ROYALTY PARTICIPATION AGREEMENT between THERAVANCE, INC. and ELAN CORPORATION PLC Dated as of May 12, 2013

Exhibit 10.1

ROYALTY PARTICIPATION AGREEMENT

between

THERAVANCE, INC.

and

ELAN CORPORATION PLC

Dated as of May 12, 2013

TABLE OF CONTENTS

Article I

DEFINITIONS AND INTERPRETATION

Article II

SALE OF BENEFICIAL INTEREST

i

ii

iii

ROYALTY PARTICIPATION AGREEMENT

ROYALTY PARTICIPATION AGREEMENT, dated as of May 12, 2013 (this “Agreement”), between THERAVANCE, INC., a Delaware corporation (“Seller”), and ELAN CORPORATION PLC, an Irish public limited company (“Purchaser”; and each of Seller and Purchaser, a “Party” and together, the “Parties”).

BACKGROUND

A.                                    Seller is party to certain drug research, development and commercialization agreements with GGL, referred to herein as the GGL Agreements (each as defined herein), pursuant to which Seller is entitled to certain royalties, milestone payments and other payments in connection with the development and commercialization of products under the GGL Agreements.

B.                                    Seller wishes to sell to Purchaser, and Purchaser wishes to purchase, a participation interest in certain royalty payments when, as and if received by Seller from GGL, but not assign or otherwise transfer to Purchaser any rights to royalty payments, or any other rights, under any of the GGL Agreements.

C.                                    To effect such intent, Purchaser and Seller intend for Seller to sell to Purchaser the beneficial interest in a trust, the corpus of which is a fractional undivided beneficial interest in amounts representing certain royalty payments, when, as and if received (but excluding (i) any rights of any kind under the GGL Agreements and (ii) any milestone payments and other payments) that Seller may receive from GGL pursuant to the GGL Agreements with respect to certain products, subject to the terms and conditions of this Agreement and in compliance with the terms and conditions of the GGL Agreements.

DEFINITIONS AND INTERPRETATION

Capitalized terms used but not otherwise defined in this Agreement are defined in Appendix A to this Agreement.  Appendix A also contains rules of interpretation applicable to this Agreement.

SALE OF BENEFICIAL INTEREST

Section 2.1                                    Sale of Beneficial Interest.

(a)                       Effective as of the Closing:

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(i)             Pursuant to the terms of the Assignment Agreement, Seller shall sell, grant, assign, put over, transfer and convey to Newco the Assignment Interest, free and clear of all Encumbrances other than Permitted Encumbrances (the “Assignment”);

(ii)          Pursuant to the terms of the Trust Agreement, Newco agrees to enter into the Trust Agreement in consideration for the Assignment, whereby Newco appoints the Trustee to hold in trust the Trust Property (as defined in the Trust Agreement) in favor of the Seller (as beneficiary) (“Declaration of Trust”); and

(iii)       In consideration of the payment of the Purchase Price and subject to the terms and conditions of this Agreement, Seller shall sell, grant, assign, put over, transfer and convey to Purchaser, and Purchaser shall purchase, acquire and accept, the Beneficial Interest, free and clear of all Encumbrances, other than Permitted Encumbrances.

(b)                       For the avoidance of doubt, Purchaser is not acquiring any right or interest, including any royalty payment rights, under any GGL Agreement; Purchaser is instead acquiring the beneficial interest in a trust, the corpus of which is certain amounts when, as and if received by Newco pursuant to the Assignment Interest in its fractional undivided beneficial interest equal to the Percentage of the Royalty Interest payments that Seller may receive from GGL pursuant to the GGL Agreements (but excluding (i) any contractual rights of Seller to royalty payments, and (ii) any milestone payments and other payments that Seller may receive, in each case, under the GGL Agreements).  In no circumstances will the Assignment Interest be based on:

(i)             any royalty or other payments received by Seller pursuant to the GGL Agreements based on or relating to sales of Royalty Interest Products which occur prior to the Closing Date;

(ii)          any royalty or other payments received by Seller pursuant to any of the GGL Agreements based on or relating to sales of Royalty Interest Products which occur at any time after the end of the Royalty Interest Term with respect to any Royalty Interest Product in any country;

(iii)       any royalty or other payments received by Seller   pursuant to any of the GGL Agreements based on or relating to sales of any Excluded Products, whether before, during or after the Royalty Interest Term; or

(iv)      any non-monetary consideration provided to Seller pursuant to the terms of the GGL Agreements with respect to the Royalty Interest Products, subject to the terms of Section 6.14 of this Agreement.

Section 2.2                                    Exclusion of GGL Agreement Rights.  It is understood and agreed by the Parties that, notwithstanding anything to the contrary in the Transaction Documents, Seller shall retain all of its rights and interests in, and no rights or interests are being sold, granted, assigned, put over, transferred or conveyed by Seller to Newco (other than the

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Assignment Interest) or to Purchaser, under any of the GGL Agreements.  Without limiting the foregoing, pursuant to the Trust Agreement, no contractual rights to any payments (whether to royalties or otherwise) under the GGL Agreements or the Assignment Agreement are being sold, granted, assigned, put over, transferred or conveyed, and no security interest or other Encumbrance is being granted or imposed on the GGL Agreements or the Assignment Agreement or on any rights to any payments under the GGL Agreements or the Assignment Agreement (whether to royalties or otherwise).  It is the intent of the Parties that the transfer of the Assignment Interest shall constitute a true sale of the Percentage of the undivided beneficial interest in the Royalty Interest to Newco.  The Seller hereby authorizes the filing under the UCC of a financing statement in the form attached hereto as Exhibit C with respect to the sale of the Assignment Interest by Seller to Newco, and any continuation statements (including amendments to effect such continuation) required under the UCC with respect thereto reasonably requested by Purchaser (subject to confidentiality obligations under the GGL Agreements) in order to evidence such sale.

Section 2.3                                    No Obligations Transferred.  Notwithstanding anything to the contrary in the Transaction Documents, the sale, grant, put over, assignment, transfer and conveyance of the Assignment Interest and the Beneficial Interest shall not: (i) transfer to Newco, or make Newco subject to, any obligation or liability of Seller under the GGL Agreements, except as required to comply with the GGL Agreements (including the confidentiality obligations therein) and (ii) transfer to Purchaser, or make Purchaser subject to, any obligation or liability of Seller under the GGL Agreements.  Such obligations and liabilities, including the VI Reverse Milestone Payment Obligation, are, and from and after the Closing shall remain, the obligations and liabilities of Seller.  Purchaser understands and agrees that, under the Trust Agreement, neither it nor the Trustee shall have any rights (whether as a third party beneficiary or otherwise) to enforce (or in the case of Purchaser), to request or require that the Trustee enforce any rights or obligations under the Assignment Agreement, and for the avoidance of doubt, Purchaser hereby disclaims any and all such claims.  For the avoidance of doubt, the foregoing shall not (a) affect Seller’s or Purchaser’s rights under this Agreement or modify the obligations Purchaser and Seller have under this Agreement or (b) affect any liability of either Party to the other under the provisions of Article VIII hereof.

Section 2.4                                    Purchase Price.  The Purchase Price to be paid by Purchaser for the Beneficial Interest is One Billion United States Dollars (US$1,000,000,000) (the “Purchase Price”).

CLOSING

Section 3.1                                    Closing.  Subject to the satisfaction or, if permissible, waiver of the conditions set forth in Section 3.3, the closing of the Transactions (the “Closing”) will take place on the Business Day following the satisfaction or waiver of the conditions set forth in Section 3.3 at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP; ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇; ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unless another time, date or place is agreed to in writing by the Parties (such date being the “Closing Date”).

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Section 3.2                                    Payment of Purchase Price; Delivery of ▇▇▇▇ of Sale.  At the Closing, (a) Purchaser shall deliver to Seller payment of the Purchase Price in its entirety, by wire transfer (same day) of immediately available funds, to the account(s) notified in writing by Seller, without any reduction, deduction, offset or exclusion, whether for withholding or other taxes, or otherwise and (b) Seller shall deliver to Purchaser the executed ▇▇▇▇ of Sale duly executed on behalf of Seller and shall instruct the Trustee to change the beneficiary of the Trust to Purchaser.

Section 3.3                                    Closing Conditions of Each Party.

(a)                       The respective obligations of each Party to consummate the Transactions are subject to the satisfaction or (to the extent permitted by Law) waiver by Seller and Purchaser at or prior to the Closing of the following conditions:

(i)             if required pursuant to Rule 21 of the Irish Takeover Rules (“Rule 21”), the Required Shareholder Approval approving the Transactions shall have been obtained (it being understood and agreed that if such approval is no longer required pursuant to Rule 21, then this condition shall be deemed satisfied); and

(ii)          no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or Order which is then in effect and has the effect of prohibiting the consummation of the Transactions.

(b)                       The obligations of Seller to consummate the Transactions are subject to the satisfaction at or prior to the Closing of the following further conditions:

(i)             (A) the representations and warranties of Purchaser contained in Sections 5.1 and 5.2 (1) that are qualified by materiality or Purchaser Material Adverse Effect shall be true in all respects at and as of the Closing Date as if made at and as of such date, and (2) that are not qualified by materiality or Purchaser Material Adverse Effect shall be true in all material respects at and as of the Closing Date as if made at and as of such time, and (B) Seller shall have received a certificate signed by an appropriate executive officer of Purchaser to the foregoing effect.

(c)                        The obligations of Purchaser to consummate the Transactions are subject to the satisfaction at or prior to the Closing of the following further conditions:

(i)             the Initial Transactions shall have been consummated; and

(ii)          (A) the representations and warranties of Seller contained in Sections 4.1, 4.2, 4.5(a), 4.5(c), 4.5(d) and 4.6 (1) that are qualified by materiality or Seller Material Adverse Effect shall be true in all respects at and as of the Closing Date as if made at and as of such date, and (2) that are not qualified by materiality or Seller Material Adverse Effect shall be true in all material respects at and as of the Closing Date as if made at and as of such time,

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and (B) Purchaser shall have received a certificate signed by an appropriate executive officer of Seller to the foregoing effect.

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as disclosed in the separate disclosure letter which has been delivered by Seller to Purchaser prior to the execution of this Agreement (the “Seller Disclosure Schedule”) (each of which disclosures shall be effective with respect to (i) the corresponding sections and subsections of this Article IV, and (ii) any other section or subsection of this Article IV, but only if the relevance of that reference as an exception to (or a disclosure for purposes of) such section or subsection would be reasonably apparent to a reasonable person who has read that reference and such representations and warranties), Seller hereby represents and warrants to Purchaser as of the date of this Agreement and as of the Closing Date:

Section 4.1                                    Organization.  Seller is a corporation duly organized, validly existing and in good standing, under the Laws of the state of Delaware.  As of the Closing, Newco shall be a limited liability partnership duly organized and validly existing under the laws of England and Wales.  Seller has made available to Purchaser true, correct and complete copies of its charter and bylaws, in each case as amended to the date hereof (the “Seller Charter Documents”), and shall have made available to Purchaser prior to Closing true, correct and complete copies of Newco’s organizational documents (the “Newco Charter Documents”) and Delaware Sub’s organizational documents (the “Delaware Sub Charter Documents”).  All Seller Charter Documents are in full force and effect, and the Newco Charter Documents shall, as of the Closing, be in full force and effect.  Seller is not in violation of the Seller Charter Documents, and, as of the Closing, (i) Newco shall not be in violation of the Newco Charter Documents, and (ii) Delaware Sub shall not be in violation of the Delaware Sub Charter Documents, except, in each case, as would not have, individually or in the aggregate, a Seller Material Adverse Effect.

Section 4.2                                    Power, Authorization and Enforceability.

(a)                       Seller has all necessary corporate power and authority to execute and deliver the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder, and to consummate the Transactions to which it is a party.  The execution, delivery and performance by Seller of the Transaction Documents to which it is a party and the consummation by Seller of the Transactions to which it is a party have been duly and validly authorized by all necessary corporate action of Seller, and no other corporate proceedings on the part of Seller are necessary to authorize the execution, delivery and performance of this Agreement or to consummate such Transactions.  This Agreement has been duly and validly executed and delivered by Seller and, assuming it is duly and validly executed and delivered by Purchaser, shall be a legal and valid binding obligation of Seller, enforceable in accordance with its terms, subject to applicable Laws affecting creditors’ rights generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity.

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(b)                       As of the Closing, Newco shall have all necessary partnership power and authority, and Delaware Sub shall have all necessary limited liability company power and authority, to execute and deliver the Transaction Documents to which it is a party, to perform its respective obligations thereunder, and to consummate the Transactions to which it is a party.  As of the Closing, the execution, delivery and performance by each of Newco and Delaware Sub of the Transaction Documents to which it is party and the consummation by each of Newco and Delaware Sub of the Transactions to which it is a party shall have been duly and validly authorized by all necessary partnership action of Newco and all necessary limited liability company action of Delaware Sub, and no other partnership proceedings on the part of Newco or limited liability company proceedings on the part of Delaware Sub shall be necessary to authorize the execution, delivery and performance of such Transaction Documents or to consummate such Transactions.  As of the Closing, such Transaction Documents shall have been duly and validly executed and delivered by each of Newco and Delaware Sub and, assuming such Transaction Documents are duly and validly executed and delivered by the other parties thereto, shall be a legal and valid binding obligation of each of Newco and Delaware Sub, enforceable in accordance with their respective terms, subject to applicable Laws affecting creditors’ rights generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity.

Section 4.3                                    No Conflicts or Violations.

(a)                       None of the execution and delivery by Seller of the Transaction Documents to which it is a party, the consummation by Seller of the Transactions to which it is a party, or Seller’s compliance with such Transaction Documents will (i) conflict with or violate the Seller Charter Documents, (ii) constitute a breach or default by Seller under any of the GGL Agreements, (iii) constitute a breach or default under any agreement (other than the GGL Agreements) to which Seller or any of its Subsidiaries is a party or by which any of its or their property or assets are bound, (iv) require Seller to make any filing with or obtain any permit, authorization, consent or approval of any Governmental Authority or other Person, or (v) violate any Law or Order to which Seller or the Beneficial Interest is subject, except, in the case of Sections 4.3(a)(ii), (iii), (iv) and (v), as would not reasonably be expected to result in a Seller Material Adverse Effect.

(b)                       As of the Closing, none of the execution and delivery by each of Newco and Delaware Sub of ,the Transaction Documents to which it is a party, the consummation by each of Newco and Delaware Sub of the Transactions to which it is a party, or the compliance by each of Newco and Delaware Sub with such Transaction Documents will (i) conflict with or violate the Newco Charter Documents or the Delaware Sub Charter Documents, respectively, (ii) constitute a breach or default by Seller under any of the GGL Agreements, (iii) constitute a breach or default under any agreement (other than the GGL Agreements) to which Seller or any of its Subsidiaries is a party or by which any of its or their property or assets are bound, (iv) require Newco or Delaware Sub to make any filing with or obtain any permit, authorization, consent or approval of any Governmental Authority or other Person, or (v) violate any Law or Order to which Newco, Delaware Sub, or the Assigned Interest will be subject, except, in the case of Sections 4.3(b)(ii), (iii), (iv) and (v), as would not reasonably be expected to result in a Seller Material Adverse Effect.

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Section 4.4                                    Proceedings.  As of the date hereof, there is no action, suit, proceeding or, to the Knowledge of Seller, investigation before any Governmental Authority, court or arbitrator pending or, to the Knowledge of Seller, threatened in writing against Seller or its Subsidiaries relating to the GGL Agreements or the Beneficial Interest, except as would not reasonably be expected to result in a Seller Material Adverse Effect.

Section 4.5                                    GGL Agreements.

(a)                       Validity and Enforceability.  Each of the GGL Agreements is a legal, valid and binding obligation, in full force and effect, enforceable in accordance with its terms in all material respects, of Seller and, to the Knowledge of Seller, of GGL, subject to applicable Laws affecting creditors’ rights generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity.

(b)                       Breach.  Seller is not in breach of any of the GGL Agreements in any material respect.

(c)                        Assignment.  Seller has not assigned to any Person any of the GGL Agreements since their initial dates of execution, in whole or in part, except as contemplated herein.

(d)                       Other.

(i)             GGL does not have any right to unilaterally amend any GGL Agreement in any manner which would or would reasonably be expected to result, individually or in the aggregate, in a Seller Material Adverse Effect.

(ii)          The information publicly disclosed, as publicly amended and supplemented, by Seller in the Seller Exchange Act Reports regarding the GGL Agreements and the Royalty Interest Products, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such information, in light of the circumstances in which it was disclosed, not misleading.

Section 4.6                                    Contractual Rights to Royalty Interest.  Other than in connection with the Initial Transactions, Seller (i) is the exclusive owner of Seller’s entire right and interest in, to and under the GGL Agreements and the Royalty Interest, free and clear of all Encumbrances other than Permitted Encumbrances and (ii) has not assigned or granted to any Third Party any right or interest (including payments or proceeds) in or to any Royalty Interest beneficially or otherwise.

Section 4.7                                    Intellectual Property.  To the Knowledge of Seller, except as would not reasonably be expected to have a Seller Material Adverse Effect, as of the date hereof:

(a)                       there are no pending litigations, interferences, reexaminations, post-grant proceedings or oppositions in any Major Market Country involving any patents or patent

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applications owned by Seller and that cover the composition of matter of any of the Royalty Interest Products (collectively, the “Key Patents”);

(b)                       the Key Patents that have been granted are valid and enforceable in all material respects;

(c)                        there is no Person who is or claims to be an inventor under any of the Key Patents who is not a named inventor thereof;

(d)                       Seller has not received written notice of any claim by any Person challenging the ownership or the validity or enforceability of the Key Patents, or asserting that the manufacture, importation, sale, offer for sale or use of any of the Royalty Interest Products infringes such Person's patents or other intellectual property rights;

(e)                        no Third Party patent rights have been, are or currently would be, but for an infringement safe harbor, infringed by the manufacture, importation, sale, offer for sale or use of any of the Royalty Interest Products;

(f)                         no Person is infringing any of the Key Patents in any material respect; and

(g)                        all fees necessary to maintain in effect the issued Key Patents have been paid as and when due.

Section 4.8                          UCC Matters.  The Seller's exact legal name is, and during the five (5) years prior to the date hereof has been, "Theravance, Inc.".  The principal place of business of the Seller is, and during the five (5) years prior to the date hereof has been, located in South San Francisco.  The jurisdiction of organization of the Seller is, and has been during the five (5) years prior to the date hereof, located in Delaware.  During the five (5) years prior to the date hereof, the Seller has not been the subject of any merger or limited partnership or other reorganization in which its identity or status was materially changed, except in each case when it was the surviving or resulting entity.

Section 4.9                          No Implied Representations and Warranties.  Purchaser acknowledges and agrees that: (i) other than the representations and warranties of Seller specifically contained in this Article IV, there are no representations or warranties of Seller, Newco or any other Person, and Seller hereby disclaims all other representations and warranties, whether  express, statutory or implied, in connection with this Agreement or the Transactions, including with respect to the Beneficial Interest, the Initial Transactions, the GGL Agreements, the Royalty Interest Products, the Key Patents or any other Intellectual Property or data relating to the Royalty Interest Products including patents and patent applications and other Intellectual Property owned by GGL, or the Transactions, and (ii) Purchaser does not rely on, and Seller shall have no liability in respect of, any representation or warranty not specifically set forth in this Article IV.  Without limiting the foregoing, but subject to Section 4.5(d)(ii), Purchaser acknowledges and agrees that (a)(i) the GGL Agreements generally impose confidentiality obligations on information relating to or generated in connection with those agreements and performance thereunder, and, accordingly, Purchaser has made its own investigation and assessment of the Beneficial Interest, the Royalty Interest Products, the GGL Agreements, the

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Key Patents and any other Intellectual Property related to the Royalty Interest Products, including patents and patent applications and other Intellectual Property owned by GGL, and the Transactions, that Purchaser is entering into this Agreement based on such investigation and assessment and that Purchaser has not relied on and specifically waives any representation, warranty, description or statement, express or implied, set forth in any advertising, marketing literature or other documentation or materials concerning the GGL Agreements, the Beneficial Interest, the Royalty Interest Products, the Key Patents and any other Intellectual Property related to the Royalty Interest Products including patents and patent applications and other Intellectual Property owned by GGL, and (ii) Purchaser is not relying on, and shall have no remedies in respect of, any implied warranties whatsoever, including as to the future amount or potential amount of the Beneficial Interest, the creditworthiness of GGL or any of its Affiliates or any other matter, and (b) except as expressly set forth in any representation or warranty in this Article IV (as modified by the Seller Disclosure Schedule), Seller shall have no liability for losses or damages pursuant to this Agreement (or otherwise) with respect to any information, documents or materials furnished or made available to Purchaser or any of its Affiliates in any data room, presentation, interview or in any other form or manner relating to the Transactions or the GGL Agreements.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Except as disclosed in the separate disclosure letter which has been delivered by Purchaser to Seller prior to the execution of this Agreement (the "Purchaser Disclosure Schedule") (each of which disclosures shall be effective with respect to (i) the corresponding sections and subsections of this Article V, and (ii) any other section or subsection of this Article V, but only if the relevance of that reference as an exception to (or a disclosure for purposes of) such section or subsection would be reasonably apparent to a reasonable person who has read that reference and such representations and warranties), Purchaser hereby represents and warrants to Seller as of the date of this Agreement and as of the Closing Date:

Section 5.1                          Organization.  Purchaser is a public limited company duly organized and validly existing under the Laws of Ireland.  Purchaser has made available to Seller true, correct and complete copies of its memorandum and articles of association or other relevant organizational and governance documents, in each case as amended to the date hereof (the "Purchaser Charter Documents").  All Purchaser Charter Documents are in full force and effect.  Purchaser is not in violation of the Purchaser Charter Documents, except as would not have, individually or in the aggregate, a Purchaser Material Adverse Effect. 

