Exhibit 10.1

SETTLEMENT AGREEMENT

This SETTLEMENT AGREEMENT (the “Settlement Agreement”) is hereby entered into
and made effective on September 22, 2014 (the “Effective Date”) by and among:

SANTARUS, INC., a corporation organized and existing under the laws of Delaware
having a principal place of business at 8510 Colonnade Center Drive, Raleigh,
North Carolina 27615 (“Santarus”);

THE CURATORS OF THE UNIVERSITY OF MISSOURI, a public corporation and body
politic and an arm or instrumentality of the State of Missouri having a
principal place of business at 321 University Hall, Columbia, Missouri 65211
(“Missouri” and together with Santarus, “Plaintiffs”);

SALIX PHARMACEUTICALS, INC., a corporation organized and existing under the laws
of Delaware having a principal place of business at 8510 Colonnade Center Drive,
Raleigh, North Carolina 27615, and being the indirect corporate parent of
Santarus (“Salix”); and

PAR PHARMACEUTICAL, INC., a corporation organized and existing under the laws of
the State of Delaware, having a place of business at 300 Tice Boulevard,
Woodcliff Lake, New Jersey 07677 (together with Par Pharmaceutical Companies,
Inc., “Par”).

Each one of Plaintiffs, Salix and Par is a “Party”, and collectively, they are
the “Parties” hereunder.

RECITALS

WHEREAS, Missouri owns United States Patent Nos. 6,780,882 issued August 24,
2004 (“‘882 Patent”) and 7,399,772 issued July 15, 2008 (“‘772 Patent”); and
Santarus is the exclusive licensee thereof;

WHEREAS, Plaintiffs initiated civil actions against Par in the United States
District Court for the District of Delaware (“District Court”), the cases being
consolidated and captioned Santarus, Inc. and the Curators of the University of
Missouri v. Par Pharmaceutical, Inc., Civil Action Nos. 07-551-GMS and
07-827-GMS (Consolidated) (the “Litigation”);

WHEREAS, the Parties have agreed to resolve their disputes relating to the
Litigation through this Settlement Agreement;

WHEREAS, the Plaintiff Releasors and the Par Releasees (as defined herein) have
not received any consideration from each other for their entry into the
Settlement Agreement other than that which is described in the Settlement
Agreement and the Stipulation of Dismissal.

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

 

1. SETTLEMENT PAYMENT AND DISMISSAL OF LITIGATION

1.1 Within five (5) business days after the Effective Date of this Settlement
Agreement, Par shall make payment of one hundred million U.S. dollars
($100,000,000.00) into an escrow account approved by Plaintiffs. The payment
will be made by wire transfer to the escrow account specified in writing by the
Plaintiffs. The payment will be non-recoverable by and non-refundable to Par. No
withdrawals from the escrow account shall be made without written approval of
Missouri and Santarus.

1.2 Plaintiffs will promptly notify Par in writing upon confirmation that the
one hundred million U.S. dollars ($100,000,000.00) payment has been received in
the escrow account. Upon Par’s receipt of such written confirmation, Par may
file with the District Court the Stipulation of Dismissal attached as Exhibit A,
to dismiss with prejudice all claims asserted in the Litigation (the
“Stipulation of Dismissal”). The date upon which the Stipulation of Dismissal is
filed shall be referred to herein as the “Dismissal Effective Date.”

