2.18     Product Complaints. Forest shall refer all Product complaints (e.g., tampering, contamination, mix-up, discoloration, incorrect quantities) to Sankyo's Product call center promptly after notice thereof (but in any event within two business days), and except as specifically set forth in this Agreement, or as required by applicable laws, statute, rules, regulations, ordinances, orders, rulings or other pronouncements, investigations or proceedings of any Governmental or Regulatory Authority, Forest shall have no other obligations in respect thereof.

                 3.     Reporting; Compensation to Forest; Accounting.

                         3.1     Reporting.

                                     3.1.1     Detail Reporting. Within 45 days after each month during a Co-Promotion Year, each party shall provide to the other a report summarizing Details by such party during such month. Such reports shall be based on internal call reporting data prepared and maintained in the ordinary course of business. In addition, within 45 days of the end of each Quarter, each party shall provide the other with a report, in form as specified by the Marketing Committee, which will contain specific information as to the types of physicians called on and frequency of Detailing. The reports required by this Section are referred to collectively as "Detail Reports."

                                     3.1.2     Promotional Amount Reporting. Within 45 days after each Quarter during a Co-Promotion Year, each party shall provide to the other a report summarizing (i) in the case of Sankyo, Promotional Amounts incurred by Sankyo during the Quarter and (ii) in the case of Forest, costs that would be considered "Promotional Amounts" had they been incurred by Sankyo during the Quarter. Such reports shall be in a form specified by the Marketing Committee. Such reports required by this Section are referred to collectively as "Promotional Amount Reports."

                         3.2     Compensation to Forest.

                                     3.2.1     Co-Promotion Fee. Subject to adjustment in accordance with subsection 3.2.4, Sankyo shall pay to Forest a fee (the "Co-Promotion Fee") for each Co-Promotion Year which shall equal the Forest Percentage multiplied by the Product Profit. Sankyo shall pay the Co-Promotion Fee Quarterly in accordance with subsection 3.2.2, subject to annual adjustment in accordance with subsection 3.2.3.

                                     3.2.2     Payment. Within sixty (60) days of each Quarter during the Co-Promotion Period Sankyo shall pay Forest an amount equal to the Co-Promotion Fee earned by Forest for such Quarter unless Sankyo shall provide to Forest a written notice of Sankyo's objection to such Payment, in which case, Sankyo shall pay the undisputed portion of such Payment in accordance herewith.

                                     3.2.3     Annual Adjustment. With respect to the payment of the Co-Promotion Fee for the fourth Quarter of a Co-Promotion Year, Sankyo shall calculate the actual Co-Promotion Fee payable for the entire such Co-Promotion Year and Sankyo shall make payment (or receive a credit), as appropriate, to adjust for any overpayment or underpayment of Co-Promotion Fee to Forest with respect to such completed Co-Promotion Year.

                                     3.2.4     Adjustments for Detail Deficiency. In addition to any adjustment for a Co-Promotion Year required by the terms of subsection 3.2.3, in the event that in the third or any subsequent Co-Promotion Year, if either:

                                     a) The total actual Weighted Details performed by both parties do not exceed the total Weighted Details provided by the Marketing Plan, as amended from time to time, (the "Plan Detail Amount") for such Co-Promotion Year and the total number of Weighted Details performed by either party is less than [Confidential Treatment] of the total actual Weighted Details for such Co-Promotion Year, then the Forest percentage shall be calculated by (i) dividing (x) the actual number of Weighted Details performed by Forest by (y) the total number of Weighted Details performed by both parties and (ii) reducing the resulting percentage by [Confidential Treatment], or

                                     b) The total actual Weighted Details performed by both parties exceed the Plan Detail Amount for such Co-Promotion Year and the Weighted Details performed by either party is less than 45% of the Plan Detail Amount for such Co-Promotion Year then the Forest percentage shall be calculated by (i) dividing (x) the actual number of Weighted Details performed by the party which is under plan by (y) the Plan Detail Amount and if the party which is under plan is Forest, reducing the resulting percentage by [Confidential Treatment] or if the party which is under plan is Sankyo, subtracting the resulting percentage from one and then reducing by [Confidential Treatment] (to obtain the Forest Percentage).

                                     Sankyo shall be credited with or shall be obligated to pay, as the case may be, the amount by which the actual Co-Promotion Fee paid to Forest for such Co-Promotion Year varies from the Co-Promotion Fee for such Co-Promotion Year as determined pursuant to this sub-paragraph.

                                     3.2.5     Reimbursement of Promotional Amount. Within sixty (60) days after the end of each Co-Promotion Quarter, Sankyo shall pay Forest an amount equal to the costs incurred by Forest during such Quarter that would be considered "Promotional Amounts" had they been incurred by Sankyo unless Sankyo provides to Forest a notice that it disputes such Promotional Amount Report, in which case, Sankyo shall pay the undisputed portion in accordance herewith. In addition, together with the reimbursement of Promotional Amount, the parties shall pay each other (by a payment by Sankyo or the issuance by Forest of a credit to Sankyo, as appropriate) any amounts due by either party to the other for the performance of Additional Details or Hospital Details during the first or second Co-Promotion Years as required by Section 2.5.1, or for Managed Care efforts as required by Section 2.5.4.

                                     3.2.6     Records. Each party shall maintain accurate records relating to its obligations hereunder (including, without limitation, records relating to the performance of Details (including records of physicians called on, frequency of calls and other data which underlies the Detail Reports required by Section 3.1), the calculation of Product Profit and guidelines for incentive compensation programs in sufficient detail to permit review of compliance with the standards set forth herein) which shall be kept available for three years following the Co-Promotion Year or Residual Year to which such records relate unless a longer period is otherwise required by any laws, statutes, rules, regulations, ordinances or orders by any Governmental or Regulatory Authority. For such period, each party may audit the other party no more than once per Co-Promotion Year or Residual Year, solely for the purpose of verifying the information contained in any of the reports or statements provided by the other party pursuant hereto or to otherwise verify the calculation of any payment required to be made hereunder or compliance with any other material obligation hereunder. Such audits are to be performed only by an independent firm to which the other party has no reasonable objection, which firm shall agree to maintain the confidentiality of the information reviewed and shall not disclose such information except to the extent reasonably necessary to assist the party engaging such firm in demonstrating compliance with material obligations which are the subject of the audit (including, without limitation, in connection with any legal proceeding brought in respect of any such obligations). In the event any such inspection or audit reflects underpayments or overpayments of mo re than 5%, the other party shall be responsible to pay the reasonable cost of such inspection or audit. Following such inspection or audit, the parties will rectify any such underpayment or overpayment. The provisions of this paragraph shall survive any termination of this Agreement.

                 4.     Milestone Payments.

                         4.1     Payment for Co-Promotion Rights. In consideration for the rights granted to Forest hereby, Forest agrees to make the following payments ("Milestone Payments") to Sankyo:

                                     4.1.1     Agreement Signing. [Confidential Treatment] within five business days following execution and delivery of this Agreement; and

                                     4.1.2     Product Approval. [Confidential Treatment] within the later of (i) twenty five (25) days following FDA approval of the NDA, including FDA approval of Product labeling and package inserts or (ii) five business days following the date Sankyo has notified Forest that launch quantities of Product, as set forth in the Marketing Plan, are ready for shipment to customers. The payment shall be deferred until the satisfaction of the second condition (with such deferral not to be in limitation of Forest's rights pursuant to Section 7.3.3); and

                                     4.1.3     Combination Product Approval. [Confidential Treatment] within five business days following FDA approval of the NDA for the Combination Product, including FDA approval of Product labeling and package inserts.

                 5.     Compliance with Laws.

                         Each party shall fully comply in all material respects with all applicable federal, state and local laws, rules, regulations or ordinances with respect to its obligations hereunder and shall obtain and maintain all licenses, permits, approvals and other authorizations applicable to it in order to enable it to perform its obligations hereunder.

                 6.     Representations.

                         6.1     Mutual Representations. Each party represents and warrants to the other as follows:

                                     6.1.1     Existence and Authority. It is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to execute, deliver and perform this Agreement. The execution of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on its part and do not conflict with the terms or conditions of any contract, agreement, arrangement or understanding to which such party is subject.

                                     6.1.2     Enforceability. This Agreement is a valid and binding obligation of said party, enforceable against it in accordance with its terms.

                                     6.1.3     Litigation. There is no action, suit, proceeding or investigation pending or, to its knowledge, threatened before any court or administrative agency against said party which could, directly or indirectly, reasonably be expected to materially affect its ability to perform its obligations hereunder or the marketability of the Product.

                         6.2     Sankyo's Representations. Sankyo hereby represents and warrants to Forest as follows:

                                     6.2.1     Product Specifications. All sample Product delivered to Forest or distributed by or for Sankyo and Product manufactured, distributed or sold by or for Sankyo during the term hereof will comply in all material respects with the specifications for the Product set forth in the NDA; will comply in all material respects with all requirements of the FDA and other applicable laws, rules and regulations; will not be adulterated or misbranded under the United States Food, Drug and Cosmetic Act ("Act") and regulations issued thereunder or other applicable laws; and will have been manufactured in all material respects in accordance with curren t Good Manufacturing Practices as provided in the Act and its regulations. All Promotional Materials provided or distributed by Sankyo shall comply in all material respects with all applicable laws and regulations.

                                     6.2.2     Intellectual Property. Sankyo owns or has licenses to all patents, know-how, trademarks, copyrights, trade secrets and all other intellectual property of any nature whatsoever (collectively, the "Intellectual Property Rights") required to supply, market, sell and distribute the Product in the Territory. Sankyo owns or has licenses to the Intellectual Property Rights free and clear of all liens, claims and encumbrances and free of all royalty or similar payment obligations to any third party, except such liens, claims, encumbrances and obligations as will not have a material adverse effect on Forest's rights to co-promote the Product under this Agreement. To the knowledge of Sankyo, the supply, sale and use of the Product and distribution of any Promotional Materials provided by Sankyo hereunder or distributed by Sankyo during the Co-Promotion Period and the Residual Period will not infringe any patents, trademarks or other intellectual property rights of third parties. Sankyo does not, as of the date herewith, license any material Intellectual Property Rights from any third party other than Affiliates of Sankyo.

                                     6.2.3     Information Disclosure. Sankyo has heretofore disclosed to Forest all material information known to Sankyo with respect to the safety and efficacy of the Product or human risk factors relating thereto.

                 7.     Term; Termination.

                         7.1     Term. Unless otherwise terminated pursuant to the following subsections hereof, this Agreement shall remain in full force and effect through the Co-Promotion Period and the Residual Period and shall expire on the last day of the Residual Period. Expiration or termination of this Agreement shall not relieve either party of any obligation of payment or performance accrued prior to such expiration or termination.

                         7.2     Termination. This Agreement may be terminated by the non-defaulting party (as hereinafter defined), as follows:

                                     (i)     if the other party fails to perform or observe any material covenant or provision contained herein and such failure shall continue unremedied for a period of 90 days after the receipt of written notice thereof and, if such breach cannot be cured within such 90 day period, such party has not taken reasonable steps to commence and proceed diligently thereafter to cure such default and, in fact, does not cure such default within a reasonable period of time;

                                     (ii)     if any material representation or warranty made by the other party shall prove to be incorrect in any material respect at the time when made;

                                     (iii)     if the other party shall voluntarily enter into any form of bankruptcy or insolvency proceedings; or

                                     (iv)     if any form of bankruptcy or insolvency proceedings shall be brought involuntarily against the other party and such proceedings shall remain undismissed, unstayed or unvacated for a period of 90 consecutive days.

                         As used in this Section, the term "non-defaulting party" shall mean the party with respect to which no default or condition exists under this Section that would permit termination of the Agreement. Termination under this subsection shall be effective upon notice to the defaulting party and expiration of any applicable cure period without the cure of the event or cause giving rise to such notice of default within such cure period.

                         Notwithstanding the foregoing, termination pursuant to subsections (i) or (ii) above, if contested, shall not be deemed effective unless the existence or occurrence of the circumstance giving rise to such right of termination shall have been determined by the judgment of a court of competent jurisdiction (from which there is no right of appeal or as to which no appeal has been timely taken). In addition, such right of termination shall not apply unless monetary damages calculated in accordance with law would not be an adequate remedy for such breach or the party owing such damages was unable or unwilling to make full payment thereof.

                         7.3     Other Termination Rights.

                                     7.3.1     Commencement of Detailing. Forest shall have the right to terminate this Agreement effective upon 30 days prior written notice to Sankyo in the event the commencement of Detailing has not occurred by April 30, 2002. Such right shall expire if not exercised prior to the commencement of Detailing. In the event of termination by Forest pursuant to this subsection, Sankyo shall promptly refund to Forest the payment made pursuant to Section 4.1.1.

                                     7.3.2     Forest Termination Right. Forest shall have the right to terminate the Co-Promotion Period at any time after the expiration of the third Co-Promotion Year, with termination to be effective as of the last day of the first Quarter which is at least six months following Forest's written notice (which may be furnished prior to the expiration of the third Co-Promotion Year) of termination to Sankyo. In the event of termination by Forest, pursuant to this subsection, the Residual Period (for this purpose, each Contract Year thereof consisting of the period of four consecutive Quarters commencing with the first Quarter of the Residual Period as herein modified) shall commence as of the first day of the first Quarter following such termination. However, in the event of such termination, the Residual Period shall end on April 30, 2014, less twice the number of Quarters by which the Co-Promotion Period was reduced by reason of termination pursuant to this Section. In any event, such Residual Period shall end immediately upon the day that a third party has lawfully commenced the sale of a generic equivalent to the Product in the Territory.

