BOTOX(R) GLOBAL STRATEGIC SUPPORT AGREEMENT

 

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                                                                   Exhibit 10.54

 

                   BOTOX(R) GLOBAL STRATEGIC SUPPORT AGREEMENT

 

                                 BY AND BETWEEN

 

                              GLAXO GROUP LIMITED,

 

                                  ALLERGAN, INC.

 

                                       AND

 

                               ALLERGAN SALES, LLC

 

                               SEPTEMBER 30, 2005

 

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                   BOTOX(R) GLOBAL STRATEGIC SUPPORT AGREEMENT

 

     THIS BOTOX(R) GLOBAL STRATEGIC SUPPORT AGREEMENT, including the exhibits

referred to herein and attached hereto (collectively, the "AGREEMENT") is made

and entered into effective as of September 30, 2005 (the "EFFECTIVE DATE"), by

and between ALLERGAN, INC., a Delaware corporation, having its principal place

of business at 2525 Dupont Drive, Irvine, California 92612, U.S.A., ALLERGAN

SALES, LLC, a Delaware limited liability company, having its principal place of

business at 2525 Dupont Drive, Irvine, California 92612, U.S.A. (ALLERGAN, INC.

and ALLERGAN SALES, LLC are collectively referred to herein as "ALLERGAN") and

GLAXO GROUP LIMITED, a private limited company incorporated in England and

Wales, having its registered office at Glaxo Wellcome House, Berkeley Avenue,

Greenford, Middlesex, England UB6 0NN ("GSK").

 

                                    RECITALS

 

     WHEREAS, ALLERGAN and GSK desire to build the image, awareness and

effectiveness of the BOTOX(R) brand in the Territory (as defined below).

 

     NOW, THEREFORE, in consideration of the mutual covenants and obligations

set forth herein, and for other good and valuable consideration, the receipt and

sufficiency of which is hereby acknowledged, ALLERGAN and GSK hereby agree as

follows:

 

                                    AGREEMENT

 

1.    DEFINITIONS

 

     1.1 "AFFILIATE" of a Party or Person means any Person, whether de jure or

de facto, that directly or indirectly, controls, is controlled by, or is under

common control with such Party or Person, as applicable. Solely as used in this

definition, "control" means (a) direct or indirect ownership of more than fifty

percent (50%) of the equity (or such lesser percentage which is the maximum

allowed to be owned by a foreign corporation in a particular jurisdiction)

having the power to vote on or direct the affairs of such Party or Person, as

applicable, or (b) the possession, directly or indirectly, of the power to

direct or cause the direction of the policies and management of such Party or

Person, as applicable, whether by the ownership of stock, by contract, or

otherwise.

 

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

 

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

 

     1.4 "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.

 

***   Certain confidential information contained in this document, marked with 3

     asterisks, has been omitted and filed separately with the Securities and

     Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934,

     as amended.

 

 

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     1.5 "BOTOX" means any pharmaceutical composition intended for

administration to humans containing botulinum toxin type A, regardless of

formulation, dosage, or form, which is marketed by ALLERGAN or GSK under the

BOTOX trademark.

 

     1.6 "CALENDAR YEAR" means, for the first Calendar Year, the period

beginning on the Execution Date and ending December 31, 2005, and for each

Calendar Year thereafter, each successive period beginning on January 1 and

ending twelve (12) consecutive calendar months later on December 31; provided

however, that the last Calendar Year of the Term may be for a term of less than

twelve (12) consecutive months.

 

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

 

     1.8 "GLOBAL MARKETING" means ALLERGAN's BOTOX Global Strategic Marketing

team, which is responsible for determining long-term strategy, competitor and

trademark defense, global market research strategy, commercial assessment and

guidance of development projects, global publicity strategy, medical marketing

prioritization, publications and other strategic communications for BOTOX.

 

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

 

     1.10 "PARTY" means either GSK or ALLERGAN and "Parties means both of them.

 

     1.11 "PERSON" means an individual, corporation, partnership, association,

trust or any other entity or organization, including, without limitation any

government or political subdivision or any agency or instrumentality thereof.

 

     1.12 "SEMI-ANNUAL PROGRESS REPORT" will have the meaning set forth in

Section 2.2.