 

2. RELEASE OF CLAIMS

2.1 As of the Dismissal Effective Date, Plaintiffs and Salix, and each of their
predecessors, successors, assigns, officers, directors, employees, trustees,
parents, subsidiaries and Affiliates (as defined below) (collectively,
“Plaintiff Releasors”) fully, finally and forever release, relinquish, acquit
and discharge Par and each of its predecessors, successors, assigns, officers,
directors, employees, trustees, parents (direct and indirect), subsidiaries
(direct and indirect) and Affiliates (collectively, “Par Releasees”), of and
from, any and all claims, actions, causes of action, suits, defenses, judgments,
debts, offsets, accounts, covenants, contracts, agreements, torts, damages and
any and all demands and liabilities whatsoever, including costs, expenses, and
attorneys’ fees (collectively, “Losses”) asserted in the Litigation or arising
out of Par’s sales of its generic Zegerid capsules. Notwithstanding this
release, nothing herein shall preclude any Plaintiff Releasor from asserting the
validity, enforceability, and/or infringement of the ‘882 Patent or ‘772 Patent
in any future litigation concerning: (a) a product other than Par’s generic
Zegerid capsules or (b) Par’s generic Zegerid capsules or generic Zegerid powder
sold or offered for sale after the date of this Settlement Agreement but before
expiration of the ‘882 Patent or ‘772 Patent, and such claims or arguments are
reserved.

2.2 As of the Dismissal Effective Date, Par Releasees fully, finally and forever
release, relinquish, acquit and discharge Plaintiff Releasors of and from, any
and all Losses asserted in the Litigation or arising out of Par’s sales of its
generic Zegerid capsules.

2.3 For purposes of this Agreement, “Affiliate” shall mean, with respect to Par:
Sky Growth Holdings Corporation (“SGHC”), which is a Delaware corporation and
indirect parent company of Par, and any Person directly or indirectly controlled
by SGHC. Par represents that SGHC directly or indirectly controls only the Par
group companies. For purposes of this Agreement, “Affiliate” shall mean with
respect to Plaintiffs and Salix: any entity which controls, is controlled by, or
is under common control with the applicable entity. For purposes of this
definition, “control” shall mean: (a) in the case of corporate entities, direct
or indirect ownership of at least fifty percent (50%) of the stock or shares
entitled to vote for the election of directors or otherwise having the power to
control or direct the affairs of such entity; and (b) in the case of
non-corporate entities, direct or indirect ownership of at least 50% of the
equity interest or the power to direct the management and policies of such
non-corporate entities.

 

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2.4 Each Party knowingly and voluntarily waives any claim (based on information
known to each Party as of the date of such Party’s execution of the Settlement
Agreement) against any other Party (whether for damages, injunction,
reformation, rescission, or otherwise) that such Party was fraudulently or
otherwise wrongfully induced to enter into this Settlement Agreement.

 

3. NO LICENSE; NO RESTRICTION ON MARKETING AFTER PATENT EXPIRY

Par acknowledges that nothing in this Settlement Agreement provides Par or its
Affiliates with a license, covenant not to sue, or any other right, express or
implied, to practice under any claims of the ‘882 Patent or ‘772 Patent, or use
any other intellectual property of Plaintiffs and Salix. Par additionally agrees
that it and its Affiliates will not sell or otherwise commercialize Par’s
generic Zegerid capsules or powder during the term of the ‘882 and ‘772 Patents.
However, nothing in this Settlement Agreement prevents Par or its Affiliates
from marketing Par generic Zegerid products after the expiry of all patents of
Plaintiffs and Salix that cover the relevant Par generic Zegerid products.

 

4. CONFIDENTIALITY

4.1 The Parties hereby agree that, except to enforce this Settlement Agreement
or unless otherwise agreed to by the Parties in writing or 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 Settlement Agreement and/or any exhibits attached hereto. The Parties
may state publicly that the Litigation has been settled on terms that are
confidential, but no public announcement concerning the existence of terms or
subject matter of this Settlement Agreement shall be made, either directly or
indirectly, by any Party without first obtaining the approval of the other Party
and agreement upon the nature and exact text of such public announcement or
disclosure which such agreement and approval shall not be unreasonably withheld,
conditioned or delayed.

