Exhibit 10.3

Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

Execution Version
PRIVILEGED AND CONFIDENTIAL
SUBJECT TO FRE 408

SETTLEMENT AND LICENSE AGREEMENT
This SETTLEMENT AND LICENSE AGREEMENT (this “Agreement”) is hereby entered into
and made effective on February 13, 2015 (the “Effective Date”) by and between
Cephalon, Inc. (“Cephalon”) and Eagle Pharmaceuticals, Inc. (“Eagle”). Cephalon
and Eagle are referred to herein individually as a “Party” and collectively, as
the “Parties.”
WHEREAS, Cephalon owns United States Patent No. 8,791,270 (the “’270 Patent”);
WHEREAS, Cephalon is the holder of the Cephalon NDAs (as defined below), which
are approved by the Food and Drug Administration (“FDA”) for the manufacture and
sale of the Cephalon Products (as defined below) for the treatment of patients
with chronic lymphocytic leukemia (“CLL”), and the treatment of patients with
indolent B-cell non-Hodgkin’s lymphoma that has progressed during or within six
(6) months of treatment with rituximab or a rituximab-containing regimen
(“NHL”), in each case, which Cephalon and its Affiliates currently market in the
United States under the brand name TREANDA®;
WHEREAS, Eagle is the holder of the Eagle RTD NDA (as defined below), which was
submitted to the FDA and tentatively approved for the manufacture and sale in
the Territory of the Eagle RTD Product (as defined below);
WHEREAS, Eagle is the holder of the Eagle Rapid NDA (as defined below), which
will be submitted to the FDA seeking approval for the manufacture and sale in
the Territory of the Eagle Rapid Product (as defined below);
WHEREAS, Cephalon and Eagle are involved in litigation in the United States
District Court for the District of Delaware (the “District Court”), namely Civil
Action No. 14-cv-1042 (GMS), which has been consolidated with Cephalon’s other
related bendamustine cases in the District Court into Civil Action No.
13-cv-2046 (GMS) (the “Lawsuit”), concerning, inter alia, the validity of the
’270 Patent, as well as the alleged infringement by Eagle of the ’270 Patent
related to Eagle’s proposed manufacture and sale of the Eagle RTD Product in the
Territory;
WHEREAS, Cephalon contends that the ’270 Patent is valid and enforceable and
that the manufacture, use, sale, offering for sale, or importation of Eagle
Products (as defined below) in or for the Territory would infringe the ’270
Patent;
WHEREAS, the Parties desire and agree to fully settle the Lawsuit as it applies
to Eagle, and to permit entry of Eagle Products prior to the expiration of the
’270 Patent upon the terms and subject to the conditions set forth herein;
WHEREAS, this Agreement is the only agreement between the Parties related to the
settlement of the Lawsuit and any other disputes relating to infringement of the
’270 Patent with respect to the Eagle NDAs and the Eagle Products; and
WHEREAS, no Party has received any consideration from the other Party for its
entry into this Agreement other than that which is described in this Agreement.

 
 

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

NOW, THEREFORE, in consideration of the mutual agreements herein contained and
the consideration described herein, the sufficiency and receipt of which are
hereby acknowledged, the Parties hereto, intending to be legally bound hereby,
agree as follows:
1.
DEFINITIONS

1.1
“505(b)(2) NDA” means a new drug application submitted to the FDA under 21
U.S.C. §355(b)(2) (or any replacement thereof).

1.2
“Affiliate” of a Person means any other Person which (directly or indirectly) is
controlled by, controls or is under common control with such Person. For the
purposes of this definition, the term “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”) as used
with respect to any Person means (a) in the case of a corporate entity, direct
or indirect ownership of voting securities entitled to cast at least fifty
percent (50%) of the votes in the election of directors, (b) in the case of a
non-corporate entity, direct or indirect ownership of at least fifty percent
(50%), including ownership by trusts with substantially the same beneficial
interest, of the equity interests with the power to direct the management and
policies of such Person, provided that if local law restricts foreign ownership,
control will be established by direct or indirect ownership of the maximum
ownership percentage that may, under such local law, be owned by foreign
interests, or (c) the power to direct the management or policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

1.3
“Calendar Quarter” means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and December 31.

1.4
“Calendar Year” means each successive period of twelve (12) months commencing on
January 1 and ending on December 31.

1.5
“Cephalon Know-How” means [ * ].

1.6
“Cephalon NDAs” means NDA No. 22249 and NDA No. 22303 with respect to the [ * ]
liquid concentrate bendamustine hydrochloride product for infusion for the
treatment of patients with CLL and the treatment of patients with NHL.

1.7
“Cephalon Products” means the [ * ] liquid concentrate, ready-to-dilute,
bendamustine hydrochloride products that are the subject of the Cephalon NDAs
and marketed in the Territory under the TREANDA® trademark for the treatment of
patients with CLL and the treatment of patients with NHL.

1.8
“Eagle NDAs” means the Eagle RTD NDA and the Eagle Rapid NDA.

1.9
“Eagle Products” means the Eagle RTD Product and the Eagle Rapid Product.

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

1.10
“Eagle Rapid NDA” means the 505(b)(2) NDA as filed with the FDA immediately
following the Effective Date pursuant to the Exclusive License Agreement and as
such 505(b)(2) NDA is approved by the FDA [ * ].

