Exhibit 10.24

 

CONFIDENTIAL TREATMENT REQUESTED:

 

Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.  Such redacted portions
have been replaced with “{***}” in this Exhibit.  An unredacted version of this
document has been filed separately with the Securities and Exchange Commission
along with the request for confidential treatment.

 

12th August, 2004

 

Stephen Jones
Lifehealth Limited
23 Winkfield Road
Windsor
Berkshire
SL4 4BA

 

Dear Stephen

 

Cambridge Ireland

 

Thank you for your letter of 9th August. We appreciate your concerns. We will
ensure, and shall put systems in place to ensure, that where the new group
structure of Cambridge results in duplication of costs or incremental costs, the
additional costs, over and above what would have been taken into account in the
calculation of the {***}† had Cambridge not changed its structure, shall not be
taken into account in that calculation of the {***}† under the contract.

 

On the question of the currency, the exchange rate issue from the US sales will
be no different to what it is now. Cambridge Ireland (CLI) will be paid in $US
the same way Cambridge Laboratories (CLUK) is now. Clause 6.7 regarding times
and rates of conversions to Sterling will continue to apply.

 

With regard to legal costs Allistair is keeping all costs relating to the
restructuring entirely separate from general tetrabenazine related costs so
there is no possibility of overlap. There won’t be many other instances where
legal costs would be incurred in relation to a tetrabenazine related matters
that wouldn’t have been incurred in the normal way.

 

As the details of this arrangement are now set out in four different letters I
think you will agree it is in both our interests to record everything in one
document that we can both sign.

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

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Overall Structure

 

We are moving certain operations to Ireland to avail ourselves of some of the
tax advantages available in Ireland. With regard to tetrabenazine this means
procurement, sales and dossier development work will be moved to CLI.

 

All the distribution agreements for tetrabenazine currently in the name of CLUK
will be assigned to CLI and CLI will assume all those obligations. All future
distribution agreements for tetrabenazine will be entered into by CLI. CLI will
take over the obligations of CLUK under the agreements for the manufacture of
tetrabenazine. CLI will also enter into an agreement for distribution of certain
products in the UK, including tetrabenazine, with CLUK. CLI will enter into a
services agreement with CLUK pursuant to which CLUK will provide certain
services to CLI including pharmacovigilance, medical information and scientific
services.

 

Agreements for Assignment

 

With regard to tetrabenazine, you have agreed to the assignment of the following
agreements from CLUK to CLI:

 

1.                                       The original license agreements between
CLUK and Lifehealth of 1995 and 1998 and all amendments, alterations and side
letters.

2.                                       The Synkem, Pharmaserve and Boots
manufacturing agreements and all amendments, side letters, alterations and
technical agreements. Please note that the new manufacturing agreement to
replace the one with Boots will be in the name of CLI.

3.                                       All tetrabenazine distribution
agreements and letters of appointment currently in force and all amendments,
alterations and side letters. This means our agreements and arrangements with
AOP, AFT, Orphan Australia, Medifront, Medilink, Megapharm, OPI, Celltech Spain,
Prestwick (both the US agreement and the Canadian), Paesel Lorei, Fagron and
Chiesi. Please note that future distribution agreements will be in the name of
CLI.

 

Calculation of {***}†

 

With the exception of sales in the UK, all revenue will be earned by CLI in the
same way it is now earned by CLUK.

 

CLI will obviously also be incurring a number of the costs that are deductible
in the calculation of the {***}† However, CLUK will also be incurring some of
those costs. As agreed we will ensure, and shall put systems in place to ensure,
that where the new group structure of Cambridge results in duplication of costs
or incremental costs, the additional costs, over and above what would have been
taken into account in the calculation of the {***}† had Cambridge not changed
its structure, shall not be taken into account in that calculation of the {***}†
under the contract.

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

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Running through the deductibles set out in the definition:

 

{***}†

 

Sales in the UK

 

CLUK will continue to be responsible for UK sales and sales of the existing UK
stock whether in the UK or elsewhere.

 

In respect of the UK sales and any other sales of the existing UK stock the
figure used for calculations will be the revenue earned by CLUK, not CLI. We
will of course not be double accounting in respect of the UK sales so you will
not be {***}† of both CLI and CLUK arising from UK sales and other sales of the
existing UK stock.

 

The costs of the existing UK stock will be a CLUK cost that will be accounted
for in the usual way. Once that stock has run out CLI will be incurring the cost
of goods and that cost will be accounted for in the usual way.

 

You will obviously see and have the right to comment on the distribution
agreement that will be put in place between CLI and CLUK.

 

Accounting to you

 

We will provide you with a group reconciliation statement concerning {***}† that
reflects the above. That statement will set out how much you have to invoice to
both CLI and CLUK. You will receive payments from both CLUK and CLI.

 

Consent

 

Could you please, on behalf of Lifehealth Limited, indicate Lifehealth’s consent
to these assignments taking place, the sub-distribution agreement between CLI
and CLUK and the amendment to the agreement reflecting the new accounting
arrangements by signing this letter in the space provided and returning it to
me.

 

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† Represents material which has been redacted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

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Many thanks and very best wishes.

 

Yours sincerely

 

/s/ MARK EVANS

 

 

Mark Evans

 

Chief Executive Officer

 

 

 

Signed by

 

/s/ STEPHEN JONES

 

 

Stephen Jones

 

Director

 

Lifehealth Limited

 

 

Dated:   15 / 8 / 04

 

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