Document:

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                                                                  Exhibit 4.5(b)

                                                                  CONFORMED COPY

                              ELAN CORPORATION PLC

                            ELAN PHARMACEUTICALS, INC

                               ELAN PHARMA LIMITED

                                       AND

                          VERNALIS DEVELOPMENT LIMITED

            ________________________________________________________

                         TRANSITIONAL SERVICES AGREEMENT

            ________________________________________________________

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                                    CONTENTS

CLAUSE                                                                      PAGE
------                                                                      ----

1.     Interpretation.......................................................  1

2.     Responsibilities of the Parties......................................  2

3.     Transitional Services Managers.......................................  4

4.     Term and Termination.................................................  4

5.     Records..............................................................  6

6.     Disclaimer and Limitation of Liability...............................  6

7.     Miscellaneous........................................................  6

8.     Whole Agreement......................................................  9

Schedule 1    SERVICES...................................................... 11

Schedule 2    TRANSITIONAL SERVICE MANAGERS................................. 14
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THIS AGREEMENT is made on 18th May 2004

BETWEEN:

(1)    ELAN CORPORATION PLC, a company incorporated in Ireland (registered no.
       30356), whose registered office is at Lincoln House, Lincoln Place,
       Dublin 2, Ireland ("ELAN CORP");

(2)    ELAN PHARMACEUTICALS, INC., a company incorporated in the State of
       Delaware, whose principal office is at 800 Gateway Boulevard, South San
       Francisco, CA 94080, USA ("EPI");

(3)    ELAN PHARMA LIMITED, a company incorporated in Ireland (registered no.
       100382), whose registered office is at Monksland, Athlone, County
       Westmeath, Ireland ("EPL"); and

(4)     VERNALIS DEVELOPMENT LIMITED, a company incorporated in England and
        Wales (registered no. 2600483), whose registered office is at Oakdene
        Court, 613 Reading Road, Winnersh, Wokingham, Berkshire RG41 5UA
        ("VDL").

WHEREAS:

(A)    On 29 March 2004, Elan Corp, Elan Pharma International Limited, EPI, VDL
       and Vernalis plc entered into a sale and purchase agreement (the "SALE
       AND PURCHASE AGREEMENT") under which:

       (i)    the Licence Agreement and the Development Agreement were
              terminated; and

       (ii)   the Sellers agreed to sell the Assets to VDL,

       (the "TRANSACTION").

(B)    EPI and EPL (together the "ELAN COMPANIES") have agreed to provide
       certain services to VDL for a transitional period after completion of the
       termination and sale under the Sale and Purchase Agreement.

(C)    Elan Corp is a party to this Agreement for the purposes of Clause 2.10.

(D)    This Agreement sets out the terms on which such services will be
       provided.

THE PARTIES AGREE, in consideration of the mutual covenants and agreements set
out in this Agreement, as follows:

1.     INTERPRETATION

1.1    Capitalised terms and expressions used in this Agreement shall have the
       same meaning as in the Sale and Purchase Agreement, unless otherwise
       defined in this Agreement.

1.2    In this Agreement:

       "SERVICE" and "SERVICES" have the meanings given to them in Clause 2.1;

       "TERM" has the meaning given to it in Clause 4.1;and

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       "TUPE" means the Transfer of Undertakings (Protection of Employment)
       Regulations 1981.

1.3    In this Agreement, a reference to a "CLAUSE" or "SCHEDULE", unless the
       context otherwise requires is a reference to a clause or schedule of this
       Agreement.

1.4    The headings in this Agreement do not affect its interpretation.

1.5    The schedules to this Agreement form part of it.

2.     RESPONSIBILITIES OF THE PARTIES

2.1    Subject to the terms and conditions of this Agreement, during the
       applicable Term, the Elan Companies shall provide (or cause to be
       provided) the services described in Schedule 1 (collectively, the
       "SERVICES" and each a "SERVICE") to VDL. No fee shall be payable by VDL
       for the Services during the first six months after Completion, save for
       any recall of Product which is payable at the overhead FTE rate incurred
       in dealing with such recall (such amounts to be invoiced monthly in
       arrears and (subject to Clause 2.9) paid within 30 days of invoice).

2.2    The Services shall be provided to at least the same level and degree of
       quality as is consistent with past practices of the Elan Companies in
       furnishing comparable services to their own internal organisation.

2.3    The Elan Companies will be solely responsible for selecting and assigning
       personnel to perform the Services, and will instruct such personnel to
       perform the Services in a timely, efficient and competent manner. VDL
       will have the right to request that the Elan Companies replace personnel
       who do not perform the Services properly and in accordance with
       reasonable technical or general work standards or in accordance with
       Clause 2.4 or otherwise to the reasonable satisfaction of VDL.

2.4    Notwithstanding any other provision of this Agreement, it is agreed that
       the Elan Companies are not in the business of providing the Services and
       that the standards of care and skill to which the Elan Companies and any
       employee or agent of the Elan Companies performing the Services shall be
       accountable shall be the standards of care and skill used by the Elan
       Companies in furnishing comparable services to their own internal
       organisation consistent with past practices; provided that such level of
       care shall be at least that of a reasonably careful person under the
       circumstances. Under no circumstances will VDL hold the Elan Companies or
       their employees or agents accountable to a greater standard of care than
       one that is appropriate for a party in the business of furnishing similar
       services to a third party.

2.5    VDL acknowledges that the Services are intended only to be transitional
       in nature, and are furnished by the Elan Companies solely for the purpose
       of accommodating VDL in connection with the transactions contemplated by
       the Sale and Purchase Agreement. VDL acknowledges that the Elan Companies
       are not in the business of providing the Services and have no long-term
       interest in continuing this Agreement.

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2.6    In providing the Services, the Elan Companies will not be obligated to:

       2.6.1  hire any additional employees;

       2.6.2  maintain the employment of any specific employee; or

       2.6.3  purchase, lease or license any additional equipment or software.

2.7    No provision of the Services by the Elan Companies or by any employee of
       the Elan Companies shall require any such employee or other person to
       become or be deemed to have become an employee of VDL and all of the
       employees involved in carrying out the Services shall remain the
       employees of the Elan Companies for the duration of this Agreement and
       on its expiry. The Elan Companies agree to use their best endeavours to
       ensure that no employee or former employee of the Elan Companies or any
       liability in respect of such person transfers pursuant to TUPE to VDL on
       termination of this Agreement or the cessation of all or any of the
       Services pursuant to TUPE and, in the event that such a transfer of any
       such employee or former employee or liability does occur pursuant to
       TUPE, the Elan Companies will indemnify VDL in relation to all
       liabilities arising from the same.

2.8    VDL shall reimburse each Elan Company for any amount which such Elan
       Company pays to any third party in performing the Services (any such
       amount to be invoiced to VDL and (subject to Clause 2.9) paid within 30
       days of invoice). The Elan Companies shall consult with VDL prior to
       incurring or paying (as appropriate) amounts greater than $10,000 to any
       third party.

