LICENSE AGREEMENT

EXECUTION COPY

ELAN PHARMA INTERNATIONAL

LIMITED

AND

NITROMED, INC.

LICENSE AGREEMENT

INDEX

THIS AGREEMENT is dated 9 February, 2007.

PARTIES:

• • (1)                                  ELAN PHARMA INTERNATIONAL LIMITED , a public limited company incorporated under the laws of Ireland, having its registered office at Monksland Industrial Estate, Athlone, County Westmeath Ireland (" Elan "); and

    (2)                                  NITROMED, INC. , a Delaware corporation, having its principal place of business at 125 Spring Street, Lexington MA 02421-7801 (" NitroMed ").

    BACKGROUND:

    (A)                               Elan possesses certain proprietary technology and confidential information used or useful in the manufacture and use of pharmaceutical products displaying a sustained or modified release profile, as described more fully below.

    (B)                                 NitroMed is developing pharmaceutical formulations containing the Compound, as defined below.

    (C)                                 NitroMed wishes to enter into this Agreement to obtain the right to utilize the Elan Intellectual Property (as defined below) to import, use, offer for sale and sell the Product in the Field in the Territory, on the terms and conditions set out below.

    (D)                                Simultaneously with this Agreement, Elan’s Affiliate EDDI (as defined below) and NitroMed have entered into a Development Agreement whereby EDDI is to develop the Product (the " Development Agreement ").

    TERMS:

    The parties agree as follows:

    1.                                       DEFINITIONS AND INTERPRETATION

    • 1.1.                               Definitions .  In this Agreement:

    " Affiliate " means any corporation or entity controlling, controlled or under common control with Elan or NitroMed, as the case may be.  For the purposes of this Agreement, "control" means the direct or indirect ownership of more than 50% of the issued voting shares or other voting rights of the subject entity to elect directors, or if not meeting the preceding criteria, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists.

    " Agreement " means this license agreement (which expression shall be deemed to include its Recitals and Schedules).

    " BiDil " means the existing immediate release product containing the Compound that is currently marketed in the United States by NitroMed.

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• • " Business Days " means Monday to Friday inclusive, excluding any days on which the clearing banks are generally closed in Dublin and/or New York.

    " Claims " means all and any claims (whether successful or otherwise), loss, liability, damages and expenses, including reasonable attorneys’ fees and expenses and legal costs.

    " CMC Section " means the chemistry, manufacturing, and controls section of the Regulatory Application in the USA as defined in 21 C.F.R. Section 314.50 (1) relating to the Product, as may be amended from time to time, and/or its equivalent in other Regulatory Applications.

    " Competitive Product " means any pharmaceutical product (other than the Product itself) that has received final regulatory approval (including marketing, pricing, reimbursement and any other applicable approval) from the applicable Governmental Authority in a country in the Territory for use solely for the treatment of heart failure as an adjunct to current standard therapy in self-identified black patients to improve survival.

    " Compound " means the combination of the active drug substances isosorbide dinitrate and hydralazine HCl and/or other salts, bases and isomeric forms of each.

    " Compound Data " means data relating to the Compound generated by NitroMed or EDDI pursuant to the R&D Program.

    " DMF " means the Drug Master File, as defined in the 21 C.F.R., Section 314.420 and/or its equivalent in the other countries of the Territory, which Elan (or an Affiliate) may file in respect of the Elan Technology and the application of the Elan Technology as regards the Product.

    " EDDI " means Elan Drug Delivery  Inc., a Delaware corporation, having its principal place of business at 3000 Horizon Drive, King of Prussia, PA 19406

    " EEA " means the Member States of the European Economic Area, as same may change from time to time in terms of Member States.

    " EHI " means Elan Holdings, Inc a Delaware corporation having its principal place of business at 1300 Gould Drive, Gainesville, GA 30504, USA.

    " Effective Date " means the date of this Agreement as first set forth above.

    " Elan Improvements " means any and all improvements to the Elan Patents, the Elan Know-How, the Elan Technology and/or the Product Patents that have been conceived, created, developed and/or otherwise invented by Elan and/or NitroMed under the R&D Program, or otherwise pursuant to this Agreement.

    " Elan Intellectual Property " means the Elan Know-How, the Elan Patents, the Elan Improvements and the Product Patents.

