Document:

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                                                                Exhibit 10.17(c)

                            Dated 27th November 2000

                                  CEPHALON INC

                                       and

                                   NOVARTIS AG

                  ---------------------------------------------

                             COLLABORATION AGREEMENT

                 ----------------------------------------------

                               CMS Cameron McKenna
                                   Mitre House
                              160 Aldersgate Street
                                 London EC1A 4DD

                              T +44(0)20 7367 3000
                              F +44(0)20 7367 2000

                             Doc Ref: (51771728.05)

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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                                Table of Contents

1. Definitions and Interpretation..............................................1
2. The Collaboration...........................................................7
3. Ancillary Agreements and Obligations........................................8
4. Collaboration Committee.....................................................8
5. Executive Committee........................................................11
6. Disputes...................................................................12
7. Operating Committee........................................................13
8. Finance and Accounting Matters.............................................14
9. Supply of Product..........................................................16
10. Warranties................................................................16
11. Indemnity.................................................................18
12. Special Payments..........................................................20
13. Force Majeure.............................................................23
14. Term and Termination......................................................24
15. Confidential information..................................................25
16. Competition Restrictions..................................................26
17. Medical Information and Reporting.........................................27
18. Notices...................................................................28
19. Relationship of Parties...................................................29
20. Waiver....................................................................29
21. Severability..............................................................30
22. Third Party Rights........................................................30
23. Governing Law.............................................................30
24. Transmission of Rights....................................................31
25. Whole Agreement...........................................................31
26. Variations................................................................31
27. Costs.....................................................................31
28. Publicity.................................................................31
29. Counterparts..............................................................32

Schedule 1....................................................................34

     Calculation and Allocation of Collaboration Profits......................34

Schedule 2....................................................................36

     The Products.............................................................36

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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Schedule 3....................................................................38

     Trade Marks..............................................................38

Schedule 4....................................................................39

Collaboration Plan............................................................39

Schedule 5....................................................................40

     Supply and Distribution of Novartis Products.............................40

Schedule 6....................................................................48

     Part I - Collaboration Committee.........................................48
     Part II - Executive Committee............................................48

Schedule 7....................................................................49

Special Payments ...................................Error! Bookmark not defined.

Schedule 8 Cephalon Licence Fee Payment.......................................50

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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THIS AGREEMENT is made on 27th November 2000

BETWEEN

(1)   CEPHALON, INC. a company incorporated in Delaware, USA whose principal
      office is at 145, Brandywine Parkway, West Chester, 19380-4245,
      Pennsylvania, USA ("C. Inc"); and

(2)   NOVARTIS AG a company incorporated in Basel Switzerland whose principal
      office is at Lichtstrasse 35 CH-4056 Basel Switzerland ("NAG").

WHEREAS

(A)   The parties hereto or their Affiliates are engaged in the manufacture,
      marketing, distribution and sale of pharmaceutical products.

(B)   By a Licence of even date herewith, NAG will license to C. Inc for a
      period of 10 (ten) years the Trademarks and Product Licences relating to
      the Novartis Products.

(C)   The parties wish to collaborate directly and through their respective
      Affiliates in the promotion and sale of certain products of each of them.

NOW IT IS AGREED as follows:-

1.    Definitions and Interpretation

1.1   In this Agreement the following terms shall have the following meanings:

      "Affiliate" means any company, partnership or other entity which directly
      or indirectly Controls, is Controlled by or is under common Control with
      the Party in question including as a Subsidiary or Holding Company;

      "Agreement" means this agreement and any and all schedules, appendices and
      other addenda to it as may be varied from time to time in accordance with
      the provisions of this Agreement.

                                       1

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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      "Annual Operating Plan" means the budget and operating plan of the
      Collaboration in respect of any particular financial year;

      "Cephalon" means C. Inc or any of its Affiliates as the context may
      require;

      "Cephalon Product" means the product listed in Part I of Schedule 2
      together with such additions as the Parties may agree in writing to add to
      the Collaboration from time to time;

      "Collaboration" means the collaboration between Cephalon and Novartis
      pursuant to the Collaboration Agreements for the promotion, marketing and
      sale of the Products in the Territory;

      "Collaboration Agreements" means this Agreement, the Licence, the
      Distribution Agreement and the Managed Services Agreement;

      "Collaboration Committee" or "CC" means the committee to be established
      pursuant to Clause 4.1 hereof;

      "Collaboration Plan" means the financial plan for the Collaboration set
      out in Schedule 4 or the same as from time to time amended with the
      agreement of the Collaborators.

      "Collaborator" means Cephalon or Novartis as the case may be.

      "Commencement Date" means 1 January 2001;

      "Control" means the ownership(direct or indirect) of more than 50% of the
      issued share capital, or the legal power to direct or cause the direction
      of the general management and policies of the Party in question and
      "Controlled" and "Controller" shall be construed accordingly;

      "Cost of Goods" means the cost of goods determined as per Schedule 1;

                                       2

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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      "Distribution Agreement" means the Agreement in the agreed terms for the
      supply and distribution of the Cephalon Product to be entered into
      pursuant to Clause 2;

      "Executive Committee" or "EC" means the committee to be established
      pursuant to Clause 5 hereof;

      "Force Majeure" means in relation to any Party any event or circumstance
      which is beyond the reasonable control of that Party which event that
      Party could not reasonably be expected to have taken into account at the
      date of this Agreement including acts of God, war, riot, civil commotion,
      any overriding emergency, fire, flood, storm and industrial dispute (other
      than industrial dispute affecting only the employees of the Party
      suffering the event of force majeure or any of its agents or
      subcontractors);

      "Good Manufacturing Practice" or "GMP" means the regulatory standards and
      principles and guidelines of good manufacturing practice in effect from
      time to time relating to the manufacture of medicinal products including,
      without limitation, standards for equipment, facilities, production and
      quality control established by the applicable Governmental or Regulatory
      Authority;

      "Governmental or Regulatory Authority" means any local or national agency,
      authority, department, court, tribunal, arbitrator, inspectorate,
      minister, ministry official or public or statutory person (whether
      autonomous or not) of, or of any government of, any country having
      jurisdiction over this Agreement or any of the Parties or any of the
      Products or in respect of the regulation of medicinal products in the
      Territory including the European Commission and the European Court of
      Justice;

      "IAS" means the international generally accepted accounting principles;

      "Insolvency Event" means in relation to any Party any one of the
      following:-

      (a)   a notice shall have been issued to convene a meeting for the purpose
            of passing a resolution to wind up that Party or such a resolution
            shall have

                                       3

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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            been passed other than a resolution for the solvent reconstruction
            or reorganisation of that Party; or

      (b)   a resolution (other than a resolution for the solvent reconstruction
            or reorganisation of that Party) shall have been passed by that
            Party's Directors to seek a winding up or administration order or a
            petition for a winding up or administration order shall have been
            presented against that Party or such an order shall have been made;
            or

      (c)   a receiver, administrative receiver, receiver and manager, interim
            receiver, custodian, sequestrator or similar officer is appointed in
            respect of that Party or over a substantial part of its assets or
            any third party takes steps to appoint such an officer in respect of
            that Party or an encumbrancer takes steps to enforce or enforces its
            security; or

      (d)   a proposal for a voluntary arrangement shall have been made in
            relation to that Party under Part I Insolvency Act 1986; or

      (e)   a step or event shall have been taken or arisen outside the
            Territory which is similar or analogous to any of the steps or
            events listed above; or

      (f)   that Party suspends or threatens to suspend making payments to all
            or some of that Party's creditors or the Party submits to any type
            of voluntary arrangement; or

      (g)   where that Party is resident in the Territory it is deemed to be
            unable to pay its debts within the meaning of Section 123 Insolvency
            Act 1986;

      "Licence" means the Licence of even date between NAG and C. Inc under
      which NAG licenses to C.Inc the Trademarks and Product Licences to the
      Novartis Products for a period of up to 10 (ten) years;

      "Managed Services Agreement" means the Agreement in the agreed terms for
      the provision of certain services to the Collaboration by Cephalon to be
      entered into pursuant to Clause 2;

                                       4

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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      "Net Profit" means Net Sales less the Cost of Goods and other items
      customarily subtracted in accordance with IAS and agreed by the CC;

      "Net Sales Revenue" means in relation to the Products the aggregate amount
      of sales to third parties represented by invoices and/or other sales
      documentation prepared or presented by or on behalf of Novartis
      facilitating or making sales of Products on its own behalf or on behalf of
      Cephalon but less the following amounts:-

            i)    discounts, including cash discounts, trade allowances or
                  rebates actually allowed or granted; and,

            ii)   credits or allowances actually granted upon claims or returns,
                  regardless of the party requesting the return in accordance
                  with criteria agreed between the Collaborators;

      "Novartis" means NAG or any of its Affiliates as the context may require;

      "Novartis Products" means the Products listed in Part II of Schedule 2
      together with such additions as the Parties may agree in writing to add to
      the Collaboration from time to time;

      "Operating Committee" or "OC" means the committee to be established
      pursuant to Clause 7.1 hereof;

      "Party" means C. Inc or NAG (or their respective successors) and "Parties"
      shall mean both of them;

      "Products" means the Cephalon Product and the Novartis Products taken
      together;

      "Product Licence" means the authorisation for the sale and marketing of a
      Product in the Territory granted by a Governmental or Regulatory Authority
      as may be varied from time to time by Cephalon in the case of Cephalon
      Products or Novartis in the case of the Novartis Products;

                                       5

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      "Rights" means all or any copyright, design right, trademarks, tradenames,
      patents, know how, trade secrets and other intellectual property or other
      proprietary rights which may at any time subsist throughout all or any
      part of the world whether registered or otherwise including, without
      limitation the Trademarks and all extensions and renewals thereof;

      "SKU" means stock keeping unit;

      "Specification" means the specification for a Product set out in the
      relevant Product Licence;

      "Subsidiaries" or "Holding Company" has the meaning ascribed to those
      expressions by Section 736 of the Companies Act 1985 as amended;

      "Term" means the period of [**] from the Commencement Date;

      "Territory" means the United Kingdom together (in the case of the Cephalon
      Product only) with the Republic of Ireland or as may be agreed between the
      parties from time to time;

      "Trademarks" means the registered trademarks for the Products set out in
      Schedule 3;

      "Working Day" means a day other than a Saturday, Sunday, bank or other
      public holiday in the United Kingdom, the USA or Switzerland;

1.2 In this Agreement:

      1.2.1 unless the context otherwise requires all references to a particular
            Clause, Schedule or paragraph shall be a reference to that Clause,
            Schedule or paragraph, in or to this Agreement as it may be amended
            from time to time pursuant to this Agreement;

      1.2.2 the table of contents and headings are inserted for convenience only
            and shall be ignored in construing this Agreement;

                                       6

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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      1.2.3 unless the contrary intention appears words importing the masculine
            gender shall include the feminine and vice versa and words in the
            singular include the plural and vice versa;

      1.2.4 unless the contrary intention appears words denoting persons shall
            include any individual, partnership, company, corporation, joint
            venture, trust, association (incorporated or unincorporated),
            organisation or other entity, in each case whether or not having
            separate legal personality;

      1.2.5 reference to any statute or regulation includes any modification or
            re-enactment of that statute or regulation; and

      1.2.6 reference to the words "include" or "including" are to be construed
            without limitation to the generality of the preceding words.

2. The Collaboration

2.1   The Parties hereby establish the Collaboration and agree to collaborate in
      accordance with the terms of this Agreement, the Licence, the Distribution
      Agreement and the Managed Services Agreement to promote, market, sell, and
      distribute the Products in the Territory.

2.2   Both Parties shall use and shall procure that their Affiliates shall use
      all reasonable endeavours (subject to provisions of any of the
      Collaboration Agreements) to promote the business and operations of the
      Collaboration in accordance with the best interests of the Collaboration
      from time to time and to further the marketing and sale of the Products in
      the Territory in accordance with the Collaboration Plan.