2.9    On a monthly basis during the Term, the Elan Companies shall pay to VDL:

       2.9.1  the sum of:

              (a)    all amounts received on behalf of VDL in relation to supply
                     of the Product; and

              (b)    all amounts for which VDL is entitled to invoice EPI
                     pursuant to Schedule 8 of the Sale and Purchase Agreement;
                     less

       2.9.2  the sum of:

              (a)    all amounts for which an Elan Company is entitled to
                     invoice VDL pursuant to Clauses 2.1, 2.8 and 4.1 of this
                     Agreement; and

              (b)    all amounts for which EPI is entitled to invoice VDL
                     pursuant to Schedule 8 of the Sale and Purchase Agreement.

2.10   Elan Corp undertakes to procure the due performance of the obligations
       under this Agreement of each Elan Company and any person to whom an
       assignment or sub-contracting or delegation is made pursuant to Clauses
       7.4 and 7.5.

2.11   Within one week following Completion, EPI shall despatch a letter to
       each addressee of the Customer Information Letter and the Physician
       Information Letter informing them

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       that Completion has taken place and advising them of the transitional
       arrangements such letters to be in a form agreed with VDL.

3.     TRANSITIONAL SERVICES MANAGERS

3.1    The Elan Companies and VDL each undertake to appoint a transitional
       services manager for the duration of this Agreement (the "TRANSITIONAL
       SERVICES MANAGERS"). Schedule 2 sets forth the names for the initial
       Transitional Services Managers.

3.2    The Transitional Services Managers shall be the authorised
       representatives of the Elan Companies and VDL respectively and empowered
       to act on their behalf in connection with the Services. The Elan
       Companies and VDL may change their respective Transitional Services
       Manager from time to time in circumstances where there is a legitimate
       business reason to do so by giving written notice to the other.

3.3    The Transitional Services Managers shall ensure that at all times during
       the period of this Agreement there is appointed a representative of the
       Elan Companies and VDL (as the case may be) in respect of each of the
       Services (the "SERVICE REPRESENTATIVES"). The name and contact details
       of each Service Representative shall be notified to each Transitional
       Services Manager. The Transitional Services Managers may change their
       respective Service Representatives from time to time in circumstances
       where there is a legitimate business reason to do so by giving written
       notice to the other Transitional Services Manager.

3.4    The Transitional Services Managers shall have day to day responsibility
       for the provision and use of the Services and for ensuring the smooth
       and efficient operation of this Agreement. The Transitional Services
       Managers will meet within two weeks from the date of this Agreement to
       agree the operational framework pursuant to which the Services will be
       provided.

3.5    The Services Representatives shall have day to day responsibility for
       the provision and use of the relevant Service and each Service
       Representative shall report to their Transitional Services Manager in
       respect of such Service.

3.6    The Transitional Services Managers shall use all reasonable efforts to
       resolve in an amicable and co-operative manner issues which are raised
       in relation to the provision of the Services.

3.7    Either of the Transitional Services Managers may propose any change to
       the scope of the Services by written notice to the other specifying the
       proposed change in reasonable detail. Each party shall act in good faith
       in relation to any such proposal but the Elan Companies shall not be
       obliged to change the scope of or add to a Service.

4.     TERM AND TERMINATION

4.1    This Agreement shall commence on the date of this Agreement and:

       4.1.1  each Service set out in Part A of Schedule 1 shall be provided for
              a six-month period; and

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       4.1.2  each Service set out in Part B of Schedule 1 shall be provided for
              a 12-month period,

       in each case unless earlier terminated pursuant to Clauses 4.2 or 4.3
       (from the date hereof until each such time, an applicable "TERM"). At
       VDL's request, any of the Services to be provided for a period of six
       months will be extended for another period of up to six months. From the
       date which is six months following Completion, VDL shall pay the Elan
       Companies for any Services (including, for the avoidance of doubt, those
       referred to in Clause 4.1.2) which are provided after such date at the
       overhead FTE rate incurred in providing such Service (such amounts to be
       invoiced monthly in arrears and (subject to Clause 2.9) paid within 30
       days of invoice).

4.2    This Agreement, or any Service, may be terminated by VDL upon written
       notice to EPI at any time.

4.3    This Agreement, or any Service, may be terminated by either EPI or EPL
       upon written notice to VDL (an "ELAN TERMINATION NOTICE") at any time
       if:

       4.3.1  VDL fails to perform or otherwise breaches a material obligation
              under this Agreement; provided, however, that VDL shall have 30
              days from the date of receipt of an Elan Termination Notice to
              cure such failure or breach, following which time this Agreement
              or the relevant Service shall terminate if such failure or breach
              has not been cured;

       4.3.2  VDL passes a resolution for its winding up or a court of competent
              jurisdiction makes an order for VDL's winding up or dissolution;

       4.3.3  the appointment of an administrator of VDL or a receiver appointed
              over, or an encumbrancer takes possession of or sells, an asset of
              VDL;

       4.3.4  VDL makes an arrangement or composition with its creditors
              generally or makes an application to a court of competent
              jurisdiction for protection from its creditors generally; or

       4.3.5  performance of this Agreement or any Service has been rendered
              impossible for a period of three consecutive months by reason of
              the occurrence of any of the events described in Clause 7.3
              without prejudice to the Elan Companies' obligations under Clause
              7.3.

4.4    Upon expiration or other termination of this Agreement or any Service
       for any reason in accordance with the terms of this Agreement, the
       parties shall cooperate in the orderly termination of the Services and
       the Elan Companies shall provide such assistance as VDL may reasonably
       request (at the expense of VDL to the extent that any such assistance is
       outside the scope of the Services) to assist with the transfer of the
       provision of any of the Services to VDL (or to its nominee).

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5.     RECORDS

5.1    The Elan Companies shall keep, in accordance with its normal business
       practice and record keeping policies, complete and adequate records and
       accounts relating to the Services (the "SERVICE Records").

5.2    The Elan Companies shall allow VDL, its employees and agents and any
       other person authorised by VDL (subject to the provisions of Clause 5.3
       of this Agreement and clause 20 of the Sale and Purchase Agreement):

       5.2.1  on reasonable notice to inspect (at all reasonable times during
              usual business hours) such of the Service Records as it may
              reasonably request in connection with the Services (which, for the
              avoidance of doubt, shall not include any tax records); and

       5.2.2  at VDL's cost, to take copies of any of those Service Records.

5.3    The Elan Companies shall maintain all Service Records for a period of
       ten years after Completion. Thereafter, EPI shall give VDL 90 days'
       written notice of any intention to dispose of any Service Records. VDL
       may elect to remove, at its cost, during such 90 day period, such of the
       Service Records as it may reasonably require in connection with the
       Services (which, for the avoidance of doubt, shall not include any tax
       records).

6.     DISCLAIMER AND LIMITATION OF LIABILITY

6.1    Except as expressly set forth in the Sale and Purchase Agreement,
       neither EPI nor EPL makes any representations or warranties whatsoever,
       express or implied, including, without limitation, the implied
       warranties of merchantability or fitness for a particular purpose.

6.2    Except with respect to the negligence or wilful misconduct of an Elan
       Group Undertaking or its employees, agents or contractors (for which
       their total liability shall not exceed $1,000,000), neither EPI nor EPL
       nor VDL will, under any circumstances, be liable to each other for any
       damages resulting or arising from this Agreement, any performance or
       non-performance under this agreement or the termination of this
       Agreement.

