ASSET PURCHASE AGREEMENT BETWEEN NEUROMED DEVELOPMENT INC. AND MALLINCKRODT INC. Dated as of June 11, 2009

Development Agreement

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COMBINATORX, INC | CombinatoRx, Incorporated | Mallinckrodt Inc | Neuromed Development Inc | Neuromed Pharmaceuticals Ltd

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Title: ASSET PURCHASE AGREEMENT BETWEEN NEUROMED DEVELOPMENT INC. AND MALLINCKRODT INC. Dated as of June 11, 2009
Governing Law: New York Date: 8/7/2009
Industry: Biotechnology and Drugs Law Firm: Cooley Godward Sector: Healthcare

Exhibit 10.34

ASSET PURCHASE AGREEMENT

BETWEEN

NEUROMED DEVELOPMENT INC. AND

MALLINCKRODT INC.

Dated as of June 11, 2009

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 promulgated under the Securities Act of 1933, as amended; [*] denotes omissions.

This Asset Purchase Agreement (the “Agreement”) contains representations and warranties that Neuromed Development Inc. (“Neuromed”) and Mallinckrodt Inc. (“Mallinckrodt”) made to each other. These representations and warranties were made only for the purposes of the Agreement and solely for the benefit of Neuromed and Mallinckrodt as of specific dates, may be subject to important limitations and qualifications agreed to by the parties thereto and included in confidential disclosure schedules provided by Neuromed and Mallinckrodt to each other in connection with the signing of the Agreement, and may not be complete. Furthermore, these representations and warranties may have been made for the purposes of allocating contractual risk between Neuromed and Mallinckrodt instead of establishing these matters as facts, and may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of the filing of the Agreement by CombinatoRx, Incorporated with the Securities and Exchange Commission. Accordingly, you should not rely upon the representations and warranties contained in the Agreement as characterizations of the actual state of facts, since they were intended to be for the benefit of, and to be limited to, the parties thereto.

T ABLE OF C ONTENTS


ARTICLE I	DEFINITIONS; RULES OF CONSTRUCTION	1
SECTION 1.1	Definitions	1
SECTION 1.2	Rules of Construction	1
ARTICLE II	SALE OF ASSETS; ASSUMPTION OF LIABILITIES; CONSIDERATION; CLOSING	2
SECTION 2.1	Transfer of Assets	2
SECTION 2.2	Assignability and Consents	2
SECTION 2.3	Liabilities	3
SECTION 2.4	Consideration	5
SECTION 2.5	Closing	6
SECTION 2.6	Closing Deliveries by Seller	7
SECTION 2.7	Closing Deliveries by Purchaser	7
SECTION 2.8	Further Deliveries by Seller	7
SECTION 2.9	Agreements Relating to Electronic Transfer and Physical Delivery of Transferred Assets	7
ARTICLE III	REPRESENTATIONS AND WARRANTIES OF SELLER	8
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF PURCHASER	8
ARTICLE V	ADDITIONAL AGREEMENTS	9
SECTION 5.1	NDA Transfer	9
SECTION 5.2	Diligence	9
SECTION 5.3	Audits	9
SECTION 5.4	Confidentiality	10
SECTION 5.5	Tax Matters	12
SECTION 5.6	Regulatory Matters	13
SECTION 5.7	Royalty-Related Rights and Obligations	13
SECTION 5.8	Further Assurance	14
ARTICLE VI	CONDITIONS TO CLOSING	14
SECTION 6.1	Conditions to Obligations of Seller	14
SECTION 6.2	Conditions to Obligations of Purchaser	15


ARTICLE VII	INDEMNIFICATION	16
SECTION 7.1	Survival of Representations and Warranties and Covenants	16

T ABLE OF C ONTENTS

(Continued)


SECTION 7.2	Indemnification	16
ARTICLE VIII	MISCELLANEOUS	20
SECTION 8.1	Governing Law	20
SECTION 8.2	Venue	20
SECTION 8.3	Amendment	20
SECTION 8.4	Expenses	20
SECTION 8.5	Notices	21
SECTION 8.6	Severability	23
SECTION 8.7	Entire Agreement	23
SECTION 8.8	Assignment	23
SECTION 8.9	Delays or Omissions	23
SECTION 8.10	No Third Party Beneficiaries	24
SECTION 8.11	Counterparts	24
SECTION 8.12	Specific Performance	24
SECTION 8.13	WAIVER OF JURY TRIAL	24

EXHIBITS


Exhibit A		Definitions and References
Exhibit B		Transferred Tangible and Intangible Assets
Exhibit C		Transferred Contracts
Exhibit D		Royalties
Exhibit E		Representations and Warranties of Seller
Exhibit F		Assumed Development Cost Liabilities
Exhibit G		Reimbursed Development Costs
Exhibit H		Representations and Warranties of Purchaser
Exhibit I		Assignment and Assumption Agreement
Exhibit J		Bill of Sale
Exhibit K		Development and Transition Services Agreement
Exhibit L		Guaranty of Covidien International Finance S.A.
Exhibit M		Guaranty of NPL

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the “ Agreement ”) is made as of June 11, 2009 between Neuromed Development Inc., a corporation organized under the laws of Barbados (“ Seller ”) and Mallinckrodt Inc., a Delaware corporation and an indirect subsidiary of Covidien Ltd. (“ Purchaser ”). Purchaser and Seller may each be referred to herein as a “ Party ” and collectively as the “ Parties .”

RECITALS

A. Seller has certain rights to the Products.

B. Purchaser desires to purchase and acquire, and Seller desires to sell and transfer to Purchaser Seller’s rights to all of its tangible and intangible assets related to the Products, including assuming certain contracts related to the Products, subject to the terms and conditions of this Agreement.

Now, therefore, in consideration of the foregoing premises, the mutual representations, warranties, covenants and other agreements set forth herein and the mutual benefits to be gained by the performance thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS; RULES OF CONSTRUCTION

SECTION 1.1 Definitions . Capitalized terms used in this Agreement are defined on Exhibit A . Exhibit A also contains references to terms defined in the body of this Agreement and other Exhibits to this Agreement.

SECTION 1.2 Rules of Construction . When a reference is made in this Agreement to an Article, Section or Exhibit, such reference shall be to an Article or Section of, or Exhibit to, this Agreement unless otherwise indicated. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement. The headings set forth in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All references in this Agreement to the Subsidiaries of a Party shall be deemed to include all direct and indirect Subsidiaries of such Party. Unless otherwise specifically provided, all references in this Agreement to monetary amounts or dollars shall mean and refer to United States Dollars. The Parties agree that they have been represented by legal counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.

