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LICENSE AGREEMENT

License Agreement

LICENSE AGREEMENT | Document Parties: ALLERGAN INC | ALLERGAN SALES, LLC | GLAXO GROUP LIMITED You are currently viewing:
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ALLERGAN INC | ALLERGAN SALES, LLC | GLAXO GROUP LIMITED

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Title: LICENSE AGREEMENT
Governing Law: New York     Date: 11/7/2005
Industry: Biotechnology and Drugs     Sector: Healthcare

LICENSE AGREEMENT, Parties: allergan inc , allergan sales  llc , glaxo group limited
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                                                                   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

 

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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

 

<PAGE>

 

     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


 
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