

 

third, to an account of the Beneficiary, the balance of any amounts (including
any and all interest thereon) then standing in the Account.

 

6                                         ACCOUNT SERVICES

 

6.1                               It is the intent and explicit agreement of the
parties to this Deed that the Trustee has control of the Account in the manner
set out in this Deed.

 

6.2                               The Account Bank shall not honour or otherwise
comply with any instructions originated by or on behalf of the Settlor to
withdraw, transfer, sell, redeem, pledge, rehypothecate or otherwise deliver or
dispose of any Trust Property or re-register title of the Account, other than as
permitted by the terms of this Deed.

 

6.3                               From (and including) the date of this Deed to
and including the Termination Date, the Settlor hereby authorises and instructs
the Account Bank to comply with all Written Instructions originated by the
Trustee and the Beneficiary from time to time with respect to the Trust Property
without further consent or direction from the Settlor or any other party, in
accordance with, and subject to the following terms and conditions:

 

(a)                                 the Account Bank shall not honour any
Written Instructions or other instructions or requests received from the Trustee
or the Beneficiary that:

 

(i)                                     would require disclosure of information
to the Trustee, Beneficiary or any other Person regarding any Covered Payment
(including the amount of such Covered Payment) other than in accordance with
clause 2.5;

 

(ii)                                  would require the Account Bank to make any
payment not in conformity with clause 5.1; or

 

7

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(iii)                               prohibit the Account Bank from providing any
information  to the Settlor regarding the Account and amounts deposited therein
or withdrawn therefrom in accordance with Section 6.3(c).

 

(b)                                 The Account Bank shall not honour any
instructions or requests received from the Settlor concerning the Account and
the Settlor shall have no right or ability to access or withdraw or transfer
funds from the Account.  Without limiting the generality of the foregoing, the
Account Bank shall:

 

(i)                                     subject to clause 6.3(a), follow the
Written Instructions of the Trustee and the Beneficiary regarding the Account;

 

(ii)                                  subject to clauses 2.5 and 5.1, if
directed by the Trustee and the Beneficiary, (A) transfer any or all of the
proceeds standing to the credit of the Account to any account or accounts
designated by the Beneficiary, or (B) otherwise deal with the Trust Property as
directed by the Trustee and the Beneficiary, in each case without the consent of
the Settlor or any other person; and

 

(iii)                               subject to clauses 2.5 and 5.1, otherwise
comply with instructions originated by the Trustee and the Beneficiary with
respect to financial assets held in or to be credited to the Account without
further consent of the Settlor or any other person.

 

(c)                                  Upon the reasonable request of the Trustee
and the Beneficiary, but subject to clause 2.5, the Account Bank shall furnish,
make available or otherwise provide the Trustee and the Beneficiary with copies
of all account statements, and, subject to clause 2.5, the Account Bank shall
make available to the Trustee and the Beneficiary online reports and other
information that is in the Account Bank’s possession that relates to the Account
regarding the transactions affecting the Account and account statements
periodically.  The Trustee and/or, as applicable, the Beneficiary shall execute
all account documentation, if any, that the Account Bank may from time to time
require in order to establish the Trustee’s and /or the Beneficiary’s authority
to have access to all such statements, reports and information.  The Account
Bank shall furnish, make available or otherwise provide the Settlor with copies
of all account statements and the Account Bank shall make available to the
Settlor online reports and other information that is in the Account Bank’s
possession that relates to the Account regarding the transactions affecting the
Account and account statements periodically.

 

(d)                                 As of the date of this Deed, the Account
Bank has not received notice of any liens, claims or encumbrances with respect
to the Account, nor has the Trustee confirmed as at the date of execution of
this Deed any interest in any Account to any persons or entities other than the
Beneficiary.

 

(e)                                  Upon receipt of written notice of any lien,
encumbrance or adverse claim against the Account or any portion of the Trust
Property contained therein, the Account Bank shall use all reasonable efforts to
notify the Trustee and Beneficiary as soon as commercially practicable under the
circumstances.

 

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(f)                                   The Account Bank agrees that: (i) all
Trust Property which is a financial asset or monetary amount delivered to the
Account Bank will (as far as possible) be promptly credited to the Account; and
(ii) in no case will any financial asset credited to the Account be registered
in the name of the Settlor or, except as expressly provided in clause 5.1 with
respect to Cost-Sharing Instructions, payable to the order of the Settlor.

 

(g)                                  The Account Bank hereby waives any lien,
charge or other security or right of set-off that it may now have or hereafter
acquire in or with respect to the Account or any cash or financial asset held
therein or credited thereto.  None of the cash or financial assets held in or
credited to the Account in respect thereof will be subject to deduction,
set-off, banker’s lien or any other right in favour of any person (subject to
clause 5.1).

 

(h)                                 Beyond the exercise of reasonable care in
the custody and preservation of the Trust Property and the performance of its
obligations hereunder, the Account Bank shall have no duty to the Settlor or
Beneficiary.  The Account Bank shall be deemed to have exercised reasonable care
in the custody and preservation of the Trust Property if the Trust Property is
accorded treatment substantially equal to that which the Account Bank accords to
its own property, and the Account Bank shall not be liable for any loss or
damage to, or diminution in the value of, any Trust Property except to the
extent that such liability arises from the Account Bank’s gross negligence,
wilful misconduct or breach of this Deed.  The Account Bank may rely and shall
be protected in acting upon any notice, instruction, or other communication from
the Trustee which it reasonably believes to be genuine and authorised.

 

(i)                                     The Account Bank hereby represents and
warrants it has been duly incorporated and is validly existing as [·] under the
laws [·]; it has the corporate power and authority and all applicable regulatory
consents, to conduct its activity and to execute, deliver and perform its
obligations under this Deed.

 

7                                         REMOVAL OR RESIGNATION OF THE ACCOUNT
BANK

 

7.1                               Subject to as provided below, the Account Bank
may, at any time, cease to operate the Account on giving not less than 60 days’
prior written notice thereof to each of the parties hereto.  The Settlor
undertakes that, in the event of the Account Bank giving notice under this
clause 7.1, it shall as soon as possible use reasonable best efforts to procure
a new bank that is reasonably acceptable to the Trustee and the Beneficiary to
operate the Account on the terms of this Deed.  The Account Bank shall not cease
to operate the Account unless and until a new bank has been appointed and the
Account has been transferred to that new bank.

 

7.2                               If there is any change in the identity of the
Account Bank, the Settlor, Trustee and Beneficiary shall execute such documents
and take such actions as the new Account Bank and the outgoing Account Bank may
reasonably require for the purpose of vesting into the new Account Bank the
rights and obligations of the outgoing Account Bank.

 

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7.3                               The Settlor shall be obliged to terminate the
appointment of the Account Bank and appoint a new Account Bank if any of the
following events shall occur and Settlor has received written notice thereof:

 

(a)                                 the Account Bank fails to make when due a
payment required to be made to the Beneficiary under this Deed;

 

(b)                                 the Account Bank fails to perform or observe
its duties, obligations, covenants and services under this Deed and such default
continues unremedied for a period of [10] Business Days after the earlier of the
Account Bank becoming aware of such default or receipt by the Account Bank of
written notice from the Trustee or Settlor requiring the same to be corrected;

 

(c)                                  an Insolvency Event occurs in respect of
the Account Bank; or

 

(d)                                 the unsecured and unsubordinated long-term
debt rating of the Account Bank ceases to be rated by any two of the Relevant
Rating Agencies at the Relevant Required Rating, or any such rating is
withdrawn.

 

7.4                               The Account Bank agrees to use all reasonable
efforts to cooperate with the Settlor, Beneficiary and the successor Account
Bank in effecting the termination of the responsibilities and rights of the
Account Bank under this Deed, including, without limitation, to transfer to such
successor the Account and the Trust Property and take such further action as the
Trustee or Beneficiary may reasonably direct.

 

8                                         REMUNERATION AND INDEMNIFICATION OF
TRUSTEE

 

8.1                               The Trustee shall receive remuneration for its
services as trustee as from the date of this Deed upon each [quarterly date]
such remuneration to be at such rate as may from time to time be agreed among
the Settlor, Beneficiary and the Trustee, with the Settlor paying one-half of
such remuneration and the Trustee authorized to withdraw one-half of such
remuneration from the Account.  Such remuneration shall accrue from day to day
and be payable up to and including the date when all amounts owing to the
Beneficiary under this Deed have been paid in full or otherwise duly provided
for to the satisfaction of the Trustee.

