Exhibit 10.4
CONFIDENTIAL
EXECUTION VERSION

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SETTLEMENT AND LICENSE AGREEMENT
This SETTLEMENT AND LICENSE AGREEMENT (“Agreement”), effective as of the
Effective Date (as defined below), is made by and among Endo Pharmaceuticals
Inc., a Delaware corporation having its principal place of business at 100 Endo
Boulevard, Chadds Ford, PA 19317 (“Endo”), Penwest Pharmaceuticals Co., a
Washington corporation having its principal place of business at 2981 Route 22,
Suite 2, Patterson, NY 12563 (“Penwest”), and Impax Laboratories, Inc., a
Delaware corporation having its principal place of business at 30831 Huntwood
Avenue, Hayward, California 94544 (“Impax”). Endo, Penwest and Impax are
hereinafter collectively referred to as the “Parties”, and each individually as
a “Party”.
RECITALS
     WHEREAS, Endo, Penwest and Impax are parties to patent infringement
litigations in the United States District Court for the District of New Jersey
(as further defined below, the “New Jersey Actions”); and
     WHEREAS, the Parties seek to resolve the New Jersey Actions without further
litigation.
     NOW, THEREFORE, in consideration of the covenants, conditions and
obligations expressed herein, and intending to be legally bound thereby, the
Parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
     Section 1.1. Definitions. The following terms will have the meanings
provided below:
     “Affiliate” means any person, corporation, company, partnership, joint
venture or other entity controlling, controlled by or under common control with
the applicable party. For such purpose, the term “control” means the holding of
fifty percent (50%) or more of the common voting stock or ordinary shares in, or
the right to appoint fifty percent (50%) or more of the directors of, or
otherwise possessing the power to direct or cause the direction of the
management and policies of the said corporation, company, partnership, joint
venture or entity.
     “Agreement” has the meaning specified in the introductory paragraph hereof.
     “ANDA” means an Abbreviated New Drug Application, as defined in 21 U.S.C.
355(j) et seq., and the regulations promulgated thereunder.
     “Commencement Date” means:
     (a) with respect to the 5mg, 10mg, 20mg, 30mg and 40mg dosage strengths of
the Impax Product and any future dosage strengths of the Impax Product under the
Impax

 

--------------------------------------------------------------------------------

 

Settlement and License Agreement
ANDA for which Impax obtains first applicant status as described in
Section 505(j)(5)(B)(iv) of the FD&C Act, the date that is the earliest of:
          (i) January 1, 2013;
          (ii) thirty (30) days after the date of a final federal court decision
that is no longer subject to appeal (other than by a petition for writ of
certiorari) holding all asserted and adjudicated claims of the Opana® ER Patents
to be (A) invalid or unenforceable in any lawsuit or (B) non-infringed in a
lawsuit involving Endo and/or Penwest in response to a filing by a Third Party
under Section 505(j) of the FD&C Act referencing the Opana® ER Product; and
          (iii) the date that the patent information submitted under Section
505(b) of the FD&C Act is withdrawn by Endo and/or Penwest (21 U.S.C. §
355(j)(5)(D)(i)(I)); and
     (b) with respect to the 7.5mg and 15mg dosage strengths of the Impax
Product and any future dosage strengths of the Impax Product under the Impax
ANDA for which Impax does not obtain first applicant status as described in
Section 505(j)(5)(B)(iv) of the FD&C Act, the date that is the earliest of:
          (i) January 1, 2013;
          (ii) the date of a final federal court decision that is no longer
subject to appeal (other than by a petition for writ of certiorari) holding all
asserted and adjudicated claims of the Opana® ER Patents to be (A) invalid or
unenforceable in any lawsuit or (B) non-infringed in a lawsuit involving Endo
and/or Penwest in response to a filing by a Third Party under Section 505(j) of
the FD&C Act referencing the Opana® ER Product; and
          (iii) the date on which a Third Party commences commercial sale of an
FDA approved generic extended release oxymorphone product that is AB rated to
Opana® ER Product, provided that if such commercial sale is made at risk, and
Endo and/or Penwest are successful in causing such commercial sale to halt, then
the Commencement Date will be deemed not to have occurred and Impax will not
launch or continue selling the Impax Product as a result of such commercial
sale.
     “Covenant Not To Sue” has the meaning specified in Section 4.1(b).
     “Dismissal Date” means the date on which the Stipulation of Dismissal and
Order attached hereto as Appendix A is approved and entered as an order of the
court by the court in the New Jersey Actions.
     “DOJ” has the meaning specified in Section 2.1.
     “Effective Date” means June 8, 2010.
     “Endo” has the meaning specified in the introductory paragraph hereof.

Page 2

--------------------------------------------------------------------------------

 

Settlement and License Agreement
     “Endo Credit” means an amount equal to the product obtained by multiplying
(i) the difference between the [**] and the [**] by (ii) the [**]. For the sake
of clarity, if the difference reflected in clause (i) were [**], then clause
(i) would be equal to [**], and not [**].
     “Endo Net Sales” means the gross amounts invoiced by Endo for the sale of
Endo Products by Endo to Third Parties, less deductions customarily deducted by
Endo in the ordinary course in accordance with U.S. generally accepted
accounting principles, consistently applied, throughout the period beginning
July 1, 2010 and ending on the day before the Commencement Date.
     “Endo Product” means the Opana® ER Products for which Impax has obtained
first applicant status, as described in Section 505(j)(5)(B)(iv) of the FD&C
Act.
     “Exclusivity Period” has the meaning specified in Section 4.1(c).
     “Existing Patents” has the meaning specified in Section 4.1(a).
     “FDA” means the United States Food and Drug Administration and any
successor agency or authority thereto.
     “FD&C Act” means the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301
et seq.
     “FDB Data” means data maintained by First DataBank, Incorporated relating
to the sale of pharmaceutical drug products in the Territory.
     “FTC” has the meaning specified in Section 2.1.
     “Impax” has the meaning specified in the introductory paragraph hereof.
     “Impax ANDA” means ANDA No. 79-087, and any amendments or supplements
thereto.
     “Impax Parties” has the meaning specified in Section 4.1(b).
     “Impax Product” means any product that (i) is the subject of the Impax ANDA
as of the Effective Date, or (ii) is the subject of the Impax ANDA and which is
substantially equivalent to those products that are the subject of the Impax
ANDA as of the Effective Date, including any future dosage strengths of the
product that is the subject of the Impax ANDA as of the Effective Date. For
clarity, a product will be considered “substantially equivalent” to those
products that are the subject of the Impax ANDA as of the Effective Date if
regulatory approval of such product by the FDA would not require the performance
of any additional bioequivalence studies (other than bioequivalence studies
required by the FDA for new dosage strengths of or new reference listed drug
descriptions for the product that is the subject of the Impax ANDA as of the
Effective Date or any other changes that do not substantially change the
formulation of the products subject to the Impax ANDA), and if its formulation
is substantially the same

Page 3

--------------------------------------------------------------------------------

 

Settlement and License Agreement
formulation as the products that are the subject of the Impax ANDA as of the
Effective Date.
     “IMS Data” means data maintained by IMS Health Incorporated relating to the
sale of pharmaceutical drug products in the Territory.
     “License” has the meaning specified in Section 4.1(a).
     “License Term” has the meaning specified in Section 4.2(a).
     “Licensed Patents” has the meaning specified in Section 4.1(a).
     “Market Share Profit Factor” means the factor obtained by multiplying [**]
(generic substitution rate) by [**].
     “Market Share Profit Value” means the factor obtained by multiplying: [**].

