Exhibit 10.5







EXHIBIT 10.5





     XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH
CONFIDENTIAL TREATMENT WAS GRANTED. 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.



JOINT DEVELOPMENT AGREEMENT




     THIS JOINT DEVELOPMENT AGREEMENT (this “Agreement”) dated as of November 26, 2008 (the
“Effective Date”) is entered into between Medicis Pharmaceutical Corporation, a Delaware
corporation with offices located at 7720 North Dobson Road, Scottsdale, Arizona 85256 on behalf of
itself and its Affiliates (collectively, “Medicis”), and Impax Laboratories, Inc., a Delaware
corporation with offices located at 30831 Huntwood Avenue, Hayward, California 94544 on behalf of
itself and its Affiliates (collectively, “Impax”).



     WHEREAS, Medicis is the owner or otherwise has rights to certain patents, formulations and
know-how related to its minocycline products marketed as of the Effective Date under the trademark
Solodyn® (the “Original Products”);



     WHEREAS, Impax has the expertise and know-how to conduct a joint development program with
Medicis to create a next generation derivative of the Original Products and to research, develop
and commercialize certain generic drugs, and Impax has certain proprietary intellectual property
that will be useful to Medicis with respect to such next generation derivative of the Original
Products; and



     WHEREAS, Medicis desires to collaborate with Impax regarding the research and development of
(a) the next generation derivative of the Original Products, and (b) certain generic drugs in
exchange for a share of the Gross Profit (as defined below), 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 “XXXXX NDA” means the following NDA, which was approved prior to the Effective Date: NDA
#XXXXX.




          1.2 “XXXXX NDC” means the following NDCs: XXXXX.




          1.3 “XXXXX Products” means one or more products that are generic equivalents of the products
that are (a) marketed under the trademark XXXXX and (b) approved pursuant the XXXXX NDA or a
supplement thereto and/or sold under an XXXXX NDC, in each case at any strength, dosage or form;
provided that with respect to any obligations on Impax under Section 5.1.1 or Medicis’ milestone
payment obligations under Sections 6.2(e) or (f), “XXXXX Product” shall mean only the XXXXX mg
strength.




 









 








          1.4 “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.




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




          1.6 “ANDA Product” means each of the following products (including any future packaging
changes or pack sizes): (a) the XXXXX Products; (b) the XXXXX Products; (c) the XXXXX Products;
and (d) the XXXXX Products.




          1.7 “Authorized Product” means any product that is in the same form as a New Product approved
under a NDA held by Medicis or its sublicensee but is relabeled and marketed as a generic product.




          1.8 “Confidential Information” means all non-public materials, information and data concerning
the disclosing party and its operations that is disclosed the disclosing party to the receiving
party pursuant to the Confidentiality Agreement, this Agreement, the License Agreement or the
Distribution Agreement (as defined in the License 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.




          1.9 “Confidentiality Agreement” means the letter agreement dated February 24, 2008 from David
Greenbaum, counsel for Medicis Pharmaceutical Corporation, to Roger Chin, counsel for Impax
Laboratories, Inc.




          1.10 “Control” means with respect to any material, information, or intellectual property
right, that a party (a) owns such material, information, or intellectual property right, or (b) has
a license or right to use such material, information, or intellectual property right, in each case
with the ability to grant to the other party access, a right to use, a license, or a sublicense (as
applicable) to such material, information, or intellectual property right on the terms and




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conditions set forth herein, without violating the terms of any agreement or other arrangement
with any Third Party.




          1.11 “Cost of Sales” means, on a per ANDA Product basis and for a given calendar quarter, the
sum of the Manufacturing Costs, Distribution and Sales Costs, and Third Party IP Costs for such
ANDA Product sold during such calendar quarter.




          1.12 “Development Plan” means the plan for the research and development of the New Product,
which plan shall be consistent with Section 2.1, prepared by the parties and periodically updated
upon mutual written agreement of the parties.




          1.13 “Development Program” means the development program described in Section 2.1.




          1.14 “Diligent Efforts” means with respect to the research, development or commercialization
of a product, as applicable, efforts and resources commonly used in the pharmaceutical industry for
a product at a similar stage of research, development or commercialization, and having similar
market potential. Diligent Efforts shall be determined by taking into account the characteristics
of the product, the technical risk and stage of research, development, or commercialization of the
product, the cost-effectiveness of efforts or resources applied towards such product, the
competitiveness of alternative Third Party products that are or are expected to be in the relevant
marketplace, the regulatory and business environment, the likelihood of achieving the goal of such
research or of obtaining regulatory approval and product reimbursement (as applicable), the
profitability of the product (without taking into account any payments to be made to other party
pursuant to this Agreement) and the relative potential for product liability exposure. Diligent
Efforts shall be determined on a product and market basis, and it is anticipated that the level of
efforts and resources will change over time reflecting changes in the status of the product or the
market involved.




          1.15 “Distribution and Sales Costs” means, on a per ANDA Product basis and for a given
calendar quarter, (a) an amount equal to XXXXX% of Net Sales of such ANDA Product during such
quarter, which amount shall serve as an estimate of the costs for the distribution of such ANDA
Product by Impax for use or sale in the Territory, including freight, insurance and other costs of
shipping such ANDA Product, (b) an amount equal to XXXXX% of Net Sales of such ANDA Product in the
Territory during such quarter, which amount shall serve as an estimate of the costs of marketing,
selling and promoting such ANDA Product, and (c) the actual direct cost incurred with respect to
XXXXX.




          1.16 “XXXXX NDA” means the following NDA, which was approved prior to the Effective Date: NDA
#XXXXX.




          1.17 “XXXXX NDC” means the following NDCs: XXXXX.




