Document:

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                                                                     Exhibit 4.3

            INSTRUCTIONS FOR USE OF LIBERTY MEDIA INTERNATIONAL, INC.

                    SERIES A AND SERIES B RIGHTS CERTIFICATES

          CONSULT EQUISERVE TRUST COMPANY, N.A. OR YOUR BANK OR BROKER
                               AS TO ANY QUESTIONS

            The following instructions relate to a rights offering (the "Rights
Offering") by Liberty Media International, Inc., a Delaware corporation (the
"Company"), to the holders of its Series A common stock, par value $0.01 per
share (the "Series A Common Stock"), and to the holders of its Series B common
stock, par value $0.01 per share (the "Series B Common Stock" and together with
the Series A Common Stock, the "Common Stock"), as described in the Company's
prospectus dated July 19, 2004 (the "Prospectus"). Holders of record of shares
of Series A Common Stock, at 5:00 p.m. New York City time, on July 26, 2004 (the
"Record Date"), are receiving .20 transferable subscription rights ("Series A
Rights") for each share of Series A Common Stock held by them on the Record
Date. Each whole Series A Right is exercisable, upon payment of $25.00 as
described below (the "Series A Subscription Price"), to purchase one share of
Series A Common Stock (the "Series A Basic Subscription Privilege"). Holders of
record of shares of Series B Common Stock on the Record Date are receiving .20
transferable subscription rights ("Series B Rights" and together with the Series
A Rights, the "Rights") for each share of Series B Common Stock held by them on
the Record Date. Each whole Series B Right is exercisable, upon payment of
$27.50 as described below (the "Series B Subscription Price", and together with
the Series A Subscription Price, the "Subscription Price"), to purchase one
share of Series B Common Stock (the "Series B Basic Subscription Privilege" and
together with the Series A Basic Subscription Privilege, each a "Basic
Subscription Privilege"). In addition, subject to the proration described below,
(i) each holder of record of Series A Rights (each a "Series A Rightsholder")
that fully exercises its Series A Basic Subscription Privilege with respect to
all Series A Rights that it holds in the same capacity pursuant to a single
rights certificate also has the right to subscribe at the Series A Subscription
Price for additional shares of Series A Common Stock (the "Series A
Oversubscription Privilege"); and (ii) each holder of record of Series B Rights
(each a "Series B Rightsholder" and together with the Series A Rightsholders,
the "Rightsholders") that fully exercises its Series B Basic Subscription
Privilege with respect to all Series B Rights that it holds in the same capacity
pursuant to a single rights certificate also has the right to subscribe at the
Series B Subscription Price for additional shares of Series B Common Stock (the
"Series B Oversubscription Privilege" and together with the Series A
Oversubscription Privilege, the "Oversubscription Privilege"). If shares of
either series of Common Stock being offered in the Rights Offering remain
available for subscription following the exercise of the Basic Subscription
Privilege by Rightsholders prior to the Expiration Time, as defined below (the
"Excess Shares"), such Rightsholders may exercise their Oversubscription
Privilege to subscribe for a number of Excess Shares. If there are not a
sufficient number of Excess Shares of the applicable series of Common Stock to
satisfy all subscriptions pursuant to the exercise of Oversubscription
Privileges by the applicable Rightsholders, the available Excess Shares of the
applicable series of Common Stock will be allocated pro rata among Rightsholders
of the applicable series of Common Stock exercising their Oversubscription
Privilege in proportion to the number of shares of the applicable series of
Common Stock that each such Rightsholder purchased pursuant to its Basic
Subscription Privilege; provided, however, that if such pro rata allocation
results in any Rightsholder being allocated a greater number of Excess Shares
than such Rightsholder subscribed for pursuant to the exercise of such
Rightsholder's Oversubscription Privilege, then such Rightsholder will be
allocated only such number of Excess Shares as such Rightsholder subscribed for,
and the remaining Excess Shares will be allocated among the other Rightsholders
exercising their Oversubscription Privilege with respect to the applicable
series of Rights.

            No fractional Rights or cash in lieu thereof will be issued or paid.
The number of total Rights distributed to each record holder has been rounded up
to the nearest whole number in order to avoid issuing fractional Rights. Nominee
holders of Common Stock that hold, on the Record Date, shares for the account(s)
of more than one beneficial owner may exercise the number of Rights to which all
such beneficial owners in the aggregate would otherwise have been entitled if
they had been direct record holders of Common Stock on the Record Date, provided
such nominee holder makes a proper showing to the Subscription Agent by August
6, 2004, as determined in the Company's sole and absolute discretion.

            The Subscription Price is payable by check or bank draft drawn upon
a U.S. bank or postal, telegraphic or express money order payable to the
Subscription Agent.

            The Rights will expire at 5:00 p.m., New York City time, on August
23, 2004, unless extended as described in the Prospectus (the "Expiration
Time"). It is anticipated that the Series A Rights and Series B Rights will be
traded on the Nasdaq National Market under the symbols "LTYAR" and "LTYBR".

            The number and series of Rights to which a holder of Common Stock is
entitled is printed on the face of that holder's "Rights Certificate." You
should indicate your wishes with regard to the exercise, assignment, transfer or
sale of your Rights by completing the Rights Certificate and returning it to the
Subscription Agent in the envelope provided.

            YOUR RIGHTS CERTIFICATE MUST BE RECEIVED BY THE SUBSCRIPTION AGENT,
OR GUARANTEED DELIVERY REQUIREMENTS WITH RESPECT TO YOUR RIGHTS CERTIFICATE MUST
BE
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COMPLIED WITH, AND PAYMENT OF THE SUBSCRIPTION PRICE MUST BE RECEIVED, AS MORE
SPECIFICALLY DESCRIBED IN THE PROSPECTUS, BY THE SUBSCRIPTION AGENT ON OR BEFORE
THE EXPIRATION TIME. YOU MAY NOT REVOKE ANY EXERCISE OF A RIGHT.

1. SUBSCRIPTION PRIVILEGE.

            To exercise Rights, deliver your properly completed and executed
Rights Certificate, together with payment in full of the Subscription Price for
each share of Common Stock subscribed for pursuant to the Basic Subscription
Privilege and the Oversubscription Privilege, to the Subscription Agent.

            Payment of the applicable Subscription Price must be made for the
full number of shares of Common Stock being subscribed for by certified or
personal check or bank draft drawn upon a U.S. bank, or postal, telegraphic or
express money order payable to: EquiServe Trust Company, N.A., as Subscription
Agent. THE SUBSCRIPTION PRICE WILL BE DEEMED TO HAVE BEEN RECEIVED BY THE
SUBSCRIPTION AGENT ONLY UPON (I) THE CLEARANCE OF ANY UNCERTIFIED CHECK, OR (II)
THE RECEIPT BY THE SUBSCRIPTION AGENT OF ANY CERTIFIED CHECK OR BANK DRAFT DRAWN
UPON A U.S. BANK OR OF ANY POSTAL, TELEGRAPHIC OR EXPRESS MONEY ORDER.

            If paying by uncertified personal check, please note that the funds
paid thereby may take five business days or more to clear. Accordingly,
Rightsholders who wish to pay the Subscription Price by means of an uncertified
personal check are urged to make payment sufficiently in advance of the
Expiration Time to ensure that such payment is received and clears by such date
and are urged to consider payment by means of certified or cashier's check or
money order.

            Alternatively, you may cause a written guarantee substantially in
the form enclosed herewith (the "Notice of Guaranteed Delivery") from a
commercial bank, trust company, securities broker or dealer, credit union,
savings association or other eligible guarantor institution which is a member of
or a participant in a signature guarantee program acceptable to the Subscription
Agent (each of the foregoing being an "Eligible Institution"), to be received by
the Subscription Agent at or prior to the Expiration Time, together with payment
in full of the applicable Subscription Price. Such Notice of Guaranteed Delivery
must state your name, the number of Rights represented by your Rights
Certificate, the number of Rights being exercised pursuant to the Basic
Subscription Privilege and the number of shares of Common Stock, if any, being
subscribed for pursuant to the Oversubscription Privilege, and will guarantee
the delivery to the Subscription Agent of your properly completed and executed
Rights Certificate within three business days following the date of the Notice
of Guaranteed Delivery. If this procedure is followed, your Rights Certificate
must be received by the Subscription Agent within three business days of the
Notice of Guaranteed Delivery.

            Additional copies of the Notice of Guaranteed Delivery may be
obtained upon request from the Information Agent, at the address, or by calling
the telephone number, indicated below.

            Banks, brokers, trusts, depositaries or other nominee holders of the
Rights who exercise the Rights on behalf of beneficial owners of Rights will be
required to certify to the Subscription Agent and the Company, in connection
with any exercise of the Oversubscription Privilege, the aggregate number of
Rights that have been exercised and the number of shares of Common Stock that
are being subscribed for pursuant to the Oversubscription Privilege by each
beneficial owner of Rights on whose behalf such nominee holder is acting. If
more shares of Common Stock are subscribed for pursuant to the Oversubscription
Privilege than are available for sale, such shares will be allocated, as
described above, among Rightsholders of the applicable series of Rights
exercising their Oversubscription Privilege in proportion to the number of
shares of Common Stock purchased pursuant to each such Rightsholder's Basic
Subscription Privilege.

            The address and telecopier numbers of the Subscription Agent are as
follows:

<TABLE>
<S>                                          <C>                                     <C>
            By Overnight Delivery:                         By Mail:                                  By Hand:
        EquiServe Trust Company, N.A.           EquiServe Trust Company, N.A.        Securities Transfer & Reporting Services  Inc.
             161 Bay State Drive                        PO Box 859208                              c/o EquiServe
        Braintree, Massachusetts 02184       Braintree, Massachusetts 02185-9208             100 William St. 3rd Floor
                                                                                             New York, New York 10038
</TABLE>

                             Facsimile Transmission:
                          (Eligible Institutions Only)
                                 (781) 380-3388

                      To confirm receipt of facsimile only:
                             (781) 843-1833 ext. 200

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            The address and telephone numbers of the Information Agent, for
inquiries, information or requests for additional documentation are as follows:

                              D.F. King & Co., Inc.
                                 48 Wall Street
                            New York, New York 10005
                 Banks and Brokers Call Collect: (212) 269-5550
                    All Others Call Toll Free: (800) 488-8035

            If you exercise less than all of the Rights evidenced by your Rights
Certificate you may either (a) check box "F" and complete Section 2 of your
Rights Certificate to transfer your remaining unexercised Rights (but no
fractional Rights) to a designated transferee or to assign them to a bank or
broker to sell for you, (b) check box "D" and complete Section 1 of your Rights
Certificate to direct the Subscription Agent to attempt to sell the unexercised
Rights (but no fractional Rights) on your behalf, or (c) check box "E" and
complete Section 1 of your Rights Certificate and the Subscription Agent will
issue you a new Rights Certificate evidencing the unexercised Rights (see
Paragraph 4 of these "Instructions For Use of Liberty Media International, Inc.
Series A and Series B Rights Certificates"). If you choose to have any such new
Rights Certificate delivered to a different address, so indicate in Section 1 of
your Rights Certificate. If you choose to have a new Rights Certificate sent,
you may not receive any such new Rights Certificate in sufficient time to permit
the exercise, assignment, transfer or sale of the Rights evidenced thereby.

            If you have not indicated the number of Rights being exercised, or
if you have not forwarded full payment of the Subscription Price for the number
of Rights that you have indicated are being exercised, you will be deemed to
have exercised the Basic Subscription Privilege with respect to the maximum
number of whole Rights which may be exercised for the aggregate Subscription
Price transmitted or delivered by you, and to the extent that the aggregate
Subscription Price transmitted or delivered by you exceeds the product of the
applicable per share Subscription Price multiplied by the number of whole Rights
evidenced by the Rights Certificate(s) transmitted or delivered by you and no
direction is given as to the excess (such excess being the "Subscription
Excess"), you will be deemed to have exercised your Oversubscription Privilege
to purchase, to the extent available, that number of whole shares of the
applicable series of Common Stock equal to the quotient obtained by dividing the
Subscription Excess by the applicable per share Subscription Price, subject to
the limit on the number of shares of the applicable series of Common Stock
available to be purchased in the Rights Offering and applicable proration.

2. CONDITIONS TO COMPLETION OF THE RIGHTS OFFERING.

            There are no conditions to the completion of the Rights Offering.
However, the Company has the right to terminate the Rights Offering for any
reason before the Rights expire.

3. DELIVERY OF SHARES OF COMMON STOCK.

            As soon as practicable after the Expiration Time, the following
deliveries and payments will be made to the address shown on the face of your
Rights Certificate unless you provide instructions to the contrary in Section 1
of your Rights Certificate.

            (a) Subscription Privilege. The Subscription Agent will deliver to
each validly exercising Rightsholder shares of Common Stock purchased pursuant
to such exercise including the number of shares of Common Stock allocated to and
purchased by such Rightsholder pursuant to its Oversubscription Privilege. The
Subscription Agent will effect delivery of the subscribed for shares of Common
Stock through the Subscription Agent's book-entry registration system by mailing
to each subscribing Rightsholder a statement of holdings detailing such
Rightsholder's subscribed-for shares of Common Stock and the method by which the
subscribing Rightsholder may access its account and, if desired, trade its
shares. See "The Rights Offering -- Subscription Privileges" in the Prospectus.

            (b) Return of Excess Payments. The Subscription Agent will promptly
deliver to each Rightsholder who exercises the Oversubscription Privilege any
excess funds tendered, without interest or deduction, in payment of the
Subscription Price for each share of Common Stock that is subscribed for by, but
not allocated to, such Rightsholder pursuant to the Oversubscription Privilege.

4. TO SELL OR TRANSFER RIGHTS.

            (a) Transfer of All or Less than All Unexercised Rights to One
Designated Transferee. To transfer all of your unexercised Rights to a
designated transferee or to a broker, dealer or nominee for sale on your behalf,
you must so indicate in box "F" and complete Section 2 of your Rights
Certificate. A Rights Certificate that has been properly transferred in

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its entirety may be exercised by a new holder without having a new Rights
Certificate issued. If you wish to transfer less than all of your unexercised
Rights (but no fractional Rights) to one designated transferee or to a broker,
dealer or nominee for sale on your behalf, so indicate in box "F" and complete
Section 2 of your Rights Certificate and separately instruct the Subscription
Agent as to the action to be taken with respect to the unexercised Rights not
transferred. Such instructions should be guaranteed by an Eligible Institution.
If no such instructions are received, the Subscription Agent will issue you a
new Rights Certificate evidencing the unexercised Rights. If box "F" is checked
but Section 2 is not completed, the Subscription Agent may thereafter treat the
bearer of the Rights Certificate as the absolute owner of all of the Rights
evidenced by such Rights Certificate for all purposes, and neither the
Subscription Agent nor the Company shall be affected by any notice to the
contrary.

            (b) Transfer of All or Less than All Unexercised Rights to More than
One Designated Transferee. Because only the Subscription Agent can issue Rights
Certificates, if you wish to transfer all or less than all of the unexercised
Rights (but no fractional Rights) evidenced by your Rights Certificate to more
than one designated transferee or to more than one broker, dealer or nominee for
sale on your behalf, so indicate in box "F" and complete Section 2 and
separately instruct the Subscription Agent as to the action to be taken with
respect to any unexercised Rights not transferred. Such instructions should be
guaranteed by an Eligible Institution. Alternatively, you may first have your
Rights Certificate divided into Rights Certificates of appropriate denominations
by following the instructions in Paragraph 5 below. Each Rights Certificate
evidencing the number of Rights you intend to transfer can then be transferred
by following the instructions in Paragraph 4(a).

            (c) Sale of All Unexercised Rights Through the Subscription Agent.
To sell all unexercised Rights (but no fractional Rights) evidenced by a Rights
Certificate through the Subscription Agent, so indicate by checking box "D" and
completing Section 1. IF THE SUBSCRIPTION AGENT SELLS ANY OF YOUR RIGHTS, SUCH
RIGHTS WILL BE DEEMED TO HAVE BEEN SOLD AT THE WEIGHTED AVERAGE NET SALE PRICE
OF ALL RIGHTS SOLD BY THE SUBSCRIPTION AGENT. Promptly following the Expiration
Time, the Subscription Agent will send the selling Rightsholder a check for the
net proceeds from the sale of any Rights sold. The Subscription Agent's
obligation to execute sell orders is subject to its ability to find buyers for
the Rights. NO ASSURANCE CAN BE GIVEN THAT A MARKET WILL DEVELOP OR BE
MAINTAINED FOR THE RIGHTS OR THAT THE SUBSCRIPTION AGENT WILL BE ABLE TO SELL
ANY RIGHTS. You must have your order to sell your Rights to the Subscription
Agent before 11:00 a.m., New York City time, on August 16, 2004, the fifth
business day before the Expiration Time. If the Subscription Agent cannot sell
your Rights by 5:00 p.m., New York City time, on August 18, 2004, the third
business day before the Expiration Time, the Subscription Agent will hold your
Rights Certificate for pick up by you at the Subscription Agent's hand delivery
address provided above. We encourage you to review the discussion in the
Prospectus under the heading "The Rights Offering -- Method of Transferring and
Selling Rights -- Sales of Rights Through the Subscription Agent."

            (d) Sale of Less than All Unexercised Rights Through the
Subscription Agent. You may have your Rights Certificate divided into Rights
Certificates of appropriate denominations by following the instructions in
Paragraph 5 below. The Rights Certificate evidencing the number of unexercised
Rights you intend to sell can then be sold by following the instructions in
Paragraph 4(c). IF THE SUBSCRIPTION AGENT SELLS ANY OF YOUR RIGHTS, SUCH RIGHTS
WILL BE DEEMED TO HAVE BEEN SOLD AT THE WEIGHTED AVERAGE SALE PRICE OF ALL
RIGHTS SOLD BY THE SUBSCRIPTION AGENT. Promptly following the Expiration Time,
the Subscription Agent will send the holder a check for the net proceeds from
the sale of any Rights sold. The Subscription Agent's obligation to execute sell
orders is subject to its ability to find buyers for the Rights. NO ASSURANCE CAN
BE GIVEN THAT A MARKET WILL DEVELOP OR BE MAINTAINED FOR THE RIGHTS OR THAT THE
SUBSCRIPTION AGENT WILL BE ABLE TO SELL ANY RIGHTS. You must have your order to
sell your Rights to the Subscription Agent before 11:00 a.m., New York City
time, on August 16, 2004, the fifth business day before the Expiration Time. If
the Subscription Agent cannot sell your Rights by 5:00 p.m., New York City time,
on August 18, 2004, the third business day before the Expiration Time, the
Subscription Agent will hold your Rights Certificate for pick up by you at the
Subscription Agent's hand delivery address provided above. We encourage you to
review the discussion in the Prospectus under the heading "The Rights Offering
-- Method of Transferring and Selling Rights -- Sales of Rights Through the
Subscription Agent."

5. TO HAVE A RIGHTS CERTIFICATE DIVIDED INTO SMALLER DENOMINATIONS.

            Send your Rights Certificate, together with complete separate
instructions (including specification of the denominations into which you wish
your Rights to be divided), signed by you, to the Subscription Agent, allowing a
sufficient amount of time for new Rights Certificates to be issued and returned
so that they can be used prior to the Expiration Time. Alternatively, you may
assign your unexercised Rights to a bank or broker to effect such actions on
your behalf. Your signature must be guaranteed by an Eligible Institution if any
of the new Rights Certificates are to be issued in a name other than that in
which the old Rights Certificate was issued. Rights Certificates may not be
divided into fractional Rights, and any instruction to do so will be rejected.
As a result of delays in the mail, the time of the transmittal, the necessary
processing time and other factors, you or your transferee may not receive such
new Rights Certificate(s) in time to enable the Rightsholder to complete a sale,
exercise or transfer by the Expiration Time. Neither the Company nor the
Subscription Agent will be liable to either a transferor or transferee for any
such delays.

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6. EXECUTION.

            (a) Execution by Registered Holder(s). The signature on the Rights
Certificate must correspond with the name of the registered holder exactly as it
appears on the face of the Rights Certificate without any alteration or change
whatsoever. If the Rights Certificate is registered in the names of two or more
joint owners, all of such owners must sign. Persons who sign the Rights
Certificate in a representative or other fiduciary capacity must indicate their
capacity when signing and, unless waived by the Company in its sole and absolute
discretion, must present to the Subscription Agent satisfactory evidence of
their authority to so act.

            (b) Execution by Person Other than Registered Holder. If the Rights
Certificate is executed by a person other than the holder named on the face of
the Rights Certificate, proper evidence of authority of the person executing the
Rights Certificate must accompany the same unless, for good cause, the Company
dispenses with proof of authority, in its sole and absolute discretion.

            (c) Signature Guarantees. Your signature must be guaranteed by an
Eligible Institution if you wish to transfer all or less than all of your
unexercised Rights to a designated transferee or to a broker, dealer or nominee
for sale on your behalf as specified in Paragraphs 4(a) and/or 4(b), or to have
the Subscription Agent sell less than all of your unexercised Rights, as
specified in Paragraph 4(d).

7. METHOD OF DELIVERY.

            The method of delivery of Rights Certificates and payment of the
Subscription Price to the Subscription Agent will be at the election and risk of
the Rightsholder, but, if sent by mail, it is recommended that they be sent by
registered mail, properly insured, with return receipt requested, and that a
sufficient number of days be allowed to ensure delivery to the Subscription
Agent and the clearance of any checks sent in payment of the Subscription Price
prior to the Expiration Time.

8.  SPECIAL PROVISIONS RELATING TO THE DELIVERY OF RIGHTS THROUGH THE DEPOSITORY
    TRUST COMPANY.

            If you are a broker, a dealer, a trustee or a depositary for
securities who holds shares of our Common Stock for the account of others as a
nominee holder, you may, upon proper showing to the Subscription Agent, exercise
your beneficial owners' Basic Subscription Privilege and Oversubscription
Privilege through The Depository Trust Company ("DTC"). You may exercise Rights
held through DTC ("DTC Exercised Rights") through DTC's PSOP Function on the
"agents subscription over PTS" procedures and instructing DTC to charge the
applicable DTC account for the Subscription Price and to deliver such amount to
the Subscription Agent. DTC must receive the subscription instructions and
payment for the new shares by the Expiration Time unless guaranteed delivery
procedures are utilized.

9. SUBSTITUTE FORM W-9.

            Each Rightsholder who elects to sell or transfer the Rights through
the Subscription Agent should provide the Subscription Agent with a correct
Taxpayer Identification Number ("TIN") and, where applicable, certification of
such Rightsholder's exemption from backup withholding on Substitute Form W-9.
Each foreign Rightsholder who elects to sell or transfer the Rights through the
Subscription Agent should provide the Subscription Agent with certification of
foreign status on Substitute Form W-8. Copies of Substitute Form W-8 and
additional copies of Form W-9 may be obtained upon request from the Subscription
Agent at the address, or by calling the telephone number, indicated above.
Failure to provide the information on the form may subject such holder to 28%
federal income tax withholding with respect to funds to be remitted to
Rightsholders in respect of Rights sold by the Subscription Agent.

                                       5EX-10.48: LICENSE AGREEMENT

 

CONFORMED COPY

Exhibit 10.48

VERNALIS DEVELOPMENT LIMITED

- and -

ENDO PHARMACEUTICALS INC.

LICENSE AGREEMENT

	 	 	The confidential portions of this exhibit have been filed
separately with the Securities and Exchange Commission pursuant to
a confidential treatment request in accordance with Rule 24b-2 of
the Securities and Exchange Act of 1934, as amended. REDACTED
PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.

- 1 -

 

THIS LICENSE AGREEMENT is made the 14thday of July, 2004

BETWEEN:

	(1)	 	VERNALIS DEVELOPMENT LIMITED whose principal place of business is at
Oakdene Court, 613 Reading Road, Winnersh, Wokingham, RG41 5UA, England
(“Vernalis”); and
	 
	(2)	 	ENDO PHARMACEUTICALS INC. whose principal place of business is at 100,
Painters Drive, Chadds Ford, PA 19317, USA (“Endo”).

