Document:

First Amendment to License and Supply Agreement

  
 EXHIBIT 10.74

 Portions of this exhibit marked [*] are requested to be treated confidentially. 

EXECUTION VERSION 
 Dated 27 August 2010 
  

 
 Norgine B.V.

 - and - 
 Salix Pharmaceuticals, Inc. 
  

 
 FIRST
AMENDMENT TO LICENSE AND SUPPLY AGREEMENT 
  

 

COVINGTON & BURLING LLP 

265 Strand 
 London
WC2R 1BH, England 
 Tel +44 (0)20 7067 2000 
 www.cov.com 

  
 THIS FIRST AMENDMENT TO LICENSE AND
SUPPLY AGREEMENT is made the 27th day of August 2010. 
 BETWEEN: 
 (1) NORGINE B.V., a limited liability company under the laws of the Netherlands, with its principal offices at Hogehilweg 7, 1101 CA Amsterdam ZO, The Netherlands (“Licensor”); and

 (2) SALIX PHARMACEUTICALS, INC., a company incorporated in the State of California in the United States of America whose principal
place of business is 1700 Perimeter Park Drive, Morrisville, North Carolina 27560-8404, U.S.A. (“Licensee”). 
 WHEREAS:

 (a) Licensor and Licensee are parties to that certain License and Supply Agreement, dated 7 December 2005 as supplemented by that
certain letter agreement, dated 18 April 2008, between Licensor and Licensee (the “Original Agreement”); 
 (b) Licensor,
together with Norgine Europe B.V., and Licensee are parties to certain litigation with Novel Laboratories, Inc. relating to the Product (as such term is defined in the Original Agreement); and 

(c) Licensor and Licensee desire to settle the aforesaid litigation and in connection therewith to effect pursuant to an amendment to the Original
Agreement certain modifications to the arrangements between them set forth in the Original Agreement. 
 IT IS NOW AGREED AS FOLLOWS:

  

	1.	DEFINITIONS 

  

	 	1.1.	In this Amendment the following definitions shall apply unless the context requires otherwise: 

“Amendment” - this document as may be amended from time to time in accordance with the provisions of this document.

 “Licensee” has the meaning set forth in the first paragraph hereof. 

“Licensor” has the meaning set forth in the first paragraph hereof. 

“Original Agreement” has the meaning set forth in the preamble hereto. 

 

	 	1.2.	Terms defined in the Original Agreement or in Clause 2 of this Amendment are used herein with the same meanings accorded to them in the Original Agreement (as amended
by Clause 2, if relevant) or in Clause 2, as the case may be. 

  

	 	1.3.	This Amendment shall be construed and interpreted in accordance with the provisions set out in Clause 1.2 of the Original Agreement mutatis mutandis.

  

	2.	AMENDMENTS TO DEFINITIONS IN ORIGINAL AGREEMENT 

  

	 	2.1.	Clause 1.1 of the Original Agreement is hereby amended by adding, in the correct place therein as determined by alphabetical order, the following definitions:

  

	 	2.1.1.	“Actavis” – Actavis Inc., a Delaware corporation. 

  

	 	2.1.2.	“Amendment’ – that certain First Amendment to License and Supply Agreement, dated the Amendment Date, between the Parties as may be amended from
time to time in accordance with the provisions of the said document. 

  

	 	2.1.3.	“Amendment Date” – 27 August 2010. 

  

	 	2.1.4.	“Authorized Generic Net Sales” – Net Sales to the extent attributable to sales of an Authorized Generic Product in the Territory.

  

	 	2.1.5.	“Authorized Generic Product” – a generic version of the Product that is manufactured and/or sold under the Initial NDA using a trademark other
than the Trademark. 

  

	 	2.1.6.	“Authorized Generic Product Commencement Date” – the date on which a Third Party (other than Novel, Actavis or their respective Affiliates) files
with the FDA an ANDA or an application under 21 U.S.C. § 355(b)(2) that refers to the Product as the reference-listed drug, provided that if such Third Party withdraws its ANDA or application under 21 U.S.C. § 355(b)(2) prior to
Licensee’s first commercial sale of an Authorized Generic Product, then from and after the date of such withdrawal the Authorized Generic Product Commencement Date shall be deemed not to have occurred in respect of such ANDA or application
under 21 U.S.C. § 355(b)(2) and Licensee may not, so long as such ANDA or application under 21 U.S.C. § 355(b)(2) remains withdrawn, sell or offer to sell, or permit any Affiliate or authorize any Third Party to sell or offer to
sell, an Authorized Generic Product as a result of the withdrawn ANDA or application under 21 U.S.C. § 355(b)(2). 

  

	 	2.1.7.	“Generic Launch Date” – has the meaning set out in Clause 10.6.1. 

 

	 	2.1.8.	“Licensee Released Parties” – has the meaning set out in Clause 19.5.3. 

 

	 	2.1.9.	“Licensor Released Parties” – has the meaning set out in Clause 19.5.1. 

  
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	 	2.1.10.	“Litigation” – that certain lawsuit pending as of the Amendment Date in the United States District Court for the District of New Jersey under the
style Salix Pharmaceuticals, Inc., Norgine B.V., and Norgine 

  

	 	2.1.11.	Europe B.V. v Novel Laboratories, Inc., Civil Case No. 3:08-cv-02311-FLW-TJB. 

 

	 	2.1.12.	“Novel” – Novel Laboratories, Inc., a Delaware corporation. 

 

	 	2.1.13.	“Novel Sublicense Agreement” – that certain Sublicense Agreement, dated the Amendment Date, between Licensee, Norgine Europe B.V., Licensor and
Novel, in the form attached hereto as Schedule 11. 

  

	 	2.1.14.	“Patent Expiry Date” – has the meaning set out in Clause 10.6.1. 

 

	 	2.1.15.	“Settlement Agreement” – that certain Settlement Agreement, dated the Amendment Date, among Novel, Licensee, Licensor, Norgine Europe B.V. and
Actavis. 

  

	 	2.1.16.	“Supply Agreement” – that certain Supply Agreement, dated the Amendment Date, between Licensee, Actavis and Novel, in the form attached hereto as
Schedule 12 (subject to redaction by Licensee of the financial terms from such form prior to its delivery to Licensor). 

  

	 	2.2.	The definition of “Agreement” contained in Clause 1.1 of the Original Agreement is hereby amended by adding at the end thereof before the period the
following: “all as supplemented by that certain letter agreement, dated 18 April 2008, between Licensor and Licensee and amended by the Amendment”. 

 

	 	2.3.	The definition of “ANDA” contained in Clause 1.1 of the Original Agreement is hereby amended by replacing the words “the NDA” with the words
“an NDA”. 

  

	 	2.4.	The definition of “ANDA Date” contained in Clause 1.1 of the Original Agreement is hereby deleted. 

 

	 	2.5.	The definition of “Cost of Manufacturing” contained in Clause 1.1 of the Original Agreement is hereby amended by the replacement of that term with the
term “Cost of Manufacture”. 

  

	 	2.6.	The definition of “Cover” contained in Clause 1.1 of the Original Agreement is hereby amended to read as follows: 

“‘Cover’ (including the variations such as ‘Covered,’ ‘Coverage’ or
‘Covering’) - in respect of a product means where a Valid Claim of a Patent Right in a country would be infringed by the making, using or Commercialisation of the product in a Commercialised form in the country in the absence of a
license under such Patent Right. The determination of whether the product is so Covered by a particular Patent Right shall be made on a country-by-country basis.” 

  
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	 	2.7.	The definition of “Effective Date” contained in Clause 1.1 of the Original Agreement is hereby amended to read in its entirety as follows:

 “‘Effective Date’ - 7 December 2005.” 

 

	 	2.8.	The definition of “Half Year” contained in Clause 1.1 of the Original Agreement is hereby amended by deleting the dates “30 June” and
“31 December” and replacing them with the dates “31 March” and “30 September”, respectively. 

  

	 	2.9.	The definition of “Initial NDA” contained in Clause 1.1 of the Original Agreement is hereby amended by adding at the end thereof before the period the
phrase “, as amended”. 

  

	 	2.10.	The definition of “Invoice Income” contained in Clause 1.1 of the Original Agreement is hereby amended by replacing the reference to “Clause
1004” contained therein with a reference to “Clause 10.4”. 

  

	 	2.11.	The definition of “Licensee IP” contained in Clause 1.1 of the Original Agreement is hereby amended to read in its entirety as follows:

 “‘Licensee IP’ - all Know How and Patent Rights relating to the Product or its manufacture
or Commercialisation or the Lifecycle Management Plan discovered, generated, conceived, reduced to practice or developed or Controlled by Licensee during the Term.” 

 

	 	2.12.	The definition of “Manufacture Date” contained in Clause 1.1 of the Original Agreement is hereby amended to read in its entirety as follows:

 “‘Manufacture Date’ - the date on which Licensee acquires an immediate license to
manufacture under the terms of Clause 11.3 or 11.6. For the avoidance of doubt, the license granted by Licensor to Licensee effective as of the Amendment Date pursuant to Clause 11.6(a) shall constitute an immediate license to manufacture for
purposes of this definition.” 
  

	 	2.13.	The definition of “Net Sales” contained in Clause 1.1 of the Original Agreement is hereby amended by deleting the sentence beginning “Disposal of
Product...” and replacing it in its entirety with the following text: 

 “Disposal of Product or
Authorized Generic Product or use of Product or Authorized Generic Product in Clinical Studies or as free samples in quantities common in the industry for this sort of product shall not give rise to any deemed sale under this Clause.”

  

	 	2.14.	The definition of “Net Sales” contained in Clause 1.1 of the Original Agreement is hereby amended by adding at the end thereof a new paragraph as
follows: 

  
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 “For the avoidance
of doubt, notwithstanding any other provision contained in this definition of Net Sales, sales [*] in Net Sales, nor shall [*] be required to [*] or [*] in respect thereof [*], so long as [*] in respect thereof.” 

 

	 	2.15.	 The definition of “Product” contained in Clause 1.1 of the Original Agreement is hereby amended by replacing the word
“Moviprep” with “MOVIPREP®”, and by the addition of the following sentence at the end
thereof: “For the avoidance of doubt, the term ‘Product’ shall exclude Authorized Generic Product.” 

  

	 	2.16.	The definition of “Projected Sales” contained in Clause 1.1 of the Original Agreement is hereby deleted. 

 

	 	2.17.	The definition of “Royalty Term” contained in Clause 1.1 of the Original Agreement is hereby amended to read in its entirety as follows:

 “‘Royalty Term’ - has the meaning set forth in Clause 10.6.1.” 

 

	 	2.18.	The definition of “Sales Price” contained in Clause 1.1 of the Original Agreement is hereby amended to read in its entirety as follows:

 “‘Sales Price’ - the average sales price for a Unit of Product ([*]) in the Territory in a
given Half Year calculated by dividing (i) the aggregate Net Sales ([*]) in that Half Year by (ii) the number of Units of Product comprised in such aggregate Net Sales ([*]).” 

 

	 	2.19.	The definition of “Trademark Royalty” contained in Clause 1.1 of the Original Agreement is hereby amended by replacing the reference “Clause
10.6” with the reference “Clause 10.7”. 

  

	3.	AUTHORIZED GENERIC PRODUCT 

  

	 	3.1.	The Original Agreement is hereby amended by the replacement of the term “Product” where it is used in each of the following instances with the phrase
“Product and the Authorized Generic Product”: 

  

	 	3.1.1.	Clauses (c) and (d) of the recitals; 1.1 in the definitions of “Applicable Laws” and “Commercialisation Plan”; 2.1.3(iii); 2.1.3(iv)(a);
3.1.5 only in the first instance in which the term “Product” is used; 6.7.1; 6.7.7 only in the first three instances in which the term “Product” is 

  
 [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. 