 

     1.13 "SUPPORT SERVICES" will have the meaning set forth in Section 2.1.

 

     1.14 "TERM" will have the meaning set forth in Section 6.1.

 

     1.15 "TERRITORY" means Japan and the Peoples Republic of China, and their

respective territories and possessions; provided, however that Territory does

not include Hong Kong or Taiwan.

 

     1.16 "THIRD PARTY" means any Person other than ALLERGAN or GSK or either of

their respective Affiliates.

 

2.    SUPPORT ACTIVITIES

 

     2.1 General. ALLERGAN's objectives under this Agreement will be to (i)

assist GSK to develop scientifically differentiated and customer-responsive

promotional platforms and provide proactive strategic guidance to augment

development of effective promotional and medical education efforts for BOTOX in

the Territory, (ii) review whether tactical plans for BOTOX in the Territory

achieve consistency with worldwide BOTOX strategies, and (iii) assist GSK to

maintain synergy and/or best practices with respect to BOTOX marketing in the

Territory. In furtherance of

 

***   Certain confidential information contained in this document, marked with 3

     asterisks, has been omitted and filed separately with the Securities and

     Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934,

     as amended.

 

 

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these objectives, during the Term and subject to the terms and conditions of

this Agreement, ALLERGAN or its Affiliates will use commercially reasonable

efforts to conduct the specific activities and deliver the deliverables set

forth on Exhibit A with respect to BOTOX (the "SUPPORT SERVICES").

 

     2.2 Semi-Annual Reports. Not later than July 31 and January 31 of each

Calendar Year, ALLERGAN will provide GSK with a written report detailing the

Support Services performed by ALLERGAN or its Affiliate during the immediately

preceding six (6) month period ending June 30 and December 31, respectively, and

the Support Services planned for the immediately succeeding (6) month periods,

including at a minimum a summary of the progress towards completion of the

Support Services ("SEMI-ANNUAL PROGRESS REPORTS").

 

     2.3. No Asset Transfer. Nothing in this Agreement will be construed as an

assignment, license or other transfer of ownership of any kind by either Party

of such Party's (or its Affiliates') intellectual property or other intangibles.

 

     2.4 Lead Contact. Each Party will appoint a lead contact to coordinate and

manage the Support Services ("LEAD CONTACT"). The Lead Contact for each Party

will be identified to the other Parties within ten (10) calendar days after the

Effective Date. Either Party may change its Lead Contact upon written notice to

the other Party.

 

3.    SUPPORT PAYMENTS

 

     3.1 Semi-annual Payments. In consideration for ALLERGAN's provision of the

Support Services as provided in this Agreement and subject to Sections 3.3, 3.4

and 3.5, GSK shall pay ALLERGAN in arrears on an semi-annual basis the amount

for such Calendar Year set forth in Exhibit B. Such amounts shall be paid by GSK

within forty-five (45) calendar days of GSK's receipt of the Semi-Annual

Progress Report and an invoice referring to this Support Agreement and

specifying the amount due; provided, however, that the final semi-annual payment

shall be due on the expiration date of Term.

 

     3.2 Records; Audit Right. ALLERGAN shall maintain records sufficient to

enable accurate calculation of the costs and expenses incurred by ALLERGAN in

providing the Support Services. ALLERGAN shall permit an independent public

accountant designated by GSK and reasonably acceptable to ALLERGAN, to have

access, no more than once in each Calendar Year during the Term and no more than

once following the expiration or termination of the Term, during regular

business hours and upon at least thirty (30) days' written notice, to examine in

confidence ALLERGAN's records solely to the extent necessary to determine that

*** with respect to such Calendar Year. The independent public accountant shall

not report to GSK anything other than whether *** with respect to such Calendar

Year. The costs and expense incurred by ALLERGAN in providing the Support

Services shall not be otherwise subject to audit or review by GSK or to any

report by the independent public accountant performing any audit or review

permitted by this Section. The costs of such review or audit shall be at GSK's

expense.

 

***   Certain confidential information contained in this document, marked with 3

     asterisks, has been omitted and filed separately with the Securities and

     Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934,

     as amended.