WHEREAS:

(A) Endo is one of the world’s leading specialty pharmaceutical companies with
particular expertise in launching, marketing, selling and managing the
lifecycle of certain specialty pharmaceutical products.

(B) Vernalis owns the rights to the compound called frovatriptan and the
marketed product called FROVA, which has initial product registrations for
acute migraine and is undergoing further trials in respect of menstrual
associated migraine, and has agreed to license those rights to Endo on the
terms of the license and co-promotion rights set out in this document.

IT IS NOW AGREED AS FOLLOWS:

	1.	 	DEFINITIONS

	1.1	 	In this Agreement the following definitions shall apply and
initially capitalized terms shall have the meanings ascribed to them
elsewhere in this Agreement:

	1.1.1	 	“Affiliate” - any company, partnership or
other business entity which Controls, is Controlled by or is
under common Control with either Party.
	 
	1.1.2	 	“Agreement” - this document including any and
all schedules, appendices and other addenda to it as may be
added and/or

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	 	 	amended from time to time in accordance with the provisions
of this Agreement.
	 
	1.1.3	 	“Annual Marketing Plan and Budget” – the
document delivered pursuant to Clause 6.1.2.
	 
	1.1.4	 	“API Supply Agreement” - the supply agreement
between Vernalis and Evotec OAI Limited (then named Oxford
Asymmetry International plc), dated December 28, 2000.
	 
	1.1.5	 	“Business Day” - 9.00 am to 5.00 pm local time
on a day other than a Saturday, Sunday, bank or other public
holiday in England and Wales or USA.
	 
	1.1.6	 	“Change of Control” – the occurrence of a
tender offer, stock purchase, other stock acquisition,
merger, consolidation, recapitalization, reverse split, sale
or transfer of assets or other transaction, as a result of
which any person, entity or group, other than an Affiliate of
Endo or Vernalis, as the case may be, (a) becomes the
beneficial owner, directly or indirectly, of securities of
Endo or Vernalis representing more than 50% of the ordinary
shares of Endo or Vernalis, as the case may be, or
representing more than 50% of the combined voting power with
respect to the election of directors, (b) obtains the ability
to appoint a majority of the board of directors of Endo or
Vernalis, as the case may be, or (c) obtains the ability to
direct the operations or management of Endo or Vernalis, as
the case may be.
	 
	1.1.7	 	“Clinical Study” - any clinical trial and/or
other study on Product carried out by or on behalf of Endo
including, without limitation, any study carried out in order
to obtain a label extension or other new Marketing
Authorisation for the Product in the Territory (but for the
avoidance of doubt always excluding 

- 3 -

 

	 	 	the MAM & Paediatric
Development Program) including, without limitation, any clinical trial or other study
carried out for marketing purposes.
	 
	1.1.8	 	“Closing Date” – the second Business Day after
the date upon which the conditions precedent in Clauses 2.1,
2.5, 2.6 and 2.7 are satisfied.
	 
	1.1.9	 	“Combination Product” – a product in which the
Compound is an active ingredient and in relation to which a
Marketing Authorisation has been granted which also:
	 
	 	 	   ***
	 
	 	 	and such other pharmaceutical product, active ingredient or
active administration or delivery technology, when used as
described above, shall be referred to individually or
collectively as “Combined Product”.
	 
	1.1.10	 	“Commercialisation”,
“Commercialising”, or “Commercialise”
– all activities relating to the import, promotion,
marketing, detail, distribution, storage, handling, offering
for sale and sale of the Product.
	 
	1.1.11	 	“Commercially Reasonable Efforts” – efforts and resources
commonly used in the pharmaceutical industry for a product
owned by a pharmaceutical company of similar size and
resources or to which it has rights, which product is at a
similar stage in its development or product life and is of
similar market potential and taking into account the patent
and other proprietary position of the product.
	 
	1.1.12	 	“Commitment” – the amount to be expended in a specified
period by Endo, directly or indirectly, in relation to (i)
the clinical and education aspects of the Product in the
Territory,

- 4 -

 

	 	 	including (a) Costs associated with Phase IV
clinical trials and (b) Costs
relating to clinical and educational promotional
activities; (ii) advertising the Product in the Territory;
(iii) marketing, selling and promoting the Product in the
Territory; (iv) public relations in relation to Product in
the Territory, together in each case with Costs relating to
the same accrued in a period and payable in a subsequent
period and (v) indirect selling, general and administrative
costs and expenses allocated to marketing and selling the
Product.
	 
	1.1.13	 	“Competent Authority” – any national or local agency,
authority, department, inspectorate, minister, ministry
official, parliament or public or statutory person (whether
autonomous or not) of any government of any country having
jurisdiction over either any of the activities contemplated
by this Agreement or over the Parties.
	 
	1.1.14	 	“Compound” – the compound known as frovatriptan being
R(+)-6-carboxamido-3-N-methylamino-1, 2, 3, 4
tetrahydrocarbazole succinate (1:1) monohydrate and
“Compound”, including any physiologically acceptable salts
thereof.
	 
	1.1.15	 	“Confidential Information” – in the case of obligations of
Endo in relation to Confidential Information, shall mean
Vernalis IP and, in the case of obligations of Vernalis in
relation to Confidential Information shall mean Endo IP and,
in the case of both Vernalis and Endo, shall mean all trade
secret and/or confidential information relating to business
affairs not limited to development and Commercialisation
plans, marketing plans, financial forecasts and projections,
of the other supplied or otherwise made available to them or
coming into their possession in relation to the performance
of this Agreement.

- 5 -

 

	1.1.16	 	“Control” (including variations such as “Controls” or
“Controlled by”) – the ownership, either directly or
indirectly, of
more than 50% of the issued share capital or any other
comparable equity or ownership interest with respect to a
business entity or the legal power to direct or cause the
direction of the general management and policies of the
Party in question.
	 
	1.1.17	 	“Co-Promote” - the simultaneous Detailing of a Product by
Vernalis field sales force representatives and Endo field
sales force representatives.
	 
	1.1.18	 	“Co-Promotion Option” - Vernalis’ option to Co-promote
Product as set forth in Clauses 9.1 and 9.2.
	 
	1.1.19	 	“Copyright” - all (if any) right, title and interest of
Vernalis in copyright subsisting in the Marketing Materials.
	 
	1.1.20	 	“Costs” – Actual out-of-pocket costs and expenses.
	 
	1.1.21	 	“Cost per Detail” –Endo’s incremental Cost for the
engagement of a sales representative for Specialty Detailing
in any particular Year, excluding training, meetings, etc.,
which in 2004 is USD *** and which in subsequent Years will
be USD ***, adjusted for CPI, divided by ***.
	 
	1.1.22	 	“Cover” (including variations such as “Covered”, “Coverage”
or “Covering”) - the making, using or Commercialisation of a
given product in a Commercialised form that would infringe a
Valid Claim of a Patent Right in the absence of a license
under such Patent Right. The determination of whether a
product is so Covered by a particular Patent Right shall be
made on a country-by-country basis.
	 
	1.1.23	 	“CPI” – the consumer price index for the previous twelve
months published by the U.S. Department of Labor.

- 6 -

 

	1.1.24	 	“DDMAC” – the FDA’s Division of Drug Marketing, Advertising
and Communication.
	 
	1.1.25	 	“Detail” (including variations such as “Detailing”)- direct
face to face contact between a field sales force
representative and medical professional with prescribing or
dispensing authority for the purpose of discussing
information about a pharmaceutical product(s).
	 
	1.1.26	 	“Disclosing Party” - the Party which discloses Confidential
Information to the other Party.
	 
	1.1.27	 	“Documents” - reports, research notes, charts, graphs,
comments, computations, analyses, recordings, photographs,
paper, notebooks, books, files, ledgers, records, tapes,
discs, diskettes, CD-ROM, computer programs and documents
thereof, computer information storage means, samples of
material, other graphic or written data and any other media
on which Know How can be permanently stored.
	 
	1.1.28	 	“Domain Names” - the URLs www.frova.com, www.frova.org,
www.frova.us, www.frova.net, www.frova.info,
www.frovatriptan.com and www.frovatriptan.us (and any
equivalent addresses for any successor electronic address
system thereto).
	 
	1.1.29	 	“Elan Asset Transfer Agreement” - the agreement relating to
the North American Frova Assets of Elan between Elan and
Vernalis, dated May 18, 2004.
	 
	1.1.30	 	“Elan Group” – the group of companies the parent of which
is Elan Corporation plc, a company incorporated in Ireland
(registered no 30356) whose registered office is at Lincoln
House, Lincoln Place, Dublin 2, Ireland.

- 7 -

 

	1.1.31	 	“Encumbrance” - a mortgage, charge, pledge, lien, option,
restriction, right of first refusal, right of pre-emption,
third party right or interest, other encumbrance or security
interest of any kind, or another type of preferential
arrangement (including, without limitation, a title transfer
or retention arrangement) having similar effect.
	 
	1.1.32	 	“Endo Copyright” – copyright or any other intellectual
property analogous to copyright including any rights in
designs subsisting or relating to any Documents, designs or
other embodiments of the trade dress for the Product, any
form of advertisement in whatever media, marketing materials,
samples or other promotional gifts or any other materials in
which such rights are capable of subsisting as a matter of
law in all cases which are generated by or upon behalf of
Endo or its Affiliates during the period of this Agreement in
connection with the advertising, promotion, marketing or sale
or other Commercialisation of Product.
	 
	1.1.33	 	“Endo IP” - Endo Patent Rights, Endo Know How, Endo
Copyrights, Endo Materials and Endo Trade Marks.
	 
	1.1.34	 	“Endo Know How” - Know How owned by or licensed to Endo or
its Affiliates (other than from Vernalis) or acquired by Endo
or its Affiliates during the period of this Agreement that is
necessary or useful for or which otherwise relates to the
development or Commercialisation of Product, including Know
How relating to Clinical Studies and Product Enhancements.
	 
	1.1.35	 	“Endo Materials” - Materials owned by or licensed to Endo
or its Affiliates (other than from Vernalis) or acquired by
Endo or its Affiliates during the term of this Agreement that
are necessary or useful for or which otherwise relate to the
development or

- 8 -

 

	 	 	Commercialisation of Product, including Materials used in
Clinical Studies or being or relating to Product
Enhancements.
	 
	1.1.36	 	“Endo Patent Rights” - Patent Rights owned by or licensed
to Endo or its Affiliates (other than from Vernalis) which
have claims which Cover Product or the making, using or
Commercialisation of the Product or that Cover Product
Enhancements or the making, using or Commercialisation of
Product Enhancements.
	 
	1.1.37	 	“Endo Trade Marks” – (i) the name and mark ENDO and the
associated Endo logo, and (ii) any other trade marks other
than the Vernalis Trade Marks used in relation to Products
owned by or licensed to Endo during the term of this
Agreement which are the subject of Clause 13.1.
	 
	1.1.38	 	“Estimated Commitment” - the estimated commitment set out
in Schedule 1.
	 
	1.1.39	 	“Estimated Detailing Effort” – the estimated Detailing
effort specified in Schedule 5 for each Year specified in
Schedule 5.
	 
	1.1.40	 	“Event of Default” –  as defined in the Loan Agreement.
	 
	1.1.41	 	“FDA” - the United States Food and Drug Administration or
any successor agency thereto.
	 
	1.1.42	 	“Force Majeure” - in relation to either Party, any event or
circumstance which is beyond the reasonable control of that
Party, which event or circumstance that Party could not
reasonably be expected to have taken into account at the date
of this Agreement and which results in or causes the failure
of that Party to perform any or all of its obligations under
this Agreement, including acts of God, lightning, fire,
storm, flood, earthquake, accumulation of snow or ice, lack
of water arising

- 9 -

 

	 	 	from weather or environmental problems, strike, lockout or
other industrial or student disturbance, act of the public
enemy, war declared or undeclared, threat of war, terrorist
act, blockade, revolution, riot, insurrection, civil
commotion, public demonstration, sabotage, act of
vandalism, energy or other supplies, explosion, fault or
failure of plant or machinery (which could not have been
prevented by Good Industry Practice), or Legal Requirement
governing either Party, provided that lack of funds in and
of itself shall not be interpreted as a cause beyond the
reasonable control of that Party.
	 
	1.1.43	 	“Formal Presentation” – an oral presentation with
supporting written evidence of the outcome of a clinical
study given at a time before the formal written report has
been completed but which contains a final assessment of the
results and conclusions of such study.
	 
	1.1.44	 	“FTE” – the equivalent of the work of a scientist or other
project managerial professional, full time for one year,
which equates to *** hours per day, *** days per week,
excluding national holidays and reasonable vacation being a
total of *** days or *** hours per year of work.
	 
	1.1.45	 	“GAAP” – generally accepted accounting principles from time
to time current in USA.
	 
	1.1.46	 	“Generic Version” – any pharmaceutical product that is
recognized by a Regulatory Authority in the particular
country in the Territory as “AB” rated to a Product (or the
equivalent in such country) or is substitutable at the
pharmacy for a prescription written for a Product.
	 
	1.1.47	 	“GCP” - clinical practice as set out in:

- 10 -

 

	(a)	 	Directive 2001/20/EC and
Directive 2001/83/EC as well as ICH-GCP and any other
guidelines for good clinical practice for trials on
medicinal products in the European Community as
amended and applicable from time to time; and
	 
	(b)	 	US Code of Federal Regulations
Title 21, Parts 50 (Protection of Human Subjects), 56
(Institutional Review Boards) and 312 (Investigational
New Drug Applications), as may be amended from time to
time; and
	 
	(c)	 	the Declaration of Helsinki as
last amended at the 52nd World Medical Association in
October 2000 and any further amendments thereto; and
	 
	(d)	 	the equivalent law or regulation
in any country in the Territory.

	1.1.48	 	“GLP” - laboratory practice as set out in:

	(a)	 	Directive 2004/9/EC and Directive
2004/10/EC as may be amended or replaced from time to
time as well as any Rules Governing Medicinal Products
in the European Community Vol III, ISBN 92.825 9619-2
(ex OECD principles of GLP) as amended and applicable
from time to time; and
	 
	(b)	 	US Code of Federal Regulations,
Title 21, Part 58 (Good Laboratory Practice for
Nonclinical Laboratory Studies); and
	 
	(c)	 	the equivalent law or regulation
in any country in the Territory.

	1.1.49	 	“Good Manufacturing Practice” or “GMP” - manufacture in
accordance with:

- 11 -

 

	(a)	 	Directive 91/412/EEC and
Directive 2003/94/EC or any other applicable European
Community Legislation or regulation as amended and
applicable from time to time;
	 
	(b)	 	those practices in the
manufacture of pharmaceutical products that are
recognized as the current good manufacturing practices
by the FDA in accordance with FDA regulations,
guidelines, other administrative interpretations, and
rulings in connection therewith, including but not
limited to those regulations cited in 21 C.F.R. parts
210 and 211, all as they may be amended from time to
time; and
	 
	(c)	 	the equivalent law or regulation
in any country in the Territory.

	1.1.50	 	“IND” - an investigational new drug application filed with
the FDA prior to beginning clinical trials in humans or any
comparable application filed with the Regulatory Authority of
a country other than the United States prior to beginning
trials in humans in that country.
	 
	1.1.51	 	“Initial FDA Meeting” – the meeting between Vernalis and
the FDA, with Endo present (if acceptable to the FDA),
scheduled to be held on ***, with respect to the MAM &
Paediatric Development Program.
	 
	1.1.52	 	“Insolvency Event” - in relation to either Party, means any
one of the following:

	(a)	 	a notice having been issued to
convene a meeting for the purpose of passing a
resolution to wind up that Party, or such a resolution
having been passed other than a resolution for the
solvent reconstruction or reorganisation of that Party
or for the purpose of inclusion of any part of

- 12 -

 

	 	 	the share capital of that Party in the Official List
of the London Stock Exchange or in the list of the
New York Stock Exchange or quotation of the same on
the National Association of Securities Dealers
Automated Quotation System or any other
international stock exchange; or
	 
	(b)	 	a resolution having been passed
by that Party’s directors to seek a winding up order
or a petition for a winding up order having been
presented against that Party which has not been
dismissed or withdrawn within 7 days of its
presentation, or any analogous action is taken in a
jurisdiction other than England and Wales; or
	 
	(c)	 	a resolution having been proposed
by any Party to appoint an administrator, or to apply
to court for an administration order, or an
application for an administration order having been
lodged with the Court whether or not by a Party or any
step is taken pursuant to the Insolvency Act 1986,
Schedule B1 and/or the Insolvency Rules 1986 to
appoint an administrator out of court or any Party
enters administration, or any analogous action that is
taken in a jurisdiction other than England and Wales;
or
	 
	(d)	 	a receiver, administrative
receiver, receiver and manager, court appointed
receiver, interim receiver, custodian, sequestrator or
similar officer is appointed in respect of that Party
or over any part of that Party’s assets or any third
party takes steps to appoint such an officer in
respect of that Party or an encumbrancer takes steps
to enforce or enforces its security over any part of
any Party’s assets, or any analogous action that is
taken in a jurisdiction other than England and Wales;
or

- 13 -

 

	(e)	 	a moratorium comes into force in
respect of any Party or a Party’s directors resolve to
make a proposal for a voluntary arrangement or
meetings are convened for consideration of a proposal
for a voluntary arrangement made in relation to that
Party under Part I and/or Schedule A1 of the
Insolvency Act 1986, or any analogous action that is
taken in a jurisdiction other than England and Wales;
or
	 
	(f)	 	an application or proposal is
made under section 425 Companies Act 1985 (as
amended), or any analogous action that is taken in a
jurisdiction other than England and Wales; or
	 
	(g)	 	a step or event having been taken
or arisen outside the United Kingdom which is similar
or analogous to any of the steps or events listed at
(a) to (f) above in the case of Endo under the US
Bankruptcy Code (including a filing under Chapter 11
proceedings) or other relevant laws of the USA which,
in the case of a filing made against Endo, shall not
have been appealed within 7 days of having been lodged
or such an order shall have been made and not
dismissed within thirty (30) days thereafter; or
	 
	(h)	 	a Party takes any step, whether
under the Insolvency Act 1986 or otherwise (including
starting negotiations), with a view to readjustment,
rescheduling or deferral of any part of that Party’s
indebtedness, or proposes or makes any general
assignment, composition or arrangement with or for the
benefit of all or some of that Party’s creditors or
makes or suspends or threatens to suspend making
payments to all or some of that Party’s creditors or
the Party submits to any type of voluntary
arrangement, or

- 14 -

 

	 	 	any analogous action that is taken in a jurisdiction
other than England and Wales; or
	 
	(i)	 	where that Party is resident in
the United Kingdom it is unable to pay or has no
reasonable prospect of being able to pay its debts
within the meaning of Section 123 Insolvency Act 1986,
but disregarding references in the Insolvency Act 1986
to proving this inability to the court’s satisfaction,
or any analogous event that is taken in a jurisdiction
other than England and Wales.

	1.1.53	 	“Interim Period” – the period between the Closing Date and
the date of Re-Launch in the USA as notified by Endo to
Vernalis under Clause 6.1.1.
	 
	1.1.54	 	“Inventory Statement” – the statement of the quantity and
value of Stock at the Closing Date agreed by Vernalis and
Endo (or determined) in accordance with Schedule 2.
	 
	1.1.55	 	“Know How” - technical and other information which is not
in the public domain, including information comprising or
relating to concepts, discoveries, data, designs, formulae,
ideas, inventions, methods, models, assays, research plans,
procedures, designs for experiments and tests and results of
experimentation and testing (including results of research or
development), processes (including manufacturing processes,
specifications and techniques), laboratory records, chemical,
pharmacological, toxicological, clinical, analytical and
quality control data, trial data, case report forms, data
analyses, reports, manufacturing data, information contained
in submissions to and information from ethical committees and
Regulatory Authorities, data concerning pricing or
reimbursement including discounts and rebates to particular
customers, data concerning dealings with managed and similar
healthcare providers including lists of

- 15 -

 

	 	 	customers and key prescribers, data concerning trade
inventory levels, data concerning returns and chargebacks
and any other data covering the supply chain, and summaries
of any of the foregoing. Know How includes Documents
containing Know How, including but not limited to any
rights including trade secrets, copyright, database or
design rights protecting such Know How. The fact that an
item is known to the public shall not be taken to preclude
the possibility that a compilation including the item,
and/or a development relating to the item, is not known to
the public.
	 
	1.1.56	 	“Legal Requirement” - any present or future law,
regulation, directive, instruction, direction or rule of any
Competent Authority or Regulatory Authority including any
amendment, extension or replacement thereof which is from
time to time in force.
	 
	1.1.57	 	“Loan Agreement” – the loan agreement entered into by the
Parties on the Signature Date.
	 
	1.1.58	 	“MAM” - menstrual associated migraine.
	 
	1.1.59	 	“MAM & Paediatric Development Program” – the program of
work to be conducted and managed by Vernalis hereunder for
the clinical development program of the Product for purposes
of gaining an approved indication for use in MAM and leading
to Marketing Authorisation for the same and for those
paediatric studies required by FDA which program is set out
in Schedule 3 hereto.
	 
	1.1.60	 	“MAM Product” – the Product with a Marketing Authorisation
for MAM.
	 
	1.1.61	 	“MAM Product IND” - the IND number IND 48,933
(encompassing, inter alia, the identification to study the
use of

- 16 -

 

	 	 	frovatriptan for the prevention of menstrually-associated
migraine) filed in respect of the Product pursuant to
C.F.R. Parts 312 of the U.S. Food, Drug and Cosmetic Act
1938.
	 
	1.1.62	 	“MAM Product Launch” – the commercial launch of MAM Product
in USA.
	 
	1.1.63	 	“Managed Care Agreements and Assigned Contracts” – the
agreements set out in Schedule 4.
	 
	1.1.64	 	“Marketing Authorisation” - any approval required from a
Regulatory Authority to market and sell a Product in any
country of the Territory including any approval for a label
extension or new indication and also including any pricing or
reimbursement approval required or commercially desirable.
	 
	1.1.65	 	“Marketing Materials”- any packaging, advertising and
promotional literature and materials in each case used in the
advertising and promotion of the Product in the Territory in
Vernalis’ possession at the Closing Date.
	 
	1.1.66	 	“Material” - any chemical or biological substance other
than the Compound including any:

	(a)	 	organic or inorganic element;
	 
	(b)	 	drug or pro-drug; and
	 
	(c)	 	assay or reagent.

	1.1.67	 	“Monies” – all monies due and outstanding to Endo from
Vernalis under the Loan Agreement from time to time.
	 
	1.1.68	 	“NDA” - a new drug license application filed with the FDA
to obtain Marketing Authorisation for a pharmaceutical
product in the USA, or any comparable application filed with
the

- 17 -

 

	 	 	Regulatory
Authorities in or for a country or group of countries other
than the USA to obtain Marketing Authorisation for a
pharmaceutical product in or for that country or within
that group of countries.
	 
	1.1.69	 	“Net Sales” - the gross amount invoiced for sales of
Product(s), in arm’s length sales by Endo or its Affiliates,
agents and distributors to Third Parties, less the following
deductions from such gross amounts which are actually
incurred, allowed, accrued or specifically allocated:

	(i)	 	credits, price
adjustments or allowances for damaged products,
returns, recalls or rejections of such
products;
	 
	(ii)	 	cash and quantity
discounts, allowances and credits and other
customary discounts (other than those granted
at the time of invoicing which have already
been included in the gross amount invoiced) or
retroactive price reductions;
	 
	(iii)	 	chargeback
payments and rebates (or the equivalent
thereof) granted to group purchasing
organizations, managed health care
organizations or to federal, state/provincial,
local and other governments, including their
agencies, or to trade customers;
	 
	(iv)	 	any freight charges
invoiced by Endo, its Affiliates, its agents or
distributors, including postage, shipping,
insurance and other transportation charges; and
	 
	(v)	 	sales taxes,
value-added taxes (to the extent not refundable
in accordance with applicable law),

- 18 -

 

	 	 	and excise
taxes, tariffs and duties, and other taxes
directly related to the sale (but not
including taxes assessed against the income
derived from such sale).