    " Elan Know-How " means any and all rights owned, licensed or controlled by Elan as of the Effective Date to any scientific, pharmaceutical or technical information, data, discovery, invention (whether patentable or not), know-how, substances, techniques, processes, systems, formulations, designs and expertise relating to the Elan Technology which is not generally known to the public.

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• • " Elan Patents " means any and all Patent Rights now existing, currently pending or hereafter filed by Elan relating to the Elan Technology.

    " Elan Technology " means the SODAS â  oral controlled release formulation technology that comprises the formation of 0.5-5mm beads containing an active agent and excipients which can be coated with a product-specific modified release polymer and then formulated into a final formulation such as a sprinkle, a tablet or a capsule, as applied in the Elan Know-How.

    " Elan Trademark " means SODAS ®  or such other trade marks as Elan may from time to time reasonably specify.

    " EXW " (ex works) has the same meaning as in the ICC Incoterms 2000, International Rules for the Interpretation of Trade Terms, ICC Publication No. 560.

    " FDA " means the United States Food and Drug Administration or any other successor agency whose approval is necessary to market the Product in the United States of America.

    " Field " means the use as a prescription or over-the-counter pharmaceutical product in humans.

    " Force Majeure " means any cause or condition beyond the reasonable control of the party obliged to perform, including acts of God, acts of government (in particular with respect to the refusal to issue necessary import or export licenses), fire, flood, earthquake, war, acts of terrorism, riots or embargoes, strikes or other labour difficulties affecting a party.

    " Governmental Authority " means all governmental and regulatory bodies, agencies, departments or entities, whether or not located in the Territory, which regulate, direct or control commercial and other related activities in or with the Territory.

    " In Market " means the sale of the Product in the Territory by NitroMed, or where applicable, by a permitted sub-licensee, to an unaffiliated third party, such as a wholesaler, distributor, managed care organisation, hospital or pharmacy, and shall exclude the transfer pricing of the Product by one NitroMed Affiliate to another NitroMed Affiliate or a permitted sub-licensee.

    " Major Market(s) " means the United States, the United Kingdom, France, Germany, Spain and Italy and such additional countries as may be agreed by the parties from time to time.

    " Major Territories " means the United States, the United Kingdom, France, Germany, Spain, Italy, Canada, Australia, New Zealand, Japan, South Korea and Brazil.

    " Net Sales " shall, subject to the provisions of Clause 7.4, mean in the case of Product sold by NitroMed, or by a permitted sub-licensee, the aggregate gross In Market sales proceeds billed for the Product by NitroMed, or by a permitted sub-licensee, as the case may be, in accordance with generally accepted accounting principles, less the following:

    • • (i)                                      trade, cash or quantity discounts, allowances, adjustments and rejections;

        (ii)                                   rebates, recalls (other than where the Product is replaced without charge) and returns;

        (iii)                                price reductions or rebates imposed by Governmental Authorities;

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• • • • (iv)                               debts arising from failure to collect on customer accounts (such debts not to exceed 1% of gross In Market sales);

        (v)                                  sales, excise, turnover, inventory, value-added and similar taxes assessed on the royalty-bearing sale of such Product, but not including any taxes on income paid by or assessed against NitroMed or a permitted sub-licensee;

        (vi)                               transportation, importation, shipping, insurance and other handling expenses directly chargeable to the royalty-bearing sale of the Product, but only to the extent that such expenses are separately delineated in the applicable invoices; and

        (vii)                            chargebacks granted to drug wholesalers or their customers in cases where there are not direct shipments to such customers by NitroMed or its permitted sublicense.

    Any discretionary rebates, discounts or adjustments shall be commercially reasonable and consistent with standard industry practices.

    " NitroMed Improvements " means any and all improvements to the NitroMed Patents, the NitroMed Know-How and/or the Compound that have been conceived, created, developed and/or otherwise invented by NitroMed and/or Elan under the R&D Program, or otherwise pursuant to this Agreement.

    " NitroMed Intellectual Property " means the NitroMed Know-How, the NitroMed Patents and the NitroMed Improvements.

    " NitroMed Know-How " means any and all rights owned, licensed or controlled by NitroMed (otherwise than pursuant to the Elan License) to any scientific, pharmaceutical or technical information, data, discovery, invention (whether patentable or not), know-how, substances, techniques, processes, systems, formulations and designs and expertise relating to the Compound which is not generally known to the public.

    " NitroMed Patents " means any and all Patent Rights now existing, currently pending or hereafter filed, or acquired or licensed by NitroMed relating to the Compound.

