10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2005

Commission File Number: 0-29630

SHIRE PHARMACEUTICALS GROUP PLC
(Exact name of registrant as specified in its charter)

England and Wales	98-0359573
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Hampshire International Business Park, Chineham,	+44 1256 894 000
	(Registrant’s telephone number, including area code)
Basingstoke, Hampshire, England, RG24 8EP
(Address of principal executive offices and zip code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]               No[  ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [X]               No [  ]

As of April 29, 2005, the number of outstanding ordinary shares of the Registrant was 492,230,825.

1

     SHIRE PHARMACEUTICALS GROUP PLC
Form 10-Q for the three months to March 31, 2005
Table of contents

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements	4
Condensed Consolidated Balance Sheets as of March 31, 2005 and December 31, 2004	4
Condensed Consolidated Statements of Operations for the three months to March 31, 2005 and March 31, 2004	5
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months to March 31, 2005	7
Condensed Consolidated Statements of Comprehensive Income for the three months to March 31, 2005 and March 31, 2004	8
Condensed Consolidated Statements of Cash Flows for the three months to March 31, 2005 and March 31, 2004	9
Notes to the Condensed Consolidated Financial Statements	11
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	36
ITEM 4. Controls and Procedures	36
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings	36
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
ITEM 3. Defaults Upon Senior Securities	38
ITEM 4. Submission of Matters to a Vote of Security Holders	38
ITEM 5. Other Information	38
ITEM 6. Exhibits	39

2

THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire's results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization, the impact of competitive products, including, but not limited to, the impact of those on Shire's Attention Deficit Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal challenges relating to Shire's ADHD franchise, government regulation and approval, including but not limited to Health Canada's suspension of ADDERALL XR^® sales in Canada and the expected product approval dates of MTS (METHYPATCH) (ADHD), SPD503 (ADHD), SPD465 (ADHD), SPD476 (ulcerative colitis), SPD480 (ulcerative colitis) and NRP104 (ADHD), including its scheduling classification by the Drug Enforcement Agency in the United States, Shire’s ability to consummate and benefit from its proposed acquisition of Transkaryotic Therapies Inc. (TKT), Shire's ability to secure new products for commercialization and/or development and other risks and uncertainties detailed from time to time in Shire's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year to December 31, 2004.

The following are trademarks of Shire Pharmaceuticals Group plc or its subsidiaries, which are the subject of trademark registrations in certain countries.

ADDERALL XR^® (mixed amphetamine salts)
AGRYLIN^® (anagrelide hydrochloride)
CARBATROL^® (carbamazepine)
EQUETRO^TM (carbamazepine)
FOSRENOL^® (lanthanum carbonate)
REMINYL^® (galantamine hydrobromide) (UK and Republic of Ireland)
XAGRID^® (anagrelide hydrochloride)

The following are trademarks of third parties referred to in this filing.

3TC^® (lamivudine) (trademark of GlaxoSmithKline (GSK))
AMARYL^® (glimepiride) (trademark of Sanofi-Aventis)
DYNEPO™ (epoetin delta) (EPO) (trademark of Sanofi-Aventis)
METHYPATCH^® (methylphenidate) (trademark of Noven Pharmaceuticals Inc. (Noven))*
PENTASA^® (mesalamine) (trademark of Ferring AS)
RAZADYNE™ (galantamine hydrobromide) (trademark of Johnson & Johnson)
REPLAGAL™ (agalsidase alfa) (trademark of TKT)
REMINYL^® (galantamine hydrobromide) (trademark of Johnson & Johnson, excluding UK and Republic of Ireland)
ZEFFIX^® (lamivudine) (trademark of GSK)

* Referred to as MTS in this Form 10-Q

3

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,		December 31,
		2005		2004
	Notes	$’000		$’000
ASSETS
Current assets:
Cash and cash equivalents		1,141,090		1,111,477
Restricted cash		20,688		21,627
Short-term investments		315,702		324,411
Accounts receivable, net	(3)	231,738		222,546
Inventories	(4)	45,880		41,230
Deferred tax asset		49,546		70,387
Prepaid expenses and other current assets	(5)	90,587		137,271
Total current assets		1,895,231		1,928,949
Investments		57,817		63,267
Property, plant and equipment, net		145,021		131,351
Goodwill		231,841		235,396
Other intangible assets, net	(6)	298,687		309,297
Deferred tax asset		31,715		7,724
Other non-current assets		38,885		38,895
Total assets		2,699,197		2,714,879
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	(7)	308,536		311,231
Loan facility	(2)	22,810		43,162
Other current liabilities	(8)	70,077		77,558
Total current liabilities		401,423		431,951
Long-term debt		116		116
Other non-current liabilities		26,402		32,159
Total liabilities		427,941		464,226
Commitments and contingencies	(9)
Shareholders’ equity:
Common stock, 5p par value; 800,000,000 shares authorized;
490,767,573 (2004: 484,916,034) shares issued and outstanding		40,525		40,064
Exchangeable shares: 2,926,597 (2004: 4,226,476) shares issued
and outstanding		135,524		195,830
Treasury stock		(223	)	(264	)
Additional paid-in capital		1,148,674		1,072,407
Accumulated other comprehensive income		115,577		131,939
Retained earnings		831,179		810,677
Total shareholders’ equity		2,271,256		2,250,653
Total liabilities and shareholders’ equity		2,699,197		2,714,879

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Notes	3 months to March 31, 2005 $’000		Restated 3 months to March 31, 2004 $’000
Revenues
Product sales		269,444		264,594
Royalties		58,323		56,145
Licensing and development		3,869		1,915
Other revenues		2,057		946
Total revenues		333,693		323,600
Costs and expenses:
Cost of product sales		33,333		34,093
Research and development		111,532		38,626
Selling, general and administrative		171,209		132,838
Reorganization costs	(2)	2,878		3,813
Total operating expenses		318,952		209,370
Operating income	(11)	14,741		114,230
Interest income		9,725		4,029
Interest expense		(15	)	(2,126	)
Other expense, net		(66	)	(4,819	)
Total other income/(expense), net		9,644		(2,916	)
Income from continuing operations before income taxes and equity
in (losses)/earnings of equity method investees		24,385		111,314
Income taxes		(6,803	)	(29,002	)
Equity in (losses)/earnings of equity method investees		(205	)	1,048
Income from continuing operations		17,377		83,360
Loss from discontinued operations		-		(8,786	)
Loss on disposition of discontinued operations		3,125		-
Net income		20,502		74,574

The results for the three months to March 31, 2004 have been restated to reflect the disposal of the vaccines business, which was accounted for as a discontinued operation.

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Notes	3 months to March 31, 2005		Restated 3 months to March 31, 2004
Earnings per share - basic	(10)
Income from continuing operations		3.5	c	16.8	c
Loss from discontinued operations		-		(1.8	c)
Loss on disposal of discontinued operations		0.6	c	-
Net income		4.1	c	15.0	c
Earnings per share - diluted	(10)
Income from continuing operations		3.5	c	16.3	c
Loss from discontinued operations		-		(1.6	c)
Loss on disposal of discontinued operations		0.6	c	-
		4.1	c	14.7	c
Weighted average number of shares:
Basic		498,998,570		495,718,205
Diluted		503,669,426		518,119,910

The results for the three months to March 31, 2004 have been restated to reflect the disposal of the vaccines business, which was accounted for as a discontinued operation.

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)

	Common Stock $’000	Common Stock No. of shares ’000	Exchange- able shares $’000		Exchange- able shares No. of shares ’000		Treasury stock $’000		Additional paid-in capital $’000	Accumu- lated other compre- hensive income $’000		Retained earnings $’000	Total share- holders’ equity $’000
As of January 1, 2005	40,064	484,916	195,830		4,226		(264	)	1,072,407	131,939		810,677	2,250,653
Net income for the period	-	-	-		-		-		-	-		20,502	20,502
Foreign currency translation	-	-	-		-		-		-	(9,883	)	-	(9,883	)
Exchange of exchangeable shares	277	3,900	(60,306	)	(1,299	)	-		60,029	-		-	-
Options exercised	184	1,952	-		-		-		15,984	-		-	16,168
Stock option compensation	-	-	-		-		-		49	-		-	49
Tax benefit associated with exercise of stock options	-	-	-		-		-		205	-		-	205
Re-issuance of treasury stock	-	-	-		-		41		-	-		-	41
Unrealized loss on available-for-sale securities	-	-	-		-		-		-	(6,479	)	-	(6,479	)
As of March 31, 2005	40,525	490,768	135,524		2,927		(223	)	1,148,674	115,577		831,179	2,271,256

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)

	3 months to March 31, 2005		3 months to March 31, 2004
	$’000		$’000
Net income	20,502		74,574
Other comprehensive income:
Foreign currency translation adjustments	(9,883	)	783
Unrealized holding (losses)/gains on available-for-sale securities	(6,479	)	2,572
Comprehensive income	4,140		77,929

The components of accumulated other comprehensive income as of March 31, 2005 and December 31, 2004, are as follows:

	March 31,	December 31,
	2005	2004
	$’000	$’000
Foreign currency translation adjustments	108,339	118,222
Unrealized holding gain on available-for-sale securities	7,238	13,717
Accumulated other comprehensive income	115,577	131,939

There are no material tax effects related to the items included above.

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

	3 months to March 31, 2005		Restated 3 months to March 31, 2004
	$’000		$’000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from continuing operations	17,377		83,360
Adjustments to reconcile net income from continuing operations to net cash
provided by operating activities:
Depreciation and amortization	14,465		12,516
Increase in provision for sales deductions	7,946		5,891
Stock option compensation	49		-
Movement in deferred taxes	(3,149	)	(2,150	)
Equity in losses/(earnings) of equity method investees	205		(1,048	)
Write-down of long-term assets	-		7,214
(Gain)/loss on sale of long-term assets	(16	)	396
Changes in operating assets and liabilities, net of acquisitions:
Increase in accounts receivable	(10,746	)	(6,183	)
Increase in inventory	(4,658	)	(2,208	)
(Increase)/decrease in prepayments and other current assets	(16,700	)	7,245
Decrease in other assets	10		5,716
Increase in accounts and notes payable and other liabilities	2,930		21,825
Decrease in deferred revenue	(1,433	)	(551	)
Dividends received from investments	20		-
Net cash provided by operating activities	6,300		132,023
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease in short-term investments	7,319		16,821
Movements in restricted cash	939		3,345
Loans made to ID Biomedical Corporation (IDB)	(20,352	)	-
Purchase of long-term investments	(1,814	)	(712	)
Purchase of intangible assets	(19,951	)	-
Purchase of property, plant and equipment	(19,940	)	(7,830	)
Proceeds from sale of long-term investments	-		220
Proceeds from sale of property, plant and equipment	48		-
Proceeds from redemption of IDB subscription receipts	60,000		-
Additional proceeds from sale of the vaccines business	2,236		-
Net cash provided by investing activities	8,485		11,844

9

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

	3 months to March 31, 2005		Restated 3 months to March 31, 2004
	$’000		$’000
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt and capital leases	-		(76	)
Proceeds from exercise of options	16,168		3,108
Tax benefit of stock option compensation, charged directly to equity	205		-
Net cash provided by financing activities	16,373		3,032
Effect of foreign exchange rate changes on cash and cash equivalents from
continuing operations	(1,545	)	(401	)
Net increase in cash and cash equivalents	29,613		146,498
Cash flows used in discontinued operations	-		(6,258	)
Cash and cash equivalents at beginning of period	1,111,477		1,063,362
Cash and cash equivalents at end of period	1,141,090		1,203,602

The results for the three months to March 31, 2004 have been restated to reflect the disposal of the vaccines business, which was accounted for as a discontinued operation.

The accompanying notes are an integral part of these condensed consolidated financial statements.

10

SHIRE PHARMACEUTICALS GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

(a) Basis of presentation

These interim financial statements of Shire Pharmaceuticals Group plc and its subsidiaries (Shire or the Company) and other financial information included in this Form 10-Q, are unaudited. They have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) and Securities and Exchange Commission regulations for interim reporting.

The December 31, 2004 balance sheet is derived from audited financial statements but does not include all disclosures required by US GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading.

These interim financial statements should be read in conjunction with the Company’s consolidated balance sheets as of December 31, 2004 and 2003, and the related consolidated statements of operations, cash flows and changes in shareholders’ equity for each of the three years in the period ended December 31, 2004.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from these interim financial statements. However, such information includes all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary to fairly state the results of the interim periods. Interim results are not necessarily indicative of results to be expected for the full year.

(b) Use of estimates in interim financial statements

The preparation of interim financial statements, in conformity with US GAAP and Securities and Exchange Commission regulations for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are primarily made in relation to provisions for sales deductions, valuation of intangible assets and fixed asset investments, contingent liabilities and the valuation of tax assets and liabilities.

(c) Employee stock plans

The Company accounts for its stock options using the intrinsic-value method prescribed in Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” (APB No. 25). Accordingly, compensation cost of stock options is measured as the excess, if any, of the quoted market price of Shire’s stock at the measurement date over the option exercise price and is charged to operations over the vesting period. For plans where the measurement date occurs after the grant date, referred to as variable plans, compensation cost is re-measured on the basis of the current market value of Shire stock at the end of each reporting period. The Company recognizes compensation expense for variable plans with performance conditions if achievement of those conditions becomes probable. As required by SFAS No. 123, “Accounting for Stock Based on Compensation” (SFAS No. 123), the Company has included in these interim financial statements the required pro forma disclosures as if the fair-value method of accounting had been applied.

As of March 31, 2005, the Company had six stock-based employee compensation plans, which are described more fully in the Company’s 2004 Form 10-K.

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The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.

3 months to March 31,	2005		2004
	$’000		$’000
Net income, as reported	20,502		74,574
Add:
Stock-based employee compensation charge included in reported net
income, net of related tax effects	49		-
Deduct:
Total stock-based employee compensation expense determined under fair
value based method for all awards	(5,135	)	(8,880	)
Pro forma net income	15,416		65,694
Earnings per share
Basic – as reported	4.1	c	15.0	c
Basic – pro forma	3.1	c	13.3	c
Diluted – as reported	4.1	c	14.7	c
Diluted – pro forma	3.1	c	13.0	c

(d) Accounting pronouncements adopted during the period

EITF 03-13

In November 2004, the Emerging Issues Task Force (EITF) reached a consensus on EITF 03-13, Applying the Conditions in Paragraph 42 of SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, in Determining Whether to Report Discontinued Operations (EITF 03-13). The purpose of the EITF is to clarify when a disposition should be classified as a discontinued operation caused by the contravening wording of paragraph 42 of SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS No. 144). The EITF reached a consensus that classification of a disposed component as a discontinued operation is appropriate only if the ongoing entity:

• has no continuing direct cash flows (a term EITF 03-13 introduces to interpret paragraph 42(a)); and,
  
  
• does not retain an interest, contract, or other arrangement sufficient to enable it to exert significant influence over the disposed component’s operating and financial policies after the disposal transaction (an interpretation of paragraph 42(b)).

EITF 03-13 should be applied to components that are disposed of or classified as held for sale in periods beginning after December 15, 2004. Previously reported operating results within an enterprise’s fiscal year that includes the ratification date may be reclassified to reflect the consensus. The Company has had no disposition in the period and this standard will be applied going forward.

(e) New accounting pronouncements

EITF 03-01

In March 2004, the EITF reached a consensus on Issue 03-01, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments” (EITF 03-01 or the Issue). EITF 03-01 is applicable to (a) debt and equity securities within the scope of FAS No. 115, (b) debt and equity securities that are within the scope of SFAS No. 124 and held by an investor that reports a performance indicator, and (c) equity securities not within the scope of SFAS No. 115 and not accounted for under the APB Opinion No. 18's equity method (e.g., investments in private companies). EITF 03-01 provides a step model to determine whether an investment is impaired and if an impairment is other-than-temporary. In addition, it requires that investors provide certain disclosures for investments in private companies and, if applicable, other information related specifically to investments in private companies, such as the aggregate carrying amount of investments in private companies, the aggregate amount of investments in private companies that the investor did not evaluate for impairment because an impairment indicator was not present, and the situations under which the fair value of an investment in a private company is not estimated. The disclosures relating to investments in private companies should not be aggregated with other types of investments. The effective date for the prospective

12

application of EITF 03-01 impairment model to all current and future investments has been delayed by FASB Staff Position EITF 03-01.

SFAS 123R

In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment (SFAS No. 123R). SFAS No.123R replaces SFAS No. 123 and supersedes APB No. 25. SFAS No. 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements at fair value and that excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. SFAS No. 123R is effective for the Company from January 1, 2006. SFAS No. 123R requires public companies to account for share-based payments using the modified-prospective method and permits public companies also to account for share based payments using the modified-retrospective method. Under the modified-prospective method, from the effective date, compensation cost is recognized based on the requirements of SFAS No. 123R for all new share-based awards and based on the requirements of SFAS No. 123 for all awards granted prior to the effective date of SFAS No. 123R that remain unvested on the effective date. The modified-retrospective method permits companies to restate, based on the amounts previously recognized under SFAS No. 123 for pro forma disclosure purposes, either all prior periods presented or prior interim periods in the year of adoption. The SFAS No. 123 pro forma disclosures given in Note 1(c) above show the impact of the Company adopting SFAS No. 123R in prior periods. The Company has yet to determine whether it will adopt the modified-retrospective method.

SFAS 153

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 153, "Exchanges of Non-monetary Assets - an amendment of APB Opinion No. 29" (SFAS No. 153), which amends APB Opinion No. 29, "Accounting for Non-monetary Transactions" to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. SFAS No. 153 is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

2. Reorganizations

(a) North American site consolidation

As previously disclosed, Shire began a consolidation of its North American sites in 2004, with the aim of decreasing the number of sites from 16 to 4, including the opening of a new US headquarters office in Wayne, Pennsylvania. The Company recorded reorganization costs of $48.5 million in 2004, (of which $3.8 million was in the three months to March 31, 2004), $2.9 million in the three months to March 31, 2005 and estimates further reorganization costs of approximately $9.1 million in the remainder of 2005. The site consolidation is expected to be complete by the end of 2005.

The primary costs associated with the site consolidation include:

• severance costs relating to 138 employees;
  
  
• retention payments to key employees;
  
  
• relocation costs relating to 85 employees who were moved to Wayne, Pennsylvania;
  
  
• costs of duplicate facilities (including lease exit costs); and
  
  
• other incremental costs associated with the site closures, such as legal and consultancy costs, the write down of property, plant and equipment and information technology costs.

In the 15 months to March 31, 2005, 133 employees had left the Company. The cost of the employee severance is being ratably recognized over the period from the communication date to the termination date. In addition, all 85 employees had relocated. The cost of relocation was recorded in the financial statements as it was incurred.

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The following table presents the cost of the reorganization recorded to date and the total estimated costs of the reorganization. Management believes that the presentation of the reorganization costs to date, including those recorded in the 12 months to December 31, 2004, may be useful. After the reorganization plan is finalized and actions are completed, the Company will continue to update its reorganization accruals based on changes in estimates.

	3 months to March 31, 2005	12 months to December 31, 2004	15 months to March 31, 2005	Total estimated costs
	$m	$m	$m	$m
Employee severance	1.6	20.0	21.6	22.0
Relocation costs	-	13.8	13.8	13.8
Write-off of property, plant and equipment	-	1.2	1.2	1.2
Consultancy costs	0.5	2.9	3.4	3.4
Duplicate facilities	0.7	5.1	5.8	14.5
Information technology costs	-	2.1	2.1	2.1
Other costs	0.1	3.4	3.5	3.5
	2.9	48.5	51.4	60.5

The charges have been reflected within reorganization costs in the statement of operations and are solely within the Pharmaceutical Products reporting segment.

3 months to March 31,	2005	2004
	$m	$m
Employee severance	1.6	2.4
Relocation costs	-	0.7
Consultancy costs	0.5	-
Duplicate facilities	0.7	-
Other costs	0.1	0.7
	2.9	3.8

As noted above, certain of the costs associated with the reorganization will be paid in subsequent periods, a portion of which are reflected as accrued expenses and other non-current liabilities. The following provides a reconciliation of the liability to date:

	Opening liability	Costs recorded in 3 months to March 31, 2005	Utilization in 3 months to March 31, 2005		Closing liability
	$m	$m	$m		$m
Employee severance	1.7	1.6	(1.2	)	2.1
Relocation costs	-	-	1.7		1.7
Consultancy costs	-	0.5	(0.5	)	-
Duplicate facilities	2.5	0.7	(1.0	)	2.2
Other costs	-	0.1	(0.1	)	-
	4.2	2.9	(1.1	)	6.0

The employee severance and relocation costs will be paid in 2005. The duplicate facilities will be paid for over the remaining life of the relevant lease, which is due to terminate in 2009.

(b) Disposal of the vaccines business

On September 9, 2004 the Company completed its disposal of the vaccines business to IDB. The total consideration for the sale was $120 million comprising $30 million of cash received at completion, $30 million of cash held in escrow and due on the first anniversary of closing and $60 million received at completion in the form of 4,931,864 subscription receipts of IDB. If, prior to January 10, 2005, IDB were to raise up to $60 million from equity related issuances, then it

14

was required under the terms of the sale agreement to redeem the subscription receipts from Shire for $60 million. Accordingly, following the completion of such a fund raising on January 7, 2005, IDB redeemed the subscription receipts from Shire for $60 million in cash.

As part of the transaction, Shire entered into an agreement to provide IDB with a loan facility of up to $100 million, which can be drawn down over the four years following completion. It is expected that IDB will draw down the entire $100 million loan. This facility can be used by IDB to fund the development of injectable flu and pipeline products within the vaccines business acquired from Shire. Drawings under the loan facility are segregated into two components:

(i) drawings for injectable flu development with a minimum drawing of $30 million. Such drawings under the loan facility are repayable out of income generated by IDB on future non-Canadian injectable flu products, subject to minimum annual repayments in respect of the first $30 million of the drawing, to be made between 2007 and 2017; and

(ii) drawings for pipeline development from the balance of the $100 million loan facility of up to $70 million. Such drawings will be repayable out of income generated by IDB on future pipeline products and have no fixed repayment schedule.

The combined drawings of the two components of the loan facility cannot exceed $100 million. As of March 31, 2005, IDB had drawn down $77.2 million, $47.8 million for injectable flu development and $29.4 million for pipeline development. As of March 31, 2005 $22.8 million of the loan facility remains.

The transaction gave rise to an overall loss on disposition of the vaccines business of $41.1 million recorded as a loss on disposition at completion in 2004 of $44.2 million and a subsequent provision release of $3.1 million being recognized during the three months to March 31, 2005. This net loss on disposal of $41.1 million comprises a gain on disposal of net assets of $28.9 million together with a provision for a loss of $70 million out of the $100 million loan facility available to IDB. This provision was made on the basis that those loan repayments based solely on future sales of flu and pipeline products in development provided no certainty of recovery.

3. Accounts receivable, net

Trade receivables at March 31, 2005 of $231.7 million (December 31, 2004: $222.5 million), are stated net of a provision for doubtful accounts and sales discounts of $7.7 million (December 31, 2004: $4.3 million).

The movement in the provision for doubtful accounts and sales discounts is as follows:

	2005		2004
	$’000		$’000
As at January 1,	5,665		7,853
Charged to operations	12,716		9,626
Utilization	(10,698	)	(9,017	)
As at March 31,	7,683		8,462
4. Inventories
	March 31,		December 31,
	2005		2004
	$’000		$’000
Finished goods	25,231		22,349
Work-in-process	8,404		11,831
Raw materials	12,245		7,050
	45,880		41,230

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5. Prepaid expenses and other current assets

	March 31,		December 31,
	2005		2004
	$’000		$’000
Prepaid expenses	30,718		31,401
Subscription receipts (see Note 2)	-		60,000
Cash held in escrow (see Note 2)	30,000		30,000
Supplemental Executive Retirement Plan (SERP) investment	1,784		1,784
Other current assets	28,085		14,086
	90,587		137,271
6. Other intangible assets, net
	March 31,		December 31,
	2005		2004
	$’000		$’000
Intellectual property rights acquired	526,460		543,969
Less: Accumulated amortization	(227,773	)	(234,672	)
	298,687		309,297

The useful economic lives of all intangible assets that continue to be amortized under SFAS No. 142 “Goodwill and Other Intangible Assets”, have been assessed. Management estimates that the annual amortization charges in respect of intangible fixed assets held at March 31, 2005 will be approximately $40 million for each of the five years to March 31, 2010. Estimated amortization expense can be affected by various factors including future acquisitions, disposals of product rights and the technological advancement and regulatory approval of competitor products.

7. Accounts payable and accrued expenses

	March 31,	December 31,
	2005	2004
	$’000	$’000
Trade accounts payable	18,511	35,008
Accrued rebates - Medicaid	84,826	84,758
Accrued rebates – Managed care	17,403	14,667
Sales return reserve	26,403	22,530
Accrued bonuses	12,104	23,171
Accrued coupons	17,374	15,869
R&D accruals	16,783	10,924
Marketing accrual	31,923	26,095
Accrued royalties	4,120	8,250
Deferred revenue	14,798	14,472
Reorganization accrual (see Note 2)	3,770	1,936
Other accrued expenses	60,521	53,551
	308,536	311,231

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8. Other current liabilities

	March 31,	December 31,
	2005	2004
	$’000	$’000
Income taxes payable	20,107	12,597
Deferred payments	-	18,980
SERP	1,904	1,904
Other accrued liabilities	48,066	44,077
	70,077	77,558

During the three months to March 31, 2005 the Company paid the remaining $19 million due in connection with the acquisition in 2004 of the exclusive commercialization rights to REMINYL in the UK and Republic of Ireland.

9. Commitments and contingencies

(a) Leases

Future minimum lease payments presented below include principal lease payments and other fixed executory fees under lease arrangements as of March 31, 2005:

	Operating leases
		$’000
2005		10,726
2006		14,122
2007		11,156
2008		8,100
2009		8,053
2010		8,004
Thereafter		35,503
		95,664

(i) Operating leases

The Company leases facilities, motor vehicles and certain equipment under operating leases expiring through 2015. Lease and rental expense included in selling, general and administrative expenses in the accompanying statements of operations amounted to $6.6 million for the three months to March 31, 2005 (2004: $3.4 million).

During the three months to March 31, 2004, Shire Inc., a wholly owned subsidiary of Shire, signed an eleven-year operating lease on a property in Wayne, Pennsylvania. Shire US, Inc., another wholly owned subsidiary, acts as guarantor in respect of this lease. The future minimum lease payments under the lease agreement are $34.4 million in aggregate.

(ii) Restricted cash in respect of leases

At March 31, 2005 the Company had $5.3 million of restricted cash held as collateral for certain equipment leases (December 31, 2004: $5.3 million).

(b) Letters of credit and guarantees

As of March 31, 2005, the Company had the following letters of credit outstanding:

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(i) An irrevocable standby letter of credit with Barclays Bank plc in the amount of $15.0 million providing security on the recoverability of insurance claims. The Company has restricted cash of $15.0 million, as required by this letter of credit.

(ii) The Company’s acquisitions, dispositions and other contractual arrangements contain representations and warranties, which have been determined to have de minimis potential liability.

(c) Commitments

(i) The Company has undertaken to subscribe to interests in companies and partnerships for amounts totaling $20.2 million (December 31, 2004: $22.0 million) of which $12.4 million is committed to in 2005 and a further $7.8 million could be payable in 2005, depending on the timing of capital calls.

(ii) Manufacturing facility
The Company has committed to the expansion and modification of its manufacturing facility at Owings Mills, Maryland to facilitate the production of FOSRENOL. The Company has committed to spend a further $3.1 million by the end of 2005 and has an additional commitment of $3.4 million for the design and construction of a technology center at Owings Mills, which is expected to be incurred in 2005.

(iii) Wayne, Pennsylvania fit out
The Company is in the process of fitting out its new US headquarters at Wayne, Pennsylvania. As of March 31, 2005, the Company had an outstanding commitment of $9.2 million.

(iv) NRP104
In connection with the Company’s collaboration with New River Pharmaceuticals Inc. (New River) to commercialize NRP104, the Company has an obligation to make certain payments on the achievement of milestones. In addition to the $50 million upfront payment expense as an R&D cost in the period, $50 million is due to be paid upon the US Food and Drug Administration’s (FDA’s) acceptance of filing of the New Drug Application (NDA); up to $300 million following the first commercial sale of the product, depending on the characteristics of the approved product labelling; $100 million as a sales bonus on achieving a significant sales target; and $5 million following the first commercial sale in certain specified EU markets.

(v) MTS
In connection with the Company’s purchase of MTS in 2003, the Company has an obligation to make certain payments on the achievement of milestones. The Company is committed to pay $50 million upon regulatory approval of the product and to make milestone payments of up to $75 million, which are linked to future sales performance. The Company expects to resubmit MTS to the FDA for approval in 2005.

(vi) FOSRENOL patent rights
In connection with the Company’s purchase of the global patents for FOSRENOL, Shire agreed to pay AnorMED Inc. $6 million when it is approved in certain European countries and $6 million upon receipt of regulatory approval in Japan.

(vii) Other R&D commitments
As of March 31, 2005, the Company had commitments of $9.7 million on achievement of specified milestones.

(d) Legal proceedings

(i) General
The Company accounts for litigation losses in accordance with SFAS No. 5, "Accounting for Contingencies" (SFAS No. 5). Under SFAS No. 5, loss contingency provisions are recorded for probable losses when management is able to reasonably estimate the loss. Where the estimated loss lies within a range and no particular amount within that range is a better estimate than any other amount, the minimum amount is recorded. In other cases management's best estimate of the loss is recorded. These estimates are developed substantially before the ultimate loss is known and the estimates are refined in each accounting period in light of additional information becoming known. In instances where the Company is unable to develop a reasonable estimate of loss, no litigation loss is recorded at that time. As information becomes known a loss provision is set up when a reasonable estimate can be made. The estimates are reviewed quarterly and the estimates are changed when expectations are revised. Any outcome upon settlement that deviates from the Company’s estimate may result in an additional expense in a future accounting period.

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(ii) Specific
There are various legal proceedings brought by and against the Company that are discussed in the Company’s Annual Report on Form 10-K for the year to December 31, 2004. A summary of and material updates to the proceedings discussed in the Company’s Annual Report on Form 10-K are set forth below. There is no assurance that the Company will be successful in these proceedings and if it is not, there may be a material adverse impact on the Company’s results of operations, financial condition and cash flows.

ADDERALL XR

(a) Barr Laboratories, Inc.

Shire’s extended release "once daily" version of ADDERALL, ADDERALL XR is covered by US patent No. 6,322,819 (the ‘819 Patent) and US patent No. 6,605,300 (the ‘300 Patent). In January 2003 the Company was notified that Barr Laboratories, Inc. (Barr) had submitted an Abbreviated New Drug Application (ANDA) under the Hatch-Waxman Act seeking permission to market its generic versions of the 5 mg, 10 mg, 15 mg, 20 mg, 25 mg and 30 mg strengths of ADDERALL XR (Barr’s ANDA products) prior to the expiration date of the Company’s ‘819 Patent, and alleging that the ‘819 Patent is not infringed by Barr's ANDA products. In August 2003 Shire was notified that Barr was also seeking permission to market Barr’s ANDA products prior to the expiration date of the ‘300 Patent and alleging that the ‘300 Patent is invalid. Shire Laboratories Inc (Shire Laboratories) filed suit against Barr for infringement of the ‘819 Patent in February 2003 and for infringement of the ‘300 Patent in September 2003. The schedules for the lawsuits against Barr with respect to the ‘819 and ‘300 Patents were consolidated in December 2003 and a trial date is scheduled for January 2006. The Company is seeking a ruling that Barr’s ANDA and ANDA products infringe the ‘819 and ‘300 Patents and its ANDA should not be approved before the expiration date of the patents. The Company is also seeking injunctions to prevent Barr from commercializing its ANDA products before the expiration of the ‘819 and ‘300Patents, damages in the event that Barr should engage in such commercialization, and its attorneys’ fees and costs. On September 27, 2004 Barr filed an amended Answer, Affirmative Defense and Counterclaim in which Barr added the following counterclaims: invalidity of the ‘819 patent, non-infringement of the ‘300 Patent and unenforceability of the ‘819 and ‘300 Patents due to inequitable conduct. Shire has asserted affirmative defenses, alleging, among other things, that Barr has waived its right to assert the counterclaims set forth in its September 27, 2004 amended answers.

(b) Impax Laboratories, Inc.

In November 2003, Shire was notified that Impax Laboratories, Inc. (Impax) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of the 30 mg strength of ADDERALL XR (Impax’s ANDA product) prior to the expiration date of the ‘819 and ‘300 Patents. In December 2003, Shire Laboratories filed suit against Impax for infringement of the ‘819 and ‘300 Patents. The Company is seeking a ruling that Impax’s ANDA product infringes the ‘819 and ‘300 Patents and that its ANDA should not be approved before the expiration date of the ‘819 and ‘300 Patents. The Company is also seeking injunctions to prevent Impax from commercializing its ANDA product before the expiration of the ‘819 and ‘300 Patents, damages in the event that Impax should engage in such commercialization, and its attorneys’ fees and costs. Impax’s affirmative defenses include non-infringement and invalidity of both the ‘819 and ‘300 Patents.

In December 2004, Shire received an additional notification from Impax advising of the filing of an amendment to its ANDA for a generic version of the 5 mg, 10 mg, 15 mg, 20 mg and 25 mg strengths of ADDERALL XR in addition to the 30mg strength, the subject of Impax’s initial ANDA. In January 2005, Shire Laboratories filed suit against Impax for infringement of the ‘819 and ‘300 Patents. The Company is seeking a ruling that Impax’s amended ANDA infringes the ‘819 and ‘300 patents and should not be approved before the expiration dates of the ‘819 and ‘300 Patents. The Company is also seeking an injunction to prevent Impax from commercializing its amended ANDA products before the expiration of the ‘819 and ‘300 Patents, damages in the event that Impax should engage in such commercialization, as well as its attorneys’ fees and costs. Impax’s affirmative defenses include non-infringement, invalidity and unenforceability of both the ‘819 and ‘300 Patents. Impax is also requesting that costs be assessed against the Company.

The Delaware District Court had set an October 11, 2005 trial date for the first Impax case. Following a scheduling conference with the same Court in the second case, a consolidated February 23, 2006 trial date has now been set for both cases.

(c) Colony Pharmaceuticals Inc.

In December 2004, Shire was notified that Colony Pharmaceuticals Inc. (Colony) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic versions of the 5 mg, 10 mg, 15 mg, 20 mg, 25 mg and 30 mg strengths of ADDERALL XR prior to the expiration date of the Company’s ‘819 and ‘300 Patents. Shire has decided not to sue Colony.

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(d) Teva Pharmaceuticals USA, Inc.

In February 2005, Shire was notified that Teva Pharmaceuticals USA, Inc. (Teva) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic versions of the 10 mg and 30 mg strengths of ADDERALL XR prior to the expiration date of the Company’s ‘819 and ‘300 Patents. Shire has decided not to sue Teva.

None of Barr, Impax, Colony or Teva may launch their generic versions of ADDERALL XR before they receive final FDA approval of their respective ANDAs. In respect of Barr’s and Impax’s ANDAs, the lawsuits triggered stays of final FDA approval of up to 30 months from the date of the Company’s receipt of, respectively, Barr’s and Impax’s notice letters. Even if Barr and/or Impax receive tentative FDA approval of their ANDAs, neither of them can lawfully launch their generic versions before the earlier of the expiration of the respective stays (Barr - February 2006; Impax - May 2006 in the case of the 30 mg strength and June 2007 in the case of the 5 mg, 10 mg,15 mg, 20 mg and 25 mg strengths) or a district court decision in its favor. In the event that the Company does not prevail in the Barr suit, Barr could be in a position to market its ANDA products upon FDA final approval of its ANDA. In the event the Company does not prevail in the Impax suit, Impax could be in a position to market its ANDA product upon FDA final approval of its ANDA and upon expiry of any exclusivity that Barr may hold.

Neither Colony nor Teva may market their ANDA products until FDA final approval of their ANDAs and upon the expiration of the first to file’s exclusivity rights.

The Hatch-Waxman exclusivity period for ADDERALL XR expired on April 11, 2005.

CARBATROL

In August 2003 the Company was notified that Nostrum Pharmaceuticals, Inc. (Nostrum) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of the 300 mg strength of CARBATROL (Nostrum’s ANDA product) prior to the expiration date of the Company’s US patents for CARBATROL, US patent No. 5,912,013 (the ‘013 Patent) and US patent No. 5,326,570 (the ‘570 Patent). The notification alleges that the ‘013 and ‘570 Patents are not infringed by Nostrum’s ANDA product. On September 18, 2003 Shire Laboratories filed a complaint in the United States District Court for the District of New Jersey alleging infringement of these two patents by Nostrum’s ANDA and ANDA product. The Company was seeking a ruling that Nostrum’s ANDA infringes the ‘013 and ‘570 Patents and should not be approved before the expiration date of the ‘013 and ‘570 Patents. The Company was also seeking an injunction to prevent Nostrum from commercializing its ANDA product before the expiration of the ‘013 and ‘570 Patents, damages in the event that Nostrum should engage in such commercialization, as well as its attorneys’ fees and costs. On January 23, 2004 the Company amended the Complaint to delete the allegations with respect to the ‘013 Patent while maintaining the suit with respect to the ‘570 Patent. By way of counterclaims Nostrum is seeking a declaration that the ‘570 and ‘013 Patents are not infringed by Nostrum’s ANDA product. Nostrum was also seeking actual and punitive damages for alleged abuse of process by Shire. On July 12, 2004 the Court dismissed Nostrum’s abuse of process counterclaim for failure to state a claim upon which relief can be granted. On December 10, 2004 Nostrum filed a summary judgment motion seeking a declaration of non-infringement of the ‘570 Patent. Shire’s opposition to this motion was filed on January 14, 2005. Oral argument has been set by the Court for May 31, 2005. The case is now in the expert discovery phase. No trial date has been set.

Nostrum may not launch a generic version of CARBATROL before it receives final approval of its ANDA from the FDA. The lawsuit triggered a stay of FDA approval of up to 30 months from Shire’s receipt of Nostrum’s notice letter. Even if Nostrum receives tentative approval from the FDA for its ANDA, it cannot lawfully launch its generic version before the earlier of the expiration of the stay (February 2006) or a district court decision in its favor. In the event that the Company does not prevail in the Nostrum suit, then Nostrum could be in a position to market its 300 mg extended-release carbamazepine product upon FDA final approval of its ANDA.

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10. Earnings per share

The following table reconciles income from continuing operations and the weighted average ordinary shares outstanding for basic and diluted earnings per share for the periods presented:

3 months to March 31,		Restated
	2005	2004
	$’000	$’000
Income from continuing operations	17,377	83,360
Loss from discontinued operations, net of tax	-	(8,786	)
Loss on disposal of discontinued operations	3,125	-
Numerator for basic earnings per share	20,502	74,574
Interest charged on convertible debt, net of tax	-	1,296
Numerator for diluted earnings per share	20,502	75,870
Weighted average number of shares:	No. of shares	No. of shares
Basic	498,998,570	495,718,205
Effect of dilutive shares:
Stock options	4,425,778	3,899,118
Warrants	245,078	132,023
Convertible debt	-	18,370,564
	4,670,856	22,401,705
Diluted	503,669,426	518,119,910

The share options (due to their exercise prices exceeding the Company’s average share price during the calculation period) and convertible debt not included within the calculation of the diluted weighted average number of shares, are shown below:

3 months to March 31,	2005	2004
	No. of shares	No. of shares
Share options	7,664,048	10,328,167
Convertible debt	5,756	-
	7,669,804	10,328,167

11. Segmental reporting

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” (SFAS 131) establishes standards for reporting information about operating segments and related disclosures, products and services, geographic areas and major customers. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance.

Shire sells a number of pharmaceutical products in multiple geographic markets across the world. The Company is continuously looking to develop and replenish the pharmaceutical product pipeline and has continued to focus on meeting the needs of the specialist physician in targeting therapeutic areas within its pool of expertise.

In prior reporting periods, the Company’s internal management reporting structure was based on a combination of geography and function. As a result the Company provided segment information, which showed geographic sales and costs for the US and International sales and marketing businesses, R&D costs and a Corporate segment which included corporate costs and royalty income.

Following a restructuring of operational management along therapeutic areas, management has re-evaluated and amended its internal reporting structures and as a result, changed its reporting segments.

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Effective January 1, 2005, Shire’s internal management reporting structures have been changed to show two segments, Pharmaceutical Products and Royalties. The Pharmaceutical Products segment comprises three therapeutic areas, central nervous system (CNS), gastro-intestinal (GI) and general products (GP).

The Company evaluates performance based on revenue and operating income. The Company does not have inter-segment transactions. Prior period amounts have been reclassified to conform to the new current period presentation.

The Pharmaceutical Products segment represents the Company’s commercial operations and costs in respect of products currently promoted and sold together with costs of developing projects for future commercialization. The Royalties segment represents revenues earned from the out-licensing of projects to third parties. These projects have been developed and commercialized by the third party and royalties are being received on the sale of the commercialized product. ‘All Other’ has been included in the table below in order to reconcile the segments to the total consolidated figures. Costs have not been allocated to Royalties below as the magnitude of the costs incurred in respect of managing this segment is small and the internal reporting consequently does not allocate costs to this segment. Assets that are directly attributable to the Royalty segment have been separately disclosed from the Pharmaceutical Products segment.

Shire’s reportable segments for periods ended March 31, 2004 and 2005 are as follows:

3 months to March 31, 2005	Pharmaceutical Products			Royalties	Segment Sub-total	All Other	Total
		$’000		$’000	$’000	$’000	$’000
Product sales		269,444		-	269,444	-	269,444
Royalties		-		58,323	58,323	-	58,323
Licensing and development		-		-	-	3,869	3,869
Other revenues		-		-	-	2,057	2,057
Total revenues		269,444		58,323	327,767	5,926	333,693
Cost of product sales		33,333		-	33,333	-	33,333
Research and development		110,004		-	110,004	1,528	111,532
Selling, general and administrative		157,573		-	157,573	-	157,573
Depreciation and amortization (1)		13,636		-	13,636	-	13,636
Reorganization costs		2,878		-	2,878	-	2,878
Total operating expenses		317,424		-	317,424	1,528	318,952
Operating (loss)/income		(47,980	)	58,323	10,343	4,398	14,741
Total assets		2,642,048		57,149	2,699,197	-	2,699,197
Long-lived assets		803,966		-	803,966	-	803,966
Capital expenditure on long-lived assets		41,705		-	41,705	-	41,705

(1) Depreciation from manufacturing plants ($0.8 million) is included in cost of product sales.

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3 months to March 31, 2004	Pharmaceutical Products		Royalties	Segment Sub-total	All Other	Total
		$’000	$’000	$’000	$’000	$’000
Product sales		264,594	-	264,594	-	264,594
Royalties		-	56,145	56,145	-	56,145
Licensing and development		-	-	-	1,915	1,915
Other revenues		-	-	-	946	946
Total revenues		264,594	56,145	320,739	2,861	323,600
Cost of product sales		34,093	-	34,093	-	34,093
Research and development		37,800	-	37,800	826	38,626
Selling, general and administrative		120,322	-	120,322	-	120,322
Depreciation and amortization		12,516	-	12,516	-	12,516
Reorganization costs		3,813	-	3,813	-	3,813
Total operating expenses		208,544	-	208,544	826	209,370
Operating income		56,050	56,145	112,195	2,035	114,230
Total assets		2,577,908	56,139	2,634,047	-	2,634,047
Long-lived assets		747,670	-	747,670	-	747,670
Capital expenditure on long-lived assets		7,830	-	7,830	-	7,830

Supplemental information
To improve comparability between periods for investors, the prior reporting format has also been used to report the current period to March 31, 2005 together with the previously reported segmental analysis for the period to March 31, 2004. Whilst there is no requirement to include this disclosure under SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” as the new internal reporting format has been used for the current and historic period, management believes that during 2005, it may be useful. This internal management-reporting format is no longer used as the basis for making decisions within the business.

23

3 months to March 31, 2005	US	International	Corporate	R&D		Total
	$’000	$’000	$’000	$’000		$’000
Product sales	223,440	46,004	-	-		269,444
Royalties	272	2,565	55,486	-		58,323
Licensing and development	3,226	643	-	-		3,869
Other revenues	240	1,817	-	-		2,057
Total revenues	227,178	51,029	55,486	-		333,693
Cost of product sales	19,047	14,286	-	-		33,333
Research and development	-	-	-	111,532		111,532
Selling, general and administrative	113,396	30,995	13,182	-		157,573
Depreciation and amortization (1)	7,497	2,734	3,405	-		13,636
Reorganization costs	2,228	-	307	343		2,878
Total operating expenses	142,168	48,015	16,894	111,875		318,952
Operating income/(loss)	85,010	3,014	38,592	(111,875	)	14,741
Total assets	1,135,162	410,034	1,078,844	75,157		2,699,197
Long-lived assets	311,757	140,433	308,769	43,007		803,966
Capital expenditure on long-lived assets	16,368	1,019	24,318	-		41,705

(1) Depreciation from manufacturing plants ($0.8 million) is included in cost of product sales in the US segment. Depreciation and amortization relating to R&D assets are included in the US and International segments.

3 months to March 31, 2004		Restated	Restated	Restated		Restated
	US	International	Corporate	R&D		Total
	$’000	$’000	$’000	$’000		$’000
Product sales	223,296	41,298	-	-		264,594
Royalties	-	2,798	53,347	-		56,145
Licensing and development	1,884	31	-	-		1,915
Other revenues	723	223	-	-		946
Total revenues	225,903	44,350	53,347	-		323,600
Cost of product sales	21,760	12,333	-	-		34,093
Research and development	-	-	-	38,626		38,626
Selling, general and administrative	77,195	25,589	17,538	-		120,322
Depreciation and amortization	9,951	2,466	99	-		12,516
Reorganization costs	2,861	-	61	891		3,813
Total operating expenses	111,767	40,388	17,698	39,517		209,370
Operating income/(loss)	114,136	3,962	35,649	(39,517	)	114,230
Total assets	838,546	391,614	1,342,904	60,983		2,634,047
Long-lived assets	251,914	199,472	249,457	46,827		747,670
Capital expenditure on long-lived assets	3,985	445	2,578	822		7,830

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12. Subsequent events

Transkaryotic Therapies, Inc.
On April 21, 2005, Shire announced that it had signed a definitive agreement to acquire TKT in an all cash transaction.

Terms of the transaction
Under the terms of the acquisition agreement, TKT shareholders will receive a cash consideration of $37 per share of TKT common stock. The transaction values TKT’s share capital, as of the date of the agreement, at $1.57 billion on a fully diluted basis.

The transaction has been unanimously approved by Shire’s board of directors and has been approved by a majority of TKT’s directors. The transaction is subject to approval by the shareholders of both companies, as well as regulatory approvals and satisfaction of other customary closing conditions including that representations and warranties in the acquisition agreement are true and correct as of the closing except to the extent that any failure to be true and correct would not have a material adverse effect on TKT or on Shire’s ability to consummate the merger. For purposes of determining whether there has been a material adverse effect on TKT, certain developments, among them the results of TKT’s current clinical trial evaluating the use of I2S for Hunter syndrome, will be disregarded. The transaction is expected to close in the summer of 2005. The acquisition agreement also contains provisions relating to the payment of break fees by Shire and TKT, with TKT being obliged to pay Shire $52 million in specified circumstances and reimburse Shire up to $4 million in expenses and Shire being obliged to pay TKT $40 million if the acquisition agreement is terminated as a result of Shire’s shareholders not approving the transaction, if Shire fails to call and hold its shareholder meeting in accordance with the acquisition agreement, or the board of directors of Shire changing their recommendation in respect of the transaction.

In addition, Shire and TKT have entered into an irrevocable and perpetual license agreement under which TKT grants to Shire the exclusive right to use, distribute and sell, as well as the right to manufacture, DYNEPO (TKT’s EPO drug for the treatment of kidney disease-related anemia) outside of North America. The license only takes effect if closing of the acquisition agreement does not occur for specified reasons, which include those circumstances in which Shire is obliged to pay a break fee. If the license were to become effective, Shire would make a one-time payment to TKT of $450 million with no royalties payable to TKT. Shire would assume TKT’s obligation to pay single-digit royalties to Aventis, from which TKT originally licensed the DYNEPO rights.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company’s consolidated financial statements and related notes appearing elsewhere in this report.

Overview

Shire’s strategic goal is to become the leading specialty pharmaceutical company that focuses on meeting the needs of the specialist physician. Shire refocused its business on three core therapeutic areas in 2004 - CNS, GI and GP - all being areas in which Shire has a commercial presence. The structure is sufficiently flexible to allow Shire to target new therapeutic areas to the extent opportunities arise through product or project acquisitions. Shire believes that a carefully selected portfolio of products with a strategically aligned and relatively small sales force will deliver strong results.

The Company’s strategic development priorities were also refocused in 2004. Shire will search, develop and market but will not invent. This approach aims to deliver increased returns and lower risks. Shire’s in-licensing and merger and acquisition efforts are focused on the US market and the Company will seek to obtain European rights whenever possible. Shire seeks to acquire products with substantial patent protection rather than just three years marketing exclusivity under the Hatch-Waxman Act.

In accordance with this strategy, in April 2005 Shire announced the proposed acquisition of TKT. TKT, which specializes in enzyme replacement therapy (ERT), is a good strategic fit for Shire. Both companies use small sales teams focusing on specialist physicians. TKT, like Shire, does not conduct high-risk discovery research. It has a well-balanced, low-risk development pipeline, I2S (for Hunter syndrome) and GA-GCB (for Gaucher disease), and two approved products, REPLAGAL and DYNEPO. The acquisition is subject to approval by the shareholders of both companies, regulatory approvals and other customary closing conditions.

Significant events in the three months to March 31, 2005

North American site consolidation

In connection with Shire’s shift in strategy following the adoption of its new business model the Company announced a North American site consolidation which commenced in 2004. During the three months to March 31, 2005, the Company has further advanced its plans to reduce the number of North American sites from sixteen to four and in February 2005 closed the R&D facility in Rockville, Maryland. The Company will also close its Newport site later in 2005 and this will represent the final element of the reorganization program. The current estimated cost of the reorganization is $60.5 million with $48.5 million recorded in 2004 and $2.9 million in the three months to March 31, 2005. See Note 2 to the condensed consolidated financial statements in this Form 10-Q.

Out-license agreement

In January 2005, SPD 754 for the treatment of the Human Immunodeficiency Virus (HIV), was out-licensed to Avexa Ltd (Avexa), a publicly listed Australian speciality anti-infective company. Under the terms of the license agreement, Avexa will assume worldwide responsibility for developing this compound but Shire has retained the right to commercialize this product in the US and Canada.

NRP104

In January 2005, the Company entered into a global agreement (the “Global Agreement”) with New River to collaborate in developing, manufacturing, marketing and selling NRP104 in the US. NRP104 is a compound for the treatment of ADHD and is currently in Phase 3 clinical trials. In the rest of the world, the Company acquired the license to develop and commercialize NRP104. The Global Agreement contained a provision requiring Shire and New River to split the Global Agreement into two agreements, with one covering the US (the “US Agreement”) and the other covering the Rest of the World (the “ROW Agreement”). The terms of the Global Agreement were to carry over to the US Agreement and the ROW Agreement without any material or substantive changes. On March 31, 2005, the Company and New River executed the US Agreement and ROW Agreement and these two agreements, which in the aggregate are the same as the Global Agreement, have replaced and superseded the Global Agreement. The Global Agreement, the US Agreement, and the ROW Agreement are attached as Exhibits to this Form 10-Q.

The Company paid an initial sum of $50 million on signing, and there is a further $50 million due upon acceptance of the filing of the NDA by the FDA and up to $300 million in milestone payments following the first commercial sale in the US depending on the characteristics of the FDA approved product labelling. An additional $100 million milestone payment would be payable as a sales bonus upon achieving a significant sales target. A $5 million milestone payment would be payable following the first commercial sale in specified European countries.

26

The Company may be entitled to refunds of amounts previously paid in the event of a delayed product approval or upon FDA approval depending on the characteristics of the approved product labeling.

ADDERALL XR in Canada

On February 9, 2005, Shire announced that Health Canada had suspended sales of ADDERALL XR in Canada where sales in 2004 amounted to $7.8 million. The suspension followed Health Canada’s interpretation of adverse event data as part of routine label updating. Following the Health Canada announcement, the US Food and Drug Administration (FDA) issued a statement advising that it had been in close consultation with the Canadian authorities regarding the basis for their action. The FDA stated that it did not feel that any immediate changes were warranted in the FDA labeling or approved use of ADDERALL XR in the US based on its preliminary understanding of Health Canada’s analyses of adverse event reports and the FDA’s own knowledge and assessment of those reports. Although Shire is complying with Health Canada’s suspension request, the Company strongly disagrees with the conclusions drawn by Health Canada and has lodged an appeal and taken other actions to preserve its legal rights and options.

Generic version of ADDERALL XR

In February 2005, Shire was notified that Teva Pharmaceuticals USA, Inc. (Teva) had submitted an ANDA under the US Hatch-Waxman Act seeking permission to market its generic versions of the 10mg and 30mg strengths of ADDERALL XR prior to the expiration date of the Company’s patents. On April 11, 2005 the Company announced that it would not sue Teva.

Shire has also been notified that Barr, Impax and Colony have submitted applications to the FDA seeking permission to market generic versions of ADDERALL XR. For further information see ITEM 1 of Part II of this Form 10-Q: Legal Proceedings.

REMINYL

On March 1, 2005, the National Institute for Clinical Excellence (NICE) in England and Wales issued a preliminary Appraisal Consultation Document for consultation with stakeholders. This preliminary appraisal recommends that all existing approved products for the symptomatic treatment of mild to moderate Alzheimer's disease in England and Wales should no longer be reimbursable under the National Health Service when used by new patients. This consultation document affects REMINYL in England and Wales. Shire has submitted its views in response to the preliminary Appraisal Consultation Document issued by NICE.

The Company and Janssen Pharmaceutica NV (Janssen), part of the Johnson & Johnson Group, are in ongoing discussions with the European regulatory authorities in relation to their assessment of the data for REMINYL from investigational studies in mild cognitive impairment.

On April 11, 2005, Ortho-McNeil Neurologics Inc. (Janssen’s US affiliate company) announced that REMINYL would be marketed in the US under the new product name of RAZADYNE. Ortho-McNeil Neurologics Inc. worked closely with the FDA on a name change following dispensing errors in the US, between REMINYL and the Type 2 diabetes mellitus drug known as AMARYL. Shire is unaware of any similar dispensing errors outside the US and REMINYL continues to be marketed outside the US under its original name for the time being.

Recent developments

Transkaryotic Therapies, Inc.

On April 21, 2005, Shire announced that it had signed a definitive agreement to acquire Transkaryotic Therapies, Inc. (TKT) in an all cash transaction. Under the terms of the acquisition agreement, TKT shareholders will receive a cash consideration of $37 per share of TKT common stock. The transaction values TKT’s share capital, as of the date of the agreement, at $1.57 billion on a fully diluted basis. For further information see Note 12 to the condensed consolidated financial statements in this Form 10-Q.

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Generic versions of AGRYLIN

AGRYLIN’s pediatric exclusivity expired in September 2004 in the US and on April 18, 2005 the FDA rejected Shire’s Citizens’ Petition, which had been filed with the FDA in August 2004. The FDA subsequently approved several generic versions of AGRYLIN and this is expected to adversely affect Shire’s future sales of this product in the US.

Research and development

Shire’s technological and R&D efforts are concentrated on treatments within its core therapeutic areas that are in late-stage development. The Company’s development resources have been directed to four projects, which are in Phase 3 of development – MTS, SPD503 (extended release formulation of GUANFACINE) and SPD465, (all for the treatment of ADHD), and SPD476 for ulcerative colitis. In addition, in January 2005, Shire entered into a collaborative agreement with New River for the commercialization of a Phase 3 compound, NRP104, for the treatment of ADHD, with the option to commercialize it for additional indications.

Following completion of the acquisition of TKT, Shire will also direct development resource towards the progression of TKT’s late-stage ERT development projects: I2S and GA-GCB.

Products in registration at March 31, 2005

MTS: Shire acquired the worldwide sales and marketing rights to MTS, a methylphenidate transdermal delivery system for the once daily treatment of ADHD, from Noven Pharmaceuticals Inc. (Noven) in February 2003. In April 2003 Noven received a “not approvable” letter from the FDA. A program has been agreed with the FDA to address issues raised in this letter and work is currently ongoing. Submission of an amendment to the original NDA is anticipated during 2005.

ADDERALL XR adolescent: In September 2004 a supplemental new drug application for the use of ADDERALL XR in the adolescent population was submitted to the FDA. It is anticipated that a response to this submission will be received during the second half of 2005.

Products in late stage development as of March 31, 2005

• SPD503 for ADHD, which is in Phase 3 development;
  
  
• SPD476 for ulcerative colitis, which is in Phase 3 development;
  
  
• SPD465 for ADHD, which is in Phase 3 development; and
  
  
• NRP104 for ADHD, which is in Phase 3 development in collaboration with New River.

Results of operations for the three months to March 31, 2005 and 2004

The results for the three months to March 31, 2004 have been restated to reflect the disposal of the vaccines business, which has been accounted for as a discontinued operation.

Total revenues

The following table provides an analysis of the Company’s total revenues by source:

	3 months to March 31, 2005	3 months to March 31, 2004	Change
	$’000	$’000	%
Product sales	269,444	264,594	+2
Royalties	58,323	56,145	+4
Licensing and development	3,869	1,915	+102
Other	2,057	946	+117
Total	333,693	323,600	+3

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Product sales

For the three months to March 31, 2005, product sales increased 2% ($4.8 million) to $269.4 million (2004: $264.6 million) and represented 81% of total revenues (2004: 82%). The following table provides an analysis of the Company’s key product sales:

	3 months to March 31, 2005	3 months to March 31, 2004	Product sales growth	US prescription growth
	$’000	$’000	%	%
CNS
ADDERALL XR	145,536	139,462	+4	+16
ADDERALL	9,409	9,414	-	n/a
CARBATROL	16,909	15,785	+7	+1
GI
PENTASA	26,220	27,247	-4	+6
COLAZIDE	2,047	1,814	+13	n/a
GP
AGRYLIN and XAGRID	31,950	38,300	-17	+5
FOSRENOL	4,897	-	n/a	n/a
CALCICHEW	8,147	8,909	-9	n/a
SOLARAZE	2,402	1,582	+52	n/a
REMINYL/RAZADYNE	2,935	2,546	+15	n/a
Other product sales	18,992	19,535	-3
	269,444	264,594	+2

The following discussion includes references to prescription and market share data for the Company’s key products. The source of this data is IMS Health, March 2005. IMS Health is a leading global provider of business intelligence for the pharmaceutical and healthcare industries.

ADDERALL XR

US prescriptions for the three months to March 31, 2005 were up 16% due primarily to a 2% increase in ADDERALL XR’s total share of the US ADHD market, from 23% in March 2004 to 25% in March 2005. There was a 7% increase in the total US ADHD market compared to the same period in 2004.

ADDERALL XR had a 25% share of the total US ADHD market in December 2004 and it maintained this share of the market in March 2005 despite Health Canada’s decision to suspend sales of ADDERALL XR in Canada in February 2005.

Product sales growth was lower than prescription growth for the quarter due mainly to expected wholesaler de-stocking. The wholesaler de-stocking is due to the negotiation of ‘fee for service’ agreements. These agreements, which are commonplace within the industry, change the way significant wholesale distributors are compensated by pharmaceutical manufacturers and should allow for more efficient management of inventory levels held by wholesale distributors.

Shire is continuing to work with Health Canada to review the February 2005 suspension of sales of ADDERALL XR in Canada.

ADDERALL XR’s pediatric marketing exclusivity in the US under the Hatch-Waxman regulations expired on April 11, 2005.

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The Company has filed suits against Barr and Impax in connection with their seeking to market generic versions of ADDERALL XR. For further information see ITEM 1 of Part II of this Form 10-Q: Legal Proceedings. Any decrease in the sales of ADDERALL XR could significantly reduce revenues and earnings.

AGRYLIN and XAGRID

AGRYLIN and XAGRID sales worldwide for the three months to March 31, 2005 were $32.0 million, down 17% primarily due to wholesaler de-stocking in the quarter and provisions for returns following the announcement of the approval of generic versions of AGRYLIN shortly after the quarter end.

AGRYLIN’s pediatric exclusivity expired in September 2004 in the US. AGRYLIN gained EU approval in November 2004 and trades under the name XAGRID. The product will have up to 10 years market exclusivity in accordance with current orphan medicinal product legislation in the EU.

XAGRID was successfully launched in the UK, Germany and France. Sales of XAGRID for the three months to March 31, 2005 were $5.9 million (March 2004: $1.0 million).

PENTASA

Shire entered into a co-promotion agreement with Solvay Pharmaceuticals Inc. in February 2005 for PENTASA. US prescriptions for the three months to March 31, 2005 were up 6% as a result of the joint marketing efforts on the product.

Product sales declined 4% mainly due to wholesaler de-stocking in the three months to March 31, 2005, following the negotiation of the ‘fee for service’ agreements. These stock movements were partially offset by a September 2004 price increase.

PENTASA had an 18% share of the total US oral mesalamine/olsalazine prescription market in March 2005 (March 2004: 17%).

CARBATROL

US prescriptions for the three months to March 31, 2005 were up 1% despite limited promotion of this product by Shire during the quarter. Product sales increased by 7%. The difference between sales growth and prescription growth is due to a price increase in August 2004 and lower sales deductions partially offset by wholesaler de-stocking in 2005.

CARBATROL had a 45% share of the total US extended release carbamazepine prescription market in March 2005 (March 2004: 43%).

The Company has filed suit against Nostrum in connection with its seeking to market generic versions of CARBATROL. For further information see ITEM 1 of Part II of this Form 10-Q: Legal Proceedings.

Royalties

Royalty revenue increased 4% to $58.3 million for the 3 months to March 31, 2005 (2004: $56.1 million). The following table provides an analysis of Shire’s royalty income:

	3 months to March 31,	3 months to March 31,
	2005	2004	change
	$’000	$’000	%
3TC	39,393	38,166	+3
ZEFFIX	6,501	6,338	+3
Others	12,429	11,641	+7
Total	58,323	56,145	+4

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3TC
Royalties from 3TC for the three months to March 31, 2005 were $39.4 million, an increase of 3% compared to the three months to March 31, 2004 ($38.2 million). This was due to the continued growth in the nucleoside analogue market for HIV and the positive impact of foreign exchange movements.

Shire receives 3TC royalties from GSK on worldwide sales, with the exception of Canada where a commercialization partnership with GSK exists. GSK’s worldwide sales of 3TC for the three months to March 31, 2005 were $298 million (2004: $289 million).

ZEFFIX
Royalties from ZEFFIX for the three months to March 31, 2005 were $6.5 million, an increase of 3% compared to the three months to March 31, 2004 ($6.3 million). This was due mainly to the positive impact of foreign exchange movements.

Shire receives ZEFFIX royalties from GSK on worldwide sales, with the exception of Canada where a commercialization partnership with GSK exists. GSK’s worldwide sales of ZEFFIX for the three months to March 31, 2005 were $56 million (2004: $55 million).

Other
Other royalties are primarily in respect of REMINYL (now marketed as RAZADYNE in the US), a product marketed worldwide by Janssen, with the exception of the United Kingdom and the Republic of Ireland where Shire acquired the exclusive marketing rights from May 2004.

Sales of REMINYL/RAZADYNE, a treatment for mild to moderately severe dementia of the Alzheimer’s type, are growing well in the Alzheimer’s market.

On March 1, 2005, the National Institute for Clinical Excellence (NICE) in England and Wales issued a preliminary Appraisal Consultation Document for consultation with stakeholders. This preliminary appraisal recommends that all existing approved products for the symptomatic treatment of mild to moderate Alzheimer's disease in England and Wales should no longer be reimbursable under the National Health Service when used by new patients. This consultation document affects REMINYL in England and Wales. Shire has submitted its views in response to the preliminary Appraisal Consultation Document issued by NICE.

The Company and Janssen Pharmaceutica NV (Janssen) are in ongoing discussions with the European regulatory authorities in relation to their assessment of the data for REMINYL from investigational studies in mild cognitive impairment.

Cost of product sales
For the three months to March 31, 2005, the cost of product sales amounted to 12% of product sales (2004: 13%). The decrease is driven by a change in the product mix, with more income being generated from higher margin products.

Research and development (R&D)
R&D expenditure increased from $38.6 million in the three months to March 31, 2004 to $111.5 million in the three months to March 31, 2005. Expressed as a percentage of total revenues, R&D expenditure was 33% for the three months to March 31, 2005 (2004: 12%). This increase included an initial payment to New River of $50 million in respect of NRP104, which has been expensed in accordance with the Company’s accounting policy. The level of expenditure in the three months to March 31, 2004 was below normal levels due in part to the phasing of project spend and the restatement of R&D costs in respect of continuing operations following the disposal of the vaccines business in the second quarter of 2004. Shire’s pipeline is now well advanced with five projects in late stage development or registration.

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Selling, general and administrative (SG&A)
SGA expenses increased from $132.8 million in the three months to March 31, 2004 to $171.2 million in the three months to March 31, 2005, an increase of 29%. As a percentage of product sales, SG&A expenses were 64% (2004: 50%).

3 months to March 31,	2005	2004	Change
	$M	$M	%
Sales costs	48.0	38.5	+25	%
Marketing costs	69.6	50.9	+37	%
Depreciation and amortization 1	13.6	12.5	+9	%
Other SG&A costs	40.0	30.9	+29	%
Total SG&A costs	171.2	132.8	+29	%

1 Depreciation from manufacturing plants of $0.8 million (2004: $0.6 million) is included in cost of product sales.

Sales costs and marketing costs increased as a percentage of product sales in the three months to March 31, 2004, from 15% to 18% and 19% to 26% respectively. This increase was as expected with additional costs in the three months to March 31, 2005 attributable primarily to four product launches in the first half of 2005, together with the incremental cost associated with the new FOSRENOL sales force recruited in the fourth quarter of 2004. The expected growth in new product sales from the second quarter onwards is expected to increasingly absorb these costs, which are expected to moderate over the course of the full year.

The depreciation charge for the three months to March 31, 2005 was $4.4 million (2004: $3.4 million). Amortization charges were $9.2 million for the three months to March 31, 2005 (2004: $9.1 million).

Reorganization costs

The following costs were incurred in the three months to March 31, 2005:

3 months to March 31,	2005	2004
	$M	$M
Employee severance	1.6	2.4
Relocation costs	-	0.7
Consultancy costs	0.5	-
Duplicate facilities	0.7	-
Other costs	0.1	0.7
	2.9	3.8

For further information see Note 2 to the condensed consolidated financial statements in this Form 10-Q.

Interest income and expense
For the three months to March 31, 2005, the Company received interest income of $9.7 million (2004: $4.0 million). This increase in interest income is due to higher interest rates on US cash deposits.

With the repayment of the convertible loan notes in August 2004, the Company has negligible interest expense for this quarter (2004: $2.1 million).

Other expense, net
For the three months to March 31, 2005, other expense totaled $0.1 million (2004: $4.8 million). In 2004, other expense, net was primarily attributable to the write-down of certain portfolio investments.

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Taxation
The effective rate of tax for the three months to March 31, 2005 was 28% (2004: 26%). At March 31, 2005, net deferred tax assets of $81.3 million were recognized (December 31, 2004: $78.1 million). Realization is dependent upon generating sufficient taxable income to utilize such assets. Although realization of these assets is not assured, management believe it is more likely than not that the deferred tax assets will be realized.

Equity in (losses)/earnings of equity method investees
Losses of $0.2 million were incurred for the three months to March 31, 2005 (2004: $1.0 million earnings). Earnings of $1.4 million, representing a 50% share of earnings from the antiviral commercialization partnership with GSK in Canada (2004: $1.0 million) were offset by the share of losses in the GeneChem and EGS Healthcare Funds of $1.6 million (2004: $nil).

Discontinued operations
During the quarter a provision for $3.1 million, recorded in 2004 as part of the sale of the vaccines business to IDB, was released and this positively impacted net income for the quarter. This adjustment arose from the finalization of the working capital agreement with IDB. For further information of this transaction see Note 2 to the condensed consolidated financial statements in this Form 10-Q.

Liquidity and capital resources

General
The Company’s funding requirements depend on a number of factors, including its development programs; corporate, business and product acquisitions; the level of resources required for the expansion of marketing capabilities as the product base expands; increases in accounts receivable and inventory which may arise as sales levels increase; competitive and technological developments; the timing and cost of obtaining required regulatory approvals for new products; the timing of tax payments and the continuing cash generated from sales of Shire’s key products.

An important part of Shire’s business strategy is to protect its products and technologies through the use of patents, proprietary technologies and trademarks, to the extent available. The Company intends to defend its intellectual property, and as a result may need cash funding for litigation expenses incurred.

The Company ordinarily finances its activities through cash generated from operating activities, private and public offerings of equity and debt securities and the proceeds of asset or investment disposals.

In April the Company signed a definitive agreement to acquire TKT in an all cash transaction for approximately $1.6bn. The current intention is that the cash consideration for the acquisition and ongoing cash requirements for Shire after completion of the acquisition will be met out of the current cash resources of the enlarged group, together with a new debt facility of $500 million. The facility has a term of 364 days, extendable at Shire’s option prior to maturity for a further six months.

Shire anticipates that its operating cash flow together with available cash, cash equivalents and short-term investments and the above mentioned debt facility will be sufficient to meet its anticipated future operating expenses, the cost of acquiring TKT, capital expenditures and debt service and lease obligations as they become due over the next twelve months.

If the Company decides to seek to acquire other businesses, it expects to fund these acquisitions from existing cash resources, the above-mentioned debt facility and possibly through new borrowings and the proceeds of sales of its equity securities if necessary.

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Sources and uses of cash
The following table provides an analysis of the Company’s gross and net cash funds, including restricted cash, as at March 31, 2005 and December 31, 2004:

	March 31, 2005		December 31, 2004
	$’000		$’000
Cash and cash equivalents	1,141,090		1,111,477
Restricted cash	20,688		21,627
Short-term investments	315,702		324,411
Gross cash funds, including restricted cash	1,477,480		1,457,515
Total debt	(116	)	(116	)
Net cash funds	1,477,364		1,457,399

Cash flow activity
Net cash provided by operating activities for the three months to March 31, 2005 was $6.3 million compared to $132.0 million for the three months to March 31, 2004. The reduction in cash generation is primarily due to lower income from continuing operations in the quarter, the $50 million upfront payment to New River and the timing of working capital payments.

Net cash provided by investing activities was $8.5 million in the three months to March 31, 2005. Proceeds of $60 million for the redemption by IDB of it subscription receipts and $8.3 million of decreases in short-term investments and restricted cash were offset primarily by loans made to IDB of $20.4 million, capital expenditure on property, plant and equipment of $20.0 million and a $19.0 million final payment in respect of the acquisition of the exclusive commercialization rights to REMINYL in the UK and Republic of Ireland in 2004. Capital expenditure on property, plant and equipment included $10.6 million leasehold building improvements and $2.1 million on computer equipment for the new Shire US headquarters at Wayne, $2.9 million on software purchases at the Basingstoke Head Office, $2.7 million of factory construction work and $0.7 million of plant equipment for Shire Manufacturing Inc. in the US.

Net cash provided by investing activities was $11.8 million in the three months to March 31, 2004. This was primarily due to the reduction of $16.8 million of cash placed on short-term deposit and a reduction to restricted cash of $3.3 million partially offset by $8.3 million of net capital expenditure on long-term investments and property, plant and equipment.

The Company’s financing activities for the three months to March 31, 2005 and March 31, 2004 provided $16.4 million (2004: $3.0 million), relating to the exercise of employee stock options.

Cash requirements

Aggregate contractual obligations

Contractual obligations
As of March 31, 2005 the Company’s contractual obligations had altered from those disclosed in the Table of Contractual Obligations in the Company’s 2004 Form 10-K as follows:

Interests in companies and partnerships
As of March 31, 2005, the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $20.2 million (December 31, 2004: $22.0 million) of which $12.4 million is committed to in 2005 and a further $7.8 million could be payable in 2005, depending on the timing of capital calls.

Manufacturing facility
The Company has committed to the expansion and modification of its manufacturing facility at Owings Mills, Maryland to facilitate the production of FOSRENOL. The Company has committed to spend a further $3.1 million by the end of 2005 and has an additional commitment of $3.4 million for the design and construction of a technology center at Owings Mills, Maryland, which is expected to be incurred in 2005.

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Wayne, Pennsylvania fit out
The Company is in the process of fitting out its new US headquarters at Wayne, Pennsylvania. At March 31, 2005 the Company had an outstanding commitment of $9.2 million.

REMINYL
During the three months to March 31, 2005 the Company paid the remaining $19 million due in connection with the acquisition of the exclusive commercialization rights to REMINYL in the UK and Republic of Ireland in 2004.

IDB
As part of the sale of the vaccines business on September 9, 2004, Shire entered into an agreement to provide IDB with a loan facility of up to $100 million, which can be drawn down over the four years following completion. As of March 31, 2005 IDB had drawn down $77.2 million under the facility leaving an outstanding commitment of $22.8 million.

Other
The Company has assumed that other long-term liabilities, which comprise primarily insurance provisions ($10.0 million), SERP liabilities ($2.9 million) and long-term bonuses ($1.2 million), are due before 2008.

In addition to contractual obligations referred to above the Company has certain milestones and other commitments. The most significant are as follows:

NRP104
In connection with the Company’s collaboration with New River to commercialize NRP104, the Company has an obligation to make certain payments on the achievement of milestones. In addition to the $50 million upfront payment expense as an R&D cost in the period, $50 million is due to be paid upon the US Food and Drug Administration’s (FDA’s) acceptance of filing of the New Drug Application (NDA); up to $300 million following the first commercial sale of the product, depending on the characteristics of the approved product labelling; $100 million as a sales bonus on achieving a significant sales target; and $5 million following the first commercial sale in certain specified EU markets.

MTS
In connection with the Company’s purchase of MTS in 2003, the Company has an obligation to make certain payments on the achievement of milestones. The Company is committed to pay $50 million upon regulatory approval of the product and to make milestone payments of up to $75 million, which are linked to future sales performance. The Company expects to resubmit MTS to the FDA for approval in 2005.

FOSRENOL patent rights
In connection with the Company’s purchase of the global patents for FOSRENOL, Shire will pay AnorMED Inc. $6 million when it is approved in the relevant European countries and $6 million upon receipt of regulatory approval in Japan.

Other R&D commitments
As of March 31, 2005, the Company had commitments of $9.7 million on achievement of specified milestones.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the Company’s market risk exposure since December 31, 2004. Item 7A of the Company’s Annual Report on Form 10-K for the year to December 31, 2004 contains a detailed discussion of the Company’s market risk exposure in relation to interest rate market risk and foreign exchange market risk.

ITEM 4. Controls and Procedures

As of March 31, 2005, the Company, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, had performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures. The Company’s management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature can provide only reasonable assurance regarding management’s control objectives. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective at the reasonable level of assurance for gathering, analyzing and disclosing the information the Company is required to disclose in the reports it files under the Securities Exchange Act of 1934, within the time periods specified in the SEC’s rules and forms.

There has been no change in the Company’s internal control over financial reporting that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

There are various legal proceedings brought by and against the Company that are discussed in the Company’s Annual Report on Form 10-K for the year to December 31, 2004. A summary of and material updates to the proceedings discussed in the Company’s Annual Report on Form 10-K are set forth below. There is no assurance that the Company will be successful in these proceedings and if it is not there may be a material impact on the Company’s results and financial position.

ADDERALL XR

(a) Barr Laboratories, Inc.

Shire’s extended release "once daily" version of ADDERALL, ADDERALL XR is covered by US patent No. 6,322,819 (the '819 Patent) and US patent No. 6,605,300 (the ‘300 Patent). In January 2003 the Company was notified that Barr Laboratories, Inc. (Barr) had submitted an Abbreviated New Drug Application (ANDA) under the Hatch-Waxman Act seeking permission to market its generic versions of the 5 mg, 10 mg, 15 mg, 20 mg, 25 mg and 30 mg strengths of ADDERALL XR (Barr’s ANDA products) prior to the expiration date of the Company’s ‘819 Patent, and alleging that the ‘819 Patent is not infringed by Barr's ANDA products. In August 2003 Shire was notified that Barr was also seeking permission to market Barr’s ANDA products prior to the expiration date of the ‘300 Patent and alleging that the ‘300 Patent is invalid. Shire Laboratories Inc (Shire Laboratories) filed suit against Barr for infringement of the ‘819 Patent in February 2003 and for infringement of the ‘300 Patent in September 2003. The schedules for the lawsuits against Barr with respect to the ‘819 and ‘300 Patents were consolidated in December 2003 and a trial date is scheduled for January 2006. The Company is seeking a ruling that Barr’s ANDA and ANDA products infringe the ‘819 and ‘300 Patents and its ANDA should not be approved before the expiration date of the patents. The Company is also seeking injunctions to prevent Barr from commercializing its ANDA products before the expiration of the ‘819 and ‘300Patents, damages in the event that Barr should engage in such commercialization, and its attorneys’ fees and costs. On September 27, 2004 Barr filed an amended Answer, Affirmative Defense and Counterclaim in which Barr added the following counterclaims: invalidity of the ‘819 patent, non-infringement of the ‘300 Patent and unenforceability of the ‘819 and ‘300 Patents due to inequitable conduct. Shire has asserted affirmative defenses, alleging, among other things, that Barr has waived its right to assert the counterclaims set forth in its September 27, 2004 amended answers.

(b) Impax Laboratories, Inc.

In November 2003, Shire was notified that Impax Laboratories, Inc. (Impax) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of the 30 mg strength of ADDERALL XR (Impax’s ANDA product) prior to the expiration date of the ‘819 and ‘300 Patents. In December 2003, Shire Laboratories filed suit against Impax for infringement of the ‘819 and ‘300 Patents. The Company is seeking a ruling that Impax’s ANDA

36

product infringes the ‘819 and ‘300 Patents and that its ANDA should not be approved before the expiration date of the ‘819 and ‘300 Patents. The Company is also seeking injunctions to prevent Impax from commercializing its ANDA product before the expiration of the ‘819 and ‘300 Patents, damages in the event that Impax should engage in such commercialization, and its attorneys’ fees and costs. Impax’s affirmative defenses include non-infringement and invalidity of both the ‘819 and ‘300 Patents.

In December 2004, Shire received an additional notification from Impax advising of the filing of an amendment to its ANDA for a generic version of the 5 mg, 10 mg, 15 mg, 20 mg and 25 mg strengths of ADDERALL XR in addition to the 30mg strength, the subject of Impax’s initial ANDA. In January 2005, Shire Laboratories filed suit against Impax for infringement of the ‘819 and ‘300 Patents. The Company is seeking a ruling that Impax’s amended ANDA infringes the ‘819 and ‘300 patents and should not be approved before the expiration dates of the ‘819 and ‘300 Patents. The Company is also seeking an injunction to prevent Impax from commercializing its amended ANDA products before the expiration of the ‘819 and ‘300 Patents, damages in the event that Impax should engage in such commercialization, as well as its attorneys’ fees and costs. Impax’s affirmative defenses include non-infringement, invalidity and unenforceability of both the ‘819 and ‘300 Patents. Impax is also requesting that costs be assessed against the Company.

The Delaware District Court had set an October 11, 2005 trial date for the first Impax case. Following a scheduling conference with the same Court in the second case, a consolidated February 23, 2006 trial date has now been set for both cases.

(c) Colony Pharmaceuticals Inc.

In December 2004, Shire was notified that Colony Pharmaceuticals Inc. (Colony) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic versions of the 5 mg, 10 mg, 15 mg, 20 mg, 25 mg and 30 mg strengths of ADDERALL XR prior to the expiration date of the Company’s ‘819 and ‘300 Patents. Shire has decided not to sue Colony.

(d) Teva Pharmaceuticals USA, Inc.

In February 2005, Shire was notified that Teva Pharmaceuticals USA, Inc. (Teva) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic versions of the 10 mg and 30 mg strengths of ADDERALL XR prior to the expiration date of the Company’s ‘819 and ‘300 Patents. Shire has decided not to sue Teva.

None of Barr, Impax, Colony or Teva may launch their generic versions of ADDERALL XR before they receive final FDA approval of their respective ANDAs. In respect of Barr’s and Impax’s ANDAs, the lawsuits triggered stays of final FDA approval of up to 30 months from the date of the Company’s receipt of, respectively, Barr’s and Impax’s notice letters. Even if Barr and/or Impax receive tentative FDA approval of their ANDAs, neither of them can lawfully launch their generic versions before the earlier of the expiration of the respective stays (Barr - February 2006; Impax - May 2006 in the case of the 30 mg strength and June 2007 in the case of the 5 mg, 10 mg,15 mg, 20 mg and 25 mg strengths) or a district court decision in its favor. In the event that the Company does not prevail in the Barr suit, Barr could be in a position to market its ANDA products upon FDA final approval of its ANDA. In the event the Company does not prevail in the Impax suit, Impax could be in a position to market its ANDA product upon FDA final approval of its ANDA and upon expiry of any exclusivity that Barr may hold.

Neither Colony nor Teva may market their ANDA products until FDA final approval of their ANDAs and upon the expiration of the first to file’s exclusivity rights.

The Hatch-Waxman marketing exclusivity period for ADDERALL XR expired on April 11, 2005.

CARBATROL

In August 2003 the Company was notified that Nostrum Pharmaceuticals, Inc. (Nostrum) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of the 300 mg strength of CARBATROL (Nostrum’s ANDA product) prior to the expiration date of the Company’s US patents for CARBATROL, US patent No. 5,912,013 (the ‘013 Patent) and US patent No. 5,326,570 (the ‘570 Patent). The notification alleges that the ‘013 and ‘570 Patents are not infringed by Nostrum’s ANDA product. On September 18, 2003 Shire Laboratories filed a complaint in the United States District Court for the District of New Jersey alleging infringement of these two patents by Nostrum’s ANDA and ANDA product. The Company was seeking a ruling that Nostrum’s ANDA infringes the ‘013 and ‘570 Patents and should not be approved before the expiration date of the ‘013 and ‘570 Patents. The Company was also seeking an injunction to prevent Nostrum from commercializing its ANDA product before the expiration of the ‘013

37

and ‘570 Patents, damages in the event that Nostrum should engage in such commercialization, as well as its attorneys’ fees and costs. On January 23, 2004 the Company amended the Complaint to delete the allegations with respect to the ‘013 Patent while maintaining the suit with respect to the ‘570 Patent. By way of counterclaims Nostrum is seeking a declaration that the ‘570 and ‘013 Patents are not infringed by Nostrum’s ANDA product. Nostrum was also seeking actual and punitive damages for alleged abuse of process by Shire. On July 12, 2004 the Court dismissed Nostrum’s abuse of process counterclaim for failure to state a claim upon which relief can be granted. On December 10, 2004 Nostrum filed a summary judgment motion seeking a declaration of non-infringement of the ‘570 Patent. Shire’s opposition to this motion was filed on January 14, 2005. Oral argument has been set by the Court for May 31, 2005. The case is now in the expert discovery phase. No trial date has been set.

Nostrum may not launch a generic version of CARBATROL before it receives final approval of its ANDA from the FDA. The lawsuit triggered a stay of FDA approval of up to 30 months from Shire’s receipt of Nostrum’s notice letter. Even if Nostrum receives tentative approval from the FDA for its ANDA, it cannot lawfully launch its generic version before the earlier of the expiration of the stay (February 2006) or a district court decision in its favor. In the event that the Company does not prevail in the Nostrum suit, then Nostrum could be in a position to market its 300 mg extended-release carbamazepine product upon FDA final approval of its ANDA.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

ITEM 3. Defaults Upon Senior Securities

None

ITEM 4. Submission of Matters to a Vote of Security Holders

None

ITEM 5. Other Information

None

38

ITEM 6. EXHIBITS

Exhibits

10.1* Collaboration Agreement, dated January 31, 2005 by and among Shire LLC, Shire Pharmaceuticals plc and New River Pharmaceuticals Inc. (providing for the division of the agreement into two separate agreements: one relating to the United States and the other relating to the world, excluding the United States).

10.2* United States Collaboration Agreement, dated March 31, 2005 by and among Shire LLC, Shire Pharmaceuticals plc and New River Pharmaceuticals Inc. (being the agreement noted in Exhibit 10.1 relating to the United States).

10.3* ROW Territory License Agreement, dated March 31, 2005 by and among Shire Pharmaceuticals Ireland Limited, Shire Pharmaceuticals plc and New River Pharmacuticals Inc. (being the agreement noted in Exhibit 10.1 relating to the world, excluding the United States).

31.1 Certification of Matthew Emmens pursuant to Rule 13a – 14 under The Exchange Act.

31.2 Certification of Angus Russell pursuant to Rule 13a – 14 under The Exchange Act.

32 Certification of Matthew Emmens and Angus Russell pursuant to Section 906 of the Sarbanes - Oxley Act of 2002.

* Certain portions of this exhibithave been omitted intentionally, subject to a confidential treatment request. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

39

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SHIRE PHARMACEUTICALS GROUP PLC (Registrant)
Date: May 9, 2005
	By:	/s/ Matthew Emmens
		Matthew Emmens
		Chief Executive Officer
Date: May 9, 2005
	By:	/s/ Angus Russell
		Angus Russell
		Chief Financial Officer

40

Exhibit Index

Exhibit No.	Description
10.*1	Collaboration Agreement, dated January 31, 2005 by and among Shire LLC, Shire Pharmaceuticals plc and New River Pharmaceuticals Inc. (providing for the division of the agreement into two separate agreements: one relating to the United States and the other relating to the world, excluding the United States).
10.2*	United States Collaboration Agreement, dated March 31, 2005 by and among Shire LLC, Shire Pharmaceuticals plc and New River Pharmaceuticals Inc. (being the agreement noted in Exhibit 10.1 relating to the United States).
10.3*	ROW Territory License Agreement, dated March 31, 2005 by and among Shire Pharmaceuticals Ireland Limited, Shire Pharmaceuticals plc and New River Pharmaceuticals Inc. (being the agreement noted in Exhibit 10.1 relating to the world, excluding the United States).
31.1	Certification of Matthew Emmens pursuant to Rule 13a-14 under The Exchange Act.
31.2	Certification of Angus Russell pursuant to Rule 13a-14 under The Exchange Act.
32	Certification of Matthew Emmens and Angus Russell pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Certain portions of this exhibit have been omitted intentionally, subject to a confidential treatment request. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

41

EX-10.1

Exhibit 10.1

*Represents language for which confidential treatment has been requested.