 

 

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     3.3 Performance Condition. GSK's obligation to pay ALLERGAN as provided in

Section 3.1 is subject to ALLERGAN (i) submitting the Semi-Annual Progress

Reports as provided in Section 2.2 that provide evidence to GSK that the Support

Services outlined on Exhibit A have been performed within the time periods set

forth on Exhibit A and (ii) for the payment to be made for the first half of any

Calendar Year, submitting a letter from ALLERGAN's Lead Contact confirming that

*** with respect to such period, and for the payment to be made at the end of

any Calendar Year, a letter from ALLERGAN's Lead Contact confirming that ***

with respect to such Calendar Year. If the foregoing documents are delivered

evidencing that the Support Services have been performed from semi-annual period

to semi-annual period as set forth and in accordance with the time periods set

forth in the Semi-Annual Progress Reports, ALLERGAN will have met its

performance condition.

 

     3.4 Taxes. To the extent a statutory tax withholding obligation is imposed

by a governmental authority upon any payment due and payable by GSK to ALLERGAN

under the terms and conditions of this Agreement, GSK will be entitled to

withhold from such payment the amount, if any, of any tax assessed against

ALLERGAN and actually withheld, provided that such tax is only for the account

of ALLERGAN and evidence of the payment of such tax is promptly provided to

ALLERGAN. GSK will pay the amount of such tax to the proper taxing authority and

will be entitled to deduct the amount of such tax from the payment to be made by

GSK to ALLERGAN. GSK will advise ALLERGAN of any tax payment made for the

benefit of ALLERGAN pursuant to this Section 3.4 and provide ALLERGAN copies of

tax receipts for all taxes paid and deducted from the payment due and payable to

ALLERGAN, together with copies of all pertinent communications from or with

governmental authorities with respect thereto. At ALLERGAN's reasonable request

and subject to ALLERGAN reimbursing any costs and expenses, GSK will reasonably

assist ALLERGAN in any effort by ALLERGAN in claiming any exemption from such

deductions or withholdings under any double taxation or similar agreement or

treaty from time to time in force, and in minimizing the amount required to be

so withheld or deducted. ALLERGAN warrants that ALLERGAN is resident for tax

purposes in United States of America and that ALLERGAN is entitled to relief

from United Kingdom income tax under the terms of the double tax agreement

between the United Kingdom and the United States of America. ALLERGAN will

notify GSK immediately in writing in the event that ALLERGAN ceases to be

entitled to such relief. Pending receipt of formal certification from the United

Kingdom Inland Revenue, GSK may pay any payments under this Agreement to

ALLERGAN by deducting tax at a rate specified in the double tax treaty between

the United Kingdom and the United States of America. ALLERGAN agrees to

indemnify and hold harmless GSK against any loss, damage, expense, or liability

arising in any way from a breach by ALLERGAN of the warranties in this Section

3.4 or any future claim by a United Kingdom tax authority or other similar body

alleging that GSK was not entitled to deduct such withholding tax on such

payments at source at the treaty rate.

 

     3.5 Payments Made in U.S. Currency; Wire Transfers. All payments made under

this Agreement will be made in U.S. dollars and payments made by GSK hereunder

will be made to ALLERGAN by bank wire transfer in immediately available funds to

ALLERGAN in accordance with the wire instructions set forth in Exhibit C, which

may be changed only by written notice to GSK from the Chief Financial Officer of

ALLERGAN in accordance with Section 8.7.

 

***   Certain confidential information contained in this document, marked with 3

     asterisks, has been omitted and filed separately with the Securities and

     Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934,

     as amended.

 

 

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     3.6 Late Payments. Any payment due and payable under the terms and

conditions of this Agreement made by GSK or ALLERGAN after the date such payment

is due and payable, will bear interest as of the day after the date such payment

was due and payable, and will continue to accrue such interest until such

payment is made, at rate equal to *** per month. The payment of such interest

will not limit either Party from exercising any other rights it may have as a

consequence of the lateness of any payment.

