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CO-PROMOTION AGREEMENT

Promotion Agreement

CO-PROMOTION AGREEMENT | Document Parties: ALLERGAN INC |  SMITHKLINE BEECHAM CORPORATION  | ALLERGAN SALES LLC You are currently viewing:
This Promotion Agreement involves

ALLERGAN INC | SMITHKLINE BEECHAM CORPORATION | ALLERGAN SALES LLC

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Title: CO-PROMOTION AGREEMENT
Governing Law: New York     Date: 11/7/2005
Industry: Biotechnology and Drugs    

CO-PROMOTION AGREEMENT, Parties: allergan inc ,  smithkline beecham corporation  , allergan sales llc
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                                                                   Exhibit 10.53

 

                             CO-PROMOTION AGREEMENT

 

                                 BY AND BETWEEN

 

              SMITHKLINE BEECHAM CORPORATION D/B/A GLAXOSMITHKLINE

 

                                       AND

 

                                 ALLERGAN, INC.

 

                                       AND

 

                               ALLERGAN SALES LLC

 

                               SEPTEMBER 30, 2005

 

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                              CO-PROMOTION AGREEMENT

 

     This Co-Promotion Agreement (the "Co-Promotion Agreement" or this

"Agreement"), dated September 30, 2005 (the "Effective Date"), is made by and

between SmithKline Beecham Corporation d/b/a GlaxoSmithKline, a corporation

organized and existing under the laws of the Commonwealth of Pennsylvania and

having a place of business at One Franklin Plaza, Philadelphia, PA 19101

("GSK"), Allergan, Inc., a corporation organized and existing under the laws of

the State of Delaware and having a principal place of business at 2525 Dupont

Drive, Irvine, Ca 92612-1599 ("Allergan, Inc.") and Allergan Sales LLC, a

limited liability company organized and existing under the laws of the state of

Delaware and having a principal place of business at 2525 Dupont Drive, Irvine,

Ca 92612-1599 ("Allergan LLC"), ("Allergan LLC" and, together with Allergan,

Inc., "Allergan").

 

                                    RECITALS

 

     WHEREAS, GSK owns or controls all rights to the Product (as defined below)

in the Territory (as defined below);

 

     WHEREAS, GSK and Allergan each have an internal sales and marketing

organization to promote certain products to physicians and other health care

professionals; and

 

     WHEREAS, GSK desires to engage Allergan to co-promote and detail the

Product to selected physicians and other health care professionals within the

Territory upon the terms and conditions contained herein.

 

     NOW, THEREFORE, in consideration of the mutual covenants contained herein

and other good and valuable consideration, the receipt and sufficiency of which

is hereby acknowledged, the Parties hereto agree as follows:

 

                                    ARTICLE 1

 

                                   DEFINITIONS

 

     As used in this Agreement, the following capitalized terms have the

following meanings:

 

     1.1 "ADDITIONAL NEURO PRODUCT" means the Imitrex(R) (sumatriptan succinate)

STATdose System(R), which has been approved by the FDA for the treatment of

migraine and cluster headaches, and which is sold by GSK or its Affiliates in

the Territory, or such other branded, non-generic prescription pharmaceutical

products as determined by GSK in its sole discretion which are sold by GSK or

its Affiliates under the Imitrex(R) trademark 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 Exchange Act

     of 1934, as amended.

 

 

                                       1

 

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     1.2 "ADDITIONAL NEURO PRODUCT BASELINE" means the ***, which is calculated

using the methodology set forth in EXHIBIT A of this Agreement ***.

 

     1.3 "ADDITIONAL NEURO PRODUCT FAILURE" will have the meaning set forth in

SECTION 7.1.3(B) (ADDITIONAL NEURO PRODUCT FAILURE).

 

     1.4 "ADDITIONAL NEURO PRODUCT NET SALES" means Net Sales of Additional

Neuro Product achieved from prescriptions from the Neurologist Segment and those

primary care physicians who comprise the Additional Neuro Product Target

Audience and calculated using the Allocation Factors listed in EXHIBIT A to this

Agreement.

 

     1.5 "ADDITIONAL NEURO PRODUCT TARGET AUDIENCE" means as to the Additional

Neuro Product (i) certain of those physicians in the Neurologist Segment and

(ii) primary care physicians, both of whom meet the profile of target physicians

established by the JCC and set forth in the Marketing Plan, which Target

Audience may be modified *** by the JCC. As of sixty (60) days after the

Effective Date, the Parties will agree on fewer than *** primary care physicians

to comprise the Target Audience, in addition to certain of those physicians in

the Neurologist Segment.

 

     1.6 "AFFILIATE" of a Person means any individual, sole proprietorship,

firm, partnership, corporation, trust, joint venture or other entity, whether de

jure or de facto, which, directly or indirectly, controls, is controlled by or

is under common control with such Person. As used in this definition, "control"

means the possession, directly or indirectly, of the power to direct or cause

the direction of the policies and management of a person or entity, whether by

the ownership of stock, by contract or otherwise.

 

     1.7 "AGREEMENT" will have the meaning set forth in the Preamble.

 

     1.8 "ALLERGAN" will have the meaning set forth in the Preamble.

 

     1.9 "ALLERGAN MINIMUM DETAILS COMMITMENT" has the meaning set forth in

SECTION 3.2.5(A) (ALLERGAN PRODUCT MINIMUM DETAIL COMMITMENTS).

 

     1.10 "ALLERGAN PSR" means a member of Allergan's sales force.

 

     1.11 "ALLIANCE MANAGER" as to either of GSK or Allergan, as the case may

be, means a full time employee of either GSK or Allergan, as the case may be,

having primary oversight responsibility for the implementation of that Party's

obligations under this Agreement.

 

     1.12 "ANTI-KICKBACK STATUTE" means the Medicare and Medicaid Anti-Kickback

Statute set forth at 42 U.S.C. Section 1320a-7b(b).

 

     1.13 "APPLICABLE COMMERCIAL PRACTICES POLICIES" means the portions as

identified by GSK of the Commercial Practices Policies of GSK applicable to the

marketing, sale, promotion and detailing of pharmaceutical products, as amended

or supplemented from time to time, a copy

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       2

 

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of which will be delivered to Allergan by GSK prior to or simultaneously with

the execution of this Agreement.

 

     1.14 "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, including, without limitation, the Anti-Kickback Statute, the FD&C

Act, and HIPAA.

 

     1.15 "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 Calendar Quarter of the Term will extend from the Effective Date to the

end of the first complete Calendar Quarter thereafter.

 

     1.16 "COMMERCIALLY REASONABLE EFFORTS" means efforts and resources normally

used by a Party in the Territory relating to a prescription pharmaceutical

product owned by it or to which it has rights, which is of similar market

potential and at a similar stage in its development or product life, taking into

account issues of 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.

 

     1.17 "COMMITMENT YEAR" means, for the first Commitment Year, the period

beginning on the Effective Date and ending on December 31, 2006, and for each

Commitment 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 Commitment Year may be for a term of less than twelve

(12) months until the end of the Commitment Term.

 

     1.18 "COMMITMENT TERM" will have the meaning set forth in SECTION 3.2.5(C)

(COMMITMENT TERM).

 

     1.19 "CONFIDENTIAL INFORMATION" will have the meaning set forth in SECTION

9.2 ("CONFIDENTIAL INFORMATION").