          [**]   [**]   [**]         [**]

     “NDA” means a New Drug Application, as defined in 21 U.S.C. 355(b) et seq.,
and the regulations promulgated thereunder.
     “Net Sales” means the gross amount invoiced by or on behalf of Impax for
the sale of Impax Products to Third Parties, less deductions for: (i) normal and
customary trade, cash and quantity discounts actually given, credits, price
adjustments or allowances for damaged Impax Products, returns or rejections of
Impax Products, free goods valued at transfer price provided in lieu of
discounts or rebates; (ii) chargeback payments and rebates (or the equivalent
thereof) granted to group purchasing organizations, managed health care
organizations or to federal, state/provincial, local and other governments,
including their agencies, or to trade customers and other price reduction
programs customary to the trade or required by law; (iii) freight, shipping
insurance and other transportation expenses directly related to the sale (if
actually borne by Impax without reimbursement from any Third Party);
(iv) required sales and distribution commissions/fees payable to any Third Party
providing sales or distribution services to Impax; (v) sales, value-added and
excise taxes, tariffs and duties, surcharges and other taxes and government
charges directly related to the sale, to the extent such items are included in
the gross invoice price and actually borne by Impax without reimbursement from
any Third Party (but not including taxes assessed against the income derived
from such sale); (vi) administrative fees, marketing fees and other similar
fees, payments or credits paid to unaffiliated Third Parties customary to the
trade or required by law to the extent such fees, payments and credits are
customarily deducted from gross sales, and (vii) commercially reasonable
write-offs for doubtful accounts for Impax Product sold by or on behalf of
Impax. Net Sales shall be determined in all cases in accordance with U.S.
generally accepted accounting principles.

Page 4

--------------------------------------------------------------------------------

 

Settlement and License Agreement
     “New Jersey Actions” means Endo Pharmaceuticals Inc. and Penwest
Pharmaceuticals Co. v. Impax, Civil Action Nos. 09-831, 09-832 and 09-833
(KSH-PS).
     “Opana® ER Generic Product” means any generic version of an Opana® ER
Product that is the subject of an application filed under Section 505(b)(2) or
Section 505(j) of the FD&C Act.
     “Opana® ER Patents” means U.S. Patents 5,662,933, 5,958,456 and 7,276,250,
and any U.S. patents resulting from any reissue or reexamination thereof.
     “Opana® ER Product” means any product marketed and/or sold under the Opana®
NDA.
     “Opana® NDA” means NDA No. 21-610 and any amendments or supplements
thereto.
     “Orange Book” means the FDA publication Approved Drug Products with
Therapeutic Equivalence Evaluations.
     “Paragraph IV Certification” means a paragraph IV certification under
Section 505(j)(2)(A)(vii)(IV) of the FD&C Act (21 U.S.C. §
355(j)(2)(A)(vii)(IV)).
     “Party” and “Parties” have the meanings specified in the introductory
paragraph hereof.
     “Pending Applications” has the meaning specified in Section 4.1(a).
     “Penwest” has the meaning specified in the introductory paragraph hereof.
     “Person” means any person, corporation, partnership, joint venture,
association, joint-stock company, trust or unincorporated organization.
     “Pre-Impax Amount” means, expressed as a percentage, [**] or (ii) if the
Commencement Date is earlier than January 1, 2013 pursuant to the terms hereof,
the [**], divided by the [**].
     “Prescription Sales” means for any month, the sum of, for each strength of
the Endo Product, (i) [**] Data multiplied by (ii) [**].
     “Quarterly Peak” means the highest Prescription Sales of the Endo Product
during any calendar quarter period from July 1, 2010 through September 30, 2012,
or the last day of the full calendar quarter described in clause (ii) of the
defined term Pre-Impax Amount.
     “Territory” means the United States of America, its territories, districts,
possessions and commonwealths, including the Commonwealth of Puerto Rico.

Page 5

--------------------------------------------------------------------------------

 

Settlement and License Agreement
     “Third Party” means any Person other than Impax, Endo, Penwest and their
respective Affiliates.
     “Trigger Threshold” means [**] percent ([**]%).
ARTICLE II.
SUBMISSION TO U.S. GOVERNMENT
     Section 2.1. Submission To U.S. Government. The Parties will submit this
Agreement and any ancillary and other related agreements thereto to the
Antitrust Division of the United States Department of Justice (“DOJ”) and the
Federal Trade Commission (“FTC”) for review as promptly as practical after the
Effective Date, and in any event within the period prescribed by the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 and other
applicable law. Each of the Parties will use its respective reasonable best
efforts to fully cooperate with any investigation that may ensue as a result of
such submission. If any government investigation or litigation is instituted,
each Party will use its respective reasonable efforts to defend this Agreement
and any ancillary and other related agreements thereto in any such investigation
or litigation, and to resist and contest any proposals or efforts to materially
alter the terms thereof so as to permit the Parties to fulfill their obligations
under and to obtain the full benefits contemplated by this Agreement and any
ancillary and other related agreements thereto, including using their reasonable
efforts to promptly meet in good faith to renegotiate and modify this Agreement,
provided that such modifications do not materially change the economic value of
the transactions contemplated hereby. Each Party reserves the right to
communicate with the FTC or DOJ regarding such filings as it believes
appropriate. Each Party shall keep the other Parties reasonably informed of such
communications and shall not disclose any confidential information of the other
Parties without such other Parties’ consent, which will not be unreasonably
withheld or delayed.
     Section 2.2. No Prejudice. If at any time this Agreement or any ancillary
or other related agreements thereto is rendered null and void with respect to
the Territory or any portion thereof by the actions of a Third Party or
government entity, it is the intent of the Parties that (i) no Party will be in
any way prejudiced with respect to its claims, causes of action, defenses and
counterclaims in the New Jersey Actions in such jurisdiction or otherwise,
(ii) no consent judgment, order or dismissal entered by a Party pursuant to this
Agreement in the Territory or portion thereof, as applicable, will be deemed an
admission on the part of such Party, (iii) the Parties will be free to assert
any and all claims and defenses with respect to the reinstated portion of the
New Jersey Actions in any future litigation, and (iv) the provisions of Section
8.3 shall apply.
ARTICLE III.
SETTLEMENT; DISMISSAL OF ACTION
     Section 3.1. Required Filings. No later than three (3) days after the
Effective Date, Impax, Endo and Penwest will execute and deliver to the other
Parties, or cause their respective attorneys of record in the New Jersey Actions
to execute and deliver to

