EXHIBIT 10.1
SECOND AMENDMENT TO PROMOTION AGREEMENT
---------------------------------------
This Amendment to the Promotion Agreement between SCHERING CORPORATION
("Schering") and WARNER CHILCOTT PLC ("Warner Chilcott"), effective July 1, 1998
and the Amendment to the Agreement, effective September 3, 1998, (collectively,
the "Agreement") is entered into as of the last date on the signature page
hereof. Terms with initial capitals which are not specifically defined in this
Amendment shall have the defined meaning set forth in the Agreement.
WHEREAS, pursuant to Article II of the Agreement, Schering granted Warner
Chilcott the right to promote, market and sell Schering's Products in the
Territory; and
WHEREAS, Schering and Warner Chilcott now desire to delete and add products to
the Agreement for promotion by Warner Chilcott and Warner Chilcott is desirous
of promoting such additional products;
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
agreements and covenants set forth herein, Schering and Warner Chilcott agree
that the Agreement is hereby amended as follows:
1. The following term shall be added to Article II of the Agreement:
a. The term "Lotrisone(R)" shall mean the topical antifungal and anti-
inflammatory cream manufactured by Schering Corporation.
2. The definition of "Products" in Article II of the Agreement shall be
amended to read as follows:
The term "Products" shall mean K-Dur(R) Products, Nitro-Dur(R),
Lotrisone(R) and Nitrolingual Pump Spray(R).
3. Imdur(R) shall be removed from the Agreement as a promoted Product,
effective January 1, 1999, and Warner Chilcott agrees that it shall have no
right or claim to Imdur(R) or any sales incentives for the promotion of Imdur(R)
thereafter.
4. Nitro-Dur(R) shall no longer be a sampled Product and shall be added as
a promoted Product, effective January 1, 1999, and Detailed to those physicians
described in Article IV of the Agreement.
5. Lotrisone(R) shall be added as a promoted Product, effective January 1,
1999, and Detailed to those physicians described in Article IV of the Agreement.
6. Warner Chilcott shall give K-Dur(R) first Detail; second and third
Detail shall be given to Nitro-Dur(R) and Lotrisone(R) in a manner to be
determined by Warner Chilcott with prior written approval of Schering. For
purposes of this (S)6, K-Dur(R) shall mean K-Dur(R) [REDACTED] only, and Nitro-
Dur(R) shall mean Nitro-Dur(R) [REDACTED] only.
[REDACTED] Confidential treatment has been requested for certain portions of
this document which have been omitted and filed separately with the
Secretary of the Securities and Exchange Commission.
Omitted portions are indicated by [REDACTED].
7. Calls of Nitrolingual Pump Spray(R) shall not be included in the
[REDACTED] Calls under Article VI, (S)A of the Promotion Agreement; the Call
requirements for this Product shall be mutually agreed upon by the Parties and
set forth in a separate agreement.
8. Schering shall pay sales incentives to Warner Chilcott for Lotrisone(R)
in 1999 as follows:
a. [REDACTED] of Adjusted Net Sales up to the Annual Base Target of
[REDACTED];
b. [REDACTED] of Adjusted Net Sales over the Annual Base Target up to
[REDACTED] as outlined in Article XIV, (S)D of the Agreement;
c. [REDACTED] of Adjusted Net Sales over [REDACTED] as outlined in
Article XIV, (S)D of the Agreement.
For each calendar quarter of 1999, Schering shall pay Warner Chilcott [REDACTED]
of Adjusted Net Sales in accordance with (S)8.a, such payment to be made within
[REDACTED] days of the end of each calendar quarter.
Incentive payments for sales over the Annual Base Target shall be paid to Warner
Chilcott as follows:
Attachment 1 provides the 1999 quarterly target sales for Lotrisone(R). For the
second and third calendar quarters, any sales incentives to be paid to Warner
Chilcott shall be based on a comparison of actual Adjusted Net Sales of
Lotrisone(R) to the cumulative targeted sales as [REDACTED] respectively. For
the fourth calendar quarter, any sales incentives to be paid to Warner Chilcott
shall be based on the actual Adjusted Net Sales for the year compared to the
Annual Base Target.
There shall be no payment made to Warner Chilcott under (S)(S)8.b and c for the
first calendar quarter of 1999.
For the second calendar quarter of 1999, Schering shall pay Warner Chilcott
[REDACTED] of any earned sales incentives in accordance with (S)8.b, with
[REDACTED] of such quarterly payment not due and payable until year-end
reconciliation has been performed.