6.3    No Elan Group Undertaking, nor any of their employees, agents or
       contractors shall be entitled to claim for any punitive, indirect or
       consequential loss (including loss of profit) in respect of any claim
       under this Agreement.

6.4    Nothing in this Agreement shall operate to exclude or restrict any
       party's liability for death or personal injury resulting from negligence
       or for fraud.

7.     MISCELLANEOUS

7.1    Except as otherwise specifically provided herein, any notice or other
       documents to be given under this Agreement shall be in writing and shall
       be deemed to have been duly given if sent in accordance with clause 28
       of the Sale and Purchase Agreement and, in the case of EPL, as if it
       were listed in clause 28.3.1 of the Sale and Purchase Agreement.

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7.2    This Agreement shall not be amended, modified, varied or supplemented
       except in writing signed by duly authorised representatives of each of
       the parties.

7.3    If any party is prevented or delayed in the performance of any of its
       obligations under this Agreement by Force Majeure, it shall as soon as
       reasonably practicable give written notice thereof to the other parties
       specifying the matters constituting Force Majeure together with such
       evidence as it reasonably can give and specifying the period for which
       it is estimated that such prevention or delay will continue. Provided
       that the party shall use reasonable endeavours to limit the effect of
       such event on the other party, the party shall be excused from the
       performance or the punctual performance of such obligations as the case
       may be from the date of such notice for so long as such cause of
       prevention or delay shall continue. In this Clause 7.3, "FORCE MAJEURE"
       shall be deemed to include any cause materially and substantially
       affecting the performance by any party of this Agreement arising from or
       attributable to acts, events, non-happenings, omissions or accidents
       beyond the reasonable control of the party whose performance is so
       affected.

7.4    No party hereto shall be entitled to assign its rights and obligations
       hereunder without the prior written consent of the other parties, which
       consent shall not be unreasonably withheld or delayed; provided,
       however, that:

       7.4.1  each of EPI and EPL shall be entitled, without the prior written
              consent of the other parties, to assign its rights and obligations
              under this Agreement to an Elan Group Undertaking, but such
              assignment to an Elan Group Undertaking shall not relieve the
              assignor of its obligations under this Agreement and shall be
              expressed to have effect only for so long as the assignee remains
              an Elan Group Undertaking and that immediately before ceasing to
              be an Elan Group Undertaking the assignee shall assign the rights
              and obligations under this Agreement to another Elan Group
              Undertaking;

       7.4.2  VDL shall be entitled, without the prior written consent of the
              other parties, to assign its rights and obligations under this
              Agreement to a Vernalis Group Undertaking, but such assignment to
              a Vernalis Group Undertaking shall not relieve the assignor of its
              obligations under this Agreement and shall be expressed to have
              effect only for so long as the assignee remains a Vernalis Group
              Undertaking and that immediately before ceasing to be a Vernalis
              Group Undertaking the assignee shall assign the rights and
              obligations under this Agreement to another Vernalis Group
              Undertaking; and

       7.4.3  VDL shall be entitled to assign the benefit of this Agreement in
              relation to any financing arrangement into which it enters.

       No permitted assignment hereunder, other than an assignment by VDL to a
       financier, shall be deemed effective until the assignee has executed and
       delivered an instrument in writing, reasonably satisfactory in form and
       substance to the other parties, pursuant to which the assignee assumes
       all of the obligations of the assignor under this Agreement. Any
       purported assignment of this Agreement in violation of this Clause 7.4
       shall be void. This Agreement shall be binding upon the successors and
       permitted assigns of the parties hereto and the name of a party hereto
       shall be deemed to include the names of its successors and assigns.

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7.5    The Elan Companies may sub-contract with or delegate to any Elan Group
       Undertaking for so long as such undertaking remains an Elan Group
       Undertaking any of their obligations under this Agreement provided that
       any such sub-contracting or delegation shall not relieve the relevant
       Elan Company of its obligations under this Agreement. The Elan Companies
       (and any relevant Elan Group Undertaking to whom obligations may have
       been sub-contracted or delegated) shall not otherwise sub-contract or
       delegate their obligations under this Agreement without the prior
       written consent of VDL (such consent not be unreasonably withheld or
       delayed).

7.6    This Agreement shall not be deemed to create any partnership, joint
       venture, or agency relationship between the parties. Each party shall
       act under this Agreement as an independent contractor. The parties shall
       have no authority to enter into agreements of any kind on behalf of each
       other and shall have no power or authority to bind or obligate another
       party in any manner to any third party.

7.7    This Agreement is governed by English law. The courts of England have
       exclusive jurisdiction to settle any dispute arising from or connected
       with this Agreement (a "DISPUTE") including a dispute regarding the
       existence, validity or termination of this Agreement or the consequences
       of its nullity. The parties agree that the courts of England are the
       most appropriate and convenient courts to settle any Dispute and,
       accordingly, that they will not argue to the contrary.

7.8    The parties agree that the documents which start any proceedings
       relating to a Dispute ("PROCEEDINGS") and any other documents required
       to be served in relation to those Proceedings may be served on any
       Seller in accordance with Clause 7.1. These documents may, however, be
       served in any other manner allowed by law.

7.9    Neither the failure nor delay on the part of any party to require the
       strict performance of any term, covenant or condition of this Agreement
       or to exercise any right or remedy available on a breach thereof shall
       constitute a waiver of any such breach or of any such term or condition.
       The consent to, or the waiver of, any breach, or the failure to require
       on any single occasion the performance or timely performance of any
       term, covenant, or condition of this Agreement shall not be construed as
       authorizing any subsequent or additional breach and shall not prevent a
       subsequent enforcement of such term, covenant, or condition.

7.10   In the event that any provision of this Agreement or the application
       thereof to any party or circumstance shall be invalid or unenforceable
       to any extent, then:

       7.10.1 a suitable and equitable provision shall be substituted therefor
              in order to carry out, so far as may be valid and enforceable, the
              intent and purpose of such invalid and unenforceable provision;
              and

       7.10.2 the remainder of this Agreement and the application of such
              provision to the parties or circumstances other than those to
              which it is held invalid or unenforceable shall not be affected
              thereby.

7.11   The parties hereto acknowledge and agree that:

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       7.11.1 each party and its representatives has reviewed and negotiated the
              terms and provisions of this Agreement and have contributed to its
              revision;

       7.11.2 the rule of construction to the effect that any ambiguities are
              resolved against the drafting party shall not be employed in the
              interpretation of this Agreement; and

       7.11.3 the terms and provisions of this Agreement shall be construed
              fairly as to each party hereto and not in favour of or against
              either party regardless of which party was generally responsible
              for the preparation of this Agreement.

7.12   This Agreement may be executed by facsimile and in two or more
       counterparts, each of which shall be deemed an original, but both of
       which together shall constitute a single agreement.

7.13   A person who is not a party to this Agreement has no right under the
       Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
       Agreement.

7.14   Nothing contained herein shall in any way be deemed to:

       7.14.1 constitute a waiver or modification of any rights to which any
              party may otherwise be entitled under the Sale and Purchase
              Agreement or any other document entered into pursuant thereto; or

       7.14.2 to amend, supplement or modify any of the terms of the Sale and
              Purchase Agreement or any other document entered into pursuant
              thereto.

