**Exhibit 10.20****TERMINATION AND SETTLEMENT AGREEMENT**     This Termination and Settlement Agreement is entered into this 7th day of October,2004 (“Effective Date”) between Allergan Sales, LLC (“Allergan”) and Peplin OperationsPty Ltd. (“Peplin”) and their guarantors, Allergan, Inc., and Peplin Ltd. (formerly,Peplin Biotech Ltd.) (hereinafter referred to as “Agreement”).**RECITALS**     WHEREAS,Peplin previously granted to Allergan a license to the Compound and Improvements in the Field in the Territory (as those terms are defined below), ontheterms of a Collaboration and License Agreement between the Parties dated November22,2002 (“C&L Agreement”).     WHEREAS,ALLERGAN previously desired to amend, and Peplin previouslyagreed to the amendment of, the C&L Agreement on the terms of the First Amendment toCollaboration and License Agreement dated May 26, 2004(“Amendment Agreement”).     WHEREAS the Parties wish to terminate the C&L Agreement, as amended by the AmendmentAgreement, on the terms of this Agreement.     NOW THEREFORE, the Parties agree as follows:1. For purposes of this Agreement, the following terms shall have the meaningsspecified below:**“Affiliate”**means, in the case of either Party, a corporation or other entitywhich, directly or indirectly, controls, is controlled by or is under commoncontrol with, that Party. A corporation or other entity shall be regarded as incontrol of another corporation or entity if it owns or directly or indirectlycontrols 50% (fifty percent) or more of the voting stock or other ownershipinterest of the other corporation or entity, or if it possesses, directly orindirectly, the power to direct or cause the direction of the management and policies of thecorporation or other entity.**“Compound”**means PEP005, and any other compounds deemed to be aCompound in accordance with the terms of the C&L Agreement.**“Confidential Information”**means all information, inventions, trade secrets,know-how, and data, whether or not in a material form, relating to this Agreementand/or the subject matter of this Agreement disclosed by one Party to the otherParty.**“Control”**means the ability, whether by ownership or license, to grant a licenseor sublicense as provided for herein without violating the terms of any agreementor other right of any Third Party.**“FDA”**means the U.S. Food and Drug Administration or any successor entity thereto.Page 1 of 12
 

 
**“Field”**means (i) Topical Applications of the Compound or Improvements for any Skin andEye Conditions; and (ii) Intralesional Applications of the Compound for Skin and EyeConditions made solely through direct sales to dermatologists and plastic surgeons, andsuch other physicians as may be mutually agreed by the Parties in writing from time totime.**“Improvement”**means a compound which is an Ingenane Compound or substituted IngenaneCompound and which has potential use in the Field or any new formulation orisomer thereof.**“IND”**means an Investigational New Drug application as defined in the U.S. Food, Drug andCosmetic Act, as it may be amended from time to time, and the regulations promulgatedthereunder, or as the context requires, any corresponding application in a country otherthan the USA.**“Ingenane Compound”**means any compound containing the ingenol skeleton, “ingenol” beingthe compound having the chemical name 1 a, 2,5,5a,6,9, 10,10a, Octahydro-5, 5a,6-trihydroxy4 (hydroxymethyl) 1,1,7,9, tetramethyl 1 H-2, 8amethanocyclopenta[a]clopropa[e] cyclodecen-11 one, and the empirical formulaC20H28O5.**“IntellectualProperty Rights”**means all copyright trade mark, design, patent(including, without limitation, the Peplin Patent Rights), semi-conductor and/or circuitlayout rights; trade, business, company and/or domain names; any right to haveconfidential information kept confidential (including, without limitation, the PeplinKnow-How); other proprietary rights; and/or any rights to registration of such rightsexisting anywhere in the world, whether created before, on or after the date of thisAgreement relating to the Compound, an Improvement (irrespective of whether it haspotential use in the Field), the Product and/or any Oral Formulation, including, withoutlimitation, any potential uses thereof.**“Intralesional Application”**means the treatment of a lesion by direct injection of theCompound into the lesion.**“Oral Formulation”**means a formulation of the Compound or Improvement that is deliveredby the mouth and absorbed systemically by the gut.