exv10w13w1






EXHIBIT 10.13.1




     XXXXX 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.



[LETTERHEAD OF TEVA PHARMACEUTICALS CURACAO N.V.]




October 8, 2003




VIA FACSIMILE AND REGULAR MAIL




Impax Laboratories, Inc.

3753 Castor Avenue

Philadelphia, PA 19124




Attention: Barry Edwards, Co-CEO





			
	Re:	 	Strategic Alliance Agreement between Impax Laboratories, Inc. and Teva

Pharmaceuticals Curacao N.V. effective June 27, 2001 (“Agreement”).





Dear Barry:




     As you know, Teva Pharmaceuticals Curacao N.V. (“Teva”) exercised its option under Section 4.1
of the Agreement to add the Optional Products (Omeprazole DR, 10, 20 and 40 mg) to the Agreement as
Tier 1 Products. The Omeprazole 40 mg is specifically excluded from this letter agreement. All
defined terms used herein shall have the same meaning as set forth in the Agreement.



     This will confirm that only with respect to the Optional Products for the Territory of the
U.S., the Parties have agreed to the following:




	 	(a)	 	During the period set forth in the table below, the Impax Margin shall be in an
amount set forth opposite each period:











	 	 	 
	PERIOD	 	IMPAX MARGIN
	Commencing on the Launch Date and ending eighteen
(18) months from the Launch Date

	 	XXXXX% of the Profit
	 
	 	 
	Commencing eighteen (18) months from the Launch Date
and ending twenty-four (24) months from the Launch
Date

	 	XXXXX% of the Profit
	 
	 	 
	Commencing twenty-four (24) months from the Launch
Date and thereafter

	 	XXXXX% of the Profit










	 	(b)	 	For purposes of Section 12 of the Agreement, Impax further represents and
warrants that:














 












	 	(1)	 	prior to filing its ANDA for the Optional Products, it obtained
an objectively reliable written opinion of independent and competent outside
counsel that each of the Orange Book patents with respect to the Optional
Products was invalid, unenforceable, or would not be infringed by the
manufacture, use, sale, offer for sale in the U.S., or importation into the
U.S. of Impax’s omeprazole formulation;
	 
	 	(2)	 	it has obtained an updated written opinion regarding U.S.
patents 4,786,505 and 4,853,230, reflecting the claim construction adopted by
the Southern District of New York in AstraZeneca v. Andrx et al., dated
October 16, 2002, and reported at 222 F.Supp.2d 423 (SDNY 2002);
	 
	 	(3)	 	it has obtained an objectively reliable written opinion of
independent and competent outside counsel that U.S. patent 6,013,281 is
invalid, unenforceable, or would not be infringed by the manufacture, use,
sale, offer for sale in the U.S., or importation into the U.S. of Impax’s
omeprazole formulation;
	 
	 	(4)	 	it actually relied upon the opinion referred to in subparagraph
(1), above in deciding whether to file an ANDA containing a paragraph IV
certification with respect to each of the Orange Book listed patents with
respect to the Optional Products; and
	 
	 	(5)	 	it actually relied upon the opinions referred to in
subparagraphs (1), (2) and (3), above in deciding whether to make, use, sell or
offer to sell the Optional Products within the U.S. prior to the expiration of
each of the relevant patents.






	 	(c)	 	Only upon the commencement or amendment of any Intellectual Rights Suit,
directly arising from the launch of the Optional Products in the U.S. by Teva and/or
its Affiliates, Sections 11.5, 14.1, 15.3 and 15.4 of the Agreement shall not apply and
the following shall apply instead:






	 	(1)	 	Teva shall have the obligation to assume direction and control
of any such Intellectual Rights Suit directly arising from the launch of the
Optional Products in the U.S. by Teva and/or its Affiliates as well as any
pending or future intellectual property suit involving the same patents at
issue in such Intellectual Rights Suit (collectively referred to herein as the
“Optional Product Launch Litigation”) and the defense of claims arising
therefrom, including without limitation, the selection of legal counsel;
provided, however, that Teva shall obtain the prior written consent of Impax
prior to ceasing to defend, settling or otherwise disposing of any such
Optional Product Launch Litigation, said consent not to be unreasonably
withheld or delayed. Furthermore, Teva shall provide Impax with copies of all
pleadings and other litigation documents and




