Document:

exv10w2

Exhibit 10.2

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

SETTLEMENT AGREEMENT

     THIS SETTLEMENT AGREEMENT (this “Agreement”) dated as of March 18, 2009 (the “Effective Date”)
is entered into between Medicis Pharmaceutical Corporation, a Delaware corporation with offices
located at 7720 North Dobson Road, Scottsdale, Arizona 85256 on behalf of itself and its Affiliates
(collectively, “Medicis”), and Barr Laboratories, Inc. (a wholly owned subsidiary of Teva
Pharmaceuticals USA, Inc. (“Teva USA”)), a Delaware corporation with offices located at 225 Summit
Avenue, Montvale, NJ 07645 on behalf of itself and its Affiliates (collectively, “Teva”).

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

     WHEREAS, Teva filed and owns the ANDA (as defined below) and has manufactured and sold Generic
Product (as defined below) without authorization from Medicis, which manufacture, use, sale, offer
for sale, importation and distribution infringes or induces the infringement of one or more of the
Patent Rights; and

     WHEREAS, in consideration for Teva’s agreement to immediately cease manufacturing, using,
selling, offering for sale, importing and distributing Generic Product and stipulate to the
validity of the Patent Rights, Medicis agrees to release Teva from liability arising from the
manufacture and distribution of the Generic Product prior to the Effective Date, all on the terms
and conditions of this Agreement.

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

     1. DEFINITIONS.

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

          1.2 “AG Date” means the earlier of:

(a) November ***, 2011;

(b) *** or

(c) ***

A-1

 

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

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

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

          1.6 “Generic Product” means, ***

          1.7 “License Agreement” shall have the meaning set forth in Section 2.5.1.

          1.8 “Patent Rights” means (a) the patents and patent applications listed on Exhibit A to this
Agreement, (b) ***; (c) all divisions, continuations, continuations-in-part, that claim priority
to, or common priority with, the patent applications described in clauses (a) and (b) above or the
patent applications that resulted in the patents described in clauses (a) and (b) above, and (d)
all patents that have issued or in the future issue from any of the foregoing patent applications,
including utility, model and design patents and certificates of invention, together with any
reissues, renewals, extensions or additions thereto.

          1.9 “Solodyn Products” means the Solodyn® products listed on Exhibit B.

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

     2. RELEASE; PERMANENT INJUNCTION; LICENSE AGREEMENT.

          2.1 Releases. Teva represents and warrants that, as of the Effective Date, it has
only distributed in the United States those units of Generic Product without authorization from
Medicis as set forth on Schedule A (the “Distributed Quantities”), and the Distributed Quantities
are the only infringements of the Patent Rights by Teva with respect to the sale or offer for sale
of Generic Product in the United States. In consideration for the covenants set forth in this
Agreement, and in reliance on the representation and warranty in the preceding

2

 

sentence, Medicis hereby as of the Effective Date (on behalf of itself, the Medicis
Indemnified Parties, and their predecessors, successors and assigns) irrevocably releases Teva (and
the Teva Indemnified Parties, and their predecessors, successors, assigns, suppliers, purchasers,
customers and patients) from all claims and other Losses arising from the manufacture, use, sale,
offer for sale, importation or distribution of Generic Product prior to the Effective Date
(including, without limitation, infringement or induced infringement of any of the Patent Rights by
any of such activities or by filing the ANDA).

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

          2.3 Validity of Patent Rights. Teva hereby admits that the claims of the Patent
Rights are valid and enforceable. Teva hereby admits that the making, using, offering to sell,
selling, importation and/or distribution into the United States of a Generic Product is covered by
one or more claims of *** under 35 U.S.C. § 271. The foregoing admission shall be binding on Teva
and admissible against Teva in any dispute or litigation between the parties regarding the Patent
Rights, and Teva will not challenge any such admission. This Section 2.3 (including, without
limitation, those admissions regarding validity and enforceability) shall apply only to Generic
Products (and no other products), and further shall apply only in the United States.

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

          2.5 License Agreement.

               2.5.1 Effective on the AG Date, and pursuant to a separate license agreement to be entered
into between Teva and Medicis (the “License Agreement”), Medicis will grant to Teva a non-exclusive
license under the Patent Rights to make, use, sell, offer for sale and import a Generic Product in
or for the United States (where “United States” for purposes of this Agreement shall include its
territories and possessions, including, without limitation, the District of Columbia and the
Commonwealth of Puerto Rico (but excluding direct sales of Generic Product into the Commonwealth of
Puerto Rico)). If the AG Date occurs before the License Agreement is executed by the parties, then
such license shall go into effect as of the AG Date (and before the AG Date for reasonable
commercial preparation as contemplated by the first bullet below), and the parties shall work to
expedite reaching agreement on the License Agreement. Neither party shall enter into any agreement
in conflict with any provisions of this Agreement or any provisions to be included in the License
Agreement.

3

 

               2.5.2 Commencing on the Effective Date, the parties shall negotiate in good faith the terms of
and enter into the License Agreement, which will contain the following provisions:

	 	•	 	Unless earlier terminated for cause or by Teva for convenience, the term of the
License Agreement shall extend from the AG Date and remain in effect until the expiration of the
last to expire of the Patent Rights. ***.
	 
	 	•	 	In exchange for the license rights to be granted under the License Agreement, Teva
agrees that (a) during the term of the License Agreement Teva shall not make, use, sell, offer for
sale, import or distribute a Generic Product in the United States except for Generic Product in
accordance with the terms of the License Agreement, and (b) in the case of an early termination of
the License Agreement by Medicis because of a material, uncured breach by Teva, and continuing
until the expiration of the last to expire of any valid and enforceable Patent Rights covering
Generic Product, Teva shall not make, use, sell, offer for sale, import or distribute a Generic
Product in the United States;
	 
	 	•	 	Teva shall pay to Medicis on a quarterly basis, on such additional terms as are agreed
by the parties, for any Generic Product sold after the AG Date (and, for clarity, not including any
of the Distributed Quantities for which no payments will be owed Medicis): *** of all gross profit
(meaning net sales minus costs of good sold) resulting from sales of Generic Product made by Teva
within *** of the AG Date and covered by a valid, issued and enforceable unexpired Patent Right
licensed to Teva under the License Agreement, which amount Medicis shall have the right to audit on
customary terms, ***
	 
	 	•	 	Medicis and Teva will each indemnify the other for third party claims arising from
their actions under the License Agreement and breaches of representations and warranties; and
	 
	 	•	 	such other terms as the parties may agree and as are commercially reasonable and usual
and customary for agreements of such type.