 

8.2                               In the event of the Trustee considering it
expedient or necessary or on being requested by the Settlor or the Beneficiary
to undertake duties which the Trustee agrees to be of an exceptional nature or
otherwise outside the scope of the normal duties of the Trustee under this Deed,
the Trustee shall be paid such additional remuneration as shall be agreed among
the Trustee, the Settlor and the Beneficiary, with the Settlor paying one-half
of such remuneration and the Trustee authorized to withdraw one-half of such
remuneration from the Account.

 

8.3                               Without prejudice to the right of indemnity by
law given to trustees, the Settlor and Beneficiary shall indemnify the Trustee
and keep it indemnified against all Liabilities to which it may be or become
subject or which may be incurred by it in the execution or purported execution
of any of its trusts, powers, authorities and discretions under this Deed or in
respect of any other matter or thing done or omitted in any way relating to this
Deed.  The Settlor and the Beneficiary hereby agree, as between them,

 

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that each is responsible for one-half of the indemnification obligation under
this clause 8.3.

 

8.4                               With respect to any remuneration under this
clause 8 to be funded by withdrawing funds from the Account, if insufficient
funds are in the Account on the due date of such remuneration to satisfy such
one half of such Trustee remuneration, the Beneficiary promptly shall pay the
unsatisfied portion of such one-half of such Trustee remuneration.

 

8.5                               Nothing in this Deed shall, in any case in
which the Trustee has failed to show the degree of care and diligence required
of it as trustee having regard to the provisions of this Deed conferring on it
any trusts, powers, authorities or discretions, exempt the Trustee from, or
indemnify it against, any Liability for breach of trust or any liability which
by virtue of any rule of law would otherwise attach to it in respect of any
negligence, wilful default, breach of duty or breach of trust of which it may be
guilty in relation to its duties under this Deed.

 

9                                         TRUSTEE’S POWERS AND LIABILITY

 

9.1                               The Trustee shall have all powers conferred
upon trustees by the Trustee Acts subject to the express terms set out in this
Deed.

 

9.2                               The Trustee may in relation to this Deed act
on the advice or opinion of or any information obtained from any lawyer, valuer,
accountant, banker, broker, auctioneer or other expert whether obtained by the
Settlor, the Trustee or otherwise and shall not be responsible for any Liability
occasioned by so acting.  Any such advice, opinion or information may be sent or
obtained by letter, telex, facsimile transmission or cable and the Trustee shall
not be liable for acting in good faith on any advice, opinion or information
purporting to be conveyed by any such letter, telex, facsimile transmission or
cable although the same shall contain some error or shall not be authentic.

 

9.3                               Save as expressly otherwise provided in this
Deed, the Trustee shall have absolute and uncontrolled discretion as to the
exercise of its trusts, powers, authorities and discretions under this Deed and
shall not be responsible for any Liability which may result from their exercise
or non-exercise.

 

9.4                               Any consent or approval given by the Trustee
for the purposes of this Deed may be given on such terms and subject to such
conditions (if any) as the Trustee thinks fit and notwithstanding anything to
the contrary in this Deed may be given retrospectively.

 

9.5                               The Trustee hereby represents and warrants on
the date of this Deed that it has been duly incorporated and is validly existing
as [·] under the laws [·]; it has the corporate power and authority to conduct
its activity and to execute, deliver and perform its obligations under this
Deed.

 

9.6                               In no event shall the Trustee or the
Beneficiary (i) bring, or have any right to bring, (or encourage or assist any
other Person in brining) any claim or action against the Settlor under or in
connection with the Assignment Agreement or (ii) require, or seek to require,
Settlor to bring any claim or action against Seller under the Assignment

 

11

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Agreement. If the Trustee or the Beneficiary breaches the foregoing covenant,
without limiting any rights or remedies of the Settlor or any of its Affiliates
(including Seller), then the Beneficiary shall indemnify and hold harmless the
Settlor, Seller and their respective Affiliates.  The Trustee and the
Beneficiary acknowledge and agree that they are subject to injunctive relief for
any breach of this Section 9.6.  The Beneficiary hereby irrevocably and
perpetually waives any duty or obligation of the Trustee to the Beneficiary with
respect to the foregoing.

 

10                                  APPOINTMENT, RETIREMENT AND REMOVAL OF
TRUSTEE

 

10.1                        The power to appoint a new trustee of this Deed
shall be vested in the Settlor, subject to the Beneficiary’s prior written
consent (not to be unreasonably withheld, conditioned or delayed).

 

10.2                        A trustee of this Deed may retire at any time on
giving not less than 60 days’ prior written notice to the Settlor without
assigning any reason and without being responsible for any Liabilities incurred
by reason of such retirement.

 

10.3                        The Settlor undertakes that in the event of the
Trustee giving notice under this clause or being removed, it will use its
reasonable best endeavours to procure that a new trustee is appointed as soon as
reasonably practicable thereafter.

 

10.4                        The resignation of the Trustee shall not be
effective unless and until the Settlor has appointed a new trustee.

 

10.5                        The Trustee agrees to use all reasonable efforts to
cooperate with the Settlor, Beneficiary and the successor trustee in effecting
the termination of the responsibilities and rights of the Trustee under this
Deed, including, without limitation, to transfer to such successor the Trust
Property and take such further action as the Settlor and/or Beneficiary may
reasonably direct.

 

10.6                        The Settlor will be obliged to remove the Trustee
promptly upon the Settlor becoming aware that there has in fact occurred an
Insolvency Event in relation to the Trustee and shall, as soon as reasonably
possible following such removal, find and appoint a new trustee.

 

11                                  TRANSFER OF BENEFICIAL INTEREST

 

11.1                        Upon receipt by the Trustee of written notice from
the Beneficiary that the Beneficiary has transferred its interests under this
Deed to another Person (the “Transferee”) in compliance with the provisions of
Section 9.1 of the Participation Agreement, the Trustee shall immediately treat
the Transferee as the beneficiary of trusts created under this Deed.  The
Settlor and the Beneficiary agree to take reasonable steps necessary to
effectuate any such permitted transfer to the Transferee.

 

12                                  NOTICES

 

All notices or other communication under or in connection with this Deed shall
be given in writing or by email to the addresses or email addresses set out
below (unless the sender of the notice or other communication is otherwise
notified in writing):

 

[·]

 

12

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13                                  GOVERNING LAW

 

13.1                        This Deed and all matters arising from or connected
to it are to be construed in accordance with, and governed by, English law.  The
courts of England shall have exclusive jurisdiction to adjudicate on any
disputes or claims that may arise out of or in connection with this Deed.  Each
party to this Deed irrevocably submits to the jurisdiction of the courts of
England and waives any objection to proceedings in such courts whether on the
ground of venue or on the ground that the proceedings have been brought in an
inconvenient forum.

 

13.2                        [The Settlor hereby irrevocably appoints [·], to
receive service of process on its behalf as its respective authorised agent for
service of process in England. If for any reason such agent shall cease to be
such agent for service of process, the Settlor shall forthwith appoint a new
agent for service of process in England and deliver to the parties to this Deed
a copy of the new agent’s acceptance of appointment within 30 days.]

 

13.3                        The Beneficiary hereby irrevocably appoints [·], to
receive service of process on its behalf as its respective authorised agent for
service of process in England. If for any reason such agent shall cease to be
such agent for service of process, the Beneficiary shall forthwith appoint a new
agent for service of process in England and deliver to the parties to this Deed
a copy of the new agent’s acceptance of appointment within 30 days.

 

13.4                        The Trustee and the Account Bank hereby irrevocably
appoints [·], to receive service of process on its behalf as its respective
authorised agent for service of process in England. If for any reason such agent
shall cease to be such agent for service of process, the Trustee or, as
applicable, the Account Bank shall forthwith appoint a new agent for service of
process in England and deliver to the parties to this Deed a copy of the new
agent’s acceptance of appointment within 30 days.

 

13.5                        Nothing in this Deed shall affect the right to serve
process in any other manner permitted by law.

 

14                                  MISCELLANEOUS

 

14.1                        [The perpetuity period for the trusts in this Deed
is eighty (80) years from the date of this Deed.]

 

14.2                       This Deed may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.

 

14.3                        The parties hereto shall perform, execute and
deliver such further acts and documents as may be required by law or reasonably
requested by each other to implement the purpose of and to perfect this Deed.

 

14.4                        Any person who is not a party to this Deed has no
right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term
of this Deed.

 

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14.5                        If, at any time, any provision of this Deed is or
becomes illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of such provision under
the law of any other jurisdiction will, in any way, be affected or impaired.

 

14.6                        The headings used in this Deed are for convenience
of reference only and are not to affect the construction of or to be taken in
consideration in interpreting this Deed.

 

IN WITNESS whereof the above has been executed as a Deed on the day written at
the beginning hereof.

