exv10w3




Exhibit 10.3

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED.
ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.




LICENSE AND SETTLEMENT AGREEMENT




     THIS LICENSE AND SETTLEMENT AGREEMENT (this “Agreement”) dated as of September 21, 2010 (the
"Effective Date”) is entered into between Medicis Pharmaceutical Corporation, a Delaware
corporation with an address at 7720 North Dobson Road, Scottsdale, Arizona 85256 (together with its
Affiliates, collectively, “Medicis”), and Taro Pharmaceutical Industries Ltd., an Israeli
corporation with an address at Euro Park (Italy Building), Yakum Business Park, Yakum 60972, Israel
and Taro Pharmaceuticals U.S.A., Inc., a New York Corporation with an address of Three Skyline
Drive, Hawthorne, NY 10532, USA (together with their Affiliates, collectively, “Taro”).



     WHEREAS, Medicis has asserted various claims and causes of action against Taro in two actions
captioned Medicis Pharmaceutical Corporation v. Taro Pharmaceuticals U.S.A., Inc. and Taro
Pharmaceutical Industries, Ltd., Case No. C.A. No. 10-359-SLR, which is pending in the United
States District Court, District of Delaware (the “Delaware Action”) and Case No. 10-3594-LAK, which
is pending in the United States District Court, Southern District of New York (the “New York
Action”) (collectively, the “Litigations”).



     WHEREAS, Medicis and Taro seek to resolve the Litigations without further litigation;



     WHEREAS, Medicis is the owner of the Patent Rights (as defined below); and



     WHEREAS, Taro desires to receive a license under the Patent Rights and Medicis desires to
grant to Taro a license under the Patent Rights, all on the terms and conditions of this Agreement.



     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:



     1. DEFINITIONS.



          1.1 “Affiliate” means, with respect to any entity, any other entity that directly or
indirectly controls, is controlled by, or is under common control with, such entity. An entity
shall be regarded as in control of another entity if it owns, or directly or indirectly controls,
at least fifty percent (50%) of the voting stock or other ownership interest of the other entity,
or if it directly or indirectly possesses the power to direct or cause the direction of the
management and policies of the other entity by any means whatsoever.




          1.2 “ANDA” means an Abbreviated New Drug Application and any supplements thereto.




          1.3 “Bundled Products” means Generic Product sold or otherwise transferred or delivered to a
Third Party with one or more other products or services in circumstances where the price of the
Generic Product is either not shown separately on the invoice, or is shown as nil














 






(free of charge) on a separate document in relation to the Generic Product or to a portion of
the quantities of the Generic Product.




          1.4 “Confidential Information” means all non-public materials, information and data concerning
the disclosing party and its operations that is disclosed by the disclosing party to the receiving
party pursuant to this Agreement, orally or in written, electronic or tangible form, or otherwise
obtained by the receiving party through observation or examination of the disclosing party’s
operations. Confidential Information includes, but is not limited to, information about the
disclosing party’s financial condition and projections; business, marketing or strategic plans;
sales information, customer lists; price lists; databases; trade secrets; product prototypes and
designs; techniques, formulae, algorithms and other non-public process information.
Notwithstanding the foregoing, Confidential Information of a party shall not include that portion
of such materials, information and data that, and only to the extent, the recipient can establish
by written documentation: (a) is known to the recipient as evidenced by its written records before
receipt thereof from the disclosing party, (b) is disclosed to the recipient free of
confidentiality obligations by a Third Party who has the right to make such disclosure without
obligations of confidentiality, (c) is or becomes part of the public domain through no fault of the
recipient, or (d) the recipient can reasonably establish is independently developed by persons on
behalf of recipient without the use of the information disclosed by the disclosing party.




          1.5 “FDA” means the United States Food and Drug Administration or any successor entity
thereto.




          1.6 “GAAP” shall mean generally accepted accounting principles in effect in the United States
from time to time, as consistently applied by the applicable Party with regard to their own
products and/or the standards of the industry.




          1.7 “Generic Equivalent” means ***.




          1.8 “Generic Product” means ***.