  
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used; 6.10; 6.11; and 22.1.3 only in the second and third instances in which the term “Product” is used. 

 

	 	3.2.	The Original Agreement is hereby amended by the replacement of the term “Product” where it is used in each of the following instances with the phrase
“Product and Authorized Generic Product”: 

  

	 	3.2.1.	Clause (e) of the recitals only in the first and third instance in which the term “Product” is used; 1.1 in the definition of “Net Sales” only
in the first instance in which “Product” is used; 2.5 only in the first and last instances in which the term “Product” is used; 3.1.4 only in the second instance in which the term “Product” is used; 6.1 only in the
second instance in which the term “Product” is used; 10.14; 11.4.3; 11.4.4; 17.7; 22.1.2; and 22.1.3 only in the first instance in which the term “Product” is used. 

 

	 	3.3.	The Original Agreement is hereby amended by the replacement of the term “Product” where it is used in each of the following instances with the phrase
“Product or the Authorized Generic Product”: 

  

	 	3.3.1.	Clause 6.7.6(i); 6.13.1 only in the first instance in which the term “Product” is used; 6.13.2; 6.13.3; 11.4.5; 18.5; and 20.1 

 

	 	3.4.	The Original Agreement is hereby amended by the replacement of the term “Product” where it is used in each of the following instances with the phrase
“Product or Authorized Generic Product”: 

  

	 	3.4.1.	Clause 1.1 in the definition of “Net Sales” in each instance in which the term “Product” is used prior to the sentence beginning “Disposal of
Product...” in that definition, and excluding the first use of the term “Product” in the definition; 8.1.12; 11.4 only in the first instance in which the term “Product” is used; 11.4.5; 16.3.1; 16.5; 16.6; and 18.8 only
in the second instance in which the term “Product” is used. 

  

	4.	SUPPLY 

  

	 	4.1.	Clause 2.1.3(iv) of the Original Agreement is hereby amended by deleting the phrase “Projected Sales and”. 

 

	 	4.2.	Clause 2.1.3(v) of the Original Agreement is hereby amended by deleting the word “or” after the word “Specification” and replacing it with a comma,
by inserting between the word “manufacture” and the word “of” that appear in the sixth line thereof the phrase “by Licensor”, and by deleting the word “or” at the end thereof. 

 

	 	4.3.	Clause 2.1.3 of the Original Agreement is hereby amended by deleting Clause 2.1.3(vi). 

 

	 	4.4.	Clause 2.2.9 of the Original Agreement is hereby amended by deleting the text thereof and replacing it with the notation “[RESERVED]”.

  
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	 	4.5.	Clause 1 of Schedule 2 of the Original Agreement is hereby amended by deleting the second sentence thereof; and Clause 4.1 of Schedule 2 of the Original Agreement is
hereby amended by deleting the text thereof and replacing it with the notation “[RESERVED]”. 

  

	 	4.6.	The first sentence of Clause 6.2 of the Original Agreement is hereby amended to read in its entirety as follows: 

“Save as specified under Clause 11, Licensee shall until 1 November 2010 obtain all of its requirements for Product from
Licensor.” 
  

	 	4.7.	The first full sentence of Clause 6.7.9 of the Original Agreement is hereby amended by inserting between the word “manufacturing” and the word
“shall” the phrase “in respect of Product supplied to Licensee by Licensor”. 

  

	 	4.8.	Clause 6.14.3 of the Original Agreement is hereby amended by deleting “; and” and replacing that punctuation and word with a period; and Clause 6.14.4 of the
Original Agreement is hereby deleted in its entirety. 

  

	 	4.9.	Clause 8.1.1 of the Original Agreement is hereby amended by inserting between the words “Licensee” and “shall” that appear in the fourth line
thereof the words “by it”, and by replacing the term “NDA” with the term “Initial NDA”. 

  

	 	4.10.	Clause 8.1.2 of the Original Agreement is hereby amended by inserting between the words “Licensee” and “and shall provide” that appear in the third
line thereof the words “by Licensor”. 

  

	 	4.11.	Clause 8.1.3 of the Original Agreement is hereby amended by inserting between the words “Licensee” and “is handled and stored” that appear in the
first line thereof the words “by Licensor”, and by inserting between the words “Product” and “all in accordance” that appear in the final two lines thereof the words “supplied by it to Licensee”.

  

	 	4.12.	Clause 8.1.4 of the Original Agreement is hereby amended by inserting between the words “supply” and “to Licensee” that appear in the third line
thereof the words “by Licensor”. 

  

	 	4.13.	Clause 8.1.5 of the Original Agreement is hereby amended by inserting between the words “made” and “without Licensee” that appear in the second line
thereof the words “in respect of Product supplied to Licensee by Licensor”. 

  

	 	4.14.	Clauses 8.1.6 and 8.1.8 of the Original Agreement are hereby amended by deleting the term “NDA” and replacing it with the term “Initial NDA”.

  

	 	4.15.	Clause 8.1.7 of the Original Agreement is hereby amended by inserting between the words “Product” and “or the Initial NDA” the words “supplied
or to be supplied to Licensee by Licensor”. 

  
 7 

  

	 	4.16.	Clause 8.1.9 of the Original Agreement is hereby amended by inserting between the words “manufactured” and “and procure” that appear in the third
line thereof the words “for supply by Licensor to Licensee”. 

  

	 	4.17.	The second sentence of Clause 8.2 of the Original Agreement is hereby amended by the replacement of the term “Product” therein with the word
“product”. 

  

	 	4.18.	Clause 8 of the Original Agreement is hereby amended by adding a new Clause 8.3 at the end thereof, such new clause to read as follows: 

“Notwithstanding anything to the contrary in this Agreement, Licensor shall have no obligation to manufacture or supply any
Authorized Generic Product or product for sale as an Authorized Generic Product.” 
  

	 	4.19.	The third sentence of Clause 9.1 of the Original Agreement is hereby amended by adding immediately after the phrase “Licensee’s requirements for Product”
the words “from Licensor”; and the fifth sentence of Clause 9.1 of the Original Agreement is hereby amended by adding immediately after the phrase “Product requirements of Licensee” the words “from Licensor”.

  

	 	4.20.	The final sentence of Clause 9.1 of the Original Agreement is hereby amended by inserting the following parenthetical immediately after the phrase “shall not be
less than [*] percent ([*]%)”: 

 “(and if they are less than [*] percent ([*]%) Licensee shall
remain obligated to pay for the full [*] percent ([*]%) of the previous Forecast)”. 
  

	 	4.21.	Clause 9 of the Original Agreement is hereby amended by adding a new Clause 9.13 at the end thereof, such new clause to read as follows: 

“9.13 The Parties have amended the Forecast to reflect the amendments to this Agreement made as a result of the Amendment, with such
amended Forecast attached hereto as Schedule 10.” 
  

	 	4.22.	The last sentence of Clause 10.3 of the Original Agreement is hereby amended to read in its entirety as follows: 

“Where any payment has been made by Licensee under Clause 9.1 in respect of a Half Year at the calculation of the Supply Income for
the Half Year the relevant number of Units of Product in respect of such payment shall be included in the calculation of the Supply Income in respect of such Half Year.” 

 

	 	4.23.	The last sentence of Clause 10.4 of the Original Agreement is hereby amended to read in its entirety as follows: 

 
 [*] Confidential treatment requested; certain information omitted and
filed separately with the SEC. 

  
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 “Invoice Income
in respect of each Half Year shall include any balancing payment made in such Half Year under Clause 9.1.” 
  

	 	4.24.	Clause 10.14 of the Original Agreement is hereby amended by deleting the phrase “(not supplied by Licensor)”. 

 

	 	4.25.	The first sentence of Clause 12.1 of the Original Agreement is hereby amended by inserting between the term “Product” and the word “affecting” in
the third line thereof the phrase “supplied by Licensor”. 

  

	5.	ROYALTY 

  

	 	5.1.	Clause 10.6 of the Original Agreement is hereby amended to read in its entirety as follows: 

“10.6 Royalties shall be payable by Licensee to Licensor as follows: 

10.6.1 Licensee shall pay to Licensor a royalty at the rate of (a) [*] percent ([*]%) of any and all Authorized Generic Net Sales
during the period (the “Royalty Term”) beginning on the Amendment Date and ending on the earlier of (i) the date of expiry of the last to expire of any Valid Claim of any Licensor Patent Rights Covering the Product in the
Territory (the “Patent Expiry Date”) and (ii) the date of the first commercial sale by any Third Party (other than by or on behalf of Novel, Actavis, Gavis Pharmaceuticals, LLC or any of their respective Affiliates or
sublicensees) of a product that refers to the Product as the reference-listed drug in an ANDA or pursuant to an application under 21 U.S.C. § 355(b)(2) (the “Generic Launch Date”); and, (b) if the Generic Launch Date
should precede the Patent Expiry Date, [*] percent ([*]%) of any and all Authorized Generic Net Sales during the period starting on the Generic Launch Date and ending on the Patent Expiry Date. 

10.6.2 In the event that the Licensor is not supplying all the Product requirements of the Licensee under the terms of Clause 11,
Licensee shall pay to Licensor a royalty at the rate of [*] percent ([*]%) of any and all Net Sales during the Royalty Term of Product not supplied by Licensor (excluding, for the avoidance of doubt, Authorized Generic Net Sales).” 

 

	 	5.2.	The first sentence of Clause 10.7 of the Original Agreement is hereby amended to read in its entirety as follows: 

“Where after the expiry of the Royalty Term, Licensor is not supplying all the Product requirements of the Licensee, Licensee shall
pay to Licensor a trademark royalty at the rate of [*] percent ([*]%) of Net Sales of all Product not supplied by 
  
 [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. 

  
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Licensor but sold by Licensee under the Trademark (the “Trademark Royalty”), and the terms of Clauses 10.14 to 10.18 shall apply to such Trademark Royalty.” 

 

	 	5.3.	The last sentence of Clause 10.7 of the Original Agreement is hereby amended by inserting between the term “Royalty” and the word “during” the
phrase “payable under Clause 10.6.2”. 

  

	6.	MANUFACTURE 

  

	 	6.1.	The final sentence of Clause 11.1 of the Original Agreement is hereby amended by replacing the references to “Clause 11.3” in each case with the phrase
“Clause 11.3 or Clause 11.6”. 

  

	 	6.2.	Clause 11.2 of the Original Agreement is hereby amended by deleting the clause following Clause 11.2.2 and replacing it with the following text:

 “ and where this Clause 11.2 applies Licensor shall continue to supply Product under the terms of this
Agreement, unless and until such Second Source has been validated and has commenced and scaled up manufacture to satisfy the requirements for Product of Licensee. Licensee shall provide Licensor with written notice no later than [*] ([*]) Business
Days after the Second Source has been validated and has commenced and scaled up manufacture to satisfy the requirements for Product of Licensee, following which notice (or, in the absence of such notice, the date on which such notice ought to have
been given) Licensor shall have the option (but not the obligation) at any time thereafter upon service of not less than [*] ([*]) days notice in writing to cease to supply Product to Licensee. Licensee shall use Commercially Reasonable Efforts to
cause Novel to qualify, validate and scale up manufacture, and Actavis to supply, by [*]. 
 For the avoidance of doubt,
Licensor (i) hereby expressly consents to and acknowledges the appointment by Licensee pursuant to this Clause 11.2 of Novel as the Second Source and of Novel and Actavis as Licensee’s sub-contractors and to the terms of the Supply
Agreement (excluding those provisions of the Supply Agreement that have been redacted in the version supplied to Licensor), provided that, notwithstanding any provisions in the Supply Agreement, Licensee shall have the right to select and use a
Second Source other than Novel only in accordance with this Clause 11, and (ii) agrees to comply with the provisions of this Clause 11 relating to assistance with technology transfer and the obtaining of Regulatory Approvals necessary for Novel
to act as Second Source, and agrees to do so on a reasonably timely and expeditious basis so as to facilitate and enable the qualification, validation and scale up of 

 
 [*] Confidential treatment requested; certain information omitted and
filed separately with the SEC. 