2.3   C. Inc hereby undertakes with Novartis to perform and/or to procure the
      due performance by its Affiliates of all obligations and the due
      compliance by its Affiliates with all limitations under or pursuant to the
      Collaboration Agreements and to indemnify NAG and its relevant Affiliates
      against all claims damages losses liabilities penalties and expenses
      arising from any breach by any of C. Inc's Affiliates of their obligations
      as aforesaid.

                                       7

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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2.4   NAG hereby undertakes with Cephalon to perform and/or to procure the due
      performance by its Affiliates of all obligations and the due compliance by
      its Affiliates with all limitations under or pursuant to the Collaboration
      Agreements and to indemnify C. Inc and its relevant Affiliates against all
      claims, damages, losses, liabilities, penalties and expenses arising from
      any breach by any of NAG's Affiliates of the obligations as aforesaid.

2.5   The liability of a Party under Clauses 2.3 or 2.4 shall not be discharged
      or impaired by any amendment to or variation of any agreement any release
      of or granting of time or other indulgence to any of its Affiliates or any
      third party or any other act, event or omission which but for this Clause
      would operate to impair or discharge the liability of such Party under
      this Clause.

3.    Ancillary Agreements and Obligations

3.1   Upon the execution hereof the Parties shall execute the Licence and shall
      procure their relevant Affiliates to enter into the Distribution Agreement
      and the Managed Services Agreement.

3.2   In the event of any conflict between the provisions of this Agreement and
      any other of the Collaboration Agreements, the provisions of this
      Agreement shall prevail.

3.3   The Parties agree that the provisions of Schedule 5 will govern the
      obligations of the Parties in relation to the sale, promotion, marketing
      and distribution of the Novartis Products in the Territory.

4. Collaboration Committee

4.1   The Parties shall establish a Collaboration Committee ("CC") which shall
      be charged with the management and administration of the Collaboration and
      the promotion, distribution and sale of the Products in the Territory. The
      CC shall have the responsibility to take all decisions as to the marketing
      of the Products, their manufacture and distribution, the approval of the
      Annual Operating Plan

                                       8

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
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      pursuant to Clause 7 and the setting of annual budgets and forecasts for
      the Collaboration and shall have full authority and discretion with
      respect to the management of the Collaboration, subject to (i) the
      authority of the EC in certain matters as set out in Clause 5 and (ii) the
      budget for the first three years of the Collaboration being set out in
      Schedule 4 hereto.

4.2   The CC shall comprise six members of whom three shall be appointed by each
      of Cephalon ("Cephalon Members") and Novartis ("Novartis Members"). The
      initial CC members shall be those persons listed in Schedule 6 Part I.

4.3   A Party may remove any CC Member appointed by it and appoint any person in
      his place. Any appointment or removal shall be in writing signed by the
      appointing Party and shall take effect (unless the appointment or removal
      specifies to the contrary) upon delivery to the other Party of the
      appropriate notice. The Parties shall procure that the persons appointed
      to the CC shall be suitably qualified and experienced to carry out the
      responsibilities thereof as set out herein in a competent and professional
      manner.

4.4   The provisions of this Clause 4.4 shall apply to meetings of the CC:

      4.4.1 No business shall be transacted at any meeting of the CC unless at
            least one member appointed by Cephalon and one member appointed by
            Novartis is present. The Cephalon Members shall collectively have
            one vote and the Novartis Members shall collectively have one vote
            and in the event that the Cephalon Members or the Novartis Members
            shall not agree as to which way to exercise their respective
            collective vote they shall be deemed to have voted against the
            proposed resolution in question;

      4.4.2 A resolution of the CC shall be binding on the Parties if approved
            by the collective vote of the Cephalon Members present and the
            collective vote of the Novartis Members present and reflected in
            minutes of the relevant meeting signed by a Cephalon Member and a
            Novartis Member;

                                       9

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      4.4.3 Meetings of the CC shall take place alternately at premises
            nominated by Cephalon and premises nominated by Novartis. It shall
            be the responsibility of the Party at whose premises a meeting is to
            take place to prepare and issue a notice of meeting, agenda and
            minutes of the meeting and to nominate the Chairman of the meeting;

      4.4.4 Not less than 5 Working Days' notice of any meeting of the CC
            (including a detailed agenda) shall be given to each of the CC
            Members unless such notice is waived by all the CC Members.

4.5   Any CC Member may participate in a meeting of the CC by means of a
      conference telephone, video link or similar communicating equipment
      whereby all persons participating in the meeting can hear each other.
      Resolutions and decisions of the kind normally made or taken at a physical
      meeting of the CC can accordingly be so made or taken in circumstances
      where none or only some of the CC Members are physically present with each
      other. Such a meeting shall be deemed to take place where the largest
      group of those participating is assembled, or, if there is no such group,
      where the chairman of the meeting is.

4.6   A meeting of the CC shall be held on a quarterly basis (unless otherwise
      agreed) for the purpose, without limitation, of:

      (i)   reviewing all financial information and reports provided under
            Clause 7.2 during or in respect of the previous quarterly period or
            in respect of any accounting period terminating at the end of that
            period;

      (ii)  reviewing the cash flow and funding position of the Collaboration
            during such quarterly period and considering, and if thought fit,
            approving any measures necessary for easing any adverse situation in
            the ensuing periods;

      (iii) reviewing and approving the Annual Operating Plan for the
            Collaboration for the following year presented by the Operating
            Committee pursuant to Clause 7.2; and

      (iv)  reporting to the Executive Committee in respect of the above
            matters.

                                       10

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

5. Executive Committee

5.1   The Parties shall establish an Executive Committee ("EC") which shall be
      charged with the strategic and financial matters relating to the
      Collaboration (including consideration of new business opportunities for
      the Collaboration which may be brought to its attention by either Party)
      and the resolution of disputes arising at the CC.

5.2   The EC shall comprise eight (8) members of whom four (4) shall be senior
      personnel of each of Cephalon and Novartis. The initial EC Members shall
      be those persons listed in Schedule 6 Part II.

5.3   The provisions of Clause 4.3 shall apply mutatis mutandis in respect of
      the appointment and removal of EC Members.

5.4   The provisions of Clause 4.4 and 4.5 shall apply mutatis mutandis in
      respect of meetings of the EC.

5.5   A meeting of the EC shall be held on a quarterly basis not more than 15
      (fifteen) Working Days after the corresponding meeting of the CC (unless
      otherwise agreed) for the purpose, without limitation of:-

      (i)   reviewing the report of the preceding meeting of the CC;

      (ii)  determining and reviewing strategy for the Collaboration;

      (iii) reviewing profit calculations of the Collaboration and determining
            upon distributions of Net Profit; and

      (iv)  reviewing and making any adjustments to the Collaboration Plan, the
            Ritalin Terminal Value, the Tegretol Sales Shortfall and the
            Provigil Sales Shortfall calculations (each as referred to in
            Schedule 7) consequent on the review of the then current Annual
            Operating Plan and any other relevant circumstances, provided that
            such adjustments should not impose any additional or increased
            financial obligations on Cephalon.

                                       11

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

6. Disputes

6.1   In the event of a failure of the CC or the EC to agree upon any material
      matter:-

      In the first instance the CC or the EC (as the case may be) shall procure
      the preparation of a report setting out the matter in question and the
      likely consequences to the Collaboration if such matter is on the one hand
      approved or on the other hand rejected. Such report shall be prepared
      within 30 days of the meeting of CC or the EC at which the matter was
      raised and shall be submitted (in the case of the CC) to the EC which
      shall consider such report and attempt to resolve the issue or (in the
      case of the EC) to the Chief Executive officer of Novartis Pharma AG and
      the Chairman/Chief Executive officer of C. Inc (the "Senior Executives").

6.2   In the event that the EC shall fail to resolve a matter referred to it by
      the CC within 60 days of the same being referred to it the matter shall be
      referred to the Senior Executives.

6.3   In the event that the Senior Executives cannot resolve the issue within 60
      days of the same being referred to them, then the same shall be referred
      to an independent mediator to be agreed upon by the Senior Executives, and
      whose terms of reference shall be agreed between the Senior Executives but
      whose recommendations shall in any event be non-binding. In the event that
      the Senior Executives fail to agree upon the identity of such mediator, or
      the terms of reference, or if notwithstanding his services the Senior
      Executives fail to reach agreement the issue shall be referred to
      arbitration under Clause 6.5.

6.4   Whilst ever any dispute at EC level relating to an Annual Operating Plan
      and/or the Collaboration Plan is on going, the provisions of the last
      agreed Annual Operating Plan or the last agreed version of the
      Collaboration Plan as the case may be shall prevail.

6.5   Any dispute which has not been resolved under the preceding provisions of
      this Clause 6 shall be finally settled under the Rules of Arbitration of
      the International

                                       12

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      Chamber of Commerce by a panel of three arbitrators sitting in London
      appointed in accordance with the said rules.

6.6   For the purposes of this Clause it is agreed that each of the
      Collaborators shall have a veto in regard to any proposal put to the CC or
      the EC which in either Party's reasonable opinion would have a materially
      adverse effect either (i) on that Collaborator's other commercial
      activities outside the Collaboration or (ii) in respect of the long term
      value of that Collaborator's Products. The exercise of such veto (provided
      that the same is exercised within 30 days of the proposal in question
      being put forward to the CC or the EC (as the case maybe)) shall not
      constitute a failure to agree for the purposes of this Clause 6.

7. Operating Committee

7.1   The Parties shall establish an Operating Committee ("OC") (comprising
      persons nominated by Cephalon from time to time together with assistance
      from appropriate persons to be made available by Novartis at the
      reasonable request of Cephalon from time to time) which shall have the day
      to day operational responsibility for the Collaboration, including without
      limitation forecasting and ordering requests in accordance with the
      forecasting and ordering procedures of each party, and in accordance with
      the current Collaboration Plan approved by the CC or otherwise in
      accordance with the directions of the CC.

7.2   The OC shall deliver to the CC for approval not later than September 30 in
      each year a draft Annual Operating Plan for the forthcoming calendar year
      of the Collaboration covering, among other things, projections and budgets
      with respect to sales, operational and capital expenditure, and
      promotional and marketing plans, Provided that in respect of the first
      three years of operation of the Collaboration the CC shall be empowered
      only to increase (and not to decrease) any costs shown in the budget of
      the Collaboration above those set out the Collaboration Plan.

                                       13

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

7.3   The OC shall present to the CC for each quarterly meeting a report on the
      financial position of the Collaboration and its performance against the
      Annual Operating Plan.

7.4   The Parties shall procure that the persons comprising the OC shall be
      suitably qualified to carry out the responsibilities thereof as set out
      herein in a competent and professional manner.

8.    Finance and Accounting Matters

8.1   It is agreed that:

      8.1.1 Novartis shall develop and keep separate books of account relating
            to its distribution of the Products in the Territory for the
            Collaboration which shall be available for inspection by Cephalon at
            all reasonable times upon request. Such books of account shall be
            maintained in accordance with IAS. Novartis shall make available all
            relevant financial and operational information to the OC, CC and the
            EC for the purposes of enabling them to carry out their functions.
            Cephalon shall make available all financial and operational
            information of Cephalon necessary to enable Novartis to carry out
            its obligations under this Clause.

      8.1.2 Upon Cephalon's written request a firm of accountants appointed by
            agreement between the Parties or, failing such agreement with [**]
            Working Days of the initiation of discussions between them on this
            point and at the request of either Party by the President for the
            time being of the Institute of Chartered Accountants of England and
            Wales in London and

            (a)   such firm of accountants shall be given access to and shall be
                  permitted to examine and copy such books and records upon [**]
                  Working Days' notice having been given by Cephalon and at all
                  reasonable times on Working Days for the purpose of certifying
                  to Cephalon that the Net Profit calculated by Novartis

                                       14

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                  during any year was reasonably calculated, true and accurate
                  or, if this is not their opinion certify the Net Profit
                  figures for such period which in their judgment are true and
                  correct.