For the third calendar quarter of 1999, Schering shall pay Warner Chilcott
[REDACTED] of any earned incentives in accordance with (S)8.b, with [REDACTED]
of such quarterly payment not due and payable until year-end reconciliation has
been performed.
Fourth quarter 1999 sales incentives and all incentives in accordance with
(S)8.c, if any, shall be determined by year-end reconciliation.
Moneys withheld from the quarterly incentive payments as outlined above will be
used to reconcile any outstanding payments due to Warner Chilcott. Any excess
payment after the third quarter shall be deducted from any other payments due
under the Agreement to Warner Chilcott for any of the Products.
All payments for bonus incentives shall be paid within [REDACTED] days of the
end of each calendar quarter or in the case of the fourth quarter, within
[REDACTED] days of receipt by Schering of the Pipeline Inventory report for
December 31, 1999.
9. Schering shall pay sales incentives to Warner Chilcott for Nitro-Dur(R)
in 1999 as follows:
a. [REDACTED] of Adjusted Net Sales up to the Base Target of [REDACTED];
b. [REDACTED] of Adjusted Net Sales over the Base Target as outlined in
Article XIV, (S)D of the Agreement.
Schering shall make any payments owed to Warner Chilcott in accordance with
(S)9.a within [REDACTED] days of the end of the calendar quarter. Any payments
due to Warner Chilcott in accordance with (S)9.b shall be made within [REDACTED]
days of receipt by Schering of the Pipeline Inventory report for December 31,
1999.
10. The Annual Base Target for K-Dur(R) for 1999 under Article XIV, (S)A
shall be decreased from [REDACTED] to [REDACTED].
11. The sales incentives for K-Dur(R) under Article XIV, (S)C.1 and (S)C.3
shall be changed effective January 1, 1999 in accordance with the following:
a. For the first quarter of 1999, Warner Chilcott shall earn a sales
incentive equal to [REDACTED] of Adjusted Net Sales of K-Dur(R);
b. For the second quarter of 1999, Warner Chilcott shall earn a sales
incentive in an amount equal to the excess, if any, of (i) [REDACTED] of
Adjusted Net Sales of K-Dur(R) for the six (6) months ending [REDACTED] over
(ii) the amount of the sales incentive earned by Warner Chilcott under (S)11.a
for the first quarter of 1999;
c. For the third and fourth quarters of 1999, Warner Chilcott shall earn
a sales incentive equal to [REDACTED] of Adjusted Net Sales of K-Dur(R);
d. Warner Chilcott shall earn an additional sales incentive equal to
[REDACTED] of the excess, if any, of (i) Adjusted Net Sales of K-Dur(R) for the
full 1999 calendar year over (ii) the Annual Base Target of [REDACTED]. All
bonus eligible amounts are pending final year-end reconciliation and will be
paid within [REDACTED] days of receipt by Schering of the Pipeline Inventory
report for December 31, 1999.
Payment under (S)11.a shall be made in two (2) installments: [REDACTED] on May
15, 1999 and [REDACTED] on August 15, 1999. Payments under (S)11.b and (S)11.c
shall be made within [REDACTED] days of the end of the relevant quarter.
12. The Parties acknowledge and agree that the Year 2000 problem will
require (1) Pipeline adjustments and (2) the setting of new sales targets for
all Products to be detailed by Warner Chilcott in the year [REDACTED] under the
Agreement. The Parties agree to use reasonable commercial efforts to negotiate
which Products are to be Detailed by Warner Chilcott under the Agreement, during
calendar year [REDACTED], prior to [REDACTED].
13. It is understood and agreed by the Parties that, except as expressly
amended and supplemented hereby, all other terms of the Agreement shall remain
in full force and effect. This Amendment and the Agreement, together with any
subsequent amendments thereto, constitute the entire understanding of the
Parties. No modification of this Amendment shall be binding upon either Party
unless approved in writing by an authorized representative of each of the
Parties.
IN WITNESS WHEREOF, the parties have hereto affixed their authorized signatures
as of the date set forth below.
SCHERING CORPORATION WARNER CHILCOTT PLC
By: /s/ Richard Zahn By: /s/ Roger Boissoneault
---------------------------------- ---------------------
RICHARD ZAHN ROGER BOISSONNEAULT
President President & COO
Date: 5/10/99 Date: 5/10/99
-------------------------------- ---------
233654-2