Page 6

--------------------------------------------------------------------------------

 

Settlement and License Agreement
the other Parties, the Stipulation of Dismissal and Order attached hereto as
Appendix A, pursuant to which the New Jersey Actions will be dismissed with
prejudice and without costs, and the attorneys for Endo and Penwest shall submit
such executed Stipulation of Dismissal and Order to the court in the New Jersey
Actions. If for any reason the court in the New Jersey Actions does not approve
the Stipulation of Dismissal and Order and enter it as an order of the court,
the Parties agree to confer promptly in good faith in an effort to modify the
Stipulation of Dismissal and Order and this Agreement or take such other action
as is required to overcome the court’s objections.
     Section 3.2. Impax Sale Commencement Date. Subject to this Section 3.2,
Impax agrees, on behalf of itself and its Affiliates, not to, prior to the
applicable Commencement Date, directly or indirectly market, offer to sell,
sell, import, manufacture or have manufactured in or for the Territory any
Opana® ER Generic Product, or directly or indirectly assist or authorize any
Third Party to do any of the foregoing. Impax shall have the right to make
commercially reasonable preparations prior to the Commencement Date as set forth
below. Nothing in this Agreement shall preclude Impax or its Affiliates from
manufacturing, having manufactured, importing or marketing the Impax Products in
or for the Territory for a reasonable period of time, as set forth below, prior
to the applicable Commencement Date solely for the purpose of allowing Impax and
its Affiliates to prepare for the commercial sale of such Impax Products for
delivery in the Territory for sale only on and after the Commencement Date
pursuant to Section 4.1 or for purposes of conducting activities protected under
35 U.S.C. § 271(e)(1). A reasonable period of time for purposes of the foregoing
sentence shall be no more than [**] days prior to the anticipated applicable
Commencement Date for the marketing of and offers to sell the Impax Products and
a commercially reasonable period of time prior to the anticipated applicable
Commencement Date for the manufacturing and importing of the Impax Products.
Impax will provide notice to Endo and Penwest as soon as practicable, and in any
event prior to launch of the Impax Product, if it believes that the Commencement
Date will be earlier than January 1, 2013. Impax acknowledges and agrees that
Endo and Penwest would be irreparably harmed should Impax breach the first
sentence of this Section 3.2. Nothing in the Agreement shall prohibit or
preclude Impax from exercising its rights under 35 U.S.C. § 271(e)(1).
     Section 3.3. No Challenge to Opana® ER Patents. From and after the
Effective Date, Impax agrees, on behalf of itself and its Affiliates, not to,
directly or indirectly, challenge the validity or enforceability of the Licensed
Patents with respect to any product that is the subject of the Impax ANDA or the
infringement of the Licensed Patents by the manufacture, use and sale of any
product that is the subject of the Impax ANDA, including by suing, directly or
indirectly, Endo, Penwest or any of their respective Affiliates in any action in
any forum seeking an order or decision that any of the Licensed Patents is
invalid or unenforceable with respect to any product that is the subject of the
Impax ANDA or that the manufacture, use or sale of any product that is the
subject of the Impax ANDA does not infringe the Licensed Patents. Further, Impax
will not, and will cause its Affiliates to not, directly or indirectly,
participate in or support any such challenges relating to any Opana® ER Generic
Product by any Person. Notwithstanding the foregoing, nothing herein shall
prevent Impax from (a) maintaining the Paragraph IV Certifications contained in
the Impax ANDA, (b) amending the Impax

Page 7

--------------------------------------------------------------------------------

 

Settlement and License Agreement
ANDA, such as to include future Opana® ER Product dosages, or a Paragraph IV
Certification to any patents that may be listed in the Orange Book for the
Opana® ER Product, or (c) challenging the Licensed Patents with respect to any
product that is not the subject of the Impax ANDA.
     Section 3.4. Costs; Dismissals. All dismissals of all claims and
counterclaims specified in Section 3.1 will be without costs to any Party and
will include an irrevocable release by each Party, on behalf of itself and its
Affiliates, of all claims for attorneys’ fees. Each Party will bear its own
costs in connection with entering into this Agreement and the negotiation and
submission of the dismissals specified in Section 3.1.
     Section 3.5. No Implied Consents. Nothing herein will be deemed to be
Endo’s or Penwest’s consent to or approval of any ANDA or similar application or
filing by Impax or any of its Affiliates in any foreign jurisdiction, or to
permit Impax or any of its Affiliates the right to reference or cross-reference
any Endo NDA, Penwest NDA or similar application or filing.
     Section 3.6. Releases. (a) Except for the obligations created under this
Agreement, and unless this Agreement is terminated pursuant to Section 8.2,
Impax, on behalf of itself and its Affiliates, predecessors, successors and
assigns, and all other Persons claiming by, through and under them, does hereby
fully, finally release and forever discharge, relinquish and acquit, effective
on the Dismissal Date, Endo and Penwest and their respective past and present
Affiliates and their respective, predecessors, successors, assigns and their
respective past and present Affiliates, shareholders, predecessors, successors,
assigns, employees, officers, directors, principals, agents, attorneys,
accountants, representatives, insurers, manufacturers, suppliers, importers,
distributors and customers from any and all claims, rights, causes of action,
counterclaims, defenses and liabilities whatsoever that, in each case accrued
prior to the Effective Date, whether based on federal, state, local, statutory
or common law or any other law, rule or regulation, whether known or unknown,
(i) that in any way arise out of, or are related to, any cause of action
asserted in the New Jersey Actions; (ii) that relate to the Impax Products and
could have been asserted in the New Jersey Actions now or upon the approval of
the Impax Products; or (iii) that in any way arise out of, or are related to,
the marketing or sale of Opana® ER Products, or the acquisition, listing in the
FDA’s Orange Book or enforcement of the Opana® ER Patents, including without
limitation any antitrust or unfair competition claims. Nothing in this release
shall preclude Impax from asserting the invalidity, unenforceability or
non-infringement of the Opana® ER Patents, any continuations,
continuations-in-part, or divisionals thereof, and any patents and patent
applications owned or controlled by, or licensed to, Endo or Penwest (or their
respective Affiliates) in any future litigation concerning any product that is
not the subject of the Impax ANDA.
          (b) Except for the obligations created under this Agreement, and
unless this Agreement is terminated pursuant to Section 8.2, Endo and Penwest,
on behalf of themselves and their respective Affiliates, predecessors,
successors and assigns, and all other Persons claiming by, through and under
them, do hereby fully, finally release and forever discharge, relinquish and
acquit effective on the Dismissal Date, Impax and its

Page 8

--------------------------------------------------------------------------------

 

