1
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
EXHIBIT 10.13
CO-PROMOTION AGREEMENT
BETWEEN
WOMEN FIRST HEALTHCARE
AND
ORTHO-XXXXXX PHARMACEUTICAL, INC.
2
TABLE OF CONTENTS
CO-PROMOTION AGREEMENT
PAGE
ARTICLE 1-DEFINITIONS .............................................................
1.1 "AFFILIATE".............................................................2
1.2 "COMBINATION HRT MARKET"................................................3
13 "CONFIDENTIAL INFORMATION" ............................................3
1.4 "CONTRACEPTIVE PRODUCT".................................................3
1.5 "CONTROLLED"............................................................3
1.6 "CO-PROMOTE", "CO-PROMOTION" .......................................3
1.7 "DETAIL (OR "DETAILS" AND "DETAILING")..................................3
1.8 "EFFECTIVE DATE" .......................................................3
1.9 "EXECUTIVE COMMITTEE" ................................................4
1.10 "EXTENDED TERM" .......................................................4
1.11 "FDA" .................................................................4
1.12 "HRT HIGH PRESCRIBERS"..................................................4
1.13 "HRT PRODUCT" ........................................................4
1.14 "INDEMNIFIABLE CLAIM" .................................................4
1.15 "INFORMATION" .........................................................4
1.16 "INITIAL [*] PHYSICIANS"................................................5
1.17 "INITIAL TERM" .........................................................5
1.18 "JOINT MARKETING COMMITTEE" OR "JMC"....................................5
1.19 "LAUNCH DATE" .........................................................5
1.20 "MARKETING PLAN"........................................................5
1.21 "NATIONAL HOME DELIVERY PHARMACY BUSINESS"..............................6
1.22 "NET SALES".............................................................6
1.23 "NET SALES PRICE".......................................................6
1.24 "NEW PHYSICIANS"........................................................6
1.25 "ORAL CONTRACEPTIVES"...................................................7
1.26 [*].....................................................................7
1.27 "ORTHO'S ORAL CONTRACEPTIVES"...........................................7
1.28 "[*]"...................................................................7
1.29 "ORTHO SALES FORCE".....................................................7
1.30 "ORTHO-TRI-CYCLEN"......................................................7
1.31 "[*] LAUNCH YEAR".......................................................7
1.32 "PRESCRIBING PHYSICIANS"................................................7
1.33 "[*]"...................................................................7
1.34 "PRIMARY PRESENTATION"..................................................8
1.35 "PRODUCTS"..............................................................8
1.36 "SALES MESSAGE".........................................................8
1.37 "TERM"..................................................................8
1.38 "TERRITORY".............................................................8
1.39 "TOTAL ORAL CONTRACEPTIVE MARKET".......................................8
1.40 "TOTAL WFHC [*] PRESCRIPTIONS"..........................................8
1.41 "TRADEMARKS" .........................................................8
1.42 "WFHC CALLED ON PHYSICIANS".............................................8
1.43 "WFHC SALES FORCE"......................................................9
[*] Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 2-GRANTS AND RESTRICTIONS .....................................................
2.1 GRANT...................................................................9
2.2 RETAINED RIGHTS.........................................................9
2.3 NON-COMPETITION.........................................................9
ARTICLE 3-STRATEGY/COORDINATION OF ACTIVITIES
3.1 STRATEGY...............................................................11
3.2 COMMITTEES.............................................................12
3.3 JOINT MARKETING COMMITTEE..............................................12
3.4 EXECUTIVE COMMITTEE....................................................13
ARTICLE 4-PROMOTION AND DETAILING
4.1 CO-PROMOTION...........................................................15
4.2 CO-PROMOTION PRODUCTS..................................................15
4.3 WFHC's DETAILS.........................................................15
4.4 EXPANSION OF CO-PROMOTION SALES FORCE..................................17
4.5 EXPANSION OF SALE FORCE OUTSIDE OF CO-PROMOTION........................17
4.6 SALES FORCE............................................................17
4.7 DETAILS IN EXTENDED TERM...............................................18
4.8 DETAIL REPORTS.........................................................18
4.9 CO-PROMOTION AUDIT OF PERFORMANCE......................................18
4.10 EDUCATION PROGRAM......................................................19
ARTICLE 5-ROLES AND OBLIGATIONS OF THE PARTIES REGARDING
THE PRODUCT
5.1 ORTHO's ROLES AND OBLIGATIONS..........................................20
5.2 WFHC's ROLES AND OBLIGATIONS...........................................22
ARTICLE 6-COMPENSATION
6.1 [*] COMPENSATION 2000..................................................24
6.2 [*] COMPENSATION AFTER 2000............................................25
6.3 FORECASTED MONTHLY PAYMENTS............................................26
6.4 COMPENSATION FOR ORTHO TRI-CYCLEN/[*]..................................27
6.5 QUARTERLY PAYMENTS.....................................................32
6.6 MINIMUM PAYMENTS.......................................................33
6.7 PENALTIES..............................................................34
6.8 ORTHO-EST DISTRIBUTION AGREEMENT.......................................35
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
ii.
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 7-ACCOUNTING REPORTS
7.1 QUARTERLY REPORTS......................................................35
7.2 AUDIT..................................................................35
7.3 OBJECTIONS.............................................................36
7.4 OVERDUE PAYMENT........................................................36
ARTICLE 8-SAMPLING PROGRAM
8.1 SAMPLES................................................................36
8.2 COMPLIANCE WITH LAW....................................................36
ARTICLE 9-REPRESENTATION, WARRANTIES AND COVENANTS
9.1 FDA APPROVAL...........................................................37
9.2 LABELING...............................................................37
9.3 MANUFACTURE............................................................37
9.4 YEAR 2000..............................................................37
9.5 WFHC SALES FORCE.......................................................38
ARTICLE 10-INDEMNIFICATION
10.1 ORTHO AND WFHC.........................................................38
10.2 ORTHO..................................................................38
10.3 PROCEDURE..............................................................39
10.4 INSURANCE..............................................................40
ARTICLE 11-CONFIDENTIALITY
11.1 CONFIDENTIAL INFORMATION...............................................41
11.2 SURVIVAL...............................................................42
11.3 PRIOR NOTICE...........................................................42
ARTICLE 12-TRADEDRESS AND PACKAGING
12.1 TRADEMARK..............................................................43
ARTICLE 13-TERM-TERMINATION
13.1 INITIAL TERM...........................................................43
13.2 EXTENDED TERM..........................................................43
13.3 PERFORMANCE GOALS WFHC ACHIEVES........................................43
13.4 OPTION TO TERMINATE....................................................43
13.5 TERMINATION FOR EVENT OF DEFAULT.......................................45
13.6 EFFECT OF TERMINATION..................................................47
ARTICLE 14-INTELLECTUAL PROPERTY RIGHTS
14.1 RIGHTS.................................................................47
14.2 INFRINGEMENT...........................................................48
iii.
5
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 15-DISPUTE RESOLUTION
15.1 INITIAL RESOLUTION.....................................................48
15.2 ARBITRATION............................................................48
ARTICLE 16-MISCELLANEOUS
16.1 INDEPENDENT CONTRACTOR.................................................49
16.2 NOTICE.................................................................49
16.3 FORCE MAJEURE..........................................................51
16.4 ASSIGNMENT.............................................................51
16.5 MODIFICATION...........................................................52
16.6 WAIVERS................................................................52
16.7 GOVERNING LAW..........................................................52
16.8 PUBLIC DISCLOSURE......................................................52
16.9 SOLICITATION...........................................................53
16.10 PERFORMANCE BY AFFILIATES..............................................53
16.11 ENTIRE AGREEMENT.......................................................53
16.12 LIMITATION OF LIABILITY................................................53
16.13 BINDING AGREEMENT......................................................54
16.14 SEVERABILITY...........................................................54
16.15 CAPTIONS...............................................................54
16.16 SURVIVAL...............................................................54
16.17 COUNTERPARTS...........................................................55
16.18 REMEDIES NOT EXCLUSIVE.................................................55
APPENDIX A- ARBITRATION PROCEEDINGS
APPENDIX B EDUCATION PROGRAM
APPENDIX C SAMPLE CALCULATIONS
iv.
6
CO-PROMOTION AGREEMENT
THIS CO-PROMOTION AGREEMENT (the "Agreement") is made as of May 27,
1999, by and between ORTHO-XXXXXX PHARMACEUTICAL, INC., a Delaware corporation
("ORTHO"), and WOMEN FIRST HEALTHCARE, INC., a Delaware corporation ("WFHC").
ORTHO and WFHC may be referred to herein individually as a "Party" and
collectively as the "Parties." Terms not otherwise defined herein shall have the
meanings set forth in Article 1.
RECITALS
WHEREAS, ORTHO has the exclusive right to develop, promote and market
[*], ORTHO TRI-CYCLEN(R), AND [*](hereinafter defined and collectively referred
to as the "Products") within the Territory (hereinafter defined);
WHEREAS, ORTHO has developed a strategy for the promotion and marketing
of ORTHO TRI-CYCLEN to all physician specialties and is developing a strategy
for the promotion and marketing of [*] and [*] as a replacement for ORTHO
TRI-CYCLEN;
WHEREAS, ORTHO believes that it may more efficiently and successfully
market and promote each of these Products in the Territory by jointly promoting
the Products in the Territory with another pharmaceutical marketer of women's
health care products;
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
1
7
WHEREAS, WFHC has experience in promoting women's health care
pharmaceutical products to Prescribing Physicians (hereinafter defined) and the
financial, scientific and human resources available to Co-Promote (hereinafter
defined) and Detail (hereinafter defined) the Products to Prescribing
Physicians; and
WHEREAS, ORTHO and WFHC wish to cooperate in the Co-Promotion of the
Products to Prescribing Physicians in order to maximize the sales of the
Products.
NOW, THEREFORE, in consideration of the covenants and promises contained
in this Agreement, ORTHO and WFHC agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "AFFILIATE" means, with respect to a Party, a trust, business, joint
venture, partnership, corporation, association or any other entity that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, is owned by or under common ownership with a Party. For purposes
of this definition, the term "controls" (including its correlative meanings and
the terms "owned by" and "under common ownership with") means the direct or
indirect
2
8
ownership of more than fifty percent (50%) of the outstanding voting securities
of a corporation or other entity or comparable equity interest in any other type
of entity.
1.2 "COMBINATION HRT MARKET" means all fixed dose combination HRT
Products (oral and patch) and all estrogen prescriptions written with
concomitant progestin therapy.
1.3 "CONFIDENTIAL INFORMATION" means any Information (whether in oral,
written, graphic or electronic form) that is not generally ascertainable from
public or published information and that is, by its nature, Information that
would give an entity in the business of the disclosing party a competitive
advantage over another such entity not in possession of such Information,
regardless of whether such Information was provided pursuant to this Agreement,
by request of the other Party, or in any other manner.
1.4 "CONTRACEPTIVE PRODUCT" means any prescription pharmaceutical
product useful in preventing conception in a human female.