	 	 	“Net Sales” shall not include any provision for unpaid
amounts owed by Third Party purchasers of the Products or
sales among the Parties and their respective Affiliates or
distributors.
	 
	 	 	Such amounts shall be determined from the books and records
of Endo maintained in accordance with GAAP consistently
applied.
	 
	 	 	In the event that Product is sold as a Combination Product
in any country of the Territory, the Net Sales from the
Combination Product in that country for the purposes of
determining royalty payments shall be determined by ***.
	 
	 	 	In the event that the average sale price of the Product in
that country can be determined but the average sale price
of the Combined Product in that country cannot be
determined, or the average sale price of the Combined
Product in that country can be determined but the average
sale price of the Product in that country cannot be
determined, ***.
	 
	1.1.70	 	“Party” or “Parties” - Vernalis and/or Endo.
	 
	1.1.71	 	“Patent Rights” - patent applications and patents, utility
certificates, improvement patents and models and certificates
of addition and all foreign counterparts of them in all
countries, including any divisional applications and patents,
refilings, renewals, re-examinations, continuations,
continuations-in-part, patents of addition, extensions,
(including patent term extensions,) reissues, substitutions,
confirmations, registrations, revalidations, and any
equivalents of the foregoing in any and all countries of or
to any of them, as well as any supplementary

- 19 -

 

	 	 	protection certificates and equivalent protection rights in
respect of any of them.
	 
	1.1.72	 	“PCP” – the Detailing of Product by sales personnel to
primary care physicians.
	 
	1.1.73	 	“Person” – an individual or a corporation, partnership,
association, trust or any other entity or organization,
including a government or political subdivision or an agency
or instrumentality thereof.
	 
	1.1.74	 	“Phase III Clinical Trials” - large scale, pivotal
multicentre, human clinical trials conducted in a sufficient
number of patients to establish safety or efficacy in the
particular claim and indication tested and required to obtain
Marketing Authorisation.
	 
	1.1.75	 	“Primary Detail” – a full Product presentation presented in
the first position during a Detail in which key Product
attributes are verbally presented in a balanced manner.
	 
	1.1.76	 	“Product(s)” - any pharmaceutical product in which the
Compound is an active ingredient and in relation to which
Marketing Authorisation has been granted. For the avoidance
of doubt it is declared and agreed that this definition
includes (i) any form of the Product Commercialised by Endo
hereunder regardless of indication which includes all line
extensions of the Product (including those that provide for
different dosage strengths); and (ii) any Product
Enhancements. If a pharmaceutical product can be marketed
and sold without pricing or reimbursement approval nothing in
this definition requires such approval for it to be
classified as a Product for the purposes of this Agreement.
	 
	1.1.77	 	“Product Enhancement” - any improvements made after the
Closing Date in the Product’s formulation or delivery, any
and

- 20 -

 

	 	 	all line extensions of the Product (including those that
provide for different dosage strengths), and any and all
Combination Products and any over-the-counter version of
the Product.
	 
	1.1.78	 	“Product Registration”-

	(a)	 	the NDA number NDA 021006 filed
in respect of the Product pursuant to 21 C.F.R. Part
314 of the U.S. Food, Drug and Cosmetic Act 1938; and
	 
	(b)	 	the New Drug Submission control
number 065221 made pursuant to Division 8 of the Food
and Drugs Act Regulations (Canada); and
	 
	(c)	 	all supplements or amendments to
any of the foregoing.

	1.1.79	 	“Product Registration Information”-

	(a)	 	the complete NDA, MAM Product IND
and New Drug Submission files referred to in or served
in relation to the Product Registration or MAM Product
IND; and
	 
	(b)	 	any and all regulatory
correspondence between Elan Group and any Regulatory
Authority in the Territory in relation to the Product
Registration, MAM Product IND or the Product; and
	 
	(c)	 	all dossiers, data, reports and
other material in written or electronic form to the
extent relating to the Product Registration, MAM
Product IND or the Product which have been filed with
any Regulatory Authority.

	1.1.80	 	“Quarter” - each period of three months ending on 31 March,
30 June, 30 September or 31 December and “Quarterly” shall be
construed accordingly.

- 21 -

 

	1.1.81	 	“Recipient Party” - the Party which receives Confidential
Information from the other Party.
	 
	1.1.82	 	“Registered Trademarks” - U.S. Federal Trade Mark
Registration No. 2,828,476 registered on March 30, 2004 and
Canadian trade mark application no. 1123447, each for
‘FROVA’.
	 
	1.1.83	 	“Regulatory Authority” - any national, supranational (e.g.,
the European Commission, the Council of the European Union,
the European Agency for the Evaluation of Medicinal
Products), regional, state or local regulatory agency,
department, bureau, commission, council or other governmental
entity including the FDA, in each country involved in the
granting of Marketing Authorisation for the Product.
	 
	1.1.84	 	“Re-Launch” - the first invoiced commercial sale by Endo or
its Affiliates of a Product in each country of the Territory
***.
	 
	1.1.85	 	“Re-Launch Date” – the date of Re-Launch in each country of
the Territory.
	 
	1.1.86	 	“Representatives” - each of the Parties, their Affiliates
or each of their directors, officers, employees, agents and
advisors.
	 
	1.1.87	 	“Safety Agreement” - a safety and data exchange agreement
between the Parties dealing with each of the Parties
responsibilities in respect of pharmacovigilance.
	 
	1.1.88	 	“Secondary Detail” – a full Product presentation not
presented in the first position during a Detail in which key
Product attributes are verbally presented in a balanced
manner.

- 22 -

 

	1.1.89	 	“Security Agreement” – the Security Agreement to be entered
into between the Parties to which reference is made in the
Loan Agreement.
	 
	1.1.90	 	“Signature Date” – the date upon which this Agreement is
executed by both of the Parties to it.
	 
	1.1.91	 	“Specialty Detailing” – the Detailing of Product by
specialty sales personnel to neurologists.
	 
	1.1.92	 	“Specialty Sales Force” – sales personnel employed by Endo
for Specialty Detailing, including Vernalis Specialty Sales
Personnel.
	 
	1.1.93	 	“Steering Committee” or “SC” - the committee established
pursuant to Clause 7.1.
	 
	1.1.94	 	“Stock” - the stock of:

	(a)	 	Frova 2.5mg Tab, 9 Count Blister
with an expiration date on or after the *** month
anniversary of the Closing Date;
	 
	(b)	 	Those certain *** Frova 2.5 mg
Tab 2 Count Blisters with an expiration date on or
after *** for use as samples;
	 
	(c)	 	***;
	 
	(d)	 	***; and
	 
	(e)	 	***, subject to the terms set
forth in Schedule 2,

	 	in each case held by or on behalf of
Vernalis at the Closing Date, listed in the Inventory
Statement and valued at Cost, excluding in each case
inventory which is not good, merchantable and suitable
for sale.

- 23 -

 

	1.1.95	 	“Supply and Technical Agreements” -

	(a)	 	the API Supply Agreement; and

	(b)	 	the Frovatriptan supply agreement
between Vernalis and Galen Limited, dated January 1,
2002; and
	 
	(c)	 	the other supply and technical
agreements listed in Schedule 6.

	1.1.96	 	“Territory” - Canada, Mexico, the United States of America,
its territories and possessions and the Commonwealth of
Puerto Rico.
	 
	1.1.97	 	“Territory Study” – a clinical trial and/or other study on
Product which is conducted by Vernalis in the Territory, as
specified in Clause 8.10.
	 
	1.1.98	 	“Third Party” – any Person who or which is neither a Party
nor an Affiliate of a Party.
	 
	1.1.99	 	“Transitional Services Agreement” - the transitional
services agreement made between Vernalis and certain
companies in the Elan Group dated May 18, 2004.
	 
	1.1.100	 	“UK Affiliate” – an Affiliate of Vernalis, then and
thereafter existing, incorporated or otherwise organized
under the laws of England and Wales or Scotland.
	 
	1.1.101	 	“Unregistered Trade Marks” – Vernalis’ right, title and
interest in the name and mark FROVA and in the logo
reproduced in Schedule 7 (The Frova Logo) in the Territory
(in each case).
	 
	1.1.102	 	“USD” - United States Dollars.

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	1.1.103	 	“Use Suggestion” – any suggestion by Vernalis to Endo for
a new clinical use or indication for Product (including
Combination Product) which suggestion ***, provided that Endo
provides evidence of such consideration or contemplation
within 10 days of Endo’s receipt of such Use Suggestion from
Vernalis.

	 
	1.1.104	 	“Valid Claim” - either:

	(a)	 	a claim of an issued and
unexpired patent included within Patent Rights, which
has not been held permanently revoked, unenforceable
or invalid by a decision of a court or other
governmental agency of competent jurisdiction,
unappealable or un-appealed within the time allowed
for appeal, and which has not been admitted to be
invalid or unenforceable through reissue or disclaimer
or otherwise; or
	 
	(b)	 	a claim of a pending patent
application included within Patent Rights which claim
was filed and is being prosecuted in good faith and
has not been abandoned or finally disallowed without
the possibility of appeal or refiling of the
application.

	1.1.105	 	“Vernalis IP” - the Vernalis Patent Rights, Vernalis Know
How, Vernalis Materials and Vernalis Trade Marks whether any
of the foregoing are in existence as of the Closing Date or
subject to the provisions of Clauses 8.11 and 8.12 come into
existence during the term of this Agreement.
	 
	1.1.106	 	“Vernalis Know How” - Know How owned by or licensed to
Vernalis either at the Closing Date or subject to the
provision of Clauses 8.11 and 8.12 during the term of this
Agreement (but excluding for the purposes of this definition
the Product Registration and Product Registration
Information) that

- 25 -

 

	 	 	relates to (i) the Compound or its
development or previous Commercialisation in the Territory;
(ii) Commercialisation outside of the Territory to the extent
Vernalis has rights to license the same; (iii) the MAM &
Paediatric Development Program; and (iv) Product
Enhancements, to the extent Vernalis has rights to license
the same.
	 
	1.1.107	 	“Vernalis Materials” - Materials owned by or licensed to
Vernalis or its Affiliates (other than from Endo) at the
Closing Date or subject to the provisions of Clauses 8.11 and
8.12 acquired by Vernalis or its Affiliates during the period
of this Agreement which are Materials that are necessary or
useful for or which otherwise relate to the development or
Commercialisation of Product including Materials used in
clinical studies or being or relating to Product
Enhancements.
	 
	1.1.108	 	“Vernalis Patent Rights” - the Patent Rights which are
owned by or licensed to Vernalis at the Closing Date Covering
the Compound or its manufacture or use in the Territory set
out in Schedule 8 and subject to the provisions of Clauses
8.11 and 8.12, any other Patent Rights in the Territory which
are owned or become owned by or licensed to Vernalis during
this Agreement which Cover (i) the making, using or
Commercialisation of Compound or Product in the form in which
it exists at the Closing Date; and (ii) Product Enhancements,
to the extent Vernalis has rights to license the same.
	 
	1.1.109	 	“Vernalis Speciality Sales Personnel” – sales
representatives employed by Vernalis and engaged in Specialty
Detailing pursuant to the Co-Promotion Agreement.
	 
	1.1.110	 	“Vernalis Trade Marks” - (i) the Registered Trade Marks,
and (ii) the Unregistered Trade Marks.

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	1.1.111	 	“Year” – any period of twelve (12) months which ends
December 31 in each year.

	2.	 	CONDITION PRECEDENT

	2.1	 	The coming into force and effect of this Agreement is
conditional on any applicable waiting period under the Hart Scott
Rodino Anti-Trust Improvements Act 1976, as amended, and any
regulations made
thereunder (“HSR Act”) relating to the proposed licenses and
transfer of rights pursuant to this Agreement having expired or
been terminated. Promptly after the Signature Date, each of Endo
and Vernalis shall make any necessary filing under the HSR Act,
and the Parties will cooperate as necessary in coordinating such
filings. Upon such expiration or termination, and satisfaction of
the conditions set forth in Clauses 2.5, 2.6 and 2.7 below, this
Agreement shall come into full force and effect.
	 
	2.2	 	If the condition in Clause 2.1 has not been satisfied by
December 31, 2004, any Party may terminate this Agreement with
immediate effect at any time thereafter.
	 
	2.3	 	From the Signature Date until the Closing Date, Vernalis
shall:

	2.3.1	 	conduct its business with respect to the
Product in the Territory only in the ordinary course of
business, including maintaining and preserving goodwill
associated with the Product and confer with, and provide
information to, Endo on a regular basis concerning material
operational matters and the status of operations and finances
relating to the Product in the Territory;
	 
	2.3.2	 	afford to Endo employees or representatives,
reasonable access to Vernalis’ offices, properties, books and
records that relate to the Product in the Territory, and, to
the extent within Vernalis’ rights under its existing
contractual relationships, reasonable access to customers,
vendors, consultants and suppliers that relate to the Product
in the Territory, in each case during normal

- 27 -

 

	 	 	business hours,
in order that Endo may make reasonable inspections,
investigations, analyses and audits with respect to the
Product; and
	 
	2.3.3	 	promptly notify Endo in writing of (a) any
material notice or other material communication from any
Regulatory Authority that may affect the Product in the
Territory , including any notice of
violation; (b) any actions or investigations commenced or
threatened related to the Product and (c) the occurrence or
non-occurrence of any event, condition or circumstance
which would cause any representation or warranty of
Vernalis contained in this Agreement to be untrue or
inaccurate in any material respect.

	2.4	 	Within 30 days after the Signature Date, Vernalis shall
deliver to Endo, to the extent in its possession or control (and
which it is free to disclose) or otherwise available to Vernalis
given its current contractual arrangements in effect as of the
Signature Date, the following, to the extent they relate to or
affect the Product in the Territory, provided, that, delivery of the
items set forth in this Clause 2.4 shall not be a condition to the
Closing Date, and provided further that Vernalis shall use its best
efforts to obtain permission necessary to disclose any of the items
set forth in Clause 2.4 which it is not free to disclose (which, for
the avoidance of doubt, shall not require Vernalis to make any
payments for such permission):

	2.4.1	 	A list of all investigators ***;
	 
	2.4.2	 	Documentation as to all formulation work
performed to date on the Product, including by both Vernalis,
Vernalis’ Affiliates and contractors and the Elan Group;
	 
	2.4.3	 	All documentation relating to the research
grants listed on Schedule 4, including investigator-initiated
studies of which

- 28 -

 

	 	 	Vernalis is aware;
	 
	2.4.4	 	Copies of all Marketing Materials developed
prior to and since the Product’s initial launch, whether or
not actually used to market the Product;
	 
	2.4.5	 	Copies of all DDMAC correspondence relating to
the marketing or sale of the Product prior to and since the
initial launch of
Product;
	 
	2.4.6	 	Lists of prescribers, including physicians,
nurse practitioners, physician assistants, pharmacies,
hospitals and other organizations, to which Product has been
Detailed, including any lists for segmentation;
	 
	2.4.7	 	Report of sampling activity by physician or
healthcare provider including units distributed;
	 
	2.4.8	 	Copies of all Managed Care Agreements,
Assigned Contracts and Non-Assignable Contracts;
	 
	2.4.9	 	A list of all trade customers (retail,
wholesale and other) and any applicable rebates, discounts,
or administrative payments for each customer and sales and
unit history by lot number since the initial launch of the
Product in the Territory;
	 
	2.4.10	 	Updated sales, returns and rebate reports;
	 
	2.4.11	 	Updated inventory reports showing WIP, API, finished
product and samples;
	 
	2.4.12	 	Copies of any safety agreements to which Vernalis is a
party with respect to the Product; and
	 
	2.4.13	 	Copies of any purchase orders from Elan or Vernalis to the
Sharp Corporation in the 12 months prior to the Signature
Date.

- 29 -

 

	2.5	 	On or before the Closing Date, Vernalis shall ***.
	 
	2.6	 	On or before the Closing Date, Vernalis shall deliver to Endo
a report of “best price” (as defined under the Social Security Act,
42 U.S.C. Section 1396r-8(c)(1)(c)) and any other pricing offered to
a governmental entity for the Product.
	 
	2.7	 	Effective as of the Closing Date, the Parties shall have
entered into a
Safety Agreement, in the form agreed pursuant to Clause 3.6.

	3.	 	LICENSE

	3.1	 	Subject to (i) Vernalis’ right to conduct or have conducted
the MAM & Paediatric Development Program, (ii) Vernalis’ right to
conduct a Territory Study and (iii) Vernalis’ right to co-promote
under Clause 9 and Schedule 10, and in consideration of the payments
referred to in Clause 11, Vernalis hereby grants to Endo and its
Affiliates with effect from the Closing Date a sole and exclusive
(even as against Vernalis) licence for each country of the Territory
under Vernalis IP to make, have made, use, Commercialise and have
Commercialised the Product including the right to record sales for
its own account.
	 
	3.2	 	For the avoidance of doubt it is declared and agreed that
Endo shall not be entitled to sublicense the rights granted to it
hereunder without the prior written consent of Vernalis, provided
that:

	3.2.1	 	For the purpose of the exploitation of the
rights granted to Endo hereunder in Canada, Endo shall be
entitled to sublicense to *** or any replacement for such
sublicensee from time to time as notified by Endo to Vernalis
in writing;
	 
	3.2.2	 	For the purpose of the exploitation of the
rights granted to Endo hereunder in Mexico, Endo shall be
entitled to sublicense from time to time as notified to
Vernalis in writing;
	 
	3.2.3	 	Endo shall not be restricted from appointing
distributors,

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	 	 	advertisers, public relations agencies,
consultants or advisors to assist Endo with Commercialising
the Product in the Territory; provided, however, that Endo
shall not have the right to appoint any contract sales
organization or representatives to assist it and its
Affiliates in Detailing, except that ***; and
	 
	3.2.4	 	Notwithstanding the provisions of this Clause
3.2, Endo shall be
entitled to sublicense the rights granted to it hereunder
to an Affiliate of Endo.

	3.3	 	To the extent that Endo is permitted under this Agreement to
sublicense the rights granted to it hereunder, Endo shall remain
responsible for all of its obligations hereunder and if the acts or
omissions of any such sublicensee cause Endo to be in breach of this
Agreement, Endo shall be responsible therefor regardless of any
remedy that Endo may have against the sublicensee for breach of the
sublicense.
	 
	3.4	 	Forthwith following the Closing Date and during the period of
this Agreement, Vernalis shall disclose and make available to Endo
the subject matter of any and all then-existing Vernalis IP for use
in connection with Endo’s making, having made, use and
Commercialisation of the Product in the Territory, including, but
subject to Clauses 8.11 and 8.12, any and all Vernalis IP comprising
or relating to Product Enhancements and relevant Documents. In
addition to the foregoing, Vernalis shall also disclose and make
available to Endo all information relevant or necessary for Endo to
fully exercise its rights and fulfil its obligations hereunder.
	 
	3.5	 	Vernalis shall, at Vernalis’ cost, provide Endo with
reasonable assistance including meetings, conference calls, exchange
of documents and other appropriate forms of communication to explain
knowledge and experience obtained by Vernalis, either directly or
through a Third Party, with regard to the Product (and for the
avoidance of doubt in addition to the time spent by Vernalis on the
Steering Committee) in the period

- 31 -

 

	 	 	prior to Re-Launch and after the
Re-Launch. Furthermore, Vernalis shall disclose, make available
and, at the request of Endo, assign, to the extent that Vernalis has
the right to do so, to Endo any agreements, rights or obligations
which become known to Vernalis after the Closing Date and which are,
in Endo’s opinion, necessary for the effective Commercialisation of
the Product.
	 
	3.6	 	On the Closing Date, the Parties shall execute a Safety
Agreement in a form mutually agreed and which shall be negotiated in
good faith. Each Party shall comply with the terms and conditions
of the Safety Agreement, including, but not limited to promptly
providing one another with all information concerning any charges,
complaints or claims reportable to any Regulatory Authority relating
to the Product. Vernalis shall ensure that all of its and its
Affiliates’ future licensees and future sub-licensees outside of the
Territory become parties to a safety agreement that contains the
same material terms as those set forth in the Safety Agreement
(including requirements regarding the timing and substance of
reports for adverse events) and are bound to report safety
information in accordance with the terms of such safety agreement.
Vernalis shall, immediately upon becoming aware of any such
information, provide Endo with all information Vernalis receives
from any of its current licensees and sublicensees pursuant to any
safety agreement in existence on the Signature Date with any of such
licensees or sublicensees (or any replacement or successor agreement
thereof).
	 
	3.7	 	Vernalis shall, so far as is permitted by Legal Requirements
and without seeking to amend any license in existence as of the
Signature Date which it has granted outside the Territory, ensure
that its Affiliates and the licensees and sub-licensees of it or any
of its Affiliates of the Compound and/or Product outside the
Territory do not market or sell such Compound or Product in the
Territory.
	 
	3.8	 	Vernalis hereby grants Endo a royalty-free, non-exclusive,
non-sub-

- 32 -

 

	 	 	licensable and non-assignable license to use the name and
mark “Elan”, the Elan group corporate logo or any name or mark
including or comprising “Elan” (including, without limitation, as
part of any of the corporate or trading names of any Elan Group
undertaking) and the stylized “e” symbol currently embossed on the
Product (the “e” Symbol) (the “Elan Marks”) as follows:

	3.8.1	 	the Elan Marks (other than the “e” Symbol) on
packaging of the Product and the “e” Symbol on tablets in
both cases which are intended for sale by Endo or its
Affiliates on or before February 18, 2005;
	 
	3.8.2	 	Endo shall no later than *** destroy all
existing stocks of Product in packaging bearing any Elan Mark
and remove the “e” Symbol from all equipment used to mark the
Product in Endo’s possession or control; and
	 
	3.8.3	 	Endo shall not intentionally violate any of
the provisions of Clause 11.4 of the Elan Asset Transfer
Agreement prior to ***.

	4.	 	TRANSFER OF THE PRODUCT REGISTRATIONS

On or before the Closing Date, or as soon as practicable thereafter, upon
written notice from Endo, Vernalis and Endo shall transfer the Product
Registrations and the Product Registration Information to Endo free from any
Encumbrance. Vernalis shall deliver signed transfer letters to the FDA, Health
Canada or any other Regulatory Authority in the Territory, as the case may be,
and all other notice, application, submission, report and other instrument,
document, correspondence or filing presented to it by Endo that is necessary or
useful for the transfer of the Product Registrations to Endo. From the
Signature Date until the Product Registrations are transferred to Endo,
Vernalis shall: (i) submit all necessary filings, correspondence and reports,
attend all meetings and otherwise conduct all activities required to maintain
the Product Registrations, (ii) promptly submit to Endo copies of all filings
and correspondence that are submitted to any Regulatory Authority which relates
to the Product in the Territory, and (iii) provide

- 33 -

 

Endo with advance written
notice of any meetings or telephone calls with any Regulatory Authority in the
Territory relating to Product Registrations and allow Endo to participate in
all such meetings or telephone calls.

	5.	 	TRANSFER OF OTHER ASSETS/TRANSITIONAL SERVICES AGREEMENT

	5.1	 	Vernalis hereby transfers effective on (and contingent upon)
the Closing Date in the USA transfer to Endo with full title
guarantee and free of any Encumbrance:

	5.1.1	 	in a novation or assignment and in a form
satisfactory to Endo acting reasonably, the Managed Care
Agreements and Assigned Contracts and the Supply and
Technical Agreements;
	 
	5.1.2	 	the Stock;
	 
	5.1.3	 	all right, title and interest in the
Copyrights (including the Marketing Materials) and the
registrations for the Domain Names.

