LICENSE AND COOPERATION AGREEMENT W I T N E S S E T H:

EXHIBIT 10.16

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

LICENSE AND COOPERATION AGREEMENT

            This License and Cooperation Agreement (the "Agreement") is made and entered into this 28 ^th day of June, 2000, by and between Merz + Co. GmbH & Co., a limited partnership with a limited company as its general partner organized and existing under the laws of Germany, with its principal business office located at Eckenheimer Landstrasse 100-104, D-60318 Frankfurt/Main, Germany ("Merz"), and Forest Laboratories Ireland Limited, a corporation organized and existing under the laws of the Republic of Ireland, with its principal business address located at Clonshaugh Industrial Estate, Clonshaugh, Dublin 17, Republic of Ireland ("Licensee").

W I T N E S S E T H:

            WHEREAS, Merz is the owner of certain United States patents for the application and use of Memantine relating to the treatment of various forms of dementia, and is currently marketing and distributing Memantine, under the name "Akatinol Memantine" for the treatment of such dementia in Germany; and

            WHEREAS, Merz has conducted and is currently conducting clinical trials of Memantine for the treatment of vascular dementia and Alzheimer's disease in the United States and Europe; and

            WHEREAS, Licensee wishes to acquire a license to use the Merz patents and certain Merz know-how for the manufacture, marketing, distribution, sale and use of the Contract Products (as defined herein) within the Territory (as defined herein) solely for the treatment of vascular dementia and Alzheimer's disease; and

            WHEREAS, Merz is willing to grant to Licensee a license to use the Merz patents and certain Merz know-how for the manufacture, marketing, distribution, sale and use of the Contract Products, in accordance with the terms and conditions, and subject to the limitations, of this Agreement; and

            WHEREAS, the parties wish to define the terms of their cooperation in securing Regulatory Approvals (as defined herein) for Memantine, including the Contract Products, for the treatment of vascular dementia and Alzheimer's disease, and for the marketing and distribution of the Contract Products within the Territory.

            NOW, THEREFORE, in consideration of the foregoing, the parties to this Agreement do agree as follows.

Article 1: Definitions

            For purposes of this Agreement, the following terms shall have the following meanings:

            1.1       An "Affiliate" of one of the parties to this Agreement shall mean and include any person, firm, corporation or other entity: (i) more than fifty percent (50%) of the voting stock or other equity interest is owned, directly or indirectly, by that party; (ii) which owns, directly or indirectly, more than fifty percent (50%) of the voting stock or other equity interest of that party; or (iii) more than fifty percent (50%) of the voting stock or other equity interest thereof is owned, directly or indirectly, by a person, firm, corporation or other entity that owns, directly or indirectly, more than fifty percent (50%) of the voting stock or other equity interest of that party.

            1.2       "Applicable Laws" shall mean and include all laws, regulations, rules, decrees, judicial and administrative orders, and governmental actions, policies and requirements having the force of law in the Territory.

            1.3       Merz' "Confidential Information" shall mean and include all of the Merz Know-How, and all other data and information, not in the public domain, relating to the Contract Products, the Indications, or the business, affairs, research and development activities, results of clinical trials, national and multinational regulatory proceedings and affairs, finances, plans, contractual relationships and operations of Merz, or to any of Merz' Intellectual Property Rights.

            1.4       The "Contract Products" shall mean and include all pharmaceutical products, manufactured by Licensee hereunder, as mono-preparations and combination preparations, with Memantine as an active ingredient, for use in any of the Indications, in any form of administration whatsoever.

            1.5       The "Effective Date" of this Agreement shall mean the day after the date on which the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. ss18a, expires. The parties shall use diligent efforts to file the required notifications under the Hart-Scott-Rodino Antitrust Improvements Act with the United States Department of Justice and the Federal Trade Commission, and to request early termination of the statutory waiting period, as soon as reasonably practicable after the date hereof.

            1.6       The "FDA" shall mean the United States Food and Drug Administration, or any successor agency thereto.

            1.7       The "First Commercial Sale" of the Contract Products in the Territory shall mean the date on which the Licensee first sells any of the Contract Products for use in any of the Indications, after obtaining all of the applicable Regulatory Approvals.