**“Party”** means Peplin or Allergan and/or their respective Affiliates as the context requires and“Parties” means, collectively, Peplin and Allergan and/or their respective Affiliates.**“Patent Rights”**means issued patents and pending patent applications (whether provisional orotherwise) in the United States of America or any countries in the Territory that cover themanufacture, use, sale, offer for sale and/or importation of the Compound and/or Improvementsin the Field, and any applications and/or patents claiming priority to said patents orapplications, including all divisions, continuations, reissues, reexaminations, continuationsin part, continued prosecution applications (“CPA”), requests for continued examination(“RCE”), extensions and substitutions thereof, and any applications filed under the PatentCooperation Treaty. A current list of Patent Rights, as at the date of the C&L Agreement, isattached as Exhibit A to the C&L Agreement.Page 2 of 12
 

 
**“PEP005”**means the compound originally isolated from the *Euphorbia peplos*plant, andhaving the chemical name angeloyl 3-ingenol or ingenol 3-angelate and the empiricalformulaC25H34O6, current specifications for which are attached as Exhibit B to the C&LAgreement.**“Peplin Know-How”**means proprietary techniques and data within the Field, includinginventions, practices, methods, knowledge, know-how, assays, compositions of matter,test data (including pharmacological, toxicological and clinical test data), analyticaland quality control data, manufacturing data and descriptions, which (i) Peplindiscloses to Allergan under this Agreement and (ii) is within the Control of Peplin.Notwithstanding anything herein to the contrary, Peplin Know-How shall exclude PeplinPatent Rights.**“PeplinPatent Rights”**means the Patent Rights Controlled byPeplin.**“PhaseIA Clinical Trials”** means the clinical trial the subject of IND 70114 forthe use of topical PEP005 for the treatment of actinic keratosis filed by Allerganin June 2004.**“Product”**means pharmaceutical formulations containing the Compound or anImprovement.**“Regulatory Approval”**means any approval, license, registration or authorization of anysupra-national, federal, state or local regulatory agency or government authoritynecessary for the manufacture, use, storage, import, export, transport or sale of aProduct in a regulatory jurisdiction, including where applicable, pricing approval.**“RegulatoryFilings”**includes, without limitation, IND’s, Regulatory Approvals and/or alldocuments relating, either directly or indirectly, thereto;**“Skin and Eye Conditions”**means diseases or conditions of the human skinincluding epidermis and dermis, and diseases or conditions of the human eye,respectively.**“Territory”**means the United States of America, Canada, Mexico, Central America and South America,including the countries of Antigua and Barbuda, the Bahamas, Barbados, Belize, Costa Rica, Cuba,Dominica, Dominican Republic, El Salvador, Greenland, Grenada, Guatemala, Haiti, Honduras, Iceland,Jamaica, Nicaragua, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines,Trinidad and Tobago, Bolivia, Brazil, Chile, Columbia, Ecuador, French Guiana, Guyana, Paraguay,Peru, Suriname, Uruguay, and Venezuela.**“Third Party”**means any entity other than Peplin and Allergan.**“Topical Application”**means the treatment of disease by delivery in a topicaldosage form to the outer surface of the diseased area for dermatologic andophthalmic administration.     2. Notwithstanding anything to the contrary in Section 11 of the C&L Agreement,subject to the terms of this Agreement, the Parties agree to terminate the C&L Agreement, asamended by the Amendment Agreement, as and from the EffectivePage 3 of 12
 

 
Date, except for Section 8 of the C&L Agreement and/or any non-expired nondisclosureagreement entered into between the Parties, which shall survive termination of the C&LAgreement.     3. Allergan agrees to pay to Peplin One Million Two Hundred and Eighty Nine Thousand SixHundred and Fifty Seven U.S. Dollars (U.S. $1,289,657) on the Effective Date in full paymentof all monies due to Peplin under the C&L Agreement. Such payment shall be nonrefundable andnoncreditable.     