ARTICLE II

SALE OF ASSETS; ASSUMPTION OF

LIABILITIES; CONSIDERATION; CLOSING

SECTION 2.1 Transfer of Assets . Upon the terms and subject to the conditions set forth in this Agreement, which is entered into simultaneously with the Closing of the transactions contemplated hereunder, Seller hereby conveys, assigns and transfers to Purchaser, and Purchaser hereby acquires from Seller, free and clear of any Encumbrances (other than Encumbrances arising expressly under the Transferred Contracts), all of Seller’s right, title and interest in and to the following assets (collectively, the “ Transferred Assets ”):

(a) the Transferred Tangible and Intangible Assets;

(b) the Transferred Contracts; and

(c) all rights, claims, causes of action and credits, including all guarantees, warranties, indemnities, rights of set-off and similar rights, in favor of Seller to the extent relating to any of the foregoing Transferred Assets or any Assumed Liability, other than such rights, claims, causes of action and credits to the extent relating to any Retained Liability, including all causes of action for past misappropriation or infringement of any Transferred Asset and rights to damages and other remedies for past misappropriation or infringement of any Transferred Asset.

Except as set forth on Exhibit E , the Transferred Assets are being assigned, transferred and conveyed to Purchaser with no other representations or warranties, including those pertaining to merchantability or fitness or use.

The transfer of the Transferred Assets pursuant to this Agreement shall not include the assumption of any Liability related to the Transferred Assets that arose (including payments that became due) prior to the Effective Time unless Purchaser expressly assumes that Liability pursuant to Section 2.3(a).

SECTION 2.2 Assignability and Consents . Notwithstanding anything to the contrary contained in this Agreement and subject to the Parties’ rights under Article VI, if the conveyance, assignment, transfer or delivery or attempted conveyance, assignment, transfer or delivery to Purchaser of any Transferred Asset is (a) prohibited by any applicable Law or (b) would require any authorizations, approvals, consents or waivers from a third party to convey, assign, transfer or deliver such Transferred Asset and such authorizations, approvals, consents or waivers have not been obtained prior to the Closing Date (each, a “ Non-Assignable Asset ”), in either case, the Closing shall not proceed without the express consent of Purchaser that any such Non-Assignable Asset may be transferred by Seller after the Closing. If, in the event of such consent from Purchaser, the Closing proceeds, the Closing shall not constitute the conveyance, assignment, transfer or delivery of such Non-Assignable Asset, and this Agreement shall not constitute a conveyance, assignment, transfer or delivery of such Non-Assignable Asset

unless and until such authorization, approval, consent or waiver is obtained. After the Closing, the Parties shall continue to use their best reasonable efforts and cooperate with each other, without the payment of additional consideration by Purchaser or Seller to effect the assignment of such Non-Assignable Asset, to obtain any such authorization, approval, consent or waiver as promptly as practicable, and it is understood that Seller shall reimburse Purchaser for any reasonable out-of-pocket expenses incurred in connection with such efforts to the extent Seller and Purchaser agree that any such expenditure is reasonably necessary to effect the transfer of any Non-Assignable Asset. Once authorization, approval or waiver of or consent for the conveyance, assignment, transfer or delivery of any such Non-Assignable Asset not conveyed, assigned, transferred or delivered at the Closing is obtained, Seller shall convey, assign, transfer and deliver to Purchaser all of Seller’s right, title and interest in and to such Non-Assignable Asset at no additional cost to Purchaser. In addition, for so long as a Transferred Contract remains a Non-Assignable Asset, Seller agrees to cooperate with Purchaser, as reasonably requested in writing by Purchaser, to extend and make available to Purchaser any rights and/or benefits available under such contract, provided that Purchaser pays all amounts and fulfills all obligations arising from or associated with such Non-Assignable Assets, other than to the extent such amounts or obligations would constitute a Retained Liability if such Non-Assignable Asset were conveyed, assigned, transferred or delivered on the Closing Date and other than such amounts and obligations that arise as a consequence of the fact that such Non-Assignable Asset could not be transferred at the Closing. Without limiting the foregoing, (a) upon the written request of Purchaser, Seller agrees to exercise rights (for example, elections or options) on Purchaser’s behalf under such contract, at Purchaser’s expense, provided that all Liabilities resulting from the exercise of such rights shall be Liabilities solely of Purchaser, and Seller shall not exercise any of its rights under such contract unless requested or approved in writing by Purchaser, (b) Seller shall keep Purchaser informed as to Seller’s written communications from the other party to such contract, including notifying Purchaser in the event Seller is notified with respect to matters that require Seller’s consent (or which trigger an option or an election by Seller) under such contract, or regarding matters that affect Seller’s or Purchaser’s rights thereunder, (c) to the extent that Purchaser obtains the agreement of the other party to such contract to modify, amend or otherwise alter or waive any performance, obligation or provision of such contract, Seller agrees to take such actions and execute such documents as Purchaser may reasonably request in writing to effect the same, at Purchaser’s expense, provided that all Liabilities resulting from such modification, amendment, alteration or waiver shall be Liabilities solely of Purchaser and (d) in the event that Purchaser obtains an agreement from the other party to such contract to transfer the rights under such contract directly to Purchaser, Seller shall transfer such rights to Purchaser in a writing reasonably acceptable to Purchaser.

SECTION 2.3 Liabilities.

(a) Assumed Liabilities . On the Closing Date, Purchaser shall assume and agree to discharge only (i) Liabilities arising from and after the Effective Time under any Transferred Contract, including all payments due after the Effective Time, but excluding any Liability to the extent arising out of, or relating to, a breach of a Transferred Contract that occurred prior to the Effective Time, (ii) any Liability for Taxes attributable to the Transferred

Assets for any Post-Closing Tax Period, (iii) all Liabilities related to the Products or the ownership of the Transferred Assets arising from and after the Effective Time except as provided in and subject to any obligations set forth in the Development and Transition Services Agreement and (iv) the Assumed Development Cost Liabilities (collectively, the “ Assumed Liabilities ”). It is understood that in no event will Purchaser or any of its Affiliates be required to reimburse Seller or any of its Affiliates in an amount in excess of $16,000,000 in the aggregate for (A) Assumed Development Cost Liabilities; (B) all amounts that are paid to Seller for Reimbursed Development Costs and (C) for all amounts that will be paid for Development of Products under and pursuant to the Development and Transition Services Agreement, notwithstanding the amount of any Liabilities that may be described on Exhibit F and except as otherwise provided in Section 2.4 of the Development and Transition Services Agreement. Except as expressly provided in this Section 2.3, none of Purchaser or any of its Affiliates will be deemed for any reason to have become liable for or successor to any other liabilities or obligations, liquidated or unliquidated, known or unknown, of Seller or any of its Affiliates or successors.