          1.18 “XXXXX Products” means one or more products that are generic equivalents of the products
that are (a) marketed under the trademark XXXXX and (b) approved pursuant the XXXXX NDA or a
supplement thereto and/or sold under a XXXXX NDC, in each case at any strength, dosage or form;
provided that with respect to any obligations on Impax




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under Section 5.1.1, “XXXXX Product” shall mean only the XXXXX strengths and further provided
that Impax’s obligations under Section 5.1.2 and XXXXX Product, as defined below.




          1.19 “XXXXX Product” means the XXXXX Product.




          1.20 “Exclusion Lists” mean: (a) the HHS/OIG List of Excluded Individuals/Entities (available
through the Internet at http://www.oig.hhs.gov); and (b) the General Services
Administration’s List of Parties Excluded from Federal Programs (available through the Internet at
http://www.epls.gov).




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




          1.22 “FD&C Act” means the United States Federal Food, Drug and Cosmetic Act, as may be amended
from time to time.




          1.23 “Gross Profit” means, on a per ANDA Product basis and for a given calendar quarter, the
remainder, if any, that results from Net Sales of such ANDA Product in the Territory minus the Cost
of Sales of such ANDA Product. XXXXX.




          1.24 “Impax Know-How Rights” means all trade secret and other know-how rights in and to all
data, information, compositions and other technology (including, but not limited to, formulae,
procedures, protocols, techniques and results of experimentation and testing) which are necessary
or useful to make, use, develop or sell the New Product and which Impax Controls as of the
Effective Date or during the term of this Agreement; provided, however, that the foregoing shall
not apply to any trade secret or other know-how rights in and to all data, information,
compositions or other technology that that (a) is Controlled by an entity that becomes an Affiliate
of Impax as a result of such entity’s or its Affiliate’s acquisition of Impax and (b) was
Controlled by such entity prior to such acquisition.




          1.25 “Impax IP Rights” means the Impax Patent Rights and Impax Know-How Rights.




          1.26 “Impax Patent Rights” means all patents and patent applications (including utility, model
and design patents and certificates of invention) in any country of the world that claim or cover
the New Product or the manufacture or use thereof and that Impax (but not including any entity that
first becomes an Affiliate of Impax after the Effective Date) Controls as of the Effective Date or
during the term of this Agreement; provided, however, that the foregoing shall not apply to any
patent or patent application that (a) is Controlled by an entity that becomes an Affiliate of Impax
as a result of such entity’s or its Affiliate’s acquisition of Impax and (b) was Controlled by such
entity prior to such acquisition.




          1.27 “Ineligible Person” means a person who: (a) is currently excluded, debarred, suspended,
or otherwise ineligible to participate in the Federal health care programs or in Federal
procurement or non-procurement programs; or (b) has been convicted of a criminal offense that falls
within the ambit of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended, or
otherwise declared ineligible.




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          1.28 “License Agreement” means the License and Settlement Agreement between Medicis and Impax
dated as of the Effective Date.




          1.29 “Manufacturing Costs” means (a) the delivered cost to Impax of an ANDA Product for use or
sale in the Territory if a Third Party is the manufacturer of such ANDA Product, or (b) where Impax
is itself the manufacturer, the sum of Materials Costs, labor costs, Overhead and Freight And Taxes
incurred by Impax to produce such ANDA Product for use or sale in the Territory, including the
costs of rejected or failed batches of such ANDA Product. As used herein, “Materials Cost” means
Impax’s procurement costs for (i) raw materials (both active and inactive ingredients), and (ii)
packaging, labeling and storing materials, incurred in connection with the manufacture, testing,
labeling, purchasing and distribution of such ANDA Product; “Overhead” means all indirect costs of
manufacturing such ANDA Product including, without limitation, insurance, inspection, testing,
quality control and quality assurance, depreciation, maintenance and repair costs, all as
determined in accordance with the U.S. GAAP, and “Freight And Taxes” means all insurance, freight
and shipping charges, import taxes and duties and similar taxes and duties levied by the United
States or other government entity with jurisdiction, and port and loading charges, all to the
extent not already deducted under Distribution and Sales Costs.




          1.30 “NDA” means a New Drug Application as defined in the FD&C Act or FDA Regulations (21
CFR).




          1.31 “Net Sales” means, with respect to a given ANDA Product or New Product, the aggregate
gross price of such ANDA Product or New Product received, in the case of an ANDA Product, by Impax
or its sublicensees or, in the case of a New Product, by Medicis or its sublicensees (except with
respect to a sublicensee’s sales of Authorized Products), in each case from unaffiliated retailers,
distributors or other customers, less the sum of the following items, all of which must directly
relate to the sale and distribution of such ANDA Product or New Product and be determined in
accordance with GAAP applied in a manner consistent with past practices of the applicable party:
(a) returns, credits, rebates, discounts, allowances, promotional payments, free goods, chargebacks
and other price reduction programs customary to the trade or required by law, (b) actual packaging,
freight and insurance costs incurred in transporting such New Product in final form to customers
(this clause (b) shall not apply to ANDA Products, for which an allowance has already been
incorporated into Distribution and Sales Costs), (c) sales, valued-added and other taxes, (d)
customs duties, surcharges and other governmental charges, (e) administrative fees, marketing fees
and other similar fees, payments or credits paid to unaffiliated third parties customary to the
trade or required by law, and (f) commercially reasonable write-offs for doubtful accounts. Sales
between or among a party and its Affiliates shall not be included in Net Sales unless such party or
its Affiliates are the end user of such ANDA Product or New Product, as applicable.




          1.32 “New Product” means (a) a product that (i) contains XXXXX and (ii) is to be developed by
the parties under this Agreement with the goal of achieving the Target Product Profile, or (b) any
other product agreed to in writing by the parties to serve as a substitute for the product
described in subsection (a) above (in which case the product descried in subsection (a) shall cease
to be a “New Product”), in each case including any XXXXX.




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          1.33 “New Product Technology” means all discoveries, inventions, improvements and other
technology that is developed by Impax, Medicis or both in the conduct of the Development Program.