Settlement and License Agreement
predecessors, successors, assigns and their respective past and present
Affiliates, shareholders, predecessors, successors, assigns, employees,
officers, directors, principals, agents, attorneys, accountants,
representatives, insurers, manufacturers, suppliers, importers, distributors and
customers from any and all claims, rights, causes of action, counterclaims,
defenses and liabilities whatsoever that, in each case accrued prior the
Effective Date, whether based on federal, state, local, statutory or common law
or any other law, rule or regulation, whether known or unknown, (i) that in any
way arise out of, or are related to, any cause of action asserted in the New
Jersey Actions; (ii) that relate to the Impax Products and could have been
asserted in the New Jersey Actions now or upon the approval of the Impax
Products, including without limitation any antitrust or unfair competition
claims relating thereto; or (iii) that relate to any activities in respect of
the products that are the subject of the Impax ANDA that were engaged in by
Impax or its Affiliates prior to the Effective Date and that would have given
rise to a claim of infringement of the Licensed Patents. Nothing in this release
shall preclude Endo or Penwest from asserting the Opana® ER Patents, any
continuations, continuations-in-part, or divisionals thereof, and any patents
and patent applications owned or controlled by, or licensed to, Endo or Penwest
(or their respective Affiliates) in any future litigation concerning any product
that is not the subject of the Impax ANDA.
ARTICLE IV.
LICENSE AND COVENANT NOT TO SUE
     Section 4.1. License; Covenant Not To Sue. (a) Subject to the terms and
conditions herein, each of Endo and Penwest, on behalf of itself and its
respective Affiliates, hereby grants to Impax and its Affiliates, effective only
on and after the applicable Commencement Date (subject to Impax’s permitted
pre-Commencement Date activities set forth in Section 3.2), and Impax hereby
accepts (on behalf of itself and its Affiliates), a non-transferable (except in
accordance with Section 9.6), non-sublicensable and royalty-free (except as set
forth in Section 4.3) license (the “License”), under the Opana® ER Patents, any
continuations, continuations in part, or divisionals thereof, and any patents
and patent applications owned by Endo or Penwest (or their respective
Affiliates) to the extent that Endo and/or Penwest has the right to grant a
sublicense to such patents and applications that cover or could potentially
cover the manufacture, use, sale, offer for sale, importation, marketing or
distribution of products (or any components thereof) that are the subject of the
Impax ANDA (the issued patents being the “Existing Patents” and the patent
applications (and any patents issued thereunder) being the “Pending
Applications” and the Existing Patents and Pending Applications being
collectively the “Licensed Patents”), during the License Term, to make, have
made, offer to sell, sell, have sold, market, distribute, import and use the
Impax Products solely in or for the Territory.
          (b) Each of Endo and Penwest, on behalf of itself and its Affiliates
and its officers and directors, covenants that it will not sue or assert any
claim against, or otherwise participate in any action or proceeding against
Impax or its Affiliates or their successors and permitted assigns or any of
Impax’s suppliers, distributors, wholesalers or customers (collectively, the
“Impax Parties”), or cause or authorize any person or entity to do any of the
foregoing, in each case claiming or otherwise asserting that the

Page 9

--------------------------------------------------------------------------------

 

Settlement and License Agreement
manufacture, use, sale, offer for sale, importation, marketing or distribution
of Impax Products in or for the Territory on or after the applicable
Commencement Date (subject to Impax’s or its Affiliates’ permitted
pre-Commencement Date activities set forth in Section 3.2 and except for any
activities in respect of the products that are the subject of the Impax ANDA
that were engaged in by Impax or its Affiliates prior to the Effective Date and
that would have given rise to a claim of infringement of the Licensed Patents)
by or on behalf of Impax, infringes the Licensed Patents or any patents or
patent applications licensed to Endo or Penwest (or their respective Affiliates)
that cover or could potentially cover the manufacture, use, sale, offer for
sale, importation, marketing or distribution of products (or any components
thereof) that are the subject of the Impax ANDA, so long as Impax is in
compliance with the terms of this Agreement (the “Covenant Not to Sue”).
          (c) The License granted in this Agreement to Impax is non-exclusive,
except as provided in this Section 4.1(c). Endo and Penwest agree that, for the
Exclusivity Period (as defined below), the License granted to Impax covering the
5mg, 10mg, 20mg, 30mg and 40mg dosage strengths of the Impax Product, and any
future dosage strengths of the Impax Product under the Impax ANDA for which
Impax obtains first applicant status as described in Section 505(j)(5)(B)(iv) of
the FD&C Act, shall be exclusive as to all but (i) the Opana ER® Product and any
Opana ER®-branded products that are not sold as generic products and
(ii) generic products covered by agreements executed by Endo and/or Penwest and
a Third Party that holds an ANDA referencing the Opana® ER Product as of or
prior to the Effective Date. The “Exclusivity Period” for each such dosage
strength of the Impax Product is defined as starting on the Commencement Date
and ending on the earlier of (x) 12:01 A.M. EST on the day after the 180-day
period described in 21 U.S.C. § 355(j)(5)(B)(iv) for such dosage strength; and
(y) 12:01 A.M. EST on the day after the FDA determines that the 180-day period
described in 21 U.S.C. § 355(j)(5)(B)(iv) for such dosage strength has been
forfeited by the occurrence of any event, including those described in 21 U.S.C.
§ 355(j)(5)(D)(i)(I)-(IV). Prior to the expiration of the Exclusivity Period,
neither Endo nor Penwest nor any of their respective Affiliates shall (A) sell,
offer to sell, import, or distribute any generic version of products that are
the subject of the Opana® NDA, (B) license or authorize any Third Party to sell,
offer to sell, import or distribute any generic version of products that are the
subject of the Opana® NDA, and/or (C) sell or license or authorize under the
Opana® ER Patents any Third Party to sell an Opana® ER Generic Product in or for
the Territory, except as provided for herein. Notwithstanding the foregoing,
nothing in this Agreement shall prohibit Endo or Penwest from entering into bona
fide settlements with Third Parties relating to ANDAs filed by such Third
Parties in relation to the Opana® ER Product, which settlements may include
licenses and covenants not to sue under the Opana® ER Patents; provided,
however, that such settlement or any other agreement entered into by Endo or
Penwest with any such Third Party shall not grant any right or license
authorizing such Third Party to make, have made, use, sell, offer to sell,
import or distribute products that are the subject of the Opana® NDA. Following
the expiration of the Exclusivity Period with respect to the dosage strengths
referenced above, and at all times with respect to the 7.5mg and 15mg dosage
strengths of the Impax Product and any other dosage strengths of the Impax
Product under the Impax ANDA for which Impax

Page 10

--------------------------------------------------------------------------------

 