                                     7.3.3     Package Insert. Forest shall have the right to terminate this Agreement effective upon 30 days' written notice to Sankyo in the event the Product's package insert, as finally approved by the FDA, varies in Forest's reasonable discretion, in any materially adverse way from the package insert filed with the NDA and previously made available to Forest. Forest may only exercise the right of termination granted by this Section by furnishing the notice described above no later than 20 days following FDA approval of the Product's pa ckage insert. In the event of termination by Forest pursuant to this subsection, Forest's sole remedy will be that Sankyo shall promptly refund to Forest all payments previously made by Forest pursuant to Section 4.1.

                 8.     Residual Period Compensation.

                         8.1     Residual Fee. Sankyo agrees to pay Forest a fee (the "Residual Fee") for each Residual Year in an amount to be determined by multiplying (i) the Residual Percentage for such Residual Year by (ii) the Product Profit for such Residual Year by (iii) the Forest Percentage applicable to the Residual Period.

                         8.2     Quarterly Payments. The Residual Fee shall be calculated and paid on a Quarterly basis 60 days after the end of each Quarter during the Residual Period. Quarterly payments shall be reconciled on an annual basis in accordance with the reconciliation procedures applicable to Co-Promotion Fees set forth in Section 3.2.3.

                         8.3     Residual Period Diligence. During the Residual Period, Sankyo agrees to use commercially reasonable efforts to market the Product in a commercially reasonable manner in light of competitive conditions in the relevant therapeutic categories, including marketing of the Product through other co-promotion partners or licensees.

                         8.4     Residual Period Reports. Together with each payment of Residual Fees, Sankyo shall furnish to Forest a statement which sets forth the calculation of the Residual Fee paid (including, without limitation, setting forth Net Revenues, Promotional Amount and Product Profit) with reasonable specificity.

                 9.     Exclusivity; Restriction on Hiring; Sale of Product Rights; Change of Control.

                         9.1     Exclusivity. During the Co-Promotion Period, neither party shall market, promote, distribute or sell in the Territory any pharmaceutical product indicated for the treatment of hypertension and which contains an angiotensin receptor blocker, other than the Product pursuant to this Agreement, ("ARB") or an ACE inhibitor (a "Competitive Product"). Notwithstanding the preceding, Forest may market, promote, distribute and sell a Competitive Product in the Territory after the third Co-Promotion Year if (i) such Competitive Product is a combination product comprised of lercanidipine and an ARB or an ACE inhibitor or (ii) Forest has offered co-promotion rights in such Competitive Product to Sankyo on commercially reasonable terms and Sankyo has declined to copromote such product, provided that Forest may only market and promote any such Competitive Product through separate, dedicated sales forces (including sales representatives and management for primary care, specialty, hospital and managed care sales forces) and separate, dedicated marketing groups. Forest will use reasonable efforts to apply the confidentiality requirements of Section 13.3 to maintain confidentiality of information relating to Product from the above groups involved with sales and marketing of such Competitive Product. Notwithstanding the preceding, Sankyo may market, promote, distribute and sell a Competitive Product in the Territory after the third Co-Promotion Year if i) such Competitive Product is a combination product comprised of olmesartan and another active ingredient provided that if such other active ingredient is subje ct to an exclusive marketing agreement between Sankyo and a third party, Sankyo shall use commercially reasonable efforts to include Forest, on terms and conditions which consider as nearly as practicable the relative economic interests of Forest and Sankyo hereunder, in any such arrangements with third parties where a combination product including olmesartan is being contemplated at the time of negotiations with any such third party or, in the event no such arrangement is accomplished, Sankyo agrees to provide payments to Forest (for example, by means of a royalty) with respect to sales of such Competitive Product in an amount sufficient to compensate Forest for the loss of Co-Promotion Fee directly related to the sales of such Competitive Product or ii) Sankyo has offered co-promotion rights in such Competitive Product to Forest on commercially reasonable terms and Forest has declined to copromote such product, provided that Sankyo may only market and promote any such Competitive Product through separate, dedicated sales forces (including sales representatives and management for primary care, specialty, hospital and managed care sales forces) and separate, dedicated marketing groups.

                         The foregoing shall not be deemed to preclude the acquisition by either party of a company, business or assets which includes such a Competitive Product or the merger or other business combination with (or acquisition of a party by) another entity which markets such a pharmaceutical product, provided that such party (or the party surviving any merger or other business combination with a party hereto) publicly announces its intention to divest such Competitive Product contemporaneously with the announcement of the transaction and divests the portion of such business which would violate the prohibition set forth in the first sentence of this Section within 12 months following the consummation of such transaction; provided further that a breach of the obligations of this Section caused by a Change in Control shall not be deemed a breach of this Agreement but sh all only give rise to the rights set forth in Section 9.3 . The provisions of this Section shall not be in limitation of either party's right to terminate the Co-Promotion Period pursuant to, and in accordance with the terms and conditions, of Section 9.3 or of Forest's right to terminate the Co-Promotion Period pursuant to Section 7.3.2.

                         9.2     Restrictions on Hiring. During the Co-Promotion Period and for a period of twelve months thereafter, neither party shall hire any sales representative, sales force manager or employee principally having marketing responsibilities (including, without limitation, managed care, governmental and other institutional marketing personnel) employed by the other party or who had been employed by such other party within the previous six months. Isolated violations of this provision shall not be deemed a material breach of this Agreement for purposes of Section 7.2 hereof.

                         9.3     Sale or License of Product Rights; Change in Control.

                                     9.3.1     Sale or License of Product Rights. In the event Sankyo determines to sell or license the Intellectual Property Rights to any third party during the Co-Promotion Period or the Residual Period (other than to an Affiliate or indirectly by way of merger, reorganization or other comparable corporate transaction), Sankyo shall provide notice, including identification of the third party, to Forest and, upon Forest's request furnished to Sankyo within 20 days of such notice, shall negotiate in good faith to sell or license such Intellectual Property Rights to Forest. In any such negotiation, due regard shall be given to Forest's ec onomic interest in the Intellectual Property Rights deriving from this Agreement. In the event Forest and Sankyo do not enter into a binding written agreement as to such purchase and sale or license following 90 days (the "Negotiation Period") of notice to Forest of such proposed sale or license, Sankyo shall be free to sell or license the Intellectual Property Rights to a third party provided that the purchase price and payment terms of such sale or license offered to such third party are no less favorable to Sankyo than the purchase or license price for the Intellectual Property Rights offered to Forest during the Negotiation Period. In the event no sale of the Intellectual Property Rights occurs within 12 months from the end of the Negotiation Period, Sankyo shall be required to again comply with the provisions of this Section prior to any subsequent sale of the Intellectual Property Rights. In a ddition to the foregoing, Sankyo shall not make any sale of the Intellectual Property Rights (either directly or indirectly by way of merger, reorganization or comparable corporate transaction) without adequately providing, to Forest's reasonable satisfaction, for the assumption by the purchaser of all of Sankyo's obligations of performance and payment required hereby.

                                     9.3.2     Definition of Change of Control. For purposes of this Section 9.3, a "Change of Control" shall mean an event where: a) any Person(s), meaning any natural person(s), corporation(s), general partnership(s), limited partnership(s), joint venture(s), proprietorship(s) or other business organization(s), acquire beneficial ownership of capital stock of a party entitling the holder(s) thereof to at least fifty-one percent (51%) of the voting power of the then outstanding capital stock of such party with respect to the election of directors of such party, or b) a party enters into a merger, consolidation or similar transaction with another Person (the "Acquiring Corporation") in which (i) such party is not the surviving corporation in such transaction, (ii) the members of the Board of Directors of such party prior to such transaction constitute less than one half of the members of the Board of Directors of the Acquiring Corporation following such transaction, and (iii) at least fifty-one percent (51%) of the voting power of the outstanding capital stock of the Acquiring Corporation with respect to the election of directors following such transaction is held by Persons who were shareholders of the Acquiring Corporation prior to such transaction, or c) a party sells to any Person(s) in one or more related transactions, properties or assets representing at least fifty-one percent (51%) of (i) such party's consolidated total assets as reflected on its most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, provided that all or substantially all of the properties and assets used in connection with such party's pharmaceutical busi ness are included in such transaction(s) and (ii) such party's consolidated operating income for the most recent fiscal year as reflected on its most recent Annual Report on Form 10-K.

                                     9.3.3     Definition of Impairment. For purposes of this Section, an "Impairment" shall be deemed to occur if the entity to result from the Change of Control is reasonably likely to have sales and marketing policies or capabilities substantially different from those of the party in respect of which such Change in Control occurs, which differences are reasonably likely to lead to a reduction in marketing efforts (or the efficacy thereof) with respect to the Product from those contemplated by the then current Marketing Plan. Without limiting the generality of the foregoing, such standard shall be deemed to have been met if the entity to result from the Change in Control markets a Competitive Product in the Territory within 6 months from the Change in Control, or if the majority of sales representatives, sales management or marketing personnel responsible for Product co-promotion changes as a result of such Change in Control.

                                     9.3.4     Definition of Hostile Change. For purposes of this Section, a "Hostile Change" shall mean a Change in Control which has not been approved by a majority of the members of the Board of Directors who (together with any other individuals whose election was approved by a two-thirds vote of the directors then in office) constituted a majority of the Board of Directors for a period of at least two consecutive years prior to such Change in Control.

                                     9.3.5     Sankyo Rights Under Forest Change of Control. In the event that a Change of Control affecting Forest takes place, Sankyo shall have the right, but not the obligation, to terminate the Co-Promotion Period by furnishing notice of such election to terminate within 30 days of the event permitting such termination, such termination to be effective upon the last day of the Quarter in which notice of such termination is furnished. In the event that Sankyo exercise its rights of termination, the following conditions shall apply:

                                                  9.3.5.1 Subject to the provisions of Sections 9.3.5.3 and 9.3.3, in the event such Change in Control does not lead to, or is not reasonably likely to lead to, an Impairment, Sankyo shall purchase from Forest and Forest shall sell to Sankyo Forest's remaining rights under this Agreement as if no termination of the Co-Promotion Period had been affected by Sankyo. The purchase price for such sale shall be the Fair Market Value of the rights as of the date of termination of the Co-Promotion Period. The parties agree to negotiate the Fair Market Value in good faith promptly following a termination pursuant to this Section. In the event no agreement upon Fair Market Value has been reached within 90 days of such termination, the parties agree that Fair Market Value shall be determined by a Valuation Expert whose determination shall be binding and conclusive on the parties. Payment of Fair Market Value shall be made within 30 business days of its determination.

                                                  9.3.5.2 In the event such Change in Control occurs during the first three Co-Promotion Years and (i) leads to, or is reasonably likely to lead to, an Impairment, or (ii) is a Hostile Change, the Residual Period shall be deemed to commence on the first day of the first Quarter following the termination of the Co-Promotion Period, provided the Residual Period shall only extend for a number of Quarters equal to the number of Quarters for which the Co-Promotion Period extended; provided further that, in the event the aggregate Residual Fee payable to Forest during such Residual Period is less than [Confidential Treatment], Sankyo shall pay Forest the difference between such aggregate Residual Fee and [Confidential Treatment] together with the final payment Residual Fee due hereunder.

                                                  9.3.5.3 In the event such Change in Control occurs following the expiration of the third Co-Promotion Year and (i) leads to, or is reasonably likely to lead to, an Impairment, or (ii) is a Hostile Change, Forest shall be deemed to have exercised its right of termination of the Co-Promotion Period pursuant to, and in accordance with the terms and conditions of Section 7.3.2.

                                     9.3.6     Forest Rights Under Sankyo Change of Control. In the event that a Change of Control affecting Sankyo takes place which leads to, or is reasonably likely to lead to, an Impairment, Forest shall have the right, but not the obligation, to terminate the Co-Promotion Period by furnishing notice of such election to terminate within 30 days of the event permitting such termination, such termination to be effective upon the last day of the Quarter in which notice of such termination is furnished. In the event that Forest exercise its rights of termination, the following conditions shall apply:

                                                  9.3.6.1 In the event such Change in Control occurs during the first two Co-Promotion Years the Residual Period shall be deemed to commence on the first day of the first Quarter following the termination of the Co-Promotion Period, provided the Residual Period shall only extend for a number of Quarters equal to the number of Quarters for which the Co-Promotion Period extended; provided further that, in the event the aggregate Residual Fee payable to Forest during such Residual Period is less than [Confidential Treatment], Sankyo shall pay Forest the difference between such aggregate Residual Fee and [Confidential Treatment] together with the final payment Residual Fee due hereunder.

                                                  9.3.6.2 In the event such Change in Control occurs following the expiration of the second Co-Promotion Year Sankyo shall purchase from Forest and Forest shall sell to Sankyo Forest's remaining rights under this Agreement as if no termination of the Co-Promotion Period had been affected by Forest. The purchase price for such sale shall be a) 67% of the Fair Market Value of the rights as of the date of termination of the Co-Promotion Period if the Change of Control occurs in the third Co-Promotion Year or b) the Fair Market Value of the rights as of the date of termination of the Co-Promotion Period if the Change of Control occurs after the third Co-Pr omotion Year. The parties agree to negotiate the Fair Market Value in good faith promptly following a termination pursuant to this Section. In the event no agreement upon Fair Market Value has been reached within 90 days of such termination, the parties agree that Fair Market Value shall be determined by a Valuation Expert whose determination shall be binding and conclusive on the parties. Payment of Fair Market Value shall be made within 30 business days of its determination.

                 10.     Indemnification.

                         10.1     Indemnification.

                                     10.1.1     Indemnification by Sankyo. Sankyo shall indemnify, hold harmless and defend Forest and its Affiliates from and against any and all liabilities, losses, suits, claims, damages and expenses (including, without limitation, attorneys' fees, expert fees and other disbursements) (collectively, "Liabilities") asserted against or incurred by Forest arising out of or relating to (i) the manufacture, use, distribution, promotion or sale of Product (including, without limitation, Losses relating to product liability and/or personal injury) by Sankyo; (ii) the breach by Sa nkyo of any of its representations, warranties or other obligations under this Agreement; or (iii) a claim by a third party that the sale of the Product or use of Promotional Material related thereto prepared by Sankyo infringes any patent, trademark or other intellectual property rights of such third party; except to the extent any such Liabilities result from the breach by Forest of its representations, warranties or obligations hereunder, or its negligence or willful misconduct, or its sale of Product or use of such Promotional Materials in a manner inconsistent with the terms of this Agreement. The indemnification provided hereby shall not be deemed to include indemnification for lost profits or indirect or consequential damages, nor shall the parties otherwise be liable to each other for lost profits or indirect or consequential damages.