            1.8       "Improvements and Enhancements" to the Contract Products shall mean and include any and all Inventions, and any and all changes, modifications and amendments to Merz' Know-How which: (i) improve the performance or efficacy of the Contract Products; (ii) reduce any side effects, drug interactions or other adverse effects of the Contract Products; (iii) reduce the cost and/or increase the efficiency or productivity of the manufacturing and production processes for the Contract Products; or (iv) relate to the use of Memantine for the diagnosis and/or treatment of other indications or applications excluding: (A) ophthalmological applications; and (B) tinnitus, except to the extent that Licensee acquires any rights to use Memantine for either of those indications under Article 2.11 hereof.

            1.9       The "Indications" shall mean the use of the Contract Products for the treatment (including retarding the onset and progression) of vascular dementia and Alzheimer's disease and any mixed forms thereof, and any and all other indications and applications for the Contract Products and/or Memantine: (i) developed by Licensee pursuant to Article 2.1 hereof; or (ii) licensed by Merz to Licensee hereafter, pursuant to Article 2.11 hereof.

            1.10      "Inventions" shall mean and include any and all inventions and discoveries which are, or may be, patentable or otherwise protectable under the patent or other intellectual property laws within the Territory, which relate to the Contract Products, and which are conceived, discovered or reduced to practice during the continuance of this Agreement.

            1.11      "Intellectual Property Rights" shall mean and include all patents, as listed on Exhibit 1.11 hereto, Trademarks, as defined in Article 1.18, copyrights, data exclusivity rights, trade names and other proprietary rights relating to, embodied in, or associated with the Contract Products, and all applications, divisions, continuations, continuations-in-part, extensions, substitutions, renewals, confirmations, supplementary protection certificates, registrations, pipeline registrations, revalidations, reissues and additions of all patent rights hereunder.

            1.12      Merz' "Know-How" shall mean and include all present and future specifications, results of clinical trials, technical data and other information relating to the design, formulation, manufacture, production, quality control, Regulatory Approvals, distribution, sale and/or use of Memantine for any of the Indications.

            1.13      "Memantine" shall mean the NMDA antagonist (1-amino-3, 5-dimethyladamantane hydrochloride), as described in more detail in Exhibit 1.13 hereto, and covered by one or more of the Merz' patents, as listed on Exhibit 1.11 hereto, including synthetic precursors, prodrugs, polymorphs and salts thereof.

            1.14      Licensee's "Net Revenues" shall mean and include all gross revenues derived by Licensee or any of its Affiliates or sublicensees from the marketing, distribution, sale and/or use of the Contract Products or any generic versions of Memantine to unrelated third parties, as determined in accordance with United States generally accepted accounting principles, consistently applied, less: (i) all bona fide allowances for returns and discounts actually given to customers including, but not limited to, rebates, charge backs and contract administration fees directly related to the marketing, distribution and sale of the Contract Products; (ii) all costs of shipping, freight, transportation and insurance for the Contract Products, but only to the extent that such costs are included in Licensee's invoice price to its customers for the Contract Products; and (iii) all sales, use, excise and value added taxes that are included in Licensee's invoice price to its customers for the Contract Products.

            1.15      "Regulatory Approvals" shall mean and include all licenses, permits, authorizations and approvals of, and all registrations, filings and other notifications to, any governmental agency or department within the Territory, including, without limitation, the FDA, necessary or appropriate for the manufacture, production, marketing, distribution, sale and/or use of the Contract Products within the Territory.

            1.16      The "Supply Agreement" shall mean that certain Supply Agreement between the parties, dated June 28, 2000, attached hereto as Exhibit 1.16 , under the terms of which Merz shall supply to Licensee the active ingredient raw material for the Contract Products.

            1.17      The "Territory" shall mean and include the United States of America, including its territories, commonwealths and possessions.

            1.18      The Merz "Trademarks" shall mean and include those trademarks and trade names, specified by Merz, as listed on Exhibit 1.18 hereto, and any trademarks and trade names proposed by Licensee for use with the Contract Products, and approved in writing by Merz, which approval shall not be unreasonably withheld; provided, however, that, in the event that Merz approves any such trademarks and/or trade names proposed by Licensee hereunder, Licensee shall assign, transfer and convey to Merz all rights, title and interests in and to all such trademarks and trade names, and such trademarks and trade names shall thereafter be deemed to be included in Merz' Intellectual Property Rights for all purposes of this Agreement.