 

14

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SIGNATORIES

 

EXECUTED as a deed and delivered by a

)

 

duly authorised signatory of

)

 

NEWCO:

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

EXECUTED as a deed and delivered by a

)

 

duly authorised signatory of

)

 

[·]:

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

EXECUTED as a deed and delivered by a

)

 

duly authorised signatory of

)

 

TRUSTEE AND ACCOUNT BANK

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

15

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EXHIBIT F

 

1.                                      The Initial Members will be Seller and
Delaware Sub.

 

2.                                      No other persons shall become Members
without the prior written agreement of [   ].

 

3.                                      The Designated Members shall be all the
Members [or such of the Members as are designated in accordance with the Limited
Liability Partnership Agreement (“LPA”)].  The Designated Members shall be
responsible for ensuring compliance with all registration and other requirements
of the Limited Liability Partnerships Act 2000 and any amendments to that it
(the “Act”) and other applicable legislation.

 

4.                                      The Members will agree that the
relationship between them does not constitute any form of co-ownership of the
assets and liabilities of the LLP or any form of trust under any applicable law
or any form of trust relationship or equitable relationship under any applicable
law.

 

5.                                      [The LLP shall carry on the Business
with a view to profit.](1)

 

6.                                      The Members shall not cause or permit
the LLP, during the term of the Trust, to (and the LLP shall not):

 

(a)                                 incur any indebtedness for borrowed money;

 

(b)                                 form, acquire or hold any subsidiary
(whether corporate, partnership, limited liability company or other) or own any
equity interest in any other entity;

 

(f)                                   amend the LPA in a manner adverse to the
Purchaser;

 

(g)                                  unless required by applicable Law, have any
employees (for the avoidance of doubt, the Members do not constitute employees);

 

(h)                                 enter into any reconstruction, amalgamation,
merger or consolidation or take any voluntary steps with a view to its
winding-up;

 

(i)                                     otherwise than as contemplated in the
Transaction Documents, release from or terminate the appointment of the Account
Bank; or

 

(j)                                    subject to any requirement under
applicable Law to maintain a registered office, enter into any lease for, or
own, any real property.

 

7.                                      [To the extent not prohibited by the GGL
Agreements, Newco agrees to use its commercially reasonable efforts to provide
in a timely manner such cooperation or

 

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(1)                                 To be discussed between the parties.

 

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assistance (including by providing any necessary tax forms or other documents)
as may be reasonably requested by Purchaser or the Trustee (at the sole cost of
Purchaser) at any time after the date of this Agreement, so long as the
cooperation or assistance could not reasonably be expected to prejudice in any
material respect the legal or commercial position of Newco or Seller, in order
to reduce or eliminate any amounts deducted or withheld pursuant to
Section 6.2(a) of the Royalty Participation Agreement or any amounts deducted or
withheld by GGL on a Royalty Interest payment under the GGL Agreements.](2)

 

8.                                      [No initial Member in Newco shall be a
person that is not a United States person or a disregarded entity of a United
States person for U.S. federal income tax purposes.](3)

 

9.                                      [Newco will initially be a disregarded
entity for U.S. federal income tax purposes.](4)

 

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(2)         To be discussed between the parties.

 

(3)         To be discussed between the parties.

 

(4)         To be discussed between the parties.

 

F-2

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EXHIBIT G

 

FORM OF LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

[TAURUS], LLC

 

THIS LIMITED LIABILITY COMPANY AGREEMENT, dated as of May [    ], 2013 (as the
same may be further amended or otherwise modified from time to time, together
with the schedules attached hereto, the “Agreement”) of [TAURUS], LLC, a
Delaware limited liability company (the “Company”), is entered into by [TAURUS],
a Delaware corporation, as the sole member (the “Member”) of the Company.

 

RECITAL

 

The Member has formed the Company as a limited liability company under the laws
of the State of Delaware and desires to enter into a written agreement, in
accordance with the provisions of the Delaware Limited Liability Company Act (6
Del. C. § 18-101 et seq.) and any successor statute, as amended from time to
time (the “Act”), governing the affairs of the Company and the conduct of its
business.   Capitalized terms used herein and not otherwise defined have the
meanings set forth on Schedule A hereto.

 

Section 1.                                                                  
Formation.

 

The Member has previously formed the Company as a limited liability company
pursuant to the provisions of the Act.  A certificate of formation for the
Company as described in Section 18-201 of the Act (the “Certificate of
Formation”) has been filed in the Office of the Secretary of State of the State
of Delaware in conformity with the Act under the name “[TAURUS], LLC” on
May     , 2013, by [NAME OF AUTHORIZED PERSON] as an “authorized person” within
the meaning of the Act.   The Member, by execution of this Agreement, hereby
ratifies and approves the execution, delivery and filing of the Certificate of
Formation of the Company in such manner.  Upon the execution of this Agreement,
[NAME OF AUTHORIZED PERSON]’s authority shall cease and the Member shall be
designated as an “authorized person” within the meaning of the Act to execute,
deliver and file, or cause the execution, delivery and filing of, all
certificates (and any amendments and/or restatements thereof) required by the
Act.  In connection therewith, the Company and, if required, the Member, in its
capacity as the “authorized person” within the meaning of the Act to take such
actions, shall execute or cause to be executed from time to time all other
instruments, certificates, notices and documents and shall do or cause to be
done all such acts and things (including keeping books and records and making
publications or periodic filings) as may now or hereafter be required for the
formation, valid existence and, when appropriate, termination of the Company as
a limited liability company under the laws of the State of Delaware.

 

Section 2.                                                                  
Name.

 

The name of the Company shall be “[TAURUS], LLC” and its business shall be
carried on in such name with such variations and changes as the Board (as

 

G-1

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hereinafter defined) shall determine or deem necessary to comply with
requirements of the jurisdictions in which the Company’s operations are
conducted.

 

Section 3.                                                                  
Principal Business Office.

 

The principal business office of the Company shall be located at [PRINCIPAL
BUSINESS ADDRESS], or such other location as may hereafter be determined by the
Board from time to time.  The Board may, from time to time, change the Company’s
principal business office and may establish such other place or places of
business within or without the State of Delaware as the Board may deem
advisable.

 

Section 4.                                                                  
Registered Office.

 

The address of the registered office of the Company in the State of Delaware is
c/o [NAME OF REGISTERED AGENT], [ADDRESS], [CITY], [COUNTY], Delaware [ZIP
CODE].  The Board may, from time to time, change the Company’s registered office
and shall forthwith amend the Certificate of Formation to reflect such change.

 

Section 5.                                                                  
Registered Agent.

 

The name and address of the registered agent of the Company for service of
process on the Company in the State of Delaware is [NAME OF REGISTERED AGENT]
[ADDRESS], [CITY], [COUNTY], Delaware [ZIP CODE].  The Board may, from time to
time, change the Company’s registered agent and shall forthwith amend the
Certificate of Formation to reflect such change.

 

Section 6.                                                                  
Member; No Liability of Member.

 

(a)                                                         The name and the
mailing address of the Member as of the date hereof are set forth on Schedule B
attached hereto.

 

(b)                                                         Subject to
Section 10(j), the Member may act by written consent.

 

(c)                                                          All debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and the Member shall not be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being the Member.

 

Section 7.                                                                  
Authorized Person; Filings; Term of Existence; Fiscal Year.

 

The Member shall be the designated “authorized person” within the meaning of the
Act.  The Member or an Officer shall execute, deliver and file any certificates
(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in any jurisdiction in which the Company may wish to
conduct business.  The existence of the Company as a separate legal entity shall
continue until the cancellation of its Certificate of Formation as provided in
the Act.  The “Fiscal Year” of the Company shall be from [January 1] to
[December 31] of each year.

 

2

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Section 8.                                                                  
Purposes.

 

(a)                                                         Subject to
Section 10(j), the purposes of the Company are to engage in any activity that
Delaware limited liability company may engage in under Delaware Law.

 

(b)                                                         The Company, by or
through any Manager or any Officer on behalf of the Company, may execute,
deliver, enter into and perform the Transaction Documents, and all documents,
instruments, agreements, certificates, or financing statements contemplated
thereby or related thereto, all without any further act, vote or approval of the
Member or any Manager or Officer notwithstanding any other provision of this
Agreement, the Act or applicable law, rule or regulation.  The foregoing
authorization shall not be deemed a restriction on the powers of any Manager or
any Officer to enter into other documents, instruments, agreements, certificates
or financing statements on behalf of the Company.

 

(c)                                                          The Company will
cause [NEWCO]’s organizational documents to at all times during the term of the
Trust include the provisions set forth in Exhibit I attached hereto.

 

(d)                                                         The Company will
become a member of [NEWCO] and in such capacity cause [NEWCO] to comply with the
provisions set forth in Exhibit II attached hereto.

