EXECUTION COPY
CO-PROMOTION AGREEMENT
between
SMITHKLINE BEECHAM CONSUMER HEALTHCARE, L.P.
and
COLLAGENEX PHARMACEUTICALS, INC.
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 1
EXECUTION COPY
CO-PROMOTION AGREEMENT
between
SMITHKLINE BEECHAM CONSUMER HEALTHCARE, L.P.
and
COLLAGENEX PHARMACEUTICALS, INC.
1. DEFINITIONS..............................................
2. APPOINTMENT..............................................
3. DUTIES OF THE PARTIES....................................
3.1. ROMOTION OF DENAVIR(R)..........................
3.2. SALES TRAINING..................................
3.3. SAMPLES.........................................
3.4 OVERSIGHT TEAM..................................
4. COMPENSATION.............................................
5. TRADEMARKS...............................................
6. CLINICAL TRIALS..........................................
7. COMMUNICATIONS...........................................
8. ADVERSE EXPERIENCE REPORTING AND
REGULATORY MATTERS.....................................
9. MISCELLANEOUS............................................
10. RETURN/RECALL............................................
11. FORCE MAJEURE............................................
12. SECRECY AND NON-USE......................................
13. TERM AND TERMINATION.....................................
14. RECORDKEEPING PROVISIONS.................................
15. WARRANTIES, REPRESENTATIONS, INSURANCE AND
INDEMNIFICATIONS.......................................
16. WAIVER/MODIFICATION......................................
17. HEADINGS.................................................
18. GOVERNING LAW............................................
19. SEPARABILITY.............................................
20. ENTIRE AGREEMENT.........................................
21. NOTICE...................................................
22. DISPUTE RESOLUTION.......................................
23. PUBLIC ANNOUNCEMENTS.....................................
24. ASSIGNMENT...............................................
25. EXECUTION IN COUNTERPARTS................................
SIGNATURES...............................................
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 2
EXECUTION COPY
CO-PROMOTION AGREEMENT
SMITHKLINE BEECHAM CONSUMER HEALTHCARE, L.P.-COLLAGENEX
PHARMACEUTICALS, INC.
THIS CO-PROMOTION AGREEMENT (hereinafter "AGREEMENT"), effective as of
October 13, 1998 (hereinafter "EFFECTIVE DATE"), is entered into by CollaGenex
Pharmaceuticals, Inc., a company organized and existing under the laws of the
state of Delaware, U.S.A., and having its principal office at 301 South State
Street, Newtown, Pennsylvania 18940 (hereinafter "COMPANY"), and SmithKline
Beecham Consumer Healthcare, L.P., a Delaware limited partnership having its
principal office at 100 Beecham Drive, Pittsburgh, PA 15230 (hereinafter "SB").
WHEREAS, the COMPANY desires to obtain the right from SB to engage in
the direct PERSONAL SELLING (as hereinafter defined) and PROMOTION (as
hereinafter defined) in the TERRITORY (as hereinafter defined) of DENAVIR(R) (as
hereinafter defined) to TARGET PRESCRIBERS (as hereinafter defined); and
WHEREAS, SB desires to grant COMPANY such right for a certain period of
time on the terms and conditions set forth in this AGREEMENT;
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, and otherwise to be bound
by proper and reasonable conduct, the parties agree as follows
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 3
EXECUTION COPY
1. DEFINITIONS
1.1 "AFFILIATE(S)" shall mean any corporation, firm, partnership or other
entity, whether de jure or de facto, which directly or indirectly owns,
is owned by or is under common ownership with a party to this AGREEMENT
where "owns" or "ownership" means possession of at least 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 the
entity and any person, firm, partnership, corporation or other entity
actually controlled by, controlling or under common control with a
party to this AGREEMENT.
1.2 "AGENCY(IES)" shall mean any and all state and federal governmental
regulatory authority(ies) in the TERRITORY responsible for granting
approvals for the sale of pharmaceutical products, including, without
limitation, DENAVIR(R).
1.3 "PERSONAL SALE" shall mean a face-to-face meeting, in an individual or
group practice setting, between a TARGET PRESCRIBER, and a professional
sales representative of COMPANY, as documented by COMPANY's call
reporting system, during which a MAJOR PRESENTATION of DENAVIR(R) is
made to such health care professional, provided that for any such
meeting to be within the scope of the term `PERSONAL SALE', no more
than two (2) MAJOR PRESENTATIONS and, when appropriate, one minor
presentation of Periocheck (a chair-side assay that tests for the
presence of neutral protease enzymes) may be carried out. When used as
a verb, "PERSONAL SELLING" shall mean to engage in a PERSONAL SALE.
1.4 "DENAVIR(R)" shall mean SB's prescription brand of penciclovir cream,
in all dosage forms and package configurations, and all prescription
indications for which SB has received all requisite marketing approvals
from the AGENCIES as of the EFFECTIVE DATE, or receives during the TERM
OF THE AGREEMENT. For the avoidance of doubt, the term "DENAVIR(R)"
shall not include penciclovir cream, in any dosage form or package
configuration, for any over-the-counter indications.
1.5 "DENAVIR(R) PROMOTION INITIATION DATE " shall mean the date, as
confirmed by COMPANY in writing to SB, of COMPANY's commencement of
PERSONAL SELLING and PROMOTION of DENAVIR(R) in the TERRITORY to TARGET
PRESCRIBERS, provided such commencement is on or before the date set
forth in paragraph 3.1.3.
1.6 "DENAVIR(R) PRESCRIPTION BASELINE" shall mean, for any particular
period, the number of prescriptions of DENAVIR(R) attributable to
TARGET PRESCRIBERS which are projected to be generated as a result of
SB marketing tactics during such period and seasonal and historical
business trends. For the first PROMOTION PERIOD, the DENAVIR(R)
PRESCRIPTION BASELINE shall be equal to * prescriptions of
DENAVIR(R). DENAVIR(R) PRESCRIPTION BASELINE for additional PROMOTION
PERIODS, if any, shall be mutually agreed upon by the parties. The
calculation of the
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 5
* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission.
EXECUTION COPY
DENAVIR(R) PRESCRIPTION BASELINE for the first PROMOTION PERIOD is
attached hereto as Appendix A.
1.7 "GROSS PRESCRIPTIONS" shall mean, for any particular time period, the
number of prescriptions for DENAVIR(R) which are attributable to TARGET
PRESCRIBERS for the particular time period, as reported to SB by the
NDC Monthly Prescriber by Specialty Report, or such other third party
reporting system mutually agreed upon by the parties.
1.8 "INCREMENTAL RX" shall mean, for any particular time period, GROSS
PRESCRIPTIONS during such time period minus the DENAVIR(R) PRESCRIPTION
BASELINE for such time period (as determined in accordance with
Paragraph 1.6).
