Document:

STB DRAFT -- 07/02/02

1.INTERPRETATION*
2.SALE AND PURCHASE*

3.VALUE ADDED TAX*

4.ALLOCATION OF CONSIDERATION*

5.DELIVERY OF COMPLETION DATE STATEMENT*

6.COMPLETION*

7.FUTURE TRADING AND TRADE ENQUIRIES*

8.WARRANTIES AND INDEMNITIES*

9.TAX MATTERS*

10.PROTECTION OF GOODWILL*

11.CONFIDENTIAL INFORMATION*

12.ANNOUNCEMENTS, ETC.*

13.ASSIGNMENT*

14.COSTS*

15.ENTIRE AGREEMENT*

16.WAIVER, AMENDMENT*

17.FURTHER ASSURANCE*

18.NOTICES*

19.COUNTERPARTS*

20.GOVERNING LAW AND JURISDICTION*

21.INVALIDITY*

22.NO THIRD PARTY RIGHTS*

23.GENERAL*

SCHEDULE 1-Particulars relating to the Company

SCHEDULE 2-Accounts

SCHEDULE 3-Warranties

SCHEDULE 4-List of Major Items of Tangible Personal Property

EXECUTION COPY

 

 

 

INTERACTIVE CLINICAL TECHNOLOGIES, INC.

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STOCK AND ASSET PURCHASE AGREEMENT

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Dated as of August 22, 2002THIS AGREEMENT is made on August 22, 2002

BETWEEN:

(1)ICTI ACQUISITION INC., a Delaware corporation (the "Buyer"); and

(2)GALEN HOLDINGS PLC, a Northern Irish corporation (the "Seller").

RECITALS
(A)The Seller is, among other things, engaged through certain of its subsidiaries, in certain geographic areas, in the business of designing, developing, producing, marketing, distributing, selling, licensing, installing, validating and servicing interactive voice response systems and other interactive technologies (including, without limitation, all related computer software) for use in connection with the conducting of pharmaceutical clinical trials in the pharmaceutical and healthcare industries, and also provides training and consulting services for the users of such systems (collectively, the "ICT Business");

(B)The Seller directly owns all of the issued and outstanding shares of capital stock of Interactive Clinical Technologies, Inc., a New Jersey corporation (the "Company"), which is engaged in the ICT Business in the United States;

(C)The Seller, through its wholly owned subsidiary Galen Limited, a corporation incorporated under the laws of Northern Ireland ("Galen Limited"), indirectly has title to all assets used or held for use exclusively or primarily in the ICT Business as it is conducted in the United Kingdom (except as provided in the last sentence of clause 2.2, the "UK Assets");

(D)The Buyer desires to purchase, and the Seller desires to sell, (i) all of the issued and outstanding shares of capital stock of the Company and (ii) the UK Assets, subject to the assumption of related liabilities, on the terms and conditions set forth herein.

(E)In consideration of the mutual covenants and the respective representations and warranties contained herein, the parties hereby agree as follows:

	INTERPRETATION

	The following words and expressions shall, unless the context otherwise requires, have the following meanings:

"Accounts" means (i) the unaudited statements of income for the ICT Business for each of the years ended September 30, 2000 and September 30, 2001 and for the six month period ended March 31, 2002 and (ii) the unaudited balance sheets of the ICT Business as at September 30, 2000, September 30, 2001 and March 31, 2002;

"Accounts Date" means March 31, 2002;

"Affiliate" means with respect to a specified person, any other person which directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person.  The term "control" or any derivation thereof, as used in this agreement, means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies (whether through the ownership of securities or of partnership or other ownership interests, by contract or otherwise) of any other person, provided, that, in any event, any person that owns or holds, directly or indirectly, more than fifty percent (50%) of the voting securities or more than fifty percent (50%) of the partnership or other equity interests of any other person (other than as a limited partner of such person) will be deemed to control such other person;

"Agreed Form" means, in relation to a document, in the form agreed between the parties on or prior to the date hereof and for the purposes of identification signed on their behalf;

"Assumed Liabilities" means the liabilities and obligations of Galen Limited as of the Completion Date which principally or exclusively relate to the ICT Business as it is conducted in the UK, including all liabilities and obligations under the Material Contracts, except for the Excluded Liabilities;

"business day" means a day (other than a Saturday or Sunday) when banks are open for business in New York and Belfast;

"Buyer's Accountants" means PricewaterhouseCoopers of Waterfront Plaza, 8 Laganbank Road, Belfast BT1 3LR;

"Buyer's Group" means the Buyer and its subsidiaries and their respective Affiliates, all of them and each of them as the context admits, including, after Completion, the Company;

"Buyer Tax Act" has the meaning set forth in clause 9.1(b);

"COBRA" has the meaning set forth in clause 6.9(a);

"Code" means the U.S. Internal Revenue Code of 1986, as amended;

"Company" has the meaning set forth in the recitals of this agreement;

"Competitive Operations" has the meaning set forth in clause 10.2(b) of this agreement;

"Completion" means the completion of the sale and purchase of the ICT Business in accordance with clause 6 of this agreement;

"Completion Date" means the date on which Completion occurs; 

"Completion Date Assets" has the meaning set forth in clause 2.8 of this agreement;

"Completion Date Liabilities" has the meaning set forth in clause 2.8 of this agreement;

"Completion Date Statement" has the meaning set forth in clause 2.8 of this agreement;

"Confidential Information" means, in relation to the obligations of the Seller, all information relating to the ICT Business or the Buyer's Group, or financial or other affairs (including future plans and targets of the Company or any member of the Buyer's Group) which is of a confidential nature and not in the public domain (including, but not limited to, Know-How) and in relation to the obligations of the Buyer, all information relating to any business of the Seller's Group, or financial or other affairs (including future plans and targets of any member of the Seller's Group) which is of a confidential nature and is not in the public domain;

"Consent" means any approval, consent, ratification, waiver, or other authorization, release or notice; 

"Consideration" has the meaning set forth in clause 2.4 of this agreement;

"Deficiency" has the meaning set forth in clause 2.8 of this agreement;

"Disclosure Letter" means an Agreed Form letter of today's date together with the attachments thereto addressed by the Seller to the Buyer disclosing exceptions to the Warranties in the Agreed Form;

"Encumbrance" means any mortgage, charge (fixed or floating), pledge, lien, trust, right of set off or other third party right or interest (legal or equitable) including any right of pre-emption, assignment by way of security, reservation of title or any other security interest of any kind however created or arising;

"Environment" means any and all of the following media namely the air, water and land (including any sub-soil) and any living organisms or systems supported by those media;

"Environmental Laws" means all treaties, laws (including the common law), rules, regulations, orders, decrees, judgments or injunctions issued, promulgated or entered into by any Governmental Authority which relate to the Environment, the preservation or reclamation of natural resources, or human health and safety or the Environment as affected by exposure to Hazardous Substances which are applicable in each case to the ICT Business;

"Environmental Matters" means the Release of Hazardous Substances and the creation of any noise, vibration, radiation, common law or statutory nuisance or other adverse impact on the Environment and any other matters in relation to the Properties and the ICT Business which are related to pollution or protection of the Environment;

"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as amended; 

"Excess" has the meaning set forth in clause 2.8 of this agreement;

"Excluded Liabilities" means, collectively, any and all liabilities of Galen Limited arising in connection with, or in any way relating to, (i) Taxes, (ii) the UK Plans (except to the extent any such liabilities transfer to the Buyer pursuant to the Transfer Regulations), (iii) the Stay-on Bonuses and (iv) indebtedness for borrowed money.

"GAAP" means, at any particular time, generally accepted accounting principles as in effect in the US at such time; provided, however, that, if it was permissible to use more than one principle at such time in respect of a particular accounting matter, "GAAP" shall refer to the principle which was then employed by the Seller;

"Galen Inc." means Galen Incorporated, a New Jersey corporation;

"Galen Limited" has the meaning set forth in the recitals of this agreement;

"Governmental Authority" means any federal, provincial, state, local, foreign or international governmental, regulatory or administrative authority, agency, central bank, commission or any court, tribunal, or judicial or arbitral body and any other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government;

"Hazardous Substances" means (a) petroleum products and by-products, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, medical or infectious wastes, polychlorinated biphenyls, radon gas, chlorofluorocarbons and all other ozone-depleting substances or (b) any chemical, material, substance, waste, pollutant or contaminant that is prohibited, limited or regulated by or pursuant to any applicable Environmental Law;

"ICT Business" has the meaning set forth in the recitals of this agreement;

"ICT Business Employees" means each employee of the ICT Business (including employees who are not actively at work on account of illness, disability or leave of absence) on the Completion Date;

"ICT Pension Scheme" means that UK Plan consisting of the Galen Limited No. 2 Retirement Benefits Scheme;

"Intellectual Property" means all intellectual property rights, including without limitation, patents, inventions, discoveries, processes, developments, technology, Know-How, copyrights and copyrightable works (including software and databases); trademarks, service marks, trade names, domain names, logos, trade dress and the goodwill of any business symbolized thereby, trade secrets and confidential information;

"IRS" means the Internal Revenue Service;

"Know-How" means any proprietary industrial, technical or commercial information, Confidential Information and techniques, in any form (including paper, electronically stored data, magnetic media, files and microfilm), including, without limitation, drawings, data relating to inventions, processes and procedures, formulae, test results, reports, research reports (insofar as the same are in possession of the Seller's Group), project reports and testing procedures, shop practices, instruction and training manuals, sales statistics, specifications, quotations and pricing policies, lists and particulars of customers and suppliers, marketing methods and procedures, and advertising copies, in each case relating to the ICT Business;

"Lambertville Lease" means that certain Lease Agreement, dated as of June 5, 1998, by and between the Company, as lessee, and Eugene and Gail Albert, as lessors, as amended by the Addendum to Lease dated May 15, 1999;

"Legal Requirement" means any federal, state, provincial, local or foreign law, ordinance, principle of common law, rule, regulation or statute;

"Leases" means the leases specified in clause 16(b) of schedule 3;

"Listing Rules" means the listing rules of the UK Listing Authority made pursuant to Part VI of the Financial Services and Markets Act 2000;

"London Stock Exchange" means London Stock Exchange plc;

"Material Contract" means all contracts or commitments, whether written or oral, (i)(A) to which the Company is a party or by which it is bound or that relate exclusively or primarily to the ICT Business and (B) that require the expenditure of, or involve the receipt of, more than $25,000 in any consecutive 12 month period after the date hereof; (ii) governing any indebtedness for borrowed money or any guarantee thereof to which the Company is a party or by which it is bound or that impose a lien on any of the Company's assets or any of the UK Assets; (iii) consisting of licensing agreements to which the Company is a party or by which it is bound or that relate exclusively or primarily to the ICT Business; (iv) all leases (whether for personal or real property) to which the Company is a party or by which it is bound or that relate exclusively or primarily to the ICT Business (including the Leases); (v) under which the Company agrees to deal exclusively with, or not deal with, any person; (vi) under which the Company agrees to refrain from competing with any person or that restrict the ICT Business from engaging in the providing of any products or services or limit the ICT Business to any geographic area; (vii) consisting of a joint venture, partnership or other agreement (however named) involving a sharing of profits, losses, costs or liabilities by the Company with any other person; (viii) for capital expenditures of an amount or value in excess of $25,000; (ix) for, or relating to, the sale, distribution, exportation or importation of products of the type sold by the Company by any distributor, broker, agent or other representative for or on behalf of the Company; (x) for the sale of any properties, assets or operations of the Company or the ICT Business (other than products and services sold in the ordinary course of business), or for the grant of options or preferential rights to purchase any such properties, assets or operations; (xi) relating to the acquisition by the Company of any operating business or capital stock or all or substantially all of the assets (other than in the ordinary course of business) of any other person, whether or not completed; (xii) pursuant to which the Company is required to purchase or sell a stated portion of its requirements or output; (xiii) between the Company and any Governmental Authority; and (xiv) to which the Company is a party or by which it is bound or that relate exclusively or primarily to the ICT Business and, in each case which pertain to the Intellectual Property owned, licensed (whether as licensor or licensee) or used in the ICT Business, whether by the Company, Galen Limited or the Seller;

"Material Adverse Effect" means a material and adverse effect on the business, assets or condition (financial or otherwise) of the ICT Business, excluding any adverse effects arising out of or resulting from changes in the general economy or the reaction of employees, suppliers or customers to Seller's entering into of this agreement or Buyer acquiring the Shares or the UK Assets;

"Net Assets" has the meaning set forth in clause 2.8 of this agreement;

"Non-ICT Business Employees" has the meaning set forth in clause 8.21;

"Permit" means any permit, license, consent, authorization, approval, certificate, qualification, specification, registration or filing of a notification report or assessment which is necessary in any relevant jurisdiction or otherwise required by any Governmental Authority for (i) the lawful, proper and efficient operation of the ICT Business, (ii) the Company's or Galen Limited's ownership, possession, occupation or use of an asset as at the date of this agreement or (iii) the execution and performance of this agreement (insofar as the same is not treated as Intellectual Property);

"Permitted Encumbrance" means (i) Encumbrances set forth in the Disclosure Letter; (ii) Encumbrances disclosed in the Accounts; (iii) Encumbrances for taxes, assessments and other governmental charges not yet due and payable or, if due, (A) not delinquent or (B) being contested in good faith by appropriate proceedings and for which adequate reserves have been established by the Company or Galen Limited, as the case may be; (iv) mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like Encumbrances arising or incurred in the ordinary course of business if the underlying obligations are not past due; and (v) Encumbrances or title retention arrangements arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business;

"Post-Completion Tax Period" means any tax period beginning after the Completion Date;

"Pre-Completion Tax Period" means any tax period ending on or before the Completion Date;

"Properties" means the properties described in the Disclosure Letter in connection with clause 16 of schedule 3 and "Property" shall mean any one of them; 

"Related Persons" means, in relation to any party, its holding companies and the subsidiary undertakings and associated companies and other Affiliates from time to time of such holding companies, all of them and each of them as the context admits;

"Release" means any spilling, seeping, leaking, pumping, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing or migrating into the Environment;

"Restricted Services" means the designing, developing, producing, marketing, distributing, selling, licensing, installing, validating and servicing of interactive voice response systems and other interactive technologies (including, but not limited to, the related computer software which comprises a portion of such systems or technologies), whether used, or intended for use, in the pharmaceutical or healthcare industries, as well as the providing of training, consulting and other incidental services for the users of any such interactive voice response systems or other interactive technologies; PROVIDED THAT any use, designing, developing, producing, installing, validating and servicing of such systems or technologies by the Seller's Group for the conduct of its business shall not be Restricted Services, but only if, and to the extent that, such systems or technologies are used by the Seller's Group solely for internal operating purposes and not for sale to, or licensing to or other use by, any third persons;

"Restricted Territory" means the entire world;

"Seller's Accountants" means PricewaterhouseCoopers of Waterfront Plaza, 8 Laganbank Road, Belfast, BT1 3LR;

"Seller's Group" means the Seller, its subsidiaries and their respective Affiliates, excluding, after the Completion, the Company;

"September Balance Sheet" has the meaning set forth in clause 2.8 of this agreement;

"Service Contract" means any contract entered into by the Company prior to the Closing for the supply of interactive voice response systems and related services;

"Shares" means all of the issued and outstanding shares of common stock, par value $0.001 per share, of the Company;

"State Tax Return Restatements" has the meaning set forth in clause 9.2(b);

"Stay-on Bonuses" means the bonuses in the aggregate amount of $70,000 payable pursuant to those certain letter agreements, dated as of May 6, 2002, between the Seller, on the one hand, and each of Susan McIntyre, Thomas Farley, John Bancroft and Charles Gettis, on the other hand;

"Straddle Period" has the meaning set forth in clause 9.1(a) of this agreement;

"Tax" or "Taxes" or "Taxation" means all taxes, charges, fees, levies, or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, severance, stamp, occupation, occupancy, rent, transaction, property, withholdings, or other taxes, customs, duties, fees, assessments, or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any Taxing Authority.  For purposes of this agreement, "Taxes" or "Tax" shall also include any obligations under any agreements or arrangements with any person with respect to the liability for, or sharing of, Taxes (including pursuant to Treasury Regulation section 1.1502-6 or comparable provisions of state, local or foreign tax law) and including liability for Taxes as a transferee or successor, by contract or otherwise;

"Taxing Authority" means any federal, provincial, state, local or foreign taxing authority, including, but not limited to, the IRS.;

"Tax Claim" has the meaning set forth in clause 9.3(a);

"Tax Return" or "Return" (including any derivative or variation thereof and whether or not begun with a capital letter) shall mean and include all returns, reports, forms, estimates, schedules, declarations, information statements or other document or information relating to any Tax and filed with or submitted to, or required to be filed with or submitted to, any Taxing Authority or any other Governmental Authority in connection with the determination, assessment, collection or payment of any Tax, including any amendments or supplements thereto;

"Tax Warranties" means tax warranties given pursuant to clause 9 of this agreement and paragraph 17 of schedule 3;

"TBBS Restatement" has the meaning set forth in clause 9.2(b);

"Transaction Documents" has the meaning set forth in clause 15 of this agreement;

"Transfer Regulations" has the meaning given to it under clause 8.1 of this agreement;

"UK" means the United Kingdom of Great Britain and Northern Ireland;

"UK Assets" has the meaning set forth in the recitals of this agreement;

"UK Employee" means each employee engaged in the ICT Business in the UK as of the date hereof;

"UK Listing Authority" means the Financial Services Authority in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000; 

"UK Plan" means all of the benefit plans and policies maintained on behalf of each UK Employee including, permanent health insurance, life cover, private medical insurance, the Savings-Related Share Option Scheme and the ICT Pension Scheme;

"US" means the United States of America;

"US Plan" means an "employee benefit plan" (within the meaning of Section 3(3) of ERISA), and each other written plan, program, arrangement, agreement or policy relating to stock options, stock purchase, deferred compensation, severance, fringe benefit or other employee benefit, in each case maintained or contributed to, or required to be maintained or contributed to, by the Company, and in which employees of the Company who are, or were, principally employed in the US participate and for which the Company has liabilities;

"VAT" means UK value added tax; and

"Warranties" means the warranties given pursuant to clause 8 and schedule 3.

	The words and expressions defined in the schedules hereto shall have the meanings set out therein.

	References to the parties hereto include their respective successors and permitted assignees, and references to the masculine gender shall include the feminine and vice versa.

	References to statutes or statutory provisions include references to any orders or regulations made thereunder and references to any statute, provision, order or regulation include references to that statute, provision, order or regulation as re-enacted from time to time before the date hereof (subject as otherwise expressly provided herein) and to any previous statute, statutory provision, order or regulation amended, modified, re-enacted or replaced by such statute, provision, order or regulation before the date hereof.

	References to "persons" shall include bodies corporate and unincorporated, associations, partnerships, limited liability companies, trusts, any Governmental Authority and individuals.

	Headings to clauses and paragraphs are for information only and shall not form part of the operative provisions of this agreement and shall be ignored in construing the same.

	References to recitals, clauses or schedules are to recitals to, clauses of and schedules to this agreement.

	The recitals, the schedules and documents in the Agreed Form are part of the operative provisions of this agreement and references to this agreement shall, unless otherwise expressly stated, include references to the recitals, the schedules and documents in the Agreed Form.

	All accounting terms used in this agreement and in the Transaction Documents shall have the meanings given to them in accordance with GAAP, unless the context requires otherwise.

	The word "including" or any variation thereof will not limit the preceding words or terms.

	Any reference to "Dollars" and "$" means dollars constituting legal tender for the payment of public and private debts in the US.

	The terms "hereof", "hereby", "hereunder", "herein" and similar terms shall refer to this agreement as a whole.

	SALE AND PURCHASE

	Upon the terms and subject to the conditions of this agreement, on the Completion Date the Seller shall sell, convey, assign and transfer to the Buyer, and the Buyer will purchase and acquire from the Seller, the Shares, free from any Encumbrances and together with all accrued benefits and rights attaching thereto.

	Upon the terms and subject to the conditions of this agreement, on the Completion Date the Seller will cause Galen Limited to sell, convey, assign and transfer to the Buyer, as beneficial owner and with full title guarantee and free and clear of any Encumbrances (other than Permitted Encumbrances), and the Buyer will purchase and acquire from Galen Limited, all of the rights, title and interest that Galen Limited possesses to and in the UK Assets, wherever located, including, without limitation, the following assets used or held for use exclusively or primarily in connection with the ICT Business as conducted in the UK: (i) tangible personal property (whether or not constituting fixtures on real property), including equipment, purchased parts, raw materials, goods in process and finished goods and furniture, a list of the major items of which material tangible personal property is set forth on schedule 4, (ii) all Intellectual Property, licenses and sublicenses granted and obtained with respect thereto, and rights thereunder, remedies against infringements thereof and rights to protection of interests therein, (iii) agreements, contracts and leases and rights thereunder, except as provided in clause 2.6, (iv) accounts, notes and other receivables, (v) claims, deposits, prepayments, refunds, causes of action, rights of recovery and rights of set off, and (vi) books, records, ledgers, files, documents, correspondence, lists, promotional materials, studies, reports, and other printed or written materials.  Notwithstanding anything to the contrary in the foregoing, the UK Assets shall not include (A) cash and cash equivalents or similar type investments, bank accounts and certificates of deposit, (B) franchises, approvals, permits, licenses, orders, certificates, variances and similar rights obtained from any Governmental Authority, (C) rights in and with respect to the assets associated with the UK Plans and (D) assets for which a transfer to the Buyer shall require a third party Consent that has not been received prior to Completion; PROVIDED, HOWEVER, with respect to any such assets referred to in this clause (D), the Seller shall hold such assets in trust for the Buyer and shall take such commercially reasonable actions following the Completion as are necessary to (1) provide the Buyer the practical benefit and use of such assets and (2) obtain the Consents required to transfer title to, and possession of, such assets to the Buyer as otherwise contemplated in this clause 2.2.

	On and subject to the terms and conditions of this agreement, the Buyer agrees to assume and become responsible for all of the Assumed Liabilities on the Completion Date.  Notwithstanding anything to the contrary in this agreement or any of the schedules hereto, the Buyer will not assume, nor have any responsibility or liability for or with respect to, or purchase the UK Assets subject to, any liabilities of any nature whatsoever (whether liquidated, contingent or otherwise) which are not included within the definition of "Assumed Liabilities" and, accordingly, the Buyer will not assume, or be responsible for, any of the Excluded Liabilities.

	In addition to the Buyer's assumption of the Assumed Liabilities, in consideration of the sale, transfer, conveyance and assignment of the Shares and the UK Assets by or at the direction of the Seller to the Buyer and in reliance upon the representations and warranties made herein by the Seller, the Buyer agrees to pay to the Seller, the sum of Sixteen Million Dollars ($16,000,000) on the Completion Date, of which (i) One Hundred Dollars ($100) is in consideration of the covenant not to compete and other restrictive covenants set forth in clause 10, (ii) Three Hundred Eighty Seven Thousand Dollars ($387,000) is in consideration of the sale and transfer of the UK Assets to the Buyer, and (iii) Fifteen Million Six Hundred Twelve Thousand and Nine Hundred Dollars ($15,612,900) is in consideration of the sale and transfer of the Shares (collectively the "Consideration").  That portion of the Consideration which is payable in cash will be subject to adjustment pursuant to clause 2.9 hereof.

	All payments by the Buyer under this agreement shall be made free and clear of and without deduction for any Taxes, levies, imposts, duties, charges, fees, deductions, or withholdings of any nature now or hereafter imposed or levied by any Taxing Authority unless the Buyer is compelled by law to make such deduction or withholding.  If any such obligation is imposed upon the Buyer with respect to any amount payable by it hereunder, the Buyer will (i) pay the full amount deducted to the relevant Taxing Authority in accordance with applicable law and (ii) pay to the Seller on the date on which such amount is due and payable hereunder, such additional amount as shall be necessary to enable the Seller to receive the same net amount which the Seller would have received had no such obligation been imposed upon the Buyer.  The Buyer shall, as soon as practicable after payment of such Taxes, deliver to the Seller the original or a certified copy of a receipt issued by such Taxing Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Seller.

	If (i) any agreement, contract or lease used exclusively or primarily in the ICT Business may not be assigned and transferred to the Buyer (as a result of either the provisions thereof or applicable law) without the consent or approval of a third party and (ii) such consent or approval has not been obtained prior to the Completion Date, then, with respect to each such agreement, contract or lease, (A) notwithstanding any other provision of this agreement, such agreement, contract or lease shall not be assigned and transferred to, or assumed by, the Buyer at the Completion Date, (B) the Seller and the Buyer will cooperate, in all reasonable respects, to obtain the necessary consent or approval as soon as practicable after the Completion Date, provided that neither party will be required to make any payments or agree to any material undertakings in connection therewith, (C) if and when such approval is obtained, the Seller and the Buyer shall execute, or shall cause the appropriate subsidiary to execute, such further instruments of conveyance (in substantially the form executed at the Completion Date) as may be necessary to transfer such agreement, contract or lease to the Buyer and (D) from and after the Completion Date until the assignment of such agreement, contract or lease pursuant to clause (C) above, the Seller and the Buyer shall cooperate, in all reasonable respects to (1) provide the Buyer with all of the rights and obligations under any such agreement, contract or lease, (2) cooperate in any reasonable and lawful arrangement designed to provide such rights and obligations to the Buyer, including subcontracting, sublicensing or subleasing to the Buyer or the appointment of the Buyer as agent of Seller for purposes of such agreement, contract or lease, and (3) enforce, at the request of the Buyer and for the account of the Buyer, any and all rights of the Seller or its Affiliates arising under any such agreement, contract or lease.

	All payments to be made to the Seller on the Completion Date shall be made by wire transfer of immediately available funds to the account specified in writing by the Seller.

	For the purposes of this agreement, the following terms shall have the following respective meanings:

	"Completion Date Statement" shall mean the final statement of Completion Date Assets and Completion Date Liabilities. 

	"Completion Date Assets" shall mean the net amount of those assets of the ICT Business on the Completion Date under the captions "Fixed Assets," "Work in Progress," "Trade Receivables" and "Other Receivables," as determined in accordance with GAAP and in a manner consistent with the accounting practices used in preparing the unaudited balance sheet of the ICT Business as at September 30, 2001 (the "September Balance Sheet") attached hereto as part of Schedule 2 except that (i) all intercompany amounts shall be excluded and (ii) all credit balances in "Trade Receivables" as of the Completion Date shall be deemed to constitute "Trade Payables" for purposes of determining Completion Date Liabilities.

	"Completion Date Liabilities" shall mean the net amount of those liabilities of the ICT Business on the Completion Date under the captions "Trade Payables" and "Accruals and Other Payables," as determined in accordance with GAAP and in a manner consistent with the accounting practices used in preparing the September Balance Sheet, except that (i) all intercompany amounts shall be excluded and (ii) all credit balances in "Trade Receivables" as of the Completion Date shall be deemed to constitute "Trade Payables" for purposes of determining Completion Date Liabilities.

	"Net Assets" shall mean the net amount of the Completion Date Assets less the Completion Date Liabilities.

	"Deficiency" shall mean the amount, if any, by which the Net Assets as set forth on the Completion Date Statement as modified as a result of the resolution of any dispute in accordance with the terms of clause 5 of this agreement are less than Six Million Dollars ($6,000,000).

	"Excess" shall mean the amount, if any, by which the Net Assets as set forth on the Completion Date Statement as modified as a result of the resolution of any dispute in accordance with the terms of clause 5 of this agreement are greater than Eight Million Dollars ($8,000,000).

	The purchase price shall be reduced dollar-for-dollar by the amount of the Deficiency, if any, or increased dollar for dollar by the amount of the Excess, if any.

	All payments for the Deficiency or the Excess shall be made by wire transfer of immediately available funds to the account or accounts designated by the Buyer or the Seller, as the case may be, within five days of the final determination thereof in accordance with clause 5 of this agreement and shall be accompanied by a payment of simple interest thereon calculated at the annual rate of 8% (assuming a 360 day year) from the Completion Date to the actual date of payment.

	VALUE ADDED TAX

	The Consideration payable by the Buyer pursuant to clause 2.4 of this agreement is exclusive of any VAT which may be chargeable thereon in respect of the sale of the UK Assets and the amount of any such VAT shall be payable by the Buyer in addition to the Consideration, subject to the terms of this clause 3.

	The Seller and the Buyer shall use all reasonable efforts to secure that the conditions of article 5(l) of the Value Added Tax (Special Provisions) Order 1995 SI 1268 and of section 49 of the Value Added Tax Act 1994 are fulfilled so that the sale of the UK Assets hereunder is properly treated as neither a supply of goods nor a supply of services for the purposes of VAT.

	The Seller shall on the Completion Date deliver to the Buyer all records referred to in section 49(l) of the Value Added Tax Act 1994 in respect of the ICT Business and shall not make any request to HM Customs & Excise for such records to be retained by the Seller, and the Buyer hereby undertakes to preserve such records for such periods as may be required by law and shall during that period afford reasonable access to them at the request of the Seller.

	In the event that HM Customs & Excise determine that VAT is chargeable on the sale of the UK Assets hereunder or any of them then the Seller shall immediately notify the Buyer of such determination and the Buyer agrees that such VAT shall be in addition to the Consideration specified in clause 2.4 and the Buyer shall (against production by the Seller of Tax invoices in respect thereof) pay the amount of any such VAT forthwith to the Seller but such payment shall be without prejudice to the right of the Buyer under this agreement to call upon the Seller to make or join in an appeal against the aforesaid determination.

	All VAT payable in respect of goods and services supplied or deemed to be supplied by the Seller in connection with the UK Assets prior to the Completion Date, and all interest payable thereon and penalties attributable thereto, shall be paid to HM Customs & Excise by the Seller, and the Seller shall be entitled to receive and to retain for its own benefit all reimbursement or credit from HM Customs & Excise for VAT borne by the Seller on goods and services supplied to the Seller prior to the Completion Date and any payments received in respect of VAT overpaid to HM Customs & Excise prior thereto.