 

Section 9.                                                                  
Powers.

 

Subject to Section 10(j), the Company (a) shall have and exercise all powers and
rights necessary, convenient or incidental to accomplish its purposes as set
forth in Section 8 and (b) shall have and exercise all of the powers and rights
conferred upon limited liability companies formed pursuant to the Act.

 

Section 10.                                                           
Management.

 

(a)                                                         Board of Managers.
Subject to Section 10(j), the business and affairs of the Company shall be
managed by or under the direction of a Board of two or more Managers.  The
Member shall designate, appoint and elect each Manager.  Subject to Section 11,
the Member may determine at any time in its sole and absolute discretion the
number of Managers to constitute the Board.  The authorized number of Managers
may be increased or decreased by the Member at any time in its sole and absolute
discretion, upon notice to all Managers, and subject in all cases to
Section 11.  The initial number of Managers shall be five, two of which shall be
Independent Managers pursuant to Section 11.  Each Manager elected, designated
or appointed shall hold office until a successor is elected and qualified or
until such Manager’s earlier death, resignation or removal.  Each Manager shall
execute and deliver the Management Agreement. Managers need not be Members. The
initial Managers hereby designated by the Member are listed in Schedule B
hereto.

 

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(b)                                 Powers.  Subject to Section 10(j), the Board
of Managers shall have the power to do any and all acts necessary, convenient or
incidental to or for the furtherance of the purposes described herein, including
all powers, statutory or otherwise. Subject to Section 10(j), the Board of
Managers has the authority to bind the Company pursuant to a resolution
expressly authorizing any matter which resolution is duly adopted by an
affirmative vote of a majority of the Board or as otherwise required by this
Agreement.  An individual Manager shall not have the authority to bind the
Company to any matter involving a third party without the affirmative vote of a
majority of the Board or as otherwise required pursuant to this Agreement.

 

(c)                                  Meeting of the Board of Managers. The Board
of Managers may hold meetings, both regular and special, within or outside the
State of Delaware. Regular meetings of the Board may be held without notice at
such time and at such place as shall from time to time be determined by the
Board. Special meetings of the Board may be called by the President on not less
than one day’s notice to each Manager by telephone, facsimile, mail, telegram or
any other means of communication, and special meetings shall be called by the
President or Secretary in like manner and with like notice upon the written
request of any one or more of the Managers.

 

(d)                                 Quorum; Acts of the Board. At all meetings
of the Board, a majority of the Managers shall constitute a quorum for the
transaction of business and, except as otherwise provided in any other provision
of this Agreement, the act of a majority of the Managers present at any meeting
at which there is a quorum shall be the act of the Board.  If a quorum shall not
be present at any meeting of the Board, the Managers present at such meeting may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.  Any action required or permitted
to be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.

 

(e)                                  Electronic Communications. Members of the
Board, or any committee designated by the Board, may participate in meetings of
the Board, or any committee, by means of telephone conference or similar
communications equipment that allows all persons participating in the meeting to
hear each other, and such participation in a meeting shall constitute presence
in person at the meeting.  If all the participants are participating by
telephone conference or similar communications equipment, the meeting shall be
deemed to be held at the principal place of business of the Company.

 

(f)                                   Committees of Managers.

 

(i)             The Board may, by resolution passed by a majority of the whole
Board, designate one or more committees, each committee to consist of one or
more of the Managers of the Company. The Board may designate one or more
Managers as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee.

 

4

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(ii)          In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not such members constitute a quorum, may unanimously appoint
another member of the Board to act at the meeting in the place of any such
absent or disqualified member.

 

(iii)       Any such committee, to the extent provided in the resolution of the
Board, shall have and may exercise all the powers and authority of the Board in
the management of the business and affairs of the Company. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board. Each committee shall keep regular minutes of
its meetings and report the same to the Board when required.

 

(g)                                  Compensation of Managers; Expenses. The
Board shall have the authority to fix the compensation of Managers. The Managers
may be paid their expenses, if any, of attendance at meetings of the Board,
which may be a fixed sum for attendance at each meeting of the Board or a stated
salary as Manager.  No such payment shall preclude any Manager from serving the
Company in any other capacity and receiving compensation therefor.  Members of
special or standing committees may be allowed like compensation for attending
committee meetings.

 

(h)                                 Remova1 of Managers. Unless otherwise
restricted by law, any Manager or the entire Board of Managers may be removed,
with or without cause, at any time by the Member, and, subject to Section 11,
any vacancy caused by any such removal may be filled by action of the Member. 
Except as provided in this Agreement, a Manager may not bind the Company.

 

(i)                                     Managers as Agents. To the extent of
their powers set forth in this Agreement and subject to Section 10(j), the
Managers are agents of the Company for the purpose of the Company’s business,
and the actions of the Managers taken in accordance with such powers set forth
in this Agreement shall bind the Company.

 

(j)                                    Limitations on the Company’s Activities.

 

(i)             This Section 10(j) is being adopted in order to comply with
certain provisions required in order to qualify the Company as a “special
purpose entity.”

 

(ii)          The Member shall not amend, alter, change or repeal the definition
of “Independent Manager” or Section 8, 9, 10, 11, 19, 20, 22, 23, 24 or the
definition of “Independent Manager” set forth in Schedule A of this Agreement or
engage in any business or activity other than as set forth in
Section 8(a) without the unanimous written consent of the Board (including both
Independent Managers). Subject to this Section 10(j), the Member may amend,
alter, change or repeal any provisions contained in this Agreement in accordance
with Section 29.

 

5

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(iii)       Notwithstanding any other provision of this Agreement and any
provision of law that otherwise so empowers the Company, the Member or the
Board, neither the Member nor the Board shall be authorized or empowered, nor
shall they permit the Company, without the prior unanimous written consent of
the Member and the Board (including both Independent Managers), to take any
Material Action.

 

(iv)      The Board and the Member shall cause the Company to do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board shall determine that the preservation thereof is no longer
desirable for the conduct of its business.  The Board shall cause the Company to
be operated in such a manner as the Board deems reasonable and necessary or
appropriate to preserve the limited liability of the Member, the separateness of
the Company from the business and affairs of the Member or any Affiliate of the
Member, and until one year and one day after any indebtedness and any other
liabilities of the Company have been paid in full, the special purpose,
bankruptcy remote status of the Company. The Board also shall cause the Company
to:

 

(1)                                 hold itself out to the public and all other
Persons as a legal entity separate from the members and any other person and
conduct its own business in its own name and require that all full-time
employees of the Company, if any, identify themselves as such and not as
employees of the Member or any of its subsidiaries;

 

(2)                                 maintain the Company’s books, records and
bank accounts separate from those of the Member and each other subsidiary of the
Member and otherwise in such a manner so that such books and records are readily
identifiable as its own assets rather than assets of the Member or any such
subsidiary;

 

(3)                                 have a Board composed differently from that
of the Member and any other Person;

 

(4)                                 file its own tax returns, if any, as may be
required under applicable law, to the extent (A) not part of a consolidated
group filing a consolidated return or returns or (B) not treated as a division
for tax purposes of another taxpayer, and pay any taxes so required to be paid
under applicable law;

 

(5)                                 allocate fairly and reasonably any taxes and
any overhead expenses that are shared with an affiliate, including

 

6

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for shared office space and for services performed by an employee of an
Affiliate;

 

(6)                                 except as specifically permitted herein or
in the Transaction Documents, not commingle its assets with assets of any other
Person;

 

(7)                                 maintain separate financial statements,
showing its assets and liabilities separate and apart from those of any other
person and not have its assets listed on any financial statement of any other
person; provided, however, that the Company’s assets may be included in a
consolidated financial statement of its Affiliate; provided that (A) appropriate
notation shall be made on such consolidated financial statements to indicate the
separateness of the Company from such Affiliate and to indicate that the
Company’s assets and credit are not available to satisfy the debts and other
obligations of such Affiliate or any other company and (B) such assets shall
also be listed on the Company’s own separate balance sheet;

 

(8)                                 pay its indebtedness and other liabilities
out of its own funds and assets;

 

(9)                                 maintain an arm’s-length relationship with
the Member and its other Affiliates;

 

(10)                          pay the salaries of its own officers and
employees, if any;

 

(11)                          not hold out its credit as being available to
satisfy the obligations of others;

 

(12)                          allocate fairly and reasonably any overhead for
office space or other expenses incurred by itself or any Affiliate on its
behalf;

 

(13)                          use stationery, invoices, checks and other
business forms separate from those of any other Person;

 

(14)                          not pledge its assets for the benefit of any other
Person (except as contemplated by the Transaction Documents to which it is a
party);

 

(15)                          correct any known misunderstanding regarding its
separate identity;

 

(16)                          maintain at all times adequate capital in light of
its contemplated business operations and liabilities and refrain

 

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from making any distributions or other payments in respect of its membership
interests (including any repurchase of membership interests or return of
capital) that would cause it to have inadequate capital;

 

(17)                          cause its Board of Managers to meet at least
annually or act pursuant to written consent and keep minutes of such meetings
and actions and observe all other Delaware limited liability company
formalities;

 

(18)                          cause its officers and managers, to the extent
permitted by law, until one year and one day after any indebtedness and any
other liabilities of the Company are paid in full, to make decisions with
respect to the business and daily operations of the Company independent of, and
not dictated by, the Member or any Affiliate of the Member;

 

(19)                          not acquire any obligations or securities of the
Member; and

 

(20)                          except as otherwise provided herein, maintain its
Certificate of Formation and this Agreement in conformity with the Transaction
Documents, such that it does not amend, restate, supplement or otherwise modify
its Certificate of Formation and this Agreement in any respect that would impair
its ability to comply with the terms or provisions of any of the Transaction
Documents.