4.2 Notwithstanding Section 4.1, each Party may disclose the contents of this
Settlement Agreement (a) as may be required by any applicable law, including the
Missouri Sunshine law, RSMo. § 610.010 et seq. as amended, the U.S. Securities
Act of 1933, as amended, the U.S. Securities Act of 1934, as amended, any
governmental law or regulation, or the rules of any recognized stock exchange;
(b) as required by discovery requests in litigation, after giving notice to the
other Parties to allow the other Parties sufficient time to seek a protective
order, (c) to any court or governmental body or agency compelling such
disclosure, as required by law, order, rule or regulation, or in connection with
an investigation by a governmental agency, (d) to its and its affiliates’
employees, inventors, directors, contractors, legal advisors, accountants,
auditors and financial advisors, subject to reasonable non-use and
non-disclosure requirements, (e) to potential and actual acquirers, investors,
underwriters and lenders, subject to reasonable non-use and non-disclosure
requirements, (f) to third parties if such contents are already made available
to the public, and (g) in substantially the form and content of the Form 8-K
disclosure provided herewith as Exhibit B.

 

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4.3 The confidentiality provisions of this Article 4 are separate and distinct
from applicable protective orders entered in the Litigation or prior litigations
involving the Parties and do not supersede the terms, conditions, and
protections of those protective orders.

 

5. REPRESENTATIONS AND WARRANTIES

Each Party represents and warrants to each of the other Parties, as of the date
of this Settlement Agreement, that:

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

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

5.3 This Settlement 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;

5.4 Such Party represents and warrants that it has been advised by its counsel
of its rights and obligations under this Settlement Agreement and enters into
this Settlement Agreement freely, voluntarily, and without duress; and

5.5 Such Party represents and warrants that it is not relying on any promises,
inducements, or representations between the Plaintiff Releasors and Par
Releasees other than those provided herein.

 

6. WAIVER

A waiver by any Party of any of the terms and conditions of this Settlement
Agreement in any instance shall not be deemed or construed to be a waiver of
such term or condition for the future, or of any subsequent breach hereof. All
rights, remedies, undertakings, obligations and agreements contained in this
Settlement Agreement shall be cumulative and none of them shall be in limitation
of any other remedy, right, undertaking, obligation or agreement of any Party.

 

7. ADMISSIONS

Par and its Affiliates acknowledge the validity of the ‘882 Patent and ‘772
Patent, and infringement of the ‘772 Patent by its sale of Par generic capsules
and the Par generic powder under 35 U.S.C. 271. Apart from the previous
sentence, nothing in this Settlement Agreement shall be construed as or deemed
to be an admission by the Parties hereto, or any of them, of any unlawful,
improper, or actionable conduct or omission by any of them, and each Party
hereto expressly denies liability of any kind whatsoever. Par and its Affiliates
further agree not to initiate or assist in any challenge to the validity or
enforceability of the ‘882 Patent and ‘772 Patent, including, without
limitation, in reexamination or inter partes review proceedings.

 

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8. CHOICE OF LAW AND REMEDIES

This Settlement Agreement shall be governed and interpreted in accordance with
the laws 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 Settlement Agreement
between the Plaintiff Releasors and Par Releasees, and the Parties hereto
expressly consent and submit to the personal and subject matter jurisdiction of
such Court on such matters. This Settlement 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 Settlement Agreement.

 

9. COSTS

Each Party shall each bear its own costs and legal fees associated with the
Litigation and the negotiation and preparation of the Settlement Agreement. This
provision shall not supersede provisions in the January 26, 2001 license
agreement between the Plaintiffs, as amended, including the provisions
concerning the reimbursement of costs, fees and other related expenses.

 

10. SEVERABILITY

When possible, each provision of this Settlement Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Settlement Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Settlement Agreement.

 

11. INTEGRATION

This Settlement Agreement shall constitute the entire agreement among the
Plaintiff Releasors and Par Releasees with respect to the settlement of the
Litigation and release of the claims and shall supersede all prior agreements
and understandings, both oral and written, among the Plaintiff Releasors and the
Par Releasees with respect to such subject matter. Nothing in this Agreement
shall amend or supersede the January 26, 2001 license agreement, as amended,
between the Plaintiffs or any other agreements between the Plaintiffs.