1.11
“Eagle Rapid Product” means Eagle’s bendamustine product for Short Infusion
known as EP-3102 as further described on Schedule 1.11 as of the Effective Date,
that is approved for marketing in the Territory under the Eagle Rapid NDA [ * ].

1.12
“Eagle RTD NDA” means 505(b)(2) NDA No. 205580 as tentatively approved by FDA as
of the Effective Date for the treatment of NHL [ * ].

1.13
“Eagle RTD Product” means [ * ] bendamustine hydrochloride product in a
multi-use vial that is tentatively approved by the FDA under the Eagle RTD NDA.
[ * ].

1.14
“Exclusive License Agreement” means the Exclusive License Agreement by and
between Eagle and Cephalon, dated as of the date hereof.

1.15
“Exclusive License Termination Date” means the effective date of termination of
the Exclusive License Agreement by Cephalon pursuant to Section 15.4.1 thereof.

1.16
“Final Court Decision” means a decision by a court on the merits whereby such
court enters final judgment of invalidity, unenforceability or non-infringement
of the asserted patent claims from which no appeal (other than a petition to the
United States Supreme Court for a writ of certiorari) has been or can be taken.
For the avoidance of doubt, any withdrawal, settlement or dismissal of any of
action or dispute without a decision on the merits of the asserted patent claims
(whether such dismissal is with or without prejudice, and whether or not such
claims may be relitigated) shall not be deemed a Final Court Decision.

1.17
“First Commercial Sale” means the first sale in the Territory by or on behalf of
Eagle or its Affiliates to a Third Party of the applicable Eagle Product after
receipt of the applicable NDA approval for such Eagle Product. Notwithstanding
the foregoing, sales made by or on behalf of Cephalon or its Affiliates under
the Exclusive License Agreement shall not be deemed sales for any purpose under
this Agreement.

1.18
“Know-How” means know-how, trade secrets, chemical and biological materials,
formulations, information, documents, studies, results, and data.

1.19
“Law” means any federal, state, provincial, local, international or
multinational law, statute, standard, ordinance, code, rule, regulation,
resolution or promulgation, or any order, writ, judgment, injunction, decree,
stipulation, ruling, determination or award entered by or with any governmental
authority or regulatory authority, or any license, franchise, permit or similar
right granted under any of the foregoing, or any similar provision having the
force or effect of law.

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

1.20
“Licensed Patents” means the ’270 Patent and any continuations,
continuations-in-part, divisionals, reissues and reexaminations thereof, and any
other patents owned or controlled by Cephalon or its Affiliates and listed in
the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the
“Orange Book”) as covering the Cephalon Products.

1.21
[ * ].

1.22
“Manufacturing Know-How” means [ * ].

1.23
“Net Sales” means, with respect to an Eagle Product sold in the Territory by
Eagle or its Affiliates, the aggregate gross sales amount received for such
Eagle Product by Eagle and its Affiliates on an arms-length basis from Third
Parties in the Territory, less the following deductions:

(a)
[ * ] percent ([ * ]%) of gross sales in the Territory to cover cash discounts
given by Eagle and its Affiliates;

(b)
any adjustments on account of price adjustments, billing adjustments, shelf
stock adjustments, promotional payments, or other similar allowances affecting
the Eagle Product;

(c)
chargebacks, rebates, administrative fee arrangements, reimbursements, and
similar payments to wholesalers and other distributors, buying groups, health
care insurance carriers, pharmacy benefit management companies, health
maintenance organizations, other institutions or health care organizations or
other customers;

(d)
amounts due to Third Parties on account of rebate payments, including Medicaid
rebates, or other price reductions provided, based on sales by Eagle and its
Affiliates to any governmental authorities or the FDA in respect of state or
federal Medicare, Medicaid or similar programs;

(e)
[ * ]

(f)
allowances and credits to Third Parties on account of rejected, damaged,
returned or recalled Eagle Product;

(g)
any costs incurred in connection with, or arising out of, compliance with the
Prescription Drug User Fee Act; and

(h)
other specifically identifiable amounts that have been credited against or
deducted from gross sales of such Eagle Product and which are substantially
similar to those credits and deductions listed above.

Sales and other transfer of Eagle Product between any of Eagle and its
Affiliates will not give rise to Net Sales, but rather the subsequent sale of
Eagle Product to

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

Third Parties. For the avoidance of doubt, sales to Authorized Third Parties by
Eagle and its Affiliates will give rise to Net Sales (provided that any supply
to an Authorized Third Party for subsequent sale by such Third Party for which
Eagle will receive a royalty or other payment shall not give rise to Net Sales
but rather such subsequent payment shall be included in Profit under clause (b)
of Section 1.27).
1.24
“Other Cephalon Patents” means, other than the Licensed Patents, all [ * ].

1.25
“Patent Rights” means all patents and patent applications (including provisional
applications), including all divisionals, continuations, substitutions,
continuations-in-part, re-examinations, re-issues, additions, renewals,
extensions, confirmations, registrations, any other pre- or post-grant forms of
any of the foregoing, any confirmation patent or registration patent or patent
of addition, utility models, patent term extensions, and supplemental protection
certificates or requests for continued examinations, foreign counterparts, and
the like of any of the foregoing.