          1.34 “Non-Specific Technology” means any of the New Product Technology (including without
limitation manufacturing processes) that is not specific to the New Product.




          1.35 “XXXXX NDA” means the following NDA, which was approved prior to the Effective Date: NDA
#XXXXX.




          1.36 “XXXXX NDC” means the following NDCs: XXXXX.




          1.37 “XXXXX Products” means one or more products that are generic equivalents of the products
that are (a) marketed under the trademark XXXXX and (b) approved pursuant the XXXXX NDA or a
supplement thereto and/or sold under an XXXXX NDC, in each case at any strength, dosage or form;
provided that with respect to any obligations on Impax under Sections 5.1.1 and 5.1.2 and XXXXX
strength.




          1.38
“Oral Acne Field” means the treatment or palliation
of acne (including acne rosacea) through an oral administration.




          1.39 “Regulatory Approval” means, with respect to a particular regulatory jurisdiction, the
approval of a NDA or its equivalent in such regulatory jurisdiction by the applicable regulatory
authority in such regulatory jurisdiction and such other regulatory approvals as are required in
order to market the New Product in such regulatory jurisdiction.




          1.40 “XXXXX NDA” means the following NDA, which was approved prior to the Effective Date: NDA
#XXXXX.




          1.41 “XXXXX NDC” means the following NDCs: XXXXX.




          1.42 “XXXXX Products” means one or more products that are generic equivalents to the products
that are (a) marketed under the trademark XXXXX and (b) approved pursuant the XXXXX NDA or a
supplement thereto and/or sold under a XXXXX NDC, in each case at any strength, dosage or form;
provided that with respect to any obligations on Impax under Section 5.1.1 and XXXXX strength.




          1.43 “Steering Committee” means the committee composed of representatives of Impax and Medicis
described in Section 2.3 below.




          1.44 “Target Product Profile” means the product criteria set forth in Exhibit A.




          1.45 “Territory” means the United States of America including its territories and possessions.




          1.46 “Third Party” means any person or entity other than Medicis or Impax.




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          1.47 “Third Party IP Costs” means, on a per ANDA Product basis and for a given calendar
quarter, the royalties and other payments (including upfront fees and milestone payments) paid by
Impax to a Third Party in consideration for a license or other rights to intellectual property
necessary or useful for the manufacture, development, commercialization, use, or sale of such ANDA
Product in the Territory.




          1.48 “Valid Claim” means a claim in an issued patent, whether such patent issues before, on or
after the Effective Date, in the Impax Patent Rights or any issued patent owned by Medicis pursuant
to Section 3.3, in each case that has not: (a) expired or been canceled; (b) been declared invalid
by a decision of a court or other appropriate body of competent jurisdiction from which no appeal
has been timely taken or may be taken (e.g., as a result of denial of a petition for writ of
certiorari); (c) been admitted to be invalid or unenforceable through reissue or disclaimer,
provided that actions taken during reexamination shall not, prior to the issuance of a final
certificate of reexamination, be construed as admissions of invalidity or unenforceability of the
claims contained in such patent prior to the initiation of such reexamination; or (d) been
abandoned.




     2. DEVELOPMENT PROGRAM; STEERING COMMITTEE.



          2.1 Overview. The goal of the Development Program is to develop the New Product.
Each party’s obligations under the Development Program shall be as set forth in this Section 2.1 or
as agreed in writing by the parties after the Effective Date. Each party shall use commercially
reasonable efforts to timely conduct its obligations under the Development Programs in accordance
with the Development Plan. Subject to Medicis’ payment of the amount set forth in Section 6.1,
each party shall bear its own costs to conduct its obligations under the Development Program.
Impax shall use commercially reasonable efforts to use its proprietary technology in existence as
of the Effective Date to formulate a product that meets or approaches the Target Product Profile
and to perform standard in vitro analytic testing upon such resulting New Product to determine
whether it meets the Target Product Profile criteria. Without limiting the generality of the
foregoing, Impax shall perform no more than three (3) in vivo
pharmacokinetic studies upon such New Product to determine whether it
meets the Target Product Profile criteria. Impax shall also provide a reasonable amount of technical
advice to Medicis with respect to pre-clinical manufacturing scale up work for the New Product.
For clarity, Impax shall not have any obligation to (i) perform more
than three (3) in vivo pharmacokinetic studies in the course of
performing the Development Program, (ii) perform any manufacturing
scale up work for the New Product, (iii) manufacture the New
Product for clinical (except for the 3 pharmacokinetic studies
described above) or commercial use, (iv) make any filings with the FDA or any other regulatory agency with respect to
the New Product, (v) conduct any clinical trials for the New
Product (except for the 3 pharmacokinetic studies described above) or (vi) conduct any
commercialization-related activities with respect to the New Product. Impax shall not incorporate
any know-how, patented technology or other intellectual property Controlled by Impax into the New
Product, the New Product Technology or the manufacturing process therefor without notifying Medicis
in writing. If Medicis notifies Impax in writing, within thirty (30) days of Impax’s notice, that
Medicis, based on its freedom to operate analysis, has a good faith concern that the use of such
know-how, technology or intellectual property with respect to the New Product may infringe the
intellectual property of a Third Party, then the parties will discuss such matter and, if such
discussion does not reasonably resolve Medicis’ concern, then Medicis will notify Impax in writing
within thirty (30) days of such discussion and Impax, following receipt of such notice, will not
incorporate such know-how, technology or intellectual property into the New Product.




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          2.2 Amendment of Development Plan. The Development Plan may be amended from time to
time by mutual written agreement of the parties or by the Steering Committee pursuant to Section
2.3.1.




