Exhibit 10.5 




Confidential portions of this
document have been omitted and filed separately with the Commission. The omitted portions
have been marked as follows: “***”. 



 This License and Manufacturing
  Agreement is made the 13th day of March 2000 (the “Effective Date”)
  
BETWEEN: 



BIOGLAN PHARMA PLC, of 5,
  Hunting Gate, Hitchin, Hertfordshire, SG4 0TJ (hereinafter referred to, together
  with its Associated Companies, as “BIOGLAN”); and 



JAGOTEC AG having a place of business
at Eptingerstrasse 51, CH-4132 Muttenz, Switzerland (hereinafter referred to, together
with its Associated Companies, as “JAGO”). 





INTRODUCTION 

	   	
A.  	JAGO
has certain marketing authorisations for the Product (as such term is           defined
herein) granted by various European countries including The United           Kingdom,
France, Germany, Italy and Sweden; and  






	   	
B.  	JAGO
has the right to grant licenses with respect to the Product  






	   	
C.  	BIOGLAN
has experience and expertise in the manufacture, distribution and sale           of
certain pharmaceutical products in accordance with Good Manufacturing           Practice.  






	   	
D.  	JAGO
wishes to grant BIOGLAN an exclusive license to Manufacture, distribute and
          sell the Product and BIOGLAN wishes to accept such license in accordance with
          the terms and conditions of this Agreement.  






OPERATIVE PARTS 



	1. 	Definitions
      






        1.1
In this Agreement and the recitals and schedule the following words and expressions shall
have the meanings set opposite them:  



       “Active
Ingredient” means diclofenac. 



        “Agency” means
the body responsible for the licensing of the Product for commercial marketing and sales
of the Product in the Territory and/or the licensing of premises and equipment and
facilities of BIOGLAN for the Manufacture of the Product.  



        “Associated
  Companies” means any entity that directly or indirectly owns, is owned
  by or is under common ownership, where own or ownership means direct or indirect
  possession of at least fifty percent (50%) of the outstanding voting securities
  of a corporation or a comparable equity interest in any other type of entity.
  



        “Condition
Precedent” means the condition that prior to JAGO entering into this Agreement
BIOGLAN shall have evidenced in a form acceptable to JAGO that it has withdrawn from all
matters relating to or connected with JAGO’s acquisition from the receiver of all
assets of Hyal Pharmaceutical Corporation and further that BIOGLAN warrants and
represents that it will not seek to reinstate or re-activate any actions brought against
JAGO or any of its subsidiaries in relation to this matter whatsoever.  




 
	 	
	 



 













        “Confidential
  Information” means all information and data provided by the parties to
  each other in written or other tangible medium and which is by its nature and
  type reasonably to be regarded as confidential but shall not include any portion
  thereof which: 



	   	
i)  	is
known to the receiving party as evidenced by the receiving party’s           written
records, before receipt thereof under this Agreement;  






	   	
ii)  	is
disclosed to the receiving party by a third person who is under no obligation
          of confidentiality to the disclosing party hereunder with respect to such
          information and who otherwise has a right to make such disclosure;  






	   	
iii)  	is
or becomes generally known in the trade through no fault of the receiving
          party;  






	   	
iv)  	is independently
      developed by the receiving party as evidenced by the receiving party’s
      written records, without access to such information. 






        “Field
of Use” means the use of the Product for ***.  



        “Good
Manufacturing Practice” means the standards of manufacturing practice for the
manufacture of medicinal products prevailing, which shall at least comply with the
principles and guidelines of good manufacturing practice for medicinal products for human
use published from time to time by the European Commission pursuant to Council Directive
91/356 and the like principles and guidelines published by the World Health Organisation.  



        “Intellectual
  Property” and “Intellectual Property Rights” means the trade
  marks, Patent Rights and any registered design or similar protection, a right
  of ownership of, or a right under license or otherwise to, any patent, trade
  or service mark, trade name, registered design, Confidential Information, know-how,
  trade secret, copyright, design right, or other intellectual property right
  or right of a like nature as now or may hereafter be conferred by the laws in
  force throughout the world whether registered or unregistered including without
  limitation all rights in methods, techniques, discoveries, formulae, specifications,
  plans, drawings, computer programs, technical information, data and materials
  which are in existence at the Effective Date and are the property of JAGO. 



        “Manufacture” means
any process carried out in the course of making the Product and includes the production
of the Product in accordance with the Specification from the Active Ingredient and shall
include blending, assembly, packaging, analysis, testing stability studies and quality
control and “Manufactured”, and “Manufacturer” shall be interpreted
accordingly.  



        “Manufacturing
  Records” means all documentation associated with Manufacture of the Product,
  including, without limitation, all information regarding analysis, testing supply
  and Manufacture. 



        “Net
Sales” means gross sales from the sale of the Product less all commissions,
discounts, refunds, replacements or credits allowed to purchasers for return of such
Products or as reimbursement for damaged products, freight postage, insurance, and other
shipping charges, sales and use taxes, customs duties and any other governmental tax or
charge, (except income tax) imposed on or at the time of the production, importation use
or sales of such Products.  



        “Patent
Rights” means  



	   	
(i)  	the
patents and patent applications listed in the Schedule to this Agreement;  






	   	
(ii)  	all
patent applications that may hereafter be filed in the  







 
	 	
2	 



 












	  	
Territory
by or on behalf of JAGO which either are based on or claim priority from any of the
foregoing patents and applications or which are in respect of any improvements to which
either party is exclusively entitled; and  


                  



	   	
(iii)  	all
patents which may be granted pursuant to any of the foregoing patent
          applications  







        “Process
  Improvements” means all improvements, modifications or adaptations to the
  process, or method of Manufacture used by BIOGLAN and are solely and specifically
  related to the Manufacture of the Product which arise in association with the
  processes of Manufacture of the Product. 