 

     1.20 "CO-PROMOTION AGREEMENT" will have the meaning set forth in the

Preamble.

 

     1.21 "CO-PROMOTION COMMENCEMENT DATE" means the date on which Allergan

commences the Promotion and Detailing of Product in the Territory in accordance

with the Marketing Plan and the terms and conditions of this Agreement, which

Co-Promotion Commencement Date will not be more than *** after the Effective

Date.

 

     1.22 "DETAIL" means a face-to-face meeting, in an individual or group

practice setting, between one (1) or more physicians in the Primary Product

Target Audience or Additional Neuro Product Target Audience, as the case may be,

and one GSK PSR or Allergan PSR, as the case

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                        3

 

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may be, during which a complete Product presentation is communicated (a)

describing in a fair and balanced manner, the FDA-approved indicated uses, and

other relevant characteristics, of the Product, and (b) using the Product

Promotional Materials in an effort to increase the prescribing preferences of

the Product for its FDA-approved indicated uses. When used as a verb, "Detail"

means to engage in a Detail.

 

     1.23 "DIRECT DETAILING EXPENSES" means the following costs and expenses

associated with a Party's PSRs, District Managers and Sales Management Team: all

costs and expenses of salary, benefits and employment taxes (including but not

limited to base salary and incentive compensation); all costs and expenses of

recruiting and hiring; all costs and expenses of automobiles, equipment and

supplies; and all travel costs and expenses. Direct Detailing Expenses do not

include the costs and expenses associated with marketing, Promotion, sales and

Product Promotional Materials, and Samples.

 

     1.24 "DISTRICT MANAGER" means a full time employee of either GSK or

Allergan, as the case may be, who is responsible for supervising the respective

Party's PSRs.

 

     1.25 "EFFECTIVE DATE" will have the meaning set forth in the Preamble.

 

     1.26 "FDA" means the United States Food and Drug Administration and any

successor agency thereto.

 

     1.27 "FD&C ACT" means the Food, Drug, and Cosmetic Act as amended, and the

regulations promulgated thereunder from time to time.

 

     1.28 "GSK" will have the meaning set forth in the Preamble.

 

     1.29 "HIPAA" means the Healthcare Insurance Portability & Accountability

Act of 1996 as amended, and the regulations promulgated thereunder from time to

time.

 

     1.30 "JCC" has the meaning set forth in SECTION 2.1 (JOINT

COMMERCIALIZATION COMMITTEE).

 

     1.31 "GSK PROMOTIONAL REVIEW COMMITTEE" has the meaning set forth in

SECTION 3.3.1 (PRODUCT PROMOTIONAL MATERIALS).

 

     1.32 "GSK PSR" means a member of GSK's sales force.

 

     1.33 "MARKET" means, when used as a verb, to market, sell, distribute,

Promote or advertise a product.

 

     1.34 "MARKETING PLAN(S)" means one (1) or more plans detailing the

activities to be performed by each Party in the Territory during the Commitment

Term, as more fully detailed in ARTICLE 2 (GOVERNANCE AND MARKETING PLAN) of

this Agreement.

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       4

 

<PAGE>

 

     1.35 "NET SALES" means, with respect to a given period of time, gross sales

of Primary Product and/or Additional Neuro Product by GSK, its Affiliates, and

sublicensees in the Territory in such period, as the case may be, 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, health management organizations, pharmacy

benefit managers (or equivalents thereof), federal, state/provincial, local and

other governments, their agencies and purchasers and reimbursers or to trade

customers;

 

          (C) 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 GSK;

 

          (E) transportation costs, including insurance, for outbound freight

related to delivery of the 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 such period; and

 

          (H) any other items actually deducted from gross sales amounts as

reported by GSK in its financial statements in accordance with the International

Financial Reporting Standards ("IFRS"), applied on a consistent basis.

 

Sales between or among GSK and its Affiliates or sublicensees will be excluded

from the computation of Net Sales, but the subsequent final sales to Third

Parties by such Affiliates or sublicensees will be included in the computation

of Net Sales.

 

GSK shall apply the Allocation Factors listed in EXHIBIT A to this Agreement to

arrive at Net Sales to the Neurologist Segment and to identified Primary Care

Physicians.

 

     1.36 "NEUROLOGIST SEGMENT" means physicians who are neurologists or have

specialty training in neurology in the Territory.

 

     1.37 "PARTY" means either of GSK or Allergan and "Parties" means both of

them.

 

     1.38 "PDMA" means the Prescription Drug Marketing Act of 1987 as amended,

and the regulations promulgated thereunder from time to time.

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                        5

 

<PAGE>

 

     1.39 "PRIMARY PRODUCT PERFORMANCE PAYMENT" has the meaning set forth in

SECTION 7.1.1(B) (PRIMARY PRODUCT PERFORMANCE PAYMENT).

 

     1.40 "PERSON" means an individual, a corporation, a partnership, an

association, a trust or other entity or organization, including a government or

political subdivision or an agency or instrumentality thereof.

 

     1.41 "PERSONNEL" has the meaning set forth in SECTION 3.2.12(A) (STATUS OF

ALLERGAN AND ITS PERSONNEL).

 

     1.42 "PHRMA CODE" means the PhRMA Code on Interactions with Health Care

Professionals, as amended from time to time.

 

     1.43 "PRIMARY DETAIL" means a Detail in which the Product information that

is communicated by a GSK PSR or Allergan PSR, as the case may be, to a

physician(s) in the Primary Product Target Audience or Additional Neuro Product

Target Audience, as the case may be, is the first product information

communicated by such GSK PSR or Allergan PSR.

 

     1.44 "PRIMARY PRODUCT" means Amerge(R) or any prescription branded

non-generic prescription pharmaceutical product containing naratriptan

hydrochloride as the sole therapeutically active ingredient, in any dosage form

for human prescription use and for all indications, which is sold by GSK or its

Affiliates in the Territory.

 

     1.45 "PRIMARY PRODUCT BASELINE" means the ***, which is calculated using

the methodology set forth in EXHIBIT A of this Agreement ***.

 

     1.46 "PRIMARY PRODUCT FAILURE" will have the meaning set forth in SECTION

7.1.3(A)(I).

 

     1.47 "PRIMARY PRODUCT NET SALES" means Net Sales of Primary Product

achieved from prescriptions from the Neurologist Segment and those primary care

physicians who comprise the Primary Product Target Audience and calculated using

the Allocation Factors listed in EXHIBIT A to this Agreement.

 

     1.48 "PRIMARY PRODUCT TARGET AUDIENCE" means as to the Primary Product (i)

certain of those physicians in the Neurologist Segment and (ii) primary care

physicians, both of whom meet the profile of target physicians established by

the JCC and set forth in the Marketing Plan, which Primary Product Target

Audience may be modified *** by the JCC. As of sixty (60) days after the

Effective Date, the Parties will agree on fewer than *** primary care physicians

to comprise the Primary Product Target Audience, in addition to certain of those

physicians in the Neurologist Segment.

 

     1.49 "PRODUCT" when used alone means either or both the Primary Product and

the Additional Neuro Product.

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                        6

 

<PAGE>

 

     1.50 "PRODUCT PROMOTIONAL GUIDELINES" has the meaning set forth in SECTION

2.5.2 (PLAN CONTENTS AS TO THE PRIMARY PRODUCT).