               2.5.3 If the parties do not agree upon the terms of the License Agreement within six (6)
months following the Effective Date, then either party may, by written notification to the other
party, submit the matter to binding “baseball” arbitration to determine the terms of the License
Agreement as follows. Promptly following receipt of such notice, the parties shall meet and
discuss in good faith and agree on an arbitrator to resolve the issue, which arbitrator shall be
neutral and independent of both parties, shall have significant experience and expertise in license
agreements in the generic pharmaceutical industry, and shall have some experience in mediating or
arbitrating issues relating to such agreements. If the parties cannot agree on such arbitrator
within thirty (30) days of request by a party for arbitration, then such arbitrator shall be
appointed by the American Arbitration Association, which arbitrator must meet the foregoing
criteria. Within fifteen (15) days after an arbitrator is selected (or appointed, as the case may
be), each party will deliver to both the arbitrator and the other party a detailed written proposal
setting forth its proposed terms for the License Agreement, which terms shall not conflict with the
terms set forth in Section 2.5.2 (the “Proposed Terms” of the party) and a memorandum (the “Support
Memorandum”) in support thereof, not exceeding ten (10) pages in length. The parties

4

 

will also provide the arbitrator a copy of this Agreement, as may be amended at such time.
Within fifteen (15) days after receipt of the other party’s Proposed Terms and Support Memorandum,
each party may submit to the arbitrator (with a copy to the other party) a response to the other
party’s Support Memorandum, such response not exceeding five (5) pages in length. Neither party
may have any other communications (either written or oral) with the arbitrator other than for the
sole purpose of engaging the arbitrator or as expressly permitted in this Section 2.5.3; provided
that, the arbitrator may convene a hearing if the arbitrator so chooses to ask questions of the
parties and hear oral argument and discussion regarding each party’s Proposed Terms. Within sixty
(60) days after the arbitrator’s appointment, the arbitrator will select one of the two Proposed
Terms (without modification) provided by the parties that he or she believes is most consistent
with the intention underlying and agreed principles set forth in this Agreement and most accurately
reflects industry norms for a transaction of this type. The decision of the arbitrator shall be
final, binding, and unappealable and the parties shall promptly enter into a License Agreement
having the terms set forth in the Proposed Terms selected by the arbitrator. For clarity, the
arbitrator must select as the only method to determine the terms of the License Agreement one of
the two sets of Proposed Terms, and may not combine elements of both Proposed Terms or take any
other action. The parties shall share equally the out-of-pocket costs of such arbitration.

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

     3. TERM AND TERMINATION.

          3.1 Term. Subject to Section 3.2, this Agreement shall expire on the expiration of
the last to expire of the Patent Rights; provided, however, that if there are no valid, issued
patents within the Patent Rights, but there are at such time pending patent applications within the
Patent Rights, then subject to the terms and conditions of this Agreement, the term of this
Agreement shall continue for the pendency of such pending patent applications. The expiration or
termination of this Agreement shall not cause the expiration or termination of the License
Agreement and vice versa.

          3.2 Termination for Cause. Either party may terminate this Agreement upon or after
the material breach of any material provision of this Agreement by the other party if the other
party has not cured such breach within forty-five (45) days after receipt of express written notice
thereof by the non-breaching party. Any termination of this Agreement by Medicis for material
uncured breach by Teva shall give rise to a right of Medicis also to terminate the License
Agreement; however, any breach of the License Agreement will not be automatically deemed a breach
of this Agreement.

          3.3 Effect of Expiration or Termination. Expiration or termination of this Agreement
shall not relieve the parties of any obligation accruing prior to such expiration or termination,
and the provisions of Sections 2.1, 2.2, 2.3, 2.6, 3.3, 4, 5.4, 6 and 7 shall survive the

5

 

expiration or termination of this Agreement. No other provisions shall survive expiration or
termination of this Agreement.

     4. CONFIDENTIALITY.

          4.1 Confidentiality. Until the last to expire of this Agreement or the License
Agreement, and for a period of five (5) years following the expiration or earlier termination
hereof or thereof, except with respect to any Confidential Information constituting a trade secret
in which case the receiving party’s obligation continues in perpetuity, provided such receiving
party has been informed as to the status of such Confidential Information as a trade secret, each
party shall maintain in confidence all Confidential Information disclosed by the other party and
the terms of this Agreement, and shall not use, grant the use of or disclose to any Third Party the
Confidential Information of the other party other than as expressly permitted hereby. Each party
shall notify the other promptly upon discovery of any unauthorized use or disclosure of the other
party’s Confidential Information or the terms of this Agreement.

          4.2 Permitted Disclosures. Either party may disclose Confidential Information of the
disclosing party (a) on a need-to-know basis, to such party’s directors, officers and employees to
the extent such disclosure is reasonably necessary in connection with such party’s activities as
expressly authorized by this Agreement, and (b) to those agents and consultants, and contract
manufacturers who need to know such information to accomplish the purposes of this Agreement
(collectively, “Permitted Recipients”); provided such Permitted Recipients are bound to maintain
such Confidential Information in confidence at least to the same extent as set forth in Section
4.1.

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

          4.4 Publicity. Except as expressly authorized hereunder, neither party shall make any
publicity releases, interviews or other dissemination of information concerning this Agreement or
its terms, or either party’s performance hereunder, to communication media, financial analysts or
others without the prior written approval of the other party, which approval shall not be
unreasonably withheld, delayed or conditioned. Notwithstanding anything to the contrary in this
Agreement, the parties understand and agree that either party, may, if so required, disclose some
or all of the information included in this Agreement or other Confidential Information of the other
party (a) in order to comply with its obligations under the law, including the United States
Securities Act of 1933 and the United States Securities Exchange Act of 1934; (b) in order to
comply with the listing standards or agreements of any national or international securities
exchange or The NASDAQ Stock Market or New York Stock Exchange or other similar laws of a
governmental authority; (c) to respond to an inquiry of a governmental authority or regulatory
authority as required by law; or (d) in a judicial,

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administrative or arbitration proceeding. In any such event the party making such disclosure
shall (i) provide the other party with as much advance notice as reasonably practicable of the
required disclosure, (ii) cooperate with the other party in any attempt to prevent or limit the
disclosure, and (iii) limit any disclosure to the specific purpose at issue. In connection with
any filing of a copy of this Agreement with the Securities and Exchange Commission, the filing
party shall endeavor to obtain confidential treatment of economic and trade secret information, and
shall keep the other party informed as the planned filing (including, but not limited to providing
the other party with the proposed filing reasonably in advance of making the planned filing) and
consider the requests of the other party regarding such confidential treatment. The parties agree
that the press release(s) set forth on Schedule B will be issued as of the Effective Date.

     5. REPRESENTATIONS AND WARRANTIES.

          5.1 Representations.

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

          5.2 Disclaimer of Warranties. Except for those warranties set forth in Section 5.1,
neither party makes any warranty, written, oral, express or implied, with respect to this
Agreement. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT HEREBY ARE
DISCLAIMED BY BOTH PARTIES.