        “Product” means
the *** comprising up to *** and up to ***.  



        “Specifications” means
requirements and specifications for the Manufacture of Product and all amendments to
those requirements and specifications.  



        “Technical
  Information” means all registration data, know-how, experience, instructions,
  standards, methods, analysis record, test and trial results, manufacturing and
  formulation processes, hazard assessments, quality control standards, formulae,
  specifications, storage and data, samples, drawings, designs, description of
  packaging materials and all other relevant information relating to the Product
  or its design, Manufacture, formulation, composition, purity handing, storage
  and use. 



        “Territory” means
the United Kingdom, France, Germany, Italy, Spain, Sweden, Norway, Denmark and Iceland,
Finland, The Netherlands, Belgium, Luxembourg, Republic of Ireland, Austria, Portugal,
Switzerland and Greece.  



        1.2
  In this agreement and the recitals and the schedule: 



	   	
(a)  	reference
to any statute or statutory provision includes a reference to that           statute or
statutory provision as amended, extended or re-enacted and to any           regulation,
order, instrument or subordinate legislation under the relevant           statute or
statutory provision;  






	   	
(b)  	reference
to any singular includes a reference to the plural and vice versa;  






	   	
(c)  	references
to persons include bodies corporate, unincorporated associations and
          partnerships and any reference to any party who is an individual is also deemed
          to include their respective legal personal representative(s);  






	2.  	License  






2.1 Subject to the Condition
Precedent and the terms and conditions hereof JAGO hereby grants to BIOGLAN and BIOGLAN
accepts from JAGO an exclusive right and license to use the Intellectual Property and the
Technical Information to Manufacture (or procure the Manufacture) distribute and sell the
Product for the Field of Use in the Territory. 



2.2 In the event that BIOGLAN obtains
from the necessary regulatory authorities in the 




 
	 	
3	 



 













Territory approval for further
indications of use for the Product, then the licensed Field of Use shall be so extended to
include such indications. 



2.3 JAGO also grants BIOGLAN
  the exclusive right to extend the Territory to include any countries which may
  during the term of this Agreement join the European Union. Such right is subject
  to a) BIOGLAN’s obtaining all necessary Product and marketing approvals
  in each additional country; and b) the payment to JAGO of *** for each
  new country approval. 



2.4 BIOGLAN shall be entitled
  to grant sublicences on the condition that BIOGLAN shall remain responsible
  to JAGO for ensuring that such sublicences fully comply with Clauses 4.2, 5.4.5,
  5.8, 8.1, 8.2, 9.1, 10.1, 11, 14.4 and 19.3 of this Agreement and that any such
  sublicenses so granted shall terminate immediately on termination of this Agreement.
  



2.5 BIOGLAN shall be entitled
  to the right of first refusal to make, distribute and sell the Product in all
  other countries of the world, provided that JAGO shall be free to grant such
  further rights. In the event that JAGO is or becomes able to grant any such
  further rights for any additional country or countries (“Additional Territories”)
  it shall inform BIOGLAN in writing. Once JAGO has negotiated Heads of Terms
  with a prospective licensee for Additional Territories, JAGO shall evidence
  such Heads of Terms to BIOGLAN in writing and BIOGLAN shall have the right to
  enter into a licensing agreement with JAGO in such Additional Territories on
  the same terms as were negotiated between JAGO and its prospective licensee.
  BIOGLAN’s preferential right to obtain a licence for such Additional Territories
  under this Clause 2.5 is subject to BIOGLAN’s acceptance of such Heads
  of Terms within 5 (five) working days of receipt. In the event that BIOGLAN
  declines such Heads of Terms JAGO shall not subsequently contract with the said
  prospective licensee or with another third party on terms materially less onerous
  than those offered to BIOGLAN under this Clause 2.5 without first informing
  BIOGLAN and giving BIOGLAN the opportunity to match such materially less onerous
  terms within 5 (five) working days. 



	3.  	Fees
and Royalties  






3.1 In consideration for
  the licence and rights granted in Clause 2 above BIOGLAN shall, subject to Clause
  4.1 below, pay to JAGO within thirty (30) days of the date of execution of this
  Agreement a licence fee in the amount of US***. 



3.2 In further consideration of the
grant of the rights and license set out in Clause 2 above, BIOGLAN shall pay to JAGO
royalties in the following amounts. 


	Years 1-2	 	***
      Net Sales	 
	 	 	 	 
	Year 3 – March 2006	 	*** Net Sales	 
	 	 	 	 
	April 2006 – term	 	*** Net Sales	 





3.3 In each twelve month period
following the date of first marketing of the Product in the Territory until expiry or
earlier termination of this Agreement the minimum value of royalties payable by BIOGLAN to
JAGO will be US***. In the event that BIOGLAN has not
received sufficient revenues in the first twelve months of marketing of the Product in the
Territory to generate the minimum royalty due under this Clause 3.3, the 




 
	 	
4	 



 













shortfall may be carried forward to
the second twelve month period of marketing, provided always that the minimum royalty paid
to JAGO for the first twenty four months of marketing the Product in the Territory shall
be US*** (*** US dollars). 



3.4 In the event that BIOGLAN grants
sub-licenses in any countries of the Territory, JAGO shall receive *** of any and all net sums received by BIOGLAN under such sub-licensing agreements
in lieu of any royalties due under Clause 3.2 in respect of such countries. All royalties
payable under this Clause 3.4 shall be paid in accordance with Clause 4.3. Other monies,
such as license fees, shall be paid to JAGO within 30 (thirty) days of receipt by BIOGLAN. 



3.5 BIOGLAN shall also pay JAGO new
country approval fees as set out below: 


	Spain	US***	 	 
	 	 	 	 
	Benelux	US***	 	 
	 	 
	All other countries in }	 
	The Territory}	US***
      per country 	 





Such payments shall be made within 30
(thirty) days of receipt of such new country approval. 