 

(v)         The Board shall not cause or permit the Company to:

 

(1)                                 guarantee any obligation of any Person,
including any Affiliate of the Company;

 

(2)                                 engage, directly or indirectly, in any
business other than as contemplated by this Agreement;

 

(3)                                 incur, create or assume any indebtedness
other than as contemplated by this Agreement or the Transaction Documents to
which the Company is a party;

 

(4)                                 take any action relating to (A) the
dissolution or liquidation of the Company or (B) the initiation of,
participation in, acquiescence in or consent to any bankruptcy, insolvency,
reorganization or similar proceeding involving the Company, that is not duly
authorized by unanimous vote of its managers (including the Independent
Managers);

 

8

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(5)                                 maintain its separateness such that it does
not merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions, and
except as otherwise contemplated herein) all or substantially all of its assets
(whether now owned or hereafter acquired) to, or acquire all or substantially
all of the assets of, any Person, nor at any time create, have, acquire,
maintain or hold any interest in any subsidiary; or

 

(6)                                 observe all organizational formalities as a
distinct entity, and ensure that all actions relating to (A) the dissolution or
liquidation of the Company or (B) the initiation of, participation in,
acquiescence in or consent to any bankruptcy, insolvency, reorganization or
similar proceeding involving the Company, are duly authorized by unanimous vote
of its managers (including the Independent Managers).

 

Failure of the Company to comply with any of the covenants in this
Section 10(j) shall not affect the status of the Company as a separate legal
entity or the limited liability of the Member and Managers.

 

Section 11.                                                           
Independent Managers.

 

The Member shall cause the Company at all times to have at least two Independent
Managers, each of whom will be appointed by the Member.  To the fullest extent
permitted by Section 18-1101(c) of the Act, each of the Independent Managers
shall consider only the interests of the Company and its creditors in acting or
otherwise voting on matters subject to the vote of the Board of Managers,
including those matters referred to in Sections 10(j)(iii) and (iv).  No
resignation or removal of an Independent Manager, and no appointment of a
successor Independent Manager, shall be effective until the successor
Independent Manager shall have accepted its appointment by a written instrument,
which may be a counterpart signature page to the Management Agreement.  All
right, power and authority of the Independent Managers shall be limited to the
extent necessary to exercise those rights and perform those duties specifically
set forth in this Agreement.  Except as provided in the second sentence of this
Section 11, in exercising their rights and performing their duties under this
Agreement, the Independent Managers shall have a fiduciary duty of loyalty and
care to the Company and its creditors similar to that of a director of a
business corporation organized under the General Corporation Law of the State of
Delaware.  Except as provided in this Agreement, an Independent Manager shall
not bind the Company.  The Member shall provide not less than ten (10) days’
prior written notice to the Company of the replacement or appointment of any
Manager that is to serve as an Independent Manager for purposes of this
Agreement.  As a condition to the effectiveness of any such replacement or
appointment, the Member shall certify to the Company that the designated Person
satisfied the criteria set forth in the definition of “Independent Manager” and
the Board shall acknowledge in writing, that in the Board’s reasonable judgment,
the designated Person satisfies the criteria set forth in the definition of
“Independent Manager.”

 

9

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Section 12.                                                            Officers.

 

(a)                                 Officers. The Officers of the Company shall
consist of at least a President, a Secretary and a Treasurer.  The Officers of
the Company as of the date hereof are listed in Schedule B hereto. The Board of
Managers or the Member may also choose a Chief Financial Officer and a General
Counsel (or an Associate General Counsel) and one or more Vice Presidents,
Assistant Secretaries, Assistant Treasurers and Assistant General Counsel in
addition to the initial Officers appointed by the Member.  Any number of offices
may be held by the Member or the same person.  The Board or the Member shall
choose a President, a Secretary and a Treasurer following the resignation or
removal of the initial Officers appointed by the Member.  The Board or the
Member may appoint such other Officers and agents as it shall deem necessary or
advisable who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board.  The salaries of all Officers and agents of the Company, if any, shall be
fixed by or in the manner prescribed by the Board.  The Officers of the Company
shall hold office until their successors are chosen and qualified. Any Officer
elected or appointed by the Member or the Board may be removed at any time, with
or without cause, by the affirmative vote of a majority of the Board.  Any
vacancy occurring in any office of the Company shall be filled by the Board.

 

(b)                                 President. The President shall be the chief
executive officer of the Company, shall preside at all meetings of the Member,
if any, and the Board, shall be responsible for the general and active
management of the business of the Company and shall see that all orders and
resolutions of the Board are carried into effect. The President shall execute
all bonds, mortgages and other contracts, except:  (i) where required or
permitted by law or this Agreement to be otherwise signed and executed,
including Section 8(b); (ii) where signing and execution thereof shall be
expressly delegated by the Board to some other Officer or agent of the Company;
and (iii) as otherwise permitted in Section 12(c).

 

(c)                                  Vice President. In the absence of the
President or in the event of the President’s inability to act, the Vice
President, if any (or in the event there be more than one Vice President, the
Vice Presidents in the order designated by the Managers, or in the absence of
any designation, then in the order of their election), shall perform the duties
of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President.  The Vice Presidents, if
any, shall perform such other duties and have such other powers as the Board may
from time to time prescribe.

 

(d)                                 Secretary and Assistant Secretary. The
Secretary shall be responsible for filing legal documents and maintaining
records for the Company except to the extent that such duties are allocated to
the Chief Financial Officer, General Counsel, Associate General Counsel and/or
Assistant General Counsel, if any.  The Secretary shall attend all meetings of
the Board and all meetings of the Company, if any, and record all the
proceedings of the meetings of the Company and of the Board in a book to be kept
for that purpose and shall perform like duties for the standing committees when
required.  The Secretary shall give, or cause to be given, notice of all
meetings of the Company, if

 

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any, and special meetings of the Board, and shall perform such other duties as
may be prescribed by the Board or the President, under whose supervision the
Secretary shall serve.  The Assistant Secretary, or if there be more than one,
the Assistant Secretaries in the order determined by the Board (or if there be
no such determination, then in order of their election), shall, in the absence
of the Secretary or in the event of the Secretary’s inability to act, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board may from time to time prescribe.

 

(e)                                  Treasurer and Assistant Treasurer. The
Treasurer shall have the custody of the Company funds and securities and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the Company and shall deposit all moneys and other valuable effects in the
name and to the credit of the Company in such depositories as may be designated
by the Board.  The Treasurer shall disburse the funds of the Company as may be
ordered by the Board, taking proper vouchers for such disbursements, and shall
render to the President and to the Board, at its regular meetings or when the
Board so requires, an account of all of the Treasurer’s transactions and of the
financial condition of the Company.  The Assistant Treasurer, or if there shall
be more than one, the Assistant Treasurers in the order determined by the Board
(or if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer or in the event of the Treasurer’s
inability to act, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the Board may
from time to time prescribe.  Any of the duties of the Treasurer and Assistant
Treasurer described in this clause (e) may also be performed by the Chief
Financial Officer, if any.

 

(f)                                   Officers as Agents. The Officers, to the
extent of their powers set forth in this Agreement or otherwise vested in them
by action of the Board not inconsistent with this Agreement, are agents of the
Company for the purpose of the Company’s business, and, subject to
Section 10(j), the actions of the Officers taken in accordance with such powers
shall bind the Company.

 

(g)                                  Duties of Board and Officers. Except to the
extent otherwise provided herein, each Manager and Officer shall have a
fiduciary duty of loyalty and care similar to that of directors and officers of
business corporations organized under the General Corporation Law of the State
of Delaware.

 

Section 13.                                                            Limited
Liability.