1.5 "CONTROLLED" means, with respect to any Information, patent,
Trademark or other intellectual property right, ownership thereof or the ability
of a person to grant to another person access, an assignment, a license, or a
sublicense thereto without violating the rights of a third party.
1.6 "CO-PROMOTE", "CO-PROMOTION" mean the promotion of a Product through
ORTHO's and WFHC's respective sales forces in the Territory under a single
Trademark.
1.7 "DETAIL" (OR "DETAILS" AND "DETAILING") means, with respect to the
Products, the activity undertaken by a sales representative during a
face-to-face sales call on physicians or other health care professionals with
prescribing authority to provide information on the use, safety, effectiveness,
contraindications, side effects, warnings and other relevant characteristics of
the Product, in a fair and balanced manner consistent with the requirements of
the Food, Drug and Cosmetic Act, including, but not limited to, the regulations
of 21 CFR Part 202, and using, as necessary or desirable, labeling or
promotional materials, in an effort to increase physician
3
9
prescribing preferences of the Product, but excluding [*].
1.8 "EFFECTIVE DATE" means the date first written above.
1.9 "EXECUTIVE COMMITTEE" the president of ORTHO and a Vice President of
Sales and Marketing for ORTHO and Mr. Xxxxx Xxxx (currently president of WFHC)
and Xx. Xxxxxx Xxxxxx (currently chairman of WFHC), with the responsibilities as
described in Article 3.
1.10 "EXTENDED TERM" means the period beginning on January 1, 2003 and
ending December 31, 2003.
1.11 "FDA" means the United States Food and Drug Administration and any
successor agency thereto.
1.12 "HRT HIGH PRESCRIBERS" are those physicians in the top [*] deciles
of HRT high volume prescribers as determined by IMS data.
1.13 "HRT PRODUCT" means any prescription estrogen or estrogen and
progestin combination product useful as hormone replacement therapy in a human
female.
1.14 "INDEMNIFIABLE CLAIM" means any claim, suit, judgment, liability or
associated expense (including reasonable outside attorney fees) referred to in
Sections 10.1 and 10.2.
1.15 "INFORMATION" means all technical data, knowledge, reports,
financial data, trade secrets, consumer data, names and classes of customers,
research activities and plans, clinical studies, costs of production, prices,
marketing plans and strategies, inventions, disclosures, processes, systems,
methods, techniques, formulations, drawings, formulae, patents, patent
applications, trademarks, regulatory filings, materials, devices, and other
know-how presently owned by or developed by, or on behalf of, either party
during the Term which relates in whole
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
4
10
or in part to (a) the Product and/or the preparation, marketing, Detail, sale or
use of the Product, or (b) the businesses of either of the Parties and/or their
Affiliates.
1.16 "INITIAL [*] PHYSICIANS" means those Prescribing Physicians
Detailed by WFHC during the first or partial calendar year following the Launch
Date of [*].
1.17 "INITIAL TERM" means the period beginning on the Effective Date
and, unless earlier terminated as provided herein, ending December 31, 2002.
1.18 "JOINT MARKETING COMMITTEE" OR "JMC" means the working group, as
described in Section 3.3, that is responsible for managing the day-to-day
administrative and operational activities related to the Co-Promotion of the
Products.
1.19 "LAUNCH DATE" means the date on which ORTHO and WFHC first begin to
Co-Promote a Product in commercial quantity for commercial sale to any
unaffiliated third party in the Territory.
1.20 "MARKETING PLAN" means the detailed plan prepared and reviewed by
the JMC (and approved by the Executive Committee) that describes the budget,
market assessment, critical issues relating to the promotion of the Products,
strategic drivers, operating strategies, tactics strategy and activity intended
to promote and support sales of the Product in the Territory to Prescribing
Physicians, including but not limited to reach and frequency of calls,
advertising, development and dissemination of literature and brochures,
exhibition materials, medical education, reprinting, promotional aids and
mailing, samples, clinical experience programs, post-marketing surveillance
studies, and major national and regional symposia. Each Product that is to be
Co-Promoted will have its own Marketing Plan.
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
5
11
1.21 "NATIONAL HOME DELIVERY PHARMACY BUSINESS" means a business, joint
venture, partnership, corporation, association or any other entity that
dispenses prescription drugs and non-prescription over-the-counter products
direct to purchasers and is owned by or an Affiliate of WFHC.
1.22 "NET SALES" shall mean, with respect to any Product, the amount
invoiced by ORTHO or its sublicensees for sales of Products to a third party in
the Territory, less estimates which will be adjusted to actual on a periodic
basis of: (i) discounts, including cash discounts, discounts to managed care or
similar organizations or government organizations, rebates paid, credit, accrued
or actually taken, including government rebates such as Medicaid chargebacks or
rebates, and retroactive price reductions or allowances actually allowed or
granted from the billed amount, and commercially reasonable and customary fees
paid to distributors (other than to a distributor that is an Affiliate of
ORTHO), (ii) credits or allowances actually granted upon claims, rejections or
returns of such sales of Products, including recalls, regardless of ORTHO
requesting such recalls and (iii) taxes, duties or other governmental charges
levied on or measured by the billing amount when included in billing, as
adjusted for rebates, charge-backs, and refunds
1.23 "NET SALES PRICE" has the various meanings recited in Sections
6.2-6.5, including but not limited to the values of N, O and the corrected
values determined at year end as recited in Sections 6.3 and 6.5 and in each
case is the Net Sales Price for Products sold.
1.24 "NEW PHYSICIANS" are those Prescribing Physicians Detailed by the
WFHC Sales Force pursuant to the Marketing Plan who were not previously Detailed
by the WFHC Sales Force during the first full or partial year in which it
Detailed [*] and prior to Sales Force expansion, if any, as permitted under
Section 4.4. For the purpose of this definition and the
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
6
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calculation in Section 6.2 in which it is used, a New Physician will always
remain a New Physician for the Term.
1.25 "ORAL CONTRACEPTIVES" means all prescription oral pharmaceutical
products useful in preventing conception in a human female.
1.26 "[*]" means ORTHO's [*] brand, in all dosage forms and package
configurations.
1.27 "ORTHO's ORAL CONTRACEPTIVES" means all the oral contraceptive
products sold by ORTHO or its contractors.
1.28 "[*]" means ORTHO's [*] brand, in all dosage forms and package
configurations.
1.29 "ORTHO SALES FORCE" means the sales force of ORTHO Detailing the
Products.
1.30 "ORTHO-TRI-CYCLEN" means ORTHO's ORTHO TRI-CYCLEN(R) brand in all
dosage forms and package configurations.
1.31 "[*] LAUNCH YEAR" is the year in time (365 days) beginning on
the date [*] is first launched for commercial sale.
1.32 "PRESCRIBING PHYSICIANS" means those physicians and nurse
practitioners in the field of women's health care, including, but not limited
to, OB/GYN physicians and primary care physicians with prescribing authority in
the Territory who appear on a target list to be determined as recited in Section
4.3.
1.33 [*]
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
7
13
1.34 "PRIMARY PRESENTATION" means a Detail during which a sales
representative delivers the Sales Message.
1.35 "PRODUCTS" means the products [*], ORTHO TRI-CYCLEN, and [*], or
any other ORTHO Oral Contraceptive Detailed in [*] by ORTHO, either individually
or collectively.
1.36 "SALES MESSAGE" means the sales presentation on a given Product in
which at least the core message providing the main features and benefits of the
Product is conveyed, which core message is the message that is agreed upon by
the JMC for each sales representative to use when making a sales presentation to
a Prescribing Physician.
1.37 "TERM" means the Initial Term and any Extended Term.
1.38 "TERRITORY" shall mean the United States of America, the District
of Columbia and Puerto Rico.
1.39 "TOTAL ORAL CONTRACEPTIVE MARKET" means the market which is
composed of all Oral Contraceptives which are prescribed by a physician or nurse
practitioner in the Territory.
1.40 "TOTAL WFHC [*] PRESCRIPTIONS" shall having the meaning recited
in Section 6.1.
1.41 "TRADEMARKS" shall mean all trademarks, trade names, brand names,
logos and designs, whether registered or not, used during the Term in connection
with the identification, promotion, marketing or sale of the Product.
1.42 "WFHC CALLED-ON PHYSICIANS" means those Initial [*] Physicians
and nurse practitioners identified in the WFHC called-on list by name and
Medical Education Number (ME number) to be Detailed by WFHC.
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
8
14
1.43 "WFHC SALES FORCE" means the sales force of WFHC Detailing the
Products.
ARTICLE 2
GRANTS AND RESTRICTIONS
2.1 GRANT. Subject to the terms and conditions of this Agreement,
including but not limited to the rights reserved to ORTHO herein, ORTHO grants
to WFHC the right to Co-Promote and Detail the Products in the Territory to
Prescribing Physicians.
2.2 RETAINED RIGHTS.
(a) In addition to those rights that ORTHO retains under Section
4.1 and 4.2 with respect to Co-Promoting and Detailing the Products to
Prescribing Physicians, ORTHO retains all rights to the Products not expressly
granted herein.
(b) Except as specifically provided herein, nothing in this
Agreement shall be construed or implied as a grant, assignment or transfer to
either Party of a license or other right of any kind under any patent, Trademark
or other intellectual property right owned or Controlled by the other Party.
ORTHO, as the originator of the Products, will retain full and sole control and
ownership over the Products and all existing and future patents, Trademarks,
regulatory approvals and other rights connected with the Products.
2.3 NON-COMPETITION.
(a) WFHC shall not market, promote, distribute or sell any
Contraceptive Product or HRT Product indicated and approved for human
consumption in the Territory, other than ORTHO-EST(R) and the Products during
the Term and for a period three months thereafter; provided, however, that WFHC
may promote an estrogen patch product
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
9
15
in either the second or third position, if such promotion occurs prior to the
Launch Date of [*]. After the Launch Date of [*], WFHC may promote such estrogen
patch product or another product which is other than a Contraceptive Product or
HRT Product through the WFHC Sales Force in the third call position during a
Detail if such product(s) is defined in the call plan for its sales
representatives and such call plan is not changed more than 4 times per year.
WFHC may, however, promote such estrogen patch product through a sales force
that is independent from the WFHC Sales Force at any time and in any position it
so desires. Notwithstanding the foregoing, the three month period after the Term
shall not exist if the Term is shortened as a result of termination under
Section 13.4 (a) (i), (ii) and (iv), and (b) (i) and (ii) and Section 13.5 in
the event of termination by WFHC as a result of ORTHO's breach.
(b) During the Term, ORTHO may enter into a co-promotion
agreement with a third party with respect to [*] in the Territory.
(c) During the Term, WFHC agrees not to solicit sales
representatives from any Xxxxxxx & Xxxxxxx Company or from any contractor of
ORTHO that is providing sales force calls on physicians.
(d) Notwithstanding the foregoing, WFHC may dispense but not
otherwise promote in violation of Section 2.3(a) above any prescription
pharmaceutical products through its National Home Delivery Pharmacy Business.