1.9 "PERIOSTAT(R)" shall mean COMPANY's brand of doxycycline, in all dosage
forms and package configurations, and all indications for which COMPANY
may receive all requisite marketing approvals from the AGENCIES prior
to or during the TERM OF THE AGREEMENT.
1.10 "MAJOR PRESENTATION" shall mean a full pharmaceutical product
presentation during which key attributes of such product, including
without limitation safety and efficacy, are verbally presented.
1.11 "PROMOTION" shall mean those activities normally undertaken by a
pharmaceutical company's sales force to implement marketing plans and
strategies aimed at encouraging the appropriate use of a particular
prescription pharmaceutical product. When used as a verb, "PROMOTE"
shall mean to engage in such activities.
1.12 "PROMOTION PERIOD" shall mean a period of time established in
accordance with this Agreement. The first PROMOTION PERIOD shall be the
period of time following the DENAVIR(R) PROMOTION INITIATION DATE
through March 31, 1999. Subsequent PROMOTION PERIODS, if any, shall be
mutually agreed upon by the parties.
1.13 "TARGET PRESCRIBERS: shall mean board eligible/certified dentists.
1.14 "TERM OF THE AGREEMENT" shall mean the period of time beginning on the
EFFECTIVE DATE and ending March 31, 1999, unless extended in accordance
with Paragraph 13.1.
1.15 "TERRITORY" shall mean the fifty (50) states of the United States of
America and the District of Columbia.
1.16 "THIRD PARTY(IES)" shall mean any party other than a party to this
AGREEMENT or an AFFILIATE.
2. APPOINTMENT
2.1 During the TERM OF THE AGREEMENT, SB grants COMPANY the right to
directly PROMOTE and conduct PERSONAL SELLING of DENAVIR(R) to TARGET
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 5
EXECUTION COPY
PRESCRIBERS in the TERRITORY, in accordance with the terms and
conditions set forth in this AGREEMENT. For the avoidance of doubt,
COMPANY shall have no rights to PROMOTE or conduct PERSONAL SELLING of
DENAVIR(R) as an over-the-counter product pursuant to this AGREEMENT.
3. DUTIES OF THE PARTIES
---------------------
3.1 PROMOTION OF DENAVIR(R)
3.1.1 During the TERM OF THE AGREEMENT after the DENAVIR(R)
PROMOTION INITIATION DATE, COMPANY shall diligently PROMOTE
and conduct PERSONAL SELLING of DENAVIR(R) to TARGET
PRESCRIBERS in the TERRITORY. COMPANY warrants and represents
that any professional sales representatives (or equivalents
thereof) used by COMPANY to PROMOTE DENAVIR(R) to TARGET
PRESCRIBERS, in furtherance of this AGREEMENT, shall do so
solely in accordance with the provisions of this AGREEMENT.
3.1.1.1 During the TERM OF THE AGREEMENT, the position of the
MAJOR PRESENTATION of DENAVIR(R) during all PERSONAL
SALES to TARGET PRESCRIBERS shall be either in the
first or in the second position.
3.1.1.2 Notwithstanding Paragraph 3.1.1.1, COMPANY will
employ its expertise, best professional judgment, and
working relationship with TARGET PRESCRIBERS, in the
TERRITORY to ensure that its professional sales force
positions DENAVIR(R) to ensure maximum prescription
generation within each PERSONAL SALE.
3.1.2 During the TERM OF THE AGREEMENT after the DENAVIR(R)
PROMOTION INITIATION DATE, COMPANY's management of its
professional representatives shall reflect its commitment to
the PROMOTION of DENAVIR(R) to TARGET PRESCRIBERS, in the
TERRITORY as a major priority to COMPANY.
3.1.3 COMPANY shall commence PROMOTION and PERSONAL SELLING of
DENAVIR(R) to TARGET PRESCRIBERS in the TERRITORY no later
than one (1) week after COMPANY completes its launch/training
meeting for DENAVIR(R) to TARGET PRESCRIBERS in the TERRITORY.
The launch/training meeting of DENAVIR(R) is scheduled to be
held on October 13, 1998 in Philadelphia, PA (the "Launch
Meeting").
3.1.4 Except as specifically set forth herein, SB shall retain full
control of all activities with respect to DENAVIR(R),
including, without limitation, all regulatory, clinical,
marketing, distribution and manufacturing matters. In
particular, SB shall retain full control of the following
matters:
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 6
EXECUTION COPY
3.1.4.1 The types of promotional materials and literature
(including quantities) and other support that will be
provided by SB, provided that such support shall be
in accordance with Paragraph 3.1.5.
3.1.4.2 The quantity and timing of distribution of samples of
DENAVIR(R) to be used by COMPANY to PROMOTE
DENAVIR(R) to TARGET PRESCRIBERS in the TERRITORY,
provided that such support shall be in accordance
with Paragraph 3.1.3; and
3.1.4.3 The guidelines for the use of promotional materials
and literature by COMPANY's professional sales force
in their PERSONAL SELLING and PROMOTION of DENAVIR(R)
to TARGET PRESCRIBERS in the TERRITORY.
3.1.5 All promotional materials, literature and samples to be used
by COMPANY in the TERRITORY in connection with the PROMOTION
of DENAVIR(R) to the TARGET PRESCRIBERS shall be supplied to
COMPANY by SB. The parties shall share the costs and expenses
for the production of promotional materials and literature in
accordance with Paragraph 3.1.12. The storage by COMPANY and
distribution of such promotional materials and literature to
COMPANY's professional representatives shall be at COMPANY's
expense. Sample storage and distribution will be handled in
accordance with Paragraph 3.3.
3.1.5.1 The determination of the content of the promotional
materials and literature related to DENAVIR(R) to
TARGET PRESCRIBERS in the TERRITORY shall be solely
within the control of SB. The quantity and the method
of distribution of such materials shall be mutually
agreed upon by the parties; provided that in no event
shall such materials be distributed to COMPANY less
often than SB's standard promotional cycles for such
materials. SB shall periodically provide guidelines
to COMPANY concerning the distribution of such
materials to TARGET PRESCRIBERS. The parties agree to
discuss in good faith the desirability of having the
names and logos of both SB and COMPANY appear on
certain promotional materials.
3.1.5.2 In connection with the PERSONAL SELLING and PROMOTION
of DENAVIR(R) to TARGET PRESCRIBERS in the TERRITORY,
COMPANY warrants and represents that (a) it and its
professional sales representatives shall use only
promotional materials, literature, and samples
provided by SB under this AGREEMENT, (b) such
materials, literature, and samples shall be used by
COMPANY only for the purposes of this AGREEMENT, (c)
all materials, literature and samples which are not
used during the TERM OF THE AGREEMENT shall be
returned to SB as soon as practicable after the
expiration or termination of this AGREEMENT, and (d)
any promotional material, promotional
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 7
EXECUTION COPY
literature, and samples supplied by SB shall not be
misbranded, changed, altered or adulterated prior to
their distribution by COMPANY or its professional
sales representatives. All copyright and other
intellectual property rights as well as any other
rights and interests with respect to such materials,
literature and samples shall remain vested in SB.