 

12. AMENDMENTS

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

 

13. DESCRIPTIVE HEADINGS

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

 

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14. THIRD PARTY BENEFIT

None of the provisions of this Settlement Agreement shall be for the benefit of,
or enforceable by, any third party.

 

15. COUNTERPARTS

This Settlement Agreement may be executed in any number of signature page
counterparts transmitted via facsimile or as a scanned document transmitted via
email, any one of which need not contain the signature of more than one Party
but all such counterparts taken together shall constitute one and the same
Settlement Agreement.

 

16. ACKNOWLEDGEMENT

Each Party acknowledges that such Party has read this entire document, fully
understands its terms and effects, has consulted with its own independent
counsel in relation hereto and has had all such Party’s questions answered by
such counsel.

 

17. CONSTRUCTION AND INTERPRETATION

The Parties and their respective counsel have had an opportunity to fully
negotiate, draft, review and edit the language of this Settlement Agreement. No
presumption or burden of proof will arise favoring or disfavoring any Party by
virtue of the authorship of any provision of this Settlement Agreement. No prior
draft of this Settlement Agreement will be used in the interpretation or
construction of this Settlement Agreement.

 

18. NO ASSIGNMENT

No rights under this Settlement Agreement will be assignable.

 

19. RELIEF IN THE EVENT OF BREACH

Par, for itself and its Affiliates, acknowledges and agrees that the
restrictions set forth herein on the manufacture, use, sale, offer to sell,
importation and distribution of the Par generic Zegerid capsules and powder are
reasonable and necessary to protect the legitimate interests of each of the
Plaintiffs and Plaintiffs would not have entered into this Settlement Agreement
in the absence of such restrictions, and that any material breach of those
restrictions will result in irreparable injury to Plaintiffs for which there
will be no adequate remedy at law. Accordingly, if Par or an Affiliate
materially breaches any of its undertakings under this Settlement Agreement, in
addition to any other remedy the Plaintiffs may have at law or in equity, Par
agrees that Plaintiffs shall be entitled to a preliminary injunction to prevent
the continuance of such breach, and that Plaintiffs will not be required to
demonstrate that the balance of hardships supports the entry of injunctive
relief in order to obtain such relief. Further, in the event that Par or an
Affiliate materially breaches its undertakings under this Settlement Agreement,
each of the Plaintiffs reserves, and Par and its Affiliates shall not contest,
their right(s) to seek damages and any other remedies for patent infringement to
the full extent of the law.

 

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20. NOTICES

All notices, requests, demands, or other communications under this Settlement
Agreement shall be in writing. Notice shall be sufficiently given (and shall be
deemed to be duly given upon receipt) by delivery in person, by facsimile or by
overnight delivery service maintaining records of receipt to the respective
Parties at the addresses specified below, or in each case such other address as
such Party may hereafter specify by notice to the other Party. Addresses for
purpose of giving notice are as follows:

If to Santarus:

Santarus, Inc.

c/o Salix Pharmaceuticals, Inc.

Attn: General Counsel

8510 Colonnade Center Drive

Raleigh, North Carolina 27615

With copies (which shall not constitute notice) to:

Santarus, Inc.

c/o Salix Pharmaceuticals, Inc.

Attn: Executive Vice President Business Development

8510 Colonnade Center Drive

Raleigh, North Carolina 27615

E-Mail: rick.scruggs@salix.com

If to the University:

The Curators of the University of Missouri

Office of the General Counsel

227 University Hall

Columbia, MO 65221

Fax No.: 573-882-0050

If to Par:

Par Pharmaceutical, Inc.

