<PAGE>
Exhibit 10.51
BOTOX(R) -- CHINA
LICENSE AGREEMENT
BY AND BETWEEN
ALLERGAN, INC.
ALLERGAN SALES, LLC
AND
GLAXO GROUP LIMITED
<PAGE>
BOTOX(R) -- CHINA LICENSE AGREEMENT
THIS BOTOX(R) --
CHINA LICENSE AGREEMENT including the exhibits and
schedules referred to herein and attached
hereto, (collectively, the
"Agreement"), dated September 30, 2005 (the
"Effective Date"), is made and
entered into by and between ALLERGAN, INC.,
a Delaware corporation having a
place of business at 2525 Dupont Drive,
Irvine, California 92612, and ALLERGAN
SALES, LLC, a Delaware Limited Liability
Company having a place of business at
2525 Dupont Drive, Irvine, California
92612, (ALLERGAN, INC. and ALLERGAN SALES,
LLC are collectively referred to herein as
"ALLERGAN") and GLAXO GROUP LIMITED,
a private limited company incorporated in
England and Wales, having its
registered office at Glaxo Wellcome House,
Berkeley Avenue, Greenford,
Middlesex, England UB6 0NN ("GSK").
RECITALS
A. ALLERGAN
Controls (as defined in Article 1 below) the ALLERGAN Patent
Rights (as defined in Article 1 below),
ALLERGAN Know-How (as defined in Article
1 below) and ALLERGAN Trademarks;
B. GSK desires
to obtain from ALLERGAN, and ALLERGAN is willing to grant to
GSK, certain licenses under the ALLERGAN
Patent Rights, ALLERGAN Know-How and
ALLERGAN Trademarks under the terms and
conditions herein; and
C. ALLERGAN will
have Product manufactured and supplied to GSK under the
terms of the Supply Agreement (as defined
in Article 1 below).
NOW, THEREFORE,
in consideration of the mutual covenants and obligations
set forth herein, and for other good and
valuable consideration, the receipt and
sufficiency of which is hereby
acknowledged, ALLERGAN and GSK hereby agree as
follows:
1. DEFINITIONS
As used in this
Agreement, the following terms will have the meanings
indicated:
1.1 An
"Affiliate" of a Party or Person means any Person, whether de
jure
or de facto, that directly or indirectly,
controls, is controlled by, or is
under common control with such Party or
Person, as applicable. Solely as used in
this definition, "control" means (a) direct
or indirect ownership of more than
fifty percent (50%) of the equity (or such
lesser percentage which is the
maximum allowed to be owned by a foreign
corporation in a particular
jurisdiction) having the power to vote on
or direct the affairs of such Party or
Person, as applicable, or (b) the
possession, directly or indirectly, of the
power to direct or cause the direction of
the policies and
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
<PAGE>
management of such Party or Person, as
applicable, whether by the ownership of
stock, by contract, or otherwise.
1.2 "Agreement"
will have the meaning set forth in the preamble.
1.3 "ALLERGAN"
will have the meaning set forth in the preamble.
1.4 "ALLERGAN
Corporate Trademarks" will have the meaning set forth in
Section 1.9.
1.5 "ALLERGAN
Know-How" means any and all know how, information, data
(including, without limitation,
pre-clinical data, toxicology information and
clinical trial data), documents, materials,
and software (including, but not
limited to, marketing information,
technical information, regulatory
information, clinical information,
processes, procedures, methods, formulae,
protocols, and techniques) relating to
Product (including, without limitation,
Product Improvements and Enhancements) but
not including ALLERGAN Manufacturing
Information, which exists as of the
Effective Date or during the Term and is
Controlled by ALLERGAN or its
Affiliates.
1.6 "ALLERGAN
Manufacturing Information" means any and all confidential
documents and information Controlled by
ALLERGAN and/or its Affiliates and
relating to the manufacture of Product.
1.7 "ALLERGAN
Patent Rights" means any and all patent applications and
patents generically or specifically
claiming or covering the use, sale, offer
for sale and/or import of Product
(including without limitation the active
pharmaceutical ingredient in Product and
its dosage forms and formulations),
that are Controlled by ALLERGAN or its
Affiliates as of the Effective Date or
during the Term in the Territory, including
without limitation the following:
(a) patent applications and patents set
forth on Exhibits A and A-1, such
Exhibits to be updated by ALLERGAN at least
one (1) time in each Calendar Year
during the Term and also within thirty (30)
calendar days after GSK's written
request, which request will not be made by
GSK more than one (1) time in any
Calendar Year during the Term; (b)
divisions, continuations,
continuations-in-part, renewals, and
substitute applications of any patent
applications described in (a); (c) patents
that may issue from any patent
applications described in (a) or (b); (d)
reissues, reexaminations, and
extensions or restorations of patents
described in (a) or (c) by existing or
future extension or restoration mechanisms,
including without limitation, patent
restoration and supplementary protection
certificates or the equivalent thereof;
and (e) any other form of government-issued
right in the Territory substantially
similar to any of the foregoing.
Notwithstanding anything to the contrary,
ALLERGAN Patent Rights will not include any
patent applications or patents
claiming or covering any processes for
manufacture of Product. For clarity,
ALLERGAN Patent Rights includes those
patents and patent applications which are
Controlled by ALLERGAN or any of its
Affiliates in the Territory, which
generically or specifically cover the use,
sale, offer for sale and/or import of
any Product Improvements and
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
2
<PAGE>
Enhancements made by or on behalf of
ALLERGAN. For further clarity, ALLERGAN
Patent Rights do not include any GSK Patent
Rights.
1.8 "ALLERGAN
Product Trademarks" will have the meaning set forth in
Section 1.9.
1.9 "ALLERGAN
Trademarks" means any trademarks, applications to register
trademarks, intent-to-use applications, or
other registrations or applications
related to trademarks, common-law
trademarks and rights, service marks, trade
dress, logos, trade names, corporate names,
all rights arising from the use of
or existing in connection with domain
names, and all goodwill associated with
the foregoing and all registrations and
applications for registration of any of
the foregoing, all to the extent Controlled
by ALLERGAN or its Affiliates in the
Territory as of the Effective Date or
during the Term that are (a) specific to
and only used with Product, as set forth in
Exhibit B (the "ALLERGAN Product
Trademarks") or (b) used in connection
with, but are not specific to or used
exclusively with, Product (including,
without limitation Housemarks of
ALLERGAN), as set forth in Exhibit C (the
"ALLERGAN Corporate Trademarks").
1.10 "Allowable
Standard Cost" means an increase in the Standard Cost of no
greater than, (a) during each Calendar Year
commencing with the first (1st)
Calendar Year and continuing through the
end of *** and (b) from and after
***,***. When calculating the Allowable
Standard Cost for each Calendar Year
after the first (1st) Calendar Year, the
'Standard Cost' referred to in this
Section 1.10 will be the lower of the
Allowable Standard Cost for the
immediately preceding Calendar Year or the
Standard Cost, as recalculated by
ALLERGAN in the immediately preceding
Calendar Year as provided in Section 1.50.
1.11 "Applicable
Law" means all applicable provisions of any and all
federal, national, state, provincial, and
local statutes, laws, rules,
regulations, administrative codes,
ordinances, decrees, orders, decisions,
injunctions, awards, judgments, permits and
licenses of or from any governmental
authorities relating to or governing the
use or regulation of the subject item
or action.
1.12 "Calendar
Quarter" means each of the three (3) month periods ending
March 31, June 30, September 30, and
December 31; provided, however, that the
first (1st) Calendar Quarter under this
Agreement will be the period beginning
on the Effective Date and ending on the end
of the Calendar Quarter in which the
Effective Date is encompassed.
1.13 "Calendar
Year" means, for the first Calendar Year, the period
beginning on the Effective Date and ending
December 31, 2005, and for each
Calendar Year thereafter, each successive
period beginning on January 1 and
ending twelve (12) consecutive calendar
months later on December 31; provided,
however, that the last Calendar Year of the
Term will be the period beginning on
January 1 and ending on the effective date
of expiration or termination of the
Term.