 

Except as otherwise expressly provided by the Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be the debts, obligations and liabilities solely of the Company, and none
of the Member or any Manager shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being the Member or a
Manager of the Company.

 

11

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Section 14.                                                            Capital
Contributions.

 

The Member will be deemed admitted as the Member of the Company upon the
execution and delivery of this Agreement. The Member has made a capital
contribution to the Company listed on Schedule B attached hereto.

 

Section 15.                                                           
Additional Contributions.

 

The Member is not required to make any additional capital contribution to the
Company.  The Member may make additional capital contributions to the Company at
any time.  The Member shall maintain records setting forth in reasonable detail
any additional capital contributions made by the Member to the Company.  The
provisions of this Agreement, including this Section 15, are intended solely to
benefit the Member and, to the fullest extent permitted by law, shall not be
construed as conferring any benefit upon any creditor of the Company (and no
such creditor of the Company shall be a third-party beneficiary of this
Agreement) and the Member shall not have any duty or obligation to any creditor
of the Company to make any contribution to the Company or to issue any call for
capital pursuant to this Agreement.

 

Section 16.                                                           
Allocation of Profits and Losses; Tax Treatment.

 

(a)                                 For financial accounting and tax purposes,
the Company’s net profits or net losses shall be determined on an annual basis
in accordance with the manner determined by the Member.  Net income of the
Company for federal income tax purposes (and each item of income, gain, loss and
deduction entering into the calculation thereof) shall be allocated to the
Member.

 

(b)                                 Unless otherwise determined by the Member,
the Company shall be a disregarded entity for U.S. federal income tax purposes
(as well as for any analogous state or local tax purposes), and the Member and
the Company shall timely make any and all necessary elections and filings for
the Company in connection with treatment as a disregarded entity for U.S.
federal income tax purposes (as well as for any analogous state or local tax
purposes).

 

Section 17.                                                           
Distributions.

 

Unless otherwise directed by the Board, distributions on the Company’s property
shall be distributed to the Member at the direction of the Member, which
direction may be standing instructions.  In the absence of any direction to the
contrary by the Member, distributions shall be made to the Member at the times
and in the aggregate amounts determined by the Board.  Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not be
required to make a distribution to the Member on account of its interest in the
Company if such distribution would violate Section 18-607 of the Act or any
other applicable law.

 

Section 18.                                                            Books and
Records; Bank Accounts.

 

(a)                                 The Board shall keep or cause to be kept
complete and accurate books of account and records with respect to the Company’s
business.  The books of the Company shall at all times be maintained by the
Board.  The Member and its duly

 

12

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authorized representatives shall have the right to examine the Company books,
records and documents during normal business hours.  The Company’s books of
account shall be kept using the method of accounting determined by the Member. 
The Company’s independent auditor shall be an independent public accounting firm
selected by the Member.

 

(b)                                 The Member may authorize any Manager or
Officer to open and maintain one or more bank accounts; rent safety deposit
boxes or vaults; sign checks, written directions, or other instruments to
withdraw all or any part of the funds belonging to the Company and on deposit in
any savings account or checking account; negotiate and purchase certificates of
deposit, obtain access to the Company safety deposit box or boxes, and generally
sign such forms on behalf of the Company as may be required to conduct the
banking activities of the Company.

 

Section 19.                                                            Other
Business; Business Transactions of the Member with the Company; Company
Property.

 

(a)                                 The Member and any Affiliate thereof may
engage in or possess an interest in other business ventures (unconnected with
the Company) of every kind and description, independently or with others. The
Company shall not have any rights in or to such independent ventures or the
income or profits therefrom by virtue of this Agreement.

 

(b)                                 In accordance with Section 18-107 of the
Act, the Member or any Affiliate thereof may lend money to, borrow money from,
act as surety, guarantor or endorser for, guarantee or assume one or more
obligations of, provide collateral for, and transact other business with, the
Company and, subject to applicable law, shall have the same rights and
obligations with respect to any such matter as a Person who is not the Member or
an Affiliate thereof.

 

(c)                                  No real or other property of the Company
shall be deemed to be owned by the Member individually, but shall be owned by
and title shall be vested solely in the Company.

 

Section 20.                                                           
Exculpation and Indemnification.

 

(a)                                 The Member shall not, and no Officer,
Manager, employee or agent of the Company and no employee, representative, agent
or Affiliate of the Member (collectively, the “Covered Persons”) shall, be
liable to the Company or any other Person who has an interest in or claim
against the Company for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Covered Person in good faith on behalf
of the Company and in a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement, except that a
Covered Person shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person’s gross negligence or willful misconduct.

 

(b)                                 To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim

 

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incurred by such Covered Person by reason of any act or omission performed or
omitted by such Covered Person in good faith on behalf of the Company and in a
manner reasonably believed to be within the scope of the authority conferred on
such Covered Person by this Agreement, except that no Covered Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Covered Person by reason of such Covered Person’s gross negligence or
willful misconduct with respect to such acts or omissions; provided, however,
that any indemnity under this Section 20 shall be provided out of and to the
extent of Company assets only, and the Member shall not have personal liability
on account thereof.

 

(c)                                  To the fullest extent permitted by
applicable law, expenses (including legal fees) incurred by a Covered Person
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Company prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Company of an undertaking
by or on behalf of the Covered Person to repay such amount if it shall be
determined that the Covered Person is not entitled to be indemnified as
authorized in this Section 20.

 

(d)                                 A Covered Person shall be fully protected in
relying in good faith upon the records of the Company and upon such information,
opinions, reports or statements presented to the Company by any Person as to
matters the Covered Person reasonably believes are within such other Person’s
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Company, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, or any other
facts pertinent to the existence and amount of assets from which distributions
to the Member might properly be paid.

 

(e)                                  To the extent that, at law or in equity, a
Covered Person has duties (including fiduciary duties) and liabilities relating
thereto to the Company or to any other Covered Person, a Covered Person acting
under this Agreement shall not be liable to the Company or to any other Covered
Person for its good faith reliance on the provisions of this Agreement or any
approval or authorization granted by the Company or any other Covered Person.
The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Member to replace such other duties and liabilities of such
Covered Person.

 

(f)                                   The foregoing provisions of this
Section 20 shall survive any termination of this Agreement.

 

Section 21.                                                            Transfer.

 

The Member shall be entitled to sell, convey, assign, transfer, pledge, grant a
security interest in or otherwise dispose of all or any part of its interest in
the Company subject to the execution and delivery of such documentation required
by the Board in connection therewith; provided, however, that no such assignment
shall relieve the Member from its obligations hereunder.

 

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Section 22.                                                           
Dissolution.

 

(a)                                 Subject to Section 10(j), the Company shall
be dissolved and its affairs shall be wound up upon the first to occur of the
following: (i) the Member votes for dissolution or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

 

(b)                                 No other event, including the retirement,
insolvency, liquidation, dissolution, insanity, expulsion, Bankruptcy, death,
incapacity or adjudication of incompetency of the Member, shall cause the
existence of the Company to terminate.  Upon the Bankruptcy of the Member, the
retirement or dissolution of the Member or the occurrence of any other event
which terminates the continued membership of the Member in the Company, each
Independent Manager shall become a special member of the Company and the
business of the Company shall continued in a manner permitted by the Act.

 

(c)                                  The Bankruptcy of the Member shall not
cause the Member to cease to be a member of the Company and upon the occurrence
of such an event, the business of the Company shall continue without
dissolution.  Notwithstanding any other provision of this Agreement, the Member
waives any right that it might have under Section 18-80l (b) of the Act to agree
in writing to dissolve the Company upon the Bankruptcy of the Member or the
occurrence of any event that causes the Member to cease to be a member of the
Company.

 

(d)                                 In the event of dissolution, the Company
shall conduct only such activities as are necessary to wind up its affairs
(including the sale of the assets of the Company in an orderly manner), and the
assets of the Company shall be applied in the manner, and in the order of
priority, set forth in Section 18-804 of the Act.

 

Section 23.                                                            Waiver of
Partition; Nature of Interest.

 

Except as otherwise expressly provided in this Agreement, to the fullest extent
permitted by law, the Member hereby irrevocably waives any right or power that
the Member might have to cause the Company or any of its assets to be
partitioned, to cause the appointment of a receiver for all or any portion of
the assets of the Company, to compel any sale of all or any portion of the
assets of the Company pursuant to any applicable law or to file a complaint or
to institute any proceeding at law or in equity to cause the dissolution,
liquidation, winding up or termination of the Company.  The Member shall not
have any interest in any specific assets of the Company, and the Member shall
not have the status of a creditor with respect to any distribution pursuant to
Section 17 hereof. The interest of the Member in the Company is personal
property.

 

Section 24.                                                            Benefits
of Agreement; No Third-Party Rights.

