Exhibit 10.1
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT
WERE OMITTED AND REPLACED WITH “***”. A COMPLETE
VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN
APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF
THE EXCHANGE ACT OF 1934.
SETTLEMENT AND LICENSE
AGREEMENT
This Settlement and License
Agreement (this “AGREEMENT”), effective as of
April 4, 2008 (“EFFECTIVE DATE”), is entered into
by and among Depomed, Inc. (collectively with its AFFILIATES,
“DEPOMED”), a California corporation having its
principal place of business in Menlo Park, California, and Teva
Pharmaceuticals USA, Inc., a Delaware corporation having its
principal place of business in North Wales, Pennsylvania
(collectively with its AFFILIATES, “TEVA”).
RECITALS
WHEREAS, DEPOMED commenced Civil Action
No. C-06-0100 CRB against IVAX Corporation and IVAX
Pharmaceuticals, Inc. (collectively, “IVAX”) in
the United States District Court for the Northern District of
California (the “ACTION”), asserting infringement of
United States Patent Nos. 6,340,475 and 6,635,280;
WHEREAS, IVAX asserted counterclaims against DEPOMED in
the ACTION;
WHEREAS, DEPOMED and IVAX desire to amicably resolve the
ACTION and all claims that have been and/or could be asserted
therein by them;
WHEREAS, IVAX is an AFFILIATE of TEVA;
NOW, THEREFORE,
for good, valuable and reciprocal
consideration of the foregoing recitals, together with the license,
payment, releases and promises set forth herein, the receipt and
sufficiency of which are hereby acknowledged, DEPOMED and TEVA
agree as follows:
Confidential Information, indicated by [***] has
been omitted from this filing and filed separately with the
Securities Exchange Commission
AGREEMENT
1.
DEFINITIONS
In this AGREEMENT, the capitalized
words and phrases recited below shall have the following
meanings:
1.1
“AFFILIATE(S)”
shall mean any corporation or other entity that was, currently is,
or in the future is, directly or indirectly, controlled by,
controlling or under common control with the recited entity.
For this purpose, “control” shall mean (a) direct
or indirect beneficial ownership of fifty percent (50%) or more of
the voting stock, voting rights or share capital of the recited
entity, or at least fifty percent (50%) interest in the income of
such entity, or (b) the ability to otherwise control or direct
the decisions of the board of directors or equivalent governing
body thereof.
1.2
[***]
1.3
“LICENSED
PATENTS” shall mean (i) United
States Patent No. 6,340,475 issued January 22, 2002 and
any United States patent application or patent that claims priority
based on United States patent application serial number 09/282,233
filed on March 29, 1999, including all continuations,
continuations-in-part, divisionals, re-examinations, extensions or
reissues of any such patent application or patent; and
(ii) United States Patent No. 6,635,280 issued
October 21, 2003 and any United States patent application or
patent that claims priority based on United States patent
application serial number 10/045,823 filed on November 6,
2001, including all continuations,
continuations-in-part,
2
Confidential Information, indicated by [***] has
been omitted from this filing and filed separately with the
Securities Exchange Commission
divisionals,
re-examinations, extensions or reissues of any such patent
application or patent.
1.4
“LICENSED
PRODUCTS” shall mean TEVA’s Metformin ER products
approved by the Food and Drug Administration pursuant to
Abbreviated New Drug Application Nos. 76-545, 76-269 and 76-864 for
sale in the TERRITORY.
1.5
“PARTIES” shall
mean DEPOMED, IVAX and TEVA and “PARTY” means any of
them.
1.6
“ROYALTY
PAYMENT CAP” shall mean TWO MILLION FIVE HUNDRED THOUSAND
United States dollars ($2,500,000.00).
1.7
“TERRITORY” shall
mean the fifty states of the United States of America, the District
of Columbia, the Commonwealth of Puerto Rico, and all other
territories and possessions of the United States.
1.8
“THIRD
PARTY” shall mean any party other than DEPOMED or
TEVA.
2.
LICENSE
GRANT
2.1
Subject to the
terms and conditions herein, DEPOMED hereby grants to TEVA, who
accepts the same, a non-exclusive, non-transferable, perpetual and
irrevocable right and license (without the right to sublicense)
under the LICENSED PATENTS, or any foreign counterparts thereof
only to the extent that the LICENSED PRODUCT is made outside the
TERRITORY [***]
for use in the
TERRITORY, to make, have made, use, import, sell, and offer to sell
LICENSED PRODUCTS in or for the TERRITORY for the duration of this
AGREEMENT. Notwithstanding the foregoing, TEVA may grant a
limited sublicense to THIRD PARTIES for the sole purpose of
manufacturing and distributing the LICENSED PRODUCTS for
TEVA.