1.26
“Person” means an individual, sole proprietorship, partnership, limited
partnership, limited liability partnership, corporation, limited liability
company, business trust, joint stock company, trust, beneficiary or trustee of
any trust, incorporated association, joint venture, or similar entity or
organization, including a government or political subdivision or department or
agency of a government.

1.27
“Profit” means (a) with respect to an Eagle Product sold by Eagle, its
Affiliates or any Third Party (other than any Authorized Third Party) on behalf
of Eagle or its Affiliates, the Net Sales of such Eagle Product minus [ * ] and
(b) with respect to an Eagle Product sold by an Authorized Third Party (which
does not include distributors), all payments that are received by Eagle and its
Affiliates from such Authorized Third Party in consideration for such
authorization (which may include a reasonable allocation of amounts received
among the Licensed Patents and other intellectual property licensed to such
Authorized Third Party), excluding [ * ].

1.28
“Rapid License Effective Date” means [ * ].

1.29
“Rapid Royalty Term” means the period commencing upon the First Commercial Sale
of the Eagle Rapid Product following the Rapid License Effective Date and ending
[ * ].

1.30
[ * ].

1.31
“Royalty Term” means each of the RTD Royalty Term and Rapid Royalty Term.

1.32
“RTD License Effective Date” means [ * ].

1.33
“RTD Royalty Term” means the period commencing upon the First Commercial Sale of
the Eagle RTD Product and ending [ * ].

1.34
[ * ].

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

1.35
“Territory” means the United States of America, its territories, possessions,
protectorates and the Commonwealth of Puerto Rico.

1.36
“Third Party” means any Person that is not a Party or an Affiliate of a Party.

2.
SETTLEMENT; DISMISSAL; RELEASE

2.1
All of the terms and conditions set forth in this Agreement shall be binding on
the Parties as of the Effective Date.

2.2
The Parties are entering into this Agreement in an effort to avoid the fees,
costs and expenses associated with the continued litigation of this matter, as
well as the attendant risks of litigation.

2.3
Dismissal. Within five (5) business days of the Effective Date, the Parties
shall enter into and Cephalon shall cause to be filed with the District Court a
Consent Judgment, substantially in the form attached hereto as Exhibit A (the
“Consent Judgment”).

2.4
Release. In consideration of the mutual execution of this Agreement and the
mutual agreement to be legally bound by the terms hereof, Cephalon and Eagle,
each on behalf of itself and its predecessors, successors, assigns,
shareholders, officers, directors, employees, trustees, agents, representatives,
licensees, licensors, parents, subsidiaries and Affiliates and all others
claiming by, through and under them, hereby fully, finally, irrevocably and
forever releases, relinquishes, acquits and discharges the other Party and its
predecessors, successors, assigns, shareholders, officers, directors, employees,
trustees, agents, representatives, licensees, licensors, parents, subsidiaries,
Affiliates, customers, suppliers, importers, attorneys, manufacturers,
distributors and insurers, if any, from any and all claims, demands, causes of
action, liabilities, losses, all manner of actions, judgments, settlements,
interest, damages, punitive damages and other damages or costs of whatever
nature (including costs, expenses, and attorneys’ fees), whether known or
unknown, foreseen or unforeseen, certain or contingent, accruing before the
Effective Date, arising out of, derived from, predicated upon, or relating to
the filing of the Eagle RTD NDA; provided, however, that nothing herein shall
prevent or impair the right of either Party to bring a proceeding in court or
any other forum for a breach of this Agreement or the Exclusive License
Agreement, or any representation, warranty, or covenant herein, or with respect
to any product other than the Eagle RTD Product, or any proceeding outside of
the Territory.

2.5
Except as required by Law, requested by FDA, or for reasons that relate to the
safety and/or efficacy of any pharmaceutical product, Cephalon and its
Affiliates shall not initiate or otherwise undertake any activity with the FDA
against the Eagle NDAs or interfere with Eagle’s efforts to obtain FDA approval
of the Eagle NDAs, including, but not limited to, the filing or submission of
any Citizen Petitions, correspondence or other written or oral communications
with the FDA.

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

2.6
Unknown Claims. Each Party, on behalf of itself and its Affiliates, hereby
expressly waives and relinquishes any and all provisions, rights and benefits
conferred by Section 1542 of the California Civil Code, which provides as
follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
Further, each Party, on behalf of itself and its Affiliates, expressly waives
and relinquishes all rights and benefits afforded by any Law in any other
jurisdiction similar to Section 1542 of the California Civil Code.
2.7
Admissions. Eagle, on behalf of itself and its Affiliates, hereby admits that
(a) the Licensed Patents and Other Cephalon Patents are valid and enforceable
with respect to the manufacture, use, sale, offering for sale and importation of
the Eagle Products in or for the Territory, and (b) absent the licenses granted
to Eagle in Section 3.1, the manufacture, use, sale, offering for sale and
importation of the Eagle Products in or for the Territory would infringe the
Licensed Patents and Other Cephalon Patents.