	ALLOCATION OF CONSIDERATION

The Consideration will be allocated between the UK Assets and the Shares as agreed to by the Buyer and the Seller and as set forth in clause 2.4.  That portion of the Consideration allocable to the UK Assets shall be further allocated among each class of the UK Assets in accordance with a schedule to be agreed to by the Buyer and the Seller after the Completion Date.  The allocations set forth in clause 2.4 and in the aforementioned schedule shall, for United States federal and state income Tax purposes, be binding on the Seller and the Buyer.  The Seller and the Buyer shall file any respective U.S. Tax Returns in accordance with such allocations and shall not take any position inconsistent with such allocations.

	DELIVERY OF COMPLETION DATE STATEMENT

	The parties hereto shall jointly arrange for the Completion Date Statement setting forth the Completion Date Assets, the Completion Date Liabilities and the calculation of Net Assets and the amount of the Deficiency, if any, to be prepared by the Buyer in conjunction with the Company and the Seller, and such draft Completion Date Statement shall be delivered to the Seller within 90 days of Completion.

	The Seller shall notify the Buyer in writing within 30 days of receipt of the Completion Date Statement whether or not it accepts it for the purposes of this agreement.

	If the Seller notifies the Buyer that it does not accept such draft Completion Date Statement as provided in clause 5.2:

	the Seller and/or the Seller's Accountants shall, set out in a notice in writing their reasons for such non-acceptance and specify the adjustments which, in their opinion, should be made to the draft Completion Date Statement in order to comply with the requirements of this agreement (and in particular this clause 5 and schedule 2 hereof) and deliver a copy of such notice to the Buyer simultaneously with the delivery of the notice pursuant to clause 5.2; and

	the parties shall use all commercially reasonable efforts to meet and discuss the objections of the Seller and to reach agreement upon the adjustments (if any) required to be made to the draft Completion Date Statement and will provide each other with such information and explanations and access to working papers as may be reasonably and properly required by the other for this purpose.

	If the Seller is satisfied with the draft Completion Date Statement (either as originally submitted or after adjustments agreed between the Seller and the Buyer) or if the Seller fails to notify the Buyer of its non-acceptance of the draft Completion Date Statement within the 30 day period referred to in clause 5.2 (or such time period as has been agreed between the parties in writing), then the draft Completion Date Statement (incorporating any agreed adjustments) shall constitute the final Completion Date Statement for the purposes of this agreement.

	If the Buyer and the Seller do not reach agreement within 10 business days following the Buyer's receipt of the Seller's notice of non-acceptance pursuant to clause 5.3, then the matters in dispute and in respect of which details have been provided by the Seller to the Buyer at the time that it notified the Buyer that it does not accept the draft Completion Date Statement in accordance with clause 5.3(a) shall be referred, on the application of either party, for determination by an independent firm of internationally recognized chartered accountants to be agreed upon by the Seller and the Buyer or, failing agreement, to be selected, on the application of either the Seller or the Buyer, jointly by the Buyer's Accountants and the Seller's Accountants. The following provisions shall apply to such determination:

	the Buyer and/or the Buyer's Accountants and the Seller and/or the Seller's Accountants shall each promptly prepare a written statement on the matters in dispute which (together with the relevant documents) shall be submitted to such independent firm for determination;

	in giving such determination, the firm shall state what adjustments (if any) are necessary to the draft Completion Date Statement in respect of the matters in dispute in order to comply with the requirements of this agreement (and in particular this clause 5) and shall give its reasons therefor and shall make such determination as soon as reasonably practicable after its appointment and in any event by not later than 30 days after its appointment;

	such firm shall act as an arbitrator in making any such determination which shall be final and binding on the parties hereto (in the absence of manifest error); and

	each party shall bear the costs and expenses of all counsel and other advisers, witnesses and employees retained by it and the costs and the expenses of the independent firm of accountants shall be borne between the Seller and the Buyer in such proportions as the firm shall in its discretion determine or, in the absence of any such determination, equally between the Seller and the Buyer.

	When the Seller and the Buyer reach (or pursuant to clause 5.4 are deemed to reach) agreement on the Completion Date Statement or when the Completion Date Statement is finally determined at any stage in accordance with the procedures set out in this clause 5, the Completion Date Statement as so agreed or determined shall be the Completion Date Statement for the purposes of this agreement and shall be final and binding on the parties.

	Subject to any rule of law or any regulatory body or any provision of any contract or arrangement entered into prior to the date of this agreement to the contrary, the Seller shall procure that each member of the Seller's Group shall, and the Buyer shall procure that the Buyer's Group shall, promptly provide each other, their advisers, and the independent firm of chartered accountants appointed pursuant to clause 5.5 to determine the Completion Date Statement and the Buyer and/or the Buyer's Accountants and the Seller and/or the Seller's Accountants with all information (in their respective possession or control) relating to the operations of the Seller's Group and/or the Buyer's Group, as the case may be, including access at all reasonable times to all Seller's Group and Buyer's Group employees, books and records, and all co-operation and assistance, as may in any such case be reasonably required to:

	enable the production of the Completion Date Statement; and

	enable any independent firm of chartered accountants appointed pursuant to clause 5.5 to determine the Completion Date Statement.

The Seller and the Buyer hereby authorize each other, their respective advisers and the independent firm of chartered accountants appointed pursuant to clause 5.5 to take copies of all information which they have agreed to provide under clause 5.5.

	COMPLETION

	Completion shall take place at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017 (or at such other location as the Seller and Buyer shall agree) on the Completion Date.

	On Completion, the Seller shall deliver or shall procure the delivery to the Buyer or, at the Buyer's direction, to the Company:

	the original certificates representing the Shares, together with appropriate stock powers attached and duly executed;

	resignations of all of the directors of the Company and resignations of any officers that are not employees of the Company;

	the minute books, corporate seal and stock transfer books for the Company;

	an assignment of contracts, in the Agreed Form, evidencing the assignment to the Buyer of any contracts which comprise a portion of the UK Assets;

	an executed bill of sale or such other documents or instruments, in the Agreed Form, evidencing Galen Limited's sale and transfer of the UK Assets to the Buyer.

	to the extent not in possession of the Company, all books of account or references as to customers and suppliers and other records exclusively relating to the ICT Business;

	to the extent not in the possession of the Company, all Permits and such contracts, deeds or other documents (including assignments of any such Permits) which relate exclusively to the ICT Business;

	written confirmation, in the Agreed Form, from the Seller that there are no liabilities whatsoever (actual or contingent) which may be owing from the Company to the Seller's Group; and

	to the extent not in possession of the Company, the checkbooks for all bank accounts maintained by the Company.

	On Completion, the Buyer shall deliver or shall procure the delivery to the Seller an executed assumption agreement, in the Agreed Form, relating to the Assumed Liabilities.

	The Buyer shall cause the wire or other transfers of funds referred to in clause 2 to be made to the Seller on the Completion Date.

	The Seller shall procure that at Completion, the Company is released from any Encumbrance (other than Permitted Encumbrances) given or incurred by it which relates in whole or in part to debts or other liabilities or obligations of it or any other person.

	The Buyer agrees that for a period of at least six years from Completion it will cause the Company to retain all documents in its possession at the Completion Date and will provide the Seller with copies of such documents upon the Seller's reasonable request, at the Seller's expense.  The Seller agrees that for a period of at least six years from Completion it will retain all documents in its possession at the Completion Date relating to the ICT Business and will provide the Buyer with copies of such documents upon the Buyer's reasonable request, at the Buyer's expense.  The provisions of clause 11 shall apply to any information provided under this clause if such information or documentation comprises Confidential Information.

	On or as soon as practicable after Completion, the parties shall send out a joint notice in the Agreed Form to all suppliers and customers of the ICT Business advising them of the sale of the ICT Business.

	Each party shall bear its own respective expenses incurred in connection with the negotiation and preparation of this agreement and the consummation and performance of the transactions contemplated hereby and in connection with all obligations required to be performed by each of them under this agreement except as may otherwise be provided herein.

	The Buyer shall cause the Company to provide to any employee or former employee of the Company whose "qualifying event" within the meaning of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), occurs prior to, on or after the Completion Date (and such employees' "qualified beneficiaries" within the meaning of COBRA) with continuation of group health coverage required by Section 4980B(f) of the Code.

	The employment of the UK Employees shall transfer to the Buyer on the Completion Date under the Transfer Regulations.

	The Buyer shall comply with regulation 10 of the Transfer Regulations with respect to the UK Employees.

	Each of the Buyer and the Seller shall use commercially reasonable efforts to obtain all Consents of all Governmental Authorities that may be or become necessary for its respective execution and delivery of, and the respective performance of its obligations pursuant to, this agreement.

	Anything in this agreement to the contrary notwithstanding, in connection with the obtaining of any necessary governmental Consents, no party hereto or any of their Affiliates will be required to agree to or consent to divest or hold separate any business or assets or agree to or consent to any other terms or conditions which it determines are adverse to its interests.

	The Buyer shall pay any state or local sales, transfer or like Taxes payable in connection with the transactions contemplated pursuant to this agreement.

	To the extent that (a) the Seller or any of its subsidiaries is a guarantor of any obligations of the Company to any third party, including, without limitation, obligations of the Company under any equipment lease or contract, or (b) the Seller or any of it subsidiaries is jointly liable with the Company on any contract, the Buyer and the Seller agree that (i) as soon as practicable after the Completion Date they shall use their respective reasonable commercial efforts (without any expenditure of monies) to have the Seller or any of its subsidiaries released from all such guarantees and (ii) the Buyer shall be solely responsible for the breach of any such contract to the extent that such breach arises solely from the conduct of the ICT Business from and after the Completion Date.  In the event that the Seller and the Buyer are unable to obtain the release of any guarantees, the Buyer shall indemnify and hold harmless the Seller and its subsidiaries from and against any and all loss, liability or damage arising out of or relating to its obligations under such guarantees, but only to the extent that any such loss, liability or damage arises from the conduct of the ICT Business from and after the Completion Date.  Notwithstanding the foregoing, in the event that any of the leases guaranteed by the Seller or any of its subsidiaries contain an option to renew, the Buyer shall not renew such lease without having the Seller and/or its respective subsidiaries released from such guarantee.

	The Seller shall pay or cause to be paid all obligations as they come due with respect to the Stay-on Bonuses.

	The Seller shall pay or perform, or cause to be paid or performed, when due, all obligations with respect to the Lambertville Lease, including, without limitation, rent payments.  The Seller, at its sole cost and expense, shall, as soon as practicable following the Completion Date, use commercially reasonable efforts to procure (a) the assignment of the Lambertville Lease to the Seller, together with the lessors' written Consent thereto and (b) the lessors' written release of the Company from all liabilities and obligations under, or with respect to, the Lamberville Lease, and Buyer shall cause the Company to cooperate in all commercially reasonable respects with the Seller in procuring such assignment, Consent and release.  At no time shall Buyer be entitled to occupy the rental premises under the Lambertville Lease.

	FUTURE TRADING AND TRADE ENQUIRIES

Following Completion, the Seller shall, and shall procure that any member of the Seller's Group shall, as soon as possible refer to the Buyer all enquiries relating to the ICT Business for so long as the provisions of clause 10 of this agreement are in effect.

	WARRANTIES AND INDEMNITIES

	The Buyer hereby warrants to the Seller that:

	it has all requisite individual and corporate power to enter into and perform this agreement and the transactions and matters contemplated thereby and it has taken all necessary action to authorize the entry into and performance of this agreement and the transactions and matters (including each Transaction Document) contemplated thereby;

	it is not relying on any forecasted operating results or budgets of the ICT Business prepared by or on behalf of  the Seller; and

	it does not intend to take any measures in connection with the UK Employees that would obligate the Seller or Galen Limited to consult with any of the UK Employees under the Transfer of Undertakings (Protection of Employment Regulations) 1981 (as amended) (the "Transfer Regulations"), including, without limitation, any proposed redundancies or terminations of employment, relocation plans, changes to terms and conditions of employment (including changes to any pension arrangements) and changes to working practices.

	In consideration of the Buyer agreeing to purchase the ICT Business on the terms contained in this agreement, the Seller hereby warrants to the Buyer that (a) it has all requisite individual and corporate power to enter into and perform this agreement and the transactions and matters contemplated thereby and it has taken all necessary action to authorize the entry into and performance of this agreement and the transactions and matters (including each Transaction Document) contemplated thereby, and (b) it warrants to the Buyer in the terms of the Warranties set out in schedule 3 to this agreement.

	Where any of the Warranties are made or given "so far as the Seller is aware" or "to the best of the Seller's knowledge," or any variation thereof, such Warranty shall be deemed to have been given to the best of the knowledge, information and belief of the Seller after making reasonable inquiries of Mr. Geoffrey Elliot, Mr. Robert Whiteford, Mr. Anthony Bruno, Mr. John Dardes, Mr. Tom Farley, Mr. Charles Gettis, Ms. Izumi Hara, Mr. Declan Loughery, Ms. Susan MacIntyre, Ms. Susan Newman, Mr. David Weiss, Mr. Ray Stietz and Ms. Maureen O'Malley and, in relation to matters concerning Taxation or the Accounts, the Seller's Accountants.

	The Seller acknowledges that the Buyer has entered into this agreement upon the basis of and in reliance upon the Warranties.

	Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited by the terms of any of the other Warranties.  Only those warranties set out in paragraph 11 of schedule 3 of this agreement shall be given in relation to any Environmental Matters and no other warranties given under this agreement shall be construed in such a manner as would enable the Buyer to make such a claim otherwise.

	Notwithstanding anything to the contrary contained herein and save in the case of fraud by the Seller, the Seller shall be under no liability in respect of any claim under the Warranties contained in schedule 3 or clause 8.2 or the indemnities contained in clauses 8.21, 8.23 and 9 and any such claim shall be wholly barred and unenforceable unless written notice of such claim setting out details of the relevant claim (including the grounds on which such claim is based and an estimated amount claimed to be payable in respect thereof) shall have been served upon the Seller by the Buyer promptly after it becomes likely that a claim will be made, and in any event:

	in the case of a claim under the Warranties contained in schedule 3 or clause 8.2(b) (other than those contained in clauses 6.2 (relating to title to the Shares) and 17 (relating to Taxes) of schedule 3) or the indemnities contained in clause 8.21(b) by not later than 5:00 p.m. New York time on the date which is 18 months from the Completion Date;

	in the case of a claim under the Warranties contained in clause  17 (relating to Taxes) of schedule 3 or clause 8.2(a) or the indemnities contained in clauses 8.21 (other than clauses 8.21(b) and 8.21(h)) and 9 by not later than 5.00 p.m. New York time on the date which is 30 days following the expiration of the applicable statute of limitations relating thereto; and

	in the case of a claim under the indemnities contained in clauses 8.21(h) and 8.23(a) and 8.23(c) by not later than 5:00 p.m. New York time on the date which is four (4) years from the Completion Date.

Notwithstanding anything in the immediately foregoing sentence, in the case of clauses (a) and (b) above the liability of the Seller for any claim specified in such notice shall absolutely cease (unless the amount payable in respect of the relative claim has been agreed by the Seller within 6 months of the date of such written notice) in the event that (i) legal proceedings have not been instituted in the respect of such claim by the due service of process on the Seller within 6 months of the date of such written notice; or (ii) the Seller shall make in respect thereof a request to the Buyer to make recovery in the circumstances referred to in clause 8.14(b) and clause 8.15 and if legal proceedings have not been instituted by the Buyer in respect of such claims by the due service of process on the Seller within 6 months of the date on which judgment is given by a court of competent jurisdiction in respect of such third party proceedings as shall have been instituted by the Buyer pursuant to such request or the date settlement is reached in such third party proceedings with the consent of the Seller or on which the Seller and the Buyer agree that proceedings or other action against the third party shall be abandoned.

For purposes of this clause 8.6: (A) legal proceedings shall not be deemed to have been commenced unless they shall have been properly issued and validly served upon the Seller, (B) "applicable statute of limitations," as used in clause 8.6(b), means (1) with respect to any particular type of Tax, a period of time equal to the applicable statute of limitations established pursuant to any Legal Requirement pertaining to such Tax (including any valid extensions) and (2) with respect to any matters described in clauses 2.2, 8.2(a) and 8.21 (other than clauses 8.21(b) and 8.21(h)) a period of time equal to the applicable statute of limitations established pursuant to the Legal Requirements pertaining to each of such matters, which, for purposes of this agreement, will be 6 years following the Completion Date and (C) the Seller's obligation to provide indemnity pursuant to clause 2.1 (relating to the Shares), clause 6.2 of schedule 3 (relating to the Shares), clause 8.21(a) (but only to the extent that such clause 8.21(a) relates to the Shares) and clause 8.23(b) shall survive indefinitely.

	Except in the case of fraud, the Seller shall be under no liability in respect of any claim under the Warranties contained in schedule 3 or clause 8.2(b) (in each case other than with respect to the Warranties contained in clauses 6.2 and 17 of schedule 3) or the indemnities contained in this agreement (other than with respect to the indemnities contained in clauses 8.21(a), 8.21(c), 8.21(d), 8.21(e), 8.21(f), 8.21(g), 8.23(b) and 9) unless and until the liability in respect of that claim when aggregated with the liability of the Seller in respect of all other such claims made under this agreement (except for those claims for which liability is excluded under clause 8.8 below) solely in respect of any loss suffered in respect of the ICT Business, shall exceed One Hundred and Sixty Thousand Dollars ($160,000), at which time the Seller shall be liable for the full amount of the claim not merely the excess over that sum.

	Except in the case of fraud, the Seller shall be under no liability in respect of any claim under the Warranties contained in schedule 3 or clause 8.2(b) (in each case other than with respect to the warranties contained in clauses 6.2 and 17 of schedule 3) or the indemnities contained in this agreement (other than with respect to the indemnities contained in clauses 8.21(a), 8.21(c), 8.21(d), 8.21(e), 8.21(f), 8.21(g), 8.23(b) and 9) where the liability of the Seller in respect of that claim would (but for this clause) have been less than Four Thousand Eight Hundred Dollars ($4,800) and such claim shall be disregarded in determining the aggregate value of claims pursuant to the provisions of clause 8.7.

	   

Except in the case of fraud, each of the parties to this agreement confirm and agree that the aggregate liability of the Seller in respect of all claims under this agreement (other than those specified in clauses 8.9(b)(ii) and 8.9(c)) shall not in any circumstances exceed the amount paid by the Buyer to the Seller pursuant to clause 2.4, or such lesser or greater amount of Consideration as shall be received in aggregate by the Seller pursuant to clauses 2 or 5 hereof;

	(i)The Seller hereby covenants and undertakes to procure, within the 45 day period immediately following the Completion Date, run off insurance in respect of the claims contemplated in clauses 8.21(h), 8.23(a) and 8.23(c) pursuant to, and in accordance with, the terms of this clause 8.9(b)(i).  The Seller shall cause such run off insurance to be maintained continuously, without change in terms, throughout the 3-year period following the Completion Date.  The Seller, without cost to the Company or the Buyer, shall cause the Company to be named as an additional named insured party to such run off insurance.  Such run off insurance shall provide for (A) an aggregate deductible of not more than One Million Dollars ($1,000,000), which shall be payable solely by the Seller, and (B) 30 days' prior written notice to the Company of any cancellation, termination or modification of such insurance.  The aggregate coverage of such run off insurance shall be the maximum coverage that Seller can procure subject to the foregoing parameters for an aggregate premium payment of One Million Dollars ($1,000,000); PROVIDED THAT in no case shall the run off insurance coverage exceed Ten Million Dollars ($10,000,000).  Notwithstanding the foregoing, in the event that Seller is unable to obtain the full Ten Million Dollars ($10,000,000) of run off insurance pursuant to the foregoing terms of this clause 8.9(b)(i), the Buyer shall have the right, but not the obligation, to contribute such amounts necessary over and above One Million Dollar ($1,000,000) premium such that Ten Million Dollars ($10,000,000) of coverage is obtained;

(ii)Except in the case of fraud, each of the parties to this agreement confirms and agrees that the aggregate liability of the Seller in respect of all claims under clauses 8.21(h), 8.23(a) and 8.23(c) shall not in any circumstances exceed the greater of:

	at any time, the sum of (1) an amount equal to the original amount of run off insurance obtained pursuant to clause 8.9(b)(i), plus (2) Sixteen Million Dollars ($16,000,000) less the aggregate amount of all sums theretofore paid by the Seller in respect of indemnification claims of the type which are subject to the limits on indemnity set forth in clause 8.9(a) (it being understood that any amounts paid by the Seller in respect of indemnification claims of the type which are subject to the limits on the indemnity set forth in this clause 8.9(b)(ii) which exceed an amount equal to the greater of (I) Five Million Dollars ($5,000,000) or (II) the original amount of run off insurance obtained by the Seller pursuant to clause 8.9(b)(i), shall reduce, Dollar-for-Dollar, the amount that the Buyer can recover from the Seller for indemnification claims under clause 8.9(a)); or

	Twenty-One Million Dollars ($21,000,000); and

	all claims under clause 8.23(b) or in connection with the matters identified in the draft confidential due diligence report of the Buyer's Accountants dated August 12, 2002 shall not be subject to the limit set forth in clause 8.9(a), nor shall any such claims reduce the amount that the Buyer or any other indemnitees hereunder can recover from the Seller for indemnification claims under such clause 8.9(a).

	Except for the matters identified in clause 8.23 and any claims against the Seller under clauses 9.1(a) or 9.2(b) of this agreement, the Seller shall be under no liability in respect of any claim under the Warranties or the indemnities contained in this agreement if the facts or circumstances giving rise thereto have been fairly disclosed prior to the entering into of this agreement or are otherwise known to Richard McCann, the Buyer or any of its Affiliates (other than the Company) or any employees, officers or directors of the Buyer or any of its Affiliates (other than the Company) at the date hereof.  For the purposes of this clause "fairly disclosed" shall mean disclosed in the Disclosure Letter in such a manner and in such detail as to enable the Buyer to make a reasonably well informed assessment of the matter.

	Except for the matters contemplated in clause 9.2(b), no liability (whether in contract, tort or otherwise) shall attach to the Seller in respect of any claim under:

	the Warranties and the indemnities contained in this agreement to the extent that the claim or the events giving rise to the claim would not have arisen but for an act, omission or transaction following Completion of the Buyer's Group or which would not have arisen but for any claim, election or surrender or disclaimer relating to Taxation made or omitted to be made or notice or consent given or omitted to be given by the Buyer's Group under the provisions of any statutes relating to Taxation the making, giving or doing of which was assumed in computing the Taxation liabilities of the Seller's Group for the purposes of the Accounts;

	the Warranties or the Tax indemnities contained in clause 9 to the extent that the claim occurs wholly or partly out of or the amount thereof is increased as a result of:

	any change in the accounting principles or practices of the Buyer's Group introduced or having effect after the date of Completion unless the same is introduced to bring the accounting practices and principles into line with generally accepted accounting principles and practices in relation to a business of the type carried on by the ICT Business; or

	any increase in the rates of Taxation made after Completion and which affects matters occurring prior thereto; or

	any change in law or regulation or in its interpretation or administration by the US federal or state courts, by the Inland Revenue or IRS or by any other fiscal, monetary or regulatory authority or the equivalent laws, regulations or authorities in any jurisdiction in which the ICT Business operates in each case occurring after Completion and which affects matters occurring prior thereto; or

	this agreement to the extent that the loss or damage giving rise to the claim is actually recovered by the Buyer's Group under any policy of insurance.  For purposes of this clause 8.11(c), the Seller acknowledges that the Buyer is under no obligation to seek recovery under any policy of insurance in connection with any such claim; or

	the Warranties to the extent that the claim relates to a claim or liability for Taxation and would not have arisen but for any winding-up or cessation of trading after Completion of the Company or any part thereof.

	In assessing any liabilities, damages or other amounts recoverable by the Buyer as a result of any claim under this agreement, there shall be taken into account any benefit which actually accrues to the Buyer's Group arising out of the same subject matter or circumstances giving rise to the claim under the Warranties including, without prejudice to the generality of the foregoing, any amount of any relief for Taxation actually obtained by the Buyer's Group and any amount by which any Taxation for which the Buyer's Group is or may be liable to be assessed or accountable is actually reduced or extinguished, arising directly or indirectly in consequence of the matter which gives rise to such claim or as a result of the receipt of an indemnity payment with respect to such claim.

	No liability will arise and no claim may be made under any of the Warranties to the extent that the matter giving rise to such claim is remediable, unless, within the period of 30 days following the Buyer becoming aware of such matter and having served written notice thereof to the Seller in accordance with this clause 8, such matter shall not have been remedied by the Seller or such remediation shall not have substantially commenced by the Seller to the reasonable satisfaction of the Buyer, within that period of 30 days following the date of service of such notice; PROVIDED THAT such remediation is completed within a reasonable time period.

	Clause 8.15 shall apply in circumstances where, subject to the notice provisions set out in clause 8.6:

	any claim is made against the Buyer's Group which may give rise to a claim by the Buyer against the Seller under the Warranties; or

	the Buyer's Group is or may be entitled to make recovery from some other person of any sum in respect of any facts or circumstances by reference to which the Buyer has or may have a claim against the Seller under the Warranties; or

	the Seller shall have paid to the Buyer an amount in respect of a claim under the Warranties and subsequent to the making of such payment the Buyer's Group becomes or shall become entitled to recover from some other person a sum which is referable to that payment.

	In the circumstances provided in clause 8.14, the Buyer shall and shall procure that the Buyer's Group shall:

	subject to receiving an undertaking from the Seller in respect of all costs reasonably and properly incurred thereby by the Buyer's Group, promptly and diligently take all such action as the Seller may reasonably request including the institution of proceedings and the instruction of professional advisors approved by the Seller (such approval not to be unreasonably withheld or delayed) to act on behalf of the Buyer to avoid, dispute, resist, compromise, defend or appeal against any such claim against the Buyer's Group as is referred to in clause 8.14(a) or to make such recovery by the Buyer's Group as is referred to in clause 8.14(b) or clause 8.14(c), as the case may be; 

	not settle or compromise any liability or claim to which such action is referable without the prior written consent of the Seller, which consent shall not be unreasonably withheld or delayed; and

	in the case of clause 8.14(c) only, promptly repay to the Seller an amount equal to the amount so recovered or, if lower, the amount paid by the Seller to the Buyer, less in each case any costs incurred by the Buyer's Group in so recovering or any Taxation incurred by the Buyer's Group on the amount received.

	The Buyer shall covenant, but not as a condition precedent to liability on the part of the Seller, to, as soon as practicable:

	inform the Seller in writing of any fact, matter, event or circumstance which comes to its notice or to the notice of the Buyer's Group whereby it appears that the Seller is or is likely to be liable to make any payment in respect of any claim under the Warranties or whereby it appears  that the Buyer's Group shall become or is likely to become entitled to recover from some other person a sum which is referable to a payment already made by the Seller in respect of such a claim;  

	thereafter keep the Seller informed of all material developments in relation thereto; and

	provide at the cost of the Seller all such information and documentation (no matter how it is recorded or stored) as the Seller shall reasonably request and which the Buyer may lawfully provide in connection therewith and also in connection with any proceedings instituted by or against the Buyer's Group under clause 8.15.

For purposes of this clause 8.16, the parties acknowledge that the Buyer has informed the Seller of potential claims, penalties, liabilities and expenses in connection with the matters referred to in clause 8.23 and the matters identified in the draft confidential due diligence report of the Buyer's Accountants dated August 12, 2002.

	In the event that the Seller at any time after the date hereof shall wish to take out insurance against its liability hereunder, the Buyer undertakes to provide such information as the prospective insurer may require before effecting such insurance.

	Except for the matters identified in clause 8.23 and any claims against the Seller in connection with the matters identified in the draft confidential due diligence report of the Buyer's Accountants dated August 12, 2002, the Buyer hereby warrants and confirms that having made due and careful enquiry at the date hereof, it has not already formulated and is not aware of any claim it may have against the Seller under the Warranties; PROVIDED THAT such confirmation shall not constitute a general waiver by the Buyer of any rights which it may have under this agreement in respect of any breach of Warranty arising from information subsequently in the Buyer's possession which may in the future form a basis of a claim under the Warranties.

	Subject to the second sentence of clause 8.11(c), the Buyer undertakes to take or procure the taking of all such reasonable steps and action as are necessary or as the Seller may reasonably require in order to mitigate any claim under the Warranties, and the Buyer's Group shall act in accordance with such request subject to the Buyer being indemnified by the Seller against all reasonable costs and expenses incurred in connection therewith.  Nothing in this agreement shall, or shall be deemed to, relieve the Buyer of any common law or other duty to mitigate any loss or damage incurred by it.

	The Buyer shall indemnify the Seller and hold the Seller, the Seller's subsidiaries and their respective officers, directors and employees harmless against and in respect of any and all damages, losses, claims, penalties, liabilities, costs and expenses (including, without limitation, all fines, interest, legal fees and expenses and amounts paid in settlement), that arise from or relate or are attributable to (a) any misrepresentation by the Buyer or breach of a warranty made by the Buyer, in each case, under clause 8.1 hereof, (b) any breach of any covenant or agreement on the part of the Buyer set forth herein, (c) any liability or obligation to brokers retained by the Buyer in connection with the transactions contemplated by this agreement, (d) the Assumed Liabilities, (e) any ICT Business Employee arising on or after the Completion Date, (f) any breach by the Buyer of regulation 10 of the Transfer Regulations in relation to the UK Employees and (g) any claim by a UK Employee (whether or not such UK Employee resigns and/or objects under Regulation 5(4A) of the Transfer Regulations) that Seller is in breach of contract and/or in breach of any statutory employment rights because of any intention of the Buyer to change any terms or conditions of employment or working conditions of any UK Employee after the Completion Date (including, without limitation, any plans of the Buyer to change the pension benefits in respect of any UK Employees).