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
10
16
ARTICLE 3
STRATEGY/COORDINATION OF ACTIVITIES
3.1 STRATEGY.
(a) The Parties agree that the most efficient strategy to achieve
the objectives of their cooperation is through the Co-Promotion of the Products,
using a centrally coordinated marketing approach, a single Trademark, and
packaging and promotional literature as set forth in the Marketing Plan.
(b) Upon reasonable consultation with WFHC, the Joint Marketing
Committee, and the Executive Committee, ORTHO shall have sole discretion in
determining the marketing strategy for the Products in the Territory, including
but not limited to the budget for promoting the Products, Product positioning,
education programs, Sales Message and Phase IV studies. In addition, ORTHO shall
be responsible for the preparation of Marketing Plans for each Product. The
Marketing Plan for ORTHO TRI-CYCLEN shall be prepared by ORTHO after the
Effective Date, reviewed with the JMC prior to July 1, 1999 and updated from
time to time as needed. The Marketing Plan for [*] shall be prepared by ORTHO
after the Effective Date and reviewed with the JMC prior to the Launch Date of
[*].
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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17
3.2 COMMITTEES. For the purpose of implementing and coordinating the
Parties' promotional activities in the Territory and the related expenditures,
the Parties shall establish a Joint Marketing Committee and an Executive
Committee within thirty (30) days of the Effective Date. Each Party shall bear
its own costs and expenses associated with its participation in the JMC and
Executive Committee.
3.3 JOINT MARKETING COMMITTEE.
(a) Formation. The JMC shall consist of 2-4 members from each
Party, with the members being representatives from the Parties' respective sales
and marketing departments. ORTHO shall select one of its members to serve as
chairperson of the JMC. Either Party may appoint, substitute or replace members
of the JMC upon prior written notice to the other Party.
(b) Decision Making. All decisions of the JMC should be made by a
majority vote of the members. In the event the JMC cannot reach a mutual
decision and is deadlocked on any matter to be decided by the JMC, the
chairperson shall have the right to cast the deciding vote and render a decision
on the matter. Either Party, however, may appeal any decision to the Executive
Committee.
(c) Function. The JMC shall be responsible, among other things,
for:
(i) reviewing and commenting on the Marketing Plan;
(ii) implementing and supporting the Marketing Plan and
managing the day-to-day administrative and operational activities related to the
Co-Promotion of the Product;
(iii) coordinating the activities of each Party with
respect to the Co-Promotion of the Products in the Territory;
(iv) selecting vendors;
12
18
(v) reviewing and, as appropriate, recommending
modifications to, on an annual basis, the Prescribing Physicians (in accordance
with Section 4.3(e)), the number of Details, and call frequency goals relative
to prescription activity.
(d) Meetings. The JMC shall operate consistent with the following
procedures, which both Parties can, by mutual agreement, modify from
time-to-time:
(i) The chairperson shall be responsible for providing
the leadership for the JMC and for the timing, agenda and minutes of each
meeting;
(ii) The location of the JMC meetings will alternate
between ORTHO's facilities and WFHC's facilities or an acceptable off-site
location as agreed to by the Parties;
(iii) The JMC will meet no fewer than four (4) times
each calendar year, unless otherwise agreed by the JMC;
(iv) Minutes of each JMC meeting will be prepared and
summarized within four weeks after each meeting and shall not be official until
the chairperson has agreed to them; and
(v) Non-members of the JMC may attend the JMC meetings,
provided reasonable prior notice is given to and approved by the JMC's
chairperson.
3.4 EXECUTIVE COMMITTEE.
(a) Formation. The Executive Committee shall consist of four (4)
members, two (2) members of which are from each of ORTHO and WFHC. Each member
shall be an executive sponsor of the Product. ORTHO shall select one of its
members to serve as chairperson of the Executive Committee. ORTHO may substitute
or replace its members on the Executive Committee upon prior written notice to
WFHC. Any replacement or substitute member shall be a
13
19
person having a functionally equivalent position within that Party to that of
the person replaced or substituted. WFHC may not substitute its members that are
recited in Section 1.9, except in the case of the death or disability of the
designated members, provided such are replaced with individuals in functionally
equivalent position at WFHC, or unless agreed to in advance in writing by ORTHO.
(b) Function. The Executive Committee is responsible for:
(i) providing the leadership required to ensure the
optimal performance of the JMC;
(ii) reviewing and commenting on the Marketing Plan; and
(iii) addressing and deciding all matters referred to it
by the JMC.
(c) Meetings. During the first year of the Term, the Executive
Committee shall meet at least quarterly. Thereafter, meetings will be held as
the Parties may agree. The location of Executive Committee meetings will
alternate between each Party's offices or an off-site location as agreed to by
the Parties.
(d) Decision Making. All decisions of the Executive Committee
shall be made by a majority vote of the members. If a majority of the Executive
Committee cannot reach a decision on a given matter, the chairperson shall have
the right to cast the deciding vote and render a decision on the matter. Other
than as provided above, ORTHO retains ultimate authority with respect to all
strategic matters involving or relating to the Products.
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ARTICLE 4
PROMOTION AND DETAILING
4.1 CO-PROMOTION. ORTHO and WFHC agree to deploy their respective Sales
Forces in an effort to Co-Promote and Detail the Products in accordance with the
terms and conditions of this Agreement and the Marketing Plan then in effect. In
conducting such Co-Promotion and Detailing, ORTHO and WFHC shall comply with all
applicable laws and use reasonable commercial efforts consistent with accepted
pharmaceutical industry business practices (including, but not limited to, the
relevant American Medical Association Guidelines). No Party shall be required to
undertake any activity under this Agreement which it believes, in good faith,
may violate any applicable law.
4.2 CO-PROMOTION PRODUCTS. Initially, the Parties will Co-Promote ORTHO
TRI-CYCLEN in the Territory. Co-Promotion will begin on or about July 1, 1999
preceded by the appropriate training of the WFHC Sales Force. ORTHO may replace
ORTHO TRI-CYCLEN with [*] or some other Oral Contraceptive as the Product being
Co-Promoted, provided, such other ORTHO Oral Contraceptive is being promoted by
ORTHO [*]. In addition to the aforementioned Products, the Parties agree to
Co-Promote [*] when it is launched by ORTHO. WFHC must Co-Promote each such
Product designated.
4.3 WFHC's DETAILS. During the Term, WFHC shall deploy WFHC's Sales
Force to Detail and Co-Promote the Products to Prescribing Physicians in the
Territory as follows:
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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(a) WFHC will commit at least 100 sales representatives in 1999
and at least [*] sales representatives in each of 2000, 2001 and 2002 to
Co-Promote Products. The [*] added sales representatives for 2000 shall be hired
by [*], and trained and located in their sales territory as of the launch
meeting of [*], provided ORTHO provides notice no later than [*] that it will
hold a launch meeting in [*] for [*]. The [*] date will shift forward in time to
a date which in 60 days after notice given to WFHC by ORTHO of a launch meeting,
if notice is not given by [*].
(b) The number of Details for 1999 shall be [*] and the number of
Details for each of 2000-2002, assuming [*] representatives shall be [*].
(c) On each Detail, WFHC agrees to make a Primary Presentation
for each of the Products it is Co-Promoting at the time of the Detail. Moreover,
WFHC agrees to present [*] on any single call with the Products, being Detailed
in a [*]. In addition, the Products will represent at least [*] percent of the
time spent by WFHC sales representatives during each Detail.
(d) WFHC agrees to Detail, in 1999, [*] Prescribing Physicians
with a minimum average frequency of [*] times for 1999 and [*] Prescribing
Physicians in each of 2000-2002 with a minimum average frequency of [*] times
per year, unless otherwise agreed in the Marketing Plan or WFHC expands its
Sales Force as permitted in Section 4.4.
(e) The Prescribing Physicians that the WFHC Sales Force Details
hereunder will be determined by WFHC and provided to ORTHO prior to the
Effective Date, provided, however, that if the Prescribing Physicians determined
by WFHC differ by more than [*] from the top deciles of HRT High Prescriibers as
determined by IMS data then WFHC must alter its list of
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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22
Prescribing Physicians so that the WFHC list does not vary by more than [*]
from the IMS data. Once this list is set, it can not be changed without prior
written approval of ORTHO, provided, however, WFHC may add to the list if WFHC
expands its Sales Force as recited in Section 4.4 with the proviso any expansion
must still comply with the [*] rule recited in this Section 4.3 (e).
4.4 EXPANSION OF CO-PROMOTION SALES FORCE. WFHC has the right at its
sole option to expand the WFHC Sales Force to [*] sales representatives as of
February 1, 2001 or February 1, 2002, provided WFHC provides ORTHO with 90 days
prior written notice. No expansion of the WFHC Sales Force beyond [*] sales
representatives is permitted without prior written approval by ORTHO. Moreover,
WFHC may only expand if such expansion is in place as of February 1, of the year
of expansion (eg., mid-year expansion is not permitted.) In the event of any
expansion under this Section 4.4, WFHC's sales representatives shall be hired,
trained, and in the territory wherein they will be Co-Promoting Product as of
the date of expansion; eg., February 1, 2001 or February 1, 2002.
4.5 EXPANSION OF SALE FORCE OUTSIDE OF CO-PROMOTION. If WFHC expands its
complete sales force beyond the number of representatives included in this
Co-Promotion, WFHC will maintain the agreed upon reach and frequency, without
geographical distortion. As used herein, "geographical distortion" means that
the geographic area that was covered before the expansion will receive equal or
greater coverage after the expansion.
4.6 SALES FORCE. All Detailing required under Section 4.3 shall be (a)
done by regular, full-time members of WFHC's Sales Force, (b) of a quality
equivalent to that provided by WFHC to product lines, it is currently promoting
and (c) directed exclusively to the total coverage of Prescribing Physicians
targeted in the Marketing Plan. WFHC shall be solely responsible for the
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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cost and expense of fulfilling its Detailing obligations including, but not
limited to salaries, travel, materials, training (except as expressly provided
for under 5.1(e) and (f)) and compensation under Section 4.3. WFHC agrees that
their current WFHC Sales Force as of the Effective Date has an average
healthcare sales experience of at least 5 years and that all of their sales
representatives hired after the Effective Date will have at least two years of
experience in selling pharmaceutical products or devices in the field of women's
health care, or, alternatively, three years of experience in detailing
pharmaceutical products, in general.
4.7 DETAILS IN EXTENDED TERM. The nature and extent of WFHC obligation
to Detail the Product to Prescribing Physicians during any, extension beyond
December 31, 2002 shall be consistent with WFHC's obligations in 2002.
4.8 DETAIL REPORTS. WHFC, 30 days after each month, will provide to
ORTHO on disk a record of their Detailing activity by physician and "rollable"
to their territory, district and regional configuration. As soon as it is in
place at WFHC, WFHC will provide such information as electronic tapes instead of
on disk. This file will provide information on all calls to physicians,
including the detail position of products presented by WFHC and samples that
were left. A territory, zip code file of the WFHC alignment should be provided
as a base and updated as each wave of WFHC expansion is completed.