  
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Novel as Second Source by [*], or as soon thereafter as possible, but in any event by [*]. For avoidance of doubt, (i) no consent is granted by Licensor to any amendment to or waiver of the
Supply Agreement, except as may be subsequently provided by Licensor in a written agreement with Licensee; (ii) Novel and Actavis shall be deemed Licensee’s sub-contractors, and not Licensor’s sub-contractors, for purposes of this
Agreement and, without limiting or qualifying Licensor’s obligations pursuant to clause (ii) of the preceding sentence, as between Licensor and Licensee, Licensee shall be responsible for arranging and coordinating the technology transfer
to Novel and for obtaining any Regulatory Approvals necessary for Novel to act as a Second Source and Actavis to supply Product; and (iii) without limiting Licensor’s obligation to comply with this Clause 11, Licensor makes no
representations, warranties or promises that Novel will be qualified, validated or commence and scale up manufacture, or that Actavis will commence supply, to satisfy the requirements of Licensee for Product.” 

 

	 	6.3.	Clause 11.4.2 of the Original Agreement is hereby amended to read in its entirety as follows: 

“All Product and Authorized Generic Product shall be manufactured in the manner specified in the Initial NDA and in accordance with
GMP and the Specifications and the Packaging and Labelling for any Product or Authorized Generic Product shall accurately identify Licensee or the Second Source as the manufacturer of such Product or Authorized Generic Product, as the case may
be;” 
  

	 	6.4.	Clause 11.4.4 of the Original Agreement is hereby amended by deleting the term “NDA” and replacing it with the term “Initial NDA”.

  

	 	6.5.	Clause 11.5 of the Original Agreement is hereby amended to read in its entirety as follows: 

“Without limiting Licensor’s right to cease supply of Product under Clause 11.2, from and after [*], Licensor shall have the
option (but no obligation) upon service of not less than [*] ([*]) months notice in writing, to expire at the end of a Year, to cease to supply Product to Licensee, under the terms of this Agreement.” 

 

	 	6.6.	Clause 11 of the Original Agreement is hereby amended by adding a new Clause 11.6 and a new Clause 11.7 at the end thereof, such new clauses to read as follows:

  
 [*] Confidential treatment requested; certain
information omitted and filed separately with the SEC. 

  
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 “11.6
Notwithstanding the terms of Clauses 8 and 9, (a) beginning on the Amendment Date, Licensee shall have an immediate license, solely for purposes of validating the Second Source as contemplated by the provisions of Clause 11.2, to make and
manufacture, or have made and manufactured on its behalf by the Second Source pursuant to Clause 11.2, Product and Authorized Generic Product for Licensee’s use in the Territory and (b) from [*], Licensee shall have an immediate license to
make and manufacture, or have made and manufactured on its behalf by the Second Source pursuant to Clause 11.2, (i) Product for its use in the Territory and, (ii) from and after the Authorized Generic Product Commencement Date, Authorized
Generic Product for its use in the Territory. Notwithstanding anything to the contrary herein, Licensee shall have no right to make or manufacture, or have made or manufactured, Authorized Generic Product until the Authorized Generic Product
Commencement Date. 
 11.7 In connection with the appointment by Licensee of Novel as a Second Source pursuant to Clause 11.2,
Licensor hereby agrees (a) to reimburse Licensee for [*] [([*]) of each payment required to be made by Licensee to Novel pursuant to Section 2.9 of the Supply Agreement, provided that in no event shall Licensor be responsible for more than
[*] dollars ($[*]) in respect of such payments and notwithstanding anything to the contrary herein, Licensor shall have no obligation to pay or reimburse Licensee for any other costs relating to Novel or Actavis, including without limitation in
respect of Novel’s scale-up activities; and (b) that the provisions of Clause 11.2.1(iv) shall not apply, but that instead Licensor shall bear its own costs in effecting the technology transfer contemplated by Clause 11.2.1(iii). Licensor
shall pay any amounts due to Licensee pursuant to clause (a) of the preceding sentence within [*] ([*]) days of the date of its receipt of Licensee’s invoice therefor accompanied by evidence of Licensee’s payment of such amounts to or
on behalf of Novel.” 
  

	7.	EXCLUSIVITY 

 Clause 13 of
the Original Agreement is hereby amended to read in its entirety as follows: 
 “During the term of this Agreement neither
Licensee nor any Salix Affiliate will distribute, market, sell or otherwise Commercialise in the Territory any pharmaceutical product which is approved for use for the Indication (other than the

  
 [*] Confidential
treatment requested; certain information omitted and filed separately with the SEC. 

  
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Product and the Authorized Generic Product), provided that nothing contained herein shall prevent Licensee or any Salix Affiliate from the development, distribution, marketing, sale or other
exploitation of Visicol.” 
  

	8.	INTELLECTUAL PROPERTY - LICENSES 

  

	 	8.1.	The first sentence of Clause 16.4 of the Original Agreement is hereby amended to read in its entirety as follows: 

“Licensor acknowledges that Licensee alone has the right to Commercialise the Product and any Authorized Generic Product in the
Territory and Licensor shall not itself either directly or indirectly effect any Commercialisation of the Product or any Authorized Generic Product in the Territory, during the Term.” 

 

	 	8.2.	Clause 16 of the Original Agreement is hereby amended by adding new Clauses 16.7, 16.8, and 16.9 thereto, such Clauses to read as follows: 

“16.7 

16.7.1 Licensor expressly consents to the sub-license by Licensee of the Norgine Patents (as defined in the Novel Sublicense Agreement)
effected pursuant to the Novel Sublicense Agreement. For avoidance of doubt, no consent is granted by Licensor to any amendment to or waiver of the Novel Sublicense Agreement, except as may be subsequently provided by Licensor in a written agreement
with Licensee. 
 16.7.2 Licensee expressly consents to the license by Licensor of the Norgine Patents effected pursuant to the
Novel Sublicense Agreement. For avoidance of doubt, no consent is granted by Licensee to any amendment to or waiver of the Novel Sublicense Agreement, except as may be subsequently provided by Licensee in a written agreement with Licensor.

 16.7.3 Each Party explicitly agrees that, except for any claims that may be brought by Novel under or in respect of the Novel
Sublicense Agreement, neither Party shall have any liability or obligation of any kind or nature to the other Party (including, in the case of Licensee, under Clause 20.1 and, in the case of Licensor, under Clause 20.2) in respect of the exercise by
Novel of its rights under the Novel Sublicense Agreement or the making, importation, use, sale or offer for sale by Novel of the generic version of the Product pursuant thereto. 

16.7.4 Except only and to the extent contemplated by Clauses 17.5 and 17.6, Licensee shall have no obligation in respect of the
enforcement of the Novel Sublicense Agreement. 

  
 13 

  
 16.8 Licensee agrees
that, from the Amendment Date until the date on which the Start Date (as such term is defined in the Novel Sublicense Agreement) has occurred pursuant to the provisions of Section 1.36(a), (b), (c), or (d) of the Novel Sublicense
Agreement, it will take such steps as are necessary to avoid the occurrence of the Start Date pursuant to the provisions of Section 1.36(e) of the Novel Sublicense Agreement. 

16.9 Subject to the terms and conditions of this Agreement, Licensee shall have the right, directly or through an Affiliate or
sublicensee, to manufacture and have manufactured by the Second Source, and sell and have sold, one, and only one, Authorized Generic Product in the Territory commencing on the Authorized Generic Product Commencement Date. For avoidance of doubt,
except for the Novel Sublicense Agreement and the licenses and rights granted by Licensor and Licensee to Novel thereunder and without in any way limiting the provisions of Clause 16.7, no right or license is granted to Licensee herein to
manufacture or sell any version of the Product under an ANDA.” 
  

	9.	TRADEMARKS 

  

	 	9.1.	Clause 10.7 of the Original Agreement is hereby amended by deleting the third sentence thereof. 

 

	 	9.2.	Clause 14.2 of the Original Agreement is hereby amended by deleting the first sentence thereof and replacing it with the following: 

“Licensee agrees to Commercialise the Product solely under the Trademark. (For the avoidance of doubt, it is acknowledged and agreed
that the provisions of the preceding sentence do not apply in respect of any Authorized Generic Product.)” 
  

	 	9.3.	Clause 14.5 of the Original Agreement is hereby amended by adding the following text at the end thereof: 

“For the avoidance of doubt, the Parties acknowledge and agree that Packaging and Labelling of, or prescribing or other informational
materials supplied or distributed by Licensee in respect of, any Product supplied to Licensee by Novel and/or Actavis pursuant to the Supply Agreement, or otherwise not supplied to Licensee by Licensor hereunder, shall not contain any statement or
other indication that such Product was manufactured or supplied by Licensor.” 
  

	 	9.4.	Clause 14.8 of the Original Agreement is hereby amended by deleting the text thereof and replacing it with the notation “[RESERVED]”.

  
 14 

  

	 	9.5.	Clause 14.9 of the Original Agreement is hereby amended to read in its entirety as follows: 

“Licensee shall not, nor shall it permit any sublicensee to, use any trademarks or trade names (other than the Trademarks for the
Product) so resembling the Trademarks so as to be likely to cause confusion, dilution, or deception. Licensee shall not register the Trademarks in its own name nor attempt to register any trademarks, marks, or trade names confusingly similar to the
Trademarks. Licensee may not, nor shall it permit any Affiliate or Third Party to, use in connection with any Authorized Generic Product any trademark similar to or based in whole or in part on the Trademark.” 

 

	 	9.6.	Clause 14 of the Original Agreement is hereby amended by adding a new Clause 14.11 thereto, such Clause to read as follows: 

“14.11 The provisions of this Clause 14 (other than Clause 14.9) shall not apply in respect of the exercise by Novel of its rights
under the Novel Sublicense Agreement or the making, importation, use, sale or offer for sale by Novel of a generic version of the Product pursuant thereto.” 
  

	10.	INTELLECTUAL PROPERTY - MAINTENANCE, PROSECUTION AND DEFENCE 

 Clause 17.1 of the Original Agreement is hereby amended to read in its entirety as follows: 
 “Licensor shall at its own cost and expense be solely responsible for the filing, prosecution and maintenance of Licensor Patent Rights and the Trademarks using reasonable endeavours to prosecute to
grant in the Territory all patent applications forming part of Licensor Patent Rights, including the conduct of any claims or proceedings relating to them (including but not limited to any interference, reissue or re-examination or opposition or
revocation proceedings); provided, however, that Licensor shall not file or cause to be made any filing in respect of new Patent Rights claiming priority benefit of United States patent application number 10/693,328 filed October 24,
2003, now United States patent number 7,169,381 in respect of the Product or Authorized Generic Product in the Territory without first having obtained the written consent of Licensee, such consent, not to be unreasonably withheld, delayed or
conditioned, to be provided or refused within ten (10) Business Days of written notice from Licensor giving reasonable details of the relevant filing (and to be deemed provided if it is not refused during such period). With respect to any other
filing of Patent Rights in respect of the Product or Authorized Generic Product in the Territory, Licensor shall provide Licensee a copy of any such filing 

  
 15 

 
reasonably in advance of submission to the U.S. Patent and Trademark Office and shall reasonably consider any comments Licensee may have to such filing. Licensor shall keep Licensee promptly
informed of all filings made for Licensor Patent Rights and the Trademarks including sending Licensee a copy of any such filing and otherwise shall keep Licensee informed of all material developments in relation to the Licensor Patent Rights and the
Trademarks and shall, upon Licensee’s request, provide Licensee with copies of relevant documents related to the filing, prosecution and maintenance of the Licensor Patent Rights and the Trademarks.” 