3
Confidential Information, indicated by [***] has
been omitted from this filing and filed separately with the
Securities Exchange Commission
2.2
TEVA acknowledges
and agrees that DEPOMED retains the right to use the LICENSED
PATENTS and grant licenses of the LICENSED PATENTS. All such
licenses shall be subject to the license set forth in
Section 2.1.
3.
TERM
3.1
This AGREEMENT
shall become effective as of the EFFECTIVE DATE.
4.
PAYMENTS
4.1
One Time
Payment. In consideration for
the license granted under the LICENSED PATENTS hereunder and within
two (2) business days after the EFFECTIVE DATE,
TEVA shall pay
DEPOMED a one-time payment in the amount of SEVEN MILLION FIVE
HUNDRED THOUSAND United States dollars ($7,500,000.00). The
payment shall be made in United States Dollars and by electronic
funds transfers in accordance with wire transfer instructions
provided to TEVA by DEPOMED or by any other mutually acceptable
form of fund transfer.
4.2
Royalty
Payments . In consideration for
the license granted under the LICENSED PATENT(S) hereunder,
from and after April 1, 2008, and until expiration of the last
to expire of the LICENSED PATENTS, TEVA agrees to pay DEPOMED a
royalty payment equal to [***] TEVA shall pay
DEPOMED the royalty due hereunder within five (5) business
days after receipt of the invoice contemplated by the immediately
preceding sentence. Notwithstanding the foregoing, the
obligations of TEVA to make royalty payments under this
Section 4.2 shall terminate at such time as TEVA has paid
DEPOMED royalties under this Section 4.2 in an aggregate
amount equal to the ROYALTY
4
Confidential Information, indicated by [***] has
been omitted from this filing and filed separately with the
Securities Exchange Commission
PAYMENT
CAP. As such, the aggregate payments under Sections 4.1 and
4.2 shall not exceed TEN MILLION United States dollars
($10,000,000.00).
4.3
Taxes.
Each PARTY
shall be separately and individually responsible for the tax
consequences, if any, to that PARTY associated with the payments
made hereunder.
4.4
Notwithstanding
Section 4.3, where required by law, TEVA shall have the right
to withhold applicable taxes from any payment to be made by TEVA to
DEPOMED according to section 4.2. TEVA shall provide DEPOMED
with receipts from the appropriate taxing authority for all
payments of taxes withheld and paid by TEVA to such authorities on
behalf of DEPOMED.
4.5
[***]
4.6
[***]
4.7
Nothing in the
foregoing Sections 4.4 through 4.6 shall be interpreted to diminish
or change in any way the ROYALTY PAYMENT CAP or the maximum amount
DEPOMED may receive from TEVA of TEN MILLION United States dollars
($10,000,000.00) pursuant to Sections 4.1 and 4.2.
5.
DISMISSAL AND
RELEASES
5.1
Dismissal.
Promptly
upon the receipt of the payment pursuant to Section 4.1,
DEPOMED and IVAX shall cause to be filed a fully executed
stipulated dismissal in the form attached hereto as
Exhibit A .
5.2
DEPOMED hereby
covenants that DEPOMED will not sue, assert any claim or
counterclaim against, or otherwise participate in any action or
proceeding against TEVA—or any of its customers, suppliers,
importers, manufacturers, or distributors—or cause or
authorize any person or entity to do any of the
5
foregoing, in
each case claiming or otherwise asserting that the manufacture,
use, importation, sale or offer for sale of (in or for the
TERRITORY) any TEVA product AB-rated to Glucophage XR®,
infringes any LICENSED PATENT or any foreign counterpart thereof
(but such foreign counterparts only to the extent that the
applicable product is made outside the TERRITORY only for use in
the TERRITORY), whether occurring before, on or after the EFFECTIVE
DATE.
5.3
TEVA’s
Releases. TEVA hereby
irrevocably releases, acquits and forever discharges DEPOMED and
its predecessors and successors in interest, officers, directors,
owners, executives, employees, agents, attorneys, representatives,
subsidiaries, partners, joint ventures, insurers, underwriters,
trustees-in-bankruptcy, past or future parents, successors in
interest or assigns of the LICENSED PATENTS, and permitted assigns
of any of the foregoing from any and all claims or liabilities of
any kind and nature, at law, in equity, or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, that
were or could have been brought in the ACTION (including as if a
claim for patent infringement had been brought against TEVA in the
ACTION). Notwithstanding the foregoing, TEVA reserves its
rights to raise any and all claims, defenses and counterclaims that
were or could have been raised in the ACTION in any future action
regarding the LICENSED PATENTS and any product other than the
LICENSED PRODUCTS. TEVA agrees not to raise any claim,
defense or counterclaim as an avoidance of its obligations to make
the payments specified in Sections 4.1 and 4.2 herein.
6
5.4
|