3.6 If any royalty due to JAGO under
this Agreement is not paid by the due date, then BIOGLAN will pay interest on such sum
from the date when the amount in question became due until the actual date of payment at
the rate of three percent (3%) above the current LIBOR. 



3.7 All fees and payments referred to
in this Clause 3 exclude any value added tax and similar taxes and BIOGLAN shall be
responsible for all and any such value added or similar tax due provided that a valid
invoice is issued to BIOGLAN. 



3.8 JAGO shall transfer to
  BIOGLAN the individual marketing authorizations for the Product in the United
  Kingdom, France, Germany, Italy and Sweden as soon as practicable after the
  Effective Date, and BIOGLAN shall then immediately accept full liability and
  responsibility for maintaining marketing authorizations and ensuring that all
  of each Agency’s reporting requirements are fully complied with. BIOGLAN
  shall at its own expense use reasonable efforts to obtain marketing authorizations
  for the Product in the Field of Use in all other countries of the Territory
  and to obtain such other approvals, including pricing approvals, as may be necessary
  for the marketing, sale and distribution of the Product. 

	4.
       	Obligations
      Of The Parties  






4.1 Within 90 (ninety) days
  of the Effective Date JAGO shall provide to BIOGLAN a written declaration from
  *** that exercise by BIOGLAN of the rights licensed to it hereunder do not infringe
  any Intellectual Property Rights of *** and an undertaking by *** that neither
  *** nor any Affiliate of *** nor is successors will commence any action against
  BIOGLAN in respect of the use by BIOGLAN of such JAGO’s Intellectual Property
  as is licensed to it hereunder. In the event that such written declaration and
  undertaking is not provided to BIOGLAN in accordance with the terms of this
  Clause 4.1 JAGO shall immediately repay to BIOGLAN all sums paid by BIOGLAN
  to JAGO pursuant to Clause 3.1 above. 



4.2 Having due regards to the size
and value of the market BIOGLAN shall use all reasonable commercial efforts to market the
product in the Territory as soon as possible and shall use all 




 
	 	
5	 



 














reasonable efforts to enhance and
maintain the demand for Products in the Territory. 



4.3 Within 30 (thirty) days
  after each January 31, April 30, July 31 and October 31 (the “Quarter Dates”)
  following the first marketing of the Product in the Territory, BIOGLAN shall
  deliver a report to JAGO detailing the number of units and Net Sales values
  of the Product sold by BIOGLAN, its Affiliates and sublicensees in each country
  of the Territory recorded during the quarter ended on that Quarter Date, and
  showing the aggregate Net Sales in the Territory and the royalties due thereon
  owed to JAGO. The quarterly report shall be accompanied by payment of the royalties
  due to JAGO. Royalties shall be paid in Sterling and net of any deductions or
  withholdings which are required to be deducted under relevant legislation in
  the Territory. BIOGLAN shall give all reasonable assistance to JAGO to enable
  JAGO to recover (wholly or in part) the sums withheld and to enable JAGO to
  take advantage of such double taxation agreements as may be available. 



4.4 BIOGLAN shall keep accurate
  books of account containing an accurate record of all data necessary for the
  proper computation of royalties under this Agreement. For the purpose of verifying
  amounts which may be due and the accuracy of BIOGLAN’s reports hereunder,
  JAGO shall have the right once each calendar year to have a certified public
  accountant reasonably acceptable to BIOGLAN inspect such records within two
  (2) years after the end of the calendar year to which they pertain at reasonable
  times and upon thirty (30) days prior written notice by JAGO. In the event that
  such inspection reveals that the royalties paid for the period covered by such
  inspection have been understated by more that *** of 5% of the royalties
  due (whichever shall be greater) then the cost of such inspection (including
  for the avoidance of doubt the costs JAGO’s certified public accountant)
  shall be borne by the other party. In all other cases the costs of such inspection
  shall be borne by JAGO. JAGO shall require the certified public accountant only
  to disclose to JAGO the amount of the royalty payable for the period under audit,
  and the accountant shall hold in confidence all other information obtained from
  the inspection. 



	5.
       	Right
      to Manufacture 






5.1 JAGO hereby appoints BIOGLAN for
the term of this Agreement to Manufacture or to procure the Manufacture of the Product in
accordance with Good Manufacturing Practice and in a manner which will ensure that the
Product achieves the Specifications and BIOGLAN hereby accepts that appointment. 



5.2 As soon as practicable after the
Effective Date and in no event later than 45 (forty five) days of the Effective Date of
this Agreement JAGO shall transfer to BIOGLAN all necessary manufacturing information,
Intellectual Property and Technical Information to enable BIOGLAN to manufacture the
Product in accordance with current Good Manufacturing Practice. 



5.3 Notwithstanding BIOGLAN’s
  right to procure the manufacture of the Product pursuant to Clause 5.1 above,
  in the event of BIOGLAN’s undertaking the Manufacture of the Product itself
  it shall do so at either or both of its facilities at Malrnö, Sweden and
  Andover, UK in accordance with the process description, quality controls during
  production, process controls and environmental monitoring as more fully set
  out in the documentation received from JAGO and approved by the relevant Agencies
  in the Territory. 



5.4 BIOGLAN undertakes with JAGO
that: 




 
	 	
6	 



 












	  	 5.4.1 it will
      carry out the Manufacture in accordance with this Agreement, and in accordance
      with its marketing authorisation for the Product. 






	  	 5.4.2 all
      raw materials used by BIOGLAN in the Manufacture of the Product will comply
      with Specifications as set out in the marketing authorizations.