7.15   No party shall by virtue of this Agreement derive any rights of title,
       or any right of use or access to any rights to Intellectual Property
       used or owned by any other party other than those rights of use
       expressly stated in this Agreement.

7.16   Except where this Agreement provides otherwise, each party shall pay the
       costs and expenses incurred by it in connection with the entering into
       and implementation of this Agreement.

7.17   Time is not of the essence in relation to any obligation under this
       Agreement unless time is expressly stated to be of the essence in
       relation to that obligation.

7.18   The termination of this Agreement for any reason shall be without
       prejudice to any rights or obligations which have accrued before
       termination and shall not destroy or diminish the binding force of any
       of the provisions of this Agreement which are expressly provided to come
       into force on, or continue in force after such termination.

8.     WHOLE AGREEMENT

8.1    This Agreement and the documents referred to in it contain the whole
       agreement between the parties relating to the transactions contemplated
       by this Agreement and supersede all previous agreements between the
       parties relating to these transactions.

8.2    Each party acknowledges that, in agreeing to enter into this Agreement,
       it has not relied on any representation, warranty, collateral contract
       or other assurance (except those repeated in this Agreement and the
       documents referred to in it and any other agreement

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       entered into on the date of this agreement between the parties) made by
       or on behalf of any other party at any time before the signature of this
       Agreement. Each party waives all rights and remedies which, but for this
       Clause 8.2, might otherwise be available to it in respect of any such
       representation, warranty, collateral contract or other assurance.

8.3    Nothing in the preceding Clause limits or excludes any liability for
       fraud.

AS WITNESS this agreement has been signed by the parties (or their duly
authorised representatives) on the date stated at the beginning of this
agreement.

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                                   SCHEDULE 1

                                    SERVICES

Without prejudice to Clause 2 of this Agreement, the Elan Companies and VDL
agree that the Elan Companies will continue current systems with current
policies and procedures to support the service areas outlined below. The parties
hereto shall work together in good faith to perform the Safety Data Exchange
Agreement between EPI and VDL, dated 14 April 2003 (with such amendments as may
be necessary to take account of the Transaction).

The Elan Companies agree to provide the services described below to VDL.

PART A: SIX MONTH SERVICES

1.     PRODUCT QUALITY COMPLAINTS
       o      Phone receipt and data collection
       o      Documentation and spreadsheet entry (with lot # where available)
       o      Research response and letter
       o      Investigations to VDL QA (weekly)
       o      VDL to approve all Quality Complaints prior to closing out the
              report
       o      Managing any Product recall required (Service to be charged to VDL
              in accordance with Clause 2.1)

2.     QUALITY ASSURANCE
       o      Review batch records
                 -  Manufacturing
                 -  labelling and packaging
                 -  analytical
       o      Packaging Validation Report review, as appropriate
       o      Commercial Stability Data review
       o      Review Master Batch Records prior to manufacture, packaging and
              labelling of any new production run
       o      Facilitate interaction of VDL with key partners including Sharp
              and DDN
       o      Review change controls and deviations and out-of-specification
              reports.

3.     SUPPLY CHAIN
       o      Develop monthly forecast of planned orders for use by contract
              manufacturer
       o      Coordinate issuance and scheduling of purchase orders for
              procurement of inventory
       o      Monitor warehouse inventory levels and shelf lives and, following
              consultation with and approval by VDL, reschedule orders where
              necessary to ensure continuous supply of Product
       o      Coordinate logistics including obtaining/maintaining all necessary
              import/export licences or permits and all other necessary
              documentation for transporting Product
       o      Transition meetings with contract manufacturer and VDL as needed
       o      Monitor security levels at manufacturers
       o      Manage the distribution of Product to wholesalers

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4.     PACKAGING TECHNICAL SERVICES
       o      Revise Frova labelling. This includes reviewing the new proofs,
              routing them for approvals, and creating/approving the new specs
              and BOMs
       o      Prepare a package together of all the packaging/labelling
              documentation for them plus supporting any artwork revisions for
              their information

5.     REGULATORY
       o      Review safety reports (this assumes no support of manufacturing
              amendments relating to the NDA)
       o      Preparation in FDA format and review of individual case records
              and periodic safety reports
       o      Consult with VDL regarding discussions with the FDA and Health
              Canada
       o      Provision of advice in relation to historical regulatory and DDMAC
              review of marketing materials

6.     MANAGED CARE ORGANISATIONS
       o      Manage orderly transition of contracts and contacts with managed
              care organisations
       o      Manage supply of Product in accordance with Elan's contracts with
              managed care organisations and government agencies

PART B: TWELVE MONTH SERVICES

1.     ADE DATA MANAGEMENT
       o      Collection of adverse drug experience (ADE) information and entry
              into the Elan electronic database (via initial collection forms)
       o      Evaluation of all ADE (serious, non-serious, and literature) for
              regulatory reportability (domestic/international)
       o      Extraction and entry of safety data from source documents and
              collection forms
       o      Event and Disease Coding (MedDRA), drug coding (WHO-DRL)
       o      Narrative Development
       o      Follow-up for completeness
       o      Verification of data
       o      Data Quality Checks/Compliance
       o      Administrative handling of cases (login records, ordering and
              labelling of documents in folders)
       o      Preparation of individual and periodic safety reports as may be
              required to be submitted by VDL to the FDA
       o      Literature Search and Review
       o      Provide, where practical, electronic versions of data
       o      Provide data in accordance with the terms of the Safety Data
              Exchange Agreement
       o      Upon termination of this Agreement, provide an export of the
              Product safety data from the GSS database in a format to be
              further agreed upon by the parties

2.     MEDICAL INQUIRIES
       o      Phone receipt of medical inquiries

                                      -12-
<PAGE>

       o      Documentation of handling of inquiries
       o      Report to VDL Medical Affairs at Completion and monthly thereafter
              until this Agreement terminates together with a final report at
              the date of termination of this Agreement

3.     MEDICAL MONITORING
       o      Ongoing review of safety information for signal detection and
              trend analysis
       o      Review of all potentially reportable (expedited) ADRs
       o      Review of MedDRA coding
       o      Review of all prepared regulatory submissions
       o      Transfer all documentation (including correspondence in relation
              to Agreement and protocols) which relate to investigator initiated
              studies
       o      Assist in the finalisation of documentation and supply of study
              drug in connection with the initiation of the following
              investigator-led studies:
                     -  Diamond - High Frequency Migraine
                     -  Rapoport - Chronic Daily Headache
              Note - VDL will be responsible for managing these studies and for
              payment of all third party costs including investigator grants.