            (b)   prior to any such examination taking place, such firm of
                  accountants shall undertake to Novartis in a deed that they
                  shall keep all information and data contained in such books
                  and records, strictly confidential and shall not disclose such
                  information or copies of such books and records to any other
                  person including Cephalon, but shall only use the same for the
                  purpose of the calculations which they need to perform in
                  order to issue the certificate to Cephalon which this Clause
                  8.1.2 envisages.

            (c)   any such access examination and certification shall occur no
                  more than once per year and will not go back over records more
                  than [**] old unless a discrepancy is found.

            (d)   Novartis shall make available personnel to answer queries on
                  all books and records required for the purpose of that
                  certification.

            (e)   the cost of the accountant shall be the responsibility of
                  Novartis if the certification shows Novartis to have
                  underestimated the Net Profit payable to Cephalon by more than
                  [**] and the responsibility of Cephalon otherwise.

      8.1.3 Within [**] 10 Working Days following such certification any monies
            which such certification shows as being due and owing by one Party
            to the other (whether because of an underpayment or overpayment)
            shall be paid by that Party.

8.2   The Net Profit of the Collaboration and allocation thereof shall be
      calculated on an estimated interim basis as at the last day of March, June
      and September in each year and a final calculation in respect of each
      calendar year shall be made as at the last

                                       15

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      day of December. The method of calculation (including definition of
      allowable revenues and costs) and allocation of Net Profit shall be as set
      out in Schedule 1. Such calculation shall be prepared by Novartis and
      submitted to the Executive Committee.

8.3   Any interim allocation of Net Profit to either Party shall paid within 20
      (twenty) Working Days of the end of the quarter in question subject to the
      provisions of Clause 12.2 Any adjustment to be made following the year end
      reconciliation and audit shall be made to the payment to be made at the
      end of the next quarter.

9.    Supply of Product

      The Parties shall procure that sufficient Product of suitable quality is
      supplied to the Collaboration in a timely manner to enable the
      Collaboration to operate in accordance with the relevant Annual Operating
      Plan.

10.   Warranties

10.1  NAG hereby represents and warrants to C. Inc that at the date of this
      Agreement:

      10.1.1    Novartis has the full legal right to enter into the
                Collaboration Agreements and to perform its obligations
                thereunder. The Collaboration Agreements being duly executed and
                delivered by Novartis, constitute a legal, valid and binding
                obligation, enforceable against Novartis in accordance with
                their respective terms.

      10.1.2    Novartis has obtained and will continue to maintain (save for
                any reason beyond its control) during the term of this Agreement
                all necessary notices, consents, approvals, Regulatory Approvals
                and authorisations of all Governmental and Regulatory
                Authorities and other parties, required in connection with its
                entering into and performing the Collaboration Agreements.

                                       16

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      10.1.3    The execution and delivery of the Collaboration Agreements and
                the performance of Novartis' obligations thereunder to NAG's
                best knowledge and belief (i) do not conflict with or violate
                any requirement of applicable laws or regulations, (ii) do not
                conflict with, or constitute a default under, any contractual or
                other obligation of Novartis and (iii) will not infringe the
                Rights of any third party.

      10.1.4    Novartis has not granted to any third party any sub-licence or
                other interest of any kind (including any charge, lien or
                encumbrance) in respect of the Novartis Product which would
                affect Cephalon's rights under the Collaboration Agreements.

      10.2      C. Inc hereby represents and warrants to NAG that at the date of
                this Agreement:

      10.2.1    Cephalon has the full legal right to enter into the
                Collaboration Agreements and to perform its obligations
                thereunder. Each of the Collaboration Agreements, being duly
                executed and delivered by Cephalon, constitutes a legal, valid
                and binding obligation, enforceable against Cephalon in
                accordance with their respective terms.

      10.2.2    Cephalon has obtained and will continue to maintain during the
                Term of this Agreement all necessary notices, consents,
                approvals and authorisations of all Governmental and Regulatory
                Authorities and other parties required in connection with its
                entering into and performing the Collaboration Agreements.

      10.2.3    The execution and delivery of the Collaboration Agreements and
                the performance of Cephalon's obligations thereunder to C. Inc's
                best knowledge and belief (i) do not conflict with or violate
                any requirement of applicable laws or regulations, (ii) do not
                conflict with, or constitute a default under, any contractual or
                other obligation of Cephalon and (iii) will not infringe the
                Rights of any third party.

                                       17

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      10.2.4    Cephalon has not granted to any third party any sub-licence or
                their interest of any kind (including any charge lien or
                encumbrance) in respect of the Cephalon Products which would
                affect Novartis' rights under the Collaboration Agreements.

11.   Indemnity

11.1  Each Party (the "Indemnifying Party") agrees to indemnify, defend, and
      hold harmless the other Party, such other Party's Affiliates and their
      respective officers, directors, employees, agents and representatives (the
      "Indemnitees"), from and against any and all claims, damages, losses,
      liabilities, penalties and expenses (including without limitation
      reasonable attorneys' fees and expenses) (collectively, "Liabilities") to
      the extent resulting from or arising out of any breach of the
      representations or warranties as set out in Clause 10.1 in the case of
      Novartis and Clause 10.2 in the case of Cephalon, or non-fulfilment of or
      failure to perform or other breach of any covenant or agreement made by
      the Indemnifying Party or any of its Affiliates pursuant to the
      Collaboration Agreements; provided that (a) any such Liabilities are not
      caused by the negligence or misconduct of the Indemnitees; (b) the
      Indemnitee gives the Indemnifying Party prompt written notice as soon as
      practicable of any such Liabilities; (c) the Indemnitee co-operates fully
      with the Indemnifying Party and its legal representatives in the defence
      of any and all such Liabilities; and (d) the Indemnitee agrees to the
      complete control of the settlement and defence of such Liabilities by
      Indemnifying Party. Subject to the provisions of Clause 11.2, neither
      Party nor its Affiliates shall be liable to the other Party or its
      Affiliates for incidental special, consequential or punitive damages,
      including without limitation, any claims for damages based upon lost
      revenues or profits, however caused or any theory of liability.

11.2  If the Collaboration is terminated by reason of a fundamental breach of
      its terms by either Party in circumstance where the conduct of such party
      (including, without limitation, the continued promotion, marketing and
      selling by such Party of its Products in the Territory after such
      termination; or the disposal by that Party, of any of its Products in the
      Territory to third parties) is indicative of its wilful

                                       18

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      abandonment of the Collaboration then such Party (the "Breaching Party")
      shall pay to the other Party (the "Innocent Party") by way of liquidated
      damages a sum equal to the value at the date of termination of the share
      of Net Profit attributable to the Products of the Breaching Party which
      the Innocent Party would have received from the date of termination to the
      end of the Term calculated by reference to the Collaboration Plan as it
      stands at the date of termination, adjusted if appropriate to take account
      of:

            (a)   any payment or repayment under Schedule 7 which might be
                  payable by reason of such termination or might but for such
                  termination have become payable subsequently;

            (b)   any payments made or withheld in accordance with Clause 12;
                  and

            (c)   any other sums which are due from one Party to the other
                  pursuant to the Collaboration Agreements.

11.3  If any claim against either Party, its Affiliates, recognised distributors
      or agents (the "Indemnified Party") is brought by reason of the fact that
      any Product belonging to the other Party (Cephalon Products where Novartis
      is the Indemnified Party and Novartis Products where Cephalon is the
      Indemnified Party) has caused illness, death or bodily injury, then,
      unless such claim is a result solely of the gross negligence or misconduct
      of the Indemnified Party, NAG or C.Inc (as the case may be) shall
      indemnify the other and its Affiliates for any and all liabilities,
      claims, damages and costs incurred or suffered by the other Party or its
      Affiliates or recognised distributors, and for any and all other
      liabilities, claims, damages and costs suffered by such Party or its
      Affiliates, as a result of any associated Product recall, final packaging
      and similar costs associated with such Product. Such indemnity will
      include the reimbursement of the legal expenses reasonably incurred in
      contesting or defending such claim.

11.4  Each Party shall give the other Party prompt written notice of any claim
      or threat of claim it receives with respect to any matter for which it or
      its Affiliates may be

                                       19

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      entitled to indemnification, and the indemnifying Party shall thereafter
      defend or settle any such claim at its sole expense, and with counsel
      selected by the indemnifying Party and reasonably acceptable to the
      Indemnified Party. In the defence or settlement of any such claim, the
      Indemnified Party shall cooperate with and assist the indemnifying Party
      to the extent reasonably possible, but the indemnifying Party shall bear
      and pay any and all expenses incurred by the Indemnified Party in
      providing such cooperation and assistance, either directly or upon request
      of the Indemnified Party who has incurred such expense. Failure to give
      notice shall not constitute a defence, in whole or in part, to any claim
      by the Indemnified Party hereunder except to the extent the rights of the
      indemnifying Party are materially prejudiced by such failure to give
      notice.

12.   Special Payments

      Licence Fee

12.1  Payment for the Licence to the Novartis Products as referred to in Clause
      6 of the Licence Agreement of even date shall be made by way of 3 (three)
      equal payments of [**], payable on 1 January 2001, 31 December 2001 ( "the
      Second Payment"), 31 December 2002 ("the Third Payment"), subject to the
      provision of Clause 12.2.5 regarding Cephalon's right to settle the
      obligation early.

12.2  Provided termination of the Collaboration has not occurred in accordance
      with the provisions of Clause 14 then the following provisions shall
      apply:

      12.2.1    If Cephalon fails to make any of the payments payable in
                accordance with Clause 12.1 within [**] Working Days of the due
                date then Novartis shall give notice to Cephalon of such failure
                at any time thereafter. If Cephalon shall fail to remedy such
                failure within [**] Working Days of receiving such notice then,
                without prejudice to any other claims or actions Novartis may
                have accrued against Cephalon, whether under this Agreement or
                otherwise, this Agreement will terminate and all of Cephalon's
                rights granted under the Collaboration Agreements shall
                terminate forthwith;

                                       20

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      12.2.2    Until either the Second Payment has been made, or Cephalon pays
                the full amount outstanding pursuant to Clause 12.2.5 prior to
                the Second Payment falling due, the payments due to Cephalon
                pursuant to Clauses 8.2 and 8.3 and any payments due to Cephalon
                under the Managed Services Agreement in the first year following
                the Commencement Date will be withheld by Novartis until either
                the Second Payment has been made (whereupon the withheld amounts
                will be immediately paid to Cephalon), or Cephalon repays the
                agreed full amount pursuant to Clause 12.2.5 (whereupon the
                total amount withheld will be offset against the agreed
                settlement amount to arrive at the amount payable by Cephalon).

      12.2.3    Provided that Cephalon has not exercised its right under Clause
                12.2.5 during the first year following Commencement Date, then
                if Cephalon fails to pay the Second Payment within [**] Working
                Days of the due date, Novartis shall give notice to Cephalon of
                such failure at any time thereafter. If Cephalon shall fail to
                remedy such failure within [**] Working Days of receiving such
                notice then Novartis shall be entitled to retain all payments of
                Net Profit under Clauses 8.2 and 8.3 and any other payments due
                to Cephalon pursuant to the Managed Services Agreement.