 

     1.51 "PRODUCT PROMOTIONAL MATERIALS" has the meaning set forth in SECTION

3.3.1 (PRODUCT PROMOTIONAL MATERIALS).

 

     1.52 "PROMOTION" means those activities, including, without limitation,

detailing and distributing samples of a product, normally undertaken by a

pharmaceutical company's sales force to implement marketing plans and strategies

aimed at encouraging the purchase and appropriate use of a particular

prescription pharmaceutical product. When used as a verb, "Promote" means to

engage in such activities.

 

     1.53 "PROMOTIONAL EXPENSES" means all costs and expenses of Allergan

allocated to the Primary Product, less all of Allergan Direct Detailing

Expenses.

 

     1.54 "PSR" means Professional Sales Representative, either a Allergan PSR

or a GSK PSR, and "PSRs" means both Allergan PSRs and GSK PSRs.

 

     1.55 "RESIDUAL TERM" has the meaning set forth in SECTION 12.1.3 (RESIDUAL

TERM).

 

     1.56 "RESIDUAL TERM ROYALTY" has the meaning set forth in SECTION 7.1.2

(RESIDUAL TERM PAYMENTS).

 

     1.57 "SALES CALL" means an interaction between a PSR and a physician or

other health care provider in which the Product is the subject of a Detail.

 

     1.58 "SALES CALL PLAN" means a plan established from time to time by the

JCC and set forth in the Marketing Plan that sets forth, at a minimum, the

profile of Primary Product Target Audience and Additional Neuro Product Target

Audience, and the Detailing reach (i.e., number of physicians) and frequency

(i.e., number of Details per physician and the relevant timing of such Details)

objectives for the PSRs in a manner that reflects the promotional effort for the

Primary Product or Additional Neuro Product, as the case may be, as outlined in

the Marketing Plan and this Agreement. The Sales Call Plan may be modified from

time to time by the JCC.

 

      1.59 "SALES MANAGEMENT TEAM" means one (1) or more regional directors or

Vice Presidents of GSK or Allergan, as the case may be, each of whom will be (a)

full time employees of GSK or Allergan, as the case may be, and (b) primarily

responsible for supervising a group of the District Managers within a geographic

region of the Territory.

 

     1.60 "SALES TERRITORY" means one of the geographic regions within the

Territory, as established from time to time by the JCC and set forth in the

Marketing Plan, in which one or more PSRs will be assigned by GSK and/or

Allergan, as the case may be, to Promote the Primary Product. The Sales

Territories may be modified from time to time by the JCC.

 

     1.61 "SAMPLES" means individual physician sample units of the Product, the

amounts of which are for the Primary Product and Additional Neuro Product.

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       7

 

<PAGE>

 

     1.62 "SAMPLE RECEIPT FORMS" means those multi-part paper or electronic

forms used for the purpose of recording Detail and Sample request and receipt

activity performed by PSRs during Sales Calls. These forms are also used as

Sample receipts on which to obtain a physician's signature in acknowledgment of

the physician's receipt of a Sample. The Sample Receipt Forms will be in a form

agreed to by the JCC.

 

     1.63 "SECONDARY DETAIL" means a Detail in which Product information is

communicated by a GSK PSR or Allergan PSR, as the case may be, to a physician(s)

in the Primary Product Target Audience or the Additional Neuro Product Target

Audience, as the case may be, and is the second product information communicated

by such GSK PSR or Allergan PSR.

 

     1.64 "TECHNICAL AGREEMENT" has the meaning set forth in SECTION 5.4

(GENERAL; ADVERSE DRUG EXPERIENCES AND PRODUCT COMPLAINTS; PRODUCT AUDITS).

 

     1.65 "TERM" has the meaning set forth in SECTION 12.1 (TERM).

 

     1.66 "TERRITORY" means the fifty (50) states of the United States of

America and the District of Columbia.

 

     1.67 "THIRD PARTY" means any Person other than a Party or any Party's

respective Affiliates.

 

     1.68 "TRADEMARK" has the meaning set forth in SECTION 3.4.2 (TRADEMARKS).

 

     1.69 "TRAINING PROGRAM" has the meaning set forth in SECTION 3.3.3(A)

(SALES TRAINING).

 

     1.70 "WORKING GROUP" has the meaning set forth in SECTION 2.2 (WORKING

GROUPS).

 

                                    ARTICLE 2

 

                         GOVERNANCE AND MARKETING PLANS

 

     2.1 JOINT COMMERCIALIZATION COMMITTEE (JCC).

 

          2.1.1 STRUCTURE. The Parties will establish a Joint Commercialization

Committee (the "JCC") during the Commitment Term, which will be comprised of at

least three (3) members from each Party, each with appropriate decision-making

authority. In addition, the JCC may from time to time include additional

non-voting, ad-hoc representatives from either Party on specific issues as the

need arises. The chairperson of the JCC will be one of the members of the JCC

and chairmanship of the JCC will rotate every six (6) months between a GSK JCC

member and an Allergan JCC member, commencing with a GSK JCC member. The

chairperson of the JCC will distribute a draft agenda prior to, and meeting

minutes reasonably promptly following, each meeting of the JCC. The JCC will

meet periodically as agreed by the Parties, but in no event less than once

during each Calendar Quarter during the Commitment

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       8

 

<PAGE>

 

Term, in person not more than twice per year (with locations to alternate

between the Parties), or by video teleconference or teleconference as mutually

agreed, to discuss matters within its purview. Each Party will bear all expenses

it incurs in regard to participating in any JCC meetings, including all travel

and living expenses as provided in SECTION 6.2.2 (ALLERGAN DETAIL RELATED COSTS

AND EXPENSES) and SECTION 6.3.2 (GSK DETAIL RELATED COSTS AND EXPENSES). At

least one (1) representative from each Party must be present at any meeting of

the JCC to represent a quorum for voting purposes. The members of the JCC will

seek to make all determinations to be made by them unanimously following full

discussion thereof (with each Party having one (1) vote). If the JCC is unable

to reach a unanimous decision on any matter for which it has responsibility as

set forth in this Agreement within ten (10) days after such matter is first

presented to the JCC, then GSK will make the final decision on any such matters

or disputes relating to the content of the Marketing Plans, Product strategy,

marketing, distribution and trade channels for Product, and all other Promotion

and marketing related topics relating to Product, which decision of GSK will be

binding upon both Parties; provided, however, that Allergan will have final say

on any disputes relating to Allergan PSRs Promotion strategy, deployment,

incentive compensation, tactics, or other Promotion execution or sales execution

related topics that are specifically related to Allergan's PSRs, provided that

Allergan will use good faith efforts to resolve any such disputes in a manner

consistent with the Marketing Plan and Applicable Law.

 

          2.1.2 DUTIES. The JCC will have the overall responsibility to manage

and coordinate all Promotion activities relating to the Product in the Territory

during the Commitment Term, to approve the Marketing Plans submitted by the

Parties for each Commitment Year as provided in SECTION 2.5 (MARKETING PLAN)

below, and to settle any disputes between the Parties relating to the

preparation of any such Marketing Plans prior to their submission to the JCC for

review and approval. In addition, the JCC will coordinate the activities of the

Parties to implement and execute each such Marketing Plan, which activities will

include, without limitation with respect to the Primary Product, developing

advertising, marketing and promotional strategies for the Primary Product in the

Territory, developing and establishing all Product Promotional Guidelines, Sales

Call Plans, Sales Territories and Target Physician lists. The JCC will also be

responsible for overseeing all Working Groups (if any) of the JCC. For the

avoidance of doubt, unless provided otherwise by this Agreement, the JCC has no

authority to (i) modify any material term or condition of this Agreement or (ii)

create or provide for any financial obligation of either Party.

