Document:

exv10w5

Exhibit 10.5

EXECUTION VERSION

Forbearance Agreement

          FORBEARANCE AGREEMENT, dated as of April 15, 2011 (this “Agreement”) among DHS HOLDING
COMPANY, a Delaware corporation (“Holdings”), DHS DRILLING COMPANY, a Colorado corporation (the
“Borrower”), the other Loan Parties party hereto, and LEHMAN COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the “Administrative Agent”) and as the Lender (in such
capacity, the “Lender”) under that certain Credit Agreement (as defined below).

WITNESSETH:

          WHEREAS, the Borrower, Holdings, the Lender and the Administrative Agent are parties to that
certain Amended and Restated Credit Agreement, dated as of August 15, 2008, as amended by that
certain Amendment No. 1, dated as of September 19, 2008, and further amended by that certain
Waiver and Amendment No. 2, dated as of April 1, 2010 (as further amended, modified or
supplemented from time to time in accordance with its terms, the “Credit Agreement”; capitalized
terms used but not defined herein shall have the respective meanings ascribed to such terms in the
Credit Agreement);

          WHEREAS, the Borrower, Holdings, the Lender and the Administrative Agent are parties to that
certain Third Amended and Restated Forbearance Agreement No. 2, dated as of April 12, 2011 (the
“Existing Forbearance Agreement”), pursuant to which the Lender and the Administrative Agent
agreed to forbear from exercising certain rights under the Credit Agreement and the other Loan
Documents in connection with the Forbearance Default (as defined herein);

          WHEREAS, the Borrower has failed in its performance of certain provisions of the Credit
Agreement as further described herein, such failure constituting a default under the Credit
Agreement;

          WHEREAS, the Borrower and Holdings have requested that the Lender and the Administrative
Agent amend and restate the Existing Forbearance Agreement, and the Lender and the Administrative
Agent have agreed to do so, to, inter alia, extend the Forbearance Period (as defined herein) and
provide for the Waiver (as defined herein), on the terms and conditions specified;

          WHEREAS, the Borrower has informed the Administrative Agent of its desire to sell Rig #23 to
a third party purchaser; and

          WHEREAS, the Borrower and Holdings have requested that the Lender and the Administrative
Agent forbear, and the Lender and the Administrative Agent have agreed, subject to the terms and
conditions of this Agreement, to forbear, from exercising certain rights under the Credit
Agreement and the other Loan Documents during the Forbearance Period (as defined below).

          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter contained,
the parties hereto agree as follows:

          1. Forbearance.

          (a) Acknowledgement. As of the date hereof, each of the Loan Parties party hereto
acknowledge that the failure and anticipated failure, as the case may be, by the Borrower

 

 

to (a) on January 3, 2011 and on April 1, 2011, service the amortization payment due and payable pursuant
to Section 2.4(a)(i) of the Credit Agreement (together, the “Payment Default”), (b) on January 3,
2011 and on April 1, 2011, service the interest payment due and payable pursuant to Section 2.8(b)
of the Credit Agreement (together, the “Interest Default”) and (c) for the fiscal quarter ending
on December 31, 2010, comply with the covenant under Section 6.1(a) of the Credit Agreement with respect
to maintenance of Minimum Consolidated EBITDA (the “Maintenance Default,” together with the
Payment Default and Interest Default, the “Forbearance Default”) constitutes a default under the
Credit Agreement.

          (b) Forbearance Period. (i) During the period from the Effective Date (as defined
below) until May 13, 2011 (the “Forbearance Period”), each of the Administrative Agent and the
Lender hereby agrees to forbear (the “Forbearance”) from exercising its rights and remedies under
the Credit Agreement and the other Loan Documents arising as a result of the Forbearance Default;
provided, however, that upon the earlier to occur of (x) any Event of Default other than
the Forbearance Default, including the Events of Defaults set forth in Section 1(d) hereof and (y)
the fifth Business Day following receipt by the Borrower or any other Loan Party of notice from
Estrella International Energy Services Ltd. (“Estrella”) that Estrella will no longer pursue the
acquisition of the Borrower and/or substantially all or a portion of the Borrower’s rig assets
(the “Acquisition”), the Forbearance Period shall automatically and immediately terminate, and the
Administrative Agent and the Lender shall be entitled to exercise any and all of their rights and
remedies under the Credit Agreement, the other Loan Documents and applicable law, without further
notice other than as required therein. Upon termination of the Forbearance Period, (A) the
forbearance shall automatically terminate and be of no further force or effect without any further
action by the Lender, (B) the Forbearance Default is, without further action, reinstated and shall
have the same force and effect as if the Forbearance had not been agreed to by the parties hereto
and (C) subject to the terms of the Credit Agreement, the Loan Documents and applicable law, the
Lender may thereafter, without limitation, sue, ask for or demand from the Loan Parties payment of
the Obligations due and payable to such Lender, in whole or in part, and otherwise enforce any of
its rights and remedies (including rights of acceleration and foreclosure) provided for under the
Credit Agreement, the Loan Documents or applicable law against any party. Each of the Loan Parties
party hereto agrees that, subject to the agreement of the Lender to forbear from exercising
certain of their rights and remedies as and to the extent expressly set forth in this Agreement,
all rights and remedies of the Lender under the Credit Agreement, the Loan Documents or applicable
law with respect to such Loan Party shall continue to be available to the Lender from and after
the Effective Date.