	  	 5.4.3 it
      will allow, periodically (in the case of JAGO and its Associated Companies
      no more than once in any calendar year) upon reasonable notice (except in
      each case the representatives of any Agency who are entitled to immediate
      access) representatives of JAGO, Associated Companies and any Agency to
      inspect the relevant parts of its premises and equipment where the Manufacture
      of the Product is carried out or the Product, Active Ingredient or raw materials
      are stored and to inspect the process of Manufacture and to audit and observe
      BIOGLAN’s operations in relevant parts of the premises and equipment
      where Manufacture of the Product is carried out, and to assess BIOGLAN’s
      compliance with current Good Manufacturing Practice. 






	  	
5.4.4
it will Manufacture all Product in compliance with current Good Manufacturing Practice.  






	  	 5.4.5 it will
      immediately notify JAGO of any recall or advisory of the Product of which
      it becomes aware and will provide JAGO with any and all information in connection
      with such recall of the Products as may reasonably be requested by JAGO.
      In the event of any recall, voluntary or mandatory BIOGLAN shall meet the
      cost of any such recall. If such recall has occurred other than as a result
      of a failure by BIOGLAN to adhere to the provisions of this Clause 5.4 the
      parties shall meet to determine the effect of the recall on the royalty
      obligations of BIOGLAN hereunder. In the event of any recall due to a defect
      in the Product manufactured by BIOGLAN, JAGO shall in addition to its rights
      under Clause 5.4.3 be entitled upon 3 (three) working days’ notice
      to inspect the relevant parts of BIOGLAN’s premises and equipment relating
      to the Manufacture of the recalled Product and to examine the Manufacturing
      Records pertaining thereto. 







5.5 If and to the extent that BIOGLAN
considers it necessary, in order to comply with the terms of this Agreement, to purchase
and install any tooling, parts or equipment then it shall do so at the expense and risk of
BIOGLAN. 



5.6 BIOGLAN shall package the Product
in a tube which shall in turn be packaged within an outer packaging carton. The carton
shall be printed with all relevant statutory information and shall also contain a patient
information leaflet. The tube, carton and patient information leaflet shall all conform
strictly to all relevant statutory requirements and to the Specifications and shall not be
removed amended or altered in any way by BIOGLAN without the prior written authorization
of the relevant Agency. 



5.7 BIOGLAN shall market the Product
under any trade mark chosen by BIOGLAN. BIOGLAN shall meet all responsibilities of
maintaining such trade mark in the Territory. It is hereby agreed that all rights in such
trade mark rest absolutely in BIOGLAN. In the event that BIOGLAN decides to use the mark
“Solarase”, it shall grant to JAGO the right to acquire such mark on the
expiration of this Agreement on terms to be agreed, but in no case shall the amount paid
be greater than three times the average annual gross sales of the Product in the Territory
during the final two years of this Agreement. 




 
	 	
7	 



 













5.8 BIOGLAN shall be responsible for
informing itself and keeping itself informed in a timely manner of the relevant statutory
requirements in force from time to time relating to the tube, packaging carton and the
patient information leaflet. 



	6.  	Manufacturing  






6.1 BIOGLAN shall be responsible for
the Manufacture of the Product, and the way in which each batch of the Product is to be
Manufactured, checked for compliance with, and adherence to, the Specifications. Further
it is responsible for amongst other things, purchasing materials, testing and releasing
materials, undertaking production, assembly, packaging and quality control, including
in-process controls, sampling and analysis of the Product and for local release of the
Product for commercial sale. 



6.2 BIOGLAN shall be responsible for
ensuring the safe operation of the process of Manufacture of the Product and in particular
that the Technical Information supplied can be safely used in BIOGLAN’s premises and
on its equipment or those of its contract manufacturer. 



	7.  	Liaison
       






7.1 The parties shall meet
  at least once every (6) six months or at such other frequency as may be agreed
  between the parties to share information gained by each of them in relation
  to this Agreement, trading conditions, competitive products and any other information
  relevant to the performance of the parties’ respective obligations under
  this Agreement including any complaints, alleged defects, changes and improvements
  to existing procedures, and to discuss the performance of their respective obligations
  under this Agreement. 



	8.  	Warranties  






8.1 BIOGLAN undertakes and guarantees
to JAGO that all Product sold by BIOGLAN will have been produced in accordance with Good
Manufacturing Practice and fully in accordance with the Specifications. In the event that
BIOGLAN discovers or is notified that the Product does not conform to the Specification
BIOGLAN shall at its expense seek to remedy or rectify the defect, which may include
recall of the Product. It shall be a condition of this warranty that BIOGLAN shall have
stored the Product in accordance with the conditions set out in the marketing
authorizations and that the shelf life of the Product shall not have expired. 



8.2 BIOGLAN undertakes to ensure that
it has in place product liability insurance with a reputable insurer in an amount
appropriate for its business including the Manufacture, marketing and sale of the Product
but in any event for not less than £***
each and every claim. At JAGO’s request, BIOGLAN shall provide JAGO with evidence of
the existence and maintenance of such insurance cover. 



8.3 BIOGLAN undertakes to register
and maintain the trade mark in each country of the Territory during the term of this
Agreement. 



8.4 JAGO represents and warrants to
BIOGLAN that: 




 
	 	
8	 



 












	  	
8.4.1
as at the date hereof JAGO is the sole and exclusive owner of the Intellectual Property
including, without limitation, the Patent Rights and is properly entitled thereto;  






	  	
8.4.2
JAGO has not created any liens or encumbrances over the Intellectual Property and to the
best of its knowledge no other person or entity has created any liens or encumbrances
over the Intellectual Property.  







8.5 JAGO undertakes during the term
of this Agreement to pay all renewal fees in a timely manner and do all such acts and
things as may be necessary to maintain in force the patents contained in the Patent
Rights, and in respect of the patent applications contained therein to pay all costs and
fees and to use all reasonable endeavours to obtain grant of letters patent. JAGO shall
produce to BIOGLAN upon request copies of receipts for such renewal fees or other evidence
of payment. If JAGO fails to pay any such fees BIOGLAN shall be entitled to pay them and
set off any such payments against any other sums payable by BIOGLAN to JAGO pursuant to
the terms of this Agreement. 