          2.3 Steering Committee.




               2.3.1 Composition of the Steering Committee. The Steering Committee shall foster the
collaborative relationship between the parties and shall in particular monitor the progress of the
Development Program and Impax’s progress with respect to the ANDA Products. The Steering Committee
shall be comprised of two (2) named representatives of Impax and two (2) named representatives of
Medicis. Each party shall appoint its respective representatives to the Steering Committee from
time to time, and may substitute one or more of its representatives, in its sole discretion,
effective upon notice to the other party of such change but shall use commercially reasonable
efforts to maintain stability of Steering Committee representation. The Steering Committee shall
not have the power to amend the terms of this Agreement but shall have the power to change the
Development Plan upon agreement of at least one (1) representative of the Steering Committee from
each party.



               2.3.2 Meetings. The Steering Committee shall meet not less than four (4) times each
calendar year, on such dates and at such times and places as agreed to by Impax and Medicis,
alternating between Scottsdale, Arizona and Hayward, California or such other locations as the
parties shall agree, including without limitation via teleconference. At such meetings, the
Steering Committee shall discuss the progress of the Development Program and set priorities
therefor.



               2.3.3 Committee Actions. Any approval, determination or other action agreed to by all
of the members of the Steering Committee present at the relevant Steering Committee meeting shall
be the approval, determination or other action of the Steering Committee; provided, however, that
at least one (1) representative of each party is present at such meeting, and that such approval,
determination or other action is documented in (a) a writing signed by a representative of each
party at such meeting or (b) the approved minutes for such meeting. The Steering Committee also
may act by unanimous written consent without a meeting or between meetings.



               2.3.4 Steering Committee Minutes and Reports. One representative of each party shall
be designated to take minutes of each Steering Committee meeting. Within fifteen (15) days
following each Steering Committee meeting during the term of the Agreement, the Steering Committee
shall prepare and provide to each party a reasonably detailed written report which shall summarize
the outcome of the meeting.



               2.3.5 Term. The term of the Steering Committee shall commence on the Effective Date
and continue until Impax has completed its obligations under the Development Plan.



          2.4 Records. Impax shall maintain complete and accurate records of all work it
conducts under the Development Program and all results, data and developments made in connection
therewith. Such records shall be complete and accurate and shall fully and properly




8









 







reflect all work done and results achieved in the performance of the Development Program in
sufficient detail and in good scientific manner appropriate for patent and regulatory purposes.
Medicis shall have the right to review and copy such records (including raw data and scientific
notebooks) at reasonable times to the extent necessary for Medicis to exercise its rights under
this Agreement with respect to New Product Technology and the development and commercialization of
the New Product.




          2.5 Reports. Within thirty (30) days following the end of each calendar quarter
during the term of the Development Program, Impax shall prepare and deliver to Medicis a written
summary report which shall describe the research performed to date under the Development Program
and all results, analysis and conclusions thereof.




     3. INTELLECTUAL PROPERTY.



          3.1 Research License. During the term of the Development Program, Medicis hereby
grants to Impax a fully paid, non-exclusive, non-transferable (except as permitted in Section 11.6)
license (without the right to grant sublicenses), under all patents, know-how and other
intellectual property rights Controlled by Medicis, for the sole purpose of conducting the
Development Program. Prior to engaging any subcontractors to perform work under the Development
Program, Impax shall notify Medicis in writing of the names and addresses of the subcontractors so
that Medicis may screen such subcontractors against the Exclusion Lists and any other legal
requirements. If, within fourteen (14) days following submission of the list to Medicis, Medicis
does not object to the use of such subcontractors on the basis that such subcontractors fail to
comply with the foregoing requirements or the representations under Section 9.2, Impax may proceed
with use of such subcontractors. The foregoing shall not relieve Impax of its requirements under
Section 9.2.




          3.2 License Grants.




               3.2.1 Subject to the terms and conditions of this Agreement, Impax hereby grants to Medicis an
exclusive, royalty-bearing, irrevocable, non-transferable (except as permitted in Section 11.6),
worldwide license (with the right to grant sublicenses through multiple tiers) under the Impax IP
Rights, to make, have made, use, offer for sale, sell and import the New Product.



               3.2.2 Subject to the terms and conditions of this Agreement, Medicis hereby grants to Impax a
perpetual, royalty-free, fully paid, irrevocable, non-transferable (except as permitted in Section
11.6), worldwide exclusive license (with the right to grant sublicenses through multiple tiers)
under the patent and other intellectual property rights owned by Medicis pursuant to Section 3.3,
to make, have made, use, offer for sale and import the Non-Specific
Technology for all uses outside the Oral Acne Field.



          3.3 New Product Technology. Impax shall promptly disclose to Medicis all New Product
Technology. Medicis shall solely own all right, title and interest in and to the New Product
Technology and all patent and other intellectual property rights therein. Impax hereby assigns to
Medicis all of its right, title and interest in and to the New Product Technology and all patent
and other intellectual property rights therein. Impax shall perform, during and after the




9









 




term of this Agreement, all acts that Medicis reasonably deems necessary or desirable to
permit and assist Medicis, at Medicis’ expense, in obtaining, perfecting and enforcing the full
benefits, enjoyment, rights and title throughout the world in the New Product Technology and all
patent and other intellectual property rights therein. If Medicis is unable for any reason, after
commercially reasonable efforts, to secure Impax’s signature to any document required to file,
prosecute, register or memorialize the assignment of any rights to the New Product Technology as
provided under this Agreement, Impax hereby irrevocably designates and appoints Medicis and
Medicis’ duly authorized officers and agents as Impax’s agents and attorneys-in-fact to act for and
on Impax’s behalf and instead of Impax to take all lawfully permitted acts to further the filing,
prosecution, registration, memorialization of assignment, issuance and enforcement of such rights,
all with the same legal force and effect as if executed by Impax. The foregoing is deemed a power
coupled with an interest and is irrevocable. Medicis shall have the world-wide right to control
the drafting, filing, prosecution, maintenance and enforcement of patents covering the New Product
Technology.




          3.4 No Implied Licenses. Except as explicitly set forth in this Agreement, neither
party grants to the other party any license, express or implied, under its patents or other
intellectual property.




