Exhibit 10.2
SETTLEMENT AND LICENSE
AGREEMENT
This is an agreement (hereinafter
referred to as “ Agreement ”) dated as of this
9th day of January, 2009, by and among Warner Chilcott Company,
Inc. (“ WCCI ”), a corporation organized and
existing under the laws of Puerto Rico, and Watson Pharmaceuticals,
Inc. (“ WPI ”), a corporation organized and
existing under the laws of the State of Nevada, and Watson
Laboratories, Inc. (“ WLI ”, and, together with
WPI, “ Watson ”), a corporation organized and
existing under the laws of the State of Nevada. WCCI and Watson are
sometimes individually referred to herein as a “ Party
” and collectively referred to herein as “
Parties .”
WHEREAS, the Parties are presently
involved in the Lawsuit, in which it has been asserted that Watson
infringes certain claims of U.S. Patent No. 5,552,394 (the
“ Patent ” and the asserted claims therein, the
“ Patent Claims ”), with respect to certain of
which Patent Claims Watson has asserted affirmative defenses and
counterclaims alleging invalidity, unenforceability and/or
non-infringement; and
WHEREAS, the Parties wish to fully
settle the Lawsuit concerning the Patent Claims with respect to the
Watson Product upon the terms and subject to the conditions set
forth below.
NOW, THEREFORE, in consideration of
the mutual promises and covenants contained in this Agreement and
for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1. The following terms, when used
with initial capital letters shall have the meaning set forth
below.
a. “ Affiliate ”
shall mean with respect to a Party, any Person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Party at any
time during the period for which the determination of affiliation
is being made. For the purposes of this definition, “
control ” (including the terms “ controlled
by ” and “ under common control with
”) means the possession, directly or indirectly, of the power
to direct or cause the direction of the management, policies or
affairs of a person, whether through ownership of voting securities
or general partnership or managing member interests, by contract or
otherwise, including the ownership, directly or indirectly, of
securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such person.
Without limiting the generality of the foregoing, a person shall be
deemed to control any other person in which it owns, directly or
indirectly, a majority of the voting interests.
b. “ ANDA ” shall
mean an Abbreviated New Drug Application as defined under 21 U.S.C.
§ 355(j).
c. “ FDA ” shall
mean the United States Food and Drug Administration.
d. “ Launch Date
” shall mean the earliest of (i) January 22, 2014,
(ii) the date of a final, nonappealable judicial order that
the Patent is invalid, unenforceable or not infringed by a Third
Party’s generic version of the WCCI Product and
(iii) the date on which Watson is licensed under Paragraph 7
to launch.
e. “ Lawsuit ”
shall mean Warner Chilcott Company, Inc. v. Watson
Pharmaceuticals, Inc . and Watson Laboratories, Inc. ,
2:06-CV-03491, U.S. District Court for the District of New
Jersey.
f. “ Losses ”
shall mean all pending and potential claims, demands, all manner of
actions, causes of action, suits, debts, liabilities, losses,
damages, attorneys’ fees, costs, expenses, judgments,
settlements, interest, punitive damages and other damages or costs
of whatever nature, whether known or unknown, pending or future,
certain or contingent.
g. “ Person ”
means any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited
liability company, limited liability partnership, unincorporated
organization, government (or any agency or political subdivision
thereof) or other legal Person or organization.
h. “ Proceeding ”
shall mean any action, audit, litigation, investigation, suit or
other proceeding.
i. “ Related Parties
” shall mean a Party’s Affiliates, directors, officers,
employees, agents, representatives, heirs, assigns, predecessors,
successors or other related parties.
j. “Third Party” shall
mean any Person other than a Party or its Affiliates.
k. “ Watson Product
” shall mean the oral contraceptive drug that is described
in, and is the subject of, ANDA No. 78-267 or any other ANDA
filed by Watson or its Affiliates for which the WCCI Product is the
reference product.
l. “ WCCI NDA ”
shall mean New Drug Application (an “ NDA ”)
No. 021871.
m. “ WCCI Product
” shall mean the oral contraceptive drug that is described
in, and is the subject of the WCCI NDA, which is currently marketed
by WCCI under the trademark Loestrin ® 24 Fe.
2. Upon the terms and subject to the
conditions of this Agreement, in consideration of the mutual
execution of this Agreement and the mutual agreement to be legally
bound by the terms hereof, each Party, on behalf of itself and its
Related Parties, hereby releases, acquits and forever discharges
each other Party and its Related Parties from any and all Losses
arising out of, derived from, predicated upon or relating to the
Patent Claims, the actions asserting such Patent Claims and the
Lawsuit; provided , however , nothing in this
Agreement shall prevent or impair the right of any Party to bring a
Proceeding in court or any other forum for a breach of this
Agreement or any representation, warranty or covenant herein.
Notwithstanding this release or anything herein to the contrary,
nothing herein shall preclude Watson from challenging the validity,
enforceability and/or infringement of the Patent in any future
litigation concerning a product other than (i) the Watson
Product, or (ii) any other product that, as designed, could be
AB rated to the WCCI Product. The Parties agree to the entry of a
dismissal without prejudice of the Lawsuit, with each side bearing
its own costs and attorneys’ fees. Promptly following
the
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execution of this Agreement, the Parties shall
cause to be filed with the United States District Court for the
District of New Jersey, all necessary papers, including a
Stipulation of Dismissal, attached as Attachment A, required to
dismiss all claims and counterclaims, motions, and petitions
asserted in the Lawsuit and shall take all other necessary actions
to obtain the settlement and dismissal of the Lawsuit.