	Subject to the limitations set forth in this clause 8, the Seller shall indemnify the Buyer and hold the Buyer, each member of the Buyer's Group and their respective officers, directors and employees harmless against and in respect of any and all damages, losses, claims, penalties, liabilities, costs and expenses (including, without limitation, all fines, interest, legal fees, and expenses and amounts paid in settlement), that arise from or relate or are attributable to (a) a misrepresentation by the Seller or breach of a warranty made by the Seller, in each case, under clause 2.1 with respect to the Shares or clause 8.2(a) or in clauses 6.2 (relating to title to the Shares) and 17 (relating to Taxes) of schedule 3 hereof, (b) a misrepresentation by the Seller or breach of any other Warranty made by the Seller and set forth in Schedule 3 attached hereto, (c) any breach of any covenant or agreement on the part of the Seller set forth herein (including the covenants set forth in clause 8.22), (d) any liability or obligation to brokers retained by the Seller in connection with the transactions contemplated by this agreement, (e) the Excluded Liabilities, (f) any Non-ICT Business Employee arising before or after the Completion Date, (g) any ICT Business Employee arising before the Completion Date and (h) any liabilities or obligations relating to the ICT Business as conducted before the Completion Date (including any liabilities of the Company or Galen Limited for any period ended before the Completion Date, but, excluding, however, (i) the Completion Date Liabilities, (ii) any liability of the Company, or any portion of the Assumed Liabilities, in each case consisting solely of obligations under contracts which are to be performed after, and relate to the period after, the Completion Date or (iii) those liabilities with respect to which the Seller is providing indemnification pursuant to clause 8.23) of any kind, character or description (whether known or unknown, accrued, absolute, liquidated, contingent or otherwise) and whether asserted prior to or after the Completion Date and including, without limitation, any such liabilities which (i) relate to events or circumstances which occurred on or before the Completion Date but which do not arise until after the Completion Date or (ii) relate to any products or services sold, licensed or performed (as the case may be) by the Company or Galen Limited or any of their respective Affiliates on or before the Completion Date, whether pursuant to a Service Contract or otherwise; PROVIDED, HOWEVER, to the extent that the existence of liability pursuant to clause 8.21(h) would also result in liability pursuant to the Warranties contained in schedule 3 or clause 8.2(b) or the indemnities contained in clause 8.21 (other than those contained in clause 8.21(h)), the provisions of clauses 8 applicable to the Warranties contained in schedule 3 or clause 8.2(b) or the indemnities contained in clause 8.21 (other than those contained in clause 8.21(h)) shall apply.

"Non-ICT Business Employee" means any employee of the Seller's Group excluding the ICT Business Employees.

	The Seller and the Buyer acknowledge and agree that the sale and purchase of the UK Assets pursuant to this agreement will constitute a relevant transfer for the purposes of the Transfer Regulations and that it will not operate so as to terminate any of the contracts of employment of the UK Employees.

	The Seller warrants to the Buyer and it successors and assigns that the employer of the UK Employees within the Seller's Group:

	has performed and observed pending Completion, its obligations under or in connection with the contracts of employment of the UK Employees;

	except to the extent provision has been made in the Completion Date Statement, has paid to the UK Employees all remuneration or benefits in kind to which they are entitled up to and including the Completion Date including, without limitation, all wages and salaries, sick pay, maternity pay, accrued holiday pay, expenses, accrued bonus, commission and other sums payable in respect of any period up to the Completion Date;

	having relied upon the Buyer's warranties to the Seller in clause 8.1(c) of this agreement in relation to measures envisaged by the Buyer following Completion has complied in all respects with Regulation 10 of the Transfer Regulations with respect to the ICT Business Employees;

	since the Accounts Date has not altered (whether to take effect prior to, on or after Completion), any of the contractual terms of employment of any of the UK Employees;

	since the Accounts Date has not made any deduction from the salary or other wages due to any of the UK Employees (otherwise than in respect of PAYE and National Insurance contributions) unless such deduction shall have been approved in writing by such of the UK Employees;

	since the Accounts Date has not terminated or served notice to terminate the contract of employment of any of the UK Employees; and

	since the Accounts Date has not transferred or moved or redeployed any of the UK Employees from working within the ICT Business.

	Subject to the limitations set forth in this clause 8, the Seller shall indemnify the Buyer and hold the Buyer, each member of the Buyer's Group and their respective officers, directors and employees harmless against and in respect of any and all damages, losses, claims (whether in contract, tort or otherwise), penalties, liabilities, costs and expenses (including, without limitation, all fines, interest, legal fees, and expenses and amounts paid in settlement), that arise from or relate or are attributable to (a) any of the matters contemplated in the incident report dated February 18, 2002 from the Company to Aventis Pharmaceuticals relating to Aventis Pharmaceuticals Protocols ENO.GMA.301, (b) the Lambertville Lease and (c) any claims relating to the Company's alleged unlawful duplication and use of licensed software of Microsoft, Inc. at any time prior to the Completion Date.

	The Buyer:

	shall seek, where possible, to mitigate any loss, damage or liability in relation to a claim which is made against the Seller pursuant to clause 8.23, subject to the second sentence of clause 8.11(c); and

	shall not make (and shall procure that no member of the Buyer's Group will make) any admission of liability, agreement, settlement or compromise with any third party in relation to the subject of the matters referred to in clause 8.23 without the prior written consent of the Seller.

	The Seller shall assume the defense of any claim in connection with the matters referred to in clause 8.23 through counsel of its own choosing; PROVIDED, HOWEVER, that the Seller's counsel shall be reasonably satisfactory to the Buyer.  If the Buyer desires to participate in any such defense assumed by the Seller, it may do so at its sole cost and expense.

	TAX MATTERS

	Tax indemnification

	The Seller hereby indemnifies the Buyer against and agrees to hold the Buyer harmless from (i) all liability for Taxes of the Company for any Pre-Completion Tax Period and the portion of any period beginning before and ending after the Completion Date (a "Straddle Period") which ends at the end of the day on the Completion Date, (ii) all liability (as a result of Treasury Regulation 1.1502-6 or otherwise) for Taxes of the Seller, Galen Inc. or Galen Limited or any other corporation which is or has been an Affiliate of the Company and (iii) all liability for Taxes attributable to a breach by the Seller of any of the warranties contained in clause 17 of schedule 3.  Notwithstanding the foregoing, the Seller shall not indemnify and hold harmless the Buyer from any liability for Taxes attributable to Taxes of the Company for a Pre-Completion Tax Period to the extent of the accrual, if any, established therefor on the Completion Date Statement.  Estimated Taxes paid by or on behalf of the Company on or prior to the Completion Date shall be credited with respect to the Pre-Completion Tax Period.

	The Buyer hereby indemnifies the Seller against and agrees to hold the Seller harmless from (i) all liability for Taxes of the Company for any Post-Completion Tax Period and the portion of any Straddle Period which begins after the Completion Date, (ii) all liability for Taxes attributable to any action taken after Completion by the Buyer or any of its Affiliates (other than any action expressly required by applicable Legal Requirements or required or authorized by this agreement) (a "Buyer Tax Act") and (iii) all liability for Taxes of the Company to the extent of the accrual, if any, established therefor in the Completion Date Statement.

	The Buyer and the Seller agree that for federal income tax purposes, the taxable year of the Company shall end as of the end of the day on the Completion Date and, with respect to all other Taxes the Seller and the Buyer shall, to the extent permitted by applicable law, elect with the relevant Taxing Authority to close the taxable period of the Company at the end of the day on the Completion Date.  In any case where applicable law does not allow the Company to close its taxable year on the Completion Date:

	real, personal and intangible property Taxes ("property Taxes") of the Company for the Pre-Completion Tax Period shall be equal to the amount of such property Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that are in the Pre-Completion Tax Period and the denominator of which is the total number of days in the Straddle Period; and

	the Taxes of the Company (other than property Taxes) for the Pre-Completion Tax Period shall be computed as if such taxable period ended as of the close of business on the Completion Date.

	The parties agree that any indemnification payments made pursuant to this agreement shall be treated for tax purposes as an adjustment to the Consideration unless otherwise required by law.

	Preparation of Tax Returns and payment of Taxes

	The Seller shall be required to, and shall have the authority to, prepare, execute and file all Tax Returns for the Company for all Pre-Completion Tax Periods.  The Seller shall be required to pay, and shall be responsible for the payment of, all amounts due on such Tax Returns.  All such Tax Returns will be prepared in a manner consistent with the past practice of the Company unless otherwise required by law or by GAAP.  The Buyer and the Seller shall cooperate in the filing of such Tax Returns.  The Company shall be responsible for the preparation of all Tax Returns for all taxable periods ending after the Completion Date and shall be responsible for the payment of all amounts due on such Tax Returns provided, however, that for any Straddle Period of the Company Seller shall reimburse the Buyer for any amount owed by the Seller pursuant to clause 9.1 (as calculated under clause 9.1(c)) to the extent that the amount exceeds any accrual for such Taxes on the Completion Date Statement.  The Buyer or the Company shall prepare all Straddle Period Returns in a manner consistent with past practice of the Company unless otherwise required by applicable law or GAAP and shall deliver the returns to the Seller at least 30 days before such Return is due to be filed (including any valid extensions) for the Seller's review and comment.  The Seller shall have the right to comment on and object to any items set forth on such Returns and the Buyer shall accept all reasonable comments of the Seller and in the event of such an objection, the parties shall attempt in good faith to resolve the dispute and any resolution shall be final and binding on them.  If the parties cannot resolve any such dispute within 15 days of such delivery by the Buyer to the Seller, the items remaining in dispute shall be submitted to an independent accounting firm of international reputation selected by, and mutually acceptable to, the Seller and the Buyer.  The independent accounting firm so selected shall determine the proper amounts for the items remaining in dispute in a manner consistent with past practice of the Company unless otherwise required by applicable law or GAAP and the Buyer and the Seller shall be bound by the determination by the independent accounting firm absent manifest error.  The accounting firm shall make any such determination within 7 days after submission of the remaining disputed items.  If a Tax Return is due before the date a disputed item is resolved hereunder, it shall be filed as prepared and resolved items shall be reflected on an amended Return.  The Seller shall be responsible for filing any amended consolidated, combined or unitary Tax Returns for any Pre-Completion Tax Period that are required as a result of examination adjustments made by the IRS or by the applicable state, local or foreign Taxing Authorities for such Pre-Completion Tax Periods as finally determined.  For those jurisdictions in which separate income Tax Returns are filed by the Company, any required amended Returns resulting from such examination adjustments, as finally determined, shall be prepared by the Seller and furnished to the Company for approval (which approval shall not be unreasonably withheld), signature and filing at least 30 days prior to the due date for filing such Returns.

	Notwithstanding anything to the contrary in this agreement, the Seller and the Buyer agree that (i) the Buyer and Galen Inc. may restate the separate company tax basis balance sheets for the Company and Galen Inc. for any period ending after May 1, 1999 to reflect on the tax basis balance sheets of the Company adjustments to the tax basis of the assets of the Company resulting from the acquisition of the Company by Galen Inc., and the election made under Section 338(h)(10) of the Code in connection with such acquisition and the subsequent adjustments thereto in accordance with all applicable Legal Requirements (the "TBBS Restatement"); (ii) the Seller shall cooperate with the Buyer, the Company and, if requested by the Buyer, with Galen Inc. and Buyer's Accountants, in determining and making all such adjustments as may be necessary to complete the TBBS Restatement; (iii) the Buyer may prepare, execute and file original or amended state income tax returns of the Company for taxable periods that end after May 1, 1999 (the "State Tax Return Restatements"); (iv) the Seller shall cooperate with the Buyer, the Company and, if requested by the Buyer with Buyer's Accountants, in determining and making all such adjustments as may be necessary to complete the State Tax Return Restatements; and (v) the Seller shall indemnify and hold harmless the Buyer's Group for any liability for Taxes of the Company for any Pre-Completion Tax Period and the portion of any Straddle Period that ends on the end of the day on the Completion Date that may arise or result from the State Tax Return Restatements.  The Buyer shall deliver any State Tax Return Restatement to the Seller at least 30 days before such State Tax Return Restatement is expected to be filed for the Seller's review and comment.  The Seller shall have the right to comment on and object to any items set forth on such State Tax Return Restatements and the Buyer shall accept all reasonable comments of the Seller and in the event of such an objection, the parties shall attempt in good faith to resolve the dispute and any resolution shall be final and binding on them.  If the parties cannot resolve any such dispute within 15 days of such delivery by the Buyer to the Seller, the items remaining in dispute shall be submitted to an independent accounting firm of international reputation selected by, and mutually acceptable to, the Seller and the Buyer.  The independent accounting firm so selected shall determine the proper amounts for the items remaining in dispute and the Buyer and the Seller shall be bound by the determination by the independent accounting firm absent manifest error.  The accounting firm shall make any such determination within 7 days after submission of the remaining disputed items.

	Procedure relating to Indemnification of Tax Claims

	If a claim shall be made by any Taxing Authority, which, if successful, might result in an indemnity payment to a party, one of its Affiliates or any of their respective officers, directors, employees, agents or representatives pursuant to clause 9.1, the party receiving such claim shall promptly and in any event no more than 10 days following receipt of such claim, give notice to the other party in writing of such claim (a "Tax Claim"); PROVIDED THAT, that failure to give such notice shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually prejudiced as a result of such failure.

	With respect to (i) any Tax Claim relating to any Pre-Completion Tax Period, the Seller shall control all proceedings and may make all decisions taken in connection with such Tax Claim (including selection of counsel) and, without limiting the foregoing, may in its sole discretion pursue or forego any and all administrative appeals, proceedings, hearings and conferences with any Taxing Authority with respect thereto, and may, in its sole discretion, either pay the Tax claimed (with its own funds) and sue for a refund where applicable law permits such refund suits or contest the Tax Claim in any permissible manner and (ii) any Tax Claim relating to any Straddle Period, the Seller shall control all proceedings; PROVIDED THAT to the extent that the settlement of an issue raised in such a proceeding or Tax Claim could materially affect the liability for Taxes of the Company, the Buyer or any member of the Buyer's Group for any period ending after the Completion Date, the Seller shall consult with and consider in good faith, the suggestions of the Company and the Buyer with respect thereto, the Seller shall not settle such issue without the consent of the Buyer, which shall not be unreasonably withheld, and nothing set forth in this clause 9.3(b) will alter or affect the Buyer's right to receive, or the Seller's obligation to provide, indemnity pursuant to clause 9 of this agreement.  The Seller shall keep the Buyer informed of the progress of any such Tax Claim and proceeding.  The Buyer shall control all proceedings with respect to any Tax Claim relating to a taxable period beginning after the Completion Date; PROVIDED THAT to the extent that the settlement of an issue raised in such a proceeding could materially affect the liability for Taxes of the Seller, Galen Inc. or the Company for any Pre-Completion Tax Period (or portion thereof), the Buyer shall consult with and consider in good faith the suggestions of the Seller with respect thereto, and the Buyer shall not settle such issue without the consent of the Seller, which shall not be unreasonably withheld.  The Buyer shall keep the Seller informed of the progress of any such Tax Claim and proceeding.

	Refunds

The Buyer shall pay to the Seller all refunds or credits of Taxes received by the Buyer or the Company after the Completion Date and attributable to Taxes paid by or on behalf of the Company (or any predecessor thereof) with respect to a Pre-Completion Tax Period or the portion of any Straddle Period ending on the Completion Date.  Each such payment (which shall include any interest received or credited with respect to such refund or credit) shall be made to the other party promptly after receipt of any such refund from, or allowance of such credit by, the relevant Taxing Authority.  The Seller and the Buyer shall cooperate, and shall cause the Company to cooperate, in obtaining any refund or credit of Taxes available from the relevant Taxing Authority.  The Buyer and the Company shall make any and all elections under section 172(b)(3) of the Code (or any state, local and foreign tax provisions comparable to such section within which the Company files or has filed a combined, unitary or similar return with the Seller or any of its Affiliates (including Galen Inc.) to relinquish the entire carryback period with respect to any net operating loss attributable to the Company in any Post-Completion Tax Period that could be carried back to a Pre-Completion Tax Period.  Neither the Seller nor any Affiliate (including Galen Inc.) shall be required to pay to the Buyer or the Company any refund or credit of Taxes that results from the carryback to any Pre-Completion Tax Period of any net operating loss, capital loss or tax credit attributable to the Company in any Post-Completion Tax Period.

	Cooperation

	The Buyer and the Seller shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the preparation and filing of any Tax Return, statement, report or form, any audit, litigation or other proceeding with respect to Taxes or a Tax Claim (including, without limitation, by executing and delivering such powers of attorney and other documents as are necessary to carry out the intent of this clause 9.5 and this clause 9); Such cooperation shall include the retention and (upon the other party's request) the provision of records and information which, in the case of the Seller, have not been transferred to the Buyer pursuant to this agreement and which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Buyer and the Seller agree to retain all books and records with respect to Tax matters pertinent to the Company relating to any Pre-Completion Tax Period or Straddle Period for a period of 6 years after the Completion Date and if the Buyer or the Seller, as the case may be, so requests shall allow the other party to make copies of such books and records.

The Buyer and the Seller further agree, upon request, to use reasonable efforts to obtain any certificate or other document from any Governmental Authority or customer of the Company or any other person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby).

	PROTECTION OF GOODWILL

	In consideration of the Buyer entering into the sale and purchase of the ICT Business, the Seller agrees with the Buyer that it will not, whether on its own account, or by any of its subsidiaries or any other person that is a member of the Seller's Group (which, for the purposes of this clause shall include only Affiliates of Seller that are controlled by Seller) or through any of their respective employees or agents or through any other person, firm or company, either directly or indirectly and either solely or jointly with any other person (either on its own account or as the agent of any other person) and in any capacity whatsoever:

	for a period of 3 years from the Completion Date, provide services to or be employed or otherwise engaged or interested, in any business which is engaged in the provision or supply of any Restricted Service anywhere in the Restricted Territory;

	for a period of 3 years from the Completion Date, solicit from the Buyer or the Company any person, firm or company or other organization which was a customer or supplier of the ICT Business at Completion, but only for the provision of Restricted Services; or

	for a period of 2 years from the Completion Date, induce, solicit or endeavor to solicit from the Buyer or the Company, or hire or otherwise engage, any ICT Business Employee (excluding support staff) employed in connection with the ICT Business on Completion, whether or not such person would commit any breach of his contract of employment or terms of engagement by reason of his leaving the service of the Buyer, or the Company; PROVIDED THAT this restriction will not apply to any advertisements for recruitment made available generally through any recruitment agency or advertisement available to the public; or

	use any trade or domain name (including, but not limited to, the expression "ICTI") or e-mail address used by the Company or any other member of the Seller's Group in connection with the ICT Business at any time during the two (2) months immediately preceding the Completion Date solely in relation to the ICT Business or any other name intended or likely to be confused with any such trade or domain name or e-mail address; or

	for a period of three (3) years following the Completion Date, use in the course of its business the domain name "icti-usa.com" as the universal resource locator of any website accessible on the Internet.

	Nothing in this clause 10 shall prevent or restrict any member of the Seller's Group from doing the following if they would otherwise be prohibited by this clause 10:

	holding, or being interested in, up to but not exceeding 15% of the issued share or loan capital of any company (or any amount of such issued share or loan capital carrying in aggregate up to but not exceeding 15% of the votes which could be cast at a general meeting of such company); or

	acquiring the whole or any part of a business which, or the share capital of a company or group of companies whose business or a part of whose business, includes operations the carrying on of which would otherwise amount to a breach of the undertaking contained in clause 10.1 (the "Competitive Operations"), as part of a larger acquisition or series of related acquisitions, PROVIDED THAT the relevant member of the Seller's Group shall within the following 12 months use its commercially reasonable  efforts to sell the Competitive Operations as soon as is reasonably practicable following such acquisition (which shall, without limitation, include inviting the Buyer to make a competitive bid for the sale of the Competitive Operations) save that the relevant member of the Seller's Group shall not be obliged to sell the Competitive Operations if those Competitive Operations comprise a minor part of the business or business of such company, group of companies or businesses acquired or in which the Seller's Group has acquired an interest.  For the purpose of this clause 10.2(b), "minor part" of the business of such company, group of companies or business shall be part of its overall business in which the turnover of the Competitive Operations does not exceed the lower of (i) 10% of the gross turnover per annum of the company, group of companies or business acquired or (ii) One Million Dollars ($1,000,000).

	The Seller agrees with the Buyer that it will not at any time after Completion, whether by itself or through any other member of the Seller's Group, whether directly or indirectly, in the course of carrying on its business, claim or represent any continuing association with the Buyer in respect of the ICT Business for the purpose of obtaining or retaining any business or custom.

	The Seller agrees with the Buyer that the restrictions contained in this clause 10 are considered reasonable and necessary for the protection of value of the ICT Business (in particular the goodwill of the ICT Business) by the parties hereto and the Seller acknowledges that, in the light of the total Consideration paid under this agreement and the manner of computation thereof, the nature of the ICT Business and all other relevant matters, the provisions of this clause 10 are considered reasonably necessary for the protection of the interests of the Buyer, and the restrictive covenants do not go beyond what is reasonably necessary to protect the legitimate business interests of the Buyer.

	In the event that any restriction in this clause 10 shall be found to be unenforceable but would be enforceable if some part thereof were deleted or the area of operation or the period of application reduced, such restriction shall apply with such modification as may be necessary to make it legal and enforceable.  Without prejudice to the generality of the foregoing, if such invalidity arises by reason of the period of restriction being excessive, such period as shall be held by a court of competent jurisdiction to be reasonable shall be able to be substituted for the period herein in order to make the restriction binding on the relevant parties, and, accordingly, the parties hereto do hereby authorize such court to revise and amend such restriction so as to produce a legally enforceable restriction, and, if the court refuses to do so, the parties hereto agree that such restriction shall not be rendered void, but shall be deemed amended to apply as to such maximum time and territory and to such other extent as such court may judicially determine or indicate to be reasonable.

	Each undertaking contained in this clause 10 shall be construed as a separate undertaking and if one or more of the undertakings contained in this clause 10 is held to be against the public interest or unlawful or in any way an unreasonable restraint of trade the remaining undertakings shall continue to bind the Seller and its subsidiary undertakings.

	The Seller acknowledges and agrees that the Buyer's remedy at law for a breach or threatened breach of any of the provisions of clause 10.1 would be inadequate and, in recognition of that fact, in the event of a breach or threatened breach by the Seller of any of the provisions of clause 10.1, it is agreed that, in addition to its remedy at law, the Buyer shall be entitled to, without posting any bond or other security, equitable relief in the form of specific performance, temporary restraining order, temporary or preliminary injunction, or any other equitable remedy which may then be available, without having to prove damages.  The Seller agrees not to oppose the Buyer's request for any of the relief described in this clause 10.7 on the grounds that such relief is inappropriate because there is an adequate remedy at law.  Nothing set forth in this clause 10.7 will be construed as prohibiting the Buyer from pursuing any other rights or remedies available to it for any such breach or threatened breach of clause 10.1 by the Seller.  The provisions of this clause 10 are for the benefit of the Buyer, its successors and assigns and any other member of the Buyer's Group, as now or hereafter constituted, and may be enforced by the Buyer, its successors and assigns and any such member of the Buyer's Group.

	CONFIDENTIAL INFORMATION

	In consideration of the mutual promises contained in this agreement each party undertakes to the other that they shall:

	not, and shall procure that none of their directors, officers, employees, advisors or agents shall use or disclose to any person Confidential Information; and

	use all reasonable efforts to prevent the use or disclosure of Confidential Information by any person other than as permitted by this agreement.

	Clause 11.1 does not apply to:

	disclosure of Confidential Information to or at the written request of the other party;

	use or disclosure of Confidential Information required to be disclosed by law, regulation, any revenue authority or the London Stock Exchange, the UK Listing Authority, Nasdaq National Market or any other exchange on which securities of the Seller are listed; or

	Confidential Information which is in the public domain other than by a breach by either party of clause 11.1.

	ANNOUNCEMENTS, ETC.

	No party shall disclose the making of this agreement nor its content (except those matters set out in the press release in the Agreed Form) nor the existence of any claim pursuant to the matters identified in indemnities contained in this agreement and each party shall procure that each of its Related Persons and its professional advisers shall not make any such disclosure without the prior consent of the other party unless disclosure is to its professional advisers or required by law or the rules or standards of the London Stock Exchange, the Nasdaq National Market or the Listing Rules of the UK Listing Authority or the rules and requirements of any other regulatory body or other applicable stock exchange; PROVIDED THAT, except for disclosures in connection with any claim pursuant to the matters identified in indemnities contained in this agreement, this clause does not apply to announcements, communications or circulars made or sent by either party after Completion to customers, clients or suppliers of the Buyer's Group to the extent that it informs them of the Buyer's acquisition of the ICT Business or to any announcements containing only information which has become generally available.

	The restrictions contained in clause 12 shall apply without limit of time and whether or not this agreement is terminated.

	ASSIGNMENT

This agreement is personal to the parties and accordingly no party, without the prior written consent of the other, shall assign, transfer or declare a trust of the benefit of all or any of any other party's obligations nor any benefit arising under this agreement except that following Completion the Buyer may assign the benefit of all its obligations and benefits arising hereunder to any member of the Buyer's Group, PROVIDED THAT such assignee shall remain within the Buyer's Group.  In the event that such assignee ceases to be a member of the Buyer's Group such assignment shall be voidable and the relevant party shall procure that the assignee shall assign in full any and all benefits to the Buyer or another member of the Buyer's Group.  Furthermore, notwithstanding the foregoing restrictions regarding the assignment of this agreement, the Buyer, without the consent of the Seller, shall be permitted to pledge and assign any or all of the Buyer's rights hereunder to any financial institutions now or hereafter providing senior financing to the Buyer or any other member of the Buyer's Group as collateral security for their obligations to such institutions; PROVIDED, THAT, any such assignment and pledge is in writing and such writing includes an acknowledgment by such institution that its exercise or enforcement of any rights so assigned and pledged to it would be subject, in all respects, to all applicable terms, conditions and restrictions set forth in this agreement or in any of the Transaction Documents.

	COSTS

Unless expressly otherwise provided in this agreement, each of the parties shall bear its own legal, accountancy and other costs, charges and expenses connected with the sale and purchase of the ICT Business, the preparation and negotiation of this agreement and any transaction contemplated hereunder.

	ENTIRE AGREEMENT

Each party, on behalf of itself and as agent for each of its Related Persons, acknowledges and agrees with the other party (each such party acting on behalf of itself and as agent for each of its Related Persons) that save as otherwise agreed in writing by the parties:

	this agreement together with those two (2) certain letter agreements, both dated as of the date hereof, by and between the parties hereto and any other documents referred to in this agreement (together the "Transaction Documents"), constitutes the entire and only agreement between the parties and their respective Related Persons relating to the subject matter of the Transaction Documents; 

	neither it nor any of its Related Persons has been induced to enter into any Transaction Document in reliance upon, nor has any such party been given, any warranty, representation, statement, assurance, covenant, agreement, undertaking, indemnity or commitment of any nature whatsoever other than as are expressly set out in the Transaction Documents and, to the extent that any of them has been, it (acting on behalf of itself and as agent on behalf of each of its Related Persons) unconditionally and irrevocably waives any claims, rights or remedies which any of them might otherwise have had in relation thereto; and

	the only remedies available to it, save as otherwise agreed hereunder and in the Transaction Documents, in respect of the Transaction Documents (and, where appropriate, to its Related Persons) are damages for breach of contract and, for the avoidance of doubt, neither it (nor its Related Persons, where appropriate) have any right to rescind or terminate any Transaction Documents either for breach of contract or for negligent or innocent misrepresentation or otherwise;

PROVIDED THAT the provisions of this clause 15 shall not exclude any liability which any of the parties or, where appropriate, their Related Persons would otherwise have to any other party or, where appropriate, to any other party's Related Persons or any right which any of them may have in respect of any statements made fraudulently by any of them prior to the execution of this agreement or any rights which any of them may have in respect of fraudulent concealment by any of them.

	WAIVER, AMENDMENT

	A waiver of any term, provision or condition of, or consent granted under, this agreement shall be effective only if given in writing and signed by the waiving or consenting party and then only in the instance and for the purpose for which it is given.

	No failure or delay on the part of any party in exercising any right, power or privilege under this agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

	No breach of any provision of this agreement shall be waived or discharged except with the express written consent of the Seller and the Buyer.

	No variation to this agreement shall be effective unless made in writing and signed by all the parties.

	FURTHER ASSURANCE

	The Buyer and the Seller each shall execute all such documents and do such acts and things as may reasonably be required for the purpose of vesting in the Buyer the full legal and beneficial interest in the Shares and the UK Assets.

	The terms of this agreement shall insofar as they are not performed at Completion and subject as specifically otherwise provided in this agreement continue in force after and notwithstanding Completion.

	NOTICES

	Any notice, demand or other communication given or made under or in connection with the matters contemplated by the agreement shall be in writing and shall be deemed given when delivered personally, mailed by registered mail, return receipt requested, sent by documented overnight delivery service or, to the extent receipt is confirmed, by telecopy to the parties at the following addresses (or to such other address as a party may have specified by notice given to the other party pursuant to this provision):

In the case of the Buyer to:

ICTI Acquisition Inc.

c/o Clinical Trial Services Limited

Units 7 - 9

Seagoe Industrial Estate

Craigavon

Co. Armagh

Northern Ireland

Fax:02838 350729

Attention:Dr. Allen J. McClay

 

	
In the case of the Seller to:

Galen Holdings PLC

100 Enterprise Drive

Rockaway, New Jersey 07866

Fax:+ 973 442 3316

Attention:Company Secretary

With a copy to:

Simpson Thacher & Bartlett

425 Lexington Ave.

New York, NY 10017

Fax:             (212) 455-2502

Attention:         Gary Horowitz, Esq.