COLLABORATION AGREEMENT

BY AND AMONG

SHIRE LLC

SHIRE PHARMACEUTICALS PLC

AND

NEW RIVER PHARMACEUTICALS INC.

DATED AS OF JANUARY 31,2005

TABLE OF CONTENTS
			PAGE
ARTICLE 1.		DEFINITIONS	1
ARTICLE 2.		MANAGEMENT OF COLLABORATION	13
	2.1	General	13
	2.2	Joint Development Committee (JDC)	13
	2.3	Joint Marketing Committee (JMC)	14
	2.4	Joint Supply Committee (JSC)	15
	2.5	Joint Intellectual Property Committee (JIPC)	16
	2.6	General Committee Membership and Procedures	17
	2.7	Committee Decision-Making	18
ARTICLE 3.		DEVELOPMENT AND REGULATORY RESPONSIBILITIES	19
	3.1	Overview	19
	3.2	Development Plans	20
	3.3	Development in the US Territory for ADHD	21
	3.4	Development in the ROW Territory for ADHD and Other Indications	23
	3.5	Development in the US Territory for Indications other than ADHD	25
	3.6	Shared Expenses	27
	3.7	Use of Third Parties	28
	3.8	Right to Audit	28
	3.9	Assistance	28
	3.10	Compliance with Laws	28
ARTICLE 4.		COMMERCIALIZATION OF COLLABORATION PRODUCTS	29
	4.1	Principles of Commercialization	29
	4.2	Sales and Distribution of Collaboration Products to Third Parties	29
	4.3	Marketing Plans and Budgets for the US Territory	29
	4.4	Marketing Plans for ROW Territory	30
	4.5	Regulatory Obligations During Commercialization	30
	4.6	Diligence in Commercialization	31
	4.7	Cost of Commercialization	31
	4.8	Use of Third Parties	31
	4.9	Promotional Materials	32
	4.10	Provisions Applicable to Sales Representatives	32
	4.11	Reporting	35
	4.12	Compliance with Laws	35

i

TABLE OF CONTENTS
(CONTINUED)
			PAGE
ARTICLE 5.		CO-PROMOTION OF COLLABORATION PRODUCTS	34
	5.1	Option	34
	5.2	Exercise of Option	34
	5.3	Co-Promotion Period	35
	5.4	Amendment of Marketing Plan to Include Co-Promotion Activities	35
	5.5	Scope	35
	5.6	Advertising and Promotional Materials	35
	5.7	Shipment, Storage and Allocation of Samples	36
	5.8	Training	36
	5.9	Provisions Applicable to All New River Sales Representatives	37
ARTICLE 6.		MANUFACTURE OF COLLABORATION PRODUCTS	37
	6.1	Manufacture and Supply – US Territory	37
	6.2	Specifications and Terms of Supply; Multiple Sources	38
	6.3	Manufacture by Shire; Commercial Supply by Shire	38
	6.4	Supply Terms	39
	6.5	Manufacture and Supply – ROW Territory	39
ARTICLE 7.		FINANCIAL TERMS	40
	7.1	Licensing Fee	40
	7.2	Milestone Payments	40
	7.3	Refunds by New River	41
	7.4	Sharing of US Product Profit	41
	7.5	Royalties on Net Sales in ROW Territory	42
ARTICLE 8.		PAYMENT TERMS	43
	8.1	Payment Method	43
	8.2	Payment Schedules; Reports	44
	8.3	Currency Conversion	44
	8.4	Legal Restrictions	44
	8.5	Taxes	44
	8.6	Records Retention; Audit	45
ARTICLE 9.		LICENSES	46
	9.1	Licenses to Shire	46
	9.2	Licenses to New River	46
	9.3	Sublicensing	47

ii

TABLE OF CONTENTS
(CONTINUED)
			PAGE
	9.4	Scope of Licenses	47
	9.5	No Implied Licenses	47
	9.6	Exclusivity	47
	9.7	Nonassertion	47
	9.8	[*]	47
ARTICLE 10.		CONFIDENTIALITY	48
	10.1	Confidential Information	48
	10.2	Publicity; Filing of this Agreement	49
	10.3	Publication	50
	10.4	Use of Names	50
	10.5	Confidentiality of this Agreement	50
	10.6	Disclosures Under Existing NDA	50
	10.7	Survival	51
ARTICLE 11.		OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT
		RIGHTS	51
	11.1	Ownership	51
	11.2	Disclosures; Disputes Regarding Inventions	51
	11.3	Patent Filings	52
	11.4	Third-Party Patent Rights	54
	11.5	Enforcement and Defense of Patents	54
	11.6	Notice of Certification	57
	11.7	Patent Term Extensions	57
	11.8	Listing of Patents	57
	11.9	Trademarks and Copyrights	57
ARTICLE 12.		REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY	60
	12.1	Representations, Warranties and Covenants	60
	12.2	Limitation on Representations or Warranties	64
	12.3	Performance by Affiliates	65
	12.4	Disclaimer of Warranty	65
	12.5	Limitation of Liability	65
	12.6	Essential Basis	65
ARTICLE 13.		TERM AND TERMINATION	65
	13.1	Term	65

iii

TABLE OF CONTENTS
(CONTINUED)
			PAGE
	13.2	Breaches (General)	66
	13.3	Allegations of Material Breach	66
	13.4	Other Termination by Shire	68
	13.5	Other Termination By New River	68
	13.6	Termination for Government Action	68
ARTICLE 14.		EFFECTS OF TERMINATION	69
	14.1	Post-Termination Activities by Shire	69
	14.2	Post-Termination Activities by New River	71
	14.3	Accrued Rights	73
	14.4	Confidential Information	73
	14.5	Survival	73
	14.6	Liability Following Termination	73
ARTICLE 15.		INDEMNIFICATION; INSURANCE	73
	15.1	Indemnification	73
	15.2	Notice of Claim	74
	15.3	Control of Defense	74
	15.4	Right to Participate in Defense	75
	15.5	Settlement	75
	15.6	Cooperation	75
	15.7	Expenses of the Indemnified Party	75
	15.8	Product Claims	76
	15.9	Insurance	76
	15.10	Guaranty	77
ARTICLE 16.		DISPUTE RESOLUTION	77
	16.1	Disputes	77
	16.2	Litigation	77
	16.3	Injunctive Relief	77
	16.4	Governing Law	77
ARTICLE 17.		MISCELLANEOUS	78
	17.1	Entire Agreement; Amendment	78
	17.2	Force Majeure	78
	17.3	Notices	78
	17.4	Independent Contractors	79

iv

TABLE OF CONTENTS
(CONTINUED)
			PAGE
	17.5	Non-Solicitation	79
	17.6	Maintenance of Records	79
	17.7	United States Dollars	80
	17.8	No Strict Construction	80
	17.9	Assignment	80
	17.10	Counterparts	80
	17.11	Further Actions	80
	17.12	Severability	80
	17.13	Ambiguities	80
	17.14	Headings	81
	17.15	No Waiver	81
	17.16	ROW Territory Agreement	81
EXHIBIT A		DETERMINATION OF CERTAIN ACCOUNTING TERMS	A-1
EXHIBIT B		[*]	B-1
EXHIBIT C		INITIAL DEVELOPMENT PLAN	C-1
EXHIBIT D		ADDITIONAL SUPPLY TERMS	D-1
EXHIBIT E		JOINT PRESS RELEASE	E-1
EXHIBIT F		TECHNICAL TRADE SECRETS	F-1
EXHIBIT G		CERTAIN PRODUCTS OF SHIRE	G-1

v

COLLABORATION AGREEMENT

     THIS COLLABORATION AGREEMENT (the “Agreement”) is dated as of January 31, 2005(the “Effective Date”) by and among SHIRE LLC, a Kentucky limited liability company having a principal place of business at 9200 Brookfield Court, Florence, Kentucky 41042 (“Shire”),SHIRE PHARMACEUTICALS GROUP PLC,a British public limited company having a principal place of business at Hampshire International Business Park, Chineham, Basingstoke, England RG24 8EP, solely for purposes of the provisions of Section 15.10 of this Agreement,and NEW RIVER PHARMACEUTICALS INC., a Virginia corporation having a principal place of business at 1881 Grove Avenue, Radford, Virginia 24141 (“New River”). Shire and New River are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

     WHEREAS, New River is a specialty pharmaceutical company focused on developing novel pharmaceuticals that are safer and improved versions of widely-prescribed pharmaceutical products, and is clinically developing a proprietary amphetamine conjugate for the treatment of attention deficit/hyperactivity disorder in pediatric and adult patients;

     WHEREAS, Shire is a worldwide, specialty pharmaceutical company engaged in the development, manufacturing and marketing of pharmaceutical products; and

     WHEREAS, Shire and New River desire to establish a broad collaboration for the further development and commercialization of Compound, with the objective of utilizing the areas of expertise of both New River and Shire to provide products to patients.

     NOW,THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the Parties, intending to be legally bound, agree as follows:

ARTICLE 1.
DEFINITIONS

      The following terms shall have the following meanings as used in this Agreement:

     1.1“Act” means the United States Federal Food, Drug and Cosmetics Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder.

      1.2“ADHD” means attention deficit/hyperactivity disorder in human beings.

     1.3“Adolescent” means a human being that has attained the age of thirteen (13) but is less than eighteen (18) years of age.

      1.4“Adult” means a human being that has attained the age of eighteen (18).

     1.5“Affiliate” means a Person that controls, is controlled by or is under common control with a Party. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct the management and policies of such Person, whether by the ownership of at least fifty percent

(50%) of the voting stock of such Person (it being understood that the direct or indirect ownership of a lesser percentage of such stock shall not necessarily preclude the existence of control), or by contract or otherwise.

     1.6“Allowable Expenses” means those expenses incurred after the First Commercial Sale of a Collaboration Product which are consistent with the budget set forth in the applicable Marketing Plan, and are specifically attributable or reasonably allocable to such Collaboration Product in the US Territory, and shall consist of (i) Cost of Goods Sold, (ii) Marketing Expenses, (iii) Distribution Expenses, (iv) product liability insurance expenses, and (v) Regulatory Expenses (as such terms may be defined in this Article 1 or in Exhibit A). Allowable Expenses shall exclude Development Expenses, even if incurred after the First Commercial Sale of a Collaboration Product in the US Territory, and shall exclude any costs that are deductible from Net Sales under the definition thereof (e.g., distributor fees).

     1.7“Business Day” means any day other than (i) Saturday or Sunday or (ii) any other day on which banks in New York, New York, United States or London, England are permitted or required to be closed.

     1.8“cGCP” means the current Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials, including the requirements in 21 C.F.R. Parts 11, 50, 54, 56, 312, and 314, that provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected.

     1.9“cGLP” means current Good Laboratory Practices (i) as promulgated under the Act at 21 C.F.R. Part 58, as the same may be amended or re-enacted from time to time and (ii) as required by law in countries other than the United States where non-clinical laboratory studies are conducted.

     1.10“cGMP” means all applicable standards relating to manufacturing practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products, including (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 210 and 211 and The Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products as each may be amended from time to time, (ii) the principles detailed in the ICH Q7A guidelines, (iii) if Shire notifies New River that Shire intends to Commercialize a Collaboration Product in a country, Laws promulgated by any Governmental Authority in such country having jurisdiction over the Manufacture of Compound or Collaboration Product, or (iv) if Shire notifies New River that Shire intends to Commercialize a Collaboration Product in a country, guidance documents promulgated by any Governmental Authority in such country having jurisdiction over the Manufacture of Compound or Collaboration Product (including but not limited to advisory opinions, compliance policy guides and guidelines), which guidance documents are being implemented within the pharmaceutical manufacturing industry.

      1.11“Child” means a human being that has not attained the age of thirteen (13).

     1.12 “Collaboration Product” means a pharmaceutical product containing or comprising Compound in any dosage form alone, or in combination with, one or more other pharmaceutically active ingredients, and any and all Improvements thereto.

2

     1.13 “Combination Product” means any Collaboration Product that contains the Compound and one or more pharmaceutically active ingredients in addition to Compound, and any and all Improvements thereto.

     1.14“Commercialization” means any and all activities directed to the commercial Manufacturing, marketing, offering for sale and selling of a Collaboration Product, including Pre-Marketing, advertising, educating, planning, marketing, promoting, distributing and conducting market and product support studies and post-marketing safety surveillance and reporting.

      1.15“Committee” means the JDC, JMC, JSC, or JIPC, as the case may be.

      1.16“Compound” has the meaning set forth on Exhibit F.

     1.17“Control” means, with respect to any intellectual property right or other intangible property, that a Party or one of its Affiliates owns or has a license or sublicense to such item or right, and has the ability to grant access, license or sublicense in or to such right without violating the terms of any agreement or other arrangement with any Third Party.

     1.18“Controlled Substances Act” means the United States Controlled Substances Act, as amended (21 U.S.C. 801 et seq).

     1.19“Co-Promotion” means those Detailing and promotional activities (including without limitation performing Sales Calls) with respect to a Co-Promote Product undertaken by New River Sales Representatives to encourage appropriate prescribing of such Co-Promote Product in the US Territory.

     1.20“Cost of Goods Sold” means the cost of Collaboration Product sold in finished form by Shire or any of its Affiliates or sublicensees to a Third Party, as calculated in the manner set forth in Exhibit A. The term “Cost of Goods” has a separate meaning as set forth in Exhibit A.

     1.21“Detail” or “Detailing” means, with respect to a Collaboration Product, the communication by a Sales Representative during a Sales Call (a) involving face-to-face contact or by means of an e-detail or detailing through video, (b) describing in a fair and balanced manner the FDA-approved indicated uses and other relevant characteristics of such Collaboration Product, (c) using the Promotional Materials in an effort to increase the prescribing and/or hospital ordering preferences of a Collaboration Product for its FDA-approved indicated uses, and (d) made at such medical professional’s office, in a hospital, at marketing meetings sponsored by a Party for the Collaboration Products or other appropriate venues conducive to pharmaceutical product informational communication where the principal objective is to place an emphasis, either primary or secondary, on a Collaboration Product and not simply to discuss a Collaboration Product with such medical professional. For the avoidance of doubt, discussions at conventions or other meetings not specifically sponsored by a Party for a Collaboration Product shall not constitute “Details” or “Detailing”.

     1.22“Development” means all activities relating to obtaining Regulatory Approval of a Collaboration Product, including all test method development, stability testing, toxicology, formulation, process development, cGMP audits (but only those performed prior to Regulatory Approval and excluding any audits for commercial Manufacture), cGLP audits, cGCP audits, validation, quality assurance/quality control development, preclinical and

3

clinical testing and studies, regulatory affairs and outside counsel regulatory legal services relating to any of the foregoing, and any activities relating to the Manufacture of Collaboration Products other than commercial quantities thereof. For the avoidance of doubt, the conduct of Phase III-B Clinical Studies will be considered Development.

     1.23“Development Expenses” means the expenses incurred by a Party that are consistent with a Development Plan and are specifically attributable or reasonably allocable to the Development of a Collaboration Product. Development Expenses shall include, but are not limited to, the following costs incurred for the Development of a Collaboration Product: the cost of studies on the toxicological, pharmacokinetic, metabolic or clinical aspects of a Collaboration Product directed to obtaining Regulatory Approval of a Collaboration Product, the cost of Phase III-B Clinical Trials, and costs (and related fees) for preparing, submitting, reviewing or developing data or information for the purpose of submission to a Governmental Authority to obtain Regulatory Approval of a Collaboration Product, and manufacturing process development and scale-up for Collaboration Products in bulk and finished form. Development Expenses shall exclude any [*] incurred by a Party in connection with the Development of a Collaboration Product.

      1.24“Development Plan” shall have the meaning set forth in Section 3.2.1.

     1.25“Diligent Efforts” means the carrying out of obligations or tasks consistent with the reasonable best practices of the pharmaceutical industry for the development or commercialization of a pharmaceutical product having similar market potential, profit potential or strategic value as the applicable Collaboration Product, based on conditions then prevailing. Diligent Efforts requires that the Party, at a minimum: (a) determine the general industry practices with respect to the applicable activities; (b) reasonably promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis; (c) set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations; and (d) make and implement decisions and allocate resources designed to advance progress with respect to such objectives.

     1.26“Drug Approval Application” means an application for Regulatory Approval required before commercial sale or use of a Collaboration Product as a drug in a regulatory jurisdiction, including a new drug application (“NDA”) or supplemental new drug application (“SNDA”) or any amendments thereto submitted to the FDA.

     1.27“FDA” means the United States Food and Drug Administration or any successor federal agency thereto.

      1.28“Field” means all human and veterinary pharmaceutical uses.

     1.29“Financial Statement” means a financial statement in a form as may be reasonably agreed upon by the Parties from time to time in accordance with the terms of this Agreement.

     1.30“First Commercial Sale” means, with respect to a Collaboration Product and on a country-by-country basis, the first commercial sale after receipt of Regulatory Approval of such Collaboration Product in such country. Sales for clinical studies, compassionate use,named patient programs, sales under a treatment IND, test marketing, any nonregistrational studies, or any similar instance where the Collaboration Product is supplied

4

with or without charge shall not constitute a First Commercial Sale. For clarity, it is understood and agreed that the First Commercial Sale of a Collaboration Product for ADHD in the US Territory shall not occur until the receipt of Regulatory Approval, including the receipt by New River of written notification from the FDA of approval of the Drug Approval Application [*] for such Collaboration Product, and New River has provided such written notification to Shire.

     1.31“Generic Product” means, with respect to a Collaboration Product and on a country-by-country basis, a product that includes an active ingredient that is the same as the Compound, including without limitation, any product which is submitted for Regulatory Approval through an abbreviated NDA (“ANDA”), an application under Section 505(b)(2) of the Act or foreign equivalent of the foregoing that references any NDA or SNDA or any foreign equivalent thereof for the Collaboration Product.

     1.32“Governmental Authority” means any court, tribunal, arbitrator, agency, legislative body, commission, official or other instrumentality of (i) any government of any country, (ii) a federal, state, province, county, city or other political subdivision thereof or (iii) any supranational body, including without limitation the European Agency for the Evaluation of Medicinal Products.

     1.33“Improvement” means any enhancement or modification of (i) a Collaboration Product, (ii) the Compound’s or Collaboration Product’s use, dosage form, indication, line extension, presentation or formulation or (iii) the process or method for the Manufacture of the Compound or Collaboration Product, in each case whether or not patentable, that is developed by or for, invented or acquired by, or comes under the Control of, New River or Shire during the Term.

     1.34“IND” means an Investigational New Drug Application filed with FDA or a similar application filed with an applicable Regulatory Authority outside of the United States such as a clinical trial application (CTA) or a clinical trial exemption (CTX).

     1.35“Invention” means any discovery (whether patentable or not) conceived during the Term and potentially useful for the Manufacture, use, Development or Commercialization of the Compound or a Collaboration Product.

     1.36“Joint Invention” means an Invention that is conceived jointly by an employee of, or person under an obligation of assignment to, each of New River and Shire.

     1.37“Know-How” means any non-public information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation, databases, ideas, discoveries, inventions, trade secrets, practices, methods, tests, assays, techniques, specifications, processes, formulations, formulae, knowledge, know-how, skill, experience, materials, including pharmaceutical, chemical and biological materials, products and compositions, scientific, technical or test data (including pharmacological, biological, chemical, biochemical, toxicological and clinical test data), analytical and quality control data, stability data, studies and procedures, drawings, plans, designs, diagrams, sketches, technology, documentation, and patent-related and other legal information or descriptions.

     1.38“Law” or “Laws” means all laws, statutes, rules, codes, regulations, orders, judgments and/or ordinances of any Governmental Authority.

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     1.39“Licensed Know-How” means all Know-How that is Controlled by New River as of the Effective Date or at any time during the Term and that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or a New River Invention; provided, however, that Know-How Controlled by New River disclosing New River’s proprietary Carrierwave™ technology shall not be included in Licensed Know-How except to the extent necessary for Shire to exercise its rights and perform its obligations under this Agreement. Notwithstanding anything herein to the contrary, Licensed Know-How shall exclude Licensed Patents.

     1.40“Licensed Patent” means a Patent that (i) claims the Manufacture, use, Development, Commercialization and/or export of the Compound, a Collaboration Product and/or a New River Invention, and (ii) is Controlled by New River as of the Effective Date or at any time during the Term. For the avoidance of doubt, all New River Collaboration Patents shall be considered Licensed Patents.

     1.41“Losses” means any and all amounts paid or payable to Third Parties with respect to a Third Party Claim, including without limitation, damages (including all incidental and consequential damages), deficiencies, defaults, awards, settlement amounts, assessments, fines, dues, penalties, costs, liabilities, obligations, taxes, liens, losses, lost profits, fees and expenses (including, without limitation, court costs, interest and reasonable fees of attorneys, accountants and other experts).

     1.42“Major EU Market” means each of France, Germany, the United Kingdom, Italy and Spain.

     1.43“Manufacture” means all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, including but not limited to manufacturing Compound or supplies for Development, manufacturing Collaboration Product for commercial sale, packaging, in-process and finished product testing, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, ongoing stability tests and regulatory activities related to any of the foregoing.

     1.44“Marketing Plan”means a written marketing plan and budget for a Collaboration Product during an applicable time period that contains at least the following for the relevant time period: (i) a rolling, good faith forecast of [*] for at least four (4) full, consecutive calendar quarters; (ii) general strategies and programs for promoting, Detailing and marketing such Collaboration Product; and (iii) the definitions of the relative roles, levels, types of efforts and spending for such period.

     1.45“Net Sales“means, with respect to a Collaboration Product, the amount invoiced by Shire, its Affiliates or sublicensees for sales of such Collaboration Product to a Third Party (“Invoiced Amount”) less: (i) transportation charges, freight and insurance (but only insurance related to protecting the particular shipment against physical loss or damage); (ii) taxes (other than taxes based on income), tariffs, customs duty, excise or other duty and any other governmental charges, all to the extent imposed upon the sale, transportation or delivery of such Collaboration Product and paid by the seller; (iii) Third Party distributor fees; (iv) trade discounts, quantity discounts, cash discounts, rebates, reimbursements, cooperative advertising allowances, credits or chargebacks actually granted, allowed or incurred in the ordinary course of business in connection with the sale of such Collaboration

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Product, including any credits, volume rebates, charge-back and prime vendor rebates, fees, fees for services, reimbursements or similar payments granted or given to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations or other institutions or health care organizations; (v) adjustments, allowances or credits (calculated on a per unit basis) to customers, not in excess of the selling price per unit of such Collaboration Product, including without limitation on account of price adjustments, governmental requirements, billing errors, rejection, damage, recalls or return of such Collaboration Product; (vi) payments or rebates paid in connection with sales of Collaboration Products to any governmental or regulatory authority in respect of any state or federal Medicare, Medicaid or similar programs; (vii) royalties or technology access fees paid to a Third Party in respect of the sale of such Collaboration Product; (viii) write-offs for bad debts incurred (net of any bad debts later recovered), and (ix) any item substantially similar in character/substance to the foregoing. Net Sales shall be accounted for in accordance with generally accepted accounting principles (“GAAP”) consistently applied in the jurisdiction in which the sales occur, it being understood that bad debt write-off should be deducted from Net Sales notwithstanding that such treatment may be inconsistent with GAAP, and it being further understood that Shire shall make bad debt write-off decisions consistent with its usual business practices.

     For the purposes of determining Net Sales in the ROW Territory with respect to a Collaboration Product that (x) is sold as a Combination Product and (y) is also sold in the US Territory, the Net Sales in the ROW Territory of any such Combination Product shall be determined by deducting from the Invoiced Amount the fully loaded acquisition cost per unit of the other active ingredient(s) included in such Combination Product.

     For the purposes of determining Net Sales in the ROW Territory with respect to a Collaboration Product that (x) is sold as a Combination Product and (y) is not also sold in the US Territory, the Net Sales in the ROW Territory of any such Combination Product shall be determined in any accounting period by multiplying the Net Sales in the ROW Territory of the Combination Product by the fraction A/(A+B), where A is the average Invoiced Amount per unit of the Collaboration Product when sold as a stand-alone Collaboration Product in finished form in the applicable country in the ROW Territory and B is the average invoice price of the other product(s) sold as stand-alone product(s) in finished form in the applicable country in the ROW Territory. In the event that such average Invoiced Amount or average invoice price, as applicable, cannot be determined for the Collaboration Product or the other product(s), Net Sales in the applicable country in the ROW Territory for purposes of determining royalties shall be mutually agreed by the Parties based on the relative value contributed by each component.

     In addition, Net Sales in the ROW Territory shall be determined without regard to the deduction for royalties or technology access fees provided for in clause (vii) above to the extent that (1) such royalties or technology access fees constitute Third Party Royalties and (2) the royalties payable by Shire to New River in respect of such Net Sales in the ROW Territory have been reduced by such Third Party Royalties in accordance with Section 11.5.1(a) .

     Notwithstanding the foregoing, in the ROW Territory, the disposition of a Collaboration Product or the use of the Collaboration Product without charge in excess of costs, including by means of clinical studies, compassionate use, named patient programs, sales under a treatment IND, test marketing, any nonregistrational studies, patient assistance

7

program, or any similar instance where the Collaboration Product is supplied without charge in excess of costs shall not result in any Net Sales. Additionally, amounts received by Shire or its Affiliates or sublicensees for the sale of Collaboration Products among Shire and its Affiliates and sublicensees for resale shall not be included in the computation of Net Sales hereunder.

     1.46“New River Invention” means an Invention that is conceived, solely or jointly with a Third Party, by an employee of New River or a person under an obligation of assignment to New River.

     1.47“Patent” means (i) valid and enforceable patents, re-examinations, reissues, renewals, extensions, supplementary protection certificates and term restorations, any confirmation patent or registration patent or patent of addition based on any such patent, (ii) pending applications for patents, including without limitation continuations, continuations-in-part, divisional, provisional and substitute applications, and inventors’ certificates, (iii) all foreign counterparts of any of the foregoing, and (iv) all priority applications of any of the foregoing.

     1.48“Patent Expenses” means the fees and expenses of outside counsel and payments to Third Parties incurred after the Effective Date in connection with the preparation, filing, prosecution and maintenance of the Licensed Patents, the Joint Collaboration Patents, and the Shire Patents covering Compound and Collaboration Products, including the costs of patent interference and opposition proceedings, net of any reimbursement of such expenses by Third Parties.

     1.49“Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government, or any agency or political subdivisions thereof.

     1.50“Phase III-B Clinical Trials” means product support clinical trials of a Collaboration Product (i.e., a clinical trial which is not required for receipt of initial Regulatory Approval but which may be useful in providing additional drug profile data or in seeking a label expansion) commenced before receipt of Regulatory Approval for the indication for which such trial is being conducted. For the avoidance of doubt, Phase III-B Clinical Trials shall be considered part of Development.

     1.51“Phase IV and Related Expenses” means certain research and development costs incurred by a Party in relation to a Collaboration Product after the First Commercial Sale and shall exclude administrative expenses and costs that are included within Costs of Goods Sold or Development Expenses. Such post-launch research and development costs shall include the costs of: (i) Phase IV Clinical Trials, (ii) ongoing product support, (iii) ongoing medical affairs, and (iv) fees and expenses of outside counsel in respect of regulatory affairs unrelated to obtaining Regulatory Approvals.

     1.52“Phase IV Clinical Trials” means product support clinical trials of a Collaboration Product commenced after receipt of Regulatory Approval in the indication for which such trial is being conducted.

     1.53“Pre-Marketing” means all sales and marketing activities undertaken prior to and in preparation for the launch of a Collaboration Product in a particular territory. Pre-Marketing shall include advertising, education, product-related public relations, health care

8

economic studies, governmental affairs activities for reimbursement and formulary acceptance, sales force training, trademark selection, filing, prosecution and enforcement, and other activities included within the Marketing Plan prior to the First Commercial Sale of a Collaboration Product in such territory.

     1.54“Pre-Marketing Expenses” means, with respect to a Collaboration Product, any Marketing Expenses incurred by a Party prior to the First Commercial Sale of such Collaboration Product.

     1.55“[*]” means a [*] during which (i) the applicable [*] is [*] either [*] or [*], (ii) [*] of such [*] are [*] in the [*] on such [*], and (iii) such [*] is given the [*] of the [*] during the [*]. For clarity, no more than [*] during a [*] shall be [*].

     1.56“Promotional Materials” means all written, printed, video or graphic advertising, promotional, educational and communication materials (other than Collaboration Product labels and package inserts) for marketing, advertising and promotion of the Collaboration Products, including, without limitation, copyrights in any such materials and all designs, industrial designs, design patents, design registrations, and design patent applications developed in connection with such materials, for use by (a) a Sales Representative or (b) advertisements, web sites or direct mail pieces, in accordance with the terms of the applicable Marketing Plan. For clarity, it is understood and agreed that Promotional Materials shall not include corporate communications and general marketing or advertising by a Party or its Affiliate; provided however, that to the extent that such corporate communications or general marketing or advertising include or reference a Collaboration Product or related disease state and do not make any actual or implied claims, then such corporate communications or general marketing or advertising shall be governed by the provisions of Section 10.2.

     1.57“Regulatory Approval” means all approvals [*], product and/or establishment licenses, registrations or authorizations of any regional, federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacture, use, storage, import, export, transport, offer for sale, or sale of a pharmaceutical product in a regulatory jurisdiction.

      1.58“ROW Territory” means the world, excluding the US Territory.

     1.59“Sales Call” means a personal visit by a Sales Representative to one or several medical professional(s) having prescribing authority in the part of the Field for the indications in which such Collaboration Product is approved, as well as to other individuals or entities that have significant impact or influence on prescribing decisions in the part of the Field in which such Collaboration Product is approved during which such Sales Representative Details a Collaboration Product.

     1.60“Sales Representative” means a pharmaceutical sales representative engaged or employed by either Party to conduct Detailing and other promotional efforts with respect to the Collaboration Products and who has been trained by Shire in accordance with the terms of this Agreement.

     1.61“Samples” means Collaboration Product packaged and distributed as a complementary trial for use with patients in the United States and in accordance with the Prescription Drug Marketing Act of 1987, as amended (the “PDM Act”) and free goods provided for this purpose through coupons or other mechanisms.

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     1.62“Schedule Classification” means, with respect to a Collaboration Product, the [*] by [*] under the [*] of a particular [*] for such Collaboration Product, as communicated in writing either by (i) the [*] in the form of the [*] of a [*] any [*] as to [*], if the [*] is [*], or (ii) the [*] by publication of a [*] for the Collaboration Product in the [*].

     1.63“Shire Background Know-How” means all Know-How Controlled by Shire, other than Shire Collaboration Know-How, that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention, to the extent such Know-How is included in a Development Plan or Marketing Plan that has been agreed to and approved by Shire. Notwithstanding anything herein to the contrary, Shire Background Know-How shall exclude Shire Background Patents.

     1.64“Shire Background Patent” means a Patent Controlled by Shire, other than a Shire Collaboration Patent, that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention, to the extent such Patent is included in a Development Plan that has been agreed to and approved by Shire.

     1.65“Shire Collaboration Know-How” means all Know-How that is developed by Shire during the Term pursuant to this Agreement and that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention. Notwithstanding anything herein to the contrary, Shire Collaboration Know-How shall exclude Shire Collaboration Patents.

     1.66“Shire Invention” means an Invention that is conceived, solely or jointly with a Third Party, by an employee of Shire or a person under an obligation of assignment to Shire.

     1.67“Shire Know-How” means the Shire Background Know-How and the Shire Collaboration Know-How. Notwithstanding anything herein to the contrary, Shire KnowHow shall exclude Shire Patents.

     1.68“Shire Patents” means the Shire Background Patents and the Shire Collaboration Patents.

      1.69“[*]” means [*]

     1.70“Third Party” means any entity other than New River or Shire or their respective Affiliates.

     1.71“US Product Profit” means the profits or losses resulting from the Commercialization of Collaboration Products in the US Territory and shall be equal to Net Sales of Collaboration Products in the US Territory less Allowable Expenses less Phase IV and Related Expenses.

     1.72“US Territory” means the United States of America, its territories and possessions.

     1.73“Valid Claim” means: (a) a claim of an issued Patent that has not (i) expired or been canceled, (ii) been declared invalid or unenforceable by a decision of a court or other

10

appropriate body of competent jurisdiction, from which no appeal is or can be taken, (iii) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (iv) been abandoned, disclaimed or dedicated to the public; and (b) a claim included in a pending patent application that is being actively prosecuted in accordance with this Agreement and that has not been (i) canceled, (ii) withdrawn from consideration, (iii) finally determined to be unallowable by the applicable governmental authority (from which no appeal is or can be taken), or (iv) abandoned or disclaimed. Notwithstanding the foregoing clause (b), in the event that a pending claim in a pending patent application is rejected and does not issue in an issued Patent within [*] after the earliest date from which such claim was originally presented, such a pending claim will not be a Valid Claim, unless and until such pending claim subsequently issues in an issued Patent, at which time such claim may again be a Valid Claim as of the date of issuance of such Patent, if such claim also meets the requirements of this Section 1.73

Interpretation. Unless the context of this Agreement otherwise requires, (a) words of one gender include the other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby,” and other similar words refer to this entire Agreement; and (d) the terms “Article” and “Section” refer to the specified Article and Section of this Agreement. Whenever this Agreement refers to a number of days, unless otherwise specified, such number shall refer to calendar days.

Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

Definition	Section
Agreement	Preamble
Benefit Plans	Section 4.10.7
Breaching Party	Section 13.2.1
Confidential Information	Section 10.1.1
Contractors	Section 12.1.3(d)(i)
Co-Promote Product	Section 5.5
Co-Promotion Option	Section 5.1
Co-Promotion Period	Section 5.3
DDMAC	Section 3.3.3(c)
Developing Party	Section 3.5.5
Development Plan	Section 3.2.1
Disclosing Party	Section 3.2.1
Dollars	Section 17.7
Effective Date	Preamble
Existing NDA	Section 10.6
GAAP	Section 1.45
Hatch-Waxman Certification	Section 11.6
Indemnification Claim Notice	Section 15.2
Indemnified Party	Section 15.2
Indemnifying Party	Section 15.2
Indemnitee	Section 15.2
Indemnitees	Section 15.2
JDC	Section 2.2.1
JIPC	Section 2.5.1
JMC	Section 2.3.1

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Definition	Section
Joint Collaboration Patents	Section 11.1.1
Joint Press Release	Section 10.2
JSC	Section 2.4.1
Material Breach	Section 13.3.1
New River	Preamble
New River Collaboration Patents	Section 11.3.1
New River Marks	Section 11.9.3
New River Report	Section 7.4.3(a)
Notice of Termination For Material Breach	Section 13.3.3
Notifying Party	Section 13.2.1
Parties	Preamble
Party	Preamble
[*]	Section 9.8
PDM Act	Section 1.61
[*]	Section 3.3.2
[*] Opt-In Right	Section 3.5.3
Prior Consultants	Section 10.6
Product Claim	Section 15.8.2
Purchase Interest	Section 13.3
Purchase Notice	Section 13.3
Purchase Price	Section 13.3
Receiving Party	Section 10.1
Recovery	Section 11.5.2(c)(iv)
Representatives	Section 16.1
Required Studies	Section 3.3.2
ROW Agreement	Section 17.16
Shared Expenses	Section 3.6.1
Shire	Preamble
Shire Collaboration Patents	Section 11.3.2
Shire Marks	Section 11.9.3
Shire Report	Section 7.4.3(b)
Term	Section 13.1
Third Party Claim	Section 15.1.1
Third Party Manufacturers	Section 2.4.2(a)
Third Party Royalty	Section 11.5.1(a)
Unilateral Product	Section 3.5.5
US Territory Product Claim	Section 15.8.2
Withholding Taxes	Section 8.5.1
Working Group	Section 2.6.4
$	Section 17.7

ARTICLE 2.
MANAGEMENT OF COLLABORATION

     2.1General. The general purpose of the collaboration described in this Agreement will be to Develop and Commercialize Collaboration Products. The Parties desire to establish four (4) specialized committees to oversee the Parties’ collaboration under this Agreement and to facilitate communications between the Parties with respect to the Development, Commercialization, Manufacturing and intellectual property strategy of

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Collaboration Products hereunder. Each of such committees shall have the responsibilities and authority allocated to it in this Article 2. Each of the committees shall have the obligation to exercise its authority consistent with the respective purpose for such committee as stated herein and any such decisions shall be made in good faith.

      2.2Joint Development Committee (JDC).

           2.2.1Formation and Purpose. Promptly following the Effective Date, the Parties shall create a joint development committee (the “JDC”) to oversee the Development of Collaboration Products hereunder. The purposes of the JDC shall be (a) to determine the Development strategy for the Collaboration Products in the US Territory and Major EU Markets, (b) to facilitate the management and implementation of the Parties’ Development activities hereunder, and (c) to approve plans and budgets for the Development by New River of Collaboration Products for ADHD in the US Territory. The JDC shall have the membership and shall operate by the procedures set forth in Section 2.6.

           2.2.2Specific Responsibilities of the JDC. In addition to its overall responsibilities described in Section 2.2.1, subject to Section 2.7.1, the JDC shall, in particular:

                 (a)select Collaboration Products for research and Development under this Agreement in the US Territory and Major EU Markets;

                 (b)prepare, approve and amend each Development Plan (including regulatory submission strategies and plans) for Collaboration Products in the US Territory and the Major EU Markets;

                 (c)monitor the progress of the activities undertaken by the Parties pursuant to each Development Plan;

                 (d)review and approve proposals from the Parties to Develop Improvements and/or Combination Products;

                 (e)coordinate and oversee the Parties’ Regulatory Approval submission plans in the US Territory;

                 (f)design and approve all clinical trials of Collaboration Products proposed to be conducted anywhere in the world for consistency and efficiency, including without limitation by creating the protocols, defining the end points, and selecting the primary investigators for such trials;

                 (g)have primary responsibility for establishing the objectives for all Phase IV Clinical Trials of Collaboration Products proposed to be conducted for the US Territory, including without limitation by creating the protocols, defining the end points, and selecting the primary investigators for such trials;

                 (h)manage the flow of information with respect to Development being conducted for each Collaboration Product;

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                 (i)review and approve the statistical analysis plans and protocols for all Collaboration Product clinical studies conducted worldwide, and any investigator’s brochure(s) and revisions thereto;

                 (j)work together with the JMC and JSC during the development of Collaboration Products to assure a smooth transition from Development of such Collaboration Product to Commercialization of such Collaboration Product;

                 (k)review and approve compliance plans whereby the Parties prepare for or participate in a Governmental Authority inspection of the preclinical or clinical data or preclinical sites/clinical sites or laboratories; and

                 (l)review and approve pharmacovigilance plans.

      2.3Joint Marketing Committee (JMC).

           2.3.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint marketing committee (the “JMC”), which shall oversee the Commercialization of Collaboration Products in the US Territory, including the marketing, sales and distribution of Collaboration Products in such territory. The JMC shall have the membership and shall operate by the procedures set forth in Section 2.6.

           2.3.2Specific Responsibilities of the JMC. In addition to its overall responsibilities described in Section 2.3.1, subject to Section 2.7.2, the JMC shall, in particular:

                 (a)prepare, approve and amend the Marketing Plan for Collaboration Products in the US Territory;

                 (b)monitor the progress of the activities undertaken by the Parties pursuant to the Marketing Plan for the US Territory;

                 (c)manage the flow of information with respect to Commercialization activities in the US Territory for each Collaboration Product;

                 (d)coordinate and oversee the Parties’ plans for labeling and selecting trademarks for Collaboration Products in the US Territory;

                 (e)approve packaging designs, and plan and oversee non-independent educational and professional symposia, and speaker and peer-to-peer activity programs, for the Collaboration Products in the US Territory;

                 (f)discuss and suggest a range of suggested prices at which Collaboration Products will be sold to unaffiliated Third Parties in the US Territory and any discount strategies for Collaboration Products in the US Territory; provided that nothing contained herein, except as set forth in Section 4.2.2, shall limit or in any way restrict Shire from having the final decision on setting the price at which a Collaboration Product is sold; and

                 (g)recommend whether to seek new indications, formulations or uses for Collaboration Products in the US Territory, such as for Collaboration Product life

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cycle management, including the Development and Commercialization of an authorized generic of any Collaboration Product, for approval by the JDC.

      2.4Joint Supply Committee (JSC).

           2.4.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint supply committee (the “JSC”) to facilitate the management and implementation of the Parties’ activities with regard to the Manufacture and supply of Collaboration Products worldwide. The JSC shall have the membership and shall operate by the procedures set forth in Section 2.6.

           2.4.2Specific Responsibilities of the JSC. In addition to its overall responsibilities described in Section 2.4.1, and subject to the provisions of Section 2.7.3 and Article 6, the JSC shall, in particular:

                 (a)select which Party and/or Third Party(ies) to engage for the Manufacture and supply of Collaboration Products and components thereof (“Third Party Manufacturers”), oversee auditing of Third Party Manufacturers, and approve contracts governing such Manufacture and supply;

                 (b)delineate requirements and responsibilities for development and licensure of manufacturing processes and facilities for Collaboration Products and for worldwide supply of Collaboration Products;

                 (c)jointly develop a Manufacturing strategy for the US Territory and the ROW Territory to enable development and licensure of manufacturing processes and facilities for Collaboration Products that includes all aspects of Manufacture and release, including but not limited to formulations, intermediate, dosage form, devices, product characterization studies, test methods and process validation studies, stability studies and Manufacturing plans and forecasts and the implementation of Manufacturing Improvements;

                 (d)determine Manufacturing plans and budgets, including timelines and inventory strategies, and allocate responsibilities for and oversee the implementation of such plans in accordance with this Agreement;

                 (e)oversee and approve process development plans prior to the Manufacture of registration batches of Collaboration Products;

                 (f)oversee and approve plans to support Manufacture of commercial supply of Compound and Collaboration Products;

                 (g)review quality assurance efforts, including but not limited to those efforts with respect to the establishment of specifications and quality standards for Collaboration Products;

                 (h)review and coordinate the drafting and contents of the Chemistry, Manufacturing and Controls section of a Drug Approval Application for Collaboration Products;

                 (i)review and approve technology transfer plans for any changes in Manufacturing sites, testing sites, and responsibilities in the supply chain for Collaboration

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Products, it being understood that decisions regarding the selection of which of a Party’s own Manufacturing and testing sites shall be used to manufacture any component of a Collaboration Product, if a Party Manufactures any component of a Collaboration Product pursuant to this Agreement or any related supply agreement, shall remain in the sole control of such Party;

                 (j)prepare for regulatory inspections and ensure adherence to compliance standards with respect to Collaboration Products;

                 (k)ensure that future logistical strategies and capacity planning are consistent with the forecasts provided in the Marketing Plan for the US Territory, and the corresponding plans for the ROW Territory, as well as inventory levels for Collaboration Products;

                 (l)review quality-related issues concerning the Collaboration Products or any component thereof; and

                 (m)review and approve compliance plans whereby the Parties prepare for or participate in a Governmental Authority inspection of the Manufacturing or testing site of the Compound.

      2.5Joint Intellectual Property Committee (JIPC).

           2.5.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint intellectual property committee (the “JIPC”) to facilitate the exchange of information between the Parties to the extent required by this Agreement regarding the prosecution, maintenance and enforcement of the Licensed Patents, Licensed Know-How, Shire Collaboration Patents, Shire Collaboration Know-How, and Joint Inventions. The JIPC shall have the membership and shall operate by the procedures set forth in Section 2.6.

           2.5.2Specific Responsibilities of the JIPC. In addition to its overall responsibilities described in Section 2.5.1, subject to Section 2.7.4 and Article 11, the JIPC shall, in particular:

                 (a)Exchange information between the Parties regarding the Parties’ activities under this Agreement relating to the filing, prosecution, maintenance and enforcement of the Licensed Patents, Licensed Know-How, Shire Collaboration Patents and Shire Collaboration Know-How; and

                 (b)Consult regarding the filing, prosecution, maintenance and enforcement of Joint Collaboration Patents and Joint Inventions.

      2.6General Committee Membership and Procedures.

           2.6.1Membership. For the JDC, JMC, JSC and JIPC, each Party shall designate an equal number of representatives who are employees of such Party or an Affiliate of such Party (not to exceed three (3) for each Party) with appropriate expertise to serve as members of such Committee; provided that a Party may designate outside legal counsel as a representative to the JIPC. Each representative may serve on more than one Committee as appropriate in view of the individual’s expertise. Each Party may replace its Committee

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representatives at any time upon written notice to the other Party. Each Committee shall have co-chairpersons. New River and Shire shall each select from their representatives a co-chairperson for each of the Committees. The co-chairpersons of each Committee shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting of such Committee, and preparing and issuing minutes of each meeting within thirty (30) days thereafter; provided, that a Committee co-chairperson shall call a meeting of the applicable Committee promptly upon the written request of the other co-chairperson to convene such a meeting. Such minutes will not be finalized until both chairpersons review and confirm the accuracy of such minutes in writing.

           2.6.2Meetings. Each Committee shall hold meetings at such times as it elects to do so, but in no event shall such meetings be held less frequently than once every four (4) months. Meetings of any Committee may be held in person or by means of telecommunication (telephone, video, or web conferences); provided, that at least one meeting per year will be held in person. The Parties will alternate in designating the location for in-person meetings, with New River selecting the first meeting location. Other employees of each Party or any of its Affiliates involved in the Development, Manufacture or Commercialization of Collaboration Products may attend meetings of such Committee as nonvoting participants, and, with the consent of each Party, consultants, representatives, or advisors involved in the Development, Manufacture or Commercialization of Collaboration Products may attend meetings of such Committee as nonvoting observers; provided, that such Third Party representatives are under obligations of confidentiality and non-use applicable to the Confidential Information of each Party and that are at least as stringent as those set forth in Article 10. Each Party shall be responsible for all of its own expenses of participating in any Committee (including without limitation in any Working Group).

           2.6.3Meeting Agendas. Each Party will disclose to the other proposed agenda items along with appropriate information at least seven (7) Business Days in advance of each meeting of the applicable Committee; provided, that under exigent circumstances requiring Committee input, a Party may provide its agenda items to the other Party within a lesser period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of a specific agenda for such Committee meeting.

           2.6.4Working Groups. From time to time, each Committee may establish and delegate duties to other committees, sub-committees or directed teams (each, a “Working Group”) on an “as-needed” basis to oversee particular projects or activities. Each such Working Group shall be constituted and shall operate as the JDC, JMC, JSC or JIPC, as the case may be, determines; provided, that each Working Group shall have equal representation from each Party. Working Groups may be established on an ad hoc basis for purposes of a specific project for the life of a Collaboration Product, or on such other basis as the applicable Committee may determine. Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the Committee that established such Working Group. In no event shall the authority of the Working Group exceed that specified for the relevant Committee in this Article 2.

           2.6.5Limitations of Committee Powers. Each Committee shall have only such powers as are specifically delegated to it hereunder and shall not be a substitute for the rights of the Parties. Without limiting the generality of the foregoing, no Committee shall

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have any power to amend this Agreement. Any amendment to the terms and conditions of this Agreement shall be implemented pursuant to Section 17.1 below.

     2.7Committee Decision-Making. Subject to the terms of this Section 2.7, each Committee will take action by unanimous vote with each Party having a single vote, irrespective of the number of representatives actually in attendance at a meeting, or by a written resolution signed by the designated representatives of each of the Parties. If a Committee is unable to reach unanimous consent on a particular matter within thirty (30) days of its initial consideration of such matter, then either Party may provide written notice of such dispute to the Chief Executive Officer of the other Party. The Chief Executive Officers (or their respective designees, provided that each such designee is not a member of the applicable Committee and occupies a position senior to the positions occupied by the applicable Party’s members of such Committee) of each of the Parties will meet at least once in person or by means of telecommunication (telephone, video, or web conferences) to discuss the dispute and use their good faith efforts to resolve the dispute within thirty (30) days after submission of such dispute to such officers. If any such dispute is not resolved by the Chief Executive Officers or their designees within thirty (30) days after submission of such dispute to such officers, then the Chief Executive Officer or designee of the Party specified in Section 2.7.1, 2.7.2, or 2.7.3, as applicable, shall have the authority to finally resolve such dispute acting in good faith.

            2.7.1JDC Authority.

                 (a)If a dispute in the JDC is not resolved pursuant to Section 2.7 above and such dispute relates primarily to the Development of Collaboration Products for ADHD in the US Territory (other than those relating to Phase IV Clinical Trials), the [*] or the [*], then the Chief Executive Officer of [*] shall have the authority to finally resolve such dispute.

                 (b)Notwithstanding anything to the contrary in subsection (a):

                              (i)If a dispute in the JDC is not resolved pursuant to Section 2.7 above and such dispute (A) does not relate primarily to any of the activities specified in subsection (a) above (including, without limitation [*] the [*] of [*] for [*] in the [*] or for any [*] in the [*] for [*] in the [*] or [*] or (B) relates primarily to [*] other than the [*] by [*] pursuant to [*] for which [*] has not [*] in at the [*] or [*] the [*] to [*] of any [*] or [*], then the Chief Executive Officer of [*] shall have the authority to finally resolve such dispute.

                        (ii)If [*] for the first Collaboration Product for ADHD on or before [*], then, until such time as [*], the Chief Executive Officer of [*] shall have the authority to finally resolve a dispute that relates primarily to the Development of Collaboration Products for ADHD in the US Territory.

           2.7.2JMC Authority. If a dispute in the JMC is not resolved pursuant to Section 2.7 above, then the Chief Executive Officer of [*] shall have the authority to finally resolve such dispute.

           2.7.3JSC Authority. If a dispute in the JSC is not resolved pursuant to Section 2.7 above, then the Chief Executive Officer of [*] shall have the authority finally resolve such dispute; provided, however, that with respect to any matter over which [*] has

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approval (or other consent right) pursuant to Article 6 (including, without limitation, Exhibit D), such resolution shall require the approval (or other consent) of [*] as set forth in Article 6 (including, without limitation, Exhibit D).

           2.7.4JIPC Authority. If a dispute in the JIPC is not resolved pursuant to Section 2.7 above, then [*] shall have the authority to finally resolve such dispute. The JIPC shall not have decision making authority under this Agreement and any dispute in the JIPC shall be resolved in accordance with the terms of Article 16.

           2.7.5Casting Vote. Neither Party shall exercise its right to finally resolve a dispute at a committee in accordance with this Section 2.7 in a manner that excuses such Party from any of its obligations specifically enumerated under this Agreement.

ARTICLE 3.
DEVELOPMENT AND REGULATORY RESPONSIBILITIES

      3.1 Overview. Subject to the roles of the various Committees described in Article 2 and the terms of this Agreement, the general allocation of responsibility for the Development and Regulatory Approval of Collaboration Products under this Agreement is as follows:

                 (a)Shire will be primarily responsible for the Development of Collaboration Products for any indications in the ROW Territory;

                 (b)New River will be primarily responsible for the Development of the Collaboration Product for ADHD in the US Territory; and

                 (c)the JDC will determine which Party will be primarily responsible for the Development of Collaboration Products for non-ADHD indications in the US Territory.

      3.2Development Plans.

           3.2.1Scope. The Development of each Collaboration Product in the US Territory and the Major EU Markets under this Agreement shall be governed by a development plan (each, a “Development Plan”). Each Development Plan shall be developed in good faith in accordance with a Party’s standard practices with the overall objective of achieving the commercial potential of such Collaboration Product. Each Development Plan shall describe the proposed overall program of Development for the Collaboration Product for each indication in each of the Major EU Markets and the US Territory, including preclinical studies, toxicology, formulation, process development, clinical studies, pediatric exclusivity plans and regulatory plans and other elements of obtaining Regulatory Approval in each applicable country, as well as timelines to key Governmental Authority meetings, Drug Approval Applications and Regulatory Approvals. Each Development Plan shall include a summary of estimated Development Expenses of the program expected during the Development process through obtaining Regulatory Approval for each proposed indication and route of delivery, to the extent such expenses are to be shared by the Parties under the terms of this Agreement, and shall also include a detailed budget for all such shared Development activities proposed for the following calendar year.

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           3.2.2Preparation and Approval of Development Plans for the US Territory and the Major EU Markets. Each Development Plan for the US Territory and the Major EU Markets, together with any updates thereto, shall be prepared and approved as follows:

                 (a)Initial Development Plans for the Collaboration Product for ADHD in the US Territory. The initial Development Plan for all Development activities for the Collaboration Product for ADHD in the US Territory [*] is attached to this Agreement as Exhibit C. Within [*] after the Effective Date, New River will prepare the initial Development Plans for the first Collaboration Products for ADHD [*].

                 (b)Development Plans for Improvements and Combination Product in the US Territory. When an Improvement and/or Combination Product is added as a Collaboration Product pursuant to Section 3.5, within sixty (60) days following the date of such inclusion, the Development Plan for the Development of any such Improvement and/or Combination Product in the US Territory will be prepared by the Party designated by the JDC, and submitted to the JDC for its review and approval of such Development Plan.

                 (c)Development Plans for the Major EU Markets. The Development Plan for the Development by Shire of Collaboration Products for any indications in the Major EU Markets will be prepared by Shire and will be submitted to the JDC for review and approval.

           3.2.3Updates to the Development Plans. As early as necessary in each year beginning with the first full calendar year after the Effective Date, the Party responsible for preparing the initial Development Plan for a Collaboration Product shall update and prepare the Development Plan for any such Collaboration Product for the following calendar year to take into account completion, commencement or cessation of Development activities not contemplated by the then-current Development Plan, and submit such proposed Development Plan to the JDC no later than September 30 of such year for review and approval.

           3.2.4Diligence. In addition to the specific diligence obligations of New River pursuant to Section 3.3.1 and of Shire pursuant to Section 3.4.1, each of New River and Shire will use Diligent Efforts to carry out the activities for which it may agree to be responsible set forth in a Development Plan in the ROW Territory for ADHD and other indications, in the case of New River, and a Development Plan for Collaboration Products for ADHD in the US Territory, in the case of Shire.

      3.3Development in the US Territory for ADHD.

           3.3.1Diligence. New River will use Diligent Efforts to carry out the activities set forth in the Development Plan for Collaboration Products for ADHD in the US Territory and to seek Regulatory Approval, [*], for ADHD in the US Territory in accordance with the Development Plan and with the terms of this Agreement.

           3.3.2Costs of Development. Notwithstanding Section 3.6 below, (i) New River shall bear all Development Expenses that are related to Developing and obtaining Regulatory Approval for the first Collaboration Products for ADHD [*] in the US Territory (ii) New River shall be responsible for all Phase IV and Related Expenses for all activities that are required in connection with receiving Regulatory Approval by FDA or other

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Governmental Authorities in the US Territory with respect to such Collaboration Products (“Required Studies”), and (iii) if there are any additional studies necessary to obtain [*] for the Collaboration Product for ADHD, New River shall be responsible for all such Development Expenses and/or Phase IV and Related Expenses (“[*]”).

            3.3.3Regulatory Activities.

                 (a)Unless otherwise agreed in writing by the Parties, New River, subject to Section 3.3.3(c), shall be responsible for preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the US Territory in accordance with the applicable Development Plan, including preparing all reports necessary as part of a Drug Approval Application. All such Drug Approval Applications shall be filed in the name of New River. Each Party shall designate an alliance manager to coordinate and review filings and activities of the Parties in the US Territory described in this Section 3.3.3. New River shall provide Shire with drafts of any material documents or correspondence to be submitted to any Governmental Authority in the US Territory that pertains to the Compound and/or Collaboration Products, including Drug Approval Applications. New River will consult in advance with Shire with respect to any substantive or material filings to be made by New River in accordance with the terms of this Section 3.3.3(a), including Drug Approval Applications, and shall consider in good faith any comments Shire may have with respect to any such filings. New River shall permit Shire access to and grant Shire the right to reference and use, for purposes of the Collaboration Products, all data, regulatory filings and regulatory communications associated with any submissions for Regulatory Approval or other issues associated with any Collaboration Product, that is or would be relevant to Shire’s Development or Commercialization of a Collaboration Product in the US Territory or ROW Territory. To the extent that any such data, regulatory filings or regulatory communications are held by a Third Party, then New River shall arrange direct access to the portions of such data, regulatory filings or regulatory communications that are relevant to the activities of Shire that are contemplated by this Agreement. Any information obtained by a Party pursuant to this Section 3.3.3(a) shall be deemed Confidential Information for purposes of Article 10. Notwithstanding the foregoing, Shire shall be the responsible Party for preparing and filing Drug Approval Applications and seeking Regulatory Approvals and interacting with the Governmental Authorities in the US Territory for any Unilateral Product being Developed by Shire under Section 3.5.5.

                 (b)New River shall provide Shire with reasonable advance notice of any meeting or substantive or material conference call with any Governmental Authority relating to any Drug Approval Application or Regulatory Approval for Collaboration Products in the US Territory, and Shire shall have the right to participate in any such meeting or material conference call as well as have the right to participate in all substantive or material preparation, internal caucus, and debriefing sessions related to such meetings or conference calls. If it is not possible to provide Shire notice of any such meeting or conference call, New River shall immediately thereafter provide Shire with a detailed summary of any such meeting or conference call. New River shall promptly, but in no event more than two (2) Business Days after receipt, furnish Shire with copies of all substantive or material documents or correspondence New River has had with or receives from any Governmental Authority, and contact reports concerning substantive or material conversations or substantive meetings with any Governmental Authority, in each case relating to any Drug Approval Application or Regulatory Approval (including without limitation any minutes from a meeting with respect thereto).

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                 (c)Shire shall be primarily responsible for interfacing, corresponding, making required filings and meeting with the Division of Drug Marketing, Advertising and Communications of the FDA (“DDMAC”) with respect to the marketing and promotion of the Collaboration Products in the US Territory. New River will provide a letter to the FDA (to be prepared with assistance of Shire) notifying the FDA that Shire has been designated as the agent of New River upon whom all DDMAC communications should be made on behalf of New River with respect to Collaboration Products in the US Territory. Shire, through the JMC, shall provide New River with drafts of any substantive or material documents or correspondence to be submitted to DDMAC in the US Territory that pertains to a Collaboration Product. Shire, through the JMC, will consult in advance with New River with respect to any substantive or material filings to be made by Shire in accordance with the terms of this Section 3.3.3(c), and shall consider in good faith any comments New River may have with respect to any such filings. Shire shall provide New River with reasonable advance notice of any meeting or substantive or material conference call with DDMAC relating to a Collaboration Product in the US Territory, and New River shall have the right to participate in any such meeting or substantive or material conference call as well as have the right to participate in all substantive or material preparation, internal caucus, and debriefing sessions related to such meetings or conference calls. If it is not possible to provide New River notice of any such meeting or conference call, Shire shall immediately thereafter provide New River with a detailed summary of any such meeting or conference call. Shire shall promptly, but in no event more than two (2) Business Days after receipt, furnish New River with copies of all substantive or material documents or correspondence Shire has had with or receives from DDMAC, and contact reports concerning substantive or material conversations or substantive or material meetings with DDMAC, in each case relating to a Collaboration Product (including without limitation any minutes from a meeting with respect thereto).

                 (d)Within thirty (30) days after the Effective Date, New River shall provide to Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled as of the Effective Date with respect to the Collaboration Product, including any final versions of any study reports and any drafts then-outstanding of any study reports. Thereafter, New River shall provide to Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled with respect to the Collaboration Product as soon as reasonably practicable after such data or results become available or compiled, including any drafts and final versions of any study reports. All disclosures under this Section 3.3.3(d) shall be delivered in electronic format. For clarity, New River shall not be required to disclose New River’s proprietary Carrierwave™ technology under this Agreement, except to the extent necessary for Shire to exercise its rights and perform its obligations under this Agreement or as otherwise specifically provided in this Agreement.

                 (e)In the event that any Governmental Authority threatens or initiates any action to remove a Collaboration Product from the market in the US Territory, New River shall notify Shire of such communication immediately, but in no event later than one (1) Business Day, after receipt by New River. Either Party may decide, in good faith, to initiate a recall or withdrawal of Collaboration Product in the US Territory, in consultation with the JDC and JMC. Before Shire initiates a recall or withdrawal, and upon the request for a recall or withdrawal by either Party, the Parties shall promptly and in good faith discuss the reasons therefor and the allocation of the costs of any such recall or withdrawal. Under no circumstances shall either Party unreasonably object to a recall or withdrawal requested by the other Party, and neither Party shall have any right to object to a recall or withdrawal requested by the other Party for failure of a Collaboration Product to meet the applicable

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specifications, for material safety concerns, or for the Manufacture of such Collaboration Product in a manner that does not comply with applicable Laws. In the event of any recall or withdrawal for Collaboration Products sold in the US Territory, Shire shall implement any necessary action, with assistance from New Riveras reasonably requested by Shire.

      3.4Development in the ROW Territory for ADHD and Other Indications.

           3.4.1Diligence. After receipt of Regulatory Approval in the US Territory for the first Collaboration Product for ADHD, Shire will commence Diligent Efforts to Develop a Collaboration Product for ADHD in the Major EU Markets. Shire will use Diligent Efforts to carry out the activities set forth in the Development Plan for Collaboration Products in each Major EU Market country where, [*], including preparing all reports necessary as part of a Drug Approval Application.

           3.4.2Costs of Development. Shire shall bear all expenses that are related to Developing and obtaining Regulatory Approval of Collaboration Products in the ROW Territory, subject to the terms of Section 3.6.1(a) below. The Parties recognize that Shire may desire to conduct clinical trials of Collaboration Products within the US Territory for the purpose of obtaining Regulatory Approval within the ROW Territory, and agree that, prior to receipt of Regulatory Approval in the US Territory, Shire may conduct such trials with New River’s prior written consent, such consent not to be unreasonably withheld, conditioned, or delayed; provided, that Shire is solely responsible for all costs of conducting any such trials.

             3.4.3Regulatory Activities.

                 (a)Shire shall be responsible for preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the ROW Territory, including preparing all reports necessary as part of a Drug Approval Application. The Parties intend that [*]. New River shall be responsible for providing to Shire, in the Common Technical Document format (unless the FDA requires a different format or the Common Technical Document format would delay the filing of the Drug Approval Application), the data and information required to be submitted to the FDA, and such additional data and information relating to the Development activities for which it was responsible, including all clinical trials performed by it and, if applicable, all manufacturing and controls information. Shire shall be responsible for prosecuting all such Drug Approval Applications and shall have a right of cross-reference to the Drug Approval Applications filed by New River in the US Territory for such purpose. New River will take all such reasonable actions to allow such cross-reference. New River shall have the right of cross-reference to all such Drug Approval Applications filed by Shire for the purpose of prosecuting Drug Approval Applications in the US Territory, and Shire shall take all such reasonable actions to allow such cross-reference.

                 (b)In connection with all Drug Approval Applications being prosecuted by Shire hereunder, Shire agrees to provide New River with a copy (which may be wholly or partly in electronic form) of all filings to regulatory agencies in each Major EU Market country that it makes hereunder. Within thirty (30) days following the end of each calendar quarter, Shire shall report to New River regarding the status of each pending and proposed Drug Approval Application in the ROW Territory.

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                 (c)In the event that Shire desires New River to participate in any meeting, discussion or substantive telephone conference call with any Governmental Authority relating to any Drug Approval Application or Regulatory Approval for Collaboration Products in the ROW Territory, Shire shall provide New River with reasonable advance notice of any such meeting, discussion or conference call and New River shall participate with Shire. Shire shall promptly furnish New River with copies of all substantive documents or correspondence Shire has had with or receives from any Governmental Authority in the Major EU Markets, and contact reports concerning substantive conversations or substantive meetings with any Governmental Authority in the Major EU Markets, in each case relating to any Drug Approval Application or Regulatory Approval (including without limitation any minutes from a meeting with respect thereto).

                 (d)Shire shall provide to New River, on a timely basis, copies of all material Manufacturing, pre-clinical and clinical data compiled in support of a Drug Approval Application in the ROW Territory for a Collaboration Product (but excluding any such data to the extent relating to the Manufacture of the Compound).

                 (e)In the event that any Governmental Authority threatens or initiates any action to remove a Collaboration Product from the market in the ROW Territory, Shire shall notify New River of such communication within one (1) Business Day of receipt by Shire. Shire shall consult with New River prior to initiating a recall or withdrawal of Collaboration Product in a Major EU Market; provided that the final decision as to whether to recall or withdraw a Product in the ROW Territory shall be made by Shire in its sole discretion. In the event of any recall or withdrawal for Collaboration Products sold in the ROW Territory, Shire shall implement any necessary action.

           3.4.4Reporting. At each meeting of the JDC and the JSC, each Party will present a report describing the Development and Manufacturing activities performed by such Party with respect to Collaboration Products in the US Territory and ROW Territory since the last such report.

     3.5Development in the US Territory for Indications other than ADHD. In the event that Collaboration Products are to be Developed hereunder in the US Territory for indications other than ADHD, the JDC will designate a lead Development Party for such Development program in the applicable Development Plan, subject to the terms and conditions of this Section 3.5. For the purposes of clarity, [*] shall have the casting vote on the JDC as to whether a Collaboration Product is to be Developed in the US Territory for non-ADHD indications, including all Improvements or Combination Products; provided that [*] will not be obligated to serve as the lead Development Party without its consent.

           3.5.1Submission of Proposal to JDC. If, at any time, Shire or New River desires to Develop a Collaboration Product for a non-ADHD indication, including an Improvement or Combination Product, for Commercialization in the US Territory, such Party shall submit to the JDC a proposal for such Development. Such proposal shall contain, at a minimum, all material information that would otherwise be included in a Development Plan. Each proposal for the Development of a Collaboration Product for a non-ADHD indication, including an Improvement or Combination Product, for Commercialization in the US Territory shall, among other things:

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                 (a)identify all major Development tasks to be accomplished prior to submission of filings for Regulatory Approvals;

                 (b)identify key Development objectives, expected associated resources, risk factors, timelines, Go/No Go decision points and relevant decision criteria and, where appropriate, decision trees; and

                 (c)include a reasonably detailed description and budget for the Development activities that are expected to be performed.

           3.5.2JDC Agreement to Develop. If the JDC agrees to the Development of a Collaboration Product for a non-ADHD indication, including an Improvement and/or Combination Product, for Commercialization in the US Territory, it shall select the lead Party for such Development. Once the lead Party is selected, that Party will be responsible for the Development of the applicable Collaboration Product for the specified indication, including the design and conduct of clinical trials for such Collaboration Product, subject in any event to the oversight and authority of the various Committees. The Development Expenses incurred in connection with the performance of such Development program will be [*] under the terms of Section 3.6 below. Except as set forth in Section 3.3.3(a), New River shall be responsible for preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the US Territory, whether or not it is the lead development Party, including preparing all reports necessary as part of a Drug Approval Application, and all such Drug Approval Applications shall be filed in the name of New River.

           3.5.3New River Proposal. Except as provided in this Section 3.5.3, if New River proposes the Development of an Improvement and/or Combination Product to the JDC, but Shire does not vote in favor of such proposal, such Improvement and/or Combination Product shall not be Developed. Notwithstanding the foregoing, after receipt of Regulatory Approval for the first Collaboration Product for ADHD [*], New River may propose a Combination Product that includes an active pharmaceutical ingredient approved in the US Territory for a [*], and the Parties shall develop a plan to determine proof of concept and to generate pharmacokinetic and toxicity data on such proposed Combination Product and shall use Diligent Efforts to implement such plan. Based on such data, the JDC shall determine whether to Develop such Combination Product. The JDC shall make such determination within a reasonable time following receipt of such data, but in any event within [*] of the commencement of activities pursuant to the applicable plan. If the JDC determines not to Develop such Combination Product, then New River may elect to conduct the Development of such Combination Product itself, pursuant to the terms of Section 3.5.5.

           3.5.4Shire Proposal. If Shire proposes the Development of a Collaboration Product for any indication other than the first Collaboration Products for ADHD in each of Adults, Adolescents and Children, including an Improvement and/or Combination Product, to the JDC, but New River does not vote in favor of such proposal, then Shire shall have the right to conduct the Development of such Collaboration Product without New River, pursuant to the terms of Section 3.5.5.

           3.5.5Unilateral Development. The Party independently developing a Collaboration Product under Section 3.5.3, in the case of New River, or Section 3.5.4, in the case of Shire (the “Developing Party”), shall have the right unilaterally to conduct the

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Development of the applicable Collaboration Product (each such Collaboration Product, a “Unilateral Product”); provided, however, that such right shall be subject to the Developing Party conducting such Development in a manner that would not adversely affect in any significant way any then existing Collaboration Product being Developed or Commercialized under this Agreement. For any Unilateral Product, the non-Developing Party shall have the opportunity to opt back into the Development program and participate in the Development upon the [*] for any such Unilateral Product (a “[*] Opt-In Right”). At least [*] prior to [*] of such [*], the Developing Party shall provide to the other Party an updated proposal that contains, at a minimum the information set forth in Section 3.5.1, to enable such other Party to determine if it desires to exercise its [*] Opt-In Right. Such other Party shall have [*] after receipt of such updated proposal to exercise its [*] Opt-In Right. If such other Party exercises its [*] Opt-In Right, then such other Party shall be required to pay the Developing Party, within [*] after such exercise, an amount equal to [*] in respect of the Development of the applicable Unilateral Product prior to such exercise, and thereafter the [*] as if such Development expenses were incurred in connection with a Development Plan. If the non-Developing Party does not exercise its Phase III Opt-In Right but Regulatory Approval is obtained in the US Territory for the Unilateral Product, then the non-Developing Party shall be required to pay the Developing Party, within [*] of receipt of such Regulatory Approval, an amount equal to [*] [*] in respect of such Unilateral Product.

      3.6Shared Expenses.

           3.6.1Except as otherwise provided in Sections 3.3.2, 3.4.2 and 3.5.5, the Parties will share Development Expenses (“Shared Expenses”) as follows:

                 (a)any Development Expenses incurred by either Party that, as determined by the JDC, have worldwide application to the Development or Commercialization of the Collaboration Products will be borne [*] by Shire and [*] by New River, regardless of whether such work is conducted inside or outside of the United States; and

                 (b)any Development Expenses incurred by either Party for the Development of Collaboration Products to be Commercialized in the US Territory and which do not have worldwide application, will be borne [*] by Shire and [*] by New River.

For clarity, Shire may use in the ROW Territory the results of Development of the first Collaboration Products for ADHD in each of Adults, Adolescents and Children, without charge, but Shire shall be responsible for any additional studies for the ROW Territory that do not have application in the US Territory.

            3.6.2Quarterly Reconciliation of Development Expenses.

                 (a)Each Party shall calculate and maintain records of Shared Expenses incurred by it in accordance with procedures to be agreed upon between the Parties.

                 (b)Within five (5) Business Days following the end of each calendar quarter, Shire shall submit to New River a written report setting forth in reasonable detail, separately with respect to each Collaboration Product, the Shared Expenses it has incurred in such calendar quarter.

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                 (c)Within five (5) Business Days following the end of each calendar quarter, New River shall submit to Shire a written report setting forth in reasonable detail, separately with respect to each Collaboration Product, the Shared Expenses it has incurred in such calendar quarter.

                 (d)Within twenty-five (25) days following the end of each calendar quarter, Shire shall submit to New River a written report setting forth in reasonable detail the calculation of all Shared Expenses for each Collaboration Product, and the calculation of any net amount owed by New River to Shire or by Shire to New River, as the case may be, in order to ensure the appropriate sharing of Shared Expenses in accordance with the provisions of Section 3.6. The net amount payable shall be paid by Shire or New River, as the case may be, within thirty five (35) days following the end of each calendar quarter; provided, that, in the event of a dispute, the disputing Party shall pay the amount not in dispute and provide written notice within five (5) Business Days after receipt of the written report in question to the other, specifying such dispute and explaining the basis of the dispute. New River and Shire shall promptly thereafter meet and negotiate in good faith a resolution to such dispute. If such dispute is not resolved within forty-five (45) days after delivery of a notice of dispute with respect thereto to the other Party, the disputing Party may audit the other Party pursuant to the provisions of Section 8.6.2.

     3.7Use of Third Parties. Either Party may retain Third Parties to perform Development activities, subject to the terms provided in this Section 3.7; provided that prior to either Party subcontracting any Development for the US Territory it shall receive the prior written approval of the other Party, such approval not to be unreasonably withheld, conditioned, or delayed. Each Party shall remain liable for the performance of its obligations hereunder which it delegates to such Third Parties. Shire acknowledges and agrees that New River is currently subcontracting or intends to subcontract certain of the Development in the US Territory to those subcontractors for the designated activities set forth on Schedule 3.7. New River will not need the prior written approval of Shire to utilize such subcontractors on Schedule 3.7 for the indicated activities. Any Third Parties performing Development activities hereunder shall be subject to confidentiality and non-use obligations at least as stringent as those set forth in Article 10 and must comply with the terms of Article 11.

     3.8Right to Audit. Each Party shall use Diligent Efforts to ensure that the other Party’s authorized representatives, and shall ensure that Governmental Authorities, in both cases to the extent permitted by applicable Law, may, during regular business hours, (a) examine and inspect its facilities or, subject to any Third Party confidentiality restrictions or obligations, the facilities of any subcontractor or any investigator site used by it in the performance of Development of a Collaboration Product for Commercialization in the US Territory, including those sites in the ROW Territory if the Collaboration Product Developed at such site in the ROW Territory will be Commercialized in the US Territory, and (b) subject to applicable Law and any Third Party confidentiality restrictions or obligations, inspect and copy all data, documentation and work products relating to the activities performed by it, the subcontractor or investigator site, including, without limitation, the medical records of any patient participating in any clinical study. This right to inspect and copy all data, documentation, and work products relating to a Collaboration Product for Commercialization in the US Territory, including those sites in the ROW Territory if the Collaboration Product Developed at such site in the ROW Territory will be Commercialized in the US Territory, may be exercised at any time during the term of this Agreement (subject to each Party’s

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record retention policies then in effect), or such longer period as shall be required by applicable Law.

     3.9Assistance. Subject to the terms of this Article 3, each Party agrees to provide the other with all reasonable assistance and take all actions reasonably requested by the other Party that are necessary or desirable to enable the other Party to comply with any Law applicable to the Collaboration Products, including, but not limited to, meeting, reporting and other obligations to maintain and update any Regulatory Approvals for the Collaboration Products.

     3.10Compliance with Laws. Each Party or its permitted Third Party contractors shall perform its responsibilities under this Article 3, including those set forth in a Development Plan, in accordance with all applicable Laws, including without limitation cGLPs, cGCPs and cGMPs.

ARTICLE 4.
COMMERCIALIZATION OF COLLABORATION PRODUCTS

     4.1Principles of Commercialization. Shire will be solely responsible for Commercializing Collaboration Products in the US Territory and the ROW Territory during the Term; provided, however, that, during the Co-Promotion Period, Article 5 will apply to the Parties’ Co-Promotion of the applicable Collaboration Products in the US Territory.

      4.2Sales and Distribution of Collaboration Products to Third Parties.

           4.2.1Terms of Sale to Third Parties. For each Collaboration Product, including all Improvements, Combination Products and Co-Promote Products, Shire shall be solely responsible for handling all returns, recalls, order processing, invoicing and collection, distribution, and inventory and receivables arising from sales to Third Parties. New River may not accept orders from a Third Party for a Collaboration Product or make sales for its own account (except to Shire) or for Shire’s account. If New River receives any order for a Collaboration Product, it shall refer such orders to Shire for acceptance or rejection. Subject to Section 4.2.2, Shire shall have the right and responsibility for establishing and modifying the terms and conditions with respect to the sale of all Collaboration Products in the US Territory and the ROW Territory, including any terms and conditions relating to or affecting the price at which the Collaboration Products will be sold, discounts available to managed care providers, any discount attributable to payments on receivables, distribution of the Collaboration Products, and credits, price adjustments, or other discounts and allowances to be granted or refused.

           4.2.2[*]. If Shire or its Affiliates or sublicensees sell a Collaboration Product to a Third Party, [*] and at a [*] Shire or its Affiliates or sublicensees for sales of such Collaboration Product [*], then Shire [*] in respect of such sale.

     4.3Marketing Plans and Budgets for the US Territory. Shire shall be responsible for developing a Marketing Plan for each Collaboration Product in the US Territory. Each Marketing Plan developed by Shire shall be adopted in good faith in accordance with Shire’s standard practices with the overall objective of achieving the commercial potential of such Collaboration Product. Each Marketing Plan shall be deemed Confidential Information of Shire.

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           4.3.1Preparation of Initial Marketing Plan. Commencing [*] prior to the projected First Commercial Sale of a Collaboration Product, Shire will commence preparing an initial [*] Marketing Plan for the US Territory for such Collaboration Product for review and approval by the JMC; provided, however, promptly after the Effective Date, Shire will commence preparing the initial Marketing Plan for the first Collaboration Product for ADHD. As early as necessary in each calendar year thereafter, Shire shall amend and update each Marketing Plan for the US Territory for such Collaboration Products for submission of such proposed Marketing Plan for the US Territory to the JMC no later than September 30 of such year for review and approval.

           4.3.2Contents of Initial Marketing Plan. The initial Marketing Plan for each Collaboration Product shall set forth the strategy for the commercial launch of such Collaboration Product in the US Territory in a comprehensive plan that describes the Commercialization activities for such Collaboration Product (including advertising, education, planning, marketing, sales force training and allocation). Each initial draft Marketing Plan will contain such information as Shire believes necessary for the successful commercial launch of such Collaboration Product in the Field and in the US Territory and shall generally conform to the level of detail utilized by Shire in preparation of its own product plans.

     4.4Marketing Plans for ROW Territory. With respect to the ROW Territory, Shire will have full authority and discretion over the content of any marketing plan.

      4.5Regulatory Obligations During Commercialization.

           4.5.1Shire Responsibilities. Shire will maintain all regulatory filings and Regulatory Approvals in the ROW Territory for each Collaboration Product Developed pursuant to this Agreement, including all INDs and Drug Approval Applications. As between the Parties, Shire will be solely responsible for all activities in connection with maintaining Regulatory Approvals required for the Commercialization of Collaboration Product in the ROW Territory, including communicating and preparing and filing all reports (including adverse drug experience reports) with the applicable Governmental Authorities, as described in further detail in Section 3.4.3.

           4.5.2New River Responsibilities. Except as otherwise set forth in Sections 3.3.3(a) and 3.3.3(c), New River will maintain all regulatory filings and Regulatory Approvals in the US Territory for each Collaboration Product developed pursuant to this Agreement, including all INDs and Drug Approval Applications. As between the Parties, New River will be solely responsible for all activities in connection with maintaining Regulatory Approvals required for the Commercialization of Collaboration Product in the US Territory, including communicating and preparing and filing all reports with the applicable Governmental Authorities, as described in further detail in and subject to Section 3.3.3.

           4.5.3Pharmacovigilance. Shire shall be responsible for all processing of information related to any adverse events, including, without limitation, any information regarding such adverse events that is received from a Third Party, related to a Collaboration Product after the First Commercial Sale of such Product. The Party conducting any clinical studies prior to such First Commercial Sale shall be responsible for all processing of information related to any adverse events associated with such studies. New River shall be responsible for all expedited and periodic reporting of such events to the FDA, all in

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accordance with 21 C.F.R. Sections 312.32 and 314.80. As soon as reasonably practicable following the date of this Agreement, the pharmacovigilance departments of each of New River and Shire shall meet and determine the approach to be taken for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Products, consistent with the provisions of this Section 4.5.3. Such approach shall be documented in a separate and appropriate written pharmacovigilance agreement between each of New River and Shire. Shire agrees to share relevant information it receives (either directly or indirectly) with New River in a timely manner so as to allow New River to comply with its responsibility to report pharmacovigilance information under this Section 4.5.3.

      4.6Diligence in Commercialization.

           4.6.1Diligence. Shire will use Diligent Efforts in the US Territory and each of the Major EU Markets to launch a Collaboration Product in each such country after receiving all Regulatory Approvals for such Collaboration Product in such country, and thereafter will use Diligent Efforts to Commercialize the Collaboration Product in such country. With respect to the US Territory, Shire, and if applicable New River, will use Diligent Efforts to perform all activities set forth in the applicable Marketing Plan.

           4.6.2Details. Without limiting the generality of the foregoing, with respect to the first Collaboration Product Commercialized hereunder in the US Territory for ADHD, Shire will provide: (a) for a sales force of at least [*] Sales Representatives to promote such Collaboration Product [*] in the US Territory during the [*] following First Commercial Sale of such Collaboration Product in the US Territory; (b) for a sales force of at least [*] Sales Representatives to promote such Collaboration Product [*] in the US Territory during the next [*]; and (c) a sales force consistent with the then-applicable Marketing Plan thereafter. For the avoidance of doubt, if New River exercises its Co-Promotion Option, any Sales Representatives provided by New River to Co-Promote such Collaboration Product shall count towards the amounts set forth in this Section 4.6.2.

           4.6.3[*]. If a Collaboration Product for ADHD is, or is [*] to, the [*] product approved for ADHD and [*] that such Collaboration Product either (a) [*] products for ADHD, or (b) [*], then Shire will ensure that such Collaboration Product for ADHD is [*] of Shire in the US Territory that [*] formulated for [*]. If a Collaboration Product for ADHD does not originally [*] but the Parties are later able to [*], the provisions of this Section 4.6.3 shall be applicable.

      4.7Cost of Commercialization.

           4.7.1US Territory. In the US Territory, (a) each Party shall bear its own costs in connection with the Commercialization of Collaboration Products, subject to the payment provisions of Article 6 and the sharing and reconciliation provisions described in Section 7.4, and (b) [*] shall bear [*] of any Pre-Marketing Expenses incurred by the Parties, which shall be reported and reimbursed through the mechanisms set forth in Section 7.4.3.

           4.7.2ROW Territory. In the ROW Territory, Shire shall bear all costs in connection with the Commercialization of Collaboration Products, including all Pre-Marketing Expenses.

     4.8Use of Third Parties. Shire may retain Affiliates and/or Third Parties to perform Commercialization activities in the ROW Territory. Shire shall remain liable for the

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performance of its obligations hereunder that it delegates to such Affiliates and/or Third Parties. Each Party covenants and agrees not to use any Third Parties to perform promotional activities for Collaboration Products in the US Territory or in the Major EU Markets without the prior written approval of the other Party, such approval not to be unreasonably withheld, conditioned, or delayed. If the Parties agree to engage any such Third Party sales force, such Third Party sales force will be directed, trained and controlled by Shire.

      4.9Promotional Materials.

           4.9.1Creation of Promotional Materials. Shire will create and develop Promotional Materials for the US Territory in accordance with an applicable Marketing Plan and for the ROW Territory. To the extent that Shire describes in any item of the Promotional Materials New River’s Carrierwave™ proprietary technology, Shire shall include in such Promotional Materials the New River trademark for such technology. New River hereby grants Shire a royalty-free license for such purpose. To the extent Shire shall include such description and trademark in the Promotional Materials, Shire shall comply with New River’s then-current guidelines for trademark usage, a copy of which shall be provided to Shire from time to time. Shire shall provide samples of Promotional Materials for use in the US Territory to the JMC for review, prior to distributing such Promotional Materials for use by the Parties’ Sales Representatives in the US Territory.

           4.9.2Shire Ownership of Promotional Materials. Shire shall own all right, title and interest in and to any Promotional Materials relating to the Collaboration Products, including without limitation applicable copyrights and trademarks, but excluding trademarks owned by New River in accordance with Section 11.9, and New River hereby assigns all its right, title and interest to such Promotional Materials to Shire and agrees to execute all documents and take all actions as are reasonably requested by Shire to vest title to such Promotional Materials in Shire.

           4.9.3Use of Promotional Materials Exclusively for Collaboration Products. The Promotional Materials, and any aspects of those uniquely tied to the Collaboration Products, shall be used exclusively in connection with the Collaboration Products in accordance with the terms of this Agreement.

           4.9.4Retention of Rights. Shire and New River, or their respective Affiliates, shall retain, throughout the Term and following termination, all rights, including without limitation all copyrights and trademarks, to all of their respective programs and materials in all formats (print, video, audio, digital, computer, etc.) regarding sales training, patient education and disease management programs owned by them as of the Effective Date or developed by them during the Term but outside of this Agreement, regardless of the fact that such programs or materials are shared with the other Party, as well as any modifications of such programs or materials that they may develop in the future which are not specific to a Collaboration Product. In accordance with Section 4.9.2, Shire shall own any such modifications specific to a Collaboration Product.

     4.10Provisions Applicable to Sales Representatives. In the US Territory, Shire agrees with respect to itself and its Affiliates and their respective Sales Representatives, and if New River exercises its Co-Promotion Right, New River agrees with respect to itself and its Affiliates and their respective Sales Representatives, that:

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           4.10.1No Changes to the Promotional Materials. Each Party will instruct its Sales Representatives to use, and will monitor its Sales Representatives to ensure that such Sales Representatives use, only Promotional Materials, Samples, and literature approved for use by Shire for the promotion of the Collaboration Product. Neither Party will misbrand, change, alter or adulterate any Promotional Material or Samples supplied to it for distribution or use by such Party or its Sales Representatives.

           4.10.2Monitoring of Sales Representatives. Each Party will instruct its Sales Representatives to do the following, and will monitor its Sales Representatives so that such personnel do, the following: (a) limit claims of efficacy and safety for the Collaboration Product to those that are consistent with approved promotional claims in, and not add, delete or modify claims of efficacy and safety in the promotion of the Collaboration Product in any respect from those claims of efficacy and safety that are contained in, the Marketing Plan for such Collaboration Product, with applicable Law, and with product labeling for the Collaboration Product as approved by the FDA; (b) not make any changes in Promotional Materials provided by Shire; (c) use Promotional Materials and Samples in a manner that is consistent with the Marketing Plan, with applicable Law, and with the product labeling for the Collaboration Product as approved by the FDA; and (d) promote the Collaboration Product in adherence in all material respects with applicable Laws, as well as the [*] the [*] the [*] for the [*] and any other [*] generally applicable to such Sales Representative.