3.1.6 COMPANY hereby warrants and represents that, in the course of
its PERSONAL SELLING and PROMOTION of DENAVIR(R) to TARGET
PRESCRIBERS in the TERRITORY, it will (a) limit its claims of
efficacy and safety for DENAVIR(R) to those which are
consistent with SB's approved product circular for DENAVIR(R),
(b) not delete or modify claims of efficacy and safety in the
PROMOTION of DENAVIR(R) so that they are different in any way
from those which are contained in SB's approved product
circular for DENAVIR(R), or make any changes in promotional
materials and literature provided by SB, and (c) PROMOTE and
make PERSONAL SALES of DENAVIR(R) to TARGET PRESCRIBERS in the
TERRITORY in strict adherence to regulatory, professional, and
legal requirements and the American Medical Association Gifts
to Physicians From Industry Guidelines.
3.1.7 COMPANY further warrants and represents that, in connection
with its PERSONAL SELLING and PROMOTION of DENAVIR(R) to
TARGET PRESCRIBERS in the TERRITORY, it shall comply with all
of the applicable state and federal laws and regulations of
the TERRITORY, and shall not knowingly or negligently do
anything which will jeopardize the goodwill or reputation of
DENAVIR(R).
3.1.8 The professional representatives of COMPANY who are utilized
by COMPANY in accordance with this AGREEMENT shall remain
exclusively under the authority of COMPANY's field sales
management. Except as otherwise provided in Paragraphs 3.1 and
3.2, COMPANY shall have full responsibility for the
dissemination of information for the PERSONAL SELLING and
PROMOTION of DENAVIR(R) to TARGET PRESCRIBERS in the TERRITORY
to its professional sales representatives based on information
provided to COMPANY by SB under this AGREEMENT.
3.1.9 The parties shall cooperate in conventions and related
educational activities, when such cooperation would be
mutually beneficial, for the PROMOTION of DENAVIR(R) to TARGET
PRESCRIBERS in the TERRITORY where effective synergies can be
attained, as mutually agreed upon by the parties. The funding
of expenses related to such activities will be apportioned
between the parties pursuant to terms to be mutually agreed
upon.
3.1.10 SB shall have the sole right and responsibility for
establishing and modifying the terms and conditions with
respect to the sale of DENAVIR(R) in the TERRITORY, including
the selling price, as well as any terms and conditions
relating to or
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 8
EXECUTION COPY
affecting the price at which DENAVIR(R) will be sold, any
discount attributable to payments on receivables, distribution
of DENAVIR(R) in the TERRITORY, credit to be granted or
refused, and the like.
3.1.11 All sales of DENAVIR(R) in the TERRITORY, including those
attributable to TARGET PRESCRIBERS, shall be booked by SB.
3.1.12 SB shall be responsible for the costs and expenses related to
the production of promotional material, literature, and sales
aids for the PERSONAL SALES reasonably expected to be
conducted in the period from the EFFECTIVE DATE through
December 31, 1998. Thereafter, the parties shall equally share
the costs and expenses related to the production of
promotional material, literature, sales aids; provided that
neither party shall be obligated to contribute more than
$50,000 in the aggregate toward such costs and expenses for
the remainder of the first PROMOTION PERIOD, unless otherwise
agreed upon by the parties.
3.2 SALES TRAINING
3.2.1 COMPANY shall pay for all expenses incurred by COMPANY which
are associated with the Launch Meeting and all subsequent
training meetings for its professional representatives, except
as otherwise provided in Paragraph 3.2.2. SB shall bear all
expenses incurred by SB which are associated with its
participation in the Launch Meeting.
3.2.2 SB shall, at its expense, provide the COMPANY's current sales
representatives with promotional training regarding the
PERSONAL SELLING and PROMOTION of DENAVIR(R) to TARGET
PRESCRIBERS in the TERRITORY at the Launch Meeting, provided
that such training shall be at the same level of product
training as that which would be provided to SB's own sales
representatives who have previous professional pharmaceutical
sales experience. After the Launch Meeting, SB shall provide
promotional training of newly hired COMPANY sales
representatives regarding the PERSONAL SELLING and PROMOTION
of DENAVIR(R) at regularly scheduled meetings that SB has
organized for its own sales force. COMPANY shall bear all
travel and living expenses incurred by COMPANY related to all
such training of its professional sales representatives.
3.2.3 During the TERM OF THE AGREEMENT, COMPANY shall obtain all
training materials it may reasonably require related to the
promotion of DENAVIR(R) to TARGET PRESCRIBERS in the TERRITORY
from SB The training materials used by SB in the training of
COMPANY sales representatives in accordance with Paragraphs
3.2.1 and 3.2.2 shall be provided to COMPANY at SB's expense.
3.2.4 During the TERM OF THE AGREEMENT, COMPANY shall train their
sales representatives and clinical safety representatives on
the collection of data for
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 9
EXECUTION COPY
Adverse Experiences (as defined in Paragraph 8.1), and the
reporting thereof to SB, in accordance with the procedures and
timelines set out in Article 8.
3.3 SAMPLES
3.3.1 Samples of DENAVIR(R) to be used by COMPANY under this
AGREEMENT shall be sent to COMPANY or its designees at the
expense (internally charged standard unit cost plus shipping
and handling) of SB. The storage and distribution of such
samples to professional representatives shall be at COMPANY's
expense.
3.3.2 COMPANY shall receive amounts of such samples as determined by
SB, and at appropriate intervals which reasonably comply, to
the extent possible, with both SB's and COMPANY's shipping
schedules. SB shall periodically provide COMPANY with
guidelines concerning the distribution of samples to TARGET
PRESCRIBERS.
3.3.3 COMPANY warrants and represents that it shall establish,
maintain and adhere to written procedures to assure that
COMPANY's receipt, storage and distribution of samples, and
all of its professional sales representatives to whom such
samples are distributed, comply with all requirements of the
AGENCIES including the Prescription Drug Marketing Act of 1987
(as such may be subsequently modified), as well as reasonable
compliance with the U.S. Food and Drug Administration's
proposed regulations, published at 59 Fed. Reg. p11842, March
14, 1994. Specifically, such procedures shall include a
requirement that COMPANY shall notify SB immediately upon
learning that any samples shipped by SB to COMPANY have been
lost or have not been received as scheduled. Furthermore, such
procedures shall include a requirement that COMPANY shall be
responsible for reporting directly to the relevant AGENCY any
known thefts or significant losses of samples, as such is
required by AGENCY policy or regulation, and COMPANY shall
promptly provide SB with a complete copy of any such report.