Section 5.2                          Power, Authorization and Enforceability.  Purchaser has, all necessary power and authority to execute and deliver the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder, and to consummate the Transactions to which it is a party.  The execution, delivery and performance by Purchaser of the Transaction Documents to which it is a party and the consummation by Purchaser of the Transactions to which it is a party have been duly and validly authorized by all necessary corporate action of Purchaser, other than the Required Shareholder Approval, and no other corporate proceedings on the part of Purchaser are necessary to authorize the execution, delivery and performance of this

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Agreement or to consummate such Transactions.  This Agreement has been duly and validly executed and delivered by Purchaser and, assuming it is duly and validly executed and delivered by Seller, shall be a legal and valid binding obligation of Purchaser, enforceable in accordance with its terms, subject to applicable Laws affecting creditors' rights generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity.

Section 5.3                          No Conflicts or Violations.  None of the execution and delivery by Purchaser of the Transaction Documents to which it is a party, the consummation by Purchaser of the Transactions to which it is a party, or Purchaser's compliance with such Transaction Documents will (a) conflict with or violate the Purchaser Charter Documents, (b) constitute a breach or default under any agreement to which Purchaser or any of its Subsidiaries is a party or by which any of its or their property or assets is bound, (c) require Purchaser to make any filing with or obtain any permit, authorization, consent or approval of any Governmental Authority or other Person, or (d) violate any Law or Order to which Purchaser is subject, except in the case of Sections 5.3(b), (c) and (d), as would not reasonably be expected to result in a Purchaser Material Adverse Effect.

Section 5.4                          Proceedings.  There is no action, suit, proceeding or, to the Knowledge of Purchaser, investigation before any Governmental Authority, court or arbitrator pending or, to the Knowledge of Purchaser, threatened in writing against Purchaser or its Affiliates relating to the Transactions, except as would not reasonably be expected to result in a Purchaser Material Adverse Effect.

Section 5.5                          Financing.  Purchaser has and, at the time of the Closing will have, sufficient funds in cash available to consummate the Transactions, including payment of the Purchase Price.  Purchaser acknowledges and agrees that its obligations hereunder are not subject to any conditions regarding Purchaser's or any other Person's ability to obtain funding or financing for the consummation of the Transactions.

Section 5.6                          No Implied Representations and Warranties.  Seller acknowledges and agrees that, other than the representations and warranties of Purchaser specifically contained in this Article V, there are no representations or warranties of Purchaser or any other Person either expressed or implied with respect to the Beneficial Interest or the Transactions, and that it does not rely on, and Purchaser shall have no liability in respect of, any representation or warranty not specifically set forth in this Article V.

COVENANTS

Section 6.1                                    Payment of Beneficial Interest.

(a)                       Seller shall irrevocably instruct GGL to make any and all payments in respect of the Assignment Interest into the Account or, if the Lock Box Arrangement is in place, into the Lock Box Account (and from the Lock Box Account into the Account in accordance with the Lock Box Arrangement) when, as and if any such amounts become payable.  Payments in the Account shall be released to Purchaser on the earlier to occur of (i) the next

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Business Day following the delivery to the Trustee of an Earnings Release Notification (as such term is defined in the Trust Agreement) and (ii) sixty (60) days after receipt into the Account of such payments.  Pursuant to the Trust Agreement, the Settlor can make additional contributions to the Trust for the benefit of the Beneficiary at any time in its own discretion.  At any ▇▇▇▇ ▇▇▇▇▇▇ releases its quarterly or annual public financial statements, Seller shall promptly thereafter deliver to the Trustee an Earnings Release Notification (as such term is defined in the Trust Agreement) regarding such financial statements.  Failure to so notify the Trustee shall be without prejudice to Purchaser delivering to the Trustee an Earnings Release Notification (as such term is defined in the Trust Agreement).  Pursuant to the Trust Agreement, Seller may deliver a certificate setting forth the amount of any Cost-Sharing Deductions to be remitted to Seller pursuant to the Trust Agreement.  The Parties shall share equally the out-of-pocket costs and expenses associated with the Trust, the Lock Box Account and the Account. Notwithstanding the foregoing, to the extent Seller receives any amounts in respect of the Assignment Interest from GGL, Seller shall, within two (2) Business Days after such receipt remit, by wire transfer of immediately available funds in United States Dollars to the Account. All such payments are subject to withholding for Taxes, levies and other duties as applicable under the GGL Agreement.

(b)                       In the event that GGL reduces, deducts, offsets or excludes from royalty payments made to Seller in respect of sales of Royalty Interest Products any amounts that GGL claims Seller owes to GGL (i) related to the Royalty Interest, the Transactions or any of the Transaction Documents (including any deduction or withholding for Taxes), and Seller disputes any such reductions, deductions, offsets or exclusions, Seller shall notify Purchaser (to the extent not prohibited under the GGL Agreements) of such dispute and, upon resolution (if any) of such dispute and payment of such disputed amount by GGL to Seller, Seller shall instruct GGL to make a payment in respect of the Assignment Interest into the Account with respect to such disputed amount, (ii) related to the Royalty Interest and (A) there is no dispute between GGL and Seller as to the amount of the royalty payment due in respect of a Royalty Interest Product under the GGL Agreements, (B) there is no dispute between GGL and Seller as to the appropriate amount of the reductions, deductions, offsets or exclusions from such royalty payment and (C) Seller nonetheless consents to a reduction, deduction, offset or exclusion from such royalty payment of an amount in excess of the appropriate reduction, deduction, offset or exclusion amount, then Seller shall pay to the Account an amount equal to such agreed to reduction, deduction, offset or exclusion in excess of such appropriate amount of reductions, deductions, offsets and exclusions multiplied by the Percentage, or (iii) unrelated to the Royalty Interest, the Transactions or any of the Transaction Documents, then, Seller shall pay to the Account an amount equal to the amount of such reduction, deduction, offset or exclusion multiplied by the Percentage.  

(c)                        To the extent that any amount other than payments of the Assignment Interest is deposited by GGL in the Account, Purchaser shall, within two (2) Business Days after becoming aware thereof (but in no event prior to receipt of such amount by Purchaser from the Account), remit such amount, by wire transfer of immediately available funds in United States Dollars to Seller.

(d)                       Purchaser acknowledges and agrees that neither Seller nor Newco is guaranteeing the performance or payment by GGL of its obligations under the GGL Agreements,

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and without limiting the foregoing, Purchaser shall have no recourse to Seller or Newco under this Agreement or otherwise due to GGL's failure to perform its obligations under or breach of the GGL Agreements.

(e)                        To the extent that Seller incurs any out-of-pocket costs and expenses under the GGL Agreements in connection with the Royalty Interest or brings suit or other action against GGL to enforce Seller's rights or GGL's obligations under the GGL Agreements with respect to or to the extent affecting the Royalty Interest, Seller shall be entitled to receive from the Trustee pursuant to Section 7.1 of the Trust Agreement an amount equal to the product of (x) the Percentage multiplied by (y) such out-of-pocket costs and expenses actually incurred by Seller and not reimbursed by GGL pursuant to the GGL Agreements ("Cost-Sharing Deductions") without duplication (after giving effect to all actions taken under the other Transaction Documents).  Without prejudice to Seller’s right to receive such amount under Section 7.1 of the Trust Agreement, Purchaser reserves the right to object to any claim by Seller with respect to any such Cost-Sharing Deduction, and following the resolution of any such objection, Seller shall pay Purchaser such portion (if any) of any such Cost-Sharing Deduction that is determined to not have been owed to Seller, it being understood and agreed that any restrictions on Seller's right to provide information under the GGL Agreements in connection with such claim shall not be used to prejudice Seller's position in any such dispute.   In the event that any amounts then in the Account are insufficient to pay in full the Cost-Sharing Deductions, then Purchaser shall, promptly upon demand from Seller, pay Seller the extent of any such insufficiency.  To the extent Seller is subsequently reimbursed by GGL for such Cost-Sharing Deductions, Seller shall deposit into the Account an amount equal to the product of (x) the Percentage, multiplied by (y) the amount of such reimbursement.

(f)                         If at any time, Seller and GGL (or their successors under the GGL Agreements) merge, consolidate or otherwise become one and the same entity and the Royalty Interest ceases to be payable in whole or in part, then Seller, or if Seller is not the surviving entity, the surviving entity shall pay to Purchaser at such times as would have been payable an amount equal to the amounts Purchaser would otherwise have been entitled to receive under the Transaction Documents as if the GGL Agreements were in full force and effect and the Royalty Interest remained outstanding.

(g)                        Seller shall not, and shall cause Newco not to, amend or terminate the Assignment Agreement or the Trust Agreement without Purchaser's prior written consent.

Section 6.2                                    Tax Matters.

(a)                       Seller shall be entitled to deduct and withhold from the amounts paid or delivered in connection with the Transactions any amounts that Seller is required to deduct and withhold with respect to any such deliveries and payments under the Internal Revenue Code of 1986, as amended, or any provision of state, local, or non-U.S. Law.  If (A) Seller assigns or otherwise transfers this Agreement or the GGL Agreements, (B) Seller, Newco or a Newco Partner changes its jurisdiction of incorporation, residence or organizational structure for tax purposes, (C) Seller violates Section 6.2(b) or Section 6.3 or (D) Seller ceases to be a company described in Article 23(2)(c) of the Treaty, and the amount that is deducted or withheld pursuant to the previous sentence or any amount deducted or withheld by GGL on a

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Royalty Interest payment under the GGL Agreement is greater than the amount that otherwise would have been deducted or withheld, then Seller (or such assignees or transferees) shall pay to the Account such additional amounts so that after all such deduction and withholding have been paid, Purchaser receives an amount equal to the amount it would have received had such event described in clause (A), (B), (C) or (D) not occurred, provided that in the event that (W) Purchaser assigns or otherwise transfers this Agreement, (X) Purchaser changes its jurisdiction of incorporation, residence, or organizational structure for tax purposes, (Y) Purchaser violates Section 6.2(c), or (Z) such requirement to deduct and withhold arises from a change in Law occurring after the date of this Agreement, the amount payable by Seller (or its assignees or transferees) pursuant to this sentence shall be reduced to an amount equal to the payment that would have been required by Seller (or its assignees or transferees) had such event described in clause (W), (X), (Y) or (Z) not occurred.  To the extent that Seller withholds such amounts and remits such withheld amounts to the applicable Governmental Authority, such withheld amounts shall be treated as having been paid to or on behalf of Purchaser.  If Seller determines that it is required by Law to deduct and withhold any amount as described in this Section 6.2(a), Seller shall notify the Trustee and Purchaser of any such requirement as soon as reasonably practical after such determination is made by Seller.  Assuming the accuracy of all representations and covenants made by Purchaser in this Agreement, Seller does not intend, as of the date of this Agreement and under Law at such time, to deduct and withhold any amount as described in this Section 6.2(a), provided that Purchaser complies in all respects with its obligations under this Agreement.  Seller makes no guarantees, however, as to whether such deduction and withholding may ultimately be required.

(b)                       To the extent not prohibited by the GGL Agreements, Seller agrees to use its commercially reasonable efforts to provide in a timely manner such cooperation or assistance (including by providing any necessary tax forms or other documents) as may be reasonably requested by Purchaser or the Trustee (at the sole cost of Purchaser) at any time after the date of this Agreement, so long as the cooperation or assistance could not reasonably be expected to prejudice in any material respect the legal or commercial position of Seller, in order to reduce or eliminate any amounts deducted or withheld pursuant to Section 6.2(a) or any amounts deducted or withheld by GGL on a Royalty Interest payment under the GGL Agreements.

(c)                        Purchaser agrees to use its commercially reasonable efforts to provide in a timely manner such cooperation or assistance (including by providing any necessary tax forms or other documents) as may be reasonably requested by Seller or the Trustee at any time after the date of this Agreement, so long as the cooperation or assistance could not reasonably be expected to prejudice in any material respect the legal or commercial position of Purchaser, in order to reduce or eliminate any amounts deducted or withheld pursuant to Section 6.2(a) or any amounts deducted or withheld by GGL on a Royalty Interest payment under the GGL Agreements.

(d)                       In the event that Seller or any Seller Affiliate receives from any Tax Authority any refund or repayment of any amount which has been deducted or withheld pursuant to Section 6.2(a) or any amount which has been deducted or withheld by GGL on a Royalty Interest payment under the GGL Agreements, Seller shall pay such refund or repayment to Purchaser as soon as reasonably practicable.

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Section 6.3                                    GGL Agreements.

(a)                       Seller shall comply in all material respects with its obligations under the GGL Agreements.

(b)                       Seller agrees that it will not, without Purchaser’s prior written consent, (i) consent to any termination of the GGL Agreements with respect to the Royalty Interest Products, (ii) consent to any amendment of the provisions of the GGL Agreements that implement the formula for calculating the royalties payable under the Royalty Interest or (iii) impose an Encumbrance on the Assignment Interest or Beneficial Interest.

(c)                        Purchaser acknowledges and agrees that, except for the express covenants contained in the Transaction Documents, neither Seller nor Newco shall have any obligation or liability, whether express or implied, in connection with the exercise of Seller’s rights and performance of its obligations under the GGL Agreements and that neither Purchaser nor any other person shall have any claim of any kind against Seller or Newco based on or arising out of Seller’s performance under or in connection with the GGL Agreements, it being understood that Seller shall not be liable or have any obligation with respect to allocations of resources, scope, intensity and duration of efforts, and decisions and judgments made in connection with development and commercialization (including any acts or omissions that result in, or increase the likelihood of, greater or lesser commercial success) (i) with respect to, or as among, any Royalty Interest Products, or (ii) as among any one or more Royalty Interest Products, on the one hand, and any Excluded Products, other products or therapeutically active components, on the other hand.

Section 6.4                                    Confidentiality.

(a)                       Definition.   “Confidential Information” means all information (whether written or oral, or in electronic or other form, and whether furnished before or after the date of this Agreement) disclosed or made available to Purchaser by or on behalf of Seller concerning, or relating in any way, directly or indirectly, to this Agreement, the Transactions or the Royalty Interest, including (i) this Agreement,  including all terms and conditions hereof, (ii) any royalty information, assignments, notices, requests, correspondence or other information furnished pursuant to this Agreement, and any other reports, data, materials, notices, correspondence or documents of any kind relating in any way, directly or indirectly, to this Agreement, the Royalty Interest or the intellectual property, compounds or products giving rise to the Royalty Interest, (iii) any inventions, devices, improvements, formulations, discoveries, compositions, ingredients, patents, patent applications, know-how, processes, trial results, research, developments or any other intellectual property, trade secrets or information involving or relating in any way, directly or indirectly, to the Royalty Interest or the compounds or products giving rise to the Royalty Interest, and (iv) any other material proprietary and confidential information, in whatever form.

(b)                       Exclusions.  Confidential Information will not include information which:

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(i)             at or prior to the time of disclosure by Seller was known to Purchaser or its Affiliates through lawful means and is not under any obligation of confidentiality, as evidenced by Purchaser’s written records;

(ii)          at or after the time of disclosure by Seller becomes generally available to the public through no act or omission on the part of Purchaser or its Affiliates in violation of any obligation of confidentiality or any other legal, contractual or fiduciary obligation to Seller, GGL or any of their respective Affiliates, as evidenced by documents that were generally published prior to any disclosure of such information by Seller;

(iii)       is developed by Purchaser independent of, and without any use of or access or reference to Confidential Information, as evidenced by Purchaser’s written records; or

(iv)      Purchaser receives from a Third Party free to make such disclosure free of any obligation of confidentiality and without breach of any other legal obligation; provided that such Third Party, had the right to disclose such information to Purchaser (free of any obligation of confidentiality and without any legal, contractual or fiduciary obligation to Seller, GGL or any of their respective Affiliates) as evidenced by Purchaser’s written records.

(c)                        Requirements.  Purchaser acknowledges the confidential and proprietary nature of the Confidential Information and agrees that it shall not discuss, reveal, or disclose the Confidential Information to any other Person, or use any Confidential Information for any purpose, other than in connection with the performance of this Agreement, in each case, without the prior written consent of Seller.  Purchaser agrees to take all reasonable precautions (no less rigorous than Purchaser takes with respect to its own comparable confidential and proprietary information) to prevent unauthorized or inadvertent disclosure of the Confidential Information.

(d)                       Disclosure, Legal Obligations.  Notwithstanding the foregoing, Purchaser may disclose such Confidential Information to its officers, directors, employees, accountants, counsel, consultants, advisors and agents who need to know such information in connection with Purchaser’s evaluation and performance of the Transactions and to its lenders or other financing sources in connection with obtaining financing for Purchaser’s operations, so long as (i) such Persons are informed by Purchaser of the confidential nature of such Confidential Information and agree to treat such information confidentially in accordance with the requirements of this Section 6.4 for the benefit of Seller and (ii) Purchaser shall be liable for any breach or violation of such obligations by any such Person.  Purchaser may also disclose Confidential Information to the extent required by Law, including the applicable rules of any stock exchange that are binding on Purchaser, provided that Purchaser shall use its reasonable best efforts to notify Seller of such requirement (to the extent permitted by applicable Law) promptly and sufficiently in advance of any such disclosure so that Seller may seek an appropriate protective order or other appropriate remedy.  Purchaser shall use its reasonable best efforts to  limit such disclosures to that portion of the information legally required to be disclosed and shall use its reasonable best efforts to seek confidential treatment for such information if so

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requested by Seller.  In addition, the Parties will coordinate in advance with each other in connection with the redaction of certain provisions of this Agreement with respect to any SEC or foreign equivalent filings of this Agreement, and each Party shall use its reasonable best efforts to seek confidential treatment for such terms if so requested by the other Party.

(e)                        Return of Information.  Purchaser will, at the request of Seller, after the expiration of the Term or effective termination of this Agreement (i) promptly return all Confidential Information held or used by Purchaser in whatever form, or (ii) at the discretion of Seller, promptly destroy all such Confidential Information, including all copies thereof, and those portions of all documents (e.g., analyses, summaries, etc.) that incorporate or are based on Confidential Information; provided, however, that (x) Purchaser’s legal department may retain one copy of such information for legal compliance purposes only for so long as required by applicable Law or Purchaser’s bona fide pre-existing record-keeping policy, and (y) notwithstanding anything else in this Agreement to the contrary, the confidentiality restrictions imposed hereby shall continue to apply to such information, and shall survive any termination of this Agreement, for so long as such information is retained.  At the request of Seller, Purchaser will promptly certify that it has complied in full with this Section 6.4.

Section 6.5                                    Information Rights.  Purchaser hereby acknowledges the confidentiality obligations imposed on Seller by the GGL Agreements.  Notwithstanding any other provision of this Agreement, Purchaser agrees that Seller shall not, and shall not be required to, disclose any information in violation of its obligations under the GGL Agreements.  Unless prohibited under the GGL Agreements (as determined in Seller’s sole reasonable discretion), Seller shall use its reasonable efforts to provide to Purchaser information reasonably requested by Purchaser that is material to the Beneficial Interest (it being understood that Seller shall not be required to undertake litigation or incur significant expense pursuant to this Section 6.5).

Section 6.6                                    Books and Records.  For accounting purposes only, each of the Parties will treat the sale and assignment to Purchaser of the Beneficial Interest pursuant to Section 2.1 as a sale and assignment on its books and records to the extent permitted under generally accepted accounting principles in the United States.

Section 6.7                                    Public Announcement.

(a)                       On the date of execution of this Agreement or such later date as is mutually agreed by the Parties (the “Announcement Date”), the Parties shall release the mutually agreed upon press release attached as Exhibit A hereto announcing the Transactions.  Upon the occurrence of the Closing, the Parties shall release a mutually agreed upon press release announcing the closing of the Transactions.  These press releases may be modified after the date of this Agreement by the mutual written consent of both Parties.

(b)                       Except as required by applicable Law and subject to the final two (2) sentences of this Section 6.7(b), neither Party will make any public announcement of any information regarding this Agreement without the prior written approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed; provided that the foregoing restriction shall not restrict Seller from making any public announcement of any

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information regarding the Royalty Interest Products.  Once any statement is approved for disclosure by the Parties or information is otherwise made public in accordance with the preceding sentence, either Party may make a subsequent public disclosure of the contents of such statement without further approval of the other Party.  Notwithstanding the foregoing, within sixty (60) days following the Closing, appropriate representatives of the Parties will meet and agree upon a process and principles for reaching timely consensus on how the Parties will make public disclosure concerning this Agreement.

Section 6.8                                    Required Shareholder Approval.

(a)                       Within ten (10) days of the Announcement Date, Purchaser shall (i) give notice in compliance with applicable Law and otherwise in a form to be reasonably agreed by the Parties, of the extraordinary general meeting of its shareholders to be held to approve the Transactions (the “EGM”) to all shareholders of Purchaser entitled to such notice, (ii) distribute the documents required in connection with the EGM to its shareholders, in a form to be reasonably agreed by the Parties (the “EGM Documents”), and (iii) promptly take any other actions necessary to comply with applicable Law to convene the EGM and conduct a valid shareholder vote within thirty-five (35) days of the Announcement Date (the “Meeting Deadline”).  To the extent that Purchaser proposes to distribute any other documents or make any other communications to its shareholders with respect to the Transactions, Purchaser shall first provide copies thereof to Seller for review and approval, such approval not to be unreasonably withheld or delayed.

(b)                       Purchaser confirms and undertakes that the EGM Documents and any other documentation with disclosure in respect of the merits of the Transactions sent to Purchaser’s shareholders in connection with the Transactions will contain a recommendation from Purchaser’s board of directors to such shareholders to vote in favor of the Transactions and such recommendation shall not be withdrawn, modified or altered in any way without Seller’s prior written consent.

(c)                        Following distribution of the EGM Documents, the EGM shall be held on a date prior to the Meeting Deadline to be reasonably agreed by the Parties, subject to the requirements of  applicable Law.  Purchaser shall not postpone or delay the EGM or the shareholder vote for any reason without Seller’s prior written consent.

Section 6.9                                    Royalty Pharma Offer

(a)                       To the extent permitted by Law, Purchaser shall give Seller reasonable prior written notice of any proposed discussion or correspondence between it or its representatives with the Irish Takeover Panel with respect to the Transactions and shall give Seller the opportunity to participate in any such proposed discussion or comment on the correspondence.

(b)                       Purchaser agrees to complete the Transactions without the need for the approval of its shareholders if the offer period in respect of the offer by Royalty Pharma (to be made through Echo Pharma Acquisition Limited) for Purchaser announced on April 15, 2013

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pursuant to Rule 2.5 of the Irish Takeover Rules ends or Purchaser is not otherwise required to seek shareholder approval of the Transactions.