          5.3 Limitation of Liability. WITH THE EXCEPTION OF DAMAGES RESULTING FROM A PARTY’S
BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT OR ITS OBLIGATIONS UNDER SECTION 6
(INDEMNIFICATION), OR A BREACH BY TEVA OF SECTIONS 2.2 OR 2.3, UNDER NO CIRCUMSTANCES SHALL EITHER
PARTY BE LIABLE FOR LOSS OF USE OR PROFITS OR OTHER COLLATERAL, SPECIAL, CONSEQUENTIAL, INCIDENTAL
OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT, WHETHER SUCH CLAIMS ARE FOUNDED IN TORT OR
CONTRACT.

          5.4 Equitable Relief. Teva acknowledges and agrees that the obligations and
undertakings of Teva pursuant to Sections 2.2 and 2.3 of this Agreement are reasonable and
necessary to protect the legitimate interests of Medicis, that Medicis would not have entered into
this Agreement in the absence of such provisions, and that Teva’s breach or threatened breach or
failure to comply with such Sections 2.2 and 2.3 shall cause Medicis significant and irreparable
harm, the amount of which shall be extremely difficult to estimate and ascertain, and for which
money damages shall not be adequate. Teva further acknowledges and agrees that Medicis shall have
the right to apply to any court of competent jurisdiction for an injunction order restraining

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any breach or threatened breach of Sections 2.2 or 2.3 of this Agreement and specifically
enforcing the terms and provisions of such Sections of this Agreement, without the necessity of
posting any bond or security or giving Teva an opportunity to cure, in addition to seeking any
other remedy available to Medicis in law or equity. Teva agrees that it shall not challenge any of
the foregoing acknowledgements and agreements concerning injunctive relief in any proceeding
brought by Medicis.

     6. INDEMNIFICATION.

          6.1 Teva Indemnification. Teva shall indemnify, defend and hold harmless Medicis, its
directors, managers, members, officers, employees, authorized subcontractors and agents
(collectively the “Medicis Indemnified Parties”) from and against any and all liabilities,
obligations, penalties, judgments, disbursements of any kind and nature, losses, damages, costs and
expenses (including, without limitation, reasonable attorney’s fees and costs) (collectively,
“Losses”) incurred as a result of any claims, demands, actions or other proceedings by a Third
Party against an Indemnified Party to the extent arising out of Teva’s breach of any
representation, warranty or covenant under this Agreement, except to the extent that such Losses
arise out of Medicis’ breach of any representation, warranty or covenant under this Agreement.

          6.2 Medicis Indemnification. Medicis shall indemnify, defend and hold harmless Teva,
its directors, managers, members, officers, employees, authorized subcontractors and agents
(collectively the “Teva Indemnified Parties”) from and against any and all Losses incurred as a
result of any claims, demands, actions or other proceedings by a Third Party against an Indemnified
Party to the extent arising out of Medicis’ breach of any representation, warranty or covenant
under this Agreement, except to the extent that such Losses arise out of Teva’s breach of any
representation, warranty or covenant under this Agreement.

          6.3 Obligations. A party which intends to claim indemnification under this Section 6
(the “Indemnified Party”) shall promptly notify the other party (the “Indemnifying Party”) in
writing of any claim, demand, action, or other proceeding in respect of which the Indemnified Party
intends to claim such indemnification; provided, however, that failure to provide such notice
within a reasonable period of time shall not relieve the Indemnifying Party of any of its
obligations hereunder except to the extent the Indemnifying Party is prejudiced by such failure.
The Indemnified Party shall permit the Indemnifying Party, at its discretion, to settle any such
action, claim or other matter. Notwithstanding the foregoing, the Indemnifying Party shall not
enter into any settlement that would adversely affect the Indemnified Party’s rights hereunder, or
impose any obligations on the Indemnified Party in addition to those set forth herein, in order for
it to exercise such rights, without the Indemnified Party’s prior written consent, which shall not
be unreasonably withheld or delayed. No such action, claim or other matter shall be settled
without the prior written consent of the Indemnifying Party, which shall not be unreasonably
withheld or delayed. The Indemnified Party shall reasonably cooperate with the Indemnifying Party
and its legal representatives in the investigation and defense of any claim, demand, action, or
other proceeding covered by the indemnification obligations of this Section 6. The Indemnified
Party shall have the right, but not the obligation, to be represented in such defense by counsel of
its own selection and at its own expense.

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     7. GENERAL PROVISIONS.

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

	 	 	 
	If to Medicis:

	 	Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attn: Chief Executive Officer

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

	 	Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attn: General Counsel

Facsimile: 480-291-8508
	 
	 	 
	If to Teva:

	 	Teva Pharmaceuticals USA, Inc.
	 

	 	1090 Horsham Road.
	 

	 	North Wales, PA 19454
	 

	 	Attn: President & CEO
	 

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

	 	Teva Pharmaceuticals USA, Inc.
	 

	 	1090 Horsham Road.
	 

	 	North Wales, PA 19454
	 

	 	Attn: General Counsel
	 

	 	Facsimile: (215) 293-6499

     Notices shall be effective on the day of receipt. A party may change its address listed above
by notice to the other party given in accordance with this Section 7.1.

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

          7.3 Waiver. None of the provisions of this Agreement shall be considered waived by
any party hereto unless such waiver is agreed to, in writing, by authorized agents of such party.
The failure of a party to insist upon strict conformance to any of the terms and conditions hereof,
or failure or delay to exercise any rights provided herein or by law shall not be deemed a waiver
of any rights of any party hereto.

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

          7.5 Assignment. Neither party shall assign this Agreement or any part hereof or any
interest herein (whether by operation of law or otherwise) to any Third Party (or use any
subcontractor) without the written approval of the other party; provided, however, that either
party may assign this Agreement without such consent (i) to any Affiliate; and (ii) in the case of
a merger, consolidation, change in control or sale of all or substantially all of the assets
related to this Agreement. No assignment shall be valid unless the permitted assignee(s) assumes
all obligations of its assignor under this Agreement. No assignment shall relieve any party of
responsibility for the performance of its obligations hereunder. Any purported assignment in
violation of this Section 7.5 shall be void.

          7.6 Governing Law. In any action brought regarding the validity, construction and
enforcement of this Agreement, it shall be governed in all respects by the laws of the State of
Delaware, without regard to the principles of conflicts of laws. The federal and state courts in
the State of Delaware shall have jurisdiction over the parties hereto in all matters arising
hereunder (except for a matter addressed in Section 2.5.3) and the parties hereto agree that the
venue with respect to such matters will be a state or federal court in the State of Delaware.