Article 2: Grant and Scope of License

            2.1      Merz hereby grants to Licensee, and Licensee hereby accepts, a limited license to use Merz' Intellectual Property Rights and Merz' Know-How to obtain all required Regulatory Approvals, and to manufacture, produce, market, distribute, sell and use the Contract Products solely for use in the Indications within the Territory, in accordance with the terms and conditions, and subject to the limitations of, this Agreement. The license granted by Merz to Licensee under this Article 2.1 shall include the right to use Merz' Intellectual Property Rights and Merz' Know-How in conducting advanced research and development activities with respect to the Contract Products and/or Memantine, and to utilize the results of such advanced research and development activities, including any Improvements and Enhancements, in accordance with the terms and conditions, and subject to the limitations, of this Agreement.

            2.2      Licensee shall have a limited right to sublicense any of the rights granted by Merz to Licensee under this Article 2.1 solely to: (i) one or more Affiliates of Licensee; or (ii) any other person, firm, corporation or other entity that has been approved in writing as a sublicensee by Merz; provided, however, that Merz shall be required to approve any prospective sublicensee proposed by Licensee hereunder only where: (A) Merz reasonably determines that the prospective sublicensee has the financial resources, technical expertise and marketing and distribution capability to manufacture, produce, market, distribute and sell the Contract Products in accordance with the requirements of this Agreement; (B) the prospective sublicensee is not currently, and will not foreseeably be a direct competitor of Merz, and is not engaged in pending litigation, arbitration or other dispute with Merz; and (C) the prospective sublicensee enters into a written agreement with Merz, under which the prospective sublicensee agrees to comply strictly with all of the terms and conditions of this Agreement.

            2.3      Licensee's rights with respect to the licenses to Merz' Intellectual Property Rights and Merz' Know-How, granted to Licensee under Article 2.1 of this Agreement, shall be the exclusive right to obtain all required Regulatory Approvals, and to manufacture, produce, market, distribute and sell the Contract Products within the Territory, and the right to manufacture and produce the Contract Products in the Republic of Ireland, solely for distribution and sale within the Territory.

            2.4      Merz also hereby grants to Licensee, and Licensee hereby accepts a limited, exclusive, non-transferable license to use the Merz Trademarks solely in connection with the manufacture, production, marketing, distribution, sale and use of the Contract Products for the Indications within the Territory. Unless otherwise agreed in writing by Merz, Licensee shall affix the Trademarks to all of the Contract Products manufactured, produced, marketed, distributed and/or sold by Licensee under this Agreement.

            2.5      Notwithstanding the provisions of Article 2.4 hereof, in the event that Licensee reasonably determines that one or more generic drug manufacturers has introduced, or proposes to introduce, a generic version of Memantine within the Territory, upon written notice thereof to Merz, Licensee shall have the right to market, distribute and sell a generic version of Memantine within the Territory; provided, however, that Licensee's marketing, distribution and sale of a generic version of Memantine within the Territory in accordance with this Article 2.5, shall not affect or impair any of Merz' rights, or any of Licensee's other obligations, under this Agreement, unless otherwise agreed in writing by Merz.

            2.6      In furtherance of the rights and license granted by Merz to Licensee under this Agreement, within thirty (30) days after the Effective Date of this Agreement, Merz shall furnish to the Licensee a data package that shall include all of the Merz Know-How existing as of that Effective Date which, in Merz' reasonable opinion, are relevant to Regulatory Approvals and compliance with Applicable Laws, with respect to the Contract Products. Licensee shall not use any of the Merz Know-How furnished by Merz under this Article 2.6 for any purpose whatsoever, except as specifically authorized in this Agreement, or as otherwise specifically authorized in writing by Merz. In the event that Licensee reasonably believes that the Merz Know-How included in the data package furnished by Merz under this Article 2.6 is incomplete, Licensee shall provide written notice thereof to Merz, and Merz shall furnish corrected copies of such Merz Know-How within thirty (30) days after receipt of Licensee's written notice hereunder.

