Exhibit 10.7

SUPPLEMENTAL AGREEMENT

Between:

 

(1) ELAN CORPORATION, PLC, a company incorporated in Ireland having its
registered office at Lincoln House, Lincoln Place, Dublin 2, Ireland (“Elan”);
and

 

(2) WATSON LABORATORIES, INC., as assignee of WATSON PHARMA, INC. (formerly
known as SCHEIN PHARMACEUTICAL, INC.), a company organized under the laws of
Nevada, with offices at c/o Watson Pharma, Inc., 360 Mt. Kemble Ave., PO Box
1953, Morristown, New Jersey 07962-1953, United of America (hereinafter called
“Watson”)

This Agreement replaces Clause 14 and Schedule 4 of the AMENDED AND RESTATED
LICENSE AND SUPPLY AGREEMENT (VERAPAMIL), dated 26th day of June, 2003
(hereinafter called the “Principal Agreement”).

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Elan and Watson agree as follows:

 

  A Defined terms used in this Supplemental Agreement shall have the meaning
assigned to them in the Principal Agreement unless such terms are specifically
defined in this Supplemental Agreement.

 

  B. CLAUSE 14 and SCHEDULE 4 of the Principal Agreement are hereby replaced
with the following:

“Supplemental Agreement”

The purpose of this Supplemental Agreement is to establish written procedures
for the communication and processing of customer Product complaints (i.e.,
technical/non-medical complaints and adverse events), and Product recalls.

This Supplemental Agreement will facilitate compliance with U.S. Federal
Requirements as set forth in “US Code of Federal Regulations (CFR)” 21 CFR
211.198 (Complaint Files) and post marketing adverse drug experience (PADE)
regulations (21 CFR 310.305, 314.80 and 314.98).

 

1 POLICY AND RESPONSIBILITIES

 

  1.1. It is Elan’s policy to collect and evaluate reports of adverse events
that occur in relation to produces for which Elan is the application (e.g., New
Drug Application (NDA), Abbreviated New Drug Application (ANDA) holder). This is
performed in order to assess the validity and significance of alleged adverse
event reports and to take appropriate action in order to comply with relevant
ethical and/or legal obligations.

 

2 ADVERSE EVENTS

 

  2.1. Adverse events will be handled in accordance with the Elan and Watson
Adverse Event Processing Agreement, effective April 5, 2004, or any future
updates to the Adverse Event Processing Agreement, as mutually agreed upon by
both Parties.

 

  2.2. For adverse events, including lack of efficacy reports, it will be the
responsibility of Elan to assess the need for a quality investigation and to
conduct such an investigation, as warranted. When an investigation is warranted,
Elan will provide a written summary of their investigation to Watson’s complaint
operations department within thirty (30) days.

 

3 TECHNICAL/NON-MED1CAL PRODUCT COMPLAINTS

 

  3.1. Product complaints (technical, non-medical events), received by Watson
will be documented and followed up using Watson’s existing Standard Operating
Procedure(s). Watson Corporate Quality Complaint Operations (CQCO) will forward
the complaints for investigation to:

 

Elan Holdings, Inc. ATTN: Director, Quality Assurance 1300 Gould Drive
Gainesville, GA 30504 Telephone No.:    (770) 538-6344 Fax No.:    (770)
534-1534

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  3.2. Elan will be responsible for investigating all Product complaints
associated with the quality of the drug specific dosage form (DSDF), labeling,
packaging, handling, and any other aspects under Elan’s control.

 

  3.3. Elan will provide a written summary of their investigation to Watson’s
complaint operations department within thirty (30) days of either Party
receiving Product complaint.

 

  3.4. Watson will be responsible for the final response to the complainant,
based on the summary forwarded from Elan.

 

  3.5. Complaint reports received by Elan involving United States (U.S.)
marketed batches of Product will be documented. Copies of complaint reports will
be sent to:

 

Technical/Non-medical Product Complaints: Watson Laboratories, Inc. ATTN:
Manager, Complaint Operations 311 Bonnie Circle Corona, California 92880
Telephone No.:    (951) 493-4039 Fax No.:    (951) 493-5872 Adverse Events:
Watson Laboratories, Inc. ATTN: Drug Safely- Adverse Events 311 Bonnie Circle
Corona, California 92880