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

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

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

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

[Remainder of this page intentionally blank]

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

	 	 	 	 	 	 	 	 	 	 	 
	BARR LABORATORIES, INC.	 	 	 	MEDICIS PHARMACEUTICAL
CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 	 	 	 
	 

	 
	 	 	 
	 	 	 
	 	Name:  

	 	 	 	 	 	Name:  	 	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 
	 	Title:

	 	 	 	 	 	Title:	 	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 
	 	Name:
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	Title:
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

 

EXHIBIT A

Patent Rights

	 	 	 
	Issued Patents (all U.S.)	 	Pending Applications (all U.S.)
	5,908,838
	 	11/166,817

11/776,669

11/776,676

11/776,691

11/776,711

11/944,186

11/695,513

11/695,514

11/695,528

11/695,539

11/695,541

12/253,845

A-1

 

EXHIBIT B

Products

	 	 	 
	PRODUCT	 	NDC
	Solodyn 45mg
	 	99207-0460-30

99207-0460-10
	Solodyn 90mg
	 	99207-0461-30

99207-0461-10
	Solodyn 135mg
	 	99207-0462-30

99207-0462-10

B-1

 

EXHIBIT C

Consent Judgment for Permanent Injunction

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

	 	 	 	 	 
	MEDICIS PHARMACEUTICAL
	 	)	 	 
	CORPORATION,
	 	)	 	 
	 
	 	)	 	 
	Plaintiff,
	 	)	 	 
	 
	 	)	 	 
	v.
	 	)	 	C.A. No. 09-033 (JJF)
	 
	 	)	 	 
	MYLAN INC.;
	 	)	 	 
	MATRIX LABORATORIES LTD.;
	 	)	 	 
	MATRIX LABORATORIES INC.;
	 	)	 	 
	SANDOZ, INC.; and
	 	)	 	 
	BARR LABORATORIES, INC.
	 	)	 	 
	 
	 	)	 	 
	Defendants.
	 	)	 	 

UNOPPOSED MOTION FOR ENTRY OF CONSENT JUDGMENT AND

PERMANENT INJUNCTION AS TO BARR LABORATORIES, INC.

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

C-1

 

	 	 	 	 	 
	 

	 	MORRIS, NICHOLS, ARSHT & TUNNELL LLP
 
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Jack B. Blumenfeld (#1014)

Karen Jacobs Louden (#2881)

1201 North Market Street

Wilmington, DE 19899-1347

(302) 658-9200

Jblumenfeld@mnat.com

klouden@mnat.com	 	 
	 
	 	 	 	 
	 

	 	Attorneys for Plaintiff

Medicis Pharmaceutical Corporation	 	 

OF COUNSEL:

Matthew D. Powers

WEIL, GOTSHAL & MANGES LLP

201 Redwood Shores Parkway

Redwood Shores, CA 94065

Telephone: (650) 802-3000

Facsimile: (650) 802-3100

Elizabeth Stotland Weiswasser

Peter Sandel

Jennifer H. Wu

Andrew Werner

WEIL, GOTSHAL & MANGES LLP

767 Fifth Avenue

New York, NY 10153

Telephone: (212) 310-8000

Facsimile: (212) 310-8007

Dated:

C-2

 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

	 	 	 	 	 
	MEDICIS PHARMACEUTICAL
	 	)	 	 
	CORPORATION,
	 	)	 	 
	 
	 	)	 	 
	Plaintiff,
	 	)	 	 
	 
	 	)	 	 
	v.
	 	)	 	C.A. No. 09-033 (JJF)
	 
	 	)	 	 
	MYLAN INC.;
	 	)	 	 
	MATRIX LABORATORIES LTD.;
	 	)	 	 
	MATRIX LABORATORIES INC.;
	 	)	 	 
	SANDOZ, INC.; and
	 	)	 	 
	BARR LABORATORIES, INC.
	 	)	 	 
	 
	 	)	 	 
	Defendants.
	 	)	 	 

CONSENT JUDGMENT AND PERMANENT INJUNCTION

AS TO BARR LABORATORIES, INC.

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

     WHEREAS, this Consent Judgment and Permanent Injunction as to Barr concerns only Medicis’s
claims against Barr and Barr’s counterclaims against Medicis in this civil action no. 09-033-JJF
(referred to herein as the “Litigation”).

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

     WHEREAS, Medicis owns United States Patent No. 5,908,838 (“the ’838 patent”).

C-3

 

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

     WHEREAS, in the Litigation, Medicis alleged that Barr infringed one or more of claims 3, 4,
12, and 13 of the ’838 patent under 35 U.S.C. § 271(e)(2) by virtue of Barr’s submission of Barr’s
ANDA to the FDA.

     WHEREAS, in this Litigation, Medicis alleged that it would be irreparably harmed if Barr is
not enjoined from infringing or actively inducing or contributing to infringement of one or more of
claims 3, 4, 12, and 13 of the ’838 patent.

     WHEREAS, in this Litigation, Medicis requested that this Court enter a permanent injunction
enjoining Barr from infringing the ’838 patent.

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

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

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

C-4

 

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

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

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

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

     2. Barr acknowledges Medicis’s ownership and standing to sue for infringement of United States
Patent No. 5,908,838 (“the ‘838 patent”).

     3. Barr acknowledges that the ’838 patent is valid and enforceable, as described more fully in
the Settlement Agreement.

     4. Barr acknowledges that it has infringed the ’838 patent under 35 U.S.C. § 271(e)(2) and
that Medicis did not authorize the manufacture, use, sale, offer for sale, importation and
distribution of the product described in Barr’s ANDA.

     5. Barr and its affiliates, including, but not limited to, Teva Pharmaceuticals USA, Inc.
(“Teva”), are permanently enjoined as of the date hereof from infringing the ’838 patent by the
manufacture, use, offer to sell, sale, importation, or distribution of any current products, or
future products having the same strength and dosage form of the current Solodyn® products, that are
the subject of Barr’s ANDA that is not pursuant to a license granted by Medicis, and from inducing
others to infringe the ’838 patent by inducing others to manufacture, use, offer to sell, sale,
import, or

C-5

 

distribute any current products, or future products having the same strength and dosage
form of the current Solodyn® products, that are the subject of Barr’s ANDA that is not pursuant to
a license granted by Medicis.

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

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

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

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

IT IS
SO ORDERED, DECREED AND ADJUDGED this ___ day of March, 2009 by:

	 	 	 
	 

	 	 
	The Honorable Joseph J. Farnan Jr.

United States District Judge
	 	 

C-6

 

	 	 	 
	Agreed to:
	 	 
	 
	 	 
	MORRIS, NICHOLS, ARSHT & TUNNELL LLP

	 	POTTER ANDERSON & CORROON LLP

	 
	 	 
	Jack B. Blumenfeld (#1014)

Karen Jacobs Louden (#2881)

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

1201 North Market Street

Wilmington, DE 19899-1347 

(302) 658-9200

Jblumenfeld@mnat.com

klouden@mnat.com

Attorneys for Medicis Pharmaceutical Corporation

	 	Richard L. Horwitz (#2246)

David E. Moore (#3983)

D. Fon Muttamara-Walker (#4646)

Hercules Plaza, 6th Floor

1313 N. Market Street

Wilmington, DE 19801

(302) 984-6000

rhorwitz@potteranderson.com

dmoore@potteranderson.com

fmuttamara-walker@potteranderson.com

	 
	 	 
	OF COUNSEL:

	 	Attorneys for Barr Laboratories, Inc.
	 