            2.7      Without limiting the generality of Articles 2.1, 2.2, 2.3 or 2.6 hereof, Licensee specifically acknowledges and agrees that the license granted to Licensee hereunder is limited to the use of the Contract Products for the Indications within the Territory, and Licensee shall not knowingly market, distribute, sell or use any of the Contract Products for any other application or purpose whatsoever, and shall not actively promote, or solicit orders for, the sale of the Contract Products outside of the Territory, without the prior written authorization of Merz, which Merz may grant or withhold in its sole discretion.

            2.8      Licensee hereby acknowledges that Merz is the owner, or authorized licensee, of certain additional intellectual property rights and know-how, relating to the use of Memantine for certain other applications, including, but not limited to, [ * ] . Licensee further acknowledges and agrees that it shall have no rights whatsoever with respect to such other intellectual property rights or know-how, or to use Merz' Intellectual Property Rights and/or Merz' Know-How, for any other application, except as specifically agreed in writing between Merz and Licensee.

            2.9      Each party hereto represents and warrants that the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate action on the part of that party, and do not conflict with the terms of any other contract, agreement, arrangement or undertaking to which that party is bound.

            2.10     Merz is the owner of the Merz Patent Rights listed on Exhibit 1.11 hereto, and is the owner or authorized licensee of the other Merz Intellectual Property Rights and Merz' Know-How, and Merz has the right to grant the license to such Intellectual Property Rights and Know-How to Licensee, as provided in this Agreement. Merz has not received any notice, and has no knowledge, of any claim by any other person, firm, corporation or other entity, in which such other person, firm, corporation or other entity within the Territory asserts that any of Merz' Intellectual Property Rights are invalid, or infringe the intellectual property rights of such other person, firm, corporation or other entity.

            2.11     In furtherance of the exclusive rights and license granted by Merz to Licensee pursuant to this Agreement, Merz shall not, during the continuance of this Agreement, market, distribute or sell any pharmaceutical formulations of Memantine, or grant any license or other authorization to any other person, firm, corporation or other entity to market, distribute and/or sell any pharmaceutical formulations of Memantine within the Territory for the Indications or for any other indication or application, except (i) ophthalmological applications; and (ii) tinnitus. In the event that Merz proposes to market, distribute or sell any pharmaceutical formulation of Memantine, or license or authorize any other person, firm, corporation or other entity to market, distribute and/or sell any pharmaceutical formulations of Memantine for any other indication or application, or in the event that Merz hereafter acquires the right (including the right to sublicense) to manufacture, produce, market, distribute and sell any pharmaceutical formulations of Memantine for any ophthalmological applications or indications or for tinnitus in the United States from one or more third parties, Merz shall enter into good faith negotiations with Licensee with respect to granting Licensee an exclusive license to manufacture, produce, market, distribute and sell the pharmaceutical formulations of Memantine within the Territory for such other indications or applications on mutually acceptable terms and conditions. In the event that the parties are unable to conclude such a license agreement for such other indications or applications, despite good faith negotiations, within one hundred twenty (120) days of commencing such negotiations, Merz shall have the right to enter into a license agreement for such other indications or applications with another person, firm, corporation or other entity provided that the terms and conditions of the license agreement with such other person, firm, corporation or other entity with respect to the Territory are not more favorable to such other person, firm, corporation or other entity than the final terms and conditions offered by Merz to Licensee for the manufacture, production, marketing, distribution and sale of pharmaceutical formulations of Memantine for such other indications or applications within the Territory.

            2.12     In furtherance of Licensee's manufacture and production of the Contract Products under this Agreement, Merz shall supply Licensee's requirements of Memantine, pursuant to, and in accordance with the terms and conditions of the Supply Agreement attached hereto as Exhibit 1.16 .

Article 3: Regulatory Approvals and Compliance with Applicable Laws and Regulations

            3.1      Licensee shall be responsible for applying for, and shall use its reasonable best efforts to obtain all required Regulatory Approvals, including, but not limited to, a new drug application approval, from the FDA, for the manufacture, production, marketing, distribution, sale and use of the Contract Products within the Territory. Except as otherwise provided in this Agreement, or as required under Applicable Laws, all such Regulatory Approvals, including, but not limited to, the NDA for the Contract Products within the Territory shall be held in the name of Licensee. In furtherance of Licensee's obligations under this Article 3.1, Merz shall appoint Licensee as Merz' agent with respect to the Investigational New Drug ("IND") application opened by Merz with the FDA for Memantine for the Indications prior to the Effective Date of this Agreement.