	5.2	 	Vernalis shall during the Interim Period procure the
provision to Endo of the services specified in the Transitional
Services Agreement (with the Costs to Vernalis (if any) to be
reimbursed by Endo to Vernalis within thirty (30) days of receipt by
Endo of Vernalis receipt therefor), but shall terminate each service
provided under the Transitional Services Agreement as soon as
practicable as agreed between Vernalis and Endo. For the avoidance
of doubt it is declared and agreed that such services may be
terminated on different dates and, if it is necessary for Vernalis
to extend the time period for provision of certain services provided
by the Elan Group pursuant to the Transitional Services Agreement
(to the extent Vernalis has the right to extend the time period for
such services pursuant to the Transitional Services Agreement) to
comply with the provisions of this Clause 5, it shall do so. In
relation to such services provided by Vernalis, after the Closing
Date, Vernalis shall provide to

- 34 -

 

	 	 	Endo on a weekly basis a report,
which will include a description of actions, if any, taken by
Vernalis or the Elan Group under the Transitional Services Agreement
which may materially affect the Product. Except as otherwise
provided in this Clause 5, Vernalis shall cause the Transitional
Services Agreement to remain in full force and effect during the
Interim Period, and thereafter, to the extent requested by
Endo, but in no event to extend beyond the expiration date of the
Transitional Services Agreement.

	5.3	 	On and after the Closing Date, Vernalis shall deliver to Endo
all purchase orders for Product received by Vernalis or Elan.
	 
	5.4	 	After the Closing Date, Vernalis will use Commercially
Reasonable Efforts to ensure that all Managed Care Agreements
relating to the Product which are not assigned to Endo hereunder
(the “Non-Assigned Contracts”) are maintained by the Elan Group
until the earlier of: (i) the date Endo provides written notice to
Vernalis to terminate the Non-Assigned Contracts or (ii) the
expiration of Vernalis’ rights in such Non-Assigned Contracts.
	 
	5.5	 	Payment Obligations.

	5.5.1	 	Vernalis shall be responsible for any
payments, rebates, administrative fees or chargebacks
(“Commercial Payments”) due to customers (including those
payments due under Managed Care Agreements and Non-Assigned
Contracts) for Products sold or dispensed up to and on the
Closing Date, and Endo shall be responsible for Commercial
Payments to customers for Products sold or dispensed after
the Closing Date. After the Closing Date, (i) Vernalis shall
(through the Transitional Services Agreement) process and pay
all Commercial Payments in respect of requests received by it
or the Elan Group and (ii) Endo shall process and pay all
Commercial Payments in respect of requests received by it.
In the event that, with respect to Products sold or dispensed

- 35 -

 

	 	 	during the Quarter in which the Closing Date occurs, the
Parties cannot determine the date on which such Products were
sold or dispensed, then the Party that has made a Commercial
Payment for such Product shall be entitled to obtain
reimbursement from the other Party on a pro rata basis for
such Commercial Payment (with Vernalis’ pro rata share
constituting the proportion of days
in the Quarter up to and including the Closing Date, and
Endo’s pro rata share constituting the proportion of days
in such Quarter following the Closing Date). Either Party
that has made a Commercial Payment, all or a portion of
which is the responsibility of the other Party, shall
submit a payment request to the other Party, with
supporting documentation, and such other Party shall
reimburse the requesting Party for the Commercial Payment
(or portion thereof) for which it is responsible within 30
days of receipt of such request. Notwithstanding the
provisions of this Clause 5.5.1, if Endo notifies Vernalis
that it disputes in good faith the payment of any
Commercial Payment for which it would otherwise be
responsible and which Vernalis has processed and paid
pursuant to the terms hereof, Vernalis shall take all
commercially reasonable measures to dispute such Commercial
Payment and obtain a refund thereof and Endo shall have no
responsibility to reimburse Vernalis for the disputed
portion of such Commercial Payment until the dispute is
resolved.
	 
	5.5.2	 	Vernalis shall be responsible for any rebates
due to a governmental entity (“Government Rebates”)
applicable to any Product sold up to and on the Closing Date.
The Parties acknowledge that the request for such payments
is submitted to the NDC holder of the Product and, as such,
Vernalis will receive, process and pay Government Rebates on
all Product bearing the Elan NDC and shall within 30 days of
payment,

- 36 -

 

	 	 	submit to Endo an invoice for the amounts of any
Government Rebates made on Product sold after the Closing
Date. In the event that, with respect to Products sold or
dispensed during the Quarter in which the Closing Date
occurs, the Parties cannot determine the date on which such
Products were sold or dispensed, then the Party that has made
a Government Rebate for such Product shall be entitled to
obtain reimbursement from the other Party on a pro
rata basis for such Government Rebate (with Vernalis’ pro
rata share constituting the proportion of days in the
Quarter up to and including the Closing Date, and Endo’s
pro rata share constituting the proportion of days in such
Quarter following the Closing Date). Either Party that has
made a Government Rebate, all or a portion of which is the
responsibility of the other Party, shall submit a payment
request to the other Party, with supporting documentation,
and such other Party shall reimburse the requesting Party
for the Government Rebate (or portion thereof) for which it
is responsible within 30 days of receipt of such request.
	 
	5.5.3	 	Vernalis shall be responsible for returns from
any customer in respect of all Products sold or dispensed on
or prior to the Closing Date and Endo shall be responsible
for returns in respect of all Product sold or dispensed after
the Closing Date, regardless of when such return occurs.
Neither Party shall seek to encourage Product returns or
accept Product returns other than in the ordinary course of
business save, in each case, with the written consent of the
other Party. Endo shall process all Product returns received
by it and shall destroy the returned Product. Vernalis shall
reimburse Endo (within 10 days of request therefor) with
respect to any returns of Product sold on or prior to the
Closing Date for all Costs relating to the return, including
the

- 37 -

 

	 	 	Cost of destruction and related administrative costs and
expenses.

	5.6	 	For the avoidance of doubt, after the Closing Date, Endo
shall book sales in connection with all the Product in the
Territory.

	6.	 	ENDO COMMERCIALISATION

	6.1	 	Endo and its Affiliates’ core obligations in relation to
Commercialisation of Product in the Territory shall be as follows
(it being agreed that Vernalis’ sole remedies for breach by Endo or
its Affiliates of Clauses 6.1.2 and 6.1.3 shall be limited to the
remedies specified therein):

	6.1.1	 	to use its Commercially Reasonable Efforts to
achieve Re-Launch as soon as practicable. Endo shall
promptly inform Vernalis in writing of the occurrence of
Re-Launch in each country of the Territory. Endo shall also
keep Vernalis notified in writing of Endo’s anticipated date
of Re-Launch in each country of the Territory;
	 
	6.1.2	 	within *** days following the Closing Date
Endo shall provide to Vernalis a marketing plan for the
period commencing on the Closing Date and ending ***. Endo
shall also provide to Vernalis no later than ***, an Annual
Marketing Plan and Budget for the upcoming Year that reflects
its own internal plans and budgets and is supportive of
maximizing the market potential of the Product, including (i)
the information set out in Schedule 9, which, with respect to
each of Years *** following MAM Product Launch, shall be no
less than the *** for such Years, and (ii) the number of
Details for the subsequent Year, which, with respect to each
of Years *** and ***, and each of the *** following MAM
Product Launch, shall be no less than the *** for such Years.
The budget shown in any such Annual

- 38 -

 

	 	 	Marketing Plan and
Budget shall be the fixed budget for the Year indicated
(“Fixed Budget”) and the number of Details shown in any such
Annual Marketing Plan and Budget shall be the fixed number of
Details for the Year indicated (“Fixed Details”). No later
than (i) *** days after the end of each Year of this
Agreement or (ii) the date each Year on which Endo is
obligated under applicable law
to file its annual report on Form 10-K with the United
States Securities and Exchange Commission, whichever is
later, Endo shall report to Vernalis (i) the amount
actually expended by Endo on Commitment in relation to the
Product in the Territory in the previous Year and (ii) the
number of Details in relation to the Product in the
Territory in the previous Year consistent with Schedule 5.
If for any two (2) consecutive Years such report shows Endo
has not met *** of the Estimated Commitments in each of
such Years, royalties payable to Vernalis for the
subsequent two (2) years under Clauses 11.9.2 or 11.9.3, as
the case may be, shall be calculated as if each of the
royalty levels A, B, C, D and E in such clauses were each
*** higher;
	 
	6.1.3	 	use Commercially Reasonable Efforts to provide
the Estimated Detailing Effort in each Year specified in
Schedule 5. If for any two (2) consecutive Years such report
shows that Endo has not met a minimum of *** of the Estimated
Detailing Efforts in each of such Years, then Vernalis shall
have the right, but not the obligation, to carry out a
minimum number of Details equivalent to the average of those
not carried out by Endo or its Affiliates in the two Years in
question under the Annual Marketing Plan and Budget. If
Vernalis elects to increase its number of sales force
representatives to make up such shortfall in Details, then
for the following two Years, the cost and expenses for such
minimum number of additional Details undertaken by such
additional sales

- 39 -

 

	 	 	force representatives shall be borne by Endo
under the terms set forth in Clause 9 hereto. Vernalis shall
cooperate and coordinate with Endo the deployment of any such
additional sales force representatives and Detailing effort;
and
	 
	6.1.4	 	use Commercially Reasonable Efforts to exploit
the lifecycle of the Product in accordance with best practice
in the pharmaceutical industry by carrying out, where
appropriate as
determined by Endo in its reasonable opinion, Clinical
Studies and obtaining new Marketing Authorisations for the
Product in the Territory.

	6.2	 	Subject always to the provisions of Clause 6.1, Endo and its
Affiliates shall use Commercially Reasonable Efforts to
Commercialise Product in the Territory as follows:

	6.2.1	 	at all times deploy sales personnel (including
any Vernalis Specialty Sales Personnel utilized in accordance
with the Co-Promotion Option) as may be necessary to promote
the Product in the Territory, taking into account the sales
volume of the Product, the number of competitors, the
regulatory environment, the potential for sales in a
geographic area, the cost of sales personnel, and other
factors affecting Commercialisation;
	 
	6.2.2	 	market and promote the Product in accordance
with the Marketing Authorisation;
	 
	6.2.3	 	provide Vernalis with (i) copies of any
scientific or technical publications relating to the Product,
the Compound or any Clinical Study that it proposes to
publish no later than *** days prior to submission for
publication and (ii) copies of advertising, marketing or
promotional information or materials (in written, electronic
or other forms) relating to the Product, the Compound,

- 40 -

 

	 	 	any Clinical Study (including reports of Clinical Studies used as
promotional material) or any Product Enhancement;
	 
	6.2.4	 	notify Vernalis of the outcome of any
inspections by any Regulatory Authority of which Endo becomes
aware (either in the Territory or outside of the Territory)
of the facilities at which Product is formulated, packaged
and labelled;
	 
	6.2.5	 	not engage, either directly or indirectly, in
the manufacture or distribution of any pharmaceutical
products which is or contains a
triptan and which therefore compete with the Product in the
Territory, provided, however, that in the event of a Change
of Control of Endo, the restrictions in this Clause 6.2.5
shall no longer be effective, but instead, for the Year
following such Change of Control of Endo, if (i) Endo (or
its successor) does not meet (A) *** of the Estimated
Commitments as set forth in Clause 6.1.2 (if applicable) or
(B) *** of the Estimated Detailing Efforts as set forth in
Clause 6.1.3 (if applicable) or (ii) if such Change of
Control occurs after the *** anniversary of the Closing
Date and in the Year subsequent to such Change of Control
Endo (or its successor) fails to meet at least *** of the
Fixed Details and Fixed Budget set forth in the Annual
Marketing Plan and Budget for such Year, Vernalis shall
have the right to then terminate this Agreement on ***
written notice to Endo;
	 
	6.2.6	 	not seek customers, establish any branch or
maintain any distribution depot for the Product in any
country which is outside the Territory; and
	 
	6.2.7	 	not promote or otherwise solicit sales of the
Product in any country outside of the Territory.

- 41 -

 

	6.3	 	Before using a Domain Name, Endo and Vernalis shall agree as
to the design of the homepage of such Domain Name, such agreement
not to be unreasonably withheld or delayed.

	7.	 	MANAGEMENT OF THE RELATIONSHIP

	7.1	 	With effect from the Closing Date the Parties shall establish
and run the Steering Committee (“SC”) as follows:

	7.1.1	 	The SC shall comprise six (6) persons
(“Members”) and Endo and Vernalis respectively shall be
entitled to appoint three (3) Members, to remove any Member
appointed by it and to appoint any person to fill a vacancy
arising from the removal or retirement of such Member
appointed by it. The initial Members shall be as follows:

Endo Members

	 	 	***
	 
	 	 	***
	 
	 	 	***

Vernalis Members

	 	 	***
	 
	 	 	***
	 
	 	 	***

	 	 	Endo and Vernalis respectively shall each notify the other
of any change in the identities of their Members from time
to time. Members may be represented at any meeting by
another person designated by the absent Member. There will
be a Chairperson who will alternate between one of the
Vernalis Members and one of the Endo Members at each
meeting.
	 
	7.1.2	 	The SC is not a decision making body but a
forum through which the Parties can liase concerning the
Commercialisation of the

- 42 -

 

	 	 	Product both inside and outside the
Territory. Vernalis acknowledges and agrees that all
decisions relating to the Commercialisation of the Product in
the Territory shall be in the sole discretion of Endo,
provided always that nothing in this
provision shall derogate from Endo’s obligations under this
Agreement.
	 
	7.1.3	 	The venue for meetings shall alternate between
the premises of the Parties. Each Party shall be responsible
for its own expenses, including travel and accommodation
Costs incurred in connection with SC meetings.
	 
	7.1.4	 	The SC shall have power to invite persons
whose special skills or influence might assist an SC meeting,
in confidence and upon behalf of the SC, to attend and
address meetings of the SC. For the avoidance of doubt it is
agreed that such persons shall not be Members.
	 
	7.1.5	 	The SC Chairperson is responsible for promptly
preparing the minutes of any SC meeting, seeking unanimous
approval of those minutes from the Members who participated
in the meeting, signing and dating the approved minutes and
promptly distributing a copy of the signed minutes to each
Party. It is only such signed and dated minutes which shall
constitute acceptance by the SC.

	7.2	 	The SC shall hold meetings in person as frequently as the
Members may agree shall be necessary during the period of this
Agreement, or more frequently upon the reasonable request of either
Party, but in any event no less frequently than monthly during the
first six months following the Closing Date and no less frequently
than once a Quarter thereafter. Dates of meetings to be held in
person shall be agreed by the Parties not less than thirty (30) days
beforehand; responsibility for arranging the meetings, including, at
least, providing notice and an agenda, shall

- 43 -

 

	 	 	alternate between the
Parties; the first meeting will take place as soon as practicable
after the Closing Date, but in no event later than twenty (20)
Business Days after the Closing Date and will be organised by Endo.
	 
	7.3	 	No later than ten (10) days prior to each meeting of the SC,
Endo and Vernalis will each provide the other with written copies of
all materials they intend to present at any SC meeting, which until
completion of the MAM & Paediatric Development Program shall include
a written report from Vernalis summarising its conduct of the MAM &
Paediatric Development Program since the previous meeting and any
material results. After receipt of any such report, either Party
may request additional information, and the Party to whom such
request is made shall promptly provide to the other Party such
information.
	 
	7.4	 	The SC shall have the following particular functions:

	7.4.1	 	it shall be the forum through which Vernalis
reports its progress with and the results of the MAM &
Paediatric Development Program;
	 
	7.4.2	 	it shall be the forum through which each Party
reports to the other Party details of any clinical study in
relation to Product or Product Enhancements which, in the
case of Endo, it or its Affiliates, or which, in the case of
Vernalis it, its Affiliates and its and its Affiliate’s
licensees and for each of Endo’s and Vernalis’ and their
respective Affiliate’s sub-licensees are proposing to carry
out;
	 
	7.4.3	 	it shall be the forum through which the
results of any such clinical study are reported and through
which any publications or other advertising, marketing or
promotional information or materials are exchanged;
	 
	7.4.4	 	it shall be the forum through which each Party
reports to the other Party details of any Product Enhancement
made by the first

- 44 -

 

	 	 	Party or its Affiliates, or in the case of Vernalis, Vernalis, its
Affiliates and licensees and sub-licensees of it or any of
its Affiliates. In this respect, each Party shall have a
positive obligation to report at each SC meeting upon any
such Product Enhancements which have been made by it since
the previous SC meeting; and

	7.4.5	 	it shall be the forum through which Vernalis
makes Use Suggestions to Endo.

	7.5	 	Both Parties acknowledge and agree that they intend to be as
transparent as reasonably possible with each other on all material
issues relating to Commercialisation of Product, its further
development and the development and Commercialisation of Product
Enhancements both inside and outside the Territory and that the
forum for achieving such transparency shall be the SC.

	8.	 	FURTHER DEVELOPMENT OF THE PRODUCT

	8.1	 	Subject to Clause 8.2, Vernalis shall undertake and assume
responsibility for completion of the MAM & Paediatric Development
Program. *** of the cost and expense of the MAM & Paediatric
Development Program, including internal FTE cost and expense
directly related to the conduct thereof, shall be the responsibility
of Vernalis, and Vernalis shall liase with Endo through the SC in an
effort to obtain a “***” (as defined in Schedule 1) indication for
the MAM Product. Notwithstanding the foregoing, and without
prejudice to any rights and remedies of Endo hereunder, Endo at its
option may assume the cost and expense of the MAM and Paediatric
Development Program following notice to Vernalis. Within thirty
(30) days of the completion of any clinical trial forming part of
the MAM & Paediatric Development Program (such completion to have
occurred when the data on safety and efficacy have been analysed
statistically and have undergone quality control in accordance with
GCP) by Vernalis it shall make a Formal

- 45 -

 

	 	 	Presentation in
relation thereto to Endo and shall supply to Endo all Vernalis
Know How necessary or useful in the case of the MAM Product for
Endo to prepare and submit a filing for an NDA for the MAM Product
in the Territory and, in the case of the Paediatric study, for
Endo to submit to the FDA. Endo shall be responsible for
registration of the Product for MAM in the Territory. Endo shall
keep Vernalis fully informed concerning the progress of such
registration and shall invite Vernalis to participate in any
meeting or conference calls held with FDA, Health Canada or other
Regulatory Authority concerning such registration.
	 
	8.2	 	Vernalis shall use Commercially Reasonable Efforts to
complete the MAM & Paediatric Development Program as follows:

	8.2.1	 	Until the Initial FDA Meeting, Vernalis shall
hold and be the party of record for the MAM Product IND.
Promptly following the Initial FDA Meeting, Vernalis shall
transfer the MAM Product IND to Endo free from any
Encumbrance. Vernalis shall deliver signed transfer letters
to the FDA and all other notice, application, submission,
report and other instrument, document, correspondence or
filing presented to it by Endo that is necessary or useful
for the transfer of MAM Product IND to Endo.
	 
	8.2.2	 	Vernalis shall ensure that the MAM &
Paediatric Development Program is carried out in accordance
with GLP, GCP and GMP. Any animals involved in the MAM &
Paediatric Development Program shall be provided humane care
and treatment in accordance with current generally accepted
veterinary practice;
	 
	8.2.3	 	Vernalis shall keep or cause to be kept
detailed written records and reports of the progress of the
MAM & Paediatric Development Program in sufficient detail and
in good scientific manner appropriate for all purposes
including Marketing Authorisation purposes and patent
purposes. These written

- 46 -

 

	 	 	records and reports shall properly reflect all the work done and
the results achieved in carrying out the MAM & Paediatric
Development Program;
	 
	8.2.4	 	During the period of the MAM & Paediatric
Development Program, Vernalis shall be responsible at its
cost and expense for supplying all quantities of Product
required for the purposes of conducting any human or other
studies within the MAM & Paediatric Development Program; and
	 
	8.2.5	 	Vernalis shall conduct and complete, prior to
the date required by the FDA (or any extensions agreed with
the FDA), the Paediatric development program of the Product
set out in Schedule 3 hereto.

	8.3	 	Vernalis shall provide Endo with copies of any scientific or
technical publications produced by Vernalis, its Affiliates, and
licensees and sub-licensees of Vernalis or any of its Affiliates
regarding the Product or Compound no later than ten (10) days prior
to submission for publication.
	 
	8.4	 	Endo shall prepare, submit and prosecute all NDAs and other
Regulatory Authority filings and applications required to obtain all
necessary Marketing Authorisations and pricing approvals to
Commercialise the MAM Product in each country of the Territory.
Endo shall be the owner and party of record for all such filings,
applications and approvals. The Costs associated with the
preparation, submission and prosecution of all NDAs and other
regulatory filings and applications shall be borne by Endo. At the
request of Endo, Vernalis shall take all necessary and appropriate
actions to assist Endo in the preparation of all NDAs and other
Regulatory Authority filings and applications, including providing
required information with respect to the study design, data
collection and results of the MAM & Paediatric Development Program.
Endo shall promptly inform Vernalis in writing of each NDA filing
made or

- 47 -

 

	 	 	Marketing Authorisation obtained by Endo or its Affiliates
in each country of the Territory in relation to the MAM Product.
	 
	8.5	 	During the term of the MAM & Paediatric Development Program
and for a period of three (3) years thereafter, Vernalis shall
retain accurate and complete records showing the time devoted and
activities performed by each Vernalis person in performing Vernalis’
obligations under the MAM & Paediatric Development Program in
sufficient detail such that the number of Vernalis FTEs applied to
the MAM & Paediatric Development Program during each Quarter thereof
can be accurately determined.
	 
	8.6	 	Endo shall communicate the form and protocol of any Clinical
Study it proposes to undertake or have undertaken on its behalf to
the SC and the form and protocol of any such Clinical Study as
reviewed by a Regulatory Authority, in each case prior to the
commencement of any such study. Endo shall give due consideration to
the views of the SC in respect of any Clinical Study. Endo shall be
responsible for the design and cost and expense of the conduct of
any such Clinical Study. Endo may request Vernalis to conduct any
such Clinical Study or otherwise provide assistance to Endo in
relation to any such Clinical Study, and, if the Parties can agree
to terms therefor (which shall include Endo paying the Cost of such
Clinical Study), Vernalis shall conduct such Clinical Study or
provide such other assistance. Subject to any such involvement of
Vernalis, Endo shall be responsible for the conduct of any such
Clinical Study, shall provide all medical resources and Clinical
Study monitors and shall keep appropriate and complete data and
records of all such trials and testing activities. Endo shall keep
the SC regularly informed as to the conduct, progress and results of
any Clinical Study and of its communications with any Regulatory
Authority in connection therewith including details of any
prospective meetings or calls and shall provide to Vernalis copies
of correspondence and meeting notes with a Regulatory Authority
which in Endo’s reasonable opinion are material.

- 48 -

 

	 	 	Vernalis may, at its sole option and expense, attend any meeting or participate in
any call with a Regulatory Authority relating to such a
Clinical Study or in any meeting with a clinical research
organisation appointed by Endo to conduct the Clinical Study or
the research investigators. Endo shall (at a SC meeting) give a
Formal Presentation to Vernalis in relation to each Clinical Study
conducted by it or on its behalf and Vernalis shall have prompt
and full unrestricted access to the final report and results of
any Clinical Study and the related Endo Know How.

	8.7	 	If, having received the final form and protocol of any
Clinical Study which Endo wishes to carry out, Vernalis using its
commercially reasonable judgement decides that the conduct or
outcome of that Clinical Study could seriously damage the world-wide
market for the Product, Vernalis shall have the right to submit to
Endo its reasons together with verifiable data supporting such
reasons. If Endo still wishes to go ahead with such Clinical Study,
Endo and Vernalis shall meet and endeavour to agree to a plan for
the conduct of a Clinical Study in similar form which could be
carried out. If following such a meeting the Parties still cannot
agree whether the Clinical Study is likely to seriously damage the
world-wide market for the Product, Endo will not conduct such
Clinical Study.
	 