2.8
Agreement to Abide by License Effective Date. Except to the extent permitted
under the license in Article 3 below, Eagle, on behalf of itself and its
Affiliates, covenants not to, and shall cause each Authorized Third Party not
to, (a) make, use, import, offer to sell or sell in or for the Territory, (b)
actively induce or assist any other Person to make, use, import, offer to sell
or sell in or for the Territory, or (c) import or cause to be imported in the
Territory, any Eagle RTD Product before the RTD License Effective Date nor any
Eagle Rapid Product before the Rapid License Effective Date.

2.9
Each Party represents, warrants and covenants that it has not heretofore
assigned or transferred, and will not assign or otherwise transfer, to any
Person any matters released by such Party in Section 2.4, and each such Party
agrees to indemnify and hold harmless the other Party and the other Persons
released under Section 2.4 from and against all such released matters arising
from any such alleged or actual assignment or transfer.

3.
LICENSE; RESTRICTIONS

3.1
License Grants.

(a)
Eagle RTD Products. Subject to the terms and conditions of this Agreement,
Cephalon and its Affiliates hereby grant to Eagle and its Affiliates a
royalty-bearing, non-transferable (except as permitted under Section 8.10), non-

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

exclusive license, without the right to grant sublicenses, under the Licensed
Patents to develop, manufacture, use, offer to sell, sell and import the Eagle
RTD Products in the Territory (and engage Third Parties to perform the foregoing
(an, “Authorized Third Party”) solely with respect to the Eagle RTD Products in
the Territory) as of and following the RTD License Effective Date, provided that
Eagle has received FDA approval of the Eagle RTD NDA.
(b)
Eagle Rapid Products. Subject to the terms and conditions of this Agreement, [ *
], Cephalon and its Affiliates hereby grant to Eagle and its Affiliates a [ * ]
as of and following the Rapid License Effective Date.

(c)
Pre-Launch Rights. Subject to the terms and conditions of this Agreement, Eagle
and its Affiliates may, and may engage Third Parties to perform the following on
behalf of Eagle with respect to the applicable Eagle Products, (i) [ * ], and
(2) [ * ]; (ii) [ * ]; and (3) [ * ].

3.2
The license rights under Section 3.1(a) to offer to sell and sell the Eagle RTD
Products will begin on the RTD License Effective Date, and Eagle will not and
will cause its Affiliates not to, directly or indirectly, offer to sell or sell
any Eagle RTD Product in or for the Territory prior to the RTD License Effective
Date, or manufacture or import any Eagle RTD Product prior to the RTD License
Effective Date except as permitted under Section 3.1(c). The license rights
under Section 3.1(b) [ * ], and [ * ].

3.3
Covenant Not to Sue.

(a)
Effective as of the RTD License Effective Date, and with respect only to the
Eagle RTD Product, Cephalon and its Affiliates covenant not to sue, assert any
claim or otherwise participate in any action or proceeding, directly or
indirectly, against, Eagle, its Affiliates and any Authorized Third Party, and
their importers, suppliers, manufacturers, distributors, and customers, or any
permitted assignee or acquiror of Eagle’s rights in the Eagle RTD Product, or
support, permit or encourage any Third Party to sue, for infringement of any
Licensed Patent or Other Cephalon Patent, in each case, solely with respect to
the making, having made, using, selling, offering for sale, and importation of
the Eagle RTD Product in or for the Territory as of and following the RTD
License Effective Date pursuant to Section 3.1(a).

(b)
Effective as of the Rapid License Effective Date, and with respect only to the
Eagle Rapid Product, Cephalon and its Affiliates covenant not to sue, assert any
claim or otherwise participate in any action or proceeding, directly or
indirectly, against, Eagle, its Affiliates and any Authorized Third Party, and
their importers, suppliers, manufacturers, distributors, and customers, or any
permitted assignee or acquiror of Eagle’s rights in the Eagle Rapid Product, or
support, permit or encourage any Third Party to sue, for

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

infringement of any Licensed Patent or Other Cephalon Patent, in each case, [ *
].
(c)
Effective upon the Exclusive License Termination Date, and with respect only to
the Eagle Rapid Product, Cephalon and its Affiliates covenant not to sue, assert
any claim or otherwise participate in any action or proceeding, directly or
indirectly, against, Eagle, its Affiliates and any Authorized Third Party, and
their importers, suppliers, manufacturers, distributors, and customers, or any
permitted assignee or acquiror of Eagle’s rights in the Eagle Rapid Product, or
support, permit or encourage any Third Party to sue, for infringement of any
Licensed Patent or Other Cephalon Patent, in each case, [ * ].

(d)
Cephalon shall impose the foregoing covenants not to sue on its Affiliates and
any Third Party to which Cephalon or any of its Affiliates may assign, license,
sublicense, or otherwise transfer any rights to or under the applicable Licensed
Patent or Other Cephalon Patent, whether by merger, sale, assignment or other
form of transaction and including any successor of Cephalon or its Affiliates.
Cephalon shall not, enable, authorize, or license, any Third Party to take any
action that would have the effect of allowing such Third Party to take any
action relating to any Licensed Patent or Other Cephalon Patent that would be
prohibited by this Section 3.3 if taken by Cephalon.