               (ii) It is understood and agreed that interest shall accrue from the Effective Date through
the remainder of the Forbearance Period on the outstanding Obligations at the applicable default
rates provided for pursuant to the Credit Agreement.

          (c) Waiver. Each of the Lender and the Administrative Agent hereby agree to waive
compliance by Holdings and the Borrower of their respective obligations under the Credit Agreement
to make payments of principal and interest and to waive compliance with the terms of Section
5.1(a) of the Credit Agreement, solely as such section requires Holdings and the Borrower to
deliver financial statements to each Agent and Lender on March 31, 2011 (the “Waiver”);
provided, that this Waiver shall terminate and be of no further force and effect if such
financial statements are not delivered by Holdings and the Borrower on or prior to April 22, 2011,
in accordance with the terms of the Credit Agreement.

          (d) Additional Events of Default. The following events shall constitute Events of
Default under the terms of the Credit Agreement and the other Loan Documents:

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               (i) any of the Borrower, Holdings or the other Loan Parties shall pledge, encumber, charge,
assign or grant a security interest in, or encumbrance of any kind on, any Collateral; or

               (ii) any of the Borrower, Holdings or the other Loan Parties shall enter into any arrangement
to provide priority or preference with respect thereto, in connection with securing or obtaining
debtor-in-possession financing; or

               (iii) any of the Loan Parties shall (x) pay any management fees to either of Delta Petroleum
Corporation (“Parent”) or Chesapeake Energy Corporation (“Chesapeake”) or (y)
make any other payments, distributions or dividends in respect of stock held by either of
Parent or Chesapeake in any Loan Party; or

               (iv) Holdings, the Borrower or any other Loan Party shall fail to perform or observe any
term, covenant or agreement set forth in this Agreement; or

               (v) any representation or warranty made or deemed made by any Loan Party herein or any
representation or warranty made or deemed made hereafter by any Loan Party in any Loan Document or
which is made in connection with this Agreement or any other Loan Document shall prove to have
been incorrect or misleading in any material respect on or as of the date made or deemed made.

          2. Forbearance Requirements.

As consideration for the Forbearance, during the Forbearance Period:

          (a) Holdings and Borrower shall permit any third party financial consultant or advisor acting
on behalf of the Lender or Administrative Agent to inspect the property of Holdings and its
Subsidiaries and to conduct such other activity as contemplated in Section 5.7(b) of the Credit
Agreement.

          (b) The Borrower shall facilitate such meetings between the Administrative Agent and
Macquarie Capital (USA) Inc., as the Borrower’s financial advisor, as the Administrative Agent may
request from time to time.

          (c) The Borrower shall use best efforts to effectuate the sale of Rig #23.

          (d) The Borrower shall immediately notify the Administrative Agent of the Borrower or any
other Loan Party’s receipt of notice from Estrella that Estrella will not pursue the Acquisition.

          (e) The Loan Parties shall provide the Lender with such other certificates, documents and
agreements as the Lender may reasonably request.

          3. Representations and Warranties. Each of the Loan Parties party hereto represents
and warrants as follows (which representations and warranties shall survive the execution and
delivery of this Agreement):

          (a) Each Loan Party has taken all necessary action to authorize the execution, delivery and
performance of this Agreement.

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          (b) This Agreement constitutes the legal, valid and binding obligation of each Loan Party,
enforceable against them in accordance with their respective terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and to general equity principles.

          (c) No consent or approval of any person, firm, corporation or entity, and no consent,
license, approval or authorization of any governmental authority is or will be required in
connection with the execution, delivery, performance, validity or enforcement of this Agreement,
other than any such consent, approval, license or authorization which has been obtained and
remains in full force and effect or where the failure to obtain such consent, approval, license or
authorization would not result in a Material Adverse Effect.

          (d) After giving effect to this Agreement, each of the Borrower, Holdings and the other Loan
Parties is in compliance with all of the various covenants and agreements set forth in the Credit
Agreement and each of the other Loan Documents, other than the Forbearance Default.

          (e) After giving effect to this Agreement and the agreements to be delivered in connection
herewith, no event has occurred and is continuing which constitutes a Default or an Event of
Default, other than the Forbearance Default.

          (f) After giving effect to this Agreement and the agreements to be delivered in connection
herewith, all representations and warranties contained in the Credit Agreement and each of the
other Loan Documents are true and correct in all material respects as of the date hereof, except
to the extent that any representation or warranty relates to a specified date, in which case such
are true and correct in all material respects as of the specific date to which such
representations and warranties relate, and except to the extent of any inconsistency in such
representations or warranties arising directly out of the Forbearance Default.