(b) Retained Liabilities . All Liabilities of Seller other than the Assumed Liabilities (the “ Retained Liabilities ”) shall remain the sole responsibility of Seller. For the avoidance of doubt, the Retained Liabilities shall include:

(i) any Liability of Seller under any Transferred Contract that arises after the Effective Time to the extent arising out of or relating to any breach thereof that occurred prior to the Effective Time;

(ii) any Liabilities of Seller, or any member of any consolidated, affiliated, combined or unitary group of corporations of which Seller or any of its Affiliates is or has been a member, for Taxes attributable to the Transferred Assets, including any Liability for Taxes resulting from or arising out of any transactions contemplated in this Agreement, for any Pre Closing Tax Period;

(iii) any Liabilities of Seller arising out of any product liability, patent infringement, breach of warranty, government seizure, recall or similar claim for injury to person or property or any other claim related to the Transferred Assets or the Products, in each case to the extent arising prior to the Closing (including all proceedings relating to any such Liabilities);

(iv) any Liabilities of Seller with respect to any litigation or other claims related to the Transferred Assets or the Products to the extent arising from any event, circumstance or condition occurring or alleged to have occurred prior to the Closing;

(v) any Liability of Seller related to any product, property, tangible or intangible, or service of Seller not related to the Products;

(vi) any Liability of Seller arising out of any actual or alleged violation by Seller or any of its Affiliates of any Law applicable to Seller or any of its Affiliates; and

(vii) any other Liability of Seller resulting from the ownership, use, operation or maintenance of the Transferred Assets by or on behalf of Seller prior to the Closing.

SECTION 2.4 Consideration .

(a) Consideration . As consideration for the Transferred Assets, Transferred Contracts and rights granted to Purchaser hereunder:

(i) Purchaser shall assume the Assumed Liabilities;

(ii) Purchaser shall pay to Seller the sum of $10,000,000 by wire transfer of immediately available funds at the Closing;

(iii) Purchaser shall pay to Seller the Reimbursed Development Costs by wire transfer of immediately available funds at the Closing;

(iv) Purchaser shall pay to Seller the First Milestone Payment by wire transfer of immediately available funds within ten (10) days of the First Milestone Achievement Date;

(v) Purchaser shall pay to Seller each applicable Additional Milestone Payment amount by wire transfer of immediately available funds within ten (10) days of each occurrence of the applicable Additional Milestone Achievement Date; and

(vi) Purchaser shall pay to Seller by wire transfer of immediately available funds the royalties as set forth on Exhibit D .

(b) Transfer Taxes . Any transfer, documentary, sales, use, valued-added, gross receipts, stamp, registration or other similar transfer Taxes incurred in connection with or as a consequence of the transfer and sale of the Transferred Assets pursuant to this Agreement (“ Transfer Taxes ”) shall be paid by Purchaser; provided, however, that Seller shall properly pay over to the appropriate Governmental Authority any Barbados stamp tax due and owing with respect to the transactions contemplated by this Agreement and affix, or cause to be affixed, the appropriate stamp as required under Barbados law to any documents as required by Barbados law, and upon demonstration to Purchaser that such Barbados stamp tax has been duly paid and the stamp duly affixed, Purchaser shall reimburse Seller for the amount of such Barbados stamp tax. The Parties hereto shall cooperate, to the extent reasonably requested and legally permitted, to reduce any such Transfer Taxes.

(c) Required Withholding . Purchaser shall withhold and deduct from the consideration set forth in Section 2.4(a) any amounts required to be withheld and deducted from such consideration under the Code or other applicable Law. Any amounts so withheld and deducted shall be remitted by Purchaser on a timely basis to the appropriate Governmental Authority for the account of Seller and Purchaser shall provide Seller reasonable evidence of such remittance within thirty (30) days of such remittance. To the extent that amounts are so

withheld by Purchaser and duly paid over to the appropriate Governmental Authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to Seller in respect of which such deduction and withholding was made by the Purchaser. Seller shall furnish to Purchaser such forms, certificates and documentation (including, without limitation, Internal Revenue Service Forms W-8 and W-9) as may be necessary or appropriate, and that are legally required, to obtain any reduction of, credit for, or exemption from any withholding.

(d) Allocation of Milestone and Royalty Payments and Withholding Indemnity .

(i) The parties agree that the Milestone Payments under section 2.4(a)(iv) and (v) and the Royalties under section 2.4(a)(vi) have been allocated to the following intangible assets according to (or based on) the relative values of the assets purchased (to the extent such asset has value in excess of what will be paid pursuant to the Assumed Liabilities): (i) [*], (ii) [*], and (iv) [*]. The parties agree to be bound by the following allocation for purposes of the withholding tax documentation:


	[*]		[*]		[*]
Milestone Payments	[*]	%	[*]	%	[*]
Pre-Patent Expiration Royalties	[*]	%	[*]	%	[*]
Post-Patent Expiration Royalties	[*]	%	[*]	%	[*]

(ii) Notwithstanding anything in this Agreement to the contrary, Purchaser and Seller agree that, if a Taxing authority successfully challenges the allocations agreed to pursuant to paragraph (i) of this Section 2.4(d), and, as a result of such challenge, such Taxing authority imposes additional withholding taxes, or penalties or interest with respect to withholding taxes, on any milestone or royalty payment made to Seller under this Agreement, and such taxes, penalties or interest are assessed against Purchaser or any of its Affiliates, Seller shall indemnify and hold harmless Purchaser and any such Affiliate from and against such taxes, penalties and interest and any other damages related thereto. Payment on this indemnification shall be made within thirty (30) days from the date Purchaser makes a written demand therefor.

SECTION 2.5 Closing . Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the “ Closing ”), including the transfer of the Transferred Assets, shall be held at the offices of Cooley Godward Kronish LLP, 3175 Hanover Street, Palo Alto, California at 10:00 a.m. Pacific Standard Time on June 11, 2009, contemporaneously with the execution and delivery of this Agreement, or such later date as the Parties agree upon in writing (the “ Closing Date ”).

SECTION 2.6 Closing Deliveries by Seller . At the Closing, Seller shall deliver or cause to be delivered to Purchaser:

(a) an original of each Transaction Document to which Seller is a party, duly executed by Seller;

(b) the certificates and other documents required to be delivered pursuant to Section 6.2;

(c) all of the Transferred Assets and other materials set forth on Exhibit B designated to be delivered at the Closing, subject to Sections 2.2, 2.8 and 2.9; and

(d) such other deeds, bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance, as may reasonably be requested by Purchaser, each in form and substance satisfactory to Purchaser and its legal counsel and duly executed by Seller, as applicable.

SECTION 2.7 Closing Deliveries by Purchaser . At the Closing, Purchaser shall deliver to Seller:

(a) an original of each Transaction Document to which Purchaser is a party, duly executed by Purchaser;

(b) the payments described in Section 2.4(a)(ii), (iii), and, if applicable, (iv); and

SECTION 2.8 Further Deliveries by Seller . At or promptly following the Closing, but in no event later than ten (10) days thereafter, Seller shall deliver or cause to be delivered to Purchaser, in the manner and form and to the location(s) reasonably specified by Purchaser, at Seller’s expense, the Transferred Assets listed on Exhibit B hereto which were not delivered to Seller on the Closing Date. Seller shall transfer and assign the Product NDA to Purchaser as set forth in Section 5.1.