 

4.    REPRESENTATIONS AND WARRANTIES; RESTRICTIVE COVENANTS

 

     4.1 By ALLERGAN. ALLERGAN represents and warrants that as of the Effective

Date:

 

          4.1.1 ALLERGAN is a corporation duly organized, validly existing, and

in good standing under the laws of the state of Delaware;

 

          4.1.2 The execution, delivery, and performance of this Agreement by

ALLERGAN have been duly authorized by all requisite corporate action and do not

require any shareholder action or approval;

 

          4.1.3 The execution, delivery, and performance by ALLERGAN of this

Agreement and its compliance with the terms and provisions hereof do not and

will not conflict with or result in a breach of any of the terms and provisions

of or constitute a default under (a) any agreement with a Third Party, including

but not limited to a loan agreement, guaranty, financing agreement, agreement

affecting a Product, or other agreement or instrument binding or affecting it or

its property; (b) the provisions of its charter or operative documents or

bylaws; or (c) any order, writ, injunction, or decree of any court or

governmental authority entered against it or by which any of its property is

bound; and

 

          4.1.4 ALLERGAN has the right and authority to provide the Support

Services to GSK and its Affiliates pursuant to the terms and conditions set

forth in this Agreement in the Territory.

 

     4.2 By GSK. GSK represents and warrants that as of the Effective Date:

 

          4.2.1 GSK is a private limited company duly organized, validly

existing, and in good standing under the laws England and Wales;

 

          4.2.2 The execution, delivery, and performance of this Agreement by

GSK has been duly authorized by all requisite corporate action and does not

require any shareholder action or approval; and

 

          4.2.3 The execution, delivery, and performance by GSK of this

Agreement and its compliance with the terms and provisions hereof does not and

will not conflict with or result in a breach of any of the terms and provisions

of or constitute a default under (a) a loan agreement, guaranty, financing

agreement, agreement affecting a Product, or other agreement or instrument

binding or affecting it or its property; (b) the provisions of its charter or

operative documents or

 

***   Certain confidential information contained in this document, marked with 3

     asterisks, has been omitted and filed separately with the Securities and

     Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934,

     as amended.

 

 

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bylaws; or (c) any order, writ, injunction, or decree of any court or

governmental authority entered against it or by which any of its property is

bound.

 

     4.3 Disclaimer. THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS

ARTICLE 4 ARE THE EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE IN OR UNDER THIS

SUPPORT AGREEMENT AND ARE IN LIEU OF ALL WARRANTIES, EXPRESS, STATUTORY OR

IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF

MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

     4.4 Restrictive Covenant of GSK.

 

          4.4.1 The Parties acknowledge that:

 

               (a) As of the Effective Date, neither GSK nor its Affiliates have

any current or future intention of making, having made, using, offer for sale or

importing a Competing Product (as defined in Section 4.4.2) in the Field of Use

in any country of the world; and

 

               (b) During the Term, GSK will obtain certain Confidential

Information of ALLERGAN relating to the development, manufacture and

commercialization of BOTOX, which is valuable and highly confidential to

ALLERGAN and critical to the competitive success of ALLERGAN's business

worldwide.

 

          4.4.2 To the extent permitted under Applicable Law, during the Term

and for a period of *** after the expiration date of this Agreement or the

effective date of the termination of this Agreement for any reason other than by

GSK pursuant to Sections 6.3.1 or 6.3.2 (the "RESTRICTIVE PERIOD"), neither GSK

nor any Affiliate of GSK will manufacture, market, distribute, sell, promote, or

detail any pharmaceutical product in the Territory, which ***, other than BOTOX

(a "COMPETING PRODUCT") in the Field of Use; provided, however, that:

 

               (a) If GSK or any of its Affiliates manufactures, initiates

clinical studies, markets, distributes, sells, promotes, or details

(collectively, "COMMERCIALIZATION") a Competing Product in *** during the Term,

GSK will (i) notify ALLERGAN immediately upon becoming aware of such

commercialization, and (ii) cease commercialization of such Competing Product

within *** after the date that GSK became aware of such commercialization. If

GSK does not cease such commercialization within *** after becoming aware of

such commercialization, ALLERGAN, at any time thereafter, will have a right to

terminate this Agreement or any other agreement between the Parties relating to

BOTOX in the Territory, which termination of this Agreement by ALLERGAN will be

deemed a termination by ALLERGAN pursuant to Section 6.3.1. During the period

between the date that GSK becomes aware of commercialization of a Competing

Product as provided in this Section 4.4.2(a) and the earlier of the date on

which GSK ceases such commercialization and the expiration of the Restrictive

Period, GSK will pay to ALLERGAN *** of all of GSK's or its Affiliates' net

sales of such Competing Product (which net sales will be calculated in the same

manner that Net Sales of GSK are calculated herein). Notwithstanding the

foregoing, if GSK or any of its Affiliates has used ALLERGAN's

 

***   Certain confidential information contained in this document, marked with 3

     asterisks, has been omitted and filed separately with the Securities and

     Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934,

     as amended.