     4. DEVELOPMENT AND COMMERCIALIZATION OF NEW PRODUCT



          4.1 Marketing of the New Product. Medicis shall have the sole right to make, use,
sell, distribute, market, exploit or otherwise commercialize the New Product. Medicis shall use
Diligent Efforts to obtain Regulatory Approval for the New Product in the Territory. Medicis’
efforts with respect to the commercialization of the New Product shall be in the sole discretion of
Medicis. Impax acknowledges and agrees that it shall have no right under this Agreement to make,
have made, use, sell, distribute, market, exploit or otherwise commercialize the New Product except
in the course of performing its obligations under the Development Program.




          4.2 Exclusive Relationship. The parties acknowledge and agree that Impax will obtain
access to Confidential Information of Medicis with respect to the Original Products and any
development work relating to the New Product, all of which may provide Impax with a competitive
advantage. Accordingly, during the term of this Agreement and for XXXXX thereafter
(unless this Agreement is terminated on account of Medicis’ uncured material breach of its payment
obligations under this Agreement), Impax shall not, and nor shall Impax directly or indirectly
encourage or assist any Third Party to, develop and/or commercialize any product that contains
XXXXX; provided, however, that such restriction shall not apply to XXXXX.




     5. DEVELOPMENT AND COMMERCIALIZATION OF ANDA PRODUCTS



          5.1 Development.




               5.1.1 General Obligation. Impax shall use Diligent Efforts to obtain Regulatory
Approval in the Territory for each ANDA Product.



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               5.1.2
Specific Obligations. In addition to the obligations set forth
in Section 5.1.1, Impax shall have the obligations set forth in this
Section 5.1.2 solely with respect to the XXXXX Product
and the XXXXX Product. Impax shall, to the extent it has not
already done so prior to the Effective Date, conduct an in vivo
bioequivalence study for each such ANDA Product. If such study
demonstrates bioequivalence, then Impax shall file an ANDA for such
ANDA Product. If such study does not demonstrate bioequivalence,
Impax shall conduct a second in vivo bioequivalence study for such
ANDA Product. If such second study demonstrates bioequivalence, then
Impax shall file an ANDA for such ANDA Product.



          5.2
Commercialization. Following the FDA’s approval of
Impax’s ANDA for an ANDA Product, Impax shall use Diligent
Efforts to commercialize such ANDA Product in the Territory;
provided, however, that Impax shall not have any obligation to launch
or continue commercialization in the Territory of any ANDA Product at
any time when Impax does not have either (a) a license to all patents
and patent applications in the Territory that may claim such ANDA
Product or its manufacture or use, unless Impax is able to obtain
such license on commercially reasonable terms as determined by Impax,
or (b) a final, unappealable resolution in Impax’s favor of all
claims that such ANDA Product or its manufacture or use infringes a
patent in the Territory. Impax shall comply with all applicable laws
and regulations in connection with its research, development and
commercialization activities for each ANDA Product in the Territory.




          5.3 Reports. Within thirty (30) days following the end of each calendar quarter
during the term of this Agreement, Impax shall prepare and deliver to Medicis a written summary
report which shall describe its regulatory and commercialization efforts with respect to the ANDA
Products.




          5.4 Right of Negotiation. If Impax decides to develop a product that is a generic
equivalent of a product that is marketed under the XXXXX, XXXXX, XXXXX or XXXXX trademark but is
not an XXXXX Product, XXXXX Product, XXXXX Product or XXXXX Product, then Impax shall promptly
notify Medicis in writing. If Medicis is interested in co-developing such product with Impax, then
Medicis shall provide Impax, within thirty (30) days after Impax’s notice, with a written proposal
of the terms under which the parties would co-develop such product. Impax shall notify Medicis
within thirty (30) days of receipt of Medicis’ proposal whether, based on such proposal, it is
interested in engaging in negotiations with Medicis regarding the terms under which the parties
would co-develop such product. Medicis’ right of negotiation pursuant to this Section 5.4 shall
expire with respect to a particular product at the earliest of: (1) thirty (30) days after Impax’s
first notice pursuant to this Section 5.4, if Medicis has already not provided Impax with the
proposal specified above; (2) Medicis’ receipt of notice from Impax that it is not interested in
engaging in negotiations with Medicis regarding the terms under which the parties would co-develop
such product; (3) sixty (60) days after Medicis’ receipt of notice from Impax that it is interested
in engaging in negotiations with Medicis regarding the terms under which the parties would
co-develop such product, if the parties have not entered into a written agreement for such
co-development (such agreement, a “Co-Development Agreement”) and (4) the date of the parties’
entry into a Co-Development Agreement.




     6. FINANCIAL CONSIDERATIONS.



          6.1 Upfront Payment. Within five (5) business days after the Effective Date, Medicis
shall pay to Impax a non-creditable, non-refundable payment of Forty Million United States Dollars
($40,000,000 USD).




          6.2 Milestone Payments. Medicis shall pay to Impax the following non-creditable,
non-refundable milestone payments set forth in the following table after the first achievement of
the corresponding milestone:




11









 








	 	 	 
	Milestone Event	 	Milestone Payment
	(a) XXXXX

	 	XXXXX
	 
	 	 
	(b) XXXXX

	 	XXXXX
	 
	 	 
	(c) XXXXX

	 	Five Million United States
Dollars
($5,000,000 USD)
	 
	 	 
	(d) XXXXX

	 	XXXXX
	 
	 	 
	(e) XXXXX

	 	XXXXX
	 
	 	 
	(f) XXXXX

	 	XXXXX





Each such milestone payment shall be payable only once pursuant to this Section 6.2. Such payment
shall be made within thirty (30) days after the initial achievement of such milestone; provided,
however, that Medicis shall not be obligated to make the milestone payment described in subsection
(c) above before January 1, 2009, Medicis shall not be obligated to make the milestone payment described in
subsection (d) above before XXXXX, and Medicis shall not be obligated to make either of the
milestone payments described in subsections (e) and (f) above before XXXXX.