8.6 JAGO undertakes during the term
of this Agreement not to abandon or allow to lapse any of the Patent Rights or to amend
the specification of any of them without the consent of BIOGLAN, such consent not to be
unreasonably withheld or delayed. 



8.7 Save as aforesaid, JAGO
  does not give any warranties or representations that the use of intellectual
  property and/or manufacture, sale and distribution or use of the Product does
  not infringe the intellectual property rights of any third parties (save for
  ***) and all warranties and conditions to that effect are hereby excluded. 



	9.  	Liability  






9.1 Save in respect of any claim
arising or threatened against JAGO in respect of its ownership or use of the Intellectual
Property or Technical Information or its entitlement to enter into this Agreement, BIOGLAN
shall indemnify and hold harmless JAGO against any claim made against JAGO by a third
party arising out of the Manufacture, distribution or sale of the Product by BIOGLAN or
BIOGLAN’s agents, employees, representatives, or others entrusted by BIOGLAN with the
execution of this Agreement, whether such claim is in statute, contract or in tort or on
any other basis and whether relating to product liability, product safety or otherwise
(whether before or after termination or expiry of this Agreement and whether liability
arises before or after termination or expiry of this Agreement). Such claims and all costs
(including legal costs and other costs including those of litigation/arbitration) and
expenses of or incidental to such claims and such Indemnity shall continue in full force
and effect notwithstanding any termination or expiration of this Agreement and for the
purposes of this clause BIOGLAN agrees to submit to the jurisdiction of any court in which
proceedings may be brought against JAGO (or its officers or employees) and if any such
claim is made against any person then or at any time previously an officer or employee of
JAGO then JAGO shall be entitled to indemnify such person against such claim and all costs
and expenses thereof provided that JAGO has obtained BIOGLAN’s written authority to
do so and the indemnity given by BIOGLAN to JAGO hereunder shall extend to all sums paid
by JAGO under or in consequence of its indemnity to such person. 




 
	 	
9	 



 












	10.  	Infringement  







10.1 Each of BIOGLAN and JAGO agrees
to promptly notify the other of any infringement of any rights contained within the
Intellectual Property in the Field of Use of which they become aware. 



10.2 Action by BIOGLAN.
  BIOGLAN may initiate proceedings alleging infringement by third parties of any
  rights with the Intellectual Property licensed under this Agreement in its own
  name and at its own expense. JAGO shall at the request and cost of BIOGLAN (as
  to out of picket expenses) give BIOGLAN any assistance it may reasonably request
  in connection with such proceedings. BIOGLAN shall keep JAGO fully informed
  as to the conduct of such proceedings. Any sums recovered in the course of such
  proceedings from the infringer whether by way of damages, account of profits,
  costs or otherwise, shall be applied first to reimbursing BIOGLAN for its costs
  and expenses of such proceedings and subject to such reimbursement shall belong
  to BIOGLAN and to JAGO proportionate to their respective losses. BIOGLAN shall
  pay to JAGO its share promptly on receipt of such sums recovered by BIOGLAN.
  If so requested by BIOGLAN JAGO shall join in any such infringement proceedings
  as co-plaintiff with BIOGLAN or allow BIOGLAN to take such proceedings in JAGO’s
  name. BIOGLAN shall, while this Agreement is in force and subsequently (provided
  that JAGO shall take no part in such proceedings without the prior written request
  of BIOGLAN), indemnify JAGO against all reasonable expenses of external legal
  advisers incidental to such proceedings or any appeal, including any costs or
  damages awarded against JAGO where such expenses have not been recovered from
  the infringer or the action against the alleged infringer is unsuccessful. 



10.3 Action by JAGO.
  If BIOGLAN does not, within three months after having any infringement of a
  Patent Right drawn to its attention by JAGO, commence an action for such infringement,
  or does not prosecute in a reasonably timely fashion any action commenced by
  it, then JAGO shall be entitled to commence proceedings for infringement in
  its own name (or continue any proceedings commenced by BIOGLAN, as appropriate)
  at its own expense. BIOGLAN shall at the request and cost of JAGO (as to out
  of pocket expenses only) give any necessary consent to enable JAGO to do so
  and shall give JAGO any assistance reasonably requested by JAGO in connection
  with such proceedings. Any sums recovered in the course of such proceedings
  from the infringer, whether by way of damages, account of profits, cost or otherwise,
  shall be applied first in reimbursing JAGO for its costs and expenses of such
  proceedings and then, in cases where JAGO takes over proceedings previously
  begun by BIOGLAN in reimbursing to BIOGLAN its costs and expenses of such proceedings
  incurred prior to the time when they were taken over by JAGO. Subject to such
  reimbursement, such sums recovered shall belong to JAGO and to BIOGLAN, proportionate
  to their respective losses and JAGO shall pay to BIOGLAN its share promptly
  on receipt of such sums recovered by JAGO. If so requested by JAGO, BIOGLAN
  shall join in any such infringement proceedings as co-plaintiff with JAGO or
  allow JAGO to take such proceedings in BIOGLAN’s name JAGO shall, while
  this Agreement is in full force and subsequently (provided that BIOGLAN shall
  take no part in such proceedings without the prior written request of JAGO),
  indemnify BIOGLAN against all reasonable expenses of external legal advisers
  incidental to such proceedings or any appeal including any costs or damages
  awarded against BIOGLAN where such expenses have not been recovered from the
  infringer or the action against the alleged infringer is unsuccessful. 



Allegations of
Invalidity or Breach of Third Party Rights.  