	8.8	 	Vernalis shall communicate the form and protocol of any
clinical study it, its Affiliates, or any licensee or sub-licensee
of it or its Affiliates proposes to undertake in relation to Product
or Product Enhancements or have undertaken to the SC and the form
and protocol of any such clinical study as reviewed by a Regulatory
Authority, in each case prior to the commencement of any such study.
Vernalis shall give due consideration to the views of the SC in
respect of any such clinical study. Vernalis shall keep the SC
regularly informed as to the conduct, progress and results of any
such clinical study and of the communications of it, its Affiliates,
or any licensee or sub-licensee of it

- 49 -

 

	 	 	or its Affiliates, with any Regulatory Authority in connection therewith,
including details of any prospective meetings or calls and shall provide
to Endo copies of correspondence and meeting notes with a Regulatory Authority
which in Vernalis’ reasonable opinion are material. Endo may, at its sole
option and expense, attend any meeting or participate in any call
with a Regulatory Authority relating to such a clinical study or
in any meeting with a clinical research organisation appointed by
Vernalis, its Affiliates, or any licensee or sub-licensee of
Vernalis or its Affiliates to conduct the clinical study or the
research investigators. Vernalis shall (at a SC meeting) give a
Formal Presentation to Endo in relation to each clinical study
conducted by it, its Affiliates, or a licensee or sub-licensee of
it or its Affiliates in relation to Product or Product
Enhancements, and Endo shall have prompt and full unrestricted
access to the final report and results of any such clinical study
and the related Vernalis Know How.
	 
	8.9	 	If, having received the final form and protocol of any
clinical study which Vernalis, its Affiliates, or a licensee or
sub-licensee of Vernalis or its Affiliates wishes to carry out in
relation to Product or Product Enhancements, Endo using its
commercially reasonable judgement decides that the conduct or
outcome of that clinical study could seriously damage the market for
the Product in the Territory, Endo shall have the right to submit to
Vernalis its reasons together with verifiable data supporting such
reasons. If Vernalis, its Affiliates, or the licensee or
sub-licensee of Vernalis or its Affiliates still wishes to go ahead
with such clinical study, Endo and Vernalis shall meet and endeavour
to agree a plan for the conduct of a clinical study in similar form
which could be carried out. If following such a meeting the Parties
still cannot agree whether the clinical study should be carried out,
Vernalis, its Affiliates, or the licensee or sub-licensee of
Vernalis or its Affiliates will not conduct such clinical study.

- 50 -

 

	8.10	 	In the event that Vernalis or any of its Affiliates seeks to
undertake a Territory Study, it shall communicate the form and
protocol of such Territory Study to the SC. Vernalis shall not
undertake any Territory Study without the prior written consent of
Endo.
	 
	8.11	 	In the event that Vernalis or its Affiliates develop a
Product Enhancement during the term of this Agreement, Endo shall
have the option, but not the obligation, to take responsibility at
its sole cost for the technical, clinical and commercial development
of such Product Enhancement in the Territory. Endo may exercise
such option at any time following the date of notification of the
Product Enhancement by Vernalis at the SC meeting. Regardless of
whether Endo exercises the option under this Clause 8.11, Vernalis
or its Affiliates shall not be entitled to exploit or utilise the
Product Enhancement in the Territory.
	 
	8.12	 	In the event that Endo exercises the option granted in Clause
8.11, Vernalis shall, subject to Clause 8.13, transfer and make
available to Endo the Vernalis Know How relating to such Product
Enhancement and Endo’s license under Clause 3.1 to such Product
Enhancement shall become effective.
	 
	8.13	 	Endo shall not be obliged to make any upfront or milestone
payment to Vernalis in respect of the Product Enhancement licence to
which reference is made in Clause 8.12, but shall pay royalties on
Net Sales of such Product Enhancement either as if it were Product
or Combination Product as the case may be. Any Net Sales of such
Product Enhancement shall be taken into account with Net Sales of
the Product when calculating the milestone events and royalty levels
as specified in Clause 11.6 or 11.9. The period for the payment of
royalties specified in Clause 11.11 with respect to a Product
Enhancement for which Endo has exercised the option set forth in
Clause 8.11 shall be extended, on a country by country basis,
according to whether such Product Enhancement is (i) Covered by
Valid Claims of Vernalis Patent Rights

- 51 -

 

	 	 	in patents, or (ii) granted orphan designation or other regulatory or administrative protection,
in each case conferring market exclusivity to Endo for the Product
in such country in the Territory and only for so long as Endo in its
sole discretion decides to continue to sell such Product
Enhancement Covered by such patents or granted orphan designation
or other administrative protection.
	 
	8.14	 	In the event that Endo or its Affiliates develops a Product
Enhancement during the term of this Agreement, Vernalis shall have
the option, but not the obligation, to take responsibility at its
sole cost for the technical, clinical and commercial development of
such Product Enhancement outside the Territory. Vernalis may
exercise this option at any time following the date of notification
of the Product Enhancement by Endo at an SC meeting. Regardless of
whether Vernalis exercises the option under this Clause 8.14, Endo
shall not be entitled to exploit or utilise the Product Enhancement
outside the Territory.
	 
	8.15	 	In the event that Vernalis exercises the option granted in
Clause 8.14 Endo shall, subject to Clause 8.15.1 or 8.15.2, as
applicable, transfer and make available to Vernalis the Endo Know
How relating to such Product Enhancement and Vernalis shall have the
following license (to the extent Endo has rights to license the
same):

	8.15.1	 	in the case of Endo IP relating solely to a Product
Enhancement where Endo or its Affiliates or contractors have
generated the Endo Know How or Endo Patent Rights as a result
of a Use Suggestion, Vernalis shall have a sub-licensable,
fully paid-up, royalty free license to develop, make, have
made, use, Commercialise and have Commercialised such Product
Enhancements outside the Territory; or
	 
	8.15.2	 	in the case of Endo IP relating to the Product Enhancement
where Endo or its Affiliates or contractors have not
generated such Endo IP as a result of a Use Suggestion,
Vernalis shall have

- 52 -

 

	 	 	a sub-licensable royalty-bearing license
to develop, make, have made, use, Commercialise and have
Commercialised such Product Enhancements outside the
Territory on terms to be agreed between Endo and Vernalis
negotiating in good faith. Vernalis
shall not use or sub-license such Endo IP unless and until
such a license is entered into in writing by the Parties.

	8.16	 	Vernalis shall use its best efforts to procure that its and
its Affiliates’ licensees and sub-licensees make Product
Enhancements available (through Vernalis) in the Territory for use
by Endo on at least as favorable terms as are available to Vernalis
or its Affiliates from their licensees or sublicensees outside the
Territory.

	9.	 	CO-PROMOTION

	9.1	 	For so long as Endo is deploying sales force representatives
to Commercialise the Product in the USA, Vernalis shall have the
option to co-promote the Product with Endo in USA with effect from
*** using Vernalis Specialty Sales Personnel as part of a Specialty
Sales Force. Endo shall reimburse Vernalis a portion of the Cost of
such Vernalis Specialty Sales Personnel. This shall be calculated
by reference to a percentage of the Cost per Detail up to a maximum
number of Details carried out by Vernalis in the five Years 2006,
2007, 2008, 2009 and 2010, as specified in the following table. The
percentage of the Cost per Detail will vary according to whether the
Vernalis Specialty Sales Personnel exclusively Detail the Product or
whether they Detail the Product and any other product according to
the following table.

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	YEARS
	 	2006
	 	2007
	 	2008
	 	2009
	 	2010

	Maximum no. of Details to be
reimbursed
	 	***	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	% of *** where *** Vernalis
Specialty Sales Personnel
Detail only the Product
	 	***	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	% of *** where *** Vernalis
Specialty Sales Personnel
Detail one or more other
products
	 	***	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**

	9.1.1	 	On the basis of the foregoing financial terms,
Vernalis Specialty Sales Personnel shall have the right to
Detail other products in addition to the Product, provided
that such other products are not for the treatment of
migraine or post herpetic neuralgia or in direct competition
with products in other therapeutic areas that are being
Commercialised by Endo or are in Phase III Clinical Trial or
have completed clinical proof of principle by Endo.
	 
	9.1.2	 	If at any time Vernalis wishes to provide
additional Details in excess of the number of Details to be
reimbursed by Endo, it may provide such additional Details
provided that the total number of Details provided by
Vernalis (including Details provided pursuant to Clause 9.1)
does not exceed *** the maximum number of Details required to
be reimbursed by Endo pursuant to Clause 9.1 (unless
otherwise agreed in writing by Endo) at Vernalis’ own cost.
Endo shall support any such additional Detailing effort with
the provision of marketing materials, samples and, to the
extent reasonable, training comparable to that given to
Endo’s own field force representatives at Endo’s cost through
***, and thereafter at Vernalis’ cost.

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	9.2	 	The Co-Promotion Option may be exercised by Vernalis by
written notice to Endo at any time during the period prior to ***
specifying the number of Details which Vernalis is proposing to
carry out in the Year ***. The precise number of Details up to the
maximum in any Year to be provided by Vernalis in any Year after ***
shall be notified in writing by Vernalis to Endo no later than ***
the previous Year.
	 
	9.3	 	Upon the exercise by Vernalis of its Co-Promotion Option, the
Parties shall on or before *** negotiate and agree to detailed terms
of a Co-Promotion Agreement for USA which will come into effect on
*** the USA based on the terms set out in Schedule 10. If the
Parties fail to
agree detailed terms of a Co-Promotion Agreement for USA, Vernalis
shall nonetheless have the right to promote the Product in the USA
for so long as Endo is Commercialising the Product in the USA
using its own sales force representatives on the following basis:

	9.3.1	 	on the terms of Clause 9.1;
	 
	9.3.2	 	liasing regularly with Endo on the sales force
call and deployment plan, including providing Endo with a
copy of Vernalis proposed call and deployment plan, and, so
far as Vernalis is reasonably able to do so, cooperating and
coordinating with Endo on creation and implementation of that
call and deployment plan;
	 
	9.3.3	 	Endo shall support such promotion efforts of
Vernalis at Endo’s Cost through *** with the provision of
marketing materials, samples, and, to the extent reasonable,
training;
	 
	9.3.4	 	with no restriction on Vernalis’ ability to
provide or co-promote other products at the same time
utilising the same sales representatives, provided that such
other products are not for the treatment of migraine or post
herpetic neuralgia or in direct competition with products in
other therapeutic areas that are

- 55 -

 

	 	 	being Commercialised by Endo or are in Phase III Clinical Trial or have completed clinical
proof of principle by Endo; and
	 
	9.3.5	 	all sales of the Product or MAM Product
generated as a result of any of Vernalis promotional
activities shall be booked by Endo and the applicable royalty
under Clause 11 paid to Vernalis by Endo.

	10.	 	INTELLECTUAL PROPERTY – OWNERSHIP

	10.1	 	Any and all Vernalis IP shall as between Endo and Vernalis be
owned by Vernalis. Vernalis shall own all right, title and interest
in and to all Product Enhancements made by or on behalf of Vernalis subject
always to the provisions of Clause 8.11 and Clause 8.12.
	 
	10.2	 	Any and all Endo IP shall as between Vernalis and Endo be
owned by Endo. Endo shall own all right, title and interest in
and to all Product Enhancements made by or on behalf of Endo subject
always to the provisions of Clause 8.14 and Clause 8.15.

	11.	 	PAYMENTS

	11.1	 	In consideration of the license rights granted hereunder Endo
will pay to Vernalis on the Closing Date an upfront fee equal to
thirty million USD (USD 30,000,000).
	 
	11.2	 	In consideration of the Stock sold hereunder (i) within
thirty (30) days of agreement or determination of the Inventory
Statement to which reference is made in Schedule 2, Endo will pay to
Vernalis a sum equal to the actual Cost specified in the Inventory
Statement and (ii) if appropriate, Vernalis shall pay Endo any
amounts due pursuant to paragraph 10 of Schedule 2.
	 
	11.3	 	Within thirty (30) days of the first anniversary of the
Closing Date and Endo’s receipt of an invoice therefor, Endo will
pay to Vernalis a one

- 56 -

 

	 	 	year anniversary payment equal to fifteen million USD (USD 15,000,000).
	 
	11.4	 	Within thirty (30) days of the second anniversary of the
Closing Date and Endo’s receipt of an invoice therefor, Endo will
pay to Vernalis a two year anniversary payment equal to fifteen
million USD (USD 15,000,000).
	 
	11.5	 	The following development milestone payment shall be paid by
Endo to Vernalis in relation to the MAM Product:

	11.5.1	 	forty million USD (USD 40,000,000) upon receipt of the
Marketing Authorisation in the USA of the Product for MAM.

	11.6	 	The following sales milestone payments shall be payable as
set forth below:

	11.6.1	 	*** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** USD (USD ***);
	 
	11.6.2	 	*** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars (USD
***);
	 
	11.6.3	 	*** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars (USD
***);
	 
	11.6.4	 	*** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars (USD
***);
	 
	11.6.5	 	*** USD (USD ***) one time payment for the first time that
aggregate Net Sales in a Year surpass *** US dollars (USD
***); and

- 57 -

 

	11.6.6	 	seventy-five million USD (USD 75,000,000) one time payment
for the first time that aggregate Net Sales in a Year surpass
one thousand two hundred million US dollars (USD
1,200,000,000).

	11.7	 	Each of the milestone payments subject to Clauses 11.5 and
11.6 shall only be payable by Endo upon the first occurrence of the
applicable event whenever it occurs and shall be payable even if
more than one applicable event occurs in a Year, unless otherwise
noted. Such milestone payments are non-refundable in any
circumstances whatsoever and are not creditable against the
royalties due under Clause 11.9.
	 
	11.8	 	Endo shall report the occurrence of each milestone event to
Vernalis within thirty (30) days of its occurrence and at the same
time shall make
the milestone payment to Vernalis for which Clauses 11.5 and 11.6
provide.
	 
	11.9	 	Endo will pay to Vernalis royalties on a Product by Product
basis for all Products as set forth below:

	11.9.1	 	Except as otherwise provided in this Clause 11.9.1, no
royalties shall be payable with respect to any Year ending on
or before ***. Notwithstanding the foregoing, if aggregate
Net Sales of Product in the Territory by Endo, its
Affiliates, its agents and its sublicensees in any Year ended
on or before *** are greater than one hundred and *** USD
(USD ***), then Endo shall pay to Vernalis royalties on
aggregate Net Sales of the Product in the Territory in excess
of USD ***, but only to the extent Net Sales of the Product
in the Territory exceed USD *** for such Year, in accordance
with the royalty rates set forth in Clause 11.9.2 or Clause
11.9.3, as applicable. No royalties shall be payable with
respect to the first USD *** of Net Sales of Product in the
Territory for any Year ending on or before ***.

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	11.9.2	 	If Marketing Authorisation for Product for MAM has not been
approved, then royalties shall be calculated as follows:
	 
	 	 	royalty = A + B + C + D + E
	 
	 	 	where,
	 
	 	 	A equals *** per cent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is less than or equal to *** USD (USD
***);
	 
	 	 	B equals *** percent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is greater than *** USD (USD ***) and
less than or equal to *** USD (USD ***);
	 
	 	 	C equals *** percent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is greater than *** USD (USD ***) and
less than or equal to *** USD (USD ***);
	 
	 	 	D equals *** percent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is greater than *** USD (USD ***) and
less than or equal to *** USD (USD ***); and
	 
	 	 	E equals *** percent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is greater than *** USD (USD ***).
	 
	11.9.3	 	if Marketing Authorisation for the MAM indication has been
approved, then royalties shall be calculated as follows for
Net Sales subsequent to the effective date of such Marketing
Authorization:

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	 	 	royalty = A + B + C + D + E
	 
	 	 	where,
	 
	 	 	A equals *** per cent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is less than or equal to *** USD (USD
***);
	 
	 	 	B equals *** percent (*** %) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is greater than *** USD (USD ***) and
less than or equal to *** USD (USD ***);
	 
	 	 	C equals *** percent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in
question, is greater than *** USD (USD ***) and less than
or equal to *** USD (USD ***);
	 
	 	 	D equals *** (***%) of that portion of aggregate Net Sales
of Product in the Territory, which, during the Year in
question, is greater than *** USD (USD ***) and less than
or equal to *** USD (USD ***); and
	 
	 	 	E equals *** percent (***%) of that portion of aggregate
Net Sales of Product in the Territory, which, during the
Year in question, is greater than *** USD (USD ***).

	11.10	 	For the purposes of milestone and royalty payments under
Clauses 11.6 and 11.9, all formulations (e.g. tablets, gel caps,
topical formulations, parenteral formulations, sustained release
formulations etc) of a Product will be considered to be the same
Product, regardless of the indications for which such Product may be
used.
	 
	11.11	 	Royalties under Clause 11.9 shall be payable on a country by
country basis for a Product for the shorter of (i) the period of
time that (a) there are Valid Claims of those Vernalis Patent
Rights set out in Schedule 8

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	 	 	or Endo Patent Rights which result from
a Use Suggestion for such Product, or (b) such Product is granted
orphan designation or other regulatory administrative protection as
a result of a Use Suggestion, in each case conferring market
exclusivity to Endo for such Product in such country of sale,
whichever is longer, or (ii) the date when a Generic Version of such
Product is first offered in such country for sale, but in no event
for longer than twenty (20) years from the Closing Date in each
country of the Territory (unless and for so long as Endo sells
Product Enhancements as set forth in Clause 8.13, pursuant to which
royalties shall be paid with regard to such Product Enhancements).
	 
	11.12	 	In the event that for any Product in any country of the
Territory royalties are no longer payable under Clause 11.11(i) and
it is prior to the twenty
(20) year anniversary of the Closing Date, Endo may thereafter
continue to use (i) the Vernalis Trade Marks or (ii) any trade
marks used by Endo pursuant to Clause 13.1 for the MAM Product or
for any indication other than the indication of migraine existing
at the Closing Date or in relation to a Combination Product or a
Product Enhancement (excluding the ENDO name, mark and associated
logo (or successor mark or logo)) (the “Endo-Developed MAM Trade
Marks”) (and for the avoidance of doubt Endo shall have the right
to terminate such use in such circumstances on a
country-by-country basis upon giving written notice to Vernalis),
provided that Endo shall, for the balance of such period in such
country to the extent it chooses to make such use, pay to Vernalis
a trade mark usage fee of *** of Net Sales of the Product sold
under Vernalis Trade Marks and/or the Endo-Developed MAM Trade
Marks in such country in the Territory, and shall, following such
20 Year period, have the right to continue using the Vernalis
Trade Marks on a royalty-free basis (the Parties acknowledging
that Endo, as the owner of the Endo-Developed MAM Trade Marks,
shall have such right and all other rights with respect to such
Endo-Developed MAM Trade Marks).

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	11.13	 	Endo shall make the royalty payments due to Vernalis under
Clause 11.9 or 11.12 at Quarterly intervals. Within *** days of the
end of each Quarter after Closing Date in any country, Endo shall
pay all monies due to Vernalis under Clause 11.9 or Clause 11.12.
Each royalty payment shall be accompanied by a report summarising
the Net Sales of the Product (including the various elements of the
Net Sales calculation) on a country-by-country basis in the
Territory during the relevant Quarter the currency conversion rate,
if applicable, the taxes withheld, if any, which royalty calculation
is being applied and the total royalty payments due.
	 
	11.14	 	Whenever for the purpose of calculating royalties conversion
from any foreign currency shall be required, such conversion shall
be made as follows. When calculating the Net Sales, the amount of
such sales in foreign currencies shall be converted into USD using
the average
monthly rate of exchange for such currencies at the time published
in Wall Street Journal in accordance with Endo’s then current
standard practices;
	 
	11.15	 	Endo shall make all payments to Vernalis under this
Agreement in USD from the USA. All payments under this Agreement
shall be made free and clear of and without set off, deduction or
deferment in respect of any taxes, disputes or claims whatsoever
unless required by law or practice of any Competent Authority
provided always that (i) Endo shall have the right to set off
against any sums due from it to Vernalis under this Agreement any
Monies following an Event of Default until all such Monies have been
paid but for no longer, and (ii) both Parties shall have a right of
set off as set forth in Clause 15.11. Endo and Vernalis shall
co-operate to minimize any deduction or withholding in relation to
any payments pursuant to this Agreement and, without limitation,
Vernalis shall provide Endo with a W-8BEN (or successor form) duly
executed by Vernalis.

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	11.16	 	Endo and its Affiliates shall keep and shall require its
sublicensees to keep, full, true and accurate records and books of
account containing all particulars that may be necessary for the
purpose of calculating all royalties payable to Vernalis and in
compiling the reports due from Endo under Clauses 6.1.2 and 6.1.3
for a minimum period of *** years. Upon timely request by Vernalis,
Vernalis shall have the right to instruct an independent,
internationally recognized, accounting firm to perform an audit,
conducted so far as appropriate in accordance with GAAP, as is
reasonably necessary to enable such accounting firm to report to
Vernalis the Net Sales of Product for the period or periods
requested by Vernalis or to report to Vernalis on the accuracy of
the reports issued by Endo under Clauses 6.1.2 and 6.1.3 on the
following basis:

	11.16.1	 	such firm of accountants shall be given access to and
shall be permitted to examine and copy such books and records
upon twenty (20) Business Days notice having been given by
Vernalis and at all reasonable times on Business Days for
the purpose of certifying to Vernalis either that the Net
Sales calculated and reported by Endo or its Affiliates
during any Year were calculated correctly in accordance
with this Agreement (and if such certification cannot be
given specifying the reasons why which will enable the
Parties to recalculate the relevant sums) or that a report
issued by Endo under Clause 6.1.2 or 6.1.3 was accurate;
	 
	11.16.2	 	prior to any such examination taking place, such firm of
accountants shall undertake to Endo that they shall keep all
information and data contained in such books and records,
strictly confidential and shall not disclose such information
or copies of such books and records to any third person
including Vernalis, but shall only use the same for the
purpose of the reviews and/or calculations which they need to
perform in order

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	 	 	to issue the certificate to Vernalis which this Clause 11.16 envisages;
	 
	11.16.3	 	any such access examination and certification shall occur
no more frequently than once per year and will not go back
over records more than *** years old unless a discrepancy
is found;
	 
	11.16.4	 	Endo shall make available personnel to answer queries on
all books and records required for the purpose of that
certification;
	 
	11.16.5	 	any such certification shall be final in so far as it
relates to a report issued by Endo under Clause 6.1.2 or
6.1.3; and
	 
	11.16.6	 	if the certification is in disagreement with the Net Sales
as calculated by Endo, Endo shall notify Vernalis within ten
(10) days of receipt by Endo whether or not Endo agrees with
the certification. If Endo notifies its agreement with the
certification within the ten (10) day period or fails to give
any notification
with that period, the Net Sales calculated by the
certification shall be used for purposes of calculating any
monies owed and any monies owed by one Party to the other
shall be paid by that Party. The Cost of the accountant
shall be the responsibility of Endo if the recalculation
shows the Endo’s previous figures supplied to Vernalis to
be inaccurate by more than the lesser of USD*** or *** and the responsibility of Vernalis
otherwise.
	 
	11.16.7	 	If within ten (10) days starting on the day after receipt
of the notification referred to in Clause 11.16.6, Endo and
Vernalis have not agreed to the terms in dispute in relation
to the certification, either Party may refer the items in
dispute to a partner of at least 10 years qualified
experience at an

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	 	 	independent, internationally recognized,
public accounting firm agreed by the Parties in writing for
final and binding resolution, or failing agreement on the
identity of the public accounting firm within fifteen (15)
days starting on the day after receipt of the notification
referred to in Clause 11.16.6, an independent,
internationally recognized, public accounting firm appointed
on the application of either Party by the President for the
time being of the Institute of Chartered Accountants in
England and Wales. Such person appointed shall act on the
following basis:

	11.16.7.1	 	such person shall act as an expert and not as an
arbitrator;
	 
	11.16.7.2	 	such person’s terms of reference shall be to
determine the matters in dispute within 20 days of his
appointment;
	 
	11.16.7.3	 	the Parties shall each provide such person with
all information relating to the items in dispute which
such person reasonably requires and such person
shall be entitled (to the extent he considers
appropriate) to base his determination on such
information;
	 
	11.16.7.4	 	the decision of such person is, in the absence of
fraud or manifest error, final and binding on the
Parties; and
	 
	11.16.7.5	 	such person’s Costs shall be paid by Endo and
Vernalis as such person may determine.