          6.3 Revenue Sharing for ANDA Products. Subject to the terms and conditions of this
Agreement, within sixty (60) days following the end of each calendar quarter, Impax shall pay to
Medicis fifty percent (50%) of all Gross Profit accrued during such calendar quarter. Medicis’
right to receive a share of the Gross Profit under this Section 6.3 with respect to an ANDA Product
shall expire, on an ANDA Product-by-ANDA Product basis, ten (10) years after the first commercial
sale by Impax of such ANDA Product in the Territory after the applicable ANDA has been approved by
the FDA. Each payment made under this Section 6.3 shall be accompanied by a written report stating
the number and description of all ANDA Products sold in the Territory during the relevant calendar
quarter; a detailed breakdown of the Cost of Sales associated therewith; the gross sales associated
therewith; the calculation of Net Sales thereon, including without limitation the amount of any
deduction provided for in the definition of Net Sales; and the calculation of Gross Profits
therefrom.




          6.4 Royalty Payments for New Product. Subject to the terms and conditions of this
Agreement, Medicis shall pay to Impax (a) XXXXX, and (b) XXXXX. Impax’s right to receive royalties
under this Section 6.4 shall expire, on a New Product-by-New
Product basis, eight (8) years after
the first commercial sale of such New Product in the Territory. All royalties due under this
Section 6.4 shall be paid quarterly within sixty (60) days after the end of the relevant calendar
quarter for which royalties are due. Each royalty payment shall be accompanied by a written report
stating the number and description of all New Products sold during the relevant calendar quarter;
the gross sales associated therewith; and the calculation of Net Sales thereon, including without
limitation the amount of any deduction provided for in the definition of Net Sales.
Notwithstanding the foregoing, any sales of New Product by Medicis to a distributor or sublicensee
for the purpose of creating an Authorized Product and sold by Medicis shall not be subject to the
foregoing royalty, but any revenues Medicis receives from the sale of such Authorized Product by
such distributor or sublicensee shall be subject to the revenue share in Section 6.5 below.




12









 








          6.5 Revenue Sharing for Authorized Products. Subject to the terms and conditions of
this Agreement, Medicis shall pay to Impax XXXXX percent (XXXXX%) of all amounts received by
Medicis on account of the sale of Authorized Products. Impax’s right to receive a share of such
amounts shall expire, on an Authorized Product-by-Authorized Product basis, eight (8) years after
the first commercial sale of such Authorized Product in the Territory. All payments due under this
Section 6.5 shall be paid quarterly within sixty (60) days after the end of the relevant calendar
quarter for which royalties are due. Each royalty payment shall be accompanied by a written report
stating the number and description of all Authorized Products sold during the relevant calendar
quarter; the gross sales associated therewith; and the amounts received by Medicis on account of
such gross sales.




          6.6 Taxes. A party responsible for a payment under Sections 6.1, 6.2, 6.3, 6.4 or 6.5
(the “Payor”) shall be responsible for and may withhold from payments made to the other party (the
"Payee”) under this Agreement any taxes required to be withheld by the Payor under applicable law.
Accordingly, if any such taxes are levied on such payments due hereunder (“Withholding Taxes”), the
Payor 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 the Payee within sixty (60) days following that tax payment.




          6.7 Audit Rights. On no less than five (5) business days notice from the Payee, the
Payor shall make all such records, books of account, information and data concerning the applicable
payments owing under Section 6.3, 6.4 or 6.5 (which in the case of payments made pursuant to
Section 6.3 shall include records of Impax’s manufacture of ANDA Products or to the extent in
Impax’s possession, the manufacture of ANDA Products on behalf of Impax by its Third Party contract
manufacturer), available for inspection during normal business hours, by an independent auditor
selected by the Payee and reasonably acceptable to the Payer, for the purpose of an audit to
determine the accuracy of the reports delivered and amounts paid by the Payor pursuant to Section
6.3, 6.4 or 6.5; provided that the Payee may not request such inspection more than once in any
calendar year unless a discrepancy has been identified by the Payee and such audit shall be limited
to records, books of account, information and data pertaining to payments made pursuant to Section
6.3, 6.4 or 6.5 during the preceding three calendar years. Upon reasonable belief of discrepancy
or dispute, the Payee’s external auditors shall be entitled to take copies or extracts from such
records, books of account, information and data (but only to the extent related to the contractual
obligations set out in this Agreement) during any review or audit. Prior to the initiation of any
audit pursuant to this Section 6.7, the external auditor shall sign a confidentiality agreement
with the Payor providing that, as between the external auditor and the Payor, such records, books
of account, information and data shall be treated as Confidential Information of the Payor but may
be disclosed to the Payee solely to the extent necessary to document a discrepancy in any reports
delivered and amounts paid by the Payor pursuant to Section 6.3, 6.4 or 6.5. The Payee shall be
solely responsible for its costs in making any such audit, unless the Payee identifies a
discrepancy in favor of the Payor in the calculation of the share of Gross Profit or royalty or
other payment owed, as applicable, under this Agreement in any calendar year from those properly
payable for that calendar year of five percent (5%) or greater, in which event the Payor shall be
solely responsible for the reasonable cost of such audit and pay the Payee any underpayment. All
information disclosed by the Payor pursuant to this Section shall be deemed Confidential
Information of the Payor.




13









 








     7. TERM AND TERMINATION.



          7.1 Term. Subject to Section 7.2 below, this Agreement shall expire on the latest of
(a) expiration of Medicis’ obligation to pay royalties to Impax under Section 6.4, (b) expiration
of Medicis’ obligation to pay make Authorized Product-based payments to Impax under Section 6.5,
and (c) expiration of Impax’s obligation to pay royalties to Medicis under Section 6.3. The
license grants under Section 3.2 shall survive any such expiration in accordance with the terms of
Section 3.2.