 

     2.2 WORKING GROUPS. From time to time during the Commitment Term, the JCC

may establish and delegate duties to other committees, sub-committees, or

directed teams (each, a "WORKING GROUP") on an "as needed" basis to oversee

particular projects or activities. Each such Working Group will be constituted

and will operate as the JCC determines; provided that each Working Group will

have equal representation from each Party except as otherwise mutually agreed by

the Parties. Working Groups may be established on an ad hoc basis as the JCC

will determine. Each Working Group and its activities will be subject to the

oversight, review and approval of, and will report to the JCC. In no event will

the authority of the Working Group exceed that specified for the JCC under this

ARTICLE 2 (GOVERNANCE AND MARKETING PLANS).

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       9

 

<PAGE>

 

     2.3 MANAGED CARE. Subject to SECTION 3.2.6 (MANAGED CARE AND

REIMBURSEMENT), the Parties agree, that periodically with respect to managed

care formularies for the Primary Product, they will discuss in good faith

potential establishment and active initiation of a managed care penetration

strategy for the Primary Product.

 

     2.4 ALLIANCE MANAGERS. Each Party will appoint and notify the other Party

of its respective Alliance Manager, including any changes in such designation

from time to time during the Commitment Term. Further, the Parties acknowledge

and agree that each Party may designate their respective Alliance Manager to be

a member of the JCC.

 

     2.5 MARKETING PLAN.

 

          2.5.1 MARKETING PLAN. The principal mechanism by which the Parties

will coordinate their respective Promotion activities for Product under this

Agreement will be through the Marketing Plans, each (with the exception of the

initial Marketing Plan as described below) to be prepared jointly by GSK and

Allergan, and each (including the initial Marketing Plan as described below) to

be reviewed and approved by the JCC and periodically updated as set forth

herein. No later than thirty (30) days after the Effective Date, GSK will submit

the initial Marketing Plan, which was prepared by GSK prior to the Effective

Date, to the JCC for review and approval. The initial Marketing Plan will cover

the first (1st) Commitment Year. GSK and Allergan will be jointly responsible

for preparing drafts of all Marketing Plans subsequent to the initial Marketing

Plan, which will be presented to the JCC for review and approval on an annual

basis, and each such Marketing Plan will cover a full Commitment Year,

commencing with the second Commitment Year which will commence January 2007.

Each draft annual Marketing Plan will be ready for presentation to the JCC not

later than sixty (60) days prior to the end of each Commitment Year, and will be

approved by the JCC not later than the end of each Commitment Year. If the

Parties can not agree on the content of any such Marketing Plan, then such

matter will be resolved by the JCC as provided in SECTION 2.1.1 (STRUCTURE)

prior to the commencement of the relevant Commitment Year.

 

          2.5.2 PLAN CONTENTS AS TO THE PRIMARY PRODUCT. Each Marketing Plan

will, at a minimum, include: a review of the triptan marketplace in the

Territory and more specific detail of the long acting triptans and the

positioning of the Primary Product in the Territory against Third Party long

acting triptan competition, provided, however, that GSK will not be obligated to

provide to Allergan, or include in the Marketing Plan, any strategic information

on GSK neurological products other than the Products; Marketing and Promotion

objectives/strategies for the Primary Product in the Territory for the relevant

Commitment Year; clinical and publication support plans and plans (if any) for

Phase IIIb/IV studies and investigator-sponsored studies; delineation of Sales

Force efforts for the Primary Product in the Territory for the relevant

Commitment Year, including a profile of the Primary Product Target Audience, a

Sales Call Plan, and a Samples plan; general delineation of Sales Territories;

budgets for Marketing and Promotion of the Primary Product in the Territory for

the relevant Commitment Year; a non-binding multi-Commitment Year projection of

plans and budgets for the Marketing and Promotion of, and forecasts for, the

Primary Product in the Territory; desired call frequency and reach; revenue and

expense forecasts for the Primary Product in the Territory for the relevant

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       10

 

<PAGE>

 

Commitment Year; and the overall level of anticipated resource commitments on

the part of each Party under this Agreement relating to the Primary Product in

the Territory for the relevant Commitment Year. The Marketing Plan will also

contain promotional guidelines for the Primary Product (the "PRODUCT PROMOTIONAL

GUIDELINES"), which will be updated from time to time as necessary or desirable

by the JCC as provided in SECTION 3.2.1 (MARKETING AND PROMOTION PLANNING,

STRATEGY AND CONTENT). Such Marketing Plan will be in a form generally

consistent with the outline attached hereto as EXHIBIT B.

 

          2.5.3 MARKETING PLAN CONTENTS AS TO ADDITIONAL NEURO PRODUCT. Each

Marketing Plan will also include such contents, as determined by the Parties and

agreed to by the JCC, which pertain to the Detailing and Promotion of the

Additional Neuro Product by the Parties in the Territory, which contents will

include a review of the triptan marketplace in neurology for both short-acting

and long-acting triptans, a Sales Call Plan, a budget for the Detailing and

Promotion of the Additional Neuro Product, sampling requirements promotional

guidelines for the Additional Neuro Product, the allocation of Details between

Primary Details and Secondary Details for the Additional Neuro Product, and the

Additional Neuro Product Target Audience. Allergan will have no marketing and

Promotion spend commitments for the Additional Neuro Product. The Marketing Plan

will also include an explanation of GSK's co-positioning of the Products

relative to GSK PSR detailing efforts within the triptan marketplace.

 

          2.5.4 MARKETING AND PROMOTION COSTS. GSK and Allergan will be

responsible for Marketing and Promotion costs and expenses incurred in

accordance with the Primary Product Marketing Plan in accordance with SECTION

6.1 (JOINT MARKETING AND PROMOTION COSTS AND EXPENSES), which costs will be part

of the budget in the Marketing Plan and approved by the JCC as provided in

SECTION 2.1.1 (STRUCTURE).

 

                                   ARTICLE 3

 

                 PROMOTIONAL MATERIAL DELIVERABLES AND OBLIGATIONS

 

     3.1 PRIMARY PRODUCT CO-EXCLUSIVE CO-PROMOTION ARRANGEMENT; ADDITIONAL NEURO

PRODUCT NON-EXCLUSIVE CO-PROMOTION ARRANGEMENT; RESTRICTIVE COVENANT.

 

          (A) GSK hereby engages Allergan, on a co-exclusive basis (with GSK),

and Allergan agrees, to Promote and Detail the Primary Product to the Primary

Product Target Audience in the Territory, commencing on the Co-Promotion

Commencement Date continuing thereafter during the Commitment Term, in

accordance with the Marketing Plan as directed by the JCC and the terms and

conditions of this Agreement. Notwithstanding the previous sentence, (i) GSK may

enter into co-promotion arrangements with respect to the Primary Product at any

time during the Term with (a) its Affiliates; provided that it will notify

Allergan in writing of any such Affiliate arrangement, and (b) Third Parties

with respect to physicians other than those included in the Primary Product

Target Audience; and (ii) GSK will at all times during the Term have a right to

Market, Detail and Promote the Product (a) outside of the Primary Product Target

Audience wherever and to whomever it chooses or (b) within the Primary Product

Target Audience as determined in writing by the JCC. For purposes of

clarification, any such

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       11

 

<PAGE>

 

promotional efforts by GSK will not affect or alter GSK's Fixed Payment, Primary

Product Performance Payment or Additional Neuro Product Performance Payment

obligations under SECTION 7.1.1 (COMMITMENT TERM PAYMENTS).