 

None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditor of the Company or by any creditor of the Member. 
Subject to Section 27, nothing in this Agreement shall be deemed to create any
right in any Person (other than Covered Persons) not a party hereto, and this
Agreement shall not be

 

15

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construed in any respect to be a contract in whole or in part for the benefit of
any third Person.

 

Section 25.                                                           
Severability of Provisions.

 

Each provision of this Agreement shall be considered severable and if for any
reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of or affect those
portions of this Agreement which are valid, enforceable and legal.

 

Section 26.                                                            Entire
Agreement.

 

This Agreement constitutes the entire agreement of the parties with respect to
the subject matter hereof.

 

Section 27.                                                            Binding
Agreement.

 

Notwithstanding any other provision of this Agreement, the Member agrees that
this Agreement constitutes a legal, valid and binding agreement of the Member,
and is enforceable against the Member by each Independent Manager in accordance
with its terms. Each Independent Manager is an intended beneficiary of this
Agreement.

 

Section 28.                                                            Governing
Law.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF
DELAWARE (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES), ALL RIGHTS AND
REMEDIES BEING GOVERNED BY SUCH LAWS.

 

Section 29.                                                           
Amendments.

 

(a)                                 This Agreement may be amended, supplemented
or otherwise modified by the Member to cure any ambiguity, to correct or
supplement any provisions in this Agreement, to add any provisions to this
Agreement, to change this Agreement in any manner or to eliminate any of the
provisions in this Agreement subject in each case to Section 10(j).

 

(b)                                 Any amendment, supplement or other
modification to this Agreement shall be in writing.  Promptly after the
execution of any amendment, supplement or other modification to this Agreement,
the Company shall furnish a copy of such amendment, supplement or other
modification to the Member.

 

(c)                                  Promptly after the execution of any
amendment, supplement or other modification to the Certificate of Formation, the
Company shall cause its filing with the Secretary of State of the State of
Delaware.

 

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Section 30.                                                           
Counterparts.

 

This Agreement may be executed in any number of counterparts, including by
telefacsimile or other electronic means of communication, each of which shall be
deemed an original of this Agreement and all of which together shall constitute
one and the same instrument.

 

Section 31.                                                            Notices.

 

Any notices required to be delivered hereunder shall be in writing and
personally delivered, mailed or sent by electronic mail, telefacsimile or other
similar form of rapid transmission, and shall be deemed to have been duly given
upon receipt (a) in the case of the Company, to the Company at its address in
Section 3, (b) in the case of the Member, to the Member at its address as listed
on Schedule B attached hereto and (c) in the case of either of the foregoing, at
such other address as may be designated by written notice to the other party.

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has
duly executed this Limited Liability Company Agreement of [TAURUS], LLC as of
the date first above written.

 

 

 

MEMBER:

 

 

 

[TAURUS], LLC

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[TAURUS], LLC

LIMITED LIABILITY COMPANY AGREEMENT

 

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SCHEDULE A

 

DEFINITIONS

 

A.                                    Definitions

 

When used in this Agreement, the following terms not otherwise defined herein
have the following meanings:

 

“Act” has the meaning set forth in the preamble to this Agreement.

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such Person.

 

“Agreement” means this Limited Liability Company Agreement of the Company, dated
as of May     , 2013 and entered into by the Member as the sole member of the
Company, together with the schedules attached hereto, as amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof.

 

“Assignment Agreement” means the Assignment Agreement, dated as of May     ,
2013, by and between [TAURUS] and [NEWCO].

 

“Bankruptcy” means, with respect to any Person, if (i) such Person makes an
assignment for the benefit of creditors, (ii) such Person files a voluntary
petition in bankruptcy, (iii) such Person is adjudged a bankrupt or insolvent,
or has entered against it an order for relief, in any bankruptcy or insolvency
proceeding, (iv) such Person files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, or similar
relief under any statute, law or regulation, (v) such Person files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against it in any proceeding of this nature, (vi) such Person
seeks, consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the Person or of all or any substantial part of its properties, or
(vii) 120 days after the commencement of any proceeding against the Person
seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation, the
proceeding has not been dismissed, or within 90 days after the appointment
without such Person’s consent or acquiescence of a trustee, receiver or
liquidator of such Person or of all or any substantial part of its properties,
the appointment is not vacated or stayed, or within 90 days after the expiration
of any such stay, the appointment is not vacated. With respect to the Member,
the foregoing definition of “Bankruptcy” is intended to replace and shall
supersede and replace the definition of “Bankruptcy” set forth in Sections
18-101 (1) and 18-304 of the Act.

 

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“Board” or “Board of Managers” means the Board of Managers of the Company.

 

“Certificate of Formation” means the Certificate of Formation of the Company,
filed with the Secretary of State of the State of Delaware on May     , 2013, as
the same may be amended, supplemented or otherwise modified from time to time.

 

“Company” means [TAURUS], LLC, a Delaware limited liability company.

 

“Control” means the possession, directly or indirectly, or the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities or general partnership or managing
member interests, by contract or otherwise. “Controlling” and “Controlled” shall
have correlative meanings. Without limiting the generality of the foregoing, a
Person shall be deemed to Control any other Person in which it owns, directly or
indirectly, a majority of the ownership interests.

 

“Covered Persons” has the meaning set forth in Section 20(a) of this Agreement.

 

“[EUROPA]” means [EUROPA], an Irish public limited company.

 

“Fiscal Year” has the meaning set forth in Section 7 of this Agreement.

 

“Independent Manager” means a natural person who, (A) (1) has prior experience
as an independent director, independent manager or independent member with at
least three years of employment experience with one or more entities that
provide, in the ordinary course of their respective businesses, advisory,
management or placement services to issuers of securitization or structured
finance instruments, agreements or securities and (2) is provided by CT
Corporation, Corporation Service Company, National Registered Agents, Inc.,
Wilmington Trust Company SP Services, Inc., Stewart Management Company, Lord
Securities Corporation or, if none of those companies is then providing
professional Independent Managers, another nationally-recognized company
reasonably approved by the Member and by [EUROPA], in each case that is not an
Affiliate of the Company and that provides professional Independent Managers and
other corporate services in the ordinary course of its business, (B) is not, and
has not been for a period of five years prior to his or her appointment as an
independent manager of the Company:  (1) a stockholder (whether direct, indirect
or beneficial), counterparty under a contract for commercial services, advisor
or supplier of the Member or any of its Affiliates (the “Parent Group”), (2) a
director, officer, employee, partner, attorney or consultant of the Parent
Group, (3) a person related to any person referred to in clauses (1) or
(2) above, (4) a person or other entity controlling or under common control with
any such stockholder, partner, counterparty under a contract for commercial
services, supplier, employee, officer or director or (5) a trustee, conservator
or receiver for any

 

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member of the Parent Group and (D) shall not at any time serve as a trustee in
bankruptcy for the Company, the Member or any Affiliate thereof, and insure that
(v) no resignation or removal of an Independent Manager shall be effective until
(1) the Company has provided [EUROPA]  with two Business Days’ prior written
notice of such resignation or removal, and (2) a successor Independent Manager
is appointed and such successor shall have accepted his or her appointment as an
Independent Manager by a written instrument, (w) at least two members of the
Company’s Board of Managers shall be Independent Managers, (x) the Company’s
Board of Managers shall not approve, or take any other action to cause the
filing of, a voluntary bankruptcy petition with respect to the Company or
consent to an involuntary bankruptcy petition with respect to the Company unless
a unanimous vote of the Company’s Board of Managers (which vote shall include
the affirmative vote of the Independent Managers) shall approve the taking of
such action in writing prior to the taking of such action, (y) the Company’s
Board of Managers shall not vote on any matter requiring the vote of its
Independent Managers under its limited liability company agreement unless and
until each Independent Manager is then serving on the Company’s Board of
Managers and (z) the provisions requiring Independent Managers and the
provisions described in clauses (x) and (y) of this paragraph (v) cannot be
amended without the prior written consent of the Member and [EUROPA].

 

“Management Agreement” means the agreement of the Managers in the form attached
hereto as Schedule C, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof, which
Management Agreement shall be deemed incorporated into, and part of, this
Agreement.

 

“Managers” means the managers elected to the Board of Managers from time to time
by the Member, including the Independent Managers. Each Manager is hereby
designated as a “manager” of the Company within the meaning of
Section 18-101(10) of the Act.