    " NitroMed Trademark " means NitroMed’s rights to use the trademark(s) NitroMed ® , BiDil ® , NitRx ® , the NitroMed "N" logo and such other trademarks as NitroMed may from time to time reasonably specify.

    " Patent Rights " means any and all rights under any and all patent applications and/or issued or granted patents, now existing, currently pending or hereafter filed, including, but not limited to, provisional applications, substitutions, divisionals, continuations, continuations-in-part, renewals and any foreign counterparts thereof or equivalents thereto, including the right to claim priority from any of the foregoing under the Paris Convention, and all patents issuing or granted on any of the foregoing, and any foreign counterparts thereof, together with all registrations, reissues, re-examinations, supplemental protection certificates, or extensions thereof, and any foreign counterparts thereof, or any other government-issued rights substantially equivalent to the foregoing.

    " Product " means the once or twice-daily oral tablet or oral capsule formulation(s) incorporating the Elan Technology and containing the Compound as its sole active combination of ingredients, being developed pursuant to the R&D Program.

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• • " Product Patents " means Patent Rights specifically exemplifying or claiming the Product.  For the avoidance of doubt, Product Patents do not include the NitroMed Patents or the Elan Patents.

    " Prosecute " means in relation to a class of intellectual property:

    (a)                                   to secure the grant of any patent application within such class;

    (b)                                  to file and prosecute patent applications on patentable inventions and discoveries relating to that class;

    (c)                                   to defend all such applications against third party oppositions; and

    (d)                                  to maintain in force any issued letters patent relating to the same

    and " Prosecution " has a corresponding meaning.

    " R&D Program " means the research and development program set forth in the Development Agreement.

    " Regulatory Application " means any regulatory application or any other application for marketing approval for the Product, which NitroMed may file in the Territory, including any supplements or amendments thereto which NitroMed may file.

    " Regulatory Approval " means the final approval to market the Product in any country of the Territory, including all approvals which are required to launch the Product in the normal course of business.

    " Supply Agreement " means the manufacturing and supply agreement to be negotiated in good faith between Elan and NitroMed whereby Elan will supply substantially all of NitroMed’s commercial requirements of the Product, subject to the terms herein and therein, and which shall incorporate the key terms set out in Schedule 2.

    " Technical Failure " means the inability to achieve a pharmacokinetic profile for Product (assessing Cmax (maximum concentration) and AUC (area under the curve) criteria within 80-125% of mean data) consistent with that of BiDil administered three times daily (at 6 hour intervals).

    " Technological Competitor " means a person or entity listed in Schedule 1, and divisions, subsidiaries and successors thereof, and such other corporate entities that, other than as a de minimis activity, develop oral drug delivery technology displaying a sustained release or modified release profile and/or manufacture products displaying a sustained or modified release profile that Elan may request to add to Schedule 1 from time to time, subject to the consent of NitroMed, which consent may not be unreasonably withheld or delayed.

    " Term " means the term of this Agreement, as set out in Clause 9.

    " Territory " means all of the countries of the world.

    " $ " and " US$ " mean United States Dollars.

    • 1.2.                               Further Definitions .  In addition, the following definitions have the meanings in the Clauses corresponding thereto, as set forth below:

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• • • 1.3.                               Interpretation .  In this Agreement:

      • 1.3.1                         the singular includes the plural and vice versa, and unless the context or subject otherwise requires, references to words in one gender include references to the other genders;

        1.3.2                         references to persons include all natural or legal persons including unincorporated associations;

        1.3.3                         unless the context otherwise requires, reference to a recital, article, paragraph, provision, clause or schedule is to a recital, article, paragraph, provision, clause or schedule of or to this Agreement;

        1.3.4                         the headings in this Agreement are inserted for convenience only and do not affect its construction; and

        1.3.5                         the expressions "include", "includes", "including", "in particular" and similar expressions shall be construed without limitation.

2.                                       THE LICENSE

• • • 2.1.                               Elan License to NitroMed .  Subject to the terms of this Agreement, Elan hereby grants to NitroMed for the Term an exclusive license (the " Elan License ") to the Elan Intellectual Property to import, use, offer for sale and sell the Product in the Field in the Territory. For the avoidance of doubt, the Elan License does not include the right to perform any formulation and/or process development activities for the Product.