Attn: General Counsel

300 Tice Boulevard

Woodcliff Lake, NJ 07677

Fax No.: 201-802-4600

SIGNATURES FOLLOW ON NEXT PAGE

 

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IN WITNESS WHEREOF, each of the Parties has caused this Settlement Agreement to
be executed by its duly authorized representative as of the day and year first
above written.

 

SANTARUS, INC.,   By      

/s/ William C. Bertrand

  Name:   William C. Bertrand   Title:   General Counsel and Secretary THE
CURATORS OF THE UNIVERSITY OF MISSOURI,   By      

/s/ Tim Wolfe

  Name:   Tim Wolfe   Title:   President SALIX PHARMACEUTICALS, INC.,   By      

/s/ William C. Bertrand

  Name:   William C. Bertrand   Title:   Senior Vice President and General
Counsel PAR PHARMACEUTICAL, INC.,   By      

/s/ Paul Campanelli

  Name:   Paul Campanelli   Title:   Chief Executive Officer

 

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EXHIBIT A: STIPULATION OF DISMISSAL

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

 

SANTARUS, INC., a Delaware corporation, and THE CURATORS OF THE UNIVERSITY OF
MISSOURI, a public corporation and body politic of the State of Missouri,

 

Plaintiffs,        

 

v.        

 

PAR PHARMACEUTICAL, INC., a Delaware corporation,

 

Defendant.        

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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C.A. No. 07-551-GMS

 

[Consolidated]

STIPULATION OF DISMISSAL

Plaintiffs SANTARUS, INC. and THE CURATORS OF THE UNIVERSITY OF MISSOURI and
Defendant PAR PHARMACEUTICAL, INC. hereby stipulate by and through their
respective attorneys that all claims and defenses in the above-entitled action
are dismissed with prejudice pursuant to Rule 41(a) of the Federal Rules of
Civil Procedure.

SO STIPULATED:

Dated:                                         

 

     

 

     

 

   

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MORRIS, NICHOLS, ARSHT & TUNNELL LLP

Jack B. Blumenfeld (#1014)

Maryellen Noreika (#3208)

Stephen Kraftschik (#5623)

1201 North Market Street

P.O. Box 1347

Wilmington, DE 19899-1347

(302) 658-9200

jblumenfeld@mnat.com

mnoreika@mnat.com

skraftschik@mnat.com

 

Counsel for Plaintiffs Santarus, Inc. and The Curators of the University of
Missouri

 

OF COUNSEL:

 

For Plaintiff Santarus, Inc.:

 

IRELL & MANELLA LLP

Morgan Chu

Gary Frischling

Laura Seigle

Amy Proctor

1800 Avenue of the Stars, Suite 900

Los Angeles, CA 90067

(310) 277-1010

mchu@irell.com

gfrischling@irell.com

lseigle@irell.com

aproctor@irell.com

 

For Plaintiff The Curators of the University of Missouri:

 

MAYER BROWN LLP

Joseph Mahoney

Jonathan Kim

71 South Wacker Drive

Chicago, IL 60606

(312) 782-0600

jamahoney@mayerbrown.com

jkim@mayerbrown.com

  

RICHARDS, LAYTON & FINGER, P.A.

Frederick L. Cottrell (#2555)

Steven J. Fineman (#4025)

Katharine C. Lester (#5629)

One Rodney Square

P.O. Box 551

Wilmington, DE 19899

(302) 651-7700

cottrell@rlf.com

fineman@rlf.com

lester@rlf.com

 

Counsel for Defendant Par Pharmaceutical, Inc.

 

OF COUNSEL:

 

ARENT FOX LLP

Janine A. Carlan

Arthur S. Beeman

Aziz Burgy

Taniel E. Anderson

Jason S. Madden

1717 K Street, N.W.

Washington DC 20036

(202) 857-6000

janine.carlan@arentfox.com

arthur.beeman@arentfox.com

aziz.burgy@arentfox.com

taniel.anderson@arentfox.com

jason.madden@arentfox.com

 

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