10.4 If any allegation or claim be
made that any Patent Rights are invalid (whether such 




 
	 	
10	 



 













allegations or claims be made in the
course of any infringement suit or separately) the following provisions shall apply: 



	  	
10.4.1
the party against whom such allegation or claim shall have been made shall forthwith
notify the other party providing all necessary details; and  






	  	
10.4.2
thereafter JAGO shall at its own expense defend against such claims or allegations such
that the value of BIOGLAN’s rights under this Agreement is preserved.  






10.5 In the event that the
  said claims of invalidity are upheld by a court or competent authority in the
  Territory, the royalty rate payable by BIOGLAN to JAGO pursuant to Clause 3.2
  shall be reduced by 50% from the date that the judgement of the court or decision
  of the competent authority is delivered and this provision shall apply for the
  remaining period of this Agreement. In the event that JAGO appeals successfully
  against the said judgement or decision the royalty rate payable to JAGO by BIOGLAN
  shall forthwith be restored to level provide for in Clause 3.2. 



10.6 In the event that the use of the
Technical Information or Intellectual Property in the licensed Field of Use is held by a
court or competent authority to infringe the intellectual property rights of any third
party, then JAGO will repay the license fee paid to it pursuant to Clause 3.1 above and
any sums paid to it pursuant to Clause 3.2 above which have not been offset against
royalties and will indemnify BIOGLAN its customers, sub-contractors, officers, employees
and rights for and against any and all claims, damages, costs (including reasonable legal
fees) and losses of any nature whatsoever. 



10.7 In the event that, as
  a result of such claims or allegations of invalidity or infringement of a third
  party’s intellectual property rights, it is determined by both BIOGLAN
  and JAGO that utilisation of the JAGO Intellectual Property and/or Technical
  Information in the licensed Field of Use would be impractical or impossible
  without obtaining an additional royalty bearing license from a third party,
  then JAGO shall enter into such a license provided that BIOGLAN shall not suffer
  any diminution of rights hereunder nor shall BIOGLAN be required to make any
  payment whatsoever to the third party nor shall any additional payment or increased
  royalty rate be payable to JAGO by BIOGLAN as a result of JAGO’s obtaining
  the said license. In the event that JAGO is unable or unwilling to obtain such
  a license, BIOGLAN may enter into such license. BIOGLAN shall thereafter be
  permitted to offset a proportion as agreed with JAGO of any other royalties
  as may be payable against any fees, royalties or other amounts owed by BIOGLAN
  to JAGO, unless the third party is an Affiliate of BIOGLAN. 



10.8 In the event that this Agreement
becomes inoperable in any part of the Territory without infringing the intellectual
property rights of a third party and if neither party to this Agreement is able or willing
to obtain a license from the said third party, without prejudice to BIOGLAN’s rights
under 10.6 above BIOGLAN may at its sole discretion continue to pursue its rights
hereunder in any other country within the Territory unless it considers it uneconomic to
do so, in which case BIOGLAN may terminate this Agreement immediately upon serving written
notice on JAGO. 



	11.  	Secrecy  






11.1 BIOGLAN acknowledges that any
Confidential Information now or hereafter disclosed to it by JAGO has or will be disclosed
to it in confidence by JAGO and that, as between 




 
	 	
11	 



 













BIOGLAN and JAGO, JAGO is entitled to
all rights in the same and BIOGLAN shall before and after termination of this Agreement
keep (and use all reasonable endeavours to ensure that its officers employees and agents
keep) the same (whether supplied before or after the date of this Agreement) confidential
and not use the same other than for the purposes of this Agreement. These restrictions
upon disclosure and use of such information shall extend for a period of five (5) years
beyond the termination of this Agreement, but shall immediately cease to apply to any
specific portion of such information: 



	   	 (a) 	which BIOGLAN
      can demonstrate by credible written documentation to have been in its possession
      at the earlier of either its receipt from JAGO or the date of this Agreement;
      or 





	   	 (b) 	which is or
      later becomes generally available to the public at large other than by JAGO’s
      neglect or default or the neglect or default of an Associated Company of
      BIOGLAN; or 





	
        	
      (c) 	which
      is lawfully received by BIOGLAN from a third party having no obligation
      direct or indirect of confidentiality to JAGO; 





	   	 (d) 	which is required
      to be disclosed by law, government regulation or any Agency. 






11.2 The provisions of Clause 11.1
shall apply in the same manner to the disclosure of any Confidential Information of
BIOGLAN to JAGO as if JAGO was substituted for BIOGLAN and BIOGLAN was substituted for
JAGO. 



11.3 Each party shall only
  allow access to the other’s Confidential Information exclusively to those
  of its employees or contractors or agents or prospective sublicensees who have
  a reasonable need to see and use it for the purposes of this Agreement and shall
  inform each of such employees or other receiving parties of the confidential
  nature of the Confidential Information and of the obligations on the recipient
  with respect to such Confidential Information and shall ensure that each of
  its employees or other receiving parties having access to the Confidential Information
  is contractually bound by obligations of confidentiality and shall take such
  steps as may be reasonable to enforce such obligations. 



11.4 Each party shall take all
reasonable precautions in dealing with the Product and with any information, documents and
papers provided to it by the other so as to prevent any unauthorised person from having
access to such Product information, documents or papers or to any report on or records of
any analysis, tests or trials carried out. 