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
3
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1.14
"Commercially Reasonable Efforts" means efforts and resources
normally
used by a Party in the Territory in the
exercise of its reasonable business
discretion relating to a prescription
pharmaceutical product owned by it or to
which it has co-exclusive rights, which is
of similar market potential at a
similar stage in its development or product
life, taking into account issues of
patent coverage, safety and efficacy,
product profile, the competitiveness of
the marketplace, the proprietary position
of the compound or product, the
regulatory structure involved, the
profitability of the applicable products, and
other relevant factors, including without
limitation technical, legal,
scientific and/or medical factors.
1.15 "Competing
Product" will have the meaning set forth in Section 7.5.2.
1.16
"Confidential Information" will have the meaning set forth in
Section
10.1.
1.17 "Control"
means, with respect to the subject item, the ability and
authority of a Party or its Affiliate,
whether arising by ownership, possession
or pursuant to a license or sublicense, to
grant licenses or sublicenses to the
other Party under or to the subject item as
specified in this Agreement, without
breaching the terms of any agreement with
any Third Party and/or its Affiliates.
1.18
"Co-Promotion Option" will have the meaning set forth in Section
2.6.
1.19
"Co-Promotion Term" will have the meaning set forth in Section
2.6.
1.20 "Cosmetic
Indication" means the treatment, minimization, and/or
eradication of, or the appearance of,
glabellar lines, crow's feet, or any lines
or wrinkles on the face.
1.21 "Current
Indications" means those Indications for which ALLERGAN or
any of its Affiliates, as of the Effective
Date, has received Regulatory
Approval in the Territory to use Product
for the treatment, prevention or
palliation of such Indications, which
Indications include blepharospasm (benign
essential blepharospasm and essential
blepharospasm), facial spasm, and
associated focal dystonias.
1.22 "Effective
Date" means the date on which this Agreement is mutually
executed by authorized representatives of
each Party, which date will be that
which is set forth in the preamble.
1.23 "Extended
Term" will have the meaning set forth in Section 9.2.1.
1.24 "Field of
Use" means any and all uses of Product for the Current
Indications, Cosmetic Indication, and
Future Indications.
1.25 "Force
Majeure Event" will have the meaning set forth in Section
11.13.
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
4
<PAGE>
1.26 "Future
Indications" means all treatment, prevention or palliation of
all Indications other than the Cosmetic
Indication and Current Indications.
1.27 "Good
Clinical Practice" means the SFDA regulation number 3 issued by
the SFDA on August 6, 2003 relating to the
standard for performance of clinical
trials and its amendments related rules and
regulations.
1.28 "Good
Post-Marketing Study Practice" means the SFDA regulation number
3 issued by the SFDA on August 6, 2003
relating to the standard for performance
of clinical trials and its amendments
related rules and regulations.
1.29 "Good
Vigilance Practice" means the SFDA regulation number 7 issued
by
the State Food and Drug Administration on
March 4, 2004 relating to the
responsibilities and procedures of
post-marketing safety management, adverse
reaction reporting and surveillance and its
amendments related rules and
regulations.
1.30 "GSK" will
have the meaning set forth in the preamble.
1.31 "GSK Patent
Rights" means any and all patents and patent applications
Controlled by GSK or its Affiliates, which
generically or specifically claim or
cover the making, having made, use, sale,
offer for sale, and/or import of
Product (including, for example, any
Product Improvements and Enhancements
inside and outside of the Territory, which
are made by or on behalf of GSK
pursuant to this Agreement and relate to
Product in the Field of Use), which
includes, without limitation, the
following: (a) divisions, continuations,
continuations-in-part, renewals, and
substitute applications of any such patent
applications; (b) patents that may issue
from any such patent applications; (c)
reissues, reexaminations, and extensions or
restorations of patents described in
(b) by existing or future extension or
restoration mechanisms, including without
limitation, patent restoration and
supplementary protection certificates or the
equivalent thereof; and (d) any other form
of government-issued right inside or
outside of the Territory substantially
similar to any of the foregoing. For
clarity, GSK Patent Rights do not include
any ALLERGAN Patent Rights.
1.32 "GSK Sales
Commencement Date" means the date of invoice of the first
commercial sale of Product in the Field of
Use in the Territory by GSK (or its
Affiliates, sublicensees or distributors)
to a Third Party.
1.33
"Housemarks" means the names of a Party or its Affiliates, or
variations of the names, and all related
trade dress, logotypes, symbols, and
other trademarks used by a Party or its
Affiliates in connection with its
products in the Territory.
1.34
"Indication" means any distinct disease or medical condition. For
the
purpose of clarification, any label
expansion or other extension into a
different segment of any Current Indication
will not be considered a different
Indication.
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
5
<PAGE>
1.35 "Initial
Consulting Period" will have the meaning set forth in Section
4.2.1.
1.36 "Initial
Term" will have the meaning set forth in Section 9.1.
1.37
"Manufacturer" means Allergan Pharmaceuticals Ireland, a Cayman
Islands corporation doing business at
Carrowberg, Castlebar Road, Westport,
County Mayo, Ireland, a wholly owned
Affiliate of ALLERGAN, or such other Person
as may be appointed to supply Product to
GSK pursuant to the Supply Agreement.
1.38 "Material
Regulatory Interruption" means any action or omission of any
Regulatory Authority, including, without
limitation, any mandatory recall of
Product, which prevents GSK or its
Affiliates or sublicensees from being able to
use, sell, offer for sale and/or import
Product in the Field of Use in the
Territory, which is not caused by GSK or
its Affiliates or sublicensees being in
breach of their respective obligations to
such Regulatory Authority.
1.39 "Material
Supply Interruption" means a breach by the Manufacturer of
its obligation to Manufacture (as defined
in the Supply Agreement) Product in
accordance with the terms and conditions of
the Supply Agreement.
1.40 "Net Sales"
means, as to GSK or ALLERGAN and with respect to a given
period of time, gross invoiced sales of
Product to Third Parties by either Party
or its Affiliates or sublicensees in such
period, less the following deductions
from such gross amounts which are actually
incurred, allowed, paid, accrued or
specifically allocated: (a) credits or
allowances actually granted for damaged
Product, returns or rejections of Product,
price adjustments, and billing
errors; (b) governmental and other rebates
(or equivalents thereof) granted to
managed health care organizations, pharmacy
benefit managers (or equivalents
thereof), national, state/provincial,
local, and other governments, their
agencies and purchasers, and reimbursers,
or to trade customers; (c) such
Party's normal and customary trade, cash
and quantity discounts, allowances, and
credits actually allowed or paid; (d)
commissions allowed or paid to Third Party
distributors, brokers, or agents other than
sales personnel, sales
representatives, and sales agents employed
by such Party; (e) transportation
costs, including insurance, for outbound
freight related to delivery of Product
to the extent included in the gross amount
invoiced; (f) sales taxes, value
added taxes (VAT), and other taxes directly
linked to the sales of Product to
the extent included in the gross amount
invoiced; (g) the actual amount of any
write offs for bad debt directly relating
to sales of Product in the period; and
(h) any other items actually deducted from
gross invoiced sales amounts as
reported by such Party in its financial
statements in accordance with, in the
case of GSK's Net Sales, the International
Financial Reporting Standards,
applied on a consistent basis, and, in the
case of ALLERGAN's Net Sales, the
U.S. generally accepted accounting
principles applied on a consistent basis.
Sales between or among either Party and its
Affiliates or sublicensees will be
excluded from the computation of such
Party's Net Sales, but the subsequent
final sales to a Third Party by such
Affiliates or sublicensees will be included
in the computation of such Party's Net
Sales.