 

          (B) GSK hereby engages Allergan, on a non-exclusive basis, and

Allergan agrees, to Promote and Detail the Additional Neuro Product to the

Additional Neuro Product Target Audience in the Territory, commencing on the

Co-Promotion Commencement Date and continuing thereafter during the Commitment

Term, in accordance with the Marketing Plan as directed by the JCC and the terms

and conditions of this Agreement. For clarity, the Parties acknowledge and agree

that, (i) GSK may enter into co-promotion arrangements with respect to the

Additional Neuro Product with (a) its Affiliates, and (b) Third Parties; and

(ii) GSK will at all times during the Term have a right to promote the

Additional Neuro Product wherever and to whomever it chooses.

 

          (C) Allergan will have no right to sublicense any of its rights under

this Agreement, including, without limitation, its rights under SECTIONS 3.1(A)

and (B) above, to any Affiliate or Third Party without the prior written consent

of GSK. Notwithstanding anything in this Agreement to the contrary, either Party

may contract or agree with one or more of its Affiliates to have such Affiliate

perform any of such Party's obligations herein. In no event, will such use of an

Affiliate be deemed to relieve a Party of its liabilities or obligations to the

other Party under this Agreement. Each Party expressly acknowledges and agrees

that it 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

such Party or any of its Affiliates.

 

          (D) During the Term, Allergan will not, and will cause its Affiliates

not to, directly or indirectly detail, promote, market and/or sell any

prescription pharmaceutical product in the Territory in which at least one

active component of such product may be included in the Triptan class of drugs

(selective 5-HT1 (serotonin) receptor agonists) (a "Competing Product"), or

acquire directly or indirectly any rights or interest in or to a Competing

Product which is being detailed, promoted, marketed and/or sold in the

Territory.

 

     3.2 CO-PROMOTION OBLIGATIONS

 

           3.2.1 MARKETING AND PROMOTION PLANNING, STRATEGY AND CONTENT. During

the Commitment Term, the JCC will have exclusive responsibility with respect to

Promotion planning and strategy applicable to the Parties for the Product in the

Territory during the Commitment Term and the content of Product Promotional

Guidelines. The JCC will have final authority for the Product's Promotion

strategies and plans as to the Parties, identification of Primary Product Target

Audience and the Additional Neuro Product Target Audience, Sales Call Plans, and

the strategies and plans with respect to the Product Promotional Materials;

provided, however, that prior to first use, the form and content of any and all

Product Promotional Materials will be subject to the approval of GSK as provided

in SECTION 3.3.1 (PRODUCT PROMOTIONAL MATERIALS) below.

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       12

 

<PAGE>

 

          3.2.2 CO-PROMOTION. As of the Effective Date and thereafter during the

Commitment Term, Allergan will, at its sole expense and pursuant to SECTION

6.2.1 (ALLERGAN CO-PROMOTION COSTS AND EXPENSES) use Commercially Reasonable

Efforts to Promote the Product in the Territory in accordance with Promotion

strategies determined by the JCC under SECTION 3.2.1 (MARKETING AND PROMOTION

PLANNING; STRATEGY AND CONTENT) and set forth in the then-current JCC-approved

Marketing Plan, and the terms and conditions of this Agreement. During the

Commitment Term, neither Party will engage in any activities with respect to the

Product in the Territory that are outside of or inconsistent with the

then-current JCC-approved Marketing Plan for the Product, except with prior

express written approval of the JCC.

 

          3.2.3 PROFESSIONAL SALES REPRESENTATIVES (PSRS).

 

               (A) GENERALLY. In connection therewith, as of the Effective Date

and thereafter during the Commitment Term, Allergan will maintain, in the

Territory, a well-trained sales force consisting of full-time PSRs to Promote

and Detail the Products using Product Promotional Materials generated and

approved as provided in SECTION 3.3.1 (PRODUCT PROMOTIONAL MATERIALS) below

prior to first use. Allergan will supervise its PSRs, District Managers and

Sales Management Team and be responsible for its remuneration, incentives and,

subject to SECTION 3.2.4 (SALES MANAGEMENT) below, and general sales training.

The Allergan PSRs, District Managers and Sales Management Team will remain

exclusively under the authority of Allergan.

 

               (B) MINIMUM PSR'S. Allergan will Promote and Detail the Product

in the Territory during the Commitment Term with such minimum number Allergan

PSRs actively Promoting and Detailing, or in a position to Promote and Detail,

Product as provided herein: (i) at least *** PSRs as of, and for *** after, the

Co-Promotion Commencement Date, and (ii) at least *** PSRs at all times during

the Commitment Term after *** the Co-Promotion Commencement Date.

 

          3.2.4 SALES MANAGEMENT. Each Party will be responsible for supervising

its PSRs. In connection therewith, as of the Effective Date and thereafter

during the Commitment Term, Allergan will provide a sufficient number of full

time employees to serve as District Managers. Allergan may, but will not be

obligated to, designate one (1) or more full time employees to serve as regional

directors having the responsibility for supervising a group of Allergan's

District Managers in a particular geographic region of the Territory. Allergan

will provide GSK with contact information for Allergan's District Managers and

regional directors (if any) and will update that information periodically or as

requested by GSK from time to time during the Commitment Term. For the avoidance

of doubt, each Party's regional directors and District Managers may communicate

directly with their counterparts of the other Party to support each Party's

obligations under this Agreement.

 

          3.2.5 DETAILS. After the Effective Date and thereafter during the

Commitment Term (defined below), Allergan will Detail and Promote the Product in

the Territory in accordance with the applicable JCC-approved Marketing Plan

under SECTION 2.5.1 (MARKETING PLAN) and JCC-approved strategies and tactics

under SECTION 3.2.1 (MARKETING AND PROMOTION

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       13

 

<PAGE>

 

PLANNING; STRATEGY AND CONTENT), including by satisfying the specific

commitments set forth in this SECTION 3.2.5.

 

               (A) ALLERGAN PRODUCT MINIMUM DETAIL COMMITMENTS. After the

Co-Promotion Commencement Date and thereafter during the Commitment Term,

Allergan, at its own expense pursuant to SECTION 6.2.2(A) (ALLERGAN DETAIL

RELATED COSTS AND EXPENSES), will be required to deliver the Details indicated

in the table below to this Agreement for the Product per Commitment Year to the

Primary Product Target Audience and the Additional Neuro Product Target

Audience, which Detail amounts will be prorated for any partial calendar year

comprising a Commitment Year ("ALLERGAN MINIMUM DETAILS COMMITMENT"). The

Allergan Minimum Details Commitment for the Primary Product will be comprised of

*** Primary Details in *** the Commitment Term and *** Primary Details in ***

the Commitment Term, with all remaining Details being at least Secondary

Details. Subject to the immediately preceding sentence, the JCC will determine

in good-faith the Primary/Secondary Detail Commitment split for the Primary

Product for Allergan for *** of the Commitment Term.