4. Allergan will, consistent with accepted and efficient business practices and legalrequirements relating to pharmaceutical drug development, complete, as soon as practicable butnot more than ninety (90) days from the Effective Date, monitoring at Allergan’s expense andpromptly providing Peplin or its designee as it becomes available with the case reportforms, any adverse event reports and all other relevant data and information (including,without limitation, randomization codes) concerning the Phase IA Clinical Trials for theProduct. Allergan will provide, if practicable, prototype database forms relevant to thestudy, and will provide reasonable non-monetary assistance to Peplin in its discussions of thePhase IA Clinical Trials for the Product with the FDA, including, without limitation,attendance at FDA meetings. Reasonable travel costs incurred by Allergan in attending suchmeetings will be met by Peplin.     5. Notwithstanding Sections 2.7 and 7.1 of the C&L Agreement, Peplin shallhave all right, title and interest (including all Intellectual Property Rights) in and toall ofthe Parties’ respective inventions, discoveries, methods and/or processes conceived orreduced to practice by Peplin, Allergan and/or the Parties jointly and all associatedRegulatory Filings arising out of, either directly or indirectly, the C&L Agreement (asamended by the Amendment Agreement) and/or this Agreement relating to theCompound, any Improvement (irrespective of whether it has potential use in the Field),the Product and/or any Oral Formulation, including, without limitation, any potentialusesthereof.     6. Subject to Allergan’s statutory requirements for record keeping (where records are requiredto be maintained, copies are to be provided to Peplin) and to the extent Allergan has informationor materials available (providing Allergan uses its reasonable endeavours to locate suchinformation and/or materials), and without limiting Section 8.6 of the C&L Agreement, which shallsurvive termination of the C&L Agreement under Section 2 of this Agreement, Allergan must deliverup to Peplin all Compounds, Improvements (irrespective of whether it has potential use in theField), Products and Oral Formulations and all associated Regulatory Filings arising out of, eitherdirectly or indirectly, the C&L Agreement (as amended by the Amendment Agreement) and/or thisAgreement in its possession or under its control on or before the Effective Date. Without limitingthe generality of the foregoing, Allergan agrees to transfer the current IND’s for PEP005 to Peplinor its designee, to hand over to Peplin all original hard copies of reports and copies of documentsstored on its information management system (including validation reports), original certificatesof analysis and batch records, to transfer to Peplin or its designee all of Allergan’s data andinformationPage 4 of 12
 

 
regarding its planned Phase I-B Study in Australia (including any applications to theTherapeutic Goods Administration or institutional ethics committees), to provide to Peplin orits designee any PEP005 (AGN 204332) it may have both formulated and active pharmaceuticalingredient and, if Product has been destroyed prior to the Effective Date, to provide toPeplin or its designee the corresponding certificates of destruction on or before theEffective Date.     7. Subject always to Peplin’s rights to exploit the rights vested in it underSection 5 of this Agreement, the Parties agree that a Party receiving any ConfidentialInformation (“Receiving Party”) of the other Party(“Disclosing Party”) shall (a) maintainin confidence such Confidential Information to the same degree of care such Partymaintains its own valuable confidential information, but not lessthan a reasonable degree of care; (b) not disclose such Confidential Information to anyone other than regulatoryauthorities in the course of seeking Regulatory Approvals and any of the ReceivingParty’s employees or consultants or contractors or Third Parties involved in thedevelopment, manufacture and/or distribution of the Product who need to know suchConfidential Information to permit such Receiving Party to practice its rights under thisAgreement and who have agreed to substantially similar obligations concerning suchConfidential Information as those set forth herein, or as otherwise required by law; (c)not use such Confidential Information for any purpose except those expressly permitted by thisAgreement; and (d) take reasonable steps to prevent unauthorized use or disclosure of suchConfidential Information.     8. Subject always to Peplin’s rights to exploit the rights vested in it underSection 5 of this Agreement, in the event either Party is requested or is required bydeposition, interrogatories, requests for information, documents or admissions,subpoenas, civil investigative demands or similar process, to disclose or provide anyConfidential Information, the Parties shall promptly meet to discuss how best to respondand, for example, whether to seek an appropriate protective order or confidentialtreatment or otherwise prevent such disclosure.     