          (g) Each report delivered and any information provided pursuant to or in connection with this
Agreement has and will be prepared on a reasonable basis and in good faith, and has/will be based
on assumptions believed by the applicable Loan Party to be reasonable at the time made and upon
the best information available to such Loan Party, and such Loan Party is not aware of any facts
or information that would lead the applicable party to believe that any such information or report
is incorrect or misleading in any material respect.

          4. Fees and Expenses. The Borrower and Holdings agree to pay on demand all fees,
costs and expenses, including reasonable attorneys’ and consultants’ fees, of the Administrative
Agent and the Lender incurred in connection with this Agreement.

          5. Effective Date. This Agreement shall not become effective unless and until (the
latest date upon which such occurs, the “Effective Date”) this Agreement shall have been duly
executed and delivered by the Loan Parties party hereto, the Lender and the Administrative Agent.

          6. Reference and Continued Effectiveness of the Loan Documents.

          (a) The term “Agreement”, “hereof”, “herein” and similar terms as used in the Credit
Agreement, and references in the other Loan Documents to the Credit Agreement, shall mean and
refer to, from and after the Effective Date, the Credit Agreement as affected by this Agreement.

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          (b) The Loan Parties hereby agree that all of the covenants and agreements contained in the
Credit Agreement and the Loan Documents are hereby ratified and confirmed in all respects and
confirm the Collateral will remain subject to the security interest of the Administrative Agent
for the benefit of the Secured Parties pursuant to the Loan Documents.

          (c) The execution, delivery and effectiveness of this Agreement shall not, except as
expressly provided herein, operate as a forbearance or waiver of any right, power or remedy of the
Administrative Agent or the Lender under any of the Loan Documents, nor constitute a forbearance
or waiver of any other provision in any of the Loan Documents, except as expressly provided
herein.

          (d) This Agreement constitutes a Loan Document.

          7. Counterparts. This Agreement may be executed in counterparts, each of which shall
be an original, and all of which, taken together, shall constitute a single instrument. Delivery
of an executed counterpart of a signature page to this Agreement by telecopier shall be effective
as delivery of a manually executed counterpart of this Agreement.

          8. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to the conflict of laws provisions
thereof.

          9. Limitation. Each party hereto hereby agrees that this Agreement does not impose on
Lehman Commercial Paper Inc. affirmative obligations or indemnities not existing, as of the date
of its petition commencing its proceeding under chapter 11 of the United States Code, and that
could give rise to administrative expense claims.

          10. Indemnity. The Borrower, Holdings and the other Loan Parties further agree,
jointly and severally, to defend, protect, indemnify and hold harmless the Administrative Agent
and the Lender, each of their respective Affiliates and their respective officers, directors,
employees, attorneys and agents (collectively the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses of any kind or nature whatsoever (including, without limitation, the reasonable fees and
expenses of counsel for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated as a party thereto),
imposed on, incurred by, or asserted against such Indemnitees in any manner relating to or arising
out of this Agreement or any other Loan Document (collectively the “Indemnified Matters”);
provided, however, that neither the Borrower, Holdings or any Loan Party shall have an
obligation to an Indemnitee hereunder with respect to Indemnified Matters caused or resulting from
(a) a dispute among the Lender or a dispute between the Lender and the Administrative Agent or (b)
the willful misconduct or gross negligence of such Indemnitee. If the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable because it violates
any law or public policy, the Borrower, Holdings and the other Loan Parties shall contribute the
maximum portion which it is permitted to pay and satisfy under the applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by Indemnities. This Section 10 shall survive
the payment of the Obligations and the termination of this Agreement or any other Loan Document.

[Signature Pages Follow]

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          IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the date first written above.

	 	 	 	 	 
	 	DHS DRILLING COMPANY, as the Borrower

 	 
	 	By:  	/s/ Gregory D. Tubbs
 	 
	 	 	Name:  	Gregory D. Tubbs 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	DHS HOLDING COMPANY, as Holdings

 	 
	 	By:  	/s/ Gregory D. Tubbs
 	 
	 	 	Name:  	Gregory D. Tubbs 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	CHAPMAN TRUCKING COMPANY, INC., as Guarantor

 	 
	 	By:  	/s/ Gregory D. Tubbs
 	 
	 	 	Name:  	Gregory D. Tubbs 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	HASTINGS DRILLING COMPANY, as Guarantor

 	 
	 	By:  	/s/ Gregory D. Tubbs
 	 
	 	 	Name:  	Gregory D. Tubbs  	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	C&L DRILLING COMPANY, as Guarantor

 	 
	 	By:  	/s/ Gregory D. Tubbs
 	 
	 	 	Name:  	Gregory D. Tubbs 	 
	 	 	Title:  	Executive Vice President 	 
	 

[Signature Page to Agreement]

 

 

	 	 	 	 	 
	 	LEHMAN COMMERCIAL PAPER, INC, as

Administrative Agent and Lender

 	 
	 	By:  	/s/ Ashvin Rao
 	 
	 	 	Name:  	Ashvin Rao 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page to Agreement]exv10w1

Exhibit 10.1

*** 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.

SETTLEMENT AGREEMENT

     THIS SETTLEMENT AGREEMENT (this “Agreement”) dated as of February 24, 2011 (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 Barr Laboratories, Inc. (a wholly owned subsidiary of
Teva Pharmaceuticals USA, Inc. (“Teva USA”)), a Delaware corporation with offices located at 400
Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677 on behalf of itself and its Affiliates
(collectively, “Teva”).