3.4
No Other Licenses; Disclaimer. Nothing in this Agreement will be construed as:
(a) an obligation to bring or prosecute actions or suits against any Third Party
for infringement of the Licensed Patents; (b) conferring a right to use any
trademark or trade name of either Party; (c) granting by implication, estoppel
or otherwise, any licenses or rights under any patent rights, except as
expressly described in this Agreement; or (d) granting by implication, estoppel
or otherwise, any licenses or rights with respect to (i) any pharmaceutical
product that has received FDA approval for marketing in the Territory pursuant
to any Abbreviated New Drug Application pursuant to 21 U.S.C. § 355(j), or (ii)
any bendamustine product in a solid lyophilized powder form or any bendamustine
product in any dosage form other than the Eagle Products [ * ]. Notwithstanding
anything in this Agreement to the contrary, no license or covenant not to sue
granted by Cephalon to Eagle herein is intended to, and will not be deemed to,
have any impact or effect on any Third Party’s or Eagle’s rights under or
pursuant to any regulatory exclusivity with respect to any pharmaceutical
product that has received FDA approval for marketing in the Territory pursuant
to an application under 21 U.S.C. § 355(j). [ * ].

3.5
Covenant Not to Challenge and Assist Challenges to the Licensed Patents and
Other Cephalon Patents. Except to the extent required by Law or order of a court
or administrative agency of competent jurisdiction, and subject to the terms of
this Section 3.5, Eagle shall not, and shall cause its Affiliates and each
Authorized Third

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

Party not to, directly or indirectly,: (a) challenge the validity,
enforceability, patentability, priority of invention or other claim to priority,
infringement or patent term adjustment of any of the Licensed Patents and Other
Cephalon Patents in any reexamination, inter partes proceeding, protest,
observation, comment, opposition, post‑grant proceeding, inter partes review,
interference or other action or proceeding in the United States Patent and
Trademark Office (“USPTO”) or any United States court proceedings or submit or
cause, in any manner, to be submitted, any correspondence or communication with
the USPTO with respect to the Licensed Patents and Other Cephalon Patents, in
each case, solely with respect to the Eagle Products in the Territory; and
(b) assist, encourage, finance, or otherwise provide any information to any
Third Party (specifically including, but not limited to, the other defendants in
Cephalon’s Treanda® lawsuits filed in the Districts of Delaware and/or the
E.D.N.Y, and those to be filed relating to the Licensed Patents or Other
Cephalon Patents) in any such proceeding under the foregoing clause (a) with
respect to any bendamustine product. Notwithstanding the foregoing, this Section
3.5 shall not restrict Eagle and its Affiliates from (A) challenging the
Licensed Patents or Other Cephalon Patents with respect to any product other
than any bendamustine products, (B) relying in any way on a Final Court Decision
finding one or more claim of the Licensed Patents or Other Cephalon Patents to
be invalid, unenforceable or not infringed, (C) responding in good faith to any
lawfully issued subpoena calling for Eagle or an Affiliate of Eagle to provide
documents or testimony, and (D) relying on this Agreement to show a license,
waiver or covenant not to sue has been granted in response to a proceeding for
infringement of the Licensed Patents or Other Cephalon Patents covered by the
covenant not to sue brought by or on behalf of Cephalon or its Affiliates (1)
against Eagle or an Affiliate of Eagle based on any of their activities
authorized under this Agreement or (2) against any Third Party based on its
activities with respect to any Eagle Product received directly or indirectly
from Eagle or an Affiliate of Eagle as authorized under this Agreement.
3.6
[ * ].

3.7
Cooperation. Upon Eagle’s request, Cephalon shall cooperate with Eagle in
informing the FDA that Cephalon has granted to Eagle the licenses set forth in
Section 3.1(a) and 3.1(b).

3.8
Delivery of Cephalon Know-How. Within [ * ] following the occurrence of the
Rapid License Effective Date, Cephalon will make a one-time delivery to Eagle of
one (1) electronic copy of all documents, data or other information in
Cephalon’s or its Affiliates’ possession or control as of such date to the
extent that such documents, data or other information describe or contain
Cephalon Know-How.

4.
ROYALTIES

4.1
Eagle RTD Products. During the RTD Royalty Term, Eagle will pay to Cephalon the
following percentages of Profit for Eagle RTD Products in or for the Territory
(the “RTD Royalty”):

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

(a)
from the date of the First Commercial Sale in the Territory of the Eagle Rapid
Product by Eagle or its Affiliates through [ * ] for Eagle RTD Products during
each Calendar Quarter; and

(b)
from January 1, 2017 through the end of the RTD Royalty Term [ * ] for Eagle RTD
Products during each Calendar Quarter.

4.2
Eagle Rapid Products. During the Rapid Royalty Term, [ * ] for Eagle Rapid
Products in or for the Territory during each Calendar Quarter (the “Rapid
Royalty” and together with the RTD Royalty, the “Royalty Payments”).

4.3
Payment Terms. Eagle will pay the RTD Royalty and the Rapid Royalty in United
States dollars by wire transfer to an account designated in writing by Cephalon
within [ * ] following the end of each applicable Calendar Quarter. Each Royalty
Payment by Eagle hereunder will be accompanied by a report that includes the
aggregate gross sales of the applicable Eagle Product in the Territory during
the applicable Calendar Quarter, the corresponding Net Sales, the costs deducted
from Net Sales to determine the Profit, as applicable, and royalty rate applied
and the amount of each of the RTD Royalty and Rapid Royalty payment payable with
respect to such Net Sales (each, a “Royalty Statement”).