Section 6.10                             Reasonable Best Efforts.  The Parties hereto will use their respective reasonable best efforts to consummate and make effective the Transactions and to cause the conditions to the Closing set forth herein to be satisfied, including (a) the obtaining of all necessary actions or non-actions, consents and approvals from Governmental Authorities or other Persons necessary in connection with the consummation of the Transactions, including the shareholder vote with respect to the Required Shareholder Approval, and the making of all necessary registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval from, or to avoid an action or proceeding by, any Governmental Authority or other Persons necessary in connection with the consummation of the Transactions, provided that neither Party shall seek or obtain, or be obligated to seek or obtain, any consent or approval under any GGL Agreement, (b) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, performed or consummated by such Party in accordance with the terms and conditions of this Agreement, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority vacated or reversed, and (c) the execution and delivery of any additional instruments necessary to consummate the Transactions.

Section 6.11                             UCC Matters.  The Seller shall file and maintain in effect all UCC filings, and shall take such other actions under the UCC, as may be necessary to protect the validity and perfection of Newco’s Assignment Interest under the UCC.  The Seller will not change its location (within the meaning of Sections 9-301 and 9-307 of the applicable UCC) or its legal name without at least ten (10) days’ prior written notice to the Purchaser.  In the event that the Seller desires to so change its location or change its legal name, the Seller will make any required filings and will deliver to the Purchaser copies of all such required filings with the filing information duly noted thereon by the office in which such filings were made.

Section 6.12                             Royalty Interest Disclosures.  Seller shall comply with its obligations under applicable Law to make prompt disclosure to the public of material information concerning the Royalty Interest.

Section 6.13                             Minimum Seller Percentage of Royalty Interest.  Seller hereby agrees that, with respect to each of the BREO/RELVAR/VI Monotherapy Royalty Interest and the ANORO Royalty Interest, during the Holding Period, either (x) Seller and its Affiliates or (y) the Applicable Successor of Seller and its Affiliates, shall hold, in the aggregate, the Minimum Percentage of such Royalty Interest; provided, however, that in the event Seller or an Applicable Successor is acquired (or all or substantially all of the assets of Seller or such Applicable Successor are acquired), then, in each case, the obligations under this Section 6.13 shall apply to such acquiror (provided that, for purposes of this Section 6.13, such acquiror may take into account the holding period of its predecessors-in-interest).  For the avoidance of doubt, nothing in this Section 6.13 shall restrict the rights of Seller, its Affiliates or an Applicable Successor to pledge, encumber or otherwise ▇▇▇▇▇ ▇ ▇▇▇▇ or security interest over all or any portion of the Royalty Interest (other than the Assignment Interest) to a lender in connection with the bona fide borrowing of money by Seller or its Affiliates or such Applicable Successor from such lender

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(other than a monetization or other transaction designed to hedge or transfer the economic interest in the Minimum Percentage of the Royalty Interest that Seller, its Affiliates or any such Applicable Successor may be required to hold at such time pursuant to this Section 6.13).

Section 6.14                             Non-Cash Consideration.  In the event a Royalty Interest is paid other than in cash, Seller shall pay to the Account an amount in cash equal to the fair market value, as reasonably determined by a third party mutually agreed by Purchaser and Seller, of the Percentage of such non-cash consideration as promptly as reasonably practicable following the determination of the fair market value of such non-cash consideration.

Section 6.15                             Bankruptcy.

(a)                       Seller shall, during the term of the Trust, cause (i) Newco’s organizational documents to include the provisions substantially similar to the provisions set forth in Exhibit F hereto, and (ii) Delaware Sub’s limited liability agreement to be substantially in the form attached hereto as Exhibit G.

(b)                       Seller agrees to cause Newco, during the term of the Trust, to:

(i)             keep proper books of account in accordance with its obligations under English law;

(ii)          maintain its registered office in the United Kingdom, and not to establish a branch, agency or place of business or register as a partnership, company or body corporate within the United States or any other country or jurisdiction other than the United Kingdom;

(iii)       do all such things as are necessary to maintain its limited liability partnership existence;

(iv)      not:

(1)                     amend the Trust Agreement or the Assignment Agreement;

(2)                     incur any indebtedness for borrowed money;

(3)                     amend its partnership agreement in a manner adverse to Purchaser;

(4)                     unless required by applicable Law, have any employees (for the avoidance of doubt, the directors of Newco do not constitute employees);

(5)                     enter into any reconstruction, amalgamation, merger or consolidation or take any voluntary steps with a view to its winding-up;

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(6)                     otherwise than as contemplated in the Transaction Documents, release from or terminate the appointment of the Account Bank (as that term is defined in the Trust Agreement); or

(v)         subject to any requirement under applicable Law to maintain a registered office, enter into any lease for, or own, any real property.

(c)                        Seller agrees to cause Delaware Sub, during the term of the Trust, to:

(i)             hold itself out to the public and all other Persons as a legal entity separate from the members and any other person and conduct its own business in its own name and require that all full-time employees of Delaware Sub, if any, identify themselves as such and not as employees of Seller or any of its subsidiaries;

(ii)          allocate fairly and reasonably any taxes and any overhead expenses that are shared with an affiliate, including for shared office space and for services performed by an employee of an Affiliate;

(iii)       use separate stationery, invoices and checks bearing its own name;

(iv)      conduct all transactions with Seller and each such subsidiary strictly on an arm’s-length basis;

(v)         at all times have a board of managers and not less than two independent managers, each of who (A) (1) has prior experience as an independent director, independent manager or independent member with at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities and (2) is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company SP Services, Inc., ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Managers, another nationally-recognized company reasonably approved by Seller and by the Purchaser, in each case that is not an Affiliate of Delaware Sub and that provides professional Independent Managers and other corporate services in the ordinary course of its business, (B) is not, and has not been for a period of five years prior to his or her appointment as an independent manager of Delaware Sub:  (1) a stockholder (whether direct, indirect or beneficial), counterparty under a contract for commercial services, advisor or supplier of Seller or any of its Affiliates (the “Parent Group”), (2) a director, officer, employee, partner, attorney or consultant of the Parent Group, (3) a person related to any person referred to in clauses (1) or (2) above, (4) a person or other entity controlling or under common control with any such stockholder, partner, counterparty under a contract for

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commercial services, supplier, employee, officer or director or (5) a trustee, conservator or receiver for any member of the Parent Group and (D) shall not at any time serve as a trustee in bankruptcy for Delaware Sub, Seller or any Affiliate thereof (each such individual meeting the requirements set forth above, the “Independent Manager”), and insure that (v) no resignation or removal of an Independent Manager shall be effective until (1) Delaware Sub has provided Purchaser and Purchaser with two Business Days’ prior written notice of such resignation or removal, and (2) a successor Independent Manager is appointed and such successor shall have accepted his or her appointment as an Independent Manager by a written instrument, (w) at least two members of Delaware Sub’s board of managers shall be Independent Managers, (x) Delaware Sub’s board of managers shall not approve, or take any other action to cause the filing of, a voluntary bankruptcy petition with respect to Delaware Sub or consent to an involuntary bankruptcy petition with respect to Delaware Sub unless a unanimous vote of Delaware Sub’s board of managers (which vote shall include the affirmative vote of the Independent Managers) shall approve the taking of such action in writing prior to the taking of such action, (y) Delaware Sub’s board of managers shall not vote on any matter requiring the vote of its Independent Managers under its limited liability company agreement unless and until each Independent Manager is then serving on Delaware Sub’s board of managers and (z) the provisions requiring Independent Managers and the provisions described in clauses (x) and (y) of this paragraph (v) cannot be amended without the prior written consent of Seller and Purchaser (for the avoidance of doubt, the Delaware Sub is permitted to have as many additional managers as Seller may determine in its sole and absolute discretion);

(vi)                observe all organizational formalities as a distinct entity, and ensure that all actions relating to (A) the dissolution or liquidation of Delaware Sub or (B) the initiation of, participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving Delaware Sub, are duly authorized by unanimous vote of its managers (including the Independent Managers);

(vii)             maintain Delaware Sub’s books, records and bank accounts separate from those of Seller and each other subsidiary of Seller and otherwise in such a manner so that such books and records are readily identifiable as its own assets rather than assets of Seller or any such subsidiary;

(viii)          maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other person and not have its assets listed on any financial statement of any other person; provided, however, that Delaware Sub’s assets may be included in a consolidated financial statement of its Affiliates; provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Delaware Sub from such Affiliates and to indicate that Delaware Sub’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any

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other company and (ii) such assets shall also be listed on Delaware Sub’s own separate balance sheet;

(ix)      except as specifically permitted herein or in the Transaction Documents, not commingle its assets with assets of any other person;

(x)         pay all of Delaware Sub’s expenses and liabilities out of its own funds;

(xi)      except as otherwise provided herein, maintain its certificate of formation and limited liability company agreement in conformity with the Transaction Documents, such that it does not amend, restate, supplement or otherwise modify its certificate of formation and limited liability company agreement in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents;

(xii)   maintain its separateness such that it does not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any subsidiary; and

(xiii)   maintain at all times adequate capital in light of its contemplated business operations and liabilities and refrain from making any distributions or other payments in respect of its membership interests (including any repurchase of membership interests or return of capital) that would cause it to have inadequate capital.

Section 6.16                             Compliance with Trust Agreement.  Purchaser shall not, and shall instruct the Trustee not to, request any information regarding the payments made into the Account before the time specified in Section 2.5 of the Trust Agreement.

TERM AND TERMINATION

Section 7.1                                    Term.  The term of this Agreement shall commence on the date hereof and end, with respect to each Royalty Interest Product, upon expiration or termination (including any early termination) of the Royalty Interest Term with respect to such Royalty Interest Product (the “Term”).

Section 7.2                                    Termination Prior to Closing. This Agreement may be terminated and the Transactions abandoned prior to the Closing:

(a)                       by Seller if the condition in Section 3.3(a)(ii) shall have become incapable of fulfillment, and shall not have been waived by Seller; provided, that, Seller may

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only seek termination pursuant to this Section 7.2(a), if Seller has not breached in any material respect its representations and warranties or covenants in this Agreement, including, without limitation, its obligations under Section 6.10;

(b)                       by Seller if the Required Shareholder Approval is not obtained as required by the terms and conditions of this Agreement by the Meeting Deadline or at the EGM or if the Closing has not occurred by the Meeting Deadline and the conditions set forth in in Section 3.3(b)(i) are not then satisfied;

(c)                        by Seller if the EGM is not held before the Meeting Deadline or Purchaser otherwise breaches its obligations under Section 6.8;

(d)                       subject to Purchaser’s compliance with Section 7.3(b)(ii), by Purchaser if the condition in Section 3.3(a)(ii) shall have become incapable of fulfillment or if the Required Shareholder Approval is not obtained at the EGM, and, in each case, such condition shall not have been waived by Purchaser; provided, that, Purchaser may only seek termination pursuant to this Section 7.2(d), if Purchaser has not breached in any material respect its representations and warranties or covenants in this Agreement, including, without limitation, its obligations under Sections 6.8 and 6.10; or

(e)                        by Purchaser if the Closing has not occurred by the Meeting Deadline and the conditions set forth in Section 3.3(c) are not then satisfied.

In the event of termination by Seller or Purchaser pursuant to this Section 7.2, written notice thereof shall forthwith be given to the other and this Agreement shall be terminated, without further action by any Party.

Section 7.3                                    Effect of Termination.

(a)                       If this Agreement is terminated and the Transactions are abandoned as described in Section 7.2, this Agreement shall be of no further force and effect, except for the provisions of Section 6.4 (Confidentiality), this Section 7.3 and 0.  Notwithstanding the foregoing, nothing in this Section 7.3 shall be deemed to release any Party from any liability for any prior breach by such Party of the terms and conditions of this Agreement or to impair the right of any Party to compel specific performance by the other Party of its obligations under this Agreement.

(b)                       If this Agreement is terminated pursuant to Section 7.2, Purchaser shall pay to Seller Ten Million United States Dollars (US$10,000,000) by wire transfer of immediately available funds to the bank account notified by Seller to Purchaser in writing: (i) if this Agreement is terminated pursuant to Section 7.2(a), 7.2(b) or 7.2(c), within two (2) Business Days of such termination or (ii) if terminated pursuant to Section 7.2(d) (other than due to the condition in Section 3.3(a)(ii) having become incapable of fulfillment in connection with a Specified Claim), contemporaneously with such termination.

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INDEMNIFICATION

Section 8.1                                    Indemnification by Seller.  Subject to the terms and conditions of this Article VIII, Seller shall indemnify Purchaser, its Affiliates and each of their respective officers, directors, managers, agents and representatives (collectively “Purchaser Indemnitees”) from and against any and all direct damages, losses, claims, costs, liabilities, demands or expenses (including reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (collectively, “Losses”) suffered or incurred by any such Purchaser Indemnitee arising from:

(a)                       any breach of any representation or warranty made by Seller in this Agreement (provided, however, that for purposes of determining whether a breach of the representations and warranties set forth in Sections 4.1, 4.3, 4.4, 4.5(a), 4.5(b), 4.5(d)(i) and 4.7 has occurred for purposes of this Section 8.1(a) only, a violation, conflict, breach, default, failure or the existence of a state of facts or circumstances shall be deemed to be material or to have a Seller Material Adverse Effect if it changes the royalty rate payable in respect of the Royalty Interest Products in a manner adverse to Purchaser); and

(b)                       any breach of any covenant of Seller contained in this Agreement.

Section 8.2                                    Indemnification by Purchaser.  Subject to the terms and conditions of this Article VIII, Purchaser shall indemnify Seller, its Affiliates and each of their respective officers, directors, managers, agents and representatives (collectively “Seller Indemnitees”) from and against any and all Losses suffered or incurred by any such Seller Indemnitee arising from:

(a)                       any breach of any representation or warranty made by Purchaser in this Agreement; and

(b)                       any breach of any covenant of Purchaser contained in this Agreement.

Section 8.3                                    Indemnification Procedure.

(a)                       Third-Party Claims.

(i)             Notice of Third-Party Claims. A Party seeking indemnification (the “Indemnified Party”) with respect to any claim or demand made by any Person against the Indemnified Party (a “Third-Party Claim”) shall promptly notify the other Party (the “Indemnifying Party”) in writing (including in such notice a brief description of the claim for indemnification and the Loss, including damages sought or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified Party) of any claim for indemnification, provided that failure to give such notice shall not relieve the Indemnifying Party of any liability hereunder except to the extent the Indemnifying Party is materially prejudiced by such failure.

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(ii)          Defense of Third-Party Claims.  The Indemnifying Party shall be entitled to participate in the defense of the Third-Party Claim and, if it so chooses, to assume the defense thereof, at its own expense, with counsel selected by the Indemnifying Party; provided that such counsel is not reasonably objected to by the Indemnified Party.  If the Indemnifying Party assumes the defense thereof, the Indemnifying Party (1) shall not be liable to the Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof, and (2) shall permit the Indemnified Party to participate in, but not control, the defense of any such action or suit through counsel chosen by the Indemnified Party, provided that such counsel is not reasonably objected to by the Indemnifying Party and the fees and expenses of such counsel shall be borne by the Indemnified Party.  The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnified Party in the defense of a Third-Party Claim for any period during which the Indemnifying Party has not assumed the defense thereof (other than during the period prior to the time the Indemnified Party shall have notified the Indemnifying Party of such Third-Party Claim).

(iii)       Cooperation.  The Indemnified Party shall, if requested by the Indemnifying Party, give reasonable assistance to  and cooperate with the Indemnifying Party in defense of any claim.  The Indemnifying Party shall reimburse the Indemnified Party for any Third Party reasonable legal expenses directly incurred from providing such assistance and cooperation.  Such assistance and cooperation shall include (1) the retention of and the provision to the Indemnifying Party of records and information that are reasonably relevant to such Third-Party Claim and (2) the making available of employees on a mutually convenient basis for providing additional information and explanation of any material provided hereunder.  The Indemnifying Party shall have the right to consent to the entry of judgment with respect to, or otherwise settle, a Third-Party Claim with the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld; provided that the Indemnified Party may withhold its consent if any such judgment or settlement imposes an unreimbursed monetary or continuing non-monetary obligation on such Indemnified Party or does not include an unconditional release of such Indemnified Party and its Affiliates from all liability in respect of claims that are the subject matter of the indemnified claim.  Regardless of whether the Indemnifying Party shall have assumed defense of a Third-Party Claim, the Indemnified Party shall not be entitled to be indemnified pursuant to this Article VIII if the Indemnified Party shall settle such Third-Party Claim without the prior written consent of the Indemnifying Party.

(b)                       Claims by a Party.  In order for an Indemnified Party to be entitled to any indemnification under this Article VIII in respect of Losses that do not arise out of or involve a Third Party Claim, the Indemnified Party must notify the Indemnifying Party promptly in writing (including in such notice a brief description of the claim for indemnification and the Loss, including damages sought or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified Party); provided, that, the failure to promptly provide such

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notice shall not affect the indemnification provided under this Article VIII except to the extent that the Indemnifying Party has been actually prejudiced as a result of such failure.

Section 8.4                                    Claims Period for Breach of Representations and Warranties.  The representations and warranties contained in this Agreement shall not survive the Closing; however, claims for breach of the: (a) representations and warranties contained in this Agreement (other than any claims for breach of the Fundamental Representations) may be made at any time following the Closing and up to and including the date that is the first anniversary of the Closing Date; and (b) Fundamental Representations may be made at any time following the Closing and prior to the expiration of the applicable statute of limitations.  In no event shall any Party hereto have any liability for any breach of a representation or warranty set forth in this Agreement unless the other Party hereto shall have delivered a notice to such Party, pursuant to Section 8.3 prior to the deadline applicable to the making of such claim set forth in the preceding sentence.

Section 8.5                                    Limitations on Indemnification.

(a)                       Notwithstanding anything herein to the contrary, Seller shall have no liability to Purchaser under this Agreement for any action taken by Seller or any failure by Seller to take any action pursuant to Article VI  in compliance with any written instructions of Purchaser or with the prior written consent of Purchaser.

(b)                       Seller or Purchaser, as applicable, shall not be obligated to indemnify any Purchaser Indemnitee or Seller Indemnitee, as applicable, if the Losses incurred by such Person arise from the gross negligence, fraud or willful misconduct of Purchaser or Seller, as applicable, or their respective Affiliates, officers, directors, managers, agents and representatives (acting in their capacity as such).

(c)                        Notwithstanding anything in this Agreement to the contrary, Seller shall not have any liability under: (i) Section 8.1 with respect to any individual item (or any series of related items) if the Loss related thereto is less than US$750,000, and such items shall not be aggregated for purposes of Section 8.5(c)(ii); (ii) Section 8.1(a) unless the aggregate liability for all Losses suffered by the Purchaser Indemnitees thereunder exceeds US$15,000,000, and then only to the extent of such excess; or (iii) Section 8.1 (except to the extent of any amounts Seller fails to pay or have paid Purchaser in breach of Section 6.1 or Section 6.2(a) or for breach of Section 6.1(g)) in excess of the amount by which (x) the Purchase Price exceeds (y) the aggregate amount of payments made to Purchaser in respect of the Beneficial Interest theretofore received or receivable by Purchaser, in the aggregate; provided, however, that the cap set forth in clause (iii) shall not be less than Two Hundred Million Dollars (US$200,000,000) except with respect to any breach for which indemnification is sought that arises from or relates to a Specified Claim.  Notwithstanding anything to the contrary in any Transaction Document, for any Loss for which Seller must indemnify any Purchaser Indemnitee under this Agreement, the amount paid by Seller shall count toward the liability cap under both this Agreement and under the Assignment Agreement and in no event shall Seller have any liability for Losses under the Assignment Agreement arising out of the same matter or set of facts or circumstances as any claims made, or for which a claim could be made, under this Agreement.

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(d)                       Notwithstanding anything in this Agreement to the contrary, Purchaser shall not have any liability under: (i) Section 8.2 with respect to any individual item (or any series of related items) if the Loss related thereto is less than US$750,000, and such items shall not be aggregated for purposes of Section 8.5(d)(ii); (ii) Section 8.2(a) unless the aggregate liability for all Losses suffered by the Seller Indemnitees thereunder exceeds US$15,000,000, and then only to the extent of such excess; or (iii) after the Closing, Section 8.2 in excess of US$1,000,000,000.

(e)                        The amount of any Losses payable under this Article VIII by an Indemnifying Party shall be reduced by the amount, if any, of any tax benefit available to the Indemnified Party by reason of such Losses or the payment thereof and by any insurance proceeds or other recovery from a Third Party received by the Indemnified Party (net of any expenses incurred by such Indemnified Party in procuring such recovery) in connection with the matter out of which such Losses arise.  If the Indemnified Party receives any proceeds subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall reimburse the Indemnifying Party as promptly as practicable thereafter for any payment made by such Indemnifying Party pursuant to such Indemnifying Party’s indemnification obligations hereunder up to the amount received pursuant to this Article VIII by the Indemnified Party from such Indemnifying Party (net of any expenses incurred by such Indemnified Party in procuring such recovery).

(f)                         For purposes of determining the amount of any Losses payable pursuant to Sections 8.1 or 8.2 (but not, for the avoidance of doubt, for the purposes of determining the existence of a breach), any qualification as to materiality, Seller Material Adverse Effect or Purchaser Material Adverse Effect contained in the applicable underlying representation or warranty shall be disregarded.

Section 8.6                                    Exclusive Remedy.  Notwithstanding anything to the contrary in the Transaction Documents the Parties hereto acknowledge and agree that this Article VIII (including Section 8.4 and Section 8.5) shall provide the Parties’ sole and exclusive remedy with respect to any matter or claim arising out of, relating to, or in connection with, the Transaction Documents and the Transactions, except (i) for fraud or willful misconduct, (ii) injunctive relief or claims for specific performance pursuant to Section 9.4 (Specific Performance) and (iii) Purchaser’s indemnification obligation pursuant to the last sentence of Section 9.1(b).

Section 8.7                                    Disclaimer of Consequential Damages.