2









 






	 	 	 	shall consult with Impax in connection with litigation strategy. Impax
shall fully cooperate with Teva in the defense or prosecution of any such
Optional Product Launch Litigation (regardless of which Party is a named
party to that litigation). Subject to the last sentence of subparagraph (2)
below, Teva shall bear one-hundred percent (100%) of all Intellectual Rights
Legal Expenses in connection with the defense and/or arising out of a
judgment or settlement of any Optional Product Launch Litigation.
	 
	 	(2)	 	Teva shall indemnify, defend and hold harmless Impax for any
Intellectual Rights Legal Expenses of any Optional Product Launch Litigation to
the extent not attributable in whole or in part to any untrue representation or
warranty of Impax or breach of a covenant made by Impax hereunder or under the
Agreement. Further, in such case, fifty percent (50%) of any Intellectual
Rights Legal Expenses paid by Teva in connection with any Optional Product
Launch Litigation, or the above indemnity, shall be set-off, credited or
reimbursed (“Set-Off”) against any Impax Margin or Revised Impax Margin related
to the Optional Products; provided, that the amount of the Set-Off shall in no
event exceed the Impax Margin or Revised Impax Margin related to the Optional
Products. Notwithstanding the foregoing, to the extent such Intellectual
Rights Legal Expenses are attributable in whole or in part to any untrue
representation or warranty of Impax or breach of a covenant made by Impax
hereunder or under the Agreement, then in such case Impax shall be responsible
for one hundred percent (100%) of all such Intellectual Rights Legal Expenses.
	 
	 	(3)	 	Each Party shall obtain the prior written consent of the other
Party prior to ceasing to defend, settling or otherwise disposing of any
intellectual property dispute related to the Optional Products. Each Party
further agrees that it will not whether in the context of litigation or
otherwise related thereto, without the prior written consent of the other
Party, enter into any agreement or arrangement with any third party which in
any way compromises, relinquishes, waives, or otherwise affects, in whole or in
part, the rights of the other Party.





     Also, this will confirm that the Parties have agreed that any payments due to Teva under
Section 2.15 of the Agreement for the 3rd and 4th Calendar Quarter of 2003
shall be made to Teva on or before May 14, 2004, without interest.







     Finally, this will also confirm that the Parties have agreed that for purposes of Section 14.6
of the Agreement, any insurance premiums of up to Seven Hundred Thousand U.S. Dollars (U.S. $700,000) per
year paid by Impax for product liability insurance coverage will be included in the Manufacturing
Costs for the Optional Products. Without derogating from Impax’s obligation under Section 14.6 of
the Agreement to maintain throughout the Term sufficient product liability insurance coverage to
satisfy its obligations under the Agreement, Teva hereby waives forever the provision in Section
14.6 of the Agreement requiring Impax specifically to increase on







3









 









January 1, 2004 its product liability insurance coverage to One Hundred and Fifty Million U.S. Dollars (U.S. $150,000,000).






     Except as otherwise specifically provided herein, the Agreement shall remain in full force and
effect.


     This letter amendment shall become effective as of November 1, 2003.


     Please sign below as an acknowledgement of the above and return a signed copy to me via
facsimile and the original by overnight mail.


Thank you.


	 	 	 	 	 
	 	Regards,



Teva Pharmaceuticals Curacao N.V.

 	 
	 	By:  	/s/ Ido Weinstein
 	 
	 	 	Ido Weinstein 	 
	 	 	Managing Director 	 
	 



	 	 	 	 	 
	Acknowledged and Agreed	 	 
	This 8th day of Oct., 2003	 	 
	 
	 	 	 	 
	Impax Laboratories, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Barry Edwards	 	 
	 

	 	 	 	 
	 

	 	Barry Edwards	 	 
	 

	 	Co-CEO
	 	 





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