	 

, provided that if, in accordance with the provisions set forth above in this clause 18.1, any such notice, demand or other communication would otherwise be deemed to be given or made after 5:00 p.m. (local time in the jurisdiction in which such communication was dispatched) on a business day, such notice, demand, or other communication shall be deemed to be given or made at 9:00 a.m. (local time) on the next business day.

	Any party may notify the other parties to this agreement of a change to its name, relevant addressee, address or fax number for the purposes of clause 18.1, PROVIDED THAT such notification shall only be effective on:

	the date specified in the notification as the date on which the change is to take place; or

	if no date is specified or the date specified is less than five days after the date on which notice is given, the date falling five days after notice of any such change has been given.

	COUNTERPARTS

This agreement may be executed in counterparts, which together shall constitute one agreement.  Any party may enter into this agreement by executing a counterpart and this agreement shall not take effect until it has been executed by both parties.

	GOVERNING LAW AND JURISDICTION

	This agreement (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this agreement or its formation) shall be governed by and construed in accordance with the laws of the State of New York.

	Each party hereby irrevocably submit to the jurisdiction of any New York State or United States Federal Court sitting in New York City (and any appellate court therefrom) over any action or proceeding arising out of or relating to this agreement. 

	Each party irrevocably waives any objection which it might at any time have to the courts referred to in clause 20.2 as the forum to hear and decide any proceedings and to settle any disputes arising out of or relating to this agreement, and agrees not to claim that such courts are not a convenient or appropriate forum for any such proceedings or disputes and further irrevocably agrees that a judgment in any proceedings or disputes arising out of or relating to this agreement brought in any court referred to in this clause shall be conclusive and binding upon the parties and may be enforced in the courts of any other jurisdiction.

	Without prejudice to any other permitted mode of service, each party consents to the service of process out of any of the aforementioned courts by the mailing of copies thereof by registered airmail, postage prepaid, to such party at its address set forth in this agreement, such service of process, to be effective upon acknowledgment of receipt of such registered mail.  Nothing in this clause 20.4 shall affect the right of any party hereto to serve legal process in any other manner permitted by applicable law.  The Seller has appointed Warner Chilcott, Inc., a Delaware corporation, as registered agent for service of process in the U.S., which appointment may be changed at any time by Seller upon prior written notice to the Buyer pursuant to clause 18 hereof.

	INVALIDITY

If any provision of this agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction:

	the validity, legality and enforceability under the law of that jurisdiction of any other provision; and

	the validity, legality and enforceability under the law of any other jurisdiction of that or any other provision shall not be affected or impaired in any way.

	NO THIRD PARTY RIGHTS

The representations, warranties, covenants and agreements contained in this agreement are for the sole benefit of the parties hereto and their respective successors and permitted assigns and they shall not be construed as conferring and are not intended to confer any rights on any other persons. 

	GENERAL

	The parties have participated jointly in the negotiation and drafting of this agreement.  In the event an ambiguity or question of intent or interpretation arises, this agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this agreement. 

IN WITNESS whereof this agreement has been executed on the date first above written.
GALEN HOLDINGS PLC

 

By: /s/Anthony D. Bruno___________________
Name: Anthony D. Bruno

Title: Senior Vice-President

 

 

 

ICTI ACQUISITION INC.

 

By: /s/ Allen McClay______________________

Name: Allen McClay

Title: PresidentCONFIDENTIAL

ASSIGNMENT, TRANSFER AND ASSUMPTION AGREEMENT

This ASSIGNMENT, TRANSFER AND ASSUMPTION AGREEMENT (the "Agreement") is entered into as of December 7, 2002 (the "Effective Date"), by and between Galen (Chemicals) Limited ("Galen"), a company organized and existing under the laws of the Republic of Ireland with offices located at 4 Adelaide Street, Dun Laoghaire, Co. Dublin, Ireland, and Eli Lilly and Company ("Lilly"), a corporation organized and existing under the laws of the State of Indiana with offices located at Lilly Corporate Center, Indianapolis, Indiana 46285.  Galen and Lilly are sometimes referred to herein individually as a "Party" and collectively as "Parties". 

RECITALS

WHEREAS, subject to the terms and conditions set forth in this Agreement, Lilly and Galen desire to enter into an agreement pursuant to which:  (i) Lilly will sell or license to Galen, and Galen will purchase or license from Lilly, certain patents, promotional materials, supplemental new drug application, copyrights, trade dress, technology and trademarks owned or licensed by Lilly, (ii) Galen will license to Lilly (or Lilly will reserve) certain rights under patents, the supplemental new drug application, technology, copyrights, trade dress, trademarks and other assets purchased by or licensed to Galen to be used by Lilly to manufacture Product for Galen under the Manufacturing Agreement and to carry out the Permitted Activities, and (iii) Galen will assume certain liabilities associated with the rights transferred herein, each in accordance with the terms and conditions set forth herein; and

WHEREAS, Lilly and Galen desire to enter into a separate manufacturing agreement of even date herewith (the "Manufacturing Agreement") whereby Lilly will manufacture certain presentations of Product on behalf of Galen.

NOW, THEREFORE, in consideration of the foregoing, the covenants and promises contained in this Agreement, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Lilly and Galen agree as follows:

	

DEFINITIONS

For purposes of this Agreement, the following terms will have the meanings set forth below:

	"Activities" means the manufacture, packaging, marketing, distribution, promotion and sales of the Product as conducted by Lilly in the Territory prior to the Closing Date.

	"Affiliates" means, with respect to a Party, any Persons directly or indirectly controlling, controlled by, or under common control with, such Party.  For purposes of this definition, a Person has control of another Person if it has the direct or indirect ability or power to direct or cause the direction of management policies of such other Person or otherwise direct the affairs of such other Person, whether through ownership of at least fifty percent (50%) of the voting securities of such other Person, by contract or otherwise.

	"ANDA" means an Abbreviated New Drug Application approved by the FDA pursuant to 21 C.F.R. Section 314 authorizing the manufacturing and marketing of a product in the Territory.

	"Applicable Laws" means all applicable laws, ordinances, rules, regulations, writs, judgments, decrees, injunctions (whether preliminary or final), orders and other requirements of any kind whatsoever of any Governmental or Regulatory Authority, including all laws, ordinances, rules, orders and regulations promulgated by the United States Federal Trade Commission and the FDA, including cGMP (as defined in the Manufacturing Agreement).

	"Applicable Market" will have the meaning set forth in Section 2.5.

	"Application for Marketing Authorization" means, with respect to the Product or a Galen New Product, a New Drug Application or ANDA filed with the FDA pursuant to 21 U.S.C. Section 357 and 21 C.F.R. Section 314. 

	"Assigned Internet Domain Names" means the registered Internet domain names listed in paragraph 2 of Exhibit A.  

	"Assigned Trade Dress" means any unique, distinctive, appearance, look, shape, size or color of the Product marketed by Lilly or its Affiliates in the Territory as of the Effective Date other than the Licensed Trademark and Trade Dress. 

	"Assigned Trademarks" means the trademarks and Internet domain names listed in paragraph 1 of Exhibit A attached hereto, and all amendments thereto.  For avoidance of doubt, the Assigned Trademarks do not include the Assigned Trade Dress or Licensed Trademark and Trade Dress.

	"Assumed Liabilities" will have the meaning set forth in Article 10.

	"Calendar Quarter" means the three month periods ending on March 31, June 30, September 30, or December 31. The initial Calendar Quarter will be deemed to begin on the Closing Date and end on the first to occur of March 31, June 30, September 30 or December 31 in the same Calendar Year.

	"Calendar Year" means the twelve (12) month period ending on December 31st.  The initial Calendar Year will be deemed to begin on the Closing Date and end on December 31, 2002.

	"Closing Date" will have the meaning set forth in Section 7.3(a).

	"Combination Product" means (i) a pharmaceutical product that contains (A) fluoxetine hydrochloride or any analog, derivative, improvement or variation thereof, and (B) one or more active ingredients in physical admixture, and/or (ii) a pharmaceutical product in which a finished form of fluoxetine hydrochloride or any analog, derivative, improvement or variation thereof (a "Combo Ingredient") is contained separately but marketed as a unit with one or more other active ingredients.

	"Common Law Licensed Trade Dress" means the rights to the appearance, look, shape or size (but not color) of the parabaloidal capsule as it relates to the Product in the Territory.

	"Competing Product" means a pharmaceutical product which is an AB-rated equivalent to the Product, as defined in the 21st edition of Approved Drug Products with Therapeutic Equivalence Evaluations issued by the United States Department of Health and Human Services.

	"Competition Authority" will have the meaning set forth in Section 7.1(e).

	"Confidential Information" means information received (whether disclosed in writing, machine readable form, orally or by observation) by one Party or its Representatives (the "Receiving Party") from the other Party, or its Representatives or the Representatives of the Receiving Party (the "Disclosing Party") that the Receiving Party has a reasonable basis to believe is confidential to the Disclosing Party or is treated by the Disclosing Party as confidential, unless such information:

	was known to the Receiving Party prior to the Effective Date, as documented in written records or publications that lawfully are in the possession of the Receiving Party;

	was lawfully available to the trade or to the public prior to receipt from the Disclosing Party;

	becomes lawfully available to the trade or to the public after receipt from the Disclosing Party through no act on the part of the Receiving Party or its Representatives;

	is obtained by the Receiving Party from any Third Person having a legal right to disclose such information or data and who is not otherwise under an obligation of non-disclosure/non-use to the Disclosing Party; or

	is independently developed by an employee, contractor or agent of the Receiving Party, subsequent to and without access or reference to the information received from the Disclosing Party, as demonstrated by contemporaneous written records.

Notwithstanding the foregoing, (i) where a Disclosing Party discloses Confidential Information relating to an asset of such Disclosing Party to the Receiving Party, and the Receiving Party is or later becomes the owner of the asset, the Confidential Information then will be deemed to be Confidential Information of the Receiving Party, and the Disclosing Party may disclose such Confidential Information only in accordance with Article 8, provided, however, that where such Confidential Information was originally owned by Lilly, Lilly may use such Confidential Information for, and disclose such Confidential Information to the extent necessary or useful to carry out, the Permitted Activities without the prior written consent of Galen, and (ii) with respect to Confidential Information related to the Product Licensed Technology, Product Licensed Patent and Licensed Trademark and Trade Dress, Galen may use and disclose such Confidential Information for the purposes described in this Agreement (including the agreements contemplated by this Agreement) without the prior written consent of Lilly.

	"Co-Promotion Sales Force" means the professional sales representatives employed by Lilly and designated in Lilly's "Alpha" and "Gamma" sales divisions as of the date of this Agreement.

	"Copyrights" means all of Lilly's copyright rights listed in Exhibit B attached hereto, and any and all package inserts (excluding any Lilly-owned trademarks, logos or designs therein or trademarks, logos or designs licensed by Lilly therein other than those trademarks, logos or designs expressly assigned to Galen pursuant to the terms hereof), which are or were used or exercised by Lilly or its Affiliates solely in connection with the Activities.

	"Current Phase IV Clinical Trial" means Lilly's commitment to the FDA, as it exists as of the Effective Date, to conduct a Phase IV clinical trial for the use of Product by adolescents, as summarized in Exhibit K attached hereto.

	"Damages" means any and all costs, losses, claims, liabilities, fines, penalties, expenses, court costs, and reasonable fees and disbursements of counsel, consultants and expert witnesses incurred by a Party hereto or its Affiliates (including interest which may be imposed in connection therewith).

	"Data Exclusivity Period" means the period of time (if any) beginning on the date of the first Regulatory Approval by the FDA during which the FDA prohibits reference, without the consent of the owner of an Application for Marketing Authorization or Regulatory Approval package, to the clinical and other data that relates to the applicable Galen New Product and that is contained in such Application for Marketing Authorization or Regulatory Approval package and that is not published or publicly available outside of such Application for Marketing Authorization or Regulatory Approval package.

	"Deductible Amount" will have the meaning set forth in Section 11.4.

	"Effective Date" will have the meaning set forth in the first paragraph of this Agreement.

	"Excluded Liabilities" means:

(a)all Obligations arising out of any claims by the FDA, or any other Governmental or Regulatory Authority that Lilly has failed to fulfill Lilly's regulatory obligations in connection with the sNDAs prior to the Closing Date;

	all Obligations, regardless of when asserted, arising out of the manufacture, marketing, packaging, distribution, promotion or sale of the Product prior to the Closing Date, including product liability claims;

	all Obligations that Lilly expressly covenants and agrees to perform pursuant to the provisions of this Agreement or the Manufacturing Agreement;

	all Obligations of Lilly arising out of Section 6.14;

	all Obligations in respect of taxes relating to any of the assets or rights assigned or licensed pursuant to this Agreement (the "Property") for any period prior to the Closing Date; 

	all Obligations of Lilly arising out of Section 3.11(b); and

	all Obligations relating to the Product, but only to the extent sold prior to the Closing Date or related to any period prior to the Closing Date;

except in each case to the extent caused by the acts or omissions of Galen, its Affiliates or Galen's or Galen's Affiliates' respective employees, agents or contractors, or a breach of this Agreement by Galen.

	"FDA" means the United States Food and Drug Administration, and any successor agency or entity that may be established hereafter. 

	"Galen New Product" means (i) any pharmaceutical product other than the Product which includes fluoxetine or fluoxetine hydrochloride or any analog, derivative, improvement, or variation of fluoxetine or fluoxetine hydrochloride as an active ingredient, including Combination Products, to the extent such products treat the Indications, (ii) any pharmaceutical product other than the Product marketed under a name which includes or contains in whole or in part "Sarafem", "Sarafems" or "Sarafemz", or any variant or colorable imitation of  "Sarafem", "Sarafems" or "Sarafemz", or (iii) the Product to the extent it is marketed or promoted for any Indications other than PMDD.  Notwithstanding the foregoing sentence, a pharmaceutical product will not be a "Galen New Product" solely because (x) new packaging is created, designed or developed by Galen for the Product, and/or (y) the Product is manufactured into conventional capsules instead of Pulvules (R).  For purposes of Sections 2.4 (solely for purpose of determining if a Galen Third Person Royalty is owed by Lilly), 2.5 and 3.7(b), Galen New Product shall only include pharmaceutical products which include fluoxetine or fluoxetine hydrochloride or any analogs, derivatives, improvements or variations created by or for Galen to the extent such products treat the Indications.  Notwithstanding the preceding sentence, for purposes of Sections 2.4 (solely for purpose of determining if a Galen Third Person Royalty is owed by Lilly), 2.5 and 3.7(b), Galen New Product shall not include a pharmaceutical product containing fluoxetine or fluoxetine hydrochloride or any analogs, derivatives, improvements or variations for the treatment of an Indication to the extent created by Lilly or a Third Person other than a contractor for Galen.

	"Galen New Product Valid Claim" means any claim in a pending patent application or in an issued or granted patent with respect to the applicable Galen New Product, the term or any extension or supplementation of which has not expired, and which has not been held unenforceable, unpatentable or invalid by a decision of a court or other Governmental or Regulatory Authority of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer.

	"Galen Royalty Payment" will have the meaning set forth in Section 2.3. 

	"Galen Third Person Royalty Payment" will have the meaning set forth in Section 2.4.

	"Governmental or Regulatory Authority" means any United States, state or local governmental or regulatory authority, agency, commission, court or instrumentality, including the FDA.

	"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Section 7A of the Clayton Act, 15 U.S.C. Section 18a, as amended.

	"Implementation Team" will have the meaning set forth in Section 6.1.

	"Indemnified Party" and "Indemnifying Party" will have the meanings set forth in Section 11.3.

	"Indevus" means Indevus Pharmaceuticals, Inc. (formerly known as Interneuron Pharmaceuticals, Inc.) or any successor entity.

	"Indevus Agreement" means that certain License Agreement between Lilly and Indevus, dated June 19, 1997, as amended, supplemented or modified as of the date of this Agreement.

	"Indications" means premenstrual syndrome, which includes PMDD, which has also been known as late luteal phase dysphoric disorder.

	"Intellectual Property" will have the meaning set forth in Section 4.1.

	"Inventory" will have the meaning assigned in the Manufacturing Agreement.

	"Know-How" means unpatented (whether patentable or not) technical information which is not in the public domain including, without limitation: specifications; tangible or intangible manufacturing, physical chemistry and formulation know-how; analytical testing methods and validations; technical knowledge; expertise; skill; practices and procedures; formulae; tangible or intangible trade secrets; inventions (whether or not patentable); ideas; conceptions; reductions-to-practice; confidential and/or proprietary information; analytical methodology; processes (including any portion, step and component of such processes); methods; preclinical, clinical, stability and other data and results; chemical samples or substances; and all other experience and know-how, whether or not patentable; provided however, that Know-How will not include any patents.

	"Legal Representation Letter" means the Legal Representation Agreement, dated as of even date herewith, between Galen (Chemicals) Limited and Eli Lilly and Company, as hereafter amended, supplemented or otherwise modified.

	"Licensed Trademark and Trade Dress" means (i) the United States Pulvulesâ
 Trademark, (ii) the Common Law Licensed Trade Dress, and (iii) the United States Parabaloidal Capsule Trade Dress.

	"Lilly Royalty Payment" will have the meaning set forth in Section 2.5. 

	"Lilly Third Person Royalty Payment" will have the meaning set forth in Section 2.4.

	"Litigation Agreement" means the Litigation Agreement, dated as of even date herewith, between Galen (Chemicals) Limited and Eli Lilly and Company, as hereafter amended, supplemented or otherwise modified.

	 "Manufacturing Agreement" will have the meaning set forth in the second WHEREAS clause of this Agreement.

	"Marketing Materials" means (i) all market research, marketing plans, media plans, advertising, marketing-related clinical study results, form letters and medical queries, sales training materials, customer lists (including doctors, general purchasing organizations (GPOs) and pharmacists), promotional and marketing books and records, in each case, to the extent owned by Lilly or its Affiliates and that solely pertain to PMDD or the marketing and promotion of the Product in the Territory; and (ii) the Promotional Materials, provided, however, that "Marketing Materials" will exclude the labeling of the Product, which will be deemed part of the sNDAs.

	"MIT" means Massachusetts Institute of Technology.  

	"MIT License Agreement" means the Patent License Agreement (Exclusive), dated February 13, 1996, between MIT and Interneuron Pharmaceuticals, Inc., as amended, supplemented or otherwise modified as of the date hereof including, without limitation, the Side Agreement, dated June 17, 1997, among Indevus, Lilly, Eli Lilly S.A. and MIT.

	"Net Sales" means, with respect to the applicable pharmaceutical product, the gross amount invoiced by a Permitted Seller for sales of such applicable pharmaceutical product to Third Persons (other than Permitted Sellers), less

	trade, quantity, period, and cash discounts allowed;

	such applicable pharmaceutical product returns, credits and allowances;

	any tax imposed on the production, sales, delivery or use of the applicable pharmaceutical product;

	allowance for distribution expenses such as freight and insurance; and 

	any other similar or customary deductions.

Such amounts will be determined from books and records maintained in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").  In determining Net Sales of Galen New Product made by Lilly outside the Territory, Lilly's methodology of converting foreign currency sales into United States Dollars will be applied.

A Net Sale of a Product or Galen New Product will be deemed to have been made as of the date of delivery of such Product or Galen New Product to the Permitted Seller's customer without regard to whether its customer has actually paid the Permitted Seller; provided, however, that the amount of Net Sales will be determined by the actual Net Sale of Product or Galen New Product, as the case may be, it being acknowledged by the Parties that the actual amount of Net Sale may not be able to be determined as of the deemed date of Net Sale.  

Solely with respect to a Combination Product constituting a Galen New Product in which a Combo Ingredient is contained separately but marketed as a unit with one or more other active ingredients (a "Separated Combination Product"), the Net Sales of the Separated Combination Product, for the purposes of determining Galen Royalty Payments and/or Lilly Royalty Payments, as applicable, attributable thereto, but not for purposes of determining any royalty payments payable or owed to any Third Person as a result of Net Sales of such Separated Combination Product, shall be determined by multiplying the Net Sales of the Separated Combination Product by the fraction, A / (A+B) where A is the weighted average sale price of the Combo Ingredient when sold separately, and B is the weighted average sale price of the other product(s) sold separately in finished form.

In the event that the weighted average sale price of the Combo Ingredient can be determined but the weighted average sale price of the other product(s) cannot be determined, Net Sales of the Separated Combination Product for purposes of determining Galen Royalty Payments and/or Lilly Royalty Payments, as applicable, but not Galen Third Person Royalty Payments or Lilly Third Person Royalty Payments, as applicable, shall be calculated by multiplying the Net Sales of the Separated Combination Product by the fraction A / C where A is the weighted average sale price of the Combo Ingredient when sold separately and C is the weighted average sale price of the Separated Combination Product.

In the event that the weighted average sale price of the other product(s) can be determined but the weighted average sale price of the Combo Ingredient cannot be determined, Net Sales of the Separated Combination Product for purposes of determining Galen Royalty Payments and/or Lilly Royalty Payments, as applicable, but not Galen Third Person Royalty Payments or Lilly Third Person Royalty Payments, as applicable, shall be calculated by multiplying the Net Sales of the Separated Combination Product by the fraction that is equal to one (1) minus (B / C) where B is the weighted average sale price of the other product(s) when sold separately in finished form and C is the weighted average selling price of the Separated Combination Product.

In the event that the weighted average sale price of both the Combo Ingredient and the other product(s) in the Separated Combination Product cannot be determined, the Net Sales of the Separated Combination Product for purposes of determining the Galen Royalty Payments and/or Lilly Royalty Payments, as applicable, shall be determined through the good faith negotiation by the Parties.  If the Parties are unable to agree upon a percentage of the Net Sales of Separated Combination Product to be attributed to the Combo Ingredient and the other product(s) in the Combination Product for the purpose of determining royalty payments hereunder within thirty (30) days after the commencement of good faith negotiations, the Net Sales of the Separated Combination Product for purposes of determining the Galen Royalty Payments and/or Lilly Royalty Payments, as applicable, will be deemed to be equal to fifty percent (50%) of the Net Sales of the Separated Combination Product.

The weighted average sale price for a Combo Ingredient, other product(s) or Separated Combination Product shall be calculated once each Calendar Year and such price shall be used during all applicable royalty reporting periods for the entire following Calendar Year.  When determining the weighted average sale price of a Combo Ingredient, other product(s) or Separated Combination Product, the weighted average sale price to be used for a Calendar Year shall be calculated by dividing the gross sales dollars (translated into U.S. dollars) by the relevant units of active ingredient sold during the twelve (12) months (or the number of months sold in a partial Calendar Year) of the preceding Calendar Year for such Combo Ingredient, other product(s) or Combination Product.  In the event the weighted average sale price to be used in a Calendar Year cannot be determined by the first of such Calendar Year, the weighted average sales price used in the prior Calendar Year will be used until such time as the actual weighted average sales price can be determined, at which time, any over or under payments due to a difference between the actual weighted average sale price and the weighted average sale price used until the actual weighted average sale price was determined will be paid or credited, as applicable, in the first and subsequent (in the case of a credit), if necessary, Lilly Royalty Payment or Galen Royalty Payment, as applicable, after such determination.  In the initial Calendar Year in which the launch of a Combo Ingredient, the other products or Combination Products occurs, a forecasted weighted average sale price will be used for the Combo Ingredient, other product(s), or Combination Product.  Any over or under payment due to a difference between forecasted and actual weighted average sale prices for the initial Calendar Year will be paid or credited in the first and subsequent (in the case of a credit), if necessary, Galen Royalty Payments or Lilly Royalty Payments, as applicable, of the following Calendar Year.

For avoidance of doubt, the foregoing procedure will not be utilized for (i) the determination of Net Sales of Combination Products that constitute a Galen New Product other than Separated Combination Product, or (ii) the determination of Galen Third Person Royalties or Lilly Third Person Royalties.

	"Non-Transferred Books and Records" means all readily available files, documents, instruments, papers, books and records (including scientific, regulatory and financial) owned by Lilly or an Affiliate of Lilly to the extent, and only to the extent, they solely relate to (a) the license granted to Galen under Lilly's sNDA pursuant to Section 3.4 or (b) any other licenses granted by Lilly to Galen under the Product Licensed Patents, Product Licensed Technology and the Licensed Trademark and Trade Dress.

	"Obligations" will have the meaning set forth in Article 10.

	"Permitted Activities" means (a) manufacturing the Product, or having the Product manufactured, for Galen under the Manufacturing Agreement and otherwise fulfilling its obligations thereunder, (b) making or having the Product made in the Territory or outside of the Territory for purposes of Lilly or its Affiliates distributing, using, selling, offering to sell, importing, exporting, marketing, promoting, co-marketing and co-promoting the Product outside the Territory, (c) making, having made, distributing, using, selling, offering to sell, importing, exporting, marketing, promoting, co-marketing and co-promoting the Product outside of the Territory, (d) developing, making, having made and using Product anywhere in the world for internal research purpose, (e) co-promoting the Product in accordance with Section 3.11, and (f) conducting the Current Phase IV Clinical Trial.

	"Permitted Seller" means, in the case of Galen, Galen and its Affiliates and any assignee, licensee or sublicensee (other than Lilly and its Permitted Sellers) having the right to sell Product or Galen New Product in the Territory, and, in the case of Lilly, Lilly and its Affiliates, contractors and sublicensees (other than Galen and its Permitted Sellers) having the right to sell Galen New Product outside of the Territory.  Notwithstanding the preceding sentence, there will be only one Person who is a Permitted Seller with respect to each commercial sale of Product and such Person will be the first Person that makes a sale into the distribution channel.  By way of example, if Galen contracts with a Third Person to manufacture finished Product and such manufacturer sells Product to Galen, who in turn sells Product to a wholesaler, who in turn sells Product to a retail chain, Galen will be the Permitted Seller since it was the first Person to sell the Product into the distribution chain.

	"Person" means a natural person, a corporation, a partnership, a trust, a joint venture, a limited liability company, any Governmental or Regulatory Authority or any other organization or entity.

	"PMDD" means premenstrual dysphoric disorder.

	"Prescribing Professional" means physicians, osteopaths, nurse practitioners and physicians' assistants and any other healthcare professional with prescribing authority.

	"Product" means fluoxetine hydrochloride as marketed as of the Effective Date in the Territory as Sarafem (R) under the sNDA for the treatment of PMDD.

	"Product Intellectual Property" means (a) the Copyrights, (b) Assigned Trade Dress, and (c) the Assigned Trademarks.  

	"Product Licensed Patent" means the United States patent listed in Exhibit C attached hereto.

	"Product Licensed Technology" means all Know-How held or licensed by Lilly as of the Closing Date, to the extent such Know-How is used by Lilly in connection with the development, manufacture, use or sale of the Product in the Territory as of the Closing Date.  

	"Promotional Materials" means all existing and readily available advertising and promotional materials, including flyers, brochures, pamphlets, medical education slides, monographs or CME programs video cassettes, computer disks, CD-ROMs, websites, non-licensed software, tradeshow materials and booths, literature, journal articles or reprints, or any similar materials or items, which are owned by Lilly (including, without limitation, promotional materials contained in computer disks, CD-ROM or other electronic format and in the possession of Lilly's advertising agencies) and are readily available and pertain solely or exclusively to PMDD, the promotion of the Product in the Territory or the Activities.  

	"Purchased Assets" means all right, title and interest in and to (i) the Product Intellectual Property, together with the goodwill associated therewith, (ii) the Marketing Materials, (iii) to the extent permitted by Applicable Laws, the Transferred Books and Records and (iv) the Assigned Internet Domain Names.

	"Quality Agreement" will have the meaning set forth in the Manufacturing Agreement.

	"Reduction Date" means, the date the notice referred to in Section 2.2 is sent by Galen to Lilly.

	"Regulatory Approval" means, with respect to a Galen New Product, approval by the FDA of an Application for Marketing Authorization and satisfaction of any related applicable FDA registration and notification requirements (if any).

	"Remedies" will have the meaning set forth in Section 6.17.

	"Representatives" of a Party means that Party's agents, contractors, employees, officers, directors, consultants and advisors; its Affiliates; and the agents, contractors, employees, officers, directors, consultants and advisors of its Affiliates, agents, contractors, consultants and advisors.

	"Secondary Detail" means a promotional message involving the Product delivered by a professional sales representative in the Co-Promotion Sales Force during a face-to-face contact with a Prescribing Professional in which key Product attributes are verbally presented, consistent with the terms of this Agreement, and where such Product is given an important but not primary emphasis.

	"sNDAs" mean the United States supplemental New Drug Applications #058 and #067 under NDA 18-936.

	"Territory" means the United States.

	"Third Person" means a Person that is not a Party to this Agreement or an Affiliate of a Party to this Agreement.

	"Transferred Books and Records" means all readily available files, documents, instruments, papers, books and records (including scientific, regulatory, financial, tax and operational) other than the Non-Transferred Books and Records owned by Lilly or an Affiliate of Lilly to the extent, and only to the extent, they solely relate to both (a) the Product or the Activities and (b) the Purchased Assets.

	"United States" or "U.S." means the fifty (50) states and the District of Columbia constituting the United States of America and any territory or commonwealth owned or controlled by the United States of America, including the Commonwealth of Puerto Rico.

	"United States Paraboloidal Capsule Trademark" means the United States registered trademark design for a paraboloidal capsule, registration number 732,393, registration date 06/05/1962.

	"United States Pulvulesâ
 Trademark" means the United States registered trademark Pulvulesâ
, registration number 144210, registration date 06/28/1921.