 

	11.	LIFECYCLE MANAGEMENT PLAN AND COMMERCIALISATION OBLIGATIONS 

 Clause 2 of the Original Agreement is hereby amended by adding a new Clause 2.6 at the end thereof, such new clause to read as follows: 

“2.6 Promptly following the Amendment Date, the JSC shall convene to review and update the Lifecycle Management Plan and
Commercialisation Plan as then in effect in order to reflect and take into account the changes made to this Agreement by the Amendment and the related arrangements between the Parties and Novel. The JSC shall review and update the Lifecycle
Management Plan and the Commercialisation Plan in good faith in accordance with the terms of this Agreement.” 
  

	12.	WARRANTIES AND UNDERTAKINGS 

 Clause 19 of the Original Agreement is hereby amended by adding new Clauses 19.5, 19.6 and 19.7, such clauses to read as follows: 
 “19.5 With effect as of the Amendment Date, notwithstanding any other provision of this Agreement: 
 19.5.1 Licensee, on behalf of itself and its Affiliates and its and their respective predecessors, successors, assigns, agents, officers, employees and representatives hereby fully, finally and
irrevocably relinquish, release and discharge Licensor and its Affiliates and its and their respective predecessors, successors, assigns, agents, officers, employees and representatives (“Licensor Released Parties”) from any and all
claims, demands, damages, liabilities, obligations and causes of action, in law or at equity, arising out of or relating to any of the following, to the extent (but only to the extent) the same exist as of the Amendment Date and the relevant facts
relating thereto have been disclosed by Licensor to Licensee or its advisors in connection with the Litigation prior to execution of the Amendment (but excluding for such purpose any facts disclosed by Licensor to Licensee’s advisors (but not
Licensee) which Licensor did not, prior to the Amendment Date, 

  
 16 

 
authorize or permit such advisors to disclose to Licensee), have been disclosed to Licensee as part of discovery or other disclosures in the Litigation as of or prior to the Amendment Date, or
are known by Licensee as of the Amendment Date: (i) any breach by Licensor of any representations, undertakings or warranties in this Agreement; (ii) the conduct of the Litigation by Licensor prior to the Amendment Date; or (iii) the
defence of the Litigation by Licensor prior to the Amendment Date. 
 19.5.2 The provisions of Clause 19.5.1 shall not apply in
respect of any claim that any Licensee Released Party may have against any Licensor Released Party to the extent arising from or relating to any claim that may be made or brought by any Third Party against any Licensee Released Party seeking damages
or other monetary award or payment in respect of [*] by such [*] in respect of [*] with respect to [*]. 
 19.5.3 Licensor, on
behalf of itself and its Affiliates and its and their respective predecessors, successors, assigns, agents, officers, employees and representatives hereby fully, finally and irrevocably relinquish, release and discharge Licensee and its Affiliates
and its and their respective predecessors, successors, assigns, agents, officers, employees and representatives (“Licensee Released Parties”) from, any and all claims, demands, damages, liabilities, obligations and causes of action,
in law or at equity, arising out of or relating to any of the following, to the extent (but only to the extent) the same exist as of the Amendment Date and the relevant facts relating thereto have been disclosed by Licensee to Licensor or its
advisors in connection with the Litigation prior to execution of the Amendment (but excluding for such purpose any facts disclosed by Licensee to Licensor’s advisors (but not Licensor) which Licensee did not, prior to the Amendment Date,
authorize or permit such advisors to disclose to Licensor), have been disclosed to Licensor as part of discovery or other disclosures in the Litigation as of or prior to the Amendment Date, or are known by Licensor as of the Amendment Date:
(i) any breach by Licensee of any representations, undertakings or warranties in this Agreement; (ii) the conduct of the Litigation by Licensee prior to the Amendment Date; or (iii) the defence of the Litigation by Licensee prior to
the Amendment Date. 
 19.5.4 The provisions of Clause 19.5.3 shall not apply in respect of any claim that any Licensor Released
Party may have against any Licensee Released Party to the extent arising from or relating to any claim that may be made or brought by any Third Party against any Licensor Released Party seeking damages or other monetary award or payment in respect
of 
  
 [*] Confidential
Treatment requested; certain information omitted and filed separately with the SEC. 

  
 17 

 
[*] by such [*] in respect of [*] with respect to [*]. 
 19.6 Licensee
represents and warrants that as of the Amendment Date, to its knowledge, neither it nor any of its Affiliates has any claim, demand, or cause of action arising from or based upon facts existing as of the Amendment Date against any Licensor Released
Party that is not relinquished, released and discharged pursuant to Clause 19.5.1, excluding, for such purpose, any claim, demand or cause of action described in Clause 19.5.2. 
 19.7 Licensor represents and warrants that as of the Amendment Date, to its knowledge, neither it nor any of its Affiliates has any claim, demand, or cause of action arising from or based upon facts
existing as of the Amendment Date against any Licensee Released Party that is not relinquished, released and discharged pursuant to Clause 19.5.3, excluding, for such purpose, any claim, demand or cause of action described in Clause 19.5.4.”

  

	13.	INDEMNIFICATION 

  

	 	13.1.	Clause 20.1 of the Original Agreement is hereby amended by adding between the words “subject to Clauses” and “20.3” in the first line thereof the
number and punctuation “16.7,”. 

  

	 	13.2.	Clause 20.2 of the Original Agreement is hereby amended by adding between the words “subject to Clauses” and “20.3” in the first line thereof the
clause reference and punctuation “16.7,”, by deleting the term “NDA” and replacing it with the term “Initial NDA”, and by adding between the words “Affiliates or sub-contractors” and “to supply
Product” the following text: 

 “(it being acknowledged and agreed by the Parties for such purpose that
Novel and Actavis are, for purposes of the supply of Product to Licensee pursuant to the Supply Agreement, Licensee’s, and not Licensor’s, sub-contractors)”. 

 

	14.	CONSEQUENCES OF TERMINATION 

  

	 	14.1.	Clause 22.1 of the Original Agreement is hereby amended by the addition immediately after the words “Clause 21.3” and before the comma in the third line
thereof the words “or by operation of Clause 21.1”. 

  

	 	14.2.	Clause 22.1.7 is hereby amended to read in its entirety as follows: 

 “shall have no further licences under this Agreement (with the effect that all sub-licenses granted by Licensee shall automatically cease, other than for the Novel Sublicense, which shall be assigned
to Licensor, and hereby is assigned to 
  
 [*] Confidential Treatment requested; certain information omitted and filed separately with the SEC. 

  
 18 

 
Licensor, effective on the date of such termination) and shall not after the effective date of termination itself use, license or otherwise exploit the Licensor IP.” 

 

	15.	SCHEDULES 

  

	 	15.1.	The Original Agreement is hereby amended by adding three new Schedules thereto, Schedule 10 (Revised Forecast), Schedule 11 (Novel Sublicense Agreement), and Schedule
12 (Supply Agreement (Redacted)), each such Schedule to consist of the text and other material attached to this Amendment and designated for such Schedule. 

 

	16.	FILINGS; CONFIDENTIALITY AND NON-DISCLOSURE 

  

	 	16.1.	Licensor and Licensee each agrees to make such filings in respect of this Amendment and the other agreements being executed by Licensor, Licensee and other persons in
connection herewith as may be required by Applicable Laws, including those filings with the United State Federal Trade Commission and the United States Department of Justice required by Section 1112 of Subtitle B of Title XI of the United
States Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Each of the Licensor and Licensee agrees that filings contemplated by the preceding sentence shall be permitted to be made by the other notwithstanding any provision
contained in Clauses 18.6 or 18.9 of the Original Agreement to the contrary. 

  

	 	16.2.	Subject to Clause 16.1, disclosure of this Amendment and its terms shall be governed by the provisions of Clause 18 of the Original Agreement, including Clauses 18.6
and 18.9 of the Original Agreement, mutatis mutandis. 

  

	17.	ASSIGNMENT 

 This
Amendment shall be binding upon and inure to the benefit of the successors in interest of the respective party hereto. Neither this Amendment nor any interest hereunder shall be assignable (i) by either party hereto separately from the Original
Agreement or (ii) otherwise except as permitted by Clause 25 of the Original Agreement. 
  

	18.	GOVERNING LAW AND JURISDICTION 

 The interpretation and construction of this Amendment shall be governed by the laws of England excluding any conflict or choice of law rule or principle that might otherwise refer construction or
interpretation of this Amendment to the substantive law of another jurisdiction. Any dispute arising out of or relating to the existence, negotiation, validity, formation, interpretation, breach, performance or application of this Amendment shall be
subject to the non-exclusive jurisdiction of the courts of England and Wales. 
  

	 	18.1.	 Licensee with respect to the subject matter thereof. This Amendment supersedes all prior agreements, whether written or oral, with respect to the
subject matter of this Amendment. Each of the parties hereto confirms that it is not relying on any representations, warranties or covenants of the other 

  
 19 

	 	 
except as specifically set out in this Amendment. Nothing in this Amendment is intended to limit or exclude any liability for fraud. 

 

	 	18.2.	The Original Agreement, as amended by this Amendment, is hereby ratified by the parties hereto and as so amended shall continue in full force and effect.

  

	 	18.3.	If any provision of this Amendment is held to be invalid, illegal or unenforceable, in any respect, then, to the fullest extent permitted by Applicable Laws and if the
rights or obligations of the parties hereto will not be materially and adversely affected: (i) such provision will be given no effect by the parties hereto and shall not form part of this Amendment, (ii) all other provisions of this
Amendment shall remain in full force and effect, and (iii) the parties hereto shall use their best efforts to negotiate a provision in replacement of the provision held invalid, illegal or unenforceable that is consistent with Applicable Laws
and achieves, as nearly as possible, the original intention of the parties hereto. To the fullest extent permitted by Applicable Laws, the parties hereto waive any provision of law that would render any provision of this Amendment invalid, illegal
or unenforceable in any respect. 

  

	19.	ENGLISH LANGUAGE 

 This
Amendment is written and executed in the English language. Any translation into any other language shall not be an official version of this Amendment and in the event of any conflict in interpretation between the English version and such
translation, the English version shall prevail. 
  

	20.	AMENDMENT 

 Any amendment
or modification of this Amendment must be in writing and signed by authorized representatives of both parties hereto. 
  

	21.	NO BENEFIT TO THIRD PARTIES 

 The provisions of this Amendment are for the sole benefit of the parties hereto and their successors and permitted assigns, and they shall not be construed as conferring any rights in any other persons. A
person who is not a party to this Amendment (including any employee, officer, agent, representative or subcontractor of either party hereto) has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Amendment
but this does not affect any right or remedy of a Third Party which exists or is available apart from the said Act. 
  

	22.	FURTHER ASSURANCE 

 Each
party hereto shall perform all further acts and things and execute and deliver such further documents as may be necessary or as the other party hereto may reasonably require to implement or give effect to this Amendment. Without limiting the
foregoing, each party hereto shall take any and all such further steps, perform all further acts and things and execute and deliver such further agreements and other documents as may be required or necessary to conform the agreements between the
parties set forth in the Original Agreement as amended by this Amendment to the 

  
 20 

 
conditions and requirements of the Novel Sublicense Agreement, the Supply Agreement, and the Settlement Agreement and the obligations of the parties hereto thereunder. 

 

	23.	EXPENSES 

 Each party
hereto shall pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such party incidental to the negotiation, preparation, execution and delivery of this Amendment. 

 

	24.	OTHER AGREEMENTS 

  

	 	24.1.	Simultaneously herewith, Licensee and Licensor are entering into the Novel Sublicense Agreement with Novel and Norgine Europe B.V., Licensee is entering into the Supply
Agreement with Actavis and Novel, and Licensor and Licensee are entering into the Settlement Agreement with Novel, Norgine Europe B.V. and Actavis. The effectiveness of this Amendment is explicitly conditioned on the simultaneous execution and
delivery by each of the parties thereto of each and every one of the aforesaid agreements. 