           4.10.3PDM Act and Controlled Substances Act. Each Party shall use Samples in the US Territory strictly in accordance with the then-current applicable Marketing Plan and shall distribute Samples in full compliance with all applicable Laws, including the requirements of the PDM Act and the Controlled Substances Act. Specifically, each Party shall establish, maintain and adhere to written procedures to assure that such Party and its Sales Representatives comply with all requirements of the PDM Act and the Controlled Substances Act, as applicable. Such procedures shall include a requirement that each Party notify the other Party immediately upon learning that any Samples shipped by such Party have been lost or have not been received as scheduled. Each Party will maintain records as required by the PDM Act and all other Laws and shall allow representatives of the other Party to inspect such records on request. Upon reasonable advance notice to a Party, the other Party shall be entitled to conduct an inspection and audit of such Party’s Sample distribution practices by its Sales Representatives in the US Territory and any facilities where Samples are stored by such Party. Such inspection and audit shall be made in accordance with the applicable provisions of the PDM Act and with the provisions of this Agreement. The costs and expenses of conducting such audit shall be deemed a Marketing Expense.

           4.10.4Equal Opportunity Employer. Unless exempted from such compliance, each Party will comply with all applicable Laws in the hiring, employment, and discharge of all Sales Representatives. Each Party represents that such Party is an Equal Opportunity Employer and does not discriminate against any person because of race, color, creed, age, sex, sexual preference, marital status, or national origin.

           4.10.5Compliance. Each Party will ensure that its Sales Representatives are informed of all applicable obligations and policies relating to the performance of this Agreement and are bound to comply with same.

           4.10.6Insurance. Each Party acknowledges and agrees that the other Party does not and will not maintain or procure any worker’s compensation, healthcare, or other

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insurance for or on behalf of the other Party’s Sales Representative, all of which shall be such Party’s sole responsibility.

           4.10.7No Participation in Benefit Plans. Each Party acknowledges and agrees that all Sales Representatives of such Party are not, and are not intended to be or be treated as, employees of the other Party or any of its Affiliates, and that such individuals are not, and are not intended to be, eligible to participate in any benefits programs or in any “employee benefit plans” (as such term is defined in section 3(3) of ERISA) that are sponsored by the other Party or any of its Affiliates or that are offered from time to time by the other Party or its Affiliates to their own employees (the “Benefit Plans”). All matters of compensation, benefits and other terms of employment for any such Sales Representatives shall be solely a matter between a Party and such individual. A Party shall not be responsible to the other Party, or to its Sales Representatives for any compensation, expense reimbursements or benefits (including, without limitation, vacation and holiday remuneration, healthcare coverage or insurance, life insurance, severance or termination of employment benefits, pension or profit-sharing benefits and disability benefits), payroll-related taxes or withholdings, or any governmental charges or benefits (including without limitation unemployment and disability insurance contributions or benefits and workmen’ compensation contributions or benefits) that may be imposed upon or be related to the performance by such Party and such individuals of this Agreement, all of which shall be the sole responsibility of such Party, even if it is subsequently determined by any court or governmental agency that any such individual may be a common law employee of the other Party or any of its Affiliates or is otherwise entitled to such payments and benefits.

           4.10.8Responsibility for Acts and Omissions of its Personnel. Each Party shall be solely responsible for its acts and omissions and for those acts or omissions of its Sales Representatives while performing any of the services to be provided under this Agreement. Each Party shall be solely responsible and liable for all probationary and termination actions taken by it, as well as for the formulation, content and dissemination (including content) of all employment policies and rules (including written probationary and termination policies) applicable to its employees and contractors.

           4.10.9Indemnification for Employee Reclassification. Each Party will indemnify, defend, and hold harmless the other Party and its Affiliates, and its and their directors, employees and agents from and against any damages, liability, loss and costs that may be paid or payable by any such Person resulting from or in connection with any claim or other cause of action asserted by any Sales Representative of the other Party or any Third Party (including without limitation federal, state or local governmental authorities) arising out of the execution and/or performance of this Agreement that is based on or with respect to:

                 (a)costs, damages and losses that a Party or its Affiliates may incur resulting from any claims for benefits that any Sales Representative of the other Party may make under or with respect to any Benefit Plan;

                 (b)any payment or obligation to make a payment to any Sales Representative of the other Party relating in any way to any compensation, benefits of any type under any employee benefit plan (as such term is defined in Section 3(3) of ERISA) and corresponding employee benefits plans under any other country’s laws, and any other bonus, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance, termination benefits, and other similar fringe or employee benefit plans, programs

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or arrangements that may be sponsored at any time by Shire or any of its Affiliates or by New River or any of its Affiliates, even if it is subsequently determined by any court or governmental agency that any such Sales Representative may be a common law employee of the other Party or any of its Affiliates or entitled to same;

                 (c)the payment or withholding of any contributions, payroll taxes, or any other payroll-related item by or on behalf of a Party or any of its Sales Representative with respect to which such Party or any such individuals may be responsible hereunder or pursuant to applicable law to pay, make, collect, withhold or contribute, even if it is subsequently determined by any court or any governmental agency that any such Sales Representative may be a common law employee of such Party or any of its Affiliates or otherwise entitled to such benefits; and

                 (d)failure of a Party to withhold or pay required taxes or failure to file required forms with regard to compensation paid to a Party by the other Party and compensation and benefits paid or extended by a Party to any of its Sales Representatives.

      4.11 Reporting. Until the expiration of the later of (y) the period during which Section 4.6.2 applies or (z) the Co-Promotion Period (for so long as New River is Co-Promoting a Collaboration Product), Shire shall provide New River, within thirty (30) days following the end of each calendar quarter, a report setting forth the total number of Details and Primary Position Details, by decile and target physician, actually performed by the Shire Sales Representatives for such calendar quarter, or in such other form as Shire may regularly prepare for its own internal purposes, redacted for confidential information not related to Collaboration Product.

     4.12Compliance with Laws. Each Party or its permitted Third Party contractors shall perform its responsibilities under this Article 4, including those set forth in a Marketing Plan, in accordance with all applicable Laws.

ARTICLE 5.
CO-PROMOTION OF COLLABORATION PRODUCTS

     5.1Option. New River will have the right (the “Co-Promotion Option”) to elect from time to time to provide Details for each Collaboration Product in the US Territory up to twenty-five percent (25%) of total Details for such Collaboration Product pursuant to the provisions of this Article 5. In addition to the then-current Marketing Plan, if prior to exercising the Co-Promotion Option, New River reasonably requests additional information Controlled by Shire relating to the Collaboration Product in order to evaluate the exercise of its Co-Promotion Option, Shire shall promptly provide such information to New River for such purpose. If New River exercises its Co-Promotion Option, it will not be entitled to [*] without the prior written approval of Shire.

     5.2Exercise of Option. New River shall provide to Shire at least [*] written notice of the first exercise of its Co-Promotion Option prior to the commencement date of such Co-Promotion. If New River terminates its Co-Promotion with respect to a Collaboration Product in the US Territory, New River shall provide Shire at least [*] written notice of any subsequent exercise of its Co-Promotion Option prior to the commencement date of such Co-Promotion. In each exercise of its Co-Promotion Option, New River will specify the date upon which it will commence Co-Promotion, the percentage of Details that

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New River intends to provide (up to twenty-five percent (25%) of the total Details for such Collaboration Product) and will commit to Co-Promote a Collaboration Product for at least [*]. New River may adjust the level of its Detail commitment on an annual basis with at least [*] notice, but no such adjustment shall change its Detail commitment by more than [*] of the total Details for such Collaboration Product.

     5.3Co-Promotion Period. The “Co-Promotion Period” for each Collaboration Product will commence upon the date specified in New River’s exercise of the Co-Promotion Option and will expire upon the earlier of: (a) termination of the Parties’ Commercialization of the applicable Collaboration Product in the US Territory, and (b) [*] following the date that New River provides written notice to Shire terminating New River’s Co-Promotion activities hereunder.

     5.4Amendment of Marketing Plan to Include Co-Promotion Activities. The Parties’ Co-Promotion activities for any Collaboration Product in the US Territory shall be governed by a Marketing Plan. After New River gives notice of its intention to exercise a Co-Promotion Option with respect to a Collaboration Product, Shire shall amend the applicable Marketing Plan to set forth the Co-Promotion activities of the Parties for such Collaboration Product in a manner consistent with the terms of this Agreement. Each Marketing Plan for a Co-Promote Product shall set forth the compensation/incentive plans, targeting an allocation between the Parties of the Co-Promotion activities for the Collaboration Product in the US Territory, using reasonable and good faith efforts to allocate the Co-Promotion activities in a manner to give effect to the sales and marketing strategy described in the applicable Marketing Plan and in the best interests of such Collaboration Product. If at the time of exercise of its Co-Promotion Option, New River commits to Co-Promote a Collaboration Product for at least [*] at a fixed level of Detail commitment, then, except with the consent of New River, the applicable Marketing Plan will allocate between the Parties, on a reasonable pro rata basis, the opportunity to promote such Collaboration Product to high prescribing physicians and in centers of excellence. Each Marketing Plan for a Co-Promote Product shall be approved by the JMC in accordance with the terms of Article 2, and each such plan may be amended in a manner consistent with this Agreement.

     5.5Scope. The Co-Promotion by New River of any Collaboration Products under this Agreement shall be subject to the terms and conditions set forth in this Article 5. For purposes of this Article 5, a Collaboration Product subject to Co-Promotion under this Agreement shall be referred to as a “Co-Promote Product”.

      5.6Advertising and Promotional Materials.

           5.6.1Inclusion in Marketing Plan. Shire will describe in the applicable Marketing Plan for a Co-Promote Product how and the manner in which the Parties will be presented and described to the medical community in any Promotional Materials or other materials related to the Co-Promote Product and the placement of the names and logos of the Parties, in each case as permitted by applicable Law and with the labeling for the Co-Promote Product approved by the FDA. The Marketing Plan for a Co-Promote Product shall also set forth a delivery schedule for Promotional Materials to be provided by Shire to New River.

           5.6.2Shire Approval. All written, electronic and visual communications, including all Promotional Materials, provided by a Party to its Sales Representatives Detailing the Co-Promote Product for use by such personnel regarding the Co-Promote

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Product positioning, selling messages or product strategy will be subject to prior review and approval by Shire; provided, that a communication, once approved, need not be re-submitted for approval again prior to its re-use unless the Co-Promote Product labeling applicable to such communication has been changed in any way since such prior approval date; provided that it is understood that Shire shall have the right to withdraw any such communication even after approval.

     5.7Shipment, Storage and Allocation of Samples. If set forth in the applicable Marketing Plan for a Co-Promote Product, Shire shall ship reasonable requirements of Samples for the US Territory to New River’s distribution facility in a timely manner in accordance with the schedule for distribution as outlined in such Marketing Plan. New River shall be responsible for supplying its Sales Representatives in the US Territory with Samples from New River’s distribution facility.

      5.8Training.

           5.8.1Shire Control. The direction and training of any Sales Representatives of New River for a Co-Promote Product shall be under the control of Shire.

           5.8.2Timing; Expenses. Shire shall provide sales training on the Collaboration Products for the New River Sales Representatives who will be performing Sales Calls for a Co-Promote Product similar to the training on such Co-Promote Product Shire provides to its own Sales Representatives who perform Sales Calls on such Co-Promote Product. Shire shall provide such training at a time that is mutually acceptable to the Parties and reasonably prior to the commencement of Co-Promotion activities by the applicable New River Sales Representative. Such training shall be deemed a Pre-Marketing Expense or Marketing Expense, as applicable. Notwithstanding anything to the contrary in this Agreement, New River shall pay all travel and housing costs for its Sales Representatives to attend such training and shall reimburse Shire for the training materials provided to New River’s Sales Representatives. Such costs incurred by New River pursuant the preceding sentence of this Section 5.8.2 shall not be considered or included in Allowable Expenses or Pre-Marketing Expenses.

           5.8.3Continuing Education. Shire shall provide continuing education regarding each Co-Promote Product for Sales Representatives of New River on the same schedule as it provides continuing education for its own Sales Representatives for such Co-Promote Product.

           5.8.4Qualifications. All New River Sales Representatives who will be performing Sales Calls for a Co-Promote Product shall be required to have similar educational qualifications as Shire requires for its own Sales Representatives promoting such Co-Promote Product, and Shire shall provide New River with a copy of such educational qualifications in writing. Additionally, all New River Sales Representatives prior to being assigned to Co-Promotion by New River shall have had relevant experience applicable to the promoting and detailing of pharmaceutical products and shall have received appropriate training on proper marketing and sales techniques to be used in promoting pharmaceutical products in accordance with all applicable Laws. The New River Sales Representatives shall be subject to a reasonable proficiency examination relevant to the Co-Promote Product and will require an acceptable testing performance or score, in the same manner as Shire Sales

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Representatives. Shire will have an opportunity to interview all such proposed hires and to provide feedback to New River, which New River will consider in good faith.

     5.9Provisions Applicable to All New River Sales Representatives. The following shall apply to all New River Sales Representatives used by New River in connection with the performance of its Co-Promotion activities:

           5.9.1Coordination of New River Sales Representative Activity. All New River Sales Representatives who will be performing Details shall be assigned their responsibilities, activities, Sales Calls territory and Detail requirements by Shire in accordance with the applicable Marketing Plan. All New River Sales Representatives shall keep Shire fully informed of their activities and shall provide Shire, within thirty (30) days following the end of each calendar quarter, a report setting forth the total number of Details and Primary Position Details, by decile and target physician, actually performed by such New River Sales Representative for such calendar quarter, redacted for confidential information not relating to Collaboration Product.

           5.9.2Noncompliance. If Shire has a reasonable basis for believing that any New River Sales Representative may have (a) violated any applicable Law or an applicable Shire policy provided in writing to New River, or (b) failed to comply with industry standards or terms of this Agreement, Shire shall have the right to request New River immediately to address the performance of such individual, in addition to any other rights or remedies available to Shire under this Agreement, at law or in equity. New River shall evaluate and resolve such issue. New River shall keep Shire informed of the progress of, and information learned during, its evaluation, and shall provide Shire with a reasonably detailed written report summarizing any steps taken toward resolution of the matter within ten (10) Business Days after such evaluation.

ARTICLE 6.
MANUFACTURE OF COLLABORATION PRODUCTS

      6.1Manufacture and Supply – US Territory.

           6.1.1Manufacturing Process. New River will use Diligent Efforts to develop a process for the Manufacture of bulk Compound and Collaboration Products and to scale up such process to a level sufficient to Manufacture and supply in the US Territory clinical and commercial supplies of Collaboration Products. New River will undertake such development in consultation with the JSC, including preparation of filings necessary to obtain Regulatory Approval for the Manufacture of bulk Compound and Collaboration Products for the US Territory and the selection of any Third Party Manufacturer. In the event that New River includes the filings referred to in this Section 6.1.1 in Drug Master Files in the United States, Shire may reference such Drug Master Files for countries in the ROW Territory for the purpose of prosecuting Drug Approval Applications in such countries for Collaboration Products. Once such filings are made, no changes to the process for the Manufacture of Compound and Collaboration Products for the US Territory shall be made without the written consent of Shire, such consent not to be unreasonably withheld, conditioned or delayed; provided that New River will not require the prior written consent of Shire to make changes related to the process for the Manufacture of Compound and/or Collaboration Products hereunder that are required by a Governmental Authority or applicable Law. Schedule 6.1.1 sets forth: (a) a list of each Third Party Manufacturer New River is utilizing as of the

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Effective Date or intends to use to Manufacture Compound and/or Collaboration Product, and (b) a description of the work to be done by each such Third Party Manufacturer. New River’s retention of any Third Party Manufacturer shall be subject to the prior written approval of Shire, not to be unreasonably withheld, conditioned, or delayed; provided, however, that New River will not need the prior written approval of Shire to utilize Third Party Manufacturers listed on Schedule 6.1.1 for the indicated Manufacturing activities.

           Notwithstanding anything to the contrary in Section 3.6, all costs related to the foregoing activities set forth in this Section 6.1.1 shall to the extent related to the first Collaboration Products for ADHD [*], be borne solely by [*] pursuant to Section 3.3.2. In all other cases, all costs related to the foregoing activities set forth in this Section 6.1.1 shall be deemed Shared Expenses.

           6.1.2Development Supply. New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, Compound and Collaboration Products in bulk and finished form for Development activities to be performed by a Party under Section 3.3 of this Agreement for the US Territory. Prior to receipt of Regulatory Approval for the first Collaboration Products for ADHD [*] in the US Territory, the costs of manufacturing quantities of such Collaboration Products (other than for the build-up of Commercial supply) in the US Territory shall be borne solely by [*]. Prior to receipt of Regulatory Approval of a Collaboration Product other than the first Collaboration Products for ADHD [*] in the US Territory, the costs of manufacturing quantities of such Collaboration Product (other than for the build-up of Commercial supply) in the US Territory shall be treated as Development Expenses and the applicable Development Plan shall designate which such costs, if any, shall be treated as Shared Expenses under Section 3.6.1.

           6.1.3Commercial Supply by New River. Subject to Sections 2.4.2 and 6.3, New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, finished Collaboration Products for sales for all indications in the US Territory. Any such supply will be provided by New River to Shire at [*] (as determined pursuant to Exhibit A). For the avoidance of doubt, the [*] used in calculating Allowable Expenses will be [*] for such finished Collaboration Product, as determined in accordance with Exhibit A, not [*].

     6.2Specifications and Terms of Supply; Multiple Sources. New River, in consultation with the JSC, shall establish the specifications, including any necessary documentation, certificates of analysis and test results, for the bulk Compound and bulk and finished Collaboration Products to be Manufactured under this Article 6, in each case subject to the prior written approval of Shire, such approval not be unreasonably withheld, conditioned or delayed. If a Governmental Authority in a country of the ROW Territory has promulgated any Laws or guidance documents that relate or will relate to the Manufacture of the Compound or a Collaboration Product that are different from those promulgated in the US Territory or the European Union, Shire shall notify New River of such Laws or guidance documents. The Parties shall endeavor to maintain compatible specifications for bulk Compound on a worldwide basis, and to minimize the number of distinct specifications in different countries. New River shall establish at least [*] sources of supply for each of Compound and Collaboration Product to be Manufactured under this Article 6.

     6.3Manufacture by Shire; Commercial Supply by Shire. Shire will have the right to act as, or to appoint a Third Party to act as, a second source for Collaboration Products under terms and conditions to be established by the Parties and subject to reasonable

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commercial qualification by New River and applicable regulatory requirements. In connection with such right, and based on the specifications provided by New River under Section 6.2, Shire will prepare all specifications required for any facility at which Shire intends to Manufacture, or have Manufactured, Collaboration Products, including cGMP qualification guidelines, and any QA approved procedures to be followed during the qualification of such facility, all consistent with the specifications and procedures approved in any existing Regulatory Approval, in each case at Shire’s sole expense. Following validation of such facility, the JSC will task Shire with the production of quantities of Collaboration Products at least sufficient for Shire to maintain such validation as a second source and such quantities shall be available for distribution by Shire. For purposes of determining the Allowable Expenses for sales of Collaboration Products to Third Parties, the [*] on such sales shall be equal to [*] for the quantity of such Collaboration Products actually sold, as determined in accordance with Exhibit A. In the event that [*] any agreement with a Third Party Manufacturer for the Manufacture of Compound or otherwise [*] such that there is a reasonable likelihood of insufficient quantities of Compound to satisfy the need thereof for the Manufacture of Collaboration Products, then Shire shall be entitled, but not be required, to assume in whole or in part New River’s rights and related obligations under such agreement (to the extent permissible thereunder) or otherwise direct the exercise of rights and performance of obligations by New River under such agreement, including the establishment of additional Third Party Manufacturers or Manufacture by Shire, in each case upon the mutual agreement of the Parties, such agreement not to be unreasonably withheld, delayed or conditioned. In such event the Parties shall meet and confer to devise the most effective supply plan for the bulk Compound and/or Collaboration Products and to consider amendments to this or other agreements, as necessary.

     6.4Supply Terms. The Parties, in consultation with the JSC, will establish the terms and conditions applicable to the supply of Compound and Collaboration Products by New River to Shire under this Article 6, and enter into an appropriate supply agreement with respect thereto containing terms and conditions consistent with the terms of this Agreement, including without limitation, this Article 6 and at a minimum those terms and conditions as set forth on Exhibit D, to the extent New River is able to obtain such terms from Third Party Manufacturers having used Diligent Efforts to do so.

      6.5Manufacture and Supply – ROW Territory.

           6.5.1Manufacturing Process. New River will use Diligent Efforts to develop a process for the Manufacture of bulk Compound and to scale up such process to a level sufficient to Manufacture and supply clinical and commercial supplies of bulk Compound for the ROW Territory. New River will undertake such development in consultation with the JSC, including the preparation of filings necessary to obtain Regulatory Approval for the Manufacture of bulk Compound for the ROW Territory and the selection of any Third Party Manufacturer. In the event that New River includes the filings referred to in this Section 6.5.1 in Drug Master Files in the US Territory, Shire may reference such Drug Master Files for countries in the ROW Territory in which Shire seeks Regulatory Approval of Collaboration Products; provided, however, that Shire will provide New River with assistance as reasonably requested by New River, and at no cost to New River, to ensure compliance with regulatory requirements in such countries. Once such filings are made, no changes to the process for the Manufacture of bulk Compound for the ROW Territory shall be made without the written consent of Shire, such consent not to be unreasonably withheld, conditioned or delayed; provided that New River will not require the prior written consent of

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Shire to make changes related to the process for the Manufacture of bulk Compound for the ROW Territory hereunder that are required by a Governmental Authority or applicable Law. New River’s retention of any Third Party Manufacturer to perform any activities under this Section 6.5.1 shall be subject to the prior written approval of Shire, not to be unreasonably withheld, conditioned, or delayed.

           All costs related to the foregoing activities set forth in this Section 6.5.1 that are additional to any activities set forth in Section 6.1.1 shall be charged by New River to Shire at [*].

           6.5.2Development Supply. New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, bulk Compound for Development activities to be performed by Shire under this Agreement. Any such supply will be provided by New River to Shire [*] (as determined in accordance with Exhibit A).

           6.5.3Commercial Supply. New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, bulk Compound for use in the Manufacture of Collaboration Products by Shire or, at Shire’s direction, by a Third Party. Any such supply will be provided by New River to Shire [*] (as determined in accordance with Exhibit A). Shire will arrange for the Manufacture of Collaboration Products for sale in the ROW Territory using bulk Compound provided by New River under this Section 6.5.3.

ARTICLE 7.
FINANCIAL TERMS

     7.1Licensing Fee. As partial payment for the rights and licenses granted by New River pursuant to this Agreement, Shire shall pay to New River a license fee equal to $50,000,000 within ten (10) Business Days after the Effective Date. This fee shall be non-creditable and non-refundable against any future obligations of Shire under this Agreement, subject to Section 7.3 and Section 13.6.

     7.2Milestone Payments. Shire shall make the following milestone payments, which shall be non-creditable and non-refundable, subject to Section 7.3 and Section 13.6, to New River within ten (10) Business Days after the achievement of each of the following milestones (or, in the event that any such milestone is achieved by New River, after New River shall have given Shire written notice that such milestone has been achieved):

MILESTONE EVENT	MILESTONE PAYMENT
(a) Upon FDA acceptance of the first, and only the first, Drug Approval Application for Collaboration Product for ADHD in the Field in the US Territory, as evidenced by [*].	$50,000,000
(b) Upon [*] of the first Collaboration Product for ADHD in the Field in the US Territory [*], as follows:        [*]	[*]
[*]	[*]

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MILESTONE EVENT	MILESTONE PAYMENT
[*]	[*]
(c) At the end of the first, and only the first, calendar year during which the cumulative worldwide Net Sales of all Collaboration Products during such calendar year exceed [*]	$100,000,000
(d) [*] For the avoidance of doubt, this milestone is paid only once regardless of the number of [*] in which a [*].	$5,000,000

     No milestone is to be paid more than once irrespective of the number of Collaboration Products Developed, Manufactured or Commercialized under this Agreement.

     7.3Refunds by New River. New River shall make the following refunds to Shire within thirty (30) days after each of the following dates if New River has not received Regulatory Approval in the US Territory for a Collaboration Product for an ADHD indication on or before such date: (a) $[*] on [*], (b) $[*] on [*], and (c) $[*] on [*]. The total refund amount by New River under this Section 7.3 shall not exceed $[*].

      7.4Sharing of US Product Profit.

           7.4.1US Collaboration Product for ADHD. New River and Shire or, if Shire so nominates, its Affiliate in the US Territory shall share US Product Profit for the first Collaboration Product approved in the US Territory for ADHD as set forth in this Section 7.4.

                 (a)If such Collaboration Product has [*], then (i) during the period beginning with the First Commercial Sale and ending on the last day of the month that is twenty-four (24) months following the month in which the First Commercial Sale of such Collaboration Product occurs, the US Product Profit for such Collaboration Product will be allocated seventy-five percent (75%) to Shire and twenty-five percent (25%) to New River, and (ii) after such twenty-four (24) month period, the US Product Profit for such Collaboration Product will be allocated fifty percent (50%) to Shire and fifty percent (50%) to New River.

                 (b)If such Collaboration Product has received a [*] then the US Product Profit for such Collaboration Product will be allocated between the Parties based on the formula set forth on Exhibit B.

                 (c)If such Collaboration Product initially [*], then, effective as of the first day of the first calendar month following such [*], on a prospective basis only, the allocation of US Product Profit for such Collaboration Product will be as set forth in Section 7.4.1(a) .

                 (d)If such Collaboration Product initially [*], then New River shall use Diligent Efforts to [*]. Shire shall provide such assistance as may be reasonably requested by New River in connection with seeking [*], at no cost to New River. Any Development Expenses incurred in seeking [*] shall be the sole responsibility of New River.

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                 (e)In the event of a change in the regulatory scheme [*] under the [*], the terms of this Section 7.4 (as well as any other terms of this Agreement relating to [*]) will be interpreted in the manner that conforms most closely to the [*] existing as of the Effective Date. In any event, if such regulatory change results in a Collaboration Product [*] under such [*], then, for purposes of this Agreement, New River will have been deemed to have [*]

           7.4.2Other Collaboration Products in the US Territory. Except as set forth in Section 7.4.1, New River and Shire or, if Shire so nominates, its Affiliate in the US Territory shall share [*] in the US Product Profit for each Collaboration Product, irrespective of the [*] by such Collaboration Product.

           7.4.3Reporting and Payment.

                 (a)Within five (5) Business Days after the end of each calendar quarter, New River shall report to Shire New River’s individual Allowable Expense items (with appropriate supporting information) involved in the computation of US Product Profit and accrued during such quarter, as well as any Pre-Marketing Expenses, incurred and accrued during such quarter with respect to each such Collaboration Product (the “New River Report”).

                 (b)Within five (5) Business Days after the end of each calendar quarter, Shire shall report to New River Net Sales and Shire’s individual Allowable Expense items (with appropriate supporting information) involved in the computation of US Product Profit and accrued during such quarter, as well as any Pre-Marketing Expenses, incurred and accrued during such quarter with respect to each such Collaboration Product (the “Shire Report”).

                 (c)The New River Reports and the Shire Reports will be in such form as the Parties may reasonably agree from time to time. The Parties shall determine and report Marketing Expenses for their respective full-time equivalent sales force personnel using the same mutually acceptable mechanism.

                 (d)Within twenty-five (25) days after the end of each calendar quarter, Shire shall provide for each Collaboration Product one consolidated Financial Statement for the US Territory to the JMC. Within ten (10) days after receipt of the Financial Statement, the JMC shall direct the remittance between the Parties of an amount to effectuate the sharing of the US Product Profit (including the reimbursement of Allowable Expenses and Phase IV and Related Expenses) in accordance with Sections 7.4.1 and 7.4.2, Pre-Marketing Expenses in accordance with Section 4.7.1 for all Collaboration Products. Any such payment shall be made, in any event, within ten (10) days of the date that the JMC directs the remittance.

           7.4.4Term.The Parties shall share US Product Profit hereunder with respect to each Collaboration Product in the US Territory until each such Collaboration Product is permanently withdrawn from and is no longer being sold anywhere in the US Territory.

      7.5Royalties on Net Sales in ROW Territory.

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           7.5.1Royalty Rates [*]. As further consideration for New River’s grant of the rights and licenses to Shire hereunder, subject to the adjustments provided for in Section 7.5.3, Shire will pay, or cause to be paid, to New River, on a Collaboration Product-by-Collaboration Product basis, a royalty equal to:

                 (a)[*] of aggregate Net Sales of such Collaboration Product [*], for that portion of the total amount of aggregate Net Sales of such Collaboration Product [*] in any calendar year that is less than or equal to [*];

                 (b)[*] of aggregate Net Sales of such Collaboration Product [*], for that portion of the total amount of aggregate Net Sales of such Collaboration Product [*] in any calendar year that is greater than $[*] but less than or equal to $[*];

                 (c)[*] of aggregate Net Sales of such Collaboration Product [*], for that portion of the total amount of aggregate Net Sales of such Collaboration Product [*] in any calendar year that exceeds [*].

           7.5.2Royalty Rates in ROW Territory (excluding Major EU Markets). As further consideration for New River’s grant of the rights and licenses to Shire hereunder, subject to the adjustments provided for in Section 7.5.3, Shire will pay, or cause to be paid, to New River a royalty equal to [*] of Net Sales of each Collaboration Product in the [*].

           7.5.3Royalty Rate Adjustment. The rates set forth in Sections 7.5.1 and 7.5.2 shall be reduced by [*] (to [*]%, [*]%, and [*]%, and [*]%, respectively) with respect to Net Sales of a Collaboration Product in a particular country in which, and during such time as, a Generic Product of such Collaboration Product has been launched and is then offered for sale by a Third Party in such country.

           7.5.4Royalty Term. Royalties due under Sections 7.5.1 and 7.5.2 will commence upon the First Commercial Sale of a Collaboration Product in a particular country in the ROW Territory and will expire on a country-by-country basis upon the later of: (a) the expiration of the last-to-expire Licensed Patent containing a Valid Claim that would be infringed by the Manufacture, use, or sale of the Collaboration Product in such country by an unlicensed Third Party if such unlicensed Third Party were to Manufacture the Collaboration Product in such country of Manufacture, or use or sell the Collaboration Product in such country of sale, and (b) [*] from the First Commercial Sale of the Collaboration Product in such country.

ARTICLE 8.
PAYMENT TERMS

     8.1Payment Method. All amounts due to either Party hereunder will be paid in United States Dollars by wire transfer in immediately available funds to an account designated by such Party. Any payments or portions thereof due hereunder that are not paid by the date such payments are due under this Agreement will bear simple interest at the lower of (a) [*] the US Prime Rate, as reported in the Wall Street Journal, Eastern Edition, on the due date (or, if the due date is not a business day, on the last business day prior to such due date), or (b) the maximum rate permitted by applicable Law, calculated on the number of days such payment is delinquent; provided, that such interest shall not be due to the extent that a payment is inadvertently paid late (e.g., if such late payment is accompanied by reasonable evidence that the payor was not aware of the due date of the payment or

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reasonable explanation that such payment due date was unintentionally missed) and if the payor acts in good faith in making payment as soon as it discovers that a required payment has not been made.

     8.2Payment Schedules; Reports. The payments due pursuant to Sections 3.6.2, 7.1, 7.2, 7.3, 7.4 and 11.3.5 are due and payable on the dates described therein. Royalty payments due pursuant to Section 7.5 are due and payable within thirty-five (35) days of the end of each calendar quarter during the Term during which there were Net Sales of Collaboration Products in the ROW Territory. Shire will accompany each payment of royalties under this Agreement with a report setting forth, on a country-by-country basis, the amount of gross sales of each Collaboration Product in such country, a calculation of Net Sales, the currency conversion rate used and the United States Dollar-equivalent of such Net Sales, and a calculation of the amount of royalty payment due on such Net Sales. Such report will be considered Confidential Information of Shire subject to the obligations of Article 10 of this Agreement. The Parties acknowledge that any expenses or costs reported or shared in any way under this Agreement may be based upon estimates, which estimates will be GAAP-compliant; provided that when the actual results become known relative to any estaimated amount, any difference between the actual results and the estimate is reported and the next payment due hereunder related to such estimated item is appropriately adjusted for such difference. The Parties acknowledge and agree that any reports and payments relating to any cost, expense, or other financial amount shared pursuant to this Agreement for the fourth quarter of any calendar year shall reflect year-end reconciliations and adjustments, if any, applicable to the previous three quarters’ reported results.

     8.3Currency Conversion. For any currency conversion required in determining the amount of royalties or US Product Profits due hereunder, such conversion will be made at the exchange rate used by Shire, consistent with its general internal corporate policies as they relate to its income statement, for its own consolidation purposes for the translation of such currency into United States Dollars for any royalty or US Product Profit payments due pursuant to this Agreement. Such policies will be made available to New River upon request and will be consistent with customary industry practices.

     8.4Legal Restrictions. If at any time legal restrictions prevent the remittance by Shire of all or any part of royalties on Net Sales or US Product Profits in any country, Shire will have the right and option to make such payment by depositing the amount thereof in local currency to an account in the name of New River in a bank or other depository in such country. Shire will consult with New River regarding, and promptly notify New River of, any and all such arrangements.

      8.5Taxes.

           8.5.1Withholding Taxes. New River will be responsible for any and all income or other taxes owed by New River and required by applicable Law to be withheld or deducted from any of the royalty and other payments made by or on behalf of Shire to New River hereunder (“Withholding Taxes”), and Shire may deduct from any amounts that Shire is required to pay hereunder an amount equal to such Withholding Taxes. Shire will provide New River with reasonable advance notice of tax withholding obligations to which it reasonably believes that it is subject. New River will provide Shire any information available to New River that is necessary to determine the Withholding Taxes. Such Withholding Taxes will be paid to the proper taxing authority for New River’s account and evidence of such

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payment will be secured and sent to New River within one (1) month of such payment. The Parties will do all such lawful acts and things and sign all such lawful deeds and documents as either Party may reasonably request from the other Party to enable New River and Shire or its Affiliates or sublicensees to take advantage of any applicable legal provision or any treaty provisions with the object of paying the sums due to New River hereunder with the lowest legal amount of Withholding Taxes.

           8.5.2Additional Withholding Taxes. If, as a result of any change in the corporate status or location of Shire, or the permitted assignment of this Agreement by Shire, additional Withholding Taxes become due on payments from Shire or its permitted assignee to New River that would not have been due absent such change in corporate status or location or permitted assignment, and New River is not able to claim a credit or reimbursement for such tax, in whole or in part, then Shire will deduct Withholding Taxes in accordance with this Section 8.5, but will, in addition to the sums otherwise payable under this Agreement, pay to New River such further sum as will ensure that, after deduction of Withholding Taxes on all such sums, the net amount received by New River equals the amount that New River would have received had the non-creditable or non-reimbursable excess portion of such additional Withholding Taxes not been deducted. To the extent that any such amount paid by Shire to New River in accordance with this Section 8.5 is in fact subsequently able to be claimed by New River as a credit or reimbursement for such tax otherwise deducted, then New River will repay such amount to Shire.

      8.6Records Retention; Audit.

           8.6.1Record Retention. Each Party will maintain complete and accurate books, records and accounts used for the determination of expenses incurred in connection with the performance of Development or Commercialization activities or otherwise relevant for the calculation of Net Sales and US Product Profits, in sufficient detail to confirm the accuracy of any payments required under this Agreement, which books, records and accounts will be retained by such Party for three (3) years after the end of the period to which such books, records and accounts pertain, or longer as is required by applicable Law.

           8.6.2Audit. Each Party will have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to the other Party, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of the other Party as may be reasonably necessary to verify the accuracy of any expenses shared or paid by the other Party under this Agreement or the calculation of Net Sales or US Product Profits for any calendar year ending not more than three (3) years prior to the date of such request; provided, however, that, no Party will have the right to conduct more than one such audit in any twelve (12) month period and that the auditing Party shall not be permitted to audit the same period of time more than once, unless evidence of fraud or gross negligence arises in a subsequent audit and the auditing Party reasonably believes that such evidence indicates the reasonable possibility of fraud or gross negligence in any such prior period. The accounting firm will disclose to the Parties only whether the various expenses subject to being shared by this Agreement, Net Sales or US Product Profits reported by the audited Party are correct or incorrect and the specific details concerning any discrepancies. The auditing Party will bear all costs of such audit, unless the audit reveals a discrepancy in the auditing Party’s favor of more than [*], in which case the audited Party will bear the cost of the audit. If the audited Party disputes the findings pursuant to this Section 8.6.2, the Parties shall meet and discuss such dispute. If such dispute

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is not resolved within forty-five (45) days, then it shall be subject to Article 16. Shire shall use Diligent Efforts to obtain from any sub-licensee audit rights at least as favorable as the audit rights set forth in this Section 8.6.2 and the right to share the results of any such audit with New River. In the event that New River reasonably believes that there is a material inaccuracy in the reporting by a sub-licensee of the Net Sales of such sub-licensee, then New River may direct Shire to exercise such audit rights in accordance with procedures reasonably requested by New River. New River shall succeed to the rights and obligations of Shire in respect of any costs or expenses associated with a sub-licensee audit requested by New River.

           8.6.3Payment of Additional Amounts. If, based on the results of any audit, additional payments are owed to either Party under this Agreement, then the paying Party will make such additional payments within five (5) Business Days after the accounting firm’s written report is delivered to the Parties. The provisions of Section 8.1 shall apply to such payment.

             8.6.4Confidentiality. Each Party will treat all information subject to review under this Section 8.6 in accordance with the provisions of Article 10. Prior to conducting any audit hereunder, the Party conducting such audit will cause its accounting firm to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating such accounting firm to maintain all such financial information in confidence with standards no less stringent that the terms of this Article 10 of this Agreement.

ARTICLE 9.
LICENSES

      9.1Licenses to Shire.

           9.1.1ROW Territory. Subject to the terms of this Agreement, New River hereby grants to Shire an exclusive license, with the right to grant sublicenses as provided in Section 9.3, under the Licensed Patents, the Licensed Know-How and New River’s interest in any Joint Collaboration Patents to (a) Develop and use Collaboration Products for Commercialization in the Field in the ROW Territory and to Commercialize Collaboration Products in the Field in the ROW Territory, and (b) to make bulk and finished Collaboration Products (but not the Compound, except as otherwise provided in Article 6) for Commercialization in the Field in the ROW Territory. Notwithstanding the foregoing, New River shall retain the co-exclusive right under the Licensed Patents, Licensed Know-How and New River’s interest in any Joint Collaboration Patents in the ROW Territory for the purpose of research and Development of Collaboration Products in the Field in accordance with a Development Plan.

           9.1.2US Territory. Subject to the terms of this Agreement, New River hereby grants to Shire an exclusive (except as to New River) license, without the right to grant sublicenses (except to Affiliates of Shire), under the Licensed Patents, the Licensed Know-How and New River’s interest in any Joint Collaboration Patents (a) to Commercialize Collaboration Products in the Field in the US Territory and (b) to Develop and use Collaboration Products for Commercialization in the US Territory.

           9.2Licenses to New River. Subject to the terms of this Agreement, Shire hereby grants to New River an exclusive (except as to Shire), paid-up license, without the right to grant sublicenses (except to Affiliates of New River), under the Shire Patents and Shire

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Know-How solely to conduct Development and Commercialization of Collaboration Products in the Field for the US Territory (and to supply Shire Collaboration Products and Compound for the ROW Territory) in accordance with the terms of this Agreement.

     9.3Sublicensing. Shire may grant sublicenses under Section 9.1.1: [*] provided, however, that the Development activities undertaken by any sublicensee of such rights will be subject to the oversight and authority of the JDC. The entry by Shire into a sublicense shall not relieve Shire of its obligations under this Agreement, including the obligation to report the Net Sales of such sublicensee.

     9.4Scope of Licenses. As used in this Article 9, a license that is “exclusive except as to” the granting Party means that the Party granting the license shall not grant any other entity (other than its Affiliates) any license under such patent rights with the right to practice within the Field, but that otherwise the granting Party retains all its rights of ownership in such licensed rights, including without limitation the right to practice such patent rights, subject only to the license granted.

     9.5No Implied Licenses. Except as expressly provided in this Agreement, neither Party grants to the other Party any right or license in any intellectual property right, whether by implication, estoppel or otherwise. No implied licenses are granted under this Agreement. Each Party hereby covenants and agrees not to use or sublicense any of its rights under the licenses set forth in this Article 9 except as expressly permitted in this Agreement.

     9.6Exclusivity. During the Term, New River hereby covenants and agrees not to, itself or through or with any Affiliate or Third Party, (a) develop, market, promote, sell, or otherwise commercialize any pharmaceutical products containing or comprising [*] or other compound where an active moiety of such compound is [*], other than Collaboration Products, (b) or develop, market, promote, sell, or otherwise commercialize any pharmaceutical products containing [*] formulated for [*] for the treatment or prevention of ADHD, or (c) grant any license to a Third Party to perform any activities described in the preceding clauses (a) or (b), in each case without the express prior written approval of Shire.

     9.7Nonassertion. New River and its Affiliates hereby covenant and agree not to, alone or in cooperation with any Third Party, [*], the manufacture, use, offer for sale, sale, distribution, import or export of which is done under and in accordance with the terms of this Agreement. This covenant will run with and attach to any and all intellectual property owned or controlled, in whole or in part, by New River and shall be binding upon any assignee of any intellectual property from New River.

     9.8[*]. New River will be permitted to terminate this Agreement by written notice effective upon receipt if [*] [*] (each such [*]). Shire will include provisions in all agreements granting sublicenses of Shire’s rights hereunder providing that if the sublicensee or its Affiliates undertake a [*] with respect to [*] under which the sublicensee is sublicensed, Shire will be permitted to terminate such sublicense agreement. If a sublicensee of Shire (or an Affiliate of such sublicensee) undertakes a [*] of any such [*] under which such sublicensee is sublicensed, then Shire upon receipt of notice from New River of such [*] will terminate the applicable sublicense agreement. If Shire fails to so terminate such sublicense agreement, New River may terminate Shire’s right to sublicense in the countr(ies) covered by such sublicense agreement and any sublicenses previously granted in such countr(ies) shall automatically terminate. In connection with such sublicense termination, Shire shall

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cooperate with New River’s reasonable requests to cause such a terminated sublicensee to discontinue activities with respect to the Collaboration Product in such countr(ies).

ARTICLE 10.
CONFIDENTIALITY

      10.1Confidential Information.

           10.1.1Confidential Information. As used in this Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or generated pursuant to this Agreement by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Notwithstanding the foregoing sentence, Confidential Information shall not include any information or materials that:

                 (a)were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

                 (b)were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

                 (c)became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

                 (d)were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

                 (e)were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

           10.1.2Confidentiality Obligations. Each of New River and Shire shall keep all Confidential Information received from the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement; provided, however, that a Receiving Party shall advise any of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure (including, in the case of a Third Party, by means of a written agreement with such

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Third Party having terms at least as protective as those contained in this Article 10) that all such directors, managers, employees, independent contractors, agents or consultants comply with such obligations as if they had been a Party hereto. Upon termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party or its directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall be deemed to be the property of the Disclosing Party, and shall continue to be subject to the provisions of this Article 10. It is understood that receipt of Confidential Information under this Agreement will not limit the Receiving Party from assigning its employees to any particular job or task in any way it may choose, subject to the terms and conditions of this Agreement.

           10.1.3Permitted Disclosure and Use. Notwithstanding Section 10.1.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval of a Collaboration Product to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange or Nasdaq regulation. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 10.1.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. In addition, notwithstanding Section 10.1.2, the Parties shall prepare standardized responses to anticipated inquiries from the public or press, stockholders, investors and/or analysts with respect to the Compound, Collaboration Product or other activities hereunder that may be disclosed. Notwithstanding anything to the contrary in this Article 10, Shire shall not disclose to any Third Party Confidential Information of New River disclosing the Manufacture of Compound, without the prior written consent of New River, not to be unreasonably withheld, delayed or conditioned.

           10.1.4Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and will cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure.

     10.2Publicity; Filing of this Agreement. The Parties agree that the public announcement of the execution of this Agreement shall be substantially in the form of the press release attached as Exhibit E (the “Joint Press Release”). Any other publication, news release or other public announcement relating to this Agreement or to the performance hereunder, shall first be reviewed and approved by both Parties; provided, however, that any disclosure which is required by Law as advised by the disclosing Party’s counsel may be made without the prior consent of the other Party. To the extent practicable, the disclosing Party shall be given at least three (3) Business Days advance notice of any such legally required disclosure, and the other Party shall provide any comments on the proposed disclosure during such period. To the extent that either Party determines that it or the other Party is required to file or register this Agreement or a notification thereof to comply with the requirements of an applicable stock exchange or Nasdaq regulation or any Governmental Authority, including without limitation the U.S. Securities and Exchange Commission, the

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Competition Directorate of the Commission of the European Communities or the U.S. Federal Trade Commission, such Party shall promptly inform the other Party thereof. Prior to making any such filing, registration or notification, the Parties shall agree on the provisions of this Agreement for which the Parties shall seek confidential treatment, it being understood that if one Party determines to seek confidential treatment for a provision for which the other Party does not, then the Parties will use reasonable efforts in connection with such filing to seek the confidential treatment of any such provision. The Parties shall cooperate, each at its own expense, in such filing, registration or notification, including without limitation such confidential treatment request, and shall execute all documents reasonably required in connection therewith. In furtherance of the foregoing, the Parties will agree as promptly as practicable after the Effective Date on the confidential treatment request to be filed with the U.S. Securities and Exchange Commission and the redacted form of this Agreement related thereto. In that connection, any redaction reasonably requested by either Party shall be included in such filing. The Parties will reasonably cooperate in responding promptly to any comments received from the U.S. Securities and Exchange Commission with respect to such filing in an effort to achieve confidential treatment of such redacted form; provided, however, that a Party shall be relieved of such obligation to seek confidential treatment for a provision requested by the other Party if such treatment is not achieved after the second round of responses to comments from the U.S. Securities and Exchange Commission.

     10.3Publication. Each Party shall submit copies of each proposed academic, scientific, medical and other publication or presentation that contains or refers to the Licensed Patents, Licensed Know-How or otherwise relates to a Collaboration Product or any research or Development activities under this Agreement to the other Party at least sixty (60) days in advance of submitting such proposed publication or presentation to a publisher or other Third Party. Such other Party shall have the right to review, comment on and approve each such proposed publication or presentation for accuracy and to ascertain whether such Party’s Confidential Information is being inappropriately utilized and/or released. The non-publishing Party shall have the right to remove any of its Confidential Information prior to submission for publication or presentation. The publishing Party shall redact or otherwise modify the proposed publication or presentation to remove any such Confidential Information of the other Party. In addition, in the event that the document includes data, information or material generated by a Party’s scientists, and professional standards for authorship would be consistent with including such Party’s scientists as co-authors of the document, the names of such scientists will be included as co-authors. A Party may publicly disclose without regard to the preceding requirements of this Section 10.3 any information that was previously disclosed in a public disclosure that was in compliance with such requirements.

     10.4Use of Names. Neither Party shall use the name of the other Party in relation to this transaction in any public announcement, press release or other public document without the written consent of such other Party, which consent shall not be unreasonably withheld or delayed; provided, however, that either Party may use the name of the other Party in any document filed with any regulatory agency or authority, including the FDA and the Securities and Exchange Commission.

     10.5Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article 10.

     10.6Disclosures Under Existing NDA. The Parties agree and acknowledge that New River and Shire US, Inc. entered into that certain Existing NDA. For purposes of this

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Section 10.6, the term “Existing NDA” means that certain Non-Disclosure and Confidentiality Agreement, dated as of July 16, 2002, as amended by letter agreements on July 13, 2004, October 29, 2004, November 12, 2004, November 15, 2004, by and among the Parties and various other Affiliates and independent contractors of Shire. The Parties agree that “Confidential Information” (as such term is used in the Existing NDA) disclosed to Shire Affiliates under the Existing NDA prior to the Effective Date shall be deemed to have been disclosed under this Agreement and, from and after the Effective Date, shall be held in confidence by such Shire Affiliates in accordance with the terms of this Article 10. To the extent that Shire retains Prior Consultants to perform activities under this Agreement in connection with which such Prior Consultant is provided Confidential Information of New River, then such Prior Consultant shall be made subject to the provisions of this Article 10 with respect to disclosures of “Confidential Information,” as such term is used in the Existing NDA. The term “Prior Consultants” means those persons added as parties to the Existing NDA pursuant to those amendments to the Existing NDA made as of November 12, 2004 and November 15, 2004.

     10.7Survival. The obligations and prohibitions contained in this Article 10 shall survive the expiration or termination of this Agreement for a period of ten (10) years.

ARTICLE 11.
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

      11.1Ownership.

           11.1.1New River shall solely own, and it alone shall have the right to apply for Patents, within and outside of the United States for any New River Inventions and Shire shall solely own, and it alone shall have the right to apply for Patents, within and outside of the United States for any Shire Inventions. New River and Shire will each own an undivided one-half interest in any Joint Inventions and any Patents claiming such Joint Inventions (“Joint Collaboration Patents”), in each case without obligation to account to the other for the exploitation thereof or to seek consent of the other for the grant of any licenses thereunder, subject to the licenses and rights granted by the Parties in this Agreement. Each Party shall promptly disclose to the other Party all Inventions made by it during the Term. The determination of inventorship for Inventions shall be made in accordance with applicable Laws relating to inventorship set forth in the patent Laws of the United States (Title 35, United States Code).

           11.1.2Each Party will require all of its and its Affiliates’ employees to assign all Inventions that are the subject of patent applications claiming Inventions that are developed, made or conceived by such employees according to the ownership principles described in this Section 11.1. Each Party will require any agents or independent contractors performing an activity pursuant to this Agreement to assign all Inventions that are the subject of patent applications claiming Inventions that are developed, made or conceived by such agents or independent contractors to New River and/or Shire according to the ownership principles described in this Section 11.1 .

     11.2Disclosures; Disputes Regarding Inventions. Each Party shall, before filing a new patent application (including without limitation provisionals and continuations-in-part, but excluding continuations, divisionals, and requests for continued examinations) claiming an Invention, promptly disclose such Invention to the other Party, including Joint Inventions,

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New River Inventions and Shire Inventions and shall provide the other Party with a copy of the proposed patent application at least ten (10) Business Days before filing such application or such shorter time as may be required to preserve Patent rights, including, without limitation, the avoidance of a statutory bar. If the non-filing Party believes that the filing Party’s proposed patent application discloses Confidential Information of the non-filing Party, the non-filing Party shall so notify the filing Party within such ten (10) Business Days, and the filing Party shall amend its proposed application to comply with the confidentiality provisions of this Agreement. If the Parties are in agreement as to the designation of the Invention as Joint Invention, New River Invention or Shire Invention, they can continue as set forth in Section 11.3 below. If the Parties disagree as to whether an Invention is a Joint Invention, New River Invention or Shire Invention, and are unable to reach agreement within thirty (30) days after commencing discussions, then each Party will have the right to avail itself of any legally recognizable remedy in accordance with Article 16 of this Agreement and applicable Law.

      11.3Patent Filings.

           11.3.1New River Responsibilities. New River shall prepare, file, prosecute and maintain Patents to cover (a) New River Inventions (the “New River Collaboration Patents”), and (b) the Licensed Patents. New River shall keep Shire informed of the status of each such Patent and shall give Shire a reasonable opportunity to provide comments to any communication from any patent office. New River shall give reasonable consideration to any suggestions or recommendations of Shire concerning the preparation, filing, prosecution and maintenance thereof, including suggestions of the JIPC pursuant to the terms set forth in Sections 2.5 and 2.7.4. Promptly after the Effective Date, New River shall provide Shire with copies of the file histories of all Licensed Patents and shall update such file histories promptly upon receipt of any additional communications from any patent offices and patent counsel or agents pertaining thereto. New River shall also provide Shire with copies of any communications from any patent offices and patent counsel or agents pertaining to any New River Collaboration Patents. New River, at Shire’s request, shall [*] in any New River Collaboration Patent, Licensed Patent or a continuation or divisional of either of the foregoing, the type of application being at New River’s discretion; provided, however, New River may refuse to [*] if New River reasonably believes, in good faith, that [*]. If the [*], New River will [*] and shall give reasonable consideration to any suggestions or recommendations of Shire concerning [*]. The Parties shall cooperate reasonably in the prosecution of all Patents under this Section 11.3.1 and shall share all material information relating thereto promptly after receipt of such information. If, during the term of this Agreement, New River intends to allow any Licensed Patent to expire or intends to otherwise abandon any Licensed Patent, New River shall notify Shire of such intention at least sixty (60) days prior to the date upon which such Licensed Patent shall expire or be abandoned, and Shire shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof.

           11.3.2Shire Responsibilities. Shire shall file, prosecute and maintain Patents to cover Shire Inventions conceived pursuant to this Agreement (the “Shire Collaboration Patents”). Shire shall keep New River informed of the status of each such Patent and shall give reasonable consideration to any suggestions or recommendations of New River concerning the preparation, filing, prosecution and maintenance thereof, including the suggestions of the JIPC pursuant to the terms set forth in Sections 2.5 and 2.7.4. The Parties shall cooperate reasonably in the prosecution of all Shire Patents under this Section

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11.3.2 and shall share all material information relating thereto promptly after receipt of such information. If, during the Term, Shire intends to allow any Shire Patent to which New River has a license under this Agreement to expire or intends to otherwise abandon any Shire Patent, Shire shall notify New River of such intention at least sixty (60) days prior to the date upon which such Shire Patent shall expire or be abandoned, and New River shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof.

           11.3.3Jointly Owned Patents. The responsibility for the filing, prosecution and maintenance of Joint Collaboration Patents shall be determined by the Parties, including conducting related interference and opposition proceedings relating thereto, without prejudice to ownership, on behalf of both Parties based on a good faith determination of the relative contributions of the Parties to the Invention and the relative level of interest of the Parties in the Invention; provided, however that the Parties may also decide not to file a Joint Collaboration Patent for any such Joint Invention. At least ten (10) Business Days prior to the contemplated filing, the Party responsible for such activities for a Joint Collaboration Patent shall submit a substantially completed draft of such Joint Collaboration Patent to the other Party for its approval. Should the agreed upon Party elect not to prepare and/or file any such Joint Collaboration Patent, it shall (a) provide the other Party with written notice as soon as reasonably possible after making such election but in any event no later than twenty (20) Business Days before the other Party would be faced with a possible loss of rights, (b) give the other Party the right, at the other Party’s discretion, to prepare, file, prosecute or maintain the Joint Collaboration Patent, and (c) offer reasonable assistance in connection with such preparation, filing, prosecution or maintenance.

           11.3.4Cooperation. The Parties agree to cooperate in the preparation, filing, prosecution and maintenance of all Patents under this Section 11.3, including obtaining and executing necessary powers of attorney and assignments by the named inventors, providing relevant technical reports to the filing Party concerning the Invention disclosed in such Patent, obtaining execution of such other documents which shall be needed in the filing and prosecution of such Patent, and, as requested, updating each other regarding the status of such Patent, and shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to obtain or maintain such Patents.

            11.3.5Patent Expenses.

                 (a)In the US Territory. Patent Expenses for the US Territory shall be borne [*]. Within five (5) Business Days following the end of each calendar quarter, each Party shall deliver a report outlining its Patent Expenses for such quarter. Within thirty (30) days following the end of each such quarter, the Party incurring less than [*] of such expenses during the quarter shall reimburse the other Party an amount sufficient to [*] each Party’s share of such costs.

                 (b)In the ROW Territory. Patent Expenses for the ROW Territory shall be borne [*]; provided, however, if New River incurs any expenses for any country in which Shire has notified New River at least thirty (30) days advance notice in writing either that it does not intend to Commercialize a Collaboration Product in such country, or that it has abandoned such Commercialization, any fee or expense incurred with respect to patents in such country shall be the sole responsibility of New River and shall not

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be deemed Patent Expenses effective as of the end of such notice period. Within five (5) Business Days following the end of each calendar quarter, each Party shall deliver a report outlining its Patent Expenses for such quarter. Within thirty (30) days following the end of each such quarter, the Party incurring less than [*] of such expenses during the quarter shall reimburse the other Party an amount sufficient to [*] each Party’s share of such costs. In the event that Shire notifies New River that it does intend to Commercialize a Collaboration Product in any country in which it has previously notified of an intention not to Commercialize or abandoned Commercialization, or so Commercializes such Collaboration Product in such country, then Shire shall reimburse New River for an amount equal to [*] of the Patent Expense for the applicable country incurred from the effective date of such notification.

     11.4Third-Party Patent Rights. Except as otherwise provided in Section 12.1 below, neither Party makes any warranty with respect to the validity, perfection or dominance of any Patent or other proprietary right or with respect to the absence of rights in Third Parties which may be infringed by the Manufacture or Commercialization of any Collaboration Product. Each Party agrees to bring to the attention of the other Party any patent or patent application it discovers, or has discovered, and which relates to the subject matter of this Agreement.

      11.5Enforcement and Defense of Patents.

            11.5.1Infringement of Third Party Patents.

                 (a)Third Party Claims; Third Party Royalties. In the event of a Third Party Claim against Shire, New River or their respective Affiliates alleging that the making, using, importing, selling or offering to sell a Collaboration Product infringes or will infringe claims in any patents of a Third Party, the Party first obtaining knowledge of such Third Party Claim shall immediately provide the other Party notice of such Third Party Claim with the related facts in reasonable detail. Shire shall have the first right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of Shire’s choice if Shire or any of its Affiliates are named as a party to such Third Party claim and New River or any of its Affiliates are not. In such case, New River shall have the right to be represented by independent counsel at New River’s own expense. New River shall have the first right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of New River’s choice if New River or any of its Affiliates are named as a party to such Third Party claim and Shire or any of its Affiliates are not. In such case, Shire shall have the right to be represented by independent counsel at Shire’s own expense. If either Party refuses to accept control of the defense of a Third Party Claim for which it has the first right to control defense hereunder within [*] after receiving or giving notice thereof, then the other Party shall have the right to defend against such Third Party Claim. In such case, such refusing Party shall have the right to be represented by independent counsel at its own expense. If (1) Shire or any of its Affiliates and (2) New River or any of its Affiliates are named as parties to such Third Party Claim, then the Parties will have the joint right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of their mutual agreement. If the Parties are unable to agree on such joint defense, then the Parties will use good faith efforts to determine the Party to assume control of such defense and choice of counsel. In such case, the other Party shall have the right to be represented by independent counsel at its own expense. If, as a result of a judgment in any litigation or settlement with a Third Party, Shire or its Affiliates are required

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to pay royalties to any Third Party (“Third Party Royalty”), then, on a country-by-country basis and product-by-product basis, the royalty due to New River under this Agreement with respect to Net Sales in the ROW Territory will be [*] of the Third Party Royalty, provided that the royalty due to New River will not be reduced to less than [*] of the royalty that would be due to New River in the absence of such Third Party Royalty.

                 (b)Cooperation. If a Party shall become engaged in or participate in any suit described in this Section 11.5.1, the other Party shall cooperate, and shall cause its and its Affiliates’ employees to cooperate, with such Party in all reasonable respects in connection therewith, including giving testimony and producing documents lawfully requested, and using its reasonable and diligent efforts to make available to the other, at no cost to the other (other than reimbursement of actually incurred, reasonable out-of-pocket travel and lodging expenses), such employees who may be helpful with respect to such suit, investigation, claim, interference or other proceeding.

            11.5.2Prosecution of Infringers.

                 (a)Notice. If either Party learns that a Third Party is infringing or allegedly infringing any Patent within the Licensed Patents, the Shire Patents or the Joint Collaboration Patents or if any Third Party claims that any such Patent is invalid or unenforceable, it will promptly notify the other Party thereof including available evidence of infringement or the claim of invalidity or unenforceability. The Parties will cooperate and use reasonable efforts to stop such alleged infringement or to address such claim without litigation.

                 (b)Enforcement and Defense of Licensed Patents, Joint Collaboration Patents and Shire Collaboration Patents.

                       (i)Shire will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Shire Collaboration Patents. Shire may take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*]. Notwithstanding the foregoing, New River will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                       (ii)If, pursuant to Section 11.5.2(b)(i), Shire fails to take the appropriate steps to enforce or defend any Patent within the Shire Collaboration Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 11.5.2(a) of such infringement or claim, then New River will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice and Shire will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                       (iii)New River will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Licensed Patents. New River may, in any such instance, take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*]. Notwithstanding

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the foregoing, Shire will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                       (iv)If, pursuant to Section 11.5.2(b)(iii), New River fails to take the appropriate steps to enforce or defend any Patent within the Licensed Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 11.5.2(a) of such infringement or claim, then Shire will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice, and New River will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                       (v)In the case of Joint Collaboration Patents, the Parties will decide whether Shire or New River will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Joint Collaboration Patents. The Party so selected may, in any such instance, take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*] and the Party that is not so selected will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                       (vi)If, pursuant to Section 11.5.2(b)(v), the Party selected fails to take the appropriate steps to enforce or defend any Patent within the Joint Collaboration Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 11.5.2(a) of such infringement or claim, then the other Party will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice, and the Party so selected will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                       (vii)Notwithstanding Sections 11.5.2(b)(i) -(vi), Shire will have the sole discretion whether to [*] and the sole right to [*] which may result [*] for such Third Party. For the avoidance of doubt, New River shall not have the right to [*] which may result in [*] for such Third Party. Any such [*], as may be required by Law.

                  (c)Cooperation; Damages.

                       (i)If one Party brings any suit, action or proceeding under this Section 11.5.2, the other Party agrees to be joined as party plaintiff if necessary to prosecute the suit, action or proceeding and to give the first Party reasonable authority to file and prosecute the suit, action or proceeding; provided, however, that neither Party will be required to transfer any right, title or interest in or to any property to the other Party or any other party to confer standing on a Party hereunder.

                       (ii)The Party not pursuing the suit, action or proceeding hereunder will provide reasonable assistance to the other Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any out-of-pocket expenses incurred by the non-enforcing or defending Party in providing such assistance.

                       (iii)Neither Party will settle or otherwise compromise any such suit, action or proceeding in a way that adversely affects the other Party’s intellectual

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property rights or its rights or interests with respect to the Collaboration Product without such Party’s prior written consent.

                       (iv)Any settlements, damages or other monetary awards (the “Recovery”) recovered pursuant to a suit, action or proceeding brought pursuant to Section 11.5.2 will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) to be allocated as follows: (i) any Recovery with respect to a country in the ROW Territory will be shared [*], and (ii) any Recovery with respect to the US Territory will be [*].

     11.6Notice of Certification. New River and Shire each shall immediately give notice to the other of any certification filed under the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (or its foreign equivalent) claiming that a Licensed Patent, Joint Collaboration Patent or a Shire Collaboration Patent is invalid or that infringement of a Licensed Patent, Joint Collaboration Patent or Shire Collaboration Patent will not arise from the manufacture, use, offer for sale, sale or importation product by a Third Party (“Hatch-Waxman Certification”). Nothing in this Section 11.6 shall prevent or otherwise limit New River’s right to take any and all such actions with regard to the matters described in this Section 11.6 as required by applicable Law.

     11.7Patent Term Extensions. New River and Shire shall cooperate in good faith in gaining patent term extensions due to delay(s) in Regulatory Approval wherever applicable to the Licensed Patents, Joint Collaboration Patents and Shire Collaboration Patents. However, Shire shall have the sole discretion in determining which Licensed Patent(s), Joint Collaboration Patent(s), or Shire Collaboration Patent(s) to extend for any particular compound, composition, article, product, process, or use.

     11.8Listing of Patents. Shire shall have the right to determine which of the [*], if any, shall be submitted for inclusion in the Approved Drug Products with Therapeutic Equivalence Evaluations pursuant to 21 U.S.C. Section 355, or any successor Law in the United States, together with any comparable Laws in any other country. Shire shall notify New River at least ten (10) Business Days prior to the deadline for any such submission, and New River shall submit the designated Patents in accordance with applicable Law. In addition, New River may in its discretion, and to the extent permitted by Law, submit any additional [*] that are not designated by Shire. Nothing in this Section 11.8 shall prevent or otherwise limit New River’s right to take any and all such actions with regard to the matters described in this Section 11.8 as required by applicable Law.

      11.9Trademarks and Copyrights.

           11.9.1Product Trademarks. All Collaboration Products shall be marketed and sold worldwide under and in connection with trademarks, trade dress, logos and slogans selected in accordance with this Section 11.9.

           11.9.2Trademark Selection. Under the supervision of the JMC, the Parties shall work together and seek to agree on the selection of trademarks, trade dress, logos and slogans for a Collaboration Product for use in the US Territory. Shire shall select trademarks, trade dress, logos and slogans for a Collaboration Product for use in the ROW Territory. All uses of trademark(s), trade dress, logo(s), slogan(s), and design(s) to identify and/or in

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connection with the sale or marketing of a Collaboration Product shall be reviewed by the JMC and shall comply with all applicable Laws (including, without limitation, those Laws and regulations particularly applying to the proper use and designation of trademarks in the applicable countries). Trademark(s), trade dress, logo(s) and slogan(s) under which Collaboration Products are marketed or sold (other than either Party’s corporate trademarks or trade names, and New River’s Carrierwave™ mark used in connection with technology related to the Compound) shall be used only pursuant to the terms of this Agreement to identify and in connection with the marketing of Collaboration Products, and shall not be used by either Party to identify or in connection with the marketing of any other products. Each Party shall have a right to prior review and approval of all Promotional Materials incorporating any of its trademarks, trade dress, logos or slogans sufficient to permit such Party to maintain quality control over its trademarks, trade dress, logos and slogans. All trademarks shall be registered by the Party owning such trademark in its name as owner in all applicable countries. All trade dress, logos, slogans and designs may be registered by the Party owning such trade dress, logos or slogan, in the discretion of such Party, in its name as owner in all applicable countries.

           11.9.3Ownership of Trademarks. New River will continue to own, throughout the world, any trademarks, trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for a Collaboration Product which New River owns as of the Effective Date (the “New River Marks”). Shire will own, throughout the world, all other trademarks, trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for a Collaboration Product (the “Shire Marks”). All goodwill attributable to a New River Mark generated by the Commercialization of a Collaboration Product bearing a New River Mark shall inure to the benefit of New River. All goodwill attributable to a Shire Mark generated by the Commercialization of a Collaboration Product bearing a Shire Mark shall inure to the benefit of Shire. If the JMC determines, in accordance with Section 11.9.1, to use a New River Mark for the Commercialization of a Collaboration Product in the US Territory or Shire determines to use a New River Mark for the Commercialization of a Collaboration Product in the ROW Territory, as applicable, New River shall grant to Shire, a non-exclusive, royalty-free license, with the right to grant sublicenses in accordance with Section 9.3, to use such New River Mark in the US Territory and/or ROW Territory, as applicable, solely in conjunction with the Commercialization of the Collaboration Products. Shire shall comply with New River’s then-current guidelines for trademark usage, a copy of which shall be provided to Shire from time to time, in connection with Shire’s use of such New River Mark. New River shall solely bear all costs of prosecution of applications to register and to record licenses (if applicable) for, and maintenance of, each New River Mark for each Collaboration Product; provided, however, that with respect to the US Territory, such costs will be included in Pre-Marketing Expenses or Marketing Management, as applicable. Shire shall solely bear all costs of prosecution of applications to register and to record licenses (if applicable) for, and maintenance of, each Shire Mark for each Collaboration Product; provided, however, that with respect to the US Territory, such costs will be included in Pre-Marketing Expenses or Marketing Management, as applicable.

           11.9.4Infringement of Trademarks and Copyrights. Each Party shall take all reasonable and appropriate steps to protect, defend and maintain each trademark and copyright owned by such Party hereunder for use in connection with a Collaboration Product, and all registrations therefor. Each Party shall notify the other Party promptly upon learning of any actual, alleged or threatened infringement of a trademark, trade dress, logo, slogan,

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copyright, or of any unfair trade practices, trade dress imitation, passing off of counterfeit goods, or like offenses. Upon learning of such offenses, the Party owning such trademark or copyright shall have the obligation to, in consultation with the other Party, institute and control an appropriate action or proceeding to halt the offense, unless the Parties otherwise mutually agree. All Recoveries in connection therewith will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) to be allocated as follows: (i) any Recovery with respect to a country in the ROW Territory will be shared equally, and (ii) any Recovery with respect to the US Territory will be included in US Product Profits for the applicable calendar year. Such other Party shall have the right to participate fully in all such actions or proceedings. During the Term, in the event that the Party owning such trademark or copyright does not undertake such an infringement action then, in the case that such owning Party is New River, Shire shall be permitted to do so and all Recoveries in connection therewith will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) to be allocated as follows: (i) any Recovery with respect to a country in the ROW Territory will be shared equally, and (ii) any Recovery with respect to the US Territory will be included in US Product Profits for the applicable calendar year. For the purposes of this Section 11.9.4, the Party that brings suit to enforce a given trademark or copyright shall also have the right to control settlement of such claim; provided, however, that no settlement shall be entered into without the written consent of the other Party, not to be unreasonably withheld, conditioned or delayed.

           11.9.5Costs of Defense. All of the unrecovered costs, expenses and legal fees (including internal costs, expenses and legal fees) incurred by the Parties in bringing, maintaining and prosecuting any action to maintain, protect or defend a trademark (or registration therefor) or copyright (or registration therefor) covering or used or intended to be used in connection with the marketing or sale of a Collaboration Product in the US Territory shall be [*] all such costs associated with any such action in the ROW Territory.

           11.9.6Acknowledgment of Ownership. Each Party acknowledges the sole ownership by the other Party and validity of all trademarks, trade dress, logos and slogans owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product. Each Party agrees that it will not at any time during or after the Term assert or claim any interest in or do anything which may adversely affect the validity or enforceability of any trademark, trade dress, logo or slogan owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product. Neither Party will register, seek to register or cause to be registered any trademarks, trade dress, logos or slogans owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product or any variation thereof, under any law providing for registration of trademarks, service marks, trade names, fictitious names or similar laws, as an Internet domain name, or in the name of a corporation, partnership, limited liability company or other entity, without the other Party’s prior written consent, and neither Party will register, seek to register or cause to be registered any copyright, nor register or patent, seek to register or patent or caused to be registered or patented, of the other Party, without the other Party’s prior written consent.

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ARTICLE 12.
REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY

      12.1Representations, Warranties and Covenants.

           12.1.1Each of the Parties hereby represents and warrants to the other Party that, as of the Effective Date:

                 (a)Such Party has full corporate right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement and that it has the right to grant the licenses and sublicenses granted pursuant to this Agreement.

                 (b)This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of the Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a Party or by which it is bound, nor violate any Law of any Governmental Authority having jurisdiction over it.

                 (c)Such Party has not granted any right to any Third Party that would conflict with the rights granted to the other Party hereunder.

                 (d)Except for Regulatory Approvals, pricing and/or reimbursement approvals, manufacturing approvals and/or similar approvals necessary for the Development, Manufacture or Commercialization of the Compound and Collaboration Products, such Party has obtained all necessary consents, approvals and authorizations of all Government Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery and performance of this Agreement; provided, that, for clarity, it is agreed that a termination by a Party in accordance with Section 13.6 shall not be deemed to constitute evidence of a breach of this Section 12.1.1(d) .

             12.1.2Each Party hereby covenants to the other Party that, during the Term:

                 (a)Such Party will not grant any right to any Third Party that would conflict with the rights granted to the other Party hereunder.

                 (b)In the course of the Development of the Compound and Collaboration Products, such Party will not use any employee or consultant that is debarred by the FDA or, to such Party’s knowledge, is the subject of debarment proceedings by the FDA.

           12.1.3New River hereby represents and warrants to Shire that, as of the Effective Date:

                 (a)There is no action or proceeding pending or, to New River’s knowledge, threatened, with respect to Collaboration Products and/or the Compound, including without limitation the conduct of any clinical trials, manufacturing activities or other activities, or that questions the validity of this Agreement or any action taken by New River in connection with the execution of this Agreement. There are no material unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against New River with

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respect to Collaboration Products and/or the Compound, including without limitation the conduct of any clinical trials, manufacturing activities or other activities.

                 (b)IND #67482 and IND #70109 (i) have been filed in the name of New River and are in effect; and (ii) to New River’s knowledge, constitutes all governmental approvals, permits and licenses required by New River in connection with the performance of clinical trials concerning the Collaboration Product or the Compound, as such clinical trials are conducted by New River. Attached hereto as Schedule 12.1.3(b) is a true, correct and complete list of all INDs and Drug Approval Applications filed with a Governmental Authority relating to the Compound or a Collaboration Product.

                 (c)Intellectual Property.

                       (i)Schedule 12.1.3(c)(i)(I) sets forth a true and complete list of all Licensed Patents that [*]. Schedule 12.1.3(c)(i)(II) sets forth a true and complete list of all Patents that [*]. Such schedules contain, where relevant, all application numbers and filing dates, registration numbers and dates, jurisdiction, next action date with description for action to be taken, and notice of whether fees of any kind are yet to be paid.

                       (ii)New River has submitted all information related to the Compound, Collaboration Product and/or Licensed Patents to the United States Patent and Trademark Office required to be submitted in accordance with 37 C.F.R. 1.56, 1.97 and 1.98.

                       (iii)The Licensed Patents and Licensed Know-How constitute all intellectual property Controlled by New River that is necessary or useful to Manufacture, Develop, use or Commercialize the Compound and/or Collaboration Product for ADHD, and to the knowledge of New River there is not any other intellectual property necessary for such purposes that is not Controlled by New River.

                       (iv)Neither New River nor any of its Affiliates has received any written notice from any Third Party challenging or questioning the right of New River to use or license any of the Licensed Know-How or Licensed Patents.

                       (v)Each of New River and its Affiliates owns all right, title and interest in and to, or has a license, sublicense or otherwise permission to use and license, all of the Licensed Know-How or Licensed Patents free and clear of all encumbrances and no person other than New River (including any current or former employee or consultant of New River) has any proprietary, commercial or other interest in any of the Licensed Know-How or Licensed Patents. There are no existing agreements, options, commitments, or rights with, of or to any person to acquire or obtain any rights to, any of the Licensed Know-How or Licensed Patents.

                       (vi)The use or practice of the Licensed Know-How and Licensed Patents as it has been and is now being conducted do not, to the knowledge of New River, infringe or misappropriate the intellectual property rights of a Third Party. Neither New River nor any of its Affiliates has received any written notice from any person, or has knowledge of, any actual or threatened claim or assertion that the use or practice of the Licensed Patents or Licensed Know-How infringes or misappropriates the intellectual property rights of a Third Party.

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                       (vii)New River has the right to grant to Shire the licenses set forth in this Agreement under the Licensed Know-How or Licensed Patents, free of any rights or claims of any Third Party and without payment of any royalties, license fees or other amounts to any Third Party.

                       (viii)All Patents within the Licensed Patents are in full force and effect, valid, subsisting and, in the case of issued Patents,enforceable, and inventorship of the Licensed Patents is properly identified on such Licensed Patents. None of the Licensed Patents is currently involved in any interference, reissue, reexamination, or opposition proceeding, and neither New River nor any of its Affiliates has received any written notice from any person, or has knowledge, of such actual or threatened proceeding.

                       (ix)To New River’s knowledge, there is [*] of any of the Licensed Know-How or Licensed Patents by [*].

                       (x)There are no actions or proceedings (including any inventorship challenges) pending or, to the knowledge of New River, threatened with respect to any of the Licensed Know-How, Licensed Patents, Compound or Collaboration Products nor have any such actions or proceedings been brought or, to the knowledge of New River, threatened during the past six (6) years, in each case which have not been resolved without impairment of New River’s rights in and to any of the Licensed Know-How, Licensed Patents, Compound or Collaboration Products and without the obligation to pay any royalties or other amounts to any Third Party with respect to the use of such technology or the sale of such products.

                       (xi)Neither New River nor any of its Affiliates has entered into any contract (i) granting any Third Party the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any of the Licensed Know-How or Licensed Patents, or (ii) expressly agreeing to indemnify any Third Party against any charge of infringement of any of the Licensed Know-How or Licensed Patents.

                       (xii)Neither New River nor any of its Affiliates has entered into any contract granting any Third Party the right to control the prosecution of any of the Patents in the Licensed Patents.

                       (xiii)All current and former employees and consultants of New River and its Affiliates who are or have been substantively involved in the design, review, evaluation or development of the Licensed Know-How or Licensed Patents have executed written contracts or are otherwise obligated to protect the confidential status and value thereof and to vest in New River or its Affiliates exclusive ownership of the Licensed Know-How or Licensed Patents.

                       (xiv)New River has made available to or provided Shire with copies of all material information and, as requested in writing by Shire, with copies of all books, records and data, in each case with respect to Collaboration Products and/or the Compound.

                       (xv)All official fees, maintenance fees and annuities for the Licensed Patents have been paid through the Effective Date.

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                       (xvi)Schedule 12.1.3(c)(i)(I) and Schedule 12.1.3(c)(i)(II) set forth a true and complete list of all registration, application, maintenance, user, or renewal fees due within one hundred eighty (180) days after the Effective Date in connection with the Licensed Know-How or Licensed Patents. Any necessary registration, application, maintenance, user or renewal fees due on or prior to the Effective Date in connection with the Licensed Know-How or Licensed Patents have been paid in a timely manner. All applicable government requirements that must be met on or prior to the Effective Date in connection with the Licensed Know-How or Licensed Patents have been met in a timely manner with the relevant Governmental Authority.

                  (d)Compliance with Law.

                       (i)New River and its Affiliates and any outsourcing company and contract research organization to which New River or its Affiliates have subcontracted activities in connection with Compound and Collaboration Products (the “Contractors”) have complied with all applicable Laws, permits, governmental licenses, registrations, approvals, concessions, franchises, authorizations, orders, injunctions and decrees, including the Act, in the research, Development, Manufacture and use of the Collaboration Product for ADHD and Compound, and neither New River nor any of its Affiliates or, to the knowledge of New River, its Contractors, has received any written notice from any Governmental Authority claiming that any such activities as conducted by them are not in such compliance.

                       (ii)Since January 1, 2002, no Governmental Authority has served notice on New River or any of its Affiliates that the Licensed Know-How or Licensed Patents were or are in violation of any Law or the subject of any investigation.

                       (iii)Since January 1, 2002, none of New River or any of its Affiliates have received written notice from any Governmental Authority that there are any circumstances currently existing that might reasonably be expected to lead to any loss or refusal to renew any material governmental licenses, permits, registrations, concessions, franchises and authorizations relating to the Collaboration Product for ADHD, Compound or any of the Licensed Know-How or Licensed Patents.

                       (iv)New River and its Affiliates have complied in all material respects with all applicable Laws in connection with the preparation and submission to the FDA of IND #67482 and #70109, and such INDs are in effect and good standing. IND #67482 and #70109 are the only INDs that New River or any of its Affiliates has filed with any Governmental Authority with respect to the Compound or a Collaboration Product. New River and its Affiliates have filed with the applicable regulatory authority all required notices, supplemental applications and annual or other reports, including adverse experience reports, with respect to such IND. No Drug Approval Application has been filed with any Governmental Authority with respect to the Compound or a Collaboration Product.

                       (v)No Governmental Authority (including the FDA) has commenced or, to New River’s knowledge, threatened to initiate any action to reject or withdraw IND #67482 or #70109, or commenced or, to New River’s knowledge, threatened to initiate any action to enjoin production of the Compound or Collaboration Product at any facility, nor has New River or any of its Affiliates or, to the knowledge of New River, any of its Contractors, received any notice to such effect since January 1, 2002.

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                       (vi)All manufacturing operations conducted by New River and its Affiliates and Contractors since January 1, 2002 relating to the manufacturing of the Collaboration Product for ADHD and/or Compound have been conducted in compliance with all Laws, including without limitation all cGMPs.

                       (vii)All Development activities conducted by New River and its Affiliates and Contractors since January 1, 2002 relating to the Collaboration Product for ADHD and/or Compound have been conducted in compliance with all Laws, including without limitation all cGCPs and cGLPs.

                       (viii)New River has delivered or otherwise made available to Shire copies of all substantive or material (A) reports of FDA Form 483 inspection observations, (B) establishment inspection reports, (C) warning letters, and (D) other documents that assert ongoing lack of compliance in any material respect with any applicable laws (including those of the FDA), in each case to the extent received by New River or any of its Affiliates or, to the knowledge of New River, any of its Contractors from the FDA relating to a Collaboration Product and/or Compound. Neither New River nor any of its Affiliates has received any such reports, letters or other documents from any other Governmental Authority relating to a Collaboration Product and/or Compound.

                       (ix)To New River’s knowledge, no employee or agent of New River or any of its Affiliates or Contractors has made an untrue statement of a material fact to any Governmental Authority with respect to the Collaboration Product for ADHD and/or Compound (whether in any submission to such Governmental Authority or otherwise), or failed to disclose a material fact required to be disclosed to any Governmental Authority with respect to the Collaboration Product and/or Compound.

                       (x)In the course of the Development of the Compound and Collaboration Products, New River has not used any employee or consultant that is debarred by the FDA or, to New River’s knowledge, is the subject of debarment proceedings by the FDA.

                       (xi)Representatives of New River and its Affiliates have disclosed to Shire any facts reasonably believed in good faith to be material regarding: (A) preclinical and clinical study results and protocols for the Collaboration Product for ADHD and/or Compound; (B) any communications to or from any Governmental Authority with respect to the Collaboration Product for ADHD and/or Compound, including IND submissions, any Governmental Authority minutes of meetings and telephone conferences; (C) any Governmental Authority requests for data and studies on the Collaboration Product for ADHD and/or Compound; and (D) adverse drug experiences and other IND safety reports with respect to the Collaboration Product for ADHD and/or Compound.

                       (xii)New River and its Affiliates do not have any knowledge of any preliminary or other results from any clinical trials relating to the lack of efficacy of the Compound or Collaboration Product in human beings.

For purposes of the foregoing sections, “New River” and “its Affiliates” shall in all cases include [*].

     12.2Limitation on Representations or Warranties. Notwithstanding anything to the contrary herein, neither Party will be in breach of any representation or warranty made

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pursuant to this Section 12 to the extent that the Party alleged to have so breached can demonstrate that the Party alleging such breach had, on or prior to the Effective Date, actual knowledge of such breach of such representation or warranty.

     12.3Performance by Affiliates. The Parties recognize that each may perform some or all of its obligations under this Agreement through Affiliates; provided, however, that each Party shall remain responsible for and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against an Affiliate or subcontractor, for any obligation or performance hereunder prior to proceeding directly against such Party. Wherever in this Agreement the Parties delegate responsibility to Affiliates or local operating entities, the Parties agree that such entities may not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way.

     12.4Disclaimer of Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION 12.1 OF THIS AGREEMENT, NEW RIVER AND SHIRE MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND NEW RIVER AND SHIRE EACH SPECIFICALLY DISCLAIMS ANY OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

     12.5Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR LOST PROFITS OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION AND ARISING IN ANY WAY OUT OF THIS AGREEMENT. THE FOREGOING LIMITATIONS WILL NOT LIMIT EITHER PARTY’S OBLIGATIONS TO THE OTHER PARTY UNDER ARTICLE 10 AND ARTICLE 15.

     12.6Essential Basis. The Parties acknowledge and agree that the disclaimers, exclusions and limitations of liability set forth in this Article 12 form an essential basis of this Agreement, and that, absent any of such disclaimers, exclusions or limitations of liability, the terms of this Agreement, including, without limitation, the economic terms, would be substantially different.

ARTICLE 13.
TERM AND TERMINATION

     13.1Term. This Agreement shall commence as of the Effective Date and, unless sooner terminated as provided herein, shall continue in effect until the date on which the Parties are no longer Developing or Commercializing any Collaboration Product in any country (the “Term”).

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      13.2Breaches (General).

           13.2.1If either Party (the “Breaching Party”) shall have committed a breach of this Agreement, the other Party (the “Notifying Party”) shall provide written notice of such breach to the Breaching Party. For all allegations of breach other than an allegation of Material Breach (as defined below), the Parties hereby agree that they shall seek to resolve the matter during the notice and cure period provided in Section 13.2.2 and may thereafter commence litigation pursuant to Article 16.

           13.2.2Upon receipt of a notice of breach other than a Material Breach, the alleged Breaching Party shall have [*] within which to cure such breach following receipt of such notice ([*] in the event of non-payment unless such payment obligation is being disputed in good faith). If the matter is not resolved to the satisfaction of the Notifying Party during such cure period, then either Party may invoke the provisions of Article 16 with respect to claims for damages and other requests for equitable relief, but neither Party shall have any right to terminate this Agreement for such breach.

           13.2.3The Parties may resort to the dispute resolution mechanisms of Article 16, and may seek all remedies in law or equity other than termination of this Agreement, without invoking the mechanisms of Section 13.3.

      13.3Allegations of Material Breach.

           13.3.1The Parties intend that this Agreement shall survive breach, and shall not be terminable in the event of breach, unless the breach is of [*] under this Agreement [*] to such an extent that [*] for the [*] taken as a whole [*] (“Material Breach”). In the event there is a dispute as to whether a Material Breach has occurred, this Agreement shall survive pending a determination pursuant to Article 16 that a Material Breach has occurred. This Section 13.3 shall apply to any allegation of Material Breach, with consequences as set forth herein.

           13.3.2If a Party believes that a Material Breach has occurred, it shall give written notice to the Breaching Party of the nature of the breach and the reason the Notifying Party believes it is a Material Breach. The alleged Breaching Party shall then have a period of [*] following receipt of such notice ([*] in the event of non-payment unless such payment obligation is being disputed in good faith) in which to cure the breach; provided, however, that if the Material Breach is other than the payment of money and is capable of being cured but cannot be reasonably cured in such [*] period, then the right to terminate this Agreement shall not arise if the allegedly Breaching Party has (i) during such period of time submitted a plan that, if successfully carried out, would be effective in curing such Material Breach, and has commenced its execution of such plan, and (ii) diligently pursues such plan thereafter for a period of up to an additional [*]. Any such notice of alleged Material Breach by the Notifying Party shall include a reasonably detailed description of all relevant facts and circumstances demonstrating, supporting and/or relating to each such alleged Material Breach by the Breaching Party.