	

CONSIDERATION

In consideration of (i) Lilly's sale of Purchased Assets to Galen as set forth in this Agreement, (ii) Galen's purchase of Product pursuant to the Manufacturing Agreement, and (iii) the licenses granted by Lilly to Galen under the Product Licensed Patents, Product Licensed Technology, the sNDAs and Licensed Trademark and Trade Dress, as set forth in this Agreement, Galen will pay the following amounts, as set forth in Sections 2.1, 2.2, 2.3 and 2.4: 

	Galen's Payment Upon the Closing Date. On the Closing Date, Galen will pay to Lilly the non-refundable, non-creditable sum of Three Hundred Seven Million Five Hundred Thousand Dollars ($307,500,000) (the "Closing Date Payment") by Federal Reserve electronic wire transfer in immediately available funds to an account designated by Lilly.

	Anniversary Payments.  On or before each of the first and second year anniversaries of the Closing Date, Galen will pay to Lilly the non-refundable (except as set forth below), non-creditable sum of Twelve Million Five Hundred Thousand Dollars ($12,500,000) (each payment referred to herein as an "Anniversary Payment" and collectively referred to as the "Anniversary Payments"), for total Anniversary Payments of Twenty-Five Million Dollars ($25,000,000).  In the event that during the term of this Agreement there is both (a) a Competing Product commercially available prior to the three year anniversary of the Closing Date and (b) the percentage of new prescriptions designated as "filled by other" as reflected in the latest IMSHealth audit is equal to or exceeds 35%, the Anniversary Payments shall, at Galen's option, to be exercised by written notice from Galen to Lilly, after the occurrence of such events, be reduced as follows:

	In the event that the Reduction Date occurs on or prior to the one year anniversary of the Closing Date, the first and second Anniversary Payments will be $3,750,000 each; and

	In the event the Reduction Date occurs after the first year anniversary of the Closing Date and on or prior to the second year anniversary of the Closing Date, the first Anniversary Payment will be $12,500,000, and the second Anniversary Payment will be $3,750,000.

Notwithstanding the foregoing, (i) in the event the Reduction Date occurs after the first year anniversary of the Closing Date and prior to the second year anniversary of the Closing Date, Lilly will pay to Galen within forty-five (45) days of the Reduction Date an amount equal to A minus the sum of B and C, where A is equal to $12,500,000 and B is equal to $12,500,000 multiplied by a fraction with a numerator of the number of days between the first year anniversary of the Closing Date and the Reduction Date and a denominator equal to 365, and C is equal to $3,750,000 multiplied by a fraction with a numerator of the number of days between the Reduction Date and the second year anniversary of the Closing Date, and a denominator equal to 365, and (ii) in the event the Reduction Date occurs after the second year anniversary of the Closing Date and prior to the third year anniversary of the Closing Date, Lilly will pay to Galen within forty-five (45) days of the Reduction Date an amount equal to A minus the sum of B and C, where A is equal to $12,500,000 and B is equal to $12,500,000 multiplied by a fraction with a numerator of the number of days between the second anniversary of the Closing Date and the Reduction Date and a denominator equal to 365, and C is equal to $3,750,000 multiplied by a fraction with a numerator of the number of days between the Reduction Date and the third year anniversary of the Closing Date, and a denominator equal to 365 (each payment described in subclauses (i) and (ii), a "Refund Amount").

Anniversary Payments and Refund Amounts will be made by Federal Reserve electronic wire transfer in immediately available funds to an account designated by the receiving Party.

	Galen Royalty Payment.  Galen will accrue and owe a royalty to Lilly equal to ten percent (10%) of Net Sales of a Galen New Product in the Territory by a Galen Permitted Seller (the "Galen Royalty Payment").  This Section 2.3 will be in force with respect to each Galen New Product until the later of (i) ten (10) years from the first commercial sale of such Galen New Product, (ii) the date upon which a Galen New Product Valid Claim with respect to such Galen New Product no longer exists, and (iii) the expiration of the Galen New Products' Data Exclusivity Period, if any. Galen will pay to Lilly the Galen Royalty Payment attributable to Net Sales of Galen New Products made during a Calendar Quarter within forty-five (45) days of the end of such Calendar Quarter, without regard to whether the Permitted Seller's customer has actually paid the Permitted Seller.  Except as otherwise provided herein, Galen Royalty Payments will be non-refundable and non-creditable.  Within thirty (30) days of the end of such Calendar Quarter, Galen will provide Lilly with a written report detailing the Net Sales of Galen New Products made by Galen or another Galen Permitted Seller during the previous Calendar Quarter.  All payments to Lilly pursuant to this Section 2.3 will be made by Galen by Federal Reserve electronic wire transfer in immediately available funds on its due date to an account designated by Lilly.  In the event the actual Net Sale amount cannot be determined by the date a Galen Royalty Payment is due with respect to a Net Sale, Galen may in good faith estimate such Net Sale, with any true up (either by credit or additional payment, as applicable) based on the actual Net Sale amount being made in the Galen Royalty Payment immediately following such determination.  The quarterly report described above will detail any such true up described in the preceding sentence.  Notwithstanding anything to the contrary in this Agreement, the Galen Royalty Payment due to Lilly as a result of a Net Sale of a Galen New Product will be reduced by (a) the amount of the Lilly Third Person Royalty Payment with respect to royalties that Galen is obligated to pay Lilly, if any, with respect to the same Net Sale of such Galen New Product and (b) royalties or other consideration actually paid to a Third Person by Galen, provided that such Third Person royalty was negotiated by Lilly.

	Third Person Royalties.  The Parties acknowledge and agree that Lilly will pay all royalty payments owed to Third Persons (including without limitation, all royalty payments owed to Indevus under the Indevus Agreement) as a result of Net Sales of Product or Galen New Product made by either Lilly or Galen or any of their Permitted Sellers on or prior to the third anniversary of the Closing Date (other than royalty payments negotiated by Galen on Product or Galen New Product sold by Galen which Galen shall pay).  Thereafter, Galen will be responsible to pay any Third Person any royalties or other consideration owed to such Third Person by Galen or a Galen Permitted Seller as a result of Net Sales of Product and/or Galen New Production in the Territory.  Galen will pay to Lilly an amount equal to the amount of royalties Lilly owes to a Third Person, if any, as a result of Net Sales of Galen New Product and/or Product made by Galen or another Galen Permitted Seller after the third anniversary of the Closing Date (the "Lilly Third Person Royalty Payment").  Lilly will pay to Galen an amount equal to the amount of royalties Galen owes to a Third Person, if any, as a result of Net Sales of Galen New Product made by Lilly or another Lilly Permitted Seller (the "Galen Third Person Royalty Payment"). Within thirty (30) days of the end of a Calendar Quarter, each Party will provide to the other Party a written report detailing the Net Sales of Product made by such Party or its Permitted Seller during the previous Calendar Quarter.  Lilly will invoice Galen for the Lilly Third Person Royalty Payment attributable to such Net Sales of Product and/or Galen New Product.  Galen will invoice Lilly for the Galen Third Person Royalty Payment attributable to such Net Sales of Galen New Product. Each Party will remit payment within thirty (30) days of the date of invoice by Federal Reserve electronic wire transfer in immediately available funds to an account designated by the receiving Party.  Except as otherwise expressly provided herein, Lilly Third Person Royalty Payments and Galen Third Person Royalty Payments will be non-refundable and non-creditable.  In the event the actual Net Sale of Product or Galen New Product amount cannot be determined by the date a Party's report pursuant to this Section 2.4 is due with respect to a Net Sale of Product or Galen New Product, such Party may in good faith estimate such Net Sale, with any true-up (either by credit or additional payment, as applicable) based on the actual Net Sale amount being made in the Lilly Third Person Royalty Payment or Galen Third Person Royalty Payment, as the case may be, immediately following such determination.

	Lilly Royalty Payments.  Lilly will accrue and owe a royalty to Galen equal to ten percent (10%) of Net Sales of a Galen New Product within any geographical territory outside the Territory (each an "Applicable Market") by Lilly or another Lilly Permitted Seller (the "Lilly Royalty Payment").  This Section 2.5 will be in force with respect to each Galen New Product in an Applicable Market until the later of (i) ten (10) years from the first commercial sale of such Galen New Product in such Applicable Market, (ii) the date upon which a Galen New Product Valid Claim with respect to such Galen New Product no longer exists, and (iii) the expiration of the Data Exclusivity Period with respect to such Galen New Product, if any.  Lilly will pay to Galen the Lilly Royalty Payment attributable to Net Sales of Galen New Products made during a Calendar Quarter within forty-five (45) days of the end of such Calendar Quarter, without regard to whether the Permitted Seller's customer has actually paid the Permitted Seller.  Except as otherwise provided herein, Lilly Royalty Payments will be non-refundable and non-creditable.  Within thirty (30) days of the end of such Calendar Quarter, Lilly will provide Galen with a written report detailing the Net Sales of Galen New Products made by Lilly or another Lilly Permitted Seller during the previous Calendar Quarter.  All payments to Galen pursuant to this Section 2.5 will be made by Lilly by Federal Reserve electronic wire transfer in immediately available funds on its due date to an account designated by Galen.  In the event the actual Net Sale amount cannot be determined by the date a Lilly Royalty Payment is due with respect to a Net Sale, Lilly may in good faith estimate such Net Sale, with any true up (either by credit or additional payment, as applicable) based on the actual Net Sale amount being made in the Lilly Royalty Payment immediately following such determination.  The quarterly report described above will detail any such true up described in the preceding sentence.  Notwithstanding anything to the contrary in this Agreement, Lilly will be responsible to pay to any Third Person any royalties or other consideration owed to such Third Person by Lilly or a Lilly Permitted Seller as a result of Net Sales of Galen New Products outside of the Territory; provided, however, that the Lilly Royalty Payment due to Galen will be reduced by the amount of (a) royalties or other consideration actually paid to a Third Person by Lilly, provided that such Third Person royalty or other consideration was negotiated by Galen (b) the Galen Third Person Royalty Payment with respect to royalties that Lilly is obligated to pay Galen, if any, with respect to the same Net Sale of such Galen New Product and (c) any royalty payable by Lilly under the Indevus Agreement with respect to the sale of Galen New Products made by Lilly or another Lilly Permitted Seller.  Prior to Lilly's commencing commercial sale of any Galen New Product, the Parties shall enter into an agreement, not to be inconsistent with the terms of this Agreement, setting forth operational details with respect to Galen New Products outside the Territory, including, without limitation, adverse event reporting.

	Royalty Audits.  Galen and Lilly will keep full and accurate books and records (including Net Sales of Product) relating to the performance required of it of its Lilly Royalty Payment, Galen Royalty Payment, Galen Third Person Royalty Payment and Lilly Third Person Royalty Payment, as applicable, obligations under this Agreement.  For any period in which Galen is obligated to pay a Galen Royalty Payment or Lilly Third Person Royalty Payment, plus two (2) years thereafter, Lilly will have the right, during regular business hours and upon fifteen (15) days advance notice, to have such books and records of Galen audited no more frequently than two (2) times per Calendar Year so as to verify the accuracy of the information previously reported to Lilly.  Lilly will, for purposes of such audit, utilize only the services of a nationally recognized accounting firm mutually agreed to by the Parties.  For any period in which Lilly is obligated to pay a Lilly Royalty Payment or Galen Third Person Royalty Payment, plus two (2) years thereafter, Galen will have the right, during regular business hours and upon fifteen (15) days advance notice, to have such books and records of Lilly audited no more frequently than two (2) times per Calendar Year so as to verify the accuracy of the information previously reported to Galen.  Galen will, for purposes of such audit, utilize only the services of a nationally recognized accounting firm mutually agreed to by the Parties.

An audit conducted by an auditing Party may cover the three (3) Calendar Years preceding the date of the request for such audit.  Such accountants will keep confidential any information obtained during such audit and will report to the auditing Party only their conclusions, including the amount differences in the information the audited Party reported to the auditing Party.  The cost of such audit will be borne by the auditing Party; however, in the event such audit reveals that the Lilly Royalty Payments, Galen Royalty Payments, Lilly Third Person Royalty Payments, Galen Third Person Royalty Payments or Net Sales of Product or Galen New Products previously reported to the auditing Party are inaccurate in the audited Party's favor by five percent (5%) or more, the cost of the audit will be borne by the audited Party.  Within 30 days after both Parties have received a copy of an audit report, Galen or Lilly, as applicable, will compensate the other Party for payment errors or omissions revealed by the audit.  Galen and Lilly will each include in all sublicenses granted in accordance herewith, and any other agreements enabling a Third Person to be a Permitted Seller, an audit provision substantially similar to the foregoing requiring such Permitted Seller to keep full and accurate books and records relating to sales of Galen New Products and Product thereby and granting Lilly or Galen, as applicable, the right (as described in this Section 2.6) to have a nationally recognized accounting firm audit the accuracy of the information reported by the sublicensee in connection therewith.

In addition to the foregoing, Galen will permit Indevus and/or MIT to audit Galen's books and records in accordance with the Indevus Agreement and/or MIT License Agreement in the same manner that Indevus and/or MIT has the right to audit Lilly's books and records pursuant to the Indevus Agreement and/or MIT License Agreement.

	Late Payments.  Any amounts not paid by a Party when due under this Agreement or the Manufacturing Agreement will be subject to interest from and including the date payment is due through and including the date upon which the receiving Party has collected the funds in accordance herewith at an annual rate equal to the lesser of (i) the sum of ten percent (10%) plus the prime rate of interest quoted in the Money Rates section of the Wall Street Journal, calculated daily on the basis of a 365 day year, and (ii) the maximum interest rate allowed by law.  All payment obligations described herein and in the Manufacturing Agreement and any other dollar amounts described herein and in the Manufacturing Agreement are in United States Dollars and will be paid in United States currency.

	

ASSIGNMENT AND LICENSE OF RIGHTS

	Assignment of Purchased Assets to Galen.  Subject to the terms and conditions set forth herein, on the Closing Date, Lilly agrees to assign, sell, convey, transfer and deliver to Galen, and Galen agrees to buy and accept, Lilly's entire right, title and interest in and to the Purchased Assets.  Notwithstanding the foregoing, Lilly's assignment, sale, conveyance, transfer and delivery of the Assigned Trade Dress is restricted to the use of such trade dress with the Product as a prescription pharmaceutical product (and not an over the counter pharmaceutical product) and any Galen New Product as a prescription pharmaceutical product (and not an over the counter pharmaceutical product), and neither this Section 3.1 nor any other part of this Agreement will be construed to restrict Lilly, its Affiliates or its licensees, assignees or successors from utilizing the Assigned Trade Dress in connection with any product or use other than the Product and any Galen New Product.

	Grant of License to Galen under Product Licensed Patent.  Subject to the terms and conditions set forth herein, as of the Closing Date, Lilly hereby grants to Galen, and Galen accepts, under the Product Licensed Patent, a non-exclusive sublicense, with a right to sublicense only as set forth in Section 3.6, solely to make, have made, distribute, use, sell, offer to sell, have sold, market, co-market, promote, co-promote and import the Product as a prescription pharmaceutical product (and not an over the counter pharmaceutical product) and any Galen New Product as a prescription pharmaceutical product (and not an over the counter pharmaceutical product) anywhere in the Territory; provided, however, that, notwithstanding anything in this Agreement to the contrary, Lilly makes no representation, warranty or covenant that Galen or another Galen Permitted Seller will be entitled to use the Product Licensed Patent in connection with a Galen New Product and Lilly will have no liability with respect to Galen's or a Galen Permitted Seller's use of the Product Licensed Patent in connection with a Galen New Product, except with respect to a breach of Sections 6.7, 6.16, 6.17, 6.18, 6.21, 6.25, 6.26 and 6.30 and Article 8.

	Grant of License to Galen under Product Licensed Technology.  Subject to the terms and conditions set forth herein, as of the Closing Date, Lilly hereby grants to Galen, and Galen accepts, under the Product Licensed Technology, a non-exclusive license, with a right to sublicense only as set forth in Section 3.6, solely to make and have made, distribute, use, sell, offer to sell, have sold, market, co-market, promote, co-promote and import the Product and Galen New Products in the Territory; provided, however, that, notwithstanding anything in this Agreement to the contrary, the foregoing license will not be deemed to be a representation, warranty or covenant by Lilly that Galen or another Galen Permitted Seller will be able to practice the Product Licensed Technology to make or have made any Galen New Product; provided further, however, that the foregoing license will not in any event be construed as granting to Galen use of the Product License Technology with respect to an over the counter pharmaceutical product.

	Grant of License to Galen under the sNDAs.  Subject to the terms and conditions set forth herein, as of the Closing Date, Lilly hereby grants to Galen, and Galen accepts, under the sNDAs, a non-exclusive license, with no right to sublicense, solely to distribute, use, sell, offer to sell, have sold, market, co-market, promote, co-promote and import the Product (but not to make or have made the Product) anywhere in the Territory.  Without limiting the other rights excluded from the foregoing license, the right to make or have made the Product is expressly excluded from the foregoing license.  The license granted to Galen pursuant to this Section 3.4 will terminate on the first to occur of (i) the third (3rd) year anniversary of the Closing Date, or (ii) the date that the FDA approves of an Application for Marketing Authorization authorizing Galen to make, have made, sell, have sold, market, co-market, promote and co-promote the Product in the Territory (the "sNDA License Termination Date"); provided, however, that the license granted to Galen pursuant to this Section 3.4 will be extended beyond the sNDA License Termination Date solely to distribute, use, sell, offer to sell, and have sold, market, co-market, promote, co-promote and import the Product manufactured under the Manufacturing Agreement that was not sold prior to the sNDA License Termination Date; provided further, however, that the foregoing license will not in any event be construed as granting to Galen a license under the sNDA with respect to an over the counter pharmaceutical product.

	Grant of License to Licensed Trademark and Trade Dress to Galen.

	Subject to the terms and conditions set forth herein, as of the Closing Date, Lilly hereby grants to Galen, and Galen accepts, under the Licensed Trademark and Trade Dress, a non-exclusive license, with a right to sublicense only as set forth in Section 3.6, solely to make, have made, distribute, use, sell, offer to sell, have sold, market, co-market, promote, co-promote and import the Product in the Territory; provided, however, that the foregoing will not in any event be construed as granting to Galen use of the Licensed Trademark and Trade Dress with respect to an over the counter pharmaceutical product.

	All uses by Galen of the Licensed Trademark and Trade Dress will be in an appropriate manner, without jeopardizing the significance, distinctiveness or validity of the Licensed Trademark and Trade Dress; will use the designation "R" with the Licensed Trademark and Trade Dress which are registered trademarks and trade dress; will indicate that Pulvulesâ
 and the appearance of the paraboloidal capsule are registered trademarks of Lilly in the Territory; and will only be in such form and manner as approved in writing by Lilly to the extent such form and manner differs from a past practice previously approved, or deemed to be approved in accordance with Exhibit G, by Lilly.  All trademark and trade dress rights from Galen's use of the Licensed Trademark and Trade Dress will inure to the benefit of Lilly.  Galen will not contest or challenge the validity of, or Lilly's ownership of, the Licensed Trademark and Trade Dress.

	All Product featuring any of the Licensed Trademark and Trade Dress must be manufactured, labeled, sold, distributed and advertised in accordance with all Applicable Laws, including the Specifications, cGMP and FDCA (as those terms are defined in the Manufacturing Agreement).  Once each Calendar Year, in order that Lilly can assure itself of the maintenance of the above-described quality standards, Galen will:  (i) provide to Lilly free of charge two (2) then-current production samples of each Product featuring any of the Licensed Trademark and Trade Dress (with then-current packaging) not manufactured by Lilly, and (ii) permit Lilly to inspect the manufacturing process for each Product featuring any of the Licensed Trademark and Trade Dress not manufactured by Lilly upon forty-five (45) days prior notice.

	Sublicenses.  The licenses granted herein by Lilly to Galen pursuant to Sections 3.2, 3.3 and 3.5 will not be sublicensed by Galen to any Third Person without the prior written consent of Lilly, which consent will not be unreasonably withheld, provided that (i) Galen may sublicense to any of its Affiliates without the consent of Lilly and (ii) Galen may sublicense to any Third Person in order to make or have made the Product or (except for the license granted in Section 3.5) Galen New Product for Galen without the consent of Lilly.  The license granted in Section 3.4 will not be sublicensed to any Third Person, provided that Galen may sublicense to any of its Affiliates without the consent of Lilly.  Galen will guarantee the performance of any sublicensee permitted pursuant to this Section 3.6 in a form reasonably acceptable to Lilly.  Galen will remain primarily liable for all obligations sublicensed to a Third Person or Affiliate, including without limitation, Galen Royalty Payments and Lilly Third Person Royalty Payments as a result of Net Sales of Galen New Product and Product made by a Third Person or Affiliate pursuant to a sublicense permitted pursuant to this Section 3.6.

	Grant of License to Lilly.  

	Permitted Activities.  Subject to the terms and conditions set forth herein, as of the Closing Date, Galen hereby grants to Lilly and its Affiliates, for no additional consideration, and Lilly and its Affiliates accept, a world-wide, royalty-free, irrevocable, non-exclusive license, with a right to sublicense, under the Purchased Assets solely to conduct the Permitted Activities.

	Galen New Products.  Subject to the terms and conditions set forth herein, as of the Closing Date, Galen hereby grants to Lilly, and Lilly accepts, for no additional consideration, an exclusive (even as to Galen) license under the intellectual property (including without limitation patents, trademarks (each such trademark, a "GNP Trademark"), Know-How, copyrights and other technology) and other assets used solely by Galen to manufacture, sell, market and promote Galen New Products (other than Separated Combination Products) (the "Galen New Product Assets") solely to make, have made, distribute, use, sell, offer to sell, have sold, market, co-market, promote, co-promote, import and export any such Galen New Products as a prescription pharmaceutical product (and not an over-the-counter pharmaceutical product) outside of the Territory; provided, however, that, notwithstanding anything in this Agreement to the contrary, Galen makes no representation, warranty or covenant that Lilly or a Lilly Permitted Seller will be entitled to use the Galen New Product Assets in connection with a Galen New Product and Galen will have no liability with respect to Lilly's or a Lilly Permitted Seller's use of the Galen New Product Assets in connection with a Galen New Product, except with respect to Sections 6.7, 6.17, 6.18, 6.26 and 6.30 and Article 8.  Lilly will seek and maintain at its expense such regulatory approval as is necessary to permit such manufacturing and sale.  To the extent Lilly uses any GNP Trademarks included in the Galen New Product Assets outside the Territory, Lilly will have the right, but not the obligation, to file and maintain at its expense registrations to protect such marks outside of the Territory.  All goodwill deriving from the use by Lilly of such GNP Trademark will accrue solely and exclusively to Galen.  Lilly shall use the GNP Trademark only in accordance with reasonable standards and guidelines communicated by Galen from time to time during the term of this Agreement.  Lilly agrees that its use of the GNP Trademark shall be in a commercially acceptable and responsible manner.  Galen will provide to Lilly in a timely manner all Galen New Product Assets and all other information necessary to Lilly for purposes of exercising the rights granted to Lilly under this Section 3.7(b) and shall provide assistance reasonably requested by Lilly for purposes of assisting Lilly in the exercise of the rights granted to Lilly under this Section 3.7(b).  Notwithstanding anything in this Agreement to the contrary, Lilly shall have no license to or right to license any Galen New Product that is a Separated Combination Product.  For purposes of clarity, no rights are granted to Lilly by Galen pursuant to this Section 3.7(b) in the Territory.  Lilly will have no right, title or interest in or to (i) the trademarks "WARNER CHILCOTT" or "GALEN" and any variation thereof, and any other rights in or to such names, and (ii) any Application for Marketing Authorization.  In any application for marketing authorization for a Galen New Product outside the Territory Lilly may reference any ANDA or NDA for a Galen New Product to the extent Lilly would be entitled to reference the ANDA or NDA under Applicable Laws if it had not entered into this Agreement.

	Retained Rights.  Notwithstanding anything in this Agreement to the contrary, the rights granted to Galen pursuant to this Agreement will not be deemed to preclude Lilly or its Affiliates from (i) subject to Section 3.12, making, having made, distributing, using, selling, having sold, marketing, co-marketing, promoting, co-promoting, importing or exporting fluoxetine hydrochloride (as Prozac (R) or otherwise) or any analog, derivative, improvement, or variation thereof (including Prozac (R)  Weekly (TM)), (ii) conducting the Permitted Activities, (iii) performing any of its obligations under the Indevus Agreement and MIT License Agreement, and (iv) using the name "Sarafem" or any variation thereof outside the Territory.

	Excluded Assets.  Anything herein to the contrary notwithstanding, (i) except as set forth in Section 5.1 of the Manufacturing Agreement, Galen will have no right, title or interest in or to the trademarks "ELI LILLY AND COMPANY", "LILLY", "PROZAC" or "PROZAC WEEKLY", and any variation thereof, and any other rights in or to such names, and (ii) Galen will have no right, title or interest in or to NDA 18-936 except for rights as are necessary to give effect to the license granted to Galen under the sNDAs pursuant to Section 3.4.

	Lilly Employee Health Services.  Lilly reserves the right, and the rights granted or licensed to Galen are subject to Lilly's right, to utilize all supplies of finished Product held by Lilly's employee health services on the Closing Date for purpose of dispensing Product to its employees and relatives of employees until such supply is exhausted.

	Co-Promotion.

	Lilly shall use commercially reasonable efforts to co-promote Product pursuant to the terms set forth in this Section 3.11 from the Closing Date until September 30, 2003 unless Lilly sooner terminates its obligation as permitted pursuant to this Section 3.11 (the "Co-Promotion Term").  Lilly will promote the Product in Secondary Detail position to OBGYN physicians in the Territory using its Co-Promotion Sales Force.  The performance incentive for the Co-Promotion Sales Force during the Co-Promotion Term will be weighted in Lilly's program for monetary awards for meeting sales goals at ten percent (10%).   Lilly will target the bonuses relating to the Product at 10% of the total performance incentive cash bonus compensation for the Co-Promotion Sales Force.  Galen acknowledges and agrees that Lilly has the right to utilize the Co-Promotion Sales Force to promote pharmaceuticals of its choice to physicians other than OBGYNs, and may, but will not be obligated to, co-promote the Product to those non-OBGYN physicians.  Details of Product to physicians other than OBGYNs will not be counted against the Minimum Quarterly Details (as defined below).  The Parties understand that as of the Effective Date, the Co-Promotion Sales Force promotes "Evistaâ
" and/or the Product, and no other pharmaceutical products, to OBGYNs in the Territory (the "Current OBGYN Promotion Structure").  Lilly agrees that it will continue the Current OBGYN Promotion Structure during the Co-Promotion Term.  Lilly will provide no less than 94,500 Secondary Details to OBGYNs per Calendar Quarter (the "Minimum Quarterly Details") during the Co-Promotion Term and Galen will pay Lilly a fee of $3,000,000 per Calendar Quarter for detailing the Product (the "Detail Fee"), provided that the Detail Fee and the Minimum Quarterly Details with respect to any Calendar Quarter in which Lilly terminated its obligation to co-promote hereunder will be prorated based on the number of business days Lilly co-promoted the Product in the Calendar Quarter in which such termination became effective; provided, however, that such fee does not include the costs of any promotional material or Product samples reasonably incurred by Lilly, the cost of which will be borne by Galen.  For the initial Calendar Quarter, the Minimum Quarterly Details and the Detail Fee will be reduced pro rata based on the number of business days in the initial Calendar Quarter.  Within forty-five (45) days of the end of each calendar month during the Co-Promotion Term, Lilly will deliver to Galen in writing a report containing the actual number of Secondary Details to OBGYNs reported internally to Lilly management that are performed in such calendar month, any details of Product made to physicians other than OBGYNs, and any other information as Galen may reasonably request.  Such internal reporting shall be determined in accordance with the procedures customarily employed by Lilly for the majority of its other pharmaceutical products, consistently applied.  Galen will, at Galen's sole cost, make available to Lilly, at Lilly's facilities, sufficient Product samples and promotional materials to co-promote the Product.  Lilly will be responsible, at Galen's sole cost, to deliver the sample Product and promotional materials to the Co-Promotion Sales Force.  Notwithstanding anything in this Section 3.11 to the contrary, Lilly may terminate its obligation to co-promote the Product upon no less than ninety (90) days prior written notice to Galen.  The Detail Fee for each Calendar Quarter during the Co-Promotion Term will be paid by Galen to Lilly by Federal Reserve electronic wire transfer in immediately available funds to an account designated by Lilly on or before the last day of such Calendar Quarter.  If in any Calendar Quarter during the Co-Promotion Term, Lilly has not performed the Minimum Quarterly Details in accordance with this Section 3.11, Galen may either invoice Lilly or deduct from its next Detail Fee an amount equal to the product of (x) the difference between the Minimum Quarterly Details and the Secondary Details actually performed during such Calendar Quarter and (y) $31.75.  If Galen invoices Lilly, Lilly will pay such amounts within thirty (30) days after its receipt of the invoice.  Galen's right to deduct from the subsequent Detail Fee or invoice for details as described herein and Lilly's payment thereof will be Galen's sole and exclusive remedy with respect to Lilly's failure to perform its Minimum Quarterly Details, and Galen will not be entitled to any other remedies at law or in equity with respect thereto.

	Lilly acknowledges and agrees that the Co-Promotion Sales Force are not, and are not intended to be or be treated as, employees of Galen or any of its Affiliates, and that such individuals are not, and are not intended to be, eligible to participate in any benefits programs or in any "employee benefit plans", as such term is defined in section 3(3) of ERISA, that are sponsored by Galen or any of its Affiliates or that are offered from time to time by Galen or its Affiliates to their own employees (the "Galen Benefit Plans").  All matters of compensation, benefits and other terms of employment for any such personnel shall be solely a matter between Lilly and such individual.  Lilly shall be solely responsible and liable for the payment of all compensation and benefits under any employee benefit plan sponsored by Lilly or its Affiliates to its Co-Promotion Sales Force.