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• • • 2.2.                               Sub-licensing .  NitroMed shall be entitled to grant sub-licenses in respect of the Elan Intellectual Property in one or more countries of the Territory, subject to the following conditions:

      • 2.2.1                         NitroMed shall have the right to grant a sub-license to a Technological Competitor solely for the purposes of co-promotion, distribution and/or marketing in countries where a DMF or equivalent procedure exists such that Elan will not be required to disclose to the sub-licensee or publicly Elan’s Confidential Information; outside of these countries NitroMed shall have the right to grant a sub-license to a Technological Competitor for the purposes aforementioned provided all of the following conditions are met (and in the case of a Technological Competitor acquiring control of NitroMed pursuant to Clause 13.2.4, or the assignment of this Agreement to a Technological Competitor pursuant to Clause 13.2.2, the requirements of this Clause 2.2.1 shall apply):

        (a) the potential sub-licensee does not generate a majority of its revenues in connection with activities in relation to oral controlled release technologies;

        (b) the commercialisation activities in relation to the Product will be carried out by a separate division that is  not  involved in any activities related to sub-licensee’s oral controlled release technology;

        (c) NitroMed has used its reasonable best efforts to ensure that the potential sub-licensee does not gain access to Elan’s confidential information in relation to the chemistry, manufacturing and control processes for the Product and to this end the parties agree to negotiate in good faith an appropriate three-way confidentiality agreement between NitroMed, Elan and the potential sub-licensee; and

        (d) if such access to information cannot be avoided then Elan and NitroMed shall discuss in good faith the establishment of mechanisms to allow for the maximum reasonable protection of Elan’s confidential information whilst permitting the commercialisation of the Product in such countries, which will ensure that the potential sub-licensee provides, directly to Elan, appropriate undertakings, with appropriate rights of enforcement of those undertakings.

        2.2.2                         NitroMed shall not grant a sub-license to a person selling Competitive Products, and any sub-license shall automatically terminate upon the sub-licensee selling Competitive Products;

        2.2.3                         Any sub-license granted shall be in the same terms as the terms of this Agreement insofar as they are applicable, mutatis mutandis, but excluding the right to grant a sub-license or a production license;

        2.2.4                         For the avoidance of doubt, NitroMed shall ensure that Elan shall have the same rights of audit and inspection vis-à-vis a sub-licensee as Elan has vis-à-vis NitroMed pursuant to this Agreement;

        2.2.5                         NitroMed shall be liable to Elan for all acts and omissions of any sub-licensee as though such acts and omissions were by NitroMed; and

        2.2.6                         NitroMed shall undertake to protect the confidentiality of Elan’s chemistry, manufacturing and control processes for the Product in its dealings with permitted sub-

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• • • • licensees and shall not disclose any information from the CMC Section to a any third party, including a permitted sub-licensee, without the prior written consent of Elan, which consent shall not be unreasonably withheld or delayed, other than as contemplated pursuant to the terms of Clause 2.2.1.

      2.3.                               Section 365(n) of the Bankruptcy Code .  The licenses granted under this Agreement shall be treated as licenses of rights to "intellectual property" (as defined in Section 101(56) of Title 11 of the United States Code, as amended (the " Bankruptcy Code ")) for purposes of Section 365(n) of the Bankruptcy Code.  The parties agree that each party may elect to retain and may fully exercise all of its rights and elections under the Bankruptcy Code; provided that the electing party complies with the terms of this Agreement.

3.                                       INTELLECTUAL PROPERTY

• • • 3.1.                               Ownership of Intellectual Property .

      • 3.1.1                         Elan shall be and remain the owner of the Elan Intellectual Property.

        3.1.2                         NitroMed shall be and remain the owner of the NitroMed Intellectual Property.

      3.2.                               Patent Prosecution and Maintenance .

      • 3.2.1                         Elan, at its sole discretion and expense, may Prosecute the Elan Intellectual Property in the Territory.

        3.2.2                         NitroMed, at its sole discretion and expense, may Prosecute the NitroMed Intellectual Property in the Territory.

        3.2.3                         Elan shall promptly notify NitroMed of any developments that fall within the NitroMed Intellectual Property.  NitroMed shall promptly notify Elan of any developments that fall within the Elan Intellectual Property.

        3.2.4                         Each party shall provide the other with reasonable support in the Prosecution of the Elan Intellectual Property and the NitroMed Intellectual Property in respect of any inventions that were developed under this Agreement and shall provide all information and/or data in its possession that is necessary to support any relevant patent application in the Territory.