      12.2.4    The provisions of sub-Clauses 12.2.2 and 12.2.3 shall apply
                mutatis mutandis to the profit and payments payable in the
                second year following the Commencement Date and the Third
                Payment, provided however, that if the aggregate amount of
                payments due to Cephalon pursuant to Clauses 8.2 and 8.3 and the
                other sums payable to Cephalon under the Managed Services
                Agreement and/or paid under the Distribution Agreement during
                the second year following the Commencement Date reaches [**],
                Novartis shall be entitled to retain the amounts payable in
                respect of Net Profits due to Cephalon and amounts payable under
                the Managed Service Agreement at the date [**] is reached unless
                and until either the Third Payment is made or Cephalon pays the
                agreed full amount outstanding prior to the due date of the
                Third Payment pursuant to Clause 12.2.5, but

                                       21

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                shall pay to Cephalon any Net Profit or other payments due
                under the Managed Services Agreement in excess of the amounts
                so retained accruing after the date the [**] as referred to
                above is reached.

      12.2.5    Cephalon shall have the right and option to repay to Novartis at
                any time during the first two years following the Commencement
                Date an amount which represents full and final settlement of the
                remaining outstanding Licence fee. The method of assessing the
                amount to be paid by Cephalon to Novartis is illustrated in
                Schedule 8, and the interest rate that is to be applied to the
                amount of liability assessed as being outstanding at the end of
                each month is fixed (ie agreed) at 1.88% per month.

12.3  Ritalin

      Cephalon hereby undertakes to Novartis to make certain payments in respect
      of Ritalin in the circumstances and in accordance with the formula set out
      in Schedule 7 Part I.

12.4  Tegretol

      Cephalon hereby undertakes to Novartis to make certain payments in respect
      of Tegretol in the circumstances and in accordance with the formula set
      out in Schedule 7 Part II.

12.5  The Cephalon Product Adjustment Payment

      Cephalon hereby undertakes to Novartis to make certain payments in respect
      of the Cephalon Product in the circumstances and in accordance with the
      formula set out in Schedule 7 Part III.

                                       22

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

13.   Force Majeure

13.1  If a Party (the "Non-Performing Party") is unable to carry out any of its
      obligations under the Collaboration Agreements due to Force Majeure this
      Agreement shall remain in effect but:-

      13.1.1    the Non-Performing Party's relevant obligations under the
                relevant Collaboration Agreement; and

      13.1.2    the relevant obligations of the other Party ("the Innocent
                Party") under the relevant Collaboration Agreement,

                shall be suspended for a period equal to the circumstance of
                Force Majeure or [**] whichever is the shorter provided that:-

                (a)   the suspension of performance is of no greater scope
                      than is required by the Force Majeure;

                (b)   the Non-Performing Party gives the Innocent Party prompt
                      notice describing the circumstances of Force Majeure,
                      including the nature of the occurrence and its expected
                      duration, and continues to furnish regular reports
                      during the period of Force Majeure;

                (c)   the Non-Performing Party uses all reasonable efforts to
                      remedy its inability to perform and to mitigate the
                      effects of the circumstances of Force Majeure; and

                (d)   as soon as practicable after the event which constitutes
                      Force Majeure the Parties discuss how best to continue
                      their operations as far as possible in accordance with
                      the Collaboration Agreements.

                                       23

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

14.   Term and Termination

14.1  This Agreement shall commence on the Commencement Date and continue for
      the Term unless otherwise terminated in accordance with this clause 14.

14.2  If any decision of any Governmental or Regulatory Authority results in the
      inability to continue effectively to commercialise any Cephalon Product in
      the Territory or if Cephalon shall dispose of or abandon the Cephalon
      Product the Parties shall negotiate in good faith with a view to agreeing
      appropriate amendments to the Collaboration Agreements to reflect such
      development including without limitation, the making of any payment or the
      amendment of any payment obligation thereunder. If such negotiations shall
      not result in agreement being reached within [**] of the event in question
      Novartis shall be entitled to terminate this Agreement immediately upon
      the expiry of such period.

14.3  If any decision of any Governmental or Regulatory Authority results in the
      inability to continue effectively to commercialise any Novartis Product in
      the Territory or if Novartis shall dispose of or abandon any Novartis
      Product in respect of the Territory the Parties shall negotiate in good
      faith with a view to agreeing appropriate amendments to the Collaboration
      Agreements to reflect such development including without limitation, the
      making of any payment or the amendment of any payment obligation
      thereunder. If such negotiations shall not result in agreement being
      reached within [**] of the event in question Cephalon shall be
      entitled to terminate this Agreement immediately upon the expiry of such
      period.

14.4  Either Party may terminate this Agreement on 30 days' written notice to
      the other if (i) Control of the other or of any of its Controllers shall
      pass from the present shareholders or owners or Controllers to other
      persons or (ii) the other Party shall cease to control any Affiliate
      relevant to the Collaboration.

14.5  Without prejudice to any right or remedy that either Party may have
      against the other for breach or non-performance of this Agreement either
      Party shall have the right to terminate this Agreement immediately:

                                       24

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      14.5.1 on the other Party committing a breach of any of the provisions of
             any of the Collaboration Agreements providing that (where the
             breach is capable of rectification) the Party in breach has been
             advised in writing of the breach and has not rectified it within
             thirty days of receipt of such advice; or

      14.5.2 if an Insolvency Event occurs in relation to the other Party.

14.6  Upon termination of this Agreement for any cause whatsoever the Licence
      Agreement, the Managed Services Agreement and the Distribution Agreement
      shall terminate.

14.7  Termination of this Agreement for whatever reason shall not affect the
      accrued rights of the Parties arising in any way out of this Agreement as
      at the date of termination including without limitation the right to
      recover damages against the other and all provisions which are expressed
      to survive this Agreement shall remain in full force and effect.

14.8  Subject to the provisions of 12.1 and 12.2 in the event of the termination
      of this Agreement the provisions of Schedule 7 Part IV shall apply to
      determine whether any payment shall be due by Novartis to Cephalon by way
      of reimbursement of all or part of the payment made by Cephalon under
      Clause 12.1 hereof.

15.   Confidential information

15.1  Each Party shall treat (both during and after the subsistence of this
      Agreement) as confidential all know-how and confidential information of
      the other including, without limitation, all information and data in
      respect of the Products supplied or made available by or on behalf of
      either Party, and details of trade prices at which the Products are sold
      between the Parties or between Affiliates of either of them (the
      "Confidential Information") and neither Party shall without the prior
      written consent of the other:

                                       25

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      15.1.1 exploit any part of the Confidential Information save as is
             reasonably necessary to enable it to perform its obligations under
             the Agreement;

      15.1.2 disclose any part of the Confidential Information (other than to
             Regulatory Authorities who require the same where the Party
             concerned is legally obliged to disclose the same or entitled to do
             so under this Agreement) or to its employees or customers (or
             potential customers) who need to know the Confidential Information
             for the purpose of performing their Agreements provided that:

            (a)   such person is made aware prior to disclosure of the
                  proprietary and confidential nature of the Confidential
                  Information; and

            (b)   such person owes an express duty of confidence to the
                  Disclosing Party which the Disclosing Party shall fully
                  enforce.

16.     Competition Restrictions

16.1    Neither of the Parties shall at any time during the subsistence of
        the Collaboration (subject to a maximum period of [**] from the date
        hereof) do or permit any of its Affiliates to do (and whether alone
        or jointly with others or whether as principal, agent, shareholder or
        otherwise and whether for its own benefit or that of others) any of
        the following in the Territory without the prior written consent of
        the other Party:-

        16.1.1  directly or indirectly carry on or be engaged, concerned or
                interested (except in relation to Ritalin, and as the holder for
                investment of shares amounting in aggregate to less than 3
                percent of the share capital quoted or dealt in on a recognised
                stock exchange) in the manufacture, distribution or sale of
                products which compete with, and/or are essentially similar to,
                the Cephalon Product, where "compete with" means licensed for
                the treatment of narcolepsy, fatigue associated with multiple
                sclerosis, attention deficit hyperactivity disorder or sleep
                apnoeia and "essentially similar" means products which contain
                the same active pharmaceutical

                                       26

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                ingredient(s) including, but not limited to, any isomers or
                derivatives thereof, as the relevant Product;

       16.1.2   solicit the custom of any person in the Territory who is or has
                been at any time during the term of this agreement a customer of
                the Collaboration for the purpose of offering to such customer
                goods or services similar to or competing with those of the
                Collaboration.

16.2  In the event that either Party or any of their respective Affiliates shall
      become licensee or distributor of or enter into similar arrangements
      regarding any product which (i) competes with the Cephalon Product, or
      (ii) competes with and is essentially similar to the Novartis Products (in
      this Clause 16.2 "competes with " shall mean has the same therapuetic
      effect as and "essentially similar" shall be as defined in 16.1.1) that
      Party will, if permitted by the terms of the relevant arrangement, enter
      into good faith discussions with the other Party as to the possibility of
      such product being made part of the Collaboration. If the terms of the
      relevant arrangement do not permit for the relevant product to be made
      part of the Collaboration or the Parties fail to agree upon principal
      business terms [**] of the commencement of such discussions, the Parties
      shall negotiate in good time the appropriate adjustments to the payments
      made under Clause 12 hereof and/or the allocation of Net Profit of the
      Collaboration.

16.3  For the duration of this Agreement and for [**] thereafter neither Party
      shall and shall procure that its Affiliates shall not solicit, entice or
      offer employment to any member of Staff employed by the other Party or any
      of its Affiliates without the express written consent of the other Party
      except where such employee is recruited as a result of an otherwise
      unsolicited response to a public recruitment advertisement.

17. Medical Information and Reporting

17.1  Novartis agrees in respect of Novartis Products and Cephalon Products to
      comply with Novartis' and Cephalon's standard operating procedures
      ("SOPs")

                                       27

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      respectively in respect of adverse events and product recall, supply of
      medical information and other similar or associated matters and Cephalon
      shall provide such SOPs in respect of Cephalon Products to Novartis from
      time to time.

17.2  In addition to the requirements of Clause 17.1 each Party agrees to inform
      the other Party and keep it informed within 48 hours of notification of
      any action by, or notification or other information which it receives
      (directly or indirectly) from any Governmental or Regulatory Authority,
      which (a) raises any material concerns regarding the safety or efficacy of
      any Product, (b) which indicates or suggests a potential material
      liability for either Party to third parties arising in connection with any
      Product, or (c) which is reasonably, likely to lead to a recall of any
      Product, including in all cases, but not limited to:

      (i)   Governmental or Regulatory Authority inspections of manufacturing,
            distribution of other related facilities, in which Product is
            manufactured, stored or otherwise present;

      (ii)  receipt of a warning letter from any Governmental or Regulatory
            Authority relating to any Product; or

      (iii) on initiation of any Governmental or Regulatory Authority
            investigations, detention, seizure or injunction concerning any
            Product.

17.3  Where either Party proposes to provide information, data or documentation
      to any Governmental or Regulatory Authority in respect of or relating to
      any of the Products, it shall, unless otherwise required by law, first
      obtain the prior written consent of Cephalon (in the case of Cephalon
      Products) and Novartis (in the case of the Novartis Products).

18.   Notices

18.1  Any notice to be given in connection with this Agreement shall be in
      writing and shall be deemed duly served if delivered personally or sent by
      first class or recorded delivery post or by facsimile to the Company
      Secretary at the address of the Party

                                       28

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      concerned which is set out in this Agreement or as may be notified to the
      other Party in accordance with the provisions of this Clause. Any notices
      which are sent by e-mail shall not be valid unless and until confirmed by
      personal delivery, first class or recorded delivery post or by facsimile.

      Any such notice shall be deemed to be served:

      18.1.1  if delivered personally, on the day on which it is delivered;

      18.1.2  if sent by post, 5 Business Days after the time of posting;

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

19.   Relationship of Parties

19.1  This Agreement shall not permit or authorise either Party to:

      19.1.1  incur any expenses on behalf of the other Party;

      19.1.2  enter into any commitment or make any representation or warranty
              on behalf of the other Party;

      19.1.3  pledge the credit of, or otherwise bind or oblige the other Party;
              or

      19.1.4  commit the other Party in any way whatsoever

      without in each case obtaining the other Party's prior written consent.