	 	 
	Matthew D. Powers 

WEIL, GOTSHAL & MANGES LLP

201 Redwood Shores Parkway

Redwood Shores, CA 94065 

Telephone: (650) 802-3000

Facsimile: (650) 802-3100 

Elizabeth Stotland Weiswasser

Peter Sandel 

Jennifer H. Wu 

Andrew Werner

WEIL, GOTSHAL & MANGES LLP

767 Fifth Avenue

New York, NY 10153

Telephone: (212) 310-8000

Facsimile: (212) 310-8007

	 	OF COUNSEL:

Thomas J. Meloro

Eugene L. Chang

Michael W. Johnson

Chandra E. Garry

Fara S. Sunderji

WILLKIE FARR & GALLAGHER LLP

787 Seventh Avenue

New York, NY 10019

Telephone: (212) 728-8000

Facsimile: (212) 728-8111

C-7

 

SCHEDULE A

Distributed Quantities

45mg (30tab/bottle) — *** bottles

45mg (100tab/bottle) — *** bottles

90mg (30tab/bottle) — *** bottles

90mg (100tab/bottle) — *** bottles

135mg (30tab/bottle) — *** bottles

135mg (100tab/bottle) — *** bottles

 

SCHEDULE B

Press Release(s)

[Medicis/Teva] today announced they have agreed to terminate all legal disputes between them
relating to SOLODYN® (minocycline HCl, USP) Extended Release Tablets. Pursuant to an agreement
entered into between the parties, Teva has confirmed that
Medicis’ patents relating to SOLODYN® are
valid and enforceable, and cover Teva’s activities relating to its generic product under
Abbreviated New Drug Application (ANDA) #65-485. As part of the settlement, Teva has agreed to
immediately stop all further shipments of generic SOLODYN®. Medicis has agreed to release Teva
from liability arising from any prior sales of its generic SOLODYN®, which were not authorized by
Medicis.

Under the terms of the Settlement Agreement, Teva has the option to market its generic versions of
SOLODYN® 45mg, 90mg and 135mg under the SOLODYN® intellectual property rights belonging to Medicis
commencing in November 2011, or earlier under certain conditions. Additional terms were not
disclosed.

C-9exv10w3

Exhibit 10.3

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

LICENSE AND SETTLEMENT AGREEMENT

     THIS LICENSE AND SETTLEMENT AGREEMENT (this “Agreement”) dated as of April 8, 2009 (the
“Effective Date”) is entered into between Medicis Pharmaceutical Corporation, a Delaware
corporation with offices located at 7720 North Dobson Road, Scottsdale, Arizona 85256 (“Medicis”),
and Perrigo Israel Pharmaceuticals Ltd., an Israeli Company with offices located at 29 Lehi Street,
B’nai Brak 51200, Israel and Perrigo Company, a Michigan corporation with offices located at 515
Eastern Avenue, Allegan, MI 49010 (“collectively Perrigo”).

     WHEREAS, Medicis and Perrigo are parties to patent infringement litigation in the Action (as
defined below);

     WHEREAS, Medicis and Perrigo seek to resolve the Action without further litigation;

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

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

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

          1. DEFINITIONS.

          1.1 “Action” means Medicis Pharmaceutical Corporation v. Perrigo Israel Pharmaceuticals, Ltd.
and Perrigo Company, Civil Action No. 1:08-cv-0539-PLM in the United States District Court for the
Western Division of Michigan (Southern Division).

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

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

          1.4 “Business Day” means any day other than a Saturday, Sunday or a day on which banks in
Arizona are authorized or required by law to close.

 

 

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

          1.6 “Control” means with respect to any material, information, or intellectual property right,
that a party (a) owns such material, information, or intellectual property right, or (b) has a
license or right to use such material, information, or intellectual property right, in each case
with the ability to grant to the other party access, a right to use, a license, or a sublicense (as
applicable) to such material, information, or intellectual property right on the terms and
conditions set forth herein, without violating the terms of any agreement or other arrangement with
any Third Party.

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

          1.8 “Generic Equivalent” means, ***

          1.9 “Generic Product” means ***

          1.10 “Grantback Patents” means (a) *** (b) all divisions, continuations,
continuations-in-part, that claim priority to, or common priority with, the patent applications
described in clause (a) above or the patent applications that resulted in the patents described in
clause (a) above, and (c) all patents that have issued or in the future issue from any of the
foregoing patent applications, including utility, model and design patents and certificates of
invention, together with any reissues, renewals, extensions or additions thereto. As of the
Effective Date, Perrigo represents that there are no Grantback Patents in existence.

          1.11 “Gross Profit” means, with respect to all Generic Products sold in a calendar quarter,
the positive remainder, if any, that results from Net Sales of such Generic Products in the
Territory minus the Manufacturing Costs of such Generic Products.

          1.12 “License Trigger” means the earliest of the following dates:

               (a) December 15, 2013;

2

 

               (b) ***

               (c) ***

               (d) ***

          1.13 “Manufacturing Costs” means (each of the following to be determined in accordance with
GAAP applied in a manner consistent with past practices of Perrigo) (a) the delivered cost to
Perrigo of a Generic Product for use or sale in the Territory provided that such Generic Product is
provided pursuant to an arms-length and commercially reasonable agreement, or (b) where Perrigo is
itself the manufacturer, the sum of Materials Costs *** incurred by Perrigo to produce such Generic
Product for use or sale in the Territory. As used herein, “Materials Cost” means Perrigo’s
procurement costs for (i) raw materials (both active and inactive ingredients), and (ii) packaging,
labeling and storing materials, incurred in connection with the manufacture, testing, labeling,
purchasing and distribution of such Generic Product; *** all as determined in accordance with the
U.S. GAAP.

          1.14 “Net Sales” means, with respect to the Generic Product, the aggregate gross price of such
Generic Products received by Perrigo, its Affiliates or sublicensees from unaffiliated retailers,
distributors or other customers, less the sum of the following items (to the extent actually
incurred or accrued and to the extent not already deducted in computing the total amount invoiced
by Perrigo), all of which must directly relate to the sale and distribution of such Generic
Products and be determined in accordance with GAAP applied in a manner consistent with past
practices of Perrigo: (a) returns, credits, rebates, discounts, allowances, promotional payments,
free goods, chargebacks and other price reduction programs customary to the trade or required by
law, (b) sales, valued-added and other taxes imposed upon and paid with respect to such sales
(excluding income or franchise taxes of any kind), (c) *** and (d) customs duties, surcharges and
other governmental charges. Sales between or among Perrigo and its Affiliates shall not be
included in Net Sales unless Perrigo or its Affiliates are the end user of the Generic Products.