        3.2.5                         NitroMed and Elan shall discuss the filing strategy for any proposed patent application(s) in the Territory and shall co-ordinate the filing of such patent application(s) between the two parties in order to protect the intellectual property rights of both parties in the Territory.

        3.2.6                         In the event that Elan does not wish to Prosecute the Elan Intellectual Property, or some part thereof, in a particular country, Elan shall notify NitroMed prior to ceasing Prosecution, and NitroMed shall then have the right to assume such further action at its own expense.

      3.3.                               Enforcement .

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• • • With respect to infringement of the Elan Intellectual Property or the NitroMed Intellectual Property as it relates to the Product or a Competitive Product the parties agree as follows:

      • 3.3.1                         Elan and NitroMed shall promptly inform each other in writing of any actual or alleged unauthorized use of the Elan Intellectual Property or the NitroMed Intellectual Property by a third party of which it becomes aware and provide the other party with any available evidence of such unauthorized use.

        3.3.2                         Subject to Clause 3.3.5, Elan shall have the right to enforce for Elan’s own benefit (including by agreement or by litigation) Elan’s intellectual property rights at its own instigation.  To the extent such rights relate to Elan Improvements and/or Product Patents, NitroMed shall reasonably cooperate with Elan to enforce such rights, provided that NitroMed is indemnified for any out-of-pocket expenses incurred in providing such cooperation.  NitroMed shall be kept advised at all times of all such suits or proceedings under this Clause 3.3.2 brought by Elan. Any recovery, lump-sum settlement, royalty payment or other consideration received by Elan for past infringement or misappropriation as a result of litigation related to the Elan Improvements and/or Product Patents shall be disbursed as follows:

        • • 3.3.2.1                first, Elan and NitroMed shall be reimbursed pro rata for the expenses of the suit actually incurred by them in connection with the alleged infringement or misappropriation including, without limitation, attorney’s fees and court costs;

            3.3.2.2                second, any amount awarded in relation to actual damage (calculated on the basis of lost sales, reasonable royalty, account of profits or otherwise) shall be paid [**]% to Elan and [**]% to NitroMed; and

            3.3.2.3                third, all other amounts shall be paid [**]% to Elan and [**]% to NitroMed.

        3.3.3                         In the event Elan elects not to enforce the Elan Improvements and/or Product Patents pursuant to Clause 3.3.2 as a result of an actual unauthorised use of such Elan intellectual property by a third party and NitroMed has actual money damages from such unauthorised use, NitroMed may institute such infringement suit at its own expense. Elan shall reasonably cooperate with NitroMed to enforce such rights, provided that Elan is indemnified for any out-of-pocket expenses incurred in providing such cooperation. Elan shall be kept advised at all times of all such suits or proceedings under this Clause 3.3.3 brought by NitroMed. NitroMed shall not settle or compromise any such infringement suit without the prior written consent of Elan which shall not be unreasonably withheld. Any recovery, lump sum settlement, royalty payment or other consideration received by NitroMed for past infringement or misappropriation as a result of litigation related to the Elan Improvements and/or Product Patents shall be disbursed in the same manner as laid down in Clause 3.3.2.

        3.3.4                         Subject to Clause 3.3.5, NitroMed shall have the right to enforce for NitroMed’s own benefit (including by agreement or through litigation) NitroMed’s intellectual property rights at its own instigation.  To the extent such rights relate to NitroMed Improvements, Elan shall fully cooperate with NitroMed to enforce such rights, provided that Elan is indemnified for out-of-pocket expenses incurred in providing such

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• • • • cooperation.  Elan shall be kept advised at all times of all such suits or proceedings under this Clause 3.3.4 brought by NitroMed.

        3.3.5                         In the event that Elan and NitroMed Orange Book listed patents are collectively challenged, the Parties shall have joint enforcement rights. In particular under the foregoing circumstances where a "Paragraph IV Certification" (as defined in CFR Title 21) is filed by a third party against Product in the United States, the parties shall consult as to the commercial reasonableness of suing such third party for patent infringement within 15 days of receipt of such notice.  Following such discussion, the parties shall be entitled jointly to commence such action within 45 days of the date of such notice, except that no action shall be taken in relation to a party’s patent where that same party’s litigation counsel believes such claim to be baseless (even considering the doctrine of equivalents).