(a)                       EXCEPT WITH RESPECT TO (i) A PARTY’S FRAUD OR WILLFUL MISCONDUCT, OR (ii) LOSSES ACTUALLY PAID TO A THIRD PARTY PURSUANT TO A THIRD-PARTY CLAIM IN ACCORDANCE WITH ARTICLE VIII, TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTIES FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INVESTMENT LOSSES, LOST PROFITS, LOSS OF DATA, OR LOSS OF USE ARISING IN ANY MANNER OUT OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS HOWEVER CAUSED WHETHER BY NEGLIGENCE, BREACH OF CONTRACT, TORT OR OTHERWISE AND WHETHER OR NOT SUCH PARTY HAS

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BEEN ADVISED OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF ANY SUCH DAMAGES.

(b)                       THE PARTIES HAVE AGREED THAT THE LIABILITY LIMITATIONS SPECIFIED IN SECTION 8.5 AND THIS SECTION 8.7 WILL SURVIVE AND APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED ITS ESSENTIAL PURPOSE.

MISCELLANEOUS

Section 9.1                                    Assignment.

(a)                       Assignment Prior to Closing.  Prior to the Closing, neither Party may assign or otherwise transfer this Agreement, in whole or in part, without the prior written consent of the other Party, except that (i) Seller may assign this Agreement in its entirety to an Affiliate of Seller to which Seller’s interests under the GGL Agreements may be assigned for so long as such Affiliate remains an Affiliate of Seller and if Seller guarantees the performance of this Agreement by such Affiliate; (ii) Purchaser may assign this Agreement in its entirety to an Affiliate of Purchaser for so long as such Affiliate remains an Affiliate of Purchaser and if Purchaser guarantees the performance of this Agreement by such Affiliate, and (iii) each of Seller and Purchaser may and shall assign this Agreement in its entirety to a successor to all or substantially all of the assets of such Party whether by merger, sale of stock, sale of assets or other similar transaction.

(b)                       Assignment Post-Closing.  Following the Closing, (i) Seller may not assign or otherwise transfer this Agreement without the prior written consent of Purchaser except that Seller may assign this Agreement, in whole or in part, to (A) an acquirer of Seller or a successor to all or substantially all of the assets of Seller, whether by merger, sale of stock, sale of assets or other similar transaction, (B) with respect to any Royalty Interest Product, an Applicable Successor of Seller relating to such Royalty Interest Product, whether by merger, sale of stock, sale of assets or other similar transaction or (C) an Affiliate of Seller for so long as such Affiliate remains an Affiliate of Seller and if Seller guarantees the performance of this Agreement by such Affiliate; (ii) Purchaser may not assign or transfer this Agreement or the Beneficial Interest, in whole or in part, without the prior written consent of Seller except that Purchaser may assign this Agreement in its entirety to (A) an Affiliate of Purchaser for so long as such Affiliate remains an Affiliate of Purchaser and if Purchaser guarantees the performance of this Agreement by such Affiliate or (B) a Third Party that has acquired Purchaser or all or substantially all of the business or assets of Purchaser; and (iii) Purchaser may pledge, mortgage or otherwise grant a security interest over all or any part of the Beneficial Interest to a Third Party lender in connection with the borrowing of money by Purchaser from such Third Party lender without the consent of Seller, provided that (A) Purchaser shall remain obligated to comply with all of its obligations under this Agreement and (B) such Third Party assignee agrees in writing to comply with this Agreement, including the confidentiality obligations set forth in Section 6.4 of this Agreement.  For the avoidance of doubt, the restrictions on assignment contained in this Section 9.1(b)(ii) shall not restrict Purchaser from selling a participation interest

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in the Beneficial Interest as, if and when received, it being understood and agreed that such sale will not involve any assignment or transfer, in whole or in part, of this Agreement or any rights or obligations under this Agreement and the purchaser of such an interest will not have any rights to enforce this Agreement against Seller or Newco, whether directly, as a third party beneficiary or otherwise and Purchaser shall indemnify and hold harmless Seller and Newco  from any such claim brought in violation of this provision.

(c)                        Seller Corporate Reorganization.  Notwithstanding anything to the contrary herein, Seller shall be permitted to assign this Agreement and the rights and obligations hereunder in respect of the MABA ‘081 Royalty Interest, in whole or in part, without Purchaser’s consent, to a Third Party pursuant to the Seller Corporate Reorganization.

(d)                       Successors and Assigns.  Subject to the terms and conditions of this Section 9.1, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their permitted successors and assigns.  Any purported assignment or other transfer in violation of this Section 9.1 shall be void ab initio and of no force or effect.

Section 9.2                                    Further Assurances.  After the Closing, from time to time, as and when reasonably requested by any Party, each Party shall execute and deliver, or cause to be executed and delivered, all such documents, certificates, agreements and instruments, and shall take, or cause to be taken, all such further or other actions, as are reasonably necessary and appropriate to carry out all of the provisions of this Agreement, or to consummate the Transactions.

Section 9.3                                    Notices.  All notices, requests, demands, consents, waivers or other communications to or from either Party to the other Party must be in writing and will be deemed to have been given

(a)                       upon delivery, including upon confirmation by the carrier of delivery (which may be in electronic form), if delivered by hand or mailed via overnight or express mail service or by courier,

(b)                       in the case of a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient or other fax confirmation of receipt, or

(c)                        in the case of an email, when receipt is confirmed by telephone or reply email from the recipient,

addressed as follows (or to such other address or addresses as the Seller or the Purchaser may from time to time designate by notice given in accordance with this Section 9.3:

if to Seller:

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Theravance, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of:                          ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

Senior Vice President & General Counsel

Fax No.:                                                 (▇▇▇) ▇▇▇-▇▇▇▇

E-mail:                                                        ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇

with a copy to:

Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention of:                          Amr ▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇

Fax No.:                                                 (▇▇▇) ▇▇▇-▇▇▇▇; (▇▇▇) ▇▇▇-▇▇▇▇

E-Mail:                                                       ▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇; ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇

with a copy to:

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention of:                          ▇▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇

Fax No.:                                                 (▇▇▇) ▇▇▇-▇▇▇▇

E-Mail:                                                       ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇; ▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇

if to the Purchaser:

Elan Corporation, plc
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Attention of:                          ▇▇▇▇ ▇▇▇▇▇

General Counsel

Fax No.:                                                 ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇

E-mail:                                                        ▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇

with a copy to:

Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇  ▇▇▇▇▇
Attention of:                          ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇

Fax No.:                                                 (▇▇▇) ▇▇▇-▇▇▇▇

E-mail:                                                        ▇▇▇▇@▇▇▇.▇▇▇

with a copy to:

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A&L Goodbody Solicitors
25/28 International Financial Services ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Attention of:                          ▇▇▇▇ ▇▇▇▇▇

Fax No.:                                                 + 353 1 649 2649

E-mail:                                                        ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇

Section 9.4                                    Specific Performance.  Each of the Parties hereto acknowledges that the other Party may have no adequate remedy at law if the first Party fails to perform any of its non-monetary obligations under this Agreement.  In such event, each of the Parties agrees that the other Party shall have the right, in addition to any other rights it has (whether at law or in equity), to pursue equitable remedies such as an injunction or specific performance of this Agreement without necessity of posting any bond or undertaking in connection therewith.  This remedy is separate and apart from any other remedy the Parties may have under this Agreement.

Section 9.5                                    Title; Headings; Captions.  The title, headings and captions in this Agreement are included for convenience only and will not affect the meaning or interpretation of any provision of this Agreement.

Section 9.6                                    Independent Contractors.  The Parties recognize and agree that each is operating as an independent contractor and not as an agent or fiduciary of the other.  Notwithstanding any provision of this Agreement which may indicate otherwise, it is the specific intent of the Parties that this Agreement and the relationship created hereby is not, nor shall it be deemed to be, a separate entity, joint venture or partnership or any similar arrangement, nor shall any master/servant, employer/employee or principal/agent relationship be created between the Parties.

Section 9.7                                    Third-Party Beneficiaries.  Except to the extent expressly contemplated with respect to Seller Indemnitees and Purchaser Indemnitees in Article VIII, this Agreement is for the sole benefit of Seller and Purchaser and their permitted successors and assigns, and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such permitted successors and assigns, any legal or equitable rights hereunder.  Notwithstanding anything herein to the contrary, with respect to any indemnification claim made pursuant to Article VIII, Seller or Purchaser shall make such claim on behalf of the applicable Seller Indemnitee or Purchase Indemnitee, as applicable, and such Person (unless such Person is Seller or Purchaser, itself) shall not be entitled to directly make such claim against Purchaser or Seller, as applicable.

Section 9.8                                    Entire Agreement.  This Agreement, along with the Appendices, Exhibits, Schedules, Seller Disclosure Letter and Purchaser Disclosure Letter and other attachments hereto, sets forth the entire agreement and understanding between the Parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings relating to such subject matter.

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Section 9.9                                    Amendment and Supplementation.  This Agreement may be amended, modified or supplemented only by a written agreement signed by both Parties.

Section 9.10                             No Waiver.  Any waiver of, or consent to depart from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Party giving it, and only in the specific instance and for the specific purpose for which it has been given.  No failure or delay of either Party in exercising any power, right or remedy under this Agreement will operate as a waiver.  No single or partial exercise of any power, right or remedy precludes any other or further exercise of such power, right or remedy or the exercise of any other power, right or remedy.

Section 9.11                             Severability.  If any of the covenants, agreements or terms of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining covenants, agreements or terms of this Agreement and will in no way affect the validity, legality or enforceability of the remaining Agreement. Upon such determination that any covenant, agreement or term is invalid, illegal or unenforceable, this Agreement shall be deemed modified so as to effect the original intent of the Parties as closely as possible in order that the Transactions be consummated as originally contemplated to the fullest extent consistent with applicable Law.

Section 9.12                             Governing Law.  THIS AGREEMENT AND ALL ACTIONS, PROCEEDINGS OR COUNTERCLAIMS (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF EXCEPT AS SET FORTH IN SECTIONS 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

Section 9.13                             Submission to Jurisdiction.  The parties submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State Court sitting in New York, New York for purposes of all legal proceedings arising out of or relating to this Agreement. The parties irrevocably waive, to the fullest extent they may do so, any objection that they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 9.14                             Waiver of Jury Trial.  Each Party irrevocably waives, to the fullest extent permitted by applicable Law, any and all right to trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or the Transactions.

Section 9.15                             Counterparts.  This Agreement may be executed in any number of counterparts.  Each counterpart will be an original, and all counterparts will together constitute one and the same instrument.  Delivery of an executed counterpart via PDF or other electronic delivery shall be considered the same as delivery of a manually executed counterpart.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties hereto have set their hands by their authorized representatives as of the year and date first indicated above.

APPENDIX A

DEFINED TERMS

A.                                    DEFINITIONS.

For the purposes of this Agreement, unless otherwise indicated, the following terms shall have the respective meanings specified below, and grammatical variations of such terms shall have corresponding meanings:

1.                                      “Account” has the meaning set forth in the Trust Agreement.

2.                                      “Affiliate” means, with respect to either Party, any other Person directly or indirectly controlling, controlled by or under common control with, such Party.  For the purposes of this definition “control” means the possession, directly or indirectly, of (a) the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other equity interest, representation on its board of directors or body performing similar functions, by contract or otherwise, together with (b) ownership of the related equity interest in such Person; and the terms “controlling” and “controlled” have corollary meanings.

3.                                      “Agreement” has the meaning set forth in the introductory paragraph of this Agreement.

4.                                      “Announcement Date” has the meaning set forth in Section 6.7 of this Agreement.

5.                                      “ANORO” means (a) the combination medicine comprising UMEC with VI, with no other therapeutically active component, and explicitly excluding either component as a monotherapy, and which is proposed, as of the date hereof, to be sold under the brand name “ANORO™ ELLIPTA™”, and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems, in each case, with respect to only such combination medicine set forth in subsection (a) comprising UMEC with VI, with no other therapeutically active component (and explicitly excluding either component as a monotherapy).

6.                                      “ANORO Royalty Interest”:

(a)                                 Means Seller’s entitlement under the Collaboration Agreement to receive the following payments during the Royalty Interest Term, subject to subsections (b), (c) and (d) of this definition:

(i)                                     royalty payments on any net sales worldwide of ANORO by or on behalf of GGL, pursuant to Section 6.3 of the Collaboration Agreement;

(ii)                                  any interest on amounts referred to in clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the Collaboration Agreement;

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(iii)                               any Infringement Payments with respect to ANORO in lieu of the payments referred to in clause (a)(i) immediately above; and

(iv)                              any Other Amounts with respect to ANORO in lieu of the payments referred to in clause (a)(i) immediately above.

(b)                                       The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to the reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9 of the Collaboration Agreement.  The VI Reverse Milestone Payment Obligation shall remain the obligation of Seller, and shall not be a reduction, deduction, offset or exclusion from the royalty payments under subsection (a) above of this definition.

(c)                                        The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to reduction, deduction, offset and exclusion from such royalties of any Cost-Sharing Deductions (without double counting).

(d)                                       The entitlement to the payments and amounts set forth in subsection (a) above of this definition does not include any (i) signing payments (including any signing payments pursuant to Section 6.1.1 of the Collaboration Agreement), (ii) one-time fees for new compounds contributed to the collaboration (including any one-time fee payments from GGL to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration Agreement), (iii) milestone payments (including any milestone payments pursuant to Section 6.2 of the Collaboration Agreement), or (iv) any other payments (other than those expressly identified in subsection (a) above of this definition), in the case of clauses (i), (ii), (iii) and (iv) of this clause (d), paid to Seller relating to ANORO.

7.                                      “Applicable Successor” means with respect to Seller and any of its Affiliates,with respect to each Royalty Interest Product, the assignee or successor-in-interest to all or substantially all of Seller’s interest under the applicable GGL Agreement with respect to such Royalty Interest Product (other than GGL).

8.                                      “Assignment” has the meaning set forth in Section 2.1(a)(i) of this Agreement.

9.                                      “Assignment Agreement” means the Assignment Agreement to be entered into on the Closing Date by Seller and Newco substantially in the form attached hereto as Exhibit D.

10.                               “Assignment Interest” means (i) a twenty-one percent (21%) undivided beneficial interest in the Royalty Interest and (ii) the assignment of a non-exclusive right to enforce payment in respect thereof under the GGL Agreements.

11.                               “Beneficial Interest” means 100% of the beneficial interest in the Trust.

12.                               “▇▇▇▇ of Sale” means that certain ▇▇▇▇ of Sale substantially in the form attached to this Agreement as Exhibit B.

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13.                               “BREO/RELVAR” means (a) the combination medicine comprising FF and VI, with no other therapeutically active component, and explicitly excluding either component as a monotherapy, and which is proposed, as of the date hereof, to be sold under the brand name “BREO™ ELLIPTA™” in the United States and “RELVAR™ ELLIPTA™” in the European Union and Japan, and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems, in each case, with respect only to such combination medicine set forth in subsection (a) comprising FF and VI, with no other therapeutically active component (and explicitly excluding either component as a monotherapy).

14.                               “BREO/RELVAR Royalty Interest”:

(a)                                       Means Seller’s entitlement under the Collaboration Agreement to receive the following payments during the Royalty Interest Term, subject to subsections (b), (c) and (d) of this definition:

(i)                                     royalty payments on any net sales worldwide of BREO/RELVAR by or on behalf of GGL, pursuant to Section 6.3 of the Collaboration Agreement;

(ii)                                  any interest on amounts referred to in clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the Collaboration Agreement;

(iii)                               any Infringement Payments with respect to BREO/RELVAR in lieu of the payments referred to in clause (a)(i) immediately above; and

(iv)                              any Other Amounts with respect to BREO/RELVAR in lieu of the payments referred to in clause (a)(i) immediately above.

(b)                                       The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to the reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9 of the Collaboration Agreement.  The VI Reverse Milestone Payment Obligation shall remain the obligation of Seller, and shall not be a reduction, deduction, offset or exclusion from the royalty payments under subsection (a) above of this definition.

(c)                                        The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to reduction, deduction, offset and exclusion from such royalties of any Cost-Sharing Deductions (without double counting).

(d)                                       The entitlement to the payments and amounts set forth in subsection (a) above of this definition does not include any (i) signing payments (including any signing payments pursuant to Section 6.1.1 of the Collaboration Agreement), (ii) one-time fees for new compounds contributed to the collaboration (including any one-time fee payments from GGL to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration Agreement), (iii) milestone payments (including any milestone payments pursuant to Section 6.2 of the Collaboration Agreement), or (iv) any other payments (other than those expressly identified in subsection (a) above of

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this definition), in the case of clauses (i), (ii), (iii) and (iv) of this clause (d), paid to Seller relating to BREO/RELVAR.

15.                               “BREO/RELVAR/VI Monotherapy Royalty Interest” means the BREO/RELVAR Royalty Interest together with the VI Monotherapy Royalty Interest.

16.                               “Business Day” means any day that is not a Saturday, Sunday or other day on which banks are required or expressly authorized to be closed in London, England, New York, New York, San Francisco, California or Dublin, Ireland.

17.                               “Closing” has the meaning set forth in Section 3.1 of this Agreement.

18.                               “Closing Date” has the meaning set forth in Section 3.1 of this Agreement.

19.                               “Collaboration Agreement” means that certain Collaboration Agreement by and between Theravance, Inc. and Glaxo Group Limited dated November 14, 2002, as amended from time to time.

20.                               “Confidential Information” has the meaning set forth in Section 6.4(a) of this Agreement.

21.                               “Cost-Sharing Deductions” has the meaning set forth in Section 6.1(e) of this Agreement.

22.                               “Declaration of Trust” has the meaning set forth in Section 2.1(a)(i).

23.                               “Delaware Sub” means the general partner of Newco.

24.                               “Delaware Sub Charter Documents” shall have the meaning set forth in Section 4.1 of this Agreement.

25.                               “EGM” has the meaning set forth in Section 6.8(a).

26.                               “EGM Documents” has the meaning set forth in Section 6.8(a).

27.                               “Encumbrance” means any lien, charge, security interest, mortgage or pledge.

28.                               “Excluded Products” means any therapeutically active component or product, whether as a monotherapy, combination product or otherwise, and any delivery devices (whether stand-alone or with any one or more therapeutically active components or products), other than the Royalty Interest Products.  “Excluded Products” includes, by way of example:

(a)                                 UMEC, as a monotherapy or in a combination product (other than UMEC and VI, with no other therapeutically active component), including a combination product that includes (i) UMEC, (ii) VI and (iii) at least one other therapeutically active component;

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(b)                                 FF, as a monotherapy or in a combination product (other than FF and VI, with no other therapeutically active component), including a combination product that includes (i) FF, (ii) VI and (iii) at least one other therapeutically active component;

(c)                                  MABA ‘081 other than as a monotherapy (i.e.  excluding MABA ‘081 in combination with any one or more other therapeutically active component(s));

(d)                                 VI, in any product other than (i) as a monotherapy, (ii) ANORO and (iii) BREO/RELVAR; and

(e)                                  any other therapeutically active component or product (including a combination product of two or more therapeutically active components not expressly specified in the definition of each of ANORO, BREO/RELVAR, MABA ‘081 and VI Monotherapy).

29.                               “FF” means the inhaled corticosteroid fluticasone furoate (with the chemical structure as set forth in Attachment A-1) or an ester, salt or other noncovalent derivative thereof.

30.                               “Fundamental Representations” means the representations and warranties set forth in Sections 4.1, 4.2, 4.6, 5.1 and 5.2 of this Agreement.

31.                               “GGL” means Glaxo Group Limited and, with respect to any GGL Agreement, any successor in interest under such GGL Agreement.

32.                               “GGL Agreements” means the Collaboration Agreement and the Strategic Alliance Agreement.

33.                               “Governmental Authority” means any United States (federal, state or local), Irish or other foreign government, or any governmental, regulatory, judicial or administrative authority, agency or commission.

34.                               “Holding Period” means the eight (8) year period commencing on the Closing Date.

35.                               “Indemnified Party” has the meaning set forth in Section 8.3(a) of this Agreement.

36.                               “Indemnifying Party” has the meaning set forth in Section 8.3(a) of this Agreement.

37.                               “Infringement Payment” means any net collections, recoveries, damages, awards or settlement payments that are actually paid to Seller as a result of any settlement discussion, litigation, arbitration or other legal proceeding brought against third-party infringers by Seller pursuant to Section 13 of the Collaboration Agreement or Section 13 of Strategic Alliance Agreement, as applicable.

38.                               “Initial Transactions” means the Assignment and the Declaration of Trust.

39.                               “Intellectual Property” means all worldwide intellectual property and rights arising from or in respect of the following: all (a) inventions, discoveries, industrial designs,

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business methods, patents and patent applications (including provisional and Patent Cooperation Treaty applications), including continuations, divisionals, continuations-in-part, reexaminations and reissues, extensions, renewals and any patents that may be issued with respect to the foregoing; (b) trademarks, service marks, certification marks, collective marks, trade names, business names, assumed names, d/b/a’s, fictitious names, brand names, trade dress, logos, symbols, Internet domain names and corporate names, and general intangibles of a like nature and other indicia of origin or quality, whether registered, unregistered or arising by Law, and all applications, registrations, and renewals for any of the foregoing, together with the goodwill associated with and symbolized by each of the foregoing; (c) published and unpublished works of authorship in any medium, whether copyrightable or not (including databases and other compilations of information, computer software, source code, object code, algorithms, and other similar materials and Internet website content), copyrights and moral rights therein and thereto, and registrations and applications therefor, and all issuances, renewals, extensions, restorations and reversions thereof; and (d) confidential and proprietary information, trade secrets, and know-how, including methods, processes, business plans, schematics, concepts, software and databases (including source code, object code and algorithms), formulae, drawings, prototypes, models, designs, devices, technology, research and development and customer information and lists.

40.                               “Irish Takeover Rules” means the Rules in the Takeover Panel Act, 1997, 2007 (as amended).

41.                               “Key Patents” has the meaning set forth in Section 4.7(a) of this Agreement.

42.                               “Knowledge of Purchaser” means the knowledge, after reasonable inquiry, of the following individuals:  ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇.