                                     10.1.2     Indemnification by Forest. Forest agrees to indemnify, hold harmless and defend Sankyo and its Affiliates from and against any Liabilities asserted against or incurred by Sankyo, arising out of or relating to (i) performance or breach by Forest of its representations, warranties or obligations under this Agreement; or (ii) any negligence or willful misconduct of Forest, except to the extent such Liabilities result from the breach by Sankyo of its representations, warranties or obligations hereunder or any other actions that would be indemnified against by Sankyo under Section 10.1.1 or its negligence or willful misconduct. The indemnification provided hereby shall not be deemed to include indemnification for lost profits or indirect or consequential damages nor shall the parties otherwise be liable to each other for lost profits or indirect or consequential damages.

                         10.2     Cooperation in Connection with Indemnification. Any party entitled to indemnification pursuant to Section 10.1 shall notify the indemnifying party promptly of any claim that might give rise to a claim of indemnification, shall allow the indemnifying party to handle the defense of the claim (provided the indemnifying party acknowledges its obligation to indemnify hereunder), shall cooperate in the defense of such claim and shall not settle such claim without the indemnifying party's written consent (which shall not be unreasonably withheld), delayed or conditioned). An indemnified party shall have the right to participate in the defense of any matter as to which indemnification is being provided with its own counsel and at its own expe nse. Where any indemnity is claimed under this Agreement, the party claiming such indemnity shall take all reasonable action (the reasonable cost of which shall be borne by the indemnifying party) to mitigate such Liabilities.

                         10.3     Survival. The foregoing indemnity provisions, together with (i) the representations and warranties of the parties, (ii) payment obligations, (iii) insurance requirements and audit provisions shall survive any termination or expiration hereof.

                         10.4     Insurance. Each of the parties shall maintain product liability insurance (including contractual indemnity coverage) in an amounts of at least $100,000,000 on a "per occurrence" basis with an insurance company rated at least A+3 by Best's rating guide. Each of the parties shall be added as an additional insured of the other party's insurance policy. Any indemnification hereunder shall be net of any insurance proceeds recovered by the indemnified party.

                 11.     Assignment.

                         This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective assigns and successors in interest. Neither party shall assign its rights hereunder to any party without the prior written consent of the other party hereto.

                 12.     Notices.

                         Any notice, request or other communication required or permitted by this Agreement to be given by either party to the other shall be in writing and either mailed by nationally recognized overnight courier; registered or certified mail, return receipt requested, by express delivery service; or by facsimile transmission, addressed to such party, Attention:  The President (in the case of Sankyo) and the Chairman (in the case of Forest) at its address indicated above or to such other address as such party may previously have designated by like written notice. Notice shall be deemed to have been given upon receipt. Facsimile transmission numbers for the respective parties are as follows:

                         If to Sankyo:    (973) 630-2808

                         If to Forest:     (212) 224-6740

                 13.     Miscellaneous.

                         13.1     Relationship. Neither party shall have or hold itself out to third parties as possessing any power or authority to enter into any contract or make any commitment on behalf of the other party. It is not intended that this Agreement create a partnership, agency, joint venture or joint employer relationship.

                         13.2     Entire Agreement. This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof and supersedes any previous written or oral agreement in connection therewith. Any amendment hereto must be in writing and signed by Forest and Sankyo.

                         13.3     Confidentiality. Each party agrees to maintain in strict confidence all proprietary or confidential business or technical information it may learn about the other party as a result of this Agreement or the transactions contemplated hereby and not to use such information for any purpose unrelated to the performance of its obligations hereunder. This obligation shall survive the termination or expiration of this Agreement for a period of 5 years. The obligations set forth in this Section shall not apply to any information that (i) is in the public domain at the time of disclosure, (ii) enters the public domain after disclosure hereunder other than as a breach of this Section, (iii) the receiving party can demonstrate was in its possession prior to disclosure hereunder, (iv) is received from a third party witho ut violation of any obligation to the disclosing party hereunder or (v) must be disclosed pursuant to law or regulation of any competent legal or regulatory authority (including courts and administrative authorities), in which event the party making such disclosure shall, if permissible, notify the other party sufficiently prior to making such disclosure so as to allow the nondisclosing party adequate time to take whatever action it may deem to be appropriate to protect the confidentiality of the information.

                         13.4     Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or enforceable, the parties shall in good faith reformulate the same and the other provisions shall remain in full force and effect and shall in no way be effected, impaired or invalidated, unless any such invalidated provisions cannot be reformulated without materially altering the intent of this Agreement and they are so vital to the Agreement as to render impractical the Agreement's continued implementation, in which case the Agreement shall terminate with immediate effect.

                         13.5     Public Disclosure. Each party shall grant the other the prior opportunity to review and furnish comments with respect to any press release or public announcement concerning this Agreement or the activities contemplated hereby. The foregoing shall not be deemed to limit either party's right to make any disclosure required by applicable law or regulation.

                         13.6     Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning thereof.

                         13.7     Applicable Law. This Agreement is made pursuant to, and shall be governed by, the laws of the State of New York without giving effect to its principles of conflicts of law. Each of the parties hereby irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of any state or federal court sitting in New York, and any appellate court from any such court, in any suit or proceeding relating to this Agreement. It shall be a condition precedent to each party's right to bring any such suit or proceeding that such suit or proceeding, in the first instance, be brought in such state or federal court in New York. No party may move to transfer, consolidate, or dismiss any such suit or proceeding for the purpose of bringing the same in another jurisdiction. Each party agrees that a final judgment in any such suit or proceeding shall be conclusive and may be enforced in any other competent jurisdiction by suit on the judgment or in any other manner provided by law. Each party irrevocably consents to service of process on it in the manner provided for notices in Section 12 with respect to any suit or proceeding in a state or federal court sitting in New York. Nothing in this Agreement shall affect the right of either party to serve process in any other manner permitted by law.

                         13.8     Waiver. No waiver or consent of any provision of this Agreement shall in any event be effective, unless the same shall be in writing and signed by the parties hereto, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

                         13.9     No Implied License. Except as may be expressly provided in this Agreement, no license to make, use, sell or otherwise exploit the Product in the Territory and its related assets is being conferred on Forest.

                         13.10     Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but in all of which shall constitute one and the same instrument.

                         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above.

SANKYO PHARMA INC.

By:      /s/Joseph Pieroni                                         Joseph Pieroni             President

FOREST LABORATORIES, INC.

By:      /s/Mary Prehn                                                   Mary Prehn             Vice President - Licensing             & Corporate Development

EXHIBIT 10.17

THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[CONFIDENTIAL TREATMENT]."

                 S-ENANTIOMER LICENSE AGREEMENT dated this May 29, 2002 by and between Forest Laboratories (Ireland) Limited, a corporation organized and existing under the laws of the Republic of Ireland and having its principal executive offices at Clonshaugh Industrial Estate, Clonshaugh, Dublin 17 Republic of Ireland ("Forest Ireland") and H. LUNDBECK A/S, a corporation organized under the laws of Denmark and having its principal executive offices at 9 Ottiliavej, DK-2500, Copenhagen-Valby, Denmark ("Lundbeck").

                 A.     The Parties hereto and Forest Laboratories, Inc. ("Forest Inc.") have agreed to novate, effective as of March 27, 1998, the License Agreement by and between Forest Inc. and Lundbeck dated the 27^th day of March, 1998, as supplemented and amended to date (the "1998 License") in accordance with the terms hereunder.

                 B.     Lundbeck develops and markets pharmaceutical products. Lundbeck owns all rights in and to certain patents and technology (as hereinafter more fully defined, the "Patents" and the "Technology") relating to the S-Enantiomer which may be potentially useful for the treatment of depression, panic disorder, obsessive-compulsive disorder and related indications.

                 C.     Forest Ireland develops, markets and distributes pharmaceutical products and has evaluated certain pre-clinical data developed by Lundbeck with respect to the S-Enantiomer.

                 D.     Lundbeck desires to grant Forest Ireland, and Forest Ireland desires to receive from Lundbeck, an exclusive license to use the Patents and the Technology for the purpose of marketing, selling and distributing in the Territory (as hereinafter defined) finished pharmaceutical products incorporating the S-Enantiomer as their active ingredients, all as provided and subject to the terms and conditions hereinafter set forth.

                 NOW, THEREFORE, in consideration of the foregoing and of the terms and conditions hereafter set forth, the parties hereto hereby agree, effective as of March 27, 1998, as follows:

                         As used herein, the following terms shall have the respective meanings set forth below:

                         1.1     "Act" shall mean the United States Federal Food and Drug Act and regulations promulgated thereunder, including current Good Manufacturing Practice regulations.

                         1.2     "Affiliate" shall mean any person or legal entity controlling, controlled by or under common control with the person or entity with respect to whom such status is at issue.

                         1.3     "Commencement Date" shall mean the date of the commercial launch of any Product in the Territory.

                         1.4     "Compound" or "S-Enantiomer" shall mean the S-Enantiomer form of the compound known as citalopram and shall be deemed to include all analogs, salts, derivatives and enantiomer forms thereof developed using Technology and Non-Program Technology during the term hereof (provided that the racemate form of S-Enantiomer shall not be deemed included in the term Compound).

                         1.5     "Cost of Goods" shall mean Forest Ireland's or Lundbeck's (i) direct cost of raw materials and labor incurred in manufacturing Products, together with allocated applicable manufacturing overheads (but excluding corporate general or administrative overheads) and (ii) Forest Ireland's or Lundbeck's out-of-pocket costs of acquiring inventories of finished Products from the other party or a third party supplier, together with allocated applicable manufacturing overheads (but excluding corporate general or administrative overheads). Cost of Goods shall be determined in accordance with United States generally accepted accounting principles and the standard cost accounting policies of each party as applied to the manufacture or acquisition of finished pharmaceutical product inventories generally.

                         1.6     "Development Costs" shall mean the costs of either party in performing development work (including formulation development, toxicology, bioavailability and pre-clinical and clinical tests and studies and NDA regulatory work, preparation and filing) required or appropriate to obtain an approved NDA to market a Product in the Territory, including both internal and out-of-pocket costs and allocations of research and development overheads (but excluding corporate general or administrative overheads). Development Costs shall be determined in accordance with United States generally accepted accounting principles and in a manner consistent with such party's standard accounting for research and development costs generally.

                         1.7     "exclusive" shall mean, where used in connection with a specific grant of rights in respect of the Patents or the Technology, that the granting party (i) shall retain for itself no ability to use such property and (ii) shall have no ability to authorize its Affiliates or third parties (other than the grantee of such specific rights) to use such property, in the geographic areas and field of use covered by, and for the term of, such grant.

                         1.8     "Fair Market Value" shall mean the price which a willing buyer would pay, on an arm's length basis, for all rights and related intellectual property assets to a Compound or Product for distribution in the Territory, in light of the status of development and reasonably anticipated costs of further development of such Compound or Product and the market potential thereof in the Territory, all as determined based upon objective data possessed and disclosed by both parties hereto.

                         1.9     "Forest Ireland Technology" shall mean all data or information described by the defined term Technology but possessed, developed or acquired by Forest Ireland during the term of this Agreement; provided that Forest Ireland Technology shall not be deemed to include Non-Program Technology.

                         1.10     "FDA" shall mean the United States Food and Drug Administration or any successor agency having comparable jurisdiction.

                         1.11     "Marketing and Selling Costs" shall mean all costs related to selling and promoting a Product in the Territory, including, but not limited to, both internal and out-of-pocket allocated salesforce costs including compensation, bonuses, travel costs, meeting costs and training and management, clinical studies intended for marketing purposes, promotional meetings and seminars, market research, advertising and sample acquisition and distribution costs, and the costs of shipping, billing, product liability insurance and contract administration, together with all directly allocable departmental overheads (but excluding corporate general or administrative overheads). Marketing and Selling Costs shall be calculated in accordance with United States generally accepted accounting principles and in accordance with Forest Ireland's standard cost accounting practices for selling, marketing and promotional expenses generally.

                         1.12     "Marketing Year" shall mean each 12 consecutive month period beginning with the Commencement Date.

                         1.13     "NDA" shall mean a New Drug Application filed with the FDA with respect to a Product for the indications set forth in the Development Plan (as defined and provided in Section 3.1.2) for such Product.

                         1.14     "Net Revenues" for any period shall mean sales of a Product by Forest Ireland, its Affiliates or sub-licensees in the Territory for such period less amounts actually allowed as trade credits, discounts, rebates, returns or, rejections of Product, transportation charges or other allowances or discounts actually given with respect to such sales including, without limitation, rebates or charges required to be paid in connection with such sales by the Prescription Drug Rebate and Improved Access to Medicines requirements of the Omnibus Budget Reconciliation Act of 1990 and comparable United States federal or state requirements now or hereafter in effect, all as recorded in accordance with generally accepted accounting principles and in a manner consistent with Forest Ireland's revenue recognition policies from the sale of pharmaceutical products generally.

                         1.15     "Non-Program Product Costs" shall mean costs of either party accounted for in the manner provided by the definitions of Development Costs or Marketing and Selling Costs but undertaken by such party independently of, and not pursuant to the requirements of, a Development Plan or Marketing Plan effect at the time of accrual of such costs.

                         1.16     "Non-Program Technology" shall mean any technology or know-how which would constitute Technology or Forest Ireland Technology, as the case may be, but is developed by or acquired through research and development which is accounted for as Non-Program Product Costs.