           13.3.3If the alleged Material Breach is not cured within the cure period specified in Section 13.3.2, the Notifying Party may give notice of termination (“Notice of Termination For Material Breach”). If the Breaching Party agrees that a Material Breach has occurred, then the Parties shall proceed to terminate this Agreement in accordance with

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Section 13.3.5 and Article 14. If the Breaching Party does not agree that a Material Breach has occurred, then this Agreement shall survive, and the Parties shall continue to perform their obligations hereunder, until the issue of whether there has been a Material Breach by the Breaching Party is resolved in accordance with Article 16.

           13.3.4If the Notifying Party gives Notice of Termination For Material Breach, and it is later determined by a court pursuant to Article 16 that in fact there has not been a Material Breach by the Breaching Party, then this Agreement shall continue in full force and effect.

           13.3.5If the Notifying Party gives Notice of Termination For Material Breach and the Agreement terminates, either because such notice is accepted by the Breaching Party or it is determined by a court pursuant to Article 16 that there has been a Material Breach by the Breaching Party, then the Notifying Party shall, within [*] after such determination, deliver written notice (the “Purchase Notice”) to the Breaching Party of the purchase by the Notifying Party of the Purchase Interest (as such term is defined below).

                 (a)The price (the “Purchase Price”) to be paid to purchase the entire interests, rights and obligations of the Breaching Party under this Agreement (the “Purchase Interest”) shall be [*], it being understood and agreed that [*] shall be applied [*] and that all intellectual property rights and other assets licensed or otherwise made available by the Parties and their respective Affiliates under this Agreement shall be [*].

                 (b)Each Party shall, within [*] after the delivery of the Purchase Notice, retain an internationally recognized investment banking firm to determine the Purchase Price. Each such investment banking firm shall set forth such determination in a written report and, on a mutually agreeable date no later than [*] after the delivery of the Purchase Notice, submit such report to the other Party.

                 (c)The Purchase Price shall be the amount equal to [*]. However, if [*] a third internationally recognized investment banking firm (which is independent of both Parties) shall determine such fair market value by [*]. Such third investment banking firm shall be selected by the first two investment banking firms; provided, however, that, if the two investment banking firms are unable to select a third investment banking firm within twenty (20) days following determination that [*], then each of the two initial investment banking firms shall within twenty (20) days thereafter submit the names of three internationally recognized investment banking firms (which are independent of both Parties) willing to act as the third investment banking firm hereunder, one of which firms shall be selected by lot by the Parties. The cost of such third investment banking firm shall be borne [*].

                 (d)The purchase and sale of a Purchase Interest pursuant to this Section 13.3 shall be transferred free and clear of all liens and other encumbrances and shall be consummated at closing at the principal offices of the Notifying Party, on a Business Day within forty-five (45) days following the final determination of the Purchase Price, and upon at least ten (10) Business Days’ prior notice by the Notifying Party, provided that such period shall be extended for such period of time as shall be necessary in order to obtain requisite governmental or regulatory approvals. At such closing, the Notifying Party shall pay the Breaching Party the Purchase Price by wire transfer of immediately available funds. The Parties shall execute and deliver appropriate documentation, in form and substance that is

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reasonably acceptable, to effect the transfer of the Purchased Interest and each Party further agrees to reasonably cooperate to effect the orderly transition of any activities then being conducted by the Breaching Party and its Affiliates pursuant to this Agreement.

                 (e)The rights of the Parties set forth in this Section 13.3 are not exclusive and are in addition to any other rights or remedies available to such Party under this Agreement, at law or in equity.

      13.4Other Termination by Shire.

           13.4.1Shire may terminate this Agreement at will at any time prior to the first Regulatory Approval of a Collaboration Product in the US Territory, effective upon [*] advance written notice to New River. At any time after the date of first Regulatory Approval of a Collaboration Product in the US Territory, Shire may terminate this Agreement effective upon [*] advance written notice to New River. Termination by Shire pursuant to this Section 13.4.1 may be on the basis of the US Territory and/or the countries of the European Union and/or the ROW Territory (other than the countries of the European Union). In the event of termination under this Section 13.4.1 no payment shall be due on account of such termination.

           13.4.2In addition to Shire’s termination right pursuant to Section 13.4.1, within [*] following receipt of the first Regulatory Approval of the first Collaboration Product for ADHD in the US Territory, Shire may terminate this Agreement at will. If Shire exercises its right to terminate pursuant to this Section 13.4.2, such termination shall be effective [*] following written notice to New River, which shall be provided to New River within the period described in the preceding sentence. In the event of such termination:

                 (a)if such Regulatory Approval provides for a [*], then New River shall make a one-time termination payment to Shire in the amount of $[*]; provided, that such payment shall be made by a combination, as then agreed upon by the Parties, of the following: [*];

                 (b)if such Regulatory Approval provides for a [*] of such Collaboration Product as either [*], no payment shall be due.

     13.5Other Termination By New River. New River may terminate this Agreement on the basis of (i) the US Territory, (ii) the countries of the European Union and/or (iii) the ROW Territory (other than the countries of the European Union), in each case by [*] advance written notice to Shire [*], other than the following products: (i) any Collaboration Product, (ii) any product marketed by or on behalf of Shire as of the Effective Date, as set forth on Exhibit G, and any additional dosage strengths or line extensions thereof, and (iii) those products identified by Shire’s internal nomenclature as [*], each as described on Exhibit G, it being understood that each such product [*]. For avoidance of doubt, New River shall have no right to terminate this Agreement pursuant to this Section 13.5 if Shire files for Regulatory Approval for, or Commercializes, that product identified by Shire’s internal nomenclature as [*] or any [*] as such products do not contain a [*] formulated for [*] for the treatment or prevention of ADHD and are therefore outside the scope of this Section 13.5.

      13.6Termination for Government Action.

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                 13.6.1During the period from the Effective Date and expiring on [*], either Party may terminate this Agreement upon written notice to the other Party at any time, if during such time there is a decree, judgment, injunction, order, or action that restricts, prevents or prohibits the transactions contemplated by this Agreement under applicable Law in the United States or the European Union; provided that no such termination shall occur for a period of [*] following the entry of such decree, judgment, injunction, order or action (which period shall be reduced to [*] if [*] in the US Territory for a Collaboration Product for an ADHD indication occurs after [*]), during which period of time the Parties shall cooperate and use reasonable commercial efforts to respond to any government requests for information, and to contest and resist any such decree, judgment, injunction, order or action and to have vacated, lifted, reversed, stayed or overturned any such decree, judgment, injunction, order or action.

                 13.6.2If such termination is effective prior to the accomplishment of the event described in Section 7.2(a), New River shall reimburse Shire [*] of the amount paid by Shire pursuant to Section 7.1. Such payment shall be made within one hundred twenty (120) days following termination; provided, that interest shall accrue beginning on the thirty-first day after termination at the rate provided for in Section 8.1.

                 13.6.3If such termination is effective after the accomplishment of the event described in Section 7.2(a), New River shall reimburse Shire (A) [*] of the amount paid by Shire pursuant to Section 7.1, and (B) [*] of all other amounts paid by Shire pursuant to Section 7.2. Such payment shall be made within one hundred twenty (120) days following termination; provided, that interest shall accrue beginning on the thirty-first day after termination at the rate provided for in Section 8.1

ARTICLE 14.
EFFECTS OF TERMINATION

     14.1Post-Termination Activities by Shire. Without limiting any other legal or equitable remedies that New River may have, if this Agreement is terminated in accordance with Sections 9.8, 13.4, 13.5 or 13.6, or if this Agreement is terminated in accordance with Section 13.3 and Shire is the Breaching Party, then the following provisions shall apply:

           14.1.1Assignments. Shire will promptly (and in each case within sixty (60) days of receipt of New River’s request) and at no cost to New River:

                 (a)upon New River’s request, assign to New River all of Shire’s right, title and interest in and to any agreements between Shire and Third Parties that are freely assignable by Shire and that relate solely to the Development or Manufacture of any Compound or Collaboration Product in any territory for which such termination is effective;

                 (b)assign to New River all of Shire’s right, title and interest in and to any Shire Marks (including any goodwill associated therewith), any registrations and design patents for any of the foregoing and any Internet domain name registrations for such trademarks and slogans, all to the extent solely related to a Collaboration Product in any territory for which such termination is effective;

                 (c)assign to New River, to the extent freely assignable by Shire, the management and continued performance of any clinical trials for the Collaboration

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Products ongoing as of the effective date of such termination in any territory for which such termination is effective;

                 (d)transfer to New River all of Shire’s right, title and interest in and to any and all regulatory filings and Regulatory Approvals Controlled by Shire for the Collaboration Products in any territory for which such termination is effective, and grant New River the right to reference any regulatory filings and Regulatory Approvals Controlled by Shire for the Collaboration Products elsewhere in the world for the purpose of Developing and Commercializing Collaboration Products in the territory for which such termination is effective;

                 (e)to the extent that any agreement or other asset described in this Section 14.1.1 is not assignable by Shire or does not relate solely to Compound or a Collaboration Product, then such agreement or other asset will not be assigned, and upon the request of New River, Shire will take such steps as may be necessary to allow New River to obtain and to enjoy the benefits of such agreement or other asset in the form of a license or other right to the extent Shire has the right and ability to do so; and

                 (f)provide copies of any other books, records, documents and instruments to the extent related to Compound or Collaboration Product.

            14.1.2Manufacturing Activities. Shire will:

                 (a)upon New River’s request, if Shire is then Manufacturing a Collaboration Product, supply New River with clinical and commercial quantities of such Collaboration Product for the shorter of (i) the period until New River or its designee has established and validated a manufacturing process for such Collaboration Product and is approved to Manufacture clinical trial and commercial supplies of such Collaboration Product or (ii) eighteen (18) months from the effective date of such termination; provided, however, that New River will [*] (as determined pursuant to Exhibit A hereof) with respect to such Collaboration Product; and

                 (b)if Shire is then Manufacturing a Collaboration Product, transfer the completed manufacturing process (together with any unique mold or tooling used solely in connection therewith) for such Collaboration Product to New River or its designee upon New River’s request and at [*] cost and expense, and shall cooperate with New River to effect the transition of such Manufacturing responsibilities.

           14.1.3License Grant. Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, an exclusive, royalty-free right and license, with the right to sublicense and authorize the grant of further sublicenses, under any Shire Collaboration Patents and Shire’s rights and interest in the Joint Collaboration Patents to make, have made, use, sell, offer for sale, and import Compound or Collaboration Products affected by such termination in the Field and in the territory for which such termination is effective; provided, however, that New River will be responsible for any payments associated with the grant of any license pursuant to the preceding sentence (including, without limitation, any royalty or other payment obligations to an upstream licensor of any such Patents). In addition, if any Shire Know-How or technology claimed in a Shire Background Patent is then used in connection with the Manufacture, Development or Commercialization of Compound or a Collaboration Product in the applicable territory, Shire agrees to grant and

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hereby grants to New River, effective upon such termination of this Agreement, a non-exclusive, royalty-free right and license, with the right to grant sublicenses, under such Shire Background Patents and Shire Know-How, to make, have made, use, sell, offer for sale, and import Collaboration Products in the Field and in the territory for which such termination is effective. Finally, Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, a non-exclusive, royalty-free right and license, with the right to grant sublicenses, under any copyright or Shire Confidential Information embodied in or relating to any Marketing Plan, package inserts, or other Promotional Materials relating solely to Collaboration Products in the applicable territory.

           14.1.4Disclosure and Delivery. Shire will transfer to New River any Shire Collaboration Know-How and Shire Background Know-How, to the extent then used in connection with the Manufacture, Commercialization or Development of the Collaboration Products; such transfer shall be effected by the delivery of documents, to the extent such Know-How is embodied in documents, and to the extent that such Know-How is not fully embodied in documents, Shire shall make its employees and agents who have knowledge of such Know-How in addition to that embodied in documents available to New River for interviews, demonstrations and training to effect such transfer in manner sufficient to enable New River to practice such Know-How as theretofore practiced by Shire.

           14.1.5Sublicensees. Each of Shire’s sublicensees with respect to any affected Collaboration Products in any affected country at such time will continue to have the rights and license set forth in their sublicense agreements, subject to the continued performance of the obligations thereunder; provided, however, that such sublicensee agrees in writing that New River is entitled to enforce all relevant terms and conditions of such sublicense agreement directly against such sublicensee; and provided, further, that such sublicensee is not then in breach of its sublicense agreement.

           14.1.6Disposition of Inventory. New River shall have the option, exercisable within thirty (30) days following the effective date of such termination, to purchase any inventory of Collaboration Products affected by such termination at Shire’s Cost of Goods therefor. New River may exercise such option by written notice to Shire during such thirty (30)-day period. Upon such exercise, the Parties will establish mutually agreeable payment and delivery terms for the sale of such inventory. If New River does not exercise such option during such thirty (30)-day period, or if New River provides Shire with written notice of its intention not to exercise such option, then Shire and its Affiliates and sublicensees will be entitled, during the period ending on the last day of the sixth (6th) full month following the effective date of such termination, to sell any inventory of Collaboration Products affected by such termination that remain on hand as of the effective date of the termination, so long as Shire pays to New River the then-applicable portion of the US Product Profit, with respect to sales in the US Territory, or the royalties applicable to said subsequent sales, with respect to sales in the ROW Territory, in accordance with the terms and conditions set forth in this Agreement.

     14.2Post-Termination Activities by New River. Without limiting any other legal or equitable remedies that Shire may have, if this Agreement is terminated in accordance with Section 13.3 and New River is the Breaching Party, then the following provisions shall apply:

           14.2.1Assignments. New River will promptly (and in each case within sixty (60) days of receipt of Shire’s request) and at no cost to Shire:

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                 (a)upon Shire’s request, assign to Shire all of New River’s right, title and interest in and to any agreements between New River and Third Parties that are freely assignable by New River and that relate solely to the Development or Manufacture of any Compound or Collaboration Products;

                 (b)assign to Shire all of New River’s right, title and interest in and to any New River Marks (including any goodwill therewith), including any registrations and design patents for the foregoing and any Internet domain name registrations for such trademarks and slogans, all to the extent solely related to a Collaboration Product;

                 (c)assign to Shire, to the extent freely assignable by New River, the management and continued performance of any clinical trials for Collaboration Products ongoing as of the effective date of such termination;

                 (d)transfer to Shire all of New River’s right, title and interest in and to any and all regulatory filings and Regulatory Approvals Controlled by New River for Collaboration Products;

                 (e)to the extent that any agreement or other asset described in this Section 14.2.1 is not assignable by New River or does not relate solely to Compound or a Collaboration Product, then such agreement or other asset will not be assigned, and upon the request of Shire, New River will take such steps as may be necessary to allow Shire to obtain and to enjoy the benefits of such agreement or other asset in the form of a license or other right to the extent New River has the right and ability to do so; and

                 (f)provide copies of any other books, records, documents and instruments to the extent related to Compound or Collaboration Product.

            14.2.2Manufacturing Activities. New River will:

                 (a)upon Shire’s request, if New River is then Manufacturing Compound or Collaboration Product, supply Shire with clinical and commercial quantities of such Compound or Collaboration Product for the shorter of (i) the period until Shire or its designee has established and validated a manufacturing process for such Compound or Collaboration Product and is approved to Manufacture clinical trial and commercial supplies of such Compound or Collaboration Product or (ii) eighteen (18) months from the effective date of such termination; provided, however, that Shire will [*] (as determined pursuant to Exhibit A hereof) for such Compound or Collaboration Product; and

                 (b)if New River is then Manufacturing Compound or Collaboration Product, transfer the completed manufacturing process (together with any unique mold or tooling used solely in connection therewith) for such Compound or Collaboration Product to Shire or its designee upon Shire’s request and at [*] cost and expense, and cooperate with Shire to effect the transition of such Manufacturing responsibilities.

           14.2.3License Grant. Each license granted by New River to Shire pursuant to Section 9.1.1 and 9.1.2 shall, effective upon such termination of this Agreement, become an exclusive, perpetual, non-terminable, royalty-free right and license, with the right to sublicense and authorize the grant of further sublicenses, and shall include the right to Manufacture Compound.

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           14.2.4Disclosure and Delivery. New River shall transfer to Shire any Licensed Know-How, to the extent then used in connection with the Manufacture, Commercialization or Development of the Collaboration Products; such transfer shall be effected by the delivery of documents, to the extent such Know-How is embodied in documents, and to the extent that such Know-How is not fully embodied in documents, New River shall make its employees and agents who have knowledge of such Know-How in addition to that embodied in documents available to Shire for interviews, demonstrations and training to effect such transfer in manner sufficient to enable Shire to practice such KnowHow as theretofore practiced by New River.

           14.2.5Sublicensees. Each of New River’s sublicensees with respect to any affected Collaboration Products at such time will continue to have the rights and license set forth in their sublicense agreements, subject to the continued performance of the obligations thereunder; provided, however, that such sublicensee agrees in writing that Shire is entitled to enforce all relevant terms and conditions of such sublicense agreement directly against such sublicensee; and provided, further, that such sublicensee is not then in breach of its sublicense agreement.

           14.2.6Disposition of Inventory. Shire shall have the option, exercisable within thirty (30) days following the effective date of such termination, to purchase any inventory of Compound or Collaboration Products at New River’s Cost of Goods therefor. Shire may exercise such option by written notice to New River during such thirty (30) day period. Upon such exercise, the Parties will establish mutually agreeable payment and delivery terms for the sale of such inventory.

     14.3Accrued Rights. Termination of this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to the effective date of such termination. Such termination will not relieve a Party from obligations that are expressly indicated to survive the termination of this Agreement.

     14.4Confidential Information. Any Confidential Information assigned pursuant to this Article 14 by the non-terminating Party shall thereafter be considered Confidential Information of the terminating Party and may be used by the terminating Party without regard to the restrictions otherwise imposed by Article 10.

     14.5Survival. The following Articles and Sections, together with any definitions used or exhibits referenced therein, will survive any termination or expiration of this Agreement:Sections 3.8 (to the extent required by Law), 4.9.3, 4.9.4, 4.10.8, 4.10.9, 8.6, 11.1, 11.9.3, 11.9.6, 12.4, 12.5, 12.6, 13.3.5, 16.2, and 16.4, and Articles 10, 14, 15 (as to activities arising prior to the termination), and 17.

     14.6Liability Following Termination. In the event that either Party has worldwide rights to a Collaboration Product following termination of this Agreement, such Party shall be solely responsible for all liabilities associated with such Collaboration Product arising after the effectiveness of such termination.

ARTICLE 15.
INDEMNIFICATION; INSURANCE

      15.1Indemnification.

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           15.1.1Indemnification by Shire. Shire hereby agrees to save, defend and hold New River, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a Third Party (each a “Third Party Claim”) resulting directly from [*] by [*] of any [*] pursuant to this Agreement, [*] the [*] by [*] or their [*] in [*] under this Agreement, [*] of Collaboration Products [*], except for [*] as [*] under [*], or [*] in connection with [*] hereunder; in each case except to the extent that such Losses result from the negligence or willful misconduct of New River.

           15.1.2Indemnification by New River. New River hereby agrees to save, defend and hold Shire, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting directly from [*] by [*] of any [*] the [*] by [*] or their [*] in [*] under this Agreement, [*] or [*] of [*] [*], or[*] in connection with the [*] hereunder; in each case except to the extent that such Losses result from the negligence or willful misconduct of Shire.

           15.1.3The rights of indemnification under this Section 15.1 shall be subject to the provisions of Sections 15.2 through 15.8 and Section 4.10.9.

     15.2Notice of Claim. All indemnification claims in respect of any indemnitee seeking indemnity under Section 15.1 (collectively, the “Indemnitees” and each an “Indemnitee”) will be made solely by the corresponding Party (the “IndemnifiedParty”). The Indemnified Party will give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to base a request for indemnification under Section 15.1, but in no event will the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such Third Party Claim. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party will furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defense of such Third Party Claim.

     15.3Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification as provided for in Sections 15.1.1 and 15.1.2 by giving written notice to the Indemnified Party within [*] after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim.

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     15.4Right to Participate in Defense. Without limiting Section 15.3, any Indemnitee will be entitled to participate in, but not control, the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment will be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 15.3 (in which case the Indemnified Party will control the defense).

     15.5Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any manner, and as to which the Indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, will deem appropriate (provided, however that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and will transfer to the Indemnified Party all amounts which said Indemnified Party will be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 15.3, the Indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent will be at the Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with Section 15.3 will not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee will admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 15.3.

     15.6Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will, and will cause each other Indemnitee to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation will include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.

     15.7Expenses of the Indemnified Party. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim will be

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reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

      15.8Product Claims.

           15.8.1New River shall be solely responsible for all Losses from Third Party Claims resulting directly from either (i) the use of administration of the Compound by New River prior to the Effective Date or (ii) the conduct of clinical testing of the Compound by New River (including such clinical tests that commenced prior to and continuing after the Effective Date).

           15.8.2Notwithstanding Section 15.1.1 and 15.1.2, but subject to Section 15.8.1, [*] shall be responsible for Losses [*] from [*] from the [*] of [*] (including, without limitation, [*] to any [*] or any [*] other than [*]), and [*] from [*] of the [*] any [*] to the [*]; in each case to the extent such claim arises, directly or indirectly, out of activities related to the US Territory (each, a “Product Claim”). All Product Claims shall be [*].

           15.8.3Each Party shall give the other prompt written notice of any Product Claim (actual or potential), but the omission of such notice shall not relieve either Party from its obligations under this Section 15.8, except to the extent the other Party can establish actual prejudice and direct damages as a result thereof. [*] shall assume the lead role in the defense of such Product Claim; provided, however, that all costs and expenses of such defense shall be [*]. [*] shall consult with [*] on all material aspects of, and shall obtain the prior written consent of [*] (such consent not to be unreasonably withheld, refused, conditioned or delayed) in respect of any material decisions to be taken with regard to, the defense, including without limitation settlement of such Product Claim, and [*] shall have a full opportunity to participate in decision-making process with respect to the strategy of such defense, and the Parties shall cooperate fully with each other in connection therewith. [*] shall also have the right to participate in the defense of any Product Claim utilizing attorneys of its choice, at its own expense. In furtherance of the Parties’ cooperation, [*] will consult with [*] regarding strategic decisions, including without limitation the retention of counsel and defense of each Product Claim. [*] will otherwise keep [*]ully informed of the status and progress of the defense and any settlement discussions concerning the Product Claim.

     15.9Insurance. Each Party will obtain and keep in force, through self insurance or otherwise, in a form reasonably acceptable to the other Party hereto, insurance in scope and amount as required by law applicable to a Party’s activities hereunder and such additional amounts as may be reasonably necessary to cover such Party’s indemnity obligations under this Agreement with scope and coverage as is normal and customary in the biotechnology/pharmaceutical industry generally for parties similarly situated. It is understood that such insurance will not be construed to limit a Party’s liability with respect to its indemnification obligations under this Article 15. Each Party will, except to the extent self insured, provide to the other Party upon request a certificate evidencing the insurance such Party is required to obtain and keep in force under this Article 15. Such certificate will provide that such insurance will not expire or be cancelled or modified without at least thirty (30) days’ prior notice to the other Party.

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     15.10Guaranty. In consideration of the rights granted to Shire under this Agreement, and to induce New River to enter into this Agreement, Shire Pharmaceuticals Group PLC hereby unconditionally guarantees in favor of New River the full payment and performance by Shire of all obligations of Shire under this Agreement, in accordance with the terms and conditions of this Agreement, including any applicable notice or cure periods. This guaranty shall be enforceable after the failure by Shire to perform any obligation it may have under this Agreement in accordance with its terms, and shall be effective regardless of the solvency or insolvency of Shire at any time, the extension or modification of the obligations of this Agreement by operation of law, or the subsequent reorganization, merger, consolidation or other restructuring of Shire. Shire Pharmaceuticals Group PLC hereby expressly waives any requirement that New River exhaust any right, power or remedy under Article 16, or proceed against any other Shire entity under Article 16, for any obligation or performance hereunder prior to proceeding directly against Shire Pharmaceuticals Group PLC under this Section 15.10.

ARTICLE 16.
DISPUTE RESOLUTION

     16.1Disputes. For all matters other than those delegated to the JDC, JMC or JSC under this Agreement, the Parties hereby agree that the dispute shall be referred to a senior executive of New River and a senior executive of Shire (the “Representatives”). If any such matter has not been resolved within [*] of such referral to the Representatives either Party may invoke the provisions of Section 16.2 for such dispute. No dispute resolution procedure set forth in this Agreement shall be construed as an agreement to arbitrate under any federal or state arbitration law, including but not limited to the Federal Arbitration Act, and shall not deprive a court of competent jurisdiction from resolving any dispute arising under, or related to, this Agreement. In the event of any dispute between the Parties arising in connection with Article 11 of this Agreement, the Parties agree that the dispute resolution described under this Article 16 will be conducted with sufficient dispatch to prevent loss of patent rights in the disputed subject matter.

     16.2Litigation. Any dispute that is not resolved as provided in the preceding Section 16.1, whether before or after termination of this Agreement, may be submitted by either Party to any court of competent jurisdiction in the United States.

     16.3Injunctive Relief. Notwithstanding anything to the contrary in this Agreement, either Party will have the right to seek temporary injunctive relief in any court of competent jurisdiction as may be available to such Party under the laws and rules applicable in such jurisdiction with respect to any matters arising out of the other Party’s performance of its obligations under this Agreement.

     16.4Governing Law. Resolution of all disputes arising out of or related to this Agreement or the performance, enforcement, breach or termination of this Agreement and any remedies relating thereto, shall be governed by and construed under the substantive laws of the State of New York, without regard to conflicts of law rules that would provide for application of the law of a jurisdiction outside New York.

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ARTICLE 17.
MISCELLANEOUS

     17.1Entire Agreement; Amendment. This Agreement, including the exhibits attached hereto (each of which is hereby incorporated herein by reference), sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between the Parties, except for the Existing NDA, which will continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date, and the Material Transfer Agreement between Shire Pharmaceuticals Inc. and New River dated January 7, 2005. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

     17.2Force Majeure. Each Party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure shall include conditions beyond the control of the Parties, including without limitation, an act of God, voluntary or involuntary compliance with any regulation, law or order of any government, war, civil commotion, labor strike or lockout, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe; provided, however, the payment of invoices due and owing hereunder shall not be delayed by the payer because of a force majeure affecting the payer, unless such force majeure specifically precludes the payment process.

     17.3Notices. All notices or other communications that are required or permitted under this Agreement will be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication will be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For New River:	New River Pharmaceuticals Inc.
	The Governor Tyler
	1881 Grove Avenue
	Radford, VA 24141
	Phone: (540) 633-7978
	Fax: (540) 633-7939
	Attention: President

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with a copy to:	Cooley Godward LLP
	5 Palo Alto Square
	3000 El Camino Real
	Palo Alto, CA 94306-2155
	Phone: (650) 843-5000
	Fax: (650) 849-7400
	Attention: Robert L. Jones
For Shire:	Shire Pharmaceuticals Group plc
	Hampshire International Business Park
	Chineham, Basingstoke
	Hampshire, RG24 8EP
	ENGLAND
	Fax: 011 44 125 689 4710
	Attention: General Counsel
	Shire Pharmaceuticals
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center
	Princeton, NJ 08540
	Fax: (609) 919-6701
	Attention: Randall B. Sunberg

     17.4Independent Contractors. In making and performing this Agreement, Shire and New River shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and New River and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. Except as otherwise provided in this Agreement, each Party shall be solely responsible for its own costs and expenses associated with this Agreement.

     17.5Non-Solicitation. From and after the Effective Date until the [*] the termination or expiration of this Agreement, neither Party shall, and shall cause each of its Affiliates not to, directly or indirectly, without the other Party’s prior written consent, solicit the employment of any employee (or former employee bound by a non-competition obligation) of the other Party or its Affiliates with whom it has come in contact in conducting activities under this Agreement; provided, however, that the foregoing provisions shall not apply to (a) a general advertisement or solicitation program that is not specifically targeted at such persons or (b) the solicitation of any employee after such time as such employee’s employment has been terminated by the other Party or its Affiliate.

     17.6Maintenance of Records. Each Party shall keep and maintain all records required by Law with respect to Products and shall make copies of such records available to the other Party upon reasonable request.

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     17.7United States Dollars. References in this Agreement to “Dollars” or “$” shall mean the legal tender of the United States of America.

     17.8No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

     17.9Assignment. Neither Party will sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of Law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent may be granted, withheld or conditioned at such other Party’s sole and absolute discretion);provided, however, that either Party may assign or transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other Party (a) to any Affiliate of such Party, or (b) to any Third Party with which it merges or consolidates, or to which it transfers all or substantially all of its assets. The assigning Party (unless it is not the surviving entity) will remain jointly and severally liable with, and will guarantee the performance of, the relevant Affiliate or Third Party assignee under this Agreement, and the relevant Affiliate assignee, Third Party assignee or surviving entity will assume in writing all of the assigning Party’s obligations under this Agreement. Any purported assignment or transfer in violation of this Section 17.9 will be void ab initio and of no force or effect. Upon any such assignment by New River pursuant to clause (b) of this Section 17.9 to a Third Party with a product that has received Regulatory Approval and that competes with any Collaboration Product, any and all ongoing and future Co-Promotion rights and activities of New River (and any such New River assignee) pursuant to Article 5 hereof or otherwise with respect to the applicable Collaboration Product shall automatically terminate and be of no further force and effect if such Third Party does not divest of such competing product.

     17.10Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

     17.11Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

     17.12Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

     17.13Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.

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     17.14Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

     17.15No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

     17.16ROW Territory Agreement. The Parties hereby agree to prepare and cause to be entered into, no later than (30) days following the Effective Date, a separate written agreement incorporating the provisions herein relating to Collaboration Products (and all other relevant matters) in the ROW Territory (the “ROW Agreement”). The ROW Agreement will have the effect of amending this Agreement solely to the extent that the Parties’ rights and responsibilities shall be divided into two separate agreements: one relating to the US Territory and the other relating to the ROW Territory. The Parties to the ROW Agreement will be Shire Pharmaceuticals Ireland Limited (“SPIL”) and New River. For purposes of the initial license fee provided for in Section 7.1, Shire shall pay $48,800,000 of such amount for its own account and $1,200,000 for the account of SPIL. The milestone payments provided for in Section 7.2 (excluding the milestone payment provided for in Section 7.2(d)) will remain the sole responsibility of Shire. SPIL will be solely responsible for making the milestone payment provided for in Section 7.2(d) .

[Signature Page Follows.]

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     IN WITNESS WHEREOF, the Parties have executed this Collaboration Agreement in duplicate originals by their proper officers as of the Effective Date.

NEW RIVER PHARMACEUTICALS INC.	SHIRE LLC
By:____________________________	By:____________________________
Randal J. Kirk	Name:__________________________
Chief Executive Officer	Title:___________________________
	SHIRE PHARMACEUTICALS GROUP PLC
	By:____________________________
	Name:__________________________
	Title:___________________________

EXHIBIT A

DETERMINATION OF CERTAIN ACCOUNTING TERMS

Upon the request of either Party from time to time, each Party will reasonably consider suggestions from the other Party to review and clarify and possibly expand any of the definitions in this Exhibit A or any of the financial terms defined in Article 1, including financial terms whose definition is referred to in the table at the end of Article 1; provided that no changes shall be made without the written consent of both Parties.

1. COST OF GOODS SOLD

     The provisions of this section shall govern the determination of the cost of a unit of Compound or Collaboration Product. The accumulated costs of such unit as determined hereunder shall be referred to as “Cost of Goods.” When such unit is sold or transferred to Shire, in the case of New River, or to a Third Party, in the case of Shire, the Cost of Goods of such unit shall become the unit’s Cost of Goods Sold, subject to the selling Party’s inventory flow methods adopted.

1.1.	New River’s Cost of Goods. If the Manufacture of Compound and/or Collaboration Product is performed, in any part, by one or more Third Party Manufacturer(s) on behalf of New River, New River’s Cost of Goods shall equal [*].
1.2.	Shire’s Cost of Goods. Relating to Collaboration Product transferred to it from New River, Shire’s Cost of Goods shall equal [*].
1.3.	Compound and/or Collaboration Product Manufactured by a Party. If the Manufacture of Compound and/or Collaboration Product is performed directly by a Party, the Party conducting such activities may propose to the other Party a methodology to determine the Cost of Goods pursuant to a cost accounting system based on standard costs, and the Parties shall negotiate in good faith to agree upon such methodology. The Parties agree and acknowledge that, if New River undertakes to Manufacture Compound and/or Collaboration Product directly, [*] by the Parties in determining New River’s Cost of Goods. Similarly, if Shire undertakes to Manufacture Collaboration Product directly (pursuant to Shire’s rights under the Agreement), [*] by the Parties in determining Shire’s Cost of Goods.
1.4.	Cost Adjustments. If any adjustment to New River’s Cost of Goods of a particular quantity of Compound and/or Collaboration Product arises by way of any adjustment to New River’s actual costs incurred and payable to a Third Party Manufacturer subsequent to the transfer of such quantity to Shire, New River shall promptly notify Shire of such adjustment and the Parties shall reflect such adjustment for all applicable purposes under this Agreement.

A-1

2. MARKETING EXPENSES

     “Marketing Expenses” shall be the sum of Marketing Management, Market and Consumer Research, Advertising, Trade Promotion, Detailing Expenses and Education Expenses (as each is described below), and all other costs as subsequently may agreed by the Parties in writing that are attributable to the sale, promotion or marketing of a Collaboration Product, in all cases to the extent attributable to the US Territory and the Field.

      “Marketing Management” shall include [*].

      “Market and Consumer Research” shall include [*].

      “Advertising” shall mean [*].

      “Trade Promotion” shall include [*].

      “Detailing Expenses” shall include [*].

      “Education” shall include [*].

3. DISTRIBUTION EXPENSES

      “Distribution Expenses”shall be [*]; provided, that such Distribution Expenses shall not include an allowance or consideration for freight or other expenses of distributing Collaboration Products to the extent that such expenses are included as deductions from the Invoiced Amount in determining Net Sales under this Agreement.

4.REGULATORY EXPENSES

      “Regulatory Expenses” shall means all costs incurred to comply with and to maintain all Regulatory Approvals and all regulatory agencies, including FDA user and other fees, reporting, and other regulatory affairs activities, including post-marketing safety surveillance and reporting.

5.ALLOCATION OF COSTS.

     Except as it relates to appropriately allocating an item of expense or cost to more than one category of expense or cost under this Agreement, no item of expense or cost shall be treated as being a part of more than one category of expense or cost under this Agreement.

     As defined above, generally, Marketing Expenses include [*] related to the Marketing of Collaboration Product.

A-2

EXHIBIT B

CALCULATION OF US PRODUCT PROFIT SHARE FOR SCHEDULE II CLASSIFICATION

[*][*]

B-1

EXHIBIT C

INITIALDEVELOPMENT PLAN

New River Pharmaceuticals Inc.
Initial NRP104Development Plan (Pediatric)

[*]

C-1

EXHIBIT D

ADDITIONAL SUPPLY TERMS

The following sets forth an outline of the principal terms of a supply agreement (the “Supply Agreement”) to be negotiated pursuant to Section 6.4 of the Collaboration Agreement. In each case, the terms hereof and of the Supply Agreement will be subject to the Parties’ rights and obligations under the Collaboration Agreement.

1. Delivery. Compound or Collaboration Product supplied by New River to Shire shall be delivered to a facility designated by Shire and otherwise in accordance with the applicable Third Party Manufacturer Agreement.

2. Shortage of Materials.

(a)

In the event that the materials and/or resources required to manufacture and deliver Compound or Collaboration Product to Shire in a timely manner are, or are reasonably anticipated to become, in short supply such that New River may be unable to provide Shire with the quantities of Compound or Collaboration Product forecast by Shire under the Supply Agreement, New River shall notify Shire of such shortage as promptly as practicable. If New River so notifies Shire, New River and Shire shall promptly meet to discuss how to address the potential shortage.

(b)

In the event that New River, at any time, has any information indicating that it may not be able to supply Shire with all forecasted or ordered quantities of Compound or Collaboration Product (whether or not New River may be at fault), New River shall immediately provide Shire a written notice to that effect.

3. Quality Assurance. The Parties shall enter into a Quality Agreement (the “Quality Agreement”) which shall set forth certain obligations of each Party regarding the manufacture and supply of Compound or Collaboration Product. As more specifically set forth in the Quality Agreement, New River shall be responsible for all aspects of its supply chain regarding the Compound or Collaboration Product, including without limitation quality control, quality assurance, release testing and stability testing.

4. Specifications. The specifications for Compound or Collaboration Product, including the necessary documentation, certificates of analysis and test results, will be established according to the procedures set forth in the Collaboration Agreement.

5. Location of Manufacturing. [*] Should New River desire to change any of the manufacturing sites for Compound or Collaboration Product, or any component thereof, to a site other than those designated in the applicable Regulatory Approval, New River shall notify Shire in writing and the Parties shall thereafter meet to discuss the potential consequences of such a change. [*]

D-1

6. Back-Up Manufacturing Rights. If New River fails to supply at least [*] of Shire’s requirements for a Collaboration Product on a rolling [*] (a “Failure to Supply”), then Shire may, by providing written notice within [*] of the occurrence of such Failure to Supply, elect to assume manufacturing of such Collaboration Product. If Shire elects to assume the manufacturing of a Collaboration Product (or if Shire is a back-up manufacturer pursuant to Section 6.3), the following provisions shall be applicable:

(a)

Transfer of Manufacturing Technology. New River, [*] shall be responsible for providing Shire with the documentation, know-how and technical assistance necessary for the successful implementation of the manufacturing process at a location to be designated by Shire. To the extent practicable, New River shall continue to supply Shire with its needs of Collaboration Product under the terms of the Supply Agreement until Shire is capable of doing so.

(b)

Documentation to be Provided by New River. In particular, in connection with the transfer of the manufacturing technology for a Collaboration Product, New River shall provide the following to Shire:

(i)	Copies of [*] related to manufacturing the Collaboration Product;
(ii)	A list of all [*] in the production of the Collaboration Product;
(iii)	Copies of all [*] for the Collaboration Product;
(iv)	Copies of all [*];
(v)	All necessary [*] necessary to manufacture the Collaboration Product and copies of any [*]; and
(vi)	Such other documentation as the Parties may agree.

(c)

Audit of New River Procedures. The Supply Agreement will contain reasonable and customary provisions allowing Shire to inspect and audit those portions of the sites at which the Collaboration Product is manufactured in connection with the transfer of manufacturing technology for a particular Collaboration Product. Any information obtained by Shire through such inspections and audits or reviews of documentation shall be treated as confidential information of New River, subject to the confidentiality obligations under Article 10.

(d)

Access to New River Personnel. New River shall make available to Shire, for a reasonable period of time, all manufacturing and operations [*] necessary to support the transfer of the manufacturing technology to Shire, including the [*] for the validation and qualification of the transferred manufacturing protocol. These [*] in the implementation of the manufacturing technology until all Installation Qualification, Operation Qualification and Process Qualification procedures have been completed successfully.

D-2

7. Forecasts. Following the execution of the Supply Agreement, Shire will give to New River a [*] rolling forecast of Shire’s estimated monthly requirements of Compound or Collaboration Product. The first [*] of the forecast shall be binding and the remainder shall be a good faith estimate of Shire’s requirements. However, for each of the [*] in each such forecast, although the quantities forecast may exceed [*], the supply obligations of New River shall not exceed [*] of the amount forecast for such month in the previous forecast. Shire will provide New River with monthly binding purchase orders for Compound or Collaboration Product in accordance with the binding portion of the rolling forecast.

8. Quality Complaints. New River shall be primarily responsible for handling product quality complaints related to Compound or Collaboration Product. Each Party shall promptly advise the other of any such quality complaints with respect to Compound or Collaboration Product.

9. Representations and Warranties. New River shall make, and shall cause its Affiliates to make, representations and warranties regarding the Compound or Collaboration Product supplied under the Supply Agreement, including, without limitation, the following representations and warranties:

(a)      All Compound or Collaboration Product shall (i) be manufactured in accordance with the then-current good manufacturing practices of all applicable Regulatory Authorities in countries reasonably designated by Shire from time to time, and all other applicable laws, at the time of delivery of Compound or Collaboration Product, (ii) comply with the specifications at the time of delivery.

In addition, for purposes of avoiding prosecution under the FD&C Act only, New River will guarantee that any Compound or Collaboration Product delivered under the Supply Agreement (i) shall not be adulterated or misbranded within the meaning of the Act and applicable foreign equivalents at the time of delivery to Shire, and (ii) is not an article that may not, under the Act (or applicable foreign equivalents), be introduced into interstate commerce.

10. Covenants. New River shall make, and shall cause its Affiliates to make, covenants relating to Compound or Collaboration Product supplied under the Supply Agreement, including, without limitation, the following covenants:

(a)	New River shall, and require its Affiliates and Third Party contract manufacturers, if any, to maintain all regulatory and governmental permits, licenses and approvals that may be necessary to manufacture and ship Compound or Collaboration Product.
(b)	New River shall advise Shire of any information that arises out of New River’s or its Affiliates’ or Third Party contract manufacturers’ activities of which it is aware, that have adverse regulatory compliance and/or reporting consequences concerning Compound or Collaboration Product.

D-3

(c)	New River shall promptly advise Shire of any requests by any Regulatory Authority for inspections at the premises of New River or its Affiliates or Third Party contract manufacturers, with respect to Compound or Collaboration Product.
(d)	In the event New River or its Affiliates or Third Party contract manufacturers are inspected by any Regulatory Authority relating to Compound or Collaboration Product, [*]. New River shall promptly notify Shire of any alleged violations or deficiencies relating to a facility at which Compound or Collaboration Product is manufactured, packaged or stored, and shall promptly disclose to Shire all relevant portions of any notice of observations or potential violations as well as a copy of its or its Affiliates’ or Third Party contract manufacturers’ response thereto.
(e)	For the purpose of permitting a quality and compliance audit, New River shall grant to authorized representatives of Shire (or a Third Party hired on behalf of Shire who is reasonably acceptable to New River), upon reasonable notice, access to areas of each of its plants, and permit Shire access to areas of New River’s and its Affiliates’ and, to the extent practicable, Third Party contract manufacturers’ plants, at such times as Compound or Collaboration Product is being manufactured, packaged or tested; provided, that Shire’s audit of any Third Party facilities will be subject to reasonable and customary confidentiality and non-use obligations.
(f)	Shire shall have the right to examine those technical records made by New River or its Affiliates or Third Party contract manufacturers that relate to the manufacture of Compound or Collaboration Product; provided, that such records will be subject to reasonable and customary confidentiality and non-use obligations.
(g)	New River shall ensure that its Third Party contract manufacturers agree [*].

11. Nonconforming Goods. If a shipment of Compound or Collaboration Product fails, at the time of delivery, to comply with the applicable specifications, and Shire notifies New River of such nonconformity ([*]) within [*] following Shire’s receipt of such shipment, then New River will replace, at no additional expense to Shire, such Compound or Collaboration Product as soon as reasonably practicable after receipt of notification of nonconformity. Any dispute regarding whether a shipment of Compound or Collaboration Product conforms with the applicable specifications will be submitted to an independent laboratory mutually acceptable to the Parties for final resolution. The costs of retaining the laboratory will be included in Cost of Goods for the US Territory and will be borne by the Party whose evaluation of the applicable shipment of Compound or Collaboration Product is mistaken in the ROW Territory.

12. Payment Terms. Shire will pay New River [*] for any quantity of Compound and Collaboration Product provided under the Supply Agreement. At the time of each shipment, New River shall invoice Shire, and Shire shall pay for such shipment within [*] of receipt of each such invoice.

13. Additional Provisions. In addition to more detailed terms regarding the matters specified above in this Exhibit D, the Supply Agreement shall contain other customary supply agreement provisions.

D-4

EXHIBIT E
JOINT PRESS RELEASE
Shire Pharmaceuticals Group plc
Hampshire International Business Park,
Chineham, Basingstoke RG24 8EP UK
Tel +44 1256 894000 Fax +44 1256 894708
http://www.shire.com
New River Pharmaceuticals
1881 Grove Avenue
Radford, VA 24141
Tel +1 540 633 7978 Fax: +1 540 633 7979
http://www.nrpharma.com

For immediate release
[*] (ET) [*] (GMT)

Shire and New River announce collaboration on Phase 3 ADHD drug candidate

BASINGSTOKE, UK, PHILADELPHIA, PA, US and RADFORD, Va., US January 31, 2005— Shire Pharmaceuticals Group plc (LSE: SHP; NASDAQ: SHPGY; TSX: SHQ) and New River Pharmaceuticals Inc. (NASDAQ: NRPH) announced today the signing of an agreement for the global commercialization of NRP104, New River’s Phase 3 compound for treatment of Attention Deficit Hyperactivity Disorder (ADHD), as well as for other potential indications.

Under the terms of the agreement the parties will collaborate on NRP104 development, manufacturing, marketing and sales in the US. Shire will book the product sales and New River may supply up to 25% of the sales effort under a co-promotion right. New River will be financially and operationally responsible for clinical and manufacturing development.

Upon U.S. Food and Drug Administration (FDA) approval, the parties will divide operating profit in accordance with the following general principles: Shire will retain 75% of profits for the first two years following launch and the parties will share the profits equally thereafter.

In the rest of the world, Shire has a license to develop and commercialize NRP104 and New River will receive a low double-digit royalty on net sales.

E-1

Shire pays an initial sum of US$50 million on signing, a further US$50 million upon acceptance of filing of the New Drug Application by the FDA and up to US$300 million in milestone payments depending on the characteristics of the FDA-approved product labeling. An additional US$100 million milestone would be payable as a sales bonus upon achieving a significant sales target. Shire currently plans to expense the first two US$50 million payments, and to capitalize and amortize the milestone payments and the sales bonus over the life of the product.

Shire may be entitled to refunds of amounts previously paid in the event of a delayed product approval, or upon FDA approval depending on the characteristics of the approved product labeling.

Matthew Emmens, Chief Executive of Shire, said:

“This is a strong addition to our ADHD portfolio and complements the development strategy of Shire and its pipeline. NRP104 is in late stage development and we are encouraged by the data that we have seen to date and hope that the new drug has similar efficacy of currently marketed ADHD treatments with potential additional advantages. Importantly, NRP104 could become a global ADHD product. We have structured the financial payments for this collaboration to reflect the potential of the new drug and look forward to progressing this product with New River.”

R.J. Kirk, Chairman and Chief Executive Officer of New River, said:

“We are delighted to announce this collaboration with Shire, a company that we believe will bring substantial value to this project as we plan and hopefully execute the commercialization of NRP104. Shire’s CNS expertise and leadership position in the ADHD market allows them to significantly contribute to this collaboration in a manner that we believe will optimally serve the interests of our shareholders. We therefore believe that Shire will be our ideal partner for this product and we look forward to working with their outstanding team to fully realize the potential of NRP104.”

For further information please contact:

Shire Pharmaceuticals Group plc
Investor Relations
Cléa Rosenfeld (UK and Europe)	+44 1256 894 160

E-2

Brian Piper (US and Canada)	+ 1 484 595 8252
Media
Jessica Mann (UK and Europe)	+44 1256 894 280
Matthew Cabrey (US)	+1 484 595 8248

New River Pharmaceuticals Inc.
Investor Relations
John Quirk	+1 646 536 7029
jquirk@theruthgroup.com
Media
Zack Kubow	+1 646 536 7020
zkubow@theruthgroup.com

E-3

Notes to editors

Shire

Shire Pharmaceuticals Group Plc is a global pharmaceutical company with a strategic focus on meeting the needs of the specialist physician and currently focuses on developing projects and marketing products in the areas of central nervous system, gastrointestinal and renal diseases. Shire has operations in the world’s key pharmaceutical markets (U.S., Canada, U.K., France, Italy, Spain and Germany).

For further information on Shire, please visit the Company’s website: www.shire.com

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization, the impact of competitive products, including, but not limited to, the impact of those on Shire’s Attention Deficit & Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal challenges relating to Shire’s ADHD franchise, government regulation and approval, including but not limited to the expected product approval dates of METHYPATCH® (methylphenidate) and NRP104, including its scheduling classification by the Drug Enforcement Agency in the United States, Shire’s ability to secure new products for development, the implementation of the current reorganization and other risks and uncertainties detailed from time to time in Shire’s filings, including its Annual Report on Form 10-K for the year ended December 31, 2003, with the Securities and Exchange Commission.

New River

New River Pharmaceuticals Inc. is a specialty pharmaceutical company focused on developing novel pharmaceuticals that are safer and improved versions of widely-prescribed drugs, including amphetamines and opioids.

For further information on New River, please visit the company’s website at www.nrpharma.com.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains certain forward-looking information that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private

E-4

Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of New River Pharmaceuticals, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in the New River Pharmaceuticals Inc. final prospectus filed on August 5, 2004, under Rule 424(b) of the Securities Act of 1933, as amended; the ability to successfully execute the collaboration with Shire within a reasonable timeframe or at all; the progress of our product development programs; the status of our preclinical and clinical development of potential drugs, the likely success of our drug products in clinical trials and the regulatory approval process, particularly whether and under what circumstances NRP104 will be approved by the FDA; the ability to develop, manufacture, launch and market NRP104; our projections for future revenues, profitability and ability to achieve certain sales targets; our estimates regarding our capital requirements and our needs for additional financing; the likely scheduling and labeling of NRP104; our ability to attract partners with acceptable development, regulatory and commercialization expertise; the likelihood of regulatory approval under Section 505(b)(2) under the Federal Food, Drug, and Cosmetic Act; the expected benefits of NRP104 such as efficacy and potential advantages; our ability to develop safer and improved versions of widely-prescribed drugs; and our ability to obtain favorable patent claims. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. New River Pharmaceuticals does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in New River Pharmaceuticals’ final prospectus filed with the SEC on August 5, 2004, under Rule 424(b) of the Securities Act of 1933, as amended, as well as other public filings with the SEC.

E-5

EXHIBIT F

TECHNICAL TRADE SECRETS

     Compound means the compound currently identified by New River as NRP104 with the chemical structure [*] and any isomers, salts, solvates, polymorphs, esters and derivatives of any of the foregoing, in each case where an active moiety of such compound is [*].

F-1

EXHIBIT G

CERTAIN PRODUCTS OF SHIRE

Development Projects

[*]

Marketed Stimulant Products

[*]

G-1

SCHEDULE 3.7

NEW RIVER SUBCONTRACTORS

NAME OF THIRD PARTY	ACTIVITIES PERFORMED / TO BE PERFORMED
[*]	Manufacture of Drug Substance (API)
[*]	Animal toxicology and pharmacokinetic studies
[*]	Bioanalytical method development and sample analysis; animal PK studies
[*]	Gene toxicology studies
[*]	Bioanalytical method development and sample analysis; human PK studies
[*]	In vitro toxicology, liver metabolism and P450 studies
[*]	Juvenile animal toxicology studies
[*]	Drug Packaging and labeling for clinical trials
[*]	CRO for all clinical studies

SCHEDULE 6.1.1

NEW RIVER MANUFACTURING CONTRACTORS AND ACTIVITIES

NAME OF THIRD PARTY	ACTIVITIES PERFORMED / TO BE PERFORMED
[*]	Manufacture of Drug Substance (API)
[*]	Manufacture of Drug product (formulation and encapsulation)

SCHEDULE 12.1.3(b)

INDs and DRUG APPROVAL APPLICATIONS

United States IND #67482
United States IND #70109

SCHEDULE 12.1.3(c)(i)(I)

LICENSED PATENTS [*]

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days) 1
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

¹ Official fees do not include Attorney or Foreign Associate Fees.

1

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days) 1
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

2

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days) 1
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

3

SCHEDULE 12.1.3(c)(i)(II)

LICENSED PATENTS THAT DO NOT CLAIM COMPOUND OF COLLABORATION PRODUCTS

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days)
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

EX-10.2

Exhibit 10.2

*Represents language for which confidential treatment has been requested.

     UNITED STATES
COLLABORATION AGREEMENT

BY AND AMONG

SHIRE LLC

SHIRE PHARMACEUTICALS PLC

AND

NEW RIVER PHARMACEUTICALS INC.

DATED AS OF MARCH 31, 2005

TABLE OF CONTENTS
		Page
ARTICLE 1	DEFINITIONS	2
ARTICLE 2	MANAGEMENT OF COLLABORATION	13
2.1	General	13
2.2	Joint Development Committee (JDC)	13
2.3	Joint Marketing Committee (JMC)	14
2.4	Joint Supply Committee (JSC)	15
2.5	Joint Intellectual Property Committee (JIPC)	17
2.6	General Committee Membership and Procedures	17
2.7	Committee Decision-Making	18
ARTICLE 3	DEVELOPMENT AND REGULATORY RESPONSIBILITIES	20
3.1	Overview	20
3.2	Development Plans	20
3.3	Development in the US Territory for ADHD	21
3.4	Right of Reference to the ROW Territory	23
3.5	Reporting	23
3.6	Development in the US Territory for Indications other than ADHD	23
3.7	Shared Expenses	25
3.8	Use of Third Parties	26
3.9	Right to Audit	27
3.10	Assistance	27
3.11	Compliance with Laws	27
ARTICLE 4	COMMERCIALIZATION OF COLLABORATION PRODUCTS	28
4.1	Principles of Commercialization	28
4.2	Sales and Distribution of Collaboration Products to Third Parties	28
4.3	Marketing Plans and Budgets for the US Territory	28
4.4	Regulatory Obligations During Commercialization	29
4.5	Diligence in Commercialization	29
4.6	Cost of Commercialization	30
4.7	Use of Third Parties	30
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TABLE OF CONTENTS
(continued)
		Page
4.8	Promotional Materials	30
4.9	Provisions Applicable to Sales Representatives	30
4.10	Reporting	33
4.11	Compliance with Laws	33
ARTICLE 5	CO-PROMOTION OF COLLABORATION PRODUCTS	33
5.1	Option	34
5.2	Exercise of Option	34
5.3	Co-Promotion Period	34
5.4	Amendment of Marketing Plan to Include Co-Promotion Activities	34
5.5	Scope	34
5.6	Advertising and Promotional Materials	35
5.7	Shipment, Storage and Allocation of Samples	35
5.8	Training	35
5.9	Provisions Applicable to All New River Sales Representatives	37
ARTICLE 6	MANUFACTURE OF COLLABORATION PRODUCTS	36
6.1	Manufacture and Supply	36
6.2	Specifications and Terms of Supply; Multiple Sources	37
6.3	Manufacture by Shire; Commercial Supply by Shire	38
6.4	Supply Terms	39
ARTICLE 7	FINANCIAL TERMS	39
7.1	Licensing Fee	39
7.2	Milestone Payments	39
7.3	Refunds by New River	40
7.4	Sharing of US Product Profit	40
ARTICLE 8	PAYMENT TERMS	41
8.1	Payment Method	41
8.2	Payment Schedules; Reports	41
8.3	Currency Conversion	42
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TABLE OF CONTENTS
(continued)
		Page
8.4	Legal Restrictions	42
8.5	Taxes	42
8.6	Records Retention; Audit	43
ARTICLE 9	LICENSES	44
9.1	Licenses to Shire	44
9.2	Licenses to New River	44
9.3	Sublicensing	44
9.4	Scope of Licenses	44
9.5	No Implied Licenses	44
9.6	Exclusivity	45
9.7	Nonassertion	45
9.8	[*]	45
ARTICLE 10	CONFIDENTIALITY	45
10.1	Confidential Information	46
10.2	Publicity; Filing of this Agreement	47
10.3	Publication	48
10.4	Use of Names	48
10.5	Confidentiality of this Agreement	48
10.6	Disclosures Under Existing NDA	48
10.7	Survival	49
ARTICLE 11	OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS	49
11.1	Ownership	49
11.2	Disclosures; Disputes Regarding Inventions	49
11.3	Patent Filings	50
11.4	Third-Party Patent Rights	51
11.5	Enforcement and Defense of Patents	51
11.6	Notice of Certification	54

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TABLE OF CONTENTS
(continued)
		Page
11.7	Patent Term Extensions	54
11.8	Listing of Patents	54
11.9	Trademarks and Copyrights	55
ARTICLE 12	REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY	57
12.1	Representations, Warranties and Covenants	57
12.2	Limitation on Representations or Warranties	62
12.3	Performance by Affiliates	62
12.4	Disclaimer of Warranty	62
12.5	Limitation of Liability	62
12.6	Essential Basis	63
ARTICLE 13	TERM AND TERMINATION	63
13.1	Term	63
13.2	Breaches (General)	63
13.3	Allegations of Material Breach	63
13.4	Other Termination by Shire	65
13.5	Other Termination By New River	66
13.6	Termination for Government Action	66
ARTICLE 14	EFFECTS OF TERMINATION	67
14.1	Post-Termination Activities by Shire	67
14.2	Post-Termination Activities by New River	69
14.3	Accrued Rights	71
14.4	Confidential Information	71
14.5	Survival	71
14.6	Liability Following Termination	71
ARTICLE 15	INDEMNIFICATION; INSURANCE	71
15.1	Indemnification	71
15.2	Notice of Claim	72
15.3	Control of Defense	72
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TABLE OF CONTENTS
(continued)
		Page
15.4	Right to Participate in Defense	72
15.5	Settlement	72
15.6	Cooperation	73
15.7	Expenses of the Indemnified Party	73
15.8	Product Claims	73
15.9	Insurance	74
15.10	Guaranty	74
ARTICLE 16	DISPUTE RESOLUTION	75
16.1	Disputes	75
16.2	Litigation	75
16.3	Injunctive Relief	75
16.4	Governing Law	75
ARTICLE 17	MISCELLANEOUS	75
17.1	Entire Agreement; Amendment	75
17.2	Force Majeure	76
17.3	Notices	76
17.4	Independent Contractors	77
17.5	Non-Solicitation	77
17.6	Maintenance of Records	77
17.7	United States Dollars	77
17.8	No Strict Construction	78
17.9	Assignment	78
17.10	Counterparts	78
17.11	Further Actions	78
17.12	Severability	78
17.13	Ambiguities	78
17.14	Headings	78
17.15	No Waiver	79
v

Exhibits
EXHIBIT A	DETERMINATION OF CERTAIN ACCOUNTING TERMS
EXHIBIT B	[*]
EXHIBIT C	INITIAL DEVELOPMENT PLAN
EXHIBIT D	ADDITIONAL SUPPLY TERMS
EXHIBIT E	JOINT PRESS RELEASE
EXHIBIT F	TECHNICAL TRADE SECRETS
EXHIBIT G	CERTAIN PRODUCTS OF SHIRE

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     UNITED STATES
COLLABORATION AGREEMENT

THIS UNITED STATES COLLABORATION AGREEMENT (the “Agreement”) is dated as of March 31, 2005 by and among SHIRE LLC, a Kentucky limited liability company having a principal place of business at 9200 Brookfield Court, Florence, Kentucky 41042 (“Shire”), SHIRE PHARMACEUTICALS GROUP PLC, a British public limited company having a principal place of business at Hampshire International Business Park, Chineham, Basingstoke, England RG24 8EP, solely for purposes of the provisions of Section 15.10 of this Agreement, and NEW RIVER PHARMACEUTICALS INC., a Virginia corporation having a principal place of business at 1881 Grove Avenue, Radford, Virginia 24141 (“New River”). Shire and New River are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

     WHEREAS, New River is a specialty pharmaceutical company focused on developing novel pharmaceuticals that are safer and improved versions of widely-prescribed pharmaceutical products, and is clinically developing a proprietary amphetamine conjugate for the treatment of attention deficit/hyperactivity disorder in pediatric and adult patients;

     WHEREAS, Shire is a worldwide, specialty pharmaceutical company engaged in the development, manufacturing and marketing of pharmaceutical products;

     WHEREAS, on January 31, 2005 (the “Effective Date”), the Parties entered into that certain Collaboration Agreement (the “January Agreement”) that established a broad collaboration for the further development and commercialization of Compound in both the US Territory and ROW Territory, with the objective of utilizing the areas of expertise of both New River and Shire to provide products to patients;

     WHEREAS, pursuant to Section 17.16 of the January Agreement, the Parties agreed to divide the January Agreement into two separate agreements: one relating to the US Territory and the other relating to the ROW Territory;

     WHEREAS, as contemplated by Section 17.16 of the January Agreement, New River and Shire Pharmaceuticals Ireland Limited, an Affiliate of Shire, are entering into that certain ROW Territory License Agreement (the “ROW Agreement”) simultaneously with the execution of this Agreement; and

     WHEREAS, this Agreement, together with the ROW Agreement, supercede and replace the January Agreement in its entirety.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the Parties, intending to be legally bound, agree as follows:

ARTICLE 1
DEFINITIONS

The following terms shall have the following meanings as used in this Agreement:

     1.1“Act” means the United States Federal Food, Drug and Cosmetics Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder.

     1.2“ADHD” means attention deficit/hyperactivity disorder in human beings.

     1.3“Adolescent” means a human being that has attained the age of thirteen (13) but is less than eighteen (18) years of age.

     1.4“Adult” means a human being that has attained the age of eighteen (18).

     1.5“Affiliate” means a Person that controls, is controlled by or is under common control with a Party. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct the management and policies of such Person, whether by the ownership of at least fifty percent (50%) of the voting stock of such Person (it being understood that the direct or indirect ownership of a lesser percentage of such stock shall not necessarily preclude the existence of control), or by contract or otherwise.

     1.6“Allowable Expenses” means those expenses incurred after the First Commercial Sale of a Collaboration Product which are consistent with the budget set forth in the applicable Marketing Plan, and are specifically attributable or reasonably allocable to such Collaboration Product in the US Territory, and shall consist of (i) Cost of Goods Sold, (ii) Marketing Expenses, (iii) Distribution Expenses, (iv) product liability insurance expenses, and (v) Regulatory Expenses (as such terms may be defined in this Article 1 or in Exhibit A). Allowable Expenses shall exclude Development Expenses, even if incurred after the First Commercial Sale of a Collaboration Product in the US Territory, and shall exclude any costs that are deductible from Net Sales under the definition thereof (e.g., distributor fees).

     1.7“Business Day” means any day other than (i) Saturday or Sunday or (ii) any other day on which banks in New York, New York, United States or London, England are permitted or required to be closed.

     1.8“cGCP” means the current Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials, including the requirements in 21 C.F.R. Parts 11, 50, 54, 56, 312, and 314, that provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected.

     1.9“cGLP” means current Good Laboratory Practices (i) as promulgated under the Act at 21 C.F.R. Part 58, as the same may be amended or re-enacted from time to time and (ii) as required by Law in countries other than the United States where non-clinical laboratory studies are conducted.

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     1.10“cGMP” means all applicable standards relating to manufacturing practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products, including (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 210 and 211 and The Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products as each may be amended from time to time, (ii) the principles detailed in the ICH Q7A guidelines, (iii) if Shire notifies New River that Shire intends to Commercialize a Collaboration Product in a country, Laws promulgated by any Governmental Authority in such country having jurisdiction over the Manufacture of Compound or Collaboration Product, or (iv) if Shire notifies New River that Shire intends to Commercialize a Collaboration Product in a country, guidance documents promulgated by any Governmental Authority in such country having jurisdiction over the Manufacture of Compound or Collaboration Product (including but not limited to advisory opinions, compliance policy guides and guidelines), which guidance documents are being implemented within the pharmaceutical manufacturing industry.

     1.11“Child” means a human being that has not attained the age of thirteen (13).

     1.12“Collaboration Product” means a pharmaceutical product containing or comprising Compound in any dosage form alone, or in combination with, one or more other pharmaceutically active ingredients, and any and all Improvements thereto.

     1.13“Combination Product” means any Collaboration Product that contains the Compound and one or more pharmaceutically active ingredients in addition to Compound, and any and all Improvements thereto.

     1.14“Commercialization” means any and all activities directed to the commercial Manufacturing, marketing, offering for sale and selling of a Collaboration Product, including Pre-Marketing, advertising, educating, planning, marketing, promoting, distributing and conducting market and product support studies and post-marketing safety surveillance and reporting.

     1.15“Committee” means the JDC, JMC, JSC or JIPC, as the case may be.

     1.16“Compound” has the meaning set forth on Exhibit F.

     1.17“Control” means, with respect to any intellectual property right or other intangible property, that a Party or one of its Affiliates owns or has a license or sublicense to such item or right, and has the ability to grant access, license or sublicense in or to such right without violating the terms of any agreement or other arrangement with any Third Party.

     1.18“Controlled Substances Act” means the United States Controlled Substances Act, as amended (21 U.S.C. 801 et seq).

     1.19“Co-Promotion” means those Detailing and promotional activities (including without limitation performing Sales Calls) with respect to a Co-Promote Product undertaken by New River Sales Representatives to encourage appropriate prescribing of such Co-Promote Product in the US Territory.

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     1.20“Cost of Goods Sold” means the cost of Collaboration Product sold in finished form by Shire or any of its Affiliates or sublicensees to a Third Party, as calculated in the manner set forth in Exhibit A. The term “Cost of Goods” has a separate meaning as set forth in Exhibit A.

     1.21“Detail” or “Detailing” means, with respect to a Collaboration Product, the communication by a Sales Representative during a Sales Call (a) involving face-to-face contact or by means of an e-detail or detailing through video, (b) describing in a fair and balanced manner the FDA-approved indicated uses and other relevant characteristics of such Collaboration Product, (c) using the Promotional Materials in an effort to increase the prescribing and/or hospital ordering preferences of a Collaboration Product for its FDA-approved indicated uses, and (d) made at such medical professional’s office, in a hospital, at marketing meetings sponsored by a Party for the Collaboration Products or other appropriate venues conducive to pharmaceutical product informational communication where the principal objective is to place an emphasis, either primary or secondary, on a Collaboration Product and not simply to discuss a Collaboration Product with such medical professional. For the avoidance of doubt, discussions at conventions or other meetings not specifically sponsored by a Party for a Collaboration Product shall not constitute “Details” or “Detailing”.

     1.22“Development” means all activities relating to obtaining Regulatory Approval of a Collaboration Product, including all test method development, stability testing, toxicology, formulation, process development, cGMP audits (but only those performed prior to Regulatory Approval and excluding any audits for commercial Manufacture), cGLP audits, cGCP audits, validation, quality assurance/quality control development, preclinical and clinical testing and studies, regulatory affairs and outside counsel regulatory legal services relating to any of the foregoing, and any activities relating to the Manufacture of Collaboration Products other than commercial quantities thereof. For the avoidance of doubt, the conduct of Phase III-B Clinical Studies will be considered Development.

     1.23“Development Expenses” means the expenses incurred by a Party that are consistent with a Development Plan and are specifically attributable or reasonably allocable to the Development of a Collaboration Product. Development Expenses shall include, but are not limited to, the following costs incurred for the Development of a Collaboration Product: the cost of studies on the toxicological, pharmacokinetic, metabolic or clinical aspects of a Collaboration Product directed to obtaining Regulatory Approval of a Collaboration Product; the cost of Phase III-B Clinical Trials, and costs (and related fees) for preparing, submitting, reviewing or developing data or information for the purpose of submission to a Governmental Authority to obtain Regulatory Approval of a Collaboration Product; and manufacturing process development and scale-up for Collaboration Products in bulk and finished form. Development Expenses shall exclude any [*] incurred by a Party in connection with the Development of a Collaboration Product.

     1.24“Diligent Efforts” means the carrying out of obligations or tasks consistent with the reasonable best practices of the pharmaceutical industry for the development or commercialization of a pharmaceutical product having similar market potential, profit potential or strategic value as the applicable Collaboration Product, based on conditions then prevailing. Diligent Efforts requires that the Party, at a minimum: (a) determine the general industry

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practices with respect to the applicable activities; (b) reasonably promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis; (c) set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations; and (d) make and implement decisions and allocate resources designed to advance progress with respect to such objectives.

     1.25“Drug Approval Application” means an application for Regulatory Approval required before commercial sale or use of a Collaboration Product as a drug in a regulatory jurisdiction, including a new drug application (“NDA”) or supplemental new drug application (“SNDA”) or any amendments thereto submitted to the FDA.

     1.26“FDA” means the United States Food and Drug Administration or any successor federal agency thereto.

     1.27“Field” means all human and veterinary pharmaceutical uses.

     1.28“Financial Statement” means a financial statement in a form as may be reasonably agreed upon by the Parties from time to time in accordance with the terms of this Agreement.

     1.29“First Commercial Sale” means, with respect to a Collaboration Product and on a country-by-country basis, the first commercial sale after receipt of Regulatory Approval of such Collaboration Product in such country. Sales for clinical studies, compassionate use, named patient programs, sales under a treatment IND, test marketing, any nonregistrational studies, or any similar instance where the Collaboration Product is supplied with or without charge shall not constitute a First Commercial Sale. For clarity, it is understood and agreed that the First Commercial Sale of a Collaboration Product for ADHD in the US Territory shall not occur until the receipt of Regulatory Approval, including the receipt by New River of written notification from the FDA of approval of the Drug Approval Application [*] for such Collaboration Product, and New River has provided such written notification to Shire.

     1.30“Governmental Authority” means any court, tribunal, arbitrator, agency, legislative body, commission, official or other instrumentality of (i) any government of any country, (ii) a federal, state, province, county, city or other political subdivision thereof or (iii) any supranational body, including without limitation the European Agency for the Evaluation of Medicinal Products.

     1.31“Improvement” means any enhancement or modification of (i) a Collaboration Product, (ii) the Compound’s or Collaboration Product’s use, dosage form, indication, line extension, presentation or formulation or (iii) the process or method for the Manufacture of the Compound or Collaboration Product, in each case whether or not patentable, that is developed by or for, invented or acquired by, or comes under the Control of, New River or Shire during the Term.

     1.32“IND” means an Investigational New Drug Application filed with FDA or a similar application filed with an applicable Regulatory Authority outside of the United States such as a clinical trial application (CTA) or a clinical trial exemption (CTX).

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     1.33“Invention” means any discovery (whether patentable or not) conceived during the Term and potentially useful for the Manufacture, use, Development or Commercialization of the Compound or a Collaboration Product.

     1.34“Joint Invention” means an Invention that is conceived jointly by an employee of, or person under an obligation of assignment to, each of New River and Shire.

     1.35“Know-How” means any non-public information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation, databases, ideas, discoveries, inventions, trade secrets, practices, methods, tests, assays, techniques, specifications, processes, formulations, formulae, knowledge, know-how, skill, experience, materials, including pharmaceutical, chemical and biological materials, products and compositions, scientific, technical or test data (including pharmacological, biological, chemical, biochemical, toxicological and clinical test data), analytical and quality control data, stability data, studies and procedures, drawings, plans, designs, diagrams, sketches, technology, documentation, and patent-related and other legal information or descriptions.

     1.36“Law” or “Laws” means all laws, statutes, rules, codes, regulations, orders, judgments and/or ordinances of any Governmental Authority.

     1.37“Licensed Know-How” means all Know-How that is Controlled by New River as of the Effective Date or at any time during the Term and that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or a New River Invention; provided, however, that Know-How Controlled by New River disclosing New River’s proprietary Carrierwave^TM technology shall not be included in Licensed Know-How except to the extent necessary for Shire to exercise its rights and perform its obligations under this Agreement. Notwithstanding anything herein to the contrary, Licensed Know-How shall exclude Licensed Patents.

     1.38“Licensed Patent” means a Patent that (i) claims the Manufacture, use, Development, Commercialization and/or export of the Compound, a Collaboration Product and/or a New River Invention, and (ii) is Controlled by New River as of the Effective Date or at any time during the Term. For the avoidance of doubt, all New River Collaboration Patents shall be considered Licensed Patents.

     1.39“Losses” means any and all amounts paid or payable to Third Parties with respect to a Third Party Claim, including without limitation, damages (including all incidental and consequential damages), deficiencies, defaults, awards, settlement amounts, assessments, fines, dues, penalties, costs, liabilities, obligations, taxes, liens, losses, lost profits, fees and expenses (including, without limitation, court costs, interest and reasonable fees of attorneys, accountants and other experts).

     1.40“Manufacture” means all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, including but not limited to manufacturing Compound or supplies for Development, manufacturing Collaboration Product for commercial sale, packaging, in-process and finished product testing, release of product or any component or

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ingredient thereof, quality assurance activities related to manufacturing and release of product, ongoing stability tests and regulatory activities related to any of the foregoing.

     1.41“Marketing Plan” means a written marketing plan and budget for a Collaboration Product during an applicable time period that contains at least the following for the relevant time period: (i) a rolling, good faith forecast of [*] for at least four (4) full, consecutive calendar quarters; (ii) general strategies and programs for promoting, Detailing and marketing such Collaboration Product; and (iii) the definitions of the relative roles, levels, types of efforts and spending for such period.

     1.42“Net Sales” means, with respect to a Collaboration Product, the amount invoiced by Shire, its Affiliates or sublicensees for sales of such Collaboration Product to a Third Party (“Invoiced Amount”) less: (i) transportation charges, freight and insurance (but only insurance related to protecting the particular shipment against physical loss or damage); (ii) taxes (other than taxes based on income), tariffs, customs duty, excise or other duty and any other governmental charges, all to the extent imposed upon the sale, transportation or delivery of such Collaboration Product and paid by the seller; (iii) Third Party distributor fees; (iv) trade discounts, quantity discounts, cash discounts, rebates, reimbursements, cooperative advertising allowances, credits or chargebacks actually granted, allowed or incurred in the ordinary course of business in connection with the sale of such Collaboration Product, including any credits, volume rebates, charge-back and prime vendor rebates, fees, fees for services, reimbursements or similar payments granted or given to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations or other institutions or health care organizations; (v) adjustments, allowances or credits (calculated on a per unit basis) to customers, not in excess of the selling price per unit of such Collaboration Product, including without limitation on account of price adjustments, governmental requirements, billing errors, rejection, damage, recalls or return of such Collaboration Product; (vi) payments or rebates paid in connection with sales of Collaboration Products to any governmental or regulatory authority in respect of any state or federal Medicare, Medicaid or similar programs; (vii) royalties or technology access fees paid to a Third Party in respect of the sale of such Collaboration Product; (viii) write-offs for bad debts incurred (net of any bad debts later recovered); and (ix) any item substantially similar in character/substance to the foregoing. Net Sales shall be accounted for in accordance with generally accepted accounting principles (“GAAP”) consistently applied in the jurisdiction in which the sales occur, it being understood that bad debt write-off shall be deducted in arriving at Net Sales notwithstanding that such treatment may be inconsistent with GAAP, and it being further understood that Shire shall make bad debt write-off decisions consistent with its usual business practices.

      Amounts received by Shire or its Affiliates or sublicensees for the sale of Collaboration Products among Shire and its Affiliates and sublicensees for resale shall not be included in the computation of Net Sales hereunder. For the avoidance of doubt, no amount of cost, expense or other reduction or adjustment, whether or not specifically referred to in this definition of Net Sales, shall serve to adjust the Invoiced Amount more than once in arriving at Net Sales.

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     1.43“New River Invention” means an Invention that is conceived, solely or jointly with a Third Party, by an employee of New River or a person under an obligation of assignment to New River.

     1.44“Patent” means (i) valid and enforceable patents, re-examinations, reissues, renewals, extensions, supplementary protection certificates and term restorations, any confirmation patent or registration patent or patent of addition based on any such patent, (ii) pending applications for patents, including without limitation continuations, continuations-in-part, divisional, provisional and substitute applications, and inventors’ certificates, (iii) all foreign counterparts of any of the foregoing, and (iv) all priority applications of any of the foregoing.

     1.45“Patent Expenses” means the fees and expenses of outside counsel and payments to Third Parties incurred after the Effective Date in connection with the preparation, filing, prosecution and maintenance of the Licensed Patents, the Joint Collaboration Patents, and the Shire Patents covering Compound and Collaboration Products, including the costs of patent interference and opposition proceedings, net of any reimbursement of such expenses by Third Parties.

     1.46“Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government, or any agency or political subdivisions thereof.

     1.47“Phase III-B Clinical Trials” means product support clinical trials of a Collaboration Product (i.e., a clinical trial which is not required for receipt of initial Regulatory Approval but which may be useful in providing additional drug profile data or in seeking a label expansion) commenced before receipt of Regulatory Approval for the indication for which such trial is being conducted. For the avoidance of doubt, Phase III-B Clinical Trials shall be considered part of Development.

     1.48“Phase IV and Related Expenses” means certain research and development costs incurred by a Party in relation to a Collaboration Product after the First Commercial Sale and shall exclude administrative expenses and costs that are included within Costs of Goods Sold or Development Expenses. Such post-launch research and development costs shall include the costs of: (i) Phase IV Clinical Trials; (ii) ongoing product support; (iii) ongoing medical affairs; and (iv) fees and expenses of outside counsel in respect of regulatory affairs unrelated to obtaining Regulatory Approvals.

     1.49“Phase IV Clinical Trials” means product support clinical trials of a Collaboration Product commenced after receipt of Regulatory Approval in the indication for which such trial is being conducted.

     1.50“Pre-Marketing” means all sales and marketing activities undertaken prior to and in preparation for the launch of a Collaboration Product in a particular territory. Pre-Marketing shall include advertising, education, product-related public relations, health care economic studies, governmental affairs activities for reimbursement and formulary acceptance, sales force training, trademark selection, filing, prosecution and enforcement, and other activities included

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within the Marketing Plan prior to the First Commercial Sale of a Collaboration Product in such territory.

     1.51“Pre-Marketing Expenses” means, with respect to a Collaboration Product, any Marketing Expenses incurred by a Party prior to the First Commercial Sale of such Collaboration Product.

     1.52[*] means a [*] during which (i) the applicable [*] is [*] either [*] or [*], (ii) [*] of such [*] are [*] in the [*] on such [*], and (iii) such [*] is given the [*] of the [*] during the [*]. For clarity, no more than [*] during a [*] shall be [*].

     1.53“Promotional Materials” means all written, printed, video or graphic advertising, promotional, educational and communication materials (other than Collaboration Product labels and package inserts) for marketing, advertising and promotion of the Collaboration Products, including, without limitation, copyrights in any such materials and all designs, industrial designs, design patents, design registrations, and design patent applications developed in connection with such materials, for use by (a) a Sales Representative or (b) advertisements, web sites or direct mail pieces, in accordance with the terms of the applicable Marketing Plan. For clarity, it is understood and agreed that Promotional Materials shall not include corporate communications and general marketing or advertising by a Party or its Affiliate; provided however, that to the extent that such corporate communications or general marketing or advertising include or reference a Collaboration Product or related disease state and do not make any actual or implied claims, then such corporate communications or general marketing or advertising shall be governed by the provisions of Section 10.2.

     1.54“Regulatory Approval” means all approvals [*], product and/or establishment licenses, registrations or authorizations of any regional, federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacture, use, storage, import, export, transport, offer for sale, or sale of a pharmaceutical product in a regulatory jurisdiction.

     1.55“ROW Territory” means the world, excluding the US Territory.

     1.56“Sales Call” means a personal visit by a Sales Representative to one or several medical professional(s) having prescribing authority in the part of the Field for the indications in which such Collaboration Product is approved, as well as to other individuals or entities that have significant impact or influence on prescribing decisions in the part of the Field in which such Collaboration Product is approved during which such Sales Representative Details a Collaboration Product.

     1.57“Sales Representative” means a pharmaceutical sales representative engaged or employed by either Party to conduct Detailing and other promotional efforts with respect to the Collaboration Products and who has been trained by Shire in accordance with the terms of this Agreement.

     1.58“Samples” means Collaboration Product packaged and distributed as a complementary trial for use with patients in the United States and in accordance with the

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Prescription Drug Marketing Act of 1987, as amended (the “PDM Act”) and free goods provided for this purpose through coupons or other mechanisms.

     1.59“Schedule Classification” means, with respect to a Collaboration Product, the [*] by [*] under the [*] of a particular [*] for such Collaboration Product, as communicated in writing either by (i) the [*] in the form of the [*] of a [*]any [*] as to [*], if the [*] is [*] , or (ii) the [*] by publication of a [*] for the Collaboration Product in the [*].

     1.60“Shire Background Know-How” means all Know-How Controlled by Shire, other than Shire Collaboration Know-How, that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention, to the extent such Know-How is included in a Development Plan or Marketing Plan that has been agreed to and approved by Shire. Notwithstanding anything herein to the contrary, Shire Background Know-How shall exclude Shire Background Patents.

     1.61“Shire Background Patent” means a Patent Controlled by Shire, other than a Shire Collaboration Patent, that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention, to the extent such Patent is included in a Development Plan that has been agreed to and approved by Shire.

     1.62“Shire Collaboration Know-How” means all Know-How that is developed by Shire or its Affiliates during the Term pursuant to this Agreement or the ROW Agreement and that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention. Notwithstanding anything herein to the contrary, Shire Collaboration Know-How shall exclude Shire Collaboration Patents.

     1.63“Shire Invention” means an Invention that is conceived, solely or jointly with a Third Party, by an employee or Affiliate of Shire or a person under an obligation of assignment to Shire.

     1.64“Shire Know-How” means the Shire Background Know-How and the Shire Collaboration Know-How. Notwithstanding anything herein to the contrary, Shire Know-How shall exclude Shire Patents.

     1.65“Shire Patents” means the Shire Background Patents and the Shire Collaboration Patents.

     1.66“[*]” means [*].

     1.67“Third Party” means any entity other than New River or Shire or their respective Affiliates.

     1.68“US Product Profit” means the profits or losses resulting from the Commercialization of Collaboration Products in the US Territory and shall be equal to Net Sales of Collaboration Products in the US Territory less Allowable Expenses less Phase IV and Related Expenses.

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     1.69“US Territory” means the United States of America, its territories and possessions.

     1.70“Valid Claim” means: (a) a claim of an issued Patent that has not (i) expired or been canceled, (ii) been declared invalid or unenforceable by a decision of a court or other appropriate body of competent jurisdiction, from which no appeal is or can be taken, (iii) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (iv) been abandoned, disclaimed or dedicated to the public; and (b) a claim included in a pending patent application that is being actively prosecuted in accordance with this Agreement and that has not been (i) canceled, (ii) withdrawn from consideration, (iii) finally determined to be unallowable by the applicable governmental authority (from which no appeal is or can be taken), or (iv) abandoned or disclaimed. Notwithstanding the foregoing clause (b), in the event that a pending claim in a pending patent application is rejected and does not issue in an issued Patent within [*] after the earliest date from which such claim was originally presented, such a pending claim will not be a Valid Claim, unless and until such pending claim subsequently issues in an issued Patent, at which time such claim may again be a Valid Claim as of the date of issuance of such Patent, if such claim also meets the requirements of this Section 1.70.

Interpretation. Unless the context of this Agreement otherwise requires, (a) words of one gender include the other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby,” and other similar words refer to this entire Agreement; and (d) the terms “Article” and “Section” refer to the specified Article and Section of this Agreement. Whenever this Agreement refers to a number of days, unless otherwise specified, such number shall refer to calendar days.

Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

Definition	Section
Agreement	Preamble
Benefit Plans	Section 4.9.7
Breaching Party	Section 13.2.1
Confidential Information	Section 10.1.1
Contractors	Section 12.1.3(d)(i)
Co-Promote Product	Section 5.5
Co-Promotion Option	Section 5.1
Co-Promotion Period	Section 5.3
DDMAC	Section 3.3.3(c)
Developing Party	Section 3.6.5
Development Plan	Section 3.2.1
Disclosing Party	Section 10.1.1
Dollars	Section 17.7
Effective Date	Recitals
Existing NDA	Section 10.6
GAAP	Section 1.42
Hatch-Waxman Certification	Section 11.6

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Definition	Section
Indemnification Claim Notice	Section 15.2
Indemnified Party	Section 15.2
Indemnifying Party	Section 15.2
Indemnitee	Section 15.2
Indemnitees	Section 15.2
Invoiced Amount	Section 1.42
January Agreement	Recitals
JDC	Section 2.2.1
JIPC	Section 2.5.1
JMC	Section 2.3.1
Joint Collaboration Patents	Section 11.1.1
Joint Press Release	Section 10.2
JSC	Section 2.4.1
Material Breach	Section 13.2.1
NDA	Section 1.25
New River	Preamble
New River Collaboration Patents	Section 11.3.1
New River Marks	Section 11.9.3
New River Report	Section 7.4.3(a)
Notice of Termination For Material Breach	Section 13.3.3
Notifying Party	Section 13.2.1
Parties	Preamble
Party	Preamble
[*]	Section 9.8
PDM Act	Section 1.58
[*]	Section 3.3.2
[*] Opt-In Right	Section 3.6.5
Prior Consultants	Section 10.6
Product Claim	Section 15.8.2
Purchase Interest	Section 13.3.5(a)
Purchase Notice	Section 13.3.5
Purchase Price	Section 13.3.5(a)
Receiving Party	Section 10.1.1
Recovery	Section 11.5.2(c)(iv)
Representatives	Section 16.1
Required Studies	Section 3.3.2
ROW Agreement	Recitals
Shared Expenses	Section 3.7.1
Shire	Preamble
Shire Collaboration Patents	Section 11.3.2
Shire Marks	Section 11.9.3
Shire Report	Section 7.4.3(b)
SNDA	Section 1.25
Term	Section 13.1

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Definition	Section
Third Party Claim	Section 15.1.1
Third Party Manufacturers	Section 2.4.2(a)
Unilateral Product	Section 3.6.5
Withholding Taxes	Section 8.5.1
Working Group	Section 2.6.4
$	Section 17.7

ARTICLE 2
MANAGEMENT OF COLLABORATION

     2.1General. The general purpose of the collaboration described in this Agreement will be to Develop and Commercialize Collaboration Products. The Parties desire to establish four (4) specialized committees to oversee the Parties’ collaboration under this Agreement and to facilitate communications between the Parties with respect to the Development, Commercialization, Manufacturing and intellectual property strategy of Collaboration Products hereunder and, where applicable, in the ROW Territory. Each of such Committees shall have the responsibilities and authority allocated to it in this Article 2. Each of the Committees shall have the obligation to exercise its authority consistent with the respective purpose for such Committee as stated herein and any such decisions shall be made in good faith. For the avoidance of doubt, the Committees described herein are the same committees as are described in the ROW Agreement, and each such Committee will have the responsibilities and authority set forth in this Agreement and in the ROW Agreement (with the exception of the JMC, which has no authority with respect to the ROW Territory).