	Lilly will maintain written procedures designed to ensure that its Co-Promotion Sales Force marketing the Product in the Territory comply with all requirements of Applicable Law, including without limitation, the Prescription Drug Marketing Act of 1987, as amended (as such may be subsequently modified and including any applicable implementing regulations, "PDMA") with respect to the promotion of the Product.  Lilly shall use diligent efforts to ensure that the Co-Promotion Sales Force comply with such written procedures.  Such procedures shall include a requirement that Lilly shall be responsible for reporting directly to the FDA any known thefts or significant losses of samples, as the same is required by the then applicable FDA regulation during the Co-Promotion Term, and Lilly shall promptly provide Galen with a complete copy of any such report.

	Lilly shall be solely responsible for any Damages caused by its acts and omissions and those acts or omissions of its Co-Promotion Sales Force while performing any of the co-promotion services to be provided by Lilly under this Agreement, except in each case to the extent caused by the acts or omissions of Galen, its Affiliates or Galen's or Galen's Affiliates' employees, agents or contractors, or a breach of this Agreement by Galen.

	Right to Convert Product Licensed Patent and sNDAs.  Prior to Lilly seeking another non-exclusive Third Person sublicensee under the Product Licensed Patent and/or the sNDAs or Lilly marketing or promoting fluoxetine hydrochloride for the treatment of any of the Indications in the Territory, Lilly will provide notice to Galen in writing.  Upon receipt of such notice, Galen may elect to convert its non-exclusive sublicense under the Product Licensed Patents as set forth in Section 3.2 and/or non-exclusive license under the sNDAs as set forth in Section 3.4, as applicable, to an exclusive sublicense and/or license, as applicable, by paying to Lilly the non-refundable, non-creditable sum of Ten Million United States Dollars ($US10,000,000) in immediately available funds by Federal Reserve electronic wire transfer to an account designated by Lilly within thirty (30) days of its receipt of Lilly's notice (the "Option").  In the event Galen fails to elect to exercise the Option, Lilly will be free to grant such Third Person a non-exclusive sublicense under the Product Licensed Patents and/or non-exclusive license under the sNDAs, as applicable, or to market and promote fluoxetine hydrochloride for the treatment of any of the Indications.  In addition, after the second year anniversary of the Closing Date, Galen may elect to convert the non-exclusive sublicense under the Product Licensed Patent set forth in Section 3.2 and/or non-exclusive sublicense under the sNDAs set forth in Section 3.4 to an exclusive sublicense and/or license, as applicable (the "Conversion Right") by providing Lilly with written notice and paying Lilly the non-refundable, non-creditable sum of Ten Million Dollars ($10,000,000) in immediately available funds by Federal Reserve electronic wire transfer to an account designated by Lilly.  The effective date of the conversion of the license and/or sublicense to exclusive as described herein upon exercise of the Option or of the Conversion Right will be the date of Lilly's receipt of the $10,000,000.  If Galen elects to exercise the Option or the Conversion Right, the terms of the licenses set forth in Sections 3.2 and/or 3.4, as applicable, will be unchanged in scope except for the conversion from non-exclusive to exclusive, subject to Lilly's retained rights described in this Section 3.12 and the Parties will enter into an amendment of this Agreement or other instrument to reflect such conversion.  In the event Galen exercises the Option or Conversion Right, the exclusivity of the license and/or sublicense as described herein under the Product Licensed Patent and/or sNDAs, as applicable, under this Section 3.12 will be exclusive with respect to the Product even as to Lilly, except that Lilly hereby retains the right under the Product Licensed Patent and/or sNDAs, as applicable, to conduct the Permitted Activities.

	

REPRESENTATIONS AND WARRANTIES OF LILLY

As of the Effective Date, and for purposes of Section 7.1(a) as of the Closing Date, the following representations and warranties are made by Lilly:

	Intellectual Property. Lilly represents and warrants that the Product Intellectual Property (other than the Assigned Trade Dress), Marketing Materials and the Licensed Trademark and Trade Dress (other than the Common Law Licensed Trade Dress) (collectively, the "Intellectual Property") and the Product Licensed Technology, Product Licensed Patent, Assigned Trade Dress and Common Law Licensed Trade Dress contain all the patents, Know-How, technology, trade secrets, trademarks, and trade dress necessary to conduct the Activities.  For avoidance of doubt, "Intellectual Property" does not mean or include the Product Licensed Technology, Product Licensed Patent, Assigned Trade Dress or Common Law Licensed Trade Dress.  Lilly represents and warrants that Exhibit A sets forth a true and complete list of all registered trademarks other than the United States Paraboloidal Capsule Trademark and United States Pulvules Trademark, registered service marks and registered Internet domain names (A) relating solely to the Product in the Territory (i) owned by Lilly, (ii) to Lilly's knowledge, owned by any other Person, and (B) owned by Lilly and relating solely to PMDD in the Territory.  Lilly shall use its good faith efforts to list all registered Internet domain names relating solely to the Product in the Territory; provided, however, that failure to list a registered Internet domain name shall not constitute a breach of this Agreement.

	Authority to Assign and License.  Lilly represents and warrants that:  (i) Lilly has good and valid title to the Purchased Assets (other than the Assigned Trade Dress), (ii) Lilly is the exclusive sublicensee under the Product Licensed Patent and (iii) Lilly can, and has the right to, assign or license, as applicable, the Intellectual Property, Product Licensed Technology and Product Licensed Patent to Galen without the consent of any Third Person.

	Claims Related to Use of Intellectual Property.  Except as set forth in Schedule 4.3 attached hereto, Lilly represents and warrants that there are no pending, threatened in writing (to the extent received by Lilly) or to Lilly's knowledge, claims otherwise threatened (orally or in writing) against Lilly or its Affiliates asserting that any of the Intellectual Property, Product Licensed Patent or Product Licensed Technology infringes or violates the rights of Third Persons.

	Notice to Third Persons. Except as set forth in Schedule 4.4 attached hereto, Lilly represents and warrants that Lilly has not given any notice within the two (2) years prior to the Effective Date to any Third Persons, asserting infringement by such Third Persons upon any of the Intellectual Property, the Product Licensed Patent or the Product Licensed Technology.

	Validity of Trademarks, Trade Dress and Technology.  Lilly represents and warrants that, to its knowledge, except as set forth in Schedule 4.5 attached hereto, the Product Intellectual Property (other than the Copyrights and Assigned Trade Dress), the Product Licensed Patent, the Product Licensed Technology and the Licensed Trademarks and Trade Dress (other than the Common Law Licensed Trade Dress), are valid and enforceable.  Lilly is assigning, selling, conveying, transferring and delivering the Assigned Trade Dress to Galen "AS IS", and is licensing the Common Law Licensed Trade Dress to Galen "AS IS."  Notwithstanding anything in this Agreement to the contrary, Lilly is making no representation or warranty with respect to the outcome of the Teva Litigation (as defined in the Legal Representation Agreement) or that Lilly or Galen will be successful in the Teva Litigation, and an outcome adverse to Galen or Lilly in the Teva Litigation will not be a breach of this Section 4.5 or the first sentence of Section 4.1.

	Rights Granted to Third Persons.  Except (i) as set forth in Schedule 4.6 attached hereto, (ii) for the rights granted to its Affiliates that, following the Closing Date, will not extend past the Permitted Activities, and (iii) for rights granted to its customers in the normal course of business to resell Product such customers purchased from Lilly, Lilly represents and warrants that Lilly has not executed or granted to any Third Person, directly or indirectly, or entered into any agreement for, or retained, any license or other right to develop, manufacture, market, distribute, sell or offer for sale the Product in the Territory or to import the Product into the Territory. 

	Royalty Payments to Third Persons; Indevus Agreement.  Except for the royalty payments owed to Indevus pursuant to the Indevus Agreement and MIT under the MIT License Agreement, Lilly represents and warrants that, to its knowledge, as of the Closing Date, no royalty payments are owed to any Third Persons with respect to the Product Licensed Patent and Product Licensed Technology.  Lilly represents and warrants that Lilly has furnished Galen with a true and complete copy of the Indevus Agreement and MIT License Agreement, other than the Licensed Maintenance Fees (as defined in the MIT License Agreement) which have been redacted from Article IV of the MIT License Agreement and Section 2 of the First Amendment to the MIT License Agreement.

	Maintenance. Lilly represents and warrants that, as of the Closing Date, all necessary papers and fees concerning the Product Licensed Patent, the Assigned Trademarks (which are registered as of the Closing Date and are unexpired), and the Licensed Trademarks and Trade Dress (other than the Common Law Licensed Trade Dress) have been timely paid and filed with the appropriate Governmental or Regulatory Authorities.

	sNDAs; Regulatory Matters.  Lilly represents and warrants that Lilly has furnished Galen with access to a true and complete copy of the sNDAs.  Lilly further represents and warrants that (i) Lilly has complied in all material respects with all Applicable Laws in connection with the preparation and submission to the FDA of the sNDAs, (ii) except as set forth in Schedule 4.9 attached hereto, the sNDAs have been approved by the FDA, and nothing has come to the attention of Lilly which has led Lilly to believe that the sNDAs are not in good standing with the FDA, and (iii) Lilly has filed with the FDA all required notices, supplemental applications and annual or other reports, including adverse experience reports, with respect to the sNDAs which are material to the ability of Lilly to conduct the Activities.

	Organization and Standing.  Lilly represents and warrants that Lilly is a corporation duly organized, validly existing, and in good standing under the laws of the State of Indiana.

	Power and Authority. Lilly represents and warrants that (i) Lilly has all requisite corporate power and authority to execute, deliver, and perform this Agreement and the other agreements and instruments to be executed and delivered by it pursuant hereto and thereto and to consummate the transactions contemplated herein and therein; and (ii) the execution, delivery and performance of this Agreement by Lilly does not, and the consummation of the transactions contemplated hereby will not, violate any provisions of Lilly's organizational documents, bylaws, or any Applicable Law applicable to Lilly, or any agreement, mortgage, lease, instrument, order, judgment, or decree to which Lilly is a party or by which Lilly is bound.  

	Corporate Action; Binding Effect. Lilly represents and warrants that (i) Lilly has duly and properly taken all action required by Applicable Law, its organizational documents, bylaws or otherwise, to authorize the execution, delivery, and performance of this Agreement and the other instruments to be executed and delivered by it pursuant hereto and thereto and the consummation of the transactions contemplated hereby and thereby; and (ii) this Agreement has been duly executed and delivered by Lilly and constitutes, and the other instruments contemplated hereby when duly executed and delivered by Lilly will constitute, legal, valid, and binding obligations of Lilly enforceable against it in accordance with their respective terms, except as enforcement may be affected by bankruptcy, insolvency, or other similar laws.

	Regulatory Status of Product.   Lilly represents and warrants that, to Lilly's knowledge, there have been no recalls, withdrawals, or market replacements of the Product in the Territory and, except as set forth in Schedule 4.13 attached hereto, that, to Lilly's knowledge as of the Effective Date, there exists no set of facts or circumstances that would cause Lilly to believe or suspect that a recall, withdrawal or market replacement for the Product in the Territory is pending, likely or necessary.

	Laws and Regulations.  Except as set forth in Schedule 4.14 attached hereto, Lilly represents and warrants that it has conducted all the Activities in material compliance with Applicable Laws.

	Consents and Approvals.  Lilly represents and warrants that no consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any Governmental or Regulatory Authority or any other Third Person is required in connection with the execution, delivery and performance of this Agreement, or any agreement or instrument contemplated by this Agreement, by Lilly or the performance by Lilly of its obligations contemplated hereby and thereby other than (a) the filings required of both Parties pursuant to the HSR Act, and (b) any filings reasonably requested by Galen as may be reasonably necessary to change the records of ownership in the U.S. Trademark or Copyright Office.  

	Taxes.  Lilly represents and warrants that Lilly has filed all tax returns required to be filed and paid all taxes required to be paid with respect to the Purchased Assets; and there are no liens for taxes upon the Purchased Assets.

	Brokerage. Lilly represents and warrants that no broker, finder or similar agent has been employed by or on behalf of Lilly, and no Person with which Lilly has had any dealings or communications of any kind is entitled to any brokerage commission, finder's fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby.

	Not Debarred. Lilly represents and warrants that Lilly is not debarred and has not and will not use in any capacity the services of any Person debarred under subsections 306(a) or (b) of the Generic Drug Enforcement Act of 1992.  If at any time this representation and warranty is no longer accurate, Lilly will immediately notify Galen of such fact.

	Litigation.  Except as set forth in Schedule 4.19 attached hereto, Lilly represents and warrants that there are no pending or, to Lilly's knowledge, threatened, judicial, administrative or arbitral actions, claims, suits or proceedings as of the date hereof against Lilly or its Affiliates in the Territory with respect to the Product.  Galen acknowledges that Lilly has or may have certain actions, claims, suits or proceedings pending or threatened with respect to Prozac (R), Prozac (R) Weekly (TM) or fluoxetine hydrochloride unrelated to the Product, and Galen agrees that Lilly will not be in breach of the representation and warranty set forth in this Section 4.19 or this Agreement as a result of such actions or proceedings.

	Marketing Materials.  Except as set forth in Schedule 4.20, Lilly represents and warrants that the Marketing Materials do not contain any material misstatements or omissions relating to the Product and comply with Applicable Law.

	Survival Period.  The representations and warranties contained in this Article 4 and any indemnification obligation of Lilly set forth in Article 11 associated with such representations and warranties will terminate on the two (2) year anniversary of the Closing Date.

	Statements of Net Sales and Product Contribution.  Lilly represents and warrants that the "Statements of Net Sales and Product Contribution" for the Product for the years ended December 31, 2000 and 2001 and the nine-month period ended September 30, 2002, to be delivered to Galen on the Closing Date (together with the report of Ernst & Young LLP, collectively, the "Statements of Net Sales and Product Contribution") have been derived from Lilly's books and records, which have been prepared in accordance with Lilly's accounting policies and practices applied on a consistent basis and are in accordance with GAAP.

	Material Contracts.  Lilly represents and warrants that, except for contracts or agreements that Lilly is required to maintain in full force and effect and/or are necessary for Lilly to perform its obligations under this Agreement and the Manufacturing Agreement, neither Lilly nor any of its Affiliates is a party to or bound by any (i) contract, agreement or other arrangement, the terms of which provide for financial commitments in excess of $500,000 relating solely to the Product in a Calendar Year (excluding managed care agreements) or (ii) contract, agreement or other arrangement (other than with a Governmental or Regulatory Authority) materially limiting the sale of the Product.

	Current Phase IV Clinical Trial.  Lilly represents and warrants that (i) the FDA's approval of the sNDAs was not conditioned on the outcome of the Current Phase IV Clinical Trial, and (ii) Exhibit K sets forth an accurate summary of the commitments made to the FDA under the Current Phase IV Clinical Trial.

	Trade Inventory.  Since November 1, 2002 Lilly has not sold Product to wholesalers in amounts materially exceeding amounts sold in the ordinary and usual course consistent with past practice.

	Implied Warranties.  EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 4 AND ARTICLE 6 OF THE MANUFACTURING AGREEMENT, LILLY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND LILLY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND WARRANTY OF NON-INFRINGEMENT.

	

REPRESENTATIONS AND WARRANTIES OF GALEN

As of the Effective Date, and for purposes of Section 7.2(a) as of the Closing Date, the following representations and warranties are made by Galen:

	Organization and Standing.  Galen represents and warrants that Galen is a company duly organized, validly existing, and in good standing under the laws of the Republic of Ireland.

	Power and Authority. Galen represents and warrants that (i) Galen has all requisite corporate power and authority to execute, deliver, and perform this Agreement and the other agreements and instruments to be executed and delivered by it pursuant hereto and thereto and to consummate the transactions contemplated herein and therein; (ii) the execution, delivery, and performance of this Agreement by Galen does not, and the consummation of the transactions contemplated hereby will not, violate any provisions of Galen's organizational documents, bylaws, any law or regulation applicable to Galen, or any agreement, mortgage, lease, instrument, order, judgment, or decree to which Galen is a party or by which Galen is bound.

	Corporate Action; Binding Effect. Galen represents and warrants that (i) Galen has duly and properly taken all action required by law, its organizational documents, or otherwise, to authorize the execution, delivery, and performance of this Agreement and the other instruments to be executed and delivered by it pursuant hereto and thereto and the consummation of the transactions contemplated hereby and thereby; and (ii) this Agreement has been duly executed and delivered by Galen and constitutes, and the other instruments contemplated hereby when duly executed and delivered by Galen will constitute legal, valid, and binding obligations of Galen enforceable against it in accordance with its respective terms, except as enforcement may be affected by bankruptcy, insolvency, or other similar laws.

	Governmental Approval.  Galen represents and warrants that no consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any Governmental or Regulatory Authority or any other Third Person is required in connection with the execution, delivery and performance of this Agreement, or any agreement or instrument contemplated by this Agreement, by Galen or the performance by Galen of its obligations contemplated hereby and thereby other than the filings required of both Parties pursuant to the HSR Act.

	Brokerage. Galen represents and warrants that no broker, finder or similar agent has been employed by or on behalf of Galen, and no Person with which Galen has had any dealings or communications of any kind is entitled to any brokerage commission, finder's fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby.

	Not Debarred. Galen represents and warrants that Galen is not debarred and has not and will not use in any capacity the services of any Person debarred under subsections 306(a) or (b) of the Generic Drug Enforcement Act of 1992.  If at any time this representation and warranty is no longer accurate, Galen will immediately notify Lilly of such fact.

	Litigation. Galen represents and warrants that there are no pending or, to Galen's knowledge, threatened, judicial, administrative or arbitral actions, claims, suits or proceedings as of the date hereof against Galen which, either individually or together with any other, will have a material adverse effect on the ability of Galen to perform its obligations under this Agreement or any agreement or instrument contemplated hereby.

	Applicable Laws.  Galen represents and warrants that Galen will comply with Applicable Laws relating to its making, having made, developing, distributing, marketing, co-marketing, promoting, co-promoting, selling, or having sold the Product or any Galen New Product.

	Survival Period.  The representations and warranties contained in this Article 5 and any indemnification obligation of Galen set forth in Article 11 associated with such representations and warranties will terminate on the two (2) year anniversary of the Closing Date.

	No Other or Implied Warranties.  EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 5 AND ARTICLE 7 OF THE MANUFACTURING AGREEMENT, GALEN MAKES NO OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND Galen SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND WARRANTY OF NON-INFRINGEMENT.

	

ADDITIONAL COVENANTS AND AGREEMENTS 

OF THE PARTIES

	Implementation Team.  The Parties will form a team (the "Implementation Team") to oversee the activities contemplated by this Agreement and the Manufacturing Agreement.  Each Party will appoint a team leader to serve on the Implementation Team for overall contract and relationship management and such team leader will appoint representatives from its company to the Implementation Team representing each of manufacturing, marketing/sales and regulatory.  Notwithstanding the foregoing, Lilly will not be obligated to provide more than eight hours per calendar month of regulatory support from the Implementation Team.  Either Party may change its representative(s) on the Implementation Team at any time by providing prior written notice to the other Party.  Unless otherwise agreed to by the Parties, after the Closing Date, the Implementation Team will meet (in person or by telephone or video conference) at least once each Calendar Quarter (or more or less frequently as the Parties may mutually agree) upon no less than twenty (20) days prior written notice from one Party to the other to discuss any matters arising out of a Party's performance (or non-performance) of its obligations under this Agreement. The Implementation Team will initially be responsible for creating detailed operational plans for the transition contemplated by this Agreement; provided, however that the activities contemplated by the foregoing will not take place until after the Closing Date to the extent doing so would be in violation of Applicable Law.  The detailed operational plans will include a time line and clear understanding of roles and responsibilities contemplated by this Agreement.  The Implementation Team will also have responsibility for coordinating effective communication of progress and issues that arise between the Parties.  Special meetings of the Implementation Team may be called by either Party upon no less than ten (10) days' prior written notice to the other Party, which notice must be accompanied by a written agenda of items to be discussed at such special meeting; provided that any such special meetings will not count towards the number of meetings the Parties are required to hold pursuant to this Section 6.1.  The Parties will bear their own expenses with respect to such Party's participation in the Implementation Team.  The rights and obligations of the Parties under this Section 6.1 will terminate upon the termination of the Manufacturing Agreement.  

	Governmental Filings.  Lilly and Galen each agree to prepare and file whatever filings, requests or applications are required to be filed with any Governmental or Regulatory Authority in connection with the transfer or license, as applicable, of rights in Article 3 of this Agreement and to cooperate with one another as reasonably necessary to accomplish the foregoing, including the filings required of both Parties pursuant to the HSR Act.

	Expenses. Lilly and Galen will each bear its own direct and indirect expenses incurred in connection with the negotiation and preparation of this Agreement and, except as set forth in this Agreement, the performance of its obligations contemplated hereby.

	Reasonable Efforts.  Lilly and Galen each hereby agrees to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary or proper to make effective the transactions contemplated by this Agreement, including such actions as may be reasonably necessary to obtain approvals and consents of Governmental or Regulatory Authorities and other Persons (including all applicable drug listing and notifications to the FDA identifying Galen as a distributor of the Product); provided, however, that no Party will be required to (i) pay money (other than as expressly required pursuant to this Agreement or as implicitly required in order for a Party to carry out its obligations hereunder), or (ii) assume any other material obligation not otherwise required to be assumed by this Agreement.

	Publicity.  Each Party agrees not to issue any publicity release or announcement concerning the terms of the transactions contemplated hereby and/or under the Manufacturing Agreement or, with respect to a Galen publicity release or announcement, that includes the name of Lilly with respect to such transaction, without the advance written consent of the other, which consent will not be unreasonably withheld, except to the extent that such publicity release or announcement is substantially similar to, or contains statements that are similar or consistent with the statements in, the press releases set forth in Exhibit E attached hereto.  Notwithstanding the above, on the Effective Date (or such later date as agreed to by the Parties) Galen may issue the press release set forth in Exhibit E.  Notwithstanding anything in this Section 6.5 and Article 8 to the contrary, each Party may make filings or disclosures that are required by Applicable Laws including filings or disclosures required by or to the Securities and Exchange Commission (and any other applicable securities exchanges, including without limitation, the U.K. Listing Authority) that discuss this Agreement and/or the Manufacturing Agreement; provided, however, that such Party provides the other Party with no less than three (3) business days to review and comment on such filings, or the relevant portions thereof, pertaining to the transactions contemplated hereby or by the Manufacturing Agreement, and such Party does not unreasonably reject the incorporation of such comments into such filings; provided further, however, that such Party will use commercially reasonable efforts to obtain confidential treatment by such security exchanges with respect thereto. 

	Cooperation.  If either Party becomes engaged in or participates in any investigation, claim, litigation or other proceeding with any Third Person, including without limitation the FDA, relating in any way to the manufacture, sale, marketing, promotion, co-marketing and co-promotion the Product in the Territory, the other Party will cooperate in all reasonable respects with such Party in connection therewith, including using its reasonable efforts to make available to the other such employees who may be helpful with respect to such investigation, claim, litigation or other proceeding; provided, however, that, for purposes of this provision, reasonable efforts to make available any employee will be deemed to mean providing a Party with reasonable access to any such employee at no cost for a period of time not to exceed twenty-four (24) hours (e.g., three (3) eight (8) -hour business days).  Thereafter, any such employee will be made available for such time and upon such terms and conditions (including compensation) as the Parties may mutually agree.  

	Conflicting Rights.  Neither Party will grant any right to any Third Person which would violate the terms of or conflict with the rights granted by such Party to the other Party pursuant to this Agreement.

	Conduct of Business.  From and after the date hereof and to the Closing Date, except as set forth on Schedule 6.8 or as otherwise contemplated by this Agreement, Lilly covenants and agrees that it will, or will cause its Affiliates to, conduct the sale and marketing of the Product in the Territory in the ordinary and usual course consistent with past practice, and use its commercially reasonable efforts to preserve intact the business and related relationships with customers, suppliers and other Third Persons.  Without limiting any of the foregoing, from and after the date hereof and to the Closing Date, except as set forth on Schedule 6.8 or as otherwise contemplated by this Agreement, Lilly covenants and agrees that it will not, or will cause its Affiliates not to, without the prior written consent of Galen:

	incur, create or assume any lien with respect to any of the Purchased Assets or Inventory;

	dispose of any of the Purchased Assets;

	enter into, amend any material term of or waive any material right under any material contract related to the Product, the Product Licensed Patent, the Product Licensed Technology, the Purchased Assets or Inventory other than contracts that Lilly is required to maintain in full force and effect and/or are necessary for Lilly to perform its obligations under this Agreement and the Manufacturing Agreement;

	institute any new methods of purchase, sale or operation or institute any changes in the pricing of the Product or in promotional allowances or payment terms, other than non-material methods or changes in the ordinary course of the sale, promotion and marketing of the Product consistent with past practice and changes in the pricing of the Product in the ordinary and usual course consistent with past practice;

	make any changes in the selling, pricing or advertising practices, other than non-material changes in the ordinary course of the sale and marketing of the Product consistent with past practice;

	launch any packaging changes of the Product or any line extensions of the Product;

	waive, release, grant or transfer any Intellectual Property, other than in the ordinary course of the sale and marketing of the Product;

	compromise or settle any of the litigation matters set forth on Schedule 4.19;

	other than with respect to managed care or PBM contracts that Lilly is required to maintain in full force and effect and/or are necessary for Lilly to perform its obligations under this Agreement, enter into any managed care or PBM contract including the Product, including amending or supplementing any existing managed care or PBM contract to include the Product, not renew any existing agreements including the Product that Lilly is a party to providing for the payment of rebates or modify the terms relating to the Product in any such existing agreement; 

	sell Product to wholesalers on terms inconsistent with the ordinary and usual course of business; and

	agree to take any of the foregoing actions.

	Deemed Breach of Covenant.  Neither Lilly nor Galen will be deemed to be in breach of this Agreement to the extent such Party's breach is the result of a breach of this Agreement by the other Party.

	Customer Orders.  Lilly will take such steps as may be reasonably necessary to ensure that all customer orders for Product received after the Closing Date from customers in the Territory are forwarded to Galen in writing within forty-eight (48) hours after receipt by Lilly.  As soon as reasonably practicable but no later than four (4) business days after the Closing Date, Lilly will forward a letter, the form of which is set forth in Exhibit L attached hereto, notifying all applicable Lilly customers of the change in the distribution of the Product.  Lilly agrees that any customer ordering or requesting any information with respect to the Product will be informed that Galen is now supplying the Product.

	Existing Contracts.  As of the Closing Date, Galen will fulfill all wholesaler contractual pricing offered by Lilly on Product for each Lilly wholesaler contract that includes the Product for a period of time which will, for any applicable contract, end on the earlier of (i) the expiration or termination of such contract or the effective date of the deletion of the Product from such contract, and (ii) 60 days after the Closing Date.  As of the Closing Date, Galen will fulfill all contract pricing and rebate obligations offered by Lilly on Product for each Lilly managed care contract that includes Product for a period of time which will, for any applicable contract, end ninety (90) days after the Closing Date.  Lilly will maintain such managed care contracts in effect during such 90 day period.  After the Closing Date, at Galen's request, Lilly will use commercially reasonable efforts to assist Galen in entering into contracts with managed care organizations with whom Lilly had a contract with respect to the Product as of the Closing Date to take effect ninety (90) days after the Closing Date.  Other than complying with this Section 6.11, Galen will be free in its sole and absolute discretion and without consultation with or input from Lilly, to set its prices on Product offered by Galen.

	No Assignment or Licenses Outside the United States.  Notwithstanding anything in this Agreement to the contrary, Galen acknowledges and agrees that Lilly is not assigning or licensing to Galen the rights to make, have made, distribute, use, sell, offer to sell, have sold, import, export, market, co-market, promote or co-promote the Product outside the Territory.  The rights granted to Galen in the Territory will in no way limit Lilly's rights outside of the Territory.

	Galen New Products.  No less than two times per Calendar Year, Galen will advise Lilly of the status of the development of Galen New Products, and upon written request of Lilly, will provide copies of any substantive papers related to the development of Galen New Products.  Without limiting the generality of the foregoing, Galen will, at its sole cost and expense, work diligently and will use all reasonable efforts, consistent with prudent business judgment, based upon the existing business situation, to develop the Galen New Products where in Galen's good faith opinion, such development is technically feasible and commercially justifiable, devoting the same degree of attention and diligence to such efforts that it devotes to such activities for its other products at a comparable stage in development and of comparable commercial and development potential.  In the event Galen launches a Galen New Product, Galen will use commercially reasonable best efforts to commercialize such Galen New Product consistent with comparable products.  Notwithstanding anything in this Agreement to the contrary, a breach by Galen of its obligations under this Section 6.13 will not give rise to any claim by Lilly or any of its Affiliates for damages arising out of, associated with or resulting from any such breach, and Lilly's sole recourse shall be pursuant to Section 9.2.