4.     RETURNS, REBATES AND CHARGEBACKS
       o      Process incoming customer orders
       o      Coordinate order confirmation with 3PL warehouse
       o      Perform Inventory Management activities
       o      Coordinate freight management
       o      Process billing and invoicing
       o      Reconcile aged AR balances
       o      Process return product credits
       o      Process rebates and charge backs
       o      Destroy returned products

5.     FINANCE
       o      Financial accounting with respect to the Product
       o      Preparing budgets relating to the Product

                                      -13-
<PAGE>

                                   SCHEDULE 2

                          TRANSITIONAL SERVICE MANAGERS

            NAME                                         APPOINTED BY:
         Don Murphy                                     Elan Companies
         Martin Pue                                           VDL

                                      -14-
<PAGE>

EXECUTED BY THE PARTIES

Signed by                                    )
For and on behalf of                         )   LIAM DANIEL
ELAN CORPORATION PLC                         )   Director

Signed by                                    )
For and on behalf of                         )   JUAN CARLOS AGUILERA
ELAN PHARMACEUTICALS, INC.                   )   Authorised Signatory

Signed by                                    )
For and on behalf of                         )   LIAM DANIEL
ELAN PHARMA LIMITED                          )   Director

Signed by                                    )
For and on behalf of                         )   A. J. WEIR
VERNALIS DEVELOPMENT LIMITED                 )   Director

                                      -15-<PAGE>

                                                                  EXHIBIT 4.5(C)

[CLIFFORD CHANCE LOGO]                             LIMITED LIABILITY PARTNERSHIP

                                                                  EXECUTION COPY

                                    MAY 2004

                          VERNALIS DEVELOPMENT LIMITED
                                   AS COMPANY

                                  IN FAVOUR OF

                        ELAN PHARMA INTERNATIONAL LIMITED

                        ---------------------------------
                                 FLOATING CHARGE
                        ---------------------------------

<PAGE>

                                    CONTENTS

CLAUSE                                                                      PAGE
------                                                                      ----
1.   Definitions and Interpretation........................................   2
2.   Floating Charge.......................................................   4
3.   Crystallisation of Floating Charge....................................   4
4.   Further Assurance.....................................................   4
5.   Negative Pledge.......................................................   5
6.   Information and Access................................................   5
7.   Monetary Claims: After Enforcement Event..............................   5
8.   Enforcement of Security...............................................   5
9.   Extension and Variation of the Law of Property Act 1925...............   6
10.  Appointment of Receiver or Administrator..............................   6
11.  Powers of Receiver....................................................   7
12.  Application of Moneys.................................................   8
13.  Protection of Purchasers..............................................   8
14.  Power of Attorney.....................................................   8
15.  Effectiveness of Security.............................................   9
16.  Release of Security...................................................  10
17.  Set-Off...............................................................  10
18.  Subsequent Security Interests.........................................  10
19.  Currency..............................................................  11
20.  Assignment............................................................  11
21.  Expenses, Stamp Taxes and Indemnity...................................  11
22.  Payments Free of Deduction............................................  11
23.  Discretion and Delegation.............................................  12
24.  Notices...............................................................  12
25.  Governing Law.........................................................  12
26.  Jurisdiction..........................................................  12
27.  Counterparts..........................................................  12

<PAGE>

THIS FLOATING CHARGE is made on            May 2004

BY

(1)     VERNALIS DEVELOPMENT LIMITED, a company incorporated in England and
        Wales (registered no. 02600483), whose registered office is at Oakdene
        Court, 613 Reading Road, Winnersh, Berkshire RE41 5UA (the "COMPANY") in
        favour of

(2)     ELAN PHARMA INTERNATIONAL LIMITED a company incorporated in Ireland
        (registered no. 222276), whose registered office is at WIL House,
        Shannon Business Park, Shannon, County Clare, Ireland (the "EPIL").

IT IS AGREED as follows:

1.      DEFINITIONS AND INTERPRETATION

1.1     DEFINITIONS

        Terms defined in the Sale and Purchase Agreement shall, unless otherwise
        defined in this Floating Charge, have the same meaning when used in this
        Floating Charge and in addition:

        "CHARGED PROPERTY" means all the assets and undertaking of the Company
        which from time to time are the subject of the security created or
        expressed to be created in favour of EPIL by or pursuant to this
        Floating Charge.

        "COLLATERAL RIGHTS" means all rights, powers and remedies of EPIL
        provided by or pursuant to this Floating Charge or by law.

        "DEFAULT" means any failure by the Company to comply with any of its
        obligations under clause 5 (except sub-clause 5.2) of the Sale and
        Purchase Agreement and (except in relation to sub-clause 5.8 of the Sale
        and Purchase Agreement) such failure is not remedied within 30 days of
        the due date for performance of such obligation .

        "ENFORCEMENT EVENT" means any of the following events:

        (a)     the occurrence of a Default;

        (b)     breach by the Company of any provision of this Floating Charge;

        (c)     the presentation of a petition or application for the making of
                an administration order in relation to the Company;

        (d)     any person who is entitled to do so giving written notice of its
                intention to appoint an administrator of the Company or filing
                such a notice with the court;

        (e)     either the Company or Vernalis plc passes a resolution for its
                winding up or a court of competent jurisdiction makes an order
                for the Company's or Vernalis plc's winding up or dissolution;

        (f)     an administrator of the Company or Vernalis plc is appointed, or
                a receiver is appointed over, or an encumbrancer takes
                possession of or sells, an asset of the Company or Vernalis plc
                other than pursuant to this Floating Charge; or

                                     - 2 -
<PAGE>

        (g)     either the Company or Vernalis plc makes an arrangement or
                composition with its creditors generally or makes an application
                to a court of competent jurisdiction for protection from its
                creditors generally.

        "INTELLECTUAL PROPERTY" means any patents, trade marks, service marks,
        designs, business names, copyrights, design rights, moral rights,
        inventions, confidential information, knowhow and other intellectual
        property rights and interests, whether registered or unregistered, the
        benefit of all applications and rights to use such assets.

        "MONETARY CLAIMS" means any book and other debts and monetary claims
        relating to the Product from or in relation to the Territory owing to
        the Company and any proceeds of such debts and claims (including without
        limitation, any claims or sums of money deriving from or in relation to
        any Intellectual Property, any court order or judgment, any contract or
        agreement to which the Company is a party and any other assets,
        property, rights or undertaking of the Company in each case in or
        relating to the Product).

        "RECEIVER" means a receiver or receiver and manager or administrative
        receiver of the whole or any part of the Charged Property.

        "SALE AND PURCHASE AGREEMENT" means the sale and purchase agreement
        dated 29 March 2004 between Elan Corporation, plc, Elan Pharma
        International Limited, Elan Pharmaceuticals, Inc., Vernalis Development
        Limited and Vernalis plc relating to the termination of the Licence
        Agreement and the Development Agreement and the sale and purchase of
        certain rights and assets relating to the Product (as defined therein).

        "SECURED OBLIGATIONS" means all obligations to be discharged by the
        Company under clause 5 of the Sale and Purchase Agreement.

        "SECURITY" means a mortgage, charge, pledge, lien assignment,
        hypothecation or other security or any other agreement or arrangement
        having a similar effect.

1.2     INTERPRETATION

        In this Floating Charge:

        1.2.1   the rules of interpretation contained in clauses 1.2 and 1.3 of
                the Sale and Purchase Agreement shall apply to the construction
                of this Floating Charge;

        1.2.2   any reference to "EPIL" or the "COMPANY" shall be construed so
                as to include its and any subsequent successors and any
                permitted transferees in accordance with their respective
                interests; and

        1.2.3   references in this Floating Charge to any Clause or Schedule
                shall be to a clause or schedule contained in this Floating
                Charge.

1.3     THIRD PARTY RIGHTS

        A person who is not a party to this Floating Charge has no right under
        the Contracts (Rights of Third Parties) Act 1999 to enforce any term of
        this Floating Charge.