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

     WHEREAS, Teva filed and owns the ANDA (as defined below); and

     WHEREAS, in consideration for Teva’s agreement not to manufacture, use, sell, offer for sale,
import or distribute Generic Product (other than in accordance with the terms of this Agreement),
and Teva’s agreement to stipulate to the validity of the Patent Rights, Medicis agreed to release
Teva From liability arising from the filing of the ANDA or otherwise related to the subject matter
of the Lawsuit (as defined below), and to grant Teva a license to manufacture, market and
distribute Generic Product, 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, Medicis and Teva hereby 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. For clarity, Teva USA hereby
represents as of the Effective Date that Barr Laboratories, Inc. is an Affiliate of Teva USA.

          1.2 “Entry Date” means, when referring to a Generic 65/115 Product, the Generic 65/115 Product
Entry Date for such Generic 65/115 Product, and when referring to Generic 55/80/105 Product, the
Generic 55/80/105 Product Entry Date for such Generic 55/80/105 Product.

          1.3 “Generic 65/115 Product Entry Date” means, with respect to a particular Generic 65/115
Product, the earlier of:

	 	(a)	 	February ***, 2018;
	 
	 	(b)	 	***; or

 

 

	 
	 	(c)	 	***.

     ***.

     ***.

          1.4 “Lawsuit” means Medicis Pharmaceutical Corporation v. Barr Laboratories, Inc. and Teva
Pharmaceuticals USA. Inc., Civil Action No. 1:09-cv-03464-JFM, in the United States District Court
for the District of Maryland.

          1.5 “Generic 55/80/105 Product Entry Date” means, with respect to a particular Generic
55/80/105 Product, the earlier of:

	 	(a)	 	February ***, 2019, ***;
	 
	 	(b)	 	***;
	 
	 	(c)	 	***;
	 
	 	(d)	 	***; and
	 
	 	(e)	 	***.

     ***.

     ***.

          1.6 “ANDA” means the Abbreviated New Drug Application #65-485 and any supplements or
amendments thereto.

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

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

          1.9 “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

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recipient free of confidentiality obligations by a Third Party who has the right to make such
disclosure without obligations or 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.

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

          1.11 “Generic Product” means, collectively, Generic 65/115 Product and Generic 55/80/105
Product.

          1.12 “Generic 65/115 Product” means ***.

          1.13 “Generic 55/80/105 Product” means ***.

          1.14 “Patent Rights” means ***.

          1.15 “Pharmaceutical Equivalent” means a product having the same active ingredient, the same
dosage form, the same route of administration and the same strength or concentration as a given
reference listed drug.

          1.16 “Solodyn Products” means any of the 55 mg, 65 mg, 80 mg, 105 mg or 115 mg strengths of
extended release minocycline tablets that are (a) sold using the proprietary name Solodyn®, (b)
sold under NDA 05-0808 (including any supplements or amendments thereto), and (c) claimed or
covered by the Patent Rights.

          1.17 “Third Party” means any person or entity other than Medicis or Teva.

     2. RELEASE; PERMANENT INJUNCTION; LICENSE.

          2.1 ***.

          2.2 Prior to Entry Date. Commencing on the Effective Date and continuing until the
occurrence of the applicable Entry Date, Teva shall not, and shall not directly or indirectly
encourage or assist any Third Party, on a voluntary basis, to develop, make, use, sell, offer for
sale, distribute, import or otherwise commercialize Generic Product in the United States, except as
expressly permitted by the terms of this Agreement.

          2.3 Validity of Patent Rights. Teva hereby admits that the claims of the Patent
Rights are valid and enforceable. Teva hereby admits that the making, using, offering to sell,
selling, importation and/or distribution into the United States of a Generic Product is covered by
one or more claims of United States Patent Nos. 5,908,838 and 7,790,705 under 35 U.S.C. § 271. The
foregoing admission shall be binding on Teva and admissible against Teva in any dispute or
litigation between the parties regarding the Patent Rights, and Teva will not challenge any such
admission. Teva agrees that from the Effective Date forward, Teva shall not assist any Third
Party in an action to invalidate or render unenforceable any of the Patent Rights, except to the
extent required by court order or other applicable law. ***.

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          2.4 Consent Judgment for Permanent Injunction. Upon the Effective Date, Medicis and
Teva shall cause to be completed, executed and filed with the United States District Court for the
District of Maryland (the “Court”) a Consent Judgment and Permanent Injunction in the form attached
hereto as Exhibit B, and Medicis, with Teva’s agreement, shall move for the entry of the Consent
Judgment and Permanent Injunction by such Court.