In the event that COMPANY or any of its professional
representatives fails to comply or causes SB to fail to comply
with any of the requirements of the Prescription Drug
Marketing Act of 1987 (as such may be subsequently modified)
and a civil penalty is assessed against SB or any of its
AFFILIATES or employees, then COMPANY shall hold harmless and
indemnify SB, its AFFILIATES and their officers, directors,
shareholders, employees, successors and assigns from and
against any such civil penalty or other damages or losses
related thereto, including attorneys' fees.
3.3.4 Upon reasonable advance notice to COMPANY, SB shall be
entitled, at SB's expense, to conduct an inspection and audit
of COMPANY's sample allocation at any of COMPANY's owned or
controlled facilities where samples of DENAVIR(R) received
from SB under this AGREEMENT are stored. The purpose of such
inspection and audit shall be solely to ensure compliance with
the applicable provisions of the Prescription Drug Marketing
Act of 1987 (as such
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 10
EXECUTION COPY
may be subsequently modified) and with the provisions of this
AGREEMENT, as well as to copy records relating to sample
receipt, storage and distribution.
3.3.5 Upon the termination or expiration of the AGREEMENT, COMPANY
shall promptly return, at COMPANY'S expense, to SB's
designated distribution center, any samples of DENAVIR(R)
received by COMPANY from SB under this AGREEMENT which are
still in its or its sales representatives possession.
3.3.6 The parties understand and acknowledge that COMPANY does not
currently have the procedures in place to receive, store
and/or distribute samples to TARGET PRESCRIBERS in accordance
with the terms of this Agreement. Therefore, until such time
as COMPANY is able to receive, store and/or distribute samples
to TARGET PRESCRIBERS in accordance with the terms of this
Agreement, COMPANY shall not be required to do so; provided,
however, that COMPANY agrees to use good faith efforts to be
able to receive, store and distribute samples to TARGET
PRESCRIBERS in accordance with the terms of this Agreement
prior to January 1, 1999.
3.4 OVERSIGHT TEAM
3.4.1 Within fifteen (15) days following the EFFECTIVE DATE, the
parties shall form a team which shall have oversight
responsibility for the parties' performance of their
respective obligations under this AGREEMENT. The team shall be
known as the "Oversight Team", and it shall be composed of, at
least, a product manager representative from each party
("Product Manager"). The Product Manager for each party shall
be the point person for such party with respect to all
activities related to the training, PROMOTION and PERSONAL
SELLING of DENAVIR(R) under this AGREEMENT, including
assisting sales training personnel and product and sales
management teams. The Product Managers shall meet
periodically, as often as is necessary, formally or
informally, with face-to-face meetings alternating between SB
facilities and COMPANY facilities, provided that the first
such meeting shall be held no later than thirty (30) days
after the EFFECTIVE DATE. Each party may replace its Product
Manager at any time, upon at least one (1) week's prior
written notice to the other party.
4. COMPENSATION
4.1 SB shall pay COMPANY compensation during each PROMOTION PERIOD
according to the following procedure. The DENAVIR(R)
PRESCRIPTION BASELINE applicable to such PROMOTION PERIOD
shall be subtracted from the amount of GROSS PRESCRIPTIONS for
such PROMOTION PERIOD, and COMPANY shall be entitled to an
amount equal to INCREMENTAL RX multiplied by * .
4.2 For the first PROMOTION PERIOD, SB shall pay COMPANY the
payments outlined in Paragraph 4.1 within sixty (60) days
after the end of the first PROMOTION PERIOD. For any
subsequent PROMOTION PERIODS (if any) during the TERM OF THE
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 11
* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission.
EXECUTION COPY
AGREEMENT, SB shall pay COMPANY the payments outlined in
Paragraph 4.1 in quarterly installments, each installment to
be paid within sixty (60) days after the end of the quarter.
4.3 In the event that the first PROMOTION PERIOD does not commence
until after November 1, 1998, the DENAVIR(R) PRESCRIPTION
BASELINE for such period shall be proportionally reduced to
reflect the reduced period of time of the first PROMOTION
PERIOD, as mutually agreed upon by the parties.
4.4 In the event this AGREEMENT is terminated prior to the
completion of any PROMOTION PERIOD, the amount of compensation
that SB will be obligated to pay COMPANY shall be based upon
an adjusted DENAVIR(R) PRESCRIPTION BASELINE that reflects the
reduced term of the PROMOTION PERIOD. In particular, the
DENAVIR(R) PRESCRIPTION BASELINE and GROSS PRESCRIPTIONS for
the abbreviated PROMOTION PERIOD shall be appropriately
reduced based on the actual number of months that have elapsed
during the PROMOTION PERIOD as compared to the number of
months in the original PROMOTION PERIOD.
4.5 In the event SB terminates this AGREEMENT pursuant to
Paragraph 13.4 below, SB shall be obligated to pay COMPANY
compensation for an additional one month period following the
effective date of such termination. Such compensation shall be
calculated in accordance with this Section 4.
5. TRADEMARKS
5.1 DENAVIR(R) shall be PROMOTED and PERSONAL SALES shall be made
by COMPANY to TARGET PRESCRIBERS in the TERRITORY under the
trademark "DENAVIR(R)", which trademark is owned by SB.
5.2 This AGREEMENT does not constitute a grant of any property
right or interest to COMPANY, by license or otherwise, in
DENAVIR(R) or in any other trademarks owned by SB or any
AFFILIATE, or to use any such trademark for any purpose,
except to the extent that such use is necessary to enable
COMPANY to PROMOTE and make PERSONAL SALES of DENAVIR(R) in
accordance with this AGREEMENT. COMPANY hereby expressly
acknowledges its recognition of the validity of the title of
SB or its AFFILIATES to the trademarks and trade names in the
TERRITORY used by SB or its AFFILIATES in connection with
DENAVIR(R), whether registered or not. SB shall own all such
trademarks and trade names and shall retain such ownership
upon termination or expiration of this AGREEMENT
5.3 COMPANY shall not undertake any action in respect of the
registration, renewal, or infringement of SB's trademarks or
trade names without SB's written consent.
6. CLINICAL TRIALS
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 12
EXECUTION COPY
6.1 During the TERM OF THE AGREEMENT, COMPANY shall not conduct or
commission pre-clinical, clinical, or other studies and/or
trials with respect to DENAVIR(R).
7. COMMUNICATIONS
7.1 COMPANY shall promptly communicate to SB all material
comments, requests and inquiries of the medical profession or
any other THIRD PARTIES and all information relating to
DENAVIR(R), including without limitation, market and safety
information, within the TERRITORY, of which it becomes aware.
All responses to the medical profession or such other THIRD
PARTIES shall be handled solely by SB. The parties shall
cooperate with one another to the extent necessary to fully
respond to such communications.
7.2 The parties shall assist one another (as requested) with
respect to communications from AGENCIES. All communications
with AGENCIES concerning DENAVIR(R), including, without
limitation, all communications related to adverse reaction
reporting, shall be the sole responsibility of SB. The parties
shall fully cooperate with one another to the extent necessary
to fully respond to such communications.