43.                               “Knowledge of Seller” means the knowledge, after reasonable inquiry, of the following individuals:  ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇.

44.                               “Law” means any and all domestic (federal, state or local) or foreign laws, rules, regulations, statutes, orders, ordinance, judgments or decrees or other pronouncements by any Governmental Authority.

45.                               “Lock Box Account” means a lock box account that Seller may elect to establish from time to time, to receive the Royalty Interest payments from GGL, and from which the Beneficial Interest in Royalty Interest payments received would be paid into the Account.

46.                               “Lock Box Arrangement” means the contractual terms and conditions that govern the Lock Box Account.

47.                               “Losses” has the meaning set forth in Section 8.1 of this Agreement.

48.                               “MABA” means a bifunctional muscarinic antagonist-beta2 agonist.

49.                               “MABA ‘081” means (a) the MABA compound known as GSK961081, solely as a monotherapy (i.e., excluding GSK961081 in combination with any one or more other

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therapeutically active component(s)), and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems, in each case, with respect to only GSK961081 solely as a monotherapy (i.e., excluding GSK961081 in combination with any one or more other therapeutically active component(s)).

50.                               “MABA ‘081 Royalty Interest”:

(a)                                 Means Seller’s entitlement under the Strategic Alliance Agreement to receive the following payments during the Royalty Interest Term, subject to subsections (b), (c) and (d) of this definition:

(i)                                     royalty payments on any net sales worldwide of MABA ‘081 by or on behalf of GGL, pursuant to Section 6.3 of the Strategic Alliance Agreement;

(ii)                                  any interest on amounts referred to in clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the Strategic Alliance Agreement;

(iii)                               any Infringement Payments with respect to MABA ‘081 in lieu of the payments referred to in clause (a)(i) immediately above;

(iv)                              any Other Amounts with respect to MABA ‘081 in lieu of the payments referred to in clause (a)(i) immediately above.

(b)                                 The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to the reductions, deductions and offsets  in Sections 6.3, 6.4.1 and 6.9 of the Strategic Alliance Agreement.

(c)                                  The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to reduction, deduction, offset and exclusion from such royalties of any Cost-Sharing Deductions (without double counting).

(d)                                 The entitlement to the payments and amounts set forth in subsection (a) above of this definition does not include any (i) signing payments (including any signing payments pursuant to Section 6.1.1 of the Strategic Alliance Agreement), (ii) opt-in fees or payments for equity investments (including any payments from GGL to Seller pursuant to Sections 6.1.2 or 6.1.4 of the Strategic Alliance Agreement), (iii) milestone payments (including any milestone payments pursuant to Section 6.2 of the Strategic Alliance Agreement), or (iv) any other payments (other than those expressly identified in subsection (a) above of this definition), in the case of clauses (i), (ii), (iii) and (iv) of this clause (d), paid to Seller relating to MABA ‘081.

51.                               “Major Market Country” means each of Canada, France, Germany, Italy, Japan, Spain, the United Kingdom and the United States.

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52.                               “Material Action” means to file any insolvency, or reorganization case or proceeding, to institute proceedings to have Delaware Sub be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or insolvency proceedings against Delaware Sub, to file a petition seeking, or consent to, reorganization or relief with respect to Delaware Sub under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for Delaware Sub or a substantial part of its property, to make any assignment for the benefit of creditors of Delaware Sub, to admit in writing Delaware Sub’s inability to pay its debts generally as they become due, or to take action in furtherance of any of the foregoing.

53.                               “Meeting Deadline” shall have the meaning set forth in Section 6.8 of this Agreement.

54.                               “Minimum Percentage” means twenty-one percent (21%).

55.                               “Newco” means an English limited partnership, the limited partner of which shall initially be Seller and the general partner of which shall be an Affiliate of Seller.

56.                               “Newco Charter Documents” shall have the meaning set forth in Section 4.1 of this Agreement.

57.                               “Newco Partners” means the partners of Newco, each of which shall initially be United States persons or disregarded entities of a United States person for U.S. federal income tax purposes.

58.                               “Order” means any decree, order, judgment, ruling, writ, injunction, temporary restraining order or other formal order in any suit or proceeding by or with any Governmental Authority which has become final and nonappealable.

59.                               “Other Amounts” means (i) in respect of each of the ANORO Royalty Interest, BREO/RELVAR Royalty Interest, MABA ‘081 Royalty Interest and VI Monotherapy Royalty Interest, any proceeds (whether cash proceeds or otherwise) other than those in clauses (a)(ii) and (a)(iii) of the definition of each of the foregoing Royalty Interests as, if and when received by Seller in lieu of the royalty payments under clause (a)(i) of the definition of each of the foregoing Royalty Interests, including without limitation amounts received by Seller relating to any damages or penalties or following any court action or out-of-court settlement between Seller and GGL, and in all cases, subject to the reductions, deductions, offsets and exclusions set forth in clauses (b), (c) and (d) of the definition of each Royalty Interest, (ii) any amounts paid or payable to Newco pursuant to the first sentence of Section 2.4(c) of the Assignment Agreement, and (iii) if a Recharacterization Event (as defined in the Assignment Agreement) has occurred pursuant to the second sentence of Section 2.4(c) of the Assignment Agreement, the proceeds thereof, including any proceeds of assets realized upon foreclosure in connection therewith.

60.                               “Party” has the meaning set forth in the introductory paragraph of this Agreement.

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61.                               “Percentage” means twenty-one percent (21%).

62.                               “Permitted Encumbrances” means any of the following: (a) statutory Encumbrances for current taxes not yet due and payable, and (b) landlords’, carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s or other like Encumbrances arising in the ordinary course of business with respect to amounts not yet overdue or being contested in good faith by appropriate proceedings.

63.                               “Person” means any individual, corporation, limited-liability company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental body, or other entity.

64.                               “Purchase Price” shall have the meaning set forth in Section 2.4 of this Agreement.

65.                               “Purchaser” has the meaning set forth in the introductory paragraph of this Agreement.

66.                               “Purchaser Charter Documents” has the meaning set forth in Section 5.1 of this Agreement.

67.                               “Purchaser Disclosure Schedule” has the meaning set forth in Article V of this Agreement.

68.                               “Purchaser Material Adverse Effect” means any one or more of (a) a material adverse effect on the ability of Purchaser to consummate the Transactions and perform its obligations under this Agreement and (b) a material adverse effect on the validity or enforceability of this Agreement or the rights of Seller hereunder.

69.                               “Purchaser Indemnitees” has the meaning set forth in Section 8.1 of this Agreement.

70.                               “Required Shareholder Approval” means the affirmative vote of the majority of outstanding ordinary shares of Purchaser represented at a shareholders’ meeting where a quorum is present, as required pursuant to Rule 21.

71.                               “Royalty Interest” means (a) the ANORO Royalty Interest, (b) the BREO/RELVAR Royalty Interest, (c) the MABA ‘081 Royalty Interest, and (d) the VI Monotherapy Royalty Interest.

72.                               “Royalty Interest Product” means each of (a) ANORO, (b) BREO/RELVAR, (c) MABA ‘081 and (d) VI Monotherapy, and excluding, in each case, all Excluded Products.

73.                               “Royalty Interest Term” means, with respect to each Royalty Interest Product, the time period commencing on the Closing Date and ending, on a country-by-country and product-by-product basis, on the date that the “Term” (as defined in the Collaboration Agreement, with respect to ANORO, BREO/RELVAR and VI, and as defined in the Strategic Alliance Agreement, with respect to MABA ‘081) expires or terminates with respect to such Royalty Interest Product; provided that in the event that either the Collaboration Agreement or the Strategic Alliance Agreement is terminated and Seller remains entitled to Royalty Interest payments under Section 14.6 of the Collaboration

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Agreement or Section 14.5 of the Strategic Alliance Agreement, the Royalty Interest Term with respect to the relevant Royalty Interest Product shall be extended until the expiration or termination of such rights under Section 14.6 of the Collaboration Agreement and Section 14.5 of the Strategic Alliance Agreement, respectively.

74.                               “Rule 21” has the meaning set forth in Section 3.3(a)(i).

75.                               “Seller” has the meaning set forth in the introductory paragraph of this Agreement.

76.                               “Seller Charter Documents” has the meaning set forth in Section 4.1 of this Agreement.

77.                               “Seller Corporate Reorganization” means the separation of Seller’s businesses as described in Seller’s press release and related materials dated 25 April 2013, as it may be amended.

78.                               “Seller Disclosure Schedule” has the meaning set forth in Article IV of this Agreement.

79.                               “Seller Indemnitees” has the meaning set forth in Section 8.2 of this Agreement.

80.                               “Seller SEC Reports” means all reports, schedules, forms and statements filed by Seller with the United States Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

81.                               “Seller Material Adverse Effect” means any one or more of: (a) a material adverse effect on the ability of Seller to consummate the Transactions and perform its obligations under this Agreement, (b) a material adverse effect on the validity or enforceability of this Agreement or the rights of Purchaser hereunder, or (c) a material adverse effect on the Beneficial Interest.

82.                               “Specified Claim” means any allegation, claim, announcement, finding or determination that the Transaction Documents, Transactions or Seller’s or Newco’s negotiation, performance or disclosure of the Transaction Documents or the Transactions is or might be a breach of the GGL Agreements.

83.                               “Strategic Alliance Agreement” means that certain Strategic Alliance Agreement by and between Theravance, Inc. and Glaxo Group Limited dated March 30, 2004, as amended from time to time.

84.                               “Taxation” or “Tax” means all (i) forms of taxation whether direct or indirect and whether levied by reference to income, profits, gains, net wealth, net worth, equity, asset values, turnover, gross receipts, added value or other reference, and statutory, governmental, state, provincial, local government or municipal impositions, duties, contributions, rates and levies, whenever and wherever imposed (whether imposed by way of a deduction or withholding for or on account of tax or otherwise) and in respect of any Person, and all penalties, fines, levies, charges, costs, interest and other additional amounts relating thereto.

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85.                               “Tax Authority” means any taxing or other Governmental Authority (whether within or outside the United Kingdom) competent to impose, administer or collect any Taxation.

86.                               “Term” has the meaning set forth in Section 7.1 of this Agreement.

87.                               “Territory” means the entire world.

88.                               “Third Party” means any Person other than either Party or any of their respective Affiliates.

89.                               “Third-Party Claim” has the meaning set forth in Section 8.3(a) of this Agreement.

90.                               “Transactions” means the transactions contemplated by the Transaction Documents.

91.                               “Transaction Documents” means this Agreement, the ▇▇▇▇ of Sale, the Trust Agreement and the Assignment Agreement.

92.                               “Treaty” means the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United States of America for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and capital gains of 24 July 2001.

93.                               “Trust” means the trust declared pursuant to the Trust Agreement.

94.                               “Trust Agreement” means the Declaration of Trust to be entered into on the Closing Date among Seller, Newco and the other parties thereto substantially in the form attached hereto as Exhibit E.

95.                               “Trustee” means the trustee under the Trust Agreement.

96.                               “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state or the District of Columbia to the extent applicable to the perfection of security interests or filings in respect thereof.

97.                               “UMEC” means the long-acting muscarinic antagonist umeclidinium bromide (with the chemical structure as set forth in Attachment A-2) or an ester, salt or other noncovalent derivative thereof.

98.                               “VI” means the long-acting beta2 agonist vilanterol (with the chemical structure as set forth in Attachment A-3) or an ester, salt or other noncovalent derivative thereof.

99.                               “VI Monotherapy” means (a) VI, solely as a monotherapy (i.e., excluding VI in combination with any one or more other therapeutically active component(s)), and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems, in each case, with respect to only VI solely as a monotherapy (i.e., excluding VI in combination with any one or more other therapeutically active component(s)).

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100.                        “VI Monotherapy Royalty Interest”:

(a)                                 Means Seller’s entitlement under the Collaboration Agreement to receive the following payments during the Royalty Interest Term, subject to subsections (b), (c) and (d) of this definition:

(i)                                     royalty payments on any net sales worldwide of VI Monotherapy by or on behalf of GGL, pursuant to Section 6.3 of the Collaboration Agreement;

(ii)                                  any interest on amounts referred to in clause (a)(i) immediately above that is paid pursuant to Section 6.8 of the Collaboration Agreement;

(iii)                               any Infringement Payments with respect to VI Monotherapy in lieu of the payments referred to in clause (a)(i) immediately above; and

(iv)                              any Other Amounts with respect to VI Monotherapy in lieu of the payments referred to in clause (a)(i) immediately above.

(b)                                 The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to the reductions, deductions and offsets contemplated by Sections 6.3, 6.4.1 and 6.9 the Collaboration Agreement. The VI Reverse Milestone Payment Obligation shall remain the obligation of Seller, and shall not be a reduction, deduction, offset or exclusion from the royalty payments under subsection (a) above of this definition.

(c)                                  The entitlement to the payments and amounts set forth in subsection (a) above of this definition is subject to reduction, deduction, offset and exclusion from such royalties of any Cost-Sharing Deductions (without double counting).

(d)                                 The entitlement to the payments and amounts set forth in subsection (a) above of this definition does not include any (i) signing payments (including any signing payments pursuant to Section 6.1.1 of the Collaboration Agreement), (ii) one-time fees for new compounds contributed to the collaboration (including any one-time fee payments from GGL to Seller pursuant to Sections 6.1.3 or 6.1.4 of the Collaboration Agreement), (iii) milestone payments (including any milestone payments pursuant to Section 6.2 of the Collaboration Agreement), or (iv) any other payments (other than those expressly identified in subsection (a) above of this definition)  in the case of clauses (i), (ii), (iii) and (iv) of this clause (d), paid to Seller relating to VI Monotherapy.

101.                        “VI Reverse Milestone Payment Obligation” means Seller’s obligation to pay to GGL milestone payments in the event a product containing VI is successfully developed and commercialized, pursuant to Section 6.2.3 of the Collaboration Agreement.

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B.                                    INTERPRETATION.

(a)           When a reference is made in this Agreement to an “Article”, “Section” or “Schedule”, such reference shall be to an Article or Section of or Schedule to this Agreement unless otherwise indicated.

(b)           The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation” and shall not be construed to limit any general statement which it follows to the specific or similar items or matters immediately following it.

(c)           Neither Party shall be or be deemed to be the drafter of this Agreement for the purposes of construing this Agreement against the other Party.

(d)           All uses of the words “hereto”, “herein”, “hereof”, “hereby” and “hereunder” and similar expressions refer to this Agreement as a whole and not to any particular provision of this Agreement.

(e)           Unless otherwise specified in this Agreement, words in the singular include the plural and vice versa and words importing one gender include all genders.

(f)            Any reference to a Person shall also be its permitted successors and assigns.

(g)           Any references to a Law shall include any amendment or modification to such Law and any rules and regulations issued thereunder, whether such amendment or modification is made, or issuance of such rules and regulations occurs, before or after the date of this Agreement.

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FF CHEMICAL STRUCTURE

STATEMENT ON A NONPROPRIETARY NAME ADOPTED BY THE USAN COUNCIL:

CHEMICAL NAMES

1.              Androsta-1,4-diene-17-carbothioic acid, 6,9-difluoro-17-[(2-furanylcarbonyl)oxy]-11-hydroxy-16-methyl-3-oxo-, S-(fluoromethyl) ester, (6α,11β,16α,17α)-

2.              6α,9-difluoro-17-[[(fluoromethyl)sulfanyl]carbonyl]-11β-hydroxy-16α-methyl-3-oxoandrosta-1,4-dien-17α-yl furan-2-carboxylate

3.              (6α,11β,16α,17α)-6,9-difluoro-17-(((fluoromethyl)thio)carbonyl)-11-hydroxy-16-methyl-3-oxoandrosta-1,4-dien-17-yl-2-furancarboxylate

STRUCTURAL FORMULA

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UMEC CHEMICAL STRUCTURE

STATEMENT ON A NONPROPRIETARY NAME ADOPTED BY THE USAN COUNCIL

1. 1-Azoniabicyclo[2.2.2]octane, 4-(hydroxydiphenylmethyl)-1-[2-(phenylmethoxy)ethyl]-

2. 1-[2-(benzyloxy)ethyl]-4-(hydroxydiphenylmethyl)-1-azoniabicyclo[2.2.2]octane

STRUCTURAL FORMULA

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VI CHEMICAL STRUCTURE

STATEMENT ON A NONPROPRIETARY NAME ADOPTED BY THE USAN COUNCIL

1.                            Benzeneacetic acid, α,α-diphenyl-, compd. with (α1R)-α1-[[[6-[2-[(2,6-dichlorophenyl)methoxy]ethoxy]hexyl]amino]methyl]-4-hydroxy-1,3-benzenedimethanol (1:1)

2.                            4-{(1R)-2-[(6-{2-[(2,6-dichlorophenyl)methoxy]ethoxy}hexyl)amino]-1-hydroxyethyl}-2-(hydroxymethyl)phenol triphenylacetate

3.                            Triphenylacetic acid-4-{(1R)-2-[(6-{2-[(2,6-dichlorobenzyl)oxy]ethoxy}hexyl)amino]-1-hydroxyethyl}-2-(hydroxymethyl)phenol (1:1)

STRUCTURAL FORMULA

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EXHIBIT A

PRESS RELEASE

Theravance and Elan Enter Into a $1.0 Billion Royalty Participation Agreement

Theravance to receive $1.0 billion upfront payment upon closing

Elan to receive a 21% participation interest in potential future royalty payments associated with four respiratory programs

▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ — May 13, 2013 — Theravance, Inc. (NASDAQ: THRX) and Elan Corporation, plc (NYSE: ELN) today announced that they have entered into a royalty participation agreement wherein Elan will purchase a participation interest in potential future royalty payments related to four respiratory programs partnered with GlaxoSmithKline plc (GSK):  RELVAR™ ELLIPTA™/BREO™ ELLIPTA™, ANORO™ ELLIPTA™, MABA (Bifunctional Muscarinic Antagonist-Beta2 Agonist) monotherapy (GSK961081, or MABA ‘081), and vilanterol (VI) monotherapy.  Under the terms of the agreement, Elan will make a one-time cash payment of $1.0 billion to Theravance in exchange for a 21% participation interest in the potential future royalty payments from the four programs when, as and if received by Theravance.

“We are very excited to partner with Elan in a transaction that recognizes the significant value of four programs from our GSK collaborations targeted at respiratory disease,” said ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇, Theravance’s Chief Executive Officer.  “This agreement complements our strategy to facilitate and accelerate the return of capital to our stockholders and build value, consistent with our recently announced plan to separate Theravance into two entities, Royalty Management Company and Theravance Biopharma.”

Mr ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer of Elan commented, “This transaction, upon closing, will immediately diversify our business with an investment in four high quality and late stage clinical assets within a large and growing therapeutic area. This diversification should benefit our shareholders by spreading the inherent risk embedded in any one specific asset. In addition, the long term and future potential cash flow streams and net income will be shared with investors both directly - through a dividend pass through - and indirectly through overall after tax earnings.”

▇▇ ▇▇▇▇▇▇ added, “Being involved, even indirectly, with an important therapeutic area that addresses the needs of millions of patients who suffer from respiratory disease is particularly meaningful to all of us at Elan.”

RELVAR™ ELLIPTA™/BREO™ ELLIPTA™ (fluticasone furoate (FF)/vilanterol (VI)), ANORO™ ELLIPTA™ (umeclidinium bromide (UMEC)/VI) and VI monotherapy have been developed under the LABA collaboration with GSK.  For RELVAR™ ELLIPTA™/BREO™ ELLIPTA™ and VI, Theravance is entitled to receive royalties from GSK of 15% of the first $3.0 billion of combined annual global net sales, and 5% of combined annual global net sales above $3.0 billion.  If ANORO™ ELLIPTA™ is approved and commercialized, royalties on annual global net sales are upward tiering and range from the mid-single digits to 10%.  The transaction does not include any royalty participation interest associated with UMEC/VI/FF, an investigational medicine also in development under the LABA collaboration with GSK.

MABA ‘081 is an investigational medicine in development under the strategic alliance between Theravance and GSK.  If MABA ‘081 is successfully developed and commercialized as monotherapy, Theravance is entitled to receive royalties from GSK of between 10% and 20% of the first $3.5 billion of annual global net sales, and 7.5% of all annual global net sales above $3.5 billion.  The transaction does not include any royalty participation interest associated with MABA ‘081 in combination with any other therapeutically active component, including an inhaled corticosteroid, or any other MABA compound as monotherapy or in combination.

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The transaction is not subject to any material conditions, other than approval by Elan’s shareholders.  Elan plans to promptly prepare the required documentation to enable a shareholder vote, which Elan has agreed to hold within 35 days.  If approved by Elan’s shareholders, the parties expect the transaction to be consummated by the end of June 2013.

Theravance Tax Treatment and Use of Proceeds

Theravance does not expect to pay significant income taxes associated with the transaction.

As previously disclosed, Theravance intends to separate its biopharmaceutical operations and its late stage partnered respiratory assets into two independent publicly traded companies, referred to as Theravance Biopharma and Royalty Management Co, respectively.  We intend for Royalty Management Co to be the primary vehicle for the return of capital and that the proceeds from this transaction will facilitate and accelerate returns to its stockholders following the separation.  Theravance Biopharma will be primarily focused on the discovery, development and commercialization of small-molecule medicines in areas of significant unmet medical need. This transaction does not change the overall structure of the planned separation, including which assets are expected to be in each company.  Additionally, we do not plan to increase 2013 research and development spending above what was included in our 2013 expense guidance. Theravance is currently evaluating the optimal strategies to return capital to stockholders of Royalty Management Co following completion of the separation, including through dividends or the repurchase of shares and/or convertible debt.

Centerview Partners LLC is acting as financial advisor and Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP are acting as legal advisors to Theravance in connection with the transaction.

Evercore Partners and Ondra Partners are acting as financial advisors to Elan. Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and A&L Goodbody are acting as legal advisors to Elan in connection with the transaction.

Conference Call and Webcast Information

Theravance will discuss this announcement at 8:30 a.m. Eastern Daylight Time today. To participate in the live call by telephone, please dial (▇▇▇) ▇▇▇-▇▇▇▇ from the U.S., or (▇▇▇) ▇▇▇-▇▇▇▇ for international callers. Those interested in listening to the conference call live via the internet may do so by visiting Theravance’s web site at ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇. To listen to the live call, please go to the web site 15 minutes prior to its start to register, download, and install any necessary audio software.