SECTION 2.9 Agreements Relating to Electronic Transfer and Physical Delivery of Transferred Assets .

(a) Delivery by Electronic Transfer. Seller and Purchaser agree that any of the Transferred Assets of the type that can be transmitted to Purchaser electronically will be so delivered to Purchaser as soon as reasonably practicable following the Closing and, if delivered electronically, will not be delivered to Purchaser on any tangible medium. Promptly following any electronic transmission, Seller shall execute and deliver to Purchaser a written certificate containing the following information: (a) the date of transmission, (b) the time the transmission

was commenced and concluded, (c) the name of the individual who made the transmission, (d) the signature of such individual, (e) the security measures utilized to protect such transmission from improper disclosure or corruption and (f) a general description of the nature of the items transmitted sufficient to distinguish the transmission from other transmissions or deliveries.

(b) Physical Delivery of Transferred Assets. Seller will make arrangements with its usual third-party transporters for transport, promptly following the Closing, of the Transferred Assets to be delivered at Closing (except for those Transferred Assets to be delivered pursuant to Sections 2.6, 2.8 and 2.9(a)), to Purchaser’s location or other designated site. Purchaser shall bear the transport costs for such Transferred Assets but the risk of loss with respect thereto shall be borne by Seller until delivery has been made to Purchaser or such site as Purchaser may designate.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the disclosure schedule delivered by Seller to Purchaser and dated as of the date hereof (the “ Seller Disclosure Schedule ”), which Seller Disclosure Schedule identifies the Section (or, if applicable, subsection) of this Agreement or the appropriate Exhibit to which such exception relates (provided, however, that such disclosure shall also apply to particular matters represented or warranted in other Sections and subsections to the extent that it is readily apparent from the text of such disclosure), Seller hereby represents and warrants to Purchaser, as of the date of this Agreement and (if different) as of the Closing Date, as set forth on Exhibit E , each of which representations and warranties is true and correct and shall survive the Closing as set forth herein.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Except as set forth in the disclosure schedule delivered by Purchaser to Seller and dated as of the date hereof (the “ Purchaser Disclosure Schedule ”), which Purchaser Disclosure Schedule identifies the Section (or, if applicable, subsection) of this Agreement or the appropriate Exhibit to which such exception relates (provided, however, that such disclosure shall also apply to particular matters represented or warranted in other Sections and subsections to the extent that it is readily apparent from the text of such disclosure), Purchaser hereby represents and warrants to Seller, as of the date of this Agreement and (if different) as of the Closing Date, as set forth on Exhibit H , each of which representations and warranties is true and correct and shall survive the Closing as set forth herein.

ARTICLE V

ADDITIONAL AGREEMENTS

SECTION 5.1 NDA Transfer . Within three (3) Business Days of Seller’s receipt of written notice from the FDA that the Product NDA has been approved, Seller will take all steps required under 21 C.F.R. 314.72 to assign and transfer all of Seller’s rights in the Product NDA to Purchaser and to notify the FDA of same. Prior to transfer and assignment of Seller’s rights in the Product NDA to Purchaser, Purchaser will be deemed to have a beneficial right and interest in and to such Transferred Asset to the extent contemplated herein, but legal title to such asset shall not be deemed to have been passed to Purchaser until the occurrence of such transfer and assignment. For the avoidance of doubt, for purposes of Seller’s representations and warranties and other obligations pursuant to this Agreement, the Product NDA shall not be deemed a Transferred Asset as of any date or time period prior to the assignment and transfer described in this Section 5.1.

SECTION 5.2 Diligence .

(a) Generally. As a substantial portion of Seller’s potential consideration for the asset transfer under this Agreement is based on events subsequent to the Effective Date, most of which events will depend for achievement on efforts by Purchaser, the Parties agree that Purchaser’s diligent efforts to achieve such events successfully is a fundamental commitment of the deal agreed upon by the Parties under this Agreement, and, therefore, Purchaser agrees to use general commercial diligence as provided in subsection (b) below.

(b) General Commercial Efforts. Purchaser, directly or through its Affiliates, Licensees and/or other contractors, shall use Commercially Reasonable Efforts to develop (other than as to such development efforts to be conducted by Seller under the Development and Services Agreement) and to commercialize the Products in the Territory. It is understood, however, that Purchaser will not be required to continue to promote Products during any period in which one or more Generic Versions of such Products are being commercially marketed and sold in the Territory by any Third Party.

SECTION 5.3 Audits .

(a) Audit Rights . Upon at least thirty (30) days prior written notice from Seller and not more than once per year, Purchaser shall permit, and shall require its Affiliates to permit, Seller to have access during normal business hours to such books of account and records of Purchaser and its Affiliates, at the appropriate party’s principal place of business, as may be reasonably necessary to confirm that Purchaser is complying with its obligations under Section 5.2.

SECTION 5.4 Confidentiality .

(a) Proprietary Information . Except as otherwise provided in this Section 5.4, each Party (the “ Receiving Party ”) shall maintain in confidence and use only for purposes of this Agreement any confidential information and data disclosed and materials supplied to such Party by another Party (the “ Disclosing Party ”) under this Agreement or any other Transaction Document (such information, data and materials, collectively “ Proprietary Information ”). For purposes of this Section 5.4, (i) all “Confidential Information” disclosed pursuant to the Non-Disclosure Agreement, dated December 16, 2008, by and among Neuromed Pharmaceuticals Ltd., a Canadian corporation (“ NPL ”), Neuromed Pharmaceuticals Inc., a Delaware corporation (“ NPI ”), and Purchaser (the “ Prior Agreement ”) shall be deemed Proprietary Information of Seller (and hence Purchaser shall be considered the Receiving Party with respect thereto) except to the extent it comprises Transferred Assets and except as provided below, (ii) the Transferred Assets shall be deemed Proprietary Information of Purchaser (and hence Seller shall be considered the Receiving Party with respect thereto), and (iii) subject to the understandings set forth in clauses (i) and (ii) of the sentence, all disclosures under the Prior Agreement shall be considered to be disclosures of Proprietary Information protected by and to the extent set forth in this Section 5.4, notwithstanding the mutual agreed termination of the Prior Agreement by the Parties. For purposes of the definitions of Receiving Party and Disclosing Party, Seller, NPI and NPL shall be deemed a single Party. The obligations of the Receiving Party under this Section 5.4 not to disclose or use Proprietary Information of the other Party shall not apply, however, to the extent that any such information, data or materials:

(i) have been or are hereafter published or otherwise become public, other than by acts or omissions of the Receiving Party in breach of this Agreement;

(ii) the Receiving Party can demonstrate by competent evidence have been disclosed to the Receiving Party by a Third Party that has the legal right to disclose such information without breaching any known obligation of confidentiality;

(iii) the Receiving Party can demonstrate by competent evidence have been independently developed by employees, agents or consultants of the Receiving Party without use of the Disclosing Party’s Proprietary Information as evidenced by the Receiving Party’s business records; or

(iv) have been disclosed by the Receiving Party with the prior written consent of the Disclosing Party.