4.4
True-Up; Adjustments. Within [ * ] after the end of each Calendar Quarter during
each of the RTD Royalty Term and Rapid Royalty Term (each, a “Royalty Term”) and
within [ * ] after the expiration of the applicable Royalty Term, Eagle will
perform a “true up” reconciliation (and will provide Cephalon with a written
report of such reconciliation) of the deductions outlined in the definition of
“Net Sales” and the definition of “Profit” for the Calendar Quarter preceding
the just-ended Calendar Quarter. The reconciliation will be based on actual cash
paid or credits issued plus an estimate for any remaining liabilities incurred
related to the Eagle Products, but not yet paid. If the foregoing reconciliation
report shows either an underpayment or an overpayment between the Parties, Eagle
will, if Eagle is the owing Party, pay Cephalon the amount of the difference
within [ * ] after the date of delivery of such report or, if Cephalon is the
owing Party, offset such amount against future payments to Cephalon hereunder.

4.5
Audit Rights.

(a)
Cephalon will have the right to engage, at its own cost and expense, subject to
this Section 4.5, an independent nationally recognized public accounting firm
chosen by Cephalon and reasonably acceptable to Eagle (which accounting firm
will not be the external auditor of Cephalon, will not have been hired or paid
on a contingency basis and will have experience auditing generic pharmaceutical
companies) (a “CPA Firm”) to conduct an audit of Eagle for the purposes of
confirming Eagle’s compliance with the Royalty Payment provisions of this
Agreement.

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

(b)
The CPA Firm will be given access to and will be permitted to examine such books
and records of Eagle as it will reasonably request, upon [ * ] prior written
notice having been given by Cephalon, during regular business hours, for the
sole purpose of determining compliance with the Royalty Payment provisions of
this Agreement. Prior to any such examination taking place, the CPA Firm will
enter into a confidentiality agreement reasonably acceptable to Cephalon with
respect to the information to which they are given access and will not contain
in its report or otherwise disclose to Cephalon or any Third Party any
information labeled by Eagle as being confidential customer information
regarding pricing or other competitively sensitive proprietary information.

(c)
Eagle and Cephalon will be entitled to receive a full written report of the CPA
Firm with respect to its findings and Cephalon will provide, without condition
or qualification, Eagle with a copy of the report, or other summary of findings,
prepared by such CPA Firm promptly following Cephalon’s receipt of same. In the
event of any dispute between Eagle and Cephalon regarding the findings of any
such inspection or audit, the Parties will initially attempt in good faith to
resolve the dispute amicably between themselves, and if the Parties are unable
to resolve such dispute within [ * ] after delivery to both Parties of the CPA
Firm's report, each Party will select an internationally recognized independent
certified public accounting firm (other than the CPA Firm), and the two firms
chosen by the Parties will choose a third internationally recognized independent
certified public accounting firm which will resolve the dispute, and such
accounting firm's determination will be binding on both Parties, absent manifest
error by such accounting firm.

(d)
Within [ * ] after completion of the CPA Firm’s audit, Eagle will pay to
Cephalon any deficiency in the Royalty Payment amount determined by the CPA
Firm. If the report of the CPA Firm shows that Eagle overpaid, then Eagle will
be entitled to off-set such overpayment against any Royalty Payment then owed to
Cephalon. If no royalty is then owed to Cephalon, then Cephalon will remit such
overpayment to Eagle. If the report of the CPA Firm shows a discrepancy between
the amount of the royalty to which Cephalon is entitled and the Royalty Payment
amount reflected by Eagle in the Royalty Statement in Cephalon’s favor, then in
addition to the payment of the Royalty Payment amount, and if such discrepancy [
* ], then the fees and expenses of the CPA Firm in performing such audit will be
paid by Eagle.

(e)
Eagle may exercise its audit rights under this Section 4.5 may not [ * ].

4.6
Taxes. Where required by Law, Eagle shall have the right to withhold applicable
taxes from any payments to be made by Eagle to Cephalon pursuant to this
Agreement. Eagle shall provide Cephalon with receipts from the appropriate
taxing

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

authority for all payments of taxes withheld and paid by Eagle to such
authorities on behalf of Cephalon. Cephalon shall have the right to appeal to
the appropriate taxing authority any such withholding and payment of such taxes.
4.7
No Other Compensation. Other than as explicitly set forth (and as applicable) in
this Agreement, Eagle will not be obligated to pay any additional fees,
milestone payments, royalties or other payments of any kind to Cephalon under
this Agreement.

4.8
Change in Accounting Periods. From time to time, either of the Parties may
change its accounting and financial reporting practices from Calendar Quarters
and Calendar Years to fiscal quarters and fiscal years or vice versa. If a Party
notifies the other of a change in its accounting and financial reporting
practices from Calendar Quarters and Calendar Years to fiscal quarters and
fiscal years or vice versa, then thereafter, beginning with the period specified
in the notice, the payment, reporting and other obligations hereunder related to
Calendar Quarters and Calendar Years will be deemed satisfied by compliance
therewith in accordance with the new reporting periods (fiscal reporting periods
or calendar reporting periods, as the case may be) instead of the previously
utilized reporting periods. The Parties will cooperate in good faith to minimize
any disruption caused by any such change.