  

	 	24.2.	Sections 2 through 15 of this Amendment shall become effective only upon the occurrence of the Consent Judgment Entry Date, as such term is defined in the Settlement
Agreement. For the avoidance of ambiguity, in the event there is no Consent Judgment Entry Date, the provisions of Sections 2 through 15 of this Amendment shall never become effective. 

 

	25.	COUNTERPARTS 

 This
Amendment may be executed in two counterparts, each of which shall be deemed an original and both of which taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment delivered by facsimile
or other electronic transmission shall be effective as an original executed signature page. 
 [Signatures appear on the next
page.] 

  
 21 

  
 IN WITNESS WHEREOF the Licensor
and Licensee have executed this Amendment the day and year first above written. 
  

			
	Signed by        Carolyn J. Logan	    	)
		
	for and on behalf of	    	)
		
	SALIX PHARMACEUTICALS, INC.	    	)
		
	Signed by        Frank P. Nooteboom	    	)
		
	for and on behalf of	    	)
		
	NORGINE B.V.	    	)

  
 Signature Page to First Amendment to License and Supply Agreement 

  
 22 

  
 SCHEDULE 10

 Revised Forecast 
  

																			
								
		 		  		  		  		  		  		  	
								
	 	 	 	  	 	  	 [*]

(months [*])
	  	 	  	 	  	 	  	 
	  	 	
[*]                       
     
	  	 Jun-10
	  	 Jul-10
	  	 Aug-10
	  	 Sep-10
	  	 Oct-10
	  	 Nov-10
	  	 Dec-10
	  	 
										
		 		  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	
										
		 	 purchase order number
	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	
										
		 	 delivery date
	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	
								
	 	 	 	  	 	  	 [*]

(months [*])
	  	 	  	 	  	 	  	 
	  	 	
[*]                       
     
	  	 Jun-10
	  	 Jul-10
	  	 Aug-10
	  	 Sep-10
	  	 Oct-10
	  	 Nov-10
	  	 Dec-10
	  	 
										
		 		  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	
										
		 	 purchase order number
	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	
										
		 	 delivery date
	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	[*]	  	

 Forecast for [*] beginning [*] and [*] is [*]. 
 This Forecast is premised on the Parties’ current expectations that Novel will be qualified and scaled up to provide Licensee’s needs for Product by [*]. 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC. 

  
 SCHEDULE 11

 Novel Sublicense Agreement 

  
 SCHEDULE 12

 Supply Agreement (Redacted)Settlement Agreement

  
 Exhibit 10.75

 Portions of this exhibit marked [*] are requested to be treated confidentially. 

Execution Version 
 Dated September 29, 2010 
  

 
 Salix
Pharmaceuticals, Inc. 
 - and - 
 CDC III, LLC 
 - and - 

A general partnership 
 of 
 Craig Aronchick 

William H. Lipshutz 
 and 
 Scott H. Wright 

- and - 

Novel Laboratories, Inc. 
 - and - 
 Actavis Inc. 

 
  

SETTLEMENT AGREEMENT 
 (OSMOPREP®) 
  

 

  
 This Settlement
Agreement, dated as of September 29, 2010, is by and among: Salix Pharmaceuticals, Inc., a California corporation (“Salix”), CDC III, LLC, a Delaware limited liability company (“CDC III”; and, together with
Salix, the “Plaintiffs”); a general partnership of Craig Aronchick, William H. Lipshutz, and Scott H. Wright (the “General Partnership”); Novel Laboratories, Inc., a Delaware corporation (“Novel”);
and Actavis Inc., a Delaware corporation (“Actavis”). Salix, CDC III, the General Partnership, Novel, and Actavis are each sometimes referred to herein individually as a “Party” and are referred to collectively as
the “Parties.” 
 WITNESSETH: 
 WHEREAS, Salix is the exclusive licensee in the United States (as defined below) in the Field of Use (as defined below) of the ‘346 Patent (as defined below) relating to and protecting OSMOPREP®,
a pharmaceutical product indicated for cleansing of the colon as a preparation for a colonoscopy procedure in adults 18 years of age and older; and 
 WHEREAS, Salix is the owner of the ‘075 Patent (as defined below) relating to and protecting the OSMOPREP® product; and 
 WHEREAS, Salix markets OSMOPREP® in the United States pursuant to New Drug Application (“NDA”) No. 21-892; and 

WHEREAS, the Plaintiffs and Novel (collectively, the “Litigation Parties”) are involved in litigation, Civil Action
No. 3:08-04628 (FLW) (LGH) (D.N.J.) (the “Action”) concerning, inter alia, the validity of the ‘346 Patent, as well as the infringement by Novel of the ‘346 Patent resulting from Novel’s requesting
approval from the United States Food and Drug Administration (“FDA”) for the distribution and sale of a generic version of Salix’s 

  
 2 

 
OSMOPREP® product prior to expiry of the ‘346 Patent pursuant to Abbreviated New Drug Application (“ANDA”) No. 79-247; and 

WHEREAS, in the absence of this Settlement Agreement, Salix would initiate a new litigation proceeding relating to the infringement by
Novel of the ‘075 Patent that arises from Novel’s having requested approval from the FDA for the distribution and sale of a generic version of Salix’s OSMOPREP product prior to expiry of the ‘075 Patent pursuant to ANDA
No. 79-247; and 
 WHEREAS, in the Action, the Plaintiffs have asserted claims against Novel; and 

WHEREAS, in the Action, Novel has asserted defenses, counterclaims and/or crossclaims against the Plaintiffs challenging the validity
and/or infringement of the ‘346 Patent; and 
 WHEREAS, Novel and Actavis have entered into certain arrangements in respect
of the subject matter of the Action that are sufficient to make Actavis a necessary party to any settlement arrangements in respect of the Action; and 
 WHEREAS, the General Partnership, as the initial licensor of the ‘346 Patent to Salix’s predecessor in interest, retains certain rights in respect of the ‘346 Patent that are sufficient to
make the General Partnership a necessary party to any settlement arrangements in respect of the Action; and 
 WHEREAS, the
Parties now seek to resolve the Action without further litigation; 
 NOW THEREFORE, for good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows: 

  
 3 

  
 ARTICLE 1:
DEFINITIONS; INTERPRETATION 
 1.1. Capitalized terms used in this Settlement Agreement have the meanings defined in the
text hereof. 
 1.2. Unless the context requires otherwise, words referred to in the singular include the plural and vice-versa,
the words “include,” “includes” and “including” will be deemed to be followed by the phrase “without limitation” (unless already present), the words “herein,” “hereof” and
“hereunder,” and words of similar import, will be construed to refer to this Settlement Agreement in its entirety and not to any particular provision hereof, and the word “or” is used in the inclusive sense (i.e., and/or).

 1.3. All times referred to in this Settlement Agreement are local time in New York, New York. 

1.4. The term “Affiliate” means, with respect to a Person, any Person that Controls, is Controlled by or is under common
Control with such first Person. For purposes of this definition only, “Control” means (a) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting
securities, by contract relating to voting rights or corporate governance or otherwise, or (b) to own, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities, or other voting ownership interest, of a
Person. 
 1.5. The term “Ancillary Agreements” means the Sublicense Agreement and the Supply Agreement.

 1.6. The term “Approved OSMOPREP® Product” means any product that is approved for distribution
under NDA No. 21-892. 

  
 4 

  
 1.7. The term
“Business Day” means a day other than a Saturday or Sunday on which the office of the clerk of the District Court is open for the conduct of routine business. 
 1.8. The term “District Court” means the United States District Court in which the Action is pending. 
 1.9. The term “Field of Use” means the field of colonic purgatives and laxatives. 
 1.10. The term “Majority-Controlled Affiliate” (a) means, with respect to a Person, any Person that owns, directly or indirectly, more than fifty percent (50%) of the
outstanding voting securities, or other voting ownership interest, of such Person; any Person of which the first Person owns, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities, or other voting ownership
interest, of such Person; or any Person of which a Person owning, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities, or other voting ownership interest, of the first Person owns , directly or indirectly,
more than fifty percent (50%) of the outstanding voting securities, or other voting ownership interest, of such Person; and, (b) with respect to Novel, includes GAVIS Pharmaceuticals, LLC. 

1.11. The term “Novel Proposed Product” means a drug product containing monobasic sodium phosphate and dibasic sodium
phosphate that refers to the Approved OSMOPREP® Product as the reference-listed drug in an ANDA or pursuant to an application under 21 U.S.C. § 355(b)(2). 
 1.12. The term “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust,
joint stock company, trust, incorporated association, joint venture or 

  
 5 

 
similar entity or organization, including a government or political subdivision, department or agency of a government. 
 1.13. The term “Settlement Documents” means this Settlement Agreement, the Consent Judgment, and the Ancillary Agreements. 

1.14. The term “Start Date” has the meaning set forth in the Sublicense Agreement. 

1.15. The term “Sublicense Agreement” means the Sublicense Agreement, dated the Signing Date, between Salix, CDC III,
the General Partnership and Novel. 
 1.16. The term “Supply Agreement’ means the Supply Agreement, dated the
Signing Date, between Salix and Novel. 
 1.17. The term “Third Party” means any Person that is not a Party or
an Affiliate of a Party. 
 1.18. The term “‘346 Patent” means United States patent number 5,616,346.

 1.19. The term “United States” means the United States of America, its territories and possessions,
including the Commonwealth of Puerto Rico. 
 1.20. The term “‘075 Patent” means United States patent
number 7,687,075. 
 ARTICLE 2: CONSENT JUDGMENT 
 2.1. As soon as practicable but in any event no more than three (3) Business Days after the date of signature of the last Party to sign this Settlement Agreement (such date, the “Signing
Date”), and subject to the confidentiality provisions of Section 8.1, counsel for the Litigation Parties shall execute a “Consent Judgment” in the form attached hereto as Exhibit A and shall file it in the
District Court. 
 2.2. If for any reason the District Court raises an objection to the Consent Judgment as set forth in
Exhibit A or requires that the Litigation Parties modify the Consent 

  
 6 

 
Judgment before it will enter it as an order of the court, or if after ten (10) Business Days the District Court has otherwise failed to enter the Consent Judgment as an order of the court,
the Parties agree to confer promptly in good faith and to use commercially reasonable efforts to modify the Consent Judgment or take such other action consistent with this Settlement Agreement and the Ancillary Agreements as is required to secure
entry of the Consent Judgment as drafted or with agreed-upon modifications. If such commercially reasonable efforts have failed to secure entry of the Consent Judgment within the thirty (30) Business Days following the date on which the Consent
Judgment is filed with the District Court, then, notwithstanding anything herein to the contrary, this Settlement Agreement shall be null and void and have no legal effect, save for Section 6.1(a), (b), (c) and (d), Article 7, and all of
Article 8 except Sections 8.11 and 8.14(d), each of which provisions shall continue in full force and effect. 
 2.3. The date
on which the Consent Judgment is entered by the District Court, whether with or without modification as provided for in Section 2.2, shall be the “Consent Judgment Entry Date”. 