          1.9 “Grantback Patents” means (a) ***, (b) all divisions, continuations,
continuations-in-part, that claim priority to, or common priority with, the patent applications
described in clause (a) above or the patent applications that resulted in the patents described in
clause (a) above, and (c) all patents that have issued or in the future issue from any of the
foregoing patent applications (including any modifications of such issued patents made by
reexamination, certificate of correction, or otherwise), together with any reissues or extensions
thereof.




          1.10 “License Trigger” means, with respect to a Generic Equivalent to a Vanos Product, the
earliest of the following dates:




               (a) December 15, 2013;



               (b) ***; and



               (c) ***.



2









 





          1.11 “Net Profits” means ***.




          1.12 “Patent Rights” means (a) the patents and patent applications listed on Exhibit A to this
Agreement, (b) all divisions, continuations, continuations-in-part, that claim priority to, or
common priority with, the patent applications described in clause (a) above or the patent
applications that resulted in the patents described in clause (a) above, and (c) all patents that
have issued or in the future issue from any of the foregoing patent applications (including any
modifications of such issued patents made by reexamination, certificate of correction, or
otherwise), together with any reissues or extensions thereof.




          1.13 “Product” means any product for which the making, using, selling or importation is
covered by one or more claims of the Patent Rights.




          1.14 “Territory” means the United States of America, its territories and possessions, ***.




          1.15 “Third Party” means any person or entity other than Medicis or Taro or their respective
Affiliates.




          1.16 “Valid Claim” means ***.




          1.17 “Vanos Products” means the Vanos products listed on Exhibit B, as such products are
marketed and sold by Medicis as of the Effective Date in the Territory.




          1.18 “Vanos Product Patents” means (a) ***, (b) all divisions, continuations and
continuations-in-part (solely to the extent directed to subject matter disclosed in a patent or
patent application described in clause (a) above) that (i) claim priority to, or common priority
with, the patent applications described in clause (a) above or the patent applications that
resulted in the patents described in clause (a) above and (ii) ***, and (c) all patents that issue
after the Effective Date from any of the foregoing patent applications, including utility, model
and design patents and certificates of invention, together with any reissues, renewals, extensions
or additions thereto.




     2. LICENSES; RELEASES.



          2.1 License Grant for Generic Product.




               2.1.1 Effective only upon the occurrence of the License Trigger for a Generic Product, Medicis
hereby grants to Taro a non-exclusive, non-transferable (except as permitted in Section 8.5)
license (without the right to grant sublicenses except to have Generic Products made on behalf of
Taro) under the Patent Rights to make, have made, use, offer for sale, sell and import such Generic
Products inside the Territory.



               2.1.2 Until the occurrence of the applicable License Trigger, neither Taro nor its Affiliates
shall, and neither shall directly or indirectly encourage or assist any Third Party to, develop,
make, use and/or commercialize any Products in the Territory.



3









 





               2.1.3 Nothing in this Agreement shall be construed as creating an obligation, express or
implied, on Medicis to supply any Product to Taro and Taro shall be solely responsible for
manufacturing, or having manufactured, its supply of Generic Product.



          2.2
***.




          2.3 Grantbacks.




               2.3.1 Taro and its Affiliates hereby grant to Medicis a perpetual, royalty-free, fully-paid
up, non-transferable (except as provided in Section 8.5), non-exclusive license (with the right to
grant sublicenses through multiple tiers) under the Grantback Patents to make, have made, use,
offer for sale, sell and import Products in the Territory.



               2.3.2 Taro and its Affiliates hereby grant to Medicis a perpetual, royalty-free, fully-paid
up, non-transferable (except as provided in Section 8.5), non-exclusive license (with the right to
grant sublicenses through multiple tiers) under the Vanos Product Patents to make, have made, use,
offer for sale, sell and import Vanos Products in the Territory.



          2.4 Validity of Patent Rights.




               2.4.1 Taro, on behalf of itself and its Affiliates, hereby admits that all issued claims of
the Patent Rights are valid and enforceable and all currently pending claims of the Patent Rights,
if issued, will be valid and enforceable. The foregoing admission regarding validity and
enforceability shall be binding upon Taro and its Affiliates and admissible against Taro and its
Affiliates in any dispute or litigation between the parties regarding the Patent Rights, and
neither Taro nor its Affiliates will challenge any such admission.