A replay of the conference call will be available on Theravance’s web site for 30 days through June 12, 2013. An audio replay will also be available through 11:59 p.m. Eastern Daylight Time on May 20, 2013 by dialing (▇▇▇) ▇▇▇-▇▇▇▇ from the U.S., or (▇▇▇) ▇▇▇-▇▇▇▇ for international callers, and entering confirmation code 71715858.

For more information, please visit Theravance’s website at ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇.

About Four Respiratory Programs

RELVAR™ ELLIPTA™/BREO™ ELLIPTA™, ANORO™ ELLIPTA™, VI monotherapy and MABA monotherapy (GSK961081, or MABA ‘081), are assets developed in collaboration with GlaxoSmithKline plc (GSK).

In November 2002, Theravance entered into its LABA collaboration with GSK to develop and commercialize once-daily long-acting beta2 agonist (LABA) products for the treatment of chronic obstructive pulmonary disease (COPD) and asthma. For the treatment of COPD, the collaboration is developing two combination products: (1) RELVAR™ ELLIPTA™ or BREO™ ELLIPTA™ (FF/VI), an investigational once-daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (ICS), fluticasone furoate (FF) and (2) ANORO™ ELLIPTA™ (UMEC/VI), a once-daily investigational medicine combining a long-acting muscarinic antagonist (LAMA), umeclidinium

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bromide (UMEC), with a LABA, VI. For the treatment of asthma, the collaboration is developing FF/VI. BREO™ ELLIPTA™ 100/25 mcg is approved in the United States as an inhaled long-term, once-daily maintenance treatment of airflow obstruction in patients with COPD, including chronic bronchitis and/or emphysema. It is also indicated to reduce exacerbations of COPD in patients with a history of exacerbations.  RELVAR™ ELLIPTA™ for the treatment of COPD and asthma patients is currently under review by the European Medicines Agency (EMA) and Japan.  FF/VI is not approved or licensed in the European Union or anywhere outside of the United States.  ANORO™ ELLIPTA™ for the treatment of COPD patients is currently under review by the U.S. Food and Drug Administration, the EMA and Japan.  The Prescription Drug User Fee Act goal date for ANORO™ ELLIPTA™ is December 18, 2013.  ANORO™ ELLIPTA™ (UMEC/VI) is an investigational medicine and is not currently approved anywhere in the world.

In March 2004, Theravance entered into its strategic alliance with GSK. Under this alliance, GSK received an option to license exclusive development and commercialization rights to product candidates from certain of Theravance’s discovery programs on predetermined terms and on an exclusive, worldwide basis.  In 2005, GSK licensed Theravance’s MABA program for the treatment of COPD.  GSK961081 (‘081), the lead MABA, is an investigational, single molecule bifunctional bronchodilator with both muscarinic antagonist and beta2 receptor agonist activities.  Based on the results from a Phase 2b study, GSK and Theravance plan to advance ‘081 monotherapy into Phase 3 and the ‘081/FF combination into Phase 3-enabling studies, later in 2013.

Important Safety Information

BREO ELLIPTA is contraindicated in patients with severe hypersensitivity to milk proteins or who have demonstrated hypersensitivity to either fluticasone furoate, vilanterol, or any of the excipients.

BREO ELLIPTA should not be initiated in patients during rapidly deteriorating or potentially life-threatening episodes of COPD, or as rescue therapy for the treatment of acute episodes of bronchospasm, which should be treated with an inhaled, short-acting beta2-agonist.

BREO ELLIPTA should not be used more often than recommended, at higher doses than recommended, or in conjunction with other medications containing LABAs, as an overdose may result.

Oropharyngeal candidiasis has occurred in patients treated with BREO ELLIPTA.

An increase in the incidence of pneumonia has been observed in subjects with COPD receiving the fluticasone furoate/vilanterol combination, including BREO ELLIPTA 100 mcg/25 mcg, in clinical trials. There was also an increased incidence of pneumonias resulting in hospitalization. In some incidences these pneumonia events were fatal.

Patients who use corticosteroids are at risk for potential worsening of existing tuberculosis; fungal, bacterial, viral, or parasitic infections; or ocular herpes simplex. A more serious or even fatal course of chickenpox or measles may occur in susceptible patients.

Particular care is needed for patients who have been transferred from systemically active corticosteroids to inhaled corticosteroids because deaths due to adrenal insufficiency have occurred in patients with asthma during and after transfer from systemic corticosteroids to less systemically available inhaled corticosteroids.

Hypercorticism and adrenal suppression may occur with very high dosages or at the regular dosage of inhaled corticosteroids in susceptible individuals.

Caution should be exercised when considering the coadministration of BREO ELLIPTA with long-term ketoconazole and other known strong CYP3A4 inhibitors because increased systemic corticosteroid and cardiovascular adverse effects may occur.

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Inhaled medicines can produce paradoxical bronchospasm, which may be life-threatening. Vilanterol, the LABA in BREO ELLIPTA, can produce clinically significant cardiovascular effects in some patients. Decreases in bone mineral density have been observed with long-term administration of products containing inhaled corticosteroids, as have glaucoma, increased intraocular pressure, and cataracts.

The most common adverse reactions (>3% and more common than in placebo) reported in two 6-month clinical trials with BREO ELLIPTA (and placebo) were nasopharyngitis, 9% (8%); upper respiratory tract infection, 7% (3%); headache, 7% (5%); and oral candidiasis, 5% (2%). In addition to the events reported in the 6-month studies, adverse reactions occurring in >3% of the subjects treated with BREO ELLIPTA in two 1-year studies included COPD, back pain, pneumonia, bronchitis, sinusitis, cough, oropharyngeal pain, arthralgia, hypertension, influenza, pharyngitis, diarrhea, peripheral edema, and pyrexia.

BREO ELLIPTA is not indicated for the relief of acute bronchospasm or the treatment of asthma. The safety and efficacy of BREO ELLIPTA in patients with asthma have not been established. Long-acting beta2-adrenergic agonists (LABAs), such as vilanterol, one of the active ingredients in BREO ELLIPTA, increase the risk of asthma-related death. A placebo-controlled trial with another LABA (salmeterol) showed an increase in asthma-related deaths in subjects receiving salmeterol. This finding with salmeterol is considered a class effect of all LABAs, including vilanterol.

About Elan

Elan Corporation, plc is a biotechnology company, headquartered in Ireland, committed to making a difference in the lives of patients and their families by dedicating itself to bringing innovations in science to fill significant unmet medical needs that continue to exist around the world. Elan shares trade on the New York and Irish Stock Exchanges. For additional information about Elan, please visit ▇▇▇.▇▇▇▇.▇▇▇.

As required by the Irish Takeover Rules, the Directors of Elan accept responsibility for the information contained in this announcement. To the best of their knowledge and belief (having taken all reasonable care to ensure such is the case); the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

Any holder of 1% or more of any class of relevant securities of Elan may have disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2007 (as amended).

About Theravance

Theravance is a biopharmaceutical company with a pipeline of internally discovered product candidates and strategic collaborations with pharmaceutical companies. Theravance is focused on the discovery, development and commercialization of small molecule medicines across a number of therapeutic areas including respiratory disease, bacterial infections, and central nervous system (CNS)/pain. Theravance’s key programmes include: RELVAR™ ELLIPTA™ or BREO™ ELLIPTA™ (FF/VI), ANORO™ ELLIPTA™ (UMEC/VI) and MABA (Bifunctional Muscarinic Antagonist-Beta2 Agonist), each partnered with GlaxoSmithKline plc, and its oral Peripheral Mu Opioid Receptor Antagonist program.  By leveraging its proprietary insight of multivalency to drug discovery, Theravance is pursuing a best-in-class strategy designed to discover superior medicines in areas of significant unmet medical need. For more information, please visit Theravance’s web site at ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇.

THERAVANCE®, the Theravance logo, and MEDICINES THAT MAKE A DIFFERENCE® are registered trademarks of Theravance, Inc.

RELVAR™, BREO™, ANORO™ and ELLIPTA™ are trademarks of the GlaxoSmithKline group of companies. The use of the brand names ANORO™ and RELVAR™ has not yet been approved by any regulatory authority.

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Theravance Forward-Looking Statements

This press release contains and the conference call will contain certain “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives and future events. Theravance intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Examples of such statements include statements relating to the expected timing of the Elan shareholder vote on the transaction and the outcome of such vote, the expected timing for consummating the transaction if Elan shareholder approval is obtained, the effect of the transaction if it is consummated on the strategies, plans and objectives of Theravance, the timing, manner and amount of anticipated potential returns of capital to stockholders if the transaction and/or Theravance’s previously announced planned separation is consummated, the timing, plans and objectives of and the possible impact of the transaction on Theravance’s previously announced, planned separation, the status and timing of clinical studies, data analysis and communication of results, statements regarding the potential benefits and mechanisms of action of drug candidates, statements concerning the timing of seeking regulatory approval of product candidates, statements concerning the enabling capabilities of Theravance’s approach to drug discovery and its proprietary insights, statements concerning expectations for product candidates through development and commercialization and projections of the tax effects of the transaction and other financial items. These statements are based on the current estimates and assumptions of the management of Theravance as of the date of this press release and the conference call and are subject to risks, uncertainties, changes in circumstances, assumptions and other factors that may cause the actual results of Theravance to be materially different from those reflected in the forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others, risks related to delays or difficulties encountered in obtaining, or the failure to obtain, the approval of Elan’s shareholders for the transaction, the possibility that intervening events could arise which could alter the timing, or the ability to consummate, the transaction, the anticipated separation of Theravance into two independent companies or the intended return of capital to stockholders, the risk that third parties could challenge the transaction, the risk that Theravance’s net operating loss may not be available to offset taxes from the transaction, the potential that results of clinical or non-clinical studies indicate product candidates are unsafe or ineffective, our dependence on third parties in the conduct of our clinical studies, delays or failure to achieve regulatory approvals for product candidates and risks of collaborating with third parties to develop and commercialize products. These and other risks are described in greater detail under the heading “Risk Factors” contained in Theravance’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on May 1, 2013 and the risks discussed in our other periodic filings with the SEC. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Theravance assumes no obligation to update its forward-looking statements.

Elan Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the fact that they use words such as “anticipate”, “estimate”, “project”, “target”, “intend”, “plan”, “will”, “believe”, “expect” and other words and terms of similar meaning in connection with any discussion of future financial performance or events. Among the factors that could cause actual results to differ materially from those described or projected herein are the following: risks related to delays or difficulties encountered in obtaining, or the failure to obtain, the approval of Elan’s shareholders for the transaction; the possibility that intervening events could arise which could alter the timing, or the ability to consummate the transaction if Elan shareholder approval is obtained; the risk that third parties could challenge the transaction, even if the transaction is approved by Elan shareholders and consummated; risks related to the development, approval and commercialization of the products or potential products that underlie the royalty participation interest; whether this agreement will provide diversification benefits to Elan shareholders; whether any cash flow streams will result from this agreement; as Elan’s principal source of revenue may remain a royalty on sales of Tysabri, the potential of Tysabri, which may be severely constrained by increases in the incidence of serious adverse events (including death) associated with Tysabri (in particular, by increases in the incidence rate for cases of PML), or by competition from existing or new therapies (in particular, oral therapies), and the potential for the successful development and commercialization of

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products, whether internally or by acquisition, especially given the separation of the Prothena business which left Elan with no material pre-clinical research programs or capabilities; Elan’s ability to maintain sufficient cash, liquid resources, and investments and other assets capable of being monetized to meet its liquidity requirements; the success of our development activities, and research and development activities in which Elan retains an interest, including, in particular, the impact of the announced discontinuation of the development of bapineuzumab intravenous in mild to moderate Alzheimer’s disease; failure to comply with anti-kickback, bribery and false claims laws in the United States, Europe and elsewhere; difficulties or delays in manufacturing and supply of Tysabri; trade buying patterns; the impact of potential biosimilar competition, the trend towards managed care and health care cost containment, including Medicare and Medicaid; legislation and other developments affecting pharmaceutical pricing and reimbursement (including, in particular, the dispute in Italy with respect to Tysabri sales), both domestically and internationally; failure to comply with Elan’s payment obligations under Medicaid and other governmental programs; exposure to product liability (including, in particular, with respect to Tysabri) and other types of lawsuits and legal defense costs and the risks of adverse decisions or settlements related to product liability, patent protection, securities class actions, governmental investigations and other legal proceedings; Elan’s ability to protect its patents and other intellectual property; claims and concerns that may arise regarding the safety or efficacy of Elan’s product candidates; interest rate and foreign currency exchange rate fluctuations and the risk of a partial or total collapse of the euro; governmental laws and regulations affecting domestic and foreign operations, including tax obligations; whether Elan is  deemed to be an Investment Company or a Passive Foreign Investment Company; general changes in United States and International generally accepted accounting principles; growth in costs and expenses; and the impact of acquisitions, divestitures, restructurings, product withdrawals and other unusual items. A further list and description of these risks, uncertainties and other matters can be found in Elan’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, and in its Reports of Foreign Issuer on Form 6-K filed with the SEC. Elan assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

(THRX-G)

Contact Information:

Theravance, Inc.

▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

Senior Vice President and Chief Financial Officer

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Elan Corporation, plc
Investor Relations:
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EXHIBIT B

FORM OF ▇▇▇▇ OF SALE

▇▇▇▇ OF SALE (this “▇▇▇▇ of Sale”), is made and effective as of [    ] [    ], 2013, between THERAVANCE, INC., a Delaware corporation (“Seller”), and ELAN CORPORATION PLC, an Irish public limited company (“Purchaser”).  Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Participation Agreement (as defined below).

WITNESSETH

WHEREAS, Seller and Purchaser have entered into a Royalty Participation Agreement dated as of May 12, 2013 (the “Participation Agreement”), pursuant to which Seller has agreed to sell, grant, assign, put over, transfer and convey to Purchaser, and Purchaser has agreed to purchase, acquire and accept from Seller, all right, title and interest in and to the Beneficial Interest.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein and in the Participation Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and as contemplated by Section 3.2 of the Participation Agreement, the Parties hereto agree as follows:

1.                                      Conveyance, Assignment and Acceptance of Assigned Rights.  Seller hereby sells, grants, assigns, puts over, transfers and conveys to Purchaser all right, title and interest in the Beneficial Interest, and Purchaser hereby purchases, acquires and accepts such sale, grant, assignment, put over, transfer and conveyance.

2.                                      Governing Law.  THIS ▇▇▇▇ OF SALE AND ALL ACTIONS, PROCEEDINGS OR COUNTERCLAIMS (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS ▇▇▇▇ OF SALE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF EXCEPT AS SET FORTH IN SECTIONS 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

3.                                      Counterparts.  This ▇▇▇▇ of Sale may be executed in any number of counterparts.  Each counterpart will be an original, and all counterparts will together constitute one and the same instrument.  Delivery of an executed counterpart via PDF or other electronic delivery shall be considered the same as delivery of a manually executed counterpart.

4.                                      Successors and Assigns.  This ▇▇▇▇ of Sale shall be binding upon and inure to the benefit of Seller and Purchaser and their permitted successors and assigns.

5.                                      Severability.  If any of the covenants, agreements or terms of this ▇▇▇▇ of Sale is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining

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covenants, agreements or terms of this ▇▇▇▇ of Sale and will in no way affect the validity, legality or enforceability of the remaining ▇▇▇▇ of Sale.  Upon such determination that any covenant, agreement or term is invalid, illegal or unenforceable, this ▇▇▇▇ of Sale shall be deemed modified so as to effect the original intent of the Parties as closely as possible in order that the Transactions be consummated as originally contemplated to the fullest extent consistent with applicable Law.

6.                                      Entire Agreement.  This ▇▇▇▇ of Sale is subject to all of the terms, conditions and limitations set forth in the Participation Agreement, and together with the Participation Agreement, and the other documents and agreements referenced in Section 9.8 of the Participation Agreement, sets forth the entire agreement and understanding between the Parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings relating to such subject matter.

7.                                      Conflicts.  Notwithstanding anything to the contrary contained in this ▇▇▇▇ of Sale, in the event of any conflict between the terms of this ▇▇▇▇ of Sale and the terms of the Participation Agreement, the terms of the Participation Agreement shall control.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties hereto have set their hands by their authorized representatives as of the year and date first indicated above.

EXHIBIT C

FORM OF UCC FINANCING STATEMENT

EXHIBIT A TO UCC1 FINANCING STATEMENT

I.  This FINANCING STATEMENT covers the following collateral:

TWENTY-ONE PERCENT (21%) UNDIVIDED BENEFICIAL INTEREST IN (1) CERTAIN PAYMENT OBLIGATIONS UNDER SECTIONS 6.3, 6.8 AND 13.4 OF THAT CERTAIN COLLABORATION AGREEMENT, DATED NOVEMBER 14, 2002, BETWEEN TAURUS AND GOLIATH (2) CERTAIN PAYMENT OBLIGATIONS UNDER SECTIONS 6.3, 6.8 AND 13.4 OF THAT CERTAIN STRATEGIC ALLIANCE AGREEMENT, DATED MARCH 30, 2004, BETWEEN TAURUS AND GOLIATH, AND ALL PROCEEDS THEREOF (THE “COLLATERAL”):

It is intended by the Debtor and the Secured Party that all right, title and interest of the Debtor in and to the Collateral is being conveyed to the Secured Party under the transactions between such parties, and the use of the terms “Debtor,” “Secured Party” and “Collateral” shall not be construed to evidence a contrary intent, nor shall this FINANCING STATEMENT constitute an admission or acknowledgment by Debtor, or Secured Party or any other person that the transactions between Debtor and Secured Party create only a security interest in the foregoing property.

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EXHIBIT D

FORM OF ASSIGNMENT AGREEMENT

ASSIGNMENT AGREEMENT

between

THERAVANCE, INC.

and

[NEWCO]

Dated as of [ ] [ ], 2013

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i

ii

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ASSIGNMENT AGREEMENT

ASSIGNMENT AGREEMENT, dated as of [    ] [    ], 2013 (this “Agreement”), between THERAVANCE, INC., a Delaware corporation (“Seller”), and [NEWCO], an English limited partnership (“Newco”; and each of Seller and Newco, a “Party” and together, the “Parties”).

BACKGROUND

A.                                    Seller is party to certain drug research, development and commercialization agreements with GGL, referred to herein as the GGL Agreements (each as defined herein), pursuant to which Seller is entitled to certain royalties, milestone payments and other payments in connection with the development and commercialization of products under the GGL Agreements.

B.                                   Seller wishes to sell to Newco, and Newco wishes to acquire, a participation interest in certain royalty payments (but excluding (i) any rights of any kind under the GGL Agreements (other than the Assignment Interest) and (ii) any milestone payments and other payments) that Seller may receive from GGL pursuant to the GGL Agreements with respect to certain products, subject to the terms and conditions of this Agreement and in compliance with the terms and conditions of the GGL Agreements, but not assign or otherwise transfer to Newco any rights to royalty payments, or any other rights, under any of the GGL Agreements (other than the Assignment Interest).

ARTICLE I

DEFINITIONS AND INTERPRETATION

Capitalized terms used but not otherwise defined in this Agreement are defined in Appendix A to this Agreement.  Appendix A also contains rules of interpretation applicable to this Agreement.

ARTICLE II

ASSIGNMENT OF ASSIGNMENT INTEREST

Section 2.1            Assignment of Assignment Interest.

(a)        Seller hereby sells, grants, assigns, puts over, transfers and conveys to Newco the Assignment Interest, free and clear of all Encumbrances other than Permitted Encumbrances (the “Assignment”).

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(b)        In consideration for Assignment, and simultaneously with the execution of this Agreement, Newco is entering into the Trust Agreement, pursuant to which Newco is appointing the Trustee to hold in trust the Trust Property (as defined in the Trust Agreement) in favor of the Seller (as beneficiary) (“Declaration of Trust”).

(c)        For the avoidance of doubt, Newco is not acquiring any right or interest, including any royalty payment rights (other than the Assignment Interest) under any GGL Agreement.  In no circumstances will the Assignment Interest be based on:

(i)    any royalty or other payments received by Seller pursuant to the GGL Agreements based on or relating to sales of Royalty Interest Products which occur prior to the date hereof;

(ii)   any royalty or other payments received by Seller pursuant to any of the GGL Agreements based on or relating to sales of Royalty Interest Products which occur at any time after the end of the Royalty Interest Term with respect to any Royalty Interest Product in any country;

(iii)  any royalty or other payments received by Seller   pursuant to any of the GGL Agreements based on or relating to sales of any Excluded Products, whether before, during or after the Royalty Interest Term; or

(iv)  any non-monetary consideration provided to Seller pursuant to the terms of the GGL Agreements with respect to the Royalty Interest Products, subject to the terms of Section 6.10 of this Agreement.

Section 2.2            Exclusion of GGL Agreement Rights.  It is understood and agreed by the Parties that, notwithstanding anything to the contrary in the Transaction Documents, Seller shall retain all of its rights and interests in, and no rights or interests are being sold, granted, assigned, put over, transferred or conveyed by Seller to Newco (other than the Assignment Interest) under, any of the GGL Agreements or this Agreement.

Section 2.3            No Obligations Transferred.  Notwithstanding anything to the contrary in this Agreement, the sale, grant, put over, assignment, transfer and conveyance of the Assignment Interest shall not transfer to Newco, or make Newco subject to, any obligation or liability of Seller under the GGL Agreements, except as required to comply with the GGL Agreements (including the confidentiality obligations therein).  For the avoidance of doubt, the foregoing shall not (a) affect Seller’s or Newco’s rights under this Agreement or modify the obligations Newco and Seller have under this Agreement or (b) affect any liability of either Party to the other under the provisions of Article VIII hereof.

Section 2.4            Intent; Savings Clause.

(a)        This Agreement is intended to effect a sale of the Assignment Interest by Seller to Newco and, immediately after giving effect to the transfer contemplated by Section 2.1, Seller will have no further interest (legal or equitable) in any of the Assignment Interest.  The Seller hereby authorizes the filing under the UCC of a financing statement in the form attached hereto as Exhibit A with respect to the sale of the Assignment Interest by Seller to

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Newco, and any continuation statements (including amendments to effect such continuation) required under the UCC with respect thereto reasonably requested by Newco (subject to confidentiality obligations under the GGL Agreements) in order to evidence such sale.