 

<TABLE>

<CAPTION>

                                                 ADDITIONAL

                  TOTAL MINIMUM # OF    PRIMARY       NEURO

COMMITMENT YEAR          DETAILS         PRODUCT      PRODUCT

---------------    ------------------    -------    ----------

<S>                <C>                   <C>        <C>

      ***                  ***             ***          ***

</TABLE>

 

The Parties may, not later than ninety (90) days prior to the commencement of

any Commitment Year, agree in writing to change the distribution of Allergan

Minimum Details Commitment amounts between the Primary Product and Additional

Neuro Product from that as set forth in the table above. In the event that the

Parties cannot agree as to any such change in the distribution of Allergan

Minimum Details Commitment amounts between the Primary Product and Additional

Neuro Product for a Commitment Year within such ninety (90) day period, the

Allergan Minimum Details Commitment amounts set forth in the table above for the

Primary Product and Additional Neuro Product will remain in place during such

Commitment Year.

 

               (B) SALES DEPLOYMENT COSTS. Each Party will be responsible for

its own costs and expenses for sales deployment and internal distribution of

Product Promotional Materials pursuant to and as further set forth in SECTION

6.2.2(B) (ALLERGAN DETAIL RELATED COSTS AND EXPENSES as to Allergan and SECTION

6.3.2(A) (GSK DETAIL RELATED COSTS AND EXPENSES) as to GSK.

 

               (C) COMMITMENT TERM. The Allergan Minimum Details Commitment will

commence as of the Co-Promotion Commencement Date and will terminate

automatically on the fifth (5th) year anniversary of the Co-Promotion

Commencement Date (the "COMMITMENT TERM"). The Commitment Term may be extended

under SECTION 12.1.2 (EXTENSION OF COMMITMENT TERM) in twelve (12) month

increments by the mutual written agreement of the Parties, on prior written

request to the JCC by either Allergan or GSK, provided, however, that Allergan

will have first met the Allergan Minimum Details Commitment

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       14

 

<PAGE>

 

in each year of the Commitment Term as set forth in SECTION 3.2.5(A) (ALLERGAN

PRODUCT MINIMUM DETAIL COMMITMENTS) above before the JCC can consider any such

request.

 

               (D) NO AGENCY. In no event will any PSR or any member of the

Sales Management Team for one Party at any time identify, either expressly or

through implication, themselves as a an employee or agent of the other Party.

 

          3.2.6 MANAGED CARE AND REIMBURSEMENT. During the Term, the managed

care strategy for Product in the Territory including, without limitation,

contracting with, and pricing for, managed care customers, will be defined and

approved exclusively by GSK. All costs and expenses arising from managed care,

Medicare/Medicaid execution, personnel, and other related costs associated with

Product in the Territory will be the sole responsibility and obligation of GSK

as set forth in SECTION 6.3.4(B) (OTHER GSK COSTS AND EXPENSES).

 

          3.2.7 DATA COLLECTION AND REPORTING SYSTEMS. As soon as practicable,

but in any event prior to the Co-Promotion Commencement Date, Allergan, at no

expense to GSK, will establish and, during the Term and the three (3)-year

period following the expiration or earlier termination of this Agreement,

maintain true and accurate data collection and reporting systems for both

Details performed and Samples distributed by Allergan's PSRs, District Managers

or any member of Allergan's Sales Management Team during the Commitment Term.

 

          3.2.8 SALES FORCE INCENTIVE PLAN. As soon as practicable, but in any

event prior to the Co-Promotion Commencement Date, Allergan will establish and,

throughout the Commitment Term, maintain, a sales force incentive plan for its

PSRs, District Managers and Sales Management Team responsible for the Promotion

of the Product in the Territory, which in each case will be consistent with the

incentive plan and promotional strategy determined by the JCC and set forth in

the Marketing Plan.

 

          3.2.9 QUARTERLY REPORTS. Starting as of the Co-Promotion Commencement

Date for Allergan, at the end of each Calendar Quarter during the Commitment

Term, Allergan will provide to the JCC a quarterly written report providing

information on the numbers of Details and Samples distributed by its PSRs,

District Managers and Sales Management Team. Starting as of the Co-Promotion

Commencement Date for GSK, at the end of each Calendar Quarter during the Term,

GSK will provide to the JCC information on Net Sales as provided in SECTION

7.2.1 (PAYMENT OF COMPENSATION PAYMENTS), as well as updates on managed care

contracting with respect to the Primary Product, GSK advertising, overall brand

strategy and tactics in the Territory relating to the Primary Product that is

directly relevant to the Primary Product Target Audience, and Primary Product

improvements and enhancements, if any. Promptly after the Effective Date, the

Parties will agree on mutually acceptable quarterly written report/statement

formats; provided that each Party may reasonably request in writing report

modifications and/or additional Product-related information from time to time to

satisfy accounting, regulatory or legal requirements, including, but not limited

to, the Sarbanes-Oxley Act of 2002, as amended and all United States Securities

an Exchange Commission (SEC) rules and regulations relating thereto. Each Party

will provide their respective quarterly

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       15

 

<PAGE>

 

reports/statements as referenced above within sixty (60) days after the end of

such applicable Calendar Quarter.

 

          3.2.10 EMPLOYMENT QUALIFICATIONS. At all times during the Commitment

Term, *** of all Allergan PSRs will have prior experience and training in

pharmaceutical or other medical product sales and *** of Allergan's District

Managers will have sales management experience in the pharmaceutical industry.

Each member of Allergan's Sales Management Team will have sales management

experience in the pharmaceutical industry. Each Allergan PSR, District Manager

and Sales Management Team member will possess a Bachelor of Science or Bachelor

of Arts degree from an accredited four (4) year college or university, will be

professional in manner and appearance, and will be recruited and hired in

accordance with all applicable Federal and state laws. At the time each Allergan

PSR is hired, and at all times subsequent thereto, each such Allergan PSR will

have any and all licenses, permits, and insurance or other coverage as may be

required to enable the Allergan PSR to Promote and Detail the Product as

contemplated under this Agreement. Allergan will hire only competent PSRs,

District Managers and Sales Management Team members. Before hiring any

individual in connection with this Agreement, Allergan will ensure that such

individuals have (i) at least two satisfactory references, provided such

individuals have given written Allergan permission to obtain such references,

(ii) passed a criminal background check conducted by Allergan, (iii) not been

debarred, nor be currently under investigation by the FDA for debarment action

or pursuant to the Generic Drug Enforcement Act, (iv) passed a drug screening

test administered by Allergan, and (v) successfully passed a driving record

screening conducted by Allergan. In addition, before hiring any individuals in

connection with this Agreement that have former experience as a GSK (or any of

its predecessor companies such as SmithKline Beecham or Glaxo Wellcome Inc.)

employee or contractor, Allergan will notify GSK of such individuals so that GSK

may confirm employment history.