	Medicaid and Other Rebates. The Parties will administer and pay all rebates, chargebacks and other similar programs as follows:

	Sales of Product Under Lilly's NDC Code.  Lilly will process and be responsible for the administration and payment of all federal, state and local managed care and other rebate programs, including Medicaid/Medicare rebates, as well as chargebacks for the Product (collectively, "Rebate Programs"), in each case, related to Product sold under Lilly's NDC code, regardless of whether such Product was sold by Lilly, Galen or any of their respective Permitted Sellers; provided, however, that Galen will pay to Lilly (by Federal Reserve electronic wire transfer in immediately available funds to an account designated by Lilly) (i) within one-hundred and twenty (120) days of the Closing Date 10.7% of the gross amount invoiced by Galen or another Galen Permitted Seller during the first 90 days following the Closing Date for Product bearing Lilly's NDC Code (without regard to whether such customers have paid such invoices) and (ii) within thirty (30) days of the end of each Calendar Quarter thereafter, 5% of the gross amount invoiced by Galen or another Galen Permitted Seller during such Calendar Quarter for Product bearing Lilly's NDC Code (without regard to whether such customers have paid such invoices).  Notwithstanding anything to the contrary in the foregoing, Galen shall assume all obligations relating to Rebate Programs other than Medicare/Medicaid on the day that is 90 days after the Closing Date, provided that (i) Lilly shall be responsible for all liabilities under any agreement related to Rebate Programs which include the Product and to which Lilly is a party and Galen shall be responsible for all liabilities under any agreement related to Rebate Programs which include the Product and to which Galen is a party and (ii) pursuant to Article 10 each Party is responsible for liabilities under Rebate Programs relating to Product sold by it.  Notwithstanding anything to the contrary in the foregoing, the Parties acknowledge and agree that nothing in this Section 6.14 is intended to make money or lose money for either Party in respect of the matters covered in this Section 6.14.

	Sales of Product Under an NDC Code Other Than Lilly's.  Galen will process and be responsible for the administration and payment of all federal, state and local managed care and other rebate programs, including Medicaid/Medicare rebates, as well as chargebacks for the Product and Galen New Products, in each case, related to Product and Galen New Product that is sold by Galen in the Territory which bears an NDC Code other than Lilly's NDC Code.

	Product Returns. Galen will be responsible for all returns of Product sold on or after the Closing Date in the Territory, and Lilly will be responsible for returns of Product sold before the Closing Date.  Notwithstanding the foregoing, in the event Lilly delivers Product to Galen pursuant to the Manufacturing Agreement from lots that include Product that was sold by Lilly prior to the Closing Date (each referred to herein as a "Partial Lot"), Galen will be responsible for all returns of Product included in such Partial Lot (regardless of who sold such Product); provided, however, that if there are more than three (3) Partial Lots, Galen may choose on the Closing Date which three (3) Partial Lots it will be responsible for and Lilly will be responsible for all returns of Product included in all other Partial Lots.  Each Party will destroy Product returned to it in accordance with Applicable Laws regardless of whether or not it had the responsibility for the returned Product pursuant to this paragraph (c).  Prior to the Closing Date, Lilly will deliver to Galen a written report identifying the number of Partial Lots, identifying the make-up of each Partial Lot and the amount of each such Partial Lot sold prior to the Closing Date and other information as Galen may reasonably require.  A Party may invoice the other Party for the actual expenses incurred as a result of destroying Product for which the other Party is responsible including without limitation, fees paid to Third Persons for receiving and processing such returned Product.  Such other Party will pay such invoice within thirty (30) days of the date of invoice.  Neither Party will issue a credit to a Third Person attributable to returns for which the other Party is responsible.  Galen will be responsible for all returns of Galen New Product sold by Galen or another Galen Permitted Seller and Lilly will be responsible for all returns of Galen New Product sold by Lilly or another Lilly Permitted Seller.

	Lilly and Galen acknowledge that Lilly will be obligated to supply to the United States government certain pricing information related to Product sold by Galen under Lilly's NDC code for purposes of calculating Medicaid rebate per unit (average manufacturer price and best price) and Federal Supply Schedule Price (Annual and Quarterly non-Federal average manufacturer price and federal ceiling price) for the Product.  The Parties agree that Galen will provide such applicable pricing information related to Product sold by Galen under Lilly's NDC code to a Third Person mutually agreed upon by the Parties and such Third Person will report the applicable information to the United States government in compliance with Applicable Laws on behalf of Lilly without providing such information to Lilly.  The Parties agree to share equally the cost and expenses of the Third Person selected to provide these services.  Without limiting the foregoing, in no event will Galen provide such pricing information to Lilly.  Galen will cause the implementation of its own NDC code on the Product as soon as is reasonably practicable.  Notwithstanding the foregoing, Galen will or will cause such Third Person to provide Lilly the quarterly Medicaid rebate per unit, the quarterly 340B Ceiling Price and the annual Federal Supply Schedule Price, along with any revisions on a timely basis in compliance with Applicable Laws (but will not provide Lilly with the supporting information used in deriving the quarterly Medicaid rebate per unit, the quarterly 340B Ceiling Price and the annual Federal Supply Schedule Price).  

	Responsibility for the sNDAs.  

	Prior to the termination of the license under the sNDAs set forth in Section 3.4, Lilly will fulfill all regulatory requirements with respect to the Product that are imposed upon Lilly as the owner of the sNDAs under Applicable Law (including without limitation submitting qualifying safety reports to the FDA, preparing and submitting periodic reports and responding to regulatory inquiries) and will otherwise manage and maintain the sNDAs in a commercially reasonable manner that is consistent with Lilly's management of supplemental New Drug Applications; provided, however, that Galen will reimburse Lilly, within thirty (30) days of written request by Lilly therefor, for the amount of any and all fees paid by Lilly to the FDA in connection with the sNDAs or sale of Product from and after the Closing Date.  Galen will, on a timely basis and in compliance with Section 6.15(b), provide to Lilly all information that Galen has that Lilly does not have that is reasonably necessary and relevant to Lilly's obligations hereunder to fulfill such requirements including, but not limited to, sales distribution information concerning the Product, and will otherwise cooperate with Lilly as reasonably necessary in connection therewith.  Lilly will have the final decision-making authority in every case on whether and how to supplement, amend or otherwise alter the sNDAs and any other issues in connection with the sNDAs (including, but not limited to, decisions to recall the Product) and on whether and how to communicate with the FDA in connection therewith; provided, however, that Lilly will notify and consult with Galen in advance of any material supplement, amendment or alteration of the sNDAs which, in Lilly's reasonable judgment, may materially affect Galen's business of selling, marketing, co-marketing, promoting or co-promoting the Product in the Territory and will reasonably and in good faith consider Galen's comments to a proposed material supplement, amendment or alteration.  Galen's Application for Marketing Authorization for Product or Galen New Product will be submitted separate and apart from the sNDAs and NDA 18-936.  Galen will be responsible for all preparation and submission activities of any Application for Marketing Authorization with respect to the Product and a Galen New Product, and, as between Lilly and Galen, will own any such Application for Marketing Authorization and any regulatory approvals granted therefrom ("Galen New Product Regulatory Approvals").  Galen may reference the sNDAs (i) with respect to the Product, only to the extent reasonably necessary to obtain approval of an ANDA or an NDA for the Product, and (ii) with respect to a Galen New Product, only to the extent Galen would be entitled to reference the sNDA under Applicable Laws if it had not entered into this Agreement.

	Lilly has developed written procedures for (i) the reporting of adverse drug experiences, as set forth on Exhibit F attached hereto, (ii) the submission by Galen to Lilly and by Lilly to the FDA of labeling and Promotional Materials related to the Product as set forth in Exhibit G, (iii) the administration of and response to medical inquiries concerning the Product by consumers, physicians, pharmacists and other health care professionals as set forth in Exhibit H, and (iv) the administration and analysis of and response to complaints concerning the Product as set forth in Exhibit I.  Galen and Lilly will each comply with the provisions thereof during the term of the Manufacturing Agreement.

	Upon the termination of the Manufacturing Agreement, Galen will become and thereafter remain responsible for fulfilling all regulatory requirements with respect to the Product, and Lilly's obligations under Section 6.15(a) shall terminate when Galen shall have sold all the Product supplied to it under the Manufacturing Agreement.  Within ninety (90) days prior to the termination of the Manufacturing Agreement, the Parties will develop a written agreement setting forth procedures mutually acceptable to both Parties for reporting adverse drug experiences, administration of medical inquiries (to the extent Galen has not received approval of its Application for Marketing Authorization), submission of Promotional Materials (to the extent Galen has not received approval of its Application for Marketing Authorization), and analysis of and response to complaints after the termination of the Manufacturing Agreement with respect to Product sold during term of the Manufacturing Agreement.

	Upon the termination of the Manufacturing Agreement, each Party will provide the other Party with proposed safety-related label changes to its fluoxetine hydrochloride products and provide the other Party the reasonable opportunity to comment on proposed safety-related changes to labels.  Each Party will reasonably consider the other Party's comments in good faith.

	Galen will use its commercially reasonable best efforts to have its Application for Marketing Authorization for the Product approved by the FDA within three years from the Closing Date; provided, however, that Galen's failure to have its Application for Marketing Authorization for Product approved by the FDA within three (3) years after the Closing Date, despite using commercially reasonable best efforts, will not in any way extend the term of the license under the sNDAs set forth in Section 3.4.

	Galen will be responsible for submitting all Applications for Marketing Authority with respect to Galen New Products in the Territory and Lilly will be responsible for submitting all Applications for Marketing Authority with respect to Galen New Products outside of the Territory.  As between Lilly and Galen, Galen will own all regulatory approvals with respect to Galen New Products in the Territory ("Galen Regulatory Approvals") and Lilly will own all regulatory approvals with respect to Galen New Products outside of the Territory ("Lilly Regulatory Approvals").  Galen will be responsible for fulfilling all regulatory requirements with respect to a Galen New Product that are imposed upon Galen as the owner of the applicable Galen Regulatory Approval.  Lilly will be responsible for fulfilling all regulatory requirements with respect to a Galen New Product that are imposed upon Lilly as the owner of the applicable Lilly Regulatory Approval.  Lilly will have the authority with respect to the decision to conduct and the right to control a recall of a Galen New Product sold under a Lilly Regulatory Approval and Galen will have the authority with respect to the decision to conduct and the right to control a recall of a Galen New Product sold under a Galen Regulatory Approval; provided, however, that in either case, the recalling Party will consult with the other Party prior to initiating any such recall.

	Intellectual Property Maintenance.  Following the Closing Date, Galen will have the sole right to file, prosecute and maintain, at its sole cost and expense, (i) the Product Intellectual Property and (ii) any patent applications or patents that cover a Galen New Product(s) developed by Galen or its Affiliates.  Galen will be responsible for recording the change of ownership of the Product Intellectual Property with any Governmental or Regulatory Authorities at its cost and expense, and Lilly will provide reasonable cooperation in connection therewith upon request by Galen.  Lilly (or its designee) will be responsible for and promptly pay or cause to be paid when due all fees necessary to and will otherwise maintain the Licensed Trademark and Trade Dress (other than the Common Law Licensed Trade Dress) and Product Licensed Patent.  In the event Lilly elects to exploit any Galen New Products outside the Territory and Galen elects not to file, prosecute and maintain intellectual property rights associated with Galen New Products ("Galen New Product IP") after being requested by Lilly in writing to do so, Lilly may, but will not be obligated to, file, prosecute and maintain Galen New Product IP in Applicable Markets; provided that any such intellectual property rights relating to a Galen New Product will be the sole property of Galen.

	Enforcement of Intellectual Property Rights.  

	Right to Seek Relief. The first Party becoming aware of any infringement or suspected infringement which may come to its notice with respect to the Product Licensed Technology, the Licensed Trademarks and Trade Dress, Product Intellectual Property, Product Licensed Patent, Product Licensed Technology or the Galen New Product IP, will notify the other Party and provide the other Party with any information with respect thereto.  In the event of any past, present or future infringement by a Third Person of any intellectual property rights relating to Copyrights, Assigned Trade Dress (only as it relates to an infringement in the Territory), Assigned Trademarks or the Galen New Product IP in the Territory, Galen will have the sole right (but not the obligation) to pursue any and all injunctive relief, and any or all compensatory and other remedies and relief (collectively, "Remedies") against such Third Person; provided, however, that Galen then has standing to do so; provided further, however, that Galen's rights set forth in this sentence are subject to Indevus' right to pursue Remedies pursuant to the Indevus Agreement and MIT's right to pursue Remedies pursuant to the MIT License Agreement.

In the event of any past, present or future infringement by a Third Person in the Territory of any intellectual property related to the Product other than that described in the preceding sentences or of Galen New Product IP outside of the Territory, Lilly or its designee will have the first right (but not the obligation) to pursue any and all Remedies against such Third Person.  Should Lilly and its designee determine not to pursue Remedies with respect to any such intellectual property within thirty (30) days after notice from Galen requesting Lilly to do so, then Galen will have the right (but not the obligation) to pursue Remedies against such Third Person; provided, however, that if Galen decides to pursue Remedies, then Galen shall have the right to do so in Lilly's name; provided further, however, that Galen's rights set forth in this sentence are subject to Indevus' rights to pursue Remedies pursuant to the Indevus Agreement and MIT's rights to pursue Remedies pursuant to the MIT License Agreement.

Notwithstanding anything in this Agreement to the contrary, Lilly and Galen agree to be bound by the Legal Representation Agreement, with respect to the litigation described in Schedule 4.4 (the "Teva Litigation") and with respect to any other matter covered by such Legal Representation Agreement.

	Assistance and Cooperation.  In the event that a Party pursues Remedies hereunder, the other Party will use all reasonable efforts to assist and cooperate with the Party pursuing such Remedies.  Each Party will bear its own costs and expenses relating to such pursuit.  Any damages or other amounts collected will be distributed, first, to Indevus and/or MIT to the extent required under the Indevus Agreement and/or MIT License Agreement; second, to the Party that controlled the litigation at its conclusion, to cover its costs and expenses; third, to the other Party, to cover its costs and expenses; and to the Party controlling the litigation at its conclusion, the remainder, if any, of such damages and other amounts.

	Infringement of Third Person Rights.  In the event that a Third Person institutes a patent, trade secret, trademark or other infringement suit, or a misappropriation or unfair competition suit in the Territory during the term of this Agreement, alleging that the manufacture, marketing, sale or use of the Product or a Galen New Product infringes one or more patent, trademark or other intellectual property rights held by such Third Person or constitutes misappropriation or unfair competition, then Galen will have the first right (but not the obligation), at its sole expense, to assume direction and control of the defense of such claims regardless of whether Galen has standing.  In the event that a Third Person institutes a patent, trade secret, trademark or other infringement suit, or a misappropriation or unfair competition suit outside the Territory during the term of this Agreement, alleging that the manufacture, marketing, sale or use of the Galen New Product outside the Territory infringes one or more patent, trademark or other intellectual property rights held by such Third Person or constitutes misappropriation or unfair competition, then Lilly will have the first right (but not the obligation), at its sole expense, to assume direction and control of the defense of such claims.  Should Galen or Lilly (and its designee), as applicable, determine not to pursue the defense of a particular claim within thirty (30) days after notice from the other Party requesting Galen or Lilly, as applicable, to do so, then the other Party will have the right (but not the obligation), at its sole expense, to assume direction and control of such claims (provided it has standing to do so).  Galen will not have the right to settle or otherwise dispose of any such claim with respect to the assets licensed to Galen by Lilly or Galen New Product IP outside of the Territory without the written consent of Lilly, which consent will not be unreasonably withheld.  Galen's rights set forth in this Section 6.18 are subject to Indevus' and MIT's rights to pursue Remedies pursuant to the Indevus Agreement and MIT License Agreement.

	Sales Training.  Lilly will provide one (1) sales training session, including training materials, to Galen representatives at a time and location mutually agreed by the Parties.  The scope of the training session will be determined by Lilly in its reasonable discretion, and in no event will Lilly be obligated to provide the services of more than two trainers.  The costs and expenses related to the training session and materials will be borne by Lilly; provided, however, that Galen will bear all costs and expenses associated with travel, room and board expenses of Lilly representatives conducting the session and Galen sales representatives and other employees, agents or contractors of Galen attending the session.  Lilly shall furnish to Galen a computer disc or electronic copies of all training materials.  Galen will use all such materials solely for the purposes contemplated by, and in accordance with the terms and conditions contained in, this Agreement.  Galen understands and agrees that the training materials are for internal Galen sales training purposes only.  Galen will not use the training materials to detail the Product.  Lilly shall have no obligation to update or modify the training materials after they are provided to Galen.

	Marketing Materials.  Lilly will deliver the Marketing Materials to a location reasonably designated by Galen as soon as practicable after the Closing Date.

	No Liens.  Each of Galen and Lilly will keep the sNDAs, Product Licensed Technology, Licensed Trademark and Trade Dress, and Product Licensed Patents free from all liens and encumbrances.

	Marketing Rights.

	Lilly and its Affiliates will not, within five (5) years after the Closing Date, conduct any comparative clinical trials comparing the Product against any antidepressant.

	The Parties agree that a breach of this Section 6.22 would cause irreparable damage for which no adequate remedy at law would exist and damages would be difficult to determine and that each Party will be entitled to an injunction or injunctions to prevent breaches of this Section 6.22 and to enforce specifically the terms and provisions of this Section 6.22, in addition to any other remedy at law or equity

	Non-Solicitation.  From and after the Effective Date and until the second anniversary of the Effective Date, neither Party nor its respective Affiliates will, without the prior written approval of the other Party, directly or indirectly, solicit, encourage, entice or induce any person who is an employee of the other Party or any of its Affiliates at the date hereof or who becomes an employee of the other Party or any of its Affiliates after the date hereof, to terminate his or her employment with the other Party or any of its Affiliates or hire or employ any person who is an employee of the other Party or any of its Affiliates at the date hereof or who becomes an employee of the other Party or any of its Affiliates after the date hereof; provided that the foregoing shall not apply to persons who approach a Party or any of its Affiliates for the purposes of employment or who are hired as a result of the use of an independent employment agency where contact between such person and the independent employment agency was initiated by such person or as a result of the use of a general solicitation (such as an advertisement) not specifically directed to employees of the other Party.  If it is ever held by a court of competent jurisdiction that the restriction placed on any Party to this Agreement by this Section 6.23 is too onerous and is not necessary for the protection of the other Party or Parties hereto, each Party to this Agreement agrees that any court of competent jurisdiction may impose lesser restrictions which such court may consider to be necessary or appropriate to properly protect the other Party or Parties hereto.

	Guaranty.  Galen will cause Galen Holdings, PLC to execute a Guaranty in the form attached hereto as Exhibit J (the "Guaranty").

	Indevus Agreement and MIT License Agreement.  Assuming the accuracy of Lilly's representation and warranty contained in Section 4.7, Galen acknowledges receipt of a copy of the Indevus Agreement and MIT License Agreement and has had full opportunity to review it (other than the Licensed Maintenance Fees (as defined in the MIT License Agreement) which have been redacted from Article IV of the MIT License Agreement and Section 2 of the First Amendment to the MIT License Agreement).  Galen agrees that the rights granted to Galen pursuant to this Agreement are subject to the terms of the Indevus Agreement and MIT License Agreement.  In the event of conflict between the terms of this Agreement and/or the Manufacturing Agreement, on the one hand, and the Indevus Agreement and MIT License Agreement, on the other, the Indevus Agreement and MIT License Agreement will govern.  Galen will not act or fail to act in any way which would cause Lilly to be in breach of the Indevus Agreement.  Except to the extent caused by Galen's failure to comply with this Agreement, Lilly will perform all of its obligations under the Indevus Agreement (including without limitation making all royalty payments owed to Indevus when accrued and payable) and will not take or omit to take any action which would result in a breach of its obligations thereunder; provided, however, that the foregoing will not be construed in any way as relieving Galen from its obligation to pay to Lilly any Lilly Third Person Royalty.  In the event that Indevus is in default under the Indevus Agreement or MIT under the MIT License Agreement, Lilly shall exercise any rights it has to keep such license and agreement in full force and effect, shall promptly inform Galen of, and consult with Galen with respect to, any such default and shall take any action reasonably requested by Galen to enforce Lilly's rights with respect to such default.  To the extent that Lilly fails to take action to keep the Indevus Agreement or MIT License Agreement (to the extent it has the right to do so) in full force and effect or to pursue any remedies for a default thereunder, Galen shall have the right, but not the obligation, to take any such action at Lilly's sole cost and expense.  Lilly shall not amend, supplement, modify or replace the Indevus Agreement without the prior written consent of Galen.  Lilly will notify Galen in writing immediately upon the receipt of any notice from Indevus to the effect that Lilly has breached any of its obligations under the Indevus Agreement or that Indevus has breached any of its obligations under the MIT License Agreement. 

	Third Person Royalty Payments.  Neither Lilly nor any of its Affiliates shall enter into any contract, agreement or other commitment providing for the payment of any additional royalty payments to any Third Person with respect to the Product or a Galen New Product in the Territory without the prior written consent of Galen.  Neither Galen nor any Affiliates shall enter into any contract, agreement or other commitment providing for the payment of any additional royalty payments to any Third Person with respect to a Galen New Product outside the Territory without the prior written consent of Lilly.

	Non-Disparagement.  For a period of the ten (10) years after the Closing Date, neither Lilly nor Galen, nor their respective Affiliates, will issue, or cause to be issued, any press release or otherwise make, or cause to be made, any public statement, comment or remark with respect to the Product, this Agreement or the Manufacturing Agreement or the termination thereof which would reasonably be construed or intended to disparage, criticize or denigrate the Product, this Agreement or the Manufacturing Agreement or the termination thereof.

	No Challenge.  Lilly will not unreasonably object to, oppose or otherwise challenge any Application for Marketing Authority (inside the Territory) or portion thereof that is filed by Galen relating to the Product or any Galen New Product for any of the Indications.  Galen will not unreasonably object to, oppose or otherwise challenge any application for marketing authority (outside the Territory) or any portion thereof that is filed by Lilly relating to a Product or Galen New Product for any of the Indications.

	Post-Closing Cooperation.  

	Galen and Lilly shall cooperate with each other, and shall cause their officers, employees, agents, auditors, Affiliates and representatives to cooperate with each other, for a period of 180 days after the Closing Date for purposes of facilitating the orderly transition of the sale and distribution of the Product from Lilly to Galen and to minimize any disruption to the sale and distribution of the Product and the other respective businesses of Lilly and Galen that might result from the transactions contemplated hereby.  

	Each of the parties hereto shall from time to time after the Closing Date, without additional consideration, execute and deliver such further instruments and take such other action as may be reasonably requested by the other party to make effective the transactions contemplated by this Agreement and the Manufacturing Agreement.  With respect to all documents, information and other materials included in the Purchase Assets, in addition to paper and other tangible copies, Lilly shall, upon Galen's reasonably request, also provide to Galen electronic copies of such documents, information and other materials; provided that Lilly or any of its Affiliates or their respective agents have electronic copies thereof.

	Upon reasonable advance written notice, Lilly will provide reasonable access to and/or copies of the Non-Transferred Books and Records.

	Each Party shall reimburse the other for reasonable out-of-pocket costs and expenses incurred in assisting the other pursuant to this Section 6.29.  Neither Party shall be required by this Section 6.29 to take any action that would unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations.

	Covenant Not to Sue.  Lilly agrees that it will not assert against Galen or a Third Person manufacturer manufacturing Product or Galen New Product for Galen under theories of literal infringement, infringement under the doctrine of equivalents, inducement of or contributory infringement, or breach of contract (including this Agreement) any patent or patent application covering the manufacture of Product which is owned or licensed by Lilly for the manufacture of Product or Galen New Product by or for Galen outside of the Territory for the sole purpose of Galen distributing, using, selling, offering to sell, having sold, marketing, co-marketing, promoting and co-promoting in the Territory and importing into the Territory such Product or Galen New Product so manufactured.  Galen agrees that it will not assert against Lilly or a Third Person manufacturer manufacturing Galen New Product for Lilly under theories of literal infringement, infringement under the doctrine of equivalents, inducement of or contributory infringement, or breach of contract (including this Agreement) any patent or patent application covering the manufacture of Galen New Product which is owned or licensed by Galen for the manufacture of Galen New Product by or for Lilly inside the Territory for the sole purpose of Lilly distributing, using, selling, offering to sell, having sold, marketing, co-marketing, promoting and co-promoting outside the Territory and exporting from the Territory such Galen New Product so manufactured.

	Current Phase IV Clinical Trial.  Lilly will, at its sole cost and expense, conduct the Current Phase IV Clinical Trial.  In the event the FDA requires Phase IV clinical trials for the Product beyond the Current Phase IV Clinical Trial, Galen will, at its sole cost and expense, conduct such Phase IV clinical trials for the Product beyond the Current Phase IV Clinical Trial.  In the event the FDA proposes Phase IV clinical trials for the Product beyond the Current Phase IV Clinical Trial, Lilly will consult with Galen about such FDA proposals and will include Galen in material discussions with the FDA regarding such proposals to the extent allowed by the FDA.  In the event the FDA requires Phase IV clinical trials for the Product beyond the Current Phase IV Clinical Trial, if so requested by Galen, Lilly will use commercially reasonable efforts to acquire a waiver of such requirement from the FDA.

	No Sale for Resale.  After the Closing Date, and to the extent permitted by Applicable Law, Galen shall not, and shall not permit its Affiliates to distribute, use, sell offer to sell, have sold, market, co-market, promote, co-promote, import or export any product bearing the Sarafem (R) trademark or Galen New Product outside of the Territory; provided, that Lilly shall not, and shall not permit its Affiliates to distribute, use, sell offer to sell, have sold, market, co-market, promote, co-promote, import or export any products or Galen New Product bearing the Sarafem (R) trademark, or Galen New Product inside the Territory.  To the extent permitted by Applicable Law, Galen shall, if it becomes aware of any resale of any product bearing the Sarafem (R) trademark or Galen New Product outside of the Territory by a customer who purchased such product from Galen in the Territory, use commercially reasonable efforts to prevent further resales by such customer, including, where lawful, practical and commercially reasonable, stopping sales of such product to such customer. To the extent permitted by Applicable Law, Lilly shall, if it becomes aware of any resale of any product bearing the Sarafem (R) trademark, Product or Galen New Product in the Territory by a customer who purchased such product, Product or Galen New Product from Lilly outside of the Territory, use commercially reasonable efforts to prevent further resales by such customer, including, where lawful, practical and commercially reasonable, stopping sales of such product to such customer.

	

CONDITIONS PRECEDENT TO THE CLOSING; CLOSING DATE 

	Conditions Precedent to Galen's Obligations.  Subject to waiver as set forth in Section 12.3, all obligations of Galen to close the transactions contemplated under this Agreement are subject to the fulfillment or satisfaction of each of the following conditions precedent:

	Representations and Warranties True as of the Closing Date.  The representations and warranties of Lilly contained in this Agreement, the Manufacturing Agreement and in any schedule, certificate or document delivered by Lilly to Galen pursuant to the provisions hereof will have been true on the date hereof and will be true on the Closing Date with the same effect as though such representations and warranties were made as of the Closing Date.  

	Compliance with this Agreement.  Lilly will have performed and complied with all agreements and conditions required by this Agreement and the Manufacturing Agreement to be performed or complied with by it on or prior to the Closing Date.  

	Closing Certificate.  Galen will have received a certificate from Lilly, executed by an officer of Lilly, certifying in such detail as Galen may reasonably request that the conditions specified in Sections 7.1(a) and 7.1(b) have been fulfilled and certifying that Lilly has obtained all consents and approvals required by Section 7.1(e).

	No Threatened or Pending Litigation.  On the Closing Date, no suit, action or other proceeding, or injunction or final judgment relating thereto, will be pending against Lilly or its Affiliates before any Governmental or Regulatory Authority in which it is sought to restrain or prohibit the consummation of the transactions contemplated hereby. 

	Consents and Approvals.  The Parties will have either received notice from the Federal Trade Commission or the U.S. Department of Justice (the "Competition Authority") of early termination of the waiting period provided by the HSR Act or such waiting period will have expired with no further action required or sought by the Competition Authority on the part of the Parties; provided, however, that Galen has not caused, directly or indirectly, this condition to go unsatisfied by its actions or inactions.  

	Quality Agreement.  Lilly will have entered into the Quality Agreement. 

	Manufacturing Agreement, Litigation Agreement and Legal Representation Agreement.  Lilly will have entered into the Manufacturing Agreement, the Litigation Agreement and the Legal Representation Agreement.

	Conditions Precedent to Lilly's Obligations.  Subject to waiver as set forth in Section 12.3, all obligations of Lilly to close the transactions contemplated under this Agreement are subject to the fulfillment or satisfaction of each of the following conditions precedent:

	Representations and Warranties True as of the Closing Date.  The representations and warranties of Galen contained in this Agreement, the Manufacturing Agreement, and in any schedule, certificate or document delivered by Galen to Lilly pursuant to the provisions hereof will have been true on the date hereof and will be true on the Closing Date with the same effect as though such representations and warranties were made as of the Closing Date.  

	Compliance with this Agreement.  Galen will have performed and complied with all agreements and conditions required by this Agreement and the Manufacturing Agreement to be performed or complied with by it on or prior to the Closing Date.  

	Closing Certificate.  Lilly will have received a certificate from Galen, executed by an officer of Galen, certifying in such detail as Lilly may reasonably request that the conditions specified in Sections 7.2(a) and 7.2(b) have been fulfilled and certifying that Galen has obtained all consents and approvals required by Section 7.2(e), below.  

	No Threatened or Pending Litigation.  On the Closing Date, no suit, action or other proceeding, or injunction or final judgment relating thereto, will be threatened or be pending before any Governmental or Regulatory Authority in which it is sought to restrain or prohibit the consummation of the transactions contemplated hereby.  

	Consents and Approvals.  The Parties will have either received notice from the Competition Authority of early termination of the waiting period provided by the HSR Act or such waiting period will have expired with no further action required or sought by the Competition Authority on the part of the Parties; provided, however that Lilly has not caused, directly or indirectly, this condition to go unsatisfied by its actions or inactions.

	Quality Agreement, Manufacturing Agreement, Litigation Agreement, Legal Representation Agreement and Guaranty.  Galen will have entered into the Quality Agreement, Manufacturing Agreement, the Litigation Agreement and the Legal Representation Agreement and Galen Holdings, PLC will have entered into the Guaranty.

	Closing Date.