          7.2 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 thirty (30) days after receipt of express written notice
thereof by the non-breaching party.




          7.3 Effect of Expiration or Termination.




               7.3.1 Expiration or termination of this Agreement shall not relieve the parties of any
obligation accruing prior to such expiration or termination.



               7.3.2 The provisions of Sections 3.2, 3.3, 4.2 (for the term described therein), 6.7 (for
three years after expiration), 7.3.1, 7.3.2, 8, 10 and 11 shall survive the expiration of this
Agreement.



               7.3.3 The provisions of Sections 3.2, 3.3, 4.2 (for the term described therein), 6.2, 6.3 (for
the term described therein), 6.4 (for the term described therein), 6.5 (for the term described
therein), 6.6 (for the term of the payment obligations pursuant to Sections 6.1 through 6.5), 6.7
(for three years after termination), 7.3.1, 7.3.3, 8, 10 and 11 shall survive the termination of
this Agreement for any reason.



     8. CONFIDENTIALITY.



          8.1 Confidentiality. Until the last to expire of this Agreement, the License
Agreement or the Distribution Agreement (as defined in the License Agreement), and for a period of
five (5) years following the expiration or earlier termination hereof or thereof, except with
respect to any Confidential Information constituting 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.




          8.2 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, permitted
subcontractors and contract manufacturers who need to know such information to accomplish the
purposes of this Agreement (collectively, “Permitted




14









 




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 8.1.




          8.3 Litigation and Governmental Disclosure. Each party may disclose Confidential
Information of the other party to the extent such disclosure is reasonably necessary (a) for
prosecuting or defending litigation or complying with a court order, or applicable law,
governmental regulations or investigation, and (b) in the case of Medicis as the receiving party to
conduct pre-clinical or clinical trials of the New Product, provided that if a party is required by
court order, 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 assist such other party to secure a protective order
or confidential treatment of such Confidential Information required to be disclosed.




          8.4 Limitation of Disclosure. The parties agree that, except 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, or any
regulations of any national securities exchange, and except as may be authorized in Section 8.5, 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.




          8.5 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.




     9. REPRESENTATIONS AND WARRANTIES.



          9.1 Mutual Representations. Each party hereby represents and warrants to the other
party that:




15









 





               (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.



          9.2 Compliance. Impax hereby represents, warrants and covenants to Medicis that:




               (a) neither it nor its subcontractors, nor any of its or its subcontractors’ personnel have
been nor are disqualified or debarred under Section 306 of the Federal Food, Drug and Cosmetic Act
(as amended by the Generic Drug Enforcement Act of 1992), 21 U.S.C. § 336;



               (b) neither it nor its subcontractors shall use in any capacity the services of any person
debarred, disqualified or under investigation under the provisions of the Section 306 of the
Federal Food, Drug and Cosmetic Act (as amended by the Generic Drug Enforcement Act of 1992), 21
U.S.C. § 336, and will notify Medicis immediately in the event Impax is made aware of any
investigation or proceeding for debarment;



               (c) neither its nor its subcontractors’ personnel within five (5) years preceding the
Effective Date have been convicted of any offense required to be listed under FDA regulations;



               (d) it and its subcontractors shall comply with all applicable laws and regulations in the
performance of its obligations under the Agreement;



               (e) neither it nor its subcontractors shall use any Ineligible Person or a person on an
Exclusion List in connection with the performance of any of its obligations or activities under the
Agreement; and



               (f) it has filed with the FDA the ANDA listed on Exhibit B.



          9.3 Disclaimer of Warranties. Except for those warranties set forth in Sections 9.1
and 9.2, neither party makes any warranty, written, oral, express or implied, with respect to
Development Program, the New Product, the ANDA Products or the Authorized Products. 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.




          9.4 Limitation of Liability. WITH THE EXCEPTION OF DAMAGES RESULTING FROM A PARTY’S
BREACH OF ITS CONFIDENTIALITY OBLIGATIONS




16









 




UNDER THE AGREEMENT OR A PARTY’S OBLIGATIONS UNDER SECTION 10 (INDEMNIFICATION) OR A BREACH BY
IMPAX OF SECTION 4.2, 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.




          9.5 Equitable Relief.




               9.5.1 Each party acknowledges and agrees that the covenants contained in this Agreement
regarding the confidentiality and use of the Confidential Information of the disclosing party are
reasonable and necessary to protect the legitimate interests of the disclosing party, that the
disclosing party would not have entered into this Agreement in the absence of such covenants, and
that the receiving party’s breach or threatened breach of such covenants shall cause the disclosing
party 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. Each party further
acknowledges and agrees that the disclosing party shall have the right to apply to any court of
competent jurisdiction for an injunction order restraining any breach or threatened breach of the
covenants contained in this Agreement regarding confidentiality and use of the Confidential
Information and specifically enforcing such covenants, without the necessity of posting any bond or
security or giving the receiving party an opportunity to cure, in addition to seeking any other
remedy available to the disclosing party in law or equity. Each party agrees that it shall not
challenge any of the foregoing acknowledgements and agreements concerning injunctive relief in any
proceeding brought by a disclosing party.



               9.5.2 Impax acknowledges and agrees that the obligations and undertakings of Impax pursuant to
Section 4.2 of 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 provision,
and that Impax’s breach or threatened breach or failure to comply with Section 4.2 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.
Impax 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
Section 4.2 of this Agreement and specifically enforcing the terms and provisions of such Sections
of this Agreement, without the necessity of posting any bond or security or giving Impax an
opportunity to cure, in addition to seeking any other remedy available to Medicis in law or equity.
Impax agrees that it shall not challenge any of the foregoing acknowledgements and agreements
concerning injunctive relief in any proceeding brought by Medicis.