(b)        If, notwithstanding Section 2.4(a), the transfer of the Assignment Interest pursuant to this Agreement (taken together with the Declaration of Trust) is characterized as a collateral transfer for security or as a financing transaction (a “Recharacterization Event”), Seller intends that Newco have a first priority, perfected security interest in, and lien on, the Assignment Interest to secure an obligation of Seller to pay to Newco an amount (the “Seller Secured Amount”) equal to the Assignment Interest.  Accordingly, if a Recharacterization Event occurs, Seller shall be deemed to have granted, and Seller does hereby grant, a security interest in, to and under the Assignment Interest and all proceeds thereof, whether now owned or existing or hereafter acquired, in each case to secure the obligation of the Seller set forth in Section 2.4(c).

(c)        If a Recharacterization Event has occurred, Seller agrees to pay or cause to be paid to Newco all amounts that would have been required to be paid to Newco if the Recharacterization Event had not occurred; such payments to be made when, as and if payments of the Assignment Interest are received from GGL.  The maximum amount payable by Seller to Newco pursuant to this Section 2.4 shall be the Seller Secured Amount.  If Seller fails to pay to Newco any such amounts, (i) Newco may exercise all rights and remedies of a secured party under the relevant UCC (including the rights of a secured party obtaining a lien under Section 9-608 of the relevant UCC) and (ii) Seller may exercise all of the rights of a debtor granting a lien under the relevant UCC (including the rights of a debtor granting a lien under Section 9-623).

ARTICLE III

CLOSING

Section 3.1            Closing.  The closing of the Transactions (the “Closing”) will take place simultaneously with the execution of this Agreement by Seller and Newco, at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP; ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇; ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.

Section 3.2            Delivery of Trust Agreement.  At the Closing, Newco and Seller shall deliver to each other the executed Trust Agreement duly executed on behalf of Seller, Newco and the other parties thereto.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as disclosed in the separate disclosure letter which has been delivered by Seller to Newco prior to the execution of this Agreement (the “Seller Disclosure Schedule”) (each of which disclosures shall be effective with respect to (i) the corresponding sections and subsections of this Article IV, and (ii) any other section or subsection of this Article IV, but only if the relevance of that reference as an exception to (or a disclosure for purposes of) such section

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or subsection would be reasonably apparent to a reasonable person who has read that reference and such representations and warranties), Seller hereby represents and warrants to Newco as of the date of this Agreement:

Section 4.1            Organization.  Seller is a corporation duly organized, validly existing and in good standing, under the Laws of the state of Delaware.  Seller has made available to Newco true, correct and complete copies of its charter and bylaws, in each case as amended to the date hereof (the “Seller Charter Documents”).  All Seller Charter Documents are in full force and effect.  Seller is not in violation of the Seller Charter Documents, except as would not have, individually or in the aggregate, a Seller Material Adverse Effect.

Section 4.2            Power, Authorization and Enforceability.  Seller has all necessary corporate power and authority to execute and deliver the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder, and to consummate the Transactions to which it is a party.  The execution, delivery and performance by Seller of the Transaction Documents to which it is a party and the consummation by Seller of the Transactions to which it is a party have been duly and validly authorized by all necessary corporate action of Seller, and no other corporate proceedings on the part of Seller are necessary to authorize the execution, delivery and performance of this Agreement or to consummate such Transactions.  This Agreement has been duly and validly executed and delivered by Seller and, assuming it is duly and validly executed and delivered by Newco, shall be a legal and valid binding obligation of Seller, enforceable in accordance with its terms, subject to applicable Laws affecting creditors’ rights generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity.

Section 4.3            No Conflicts or Violations.  None of the execution and delivery by Seller of the Transaction Documents to which it is a party, the consummation by Seller of the Transactions to which it is a party, or Seller’s compliance with such Transaction Documents will (a) conflict with or violate the Seller Charter Documents, (b) constitute a breach or default by Seller under any of the GGL Agreements, (c) constitute a breach or default under any agreement (other than the GGL Agreements) to which Seller or any of its Subsidiaries is a party or by which any of its or their property or assets are bound, (d) require Seller to make any filing with or obtain any permit, authorization, consent or approval of any Governmental Authority or other Person, or (e) violate any Law or Order to which Seller or the Assignment Interest is subject, except, in the case of Sections 4.3(b), (c), (d) and (e), as would not reasonably be expected to result in a Seller Material Adverse Effect.

Section 4.4            Proceedings.  As of the date hereof, there is no action, suit, proceeding or, to the Knowledge of Seller, investigation before any Governmental Authority, court or arbitrator pending or, to the Knowledge of Seller, threatened in writing against Seller or its Subsidiaries relating to the GGL Agreements or the Assignment Interest, except as would not reasonably be expected to result in a Seller Material Adverse Effect.

Section 4.5            GGL Agreements.

(a)        Validity and Enforceability.  Each of the GGL Agreements is a legal, valid and binding obligation, in full force and effect, enforceable in accordance with its terms in

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all material respects, of Seller and, to the Knowledge of Seller, of GGL, subject to applicable Laws affecting creditors’ rights generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity.

(b)        Breach.  Seller is not in breach of any of the GGL Agreements in any material respect.

(c)        Assignment.  Seller has not assigned to any Person any of the GGL Agreements since their initial dates of execution, in whole or in part, except as contemplated herein.

(d)        Other.

(i)    GGL does not have any right to unilaterally amend any GGL Agreement in any manner which would or would reasonably be expected to result, individually or in the aggregate, in a Seller Material Adverse Effect.

(ii)   The information publicly disclosed, as publicly amended and supplemented, by Seller in the Seller Exchange Act Reports regarding the GGL Agreements and the Royalty Interest Products, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such information, in light of the circumstances in which it was disclosed, not misleading.

Section 4.6            Contractual Rights to Royalty Interest.  Seller (i) is the exclusive owner of Seller’s entire right and interest in, to and under the GGL Agreements and the Royalty Interest, free and clear of all Encumbrances other than Permitted Encumbrances and (ii) has not assigned or granted to any Third Party any right or interest (including payments or proceeds) in or to any Royalty Interest beneficially or otherwise.

Section 4.7            Intellectual Property.  To the Knowledge of Seller, except as would not reasonably be expected to have a Seller Material Adverse Effect:

(a)        there are no pending litigations, interferences, reexaminations, post-grant proceedings or oppositions in any Major Market Country involving any patents or patent applications owned by Seller and that cover the composition of matter of any of the Royalty Interest Products (collectively, the “Key Patents”);

(b)        the Key Patents that have been granted are valid and enforceable in all material respects;

(c)        there is no Person who is or claims to be an inventor under any of the Key Patents who is not a named inventor thereof;

(d)        Seller has not received written notice of any claim by any Person challenging the ownership or the validity or enforceability of the Key Patents, or asserting that

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the manufacture, importation, sale, offer for sale or use of any of the Royalty Interest Products infringes such Person’s patents or other intellectual property rights;

(e)        no Third Party patent rights have been, are or currently would be, but for an infringement safe harbor, infringed by the manufacture, importation, sale, offer for sale or use of any of the Royalty Interest Products;

(f)        no Person is infringing any of the Key Patents in any material respect; and

(g)        all fees necessary to maintain in effect the issued Key Patents have been paid as and when due.

Section 4.8            UCC Matters.  The Seller’s exact legal name is, and during the five (5) years prior to the date hereof has been, “Theravance, Inc.”.  The principal place of business of the Seller is, and during the five (5) years prior to the date hereof has been, located in South San Francisco.  The jurisdiction of organization of the Seller is, and has been during the five (5) years prior to the date hereof, located in Delaware.  During the five (5) years prior to the date hereof, the Seller has not been the subject of any merger or limited partnership or other reorganization in which its identity or status was materially changed, except in each case when it was the surviving or resulting entity.

Section 4.9            No Implied Representations and Warranties.  Newco acknowledges and agrees that: (i) other than the representations and warranties of Seller specifically contained in this Article IV, there are no representations or warranties of Seller or any other Person, and Seller hereby disclaims all other representations and warranties, whether  express, statutory or implied, in connection with this Agreement or the Transactions, including with respect to the Assignment Interest, the GGL Agreements, the Royalty Interest Products, the Key Patents or any other Intellectual Property or data relating to the Royalty Interest Products including patents and patent applications and other Intellectual Property owned by GGL, or the Transactions, and (ii) Newco does not rely on, and Seller shall have no liability in respect of, any representation or warranty not specifically set forth in this Article IV.  Without limiting the foregoing, but subject to Section 4.5(d)(ii), Newco acknowledges and agrees that (a)(i) the GGL Agreements generally impose confidentiality obligations on information relating to or generated in connection with those agreements and performance thereunder, and, accordingly, Newco has made its own investigation and assessment of the Assignment Interest, the Royalty Interest Products, the GGL Agreements, the Key Patents and any other Intellectual Property related to the Royalty Interest Products, including patents and patent applications and other Intellectual Property owned by GGL, and the Transactions, that Newco is entering into this Agreement based on such investigation and assessment and that Newco has not relied on and specifically waives any representation, warranty, description or statement, express or implied, set forth in any advertising, marketing literature or other documentation or materials concerning the GGL Agreements, the Assignment Interest, the Royalty Interest Products, the Key Patents and any other Intellectual Property related to the Royalty Interest Products including patents and patent applications and other Intellectual Property owned by GGL, and (ii) Newco is not relying on, and shall have no remedies in respect of, any implied warranties whatsoever, including as to the future amount or potential amount of the Assignment Interest, the creditworthiness of GGL or

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any of its Affiliates or any other matter, and (b) except as expressly set forth in any representation or warranty in this Article IV (as modified by the Seller Disclosure Schedule), Seller shall have no liability for losses or damages pursuant to this Agreement (or otherwise) with respect to any information, documents or materials furnished or made available to Newco or any of its Affiliates in any data room, presentation, interview or in any other form or manner relating to the Transactions or the GGL Agreements.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF NEWCO

Except as disclosed in the separate disclosure letter which has been delivered by Newco to Seller prior to the execution of this Agreement (the “Newco Disclosure Schedule”) (each of which disclosures shall be effective with respect to (i) the corresponding sections and subsections of this Article V, and (ii) any other section or subsection of this Article V, but only if the relevance of that reference as an exception to (or a disclosure for purposes of) such section or subsection would be reasonably apparent to a reasonable person who has read that reference and such representations and warranties), Newco hereby represents and warrants to Seller as of the date of this Agreement:

Section 5.1            Organization.  Newco is a limited liability partnership duly organized and validly existing under the laws of England and Wales.  Newco has made available to Seller true, correct and complete copies of Newco’s organizational documents (the “Newco Charter Documents”).  All Newco Charter Documents are in full force and effect.  Newco is not in violation of the Newco Charter Documents, except as would not have, individually or in the aggregate, a Newco Material Adverse Effect.

Section 5.2            Power, Authorization and Enforceability.  Newco has all necessary partnership power and authority to execute and deliver the Transaction Documents to which it is a party, to perform its obligations thereunder, and to consummate the Transactions to which it is a party.  The execution, delivery and performance by Newco of the Transaction Documents to which it is party and the consummation by Newco of the Transactions to which it is a party has been duly and validly authorized by all necessary partnership action of Newco, and no other partnership proceedings on the part of Newco are necessary to authorize the execution, delivery and performance of such Transaction Documents or to consummate such Transactions.  This Agreement has been duly and validly executed and delivered by Newco and, assuming this Agreement is duly and validly executed and delivered by Seller, shall be a legal and valid binding obligation of Newco, enforceable in accordance with their respective terms, subject to applicable Laws affecting creditors’ rights generally and, as to enforcement, to general principles of equity, regardless of whether applied in a proceeding at law or in equity.

Section 5.3            No Conflicts or Violations.  None of the execution and delivery by Newco of the Transaction Documents to which it will be a party, the consummation by Newco of the Transactions to which it is a party, or Newco’s compliance with such Transaction Documents will (a) conflict with or violate the Newco Charter Documents, (b) constitute a breach or default under any agreement to which Newco or any of its Subsidiaries is a party or by which any of its or their property or assets are bound, (c) require Newco to make any filing with or obtain any

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permit, authorization, consent or approval of any Governmental Authority or other Person, or (d) violate any Law or Order to which Newco is subject, except, in the case of Sections 5.3(b), (c) and (d), as would not reasonably be expected to result in a Newco Material Adverse Effect.

Section 5.4            Proceedings.  There is no action, suit, proceeding or, to the Knowledge of Newco, investigation before any Governmental Authority, court or arbitrator pending or, to the Knowledge of Newco, threatened in writing against Newco or its Affiliates relating to the Transactions, except as would not reasonably be expected to result in a Newco Material Adverse Effect.

Section 5.5            No Implied Representations and Warranties.  Seller acknowledges and agrees that, other than the representations and warranties of Newco specifically contained in this Article V, there are no representations or warranties of Newco or any other Person either expressed or implied with respect to the Assignment Interest or the Transactions, and that it does not rely on, and Newco shall have no liability in respect of, any representation or warranty not specifically set forth in this Article V.

ARTICLE VI
COVENANTS

Section 6.1            Payment of Assignment Interest.

(a)        The Parties shall work in good faith to negotiate the terms of the Lock Box Arrangement that are reasonably acceptable to the parties and shall cooperate fully in implementing the Lock Box Arrangement.  The parties anticipate that the Lock Box Arrangement will provide for the establishment of a bank account not within the dominion and control of the Seller into which GGL shall be instructed to make payments in respect of the Assignment Interest and from which the financial institution in control of the Lock Box Account will disburse such amounts to the Account when, as and if any such amounts become payable.  Notwithstanding the foregoing, the Parties hereby expressly agree that Seller shall have fully satisfied the requirements of this Assignment Agreement by delivering to GGL a written instruction to make all payments in respect of the Assignment Interest into the Account; such instruction to be revocable only upon completion of the Lock Box Arrangement.  Upon implementation of the Lock Box Arrangement and the establishment of the Lock Box Account, the Seller shall irrevocably instruct GGL to make any and all payments in respect of the Assignment Interest into the Lock Box Account.  Notwithstanding the foregoing, to the extent Seller receives any amounts in respect of the Assignment Interest from GGL, Seller shall, within two (2) Business Days after such receipt remit, by wire transfer of immediately available funds in United States Dollars to the Account. All such payments are subject to withholding for Taxes, levies and other duties as applicable under the GGL Agreement.

(b)        In the event that GGL reduces, deducts, offsets or excludes from royalty payments made to Seller in respect of sales of Royalty Interest Products any amounts that GGL claims Seller owes to GGL (i) related to the Royalty Interest, the Transactions or any of the Transaction Documents (including any deduction or withholding for Taxes), and Seller disputes any such reductions, deductions, offsets or exclusions, Seller shall notify Newco (to the extent not prohibited under the GGL Agreements) of such dispute and, upon resolution (if any) of such

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dispute and payment of such disputed amount by GGL to Seller, Seller shall instruct GGL to make a payment in respect of the Assignment Interest into the Account with respect to such disputed amount, (ii) related to the Royalty Interest and (A) there is no dispute between GGL and Seller as to the amount of the royalty payment due in respect of a Royalty Interest Product under the GGL Agreements, (B) there is no dispute between GGL and Seller as to the appropriate amount of the reductions, deductions, offsets or exclusions from such royalty payment and (C) Seller nonetheless consents to a reduction, deduction, offset or exclusion from such royalty payment of an amount in excess of the appropriate reduction, deduction, offset or exclusion amount, then Seller shall pay to the Account an amount equal to such agreed to reduction, deduction, offset or exclusion in excess of such appropriate amount of reductions, deductions, offsets and exclusions multiplied by the Percentage, or (iii) unrelated to the Royalty Interest, the Transactions or any of the Transaction Documents, then, Seller shall pay to the Account an amount equal to the amount of such reduction, deduction, offset or exclusion multiplied by the Percentage.

(c)        To the extent that any amount other than payments of the Assignment Interest is deposited by GGL in the Account, Newco shall, within two (2) Business Days after becoming aware thereof (but in no event prior to receipt of such amount by Newco from the Account), remit such amount, by wire transfer of immediately available funds in United States Dollars to Seller.

(d)        Newco acknowledges and agrees that Seller is not guaranteeing the performance or payment by GGL of its obligations under the GGL Agreements, and without limiting the foregoing, Newco shall have no recourse to Seller under this Agreement or otherwise due to GGL’s failure to perform its obligations under or breach of the GGL Agreements.

(e)        To the extent that Seller incurs any out-of-pocket costs and expenses under the GGL Agreements in connection with the Royalty Interest or brings suit or other action against GGL to enforce Seller’s rights or GGL’s obligations under the GGL Agreements with respect to or to the extent affecting the Royalty Interest, Seller shall be entitled to receive from the Trustee pursuant to Section 7.1 of the Trust Agreement an amount equal to the product of (x) the Percentage multiplied by (y) such out-of-pocket costs and expenses actually incurred by Seller and not reimbursed by GGL pursuant to the GGL Agreements (“Cost-Sharing Deductions”) without duplication (after giving effect to all actions taken under the other Transaction Documents and the Participation Agreement).  In the event that any amounts then in the Account are insufficient to pay in full the Cost-Sharing Deductions, then Newco shall, promptly upon demand from Seller, pay Seller the extent of any such insufficiency.  To the extent Seller is subsequently reimbursed by GGL for such Cost-Sharing Deductions, Seller shall deposit into the Account an amount equal to the product of (x) the Percentage multiplied by (y) the amount of such reimbursement.

Section 6.2            Tax Matters.

(a)        Seller shall be entitled to deduct and withhold from the amounts paid or delivered in connection with the Transactions any amounts that Seller is required to deduct and withhold with respect to any such deliveries and payments under the Internal

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Revenue Code of 1986, as amended, or any provision of state, local, or non-U.S. Law.  To the extent that Seller withholds such amounts and remits such withheld amounts to the applicable Governmental Authority, such withheld amounts shall be treated as having been paid to or on behalf of Newco.  If Seller determines that it is required by Law to deduct and withhold any amount as described in this Section 6.2(a), Seller shall notify Newco of any such requirement as soon as reasonably practical after such determination is made by Seller.

(b)        To the extent not prohibited by the GGL Agreements, Seller agrees to use its commercially reasonable efforts to provide in a timely manner such cooperation or assistance, (including by providing any necessary tax forms or other documents) as may be reasonably requested by Newco (at the sole cost of Newco) at any time after the date of this Agreement, so long as the cooperation or assistance could not reasonably be expected to prejudice in any material respect the legal or commercial position of Seller, in order to reduce or eliminate any amounts deducted or withheld pursuant to Section 6.2(a) or any amounts deducted or withheld by GGL on a Royalty Interest payment under the GGL Agreements.

Section 6.3            GGL Agreements.

(a)        Seller shall comply in all material respects with its obligations under the GGL Agreements.

(b)        Seller agrees that it will not, without Newco’s prior written consent, (i) consent to any termination of the GGL Agreements with respect to the Royalty Interest Products, (ii) consent to any amendment of the provisions of the GGL Agreements that implement the formula for calculating the royalties payable under the Royalty Interest or (iii) impose an Encumbrance on the Assignment Interest.

(c)        Newco acknowledges and agrees that, except for the express covenants contained in the Transaction Documents, Seller shall have any obligation or liability, whether express or implied, in connection with the exercise of Seller’s rights and performance of its obligations under the GGL Agreements and that neither Newco nor any other person shall have any claim of any kind against Seller based on or arising out of Seller’s performance under or in connection with the GGL Agreements, it being understood that Seller shall not be liable or have any obligation with respect to allocations of resources, scope, intensity and duration of efforts, and decisions and judgments made in connection with development and commercialization (including any acts or omissions that result in, or increase the likelihood of, greater or lesser commercial success) (i) with respect to, or as among, any Royalty Interest Products, or (ii) as among any one or more Royalty Interest Products, on the one hand, and any Excluded Products, other products or therapeutically active components, on the other hand.

(d)        The Parties hereto acknowledge and agree (and expressly and irrevocably disclaim any right to the contrary) that, notwithstanding any other provision of this Agreement or any other Transaction Document to the contrary, Newco has the nonexclusive right, but no obligation, to bring any enforcement action against GGL under any of the GGL Agreements, and neither the Trustee nor the Beneficiary shall have any third party beneficiary rights (expressed, implied or otherwise) in connection with the GGL Agreements.  Any such enforcement action by Newco requires the consent of the general manager of Newco.

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Section 6.4            Confidentiality.

(a)        Definition.  “Confidential Information” means all information (whether written or oral, or in electronic or other form, and whether furnished before or after the date of this Agreement) disclosed or made available to Newco by or on behalf of Seller concerning, or relating in any way, directly or indirectly, to this Agreement, the Transactions or the Royalty Interest, including (i) this Agreement,  including all terms and conditions hereof, (ii) any royalty information, assignments, notices, requests, correspondence or other information furnished pursuant to this Agreement, and any other reports, data, materials, notices, correspondence or documents of any kind relating in any way, directly or indirectly, to this Agreement, the Royalty Interest or the intellectual property, compounds or products giving rise to the Royalty Interest, (iii) any inventions, devices, improvements, formulations, discoveries, compositions, ingredients, patents, patent applications, know-how, processes, trial results, research, developments or any other intellectual property, trade secrets or information involving or relating in any way, directly or indirectly, to the Royalty Interest or the compounds or products giving rise to the Royalty Interest, and (iv) any other material proprietary and confidential information, in whatever form.

(b)        Exclusions.  Confidential Information will not include information which:

(i)    at or prior to the time of disclosure by Seller was known to Newco through lawful means and is not under any obligation of confidentiality, as evidenced by Newco’s written records;

(ii)   at or after the time of disclosure by Seller becomes generally available to the public through no act or omission on the part of Newco in violation of any obligation of confidentiality or any other legal, contractual or fiduciary obligation to Seller, GGL or any of their respective Affiliates, as evidenced by documents that were generally published prior to any disclosure of such information by Seller;

(iii)  is developed by Newco independent of, and without any use of or access or reference to Confidential Information, as evidenced by Newco’s written records; or

(iv)  Newco receives from a Third Party free to make such disclosure free of any obligation of confidentiality and without breach of any other legal obligation; provided that such Third Party, had the right to disclose such information to Newco (free of any obligation of confidentiality and without any legal, contractual or fiduciary obligation to Seller, GGL or any of their respective Affiliates) as evidenced by Newco’s written records.