     2.2Joint Development Committee (JDC).

          2.2.1Formation and Purpose. Promptly following the Effective Date, the Parties shall create a joint development committee (the “JDC”) to oversee the Development of Collaboration Products hereunder. The purposes of the JDC shall be (a) to determine the Development strategy for the Collaboration Products in the US Territory and Major EU Markets (as defined in the ROW Agreement), (b) to facilitate the management and implementation of the Parties’ Development activities hereunder, and (c) to approve plans and budgets for the Development by New River of Collaboration Products for ADHD in the US Territory. The JDC shall have the membership and shall operate by the procedures set forth in Section 2.6.

          2.2.2Specific Responsibilities of the JDC. In addition to its overall responsibilities described in Section 2.2.1, subject to Section 2.7.1, the JDC shall, in particular:

               (a)select Collaboration Products for research and Development under this Agreement in the US Territory and Major EU Markets;

               (b)prepare, approve and amend each Development Plan (including regulatory submission strategies and plans) for Collaboration Products in the US Territory and the Major EU Markets;

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               (c)monitor the progress of the activities undertaken by the Parties pursuant to each Development Plan;

               (d)review and approve proposals from the Parties to Develop Improvements and/or Combination Products;

               (e)coordinate and oversee the Parties’ Regulatory Approval submission plans in the US Territory;

               (f)design and approve all clinical trials of Collaboration Products proposed to be conducted anywhere in the world for consistency and efficiency, including without limitation by creating the protocols, defining the end points, and selecting the primary investigators for such trials;

               (g)have primary responsibility for establishing the objectives for all Phase IV Clinical Trials of Collaboration Products proposed to be conducted for the US Territory, including without limitation by creating the protocols, defining the end points, and selecting the primary investigators for such trials;

               (h)manage the flow of information with respect to Development being conducted for each Collaboration Product;

               (i)review and approve the statistical analysis plans and protocols for all Collaboration Product clinical studies conducted worldwide, and any investigator’s brochure(s) and revisions thereto;

               (j)work together with the other Committees during the Development of Collaboration Products to assure a smooth transition from Development of such Collaboration Product to Commercialization of such Collaboration Product;

               (k)review and approve compliance plans whereby the Parties prepare for or participate in a Governmental Authority inspection of the preclinical or clinical data or preclinical sites/clinical sites or laboratories; and

               (l)review and approve pharmacovigilance plans.

     2.3Joint Marketing Committee (JMC).

          2.3.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint marketing committee (the “JMC”), which shall oversee the Commercialization of Collaboration Products in the US Territory, including the marketing, sales and distribution of Collaboration Products in such territory. The JMC shall have the membership and shall operate by the procedures set forth in Section 2.6.

          2.3.2Specific Responsibilities of the JMC. In addition to its overall responsibilities described in Section 2.3.1, subject to Section 2.7.2, the JMC shall, in particular:

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               (a)prepare, approve and amend the Marketing Plan for Collaboration Products in the US Territory;

               (b)monitor the progress of the activities undertaken by the Parties pursuant to the Marketing Plan for the US Territory;

               (c)manage the flow of information with respect to Commercialization activities in the US Territory for each Collaboration Product;

               (d)coordinate and oversee the Parties’ plans for labeling and selecting trademarks for Collaboration Products in the US Territory;

               (e)approve packaging designs, and plan and oversee non-independent educational and professional symposia, and speaker and peer-to-peer activity programs, for the Collaboration Products in the US Territory;

               (f)discuss and suggest a range of suggested prices at which Collaboration Products will be sold to unaffiliated Third Parties in the US Territory and any discount strategies for Collaboration Products in the US Territory; provided that nothing contained herein, except as set forth in Section 4.2.2, shall limit or in any way restrict Shire from having the final decision on setting the price at which a Collaboration Product is sold; and

               (g)recommend whether to seek new indications, formulations or uses for Collaboration Products in the US Territory, such as for Collaboration Product life cycle management, including the Development and Commercialization of an authorized generic of any Collaboration Product, for approval by the JDC.

     2.4Joint Supply Committee (JSC).

          2.4.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint supply committee (the “JSC”) to facilitate the management and implementation of the Parties’ activities with regard to the Manufacture and supply of Collaboration Products worldwide. The JSC shall have the membership and shall operate by the procedures set forth in Section 2.6.

          2.4.2Specific Responsibilities of the JSC. In addition to its overall responsibilities described in Section 2.4.1, and subject to the provisions of Section 2.7.3 and Article 6, the JSC shall, in particular:

               (a)select which Party and/or Third Party(ies) to engage for the Manufacture and supply of Collaboration Products and components thereof (“Third Party Manufacturers”), oversee auditing of Third Party Manufacturers, and approve contracts governing such Manufacture and supply;

               (b)delineate requirements and responsibilities for development and licensure of manufacturing processes and facilities for Collaboration Products and for worldwide supply of Collaboration Products;

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     (c)jointly develop a Manufacturing strategy for the US Territory and the ROW Territory to enable development and licensure of manufacturing processes and facilities for Collaboration Products that includes all aspects of Manufacture and release, including but not limited to formulations, intermediate, dosage form, devices, product characterization studies, test methods and process validation studies, stability studies and Manufacturing plans and forecasts and the implementation of Manufacturing Improvements;

     (d)determine Manufacturing plans and budgets, including timelines and inventory strategies, and allocate responsibilities for and oversee the implementation of such plans in accordance with this Agreement;

     (e)oversee and approve process development plans prior to the Manufacture of registration batches of Collaboration Products;

     (f)oversee and approve plans to support Manufacture of commercial supply of Compound and Collaboration Products;

     (g)review quality assurance efforts, including but not limited to those efforts with respect to the establishment of specifications and quality standards for Collaboration Products;

     (h)review and coordinate the drafting and contents of the Chemistry, Manufacturing and Controls section of a Drug Approval Application for Collaboration Products;

     (i)review and approve technology transfer plans for any changes in Manufacturing sites, testing sites, and responsibilities in the supply chain for Collaboration Products, it being understood that decisions regarding the selection of which of a Party’s own Manufacturing and testing sites shall be used to manufacture any component of a Collaboration Product, if a Party Manufactures any component of a Collaboration Product pursuant to this Agreement or any related supply agreement, shall remain in the sole control of such Party;

     (j)prepare for regulatory inspections and ensure adherence to compliance standards with respect to Collaboration Products;

     (k)ensure that future logistical strategies and capacity planning are consistent with the forecasts provided in the Marketing Plan for the US Territory, and the corresponding plans for the ROW Territory, as well as inventory levels for Collaboration Products;

     (l)review quality-related issues concerning the Collaboration Products or any component thereof; and

     (m)review and approve compliance plans whereby the Parties prepare for or participate in a Governmental Authority inspection of the Manufacturing or testing site of the Compound.

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     2.5Joint Intellectual Property Committee (JIPC).

          2.5.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint intellectual property committee (the “JIPC”) to facilitate the exchange of information between the Parties to the extent required by this Agreement regarding the prosecution, maintenance and enforcement of the Licensed Patents, Licensed Know-How, Shire Collaboration Patents, Shire Collaboration Know-How, and Joint Inventions. The JIPC shall have the membership and shall operate by the procedures set forth in Section 2.6.

          2.5.2Specific Responsibilities of the JIPC. In addition to its overall responsibilities described in Section 2.5.1, subject to Section 2.7.4 and Article 11, the JIPC shall, in particular:

               (a)Exchange information between the Parties regarding the Parties’ activities under this Agreement relating to the filing, prosecution, maintenance and enforcement of the Licensed Patents, Licensed Know-How, Shire Collaboration Patents and Shire Collaboration Know-How; and

               (b)Consult regarding the filing, prosecution, maintenance and enforcement of Joint Collaboration Patents and Joint Inventions.

     2.6General Committee Membership and Procedures.

          2.6.1Membership. For the JDC, JMC, JSC and JIPC, each Party shall designate an equal number of representatives who are employees of such Party or an Affiliate of such Party (not to exceed three (3) for each Party) with appropriate expertise to serve as members of such Committee; provided that a Party may designate outside legal counsel as a representative to the JIPC. Each representative may serve on more than one Committee as appropriate in view of the individual’s expertise. Each Party may replace its Committee representatives at any time upon written notice to the other Party. Each Committee shall have co-chairpersons. New River and Shire shall each select from their representatives a co-chairperson for each of the Committees. The co-chairpersons of each Committee shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting of such Committee, and preparing and issuing minutes of each meeting within thirty (30) days thereafter; provided, that a Committee co-chairperson shall call a meeting of the applicable Committee promptly upon the written request of the other co-chairperson to convene such a meeting. Such minutes will not be finalized until both chairpersons review and confirm the accuracy of such minutes in writing.

          2.6.2Meetings. Each Committee shall hold meetings at such times as it elects to do so, but in no event shall such meetings be held less frequently than once every four (4) months. Meetings of any Committee may be held in person or by means of telecommunication (telephone, video, or web conferences); provided, that at least one meeting per year will be held in person. The Parties will alternate in designating the location for in-person meetings, with New River selecting the first meeting location. Other employees of each Party or any of its Affiliates involved in the Development, Manufacture or Commercialization of Collaboration Products may attend meetings of such Committee as nonvoting participants, and, with the

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consent of each Party, consultants, representatives, or advisors involved in the Development, Manufacture or Commercialization of Collaboration Products may attend meetings of such Committee as nonvoting observers; provided, that such Third Party representatives are under obligations of confidentiality and non-use applicable to the Confidential Information of each Party and that are at least as stringent as those set forth in Article 10. Each Party shall be responsible for all of its own expenses of participating in any Committee (including without limitation in any Working Group).

          2.6.3Meeting Agendas. Each Party will disclose to the other proposed agenda items along with appropriate information at least seven (7) Business Days in advance of each meeting of the applicable Committee; provided, that under exigent circumstances requiring Committee input, a Party may provide its agenda items to the other Party within a lesser period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of a specific agenda for such Committee meeting.

          2.6.4Working Groups. From time to time, each Committee may establish and delegate duties to other committees, sub-committees or directed teams (each, a “Working Group”) on an “as-needed” basis to oversee particular projects or activities. Each such Working Group shall be constituted and shall operate as the JDC, JMC, JSC or JIPC, as the case may be, determines; provided, that each Working Group shall have equal representation from each Party. Working Groups may be established on an ad hoc basis for purposes of a specific project for the life of a Collaboration Product, or on such other basis as the applicable Committee may determine. Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the Committee that established such Working Group. In no event shall the authority of the Working Group exceed that specified for the relevant Committee in this Article 2.

          2.6.5Limitations of Committee Powers. Each Committee shall have only such powers as are specifically delegated to it hereunder and shall not be a substitute for the rights of the Parties. Without limiting the generality of the foregoing, no Committee shall have any power to amend this Agreement. Any amendment to the terms and conditions of this Agreement shall be implemented pursuant to Section 17.1 below.

     2.7Committee Decision-Making. Subject to the terms of this Section 2.7, each Committee will take action by unanimous vote with each Party having a single vote, irrespective of the number of representatives actually in attendance at a meeting, or by a written resolution signed by the designated representatives of each of the Parties. If a Committee is unable to reach unanimous consent on a particular matter within thirty (30) days of its initial consideration of such matter, then either Party may provide written notice of such dispute to the Chief Executive Officer of the other Party. The Chief Executive Officers (or their respective designees, provided that each such designee is not a member of the applicable Committee and occupies a position senior to the positions occupied by the applicable Party’s members of such Committee) of each of the Parties will meet at least once in person or by means of telecommunication (telephone, video, or web conferences) to discuss the dispute and use their good faith efforts to resolve the dispute within thirty (30) days after submission of such dispute to such officers. If any such dispute is not resolved by the Chief Executive Officers or their designees within thirty (30) days

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after submission of such dispute to such officers, then the Chief Executive Officer or designee of the Party specified in Section 2.7.1, 2.7.2, or 2.7.3, as applicable, shall have the authority to finally resolve such dispute acting in good faith.

          2.7.1JDC Authority.

               (a)If a dispute in the JDC is not resolved pursuant to Section 2.7 above and such dispute relates primarily to the Development of Collaboration Products for ADHD in the US Territory (other than those relating to Phase IV Clinical Trials), the [*] or the [*], then the Chief Executive Officer of [*] shall have the authority to finally resolve such dispute.

               (b)Notwithstanding anything to the contrary in subsection (a):

                    (i)If a dispute in the JDC is not resolved pursuant to Section 2.7 above and such dispute (A) does not relate primarily to any of the activities specified in subsection (a) above (including, without limitation [*] the [*] of [*] for [*] in the [*] or for any [*] in the [*] for [*] in the [*] or [*] or (B) relates primarily to [*] other than the [*] by [*] pursuant to [*] for which [*] has not [*] at the [*] or [*] the [*] to [*] of any [*] or [*], then the Chief Executive Officer of [*] shall have the authority to finally resolve such dispute.

                    (ii)If [*] for the first Collaboration Product for ADHD on or before [*], then, until such time as [*], the Chief Executive Officer of [*] shall have the authority to finally resolve a dispute that relates primarily to the Development of Collaboration Products for ADHD in the US Territory.

          2.7.2JMC Authority. If a dispute in the JMC is not resolved pursuant to Section 2.7 above, then the Chief Executive Officer of [*] shall have the authority to finally resolve such dispute.

          2.7.3JSC Authority. If a dispute in the JSC is not resolved pursuant to Section 2.7 above, then the Chief Executive Officer of [*] shall have the authority finally resolve such dispute; provided, however, that with respect to any matter over which [*] has approval (or other consent right) pursuant to Article 6 (including, without limitation, Exhibit D), such resolution shall require the approval (or other consent) of [*] as set forth in Article 6 (including, without limitation, Exhibit D).

          2.7.4JIPC Authority. If a dispute in the JIPC is not resolved pursuant to Section 2.7 above, then [*] shall have the authority to finally resolve such dispute. The JIPC shall not have decision making authority under this Agreement and any dispute in the JIPC shall be resolved in accordance with the terms of Article 16.

          2.7.5Casting Vote. Neither Party shall exercise its right to finally resolve a dispute at a Committee in accordance with this Section 2.7 in a manner that excuses such Party from any of its obligations specifically enumerated under this Agreement.

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ARTICLE 3
DEVELOPMENT AND REGULATORY RESPONSIBILITIES

     3.1Overview. Subject to the roles of the various Committees described in Article 2 and the terms of this Agreement, the general allocation of responsibility for the Development and Regulatory Approval of Collaboration Products under this Agreement is as follows:

               (a)New River will be primarily responsible for the Development of the Collaboration Product for ADHD in the US Territory; and

               (b)the JDC will determine which Party will be primarily responsible for the Development of Collaboration Products for non-ADHD indications in the US Territory.

     3.2Development Plans.

          3.2.1Scope. The Development of each Collaboration Product in the US Territory under this Agreement shall be governed by a development plan (each, a “Development Plan”). Each Development Plan shall be developed in good faith in accordance with a Party’s standard practices with the overall objective of achieving the commercial potential of such Collaboration Product. Each Development Plan shall describe the proposed overall program of Development for the Collaboration Product for each indication in the US Territory, including preclinical studies, toxicology, formulation, process development, clinical studies, pediatric exclusivity plans and regulatory plans and other elements of obtaining Regulatory Approval in each applicable country, as well as timelines to key Governmental Authority meetings, Drug Approval Applications and Regulatory Approvals. Each Development Plan shall include a summary of estimated Development Expenses of the program expected during the Development process through obtaining Regulatory Approval for each proposed indication and route of delivery, to the extent such expenses are to be shared by the Parties under the terms of this Agreement, and shall also include a detailed budget for all such shared Development activities proposed for the following calendar year.

          3.2.2Preparation and Approval of Development Plans for the US Territory. Each Development Plan for the US Territory, together with any updates thereto, shall be prepared and approved as follows:

               (a)Initial Development Plans for the Collaboration Product for ADHD in the US Territory. The initial Development Plan for all Development activities for the Collaboration Product for ADHD in the US Territory [*] is attached to this Agreement as Exhibit C. Within [*] after the Effective Date, New River will prepare the initial Development Plans for the first Collaboration Products for ADHD [*].

               (b)Development Plans for Improvements and Combination Product in the US Territory. When an Improvement and/or Combination Product is added as a Collaboration Product pursuant to Section 3.6, within sixty (60) days following the date of such inclusion, the Development Plan for the Development of any such Improvement and/or Combination Product in the US Territory will be prepared by the Party designated by the JDC, and submitted to the JDC for its review and approval of such Development Plan.

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               3.2.3Updates to the Development Plans. As early as necessary in each year beginning with the first full calendar year after the Effective Date, the Party responsible for preparing the initial Development Plan for a Collaboration Product shall update and prepare the Development Plan for any such Collaboration Product for the following calendar year to take into account completion, commencement or cessation of Development activities not contemplated by the then-current Development Plan, and submit such proposed Development Plan to the JDC no later than September 30 of such year for review and approval.

               3.2.4Diligence. In addition to the specific diligence obligations of New River pursuant to Section 3.3.1, each of New River and Shire will use Diligent Efforts to carry out the activities for which it may agree to be responsible set forth in a Development Plan.

     3.3Development in the US Territory for ADHD.

          3.3.1Diligence. New River will use Diligent Efforts to carry out the activities set forth in the Development Plan for Collaboration Products for ADHD in the US Territory and to seek Regulatory Approval, [*], for ADHD in the US Territory in accordance with the Development Plan and with the terms of this Agreement.

          3.3.2Costs of Development. Notwithstanding Section 3.7 below, (a) New River shall bear all Development Expenses that are related to Developing and obtaining Regulatory Approval for the first Collaboration Products for ADHD [*] in the US Territory, (b) New River shall be responsible for all Phase IV and Related Expenses for all activities that are required in connection with receiving Regulatory Approval by FDA or other Governmental Authorities in the US Territory with respect to such Collaboration Products (“Required Studies”), and (c) if there are any additional studies necessary to obtain [*] for the Collaboration Product for ADHD (“[*]”), New River shall be responsible for all such Development Expenses and/or Phase IV and Related Expenses related to such [*].

          3.3.3Regulatory Activities.

               (a)Unless otherwise agreed in writing by the Parties, New River, subject to Section 3.3.3(c), shall be responsible for preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the US Territory in accordance with the applicable Development Plan, including preparing all reports necessary as part of a Drug Approval Application. All such Drug Approval Applications shall be filed in the name of New River. Each Party shall designate an alliance manager to coordinate and review filings and activities of the Parties in the US Territory described in this Section 3.3.3. New River shall provide Shire with drafts of any material documents or correspondence to be submitted to any Governmental Authority in the US Territory that pertains to the Compound and/or Collaboration Products, including Drug Approval Applications. New River will consult in advance with Shire with respect to any substantive or material filings to be made by New River in accordance with the terms of this Section 3.3.3(a), including Drug Approval Applications, and shall consider in good faith any comments Shire may have with respect to any such filings. New River shall permit Shire access to and grant Shire the right to reference and use, for purposes of the Collaboration Products, all data, regulatory filings and regulatory communications associated with any submissions for Regulatory Approval or other issues associated with any Collaboration

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Product, that is or would be relevant to Shire’s Development or Commercialization of a Collaboration Product in the US Territory. To the extent that any such data, regulatory filings or regulatory communications are held by a Third Party, then New River shall arrange direct access to the portions of such data, regulatory filings or regulatory communications that are relevant to the activities of Shire that are contemplated by this Agreement. Any information obtained by a Party pursuant to this Section 3.3.3(a) shall be deemed Confidential Information for purposes of Article 10. Notwithstanding the foregoing, Shire shall be the responsible Party for preparing and filing Drug Approval Applications and seeking Regulatory Approvals and interacting with the Governmental Authorities in the US Territory for any Unilateral Product being Developed by Shire under Section 3.6.5.

               (b)New River shall provide Shire with reasonable advance notice of any meeting or substantive or material conference call with any Governmental Authority relating to any Drug Approval Application or Regulatory Approval for Collaboration Products in the US Territory, and Shire shall have the right to participate in any such meeting or material conference call as well as have the right to participate in all substantive or material preparation, internal caucus, and debriefing sessions related to such meetings or conference calls. If it is not possible to provide Shire notice of any such meeting or conference call, New River shall immediately thereafter provide Shire with a detailed summary of any such meeting or conference call. New River shall promptly, but in no event more than two (2) Business Days after receipt, furnish Shire with copies of all substantive or material documents or correspondence New River has had with or receives from any Governmental Authority, and contact reports concerning substantive or material conversations or substantive meetings with any Governmental Authority, in each case relating to any Drug Approval Application or Regulatory Approval (including without limitation any minutes from a meeting with respect thereto).

               (c)Shire shall be primarily responsible for interfacing, corresponding, making required filings and meeting with the Division of Drug Marketing, Advertising and Communications of the FDA (“DDMAC”) with respect to the marketing and promotion of the Collaboration Products in the US Territory. New River will provide a letter to the FDA (to be prepared with assistance of Shire) notifying the FDA that Shire has been designated as the agent of New River upon whom all DDMAC communications should be made on behalf of New River with respect to Collaboration Products in the US Territory. Shire, through the JMC, shall provide New River with drafts of any substantive or material documents or correspondence to be submitted to DDMAC in the US Territory that pertains to a Collaboration Product. Shire, through the JMC, will consult in advance with New River with respect to any substantive or material filings to be made by Shire in accordance with the terms of this Section 3.3.3(c), and shall consider in good faith any comments New River may have with respect to any such filings. Shire shall provide New River with reasonable advance notice of any meeting or substantive or material conference call with DDMAC relating to a Collaboration Product in the US Territory, and New River shall have the right to participate in any such meeting or substantive or material conference call as well as have the right to participate in all substantive or material preparation, internal caucus, and debriefing sessions related to such meetings or conference calls. If it is not possible to provide New River notice of any such meeting or conference call, Shire shall immediately thereafter provide New River with a detailed summary of any such meeting or conference call. Shire shall promptly, but in no event more than two (2) Business Days after receipt, furnish New River with copies of all substantive or material documents or

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correspondence Shire has had with or receives from DDMAC, and contact reports concerning substantive or material conversations or substantive or material meetings with DDMAC, in each case relating to a Collaboration Product (including without limitation any minutes from a meeting with respect thereto).

               (d)Within thirty (30) days after the Effective Date, New River shall provide to Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled as of the Effective Date with respect to the Collaboration Product, including any final versions of any study reports and any drafts then-outstanding of any study reports. Thereafter, New River shall provide to Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled with respect to the Collaboration Product as soon as reasonably practicable after such data or results become available or compiled, including any drafts and final versions of any study reports. All disclosures under this Section 3.3.3(d) shall be delivered in electronic format. For clarity, New River shall not be required to disclose New River’s proprietary Carrierwave^TM technology under this Agreement, except to the extent necessary for Shire to exercise its rights and perform its obligations under this Agreement or as otherwise specifically provided in this Agreement.

               (e)In the event that any Governmental Authority threatens or initiates any action to remove a Collaboration Product from the market in the US Territory, New River shall notify Shire of such communication immediately, but in no event later than one (1) Business Day, after receipt by New River. Either Party may decide, in good faith, to initiate a recall or withdrawal of Collaboration Product in the US Territory, in consultation with the JDC and JMC. Before Shire initiates a recall or withdrawal, and upon the request for a recall or withdrawal by either Party, the Parties shall promptly and in good faith discuss the reasons therefor and the allocation of the costs of any such recall or withdrawal. Under no circumstances shall either Party unreasonably object to a recall or withdrawal requested by the other Party, and neither Party shall have any right to object to a recall or withdrawal requested by the other Party for failure of a Collaboration Product to meet the applicable specifications, for material safety concerns, or for the Manufacture of such Collaboration Product in a manner that does not comply with applicable Laws. In the event of any recall or withdrawal for Collaboration Products sold in the US Territory, Shire shall implement any necessary action, with assistance from New River as reasonably requested by Shire.

     3.4Right of Reference to the ROW Territory. New River shall have the right of cross-reference to all Drug Approval Applications filed by Shire or its Affiliates in the ROW Territory for the purpose of prosecuting Drug Approval Applications in the US Territory, and Shire shall, or shall cause its Affiliates to, take all such reasonable actions to allow such cross-reference.

     3.5Reporting. At each meeting of the JDC and the JSC, each Party will present a report describing the Development and Manufacturing activities performed by such Party with respect to Collaboration Products in the US Territory since the last such report.

     3.6Development in the US Territory for Indications other than ADHD. In the event that Collaboration Products are to be Developed hereunder in the US Territory for indications other than ADHD, the JDC will designate a lead Development Party for such

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Development program in the applicable Development Plan, subject to the terms and conditions of this Section 3.6. For the purposes of clarity, [*] shall have the casting vote on the JDC as to whether a Collaboration Product is to be Developed in the US Territory for non-ADHD indications, including all Improvements or Combination Products; provided that [*] will not be obligated to serve as the lead Development Party without its consent.

          3.6.1Submission of Proposal to JDC. If, at any time, Shire or New River desires to Develop a Collaboration Product for a non-ADHD indication, including an Improvement or Combination Product, for Commercialization in the US Territory, such Party shall submit to the JDC a proposal for such Development. Such proposal shall contain, at a minimum, all material information that would otherwise be included in a Development Plan. Each proposal for the Development of a Collaboration Product for a non-ADHD indication, including an Improvement or Combination Product, for Commercialization in the US Territory shall, among other things:

               (a)identify all major Development tasks to be accomplished prior to submission of filings for Regulatory Approvals;

               (b)identify key Development objectives, expected associated resources, risk factors, timelines, Go/No Go decision points and relevant decision criteria and, where appropriate, decision trees; and

               (c)include a reasonably detailed description and budget for the Development activities that are expected to be performed.

          3.6.2JDC Agreement to Develop. If the JDC agrees to the Development of a Collaboration Product for a non-ADHD indication, including an Improvement and/or Combination Product, for Commercialization in the US Territory, it shall select the lead Party for such Development. Once the lead Party is selected, that Party will be responsible for the Development of the applicable Collaboration Product for the specified indication, including the design and conduct of clinical trials for such Collaboration Product, subject in any event to the oversight and authority of the various Committees. The Development Expenses incurred in connection with the performance of such Development program will be shared [*] under the terms of Section 3.7 below. Except as set forth in Section 3.3.3(a), New River shall be responsible for preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the US Territory, whether or not it is the lead Development Party, including preparing all reports necessary as part of a Drug Approval Application, and all such Drug Approval Applications shall be filed in the name of New River.

          3.6.3New River Proposal. Except as provided in this Section 3.6.3, if New River proposes the Development of an Improvement and/or Combination Product to the JDC, but Shire does not vote in favor of such proposal, such Improvement and/or Combination Product shall not be Developed. Notwithstanding the foregoing, after receipt of Regulatory Approval for the first Collaboration Product for ADHD [*], New River may propose a Combination Product that includes an active pharmaceutical ingredient approved in the US Territory for a [*], and the Parties shall develop a plan to determine proof of concept and to generate pharmacokinetic and toxicity data on such proposed Combination Product and shall use Diligent Efforts to implement

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such plan. Based on such data, the JDC shall determine whether to Develop such Combination Product. The JDC shall make such determination within a reasonable time following receipt of such data, but in any event within [*] of the commencement of activities pursuant to the applicable plan. If the JDC determines not to Develop such Combination Product, then New River may elect to conduct the Development of such Combination Product itself, pursuant to the terms of Section 3.6.5.

          3.6.4Shire Proposal. If Shire proposes the Development of a Collaboration Product for any indication other than the first Collaboration Products for ADHD in each of Adults, Adolescents and Children, including an Improvement and/or Combination Product, to the JDC, but New River does not vote in favor of such proposal, then Shire shall have the right to conduct the Development of such Collaboration Product without New River, pursuant to the terms of Section 3.6.5.

          3.6.5Unilateral Development. The Party independently developing a Collaboration Product under Section 3.6.3, in the case of New River, or Section 3.6.4, in the case of Shire (the “Developing Party”), shall have the right unilaterally to conduct the Development of the applicable Collaboration Product (each such Collaboration Product, a “Unilateral Product”); provided, however, that such right shall be subject to the Developing Party conducting such Development in a manner that would not adversely affect in any significant way any then existing Collaboration Product being Developed or Commercialized under this Agreement. For any Unilateral Product, the non-Developing Party shall have the opportunity to opt back into the Development program and participate in the Development upon the [*] for any such Unilateral Product (a “[*] Opt-In Right”). At least [*] prior to [*] of such [*], the Developing Party shall provide to the other Party an updated proposal that contains, at a minimum the information set forth in Section 3.6.1, to enable such other Party to determine if it desires to exercise its [*] Opt-In Right. Such other Party shall have [*] after receipt of such updated proposal to exercise its [*] Opt-In Right. If such other Party exercises its [*] Opt-In Right, then such other Party shall be required to pay the Developing Party, within [*] days after such exercise, an amount equal to [*] in respect of the Development of the applicable Unilateral Product prior to such exercise, and thereafter the [*]. If the non-Developing Party does not exercise its [*] Opt-In Right but Regulatory Approval is obtained in the US Territory for the Unilateral Product, then the non-Developing Party shall be required to pay the Developing Party, within [*] of receipt of such Regulatory Approval, an amount equal to [*] in respect of such Unilateral Product. In order to conform with the definition of [*] in Article 1 above, for purposes of this Section 3.6.5 only, all [*] in connection with the Development of a Unilateral Product will be treated as if such [*] in connection with a Development Plan.

     3.7Shared Expenses.

          3.7.1Except as otherwise provided in Sections 3.3.2 and 3.6.5, the Parties will share Development Expenses (“Shared Expenses”) as follows:

               (a)any Development Expenses incurred by either Party that, as determined by the JDC, have worldwide application to the Development or Commercialization of the Collaboration Products will be borne [*] by Shire and [*] by New River, regardless of whether such work is conducted inside or outside of the United States; and

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               (b)any Development Expenses incurred by either Party for the Development of Collaboration Products to be Commercialized in the US Territory and which do not have worldwide application, will be borne [*] by Shire and [*] by New River.

          3.7.2Quarterly Reconciliation of Development Expenses.

               (a)Each Party shall calculate and maintain records of Shared Expenses incurred by it in accordance with procedures to be agreed upon between the Parties.

               (b)Within five (5) Business Days following the end of each calendar quarter, Shire shall submit to New River a written report setting forth in reasonable detail, separately with respect to each Collaboration Product, the Shared Expenses it has incurred in such calendar quarter.

               (c)Within five (5) Business Days following the end of each calendar quarter, New River shall submit to Shire a written report setting forth in reasonable detail, separately with respect to each Collaboration Product, the Shared Expenses it has incurred in such calendar quarter.

               (d)Within twenty-five (25) days following the end of each calendar quarter, Shire shall submit to New River a written report setting forth in reasonable detail the calculation of all Shared Expenses for each Collaboration Product, and the calculation of any net amount owed by New River to Shire or by Shire to New River, as the case may be, in order to ensure the appropriate sharing of Shared Expenses in accordance with the provisions of Section 3.7. The net amount payable shall be paid by Shire or New River, as the case may be, within thirty five (35) days following the end of each calendar quarter; provided, that, in the event of a dispute, the disputing Party shall pay the amount not in dispute and provide written notice within five (5) Business Days after receipt of the written report in question to the other, specifying such dispute and explaining the basis of the dispute. New River and Shire shall promptly thereafter meet and negotiate in good faith a resolution to such dispute. If such dispute is not resolved within forty-five (45) days after delivery of a notice of dispute with respect thereto to the other Party, the disputing Party may audit the other Party pursuant to the provisions of Section 8.6.2.

     3.8Use of Third Parties. Either Party may retain Third Parties to perform Development activities, subject to the terms provided in this Section 3.8 and Section 9.3; provided that prior to either Party subcontracting any Development for the US Territory it shall receive the prior written approval of the other Party, such approval not to be unreasonably withheld, conditioned, or delayed. Each Party shall remain liable for the performance of its obligations hereunder which it delegates to such Third Parties. Shire acknowledges and agrees that New River is currently subcontracting or intends to subcontract certain of the Development in the US Territory to those subcontractors for the designated activities set forth on Schedule 3.8. New River will not need the prior written approval of Shire to utilize such subcontractors on Schedule 3.8 for the indicated activities. Any Third Parties performing Development activities hereunder shall be subject to confidentiality and non-use obligations at least as stringent as those set forth in Article 10 and must comply with the terms of Article 11.

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     3.9Right to Audit. Each Party shall use Diligent Efforts to ensure that the other Party’s authorized representatives, and shall ensure that Governmental Authorities, in both cases to the extent permitted by applicable Law, may, during regular business hours, (a) examine and inspect its facilities or, subject to any Third Party confidentiality restrictions or obligations, the facilities of any subcontractor or any investigator site used by it in the performance of Development of a Collaboration Product for Commercialization in the US Territory, including those sites in the ROW Territory if the Collaboration Product Developed at such site in the ROW Territory will be Commercialized in the US Territory, and (b) subject to applicable Law and any Third Party confidentiality restrictions or obligations, inspect and copy all data, documentation and work products relating to the activities performed by it, the subcontractor or investigator site, including, without limitation, the medical records of any patient participating in any clinical study. This right to inspect and copy all data, documentation, and work products relating to a Collaboration Product for Commercialization in the US Territory, including those sites in the ROW Territory if the Collaboration Product Developed at such site in the ROW Territory will be Commercialized in the US Territory, may be exercised at any time during the term of this Agreement (subject to each Party’s record retention policies then in effect), or such longer period as shall be required by applicable Law.

     3.10Assistance. Subject to the terms of this Article 3, each Party agrees to provide the other with all reasonable assistance and take all actions reasonably requested by the other Party that are necessary or desirable to enable the other Party to comply with any Law applicable to the Collaboration Products, including, but not limited to, meeting, reporting and other obligations to maintain and update any Regulatory Approvals for the Collaboration Products.

     3.11Compliance with Laws. Each Party or its permitted Third Party contractors shall perform its responsibilities under this Article 3, including those set forth in a Development Plan, in accordance with all applicable Laws, including without limitation cGLPs, cGCPs and cGMPs.

ARTICLE 4
COMMERCIALIZATION OF COLLABORATION PRODUCTS

     4.1Principles of Commercialization. Shire will be solely responsible for Commercializing Collaboration Products in the US Territory during the Term; provided, however, that, during the Co-Promotion Period, Article 5 will apply to the Parties’ Co-Promotion of the applicable Collaboration Products in the US Territory.

     4.2Sales and Distribution of Collaboration Products to Third Parties.

          4.2.1Terms of Sale to Third Parties. For each Collaboration Product, including all Improvements, Combination Products and Co-Promote Products, Shire shall be solely responsible for handling all returns, recalls, order processing, invoicing and collection, distribution, and inventory and receivables arising from sales to Third Parties. New River may not accept orders from a Third Party for a Collaboration Product or make sales for its own account (except to Shire) or for Shire’s account. If New River receives any order for a Collaboration Product, it shall refer such orders to Shire for acceptance or rejection. Subject to Section 4.2.2, Shire shall have the right and responsibility for establishing and modifying the terms and conditions with respect to the sale of all Collaboration Products in the US Territory,

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including any terms and conditions relating to or affecting the price at which the Collaboration Products will be sold, discounts available to managed care providers, any discount attributable to payments on receivables, distribution of the Collaboration Products, and credits, price adjustments, or other discounts and allowances to be granted or refused.

          4.2.2[*]. If Shire or its Affiliates or sublicensees sell a Collaboration Product to a Third Party, [*] and at a [*] Shire or its Affiliates or sublicensees for sales of such Collaboration Product [*], then Shire [*] in respect of such sale.

     4.3Marketing Plans and Budgets for the US Territory. Shire shall be responsible for developing a Marketing Plan for each Collaboration Product in the US Territory. Each Marketing Plan developed by Shire shall be adopted in good faith in accordance with Shire’s standard practices with the overall objective of achieving the commercial potential of such Collaboration Product. Each Marketing Plan shall be deemed Confidential Information of Shire.

          4.3.1Preparation of Initial Marketing Plan. Commencing [*] prior to the projected First Commercial Sale of a Collaboration Product, Shire will commence preparing an initial [*] Marketing Plan for the US Territory for such Collaboration Product for review and approval by the JMC; provided, however, promptly after the Effective Date, Shire will commence preparing the initial Marketing Plan for the first Collaboration Product for ADHD. As early as necessary in each calendar year thereafter, Shire shall amend and update each Marketing Plan for the US Territory for such Collaboration Products for submission of such proposed Marketing Plan for the US Territory to the JMC no later than September 30 of such year for review and approval.

          4.3.2Contents of Initial Marketing Plan. The initial Marketing Plan for each Collaboration Product shall set forth the strategy for the commercial launch of such Collaboration Product in the US Territory in a comprehensive plan that describes the Commercialization activities for such Collaboration Product (including advertising, education, planning, marketing, sales force training and allocation). Each initial draft Marketing Plan will contain such information as Shire believes necessary for the successful commercial launch of such Collaboration Product in the Field and in the US Territory and shall generally conform to the level of detail utilized by Shire in preparation of its own product plans.

     4.4Regulatory Obligations During Commercialization.

          4.4.1New River Responsibilities. Except as otherwise set forth in Sections 3.3.3(a) and 3.3.3(c), New River will maintain all regulatory filings and Regulatory Approvals in the US Territory for each Collaboration Product Developed pursuant to this Agreement, including all INDs and Drug Approval Applications. As between the Parties, New River will be solely responsible for all activities in connection with maintaining Regulatory Approvals required for the Commercialization of Collaboration Product in the US Territory, including communicating and preparing and filing all reports with the applicable Governmental Authorities, as described in further detail in and subject to Section 3.3.3.

          4.4.2Pharmacovigilance. Shire shall be responsible for all processing of information related to any adverse events, including, without limitation, any information

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regarding such adverse events that is received from a Third Party, related to a Collaboration Product after the First Commercial Sale of such Product. The Party conducting any clinical studies prior to such First Commercial Sale shall be responsible for all processing of information related to any adverse events associated with such studies. New River shall be responsible for all expedited and periodic reporting of such events to the FDA, all in accordance with 21 C.F.R. Sections 312.32 and 314.80. As soon as reasonably practicable following the date of this Agreement, the pharmacovigilance departments of each of New River and Shire shall meet and determine the approach to be taken for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Products, consistent with the provisions of this Section 4.4.2. Such approach shall be documented in a separate and appropriate written pharmacovigilance agreement between each of New River and Shire. Shire agrees to share relevant information it receives (either directly or indirectly) with New River in a timely manner so as to allow New River to comply with its responsibility to report pharmacovigilance information under this Section 4.4.2.

     4.5Diligence in Commercialization.

          4.5.1Diligence. Shire will use Diligent Efforts in the US Territory to launch a Collaboration Product after receiving all Regulatory Approvals for such Collaboration Product, and thereafter will use Diligent Efforts to Commercialize the Collaboration Product in the US Territory. With respect to the US Territory, Shire, and if applicable New River, will use Diligent Efforts to perform all activities set forth in the applicable Marketing Plan.

          4.5.2Details. Without limiting the generality of the foregoing, with respect to the first Collaboration Product Commercialized hereunder in the US Territory for ADHD, Shire will provide: (a) for a sales force of at least [*] Sales Representatives to promote such Collaboration Product [*] in the US Territory during the [*] following First Commercial Sale of such Collaboration Product in the US Territory; (b) for a sales force of at least [*] Sales Representatives to promote such Collaboration Product [*] in the US Territory during the next [*]; and (c) a sales force consistent with the then-applicable Marketing Plan thereafter. For the avoidance of doubt, if New River exercises its Co-Promotion Option, any Sales Representatives provided by New River to Co-Promote such Collaboration Product shall count towards the amounts set forth in this Section 4.5.2.

          4.5.3[*]. If a Collaboration Product for ADHD is, or is [*] to, the [*] product approved for ADHD and [*] that such Collaboration Product either (a) [*] products for ADHD, or (b) [*], then Shire will ensure that such Collaboration Product for ADHD is [*] of Shire in the US Territory that [*] formulated for [*]. If a Collaboration Product for ADHD does not originally [*] but the Parties are later able to [*], the provisions of this Section 4.5.3 shall be applicable.

     4.6Cost of Commercialization. In the US Territory, (a) each Party shall bear its own costs in connection with the Commercialization of Collaboration Products, subject to the payment provisions of Article 6 and the sharing and reconciliation provisions described in Section 7.4, and (b) [*] shall bear [*] of any Pre-Marketing Expenses incurred by the Parties, which shall be reported and reimbursed through the mechanisms set forth in Section 7.4.3.

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     4.7Use of Third Parties. Each Party covenants and agrees not to use any Third Parties to perform promotional activities for Collaboration Products in the US Territory without the prior written approval of the other Party, such approval not to be unreasonably withheld, conditioned, or delayed. If the Parties agree to engage any such Third Party sales force, such Third Party sales force will be directed, trained and controlled by Shire.

     4.8Promotional Materials.

          4.8.1Creation of Promotional Materials. Shire will create and develop Promotional Materials for the US Territory in accordance with an applicable Marketing Plan. To the extent that Shire describes in any item of the Promotional Materials New River’s Carrierwave^TM proprietary technology, Shire shall include in such Promotional Materials the New River trademark for such technology. New River hereby grants Shire a royalty-free license for such purpose. To the extent Shire shall include such description and trademark in the Promotional Materials, Shire shall comply with New River’s then-current guidelines for trademark usage, a copy of which shall be provided to Shire from time to time. Shire shall provide samples of Promotional Materials for use in the US Territory to the JMC for review, prior to distributing such Promotional Materials for use by the Parties’ Sales Representatives in the US Territory.

          4.8.2Shire Ownership of Promotional Materials. Shire shall own all right, title and interest in and to any Promotional Materials relating to the Collaboration Products, including without limitation applicable copyrights and trademarks, but excluding trademarks owned by New River in accordance with Section 11.9, and New River hereby assigns all its right, title and interest to such Promotional Materials to Shire and agrees to execute all documents and take all actions as are reasonably requested by Shire to vest title to such Promotional Materials in Shire.

          4.8.3Use of Promotional Materials Exclusively for Collaboration Products. The Promotional Materials, and any aspects of those uniquely tied to the Collaboration Products, shall be used exclusively in connection with the Collaboration Products in accordance with the terms of this Agreement.

          4.8.4Retention of Rights. Shire and New River, or their respective Affiliates, shall retain, throughout the Term and following termination, all rights, including without limitation all copyrights and trademarks, to all of their respective programs and materials in all formats (print, video, audio, digital, computer, etc.) regarding sales training, patient education and disease management programs owned by them as of the Effective Date or developed by them during the Term but outside of this Agreement, regardless of the fact that such programs or materials are shared with the other Party, as well as any modifications of such programs or materials that they may develop in the future which are not specific to a Collaboration Product. In accordance with Section 4.8.2, Shire shall own any such modifications specific to a Collaboration Product.

     4.9Provisions Applicable to Sales Representatives. In the US Territory, Shire agrees with respect to itself and its Affiliates and their respective Sales Representatives, and if

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New River exercises its Co-Promotion Right, New River agrees with respect to itself and its Affiliates and their respective Sales Representatives, that:

          4.9.1No Changes to the Promotional Materials. Each Party will instruct its Sales Representatives to use, and will monitor its Sales Representatives to ensure that such Sales Representatives use, only Promotional Materials, Samples, and literature approved for use by Shire for the promotion of the Collaboration Product. Neither Party will misbrand, change, alter or adulterate any Promotional Material or Samples supplied to it for distribution or use by such Party or its Sales Representatives.

          4.9.2Monitoring of Sales Representatives. Each Party will instruct its Sales Representatives to do the following, and will monitor its Sales Representatives so that such personnel do, the following: (a) limit claims of efficacy and safety for the Collaboration Product to those that are consistent with approved promotional claims in, and not add, delete or modify claims of efficacy and safety in the promotion of the Collaboration Product in any respect from those claims of efficacy and safety that are contained in, the Marketing Plan for such Collaboration Product, with applicable Law, and with product labeling for the Collaboration Product as approved by the FDA; (b) not make any changes in Promotional Materials provided by Shire; (c) use Promotional Materials and Samples in a manner that is consistent with the Marketing Plan, with applicable Law, and with the product labeling for the Collaboration Product as approved by the FDA; and (d) promote the Collaboration Product in adherence in all material respects with applicable Laws, as well as the [*], the [*], the [*] for the [*] and any other [*] generally applicable to such Sales Representative.

          4.9.3PDM Act and Controlled Substances Act. Each Party shall use Samples in the US Territory strictly in accordance with the then-current applicable Marketing Plan and shall distribute Samples in full compliance with all applicable Laws, including the requirements of the PDM Act and the Controlled Substances Act. Specifically, each Party shall establish, maintain and adhere to written procedures to assure that such Party and its Sales Representatives comply with all requirements of the PDM Act and the Controlled Substances Act, as applicable. Such procedures shall include a requirement that each Party notify the other Party immediately upon learning that any Samples shipped by such Party have been lost or have not been received as scheduled. Each Party will maintain records as required by the PDM Act and all other Laws and shall allow representatives of the other Party to inspect such records on request. Upon reasonable advance notice to a Party, the other Party shall be entitled to conduct an inspection and audit of such Party’s Sample distribution practices by its Sales Representatives in the US Territory and any facilities where Samples are stored by such Party. Such inspection and audit shall be made in accordance with the applicable provisions of the PDM Act and with the provisions of this Agreement. The costs and expenses of conducting such audit shall be deemed a Marketing Expense.

          4.9.4Equal Opportunity Employer. Unless exempted from such compliance, each Party will comply with all applicable Laws in the hiring, employment, and discharge of all Sales Representatives. Each Party represents that such Party is an Equal Opportunity Employer and does not discriminate against any person because of race, color, creed, age, sex, sexual preference, marital status, or national origin.

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          4.9.5Compliance. Each Party will ensure that its Sales Representatives are informed of all applicable obligations and policies relating to the performance of this Agreement and are bound to comply with same.

          4.9.6Insurance. Each Party acknowledges and agrees that the other Party does not and will not maintain or procure any worker’s compensation, healthcare, or other insurance for or on behalf of the other Party’s Sales Representative, all of which shall be such Party’s sole responsibility.

          4.9.7No Participation in Benefit Plans. Each Party acknowledges and agrees that all Sales Representatives of such Party are not, and are not intended to be or be treated as, employees of the other Party or any of its Affiliates, and that such individuals are not, and are not intended to be, eligible to participate in any benefits programs or in any “employee benefit plans” (as such term is defined in section 3(3) of ERISA) that are sponsored by the other Party or any of its Affiliates or that are offered from time to time by the other Party or its Affiliates to their own employees (the “Benefit Plans”). All matters of compensation, benefits and other terms of employment for any such Sales Representatives shall be solely a matter between a Party and such individual. A Party shall not be responsible to the other Party, or to its Sales Representatives for any compensation, expense reimbursements or benefits (including, without limitation, vacation and holiday remuneration, healthcare coverage or insurance, life insurance, severance or termination of employment benefits, pension or profit-sharing benefits and disability benefits), payroll-related taxes or withholdings, or any governmental charges or benefits (including without limitation unemployment and disability insurance contributions or benefits and workmen’ compensation contributions or benefits) that may be imposed upon or be related to the performance by such Party and such individuals of this Agreement, all of which shall be the sole responsibility of such Party, even if it is subsequently determined by any court or governmental agency that any such individual may be a common law employee of the other Party or any of its Affiliates or is otherwise entitled to such payments and benefits.

          4.9.8Responsibility for Acts and Omissions of its Personnel. Each Party shall be solely responsible for its acts and omissions and for those acts or omissions of its Sales Representatives while performing any of the services to be provided under this Agreement. Each Party shall be solely responsible and liable for all probationary and termination actions taken by it, as well as for the formulation, content and dissemination (including content) of all employment policies and rules (including written probationary and termination policies) applicable to its employees and contractors.

          4.9.9Indemnification for Employee Reclassification. Each Party will indemnify, defend, and hold harmless the other Party and its Affiliates, and its and their directors, employees and agents from and against any damages, liability, loss and costs that may be paid or payable by any such Person resulting from or in connection with any claim or other cause of action asserted by any Sales Representative of the other Party or any Third Party (including without limitation federal, state or local governmental authorities) arising out of the execution and/or performance of this Agreement that is based on or with respect to:

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               (a)costs, damages and losses that a Party or its Affiliates may incur resulting from any claims for benefits that any Sales Representative of the other Party may make under or with respect to any Benefit Plan;

               (b)any payment or obligation to make a payment to any Sales Representative of the other Party relating in any way to any compensation, benefits of any type under any employee benefit plan (as such term is defined in Section 3(3) of ERISA) and corresponding employee benefits plans under any other country’s laws, and any other bonus, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance, termination benefits, and other similar fringe or employee benefit plans, programs or arrangements that may be sponsored at any time by Shire or any of its Affiliates or by New River or any of its Affiliates, even if it is subsequently determined by any court or governmental agency that any such Sales Representative may be a common law employee of the other Party or any of its Affiliates or entitled to same;

               (c)the payment or withholding of any contributions, payroll taxes, or any other payroll-related item by or on behalf of a Party or any of its Sales Representative with respect to which such Party or any such individuals may be responsible hereunder or pursuant to applicable law to pay, make, collect, withhold or contribute, even if it is subsequently determined by any court or any governmental agency that any such Sales Representative may be a common law employee of such Party or any of its Affiliates or otherwise entitled to such benefits; and

               (d)failure of a Party to withhold or pay required taxes or failure to file required forms with regard to compensation paid to a Party by the other Party and compensation and benefits paid or extended by a Party to any of its Sales Representatives.

     4.10Reporting. Until the expiration of the later of (y) the period during which Section 4.5.2 applies or (z) the Co-Promotion Period (for so long as New River is Co-Promoting a Collaboration Product), Shire shall provide New River, within thirty (30) days following the end of each calendar quarter, a report setting forth the total number of Details and Primary Position Details, by decile and target physician, actually performed by the Shire Sales Representatives for such calendar quarter, or in such other form as Shire may regularly prepare for its own internal purposes, redacted for confidential information not related to Collaboration Product.

     4.11Compliance with Laws. Each Party or its permitted Third Party contractors shall perform its responsibilities under this Article 4, including those set forth in a Marketing Plan, in accordance with all applicable Laws.

ARTICLE 5
CO-PROMOTION OF COLLABORATION PRODUCTS

     5.1Option. New River will have the right (the “Co-Promotion Option”) to elect from time to time to provide Details for each Collaboration Product in the US Territory up to twenty-five percent (25%) of total Details for such Collaboration Product pursuant to the provisions of this Article 5. In addition to the then-current Marketing Plan, if prior to exercising the Co-Promotion Option, New River reasonably requests additional information Controlled by

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Shire relating to the Collaboration Product in order to evaluate the exercise of its Co-Promotion Option, Shire shall promptly provide such information to New River for such purpose. If New River exercises its Co-Promotion Option, it will not be entitled to [*] without the prior written approval of Shire.

     5.2Exercise of Option. New River shall provide to Shire at least [*] written notice of the first exercise of its Co-Promotion Option prior to the commencement date of such Co-Promotion. If New River terminates its Co-Promotion with respect to a Collaboration Product in the US Territory, New River shall provide Shire at least [*] written notice of any subsequent exercise of its Co-Promotion Option prior to the commencement date of such Co-Promotion. In each exercise of its Co-Promotion Option, New River will specify the date upon which it will commence Co-Promotion, the percentage of Details that New River intends to provide (up to twenty-five percent (25%) of the total Details for such Collaboration Product) and will commit to Co-Promote a Collaboration Product for at least [*]. New River may adjust the level of its Detail commitment on an annual basis with at least [*] notice, but no such adjustment shall change its Detail commitment by more than [*] of the total Details for such Collaboration Product, and in no event may New River commit to providing more than twenty-five percent (25%) of the total Details for such Collaboration Product.

     5.3Co-Promotion Period. The “Co-Promotion Period” for each Collaboration Product will commence upon the date specified in New River’s exercise of the Co-Promotion Option and will expire upon the earlier of: (a) termination of the Parties’ Commercialization of the applicable Collaboration Product in the US Territory; and (b) [*] following the date that New River provides written notice to Shire terminating New River’s Co-Promotion activities hereunder.

     5.4Amendment of Marketing Plan to Include Co-Promotion Activities. The Parties’ Co-Promotion activities for any Collaboration Product in the US Territory shall be governed by a Marketing Plan. After New River gives notice of its intention to exercise a Co-Promotion Option with respect to a Collaboration Product, Shire shall amend the applicable Marketing Plan to set forth the Co-Promotion activities of the Parties for such Collaboration Product in a manner consistent with the terms of this Agreement. Each Marketing Plan for a Co-Promote Product shall set forth the compensation/incentive plans, targeting an allocation between the Parties of the Co-Promotion activities for the Collaboration Product in the US Territory, using reasonable and good faith efforts to allocate the Co-Promotion activities in a manner to give effect to the sales and marketing strategy described in the applicable Marketing Plan and in the best interests of such Collaboration Product. If at the time of exercise of its Co-Promotion Option, New River commits to Co-Promote a Collaboration Product for at least [*] at a fixed level of Detail commitment, then, except with the consent of New River, the applicable Marketing Plan will allocate between the Parties, on a reasonable pro rata basis, the opportunity to promote such Collaboration Product to high prescribing physicians and in centers of excellence. Each Marketing Plan for a Co-Promote Product shall be approved by the JMC in accordance with the terms of Article 2, and each such plan may be amended in a manner consistent with this Agreement.

     5.5Scope. The Co-Promotion by New River of any Collaboration Products under this Agreement shall be subject to the terms and conditions set forth in this Article 5. For

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purposes of this Article 5, a Collaboration Product subject to Co-Promotion under this Agreement shall be referred to as a “Co-Promote Product”.

     5.6Advertising and Promotional Materials.

          5.6.1Inclusion in Marketing Plan. Shire will describe in the applicable Marketing Plan for a Co-Promote Product how and the manner in which the Parties will be presented and described to the medical community in any Promotional Materials or other materials related to the Co-Promote Product and the placement of the names and logos of the Parties, in each case as permitted by applicable Law and with the labeling for the Co-Promote Product approved by the FDA. The Marketing Plan for a Co-Promote Product shall also set forth a delivery schedule for Promotional Materials to be provided by Shire to New River.

          5.6.2Shire Approval. All written, electronic and visual communications, including all Promotional Materials, provided by a Party to its Sales Representatives Detailing the Co-Promote Product for use by such personnel regarding the Co-Promote Product positioning, selling messages or product strategy will be subject to prior review and approval by Shire; provided, that a communication, once approved, need not be re-submitted for approval again prior to its re-use unless the Co-Promote Product labeling applicable to such communication has been changed in any way since such prior approval date; provided that it is understood that Shire shall have the right to withdraw any such communication even after approval.

     5.7Shipment, Storage and Allocation of Samples. If set forth in the applicable Marketing Plan for a Co-Promote Product, Shire shall ship reasonable requirements of Samples for the US Territory to New River’s distribution facility in a timely manner in accordance with the schedule for distribution as outlined in such Marketing Plan. New River shall be responsible for supplying its Sales Representatives in the US Territory with Samples from New River’s distribution facility.

5.8Training.

          5.8.1Shire Control. The direction and training of any Sales Representatives of New River for a Co-Promote Product shall be under the control of Shire.

          5.8.2Timing; Expenses. Shire shall provide sales training on the Collaboration Products for the New River Sales Representatives who will be performing Sales Calls for a Co-Promote Product similar to the training on such Co-Promote Product Shire provides to its own Sales Representatives who perform Sales Calls on such Co-Promote Product. Shire shall provide such training at a time that is mutually acceptable to the Parties and reasonably prior to the commencement of Co-Promotion activities by the applicable New River Sales Representative. Such training shall be deemed a Pre-Marketing Expense or Marketing Expense, as applicable. Notwithstanding anything to the contrary in this Agreement, New River shall pay all travel and housing costs for its Sales Representatives to attend such training and shall reimburse Shire for the training materials provided to New River’s Sales Representatives. Such costs incurred by New River pursuant the preceding sentence of this Section 5.8.2 shall not be considered or included in Allowable Expenses or Pre-Marketing Expenses.

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          5.8.3Continuing Education. Shire shall provide continuing education regarding each Co-Promote Product for Sales Representatives of New River on the same schedule as it provides continuing education for its own Sales Representatives for such Co-Promote Product.

          5.8.4Qualifications. All New River Sales Representatives who will be performing Sales Calls for a Co-Promote Product shall be required to have similar educational qualifications as Shire requires for its own Sales Representatives promoting such Co-Promote Product, and Shire shall provide New River with a copy of such educational qualifications in writing. Additionally, all New River Sales Representatives prior to being assigned to Co-Promotion by New River shall have had relevant experience applicable to the promoting and detailing of pharmaceutical products and shall have received appropriate training on proper marketing and sales techniques to be used in promoting pharmaceutical products in accordance with all applicable Laws. The New River Sales Representatives shall be subject to a reasonable proficiency examination relevant to the Co-Promote Product and will require an acceptable testing performance or score, in the same manner as Shire Sales Representatives. Shire will have an opportunity to interview all such proposed hires and to provide feedback to New River, which New River will consider in good faith.

     5.9Provisions Applicable to All New River Sales Representatives. The following shall apply to all New River Sales Representatives used by New River in connection with the performance of its Co-Promotion activities:

          5.9.1Coordination of New River Sales Representative Activity. All New River Sales Representatives who will be performing Details shall be assigned their responsibilities, activities, Sales Calls territory and Detail requirements by Shire in accordance with the applicable Marketing Plan. All New River Sales Representatives shall keep Shire fully informed of their activities and shall provide Shire, within thirty (30) days following the end of each calendar quarter, a report setting forth the total number of Details and Primary Position Details, by decile and target physician, actually performed by such New River Sales Representative for such calendar quarter, redacted for confidential information not relating to Collaboration Product.

          5.9.2Noncompliance. If Shire has a reasonable basis for believing that any New River Sales Representative may have (a) violated any applicable Law or an applicable Shire policy provided in writing to New River, or (b) failed to comply with industry standards or terms of this Agreement, Shire shall have the right to request New River immediately to address the performance of such individual, in addition to any other rights or remedies available to Shire under this Agreement, at law or in equity. New River shall evaluate and resolve such issue. New River shall keep Shire informed of the progress of, and information learned during, its evaluation, and shall provide Shire with a reasonably detailed written report summarizing any steps taken toward resolution of the matter within ten (10) Business Days after such evaluation.

ARTICLE 6
MANUFACTURE OF COLLABORATION PRODUCTS

     6.1Manufacture and Supply.

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          6.1.1Manufacturing Process. New River will use Diligent Efforts to develop a process for the Manufacture of bulk Compound and Collaboration Products and to scale up such process to a level sufficient to Manufacture and supply in the US Territory clinical and commercial supplies of Collaboration Products. New River will undertake such development in consultation with the JSC, including preparation of filings necessary to obtain Regulatory Approval for the Manufacture of bulk Compound and Collaboration Products for the US Territory and the selection of any Third Party Manufacturer. Once such filings are made, no changes to the process for the Manufacture of Compound and Collaboration Products for the US Territory shall be made without the written consent of Shire, such consent not to be unreasonably withheld, conditioned or delayed; provided that New River will not require the prior written consent of Shire to make changes related to the process for the Manufacture of Compound and/or Collaboration Products hereunder that are required by a Governmental Authority or applicable Law. Schedule 6.1.1 sets forth: (a) a list of each Third Party Manufacturer New River is utilizing as of the Effective Date or intends to use to Manufacture Compound and/or Collaboration Product; and (b) a description of the work to be done by each such Third Party Manufacturer. New River’s retention of any Third Party Manufacturer shall be subject to the prior written approval of Shire, not to be unreasonably withheld, conditioned, or delayed; provided, however, that New River will not need the prior written approval of Shire to utilize Third Party Manufacturers listed on Schedule 6.1.1 for the indicated Manufacturing activities.

      Notwithstanding anything to the contrary in Section 3.7, all costs related to the foregoing activities set forth in this Section 6.1.1 shall to the extent related to the first Collaboration Products for ADHD [*], be borne solely by [*] pursuant to Section 3.3.2. In all other cases, all costs related to the foregoing activities set forth in this Section 6.1.1 shall be deemed Shared Expenses.

          6.1.2Development Supply. New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, Compound and Collaboration Products in bulk and finished form for Development activities to be performed by a Party under Section 3.3 of this Agreement for the US Territory. Prior to receipt of Regulatory Approval for the first Collaboration Products for ADHD [*] in the US Territory, the costs of manufacturing quantities of such Collaboration Products (other than for the build-up of Commercial supply) in the US Territory shall be borne solely by [*]. Prior to receipt of Regulatory Approval of a Collaboration Product other than the first Collaboration Products for ADHD [*] in the US Territory, the costs of manufacturing quantities of such Collaboration Product (other than for the build-up of Commercial supply) in the US Territory shall be treated as Development Expenses and the applicable Development Plan shall designate which such costs, if any, shall be treated as Shared Expenses under Section 3.6.1.

          6.1.3Commercial Supply by New River. Subject to Sections 2.4.2 and 6.3, New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, finished Collaboration Products for sales for all indications in the US Territory. Any such supply will be provided by New River to Shire at [*] (as determined pursuant to Exhibit A). For the avoidance of doubt, the [*] used in calculating Allowable Expenses will be [*] for such finished Collaboration Product, as determined in accordance with Exhibit A, not [*].

     6.2Specifications and Terms of Supply; Multiple Sources. New River, in consultation with the JSC, shall establish the specifications, including any necessary

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documentation, certificates of analysis and test results, for the bulk Compound and bulk and finished Collaboration Products to be Manufactured under this Article 6, in each case subject to the prior written approval of Shire, such approval not be unreasonably withheld, conditioned or delayed. The Parties shall endeavor to maintain compatible specifications for bulk Compound on a worldwide basis, and to minimize the number of distinct specifications in different countries. New River shall establish at least [*] sources of supply for each of Compound and Collaboration Product to be Manufactured under this Article 6.

     6.3Manufacture by Shire; Commercial Supply by Shire. Shire will have the right to act as, or to appoint a Third Party to act as, a second source for Collaboration Products under terms and conditions to be established by the Parties and subject to reasonable commercial qualification by New River and applicable regulatory requirements. In connection with such right, and based on the specifications provided by New River under Section 6.2, Shire will prepare all specifications required for any facility at which Shire intends to Manufacture, or have Manufactured, Collaboration Products, including cGMP qualification guidelines, and any QA approved procedures to be followed during the qualification of such facility, all consistent with the specifications and procedures approved in any existing Regulatory Approval, in each case at Shire’s sole expense. Following validation of such facility, the JSC will task Shire with the production of quantities of Collaboration Products at least sufficient for Shire to maintain such validation as a second source and such quantities shall be available for distribution by Shire. For purposes of determining the Allowable Expenses for sales of Collaboration Products to Third Parties, the [*] on such sales shall be equal to [*] for the quantity of such Collaboration Products actually sold, as determined in accordance with Exhibit A. In the event that [*] any agreement with a Third Party Manufacturer for the Manufacture of Compound or otherwise [*] such that there is a reasonable likelihood of insufficient quantities of Compound to satisfy the need thereof for the Manufacture of Collaboration Products, then Shire shall be entitled, but not be required, to assume in whole or in part New River’s rights and related obligations under such agreement (to the extent permissible thereunder) or otherwise direct the exercise of rights and performance of obligations by New River under such agreement, including the establishment of additional Third Party Manufacturers or Manufacture by Shire, in each case upon the mutual agreement of the Parties, such agreement not to be unreasonably withheld, delayed or conditioned. In such event the Parties shall meet and confer to devise the most effective supply plan for the bulk Compound and/or Collaboration Products and to consider amendments to this or other agreements, as necessary.

     6.4Supply Terms. The Parties, in consultation with the JSC, will establish the terms and conditions applicable to the supply of Compound and Collaboration Products by New River to Shire under this Article 6, and enter into an appropriate supply agreement with respect thereto containing terms and conditions consistent with the terms of this Agreement, including without limitation, this Article 6 and at a minimum those terms and conditions as set forth on Exhibit D, to the extent New River is able to obtain such terms from Third Party Manufacturers having used Diligent Efforts to do so.

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ARTICLE 7
FINANCIAL TERMS

     7.1Licensing Fee. As partial payment for the rights and licenses granted by New River pursuant to this Agreement, Shire shall pay to New River a license fee equal to $48,800,000 within ten (10) Business Days after the Effective Date. This fee shall be non-creditable and non-refundable against any future obligations of Shire under this Agreement, subject to Section 7.3 and Section 13.6.

     7.2Milestone Payments. Shire shall make the following milestone payments, which shall be non-creditable and non-refundable, subject to Section 7.3 and Section 13.6, to New River within ten (10) Business Days after the achievement of each of the following milestones (or, in the event that any such milestone is achieved by New River, after New River shall have given Shire written notice that such milestone has been achieved):

MILESTONE EVENT	MILESTONE PAYMENT
(a) Upon FDA acceptance of the first, and only the first, Drug Approval Application for Collaboration Product forADHD in the Field in the US Territory, as evidenced by [*].	$50,000,000
(b) Upon [*] of the first Collaboration Product for ADHD in the Field in the US Territory [*], as follows:
[*]	[*]
[*]	[*]
[*] [*]	[*]
(c) At the end of the first, and only the first, calendar year during which the cumulative worldwide Net Sales of allCollaboration Products during such calendar year exceed [*]	$100,000,000

No milestone is to be paid more than once irrespective of the number of Collaboration Products Developed, Manufactured or Commercialized under this Agreement.

     7.3Refunds by New River. New River shall make the following refunds to Shire within thirty (30) days after each of the following dates if New River has not received Regulatory Approval in the US Territory for a Collaboration Product for an ADHD indication on or before such date: (a) $[*] on [*], (b) $[*] on [*], and (c) $[*] on [*]. The total refund amount by New River under this Section 7.3 shall not exceed $[*].

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     7.4Sharing of US Product Profit.

          7.4.1US Collaboration Product for ADHD. New River and Shire or, if Shire so nominates, its Affiliate in the US Territory shall share US Product Profit for the first Collaboration Product approved in the US Territory for ADHD as set forth in this Section 7.4.

               (a)If such Collaboration Product has [*], then (i) during the period beginning with the First Commercial Sale and ending on the last day of the month that is twenty-four (24) months following the month in which the First Commercial Sale of such Collaboration Product occurs, the US Product Profit for such Collaboration Product will be allocated seventy-five percent (75%) to Shire and twenty-five percent (25%) to New River, and (ii) after such twenty-four (24) month period, the US Product Profit for such Collaboration Product will be allocated fifty percent (50%) to Shire and fifty percent (50%) to New River.

               (b)If such Collaboration Product has [*], then the US Product Profit for such Collaboration Product will be allocated between the Parties based on the formula set forth on Exhibit B.

               (c)If such Collaboration Product initially [*], then, effective as of the first day of the first calendar month following such [*], on a prospective basis only, the allocation of US Product Profit for such Collaboration Product will be as set forth in Section 7.4.1(a) .

               (d)If such Collaboration Product initially [*], then New River shall use Diligent Efforts to [*]. Shire shall provide such assistance as may be reasonably requested by New River in connection with seeking [*], at no cost to New River. Any Development Expenses incurred in seeking [*] shall be the sole responsibility of New River.

               (e)In the event of a change in the regulatory scheme [*] under the [*], the terms of this Section 7.4 (as well as any other terms of this Agreement relating to [*]) will be interpreted in the manner that conforms most closely to the [*] existing as of the Effective Date. In any event, if such regulatory change results in a Collaboration Product [*] under such [*], then, for purposes of this Agreement, New River will have been deemed to have [*].

          7.4.2Other Collaboration Products in the US Territory. Except as set forth in Section 7.4.1, New River and Shire or, if Shire so nominates, its Affiliate in the US Territory shall share [*] in the US Product Profit for each Collaboration Product, irrespective of the [*] by such Collaboration Product.

          7.4.3Reporting and Payment.

               (a)Within five (5) Business Days after the end of each calendar quarter, New River shall report to Shire New River’s individual Allowable Expense items (with appropriate supporting information) involved in the computation of US Product Profit and accrued during such quarter, as well as any Pre-Marketing Expenses, incurred and accrued during such quarter with respect to each such Collaboration Product (the “New River Report”).

               (b)Within five (5) Business Days after the end of each calendar quarter, Shire shall report to New River Net Sales and Shire’s individual Allowable Expense

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items (with appropriate supporting information) involved in the computation of US Product Profit and accrued during such quarter, as well as any Pre-Marketing Expenses, incurred and accrued during such quarter with respect to each such Collaboration Product (the “Shire Report”).

               (c)The New River Reports and the Shire Reports will be in such form as the Parties may reasonably agree from time to time. The Parties shall determine and report Marketing Expenses for their respective full-time equivalent sales force personnel using the same mutually acceptable mechanism.

               (d)Within twenty-five (25) days after the end of each calendar quarter, Shire shall provide for each Collaboration Product one consolidated Financial Statement for the US Territory to the JMC. Within ten (10) days after receipt of the Financial Statement, the JMC shall direct the remittance between the Parties of an amount to effectuate the sharing of the US Product Profit (including the reimbursement of Allowable Expenses and Phase IV and Related Expenses) in accordance with Sections 7.4.1 and 7.4.2, and Pre-Marketing Expenses in accordance with Section 4.6 for all Collaboration Products. Any such payment shall be made, in any event, within ten (10) days of the date that the JMC directs the remittance.

          7.4.4Term. The Parties shall share US Product Profit hereunder with respect to each Collaboration Product in the US Territory until each such Collaboration Product is permanently withdrawn from and is no longer being sold anywhere in the US Territory.

ARTICLE 8
PAYMENT TERMS

     8.1Payment Method. All amounts due to either Party hereunder will be paid in United States Dollars by wire transfer in immediately available funds to an account designated by such Party. Any payments or portions thereof due hereunder that are not paid by the date such payments are due under this Agreement will bear simple interest at the lower of (a) [*] the US Prime Rate, as reported in the Wall Street Journal, Eastern Edition, on the due date (or, if the due date is not a business day, on the last business day prior to such due date), or (b) the maximum rate permitted by applicable Law, calculated on the number of days such payment is delinquent; provided that such interest shall not be due to the extent that a payment is inadvertently paid late (e.g., if such late payment is accompanied by reasonable evidence that the payor was not aware of the due date of the payment or reasonable explanation that such payment due date was unintentionally missed) and if the payor acts in good faith in making payment as soon as it discovers that a required payment has not been made.

     8.2Payment Schedules; Reports. The payments due pursuant to Sections 3.7.2, 7.1, 7.2, 7.3, 7.4 and 11.3.5 are due and payable on the dates described therein. The Parties acknowledge that any expenses or costs reported or shared in any way under this Agreement may be based upon estimates, which estimates will be GAAP-compliant; provided that when the actual results become known relative to any estimated amount, any difference between the actual results and the estimate is reported and the next payment due hereunder related to such estimated item is appropriately adjusted for such difference. The Parties acknowledge and agree that any reports and payments relating to any cost, expense, or other financial amount shared pursuant to

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this Agreement for the fourth quarter of any calendar year shall reflect year-end reconciliations and adjustments, if any, applicable to the previous three quarters’ reported results.

     8.3 Currency Conversion. For any currency conversion required in determining the amount of US Product Profits due hereunder, such conversion will be made at the exchange rate used by Shire, consistent with its general internal corporate policies as they relate to its income statement, for its own consolidation purposes for the translation of such currency into United States Dollars for any US Product Profit payments due pursuant to this Agreement. Such policies will be made available to New River upon request and will be consistent with customary industry practices.

     8.4 Legal Restrictions. If at any time legal restrictions prevent the remittance by Shire of all or any part of US Product Profits, Shire will have the right and option to make such payment by depositing the amount thereof in local currency to an account in the name of New River in a bank or other depository in such country. Shire will consult with New River regarding, and promptly notify New River of, any and all such arrangements.

     8.5 Taxes.

          8.5.1 Withholding Taxes. New River will be responsible for any and all income or other taxes owed by New River and required by applicable Law to be withheld or deducted from any of the payments made by or on behalf of Shire to New River hereunder (“Withholding Taxes”), and Shire may deduct from any amounts that Shire is required to pay hereunder an amount equal to such Withholding Taxes. Shire will provide New River with reasonable advance notice of tax withholding obligations to which it reasonably believes that it is subject. New River will provide Shire any information available to New River that is necessary to determine the Withholding Taxes. Such Withholding Taxes will be paid to the proper taxing authority for New River’s account and evidence of such payment will be secured and sent to New River within one (1) month of such payment. The Parties will do all such lawful acts and things and sign all such lawful deeds and documents as either Party may reasonably request from the other Party to enable New River and Shire or its Affiliates or sublicensees to take advantage of any applicable legal provision or any treaty provisions with the object of paying the sums due to New River hereunder with the lowest legal amount of Withholding Taxes.

          8.5.2 Additional Withholding Taxes. If, as a result of any change in the corporate status or location of Shire, or the permitted assignment of this Agreement by Shire, additional Withholding Taxes become due on payments from Shire or its permitted assignee to New River that would not have been due absent such change in corporate status or location or permitted assignment, and New River is not able to claim a credit or reimbursement for such tax, in whole or in part, then Shire will deduct Withholding Taxes in accordance with this Section 8.5, but will, in addition to the sums otherwise payable under this Agreement, pay to New River such further sum as will ensure that, after deduction of Withholding Taxes on all such sums, the net amount received by New River equals the amount that New River would have received had the non-creditable or non-reimbursable excess portion of such additional Withholding Taxes not been deducted. To the extent that any such amount paid by Shire to New River in accordance with this Section 8.5 is in fact subsequently able to be claimed by New

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River as a credit or reimbursement for such tax otherwise deducted, then New River will repay such amount to Shire.

     8.6Records Retention; Audit.

          8.6.1Record Retention. Each Party will maintain complete and accurate books, records and accounts used for the determination of expenses incurred in connection with the performance of Development or Commercialization activities or otherwise relevant for the calculation of Net Sales in the US Territory and US Product Profits, in sufficient detail to confirm the accuracy of any payments required under this Agreement, which books, records and accounts will be retained by such Party for three (3) years after the end of the period to which such books, records and accounts pertain, or longer as is required by applicable Law.

          8.6.2Audit. Each Party will have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to the other Party, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of the other Party as may be reasonably necessary to verify the accuracy of any expenses shared or paid by the other Party under this Agreement or the calculation of Net Sales in the US Territory or US Product Profits for any calendar year ending not more than three (3) years prior to the date of such request; provided, however, that, no Party will have the right to conduct more than one such audit in any twelve (12) month period and that the auditing Party shall not be permitted to audit the same period of time more than once, unless evidence of fraud or gross negligence arises in a subsequent audit and the auditing Party reasonably believes that such evidence indicates the reasonable possibility of fraud or gross negligence in any such prior period. The accounting firm will disclose to the Parties only whether the various expenses subject to being shared by this Agreement, Net Sales in the US Territory or US Product Profits reported by the audited Party are correct or incorrect and the specific details concerning any discrepancies. The auditing Party will bear all costs of such audit, unless the audit reveals a discrepancy in the auditing Party’s favor of more than [*], in which case the audited Party will bear the cost of the audit. If the audited Party disputes the findings pursuant to this Section 8.6.2, the Parties shall meet and discuss such dispute. If such dispute is not resolved within forty-five (45) days, then it shall be subject to Article 16. Shire shall use Diligent Efforts to obtain from any sub-licensee audit rights at least as favorable as the audit rights set forth in this Section 8.6.2 and the right to share the results of any such audit with New River. In the event that New River reasonably believes that there is a material inaccuracy in the reporting by a sub-licensee of the Net Sales in the US Territory of such sub-licensee, then New River may direct Shire to exercise such audit rights in accordance with procedures reasonably requested by New River. New River shall succeed to the rights and obligations of Shire in respect of any costs or expenses associated with a sub-licensee audit requested by New River.

          8.6.3Payment of Additional Amounts. If, based on the results of any audit, additional payments are owed to either Party under this Agreement, then the paying Party will make such additional payments within five (5) Business Days after the accounting firm’s written report is delivered to the Parties. The provisions of Section 8.1 shall apply to such payment.

          8.6.4Confidentiality. Each Party will treat all information subject to review under this Section 8.6 in accordance with the provisions of Article 10. Prior to conducting any

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audit hereunder, the Party conducting such audit will cause its accounting firm to enter into a reasonably acceptable CONFIDENTIAL TREATMENT with the audited Party obligating such accounting firm to maintain all such financial information in confidence with standards no less stringent that the terms of this Article 10 of this Agreement.

ARTICLE 9
LICENSES

     9.1Licenses to Shire. Subject to the terms of this Agreement, New River hereby grants to Shire an exclusive (except as to New River) license, without the right to grant sublicenses (except to Affiliates of Shire), under the Licensed Patents, the Licensed Know-How and New River’s interest in any Joint Collaboration Patents (a) to Commercialize Collaboration Products in the Field in the US Territory and (b) to Develop and use Collaboration Products for Commercialization in the US Territory.

     9.2Licenses to New River. Subject to the terms of this Agreement, Shire hereby grants to New River an exclusive (except as to Shire), paid-up license, without the right to grant sublicenses (except to Affiliates of New River), under the Shire Patents and Shire Know-How solely to conduct Development and Commercialization of Collaboration Products in the Field for the US Territory (and to supply Shire Collaboration Products and Compound for the ROW Territory) in accordance with the terms of this Agreement and the ROW Agreement, as applicable.

     9.3Sublicensing. Shire may grant sublicenses under Section 9.1 to [*]; provided, however, that the Development activities undertaken by any sublicensee of such rights will be subject to the oversight and authority of the JDC. The entry by Shire into a sublicense shall not relieve Shire of its obligations under this Agreement, including the obligation to report the Net Sales of such sublicensee.

     9.4Scope of Licenses. As used in this Article 9, a license that is “exclusive except as to” the granting Party means that the Party granting the license shall not grant any other entity (other than its Affiliates) any license under such patent rights with the right to practice within the Field, but that otherwise the granting Party retains all its rights of ownership in such licensed rights, including without limitation the right to practice such patent rights, subject only to the license granted.

     9.5No Implied Licenses. Except as expressly provided in this Agreement, neither Party grants to the other Party any right or license in any intellectual property right, whether by implication, estoppel or otherwise. No implied licenses are granted under this Agreement. Each Party hereby covenants and agrees not to use or sublicense any of its rights under the licenses set forth in this Article 9 except as expressly permitted in this Agreement.

     9.6Exclusivity. During the Term, New River hereby covenants and agrees not to, itself or through or with any Affiliate or Third Party, (a) develop, market, promote, sell, or otherwise commercialize any pharmaceutical products containing or comprising [*] or other compound where an active moiety of such compound is [*], other than Collaboration Products, (b) or develop, market, promote, sell, or otherwise commercialize any pharmaceutical products

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containing [*] formulated for [*] for the treatment or prevention of ADHD, other than Collaboration Products, or (c) grant any license to a Third Party to perform any activities described in the preceding clauses (a) or (b), in each case without the express prior written approval of Shire.

     9.7Nonassertion. New River and its Affiliates hereby covenant and agree not to, alone or in cooperation with any Third Party, [*], the manufacture, use, offer for sale, sale, distribution, import or export of which is done under and in accordance with the terms of this Agreement. This covenant will run with and attach to any and all intellectual property owned or controlled, in whole or in part, by New River and shall be binding upon any assignee of any intellectual property from New River.

     9.8[*]. New River will be permitted to terminate this Agreement by written notice effective upon receipt if [*] (each such [*]). Shire will include provisions in all agreements granting sublicenses of Shire’s rights hereunder providing that if the sublicensee or its Affiliates undertake a [*] with respect to [*] under which the sublicensee is sublicensed, Shire will be permitted to terminate such sublicense agreement. If a sublicensee of Shire (or an Affiliate of such sublicensee) undertakes a [*] of any such [*] under which such sublicensee is sublicensed, then Shire upon receipt of notice from New River of such [*] will terminate the applicable sublicense agreement. If Shire fails to so terminate such sublicense agreement, New River may terminate Shire’s right to sublicense in the countr(ies) covered by such sublicense agreement and any sublicenses previously granted in such countr(ies) shall automatically terminate. In connection with such sublicense termination, Shire shall cooperate with New River’s reasonable requests to cause such a terminated sublicensee to discontinue activities with respect to the Collaboration Product in such countr(ies).

ARTICLE 10
CONFIDENTIALITY

     10.1Confidential Information.

          10.1.1Confidential Information. As used in this Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or the ROW Agreement or generated pursuant to this Agreement or the ROW Agreement by one Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Notwithstanding the foregoing sentence, Confidential Information shall not include any information or materials that:

               (a)were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

               (b)were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

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               (c)became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

               (d)were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

               (e)were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

          10.1.2Confidentiality Obligations. Each of New River and Shire shall keep all Confidential Information received from the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement; provided, however, that a Receiving Party shall advise any of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure (including, in the case of a Third Party, by means of a written agreement with such Third Party having terms at least as protective as those contained in this Article 10) that all such directors, managers, employees, independent contractors, agents or consultants comply with such obligations as if they had been a Party hereto. Upon termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party or its directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall be deemed to be the property of the Disclosing Party, and shall continue to be subject to the provisions of this Article 10. It is understood that receipt of Confidential Information under this Agreement will not limit the Receiving Party from assigning its employees to any particular job or task in any way it may choose, subject to the terms and conditions of this Agreement.

          10.1.3Permitted Disclosure and Use. Notwithstanding Section 10.1.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval of a Collaboration Product to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange or Nasdaq regulation. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 10.1.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of

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such information. In addition, notwithstanding Section 10.1.2, the Parties shall prepare standardized responses to anticipated inquiries from the public or press, stockholders, investors and/or analysts with respect to the Compound, Collaboration Product or other activities hereunder that may be disclosed. Notwithstanding anything to the contrary in this Article 10, Shire shall not disclose to any Third Party Confidential Information of New River disclosing the Manufacture of Compound, without the prior written consent of New River, not to be unreasonably withheld, delayed or conditioned.

          10.1.4Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and will cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure.

     10.2Publicity; Filing of this Agreement. After the execution of the January Agreement, the Parties announced the execution of the January Agreement using the form of the press release substantially in the form attached as Exhibit E (the “Joint Press Release”). Any other publication, news release or other public announcement relating to this Agreement or to the performance hereunder, shall first be reviewed and approved by both Parties; provided, however, that any disclosure which is required by Law as advised by the disclosing Party’s counsel may be made without the prior consent of the other Party. To the extent practicable, the disclosing Party shall be given at least three (3) Business Days advance notice of any such legally required disclosure, and the other Party shall provide any comments on the proposed disclosure during such period. To the extent that either Party determines that it or the other Party is required to file or register this Agreement or a notification thereof to comply with the requirements of an applicable stock exchange or Nasdaq regulation or any Governmental Authority, including without limitation the U.S. Securities and Exchange Commission, the Competition Directorate of the Commission of the European Communities or the U.S. Federal Trade Commission, such Party shall promptly inform the other Party thereof. Prior to making any such filing, registration or notification, the Parties shall agree on the provisions of this Agreement for which the Parties shall seek confidential treatment, it being understood that if one Party determines to seek confidential treatment for a provision for which the other Party does not, then the Parties will use reasonable efforts in connection with such filing to seek the confidential treatment of any such provision. The Parties shall cooperate, each at its own expense, in such filing, registration or notification, including without limitation such confidential treatment request, and shall execute all documents reasonably required in connection therewith. In furtherance of the foregoing, the Parties will agree as promptly as practicable after the Effective Date on the confidential treatment request to be filed with the U.S. Securities and Exchange Commission and the redacted form of this Agreement related thereto. In that connection, any redaction reasonably requested by either Party shall be included in such filing. The Parties will reasonably cooperate in responding promptly to any comments received from the U.S. Securities and Exchange Commission with respect to such filing in an effort to achieve confidential treatment of such redacted form; provided, however, that a Party shall be relieved of such obligation to seek confidential treatment for a provision requested by the other Party if such treatment is not achieved after the second round of responses to comments from the U.S. Securities and Exchange Commission.

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     10.3Publication. Each Party shall submit copies of each proposed academic, scientific, medical and other publication or presentation that contains or refers to the Licensed Patents, Licensed Know-How or otherwise relates to a Collaboration Product or any research or Development activities under this Agreement to the other Party at least sixty (60) days in advance of submitting such proposed publication or presentation to a publisher or other Third Party. Such other Party shall have the right to review, comment on and approve each such proposed publication or presentation for accuracy and to ascertain whether such Party’s Confidential Information is being inappropriately utilized and/or released. The non-publishing Party shall have the right to remove any of its Confidential Information prior to submission for publication or presentation. The publishing Party shall redact or otherwise modify the proposed publication or presentation to remove any such Confidential Information of the other Party. In addition, in the event that the document includes data, information or material generated by a Party’s scientists, and professional standards for authorship would be consistent with including such Party’s scientists as co-authors of the document, the names of such scientists will be included as co-authors. A Party may publicly disclose without regard to the preceding requirements of this Section 10.3 any information that was previously disclosed in a public disclosure that was in compliance with such requirements.

     10.4Use of Names. Neither Party shall use the name of the other Party in relation to this transaction in any public announcement, press release or other public document without the written consent of such other Party, which consent shall not be unreasonably withheld or delayed; provided, however, that either Party may use the name of the other Party in any document filed with any regulatory agency or authority, including the FDA and the Securities and Exchange Commission.

     10.5Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article 10.

     10.6Disclosures Under Existing NDA. The Parties agree and acknowledge that New River and Shire US, Inc. entered into that certain Existing NDA. For purposes of this Section 10.6, the term “Existing NDA” means that certain Non-Disclosure and CONFIDENTIAL TREATMENT, dated as of July 16, 2002, as amended by letter agreements on July 13, 2004, October 29, 2004, November 12, 2004, November 15, 2004, by and among the Parties and various other Affiliates and independent contractors of Shire. The Parties agree that “Confidential Information” (as such term is used in the Existing NDA) disclosed to Shire Affiliates under the Existing NDA prior to the Effective Date shall be deemed to have been disclosed under this Agreement and, from and after the Effective Date, shall be held in confidence by such Shire Affiliates in accordance with the terms of this Article 10. To the extent that Shire retains Prior Consultants to perform activities under this Agreement in connection with which such Prior Consultant is provided Confidential Information of New River, then such Prior Consultant shall be made subject to the provisions of this Article 10 with respect to disclosures of “Confidential Information,” as such term is used in the Existing NDA. The term “Prior Consultants” means those persons added as parties to the Existing NDA pursuant to those amendments to the Existing NDA made as of November 12, 2004 and November 15, 2004.