	11.17	 	All payments made to Vernalis under this Agreement shall be
made by wire transfer to the account of Vernalis Development Limited
at Barclays Bank plc, London Corporate Banking, PO Box 544, 54
Lombard Street, London EC3P 3AH, Sort Code20-30-19, USD Account

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	 	 	No. ***, or any other bank account that may be notified by Vernalis to
Endo from time to time.
	 
	11.18	 	If either Party fails to make any payment to the other Party
hereunder on the due date for payment and the payment is not in
dispute between the Parties, and the dispute has not been resolved
pursuant to dispute resolution under Clause 22.2, without prejudice
to any other right or remedy available to that Party, that Party
expecting payment shall be entitled to charge the other Party
interest (both before and after judgement) on the amount unpaid at
the annual rate of LIBOR or EURIBOR plus *** calculated on a daily
basis until payment in full is made without prejudice to that
Party’s right to receive payment on the due date. If a payment is
in dispute between the Parties, any such dispute shall be promptly
submitted for resolution according to Clause 22.2.

	12.	 	INTELLECTUAL PROPERTY - PROSECUTION, MAINTENANCE AND ENFORCEMENT - PATENT
RIGHTS

	12.1	 	Vernalis shall at its own cost and expense be solely
responsible for the filing, prosecution and maintenance of Vernalis
Patent Rights in
accordance with the patent strategy that Vernalis and Endo, in
consultation with each other, reasonably devise, but using all
reasonable endeavours to prosecute all patent applications forming
part of Vernalis Patent Rights to grant in whichever countries of
the Territory Vernalis and Endo, in consultation with each other,
deem commercially reasonable, including the conduct of any claims
or proceedings relating to them (including but not limited to any
interference, reissue or re-examination or opposition or
revocation proceedings). Vernalis shall promptly keep Endo
informed of all material developments in relation to the Vernalis
Patent Rights and shall, upon Endo’s request, provide Endo with
copies of relevant documents related to the filing, prosecution
and maintenance of the Vernalis Patent Rights. Vernalis will take
account of

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	 	 	Endo’s interest hereunder when making any submission to
a patent office (including the scope of foreign filings) and in
the conduct of any proceedings in relation to such Vernalis Patent
Rights.
	 
	12.2	 	In the event that Vernalis declines to file or, having filed,
declines to further prosecute and maintain any pending Vernalis
Patent Rights, Vernalis shall provide Endo with written notice
thereof. In the case where Vernalis has filed but is declining to
further prosecute or maintain, such notice shall be given prior to
the expiration of any deadline relating to such activities, but in
any event at least thirty (30) Business Days prior to such deadline.
In any of such circumstances Endo shall have the right to decide
that Endo should continue to file or prosecute such Vernalis Patent
Rights, and, in such case, Endo shall give written notice to
Vernalis. Vernalis shall upon receipt of any such notice from Endo
assign its right, title and interest in and to the relevant Vernalis
Patent Rights to Endo at Vernalis’ cost and expense.
	 
	12.3	 	Endo shall at its own cost and expense be solely responsible
for the filing, prosecution and maintenance of Endo Patent Rights in
accordance with the strategy that Endo reasonably devises but using
all reasonable endeavours to prosecute all patent applications
forming part of Endo
Patent Rights to grant in whichever countries Endo deems
commercially reasonable, including the conduct of any claims or
proceedings relating to them (including but not limited to any
interference, reissue or re-examination or opposition or
revocation proceedings). Endo shall keep Vernalis promptly
informed of all filings made for Endo Patent Rights including
sending Vernalis a copy of any such filing and otherwise shall
keep Vernalis informed of all material developments in relation to
the Endo Patent Rights and shall, upon Vernalis’ request, provide
Vernalis with copies of relevant documents related to the filing,
prosecution and maintenance of the Endo Patent Rights.

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	12.4	 	In the event that Endo declines to file or, having filed,
declines to further prosecute and maintain any pending Endo Patent
Rights Endo shall provide Vernalis with written notice thereof. In
the case where Endo has filed but is declining to further prosecute
or maintain such notice shall be given prior to the expiration of
any deadline relating to such activities, but in any event at least
thirty (30) Business Days prior to such deadline. In any of such
circumstances Vernalis shall have the right to decide that Vernalis
should continue to file or prosecute such Endo Patent Rights and in
such case Vernalis shall give written notice to Endo. Endo shall
upon receipt of any such notice from Vernalis assign its right,
title and interest in and to the relevant Endo Patent Rights to
Vernalis at Endo’s cost and expense.
	 
	12.5	 	The Parties shall cause their patent attorneys to liase so
far as practicable with respect to the filing, prosecution and
maintenance of Patent Rights falling within Vernalis Patent Rights
and Endo Patent Rights. Each Party shall be responsible for the
Cost of its own patent attorney incurred pursuant to this Clause
12.5.
	 
	12.6	 	Endo may, but shall not be obliged to, at its own cost and
expense, enforce the Vernalis Patent Rights and Vernalis Know How
against infringers in accordance with the following:

	12.6.1	 	Prior to the commencement of proceedings, Endo shall notify
Vernalis of the infringers’ activities and shall consult with
Vernalis concerning the same, but thereafter Endo shall have
sole conduct of the dispute including the right to settle.
Where Endo decides to commence proceedings as plaintiff it
shall be entitled to require Vernalis to join Endo as
co-plaintiff. Vernalis shall provide all necessary
assistance to Endo in relation to such proceeding, and Endo
shall on demand by Vernalis indemnify Vernalis against the
Costs of such activity unless Vernalis elects to be
separately represented (which shall be at Vernalis’

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	 	 	discretion) in which case such separate representation shall be at Vernalis’ own cost and expense;
	 
	12.6.2	 	If Endo succeeds in any such infringement proceedings
whether at trial or by way of settlement, Endo shall be
entitled to retain such part of any award of Costs and
damages made in such proceedings or settlement sum as is
equal to Endo’s Costs of taking the proceedings and shall be
entitled to retain the balance received by Endo less an
amount equivalent to the royalties which would have been due
to Vernalis on the balance as if they were Net Sales which
amount shall be paid to Vernalis; and
	 
	12.6.3	 	If Endo fails to take any such proceedings, Vernalis may
give Endo notice requesting Endo to take such proceedings
within thirty (30) days of the date of notice and if Endo
decides not to do so, Vernalis shall be entitled to do so at
its own cost and expense. Endo shall provide all necessary
assistance to Vernalis in relation to such proceedings and
Vernalis shall on demand by Endo indemnify Endo against the
Costs of such activity, unless Endo elects to be separately
represented (which shall be at Endo’s discretion), in which
case such separate representation shall be at Endo’s cost and
expense. Vernalis shall have sole right to settle such
proceedings, provided that such settlement does not
adversely affect Endo’s rights and interests hereunder and
does not include a license with respect to any Product in
the Territory. If Vernalis succeeds in any such
proceedings it shall be entitled to retain the whole of any
award of Costs and damages made or settlement sum paid.

	12.7	 	Each Party shall promptly take all necessary steps to
facilitate the other’s application (made either on the other’s own
initiative or upon request by the first Party) for extensions to the
term of Patent Rights falling within Vernalis Patent Rights in any
country of the Territory,

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	 	 	including applications for supplementary protection certificates and patent term extensions.
	 
	12.8	 	Notwithstanding anything to the contrary herein, for Vernalis
Patent Rights Covering the making, having made, using or
Commercialisation of a Product, should either Party receive a
certification from a Third Party in the US under the US “Drug Price
Competition and Patent Term Restoration Act of 1984 (Public Law
98-417), as amended (21 U.S.C. § 355(j)(2)(A)(vii)(IV) or a
comparable provision), or its comparable law in the country other
than the USA, then such Party shall immediately give written notice
to the other Party of such certification. Endo shall then have
twenty-eight (28) days from the date such Party receives such
certification to initiate suit. In the event the twenty-eight (28)
day period expires without Endo having initiated suit, Vernalis
shall have the right to immediately bring suit against the Third
Party that filed the certification. If either Party initiates a
suit within a forty-five (45) day period from the date such Party
received the certification, it will immediately notify the other
Party.

	13.	 	TRADE MARKS

	13.1	 	The Product for the indication of migraine existing at the
Closing Date shall be promoted, advertised and sold in the Territory
under and using the Vernalis Trade Marks and the ENDO name, mark and
associated logo
(or successor mark or logo). Endo shall use the symbol “®” in
conjunction with the Registered Trade Marks within a reasonable
time period after receiving notice from Vernalis that they are
registered. If at any time Endo decides that it wishes to use a
trade mark other than the Vernalis Trade Marks and the ENDO name,
mark and associated logo (or successor thereto) in relation to the
MAM Product in the Territory or in relation to Product for any
indication other than the indication of migraine existing at the
Closing Date or in relation to a Combination Product or a Product
Enhancement, Endo shall give written notice to

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	 	 	Vernalis specifying the proposed trade mark, Endo shall make filings for the proposed
trade mark in respect of Product in the countries of the
Territory.
	 
	13.2	 	All goodwill arising from use of the Vernalis Trade Marks by
Endo during or after the term of this Agreement shall accrue and
belong to Vernalis or its nominated Affiliate. All goodwill arising
from use of the Endo Trade Marks by Endo during or after the term of
this Agreement shall accrue and belong to Endo or its nominated
Affiliates.
	 
	13.3	 	In relation to its use of the Vernalis Trade Marks hereunder,
Endo shall:

	13.3.1	 	not use any of the Vernalis Trade Marks in any modified or
altered form or with any prefix or suffix or in any other
language. or as part of, or in combination or conjunction
with, any other name or mark, save for any mark including or
consisting of the name and mark “FROVA”;
	 
	13.3.2	 	not take, or cause to be taken, any action knowing that
such action is likely to damage, depreciate, tarnish,
jeopardise or otherwise prejudice the goodwill and
reputation, image or distinctiveness associated with the
Vernalis Trade Marks;
	 
	13.3.3	 	not knowingly do anything that may jeopardise the
enforceability or validity of any registration of any
Registered Trade Mark or
lead to grounds for the revocation of any such registration
for any reason including, but not limited to, knowing use
of any Registered Trade Mark in a manner which may be
misleading to the public;
	 
	13.3.4	 	use the Vernalis Trade Marks only in connection with
Product complying with the quality and other specifications
of the Product Registrations;

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	13.3.5	 	not knowingly apply to register in its own name in the
Territory any Vernalis Trade Mark nor any trade mark so
nearly resembling them or any of them as may be likely to
cause confusion based upon its use of the Vernalis Trade
Marks under this Clause 13, or otherwise at any time; and
	 
	13.3.6	 	not knowingly use in connection with the Product any other
trade mark or trade name which is confusingly similar to any
of the Vernalis Trade Marks.

	13.4	 	The final decision on packaging, design and labelling for the
Territory shall be Endo’s.
	 
	13.5	 	Vernalis or its designated Affiliate shall at its own cost
and expense be solely responsible for the filing, prosecution and
maintenance of the Registered Trade Marks in the Territory, and
shall use its Commercially Reasonable Efforts to file and prosecute
the trade mark applications forming part of Vernalis Trade Marks in
the Territory.
	 
	13.6	 	In the event that Vernalis or its designated Affiliate
declines to file or, having filed, declines to further prosecute and
maintain the Registered Trade Marks in the Territory, Vernalis or
its designated Affiliate shall provide Endo with written notice
thereof prior to the expiration of any deadline relating to such
activities, but in any event at least thirty-five (35) days prior
notice. In such circumstances Endo shall have the right to decide,
with reason and with written notice at least twenty (20) days prior
to the deadline, that Vernalis or its designated Affiliate should
continue to file or prosecute the Vernalis Trade Marks. Vernalis
or its designated Affiliate shall then have the option, with at
least ten (10) days notice to Endo, to:

	13.6.1	 	continue to file or prosecute the Vernalis Trade Marks in
Vernalis or its designated Affiliate’s own name and expense;
or

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	13.6.2	 	allow Endo to file or prosecute the Vernalis Trade Marks in
Vernalis or its designated Affiliate’s name and at Vernalis
or its designated Affiliate’s expense using counsel of Endo’s
own choice, in which instance Endo shall invoice Vernalis or
its designated Affiliate for such expenses within 30 days of
the end of each Quarter, such invoice to be payable within 30
days.

	13.7	 	Each Party shall promptly notify the other Party or its
designated Affiliate in writing if it becomes aware of any
infringement or unauthorized use by a Third Party of the Vernalis
Trade Marks in the Territory.
	 
	13.8	 	In the event of an infringement of the Vernalis Trade Marks
by a Third Party in the Territory, Vernalis or its designated
Affiliate shall have first right to bring any action or proceedings,
and shall have sole control of the conduct of any such proceedings,
including, the right to settle them, provided such settlement does
not adversely affect Endo’s rights and interests within the
Territory.
	 
	13.9	 	Without prejudice to Clause 13.8, Endo shall have the right
to be joined as a co-plaintiff, in which case, Vernalis or its
designated Affiliate shall at its sole discretion and cost appoint
counsel to act on behalf of both Vernalis or its designated
Affiliate and Endo. In such a situation, if Vernalis or its
designated Affiliate and Endo succeed in any such proceedings in
relation to an infringement in the Territory of the Vernalis Trade
Marks, whether at trial or by way of settlement, in obtaining
damages or any other financial payment to Vernalis or its
designated Affiliate and/or Endo:

	13.9.1	 	Vernalis or its designated Affiliate shall first deduct for
itself all of its costs and expenses incurred in relation to
such proceedings; and

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	13.9.2	 	then the Parties shall share such damages or other payment
50:50.

	13.10	 	In the circumstances of Clause 13.9, in the event that Endo
elects not to be joined as a co-plaintiff, Endo shall, at Vernalis’
or its designated Affiliate’s reasonable request and expense,
provide Vernalis or its designated Affiliate with reasonable
assistance in relation to such action or proceedings in the
Territory. Vernalis or its designated Affiliate shall have sole
control of the conduct of any such proceedings, including the right
to settle them, provided that such settlement does not adversely
affect Endo’s rights and interests hereunder. If Vernalis or its
designated Affiliate succeeds in any such proceedings in relation to
an infringement in the Territory, whether at trial or by way of
settlement, in obtaining damages or any other financial payment
Vernalis shall be entitled to retain all such damages or other
financial payment awarded in such proceedings or agreed in any such
settlement for its own account.
	 
	13.11	 	In the event that Vernalis or its designated Affiliate fails
to institute an action or proceeding in relation to an infringement
of the Vernalis Trade Marks in the Territory for more than ninety
(90) days from notification of the infringement pursuant to Clause
13.7, and if Endo wishes to do so, Endo shall, provided it has given
written notice to Vernalis or its designated Affiliate, be entitled
to institute action or proceeding in its own name and Vernalis or
its designated Affiliate shall do all such acts and things at Endo’s
cost and expense as Endo shall reasonably request to assist Endo in
such proceedings, including, lending its name to such proceedings.
Endo shall have sole control of the conduct of any such proceedings,
including the right to settle them, provided such settlement
does not adversely affect Vernalis’ or its designated Affiliate’s
rights and interests outside of the Territory, and shall be
entitled to retain any financial payment awarded in such
proceedings or agreed in any such settlement for its own account.

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	14.	 	GUARANTEE BY VERNALIS PLC

	14.1	 	Vernalis plc, a public limited company incorporated under the
laws of England and Wales (the “Guarantor”), hereby unconditionally
and irrevocably guarantees to Endo the performance of all of the
obligations of Vernalis under Clause 15 of this Agreement, including
the due and prompt payment by Vernalis of any amounts payable under
Clause 15 of this Agreement and the satisfaction of each of the
representations, warranties and indemnities of Vernalis set forth
therein(the “Guaranteed Obligations”). In case of the failure of
Vernalis promptly to pay any amounts or to make whole Endo for any
of its obligations under Clause 15 of this Agreement, the Guarantor
hereby agrees to cause the payment of such amounts to be made
promptly when and as such amounts become due and payable and as if
such amounts were paid by Vernalis. The Guarantor hereby agrees
that its obligations hereunder will be absolute and unconditional,
irrespective of, and will be unaffected by, the validity, regularity
or enforceability of the obligations of Vernalis under this
Agreement, the absence of any action to enforce the same, the
dissolution, the insolvency or bankruptcy of Vernalis or any other
circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor or surety. The Guarantor hereby
waives the benefits of diligence, presentment, demand of payment,
any requirement that Endo protect, secure, perfect or insure any
security interest in or other lien on any property subject thereto
or exhaust any right or take any action against Vernalis or any
collateral, filing of claims with a court in the event of
dissolution, insolvency or bankruptcy of Vernalis, any right to
require a proceeding first against Vernalis, protect, notice and all
demands whatsoever and covenants that its obligations
hereunder will not be discharged except by complete payment of the
amounts due by Vernalis under Clause 15 of this Agreement.
Notwithstanding the foregoing, unless Vernalis has legally
dissolved, Endo agrees to give Vernalis notice of any claim under
this

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	 	 	Agreement prior to making any demand under this Clause 14 in
respect of the Guaranteed Obligations. In the event that any
payment to Endo in respect of any amounts due by Vernalis under
Clause 15 of this Agreement is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantor will remain
liable for such amounts to the extent provided herein as if such
amounts had not been paid. The aggregate amount to be paid under
this Clause 14 by the Guarantor shall be net of any prior payment
to Endo by Vernalis in respect of such Guaranteed Obligations.

	15.	 	WARRANTIES AND LIABILITY

	15.1	 	Each Party represents and warrants to the other Party that:

	15.1.1	 	it has the legal power, authority and right to enter into
this Agreement and to perform its respective obligations in
this Agreement; and
	 
	15.1.2	 	it is not at the Signature Date or the Closing Date a party
to any agreement, arrangement or understanding with any Third
Party which in any significant way prevents it from
fulfilling any of its material obligations under the terms of
this Agreement; and
	 
	15.1.3	 	it has disclosed to the other all information and material
which is material to the decision of the other to enter into
this Agreement.

	15.2	 	Vernalis represents and warrants to Endo that Vernalis is the
sole owner of the Vernalis Patent Rights set out in Schedule 8 and
Registered Trademarks, and is the sole owner or licensee of all
other Vernalis IP, with the right to grant to Endo the rights which
are granted in this Agreement (including, without limitation, the
rights in the Elan Marks
granted to Vernalis pursuant to Clause 3.8), free and clear of any
Encumbrances which would prevent or impair the grant of such
rights and that Vernalis is otherwise free of any duties or
obligations to third parties which may conflict with the terms of
this Agreement.

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	15.3	 	Vernalis represents and warrants to Endo that Elan Group and
Vernalis have terminated the Second Amended and Restated Licence
Agreement, dated March 15, 2002, on the terms set forth in the Elan
Asset Transfer Agreement.
	 
	15.4	 	Vernalis represents and warrants to Endo that Vernalis has
acquired, pursuant to the Elan Asset Transfer Agreement, certain
rights of Elan Group under certain supply agreements and residual
contracts set forth in the Elan Asset Transfer Agreement and all of
Elan Group’s other rights and assets relating to the development,
production, marketing, distribution, sales and supply of the Product
in the Territory.
	 
	15.5	 	Vernalis represents and warrants that as at the Signature
Date and the Closing Date, there are no actual, and, so far as
Vernalis is aware, there are no threatened proceedings relating to
infringement of Third Party intellectual property rights by the use
of Vernalis IP and Vernalis has used all reasonable endeavours to
ensure that the Vernalis IP will not infringe the rights of any
Third Party and that the Vernalis IP is not the subject of any
actual or threatened challenge or revocation proceedings.
	 
	15.6	 	Save as is expressly stated in Clauses 15.1, 15.2, 15.3, 15.4
and 15.5 no representation, condition or warranty whatsoever is made
or given by or on behalf of Vernalis or Endo.
	 
	15.7	 	Vernalis shall have the control of clinical trials conducted
under the MAM & Paediatric Development Program and shall be the
sponsor of such trials and, in such capacity, shall be responsible
for the payment of any compensation due to any participants in such
trials who suffer death or bodily injury pursuant to any legal
rights or applicable industry
guidelines. Vernalis shall indemnify Endo and its Representatives
against any and all liability, loss, damage, cost and expense
(including legal costs) incurred or suffered by Endo and/or its
Representatives as a result of any claim brought against Endo
and/or its Representatives arising out of or related to any
clinical trials conducted by, or under the

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	 	 	supervision of,
Vernalis in connection with the Product, including clinical trials
conducted in connection with the MAM & Paediatric Development
Program.
	 
	15.8	 	Subject always to the provisions of Clause 15.12 Endo shall
be responsible for and shall indemnify Vernalis and its
Representatives against any and all liability, loss, damage, cost
and expense (including reasonable legal Costs) incurred or suffered
by Vernalis and/or its Representatives as a result of any claim
brought against Vernalis by a Third Party which arises as a result
of:

	15.8.1	 	The activities of Endo or its Representatives under this
Agreement (except as covered by Vernalis’ indemnity
obligations under Clause 15.9);
	 
	15.8.2	 	A breach by Endo of any representation or warranty made by
it in this Agreement;
	 
	15.8.3	 	A breach by Endo or its Affiliates of the Safety Agreement;
	 
	15.8.4	 	The Product(s) manufactured, marketed, distributed, or sold
by or on behalf of Endo having caused death or bodily injury,
except to the extent covered by Vernalis’ indemnity to Endo
under Clause 15.9;
	 
	15.8.5	 	The infringement or other violation of any intellectual
property rights of any Third Party arising out of the
manufacture, use or Commercialisation of the Product in the
Territory, solely to the extent related to activities,
resulting in or within the scope of
Endo IP under the terms of and during the term of this
Agreement;
	 
	15.8.6	 	The conduct of Endo’s business other than in connection
with this Agreement;

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	 	 	except, in each case, where the claim is the result, either
directly or indirectly, of a negligent act or omission or gross
misconduct on the part of Vernalis or any of its employees or
Affiliates.

	15.9	 	Subject to the provisions of Clause 15.12, Vernalis shall be
responsible for and shall indemnify Endo and its Representatives
against any and all liability, loss, damage, cost and expense
(including reasonable legal Costs) incurred or suffered by Endo
and/or its Representatives as a result of any claim brought against
Endo or its Representatives by a Third Party which arises as a
result of:

	15.9.1	 	The activities of Vernalis or its Representatives under
this Agreement (except as covered by Endo’s indemnity
obligations under Clause 15.8);
	 
	15.9.2	 	A breach by Vernalis of any representation or warranty made
by it in this Agreement;
	 
	15.9.3	 	A breach by Vernalis or its Affiliates of the Safety
Agreement or a breach by Vernalis of Clause 3.6;
	 
	15.9.4	 	Any claim relating to any Product manufactured on or before
the Closing Date, including Stock manufactured on or before
the Closing Date, including the 2.5 mg 9 Count Blister and
any claim that Product manufactured on or before the Closing
Date does not meet the Specifications set forth in the
Product Registrations;
	 
	15.9.5	 	Any claim in relation to Product in countries outside the
Territory, except where the claim is the result, either
directly or
indirectly, of any activities of Endo or any of its
employees or Affiliates;
	 
	15.9.6	 	The return of Product which is at wholesalers at the
Signature Date with an expiration date on or before the first
Year anniversary of the Signature Date;

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	15.9.7	 	Any claim by Elan Group or any Affiliate of Elan Group,
including claims arising out of the Second Amended and
Restated Licence Agreement between Vernalis and Elan Pharma
International Limited, dated March 15, 2002, the Agreement
Relating to the North American Frova Assets of Elan between
Elan and Vernalis, dated May 18, 2004, or any other agreement
between a member of the Elan Group and Vernalis or its
Affiliates relating to the Commercialisation of the Product;
	 
	15.9.8	 	Any claim that Product(s) has caused death or bodily injury
relating to (i) a design defect or alleged inherently
dangerous nature of the Product(s), to the extent such design
defect or alleged inherent danger is not caused by a
modification to the Product made by Endo, provided, that,
Vernalis’ indemnity obligation for such design defect or
alleged inherent danger shall not exceed *** USD (USD***) per
occurrence, or (ii) testing, clinical trials (included the
MAM & Paediatric Development Program) or other activities
undertaken by or on behalf of Vernalis with respect to
Product approvals by a Regulatory Authority;
	 
	15.9.9	 	Claims arising out of the manufacture, use, or
Commercialisation of the Product(s) as formulated as of the
Signature Date or the Closing Date and for the use approved
by Regulatory Authorities as of the Signature Date or the
Closing Date and for the MAM Product, each under the terms of
this Agreement relating to any
infringement or other violation of intellectual property
rights of any Third Party.