(c)        Requirements.  Newco acknowledges the confidential and proprietary nature of the Confidential Information and agrees that it shall not discuss, reveal, or disclose the Confidential Information to any other Person, or use any Confidential Information for any purpose, other than in connection with the performance of this Agreement, in each case,

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without the prior written consent of Seller.  Newco agrees to take all reasonable precautions (no less rigorous than Newco takes with respect to its own comparable confidential and proprietary information) to prevent unauthorized or inadvertent disclosure of the Confidential Information.

(d)        Disclosure, Legal Obligations.  Notwithstanding the foregoing, Newco may disclose such Confidential Information to its officers, directors, employees, accountants, counsel, consultants, advisors and agents who need to know such information in connection with Newco’s evaluation and performance of the Transactions and to its lenders or other financing sources in connection with obtaining financing for Newco’s operations, so long as (i) such Persons are informed by Newco of the confidential nature of such Confidential Information and agree to treat such information confidentially in accordance with the requirements of this Section 6.4 for the benefit of Seller and (ii) Newco shall be liable for any breach or violation of such obligations by any such Person.  Newco may also disclose Confidential Information to the extent required by Law, including the applicable rules of any stock exchange that are binding on Newco, provided that Newco shall use its reasonable best efforts to notify Seller of such requirement (to the extent permitted by applicable Law) promptly and sufficiently in advance of any such disclosure so that Seller may seek an appropriate protective order or other appropriate remedy.  Newco shall use its reasonable best efforts to  limit such disclosures to that portion of the information legally required to be disclosed and shall use its reasonable best efforts to seek confidential treatment for such information if so requested by Seller.  In addition, the Parties will coordinate in advance with each other in connection with the redaction of certain provisions of this Agreement with respect to any SEC or foreign equivalent filings of this Agreement, and each Party shall use its reasonable best efforts to seek confidential treatment for such terms if so requested by the other Party.

(e)        Return of Information.  Newco will, at the request of Seller, after the expiration of the Term or effective termination of this Agreement (i) promptly return all Confidential Information held or used by Newco in whatever form, or (ii) at the discretion of Seller, promptly destroy all such Confidential Information, including all copies thereof, and those portions of all documents (e.g., analyses, summaries, etc.) that incorporate or are based on Confidential Information; provided, however, that (x) Newco’s legal department may retain one copy of such information for legal compliance purposes only for so long as required by applicable Law or Newco’s bona fide pre-existing record-keeping policy, and (y) notwithstanding anything else in this Agreement to the contrary, the confidentiality restrictions imposed hereby shall continue to apply to such information, and shall survive any termination of this Agreement, for so long as such information is retained.  At the request of Seller, Newco will promptly certify that it has complied in full with this Section 6.4

Section 6.5            Information Rights.  Newco hereby acknowledges the confidentiality obligations imposed on Seller by the GGL Agreements.  Notwithstanding any other provision of this Agreement, Newco agrees that Seller shall not, and shall not be required to, disclose any information in violation of its obligations under the GGL Agreements.  Unless prohibited under the GGL Agreements (as determined in Seller’s sole reasonable discretion), Seller shall use its reasonable efforts to provide to Newco information reasonably requested by Newco that is material to the Assignment Interest (it being understood that Seller shall not be required to undertake litigation or incur significant expense pursuant to this Section 6.4).

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Section 6.6            Books and Records.  For accounting purposes only, each of the Parties will treat the sale and assignment to Newco of the Assignment Interest pursuant to Section 2.1 as a sale and assignment on its books and records to the extent permitted under generally accepted accounting principles in the United States.

Section 6.7            Public Announcement.  Except as required by applicable Law and subject to the final two (2) sentences of this Section 6.5, neither Party will make any public announcement of any information regarding this Agreement without the prior written approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed; provided that the foregoing restriction shall not restrict Seller from making any public announcement of any information regarding the Royalty Interest Products.  Once any statement is approved for disclosure by the Parties or information is otherwise made public in accordance with the preceding sentence, either Party may make a subsequent public disclosure of the contents of such statement without further approval of the other Party.  Notwithstanding the foregoing, within sixty (60) days following the Closing, appropriate representatives of the Parties will meet and agree upon a process and principles for reaching timely consensus on how the Parties will make public disclosure concerning this Agreement.

Section 6.8            UCC Matters.  The Seller shall file and maintain in effect all UCC filings, and shall take such other actions under the UCC, as may be necessary to protect the validity and perfection of Newco’s Assignment Interest under the UCC.  The Seller will not change its location (within the meaning of Sections 9-301 and 9-307 of the applicable UCC) or its legal name without at least ten (10) days’ prior written notice to the Newco.  In the event that the Seller desires to so change its location or change its legal name, the Seller will make any required filings and will deliver to the Newco copies of all such required filings with the filing information duly noted thereon by the office in which such filings were made.

Section 6.9            Royalty Interest Disclosures.  Seller shall comply with its obligations under applicable Law to make prompt disclosure to the public of material information concerning the Royalty Interest.

Section 6.10          Non-Cash Consideration.  In the event a Royalty Interest is paid other than in cash, Seller shall pay to the Account an amount in cash equal to the fair market value, as reasonably determined by Seller, of the Percentage of such non-cash consideration as promptly as reasonably practicable following the determination of the fair market value of such non-cash consideration.

ARTICLE VII

TERM

Section 7.1            Term.  The term of this Agreement shall commence on the date hereof and end, with respect to each Royalty Interest Product, upon expiration or termination (including any early termination) of the Royalty Interest Term with respect to such Royalty Interest Product (the “Term”).

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ARTICLE VIII

INDEMNIFICATION

Section 8.1            Indemnification by Seller.  Subject to the terms and conditions of this Article VIII, Seller shall indemnify Newco and its officers, directors, managers, agents and representatives (but expressly excluding any Trustee or Beneficiary) (collectively “Newco Indemnitees”) from and against any and all direct damages, losses, claims, costs, liabilities, demands or expenses (including reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (collectively, “Losses”) suffered or incurred by any such Newco Indemnitee arising from:

(a)        any breach of any representation or warranty made by Seller in this Agreement (provided, however, that for purposes of determining whether a breach of the representations and warranties set forth in Sections 4.1, 4.3, 4.4, 4.5(a), 4.5(b), 4.5(d)(i) and 4.7 has occurred for purposes of this Section 8.1(a) only, a violation, conflict, breach, default, failure or the existence of a state of facts or circumstances shall be deemed to be material or to have a Seller Material Adverse Effect if it changes the royalty rate payable in respect of the Royalty Interest Products in a manner adverse to Newco); and

(b)        any breach of any covenant of Seller contained in this Agreement.

Section 8.2            Indemnification by Newco.  Subject to the terms and conditions of this Article VIII, Newco shall indemnify Seller, its Affiliates and each of their respective officers, directors, managers, agents and representatives (collectively “Seller Indemnitees”) from and against any and all Losses suffered or incurred by any such Seller Indemnitee arising from:

(a)        any breach of any representation or warranty made by Newco in this Agreement; and

(b)        any breach of any covenant of Newco contained in this Agreement.

Section 8.3            Indemnification Procedure.

(a)        Third-Party Claims.

(i)    Notice of Third-Party Claims. A Party seeking indemnification (the “Indemnified Party”) with respect to any claim or demand made by any Person against the Indemnified Party (a “Third-Party Claim”) shall promptly notify the other Party (the “Indemnifying Party”) in writing (including in such notice a brief description of the claim for indemnification and the Loss, including damages sought or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified Party) of any claim for indemnification, provided that failure to give such notice shall not relieve the Indemnifying Party of any liability hereunder except to the extent the Indemnifying Party is materially prejudiced by such failure.

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(ii)   Defense of Third-Party Claims.  The Indemnifying Party shall be entitled to participate in the defense of the Third-Party Claim and, if it so chooses, to assume the defense thereof, at its own expense, with counsel selected by the Indemnifying Party; provided that such counsel is not reasonably objected to by the Indemnified Party.  If the Indemnifying Party assumes the defense thereof, the Indemnifying Party (1) shall not be liable to the Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof, and (2) shall permit the Indemnified Party to participate in, but not control, the defense of any such action or suit through counsel chosen by the Indemnified Party, provided that such counsel is not reasonably objected to by the Indemnifying Party and the fees and expenses of such counsel shall be borne by the Indemnified Party.  The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnified Party in the defense of a Third-Party Claim for any period during which the Indemnifying Party has not assumed the defense thereof (other than during the period prior to the time the Indemnified Party shall have notified the Indemnifying Party of such Third-Party Claim).

(iii)  Cooperation.  The Indemnified Party shall, if requested by the Indemnifying Party, give reasonable assistance to  and cooperate with the Indemnifying Party in defense of any claim.  The Indemnifying Party shall reimburse the Indemnified Party for any Third Party reasonable legal expenses directly incurred from providing such assistance and cooperation.  Such assistance and cooperation shall include (1) the retention of and the provision to the Indemnifying Party of records and information that are reasonably relevant to such Third-Party Claim and (2) the making available of employees on a mutually convenient basis for providing additional information and explanation of any material provided hereunder.  The Indemnifying Party shall have the right to consent to the entry of judgment with respect to, or otherwise settle, a Third-Party Claim with the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld; provided that the Indemnified Party may withhold its consent if any such judgment or settlement imposes an unreimbursed monetary or continuing non-monetary obligation on such Indemnified Party or does not include an unconditional release of such Indemnified Party and its Affiliates from all liability in respect of claims that are the subject matter of the indemnified claim.  Regardless of whether the Indemnifying Party shall have assumed defense of a Third-Party Claim, the Indemnified Party shall not be entitled to be indemnified pursuant to this Article VIII if the Indemnified Party shall settle such Third-Party Claim without the prior written consent of the Indemnifying Party.

(b)        Claims by a Party.  In order for an Indemnified Party to be entitled to any indemnification under this Article VIII in respect of Losses that do not arise out of or involve a Third Party Claim, the Indemnified Party must notify the Indemnifying Party promptly in writing (including in such notice a brief description of the claim for indemnification and the Loss, including damages sought or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified Party); provided, that, the failure to promptly provide such

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notice shall not affect the indemnification provided under this Article VIII except to the extent that the Indemnifying Party has been actually prejudiced as a result of such failure.

Section 8.4            Claims Period for Breach of Representations and Warranties.  The representations and warranties contained in this Agreement shall not survive the Closing; however, claims for breach of the: (a) representations and warranties contained in this Agreement (other than any claims for breach of the Fundamental Representations) may be made at any time following the Closing and up to and including the date that is the first anniversary of the date hereof; and (b) Fundamental Representations may be made at any time following the Closing and prior to the expiration of the applicable statute of limitations.  In no event shall any Party hereto have any liability for any breach of a representation or warranty set forth in this Agreement unless the other Party hereto shall have delivered a notice to such Party, pursuant to Section 8.3 prior to the deadline applicable to the making of such claim set forth in the preceding sentence.

Section 8.5            Limitations on Indemnification.

(a)        Notwithstanding anything herein to the contrary, Seller shall have no liability to Newco under this Agreement for any action taken by Seller or any failure by Seller to take any action pursuant to Article VI in compliance with any written instructions of Newco or with the prior written consent of Newco.

(b)        Seller or Newco as applicable, shall not be obligated to indemnify any Newco Indemnitee or Seller Indemnitee, as applicable, if the Losses incurred by such Person arise from the gross negligence, fraud or willful misconduct of Newco or Seller, as applicable, or their respective Affiliates, officers, directors, managers, agents and representatives (acting in their capacity as such).

(c)        Notwithstanding anything in this Agreement to the contrary, Seller shall not have any liability under: (i) Section 8.1 with respect to any individual item (or any series of related items) if the Loss related thereto is less than US$750,000, and such items shall not be aggregated for purposes of Section 8.5(c)(ii); (ii) Section 8.1(a) unless the aggregate liability for all Losses suffered by the Newco Indemnitees thereunder exceeds US$15,000,000, and then only to the extent of such excess; or (iii) Section 8.1 in excess of the amount by which (x) the One Billion United States Dollars (US$1,000,000,000) exceeds (y) the aggregate amount of payments made to Newco in respect of the Assignment Interest theretofore received or receivable by Newco, in the aggregate; provided, however, that the cap set forth in clause (iii) shall not be less than Two Hundred Million Dollars (US$200,000,000) except with respect to any breach for which indemnification is sought that arises from or relates to a Specified Claim.  Notwithstanding anything to the contrary in any Transaction Document, for any Loss for which Seller must indemnify any Newco Indemnitee under this Agreement, the amount paid by Seller shall count toward the liability cap under both this Agreement and under the Participation Agreement and in no event shall Seller have any liability for Losses under the this Agreement arising out of the same matter or set of facts or circumstances as any claims made, or for which a claim could be made, under the Participation Agreement.

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(d)        Notwithstanding anything in this Agreement to the contrary, Newco shall not have any liability under: (i) Section 8.2 with respect to any individual item (or any series of related items) if the Loss related thereto is less than US$750,000, and such items shall not be aggregated for purposes of Section 8.5(d)(ii); (ii) Section 8.2(a) unless the aggregate liability for all Losses suffered by the Seller Indemnitees thereunder exceeds US$15,000,000, and then only to the extent of such excess or (iii) after the Closing, Section 8.2 in excess of US$1,000,000,000.

(e)        The amount of any Losses payable under this Article VIII by an Indemnifying Party shall be reduced by the amount, if any, of any tax benefit available to the Indemnified Party by reason of such Losses or the payment thereof and by any insurance proceeds or other recovery from a Third Party received by the Indemnified Party (net of any expenses incurred by such Indemnified Party in procuring such recovery) in connection with the matter out of which such Losses arise.  If the Indemnified Party receives any proceeds subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall reimburse the Indemnifying Party as promptly as practicable thereafter for any payment made by such Indemnifying Party pursuant to such Indemnifying Party’s indemnification obligations hereunder up to the amount received pursuant to this Article VIII by the Indemnified Party from such Indemnifying Party (net of any expenses incurred by such Indemnified Party in procuring such recovery).

(f)        For purposes of determining the amount of any Losses payable pursuant to Sections 8.1 or 8.2 (but not, for the avoidance of doubt, for the purposes of determining the existence of a breach), any qualification as to materiality, Seller Material Adverse Effect or Newco Material Adverse Effect contained in the applicable underlying representation or warranty shall be disregarded.

(g)        To the extent Seller is obligated to indemnify Purchaser for any Losses arising out of the same occurrence or omission in respect of which Seller is liable to Newco under the provisions of this Article VIII, Seller shall indemnify Purchaser pursuant to the Participation Agreement with respect to such occurrence or omission, and Newco’s claims with respect to such occurrence or omission shall be deemed to have been satisfied in respect thereof following such indemnification of Purchaser.

Section 8.6            Exclusive Remedy.  Notwithstanding anything to the contrary in the Transaction Documents, the Parties hereto acknowledge and agree that this Article VIII (including Section 8.4 and Section 8.5) shall provide the Parties’ sole and exclusive remedy with respect to any matter or claim arising out of, relating to, or in connection with, the Transaction Documents and the Transactions, except (i) for fraud or willful misconduct and (ii) injunctive relief or claims for specific performance pursuant to Section 9.4 (Specific Performance).

Section 8.7            Disclaimer of Consequential Damages.

(a)        EXCEPT WITH RESPECT TO (i) A PARTY’S FRAUD OR WILLFUL MISCONDUCT, OR (ii) LOSSES ACTUALLY PAID TO A THIRD PARTY PURSUANT TO A THIRD-PARTY CLAIM IN ACCORDANCE WITH ARTICLE VIII, TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT SHALL EITHER

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PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTIES FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INVESTMENT LOSSES, LOST PROFITS, LOSS OF DATA, OR LOSS OF USE ARISING IN ANY MANNER OUT OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS HOWEVER CAUSED WHETHER BY NEGLIGENCE, BREACH OF CONTRACT, TORT OR OTHERWISE AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF ANY SUCH DAMAGES.

(b)        THE PARTIES HAVE AGREED THAT THE LIABILITY LIMITATIONS SPECIFIED IN SECTION 8.5 AND THIS SECTION 8.7 WILL SURVIVE AND APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED ITS ESSENTIAL PURPOSE.

ARTICLE IX

MISCELLANEOUS

Section 9.1            Assignment.

(a)        Assignment by Seller.  Seller may not assign or otherwise transfer this Agreement without the prior written consent of Newco, except that Seller may assign this Agreement, in whole or in part, to (A) an acquiror of Seller or a successor to all or substantially all of the assets of Seller, whether by merger, sale of stock, sale of assets or other similar transaction, (B) with respect to any Royalty Interest Product, an Applicable Successor to Seller relating to such Royalty Interest Product, whether by merger, sale of stock, sale of assets or other similar transaction or (C) an Affiliate of Seller for so long as such Affiliate remains an Affiliate of Seller and if Seller guarantees the performance of this Agreement by such Affiliate.

(b)        Assignment by Newco.  Newco may not assign or transfer this Agreement or the Assignment Interest, in whole or in part, without the prior written consent of Seller.

(c)        Seller Corporate Reorganization.  Notwithstanding anything to the contrary herein, Seller shall be permitted to assign this Agreement and the rights and obligations hereunder in respect of the MABA ‘081 Royalty Interest, in whole or in part, without Newco’s consent, to a Third Party pursuant to the Seller Corporate Reorganization.

(d)        Successors and Assigns.  Subject to the terms and conditions of this Section 9.1, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their permitted successors and assigns.  Any purported assignment or other transfer in violation of this Section 9.1 shall be void ab initio and of no force or effect.

Section 9.2            Further Assurances.  From time to time, as and when reasonably requested by any Party, each Party shall execute and deliver, or cause to be executed and delivered, all such documents, certificates, agreements and instruments, and shall take, or cause to be taken, all such further or other actions, as are reasonably necessary and appropriate to carry out all of the provisions of this Agreement, or to consummate the Transactions.

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Section 9.3            Notices.  All notices, requests, demands, consents, waivers or other communications to or from either Party to the other Party must be in writing and will be deemed to have been given

(a)        upon delivery, including upon confirmation by the carrier of delivery (which may be in electronic form), if delivered by hand or mailed via overnight or express mail service or by courier,

(b)        in the case of a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient or other fax confirmation of receipt, or

(c)        in the case of an email, when receipt is confirmed by telephone or reply email from the recipient,

addressed as follows (or to such other address or addresses as the Seller or the Newco may from time to time designate by notice given in accordance with this Section 9.3:

if to Seller:

Theravance, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attention of: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President & General Counsel

with a copy to:

Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Attention of:  Amr ▇▇▇▇▇▇

if to the Newco:

[Newco]

[Address]

Attention of:

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Fax No.:

E-mail:

with a copy to:

[Address]

Attention of:

Fax No.:

E-Mail:

Section 9.4            Specific Performance.  Each of the Parties hereto acknowledges that the other Party may have no adequate remedy at law if the first Party fails to perform any of its non-monetary obligations under this Agreement.  In such event, each of the Parties agrees that the other Party shall have the right, in addition to any other rights it has (whether at law or in equity), to pursue equitable remedies such as an injunction or specific performance of this Agreement without necessity of posting any bond or undertaking in connection therewith.  This remedy is separate and apart from any other remedy the Parties may have under this Agreement.

Section 9.5            Title; Headings; Captions.  The title, headings and captions in this Agreement are included for convenience only and will not affect the meaning or interpretation of any provision of this Agreement.

Section 9.6            Independent Contractors.  The Parties recognize and agree that each is operating as an independent contractor and not as an agent or fiduciary of the other.  Notwithstanding any provision of this Agreement which may indicate otherwise, it is the specific intent of the Parties that this Agreement and the relationship created hereby is not, nor shall it be deemed to be, a separate entity, joint venture or partnership or any similar arrangement, nor shall any master/servant, employer/employee or principal/agent relationship be created between the Parties.

Section 9.7            Third-Party Beneficiaries.  Except to the extent expressly contemplated with respect to Seller Indemnitees and Newco Indemnitees in Article VIII, this Agreement is for the sole benefit of Seller and Newco and their permitted successors and assigns, and nothing herein expressed or implied shall give or be construed to give to any Person (including Trustee or Beneficiary), other than the parties hereto and such permitted successors and assigns, any legal or equitable rights hereunder.  Notwithstanding anything herein to the contrary, with respect to any indemnification claim made pursuant to Article VIII, Seller or Newco shall make such claim on behalf of the applicable Seller Indemnitee or Newco Indemnitee, as applicable, and such Person (unless such Person is Seller or Newco, itself) shall not be entitled to directly make such claim against Newco or Seller, as applicable.

Section 9.8            Entire Agreement.  This Agreement, along with the Appendices, Exhibits, Schedules, Seller Disclosure Letter and Newco Disclosure Letter and other attachments hereto, sets forth the entire agreement and understanding between the Parties hereto with respect

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to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings relating to such subject matter.

Section 9.9            Amendment and Supplementation.  This Agreement may be amended, modified or supplemented only by a written agreement signed by both Parties.

Section 9.10          No Waiver.  Any waiver of, or consent to depart from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Party giving it, and only in the specific instance and for the specific purpose for which it has been given.  No failure or delay of either Party in exercising any power, right or remedy under this Agreement will operate as a waiver.  No single or partial exercise of any power, right or remedy precludes any other or further exercise of such power, right or remedy or the exercise of any other power, right or remedy.

Section 9.11          Severability.  If any of the covenants, agreements or terms of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining covenants, agreements or terms of this Agreement and will in no way affect the validity, legality or enforceability of the remaining Agreement. Upon such determination that any covenant, agreement or term is invalid, illegal or unenforceable, this Agreement shall be deemed modified so as to effect the original intent of the Parties as closely as possible in order that the Transactions be consummated as originally contemplated to the fullest extent consistent with applicable Law.