          2.5 License Grant.

               2.5.1 Commencing on the applicable Entry Date for a Generic Product, Medicis hereby grants to
Teva a non-exclusive license under the Patent Rights to make, have made (solely as set forth
below), use, sell, offer for sale and import such Generic Product in or for the United States
(where “United States” for purposes of this Agreement shall include its territories and
possessions, including, without limitation, the District of Columbia and the Commonwealth of Puerto
Rico (but excluding direct sales of Generic Product into the Commonwealth of Puerto Rico)) from and
after the applicable Entry Date for such Generic Product (and before such Entry Date for reasonable
commercial preparation as contemplated by Section 2.5.2). Neither party shall enter into any
agreement in conflict with any provisions of this Agreement. Teva will have the right to grant
sublicenses under the licenses granted in this Section 2.5.1 solely for its suppliers to make
Generic Product (and for clarity API therefor) for sale only to Teva.

               2.5.2 ***.

               2.5.3 In exchange for the license rights granted in this Section 2.5, Teva agrees that (a)
during the term of this Agreement, Teva shall not make, use, sell, offer for sale, import or
distribute a Generic Product in the United States except for Generic Product in accordance with the
terms of this Agreement, and (b) in the case of an early termination of this Agreement by Medicis
because of a material, uncured breach by Teva, and continuing until the expiration of the last to
expire of any valid and enforceable Patent Rights covering a Generic Product, Teva shall not make,
use, sell, offer for sale, import or distribute such Generic Product in the United States.

               2.5.4 Teva shall pay to Medicis on a quarterly and product-by-product basis for any Generic
Product sold after the applicable Entry Date *** of all Gross Profit resulting from sales of such
Generic Product made by Teva and covered by a valid, issued, enforceable and unexpired Patent Right
licensed to Teva under this Agreement ***.

               2.5.5 For the *** period following the expiration of Teva’s obligations to make royalty
payments hereunder, Teva shall permit an independent auditor selected by Medicis, familiar with the
generic pharmaceutical industry and reasonably acceptable to Teva, to have access, (i) during
normal business hours, (ii) upon no less than *** prior notice (not more often than *** in any
Calendar Year) and (iii) such access not to unreasonably interfere with the day-to-day operations
of Teva, to those books and records maintained by Teva necessary for
Medicis to verify the accuracy of Teva’s calculation of any Net Sales, and/or Gross Profit;
provided that no such independent auditor shall be retained on a contingency basis. All such
information shall be retained on a confidential basis by such auditor’s firm, and such firm’s use
of such information shall be limited to the aforementioned verification. The fees charged by

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such
auditor shall be paid by Medicis; provided, however, if the audit discloses that the royalties
payable by Teva for the audited period are more than *** of the royalties actually paid during such
period, then Teva shall promptly pay the reasonable fees and expenses charged by such auditor in
addition to any underpayments. Upon Teva’s request, Medicis shall provide Teva with a copy of the
report or other summary of its findings prepared by such auditor.

               2.5.6 Certain Definitions: For the purposes of this Section 2.5:

                    (i) “Gross Profit” means, with respect to any Generic Product sold by Teva, Net Sales of such
Generic Product less the Costs of Goods for such Generic Product.

                    (ii) “Net Sales” means ***.

***.

***.

                    (iii) “Cost of Goods” means ***.

          2.6 No Licenses. Except as expressly set forth herein, nothing in this Agreement
shall be construed as: (a) an obligation to bring or prosecute actions or suits against Third
Parties for infringement of any patent, whether within the Patent Rights or otherwise; (b)
conferring a right to use in advertising, publicity, promotion or otherwise any trademark or trade
name of Medicis; or (c) granting by implication, estoppel or otherwise, any licenses or rights
under the Patent Rights or any other patents.

     3. TERM AND TERMINATION.

          3.1 Term. Subject to Section 3.2, this Agreement shall expire on Generic Product by
Generic Product basis on the expiration of the last to expire of the Patent Rights covering such
Generic Product or its use; provided, however, that if there are no valid, issued patents within
the Patent Rights covering such Generic Product or its use, but there are at such time pending
patent applications within the Patent Rights covering such Generic Product or its use, 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.

          3.2 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.

          3.3 Termination for Challenge. Medicis shall have the right to immediately terminate
this Agreement at any time after the Effective Date in the event Teva or any of its Affiliates
contests or challenges, or supports or assists any Third Party to contest or challenge, with the
patent office or any court, regulatory agency or other forum, Medicis’ ownership of or rights in,
or the validity, enforceability or scope of, any of the Patent Rights, provided that Medicis has
first provided Teva with *** prior written notice of its intent to terminate and Teva

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has not
ceased contesting or challenging, or ceased supporting or assisting any Third Party to contest or
challenge, Medicis’s ownership of or rights in, or the validity, enforceability or scope of, any of
the Patent Rights within such *** period. ***.

          3.4 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 2.1, 2.2, 2.3, 2.6, 3.4, 4, 5.4, 6 and 7 shall survive the
expiration or termination of this Agreement. No other provisions shall survive expiration or
termination of this Agreement.

     4. CONFIDENTIALITY.

          4.1 Confidentiality. For a period of *** following the expiration or earlier
termination of this Agreement, 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 the terms of this Agreement, 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 or the terms of this Agreement.

          4.2 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
4.1.