4.9 CO-PROMOTION AUDIT OF PERFORMANCE.
(a) ORTHO shall have the right to review and audit WFHC's call
reporting records during regular business hours to confirm satisfaction of the
obligations set out in this Article IV where there is a substantial difference
between WFHC's call reporting records and the records of the IMS auditing
service or other pharmaceutical industry call reporting service utilized
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by ORTHO hereunder. If, after such review, the Parties are unable to agree as to
the results of ORTHO's audit, ORTHO may demand a verification of any
certification by audit of WFHC's call reporting system to be conducted by a
mutually agreed upon auditor.
(b) In addition, ORTHO representatives may attend local and
national sales meetings and training meetings of WFHC. Moreover, ORTHO
representatives may "ride" with WFHC sales representatives to monitor their
performance. Futhermore, ORTHO may audit WFHC's Detailing performance using Fast
Tape or some other commercially available service or product.
4.10 EDUCATION PROGRAM.
(a) A Continuing Medical Education (CME) Provider will be
selected by WFHC to develop an educational program (the "Program"). The CME
Provider will be responsible for all aspects relating to the development and
implementation of the Program including the location, venue, participants and
timing of all speaker programs, mailings, seminars, monographs, videotape
reports, lectures and lecture series kits, newsletters and similar program and
material and materials. Any content of materials that are a component of
continuing medical education under the Program, shall be the responsibility of
the CME Provider and not WFHC or ORTHO. The content of such Program will be the
sole responsibility of the CME Provider in consultation with the medical
faculties of the Health Advisory Board of WFHC and Medical Advisory Board which
is established by the CME Provider.
(b) ORTHO shall be responsible to co-support an educational grant
to fund the development and implementation of the Program. The Parties have
agreed on the overall strategy for the Program, but shall finalize the specific
details of the Program including the tactical
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25
components and the corresponding budget within 30 days after signing of this
Agreement, which shall be added to this Agreement as Exhibit B.
(c) The Program will be developed in accordance with ACCME
guidelines. The ownership of the Program will belong either to the independent
education company(s) or the sponsoring institutions.
(d) It is agreed and understood that this Program will not be the
only educational program being funded by ORTHO in the field of women's
healthcare.
ARTICLE 5
ROLES AND OBLIGATIONS OF THE PARTIES
REGARDING THE PRODUCT
5.1 ORTHO's ROLES AND OBLIGATIONS.
(a) Product. As between the Parties, ORTHO shall have the sole
right and responsibility to manufacture, label, distribute and sell the Product
and to establish and modify the terms and conditions with respect to the sale of
the Product, including, without limitation, the price at which the Product will
be sold, any discount applicable to payments or receivables, and the like. All
sales of Products will be booked by ORTHO.
(b) Medical Inquiries. ORTHO shall respond to all medical
questions or inquiries relating to the Products directed to each Party's
respective sales force, unless such question or inquiry can be answered by
reference to the FDA approved labeling and package insert. ORTHO shall designate
a medical liaison to whom WFHC shall instruct the WFHC Sales Forces to direct
medical questions or inquiries relating to the Product
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26
(c) Governmental Contact. WFHC shall notify ORTHO's regulatory
affairs department upon being contacted by the FDA or any state drug regulatory
agency or any comparable governmental agency in the Territory with respect to
any regulatory purpose pertaining to the use of the Product by Prescribing
Physicians. ORTHO shall also be responsible for maintaining the registration of
the Product, obtaining and maintaining the authorization and/or ability to
market the Product in the Territory, and for initiating and/or responding to all
contacts with the FDA and other regulatory agencies in the Territory relating to
the Products. ORTHO shall retain responsibility for communicating with all
government agencies and satisfying all requirements regarding maintenance of
approvals to market the Product in the United States; provided, however, that
WFHC may respond to any agency's inquiry regarding the Product if and only if
(a) in the reasonable opinion of WFHC's counsel, such response is necessary to
comply with the requirements of any law, governmental order or regulation, and
(b) WFHC has requested the agency to direct the inquiry to ORTHO instead of
WFHC, and such agency has refused such request; but in any such event, unless in
the considered opinion of WFHC's counsel there is a legal prohibition against
doing so, WFHC shall immediately notify ORTHO of such agency's inquiry and of
WFHC's intention to make such response. ORTHO shall be permitted to accompany
WFHC to any meeting with such agency, take part in any such communications and
receive copies of all such communications.
(d) Regulatory Disputes/Lawsuits. ORTHO shall retain exclusive
authority and responsibility for handling, in any manner it deems appropriate,
any disputes or lawsuits with any regulatory agency regarding the regulatory
status of the Product.
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27
(e) Promotional Materials. ORTHO shall provide WFHC with all
required sales and promotional materials in accordance with the Marketing Plan
then in effect. ORTHO shall provide WFHC with prompt notice of, and copies of,
any changes in the label or labeling, or in the advertising, sales or
promotional and training materials relating to the Products, or of any
significant programs that may affect the marketing, sale or distribution of the
Products to Prescribing Physicians.
(f) Sales Training. ORTHO shall provide WFHC with training
materials in sufficient quantity to allow WFHC to effectively train its sales
force in the appropriate methods for Detailing the Products. ORTHO shall also
provide training support during the launch phase of each Product and
approximately once every six months during the Term (one trainer for 1-2 days),
at ORTHO's expense and at WFHC's facility or a mutually agreed to site, to
WFHC's Sales Force or trainers, as provided in Section 5.2(b).
(g) Adverse Reaction Reporting. ORTHO shall retain exclusive
authority and responsibility for the handling of any adverse drug experience (as
defined in 21 CFR 314.80) reported to ORTHO involving the Product, including the
filing with the FDA of any such reports that it receives directly from third
parties or WFHC. ORTHO shall provide WFHC's Regulatory Department with copies of
the periodic adverse drug experience reports, submitted to the FDA pursuant to
21 CFR 314.80(c)(2), at about the time of submission to the FDA. ORTHO shall
promptly notify WFHC of any adverse drug experience report or series of adverse
drug experiences that may affect the labeling of the Product or the use thereof
in the Field.
5.2 WFHC's ROLES AND OBLIGATIONS.
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(a) Promotion. WFHC shall, consistent with customary
pharmaceutical business practices and all applicable laws, rules and
regulations, train, deploy, motivate (through appropriate incentives), and
direct the WFHC Sales Force to Co-Promote and Detail the Products to Prescribing
Physicians using promotional and sales materials supplied by ORTHO in accordance
with the Marketing Plan or as otherwise decided by the Executive Committee and
implemented by the JMC. WFHC may supplement the ORTHO promotional and sales
materials with its own, only if approved in writing by ORTHO in advance.
Moreover, any information including but not limited to information communicated
via the Internet and Scientific Publications mentioning the Product(s) (i) by
name, (ii) by describing the Products or (iii) via an internet link to the
Products, which WFHC intends to publish, disclose or otherwise distribute must
be approved in writing in advance by ORTHO.
(b) Training. As soon as practicable after the Effective Date,
WFHC shall have members of its sales training department meet with ORTHO as
required to acquire knowledge about the Products, the Marketing Plan and the
marketing strategies for the Product to facilitate training of its
representatives. ORTHO and WFHC shall have the right to participate in each
other's respective national sales meetings during the Co-Promotion Term. All
out-of-pocket expenses incurred by either Party relating to any training
provided by ORTHO or for attending WFHC's national sales meeting or the joint
launch program shall be borne by the Party incurring the same, including without
limitation, travel and lodging expenses. WFHC shall use the training materials
supplied by ORTHO in training its Sales Force.
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(c) Orders. WFHC is not authorized to solicit or accept sales
orders for the Product. If, for any reason, WFHC should receive sales orders for
the Product, WFHC shall promptly forward such orders to ORTHO as soon as
practicable.
ARTICLE 6
COMPENSATION
Examples of the calculations using the formulas in this Article 6 will
be prepared by ORTHO and attached as Exhibit C within 30 days of the Effective
Date.
6.1 [*] COMPENSATION 2000. WFHC will be compensated by ORTHO for its
Co-Promotion of [*] for the year 2000 as recited herein. Forty-five days after
the end of each calendar quarter, ORTHO will determine the total number of
prescriptions written for [*] to Initial [*] Physicians during the preceding
calendar quarter by WFHC Called on Physicians using data from the IMS auditing
service ("Total WFHC [*] Prescriptions or "P" "). The [*] Net Sales Price ("N")
will be the forecasted net price per prescription as used in ORTHO's annual
business plan forecast. This Net Sales Price N may be adjusted in periodic
business plan adjustments during the year.
The following formula will be used to calculate the [*]
[*] (T)(1) owed to WFHC for the preceding quarter.
[*]
wherein
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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T(1) equals the total [*] due to WFHC for the quarter;
P equals the total [*] Prescriptions written by Initial
[*] Physicians Detailed by the WFHC Sales Force as
defined above;
N equals the [*] Net Sales Price as defined above; and
R equals the [*] which is
---------------------------------------------------------------
Time Period After Launch [*] Rate
of [*]
---------------------------------------------------------------
[*] Launch Year 1 [*]
---------------------------------------------------------------
[*] Launch Year 2 [*]
---------------------------------------------------------------
[*] Launch Year 3 [*]
---------------------------------------------------------------
[*] Launch Year 4* [*]
---------------------------------------------------------------
* Assuming there is an Extended Term
6.2 [*] COMPENSATION AFTER 2000. In the case wherein WFHC has not
increased the WFHC Sales Force beyond the [*] sales representative it is
required to employ in 2000, then the formula used in Section 6.1 will be used to
calculate compensation for WFHC for [*] Co-Promotion. However, if WFHC
increases the WFHC Sales Force as is permitted hereunder, the WFHC will be
compensated by receiving a total payment C calculated according to the formula:
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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[*]
wherein
T(2) is the [*] due on incremental sales generated by
prescriptions written by New Physicians and calculated by the
following formula:
[*]
wherein
A is the total prescriptions for [*] written by the New
Physicians for the current calendar quarter;
B is the total prescriptions for [*] written by the New
Physicians in the last full calendar quarter just prior to WFHC
increasing its WFHC Sales Force;
N equals the [*] Net Sales Price per prescription as used
in ORTHO's business plan in the quarter for which compensation is
being calculated.
6.3 FORECASTED MONTHLY PAYMENTS. In order to provide WFHC with more
frequent payments than quarterly payments, ORTHO will forecast the [*]
payments T(1) and T(2) for each quarter at the beginning of each year and then
make monthly payments at the end of each month based on the forcasted quarterly
values for T(1) and T(2). At the end of each quarter when T(1) and T(2) are
calculated the past three monthly payments will be reconciled with the actual
compensation due and based on the reconciliation, either a credit will be taken
against future forecasted monthly payments or an equalizing payment will be made
to WFHC. ORTHO may adjust its monthly forecasted payment based on changes made
to its business plan forecast. At
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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the time that ORTHO makes its' quarterly compensation payment (T(1) and T(2))
for the fourth quarter, ORTHO will also calculate the Net Sales Price as
recorded in ORTHO's financial records (records which may either be subject to
ORTHO's independent audit or provide support for records subject to ORTHO's
independent audit) for the past year. This Net Sales Price will be calculated by
dividing Net Sales for [*] as reported by ORTHO by units of [*] shipped for
sale. The Net Sales Price per unit will then be converted to Net Sales Price per
prescription using the prescription to cycle ratio provided by IMS for that
year. If the Net Sales Price recorded by ORTHO for the year is greater than the
per unit Net Sales Price forecasted for the year, ORTHO will pay to WFHC an
equalization payment that will adjust the compensation payments (T(1) and T(2))
for the year by the impact of the increase in Net Sales Price on the year. If
actual Net Sales Price is lower than the forecasted Net Sales Price, ORTHO will
credit against the compensation payments (T(1) and T(2)) to WFHC an amount that
will reduce such payments by the impact of the decrease in Net Sales Price on
the year.