Settlement and License Agreement
does not obtain first applicant status as described in Section 505(j)(5)(B)(iv)
of the FD&C Act, the License granted to Impax shall be non-exclusive.
          (d) Impax, Endo and Penwest each agrees to negotiate in good faith an
amendment to the terms of the License to any patents which issue from any
Pending Applications for the time period following the Exclusivity Period.
          (e) For avoidance of doubt, and notwithstanding anything to the
contrary in this Agreement, the License and Covenant Not To Sue do not grant to
Impax any rights or immunities, or impose on Impax any restrictions, with
respect to any products other than the Impax Products, including any combination
products.
          (f) In the event that the Commencement Date has occurred and the
License has become effective due to an at-risk launch by a Third Party of an
FDA-approved generic extended release oxymorphone product that is AB-rated to
Opana® ER, and Endo and Penwest are successful in stopping such Third Party that
engaged in such at-risk launch from selling such generic extended release
oxymorphone product in the Territory, Endo and Penwest may, at their discretion,
suspend the Commencement Date upon written notice to Impax, in which case Impax
immediately shall, subject to Section 3.2, cease making, using, shipping,
distributing, selling and/or offering to sell the Impax Products until such time
as the License becomes effective again due to the triggering of the Commencement
Date, provided that any activities conducted by Impax or any of its Affiliates
prior to such suspension shall remain subject to the License and Covenant Not to
Sue.
          (g) Impax will have no right or immunity under the License or the
Covenant Not To Sue to, market, offer to sell or sell the Impax Products to any
Person outside of the Territory or to any Person that Impax knows, or should
reasonably be expected to know, may, directly or indirectly, market, offer to
sell, sell or use any of the Impax Products outside of the Territory.
Notwithstanding the foregoing, nothing herein shall be construed as an admission
or waiver as to any factual or legal matter by any Party or their Affiliates
with respect to any products other than Impax Products, or to any jurisdiction
outside of the Territory (including without limitation, with respect to any
ex-U.S. equivalents of any generic oxymorphone products or any ex-U.S. patents
or patent applications.)
     Section 4.2. License Term. The term of the License (“License Term”) will
commence on the applicable Commencement Date for each Impax Product and will
continue, unless earlier suspended or terminated pursuant to this Agreement,
until the expiration of all claims of the Licensed Patents.
     Section 4.3. Royalties. Impax agrees to pay to Endo a royalty on all Net
Sales of Impax Products (for which dosage strengths Impax has obtained first
applicant status, as described in Section 505(j)(5)(B)(iv) of the FD&C Act) sold
by or on behalf of Impax during the Exclusivity Period. Such royalties shall be
calculated as follows: if Endo Net Sales of Endo Products for the [**], then
Impax shall pay to Endo a royalty of [**] percent ([**]%) on Net Sales of Impax
Products (for which dosage strengths Impax has

Page 11

--------------------------------------------------------------------------------

 

Settlement and License Agreement
obtained first applicant status, as described in Section 505(j)(5)(B)(iv) of the
FD&C Act) during the Exclusivity Period. Otherwise, no royalty shall be due.
Such royalty shall be paid by Impax to Endo within ninety (90) days after the
end of the Exclusivity Period by wire transfer to an account specified by Endo
in writing to Impax, and shall be accompanied by a written report specifying in
reasonable detail the amount of such Net Sales during the Exclusivity Period and
the royalty payable therefor.
     Section 4.4. Endo Credit. If the [**] is less than the [**], then [**]
shall pay to [**] shall pay [**] the amount under this Section 4.4, if any,
within ninety (90) days after [**] with written documentation of all of the
amounts referenced in this Section 4.4.
     Section 4.5. Steering Committee. Promptly after the Effective Date, the
Parties will form a committee (the “Steering Committee”), equally represented by
Endo and Impax, to meet within forty-five (45) days after the end of each
quarter, beginning with the quarter ending June 30, 2010, to determine in good
faith [**], if any. In making such determination, the Steering Committee shall
rely on [**], or such other market data as may be determined by the Steering
Committee, and shall agree on the methodology for calculating [**].
     Section 4.6. Opana® ER Patents. As among the Parties, Endo and/or Penwest
will have the sole right, but not the obligation, to prosecute, maintain,
enforce and defend the Opana® ER Patents in its sole discretion. Impax will have
no right to prosecute, maintain, enforce or defend the Opana® ER Patents.
     Section 4.7. No Implied Rights. Except as expressly provided in
Section 4.1, Endo and Penwest do not grant to Impax or any of its Affiliates or
any other Person any license, right or immunity, whether by implication,
estoppel or otherwise, other than as expressly granted herein. Impax will not
use the name, insignia or symbols of Endo, Penwest or any of their respective
Affiliates for any purpose whatsoever without Endo’s or Penwest’s, as the case
may be, prior written consent. No rights are granted under this Agreement by
Endo or Penwest to Impax to the use of any of Endo’s, Penwest’s or their
respective Affiliates’ trademarks, or any other trademark confusingly similar
thereto, and all rights to those trademarks are expressly reserved by Endo and
Penwest, as the case may be. Nothing herein will be deemed to require Endo or
Penwest to provide any know-how or other Confidential Information to Impax.
     Section 4.8. Governmental Approvals. Endo and Penwest make no
representation that, as of the Commencement Date, Impax will be able to launch
any Impax Products. Impax agrees that, notwithstanding anything to the contrary
herein, it will not sell any Impax Products prior to obtaining FDA approval to
sell the Impax Products. Impax will be solely responsible for, and will bear all
costs involved in, the registration and approval of the Impax Products with any
governmental regulatory agencies.

Page 12

--------------------------------------------------------------------------------

 

Settlement and License Agreement
     Section 4.9. Transfers. To the extent Endo, Penwest or any of their
respective Affiliates assign, license, sublicense or otherwise transfer any
right, title or interest in or to the Opana® NDA or the Opana® ER Patents, or
any other patents or patent applications or regulatory exclusivities subject to
same, to any Third Party, Endo and Penwest, on behalf of themselves and their
respective Affiliates, will make such assignment, license, sublicense or other
transfer subject to any restrictions or limitations under the License, waivers
and Covenant Not To Sue granted herein.
     Section 4.10. FDA Cooperation. (a) Within five (5) business days of Impax’s
request, Endo shall provide the FDA with written confirmation of the
Commencement Date and the license, covenants and waivers herein, including,
where applicable, written confirmation that the Commencement Date is before
January 1, 2013, and including, where applicable, written confirmation that the
restriction specified in the Stipulation of Dismissal and Order does not bar
entry by Impax on a date prior to January 1, 2013. Concurrently with such
request, Impax shall provide to Endo the desired form of written confirmation to
be provided to the FDA.
          (b) Endo and/or Penwest shall waive any period of regulatory
exclusivity to the extent such exclusivity would preclude or impede the launch
of the Impax Product as of the Commencement Date. Endo and/or Penwest shall
provide reasonable cooperation to Impax in connection with such waiver,
including by (i) submitting a mutually agreeable notice to FDA of the existence
of such waiver and (ii) not opposing the approval of Impax Product effective as
of the Commencement Date based on any applicable regulatory exclusivity in force
at the time. Such notice will be delivered by Endo to FDA within five
(5) business days of receipt of written request from Impax, provided that the
form of such notice has been agreed to as set forth above, such agreement not to
be unreasonably withheld, delayed or conditioned. For purposes of clarity,
nothing in this Section 4.10(b) is intended to or does accelerate the
Commencement Date.
     Section 4.11. NDC. Endo shall at all times during the term of this
Agreement maintain (or otherwise not change the status of) the National Drug
Code(s) in respect of the Opana® ER Product until the end of the Exclusivity
Period, unless otherwise directed by the FDA.
ARTICLE V.
CONFIDENTIALITY
     Section 5.1. Publicity. No Party or any of its Affiliates or
representatives may make any press release or public announcement concerning the
existence or terms of this Agreement without the other Parties’ prior written
consent, except for subsequent disclosure of information which is substantially
similar to publicly available information that has previously been disclosed as
permitted by this Section 5.1 or by Section 5.2. The terms of this Agreement,
and all confidential information exchanged by the Parties during the course of
the negotiations of the transactions contemplated hereby (“Confidential
Information”), will remain strictly confidential, and neither the contents of
this Agreement, the subject matter hereof or the Confidential Information will
be, directly or