          4.3 Litigation and Governmental Disclosure. Each party may disclose Confidential
Information of the other party or the terms of this Agreement 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 assist such other party to secure a protective order or confidential treatment of
such Confidential Information required to be disclosed.

          4.4 Publicity. Except as expressly authorized hereunder, neither party shall make any
publicity releases, interviews or other 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

6

 

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. The parties agree that the press release(s) set forth on
Schedule B will be issued as of the Effective Date.

     5. REPRESENTATIONS AND WARRANTIES.

          5.1  Representations. 

               5.1.1 Each party hereby represents and warrants as of the Effective Date 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.

          5.2 Disclaimer of Warranties. Except for those warranties set forth in Section 5.1,
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.

          5.3 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 6 (INDEMNIFICATION), OR A BREACH BY TEVA
OF SECTIONS 2.2 OR 2.3, 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.

          5.4 Equitable Relief. Teva acknowledges and agrees that the obligations and
undertakings of Teva pursuant to Sections 2.2 and 2.3 of this Agreement are reasonable and

7

 

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 Teva’s breach or threatened breach or
failure to comply with such Sections 2.2 and 2.3 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. Teva 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 Sections 2.2 or 2.3 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 Teva an opportunity to cure, in addition to seeking any other remedy
available to Medicis in law or equity. Teva agrees that it shall not challenge any of the
foregoing acknowledgements and agreements concerning injunctive relief in any proceeding brought by
Medicis.

     6.  INDEMNIFICATION.

          6.1 ***.

          6.2 ***.

          6.3 Obligations. A party which intends to claim indemnification under this Section 6
(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 6. 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.

     7. GENERAL PROVISIONS.

          7.1 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

8

 

	 	 	 

	 

	 	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
	 
	 	 
	If to Teva:

	 	Teva Pharmaceuticals USA, Inc.
	 

	 	1090 Horsham Road.
	 

	 	North Wales, PA 19454
	 

	 	Attn: President & CEO
	 

	 	Facsimile: (215) 591-8803
	 
	 	 
	With a copy to:

	 	Teva Pharmaceuticals USA, Inc.
	 

	 	1090 Horsham Road.
	 

	 	North Wales, PA 19454
	 

	 	Attn: General Counsel
	 

	 	Facsimile: (215) 293-6499

     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 7.1.

          7.2 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 Teva and Medicis and their respective permitted successors and assigns.
For the avoidance of doubt, this Agreement shall not supersede, replace or terminate that certain
Amended and Restated Settlement Agreement entered into between the parties and dated November 13,
2009.

          7.3 Waiver. None of the provisions of this Agreement 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.

          7.4 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.

          7.5 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

9

 

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
related to this 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 7.5 shall be void.

          7.6 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. The federal and state courts in
the State of Maryland shall have jurisdiction over the parties hereto in all matters arising
hereunder and the parties hereto agree that the venue with respect to such matters will be a state
or federal court in the State of Maryland.

          7.7 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.

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

          7.9 Attorneys’ Fees. The prevailing party shall be entitled to attorneys’ fees and
its litigation or related expenses in any suit or proceeding with respect to the interpretation or
enforcement of this Agreement.

          7.10 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.

[Remainder of this page intentionally blank]

10

 

     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.

	 	 	 	 	 	 	 	 	 	 	 
	TEVA PHARMACEUTICALS USA, INC.	 	 	 	MEDICIS PHARMACEUTICAL CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David M. Stark
	 	 
	 	By:
	 	/s/ Richard D. Peterson
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	

	 	Name: David M. Stark
	 	 	 	
	 	Name:  Richard D. Peterson	 	 
	

	 	Title: VP & GC
	 	 	 	 
	 	Title: EVP & CFO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David M. Marshall
 

	 	 	 	 	 	 	 	 
	 

	 	Name: David M. Marshall	 	 	 	 	 	 	 	 
	 	 	Title: VP, New Products Portfolio Strategy	 	 	 	 

 

 

EXHIBIT A

Patent Rights

Issued Patents (all U.S.)

     ***

Pending Applications (all U.S.)

     ***

B-1

 

EXHIBIT B

Consent Judgment for Permanent Injunction

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

	 	 	 	 	 	 	 

	MEDICIS PHARMACEUTICAL CORP,
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	Plaintiff,
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	v.
	 	 	)	 	 	 
	 
	 	 	)	 	 	C.A. No. 1:09-cv-03464-JFM
	BARR LABORATORIES, INC. and
	 	 	)	 	 	 
	TEVA PHARMACEUTICALS USA,
	 	 	)	 	 	 
	INC.,
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	Defendants.
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	 
	 	 	)	 	 	 

UNOPPOSED MOTION FOR ENTRY OF CONSENT JUDGMENT AND

PERMANENT INJUNCTION AS TO BARR LABORATORIES, INC. AND

TEVA PHARMACEUTICALS USA, INC.

     Plaintiff Medicis Pharmaceutical Corporation (“Medicis”) and Defendants Barr Laboratories,
Inc. and Teva Pharmaceuticals USA, Inc. (collectively “Defendants”) having met, conferred, and
agreed to resolve their dispute upon execution of a separate Settlement Agreement (“Settlement
Agreement”), Medicis respectfully moves for entry of the executed Consent Judgment and Permanent
Injunction submitted herewith. Defendants do not oppose this motion.