9. Subject always to Peplin’s rights to exploit the rights vested in it underSection 5 of this Agreement, obligations under this Agreement with respect toConfidential Information shall only cease where such information canbe shown by written evidence that it: (a) has become generally known in the pharmaceutical industry or by the publicat large at the time of or after disclosure by the Disclosing Party,other than through breach ofthis Agreement by the Receiving Party; (b) was in the possession of the Receiving Party, withoutany obligation of confidentiality, immediately prior to the time of disclosure by the DisclosingParty, and the Receiving Party did not come to be in such possession through disclosure from theDisclosing Party or any of the Disclosing Party’s Affiliates or sublicensees; or (c) wasindependently developed by employees or agents of the Receiving Party without knowledge of, accessto, or use of any Confidential Information of the Disclosing Party.Page 5 of 12
 

 
     10. Subject always to Peplin’s rights to exploit the rights vested in it underSection 5 of this Agreement, in the event of termination of thisAgreement, at any timethereafter upon the request of the Disclosing Party, the Receiving Party shall promptly returnto the Disclosing Party or destroy (at the Disclosing Party’s option) the Disclosing Party’sConfidential Information responsive to such request, including all copies thereof and inwhatever form, except that the Receiving Party may retain one copy of the ConfidentialInformation to be used solely to determine the scope of the ReceivingParty’s obligations underthis Agreement. The return and/or destruction of such Confidential Information as providedabove shall not relieve the Receiving Party of its other obligations under this Agreement.     11. The Parties agree to issue press releases concerning the termination of the C&LAgreement, attached hereto as Exhibit A.     12. Allergan agrees to provide reasonable non-monetary assistance to Peplin in itsre-licensing efforts, including, without limitation, identifying potential candidates andproviding contact information and introductions.     13. Peplin agrees to provide Allergan with a three (3) month non-exclusive right ofnegotiation for future rights in PEP005, if Peplin has not licensed PEP005 to a ThirdParty by January 1, 2006. If no license has been executed within the three (3) monthperiod, the right of negotiation will expire.     14. Peplin agrees to pay to Allergan the following: A. twenty-five percent (25%) of all pre-commercialisation payments in the nature of upfront, milestone, full time equivalent or similar payments but excluding reimbursements ofcosts, contributions to help defray the costs of specific works, sales taxes, VAT taxesand other taxes) received by Peplin or a Peplin Affiliate in exchange for licensing orother transfer of rights in the Topical Application of PEP005 for any Skin and EyeCondition up to a maximum amount of Three Million U.S. Dollars ($3,000,000); and  B. twenty-five percent (25%) of all post-commercialisation payments in the nature ofroyalties, sales milestone payments and the like (but excluding reimbursements of costs,contributions to help defray the costs of specific works, sales taxes, VAT taxes and othertaxes) received by Peplin or a Peplin Affiliate in exchange for licensing or othertransfer of rights in the Topical Application of PEP005 for any Skin and Eye Condition inthe Territory (royalties shall be deemed to include that portion of transfer price ofmaterials provided by Peplin that exceeds Peplin’s costs for such materials) up to amaximum amount, which amount shall include any amounts paid under Section 15 (A) of thisAgreement, of Four Million U.S. Dollars ($4,000,000); and
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 C. ten percent (10%) of net sales of Product made by Peplin or an Affiliate of Peplin forthe Topical Application of PEP005 for any Skin and Eye Condition in the Territory up to amaximum amount, which amount shall include any amounts paid under Section 15(A) and/or15(B) of this Agreement, of Four Million U.S. Dollars ($4,000,000); and  D. Total payments to Allergan under Sections 15 (A) to 15(C), inclusive, of thisAgreement shall not exceed, in the aggregate, Four Million U.S. Dollars ($4,000,000).15. A. Each of the Parties acknowledges that the other Party has carried outall of the terms and conditions of the C&L Agreement and that neither Party is in breachof the C&L Agreement.  