 

          3.2.11 INELIGIBLE PERSONS. During the Commitment Term, Allergan will

use Commercially Reasonable Efforts to not hire or employ an Ineligible Person

as either an employee or contractor to Allergan to Promote Product as

contemplated under this Agreement. For the purposes of this SECTION 3.2.11

(INELIGIBLE PERSONS), the term "INELIGIBLE PERSON" means a Person who is

currently excluded, debarred, suspended or otherwise ineligible to participate

in the Federal health care programs or in Federal procurement or nonprocurement

programs, or has been convicted of a criminal offense that falls within the

ambit of 42 U.S.C. 1320a-7(a), but has not yet been excluded, debarred,

suspended or otherwise declared ineligible. To prevent the hiring or engaging of

Ineligible Persons, Allergan will screen all prospective employees and

contractors prior to engaging their services by (i) requiring such persons to

disclose to Allergan whether there are Ineligible Persons; and (ii)

appropriately querying the General Administrative Services Administration's List

of Parties Excluded from Federal Programs (currently available through the

Internet at http://oig.hhs.gov) (these lists of excluded persons hereinafter

referred to as the "Exclusion Lists"), and will review its list of employees and

contractors against the Exclusion Lists prior to January 1st of each Commitment

Year. Prior to the execution of this Agreement, and by January 1st of each

Commitment Year, Allergan will provide GSK with a written certification that

Allergan has performed its obligations relating to Ineligible Persons under this

SECTION 3.2.11 (INELIGIBLE PERSONS) in a format acceptable to GSK. In addition,

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       16

 

<PAGE>

 

Allergan represents and warrants to GSK that Allergan has policies and

procedures in effect that require, and that it will otherwise require, all

employees and contractors to immediately disclose to Allergan any debarment,

exclusion, suspension or other event that may make such employee or contractor

an Ineligible Person. Upon learning or acquiring knowledge of any facts and

circumstances which may lead to an employee or contractor of Allergan providing

services under this Agreement becoming an Ineligible Person, Allergan will

immediately disclose such facts to GSK. If Allergan has actual notice that one

of its employees or contractors providing services under this Agreement has

become or is likely to become an Ineligible Person, Allergan will remove such

Person from any responsibility associated with this Agreement and the Product

Promoted hereunder. If Allergan has actual notice that one of its employees or

contractors is charged with a criminal offense related to any Federal health

care program, or is proposed for exclusion, Allergan will take all appropriate

action to ensure that the responsibilities of such Person has not and will not

in the future adversely affect this Agreement and the Product Promoted

hereunder. Allergan will promptly provide to GSK all data requested by GSK for

purposes of complying with disclosure, reporting or compliance obligations under

Federal and state laws relating to reporting obligations for Ineligible Persons.

 

          3.2.12 STATUS OF ALLERGAN AND ITS PERSONNEL.

 

               (A) GSK is engaging Allergan hereunder, and Allergan will perform

its obligations hereunder, strictly as an "independent contractor." PSRs, Sales

Management Team and any other employee or agent that is involved in performing

Allergan's obligations under this Agreement (collectively, "PERSONNEL") will not

be, and will not be considered or deemed to be, employees of GSK for any

purpose. GSK will not have any responsibility for the hiring, termination,

compensation, benefits or other conditions of employment or engagement of the

Personnel of Allergan.

 

               (B) Personnel of Allergan are not eligible to participate in any

benefits programs offered by GSK to its employees, or in any pension plans,

profit sharing plans, insurance plans or any other employee benefits plans

offered from time to time by GSK to its employees. Allergan acknowledges and

agrees that GSK does not, and will not, maintain or procure any workers'

compensation or unemployment compensation insurance for or on behalf of

Allergan's Personnel. Allergan acknowledges and agrees that it will be solely

responsible for paying all salaries, wages, benefits and other compensation

which its Personnel may be entitled to receive in connection with the

performance of the services hereunder and that Allergan will be liable for all

taxes, excises, assessments and other charges levied by any governmental agency

on, or because of, the services to be provided by Allergan under the terms of

this Agreement.

 

          3.2.13 COMPLIANCE WITH LAWS AND REGULATIONS. In connection with the

Promotion and Detailing of the Product in the Territory and all other activities

under this Agreement, each Party will comply and will cause each of its

respective Personnel, including, without limitation, each PSR, to comply with

all applicable Federal and state laws and regulations in the Territory,

including but not limited to all Federal and State Medicare and Medicaid

anti-kickback statutes and regulations, PDMA and regulations thereunder, FD&C

Act and regulations thereunder, and HIPAA and regulations thereunder.

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                        17

 

<PAGE>

 

     3.3 RESPONSIBILITIES OF THE PARTIES.

 

          3.3.1 PRODUCT PROMOTIONAL MATERIALS. All advertising, promotional,

educational and communication materials used by either Party in the Marketing

and/or Promotion of the Product in the Territory pursuant to this Agreement, in

any format, including, without limitation, audio, visual, digital or computer

formats (collectively, the "PRODUCT PROMOTIONAL MATERIALS"), will be generated

by or on behalf of the JCC and subject to the review and approval by an internal

working committee at GSK responsible for reviewing and approving such Product

Promotional Materials (the "GSK PROMOTIONAL REVIEW COMMITTEE") prior to being

used by Allergan in the Territory. The JCC will submit any proposed Product

Promotional Materials to the GSK Promotional Review Committee at least thirty

(30) days prior to the next meeting of the GSK Promotional Review Committee for

review and approval, which submitted materials will be reviewed at such next GSK

Promotion Review Committee meeting. Notwithstanding the foregoing, the Parties

will immediately cease using any previously approved Product Promotional

Materials in connection with the Promotion of Product in the Territory upon the

request of GSK, which request may be made at any time during the Commitment Term

but must be reasonably explained to the JCC.

 

               GSK, at its sole expense pursuant to SECTION 6.3.2(B) (GSK DETAIL

RELATED COSTS AND EXPENSES), will be responsible for the production of all

Product Promotional Materials for the Product. All Product Promotional Materials

will comply with the Product Promotional Guidelines set forth in the

then-current Marketing Plan, and neither Allergan nor GSK will distribute or

permit any use of any materials within the above definition of Product

Promotional Materials that are not approved by the JCC and GSK Promotional

Review Committee as provided herein. Each Party will be responsible, at its own

expense, for distributing Product Promotional Materials to their respective

PSRs, District Managers and Sales Management Team, and for ensuring use only of

Product Promotional Materials approved as provided hereunder. Product

Promotional Materials will be used only for the purposes of this Agreement and

all unused quantities of such Product Promotional Materials or any Product

Promotional Materials which can no longer be used in the Promotion of Product

per the request of GSK as provided above, will in each case be properly returned

to GSK or destroyed by Allergan, as determined by GSK in its sole discretion,

upon expiration or earlier termination of this Agreement.

 

          3.3.2 CME AND GRANTS. GSK will have sole responsibility, in its sole

discretion, for conducting or arranging for the conducting of any continuing

medical education (CME) and/or grant programs relating in any way to Product

during the Term. GSK will advise Allergan through the JCC of any CME and/or

grant programs relating to Product during the Commitment Term. Notwithstanding

the foregoing, GSK will in no way have any obligation to conduct or arrange for

the conducting of any CME and/or grant programs relating in any way to Product

during the Term. For the avoidance of doubt, Allergan will not conduct or

arrange for the conducting of any CME and/or grant programs relating in any way

to Product during the Term.