(b) Permitted Disclosures . To the extent it is reasonably necessary or appropriate for a Receiving Party to fulfill its obligations or exercise its rights under this Agreement or any other Transaction Document:

(i) a Receiving Party may disclose Proprietary Information of the other Party to the Receiving Party’s Affiliates, licensees and prospective licensees, employees, consultants, outside contractors, clinical investigators and other Persons on a need-to-know basis

in accordance with the exercise of rights granted to or retained by such Receiving Party under this Agreement or any other Transaction Document, provided that such Persons agree to be bound by obligations of confidentiality and non-use with respect to such Proprietary Information consistent with those set forth herein;

(ii) a Receiving Party may disclose Proprietary Information of the other Party to government or other regulatory authorities to the extent that such disclosure is required by applicable Law, regulation or agency or court order, provided that the Receiving Party shall (if legally possible under the circumstances) provide reasonable advance notice to the other Party and cooperate with such Disclosing Party (at the Disclosing Party’s expense) to allow the Disclosing Party to oppose such disclosure or to request confidential treatment of such Proprietary Information; and

(iii) Seller may disclose to the FDA the Proprietary Information of Purchaser related to the Products in connection with the Product NDA and Seller’s obligations pursuant to the Development and Transition Services Agreement.

(c) Nondisclosure of Terms; Press Release . Each Party agrees not to disclose the terms of this Agreement or any other Transaction Document to any Third Party without the prior written consent of the other Party, except: (i) to such Party’s advisors (including financial advisors, attorneys and accountants), potential and existing investors and others on a need-to-know basis, in each case under confidentiality obligations and provided that such Party covenants to use commercially reasonable efforts to make such confidentiality obligations associated with such disclosure as stringent as practicable, (ii) potential or actual acquirers or purchasers of such Party, or of such Party’s stock or any relevant portion of such Party’s assets, or potential or actual licensees or sublicensees, in each case under confidentiality obligations and provided that such Party covenants to use commercially reasonably efforts to make such confidentiality obligations associated with such disclosure as stringent as practicable, or (iii) to the extent necessary to comply with applicable Law, regulations, the directives of any Governmental Authority or any court order, provided that the Party required to make such disclosure shall promptly notify the other Party (if legally possible under the circumstances) and allow such other Party a reasonable time to oppose such disclosure and/or to seek limitations on the portion of this Agreement required to be disclosed. Notwithstanding the foregoing, subject to any required approval by ALZA as set forth in the Transferred Contracts, Seller and Purchaser (or their appropriate Affiliates) may each issue a press release to announce the execution of this Agreement in a form reasonably acceptable to each other and, following the issuance of such press releases, Purchaser and Seller may each disclose to Third Parties the information contained in such press release without the need for further approval by the other.

(d) The Parties hereby agree that the obligations set forth in this Section 5.4 shall remain in effect until the tenth anniversary of the Closing Date.

(e) Each Party agrees that any breach by it of any of its obligations set forth in this Section 5.4 may cause irreparable harm to the other Party for which monetary damages may

neither be adequate nor readily calculable and, therefore, in the event of any such breach by a Party of this Section 5.4, the other Party shall have the right to seek an injunction or any other appropriate equitable remedy without the necessity of posting a bond or other form of financial assurance and in addition to seeking any monetary damages that may be available to redress such breach.

SECTION 5.5 Tax Matters .

(a) Responsibility for Taxes and Tax Matters .

(i) Seller will be responsible for the preparation and filing of all Tax Returns of Seller (including Tax Returns required to be filed after the Closing Date) to the extent such Tax Returns include or relate to Seller’s use or ownership of the Transferred Assets attributable to the Pre-Closing Tax Period. Seller’s Tax Returns, to the extent they relate in any manner to the Transferred Assets or the transactions contemplated herein, shall be true, complete and correct in all material respects and prepared in accordance with applicable Law. Seller will be responsible for and make all payments of Taxes shown to be due on such Tax Returns to the extent they relate to the Transferred Assets.

(ii) Purchaser or Purchaser’s Affiliates will be responsible for the preparation and filing of all Tax Returns they are required to file with respect to Purchaser’s ownership or use of the Transferred Assets attributable to the Post-Closing Tax Period. Purchaser’s or its Affiliates’ Tax Returns, to the extent they relate to the Transferred Assets or the transactions contemplated herein, shall be true, complete and correct in all material respects and prepared in accordance with applicable Law. Purchaser will be responsible for and make all payments of Taxes shown to be due on such Tax Returns to the extent they relate to the Transferred Assets.

(b) Prior Tax Agreements . Seller shall terminate any and all of the Tax sharing, allocation, indemnification or similar agreements, arrangements or undertakings in effect, written or unwritten, on the Closing Date as between Seller and any other party under which Purchaser or the Transferred Assets could be liable for any Taxes or other claims of any party.

(c) Cooperation . To the extent relevant to the Transferred Assets, each Party shall (i) provide the other with such assistance as may reasonably be required in connection with the preparation of any Tax Return, any amended Tax Return or any claim for refund, the determination of a Liability for Taxes or a right to refund Taxes, and the conduct of any audit or other examination by any taxing authority or in connection with judicial or administrative proceedings relating to any liability for Taxes and (ii) retain and provide the other with all records or other information that may be relevant to the preparation of any Tax Returns, or the conduct of any audit or examination or other proceeding relating to Taxes. Such cooperation and information shall include providing copies of all relevant Tax Returns relating to any involved non-income Taxes, together with accompanying schedules and related work papers, documents

relating to rulings or other determinations by any Governmental Authority. Seller shall retain all documents, including prior years’ Tax Returns, supporting work schedules and other records or information with respect to all sales, use and employment Tax Returns and, absent the receipt by Seller of the relevant tax clearance certificates, shall not destroy or otherwise dispose of any such records for six (6) years after Closing without the prior written consent of Purchaser. Purchaser and Seller shall make their employees available to each other on a mutually convenient basis to provide explanation of any documents or information provided hereunder. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to prepare any documents, or determine any information not then in their possession in response to a request under this Section 5.5(c). Purchaser and Seller shall reimburse each other for any reasonable out-of-pocket costs incurred by the other in providing any Tax Return, document or other written information, and shall reimburse the other for any reasonable out-of-pocket expenses upon receipt of reasonable documentation of such costs. Any information obtained under this Section 5.5(c) shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting any Tax audit or Tax controversy proceeding.