      3.4.                               Defense of and Liability for Infringement Claims .

      • 3.4.1                         Each of the parties shall promptly notify the other party in writing of any Claim made or brought against either of them alleging infringement or other unauthorised use of the proprietary rights of a third party arising from the development, manufacture, importation, use, offer for sale, sale or other commercialization of the Product in the Territory (" Infringement Claim ").

        3.4.2                         NitroMed shall indemnify and hold harmless Elan against all Infringement Claims resulting from:

        • • 3.4.2.1                a breach by NitroMed of its representations and warranties set forth in Clauses 11.2.3 or 11.2.4; or

            3.4.2.2                intellectual property which is owned by, licensed to or controlled by NitroMed, any Affiliate of NitroMed or a permitted sub-licensee in the country in question, or which is/was generated pursuant to some agreement between NitroMed (or an Affiliate or permitted sub-licensee) on the one hand and a third party on the other.

        3.4.3                         Subject to Clauses 3.4.4, 3.4.5 and 3.4.6 Elan shall indemnify and hold harmless NitroMed against all Infringement Claims resulting from a breach by Elan of its representations and warranties set forth in Clauses 11.1.3 and 11.1.4. For the avoidance of doubt, the parties agree that NitroMed shall indemnify and hold harmless Elan against all claims (whether successful or otherwise), damages, losses, liabilities and expenses (including reasonable attorney’s fees) which may arise in connection with any Infringement Claim where such Infringement Claim does not result from a breach by Elan of any of its representations or warranties set forth in Clauses 11.1.3 and 11.1.4 or by NitroMed of its representations and warranties set forth in Clauses 11.2.3 and 11.2.4.

        3.4.4                         Subject to Clauses 3.4.5 and 3.4.6, Elan’s aggregate cumulative liability pursuant to Clause 3.4.3 (and/or under any other provision of this Agreement) in respect of those Infringement Claims for which Elan is liable under Clause 3.4.3 (" Infringement Claim Fees ") shall not exceed certain limitations as follows:

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• • • • • • • 3.4.4.1                                            [**]% of any lump sum payment due to a third party as a result of a court order or settlement in respect of the Infringement Claim (including a claim for damages); and

              3.4.4.2                                            [**]% of any license fees due to a third party under any license entered into hereunder in order to develop, manufacture, sell or otherwise commercialize the Product in the Territory under this Agreement.

        3.4.5                              NitroMed will be entitled to recover amounts due by Elan to NitroMed under Clause 3.4.4 solely as a credit against the royalties payable by NitroMed to Elan under the provisions of Clause 7.3, provided, however, that the maximum credit which may be claimed by NitroMed in any one such year will be [**]% of the royalty otherwise payable to Elan until such time as the aggregate amount of the credit due by Elan to NitroMed pursuant to this clause exceeds the amount that represents all royalties that have previously been paid by NitroMed to Elan under the provisions of Clause 7.3, after which such time the maximum credit shall be reduced to [**]% of the royalty otherwise payable to Elan.

        • • • 3.4.5.1                                            Any deficit remaining in NitroMed’s recovery of amounts due by Elan to NitroMed under Clauses 3.4.3 and 3.4.4 following recovery by NitroMed within the limitations set forth in this Clause 3.4.5 shall be borne by NitroMed and Elan shall have no liability to NitroMed in relation thereto.

              3.4.5.2                                            For the avoidance of doubt, NitroMed shall indemnify and hold harmless Elan against all Infringement Claims to the extent they are in excess of the limits set forth in Clause 3.4.4 and this Clause 3.4.5.

        3.4.6                                                                                 Save as specifically provided otherwise in this Clause 3.4, the provisions of Clause 11.7 shall apply as regards the conduct of any Infringement Claim.

        • • • 3.4.6.1                    With reference to the provisions of Clause 11.7.4, Elan and NitroMed shall consult as regards any actions Elan or NitroMed proposes to take in order to mitigate any loss or liability in respect of any Infringement Claim, such as NitroMed ceasing to sell the Product, the parties agreeing to modify the Product, or either or both of the parties entering into a licensing or settlement negotiation with the third party.