               2.4.2 Taro, on behalf of itself and its Affiliates, hereby also admits that the making, using,
offering to sell, selling, and/or importation into the Territory of a Generic Product is covered by
one or more claims of the Patent Rights under 35 U.S.C. § 271.



               2.4.3 Taro shall not assist any Third Party in an action to invalidate or render unenforceable
any of the Patent Rights, and Taro shall not disclose any of its proprietary or confidential
information relating to the validity or enforceability of any of the Patent Rights, except to the
extent required by court order or other applicable law.



               2.4.4 Taro shall not receive any ownership rights in the Patent Rights under this Agreement,
and Medicis shall retain the sole right, to prepare, prosecute, maintain and enforce the Patent
Rights.



          2.5 No Implied Licenses. Except as explicitly set forth in this Agreement, neither
party grants to the other party under its patents or other intellectual property any license,
express or implied. Taro shall not use Medicis’ name or any Medicis trademarks (including without
limitation Vanos®) in connection with the marketing, promotion or sale of any products without the
prior written consent of Medicis in each instance.




          2.6 Releases. In consideration of the mutual covenants herein and in the Stipulation
of Dismissal attached hereto as Exhibit C and the Notice of Dismissal attached hereto






4









 







as Exhibit D, and in both cases incorporated herein by reference, and without limiting any
remedies a party may have against the other party for a breach of this Agreement, Taro hereby
releases and agrees to release Medicis, and Medicis hereby releases and agrees to release Taro from
all claims arising out of the Litigations. Upon the Effective Date, (a) Taro and Medicis shall
cause to be completed, executed and filed in the Delaware Action a stipulated dismissal with
prejudice of that action, in the form of the Stipulation of Dismissal attached hereto as Exhibit C,
and to seek entry of such order by the court and (b) Medicis shall cause to be completed, executed
and filed in the New York Action a dismissal with prejudice of that action in the form of the
Notice of Dismissal attached hereto as Exhibit D. ***.




     3. FINANCIAL CONSIDERATIONS.



          3.1 Royalty.




               3.1.1 Within *** following the end of each calendar quarter during the term of this Agreement,
Taro shall pay to Medicis a royalty equal to *** of all *** received during such calendar quarter
for Generic Product. ***. Medicis’s right to receive a share of the *** under this Section 3.1.1
shall expire upon the expiration, cancellation, invalidation, disclaimer or abandonment (whichever
comes first) of the last Valid Claim.



               3.1.2 Within *** following the end of each calendar quarter during the term of this Agreement,
Taro shall provide to Medicis a written report stating the number and description of all Generic
Product sold during the relevant calendar quarter; the gross sales associated therewith; the
calculation of *** thereon, and the royalties that will be payable for such calendar quarter in
accordance with Section 3.1.1.



               3.1.3 ***.



          3.2 Taxes. Taro shall be responsible for, and may withhold from payments made to
Medicis under this Agreement, any taxes required to be withheld by Taro under applicable law.
Accordingly, if any such taxes are levied on such payments due hereunder (“Withholding Taxes”),
Taro shall (i) deduct the Withholding Taxes from the payment amount, (ii) pay all applicable
Withholding Taxes to the proper taxing authority, and (iii) send evidence of the obligation
together with proof of tax payment to Medicis within *** following that tax payment.




          3.3 Audit Rights. Not more than once per calendar year during the portion of the term
of this Agreement during which Taro shall pay Medicis royalties, on no less than thirty (30)
business days notice from Medicis, Taro shall make all such records, books of account, information
and data concerning (a) its sales of Generic Products pursuant to this Agreement; (b) its
manufacture of any Generic Products, and (iii) to the extent in its possession, the manufacture of
Generic Products on behalf of Taro by its Third Party contract manufacturer, in each case available
for inspection during normal business hours by an independent auditor selected by Medicis and
reasonably acceptable to Taro for the purpose of an audit to determine the accuracy of the reports
delivered and amounts paid by Taro pursuant to Section 3.1. Medicis shall be solely responsible
for its costs in making any such audit, unless Medicis identifies a discrepancy in favor of Taro in
the calculation of the share of *** paid to Medicis under this Agreement in any calendar






5









 







year from those properly payable for that calendar year of *** or greater, in which event Taro
shall be solely responsible for the reasonable cost of such audit and pay Medicis any underpayment.