Page 13

--------------------------------------------------------------------------------

 

Settlement and License Agreement
indirectly, discussed with or disclosed to any Third Party, other than those
employees, officers, directors and advisors of each Party who need to know such
information for the sole purpose of effecting the intent of this Agreement and
who agree to keep such information confidential and who agree to be bound by the
terms of this Article V to the same extent as if they were parties hereto,
provided that this Agreement may be disclosed to governmental authorities as
contemplated by Section 2.1, and this Agreement and the Confidential Information
may be disclosed as permitted by Section 5.2 and in connection with pending
litigation over the Opana® ER Product and/or Opana® ER Patents. If a Party is
contacted by any media outlets or press regarding the New Jersey Action, such
Party may confirm that the New Jersey Actions have been settled without
disclosing any terms of this Agreement or the terms of this settlement except to
the extent permitted under this Section 5.1.
     Section 5.2. Required Disclosure. If a Party concludes in good faith that
it is required by applicable law, FDA rule or requirement, rules or regulations
promulgated by the U.S. Securities and Exchange Commission or any other
governmental authority, regulatory agency or self-regulatory body, or legal
proceeding or order by a court of competent jurisdiction to disclose the terms
of this Agreement, the Party required to make such disclosure will (a) endeavor
to obtain confidential treatment of the terms of this Agreement; and (b) include
in such disclosure only the information that, after consultation with counsel,
such Party believes is required to be disclosed.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
     Section 6.1. Representations as to Endo and Penwest. Each of Endo and
Penwest hereby represents and warrants to Impax as of the Effective Date as
follows:
          (a) it has the corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, and the execution,
delivery and performance of this Agreement has been duly and validly authorized
by it. Upon execution and delivery of this Agreement by it, this Agreement will
constitute a legal, valid and binding agreement, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforceability of creditors’ rights generally
and other general equitable principles which may limit the right to obtain
certain remedies;
          (b) neither the execution and delivery of this Agreement, nor
consummation of the transactions contemplated herein requires it to obtain any
permits, authorizations or consents from any governmental body or from any other
person, firm or corporation other than such permits, authorizations or consents
as it has already obtained;
          (c) it has the right to grant to Impax the License and the Covenant
Not To Sue;

Page 14

--------------------------------------------------------------------------------

 

Settlement and License Agreement
          (d) it has not assigned or otherwise transferred to any Person any of
its claims, rights, causes of action, counterclaims or defenses that are covered
by the release granted under Section 3.6(b); and
          (e) it has not licensed or authorized any Third Party or Affiliate to
sell, offer to sell, import or distribute any generic version of products that
are the subject of the Opana® NDA.
     Section 6.2. Representations as to Impax. Impax represents and warrants to
Endo and Penwest as of the Effective Date as follows:
          (a) Impax has the corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, and the execution,
delivery and performance of this Agreement has been duly and validly authorized
by Impax. Upon execution and delivery of this Agreement by Impax, this Agreement
will constitute a legal, valid and binding agreement of Impax, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforceability of creditors’
rights generally and other general equitable principles which may limit the
right to obtain certain remedies;
          (b) neither the execution and delivery of this Agreement nor
consummation of the transactions contemplated herein requires Impax to obtain
any permits, authorizations or consents from any governmental body or from any
other person, firm or corporation;
          (c) to its knowledge, Impax has produced to Endo and Penwest in the
New Jersey Actions a full and complete copy of the Impax ANDA, including all
amendments and supplements thereto, as of the Effective Date; and
          (d) Impax has not assigned or otherwise transferred to any Person any
of its claims, rights, causes of action, counterclaims or defenses that are
covered by the release granted under Section 3.6(a).
     Section 6.3. Disclaimer. ENDO AND PENWEST ARE LICENSING THE LICENSED
PATENTS TO IMPAX ON AN “AS IS” BASIS. ENDO AND PENWEST MAKE NO WARRANTIES EITHER
EXPRESS OR IMPLIED OF ANY KIND, AND HEREBY EXPRESSLY DISCLAIM ANY WARRANTIES,
REPRESENTATIONS OR GUARANTEES OF ANY KIND AS TO THE LICENSED PATENTS AND THE
SUBJECT OF ANY LICENSE OR COVENANT NOT TO SUE HEREUNDER, INCLUDING BUT NOT
LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, FITNESS, ADEQUACY OR SUITABILITY
FOR A PARTICULAR PURPOSE, USE OR RESULT, AND ANY WARRANTIES OF FREEDOM OF
INFRINGEMENT OF ANY PATENTS, COPYRIGHTS, TRADE SECRETS OR OTHER PROPRIETARY
RIGHTS. NEITHER ENDO, PENWEST, NOR ANY EMPLOYEE OR AGENT OF EITHER OF THEM,
SHALL HAVE ANY LIABILITY TO IMPAX, OR ITS AFFILIATES, OR ANY OTHER PERSON
ARISING OUT OF THE USE OF THE LICENSED PATENTS, INCLUDING TO THE LACK OF
MERCHANTABILITY, INADEQUACY OR UNSUITABILITY OF THE LICENSED

Page 15

--------------------------------------------------------------------------------

 