 
	 	
12	 



 












	12.  	Disclaimer  







12.1 JAGO DISCLAIMS ANY AND
  ALL LIABILITY OR RESPONSIBILITY (WHETHER ARISING IN CONTRACT, TORT, BREACH OF
  STATUTORY DUTY OR IN ANY OTHER BASIS WHATSOEVER) FOR ANY DEATH, INJURY, HARM,
  LOSS OR DAMAGE ARISING OR ALLEGED TO ARISE OUT OF THE DESIGN, MANUFACTURE, SALE,
  DISPOSAL OR USE OF LICENSED PRODUCTS WHICH ARE MANUFACTURED, SOLD OR DISPOSED
  OF BY OR ON BEHALF OF BIOGLAN OR ITS SUBLICENSEES, EXCEPT TO THE EXTENT THAT
  SUCH LIABILITY ARISES FROM JAGO’S OWN NEGLIGENCE OR WILFUL MISCONDUCT.
  JAGO DOES NOT WARRANT THAT SUCH LICENSED PRODUCTS ARE OR WILL BE SAFE, OF SATISFACTORY
  QUALITY OR FIT FOR ANY PARTICULAR PURPOSE FOR WHICH THEY MAY BE BOUGHT OR SOLD
  AND ANY WARRANTIES TO THAT EFFECT (EXCEPT AS SET OUT ABOVE) WHETHER EXPRESS
  OR IMPLIED (WHETHER BY WAY OF LAW, STATUTE, CUSTOM, TRADE PRACTICE OR OTHERWISE
  HOWSOEVER) ARE HEREBY EXCLUDED. IT IS FOR BIOGLAN TO SATISFY ITSELF AS TO THE
  SAFETY AND EFFICACY OF THE LICENSED PRODUCTS AND AS TO THEIR SUITABILITY FOR
  ANY PURPOSES FOR WHICH THEY MAY BE MANUFACTURED, BOUGHT OR SOLD. 



12.2 IN ANY EVENT, AND SUBJECT
  ALWAYS TO THE OTHER PROVISIONS OF THIS AGREEMENT, EACH PARTY’S TOTAL LIABILITY
  TO THE OTHER FOR ALL BREACHES OF ITS OBLIGATIONS ARISING UNDER THIS AGREEMENT
  SHALL NOT EXCEED £10 (TEN MILLION POUNDS STERLING) IN RESPECT OF ALL EVENTS
  AND CIRCUMSTANCES GIVING RISE TO ANY AND ALL SUCH LIABILITIES. 



12.3 IN NO EVENT WILL EITHER PARTY BE
LIABLE TO THE OTHER FOR ANY INDIRECT OR CONSEQUENTIAL LOSS ARISING BY REASON OF ANY BREACH
OF THIS AGREEMENT INCLUDING (WITHOUT LIMITATION) LOSS OF PROFIT, LOSS OF TURNOVER, LOSS OF
BARGAIN OR LOSS OF OPPORTUNITY. 



	13.  	Statements
and Amendments of the Agreement  






13.1 This Agreement sets forth the
entire understanding between the parties in respect of the subject matter of this
Agreement and supersedes all prior agreements, arrangements, and/or understandings related
to said subject matter. Save as aforesaid there are no promises, representations,
conditions, provisions, or terms related hereto other than those set forth in this
Agreement. 



13.2 This Agreement may not be
changed, modified or amended except in writing and signed as exhibits to this agreement
and numbered consecutively by the parties. 



	14.  	Termination
of the Agreement  






14.1 Unless earlier terminated, the
license granted pursuant to Clause 2 of this Agreement, shall continue in effect until the
latest date on which any of the Patent Rights listed in the Schedule expires. 



14.2 In the event that BIOGLAN wishes
to continue to manufacture, sell, market and distribute the Product after expiration of
this Agreement it shall so notify JAGO and the parties 




 
	 	
13	 



 













shall in good faith negotiate royalty
terms which are substantially similar to the terms of this Agreement, taking into account
market conditions and any competitive products, under which Technical Information relating
to the Product may continue to be licensed to BIOGLAN. In the event that the parties are
unable to agree on royalty rates, the parties shall submit such dispute to expert
determination. 



14.3 The parties’ right to
terminate the Agreement without notice for good cause shall not be affected by the Clause
14.6. 



14.4 Notices of termination are only
valid if given in writing. 



14.5 In addition to termination
  under Clause 14.6 JAGO shall be entitled to terminate the agreement upon ninety
  (90) days’ written notice if BIOGLAN does not maintain the necessary official
  authorisations, permits or certificates required to enable it to perform all
  its obligations under this Agreement and fails to rectify the matter within
  the notice period, and/or it fails for reasons within control of BIOGLAN or
  neglects to submit them to JAGO within ninety days of JAGO’s written request
  for the production of specific documents. 



14.6 Furthermore, the parties shall
be entitled to terminate the Agreement immediately upon written notice if: 



	  	
14.6.1
either party defaults or commits a material breach of any of the provisions of this
Agreement or otherwise acts in a manner that the other party cannot reasonably be
expected to continue to operate this Agreement, the other party may terminate this
Agreement by giving the defaulting or breaching party forty five (45) days written notice
thereof. However, if the defaulting or breaching party, within the forty five (45) days
period referred to, fully cures said default or breach, this Agreement shall continue in
full force and effect as is such default or breach had not occurred; or  






	  	
14.6.2
an order is made or an effective resolution is passed for the liquidation or winding up
(or any similar judicial process) of the other party; or  






	  	
14.6.3
the other party seeks or enters into any composition or arrangement with its creditors or
fails to pay its employees on time or suffers or permits any constraint or distress
proceedings or an encumbrancer takes possession or a receiver, manager, administrative
receiver or administrator is appointed of all or any part of its assets or undertaking or
if it takes or suffers any similar action in consequence of debt, or  






	  	
14.6.4
the other party ceases or threatens to cease or carry on its business or substantially
the whole of the business or disposes of its undertaking or stops or threatens to stop
payment of its debts.  