     4. TERM AND TERMINATION.



          4.1 Term. Subject to Section 4.2, this Agreement shall expire on the date when there
are no Valid Claims in the Territory; provided, however, that if there are no valid, issued patents
within the Patent Rights, but there are at such time pending patent applications within the Patent
Rights, then subject to the terms and conditions of this Agreement, the term of this Agreement
shall continue for the pendency of such pending patent applications.




          4.2 Termination for Cause. Either party may terminate this Agreement upon or after
the material breach of any material provision of this Agreement by the other party if the other
party has not cured such breach within *** after receipt of express written notice thereof by the
non-breaching party.




          4.3 Effect of Expiration or Termination. Expiration or termination of this Agreement
shall not relieve the parties of any obligation accruing prior to such expiration or termination,
and the provisions of Sections 2.2, 2.3, 2.4, 2.6, 3.3, 4.3, 5, 7 and 8 shall survive the
expiration or termination of this Agreement.




     5. CONFIDENTIALITY.



          5.1 Confidentiality. For a period of *** following the expiration or earlier
termination of this Agreement, except with respect to any Confidential Information constituting and
identified as a trade secret in which case the receiving party’s obligation continues in
perpetuity, provided such receiving party has been informed as to the status of such Confidential
Information as a trade secret, each party shall maintain in confidence all Confidential Information
disclosed by the other party, and shall not use, grant the use of or disclose to any Third Party
the Confidential Information of the other party other than as expressly permitted hereby. Each
party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the
other party’s Confidential Information.




          5.2 Permitted Disclosures. Either party may disclose Confidential Information of the
disclosing party (a) on a need-to-know basis, to such party’s directors, officers and employees to
the extent such disclosure is reasonably necessary in connection with such party’s activities as
expressly authorized by this Agreement, and (b) to those agents and consultants, and contract
manufacturers who need to know such information to accomplish the purposes of this Agreement
(collectively, “Permitted Recipients”); provided such Permitted Recipients are bound to maintain
such Confidential Information in confidence at least to the same extent as set forth in
Section 5.1.




          5.3 Litigation and Governmental Disclosure. Each party may disclose Confidential
Information of the other party to the extent such disclosure is reasonably necessary for
prosecuting or defending litigation, complying with a court order or applicable law, governmental
regulations or investigation, provided that if a party is required by law or regulation to make any
such disclosure of the other party’s Confidential Information it will give reasonable advance
notice to the other party of such disclosure requirement and will use good faith efforts to






6









 







assist such other party to secure a protective order or confidential treatment of such
Confidential Information required to be disclosed.




          5.4 Limitation of Disclosure. The parties agree that no information concerning this
Agreement and the transactions contemplated herein shall be made public by either party without the
prior written consent of the other, except (i) as otherwise may be required by applicable laws,
regulations, rules or orders, including without limitation the rules and regulations promulgated by
the United States Securities and Exchange Commission, the Department of Justice and the Federal
Trade Commission, or any regulations of any national securities exchange, (ii) disclosures to the
United States Patent and Trademark Office for the purposes of supporting the Patent Rights, and
(iii) except as may be authorized in Section 5.5.




          5.5 Publicity. Neither party shall make any publicity releases, interviews or other
non-confidential dissemination of information concerning this Agreement or its terms, or either
party’s performance hereunder, to communication media, financial analysts or others without the
prior written approval of the other party, which approval shall not be unreasonably withheld,
delayed or conditioned. Notwithstanding anything to the contrary in this Agreement, the parties
understand and agree that either party, may, if so required, disclose some or all of the
information included in this Agreement or other Confidential Information of the other party (a) in
order to comply with its obligations under the law, including the United States Securities Act of
1933 and the United States Securities Exchange Act of 1934; (b) in order to comply with the listing
standards or agreements of any national or international securities exchange or The NASDAQ Stock
Market or New York Stock Exchange or other similar laws of a governmental authority; (c) to respond
to an inquiry of a governmental authority or regulatory authority as required by law; or (d) in a
judicial, administrative or arbitration proceeding. In any such event the party making such
disclosure shall (i) provide the other party with as much advance notice as reasonably practicable
of the required disclosure, (ii) cooperate with the other party in any attempt to prevent or limit
the disclosure, and (iii) limit any disclosure to the specific purpose at issue. In connection
with any filing of a copy of this Agreement with the Securities and Exchange Commission, the filing
party shall endeavor to obtain confidential treatment of economic and trade secret information, and
shall keep the other party informed as the planned filing (including, but not limited to providing
the other party with the proposed filing reasonably in advance of making the planned filing) and
consider the requests of the other party regarding such confidential treatment.