	Subject to Section 7.3(b), the closing of the transactions contemplated by this Agreement will take place at 10:00 a.m., Indianapolis time, on the third (3rd) Lilly business day following the day that the last condition precedent set forth in Sections 7.1 and 7.2 has been satisfied or waived by the necessary Party or on such other date as may be mutually agreed upon in writing by the Parties (the "Closing Date") at the offices of Eli Lilly and Company, Lilly Corporate Center, Indianapolis, Indiana.  Each Party hereby agrees to use its commercially reasonable best efforts to deliver the certificate described herein to the other in a timely manner, and a Party may not withhold delivery of the applicable certificate if all other conditions which are precedent to is obligations have been satisfied or waived by the other Party.  

	If the closing of the transactions contemplated hereby has not occurred on or before sixty (60) days after the Effective Date, because the conditions described in Sections 7.1 and/or 7.2, have not been satisfied or waived, then Lilly and Galen agree to discuss in good faith which substantive terms set forth in this Agreement, the Manufacturing Agreement, or any document attached hereto and thereto need to be modified as a result of the delay in such closing; provided, however, that neither Party will have an obligation to agree to such modification.  Each Party hereby agrees to use commercially reasonable best efforts to consummate the transactions contemplated herein on or before the sixtieth (60th) day after the Effective Date; provided, however, that if the Parties are unable to close the transactions contemplated hereby within one hundred twenty (120) days after the Effective Date, then any Party that is not in material default of its obligations under this Agreement (including its obligation to deliver the certificates described in Section 7.1(c) in the case of Lilly and Section 7.2(c) in the case of Galen) may terminate this Agreement upon written notice to the other and each may pursue such other remedies as are available to it at law, in equity or under this Agreement.  If neither Party is then in material default of its obligations under this Agreement upon delivery of such termination notice, then this Agreement will terminate and neither Party will have any Obligation to the other with respect to such termination.

	Deliveries at Closing.  

	Closing Deliveries by Lilly.  At the Closing, Lilly will deliver or cause to be delivered to Galen:

	a bill of sale in the form attached hereto as Exhibit D ("Bill of Sale");

	a duly executed counterpart of the Quality Agreement;

	an assignment of the Assigned Trademark and Trade Dress;

	all Transferred Books and Records; provided, however, that Transferred Books and Records will be sent to Galen to a location designated by Galen as soon as practicable after the Closing Date, but Lilly will not be in breach to the extent the Transferred Books and Records arrive at such location in any event within fourteen (14) business days of the Closing Date;

	an assignment of the Copyrights; and

	Marketing Materials; provided, however, that the Marketing Materials will be sent to Galen to a location designated by Galen as soon as practicable after the Closing Date, but Lilly will not be in breach to the extent the Marketing Materials arrive at such location within 14 business days of the Closing Date.

	Closing Deliveries by Galen.  At the Closing, Galen will deliver or cause to be delivered to Lilly:

	the Closing Date Payment; and

	a duly executed counterpart of the Quality Agreement.

	

CONFIDENTIALITY

	Confidential Information.  The Parties agree that, at all times during the term of this Agreement and for a ten (10) year period following its expiration or earlier termination, the Receiving Party will keep completely confidential, will not publish or otherwise disclose and will not use directly or indirectly for any purpose other than as contemplated by this Agreement or the Manufacturing Agreement any Confidential Information of the Disclosing Party, whether such Confidential Information was received by the Receiving Party prior to, on or after the Effective Date.

	Disclosure.  Each Party may disclose the other Party's Confidential Information to the extent that such disclosure is:

	made in response to a valid order or subpoena of a court of competent jurisdiction or other governmental body of a country or any political subdivision thereof of competent jurisdiction; provided, however, that the Receiving Party will first have given notice to the Disclosing Party and given the Disclosing Party a reasonable opportunity to quash such order or subpoena and to obtain a protective order requiring that the Confidential Information and documents that are the subject of such order or subpoena be held in confidence by such court or governmental body or, if disclosed, be used only for purposes for which the order or subpoena was issued; provided further, however, that if a disclosure order or subpoena is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court or governmental order or subpoena will be limited to that information which is legally required to be disclosed in such response to such court or governmental order or subpoena;

	otherwise as required by law, in the opinion of legal counsel to the Receiving Party, as expressed in an opinion letter in form and substance reasonably satisfactory to the Disclosing Party, which will be provided to the Disclosing Party at least twenty-four (24) hours prior to the Receiving Party's disclosure of the Confidential Information pursuant to this Section 8.2;

	made by Galen as the Receiving Party to the Governmental or Regulatory Authority as required to obtain or maintain marketing approval for the Product or a Galen New Product, provided that reasonable measure will be taken to assure confidential treatment of such information;

	made by Lilly as the Receiving Party to a Third Person as may be necessary or useful in connection with the activities of Lilly following the Closing Date within the scope of the Permitted Activities, provided that such Third Person or Third Persons agree to reasonable non-disclosure and non-use obligations with respect to such information to the extent Lilly would seek such commitments from such Third Person in the normal course of conducting the Permitted Activities;

	made by Galen as the Receiving Party to a Third Person as may be necessary or useful in connection with the activities of Galen in the manufacture or development and commercialization of the Product and Galen New Product; provided that such Third Person or Third Persons agree to reasonable non-disclosure and non-use obligations with respect to such information to the extent Galen would seek such commitments from such Third Person in the normal course of conducting its activities in the manufacture and development and commercialization of the Product or Galen New Product;

	made by the Receiving Party to a United States or foreign tax authority; or

	made by the Receiving Party to its Representatives; provided, however, that (i) the Representative has a need to know such Confidential Information for purposes of this Agreement or the Manufacturing Agreement; (ii) the Receiving Party informs its Representatives receiving Confidential Information of its confidential nature; and (iii) the Receiving Party will be responsible for any breach of this Section 8 by any of its Representatives to the same extent as if the breach were by the Receiving Party.

	Notification.  The Receiving Party will notify the Disclosing Party immediately, and cooperate with the Disclosing Party as the Disclosing Party may reasonably request, upon the Receiving Party's discovery of any loss or compromise of the Disclosing Party's Confidential Information.

	Remedies.  Each Party agrees that the unauthorized use or disclosure of any Confidential Information by the Receiving Party in violation of this Agreement or any other agreement relating to the transactions contemplated by this Agreement and the Manufacturing Agreement will cause severe and irreparable damage to the Disclosing Party.  In the event of any violation of this Article 8, the Receiving Party agrees that the Disclosing Party will be authorized and entitled to obtain from any court of competent jurisdiction injunctive relief, whether preliminary or permanent, without the necessity of proving irreparable harm or monetary damages, as well as any other relief permitted by Applicable Law.  The Receiving Party agrees to waive any requirement that the Disclosing Party post bond as a condition for obtaining any such relief.  The rights provided in the immediately preceding sentences will be cumulative and in addition to any other rights or remedies that may be available to Disclosing Party.  Nothing in this Section is intended, or should be construed, to limit a Party's right to preliminary and permanent injunctive relief or any other remedy for a breach of any other provision of this Agreement.

	

TERMINATION 

	Termination Prior to the Closing Date.  Anything herein to the contrary notwithstanding, this Agreement may be terminated as follows prior to the Closing Date:

	Termination for Insolvency.  Each Party may immediately terminate this Agreement by providing written notice to the other Party if the other Party is declared insolvent or bankrupt by a court of competent jurisdiction, or a voluntary petition of bankruptcy is filed in any court of competent jurisdiction by the other Party or an involuntary petition for relief under the United States Bankruptcy Code is filed in a court of competent jurisdiction against the other Party which is not dismissed within thirty (30) days of its filing, or the other Party makes or executes any assignment for the benefit of creditors.

	Termination for Default.  Either Party may terminate this entire Agreement because of a material breach or material default of this Agreement by the other Party as follows: The terminating Party will give the other Party prior written notice thereof, specifying in reasonable detail the alleged material breach or material default, and if such alleged material breach or material default continues unremedied for a period of thirty (30) days with respect to monetary breaches or defaults or ninety (90) days with respect to non-monetary material breaches or material defaults after the date of receipt of the notification or, if the non-monetary material breach or material default reasonably cannot be corrected or remedied within ninety (90) days, then if (i) the defaulting Party has not commenced remedying said material breach or material default within said ninety (90) days and be diligently pursuing completion of same, or (ii) said material breach or material default has not been corrected or remedied within one-hundred twenty (120) days, then such terminating Party may immediately terminate this Agreement by again providing written notification to the defaulting Party.  This Section 9.1(b) will not be exclusive and will not be in lieu of any other remedies available to a Party hereto for any breach or default hereunder on the part of the other Party.

	Either Party may terminate this Agreement upon written notice if any court of competent jurisdiction or other competent Governmental or Regulatory Authority shall have issued a decree, judgment, injunction or order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement or the Manufacturing Agreement and such decree, judgment, injunction or order or other action shall have become final and nonappealable.

	Termination or Suspension Following the Closing Date.  Following the Closing Date, this Agreement may not be suspended or terminated by either Party, except that (i) Lilly may suspend the licenses granted pursuant to Sections 3.2, 3.3, 3.4 and 3.5 utilizing the procedures set forth in Section 9.1(b) as a result of any breach by Galen in the payment of the Lilly Third Person Royalty Payment owed with respect to Net Sales of Product, a payment of an Anniversary Payment, or any other payment obligation under this Agreement or the Manufacturing Agreement until and unless Galen pays Lilly any Lilly Third Person Royalty Payment, Anniversary Payment or such other payment under this Agreement or the Manufacturing Agreement so owed, plus accrued interest as provided in Section 2.7, at which time such licenses will be automatically reinstated; provided, however, that in the event that such breach relates to a Galen New Product, this clause (i) shall apply only to such Galen New Product but not to the Product or any other Galen New Products, (ii) Lilly may suspend the license granted pursuant to Sections 3.3 utilizing the procedures set forth in Section 9.1(b) as a result of any material breach or material default by Galen of Section 6.13, above, only with respect to all Galen New Products, and (iii) Galen may suspend the license granted pursuant to Sections 3.7(b) utilizing the procedures set forth in Section 9.1(b) as a result of any breach by Lilly in the payment of Lilly Royalty Payments owed with respect to a Galen New Product only to the extent such license relates to the affected Galen New Product in the Applicable Market (but will have no such effect with respect to such Galen New Product in other Applicable Markets or any other Galen New Products) until and unless Lilly pays Galen any Lilly Royalty Payment so owed, plus owed interest as provided in Section 2.7, at which time such license will be automatically reinstated.  Except as otherwise set forth in this Section 9.2, the Parties agree that a breach of this Agreement will not entitle the non-breaching Party to terminate this Agreement or suspend any licenses granted hereunder.

	Termination of Sublicenses.  Any licenses and sublicenses granted by Galen under this Agreement with respect to the Product Licensed Technology, Product Licensed Patent, the sNDAs or License Trademark and Trade Dress will provide for immediate termination (or suspension, as the case may be) upon termination (or suspension) of the licenses or sublicense granted in Sections 3.2, 3.3, 3.4 and 3.5, as the case may be, to the same, and only to the same, extent as such termination or suspension.

	Effect of Termination; Continuing Obligations.  Termination of this Agreement for any reason will not relieve the Parties of any obligation accruing prior thereto or any antecedent breach of the provisions of this Agreement and will be without prejudice to the rights and remedies of either Party with respect to any antecedent breach of the provisions of this Agreement.  Without limiting the generality of the foregoing and in addition to the foregoing, no termination of this Agreement will serve to terminate the rights and obligations under Sections 6.5, 6.23 and Articles 1, 4 (subject to the limitation set forth in Section 4.21), 5 (subject to the limitation set forth in Section 5.9), 8, 9, 11 (subject to the limitations set forth in Sections 4.21 and 5.9) and 12 hereof and rights and obligations which otherwise expressly survive the termination of this Agreement, and Sections which are necessary to give effect to rights and obligations which expressly survive the termination of this Agreement.  Notwithstanding the termination of this Agreement or any provision contained herein, each Party will be entitled to seek any remedies available to such Party at law or in equity with respect to the Agreement or any provision contained herein so terminated.

	Non-Exclusive Remedies.  The remedies set forth in this Article 9 or elsewhere in this Agreement will be in addition to, and will not be to the exclusion of, any other remedies available to the Parties at law, in equity or under this Agreement; provided that the remedy set forth in this Article 9 are the exclusive remedies for a breach of Section 6.13.  

	

ASSUMPTION OF LIABILITIES BY GALEN

Except as otherwise provided in this Agreement, Galen hereby assumes and agrees, in each case, as of the Closing Date, to bear and be responsible for and to perform and satisfy all responsibilities, duties (including compliance with all Applicable Laws), obligations, claims, Damages, liabilities, debts, burdens and problems of any nature whatsoever (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, matured or unmatured, determinable or undeterminable and due or to become due) (collectively, the "Obligations") to the extent arising on or after the Closing Date from Galen's ownership, licensing, operation and/or use of the Product Intellectual Property, Assigned Internet Domain Names, the Marketing Materials, the Licensed Trademark and Trade Dress, the sNDAs, the Product Licensed Technology and Product Licensed Patent, as well as those Obligations associated directly or indirectly with the manufacturing (but only to the extent the Product has been manufactured by Galen or its contractor (other than Lilly)), distributing, marketing, co-marketing, promoting, co-promoting, selling, having sold, distributing or using the Product or Galen New Product on and after the Closing Date, including all recalls (subject to Section 10.2 of the Manufacturing Agreement), all warranty claims and all product liability claims (without regard to the nature of the causes of action alleged or theories of recovery asserted) arising in connection with Product or Galen New Product sold on or after the Closing Date, except for the Excluded Liabilities and those Obligations with respect to which Lilly is providing indemnification pursuant to the provisions of Section 11.1 of this Agreement, which Obligations will remain the responsibility of Lilly as set forth herein.  All of the foregoing are hereinafter collectively referred to as the "Assumed Liabilities."  

	

INDEMNIFICATION; INSURANCE

	Indemnification by Lilly.  Lilly will indemnify and hold Galen and its Affiliates harmless from and against any and all Damages incurred or suffered by Galen and its Affiliates to the extent caused by or arising out of or in connection with:

	any breach of any representation or warranty made by Lilly in this Agreement, Litigation Agreement, Legal Representation Agreement or the  Manufacturing Agreement;

	any failure to perform duly and punctually any covenant, agreement or undertaking on the part of Lilly contained in this Agreement, the Manufacturing Agreement, the Litigation Agreement or the Legal Representation Agreement;

	any Excluded Liabilities;

	Lilly's failure to comply in all material respects with Applicable Laws in connection with the performance of its obligations hereunder, in the Litigation Agreement, Legal Representation Agreement or the Manufacturing Agreement; 

	the negligence, gross negligence or willful misconduct of Lilly, its Affiliates, or its or its Affiliates' employees, agents or contractors (other than Galen); and

	the manufacture, marketing, promotion, sale or distribution of Prozac (R) by Lilly or its Affiliates.

	Indemnification by Galen.  Galen will indemnify and hold Lilly and its Affiliates harmless from and against any and all Damages incurred or suffered by Lilly and its Affiliates to the extent caused by or arising out of or in connection with:

	any breach of any representation or warranty made by Galen in this Agreement, Litigation Agreement, Legal Representation Agreement or the Manufacturing Agreement; 

	any failure to perform duly and punctually any covenant, agreement or undertaking on the part of Galen contained in this Agreement, the Manufacturing Agreement, the Litigation Agreement or the Legal Representation Agreement, except for Section 6.13 of this Agreement;

	any Assumed Liabilities;

	any Galen New Product, Galen New Product Assets or Galen New Product IP infringing or violating the patent rights or other intellectual property rights of Third Persons in the Territory; 

	the manufacturing, handling, possession, marketing, distribution, promotion, sale or use of the Product by Galen or another Galen Permitted Seller after the Closing Date including any Third Person claim alleging breach of any express or implied warranties of merchantability or fitness for a particular purpose or asserting strict liability, except to the extent such Damage is caused by Lilly Error (as defined in the Manufacturing Agreement), by a breach of this Agreement or the Manufacturing Agreement by Lilly, or is an Excluded Liability; 

	Galen's failure to comply in all material respects with Applicable Laws in connection with the performance of its obligations hereunder or under the Manufacturing Agreement or Galen's or another Permitted Seller's failure to comply with Applicable Laws relating to manufacturing, having manufactured, using, distributing, marketing, co-marketing, promoting, co-promoting, selling and having sold the Product or Galen New Products on or after the Closing Date, except to the extent that any Damages related to or arising therefrom are caused by Lilly Error or by a breach of this Agreement or the Manufacturing Agreement by Lilly; 

	the handling, possession, manufacturing, having manufactured, marketing, co-marketing, distribution, promotion, co-promotion, sale, having sold or use of any Galen New Product by Galen or any other Galen Permitted Seller, including any Third Person claim alleging breach of any express or implied warranties of merchantability or fitness for a particular purpose or asserting strict liability; and

	the negligence, gross negligence or willful misconduct of Galen, its Affiliates or its or its Affiliates' employees, agents or contractors (other than Lilly).

	Notice and Opportunity To Defend.  Promptly after receipt by a Party hereto of notice of any claim which could give rise to a right to indemnification pursuant to Section 11.1 or 11.2, such Party (the "Indemnified Party") will give the other Party (the "Indemnifying Party") written notice describing the claim in reasonable detail.  The failure of an Indemnified Party to give notice in the manner provided herein will not relieve the Indemnifying Party of its obligations under this Article 11, except to the extent that such failure to give notice materially prejudices the defense of such claim.  The Indemnifying Party will have the right, at its option, to compromise or defend, at its own expense and by its own counsel, any such matter involving the asserted liability of the Party seeking such indemnification; provided, however, that the Indemnifying Party may do so under a reservation of rights with respect to the obligation to indemnify.  If the Indemnifying Party undertakes to compromise or defend any such asserted liability, it will promptly (and in any event not more than ten (10) business days after receipt of the Indemnified Party's original notice) notify the Indemnified Party in writing of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise or defense against any such asserted liability.  All reasonable costs and expenses incurred in connection with such cooperation will be borne by the Indemnifying Party subject to the Indemnifying Party's reservation of rights.  If the Indemnifying Party (i) elects not to compromise or defend the asserted liability, (ii) fails to timely notify the Indemnified Party of its election to compromise or defend as herein provided, or, (iii) if in the reasonable opinion of the Indemnified Party, the claim could result in the Indemnified Party becoming subject to injunctive relief or relief (other than the payment of money damages) that could materially adversely affect the ongoing business of the Indemnified Party, the Indemnified Party will have the right, at its option, to pay, compromise or defend such asserted liability by its own counsel and its reasonable costs, expenses, and any payment made therewith will be included as part of the indemnification obligation of the Indemnifying Party hereunder, where such indemnification obligation exists hereunder and subject to the Indemnifying Party's reservation of rights, if any.  Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnified Party may settle or compromise any claim without consent of the other Party where such (x) settlement or compromise would impose injunctive obligations on the non-settling or non-compromising Party or (y) any Damages on the non-settling or non-compromising Party that are not subject to indemnification hereunder; provided, however, that, in the case of (y), consent to settlement or compromise will not be unreasonably withheld.  In any event, the Indemnified Party and the Indemnifying Party may participate, at their own expense (or at the Indemnifying Party's expense, in the circumstances described in (i) through (iii) of this Section 11.3 above where such indemnification obligation exists hereunder) in the defense of such asserted liability.  If the Indemnifying Party chooses to defend any claim, the Indemnified Party will make available to the Indemnifying Party any books, records or other documents within its control that are necessary or appropriate for such defense; provided, however, any such books, records or other documents within the control of the Indemnified Party which are made available to the Indemnifying Party hereunder will be held in strict confidence by the Indemnifying Party (except to the extent disclosure is reasonably necessary for the defense of such claim) and will be disclosed by the Indemnified Party to the Indemnifying Party only to the extent that such books, records or other documents relate to the claim.  

Notwithstanding anything to the contrary in this Section 11.3, (a) the Party conducting the defense of a claim will (1) keep the other Party informed on a reasonable and timely basis as to the status of the defense of such claim (but only to the extent such other Party is not participating jointly in the defense of such claim), and (2) conduct the defense of such claim in a prudent manner, and (b) to the extent the Indemnifying Party has elected to defend a claim, the Indemnifying Party will not cease to defend such claim without the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld).

	Indemnification Payment Obligation.  Notwithstanding anything in this Agreement to the contrary, an Indemnifying Party will have no obligations under subsections 11.1(a) and 11.2(a), respectively, of this Agreement and as incorporated by reference in the Manufacturing Agreement to indemnify the other Party or its Affiliates until the cumulative aggregate amount of Damages incurred or suffered by such other Party or its Affiliates which such Indemnifying Party is otherwise subject to under this Agreement and the Manufacturing Agreement exceeds One Million US Dollars (US$1,000,000) (the "Deductible Amount"), at which time such Indemnifying Party will have the obligation under subsections 11.1(a) and 11.2(a), respectively, of this Agreement and as incorporated by reference in the Manufacturing Agreement to indemnify the other Party or its Affiliates only for Damages in excess of the Deductible Amount. 

	Indemnification Payment Adjustments.  The amount of any Damages for which indemnification is provided under this Article 11 will be reduced by the insurance proceeds received and any other amount recovered, if any, by the Indemnified Party with respect to any Damages; provided, however, that the foregoing will not under any circumstances reduce the Damages for which either Party is obligated to indemnify the other to the extent the insurance proceeds received result from a self-insurance program; provided further, however, that an Indemnified Party will not be subject to an obligation to pursue an insurance claim relating to any Damages for which indemnification is sought hereunder.  To the extent the preceding sentence is applicable, if any Indemnified Party receives any payment pursuant to this Article 11 with respect to any Damages and subsequently receives insurance proceeds or other amounts with respect to such Damages, then such Indemnified Party will pay to the Indemnifying Party an amount equal to the difference (if any) between (a) the sum of the amount of those insurance proceeds or other amounts received and the amount of the payment by such Indemnifying Party pursuant to this Article 11 with respect to such Damages and (b) the amount necessary to fully and completely indemnify and hold harmless such Indemnified Party from and against such Damages; provided, however, that in no event will such Indemnified Party have any obligation pursuant to this sentence to pay to such Indemnifying Party an amount greater than the amount of the payment by such Indemnifying Party pursuant to this Article 11 with respect to such Damages.  

	Indemnification Payment.  Upon the final determination of liability and the amount of the indemnification payment under this Article 11, the Indemnifying Party will pay to the Indemnified Party, within ten (10) business days after such determination, the amount of any claim for indemnification made hereunder.  

	Limitation of Liability.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY NOR ITS AFFILIATES WILL BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL (INCLUDING LOST PROFITS) OR PUNITIVE DAMAGES, HOWEVER CAUSED OR UPON ANY THEORY OF LIABILITY (INCLUDING SUCH  PARTY'S OR ITS AFFILIATES' OWN NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PARTY'S OR SUCH PARTY'S AFFILIATES' EMPLOYEES, AGENTS OR CONTRACTORS).

	Insurance.  Galen will maintain at its own expense, with a reputable insurance carrier reasonably acceptable to Lilly or will self-insure, full insurance coverage for Galen, written on a per occurrence basis, including errors and omissions insurance encompassing claims relating to Galen's performance of its obligations under this Agreement and the Manufacturing Agreement and comprehensive general liability insurance for claims for damages arising from bodily injury (including death) and property damages arising out of acts or omissions of Galen, which will be specifically endorsed to cover Galen's indemnification obligations under this Article 11.  Galen will name Lilly as an additional insured on such insurance.  Minimum limits of such insurance (not warranted to be necessarily sufficient for the purposes of Galen's obligation under this Agreement or the Manufacturing Agreement) will be twenty million US Dollars (US$20,000,000) coverage.  Maintenance of such insurance coverage will not relieve Galen of any responsibility under this Agreement or the Manufacturing Agreement for damage in excess of insurance limits or otherwise. Galen will provide Lilly with a certificate from the insurer(s), or evidence of self-insurance reasonably acceptable to Lilly, evidencing such insurance coverage and the insurer's agreement to notify Lilly at least sixty (60) days in advance of any cancellation or modification of such insurance.  

	Survival.  Each Indemnified Party's rights under Article 11 will not be deemed to have been waived or otherwise affected by such Indemnified Party's waiver of the breach of any representation, warranty, agreement or covenant contained in or made pursuant this Agreement or the Manufacturing Agreement, unless such waiver expressly and in writing also waives any or all of the Indemnified Party's right under Article 11.  

	

MISCELLANEOUS

	Successors and Assigns.  This Agreement will be binding upon and will inure to the benefit of the Parties hereto and their respective successors and assigns.  Neither Lilly nor Galen may assign this Agreement without the prior written consent of the other, which consent may not be unreasonably withheld or delayed; provided, however, that (i) Lilly will have the right without the consent of Galen to assign Lilly's right to receive the Royalty Payments and Lilly Third Person Royalty Payments to a Third Person, and (ii) either Party may assign its rights and obligations under this Agreement to any of its Affiliates, without the consent of the other Party.  No assignment of this Agreement or of any rights hereunder will relieve the assigning Party from being primarily liable for any of the obligations or liabilities hereunder it would have had if it had not assigned this Agreement. 

	Notices.  Unless otherwise stated in this Agreement as to the method of delivery, all notices or other communications required or permitted to be given hereunder will be in writing and will be deemed to have been duly given if delivered by hand, same-day courier, facsimile or if mailed first class, postage prepaid, by registered or certified mail, return receipt requested (such notices will be deemed to have been given on the date delivered in the case of hand delivery or delivery by same-day courier, on the date set forth in the confirmation sheet in the case of facsimile delivery, and on the fifth business day following the date of post mark in the case of delivery by mail) as follows:

If to Lilly, as follows:

Eli Lilly and Company 

Lilly Corporate Center 

Indianapolis, Indiana 46285 

Facsimile: (317) 276-2356

Attn: President, U.S. Affiliate

With a copy to:

Eli Lilly and Company

Lilly Corporate Center

Indianapolis, Indiana 46285

Facsimile:  (317) 433-3000

Attn:  General Counsel

If to Galen, as follows:

Galen (Chemicals) Limited

4 Adelaide Street

Dun Laoghaire, Co. Dublin

Ireland

Facsimile: 011 353 1 214 8474

Attn: Senior Vice President, Finance

With a copy to:

Galen Holdings PLC

100 Enterprise Drive

Rockaway, NJ  07866

Facsimile: (973) 442-3316

Attn: Senior Vice President, Corporate Development

and General Counsel

or to such other address or addresses as hereafter will be furnished in a written notice as provided in this Section 12.2 by any Party hereto to the other Party.

	Waiver.  Any term or provision of this Agreement may be waived at any time by the Party entitled to the benefit thereof only by a written instrument executed by such Party.  No delay on the part of Lilly or Galen in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of either Lilly or Galen of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

	Entire Agreement.  This Agreement, the Manufacturing Agreement, the Legal Representation Agreement and the Litigation Agreement and all appendices, exhibits and schedules attached hereto and thereto and all documents and certificates contemplated or delivered in connection herewith and therewith constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements or understandings of the Parties relating hereto and thereto.

	 Amendment.  This Agreement may be modified or amended only by written agreement of the Parties hereto signed by authorized representatives of the Parties.

	Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original but all of which together will constitute a single instrument.

	Governing Law.  This Agreement will be governed and construed in accordance with the laws of the State of New York excluding any choice of law rules that may direct the application of the law of another state.

	Captions.  All section titles or captions contained in this Agreement and in any exhibit, schedule or certificate referred to herein or annexed to this Agreement are for convenience only, will not be deemed a part of this Agreement and will not affect the meaning or interpretation of this Agreement.

	No Third-Person Rights.  Except as provided herein, no provision of this Agreement will be deemed or construed in any way to result in the creation of any rights or obligation in any Person not a Party to this Agreement.

	Appendices, Exhibits, Schedules and Certificates.  Each appendix, exhibit, schedule and certificate attached hereto is incorporated herein by reference and made a part of this Agreement.

	No Joint Venture.  Nothing contained herein will be deemed to create any joint venture or partnership between the Parties hereto, and, except as is expressly set forth herein, neither Party will have any right by virtue of this Agreement to bind the other Party in any manner whatsoever.

	Severability.  If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective while this Agreement remains in effect, the legality, validity and enforceability of the remaining provisions will not be affected thereby.  In the event a part or provisions of this Agreement is held to be illegal, invalid or unenforceable, the Parties agree to negotiate in good faith an amendment of such part or provision in a manner consistent with the intent of the Parties. 

	Construction.  This Agreement will be deemed to have been drafted by both Lilly and Galen and will not be construed more strictly against either Party as the draftsperson hereof.  Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless business days are specified.  

Force Majeure.  If either Party is prevented from complying, either totally or in part, with any of the terms or provisions set forth herein by reason of force majeure, including, by way of example and not of limitation, fire, flood, explosion, storm, strike, lockout or other labor dispute, riot, war, rebellion, accidents, acts of God, acts of governmental agencies or instrumentalities, or any other similar or dissimilar cause, in each case to the extent beyond its reasonable control, said Party will provide written notice of same to the other Party.  Said notice will be provided within five (5) business days of the occurrence of such event and will identify the requirements of this Agreement or such of its obligations as may be affected, and, to the extent so affected, said obligations will be suspended during the period of such disability. The Party prevented from performing hereunder will use commercially reasonable best efforts to remove such disability as promptly as possible and will continue performance whenever such causes are removed.  The Party so affected will give to the other Party a good faith estimate of the continuing effect of the force majeure condition and the duration of the affected Party's nonperformance.IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
ELI LILLY AND COMPANY

By: /s/ John C. Lechleiter

Printed Name: John C. Lechleiter

Title: Executive Vice President Pharmaceutical Products and Corporate Development

GALEN (CHEMICALS) LIMITED

By: /s/ Roger M. Boissonneault

Printed Name: Roger M. Boissonneault

Title: Director

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