                                     - 3 -
<PAGE>

2.      FLOATING CHARGE

2.1     The Company hereby charges with full title guarantee in favour of EPIL
        with the payment and discharge of the Secured Obligations by way of
        first floating charge the Monetary Claims.

2.2     Paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to the
        floating charge created pursuant to this Clause 2.

3.      CRYSTALLISATION OF FLOATING CHARGE

3.1     CRYSTALLISATION:  BY NOTICE

        EPIL may at any time by notice in writing to the Company convert the
        floating charge created by Clause 2 (Floating Charge) with immediate
        effect into a fixed charge as regards the Charged Property if a Default
        has occurred and is continuing.

3.2     CRYSTALLISATION: AUTOMATIC

        Notwithstanding Clause 3.1 (Crystallisation: By Notice) and without
        prejudice to any law which may have a similar effect, the floating
        charge will automatically be converted (without notice) with immediate
        effect into a fixed charge as regards all the assets subject to the
        floating charge if any of the events specified in paragraphs (e), (f) or
        (g) of the definition of Enforcement Event occurs.

4.      FURTHER ASSURANCE

4.1     FURTHER ASSURANCE: GENERAL

        4.1.1   The covenant set out in Section 2(1)(b) of the Law of Property
                (Miscellaneous Provisions) Act 1994 shall extend to include the
                obligations set out in sub-clause 4.1.2 below.

        4.1.2   The Company shall promptly do all such acts or execute all such
                documents as EPIL may reasonably specify (and in such form as
                EPIL may reasonably require in favour of EPIL or its
                nominee(s)):

                (a)     to perfect the Security created or intended to be
                        created in respect of the Charged Property or for the
                        exercise of the Collateral Rights;

                (b)     to confer on EPIL security over any property and assets
                        of the Company located in any jurisdiction outside
                        England and Wales equivalent or similar to the security
                        intended to be conferred by or pursuant to this Floating
                        Charge; and/or

                (c)     to facilitate the realisation of the Charged Property.

4.2     NECESSARY ACTION

        The Company shall take all such action as is available to it (including
        making all filings and registrations) as may be necessary for the
        purpose of the creation, perfection, protection or maintenance of any
        Security conferred or intended to be conferred on EPIL by or pursuant to
        this Floating Charge.

                                     - 4 -
<PAGE>

4.3     CONSENTS

        The Company shall use all reasonable endeavours to obtain (in form and
        content reasonably satisfactory to EPIL) as soon as possible any
        consents necessary to enable the assets of the Company to be the subject
        of an effective floating charge pursuant to Clause 2 (Floating Charge)
        and, immediately upon obtaining any such consent, the asset concerned
        shall become subject to such security and the Company shall promptly
        deliver a copy of each consent to EPIL.

4.4     IMPLIED COVENANTS FOR TITLE

        The obligations of the Company under this Floating Charge shall be in
        addition to the covenants for title deemed to be included in this
        Floating Charge by virtue of Part 1 of the Law of Property
        (Miscellaneous Provisions) Act 1994.

5.      NEGATIVE PLEDGE

5.1     NEGATIVE PLEDGE

        The Company undertakes that it shall not (and it shall ensure that no
        Vernalis Group Undertaking shall), at any time during the subsistence of
        this Floating Charge, create or permit to subsist any Security over all
        or any part of the Charged Property other than Security permitted under
        this Floating Charge and the Sale and Purchase Agreement.

6.      INFORMATION AND ACCESS

        The Company shall from time to time, on request of EPIL, furnish EPIL
        with such information as EPIL may reasonably require about the Charged
        Property and its compliance with the terms of this Floating Charge and
        the Company shall permit EPIL, its representatives, professional
        advisers, free access at all reasonable times and on reasonable notice
        to inspect and take copies and extracts from the books, accounts and
        records of the Company relating to the Charged Property.

7.      MONETARY CLAIMS: AFTER ENFORCEMENT EVENT

        At any time after the occurrence of an Enforcement Event the Company
        shall pay all proceeds of the realisation of any Monetary Claims into a
        bank account solely for such purpose in the name of the Company and:

        7.1.1   shall ensure that no other monies shall be paid into such
                account; and

        7.1.2   shall not (except with the prior written consent of EPIL) be
                entitled to withdraw or otherwise transfer the proceeds standing
                to the credit of such account.

8.      ENFORCEMENT OF SECURITY

8.1     ENFORCEMENT

        At any time after the occurrence of an Enforcement Event or if the
        Company requests EPIL to exercise any of its powers under this Floating
        Charge, the security created by or pursuant to this Floating Charge is
        immediately enforceable and EPIL may, without notice to the Company or
        prior authorisation from any court, in its absolute discretion:

                                     - 5 -
<PAGE>

        8.1.1     enforce all or any part of that security (at the times, in the
                  manner and on the terms it thinks fit) and take possession of
                  and hold or dispose of all or any part of the Charged
                  Property; and

        8.1.2     whether or not it has appointed a Receiver, exercise all or
                  any of the powers, authorities and discretions conferred by
                  the Law of Property Act 1925 (as varied or extended by this
                  Floating Charge) on mortgagees and by this Floating Charge on
                  any Receiver or otherwise conferred by law on mortgagees or
                  Receivers.

8.2     NO LIABILITY AS MORTGAGEE IN POSSESSION

        Neither EPIL nor any Receiver shall be liable to account as a mortgagee
        in possession in respect of all or any part of the Charged Property or
        be liable for any loss upon realisation or for any neglect, default or
        omission in connection with the Charged Property to which a mortgagee in
        possession might otherwise be liable.

9.      EXTENSION AND VARIATION OF THE LAW OF PROPERTY ACT 1925

9.1     EXTENSION OF POWERS

        The power of sale or other disposal conferred on EPIL and on any
        Receiver by this Floating Charge shall operate as a variation and
        extension of the statutory power of sale under Section 101 of the Law of
        Property Act 1925 and such power shall arise (and the Secured
        Obligations shall be deemed due and payable for that purpose) on
        execution of this Floating Charge.

9.2     RESTRICTIONS

        The restrictions contained in Sections 93 and 103 of the Law of Property
        Act 1925 shall not apply to this Floating Charge or to the exercise by
        EPIL of its right to consolidate all or any of the security created by
        or pursuant to this Floating Charge with any other security in existence
        at any time or to its power of sale, which powers may be exercised by
        EPIL without notice to the Company on or at any time after the
        occurrence of an Enforcement Event.

10.     APPOINTMENT OF RECEIVER OR ADMINISTRATOR

10.1    APPOINTMENT AND REMOVAL

        After the occurrence of an Enforcement Event or if requested to do so by
        the Company, EPIL may by deed or otherwise (acting through an authorised
        officer of EPIL), without prior notice to the Company:

        10.1.1  appoint one or more persons to be a Receiver of the whole or any
                part of the Charged Property;

        10.1.2  remove (so far as it is lawfully able) any Receiver so
                appointed;

        10.1.3  appoint another person(s) as an additional or replacement
                Receiver(s); and

        10.1.4  appoint one or more persons to be an administrator of the
                Company.