7.3 COMPANY shall promptly notify SB of market, economic,
regulatory and other developments of which COMPANY becomes
aware which may affect the sale of DENAVIR(R) to TARGET
PRESCRIBERS in the TERRITORY. SB shall promptly notify COMPANY
of any Adverse Experiences (as defined in Paragraph 8 below)
of which it becomes aware.
8. ADVERSE EXPERIENCE REPORTING AND REGULATORY MATTERS
8.1 The term "Adverse Experience(s)" as used in this Article 8
shall mean any noxious, pathological or unintended change in
anatomical, physiological or metabolic function as indicated
by physical signs, symptoms and/or laboratory changes
occurring in clinical trials, post-marketing surveillance, or
clinical practice during use of DENAVIR(R), or published in
the medical literature, whether or not considered causally
related to the DENAVIR(R). This includes an exacerbation of a
pre-existing condition, intercurrent illness, drug
interaction, significant worsening of a disease under
investigation or treatment, and significant failure of
expected pharmacological or biological action.
8.2 With respect to Adverse Experiences, the following shall apply
in all circumstances:
(a) During the TERM OF THE AGREEMENT SB will have exclusive
responsibility and authority to report Adverse Experiences reported to
it in respect of DENAVIR(R) to the appropriate AGENCIES in the TERRITORY
in accordance with the laws and regulations thereof.
(b) An Adverse Experience will be considered 'serious' if it is any
one or more of the following, i.e., fatal, life threatening, persistent
or significant disability or
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 13
EXECUTION COPY
incapacity, results in hospitalization or prolongation of
hospitalization, a congenital abnormality/birth defect, a carcinoma, or
an overdose. In addition, any Adverse Experience which suggests a
significant hazard, contraindication, side effect, precaution or
requires surgical intervention to prevent one of the outcomes listed
above that may be associated with the use of DENAVIR(R) will be
considered a serious Adverse Experience.
(c) All Adverse Experience reports and queries for SB should be
addressed to SmithKline Beecham Product Information, Attention: Roya
Behbahani FP 1015, One Franklin Plaza, Philadelphia, PA 19101 (phone
800-366-8900 x6337) (fax 1-215-751-3148) and for COMPANY should be
addressed to Mary Granados, Collagenex Pharmaceuticals, Inc., 301
South State Street, Newtown, Pennsylvania 18940 (phone 1-888-339-5678)
(fax 1-770-693-9300), or such other safety representative as may be
designated by SB for SB or by COMPANY for COMPANY.
(d) The local U.S. safety department of each party will report
to the local U.S. safety department of the other party all Adverse
Experiences reported to it in respect of DENAVIR(R) as follows:
(i) fatal unexpected and life-threatening unexpected Adverse
Experiences by telephone or facsimile within one (1) calendar day of
receipt;
(ii) all other serious Adverse Experiences in writing within five
(5) calendar days of receipt;
(iii) a summary of all Adverse Experiences, serious and non-
serious, in writing on a monthly basis, indicating those cases which
have previously been reported to the other party.
Further information received on any serious Adverse Experience (or any
information which changes an Adverse Experience from non-serious to
serious) will also be reported to the other party within one (1) or
five (5 ) calendar days of receipt by the central safety department,
according to the above criteria.
8.3 The parties agree throughout the duration of this AGREEMENT to maintain
records and otherwise establish procedures to assure compliance with
all regulatory, professional, and other legal requirements which apply
the promotion and marketing of DENAVIR(R).
9. MISCELLANEOUS
9.1 SB shall be exclusively responsible for accepting and filling purchase
orders, billing, and returns with respect to DENAVIR(R), except as
otherwise provided in Paragraph 10.1. COMPANY shall immediately direct
any inquiries related to orders or matters related thereto it receives
for DENAVIR(R) to SB for acceptance or rejection, which acceptance or
rejection shall be at SB's sole discretion.
9.2 The appointment of COMPANY under Article 2 shall not create a joint
venture, or an employer-employee relationship or a principal-agent
relationship other than as
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 14
EXECUTION COPY
specifically provided in this AGREEMENT, with respect to terms and
conditions of the PROMOTION and PERSONAL SELLING of DENAVIR(R) to
TARGET PRESCRIBERS in the TERRITORY.
9.3 Nothing in this AGREEMENT shall be deemed to authorize either party to
act for, represent, or bind the other party or any of its AFFILIATES
other than as specifically provided by this AGREEMENT.
9.4 Neither party shall have any responsibility for the hiring, firing,
compensation or benefits of the other party's employees. No employee or
representative of a party shall have any authority to bind or obligate
the other party to this AGREEMENT for any sum or in any manner
whatsoever, or to create or impose any contractual or other liability
on the other party without said party's authorized written approval.
10. RETURN/RECALL
10.1 Any DENAVIR(R) or DENAVIR(R) related items returned to COMPANY shall be
shipped by COMPANY to SB's facility identified by SB as the point for
receiving returned goods, with any reasonable or authorized shipping or
other documented direct cost to be paid by SB.
10.2 At SB's request, COMPANY will promptly assist SB in obtaining and
receiving any samples of DENAVIR(R) or DENAVIR(R) related items that
have been recalled, and any reasonable and necessary direct documented
costs incurred by COMPANY with respect to participating in such recall
shall be reimbursed by SB.
11. FORCE MAJEURE
11.1 Neither of the parties shall be liable or be in breach of any provision
of this AGREEMENT for any failure or omission on its part to perform
any obligation because of force majeure, including, but not limited to
war, riot, fire, explosion, flood, sabotage, accident or breakdown of
machinery; unavailability of fuel, labor, containers or transportation
facilities; accidents of navigation or breakdown or damages of vessels,
or other conveyances for air, land or sea; other impediments or
hindrances to transportation; strike or other labor disturbances; or
any other cause beyond the control of the party; and provided that such
failure or omission resulting from one of the above causes is cured as
soon as practicable after the occurrence of one or more of the
above-mentioned.
12. SECRECY AND NON-USE
12.1 All confidential information which is received by either party from the
other party during the TERM OF THE AGREEMENT shall be maintained in
strict confidence by the receiving party. All confidential information
whether generated by SB or COMPANY shall be disclosed only to SB or
COMPANY employees and consultants who have been instructed to treat
such information in strict confidence and on a "need-to-know" basis.
This information shall be protected from disclosure to THIRD PARTIES
with at least the
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 15
EXECUTION COPY
same degree of care used by such employees when dealing with their
employer's confidential information, but in no event less than
reasonable care. Further, such information shall not be disclosed to
any other person, firm, or AGENCY, governmental or private, or used for
purposes other than set forth herein, without the prior written consent
of the disclosing party except to the extent that the information:
12.1.1 is known at the time of its receipt by the receiving party and
is documented in its tangible records, or
12.1.2 is properly in the public domain, or
12.1.3 is subsequently disclosed to the receiving party by a THIRD
PARTY who may lawfully do so, or
12.1.4 is independently developed by the receiving party, or
12.1.5 is required by law or regulation to be disclosed to
governmental agencies.