5.
TERM AND TERMINATION

5.1
Term. Unless earlier terminated in accordance with the terms of this Section 5,
the term of this Agreement will commence on the Effective Date and will remain
in effect until the expiration of the last to expire of the Licensed Patents.

5.2
Termination for Cause. In addition to the rights set forth in Section 5.4,
either Party may terminate this Agreement at any time in the event that the
other Party materially breaches this Agreement and, if such breach is curable,
such material breach is not cured to the reasonable satisfaction of the
non-breaching Party within [ * ] after written notice thereof.

5.3
Effect of Expiration or Termination. Expiration or termination of this Agreement
will not relieve the Parties of any obligation accruing prior to such expiration
or termination. Sections 2.7, 3.1(b)(ii), 3.3 and 3.5 shall survive expiration,
but not termination, of this Agreement. In addition, Sections 1, 3.4, 4 (with
respect to sales occurring prior to termination to expiration), 5.3, 5.4, 6, 7.3
and 8 shall survive expiration or termination of this Agreement.

5.4
Equitable Remedies. Eagle agrees that to the extent Eagle breaches or threatens
to breach any of Sections [ * ], and Cephalon agrees that to the extent Cephalon
breaches or threatens to breach any of Sections [ * ], such action will cause
irreparable harm to the non-breaching Party which is not compensable in money
damages and the breaching Party hereby stipulates to the entry of a preliminary
or permanent injunction to prevent such a breach or the continuance of such
breach, and irrevocably and unconditionally waives any requirement that the
non-breaching Party post a

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

bond in connection with any action to enforce such Sections of this Agreement.
Eagle and Cephalon each also agrees that in the event of such breach or
threatened breach by such Party, it will not contest the non-breaching Party’s
right to seek damages, including enhanced damages, and any other available
remedies for patent infringement.
6.
CONFIDENTIALITY; PUBLICITY

6.1
The Parties hereby agree that, except to enforce this Agreement or unless
otherwise agreed to by the Parties in writing or as required by Law, the
Parties, their Affiliates and their respective employees, officers, directors
and other representatives shall not publish or otherwise disclose the contents
of this Agreement, except that (a) each Party may disclose this Agreement (i) to
its attorneys, advisors, consultants, agents, and representatives who are
subject to obligations of confidentiality consistent with this Agreement and
(ii) as otherwise required by Law, including reporting requirements to the U.S.
Securities and Exchange Commission or by the rules or regulations of any stock
exchange to which the Parties are subject, and (b) Eagle may communicate with
the FDA on a confidential basis concerning the approval of the Eagle Rapid NDA
and any regulatory issues pertaining to the Eagle Rapid Product, and the
licenses, consents and waivers provided for herein, and (c) Cephalon may
disclose such terms as may be necessary or useful in connection with any
proceeding relating to the Licensed Patents, Other Cephalon Patents or any
bendamustine product. In the event that a Party is required by Law or the rules
of any securities exchange or automated quotation system to make any such
disclosure under the foregoing clause (a)(ii), the Party making such disclosure
shall (A) give reasonable advance notice to the other Party of such disclosure
requirement and, in each of the foregoing, will use its reasonable efforts to
secure confidential treatment of such information required to be disclosed;
(B) cooperate with the other Party in an attempt to prevent or limit the
disclosure, and (C) limit any disclosure to the specific purpose at issue,
including consulting with the other Party concerning which terms of this
Agreement will be requested to be redacted in any public disclosure of this
Agreement, and in any event seek reasonable confidential treatment for any
public disclosure by any such agency.

6.2
Except as expressly permitted under and in accordance with Section 6.1, neither
Party shall make or allow the publication of any press release or other public
announcement with respect to this Agreement or any of the transactions
contemplated hereby, without the prior written approval of the other Party.
Eagle and Cephalon may each disclose to Third Parties the information contained
in any such approved press release without the need for further approval by the
other.

7.
REPRESENTATIONS AND WARRANTIES

7.1
Each of Cephalon and Eagle hereby represents and warrants to the other, as of
the Effective Date of this Agreement, that:

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

(a)
Such Party is duly organized, validly existing and in good standing under the
Law of the jurisdiction of its incorporation and has full corporate power and
authority to enter into this Agreement and to carry out the provisions hereof;

(b)
Such Party has taken all corporate action necessary to authorize the execution
and delivery of this Agreement and the performance of its obligations under this
Agreement;

(c)
This Agreement has been duly executed by such Party and constitutes a valid and
legally binding obligation of such Party, enforceable in accordance with its
terms;

(d)
The execution, delivery, and performance of this Agreement does not conflict
with any agreement, instrument, or understanding, oral or written, to which such
Party is bound nor violate any Law or regulation of any court, governmental
body, or administrative or other agency having jurisdiction over it;

(e)
It has been advised by its counsel of its rights and obligations under this
Agreement and enters into this Agreement freely, voluntarily, and without
duress; and

(f)
It is not relying on any promises, inducements, or representations other than
those provided herein.

7.2
Eagle’s Representations and Warranties. Eagle represents and warrants that Eagle
is the true owner of the Eagle NDAs.

7.3
Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NO PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY
OPERATION OF APPLICABLE LAW.