20.   Waiver

      In no event shall any delay, failure or omission on the part of any Party
      in enforcing, exercising or pursuing any right, power, privilege, claim or
      remedy, which is conferred by this Agreement, or arises under this
      Agreement, or arises

                                       29

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      from any breach by the other Party to this Agreement of any of its
      obligations under this Agreement, be deemed to be or be construed as:

      20.1.1  a waiver thereof, or of any other such right power privilege
              claim or remedy, in respect of the particular circumstances in
              question; or

      20.1.2  operate so as to bar the enforcement or exercise thereof, or of
              any other such right, power, privilege, claim or remedy, in any
              other instance at any time or times afterwards.

21.   Severability

      Any provision of this Agreement which is held invalid or unenforceable in
      any jurisdiction shall be ineffective to the extent of such invalidity or
      unenforceability without invalidating or rendering unenforceable the
      remaining provisions hereof, and any such invalidity or unenforceability
      in any jurisdiction shall not invalidate or render unenforceable such
      provisions in any other jurisdiction

22.   Third Party Rights

      Save for the provisions of Clauses 2.2, 2.3, 2.4 and Clause 11 nothing in
      this Agreement is intended to confer on any person any right to enforce
      any term of this Agreement which that person would not have had but for
      the Contracts (Rights of Third Parties) Act 1999.

23.   Governing Law

      This Agreement is governed by and shall be construed in accordance with
      the laws of England and the Parties hereby submit to the non-exclusive
      jurisdiction of the English Courts.

                                       30

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

24.   Transmission of Rights

      Neither Party shall assign the benefit and/or the burden of this Agreement
      to any third party without the prior written consent of the other.

25.   Whole Agreement

25.1  This Agreement together with the other Collaboration Agreements shall
      supersede any and all promises, representations, warranties or other
      statements whether written or oral, made by or on behalf of a Party to
      another of any nature whatsoever or contained in any leaflet, brochure or
      other document given by a Party to another concerning such subject matter.

25.2  No provision contained in this Clause, or elsewhere in this Agreement or
      the other Collaboration Agreements, shall operate so as to exclude any
      liability of any Party in respect of a fraudulent misrepresentation made
      by that Party to another, or to restrict or exclude any remedy which the
      other Party may have in respect of such misrepresentation.

26.   Variations

      Except as provided herein, this Agreement may not be amended, varied or
      modified except in writing signed by a duly authorised officer or
      representative of each of the Parties.

27.   Costs

      The Parties shall bear their own legal accounting and other costs and
      expenses incurred in connection with the preparation of the Collaboration
      Agreements.

28.   Publicity

      Each Party agrees that, except as may be required by law or regulation, it
      shall not disclose the existence, substance or details of this Agreement
      without the prior

                                       31

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      written consent of the other Party. In cases in which disclosure is
      proposed or required by law, the disclosing Party, prior to such
      disclosure, will notify the non-disclosing Party of the contents of the
      proposed disclosure, provided however, that subsequent disclosure(s) of
      the same or substantially similar contents shall not require further
      consent. The non-disclosing Party shall have the right to make reasonable
      changes to the disclosure to protect its interests, such changes to be
      notified to the disclosing Party within five Working Days. The disclosing
      Party shall not unreasonably refuse to include such changes in its
      disclosure. The Parties will agree upon the text of a joint announcement
      of this Agreement and, once agreed, the information contained in that
      announcement may be used by either Party in subsequent announcements.

29.   Counterparts

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

                                       32

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year first before written.

SIGNED by                                 )
for and on behalf of                      ) J. Kevin Buchi
CEPHALON INC                              )
in the presence of:                       )

Mary Lou Geis

SIGNED by                                 )
for and on behalf of                      ) George Miller
NOVARTIS AG                               ) Reto Wittwer
in the presence of:                       ) Marianne Lysser

Sally J Shorthose

                                       33

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 1

               Calculation and Allocation of Collaboration Profits

[**]

This profit will be allocated between the Parties as follows:

      Attributable to Novartis                  [**]

      Attributable to Cephalon                  [**]

Once the overall profit has been ascertained and allocated, account needs to be
taken of profit already taken by each Party via the following means:

1.    The transfer price of the Products between Affiliates of each Party
      (adjusted downward to account for stocks held of Collaboration Products at
      the end of each period of assessment)

2.    The profit realised by Cephalon under the Distribution Agreement (adjusted
      downward to account for stocks of Cephalon Products held by Novartis at
      the end of each period of assessment)

3.    The profit realised by Cephalon under the Managed Services Agreement

If the profit realised by Cephalon under points 1 to 3 above exceeds its total
allocated profit under the collaboration, Cephalon will pay the excess amount to
Novartis. If the profit realised by Cephalon under points 1 to 3 above is less
than its total allocated profit under the collaboration, Novartis will pay the
amount of this deficit to Cephalon.

This calculation will be done on a quarterly basis during each calendar year
based on unaudited and where necessary on estimated information, with a final
annual full year calculation based on independently audited and accurate
information.

In ascertaining profits and allocations, no account will to be taken for the
time-value of money or the effect of uneven cashflows arising between the
parties.

Net Profit shall be calculated in sterling.

                                       34

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

[**]

                                       35

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 2

                                  The Products

Part I - Cephalon Product

Brand Name/Active Ingredient    Pack Size (SKU)        NHS Supply Price

PROVIGIL/modafanil              100mg tabs - 30        (pounds)60.00

Part II - Novartis Products

Trademark/Active Ingredient     Pack Size (SKU)        NHS Supply Price (pounds)

ANAFRANIL - clomipramine
hydrochloride                   10mg caps - 84         2.75

                                25mg caps - 84         5.40

                                50mg caps - 56         6.85

ANAFRANIL SR                    75mg tab - 28          7.51

ANAFRANIL SYRUP                 25mg/5ml - 150ml       7.23

ANAFRANIL INJECTION             25mg/2ml amp - 10      4.70

LIORESAL - baclofen             10mg tab - 84          9.03

LIORESAL LIQUID                 5mg/5ml - 300ml        7.46

(save for sales for use in
intrathecal pumps)

RITALIN - methylphenidate       10mg tab - 30          5.57

                                       36

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

TEGRETOL - carbamazepine        100mg tab - 84         2.43

                                200mg tab - 84         4.50

                                400mg tab - 56         5.90

TEGRETOL CHEWTAB                100mg - 56             2.95

                                200mg - 56             5.49

TEGRETOL RETARD                 200mg - 56             4.82

                                400mg - 56             9.48

TEGRETOL LIQUID                 100mg/5ml - 300ml      5.72

TEGRETOL SUPPS                  125mg - 5              7.50

                                250mg - 5              10.00

The Products shall include essentially similar products, where "essentially
similar" has the same meaning as defined in Clause 16.1.1 of this Agreement.

                                       37

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 3

                                   Trade Marks

                                             Registered
   Novartis Product      Territory  Class    number       Valid until

   ANAFRANIL             UK         5        884607       2010

   LIORESAL              UK         5        853707       2008

   RITALIN               UK         5        669833       2007

   TEGRETOL              UK         5        831335       2007

                                             Registered
   Cephalon Product      Territory  Class    number       Valid until

   PROVIGIL              UK         5        1566855      2005

                                       38

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 4

                      Collaboration Plan (in (pounds)'000)

                                      YEAR
[**]

                                       39

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 5

                  Supply and Distribution of Novartis Products.
Part I

1. Definition and interpretation

1.1   The following terms shall have the following meanings in this Schedule and
      all other defined terms shall have the definitions ascribed to them in the
      Collaboration Agreement:

      "Adverse Reaction" means a response to a substance that is noxious and
      unintended and which occurs at doses normally used in man for prophylaxis,
      diagnosis and therapy;

      "End Users" means customers who are not reselling the Products to third
      parties;

      "Good Distribution Practice" or "GDP" means the regulatory standards and
      principles and guidelines of good distribution practice as in force from
      time to time relating to the warehousing, storage and physical
      distribution of medicinal products established by the applicable
      Governmental or Regulatory Authority including, without limitation, the
      Guidelines on Good Distribution Practice of Medicinal Products for Human
      Use published by the European Commission, as the same may be amended from
      time to time;

      "Products" means the Products listed in Part II together with such
      additions as the Parties may agree in writing;

                                       40

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      "Specification" means the specification for a Product set out in the
      relevant Product Licence;

      "Trademarks" means the trademarks relating to the Products listed in Part
      III.

2.    Licence

      Cephalon hereby grants Novartis the right to sell, promote, market and
      distribute the Products under the Trademarks and Product Licences in the
      Territory. 3. Appointment as Distributor

3.1   C. Inc hereby appoints NAG with effect from the Commencement Date as its
      supplier and distributor of the Products in the Territory on and subject
      to the terms and conditions of this Agreement.

3.2   Novartis shall supply Products in accordance with the terms of Clause 9 of
      the Collaboration Agreement.

3.3   NAG shall be entitled to carry out any of its obligations hereunder
      through any of its Affiliates.

3.4   Novartis shall be responsible for obtaining payment in respect of all
      sales made of Product in the Territory.

3.5   Cephalon will not appoint in the Territory any other distributor or
      reseller of the Product nor will it directly supply for its own account
      any Product to distributors, resellers or End Users located within the
      Territory.

3.6   The provisions of Clause 3.5 shall terminate on the fifth anniversary of
      the Commencement Date unless expressly renewed by the Parties.

3.7   Payment for the provision of the supply and distribution services shall be
      provided for in the Collaboration Agreement.

                                       41

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

4.    Novartis' Obligations

4.1   Novartis shall perform its obligations hereunder as principal. Except as
      provided in this Schedule 5, it shall not otherwise dispose of the
      Products within the Territory, and shall not sell the Products within the
      Territory on behalf of, or in the name of, Cephalon.

4.2   Novartis shall not during the Term do anything which may prevent the sale,
      or interfere with the development of, sales of the Products in the
      Territory or which may adversely affect the quality of the Products.

4.3   Novartis shall maintain sufficient resources (either its own employees or
      through permitted subcontracts) in order to perform in a timely and
      satisfactory manner its obligations under this Agreement in respect of the
      Products throughout the Territory.

4.4   Novartis shall supply the Product in packaging which incorporates any
      information that may be required by the relevant Product Licence, any
      Governmental or regulatory authority or any applicable law, rule or
      regulation from time to time.

4.5   Novartis shall obtain and maintain at its own cost and expense all
      necessary permissions, consents and licences to enable it to carry out its
      obligations hereunder in the Territory and to ensure the full and legal
      operation of this Agreement.

4.6   Novartis shall keep Cephalon informed in writing of respect of any
      complaint, claim, demand or dispute concerning the Products in the
      Territory.

4.7   Novartis agrees during the Term to comply with, and not to take any action
      which would be subject to penalty under, all laws, rules and regulations
      applicable to this Agreement in the Territory, and to conduct its business
      in accordance with all applicable ethical business practices and Good
      Distribution Practice.

4.8   Novartis undertakes during the Term that it will not copy, produce, make,
      modify or manufacture or assist any other party to copy, produce, make or
      manufacture the

                                       42

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      Products or any part thereof for use, sale, or any other purpose inside
      the Territory. Provided that the provisions of this Clause 4.8 shall
      terminate after five years following the Commencement Date unless renewed
      by agreement between the Parties.

4.9   Novartis undertakes during the Term to store the Products in accordance
      with the terms of the Product Licences and GDP under conditions that will
      prevent deterioration of the Products. Novartis agrees to allow Cephalon
      or its authorised representative to inspect the Products when in storage
      under the control of Novartis from time to time upon reasonable notice.

4.10  Novartis shall advise Cephalon within 48 hours of any reported Adverse
      Reaction occurring in the Territory and reported to Novartis in respect of
      the Products. Novartis shall have sole responsibility for reporting
      Adverse Reactions to the Medicines Control Agency and will conduct all
      communication relating to safety issues.