ARTICLE 3: MUTUAL RELEASES 
 3.1. In settlement of disputed claims in the Action, and in consideration of the representations, warranties and covenants contained in this Settlement Agreement, subject to and effective only upon entry
of the Consent Judgment (whether with or without modification as provided for in Section 2.2), the Plaintiffs, on behalf of themselves and their Affiliates and their and their Affiliates’ respective predecessors, successors, assigns,
agents, officers, employees and representatives (collectively, the “Plaintiff Releasees”), and the General Partnership, on behalf of itself and its Affiliates and its and their Affiliates’ respective predecessors, successors,
assigns, agents, officers, employees and representatives (collectively, the “General Partnership Releasees”), hereby fully, finally and irrevocably relinquish, release and discharge Novel and its

  
 7 

 
Affiliates and its and their respective predecessors, successors, assigns, agents, officers, employees and representatives (collectively the “Novel Releasees”) and Actavis and
its Affiliates and its and their respective predecessors, successors, assigns, agents, officers, employees and representatives (collectively the “Actavis Releasees”) from any and all claims, demands, damages, liabilities,
obligations, and causes of action, known or unknown, suspected or unsuspected, in law or at equity, that were asserted, or that could have been asserted, by the Plaintiffs or any of the other Plaintiff Releasees or by the General Partnership or any
of the other General Partnership Releasees in connection with a Novel Proposed Product or the Action and arising before the Consent Judgment Entry Date. 
 3.2. In settlement of disputed claims in the Action, and in consideration of the representations, warranties and covenants contained in this Settlement Agreement, subject to and effective only upon entry
of the Consent Judgment (whether with or without the modification provided for in Section 2.2), Novel, on behalf of itself and the other Novel Releasees, and Actavis, on behalf of itself and the other Actavis Releasees, hereby fully, finally
and irrevocably relinquish, release and discharge the Plaintiff Releasees and the General Partnership Releasees from any and all claims, demands, damages, liabilities, obligations, and causes of action, known or unknown, suspected or unsuspected, in
law or at equity, that were asserted, or that could have been asserted, by Novel or any of the other Novel Releasees or Actavis or any of the other Actavis Releasees in connection with an Approved OSMOPREP® Product, a Novel Proposed Product, the
‘346 Patent or the ‘075 Patent, or the Action and arising before the Consent Judgment Entry Date. 

  
 8 

  
 3.3. For the avoidance
of ambiguity, the releases set forth in this Article 3 do not apply to actions to enforce any requirements or provisions of this Settlement Agreement or the other Settlement Documents. 

ARTICLE 4: PATENT VALIDITY 
 4.1. Novel, for itself and the other Novel Releasees, and Actavis, for itself and the other Actavis Releasees, acknowledge and agree that the ‘346 Patent (a) is valid and enforceable in the
Action and in any other or future cause of action, litigation or proceeding, (b) would be currently infringed (and after the Start Date would, in the absence of the grants set forth in Sections 2.1 of the Sublicense Agreement, be then
infringed) by the making, having made, use, sale, offer to sell, or importation of any Novel Proposed Product in or for the United States by or on behalf of Novel or the other Novel Releasees, and (c) would be infringed by the making, having
made, use, sale, offer to sell, or importation of any Novel Proposed Product in or for the United States by or on behalf of Actavis or the other Actavis Releasees. 
 4.2. Novel, for itself and the other Novel Releasees, and Actavis, for itself and the other Actavis Releasees, acknowledge and agree that the ‘075 Patent (a) is valid and enforceable in any
future cause of action, litigation or proceeding, (b) would be currently infringed (and after the Start Date would, in the absence of the grants set forth in Section 2.2 of the Sublicense Agreement, be then infringed) by the making, having
made, use, sale, offer to sell, or importation of any Novel Proposed Product in or for the United States by or on behalf of Novel or the other Novel Releasees, and (c) would be infringed by the making, having made, use, sale, offer to sell, or
importation of any Novel Proposed Product in or for the United States by or on behalf of Actavis or the other Actavis Releasees. 
 4.3. Novel, for itself and the other Novel Releasees, and Actavis, for itself and the other Actavis Releasees, agree not to challenge or otherwise dispute or contest, and not

  
 9 

 
to assist others, whether directly or indirectly, in challenging or otherwise disputing or contesting, in any litigation or other proceeding, (a) the validity, enforceability or
patentability of the ‘346 Patent or ‘075 Patent or (b) the infringement of the ‘346 Patent or ‘075 Patent by the making, having made, use, sale, offer to sell, or importation of any Novel Proposed Product in or for the
United States. 
 4.4. Nothing in Section 4.3 shall prohibit Novel or any other Novel Releasees or Actavis or any other
Actavis Releasees from making any disclosure required to be made by it in response to a Third Party-initiated order of a court of competent jurisdiction or other governmental body of a country or any political subdivision thereof of competent
jurisdiction. In respect of any such disclosure that in the absence of this Section 4.4 would be prohibited or restricted by Section 4.3, the disclosing Person shall, if permitted by law, first have given notice to the Plaintiffs and the
General Partnership and have given the Plaintiffs and the General Partnership a reasonable opportunity to quash such order or to obtain a protective order requiring that information the disclosure of which would in the absence of this
Section 4.4 be prohibited or restricted by Section 4.3 be held in confidence by such court or governmental body or, if disclosed, be used only for the purposes for which the order was issued. If a disclosure order is not quashed or a
protective order is not obtained, information the disclosure of which would in the absence of this Section 4.4 be prohibited or restricted by Section 4.3 that is disclosed in response to such court or governmental order shall be limited to
that information that is legally required to be disclosed in such response to such court or governmental order. 
 ARTICLE 5:
COVENANTS 
 5.1. Novel, for itself and the other Novel Releasees, and Actavis, for itself and the other Actavis Releasees,
hereby covenant not to sue, not to assign to any other entity a right to sue, and not to authorize any other entity to sue, any Plaintiff Releasee or any General 

  
 10 

 
Partnership Releasee for any claim, counterclaim, demand, cause of action, suit, damages, debt, liability, obligation, right, or set-off of any kind or description whatsoever, including costs,
expenses, and attorneys’ fees related thereto or arising therefrom (collectively, “Losses”), known or unknown, suspected or unsuspected, in law or at equity, that were asserted or that could have been asserted by Novel or any
other Novel Releasee or Actavis or any other Actavis Releasee in connection with an Approved OSMOPREP® Product, a Novel Proposed Product, the ‘346 Patent, the ‘075 Patent, or the Action and arising before the Consent Judgment Entry
Date. 
 5.2. Novel, for itself and the other Novel Releasees, hereby covenants that neither it nor any other Novel Releasee
will, and Actavis, for itself and the other Actavis Releasees, hereby covenants that neither it nor any other Actavis Releasee will, directly or indirectly, (a) at any time beginning with the Consent Judgment Entry Date and ending at 12:01 a.m.
on the Start Date, make, have made, use, sell, offer to sell, import or distribute in or for the United States, or (b) at any time beginning with the Signing Date and ending at 12:01 a.m. on the Start Date, authorize or encourage others to
make, have made, use, sell, offer to sell, import or distribute in or for the United States, or indemnify others regarding or participate in the profits of others arising from the sale in or for the United States of, in the case of both clauses
(a) and (b), any Novel Proposed Product, provided that Novel may make commercially reasonable preparations to sell Product (as defined in the Sublicense Agreement) as of the Start Date by (i) initiating manufacture of Product not
more than [*] ([*]) days before the date on which the Start Date can be reasonably anticipated by Novel to occur and (ii) initiating offers for sale of Product not more than [*] ([*]) days before the date on which the Start Date can be
reasonably anticipated by Novel to occur. 

  

	[*]	Confidential treatment requested; certain information omitted and filed separately with the SEC. 

11 

  
 5.3. The Plaintiffs
and the General Partnership, for themselves and the other Plaintiff Releasees and General Partnership Releasees, hereby covenant, severally and not jointly, not to sue, not to assign to any other entity a right to sue, and not to authorize any other
entity to sue, any Novel Releasee or Actavis Releasee for Losses, known or unknown, suspected or unsuspected, in law or at equity, that were asserted or that could have been asserted by the Plaintiffs or any of the other Plaintiff Releasees or
General Partnership or any of the other General Partnership Releasees in connection with a Novel Proposed Product or the Action and arising before the Consent Judgment Entry Date. 

5.4. For the avoidance of ambiguity, the covenants set forth in this Article 5 do not apply to actions to enforce any requirements or
provisions of this Settlement Agreement or the other Settlement Documents. 
 ARTICLE 6: REPRESENTATIONS AND WARRANTIES

 6.1. Each Party represents and warrants to the other Parties that: 

(a) Such Party (i) is duly formed and in good standing under the laws of the jurisdiction of its formation, (ii) has the power
and authority and the legal right to enter into this Settlement Agreement and perform its obligations hereunder, and (iii) has taken all necessary action on its part required to authorize the execution and delivery of this Settlement Agreement
and the performance of its obligations hereunder. 
 (b) This Settlement Agreement has been duly executed and delivered on
behalf of such Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency or other similar laws of general application
affecting the enforcement of creditor 

  
 12 

 
rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered in a proceeding at law or equity.

 (c) All necessary consents, approvals and authorizations of all regulatory and governmental authorities and other Persons
required to be obtained by such Party in connection with the execution and delivery of this Settlement Agreement and the performance of its obligations hereunder have been obtained. 

(d) The execution and delivery of this Settlement Agreement and the performance of such Party’s obligations hereunder, (i) to
the knowledge of such Party, do not and will not conflict with or violate any requirement of Applicable Law, (ii) do not and will not conflict with or violate any provision of the articles of incorporation or bylaws of such Party, and
(iii) do not and will not conflict with, violate, or breach, or constitute a default or require any consent under, any contractual obligation or court or administrative order by which such Party is bound. 

(e) Such Party is duly authorized to act for and to bind all Persons on behalf of which it purports to be acting in respect of the
provisions of Articles 3, 4 and 5. 
 Notwithstanding anything else in this Section 6.1 to the contrary, neither the General Partnership
nor CDC III makes the representation set forth in clause (i) of Section 6.1(d). 
 6.2. Novel represents and warrants
to the Plaintiffs and the General Partnership that Novel owns all right, title and interest in and to ANDA No. 79-247, no other person or entity has any rights under ANDA No. 79-247, and Novel has not transferred or assigned (a) any
of its rights under ANDA No. 79-247 to any other Person or (b) any of its claims, rights, causes of action, counterclaims or defenses that are covered by the releases granted by it hereunder to any other Person. The Parties hereby
acknowledge and agree that the 

  
 13 

 
arrangement between Novel and Actavis, a copy of which was produced to the Plaintiffs’ litigation counsel, pursuant to which Novel “shall grant to Actavis . . . an exclusive license to
the Product, with the right to promote, distribute, market and sell such Product in the Territory”, constitutes a distributor relationship for the Product as contemplated by Section 2.3(b) of the Sublicense Agreement and does not
constitute a breach of the representation and warranty made by Novel under the first sentence of this Section 6.2. For the avoidance of doubt, the provisions of the preceding sentence (a) do not constitute the consent of the Plaintiffs or
the General Partnership to anything other than the distributor relationship for the Product between Novel and Actavis contemplated by Section 2.3(b) of the Sublicense Agreement and (b) shall not operate to expand the rights of Novel or
Actavis in any respect beyond the right to put into place the distributor relationship for the Product between Novel and Actavis contemplated by Section 2.3(b) of the Sublicense Agreement. 

6.3. Novel and Actavis represent and warrant to the Plaintiffs and the General Partnership that neither Novel nor Actavis nor any of
their Affiliates has discussed with any Third Party (other than Novel’s or Actavis’s respective attorneys and other licensed professional advisors) any aspect of the negotiations of this Settlement Agreement or the other Settlement
Documents or any of the terms or conditions hereof or thereof. 
 6.4. No Party makes any express or implied warranties that any
product or process can be made, used, sold, offered for sale, imported or distributed without infringing intellectual property rights owned or controlled by Third Parties. 
 ARTICLE 7: NOTIFICATION OF SETTLEMENT AGREEMENT 
 TO THE FEDERAL TRADE
COMMISSION AND DEPARTMENT OF JUSTICE 
 7.1. Within ten (10) Business Days following the Signing Date, the Parties
shall comply with the requirements of Title XI, Subtitle B of the Medicare Prescription Drug, 

  
 14 

 
Improvement, and Modernization Act of 2003, Pub. L. No. 108-173 (the “Act”) in respect of this Settlement Agreement and the transactions contemplated hereby by filing or
causing to be filed all necessary documents with the U.S. Federal Trade Commission (“FTC”) and the Antitrust Division of the U.S. Department of Justice (“DOJ;” and together with the FTC, the
“Agencies”). 
 7.2. The Parties shall use all commercially reasonable efforts to coordinate the filings
contemplated by Section 7.1 and any responses thereto, to make such filings promptly and to respond promptly to any requests for additional information made by either of the Agencies, and to coordinate any necessary or desirable joint
presentations. Each Party reserves the right to communicate with the Agencies regarding such filings as it believes appropriate. Each Party shall keep the other informed of such communications (unless otherwise directed by either of the Agencies).