B. Allergan and its Affiliates for themselves and their agents, successorsand assigns, do hereby forever release and discharge Peplin, its Affiliates and anyof their past or present agents, employees, officers, directors, attorneys andsupplies from any causes of action, losses, damages, costs, expenses, liabilitiesand/or demands of whatsoever character, nature and kind, known or unknown,suspected or unsuspected, fixed or contingent, arising out of or in any way relatedto the C&L Agreement.  C. Peplin and its Affiliates for themselves and their agents, successorsand assigns, do hereby forever release and discharge Allergan, its Affiliates andany of their past or present agents, employees,  officers, directors, attorneysand supplies from any causes of action, losses, damages, costs, expenses,liabilities and/or demands of whatsoever character, nature and kind, known orunknown suspected or unsuspected, fixed or contingent, arising out of or in any wayrelated to the C&L Agreement.  D. Waiver of Section 1542 of the California Civil Code and Similar Statues. TheParties specifically understand, acknowledge and agree that this is a full and final release,which shall be effective as a bar to all actions, claims, counterclaims, obligations, causesof action, losses, damages, costs, expenses, liabilities and demands of whatsoever character,nature and kind, known or unknown, suspected and unsuspected, fixed and contingent,hereinabove specified to be so barred. The Parties having been fully advised by theirrespective counsel, hereby expressly and voluntarily waive all rights or benefits that theyand each of them might otherwise have under the provisions of §1542 of the Civil Code of theState of California, and under all federal, sate and/or common law statutes
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   or principles of similar effect. The parties recognize that §1542 ofthe Civil Code of the State of California reads as follows:    “A general release does not extend to claims which the creditor doesnot know or suspect to exist in his favor at the time of executing therelease, which if known by him must have materially affected hissettlement with the debtor.”     16. Miscellaneous.     16.1 Assignment. This Agreement may not be assigned or otherwise transferredby either Party without the prior written consent of the other Party, which consent shall notbe unreasonably withheld or delayed; provided, however, that each of the Parties may, withoutsuch consent, assign this Agreement and its rights and obligations hereunder to itsAffiliates or in connection with the transfer or sale of all or substantially all of itsbusiness, or in the event of its merger or consolidation or change in control or similartransaction (which shall be deemed an assignment). Notwithstanding the foregoing, Allergancan sell, transfer or assign its rights under this Agreement to any Third Party as part of asale of substantially all of its assets related to its dermatology business. Any purportedassignment in violation of the preceding sentences shall be void. Any permitted assigneeshall assume all obligations of its assignor under this Agreement in writing.     16.2 Severability. Each Party hereby agrees that it does not intend to violate anypublic policy, statutory or common laws, rules, regulations, treaty or decision of any governmentagency or executive body thereof of any country or community or associate of countries. Should oneor more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, bymutual consent, valid provisions for such invalid  provisions which valid provisions in theireconomic effect are sufficiently similar to the invalid provisions that it can be reasonablyassumed that the Parties would have entered into this Agreement with such valid provisions. In casesuch valid provisions cannot be agreed upon, the invalidity of one or several provisions of thisAgreement shall not affect the validity of this Agreement as a whole, unless the invalid provisionsare of such essential importance to this Agreement that it is to be reasonably assumed that theParties would not have entered into this Agreement without the invalid provisions. Allergan andPeplin acknowledge and agree that each provision of this Agreement is material to their respectivedecisions to enter into this Agreement. Allergan and Peplin further acknowledge and agree thatneither of them would have entered into this Agreement in the absence of any of its provisions.     16.3 Notices. Any consent, notice or report required or permitted to be given ormade under this Agreement by one of the Parties hereto to the othershall be in writing,delivered personally or by facsimile (and promptly confirmed by personal delivery orcourier) or international courier, addressed to such other Party at its address indicatedbelow, or to such other address as the addressee shall have last furnished in writing to the