          1.15 “Patent Rights” means (a) the patents and patent applications listed on Exhibit A to this
Agreement, (b) all divisions, continuations, continuations-in-part, that claim priority to, or
common priority with, the patent applications described in clause (a) above or the patent
applications that resulted in the patents described in clause (a) above, and (c) all patents that
have issued or in the future issue from any of the foregoing patent applications, including
utility, model and design patents and certificates of invention, together with any reissues,
renewals, extensions or additions thereto.

          1.16 “Patents-In-Suit” means ***.

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

          1.18 “Territory” means the United States of America, its territories and possessions,
including the Commonwealth of Puerto Rico.

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

3

 

          1.20 “Valid Claim” means ***

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

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

     2. LICENSES; RELEASES.

          2.1 License Grant for Generic Product.

               2.1.1 Effective only upon the occurrence of the License Trigger, Medicis hereby grants to
Perrigo a non-exclusive, non-transferable (except as permitted in Section 8.6) license (without the
right to grant sublicenses except to have Generic Products made on behalf of Perrigo) under the
Patent Rights to make, have made, use, offer for sale, sell and import Generic Products inside the
Territory.

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

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

          2.2 ***

          2.3 Grantbacks.

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

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

4

 

          2.4 Validity of Patents-In-Suit.

               2.4.1 Perrigo, on behalf of itself and its Affiliates, hereby admits that the claims of the
Patents-In-Suit are valid and enforceable. The foregoing admission regarding validity and
enforceability shall be binding on Perrigo and its Affiliates and admissible against Perrigo and
its Affiliates in any dispute or litigation between the parties regarding the Patents-In-Suit, and
neither Perrigo nor its Affiliates will challenge any such admission.

               2.4.2 Perrigo, on behalf of itself and its Affiliates, hereby also admits that the making,
using, offering to sell, selling, and/or importation into the Territory of Perrigo’s product that
is to be sold pursuant to Perrigo’s ANDA #090256 (and any amendments thereto) is covered by one or
more claims of the Patent Rights under 35 U.S.C. § 271. ***

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

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

          2.6 Releases. In consideration of the mutual covenants herein and in the Joint
Dismissal Agreement attached hereto as Exhibit C and incorporated herein by reference, and without
limiting any remedies a party may have against the other party for a breach of this Agreement,
Perrigo hereby releases and agrees to release Medicis and Medicis hereby releases and agrees to
release Perrigo from all claims arising out of the Action. Upon the Effective Date, Perrigo and
Medicis shall cause to be completed, executed and filed with the Court a stipulated dismissal with
prejudice of the Action, in the form of the Joint Dismissal Agreement attached hereto as Exhibit C,
and to seek entry of such order by the Court.

     3. FINANCIAL CONSIDERATIONS.

          3.1 Royalty.

               3.1.1 With respect to the Generic Products, and subject to the terms and conditions of this
Agreement, commencing on the date Perrigo begins selling a Generic Product, within sixty (60) days
following the end of each calendar quarter thereafter, Perrigo shall pay to Medicis *** of all
Gross Profit for sales up to *** and *** of all Gross Profit for sales exceeding *** accrued during
such calendar quarter and arising from Net Sales of such Generic Products during such quarter. If
there are one or more Generic Equivalents, other than the Generic Product, being marketed, Perrigo
shall pay to Medicis *** of all Gross Profit for sales up to *** and *** of all Gross Profit for
sales exceeding *** accrued during such calendar quarter and arising from Net Sales of such Generic
Products during such quarter. Medicis’ right to receive a share of the Gross Profit under this
Section 3.1.1 shall expire upon ***

5

 

               3.1.2 Perrigo shall not (a) have any obligation to pay any amounts pursuant to Section 3.1.1,
or (b) be subject to the restrictions under Section 2.1.2, in each case if there is no Valid Claim
in the Territory at the time of sale of a Generic Product.

               3.1.3 Each payment made under this Section 3.1 shall be accompanied by a written report
stating the number and description of all Generic Products sold in the Territory during the
relevant calendar quarter; a detailed breakdown of the Manufacturing Costs associated therewith;
the calculation of Net Sales thereon, including without limitation the amount of any deduction
provided for in the definition of Net Sales; and the calculation of Gross Profits therefrom.

          3.2 Taxes. Perrigo shall be responsible for, and may withhold from payments made to
Medicis under this Agreement, any taxes required to be withheld by Perrigo under applicable law.
Accordingly, if any such taxes are levied on such payments due hereunder (“Withholding Taxes”),
Perrigo shall (i) deduct the Withholding Taxes from the payment amount, (ii) pay all applicable
Withholding Taxes to the proper taxing authority, and (iii) send evidence of the obligation
together with proof of tax payment to Medicis within sixty (60) days following that tax payment.

          3.3 Audit Rights. On no less than fourteen (14) business days notice from Medicis,
Perrigo shall make all such records, books of account, information and data concerning (a) its
sales of Generic Products pursuant to this Agreement; (b) its manufacture of any Generic Products,
and (iii) to the extent in its possession, the manufacture of Generic Products on behalf of Perrigo
by its Third Party contract manufacturer, in each case available for inspection during normal
business hours by an independent auditor selected by Medicis and reasonably acceptable to Perrigo
for the purpose of an audit to determine the accuracy of the reports delivered and amounts paid by
Perrigo pursuant to Section 3.1; provided that Medicis may not request such inspection more than
once in any calendar year unless a discrepancy has been identified by Medicis. Medicis shall be
solely responsible for its costs in making any such audit, unless Medicis identifies a discrepancy
in favor of Perrigo in the calculation of the share of Gross Profit paid to Medicis under this
Agreement in any calendar year from those properly payable for that calendar year of five percent
(5%) or greater, in which event Perrigo shall be solely responsible for the reasonable cost of such
audit and pay Medicis any underpayment.

     4. TERM AND TERMINATION.

          4.1 Term. Subject to Section 4.2, this Agreement shall expire on the expiration of
the later to occur of (a) the date when there are no Valid Claims in the Territory, and (b) the
expiration of all payment obligations of Perrigo to Medicis hereunder.

          4.2 Termination for Cause. Either party may terminate this Agreement upon or after
the material breach of any material provision of this Agreement by the other party if the other
party has not cured such breach within thirty (30) days after receipt of express written notice
thereof by the non-breaching party.

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

6

 

termination, and the provisions of Sections 2.2, 2.3, 2.4, 2.6, 3.3 (until expiration of the
three (3) year period set forth therein), 4.3, 5, 7 and 8 shall survive the expiration or
termination of this Agreement.

     5. CONFIDENTIALITY. 

          5.1 Confidentiality. Until the last to expire of this Agreement, the Joint
Development Agreement, and for a period of five (5) years following the expiration or earlier
termination hereof or thereof, except with respect to any Confidential Information constituting a
trade secret in which case the receiving party’s obligation continues in perpetuity, provided such
receiving party has been informed as to the status of such Confidential Information as a trade
secret, each party shall maintain in confidence all Confidential Information disclosed by the other
party, and shall not use, grant the use of or disclose to any Third Party the Confidential
Information of the other party other than as expressly permitted hereby. Each party shall notify
the other promptly upon discovery of any unauthorized use or disclosure of the other party’s
Confidential Information.