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
6
<PAGE>
1.41 "Other
Territories" means those countries in the world other than
those in the Territory, where ALLERGAN has
granted, as of or after the Effective
Date, certain licenses to GSK and its
Affiliates to use, sell, offer for sale
and import Product in such countries.
1.42 "Party"
means either GSK or ALLERGAN, and "Parties" means both of
them.
1.43 "Person"
means an individual, corporation, partnership, association,
trust, or any other entity or organization,
including without limitation any
government or political subdivision or any
agency or instrumentality thereof.
1.44 "Product"
means any pharmaceutical composition intended for
administration to humans containing
botulinum toxin type A, regardless of
formulation, dosage, or form, and
manufactured and supplied by the Manufacturer
in accordance with the Supply Agreement.
For clarity, Product includes any
Product Improvements and Enhancements.
1.45 "Product
Improvements and Enhancements" means any and all improvements
and enhancements of Product, including, for
example, research leading to
formulations, assays, and preclinical
models in support of Indications,
invented, developed, or acquired by or on
behalf of ALLERGAN and/or GSK, as
applicable, during the Term.
1.46 "Regulatory
Approval" means an approval, license, registration, and/or
authorization necessary for the use, sale,
offering for sale, or importation of
a prescription pharmaceutical product in
the Territory, including, if relevant,
pricing approvals necessary to obtain
reimbursement from a governmental
authority.
1.47 "Regulatory
Approval Applications" means an application for obtaining
a Regulatory Approval, together with all
documents, data, and information
included with such application.
1.48 "Regulatory
Authority" means any or all national, provincial, or local
regulatory agency, department bureau,
commission, council, or other government
entity involved in the granting of
Regulatory Approval for a pharmaceutical
product in the Territory.
1.49 "SFDA"
means the State Food and Drug Administration in the Territory,
or any successor entity thereto.
1.50 "Standard
Cost" means the Manufacturer's internal standard cost,
comprising direct and indirect fully
allocated costs to Manufacture (as such
term is defined in the Supply Agreement)
botulinum toxin type A at the
Manufacturing Facility (as such term is
defined in the Supply Agreement), for
supply to GSK or any of the Manufacturer's
other customers (be they Third
Parties or Affiliates), including without
limitation the net standard cost of
raw materials, active pharmaceutical
ingredients, components, labor, and
overhead attributed to the production,
processing, quality control, labeling,
and packaging of Product, determined in
accordance with
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
7
<PAGE>
Applicable Law and U.S. generally accepted
accounting principles using
methodology consistently applied by the
Manufacturer.
1.51 "Subsequent
Consultation Period" will have the meaning set forth in
Section 4.2.2.
1.52 "Supply
Agreement" means the agreement for the manufacture and supply
of Product by the Manufacturer to GSK for
the purposes of this Agreement, which
will be executed by GSK and the
Manufacturer contemporaneously with this
Agreement.
1.53 "Tail
Period" means the *** period following (a) the expiration of
this Agreement as provided in Section 9.1
or Section 9.2.3; or (b) the
termination of this Agreement by GSK solely
as provided in Section 9.3.1.
1.54 "Tail
Period Payments" will have the meaning set forth in Section
3.3.
1.55 "Term"
means the Initial Term; however, if GSK exercises its option to
extend the Initial Term as provided in
Section 9.2, the "Term" will mean the
Initial Term and the Extended Term.
1.56 "Territory" means
the People's Republic of China and its territories
and possessions. For the avoidance of
doubt, Territory will not include Taiwan
or Hong Kong.
1.57 "Third
Party" means any Person other than ALLERGAN or GSK or either of
their respective Affiliates.
1.58 "Third
Party Payments" will have the meaning set forth in Section
3.1.2(b).
1.59 "Unit"
means each separate stock keeping unit of a product with a
distinct product number or item code.
2. LICENSES
2.1 Product
Rights.
2.1.1 Subject to the terms and conditions of this Agreement,
ALLERGAN
hereby grants to GSK a co-exclusive (with
ALLERGAN and its Affiliates) license,
including a right to grant sublicense
rights, as further described in Section
2.5, but not to assign except as provided
in Section 11.3, under the ALLERGAN
Patent Rights, other than those that are
identified on Exhibit A-1, and ALLERGAN
Know-How, to use, sell, offer for sale, and
import Product in the Field of Use
in the Territory. For purposes of
clarification, the license granted by ALLERGAN
to GSK pursuant to this Section 2.1.1
includes, without limitation, the right to
develop, as further described in Section
2.1.4, promote, commercialize, market,
and distribute
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
8
<PAGE>
Product in the Field of Use in the
Territory, but will not include any right to
make or have made any Product.
2.1.2 Subject to the terms and conditions of this Agreement,
ALLERGAN
hereby grants to GSK an exclusive option to
obtain a co-exclusive (with ALLERGAN
and its Affiliates) license, including a
right to grant sublicense rights, as
further described in Section 2.5, but not
to assign except as provided in
Section 11.3, under the ALLERGAN Patent
Rights that are set forth on Exhibit A-1
to use, sell, offer for sale, and import
Product for any Future Indications in
the Territory. This option may be exercised
by GSK as to any of the patents and
patent applications at any time after the
*** of the Term, upon providing prior
written notice to ALLERGAN and, subject to
Section 3.6, payment to ALLERGAN of
***. Upon GSK's exercise of the option as
provided in this Section 2.1.2 as to
any patent and/or patent application, such
patent and/or patent application will
be moved from Exhibit A-1 and placed on
Exhibit A.
2.1.3 Subject to the terms and conditions of this Agreement,
GSK
hereby grants to ALLERGAN and its
Affiliates a royalty-free, worldwide,
non-exclusive, perpetual (subject to
Section 9.4.2) license, including a right
to grant sublicense rights, but not to
assign except as provided in Section
11.3, under the GSK Patent Rights, to make,
have made, use, sell, offer for
sale, and import Product in the Field of
Use. For purposes of clarification, the
license granted by GSK to ALLERGAN pursuant
to this Section 2.1.3 will include
the right to develop, promote,
commercialize, market, and distribute Product in
the Field of Use.
2.1.4 ALLERGAN acknowledges and agrees that the licenses granted
to
GSK under Section 2.1.1 includes without
limitation:
(a) The right of GSK to conduct human clinical trials and
submit
clinical data packages to Regulatory
Authorities for Product in the Field of Use
in the Territory;
(b) The right of GSK to manage all communications with
Regulatory
Authorities relating to Product,***; and
provided, further that any
communications with Regulatory Authorities
relating to the drug master file
(DMF) will be managed by ALLERGAN after
good faith consultation with GSK unless
the Parties agree in writing that any such
communications will be managed by
GSK;
(c) Access by GSK to any data developed by ALLERGAN that is
useful for GSK to develop Product in the
Field of Use for use, sale, offering
for sale and import in the Territory;
and
(d) Rights to other ancillary clinical development information
Controlled by ALLERGAN or its Affiliates
that is useful to GSK in using,
selling, offering for sale and importing
Product in the Field of Use in the
Territory.
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
9
<PAGE>
2.2 Trademark
Rights.
2.2.1 ALLERGAN Product Trademarks. ALLERGAN hereby grants to GSK
a
co-exclusive (with ALLERGAN and its
Affiliates) license, including a right to
grant sublicense rights as further
described in Section 2.5, but not to assign
except as provided in Section 11.3, to use
ALLERGAN Product Trademarks solely in
connection with the use, sale, offering for
sale, and import of Product in the
Field of Use in the Territory. All
representations of ALLERGAN Product
Trademarks that GSK intends to use if not
previously approved by ALLERGAN as
provided in this Section 2.2.1, will first
be submitted to ALLERGAN for
approval, such approval not to be
unreasonably withheld. ALLERGAN will have
thirty (30) calendar days to review the
representation of the ALLERGAN Product
Trademarks. If ALLERGAN does not provide
written notice of its approval or
disapproval (together with its reasons for
such disapproval) within such thirty
(30) calendar day period, ALLERGAN will be
deemed to have approved such
representation. For the avoidance of doubt,
ALLERGAN will retain no right to use
ALLERGAN Product Trademarks in the
Territory for any purpose other than
co-promotion pursuant to the terms of this
Agreement without GSK's prior written
consent.