                                     - 6 -
<PAGE>

10.2    CAPACITY OF RECEIVERS

        Each person appointed to be a Receiver pursuant to Clause 10.1
        (Appointment and Removal) shall be:

        10.2.1  entitled to act individually or together with any other person
                appointed or substituted as Receiver;

        10.2.2  for all purposes shall be deemed to be the agent of the Company
                which shall be solely responsible for his acts, defaults and
                liabilities and for the payment of his remuneration and no
                Receiver shall at any time act as agent for EPIL; and

        10.2.3  entitled to remuneration for his services at a rate to be fixed
                by EPIL from time to time (without being limited to the maximum
                rate specified by the Law of Property Act 1925).

10.3    STATUTORY POWERS OF APPOINTMENT

        The powers of appointment of a Receiver shall be in addition to all
        statutory and other powers of appointment of EPIL under the Law of
        Property Act 1925 (as extended by this Floating Charge) or otherwise and
        such powers shall remain exercisable from time to time by EPIL in
        respect of any part of the Charged Property.

11.     POWERS OF RECEIVER

        Every Receiver shall (subject to any restrictions in the instrument
        appointing him but notwithstanding any winding-up or dissolution of the
        Company) have and be entitled to exercise, in relation to the Charged
        Property (and any assets of the Company which, when got in, would be
        Charged Property) in respect of which he was appointed, and as varied
        and extended by the provisions of this Floating Charge (in the name of
        or on behalf of the Company or in his own name and, in each case, at the
        cost of the Company):

        11.1.1  all the powers conferred by the Law of Property Act 1925 on
                mortgagors and on mortgagees in possession and on receivers
                appointed under that Act;

        11.1.2  all the powers of an administrative receiver set out in Schedule
                1 to the Insolvency Act 1986 (whether or not the Receiver is an
                administrative receiver);

        11.1.3  all the powers and rights of an absolute owner and power to do
                or omit to do anything which the Company itself could do or omit
                to do; and

        11.1.4  the power to do all things (including bringing or defending
                proceedings in the name or on behalf of the Company) which seem
                to the Receiver to be incidental or conducive to (a) any of the
                functions, powers, authorities or discretions conferred on or
                vested in him or (b) the exercise of the Collateral Rights
                (including the realisation of all or any part of the Charged
                Property) or (c) bringing to his hands any assets of the Company
                forming part of, or which when got in would be, Charged
                Property.

                                     - 7 -
<PAGE>

12.     APPLICATION OF MONEYS

        All moneys received or recovered by EPIL or any Receiver pursuant to
        this Floating Charge or the powers conferred by it shall (subject to the
        claims of any person having prior rights thereto and by way of variation
        of the provisions of the Law of Property Act 1925) be applied first in
        the payment of the costs, charges and expenses incurred and payments
        made by the Receiver, the payment of his remuneration and the discharge
        of any liabilities incurred by the Receiver in, or incidental to, the
        exercise of any of his powers, and thereafter shall be applied by EPIL
        (notwithstanding any purported appropriation by the Company) in such
        order and manner as EPIL shall think fit:

        12.1.1  in or towards the discharge of all or any of the Secured
                Obligations which are then due and payable; or

        12.1.2  if any of the Secured Obligations are then contingent, in
                payment to the credit of any accounts selected by EPIL to be
                held until such time as EPIL shall think fit pending their
                application in or towards the discharge of all or any of the
                Secured Obligations which are at that time due and payable; or

        12.1.3  in payment to the credit of any suspense or impersonal account
                for so long as EPIL shall think fit pending any further
                application of such moneys (as EPIL shall be entitled, but not
                obliged, to do in its discretion) in accordance with the
                previous provisions of this Clause 12; and

        12.1.4  if the Company is under no further actual or contingent
                liability under the Sale and Purchase Agreement, in payment of
                the surplus to the Company or any other person entitled to it,
                whereupon any Receiver previously appointed shall be removed as
                provided by law and the charge released in accordance with
                Clause 16 below.

13.     PROTECTION OF PURCHASERS

13.1    CONSIDERATION

        The receipt of EPIL or any Receiver shall be conclusive discharge to a
        purchaser and, in making any sale or disposal of any of the Charged
        Property or making any acquisition, EPIL or any Receiver may do so for
        such consideration, in such manner and on such terms as it thinks fit.

13.2    PROTECTION OF PURCHASERS

        No purchaser or other person dealing with EPIL or any Receiver shall be
        bound to inquire whether the right of EPIL or such Receiver to exercise
        any of its powers has arisen or become exercisable or be concerned with
        any propriety or regularity on the part of EPIL or such Receiver in such
        dealings.

14.     POWER OF ATTORNEY

14.1    APPOINTMENT AND POWERS

        The Company by way of security irrevocably appoints EPIL and any
        Receiver severally to be its attorney and in its name, on its behalf and
        as its act and deed to execute, deliver and perfect all documents and do
        all things which the attorney may consider to be required or desirable
        for:

                                     - 8 -
<PAGE>

        14.1.1  carrying out any obligation imposed on the Company by this
                Floating Charge (including the execution and delivery of any
                deeds, charges, assignments or other security and any transfers
                of the Charged Property); and

        14.1.2  enabling EPIL and any Receiver to exercise, or delegate the
                exercise of, any of the rights, powers and authorities conferred
                on them by or pursuant to this Floating Charge or by law
                (including, after the occurrence of an Enforcement Event, the
                exercise of any right of a legal or beneficial owner of the
                Charged Property).

14.2    RATIFICATION

        The Company shall ratify and confirm all things done and all documents
        executed by any attorney in the exercise or purported exercise of all or
        any of his powers.

15.     EFFECTIVENESS OF SECURITY

15.1    CONTINUING SECURITY

        The security created by or pursuant to this Floating Charge shall remain
        in full force and effect as a continuing security for the Secured
        Obligations unless and until discharged by EPIL.

15.2    CUMULATIVE RIGHTS

        The security created by or pursuant to this Floating Charge and the
        Collateral Rights shall be cumulative, in addition to and independent of
        every other security which EPIL may at any time hold for the Secured
        Obligations or any other obligations or any rights, powers and remedies
        provided by law. No prior security held by EPIL over the whole or any
        part of the Charged Property shall merge into the security constituted
        by this Floating Charge.

15.3    NO PREJUDICE

        The security created by or pursuant to this Floating Charge and the
        Collateral Rights shall not be prejudiced by any unenforceability or
        invalidity of any other agreement or document or by any time or
        indulgence granted to the Company or any other person or by any other
        thing which might otherwise prejudice that security or any Collateral
        Right.

15.4    REMEDIES AND WAIVERS

        No failure on the part of EPIL to exercise, or any delay on its part in
        exercising, any Collateral Right shall operate as a waiver of that
        Collateral Right, nor shall any single or partial exercise of any
        Collateral Right preclude any further or other exercise of that or any
        other Collateral Right.

15.5    NO LIABILITY

        None of EPIL, its nominee(s) or any Receiver shall be liable by reason
        of (a) taking any action permitted by this Floating Charge or (b) any
        neglect or default in connection with the Charged Property or (c) taking
        possession of or realising all or any part of the Charged Property,
        except in the case of gross negligence or wilful default upon its part.