3. Each Party acknowledges and
agrees that:
a. It may have sustained Losses that
are presently unknown and unsuspected, and that such Losses might
give rise to Losses in the future. Nevertheless, each Party
acknowledges and agrees that this Agreement has been negotiated and
agreed upon, notwithstanding the existence of such possible Losses,
all of which have been hereby released under Paragraph 2
hereof.
b. If any fact relating to this
Agreement or the Lawsuit and now believed to be true is found
hereafter to be other than, or different from, that which is now
believed, each Party expressly assumes the risk of such difference
in fact and agrees that this Agreement shall be, and will remain,
effective notwithstanding any such difference in fact, subject to
each Party’s right to bring a Proceeding for a breach of this
Agreement or any representation, warranty or covenant
herein.
c. This Agreement may be pleaded as
a full and complete defense to, and used as a basis for injunction
against, any Proceeding that may be instituted, prosecuted or
attempted in breach hereof. Should any Party institute a Proceeding
to enforce any provision of this Agreement, or for Losses by reason
of any alleged breach of any provision hereof, or for a declaration
of such Party’s rights or obligations hereunder, or for any
other judicial remedy predicated upon the breach by the other Party
of this Agreement or as may otherwise be permitted hereunder, the
prevailing Party shall be reimbursed by the losing Party for all
reasonable and necessary costs and expenses incurred thereby,
including, but not limited to, reasonable attorneys’ fees for
the services rendered to the Party finally prevailing in any such
Proceeding.
4. Watson covenants and agrees that
it shall not sell the Watson Product prior to January 22, 2014
or such earlier date upon which it is licensed to sell the Watson
Product pursuant to Paragraphs 5, 7 or 8 hereof. Watson agrees that
to the extent that Watson or its Affiliates sells, has sold, or
offers for sale any Watson Product in the United States in
violation of this Paragraph 4, such breach will cause irreparable
harm to WCCI. Watson hereby irrevocably and unconditionally
consents to immediate entry of a temporary restraining order,
preliminary injunction and permanent injunction, without the
requirement to post a bond, to enforce the provisions of this
Paragraph 4.
5. WCCI covenants and agrees that
neither it nor its Affiliates shall market or supply, or grant a
Third Party any rights (under the Patent or otherwise) to market a
generic version of the WCCI Product, whether manufactured under the
WCCI NDA or an ANDA, on any date prior to the date that is one
hundred eighty (180) days following the Launch Date, unless
WCCI agrees to establish an early launch date for Watson that is at
least one hundred eighty (180) days prior to the commencement
of marketing by WCCI, its Affiliates or such Third Party (an
“ Early Launch
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Date ”). Any authorization of or license to a
Third Party by WCCI to market the WCCI Product in which WCCI
assigns or transfers the exclusive right to market the WCCI Product
shall not trigger this provision, so long as such authorization or
license is subject to the terms and conditions of this Agreement.
WCCI shall, to the extent reasonably practicable, provide Watson
with 60 days’ advance written notice of any such Third Party
sale or license. For the avoidance of doubt, nothing in this
Paragraph 5 shall prevent WCCI and its Affiliates from marketing or
from supplying, authorizing or licensing a Third Party to market a
generic version of the WCCI Product, so long as such product is not
sold commercially until the day that is one hundred eighty
(180) days following the Launch Date or the Early Launch
Date.
6. Upon the terms and subject to the
conditions of this Agreement, WCCI grants to Watson a
non-exclusive, fully paid-up, worldwide, royalty-free, irrevocable
license, under the Patent and all regulatory exclusivities
pertaining to and covering the WCCI Product, to manufacture and
offer for sale in the United States commencing prior to
January 22, 2014 for sale commencing on January 22, 2014,
and to sell effective January 22, 2014 and thereafter, the
Watson Product, all for the terms of such Patent and regulatory
exclusivities. WCCI shall use its commercially reasonable efforts
to cooperate with Watson, at Watson’s sole cost and expense,
as may be required to obtain FDA approval of Watson’s ANDA
No. 78-267 effective January 22, 2014.
7. If a Third Party commercially
launches a generic version of the WCCI Product without
authorization from WCCI, then WCCI shall grant to Watson the
license granted pursuant to Paragraph 6 hereof, effective on the
same date as such Third Party launch. Further provided, in the
event a Third Party commercially launches a generic version of the
WCCI Product and WCCI subsequently succeeds in having such Third
Party cease its sales of such product, then the license granted
pursuant to this Paragraph 7 shall be suspended at such time as the
Third Party product is no longer commercially available or, if such
cessation of sales is pursuant to an injunction issued by a court,
the date of such injunction, whichever is earlier, and the license
shall be reinstated upon the subsequent occurrence, if any, of an
“at risk” launch as described in the first sentence of
this Paragraph 7. WCCI shall use its commercially reasonable
efforts to cooperate with Watson, at Watson’s sole cost and
expense, as is required to obtain FDA approval of Watson’s
ANDA No. 78-267 under a license granted pursuant to this
Paragraph 7.
8. If a Third Party obtains a final,
nonappealable judicial order
