<PAGE>
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
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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