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

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

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

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

1. 
   DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

   26. "Excluded Liabilities" means:

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

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

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

3. all Obligations of Lilly arising out of Section 6.14;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

23. "MIT" means Massachusetts Institute of Technology.

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

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

1. trade, quantity, period, and cash discounts allowed;

2. such applicable pharmaceutical product returns, credits and allowances;

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

4. allowance for distribution expenses such as freight and insurance; and

5. any other similar or customary deductions.

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

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

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

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

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

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

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

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

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

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

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

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

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

6. "PMDD" means premenstrual dysphoric disorder.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

21. "Territory" means the United States.

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

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

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

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

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

1. 
   CONSIDERATION

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

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

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

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

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

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

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

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

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