            3.2      In the event that the FDA, or any other competent governmental agency within the Territory, requires any additional clinical trials or other studies in connection with the processing and consideration of any application by Licensee for any Regulatory Approval under Article 3.1 hereof, Licensee shall conduct all such additional clinical trials and studies, in accordance with Article 3.1 hereof, and Licensee shall be solely responsible for any and all costs and expenses incurred in connection with all such additional clinical trials and studies, and all other costs and expenses incurred in connection with all applications for all Regulatory Approvals under Article 3.1 hereof. Licensee shall furnish to Merz the results of all such additional clinical trials and studies, and copies of all other documents and materials submitted by Licensee to the FDA, or any other competent governmental authority, in connection with any application submitted by Licensee for any Regulatory Approval for the Contract Products within the Territory.

            3.3      The data package furnished by Merz pursuant to Article 2.6 hereof shall include: (i) all relevant chemical, manufacturing and quality control data relating to the Memantine drug substance and the manufacture thereof in Merz' possession as of the Effective Date of this Agreement; and (ii) all other data included in the Drug Master File submitted by Merz or Merz' supplier to the FDA which Merz has the right to disclose to Licensee. Merz shall be solely responsible for filing and maintaining, and shall file and maintain, or cause Merz' supplier to file and maintain the Drug Master File for Memantine with the FDA, in accordance with the FDA's requirements and Applicable Laws, and neither Merz nor Merz' supplier shall modify that Drug Master File in a manner that would have a material adverse effect on the NDA or any other Regulatory Approval for the contract Products within the Territory. Merz shall, or shall cause Merz' supplier to, grant to Licensee a right of reference to that Drug Master File. Merz shall also furnish Licensee with all documentation and other assistance as Licensee shall reasonably request in connection with Licensee's applications for Regulatory Approvals for the Contract Products pursuant to Article 3.1 hereof; provided, however, that, in the event that the documentation included in the data package furnished to Licensee under Article 2.6 is not sufficient to permit Licensee to obtain all such required Regulatory Approvals, Licensee shall be solely responsible for preparing all necessary additional documentation, at Licensee's sole expense, to support Licensee's applications for such Regulatory Approvals.

            3.4      Licensee shall be solely responsible for maintaining all Regulatory Approvals issued to Licensee, pursuant to Article 3.1 in full force and effect throughout the continuance of this Agreement. Licensee shall furnish Merz with timely written notice of (i) each application submitted by Licensee for any Regulatory Approval for the Contract Products hereunder; (ii) the issuance of any such Regulatory Approval; and (iii) the renewal, extension, modification or revocation of any such Regulatory Approval.

            3.5      In the event that Licensee fails to take the following actions relating to obtaining Regulatory Approvals for the Contract Products, as to the manufacture, production, distribution, marketing and sale of the Contract Products in the Territory by the following completion dates, Licensee shall pay to Merz the following performance penalties:

            3.6      In the exercise of its rights, and the performance of its obligations under this Agreement, including, but not limited to, the manufacture, production, marketing, distribution, sale and use of the Contract Products, Licensee shall comply with all Applicable Laws, and with all applicable Regulatory Approvals. Without limiting the generality of this Article 3.6, all Contract Products manufactured, produced, marketed, distributed or sold by Licensee under this Agreement shall be packaged and labeled strictly in accordance with such Applicable Laws and Regulatory Approvals.

            3.7       (a)       Each of the parties hereto shall disclose to the other party all safety reports and other information (collectively "Safety Data") which they may from time to time receive or obtain (whether from sources within or without the Territory) with respect to any adverse drug experiences with respect to the Contract Products, in accordance with the following timelines after receipt of such Safety Data by that party:

                       (b)       Each party shall cause each of its licensees or sublicensees, as the case may be, to disclose to it any and all Safety Data which that licensee or sublicensee may from time to time receive or obtain, in accordance with the time lines set forth in Article 3.7(a) hereof, and each party shall disclose to the other party hereto all Safety Data reported to it by any such licensee or sublicensee, as the case may be, within the number of days after receipt thereof from that licensee or sublicensee as specified in Article 3.7(a) hereof; provided, however, that, in all events, each party shall require its licensees or sublicensees, as the case may be, to report all such Safety Data to it so as to assure that both Merz and Licensee may comply strictly with all Safety Data reporting requirements with respect to the Contract Products established by Applicable Law and/or any applicable Regulatory Approvals.