This provision shall survive termination of this AGREEMENT for a period
of five (5) years.
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 16
EXECUTION COPY
12.2 Upon termination or expiration of this AGREEMENT, and upon the request
of the disclosing party, the receiving party shall return all such
information and copies thereof in its possession, except that the
receiving party may keep one copy of such information in its legal
department confidential files solely for archival purposes. Such
archival copy will be deemed to be the confidential information of the
disclosing party, and will not be copied or distributed in any manner
without the express prior written permission of the disclosing party,
except as otherwise provided in Paragraph 12.1.
13. TERM AND TERMINATION
13.1 The TERM OF THE AGREEMENT is as defined in Paragraph 1.14, and the
AGREEMENT shall expire upon the expiration of the period outlined in
Paragraph 1.14 unless the parties mutually agree, in writing, to extend
the TERM OF THE AGREEMENT in accordance with Paragraph 13.6. The
AGREEMENT may be terminated earlier than the expiration of the TERM OF
THE AGREEMENT as provided in this Article 13.
13.2 Notwithstanding Paragraph 13.3 below, SB may terminate the AGREEMENT at
any time, upon five (5) days written notice, if SB reasonably
determines that COMPANY has breached any warranty or representation
made by COMPANY under this AGREEMENT, including, without limitation,
those outlined in Paragraphs 3.1.1, 3.1.5.2, 3.1.6, 3.1.7, or if SB
reasonably determines that COMPANY is otherwise acting illegally in the
manner in which it is PERSONAL SELLING or PROMOTING DENAVIR(R) in the
TERRITORY, or if SB reasonably determines that COMPANY is interfering
with SB's rights under Paragraph 3.1.10.
13.3 If either party materially fails or neglects to perform material
covenants or provisions of this AGREEMENT and if such default is not
corrected within thirty (30) days after receiving written notice from
the other party with respect to such default, such other party shall
have the right to terminate this AGREEMENT by giving written notice to
the party in default provided the notice of termination is given prior
to correction of the default.
13.4 SB may terminate the AGREEMENT at any time by giving COMPANY at least
thirty (30) days written notice thereof for business or strategic
reasons, including, without limitation, in the event:
(a) DENAVIR(R) is approved by the appropriate AGENCIES for
sale in the TERRITORY as an over-the-counter product; or
(b) SB determines, in its sole discretion, to embark upon a
direct to consumer advertising effort for DENAVIR(R) in the TERRITORY;
or
(c) SB determines, in its sole discretion, to directly conduct
PERSONAL SALES and PROMOTE DENAVIR(R) to TARGET PRESCRIBERS in the
TERRITORY.
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 17
EXECUTION COPY
13.5 COMPANY may terminate the AGREEMENT at any time by giving SB at least
thirty (30) days written notice thereof for business or strategic
reasons.
13.6 In the event that the AGREEMENT expires in accordance with Paragraph
13.1, or is terminated by either SB or COMPANY in accordance with
Paragraphs 13.4 or 13.5, respectively, SB and COMPANY agree to discuss
in good faith for no more than thirty (30) days (or such longer or
shorter period as may be mutually agreed upon by the parties) the terms
and conditions of an arrangement pursuant to which the parties would
continue to work together to promote and/or market products to TARGET
PRESCRIBERS including, without limitation, DENAVIR(R) and PERIOSTAT(R);
provided, however, that it is expressly understood and agreed that
neither party shall be under any obligation to enter into such an
arrangement. The parties acknowledge and understand that the terms and
conditions of such an arrangement may be substantially different than
the terms of this AGREEMENT as a result of changes in circumstances,
including, without limitation, the approval of DENAVIR(R) by the
appropriate AGENCIES for marketing and sale in the TERRITORY as
over-the-counter product.
13.7 Either party may terminate this AGREEMENT if, at any time, the other
party shall file in any court or agency pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or
insolvency or for reorganization or for an arrangement or for the
appointment of a receiver or trustee of the party or of its assets, or
if the other party proposes a written agreement of composition or
extension of its debts, or if the other party shall be served with an
involuntary petition against it, filed in any insolvency proceeding,
and such petition shall not be dismissed with sixty (60) days after the
filing thereof, or if the other party shall propose or be a party to
any dissolution or liquidation, or if the other party shall make an
assignment for the benefit of creditors.
13.8 SB may terminate this AGREEMENT upon thirty (30) day written notice in
the event either party is the subject of a "Change of Control." For
purposes of this Paragraph, a "Change of Control" shall mean (i) the
sale or conveyance of all or substantially all of the party's property,
business or assets, whether tangible or intangible, or (ii) the merger
or consolidation with any other corporation (other than an AFFILIATE)
or (iii) the completion of any transaction or series of related
transactions in which more than fifty percent (50%) of the voting power
or equity interests of the party are disposed of.
13.9 During any period preceding the effective date of termination, each
party shall continue to diligently fulfill all obligations of this
AGREEMENT, which shall continue to apply during such period in
accordance with the provisions of this AGREEMENT.
13.10 The termination of this AGREEMENT shall not affect SB's obligations to
pay any amount owing to COMPANY which accrued prior to the effective
date of termination. Termination or expiration of this AGREEMENT shall
terminate all obligations and rights between the parties arising from
this AGREEMENT except those described in Article 12 and Paragraphs 4.5,
13.6, 13.10, 14.3, 15.2, 15.3, 15.4 and 15.5, as well as any other
provision which, by its terms, is stated to survive the termination or
expiration of this
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 18
EXECUTION COPY
AGREEMENT. In addition, any other provision required to interpret and
enforce the parties' rights and obligations under this AGREEMENT also
shall survive to the extent required for the full observation and
performance of this AGREEMENT by the parties hereto.
14. RECORDKEEPING PROVISIONS
14.1 As a courtesy, COMPANY agrees to use good faith efforts to submit to
SB, within twenty (20) days of the end of each month during the TERM OF
THIS AGREEMENT, an accounting of all PERSONAL SALES made by COMPANY
sales representatives for DENAVIR(R) to TARGET PRESCRIBERS in the
TERRITORY made during such month, and any other information in
COMPANY's possession which SB reasonably deems necessary regarding all
such PERSONAL SALES; provided, however, that is expressly understood
and agreed that failure of COMPANY to provide such reports to SB shall
not be deemed a material breach of this Agreement (so long COMPANY uses
good faith efforts to provide such reports). The PERSONAL SALES reports
shall be in a form mutually acceptable to both parties. In the event
SB, in good faith, believes that such information is inaccurate,
COMPANY and SB shall promptly meet to attempt to reach a mutually
acceptable conclusion on such matter. In the event the parties cannot
reach such mutually acceptable conclusion, SB may pursue its audit
option under Paragraph 14.2.