                         1.17     "Patents" shall refer to S-citalopram US RE34712, S-citalopram Patent, expiration date 8 June 2009 (reissue of US 4,943,590), together with all extensions, continuations, continuations-in-part, reissues and divisions thereof.

                         1.18     "Phase I-III Clinical Trials" shall mean clinical trials of a Product undertaken to obtain an approved NDA and a "Phase III Clinical Trial" shall mean a well-controlled clinical study meeting FDA requirements for a primary efficacy study required for NDA approval.

                         1.19     "Product" shall mean any finished pharmaceutical product for human use in which the active ingredient is the Compound.

                         1.20     "Quarter" shall mean a three calendar month period ending March 31, June 30, September 30 and December 31.

                         1.21     "Technology" shall mean all methods, processes, techniques, technology, information, data, studies, analyses or expertise, whether patented or unpatented, now in the possession of or hereafter acquired by Lundbeck which are useful in and specifically related to the manufacture, testing, analysis, sale or distribution of Compound or Product, including, without limitation, pharmacology, toxicology, stability, formulation methodologies and techniques, analytical methodologies and techniques, bioavailability data and clinical and non-clinical safety and efficacy studies; provided that Technology shall not be deemed to include Non-Program Technology.

                         1.22     "Territory" shall mean the United States of America, including its territories and possessions.

                         1.23     "Trademark" shall mean a trademark registered pursuant to Section 6 of the S-Enantiomer Supply Agreement and used specifically in connection with the marketing and distribution of a Product in the Territory.

                         1.24     "Valuation Expert" shall mean an independent third party having expertise and experience in the valuation of pharmaceutical products for human use appointed by mutual agreement of the parties. In the event the parties are required by the terms hereof to select a Valuation Expert and are unable to do so after 60 days of good faith negotiations, such decision shall be submitted to arbitration in accordance with the terms hereof and the individual so selected shall be deemed a Valuation Expert.

                 2.     Grant of License; License Fee.

                         2.1     In consideration for the payment of the license fee provided in Section 2.2 and the additional compensation provided or contemplated by Section 5.1 hereof and subject to the terms and conditions hereof, Lundbeck hereby grants to Forest Ireland the exclusive right and license (together with the right to sublicense, subject to Lundbeck's prior written consent, which shall not be unreasonably withheld, the "License") under the Patents and Technology to develop or have developed, manufacture or have manufactured, use, distribute, market or sell the Product in the Territory for the Term of this Agreement and for any additional period provided by Sections 9 or 11 hereof.

                 For the period described in the above paragraph, Forest Ireland hereby grants to Lundbeck the exclusive right and license in respect of all countries in the world other than the Territory, with the right to grant sub-licenses, subject to Forest Ireland's prior written consent, which shall not be unreasonably withheld, to all Forest Ireland Technology developed or acquired by Forest Ireland with respect to the Compound or the Product solely in connection with the formulation, manufacture, sale, use, distribution, marketing and sale of the Product in countries outside of the Territory.

                         2.2     In consideration of the License granted to Forest Ireland pursuant to Section 2.1, Forest Ireland agrees to pay Lundbeck a license fee of [Confidential Treatment] by wire transfer to a bank account previously designated by Lundbeck within 30 days from the date hereof. Such license fee shall be deemed fully earned and nonrefundable.

                 3.     Development Program

                         3.1     The parties agree to cooperate in the development of the Product in accordance with the following:

                                     3.1.1     The parties shall establish a joint development committee (the "Development Committee") of four members, two of whom shall be designated by Forest Ireland and two of whom shall be designated by Lundbeck. Each party shall designate its or an Affiliate's President and senior executive officer in charge of research and development as members of the Development Committee. Decisions or actions of the Development Committee shall require a majority vote or consent. The Development Committee shall meet in person and by telephonic communication as needed to review and monitor the Development Program and the progress of development thereunder for each Product. Each party shall make appropriate executive and research and development personnel reasonably available from time to time for consultation with, and assistance in the accomplishment of the objectives of, the Development Committee. Each party shall disclose, on a continuing basis, all material Technology or Forest Ireland Technology, as the case may be, as requested or directed by the Development Committee.

                                     3.1.2     Lundbeck agrees to use its commercially reasonable efforts to undertake, subject to the terms and conditions hereof, a program of research and development (including formulation and pre-clinical and clinical tests and studies) which includes all such research and development required to obtain an approved NDA for the marketing of Product formulated from the Compound in the Territory. Each such program shall be undertaken pursuant to the terms of a development plan (a "Development Plan") submitted by Lundbeck and approved by the Development Committee. Each Development Plan will set forth the principal steps, allocation of responsibilities and related budget for those pre-clinical and clinical studies and related regulatory work necessary to obta in approvals for such indications as approved by the Development Committee. Each Development Plan shall be subject to revision with the approval of the Development Committee, in light of the progress of the development work from time to time.

                                     3.1.3     Lundbeck shall be responsible for Development Costs up to a maximum of [Confidential Treatment] with respect to S-Enantiomer (the "Maximum Costs"). To the extent the Development Costs for the development of the Compound exceed the respective Maximum Costs applicable to Compound, Forest Ireland shall be responsible for the entire amount of such excess to the extent related to the development of the S-Enantiomer.

                                     3.1.4     In light of the progress of the Development Work, the Development Committee shall review and recommend sources, and terms and conditions, of supplies of Compound and Product, both for developmental and for commercial and marketing supply requirements in the Territory. It is contemplated that (i) Compound may be supplied to Forest Ireland by Lundbeck for formulation into Product, (ii) Lundbeck may supply finished Product or (iii) Product or Compound may be acquired from third party contractors.

                                     3.1.5     In the event the Development Committee is unable to agree upon the approval of a material component of the Development Plan or any modification thereof, Lundbeck shall have the final decision making authority with respect to such issue. However, Forest Ireland shall have the final authority as to whether an element of the Development Plan is required for NDA approval or useful in connection with the marketing of a Product in the Territory. To the extent an element of a Development Plan has been determined by Forest Ireland to be so inapplicable, the costs associated therewith, if undertaken by Lundbeck, shall be deemed Non-Program Product Costs.

                                     3.1.6      The Development Plan shall require Forest Ireland to be responsible for all regulatory work required to prepare and file the NDA and may require Forest Ireland to undertake formulation work to develop appropriate dosage forms or to oversee development activities, such as the performance or monitoring of clinical studies, taking place primarily in the Territory. Forest Ireland will involve Lundbeck in the preparation of the regulatory strategy and, upon Lundbeck's request, Lundbeck may participate in meetings with the FDA or third parties provided such participation does not adversely affect a meeting.

                                     3.1.7     Nothing set forth herein shall be deemed to prevent either party from performing formulation or development work not required by the terms of the Development Plan with respect to the Compound or Product, provided that no such development work is inconsistent with the objectives of a Marketing Plan or Development Plan and does not pose a risk to the overall development of such Compound or Product. Costs associated with any such work shall be for the account of the party performing such work and shall be deemed Non-Program Product Costs. The other party shall be obligated to provide such technical cooperation, including the supply of Compound or Product, as applicable, to the party undertaking such work as if such other party were an "assigning p arty" for purposes of Section 9.3 hereof.

                                     3.1.8     The Development Committee shall have the authority to determine, in light of the progress of the development work, that further development work is unlikely to result in the development of a Product at a commercially reasonable cost or to provide a commercially reasonable return on investment. In the event of such determination, the License with respect to the relevant Patents and Technology shall be deemed terminated in all respects, such Product or Compound shall no longer be deemed Product or Compound for purposes of this Agreement and any subsequent development or marketing thereof in the Territory shall not give rise to obligations of payment or performance hereunder. In the event the parties do not agree upon such determination, the party which does not wish to proceed with development shall promptly assign all rights to the relevant Technology and Patents, or Forest Ireland Technology, as the case may be, to the party wishing to proceed, for purposes of enabling such party to proceed with the development and marketing of such Product in the Territory at its own cost and without obligation or right to or of the other party hereunder.

                 4.     Marketing.

                         4.1     The parties agree that Forest Ireland shall market the S-Enantiomer in the manner provided or permitted by the terms of that separate S-Enantiomer Supply Agreement between Lundbeck and Forest Ireland of even date herewith (the "S-Enantiomer Supply Agreement").

                 5.     Additional S-Enantiomer Compensation.

                         5.1     Simultaneously herewith, the parties have executed the S-Enantiomer Supply Agreement which provides for further compensation arrangements between Forest Ireland and Lundbeck with respect to the supply of Compound and Product and the marketing of such Product.

                 6.     Representations and Warranties.

                         6.1     Each party represents and warrants to the other as follows:

                                     6.1.1     Existence and Authority. It is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to execute, deliver and perform this Agreement. The execution of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on its part and do not conflict with the terms and conditions of any contract, agreement, arrangement or understanding to which such party is subject.

                                     6.1.2     Enforceability. This Agreement is a valid and binding obligation of said party, enforceable against it in accordance with its terms.

                                     6.1.3     Litigation. There is no action, suit, proceeding or investigation pending or, to its knowledge, threatened before any court or administrative agency against said party which could, directly or indirectly, reasonably be expected to affect its ability to perform its obligations hereunder.

                         6.2     Lundbeck hereby represents and warrants to Forest Ireland that:

                                     6.2.1     Lundbeck is the sole owner of the Patents and the Technology and is not subject to any license, restriction, royalty obligation, encumbrance or claim of any nature whatsoever with respect thereto. Lundbeck has the right to grant Forest Ireland the License in accordance with the terms and conditions hereof.

                                     6.2.2     Lundbeck has disclosed or made available for review by Forest Ireland sufficient information and data possessed by Lundbeck with respect to the Patents and Technology and the Compound to enable Forest Ireland to evaluate its interest in entering into this S-Enantiomer License Agreement.

                                     6.2.3     No claim of ownership, invalidity or patent infringement has been asserted by any third party (including, without limitation, by employees, consultants or other personnel of Lundbeck) against Lundbeck or any Affiliate with respect to the Patents or the Technology nor is Lundbeck aware of any reasonable basis for the assertion of any such claim.

                         6.3     Each of Forest Ireland and Lundbeck hereby covenant to the other as follows:

                                     6.3.1     Each party shall perform its obligations hereunder in compliance with all applicable requirements of law or governmental regulations, including the Act.

                                     6.3.2     Forest Ireland shall disclose to Lundbeck and Lundbeck shall disclose to Forest Ireland, in each case within ten (10) calendar days and in writing, all reports or other knowledge ("Safety Data") they may from time to time obtain or otherwise receive with respect to "serious adverse experiences", whether or not considered fatal or life threatening (as defined in 21 CFR ' 312.32 and ' 314.80) without regard to casualty assessment, with respect to Product (whether occurring within or outside of the Territory). With respect to "fatal or life-threatening experiences" (as defined in 21 CFR ' 312.32 and ' 314.80) without regard to casualty assessment, each party shall disclose to the other such Safety Data within five (5) calendar days a fter they obtain or otherwise receive such Safety Data. Transmission of Safety Data will be by facsimile transmission or electronic transfer, followed by confirmation mail. Each party shall cause its other sublicensees to disclose to it any Safety Data which they may from time to time obtain or otherwise receive, within the same time limits as are provided in this Section, and each party hereto shall disclose to the other party hereto such Safety Data received from its sublicensees within the time limits provided herein after receipt thereof. Each party shall promptly deliver to the other all correspondence which such party may receive from regulatory authorities in jurisdictions where such party has rights to market Product, except for procedural, nonsubstantive communications which do not relate to the safety of the Product. Each party shall deliver to the other party in an annual report the "other safety information" (as referred to in 21 CFR ' 312.32 (d)(4)) which it obtains or possesses from time to t ime.

                         6.4     Forest Ireland hereby represents and warrants to Lundbeck that Forest Ireland has had an opportunity to review all data furnished or made available to Forest Ireland by Lundbeck with respect to the Patents, Technology and Compound and has had an opportunity to make such inquiries with respect to such data as Forest Ireland deemed appropriate to determine to enter into this S-Enantiomer License Agreement.

                 7.     Confidentiality Exclusivity.

                         7.1     Each party recognizes the proprietary interest of the other party in the technical information, know-how, technology, process, data, results of testing and clinical development acquired or possessed by the other party relating to the development, formulation, manufacture, testing, marketing or distribution of Compound or Product and which may be disclosed by the other party to such party from time to time under this Agreement (the "Confidential Information"). Each party hereto agrees to maintain Confidential Information of the other party in strict confidence and not to disclose, without the prior written consent of the other party, directly or indirectly, such information to third parties except for:

                         7.2     The obligations of confidentiality set forth in this Section 7 shall survive any termination of this Agreement however caused or the expiration of this Agreement.

                         7.3     Neither party shall market or sell, or participate (including by means of license or distributorship arrangements) in the marketing or sale of, pharmaceutical products for sale or distribution in the Territory during the first three Marketing Years of a Product which are indicated primarily for the indications for such Product and which utilize substantially the same mode of pharmacologic action (each such product a "Directly Competitive Product"), except for the Product. The foregoing shall not be deemed to apply to the product known as Citalopram which is anticipated to be marketed in the Territory by Forest Ireland pursuant to a separate license agreement with Lundbeck.

                         7.4     In the event that either party is developing, acquiring or licensing (or commences to do so) products or compounds which are reasonably anticipated to become Directly Competitive Products within the first three Marketing Years of a Product, such party shall be obligated to offer the other party to include the development and marketing of such product under terms consistent with the terms of the Joint Venture Agreement between Forest Inc. and Lundbeck dated the 27th day of March, 1998 on terms and conditions hereof applicable to Compound or Product, or such other terms and conditions as may be mutually agreed.