                        (c)       Each party shall promptly deliver to the other party hereto a copy of all correspondence and other communications which that party may receive from any government agency or department, whether within or without the Territory, relating to the Contract Products; provided, however, that the parties' respective obligations under this Article 3.7(c) shall not apply to procedural, non-substantive communications from any such governmental agency or department that do not relate to the safety of the Contract Products. Without limiting the generality of this Article 3.7(c), each party shall furnish to the other party hereto copies of the following Drug Safety Report submissions, as required under Applicable Law, prior to the delivery of such Drug Safety Report submissions to the competent governmental health or regulatory agency or department:

                        (d)       All Safety Data, reports and other communications required to be furnished by each party to the other party under this Article 3.7 shall be delivered in accordance with the notice procedures set forth in Article 13.4 hereof.

            3.8      Each party shall provide the other party hereto with such assistance as the other party shall reasonably request in connection with the identification, analysis, mitigation and elimination of all such side effects, drug interactions and other adverse effects with respect to the Contract Products; provided, however, that, in the event that Licensee is required by the FDA or any other competent governmental agency to undertake any clinical trials or additional studies with respect to any such side effects, drug interactions or other adverse effects of the Contract Products, in order to maintain the Regulatory Approvals for such Contract Products, Licensee shall be solely responsible for performing such clinical trials or additional studies, at its sole expense.

Article 4: Licensee's Obligations

            4.1      Licensee shall use its best efforts to market, distribute and sell the Contract Products in the Territory, in order to maximize the Net Revenues derived from such Contract Products throughout the continuance of this Agreement. Without limiting the generality of Licensee's best efforts obligation under this Article 4.1, Licensee shall:

            4.2      In the event that Licensee breaches any of its obligations under Article 4.1(c) hereof, with respect to the manufacture, production, marketing, distribution and/or sale of competitive products, Merz shall have the right to convert the exclusive and sole license rights provided for in Article 2.3 hereof into non-exclusive license rights, by furnishing written notice thereof to Licensee. In the event that Merz elects to exercise its rights under this Article 4.2, upon Merz' written request, at Merz' sole option, Licensee shall: (i) transfer to Merz all Regulatory Approvals applicable to the Contract Products; or (ii) provide Merz with any and all documents, materials, clinical studies, test reports and other information, and shall provide Merz with all assistance reasonably requested by Merz, in order to permit Merz to apply for, and obtain, duplicate Regulatory Approvals for the Contract Products.

            4.3      All of the Contract Products manufactured or produced by Licensee shall be manufactured with Memantine as the active ingredient, strictly in accordance with Merz' Intellectual Property Rights and Merz' Know-How, as licensed to Licensee hereunder, and in accordance with any and all other standards, specifications, quality assurance procedures, manufacturing practices and requirements set forth in all applicable Regulatory Approvals. In furtherance of Licensee's obligations under this Article 4.2, upon Merz' written request, Licensee shall:

            4.4      In the event that Merz reasonably determines that any of the Contract Products and/or Licensee's manufacturing facilities and operations do not conform to the requirements of Article 4.3 hereof, Merz shall give notice thereof, specifying all such deficiencies in the Contract Products or Licensee's manufacturing facilities and operations, as the case may be. Licensee shall take corrective action to remedy all such deficiencies in the Contract Products and/or Licensee's manufacturing facilities and operations, as the case may be, immediately upon receipt of such written notice from Merz. Upon completion of all such corrective action, Licensee shall furnish Merz with a reasonable number of samples of the Contract Products, and shall permit Merz to inspect Licensee's manufacturing facilities and operations, in order to confirm that all such deficiencies have been corrected.

            4.5      Attached hereto as Exhibit 4.5 is Licensee's sales forecast for Net Revenues to be derived by Licensee from the distribution and sale of the Contract Products within the Territory during each of the first three (3) twelve-month periods following the First Commercial Sale of the Contract Products within the Territory. At least ninety (90) days prior to the start of each year after the expiration of that initial three (3) year period during the continuance of this Agreement, Licensee shall furnish to Merz Licensee's detailed sales plan for the marketing, distribution and sale of the Contract Products in the Territory for the coming year.