Settlement and License Agreement
PATENTS FOR ANY PARTICULAR PURPOSE OR TO PRODUCE ANY PARTICULAR RESULT, OR FOR
ANY LATENT DEFECTS THEREIN. ENDO AND PENWEST AND THEIR AFFILIATES, EMPLOYEES,
AGENTS, OFFICERS AND DIRECTORS SHALL NOT BE LIABLE IN ANY WAY WHATSOEVER FOR ANY
INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES SUFFERED BY IMPAX OR ANY
THIRD PARTY IN CONNECTION WITH THIS AGREEMENT, INCLUDING LOST PROFITS OR
BUSINESS REVENUE OR OTHER ECONOMIC LOSS OF ANY KIND WHATSOEVER, WHETHER OR NOT
SUCH DAMAGES ARE FORESEEABLE OR ENDO, PENWEST OR THEIR AFFILIATES, EMPLOYEES,
AGENTS, OFFICERS OR DIRECTORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
ARTICLE VII.
INDEMNITY
     Indemnification. Impax will indemnify and defend Endo, Penwest and their
respective Affiliates and the directors, officers and employees of Endo, Penwest
and any such Affiliates, and hold each of them harmless from and against any and
all claims, suits, losses, liabilities, damages and expenses (including
reasonable attorneys’ fees and costs and the costs of enforcing this indemnity)
incurred by any of them arising from or occurring as a result of any claims,
demands, actions and other proceedings of a Third Party, whether for any actual
or alleged product defect, product liability or other related claims, relating
to any Impax Product. Any indemnitee that intends to claim indemnification under
this Article VII promptly will notify Impax in writing of each claim in respect
of which the indemnitee or any of its Affiliates, or their directors, officers
or employees intend to claim such indemnification, provided that the failure to
provide such notice shall not release Impax from its obligations under this
Article VII except to the extent that Impax is actually and materially
prejudiced thereby. The indemnitee under this Section and its Affiliates,
officers, directors, employees and agents will reasonably cooperate with Impax
and its legal representatives, at Impax’s expense, in the investigation and
defense of any claim or loss covered by this indemnification.
ARTICLE VIII.
TERMINATION
     Section 8.1. Term. The term of this Agreement will commence on the
Effective Date and, unless terminated in accordance with this Agreement, will
continue through the License Term.
     Section 8.2. Termination. Endo and Penwest each may terminate this
Agreement upon written notice effective immediately if (i) Impax or any of its
Affiliates breaches the first sentence of Section 3.2, (ii) Impax or any of its
Affiliates challenges the validity or enforceability of the Licensed Patents
with respect to any product that is the subject of the Impax ANDA, or the
infringement of the Licensed Patents by any product that is the subject of the
Impax ANDA, or if Impax or any of its Affiliates participates in or supports,
directly or indirectly, any such challenges with respect to any Opana® ER
Generic Product by any Third Party, except Impax shall be permitted to maintain
the

Page 16

--------------------------------------------------------------------------------

 

Settlement and License Agreement
Paragraph IV Certifications contained in the Impax ANDA, or (iii) Impax or any
of its Affiliates makes, has made, uses, offers for sale, sells or imports in
the Territory, directly or indirectly, any Opana® ER Generic Product or assists
or authorizes any Third Party to do any of the foregoing prior to the
Commencement Date, subject to Impax’ allowed pre-Commencement Date activities
outlined in Section 3.2 and except for any such activities relating to products
that are the subject of the Impax ANDA that were engaged in by Impax or its
Affiliates prior to the Effective Date and that would have given rise to a claim
of infringement of the Licensed Patents. For the sake of clarity, nothing in
this Section 8.2(b) shall permit termination if Impax asserts the invalidity,
unenforceability or non-infringement of the Licensed Patents in any future
litigation concerning any product that is not the subject of the Impax ANDA.
     A termination of this Agreement by one Party shall be deemed to be a
termination of this Agreement as to all Parties.
     Section 8.3. Effect of Termination. If this Agreement is terminated
pursuant to Section 8.2, (a) Endo and Penwest will have the right to recommence
or refile the New Jersey Actions; (b) each Party consents, with respect to any
such refiled New Jersey Actions, to (i) the exclusive jurisdiction of the United
States District Court for the District of New Jersey, and irrevocably and
unconditionally waives any objection to the laying of venue in such court or
that the New Jersey Actions has been brought in an inconvenient forum, and
(ii) waive any statute of limitations defenses in connection with such
recommenced or refiled New Jersey Actions; (c) the License and Covenant Not To
Sue automatically and immediately will terminate; and (d) Impax would have the
right to defend itself on any basis, including challenging the validity and
enforceability of the Opana® ER Patents or the non-infringement thereof.
Termination or expiration of this Agreement shall not release any Party from
liability (in an action at law or otherwise) for any obligations, liabilities or
damages incurred prior to such termination and arising out of a breach of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
     Section 8.4. Survival. Sections 2.2, 3.4, 3.5, 3.6, 6.1, 6.2, 6.3, 8.3, 8.4
and Articles I, V and VII will survive the expiration or termination of this
Agreement.
ARTICLE IX.
MISCELLANEOUS
     Section 9.1. Governing Law; Jurisdiction. The validity and interpretation
of this Agreement and the legal relations of the Parties to it will be governed
exclusively by the internal laws, and not the law of conflicts, of the State of
New Jersey.
     Section 9.2. Notices. All notices, requests and other communications
hereunder will be in writing, will be addressed to the receiving Party’s address
set forth below or to such other address as a Party may designate by notice
hereunder, and will be either (a) delivered by hand, (b) made by facsimile
transmission (to be followed with written confirmation by the delivering Party),
(c) sent by private courier service providing evidence of receipt, or (d) sent
by registered or certified mail, return receipt

Page 17

--------------------------------------------------------------------------------

 

Settlement and License Agreement
requested, postage prepaid. The addresses and other contact information for the
Parties are as follows:

         
 
  For Impax:   Impax Laboratories, Inc.
121 New Britain Blvd.
Chalfont, PA 18914
Facsimile No.: (215) 933-0333
Attn: Chris Mengler, President, Generic Division
 
       
 
  with a copy
(which shall not
constitute notice) to:    
 
Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544
Facsimile No.: (510) 471-3200
Attn: Margaret Snowden,
          Vice President, Intellectual Property
 
       
 
  For Endo:   Endo Pharmaceuticals Inc.
100 Endo Boulevard
Chadds Ford, PA 19317
Facsimile No.: (610) 558-9682
Attn: President
 
       
 
  with a copy to:   Endo Pharmaceuticals Inc.
100 Endo Boulevard
Chadds Ford, PA 19317
Facsimile No.: (610) 558-9684
Attn: Chief Legal Officer
 
       
 
  For Penwest:   Penwest Pharmaceuticals Co.
2981 Route 22
Suite 2
Patterson, NY 12563
Attn: President & CEO

or to such other addresses as will have been subsequently furnished by written
notice to the other Parties.
     Section 9.3. Entire Agreement; Waiver. This Agreement, including the
Appendix attached hereto, together with the Development Agreement between Endo
and Impax, dated as of the date hereof, contains the entire agreement between
the Parties with respect to the subject matter hereof and supersedes all prior
drafts or understandings. No change, modification, amendment or waiver of any
obligation, term or provision contained herein will be valid or enforceable
unless the same is reduced to writing and

Page 18

--------------------------------------------------------------------------------

 