Fax:    (951) 493-5825

 

  3.6. Complaint reports obtained by Watson which meet field alert report
criteria [21 CFR 314.81 (b)(l)] will be communicated via facsimile within one
(1) working day to:

 

Elan Drug Delivery, Inc. ATTN: Sr. Director, Regulatory Affairs 1300 Gould Drive
Gainesville, GA 30504, USA Telephone No.:   (770) 534-8239 Fax No.:   (770)
531-0835

 

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4 PRODUCT RECALL:

 

  4.1. Both Watson and Elan will cooperate fully in recalling any Product. Costs
and responsibilities associated with a recall are described as follows:

 

  4.1.1. Subject to and without in any way limiting or altering Elan’s statutory
duties and obligations as the holder of the NDA. Elan shall consult with Watson
when reviewing whether or not to perform a recall of Product and if so, the
extent and method of such recall in the Territory.

 

  4.1.2. In the event of any recall of the Product, as suggested or requested by
any governmental authority:

 

  4.1.2.1 Watson shall perform the recall of the Product in the Territory.

 

  4.1.2.2 If the recall arises from Watson’s acts or omissions in the packaging
(where applicable), or the transportation, storage, distribution, marketing or
sale of the Product, the recall costs shall be borne by Watson.

 

  4.1.2.3 If the recall arises from Elan’s acts or omissions in the
manufacturing and packaging of the Product, the recall costs shall be borne by
Elan. In such event, Elan shall be entitled but not obliged to take over and
perform the recall of the Product and Watson shall provide Elan at no cost with
all such reasonable assistance as may be required by Elan.

 

  4.1.2.4 If the recall arises from any other reason than set out above, the
recall costs shall be borne by Elan and Watson in proportion to the percentage
of Profit allocated to the Parties from such Product.

 

  4.1.3. Watson and Elan shall each maintain in force, during the Term, products
liability insurance coverage in minimum amounts of $10,000,000 and, upon
request, each Party shall furnish to the other a Certificate of Insurance;
provided, however to so request such Certificate shall not be deemed a waiver to
the Party’s obligations hereunder.

 

  4.1.4. Any recall of Product will be agreed upon by both Parties. The
Regulatory Filing holder will be responsible for initiating and ensuring that
all aspects of a drug recall are carried out by the agreed upon Party, including
communicating with the FDA, notifying customers, performing the recall
effectiveness check, and submitting monthly reports. Both Parties will
co-operate fully in recalling any Product.

 

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5 MEETINGS

 

  5.1. Representatives from Watson and Elan shall meet on an as needed basis or
the occurrence of certain eventualities including, but not limited to:

 

  5.1.1. a “serious adverse event(s)” involving actual or threatening
litigation, or

 

  5.1.2. significant modifications to the package insert.

 

  5.2. Upon reasonable prior written notice and during normal business hours
representatives from Elan may meet with Watson to annually assess Watson’s
Product complaint handling system. On site assessment will consist of an
examination of applicable portions of Watson’s Product complaint/adverse event
handling procedures pertaining to the Product and to Watson’s responsibilities
as per this agreement.

 

6 MISCELLANEOUS PROVISIONS

 

  6.1. Except as modified herein, all of the covenants, terms and conditions of
the Principal Agreement remain in full force and effect and are hereby gratified
and reaffirmed in all respects. In the event of any conflicts, inconsistency or
incongruity between the terms and conditions of this Supplemental Agreement and
the covenants, terms and conditions of the Principal Agreement, the terms and
conditions of this Supplemental Agreement shall govern and control.

 

  6.2. This Supplemental Agreement may be executed in two or more counterparts,
each of which together shall contribute an original an original but which, when
taken together, shall constitute but one instrument and shall become effective
when copies hereof, when taken together, bear the signature of all required
parties and persons.

In Witness Whereof this Supplement Agreement is executed as of the date of the
last Party to sign below.

 

ELAN CORPORATION, PLC     WATSON LABORATORIES, INC. BY:  

/s/ Paul Breen

    BY:  

/s/ Gordon Munro

NAME:  

Paul Breen

    NAME:  

Gordon Munro

TITLE:  

Executive Vice President

    TITLE:  

Senior VP of [Illegible]

DATE:  

8/12/2004

    DATE:  

11/18/2004

 

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