                         8.1     Lundbeck shall indemnify and hold Forest Ireland harmless from and against any direct costs, expenses (including, without limitation, reasonable attorneys' fees) or direct damages which directly arise from breach by Lundbeck of any of its representations, covenants, warranties or obligations set forth herein, except to the extent arising from any matter as to which Forest Ireland has agreed to indemnify Lundbeck hereunder. Forest Ireland shall indemnify and hold Lundbeck harmless from and against any direct costs, expenses (including, without limitation, reasonable attorneys' fees) or direct damages which directly arise from breach by Forest Ireland of any of its representations, covenants, warranties or obligations set forth herein, except to the extent arising from any matter as to which Lundbeck has agreed to i ndemnify Forest Ireland hereunder. In the event a third party claim is asserted against either party in connection with Product or Compound which does not arise from the breach by either party of a representation, warranty, covenant or obligation hereunder, such party shall be indemnified by the other to the extent of 50% of the direct costs and losses incurred. The party obligated to provide indemnity pursuant to this Section 8.1 is hereinafter referred to as the "Indemnifying Party."

                         8.2     Promptly after the receipt by any party hereto of notice of (a) any claim or (b) the commencement of any action or proceeding, such party will, if a claim with respect thereto is to be made against any party obligated to provide indemnification pursuant to Section 8.1 hereof, give such Indemnifying Party written notice of such claim or the commencement of such action or proceeding. Such Indemnifying Party shall have the right, at its option, to compromise or defend, at its own expense and by its counsel, any such matter involving the asserted liability of the party seeking such indemnification. Such notice, and the opportunity to compromise or defend, shall be a condition precedent to any liability of the Indemnifying Party under the indemnification agreement contained in said Section 8.1. In the event that any Inde mnifying Party shall undertake to compromise or defend any such asserted liability, it shall promptly notify the party seeking indemnification of its intention to do so, and the party seeking indemnification agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise of, or defense against, any such asserted liability. In any event, the indemnified party shall have the right, at its own expense, to participate in the defense of such asserted liability, provided that the Indemnifying Party's counsel shall make all final decisions concerning the defense or compromise or settlement of such litigation.

                         8.3     Each of the parties hereto shall be entitled to be represented at any proceeding brought by the other party under this Section 8 by its own counsel, at its own cost and expense, and shall fully cooperate with the other party in any such proceeding.

                 9.     Term.

                         9.1     Unless otherwise sooner terminated in accordance with the terms hereof, this Agreement shall expire on December 31, 2010 (the period from March 27, 1998 through such date being referred to as the "Initial Term"). The term of this Agreement shall automatically be deemed to extend after the Initial Term for successive five year periods (each a "Renewal Term") unless either party shall have notified the other in writing, no later than 12 months prior to the expiration of the Initial Term or any Renewal Term of its intention not to renew the term hereof. The Initial Term together with all Renewal Terms are referred to collectively as the "Term".

                         9.2     Following the expiration of the Term, Forest Ireland shall continue to have an exclusive License under the Patents and Technology to develop, manufacture, market, sell and distribute Products in the Territory, provided that the terms and conditions of the S-Enantiomer Supply Agreement or any successor agreement or arrangement continue to apply.

                         9.3     None of the expiration of the Term, termination of this Agreement or termination of the License or assignment of assets contemplated by this Section or by Sections 3.1.8, 10 or 11 shall be deemed to relieve either party of any obligation of payment or performance accrued prior to such event. In addition, in connection with any expiration, termination or other event where one party is to assign Technology or Patents, or Forest Ireland Technology, to the other, the assigning party shall be obligated to cooperate with the party receiving such rights in order to complete such technology transfer in a complete and efficient manner, including the disclosure of all necessary data and the reasonable availability of appropriate personnel for technical cooperation. In addition, both parties shall furnish ongoing cooperation, i ncluding, as applicable, a continuing supply of Compound or Product and continuing disclosure of information and technical cooperation as reasonably required to assure that the party acquiring or continuing to own Technology, Patents or Forest Ireland Technology is able to proceed with the development and commercialization of the Compound or Product in question.

                 10.     Termination.

                         10.1     A party which is not then subject to an event of default (the "non-defaulting party") may terminate this Agreement in the event of a default by the other party (the "defaulting party"), defined as follows:

                 In the event of a disagreement of the parties as to the occurrence or persistence of a default, no termination shall be effective pursuant to this Section unless the occurrence of such default has been established pursuant to arbitration in accordance with Section 13 hereof and the defaulting party shall not have thereafter promptly paid any amount or performed any action required to cure the default so established.

                         10.2     In the event this Agreement is terminated pursuant to Section 10.1, the effect of such termination on rights to the S-Enantiomer are set forth in the S-Enantiomer Supply Agreement. Termination of this Agreement shall not be in limitation of any rights or remedies to which either party may be entitled hereunder or at law.

                 11.     Change of Control.

                         11.1     For purposes of this Section 11, a "Change of Control" shall mean (i) the acquisition, directly or indirectly, of beneficial ownership of a percentage of the voting power of a party or its ultimate corporate parent (as applicable) sufficient to exercise de facto control over the policies and business decisions of a party or of all or substantially all of the business or assets of such party (whether by way of merger, sale of stock, sale of assets or otherwise) by any person or entity (including a "group" as defined in Section 13(d)-3 of the Securities Exchange Act of 1934 (the "Exchange Act")) (provided that the acquisition of less than 50% of such voting power shall not be deemed to constitute a "Change of Control" for as long as the acquiror or "group" qualifies to report, and does in fact report, its beneficial own ership on Schedule 13G in accordance with Rule 13(d)-1 promulgated under the Exchange Act) or (ii) individuals who, for a period of at least two consecutive years prior to such determination (together with any other individuals whose election was approved by a two-thirds vote of the directors then in office) shall cease to constitute at any time a majority of the members of the Board of Directors of its ultimate corporate parent.

                         11.2     In the event either party is subject to a Change of Control which was not approved or recommended by the Board of Directors of such party or its ultimate corporate parent (as applicable) as constituted immediately prior to such Change of Control, the following provisions shall apply:

                                     11.2.1     The party which has not undergone such Change of Control (the "Unaffected Party") shall retain or reacquire, as the case may be, all rights to the Patents, Technology and Trademarks in connection with marketing Products in the Territory (i.e., if such Unaffected Party is Forest Ireland, Forest Ireland shall continue to own the Trademarks and shall be deemed to have a perpetual License to such other assets and if such Unaffected Party is Lundbeck, Forest Ireland shall assign to Lundbeck all of the assets contemplated by Section 10.2 and the License shall be deemed to have expired), subject to the payments contemplated by Section 11.2.2.

                                     11.2.2     The Unaffected Party shall be obligated to pay the party which has undergone such Change of Control if the S-Enantiomer has completed a Phase III Clinical Study (the "Phase III Condition"), 100% of the Fair Market Value of such Product, or if the S-Enantiomer has not completed the Phase III Condition, a royalty of five percent of Net Revenues. The payment obligation of any such additional compensation and royalty obligations shall extend through any period in which Product is being sold by either party in the Territory.

                         11.3     In the event either party is subject to a Change of Control which is approved or recommended by the Board of Directors of such party or its ultimate corporate parent (as applicable) as constituted immediately prior to such Change of Control, the following provisions shall apply:

                                     11.3.1     With respect to the S-Enantiomer, if it has not completed the Phase III Condition, the Unaffected Party shall have the Development Option, as defined and in accordance with the terms and conditions of Section 11.3.3.

                                     11.3.2     With respect to Compound or Product which has completed the Phase III Condition but only as to which there has been an "Impairment" (as defined in the next sentence), the Unaffected Party shall have the option (to be exercised by the furnishing of written notice of such exercise to the other party within 90 days of the Change of Control), but not the obligation, to reacquire or retain rights to such Compound or Product, as the case may be, in accordance with Section 11.2.1 and, upon the exercise of such option, shall pay in the case of the S-Enantiomer, a lump-sum payment equal to 100% of Fair Market Value within sixty (60) days of the furnishing of the notice of option exercise, or, if Fair Market Value is to be determined by a Valuation Expert , promptly following such determination. For purposes of this Section, an Impairment shall be deemed to have occurred in respect of a Product only if:

                                     11.3.3     With respect to Compound or Product which has completed the Phase III Condition and as to which there has been no Impairment, the Unaffected Party shall not have rights to reacquire or retain rights to Patents or Technology; provided that (but only in the event there is then no approved NDA for such Products), the Unaffected Party shall have the option (the "Development Option"), but not the obligation, to assume full authority for the continued development of such Compound or Product without the participation of the Development Committee or the other party as may reasonably be required to obtain an approved NDA to market such Product in the Territory in light of the objectives of this S-Enantiomer License Agreement. In the event the Unaffected Party has exercised the Development Option (i) if such Unaffected Party is Lundbeck, Forest Ireland shall be obligated to pay Lundbeck in connection with the marketing of such Products, in addition to the compensation provided by Section 5.1 hereof, an amount equal to the amount of Sole Development Costs incurred by Lundbeck with respect to such Product and (ii) if such Unaffected Party is Forest Ireland, Forest Ireland shall receive a credit against compensation payable to Lundbeck pursuant to Section 5.1 hereof for the amount of Sole Development Costs incurred by Forest Ireland with respect to such Product.

                 12.     Payments; Accounting Formats; Records; Currency Translation and Adjustments.

                         12.1     All payments by one party to the other hereunder (whether of additional license fees pursuant to Section 5.1, reimbursement of Development Costs, the purchase price for Compound or inventories of Product, or, unless otherwise agreed by the parties, any other payment) shall be made quarterly by the 30th day following the end of each Quarter. All payments hereunder shall be made in United States Dollars. To the extent the basis for any such payment is calculated in a currency (including any currency which may be subsequently introduced by the European Union) other than United States Dollars, such amount shall be converted into United States Dollars based upon the prevailing rate of exchange during the Quarter to which such payment relates.

                         12.2     The chief financial officers of each of Forest Ireland and Lundbeck shall cooperate to develop a system of reporting and payments which will provide for the netting of payments between the parties for any Quarter as well as a reporting format which identifies with reasonable specificity the basis and calculation hereunder for any payment, currency or other adjustment or netting made or required to be made hereunder.

                         12.3     Each party agrees to maintain accurate books and records in accordance with all applicable accounting standards and law and regulations and consistent with the books and records of such party generally, which accurately reflect all costs, expenses and revenues relevant to the determination and payment obligations of this Agreement. Each party, together with its independent representatives and accountants to which the other shall have no reasonable objection (and subject to appropriate safeguards of confidentiality), shall be entitled to audit such books and records of the other party solely for purposes of verifying any such determination or payment obligation. The costs of such audit shall be borne by the party undertaking such audit; provided that if such audit discloses an underpayment to or overpayment by such pa rty of 10% or more, the cost of such audit shall be borne by the other party, as well as prompt rectification of the underpayment or overpayment so made.

                 13.     Arbitration

                         13.1     Any disputes arising with respect to the interpretation or enforcement of, or claims with respect to, any provision hereof, and any determination required to be made pursuant to Section 1.24 or any decision of a Valuation Expert, shall be submitted to arbitration in London, England in accordance with the rules of the London Court of International Arbitration, as amended from time to time. In any arbitration pursuant to this Agreement, the award or decision shall be rendered by a majority of the members of an arbitration panel consisting of three members, one of whom shall be chosen by each of the parties hereto and the third of whom, who shall be the chairman of the panel, shall be appointed by mutual agreement of the two arbitrators so appointed by the parties. Each arbitrator shall have pharmaceutical exec utive or relevant legal experience. Arbitration proceedings shall be conducted in the English language. Each party shall bear 50% of the costs of such arbitration proceeding; provided that the arbitration panel shall have the authority to award such costs to a party as it determines to be equitable. This is an arbitration for the purposes of the Arbitration Act, 1996 and will be final, binding and conclusive upon the parties. Enforcement of such award or decision may be obtained in any court having jurisdiction over the party against whom such enforcement is sought.

                         14.1     The relationship of Forest Ireland and Lundbeck shall be that of independent contractors. This Agreement shall not be construed to constitute Forest Ireland and Lundbeck as partners or joint venturers, or to establish any relationship in the nature of agency. Neither party shall hold itself out as having the authority to bind the other party hereto.

                 15.     Events of Force Majeure.

                         15.1     Neither Forest Ireland nor Lundbeck shall be held liable or in default for failure of performance for any cause beyond its reasonable control including, for example, Acts of God, declared or undeclared war, fire, flood, interruption of transportation, embargo, insurrections, accident, explosion, governmental laws, orders, regulations, or restrictions, any strike, lockout or other labor troubles or similar events commonly known as events of force majeure.

                 16.     Miscellaneous

                         16.1     Subject only to Sections 7.3 and 7.4, nothing set forth herein shall be deemed to limit, restrict or preclude Forest Ireland and its Affiliates or Lundbeck and its Affiliates from performing other research or development projects, independently or in collaboration with others, or from developing, launching or marketing other pharmaceutical products, whether for their own account or for the account of third parties.

                         16.2     This Agreement shall be governed by and construed in accordance with the laws of England; provided that such choice of law shall not be deemed to include provisions of the Treaty of Rome applicable to the licensing of intellectual property to the extent such provisions do not apply by their terms to the licensing of technology for exploitation in the Territory.

                         16.3     Each of the parties shall, from time to time during the term of this Agreement, upon request by the other, execute and deliver all such further documents or instruments as may be required in order to give effect to the purpose and intent of this Agreement.

                         16.4     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective assigns and successors in interest. Neither party may assign its rights or duties hereunder, except to a wholly-owned subsidiary, without the prior written consent of the other party.