          5.6 Legal Compliance. Notwithstanding anything to the contrary in this Agreement, the
Parties shall submit this Agreement and all necessary settlement documents to the appropriate
personnel at the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of
Justice (“DOJ”) as soon as practicable after the Effective Date. To the extent that any legal or
regulatory issues or barriers arise with respect to the Agreement, or any subpart thereof, the
parties shall work together in good faith and use reasonable efforts to modify the Agreement to
address any such legal or regulatory issues (including for example any objections by the FTC or
DOJ) while maintaining the material terms of the transaction. Should the FTC or DOJ, as the case
may be, object to any such modifications, the parties agree to continue to work together in good
faith and use reasonable efforts to modify, as many times as necessary, the Agreement as required
above in this section.



7









 





     6. REPRESENTATIONS AND WARRANTIES.



          6.1 Representations. Each party hereby represents and warrants to the other party
that (a) the person executing this Agreement is authorized to execute this Agreement; (b) this
Agreement is legal and valid and the obligations binding upon such party are enforceable by their
terms; and (c) the execution, delivery and performance of this Agreement does not conflict with any
agreement, instrument or understanding, oral or written, to which such party may be bound, nor
violate any law or regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.




          6.2 Compliance with Law. Taro shall comply with all applicable laws and regulations
with respect to obtaining regulatory approval for the sale of Generic Products and its manufacture,
sale and commercialization of Generic Products.




          6.3 Disclaimer of Warranties. Except for those warranties expressly set forth in this
Agreement, neither party makes any warranty, written, oral, express or implied, with respect to
this Agreement. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT
HEREBY ARE DISCLAIMED BY BOTH PARTIES.




          6.4 Limitation of Liability. WITH THE EXCEPTION OF DAMAGES RESULTING FROM A PARTY’S
BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT OR ITS OBLIGATIONS UNDER SECTION 7,
OR A BREACH BY TARO OF SECTIONS 2.1.2 OR 2.4, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE
FOR LOSS OF USE OR PROFITS OR OTHER COLLATERAL, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE
DAMAGES IN CONNECTION WITH THIS AGREEMENT, WHETHER SUCH CLAIMS ARE FOUNDED IN TORT OR CONTRACT.




          6.5 Equitable Relief. Taro acknowledges and agrees that its obligations and
undertakings under this Agreement are reasonable and necessary to protect the legitimate interests
of Medicis, that Medicis would not have entered into this Agreement in the absence of such
provisions, and that Taro’s threatened breach or failure to comply with Section 2.4 of this
Agreement shall cause Medicis significant and irreparable harm, the amount of which shall be
extremely difficult to estimate and ascertain, and for which money damages shall not be adequate.
Taro further acknowledges and agrees that Medicis shall have the right to apply to any court of
competent jurisdiction for an injunction order restraining any breach or threatened breach of this
Agreement and specifically enforcing the terms and provisions of this Agreement, without the
necessity of posting any bond or security, in addition to seeking any other remedy available to
Medicis in law or equity.




     7. INDEMNIFICATION.



               7.1 ***.



               7.2 ***.