(d) Withholding Taxes Resulting From Purchaser Action . If Purchaser is required to make a payment to Seller subject to a deduction or withholding of Tax, then (A) if such deduction or withholding of Tax obligation arises as a result of any action taken by Purchaser, including an assignment of all or any portion of this Agreement or any rights or obligations hereunder to an Affiliate or successor of Purchaser but excluding any other transaction expressly contemplated by this Agreement, and such action has the effect of increasing the amount of Tax deducted or withheld (a “ Purchaser Withholding Tax Action ”), then notwithstanding Section 2.4(c), the payment by Purchaser (in respect of which such deduction or withholding of Tax is required to be made) shall be increased by the amount necessary (the “ Additional Tax ”) to ensure that Seller receives an amount equal to the same amount that it would have received had no Purchaser Withholding Tax Action occurred, and (B) the Additional Tax shall be deducted and withheld by Purchaser from the payment made by Purchaser to Seller. The Additional Tax, along with any other Tax deducted and withheld from the payment made by Purchaser, shall be timely remitted to the proper Governmental Authority for the account of Seller in accordance with applicable Law and Purchaser shall provide Seller reasonable evidence of such remittance within 30 days of such remittance.

SECTION 5.6 Regulatory Matters . Purchaser acknowledges that, except as set forth in the Development and Transition Services Agreement, Purchaser and its Affiliates will be responsible for obtaining and maintaining the federal and state permits and licenses required in order for Purchaser and its Affiliates to use the Transferred Assets after the Closing, and, except for any obligation expressly set forth in this Agreement and the Development and Transition Services Agreement, that Seller will not have duties or obligations to Purchaser with respect to any such permits and licenses.

SECTION 5.7 Royalty-Related Rights and Obligations . The Parties agree to be bound by the terms and conditions of Exhibit D .

SECTION 5.8 Further Assurance . On and after the Closing Date, Seller shall from time to time, at the reasonable request of Purchaser, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further conveyances, notices and assumptions and such other instruments, and take such other actions, as Purchaser may reasonably request in order to more effectively consummate the transactions contemplated hereby and to transfer fully to Purchaser good and marketable title to the Transferred Assets and all of the titles, rights, interests, remedies, powers and privileges intended to be conveyed under the Transaction Documents (including assistance in the collection or reduction to possession of any of the Transferred Assets). On and after the Closing Date, Purchaser shall from time to time, at the reasonable request of Seller, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further notices and assumptions and such other instruments, and take such other actions, as Seller may reasonably request in order to more effectively consummate the transactions contemplated hereby and to transfer fully to Purchaser the Assumed Liabilities.

ARTICLE VI

CONDITIONS TO CLOSING

SECTION 6.1 Conditions to Obligations of Seller . The obligation of Seller to effect the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Seller in whole or in part):

(a) Representations, Warranties and Covenants . The representations and warranties of Purchaser contained in this Agreement shall be true and correct in all respects as of the Closing Date. Purchaser shall have performed all agreements and covenants required by this Agreement to be performed by it prior to or on the Closing Date. Seller shall have received a certificate as to satisfaction of the conditions set forth in this Section 6.1(a) dated as of the Closing Date and executed by a duly authorized officer of Purchaser.

(b) No Actions or Proceedings . No Action shall be pending or threatened by or before any Governmental Authority challenging or seeking to make illegal, to materially delay or otherwise to restrain or prohibit the consummation of the transactions contemplated by this Agreement.

(c) Resolutions of Purchaser . Seller shall have received a true and complete copy, certified by the Secretary or an Assistant Secretary of Purchaser, of the resolutions duly and validly adopted by the board of directors of Purchaser evidencing its authorization of the execution and delivery by Purchaser of the Transaction Documents and the consummation of the transactions contemplated by this Agreement.

(d) Consents and Approvals . Purchaser and Seller shall have received, each in form and substance satisfactory to Seller in its reasonable discretion, all Consents that Seller in

its reasonable discretion deems necessary or desirable for the consummation of the transactions contemplated by this Agreement.

(e) Documents . Seller shall have received from Purchaser all of the documents and agreements set forth in Section 2.7.

(f) Guaranty . Seller shall have received from Covidien International Finance S.A. a guaranty of the performance by Purchaser of its obligations under this Agreement and the Transaction Documents, in the form attached hereto as Exhibit L .

SECTION 6.2 Conditions to Obligations of Purchaser . The obligation of Purchaser to effect the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Purchaser in whole or in part):

(a) Representations, Warranties and Covenants . The representations and warranties of Seller contained in this Agreement shall be true and correct in all respects as of the Closing Date. Seller shall have performed all agreements and covenants required by this Agreement to be performed by it prior to or on the Closing Date. Purchaser shall have received a certificate as to satisfaction of the conditions set forth in this Section 6.2(a) dated as of the Closing Date and executed by a duly authorized director of Seller.

(c) Resolutions of Seller . Purchaser shall have received a true and complete copy, certified by the Secretary or an Assistant Secretary of Seller, of the resolutions duly and validly adopted by the board of directors of Seller evidencing its authorization of the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated by this Agreement.

(d) Consents and Approvals . Purchaser and Seller shall have received, each in form and substance satisfactory to Purchaser in its reasonable discretion, all (i) Consents that Purchaser in its reasonable discretion deems necessary or desirable for the consummation of the transactions contemplated by this Agreement and (ii) all consents of Third Parties set forth on Schedule 6.2(d) hereto.

(e) Documents . Purchaser shall have received from Seller all of the documents, agreements and other Transferred Assets set forth in Section 2.6.

(f) Guaranty . Purchaser shall have received from NPL a guaranty of the performance by Seller of its obligations under this Agreement and the Transaction Documents, in the form attached hereto as Exhibit M .

ARTICLE VII

INDEMNIFICATION

SECTION 7.1 Survival of Representations and Warranties and Covenants . Any claims regarding the representations and warranties of Purchaser and Seller contained in this Agreement shall survive the Closing (with respect to any given representation and warranty, the “ Survival Period ”) for a period of eighteen (18) months, unless otherwise expressly provided for in this Agreement; provided that, (i) the Survival Period for the representations and warranties of Seller set forth in Sections 2 (the first sentence only), 4(b) (first sentence only), 4(d), 8 and 9 of Exhibit E and (ii) the representations and warranties of Purchaser set forth in Sections 2 and 3 of Exhibit H shall be indefinite; and provided further that, the Survival Period for the representations and warranties of Seller set forth in Section 7 of Exhibit E shall be the period of any applicable statute of limitations plus sixty (60) days. The covenants and agreements contained herein shall survive following the Closing in accordance with their respective terms. Following the expiration of the applicable Survival Period, no Party shall make any claim for, or be subject to any Liabilities in respect of, any breach of such representations and warranties (except with respect to claims for indemnification for Third Party Claims for which written notice of such claim, pursuant to Section 7.2(c)(i), has been given prior to the expiration of the Survival Period).

SECTION 7.2 Indemnification .