C-1

 

	 	 	 	 	 

	 

	 	 	 	 
	 

	 	 	 	Herbert Better (#00320)
	 

	 	 	 	hbetter@zuckerman.com
	 

	 	 	 	ZUCKERMAN SPAEDER LLP
	 

	 	 	 	100 East Pratt Street
	 

	 	 	 	Suite 2440
	 

	 	 	 	Baltimore, MD 21202-1031
	 

	 	 	 	Telephone: (410) 332-0444
	 

	 	 	 	Facsimile: (410) 659-0436
	 
	 	 	 	 
	 

	 	 	 	Matthew D. Powers (pro hac vice)
	 

	 	 	 	matthew.powers@weil.com
	 

	 	 	 	WEIL, GOTSHAL & MANGES LLP
	 

	 	 	 	201 Redwood Shores Parkway
	 

	 	 	 	Redwood Shores, CA 94065
	 

	 	 	 	Telephone: (650) 802-3000
	 

	 	 	 	Facsimile: (650) 802-3100
	 
	 	 	 	 
	 

	 	 	 	Elizabeth Stotland Weiswasser (pro hac vice)
	 

	 	 	 	elizabeth.weiswasser@weil.com
	 

	 	 	 	Jennifer H. Wu (pro hac vice)
	 

	 	 	 	jennifer.wu@weil.com
	 

	 	 	 	WEIL, GOTSHAL & MANGES LLP
	 

	 	 	 	767 Fifth Avenue
	 

	 	 	 	New York, NY 10153
	 

	 	 	 	Telephone: (212) 310-8000
	 

	 	 	 	Facsimile: (212) 310-8007
	 
	 	 	 	 
	 

	 	 	 	Attorneys for Plaintiff
	 

	 	 	 	Medicis Pharmaceutical Corporation
	Dated:

	 	 	 

C-2

 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

	 	 	 	 	 	 	 
	MEDICIS PHARMACEUTICAL
	 	 	)	 	 	 
	CORPORATION,
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	Plaintiff,
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	v.
	 	 	)	 	 	C.A. No. 1:09-cv-03464-JFM
	 
	 	 	)	 	 	 
	BARR LABORATORIES, INC. and
	 	 	)	 	 	 
	TEVA PHARMACEUTICALS USA,
	 	 	)	 	 	 
	INC.,
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	Defendants.
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	 
	 	 	)	 	 	 
	 
	 	 	)	 	 	 

CONSENT JUDGMENT AND PERMANENT INJUNCTION AS TO

BARR LABORATORIES, INC. AND TEVA PHARMACEUTICALS USA, INC.

          This matter is before the Court on the unopposed motion of Plaintiff Medicis Pharmaceutical
Corporation (“Medicis”) and Defendants Barr Laboratories, Inc. (“Barr”) and Teva Pharmaceuticals
USA, Inc. (“Teva”), collectively (“Defendants”).

          WHEREAS, this Consent Judgment and Permanent Injunction as to Defendants concerns only
Medicis’s claims against Defendants in this civil action no. 1:09-cv-03464-JFM (referred to herein
as the “Litigation”).

          WHEREAS, Medicis requests that this Consent Judgment and Permanent Injunction as to Defendants
be entered in the above-captioned case, and Defendants do not oppose Medicis’s request.

          WHEREAS, Medicis owns United States Patent Nos. 5,908,838 (“the ’838 patent”) and 7,790,705
(“the ’705 patent”).

 

 

          WHEREAS, Defendants submitted Abbreviated New Drug Application No. 65-485 (“Barr’s ANDA”) to
the FDA under 21 U.S.C. § 355(j) seeking to obtain approval to commercially manufacture and sell
generic minocycline HCl extended release tablets for the treatment of acne.

          WHEREAS, in the Litigation, Medicis alleged that Defendants infringed one or more of claims 3,
4, 12, , 13, 19, 21, 23, 25, and 27-34 of the ’838 patent and one or more claims of the ’705 patent
of the ’838 patent under 35 U.S.C. § 271(c)(2) by virtue of Defendants’ submission of Barr’s ANDA
to the FDA.

          WHEREAS, in this Litigation, Medicis alleged that it would be irreparably harmed if Defendants
are not enjoined from infringing or actively inducing or contributing to infringement of one or
more of claims 3, 4, 12, 13, 19, 21, 23, 25, and 27-34 of the ’838 patent and one or more claims of
the ’705 patent.

          WHEREAS, in this Litigation, Medicis requested that this Court enter a permanent injunction
enjoining Defendants from infringing the ’838 and ’705 patents.

          WHEREAS, Medicis and Defendants have reached an agreement to finally settle the Litigation as
set forth in this Consent Judgment and Permanent Injunction as to Barr and Teva and a separate
Settlement Agreement (“Settlement Agreement”) which is contemporaneously and separately being
executed.

          WHEREAS, final settlement of the Litigation will help Medicis and Defendants avoid the
substantial uncertainty and risks involved with prolonged litigation.