6.4 COMPENSATION FOR ORTHO TRI-CYCLEN/[*]. ORTHO will compensate WFHC
for the Co-Promotion of ORTHO TRI-CYCLEN or any Oral Contraceptive substituted
therefore hereunder according to the procedure recited herein. (It is understood
that, if another ORTHO Oral Contraceptive is substituted, reference to ORTHO
TRI-CYCLEN in the formulas will be replaced with the new ORTHO Oral
Contraceptive.)
(a) Compensation to WFHC. For each calendar quarter compensation
to WFHC (Z) will be calculated according to the following formula:
Z=(N(1)-M(1))-(N(2)-M(2))X(F)X(W)X([*])
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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33
wherein W is [*] for that portion of the calculation wherein
(N(1)-M(1))-(N(2)-M(2)) <= [*] and [*] for any increment over
[*].
If Z is a negative number no compensation will be paid to
WFHC.
(b) The Calculation of the Value for F. The value of F will be
calculated each year as follows:
On or about December 1, of each calendar year beginning December
1, 1999 ORTHO will calculate the value (V) of the Total Oral
Contraceptive Market for the following year. (This valuation will
be the same valuation as used by ORTHO internally to forecast
sales for the following year).
The value (V) will be calculated as follows:
V = E x O
wherein
V is the value of the Total Oral Contraceptive Market;
E is the number of prescriptions forecasted by ORTHO to be
written for the Total Oral Contraceptive Market in the following
year; and
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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34
O is the ORTHO Net Sales Price per prescription which is used in
the Net Sales forecasted in ORTHO's business plan for the sale of
ORTHO Oral Contraceptives in the following year
The value (V) of the Total Oral Contraceptive Market will then be segmented
using the prescriptions written by Prescribing Physicians Detailed by WFHC
(V(1)). Specifically, V(1) is calculated as follows:
D(1)
V(1)= V(----)
R
wherein
V(1) is the Segmented Value of the Total Oral Contraceptive Market attributed to
WFHC; D(1) is the prescriptions written in the past 3 full calendar quarters* in
the Total Oral Contraceptive Market by those Prescribing Physicians Detailed by
WFHC; and
R is the total prescriptions written in the past three full calendar quarters*
in the Total Oral Contraceptive Market by all physicians.
*In December 1999 when calculating the value V(1) for 2000, the past three full
calendar quarters will be the past five months to correspond to a July 1, 1999
Co-Promotion Launch.
Then, the Share Point Value (S(1)) for WFHC for the following year is calculated
as follows:
V(1)
S(1)= ---
100
Then, the Net Share Value (F) for WFHC for the following year is calculated as
follows:
F= S(1)(1-G)
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35
wherein
G is the Cost of Goods Sold for ORTHO's Oral Contraceptives for the past three
calendar quarters expressed as a percent of Net Sales of ORTHO's Oral
Contraceptives.
FOR 1999 ONLY, the Net Share Value (F) will be calculated after the Effective
Date by ORTHO and communicated to WFHC. It will be calculated using the formulas
above, with the following modifications.
E is the number of prescriptions that was forecasted by ORTHO in its 1999
business plan to be written for the Total Oral Contraceptive Market in 1999 and
O is the ORTHO Net Sales Price per prescription which is used in the Net Sales
forecasted in ORTHO's business plan for 1999 for the sale of ORTHO Oral
Contraceptives in 1999
D(1) is the prescriptions written in the 3rd and 4th calendar quarters of 1998
and 1st quarter of 1999 in the Total Oral Contraceptive Market by those
Prescribing Physicians to be Detailed by WFHC in 1999; and
R is the total prescriptions written in the 3rd and 4th calendar quarters of
1998 and 1st quarter of 1999 in the Total Oral Contraceptive Market by all
physicians.
G is the Cost of Goods Sold for ORTHO's Oral Contraceptives in the 3rd and 4th
calendar quarters of 1998 and 1st quarter of 1999 expressed as a percent of Net
Sales of ORTHO's Oral Contraceptives
(c) Market Share Calculations. After July 1, 1999 but before the
end of the first calendar quarter during which the Co-Promotion of ORTHO
TRI-CYCLEN begins, ORTHO agrees to calculate the Base Market Share of ORTHO's
Oral Contraceptive Market for each of
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36
WFHC and ORTHO, based on the Prescribing Physicians that only the ORTHO Sales
Force will be Detailing and the Prescribing Physicians the WFHC Sales Force will
be Detailing, for ORTHO TRI-CYCLEN during the Term. The Base Market Share for
WFHC M(1) will be calculated according to the following formula:
K(1)
M(1)= ---
J(1)
wherein
K(1) is the number of prescriptions written for ORTHO Oral Contraceptives by the
Prescribing Physicians (who will be Detailed by the WFHC Sales Force during the
Co-Promotion of ORTHO-TRI-CYCLEN) during the 12 months prior to the start of the
Co-Promotion of ORTHO TRI-CYCLEN; and
J(1) is the prescriptions written by the Prescribing Physicians (who will be
Detailed by WFHC Sales Force during the Co-Promotion of ORTHO TRI-CYCLEN) who
wrote prescriptions for all Oral Contraceptives during the 12 months prior to
the start of the Co-Promotion of ORTHO TRI-CYCLEN.
The Base Market Share for ORTHO (M(2)) will be calculated according to the
following formula:
K(2)
M(2)= ---
J(2)
wherein
K2 is the prescriptions written for ORTHO Oral Contraceptives by the Prescribing
Physicians (who will be Detailed by only ORTHO Sales Force during the
Co-Promotion of ORTHO Tri-Cyclen) during the 12 months prior to the start of the
Co-Promotion of ORTHO Tri-Cyclen; and
J(2) is the prescriptions written by the Prescribing Physicians (who will be
Detailed only by ORTHO Sales Force during the Co-Promotion of ORTHO Tri-Cyclen)
who wrote prescriptions for all Oral contraceptives during the 12 months prior
to the start of Co-Promotion of ORTHO Tri-Cyclen.
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Thereafter, 30 days after the end of each calendar quarter in which ORTHO
Tri-Cyclen is being Co-Promoted during the Term, each of WFHC's and ORTHO's
Current Market Shares (N(1) and N(2), respectively) will be calculated as
follows:
L(1)
N(1)= ---
Q(1)
wherein
N(1) is WFHC's Current Market Share;
L(1) is the number of prescriptions written for ORTHO Oral Contraceptives by
Prescribing Physicians Detailed by the WFHC Sales Force during each preceding
calendar quarter back till the date the Co-Promotion of ORTHO Tri-Cyclen began
(hereinafter the "Cumulative Quarters"); and
Q(1) is the number of prescriptions written for all Oral Contraceptives by
Prescribing Physicians Detailed by the WFHC Sales Force during the Cumulative
Quarters.
L(2)
N(2)= ---
Q(2)
wherein
N(2) is ORTHO's Current Market Share
L(2) is the number of prescriptions written for ORTHO Oral Contraceptives by
Prescribing Physicians Detailed only by the ORTHO Sales Force during the
Cumulative Quarters; and
Q(2) is the number of prescriptions written for all Oral Contraceptives by
Prescribing Physicians Detailed only by the ORTHO Sales Force during the
Cumulative Quarters.
6.5 QUARTERLY PAYMENTS. The value of Z will be calculated within
forty-five (45) days of the end of each quarter and paid to WFHC minus any
minimum payments made during that past quarter. At the time ORTHO makes its
quarterly compensation payment Z for the fourth quarter, ORTHO will calculate
the Net Sale price as recorded in ORTHO's financial records (which may either be
subject to ORTHO's independent audit or provide support for records subject to
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38
ORTHO's independent audit) for the past year. This Net Sales Price will be
calculated by dividing Net Sales for [*] as reported by ORTHO by units of [*]
shipped for sale. The Net Sales Price per unit will then be converted to Net
Sales Price per prescription using the prescription to cycle ratio provided by
IMS for that year. If the Net Sales Price recorded by ORTHO for the year is
greater than the per unit Net Sales Price forecasted for the year, ORTHO will
pay to WFHC an equalization payment that will adjust the actual total
compensation Z for the year by the impact of the increase in Net Sales Price on
the year. If the actual Net Sales Price is lower than the forecasted Net Sales
Price, ORTHO will credit against the compensation payment Z to WFHC an amount
that will reduce such payment by the impact of the decrease of Net Sales Price
on the year. Further, at the time ORTHO makes its quarterly compensation payment
Z for the fourth quarter, ORTHO will also calculate the value of V for the
preceding year based on actual IMS data for that year. If the value of V is
higher than forecasted for the year, an equalization payment will be made to
increase the total payment of Z for the year for the impact of the increase in
the market. If the value of V is lower than forecasted for the year, ORTHO will
credit its next compensation payment by an amount that will reduce the total
compensation Z.
6.6 MINIMUM PAYMENTS. ORTHO will make the following minimum payments to
WFHC in consideration for WFHC Co-Promoting ORTHO-TRI-CYCLEN/[*] or other ORTHO
Oral Contraceptive:
YEAR MINIMUM PAYMENT
---- ---------------
2000 $[*]
2001 $[*]
2002 $[*]
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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These minimum payments will be made in monthly payments at the end of each month
beginning January 2000. Notwithstanding the foregoing, if at the end of any
quarter the value of Z is < 0, a credit for the immediate past quarter monthly
minimum payments, if any, will be taken against the next quarter's payment of Z
and future minimum payments Moreover, minimum payments will not be resumed until
after the value of Z is positive. If as a result of not making minimum payments
it turns out they should have been paid, based on the calculation for Z for that
quarter such minimums will be due and payable with the quarterly payment of Z
and minimum payments will be resumed..