              3.4.6.2                    In the event that NitroMed and Elan fail to reach agreement on the course of such actions, the party directing such actions shall indemnify and hold the other party harmless against all Infringement Claims to the extent that such Infringement Claims (i) relate to the period after the date that  the parties were unable to reach final agreement on such action and (ii) arose as a direct result of the failure of NitroMed and Elan to reach final agreement on such action.  For the avoidance of doubt, the Elan’s aggregate cumulative liability pursuant to Clause 3.4.4 and the NitroMed recovery mechanism pursuant to Clause 3.4.5 shall apply to this Clause 3.4.6.

      3.5.                                    Third Party Licenses

      • 3.5.1                              Notice .  If during the Term either party reasonably believes that the importation, use, offer for sale or sale of the Product in the Field in the Territory would infringe the

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• • • • intellectual property rights of a third party and that such infringement arises from or relates to use of the Elan Technology in the Product, that party (the " Notifying Party ") shall so inform the other party (the " Notified Party ") by written notice, which shall include documents supporting the Notifying Party’s position.  If the Notifying Party believes a license from such third party is necessary or advisable to exercise its rights and obligations under this Agreement, including without limitation to sell the Product and/or mitigate any potential liability arising therefrom (a " Third Party License "), the notice shall include reference to such Third Party License.

        3.5.2                              Counter-Notice .  The Notified Party shall have fifteen (15) working days to review the notice issued pursuant to Clause 3.5.1 from the Notifying Party and to agree or disagree with the Notifying Party’s belief by written counter-notice.  If the Notified Party disagrees with the Notifying Party’s belief, then the Notified Party shall provide the Notifying Party with documents supporting the Notified Party’s position.  The Notifying Party shall have fifteen (15) working days from the date of receipt to review the documents from the Notified Party.  Failure to respond to the other party’s notice shall be taken for the purposes of the decision as to whether to obtain a license under this Clause 3.5.2 (but for the avoidance of doubt, not for any other purpose whatsoever) as accession to the position of the other party.  The parties agree that the time periods as set forth in this Clause 3.5.2 may be reasonably extended by the mutual written agreement of the parties.

        3.5.3                              Use of Documents .  All documents exchanged by the parties shall be maintained in confidence and shall not be used for any other purpose than the resolution of the scope of a third party’s intellectual property rights as it pertains to the importation, use, offer for sale or sale of the Product as set forth in this Agreement.

        3.5.4                              Resolution .  If the Notified Party disagrees with the Notifying Party’s position pursuant to the terms as set forth in Clause 3.5.2 herein and if the Notifying Party maintains its original position after such review period, then the matter shall be referred first to the officers of Elan and NitroMed having responsibility for the subject matter of the dispute, or their designees.  Such officers, or their designees, as the case may be, shall negotiate in good faith to resolve such dispute in a mutually satisfactory manner.  If such efforts do not result in a mutually satisfactory resolution of the dispute within fifteen (15) working days of such referral, the matter shall be referred to the chief executive officer of each party, or their respective designees.

        3.5.5                              Final Resolution .  If the parties’ chief executive officers or their designees do not resolve the dispute within fifteen (15) working days of the matter being referred to them (or such longer time periods as may be mutually agreed in writing by the parties), an independent mutually acceptable Third Party law firm with suitable expertise in the field of intellectual property in pharmaceuticals (the " Firm ") shall be appointed to determine whether, in its opinion, the sale of the Product would infringe such third party intellectual property. The Firm’s opinion shall be binding on both parties.  An appropriate community of interest agreement shall be entered into so that the benefit of the Firm’s opinion shall inure to both parties.  Once appointed, the Firm shall not be used by either party for matters pertaining to the Elan Intellectual Property or the NitroMed Intellectual Property, other than subsequent disputes under this Clause 3.5.  The costs of the Firm shall be borne by the party with whom the Firm disagrees.

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• • • • 3.5.6                              Disputes Not To Be Reopened .  The procedure in Clauses 3.5.1 to 3.5.5 shall not be used more than once in relation to any particular third party intellectual property allegedly infringed, absent new and relevant facts.

        3.5.7                              Negotiation .  If the parties or the Firm determine that a license should be obtained, Elan shall have the initial right to negotiate such license.  Elan shall not agree to or settle any license negotiations for an amount that exceeds its obligation to pay pursuant to Section 3.4 without NitroMed’s prior written approval.  To the extent Elan violates the foregoing, Elan shall be fully liable for the monetary obligation arising from the agreement and/or settlement as a result thereof.  In the event that Elan is unsuccessful in obtaining such a license within [**] days of the determination to seek a license from such third party, then NitroMed shall have the right to negotiate such license.  In the event that NitroMed obtains the right to negotiate a third party license pursuant to this Clause 3.5.7, and chooses to exercise such right, NitroMed shall not, without Elan’s prior written approval, propose nor agree to the grant of any right whatsoever under the Elan Intellectual Property as a part of those negotiations or as a part of any settlement arising from such negotiations.