C-4

 

          WHEREAS, final settlement of this Litigation will permit Medicis and Defendants to save
litigation costs, as well as adhere to the judicially recognized mandate that encourages the
settlement of litigation whenever possible.

          WHEREAS, final settlement of the Litigation serves the public interest by saving judicial
resources and avoiding the risks to each of Medicis and Defendants associated with infringement.

          WHEREAS, Medicis and Defendants each consent to personal jurisdiction in Maryland for purposes
of enforcing the Settlement Agreement.

          IT IS HEREBY ORDERED, DECREED, and ADJUDGED as follows:

          1. The Court has jurisdiction over Medicis and Defendants and the subject matter of this
Litigation.

          2. Defendants acknowledge Medicis’s ownership and standing to sue for infringement of United
States Patent Nos. 5,908,838 (“the ’838 patent”) and 7,790,705 (“the ’705 patent”).

          3. Defendants acknowledge that the ’838 and ’705 patents are valid and enforceable, as
described more fully in the Settlement Agreement.

          4. Defendants and its affiliates are permanently enjoined as of date hereof from infringing
the ’838 or ’705 patents by the manufacture, use, offer to sell, sale, importation, or distribution
of any current products, or future products having the same strength and dosage form of the current
Solodyn® products, that are the subject of Barr’s ANDA that is not pursuant to a license granted by
Medicis, and from inducing others to infringe the ’838 and ’705 patents by inducing others to
manufacture, use, offer to sell, sale, import, or distribute any current products, or future
products having the same strength and dosage form of the current Solodyn®

C-5

 

products, that are the subject of Barr’s ANDA that is not pursuant to a license granted by
Medicis.

          5. All claims and counterclaims in this Litigation are hereby dismissed without prejudice.

          6. The parties are hereby ordered to comply with the terms of the Settlement Agreement.

          7. Each party shall bear its own costs and attorneys’ fees.

          8. This Court shall retain jurisdiction over Defendants and Medicis for the purpose of
enforcing the terms of this Consent Judgment and Permanent Injunction and over any matters related
to or arising from the interpretation or enforcement of the Settlement Agreement or any legal or
equitable claim concerning the Settlement Agreement by any third party.

IT IS SO ORDERED, DECREED AND ADJUDGED this _____ day of _______, 2011

	 	 	 	 	 
	 	 	 
	 	by:  	 	 
	 	 	The Honorable J. Frederick Motz 	 
	 	 	United States District Judge 	 

C-6

 

	 	 	 	 	 

	 	 	 

	Agreed to:
	 	 
	 
	 	 
	 

	 	 
	Herbert Better (#00320)

	 	[TEVA COUNSEL]
	hbetter@zuckerman.com
	 	 
	ZUCKERMAN SPAEDER LLP
	 	 
	100 East Pratt Street

	 	Attorneys for Defendants Barr Laboratories,
	Suite 2440

	 	Inc. and Teva Pharmaceuticals USA, Inc.
	Baltimore, MD 21202-1031
	 	 
	Telephone: (410) 332-0444
	 	 
	Facsimile: (410) 659-0436
	 	 
	 
	 	 
	Matthew D. Powers (pro hac vice)
	 	 
	matthew.powers@weil.com
	 	 
	WEIL, GOTSHAL & MANGES LLP
	 	 
	201 Redwood Shores Parkway
	 	 
	Redwood Shores, CA 94065
	 	 
	Telephone: (650) 802-3000
	 	 
	Facsimile: (650) 802-3100
	 	 
	 
	 	 
	Elizabeth Stotland Weiswasser (pro hac vice)
	 	 
	elizabeth.weiswasser@weil.com
	 	 
	Jennifer H. Wu (pro hac vice)
	 	 
	jennifer.wu@weil.com
	 	 
	WEIL, GOTSHAL & MANGES LLP
	 	 
	767 Fifth Avenue
	 	 
	New York, NY 10153
	 	 
	Telephone: (212) 310-8000
	 	 
	Facsimile: (212) 310-8007
	 	 
	 
	 	 
	Attorneys for Plaintiff
	 	 
	Medicis Pharmaceutical Corporation
	 	 

C-7

 

SCHEDULE B

Press Release(s)

[Medicis/Teva] today announced they have agreed to terminate all legal disputes between them
relating to SOLODYN® (minocycline HCl, USP) Extended Release Tablets. Pursuant to an agreement
entered into between the parties, Teva has confirmed that Medicis’ patents relating to SOLODYN® are
valid and enforceable, and cover Teva’s activities relating to its generic product under
Abbreviated New Drug Application (ANDA) #65-485. Under the terms of the Agreement, Teva has the
option to market its generic versions of SOLODYN® Extended Release Tablets in 65mg and 115mg
strengths under the SOLODYN® intellectual property rights belonging to Medicis in February 2018, or
earlier under certain conditions, and generic versions of SOLODYN® in 55mg, 80mg and 105mg
strengths under the SOLODYN® intellectual property rights belonging to Medicis in February 2019, or
earlier under certain conditions. Additional terms were not disclosed.

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