                         16.5     Any notice, request or other communication required or permitted by this Agreement to be given by either party to the other shall be in writing and either mailed by registered or certified mail, return receipt requested, by express delivery service or by facsimile transmission, addressed to such party, Attention: The President at its address indicated above or to such other address as such party may previously have designated by like written notice. Notice shall be deemed to have been given upon receipt. Facsimile transmission numbers for the separate parties are as follows:

                                     If to Forest Ireland:    353 1 8672226

                                     If to Lundbeck

                                     (Legal Department):    45 36 30 27 32

                         16.6     This S-Enantiomer License Agreement; the Umbrella Agreement of even date herewith by and among Forest Inc., Forest Ireland, and Lundbeck; and the S-Enantiomer Supply Agreement by and between Forest Ireland and Lundbeck of even date herewith (collectively, the "Agreements") contain the entire agreements between Forest Inc. or Forest Ireland and Lundbeck with respect to the subject matter thereof. The Agreements supercede any and all other agreements, written or oral, between Forest Inc. or Forest Ireland and Lundbeck with respect to the subject matter thereof or in conflict with their terms.

                         16.7     No modification or waiver of any of the terms of this Agreement shall be deemed valid unless it is in writing and signed by the party to whom such modification is sought to be enforced. The failure of either party to insist upon the strict performance of any term of this Agreement or the waiver by either party of any breach under this Agreement shall not prevent the subsequent strict enforcement of such term and shall not be deemed a waiver of any other or subsequent breach.

                         16.8     In the event any court declares illegal or unenforceable, as written or applied, any provision of this Agreement, the balance of such provision and this Agreement shall continue in full force and effect as if such provision had been deleted or inapplicable to the situations to which such provision cannot be legally applied.

                         16.9     Neither party shall issue any press release or make any public announcement covering this Agreement or the transactions contemplated hereby without affording the other party the prior opportunity to review and comment upon such release or announcement. The foregoing shall not be deemed to limit either party's right to make disclosures required by applicable provisions of law.

                 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

FOREST LABORATORIES (IRELAND) LIMITED

By:        /s/Raymond Stafford

Name:   Raymond Stafford

Title:     Chief Executive

H. LUNDBECK, A/S

By:        /s/Erik Sprunk-Jansen

Name:   Erik Sprunk-Jansen

Title:     Chairman and President

EXHIBIT 10.18

THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[CONFIDENTIAL TREATMENT]."

                 S-ENANTIOMER SUPPLY AGREEMENT dated this May 29, 2002 by and between Forest Laboratories (Ireland) Limited, a corporation organized and existing under the laws of the Republic of Ireland and having its principal executive offices at Clonshaugh Industrial Estate, Clonshaugh, Dublin 17 Republic of Ireland ("Forest Ireland") and H. LUNDBECK A/S, a corporation organized under the laws of Denmark and having its principal executive offices at 9 Ottiliavej, DK-2500, Copenhagen-Valby, Denmark ("Lundbeck").

                 A.     The Parties hereto and Forest Laboratories, Inc. ("Forest Inc.") have agreed to novate, effective as of March 27, 1998 (except as otherwise provided herein), the Supply Agreement by and between Forest Inc. and Lundbeck dated the 27th day of March, 1998, as amended to date (the "1998 Supply Agreement") in accordance with the terms hereunder.

                 B.     Forest Ireland and Lundbeck are parties to a S-Enantiomer License Agreement of even date herewith (the "S-Enantiomer License Agreement") pursuant to which, among other things, Lundbeck has granted Forest Ireland the exclusive right and license under the Patents and Technology (as therein defined) to manufacture or have manufactured, market, sell and distribute finished pharmaceutical products in which the active ingredient is the chemical known as S-(+)-Citalopram (as more fully defined herein, the "Compound") and pursuant to which Lundbeck will undertake a program of research and development to obtain regulatory approval to market such finished pharmaceutical products in the Territory.

                 C.     Forest Ireland and Lundbeck wish to set forth their agreement pursuant to which Lundbeck shall supply to Forest Ireland, and Forest Ireland will purchase from Lundbeck, Forest Ireland's requirements of the Compound or Finished Product to the extent such purchase and sale is contemplated, or may subsequently be required, by the terms, conditions and procedures of the S-Enantiomer License Agreement.

                 NOW, THEREFORE, in consideration of the foregoing and of the terms and conditions hereof, the parties hereto hereby agree, effective as of March 27, 1998 (except as otherwise provided herein), as follows:

                 1.     Definitions.

Except as otherwise defined herein, capitalized terms shall have the respective meanings assigned to them in the S-Enantiomer License Agreement. In addition, the following terms shall have the respective meanings assigned to them below:

                         1.1     "Average Daily Dose" for any period shall mean the average number of milligrams of Original Product and Finished Product, respectively, used by consumers using the respective product in the Territory.

                         1.2     "Compound" or "S-Enantiomer" shall mean the Compound (S)-1-[3-(dimethylamino)propyl]-1(4-fluorophenyl)-1, 3-dihydro-5-isobenzofurancarbo-nitrile.

                         1.3     "Equivalent Quantity" shall refer to the quantity of Original Compound required to formulate a number of Average Daily Doses of Original Product which equals the number of Average Daily Doses of Finished Product formulated from one kilogram of Finished Product.

                         1.4     "Finished Product" shall mean pharmaceutically formulated finished products having the Compound as their only active ingredient in form for sale and distribution pursuant to an approved NDA.

                         1.5     "Formulate" shall mean to formulate Compound into Finished Product.

                         1.6     "Marketing Year" shall mean each 12 consecutive month period beginning with the commercial launch of Finished Product in the Territory.

                         1.7     "Minimum Price" shall mean a price, expressed in Danish Kroner, for a kilogram of Compound, which is calculated so as to produce the same profit or loss to Lundbeck as the Minimum Supply Price (as defined in the License and Supply Agreement between Forest Ireland and Lundbeck dated October 3, 1995 (the "1995 Agreement") for the amount of Original Compound needed to produce the number of tablets of Original Product which corresponds to the Equivalent Quantity. "Sample Price" shall mean a price, expressed in Danish Kroner, for a kilogram of Compound, which is calculated so as to produce the same profit or loss to Lundbeck as the price for samples set forth in Article 10(f) of the 1995 Agreement for the amount of Original Compound needed to produce the num ber of tablets of Original Product which corresponds to the Equivalent Quantity.

                         1.8     "Net Selling Price" for any dosage form of Finished Product for any period shall mean the price obtained by dividing (i) Net Revenues of such Finished Product for such period by (ii) the number of units of such Finished Product with respect to which Net Revenues were determined.

                         1.9     "Original Compound" shall mean the chemical entity known as Citalopram as more fully described in the 1995 Agreement.

                         1.10     "Original Product" shall mean finished pharmaceutical products formulated from Original Compound.

                         1.11     "Quarter" shall mean each three calendar month period ending March 31, June 30, September 30 and December 31, and the first Quarter shall be deemed to include the period from the commencement of the first Marketing Year through the end of the first calendar quarter in which the first Marketing Year commenced.

                         1.12     "Specifications" shall mean the specifications for Compound set forth on Schedule 1.8 hereto, as such Specifications may be amended by the Development Committee in light of requirements for FDA approval of the NDA.

                 2.     License Grant And Development.

                         2.1     The parties acknowledge that, pursuant to the S-Enantiomer License Agreement, Lundbeck has granted to Forest Ireland, and Forest Ireland has acquired from Lundbeck, the License as defined in, and subject to the terms therein set forth. The parties further acknowledge that the License shall not be deemed to apply to uses of the Patent for cerebrovascular disorders and inhibition of platelet aggregation (the "Use Patent") from and after August 6, 2005, from and after which date Zeria Pharmaceutical Co. Ltd. ("Zeria") will regain all rights to such use in the Territory, unless and to the extent the license arrangements between Lundbeck and Zeria have been amended or modified at such time. If Forest Ireland wishes to continue utilization of the Use Patent after such date, Forest Ireland shall inform Lundbeck no later than January 1, 1999 whereupon Lundbeck undertakes to negotiate an extension of the agreement with Zeria in order to permit Forest Ireland's continued exploitation of the Use Patent. Lundbeck does not warrant that Lundbeck will be able to achieve any such extension. In the event Lundbeck has not achieved any such extension by August 6, 2004, Forest Ireland shall have the right to negotiate for such rights directly with Zeria.

                         2.2     In accordance with the terms of the S-Enantiomer License Agreement, the Development Committee may determine that (i) Lundbeck shall supply all of Forest Ireland's requirements of Compound or Finished Product and Forest Ireland shall purchase such requirements from Lundbeck or (ii) Lundbeck or Forest Ireland may acquire Compound or Finished Product from a third party vendor. The parties hereby agree that purchases of Compound or Finished Product by Forest Ireland from Lundbeck for purposes contemplated by the S-Enantiomer License Agreement shall be pursuant to the terms and conditions hereof and that, in the event Compound or Finished Product is supplied by a third party vendor for purposes of the S-Enantiomer License Agreement, Lundbeck shall purchase such product for delivery to Forest Ireland as approved by the Development Committee and shall remain entitled to the payments of purchase Price and Royalty to be paid by Forest Ireland hereunder.

                         2.3     Lundbeck agrees to continue performing development work with respect to the Compound pursuant to the terms of the Development Plan for the Compound to be approved pursuant to the S-Enantiomer License Agreement. The costs of such development work through the completion of a Phase I Clinical Study shall be for the account of Lundbeck and shall not be deemed "Development Costs" for purposes of the S-Enantiomer License Agreement. Lundbeck shall supply an adequate quantity of citalopram dicarbinol racemate without charge to Forest Ireland so as to yield [Confidential Treatment] of Compound. The costs of conversion of such citalopram dicarbinol racemate into Compound, together with the costs of development work incurred following the completion of such Phase I Clinical S tudy, shall be deemed Development Costs for purposes, and subject to the terms and conditions, of the S-Enantiomer License Agreement.

                         2.4     The parties acknowledge that, as part of the development work contemplated hereby, Lundbeck may, either directly or through contractual arrangements with independent third parties, undertake the development or acquisition of manufacturing capability to formulate and manufacture Compound from Original Compound or an intermediate thereof and, in connection therewith, may incur capital expenditures to build or acquire such manufacturing capacity. In the event that the Development Committee, pursuant to the terms of the S-Enantiomer License Agreement, determines not to proceed with further development of Compound or the Compound is not commercially launched in the Territory for any reason, Forest Ireland agrees to reimburse to Lundbeck Lundbeck's direct, out-of-pocket capital e xpenditures and directly allocable internal overheads (but not corporate general or administrative overheads), together with the costs of noncancelable contractual obligations ("Reimbursable Expense") in developing or acquiring such manufacturing capacity to the extent such Reimbursable Expenses exceed the value of such capacity for other viable or available uses. Before incurring any Reimbursable Expenses or obligations therefor, Lundbeck will consult with Forest Ireland and will not incur such expenses or obligations unless Forest Ireland has agreed to the programs pursuant to which such expenses are to be incurred. Lundbeck agrees to maintain true and complete records of Reimbursable Expenses in accordance with Section 3.5 hereof.

                         2.5     Lundbeck hereby grants to Forest Ireland a right of first refusal to receive from Lundbeck a right to co-market Finished Product in Canada, pursuant to a separate co-marketing agreement to be negotiated and entered into, provided that Lundbeck determines to market Finished Product in Canada and provided further that Forest Ireland then has, directly or indirectly (i.e., through distributors or other third party arrangements reasonably satisfactory to Lundbeck) adequate sales capability in Canada. "Co-marketing" shall mean the marketing, use, distribution and sale of Finished Product by the parties hereto under different trademarks. In the event Forest Ireland is granted co-marketing rights for Canada, Forest Ireland may have Finished Product co-promoted in Canada, provided that Forest Ireland shall be responsible for acts or omissions of Forest Ireland's co-promotion partner.

                 3.     Purchase Price; Royalties.

                         3.1     The purchase price (the "Purchase Price") for Compound purchased by Forest Ireland hereunder shall be [Confidential Treatment] of Net Revenues. In addition, Forest Ireland shall pay a royalty (the "Royalty") in respect of the use of the Trademark of [Confidential Treatment] of Net Revenues. In no event shall the sum of the Purchase Price and Royalty for a Quarter be less than the Minimum Price for the quantity of Compound purchased during that Quarter.

                         3.2     Lundbeck shall provide Forest Ireland with Compound for Formulation by Forest Ireland and distribution as free samples during the first three Marketing Years at no charge to Forest Ireland; provided that, to the extent the value of the quantity of such free Compound exceeds [Confidential Treatment] of Net Revenues during any such marketing Year (such value determined by calculating the number of units of Finished Product represented by such Compound and assuming such amount was sold at the Net Selling Price for the Marketing Year in question) Forest Ireland shall pay to Lundbeck a Purchase Price equal to the Sample Price per kilogram of Compound in excess of such quantity to the extent used for sampling purposes. Forest Ireland shall be entitled to purchase Compound for the formulation of Product to be distributed as samples following the expiration of the third Marketing Year at the Sample Price.

                         3.3     Payments of Purchase Price and Royalty shall be made by Forest Ireland on an "on account" basis within 30 days of each shipment of Compound to Forest Ireland, and settled following the end of each Quarter pursuant to Section 12 of the S-Enantiomer License Agreement. The "on account" payment shall be equal to [Confidential Treatment] of the weighted value of such order. The weighted value of an order shall mean the sum of (a) the amount determined by multiplying (i) the number of individual doses represented by such quantity of Compound after deducting the number of such doses reasonably anticipated by Forest Ireland to be distributed as samples by (ii) the Net Selling Price in effect as of the last day of the preceding Quarter (or, with respect to any Quarter prior to the first commercial sale of Finished Product, a reasonably estimated Net Selling Price) and (b) the total Sample Price, if any, which would be applicable to the anticipated distribution of samples, after allowing for the number of samples as to which there is no charge to Forest Ireland pursuant to Section 3.2. Following the end of each Quarter, the actual Purchase Price and Royalty shall be determined based upon the actual Net Revenues and sample distribution for such Quarter and the parties shall adjust payments, in accordance with Section 12 of the S-Enantiomer License Agreement, so that Lundbeck shall have received the Purchase Price and Royalty provided hereby.