            4.6      The parties shall use their best efforts to collaborate in the marketing and promotion of the Contract Products in the Territory. In furtherance of the parties' obligations under this Article 4.6, the parties shall form a joint marketing committee, comprised of two representatives from each of the parties. The joint marketing committee shall meet at least twice every calendar year, and shall cooperate in coordinating all joint marketing and promotional activities for the Contract Products in the Territory, including, but not limited to:

Each party shall provide the other party hereto with written notice of its two representatives for the joint marketing committee within ninety (90) days after the Effective Date of this Agreement.

            4.7      Licensee shall furnish Merz with quarterly reports of all of Licensee's sales under this Agreement. Each such quarterly report shall (i) be furnished to Merz within forty-five (45) days after the close of the calendar quarter to which it corresponds; and (ii) state Licensee's total sales of the Contract Products during the calendar quarter, the Net Revenues derived by Licensee from all sales, and the royalties payable by Licensee to Merz with respect to such Net Revenues, in accordance with the provisions of Article 5.4 of this Agreement.

            4.8      Throughout the continuance of this Agreement, Licensee shall keep Merz informed of all material marketing plans and strategies, including, but not limited to, sales forecasts, market analyses and proposed advertising and promotional campaigns and programs, for the marketing, distribution and sale of the Contract Products in the Territory.

Article 5: Consideration

            5.1      In consideration for the rights and licenses granted by Merz to Licensee under this Agreement, Licensee shall make the following lump sum payments to Merz:

            5.2      All fees payable by Licensee to Merz under Article 5.1 hereof and any performance penalties payable by Licensee under Article 3.5 hereof, are non-refundable upon expiration or termination of this Agreement for any reason whatsoever. None of the fees payable by Licensee to Merz under Article 5.1 or performance penalties payable by Licensee under that Article 3.5 may be credited against any of Licensee's royalty obligations under Article 5.3 hereof.

            5.3      As further consideration for the rights and licenses granted by Merz to Licensee under this Agreement, Licensee shall pay royalties to Merz equal to [ * ] of Licensee's Net Revenues derived from the distribution and sale of the Contract Products to customers located within, or for use within, the Territory; provided, however, that all Memantine for the Contract Products supplied by Merz to Licensee under the Supply Agreement shall be supplied by Merz to Licensee at no additional charge therefor.

            5.4      Notwithstanding the provisions of Article 5.3 hereof, in the event that, during the continuance of this Agreement and thereafter, Licensee markets, distributes and sells a generic version of Memantine pharmaceutical products within the Territory, in accordance with the provisions of Article 2.5 hereof, so long as Merz is willing to supply Licensee's requirements of raw materials, pursuant to the Supply Agreement, Licensee shall pay royalties to Merz with respect to Net Revenues derived from the distribution and sale of such generic version of Memantine as follows, in lieu of the royalties provided for in Article 5.3 hereof:

For purposes of this Article 5.4, Licensee's "Net Sales Price" shall mean the Net Revenues derived by Licensee, or any of Licensee's sublicensees, as the case may be, from the sale of the generic version of Memantine, or the branded Contract Products, as the case may be, divided by the number of units of such products from which such Net Revenues were derived, as determined on a quarterly basis. Nothing in this Article 5.4 shall affect or impair Licensee's obligation to pay, and Merz' right to receive, royalties with respect to the branded Contract Products as provided in Article 5.3 hereof.

            5.5      In the event that the royalties payable by Licensee to Merz, as determined in accordance with the provisions of Article 5.3 hereof, in any twelve (12) month period during any of the first three (3) years commencing with Licensee's First Commercial Sale of the Contract Products are less than [ * ] of an amount equal to [ * ] of Licensee's annual sales forecast for that twelve (12) month period as furnished by Licensee to Merz pursuant to Article 4.5 hereof, multiplied by the applicable royalty rate, as set forth in Article 5.3 hereof, or Article 5.4 hereof, as the case may be (the "Minimum Royalty"), Licensee shall pay to Merz an amount equal to the difference between the Minimum Royalty for that twelve (12) month period and the royalties actually paid by Licensee with respect to that twelve (12) month period, within forty-five (45) days after the close of that twelve (12) month period. Licensee shall be entitled to a credit f