        3.5.8                              Terms .  The party attempting to negotiate the license shall:

        • • • 3.5.8.1                                            use all commercially reasonable efforts to achieve commercially reasonable terms;

              3.5.8.2                                            keep the other party reasonably informed of such negotiations;

              3.5.8.3                                            submit to the other party any draft terms for approval;

              3.5.8.4                                            reasonably take into account any comments the other party may have; and

              3.5.8.5                                            without prejudice to the generality of the foregoing, use all commercially reasonable efforts to ensure that the license is sub-licensable to NitroMed (in the case of Elan) or sub-licensable and freely transferable to Elan (in the case of NitroMed).

        3.5.9                              Third Party Royalties. Regardless as to whether Elan or NitroMed is responsible for negotiating any Third Party License pursuant to this Clause 3.5 the costs of obtaining such Third Party License shall be apportioned as follows:

        • • • 3.5.9.1                                            Elan shall be responsible for [**] of all such costs, including license fees, milestone payments and royalties up to a maximum aggregate responsibility under all Third Party Licenses (" Third Party Royalties ") in any given calendar quarter up to [**] of the royalties otherwise payable to Elan under this Agreement in that quarter, subject to the provisions of Clause 3.4;

              3.5.9.2                                            NitroMed shall be responsible for any Third Party Royalties in any calendar quarter of the Term in excess in excess of the limits set forth in Clause 3.5.9.1; and

              3.5.9.3                                            Notwithstanding the foregoing, any amounts payable by NitroMed under Clause 3.5.9.2 may be carried forward to subsequent calendar quarters of

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• • • • • • • the Term until exhausted. Such carry forward shall remain subject to the limit of [**] of the royalties otherwise payable to Elan under this Agreement in such calendar quarter, except as otherwise provided herein.

        3.5.10                        Unrelated Licenses .  Nothing in this Clause 3.5 shall be construed as affecting NitroMed’s rights to obtain licenses wholly unrelated to the incorporation of the Elan Technology in the Product, at its own expense.

      3.6.                                    Notwithstanding any provision to the contrary in this Agreement and for clarity, Elan’s maximum aggregate liability for Third Party Royalties and Infringement Claim Fees shall be limited to a maximum of [**] of the royalties otherwise payable to Elan under this Agreement, except as otherwise provided in Clause 3.4, but NitroMed shall be entitled to recover any Third Party Royalties or Infringement Claim Fees for which (in each case) Elan is responsible in excess of such quarterly limit as a credit against any royalties due to  Elan in subsequent quarters of the Term up to [**] of the royalties otherwise payable to Elan under this Agreement in such quarter, except as otherwise provided in Clause 3.4.

      3.7.                                    Trademarks .

      • 3.7.1                              NitroMed Trademark .

        • • • 3.7.1.1                                            NitroMed shall market the Product in the Territory under the NitroMed Trademark.

              3.7.1.2                                            NitroMed grants to Elan and its Affiliates for the Term a royalty free, worldwide, non-exclusive license to the NitroMed Trademark and, if different, trademarks showing NitroMed’s corporate logo, for the purpose of Elan’s promotion of its activities and of the Elan Technology.

              3.7.1.3                                            Elan shall ensure that each reference to and use of the NitroMed Trademark by Elan is in a manner from time to time approved by NitroMed and accompanied by an acknowledgement, in a form approved by NitroMed, that the same is a trademark (or registered trademark) of NitroMed.

              3.7.1.4                                            Elan shall not use the NitroMed Trademark in any way which might materially prejudice its distinctiveness or validity or the goodwill of NitroMed therein.

              3.7.1.5                                            Elan shall not use in the Territory any trademarks or trade names so resembling the NitroMed Trademark as to be likely to cause confusion or deception.

              3.7.1.6                                            NitroMed shall, at its sole discretion and expense, file and prosecute applications to register and maintain registrations of the NitroMed Trademark in the Territory.

              3.7.1.7                                            NitroMed will be entitled to conduct all enforcement proceedings relating to the NitroMed Trademark and shall at its sole discretion decide what action, if