14.2 SB, at its expense, may request and COMPANY shall permit an
independent, certified public accountant, except one to whom COMPANY
has a reasonable objection, to have access during ordinary business
hours to COMPANY's records necessary to determine the correctness of
any data supplied to SB by COMPANY under Paragraph 14.1. Such
examination shall not take place more than once for each given
PROMOTION PERIOD.
14.3 SB shall keep accurate records in sufficient detail to enable the
amount due to COMPANY under Article 4 to be determined. In this regard,
SB shall submit to COMPANY, within sixty (60) days after the end of the
first PROMOTION PERIOD and after each quarter during each subsequent
PROMOTION PERIOD, if any, a statement of all GROSS PRESCRIPTIONS during
such period and the calculation of INCREMENTAL RX for such period. Upon
COMPANY's request, and at its expense, SB shall permit an independent,
certified public accountant, except one to whom SB has a reasonable
objection, to have access during ordinary business hours to SB's
records, but only to the extent necessary to determine the correctness
of any report or payment. Such examination shall not take place more
than once for any given PROMOTION PERIOD. These requests with respect
to any PROMOTION PERIOD shall terminate twelve (12) months after the
end of such PERIOD. No information other than a statement as to the
correctness of any report or payment shall be supplied to COMPANY by
such accountant. In the event of a determination by the independent,
certified public accountant that there has been an inaccurate report or
payment made hereunder, an appropriate adjustment shall be made to the
next payment due to COMPANY. In the event the audit reveals an
underpayment by SB of greater than five percent (5%), SB shall
reimburse COMPANY for the reasonable costs and expenses associated with
the audit.
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 20
EXECUTION COPY
15. WARRANTIES, REPRESENTATIONS, INDEMNIFICATIONS & INSURANCE
15.1 Each party warrants and represents to the other that it has the full
right and authority to enter into this AGREEMENT, and that it is not
aware of any impediment that would inhibit its ability to perform any
of its obligations under this AGREEMENT.
15.2 SB shall defend, indemnify and hold harmless COMPANY, its officers,
directors, shareholders, employees, successors and assigns from and
against all claims, complaints, or lawsuits for damages that arise (i)
as a result of the activities of any employee or agent of SB or anyone
acting on behalf of SB, such as any of its employees, agents or
representatives, including, but not limited to, negligence, malfeasance
or willful misconduct, (ii) as a result of personal injury, death or
tangible personal property damage that is alleged to have been caused
by or attributed to any DENAVIR(R) which is dispensed, utilized,
ingested, and/or administered in the TERRITORY, provided:
(a) SB shall not be obligated under this Paragraph if it is shown by
evidence acceptable in a court of law having jurisdiction over the
subject matter and meeting the appropriate degree of proof for such
action, that (i) the injury was the result of the performance by any
employee or agent of COMPANY or anyone acting on behalf of COMPANY, such
as any of its employees, agents or representatives, including, but not
limited to, negligence, malfeasance or willful misconduct, unless the
primary legal theory of the complaint is related to a product defect due
to a failure to inform and COMPANY has followed the training and
instructions provided by SB under this AGREEMENT, or (ii) the injury was
the result of the failure to adhere to the terms of this AGREEMENT by
any employee or agent of COMPANY or anyone acting on behalf of COMPANY,
such as any of its employees, agents or representatives, including, but
not limited to, negligence, malfeasance or willful misconduct, or (iii)
the injury was the result of a breach of any warranty or representation,
whether express or implied, made by COMPANY under this AGREEMENT;
(b) SB shall have no obligation under this Paragraph unless COMPANY
(i) gives SB prompt written notice of any claim or lawsuit or other
action for which it seeks to be indemnified under this AGREEMENT, (ii)
SB is granted full authority and control over the defense, including
settlement, against such claim or lawsuit or other action, and (iii)
COMPANY cooperates fully with SB and its agents in defense of the claims
or lawsuit or other action; and
(c) COMPANY shall have the right to participate in the defense of
any such claim, complaint, suit, proceeding or cause of action referred
to in this Paragraph utilizing attorneys of its choice, at its own
expense, provided, however, that SB shall have full authority and
control to handle any such claim, complaint, suit, proceeding or cause
of action, including any settlement or other disposition thereof, for
which COMPANY seeks indemnification under this Paragraph.
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 1
EXECUTION COPY
15.3 COMPANY shall defend, indemnify and hold harmless SB, its officers,
directors, shareholders, employees, successors and assigns from and
against all claims, complaints, or lawsuits for damages that arise (i)
as a result of the activities of any employee or agent of COMPANY or
anyone acting on behalf of COMPANY, such as any of its employees,
agents or representatives, including, but not limited to, negligence,
malfeasance or willful misconduct, or (ii) as a result of the failure
to adhere to the terms of this AGREEMENT by any employee or agent of
COMPANY or anyone acting on behalf of COMPANY, such as any of its
employees, agents or representatives, including, but not limited to,
negligence, malfeasance or willful misconduct, or (iii) as a result of
a breach of any warranty or representation, whether express or implied,
made by COMPANY under this AGREEMENT, provided that:
(a) COMPANY shall not be obligated under this Paragraph if it is
shown by evidence acceptable in a court of law having jurisdiction over
the subject matter and meeting the appropriate degree of proof for such
action, that the injury was the result of the performance by any
employee or agent of SB or anyone acting on behalf of SB, such as any of
its employees, agents or representatives, including, but not limited to,
negligence, malfeasance or willful misconduct;
(b) COMPANY shall have no obligation under this Paragraph unless SB
(i) gives COMPANY prompt written notice of any claim or lawsuit or other
action for which it seeks to be indemnified under this AGREEMENT, (ii)
COMPANY is granted full authority and control over the defense,
including settlement, against such claim or lawsuit or other action, and
(iii) SB cooperates fully with COMPANY and its agents in defense of the
claims or lawsuit or other action; and
(c) SB shall have the right to participate in the defense of any
such claim, complaint, suit, proceeding or cause of action referred to
in this Paragraph utilizing attorneys of its choice, at its own expense,
provided, however, that COMPANY shall have full authority and control to
handle any such claim, complaint, suit, proceeding or cause of action,
including any settlement or other disposition thereof, for which SB
seeks indemnification under this Paragraph.
15.4 Notwithstanding the provisions of Paragraphs 15.2 and 15.3, above, SB
and COMPANY agree and understand that, in the event of a claim,
complaint, suit, proceeding or cause of action brought against one
party containing allegations of liability based on activities for which
such party was responsible, such party shall control and bear financial
responsibility for its own defense; unless the other party agrees to
control and bear financial responsibility of such defense.