2.2.2 ALLERGAN Corporate Trademarks. ALLERGAN hereby grants to GSK
a
co-exclusive license (with ALLERGAN and its
Affiliates), including a right to
grant sublicense rights as further
described in Section 2.5, but not to assign
except as provided in Section 11.3, to use
ALLERGAN Corporate Trademarks as
trademarks solely in connection with the
use, sale, offering for sale, and
import of Product in the Field of Use in
the Territory. All representations of
ALLERGAN Corporate Trademarks that GSK
intends to use, if not previously
approved by ALLERGAN as provided in this
Section 2.2.2, will first be submitted
to ALLERGAN for approval, such approval not
to be unreasonably withheld.
ALLERGAN will have thirty (30) calendar
days to review the representation of the
ALLERGAN Corporate Trademarks. If ALLERGAN
does not provide written notice of
its approval or disapproval (together with
its reasons for such disapproval)
within such thirty (30) calendar day
period, ALLERGAN will be deemed to have
approved such representation.
2.2.3 In connection with the licenses granted to GSK under the
ALLERGAN Trademarks as provided in Sections
2.2.1 and 2.2.2, ALLERGAN and GSK
agree that either they or their respective
Affiliates will, within twenty (20)
calendar days after the Effective Date,
cooperate to have an authorized
representative execute a Trademark License
Agreement, an English translation
form of which is attached hereto at Exhibit
D, which Trademark License Agreement
will be filed as agreed to by the Parties
with the appropriate governmental body
in the Territory.
2.2.4 Except for any Housemarks of GSK, ALLERGAN will own all
trademarks used in connection with Product
in the Field of Use in the Territory.
Except for any Housemarks of GSK, GSK will
not own any of the trademarks that it
may use in connection with the use, sale,
offering for sale and importing of
Product in the Field of Use in the
Territory and except for its use of the
Housemarks of GSK, GSK will only use
ALLERGAN Trademarks as trademarks in
connection with any and all Product in the
Territory.
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
10
<PAGE>
2.2.5 ALLERGAN and its Affiliates will have no right to use in any
way
whatsoever any representation of a
Housemark of GSK, whether in connection with
Product or otherwise, without obtaining the
prior written consent of GSK.
2.3 Additional
Rights. Notwithstanding anything to the contrary contained
in Sections 2.1 and 2.2, if a Regulatory
Authority requires GSK or its Affiliate
in the Territory to conduct some aspect of
secondary Product manufacture in the
Territory, including, for example,
packaging or testing, in order for GSK or its
Affiliate to be able to use, sell, offer
for sale and/or import Product in the
Field of Use in the Territory as
contemplated herein, or in order for the
Housemarks of GSK or its Affiliate to be
included on the packaging for Product
in the Territory, then GSK and Allergan
will promptly enter into good faith
negotiations for a mutually agreeable
solution to enable GSK to comply with any
such requirement of a Regulatory Authority.
The inability of GSK to use, sell,
offer for sale and/or import Product in the
Field of Use in the Territory as a
result of any such requirement of a
Regulatory Authority will not be deemed to
be a material breach by GSK of this
Agreement.
2.4 Ownership;
Reservation of Rights.
2.4.1 Except as expressly provided in this Agreement, ALLERGAN and
its
Affiliates have and will retain sole and
exclusive Control of the ALLERGAN
Patent Rights, ALLERGAN Know-How, and
ALLERGAN Trademarks. Except as expressly
provided herein, no right, title, or
interest is granted by ALLERGAN to GSK in,
to, or under the ALLERGAN Patent Rights,
ALLERGAN Know-How, and/or ALLERGAN
Trademarks, and, except as expressly
provided herein, GSK will have no right to
assign to any Third Party any right or
interest received under the ALLERGAN
Patent Rights, ALLERGAN Know-How, or
ALLERGAN Trademarks under the terms of this
Agreement.
2.4.2 Except as expressly provided in this Agreement, GSK and
its
Affiliates have and will retain sole and
exclusive Control of the GSK Patent
Rights and GSK Housemarks. Except as
expressly provided in this Agreement, no
right, title, or interest is granted by GSK
to ALLERGAN in, to, or under the GSK
Patent Rights and/or GSK Housemarks, and,
except as expressly provided herein,
ALLERGAN will have no right to assign to
any Third Party any right or interest
received under the GSK Patent Rights or GSK
Housemarks under the terms of this
Agreement.
2.5 Conditions
Precedent to Sublicense. GSK will have the right to grant
sublicenses to Third Parties and Affiliates
to its license and option rights
under the ALLERGAN Patent Rights, ALLERGAN
Know-How, and/or ALLERGAN Trademarks,
provided that (a) GSK has obtained the
prior written consent of ALLERGAN, not to
be unreasonably withheld, as provided below
in this Section 2.5, (b) each
sublicensee has agreed to be bound by all
applicable terms and obligations of
the rights and licenses granted by ALLERGAN
to GSK under this Agreement
(including without limitation GSK's
confidentiality and royalty obligations),
(c) the terms and conditions of each such
sublicense are consistent with, and no
less restrictive than, the terms and
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
11
<PAGE>
conditions of this Agreement, (d) ALLERGAN
is designated as a third party
beneficiary of such sublicense and,
consistent with the terms and conditions of
this Agreement, entitled to enforce the
terms and conditions of such sublicense
with respect to such sublicensee in the
event that GSK elects not to enforce
such terms and conditions of this
Agreement, and (e) GSK provides to ALLERGAN a
copy of those terms and conditions
contained in each such sublicense which
demonstrate compliance with the
requirements in (b), (c), and (d) of this
Section 2.5. Notwithstanding anything to
the contrary, GSK agrees that GSK will
not grant to any sublicensee a right to
grant sublicense rights under ALLERGAN
Patent Rights, ALLERGAN Know-How, or
ALLERGAN Trademarks. ALLERGAN will have ***
within which to consent to any requests
from GSK or its Affiliates to sublicense
any of its and their rights under this
Agreement to the ALLERGAN Patent Rights,
ALLERGAN Know-How, and/or ALLERGAN
Trademarks, as provided above. If ALLERGAN
does not provide its written consent or
refusal to consent (together with its
reasons for such disapproval) to any such
sublicense within such *** period,
ALLERGAN will be deemed to have consented
to such request to sublicense from GSK
or its Affiliate. ALLERGAN's consent
pursuant to (a) of this Section 2.5 will
not be required for grants of sublicenses
by GSK to Affiliates of GSK, but the
requirement in (b), (c), and (d) of this
Section 2.5 will apply to any such
grants of sublicenses by GSK to Affiliates
of GSK. Notwithstanding the
foregoing, the Parties acknowledge and
agree that this Section 2.5 will in no
way apply to GSK's sublicense of any of its
rights under Section 2.1.1 to any
Affiliate or Third Party that is providing
services to GSK relating to this
Agreement (e.g., a Clinical Research
Organization (CRO) or distributor) and that
GSK will have the right at any time during
the Term, without complying with any
of the requirements set forth in (a)
through (e) of this Section 2.5, to
sublicense any of its rights under Section
2.1.1, with the right to grant
further sublicenses in accordance with this
Section 2.4, to any Affiliate or
Third Party that is providing services to
GSK relating to this Agreement;
provided, however, that any such Third
Party or Affiliate (or sub-contractor
thereof) shall use those rights solely for
the purpose of providing such
services to GSK or its Affiliates; and
further provided, however, that GSK will
remain fully and unconditionally obligated
and responsible for the full and
complete performance of all of its
obligations under the terms and conditions of
this Agreement whether or not such
performance is carried out by GSK or its
Affiliates or Third Parties.