 7.3. The provisions of this Article 7 are in all respects subject to the provisions of Article 8. 

ARTICLE 8: GENERAL PROVISIONS 
 8.1. Confidentiality. Except as (a) required by statute, ordinance or regulation, (b) required pursuant to compulsory legal process, (c) necessary for the exercise of the rights
granted to the Parties under this Settlement Agreement or the other Settlement Documents, or (d) as expressly permitted under this Section 8.1, none of the Parties nor their Affiliates shall publicly announce or otherwise disclose to Third
Parties any of the terms of this Settlement Agreement or the Ancillary Agreements without the prior written approval of the other Parties, not to be unreasonably withheld or delayed. Except as otherwise provided in this Section 8.1, the Parties
shall only release public announcements of the execution of this Settlement Agreement and the other Settlement Documents in forms to be mutually agreed by the Parties. If a Party is disclosing information relating to this Settlement Agreement or the

  
 15 

 
Ancillary Agreements because it is required to do so to comply with a statute, ordinance or regulation or compulsory legal process, including its reporting requirements under the Securities
Exchange Act of 1934, as amended, or as contemplated by Article 7, such Party intending to make such disclosure shall give the other Parties at least [*] ([*]) Business Days’ prior notice in writing of the text of the intended disclosure,
unless such statute, ordinance, regulation or compulsory legal process would require earlier disclosure, in which event the notice shall be provided as early as practicable. A Party that determines that it is required to file this Settlement
Agreement or the Ancillary Agreements with the Securities and Exchange Commission or any other governmental authority, except the Agencies pursuant to Section 7.1, shall request confidential treatment with respect to the terms of this
Settlement Agreement and the Ancillary Agreements, shall consult in good faith with the other Parties regarding such confidential treatment and shall use commercially reasonable efforts to have redacted from any publicly available version such
provisions as the Parties may agree. Notwithstanding anything to the contrary above, (a) the Plaintiffs or any of them may disclose the terms of this Settlement Agreement and the other Settlement Documents to Third Parties in connection with
patent litigation involving the ‘346 Patent and ‘075 Patent or in connection with settlement discussions and agreements with alleged infringers of the ‘346 Patent and ‘075 Patent, subject to such Third Parties undertaking to keep
the terms of this Settlement Agreement and the Ancillary Agreements strictly confidential in accordance with the terms hereof, and (b) each Party may disclose the terms of this Settlement Agreement and the other Settlement Documents to its
respective Affiliates, and its and their respective insurers, lenders, attorneys and accountants and prospective and actual acquirers, subject to such Affiliates, insurers, lenders, attorneys and accountants and acquirers being bound by reasonable
confidentiality obligations. 

  

	[*]	Confidential treatment requested; certain information omitted and filed separately with the SEC. 

16 

  
 8.2.
Assignment. This Settlement Agreement, including the obligations of the Parties under the Consent Judgment, shall be binding upon and shall inure to the benefit of each Party hereto, and each of its successors and permitted assigns. Except as
otherwise provided herein, no Party shall have the power to assign or otherwise transfer this Settlement Agreement or any interest herein or right hereunder without the prior written consent of the other Parties, and any such purported assignment,
transfer or attempt to assign or transfer any interest herein or right hereunder shall be void and of no effect. Notwithstanding the foregoing, any Party may, upon written notice to the other Parties but without obtaining the other Parties’
consent, assign its rights and obligations under this Settlement Agreement to any of its Majority-Controlled Affiliates, to any lender providing financing to that Party or its Affiliates for collateral security purposes, or to any successor in
interest to that Party’s entire business or to its Approved OSMOPREP® Product or Novel Proposed Product business, as the case may be, provided that (a) notwithstanding any such assignment, such Party shall remain liable for its
and its assignee’s performance under this Settlement Agreement; (b) no such assignment shall in any manner limit or impair the obligations of that Party hereunder; and (c) following a transfer by a Party to its Majority-Controlled
Affiliate, any subsequent transaction (other than one that would result in the transfer of this Settlement Agreement back to the assigning Party) that would cause such Majority-Controlled Affiliate to cease to be a Majority-Controlled Affiliate of
such Party shall be deemed to be an assignment of this Settlement Agreement requiring consent hereunder. 
 8.3. Governing
Law and Jurisdiction. This Settlement Agreement and the rights and obligations of the Parties under this Settlement Agreement shall be governed and construed in accordance with the laws of the State of New York, without regard to its choice of
law or conflicts of law principles that might otherwise refer construction or interpretation of this 

  
 17 

 
Settlement Agreement to the substantive law of another jurisdiction. Actavis submits to the jurisdiction of the District Court for the purposes of enforcement of this Settlement Agreement against
it and hereby waives any and all defenses based on personal jurisdiction or venue to the maintenance of any such action in the District Court. 
 8.4. Relief in the Event of Breach. Novel and Actavis, for themselves and their Affiliates, acknowledge and agree that the restrictions set forth herein on the manufacture, use, sale, offer to
sell, importation and distribution of any Novel Proposed Product are reasonable and necessary to protect the legitimate interests of the Plaintiffs and the General Partnership, that the Plaintiffs and the General Partnership would not have entered
into this Settlement Agreement in the absence of such restrictions, and that any breach or threatened breach of those restrictions will result in irreparable injury to the Plaintiffs and the General Partnership for which there will be no adequate
remedy at law. Accordingly, if either Novel or Actavis breaches its undertakings in Sections 4.3, 5.1 or 5.2 of this Settlement Agreement, in addition to any other remedy the Plaintiffs or the General Partnership may have at law or in equity, the
Plaintiffs and the General Partnership or any of them, upon a showing of such breach, shall be entitled to a preliminary and permanent injunction to prevent the continuance of such breach. In the event that either Novel or Actavis breaches its
undertakings in Sections 4.3, 5.1 or 5.2, the Plaintiffs and the General Partnership reserve, and Novel and Actavis and their Affiliates so acknowledge, the right to seek damages, including enhanced damages, and other remedies for patent
infringement to the full extent of the law. In the event of such breach, the Plaintiffs and the General Partnership shall not be obligated to post any bonds as a condition to securing injunctive relief, and shall not be required to demonstrate that
the balance of hardships supports the entry of injunctive relief. 

  
 18 

  
 8.5. Waiver. No
waiver of a breach or failure of a condition contained in or granted by the provisions of this Settlement Agreement shall be effective unless it is in writing and signed by the Party waiving the breach or failure. No waiver of any breach or failure
shall be deemed a waiver of any other breach or failure, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. 
 8.6. Legal Advice. Each Party and its counsel have participated fully in the review and revision of this Settlement Agreement. Any rule of construction to the effect that ambiguities are to be
resolved against the drafting Party shall not apply in interpreting this Settlement Agreement. 
 8.7. Enforceability. If
a court of competent jurisdiction holds any provision of this Settlement Agreement to be illegal, unenforceable, or invalid, in whole or in part for any reason, the Parties agree to use commercially reasonable efforts to negotiate a provision, in
replacement of the provision held illegal, unenforceable, or invalid, that is consistent with applicable law and accomplishes, as nearly as possible, the original intention of the Parties with respect thereto. 

8.8. Admissibility. Until the Consent Judgment Entry Date and after a Settlement Termination Event (as hereinafter defined)
occurs, (a) neither the provisions of this Settlement Agreement or any other Settlement Document nor this Settlement Agreement or the other Settlement Documents themselves may be offered into evidence, or be referred to in any testimonial or
other evidence, by any Party or any of its Affiliates at any trial, action or other proceeding pertaining to the subject matter hereof, except (in respect of the period after a Settlement Termination Event occurs) as may be reasonably necessary to
correct any record of such disclosures that was created before the Settlement Termination Event occurred and (b)

  
 19 

 
nothing herein shall be construed as an admission or waiver by any Party or any of its Affiliates as to any factual or legal matter. The foregoing restrictions in this Section 8.8 shall
apply outside the United States. For the avoidance of ambiguity, (a) in the event there is no Consent Judgment Entry Date, then the provisions of this Section 8.8 shall apply forever; and (b) once a Settlement Termination Event
occurs, then the provisions of this Section 8.8 shall apply forever thereafter. The provisions of this Section 8.8 do not apply to actions brought solely (a) to enforce the performance, prior to this Settlement Agreement becoming null
and void pursuant to the provisions of Section 2.2, of any requirements or provisions set forth in Article 2 or Section 5.2 or (b) to enforce the performance of Section 6.1(a), (b), (c) and (d), Article 7, and all of Article
8 except Section 8.11. 
 8.9. Entire Agreement. This Settlement Agreement and Exhibit A, together with the
other Settlement Documents, constitutes the final, complete, and exclusive statement of the terms of the agreement between the Plaintiffs and the General Partnership, on the one hand, and Novel and Actavis, on the other hand, pertaining to the
subject matter thereof and supersede all prior and contemporaneous understandings or agreements of the Plaintiffs and the General Partnership, on the one hand, and Novel and Actavis, on the other hand. The Plaintiffs and the General Partnership, on
the one hand, and Novel and Actavis, on the other hand, confirm that they are not relying on any representations, warranties or undertakings of the other except as set forth in this Settlement Agreement and the other Settlement Documents.

 8.10. Modification. No terms or conditions of this Settlement Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of any Party, except that the Parties may supplement, amend, or modify this Settlement Agreement by a subsequent written agreement executed by the Parties through their authorized representatives. 

  
 20 

  
 8.11. Return of
Confidential Documents. The Parties hereby agree that, within fourteen (14) days after the Consent Judgment Entry Date, they shall return to the producing party all “Confidential” and “Attorneys’ Eyes Only” material
as designated under the Stipulated Discovery Confidentiality Order governing the Action, or shall certify in writing that any such materials have been destroyed, provided, however, that counsel may retain complete copies of all transcripts
and pleadings including any exhibits attached thereto for archival purposes. 
 8.12. Limitation of Rights Granted.
Except for the rights, agreements and covenants specifically granted pursuant to this Settlement Agreement and the Ancillary Agreements, no other rights, agreements or covenants are granted or implied by this Settlement Agreement. 

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

1700 Perimeter Park Dr. 
 Morrisville, NC 27560-8404 
 U.S.A. 

Attention: General Counsel 
 Facsimile: (919) 862-1095 

  
 21 

  
 If to CDC III:

 CDC III, LLC 
 47 Hulfish, Suite 310 
 Princeton, NJ 08540 

U.S.A. 

Attention: General Counsel 
 Facsimile:
                                         
                                         
       
 If to the General Partnership: 

ALW Partnership 

8th and Spruce Streets 
 Philadelphia, Pennsylvania 19107 
 U.S.A. 

Attention: Craig Aronchick, M.D. 
 Fax: (215) 829-3020 
 If to Novel: 

Novel Laboratories, Inc. 
 400 Campus Dr. 
 Somerset, NJ 08873 

U.S.A. 

Attention: President 
 Fax: (908) 603-6060 
 If to Actavis: 

Actavis Inc. 
 60
Columbia Road 
 Building B 
 Morristown, NJ 07960 
 U.S.A. 