15.5 Immediately upon DENAVIR(R) PROMOTION INITIATION DATE, and for a period
of five (5) years after the expiration of this AGREEMENT or the earlier
termination thereof, each party shall obtain and/or maintain,
respectively, at its sole cost and expense, product liability insurance
in amounts, respectively, which are reasonable and customary in the
U.S. pharmaceutical industry for companies of comparable size and
activities at the
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 21
EXECUTION COPY
respective place of business of each party. Such product liability
insurance shall insure against all liability, including personal
injury, physical injury, or property damage arising out of the
manufacture, sale, distribution or marketing of DENAVIR(R) in the
TERRITORY. Each party shall provide written proof of the existence of
such insurance to the other party upon request.
16. WAIVER/MODIFICATION
16.1 Any term or condition of this AGREEMENT may be waived or modified at
any time by the party entitled to the benefit thereof by a written
instrument executed by both parties. No delay or failure on the part of
any party in exercising any rights hereunder and no partial or single
exercise thereof, will constitute a waiver of such rights or of any
rights hereunder.
17. HEADINGS
17.1 The headings used in this AGREEMENT are intended for guidance only and
shall not be considered part of the written understanding between the
parties hereto.
18. GOVERNING LAW
18.1 This AGREEMENT shall be construed and the respective rights of the
parties hereto determined according to substantive laws of the
Commonwealth of Pennsylvania notwithstanding the provisions governing
conflict of laws under such law to the contrary.
19. SEPARABILITY
19.1 In the event any portion of this AGREEMENT shall be held illegal, void
or ineffective, the remaining portions shall remain in full force and
effect.
19.2 If any of the terms or provisions of this AGREEMENT are in conflict
with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may
conflict therewith and shall be deemed to be modified to conform with
such statute or rule of law.
19.3 In the event that the terms and conditions of this AGREEMENT are
materially altered as a result of Paragraphs 19.1 or 19.2, the parties
will renegotiate the terms and conditions of this AGREEMENT to resolve
any inequities.
20. ENTIRE AGREEMENT
20.1 This AGREEMENT contains the entire agreement between the parties in
respect of the subject matter hereof and supersedes and cancels all
previous agreements, negotiations, commitments and writings between the
parties hereto in respect of the subject matter hereof and may not be
changed or modified in any manner or released, discharged, abandoned or
otherwise terminated unless in writing and signed by the duly
authorized officers or representatives of the parties.
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 22
EXECUTION COPY
21. NOTICE
21.1 Any notice or request required or permitted to be given in connection
with this AGREEMENT shall be deemed to have been sufficiently given if
sent by pre-paid registered mail or telecopier to the intended
recipient at the address set forth below or such other business address
as may have been furnished in writing by the intended recipient to the
sender. The date of mailing or telecopying shall be deemed to be the
effective date on which notice was given, provided that all telecopies
shall contain a provision requiring the intended recipient to confirm
receipt and such telecopy shall not be effective unless confirmation of
its receipt is received within twenty-four (24) hours of its
transmission.
Any notice required to be given to COMPANY shall be addressed to:
Collagenex Pharmaceuticals, Inc.
301 South State Street
Newtown, Pennsylvania 18940
Attention: President
Any notice required to be given to SB shall be addressed to:
SmithKline Beecham Consumer Healthcare
100 Beecham Drive
Pittsburgh, PA 15230
Attention: Director, Medical Sales
Copy to:
SmithKline Beecham Corporation
One Franklin Plaza (FP2360)
P.O. Box 7929
Philadelphia, Pennsylvania 19101
Attention: Corporate Legal
22. DISPUTE RESOLUTION
22.1 Any dispute, controversy or claim arising out of or relating to this
AGREEMENT (hereinafter collectively referred to as "Dispute") shall be
attempted to be settled by the parties, in good faith, by submitting
each such Dispute to the Oversight Committee in an effort to effect a
mutually acceptable resolution thereof. In the event no mutually
acceptable resolution is achieved within fourteen (14) calendar days
after submission to the Oversight Committee, then the Oversight
Committee shall submit each such Dispute to the President of SB's US
Consumer Healthcare (with a copy to SB's Corporate Legal Department)
and to the Office of President & CEO of COMPANY (with a copy to
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 23
EXECUTION COPY
COMPANY's legal department) in an effort to effect a mutually
acceptable resolution thereof. In the event no mutually acceptable
resolution is achieved within fourteen calendar (14) days after
submission to such persons, then each party shall be entitled to seek
relief for such Dispute by using any appropriate mechanism which may be
available, such as, but not limited to, judicial relief.
23. PUBLIC ANNOUNCEMENTS
23.1 No public announcement or other disclosure to THIRD PARTIES concerning
the existence of or terms of this AGREEMENT shall be made, either
directly or indirectly, by any party to this AGREEMENT, except as may
be legally required or as may be required for recording purposes,
without first obtaining the approval of the other party and agreement
upon the nature and text of such announcement or disclosure. The party
desiring to make any such public announcement or other disclosure shall
inform the other party of the proposed announcement or disclosure in
reasonably sufficient time prior to public release, and shall provide
the other party with a written copy thereof, in order to allow such
other party to comment upon such announcement or disclosure. Each party
agrees that it shall cooperate fully with the other with respect to all
disclosures regarding this AGREEMENT to the Securities Exchange
Commission and any other governmental or regulatory agencies, including
requests for confidential treatment of proprietary information of
either party included in any such disclosure. The parties agree that
the material financial terms of this Agreement are sensitive commercial
information for which confidential treatment should be obtained.
24. ASSIGNMENT
24.1 This AGREEMENT and the promotion rights herein granted shall be binding
upon and inure to the benefit of the successors in interest of the
respective parties. Neither this AGREEMENT nor any interest hereunder
shall be assignable (including by operation of law) by either party
without the prior written consent of the other; provided, however, that
SB may assign this AGREEMENT to any AFFILIATE, or to any corporation
with which it may merge or consolidate or to which it may transfer all
or substantially all of its assets to which this AGREEMENT relates,
without obtaining the consent of COMPANY.
25. EXECUTION IN COUNTERPARTS
25.1 This AGREEMENT may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 24
EXECUTION COPY
IN WITNESS WHEREOF, the parties have caused this AGREEMENT to be executed by
their duly authorized officers or representatives.
COLLAGENEX PHARMACEUTICALS, INC.
By: /s/ BM Gallagher
------------------------------------------
Title: President & CEO
---------------------------------------
SMITHKLINE BEECHAM CONSUMER HEALTHCARE, L.P., a Delaware Limited Partnership
By: /s/ Illegible
------------------------------------------
Title: VP & Director, Medical Marketing and Sales
-------------------------------------------
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 25
EXECUTION COPY
APPENDIX A
Calculation of the DENAVIR(R) PRESCRIPTION BASELINE for the first PROMOTION
PERIOD
S:\LAWBD\CALE\COLLAGEN\COPROM5.DOC Page 26