6.7 PENALTIES.
(a) [*]. If WFHC fails to make [*] of its obligated Primary
Presentations for [*] during any given calendar quarter, the penalty shall be a
percent deduction from total compensation due for that quarter for [*] according
to the following table:
NUMBER OF PRESENTATIONS FOR PERCENT PENALTY ON COMPENSATION FOR
[*] [*]
--------------------------- -----------------------------------
More than [*] No Penalty
[*] [*] Penalty
[*] [*] Penalty
[*] [*] Penalty
(b) ORTHO-TRI-CYCLEN/[*] If WFHC fails to make at least [*] of
its Primary Presentations for ORTHO-TRI-CYCLEN/[*] or other ORTHO Oral
Contraceptive during any given calendar quarter, the minimum payments paid for
that quarter shall be refunded to ORTHO by crediting those minimum amounts
against future minimum
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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payments due and compensation payments Z. Moreover, minimum payments will not be
resumed until after the Primary Presentations for such oral contraceptive
Product for a calendar quarter is [*] or more. If as a result of not making
minimum payments it turns out they should have been paid, based on the fact that
the Primary Presentations made for that quarter turn out to be [*] or greater,
such minimums will be due and payable with the quarterly payment of Z and
minimum payments will be resumed.
6.8 ORTHO-EST DISTRIBUTION AGREEMENT. If WFHC fails to make timely
payments due under the Distribution Agreement between ORTHO and WFHC in
connection with ORTHO-EST, ORTHO may deduct such overdue amounts from any
payments owed to WFHC hereunder.
ARTICLE 7
ACCOUNTING REPORTS
7.1 QUARTERLY REPORTS. Within forty-five (45) days after the last day of
each calendar quarter, ORTHO will submit to WFHC an accounting report of
compensation owed by ORTHO to WFHC for the past calendar quarter together with
the appropriate payment.
7.2 AUDIT. The Parties shall keep accurate records of all data used for
the purpose of making the reports provided for in Section 7.1 which shall
contain sufficient detail to permit a determination of the accuracy of the
reports. Either Party, by and through its authorized third party
representatives, shall have the right, at its own expense and upon reasonable
notice, to audit all of the relevant books and records of the other Party that
are directly related to the promotion, Detailing and/or sale of the Product in
order to determine the accuracy of the quarterly reports and to verify the
computation of amounts due and owing, subject to the following, unless for good
cause shown:
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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(a) Such audit will be limited to the period of three (3) years
following termination or expiration of this Agreement (or such longer period as
such records may be required to be available by law or regulation);
(b) No period of time shall be audited more than once; and
(c) No audit shall be requested more than once in any twelve
(12) month period.
7.3 OBJECTIONS. All reports and all information contained therein
provided to a Party pursuant to this Article 7 shall be deemed conclusive and
binding upon such Party unless written objection shall be lodged with the other
Party within one (1) year from the date of such report, except that objections
discoverable only upon audit shall be reserved for a period of three (3) months
after completion of an audit in which the facts giving rise to the objection are
discovered, regardless of when the audit is performed.
7.4 OVERDUE PAYMENT. In the event any payment due hereunder is not made
when due, the payment shall accrue interest (beginning on the date such payment
is due) calculated at the rate of one percent (1.0%) per month and such payment
when made shall be accompanied by all interest so accrued.
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ARTICLE 8
SAMPLING PROGRAM
8.1 SAMPLES. ORTHO shall provide WFHC with samples, in amounts
consistent with the amounts it provides to the ORTHO Sales Force promoting
Products at no cost, according to the Marketing Plan, which will recite how many
samples will be distributed, when and where.
8.2 COMPLIANCE WITH LAW. All activities in connection with the
distribution of samples shall be conducted in a manner which conforms to (a) the
Marketing Plan and (b) the Prescription Drug Marketing Act of 1987, as may be
amended from time to time, and applicable state laws and regulations. Each Party
shall be responsible for compliance with the Prescription Drug Marketing Act of
1987, as may be amended from time to time.
ARTICLE 9
REPRESENTATION, WARRANTIES AND COVENANTS
9.1 FDA APPROVAL. ORTHO represents and warrants to WFHC that the data
submitted to the FDA in support of the approval of the Product in the Territory
is complete and accurate in all material respects.
9.2 LABELING. ORTHO covenants that the Product labeling and the related
sales, advertising, promotional and training materials provided to WFHC by ORTHO
(except for any such materials provided at the request or specification of WFHC,
with respect to which WFHC
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provides the same covenant) shall conform to the FDA approved labeling for the
Product and will comply with all applicable laws and regulations.
9.3 MANUFACTURE. ORTHO covenants that it shall manufacture the Product
in accordance with the provisions of the Federal Food, Drug and Cosmetic Act and
the FDA's Current Good Manufacturing Practices and regulations promulgated
thereunder, relating to the manufacture of pharmaceutical products.
9.4 YEAR 2000. Each Party represents and warrants to the other that, to
the best of its knowledge, no Year 2000 Problem, as defined below, exists or
will exist during the Term with respect to any computer system, software or
equipment that is owned, leased or licensed by such Party or its Affiliates,
that will materially interfere with such Party's ability to perform under this
Agreement. If such a Year 2000 Problem does exist, the affected Party will use
reasonable efforts to correct it. A "Year 2000 Problem" means a date-handling
problem relating to the Year 2000 date change that would cause a computer
system, software or equipment to fail to correctly perform, process and handle
date-related data for the dates within and between the 20th and 21st centuries
and all other centuries.
9.5 WFHC SALES FORCE. WFHC covenants that it shall deploy the WFHC Sales
Force to Co-Promote the Product.
ARTICLE 10
INDEMNIFICATION
10.1 ORTHO AND WFHC. ORTHO and WFHC shall each indemnify and hold
harmless the other Party and their officers, directors, agents, employees and
Affiliates against and
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from any and all claims, suits, judgments, expenses (including reasonable
attorney fees), losses, liabilities and damages (collectively, "Claims") which
the other Party may incur or suffer which arise out of or are based upon (i) the
material default by such Party in the performance of any obligation of or
agreement made by such Party in this Agreement or the material breach of any
warranty, representation, or agreement made by such Party in this Agreement,
(ii) the acts or omissions to act of the agents, servants or employees of such
Party related to their obligations under or actions taken pursuant to this
Agreement, including, without limitation, acts or omissions to act which are:
(a) intentional misconduct or negligent acts or omissions to act or (b) outside
of the scope of the permissible conduct of such agents, servants or employees as
required in view of the terms of this Agreement, FDA approval of the Product, or
any rules or regulations of the FDA or any other governmental agency, authority
or entity, including, but not limited to, making claims for the Product beyond
the approved labeling, failing to provide the approved package insert as may be
required with the Product or recommending use in non-indicated patients; and
(iii) any and all actions, suits, proceedings, demands, assessments, judgments,
reasonable costs and legal and other expenses incident to any of the foregoing.
10.2 ORTHO. ORTHO further agrees to defend, indemnify and hold harmless
WFHC, its officers, directors, agents, employees and Affiliates, from and
against (i) all claims, monetary judgments, assessed damages and reasonable
attorney fees incurred by or assessed against WFHC for activities prior to any
termination of this Agreement on account of any claim that the manufacture, use
or sale of the Product in the Territory infringes the patent, trademark or other
intellectual property right of any third party, or (ii) any Claims on account of
personal injuries (including death) or product liability claims or other loss or
damage to third parties resulting from
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or relating to the manufacture, labeling, sale or use of the Product, unless and
to the extent such loss or damage was primarily due to the negligence,
recklessness or willful misconduct of WFHC (whether committed by affirmative act
or by omission).
10.3 PROCEDURE. The Party seeking indemnification (the "Indemnified
Party") shall inform the other Party promptly of any such Indemnifiable Claim
which is brought against it and shall, to the extent such Indemnifiable Claim is
brought by a third party, at the other Party's request, cooperate fully with the
other Party in defending such Indemnifiable Claim. The Indemnified Party, at its
expense, shall have the right to advise and consult on and participate in any
related suit or proceeding, subject to the ultimate control of the Indemnifying
Party. The other Party ("Indemnifying Party") shall have full control over the
suit or proceedings, including the right to settle, through counsel of its
choice who is reasonably acceptable to the Indemnified Party; provided, however,
the Indemnifying Party will not, absent the consent of the Indemnified Party
(which consent will not be unreasonably withheld), consent to the entry of any
judgement or enter into any settlement that (1) provides for any relief other
than the payment of monetary damages for which the Indemnifying Party shall be
solely liable and (2) where the claimant or plaintiff does not release the
Indemnified Party from all liability in respect thereof. If the Indemnifying
Party declines to accept control of the defense of such claim or action, the
Indemnified Party may retain counsel at the expense of the Indemnifying Party
and control the defense of the claim or action, provided that the claim or
action may not be settled by the Indemnified Party without the approval of the
Indemnifying Party, which settlement shall not be unreasonably withheld or
delayed. If the Indemnifying Party elects to assume the defense of any claim or
action, such party shall not settle the same without the consent of the
Indemnified Party if such settlement
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would impose any monetary or other material obligation or burden on the
Indemnified Party or require the Indemnified Party to submit to a temporary
restraining order or an injunction or otherwise limit the Indemnified Party's
rights under this Agreement. Any payment made by the Indemnifying Party to
settle any such claim or action shall be at its own cost and expense.
10.4 INSURANCE. WFHC agrees to maintain (a) workers' compensation
insurance for all of its employees, the limits of which shall be statutory, and
(b) commercial general liability and automobile insurance with limits of not
less than $5,000,000 and $1,000,000, per occurrence, respectively.
ARTICLE 11
CONFIDENTIALITY
11.1 CONFIDENTIAL INFORMATION. Except to the extent expressly authorized
by this Agreement or otherwise agreed to by the Parties in writing, the Parties
agree that, during the Term and for five (5) years thereafter, the receiving
party shall keep strictly confidential and shall not publish or otherwise
disclose or use in any way or for any purpose other than as provided for in this
Agreement any Confidential Information furnished to it by the other Party
pursuant to this Agreement, except to the extent that the receiving party can
establish by competent evidence that such Confidential Information:
(a) is already lawfully known to the recipient at the time of
disclosure as documented by recipient; or
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(b) is or becomes generally available to the public other than
through any act or omission of the recipient in breach of this Agreement; or
(c) is acquired by the recipient from a third party having, to
recipient's best knowledge, the lawful right to disclose same; or
(d) is required by law to be disclosed; or
(e) is required to be disclosed in order to exercise rights
granted or retained pursuant to this Agreement, provided that any such
disclosure will be subject to use and disclosure restrictions similar to those
provided herein. Each Party shall use the same efforts to keep secret and
prevent the disclosure of such Confidential Information to parties, other than
its agents, officers, employees and representatives authorized to receive such
Confidential Information and who are bound by use and disclosure restrictions
similar to those provided herein, as it would use with respect to is own
confidential and proprietary information. Confidential Information shall remain
the sole and absolute property of the disclosing party, subject to the rights
granted herein.
11.2 SURVIVAL. In the event this Agreement is terminated for any reason
by either Party, or expires, as provided herein, each Party agrees to return to
the other, and thereafter refrain from using, all Confidential Information given
to it by the other Party, provided that each party may retain one copy of such
information in its law department files solely for evidentiary purposes. All
provisions of this Section shall survive the expiration or termination of this
Agreement.