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     10.7Survival. The obligations and prohibitions contained in this Article 10 shall survive the expiration or termination of this Agreement for a period of ten (10) years.

ARTICLE 11
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

     11.1Ownership.

          11.1.1New River shall solely own, and it alone shall have the right to apply for Patents, within and outside of the United States for any New River Inventions and Shire shall solely own, and it alone shall have the right to apply for Patents, within and outside of the United States for any Shire Inventions. New River and Shire will each own an undivided one-half interest in any Joint Inventions and any Patents claiming such Joint Inventions (“Joint Collaboration Patents”), in each case without obligation to account to the other for the exploitation thereof or to seek consent of the other for the grant of any licenses thereunder, subject to the licenses and rights granted by the Parties in this Agreement. Each Party shall promptly disclose to the other Party all Inventions made by it during the Term. The determination of inventorship for Inventions shall be made in accordance with applicable Laws relating to inventorship set forth in the patent Laws of the United States (Title 35, United States Code).

          11.1.2Each Party will require all of its and its Affiliates’ employees to assign all Inventions that are the subject of patent applications claiming Inventions that are developed, made or conceived by such employees according to the ownership principles described in this Section 11.1. Each Party will require any agents or independent contractors performing an activity pursuant to this Agreement to assign all Inventions that are the subject of patent applications claiming Inventions that are developed, made or conceived by such agents or independent contractors to New River and/or Shire according to the ownership principles described in this Section 11.1.

     11.2Disclosures; Disputes Regarding Inventions. Each Party shall, before filing a new patent application (including without limitation provisionals and continuations-in-part, but excluding continuations, divisionals, and requests for continued examinations) claiming an Invention, promptly disclose such Invention to the other Party, including Joint Inventions, New River Inventions and Shire Inventions and shall provide the other Party with a copy of the proposed patent application at least ten (10) Business Days before filing such application or such shorter time as may be required to preserve Patent rights, including, without limitation, the avoidance of a statutory bar. If the non-filing Party believes that the filing Party’s proposed patent application discloses Confidential Information of the non-filing Party, the non-filing Party shall so notify the filing Party within such ten (10) Business Days, and the filing Party shall amend its proposed application to comply with the confidentiality provisions of this Agreement. If the Parties are in agreement as to the designation of the Invention as Joint Invention, New River Invention or Shire Invention, they can continue as set forth in Section 11.3 below. If the Parties disagree as to whether an Invention is a Joint Invention, New River Invention or Shire Invention, and are unable to reach agreement within thirty (30) days after commencing discussions, then each Party will have the right to avail itself of any legally recognizable remedy in accordance with Article 16 of this Agreement and applicable Law.

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     11.3Patent Filings.

          11.3.1New River Responsibilities. New River shall prepare, file, prosecute and maintain Patents to cover (a) New River Inventions (the “New River Collaboration Patents”), and (b) the Licensed Patents. New River shall keep Shire informed of the status of each such Patent and shall give Shire a reasonable opportunity to provide comments to any communication from any patent office. New River shall give reasonable consideration to any suggestions or recommendations of Shire concerning the preparation, filing, prosecution and maintenance thereof, including suggestions of the JIPC pursuant to the terms set forth in Sections 2.5 and 2.7.4. Promptly after the Effective Date, New River shall provide Shire with copies of the file histories of all Licensed Patents and shall update such file histories promptly upon receipt of any additional communications from any patent offices and patent counsel or agents pertaining thereto. New River shall also provide Shire with copies of any communications from any patent offices and patent counsel or agents pertaining to any New River Collaboration Patents. New River, at Shire’s request, shall [*] in any New River Collaboration Patent, Licensed Patent or a continuation or divisional of either of the foregoing, the type of application being at New River’s discretion; provided, however, New River may refuse to [*] if New River reasonably believes, in good faith, that [*]. If the [*], New River will [*] and shall give reasonable consideration to any suggestions or recommendations of Shire concerning [*]. The Parties shall cooperate reasonably in the prosecution of all Patents under this Section 11.3.1 and shall share all material information relating thereto promptly after receipt of such information. If, during the term of this Agreement, New River intends to allow any Licensed Patent to expire or intends to otherwise abandon any Licensed Patent, New River shall notify Shire of such intention at least sixty (60) days prior to the date upon which such Licensed Patent shall expire or be abandoned, and Shire shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof.

          11.3.2Shire Responsibilities. Shire shall file, prosecute and maintain Patents to cover Shire Inventions conceived pursuant to this Agreement or the ROW Agreement (the “Shire Collaboration Patents”). Shire shall keep New River informed of the status of each such Patent and shall give reasonable consideration to any suggestions or recommendations of New River concerning the preparation, filing, prosecution and maintenance thereof, including the suggestions of the JIPC pursuant to the terms set forth in Sections 2.5 and 2.7.4. The Parties shall cooperate reasonably in the prosecution of all Shire Patents under this Section 11.3.2 and shall share all material information relating thereto promptly after receipt of such information. If, during the Term, Shire intends to allow any Shire Patent to which New River has a license under this Agreement to expire or intends to otherwise abandon any Shire Patent, Shire shall notify New River of such intention at least sixty (60) days prior to the date upon which such Shire Patent shall expire or be abandoned, and New River shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof.

          11.3.3Jointly Owned Patents. The responsibility for the filing, prosecution and maintenance of Joint Collaboration Patents shall be determined by the Parties, including conducting related interference and opposition proceedings relating thereto, without prejudice to ownership, on behalf of both Parties based on a good faith determination of the relative contributions of the Parties to the Invention and the relative level of interest of the Parties in the

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Invention; provided, however that the Parties may also decide not to file a Joint Collaboration Patent for any such Joint Invention. At least ten (10) Business Days prior to the contemplated filing, the Party responsible for such activities for a Joint Collaboration Patent shall submit a substantially completed draft of such Joint Collaboration Patent to the other Party for its approval. Should the agreed upon Party elect not to prepare and/or file any such Joint Collaboration Patent, it shall (a) provide the other Party with written notice as soon as reasonably possible after making such election but in any event no later than twenty (20) Business Days before the other Party would be faced with a possible loss of rights, (b) give the other Party the right, at the other Party’s discretion, to prepare, file, prosecute or maintain the Joint Collaboration Patent, and (c) offer reasonable assistance in connection with such preparation, filing, prosecution or maintenance.

          11.3.4Cooperation. The Parties agree to cooperate in the preparation, filing, prosecution and maintenance of all Patents under this Section 11.3, including obtaining and executing necessary powers of attorney and assignments by the named inventors, providing relevant technical reports to the filing Party concerning the Invention disclosed in such Patent, obtaining execution of such other documents which shall be needed in the filing and prosecution of such Patent, and, as requested, updating each other regarding the status of such Patent, and shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to obtain or maintain such Patents.

          11.3.5Patent Expenses. Patent Expenses for the US Territory shall be borne [*]. Within five (5) Business Days following the end of each calendar quarter, each Party shall deliver a report outlining its Patent Expenses for such quarter. Within thirty (30) days following the end of each such quarter, the Party incurring less than [*] of such expenses during the quarter shall reimburse the other Party an amount sufficient to [*] each Party’s share of such costs.

     11.4Third-Party Patent Rights. Except as otherwise provided in Section 12.1 below, neither Party makes any warranty with respect to the validity, perfection or dominance of any Patent or other proprietary right or with respect to the absence of rights in Third Parties which may be infringed by the Manufacture or Commercialization of any Collaboration Product. Each Party agrees to bring to the attention of the other Party any patent or patent application it discovers, or has discovered, and which relates to the subject matter of this Agreement.

     11.5Enforcement and Defense of Patents.

          11.5.1Infringement of Third Party Patents.

               (a)Third Party Claims. In the event of a Third Party Claim against Shire, New River or their respective Affiliates alleging that the making, using, importing, selling or offering to sell a Collaboration Product infringes or will infringe claims in any patents of a Third Party, the Party first obtaining knowledge of such Third Party Claim shall immediately provide the other Party notice of such Third Party Claim with the related facts in reasonable detail. Shire shall have the first right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of Shire’s choice if Shire or any of its Affiliates are named as a party to such Third Party claim and New River or any of its Affiliates are not. In such case, New River shall have the right to be represented by independent counsel at New

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River’s own expense. New River shall have the first right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of New River’s choice if New River or any of its Affiliates are named as a party to such Third Party claim and Shire or any of its Affiliates are not. In such case, Shire shall have the right to be represented by independent counsel at Shire’s own expense. If either Party refuses to accept control of the defense of a Third Party Claim for which it has the first right to control defense hereunder within [*] after receiving or giving notice thereof, then the other Party shall have the right to defend against such Third Party Claim. In such case, such refusing Party shall have the right to be represented by independent counsel at its own expense. If (1) Shire or any of its Affiliates and (2) New River or any of its Affiliates are named as parties to such Third Party Claim, then the Parties will have the joint right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of their mutual agreement. If the Parties are unable to agree on such joint defense, then the Parties will use good faith efforts to determine the Party to assume control of such defense and choice of counsel. In such case, the other Party shall have the right to be represented by independent counsel at its own expense.

               (b)Cooperation. If a Party shall become engaged in or participate in any suit described in this Section 11.5.1, the other Party shall cooperate, and shall cause its and its Affiliates’ employees to cooperate, with such Party in all reasonable respects in connection therewith, including giving testimony and producing documents lawfully requested, and using its reasonable and diligent efforts to make available to the other, at no cost to the other (other than reimbursement of actually incurred, reasonable out-of-pocket travel and lodging expenses), such employees who may be helpful with respect to such suit, investigation, claim, interference or other proceeding.

          11.5.2Prosecution of Infringers.

               (a)Notice. If either Party learns that a Third Party is infringing or allegedly infringing any Patent within the Licensed Patents, the Shire Patents or the Joint Collaboration Patents or if any Third Party claims that any such Patent is invalid or unenforceable, it will promptly notify the other Party thereof including available evidence of infringement or the claim of invalidity or unenforceability. The Parties will cooperate and use reasonable efforts to stop such alleged infringement or to address such claim without litigation.

               (b)Enforcement and Defense of Licensed Patents, Joint Collaboration Patents and Shire Collaboration Patents.

                    (i)Shire will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Shire Collaboration Patents. Shire may take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*]. Notwithstanding the foregoing, New River will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (ii)If, pursuant to Section 11.5.2(b)(i), Shire fails to take the appropriate steps to enforce or defend any Patent within the Shire Collaboration Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 11.5.2(a) of such

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infringement or claim, then New River will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice and Shire will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (iii)New River will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Licensed Patents. New River may, in any such instance, take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*]. Notwithstanding the foregoing, Shire will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (iv)If, pursuant to Section 11.5.2(b)(iii), New River fails to take the appropriate steps to enforce or defend any Patent within the Licensed Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 11.5.2(a) of such infringement or claim, then Shire will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice, and New River will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (v)In the case of Joint Collaboration Patents, the Parties will decide whether Shire or New River will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Joint Collaboration Patents. The Party so selected may, in any such instance, take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*] and the Party that is not so selected will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (vi)If, pursuant to Section 11.5.2(b)(v), the Party selected fails to take the appropriate steps to enforce or defend any Patent within the Joint Collaboration Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 11.5.2(a) of such infringement or claim, then the other Party will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice, and the Party so selected will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (vii)Notwithstanding Sections 11.5.2(b)(i) -(vi), Shire will have the sole discretion whether to [*] and the sole right to [*] which may result [*] for such Third Party. For the avoidance of doubt, New River shall not have the right to [*] which may result in [*] for such Third Party. Any such [*], as may be required by Law.

               (c)Cooperation; Damages.

                    (i)If one Party brings any suit, action or proceeding under this Section 11.5.2, the other Party agrees to be joined as party plaintiff if necessary to prosecute the

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suit, action or proceeding and to give the first Party reasonable authority to file and prosecute the suit, action or proceeding; provided, however, that neither Party will be required to transfer any right, title or interest in or to any property to the other Party or any other party to confer standing on a Party hereunder.

                    (ii)The Party not pursuing the suit, action or proceeding hereunder will provide reasonable assistance to the other Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any out-of-pocket expenses incurred by the non-enforcing or defending Party in providing such assistance.

                    (iii)Neither Party will settle or otherwise compromise any such suit, action or proceeding in a way that adversely affects the other Party’s intellectual property rights or its rights or interests with respect to the Collaboration Product without such Party’s prior written consent.

                    (iv)Any settlements, damages or other monetary awards (the “Recovery”) recovered pursuant to a suit, action or proceeding brought pursuant to Section 11.5.2 will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, and any remaining amounts (if any) with respect to the US Territory will be [*].

     11.6Notice of Certification. New River and Shire each shall immediately give notice to the other of any certification filed under the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (or its foreign equivalent) claiming that a Licensed Patent, Joint Collaboration Patent or a Shire Collaboration Patent is invalid or that infringement of a Licensed Patent, Joint Collaboration Patent or Shire Collaboration Patent will not arise from the manufacture, use, offer for sale, sale or importation product by a Third Party (“Hatch-Waxman Certification”). Nothing in this Section 11.6 shall prevent or otherwise limit New River’s right to take any and all such actions with regard to the matters described in this Section 11.6 as required by applicable Law.

     11.7Patent Term Extensions. New River and Shire shall cooperate in good faith in gaining patent term extensions due to delay(s) in Regulatory Approval wherever applicable to the Licensed Patents, Joint Collaboration Patents and Shire Collaboration Patents. However, Shire shall have the sole discretion in determining which Licensed Patent(s), Joint Collaboration Patent(s), or Shire Collaboration Patent(s) to extend for any particular compound, composition, article, product, process, or use.

     11.8Listing of Patents. Shire shall have the right to determine which of the [*], if any, shall be submitted for inclusion in the Approved Drug Products with Therapeutic Equivalence Evaluations pursuant to 21 U.S.C. Section 355, or any successor Law in the United States, together with any comparable Laws in any other country. Shire shall notify New River at least ten (10) Business Days prior to the deadline for any such submission, and New River shall submit the designated Patents in accordance with applicable Law. In addition, New River may in its discretion, and to the extent permitted by Law, submit any additional [*] that are not designated by Shire. Nothing in this Section 11.8 shall prevent or otherwise limit New River’s

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right to take any and all such actions with regard to the matters described in this Section 11.8 as required by applicable Law.

     11.9Trademarks and Copyrights.

          11.9.1Product Trademarks. All Collaboration Products shall be marketed and sold worldwide under and in connection with trademarks, trade dress, logos and slogans selected in accordance with this Section 11.9.

          11.9.2Trademark Selection. Under the supervision of the JMC, the Parties shall work together and seek to agree on the selection of trademarks, trade dress, logos and slogans for a Collaboration Product for use in the US Territory. All uses of trademark(s), trade dress, logo(s), slogan(s), and design(s) to identify and/or in connection with the sale or marketing of a Collaboration Product shall be reviewed by the JMC and shall comply with all applicable Laws (including, without limitation, those Laws and regulations particularly applying to the proper use and designation of trademarks in the applicable countries). Trademark(s), trade dress, logo(s) and slogan(s) under which Collaboration Products are marketed or sold (other than either Party’s corporate trademarks or trade names, and New River’s Carrierwave^TM mark used in connection with technology related to the Compound) shall be used only pursuant to the terms of this Agreement to identify and in connection with the marketing of Collaboration Products, and shall not be used by either Party to identify or in connection with the marketing of any other products. Each Party shall have a right to prior review and approval of all Promotional Materials incorporating any of its trademarks, trade dress, logos or slogans sufficient to permit such Party to maintain quality control over its trademarks, trade dress, logos and slogans. All trademarks shall be registered by the Party owning such trademark in its name as owner in all applicable countries. All trade dress, logos, slogans and designs may be registered by the Party owning such trade dress, logos or slogan, in the discretion of such Party, in its name as owner in all applicable countries.

          11.9.3Ownership of Trademarks. New River will continue to own, throughout the world, any trademarks, trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for a Collaboration Product which New River owns as of the Effective Date (the “New River Marks”). Shire will own, throughout the world, all other trademarks, trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for a Collaboration Product (the “Shire Marks”). All goodwill attributable to a New River Mark generated by the Commercialization of a Collaboration Product bearing a New River Mark shall inure to the benefit of New River. All goodwill attributable to a Shire Mark generated by the Commercialization of a Collaboration Product bearing a Shire Mark shall inure to the benefit of Shire. If the JMC determines, in accordance with Section 11.9.2, to use a New River Mark for the Commercialization of a Collaboration Product in the US Territory, New River shall grant to Shire, a non-exclusive, royalty-free license, with the right to grant sublicenses in accordance with Section 9.3, to use such New River Mark in the US Territory, solely in conjunction with the Commercialization of the Collaboration Products. Shire shall comply with New River’s then-current guidelines for trademark usage, a copy of which shall be provided to Shire from time to time, in connection with Shire’s use of such New River Mark. New River shall solely bear all costs of prosecution of applications to register and to record licenses (if applicable) for, and maintenance of, each New River Mark for each Collaboration Product; provided, however, that

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with respect to the US Territory, such costs will be included in Pre-Marketing Expenses or Marketing Management, as applicable. Shire shall solely bear all costs of prosecution of applications to register and to record licenses (if applicable) for, and maintenance of, each Shire Mark for each Collaboration Product; provided, however, that with respect to the US Territory, such costs will be included in Pre-Marketing Expenses or Marketing Management, as applicable.

          11.9.4Infringement of Trademarks and Copyrights. Each Party shall take all reasonable and appropriate steps to protect, defend and maintain each trademark and copyright owned by such Party hereunder for use in connection with a Collaboration Product, and all registrations therefor. Each Party shall notify the other Party promptly upon learning of any actual, alleged or threatened infringement of a trademark, trade dress, logo, slogan, copyright, or of any unfair trade practices, trade dress imitation, passing off of counterfeit goods, or like offenses. Upon learning of such offenses, the Party owning such trademark or copyright shall have the obligation to, in consultation with the other Party, institute and control an appropriate action or proceeding to halt the offense, unless the Parties otherwise mutually agree. All Recoveries in connection therewith will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, and any remaining amounts (if any) with respect to the US Territory will be included in US Product Profits for the applicable calendar year. Such other Party shall have the right to participate fully in all such actions or proceedings. During the Term, in the event that the Party owning such trademark or copyright does not undertake such an infringement action then, in the case that such owning Party is New River, Shire shall be permitted to do so and all Recoveries in connection therewith will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, and any remaining amounts (if any) with respect to the US Territory will be included in US Product Profits for the applicable calendar year. For the purposes of this Section 11.9.4, the Party that brings suit to enforce a given trademark or copyright shall also have the right to control settlement of such claim; provided, however, that no settlement shall be entered into without the written consent of the other Party, not to be unreasonably withheld, conditioned or delayed.

          11.9.5Costs of Defense. All of the unrecovered costs, expenses and legal fees (including internal costs, expenses and legal fees) incurred by the Parties in bringing, maintaining and prosecuting any action to maintain, protect or defend a trademark (or registration therefor) or copyright (or registration therefor) covering or used or intended to be used in connection with the marketing or sale of a Collaboration Product in the US Territory shall be [*].

          11.9.6Acknowledgment of Ownership. Each Party acknowledges the sole ownership by the other Party and validity of all trademarks, trade dress, logos and slogans owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product. Each Party agrees that it will not at any time during or after the Term assert or claim any interest in or do anything which may adversely affect the validity or enforceability of any trademark, trade dress, logo or slogan owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product. Neither Party will register, seek to register or cause to be registered any trademarks, trade dress, logos or slogans owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product or any variation thereof, under any law

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providing for registration of trademarks, service marks, trade names, fictitious names or similar laws, as an Internet domain name, or in the name of a corporation, partnership, limited liability company or other entity, without the other Party’s prior written consent, and neither Party will register, seek to register or cause to be registered any copyright, nor register or patent, seek to register or patent or caused to be registered or patented, of the other Party, without the other Party’s prior written consent.

ARTICLE 12
REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY

     12.1Representations, Warranties and Covenants.

          12.1.1Each of the Parties hereby represents and warrants to the other Party that, as of the Effective Date:

               (a)Such Party has full corporate right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement and that it has the right to grant the licenses and sublicenses granted pursuant to this Agreement.

               (b)This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of the Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a Party or by which it is bound, nor violate any Law of any Governmental Authority having jurisdiction over it.

               (c)Such Party has not granted any right to any Third Party that would conflict with the rights granted to the other Party hereunder.

               (d)Except for Regulatory Approvals, pricing and/or reimbursement approvals, manufacturing approvals and/or similar approvals necessary for the Development, Manufacture or Commercialization of the Compound and Collaboration Products, such Party has obtained all necessary consents, approvals and authorizations of all Government Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery and performance of this Agreement; provided, that, for clarity, it is agreed that a termination by a Party in accordance with Section 13.6 shall not be deemed to constitute evidence of a breach of this Section 12.1.1(d) .

          12.1.2Each Party hereby covenants to the other Party that, during the Term:

               (a)Such Party will not grant any right to any Third Party that would conflict with the rights granted to the other Party hereunder.

               (b)In the course of the Development of the Compound and Collaboration Products, such Party will not use any employee or consultant that is debarred by the FDA or, to such Party’s knowledge, is the subject of debarment proceedings by the FDA.

          12.1.3New River hereby represents and warrants to Shire that, as of the Effective Date:

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               (a)There is no action or proceeding pending or, to New River’s knowledge, threatened, with respect to Collaboration Products and/or the Compound, including without limitation the conduct of any clinical trials, manufacturing activities or other activities, or that questions the validity of this Agreement or any action taken by New River in connection with the execution of this Agreement. There are no material unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against New River with respect to Collaboration Products and/or the Compound, including without limitation the conduct of any clinical trials, manufacturing activities or other activities.

               (b)IND #67482 and IND #70109 (i) have been filed in the name of New River and are in effect; and (ii) to New River’s knowledge, constitutes all governmental approvals, permits and licenses required by New River in connection with the performance of clinical trials concerning the Collaboration Product or the Compound, as such clinical trials are conducted by New River. Attached hereto as Schedule 12.1.3(b) is a true, correct and complete list of all INDs and Drug Approval Applications filed with a Governmental Authority relating to the Compound or a Collaboration Product.

               (c)Intellectual Property.

                    (i)Schedule 12.1.3(c)(i)(I) sets forth a true and complete list of all Licensed Patents that [*]. Schedule 12.1.3(c)(i)(II) sets forth a true and complete list of all Patents that [*]. Such schedules contain, where relevant, all application numbers and filing dates, registration numbers and dates, jurisdiction, next action date with description for action to be taken, and notice of whether fees of any kind are yet to be paid.

                    (ii)New River has submitted all information related to the Compound, Collaboration Product and/or Licensed Patents to the United States Patent and Trademark Office required to be submitted in accordance with 37 C.F.R. 1.56, 1.97 and 1.98.

                    (iii)The Licensed Patents and Licensed Know-How constitute all intellectual property Controlled by New River that is necessary or useful to Manufacture, Develop, use or Commercialize the Compound and/or Collaboration Product for ADHD, and to the knowledge of New River there is not any other intellectual property necessary for such purposes that is not Controlled by New River.

                    (iv)Neither New River nor any of its Affiliates has received any written notice from any Third Party challenging or questioning the right of New River to use or license any of the Licensed Know-How or Licensed Patents.

                    (v)Each of New River and its Affiliates owns all right, title and interest in and to, or has a license, sublicense or otherwise permission to use and license, all of the Licensed Know-How or Licensed Patents free and clear of all encumbrances and no person other than New River (including any current or former employee or consultant of New River) has any proprietary, commercial or other interest in any of the Licensed Know-How or Licensed Patents. There are no existing agreements, options, commitments, or rights with, of or

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to any person to acquire or obtain any rights to, any of the Licensed Know-How or Licensed Patents.

                    (vi)The use or practice of the Licensed Know-How and Licensed Patents as it has been and is now being conducted do not, to the knowledge of New River, infringe or misappropriate the intellectual property rights of a Third Party. Neither New River nor any of its Affiliates has received any written notice from any person, or has knowledge of, any actual or threatened claim or assertion that the use or practice of the Licensed Patents or Licensed Know-How infringes or misappropriates the intellectual property rights of a Third Party.

                    (vii)New River has the right to grant to Shire the licenses set forth in this Agreement under the Licensed Know-How or Licensed Patents, free of any rights or claims of any Third Party and without payment of any royalties, license fees or other amounts to any Third Party.

                    (viii)All Patents within the Licensed Patents are in full force and effect, valid, subsisting and, in the case of issued Patents, enforceable, and inventorship of the Licensed Patents is properly identified on such Licensed Patents. None of the Licensed Patents is currently involved in any interference, reissue, reexamination, or opposition proceeding, and neither New River nor any of its Affiliates has received any written notice from any person, or has knowledge, of such actual or threatened proceeding.

                    (ix)To New River’s knowledge, there is [*] of any of the Licensed Know-How or Licensed Patents by [*].

                    (x)There are no actions or proceedings (including any inventorship challenges) pending or, to the knowledge of New River, threatened with respect to any of the Licensed Know-How, Licensed Patents, Compound or Collaboration Products nor have any such actions or proceedings been brought or, to the knowledge of New River, threatened during the past six (6) years, in each case which have not been resolved without impairment of New River’s rights in and to any of the Licensed Know-How, Licensed Patents, Compound or Collaboration Products and without the obligation to pay any royalties or other amounts to any Third Party with respect to the use of such technology or the sale of such products.

                    (xi)Neither New River nor any of its Affiliates has entered into any contract (A) granting any Third Party the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any of the Licensed Know-How or Licensed Patents, or (B) expressly agreeing to indemnify any Third Party against any charge of infringement of any of the Licensed Know-How or Licensed Patents.

                    (xii)Neither New River nor any of its Affiliates has entered into any contract granting any Third Party the right to control the prosecution of any of the Patents in the Licensed Patents.

                    (xiii)All current and former employees and consultants of New River and its Affiliates who are or have been substantively involved in the design, review,

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evaluation or development of the Licensed Know-How or Licensed Patents have executed written contracts or are otherwise obligated to protect the confidential status and value thereof and to vest in New River or its Affiliates exclusive ownership of the Licensed Know-How or Licensed Patents.

                    (xiv)New River has made available to or provided Shire with copies of all material information and, as requested in writing by Shire, with copies of all books, records and data, in each case with respect to Collaboration Products and/or the Compound.

                    (xv)All official fees, maintenance fees and annuities for the Licensed Patents have been paid through the Effective Date.

                    (xvi)Schedule 12.1.3(c)(i)(I) and Schedule 12.1.3(c)(i)(II) set forth a true and complete list of all registration, application, maintenance, user, or renewal fees due within one hundred eighty (180) days after the Effective Date in connection with the Licensed Know-How or Licensed Patents. Any necessary registration, application, maintenance, user or renewal fees due on or prior to the Effective Date in connection with the Licensed KnowHow or Licensed Patents have been paid in a timely manner. All applicable government requirements that must be met on or prior to the Effective Date in connection with the Licensed Know-How or Licensed Patents have been met in a timely manner with the relevant Governmental Authority.

               (d)Compliance with Law.

                    (i)New River and its Affiliates and any outsourcing company and contract research organization to which New River or its Affiliates have subcontracted activities in connection with Compound and Collaboration Products (the “Contractors”) have complied with all applicable Laws, permits, governmental licenses, registrations, approvals, concessions, franchises, authorizations, orders, injunctions and decrees, including the Act, in the research, Development, Manufacture and use of the Collaboration Product for ADHD and Compound, and neither New River nor any of its Affiliates or, to the knowledge of New River, its Contractors, has received any written notice from any Governmental Authority claiming that any such activities as conducted by them are not in such compliance.

                    (ii)Since January 1, 2002, no Governmental Authority has served notice on New River or any of its Affiliates that the Licensed Know-How or Licensed Patents were or are in violation of any Law or the subject of any investigation.

                    (iii)Since January 1, 2002, none of New River or any of its Affiliates have received written notice from any Governmental Authority that there are any circumstances currently existing that might reasonably be expected to lead to any loss or refusal to renew any material governmental licenses, permits, registrations, concessions, franchises and authorizations relating to the Collaboration Product for ADHD, Compound or any of the Licensed Know-How or Licensed Patents.

                    (iv)New River and its Affiliates have complied in all material respects with all applicable Laws in connection with the preparation and submission to the FDA of IND #67482 and #70109, and such INDs are in effect and good standing. IND #67482 and

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#70109 are the only INDs that New River or any of its Affiliates has filed with any Governmental Authority with respect to the Compound or a Collaboration Product. New River and its Affiliates have filed with the applicable regulatory authority all required notices, supplemental applications and annual or other reports, including adverse experience reports, with respect to such INDs. No Drug Approval Application has been filed with any Governmental Authority with respect to the Compound or a Collaboration Product.

                    (v)No Governmental Authority (including the FDA) has commenced or, to New River’s knowledge, threatened to initiate any action to reject or withdraw IND #67482 or #70109, or commenced or, to New River’s knowledge, threatened to initiate any action to enjoin production of the Compound or Collaboration Product at any facility, nor has New River or any of its Affiliates or, to the knowledge of New River, any of its Contractors, received any notice to such effect since January 1, 2002.

                    (vi)All manufacturing operations conducted by New River and its Affiliates and Contractors since January 1, 2002 relating to the manufacturing of the Collaboration Product for ADHD and/or Compound have been conducted in compliance with all Laws, including without limitation all cGMPs.

                    (vii)All Development activities conducted by New River and its Affiliates and Contractors since January 1, 2002 relating to the Collaboration Product for ADHD and/or Compound have been conducted in compliance with all Laws, including without limitation all cGCPs and cGLPs.

                    (viii)New River has delivered or otherwise made available to Shire copies of all substantive or material (A) reports of FDA Form 483 inspection observations, (B) establishment inspection reports, (C) warning letters, and (D) other documents that assert ongoing lack of compliance in any material respect with any applicable laws (including those of the FDA), in each case to the extent received by New River or any of its Affiliates or, to the knowledge of New River, any of its Contractors from the FDA relating to a Collaboration Product and/or Compound. Neither New River nor any of its Affiliates has received any such reports, letters or other documents from any other Governmental Authority relating to a Collaboration Product and/or Compound.

                    (ix)To New River’s knowledge, no employee or agent of New River or any of its Affiliates or Contractors has made an untrue statement of a material fact to any Governmental Authority with respect to the Collaboration Product for ADHD and/or Compound (whether in any submission to such Governmental Authority or otherwise), or failed to disclose a material fact required to be disclosed to any Governmental Authority with respect to the Collaboration Product and/or Compound.

                    (x)In the course of the Development of the Compound and Collaboration Products, New River has not used any employee or consultant that is debarred by the FDA or, to New River’s knowledge, is the subject of debarment proceedings by the FDA.

                    (xi)Representatives of New River and its Affiliates have disclosed to Shire any facts reasonably believed in good faith to be material regarding: (A)

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preclinical and clinical study results and protocols for the Collaboration Product for ADHD and/or Compound; (B) any communications to or from any Governmental Authority with respect to the Collaboration Product for ADHD and/or Compound, including IND submissions, any Governmental Authority minutes of meetings and telephone conferences; (C) any Governmental Authority requests for data and studies on the Collaboration Product for ADHD and/or Compound; and (D) adverse drug experiences and other IND safety reports with respect to the Collaboration Product for ADHD and/or Compound.

                    (xii)New River and its Affiliates do not have any knowledge of any preliminary or other results from any clinical trials relating to the lack of efficacy of the Compound or Collaboration Product in human beings.

For purposes of the foregoing sections, “New River” and “its Affiliates” shall in all cases include [*]

     12.2Limitation on Representations or Warranties. Notwithstanding anything to the contrary herein, neither Party will be in breach of any representation or warranty made pursuant to this Article 12 to the extent that the Party alleged to have so breached can demonstrate that the Party alleging such breach had, on or prior to the Effective Date, actual knowledge of such breach of such representation or warranty.

     12.3Performance by Affiliates. The Parties recognize that each may perform some or all of its obligations under this Agreement through Affiliates; provided, however, that each Party shall remain responsible for and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against an Affiliate or subcontractor, for any obligation or performance hereunder prior to proceeding directly against such Party. Wherever in this Agreement the Parties delegate responsibility to Affiliates or local operating entities, the Parties agree that such entities may not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way.

     12.4Disclaimer of Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION 12.1 OF THIS AGREEMENT, NEW RIVER AND SHIRE MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND NEW RIVER AND SHIRE EACH SPECIFICALLY DISCLAIMS ANY OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

     12.5Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR LOST PROFITS OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE

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POSSIBILITY OF SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION AND ARISING IN ANY WAY OUT OF THIS AGREEMENT. THE FOREGOING LIMITATIONS WILL NOT LIMIT EITHER PARTY’S OBLIGATIONS TO THE OTHER PARTY UNDER ARTICLE 10 AND ARTICLE 15.

     12.6Essential Basis. The Parties acknowledge and agree that the disclaimers, exclusions and limitations of liability set forth in this Article 12 form an essential basis of this Agreement, and that, absent any of such disclaimers, exclusions or limitations of liability, the terms of this Agreement, including, without limitation, the economic terms, would be substantially different.

     ARTICLE 13
TERM AND TERMINATION

     13.1Term. This Agreement shall commence as of the Effective Date and, unless sooner terminated as provided herein, shall continue in effect until the date on which the Parties are no longer Developing or Commercializing any Collaboration Product in the US Territory (the “Term”).

     13.2Breaches (General).

          13.2.1If either Party (the “Breaching Party”) shall have committed a breach of this Agreement, the other Party (the “Notifying Party”) shall provide written notice of such breach to the Breaching Party. For all allegations of breach other than an allegation of Material Breach (as defined below), the Parties hereby agree that they shall seek to resolve the matter during the notice and cure period provided in Section 13.2.2 and may thereafter commence litigation pursuant to Article 16.

          13.2.2Upon receipt of a notice of breach other than a Material Breach, the alleged Breaching Party shall have [*] within which to cure such breach following receipt of such notice ([*] in the event of non-payment unless such payment obligation is being disputed in good faith). If the matter is not resolved to the satisfaction of the Notifying Party during such cure period, then either Party may invoke the provisions of Article 16 with respect to claims for damages and other requests for equitable relief, but neither Party shall have any right to terminate this Agreement for such breach.

          13.2.3The Parties may resort to the dispute resolution mechanisms of Article 16, and may seek all remedies in law or equity other than termination of this Agreement, without invoking the mechanisms of Section 13.3.

     13.3Allegations of Material Breach.

          13.3.1The Parties intend that this Agreement shall survive breach, and shall not be terminable in the event of breach, unless the breach is [*] under this Agreement [*] to such an extent that [*] for the [*] taken as a whole [*], considered in the aggregate as a single transaction and as if set forth in a single agreement (“Material Breach”). The Parties acknowledge and agree that, so long as such breach satisfies the standard for Material Breach described in this Section 13.3.1, a Material Breach may result from a breach of this Agreement only (irrespective of

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whether any breach, material or otherwise, has occurred with respect to the ROW Agreement), the ROW Agreement only (irrespective of whether any breach, material or otherwise, has occurred with respect to this Agreement), or both agreements. In the event there is a dispute as to whether a Material Breach has occurred, this Agreement and the ROW Agreement shall survive pending a determination pursuant to Article 16 that a Material Breach has occurred. This Section 13.3 shall apply to any allegation of Material Breach, with consequences as set forth herein.

          13.3.2If a Party believes that a Material Breach has occurred, it shall give written notice to the Breaching Party of the nature of the breach and the reason the Notifying Party believes it is a Material Breach. The alleged Breaching Party shall then have a period of [*] following receipt of such notice ([*] in the event of non-payment unless such payment obligation is being disputed in good faith) in which to cure the breach; provided, however, that if the Material Breach is other than the payment of money and is capable of being cured but cannot be reasonably cured in such [*] period, then the right to terminate this Agreement and the ROW Agreement shall not arise if the allegedly Breaching Party has (a) during such period of time submitted a plan that, if successfully carried out, would be effective in curing such Material Breach, and has commenced its execution of such plan, and (b) diligently pursues such plan thereafter for a period of up to an additional [*]. Any such notice of alleged Material Breach by the Notifying Party shall include a reasonably detailed description of all relevant facts and circumstances demonstrating, supporting and/or relating to each such alleged Material Breach by the Breaching Party.

          13.3.3If the alleged Material Breach is not cured within the cure period specified in Section 13.3.2, the Notifying Party may give notice of termination (“Notice of Termination For Material Breach”). If the Breaching Party agrees that a Material Breach has occurred, then the Parties shall proceed to terminate this Agreement and the ROW Agreement in accordance with Section 13.3.5 and Article 14 of this Agreement and Section 12.3.5 and Article 13 of the ROW Agreement. If the Breaching Party does not agree that a Material Breach has occurred, then this Agreement and the ROW Agreement shall survive, and the Parties shall continue to perform their obligations hereunder, until the issue of whether there has been a Material Breach by the Breaching Party is resolved in accordance with Article 16.

          13.3.4If the Notifying Party gives Notice of Termination For Material Breach, and it is later determined by a court pursuant to Article 16 that in fact there has not been a Material Breach by the Breaching Party, then this Agreement and the ROW Agreement shall continue in full force and effect.

          13.3.5If the Notifying Party gives Notice of Termination For Material Breach and this Agreement and the ROW Agreement terminate, either because such notice is accepted by the Breaching Party or it is determined by a court pursuant to Article 16 that there has been a Material Breach by the Breaching Party, then the Notifying Party shall, within [*] after such determination, deliver written notice (the “Purchase Notice”) to the Breaching Party of the purchase by the Notifying Party of the Purchase Interest (as such term is defined below).

               (a)The price (the “Purchase Price”) to be paid to purchase the entire interests, rights and obligations of the Breaching Party and/or its Affiliates under this Agreement

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and the ROW Agreement (the “Purchase Interest”) shall be [*], it being understood and agreed that [*] shall be applied [*] and that all intellectual property rights and other assets licensed or otherwise made available by the Parties and their respective Affiliates under this Agreement and the ROW Agreement shall be [*].

               (b)Each Party shall, within [*] after the delivery of the Purchase Notice, retain an internationally recognized investment banking firm to determine the Purchase Price. Each such investment banking firm shall set forth such determination in a written report and, on a mutually agreeable date no later than [*] after the delivery of the Purchase Notice, submit such report to the other Party.

               (c)The Purchase Price shall be the amount equal to [*]. However, if [*], a third internationally recognized investment banking firm (which is independent of both Parties) shall determine such fair market value by [*]. Such third investment banking firm shall be selected by the first two investment banking firms; provided, however, that, if the two investment banking firms are unable to select a third investment banking firm within twenty (20) days following determination that [*], then each of the two initial investment banking firms shall within twenty (20) days thereafter submit the names of three internationally recognized investment banking firms (which are independent of both Parties) willing to act as the third investment banking firm hereunder, one of which firms shall be selected by lot by the Parties. The cost of such third investment banking firm shall be borne [*].

               (d)The purchase and sale of a Purchase Interest pursuant to this Section 13.3 shall be transferred free and clear of all liens and other encumbrances and shall be consummated at closing at the principal offices of the Notifying Party, on a Business Day within forty-five (45) days following the final determination of the Purchase Price, and upon at least ten (10) Business Days’ prior notice by the Notifying Party; provided that such period shall be extended for such period of time as shall be necessary in order to obtain requisite governmental or regulatory approvals. At such closing, the Notifying Party shall pay the Breaching Party the Purchase Price by wire transfer of immediately available funds. The Parties shall execute and deliver appropriate documentation, in form and substance that is reasonably acceptable, to effect the transfer of the Purchased Interest and each Party further agrees to reasonably cooperate to effect the orderly transition of any activities then being conducted by the Breaching Party and its Affiliates pursuant to this Agreement and the ROW Agreement.

               (e)The rights of the Parties set forth in this Section 13.3 are not exclusive and are in addition to any other rights or remedies available to such Party under this Agreement or the ROW Agreement, at law or in equity.

     13.4Other Termination by Shire.

          13.4.1Shire may terminate this Agreement at will at any time prior to the first Regulatory Approval of a Collaboration Product in the US Territory, effective upon [*] advance written notice to New River. At any time after the date of first Regulatory Approval of a Collaboration Product in the US Territory, Shire may terminate this Agreement effective upon [*] advance written notice to New River. In the event of termination under this Section 13.4.1 no payment shall be due on account of such termination.

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          13.4.2In addition to Shire’s termination right pursuant to Section 13.4.1, within [*] following receipt of the first Regulatory Approval of the first Collaboration Product for ADHD in the US Territory, Shire may terminate at will both this Agreement and the ROW Agreement (but not only one such agreement). If Shire exercises its right to terminate pursuant to this Section 13.4.2, such termination shall be effective [*] following written notice to New River, which shall be provided to New River within the period described in the preceding sentence. In the event of such termination:

               (a)if such Regulatory Approval provides for a [*], then New River shall make a one-time termination payment to Shire in the amount of $[*]; provided that such payment shall be made by a combination, as then agreed upon by the Parties, of the following: [*];

               (b)if such Regulatory Approval provides for a [*] of such Collaboration Product as [*], no payment shall be due.

     13.5Other Termination By New River. New River may terminate this Agreement by [*] advance written notice to Shire [*], other than the following products: (i) any Collaboration Product; (ii) any product marketed by or on behalf of Shire as of the Effective Date, as set forth on Exhibit G, and any additional dosage strengths or line extensions thereof; and (iii) those products identified by Shire’s internal nomenclature as [*], each as described on Exhibit G, it being understood that each such product [*]. For avoidance of doubt, New River shall have no right to terminate this Agreement pursuant to this Section 13.5 if Shire files for Regulatory Approval for, or Commercializes, that product identified by Shire’s internal nomenclature as [*] or any [*] as such products do not contain a [*] formulated for [*] for the treatment or prevention of ADHD and are therefore outside the scope of this Section 13.5. In the event of termination under this Section 13.5, no payment shall be due by New River to Shire on account of such termination.

     13.6Termination for Government Action.

          13.6.1During the period from the Effective Date and expiring on [*], either Party may terminate this Agreement and the ROW Agreement upon written notice to the other Party at any time, if during such time there is a decree, judgment, injunction, order, or action that restricts, prevents or prohibits the transactions contemplated by this Agreement under applicable Law; provided that no such termination shall occur for a period of [*]following the entry of such decree, judgment, injunction, order or action (which period shall be reduced to [*] if [*] in the US Territory for a Collaboration Product for an ADHD indication occurs after [*], during which period of time the Parties shall cooperate and use reasonable commercial efforts to respond to any government requests for information, and to contest and resist any such decree, judgment, injunction, order or action and to have vacated, lifted, reversed, stayed or overturned any such decree, judgment, injunction, order or action.

          13.6.2If such termination is effective prior to the accomplishment of the event described in Section 7.2(a), New River shall reimburse Shire [*] of the amount paid by Shire pursuant to Section 7.1. Such payment shall be made within one hundred twenty (120) days following termination; provided that interest shall accrue beginning on the thirty-first day after termination at the rate provided for in Section 8.1.

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          13.6.3If such termination is effective after the accomplishment of the event described in Section 7.2(a), New River shall reimburse Shire (a) [*] of the amount paid by Shire pursuant to Section 7.1, and (b) [*] of all other amounts paid by Shire pursuant to Section 7.2. Such payment shall be made within one hundred twenty (120) days following termination; provided that interest shall accrue beginning on the thirty-first day after termination at the rate provided for in Section 8.1.

     ARTICLE 14
EFFECTS OF TERMINATION

     14.1Post-Termination Activities by Shire. Without limiting any other legal or equitable remedies that New River may have, if this Agreement is terminated in accordance with Sections 9.8, 13.4, 13.5 or 13.6, or if this Agreement is terminated in accordance with Section 13.3 and Shire is the Breaching Party, then the following provisions shall apply:

          14.1.1Assignments. Shire will promptly (and in each case within sixty (60) days of receipt of New River’s request) and at no cost to New River (other than the Purchase Price, in the event of a termination pursuant to Section 13.3):

               (a)upon New River’s request, assign to New River all of Shire’s right, title and interest in and to any agreements between Shire and Third Parties that are freely assignable by Shire and that relate solely to the Development or Manufacture of any Compound or Collaboration Product in the US Territory;

               (b)assign to New River all of Shire’s right, title and interest in and to any Shire Marks (including any goodwill associated therewith), any registrations and design patents for any of the foregoing and any Internet domain name registrations for such trademarks and slogans, all to the extent solely related to a Collaboration Product in the US Territory;

               (c)assign to New River, to the extent freely assignable by Shire, the management and continued performance of any clinical trials for the Collaboration Products ongoing as of the effective date of such termination in the US Territory;

               (d)transfer to New River all of Shire’s right, title and interest in and to any and all regulatory filings and Regulatory Approvals Controlled by Shire for the Collaboration Products in the US Territory, and grant New River the right to reference any regulatory filings and Regulatory Approvals Controlled by Shire for the Collaboration Products elsewhere in the world for the purpose of Developing and Commercializing Collaboration Products in the US Territory;

               (e)to the extent that any agreement or other asset described in this Section 14.1.1 is not assignable by Shire or does not relate solely to Compound or a Collaboration Product, then such agreement or other asset will not be assigned, and upon the request of New River, Shire will take such steps as may be necessary to allow New River to obtain and to enjoy the benefits of such agreement or other asset in the form of a license or other right to the extent Shire has the right and ability to do so; and

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               (f)provide copies of any other books, records, documents and instruments to the extent related to Compound or Collaboration Product.

          14.1.2Manufacturing Activities. Shire will:

               (a)upon New River’s request, if Shire is then Manufacturing a Collaboration Product, supply New River with clinical and commercial quantities of such Collaboration Product for the shorter of (i) the period until New River or its designee has established and validated a manufacturing process for such Collaboration Product and is approved to Manufacture clinical trial and commercial supplies of such Collaboration Product or (ii) eighteen (18) months from the effective date of such termination; provided, however, that New River will [*] (as determined pursuant to Exhibit A hereof) with respect to such Collaboration Product; and

               (b)if Shire is then Manufacturing a Collaboration Product, transfer the completed manufacturing process (together with any unique mold or tooling used solely in connection therewith) for such Collaboration Product to New River or its designee upon New River’s request and at [*] cost and expense, and shall cooperate with New River to effect the transition of such Manufacturing responsibilities.

          14.1.3License Grant. Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, an exclusive, royalty-free right and license, with the right to sublicense and authorize the grant of further sublicenses, under any Shire Collaboration Patents and Shire’s rights and interest in the Joint Collaboration Patents to make, have made, use, sell, offer for sale, and import Compound or Collaboration Products affected by such termination in the Field and in the US Territory; provided, however, that New River will be responsible for any payments associated with the grant of any license pursuant to the preceding sentence (including, without limitation, any royalty or other payment obligations to an upstream licensor of any such Patents). In addition, if any Shire Know-How or technology claimed in a Shire Background Patent is then used in connection with the Manufacture, Development or Commercialization of Compound or a Collaboration Product in the US Territory, Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, a non-exclusive, royalty-free right and license, with the right to grant sublicenses, under such Shire Background Patents and Shire Know-How, to make, have made, use, sell, offer for sale, and import Collaboration Products in the Field and in the US Territory. Finally, Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, a non-exclusive, royalty-free right and license, with the right to grant sublicenses, under any copyright or Shire Confidential Information embodied in or relating to any Marketing Plan, package inserts, or other Promotional Materials relating solely to Collaboration Products in the US Territory.

          14.1.4Disclosure and Delivery. Shire will transfer to New River any Shire Collaboration Know-How and Shire Background Know-How, to the extent then used in connection with the Manufacture, Commercialization or Development of the Collaboration Products; such transfer shall be effected by the delivery of documents, to the extent such KnowHow is embodied in documents, and to the extent that such Know-How is not fully embodied in documents, Shire shall make its employees and agents who have knowledge of such Know-How

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in addition to that embodied in documents available to New River for interviews, demonstrations and training to effect such transfer in manner sufficient to enable New River to practice such Know-How as theretofore practiced by Shire.

          14.1.5Sublicensees. Each of Shire’s sublicensees with respect to any affected Collaboration Products in the US Territory at such time will continue to have the rights and license set forth in their sublicense agreements, subject to the continued performance of the obligations thereunder; provided, however, that such sublicensee agrees in writing that New River is entitled to enforce all relevant terms and conditions of such sublicense agreement directly against such sublicensee; and provided, further, that such sublicensee is not then in breach of its sublicense agreement.

          14.1.6Disposition of Inventory. New River shall have the option, exercisable within thirty (30) days following the effective date of such termination, to purchase any inventory of Collaboration Products affected by such termination at Shire’s Cost of Goods therefor. New River may exercise such option by written notice to Shire during such thirty (30)-day period. Upon such exercise, the Parties will establish mutually agreeable payment and delivery terms for the sale of such inventory. If New River does not exercise such option during such thirty (30)-day period, or if New River provides Shire with written notice of its intention not to exercise such option, then Shire and its Affiliates and sublicensees will be entitled, during the period ending on the last day of the sixth (6th) full month following the effective date of such termination, to sell any inventory of Collaboration Products affected by such termination that remain on hand as of the effective date of the termination, so long as Shire pays to New River the then-applicable portion of the US Product Profit, in accordance with the terms and conditions set forth in this Agreement.

     14.2Post-Termination Activities by New River. Without limiting any other legal or equitable remedies that Shire may have, if this Agreement is terminated in accordance with Section 13.3 and New River is the Breaching Party, then the following provisions shall apply:

          14.2.1Assignments. New River will promptly (and in each case within sixty (60) days of receipt of Shire’s request) and at no cost to Shire (other than the Purchase Price, in the event of a termination pursuant to Section 13.3):

               (a)upon Shire’s request, assign to Shire all of New River’s right, title and interest in and to any agreements between New River and Third Parties that are freely assignable by New River and that relate solely to the Development or Manufacture of any Compound or Collaboration Products;

               (b)assign to Shire all of New River’s right, title and interest in and to any New River Marks (including any goodwill therewith), including any registrations and design patents for the foregoing and any Internet domain name registrations for such trademarks and slogans, all to the extent solely related to a Collaboration Product;

               (c)assign to Shire, to the extent freely assignable by New River, the management and continued performance of any clinical trials for Collaboration Products ongoing as of the effective date of such termination;

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               (d)transfer to Shire all of New River’s right, title and interest in and to any and all regulatory filings and Regulatory Approvals Controlled by New River for Collaboration Products;

               (e)to the extent that any agreement or other asset described in this Section 14.2.1 is not assignable by New River or does not relate solely to Compound or a Collaboration Product, then such agreement or other asset will not be assigned, and upon the request of Shire, New River will take such steps as may be necessary to allow Shire to obtain and to enjoy the benefits of such agreement or other asset in the form of a license or other right to the extent New River has the right and ability to do so; and

               (f)provide copies of any other books, records, documents and instruments to the extent related to Compound or Collaboration Product.

          14.2.2Manufacturing Activities. New River will:

               (a)upon Shire’s request, if New River is then Manufacturing Compound or Collaboration Product, supply Shire with clinical and commercial quantities of such Compound or Collaboration Product for the shorter of (i) the period until Shire or its designee has established and validated a manufacturing process for such Compound or Collaboration Product and is approved to Manufacture clinical trial and commercial supplies of such Compound or Collaboration Product or (ii) eighteen (18) months from the effective date of such termination; provided, however, that Shire will [*] (as determined pursuant to Exhibit A hereof) for such Compound or Collaboration Product; and

               (b)if New River is then Manufacturing Compound or Collaboration Product, transfer the completed manufacturing process (together with any unique mold or tooling used solely in connection therewith) for such Compound or Collaboration Product to Shire or its designee upon Shire’s request and at [*] cost and expense, and cooperate with Shire to effect the transition of such Manufacturing responsibilities.

          14.2.3License Grant. Each license granted by New River to Shire pursuant to Section 9.1 shall, effective upon such termination of this Agreement, become an exclusive, perpetual, non-terminable, royalty-free right and license, with the right to sublicense and authorize the grant of further sublicenses, and shall include the right to Manufacture Compound.

          14.2.4Disclosure and Delivery. New River shall transfer to Shire any Licensed Know-How, to the extent then used in connection with the Manufacture, Commercialization or Development of the Collaboration Products; such transfer shall be effected by the delivery of documents, to the extent such Know-How is embodied in documents, and to the extent that such Know-How is not fully embodied in documents, New River shall make its employees and agents who have knowledge of such Know-How in addition to that embodied in documents available to Shire for interviews, demonstrations and training to effect such transfer in manner sufficient to enable Shire to practice such Know-How as theretofore practiced by New River.

          14.2.5Sublicensees. Each of New River’s sublicensees with respect to any affected Collaboration Products at such time will continue to have the rights and license set forth in their sublicense agreements, subject to the continued performance of the obligations

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thereunder; provided, however, that such sublicensee agrees in writing that Shire is entitled to enforce all relevant terms and conditions of such sublicense agreement directly against such sublicensee; and provided, further, that such sublicensee is not then in breach of its sublicense agreement.

          14.2.6Disposition of Inventory. Shire shall have the option, exercisable within thirty (30) days following the effective date of such termination, to purchase any inventory of Compound or Collaboration Products at New River’s Cost of Goods therefor. Shire may exercise such option by written notice to New River during such thirty (30) day period. Upon such exercise, the Parties will establish mutually agreeable payment and delivery terms for the sale of such inventory.

     14.3Accrued Rights. Termination of this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to the effective date of such termination. Such termination will not relieve a Party from obligations that are expressly indicated to survive the termination of this Agreement.

     14.4Confidential Information. Any Confidential Information assigned pursuant to this Article 14 by the non-terminating Party shall thereafter be considered Confidential Information of the terminating Party and may be used by the terminating Party without regard to the restrictions otherwise imposed by Article 10.

     14.5Survival. The following Articles and Sections, together with any definitions used or exhibits referenced therein, will survive any termination or expiration of this Agreement: Sections 3.9 (to the extent required by Law), 4.8.3, 4.8.4, 4.9.8, 4.9.9, 8.6, 11.1, 11.9.3, 11.9.6, 12.4, 12.5, 12.6, 13.3.5, 16.2, and 16.4, and Articles 10, 14, 15 (as to activities arising prior to the termination), and 17.

     14.6Liability Following Termination. In the event that either Party has rights to a Collaboration Product following termination of this Agreement, such Party shall be solely responsible for all liabilities associated with such Collaboration Product arising after the effectiveness of such termination.

ARTICLE 15
INDEMNIFICATION; INSURANCE

     15.1Indemnification.

          15.1.1Indemnification by Shire. Shire hereby agrees to save, defend and hold New River, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a Third Party (each a “Third Party Claim”) resulting directly from [*] by [*] of any [*] pursuant to this Agreement, [*] the [*] by [*] or their [*] in [*] under this Agreement, [*] in connection with [*] hereunder; in each case except to the extent that such Losses result from the negligence or willful misconduct of New River.

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          15.1.2Indemnification by New River. New River hereby agrees to save, defend and hold Shire, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting directly from [*] by [*] of any [*] the [*] by [*] or their [*] in [*] under this Agreement, or [*] in connection with the [*] hereunder; in each case except to the extent that such Losses result from the negligence or willful misconduct of Shire.

          15.1.3The rights of indemnification under this Section 15.1 shall be subject to the provisions of Sections 15.2 through 15.8 and Section 4.9.9.

     15.2Notice of Claim. All indemnification claims in respect of any indemnitee seeking indemnity under Section 15.1 (collectively, the “Indemnitees” and each an “Indemnitee”) will be made solely by the corresponding Party (the “Indemnified Party”). The Indemnified Party will give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to base a request for indemnification under Section 15.1, but in no event will the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such Third Party Claim. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party will furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defense of such Third Party Claim.

     15.3Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification as provided for in Sections 15.1.1 and 15.1.2 by giving written notice to the Indemnified Party within [*] after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim.

     15.4Right to Participate in Defense. Without limiting Section 15.3, any Indemnitee will be entitled to participate in, but not control, the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment will be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 15.3 (in which case the Indemnified Party will control the defense).

     15.5Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the business of the

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Indemnitee in any manner, and as to which the Indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, will deem appropriate (provided, however that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and will transfer to the Indemnified Party all amounts which said Indemnified Party will be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 15.3, the Indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent will be at the Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with Section 15.3 will not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee will admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 15.3.

     15.6Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will, and will cause each other Indemnitee to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation will include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.

     15.7Expenses of the Indemnified Party. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim will be reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

15.8Product Claims.

          15.8.1 New River shall be solely responsible for all Losses from Third Party Claims resulting directly from either (a) the use or administration of the Compound by New River prior to the Effective Date or (b) the conduct of clinical testing of the Compound by New River (including such clinical tests that commenced prior to and continuing after the Effective Date).

          15.8.2Notwithstanding Sections 15.1.1 and 15.1.2, but subject to Section 15.8.1, [*] shall be responsible for Losses [*] from [*] from the [*] of [*] (including, without limitation, [*] to any

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[*] or any [*] other than [*]), and [*] from [*] of the [*] any [*] to [*]; in each case to the extent such claim arises, directly or indirectly, out of activities related to the US Territory (each, a “Product Claim”). All Product Claims shall be [*].

          15.8.3Each Party shall give the other prompt written notice of any Product Claim (actual or potential), but the omission of such notice shall not relieve either Party from its obligations under this Section 15.8, except to the extent the other Party can establish actual prejudice and direct damages as a result thereof. [*] shall assume the lead role in the defense of such Product Claim; provided, however, that all costs and expenses of such defense shall be [*]. [*] shall consult with [*] on all material aspects of, and shall obtain the prior written consent of [*] (such consent not to be unreasonably withheld, refused, conditioned or delayed) in respect of any material decisions to be taken with regard to, the defense, including without limitation settlement of such Product Claim, and [*] shall have a full opportunity to participate in decision-making process with respect to the strategy of such defense, and the Parties shall cooperate fully with each other in connection therewith. [*] shall also have the right to participate in the defense of any Product Claim utilizing attorneys of its choice, at its own expense. In furtherance of the Parties’ cooperation, [*] will consult with [*] regarding strategic decisions, including without limitation the retention of counsel and defense of each Product Claim. [*] will otherwise keep [*] fully informed of the status and progress of the defense and any settlement discussions concerning the Product Claim.

     15.9Insurance. Each Party will obtain and keep in force, through self insurance or otherwise, in a form reasonably acceptable to the other Party hereto, insurance in scope and amount as required by law applicable to a Party’s activities hereunder and such additional amounts as may be reasonably necessary to cover such Party’s indemnity obligations under this Agreement with scope and coverage as is normal and customary in the biotechnology/pharmaceutical industry generally for parties similarly situated. It is understood that such insurance will not be construed to limit a Party’s liability with respect to its indemnification obligations under this Article 15. Each Party will, except to the extent self insured, provide to the other Party upon request a certificate evidencing the insurance such Party is required to obtain and keep in force under this Article 15. Such certificate will provide that such insurance will not expire or be cancelled or modified without at least thirty (30) days’ prior notice to the other Party.

     15.10Guaranty. In consideration of the rights granted to Shire under this Agreement, and to induce New River to enter into this Agreement, Shire Pharmaceuticals Group PLC hereby unconditionally guarantees in favor of New River the full payment and performance by Shire of all obligations of Shire under this Agreement, in accordance with the terms and conditions of this Agreement, including any applicable notice or cure periods. This guaranty shall be enforceable after the failure by Shire to perform any obligation it may have under this Agreement in accordance with its terms, and shall be effective regardless of the solvency or insolvency of Shire at any time, the extension or modification of the obligations of this Agreement by operation of law, or the subsequent reorganization, merger, consolidation or other restructuring of Shire. Shire Pharmaceuticals Group PLC hereby expressly waives any requirement that New River exhaust any right, power or remedy under Article 16, or proceed against any other Shire entity under Article 16, for any obligation or performance hereunder prior to proceeding directly against Shire Pharmaceuticals Group PLC under this Section 15.10.

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     ARTICLE 16
DISPUTE RESOLUTION

     16.1Disputes. For all matters other than those delegated to the JDC, JMC or JSC under this Agreement, the Parties hereby agree that the dispute shall be referred to a senior executive of New River and a senior executive of Shire (the “Representatives”). If any such matter has not been resolved within [*] of such referral to the Representatives either Party may invoke the provisions of Section 16.2 for such dispute. No dispute resolution procedure set forth in this Agreement shall be construed as an agreement to arbitrate under any federal or state arbitration law, including but not limited to the Federal Arbitration Act, and shall not deprive a court of competent jurisdiction from resolving any dispute arising under, or related to, this Agreement. In the event of any dispute between the Parties arising in connection with Article 11 of this Agreement, the Parties agree that the dispute resolution described under this Article 16 will be conducted with sufficient dispatch to prevent loss of patent rights in the disputed subject matter.

     16.2Litigation. Any dispute that is not resolved as provided in the preceding Section 16.1, whether before or after termination of this Agreement, may be submitted by either Party only to any court of competent jurisdiction in the United States.

     16.3Injunctive Relief. Notwithstanding anything to the contrary in this Agreement, either Party will have the right to seek temporary injunctive relief in any court of competent jurisdiction as may be available to such Party under the laws and rules applicable in such jurisdiction with respect to any matters arising out of the other Party’s performance of its obligations under this Agreement.

     16.4Governing Law. Resolution of all disputes arising out of or related to this Agreement or the performance, enforcement, breach or termination of this Agreement and any remedies relating thereto, shall be governed by and construed under the substantive laws of the State of New York, without regard to conflicts of law rules that would provide for application of the law of a jurisdiction outside New York.

     ARTICLE 17 MISCELLANEOUS

     17.1Entire Agreement; Amendment. This Agreement, together with the ROW Agreement, including the exhibits attached hereto and thereto (each of which is hereby and thereby incorporated herein and therein by reference), sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements (including the January Agreement) and understandings between the Parties, except for the Existing NDA, which will continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date, and the Material Transfer Agreement between Shire Pharmaceuticals Inc. and New River dated January 7, 2005. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding

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upon the Parties unless reduced to writing and signed by an authorized officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises, agreements, warranties, representations, conditions, and understandings set forth herein are made and deemed effective as of the Effective Date, notwithstanding the execution of this Agreement and the ROW Agreement, and that the execution of this Agreement and the ROW Agreement shall not constitute a waiver of any right or claim of either Party as of the Effective Date.

     17.2Force Majeure. Each Party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure shall include conditions beyond the control of the Parties, including without limitation, an act of God, voluntary or involuntary compliance with any regulation, law or order of any government, war, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe; provided, however, the payment of invoices due and owing hereunder shall not be delayed by the payer because of a force majeure affecting the payer, unless such force majeure specifically precludes the payment process.

     17.3Notices. All notices or other communications that are required or permitted under this Agreement will be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication will be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For New River:	New River Pharmaceuticals Inc.
	The Governor Tyler
	1881 Grove Avenue
	Radford, VA 24141
	Phone: (540) 633-7978
	Fax: (540) 633-7939
	Attention: President
with a copy to:	Cooley Godward LLP
	5 Palo Alto Square
	3000 El Camino Real
	Palo Alto, CA 94306-2155
	Phone: (650) 843-5000
	Fax: (650) 849-7400
	Attention: Robert L. Jones

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For Shire:	Shire Pharmaceuticals Group plc
	Hampshire International Business Park
	Chineham, Basingstoke
	Hampshire, RG24 8EP
	ENGLAND
	Fax: 011 44 125 689 4710
	Attention: General Counsel
	Shire Pharmaceuticals
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center
	Princeton, NJ 08540
	Fax: (609) 919-6701
	Attention: Randall B. Sunberg

     17.4Independent Contractors. In making and performing this Agreement, Shire and New River shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and New River and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. Except as otherwise provided in this Agreement, each Party shall be solely responsible for its own costs and expenses associated with this Agreement.

     17.5Non-Solicitation. From and after the Effective Date until the [*] the termination or expiration of this Agreement, neither Party shall, and shall cause each of its Affiliates not to, directly or indirectly, without the other Party’s prior written consent, solicit the employment of any employee (or former employee bound by a non-competition obligation) of the other Party or its Affiliates with whom it has come in contact in conducting activities under this Agreement; provided, however, that the foregoing provisions shall not apply to (a) a general advertisement or solicitation program that is not specifically targeted at such persons or (b) the solicitation of any employee after such time as such employee’s employment has been terminated by the other Party or its Affiliate.

     17.6Maintenance of Records. Each Party shall keep and maintain all records required by Law with respect to Products and shall make copies of such records available to the other Party upon reasonable request.

     17.7United States Dollars. References in this Agreement to “Dollars” or “$” shall mean the legal tender of the United States of America.

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     17.8No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

     17.9Assignment. Neither Party will sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of Law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent may be granted, withheld or conditioned at such other Party’s sole and absolute discretion); provided, however, that either Party may assign or transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other Party (a) to any Affiliate of such Party, or (b) to any Third Party with which it merges or consolidates, or to which it transfers all or substantially all of its assets. The assigning Party (unless it is not the surviving entity) will remain jointly and severally liable with, and will guarantee the performance of, the relevant Affiliate or Third Party assignee under this Agreement, and the relevant Affiliate assignee, Third Party assignee or surviving entity will assume in writing all of the assigning Party’s obligations under this Agreement. Any purported assignment or transfer in violation of this Section 17.9 will be void ab initio and of no force or effect. Upon any such assignment by New River pursuant to clause (b) of this Section 17.9 to a Third Party with a product that has received Regulatory Approval and that competes with any Collaboration Product, any and all ongoing and future Co-Promotion rights and activities of New River (and any such New River assignee) pursuant to Article 5 hereof or otherwise with respect to the applicable Collaboration Product shall automatically terminate and be of no further force and effect if such Third Party does not divest of such competing product.

     17.10Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

     17.11Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

     17.12Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

     17.13Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.

     17.14Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

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     17.15No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

[Signature Page Follows.]

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     IN WITNESS WHEREOF, the Parties have executed this United States Collaboration Agreement in duplicate originals by their proper officers as of the date first written above.

NEW RIVER PHARMACEUTICALS INC.			SHIRE LLC
By:	/s/ Randal J. Kirk		By:	/s/ Matthew Emmens
	Name:	Randal J. Kirk		Name:	Matthew Emmens
	Title:	Chief Executive Officer		Title:	CEO
			SHIRE PHARMACEUTICALS GROUP PLC
			By:	/s/ Matthew Emmens
				Name:	Matthew Emmens
				Title:	CEO

EXHIBIT A

DETERMINATION OF CERTAIN ACCOUNTING TERMS

Upon the request of either Party from time to time, each Party will reasonably consider suggestions from the other Party to review and clarify and possibly expand any of the definitions in this Exhibit A or any of the financial terms defined in Article 1, including financial terms whose definition is referred to in the table at the end of Article 1; provided that no changes shall be made without the written consent of both Parties.

1. COST OF GOODS SOLD

     The provisions of this section shall govern the determination of the cost of a unit of Compound or Collaboration Product. The accumulated costs of such unit as determined hereunder shall be referred to as “Cost of Goods.” When such unit is sold or transferred to Shire, in the case of New River, or to a Third Party, in the case of Shire, the Cost of Goods of such unit shall become the unit’s Cost of Goods Sold, subject to the selling Party’s inventory flow methods adopted.

1.1.	New River’s Cost of Goods. If the Manufacture of Compound and/or Collaboration Product is performed, in any part, by one or more Third Party Manufacturer(s) on behalf of New River, New River’s Cost of Goods shall equal [*].
1.2.	Shire’s Cost of Goods. Relating to Collaboration Product transferred to it from New River, Shire’s Cost of Goods shall equal [*].
1.3.	Compound and/or Collaboration Product Manufactured by a Party. If the Manufacture of Compound and/or Collaboration Product is performed directly by a Party, the Party conducting such activities may propose to the other Party a methodology to determine the Cost of Goods pursuant to a cost accounting system based on standard costs, and the Parties shall negotiate in good faith to agree upon such methodology. The Parties agree and acknowledge that, if New River undertakes to Manufacture Compound and/or Collaboration Product directly, [*] by the Parties in determining New River’s Cost of Goods. Similarly, if Shire undertakes to Manufacture Collaboration Product directly (pursuant to Shire’s rights under the Agreement), [*] by the Parties in determining Shire’s Cost of Goods.
1.4.	Cost Adjustments. If any adjustment to New River’s Cost of Goods of a particular quantity of Compound and/or Collaboration Product arises by way of any adjustment to New River’s actual costs incurred and payable to a Third Party Manufacturer subsequent to the transfer of such quantity to Shire, New River shall promptly notify Shire of such adjustment and the

Parties shall reflect such adjustment for all applicable purposes under this Agreement.

2. MARKETING EXPENSES

     “Marketing Expenses” shall be the sum of Marketing Management, Market and Consumer Research, Advertising, Trade Promotion, Detailing Expenses and Education Expenses (as each is described below), and all other costs as subsequently may agreed by the Parties in writing that are attributable to the sale, promotion or marketing of a Collaboration Product, in all cases to the extent attributable to the US Territory and the Field.

     “Marketing Management” shall include [*].

     “Market and Consumer Research” shall include [*].

     “Advertising” shall mean [*]. “Trade Promotion” shall include [*].

     “Detailing Expenses” shall include [*].

     “Education” shall include [*].

3. DISTRIBUTION EXPENSES

     “Distribution Expenses”shall be [*]; provided, that such Distribution Expenses shall not include an allowance or consideration for freight or other expenses of distributing Collaboration Products to the extent that such expenses are included as deductions from the Invoiced Amount in determining Net Sales under this Agreement.

4.REGULATORY EXPENSES

     “Regulatory Expenses” shall means all costs incurred to comply with and to maintain all Regulatory Approvals and all regulatory agencies, including FDA user and other fees, reporting, and other regulatory affairs activities, including post-marketing safety surveillance and reporting.

5.ALLOCATION OF COSTS.

     Except as it relates to appropriately allocating an item of expense or cost to more than one category of expense or cost under this Agreement, no item of expense or cost shall be treated as being a part of more than one category of expense or cost under this Agreement.

     As defined above, generally, Marketing Expenses include [*] related to the Marketing of Collaboration Product.

EXHIBIT B

CALCULATION OF US PRODUCT PROFIT SHARE FOR SCHEDULE II
CLASSIFICATION

[*]

EXHIBIT C

INITIALDEVELOPMENTPLAN

     New River Pharmaceuticals Inc.
Initial NRP104Development Plan (Pediatric)

[*]

EXHIBIT D

ADDITIONAL SUPPLY TERMS

The following sets forth an outline of the principal terms of a supply agreement (the “Supply Agreement”) to be negotiated pursuant to Section 6.4 of the United States Collaboration Agreement. In each case, the terms hereof and of the Supply Agreement will be subject to the Parties’ rights and obligations under the United States Collaboration Agreement.

1. Delivery. Compound or Collaboration Product supplied by New River to Shire shall be delivered to a facility designated by Shire and otherwise in accordance with the applicable Third Party Manufacturer Agreement.

2. Shortage of Materials.

(a)

In the event that the materials and/or resources required to manufacture and deliver Compound or Collaboration Product to Shire in a timely manner are, or are reasonably anticipated to become, in short supply such that New River may be unable to provide Shire with the quantities of Compound or Collaboration Product forecast by Shire under the Supply Agreement, New River shall notify Shire of such shortage as promptly as practicable. If New River so notifies Shire, New River and Shire shall promptly meet to discuss how to address the potential shortage.

(b)

In the event that New River, at any time, has any information indicating that it may not be able to supply Shire with all forecasted or ordered quantities of Compound or Collaboration Product (whether or not New River may be at fault), New River shall immediately provide Shire a written notice to that effect.

3. Quality Assurance. The Parties shall enter into a Quality Agreement (the “Quality Agreement”) which shall set forth certain obligations of each Party regarding the manufacture and supply of Compound or Collaboration Product. As more specifically set forth in the Quality Agreement, New River shall be responsible for all aspects of its supply chain regarding the Compound or Collaboration Product, including without limitation quality control, quality assurance, release testing and stability testing.

4. Specifications. The specifications for Compound or Collaboration Product, including the necessary documentation, certificates of analysis and test results, will be established according to the procedures set forth in the Collaboration Agreement.

5. Location of Manufacturing. [*]. Should New River desire to change any of the manufacturing sites for Compound or Collaboration Product, or any component thereof, to a site other than those designated in the applicable Regulatory Approval, New River shall notify Shire in writing and the Parties shall thereafter meet to discuss the potential consequences of such a change. [*].

6. Back-Up Manufacturing Rights. If New River fails to supply at least [*] of Shire’s requirements for a Collaboration Product on a rolling [*] (a “Failure to Supply”), then Shire may, by providing written notice within [*] of the occurrence of such Failure to Supply, elect to assume manufacturing of such Collaboration Product. If Shire elects to assume the manufacturing of a Collaboration Product (or if Shire is a back-up manufacturer pursuant to Section 6.3), the following provisions shall be applicable:

(a)	Transfer of Manufacturing Technology. New River, [*], shall be responsible for providing Shire with the documentation, know-how and technical assistance necessary for the successful implementation of the manufacturing process at a location to be designated by Shire. To the extent practicable, New River shall continue to supply Shire with its needs of Collaboration Product under the terms of the Supply Agreement until Shire is capable of doing so.
(b)	Documentation to be Provided by New River. In particular, in connection with the transfer of the manufacturing technology for a Collaboration Product, New River shall provide the following to Shire:
	(i)	Copies of [*] related to manufacturing the Collaboration Product;
	(ii)	A list of all [*] in the production of the Collaboration Product;
	(iii)	Copies of all [*], for the Collaboration Product;
	(iv)	Copies of all [*];
	(v)	All necessary [*] necessary to manufacture the Collaboration Product and copies of any [*]; and
	(vi)	Such other documentation as the Parties may agree.
(c)	Audit of New River Procedures. The Supply Agreement will contain reasonable and customary provisions allowing Shire to inspect and audit those portions of the sites at which the Collaboration Product is manufactured in connection with the transfer of manufacturing technology for a particular Collaboration Product. Any information obtained by Shire through such inspections and audits or reviews of documentation shall be treated as confidential information of New River, subject to the confidentiality obligations under Article 10.
(d)	Access to New River Personnel. New River shall make available to Shire, for a reasonable period of time, all manufacturing and operations [*] necessary to support the transfer of the manufacturing technology to Shire, including the [*] for the validation and qualification of the transferred manufacturing protocol. These [*] in the implementation of the manufacturing technology until all Installation Qualification, Operation Qualification and Process Qualification procedures have been completed successfully.

7. Forecasts. Following the execution of the Supply Agreement, Shire will give to New River a [*] rolling forecast of Shire’s estimated monthly requirements of Compound or Collaboration Product. The first [*] of the forecast shall be binding and the remainder shall be a good faith estimate of Shire’s requirements. However, for each of the [*] in each such forecast, although the quantities forecast may exceed [*], the supply obligations of New River shall not exceed [*] of the amount forecast for such month in the previous forecast. Shire will provide New River with monthly binding purchase orders for Compound or Collaboration Product in accordance with the binding portion of the rolling forecast.

8. Quality Complaints. New River shall be primarily responsible for handling product quality complaints related to Compound or Collaboration Product. Each Party shall promptly advise the other of any such quality complaints with respect to Compound or Collaboration Product.

9. Representations and Warranties. New River shall make, and shall cause its Affiliates to make, representations and warranties regarding the Compound or Collaboration Product supplied under the Supply Agreement, including, without limitation, the following representations and warranties:

(a)      All Compound or Collaboration Product shall (i) be manufactured in accordance with the then-current good manufacturing practices of all applicable Regulatory Authorities in countries reasonably designated by Shire from time to time, and all other applicable laws, at the time of delivery of Compound or Collaboration Product, (ii) comply with the specifications at the time of delivery.

In addition, for purposes of avoiding prosecution under the Act only, New River will guarantee that any Compound or Collaboration Product delivered under the Supply Agreement (i) shall not be adulterated or misbranded within the meaning of the Act and applicable foreign equivalents at the time of delivery to Shire, and (ii) is not an article that may not, under the Act (or applicable foreign equivalents), be introduced into interstate commerce.

10. Covenants. New River shall make, and shall cause its Affiliates to make, covenants relating to Compound or Collaboration Product supplied under the Supply Agreement, including, without limitation, the following covenants:

(a)	New River shall, and require its Affiliates and Third Party contract manufacturers, if any, to maintain all regulatory and governmental permits, licenses and approvals that may be necessary to manufacture and ship Compound or Collaboration Product.
(b)	New River shall advise Shire of any information that arises out of New River’s or its Affiliates’ or Third Party contract manufacturers’ activities of which it is aware, that have adverse regulatory compliance and/or reporting consequences concerning Compound or Collaboration Product.

(c)	New River shall promptly advise Shire of any requests by any Regulatory Authority for inspections at the premises of New River or its Affiliates or Third Party contract manufacturers, with respect to Compound or Collaboration Product.
(d)	In the event New River or its Affiliates or Third Party contract manufacturers are inspected by any Regulatory Authority relating to Compound or Collaboration Product, [*]. New River shall promptly notify Shire of any alleged violations or deficiencies relating to a facility at which Compound or Collaboration Product is manufactured, packaged or stored, and shall promptly disclose to Shire all relevant portions of any notice of observations or potential violations as well as a copy of its or its Affiliates’ or Third Party contract manufacturers’ response thereto.
(e)	For the purpose of permitting a quality and compliance audit, New River shall grant to authorized representatives of Shire (or a Third Party hired on behalf of Shire who is reasonably acceptable to New River), upon reasonable notice, access to areas of each of its plants, and permit Shire access to areas of New River’s and its Affiliates’ and, to the extent practicable, Third Party contract manufacturers’ plants, at such times as Compound or Collaboration Product is being manufactured, packaged or tested; provided, that Shire’s audit of any Third Party facilities will be subject to reasonable and customary confidentiality and non-use obligations.
(f)	Shire shall have the right to examine those technical records made by New River or its Affiliates or Third Party contract manufacturers that relate to the manufacture of Compound or Collaboration Product; provided, that such records will be subject to reasonable and customary confidentiality and non-use obligations.
(g)	New River shall ensure that its Third Party contract manufacturers agree[*].

11. Nonconforming Goods. If a shipment of Compound or Collaboration Product fails, at the time of delivery, to comply with the applicable specifications, and Shire notifies New River of such nonconformity ([*]) within [*] following Shire’s receipt of such shipment, then New River will replace, at no additional expense to Shire, such Compound or Collaboration Product as soon as reasonably practicable after receipt of notification of nonconformity. Any dispute regarding whether a shipment of Compound or Collaboration Product conforms with the applicable specifications will be submitted to an independent laboratory mutually acceptable to the Parties for final resolution. The costs of retaining the laboratory will be included in Cost of Goods for the US Territory and will be borne by the Party whose evaluation of the applicable shipment of Compound or Collaboration Product is mistaken in the ROW Territory.

12. Payment Terms. Shire will pay New River [*] for any quantity of Compound and Collaboration Product provided under the Supply Agreement. At the time of each shipment, New River shall invoice Shire, and Shire shall pay for such shipment within [*] of receipt of each such invoice.

13. Additional Provisions. In addition to more detailed terms regarding the matters specified above in this Exhibit D, the Supply Agreement shall contain other customary supply agreement provisions.

	EXHIBIT E
	JOINT PRESS RELEASE
Shire Pharmaceuticals Group plc
Hampshire International Business Park,
Chineham, Basingstoke RG24 8EP UK
Tel +44 1256 894000 Fax +44 1256 894708
http://www.shire.com
New River Pharmaceuticals
1881 Grove Avenue
Radford, VA 24141
Tel +1 540 633 7978 Fax: +1 540 633 7979
http://www.nrpharma.com

For immediate release

[*] (ET) [*] (GMT)

Shire and New River announce collaboration on Phase 3 ADHD drug candidate

BASINGSTOKE, UK, PHILADELPHIA, PA, US and RADFORD, Va., US January 31, 2005— Shire Pharmaceuticals Group plc (LSE: SHP; NASDAQ: SHPGY; TSX: SHQ) and New River Pharmaceuticals Inc. (NASDAQ: NRPH) announced today the signing of an agreement for the global commercialization of NRP104, New River’s Phase 3 compound for treatment of Attention Deficit Hyperactivity Disorder (ADHD), as well as for other potential indications.

Under the terms of the agreement the parties will collaborate on NRP104 development, manufacturing, marketing and sales in the US. Shire will book the product sales and New River may supply up to 25% of the sales effort under a co-promotion right. New River will be financially and operationally responsible for clinical and manufacturing development.

Upon U.S. Food and Drug Administration (FDA) approval, the parties will divide operating profit in accordance with the following general principles: Shire will retain 75% of profits for the first two years following launch and the parties will share the profits equally thereafter.

In the rest of the world, Shire has a license to develop and commercialize NRP104 and New River will receive a low double-digit royalty on net sales.

Shire pays an initial sum of US$50 million on signing, a further US$50 million upon acceptance of filing of the New Drug Application by the FDA and up to US$300 million in milestone payments depending on the characteristics of the FDA-approved product labeling. An additional US$100 million milestone would be payable as a sales bonus upon achieving a significant sales target. Shire currently plans to expense the first two US$50 million payments, and to capitalize and amortize the milestone payments and the sales bonus over the life of the product.

Shire may be entitled to refunds of amounts previously paid in the event of a delayed product approval, or upon FDA approval depending on the characteristics of the approved product labeling.

Matthew Emmens, Chief Executive of Shire, said:

“This is a strong addition to our ADHD portfolio and complements the development strategy of Shire and its pipeline. NRP104 is in late stage development and we are encouraged by the data that we have seen to date and hope that the new drug has similar efficacy of currently marketed ADHD treatments with potential additional advantages. Importantly, NRP104 could become a global ADHD product. We have structured the financial payments for this collaboration to reflect the potential of the new drug and look forward to progressing this product with New River.”

R.J. Kirk, Chairman and Chief Executive Officer of New River, said:

“We are delighted to announce this collaboration with Shire, a company that we believe will bring substantial value to this project as we plan and hopefully execute the commercialization of NRP104. Shire’s CNS expertise and leadership position in the ADHD market allows them to significantly contribute to this collaboration in a manner that we believe will optimally serve the interests of our shareholders. We therefore believe that Shire will be our ideal partner for this product and we look forward to working with their outstanding team to fully realize the potential of NRP104.”

For further information please contact:

Shire Pharmaceuticals Group plc
Investor Relations
Cléa Rosenfeld (UK and Europe)	+44 1256 894 160
Brian Piper (US and Canada)	+1 484 595 8252

Media
Jessica Mann (UK and Europe)	+44 1256 894 280
Matthew Cabrey (US)	+1 484 595 8248

New River Pharmaceuticals Inc.
Investor Relations
John Quirk	+1 646 536 7029
jquirk@theruthgroup.com
Media
Zack Kubow	+1 646 536 7020
zkubow@theruthgroup.com

Notes to editors

Shire
Shire Pharmaceuticals Group Plc is a global pharmaceutical company with a strategic focus on meeting the needs of the specialist physician and currently focuses on developing projects and marketing products in the areas of central nervous system, gastrointestinal and renal diseases. Shire has operations in the world’s key pharmaceutical markets (U.S., Canada, U.K., France, Italy, Spain and Germany).

For further information on Shire, please visit the Company’s website: www.shire.com

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization, the impact of competitive products, including, but not limited to, the impact of those on Shire’s Attention Deficit & Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal challenges relating to Shire’s ADHD franchise, government regulation and approval, including but not limited to the expected product approval dates of METHYPATCH® (methylphenidate) and NRP104, including its scheduling classification by the Drug Enforcement Agency in the United States, Shire’s ability to secure new products for development, the implementation of the current reorganization and other risks and uncertainties detailed from time to time in Shire’s filings, including its Annual Report on Form 10-K for the year ended December 31, 2003, with the Securities and Exchange Commission.

New River
New River Pharmaceuticals Inc. is a specialty pharmaceutical company focused on developing novel pharmaceuticals that are safer and improved versions of widely-prescribed drugs, including amphetamines and opioids.

For further information on New River, please visit the company’s website at www.nrpharma.com.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking information that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private

Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of New River Pharmaceuticals, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in the New River Pharmaceuticals Inc. final prospectus filed on August 5, 2004, under Rule 424(b) of the Securities Act of 1933, as amended; the ability to successfully execute the collaboration with Shire within a reasonable timeframe or at all; the progress of our product development programs; the status of our preclinical and clinical development of potential drugs, the likely success of our drug products in clinical trials and the regulatory approval process, particularly whether and under what circumstances NRP104 will be approved by the FDA; the ability to develop, manufacture, launch and market NRP104; our projections for future revenues, profitability and ability to achieve certain sales targets; our estimates regarding our capital requirements and our needs for additional financing; the likely scheduling and labeling of NRP104; our ability to attract partners with acceptable development, regulatory and commercialization expertise; the likelihood of regulatory approval under Section 505(b)(2) under the Federal Food, Drug, and Cosmetic Act; the expected benefits of NRP104 such as efficacy and potential advantages; our ability to develop safer and improved versions of widely-prescribed drugs; and our ability to obtain favorable patent claims. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. New River Pharmaceuticals does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in New River Pharmaceuticals’ final prospectus filed with the SEC on August 5, 2004, under Rule 424(b) of the Securities Act of 1933, as amended, as well as other public filings with the SEC.

EXHIBIT F

TECHNICAL TRADE SECRETS

     Compound means the compound currently identified by New River as NRP104 with the chemical structure [*] and any isomers, salts, solvates, polymorphs, esters and derivatives of any of the foregoing, in each case where an active moiety of such compound is [*].