 

 

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Confidential Information in connection with the commercialization of a Competing

Product as provided in this Section 4.4.2(a), ALLERGAN will have the right to

immediately terminate this Agreement and any other agreement between the Parties

relating to BOTOX in the Territory, upon thirty (30) calendar days' prior

written notice to GSK, which termination of this Agreement by ALLERGAN will be

deemed a termination by ALLERGAN pursuant to Section 6.3.1.

 

               (b) Notwithstanding anything contained in this Section 4.4.2,

nothing herein will, expressly or impliedly, preclude or restrict GSK, or any of

its Affiliates, in any way from (i) acquiring a majority of the voting stock, or

all or substantially all of the assets of, a Business Entity (as defined below);

(ii) being acquired by a Business Entity; or (iii) merging, amalgamating, taking

over, or consolidating (or engaging in any similar transaction) with a Business

Entity (hereinafter, the actions referred to in (i), (ii), and (iii) of this

Section 4.4.2(b) are collectively referred to as "MERGER" or "MERGING").

 

                    The term "BUSINESS ENTITY" as used in this Section 4.4.2(b)

means any Person, which, at the time of such Merger, is commercializing (as such

term is defined in Section 4.4.2(a)) a Competing Product in ***, including, for

example, the Persons listed on Exhibit D.

 

                    In the event that GSK or any of its Affiliates Merges with a

Business Entity during the Term, GSK will divest or cause the divestiture of the

Competing Product being commercialized by the Business Entity within *** after

the date of the public announcement of such Merger ("MERGER DATE"). During such

*** period, (A) neither GSK nor any of its Affiliates will use any ALLERGAN

Confidential Information in connection with the commercialization of such

Competing Product; and (B) GSK will continue to comply with the terms of this

Agreement in all respects. If GSK does not divest or cause the divesture of such

Competing Product within *** after the Merger Date, ALLERGAN, at any time

thereafter, will have a right to terminate this Agreement and any other

agreement between the Parties relating to BOTOX in the Territory, which

termination of this Agreement by ALLERGAN will be deemed a termination by

ALLERGAN pursuant to Section 6.3.1. In the event that GSK does not divest or

cause the divesture of such Competing Product within the *** period as provided

in this Section 4.4.2(b), GSK will pay to ALLERGAN *** of all of GSK's or its

successor's net sales of such Competing Product after such *** period (which net

sales will be calculated in the same manner that Net Sales are calculated

herein) and continuing until the earlier of the date on which GSK or its

successor divests such Competing Product or the expiration of the Restrictive

Period.

 

     4.5 Restrictive Covenant of ALLERGAN. In consideration for GSK's agreement

to the terms set forth in Section 4.4 above, ALLERGAN covenants to GSK as

follows:

 

          4.5.1 ALLERGAN will not, and will cause all of its Affiliates and

sublicensees not to, either on its or their own or with any Third Party, conduct

any development activities or conduct clinical trials relating to BOTOX, or seek

any regulatory approvals for BOTOX, in any country in Territory during the Term,

except as specifically permitted in any agreements between the Parties relating

to BOTOX in such countries; and

 

***   Certain confidential information contained in this document, marked with 3

     asterisks, has been omitted and filed separately with the Securities and

     Exchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934,

     as amended.

 

 

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          4.5.2 ALLERGAN will not, and will cause all of its Affiliates and

sublicensees not to, either on its or their own or with any Third Party, use,

sell, offer for sale or import BOTOX in any country in the Territory during the

Term, except, as specifically permitted in any agreements between the Parties

relating to BOTOX in such countries or as otherwise authorized by GSK in

writ