15.6    PARTIAL INVALIDITY

        If, at any time, any provision of this Floating Charge is or becomes
        illegal, invalid or unenforceable in any respect under the law of any
        jurisdiction, neither the legality,

                                     - 9 -
<PAGE>

        validity or enforceability of the remaining provisions of this Floating
        Charge nor of such provision under the laws of any other jurisdiction
        shall in any way be affected or impaired thereby and, if any part of the
        security intended to be created by or pursuant to this Floating Charge
        is invalid, unenforceable or ineffective for any reason, that shall not
        affect or impair any other part of the security.

16.     RELEASE OF SECURITY

16.1    REDEMPTION OF SECURITY

        Upon the Secured Obligations being discharged in full EPIL shall, at the
        request and cost of the Company, release and cancel the security
        constituted by this Floating Charge, in each case subject to Clause 16.2
        (Avoidance of Payments) and without recourse to, or any representation
        or warranty by, EPIL or any of its nominees.

16.2    AVOIDANCE OF PAYMENTS

        If EPIL considers that any amount paid or credited to it is capable of
        being avoided or reduced by virtue of any bankruptcy, insolvency,
        liquidation or similar laws the liability of the Company under this
        Floating Charge and the security constituted hereby shall continue and
        such amount shall not be considered to have been irrevocably paid.

16.3    RETENTION OF SECURITY

        EPIL may retain this Floating Charge, the security constituted by or
        pursuant to this Floating Charge and all documents of title,
        certificates and other documents relating to or evidencing ownership of
        all or any part of the Charged Property for a period of seven months
        after any discharge in full of the Secured Obligations provided that if
        at any time during that seven month period a petition or application is
        presented for an order for the winding-up of, or the making of an
        administration order in respect of, the Company or any person who is
        entitled to do so gives written notice of its intention to appoint an
        administrator of the Company or files such a notice with the court or
        the Company commences to be wound-up voluntarily or any analogous
        proceedings are commenced in respect of it, EPIL may continue to retain
        such security and such documents for such further period as EPIL may
        determine and the security and such documents shall be deemed to have
        continued to have been held as security for the Secured Obligations.

17.     SET-OFF

        The Company authorises EPIL (but EPIL shall not be obliged to exercise
        such right), after the occurrence of an Enforcement Event, to set off
        against the Secured Obligations any amount or other obligation
        (contingent or otherwise) owing by EPIL to the Company and apply any
        credit balance to which the Company is entitled on any account with EPIL
        in accordance with Clause 12 (Application of Monies) (notwithstanding
        any specified maturity of any deposit standing to the credit of any such
        account).

18.     SUBSEQUENT SECURITY INTERESTS

        If EPIL at any time receives or is deemed to have received notice of any
        subsequent Security affecting all or any part of the Charged Property or
        any assignment or transfer of the Charged Property which is prohibited
        by the terms of this Floating Charge, all payments thereafter by or on
        behalf of the Company to EPIL shall be treated as having

                                     - 10 -
<PAGE>

        been credited to a new account of the Company and not as having been
        applied in reduction of the Secured Obligations as at the time when EPIL
        received such notice.

19.     CURRENCY

        For the purpose of or pending the discharge of any of the Secured
        Obligations, EPIL may convert any moneys received, recovered or realised
        or subject to application by EPIL or any Receiver pursuant to this
        Floating Charge from any currency other than US dollars to US dollars
        and any such conversion shall be made at EPIL's spot rate of exchange
        for the time being for obtaining US dollars with the first currency and
        the Secured Obligations shall be discharged only to the extent of the
        net proceeds of such conversion received by EPIL.

20.     ASSIGNMENT

        EPIL may assign and transfer all or any of its rights and obligations
        under this Floating Charge to any Elan Group Undertaking and if it does
        so and the assignee subsequently ceases to be an Elan Group Undertaking,
        EPIL shall procure that the rights under this agreement are reassigned
        to EPIL or another Elan Group Undertaking.

21.     EXPENSES, STAMP TAXES AND INDEMNITY

21.1    EXPENSES

        The Company shall, from time to time on demand of EPIL, reimburse EPIL
        for all the costs and expenses (including legal fees) on a full
        indemnity basis together with any VAT thereon incurred by it in
        connection with the exercise, preservation and/or enforcement of any of
        the Collateral Rights or the security contemplated by this Floating
        Charge or any proceedings instituted by or against EPIL as a consequence
        of taking or holding the security or of enforcing the Collateral Rights
        and shall carry interest from the date of such demand until so
        reimbursed at the rate and on the basis mentioned in clause 25.5 of the
        Sale and Purchase Agreement.

21.2    INDEMNITY

        The Company shall, notwithstanding any release or discharge of all or
        any part of the security, indemnify EPIL, its agents, attorneys and any
        Receiver against any action, proceeding, claims, losses, liabilities and
        costs which it may sustain as a consequence of any breach by the Company
        of the provisions of this Floating Charge, the exercise or purported
        exercise of any of the rights and powers conferred on them by this
        Floating Charge or otherwise relating to the Charged Property.

22.     PAYMENTS FREE OF DEDUCTION

        All payments to be made under this Floating Charge shall be made free
        and clear of and without deduction for or on account of tax unless the
        Company is required to make such payment subject to the deduction or
        withholding of tax, in which case the sum payable by the Company in
        respect of which such deduction or withholding is required to be made
        shall be increased to the extent necessary to ensure that, after the
        making of such deduction or withholding, EPIL receives and retains (free
        from any liability in respect of any such deduction or withholding) a
        net sum equal to the sum which it would have

                                     - 11 -
<PAGE>

        received and so retained had no such deduction or withholding been made
        or required to be made.

23.     DISCRETION AND DELEGATION

23.1    DISCRETION

        Any liberty or power which may be exercised or any determination which
        may be made under this Floating Charge by EPIL or any Receiver may be
        exercised or made in its absolute and unfettered discretion without any
        obligation to give reasons.

23.2    DELEGATION

        Each of EPIL and any Receiver shall have full power to delegate (either
        generally or specifically) the powers, authorities and discretions
        conferred on it by this Floating Charge (including the power of
        attorney) on such terms and conditions as it shall see fit which
        delegation shall not preclude either the subsequent exercise, any
        subsequent delegation or any revocation of such power, authority or
        discretion by EPIL or the Receiver itself.

24.     NOTICES

        Clause 28 (Notices) of the Sale and Purchase Agreement is incorporated
        mutatis mutandis into this Floating Charge as if set out herein in full.

25.     GOVERNING LAW

        This Floating Charge is governed by English law.

26.     JURISDICTION

        Sub-clauses 29.2, 29.3 and 29.4 of the Sale and Purchase Agreement are
        incorporated mutatis mutandis in to this Floating Charge as if set out
        herein in full.

27.     COUNTERPARTS

        This Floating Charge may be executed in any number of counterparts each
        of which when executed and delivered is an original and all of which
        together evidence the same Floating Charge.

THIS FLOATING CHARGE has been signed on behalf of EPIL and executed as a deed by
the Company and is delivered by it on the date specified above.

                                     - 12 -
<PAGE>

THE COMPANY

EXECUTED as a DEED
By VERNALIS DEVELOPMENT LIMITED

______________________    Director

______________________    Director/Secretary

Address:

Fax:

EPIL

ELAN PHARMA INTERNATIONAL LIMITED

By:

Address:

Fax:

Attention:

                                     - 13 -

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