	15.10	 	Subject to the provisions of Clause 15.12, in addition to
Vernalis’ indemnification obligations under Clause 15.9, Vernalis
shall be responsible for and shall indemnify Endo and its
Representatives against any and all liability, loss, damage, cost
and expense, arising out of any

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	 	 	recall of the Product(s), voluntary
or otherwise, or closure or interruption of any manufacturing
facilities, where such recall, closure or interruption is
attributable to Product(s) manufactured prior to the Closing Date,
provided, that as soon as practicable following the Closing Date,
Endo has assisted in the generation and implementation of a
stratified sampling protocol to address blend uniformity in the
manufacturing of the Product.
	 
	15.11	 	Upon receipt by a Party and/or its Representatives seeking
indemnification hereunder (an “Indemnified Party”) of notice of any
action, suit, proceeding, claim, demand or assessment against such
Indemnified Party which might give rise to any liability, loss,
damage, cost or expenses, the Indemnified Party shall give prompt
written notice thereof to the Party from which indemnification is
sought (the “Indemnifying Party”) indicating the nature of claim and
the basis therefor, provided that the failure to give such prompt
notice shall not relieve the Indemnifying Party of its obligations
hereunder except to the extent the Indemnifying Party or the defense
of any such claim is materially prejudiced thereby. The
Indemnifying Party shall have the right, at its option, to assume
the defense of, at its own expense and by its own counsel, any such
claim involving the asserted liability of the Indemnified Party. If
any Indemnifying Party shall undertake to compromise or defend any
such asserted liability, it shall promptly notify the Indemnified
Party of its intention to do so, and the Indemnified Party shall
agree to cooperate fully with the Indemnifying Party and its counsel
in the compromise of, or defense against, any such asserted
liability; provided, however, that the Indemnifying Party shall not,
as part of any
settlement or other compromise, admit to liability or agree to an
injunction without the written consent of the Indemnified Party.
Notwithstanding an election by the Indemnifying Party to assume
the defense of any claim as set forth above, such Indemnified
Party shall have the right (at its own expense if the Indemnifying
Party has elected

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	 	 	to assume such defense) to employ separate
counsel and to participate in the defense of any claim. In the
event that the Indemnified Party has a reasonable basis to believe
that the Indemnifying Party may not have sufficient funds to
satisfy such indemnification obligation and the Indemnifying Party
upon request by the Indemnified Party cannot provide assurances of
its ability to satisfy such obligation to the reasonable
satisfaction of the Indemnified Party, the Indemnified Party may
deduct, defer or otherwise offset from any payment obligations
under this Agreement (if any) amounts reasonably necessary to
satisfy such indemnification obligation.
	 
	15.12	 	Notwithstanding any other provision of this Agreement,
neither Party shall be liable to the other in contract, tort,
negligence, breach of statutory duty or otherwise for any loss,
damage, costs or expenses of any nature whatsoever incurred or
suffered by the other or its Affiliates of an indirect or
consequential or punitive nature, including any indirect or
consequential economic loss or other indirect or consequential loss
of turnover, profits, loss of enterprise value, business or goodwill
or otherwise.
	 
	15.13	 	Each of Endo and Vernalis shall secure and maintain
comprehensive general liability insurance including, product
liability, contractual liability, personal injury, and insurance
against claims regarding the development, manufacture, delivery,
storage, handling and use of Product under this Agreement, in such
amounts as it customarily maintains for similar products and
activities in accordance with prudent insurance practice.
Notwithstanding the foregoing, each of Endo and
Vernalis shall be entitled to self-insure risks in accordance with
their respective risk management policies.

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	16.	 	CONFIDENTIALITY

	16.1	 	Each of the Parties undertakes and agrees to:

	16.1.1	 	keep the Confidential Information secret and confidential
and shall not disclose it to any Third Party without the
other Party’s prior written consent save as expressly or
impliedly permitted under this Agreement;
	 
	16.1.2	 	only use the Confidential Information for the purposes
envisaged under this Agreement and not to use the same for
any other purpose whatsoever; and
	 
	16.1.3	 	ensure that only those of its officers, consultants,
employees (including without limitation directors),
licensees, sub-licensees, Affiliates and such third parties
who are directly concerned with the carrying out of this
Agreement have access to the Confidential Information on a
reasonably applied “need to know” basis and are informed of
the secret and confidential nature of such Confidential
Information.

	16.2	 	The obligations of confidentiality referred to in Clause 16.1
shall not extend to any Confidential Information which:

	16.2.1	 	is or becomes generally available to the public otherwise
than by reason of breach by a Recipient Party of the
provisions of that Clause; or
	 
	16.2.2	 	is known to the Recipient Party and is at its free disposal
at the time of its disclosure to the Recipient Party (having
been generated independently by the Recipient Party or a
Third Party in circumstances where it can be shown that it
has not been derived
from access to the Disclosing Party’s Confidential
Information); or

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	16.2.3	 	is subsequently disclosed to the Recipient Party without
obligations of confidentiality by a Third Party owing no such
obligations to the Disclosing Party in respect of that
Confidential Information; or
	 
	16.2.4	 	is required by law to be disclosed (including as part of
any regulatory submission or approval process) and then only
(subject to Clause 16.3) when prompt written notice of this
requirement has been given to the Disclosing Party so that it
may, if so advised, seek appropriate relief to prevent such
disclosure provided always that in such circumstances such
disclosure shall be only to the extent so required and shall
be subject to prior consultation with the Disclosing Party
with a view to agreeing to the timing and content of such
disclosure.

	16.3	 	The requirement under Clause 16.2.4 to notify the Disclosing
Party when Confidential Information is required to be disclosed by
law shall not apply when such disclosure is required as part of any
regulatory submission or approval process or for the purposes of
marketing.
	 
	16.4	 	In the event that a court or Competent Authority assumes
partial or complete control over the assets of a Recipient Party
based on an Insolvency Event of that Party, the Recipient Party
shall:

	16.4.1	 	promptly notify such court or Competent Authority:

	(a)	 	that Confidential Information
received from the Disclosing Party is in the ownership
or co-ownership of the Disclosing Party; and
	 
	(b)	 	of the confidentiality
obligations under this Agreement; and

	16.4.2	 	to the extent permitted by law, take all steps necessary or
desirable to maintain the confidentiality and security of the

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	 	 	Disclosing Party’s Confidential Information and to ensure
that the court or Competent Authority maintains that
Confidential Information in confidence in accordance with
this Agreement.

	16.5	 	The Parties understand that remedies in damages may be
inadequate to protect against any breach of any of the provisions of
this Clause 16 by either Party or their employees, officers or any
other person acting in concert with it or on its behalf.
Accordingly, each Party shall be entitled to seek the granting of
interim and final injunctive relief by a court of competent
jurisdiction in the discretion of that court against any action that
constitutes any breach of this Clause 16.
	 
	16.6	 	The Parties agree that the obligations of confidentiality set
out in this Clause 16 shall continue to apply following the
termination of this Agreement for whatever reason.

	17.	 	TERM AND TERMINATION

	17.1	 	Subject to the other provisions of this Clause 17, this
Agreement shall expire on a country by country basis in the
Territory when no further payment is due from one Party to the other
hereunder in relation to sales of Product in that country, and in
such circumstances (or upon other cessation of a royalty obligation
hereunder for a Product in a country in the Territory), Endo shall
have a sub-licensable, fully paid-up, royalty free license to
develop, make, have made, use, Commercialise and have Commercialised
Product in the Territory under the Vernalis Know How.
	 
	17.2	 	Each of the Parties (the “Terminating Party”) shall have the
right to terminate this Agreement for cause with immediate effect
upon giving written notice of termination to the other (the
“Defaulting Party”) upon the occurrence of any of the following
events at any time during this Agreement:

	17.2.1	 	the Defaulting Party commits a material breach of this
Agreement which shall not have been remedied (i) within
thirty

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	 	 	(30) days of the receipt by it of a written notice
from the other Party identifying the breach and requiring its
remedy, with respect to any failure to pay amounts due
pursuant to Clause 11 (except in the case of failure to pay
amounts that are subject to good faith dispute) and (ii)
within ninety (90) days of the receipt by it of a written
notice from the other Party identifying the breach and
requiring its remedy, with respect to any other material
breaches; and
	 
	17.2.2	 	if an Insolvency Event occurs in relation to the Defaulting
Party. In any event when a Party first becomes aware of the
likely occurrence of any Insolvency Event in regard to that
Party, it shall promptly so notify the other Party in
sufficient time to give the other Party sufficient notice to
protect its interests under this Agreement

	17.3	 	Endo shall have the right at any time to give twelve (12)
months’ notice of termination in writing to Vernalis if in Endo’s
sole opinion Endo decides not to proceed with this entire Agreement
for whatever reason. including but not limited to safety, efficacy
or other scientific or technical or strategic commercial or legal
reasons. This Agreement shall terminate upon expiration of such
twelve (12) month notice period. For the avoidance of doubt it is
declared and agreed that any payments due and owing during such
notice period shall continue to be due and payable.
	 
	17.4	 	During any period during which notice has been given by
Vernalis under Clause 17.2 or by Endo under Clause 17.3, Endo and
its Affiliates shall do all such acts and things that Vernalis may
reasonably require to prepare for the transition of the Product back
to Vernalis as envisioned in Clause 18.1.

	18.	 	CONSEQUENCES OF TERMINATION

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	18.1	 	Upon a termination of this Agreement by Endo pursuant to
Clause 17.3 or by Vernalis pursuant to Clause 17.2 (for cause)
(which the Parties agree shall not terminate the provisions of this
Agreement expressed to survive its termination), Endo shall:

	18.1.1	 	have no further licenses under this Agreement and shall not
after the date of termination itself develop, manufacture,
have manufactured, use or Commercialise Product or otherwise
use the Vernalis IP, except that in the case of termination
by Vernalis under Clause 17.2 Endo shall have the right to
sell that part of its inventory of Product on hand as of the
date of termination which is the subject of orders for
Product accepted prior to the date of termination for a
period of six (6) months after the date of termination, and,
within thirty (30) days after disposition of such inventory
pursuant to the fulfilment of such orders, Endo will forward
to Vernalis a final report and pay all royalties due
hereunder for Net Sales of Product during such period;
	 
	18.1.2	 	grant to Vernalis, to the extent Endo has rights to license
the same, an exclusive fully paid up royalty free
sub-licensable licence under any Endo IP (excluding the Endo
name, mark and associated logo) and Endo Copyright used
previously by Endo hereunder, solely to develop, have
developed, make, have made, use, have used and Commercialise
the Product in the Territory (including, for the avoidance of
doubt, all and any Product Enhancements made by Endo, its
Affiliates, distributors or contractors, but on such terms to
be agreed by the Parties negotiating in good faith) and to
use such Endo IP as necessary for this purpose. For the
avoidance of doubt it is declared and agreed that the
provisions of this Clause 18.1.2 shall not vary any previous
license granted by Endo under the provision of Clause 8.15;

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	18.1.3	 	deliver up to Vernalis any Documents and Know How comprised
in such Endo IP and also any and all Vernalis IP;
	 
	18.1.4	 	deliver up to Vernalis any and all stocks of Product in its
possession, power, custody or control subject always to
Endo’s right to sell Product which is the subject of
pre-termination date orders pursuant to Clause 18.1.1;
	 
	18.1.5	 	commensurate with legislative and regulatory requirements,
transfer to Vernalis or its nominee all Marketing
Authorisations, INDs, NDAs and other regulatory filings and
approvals for the Product. In the event that in any country
such a transfer is not possible, Endo shall use reasonable
endeavours to ensure that Vernalis has the benefit of the
relevant Marketing Authorisations, INDs, NDAs and other
regulatory filings and approvals and, to this end, consents
to any Regulatory Authority cross-referencing to the data and
information on file with any Regulatory Authority as may be
necessary to facilitate the granting of second Marketing
Authorisations, INDs, NDAs, regulatory filings and approvals
to Vernalis, and Endo agrees to complete whatever other
procedures are reasonably necessary in relation to the same
to enable Vernalis (either itself or in conjunction with a
Third Party) freely to develop and sell the Product in
substitution for Endo at Vernalis’ expense;
	 
	18.1.6	 	use its reasonable endeavours to assign to Vernalis the
benefit and burden of any agreement made between Endo and any
clinical researcher, contract manufacturer, managed care
provider or sub-licensee in relation to Product;
	 
	18.1.7	 	transfer to Vernalis the Domain Name registrations;
	 
	18.1.8	 	provide Vernalis with all reasonable assistance in relation
to Vernalis’ appointment of a Third Party manufacturer of
Product;

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	18.1.9	 	if Endo has itself been manufacturing Product, supply or
procure the supply to Vernalis with Product pursuant to the
terms of a manufacture and supply agreement to be agreed in
good faith between the Parties but at a cost of goods no
higher to Vernalis than Endo’s fully absorbed costs
(calculated in accordance with GAAP) plus *** which agreement
shall contain an obligation on Endo to supply Vernalis with
its requirements of Product subject to the capacity of
manufacturing plant for at least two (2) years following
termination; and
	 
	18.1.10	 	the provisions of Clauses 10, 11 (with respect to Endo’s
sale of Product pursuant to Clause 18.1.1), 14, 15, 16 and 19
to 30 shall continue to apply.

	18.2	 	Upon the termination of this Agreement by Endo pursuant to
Clause 17.2 (termination for cause), the licenses granted to Endo
hereunder, at Endo’s sole option, shall continue to apply and:

	18.2.1	 	in the case of termination under Clause 17.2.1, such
licenses shall continue on the terms of this Agreement save
that Endo shall have a right to set off against the royalties
due under Clauses 11.9 and 11.12 any damages which it
establishes are due to it under the procedures set out in
Clause 22; and
	 
	18.2.2	 	in the case of termination under Clause 17.2.2, such
licences shall continue on the terms of this Agreement.

	19.	 	ASSIGNMENT/CHANGE OF CONTROL

	19.1	 	Neither this Agreement nor any interest hereunder (and in the
case of Endo, the Endo IP or the Endo Copyright, the Product
Registrations or any other Marketing Authorisations, INDs or NDAs
relating to the Product) shall be assignable or transferable by
either Party without the written consent of the other, such consent
not to be unreasonably withheld or delayed, provided, however, that
(i) Endo may assign this

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	 	 	Agreement or any part of its rights and obligations hereunder, to
any Affiliate, and (ii) Vernalis may assign this Agreement or any
part of its rights and obligations hereunder, to any UK Affiliate,
provided, however that in no event shall Vernalis transfer any
right, title or interest in the Vernalis IP to an Affiliate that
is not a UK Affiliate, and provided further that Endo shall have
no increased liability under this Agreement which would not have
arisen if such assignment had not occurred.
	 
	19.2	 	Subject to the provisions of Clause 19.1 hereof, either Party
may merge or consolidate with any corporation, or transfer all or
substantially all of its assets to which this Agreement relates,
without obtaining the consent of the other Party.
	 
	19.3	 	Vernalis shall not, without the prior written consent of
Endo, which shall not be unreasonably withheld, intentionally or
otherwise and whether or not by reason of its own actions or
omissions or those of others, change its “Centre of Main Interests”
(that term having the meaning ascribed to it in the EC Regulation on
Insolvency Proceedings 2000 (No. 1346/2000 of 29 May 2000) from
England & Wales to elsewhere. It is hereby agreed that any Change
of Control of Vernalis or Vernalis plc by a Person with a “Centre of
Main Interests” outside England and Wales shall not be deemed a
change in Vernalis’ “Centre of Main Interests”, provided that such
Person continues Vernalis’ business operations in connection with
this Agreement in England and Wales.

	20.	 	FORCE MAJEURE

	20.1	 	If a Party (the “Affected Party”) is unable to carry out any
of its obligations under this Agreement due to Force Majeure, this
Agreement shall remain in effect but the Affected Party’s relevant
obligations under this Agreement and the corresponding obligations
of the other Party (“Non-Affected Party”) under this Agreement,
shall be suspended for a period equal to the circumstance of Force
Majeure provided that:

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	20.1.1	 	the suspension of performance is of no greater scope than
is required by the Force Majeure;
	 
	20.1.2	 	the Affected Party immediately gives the Non-Affected Party
prompt written notice describing the circumstance of Force
Majeure, including the nature of the occurrence and its
expected duration, and continues to furnish regular reports
during the period of Force Majeure and notifies the
Non-Affected Party immediately of the cessation of the Force
Majeure;
	 
	20.1.3	 	the Affected Party uses all reasonable efforts to remedy
its inability to perform and to mitigate the effects of the
circumstance of Force Majeure; and
	 
	20.1.4	 	as soon as practicable after the event which constitutes
Force Majeure the Parties discuss how best to continue their
operations as far as possible in accordance with this
Agreement.

	20.2	 	If the circumstance of Force Majeure prevail for a continuous
period in excess of six (6) months, the Non-Affected Party may
without prejudice to any other rights or remedies which may be
available to it, terminate this Agreement with immediate effect by
giving written notice of termination to the other Party. In the
event of termination under this Clause 20.2 by Vernalis, the
provisions of Clause 18.1 shall apply.

	21.	 	GOVERNING LAW

	21.1	 	The validity, construction and interpretation of this
Agreement and any determination of the performance which it requires
shall be governed by the laws of the State of New York (without
reference to New York choice of law rules).

	22.	 	JURISDICTION AND DISPUTE RESOLUTION

	22.1	 	In the event of any material dispute concerning rights or
obligations under this Agreement or in material breach of this
Agreement then the

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	 	 	Parties shall comply with the following procedure: the Chief
Executive Officer of Vernalis and the Chief Executive Officer of
Endo or their nominee shall be notified in writing of the dispute
by either Party. They or their nominees shall meet to resolve the
dispute in good faith. If such resolution is not reached within
sixty (60) days of such written notice, then the provision of
Clause 22.2 shall apply.
	 
	22.2	 	All disputes between the Parties arising under, out of or
relating to this Agreement including its formation, validity,
binding effect, interpretation, performance breach or termination as
well as non-contractual claims and including disputes relating to
pre-contractual representations shall, save as specified in Clauses
11.16, 16.5 and 22.1 and Schedule 2, paragraphs 5 to 7, be
exclusively settled by arbitration as follows:

	22.2.1	 	The arbitration shall be in accordance with the
International Arbitration Rules of the American Arbitration
Association (“AAA”) in effect on the date of the filing of
the arbitration (the “Rules”). The seat of arbitration shall
be New York, NY;
	 
	22.2.2	 	The number of arbitrators shall be three, chosen in
accordance with the procedures set out in Clauses 22.2.3 to
22.2.4 inclusive. The award of the arbitrators shall be
final and binding on the Parties;
	 
	22.2.3	 	Each Party shall appoint one arbitrator. If within 30 days
after receipt of the claimant’s notification of the
appointment of an arbitrator the respondent has not notified
the claimant of the arbitrator he appoints, the second
arbitrator shall be appointed by AAA;
	 
	22.2.4	 	The two arbitrators so appointed shall choose a further
arbitrator who will act as the presiding arbitrator of the
tribunal. If within thirty (30) days of the appointment of
the second arbitrator the

- 92 -

 

	 	 	two Party-appointed arbitrators have not agreed upon a
presiding arbitrator then the presiding arbitrator shall be
appointed by the AAA;
	 
	22.2.5	 	During the course of the arbitration, each Party shall
provide to the other copies of Relevant Material. Relevant
Material is defined as all documents or other material
relevant to the matters at issue in the arbitration with the
exception of (i) communications to and from lawyers admitted
to practice law or practicing law (whether or not employed by
a Party) for the purpose of obtaining and giving legal
advice; (ii) communications between the Parties and/or their
respective advisers in relation to the terms of a settlement
of the particular dispute or disputes which is or are the
subject of the arbitration proceedings;
	 
	22.2.6	 	The arbitrators may, if requested by one of the Parties,
order the preparation of lists of the Relevant Material for
initial evaluation by the requesting Party prior to
disclosure and/or inspection of the Relevant Material. The
arbitrators shall also have the power to order production of
the Relevant Material on whatever terms the arbitrators deem
fit including the need for production to take place on an
urgent basis and the reimbursement of all reasonable Costs of
production by the requesting Party to the furnishing Party.
Any dispute as to whether a particular document or other
material should be classified as Relevant Material or
otherwise disclosed in the course of the arbitration shall be
determined in the sole discretion of the arbitrators. The
classification of a document or other material as Relevant
Material shall not determine whether such material shall be
admissible in evidence in the arbitration. Questions of
admissibility shall be decided by the arbitrators in their
sole discretion. In the event that the parties seek to take
deposition discovery in the course of a

- 93 -

 

	 	 	proceeding, each Party agrees that it will limit the number of depositions
that it will take to 10 depositions, unless the arbitrators
determine that additional depositions are warranted;
	 
	22.2.7	 	The arbitration shall be confidential. No Party shall use
or disclose any Relevant Material obtained under this
paragraph for any purpose except in the course of the conduct
of the arbitration and (as far as applicable) proceedings
before any court, and then only to the extent necessary for
the implementation and enforcement of any award of the
arbitrators;
	 
	22.2.8	 	The seat of arbitration shall be New York, NY, although
hearings may take place in any other venue as the Parties may
agree. In rendering an award the arbitrators shall follow
the laws of the State of New York. The arbitrators are not
empowered to award punitive or exemplary damages, and the
Parties hereby waive any rights to any such damages; and
	 
	22.2.9	 	The arbitration award shall be final and binding on the
Parties and may be entered and enforced in any court having
jurisdiction over any Party or any of its assets.

	22.3	 	All submissions and awards in relation to arbitration
hereunder shall be made in English and all arbitration proceedings
shall be conducted in English.

	23.	 	WAIVER

	23.1	 	Save as expressly provided in this Agreement, neither Party
shall be deemed to have waived any of its rights or remedies
whatsoever, unless the waiver is made in writing, signed by a duly
authorised representative of that Party and may be given subject to
any conditions thought fit by the grantor. Unless otherwise
expressly stated, any waiver shall be effective only in the instance
and for the purpose for which it is given.

- 94 -

 

	24.	 	SEVERANCE OF TERMS

	24.1	 	If any provision(s) of this Agreement are or become invalid,
are ruled illegal by any Court of competent jurisdiction or are
deemed unenforceable under then current applicable law, it is the
intention of the Parties that the remainder of this Agreement shall
not be affected thereby, provided that a Party’s rights are not
materially affected. The Parties hereto covenant and agree to
re-negotiate any such provision in good faith in order to provide a
reasonably acceptable alternative to the provision that is invalid,
illegal, or unenforceable, it being the intent of the Parties that
the basic purposes of this Agreement are to be effectuated.
	 
	24.2	 	If the whole or any part of this Agreement is or becomes or
is declared illegal, invalid or unenforceable in any jurisdiction
for any reason (including both by reason of the provisions of any
legislation and also by reason of any decision of any court or
Competent Authority which either has jurisdiction over this
Agreement or has jurisdiction over any of the Parties):

	24.2.1	 	in the case of the illegality, invalidity or
un-enforceability of the whole of this Agreement, it shall
terminate in relation to the jurisdiction in question; or
	 
	24.2.2	 	in the case of the illegality, invalidity or
un-enforceability of part of this Agreement, that part shall
be severed from this Agreement in the jurisdiction in
question and that illegality, invalidity or un-enforceability
shall not in any way whatsoever prejudice or affect the
remaining parts of this Agreement which shall continue in
full force and effect provided that the said remaining parts
continue to satisfy the commercial intentions of the Parties
and provided that the remaining parts do constitute a
substantial part of this Agreement and provided that the
provision of Clause 24.1 shall then apply.