2.6 Co-Promotion
Option. At any time during such period of the Term that is
after thirty (30) months after the GSK
Sales Commencement Date, ALLERGAN will
have the non-sublicenseable, non-assignable
right, but not an obligation,
exercisable by giving not less than ninety
(90) calendar days' prior written
notice to GSK, to co-promote Product in the
Field of Use in the Territory,
directly or through its Affiliates, in
accordance with the key terms set out in
Exhibit E (the "Co-Promotion Option"). Upon
exercise of such Co-Promotion
Option, ALLERGAN will actively detail and
promote Product in the Field of Use in
the Territory during the Co-Promotion Term
as directed by the Territory Joint
Commercial Committee and in accordance with
the key terms set out in Exhibit E.
The "Co-Promotion Term" will be the period
beginning on the date of ALLERGAN's
exercise of the Co-Promotion Option as
provided in this Section 2.6 and ending
on the earlier of (a) the expiration of
this Agreement, (b) the termination
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
12
<PAGE>
of this Agreement for any reason, (c) the
termination of ALLERGAN's co-promotion
rights relating to Product as provided in
this Agreement by ALLERGAN for any
reason, or (d) the termination of
ALLERGAN's co-promotion rights relating to
Product as provided in this Agreement by
GSK as a result of a material breach by
ALLERGAN of its co-promotion obligations as
provided in this Agreement
(including, without limitation, Exhibit E),
which breach is not cured by
ALLERGAN within sixty (60) calendar days
after written notice thereof from GSK.
3. PAYMENTS
3.1 Royalty
Payments.
3.1.1 In consideration for the licenses granted by ALLERGAN to
GSK
pursuant to Article 2 and subject to
Sections 3.1.2, 3.2, 3.4.1, 3.4.3(a),
3.4.4(a), 3.5, and 3.6, GSK will pay to
ALLERGAN the following percentages of
GSK's Net Sales as provided below:
***,
***
GSK acknowledges and agrees that GSK will
be solely responsible for paying all
royalties owed to ALLERGAN on account of
Net Sales by any and all of GSK's
Affiliates and sublicensees.
3.1.2 Royalty Adjustments.
(a) During each Calendar Year of the Co-Promotion Term in which
ALLERGAN employs a sales force of at least
*** fully-trained (as directed by the
Territory Joint Commercial Committee),
full-time sales representatives who
actively detail and promote Product in the
Field of Use in the Territory in at
least a secondary detail position, which
will be defined by the TJCC, and in
accordance with all of the terms set forth
in Exhibit E, and subject to Sections
3.4.1, 3.4.3(a), 3.4.4(a), 3.5, and 3.6,
GSK will pay ALLERGAN an additional ***
royalty on GSK's Net Sales in each such
Calendar Year, or portion thereof if
applicable.
(b) The Parties acknowledge that, during the Term, one (1) or
more royalty-bearing licenses may be
necessary from one (1) or more Third
Parties in order for GSK and its Affiliates
to use, sell, offer for sale and
import Product in the Field of Use in the
Territory, without infringing the
intellectual property rights of one or more
patent rights of such Third Parties
in the Territory. In such an event, GSK
will have the right but not the
obligation, and only after prior
consultation with ALLERGAN, to use Commercially
Reasonable Efforts to obtain and maintain
such Third Party licenses solely with
respect to the Territory. If, as a result
of GSK obtaining and maintaining such
Third Party licenses, it is necessary for
GSK to make royalty payments and/or
license fee payments to such Third Party
(collectively, the "Third Party
Payments") in order for GSK to practice the
rights granted hereunder to the
ALLERGAN Patent
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
13
<PAGE>
Rights and ALLERGAN Know-How without
infringing such Third Party's rights, GSK
will be entitled to offset *** of all such
Third Party Payments against any
royalties owed to ALLERGAN under this
Agreement during the Term.
(c) If, in any Calendar Year, the Standard Cost exceeds the
Allowable Standard Cost, ALLERGAN will
credit against the royalty payable under
Section 3.1.1 of this Agreement in such
Calendar Year, an amount equal to the
difference between (i) the Standard Cost
plus *** and (ii) the Allowable
Standard Cost plus ***, multiplied by the
number of Units of Product purchased
by GSK during such Calendar Year; provided
such difference was actually incurred
by GSK.
3.2 GSK Royalty
Term. Subject to Section 9.5.1(a), the obligation of GSK to
pay royalties owed to ALLERGAN under
Section 3.1.1 will commence on the GSK
Sales Commencement Date and continue until
the expiration, pursuant to Section
9.1 or Section 9.2.3, or earlier
termination, pursuant to Section 9.3, of the
Term. The obligation of GSK to pay the
additional royalty owed to ALLERGAN under
Section 3.1.2(a) will, if all conditions
are satisfied by ALLERGAN as provided
in Section 3.1.2(a), commence at the
beginning of the Co-Promotion Term and
continue until the expiration or earlier
termination thereof as provided in
Section 2.6.
3.3 Tail Period
Payments. Commencing on first (1st) day of the Tail Period
and continuing until the expiration
thereof, subject to Sections 3.4.2,
3.4.3(b), 3.4.4(b), 3.5, and 3.6, ALLERGAN
will pay the following payments (the
"Tail Period Payments") to GSK: ***. For
purposes of this Section 3.3, "year"
will mean each 365-calendar day period
beginning on the first (1st) day of the
Tail Period or the relevant anniversary
thereof.
3.4 Payment
Terms.
3.4.1 Quarterly Payments of Royalties. Within sixty (60) days
after
the last day of each Calendar Quarter, GSK
will pay to ALLERGAN all royalties
due and payable on GSK's Net Sales in the
immediately preceding Calendar
Quarter, or portion thereof if applicable,
in accordance with Section 3.1.
3.4.2 Quarterly Payments of the Tail Period Payment. Within sixty
(60)
calendar days after the last day of each
Calendar Quarter during the Tail
Period, ALLERGAN will pay to GSK all
payments due and payable on ALLERGAN Net
Sales as provided under Section 3.3 in the
immediately preceding Calendar
Quarter, or portion thereof if
applicable.
3.4.3 Annual Reconciliations.
(a) Subject to Section 9.5.1(a), within sixty (60) calendar
days
after the last day of each Calendar Year
during the Term, or portion thereof if
applicable, GSK will calculate the royalty
payments due to ALLERGAN pursuant to
Sections 3.1.1 and, if applicable,
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
14
<PAGE>
3.1.2(a) for such Calendar Year. In the
event the total payment due pursuant to
Section 3.1.1 and, if applicable, 3.1.2(a)
in any Calendar Year is greater than
the total for each such amount that GSK has
paid under Section 3.4.1 in such
Calendar Year, the difference will be paid
by GSK to ALLERGAN within sixty (60)
days after the last day of such Calendar
Year, or portion thereof if applicable.
In the event the total payment due pursuant
to Section 3.1.1 and, if applicable,
3.1.2(a) in any Calendar Year is less than
the total for each such amount that
GSK has paid under Section 3.4.1 in such
Calendar Year, the difference will be
paid by ALLERGAN to GSK within sixty (60)
days after the last day of such
Calendar Year, or portion thereof if
applicable.
(b) Within sixty (60) calendar days after the last day of each
Calendar Year during the Tail Period, or
portion thereof if applicable, ALLERGAN
will calculate the Tail Period Payments due
to GSK pursuant to Section 3.3 for
such Calendar Year. In the event the total
payment due pursuant to Section 3.3
in any Calendar Year is greater than the
total amount that ALLERGAN has paid
under Section 3.4.2 in such Calendar Year,
the difference will be paid by
ALLERGAN to GSK within sixty (60) days
after the last day of such Calendar Year,
or portion thereof if applicable. In the
event the total payment due pursuant to
Section 3.3 in any Calendar Year is less
than the total amount that ALLERGAN has
paid under Section 3.4.2 in such Calendar
Year, the difference will be paid by
GSK to ALLERGAN within sixty (60) days
after the last day of such Calendar Year,
or portion thereof if applicable.
