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.


 






† 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.


 

















 


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.


 






† 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.


 






† 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.


 


3

















 


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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