4.11  Novartis shall be responsible for reporting any Adverse Reaction relating
      to the Products to the health authorities in the Territory in accordance
      with the applicable legal requirements.

4.12  Novartis shall provide Cephalon with copies of the periodic safety update
      reports (if any) on Adverse Reactions and update requirements and
      recommendations as to the best use of the Products.

4.13  Novartis shall be responsible for entering all Adverse Reactions to the
      Products into their global Adverse Reactions database. This information
      will be available for analysis and comment if required in relation to any
      emerging safety issue in relation to the Products.

4.14  Novartis agrees to inform Cephalon and keep it informed within 48 hours of
      notification of any action by, or notification or other information which
      it receives (directly or indirectly) from any Governmental or Regulatory
      Authority, which (a) raises any material concerns regarding the safety or
      efficacy of any Product, (b)

                                       43

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      which indicates or suggests a potential material liability for either
      Party to third parties arising in connection with any Product, or (c)
      which is reasonably, likely to lead to a recall of any Product, including
      in all cases, but not limited to:

      4.14.1  Governmental or Regulatory Authority inspections of
              manufacturing, distribution of other related facilities, in
              which Product is manufactured, stored or otherwise present;

      4.14.2  receipt of a warning letter from any Governmental or Regulatory
              Authority relating to any Product; or

      4.14.3  on initiation of any Governmental or Regulatory Authority
              investigations, detention, seizure or injunction concerning any
              Product.

4.15  Novartis shall supply Products which meet the Specification and which are
      manufactured in accordance with Good Manufacturing Practice and shall be
      responsible for creating and retaining manufacturing, analytical and
      distribution records, testing and releasing materials, undertaking product
      and quality controls, including in-process controls and all necessary
      stability studies, and analysis relating to the Product all in accordance
      with such Specification and Good Manufacturing Practice.

                                       44

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

Part II

                                  The Products

Brand Name                    Pack Size (SKU)      NHS Supply Price (pounds)

ANAFRANIL                     10mg caps - 84       2.75

                              25mg caps - 84       5.40

                              50mg caps - 56       6.85

ANAFRANIL SR                  75mg tab - 28        7.51

ANAFRANIL SYRUP               25mg/5ml - 150ml     7.23

ANAFRANIL INJECTION           25mg/2ml - amp x 10  4.70

LIORESAL                      10mg tab - 84        9.03

LIORESAL LIQUID               5mg/5ml - 300ml      7.46

(excluding sales for use in
intrathecal pumps)

RITALIN                       10mg tab - 30        5.57

TEGRETOL                      100mg tab - 84       2.43

                              200mg tab - 84       4.50

                              400mg tab - 56       5.90

TEGRETOL CHEWTAB              100mg - 56           2.95

                              200mg - 56           5.49

TEGRETOL RETARD               200mg - 56           4.82

                              400mg - 56           9.48

                                       45

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

TEGRETOL LIQUID               100mg/5ml 300ml      5.72

TEGRETOL SUPPS                125mg - 5            7.50

                              250mg - 5            10.00

                                       46

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

Part III

                                 The Trademarks

                                             Registered
   Product               Territory  Class    number       Valid until

   ANAFRANIL             UK         5        884607       2010

   LIORESAL              UK         5        853707       2008

   RITALIN               UK         5        669833       2007

   TEGRETOL              UK         5        831335       2007

                                       47

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 6

Part I - Collaboration Committee

Cephalon Members

Sales and Marketing Director - UK
Finance Director - UK
Medical Director - UK

Novartis Members

Marketing Manager -- CNS - UK
Medical Manager -- CNS - UK
Planning Executive -- Finance - UK

Part II - Executive Committee

Cephalon Members

Senior VP and CFO Cephalon, Inc.
Senior VP Pharmaceutical Operations Cephalon, Inc.
Senior VP Business Development Cephalon, Inc.
UK Country Manager

Novartis Members

CEO Country Sector Organisation UK
Finance and Administration Director, UK
Director Business Units -- CNS - UK
Finance and Administration Manager - Basel

                                       48

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 7

[**]

                                       49

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                   Schedule 8

                                      [**]

                                       50

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.<PAGE>

                                                                Exhibit 10.17(d)

                            Dated 27th November 2000

                              CEPHALON (UK) LIMITED

                                     - and -

                       NOVARTIS PHARMACEUTICALS UK LIMITED

                ------------------------------------------------

                             DISTRIBUTION AGREEMENT

                ------------------------------------------------

                               CMS Cameron McKenna
                                   Mitre House
                              160 Aldersgate Street
                                 London EC1A 4DD

                               T+44(0)20 7367 3000
                               F+44(0)20 7367 2000

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

THIS AGREEMENT is made the 27th day of November 2000

BETWEEN:

(1)   CEPHALON (UK) LIMITED (Registered no 3207745) a company incorporated in
      England and Wales whose registered office is at 11/13 Frederick Sangers
      Road, Surrey Research Park, Guildford, Surrey GU2 5YD ("Cephalon"); and

(2)   NOVARTIS PHARMACEUTICALS UK LIMITED ( Registered no 119006), a company
      incorporated in England and Wales whose registered office is at Frimley
      Business Park, Frimley, Camberley, Surrey GU16 7SR ("Novartis").

WHEREAS:

      Cephalon wishes to appoint Novartis to distribute and sell Products (as
      hereinafter defined) in the Territory (as hereinafter defined) and
      Novartis wishes to accept such appointment on the terms and conditions of
      this Agreement.

NOW IT IS HEREBY AGREED as follows:

1.    Interpretation

1.1   Unless the context otherwise requires the following definitions shall
      apply throughout this Agreement:

      "Adverse Reaction" means a response to a substance that is noxious and
      unintended and which occurs at doses normally used in man for prophylaxis,
      diagnosis and therapy;

      "Affiliate" means any company, partnership or other entity which directly
      or indirectly Controls, is Controlled by or is under common Control with
      the Party in question including as a Subsidiary or Holding Company;

      "Agreement" means this agreement including the Schedules hereto as may be
      varied from time to time in accordance with the provisions of this
      agreement;

                                        1

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      "Commencement Date" means 1 January 2001;

      "Control" means the ownership (direct or indirect) of more than 50% of the
      issued share capital, or the legal power to direct or cause the direction
      of the general management and policies of the Party in question and
      "Controlled" and "Controller" shall be construed accordingly;

      "End Users" means customers who are not reselling the Products to third
      parties;

      "Force Majeure" means in relation to any Party any event or circumstance
      which is beyond the reasonable control of that Party which event that
      Party could not reasonably be expected to have taken into account at the
      date of this Agreement including acts of God, war, riot, civil commotion,
      any overriding emergency, fire, flood, storm and industrial dispute (other
      than industrial dispute affecting only the employees of the Party
      suffering the event of force majeure or any of its agents or
      subcontractors);

      "Good Distribution Practice" or "GDP" means the regulatory standards and
      principles and guidelines of good distribution practice as in force from
      time to time relating to the warehousing, storage and physical
      distribution of medicinal products established by the applicable
      Governmental or Regulatory Authority including, without limitation, the
      Guidelines on Good Distribution Practice of Medicinal Products for Human
      Use published by the European Commission, as the same may be amended from
      time to time;

      "Good Manufacturing Practice" or "GMP" means the regulatory standards and
      principles and guidelines of good manufacturing practice as in effect from
      time to time relating to the manufacture of medicinal products including,
      without limitation, standards for equipment, facilities, production and
      quality control established by the applicable Governmental or Regulatory
      Authority;

      "Governmental or Regulatory Authority" means any local or national agency,
      authority, department, court, tribunal, arbitrator, inspectorate,
      minister, ministry official or public or statutory person (whether
      autonomous or not) of, or of any

                                       2

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      government of, any country having jurisdiction over this Agreement or any
      of the Parties or in respect of the regulation of medicinal products in
      the Territory including the European Commission and the European Court of
      Justice;

      "Insolvency Event" in relation to any Party, means any one of the
      following:

      (a)   a notice shall have been issued to convene a meeting for the purpose
            of passing a resolution to wind up that Party or such a resolution
            shall have been passed other than a resolution for the solvent
            reconstruction or reorganisation of that Party; or

      (b)   a resolution (other than a resolution for the solvent reconstruction
            or reorganisation of a Party) shall have been passed by that Party's
            directors to seek a winding up or administration order or a petition
            for a winding up or administration order shall have been presented
            against that Party or such an order shall have been made; or

      (c)   a receiver, administrative receiver, receiver and manager, interim
            receiver, custodian, sequestrator or similar officer is appointed in
            respect of that Party or over a substantial part of its assets or
            any third party takes steps to appoint such an officer in respect of
            that Party or an encumbrancer takes steps to enforce or enforces its
            security; or

      (d)   a proposal for a voluntary arrangement shall have been made in
            relation to that Party under Part I Insolvency Act 1986; or

      (e)   a step or event shall have been taken or arisen outside the
            Territory which is similar or analogous to any of the steps or
            events listed at (a) to (d) above; or

      (f)   that Party suspends or threatens to suspend making payments to all
            or some of that Party's creditors or the Party submits to any type
            of voluntary arrangement; or

                                       3

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      (g)   where that Party is resident in the Territory it is deemed to be
            unable to pay its debts within the meaning of Section 123 Insolvency
            Act 1986;

      "Managed Services Agreement" means the Managed Services Agreement of even
      date entered into between the Parties;

      "Party" means Cephalon or Novartis (or their respective successors) and
      "Parties" shall mean both of them;

      "Product" means the Product listed in the Schedule together with such
      additions as the Parties may agree in writing from time to time;

      "Product Licence" means the authorisation for the sale and marketing of a
      Product in the Territory granted by a Governmental or Regulatory Authority
      as may be varied from time to time by Cephalon or Novartis as the case may
      be;

      "Rights" means all or any copyright, design right, trademarks, trade
      names, patents, know-how, trade secrets and other intellectual property or
      other proprietary rights in respect of or relating to the Products which
      may at any time subsist throughout all or any part of the world (whether
      registered or otherwise) including without limitation the Trademark, and
      all extensions and renewals thereof;

      "Sale" means the transfer of title in the Products for consideration; and
      "sell" and "selling" shall be construed accordingly;

      "SKU" means a single stock keeping unit of Product;

      "Specification" means the specification for a Product set out in the
      Product Licence;

      "Supply Price" means the price for each SKU as set out in Schedule 1A;

      "Term" means the period of ten years from the Commencement Date;

                                       4

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      "Territory" means the United Kingdom together with the Republic of Ireland
      or as may be agreed between the parties from time to time;

      "Trademark" means the registered trademark for the Product set out in the
      Schedule;

      "Working Day" means a day other than a Saturday, Sunday, bank or other
      public holiday in England and Wales;

1.2   In this Agreement:-

      1.2.1 unless the context otherwise requires all references to a particular
            Clause, Schedule or paragraph shall be a reference to that Clause,
            Schedule or paragraph, in or to this Agreement as it may be amended
            from time to time pursuant to this Agreement;

      1.2.2 the table of contents and headings are inserted for convenience only
            and shall be ignored in construing this Agreement;

      1.2.3 unless the contrary intention appears words importing the masculine
            gender shall include the feminine and vice versa and words in the
            singular include the plural and vice versa;

      1.2.4 unless the contrary intention appears words denoting persons shall
            include any individual, partnership, company, corporation, joint
            venture, trust, association (incorporated or unincorporated),
            organisation or other entity, in each case whether or not having
            separate legal personality;

      1.2.5 reference to any statute or regulation includes any modification or
            re-enactment of that statute or regulation; and

      1.2.6 reference to the words "include" or "including" are to be construed
            without limitation to the generality of the preceding words.

                                       5

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

2.    Appointment and Term

2.1   Cephalon hereby appoints Novartis with effect from the Commencement Date
      as its distributor of the Product in the Territory on and subject to the
      terms and conditions of this Agreement. For the avoidance of doubt
      Cephalon reserves the right to distribute the Product in all territories
      outside the Territory.