(a) Indemnification by Seller . Seller shall indemnify and hold harmless Purchaser and its Affiliates and its and their officers, directors, employees, agents, successors and assigns (each, a “ Purchaser Indemnified Party ”) from and against any and all liabilities, losses, damages, costs and expenses, interest, awards, judgments and penalties, (including reasonable attorneys’ fees and expenses associated therewith and any of the foregoing that may result from any Third Party Claims) (collectively, “ Losses ”) suffered or incurred by any Purchaser Indemnified Party arising out of or resulting from the following:

(i) the breach of any representation or warranty made by Seller contained in this Agreement,

(ii) the breach of any covenant or agreement by Seller contained in this Agreement, and

(iii) the Retained Liabilities solely to the extent that such Losses are directly incurred by Purchaser as a result of (A) Third Party Claims made against a Purchaser Indemnified Party with respect to such Retained Liability or (B) Purchaser’s fulfillment of Seller’s obligations under any Retained Liability in the event that such fulfillment is reasonably required for Purchaser to maintain or exercise the rights granted to it under this Agreement, provided, however, the limitations set forth in this Section 7.2(a)(iii) shall not apply to Losses related to Taxes.

(b) Indemnification by Purchaser . Except as and to the extent due to any act or omission to act by Seller or its Affiliates that is in breach of any representation, warranty, covenant or agreement set forth herein or in any of the Transaction Documents, Purchaser shall indemnify and hold harmless Seller and its Affiliates, and its and their officers, directors, employees, agents, successors and assigns (each a “ Seller Indemnified Party ”) from and against any and all Losses suffered or incurred by them arising out of or resulting from the following:

(i) the breach of any representation or warranty made by the Purchaser contained in this Agreement,

(ii) the breach of any covenant or agreement by Purchaser contained in this Agreement,

(iii) the Assumed Liabilities,

(iv) the use, possession or ownership of the Transferred Assets by or on behalf of the Purchaser or its Affiliates or Licensees,

(v) the performance, or breach or failure to perform, by Purchaser of its obligations or covenants under the Transferred Contracts, and

(vi) the research, development, manufacture, distribution, use, testing, promotion, marketing, or sale or other disposition of Products by or on behalf of the Purchaser or its Affiliates or Licensees.

(i) Whenever any Loss is asserted against or incurred by a Purchaser Indemnified Party or Seller Indemnified Party (the “ Indemnified Party ”) which the Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement, the Indemnified Party will give written notice thereof (a “ Claim ”) to the other Party (the “ Indemnifying Party ”). The Indemnified Party will furnish to the Indemnifying Party in reasonable detail such information as the Indemnified Party may have with respect to the Claim. The failure to give such notice will not relieve the Indemnifying Party of its indemnification obligations under this Agreement, unless the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability to defend any Third Party Claim which forms the basis for indemnification.

(ii) Within thirty (30) days after delivery of such notice, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, and at its expense, undertake the defense of such Third Party Claim with attorneys of its own choosing; provided, that the Indemnifying Party shall not be entitled to undertake the defense of any Third Party Claim related to Taxes. In the event that the Indemnifying Party does not assume control of such defense, the Indemnified Party may undertake the defense of such Third Party Claim at the expense of the Indemnifying Party.

(iii) The Party not controlling the defense of a Third Party Claim may participate therein at its own expense, provided, that if the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such action, suit, proceeding or claim, the Indemnifying Party will be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith, provided further, however, that in no event will the Indemnifying Party be responsible for the fees and expenses of more than one counsel in any one jurisdiction for all Indemnified Parties.

(iv) The Party controlling the defense of a Third Party Claim will keep the other Party advised of the status of such action, suit, proceeding or claim and the defense thereof and will consider recommendations made by the other Party with respect thereto. As reasonably requested by, and at the expense of, the Party controlling such defense, the other Party will cooperate in such defense and make available to the Party controlling such defense all witnesses, pertinent records, materials and information in such other Party’s possession or under such other Party’s control relating thereto.

(v) The Indemnified Party will not agree to any settlement of any action, suit, proceeding or claim without the prior written consent of the Indemnifying Party, which will not be unreasonably withheld or delayed. The Indemnifying Party will not consent to entry of any judgment or enter into any settlement that admits fault on the part of the Indemnified Party or that does not grant to the Indemnified Party an unconditional release of all relevant claims with no continuing obligations or restrictions on the part of the Indemnified Party, except with the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed. In the event that the Indemnified Party refuses to consent to the entry of a judgment or a settlement for which the Indemnifying Party is solely and entirely responsible and for which the payment of monetary damages is the sole remedy, following such refusal, the liability of the Indemnifying Party to the Indemnified Party will be fixed at the amount of any money damages provided in the proposed judgment or settlement.

(d) Limitations on Indemnification .

(i) The indemnification provided in this Article VII shall be the sole and exclusive remedy of the Parties after the Closing for monetary damages for Claims; provided, however, this exclusive remedy for damages does not preclude a Party from bringing an action for (A) fraud or (B) specific performance or other equitable remedy to require a Party to perform its obligations under this Agreement.

(ii) Notwithstanding anything to the contrary herein, except for Losses arising from fraud, the aggregate Liability of Seller under this Article VII for Losses arising from or attributable to any breach of the representation and warranties and covenants made by Seller in this Agreement or any certificate or other instrument delivered by Seller pursuant to this Agreement (other than the Development and Transition Services Agreement) shall be limited to $10,000,000; provided, however, the foregoing limitation shall not apply to Losses related to

Taxes, and provided further that for Losses resulting from breach of Seller’s warranty in Section 4(e) of Exhibit E of this Agreement, the foregoing limit shall not apply and instead the limit for such Losses shall be the lesser of (A) $30,000,000, or (B) the actual aggregate amount of any milestone payments made to Seller (through the date of termination by ALZA Corporation, hereinafter “ALZA”, that gives rise to Seller’s breach of such warranty) pursuant to Section 2.4(a)(iv) and Section 2.4(a)(v) plus the amount to be paid to Seller pursuant to Section 2.4(a)(ii).

(iii) UNDER NO CIRCUMSTANCES WILL A PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS, LOST OPPORTUNITIES, OR ANY OTHER PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES IRRESPECTIVE OF THE THEORY UNDER WHICH SUCH ACTION IS BROUGHT, WHETHER IT WAS CAUSED OR ALLEGEDLY CAUSED BY THE NEGLIGENCE OF SUCH PARTY OR WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT, NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 7.2(d)(iii) SHALL LIMIT OR RESTRICT A PARTY’S INDEMNIFICATION OBLIGATION OR LIABILITY FOR LOSSES WITH RESPECT TO THIRD PARTY CLAIMS PURSUANT TO THIS ARTICLE VII.

(e) Adjustment to Purchase Price . Any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the consideration set forth in Section 2.4(a) for Tax purposes.