8









 





          7.3 Obligations. A party which intends to claim indemnification under this Section 7
(the “Indemnified Party") shall promptly notify the other party (the “Indemnifying Party") in
writing of any claim, demand, action, or other proceeding in respect of which the Indemnified Party
intends to claim such indemnification; provided, however, that failure to provide such notice
within a reasonable period of time shall not relieve the Indemnifying Party of any of its
obligations hereunder except to the extent the Indemnifying Party is prejudiced by such failure.
The Indemnified Party shall permit the Indemnifying Party, at its discretion, to settle any such
action, claim or other matter. Notwithstanding the foregoing, the Indemnifying Party shall not
enter into any settlement that would adversely affect the Indemnified Party’s rights hereunder, or
impose any obligations on the Indemnified Party in addition to those set forth herein, in order for
it to exercise such rights, without the Indemnified Party’s prior written consent, which shall not
be unreasonably withheld or delayed. No such action, claim or other matter shall be settled
without the prior written consent of the Indemnifying Party, which shall not be unreasonably
withheld or delayed. The Indemnified Party shall reasonably cooperate with the Indemnifying Party
and its legal representatives in the investigation and defense of any claim, demand, action, or
other proceeding covered by the indemnification obligations of this Section 7. The Indemnified
Party shall have the right, but not the obligation, to be represented in such defense by counsel of
its own selection and at its own expense. 




     8. GENERAL PROVISIONS.



          8.1 Notices. All notices hereunder shall be delivered by facsimile (confirmed by
overnight delivery), or by overnight delivery with a reputable overnight delivery service, to the
following address of the respective parties:




	 	 	 

	If to Medicis:

	 	Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attn: Chief Executive Officer

Facsimile: 480-291-5175
	 
	 	 
	with a copy to:

	 	Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attn: General Counsel

Facsimile: 480-291-8508






9









 






	 	 	 	 

	 	If to Taro:

	 	Taro Pharmaceuticals U.S.A., Inc.

3 Skyline Drive

Hawthorne, NY 10532

Attn: Chief Executive Officer

Facsimile: 914-345-9719
	 
	 	 
	 	with a copy to:

	 	Taro Pharmaceuticals U.S.A., Inc.

3 Skyline Drive

Hawthorne, NY 10532

Attn: General Counsel

Facsimile: 914-345-9285
	 
	 	 
	 	with a copy to:

	 	Taro Pharmaceutical Industries Ltd.

Euro Park (Italy Building), Yakum Business Park

Yakum 60972, Israel

Attn: General Counsel

Facsimile: +972-9-955-7443






     Notices shall be effective on the day of receipt. A party may change its address listed above
by notice to the other party given in accordance with this Section 8.1.



          8.2 Entire Agreement. The parties hereto acknowledge that this Agreement sets forth
the entire agreement and understanding of the parties and supersedes all prior written or oral
agreements or understandings with respect to the subject matter hereof. No modification of any of
the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in
writing and signed by an authorized agent or representative of both parties hereto. No course of
dealing or usage of trade shall be used to modify the terms and conditions herein. This Agreement
shall be binding on each of Taro and Medicis and their respective permitted successors and assigns.




          8.3 Waiver. None of the provisions of this Agreement (including the Exhibits hereto)
shall be considered waived by any party hereto 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 shall not be deemed a waiver of any rights of any party hereto.




          8.4 Obligations to Third Parties. Each party warrants and represents that this
Agreement does not conflict with any contractual obligations, expressed or implied, undertaken with
any Third Party.




          8.5 Assignment. Neither party shall assign this Agreement or any part hereof or any
interest herein (whether by operation of law or otherwise) to any Third Party (or use any
subcontractor) without the written approval of the other party; provided, however, that either
party may assign this Agreement without such consent (i) to any Affiliate; and (ii) in the case of
a merger, consolidation, change in control or sale of all or substantially all of the assets of the
party relating to this Agreement and the resulting entity assumes all of the obligations under this






10









 







Agreement. No assignment shall be valid unless the permitted assignee(s) assumes all
obligations of its assignor under this Agreement. No assignment shall relieve any party of
responsibility for the performance of its obligations hereunder. Any purported assignment in
violation of this Section 8.5 shall be void.




          8.6 Independent Contractor. Taro and Medicis are acting under this Agreement as
independent contractors and neither shall be considered an agent of, or joint venturer with, the
other. Unless otherwise provided herein to the contrary, each party shall furnish all expertise,
labor, supervision, machining and equipment necessary for the performance of its obligations
hereunder and shall obtain and maintain all building and other permits and licenses required by
public authorities.