- 95 -

 

	25.	 	ENTIRE AGREEMENT/VARIATIONS

	25.1	 	This Agreement, together with the Loan Agreement ,the
Security Agreement and the Safety Agreement, constitutes the entire
agreement and understanding between the Parties and supersedes all
prior oral or written understandings, arrangements, representations
or agreements between them relating to the subject matter of this
Agreement. The Parties acknowledge that no claims shall arise in
respect of any understandings, arrangements, representations or
agreements so superseded. No director, employee or agent of any
Party is authorised to make any representation or warranty to
another Party not contained in this Agreement, and each Party
acknowledges that it has not relied on any such oral or written
representations or warranties. Nothing in this Agreement removes or
overrides any right of action by any Party in respect of any
fraudulent misrepresentation, fraudulent concealment or other
fraudulent action.
	 
	25.2	 	Neither Party or its Affiliates shall represent itself as an
agent of the other Party or its Affiliates for any purpose, nor
pledge the other Party or its Affiliates’ credit, or give any
condition or warranty or make any representation on behalf of the
other Party or its Affiliates, other than representations consistent
with the Marketing Authorisations, or commit the other Party or its
Affiliates to any contracts.
	 
	25.3	 	No variation, amendments, modification or supplement to this
Agreement shall be valid unless agreed in writing in the English
language and signed by a duly authorised representative of each
Party.
	 
	25.4	 	All rights and licenses granted pursuant to this Agreement
are, and shall otherwise be deemed to be, for purposes of 11 U.S.C.
365 (n) of the Bankruptcy Laws, licenses of rights to “intellectual
property” as defined under 11 U.S.C. 101(35A) of the Bankruptcy
Laws. The Parties agree that Endo, as a licensee of such rights
under this Agreement, shall retain and may fully exercise all of its
rights, including any right to enforce any

- 96 -

 

	 	 	exclusivity provision of
this Agreement, remedies, and elections enforce any exclusivity provision of this Agreement, remedies, and
elections under the Bankruptcy Laws. To the fullest extent
permitted by law, the Parties further agree that, in the event of
the commencement of a bankruptcy proceeding by or against Vernalis
under the Bankruptcy Laws, Endo shall be entitled to all
applicable rights under 11 U.S.C. 365 (n) of the Bankruptcy Laws,
including copies and access to, as appropriate, any such
intellectual property and all embodiments of such intellectual
property upon written request therefor by Endo, and such, if not
already in its possession, shall be promptly delivered to Endo.

	26.	 	NOTICES

	26.1	 	Any notice or other communication given pursuant to or made
under or in connection with the matters contemplated by this
Agreement shall be in writing in the English language and shall be
delivered by courier, sent by post or sent by facsimile to the
address or facsimile number of the recipient set out in Schedule 11
or as specified by the recipient from time to time in accordance
with Clause 26.3. Notices sent by E-Mail shall not be valid of
themselves and must be confirmed in hard copy form by courier, by
post or facsimile.
	 
	26.2	 	Any notice given pursuant to this Clause 26 shall be deemed
to have been received:-

	26.2.1	 	if delivered by courier, at the time of delivery; or
	 
	26.2.2	 	if sent by post:

	(a)	 	where posted in the country of
the addressee, on the second working day following the
day of posting, and
	 
	(b)	 	where posted in any other
country, on the fifth working day following the day of
posting; or

- 97 -

 

	26.2.3	 	if sent by facsimile, on acknowledgement by the recipient
facsimile receiving equipment on a Business Day if the
acknowledgement occurs before 1700 hours local time on a
Business Day of the recipient and in any other case on the
following the Business Day.

	26.3	 	A Party may notify the other Parties to this Agreement of a
change of its name, relevant addressee, address or facsimile number
for the purposes of Schedule 11 provided that such notification
shall only be effective on:

	26.3.1	 	the date specified in the notification as the date on which
the change is to take place; or
	 
	26.3.2	 	if no date is specified or the date specified is less than
(five) clear Business Days after the date on which the notice
is given, the date falling five clear Business Days after
notice of any such change has been given.

	26.4	 	For the avoidance of doubt, the Parties agree that the
provisions of this Clause 26 shall not apply in relation to the
service of Service Documents (as defined in Clause 26.5).
	 
	26.5	 	“Service Document” means a writ, summons, order, judgement or
other document related to or in connection with any Court
proceeding, cause, matter or action arising out of or connected in
any way with this Agreement.

	27.	 	COUNTERPARTS

	27.1	 	This Agreement may be executed in any number of counterparts
and by the Parties on separate counterparts, each of which when so
executed shall be an original of this Agreement, and all of which
shall together constitute one and the same instrument. Complete
sets of counterparts shall be lodged with each Party.

- 98 -

 

	27.2	 	Nothing in this Agreement and no action taken by the Parties
pursuant to this Agreement shall constitute or be deemed to
constitute a partnership, association, joint venture or other
co-operative entity between the Parties and neither Party shall have
any authority to bind the other in any way except as provided in
this Agreement.

	28.	 	COSTS

	28.1	 	Each Party shall bear its own costs, legal fees and other
expenses incurred in the negotiation, preparation, execution and
implementation of this Agreement and the documents referred to
herein.

	29.	 	ANNOUNCEMENTS

	29.1	 	No public announcements or other disclosure to third parties
concerning the financial or other terms of this Agreement or
financial or business information with respect to the other Party
(including projections) shall be made, whether directly or
indirectly, by either Party to this Agreement, except as may be
legally required or as may be required for recording purposes,
without first obtaining the approval of the other Party and
agreement upon the nature and text of such announcement or
disclosure, with the exception that:

	29.1.1	 	a Party may disclose the full terms of this Agreement to
its investment bankers, lawyers, accountants and other
professional advisors or a Third Party seeking to invest in,
lend funds to acquire or merge with or be acquired by such
Party without the other Party’s prior approval provided that
such disclosure is made under terms of confidentiality
whether express or implied; and
	 
	29.1.2	 	a Party may disclose the terms of this Agreement to any
securities exchange or regulatory authority or government
body to which either Party is subject or submits, wherever
situated, including (without limitation) the US Securities
Exchange Commission, the UK Stock Exchange or the Panel on
Take-overs

- 99 -

 

	 	 	and Mergers, whether or not the requirement has
the force of law provided that it takes advantage of all
provisions to keep confidential as many terms of this
Agreement as possible.

	29.2	 	In respect of those public announcements and disclosures not
permitted by Clause 29.1 and with the exception of publications
covered by Clause 6.2.3 and the agreed press releases announcing
this transaction,
the Party desiring to make any such public announcements or other
disclosure shall inform the other Party of the proposed
announcements or disclosure in reasonably sufficient time prior to
public release, and shall provide the other Party with a written
copy thereof, in order to allow such Party to comment upon such
announcement or disclosure, which comments shall be provided by
such other Party within five (5) Business Days. The Parties shall
jointly develop press releases and information materials that can
be used by either Party for presentations to financial advisers
and similar recipients.
	 
	29.3	 	No Party shall make any public statement or communication in
derogation of the other Party, its officers, directors, shareholders
and Affiliates at any time.

- 100 -

 

IN WITNESS WHEREOF the Parties have executed this agreement the day and year

first above written.

	 	 	 	 	 	 	 	 	 
	SIGNED by Simon Sturge, Chief Executive Officer

	 	 	)	 	 	 	 	 
	for and on behalf of

	 	 	)	 	 	SIMON STURGE

	VERNALIS DEVELOPMENT LIMITED

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED by Simon Sturge, Chief Executive Officer

	 	 	)	 	 	 	 	 
	for and on behalf of

	 	 	)	 	 	SIMON STURGE

	VERNALIS PLC

	 	 	)	 	 	 	 	 
	(As Guarantor under Clause 14 hereof)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED by Carol A. Ammon, Chairman

	 	 	)	 	 	 	 	 
	     and Chief Executive Officer
	 	 	 	 	 	 	 	 
	for and on behalf of

	 	 	)	 	 	CAROL AMMON

	ENDO PHARMACEUTICALS INC.

	 	 	)	 	 	 	 

- 101 -

 

SCHEDULE 1

INITIAL MARKETING BUDGET

ESTIMATED COMMITMENT

(in USD millions)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-MAM
	 	No-MAM Approval	 	 	*	**	 	 	*	**	 	 	*	**
	Year 1
(2005)
	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	Year 2
(2006)
	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	Post-MAM
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year 1
(estimated
***)
	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	Year 2
(estimated
***)
	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**

***

***

***

- 102 -

 

SCHEDULE 2

INVENTORY STATEMENT

	1.	 	Immediately following the Closing Date Vernalis shall (at its cost)
ensure that Vernalis’ accountants prepare a statement (in the form of
paragraph 2) (the “Initial Statement”) specifying the amount of the Stock
and the actual stock value valued in accordance with paragraph 2 which
Vernalis owns on the proposed Closing Date. Vernalis shall supply a copy
of the Initial Statement to Endo and Endo’s accountants respectively and
at the same time shall give them access to those assets, documents and
records within Vernalis’ possession or control which they may reasonably
require for the purpose of agreeing the Initial Statement.
	 
	2.	 	The form of the Initial Statement (incorporating the values for different
types of Stock) is as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Expiration
	 	 	Units
	 	Cost/Unit
	 	Lot No.
	 	Date

	Frova 2.5mg 9 Count
Blister
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Frova 2.5 mg Tab 2 count
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	***
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	***
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	***
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	3.	 	Within ten (10) days of receipt of the Initial Statement Endo shall
notify Vernalis whether or not it agrees with the Initial Statement.
	 
	4	 	If Endo notifies its agreement with the Initial Statement within the ten
(10) day period referred to in paragraph 3 or fails to give any
notification within that period, the Initial Statement shall constitute
the Inventory Statement. If Endo notifies Vernalis within the ten (10)
day period referred to in paragraph 3 that it disagrees with the Initial
Statement, paragraphs 5, 6 and 7 apply.
	 
	5.	 	If within ten (10) days starting on the day after receipt of the
notification referred to in paragraph 4, Endo and Vernalis have not agreed
the items in dispute in relation to the Initial Statement, either Party
may refer the items in

- 103 -

 

	 	 	dispute to a partner of at least 10 years qualified
experience at an internationally recognized independent accounting firm
agreed by the Parties in writing, or failing agreement on the identity of
the internationally recognized in depending
accounting firm within fifteen (15) days starting on the day after
receipt of the notification referred to in paragraph 4, an
internationally recognized independent accounting firm appointed on the
application of either Party by the President for the time being of the
Institute of Chartered Accountants in England and Wales (the “Expert”).
	 
	6.	 	The Expert shall act on the following basis:

	(a)	 	the Expert shall act as an expert and not as an arbitrator;
	 
	(b)	 	the Expert’s terms of reference shall be to determine the
matters in dispute within 20 days of his appointment;
	 
	(c)	 	the Parties shall each provide the Expert with all
information relating to the items in dispute which the Expert
reasonably requires and the Expert shall be entitled (to the extent
he considers appropriate) to base his determination on such
information;
	 
	(d)	 	the decision of the Expert is, in the absence of fraud or
manifest error, final and binding on the Parties; and
	 
	(e)	 	the Expert’s costs shall be paid by Endo and Vernalis as the
Expert may determine.

	7.	 	The Initial Statement, adjusted in accordance with the agreement, if any,
between Endo and Vernalis pursuant to paragraph 5 and the decision of the
Expert in accordance with paragraph 6 shall constitute the Inventory
Statement and be final and binding on the Parties.
	 
	8.	 	For the avoidance of doubt, the Initial Statement shall not include, and
Endo shall not acquire, any Stock of Frova 2.5 mg 9 Count Blister with an
expiration date on or before the *** anniversary of the Signature Date.
Vernalis shall destroy any such stock with an expiration date on or before
the *** anniversary of the Signature Date promptly after the Closing Date.
	 
	9.	 	For the avoidance of doubt, the Initial Statement shall not include, and

Endo shall not acquire, any stock of Frova 2.5 mg Tab 2 Count Blisters
with an expiration date before the ***. Vernalis shall destroy any such
stock with an expiration date before *** promptly after the Closing Date.
Endo shall not acquire more than *** Frova 2.5 mg Tab 2 Count Blisters.
	 
	10.	 	Endo will retest any Stock set forth in Clauses 1.1.94(c), 1.1.94(d) and
1.1.94(e) on or about the expiration date of such Stock. In the event
that any re-tested Stock fails the re-test, Vernalis shall pay to Endo the
Cost of such Stock within 30 days of notification of such failed retest.

- 104 -

 

SCHEDULE 3

MAM & PAEDIATRIC DEVELOPMENT PROGRAM

Vernalis will complete the long-term safety trial in menstrual migraine
prophylaxis [PROTOCOL NUMBER: VML 251-3MAM03] entitled: “An open label study to
assess the safety, tolerability and efficacy of frovatriptan in the prevention
of menstrually-associated migraine (MAM) headaches”

Subject to agreement with FDA Vernalis will undertake the single efficacy trial
in menstrual migraine prophylaxis [PROTOCOL NUMBER: VML 251-3MAM02] as amended
following discussion with the FDA, entitled: “A double-blind,
placebo-controlled, parallel group study, with an open-label extension phase,
to assess the efficacy, tolerability and safety of oral frovatriptan in the
prevention of menstrually-associated migraine (MAM) headaches in a ‘difficult
to treat’ population”

Vernalis will undertake a single safety and a single efficacy trial of
frovatriptan as abortive therapy in paediatrics in accordance with FDA
requirements.

- 105 -

 

SCHEDULE 4

MANAGED CARE AGREEMENTS AND ASSIGNED CONTRACTS

Managed Care Agreements

	 	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Amended Formulary
Reimbursement
Agreement
	 	***
	 
	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Rebate Agreement
	 	***
	 
	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Rebate Agreement
	 	***
	 
	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Amended Rebate
Agreement
	 	***
	 
	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Rebate Agreement
	 	***
	 
	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Rebate Agreement
	 	***
	 
	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Rebate Agreement
	 	***
	 
	 	 	 	 	 	 
	Elan
Pharmaceuticals,
Inc.

	 	***
	 	Rebate Agreement
	 	***
	 
	 	 	 	 	 	 
	Vernalis

	 	***
	 	Rebate Agreement
for Medicare
Endorsed Discount
Card Programs	 	 
	 
	 	 	 	 	 	 
	Vernalis

	 	***
	 	Medicare Endorsed
Prescription Drug
Discount Card
Agreement	 	 
	 
	 	 	 	 	 	 
	Vernalis

	 	***
	 	Rebate Agreement
for Medicare
Endorsed Discount
Card Program	 	 

- 106 -

 

Phase IV Commitments in relation to the Product

Research Grant between Elan Pharmaceuticals, Inc. and New England Center for
Headache, effective December 30, 2003

Research Grant, between Elan Pharmaceuticals, Inc. and Diamond Headache Center,
effective December 30, 2003

- 107 -

 

SCHEDULE 5

ESTIMATED DETAILING EFFORT1 2 3

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Primary	 	Secondary	 	 	 	 
	 	 	 	 	 	 	Details	 	Details	 	Total Details	 	Annual Details
	Pre-MAM	 	 	 	 	 	(000s)	 	 	 	 
	Year ***
	 	Specialty	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	 
	 	Pharma 1	 	 	*	**	 	 	*	**	 	 	*	**	 	 	 	 
	Year ***
	 	Specialty	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	 
	 	Pharma 1	 	 	*	**	 	 	*	**	 	 	*	**	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Primary	 	Secondary	 	 	 	 
	 	 	 	 	 	 	Details
	 	Details
	 	Total Details
	 	Annual Details

	Post-MAM	 	 	 	 	 	(000s)	 	 	 	 
	Year ***
	 	Specialty	 	 	*	**	 	 	*	**	 	 	*	**	 	 	 	 
	(Estimated)
	 	Pharma 1	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	 
	 	Pharma 2	 	 	*	**	 	 	*	**	 	 	*	**	 	 	 	 
	Year ***
	 	Specialty	 	 	*	**	 	 	*	**	 	 	*	**	 	 	 	 
	(Estimated)
	 	Pharma 1	 	 	*	**	 	 	*	**	 	 	*	**	 	 	*	**
	 
	 	Pharma 2	 	 	*	**	 	 	*	**	 	 	*	**	 	 	 	 

1 Assumes full field force complement. To be adjusted for vacancy rate.

2 Includes total field force complement (including Vernalis field force
representatives for which Vernalis is reimbursed by Endo pursuant to Clause
9.1).

3 Table assumes *** (see Schedule 1 for definitions).

- 108 -

 

SCHEDULE 6

SUPPLY AND TECHNICAL AGREEMENTS

	1.	 	Supply Agreement between Elan Pharma International Limited and
Oxford Asymmetry International PLC dated December 28 2000
	 
	2.	 	First Amendment to the Supply Agreement between Elan Pharma
International Ltd and Evotec OIA Ltd, dated 1 January 2004
	 
	3.	 	Technical Agreement between Evotec OAI Ltd and Elan, dated 12
October 2003
	 
	4.	 	Frovatriptan Supply Agreement by and between Elan Pharma
International Limited and Galen Limited dated as of January 1 2002
	 
	5.	 	Technical Agreement between Elan Pharmaceuticals, Inc. and Galen
Limited dated July 2 2003
	 
	6.	 	Novation agreement dated 18th May, 2004 between Elan Pharma
International Limited, Evotec OAI Limited and Vernalis Development
Limited in respect of the supply agreement between Elan Pharma
International Limited and Evotec OAI Limited (formerly Oxford Asymmetry
International plc) dated 28th December, 2000.
	 
	7.	 	Novation agreement dated 18th May, 2004 between Elan Pharma
International Limited, Galen Limited and Vernalis Development Limited
in respect of the frovatriptan supply agreement between Elan Pharma
International Limited and Galen Limited dated 1st January, 2002

- 109 -

 

SCHEDULE 7

FROVA LOGO

- 110 -

 

SCHEDULE 8

VERNALIS PATENT RIGHTS

US, Canadian (CA) and Mexican (MX) Patents & Patent Applications

	 	 	 	 	 	 	 	 	 
	Application No.	 	Application Date	 	Patent No.	 	Publication Date	 	Status
	US167846

US442719

US442720

US770926

US781990

US451898

US446655

US451846

US689661

	 	23.12.1993

15.05.1995

17.05.1995

23.12.1996

06.01.1997

26.05.1995

16.12.1993

26.05.1995

13.10.2000
	 	US5464864

US5637611

US5827871

US5962501

US5917054

US5616603

US5618947

US5618948

US6359146
	 	07.11.1995
10.06.1997
27.10.1998
05.10.1999
29.06.1999
01.04.1997
08.04.1997
08.04.1997
19.03.2002
	 	Granted

Granted

Granted

Granted

Granted

Granted

Granted

Granted

Granted
	 
	 	 	 	 	 	 	 	 
	CA2113726

CA2152630

CA2328345

	 	17.06.1992

16.12.1993

16.04.1999
	 	N/A

N/A

N/A
	 	N/A

N/A

N/A
	 	Pending

Pending

Pending
	 
	 	 	 	 	 	 	 	 
	MX923444

MX940035

MX010127

	 	26.06.1992

03.01.1994

16.04.1999
	 	MX193793

N/A

N/A
	 	22.10.1999

N/A

N/A
	 	Granted

Pending

Pending

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SCHEDULE 9

INFORMATION FOR MARKETING PLAN

	(a)	 	Market analysis
	 
	(b)	 	Promotional activities to be carried out including:

	(i)	 	marketing effort in the form of conferences
	 
	(ii)	 	advertising and promotional materials to be run and published

	(c)	 	Sales forecasts:         ***

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SCHEDULE 10

CO-PROMOTION TERMS

	1.	 	Endo and Vernalis will form a Joint Co-Promotion team to co-ordinate the
Parties’ Co-promote activities (“Joint Co-Promotion Team”). Any disputes
on the Joint Co-Promotion Team shall be promptly referred to the
representative Heads of Marketing of the Parties for resolution. The
Heads of Marketing shall use their best endeavours to resolve the dispute
within thirty (30) days of the reference of the dispute to them, failing
which Endo’s decision shall be final. The Joint Co-Promotion Team shall
be a channel for organising communication of Endo’s sales and marketing
plans to Vernalis and sales force liaison, including organising training
on the promotion messages, marketing materials and training aids.
	 
	2.	 	Endo will determine, in consultation with the Joint Co-Promotion Team,
the number of field sales force representatives necessary to carry out its
Detailing effort. Endo shall notify Vernalis prior to *** of each year of
any planned increase in the number of field sales force representatives
dedicated to the Product for the following Year. Within 30 days of such
notification, Vernalis shall notify Endo as to the number of Vernalis
employees Vernalis desires to be included in the Specialty Sales Force for
that Year.
	 
	3.	 	Endo may at its option and on terms to be agreed with Vernalis make
available to Vernalis Endo’s human resource group to assist Vernalis to
hire the Vernalis Specialty Sales Personnel. Vernalis shall be the
employer of all Vernalis Specialty Sales Personnel and shall be entirely
responsible for the payment of all such Vernalis Specialty Sales Personnel
salary, bonus and benefits, pension, insurance, social security and any
other related obligations. Vernalis shall indemnify Endo in respect of
any claim against Endo by any member of Vernalis Specialty Sales Personnel
and in respect of any exposure of Endo for any tax or social security
obligation in respect of Vernalis Specialty Sales Personnel. The
geographic deployment of the Vernalis Specialty Sales Personnel shall be
determined by Endo, subject to paragraph 4 below.
	 
	4.	 	The Joint Co-Promotion Team will devise a call plan for the Specialty
Sales Force, which will allocate calls equitably, including in relation to
decile, geographic location and key opinion leaders..
	 
	5.	 	In circumstances where Endo is required to preimburse Vernalis for the
cost of Vernalis Specialty Sales Personnel, Endo shall pay Vernalis the
Cost per Detail for each Detail made by Vernalis sales force
representatives within 45 days of the end of each Quarter upon receipt of
an invoice from Vernalis and a report specifying the number of Details
carried out by it or upon its behalf during such Quarter. Such report
shall be auditable by Endo on the terms of Clause 11.16 of the Agreement.

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	6.	 	All sales of the Product or MAM Product generated as a result of any of
Vernalis co-promotion activities shall be booked by Endo and the
appropriate royalty under the Agreement paid to Vernalis by Endo.
	 
	7.	 	Vernalis shall have the right to Co-promote for so long as Endo is
Commercialising the Product in USA.
	 
	8.	 	Vernalis shall have the right to terminate its involvement in
co-promotion on three (3) months notice to Endo.
	 
	9.	 	During the period in which Endo is required to reimburse Vernalis in
respect of Vernalis Specialty Sales Personnel pursuant to Clause 9, in the
event Vernalis fails to achieve the number of Details it has elected to
undertake in any Year in any two consecutive Quarters or in any two of
four Quarters, Endo may terminate Vernalis’ right to Co-promote hereunder.
	 
	10.	 	The Co-Promotion arrangement described above shall be subject in all
respects to Clause 9. All the terms of Clauses 15, 16, 20, 21, 22, 23,
24, 25, 26, 28 and 29 shall apply to the co-promotion arrangement between
the Parties.

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SCHEDULE 11

ADDRESSES FOR NOTICES

If to Endo:

Endo Pharmaceuticals Inc.

100 Painters Dr.

Chadds Ford, PA 19317

Attention: Chief Legal Officer

Telecopy: 610-558-9684

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Eileen Nugent and Bruce Goldner

Telecopy: 212-735-2000

If to Vernalis:

Vernalis Development Limited

Oakdene Court

613 Reading Road

Winnersh

Wokingham

RG41 5UA

United Kingdom

Attention: Head of Legal Affairs

- 115 -

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