8.
GENERAL PROVISIONS

8.1
Waiver. None of the provisions of this Agreement will be considered waived by
any Party unless such waiver is agreed to, in writing, by authorized agents of
such Party. The failure of a Party to insist upon strict conformance to any of
the terms and conditions hereof, or failure or delay to exercise any rights
provided herein or by Law will not be deemed a waiver of any rights of any
Party.

8.2
Choice of Law and Remedies. This Agreement and any dispute arising out of or
related to this Agreement shall be governed and interpreted in accordance with
the Law of the State of Delaware without regard to conflicts of law principles.
The United States District Court for the District of Delaware shall have
exclusive jurisdiction in all matters arising under this Agreement, and the
Parties hereto

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

Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

expressly consent and submit to the personal and subject matter jurisdiction of
the District Court. This Agreement does not limit or restrict the remedies
available to any Party for the breach of another Party, and the Parties
expressly reserve any and all remedies available to them, at law or in equity,
for breach of this Agreement or otherwise. In addition, during the pendency of
any dispute under this Agreement initiated before the end of any applicable cure
period under Section 5.2, (a) this Agreement will remain in full force and
effect, (b) the provisions of this Agreement relating to termination for
material breach will not be effective, (c) the time period for cure under
Section 5.2 as to any termination notice given prior to the initiation of the
proceeding will be tolled, and (d) neither Party will issue a notice of
termination pursuant to this Agreement based on the subject matter of the
proceeding (and no effect will be given to previously issued termination
notices), until the court has confirmed the existence of the facts claimed by a
non-breaching Party to be the basis for the asserted material breach.
8.3
Costs. Each Party shall each bear its own costs and legal fees associated with
the negotiation and preparation of, and performance under, this Agreement and
any activities related to the implementation of this Agreement.

8.4
Entire Agreement. This Agreement and the Exclusive License Agreement constitutes
the entire agreement between the Parties relating to the subject matter hereof
and thereof and supersedes all previous agreements and understandings, oral or
written, with respect to such matters.

8.5
Notice. All notices or other communications hereunder shall be deemed to have
been duly given and made if in writing and if served by personal delivery upon a
Party, if delivered by a reputable overnight express courier service (charges
prepaid), or if sent by facsimile to the person at the address set forth below,
or such other address as may be designated in writing hereafter, in the same
manner, by such person as follows:

If to Cephalon:    Teva North America
425 Privet Road
Horsham, PA 19044

Attention: General Counsel

with a copy to:        Goodwin Procter LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018-1405
        
Attention: David M. Hashmall

If to Eagle:        Eagle Pharmaceuticals, Inc.

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

50 Tice Blvd, Suite 315
    Woodcliff Lake, NJ 07677
    Attention: Chief Executive Officer

With a copy to:     Cooley LLP
One Freedom Square
    Reston Town Center
    11951 Freedom Drive
    Reston, VA 201910-565
    Attn: Kenneth J. Krisko

Such notices will be deemed to have been given on the date delivered in the case
of delivery by personal delivery or overnight courier or on the date actually
received in the case of facsimile delivery.
8.6
Severability. When possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law.
If, however, any provision of this Agreement is held to be invalid, illegal, or
unenforceable for any reason, the Parties shall negotiate in good faith for a
substitute provision to continue the intent and purpose of such invalid
provisions, and the validity, legality, and enforceability of the remaining
provisions shall not be in any way impaired thereby.

8.7
Amendments. No amendment, modification or supplement of any provisions of this
Agreement shall be valid or effective unless made in writing and signed by a
duly authorized officer of each Party.

8.8
Descriptive Headings. The captions and descriptive headings of this Agreement
are for convenience only and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.

8.9
Third-Party Benefit. None of the provisions of this Agreement shall be for the
benefit of, or enforceable by, any Third Party.

8.10
Assignment. Neither Party will assign this Agreement or any part hereof or any
interest herein (whether by operation of law or otherwise) without the written
consent of the other Party; provided, however, that either Party may assign this
Agreement without such consent [ * ]. No assignment will be valid unless the
permitted assignee(s) assumes all obligations of its assignor under this
Agreement. No assignment will relieve any assigning Party of responsibility for
the performance of its obligations hereunder. Any purported assignment in
violation of this Section 8.10 will be void.

8.11
Counterparts; Electronic Delivery. This Agreement may be executed in
counter‑parts with the same effect as if both Parties had signed the same
document. All such counterparts will be deemed an original, will be construed
together and will constitute one and the same instrument. Signature pages of
this Agreement may be

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Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

exchanged by facsimile or other electronic means without affecting the validity
thereof.
SIGNATURES FOLLOW ON NEXT PAGE

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

Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
by its duly authorized representative as of the Effective Date.
CEPHALON, INC.
 
EAGLE PHARMACEUTICALS, INC.    
 
 
 
By: /s/ Staci Julie            
 
By: /s/ Scott Tarriff
 
Name:        Staci Julie        
 
Name:         Scott Tarriff            
Title:         VP, Global IP        
 
Title:         CEO    
 
 
 
By:     /s/ Matthew P. Blischak    
 
 
Name:             Matthew P. Blischak    
 
 
Title:     Assoc. GC, Branded IP Litigation    
 
 

 
 

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

Portions herein identified by [ * ] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed separately with the
Securities and Exchange Commission.

EXHIBIT A
[ * ]