                         3.4     It is the intention of the parties that the profit earned by Lundbeck from selling Compound to Forest Ireland, including Purchase Price and Royalty, shall not be less, on an absolute basis, than the profit which Lundbeck would have earned from selling Original Compound to Forest Ireland, after allowing for the different quantities resulting from differences in formulation of finished dosage forms and different Average Daily Doses between Original Product and Finished Product. Accordingly, the parties have agreed as follows:

                                     3.4.1     At the end of each Marketing Year, Forest Ireland shall calculate, based upon information supplied by Lundbeck (a) Lundbeck's profits from the sale of the Compound ("Compound Profit") by subtracting (i) Lundbeck's direct manufacturing costs, including allocated manufacturing overheads but excluding corporate general or administrative overheads ("Costs") for manufacturing the quantity of Compound purchased by Forest Ireland during such Marketing Year from (ii) the total Purchase Price and Royalty payable by Forest Ireland with respect to purchases of Compound during such Marketing year, and (b) the assumed profit to Lundbeck from the sale of the Equivalent Quantity of Original Compound (" Original Compound Profit") by subtracting (i) Lundbeck's Costs of manufacture of the Equivalent Quantity from (ii) the total compensation which Forest Ireland would have had to pay Lundbeck for such Equivalent Quantity pursuant to the terms of the 1995 Agreement, based upon the Net Selling Price for Original Product in effect during such Marketing Year. To the extent the Original Compound Profit exceeds the Compound Profit for a Marketing Year, Forest Ireland shall pay the amount of such excess to Lundbeck as additional Purchase Price for such previous Marketing Year. In calculating Costs, only costs applicable to an efficient manufacturing operation within customary industry standards and in light of alternate sources of supply, or sources which could reasonably be expected to become available, shall be taken into account.

                                     3.4.2     Following the end of the first Marketing Year, the parties shall discuss in good faith an adjustment to the aggregate Purchase Price and Royalty so as to achieve the purpose of Section 3.4.1 without the need for the annual adjustments contemplated by that Section, taking into account the profit being earned by Lundbeck for the equivalent Average Daily Dose of original Product and the marketing conditions and expenses applicable to Forest Ireland's marketing of the Finished Product. In the event the parties are unable to agree upon such adjustment, the provisions of Section 3.4.1 shall continue to apply in accordance with their terms.

                         3.5     Each of Forest Ireland and Lundbeck shall maintain true and complete books and records of all data necessary for the calculation of Net Revenues, sample distribution, Compound Profit, Original Compound Profit and Reimbursable Expenses, as the case may be, to enable the calculation, confirmation and audit of any determination of Purchase Price, Royalty or Reimbursable Expenses required to be made hereunder. Such books and records shall be subject to audit by the other party and its representatives in accordance with the terms and conditions of Section 12.3 of the S-Enantiomer License Agreement.

                         3.6     All payments to be made hereunder shall be made net in United States Dollars by bank transfer remittance to Lundbeck's account 3016-57321-3 held at Den Danske Bank A/S, Holmes Kanal 2, Copenhagen, Denmark, or any other account designated by Lundbeck. Payments shall be subject to netting, recalculation and currency adjusted in accordance with Section 12 of the License Agreement.

                         3.7     To the extent required by law, Forest Ireland is entitled to withhold from amounts payable to Lundbeck under this Agreement all income related taxes levied or assessed thereon. As Lundbeck may receive for such tax payments a credit on the taxes payable by it in the Kingdom of Denmark or elsewhere, Forest Ireland shall without undue delay provide Lundbeck with certified tax receipts or other evidence of payment required by the relevant tax authorities for the taxes legally deducted from payments hereunder.

                         3.8     It is currently contemplated that Lundbeck will supply Compound pursuant to this Agreement for Formulation into Finished Product by Forest Ireland. In the event the parties may subsequently agree that Lundbeck is to supply Finished Product, the Purchase Price, Minimum Price and Sample Price shall each be increased by Lundbeck's Cost of Goods for the additional manufacturing and packaging procedures required to produce Finished Product from Compound.

                         3.9     In addition, in the event Compound is supplied by a third party vendor, Forest Ireland shall make the "on account" and quarterly settlement payments to Lundbeck pursuant to Section 3.3 as if such Compound had been delivered by Lundbeck hereunder.

                 4.     Forecasts; Orders; Deliveries.

                         4.1     No later than 18 months prior to the date on which Forest Ireland reasonably anticipates requiring the first delivery of Compound to take place, Forest Ireland shall supply Lundbeck with a non-binding forecast from the anticipated date of such first delivery through December 31 of such year and for the period of three years thereafter. In addition, Forest Ireland will update the three year forecast at least once per year so that Lundbeck is always in possession of a forecast for the succeeding three years. These forecasts shall not be binding on Forest Ireland or Lundbeck except to the extent of the provisions of Sections 4.2 and 4.3.

                         4.2     No later than 10 months prior to the first requested delivery date for Compound, Forest Ireland shall furnish Lundbeck with a binding order covering Forest Ireland's requirements of Compound through the period from such first requested delivery and ending on the next December 31. Lundbeck shall be obligated to fill such binding order, provided that such binding order does not exceed by more than 20% the quantity forecast for such period pursuant to the forecast delivered pursuant to Section 4.1 hereof. To the extent such order exceeds such forecast, Lundbeck shall use its commercially reasonable efforts to supply such excess quantities.

                         4.3     For each four Quarter period following the end of the period referred to in Section 4.2, Forest Ireland shall furnish Lundbeck with binding forecasts for each such four Quarter period no later than 6 months prior to the beginning of each such four Quarter period. Such forecast shall be submitted on a rolling quarterly basis so that Lundbeck will always be in possession of forecasts pursuant to this Section 4.3 representing four consecutive Quarters commencing 6 months from the date of such forecast. The forecast for the first Quarter shall be deemed a binding order for such Quarter; the forecasts for the next three subsequent Quarters shall be deemed a commitment by Forest Ireland to order an amount of Compound equal to at least 80% of the amount of the forecasts for such Quarters. Such commitment shall become firm orders in subsequent rolling forecasts pursuant to this Section 4.3. Each binding order of Forest Ireland pursuant to this Section 4.3 shall constitute Forest Ireland's agreement to purchase and, but only to the extent such binding orders do not exceed the applicable forecast for such Quarter pursuant to this Section 4.3 by more than 20%, Lundbeck's agreement to sell the quantity of Compound covered by such firm order for the Quarter in question. Lundbeck will use its commercially reasonable efforts to supply quantities of Compound requested by Forest Ireland in excess of amounts forecast pursuant to this Section.

                         4.4     All deliveries of Compound shall be made by Lundbeck CIP Forest Ireland's Dublin facilities (Incoterms 1990), and title and risk of loss shall pass to Forest Ireland in accordance therewith.

                 5.     Marketing; Minimum Purchase Requirements.

                         5.1     Forest Ireland shall market Finished Product in the Territory as if Finished Product were a pharmaceutical product resulting from Forest Ireland's own research and development activities, in light of the commercial potential for the Finished Product in the Territory.

                         5.2     Minimum Purchase Requirements.

                                     5.2.1     Forest Ireland shall be obligated to achieve minimum Net Revenues (the "Minimum Net Revenues") for each of the first three Marketing Years as follows:

                                     5.2.2     Subject to the following provisions of this Section 5.2.2, if the Minimum Net Revenues are not achieved for a Marketing Year, Lundbeck shall be entitled to convert the License granted by the S-Enantiomer License Agreement, but solely in respect of the Compound and Finished Product, into a non-exclusive license upon three months prior written notice by Lundbeck to Forest Ireland. Notwithstanding the preceding sentence, the License shall not become non-exclusive if Forest Ireland shall, following such notice by Lundbeck, (a) pay to Lundbeck an amount equal to [Confidential Treatment] of the Net Revenues not achieved, less Lundbeck's Cost of Goods corresponding to such quantity, (b) purc hase the quantity of Compound corresponding to the Net Revenues not achieved at a purchase price of [Confidential Treatment] of such Net Revenues or (c) agree to carry forward the amount of such Net Revenues not achieved to the Minimum Net Revenue requirement for the succeeding Marketing Year (which Minimum Net Revenue requirements shall be satisfied by the end of the third Marketing Year). In addition, the parties agree that Forest Ireland shall have met the Minimum Net Revenues required for a Marketing Year if Forest Ireland shall have purchased the quantity of Compound during such year, which, if formulated into Finished Product and sold at the Net Selling Price for such Marketing Year, would equal or exceed the Minimum Net Revenue requirement for such Marketing Year.

                 6.     Trademark.

                         6.1     Selection/Filing/Prosecution Maintenance. Lundbeck will suggest a Trademark to be used by Forest Ireland hereunder. Lundbeck's suggestion shall be adopted by Forest Ireland unless Forest Ireland has reasons which, in Lundbeck's judgment, reasonably justifies that Lundbeck's suggestions can not be applied. In such case, Forest Ireland may freely select a Trademark for use in conjunction with the marketing of Finished Products in the Territory hereunder. Forest Ireland's choice shall be subject to Lundbeck's approval, which approval shall not be unreasonably withheld. However Lundbeck is not obliged to accept registration and use of an already registered Lundbeck trademark if such registration does not comply with Lundbeck's strategy in the Territory. Lundbeck shall file applications for registrations fo r the Trademark agreed upon. Forest Ireland shall have the right to market a generic version of the Finished Product in the event it appears reasonably likely that a generic version of the compound has been or will be introduced in the Territory by an independent third party. Any name, including a generic name as e.g., "Citalopram Enantiomer," under which such Finished Product is sold shall be deemed a "Trademark" for purposes of Sections 3.1 and this Section 6.1 and the marketing of such Finished Product shall be governed by the financial terms and conditions provided by Section 3.1. Forest Ireland will notify Lundbeck promptly of its decision to introduce a generic version of the Finished Product in accordance with this Section 6.1. Lundbeck will prosecute such applications and maintain the registration and keep Forest Ireland advised of the status of each application and registration. If Lundbeck has difficulties or is unable to register a selected Trademark, Lundbeck shall advise Forest Ireland and Forest Ireland shall either request Lundbeck to then continue prosecution of the application and/or Forest Ireland shall select another Trademark. All out-of-pocket costs and expenses (including attorneys' fees) associated with the filing of applications, prosecution of applications, registration and maintenance of registrations shall be paid by Lundbeck. Forest Ireland shall assist and cooperate with Lundbeck in its filing and prosecuting all Trademark applications and maintaining Trademark registrations as well as sign all documents necessary to carry out filing and prosecuting such applications and maintaining such registrations. All uses of any Trademark by Forest Ireland anywhere in the Territory shall inure to the benefit of Lundbeck. Forest Ireland is not entitled to market Finished Product without using Trademark.

                         6.2     Ownership. Subject to the terms of the License Agreement, Trademark selected and registered in accordance with Section 6.1 shall be and remain the sole exclusive property of Lundbeck and Lundbeck may freely register and use any Trademark outside the Territory.

                         6.3     Enforcement. Forest Ireland will inform Lundbeck of any known trademarks, applications, registrations, or use of trademarks in the Territory, known or which ought to be known by Forest Ireland, which may cause confusion with Forest Ireland's selected Trademark. Lundbeck may initiate action to enforce its Trademark rights at Lundbeck's cost. In the event Lundbeck elects not to initiate action to enforce its Trademark rights or fails or refuses to do so within sixty days after written request therefore by Forest Ireland, Forest Ireland shall have the right at its option to initiate such action in Lundbeck's name with Lundbeck's full cooperation, provided that Lundbeck is entitled to enforce the Trademark rights in question. In such action by Forest Ireland, Forest I reland shall pay all costs and expenses. Any award for damages collected through infringement suit in the Territory shall be divided between the parties according to the share of loss or potential loss each party would suffer from the infringement. If a Trademark, identified and chosen by Lundbeck, must be substituted by a new trademark after launch of Finished Product, due to an infringement suit brought against Forest Ireland or Lundbeck, the Trademark royalty rate as provided for in Section 3.1, shall be reduced to [Confidential Treatment] for a period of two (2) years from the date on which substitution has taken place in the market. No further compensation shall be paid by Lundbeck to Forest Ireland in this respect.

                         6.4     Quality Control. Forest Ireland will provide Lundbeck with samples of Finished Product bearing the Trademark at Lundbeck's request. All Finished Products sold by Forest Ireland bearing the Trademark shall meet the standard, specifications and instructions laid down or approved by the FDA or the equivalent authority in any state of the Territory. Forest Ireland agrees and undertakes to use the Trademark only on or in connection with the Finished Products under this Agreement. All Finished Products must bear the Trademark.

                         6.5     Infringement. If the Trademark has been identified and chosen by Forest Ireland, Forest Ireland shall be responsible for claims or damages awarded as a result of Trademark infringements. Forest Ireland shall indemnify Lundbeck for claims of Trademark infringement made by an independent third party.

                 7.     Patents.

                         7.1     Alleged Infringement. If a claim of infringement is brought against Forest Ireland alleging infringement of any patent owned by an independent third party by reason of Forest Ireland exploiting Finished Product commercially under the Patents or Technology, Forest Ireland shall promptly give notice to Lundbeck of such claim and provide to Lundbeck all information in Forest Ireland's possession regarding such claim or suit. Not more than ninety (90) days from such notice, Lundbeck shall advise Forest Ireland of Lundbeck's decision as to whether it will or will not defend such suit or claim. If such claim constitutes a suit for infringement, Lundbeck, at its expense, may conduct the defense of such suit and Forest Ireland shall furnish to Lundbeck such reasonable assistance as Lundbeck needs and from time to time reasonably requests, and, at its option and expense, may participate. If Lundbeck elects not to defend such suit in the Territory and has not otherwise disposed of such claim, Forest Ireland may defend or dispose of such suit or claim, and Lundbeck shall furnish to Forest Ireland such reasonable assistance as Forest Ireland needs and from time to time reasonably requests.