3.4.4 All payments made under this Agreement will be made in
U.S.
dollars. All payments will be made by check
or wire transfer in immediately
available funds to the following bank
account or to such other bank account
designated in writing by ALLERGAN:
***
For sales of Product in Chinese yuan RMB or
in any currency other than U.S.
dollars:
(a) With respect to payments made by GSK to ALLERGAN under this
Agreement, GSK's Net Sales, as defined in
Section 1.40, will be calculated in
accordance with the International Financial
Reporting Standards consistently
applied. GSK Net Sales will be converted
into U.S. dollars using the average
exchange rates as calculated and utilized
by GSK's group reporting system and
published accounts. The current method uses
spot exchange rates sourced from
Reuters/Bloomberg and if changed, GSK will
notify ALLERGAN of the revised method
in advance of it being applied.
(b) With respect to payments made by ALLERGAN to GSK pursuant
to
Section 3.3, ALLERGAN's Net Sales, as
defined in Section 1.40, will be
calculated in accordance with U.S.
generally accepted accounting principles
consistently applied. Net Sales will be
converted into U.S. dollars using the
average exchange rates as calculated and
utilized by ALLERGAN's reporting
systems and published accounts. The current
method uses the monthly average of
daily exchange rates obtained from
Bloomberg to convert sales in local currency
into
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
15
<PAGE>
U.S. dollars. If this methodology is
changed ALLERGAN will notify GSK of the
revised methodology in advance of it being
applied.
3.5 Late Payment
Interest. Any payment due and payable under the terms and
conditions of this Agreement, including
without limitation any royalty payment
and any Tail Period Payments, made by GSK
or ALLERGAN after the date such
payment is due and payable, will bear
interest as of the day after the date such
payment was due and payable, and will
continue to accrue such interest until
such payment is made, at rate equal to ***
per month. The payment of such
interest will not limit either Party from
exercising any other rights it may
have as a consequence of the lateness of
any payment.
3.6 Taxes. To
the extent a statutory tax withholding obligation is imposed
by a governmental authority upon any
payment made by a Party (the "Payor") to
the other Party (the "Payee") under this
Agreement, including, for example,
royalty payments, due and payable by the
Payor to the Payee under the terms and
conditions of this Agreement, the Payor
will be entitled to withhold from such
payment the amount, if any, of any tax
assessed against the Payee and actually
withheld, provided that such tax is only
for the account of the Payee and
evidence of the payment of such tax is
promptly provided to the Payee. The Payor
will pay the amount of such tax to the
proper taxing authority and will be
entitled to deduct the amount of such tax
from the payment to be made by the
Payor to the Payee. The Payor will advise
the Payee of any tax payment made for
the benefit of the Payee pursuant to this
Section 3.6 and provide the Payee with
copies of tax receipts for all taxes paid
and deducted from the payment due and
payable to the Payee, together with copies
of all pertinent communications from
or with governmental authorities with
respect thereto. At a Party's reasonable
request and subject to the requesting Party
reimbursing any costs and expenses,
each Party will reasonably assist the
requesting Party in any effort by a Party
in claiming any exemption from such
deductions or withholdings under any double
taxation or similar agreement or treaty
from time to time in force, and in
minimizing the amount required to be so
withheld or deducted. ALLERGAN warrants
that ALLERGAN is resident for tax purposes
in United States and that ALLERGAN is
entitled to relief from United Kingdom
income tax under the terms of the double
tax agreement between the United Kingdom
and the United States. ALLERGAN will
notify GSK immediately in writing in the
event that ALLERGAN ceases to be
entitled to such relief. Pending receipt of
formal certification from the United
Kingdom Inland Revenue, GSK may pay royalty
income and any other payments under
this Agreement to ALLERGAN by deducting tax
at a rate specified in the double
tax treaty between the United Kingdom and
the United States. ALLERGAN agrees to
indemnify and hold harmless GSK against any
loss, damage, expense, or liability
arising in any way from a breach by
ALLERGAN of the warranties in this Section
3.6 or any future claim by a United Kingdom
tax authority or other similar body
alleging that GSK was not entitled to
deduct such withholding tax on such
payments at source at the treaty rate.
3.7 Records and
Reports. Any and all payments made by either Party to the
other pursuant to this Agreement will be
accompanied by a written statement
setting forth in
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
16
<PAGE>
reasonable detail the calculation of such
Party's Net Sales, and, if applicable,
the calculation of the average exchange
rate utilized by such Party to convert a
local currency payment to U.S. dollars.
Each Party will maintain, and will
require its Affiliates, and sublicensees,
to maintain complete and accurate
records sufficient to enable accurate
calculation of any payments due by a Party
to the other Party hereunder, including,
without limitation payment of any
royalties and the Tail Period Payment. Such
records and books of account will be
preserved by each Party and its respective
Affiliates and sublicensees, as
applicable, for a period of three (3) years
after the end of the period covered
by such records and books of account, which
obligation will survive the
expiration or earlier termination of this
Agreement.
3.8 Audit
Rights.
3.8.1 GSK will permit an ALLERGAN auditor, or an independent
public
accountant designated by ALLERGAN and
reasonably acceptable to GSK, to have
access, no more than once in each Calendar
Year, during regular business hours
and upon at least sixty (60) calendar days'
prior written notice, to GSK's
records and books, and GSK's Affiliates'
and sublicensees' records and books, to
the extent necessary to determine the
accuracy of GSK's Net Sales reported, and
payments made, by GSK to ALLERGAN pursuant
to this Article 3 within the two (2)
year period immediately preceding such an
audit. If such examination results in
a determination that GSK's Net Sales or
payments owed to ALLERGAN by GSK have
been understated, unpaid amounts due will
be paid by GSK to ALLERGAN promptly.
If such examination results in a
determination that GSK's Net Sales or payments
owed to ALLERGAN by GSK have been
overstated, overpaid amounts due will be
re-paid by ALLERGAN to GSK promptly. The
fees and expenses of such auditor or
accountant will be paid by ALLERGAN unless
GSK's Net Sales have been
understated, or that payments owed to
ALLERGAN by GSK have been underpaid, by
more than *** for the period examined, in
which case GSK will pay all reasonable
costs and expenses of the auditor or
accountant incurred by ALLERGAN in the
course of making such determination.
3.8.2 ALLERGAN will permit a GSK auditor, or an independent
public
accountant designated by GSK and reasonably
acceptable to ALLERGAN, to have
access, no more than once in each Calendar
Year, during regular business hours
and upon at least sixty (60) calendar days'
prior written notice, to ALLERGAN's
records and books, and ALLERGAN's
Affiliates' and sublicensees' records and
books, to the extent necessary to determine
the accuracy of ALLERGAN's Net Sales
reported, and payments made, by ALLERGAN to
GSK pursuant to this Article 3
within the two (2) year period immediately
preceding such an audit. If such
examination results in a determination that
ALLERGAN's Net Sales or payments
owed to GSK by ALLERGAN have been
understated, unpaid amounts due will be paid
by ALLERGAN to GSK promptly. If such
examination results in a determination that
ALLERGAN's Net Sales or payments owed to
GSK by ALLERGAN have been overstated,
overpaid amounts due will be re-paid by GSK
to ALLERGAN promptly. The fees and
expenses of such auditor or accountant will
be paid by GSK unless ALLERGAN's Net
Sales have been understated, or that
payments
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
17
<PAGE>
owed to GSK by ALLERGAN have been
underpaid, by more than *** for the period
examined, in which case ALLERGAN will pay
all reasonable costs and expenses of
the auditor or accountant incurred by GSK
in the course of making such
determination.