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

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

          5.4 Limitation of Disclosure. The parties agree that, except as otherwise may be
required by applicable laws, regulations, rules or orders, including without limitation the rules
and regulations promulgated by the United States Securities and Exchange Commission, or any
regulations of any national securities exchange, and except as may be authorized in Section 5.5, no
information concerning this Agreement and the transactions contemplated herein shall be made public
by either party without the prior written consent of the other.

          5.5 Publicity. Neither party shall make any publicity releases, interviews or other
non-confidential dissemination of information concerning this Agreement or its terms, or either
party’s performance hereunder, to communication media, financial analysts or others without the
prior written approval of the other party, which approval shall not be unreasonably withheld,
delayed or conditioned. Notwithstanding anything to the contrary in this Agreement, the

7

 

parties understand and agree that either party, may, if so required, disclose some or all of
the information included in this Agreement or other Confidential Information of the other party (a)
in order to comply with its obligations under the law, including the United States Securities Act
of 1933 and the United States Securities Exchange Act of 1934; (b) in order to comply with the
listing standards or agreements of any national or international securities exchange or The NASDAQ
Stock Market or New York Stock Exchange or other similar laws of a governmental authority; (c) to
respond to an inquiry of a governmental authority or regulatory authority as required by law; or
(d) in a judicial, administrative or arbitration proceeding. In any such event the party making
such disclosure shall (i) provide the other party with as much advance notice as reasonably
practicable of the required disclosure, (ii) cooperate with the other party in any attempt to
prevent or limit the disclosure, and (iii) limit any disclosure to the specific purpose at issue.
In connection with any filing of a copy of this Agreement with the Securities and Exchange
Commission, the filing party shall endeavor to obtain confidential treatment of economic and trade
secret information, and shall keep the other party informed as the planned filing (including, but
not limited to providing the other party with the proposed filing reasonably in advance of making
the planned filing) and consider the requests of the other party regarding such confidential
treatment.

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

     6. REPRESENTATIONS AND WARRANTIES.

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

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

          6.3 Disclaimer of Warranties. Except for those warranties set forth in Section 6.1,
neither party makes any warranty, written, oral, express or implied, with respect to this
Agreement. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR

8

 

A PARTICULAR PURPOSE AND NONINFRINGEMENT HEREBY ARE DISCLAIMED BY BOTH PARTIES.

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

          6.5 Equitable Relief. The parties acknowledge and agree that their respective
obligations and undertakings under this Agreement are reasonable and necessary to protect their
legitimate interests, that neither party would have entered into this Agreement in the absence of
such provisions, and that a party’s breach or threatened breach or failure to comply with this
Agreement shall cause the other party significant and irreparable harm, the amount of which shall
be extremely difficult to estimate and ascertain, and for which money damages shall not be
adequate. The parties further acknowledge and agree that either party shall have the right to
apply to any court of competent jurisdiction for an injunction order restraining any breach or
threatened breach of this Agreement and specifically enforcing the terms and provisions of this
Agreement, without the necessity of posting any bond or security, in addition to seeking any other
remedy available to such party in law or equity.

     7. INDEMNIFICATION.

          7.1 Perrigo Indemnification. Perrigo shall indemnify, defend and hold harmless
Medicis, its directors, managers, members, officers, employees, authorized subcontractors and
agents (collectively the “Medicis Indemnified Parties”) from and against any and all liabilities,
obligations, penalties, judgments, disbursements of any kind and nature, losses, damages, costs and
expenses (including, without limitation, reasonable attorney’s fees and costs) (collectively,
“Losses”) incurred as a result of any claims, demands, actions or other proceedings by a Third
Party against an Indemnified Party to the extent arising out of (a) Perrigo’s manufacture or sale
of any Generic Product pursuant to this Agreement; or (b) Perrigo’s breach of any representation,
warranty or covenant under this Agreement, except to the extent that such Losses arise out of
Medicis’ breach of any representation, warranty or covenant under this Agreement.

          7.2 Medicis Indemnification. Medicis shall indemnify, defend and hold harmless
Perrigo, its directors, managers, members, officers, employees, authorized subcontractors and
agents (collectively the “Perrigo Indemnified Parties”) from and against any and all Losses
incurred as a result of any claims, demands, actions or other proceedings by a Third Party against
an Indemnified Party to the extent arising out of Medicis’ breach of any representation, warranty
or covenant under this Agreement, except to the extent that such Losses arise out of Perrigo’s
breach of any representation, warranty or covenant under this Agreement.

          7.3 Obligations. A party which intends to claim indemnification under this Section 7
(the “Indemnified Party”) shall promptly notify the other party (the “Indemnifying

9

 

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

     8. GENERAL PROVISIONS.

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

	 	If to Medicis:	 	Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attn: Chief Executive Officer

Facsimile: 480-291-5175
	 
	 	with a copy to:	 	Medicis Pharmaceutical Corporation

7720 North Dobson Road

Scottsdale, Arizona 85256

Attn: General Counsel

Facsimile: 480-291-8508
	 
	 	If to Perrigo:	 	Perrigo Company

515 Eastern Avenue

Allegan, Michigan 49010

Attn: Chief Executive Officer
Facsimile: 269-673-1386
	 
	 	With a copy to:	 	Perrigo Company

515 Eastern Avenue

Allegan, Michigan 49010

Attn: General Counsel

Facsimile: 269-673-1386

10

 

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

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

          8.3 Waiver. None of the provisions of this Agreement (including the Exhibits hereto)
shall be considered waived by any party hereto unless such waiver is agreed to, in writing, by
authorized agents of such party. The failure of a party to insist upon strict conformance to any
of the terms and conditions hereof, or failure or delay to exercise any rights provided herein or
by law shall not be deemed a waiver of any rights of any party hereto.

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

          8.5 Assignment. Neither party shall assign this Agreement or any part hereof or any
interest herein (whether by operation of law or otherwise) to any Third Party (or use any
subcontractor) without the written approval of the other party; provided, however, that either
party may assign this Agreement without such consent (i) to any Affiliate; and (ii) in the case of
a merger, consolidation, change in control or sale of all or substantially all of the assets of the
party relating to this Agreement and the resulting entity assumes all of the obligations under this
Agreement. No assignment shall be valid unless the permitted assignee(s) assumes all obligations of
its assignor under this Agreement. No assignment shall relieve any party of responsibility for the
performance of its obligations hereunder. Any purported assignment in violation of this Section
8.5 shall be void.

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

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

          8.8 Severability. If any term or provision of this Agreement shall for any reason be
held invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this Agreement shall be

11

 

interpreted and construed as if such term or provision, to the extent the same shall have been
held to be invalid, illegal or unenforceable, had never been contained herein.