11.3 PRIOR NOTICE. If a receiving party is required by law or rules or
regulations of any governmental agency or authority or any stock exchange to
disclose Confidential Information of the disclosing party, the receiving party
shall, prior to making any such disclosure, give the
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disclosing party sufficient advance written notice to permit the disclosing
party to seek a protective order or other similar protection with respect to
such Confidential Information, and thereafter shall disclose only the minimum
information which, in the opinion of its counsel, is required to be disclosed in
order to comply with the legal requirements imposed on such party, whether or
not a protective order or other similar protection is obtained, and to the
extent possible, only under conditions of confidentiality.
ARTICLE 12
TRADEDRESS AND PACKAGING
12.1 TRADEMARK. Only ORTHO's Trademark and logo will appear on any
Product and packaging. Both ORTHO's and WFHC's Trademarks and logos will appear
on all jointly used printed promotional materials. Neither Party shall acquire
any rights in the other Party's name or logo on account of the use thereof
pursuant to this Agreement. Neither Party shall use the other Party's trademark
or logo on any promotional, educational and/or training materials without the
consent of the other Party.
ARTICLE 13
TERM-TERMINATION
13.1 INITIAL TERM. This Agreement shall remain in effect during the
Initial Term, unless earlier terminated by either Party in accordance with
Section 13.3 or Section 13.4.
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13.2 EXTENDED TERM. Subject to the Parties' rights to terminate this
Agreement as provided below, WFHC shall have the option to extend the Initial
Term for an additional year until December 31, 2003, provided WFHC has provided
ORTHO notice of its intent to extend the term on or before October 1, 2002 and
has achieved the performance goals recited in Section 13.3.
13.3 PERFORMANCE GOALS WFHC ACHIEVES.
(a) A market share of [*] in the audience (the prescribing
physicians that WFHC's Sales Force was Detailing during the past 3 months) of
[*] share of the Combination HRT Market during the third calendar quarter of
2002 or total [*] prescriptions reach [*] over the twelve rolling months ending
October 1, 2002, and
(b) WFHC Called-on Physicians segment is [*] market share points
higher for [*] than the physician segment called-by the ORTHO Sales Force but
not the WFHC Sales Force and
(c) (N1-M1)-(N2-M2)> [*] over the twelve rolling months ending
October 1, 2002.
13.4 OPTION TO TERMINATE.
(a) Notwithstanding any provision herein to the contrary, ORTHO
shall have the right, at its sole option, to terminate this Agreement as
follows:
(i) upon not less than thirty (30) days' advance written
notice to WFHC in the event there is a change of control of WFHC (a "change of
control" shall be deemed to have occurred if any third party that is not an
Affiliate of WFHC (A) acquires a majority of the shares of WFHC or a right to
control the voting of a majority of WFHC shares, (B) acquire sufficient shares
or the right to control the votes of sufficient shares to enable such third
party to
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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elect a majority of WFHC's Board of Directors, or (C) acquires the power through
share ownership or otherwise to designate a majority of WFHC's Board of
Directors); or
(ii) on a Product-by-Product basis, immediately if ORTHO
fails to obtain or loses applicable regulatory or marketing approval for any of
the Products in the Territory provided that any provision of this Agreement
relating to such terminated Products shall also be terminated ; or
(iii) upon 30 days advanced written notice if either or
both of Mr. Xxxxx Xxxx or Xx. Xxxxxx Xxxxxx are no longer associated with WFHC
(other than as a result of death or disability); or
(iv) upon 30 days written notice if the Launch Date for
[*] does not occur or it is not approved for marketing by the FDA on or before
October 1, 2000 or the Product loses applicable regulatory or marketing
approval; or
(b) Notwithstanding any provision herein to the contrary, WFHC
shall have the right, at its sole option, to terminate this Agreement as
follows:
(i) upon 30 days written notice, if the Launch Date for
[*] does not occur or it is not approved for marketing by the FDA on or before
October 1, 2000 or the Product loses applicable regulatory or marketing
approval; or
(ii) on a Product-by-Product basis, immediately if ORTHO
fails to obtain or loses applicable regulatory or marketing approval for any of
the Products in the Territory provided that any provision of this Agreement
relating to such terminated Products shall also be terminated; or
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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13.5 TERMINATION FOR EVENT OF DEFAULT. Notwithstanding Section 13.1,
either Party may, in addition to exercising any other available legal or
equitable rights or remedies, terminate this Agreement, effective immediately
upon the expiration of any applicable cure period, upon the occurrence of an
Event of Default (as defined below) with respect to the other Party. The term
"Event of Default" with respect to a Party means the occurrence of any of the
following events:
(a) Except as provided in Section 13.4(b) below, the failure of a
Party to comply with or perform any material non-monetary provision of this
Agreement, and such failure remains uncured for sixty (60) days following
written notice of such failure (if such default is cured within the cure period,
such written notice shall be null and void), provided that, if the defaulting
party can establish to the reasonable satisfaction of the other party that it is
diligently and actively pursuing a cure at the expiration of the cure period,
and that the default is reasonably capable of being cured, then the cure period
shall be extended for so long as a cure is being diligently and actively
pursued, not to exceed 120 days in the aggregate. For purposes of this Section
13.4(a), a breach of a "material, non-monetary provision" shall include, but not
be limited to, a failure by WFHC to make at least [*] of its obligated Primary
Presentations for three or more consecutive quarters, provided, however, ORTHO
provided notice to WFHC within sixty (60) days after each of the first and
second consecutive quarter of its intent to terminate under this provision if
performance is not improved.
(b) The failure of a Party to comply with or perform any material
monetary provision of this Agreement, and such failure remains uncured for
thirty (30) days following
* Certain material (indicated by an asterisk) has been omitted from this
document pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange
Commission.
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written notice of such failure (if such default is cured within such period,
such written notice shall be null and void).
(c) A Party (i) becomes generally unable to pay its debts as they
mature, (ii) is the subject of a voluntary or involuntary petition in bankruptcy
or of any other proceeding under bankruptcy, insolvency or similar laws which,
if involuntary, is not dismissed within sixty (60) days of the date filed, (iii)
makes an assignment for the benefit of creditors, (iv) is named in, or its
property is subject to, a suit for the appointment of a receiver which is not
dismissed within sixty (60) days of the date filed, or (v) is dissolved or
liquidated.
13.6 EFFECT OF TERMINATION.
(a) Upon termination or expiration of this Agreement, neither
WFHC nor its Affiliates shall thereafter have any further rights to market,
Detail, promote or sell the Product, except as otherwise specifically provided
herein.
(b) Termination or expiration of this Agreement shall not operate
to release any Party from any obligation or liability incurred under the terms
of this Agreement prior to or upon termination or expiration of this Agreement,
including the payment of any amounts due but unpaid by one Party to the other,
or from any obligations provided for in this Agreement which survive termination
of this Agreement.
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ARTICLE 14
INTELLECTUAL PROPERTY RIGHTS
14.1 RIGHTS. WFHC acknowledges that ORTHO and/or its Affiliates owns and
retains all proprietary and property interests and rights in (a) all Trademarks,
patents, copyrights or other property rights regarding the Product, including,
but not limited to, all regulatory filings and approvals relating to the
Product, and (b) all supporting sales and promotional material. WFHC also
acknowledges that no right or license is granted to WFHC hereunder with respect
to (a) and (b) above, except for the right to use such materials in the
Detailing and promotion of the Product in accordance with the terms of this
Agreement.
14.2 INFRINGEMENT. WFHC shall advise ORTHO promptly upon its becoming
aware of any infringement by a third party of any patent or Trademark related to
the Product. ORTHO may take such commercially reasonable action as may be
required to restrain or otherwise prevent such infringement. WFHC shall
cooperate fully with and as requested by ORTHO, at ORTHO's expense, in ORTHO's
attempt to restrain such infringement.
ARTICLE 15
DISPUTE RESOLUTION
15.1 INITIAL RESOLUTION. In the case of any disputes between the Parties
arising from this Agreement, and in case this Agreement does not provide a
solution for how to resolve such disputes, the Parties shall discuss and
negotiate in good faith a solution acceptable to both Parties
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and in the spirit of this Agreement. If after negotiating in good faith pursuant
to the foregoing sentence, the Parties fail to reach agreement, then the
President of ORTHO and the President of WFHC shall discuss in good faith an
appropriate resolution to the dispute. If these executives fail, after good
faith discussions, to reach an amicable agreement, then either Party may upon
written notice to the other submit to binding arbitration pursuant to Section
15.2.
15.2 ARBITRATION. Any claim, dispute or controversy arising out of or in
connection with or relating to this Agreement, (including, without limitation,
disputes with respect to the rights and obligations of the Parties following
termination) not settled by the procedures set forth in Section 15.1 above or
the breach or alleged breach of a material provision of this Agreement shall be
adjudicated by arbitration in accordance with the Arbitration Proceedings as set
forth in Appendix A attached hereto.
ARTICLE 16
MISCELLANEOUS
16.1 INDEPENDENT CONTRACTOR. The cooperation between the Parties as set
forth in this Agreement will not constitute, nor be construed as constituting, a
partnership or a relationship of agent and principal. Neither Party shall, under
any circumstance, act as, or represent itself to be, a partner, agent or a
representative of the other. Neither Party shall have any responsibility for the
firing, compensation, or employee benefits of the other Party's employees. No
employee or representative of either 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 a contractual or other
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liability on the other Party without said Party's prior authorized written
approval. For all purposes, and notwithstanding any other provision of this
Agreement to the contrary, the legal relationship of the Parties under this
Agreement shall be that of independent contractors.
16.2 NOTICE. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given when personally delivered,
telecommunicated (with confirmation), delivered by overnight courier or mailed
prepaid first class registered or certified mail and addressed to the Party for
whom it is intended at its record address, and such notice shall be effective
upon receipt, if delivered personally, telecommunicated, or by overnight
courier, or shall be effective five (5) days after it is deposited in the mail,
if mailed. The record addresses and facsimile number of the Parties are set
forth below:
If to WFHC: Women First HealthCare, Inc.
00000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX. 00000
Attn: President
Facsimile No.: (000) 000-0000
Phone No.: (000) 000-0000
If to ORTHO: Ortho-XxXxxx Pharmaceutical, Inc.
X.X. Xxxxx #000 Xxxxx
Xxxxxxx, XX 00000-0000
Attn: President
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Facsimile No.: (000) 000-0000
with a copy: Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Office of General Counsel
Facsimile No.: (000) 000-0000
Any Party, at any time, may change its previous record address or facsimile
number by giving written notice of the change to the other Party as herein
provided.
16.3 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the control of the defaulting Party; provided,
however, that the Party claiming force majeure has exerted all reasonable
efforts to avoid such force majeure and has given prompt notice to the other
Party of any such force majeure. The Party giving such notice shall be excused
from such of its obligations hereunder as it is disabled from performing for so
long as it is so disabled; provided, however, that Party commences and continues
to take reasonable and diligent actions to cure or remedy such force majeure. In
the event of any such force majeure event, the Parties shall meet promptly to
determine an equitable solution to the effects of any such event. Force majeure
shall not include a Party's failure to perform any obligation under this
Agreement as a result of any Year 2000
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Problem or any failure to meet its Detail commitment. The term of this Agreement
shall not be extended by any force majeure event.