2.2   This Agreement shall commence on the Commencement Date and continue for
      the Term or until terminated by mutual agreement between the Parties,
      provided that the provisions of Clause 2.3 and 3.13 shall expire on the
      fifth anniversary of the Commencement Date unless renewed by specific
      agreement between the Parties.

2.3   Cephalon will not appoint in the Territory any other distributor or
      reseller of the Product nor will it directly supply for its own account
      the Product to distributors, resellers or End Users located within the
      Territory.

3.    General Undertakings by Novartis

3.1   Novartis shall perform its obligations hereunder as principal. Except as
      provided in this Agreement, it shall not otherwise dispose of the Product
      within the Territory, and shall not sell the Product within the Territory
      on behalf of, or in the name of, Cephalon.

3.2   Novartis agrees that the only remuneration it shall receive directly as a
      result of distributing the Product under this Agreement shall be any
      margin it receives on the resale of the Product. Novartis shall be
      responsible for obtaining payment in respect of all sales made of the
      Product in the Territory.

3.3   Novartis shall provide Cephalon at least twice weekly with an estimate of
      sales achieved and shipped.

3.4   Novartis shall not during the Term:

                                       6

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

            (a) actively canvass or solicit orders for the Product outside the
            Territory; or

            (b) open branches for the sale of the Product outside the Territory;
            or

            (c) maintain distribution depots for the Product outside the
            Territory.

3.5   Novartis shall not during the Term do anything which may prevent the sale,
      or interfere with the development of, sales of the Product in the
      Territory or which may adversely affect the quality of the Product.

3.6   Novartis shall sell and distribute the Product only in accordance with the
      Product Licence and all applicable laws, rules and regulations in the
      Territory.

3.7   Novartis shall maintain sufficient resources (either its own employees or
      through permitted subcontracts) to carry out its obligations hereunder in
      respect of the Product throughout the Territory and to perform in a timely
      and satisfactory manner Novartis' obligations under this Agreement.

3.8   Novartis agrees during the Term to comply with, and not to take any action
      which would be subject to penalty under, all laws, rules and regulations
      applicable to this Agreement in the Territory, and to conduct its business
      in accordance with all applicable ethical business practices and Good
      Distribution Practice.

3.9   Novartis shall obtain and maintain at its own cost and expense all
      necessary permissions, consents and licences to enable it to carry out its
      obligations hereunder in the Territory and to ensure the full and legal
      operation of this Agreement (other than the Product Licence).

3.10  Novartis shall keep Cephalon informed in writing in respect of any
      complaint, claim, demand or dispute concerning the Product.

3.11  Novartis shall advise Cephalon within 48 hours of any reported Adverse
      Reaction occurring in the Territory and reported to Novartis in respect of
      the Product. Cephalon shall have sole responsibility for reporting Adverse
      Reactions to the

                                       7

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      Medicines Control Agency and will conduct all communication relating to
      safety issues.

3.12  Novartis undertakes during the Term to store the Product in accordance
      with the terms of the Product Licence and GDP under conditions that will
      prevent deterioration of the Product and under any special conditions as
      may be notified to Novartis by Cephalon from time to time. Novartis agrees
      to allow Cephalon or its authorised representative to inspect the Product
      when in storage under the control of Novartis from time to time upon
      reasonable notice.

3.13  Novartis undertakes during the Term that it will not copy, produce, make,
      modify or manufacture or assist any other party to copy, produce, make or
      manufacture the Product or any part thereof for use, sale, or any other
      purpose whether inside or outside the Territory.

3.14  In the event of any Product recall, revocation of the Product Licence or
      any other event affecting the Product, Novartis shall:

      3.14.1   immediately cease all distribution of the Product;

      3.14.2   comply at Cephalon's cost with all Cephalon's reasonable
               instructions regarding collection of recalled Product, such
               collection to be at Cephalon's expense, unless such recall is
               caused by the acts or omission of Novartis, other than when
               Novartis is acting on Cephalon's instructions, provided
               however that Novartis shall use all reasonable endeavours to
               minimise such costs and expenses;

      3.14.3   provide such other assistance as may be reasonably requested
               by Cephalon.

4.    General Undertakings by Cephalon

4.1   Cephalon shall, and shall procure that its Affiliates shall, during the
      Term promptly refer to Novartis (or as Novartis shall direct) all
      enquiries it receives for the Product for sale or ultimate delivery within
      the Territory.

                                       8

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

4.2   Cephalon shall, and shall procure that its Affiliates shall, use all
      reasonable endeavours so far as permitted by law to safeguard the
      exclusive rights hereby granted to Novartis including the taking of such
      steps as may be available to prevent the infringement of any Rights it may
      have in respect of the Product within the Territory.

4.3   Cephalon shall supply the Product in accordance with Specification and in
      packaging which incorporates any information that may be required by the
      Product Licence, any Governmental or Regulatory Authority or any
      applicable law, rule or regulation from time to time.

4.4   Cephalon shall be responsible for reporting any Adverse Reactions relating
      to the Product to the health authorities in the Territory in accordance
      with the applicable legal requirements.

4.5   Cephalon shall provide Novartis with copies of the periodic safety update
      reports (if any) on Adverse Reactions and update requirements and
      recommendations as to the best use of the Product.

4.6   Cephalon shall be responsible for entering all Adverse Reactions to the
      Product into its global Adverse Reaction database. This information will
      be available for analysis and comment if required in relation to any
      emerging safety issue in relation to the Product.

4.7   Cephalon agrees to inform Novartis and keep it informed within 48 hours of
      notification of any action by, or notification or other information which
      it receives (directly or indirectly) from any Governmental or Regulatory
      Authority, which (a) raises any material concerns regarding the safety or
      efficacy of any Product, (b) which indicates or suggests a potential
      material liability for either Party to third parties arising in connection
      with the Product, or (c) which is reasonably, likely to lead to a recall
      of the Product, including in all cases, but not limited to:

                                       9

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      (i)   Governmental or Regulatory Authority inspections of manufacturing,
            distribution of other related facilities, in which the Product is
            manufactured, stored or otherwise present;

      (ii)  receipt of a warning letter from any Governmental or Regulatory
            Authority relating to the Product; or

      (iii) on initiation of any Governmental or Regulatory Authority
            investigations, detention, seizure or injunction concerning the
            Product.

5.    Supply and Purchase of Product

5.1   Novartis shall purchase from Cephalon such amount of Product for sale in
      the Territory as shall be agreed from time to time, ready packaged from
      Cephalon or an Affiliate of Cephalon and shall not alter or amend the
      packaging of any Product so supplied. The minimum order quantity shall
      represent no less than three months' supply based on average sales during
      the previous two months.

5.2   All orders issued by Novartis to Cephalon for the Product shall be
      processed by Cephalon and delivered at Novartis' expense to the warehouse
      of Healthcare Logistics Limited at Iver, Buckinghamshire, or such other
      address as shall be stipulated by Novartis. Cephalon shall use all
      reasonable endeavours to ensure delivery of Product takes place on the
      delivery date specified in the order issued by Novartis.

5.3   Cephalon shall be entitled at any time during the Term to make such
      alterations to the Specification as it may reasonably think fit without
      giving Novartis prior notice of such alterations.

5.4   Without prejudice to the provisions of Clause 9. Novartis shall carefully
      examine all quantities of Product supplied by Cephalon on receipt thereof
      and notify Cephalon within 5 (five) Working Days in writing of any defects
      reasonably discoverable on careful examination. Cephalon shall replace or,
      at its option, refund the Supply Price paid for any such quantities found
      to be so defective but shall not

                                       10

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      be under any other liability to Novartis in relation to such defects. If
      Cephalon does not receive a notice as referred to in this Clause, it shall
      be discharged from all liability (whether arising in negligence or
      otherwise) arising from such defects and such quantities shall be deemed
      to have been accepted by Novartis.

6.    Stock

      Novartis shall at all times during the Term carry a minimum of three (3)
      months' stock of the Product calculated by reference to the average sales
      of Product during the previous two months.

7.    Pricing and Payment

7.1   Novartis shall pay the Supply Price to Cephalon for all quantities of
      Product supplied to Novartis hereunder, within [**] of receipt of invoice
      in respect of batch orders of [**] supply or more and [**] where such
      orders [**] supply or more.

7.2   Payment for each order of Product made hereunder shall be made by
      telegraphic transfer to such bank account as Cephalon shall notify to
      Novartis from time to time.

7.3   The currency for all payments under Clause 7.2 shall be in(pound)sterling.

7.4   Risk on the Products shall pass to Novartis upon delivery. Title in the
      Products shall not pass to Novartis until Cephalon has received cleared
      funds in full payment of the Supply Price including, without limitation,
      VAT, if applicable.

7.5   If Novartis fails to pay the Supply Price for any Product supplied by
      Cephalon hereunder:

      7.5.1   within [**] as the case may be after the date of the invoice
              therefor Cephalon shall be entitled (without prejudice to any
              other right or remedy it may have) to charge Novartis interest
              on the price (which shall accrue from day to day after as well
              as before judgement) at the rate of [**] per

                                       11

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

              annum above National Westminster plc's base rate from time to
              time in force from the date the payment became due until
              actual payment is made, compounded monthly; and

      7.5.2   then after [**] from expiry of the relevant credit term as set
              out in clause 7.1 Cephalon shall be entitled (without
              prejudice to any other right or remedy it may have) to:

              (a) cancel or suspend any further delivery to Novartis under
              any order; and

              (b) sell or otherwise dispose of any Products which are the
              subject of any order by Novartis, whether or not appropriated
              thereto, and apply the proceeds of sale to the overdue
              payment.

7.6   All payments to be made by Novartis to Cephalon hereunder are exclusive of
      value added tax which shall be payable if applicable to do so in addition
      at the rate and in the manner for the time being prescribed by law.

8.    Marketing, Advertising and Promotion

      Cephalon shall carry out all marketing, advertising and promotion of the
      Product in the Territory in accordance with the Managed Services
      Agreement.

9.    Trademark and Rights

9.1   Without implying any warranty or undertaking on the part of Cephalon
      (other than as set out in Clause 10, the Trademark and all the Rights
      shall belong to and remain vested in Cephalon.

9.2   Novartis may use such of Cephalon's Rights as Cephalon from time to time
      authorises in writing and on and subject to such terms and conditions as
      Cephalon may require. Novartis shall:

                                       12

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      9.2.1   use the Trademark and the Rights exclusively in performing its
              duties under this Agreement; and

      9.2.2   not gain any title to the Trademark or the Rights; and

      9.2.3   not take any action which may prejudice or adversely affect
              the Trademark the Rights or Cephalon's title to and rights in
              them; and

      9.2.4   not use in relation to the Products any trademarks other than
              the Trademark without obtaining the prior written consent of
              Cephalon.

9.3   Novartis shall not use the Trademark or any of the Rights in connection
      with any other trademarks, logos, distinguishing marks or corporate names
      (including, without limitation, as part of any corporate, business or
      trading name or style of Novartis or any other person) without the prior
      written consent of Cephalon. In particular (but without limitation to the
      generality of the foregoing), Novartis shall not make any use of the
      Trademark such that confusion may arise between the Products bearing the
      Trademark and other products.

9.4   Novartis shall promptly notify Cephalon of any infringement of the
      Trademark or the Rights or Confidential Information in the Territory, and
      of any claim that the sale of the Products in the Territory infringes any
      person's rights, of which it may become aware and shall at the request and
      expense of Cephalon take such action in respect of such infringement or
      claim, as Cephalon may request.

9.5   The provisions of this Clause 9 shall remain in full force and effect
      after the expiry or termination of this Agreement for any reason.

10.   Warranties and Indemnity

10.1  Each party warrants to the other that it is entitled to enter into this
      Distribution Agreement and grant the Rights described herein.