Attention: Legal Department 
 8.14. Certain Events. 
 (a) Novel and Actavis may, by notice to Plaintiffs
and the General Partnership, terminate Sections 3.2, 4.1, 4.2, 4.3, 5.1 and 5.2 of this Settlement Agreement and paragraphs 5, 6, 7 and 8 of the Consent Judgment (any such termination, a “Settlement

  
 22 

 
Termination Event”) in the event that any one of the following circumstances has occurred and is at the time of such notice continuing: (i) any permanent and full
withdrawal of the Approved OSMOPREP® Product from the United States market; (ii) any termination of the Supply Agreement by Salix pursuant to Section 6.2(a)(i) or (b)(iii) thereof or by Novel pursuant to Section 6.2(b)(i),
(ii) or (iii) thereof; (iii) from and after [*], any failure to have achieved qualification of Novel to supply product to Salix as contemplated by Section 2.1 of the Supply Agreement, so long as such failure is not attributable
to any material extent to the failure of Novel to have fulfilled its obligations under Section 2.1 of the Supply Agreement; or (iv) any breach by the Plaintiffs or the General Partnership of any of their respective obligations under
Section 2 or Section 3.5 of the Sublicense Agreement that has not been cured in all material respects within [*] ([*]) days (or, if the breach is not reasonably curable within such [*] ([*]) day period, such period as may be reasonably
required to permit an appropriate cure so long as the breaching Party is at all times during such period using its best efforts to effect such cure) following notice by Novel to the Plaintiffs and the General Partnership of such breach. 

(b) Upon a Settlement Termination Event, the provisions of Sections 3.1 and 5.3 shall be automatically terminated without further action
by any Party. 
 (c) For the avoidance of doubt, following a Settlement Termination Event, the provisions of Sections 3.1, 3.2,
4.1, 4.2, 4.3, 5.1, 5.2 and 5.3 of this Settlement Agreement and paragraphs 5, 6, 7 and 8 of the Consent Judgment shall be deemed terminated and without effect ab initio and shall not after the Settlement Termination Event be enforceable by
any Party hereto, including in respect of matters occurring prior to the Settlement Termination Event. 

  

	[*]	Confidential treatment requested; certain information omitted and filed separately with the SEC. 

23 

  
 (d) Salix shall give
prompt written notice to Actavis of any exercise by Salix of its right to terminate the Supply Agreement pursuant to Section 6.2(b)(i) thereof. In the event that within five (5) business days of the date of the giving of Salix’s
notice Actavis should by notice to Salix indicate its desire to succeed to Novel’s rights and obligations under the Supply Agreement, then Salix shall thereafter, for a period of not less than ten (10) days, discuss in good faith with
Actavis the arrangements upon which Actavis might succeed to Novel’s rights and obligations under the Supply Agreement. During such ten (10)-day period, Salix shall not enter into any binding commitment with any Third Party for the manufacture
and supply of Product (as such term in defined in the Supply Agreement). In the event that Salix and Actavis are unable during such ten (10)-day period to reach agreement upon the terms upon which Actavis could succeed to Novel’s rights and
obligations under the Supply Agreement, then the provisions of this Section 8.14(d) shall not thereafter limit or constrain Salix’s right and ability to make such arrangements for the supply of Product, whether with Actavis or any other
person, as Salix may determine. In the event that Salix and Actavis should reach an agreement to the effect that Actavis will succeed to Novel’s rights and obligations under the Supply Agreement, then Novel shall use its best efforts promptly
to assist Salix to qualify Actavis (or such third party manufacturer as Salix and Actavis may designate) to manufacture Product to meet Salix’s requirements and shall promptly grant to Actavis (or such third party manufacturer), on a
royalty-free, non-exclusive basis, such licenses, and provide to Actavis (or such third party manufacturer), free of charge, such technical assistance, as Actavis (or such third party manufacturer) may require in order to manufacture Product to the
then-current Specifications (as defined in the Supply Agreement) in accordance with the then-current manufacturing process for 

  
 24 

 
Product, including full technology transfer of the then-current manufacturing process for Product, as well as, at Salix’s option and cost, such inventories of Materials (as defined in the
Supply Agreement) as are necessary to effect such qualification and technology transfer and enable Salix to obtain uninterrupted supply of Product. 
 8.15. Counterparts. This Settlement Agreement may be executed in any number of counterparts, and each counterpart shall be deemed an original instrument, but all counterparts together shall
constitute but one agreement. An executed signature page of this Settlement Agreement delivered by facsimile transmission or by electronic mail in “portable document format” (“.pdf”) shall be as effective as an original executed
signature page. 
 [Remainder of this page intentionally left blank.] 

  
 25 

  
 IN WITNESS WHEREOF,
the Parties, through their authorized officers, have executed this Settlement Agreement to be effective as of the Signing Date. 
  

									
	Salix Pharmaceuticals, Inc.	 		 	Novel Laboratories, Inc.
					
	By:	 	 /s/ Carolyn J. Logan
	 		 	By:	 	 /s/ Veerappan S. Subramanian

					
	Name:	 	 Carolyn J. Logan
	 		 	Name:	 	 Veerappan S. Subramanian

					
	Title:	 	 President and CEO
	 		 	Title:	 	 President and CEO

					
	Date:	 	 September 29, 2010
	 		 	Date:	 	 September 29, 2010

			
	CDC III, LLC	 		 	Actavis Inc.
					
	By:	 	 /s/ David Ramsay
	 		 	By:	 	 /s/ Douglas Boothe

					
	Name:	 	 David Ramsay
	 		 	Name:	 	 Douglas Boothe

					
	Title:	 	  
	 		 	Title:	 	 CEO

					
	Date:	 	 September 29, 2010
	 		 	Date:	 	 September 29, 2010

				
	As partners in a general partnership:	 		 		 	
				
	 /s/ Craig Aronchick
	 		 		 	
	Craig Aronchick, M.D.	 		 		 	
					
	Date:	 	 September 29, 2010
	 		 		 	
				
	 /s/ William H. Lipshutz
	 		 		 	
	William H. Lipshutz, M.D.	 		 		 	
					
	Date:	 	 September 29, 2010
	 		 		 	
				
	 /s/ Scott H. Wright
	 		 		 	
	Scott H. Wright, M.D.	 		 		 	
					
	Date:	 	 September 29, 2010
	 		 		 	

 [Signature page to Osmoprep Settlement Agreement] 

  
 EXHIBIT A: CONSENT
JUDGMENT 
 IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY 
  

					
	  
  
	 	X	 	
	SALIX	 	:	 	
	PHARMACEUTICALS, INC.	 	:	 	
	and CDC III, LLC,                 :	 	:	 	
		 	:	 	
			
	Plaintiffs,	 	:	 	
			
	 v.
	 	:            	 	Civil Action No. 3:08-04628 (FLW) (LGH)
	NOVEL LABORATORIES, INC.,	 	:	 	
		 	:	 	
	Defendant.	 	:	 	
	  
  
	 	X	 	

 CONSENT JUDGMENT 
 Plaintiffs Salix Pharmaceuticals, Inc. (hereinafter “Salix”) and CDC III, LLC (hereinafter “CDC III”), and defendant Novel Laboratories, Inc. (hereinafter “Novel”) have
agreed to terms and conditions representing a negotiated settlement of this action and have set forth those terms and conditions in a Settlement Agreement among Salix; CDC III; the general partnership of Craig Aronchick, William H. Lipshutz, and
Scott H. Wright (the “General Partnership”); Novel; and Actavis Inc. (“Actavis”); a Sublicense Agreement among Salix, CDC III, the General Partnership, and Novel; and a Supply Agreement between Salix and Novel. Accordingly,
Salix, CDC III and Novel, by their respective undersigned attorneys, hereby stipulate and consent to the entry of a judgment and an injunction in this action pursuant to Fed. R. Civ. P. 41(a)(2) as follows: 

The Court HEREBY ORDERS, ADJUDGES AND DECREES: 
 1. This Court has jurisdiction over the subject matter of this action and personal jurisdiction over the parties. 

  
 2. The term
“Affiliate” means with respect to a Person, any Person that Controls, is Controlled by or is under common Control with such first Person. For purposes of this definition only, “Control” means (a) to possess, directly or
indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities, by contract relating to voting rights or corporate governance or otherwise, or (b) to own, directly or indirectly, more than
fifty percent (50%) of the outstanding voting securities or other ownership interest of a Person. 
 3. The term
“Approved OSMOPREP® Product” means any product that is approved for distribution in the United States under New Drug Application No. 21-892. 
 4. The term “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint
stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision, department or agency of a government. 

5. Novel, for itself and its Affiliates and its and their respective predecessors, successors, assigns, agents, officers, employees and
representatives (collectively the “Novel Releasees”), has acknowledged and agreed that United States patent number 5,616,346 (the “‘346 Patent”) is valid and enforceable. 

6. In any other or future cause of action or litigation, Novel shall not dispute that the ‘346 Patent is enforceable and valid.

 7. Novel, for itself and the other Novel Releasees, has acknowledged and agreed that (absent a valid license granting
rights thereunder) the ‘346 Patent would be infringed by the making, having made, use, sale, offer to sell, or importation of a drug product that refers to the 

 
Approved OSMOPREP® Product as the reference-listed drug in an Abbreviated New Drug Application or pursuant to an application under 21 U.S.C. § 355(b)(2) (an “Infringing
Product”) in or for the United States. 
 8. Novel, including any of its successors and assigns, is enjoined, either
directly or indirectly, on its own part or through any Affiliate, officer, agent, servant, employee or attorney, or through any person in concert or coordination with Novel, from making, having made, using, selling, offering to sell, or importing
any Infringing Product in or for the United States, except solely as and to the extent specifically authorized by the Sublicense Agreement. 
 9. The provisions of paragraphs 5, 6, 7 and 8 of this Consent Judgment may be terminated by Novel in accordance with the provisions of Section 8.14(a) of the Settlement Agreement, and, in such
instance, those provisions of this Consent Judgment shall not have any res judicata effect. 
 10. The provisions of paragraphs
5, 6, 7 and 8 of this Consent Judgment notwithstanding, the Plaintiffs have agreed that (a) Novel may continue to maintain its paragraph IV certification for its pending Abbreviated New Drug Application No. 79-247 (the “Pending
ANDA”), (b) Novel may continue to pursue and obtain final FDA approval of the Pending ANDA at the expiration of the thirty (30) month period prescribed by 21 U.S.C. § 355(c)(3)(C), and (c) they will not in any way interfere
with or oppose the approval of the Pending ANDA. 
 11. In the event of breach or violation of the terms of this Consent
Judgment, jurisdiction and venue for an action for preliminary and permanent injunctions against the breaching conduct exists in this court, and all parties hereby waive any and all defenses based on personal jurisdiction and venue. 

12. All claims and counterclaims in this action are dismissed, without prejudice. 

  
 13. Compliance with
this Consent Judgment may be enforced by the parties and their respective successors in interest or assigns. 
 14. This Court
retains jurisdiction to enforce or supervise performance under this Consent Judgment and the aforesaid Settlement Agreement, Sublicense Agreement and Supply Agreement. 
 15. Each party shall bear its own costs and attorneys’ fees. 
  

	
	  

	Hon. Freda L. Wolfson, U.S.D.J.

 We
consent to the form and entry of the foregoing Consent Judgment. 
  

									
	Dated:	 		 		 	Dated:	 	
					
	By:	 	  
	 		 	By:	 	  

					
		 	[Insert appropriate signature block]	 		 		 	[Insert appropriate signature block]
					
		 	Attorneys for plaintiff	 		 		 	Attorneys for defendant
		 	Salix Pharmaceuticals, Inc.	 		 		 	Novel Laboratories, Inc.
					
	Dated:	 		 		 		 	
					
	By:	 	  
	 		 		 	
					
		 	[Insert appropriate signature block]	 		 		 	
					
		 	Attorneys for plaintiff	 		 		 	
		 	CDC III, LLC

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