16.4 ASSIGNMENT. This Agreement shall not be assigned by either Party
without the written consent of the other Party, except that this Agreement may
be assigned in whole or in part to any Affiliate of a Party, provided that (i)
the assigning Party remains obligated for its Affiliate's performance of this
Agreement, and (ii) the assigning Party provides prior written notice to the
other Party of the anticipated assignment. Either Party may assign this
Agreement to any party succeeding (by sale, merger, reverse merger or otherwise)
to substantially all of the business and operations of such Party subject to the
other Party's right to terminate this Agreement pursuant to Article 13.
16.5 MODIFICATION. No modification or amendment hereof shall be valid or
binding upon the Parties hereto unless made in writing and duly executed on
behalf of both of the Parties.
16.6 WAIVERS. Failure of a Party to insist upon the strict performance
of any provision hereof or to exercise any right or remedy shall not be deemed a
waiver of any right or remedy with respect to any existing or subsequent breach
or default.
16.7 GOVERNING LAW. This Agreement shall be construed and the legal
relations between the Parties hereto determined in accordance with the laws of
the State of New York without regard to what laws might otherwise govern under
applicable principles of conflict or choice of law.
16.8 PUBLIC DISCLOSURE. Neither Party shall originate any publicity,
news release or public announcements, written or oral, whether to the public or
press, stockholders or otherwise, relating to this Agreement, including its
existence, the subject matter to which it relates,
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performance under it or any of its terms, to any amendment hereto or
performances hereunder without the prior written consent of the other Party,
save only such announcements that are required by law to be made or that are
otherwise agreed by the Parties. Such announcements shall be brief and factual.
If a Party decides to make an announcement required by law, it will give the
other Party at least ten (10) business days advance notice, where possible, of
the text of the announcement so that the other Party will have an opportunity to
comment upon the announcement. To the extent that the receiving Party reasonably
requests that any information in the materials proposed to be disclosed or
deleted, the disclosing Party shall request confidential treatment of such
information pursuant to Rule 406 of the Securities Act of 1933 or Rule 24b-2 of
the Securities Exchange Act of 1934 as amended, as applicable (or any other
applicable regulation relating to the confidential treatment of information) so
that there be omitted from the materials that are publicly filed any information
that the receiving Party reasonably requests to be deleted, unless in the
opinion of the disclosing Party's legal counsel such Confidential Information is
legally required to be fully disclosed.
16.9 SOLICITATION. During the Term, neither Party shall solicit for
employment any employees of the other Party that have been involved in the
promotion, marketing and sale of the Product. The Parties agree that the term
"solicit" shall not include general solicitations of employment not specifically
directed towards a Party's employees, newspaper or other periodical
advertisements, or general searches conducted by professional recruiting firms.
16.10 PERFORMANCE BY AFFILIATES. Any Party hereto may satisfy any of its
obligation hereunder through any of its Affiliates; provided, however, that each
Party guarantees the performance at all times of any of such Party's obligations
so delegated pursuant to this Section.
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16.11 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties relating to the subject matter covered herein and supersedes
all prior oral or written agreements. No covenants, promises, agreements,
warranties, representations, conditions or understandings, either oral or
written, between the Parties other than as set forth herein.
16.12 LIMITATION OF LIABILITY. Except with respect to the Parties'
respective indemnification obligations for third party claims pursuant to
Sections 10.1 and 10.2, the Parties expressly agree that, with respect to any
claim by either ORTHO or WFHC against the other arising out of any breach of
this Agreement, the liability of the breaching Party to the non-breaching party
for such breach shall be limited under this Agreement or otherwise at law or
equity to direct money damages only, and in no event shall a Party be liable to
the other for indirect, incidental, punitive, exemplary or consequential
damages, even if advised of the possibility of the same.
16.13 BINDING AGREEMENT. This Agreement shall be binding upon, and shall
inure to the benefit of, the respective successors and permitted assigns of the
Parties hereto.
16.14 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable, such invalid or unenforceable provision shall not
affect the validity of the remaining provisions. 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 unless such modification would render such
provision inconsistent with the intent of the Parties.
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16.15 CAPTIONS. All captions herein are for convenience only and shall
not be interpreted as having any substantive meaning.
16.16 SURVIVAL. The provisions of Articles 7, 10, 11 and 15 and the
definitions of Article 1 of this Agreement shall survive the termination or
expiration of this Agreement for a period of five (5) years after such
termination or expiration. The provisions of this Agreement that do not survive
termination or expiration hereof (as the case may be) shall, nonetheless, be
controlling on, and shall be used in construing and interpreting, the rights and
obligations of the Parties hereto with regard to any dispute, controversy or
claim that may arise in connection with this Agreement.
16.17 COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, and may be executed by facsimile. All counterparts shall
collectively constitute one and the same agreement.
16.18 REMEDIES NOT EXCLUSIVE. Except as specifically provided herein,
the remedies under this Agreement shall be cumulative and not alternative, and
the election of one remedy for a breach shall not preclude pursuit of other
remedies.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers or representatives as of
the day and year first above written.
ORTHO-XXXXXX
PHARMACEUTICAL, INC. WOMEN FIRST HEALTHCARE, INC.
By: /s/ By: /s/
------------------------------ --------------------------------
President President
------------------------------ --------------------------------
Date Date
------------------------------ --------------------------------
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APPENDIX A
Arbitration Proceedings
1.1 (a) Any dispute, controversy or claim arising out of or related to
this agreement, or the interpretation, application, breach, termination or
validity thereof, including any claim of inducement by fraud or otherwise,
shall, before submission to arbitration, first be mediated through non-binding
mediation in accordance with the Model Procedures for the Mediation of Business
Disputes promulgated by the Center for Public Resources ("CPR") then in effect,
except where those rules conflict with these provisions, in which case these
provisions control. The mediation shall be conducted in New York, New York and
shall be attended by a senior executive with authority to resolve the dispute
from each of the operating companies that are Parties.
(b) The mediator shall be an attorney specializing in business
litigation who has at least 15 years of experience as a lawyer with a law firm
of over 25 lawyers or was a judge of a court of general jurisdiction and who
shall be appointed from the list of neutrals maintained by CPR.
(c) The Parties shall promptly confer in an effort to select a
mediator by mutual agreement. In the absence of such an agreement, the mediator
shall be selected from a list generated by CPR with each Party having the right
to exercise challenges for cause and two peremptory challenges within three
business days of receiving the CPR list.
(d) The mediator shall confer with the Parties to design
procedures to conclude the mediation within no more than forty-five (45) days
after initiation. Unless agreed upon by the Parties in writing, under no
circumstances shall the commencement of arbitration
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under Section 1.2 hereof be delayed more than forty-five (45) days by the
mediation process specified herein.
(e) Each Party agrees to toll all applicable statutes of
limitation during the mediation process and not to use the period or pendancy of
the mediation to disadvantage the other Party procedurally or otherwise. All
negotiations pursuant to this clause will be confidential and shall be treated
as compromise and settlement negotiations for the purposes of the Federal Rules
of Evidence and all other evidentiary purposes.
(f) Each Party has the right to pursue provisional relief from
any court, such as attachment, preliminary injunction, replevin, etc., to avoid
irreparable harm, maintain the status quo, or preserve the subject matter of the
arbitration, even though mediation has not been commenced or completed.
1.2 (a) Following the mediation procedures set forth in Section 1.1, Any
dispute, claim or controversy arising from or related in any way to this
Agreement or the interpretation, application, breach, termination or validity
thereof, including any claim of inducement of this Agreement by fraud or
otherwise, will be submitted for resolution to arbitration pursuant to the
commercial arbitration rules then pertaining of the Center for Public Resources
("CPR"), except where those rules conflict with these provisions, in which case
these provisions control. The arbitration will be held in New York, New York.
(b) The panel shall consist of three arbitrators chosen from the
CPR Panels of Distinguished Neutrals each of whom is a lawyer specializing in
business litigation with at least 15 years experience with a law firm of over 25
lawyers or was a judge of a court of general jurisdiction.
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(c) The Parties agree to cooperate (1) to obtain selection of the
arbitrators within thirty (30) days of initiation of the arbitration, (2) to
meet with the arbitrators within thirty (30) days of selection and (3) to agree
at that meeting or before upon procedures for discovery and as to the conduct of
the hearing which will result in the hearing being concluded within no more than
nine (9) months after selection of the arbitrators and in the award being
rendered within sixty (60) days of the conclusion of the hearings, or of any
post-hearing briefing, which briefing will be completed by both Parties with
twenty (20) days after the conclusion of the hearings. In the event no such
agreement is reached, the CPR will select arbitrators, allowing appropriate
strikes for reasons of conflict or other cause and three peremptory challenges
for each side. The arbitrators shall set a date for the hearing, commit to the
rendering of the award within sixty (60) days of the conclusion of the evidence
at the hearing, or of any post-hearing briefing (which briefing will be
completed by both sides in no more than twenty (20) days after the conclusion of
the hearings), and provide for discovery according to these time limits, giving
recognition to the understanding of the Parties hereto that they contemplate
reasonable discovery, including document demands and depositions, but that such
discovery be limited so that the time limits specified herein may be met without
undue difficulty. In no event will the arbitrators allow either side to obtain
more than a total of forty (40) hours of deposition testimony from all
witnesses, including both fact and expert witnesses. In the event multiple
hearing days are required, they will be scheduled consecutively to the greatest
extent possible.
(d) The arbitrators shall render their award following the
substantive law of New Jersey. The arbitrators shall render an opinion setting
forth findings of fact and conclusions
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of law with the reasons therefor stated. A transcript of the evidence adduced
at the hearing shall be made and shall, upon request, be made available to
either Party.
e) To the extent possible, the arbitration hearings and award
will be maintained in confidence.
f) Any United States District Court having jurisdiction of the
matter may enter judgment upon any award. In the event the panel's award exceeds
Five Million Dollars (5,000,000) in monetary damages or includes or consists of
equitable relief, then the court shall vacate, modify or correct any award where
the arbitrators' findings of fact are clearly erroneous, and/or where the
arbitrators' conclusions of law are erroneous; in other words, it will undertake
the same review as if it were a federal appellate court reviewing a district
court's findings of fact and conclusions of law rendered after a bench trial. An
award for less than Five Million Dollars (5,000,000) in damages and not
including equitable relief may be vacated, modified or corrected only upon the
grounds specified in the Federal Arbitration Act. The Parties consent to the
jurisdiction of the District Court for the enforcement of these provisions, the
entry of judgment on any award, and the vacatur, modification and correction of
any award as above specified.
(g) Each Party has the right before or during the arbitration to
seek and obtain from the appropriate court provisional remedies such as
attachment, preliminary injunction, replevin, etc. to avoid irreparable harm,
maintain the status quo, or preserve the subject matter of the arbitration.
(h) Each Party hereto waives its right to trial of any issue by
jury.
(i) Each Party hereto waives any claim to punitive, exemplary and
consequential damages from the other.
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APPENDIX B
Education Program
(to be added after the Effective Date)
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APPENDIX C
Sample Calculations
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