 

“Material Action” means to consolidate or merge the Company with or into any
Person, or to convey or transfer the property and assets of the Company
substantially as an entirety to any entity other than in the ordinary course of
engaging in the transactions contemplated by the Transaction Documents, or to
institute or participate in proceedings to have the Company be adjudicated
bankrupt or insolvent, or to consent to the institution of bankruptcy or
insolvency proceedings against the Company or to file a petition seeking, or to
consent to, reorganization, liquidation or relief with respect to the Company
under any applicable federal or state law relating to bankruptcy, insolvency,
reorganization or dissolution or to consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or a substantial part of its property, or to make any assignment for the
benefit of creditors of the Company, or to admit in writing the Company’s
inability to pay its debts generally as they become due, or, to the fullest
extent permitted by law, take action in furtherance of any such action, or to
dissolve or liquidate the Company, in whole or in part, or to increase or
reclassify the membership interests of the Company or to issue any additional
membership interests of the Company.

 

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“Member” means [TAURUS], as the sole Member of the Company, and its successors
in interest.

 

“[NEWCO]” means [NEWCO], an English limited partnership.

 

“Officer” means an officer of the Company described in Section 12(a).

 

“Person” means any individual, corporation, partnership, joint venture, limited
liability company, limited liability partnership, association, joint-stock
company, trust, unincorporated organization, or other organization, whether or
not a legal entity, and any governmental authority.

 

“Royalty Participation Agreement” means the Royalty Participation Agreement,
dated as of May     , 2013, by and between [TAURUS] and [EUROPA].

 

“[TAURUS]” means [TAURUS], a Delaware corporation.

 

“Transaction Documents” means this Agreement, the Assignment Agreement, the
Royalty Participation Agreement, the Trust Agreement and all other documents and
certificates delivered in connection herewith or therewith, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Trust Agreement” means the Declaration of Trust, as of May     , 2013, by and
among [TAURUS], [NEWCO] and the other parties thereto.

 

B.                                    Rules of Construction

 

Definitions in this Agreement apply equally to both the singular and plural
forms of the defined terms. The words “include” and “including” shall be deemed
to be followed by the phrase “without limitation.” The terms “herein,” “hereof’
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular Section, paragraph or subdivision. The
Section titles appear as a matter of convenience only and shall not affect the
interpretation of this Agreement. All Section, paragraph, clause, Exhibit or
Schedule references not attributed to a particular document shall be references
to such parts of this Agreement.

 

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SCHEDULE B

 

MEMBER

 

 

Name

 

Mailing Address

 

 

 

 [TAURUS]

 

 

 

 

 

MANAGERS

 

 

Name

 

Mailing Address

 

 

 

1.

 

 

 

 

 

2.

 

 

 

 

 

3.

 

 

 

 

 

4.

 

 

 

 

 

5.

 

 

 

 

 

OFFICERS

 

 

Name

 

Title

 

 

 

 

 

[President]

1.

 

 

 

 

[Vice Presidents]

1.

 

 

2.

 

 

3.

 

 

 

 

[Chief Financial Officer and Treasurer]

1.

 

 

 

 

[General Counsel and Secretary]

1.

 

 

 

 

[Associate General Counsel and Assistant Secretary]

1.

 

 

Initial Capital Contribution of the Member: $1

 

 

 

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SCHEDULE C

 

FORM OF MANAGEMENT AGREEMENT

 

May     , 2013

 

[TAURUS], LLC
[PRINCIPAL BUSINESS ADDRESS]

 

Re:                             Management Agreement

[TAURUS], LLC

 

Ladies and Gentlemen:

 

For good and valuable consideration, each of the undersigned persons, who have
been designated as managers of [TAURUS], LLC, a Delaware limited liability
company (the “Company”), in accordance with the Limited Liability Company
Agreement of the Company, dated as of May     , 2013 (as the same may be
amended, supplemented or otherwise modified from time to time, the “LLC
Agreement”), hereby agree as follows:

 

1.                                      Each of the undersigned accepts such
person’s rights and authority as a Manager under the LLC Agreement and agrees to
perform and discharge such person’s duties and obligations as a Manager under
the LLC Agreement, and further agrees that such rights, authorities, duties and
obligations under the LLC Agreement shall continue until such person’s successor
as a Manager is designated or until such person’s resignation or removal as a
Manager in accordance with the LLC Agreement.  Each of the undersigned agrees
and acknowledges that it has been designated as a “manager” of the Company
within the meaning of Section 18-101(10) of the Delaware Limited Liability
Company Act.

 

2.                                      Each of the undersigned agrees, solely
in its capacity as a creditor of the Company on account of any indemnification
or other payment owing to the undersigned by the Company, not to acquiesce,
petition or otherwise invoke or cause the Company to invoke the process of any
court or governmental authority for the purpose of commencing or sustaining a
case against the Company under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Company or any substantial part of
the property of the Company, or ordering the winding up or liquidation of the
affairs of the Company.

 

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3.                                      THIS MANAGEMENT AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

 

Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the LLC Agreement.

 

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IN WITNESS WHEREOF, the undersigned have executed this Management Agreement as
of the day and year first above written.

 

 

 

 

Name:

 

 

 

 

 

Name:

 

 

 

 

 

Name:

 

 

 

 

 

Name:

 

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Exhibit I

 

PROVISIONS TO BE INCLUDED IN [NEWCO]’S ORGANIZATIONAL DOCUMENTS

(Exhibit F of Royalty Participation Agreement(1))

 

1.                                      The Initial Members will be Seller and
Delaware Sub.

 

2.                                      No other persons shall become Members
without the prior written agreement of [   ].

 

3.                                      The Designated Members shall be all the
Members [or such of the Members as are designated in accordance with the
LPA(2)].  The Designated Members shall be responsible for ensuring compliance
with all registration and other requirements of the Limited Liability
Partnerships Act 2000 and any amendments to that it (the “Act”) and other
applicable legislation.

 

4.                                      The Members will agree that the
relationship between them does not constitute any form of co-ownership of the
assets and liabilities of the LLP or any form of trust under any applicable law
or any form of trust relationship or equitable relationship under any applicable
law.

 

5.                                      The business of the LLP (the “Business”)
shall consist solely of the business determined in accordance with the Trust
Agreement and the Assignment Agreement; provided that the Business shall also
include the acquisition of rights to receive royalty payments or other payments
derived directly or indirectly from the exploitation of intellectual property
related to pharmaceutical products and to sell or otherwise monetize such
rights.

 

6.                                      The Members shall not cause or permit
the LLP during the term of the Trust to (and the LLP shall not):

 

(a)                                 incur any indebtedness for borrowed money;

 

(b)                                 form, acquire or hold any subsidiary
(whether corporate, partnership, limited liability company or other) or own any
equity interest in any other entity;

 

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(1)  Note that defined terms in this Exhibit I are incorporated by reference
from the corresponding definitions in the Royalty Participation Agreement and
not from this Agreement.

(2)  Note that “LPA” is not defined in the Royalty Participation Agreement.

 

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(i)                                     amend the LPA in a manner adverse to
Purchaser;

 

(j)                                    unless required by applicable Law, have
any employees (for the avoidance of doubt, the Members do not constitute
employees);

 

(k)                                 enter into any reconstruction, amalgamation,
merger or consolidation or take any voluntary steps with a view to its
winding-up;

 

(m)                             otherwise than as contemplated in the
Transaction Documents, release from or terminate the appointment of the Account
Bank;

 

(n)                                 subject to any requirement under applicable
Law to maintain a registered office, enter into any lease for, or own, any real
property.

 

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Exhibit II

 

[NEWCO] BANKRUPTCY REMOTENESS PROVISIONS

(Section 6.15(b) of the Royalty Participation Agreement(3))

 

(i)             keep proper books of account in accordance with its obligations
under English law;

 

(ii)          maintain its registered office in the United Kingdom, and not to
establish a branch, agency or place of business or register as a partnership,
company or body corporate within the United States or any other country or
jurisdiction other than the United Kingdom.

 

(iii)       do all such things as are necessary to maintain its limited
liability partnership existence; and

 

(iv)      not:

 

(1)         amend Trust Agreement or the Assignment Agreement;

 

(2)         incur any indebtedness for borrowed money;

 

(3)         amend its partnership agreement in a manner adverse to Purchaser;

 

(4)         unless required by Law, have any employees (for the avoidance of
doubt, the directors of [NEWCO] do not constitute employees);

 

(5)         enter into any reconstruction, amalgamation, merger or consolidation
or take any voluntary steps with a view to its winding-up;

 

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(3)  Note that defined terms in this Exhibit II are incorporated by reference
from the corresponding definitions in the Royalty Participation Agreement and
not from this Agreement.

 

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(6)         otherwise than as contemplated in the Transaction Documents, release
from or terminate the appointment of the Account Bank (as that term is defined
in the Trust Agreement); or

 

(v)         subject to any requirement under applicable Law to maintain a
registered office, enter into any lease for, or own, any real property.

 

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