                         7.2     Damages. If damages or costs of defense or liability are incurred or awarded against Forest Ireland, Lundbeck shall indemnify Forest Ireland for such damages or costs up to the amount of Purchase Price and Royalties previously paid by Forest Ireland to Lundbeck with respect to Finished Product sold by Forest Ireland in the Territory.

                         7.3     Royalties. If Forest Ireland becomes obligated to pay royalties to any independent third party in order to exploit Finished Product commercially, said royalties shall be creditable against Purchase Price and Royalties otherwise payable to Lundbeck hereunder. If Lundbeck elects not to defend such suit and has not otherwise disposed of such claim, and if Forest Ireland elects to dispose of such claim, any amounts paid or payable to the independent third party by Forest Ireland in disposing of such suit or claim shall at the time of payment be creditable against Purchase Price and Royalties otherwise payable to Lundbeck hereunder.

                 8.     Indemnification.

                         8.1     Lundbeck shall defend, indemnify and hold harmless Forest Ireland and its officers, directors, agents and employees from and against any and all liability, demands, damages, costs, expenses (including attorneys' fees), and losses for death, personal injury, illness or property damage arising (a) out of the manufacture or supply of Compound or Finished Product by or behalf of Lundbeck to Forest Ireland to the extent such manufacture or supply is not in accordance with any representation or warranty of Lundbeck hereunder or (b) as a result of using any or all of the Patents or Technology licensed by Lundbeck to Forest Ireland under the S-Enantiomer License Agreement and related to Compound or Finished Product in connection with the manufacture, sale or distribution of Compound or Finished Product in countries outside of the Territory or (c) the breach by Lundbeck of any representations or warranties of Lundbeck made herein. Such indemnification shall neither apply to liability resulting from the gross negligence or intentional wrongful acts of Forest Ireland; nor from Forest Ireland's failure to observe express warranties made to Lundbeck with respect to Compound or Finished Product.

                         8.2     Forest Ireland shall defend, indemnify and hold harmless Lundbeck and its officers, directors, agents and employees from and against any and all liability, demands, damages, costs, expenses (including attorneys' fees), and losses for death, personal injury, illness or property damage arising out of (a) the manufacture, distribution, use, testing, sale, or other disposition, by Forest Ireland, or any distributor, customer, or representative of Forest Ireland or anyone in privity therewith, of Finished Product in the Territory, except to the extent arising in connection with a matter as to which Lundbeck is required to indemnify Forest Ireland pursuant to Section 8.1 or (b) the breach by Forest Ireland of any representations or warranties of Forest Ireland made herein. S uch indemnification shall neither apply to liability resulting from the gross negligence or intentional wrongful acts of Lundbeck, nor from Lundbeck's failure to observe express warranties made to Forest Ireland with respect to the Compound.

                         8.3     The provisions of Section 8.2 of the S-Enantiomer License Agreement shall apply to the obligations of indemnification set forth in this Section.

                 9.     Term; Termination.

                         9.1     The term of this Agreement (the "Supply Term") shall be for a period equal to the Term of the S-Enantiomer License Agreement, including any Renewal Term.

                         9.2     Following the expiration of the Supply Term, and subject only to the payment obligations of Section 9.4, Forest Ireland shall continue to possess the License in accordance with the terms of the S-Enantiomer License Agreement and shall continue to have an exclusive license to use the Trademark in connection with the marketing of Finished Product in the Territory and Lundbeck shall be obligated to continue supplying Compound and to furnish the technical cooperation contemplated by Section 9.3 of the S-Enantiomer License Agreement as reasonably required, and for as long as reasonably necessary, to permit Forest Ireland to develop or acquire an alternate supply of Compound so as to permit the continued and uninterrupted marketing of the Finished Product in the Territory.

                         9.3     Lundbeck may terminate the Supply Term upon written notice to Forest Ireland providing for a termination date no earlier than three years form the date of such notice. Following any such expiration, the provisions of Section 9.2 shall apply.

                         9.4     Following the expiration or termination of the Supply Term, Forest Ireland shall continue paying Lundbeck the Royalty for as long as Forest Ireland continues to market Finished Product in the Territory.

                         9.5     If force majeure conditions as set forth in Section 11, persist for a time period of more than six (6) months from the date when the notice in which a party has pleaded force majeure was sent, the other party will be entitled to terminate the Supply Term with immediate effect.

                         9.6     Termination of the Supply Term shall not relieve either party of any obligation of payment or performance accrued prior to such termination.

                 10.     Termination For Cause.

                         10.1     This Agreement, together with the S-Enantiomer License Agreement, shall be construed and interpreted as a single agreement. Accordingly, the provisions governing termination of the S-Enantiomer License Agreement (including provisions for arbitration) in the event of a default by a party (the "defaulting party") and the rights and remedies of the parties in respect hereof shall be deemed to apply equally to the terms and conditions hereof, subject only to the provisions of Section 10.2.

                         10.2     In the event this Agreement is terminated pursuant to Section 10.1 and Lundbeck is the defaulting party, Forest Ireland shall be deemed to have a perpetual royalty-free License to the Patents, Technology and Trademark related to the Compound and Finished Product and Lundbeck shall remain obligated to continue to supply Compound and to perform the technology transfer and related cooperation provided by Section 9.2. In the event this Agreement is terminated and Forest Ireland is the defaulting party, the License shall be terminated and Forest Ireland shall remain obligated to deliver all necessary documents and instruments as may reasonably be required to vest in Lundbeck all Forest Ireland Technology, the Trademark and related assets and information related to Compound or F inished Product.

                 11.     Force Majeure.

Neither party shall be liable for non-performance of any provision of this Agreement due to force majeure. Force majeure will have the meaning stated below under Section 11.1:

                         11.1     Strikes, lockouts, other industrial disturbances; rebellions; mutinies; epidemics; landslides, lightning, earthquakes, fires, storms, floods, sinking, drought; civil disturbances; explosions; act or decision of duly constituted municipal, state or National Governmental authorities or of Courts of Law including but not limited to the FDA; impossibility to obtain equipment, supplies, fuel or other required materials; unexpected drug toxicity findings; unexpected serious adverse drug reactions or any other causes similar or completely different, all beyond the control of the party pleading force majeure preventing the party from performing its rights and obligations and not to be overcome by due diligence of such party; provided neither party shall have any obligation t o settle a labor dispute in order to exercise due diligence.

                         11.2     In view of the complexity of the pharmaceutical development and production scale up of Compound, both parties agree to define delays in pharmaceutical development or production scale up caused by unexpected problems of a chemical or technical nature (for example, stability) as events of force majeure within the meaning of Section 11.1

                         11.3     The parties agree that if either of them find themselves wholly or partly unable to fulfill their respective obligations in this Agreement by reasons of force majeure, the party pleading force majeure will as soon as possible notify the other party of its inability to perform giving a detailed explanation of the occurrence which excuses performance. If said notice is given, the performance of the notifying party shall be abated for so long as performance may be prevented by force majeure. Except for the payment of funds that are due and payable prior to any force majeure, neither party shall be required to make up for any performance that is prevented by force majeure. However, if a force majeure situation prevails for more than six (6) months, the Supply Term can be ter minated immediately, and Section 9.2 will apply.

                 12.     Assignability And Sub-Licenses.

                         12.1     Forest Ireland is entitled to sub-license its rights under this Agreement, subject to Lundbeck's consent, which consent shall not be unreasonably withheld. Reasons for a reasonable refusal to furnish consent include, but shall not be limited to, the proposed sublicensee having a material interest in a pharmaceutical product competing directly with the Finished Products, unless there is no resulting Impairment, as such term is defined in Section 11 of the S-Enantiomer License Agreement. Forest Ireland may sublicense its rights to an Affiliate, provided such Affiliate is a wholly owned subsidiary of its corporate parent, without any such consent.

                 13.     Warranties And Representations.

                         13.1     Lundbeck hereby represents and warrants the following:

                                     13.1.1     Lundbeck is free to enter into this Agreement and does not have any agreement with respect to the Patents or Technology applicable to Compound or Finished Product which would conflict with the rights granted hereunder.

                                     13.1.2     All Compound supplied by Lundbeck shall comply with the Specifications, the requirements of the NDA for Finished Product and all applicable laws and regulations applicable to the manufacture, storage and shipment of drug substance. The representations set forth in this Section 13.1.2 shall be deemed restated at the time of each shipment of Compound by Lundbeck to Forest Ireland.

                                     13.1.3     Lundbeck controls the right, title and interest in and to the Patents or Technology applicable to compound or Finished Product and that Lundbeck, subject to the exception set forth in Section 2.1, has and will continue for the term hereof to have the sole right to grant licenses under and disclose Patents and Technology under the License Agreement.

                                     13.1.4     To the best of Lundbeck's knowledge, each Patent applicable to Compound or Finished Product is valid and enforceable and was not fraudulently procured from the relevant governmental patent granting authority.

                                     13.1.5     Lundbeck is not presently aware of any patent owned by an independent third party that would be infringed by the manufacture, use or sale of Finished Product.

                                     13.1.6     There are no actions, suits or claims pending or alleged anywhere in the world with respect to Compound, or Patents or Technology related to the Compound or Finished Product.

                         13.2     Forest Ireland hereby represents and warrants the following:

                                     13.2.1     Forest Ireland is acknowledged by the authorities/FDA in the USA as an approved manufacturer and marketer of drugs and is as such under the inspection of said authorities.

                 14.     Notice.

                         14.1     All notices hereunder shall be in writing and shall be delivered personally or mailed by registered or certified (air) mail, postage prepaid, or delivery service for which receipt is given, to the following addresses of the respective of the respective parties with a copy to the addressee's general counsel:

If to Forest Ireland:	Forest Laboratories (Ireland) Limited Clonshaugh Industrial Estate Clonshaugh, Dublin 17 Republic of Ireland Attention:   Raymond Stafford Facsimile:   353 1 8672226
If to Lundbeck (Legal Department)	H. Lundbeck A/S Ottiliavej 9 DK-2500 Copenhagen-Valby Denmark Attention:   Legal Department Facsimile:   45 36 30 27 32
Such notice shall be effective upon receipt.

                 15.     Entire Agreement And Modifications.

                         15.1     Incorporation of Addendum. The Addendum to Supply Agreement between Forest Inc. and Lundbeck dated August 15, 2000 ("Supply Addendum") shall form an integral part of this S-Enantiomer Supply Agreement and shall be regarded as incorporated into this S-Enantiomer Supply Agreement in every respect as from August 15, 2000; provided that, references in such Supply Addendum to the "Agreement" shall be deemed references to this S-Enantiomer Supply Agreement, references to License Agreement shall be deemed references to the S-Enantiomer License Agreement, and references to "Forest" shall be deemed references to Forest Ireland. All other terms and conditions of this S-Enantiomer Supply Agreement shall remain in force unchanged.

                         15.2     This S-Enantiomer Supply Agreement; the Umbrella Agreement of even date herewith by and among Forest Inc., Forest Ireland, and Lundbeck; and the S-Enantiomer License Agreement by and between Forest Ireland and Lundbeck (collectively, the "Agreements") constitute the entire agreement between Forest Inc. or Forest Ireland and Lundbeck with respect to the subject matter thereof. The Agreements supercede any and all other agreements, written or oral, between Forest Inc. or Forest Ireland and Lundbeck with respect to the subject matter thereof. No variation or modification of the terms of this Agreement nor any waiver of any of the terms or provisions hereof shall be valid unless in writing and signed by an authorized representative of each party or by the party against whom enforcement thereof may be sought. The headings contained in this Agreement are for convenience and reference purposes only and shall not affect the meaning or interpretation of this Agreement.

                         15.3     Wherever this Agreement requires the consent of Lundbeck to any proposed action, such consent shall not be unreasonably withheld or delayed.

                 16.     Severability.

                         16.1     The provisions of this Agreement are separate and divisible, and the invalidity or unenforceability of any part shall not affect the validity or enforceability of any remaining part or parts, all of which shall remain in full force and effect. However, the parties agree to substitute any invalid or unenforceable provision by a valid and enforceable arrangement which achieves to the greatest extent possible the financial balance and mutual understanding already established between the parties.

                 17.     Governing Law.

                         17.1     This Agreement shall be governed by, and construed in accordance with, the laws of England.

                         17.2     The arbitration provisions of the S-Enantiomer License Agreement (Section 13 thereof) shall be deemed to apply to and govern any dispute by the parties pursuant to the terms of this Agreement.

                 18.     Miscellaneous.

                 The provisions of Sections 16.3, 16.6, 16.7, 16.8 and 16.9 of the S-Enantiomer License Agreement are specifically incorporated by reference in this Agreement as if set forth in full herein.

                         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

FOREST LABORATORIES (IRELAND) LIMITED

By:        /s/Raymond Stafford                        Name:   Raymond Stafford                            Title:     Chief Executive

H. LUNDBECK, A/S

By:        /s/Erik Sprunk-Jansen                     Name:   Erik Sprunk-Jansen                         Title:      Chairman and President

EXHIBIT 13

 QUARTERLY STOCK MARKET PRICES

No dividends were paid on common shares in any period.

A. Basic net income per share was computed by dividing net income by the weighted average number of common shares outstanding during each year. Diluted net income per share includes the potential dilution that could occur if dilutive options and warrants outstanding were included in the weighted average number of common shares outstanding for the period.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
Forest Laboratories, Inc.
New York, New York

We have audited the accompanying consolidated balance sheets of Forest Laboratories, Inc. and Subsidiaries as of March 31, 2002 and 2001, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended March 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Forest Laboratories, Inc. and Subsidiaries as of March 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2002 in conformity with accounting principles generally accepted in the United States of America.

BDO SEIDMAN, LLP

New York, New York
April 19, 2002