EXHIBIT G

CERTAIN PRODUCTS OF SHIRE

Development Projects

[*]

Marketed Stimulant Products

[*]

SCHEDULE 3.7

NEW RIVER SUBCONTRACTORS

NAME OF THIRD PARTY	ACTIVITIES PERFORMED / TO BE PERFORMED
[*]	Manufacture of Drug Substance (API)
[*]	Animal toxicology and pharmacokinetic studies
[*]	Bioanalytical method development and sample analysis; animal PK studies
[*]	Gene toxicology studies
[*]	Bioanalytical method development and sample analysis; human PK studies
[*]	In vitro toxicology, liver metabolism and P450 studies
[*]	Juvenile animal toxicology studies
[*]	Drug Packaging and labeling for clinical trials
[*]	CRO for all clinical studies

SCHEDULE 6.1.1

NEW RIVER MANUFACTURING CONTRACTORS AND ACTIVITIES

NAME OF THIRD PARTY	ACTIVITIES PERFORMED / TO BE PERFORMED
[*]	Manufacture of Drug Substance (API)
[*]	Manufacture of Drug product (formulation and encapsulation)

SCHEDULE 12.1.3(b)

INDs and DRUG APPROVAL APPLICATIONS

United States IND #67482
United States IND #70109

SCHEDULE 12.1.3(c)(i)(I)

LICENSED PATENTS [*]

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days) 1
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
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[*]	[*]
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[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

¹ Official fees do not include Attorney or Foreign Associate Fees.

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days) 1
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days) 1
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

SCHEDULE 12.1.3(c)(i)(II)

LICENSED PATENTS THAT DO NOT CLAIM COMPOUND OF COLLABORATION PRODUCTS

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days)
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

EX-10.3

Exhibit 10.3

*Represents language for which confidential treatment has been requested.

ROW TERRITORY LICENSE AGREEMENT

BY AND AMONG

SHIRE PHARMACEUTICALS IRELAND LIMITED

SHIRE PHARMACEUTICALS PLC

AND

NEW RIVER PHARMACEUTICALS INC.

DATED AS OF MARCH 31, 2005

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS	2
ARTICLE 2	MANAGEMENT OF COLLABORATION	11
2.1	General	11
2.2	Joint Development Committee (JDC)	11
2.3	Joint Supply Committee (JSC)	12
2.4	Joint Intellectual Property Committee (JIPC)	14
2.5	General Committee Membership and Procedures	14
2.6	Committee Decision-Making	16
ARTICLE 3	DEVELOPMENT AND REGULATORY RESPONSIBILITIES	17
3.1	Overview	17
3.2	Development Plans	17
3.3	Regulatory Activities	18
3.4	Development in the ROW Territory for ADHD and Other Indications	18
3.5	Shared Expenses	20
3.6	Use of Third Parties	21
3.7	Assistance	21
3.8	Compliance with Laws	21
ARTICLE 4	COMMERCIALIZATION OF COLLABORATION PRODUCTS	21
4.1	Principles of Commercialization	21
4.2	Sales and Distribution of Collaboration Products to Third Parties	21
4.3	Marketing Plans for ROW Territory	22
4.4	Regulatory Obligations During Commercialization	22
4.5	Diligence in Commercialization	22
4.6	Cost of Commercialization	22
4.7	Use of Third Parties	22
4.8	Promotional Materials	22
4.9	Compliance with Laws	23
ARTICLE 5	MANUFACTURE OF COLLABORATION PRODUCTS	23
5.1	Manufacture and Supply	23

i

TABLE OF CONTENTS
(continued)

		Page
5.2	Specifications and Terms of Supply; Multiple Sources	24
5.3	Manufacture by Shire; Commercial Supply by Shire	24
5.4	Supply Terms	25
ARTICLE 6	FINANCIAL TERMS	25
6.1	Licensing Fee	25
6.2	Milestone Payment	25
6.3	Royalties on Net Sales in ROW Territory	25
ARTICLE 7	PAYMENT TERMS	26
7.1	Payment Method	26
7.2	Payment Schedules; Reports	27
7.3	Currency Conversion	27
7.4	Legal Restrictions	27
7.5	Taxes	28
7.6	Records Retention; Audit	28
ARTICLE 8	LICENSES	29
8.1	Licenses to Shire	29
8.2	Licenses to New River	30
8.3	Sublicensing	30
8.4	Scope of Licenses	30
8.5	No Implied Licenses	30
8.6	Exclusivity	30
8.7	Nonassertion	30
8.8	[*]	30
ARTICLE 9	CONFIDENTIALITY	31
9.1	Confidential Information	31
9.2	Publicity; Filing of this Agreement	33
9.3	Publication	33
9.4	Use of Names	34
9.5	Confidentiality of this Agreement	34

ii

TABLE OF CONTENTS
(continued)

		Page
9.6	Disclosures Under Existing NDA	34
9.7	Survival	34
ARTICLE 10	OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT
	RIGHTS	34
10.1	Ownership	34
10.2	Disclosures; Disputes Regarding Inventions	35
10.3	Patent Filings	35
10.4	Third-Party Patent Rights	37
10.5	Enforcement and Defense of Patents	37
10.6	Notice of Certification	40
10.7	Patent Term Extensions	40
10.8	Listing of Patents	40
10.9	Trademarks and Copyrights	41
ARTICLE 11	REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY	43
11.1	Representations, Warranties and Covenants	43
11.2	Limitation on Representations or Warranties	48
11.3	Performance by Affiliates	48
11.4	Disclaimer of Warranty	48
11.5	Limitation of Liability	48
11.6	Essential Basis	49
ARTICLE 12	TERM AND TERMINATION	49
12.1	Term	49
12.2	Breaches (General)	49
12.3	Allegations of Material Breach	49
12.4	Other Termination by Shire	51
12.5	Other Termination By New River	52
12.6	Termination for Government Action	52
ARTICLE 13	EFFECTS OF TERMINATION	53
13.1	Post-Termination Activities by Shire	53

iii

TABLE OF CONTENTS
(continued)

		Page
13.2	Post-Termination Activities by New River	55
13.3	Accrued Rights	57
13.4	Confidential Information	57
13.5	Survival	57
13.6	Liability Following Termination	57
ARTICLE 14	INDEMNIFICATION; INSURANCE	57
14.1	Indemnification	57
14.2	Notice of Claim	58
14.3	Control of Defense	58
14.4	Right to Participate in Defense	58
14.5	Settlement	58
14.6	Cooperation	59
14.7	Expenses of the Indemnified Party	59
14.8	Treatment of Certain Losses	59
14.9	Insurance	60
14.10	Guaranty	60
ARTICLE 15	DISPUTE RESOLUTION	60
15.1	Disputes	60
15.2	Litigation	60
15.3	Injunctive Relief	61
15.4	Governing Law	61
ARTICLE 16	MISCELLANEOUS	61
16.1	Entire Agreement; Amendment	61
16.2	Force Majeure	61
16.3	Notices	62
16.4	Independent Contractors	63
16.5	Non-Solicitation	63
16.6	Maintenance of Records	63
16.7	United States Dollars	63

iv

TABLE OF CONTENTS
(continued)

		Page
16.8	No Strict Construction	63
16.9	Assignment	63
16.10	Counterparts	63
16.11	Further Actions	64
16.12	Severability	64
16.13	Ambiguities	64
16.14	Headings	64
16.15	No Waiver	64

v

Exhibits

EXHIBIT A	DETERMINATION OF CERTAIN ACCOUNTING TERMS
EXHIBIT B	ADDITIONAL SUPPLY TERMS
EXHIBIT C	JOINT PRESS RELEASE
EXHIBIT D	TECHNICAL TRADE SECRETS
EXHIBIT E	CERTAIN PRODUCTS OF SHIRE

- 1 -

ROW TERRITORY LICENSE AGREEMENT

      THIS ROW TERRITORY LICENSE AGREEMENT (the “Agreement”) is dated as of March 31, 2005 by and among SHIRE PHARMACEUTICALS IRELAND LIMITED , an Irish resident company having a principal place of business at 2^nd Floor, Unit 1A, Citylink Business Park, Old Naas Road, Dublin 12, Ireland (“Shire”), SHIRE PHARMACEUTICALS GROUP PLC, a British public limited company having a principal place of business at Hampshire International Business Park, Chineham, Basingstoke, England RG24 8EP, solely for purposes of the provisions of Section 14.10 of this Agreement, and NEW RIVER PHARMACEUTICALS INC., a Virginia corporation having a principal place of business at 1881 Grove Avenue, Radford, Virginia 24141 (“New River”). Shire and New River are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

     WHEREAS, New River is a specialty pharmaceutical company focused on developing novel pharmaceuticals that are safer and improved versions of widely-prescribed pharmaceutical products, and is clinically developing a proprietary amphetamine conjugate for the treatment of attention deficit/hyperactivity disorder in pediatric and adult patients;

     WHEREAS, Shire is a worldwide, specialty pharmaceutical company engaged in the development, manufacturing and marketing of pharmaceutical products; and

     WHEREAS, on January 31, 2005 (the “Effective Date”), New River and Shire LLC entered into that certain Collaboration Agreement (the “January Agreement”) that established a broad collaboration for the further development and commercialization of Compound in both the US Territory and ROW Territory, with the objective of utilizing the areas of expertise of both New River and Shire and its Affiliates to provide products to patients;

     WHEREAS, pursuant to Section 17.16 of the January Agreement, New River and Shire LLC agreed to divide the January Agreement into two separate agreements: one relating to the US Territory and the other relating to the ROW Territory;

     WHEREAS, as contemplated by Section 17.16 of the January Agreement, New River and Shire LLC, an Affiliate of Shire, are entering into that certain US Territory Collaboration Agreement (the “US Agreement”) simultaneously with the execution of this Agreement; and

     WHEREAS, this Agreement, together with the ROW Agreement, supercede and replace the January Agreement in its entirety.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the Parties, intending to be legally bound, agree as follows:

ARTICLE 1
DEFINITIONS

The following terms shall have the following meanings as used in this Agreement:

     1.1“Act” means the United States Federal Food, Drug and Cosmetics Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder.

     1.2“ADHD” means attention deficit/hyperactivity disorder in human beings.

     1.3“Adolescent” means a human being that has attained the age of thirteen (13) but is less than eighteen (18) years of age.

     1.4“Adult” means a human being that has attained the age of eighteen (18).

     1.5“Affiliate” means a Person that controls, is controlled by or is under common control with a Party. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct the management and policies of such Person, whether by the ownership of at least fifty percent (50%) of the voting stock of such Person (it being understood that the direct or indirect ownership of a lesser percentage of such stock shall not necessarily preclude the existence of control), or by contract or otherwise.

     1.6“Business Day” means any day other than (i) Saturday or Sunday or (ii) any other day on which banks in New York, New York, United States, Dublin, Ireland or London, England are permitted or required to be closed.

     1.7“cGCP” means the current Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials, including the requirements in 21 C.F.R. Parts 11, 50, 54, 56, 312, and 314, that provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected.

     1.8“cGLP” means current Good Laboratory Practices (i) as promulgated under the Act at 21 C.F.R. Part 58, as the same may be amended or re-enacted from time to time and (ii) as required by Law in countries other than the United States where non-clinical laboratory studies are conducted.

     1.9“cGMP” means all applicable standards relating to manufacturing practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products, including (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 210 and 211 and The Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products as each may be amended from time to time, (ii) the principles detailed in the ICH Q7A guidelines, (iii) if Shire notifies New River that Shire intends to Commercialize a Collaboration Product in a country, Laws promulgated by any Governmental Authority in such country having jurisdiction over the Manufacture of Compound or Collaboration Product, or (iv) if Shire notifies

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New River that Shire intends to Commercialize a Collaboration Product in a country, guidance documents promulgated by any Governmental Authority in such country having jurisdiction over the Manufacture of Compound or Collaboration Product (including but not limited to advisory opinions, compliance policy guides and guidelines), which guidance documents are being implemented within the pharmaceutical manufacturing industry.

     1.10“Child” means a human being that has not attained the age of thirteen (13).

     1.11“Collaboration Product” means a pharmaceutical product containing or comprising Compound in any dosage form alone, or in combination with, one or more other pharmaceutically active ingredients, and any and all Improvements thereto.

     1.12“Combination Product” means any Collaboration Product that contains the Compound and one or more pharmaceutically active ingredients in addition to Compound, and any and all Improvements thereto.

     1.13“Commercialization” means any and all activities directed to the commercial Manufacturing, marketing, offering for sale and selling of a Collaboration Product, including advertising, educating, planning, marketing, promoting, distributing and conducting market and product support studies and post-marketing safety surveillance and reporting.

     1.14“Committee” means the JDC, JSC or JIPC, as the case may be.

     1.15“Compound” has the meaning set forth on Exhibit D.

     1.16“Control” means, with respect to any intellectual property right or other intangible property, that a Party or one of its Affiliates owns or has a license or sublicense to such item or right, and has the ability to grant access, license or sublicense in or to such right without violating the terms of any agreement or other arrangement with any Third Party.

     1.17“Cost of Goods” has the meaning as set forth in Exhibit A.

     1.18“Development” means all activities relating to obtaining Regulatory Approval of a Collaboration Product, including all test method development, stability testing, toxicology, formulation, process development, cGMP audits (but only those performed prior to Regulatory Approval and excluding any audits for commercial Manufacture), cGLP audits, cGCP audits, validation, quality assurance/quality control development, preclinical and clinical testing and studies, regulatory affairs and outside counsel regulatory legal services relating to any of the foregoing, and any activities relating to the Manufacture of Collaboration Products other than commercial quantities thereof. For the avoidance of doubt, the conduct of Phase III-B Clinical Studies will be considered Development.

     1.19“Development Expenses” means the expenses incurred by a Party that are consistent with a Development Plan and are specifically attributable or reasonably allocable to the Development of a Collaboration Product. Development Expenses shall include, but are not limited to, the following costs incurred for the Development of a Collaboration Product: the cost of studies on the toxicological, pharmacokinetic, metabolic or clinical aspects of a Collaboration Product directed to obtaining Regulatory Approval of a Collaboration Product; the cost of Phase

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III-B Clinical Trials, and costs (and related fees) for preparing, submitting, reviewing or developing data or information for the purpose of submission to a Governmental Authority to obtain Regulatory Approval of a Collaboration Product; and manufacturing process development and scale-up for Collaboration Products in bulk and finished form. Development Expenses shall exclude any [*] incurred by a Party in connection with the Development of a Collaboration Product.

     1.20“Diligent Efforts” means the carrying out of obligations or tasks consistent with the reasonable best practices of the pharmaceutical industry for the development or commercialization of a pharmaceutical product having similar market potential, profit potential or strategic value as the applicable Collaboration Product, based on conditions then prevailing. Diligent Efforts requires that the Party, at a minimum: (a) determine the general industry practices with respect to the applicable activities; (b) reasonably promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis; (c) set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations; and (d) make and implement decisions and allocate resources designed to advance progress with respect to such objectives.

     1.21“Drug Approval Application” means an application for Regulatory Approval required before commercial sale or use of a Collaboration Product as a drug in a regulatory jurisdiction, including a new drug application (“NDA”) or supplemental new drug application (“SNDA”) or any amendments thereto submitted to the FDA.

     1.22“FDA” means the United States Food and Drug Administration or any successor federal agency thereto.

     1.23“Field” means all human and veterinary pharmaceutical uses.

     1.24“First Commercial Sale” means, with respect to a Collaboration Product and on a country-by-country basis, the first commercial sale after receipt of Regulatory Approval of such Collaboration Product in such country. Sales for clinical studies, compassionate use, named patient programs, sales under a treatment IND, test marketing, any nonregistrational studies, or any similar instance where the Collaboration Product is supplied with or without charge shall not constitute a First Commercial Sale.

     1.25“Generic Product” means, with respect to a Collaboration Product and on a country-by-country basis, a product that includes an active ingredient that is the same as the Compound, including without limitation, any product which is submitted for Regulatory Approval through an abbreviated NDA (“ANDA”), an application under Section 505(b)(2) of the Act or foreign equivalent of the foregoing that references any NDA or SNDA or any foreign equivalent thereof for the Collaboration Product.

     1.26“Governmental Authority” means any court, tribunal, arbitrator, agency, legislative body, commission, official or other instrumentality of (i) any government of any country, (ii) a federal, state, province, county, city or other political subdivision thereof or (iii) any supranational body, including without limitation the European Agency for the Evaluation of Medicinal Products.

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     1.27“Improvement” means any enhancement or modification of (i) a Collaboration Product, (ii) the Compound’s or Collaboration Product’s use, dosage form, indication, line extension, presentation or formulation or (iii) the process or method for the Manufacture of the Compound or Collaboration Product, in each case whether or not patentable, that is developed by or for, invented or acquired by, or comes under the Control of, New River or Shire during the Term.

     1.28“IND” means an Investigational New Drug Application filed with FDA or a similar application filed with an applicable Regulatory Authority outside of the United States such as a clinical trial application (CTA) or a clinical trial exemption (CTX).

     1.29“Invention” means any discovery (whether patentable or not) conceived during the Term and potentially useful for the Manufacture, use, Development or Commercialization of the Compound or a Collaboration Product.

     1.30“Joint Invention” means an Invention that is conceived jointly by an employee of, or person under an obligation of assignment to, each of New River and Shire.

     1.31“Know-How” means any non-public information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including without limitation, databases, ideas, discoveries, inventions, trade secrets, practices, methods, tests, assays, techniques, specifications, processes, formulations, formulae, knowledge, know-how, skill, experience, materials, including pharmaceutical, chemical and biological materials, products and compositions, scientific, technical or test data (including pharmacological, biological, chemical, biochemical, toxicological and clinical test data), analytical and quality control data, stability data, studies and procedures, drawings, plans, designs, diagrams, sketches, technology, documentation, and patent-related and other legal information or descriptions.

     1.32“Law” or “Laws” means all laws, statutes, rules, codes, regulations, orders, judgments and/or ordinances of any Governmental Authority.

     1.33“Licensed Know-How” means all Know-How that is Controlled by New River as of the Effective Date or at any time during the Term and that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or a New River Invention; provided, however, that Know-How Controlled by New River disclosing New River’s proprietary Carrierwave^TM technology shall not be included in Licensed Know-How except to the extent necessary for Shire to exercise its rights and perform its obligations under this Agreement. Notwithstanding anything herein to the contrary, Licensed Know-How shall exclude Licensed Patents.

     1.34“Licensed Patent” means a Patent that (i) claims the Manufacture, use, Development, Commercialization and/or export of the Compound, a Collaboration Product and/or a New River Invention, and (ii) is Controlled by New River as of the Effective Date or at any time during the Term. For the avoidance of doubt, all New River Collaboration Patents shall be considered Licensed Patents.

     1.35“Losses” means any and all amounts paid or payable to Third Parties with respect to a Third Party Claim, including without limitation, damages (including all incidental and

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consequential damages), deficiencies, defaults, awards, settlement amounts, assessments, fines, dues, penalties, costs, liabilities, obligations, taxes, liens, losses, lost profits, fees and expenses (including, without limitation, court costs, interest and reasonable fees of attorneys, accountants and other experts).

     1.36“Major EU Market” means each of France, Germany, the United Kingdom, Italy and Spain.

     1.37“Manufacture” means all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, including but not limited to manufacturing Compound or supplies for Development, manufacturing Collaboration Product for commercial sale, packaging, in-process and finished product testing, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, ongoing stability tests and regulatory activities related to any of the foregoing.

     1.38“Net Sales” means, with respect to a Collaboration Product, the amount invoiced by Shire, its Affiliates or sublicensees for sales of such Collaboration Product to a Third Party (“Invoiced Amount”) less: (i) transportation charges, freight and insurance (but only insurance related to protecting the particular shipment against physical loss or damage); (ii) taxes (other than taxes based on income), tariffs, customs duty, excise or other duty and any other governmental charges, all to the extent imposed upon the sale, transportation or delivery of such Collaboration Product and paid by the seller; (iii) Third Party distributor fees; (iv) trade discounts, quantity discounts, cash discounts, rebates, reimbursements, cooperative advertising allowances, credits or chargebacks actually granted, allowed or incurred in the ordinary course of business in connection with the sale of such Collaboration Product, including any credits, volume rebates, charge-back and prime vendor rebates, fees, fees for services, reimbursements or similar payments granted or given to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations or other institutions or health care organizations; (v) adjustments, allowances or credits (calculated on a per unit basis) to customers, not in excess of the selling price per unit of such Collaboration Product, including without limitation on account of price adjustments, governmental requirements, billing errors, rejection, damage, recalls or return of such Collaboration Product; (vi) payments or rebates paid in connection with sales of Collaboration Products to any governmental or regulatory authority in respect of any state or federal Medicare, Medicaid or similar programs; (vii) royalties or technology access fees paid to a Third Party in respect of the sale of such Collaboration Product; (viii) write-offs for bad debts incurred (net of any bad debts later recovered); and (ix) any item substantially similar in character/substance to the foregoing. Net Sales shall be accounted for in accordance with generally accepted accounting principles (“GAAP”) consistently applied in the jurisdiction in which the sales occur, it being understood that bad debt write-off shall be deducted in arriving at Net Sales notwithstanding that such treatment may be inconsistent with GAAP, and it being further understood that Shire shall make bad debt write-off decisions consistent with its usual business practices.

For the purposes of determining Net Sales in the ROW Territory with respect to a Collaboration Product that (x) is sold as a Combination Product and (y) is also sold in the US Territory, the Net Sales in the ROW Territory of any such Combination Product shall be determined by deducting

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from the Invoiced Amount the fully loaded acquisition cost per unit of the other active ingredient(s) included in such Combination Product.

For the purposes of determining Net Sales in the ROW Territory with respect to a Collaboration Product that (x) is sold as a Combination Product and (y) is not also sold in the US Territory, the Net Sales in the ROW Territory of any such Combination Product shall be determined in any accounting period by multiplying the Net Sales in the ROW Territory of the Combination Product by the fraction A/(A+B), where A is the average Invoiced Amount per unit of the Collaboration Product when sold as a stand-alone Collaboration Product in finished form in the applicable country in the ROW Territory and B is the average invoice price of the other product(s) sold as stand-alone product(s) in finished form in the applicable country in the ROW Territory. In the event that such average Invoiced Amount or average invoice price, as applicable, cannot be determined for the Collaboration Product or the other product(s), Net Sales in the applicable country in the ROW Territory for purposes of determining royalties shall be mutually agreed by the Parties based on the relative value contributed by each component.

In addition, Net Sales in the ROW Territory shall be determined without regard to the deduction for royalties or technology access fees provided for in clause (vii) above to the extent that (1) such royalties or technology access fees constitute Third Party Royalties and (2) the royalties payable by Shire to New River in respect of such Net Sales in the ROW Territory have been reduced by such Third Party Royalties in accordance with Section 10.5.1(a) .

Notwithstanding the foregoing, in the ROW Territory, the disposition of a Collaboration Product or the use of the Collaboration Product without charge in excess of costs, including by means of clinical studies, compassionate use, named patient programs, sales under a treatment IND, test marketing, any nonregistrational studies, patient assistance program, or any similar instance where the Collaboration Product is supplied without charge in excess of costs shall not result in any Net Sales. Additionally, amounts received by Shire or its Affiliates or sublicensees for the sale of Collaboration Products among Shire and its Affiliates and sublicensees for resale shall not be included in the computation of Net Sales hereunder. For the avoidance of doubt, no amount of cost, expense or other reduction or adjustment, whether or not specifically referred to in this definition of Net Sales, shall serve to adjust the Invoiced Amount more than once in arriving at Net Sales.

     1.39“New River Invention” means an Invention that is conceived, solely or jointly with a Third Party, by an employee of New River or a person under an obligation of assignment to New River.

     1.40“Patent” means (i) valid and enforceable patents, re-examinations, reissues, renewals, extensions, supplementary protection certificates and term restorations, any confirmation patent or registration patent or patent of addition based on any such patent, (ii) pending applications for patents, including without limitation continuations, continuations-in-part, divisional, provisional and substitute applications, and inventors’ certificates, (iii) all foreign counterparts of any of the foregoing, and (iv) all priority applications of any of the foregoing.

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     1.41“Patent Expenses” means the fees and expenses of outside counsel and payments to Third Parties incurred after the Effective Date in connection with the preparation, filing, prosecution and maintenance of the Licensed Patents, the Joint Collaboration Patents, and the Shire Patents covering Compound and Collaboration Products, including the costs of patent interference and opposition proceedings, net of any reimbursement of such expenses by Third Parties.

     1.42“Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government, or any agency or political subdivisions thereof.

     1.43“Phase III-B Clinical Trials” means product support clinical trials of a Collaboration Product (i.e., a clinical trial which is not required for receipt of initial Regulatory Approval but which may be useful in providing additional drug profile data or in seeking a label expansion) commenced before receipt of Regulatory Approval for the indication for which such trial is being conducted. For the avoidance of doubt, Phase III-B Clinical Trials shall be considered part of Development.

     1.44“Promotional Materials” means all written, printed, video or graphic advertising, promotional, educational and communication materials (other than Collaboration Product labels and package inserts) for marketing, advertising and promotion of the Collaboration Products, including, without limitation, copyrights in any such materials and all designs, industrial designs, design patents, design registrations, and design patent applications developed in connection with such materials, for use by (a) a sales representative or (b) advertisements, web sites or direct mail pieces. For clarity, it is understood and agreed that Promotional Materials shall not include corporate communications and general marketing or advertising by a Party or its Affiliate; provided, however, that to the extent that such corporate communications or general marketing or advertising include or reference a Collaboration Product or related disease state and do not make any actual or implied claims, then such corporate communications or general marketing or advertising shall be governed by the provisions of Section 9.2.

     1.45“Regulatory Approval” means all approvals [*], product and/or establishment licenses, registrations or authorizations of any regional, federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacture, use, storage, import, export, transport, offer for sale, or sale of a pharmaceutical product in a regulatory jurisdiction.

     1.46“ROW Territory” means the world, excluding the US Territory.

     1.47“Shire Background Know-How” means all Know-How Controlled by Shire, other than Shire Collaboration Know-How, that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention. Notwithstanding anything herein to the contrary, Shire Background Know-How shall exclude Shire Background Patents.

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     1.48“Shire Background Patent” means a Patent Controlled by Shire, other than a Shire Collaboration Patent, that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention.

     1.49“Shire Collaboration Know-How” means all Know-How that is developed by Shire or its Affiliates during the Term pursuant to this Agreement or the US Agreement and that is potentially useful for the Development, Manufacture, use and/or Commercialization of the Compound, a Collaboration Product and/or Shire Invention. Notwithstanding anything herein to the contrary, Shire Collaboration Know-How shall exclude Shire Collaboration Patents.

     1.50“Shire Invention” means an Invention that is conceived, solely or jointly with a Third Party, by an Affiliate or employee of Shire or a person under an obligation of assignment to Shire.

     1.51“Shire Know-How” means the Shire Background Know-How and the Shire Collaboration Know-How. Notwithstanding anything herein to the contrary, Shire Know-How shall exclude Shire Patents.

     1.52“Shire Patents” means the Shire Background Patents and the Shire Collaboration Patents.

     1.53“[*]” means [*].

     1.54“Third Party” means any entity other than New River or Shire or their respective Affiliates.

     1.55“US Territory” means the United States of America, its territories and possessions.

     1.56“Valid Claim” means: (a) a claim of an issued Patent that has not (i) expired or been canceled, (ii) been declared invalid or unenforceable by a decision of a court or other appropriate body of competent jurisdiction, from which no appeal is or can be taken, (iii) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (iv) been abandoned, disclaimed or dedicated to the public; and (b) a claim included in a pending patent application that is being actively prosecuted in accordance with this Agreement and that has not been (i) canceled, (ii) withdrawn from consideration, (iii) finally determined to be unallowable by the applicable governmental authority (from which no appeal is or can be taken), or (iv) abandoned or disclaimed. Notwithstanding the foregoing clause (b), in the event that a pending claim in a pending patent application is rejected and does not issue in an issued Patent within [*] after the earliest date from which such claim was originally presented, such a pending claim will not be a Valid Claim, unless and until such pending claim subsequently issues in an issued Patent, at which time such claim may again be a Valid Claim as of the date of issuance of such Patent, if such claim also meets the requirements of this Section 1.56.

Interpretation. Unless the context of this Agreement otherwise requires, (a) words of one gender include the other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby,” and other similar words refer to this entire Agreement; and (d) the terms “Article” and “Section” refer to

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the specified Article and Section of this Agreement. Whenever this Agreement refers to a number of days, unless otherwise specified, such number shall refer to calendar days.

Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

Definition	Section
Agreement	Preamble
ANDA	Section 1.25
Breaching Party	Section 12.2.1
Confidential Information	Section 9.1.1
Contractors	Section 11.1.3(d)(i)
Development Plan	Section 3.2.1
Disclosing Party	Section 9.1.1
Dollars	Section 16.7
Effective Date	Recitals
Existing NDA	Section 9.6
GAAP	Section 1.38
Hatch-Waxman Certification	Section 10.6
Indemnification Claim Notice	Section 14.2
Indemnified Party	Section 14.2
Indemnifying Party	Section 14.2
Indemnitee	Section 14.2
Indemnitees	Section 14.2
Invoiced Amount	Section 1.38
January Agreement	Recitals
JDC	Section 2.2.1
JIPC	Section 2.4.1
Joint Collaboration Patents	Section 10.1.1
Joint Press Release	Section 9.2
JSC	Section 2.3.1
Material Breach	Section 12.3.1
NDA	Section 1.21
New River	Preamble
New River Collaboration Patents	Section 10.3.1
New River Marks	Section 10.9.3
Notice of Termination For Material Breach	Section 12.3.3
Notifying Party	Section 12.2.1
Parties	Preamble
Party	Preamble
[*]	Section 8.8
Prior Consultants	Section 9.6
Purchase Interest	Section 12.3.5(a)
Purchase Notice	Section 12.3.5
Purchase Price	Section 12.3.5(a)

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Definition	Section
Receiving Party	Section 9.1.1
Recovery	Section 10.5.2(c)(iv)
Representatives	Section 15.1
Shared Expenses	Section 3.5.1
Shire	Preamble
Shire Collaboration Patents	Section 10.3.2
Shire Marks	Section 10.9.3
SNDA	Section 1.21
Term	Section 12.1
Third Party Claim	Section 14.1.1
Third Party Manufacturers	Section 2.3.2(a)
Third Party Royalty	Section 10.5.1(a)
US Agreement	Recitals
Withholding Taxes	Section 7.5.1
Working Group	Section 2.5.4
$	Section 16.7

ARTICLE 2
MANAGEMENT OF COLLABORATION

     2.1General. The general purpose of the collaboration described in this Agreement will be to Develop and Commercialize Collaboration Products. The Parties desire to establish three (3) specialized committees to oversee the Parties’ collaboration under this Agreement and to facilitate communications between the Parties with respect to the Development, Manufacturing and intellectual property strategy of Collaboration Products hereunder and, where applicable, in the US Territory. Each of such Committees shall have the responsibilities and authority allocated to it in this Article 2. Each of the Committees shall have the obligation to exercise its authority consistent with the respective purpose for such Committee as stated herein and any such decisions shall be made in good faith. For the avoidance of doubt, the Committees described herein are the same committees as are described in the US Agreement, and each such Committee will have the responsibilities and authority set forth in this Agreement and in the US Agreement.

     2.2Joint Development Committee (JDC).

          2.2.1Formation and Purpose. Promptly following the Effective Date, the Parties shall create a joint development committee (the “JDC”) to oversee the Development of Collaboration Products hereunder. The purposes of the JDC shall be (a) to determine the Development strategy for the Collaboration Products in the US Territory and Major EU Markets, (b) to facilitate the management and implementation of the Parties’ Development activities hereunder, and (c) to approve plans and budgets for the Development by New River of Collaboration Products for ADHD in the US Territory. The JDC shall have the membership and shall operate by the procedures set forth in Section 2.5.

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          2.2.2Specific Responsibilities of the JDC. In addition to its overall responsibilities described in Section 2.2.1, subject to Section 2.6.1, the JDC shall, in particular:

               (a)select Collaboration Products for research and Development under this Agreement in the US Territory and Major EU Markets;

               (b)prepare, approve and amend each Development Plan (including regulatory submission strategies and plans) for Collaboration Products in the Major EU Markets;

               (c)monitor the progress of the activities undertaken by the Parties pursuant to each Development Plan;

               (d)review and approve proposals from the Parties to Develop Improvements and/or Combination Products;

               (e)coordinate and oversee the Parties’ Regulatory Approval submission plans in the US Territory;

               (f)design and approve all clinical trials of Collaboration Products proposed to be conducted anywhere in the world for consistency and efficiency, including without limitation by creating the protocols, defining the end points, and selecting the primary investigators for such trials;

               (g)have primary responsibility for establishing the objectives for all Phase IV Clinical Trials of Collaboration Products proposed to be conducted for the US Territory, including without limitation by creating the protocols, defining the end points, and selecting the primary investigators for such trials;

               (h)manage the flow of information with respect to Development being conducted for each Collaboration Product;

               (i)review and approve the statistical analysis plans and protocols for all Collaboration Product clinical studies conducted worldwide, and any investigator’s brochure(s) and revisions thereto;

               (j)work together with the other Committees during the Development of Collaboration Products to assure a smooth transition from Development of such Collaboration Product to Commercialization of such Collaboration Product;

               (k)review and approve compliance plans whereby the Parties prepare for or participate in a Governmental Authority inspection of the preclinical or clinical data or preclinical sites/clinical sites or laboratories; and

               (l)review and approve pharmacovigilance plans.

     2.3Joint Supply Committee (JSC).

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          2.3.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint supply committee (the “JSC”) to facilitate the management and implementation of the Parties’ activities with regard to the Manufacture and supply of Collaboration Products worldwide. The JSC shall have the membership and shall operate by the procedures set forth in Section 2.5.

          2.3.2Specific Responsibilities of the JSC. In addition to its overall responsibilities described in Section 2.3.1, and subject to the provisions of Section 2.6.1 and Article 5, the JSC shall, in particular:

               (a)select which Party and/or Third Party(ies) to engage for the Manufacture and supply of Collaboration Products and components thereof (“Third Party Manufacturers”), oversee auditing of Third Party Manufacturers, and approve contracts governing such Manufacture and supply;

               (b)delineate requirements and responsibilities for development and licensure of manufacturing processes and facilities for Collaboration Products and for worldwide supply of Collaboration Products;

               (c)jointly develop a Manufacturing strategy for the ROW Territory to enable development and licensure of manufacturing processes and facilities for Collaboration Products that includes all aspects of Manufacture and release, including but not limited to formulations, intermediate, dosage form, devices, product characterization studies, test methods and process validation studies, stability studies and Manufacturing plans and forecasts and the implementation of Manufacturing Improvements;

               (d)determine Manufacturing plans and budgets, including timelines and inventory strategies, and allocate responsibilities for and oversee the implementation of such plans in accordance with this Agreement;

               (e)oversee and approve process development plans prior to the Manufacture of registration batches of Collaboration Products;

               (f)oversee and approve plans to support Manufacture of commercial supply of Compound and Collaboration Products;

               (g)review quality assurance efforts, including but not limited to those efforts with respect to the establishment of specifications and quality standards for Collaboration Products;

               (h)review and coordinate the drafting and contents of the Chemistry, Manufacturing and Controls section of a Drug Approval Application for Collaboration Products;

               (i)review and approve technology transfer plans for any changes in Manufacturing sites, testing sites, and responsibilities in the supply chain for Collaboration Products, it being understood that decisions regarding the selection of which of a Party’s own Manufacturing and testing sites shall be used to manufacture any component of a Collaboration

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Product, if a Party Manufactures any component of a Collaboration Product pursuant to this Agreement or any related supply agreement, shall remain in the sole control of such Party;

               (j)prepare for regulatory inspections and ensure adherence to compliance standards with respect to Collaboration Products;

               (k)ensure that future logistical strategies and capacity planning are consistent with the forecasts provided for the US Territory and the ROW Territory, as well as inventory levels for Collaboration Products;

               (l)review quality-related issues concerning the Collaboration Products or any component thereof; and

               (m)review and approve compliance plans whereby the Parties prepare for or participate in a Governmental Authority inspection of the Manufacturing or testing site of the Compound.

     2.4Joint Intellectual Property Committee (JIPC).

          2.4.1Formation and Purpose. Promptly after the Effective Date, the Parties shall create a joint intellectual property committee (the “JIPC”) to facilitate the exchange of information between the Parties to the extent required by this Agreement regarding the prosecution, maintenance and enforcement of the Licensed Patents, Licensed Know-How, Shire Collaboration Patents, Shire Collaboration Know-How, and Joint Inventions. The JIPC shall have the membership and shall operate by the procedures set forth in Section 2.5.

          2.4.2Specific Responsibilities of the JIPC. In addition to its overall responsibilities described in Section 2.4.1, subject to Section 2.6.3 and Article 10, the JIPC shall, in particular:

               (a)Exchange information between the Parties regarding the Parties’ activities under this Agreement relating to the filing, prosecution, maintenance and enforcement of the Licensed Patents, Licensed Know-How, Shire Collaboration Patents and Shire Collaboration Know-How; and

               (b)Consult regarding the filing, prosecution, maintenance and enforcement of Joint Collaboration Patents and Joint Inventions.

     2.5General Committee Membership and Procedures.

          2.5.1Membership. For the JDC, JSC and JIPC, each Party shall designate an equal number of representatives who are employees of such Party or an Affiliate of such Party (not to exceed three (3) for each Party) with appropriate expertise to serve as members of such Committee; provided that a Party may designate outside legal counsel as a representative to the JIPC. Each representative may serve on more than one Committee as appropriate in view of the individual’s expertise. Each Party may replace its Committee representatives at any time upon written notice to the other Party. Each Committee shall have co-chairpersons. New River and Shire shall each select from their representatives a co-chairperson for each of the Committees.

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The co-chairpersons of each Committee shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting of such Committee, and preparing and issuing minutes of each meeting within thirty (30) days thereafter; provided, that a Committee co-chairperson shall call a meeting of the applicable Committee promptly upon the written request of the other co-chairperson to convene such a meeting. Such minutes will not be finalized until both chairpersons review and confirm the accuracy of such minutes in writing.

          2.5.2Meetings. Each Committee shall hold meetings at such times as it elects to do so, but in no event shall such meetings be held less frequently than once every four (4) months. Meetings of any Committee may be held in person or by means of telecommunication (telephone, video, or web conferences); provided, that at least one meeting per year will be held in person. The Parties will alternate in designating the location for in-person meetings, with New River selecting the first meeting location. Other employees of each Party or any of its Affiliates involved in the Development, Manufacture or Commercialization of Collaboration Products may attend meetings of such Committee as nonvoting participants, and, with the consent of each Party, consultants, representatives, or advisors involved in the Development, Manufacture or Commercialization of Collaboration Products may attend meetings of such Committee as nonvoting observers; provided, that such Third Party representatives are under obligations of confidentiality and non-use applicable to the Confidential Information of each Party and that are at least as stringent as those set forth in Article 9. Each Party shall be responsible for all of its own expenses of participating in any Committee (including without limitation in any Working Group).

          2.5.3Meeting Agendas. Each Party will disclose to the other proposed agenda items along with appropriate information at least seven (7) Business Days in advance of each meeting of the applicable Committee; provided, that under exigent circumstances requiring Committee input, a Party may provide its agenda items to the other Party within a lesser period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of a specific agenda for such Committee meeting.

          2.5.4Working Groups. From time to time, each Committee may establish and delegate duties to other committees, sub-committees or directed teams (each, a “Working Group”) on an “as-needed” basis to oversee particular projects or activities. Each such Working Group shall be constituted and shall operate as the JDC, JSC or JIPC, as the case may be, determines; provided that each Working Group shall have equal representation from each Party. Working Groups may be established on an ad hoc basis for purposes of a specific project for the life of a Collaboration Product, or on such other basis as the applicable Committee may determine. Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the Committee that established such Working Group. In no event shall the authority of the Working Group exceed that specified for the relevant Committee in this Article 2.

          2.5.5Limitations of Committee Powers. Each Committee shall have only such powers as are specifically delegated to it hereunder and shall not be a substitute for the rights of the Parties. Without limiting the generality of the foregoing, no Committee shall have

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any power to amend this Agreement. Any amendment to the terms and conditions of this Agreement shall be implemented pursuant to Section 16.1 below.

     2.6Committee Decision-Making. Subject to the terms of this Section 2.6, each Committee will take action by unanimous vote with each Party having a single vote, irrespective of the number of representatives actually in attendance at a meeting, or by a written resolution signed by the designated representatives of each of the Parties. If a Committee is unable to reach unanimous consent on a particular matter within thirty (30) days of its initial consideration of such matter, then either Party may provide written notice of such dispute to the Chief Executive Officer of the other Party. The Chief Executive Officers (or their respective designees, provided that each such designee is not a member of the applicable Committee and occupies a position senior to the positions occupied by the applicable Party’s members of such Committee) of each of the Parties will meet at least once in person or by means of telecommunication (telephone, video, or web conferences) to discuss the dispute and use their good faith efforts to resolve the dispute within thirty (30) days after submission of such dispute to such officers. If any such dispute is not resolved by the Chief Executive Officers or their designees within thirty (30) days after submission of such dispute to such officers, then the Chief Executive Officer or designee of the Party specified in Section 2.6.1 or 2.6.12, as applicable, shall have the authority to finally resolve such dispute acting in good faith.

          2.6.1JDC Authority.

               (a)If a dispute in the JDC is not resolved pursuant to Section 2.6 above and such dispute relates primarily to the Development of Collaboration Products for ADHD in the US Territory (other than those relating to Phase IV Clinical Trials), the [*] or the [*], then the Chief Executive Officer of [*] shall have the authority to finally resolve such dispute.

               (b)Notwithstanding anything to the contrary in subsection (a):

                    (i)If a dispute in the JDC is not resolved pursuant to Section 2.6 above and such dispute (A) does not relate primarily to any of the activities specified in subsection (a) above (including, without limitation [*] the [*] of [*] for [*] in the [*] or for any [*] in the [*] for [*] in the [*] or [*] or (B) relates primarily to [*] other than the [*] by [*] pursuant to the [*] for which [*] has not [*] at the [*] or [*] the [*] to [*] of any [*] or [*] in the [*], then the Chief Executive Officer of Shire shall have the authority to finally resolve such dispute.

                    (ii)If [*] for the first Collaboration Product for ADHD on or before [*], then, until such time as [*], the Chief Executive Officer of [*] shall have the authority to finally resolve a dispute that relates primarily to the Development of Collaboration Products for ADHD in the US Territory.

          2.6.2JSC Authority. If a dispute in the JSC is not resolved pursuant to Section 2.6 above, then the Chief Executive Officer of [*] shall have the authority finally resolve such dispute; provided, however, that with respect to any matter over which [*] has approval (or other consent right) pursuant to Article 5 (including, without limitation, Exhibit B), such

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resolution shall require the approval (or other consent) of [*] as set forth in Article 5 (including, without limitation, Exhibit B).

          2.6.3JIPC Authority. If a dispute in the JIPC is not resolved pursuant to Section 2.6 above, then [*] shall have the authority to finally resolve such dispute. The JIPC shall not have decision making authority under this Agreement and any dispute in the JIPC shall be resolved in accordance with the terms of Article 15.

          2.6.4Casting Vote. Neither Party shall exercise its right to finally resolve a dispute at a Committee in accordance with this Section 2.6 in a manner that excuses such Party from any of its obligations specifically enumerated under this Agreement.

ARTICLE 3
DEVELOPMENT AND REGULATORY RESPONSIBILITIES

     3.1Overview. Subject to the roles of the various Committees described in Article 2 and the terms of this Agreement, Shire will be primarily responsible for the Development of Collaboration Products for any indications in the ROW Territory.

     3.2Development Plans.

          3.2.1Scope. The Development of each Collaboration Product in the Major EU Markets under this Agreement shall be governed by a development plan (each, a “Development Plan”). Each Development Plan shall be developed in good faith in accordance with Shire’s standard practices with the overall objective of achieving the commercial potential of such Collaboration Product. Each Development Plan shall describe the proposed overall program of Development for the Collaboration Product for each indication in each of the Major EU Markets, including preclinical studies, toxicology, formulation, process development, clinical studies, pediatric exclusivity plans and regulatory plans and other elements of obtaining Regulatory Approval in each applicable country, as well as timelines to key Governmental Authority meetings, Drug Approval Applications and Regulatory Approvals. Each Development Plan shall include a summary of estimated Development Expenses of the program expected during the Development process through obtaining Regulatory Approval for each proposed indication and route of delivery, to the extent such expenses are to be shared by the Parties under the terms of this Agreement, and shall also include a detailed budget for all such shared Development activities proposed for the following calendar year.

          3.2.2Preparation and Approval of Development Plans for the Major EU Markets. The Development Plan for the Development by Shire of Collaboration Products for any indications in the Major EU Markets will be prepared by Shire and will be submitted to the JDC for review and approval.

          3.2.3Updates to the Development Plans. As early as necessary in each year beginning with the first full calendar year after the Effective Date, Shire shall update and prepare the Development Plan for any such Collaboration Product for the following calendar year to take into account completion, commencement or cessation of Development activities not contemplated by the then-current Development Plan, and submit such proposed Development Plan to the JDC no later than September 30 of such year for review and approval.

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          3.2.4Diligence. In addition to the specific diligence obligations of Shire pursuant to Section 3.4.1, Shire will use Diligent Efforts to carry out the activities for which it may agree to be responsible set forth in a Development Plan in the ROW Territory.

     3.3Regulatory Activities.

          3.3.1New River shall permit Shire access to and grant Shire the right to reference and use, for purposes of the Collaboration Products, all data, regulatory filings and regulatory communications associated with any submissions for Regulatory Approval or other issues associated with any Collaboration Product, that is or would be relevant to Shire’s Development or Commercialization of a Collaboration Product in the ROW Territory. To the extent that any such data, regulatory filings or regulatory communications are held by a Third Party, then New River shall arrange direct access to the portions of such data, regulatory filings or regulatory communications that are relevant to the activities of Shire that are contemplated by this Agreement. Any information obtained by a Party pursuant to this Section 3.3.1 shall be deemed Confidential Information for purposes of Article 9.

          3.3.2Within thirty (30) days after the Effective Date, New River shall provide to Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled as of the Effective Date with respect to the Collaboration Product, including any final versions of any study reports and any drafts then-outstanding of any study reports. Thereafter, New River shall provide to Shire copies of all substantive or material Manufacturing, pre-clinical and clinical data compiled with respect to the Collaboration Product as soon as reasonably practicable after such data or results become available or compiled, including any drafts and final versions of any study reports. All disclosures under this Section 3.3.2 shall be delivered in electronic format. For clarity, New River shall not be required to disclose New River’s proprietary Carrierwave^TM technology under this Agreement, except to the extent necessary for Shire to exercise its rights and perform its obligations under this Agreement or as otherwise specifically provided in this Agreement.

     3.4Development in the ROW Territory for ADHD and Other Indications.

          3.4.1Diligence. After receipt of Regulatory Approval in the US Territory for the first Collaboration Product for ADHD, Shire will commence Diligent Efforts to Develop a Collaboration Product for ADHD in the Major EU Markets. Shire will use Diligent Efforts to carry out the activities set forth in the Development Plan for Collaboration Products in each Major EU Market country where, [*], including preparing all reports necessary as part of a Drug Approval Application.

          3.4.2Costs of Development. Shire shall bear all expenses that are related to Developing and obtaining Regulatory Approval of Collaboration Products in the ROW Territory, subject to the terms of Section 3.5.1 below. The Parties recognize that Shire may desire to conduct clinical trials of Collaboration Products within the US Territory for the purpose of obtaining Regulatory Approval within the ROW Territory, and agree that, prior to receipt of Regulatory Approval in the US Territory, Shire may conduct such trials with New River’s prior written consent, such consent not to be unreasonably withheld, conditioned, or delayed; provided, that Shire is solely responsible for all costs of conducting any such trials.

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          3.4.3Regulatory Activities.

               (a)Shire shall be responsible for preparing and filing Drug Approval Applications and seeking Regulatory Approvals for Collaboration Products in the ROW Territory, including preparing all reports necessary as part of a Drug Approval Application. The Parties intend that [*] New River shall be responsible for providing to Shire, in the Common Technical Document format (unless the FDA requires a different format or the Common Technical Document format would delay the filing of the Drug Approval Application), the data and information required to be submitted to the FDA, and such additional data and information relating to the Development activities for which it was responsible, including all clinical trials performed by it and, if applicable, all manufacturing and controls information. Shire shall be responsible for prosecuting all such Drug Approval Applications and shall have a right of cross-reference to the Drug Approval Applications filed by New River in the US Territory for such purpose. New River will take all such reasonable actions to allow such cross-reference. New River shall have the right of cross-reference to all such Drug Approval Applications filed by Shire for the purpose of prosecuting Drug Approval Applications in the US Territory, and Shire shall, or shall cause its Affiliates to, take all such reasonable actions to allow such cross-reference.

               (b)In connection with all Drug Approval Applications being prosecuted by Shire hereunder, Shire agrees to provide New River with a copy (which may be wholly or partly in electronic form) of all filings to regulatory agencies in each Major EU Market country that it makes hereunder. Within thirty (30) days following the end of each calendar quarter, Shire shall report to New River regarding the status of each pending and proposed Drug Approval Application in the ROW Territory.

               (c)In the event that Shire desires New River to participate in any meeting, discussion or substantive telephone conference call with any Governmental Authority relating to any Drug Approval Application or Regulatory Approval for Collaboration Products in the ROW Territory, Shire shall provide New River with reasonable advance notice of any such meeting, discussion or conference call and New River shall participate with Shire. Shire shall promptly furnish New River with copies of all substantive documents or correspondence Shire has had with or receives from any Governmental Authority in the Major EU Markets, and contact reports concerning substantive conversations or substantive meetings with any Governmental Authority in the Major EU Markets, in each case relating to any Drug Approval Application or Regulatory Approval (including without limitation any minutes from a meeting with respect thereto).

               (d)Shire shall provide to New River, on a timely basis, copies of all material Manufacturing, pre-clinical and clinical data compiled in support of a Drug Approval Application in the ROW Territory for a Collaboration Product (but excluding any such data to the extent relating to the Manufacture of the Compound).

               (e)In the event that any Governmental Authority threatens or initiates any action to remove a Collaboration Product from the market in the ROW Territory, Shire shall notify New River of such communication immediately, but in no event later than one (1) Business Day, after receipt by Shire. Shire shall consult with New River prior to initiating a

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recall or withdrawal of Collaboration Product in a Major EU Market; provided that the final decision as to whether to recall or withdraw a Product in the ROW Territory shall be made by Shire in its sole discretion. In the event of any recall or withdrawal for Collaboration Products sold in the ROW Territory, Shire shall implement any necessary action.

          3.4.4Reporting. At each meeting of the JDC and the JSC, each Party will present a report describing the Development and Manufacturing activities performed by such Party with respect to Collaboration Products in the ROW Territory since the last such report.

     3.5Shared Expenses.

          3.5.1Except as otherwise provided in Section 3.4.2, any Development Expenses incurred by either Party that, as determined by the JDC, have worldwide application to the Development or Commercialization of the Collaboration Products will be borne [*] by Shire and [*] by New River, regardless of whether such work is conducted inside or outside of the United States (“Shared Expenses”). For clarity, Shire may use in the ROW Territory the results of Development of the first Collaboration Products for ADHD in each of Adults, Adolescents and Children, without charge, but Shire shall be solely responsible for the performance and cost of any additional studies for the ROW Territory that do not have application in the US Territory.

          3.5.2Quarterly Reconciliation of Development Expenses.

               (a)Each Party shall calculate and maintain records of Shared Expenses incurred by it in accordance with procedures to be agreed upon between the Parties.

               (b)Within five (5) Business Days following the end of each calendar quarter, Shire shall submit to New River a written report setting forth in reasonable detail, separately with respect to each Collaboration Product, the Shared Expenses it has incurred in such calendar quarter.

               (c)Within five (5) Business Days following the end of each calendar quarter, New River shall submit to Shire a written report setting forth in reasonable detail, separately with respect to each Collaboration Product, the Shared Expenses it has incurred in such calendar quarter.

               (d)Within twenty-five (25) days following the end of each calendar quarter, Shire shall submit to New River a written report setting forth in reasonable detail the calculation of all Shared Expenses for each Collaboration Product, and the calculation of any net amount owed by New River to Shire or by Shire to New River, as the case may be, in order to ensure the appropriate sharing of Shared Expenses in accordance with the provisions of Section 3.5. The net amount payable shall be paid by Shire or New River, as the case may be, within thirty five (35) days following the end of each calendar quarter; provided, that, in the event of a dispute, the disputing Party shall pay the amount not in dispute and provide written notice within five (5) Business Days after receipt of the written report in question to the other, specifying such dispute and explaining the basis of the dispute. New River and Shire shall promptly thereafter meet and negotiate in good faith a resolution to such dispute. If such dispute is not resolved within forty-five (45) days after delivery of a notice of dispute with respect

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thereto to the other Party, the disputing Party may audit the other Party pursuant to the provisions of Section 7.6.2.

          3.6Use of Third Parties. Either Party may retain Third Parties to perform Development activities, subject to the terms provided in this Section 3.6 and in Section 8.3. Each Party shall remain liable for the performance of its obligations hereunder which it delegates to such Third Parties. Any Third Parties performing Development activities hereunder shall be subject to confidentiality and non-use obligations at least as stringent as those set forth in Article 9 and must comply with the terms of Article 10.

          3.7Assistance. Subject to the terms of this Article 3, each Party agrees to provide the other with all reasonable assistance and take all actions reasonably requested by the other Party that are necessary or desirable to enable the other Party to comply with any Law applicable to the Collaboration Products, including, but not limited to, meeting, reporting and other obligations to maintain and update any Regulatory Approvals for the Collaboration Products.

          3.8Compliance with Laws. Each Party or its permitted Third Party contractors shall perform its responsibilities under this Article 3, including those set forth in a Development Plan, in accordance with all applicable Laws, including without limitation cGLPs, cGCPs (or their non-US equivalents) and cGMPs.

ARTICLE 4
COMMERCIALIZATION OF COLLABORATION PRODUCTS

     4.1Principles of Commercialization. Shire will be solely responsible for Commercializing Collaboration Products in the ROW Territory during the Term.

     4.2Sales and Distribution of Collaboration Products to Third Parties.

          4.2.1Terms of Sale to Third Parties. For each Collaboration Product, including all Improvements and Combination Products, Shire shall be solely responsible for handling all returns, recalls, order processing, invoicing and collection, distribution, and inventory and receivables arising from sales to Third Parties. New River may not accept orders from a Third Party for a Collaboration Product or make sales for its own account (except to Shire) or for Shire’s account. If New River receives any order for a Collaboration Product, it shall refer such orders to Shire for acceptance or rejection. Subject to Section 4.2.2, Shire shall have the right and responsibility for establishing and modifying the terms and conditions with respect to the sale of all Collaboration Products in the ROW Territory, including any terms and conditions relating to or affecting the price at which the Collaboration Products will be sold, discounts available to managed care providers, any discount attributable to payments on receivables, distribution of the Collaboration Products, and credits, price adjustments, or other discounts and allowances to be granted or refused.

          4.2.2[*]. If Shire or its Affiliates or sublicensees sell a Collaboration Product to a Third Party, [*] and at a [*] Shire or its Affiliates or sublicensees for sales of such Collaboration Product [*], then Shire [*] in respect of such sale.

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     4.3Marketing Plans for ROW Territory. With respect to the ROW Territory, Shire will have full authority and discretion over the content of any marketing plan.

     4.4Regulatory Obligations During Commercialization.

          4.4.1Shire Responsibilities. Shire will maintain all regulatory filings and Regulatory Approvals in the ROW Territory for each Collaboration Product Developed pursuant to this Agreement, including all INDs and Drug Approval Applications. As between the Parties, Shire will be solely responsible for all activities in connection with maintaining Regulatory Approvals required for the Commercialization of Collaboration Product in the ROW Territory, including communicating and preparing and filing all reports (including adverse drug experience reports) with the applicable Governmental Authorities, as described in further detail in Section 3.4.3.

          4.4.2Pharmacovigilance. Shire shall be responsible for all processing of information related to any adverse events, including, without limitation, any information regarding such adverse events that is received from a Third Party, related to a Collaboration Product after the First Commercial Sale of such Product. The Party conducting any clinical studies prior to such First Commercial Sale shall be responsible for all processing of information related to any adverse events associated with such studies. As soon as reasonably practicable following the date of this Agreement, the pharmacovigilance departments of each of New River and Shire shall meet and determine the approach to be taken for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Products, consistent with the provisions of this Section 4.4.2. Such approach shall be documented in a separate and appropriate written pharmacovigilance agreement between each of New River and Shire. Shire agrees to share relevant information it receives (either directly or indirectly) with New River in a timely manner so as to allow New River to comply with its responsibility to report pharmacovigilance information under this Section 4.4.2.

     4.5Diligence in Commercialization. Shire will use Diligent Efforts in each of the Major EU Markets to launch a Collaboration Product in each such country after receiving all Regulatory Approvals for such Collaboration Product in such country, and thereafter will use Diligent Efforts to Commercialize the Collaboration Product in such country.

     4.6Cost of Commercialization. In the ROW Territory, Shire shall bear all costs in connection with the Commercialization of Collaboration Products.

     4.7Use of Third Parties. Shire may retain Affiliates and/or Third Parties to perform Commercialization activities in the ROW Territory. Shire shall remain liable for the performance of its obligations hereunder that it delegates to such Affiliates and/or Third Parties. Shire covenants and agrees not to use any Third Parties to perform promotional activities for Collaboration Products in the Major EU Markets without the prior written approval of New River, such approval not to be unreasonably withheld, conditioned, or delayed. If the Parties agree to engage any such Third Party sales force, such Third Party sales force will be directed, trained and controlled by Shire.

4.8Promotional Materials.

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          4.8.1Creation of Promotional Materials. Shire will create and develop Promotional Materials for the ROW Territory. To the extent that Shire describes in any item of the Promotional Materials New River’s Carrierwave^TM proprietary technology, Shire shall include in such Promotional Materials the New River trademark for such technology. New River hereby grants Shire a royalty-free license for such purpose. To the extent Shire shall include such description and trademark in the Promotional Materials, Shire shall comply with New River’s then-current guidelines for trademark usage, a copy of which shall be provided to Shire from time to time.

          4.8.2Shire Ownership of Promotional Materials. Shire shall own all right, title and interest in and to any Promotional Materials relating to the Collaboration Products, including without limitation applicable copyrights and trademarks, but excluding trademarks owned by New River in accordance with Section 10.9, and New River hereby assigns all its right, title and interest to such Promotional Materials to Shire and agrees to execute all documents and take all actions as are reasonably requested by Shire to vest title to such Promotional Materials in Shire.

          4.8.3Use of Promotional Materials Exclusively for Collaboration Products. The Promotional Materials, and any aspects of those uniquely tied to the Collaboration Products, shall be used exclusively in connection with the Collaboration Products in accordance with the terms of this Agreement.

          4.8.4Retention of Rights. Shire and New River, or their respective Affiliates, shall retain, throughout the Term and following termination, all rights, including without limitation all copyrights and trademarks, to all of their respective programs and materials in all formats (print, video, audio, digital, computer, etc.) regarding sales training, patient education and disease management programs owned by them as of the Effective Date or developed by them during the Term but outside of this Agreement, regardless of the fact that such programs or materials are shared with the other Party, as well as any modifications of such programs or materials that they may develop in the future which are not specific to a Collaboration Product. In accordance with Section 4.8.2, Shire shall own any such modifications specific to a Collaboration Product.

     4.9Compliance with Laws. Each Party or its permitted Third Party contractors shall perform its responsibilities under this Article 4 in accordance with all applicable Laws.

ARTICLE 5
MANUFACTURE OF COLLABORATION PRODUCTS

     5.1Manufacture and Supply.

          5.1.1Manufacturing Process. New River will use Diligent Efforts to develop a process for the Manufacture of bulk Compound and to scale up such process to a level sufficient to Manufacture and supply clinical and commercial supplies of bulk Compound for the ROW Territory. New River will undertake such development in consultation with the JSC, including the preparation of filings necessary to obtain Regulatory Approval for the Manufacture of bulk Compound for the ROW Territory and the selection of any Third Party Manufacturer. In

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the event that New River includes the filings referred to in this Section 5.1.1 in Drug Master Files in the US Territory, Shire may reference such Drug Master Files for countries in the ROW Territory in which Shire seeks Regulatory Approval of Collaboration Products; provided, however, that Shire will provide New River with assistance as reasonably requested by New River, and at no cost to New River, to ensure compliance with regulatory requirements in such countries. Once such filings are made, no changes to the process for the Manufacture of bulk Compound for the ROW Territory shall be made without the written consent of Shire, such consent not to be unreasonably withheld, conditioned or delayed; provided that New River will not require the prior written consent of Shire to make changes related to the process for the Manufacture of bulk Compound for the ROW Territory hereunder that are required by a Governmental Authority or applicable Law. New River’s retention of any Third Party Manufacturer to perform any activities under this Section 5.1.1 shall be subject to the prior written approval of Shire, not to be unreasonably withheld, conditioned, or delayed.

      All costs related to the foregoing activities set forth in this Section 5.1.1 that are additional to any activities set forth in Section 6.1.1 of the US Agreement shall be charged by New River to Shire at [*]

          5.1.2Development Supply. New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, bulk Compound for Development activities to be performed by Shire under this Agreement. Any such supply will be provided by New River to Shire [*] (as determined in accordance with Exhibit A).

          5.1.3Commercial Supply. New River will Manufacture, or arrange for a Third Party Manufacturer to Manufacture, bulk Compound for use in the Manufacture of Collaboration Products by Shire or, at Shire’s direction, by a Third Party. Any such supply will be provided by New River to Shire [*] (as determined in accordance with Exhibit A). Shire will arrange for the Manufacture of Collaboration Products for sale in the ROW Territory using bulk Compound provided by New River under this Section 5.1.3.

     5.2Specifications and Terms of Supply; Multiple Sources. New River, in consultation with the JSC, shall establish the specifications, including any necessary documentation, certificates of analysis and test results, for the bulk Compound to be Manufactured under this Article 5, in each case subject to the prior written approval of Shire, such approval not be unreasonably withheld, conditioned or delayed. If a Governmental Authority in a country of the ROW Territory has promulgated any Laws or guidance documents that relate or will relate to the Manufacture of the Compound or a Collaboration Product that are different from those promulgated in the US Territory or the European Union, Shire shall notify New River of such Laws or guidance documents. The Parties shall endeavor to maintain compatible specifications for bulk Compound on a worldwide basis, and to minimize the number of distinct specifications in different countries. New River shall establish at least [*] sources of supply for bulk Compound to be Manufactured under this Article 5.

     5.3Manufacture by Shire; Commercial Supply by Shire. Shire will have the right to act as, or to appoint a Third Party to act as, a second source for Collaboration Products under terms and conditions to be established by the Parties and subject to reasonable commercial qualification by New River and applicable regulatory requirements. In connection with such

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right, Shire will prepare all specifications required for any facility at which Shire intends to Manufacture, or have Manufactured, Collaboration Products, including cGMP qualification guidelines, and any QA approved procedures to be followed during the qualification of such facility, all consistent with the specifications and procedures approved in any existing Regulatory Approval, in each case at Shire’s sole expense. Following validation of such facility, the JSC will task Shire with the production of quantities of Collaboration Products at least sufficient for Shire to maintain such validation as a second source and such quantities shall be available for distribution by Shire. In the event that [*] any agreement with a Third Party Manufacturer for the Manufacture of Compound or otherwise [*] such that there is a reasonable likelihood of insufficient quantities of Compound to satisfy the need thereof for the Manufacture of Collaboration Products, then Shire shall be entitled, but not be required, to assume in whole or in part New River’s rights and related obligations under such agreement (to the extent permissible thereunder) or otherwise direct the exercise of rights and performance of obligations by New River under such agreement, including the establishment of additional Third Party Manufacturers or Manufacture by Shire, in each case upon the mutual agreement of the Parties, such agreement not to be unreasonably withheld, delayed or conditioned. In such event the Parties shall meet and confer to devise the most effective supply plan for the bulk Compound and/or Collaboration Products and to consider amendments to this or other agreements, as necessary.

     5.4Supply Terms. The Parties, in consultation with the JSC, will establish the terms and conditions applicable to the supply of Compound by New River to Shire under this Article 5, and enter into an appropriate supply agreement with respect thereto containing terms and conditions consistent with the terms of this Agreement, including without limitation, this Article 5 and at a minimum those terms and conditions as set forth on Exhibit B, to the extent New River is able to obtain such terms from Third Party Manufacturers having used Diligent Efforts to do so. For the avoidance of doubt, such agreement will provide for the manufacture of bulk Compound only, notwithstanding the references in Exhibit B to the manufacture of “Compound or Collaboration Product.”

ARTICLE 6
FINANCIAL TERMS

     6.1Licensing Fee. As partial payment for the rights and licenses granted by New River pursuant to this Agreement, Shire shall pay to New River a license fee equal to $1,200,000 within ten (10) Business Days after the Effective Date. This fee shall be non-creditable and non-refundable against any future obligations of Shire under this Agreement, subject to Section 12.6.

     6.2Milestone Payment. Within [*] after the [*] Shire shall pay New River $5,000,000, which shall be non-creditable and non-refundable, subject to Section 12.6. For the avoidance of doubt, this milestone is paid only once regardless of the number of [*] in which a [*].

     The milestone is to be paid only once irrespective of the number of Collaboration Products Developed, Manufactured or Commercialized under this Agreement.

     6.3Royalties on Net Sales in ROW Territory.

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          6.3.1Royalty Rates [*]. As further consideration for New River’s grant of the rights and licenses to Shire hereunder, subject to the adjustments provided for in Section 6.3.3, Shire will pay, or cause to be paid, to New River, on a Collaboration Product-by-Collaboration Product basis, a royalty equal to:

               (a)[*] of aggregate Net Sales of such Collaboration Product [*], for that portion of the total amount of aggregate Net Sales of such Collaboration Product [*] in any calendar year that is less than or equal to [*];

               (b)[*] of aggregate Net Sales of such Collaboration Product [*], for that portion of the total amount of aggregate Net Sales of such Collaboration Product [*] in any calendar year that is greater than $[*] but less than or equal to $[*];

               (c)[*] of aggregate Net Sales of such Collaboration Product [*] for that portion of the total amount of aggregate Net Sales of such Collaboration Product [*] in any calendar year that exceeds [*].

          6.3.2[*]. As further consideration for New River’s grant of the rights and licenses to Shire hereunder, subject to the adjustments provided for in Section 6.3.3, Shire will pay, or cause to be paid, to New River a royalty equal to [*] of Net Sales of each Collaboration Product in the [*]

          6.3.3Royalty Rate Adjustment. The rates set forth in Sections 6.3.1 and 6.3.2 shall be reduced by [*] (to [*]%,[*]%, and [*]%, and [*]%, respectively) with respect to Net Sales of a Collaboration Product in a particular country in which, and during such time as, a Generic Product of such Collaboration Product has been launched and is then offered for sale by a Third Party in such country.

          6.3.4Royalty Term. Royalties due under Sections 6.3.1 and 6.3.2 will commence upon the First Commercial Sale of a Collaboration Product in a particular country in the ROW Territory and will expire on a country-by-country basis upon the later of: (a) the expiration of the last-to-expire Licensed Patent containing a Valid Claim that would be infringed by the Manufacture, use, or sale of the Collaboration Product in such country by an unlicensed Third Party if such unlicensed Third Party were to Manufacture the Collaboration Product in such country of Manufacture, or use or sell the Collaboration Product in such country of sale, and (b) [*] from the First Commercial Sale of the Collaboration Product in such country.

ARTICLE 7
PAYMENT TERMS

     7.1Payment Method. All amounts due to either Party hereunder will be paid in United States Dollars by wire transfer in immediately available funds to an account designated by such Party. Any payments or portions thereof due hereunder that are not paid by the date such payments are due under this Agreement will bear simple interest at the lower of (a) [*][*] the US Prime Rate, as reported in the Wall Street Journal, Eastern Edition, on the due date (or, if the due date is not a business day, on the last business day prior to such due date), or (b) the maximum rate permitted by applicable Law, calculated on the number of days such payment is delinquent; provided that such interest shall not be due to the extent that a payment is

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inadvertently paid late (e.g., if such late payment is accompanied by reasonable evidence that the payor was not aware of the due date of the payment or reasonable explanation that such payment due date was unintentionally missed) and if the payor acts in good faith in making payment as soon as it discovers that a required payment has not been made.

     7.2Payment Schedules; Reports. The payments due pursuant to Sections 3.5.2, 6.1, 6.2 and 10.3.5 are due and payable on the dates described therein. Royalty payments due pursuant to Section 6.3 are due and payable within thirty-five (35) days of the end of each calendar quarter during the Term during which there were Net Sales of Collaboration Products in the ROW Territory. Shire will accompany each payment of royalties under this Agreement with a report setting forth, on a country-by-country basis, the amount of gross sales of each Collaboration Product in such country, a calculation of Net Sales, the currency conversion rate used and the United States Dollar-equivalent of such Net Sales, and a calculation of the amount of royalty payment due on such Net Sales. Such report will be considered Confidential Information of Shire subject to the obligations of Article 9 of this Agreement. The Parties acknowledge that any expenses or costs reported or shared in any way under this Agreement may be based upon estimates, which estimates will be GAAP-compliant; provided that when the actual results become known relative to any estimated amount, any difference between the actual results and the estimate is reported and the next payment due hereunder related to such estimated item is appropriately adjusted for such difference. The Parties acknowledge and agree that any reports and payments relating to any cost, expense, or other financial amount shared pursuant to this Agreement for the fourth quarter of any calendar year shall reflect year-end reconciliations and adjustments, if any, applicable to the previous three quarters’ reported results.

     7.3Currency Conversion. For any currency conversion required in determining the amount of royalties due hereunder, such conversion will be made at the exchange rate used by Shire, consistent with its general internal corporate policies as they relate to its income statement, for its own consolidation purposes for the translation of such currency into United States Dollars for any royalty payments due pursuant to this Agreement. Such policies will be made available to New River upon request and will be consistent with customary industry practices.

     7.4Legal Restrictions. If at any time legal restrictions prevent the remittance by Shire of all or any part of royalties on Net Sales in any country, Shire will have the right and option to make such payment by depositing the amount thereof in local currency to an account in the name of New River in a bank or other depository in such country. Shire will consult with New River regarding, and promptly notify New River of, any and all such arrangements.

     7.5Taxes.

          7.5.1Withholding Taxes. New River will be responsible for any and all income or other taxes owed by New River and required by applicable Law to be withheld or deducted from any of the royalty and other payments made by or on behalf of Shire to New River hereunder (“Withholding Taxes”), and Shire may deduct from any amounts that Shire is required to pay hereunder an amount equal to such Withholding Taxes; provided, however, that if New River is not able to claim a credit or reimbursement for such tax, in whole or in part, as a result of Shire being a non-US entity, then Shire will deduct Withholding Taxes in accordance with this Section 7.5.1, but will, in addition to the sums otherwise payable under this Agreement,

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pay to New River such further sum as will ensure that, after deduction of Withholding Taxes on all such sums, the net amount received by New River equals the amount that New River would have received had the non-creditable or non-reimbursable excess portion of such additional Withholding Taxes not been deducted. Shire will provide New River with reasonable advance notice of tax withholding obligations to which it reasonably believes that it is subject. New River will provide Shire any information available to New River that is necessary to determine the Withholding Taxes. Such Withholding Taxes will be paid to the proper taxing authority for New River’s account and evidence of such payment will be secured and sent to New River within one (1) month of such payment. The Parties will do all such lawful acts and things and sign all such lawful deeds and documents as either Party may reasonably request from the other Party to enable New River and Shire or its Affiliates or sublicensees to take advantage of any applicable legal provision or any treaty provisions with the object of paying the sums due to New River hereunder with the lowest legal amount of Withholding Taxes.

          7.5.2Additional Withholding Taxes. If, as a result of any change in the corporate status or location of Shire, or the permitted assignment of this Agreement by Shire, additional Withholding Taxes become due on payments from Shire or its permitted assignee to New River that would not have been due absent such change in corporate status or location or permitted assignment, and New River is not able to claim a credit or reimbursement for such tax, in whole or in part, then Shire will deduct Withholding Taxes in accordance with this Section 7.5, but will, in addition to the sums otherwise payable under this Agreement, pay to New River such further sum as will ensure that, after deduction of Withholding Taxes on all such sums, the net amount received by New River equals the amount that New River would have received had the non-creditable or non-reimbursable excess portion of such additional Withholding Taxes not been deducted. To the extent that any such amount paid by Shire to New River in accordance with this Section 7.5 is in fact subsequently able to be claimed by New River as a credit or reimbursement for such tax otherwise deducted, then New River will repay such amount to Shire.

     7.6Records Retention; Audit.

          7.6.1Record Retention. Each Party will maintain complete and accurate books, records and accounts used for the determination of expenses incurred in connection with the performance of Development or Commercialization activities or otherwise relevant for the calculation of Net Sales, in sufficient detail to confirm the accuracy of any payments required under this Agreement, which books, records and accounts will be retained by such Party for three (3) years after the end of the period to which such books, records and accounts pertain, or longer as is required by applicable Law.

          7.6.2Audit. Each Party will have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to the other Party, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of the other Party as may be reasonably necessary to verify the accuracy of any expenses shared or paid by the other Party under this Agreement or the calculation of Net Sales for any calendar year ending not more than three (3) years prior to the date of such request; provided, however, that, no Party will have the right to conduct more than one such audit in any twelve (12) month period and that the auditing Party shall not be permitted to audit the same

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period of time more than once, unless evidence of fraud or gross negligence arises in a subsequent audit and the auditing Party reasonably believes that such evidence indicates the reasonable possibility of fraud or gross negligence in any such prior period. The accounting firm will disclose to the Parties only whether the various expenses subject to being shared by this Agreement or Net Sales reported by the audited Party are correct or incorrect and the specific details concerning any discrepancies. The auditing Party will bear all costs of such audit, unless the audit reveals a discrepancy in the auditing Party’s favor of more than [*], in which case the audited Party will bear the cost of the audit. If the audited Party disputes the findings pursuant to this Section 7.6.2, the Parties shall meet and discuss such dispute. If such dispute is not resolved within forty-five (45) days, then it shall be subject to Article 15. Shire shall use Diligent Efforts to obtain from any sub-licensee audit rights at least as favorable as the audit rights set forth in this Section 7.6.2 and the right to share the results of any such audit with New River. In the event that New River reasonably believes that there is a material inaccuracy in the reporting by a sub-licensee of the Net Sales of such sub-licensee, then New River may direct Shire to exercise such audit rights in accordance with procedures reasonably requested by New River. New River shall succeed to the rights and obligations of Shire in respect of any costs or expenses associated with a sub-licensee audit requested by New River.

          7.6.3Payment of Additional Amounts. If, based on the results of any audit, additional payments are owed to either Party under this Agreement, then the paying Party will make such additional payments within five (5) Business Days after the accounting firm’s written report is delivered to the Parties. The provisions of Section 7.1 shall apply to such payment.

          7.6.4Confidentiality. Each Party will treat all information subject to review under this Section 7.6 in accordance with the provisions of Article 9. Prior to conducting any audit hereunder, the Party conducting such audit will cause its accounting firm to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating such accounting firm to maintain all such financial information in confidence with standards no less stringent that the terms of this Article 9 of this Agreement.

ARTICLE 8
LICENSES

     8.1Licenses to Shire. Subject to the terms of this Agreement, New River hereby grants to Shire an exclusive license, with the right to grant sublicenses as provided in Section 8.3, under the Licensed Patents, the Licensed Know-How and New River’s interest in any Joint Collaboration Patents to (a) Develop and use Collaboration Products for Commercialization in the Field in the ROW Territory and to Commercialize Collaboration Products in the Field in the ROW Territory, and (b) to make bulk and finished Collaboration Products (but not the Compound, except as otherwise provided in Article 5) for Commercialization in the Field in the ROW Territory. Notwithstanding the foregoing, New River shall retain the co-exclusive right under the Licensed Patents, Licensed Know-How and New River’s interest in any Joint Collaboration Patents in the ROW Territory for the purpose of research and Development of Collaboration Products in the Field in accordance with a Development Plan.

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     8.2Licenses to New River. Subject to the terms of this Agreement, Shire hereby grants to New River an exclusive (except as to Shire), paid-up license, without the right to grant sublicenses (except to Affiliates of New River), under the Shire Patents and Shire Know-How solely to conduct Development and Commercialization of Collaboration Products in the Field in the US Territory pursuant to the US Agreement, and to supply Shire Collaboration Products and Compound for the ROW Territory in accordance with the terms of this Agreement.

     8.3Sublicensing. Shire may grant sublicenses under Section 8.1: [*]; provided, however, that the Development activities undertaken by any sublicensee of such rights will be subject to the oversight and authority of the JDC. The entry by Shire into a sublicense shall not relieve Shire of its obligations under this Agreement, including the obligation to report the Net Sales of such sublicensee.

     8.4Scope of Licenses. As used in this Article 8, a license that is “exclusive except as to” the granting Party means that the Party granting the license shall not grant any other entity (other than its Affiliates) any license under such patent rights with the right to practice within the Field, but that otherwise the granting Party retains all its rights of ownership in such licensed rights, including without limitation the right to practice such patent rights, subject only to the license granted.

     8.5No Implied Licenses. Except as expressly provided in this Agreement, neither Party grants to the other Party any right or license in any intellectual property right, whether by implication, estoppel or otherwise. No implied licenses are granted under this Agreement. Each Party hereby covenants and agrees not to use or sublicense any of its rights under the licenses set forth in this Article 8 except as expressly permitted in this Agreement.

     8.6Exclusivity. During the Term, New River hereby covenants and agrees not to, itself or through or with any Affiliate or Third Party, (a) develop, market, promote, sell, or otherwise commercialize any pharmaceutical products containing or comprising [*] or other compound where an active moiety of such compound is [*], other than Collaboration Products, (b) or develop, market, promote, sell, or otherwise commercialize any pharmaceutical products containing [*] formulated for [*] for the treatment or prevention of ADHD, other than Collaboration Products, or (c) grant any license to a Third Party to perform any activities described in the preceding clauses (a) or (b), in each case without the express prior written approval of Shire.

     8.7Nonassertion. New River and its Affiliates hereby covenant and agree not to, alone or in cooperation with any Third Party, [*], the manufacture, use, offer for sale, sale, distribution, import or export of which is done under and in accordance with the terms of this Agreement. This covenant will run with and attach to any and all intellectual property owned or controlled, in whole or in part, by New River and shall be binding upon any assignee of any intellectual property from New River.

     8.8[*]. New River will be permitted to terminate this Agreement by written notice effective upon receipt if [*] (each such [*]). Shire will include provisions in all agreements granting sublicenses of Shire’s rights hereunder providing that if the sublicensee or its Affiliates undertake a [*] with respect to [*] under which the sublicensee is sublicensed, Shire will be

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permitted to terminate such sublicense agreement. If a sublicensee of Shire (or an Affiliate of such sublicensee) undertakes a [*] [*] of any such [*] under which such sublicensee is sublicensed, then Shire upon receipt of notice from New River of such [*] will terminate the applicable sublicense agreement. If Shire fails to so terminate such sublicense agreement, New River may terminate Shire’s right to sublicense in the countr(ies) covered by such sublicense agreement and any sublicenses previously granted in such countr(ies) shall automatically terminate. In connection with such sublicense termination, Shire shall cooperate with New River’s reasonable requests to cause such a terminated sublicensee to discontinue activities with respect to the Collaboration Product in such countr(ies).

ARTICLE 9
CONFIDENTIALITY

     9.1Confidential Information.

          9.1.1Confidential Information. As used in this Agreement, the term “Confidential Information” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to this Agreement or generated pursuant to this Agreement or the US Agreement by one Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, and any other materials that have not been made available by the Disclosing Party to the general public. Notwithstanding the foregoing sentence, Confidential Information shall not include any information or materials that:

               (a)were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

               (b)were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

               (c)became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

               (d)were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

               (e)were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

          9.1.2Confidentiality Obligations. Each of New River and Shire shall keep all Confidential Information received from the other Party with the same degree of care it maintains

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the confidentiality of its own Confidential Information. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement; provided, however, that a Receiving Party shall advise any of its and its Affiliates’ directors, managers, employees, independent contractors, agents or consultants who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure (including, in the case of a Third Party, by means of a written agreement with such Third Party having terms at least as protective as those contained in this Article 9) that all such directors, managers, employees, independent contractors, agents or consultants comply with such obligations as if they had been a Party hereto. Upon termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party or its directors, managers, employees, independent contractors, agents or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall be deemed to be the property of the Disclosing Party, and shall continue to be subject to the provisions of this Article 9. It is understood that receipt of Confidential Information under this Agreement will not limit the Receiving Party from assigning its employees to any particular job or task in any way it may choose, subject to the terms and conditions of this Agreement.

          9.1.3Permitted Disclosure and Use. Notwithstanding Section 9.1.2, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Regulatory Approval of a Collaboration Product to the extent such disclosure is made to a Governmental Authority; (b) comply with or enforce any of the provisions of this Agreement; (c) comply with Laws; or (d) comply with applicable stock exchange or Nasdaq regulation. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 9.1.3, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. In addition, notwithstanding Section 9.1.2, the Parties shall prepare standardized responses to anticipated inquiries from the public or press, stockholders, investors and/or analysts with respect to the Compound, Collaboration Product or other activities hereunder that may be disclosed. Notwithstanding anything to the contrary in this Article 9, Shire shall not disclose to any Third Party Confidential Information of New River disclosing the Manufacture of Compound, without the prior written consent of New River, not to be unreasonably withheld, delayed or conditioned.

          9.1.4Notification. The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and will cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure.

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     9.2Publicity; Filing of this Agreement. After the execution of the January Agreement, the Parties announced the execution of the January Agreement using the form of the press release attached as Exhibit C (the “Joint Press Release”). Any other publication, news release or other public announcement relating to this Agreement or to the performance hereunder, shall first be reviewed and approved by both Parties; provided, however, that any disclosure which is required by Law as advised by the disclosing Party’s counsel may be made without the prior consent of the other Party. To the extent practicable, the disclosing Party shall be given at least three (3) Business Days advance notice of any such legally required disclosure, and the other Party shall provide any comments on the proposed disclosure during such period. To the extent that either Party determines that it or the other Party is required to file or register this Agreement or a notification thereof to comply with the requirements of an applicable stock exchange or Nasdaq regulation or any Governmental Authority, including without limitation the U.S. Securities and Exchange Commission, the Competition Directorate of the Commission of the European Communities or the U.S. Federal Trade Commission, such Party shall promptly inform the other Party thereof. Prior to making any such filing, registration or notification, the Parties shall agree on the provisions of this Agreement for which the Parties shall seek confidential treatment, it being understood that if one Party determines to seek confidential treatment for a provision for which the other Party does not, then the Parties will use reasonable efforts in connection with such filing to seek the confidential treatment of any such provision. The Parties shall cooperate, each at its own expense, in such filing, registration or notification, including without limitation such confidential treatment request, and shall execute all documents reasonably required in connection therewith. In furtherance of the foregoing, the Parties will agree as promptly as practicable after the Effective Date on the confidential treatment request to be filed with the U.S. Securities and Exchange Commission and the redacted form of this Agreement related thereto. In that connection, any redaction reasonably requested by either Party shall be included in such filing. The Parties will reasonably cooperate in responding promptly to any comments received from the U.S. Securities and Exchange Commission with respect to such filing in an effort to achieve confidential treatment of such redacted form; provided, however, that a Party shall be relieved of such obligation to seek confidential treatment for a provision requested by the other Party if such treatment is not achieved after the second round of responses to comments from the U.S. Securities and Exchange Commission.

     9.3Publication. Each Party shall submit copies of each proposed academic, scientific, medical and other publication or presentation that contains or refers to the Licensed Patents, Licensed Know-How or otherwise relates to a Collaboration Product or any research or Development activities under this Agreement to the other Party at least sixty (60) days in advance of submitting such proposed publication or presentation to a publisher or other Third Party. Such other Party shall have the right to review, comment on and approve each such proposed publication or presentation for accuracy and to ascertain whether such Party’s Confidential Information is being inappropriately utilized and/or released. The non-publishing Party shall have the right to remove any of its Confidential Information prior to submission for publication or presentation. The publishing Party shall redact or otherwise modify the proposed publication or presentation to remove any such Confidential Information of the other Party. In addition, in the event that the document includes data, information or material generated by a Party’s scientists, and professional standards for authorship would be consistent with including such Party’s scientists as co-authors of the document, the names of such scientists will be included as co-authors. A Party may publicly disclose without regard to the preceding

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requirements of this Section 9.3 any information that was previously disclosed in a public disclosure that was in compliance with such requirements.

     9.4Use of Names. Neither Party shall use the name of the other Party in relation to this transaction in any public announcement, press release or other public document without the written consent of such other Party, which consent shall not be unreasonably withheld or delayed; provided, however, that either Party may use the name of the other Party in any document filed with any regulatory agency or authority, including the FDA and the Securities and Exchange Commission.

     9.5Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article 9.

     9.6Disclosures Under Existing NDA. The Parties agree and acknowledge that New River and Shire US, Inc. entered into that certain Existing NDA. For purposes of this Section 9.6, the term “Existing NDA” means that certain Non-Disclosure and Confidentiality Agreement, dated as of July 16, 2002, as amended by letter agreements on July 13, 2004, October 29, 2004, November 12, 2004, November 15, 2004, by and among the Parties and various other Affiliates and independent contractors of Shire. The Parties agree that “Confidential Information” (as such term is used in the Existing NDA) disclosed to Shire Affiliates under the Existing NDA prior to the Effective Date shall be deemed to have been disclosed under this Agreement and, from and after the Effective Date, shall be held in confidence by such Shire Affiliates in accordance with the terms of this Article 9. To the extent that Shire retains Prior Consultants to perform activities under this Agreement in connection with which such Prior Consultant is provided Confidential Information of New River, then such Prior Consultant shall be made subject to the provisions of this Article 9 with respect to disclosures of “Confidential Information,” as such term is used in the Existing NDA. The term “Prior Consultants” means those persons added as parties to the Existing NDA pursuant to those amendments to the Existing NDA made as of November 12, 2004 and November 15, 2004.

     9.7Survival. The obligations and prohibitions contained in this Article 9 shall survive the expiration or termination of this Agreement for a period of ten (10) years.

ARTICLE 10
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

     10.1Ownership.