     10. INDEMNIFICATION. 



          10.1 Medicis Indemnification. Medicis shall indemnify, defend and hold harmless Impax
and its directors, managers, members, officers, employees, authorized subcontractors and agents
(collectively the “Impax Parties”) from and against any and all liabilities, obligations,
penalties, judgments, disbursements of any kind and nature, losses,




17









 




damages, costs and expenses (including, without limitation, reasonable attorney’s fees and
costs) (collectively, “Losses”) incurred as a result of any claims, demands, actions or other
proceedings by Third Parties against any of the Impax Parties to the extent arising out of (a) a
breach by Medicis of any representation, warranty or covenant under this Agreement, (b) any failure
of Medicis to comply with applicable laws and regulations in the performance of its obligations
under this Agreement, or (c) the research, development, regulatory approval or commercialization of
the New Product by or on behalf of Medicis, except to the extent that such Losses arise out of
Impax’s breach of any representation, warranty or covenant under this Agreement.




          10.2 Impax Indemnification. Impax shall indemnify, defend and hold harmless Medicis
and its directors, managers, members, officers, employees, authorized subcontractors and agents
(collectively the “Medicis Parties”) from and against any and all Losses incurred as a result of
any claims, demands, actions or other proceedings by Third Parties against any of the Medicis
Parties to the extent arising out of (a) a breach by Impax of any representation, warranty or
covenant under this Agreement, (b) any failure of Impax to comply with applicable laws and
regulations in the performance of its obligations under this Agreement, or (b) the research,
development, regulatory approval or commercialization of the ANDA Products by or on behalf of
Impax, except to the extent that such Losses arise out of Medicis’ breach of any representation,
warranty or covenant under this Agreement.




          10.3 Obligations. A party which intends to claim indemnification under this Section
10 (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 10. 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.




          10.4 Responsible Party. With respect to the prosecution or defense of any litigation
or proceeding asserted by or against Impax with respect to any of the ANDA Products, Impax shall be
solely responsible for all costs, expenses, damages and other liabilities with respect to such
litigation or proceeding, except to the extent subject to Section 10.1. With respect to the
prosecution or defense of any litigation or proceeding asserted by or against Medicis with respect
to the New Product, Medicis shall be solely responsible for all costs,




18









 




expenses, damages and other liabilities with respect to such litigation or proceeding, except
to the extent subject to Section 10.2.




     11. GENERAL PROVISIONS.



          11.1 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: 480-291-5163
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attn: General Counsel
	 

	 	 	 	Facsimile: 480-291-5163
	 
	 	 	 	 
	 

	 	If to Impax:
	 	Impax Laboratories, Inc.
	 

	 	 	 	30831 Huntwood Avenue
	 

	 	 	 	Hayward, California 94544
	 

	 	 	 	Attn: President, Generics Division
	 

	 	 	 	Facsimile: 510-471-1595
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Impax Laboratories, Inc.
	 

	 	 	 	30831 Huntwood Avenue
	 

	 	 	 	Hayward, California 94544
	 

	 	 	 	Attn: Legal Department
	 

	 	 	 	Facsimile: 510-476-2092






     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 11.1.



          11.2 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 Impax and Medicis and their respective permitted successors and
assigns.




          11.3 Bankruptcy. All rights granted under this Agreement by Impax to Medicis are and
shall be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,




19









 




licenses of rights to “intellectual property” as defined under Section 101(52) of the US.
Bankruptcy Code. The parties agree that Medicis, as a licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections under the U.S.
Bankruptcy Code, subject to performance by Medicis of its pre-existing obligations under this
Agreement. The parties further agree that, if a bankruptcy proceeding is commenced by or against
Impax, Medicis shall be entitled to a complete duplicate of (or complete access to, as appropriate)
any such intellectual property and all embodiments of such intellectual property, and the same, if
not already in Medicis’ possession, shall be promptly delivered to Medicis (a) after any such
commencement of a bankruptcy proceeding upon request of Medicis, unless Impax elects to continue to
perform all of its obligations under this Agreement, or (b) if not delivered under subsection (a)
above, upon the rejection of this Agreement by or on behalf of Impax upon written request therefore
by Medicis.




          11.4 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.




          11.5 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.




          11.6 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 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 Relevant Business Unit of the
party seeking such assignment or transfer and such transaction relates to the business or assets
covered by this Agreement and the resulting entity assumes all of the obligations under this
Agreement. For the purposes of this Section 11.6, the “Relevant Business Unit” shall mean, with
respect to Impax, the generics division of Impax, and with respect to Medicis, the medical
dermatology division of Medicis. 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 11.6 shall be void.




          11.7 Independent Contractor. Impax 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.




          11.8 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
Arizona, without regard to the principles of conflicts of laws. The federal and state courts in
the




20









 




State of Arizona shall have jurisdiction over the parties hereto in all matters arising
hereunder and the parties hereto agree that the venue will be a state or federal court in the State
of Arizona.




          11.9 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.




          11.10 Headings, Interpretation; Construction. The headings used in this Agreement are
for convenience only and are not part of this Agreement. In the event that Medicis makes a claim
for damages based on rescission or breach of this Agreement, nothing in this Agreement shall be
construed as precluding Medicis from seeking recovery of those amounts paid by Medicis under this
Agreement to the extent such amounts are recoverable under applicable law and Impax’s liability is
not limited by Section 9.4.




          11.11 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.




[Remainder of this page intentionally blank]




21









 




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.







	 	 	 	 	 	 	 	 	 
	IMPAX LABORATORIES, INC. 	 	MEDICIS PHARMACEUTICAL CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Arthur A. Koch, Jr.
	 	By:
	 	/s/ Mark Prygocki
	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	Arthur A. Koch, Jr.
	 	Name:
	 	Mark Prygocki	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	SVP — CFO
	 	Title:
	 	COO	 	 
	 

	 	 
	 	 	 	 	 	 





22









 





EXHIBIT A




Target Product Profile



XXXXX.




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EXHIBIT B




ANDA




ANDA No. XXXXX; for XXXXX





24