10.2  Cephalon warrants to Novartis that:

                                       13

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      10.2.1  so far as it is aware the Sale of Products under the Trademark
              does not infringe the trademark rights or other Rights of any
              third party; and

      10.2.2  it shall supply Product which meets the Specification and
              which is manufactured in accordance with Good Manufacturing
              Practice and shall be responsible for creating and retaining
              manufacturing, analytical and distribution records, testing
              and releasing materials, undertaking product and quality
              controls, including in-process controls and all necessary
              stability studies, and analysis relating to the Product all in
              accordance with such Specification and Good Manufacturing
              Practice.

10.3  Save as is expressly stated in this Agreement no representation, condition
      or warranty whatsoever is made or given by or on behalf of either Party
      and all conditions and warranties implied by operation of law or otherwise
      are hereby expressly excluded.

10.4  If any claim against Novartis, its Affiliates, recognised distributors or
      agents (the "Indemnified Party") is brought by reason of the fact that any
      Product has caused illness, death or bodily injury, then unless such claim
      is a result of the gross negligence or misconduct of the Indemnified
      Party, Cephalon shall indemnify Novartis and its Affiliates for any and
      all liabilities, claims, damages and costs incurred or suffered by the
      other Novartis or its Affiliates or recognised distributors, and for any
      and all other liabilities, claims, damages and costs suffered by Novartis
      or its Affiliates, as a result of any associated Product recall, final
      packaging and similar costs associated with such Product. Such indemnity
      will include the reimbursement of the legal expenses reasonably incurred
      in contesting or defending such claim.

10.5  Novartis shall give Cephalon prompt written notice of any claim or threat
      of claim it receives with respect to any matter for which it or its
      Affiliates may be entitled to indemnification, and Cephalon shall
      thereafter defend or settle any such claim at its sole expense, and with
      counsel selected by the Cephalon and reasonably acceptable to the
      Indemnified Party. In the defence or settlement of any such claim, the
      Indemnified Party shall cooperate with and assist Cephalon to the extent

                                       14

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      reasonably possible, but Cephalon shall bear and pay any and all expenses
      incurred by the Indemnified Party in providing such cooperation and
      assistance, either directly or upon request of the Indemnified Party who
      has incurred such expense. Failure to give notice shall not constitute a
      defence, in whole or in part, to any claim by the Indemnified Party
      hereunder except to the extent the rights of the indemnifying Party are
      materially prejudiced by such failure to give notice.

11.   Subcontractors

11.1  Novartis may subcontract the performance of some or all of its obligations
      hereunder to third parties, provided always that Novartis shall remain
      responsible for ensuring such obligations are complied with in accordance
      with the terms of this Agreement

11.2  If Cephalon shall be dissatisfied with the performance of services by
      Novartis' sub-contractors, the parties shall in good faith consider
      measures to address the causes of such dissatisfaction. If notwithstanding
      such measures (or if no measures are appropriate), Novartis will terminate
      the services of such subcontractor forthwith upon being required to do so
      by Cephalon and shall appoint a replacement sub-contractor nominated by
      Cephalon.

12.   Termination

12.1  Either party may terminate this Agreement on [**] written notice to the
      other if Control of the other or any of that Party's Controllers shall
      pass from the present shareholders or owners or Controllers to other
      persons.

12.2  Without prejudice to any right or remedy that either Party may have
      against the other for breach or non-performance of this Agreement, either
      Party shall have the right to terminate the Agreement immediately:

            (a) on the other party committing a breach of any of the provisions
            of any of the Agreement providing that (where the breach is capable
            of rectification) the Party in breach has been advised in writing of
            the

                                       15

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

            breach and has not rectified in within 30 (thirty) days of receipt
            of such advice, or

            (b) if an Insolvency Event occurs in relation to the other Party.

12.3  Upon termination of this Agreement:

      12.3.1  Novartis shall continue to distribute the Product on the terms
              and conditions herein for a period of [**] or until such time
              as Cephalon has appointed an alternative distributor and that
              distributor is ready to commence the distribution of the
              Product. Thereafter, Novartis shall cease distributing the
              Product and shall at the request of Cephalon promptly return
              to Cephalon all documentation of any nature whatsoever and all
              Confidential Information in its possession or control relating
              to the Product or to Cephalon and to the activities of
              Novartis in relation to the Product or Cephalon (other than
              correspondence between Novartis and Cephalon which does not
              relate to technical matters); and

      12.3.2  Novartis shall transfer or procure the transfer of all stock
              of Product held by it or its subcontractor to Cephalon or to
              the replacement Distributor appointed under Clause 12.3.1 as
              Cephalon shall direct; and

      12.3.3  Novartis shall cease distributing and selling the Product and
              using the Trademark or any of the Rights and shall at the
              request of Cephalon promptly return to Cephalon all
              documentation of any nature whatsoever and all Confidential
              Information in its possession or control relating to the
              Product or to Cephalon (other than correspondence between
              Novartis and Cephalon which does not relate to technical
              matters); and

      12.3.4  Novartis shall (if so required by Cephalon) supply Cephalon
              with a list of Novartis' customers for the Product in the
              Territory; and

      12.3.5  All unshipped orders placed by Novartis with Cephalon even if
              previously accepted, shall be cancelled without liability to
              either Party; and

                                       16

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      12.3.6  Cephalon shall repurchase the Product then owned by Novartis
              at a price equal to the Supply Price less (a) any sums owed by
              Novartis to Cephalon and (b) any sums attributable to any
              damage to Product caused by Novartis; and

      12.3.7  Novartis shall allow Cephalon access to the storage facilities
              of Novartis or its subcontractor to enable Cephalon or its
              representative to determine the state of the Product Cephalon
              will repurchase; and

      12.3.8  If, in the reasonable opinion of Cephalon or its
              representative, any of the Product owned by Novartis has
              become unsaleable, it shall be disposed of by Novartis in
              accordance with directions given by Cephalon, at Novartis'
              expense where the Product has become unsaleable as a result of
              its act or omission and otherwise at Cephalon's expense and in
              accordance with applicable law; and

      12.3.9  Novartis shall promptly pack and ship, to such destination as
              Cephalon may direct, Product which Cephalon has repurchased.

12.4  During the period of [**] prior to the termination of this Agreement
      Novartis shall allow any person notified by Cephalon as being the
      successor to Novartis for the distribution and sale of the Products in
      Territory to make himself known to Novartis' customers so as to be able to
      do business as Cephalon's distributor from the day after the expiry or
      earlier termination of this Agreement.

12.5  For the three months following termination of this Agreement, Novartis
      shall refer any customers to the distributor appointed to succeed it or to
      Cephalon's nearest other distributor or to Cephalon itself as Cephalon
      shall direct.

12.6  Termination of this Agreement shall not affect the accrued rights of the
      Parties arising in any way out of this Agreement as at the date of
      termination including without limitation the right to recover damages
      against the other and all provisions which are expressed to survive this
      Agreement shall remain in full force and effect.

                                       17

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

13.   Force Majeure

13.1  If a Party (the "Non-Performing Party") is unable to carry out any of its
      obligations under this Agreement due to Force Majeure this Agreement shall
      remain in effect but:-

      13.1.1  the Non-Performing Party's relevant obligations under this
              Agreement; and

      13.1.2  the relevant obligations of the other Party ("the Innocent
              Party") under this Agreement, shall be suspended for a period
              equal to the circumstance of Force Majeure or 3 months
              whichever is the shorter provided that:-

              (a) the suspension of performance is of no greater scope than
              is required by the Force Majeure;

              (b) the Non-Performing Party gives the Innocent Party prompt
              notice describing the circumstance of Force Majeure, including
              the nature of the occurrence and its expected duration, and
              continues to furnish regular reports during the period of
              Force Majeure;

              (c) the Non-Performing Party uses all reasonable efforts to
              remedy its inability to perform and to mitigate the effects of
              the circumstance of Force Majeure; and

              (d) a soon as practicable after the event which constitutes
              Force Majeure the Parties discuss how best to continue their
              operations as far as possible in accordance with this
              Agreement.

14.   Notices

14.1  Any notice to be given in connection with this Agreement shall be in
      writing and shall be deemed duly served if delivered personally or sent by
      first class or recorded delivery post or by facsimile to the Company
      Secretary at the address of the Party concerned which is set out in this
      Agreement or as may be notified to the other

                                       18

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      Party in accordance with the provisions of this Clause. Any notices which
      are sent by e-mail shall not be valid unless and until confirmed by
      personal delivery, first class or recorded delivery post or by facsimile.

14.2  Any such notice shall be deemed to be served:

      14.2.1  if delivered personally, on the day on which it is delivered;

      14.2.2  if sent by post, 5 Working Days after the time of posting;

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

15.   Relationship of Parties

15.1  This Agreement shall not operate so as to create any of the following
      relationships between the Parties:

      15.1.1  partnership;

      15.1.2  agency;

      15.1.3  joint venture; or

      15.1.4  employer/ employee.

15.2  This Agreement shall not permit or authorise either Party to:

      15.2.1  incur any expenses on behalf of the other Party;

      15.2.2  enter into any commitment or make any representation or
              warranty on behalf of the other Party;

      15.2.3  pledge the credit of, or otherwise bind or oblige the other
              Party; or

                                       19

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

      15.2.4  commit the other Party in any way whatsoever without in each
              case obtaining the other Party's prior written consent.

16.   Waiver

      In no event shall any delay failure or omission on the part of any Party
      in enforcing exercising or pursuing any right, power, privilege, claim or
      remedy, which is conferred by this Agreement, or arises under this
      Agreement, or arises from any breach by the other Party to this Agreement
      of any of its obligations under this Agreement, be deemed to be or be
      construed as:

      16.1.1  a waiver thereof, or of any other such right power privilege
              claim or remedy, in respect of the particular circumstances in
              question; or

      16.1.2  operate so as to bar the enforcement or exercise thereof, or
              of any other such right, power, privilege, claim or remedy, in
              any other instance at any time or times afterwards.

17.   Severability

      Any provision of this Agreement which is held invalid or unenforceable in
      any jurisdiction shall be ineffective to the extent of such invalidity or
      unenforceability without invalidating or rendering unenforceable the
      remaining provisions hereof, and any such invalidity or unenforceability
      in any jurisdiction shall not invalidate or render unenforceable such
      provisions in any other jurisdiction

18.   Third Party Rights

      Nothing in this Agreement is intended to confer on any person any right to
      enforce any term of this Agreement which that person would not have had
      but for the Contracts (Rights of Third Parties) Act 1999.

                                       20

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

19.   Governing Law

      This Agreement is governed by and shall be construed in accordance with
      the laws of England and the Parties hereby submit to the non-exclusive
      jurisdiction of the English Courts .

20.   Transmission of Rights

      Neither Party shall assign the benefit and/or the burden of this Agreement
      to any third party without the prior written consent of the other.

21.   Variations

      Except as provided herein, this Agreement may not be amended, varied or
      modified except in writing signed by a duly authorised officer or
      representative of each of the Parties.

22.   Counterparts

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

IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year first before written.

                                       21

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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

SIGNED by                                            )
for and on behalf of                                 ) J. Kevin Buchi
CEPHALON (UK) LIMITED                                )
in the presence of:                                  )

Mary Lou Geis

SIGNED by                                            )
for and on behalf of                                 ) Adrian Adams
NOVARTIS PHARMACEUTICALS                             )
UK LIMITED                                           )
in the presence of:                                  )

Sally J Shorthose

                                       22

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
<PAGE>

                                    Schedule

                                  The Products

Brand Name/Active                  Pack Size (SKU)                 Supply Price

Ingredient

PROVIGIL/modafanil                 30 x 100mg                      [**]
                                   tablets

                                   Trademarks

Product        Territory           Class          Registered         Valid until
                                                  number

PROVIGIL       UK                  5              GB1566855          2005

                                       23

**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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