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addressor and shall be effective upon the earlier of receipt by the addressee or thesecond business day after dispatch by recognized international courier.     If to Peplin: Peplin Operations Pty Ltd.    Level 2    1 Breakfast Creek Road    Newstead, Brisbane    Australia    Attention: Company Secretary    Tel: 61 7 3250 1200    Fax: 61 7 3250 1299       With a copy to: Peplin Ltd.    Level 2    1 Breakfast Creek Road    Newstead, Brisbane    Australia    Attention: Managing Director    Tel: 61 7 3250 1200    Fax: 61 7 3250 1299       If to Allergan: Allergan, Inc.    2525 Dupont Drive    Irvine, California 92612    Attention: Corporate VP Business Development    Tel: (714) 246-6837    Fax: (714) 246-2228       With a copy to: Allergan, Inc.    2525 Dupont Drive    Irvine, California 92612    Attention: General Counsel    Tel: (714) 246-4535    Fax: (714) 246-6987       16.4 Applicable Law. This Agreement shall be governed by and construed inaccordance with the laws of the State of California, United States, without reference to itsconflict of laws, rules and in connection with any dispute hereunder, subject to Section 16.5below, the Parties consent to exclusive jurisdiction and venue in the state and federal courts inOrange County, California, United States.     16.5 Dispute Resolution. Except with respect to matters pertaining toinjunctive relief, in the event of any dispute, the Parties shall refer such dispute to theChief Executive Officers of Peplin and Allergan (or their respective executive officer
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level designees) for attempted resolution by good faith negotiations within thirty (30) daysafter such referral is made. During such period of good faith negotiations, any applicable timeperiods under this Agreement shall be suspended. In the event such executives are unable to resolvesuch dispute within such thirty (30) day period, the parties shall submit this dispute to bindingarbitration before a single arbitrator in Orange County, California, such arbitration to beconducted pursuant to the American Arbitration Association rules for commercial disputes then ineffect. The arbitrator may permit limited discovery as he or she deems appropriate in thecircumstances of the dispute. The arbitrator shall have no power to include an award of attorneys’fees and costs to the prevailing party, or to award punitive,special, incidental or consequential damages.     16.6 Entire Agreement. This Agreement contains the entire understanding ofthe Parties with respect to the subject matter hereof. All express or implied agreementsand understandings, either oral or written, heretofore made are expressly merged in andmade a part of this Agreement. This Agreement may be amended, or in any term hereofmodified, only by a written instrument duly executed by both Parties hereto.     16.7 No license or right is hereby granted by implication or otherwise, withrespect to any Intellectual Property Rights and the Parties hereby agree that under nocircumstances may a court find or hold the existence of any such implied license.     16.8 Each Party must do all things and execute all further documents necessaryto give full effect to this Agreement and refrain from doing anything that might hinderthe performance of this Agreement.
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     IN WITNESS WHEREOF, the Parties have by their duly authorizedrepresentatives hereunto set their hands the day and year first above written.           ALLERGAN SALES, LLC   PEPLIN OPERATIONS PTY LTD.             By: /s/ Jeffrey L. Edwards    By: /s/ Michael Aldridge              Name: Jeffrey L. Edwards   Name: Michael Aldridge             Title: Vice President   Title: Director             Date: October 7, 2004   Date: 7 October 2004  **AGREED TO:**           ALLERGAN, INC.   PEPLIN LTD.             By: /s/ Jeffrey L. Edwards    By: /s/ Michael Aldridge              Name: Jeffrey L. Edwards   Name: Michael Aldridge             Title: Vice President   Title: ManagingDirector & CEO             Date: October 7, 2004   Date: 7 October, 2004  
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