4. HAND-OVER ACTIVITIES
4.1 Generally.
The Parties agree that within thirty (30) calendar days
after the Effective Date, GSK (or its
Affiliate in the Territory) and ALLERGAN
(or its Affiliate in the Territory) will at
each Party's sole cost and expense,
participate in a face-to-face full day
meeting to discuss all aspects related to
the continued development, registration and
commercialization of Product in the
Field of Use in the Territory, including
but not limited to: the clinical
development program for Product for the
Cosmetic Indication in the Territory,
the pricing for Product, launch plans in
the Territory and the hand-over
activities described in this Article 4.
ALLERGAN will use Commercially
Reasonable Efforts to ensure that
ALLERGAN's distributor of Product in the
Territory prior to the Effective Date will
participate in any such meetings as
provided in this Section 4.1, at no cost or
expense to GSK. In addition, the
Parties will develop plans to address the
management of the hand-over activities
described in this Article 4.
4.1.1 Regulatory Transfer.
(a) As soon as possible but in no event later than forty-five
(45) calendar days after the Effective
Date, ALLERGAN, at its own cost and
expense, will use Commercially Reasonable
Efforts to take all steps permitted
under Applicable Law, and cause ALLERGAN's
Affiliates and/or distributors in the
Territory to take all steps permitted under
Applicable Law, to do the following:
(i) prepare for the transfer of any or all
Regulatory Approvals, Regulatory
Approval Applications (but excluding the
Import Drug License (IDL)) and related
information to GSK or GSK's Affiliates or
distributors; (ii) deliver, or cause
its Affiliates and/or distributors to
deliver, to GSK or GSK's Affiliates or
distributors copies of each Regulatory
Approval and Regulatory Approval
Application held by ALLERGAN, its
Affiliates and/or distributors/agents relating
specifically to Product in the Field of Use
in the Territory (including, without
limitation, the Import Drug License (IDL)),
and copies of all pricing
information relating to Product in the
Territory; and (iii) certify in writing
that the copies of such Regulatory
Approvals, Regulatory Approval Applications
and Product pricing information are true
and complete copies thereof. As soon as
possible but in no event later than thirty
(30) calendar days after the
Effective Date, ALLERGAN, at its own cost
and expense, will use Commercially
Reasonable Efforts to take all steps
permitted under Applicable Law, and cause
ALLERGAN's Affiliates and/or distributors
in the Territory to take all steps
permitted under Applicable Law, to deliver,
or cause its Affiliates and/or
distributors to deliver, to GSK or GSK's
Affiliates or distributors copies of
the Product pricing dossier.
(b) GSK or its Affiliate together with ALLERGAN will prepare a
joint legal statement and letter for
submission to the SFDA regarding GSK's
rights to the Product in
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange Commission
pursuant to Rule 24b-2 of the Securities Act of 1934,
as amended.
18
<PAGE>
the Territory as provided herein and
confirming GSK's authority to manage all
regulatory matters relating to Product in
the Territory. Such joint legal
statement and letter will be reviewed by
ALLERGAN within fourteen (14) calendar
days after receipt of a copy thereof from
GSK or its Affiliate. GSK will in good
faith consider, but will not be obligated
to include, any comments from ALLERGAN
in such joint legal statement and letter.
If GSK does not receive any comment
from ALLERGAN on the joint legal statement
and letter within such seven (7)
calendar day period, ALLERGAN will be
deemed to have no comments on the copy
received from GSK and ALLERGAN will
countersign or will cause its Affiliate in
the Territory to countersign such joint
legal statement and letter within five
(5) calendar days, which joint legal
statement and letter GSK or its Affiliate
will be free to also countersign and submit
to the SFDA.
(c) ALLERGAN will use Commercially Reasonable Efforts during
the
Term to do all other things as permitted
pursuant to any Applicable Law in the
Territory to ensure that the Regulatory
Approvals and Regulatory Approval
Applications (but excluding the Import Drug
License (IDL)) are duly transferred
into the name of GSK or its nominee in a
timely manner, allowing GSK or its
nominee to have the authority to manage all
regulatory matters relating to the
Product, including, without limitation,
within the first ninety (90) days after
the Effective Date, participating, or
causing its Affiliates or distributors of
Product in the Territory to participate, in
at least one (1) face-to-face
meeting in the Territory with the SFDA and
GSK or its Affiliate or nominee
regarding any of the activities set forth
in this Section 4.1.
4.1.2 Transfer of Clinical Data: As soon as possible but in no
event
later than thirty (30) calendar days after
the Effective Date, subject to
authorization by a Regulatory Authority, if
applicable, ALLERGAN will at its own
cost and expense (a) deliver, or cause its
Affiliates or distributors/agents to
deliver, to GSK or GSK's Affiliate all
clinical data relating to Product in the
Field of Use in the Territory.
4.1.3 Disclosure of ALLERGAN Know-How and ALLERGAN
Manufacturing
Know-How; Transfer of Materials.
(a) Within thirty-seven (37) calendar days after the Effective
Date, ALLERGAN or its Affiliate, will at
its or their sole cost and expense
disclose the ALLERGAN Know-How to GSK and
will transfer to GSK all documents
that recite, are directed to, or concern
ALLERGAN Know-How. Notwithstanding
anything to the contrary contained in this
Article 4, ALLERGAN will thereafter
during the Term promptly disclose to GSK
any ALLERGAN Know-How that comes into
ALLERGAN's possession and will provide to
GSK all documents that are directed to
such ALLERGAN Know-How.
(b) Within thirty (30) calendar days after the Effective Date,
ALLERGAN or its Affiliate will, at its or
their sole cost and expense, ***
4.1.4 Except as provided herein or as otherwise required or
appropriate under Applicable Law, the
documents and materials provided by
ALLERGAN to GSK under this
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
19
<PAGE>
Section 4.1 may be copies of original
documents and materials, provided that
such copies will be of the highest quality
possible and, if such quality is
inadequate for GSK's needs, ALLERGAN will
permit GSK to have access to the
original documents and materials. In the
event that ALLERGAN elects to provide
original documents and materials, GSK will
permit ALLERGAN to have access to
such original documents and materials for
use by ALLERGAN for purposes
consistent with the terms and conditions of
this Agreement. Such original
documents and materials will be provided to
GSK in accordance with the
following:
(a) GSK will maintain original documents and materials under
safe
and secure conditions typically used by GSK
to maintain its own similar
documents and materials. Specifically, GSK
will maintain such original documents
and materials in files located in a GSK
facility or at another secure facility
used to store GSK's own original documents.
If GSK chooses to transfer such
original documents and materials to any
other secure facility, GSK will notify
ALLERGAN in writing sixty (60) calendar
days in advance of such transfer.
(b) If a Regulatory Authority requires ALLERGAN, or an
Affiliate
of ALLERGAN, to provide the Regulatory
Authority with access to any of the
original documents or materials transferred
by ALLERGAN or its Affiliate to GSK
as provided in this Article 4, GSK will
permit ALLERGAN, its employees, agents,
or independent contractors, and/or
officials or representatives of the
Regulatory Authority, as appropriate,
access to the original documents and
materials. Such access will be provided at
the site where the original documents
and materials are maintained by GSK, during
normal business hours (Monday
through Friday between 9 a.m. and 5 p.m.)
after receipt of reasonable written
notice (being at least five (5) calendar
days where practicable but in any case
not less than twenty-four (24) hours
advance written notice from ALLERGAN
(seventy-two (72) hours if such notice
arrives on a Friday, Saturday, or
Sunday), or at such other facility and
during such hours as agreed upon by GSK,
ALLERGAN, and/or the Regulatory Authority.
The term "access" will mean, for the
purposes of this Section 4.1.4(b), that
ALLERGAN and/or the Regulatory
Authority, as appropriate, will have
possession of the original documents and
materials at the GSK facility where the
original documents and materials are
maintained, or at such other facility as
agreed upon by ALLERGAN and GSK and/or
the Regulatory Authority, for sufficient
time to allow ALLERGAN to review the
original documents in detail and/or to
allow the Regulatory Authority to
complete its review. Prior to the grant of
access, ALLERGAN will provide GSK
with a copy of the relevant written
Regulatory Authority communication or a copy
of ALLERGAN's written contact report of an
oral request by the Regulatory
Authority for such access, if such letter
or contact report exists.