          8.7 Governing Law. In any action brought regarding the validity, construction and
enforcement of this Agreement, it shall be governed in all respects by the laws of the State of
Delaware, without regard to the principles of conflicts of laws.




          8.8 Severability. If any term or provision of this Agreement shall for any reason be
held invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this Agreement shall be
interpreted and construed as if such term or provision, to the extent the same shall have been held
to be invalid, illegal or unenforceable, had never been contained herein.




          8.9 Headings, Interpretation. The headings used in this Agreement are for convenience
only and are not part of this Agreement.




          8.10 Counterparts. The Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.




          8.12 No Prejudice. If at any time this Agreement is rendered null and void with
respect to the Territory or any portion thereof, or if either of Taro or Medicis cannot fulfill its
obligations with respect to this Agreement, it is the intent of the parties that neither party will
be in any way prejudiced with respect to its claims, causes of action, defenses and counterclaims
in the Litigations in such jurisdiction or otherwise and, except as provided herein or therein, no
consent judgment, order or dismissal entered by either party pursuant to this Agreement in the
Territory or portion thereof, as applicable, will be deemed an admission on the part of such party.




[Remainder of this page intentionally blank]






11









 







IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their
duly-authorized representatives effective as of the Effective Date.




	 	 	 	 	 	 	 

	TARO PHARMACEUTICAL
INDUSTRIES LTD.	 	MEDICIS PHARMACEUTICAL CORPORATION
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 





	 	 	 	 	 
	TARO PHARMACEUTICALS U.S.A., INC.

 	 
	 
	By:  	 	 
	 
	Name:  	 	 
	 
	Title:  	 	 



12









 







EXHIBIT A




Patent Rights



	 	 	 
	Patents	 	Pending Applications (all U.S.)
	***

	 	***






***












A-1









 








EXHIBIT B




Vanos Products



	 	 	 
	PRODUCT	 	NDC
	Vanos (fluocinonide cream 0.1%) 30g
	 	99207-0525-30
	Vanos (fluocinonide cream 0.1%) 60g
	 	99207-0525-60
	Vanos (fluocinonide cream 0.1%) 120g
	 	99207-0525-10






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EXHIBIT C




Stipulation and Order of Dismissal (Delaware)



IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE



MEDICIS PHARMACEUTICAL CORPORATION,





     Plaintiff,




     v.


TARO PHARMACEUTICAL U.S.A., INC., AND TARO PHARMACEUTICAL INDUSTRIES, LTD.,





     Defendants. )


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C.A. No. 10-359 (SLR)




STIPULATION AND ORDER OF DISMISSAL




     Whereas Plaintiff Medicis Pharmaceutical Corporation (“Medicis”) brought this action asserting
infringement of United States Patent Nos. 6,765,001, 7,220,424 and 7,217,422 (the “Medicis
Patents”);



     Whereas Taro Pharmaceutical U.S.A., Inc. submitted to the U.S. Food and Drug Administration
Abbreviated New Drug Application (“ANDA”) No. 20-734 (the “Taro ANDA)













 




seeking approval to market and sell a generic fluocinonide cream USP, 0.1%, (the “Taro
Product”);




     Whereas Taro Pharmaceutical U.S.A., Inc. and Taro Pharmaceutical Industries, Ltd.
(collectively “Taro”) and Medicis are parties to litigation in this Court and the United States
District Court for the Southern District of New York relating to the Taro ANDA and the Medicis
Patents, before the expiration of the Medicis Patents (the “Litigations”);



     Whereas Medicis and Taro have entered into a License and Settlement Agreement pursuant to
which the parties have resolved the Litigations;



     Whereas final settlement of the Litigations serves the public interest by saving judicial
resources and avoiding the risks and uncertainties to Medicis and Taro associated with litigation;



     Whereas final settlement of the Litigations will permit Medicis and Taro to save litigation
costs, as well as adhere to the judicially recognized mandate that encourages the settlement of
litigation whenever possible.


NOW, THEREFORE, Medicis and Taro stipulate that:





	 	1.	 	Taro, on behalf of itself and its subsidiaries and affiliates, admits that the
Taro Product that is the subject of the Taro ANDA would, in the absence of the license
granted by Medicis in the License and Settlement Agreement, infringe the Medicis
Patents.
	 