 

          3.3.3 SALES TRAINING.

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       18

 

<PAGE>

 

               (A) GSK will be responsible for planning and conducting all

training for the Allergan PSRs, District Managers and Allergan's Sales

Management Team relating to the Product and the Promotion thereof approved by

the JCC (the "TRAINING PROGRAM"). Such Training Program will be comparable to

and no more burdensome to Allergan PSRs than training that GSK provides to its

own PSRs. As soon as practicable, but in any event prior to the Co-Promotion

Commencement Date one hundred twenty (120) days of the Effective Date, Allergan

will organize and conduct the first Training Program (referred to herein as the

"initial Training Program") at a time, date and location mutually agreed to by

the Parties, using GSK trainers to educate the Allergan PSRs, District Managers

and Allergan's Sales Management Team on the Product and the Promotion thereof,

the Applicable Commercial Practices Policies and such other sales training as

GSK or Allergan reasonably deems necessary and appropriate. GSK will provide the

training materials and will provide Allergan with an up-to-date programmed

learning system for the Product to be sent to each of Allergan's PSRs, District

Managers and Sales Management Team members for the "Homestudy Program" prior to

the commencement of the Training Program. Upon completion of the Training

Program, Allergan PSR, District Manager and Sales Management Team member will,

at GSK's sole discretion, be required to sign a certificate(s) acknowledging

their participation in the Training Program, and certifying and acknowledging

their understanding of the foregoing policies and statutes and the specified

acts prohibited thereunder.

 

               (B) Allergan will cause all of the Allergan PSRs, District

Managers and each member of Allergan's Sales Management Team to attend and

successfully complete a GSK Training Program prior to Promoting the Product as

contemplated in this Agreement, and to successfully complete GSK's programmed

learning system for the Product prior to the commencement of the Training

Program. After the initial Training Program, GSK will periodically conduct

additional Training Programs for newly hired Allergan PSRs, Allergan District

Managers and Allergan Sales Management Team members during the Commitment Term.

GSK will be responsible for all costs and expenses associated with the Training

Program pursuant to and as further set forth in SECTION 6.3.2(D) (GSK DETAIL

RELATED COSTS AND EXPENSES), and Allergan will be responsible for all costs and

expenses associated with the training activities pursuant to and as further set

forth in SECTION 6.2.2(D) (ALLERGAN DETAIL RELATED COSTS AND EXPENSES).

 

                (C) In order for any Allergan's PSRs, District Managers or Sales

Management Team members to Promote the Product in the Territory as contemplated

herein, such PSRs, District Managers and Sales Management Team members must

demonstrate thorough knowledge of the Product and the laws, rules, guidelines

and policies applicable to the Promotion of the Product by passing GSK's product

certifications. Such product certifications will be administered to each PSR,

District Manager and Sales Management Team member during the Training Program

and the scores of such certifications will be verified to the satisfaction of

GSK. GSK reserves, and will at all times have, the right to review any and all

product certifications taken by Allergan's PSRs, District Managers and Sales

Management Team members. Any Allergan PSR, District Manager or Sales Management

Team member failing to pass GSK's Homestudy Program product certifications with

at least an eighty percent (80%) score (or the same standards as GSK's internal

requirements for newly hired GSK PSRs, District

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       19

 

<PAGE>

 

Managers and Sales Management Team members) on each such certification may be

removed from Detailing the Product by Allergan.

 

          3.3.4 PROMOTIONAL CLAIMS. Allergan and GSK each agree to limit the

claims of efficacy and safety for the Product made by the Parties' respective

PSRs and Sales Management Teams to those that are consistent with FDA-approved

labeling for the Product in the Territory. Neither Party will add, delete or

modify claims of efficacy or safety in its Promotion of the Product nor make any

changes in Product Promotional Materials approved by the GSK Promotional Review

Committee pursuant to SECTION 3.3.1 (PRODUCT PROMOTIONAL MATERIALS) above. Each

Party's Detailing and Promotion of the Product will be in strict adherence to

all regulatory, professional and legal requirements including, without

limitation, FDA regulations and guidelines concerning the advertising of

prescription drug products, the American Medical Association's Guidelines on

Gifts to Physicians, the PhRMA Code, the Anti-Kickback Statute, the Applicable

Commercial Practices Policies and the Product Promotion Guidelines in the

then-current JCC-approved Marketing Plan for the Product, and any approved

updates thereto.

 

          3.3.5 COMMUNICATIONS WITH SALES REPRESENTATIVES. Each Party will have

full responsibility for the dissemination of information regarding the Product

to its Sales Management Team, District Managers and PSRs based on the Training

Program, Product Promotional Guidelines and the Product Promotional Materials

approved by GSK pursuant to SECTION 3.3.1 (PRODUCT PROMOTIONAL MATERIALS) above.

All written communications from Allergan to Allergan's Sales Management Team and

the Allergan PSRs concerning the Promotion of the Product to Primary Product

Target Audience and the Additional Neuro Product Target Audience, other than

communications described in the next sentence, will be subject to prior written

approval by the JCC or the GSK Promotional Review Committee, as the case may be.

Prior approval will not be required for communications that do not contain any

drug information other than Product name, and other routine business reports

that do not contain any substantive drug information about the Product.

 

          3.3.6 PRICING. GSK will have exclusive responsibility and authority

with respect to the pricing of the Product. If GSK desires to modify pricing for

the Primary Product, GSK will inform Allergan prior to implementation and

discuss any implications of such modification to this Agreement.

 

          3.3.7 MANUFACTURING; DISTRIBUTION; AND SALE OF PRODUCT. GSK will be

solely responsible for all activities relating to manufacture, supply and

distribution of the Product (including Samples) in the Territory, including,

without limitation, order processing, inventory warehousing, delivery to

customers, invoicing and collection of receivables. Costs and expenses for the

foregoing activities will be borne exclusively by GSK pursuant to SECTION

6.3.3(B) (GSK MANUFACTURING, DISTRIBUTION, SALE AND SAMPLE COSTS AND EXPENSES).

GSK will have the sole right and responsibility to arrange for all distribution

of the Product in the Territory, and to effect and account for all sales and to

establish and modify the terms and conditions with respect to the sale of the

Product, including any terms and conditions relating to or affecting the price

at which the Product will be sold, any discount attributable to payments on

receivables, distribution of the Product, credit to be granted or refused and

the like. GSK will process, administer and pay

 

***   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 Exchange Act

     of 1934, as amended.

 

 

                                       20

 

<PAGE>

 

pursuant to SECTION 6.3.3(B) (GSK MANUFACTURING, DISTRIBUTION, SALE AND SAMPLE

COSTS AND EXPENSES) any and all rebates, chargebacks and discounts.

 

               During the Term, GSK will use its Commercially Reasonable Efforts

to manufacture, supply and distribute sufficient Product (including Samples with

adequate shelf life as specified in SECTION 4.1 (PROVISION OF SAMPLES)) to

satisfy the Allergan Minimum Detail Commitments and support the then-current

JCC-approved Marketing Plan and JCC-approved strategies under SECTION 3.2.1

(MARKETING AND PROMOTION PLANNING; STRATEGY AND CONTENT) above. GSK agrees to

discuss with Allergan through the JCC any reasonable concerns of Allergan

relating to manufacture, supply or distribution capacity and/or quality of

Product in the Territory as provided under this Agreement.

 

          3.3.8 PROCESS CHANGES BY GSK. GSK will provide written notice to

Allergan of any material changes contemplated or proposed by GSK to any material

manufacturing processes that will impact the safety, strength, purity,

integrity, or quality (SSPIQ) of the Product.

 

          3.3.9 ON-GOING DEVELOPMENT AND LINE EXTENSIONS. GSK will use its

Commercially Reasonable Efforts to cont


 
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