(c) Upon expiration or termination of this Agreement, GSK will
return to ALLERGAN all documents and
materials provided by ALLERGAN to GSK as
provided in Section 4.1 in accordance with
Section 9.4.3.
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
20
<PAGE>
4.2 Further
Assistance by ALLERGAN.
4.2.1 During the *** period immediately following the Effective
Date
(the "Initial Consultation Period"),
ALLERGAN, on GSK's or GSK's Affiliate's
request and at ALLERGAN's sole expense,
will use Commercially Reasonable Efforts
to provide consulting services regarding
specific issues in connection with
pre-clinical and clinical development and
commercialization of Product in the
Field of Use to enable GSK to fulfill its
obligations under this Agreement (the
"Consultations"), which Consultations will
be provided by ALLERGAN at mutually
agreeable times and places within the scope
of the limited resources and
knowledge of ALLERGAN's agents and
employees. Consultations during the Initial
Consultation Period will include, without
limitation:
(a) Assisting GSK's Affiliate in the Territory with completing
all activities set forth in Section
4.1;
(b) Re-working the pricing dossier for Product in the
Territory;
(c) Assisting GSK's Affiliate in the Territory with developing
the protocol for clinical trials relating
to the use of Product for the
treatment, minimization and/or eradication
of glabellar lines; and
(d) Participating in TJCC and TJDC meetings as set forth in
Article 5, but which meetings during the
Initial Consultation Period will be as
frequent as reasonably determined by the
Parties.
For clarity, Consultations during the
Initial Consultation Period will not
include any efforts or activities conducted
by employees and/or agents of
ALLERGAN in connection with the activities
and obligations in connection with
global Product strategic marketing
support.
4.2.2 During the *** period immediately after the expiration of
the
Initial Consultation Period (the
"Subsequent Consultation Period"),
Consultations will occur at mutually
agreeable times and places, and will not
exceed *** of total employee time per
month, excluding travel time.
Consultations during the Subsequent
Consultation Period will include, without
limitation:
(a) All of the activities set forth in Section 4.2.1(b) and (c)
to the extent not completed during the
Initial Consultation Period; and
(b) Efforts by ALLERGAN employees in connection with ALLERGAN's
participation in the TJDC and TJCC as
provided in Article 5.
For clarity, Consultations during the
Subsequent Consultation Period will not
include any efforts or activities conducted
by employees and/or agents of
ALLERGAN in connection with the activities
and obligations in connection with
global Product strategic marketing support.
Further, upon expiration of the
Subsequent Consultation Period, ALLERGAN
will be responsible for all
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
21
<PAGE>
costs and expenses incurred in
participating in TJCC and TJDC meetings as
provided in Sections 5.2.4 and 5.4.4.
4.2.3 Subject to Section 4.2.2, in the event that GSK or an
Affiliate
of GSK requests Consultations during the
Subsequent Consultation Period that are
in excess of the total employee time per
month set forth in Section 4.2.2,
ALLERGAN will use Commercially Reasonable
Efforts, but will have no obligation,
to provide such Consultations. In the event
that ALLERGAN and GSK agree that
Consultations in excess of the total
employee time per month set forth in
Section 4.2.2 will be provided, GSK will
pay ALLERGAN a full time equivalent
(FTE) rate of *** per person per day on
which Consultations are actually
provided, and will reimburse ALLERGAN for
any documented reasonable and properly
incurred out-of-pocket costs or expenses
that ALLERGAN incurs in connection with
such Consultations, including without
limitation all reasonable and properly
incurred travel and hotel accommodation
costs and expenses (which will be
pre-agreed with GSK).
4.2.4 Notwithstanding anything to the contrary, there will be no
time
limit on communications to ALLERGAN from
GSK pertaining to the acquisition of
development or regulatory documents or data
identified as missing after the
transfer of Regulatory Approvals and
ALLERGAN Know-How was, in the opinion of
ALLERGAN, complete, nor will there be a
charge for ALLERGAN supplying such
documents or data; provided that such
documents or data are in ALLERGAN's
possession or are in the possession of an
ALLERGAN contractor or investigator
and are retrievable upon exercise by
ALLERGAN of Commercially Reasonable
Efforts.
5. PRODUCT DEVELOPMENT AND
COMMERCIALIZATION
5.1 In
General.
5.1.1 GSK, at GSK's sole expense (subject to ALLERGAN's
obligations
under Article 4), will use Commercially
Reasonable Efforts to commercialize
Product in the Territory, subject to
Section 5.1.2 and as provided in Section
5.5. Additionally, subject to Section 5.1.2
and as provided in Section 5.3, GSK
will develop Product for *** Cosmetic
Indication and *** Future Indication.
Notwithstanding the above, ALLERGAN
covenants and agrees that it will cause the
Manufacturer to supply Product for such
development and commercialization
activities (under the terms of the Supply
Agreement) and, at GSK's request and
at GSK's expense, subject to ALLERGAN's
obligations as set forth in Article 4,
cooperate with GSK and to provide
assistance as reasonably necessary in
connection with any such development and
commercialization activities in the
Field of Use in the Territory.
5.1.2 Notwithstanding the foregoing, during the period after
the
Effective Date and continuing until the
earlier of *** after the Effective Date
or the date on which GSK obtains pricing
for Product from the Regulatory
Authority that is acceptable to GSK,
neither GSK nor any of its Affiliates will
have any obligation to commence the
development, use, sale, offer for
*** Certain confidential information
contained in this document, marked with 3
asterisks, has
been omitted and filed separately with the Securities and
Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of
1934,
as amended.
22
<PAGE>
sale, import, distribution and/or
commercialization of any Product in the Field
of Use in the Territory as provided in this
Article 5 unless and until GSK or
its Affiliate obtains pricing for Product
from the Regulatory Authority that is
acceptable to GSK or its Affiliate;
provided, however, that prior to GSK or its
Affiliate obtaining acceptable pricing for
Product in the Territory, GSK or its
Affiliate will take steps to identify a
principal investigator (PI) for the
clinical study that will be conducted for
the Cosmetic Indication, draft and
finalize the protocol for such clinical
study with PI input and SFDA feedback,
if appropriate, and draft an
investigator/site list. Neither GSK nor its
Affiliate, however, will be obligated to
enter into any contracts or agreements
relating to such clinical study, including,
without limitation, any
investigatory/study sites, until GSK or its
Affiliate obtains pricing for
Product from the Regulatory Authority that
is acceptable to GSK or its
Affiliate. After the date on which GSK
obtains pricing for Product from the
Regulatory Authority that is acceptable to
GSK or the date of the expiration of
such *** period referenced above, whichever
occurs first, GSK or any of its
Affiliates will have the obligation to
commence the development, use, sale,
offer for sale, import, distribution and/or
commercialization of any Product in
the Field of Use in the Territory as
provided in this Article 5.
5.1.3 For the purpose of obtaining pricing approval for the
Product,
GSK will use Commercially Reasonable
Efforts to position Product with Regulatory
Authorities as a premium positioned product
in the Territory during the Term,
including, without limitation, reformatting
and resubmitting to the Regulatory
Authority the pricing dossier for Product
and trying to obtain initial feedback
from the Regulatory Authority on the
likelihood of obtaining approval for the
price requested for Product in the
Territory.
5.2 Territory
Joint Development Committee.
5.2.1 Within forty-five (45) calendar days after the Effective
Date,
the Parties will form a Territory Joint
Development Committee ("TJDC") to manage
and review the development process and
Regulatory Approval Application
submissions for Product in Territory. The
responsibilities of the TJDC will
include, without limitation:
(a) Reviewing the ongoing development activities for Product in
the Field of Use in accordance with the
clinical development plan