	 	2.	 	Taro, on behalf of itself and its subsidiaries and affiliates, admits that the
Medicis Patents are valid and enforceable.
	 
	 	3.	 	All claims and counterclaims in the Litigations are dismissed with prejudice.
	 
	 	4.	 	Except as set forth in the License and Settlement Agreement, each party shall
bear its own costs, expenses and attorneys’ fees in connection with this action.




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	 	5.	 	The parties waive any right of appeal from this Stipulation and Order.
	 
	 	6.	 	This Court shall retain jurisdiction of this action and over Medicis and Taro for purposes of
enforcement of the terms and obligations of this Stipulation and Order of Dismissal and the
parties’ License and Settlement Agreement.




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	 	Respectfully submitted:



MORRIS, NICHOLS, ARSHT & TUNNELL LLP

 	 
	 	/s/ Karen Jacobs Louden
 
	 
	 	Jack Blumenfeld (#1014) 	 
	 	Karen Jacobs Louden (#2881)

1201 N. Market Street

Wilmington, Delaware 19801

302-658-9200

jblumenfeld@mnat.com

klouden@mnat.com
 	 
	 
	 	OF COUNSEL:

Andrew M. Berdon

Robert B. Wilson

James E. Baker

QUINN EMANUEL URQUHART & SULLIVAN LLP

51 Madison Avenue, 22nd Floor

New York, New York 10010

212-849-7000 
 
	 
	 	William J. McNichol

REED SMITH

2500 One Liberty Place

1650 Market Street

Philadelphia, Pennsylvania 19103

(215) 851-8100

 	 
	 	Attorneys for Plaintiff Medicis Pharmaceutical Corporation



POTTER ANDERSON & CORROON LLP

 
	 	/s/ David E. Moore
 
	 
	 	Richard L. Horwitz (#2246) 	 
	 	David E. Moore (#3983)

Hercules Plaza, 6th Floor

1313 N. Market Street

Wilmington, Delaware  19899

Tel:  (302) 984-6000

rhorwitz@potteranderson.com

dmoore@potteranderson.com




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OF COUNSEL:

Tedd W. Van Buskirk

K&L GATES LLP

599 Lexington Avenue

New York, New York 10022

(212) 536-3900



Attorneys for Defendants Taro Pharmaceutical 

U.S.A., Inc. and Taro Pharmaceutical Industries, Ltd. 



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SO ORDERED:




This ________ day of _________________, 2010




	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	HONORABLE SUE L. ROBINSON 	 
	 	 	UNITED STATES DISTRICT COURT

DISTRICT OF DELAWARE 	 



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EXHIBIT D




Notice of Dismissal (New York)



IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK


MEDICIS PHARMACEUTICAL CORPORATION,






     Plaintiff,




     v.


TARO PHARMACEUTICAL U.S.A., INC., AND TARO PHARMACEUTICAL INDUSTRIES, LTD.,





     Defendants. )


)

)

)

)

)

)

)

)

)

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10 Civ. 3549 (LAK)




NOTICE OF DISMISSAL




     Pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure, Plaintiff Medicis
Pharmaceutical Corporation hereby dismisses with prejudice the above captioned action against
Defendants Taro Pharmaceutical U.S.A., Inc., and Taro Pharmaceutical Industries Ltd.



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	 	Respectfully submitted:


QUINN EMANUEL URQUHART & SULLIVAN LLP

 
	 	 /s/ Andrew M. Berdon
 
	 
	 	Andrew M. Berdon 	 
	 	Robert B. Wilson

James E. Baker

51 Madison Avenue, 22nd Floor

New York, New York  10010

212-849-7000

andrewberdon@quinnemanuel.com

robertwilson@quinnemanuel.com

jamesbaker@quinnemanuel.com 	 
	 
	 	OF COUNSEL:

William J. McNichol

REED SMITH

2500 One Liberty Place

1650 Market Street

Philadelphia, Pennsylvania 19103

(215) 851-8100



Attorneys for Plaintiff Medicis Pharmaceutical Corporation
 
	 




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