(f) If ALZA terminates the ALZA Development and Commercialization Agreement (as defined in Exhibit C of this Agreement) due specifically to the uncured breach or default by Purchaser or Purchaser’s Affiliate or Licensee occurring after the Effective Date in the performance or observance of any of the material obligations (including diligence obligations) under such ALZA Development and Commercialization Agreement, then (in addition to any indemnification obligation Purchaser may have under Section 7.2(b) for any Losses of Seller resulting from such termination) Purchaser shall pay to Seller all amounts of royalties paid to Purchaser (or its Affiliate) by ALZA under Section 12.5(c)(i) of the ALZA Development and Commercialization Agreement after such termination (such payments to be made within thirty (30) days of receipt of the applicable royalty payments by ALZA); provided, that the foregoing payments shall be reduced by the following percentage amounts, if the ALZA termination occurs in the specified amount of time after first commercial sale by Purchaser (or its Affiliate or Licensee) of Product in the Territory: (w) [*]% if after one year after such launch; (x) [*]% if after two years after such launch; (y) [*]% if after three years after such launch; or (z) [*]% [*] if such ALZA termination occurs after four years after such launch.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any conflicts of laws provisions or principles that would require application of other law.

SECTION 8.2 Venue .

(a) Any proceeding relating to this Agreement or the enforcement of any provision of this Agreement shall be brought or otherwise commenced in the United States District Court for the Southern District of New York and, if such court does not have subject matter jurisdiction, in a New York State court of appropriate jurisdiction located within any portion of the Southern District of New York. Each Party to this Agreement:

(i) expressly and irrevocably consents and submits to the non-exclusive jurisdiction of each state and federal court (as appropriate) located in the Southern District of New York (and each appellate court with respect to such court) in connection with any such Proceeding,

(ii) agrees that each state and federal court (as appropriate) located in the Southern District of New York shall be deemed to be a convenient forum, and

(iii) agrees not to assert (by way of motion, as a defense or otherwise), in any such proceeding commenced in any state or federal court (as appropriate) located in the Southern District of New York, any claim that such Party is not subject personally to the jurisdiction of such court, that such proceeding has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter of this Agreement may not be enforced in or by such court (unless it is unambiguously clear that such court does not have appropriate subject matter jurisdiction).

(b) Notwithstanding subsection (a) set forth immediately above, the Parties agree that if any proceeding is commenced against any Indemnified Party by any Third Party in or before any court or other tribunal anywhere in the world, then such Indemnified Party may proceed against the such Party in or before such court or other tribunal with respect to any indemnification claim or other claim arising from or relating to such proceeding or any of the matters alleged therein or any of the circumstances giving rise thereto.

SECTION 8.3 Amendment . This Agreement may not be amended, modified or supplemented except by an instrument in writing signed by appropriate and duly authorized representatives of Seller and Purchaser.

SECTION 8.4 Expenses . All costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with

this Agreement and the Transactions contemplated hereby shall be paid by the Party incurring such costs and expenses, whether or not the Closing shall have occurred.

SECTION 8.5 Notices . All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial messenger or courier service, mailed by registered or certified mail (return receipt requested) or sent via facsimile (with acknowledgment of complete transmission) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice), provided, however, that notices sent by mail shall not be deemed given until received:

If to Purchaser, to:

Covidien

675 McDonnell Blvd.

Hazelwood, MO 63042

Attn: Charles Bramlage

President, Pharmaceutical Products/Imaging

(314) 654-6220 – telephone

(314) 654-6020 – facsimile

with copies (which shall not constitute notice) to:

Covidien

675 McDonnell Blvd.

Hazelwood, MO 63042

Attn: C. Stephen Kriegh

Vice President, Legal

(314) 654-6040 – telephone

(314) 654-7181 – facsimile

Covidien

15 Hampshire Street

Mansfield, MA 02048

Attn: Matthew J. Nicolella

Vice President – Chief Mergers & Acquisitions/Licensing Counsel

(508) 261-8044 – telephone

(508) 261-8544 – facsimile

If to Seller, to:

Neuromed Development Inc.

Parker House, Wildey Business Park

Wildey Road

St. Michael, BB14006

Barbados

Attention: Gillian Clark

Facsimile No.: (246) 436-9812

with copies (which shall not constitute notice) to:

Neuromed Pharmaceuticals Ltd.

301-2389 Health Sciences Mall

Vancouver, BC V6T1Z3

Canada

Attention: Christopher Gallen

and

Cooley Godward Kronish LLP

Five Palo Alto Square

Palo Alto, CA 94306

Attention: Barclay James Kamb

Laura A. Berezin

Facsimile No.: (650) 849-7400

SECTION 8.6 Severability . In the event that any provision of this Agreement or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and the application of such provision to other persons or circumstances shall be interpreted so as reasonably to effect the intent of the Parties. The Parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

SECTION 8.7 Entire Agreement . This Agreement, along with the other Transaction Documents and instruments delivered in connection herewith, constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements, representations, undertakings and understandings, both written and oral, between Seller and Purchaser with respect to the subject matter hereof.

SECTION 8.8 Assignment . Subject to this Section 8.8, this Agreement shall not be assignable by any Party to any Third Party without the prior written consent of the other Party. Notwithstanding the foregoing, a Party may assign this Agreement, without the written consent of the other Party, (a) to an Affiliate, provided that the assigning Party guarantees the performance of this Agreement by such Affiliate, or (b) to a successor to all or substantially all of such assigning Party’s stock or the relevant portion of its assets or business to which this Agreement relates (whether by stock purchase, asset purchase, merger or otherwise), provided that any such assignee agrees in writing to be bound by the terms of this Agreement. In addition, Seller may assign its right to receive payment hereunder to any Third Party with the consent of Purchaser (not to be unreasonably withheld), and provided, that any such assignee of the right to receive payment hereunder shall not have the power or right to assert any of the rights of Seller hereunder against Purchaser or any of its Affiliates. Any assignment of this Agreement in contravention of this Section 8.8 shall be null and void.

SECTION 8.9 Delays or Omissions . Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Party to this Agreement upon any breach or default of the other Party under this Agreement shall impair any such right, power

or remedy of such non-defaulting Party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or a waiver or acquiescence with respect to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any Party to this Agreement, shall be cumulative and not alternative.

SECTION 8.10 No Third Party Beneficiaries . This Agreement shall be binding upon and inure solely to the benefit of the Parties and their permitted successors and assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

SECTION 8.11 Counterparts . This Agreement may be executed in counterparts, all of which together shall constitute one and the same instrument.

SECTION 8.12 Specific Performance . Each of the Parties acknowledges and agrees that the other Party may be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached or violated. Accordingly, each of the Parties agrees that, without posting bond or other undertaking, the other Parties will be entitled to seek an injunction or injunctions to prevent breaches or violations of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any proceeding instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter in addition to any other remedy to which it may be entitled, at law or in equity. Each Party further agrees that, in the event of any action for specific performance in respect of such breach or violation, it will not assert that the defense that a remedy at law would be adequate.

SECTION 8.13 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION AS BETWEEN THE PARTIES DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.13 .

In witness whereof, the Parties hereto have caused this Agreement to be executed as of the date first written above by their respective duly authorized officers.

MALLINCKRODT INC.


By: /s/ John H. Masterson		Witnessed this 11 ^th day of June, 2009

Name: John H. Masterson		By: /s/ Suzanne

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