          10.1.1New River shall solely own, and it alone shall have the right to apply for Patents, within and outside of the United States for any New River Inventions and Shire shall solely own, and it alone shall have the right to apply for Patents, within and outside of the United States for any Shire Inventions. New River and Shire will each own an undivided one-half interest in any Joint Inventions and any Patents claiming such Joint Inventions (“Joint Collaboration Patents”), in each case without obligation to account to the other for the exploitation thereof or to seek consent of the other for the grant of any licenses thereunder, subject to the licenses and rights granted by the Parties in this Agreement. Each Party shall

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promptly disclose to the other Party all Inventions made by it during the Term. The determination of inventorship for Inventions shall be made in accordance with applicable Laws relating to inventorship set forth in the patent Laws of the United States (Title 35, United States Code).

          10.1.2Each Party will require all of its and its Affiliates’ employees to assign all Inventions that are the subject of patent applications claiming Inventions that are developed, made or conceived by such employees according to the ownership principles described in this Section 10.1. Each Party will require any agents or independent contractors performing an activity pursuant to this Agreement to assign all Inventions that are the subject of patent applications claiming Inventions that are developed, made or conceived by such agents or independent contractors to New River and/or Shire according to the ownership principles described in this Section 10.1.

     10.2Disclosures; Disputes Regarding Inventions. Each Party shall, before filing a new patent application (including without limitation provisionals and continuations-in-part, but excluding continuations, divisionals, and requests for continued examinations) claiming an Invention, promptly disclose such Invention to the other Party, including Joint Inventions, New River Inventions and Shire Inventions and shall provide the other Party with a copy of the proposed patent application at least ten (10) Business Days before filing such application or such shorter time as may be required to preserve Patent rights, including, without limitation, the avoidance of a statutory bar. If the non-filing Party believes that the filing Party’s proposed patent application discloses Confidential Information of the non-filing Party, the non-filing Party shall so notify the filing Party within such ten (10) Business Days, and the filing Party shall amend its proposed application to comply with the confidentiality provisions of this Agreement. If the Parties are in agreement as to the designation of the Invention as Joint Invention, New River Invention or Shire Invention, they can continue as set forth in Section 10.3 below. If the Parties disagree as to whether an Invention is a Joint Invention, New River Invention or Shire Invention, and are unable to reach agreement within thirty (30) days after commencing discussions, then each Party will have the right to avail itself of any legally recognizable remedy in accordance with Article 15 of this Agreement and applicable Law.

     10.3Patent Filings.

          10.3.1New River Responsibilities. New River shall prepare, file, prosecute and maintain Patents to cover (a) New River Inventions (the “New River Collaboration Patents”), and (b) the Licensed Patents. New River shall keep Shire informed of the status of each such Patent and shall give Shire a reasonable opportunity to provide comments to any communication from any patent office. New River shall give reasonable consideration to any suggestions or recommendations of Shire concerning the preparation, filing, prosecution and maintenance thereof, including suggestions of the JIPC pursuant to the terms set forth in Sections 2.4 and 2.6.3. Promptly after the Effective Date, New River shall provide Shire with copies of the file histories of all Licensed Patents and shall update such file histories promptly upon receipt of any additional communications from any patent offices and patent counsel or agents pertaining thereto. New River shall also provide Shire with copies of any communications from any patent offices and patent counsel or agents pertaining to any New River Collaboration Patents. New River, at Shire’s request, shall [*][*] in any New River Collaboration Patent, Licensed Patent or

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a continuation or divisional of either of the foregoing, the type of application being at New River’s discretion; provided, however, New River may refuse to [*] if New River reasonably believes, in good faith, that [*] If the [*] New River will [*] and shall give reasonable consideration to any suggestions or recommendations of Shire concerning [*]. The Parties shall cooperate reasonably in the prosecution of all Patents under this Section 10.3.1 and shall share all material information relating thereto promptly after receipt of such information. If, during the term of this Agreement, New River intends to allow any Licensed Patent to expire or intends to otherwise abandon any Licensed Patent, New River shall notify Shire of such intention at least sixty (60) days prior to the date upon which such Licensed Patent shall expire or be abandoned, and Shire shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof.

          10.3.2Shire Responsibilities. Shire shall file, prosecute and maintain Patents to cover Shire Inventions conceived pursuant to this Agreement or the US Agreement (the “Shire Collaboration Patents”). Shire shall keep New River informed of the status of each such Patent and shall give reasonable consideration to any suggestions or recommendations of New River concerning the preparation, filing, prosecution and maintenance thereof, including the suggestions of the JIPC pursuant to the terms set forth in Sections 2.4 and 2.6.3. The Parties shall cooperate reasonably in the prosecution of all Shire Patents under this Section 10.3.2 and shall share all material information relating thereto promptly after receipt of such information. If, during the Term, Shire intends to allow any Shire Patent to which New River has a license under this Agreement to expire or intends to otherwise abandon any Shire Patent, Shire shall notify New River of such intention at least sixty (60) days prior to the date upon which such Shire Patent shall expire or be abandoned, and New River shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof.

          10.3.3Jointly Owned Patents. The responsibility for the filing, prosecution and maintenance of Joint Collaboration Patents shall be determined by the Parties, including conducting related interference and opposition proceedings relating thereto, without prejudice to ownership, on behalf of both Parties based on a good faith determination of the relative contributions of the Parties to the Invention and the relative level of interest of the Parties in the Invention; provided, however that the Parties may also decide not to file a Joint Collaboration Patent for any such Joint Invention. At least ten (10) Business Days prior to the contemplated filing, the Party responsible for such activities for a Joint Collaboration Patent shall submit a substantially completed draft of such Joint Collaboration Patent to the other Party for its approval. Should the agreed upon Party elect not to prepare and/or file any such Joint Collaboration Patent, it shall (a) provide the other Party with written notice as soon as reasonably possible after making such election but in any event no later than twenty (20) Business Days before the other Party would be faced with a possible loss of rights, (b) give the other Party the right, at the other Party’s discretion, to prepare, file, prosecute or maintain the Joint Collaboration Patent, and (c) offer reasonable assistance in connection with such preparation, filing, prosecution or maintenance.

          10.3.4Cooperation. The Parties agree to cooperate in the preparation, filing, prosecution and maintenance of all Patents under this Section 10.3, including obtaining and executing necessary powers of attorney and assignments by the named inventors, providing

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relevant technical reports to the filing Party concerning the Invention disclosed in such Patent, obtaining execution of such other documents which shall be needed in the filing and prosecution of such Patent, and, as requested, updating each other regarding the status of such Patent, and shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to obtain or maintain such Patents.

          10.3.5Patent Expenses. Patent Expenses for the ROW Territory shall be borne [*]; provided, however, if New River incurs any expenses for any country in which Shire has notified New River at least thirty (30) days advance notice in writing either that it does not intend to Commercialize a Collaboration Product in such country, or that it has abandoned such Commercialization, any fee or expense incurred with respect to patents in such country shall be the sole responsibility of New River and shall not be deemed Patent Expenses effective as of the end of such notice period. Within five (5) Business Days following the end of each calendar quarter, each Party shall deliver a report outlining its Patent Expenses for such quarter. Within thirty (30) days following the end of each such quarter, the Party incurring less than [*] of such expenses during the quarter shall reimburse the other Party an amount sufficient to [*] each Party’s share of such costs. In the event that Shire notifies New River that it does intend to Commercialize a Collaboration Product in any country in which it has previously notified of an intention not to Commercialize or abandoned Commercialization, or so Commercializes such Collaboration Product in such country, then Shire shall reimburse New River for an amount equal to [*] of the Patent Expense for the applicable country incurred from the effective date of such notification.

     10.4Third-Party Patent Rights. Except as otherwise provided in Section 11.1 below, neither Party makes any warranty with respect to the validity, perfection or dominance of any Patent or other proprietary right or with respect to the absence of rights in Third Parties which may be infringed by the Manufacture or Commercialization of any Collaboration Product. Each Party agrees to bring to the attention of the other Party any patent or patent application it discovers, or has discovered, and which relates to the subject matter of this Agreement.

     10.5Enforcement and Defense of Patents.

          10.5.1Infringement of Third Party Patents.

               (a)Third Party Claims; Third Party Royalties. In the event of a Third Party Claim against Shire, New River or their respective Affiliates alleging that the making, using, importing, selling or offering to sell a Collaboration Product infringes or will infringe claims in any patents of a Third Party, the Party first obtaining knowledge of such Third Party Claim shall immediately provide the other Party notice of such Third Party Claim with the related facts in reasonable detail. Shire shall have the first right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of Shire’s choice if Shire or any of its Affiliates are named as a party to such Third Party claim and New River or any of its Affiliates are not. In such case, New River shall have the right to be represented by independent counsel at New River’s own expense. New River shall have the first right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of New River’s choice if New River or any of its Affiliates are named as a party to such Third Party claim and Shire or any of its Affiliates are not. In such case, Shire shall have the right to

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be represented by independent counsel at Shire’s own expense. If either Party refuses to accept control of the defense of a Third Party Claim for which it has the first right to control defense hereunder within [*] after receiving or giving notice thereof, then the other Party shall have the right to defend against such Third Party Claim. In such case, such refusing Party shall have the right to be represented by independent counsel at its own expense. If (1) Shire or any of its Affiliates and (2) New River or any of its Affiliates are named as parties to such Third Party Claim, then the Parties will have the joint right, but not the obligation, to control such defense with respect to the Collaboration Product with an attorney of their mutual agreement. If the Parties are unable to agree on such joint defense, then the Parties will use good faith efforts to determine the Party to assume control of such defense and choice of counsel. In such case, the other Party shall have the right to be represented by independent counsel at its own expense. If, as a result of a judgment in any litigation or settlement with a Third Party, Shire or its Affiliates are required to pay royalties to any Third Party (“Third Party Royalty”), then, on a country-by-country basis and product-by-product basis, the royalty due to New River under this Agreement with respect to Net Sales in the ROW Territory will be [*] of the Third Party Royalty, provided that the royalty due to New River will not be reduced to less than [*] of the royalty that would be due to New River in the absence of such Third Party Royalty.

               (b)Cooperation. If a Party shall become engaged in or participate in any suit described in this Section 10.5.1, the other Party shall cooperate, and shall cause its and its Affiliates’ employees to cooperate, with such Party in all reasonable respects in connection therewith, including giving testimony and producing documents lawfully requested, and using its reasonable and diligent efforts to make available to the other, at no cost to the other (other than reimbursement of actually incurred, reasonable out-of-pocket travel and lodging expenses), such employees who may be helpful with respect to such suit, investigation, claim, interference or other proceeding.

          10.5.2Prosecution of Infringers.

               (a)Notice. If either Party learns that a Third Party is infringing or allegedly infringing any Patent within the Licensed Patents, the Shire Patents or the Joint Collaboration Patents or if any Third Party claims that any such Patent is invalid or unenforceable, it will promptly notify the other Party thereof including available evidence of infringement or the claim of invalidity or unenforceability. The Parties will cooperate and use reasonable efforts to stop such alleged infringement or to address such claim without litigation.

               (b)Enforcement and Defense of Licensed Patents, Joint Collaboration Patents and Shire Collaboration Patents.

                    (i)Shire will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Shire Collaboration Patents. Shire may take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*]. Notwithstanding the foregoing, New River will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

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                    (ii)If, pursuant to Section 10.5.2(b)(i), Shire fails to take the appropriate steps to enforce or defend any Patent within the Shire Collaboration Patents within [*] days of the date one Party has provided notice to the other Party pursuant to Section 10.5.2(a) of such infringement or claim, then New River will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice and Shire will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (iii)New River will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Licensed Patents. New River may, in any such instance, take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*]. Notwithstanding the foregoing, Shire will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (iv)If, pursuant to Section 10.5.2(b)(iii), New River fails to take the appropriate steps to enforce or defend any Patent within the Licensed Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 10.5.2(a) of such infringement or claim, then Shire will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice, and New River will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (v)In the case of Joint Collaboration Patents, the Parties will decide whether Shire or New River will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Joint Collaboration Patents. The Party so selected may, in any such instance, take steps including the initiation, prosecution and control any suit, proceeding or other legal action by counsel of its own choice. Each of New River and Shire will bear the costs of such enforcement or defense [*] and the Party that is not so selected will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (vi)If, pursuant to Section 10.5.2(b)(v), the Party selected fails to take the appropriate steps to enforce or defend any Patent within the Joint Collaboration Patents within [*] of the date one Party has provided notice to the other Party pursuant to Section 10.5.2(a) of such infringement or claim, then the other Party will have the right (but not the obligation), at its own expense, to bring any such suit, action or proceeding by counsel of its own choice, and the Party so selected will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

                    (vii)Notwithstanding Sections 10.5.2(b)(i) -(vi), Shire will have the sole discretion whether to commence [*] and the sole right to commence [*] which may result in [*] [*] for such Third Party. For the avoidance of doubt, New River shall not have the right to commence [*] [*] which may result [*] for such Third Party. Any such [*] as may be required by Law.

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               (c)Cooperation; Damages.

                    (i)If one Party brings any suit, action or proceeding under this Section 10.5.2, the other Party agrees to be joined as party plaintiff if necessary to prosecute the suit, action or proceeding and to give the first Party reasonable authority to file and prosecute the suit, action or proceeding; provided, however, that neither Party will be required to transfer any right, title or interest in or to any property to the other Party or any other party to confer standing on a Party hereunder.

                    (ii)The Party not pursuing the suit, action or proceeding hereunder will provide reasonable assistance to the other Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any out-of-pocket expenses incurred by the non-enforcing or defending Party in providing such assistance.

                    (iii)Neither Party will settle or otherwise compromise any such suit, action or proceeding in a way that adversely affects the other Party’s intellectual property rights or its rights or interests with respect to the Collaboration Product without such Party’s prior written consent.

                    (iv)Any settlements, damages or other monetary awards (the “Recovery”) recovered pursuant to a suit, action or proceeding brought pursuant to Section 10.5.2 will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) with respect to a country in the ROW Territory to be shared [*].

     10.6Notice of Certification. New River and Shire each shall immediately give notice to the other of any certification filed under the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (or its foreign equivalent) claiming that a Licensed Patent, Joint Collaboration Patent or a Shire Collaboration Patent is invalid or that infringement of a Licensed Patent, Joint Collaboration Patent or Shire Collaboration Patent will not arise from the manufacture, use, offer for sale, sale or importation product by a Third Party (“Hatch-Waxman Certification”). Nothing in this Section 10.6 shall prevent or otherwise limit New River’s right to take any and all such actions with regard to the matters described in this Section 10.6 as required by applicable Law.

     10.7Patent Term Extensions. New River and Shire shall cooperate in good faith in gaining patent term extensions due to delay(s) in Regulatory Approval wherever applicable to the Licensed Patents, Joint Collaboration Patents and Shire Collaboration Patents. However, Shire shall have the sole discretion in determining which Licensed Patent(s), Joint Collaboration Patent(s), or Shire Collaboration Patent(s) to extend for any particular compound, composition, article, product, process, or use.

     10.8Listing of Patents. Shire shall have the right to determine which of the [*], if any, shall be submitted for inclusion in the Approved Drug Products with Therapeutic Equivalence Evaluations pursuant to 21 U.S.C. Section 355, or any successor Law in the United States, together with any comparable Laws in any other country. Shire shall notify New River at

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least ten (10) Business Days prior to the deadline for any such submission, and New River shall submit the designated Patents in accordance with applicable Law. In addition, New River may in its discretion, and to the extent permitted by Law, submit any additional [*] that are not designated by Shire. Nothing in this Section 10.8 shall prevent or otherwise limit New River’s right to take any and all such actions with regard to the matters described in this Section 10.8 as required by applicable Law.

     10.9Trademarks and Copyrights.

          10.9.1Product Trademarks. All Collaboration Products shall be marketed and sold worldwide under and in connection with trademarks, trade dress, logos and slogans selected in accordance with this Section 10.9.

          10.9.2Trademark Selection. Shire shall select trademarks, trade dress, logos and slogans for a Collaboration Product for use in the ROW Territory. Trademark(s), trade dress, logo(s) and slogan(s) under which Collaboration Products are marketed or sold (other than either Party’s corporate trademarks or trade names, and New River’s Carrierwave^TM mark used in connection with technology related to the Compound) shall be used only pursuant to the terms of this Agreement to identify and in connection with the marketing of Collaboration Products, and shall not be used by either Party to identify or in connection with the marketing of any other products. Each Party shall have a right to prior review and approval of all Promotional Materials incorporating any of its trademarks, trade dress, logos or slogans sufficient to permit such Party to maintain quality control over its trademarks, trade dress, logos and slogans. All trademarks shall be registered by the Party owning such trademark in its name as owner in all applicable countries. All trade dress, logos, slogans and designs may be registered by the Party owning such trade dress, logos or slogan, in the discretion of such Party, in its name as owner in all applicable countries.

          10.9.3Ownership of Trademarks. New River will continue to own, throughout the world, any trademarks, trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for a Collaboration Product which New River owns as of the Effective Date (the “New River Marks”). Shire will own, throughout the world, all other trademarks, trade dress, logos and/or slogans, and all registrations therefor, used or intended to be used for a Collaboration Product (the “Shire Marks”). All goodwill attributable to a New River Mark generated by the Commercialization of a Collaboration Product bearing a New River Mark shall inure to the benefit of New River. All goodwill attributable to a Shire Mark generated by the Commercialization of a Collaboration Product bearing a Shire Mark shall inure to the benefit of Shire. If Shire determines to use a New River Mark for the Commercialization of a Collaboration Product in the ROW Territory, New River shall grant to Shire, a non-exclusive, royalty-free license, with the right to grant sublicenses in accordance with Section 8.3, to use such New River Mark in the ROW Territory, solely in conjunction with the Commercialization of the Collaboration Products. Shire shall comply with New River’s then-current guidelines for trademark usage, a copy of which shall be provided to Shire from time to time, in connection with Shire’s use of such New River Mark. New River shall solely bear all costs of prosecution of applications to register and to record licenses (if applicable) for, and maintenance of, each New River Mark for each Collaboration Product. Shire shall solely bear all costs of prosecution

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of applications to register and to record licenses (if applicable) for, and maintenance of, each Shire Mark for each Collaboration Product.

          10.9.4Infringement of Trademarks and Copyrights. Each Party shall take all reasonable and appropriate steps to protect, defend and maintain each trademark and copyright owned by such Party hereunder for use in connection with a Collaboration Product, and all registrations therefor. Each Party shall notify the other Party promptly upon learning of any actual, alleged or threatened infringement of a trademark, trade dress, logo, slogan, copyright, or of any unfair trade practices, trade dress imitation, passing off of counterfeit goods, or like offenses. Upon learning of such offenses, the Party owning such trademark or copyright shall have the obligation to, in consultation with the other Party, institute and control an appropriate action or proceeding to halt the offense, unless the Parties otherwise mutually agree. All Recoveries in connection therewith will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) with respect to a country in the ROW Territory to be shared equally. Such other Party shall have the right to participate fully in all such actions or proceedings. During the Term, in the event that the Party owning such trademark or copyright does not undertake such an infringement action then, in the case that such owning Party is New River, Shire shall be permitted to do so and all Recoveries in connection therewith will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) with respect to a country in the ROW Territory to be shared equally. For the purposes of this Section 10.9.4, the Party that brings suit to enforce a given trademark or copyright shall also have the right to control settlement of such claim; provided, however, that no settlement shall be entered into without the written consent of the other Party, not to be unreasonably withheld, conditioned or delayed.

          10.9.5Costs of Defense. All of the unrecovered costs, expenses and legal fees (including internal costs, expenses and legal fees) incurred by the Parties in bringing, maintaining and prosecuting any action to maintain, protect or defend a trademark (or registration therefor) or copyright (or registration therefor) covering or used or intended to be used in connection with the marketing or sale of a Collaboration Product in the ROW Territory will be [*].

          10.9.6Acknowledgment of Ownership. Each Party acknowledges the sole ownership by the other Party and validity of all trademarks, trade dress, logos and slogans owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product. Each Party agrees that it will not at any time during or after the Term assert or claim any interest in or do anything which may adversely affect the validity or enforceability of any trademark, trade dress, logo or slogan owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product. Neither Party will register, seek to register or cause to be registered any trademarks, trade dress, logos or slogans owned by the other Party and used or intended to be used on or in connection with the marketing or sale of a Collaboration Product or any variation thereof, under any law providing for registration of trademarks, service marks, trade names, fictitious names or similar laws, as an Internet domain name, or in the name of a corporation, partnership, limited liability company or other entity, without the other Party’s prior written consent, and neither Party will register, seek to register or cause to be registered any copyright, nor register or patent, seek to

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register or patent or caused to be registered or patented, of the other Party, without the other Party’s prior written consent.

ARTICLE 11
REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY

     11.1Representations, Warranties and Covenants.

          11.1.1Each of the Parties hereby represents and warrants to the other Party that, as of the Effective Date:

               (a)Such Party has full corporate right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement and that it has the right to grant the licenses and sublicenses granted pursuant to this Agreement.

               (b)This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of the Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a Party or by which it is bound, nor violate any Law of any Governmental Authority having jurisdiction over it.

               (c)Such Party has not granted any right to any Third Party that would conflict with the rights granted to the other Party hereunder.

               (d)Except for Regulatory Approvals, pricing and/or reimbursement approvals, manufacturing approvals and/or similar approvals necessary for the Development, Manufacture or Commercialization of the Compound and Collaboration Products, such Party has obtained all necessary consents, approvals and authorizations of all Government Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery and performance of this Agreement; provided, that, for clarity, it is agreed that a termination by a Party in accordance with Section 12.6 shall not be deemed to constitute evidence of a breach of this Section 11.1.1(d) .

          11.1.2Each Party hereby covenants to the other Party that, during the Term:

               (a)Such Party will not grant any right to any Third Party that would conflict with the rights granted to the other Party hereunder;

               (b)In the course of the Development of the Compound and Collaboration Products, such Party will not use any employee or consultant that is debarred by the FDA (or any foreign equivalent) or, to such Party’s knowledge, is the subject of debarment proceedings by the FDA (or any foreign equivalent).

          11.1.3New River hereby represents and warrants to Shire that, as of the Effective Date:

               (a)There is no action or proceeding pending or, to New River’s knowledge, threatened, with respect to Collaboration Products and/or the Compound, including

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without limitation the conduct of any clinical trials, manufacturing activities or other activities, or that questions the validity of this Agreement or any action taken by New River in connection with the execution of this Agreement. There are no material unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against New River with respect to Collaboration Products and/or the Compound, including without limitation the conduct of any clinical trials, manufacturing activities or other activities.

               (b)IND #67482 and IND #70109 (i) have been filed in the name of New River and are in effect; and (ii) to New River’s knowledge, constitutes all governmental approvals, permits and licenses required by New River in connection with the performance of clinical trials concerning the Collaboration Product or the Compound, as such clinical trials are conducted by New River. Attached hereto as Schedule 11.1.3(b) is a true, correct and complete list of all INDs and Drug Approval Applications filed with a Governmental Authority relating to the Compound or a Collaboration Product.

               (c)Intellectual Property.

                    (i)Schedule 11.1.3(c)(i)(I) sets forth a true and complete list of all Licensed Patents that [*]. Schedule 11.1.3(c)(i)(II) sets forth a true and complete list of all Patents that [*]. Such schedules contain, where relevant, all application numbers and filing dates, registration numbers and dates, jurisdiction, next action date with description for action to be taken, and notice of whether fees of any kind are yet to be paid.

                    (ii)New River has submitted all information related to the Compound, Collaboration Product and/or Licensed Patents to the United States Patent and Trademark Office required to be submitted in accordance with 37 C.F.R. 1.56, 1.97 and 1.98.

                    (iii)The Licensed Patents and Licensed Know-How constitute all intellectual property Controlled by New River that is necessary or useful to Manufacture, Develop, use or Commercialize the Compound and/or Collaboration Product for ADHD, and to the knowledge of New River there is not any other intellectual property necessary for such purposes that is not Controlled by New River.

                    (iv)Neither New River nor any of its Affiliates has received any written notice from any Third Party challenging or questioning the right of New River to use or license any of the Licensed Know-How or Licensed Patents.

                    (v)Each of New River and its Affiliates owns all right, title and interest in and to, or has a license, sublicense or otherwise permission to use and license, all of the Licensed Know-How or Licensed Patents free and clear of all encumbrances and no person other than New River (including any current or former employee or consultant of New River) has any proprietary, commercial or other interest in any of the Licensed Know-How or Licensed Patents. There are no existing agreements, options, commitments, or rights with, of or to any person to acquire or obtain any rights to, any of the Licensed Know-How or Licensed Patents.

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                    (vi)The use or practice of the Licensed Know-How and Licensed Patents as it has been and is now being conducted do not, to the knowledge of New River, infringe or misappropriate the intellectual property rights of a Third Party. Neither New River nor any of its Affiliates has received any written notice from any person, or has knowledge of, any actual or threatened claim or assertion that the use or practice of the Licensed Patents or Licensed Know-How infringes or misappropriates the intellectual property rights of a Third Party.

                    (vii)New River has the right to grant to Shire the licenses set forth in this Agreement under the Licensed Know-How or Licensed Patents, free of any rights or claims of any Third Party and without payment of any royalties, license fees or other amounts to any Third Party.

                    (viii)All Patents within the Licensed Patents are in full force and effect, valid, subsisting and, in the case of issued Patents, enforceable, and inventorship of the Licensed Patents is properly identified on such Licensed Patents. None of the Licensed Patents is currently involved in any interference, reissue, reexamination, or opposition proceeding, and neither New River nor any of its Affiliates has received any written notice from any person, or has knowledge, of such actual or threatened proceeding.

                    (ix)To New River’s knowledge, [*] of any of the Licensed Know-How or Licensed Patents by [*].

                    (x)There are no actions or proceedings (including any inventorship challenges) pending or, to the knowledge of New River, threatened with respect to any of the Licensed Know-How, Licensed Patents, Compound or Collaboration Products nor have any such actions or proceedings been brought or, to the knowledge of New River, threatened during the past six (6) years, in each case which have not been resolved without impairment of New River’s rights in and to any of the Licensed Know-How, Licensed Patents, Compound or Collaboration Products and without the obligation to pay any royalties or other amounts to any Third Party with respect to the use of such technology or the sale of such products.

                    (xi)Neither New River nor any of its Affiliates has entered into any contract (A) granting any Third Party the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any of the Licensed Know-How or Licensed Patents, or (B) expressly agreeing to indemnify any Third Party against any charge of infringement of any of the Licensed Know-How or Licensed Patents.

                    (xii)Neither New River nor any of its Affiliates has entered into any contract granting any Third Party the right to control the prosecution of any of the Patents in the Licensed Patents.

                    (xiii)All current and former employees and consultants of New River and its Affiliates who are or have been substantively involved in the design, review, evaluation or development of the Licensed Know-How or Licensed Patents have executed written contracts or are otherwise obligated to protect the confidential status and value thereof

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and to vest in New River or its Affiliates exclusive ownership of the Licensed Know-How or Licensed Patents.

                    (xiv)New River has made available to or provided Shire with copies of all material information and, as requested in writing by Shire, with copies of all books, records and data, in each case with respect to Collaboration Products and/or the Compound.

                    (xv)All official fees, maintenance fees and annuities for the Licensed Patents have been paid through the Effective Date.

                    (xvi)Schedule 11.1.3(c)(i)(I) and Schedule 11.1.3(c)(i)(II) set forth a true and complete list of all registration, application, maintenance, user, or renewal fees due within one hundred eighty (180) days after the Effective Date in connection with the Licensed Know-How or Licensed Patents. Any necessary registration, application, maintenance, user or renewal fees due on or prior to the Effective Date in connection with the Licensed KnowHow or Licensed Patents have been paid in a timely manner. All applicable government requirements that must be met on or prior to the Effective Date in connection with the Licensed Know-How or Licensed Patents have been met in a timely manner with the relevant Governmental Authority.

               (d)Compliance with Law.

                    (i)New River and its Affiliates and any outsourcing company and contract research organization to which New River or its Affiliates have subcontracted activities in connection with Compound and Collaboration Products (the “Contractors”) have complied with all applicable Laws, permits, governmental licenses, registrations, approvals, concessions, franchises, authorizations, orders, injunctions and decrees, including the Act, in the research, Development, Manufacture and use of the Collaboration Product for ADHD and Compound, and neither New River nor any of its Affiliates or, to the knowledge of New River, its Contractors, has received any written notice from any Governmental Authority claiming that any such activities as conducted by them are not in such compliance.

                    (ii)Since January 1, 2002, no Governmental Authority has served notice on New River or any of its Affiliates that the Licensed Know-How or Licensed Patents were or are in violation of any Law or the subject of any investigation.

                    (iii)Since January 1, 2002, none of New River or any of its Affiliates have received written notice from any Governmental Authority that there are any circumstances currently existing that might reasonably be expected to lead to any loss or refusal to renew any material governmental licenses, permits, registrations, concessions, franchises and authorizations relating to the Collaboration Product for ADHD, Compound or any of the Licensed Know-How or Licensed Patents.

                    (iv)New River and its Affiliates have complied in all material respects with all applicable Laws in connection with the preparation and submission to the FDA of IND #67482 and #70109, and such INDs are in effect and good standing. IND #67482 and #70109 are the only INDs that New River or any of its Affiliates has filed with any Governmental Authority with respect to the Compound or a Collaboration Product. New River

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and its Affiliates have filed with the applicable regulatory authority all required notices, supplemental applications and annual or other reports, including adverse experience reports, with respect to such INDs. No Drug Approval Application has been filed with any Governmental Authority with respect to the Compound or a Collaboration Product.

                    (v)No Governmental Authority has commenced or, to New River’s knowledge, threatened to initiate any action to reject or withdraw IND #67482 or #70109, or commenced or, to New River’s knowledge, threatened to initiate any action to enjoin production of the Compound or Collaboration Product at any facility, nor has New River or any of its Affiliates or, to the knowledge of New River, any of its Contractors, received any notice to such effect since January 1, 2002.

                    (vi)All manufacturing operations conducted by New River and its Affiliates and Contractors since January 1, 2002 relating to the manufacturing of the Collaboration Product for ADHD and/or Compound have been conducted in compliance with all Laws, including without limitation all cGMPs.

                    (vii)All Development activities conducted by New River and its Affiliates and Contractors since January 1, 2002 relating to the Collaboration Product for ADHD and/or Compound have been conducted in compliance with all Laws, including without limitation all cGCPs and cGLPs.

                    (viii)New River has delivered or otherwise made available to Shire copies of all substantive or material (A) reports of FDA Form 483 inspection observations, (B) establishment inspection reports, (C) warning letters, and (D) other documents that assert ongoing lack of compliance in any material respect with any applicable laws (including those of the FDA), in each case to the extent received by New River or any of its Affiliates or, to the knowledge of New River, any of its Contractors from the FDA relating to a Collaboration Product and/or Compound. Neither New River nor any of its Affiliates has received any such reports, letters or other documents from any other Governmental Authority relating to a Collaboration Product and/or Compound.

                    (ix)To New River’s knowledge, no employee or agent of New River or any of its Affiliates or Contractors has made an untrue statement of a material fact to any Governmental Authority with respect to the Collaboration Product for ADHD and/or Compound (whether in any submission to such Governmental Authority or otherwise), or failed to disclose a material fact required to be disclosed to any Governmental Authority with respect to the Collaboration Product and/or Compound.

                    (x)In the course of the Development of the Compound and Collaboration Products, New River has not used any employee or consultant that is debarred by the FDA or, to New River’s knowledge, is the subject of debarment proceedings by the FDA.

                    (xi)Representatives of New River and its Affiliates have disclosed to Shire any facts reasonably believed in good faith to be material regarding: (A) preclinical and clinical study results and protocols for the Collaboration Product for ADHD and/or Compound; (B) any communications to or from any Governmental Authority with respect

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to the Collaboration Product for ADHD and/or Compound, including IND submissions, any Governmental Authority minutes of meetings and telephone conferences; (C) any Governmental Authority requests for data and studies on the Collaboration Product for ADHD and/or Compound; and (D) adverse drug experiences and other IND safety reports with respect to the Collaboration Product for ADHD and/or Compound.

                    (xii)New River and its Affiliates do not have any knowledge of any preliminary or other results from any clinical trials relating to the lack of efficacy of the Compound or Collaboration Product in human beings.

For purposes of the foregoing sections, “New River” and “its Affiliates” shall in all cases include [*]

     11.2Limitation on Representations or Warranties. Notwithstanding anything to the contrary herein, neither Party will be in breach of any representation or warranty made pursuant to this Article 11 to the extent that the Party alleged to have so breached can demonstrate that the Party alleging such breach had, on or prior to the Effective Date, actual knowledge of such breach of such representation or warranty.

     11.3Performance by Affiliates. The Parties recognize that each may perform some or all of its obligations under this Agreement through Affiliates; provided, however, that each Party shall remain responsible for and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against an Affiliate or subcontractor, for any obligation or performance hereunder prior to proceeding directly against such Party. Wherever in this Agreement the Parties delegate responsibility to Affiliates or local operating entities, the Parties agree that such entities may not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way.

     11.4Disclaimer of Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION 11.1 OF THIS AGREEMENT, NEW RIVER AND SHIRE MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND NEW RIVER AND SHIRE EACH SPECIFICALLY DISCLAIMS ANY OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

     11.5Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR LOST PROFITS OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION AND ARISING IN ANY WAY OUT OF THIS AGREEMENT. THE FOREGOING LIMITATIONS

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WILL NOT LIMIT EITHER PARTY’S OBLIGATIONS TO THE OTHER PARTY UNDER ARTICLE 9 AND ARTICLE 14.

     11.6Essential Basis. The Parties acknowledge and agree that the disclaimers, exclusions and limitations of liability set forth in this Article 11 form an essential basis of this Agreement, and that, absent any of such disclaimers, exclusions or limitations of liability, the terms of this Agreement, including, without limitation, the economic terms, would be substantially different.

ARTICLE 12
TERM AND TERMINATION

     12.1Term. This Agreement shall commence as of the Effective Date and, unless sooner terminated as provided herein, shall expire on a country-by-country basis upon expiration of all royalty obligations in such country for all Collaboration Products, pursuant to Section 6.3.4 (the “Term”).

     12.2Breaches (General).

          12.2.1If either Party (the “Breaching Party”) shall have committed a breach of this Agreement, the other Party (the “Notifying Party”) shall provide written notice of such breach to the Breaching Party. For all allegations of breach other than an allegation of Material Breach (as defined below), the Parties hereby agree that they shall seek to resolve the matter during the notice and cure period provided in Section 12.2.2 and may thereafter commence litigation pursuant to Article 15.

          12.2.2Upon receipt of a notice of breach other than a Material Breach, the alleged Breaching Party shall have [*] within which to cure such breach following receipt of such notice [*] in the event of non-payment unless such payment obligation is being disputed in good faith). If the matter is not resolved to the satisfaction of the Notifying Party during such cure period, then either Party may invoke the provisions of Article 15 with respect to claims for damages and other requests for equitable relief, but neither Party shall have any right to terminate this Agreement for such breach.

          12.2.3The Parties may resort to the dispute resolution mechanisms of Article 15, and may seek all remedies in law or equity other than termination of this Agreement, without invoking the mechanisms of Section 12.3.

     12.3Allegations of Material Breach.

          12.3.1The Parties intend that this Agreement shall survive breach, and shall not be terminable in the event of breach, unless the breach is [*] under this Agreement [*] to such an extent that [*] for the [*] taken as a whole under [*], considered in the aggregate as a single transaction and as if set forth in a single agreement (“Material Breach”). The Parties acknowledge and agree that, so long as such breach satisfies the standard for Material Breach described in this Section 12.3.1, a Material Breach may result from a breach of this Agreement only (irrespective of whether any breach, material or otherwise, has occurred with respect to the US Agreement), the US Agreement only (irrespective of whether any breach, material or

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otherwise, has occurred with respect to this Agreement), or both agreements. In the event there is a dispute as to whether a Material Breach has occurred, this Agreement and the US Agreement shall survive pending a determination pursuant to Article 15 that a Material Breach has occurred. This Section 12.3 shall apply to any allegation of Material Breach, with consequences as set forth herein.

          12.3.2If a Party believes that a Material Breach has occurred, it shall give written notice to the Breaching Party of the nature of the breach and the reason the Notifying Party believes it is a Material Breach. The alleged Breaching Party shall then have a period of [*] [*] following receipt of such notice [*] in the event of non-payment unless such payment obligation is being disputed in good faith) in which to cure the breach; provided, however, that if the Material Breach is other than the payment of money and is capable of being cured but cannot be reasonably cured in such [*] period, then the right to terminate this Agreement shall not arise if the allegedly Breaching Party has (a) during such period of time submitted a plan that, if successfully carried out, would be effective in curing such Material Breach, and has commenced its execution of such plan, and (b) diligently pursues such plan thereafter for a period of up to an additional [*]. Any such notice of alleged Material Breach by the Notifying Party shall include a reasonably detailed description of all relevant facts and circumstances demonstrating, supporting and/or relating to each such alleged Material Breach by the Breaching Party.

          12.3.3If the alleged Material Breach is not cured within the cure period specified in Section 12.3.2, the Notifying Party may give notice of termination (“Notice of Termination For Material Breach”). If the Breaching Party agrees that a Material Breach has occurred, then the Parties shall proceed to terminate this Agreement and the US Agreement in accordance with Section 12.3.5 and Article 13 of this Agreement and Section 13.3.5 and Article 14 of the US Agreement. If the Breaching Party does not agree that a Material Breach has occurred, then this Agreement and the US Agreement shall survive, and the Parties shall continue to perform their obligations hereunder, until the issue of whether there has been a Material Breach by the Breaching Party is resolved in accordance with Article 15.

          12.3.4If the Notifying Party gives Notice of Termination For Material Breach, and it is later determined by a court pursuant to Article 15 that in fact there has not been a Material Breach by the Breaching Party, then this Agreement and the US Agreement shall continue in full force and effect.

          12.3.5If the Notifying Party gives Notice of Termination For Material Breach and this Agreement and the US Agreement terminate, either because such notice is accepted by the Breaching Party or it is determined by a court pursuant to Article 15 that there has been a Material Breach by the Breaching Party, then the Notifying Party shall, within [*] after such determination, deliver written notice (the “Purchase Notice”) to the Breaching Party of the purchase by the Notifying Party of the Purchase Interest (as such term is defined below).

               (a)The price (the “Purchase Price”) to be paid to purchase the entire interests, rights and obligations of the Breaching Party and/or its Affiliates under this Agreement and the US Agreement (the “Purchase Interest”) shall be [*] [*], it being understood and agreed that [*] shall be applied [*] and that all intellectual property rights and other assets licensed or

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otherwise made available by the Parties and their respective Affiliates under this Agreement and the US Agreement shall be [*].

               (b)Each Party shall, within [*] after the delivery of the Purchase Notice, retain an internationally recognized investment banking firm to determine the Purchase Price. Each such investment banking firm shall set forth such determination in a written report and, on a mutually agreeable date no later than [*] after the delivery of the Purchase Notice, submit such report to the other Party.

               (c)The Purchase Price shall be the amount equal to [*] However, if [*], a third internationally recognized investment banking firm (which is independent of both Parties) shall determine such fair market value by [*]. Such third investment banking firm shall be selected by the first two investment banking firms; provided, however, that, if the two investment banking firms are unable to select a third investment banking firm within twenty (20) days following determination that [*], then each of the two initial investment banking firms shall within twenty (20) days thereafter submit the names of three internationally recognized investment banking firms (which are independent of both Parties) willing to act as the third investment banking firm hereunder, one of which firms shall be selected by lot by the Parties. The cost of such third investment banking firm shall be borne [*].

               (d)The purchase and sale of a Purchase Interest pursuant to this Section 12.3 shall be transferred free and clear of all liens and other encumbrances and shall be consummated at closing at the principal offices of the Notifying Party, on a Business Day within forty-five (45) days following the final determination of the Purchase Price, and upon at least ten (10) Business Days’ prior notice by the Notifying Party; provided that such period shall be extended for such period of time as shall be necessary in order to obtain requisite governmental or regulatory approvals. At such closing, the Notifying Party shall pay the Breaching Party the Purchase Price by wire transfer of immediately available funds. The Parties shall execute and deliver appropriate documentation, in form and substance that is reasonably acceptable, to effect the transfer of the Purchased Interest and each Party further agrees to reasonably cooperate to effect the orderly transition of any activities then being conducted by the Breaching Party and its Affiliates pursuant to this Agreement and the US Agreement.

               (e)The rights of the Parties set forth in this Section 12.3 are not exclusive and are in addition to any other rights or remedies available to such Party under this Agreement or the US Agreement, at law or in equity.

     12.4Other Termination by Shire. At any time after the date of first Regulatory Approval of a Collaboration Product in the US Territory, Shire may terminate this Agreement effective upon [*] advance written notice to New River. Termination by Shire pursuant to this Section 12.4 may be on the basis of the countries of the European Union and/or the ROW Territory (other than the countries of the European Union). In the event of termination under this Section 12.4 no payment shall be due on account of such termination. In addition, this Agreement shall be automatically terminated in the event that Shire terminates the US Agreement pursuant to Section 13.4.2 of the US Agreement.

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     12.5Other Termination By New River. New River may terminate this Agreement on the basis of (i) the countries of the European Union and/or (ii) the ROW Territory (other than the countries of the European Union), in each case by [*] advance written notice to Shire [*], other than the following products: (i) any Collaboration Product, (ii) any product marketed by or on behalf of Shire as of the Effective Date, as set forth on Exhibit E, and any additional dosage strengths or line extensions thereof, and (iii) those products identified by Shire’s internal nomenclature as [*], each as described on Exhibit E, it being understood that each such product [*] [*] [*]. For avoidance of doubt, New River shall have no right to terminate this Agreement pursuant to this Section 12.5 if Shire files for Regulatory Approval for, or Commercializes, that product identified by Shire’s internal nomenclature as [*] or any [*] as such products do not contain [*] formulated for [*] [*] for the treatment or prevention of ADHD and are therefore outside the scope of this Section 12.5. In the event of termination under this Section 12.5, no payment shall be due by New River to Shire on account of such termination.

     12.6Termination for Government Action.

          12.6.1During the period from the Effective Date and expiring on [*] [*], either Party may terminate this Agreement upon written notice to the other Party at any time, if during such time there is a decree, judgment, injunction, order, or action that restricts, prevents or prohibits the transactions contemplated by this Agreement under applicable Law in the European Union; provided that no such termination shall occur for a period of [*] following the entry of such decree, judgment, injunction, order or action (which period shall be reduced to [*] if [*] in the US Territory for a Collaboration Product for an ADHD indication occurs after [*]), during which period of time the Parties shall cooperate and use reasonable commercial efforts to respond to any government requests for information, and to contest and resist any such decree, judgment, injunction, order or action and to have vacated, lifted, reversed, stayed or overturned any such decree, judgment, injunction, order or action. In addition, this Agreement may be terminated by either Party in the event that the US Agreement terminates pursuant to Section 13.6 thereof, irrespective of whether there is any decree, judgment, injunction, order, or action that restricts, prevents or prohibits the transactions contemplated by this Agreement.

          12.6.2 If such termination is effective prior to the FDA acceptance of the first, and only the first, Drug Approval Application for Collaboration Product for ADHD in the Field in the US Territory, [*] [*], New River shall reimburse Shire [*] of the amount paid by Shire pursuant to Section 6.1. Such payment shall be made within one hundred twenty (120) days following termination; provided, that interest shall accrue beginning on the thirty-first day after termination at the rate provided for in Section 7.1.

          12.6.3 If such termination is effective after the FDA acceptance of the first, and only the first, Drug Approval Application for Collaboration Product for ADHD in the Field in the US Territory, [*] New River shall reimburse Shire (a) [*] of the amount paid by Shire pursuant to Section 6.1, and (b) [*] [*] of all other amounts paid by Shire pursuant to Section 6.2. Such payment shall be made within one hundred twenty (120) days following termination; provided, that interest shall accrue beginning on the thirty-first day after termination at the rate provided for in Section 7.1.

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ARTICLE 13
EFFECTS OF TERMINATION

     13.1Post-Termination Activities by Shire. Without limiting any other legal or equitable remedies that New River may have, if this Agreement is terminated in accordance with Sections 8.8, 12.4, 12.5 or 12.6, or if this Agreement is terminated in accordance with Section 12.3 and Shire is the Breaching Party, then the following provisions shall apply:

          13.1.1Assignments. Shire will promptly (and in each case within sixty (60) days of receipt of New River’s request) and at no cost to New River (other than the Purchase Price, in the event of a termination pursuant to Section 12.3):

               (a)upon New River’s request, assign to New River all of Shire’s right, title and interest in and to any agreements between Shire and Third Parties that are freely assignable by Shire and that relate solely to the Development or Manufacture of any Compound or Collaboration Product in any territory for which such termination is effective;

               (b)assign to New River all of Shire’s right, title and interest in and to any Shire Marks (including any goodwill associated therewith), any registrations and design patents for any of the foregoing and any Internet domain name registrations for such trademarks and slogans, all to the extent solely related to a Collaboration Product in any territory for which such termination is effective;

               (c)assign to New River, to the extent freely assignable by Shire, the management and continued performance of any clinical trials for the Collaboration Products ongoing as of the effective date of such termination in any territory for which such termination is effective;

               (d)transfer to New River all of Shire’s right, title and interest in and to any and all regulatory filings and Regulatory Approvals Controlled by Shire for the Collaboration Products in any territory for which such termination is effective, and grant New River the right to reference any regulatory filings and Regulatory Approvals Controlled by Shire for the Collaboration Products elsewhere in the world for the purpose of Developing and Commercializing Collaboration Products in the territory for which such termination is effective;

               (e)to the extent that any agreement or other asset described in this Section 13.1.1 is not assignable by Shire or does not relate solely to Compound or a Collaboration Product, then such agreement or other asset will not be assigned, and upon the request of New River, Shire will take such steps as may be necessary to allow New River to obtain and to enjoy the benefits of such agreement or other asset in the form of a license or other right to the extent Shire has the right and ability to do so; and

               (f)provide copies of any other books, records, documents and instruments to the extent related to Compound or Collaboration Product.

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          13.1.2Manufacturing Activities. Shire will:

               (a)upon New River’s request, if Shire is then Manufacturing a Collaboration Product, supply New River with clinical and commercial quantities of such Collaboration Product for the shorter of (i) the period until New River or its designee has established and validated a manufacturing process for such Collaboration Product and is approved to Manufacture clinical trial and commercial supplies of such Collaboration Product or (ii) eighteen (18) months from the effective date of such termination; provided, however, that New River will [*] (as determined pursuant to Exhibit A hereof) with respect to such Collaboration Product; and

               (b)if Shire is then Manufacturing a Collaboration Product, transfer the completed manufacturing process (together with any unique mold or tooling used solely in connection therewith) for such Collaboration Product to New River or its designee upon New River’s request and at [*] cost and expense, and shall cooperate with New River to effect the transition of such Manufacturing responsibilities.

          13.1.3License Grant. Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, an exclusive, royalty-free right and license, with the right to sublicense and authorize the grant of further sublicenses, under any Shire Collaboration Patents and Shire’s rights and interest in the Joint Collaboration Patents to make, have made, use, sell, offer for sale, and import Compound or Collaboration Products affected by such termination in the Field and in the territory for which such termination is effective; provided, however, that New River will be responsible for any payments associated with the grant of any license pursuant to the preceding sentence (including, without limitation, any royalty or other payment obligations to an upstream licensor of any such Patents). In addition, if any Shire Know-How or technology claimed in a Shire Background Patent is then used in connection with the Manufacture, Development or Commercialization of Compound or a Collaboration Product in the applicable territory, Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, a non-exclusive, royalty-free right and license, with the right to grant sublicenses, under such Shire Background Patents and Shire Know-How, to make, have made, use, sell, offer for sale, and import Collaboration Products in the Field and in the territory for which such termination is effective. Finally, Shire agrees to grant and hereby grants to New River, effective upon such termination of this Agreement, a non-exclusive, royalty-free right and license, with the right to grant sublicenses, under any copyright or Shire Confidential Information embodied in or relating to any marketing plan, package inserts, or other Promotional Materials relating solely to Collaboration Products in the applicable territory.

          13.1.4Disclosure and Delivery. Shire will transfer to New River any Shire Collaboration Know-How and Shire Background Know-How, to the extent then used in connection with the Manufacture, Commercialization or Development of the Collaboration Products; such transfer shall be effected by the delivery of documents, to the extent such KnowHow is embodied in documents, and to the extent that such Know-How is not fully embodied in documents, Shire shall make its employees and agents who have knowledge of such Know-How in addition to that embodied in documents available to New River for interviews, demonstrations

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and training to effect such transfer in manner sufficient to enable New River to practice such Know-How as theretofore practiced by Shire.

          13.1.5Sublicensees. Each of Shire’s sublicensees with respect to any affected Collaboration Products in any affected country at such time will continue to have the rights and license set forth in their sublicense agreements, subject to the continued performance of the obligations thereunder; provided, however, that such sublicensee agrees in writing that New River is entitled to enforce all relevant terms and conditions of such sublicense agreement directly against such sublicensee; and provided, further, that such sublicensee is not then in breach of its sublicense agreement.

          13.1.6Disposition of Inventory. New River shall have the option, exercisable within thirty (30) days following the effective date of such termination, to purchase any inventory of Collaboration Products affected by such termination at Shire’s Cost of Goods therefor. New River may exercise such option by written notice to Shire during such thirty (30)-day period. Upon such exercise, the Parties will establish mutually agreeable payment and delivery terms for the sale of such inventory. If New River does not exercise such option during such thirty (30)-day period, or if New River provides Shire with written notice of its intention not to exercise such option, then Shire and its Affiliates and sublicensees will be entitled, during the period ending on the last day of the sixth (6th) full month following the effective date of such termination, to sell any inventory of Collaboration Products affected by such termination that remain on hand as of the effective date of the termination, so long as Shire pays to New River the royalties applicable to said subsequent sales, with respect to sales in the ROW Territory, in accordance with the terms and conditions set forth in this Agreement.

          13.2Post-Termination Activities by New River. Without limiting any other legal or equitable remedies that Shire may have, if this Agreement is terminated in accordance with Section 12.3 and New River is the Breaching Party, then the following provisions shall apply:

          13.2.1Assignments. New River will promptly (and in each case within sixty (60) days of receipt of Shire’s request) and at no cost to Shire (other than the Purchase Price, in the event of a termination pursuant to Section 12.3):

               (a)upon Shire’s request, assign to Shire all of New River’s right, title and interest in and to any agreements between New River and Third Parties that are freely assignable by New River and that relate solely to the Development or Manufacture of any Compound or Collaboration Products;

               (b)assign to Shire all of New River’s right, title and interest in and to any New River Marks (including any goodwill therewith), including any registrations and design patents for the foregoing and any Internet domain name registrations for such trademarks and slogans, all to the extent solely related to a Collaboration Product;

               (c)assign to Shire, to the extent freely assignable by New River, the management and continued performance of any clinical trials for Collaboration Products ongoing as of the effective date of such termination;

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               (d)transfer to Shire all of New River’s right, title and interest in and to any and all regulatory filings and Regulatory Approvals Controlled by New River for Collaboration Products;

               (e)to the extent that any agreement or other asset described in this Section 13.2.1 is not assignable by New River or does not relate solely to Compound or a Collaboration Product, then such agreement or other asset will not be assigned, and upon the request of Shire, New River will take such steps as may be necessary to allow Shire to obtain and to enjoy the benefits of such agreement or other asset in the form of a license or other right to the extent New River has the right and ability to do so; and

               (f)provide copies of any other books, records, documents and instruments to the extent related to Compound or Collaboration Product.

          13.2.2Manufacturing Activities. New River will:

               (a)upon Shire’s request, if New River is then Manufacturing Compound or Collaboration Product, supply Shire with clinical and commercial quantities of such Compound or Collaboration Product for the shorter of (i) the period until Shire or its designee has established and validated a manufacturing process for such Compound or Collaboration Product and is approved to Manufacture clinical trial and commercial supplies of such Compound or Collaboration Product or (ii) eighteen (18) months from the effective date of such termination; provided, however, that Shire [*] [*] (as determined pursuant to Exhibit A hereof) for such Compound or Collaboration Product; and

               (b)if New River is then Manufacturing Compound or Collaboration Product, transfer the completed manufacturing process (together with any unique mold or tooling used solely in connection therewith) for such Compound or Collaboration Product to Shire or its designee upon Shire’s request and at [*] cost and expense, and cooperate with Shire to effect the transition of such Manufacturing responsibilities.

          13.2.3License Grant. Each license granted by New River to Shire pursuant to Section 8.1 shall, effective upon such termination of this Agreement, become an exclusive, perpetual, non-terminable, royalty-free right and license, with the right to sublicense and authorize the grant of further sublicenses, and shall include the right to Manufacture Compound.

          13.2.4Disclosure and Delivery. New River shall transfer to Shire any Licensed Know-How, to the extent then used in connection with the Manufacture, Commercialization or Development of the Collaboration Products; such transfer shall be effected by the delivery of documents, to the extent such Know-How is embodied in documents, and to the extent that such Know-How is not fully embodied in documents, New River shall make its employees and agents who have knowledge of such Know-How in addition to that embodied in documents available to Shire for interviews, demonstrations and training to effect such transfer in manner sufficient to enable Shire to practice such Know-How as theretofore practiced by New River.

          13.2.5Sublicensees. Each of New River’s sublicensees with respect to any affected Collaboration Products at such time will continue to have the rights and license set forth in their sublicense agreements, subject to the continued performance of the obligations

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thereunder; provided, however, that such sublicensee agrees in writing that Shire is entitled to enforce all relevant terms and conditions of such sublicense agreement directly against such sublicensee; and provided, further, that such sublicensee is not then in breach of its sublicense agreement.

          13.2.6Disposition of Inventory. Shire shall have the option, exercisable within thirty (30) days following the effective date of such termination, to purchase any inventory of Compound or Collaboration Products at New River’s Cost of Goods therefor. Shire may exercise such option by written notice to New River during such thirty (30) day period. Upon such exercise, the Parties will establish mutually agreeable payment and delivery terms for the sale of such inventory.

     13.3Accrued Rights. Termination of this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to the effective date of such termination. Such termination will not relieve a Party from obligations that are expressly indicated to survive the termination of this Agreement.

     13.4Confidential Information. Any Confidential Information assigned pursuant to this Article 13 by the non-terminating Party shall thereafter be considered Confidential Information of the terminating Party and may be used by the terminating Party without regard to the restrictions otherwise imposed by Article 9.

     13.5Survival. The following Articles and Sections, together with any definitions used or exhibits referenced therein, will survive any termination or expiration of this Agreement: Sections 4.8.2, 4.8.3, 4.8.4, 7.6, 10.1, 10.9.3, 10.9.6, 11.4, 11.5, 11.6, 12.3.5, 15.2, and 15.4, and Articles 9, 13, 14 (as to activities arising prior to the termination), and 16.

     13.6Liability Following Termination. In the event that either Party has rights to a Collaboration Product following termination of this Agreement, such Party shall be solely responsible for all liabilities associated with such Collaboration Product arising after the effectiveness of such termination.

ARTICLE 14
INDEMNIFICATION; INSURANCE

     14.1Indemnification.

          14.1.1Indemnification by Shire. Shire hereby agrees to save, defend and hold New River, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a Third Party (each a “Third Party Claim”) resulting directly from [*] by [*] of any [*] pursuant to this Agreement [*] the [*] by [*] or its [*] or their [*] in [*] [*] under this Agreement [*] of Collaboration Products [*] except for [*] [*] as [*] under [*], or [*] in connection with [*] hereunder; in each case except to the extent that such Losses result from the negligence or willful misconduct of New River.

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          14.1.2Indemnification by New River. New River hereby agrees to save, defend and hold Shire, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting directly from [*] by [*] of any [*], [*] the [*] or [*] [*] by [*] or its [*] or their [*], [*] in [*] under this Agreement, [*], [*] or [*] of [*] [*] [*] or [*] [*] hereunder; in each case except to the extent that such Losses result from the negligence or willful misconduct of Shire.

          14.1.3The rights of indemnification under this Section 14.1 shall be subject to the provisions of Sections 14.2 through 14.8.

     14.2Notice of Claim. All indemnification claims in respect of any indemnitee seeking indemnity under Section 14.1 (collectively, the “Indemnitees” and each an “Indemnitee”) will be made solely by the corresponding Party (the “Indemnified Party”). The Indemnified Party will give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which such Indemnified Party intends to base a request for indemnification under Section 14.1, but in no event will the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such Third Party Claim. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party will furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party materially prejudices the defense of such Third Party Claim.

     14.3Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification as provided for in Sections 14.1.1 and 14.1.2 by giving written notice to the Indemnified Party within [*] after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim.

     14.4Right to Participate in Defense. Without limiting Section 14.3, any Indemnitee will be entitled to participate in, but not control, the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment will be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 14.3 (in which case the Indemnified Party will control the defense).

     14.5Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnitee’s becoming subject to injunctive or other relief or otherwise adversely affect the business of the

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Indemnitee in any manner, and as to which the Indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, will deem appropriate (provided, however that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and will transfer to the Indemnified Party all amounts which said Indemnified Party will be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 14.3, the Indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent will be at the Indemnified Party’s reasonable discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with Section 14.3 will not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee will admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 14.3.

     14.6Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will, and will cause each other Indemnitee to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation will include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.

     14.7Expenses of the Indemnified Party. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim will be reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

     14.8Treatment of Certain Losses. New River shall be solely responsible for all Losses from Third Party Claims resulting directly from either (a) the use or administration of the Compound by New River prior to the Effective Date or (b) the conduct of clinical testing of the Compound by New River (including such clinical tests that commenced prior to and continuing after the Effective Date).

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     14.9Insurance. Each Party will obtain and keep in force, through self insurance or otherwise, in a form reasonably acceptable to the other Party hereto, insurance in scope and amount as required by law applicable to a Party’s activities hereunder and such additional amounts as may be reasonably necessary to cover such Party’s indemnity obligations under this Agreement with scope and coverage as is normal and customary in the biotechnology/pharmaceutical industry generally for parties similarly situated. It is understood that such insurance will not be construed to limit a Party’s liability with respect to its indemnification obligations under this Article 14. Each Party will, except to the extent self insured, provide to the other Party upon request a certificate evidencing the insurance such Party is required to obtain and keep in force under this Article 14. Such certificate will provide that such insurance will not expire or be cancelled or modified without at least thirty (30) days’ prior notice to the other Party.

     14.10Guaranty. In consideration of the rights granted to Shire under this Agreement, and to induce New River to enter into this Agreement, Shire Pharmaceuticals Group PLC hereby unconditionally guarantees in favor of New River the full payment and performance by Shire of all obligations of Shire under this Agreement, in accordance with the terms and conditions of this Agreement, including any applicable notice or cure periods. This guaranty shall be enforceable after the failure by Shire to perform any obligation it may have under this Agreement in accordance with its terms, and shall be effective regardless of the solvency or insolvency of Shire at any time, the extension or modification of the obligations of this Agreement by operation of law, or the subsequent reorganization, merger, consolidation or other restructuring of Shire. Shire Pharmaceuticals Group PLC hereby expressly waives any requirement that New River exhaust any right, power or remedy under Article 15, or proceed against any other Shire entity under Article 15, for any obligation or performance hereunder prior to proceeding directly against Shire Pharmaceuticals Group PLC under this Section 14.10.

ARTICLE 15
DISPUTE RESOLUTION

     15.1Disputes. For all matters other than those delegated to the JDC or JSC under this Agreement, the Parties hereby agree that the dispute shall be referred to a senior executive of New River and a senior executive of Shire (the “Representatives”). If any such matter has not been resolved within [*] of such referral to the Representatives either Party may invoke the provisions of Section 15.2 for such dispute. No dispute resolution procedure set forth in this Agreement shall be construed as an agreement to arbitrate under any federal or state arbitration law, including but not limited to the Federal Arbitration Act, and shall not deprive a court of competent jurisdiction from resolving any dispute arising under, or related to, this Agreement. In the event of any dispute between the Parties arising in connection with Article 10 of this Agreement, the Parties agree that the dispute resolution described under this Article 15 will be conducted with sufficient dispatch to prevent loss of patent rights in the disputed subject matter.

     15.2Litigation. Any dispute that is not resolved as provided in the preceding Section 16.1, whether before or after termination of this Agreement, may be submitted by either Party only to any court of competent jurisdiction in the United States.

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     15.3Injunctive Relief. Notwithstanding anything to the contrary in this Agreement, either Party will have the right to seek temporary injunctive relief in any court of competent jurisdiction as may be available to such Party under the laws and rules applicable in such jurisdiction with respect to any matters arising out of the other Party’s performance of its obligations under this Agreement.

     15.4Governing Law. Resolution of all disputes arising out of or related to this Agreement or the performance, enforcement, breach or termination of this Agreement and any remedies relating thereto, shall be governed by and construed under the substantive laws of the State of New York, without regard to conflicts of law rules that would provide for application of the law of a jurisdiction outside New York.

ARTICLE 16
MISCELLANEOUS

     16.1Entire Agreement; Amendment. This Agreement, together with the US Agreement, including the exhibits attached hereto and thereto (each of which is hereby and thereby incorporated herein and therein by reference), sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements (including the January Agreement) and understandings between the Parties, except for the Existing NDA, which will continue to govern the obligations of the Parties with respect to information disclosed thereunder with respect to periods prior to the Effective Date, and the Material Transfer Agreement between Shire Pharmaceuticals Inc. and New River dated January 7, 2005. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. For the avoidance of doubt, the Parties agree that all covenants, promises, agreements, warranties, representations, conditions, and understandings set forth herein are made and deemed effective as of the Effective Date, notwithstanding the execution of this Agreement and the US Agreement, and that the execution of this Agreement and the US Agreement shall not constitute a waiver of any right or claim of either Party as of the Effective Date.

     16.2Force Majeure. Each Party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure shall include conditions beyond the control of the Parties, including without limitation, an act of God, voluntary or involuntary compliance with any regulation, law or order of any government, war, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe; provided, however, the payment of invoices due and owing hereunder shall not be delayed by the payer because of a force majeure affecting the payer, unless such force majeure specifically precludes the payment process.

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     16.3Notices. All notices or other communications that are required or permitted under this Agreement will be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery or overnight courier as provided in this Agreement), or sent by internationally-recognized overnight courier to the addresses below. Any such communication will be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile on a Business Day (so long as promptly confirmed by personal delivery or overnight courier as provided in this Agreement), and (b) on the second Business Day after dispatch, if sent by internationally-recognized overnight courier. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

For New River:	New River Pharmaceuticals Inc.
	The Governor Tyler
	1881 Grove Avenue
	Radford, VA 24141
	Phone: (540) 633-7978
	Fax: (540) 633-7939
	Attention: President
with a copy to:	Cooley Godward LLP
	5 Palo Alto Square
	3000 El Camino Real
	Palo Alto, CA 94306-2155
	Phone: (650) 843-5000
	Fax: (650) 849-7400
	Attention: Robert L. Jones
For Shire:	Shire Pharmaceuticals Group plc
	Hampshire International Business Park
	Chineham, Basingstoke
	Hampshire, RG24 8EP
	ENGLAND
	Fax: 011 44 125 689 4710
	Attention: General Counsel
	Shire Pharmaceuticals
	725 Chesterbrook Boulevard
	Wayne, Pennsylvania 19087-5637
	Fax: (484) 595-8163
	Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP
	502 Carnegie Center
	Princeton, NJ 08540
	Fax: (609) 919-6701
	Attention: Randall B. Sunberg

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     16.4Independent Contractors. In making and performing this Agreement, Shire and New River shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied for any purpose to create an agency, partnership, limited partnership, joint venture or employer and employee relationship between Shire and New River and this Agreement shall not be construed to suggest otherwise. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. Except as otherwise provided in this Agreement, each Party shall be solely responsible for its own costs and expenses associated with this Agreement.

     16.5Non-Solicitation. From and after the Effective Date until [*] the termination or expiration of this Agreement, neither Party shall, and shall cause each of its Affiliates not to, directly or indirectly, without the other Party’s prior written consent, solicit the employment of any employee (or former employee bound by a non-competition obligation) of the other Party or its Affiliates with whom it has come in contact in conducting activities under this Agreement; provided, however, that the foregoing provisions shall not apply to (a) a general advertisement or solicitation program that is not specifically targeted at such persons or (b) the solicitation of any employee after such time as such employee’s employment has been terminated by the other Party or its Affiliate.

     16.6Maintenance of Records. Each Party shall keep and maintain all records required by Law with respect to Products and shall make copies of such records available to the other Party upon reasonable request.

     16.7United States Dollars. References in this Agreement to “Dollars” or “$” shall mean the legal tender of the United States of America.

     16.8No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

     16.9Assignment. Neither Party will sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of Law or otherwise, this Agreement or any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent may be granted, withheld or conditioned at such other Party’s sole and absolute discretion); provided, however, that either Party may assign or transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other Party (a) to any Affiliate of such Party, or (b) to any Third Party with which it merges or consolidates, or to which it transfers all or substantially all of its assets. The assigning Party (unless it is not the surviving entity) will remain jointly and severally liable with, and will guarantee the performance of, the relevant Affiliate or Third Party assignee under this Agreement, and the relevant Affiliate assignee, Third Party assignee or surviving entity will assume in writing all of the assigning Party’s obligations under this Agreement. Any purported assignment or transfer in violation of this Section 16.9 will be void ab initio and of no force or effect.

     16.10Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same

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instrument. Signatures provided by facsimile transmission shall be deemed to be original signatures.

     16.11Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

     16.12Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

     16.13Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.

     16.14Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

     16.15No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

[Signature Page Follows.]

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IN WITNESS WHEREOF, the Parties have executed this ROW Territory License Agreement in duplicate originals by their proper officers as of the date first written above.

	NEW RIVER PHARMACEUTICALS INC.		SHIRE PHARMACEUTICALS            IRELAND LIMITED
By:	/s/ Randal J. Kirk	By:	/s/ Matthew Emmens
	Randal J. Kirk		Name:   Matthew Emmens
	Chief Executive Officer
			Title:     CEO
			SHIRE PHARMACEUTICALS GROUP PLC
		By:	/s/ Matthew Emmens
			Name:   Matthew Emmens
			Title:     CEO

EXHIBIT A

DETERMINATION OF CERTAIN ACCOUNTING TERMS

Upon the request of either Party from time to time, each Party will reasonably consider suggestions from the other Party to review and clarify and possibly expand any of the definitions in this Exhibit A or any of the financial terms defined in Article 1, including financial terms whose definition is referred to in the table at the end of Article 1; provided that no changes shall be made without the written consent of both Parties.

1. COST OF GOODS SOLD

     The provisions of this section shall govern the determination of the cost of a unit of Compound or Collaboration Product. The accumulated costs of such unit as determined hereunder shall be referred to as “Cost of Goods.” When such unit is sold or transferred to Shire, in the case of New River, or to a Third Party, in the case of Shire, the Cost of Goods of such unit shall become the unit’s Cost of Goods Sold, subject to the selling Party’s inventory flow methods adopted.

1.1.	New River’s Cost of Goods. If the Manufacture of Compound and/or Collaboration Product is performed, in any part, by one or more Third Party Manufacturer(s) on behalf of New River, New River’s Cost of Goods shall equal [*]
1.2.	Shire’s Cost of Goods. Relating to Collaboration Product transferred to it from New River, Shire’s Cost of Goods shall equal [*]
1.3.	Compound and/or Collaboration Product Manufactured by a Party. If the Manufacture of Compound and/or Collaboration Product is performed directly by a Party, the Party conducting such activities may propose to the other Party a methodology to determine the Cost of Goods pursuant to a cost accounting system based on standard costs, and the Parties shall negotiate in good faith to agree upon such methodology. The Parties agree and acknowledge that, if New River undertakes to Manufacture Compound and/or Collaboration Product directly, [*] by the Parties in determining New River’s Cost of Goods. Similarly, if Shire undertakes to Manufacture Collaboration Product directly (pursuant to Shire’s rights under the Agreement), [*] by the Parties in determining Shire’s Cost of Goods.
1.4.	Cost Adjustments. If any adjustment to New River’s Cost of Goods of a particular quantity of Compound and/or Collaboration Product arises by way of any adjustment to New River’s actual costs incurred and payable to a Third Party Manufacturer subsequent to the transfer of such quantity to Shire, New River shall promptly notify Shire of such adjustment and the

Parties shall reflect such adjustment for all applicable purposes under this Agreement.

2.ALLOCATION OF COSTS.

     Except as it relates to appropriately allocating an item of expense or cost to more than one category of expense or cost under this Agreement, no item of expense or cost shall be treated as being a part of more than one category of expense or cost under this Agreement.

EXHIBIT B

ADDITIONAL SUPPLY TERMS

The following sets forth an outline of the principal terms of a supply agreement (the “Supply Agreement”) to be negotiated pursuant to Section 5.4 of the ROW Territory License Agreement. In each case, the terms hereof and of the Supply Agreement will be subject to the Parties’ rights and obligations under the ROW Territory License Agreement.

1.  Delivery. Compound or Collaboration Product supplied by New River to Shire shall be delivered to a facility designated by Shire and otherwise in accordance with the applicable Third Party Manufacturer Agreement.

2.  Shortage of Materials.

(a)

In the event that the materials and/or resources required to manufacture and deliver Compound or Collaboration Product to Shire in a timely manner are, or are reasonably anticipated to become, in short supply such that New River may be unable to provide Shire with the quantities of Compound or Collaboration Product forecast by Shire under the Supply Agreement, New River shall notify Shire of such shortage as promptly as practicable. If New River so notifies Shire, New River and Shire shall promptly meet to discuss how to address the potential shortage.

(b)

In the event that New River, at any time, has any information indicating that it may not be able to supply Shire with all forecasted or ordered quantities of Compound or Collaboration Product (whether or not New River may be at fault), New River shall immediately provide Shire a written notice to that effect.

3. Quality Assurance. The Parties shall enter into a Quality Agreement (the “Quality Agreement”) which shall set forth certain obligations of each Party regarding the manufacture and supply of Compound or Collaboration Product. As more specifically set forth in the Quality Agreement, New River shall be responsible for all aspects of its supply chain regarding the Compound or Collaboration Product, including without limitation quality control, quality assurance, release testing and stability testing.

4. Specifications. The specifications for Compound or Collaboration Product, including the necessary documentation, certificates of analysis and test results, will be established according to the procedures set forth in the Collaboration Agreement.

5. Location of Manufacturing. [*] Should New River desire to change any of the manufacturing sites for Compound or Collaboration Product, or any component thereof, to a site other than those designated in the applicable Regulatory Approval, New River shall notify Shire in writing and the Parties shall thereafter meet to discuss the potential consequences of such a change. [*]

6. Back-Up Manufacturing Rights. If New River fails to supply at least [*] [*] of Shire’s requirements for a Collaboration Product [*] [*] (a “Failure to Supply”), then Shire may, by providing written notice [*] [*] of the occurrence of such Failure to Supply, elect to assume manufacturing of such Collaboration Product. If Shire elects to assume the manufacturing of a Collaboration Product (or if Shire is a back-up manufacturer pursuant to Section 5.3), the following provisions shall be applicable:

(a)	Transfer of Manufacturing Technology. New River, [*], shall be responsible for providing Shire with the documentation, know-how and technical assistance necessary for the successful implementation of the manufacturing process at a location to be designated by Shire. To the extent practicable, New River shall continue to supply Shire with its needs of Collaboration Product under the terms of the Supply Agreement until Shire is capable of doing so.
(b)	Documentation to be Provided by New River. In particular, in connection with the transfer of the manufacturing technology for a Collaboration Product, New River shall provide the following to Shire:
	(i)	Copies of [*] related to manufacturing the Collaboration Product;
	(ii)	A list of all [*] in the production of the Collaboration Product;
	(iii)	Copies of all [*], for the Collaboration Product;
	(iv)	Copies of all [*]
	(v)	All necessary [*] necessary to manufacture the Collaboration Product and copies of any [*]; and
	(vi)	Such other documentation as the Parties may agree.
(c)	Audit of New River Procedures. The Supply Agreement will contain reasonable and customary provisions allowing Shire to inspect and audit those portions of the sites at which the Collaboration Product is manufactured in connection with the transfer of manufacturing technology for a particular Collaboration Product. Any information obtained by Shire through such inspections and audits or reviews of documentation shall be treated as confidential information of New River, subject to the confidentiality obligations under Article 9.
(d)	Access to New River Personnel. New River shall make available to Shire, for a reasonable period of time, all manufacturing and operations [*] necessary to support the transfer of the manufacturing technology to Shire, including the [*] [*] for the validation and qualification of the transferred manufacturing protocol. These [*] in the implementation of the manufacturing technology until all Installation Qualification, Operation Qualification and Process Qualification procedures have been completed successfully.

7. Forecasts. Following the execution of the Supply Agreement, Shire will give to New River a [*] rolling forecast of Shire’s estimated monthly requirements of Compound or Collaboration Product. The first [*] of the forecast shall be binding and the remainder shall be a good faith estimate of Shire’s requirements. However, for each of the [*] in each such forecast, although the quantities forecast may exceed [*] the supply obligations of New River shall not exceed [*] of the amount forecast for such month in the previous forecast. Shire will provide New River with monthly binding purchase orders for Compound or Collaboration Product in accordance with the binding portion of the rolling forecast.

8. Quality Complaints. New River shall be primarily responsible for handling product quality complaints related to Compound or Collaboration Product. Each Party shall promptly advise the other of any such quality complaints with respect to Compound or Collaboration Product.

9. Representations and Warranties. New River shall make, and shall cause its Affiliates to make, representations and warranties regarding the Compound or Collaboration Product supplied under the Supply Agreement, including, without limitation, the following representations and warranties:

(a) All Compound or Collaboration Product shall (i) be manufactured in accordance with the then-current good manufacturing practices of all applicable Regulatory Authorities in countries reasonably designated by Shire from time to time, and all other applicable laws, at the time of delivery of Compound or Collaboration Product, (ii) comply with the specifications at the time of delivery.

In addition, for purposes of avoiding prosecution under the FD&C Act only, New River will guarantee that any Compound or Collaboration Product delivered under the Supply Agreement (i) shall not be adulterated or misbranded within the meaning of the Act and applicable foreign equivalents at the time of delivery to Shire, and (ii) is not an article that may not, under the Act (or applicable foreign equivalents), be introduced into interstate commerce.

10. Covenants. New River shall make, and shall cause its Affiliates to make, covenants relating to Compound or Collaboration Product supplied under the Supply Agreement, including, without limitation, the following covenants:

(a)	New River shall, and require its Affiliates and Third Party contract manufacturers, if any, to maintain all regulatory and governmental permits, licenses and approvals that may be necessary to manufacture and ship Compound or Collaboration Product.
(b)	New River shall advise Shire of any information that arises out of New River’s or its Affiliates’ or Third Party contract manufacturers’ activities of which it is aware, that have adverse regulatory compliance and/or reporting consequences concerning Compound or Collaboration Product.

(c)	New River shall promptly advise Shire of any requests by any Regulatory Authority for inspections at the premises of New River or its Affiliates or Third Party contract manufacturers, with respect to Compound or Collaboration Product.
(d)	In the event New River or its Affiliates or Third Party contract manufacturers are inspected by any Regulatory Authority relating to Compound or Collaboration Product, [*]. New River shall promptly notify Shire of any alleged violations or deficiencies relating to a facility at which Compound or Collaboration Product is manufactured, packaged or stored, and shall promptly disclose to Shire all relevant portions of any notice of observations or potential violations as well as a copy of its or its Affiliates’ or Third Party contract manufacturers’ response thereto.
(e)	For the purpose of permitting a quality and compliance audit, New River shall grant to authorized representatives of Shire (or a Third Party hired on behalf of Shire who is reasonably acceptable to New River), upon reasonable notice, access to areas of each of its plants, and permit Shire access to areas of New River’s and its Affiliates’ and, to the extent practicable, Third Party contract manufacturers’ plants, at such times as Compound or Collaboration Product is being manufactured, packaged or tested; provided, that Shire’s audit of any Third Party facilities will be subject to reasonable and customary confidentiality and non-use obligations.
(f)	Shire shall have the right to examine those technical records made by New River or its Affiliates or Third Party contract manufacturers that relate to the manufacture of Compound or Collaboration Product; provided, that such records will be subject to reasonable and customary confidentiality and non-use obligations.
(g)	New River shall ensure that its Third Party contract manufacturers agree [*]

11. Nonconforming Goods. If a shipment of Compound or Collaboration Product fails, at the time of delivery, to comply with the applicable specifications, and Shire notifies New River of such nonconformity [*] within [*] following Shire’s receipt of such shipment, then New River will replace, at no additional expense to Shire, such Compound or Collaboration Product as soon as reasonably practicable after receipt of notification of nonconformity. Any dispute regarding whether a shipment of Compound or Collaboration Product conforms with the applicable specifications will be submitted to an independent laboratory mutually acceptable to the Parties for final resolution. The costs of retaining the laboratory will be included in Cost of Goods for the US Territory and will be borne by the Party whose evaluation of the applicable shipment of Compound or Collaboration Product is mistaken in the ROW Territory.

12. Payment Terms. Shire will pay New River [*] for any quantity of Compound and Collaboration Product provided under the Supply Agreement. At the time of each shipment, New River shall invoice Shire, and Shire shall pay for such shipment within [*] [*] of receipt of each such invoice.

13. Additional Provisions. In addition to more detailed terms regarding the matters specified above in this Exhibit B, the Supply Agreement shall contain other customary supply agreement provisions.

EXHIBIT C

JOINT PRESS RELEASE

Shire Pharmaceuticals Group plc

Hampshire International Business Park,
Chineham, Basingstoke RG24 8EP UK
Tel +44 1256 894000
Fax +44 1256 894708
http://www.shire.com
New River Pharmaceuticals
1881 Grove Avenue Radford, VA 24141
Tel +1 540 633 7978 Fax: +1 540 633 7979
http://www.nrpharma.com

For immediate release

* (ET) * (GMT)

Shire and New River announce collaboration on Phase 3 ADHD drug
candidate

BASINGSTOKE, UK, PHILADELPHIA, PA, US and RADFORD, Va., US January 31, 2005— Shire Pharmaceuticals Group plc (LSE: SHP; NASDAQ: SHPGY; TSX: SHQ) and New River Pharmaceuticals Inc. (NASDAQ: NRPH) announced today the signing of an agreement for the global commercialization of NRP104, New River’s Phase 3 compound for treatment of Attention Deficit Hyperactivity Disorder (ADHD), as well as for other potential indications.

Under the terms of the agreement the parties will collaborate on NRP104 development, manufacturing, marketing and sales in the US. Shire will book the product sales and New River may supply up to 25% of the sales effort under a co-promotion right. New River will be financially and operationally responsible for clinical and manufacturing development.

Upon U.S. Food and Drug Administration (FDA) approval, the parties will divide operating profit in accordance with the following general principles: Shire will retain 75% of profits for the first two years following launch and the parties will share the profits equally thereafter.

In the rest of the world, Shire has a license to develop and commercialize NRP104 and New River will receive a low double-digit royalty on net sales.

Shire pays an initial sum of US$50 million on signing, a further US$50 million upon acceptance of filing of the New Drug Application by the FDA and up to US$300 million in milestone payments depending on the characteristics of the FDA-approved product labeling. An additional US$100 million milestone would be payable as a sales bonus upon achieving a significant sales target. Shire currently plans to expense the first two US$50 million payments, and to capitalize and amortize the milestone payments and the sales bonus over the life of the product.

Shire may be entitled to refunds of amounts previously paid in the event of a delayed product approval, or upon FDA approval depending on the characteristics of the approved product labeling.

Matthew Emmens, Chief Executive of Shire, said:

“This is a strong addition to our ADHD portfolio and complements the development strategy of Shire and its pipeline. NRP104 is in late stage development and we are encouraged by the data that we have seen to date and hope that the new drug has similar efficacy of currently marketed ADHD treatments with potential additional advantages. Importantly, NRP104 could become a global ADHD product. We have structured the financial payments for this collaboration to reflect the potential of the new drug and look forward to progressing this product with New River.”

R.J. Kirk, Chairman and Chief Executive Officer of New River, said:

“We are delighted to announce this collaboration with Shire, a company that we believe will bring substantial value to this project as we plan and hopefully execute the commercialization of NRP104. Shire’s CNS expertise and leadership position in the ADHD market allows them to significantly contribute to this collaboration in a manner that we believe will optimally serve the interests of our shareholders. We therefore believe that Shire will be our ideal partner for this product and we look forward to working with their outstanding team to fully realize the potential of NRP104.”

For further information please contact:

Shire Pharmaceuticals Group plc
Investor Relations
Cléa Rosenfeld (UK and Europe)	+	44 1256 894 160
Brian Piper (US and Canada)	+	1 484 595 8252

Media
Jessica Mann (UK and Europe)	+	44 1256 894 280
Matthew Cabrey (US)	+	1 484 595 8248
New River Pharmaceuticals Inc.
Investor Relations
John Quirk	+	1 646 536 7029
jquirk@theruthgroup.com
Media
Zack Kubow	+	1 646 536 7020
zkubow@theruthgroup.com

Notes to editors

Shire
Shire Pharmaceuticals Group Plc is a global pharmaceutical company with a strategic focus on meeting the needs of the specialist physician and currently focuses on developing projects and marketing products in the areas of central nervous system, gastrointestinal and renal diseases. Shire has operations in the world’s key pharmaceutical markets (U.S., Canada, U.K., France, Italy, Spain and Germany).

For further information on Shire, please visit the Company’s website: www.shire.com

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization, the impact of competitive products, including, but not limited to, the impact of those on Shire’s Attention Deficit & Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal challenges relating to Shire’s ADHD franchise, government regulation and approval, including but not limited to the expected product approval dates of METHYPATCH® (methylphenidate) and NRP104, including its scheduling classification by the Drug Enforcement Agency in the United States, Shire’s ability to secure new products for development, the implementation of the current reorganization and other risks and uncertainties detailed from time to time in Shire’s filings, including its Annual Report on Form 10-K for the year ended December 31, 2003, with the Securities and Exchange Commission.

New River
New River Pharmaceuticals Inc. is a specialty pharmaceutical company focused on developing novel pharmaceuticals that are safer and improved versions of widely-prescribed drugs, including amphetamines and opioids.

For further information on New River, please visit the company’s website at www.nrpharma.com.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking information that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private

Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of New River Pharmaceuticals, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in the New River Pharmaceuticals Inc. final prospectus filed on August 5, 2004, under Rule 424(b) of the Securities Act of 1933, as amended; the ability to successfully execute the collaboration with Shire within a reasonable timeframe or at all; the progress of our product development programs; the status of our preclinical and clinical development of potential drugs, the likely success of our drug products in clinical trials and the regulatory approval process, particularly whether and under what circumstances NRP104 will be approved by the FDA; the ability to develop, manufacture, launch and market NRP104; our projections for future revenues, profitability and ability to achieve certain sales targets; our estimates regarding our capital requirements and our needs for additional financing; the likely scheduling and labeling of NRP104; our ability to attract partners with acceptable development, regulatory and commercialization expertise; the likelihood of regulatory approval under Section 505(b)(2) under the Federal Food, Drug, and Cosmetic Act; the expected benefits of NRP104 such as efficacy and potential advantages; our ability to develop safer and improved versions of widely-prescribed drugs; and our ability to obtain favorable patent claims. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. New River Pharmaceuticals does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in New River Pharmaceuticals’ final prospectus filed with the SEC on August 5, 2004, under Rule 424(b) of the Securities Act of 1933, as amended, as well as other public filings with the SEC.

EXHIBIT D

TECHNICAL TRADE SECRETS

     Compound means the compound currently identified by New River as NRP104 with the chemical structure [*] and any isomers, salts, solvates, polymorphs, esters and derivatives of any of the foregoing, in each case where an active moiety of such compound is [*].

EXHIBIT E

CERTAIN PRODUCTS OF SHIRE

Development Projects

[*]

Marketed Stimulant Products

[*]

SCHEDULE 5.1.1

NEW RIVER MANUFACTURING CONTRACTORS AND ACTIVITIES

NAME OF THIRD PARTY	ACTIVITIES PERFORMED / TO BE PERFORMED
[*]	Manufacture of Drug Substance (API)
[*]	Manufacture of Drug product (formulation and encapsulation)

SCHEDULE 11.1.3(b)

INDs and DRUG APPROVAL APPLICATIONS

United States IND #67482
United States IND #70109

SCHEDULE 11.1.3(c)(i)(I)

LICENSED PATENTS [*]

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days) 1
[*]	[*]

__________
¹ Official fees do not include Attorney or Foreign Associate Fees.

SCHEDULE 11.1.3(c)(i)(II)

LICENSED PATENTS THAT DO NOT CLAIM COMPOUND OF COLLABORATION PRODUCTS

Serial No. (Filing Date)	Next Action Date (Official fees to be paid within 180 days)
[*]	[*]

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF MATTHEW EMMENS PURSUANT TO
RULE 13a-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934
FORM 10-Q FOR THE QUARTER ENDED
MARCH 31, 2005 OF
SHIRE PHARMACEUTICALS GROUP PLC

I, Matthew Emmens, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Shire Pharmaceuticals Group plc;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d to 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d to 15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2005
	/s/ Matthew Emmens
	Matthew Emmens
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF ANGUS RUSSELL PURSUANT TO
RULE 13a-14 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
FORM 10-Q FOR THE QUARTER ENDED
MARCH 31, 2005 OF
SHIRE PHARMACEUTICALS GROUP PLC

I, Angus Russell certify, that:

1.	I have reviewed this quarterly report on Form 10-Q of Shire Pharmaceuticals Group plc;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d to 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d to 15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2005
	/s/ Angus Russell
	Angus Russell
	Chief Financial Officer

EX-32

EXHIBIT 32

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q of Shire Pharmaceuticals Group plc for the quarter ended March 31, 2005 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Matthew Emmens, the Chief Executive Officer and Angus Russell, the Chief Financial Officer of Shire Pharmaceuticals Group plc, each certifies that, to the best of his knowledge:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Shire Pharmaceuticals Group plc.

Date: May 9, 2005	/s/ Matthew Emmens
	Matthew Emmens
	Chief Executive Officer
Date: May 9, 2005	/s/ Angus Russell
	Angus Russell
	Chief Financial Officer