	15.  	Notices  






15.1 All communications hereunder
shall be in writing and shall be deemed to have been duly given upon receipt by the
addressee at the address set forth below or such other address as either party may specify
by notice sent in accordance with this section: 



 
	 	
14	 



 













	  	
Bioglan
Pharma PLC 
1, The Cam Centre

      Wilbury Way, Hitchin, Hertfordshire SG4 0TW 

      ENGLAND 






	  	 Attention:
      	Mrs Susan
      J Keast, 

      Corporate Affairs Director and Company Secretary 






	  	
And:  






	  	
SkyePharma
PLC
105 Piccadilly 
London W1V 9FN ENGLAND  






	  	 Attention:
      	Miss Suzanne
      V. McLean 

      International Counsel and Company Secretary 






	16.  	Severability  







16.1 In case individual provisions of
this agreement are or shall become null, void, illegal or unenforceable this shall not
affect or impair the validity, legality or enforceability of any other provision. The
void, illegal or unenforceable provision shall be replaced by a valid provision
corresponding to the aim and object of this agreement which the parties undertake to
negotiate promptly and in good faith.  



	17.  	Applicable
Law and Jurisdiction  






17.1 This Agreement shall be governed
and construed in accordance with the laws of England and Wales. 



	18.  	Assignment  






The rights and obligations of each of the
parties to this agreement are personal to such party and may not be assigned or
subcontracted by either party without the prior written consent of the other party. 



	19.  	Miscellaneous  






19.1 No omission, forbearance or
delay on the part of either of the parties to enforce fully any provision of this
Agreement or any right, power, privilege or remedy hereunder shall be deemed to be a
waiver of any such rights or operate so as to bar the exercise or enforcement of the same
at any subsequent time or times. 



19.2 No press or other public
statement or circular shall be made or issued in connection with the subject matter of
this agreement unless previously approved in writing by the parties hereto. 



19.3 In the event that BIOGLAN makes
any improvement or modification in the use, composition, Manufacture or otherwise of the
product during the subsistence of this Agreement BIOGLAN shall immediately make any such
improvement or modification available to JAGO 




 
	 	
15	 



 













under a perpetual royalty-free
non-exclusive worldwide license to enable JAGO to use the same in connection with the
Product in the Field of Use. JAGO shall use reasonable efforts to ensure that all its
other licensees for the Product shall be subject to conditions comparable to those in this
Clause 19.3 and that any improvements and modifications made by such other licensees shall
be made available to BIOGLAN under a perpetual royalty-free license to use in connection
with the Product in the Field of Use in the Territory. 



19.4 Nothing in this Agreement, or in
the arrangements hereby contemplated shall constitute or be taken to mean that BIOGLAN
acts as the agent of the JAGO for any purpose whatsoever. Without prejudice to the terms
of this Agreement BIOGLAN shall not describe itself or hold itself out as being a
subsidiary or agent of JAGO or otherwise associated with JAGO except as a licensee and
subcontractor of JAGO for the Manufacture, sale and distribution of the Product for the
Field of Use in the Territory as defined. BIOGLAN shall not make any warranty or
representation or do any act in the name of or on behalf of JAGO and shall not in any way
pledge the credit of JAGO. 



19.5 “Force Majeure” means
any circumstances beyond the reasonable control of either party (including without
limitation, any strike, lock-out or other form of industrial action). Without prejudice to
the generality of the foregoing force majeure shall include: 



	   	
(a)  	act
of God, weather conditions, explosion, flood, tempest, fire or accident;  






	   	
(b)  	war
or threat of war sabotaging civil disturbance or requisition;  






	   	
(c)  	acts,
restrictions, regulations, bye-laws, prohibitions or measures of any kind           on
the part of any governmental, parliamentary, state, regional or local
          authority;  






	   	
(d)  	import
and export regulations or embargoes;  






	   	
(e)  	strikes,
lockouts or other industrial actions or trade disputes, whether           involving
employees of a party or a third party;  






	   	
(f)  	difficulty
in obtaining raw material, labour, fuel, parts or equipment; or  






	   	
(g)  	unavailability
or shortage of materials from the usual sources or supply.  





	  	 19.5.1 If
      either party is affected by Force Majeure it shall forthwith notify the
      other party of the nature and extent thereof. 





	  	 19.5.2 Neither
      party shall be deemed to be in breach of this Agreement, or otherwise be
      liable to the other, by reason of any delay in performance, or non-performance,
      of any of its obligations hereunder to the extent that such delay or non-performance
      is due to any Force Majeure of which it has notified the other party, and
      the time for performance of that obligation will be extended accordingly.
      





	  	 19.5.3 If
      the Force Majeure in question prevails for a continuous period in excess
      of 6 (six) months, the parties shall enter into bona fide discussions with
      a view to alleviating its effects, or to agreeing upon such alternative
      arrangements as may be fair and reasonable. 







 
	 	
16	 



 













This agreement has been entered into
on the date first written above. 


	BIOGLAN PHARMA PLC	 	JAGOTEC AG	 
	 	 	 	 
	/s/ Terry I. Sandler
      

    	 	/s/ Walter Zeller
      

    	 
	BY: Terry I. Sandler	 	BY: Walter Zeller	 
	TITLE: Chairman & CEO	 	TITLE: Director	 
	DATE: 13 March 2000	 	DATE: 13 March 2000	 
	 	 	 	 
	/s/ Sue J. Keast
      

    	 	/s/ Suzanne V. McLean
      

    	 
	BY: Sue J. Keast	 	BY: Suzanne V. McLean	 
	TITLE: Company Secretary and 

                   Corporate
      Affairs Director	 	TITLE: Director	 
	DATE: 13 March 2000	 	DATE: March 13, 2000	 




 
	 	
17	 



 













SCHEDULE 



The Patent Rights  



Related to
  WO 91/04059 (herein known as “Solarase I”): Expires 2010 



	  	
European
patent no. EP-B-0445255 
Divisional European patent application no.
95100186.6/EP-A-0656213  






Related to
  WO 93/16732 (herein known as “Solarase II”): Expires 2013 



	  	 European
      patent application no. 93903754.5/EP-A-0626863 

      Norwegian patent application no. 943044  






Related to
  WO 93/16733 (herein known as “Solarase III”): Expires 2013 



	  	 European
      patent application no. 93903755.2/EP-A-0626864