Settlement and License Agreement
signed by a duly authorized representative of each of the Parties to be bound
hereby. The waiver by a Party to this Agreement of a breach of any provision set
forth herein or of any right contained herein will not operate as or be
construed as a continuing waiver or a waiver of any subsequent breach or right
granted herein.
     Section 9.4. Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed be an original, but all of which together will
constitute one agreement.
     Section 9.5. No Third Party Beneficiaries. Except as expressly provided
herein, nothing is intended or will be construed to confer upon any person or
entity other than the Parties hereto and their successors or assigns, any rights
or remedies under or by reason of this Agreement.
     Section 9.6. Assignment. This Agreement will be binding upon and inure to
the benefit of the Parties and their permitted successors and assigns. This
Agreement and the rights granted herein may not be assigned or transferred
(whether by contract, operation of law or otherwise) by any Party without the
prior written consent of the other Parties, provided that this Agreement shall
be assignable by a Party (a) to an Affiliate or (b) in connection with the sale
of all or substantially all of the assets of the business of such Party to which
this Agreement relates, and provided further that (i) the Party whose assets are
being sold notifies the other Parties of any such assignment of this Agreement
in writing (including the identity of the assignee) and (ii) the purchaser of
those assets provides written confirmation that it agrees to assume all of the
assigning Party’s obligations hereunder. The covenants, rights and obligations
of each Party under this Agreement shall remain binding upon such Party
notwithstanding any assignment or transfer of this Agreement by such Party as
permitted by this Section 9.6, and also shall inure to the benefit of and be
binding upon any permitted assignee or transferee of this Agreement.
     Section 9.7. Irreparable Harm. Each Party acknowledges and agrees that, in
the event of any threatened or actual breach by it of the first sentence of
Section 3.2, Section 3.3 or Article V, the other Parties will suffer immediate
and irreparable injury not fully compensable by monetary damages and for which
the other Parties may not have an adequate remedy at law. Accordingly, each
Party agrees that if one of the other Parties institutes an action or proceeding
to enforce any provisions of this Agreement, such other Party or Parties will be
entitled to seek injunctive or other equitable relief as may be necessary or
appropriate to enjoin, prevent or curtail any such breach or threatened breach.
The foregoing will be in addition to and without prejudice to such other rights
as each Party may have under this Agreement, at law or in equity.
     Section 9.8. Expenses. Each Party will pay its own expenses incurred in
connection with its negotiation of this Agreement and the consummation of the
transactions contemplated hereby.

Page 19

--------------------------------------------------------------------------------

 

Settlement and License Agreement
     Section 9.9. Headings. The headings contained in this Agreement are for
convenience of reference only and will not affect the meaning or interpretation
of this Agreement.
     Section 9.10. Construction. References to any NDA or ANDA in this Agreement
include, unless expressly indicated otherwise, all replacements and successors
and all amendments and supplements to the foregoing. The term “including” means
“including, without limitation,” and “herein”, “hereof”, and “hereunder” refer
to this Agreement as a whole.
[Remainder of page left blank]

Page 20

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
above written.

          ENDO PHARMACEUTICALS INC.    
 
       
By:
  /s/ David P. Holveck    
 
        Name and Title: David P. Holveck, President & CEO    
 
        Date: June 7, 2010    
 
        PENWEST PHARMACEUTICALS CO.    
 
       
By:
  /s/ Jennifer L. Good    
 
        Name and Title: Jennifer L. Good, President & CEO    
 
        Date: June 8, 2010    
 
        IMPAX LABORATORIES, INC.    
 
       
By:
  /s/ Arthur A. Koch, Jr.    
 
        Name and Title: Arthur A. Koch, Jr., SVP-CFO    
 
        Date: June 8, 2010    

 

--------------------------------------------------------------------------------

 

Settlement and License Agreement
APPENDIX A
STIPULATION OF DISMISSAL AND ORDER
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

                 
ENDO PHARMACEUTICALS INC.
        )      
and PENWEST PHARMACEUTICALS
CO.,
        )      
 
        )      
 
  Plaintiffs,     )      
 
        )     C.A. No. 09-831-KSH-PS
v.
        )     C.A. No. 09-832-KSH-PS
 
        )     C.A. No. 09-833-KSH-PS
IMPAX LABORATORIES, INC.,
        )      
 
        )      
 
  Defendant.     )
)
)      

     WHEREAS, plaintiffs allege that Penwest Pharmaceuticals Co. (“Penwest”) is
the assignee and owner of U.S. Patents 5,662,933, 5,958,456 and 7,276,250 (the
“Asserted Patents”), and that Endo Pharmaceuticals Inc. (“Endo”) is an exclusive
licensee of the Asserted Patents in the relevant field of use pursuant to a
strategic alliance agreement with Penwest;
     WHEREAS, defendant Impax Laboratories, Inc. (“Impax”) has submitted to the
U.S. Food and Drug Administration Abbreviated New Drug Application No. 79-087
(“Impax ANDA”) for approval to market and sell generic oxymorphone HCl
extended-release tablets; and
     WHEREAS, Endo, Penwest and Impax have entered into a Settlement and License
Agreement, dated as of June 8, 2010 (“Settlement and License Agreement”),
pursuant to which the parties have resolved the above-referenced action and
Plaintiffs have granted to Impax a license under the Asserted Patents in the
United States.
     NOW, THEREFORE, Endo, Penwest and Impax stipulate that:

 

--------------------------------------------------------------------------------

 

Settlement and License Agreement

  1.   Impax, its Affiliates and their respective officers, agents, servants,
employees and attorneys will not, until the applicable Commencement Date (as
defined in the Settlement and License Agreement), engage in the manufacture,
use, marketing, offer for sale, or sale in the United States, or importation
into the United States, of any generic version of the Opana® ER product, except
that (a) Impax shall be permitted to manufacture and market (but not use or
sell) such products for a reasonable period of time prior to the applicable
Commencement Date solely for the purpose of selling such products only on or
after the Commencement Date, as set forth in the Settlement and License
Agreement, and (b) Impax may conduct, directly or indirectly, any activities
protected under 35 U.S.C. § 271(e)(1). The foregoing shall terminate
automatically upon the applicable Commencement Date for each product as defined
in the Settlement and License Agreement.     2.   Pursuant to Rules 41(a)(1) and
41(c) of the Federal Rules of Civil Procedure, plaintiffs, Endo, Penwest and
Impax hereby stipulate and agree that the above actions C.A. Nos. 09-831, 09-832
and 09-833 -KSH-PS, including all claims, counterclaims and affirmative defenses
between Plaintiffs and Impax, are dismissed with prejudice, except as provided
for in sections 2.2 and 8.3 of the Settlement and License Agreement.     3.  
Each party shall bear its own costs, expenses and attorneys’ fees in connection
with the above-referenced actions.     4.   The parties waive any right of
appeal from this Stipulation of Dismissal and Order.     5.   The Court retains
jurisdiction over this Stipulation of Dismissal and Order, and the
interpretation of the Settlement and License Agreement as it pertains to this
Stipulation of Dismissal and Order, in the event of any dispute concerning it.

 

--------------------------------------------------------------------------------

 

Settlement and License Agreement
     IT IS SO ORDERED, this                      day of
                                        , 2010.

         
 
       
 
  Hon. Katharine S. Hayden, U.S.D.J.    

Stipulated as to form and entry:

             
Dechert llp
           
 
           
Attorneys for Plaintiffs Endo Pharmaceuticals, Inc. and Penwest Pharmaceuticals,
Co.
      Attorneys for Defendant and Counterclaim Plaintiff Impax Laboratories,
Inc.    

             
By:
  /s/ Robert D. Rhoad       By:
 
            Robert D. Rhoad
902 Carnegie Center
Suite 500
Princeton, NJ 08540
Telephone: (609) 955-3200

Martin J. Black
DECHERT LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104-2808
Telephone: (215) 994-4000