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

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

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

[Remainder of this page intentionally blank]

12

 

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

	 	 	 	 	 	 	 	 	 	 	 
	PERRIGO COMPANY	 	MEDICIS PHARMACEUTICAL CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	PERRIGO ISRAEL PHARMACEUTICALS LTD.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

13

 

EXHIBIT A

Patent Rights

***

A-1

 

EXHIBIT B

Products

	 	 	 
	PRODUCT	 	NDC
	Vanos (fluocinonide cream 1%) 30g

	 	99207-0525-30
	Vanos (fluocinonide cream 1%) 60g

	 	99207-0525-60
	Vanos (fluocinonide cream 1%) 120g

	 	99207-0525-10

B-1

 

EXHIBIT C

Joint Dismissal Agreement

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MICHIGAN

	 	 	 	 	 
	MEDICIS PHARMACEUTICAL 
CORPORATION, 

Plaintiff,
 

v. 

PERRIGO ISRAEL 
PHARMACEUTICALS, LTD. and 

PERRIGO COMPANY, 

Defendants.

	 	)

)

)

)

)

)

)

)

)

)

)

)

)

)
	 	

Civil Action No. 1:08-cv-0539-PLM 

Hon. Paul L. Maloney

UNOPPOSED MOTION FOR ENTRY OF CONSENT JUDGMENT AND

PERMANENT INJUNCTION AS TO PERRIGO ISRAEL PHARMACEUTICALS LTD.
 AND PERRIGO COMPANY

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

C-1

 

	 	 	 	 	 
	 	Respectfully submitted,

 	 
	 	
 	 
	 	Larry J. Murphy 	 
	 	Brian D. Wassom

Honigman Miller Schwartz and Cohn LLP

Attorneys for Plaintiff

2290 First National Building

Detroit, MI  48226

Attorneys for Plaintiff

Medicis Pharmaceutical Corporation 	 
	 

OF COUNSEL:

Matthew D. Powers

Weil, Gotshal, & Manges LLP

201 Redwood Shores Parkway

Redwood Shores, CA 94065

Telephone: (650) 802-3000

Facsimile: (650) 802-3100

Nicolas G. Barzoukas

Jason C. Abair

Weil, Gotshal, & Manges LLP

700 Louisiana, Suite 1600

Houston, TX 77002

Telephone: (713) 546-5000

Facsimile: (713) 224-9511

Dated:

C-2

 

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MICHIGAN

	 	 	 	 	 
	MEDICIS PHARMACEUTICAL
	 	)	 	 
	CORPORATION,
	 	)	 	 
	 
	 	)	 	 
	Plaintiff,
	 	)	 	 
	 
	 	)	 	 
	v.
	 	)	 	Civil Action No. 1:08-cv-0539-PLM
	 
	 	)	 	 
	PERRIGO ISRAEL
	 	)	 	Hon. Paul L. Maloney
	PHARMACEUTICALS, LTD. and
	 	)	 	 
	PERRIGO COMPANY,
	 	)	 	 
	 
	 	)	 	 
	Defendants.
	 	)	 	 
	 
	 	)	 	 
	 
	 	)	 	 

CONSENT JUDGMENT AND PERMANENT INJUNCTION

AS TO PERRIGO ISRAEL PHARMACEUTICALS LTD. AND PERRIGO COMPANY

     This matter is before the Court on the unopposed motion of Plaintiff Medicis Pharmaceutical
Corporation (“Medicis”) and Defendants Perrigo Israel Pharmaceuticals, Ltd. and Perrigo Company
(collectively, “Perrigo”).

     WHEREAS, this Consent Judgment and Permanent Injunction as to Perrigo concerns only Medicis’s
claims against Perrigo, and Perrigo’s counterclaims against Medicis in this Civil Action No.
1:08-cv-0539-PLM (referred to herein as the “Litigation”).

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

     WHEREAS, Medicis owns United States Patent No. 6,765,001 (the “’001 patent”) and United States
Patent No. 7,220,424 (the “’424 patent”).

C-3

 

     WHEREAS, Medicis has an approved New Drug Application No. 21-758 for fluocinonide cream 0.1%,
which is sold Under Medicis’s trademark Vanos®.

     WHEREAS, Perrigo Company submitted Abbreviated New Drug Application No. 090256 (“ANDA No.
90-256”) to the FDA under 21 U.S.C. § 355(j) seeking to obtain approval to commercially manufacture
and sell generic fluocinonide cream 0.1%.

     WHEREAS, in the Litigation, Medicis alleged that Perrigo infringed the claims of the ’001 and
’424 patents under 35 U.S.C. § 271(e)(2) by Perrigo Company’s submission of ANDA No. 90-256 to the
FDA.

     WHEREAS, in this Litigation, Medicis requested that a permanent injunction be issued under 35
U.S.C. § 271(e) restraining or enjoining Perrigo, its officers, agents, or attorneys and employees,
and those acting in privity or in concert with them, from engaging in the commercial manufacture,
use, offer to sell, or sale within the United States, or importation into the United States, of any
therapeutic composition, or method of use covered by the ’001 and ’424 patents for the full term
thereof, and from inducing or contributing to such activities.

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

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

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

C-4

 

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

     WHEREAS, Medicis and Perrigo each consent to personal jurisdiction in the Western District of
Michigan for purposes of enforcing the Settlement Agreement.

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

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

     2. Perrigo acknowledges Medicis’s ownership and standing to sue for infringement of the ’424
patent.

     3. Perrigo acknowledges that the ’424 patent is valid and enforceable, as described more fully
in the Settlement Agreement.

     4. Pursuant to 35 U.S.C. § 271(e)(4)(A), the effective date of any Food and Drug
Administration approval of ANDA No. 90-256 will be a date not earlier than the License Trigger, as
defined in the Settlement Agreement.

     5. Perrigo acknowledges that it has infringed the ’424 patent under 35 U.S.C. § 271(e)(2) and
that Medicis did not authorize the manufacture, use, sale, offer for sale, importation and
distribution of the product described in ANDA No. 90-256.

     6. Perrigo and its affiliates are permanently enjoined as of the date hereof from infringing
the ’424 patent by the manufacture, use, offer to sell, sale, importation, or distribution of any
current products, or future products having the same strength and dosage form of the current Vanos®
products, that are the subject of ANDA No. 90-256 that is not pursuant to a license granted by
Medicis, and from inducing others to infringe the ’424 patent by inducing

C-5

 

others to manufacture,
use, offer to sell, sale, import, or distribute any current products, or future products having the
same strength and dosage form of the current Vanos® products, that are the subject of ANDA No.
90-256 and that is not pursuant to a license granted by Medicis.

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

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

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

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

IT IS
SO ORDERED, DECREED AND ADJUDGED this ___ day of April, 2009 by:

	 	 	 
	 

	 	 
	The Honorable Paul L. Maloney

United States District Judge
	 	 

C-6

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